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 811-05361
Variable Insurance Products Fund V
(Exact name of registrant as specified in charter)
245 Summer St., Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Scott C. Goebel, Secretary
245 Summer St.
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | December 31 |
| |
Date of reporting period: | June 30, 2014 |
This report on Form N-CSR relates solely to the Registrant's Asset Manager Portfolio, Asset Manager: Growth Portfolio, Freedom 2005 Portfolio, Freedom 2010 Portfolio, Freedom 2015 Portfolio, Freedom 2020 Portfolio, Freedom 2025 Portfolio, Freedom 2030 Portfolio, Freedom 2035 Portfolio, Freedom 2040 Portfolio, Freedom 2045 Portfolio, Freedom 2050 Portfolio, Freedom Income Portfolio, Freedom Lifetime Income I Portfolio, Freedom Lifetime Income II Portfolio, Freedom Lifetime Income III Portfolio, FundsManager 20% Portfolio, FundsManager 50% Portfolio, FundsManager 60%, FundsManager 70% Portfolio, FundsManager 85% Portfolio, Investment Grade Bond Portfolio, Investor Freedom 2005 Portfolio, Investor Freedom 2010 Portfolio, Investor Freedom 2015 Portfolio, Investor Freedom 2020 Portfolio, Investor Freedom 2025 Portfolio, Investor Freedom 2030 Portfolio, Investor Freedom Income Portfolio, Strategic Income Portfolio and VIP Target Volatility Portfolio series (each, a "Fund" and collectively, the "Funds").
Item 1. Reports to Stockholders
Fidelity® Variable Insurance Products:
Asset Manager Portfolio
Semiannual Report
June 30, 2014
(Fidelity Cover Art)
Contents
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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
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. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (January 1, 2014 to June 30, 2014).
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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. 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.
| Annualized
Expense Ratio B | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
Initial Class | .61% | | | |
Actual | | $ 1,000.00 | $ 1,065.40 | $ 3.12 |
HypotheticalA | | $ 1,000.00 | $ 1,021.77 | $ 3.06 |
Service Class | .73% | | | |
Actual | | $ 1,000.00 | $ 1,064.60 | $ 3.74 |
HypotheticalA | | $ 1,000.00 | $ 1,021.17 | $ 3.66 |
Service Class 2 | .88% | | | |
Actual | | $ 1,000.00 | $ 1,063.60 | $ 4.50 |
HypotheticalA | | $ 1,000.00 | $ 1,020.43 | $ 4.41 |
Investor Class | .70% | | | |
Actual | | $ 1,000.00 | $ 1,064.50 | $ 3.58 |
HypotheticalA | | $ 1,000.00 | $ 1,021.32 | $ 3.51 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in each Class' annualized expense ratio.
In addition to the expenses noted above, the Fund also indirectly bears its proportional share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying non-money market Fidelity Central Funds as of their most recent fiscal half year ranged from less than .01% to .20%.
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Central Funds, other than the Commodity Strategy and Money Market Central Funds. |
Top Five Stocks as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Apple, Inc. | 1.4 | 1.8 |
Gilead Sciences, Inc. | 0.8 | 0.9 |
Halliburton Co. | 0.8 | 0.3 |
Facebook, Inc. Class A | 0.7 | 0.5 |
EOG Resources, Inc. | 0.7 | 0.5 |
| 4.4 | |
Top Five Bond Issuers as of June 30, 2014 |
(with maturities greater than one year) | % of fund's
net assets | % of fund's net assets
6 months ago |
U.S. Treasury Obligations | 11.8 | 12.5 |
Fannie Mae | 4.6 | 4.0 |
Ginnie Mae | 1.7 | 2.1 |
Freddie Mac | 1.7 | 2.0 |
Wachovia Bank Commercial Mortgage Trust | 0.5 | 0.7 |
| 20.3 | |
Top Five Market Sectors as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Financials | 14.2 | 15.0 |
Consumer Discretionary | 11.6 | 14.4 |
Health Care | 10.0 | 8.9 |
Energy | 9.3 | 7.2 |
Information Technology | 8.0 | 7.2 |
Asset Allocation (% of fund's net assets) |
As of June 30, 2014* | As of December 31, 2013** |
 | Stock Class and
Equity Futures*** 51.9% | | | Stock Class and
Equity Futures 54.7% | |
 | Bond Class 41.4% | | | Bond Class 41.5% | |
 | Short-Term Class 6.7% | | | Short-Term Class 3.8% | |
* Foreign investments | 23.9% | | ** Foreign investments | 23.0% | |
*** Includes investment in Fidelity Commodity Strategy Central Fund of 0.3%
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Financial Statement categorizations conform to accounting standards and will differ from the pie chart. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.
Percentages in the above tables are adjusted for the effect of TBA Sale Commitments.
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, other than the Commodity Strategy and Money Market Central Funds, is available at advisor.fidelity.com.
Semiannual Report
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 36.5% |
| Shares | | Value |
CONSUMER DISCRETIONARY - 7.8% |
Auto Components - 0.6% |
BorgWarner, Inc. | 28,400 | | $ 1,851,396 |
Delphi Automotive PLC | 75,800 | | 5,210,492 |
Visteon Corp. (a) | 19,800 | | 1,920,798 |
| | 8,982,686 |
Automobiles - 0.2% |
General Motors Co. | 76,000 | | 2,758,800 |
Diversified Consumer Services - 0.2% |
Estacio Participacoes SA | 222,600 | | 2,946,843 |
Hotels, Restaurants & Leisure - 0.7% |
Chipotle Mexican Grill, Inc. (a) | 8,600 | | 5,095,586 |
Fiesta Restaurant Group, Inc. (a) | 42,200 | | 1,958,502 |
Las Vegas Sands Corp. | 26,600 | | 2,027,452 |
MGM Mirage, Inc. (a) | 45,600 | | 1,203,840 |
| | 10,285,380 |
Household Durables - 1.6% |
Barratt Developments PLC | 198,000 | | 1,266,309 |
Bellway PLC | 57,800 | | 1,549,070 |
D.R. Horton, Inc. | 225,300 | | 5,537,874 |
Harman International Industries, Inc. | 37,100 | | 3,985,653 |
KB Home | 227,300 | | 4,245,964 |
PulteGroup, Inc. | 218,200 | | 4,398,912 |
Taylor Morrison Home Corp. (a) | 52,000 | | 1,165,840 |
| | 22,149,622 |
Internet & Catalog Retail - 0.5% |
JD.com, Inc. sponsored ADR (d) | 30,900 | | 880,959 |
priceline.com, Inc. (a) | 4,800 | | 5,774,400 |
| | 6,655,359 |
Media - 2.2% |
CBS Corp. Class B | 94,800 | | 5,890,872 |
Comcast Corp. Class A | 165,600 | | 8,889,408 |
ITV PLC | 727,200 | | 2,217,753 |
Naspers Ltd. Class N | 34,900 | | 4,108,585 |
The Walt Disney Co. | 39,100 | | 3,352,434 |
Time Warner, Inc. | 40,600 | | 2,852,150 |
Twenty-First Century Fox, Inc. Class A | 94,700 | | 3,328,705 |
| | 30,639,907 |
Multiline Retail - 0.3% |
Macy's, Inc. | 76,600 | | 4,444,332 |
Specialty Retail - 0.7% |
Cabela's, Inc. Class A (a) | 46,400 | | 2,895,360 |
Lowe's Companies, Inc. | 32,600 | | 1,564,474 |
TJX Companies, Inc. | 88,400 | | 4,698,460 |
| | 9,158,294 |
Textiles, Apparel & Luxury Goods - 0.8% |
Deckers Outdoor Corp. (a)(d) | 20,600 | | 1,778,398 |
Michael Kors Holdings Ltd. (a) | 56,763 | | 5,032,040 |
|
| Shares | | Value |
PVH Corp. | 14,500 | | $ 1,690,700 |
VF Corp. | 35,400 | | 2,230,200 |
| | 10,731,338 |
TOTAL CONSUMER DISCRETIONARY | | 108,752,561 |
CONSUMER STAPLES - 0.9% |
Beverages - 0.4% |
Monster Beverage Corp. (a) | 86,700 | | 6,158,301 |
Food Products - 0.5% |
Keurig Green Mountain, Inc. | 52,400 | | 6,529,564 |
TOTAL CONSUMER STAPLES | | 12,687,865 |
ENERGY - 5.9% |
Energy Equipment & Services - 0.9% |
Halliburton Co. | 151,600 | | 10,765,116 |
Helmerich & Payne, Inc. | 16,000 | | 1,857,760 |
| | 12,622,876 |
Oil, Gas & Consumable Fuels - 5.0% |
Anadarko Petroleum Corp. | 67,100 | | 7,345,437 |
Canadian Natural Resources Ltd. | 48,800 | | 2,242,317 |
Cheniere Energy, Inc. (a) | 11,200 | | 803,040 |
Cimarex Energy Co. | 35,000 | | 5,021,100 |
Cobalt International Energy, Inc. (a) | 63,100 | | 1,157,885 |
Concho Resources, Inc. (a) | 56,900 | | 8,222,050 |
Continental Resources, Inc. (a) | 39,100 | | 6,179,364 |
EOG Resources, Inc. | 84,200 | | 9,839,612 |
GasLog Ltd. | 64,300 | | 2,050,527 |
Genel Energy PLC (a) | 90,600 | | 1,573,786 |
Hess Corp. | 44,300 | | 4,380,827 |
Phillips 66 Co. | 42,500 | | 3,418,275 |
Pioneer Natural Resources Co. | 39,200 | | 9,008,552 |
Southwestern Energy Co. (a) | 60,400 | | 2,747,596 |
Targa Resources Corp. | 14,000 | | 1,953,980 |
Valero Energy Corp. | 63,000 | | 3,156,300 |
| | 69,100,648 |
TOTAL ENERGY | | 81,723,524 |
FINANCIALS - 3.5% |
Banks - 0.8% |
Bank of America Corp. | 555,300 | | 8,534,961 |
Societe Generale Series A | 36,100 | | 1,891,011 |
UniCredit SpA | 161,700 | | 1,353,958 |
| | 11,779,930 |
Capital Markets - 1.5% |
Ameriprise Financial, Inc. | 22,700 | | 2,724,000 |
Apollo Global Management LLC Class A | 52,700 | | 1,460,844 |
BlackRock, Inc. Class A | 12,400 | | 3,963,040 |
Charles Schwab Corp. | 23,100 | | 622,083 |
KKR & Co. LP | 162,800 | | 3,960,924 |
Common Stocks - continued |
| Shares | | Value |
FINANCIALS - continued |
Capital Markets - continued |
Morgan Stanley, Inc. | 118,500 | | $ 3,831,105 |
The Blackstone Group LP | 136,600 | | 4,567,904 |
| | 21,129,900 |
Consumer Finance - 0.1% |
Springleaf Holdings, Inc. | 63,000 | | 1,634,850 |
Diversified Financial Services - 0.2% |
McGraw Hill Financial, Inc. | 30,400 | | 2,524,112 |
Real Estate Investment Trusts - 0.2% |
Altisource Residential Corp. Class B | 89,666 | | 2,334,006 |
Real Estate Management & Development - 0.4% |
Altisource Asset Management Corp. (a) | 2,200 | | 1,590,732 |
Altisource Portfolio Solutions SA (a) | 30,800 | | 3,529,064 |
| | 5,119,796 |
Thrifts & Mortgage Finance - 0.3% |
Ocwen Financial Corp. (a) | 124,200 | | 4,607,820 |
TOTAL FINANCIALS | | 49,130,414 |
HEALTH CARE - 7.8% |
Biotechnology - 5.6% |
Acorda Therapeutics, Inc. (a) | 70,900 | | 2,390,039 |
Actelion Ltd. | 22,193 | | 2,807,910 |
Aegerion Pharmaceuticals, Inc. (a) | 65,700 | | 2,108,313 |
Alexion Pharmaceuticals, Inc. (a) | 34,500 | | 5,390,625 |
Alnylam Pharmaceuticals, Inc. (a) | 13,700 | | 865,429 |
Amgen, Inc. | 49,600 | | 5,871,152 |
ARIAD Pharmaceuticals, Inc. (a) | 215,600 | | 1,373,372 |
BioCryst Pharmaceuticals, Inc. (a) | 172,000 | | 2,193,000 |
Biogen Idec, Inc. (a) | 25,200 | | 7,945,812 |
BioMarin Pharmaceutical, Inc. (a) | 32,400 | | 2,015,604 |
Celgene Corp. (a) | 33,000 | | 2,834,040 |
Celldex Therapeutics, Inc. (a) | 38,000 | | 620,160 |
Clovis Oncology, Inc. (a) | 18,400 | | 761,944 |
Genmab A/S (a) | 36,100 | | 1,540,840 |
Gilead Sciences, Inc. (a) | 130,000 | | 10,778,300 |
Intercept Pharmaceuticals, Inc. (a) | 21,410 | | 5,066,248 |
InterMune, Inc. (a) | 110,400 | | 4,874,160 |
KYTHERA Biopharmaceuticals, Inc. (a) | 30,900 | | 1,185,633 |
Medivation, Inc. (a) | 99,100 | | 7,638,628 |
Pharmacyclics, Inc. (a) | 18,700 | | 1,677,577 |
Synageva BioPharma Corp. (a) | 46,900 | | 4,915,120 |
uniQure B.V. | 7,800 | | 106,002 |
United Therapeutics Corp. (a) | 24,900 | | 2,203,401 |
| | 77,163,309 |
Health Care Technology - 0.0% |
Medidata Solutions, Inc. (a) | 11,200 | | 479,472 |
Life Sciences Tools & Services - 0.6% |
Illumina, Inc. (a) | 32,500 | | 5,802,550 |
Thermo Fisher Scientific, Inc. | 27,800 | | 3,280,400 |
| | 9,082,950 |
|
| Shares | | Value |
Pharmaceuticals - 1.6% |
AbbVie, Inc. | 13,800 | | $ 778,872 |
Achaogen, Inc. (a) | 27,600 | | 385,296 |
Actavis PLC (a) | 16,600 | | 3,702,630 |
Akorn, Inc. (a) | 11,000 | | 365,750 |
Auxilium Pharmaceuticals, Inc. (a) | 31,700 | | 635,902 |
Jazz Pharmaceuticals PLC (a) | 27,000 | | 3,969,270 |
Ocera Therapeutics, Inc. (a) | 6,700 | | 51,188 |
Pacira Pharmaceuticals, Inc. (a) | 43,900 | | 4,032,654 |
Salix Pharmaceuticals Ltd. (a) | 40,200 | | 4,958,670 |
Shire PLC sponsored ADR | 10,100 | | 2,378,449 |
Tetraphase Pharmaceuticals, Inc. (a) | 11,900 | | 160,531 |
Valeant Pharmaceuticals International (Canada) (a) | 2,550 | | 322,475 |
| | 21,741,687 |
TOTAL HEALTH CARE | | 108,467,418 |
INDUSTRIALS - 2.7% |
Aerospace & Defense - 0.8% |
Alliant Techsystems, Inc. | 5,800 | | 776,736 |
General Dynamics Corp. | 15,900 | | 1,853,145 |
Huntington Ingalls Industries, Inc. | 20,000 | | 1,891,800 |
The Boeing Co. | 51,400 | | 6,539,622 |
| | 11,061,303 |
Airlines - 1.6% |
American Airlines Group, Inc. | 225,100 | | 9,670,296 |
Delta Air Lines, Inc. | 136,825 | | 5,297,864 |
International Consolidated Airlines Group SA CDI (a) | 248,100 | | 1,573,137 |
Southwest Airlines Co. | 195,400 | | 5,248,444 |
| | 21,789,741 |
Machinery - 0.3% |
Caterpillar, Inc. | 37,200 | | 4,042,524 |
TOTAL INDUSTRIALS | | 36,893,568 |
INFORMATION TECHNOLOGY - 6.4% |
Communications Equipment - 0.5% |
Arista Networks, Inc. | 14,900 | | 929,611 |
QUALCOMM, Inc. | 76,200 | | 6,035,040 |
| | 6,964,651 |
Internet Software & Services - 2.4% |
58.com, Inc. ADR | 27,000 | | 1,459,620 |
Bankrate, Inc. (a) | 119,300 | | 2,092,522 |
Cornerstone OnDemand, Inc. (a) | 56,300 | | 2,590,926 |
Facebook, Inc. Class A (a) | 150,821 | | 10,148,745 |
Google, Inc.: | | | |
Class A (a) | 10,800 | | 6,314,436 |
Class C (a) | 9,100 | | 5,235,048 |
Kakaku.com, Inc. | 32,300 | | 566,412 |
Naver Corp. | 3,753 | | 3,096,595 |
Common Stocks - continued |
| Shares | | Value |
INFORMATION TECHNOLOGY - continued |
Internet Software & Services - continued |
Tencent Holdings Ltd. | 116,500 | | $ 1,776,721 |
Twitter, Inc. | 10,200 | | 417,894 |
| | 33,698,919 |
IT Services - 0.8% |
Cognizant Technology Solutions Corp. Class A (a) | 60,900 | | 2,978,619 |
FleetCor Technologies, Inc. (a) | 32,600 | | 4,296,680 |
Visa, Inc. Class A | 16,900 | | 3,560,999 |
| | 10,836,298 |
Semiconductors & Semiconductor Equipment - 0.7% |
Freescale Semiconductor, Inc. (a) | 198,700 | | 4,669,450 |
NXP Semiconductors NV (a) | 67,200 | | 4,447,296 |
| | 9,116,746 |
Software - 0.2% |
Adobe Systems, Inc. (a) | 10,700 | | 774,252 |
CommVault Systems, Inc. (a) | 18,000 | | 885,060 |
King Digital Entertainment PLC (a)(d) | 64,700 | | 1,329,585 |
| | 2,988,897 |
Technology Hardware, Storage & Peripherals - 1.8% |
3D Systems Corp. (a)(d) | 11,500 | | 687,700 |
Apple, Inc. | 209,100 | | 19,431,664 |
Nimble Storage, Inc. (d) | 43,600 | | 1,339,392 |
SanDisk Corp. | 28,300 | | 2,955,369 |
| | 24,414,125 |
TOTAL INFORMATION TECHNOLOGY | | 88,019,636 |
MATERIALS - 1.3% |
Chemicals - 1.3% |
Celanese Corp. Class A | 23,900 | | 1,536,292 |
Eastman Chemical Co. | 29,300 | | 2,559,355 |
Huntsman Corp. | 96,300 | | 2,706,030 |
LyondellBasell Industries NV Class A | 52,500 | | 5,126,625 |
Methanex Corp. | 11,300 | | 698,619 |
The Dow Chemical Co. | 42,200 | | 2,171,612 |
Westlake Chemical Corp. | 39,900 | | 3,342,024 |
| | 18,140,557 |
TELECOMMUNICATION SERVICES - 0.1% |
Wireless Telecommunication Services - 0.1% |
SoftBank Corp. | 16,600 | | 1,237,081 |
UTILITIES - 0.1% |
Independent Power Producers & Energy Traders - 0.1% |
Dynegy, Inc. (a) | 32,000 | | 1,113,600 |
TOTAL COMMON STOCKS (Cost $324,176,234) |
506,166,224
|
Fixed-Income Funds - 43.6% |
| Shares | | Value |
Fidelity Emerging Markets Debt Central Fund (f) | 663,434 | | $ 6,932,887 |
Fidelity Floating Rate Central Fund (f) | 375,917 | | 40,903,565 |
Fidelity High Income Central
Fund 1 (f) | 281,213 | | 29,665,153 |
Fidelity Inflation-Protected Bond Index Central Fund (f) | 134,495 | | 13,594,798 |
Fidelity VIP Investment Grade Central Fund (f) | 4,844,861 | | 514,911,875 |
TOTAL FIXED-INCOME FUNDS (Cost $579,803,093) |
606,008,278
|
Equity Funds - 15.6% |
| | | |
Domestic Equity Funds - 0.3% |
Fidelity Commodity Strategy Central Fund (f) | 384,577 | | 3,911,147 |
International Equity Funds - 15.3% |
Fidelity Emerging Markets Equity Central Fund (f) | 93,866 | | 20,788,483 |
Fidelity International Equity Central Fund (f) | 2,259,103 | | 191,571,942 |
TOTAL INTERNATIONAL EQUITY FUNDS | | 212,360,425 |
TOTAL EQUITY FUNDS (Cost $206,197,786) |
216,271,572
|
U.S. Treasury Obligations - 0.1% |
| Principal Amount | | |
U.S. Treasury Bills, yield at date of purchase 0.03% 7/17/14 (e)
(Cost $1,129,984) | | $ 1,130,000 | | 1,129,992 |
Money Market Funds - 4.5% |
| Shares | | |
Fidelity Cash Central Fund, 0.11% (b) | 58,440,396 | | 58,440,396 |
Fidelity Money Market Central Fund, 0.25% (b) | 22,405 | | 22,405 |
Fidelity Securities Lending Cash Central Fund, 0.10% (b)(c) | 4,254,740 | | 4,254,740 |
TOTAL MONEY MARKET FUNDS (Cost $62,717,541) |
62,717,541
|
TOTAL INVESTMENT PORTFOLIO - 100.3% (Cost $1,174,024,638) | 1,392,293,607 |
NET OTHER ASSETS (LIABILITIES) - (0.3)% | | (4,076,706) |
NET ASSETS - 100% | $ 1,388,216,901 |
Futures Contracts |
| Expiration Date | | Underlying Face Amount at Value | | Unrealized Appreciation/(Depreciation) |
Purchased |
Equity Index Contracts |
36 NYSE E-mini MSCI EAFE Index Contracts | Sept. 2014 | | $ 3,544,020 | | $ 15,962 |
The face value of futures purchased as a percentage of net assets is 0.3% |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $209,999. |
(f) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's website at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, other than the Commodity Strategy Central Fund, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
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 | $ 20,066 |
Fidelity Emerging Markets Debt Central Fund | 173,442 |
Fidelity Emerging Markets Equity Central Fund | 146,453 |
Fidelity Floating Rate Central Fund | 975,709 |
Fidelity High Income Central Fund 1 | 849,634 |
Fidelity International Equity Central Fund | 4,412,952 |
Fidelity Money Market Central Fund | 27 |
Fidelity Securities Lending Cash Central Fund | 47,427 |
Fidelity VIP Investment Grade Central Fund | 7,590,957 |
Total | $ 14,216,667 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value,
beginning of period | Purchases | Sales
Proceeds | Value,
end of
period | % ownership, end of
period |
Fidelity Commodity Strategy Central Fund | $ - | $ 4,020,216 | $ 8,893 | $ 3,911,147 | 1.0% |
Fidelity Emerging Markets Debt Central Fund | 5,241,303 | 1,380,405 | 14,821 | 6,932,887 | 5.4% |
Fidelity Emerging Markets Equity Central Fund | 14,500,197 | 6,070,997 | 730,039 | 20,788,483 | 6.1% |
Fidelity Floating Rate Central Fund | 39,514,745 | 877,007 | 88,928 | 40,903,565 | 2.9% |
Fidelity High Income Central Fund 1 | 28,287,764 | 764,547 | 59,286 | 29,665,153 | 6.4% |
Fidelity Inflation-Protected Bond Index Central Fund | 13,098,693 | 1,506 | 29,642 | 13,594,798 | 6.2% |
Fidelity International Equity Central Fund | 182,657,069 | 4,434,190 | 415,140 | 191,571,942 | 5.9% |
Fidelity VIP Investment Grade Central Fund | 503,515,456 | 31,880,279 | 36,094,476 | 514,911,875 | 12.4% |
Total | $ 786,815,227 | $ 49,429,147 | $ 37,441,225 | $ 822,279,850 | |
Other Information |
The following is a summary of the inputs used, as of June 30, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | | | | |
Equities: | | | | |
Consumer Discretionary | $ 108,752,561 | $ 108,752,561 | $ - | $ - |
Consumer Staples | 12,687,865 | 12,687,865 | - | - |
Energy | 81,723,524 | 81,723,524 | - | - |
Financials | 49,130,414 | 49,130,414 | - | - |
Health Care | 108,467,418 | 108,467,418 | - | - |
Industrials | 36,893,568 | 36,893,568 | - | - |
Information Technology | 88,019,636 | 87,453,224 | 566,412 | - |
Materials | 18,140,557 | 18,140,557 | - | - |
Telecommunication Services | 1,237,081 | - | 1,237,081 | - |
Utilities | 1,113,600 | 1,113,600 | - | - |
U.S. Government and Government Agency Obligations | 1,129,992 | - | 1,129,992 | - |
Fixed-Income Funds | 606,008,278 | 606,008,278 | - | - |
Money Market Funds | 62,717,541 | 62,717,541 | - | - |
Equity Funds | 216,271,572 | 216,271,572 | - | - |
Total Investments in Securities: | $ 1,392,293,607 | $ 1,389,360,121 | $ 2,933,486 | $ - |
Derivative Instruments: | | | | |
Assets | | | | |
Futures Contracts | $ 15,962 | $ 15,962 | $ - | $ - |
Value of Derivative Instruments |
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of June 30, 2014. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements. |
Primary Risk Exposure /
Derivative Type | Value |
| Asset | Liability |
Equity Risk | | |
Futures Contracts (a) | $ 15,962 | $ - |
Total Value of Derivatives | $ 15,962 | $ - |
(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Schedule of Investments. Only the period end receivable or payable for daily variation margin and net unrealized appreciation (depreciation) are presented in the Statement of Assets and Liabilities. |
Other Information |
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Central Funds, other than the Commodity Strategy and Money Market Central Funds. Percentages in the below tables are adjusted for the effect of TBA Sale Commitments. |
The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited): |
U.S. Government and U.S. Government Agency Obligations | 19.8% |
AAA,AA,A | 6.1% |
BBB | 9.8% |
BB | 1.8% |
B | 3.2% |
CCC,CC,C | 0.5% |
D | 0.0%* |
Not Rated | 0.3% |
Equities | 52.2% |
Short-Term Investments and Net Other Assets | 6.3% |
| 100.0% |
* Amount represents less than 0.1% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 76.1% |
United Kingdom | 4.2% |
Japan | 2.3% |
France | 1.6% |
Netherlands | 1.5% |
Germany | 1.3% |
Ireland | 1.1% |
Switzerland | 1.0% |
Australia | 1.0% |
Others (Individually Less Than 1%) | 9.9% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $4,348,843) - See accompanying schedule: Unaffiliated issuers (cost $325,306,218) | $ 507,296,216 | |
Fidelity Central Funds (cost $848,718,420) | 884,997,391 | |
Total Investments (cost $1,174,024,638) | | $ 1,392,293,607 |
Cash | | 304,779 |
Receivable for investments sold | | 2,142,942 |
Receivable for fund shares sold | | 357,876 |
Dividends receivable | | 164,393 |
Distributions receivable from Fidelity Central Funds | | 16,288 |
Receivable for daily variation margin for derivative instruments | | 2,700 |
Other receivables | | 58,708 |
Total assets | | 1,395,341,293 |
| | |
Liabilities | | |
Payable for investments purchased | $ 1,549,922 | |
Payable for fund shares redeemed | 513,604 | |
Accrued management fee | 576,366 | |
Distribution and service plan fees payable | 7,101 | |
Other affiliated payables | 136,002 | |
Other payables and accrued expenses | 86,657 | |
Collateral on securities loaned, at value | 4,254,740 | |
Total liabilities | | 7,124,392 |
| | |
Net Assets | | $ 1,388,216,901 |
Net Assets consist of: | | |
Paid in capital | | $ 1,082,379,484 |
Undistributed net investment income | | 12,251,668 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 75,299,989 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 218,285,760 |
Net Assets | | $ 1,388,216,901 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($1,180,312,544 ÷ 66,849,317 shares) | | $ 17.66 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($7,644,647 ÷ 436,176 shares) | | $ 17.53 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($31,013,407 ÷ 1,791,148 shares) | | $ 17.31 |
| | |
Investor Class:
Net Asset Value, offering price and redemption price per share ($169,246,303 ÷ 9,631,506 shares) | | $ 17.57 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 2,370,729 |
Interest | | 350 |
Income from Fidelity Central Funds | | 14,216,667 |
Total income | | 16,587,746 |
| | |
Expenses | | |
Management fee | $ 3,403,842 | |
Transfer agent fees | 511,423 | |
Distribution and service plan fees | 42,872 | |
Accounting and security lending fees | 275,647 | |
Custodian fees and expenses | 11,011 | |
Independent trustees' compensation | 2,733 | |
Appreciation in deferred trustee compensation account | 124 | |
Audit | 28,127 | |
Legal | 5,267 | |
Miscellaneous | 5,757 | |
Total expenses before reductions | 4,286,803 | |
Expense reductions | (12,678) | 4,274,125 |
Net investment income (loss) | | 12,313,621 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 50,967,296 | |
Fidelity Central Funds | (571,714) | |
Foreign currency transactions | (6,296) | |
Futures contracts | 1,975,116 | |
Total net realized gain (loss) | | 52,364,402 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 22,113,604 | |
Assets and liabilities in foreign currencies | 895 | |
Futures contracts | (1,167,657) | |
Total change in net unrealized appreciation (depreciation) | | 20,946,842 |
Net gain (loss) | | 73,311,244 |
Net increase (decrease) in net assets resulting from operations | | $ 85,624,865 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 12,313,621 | $ 17,857,254 |
Net realized gain (loss) | 52,364,402 | 88,894,030 |
Change in net unrealized appreciation (depreciation) | 20,946,842 | 81,862,641 |
Net increase (decrease) in net assets resulting from operations | 85,624,865 | 188,613,925 |
Distributions to shareholders from net investment income | - | (20,026,284) |
Distributions to shareholders from net realized gain | (52,751,535) | (3,134,591) |
Total distributions | (52,751,535) | (23,160,875) |
Share transactions - net increase (decrease) | 17,259,774 | (91,770,023) |
Total increase (decrease) in net assets | 50,133,104 | 73,683,027 |
| | |
Net Assets | | |
Beginning of period | 1,338,083,797 | 1,264,400,770 |
End of period (including undistributed net investment income of $12,251,668 and distributions in excess of net investment income of $61,953, respectively) | $ 1,388,216,901 | $ 1,338,083,797 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 17.24 | $ 15.17 | $ 13.80 | $ 14.54 | $ 13.00 | $ 10.31 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .16 | .23 | .23 | .28 | .23 | .26 |
Net realized and unrealized gain (loss) | .94 | 2.15 | 1.49 | (.66) | 1.62 | 2.73 |
Total from investment operations | 1.10 | 2.38 | 1.72 | (.38) | 1.85 | 2.99 |
Distributions from net investment income | - | (.26) | (.24) | (.29) | (.24) | (.28) |
Distributions from net realized gain | (.68) | (.04) | (.11) | (.07) | (.07) | (.02) |
Total distributions | (.68) | (.31) I | (.35) | (.36) | (.31) | (.30) |
Net asset value, end of period | $ 17.66 | $ 17.24 | $ 15.17 | $ 13.80 | $ 14.54 | $ 13.00 |
Total Return B, C, D | 6.54% | 15.71% | 12.48% | (2.56)% | 14.26% | 29.11% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .61%A | .62% | .63% | .63% | .63% | .67% |
Expenses net of fee waivers, if any | .61%A | .62% | .63% | .63% | .63% | .67% |
Expenses net of all reductions | .61%A | .61% | .62% | .62% | .62% | .66% |
Net investment income (loss) | 1.83% A | 1.40% | 1.57% | 1.91% | 1.72% | 2.31% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,180,313 | $ 1,160,093 | $ 1,114,021 | $ 1,108,494 | $ 1,279,306 | $ 1,249,955 |
Portfolio turnover rate G | 28% A | 41% | 47% | 56% | 54% | 95% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds ranged from less than .01% to .20%. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. I Total distributions of $.31 per share is comprised of distributions from net investment income of $.264 and distributions from net realized gain of $.041 per share. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 17.13 | $ 15.08 | $ 13.71 | $ 14.45 | $ 12.92 | $ 10.25 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .15 | .21 | .21 | .26 | .22 | .25 |
Net realized and unrealized gain (loss) | .93 | 2.13 | 1.49 | (.65) | 1.60 | 2.71 |
Total from investment operations | 1.08 | 2.34 | 1.70 | (.39) | 1.82 | 2.96 |
Distributions from net investment income | - | (.24) | (.22) | (.28) | (.22) | (.27) |
Distributions from net realized gain | (.68) | (.04) | (.11) | (.07) | (.07) | (.02) |
Total distributions | (.68) | (.29) I | (.33) | (.35) | (.29) | (.29) |
Net asset value, end of period | $ 17.53 | $ 17.13 | $ 15.08 | $ 13.71 | $ 14.45 | $ 12.92 |
Total Return B, C, D | 6.46% | 15.53% | 12.43% | (2.69)% | 14.14% | 28.94% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .73%A | .74% | .74% | .75% | .75% | .79% |
Expenses net of fee waivers, if any | .73%A | .73% | .74% | .74% | .74% | .79% |
Expenses net of all reductions | .73%A | .73% | .73% | .74% | .73% | .78% |
Net investment income (loss) | 1.71%A | 1.28% | 1.45% | 1.79% | 1.60% | 2.18% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 7,645 | $ 7,970 | $ 8,429 | $ 8,042 | $ 8,613 | $ 8,230 |
Portfolio turnover rate G | 28% A | 41% | 47% | 56% | 54% | 95% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds ranged from less than .01% to .20%. GAmount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. I Total distributions of $.29 per share is comprised of distributions from net investment income of $.244 and distributions from net realized gain of $.041 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.94 | $ 14.92 | $ 13.57 | $ 14.30 | $ 12.79 | $ 10.15 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .13 | .18 | .19 | .24 | .19 | .23 |
Net realized and unrealized gain (loss) | .92 | 2.10 | 1.47 | (.65) | 1.59 | 2.68 |
Total from investment operations | 1.05 | 2.28 | 1.66 | (.41) | 1.78 | 2.91 |
Distributions from net investment income | - | (.22) | (.19) | (.25) | (.20) | (.25) |
Distributions from net realized gain | (.68) | (.04) | (.11) | (.07) | (.07) | (.02) |
Total distributions | (.68) | (.26) | (.31) I | (.32) | (.27) | (.27) |
Net asset value, end of period | $ 17.31 | $ 16.94 | $ 14.92 | $ 13.57 | $ 14.30 | $ 12.79 |
Total Return B, C, D | 6.36% | 15.34% | 12.24% | (2.82)% | 13.96% | 28.76% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .88% A | .88% | .89% | .90% | .90% | .93% |
Expenses net of fee waivers, if any | .88% A | .88% | .89% | .89% | .89% | .93% |
Expenses net of all reductions | .87% A | .88% | .88% | .89% | .88% | .92% |
Net investment income (loss) | 1.57% A | 1.14% | 1.30% | 1.64% | 1.46% | 2.04% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 31,013 | $ 31,119 | $ 29,966 | $ 32,508 | $ 39,148 | $ 39,475 |
Portfolio turnover rate G | 28% A | 41% | 47% | 56% | 54% | 95% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds ranged from less than .01% to .20%. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. I Total distributions of $.31 per share is comprised of distributions from net investment income of $.194 and distributions from net realized gain of $.113 per share. |
Financial Highlights - Investor Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 17.17 | $ 15.11 | $ 13.74 | $ 14.49 | $ 12.96 | $ 10.28 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .15 | .21 | .22 | .27 | .22 | .25 |
Net realized and unrealized gain (loss) | .93 | 2.14 | 1.49 | (.67) | 1.61 | 2.73 |
Total from investment operations | 1.08 | 2.35 | 1.71 | (.40) | 1.83 | 2.98 |
Distributions from net investment income | - | (.25) | (.22) | (.28) | (.23) | (.28) |
Distributions from net realized gain | (.68) | (.04) | (.11) | (.07) | (.07) | (.02) |
Total distributions | (.68) | (.29) | (.34) I | (.35) | (.30) | (.30) |
Net asset value, end of period | $ 17.57 | $ 17.17 | $ 15.11 | $ 13.74 | $ 14.49 | $ 12.96 |
Total Return B, C, D | 6.45% | 15.62% | 12.44% | (2.72)% | 14.16% | 29.01% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .70% A | .71% | .71% | .71% | .72% | .77% |
Expenses net of fee waivers, if any | .70% A | .70% | .71% | .71% | .71% | .77% |
Expenses net of all reductions | .69% A | .70% | .70% | .70% | .70% | .76% |
Net investment income (loss) | 1.75% A | 1.31% | 1.48% | 1.82% | 1.63% | 2.21% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 169,246 | $ 138,902 | $ 111,985 | $ 103,290 | $ 98,171 | $ 67,641 |
Portfolio turnover rate G | 28% A | 41% | 47% | 56% | 54% | 95% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds ranged from less than .01% to .20%. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. I Total distributions of $.34 per share is comprised of distributions from net investment income of $.223 and distributions from net realized gain of $.113 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2014 (Unaudited)
1. Organization.
VIP Asset Manager Portfolio (the Fund) is a fund of Variable Insurance Products Fund V (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. Shares of the Fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The Fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares and Investor Class. All classes have equal rights and voting privileges, except for matters affecting a single class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
Based on its investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment Manager | Investment Objective | Investment Practices | Expense Ratio* |
Fidelity Commodity Strategy Central Fund | Geode Capital Management, LLC (Geode) | Seeks to provide investment returns that correspond to the performance of the commodities market. | Investment in commodity-related investments through a wholly-owned subsidiary organized under the laws of the Cayman Islands Futures Swaps | .04% |
Fidelity Emerging Markets Debt Central Fund | FMR Co., Inc. (FMRC) | Seeks high total return by normally investing in debt securities of issuers in emerging markets and other debt investments that are tied economically to emerging markets. | Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | .01% |
Fidelity Emerging Markets Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in equity securities of issuers in emerging markets. | Foreign Securities Futures Restricted Securities | .20% |
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Delayed Delivery & When Issued Securities Foreign Securities Futures Repurchase Agreements | .01% |
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | .00%** |
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Restricted Securities | .00%** |
Fidelity Inflation-Protected Bond Index Central Fund | Fidelity Investment Money Management, Inc. (FIMM) | Seeks to provide investment results that correspond to the performance of the inflation-protected United States Treasury market, and may invest in derivatives. | n/a | .00%** |
Fidelity VIP Investment Grade Central Fund | FIMM | Seeks a high level of current income by normally investing in investment-grade debt securities and repurchase agreements. | Delayed Delivery & When Issued Securities Repurchase Agreements Restricted Securities Swaps | .00%** |
Fidelity Money Market Central Funds | FIMM | Each fund seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | .00%** |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
** Amount represents less than .01%.
Semiannual Report
2. Investments in Fidelity Central Funds - continued
An unaudited holdings listing for each Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through each fund's investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds which contain the significant accounting policies (including investment valuation policies) of those funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of June 30, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency - continued
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's NAV.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to short-term gains distributions from Fidelity Central Funds, futures contracts, foreign currency transactions, partnerships (including allocations from Fidelity Central Funds), in-kind transactions, deferred trustees compensation, capital loss carryforwards 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 investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 251,895,169 |
Gross unrealized depreciation | (21,694,104) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 230,201,065 |
| |
Tax cost | $ 1,162,092,542 |
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts." The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end and is representative of volume of activity during the period. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
During the period the Fund recognized net realized gain (loss) of $1,975,116 and a change in net unrealized appreciation (depreciation) of $(1,167,657) related to its investment in futures contracts. These amounts are included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $183,719,626 and $225,684,276, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .25% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .50% of the Fund's average net assets.
The investment adviser pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.
For the period, total fees, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services were as follows:
Service Class | $ 3,854 |
Service Class 2 | 39,018 |
| $ 42,872 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each class. Each class (with the exception of Investor Class) pays a fee for transfer agent services, typesetting, printing and mailing of shareholder reports, excluding mailing of proxy statements and out of pocket expenses, equal to an annual rate of .07% (.15% for Investor Class) of average net assets. For the period, transfer agent fees for each class, including out of pocket expenses, were as follows:
Initial Class | $ 383,243 |
Service Class | 3,116 |
Service Class 2 | 12,002 |
Investor Class | 113,062 |
| $ 511,423 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $3,081 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,241 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may
Semiannual Report
8. Security Lending - continued
apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. The value of securities loaned to FCM at period end was $199,680. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $47,427, including $93 from securities loaned to FCM.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $12,678 for the period.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
June 30, 2014 | Year ended
December 31, 2013 |
From net investment income | | |
Initial Class | $ - | $ 17,529,160 |
Service Class | - | 113,871 |
Service Class 2 | - | 401,405 |
Investor Class | - | 1,981,848 |
Total | $ - | $ 20,026,284 |
From net realized gain | | |
Initial Class | $ 45,478,632 | $ 2,718,458 |
Service Class | 320,919 | 19,098 |
Service Class 2 | 1,245,999 | 74,370 |
Investor Class | 5,705,985 | 322,665 |
Total | $ 52,751,535 | $ 3,134,591 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended June 30,
2014 | Year ended
December 31,
2013 | Six months ended June 30,
2014 | Year ended
December 31,
2013 |
Initial Class | | | | |
Shares sold | 899,061 | 1,776,839 | $ 15,502,736 | $ 28,728,652 |
Reinvestment of distributions | 2,667,368 | 1,203,663 | 45,478,632 | 20,247,618 |
Shares redeemed | (3,998,100) | (9,115,467) | (68,780,669) | (147,555,356) |
Net increase (decrease) | (431,671) | (6,134,965) | $ (7,799,301) | $ (98,579,086) |
Service Class | | | | |
Shares sold | 24,977 | 38,656 | $ 424,732 | $ 630,181 |
Reinvestment of distributions | 18,956 | 7,957 | 320,919 | 132,969 |
Shares redeemed | (72,993) | (140,439) | (1,254,540) | (2,266,901) |
Net increase (decrease) | (29,060) | (93,826) | $ (508,889) | $ (1,503,751) |
Service Class 2 | | | | |
Shares sold | 134,915 | 208,837 | $ 2,288,919 | $ 3,330,187 |
Reinvestment of distributions | 74,477 | 28,784 | 1,245,999 | 475,775 |
Shares redeemed | (254,907) | (409,882) | (4,318,275) | (6,530,674) |
Net increase (decrease) | (45,515) | (172,261) | $ (783,357) | $ (2,724,712) |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Share Transactions - continued
| Shares | Dollars |
| Six months ended June 30,
2014 | Year ended
December 31,
2013 | Six months ended June 30,
2014 | Year ended
December 31,
2013 |
Investor Class | | | | |
Shares sold | 1,436,936 | 1,350,799 | $ 24,640,061 | $ 21,846,353 |
Reinvestment of distributions | 336,240 | 137,555 | 5,705,985 | 2,304,513 |
Shares redeemed | (231,386) | (808,215) | (3,994,725) | (13,113,340) |
Net increase (decrease) | 1,541,790 | 680,139 | $ 26,351,321 | $ 11,037,526 |
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, the investment adviser or its affiliates were the owners of record of 34% of the total outstanding shares of the Fund and two otherwise unaffiliated shareholders were the owners of record of 28% of the total outstanding shares of the Fund.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research (U.K.) Inc.
Fidelity Investments Money Management, Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
VIPAM-SANN-0814
1.705701.116
Fidelity® Variable Insurance Products:
Asset Manager: Growth Portfolio
Semiannual Report
June 30, 2014
(Fidelity Cover Art)
Contents
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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
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. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listings, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (January 1, 2014 to June 30, 2014).
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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. 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.
| Annualized
Expense RatioB | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
Initial Class | .70% | | | |
Actual | | $ 1,000.00 | $ 1,074.50 | $ 3.60 |
HypotheticalA | | $ 1,000.00 | $ 1,021.32 | $ 3.51 |
Service Class | .80% | | | |
Actual | | $ 1,000.00 | $ 1,073.80 | $ 4.11 |
HypotheticalA | | $ 1,000.00 | $ 1,020.83 | $ 4.01 |
Service Class 2 | 1.01% | | | |
Actual | | $ 1,000.00 | $ 1,072.50 | $ 5.19 |
HypotheticalA | | $ 1,000.00 | $ 1,019.79 | $ 5.06 |
Investor Class | .78% | | | |
Actual | | $ 1,000.00 | $ 1,074.30 | $ 4.01 |
HypotheticalA | | $ 1,000.00 | $ 1,020.93 | $ 3.91 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in each Class' annualized expense ratio.
In addition to the expenses noted above, the Fund also indirectly bears its proportional share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying non-money market Fidelity Central Funds as of their most recent fiscal half year ranged from less than .01% to 0.20%.
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's Central Funds, other than the Commodity Strategy and Money Market Central Funds.
Top Ten Stocks as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Apple, Inc. | 1.9 | 2.4 |
Gilead Sciences, Inc. | 1.1 | 1.2 |
Facebook, Inc. Class A | 1.1 | 0.6 |
Halliburton Co. | 1.1 | 0.4 |
EOG Resources, Inc. | 1.0 | 0.7 |
American Airlines Group, Inc. | 1.0 | 0.8 |
Pioneer Natural Resources Co. | 0.9 | 0.7 |
Comcast Corp. Class A | 0.9 | 0.9 |
Bank of America Corp. | 0.9 | 1.2 |
Concho Resources, Inc. | 0.8 | 0.7 |
| 10.7 | |
Market Sectors as of June 30, 2014 |
(stocks only) | % of fund's
net assets | % of fund's net assets
6 months ago |
Consumer Discretionary | 13.3 | 16.8 |
Health Care | 12.7 | 11.1 |
Financials | 10.4 | 12.6 |
Information Technology | 10.0 | 8.7 |
Energy | 9.8 | 6.9 |
Industrials | 6.1 | 6.6 |
Consumer Staples | 3.8 | 3.8 |
Materials | 3.6 | 2.8 |
Telecommunication Services | 1.2 | 1.6 |
Utilities | 0.9 | 0.7 |
Asset Allocation (% of fund's net assets) |
As of June 30, 2014* | As of December 31, 2013** |
 | Stock Class and
Equity Futures*** 72.2% | | | Stock Class and
Equity Futures 74.5% | |
 | Bond Class 23.8% | | | Bond Class 22.5% | |
 | Short-Term Class 4.0% | | | Short-Term Class 3.0% | |
* Foreign investments | 31.3% | | ** Foreign investments | 30.7% | |
*** Includes investment in Fidelity Commodity Strategy Central Fund of 0.3% |
Asset allocations in the pie charts reflect the categorization of assets as defined in the Fund's prospectus in effect as of the time periods indicated above. Financial Statement categorizations conform to accounting standards and will differ from the pie chart. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable. Percentages in the above tables are adjusted for the effect of TBA Sale Commitments. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, other than the Commodity Strategy and Money Market Central Funds, is available at advisor.fidelity.com. |
Semiannual Report
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 49.6% |
| Shares | | Value |
CONSUMER DISCRETIONARY - 10.7% |
Auto Components - 0.9% |
BorgWarner, Inc. | 5,700 | | $ 371,583 |
Delphi Automotive PLC | 16,000 | | 1,099,840 |
Visteon Corp. (a) | 3,900 | | 378,339 |
| | 1,849,762 |
Automobiles - 0.3% |
General Motors Co. | 15,900 | | 577,170 |
Diversified Consumer Services - 0.3% |
Estacio Participacoes SA | 47,700 | | 631,466 |
Hotels, Restaurants & Leisure - 1.0% |
Chipotle Mexican Grill, Inc. (a) | 1,800 | | 1,066,518 |
Fiesta Restaurant Group, Inc. (a) | 8,000 | | 371,280 |
Las Vegas Sands Corp. | 5,600 | | 426,832 |
MGM Mirage, Inc. (a) | 9,300 | | 245,520 |
| | 2,110,150 |
Household Durables - 2.2% |
Barratt Developments PLC | 39,600 | | 253,262 |
Bellway PLC | 11,500 | | 308,206 |
D.R. Horton, Inc. | 47,400 | | 1,165,092 |
Harman International Industries, Inc. | 7,700 | | 827,211 |
KB Home | 48,000 | | 896,640 |
PulteGroup, Inc. | 46,000 | | 927,360 |
Taylor Morrison Home Corp. (a) | 10,300 | | 230,926 |
| | 4,608,697 |
Internet & Catalog Retail - 0.6% |
JD.com, Inc. sponsored ADR (d) | 5,700 | | 162,507 |
priceline.com, Inc. (a) | 1,000 | | 1,203,000 |
| | 1,365,507 |
Media - 3.0% |
CBS Corp. Class B | 20,000 | | 1,242,800 |
Comcast Corp. Class A | 34,900 | | 1,873,432 |
ITV PLC | 153,200 | | 467,216 |
Naspers Ltd. Class N | 7,300 | | 859,389 |
The Walt Disney Co. | 8,300 | | 711,642 |
Time Warner, Inc. | 8,300 | | 583,075 |
Twenty-First Century Fox, Inc. Class A | 20,000 | | 703,000 |
| | 6,440,554 |
Multiline Retail - 0.4% |
Macy's, Inc. | 16,200 | | 939,924 |
Specialty Retail - 0.9% |
Cabela's, Inc. Class A (a) | 9,800 | | 611,520 |
Lowe's Companies, Inc. | 6,700 | | 321,533 |
TJX Companies, Inc. | 18,700 | | 993,905 |
| | 1,926,958 |
Textiles, Apparel & Luxury Goods - 1.1% |
Deckers Outdoor Corp. (a) | 4,200 | | 362,586 |
Michael Kors Holdings Ltd. (a) | 11,959 | | 1,060,165 |
|
| Shares | | Value |
PVH Corp. | 2,900 | | $ 338,140 |
VF Corp. | 7,500 | | 472,500 |
| | 2,233,391 |
TOTAL CONSUMER DISCRETIONARY | | 22,683,579 |
CONSUMER STAPLES - 1.3% |
Beverages - 0.6% |
Monster Beverage Corp. (a) | 18,300 | | 1,299,849 |
Food Products - 0.7% |
Keurig Green Mountain, Inc. | 11,100 | | 1,383,171 |
TOTAL CONSUMER STAPLES | | 2,683,020 |
ENERGY - 8.1% |
Energy Equipment & Services - 1.3% |
Halliburton Co. | 31,300 | | 2,222,613 |
Helmerich & Payne, Inc. | 3,300 | | 383,163 |
| | 2,605,776 |
Oil, Gas & Consumable Fuels - 6.8% |
Anadarko Petroleum Corp. | 14,200 | | 1,554,474 |
Canadian Natural Resources Ltd. | 9,800 | | 450,301 |
Cheniere Energy, Inc. (a) | 2,200 | | 157,740 |
Cimarex Energy Co. | 7,300 | | 1,047,258 |
Cobalt International Energy, Inc. (a) | 12,500 | | 229,375 |
Concho Resources, Inc. (a) | 11,900 | | 1,719,550 |
Continental Resources, Inc. (a) | 8,200 | | 1,295,928 |
EOG Resources, Inc. | 17,800 | | 2,080,108 |
GasLog Ltd. | 13,500 | | 430,515 |
Genel Energy PLC (a) | 17,700 | | 307,462 |
Hess Corp. | 9,300 | | 919,677 |
Phillips 66 Co. | 8,600 | | 691,698 |
Pioneer Natural Resources Co. | 8,300 | | 1,907,423 |
Southwestern Energy Co. (a) | 12,600 | | 573,174 |
Targa Resources Corp. | 2,900 | | 404,753 |
Valero Energy Corp. | 13,200 | | 661,320 |
| | 14,430,756 |
TOTAL ENERGY | | 17,036,532 |
FINANCIALS - 4.8% |
Banks - 1.2% |
Bank of America Corp. | 117,300 | | 1,802,901 |
Societe Generale Series A | 7,600 | | 398,108 |
UniCredit SpA | 32,900 | | 275,481 |
| | 2,476,490 |
Capital Markets - 2.1% |
Ameriprise Financial, Inc. | 4,700 | | 564,000 |
Apollo Global Management LLC Class A | 11,100 | | 307,692 |
BlackRock, Inc. Class A | 2,600 | | 830,960 |
Charles Schwab Corp. | 4,400 | | 118,492 |
KKR & Co. LP | 30,700 | | 746,931 |
Common Stocks - continued |
| Shares | | Value |
FINANCIALS - continued |
Capital Markets - continued |
Morgan Stanley, Inc. | 25,000 | | $ 808,250 |
The Blackstone Group LP | 28,800 | | 963,072 |
| | 4,339,397 |
Consumer Finance - 0.1% |
Springleaf Holdings, Inc. | 12,100 | | 313,995 |
Diversified Financial Services - 0.2% |
McGraw Hill Financial, Inc. | 6,300 | | 523,089 |
Real Estate Investment Trusts - 0.2% |
Altisource Residential Corp. Class B | 17,600 | | 458,128 |
Real Estate Management & Development - 0.5% |
Altisource Asset Management Corp. (a) | 450 | | 325,377 |
Altisource Portfolio Solutions SA (a) | 6,500 | | 744,770 |
| | 1,070,147 |
Thrifts & Mortgage Finance - 0.5% |
Ocwen Financial Corp. (a) | 26,200 | | 972,020 |
TOTAL FINANCIALS | | 10,153,266 |
HEALTH CARE - 10.5% |
Biotechnology - 7.4% |
Acorda Therapeutics, Inc. (a) | 14,100 | | 475,311 |
Actelion Ltd. | 4,047 | | 512,036 |
Aegerion Pharmaceuticals, Inc. (a) | 12,400 | | 397,916 |
Alexion Pharmaceuticals, Inc. (a) | 7,300 | | 1,140,625 |
Alnylam Pharmaceuticals, Inc. (a) | 2,800 | | 176,876 |
Amgen, Inc. | 10,500 | | 1,242,885 |
ARIAD Pharmaceuticals, Inc. (a) | 40,700 | | 259,259 |
BioCryst Pharmaceuticals, Inc. (a) | 33,700 | | 429,675 |
Biogen Idec, Inc. (a) | 5,300 | | 1,671,143 |
BioMarin Pharmaceutical, Inc. (a) | 6,800 | | 423,028 |
Celgene Corp. (a) | 6,600 | | 566,808 |
Celldex Therapeutics, Inc. (a) | 7,000 | | 114,240 |
Clovis Oncology, Inc. (a) | 3,500 | | 144,935 |
Genmab A/S (a) | 7,100 | | 303,046 |
Gilead Sciences, Inc. (a) | 27,500 | | 2,280,025 |
Intercept Pharmaceuticals, Inc. (a) | 4,030 | | 953,619 |
InterMune, Inc. (a) | 20,900 | | 922,735 |
KYTHERA Biopharmaceuticals, Inc. (a) | 5,600 | | 214,872 |
Medivation, Inc. (a) | 20,200 | | 1,557,016 |
Pharmacyclics, Inc. (a) | 3,800 | | 340,898 |
Synageva BioPharma Corp. (a) | 9,800 | | 1,027,040 |
uniQure B.V. | 1,500 | | 20,385 |
United Therapeutics Corp. (a) | 5,200 | | 460,148 |
| | 15,634,521 |
Health Care Technology - 0.1% |
Medidata Solutions, Inc. (a) | 2,200 | | 94,182 |
Life Sciences Tools & Services - 0.9% |
Illumina, Inc. (a) | 6,900 | | 1,231,926 |
Thermo Fisher Scientific, Inc. | 5,900 | | 696,200 |
| | 1,928,126 |
|
| Shares | | Value |
Pharmaceuticals - 2.1% |
AbbVie, Inc. | 2,900 | | $ 163,676 |
Achaogen, Inc. (a) | 4,100 | | 57,236 |
Actavis PLC (a) | 3,400 | | 758,370 |
Akorn, Inc. (a) | 2,100 | | 69,825 |
Auxilium Pharmaceuticals, Inc. (a) | 5,800 | | 116,348 |
Jazz Pharmaceuticals PLC (a) | 5,300 | | 779,153 |
Ocera Therapeutics, Inc. (a) | 1,300 | | 9,932 |
Pacira Pharmaceuticals, Inc. (a) | 9,200 | | 845,112 |
Salix Pharmaceuticals Ltd. (a) | 8,500 | | 1,048,475 |
Shire PLC sponsored ADR | 2,100 | | 494,529 |
Tetraphase Pharmaceuticals, Inc. (a) | 2,400 | | 32,376 |
Valeant Pharmaceuticals International (Canada) (a) | 506 | | 63,989 |
| | 4,439,021 |
TOTAL HEALTH CARE | | 22,095,850 |
INDUSTRIALS - 3.6% |
Aerospace & Defense - 1.0% |
Alliant Techsystems, Inc. | 1,100 | | 147,312 |
General Dynamics Corp. | 3,100 | | 361,305 |
Huntington Ingalls Industries, Inc. | 3,900 | | 368,901 |
The Boeing Co. | 10,800 | | 1,374,084 |
| | 2,251,602 |
Airlines - 2.2% |
American Airlines Group, Inc. | 47,500 | | 2,040,600 |
Delta Air Lines, Inc. | 28,900 | | 1,119,008 |
International Consolidated Airlines Group SA CDI (a) | 49,100 | | 311,330 |
Southwest Airlines Co. | 41,200 | | 1,106,632 |
| | 4,577,570 |
Machinery - 0.4% |
Caterpillar, Inc. | 7,800 | | 847,626 |
TOTAL INDUSTRIALS | | 7,676,798 |
INFORMATION TECHNOLOGY - 8.6% |
Communications Equipment - 0.7% |
Arista Networks, Inc. | 2,800 | | 174,692 |
QUALCOMM, Inc. | 16,000 | | 1,267,200 |
| | 1,441,892 |
Internet Software & Services - 3.3% |
58.com, Inc. ADR | 5,500 | | 297,330 |
Bankrate, Inc. (a) | 25,200 | | 442,008 |
Cornerstone OnDemand, Inc. (a) | 11,600 | | 533,832 |
Facebook, Inc. Class A (a) | 31,780 | | 2,138,476 |
Google, Inc.: | | | |
Class A (a) | 2,300 | | 1,344,741 |
Class C (a) | 1,900 | | 1,093,032 |
Kakaku.com, Inc. | 6,000 | | 105,216 |
Naver Corp. | 795 | | 655,953 |
Common Stocks - continued |
| Shares | | Value |
INFORMATION TECHNOLOGY - continued |
Internet Software & Services - continued |
Tencent Holdings Ltd. | 24,000 | | $ 366,020 |
Twitter, Inc. | 1,400 | | 57,358 |
| | 7,033,966 |
IT Services - 1.1% |
Cognizant Technology Solutions Corp. Class A (a) | 13,000 | | 635,830 |
FleetCor Technologies, Inc. (a) | 6,400 | | 843,520 |
Visa, Inc. Class A | 3,600 | | 758,556 |
| | 2,237,906 |
Semiconductors & Semiconductor Equipment - 0.8% |
Freescale Semiconductor, Inc. (a) | 40,100 | | 942,350 |
NXP Semiconductors NV (a) | 12,800 | | 847,104 |
| | 1,789,454 |
Software - 0.3% |
Adobe Systems, Inc. (a) | 2,200 | | 159,192 |
CommVault Systems, Inc. (a) | 3,500 | | 172,095 |
King Digital Entertainment PLC (a)(d) | 13,200 | | 271,260 |
| | 602,547 |
Technology Hardware, Storage & Peripherals - 2.4% |
3D Systems Corp. (a)(d) | 2,150 | | 128,570 |
Apple, Inc. | 44,100 | | 4,098,212 |
Nimble Storage, Inc. (d) | 8,400 | | 258,048 |
SanDisk Corp. | 5,900 | | 616,137 |
| | 5,100,967 |
TOTAL INFORMATION TECHNOLOGY | | 18,206,732 |
MATERIALS - 1.8% |
Chemicals - 1.8% |
Celanese Corp. Class A | 4,800 | | 308,544 |
Eastman Chemical Co. | 6,300 | | 550,305 |
Huntsman Corp. | 19,700 | | 553,570 |
LyondellBasell Industries NV Class A | 11,100 | | 1,083,915 |
Methanex Corp. | 2,300 | | 142,197 |
The Dow Chemical Co. | 8,700 | | 447,702 |
Westlake Chemical Corp. | 8,500 | | 711,960 |
| | 3,798,193 |
TELECOMMUNICATION SERVICES - 0.1% |
Wireless Telecommunication Services - 0.1% |
SoftBank Corp. | 3,200 | | 238,474 |
UTILITIES - 0.1% |
Independent Power Producers & Energy Traders - 0.1% |
Dynegy, Inc. (a) | 6,500 | | 226,200 |
TOTAL COMMON STOCKS (Cost $67,957,185) |
104,798,644
|
Fixed-Income Funds - 25.0% |
| Shares | | Value |
Fidelity Emerging Markets Debt Central Fund (e) | 99,101 | | $ 1,035,605 |
Fidelity Floating Rate Central Fund (e) | 16,523 | | 1,797,913 |
Fidelity High Income Central Fund 1 (e) | 36,038 | | 3,801,627 |
Fidelity Inflation-Protected Bond Index Central Fund (e) | 17,868 | | 1,806,061 |
Fidelity VIP Investment Grade Central Fund (e) | 418,976 | | 44,528,766 |
TOTAL FIXED-INCOME FUNDS (Cost $50,554,834) |
52,969,972
|
Equity Funds - 23.3% |
| | | |
Domestic Equity Funds - 0.3% |
Fidelity Commodity Strategy Central Fund (e) | 57,416 | | 583,923 |
International Equity Funds - 23.0% |
Fidelity Emerging Markets Equity Central Fund (e) | 21,847 | | 4,838,370 |
Fidelity International Equity Central Fund (e) | 515,865 | | 43,745,334 |
TOTAL INTERNATIONAL EQUITY FUNDS | | 48,583,704 |
TOTAL EQUITY FUNDS (Cost $48,694,879) |
49,167,627
|
U.S. Treasury Obligations - 0.1% |
| Principal Amount | | |
U.S. Treasury Bills, yield at date of purchase 0.03% 7/17/14
(Cost $159,998) | | $ 160,000 | |
159,999
|
Money Market Funds - 2.3% |
| Shares | | |
Fidelity Cash Central Fund, 0.11% (b) | 4,118,395 | | 4,118,395 |
Fidelity Securities Lending Cash Central Fund, 0.10% (b)(c) | 766,300 | | 766,300 |
TOTAL MONEY MARKET FUNDS (Cost $4,884,695) |
4,884,695
|
TOTAL INVESTMENT PORTFOLIO - 100.3% (Cost $172,251,591) | 211,980,937 |
NET OTHER ASSETS (LIABILITIES) - (0.3)% | | (720,607) |
NET ASSETS - 100% | $ 211,260,330 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's website at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, other than the Commodity Strategy Central Fund, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund | Income earned |
Fidelity Cash Central Fund | $ 2,531 |
Fidelity Emerging Markets Debt Central Fund | 9,476 |
Fidelity Emerging Markets Equity Central Fund | 36,830 |
Fidelity Floating Rate Central Fund | 42,709 |
Fidelity High Income Central Fund 1 | 108,460 |
Fidelity International Equity Central Fund | 1,001,812 |
Fidelity Securities Lending Cash Central Fund | 10,260 |
Fidelity VIP Investment Grade Central Fund | 615,053 |
Total | $ 1,827,131 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value,
beginning of
period | Purchases | Sales
Proceeds | Value,
end of
period | % ownership, end of
period |
Fidelity Commodity Strategy Central Fund | $ - | $ 599,172 | $ 331 | $ 583,923 | 0.2% |
Fidelity Emerging Markets Debt Central Fund | - | 1,010,651 | 552 | 1,035,605 | 0.8% |
Fidelity Emerging Markets Equity Central Fund | 3,876,174 | 736,839 | 2,538 | 4,838,370 | 1.4% |
Fidelity Floating Rate Central Fund | 1,729,435 | 47,815 | 1,105 | 1,797,913 | 0.1% |
Fidelity High Income Central Fund 1 | 3,610,651 | 118,679 | 2,210 | 3,801,627 | 0.8% |
Fidelity Inflation-Protected Bond Index Central Fund | 1,732,704 | 5,099 | 1,105 | 1,806,061 | 0.8% |
Fidelity International Equity Central Fund | 39,332,329 | 3,306,182 | 22,875 | 43,745,334 | 1.3% |
Fidelity VIP Investment Grade Central Fund | 38,764,800 | 8,092,921 | 3,520,103 | 44,528,766 | 1.1% |
Total | $ 89,046,093 | $ 13,917,358 | $ 3,550,819 | $ 102,137,599 | |
Other Information |
The following is a summary of the inputs used, as of June 30, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | | | | |
Equities: | | | | |
Consumer Discretionary | $ 22,683,579 | $ 22,683,579 | $ - | $ - |
Consumer Staples | 2,683,020 | 2,683,020 | - | - |
Energy | 17,036,532 | 17,036,532 | - | - |
Financials | 10,153,266 | 10,153,266 | - | - |
Health Care | 22,095,850 | 22,095,850 | - | - |
Industrials | 7,676,798 | 7,676,798 | - | - |
Information Technology | 18,206,732 | 18,101,516 | 105,216 | - |
Materials | 3,798,193 | 3,798,193 | - | - |
Telecommunication Services | 238,474 | - | 238,474 | - |
Utilities | 226,200 | 226,200 | - | - |
U.S. Government and Government Agency Obligations | 159,999 | - | 159,999 | - |
Fixed-Income Funds | 52,969,972 | 52,969,972 | - | - |
Money Market Funds | 4,884,695 | 4,884,695 | - | - |
Equity Funds | 49,167,627 | 49,167,627 | - | - |
Total Investments in Securities: | $ 211,980,937 | $ 211,477,248 | $ 503,689 | $ - |
Other Information |
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity Central Funds, other than the Commodity Strategy and Money Market Central Funds. Percentages in the below tables are adjusted for the effect of TBA Sale Commitments. |
The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited): |
U.S. Government and U.S. Government Agency Obligations | 11.5% |
AAA,AA,A | 3.2% |
BBB | 6.3% |
BB | 1.0% |
B | 1.5% |
CCC,CC,C | 0.5% |
D | 0.0%* |
Not Rated | 0.2% |
Equities | 71.8% |
Short-Term Investments and Net Other Assets | 4.0% |
| 100.0% |
* Amount represents less than 0.1% |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes. Percentages are adjusted for the effect of futures contracts, if applicable. |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 68.7% |
United Kingdom | 5.2% |
Japan | 3.4% |
France | 2.5% |
Germany | 1.7% |
Netherlands | 1.6% |
Ireland | 1.4% |
Switzerland | 1.3% |
Bailiwick of Jersey | 1.3% |
Australia | 1.2% |
Others (Individually Less Than 1%) | 11.7% |
| 100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (including securities loaned of $793,246) - See accompanying schedule: Unaffiliated issuers (cost $68,117,183) | $ 104,958,643 | |
Fidelity Central Funds (cost $104,134,408) | 107,022,294 | |
Total Investments (cost $172,251,591) | | $ 211,980,937 |
Cash | | 32,244 |
Receivable for investments sold | | 416,841 |
Receivable for fund shares sold | | 73,744 |
Dividends receivable | | 37,329 |
Distributions receivable from Fidelity Central Funds | | 89,021 |
Other receivables | | 4,574 |
Total assets | | 212,634,690 |
| | |
Liabilities | | |
Payable for investments purchased | $ 416,766 | |
Payable for fund shares redeemed | 17,313 | |
Accrued management fee | 95,865 | |
Distribution and service plan fees payable | 1,095 | |
Other affiliated payables | 24,904 | |
Other payables and accrued expenses | 52,117 | |
Collateral on securities loaned, at value | 766,300 | |
Total liabilities | | 1,374,360 |
| | |
Net Assets | | $ 211,260,330 |
Net Assets consist of: | | |
Paid in capital | | $ 173,689,811 |
Undistributed net investment income | | 1,564,913 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (3,723,860) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 39,729,466 |
Net Assets | | $ 211,260,330 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($131,704,191 ÷ 6,699,848 shares) | | $ 19.66 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($3,427,206 ÷ 175,489 shares) | | $ 19.53 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($3,852,412 ÷ 198,445 shares) | | $ 19.41 |
| | |
Investor Class:
Net Asset Value, offering price and redemption price per share ($72,276,521 ÷ 3,693,721 shares) | | $ 19.57 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 468,641 |
Interest | | 48 |
Income from Fidelity Central Funds | | 1,827,131 |
Total income | | 2,295,820 |
| | |
Expenses | | |
Management fee | $ 552,624 | |
Transfer agent fees | 96,270 | |
Distribution and service plan fees | 6,442 | |
Accounting and security lending fees | 49,638 | |
Custodian fees and expenses | 5,612 | |
Independent trustees' compensation | 395 | |
Audit | 26,272 | |
Legal | 652 | |
Miscellaneous | 736 | |
Total expenses before reductions | 738,641 | |
Expense reductions | (2,571) | 736,070 |
Net investment income (loss) | | 1,559,750 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 7,503,357 | |
Fidelity Central Funds | (167,655) | |
Foreign currency transactions | (1,296) | |
Futures contracts | 276,754 | |
Total net realized gain (loss) | | 7,611,160 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 5,428,695 | |
Assets and liabilities in foreign currencies | 144 | |
Futures contracts | (187,769) | |
Total change in net unrealized appreciation (depreciation) | | 5,241,070 |
Net gain (loss) | | 12,852,230 |
Net increase (decrease) in net assets resulting from operations | | $ 14,411,980 |
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 1,559,750 | $ 1,774,763 |
Net realized gain (loss) | 7,611,160 | 13,360,855 |
Change in net unrealized appreciation (depreciation) | 5,241,070 | 20,156,048 |
Net increase (decrease) in net assets resulting from operations | 14,411,980 | 35,291,666 |
Distributions to shareholders from net investment income | - | (1,787,949) |
Distributions to shareholders from net realized gain | (31,618) | (498,676) |
Total distributions | (31,618) | (2,286,625) |
Share transactions - net increase (decrease) | 4,345,920 | (1,458,791) |
Total increase (decrease) in net assets | 18,726,282 | 31,546,250 |
| | |
Net Assets | | |
Beginning of period | 192,534,048 | 160,987,798 |
End of period (including undistributed net investment income of $1,564,913 and undistributed net investment income of $5,163, respectively) | $ 211,260,330 | $ 192,534,048 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.30 | $ 15.14 | $ 13.35 | $ 14.52 | $ 12.66 | $ 9.68 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .15 | .17 | .19 | .22 | .16 | .17 |
Net realized and unrealized gain (loss) | 1.21 | 3.22 | 1.87 | (1.12) | 1.91 | 3.01 |
Total from investment operations | 1.36 | 3.39 | 2.06 | (.90) | 2.07 | 3.18 |
Distributions from net investment income | - | (.18) | (.21) | (.24) | (.16) | (.18) |
Distributions from net realized gain | -I | (.05) | (.06) | (.03) | (.05) | (.02) |
Total distributions | -I | (.23) | (.27) | (.27) | (.21) | (.20) |
Net asset value, end of period | $ 19.66 | $ 18.30 | $ 15.14 | $ 13.35 | $ 14.52 | $ 12.66 |
Total Return B, C, D | 7.45% | 22.41% | 15.45% | (6.17)% | 16.34% | 32.91% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .70%A | .72% | .72% | .73% | .74% | .78% |
Expenses net of fee waivers, if any | .70%A | .71% | .72% | .72% | .73% | .78% |
Expenses net of all reductions | .70%A | .71% | .71% | .71% | .72% | .77% |
Net investment income (loss) | 1.59%A | 1.05% | 1.29% | 1.49% | 1.20% | 1.57% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 131,704 | $ 127,423 | $ 116,252 | $ 113,899 | $ 138,051 | $ 136,479 |
Portfolio turnover rate G | 32%A | 52% | 59% | 71% | 68% | 126% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds ranged from less than .01% to .20%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount represents less than $.01 per share.
Financial Highlights - Service Class
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.19 | $ 15.04 | $ 13.26 | $ 14.42 | $ 12.58 | $ 9.62 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .14 | .16 | .17 | .20 | .14 | .16 |
Net realized and unrealized gain (loss) | 1.20 | 3.19 | 1.86 | (1.11) | 1.89 | 2.99 |
Total from investment operations | 1.34 | 3.35 | 2.03 | (.91) | 2.03 | 3.15 |
Distributions from net investment income | - | (.15) | (.20) | (.22) | (.15) | (.17) |
Distributions from net realized gain | - I | (.05) | (.06) | (.03) | (.05) | (.02) |
Total distributions | - I | (.20) | (.25)J | (.25) | (.19)K | (.19) |
Net asset value, end of period | $ 19.53 | $ 18.19 | $ 15.04 | $ 13.26 | $ 14.42 | $ 12.58 |
Total Return B, C, D | 7.38% | 22.34% | 15.34% | (6.26)% | 16.18% | 32.79% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .80%A | .82% | .82% | .83% | .84% | .88% |
Expenses net of fee waivers, if any | .80%A | .82% | .82% | .82% | .84% | .88% |
Expenses net of all reductions | .80%A | .81% | .81% | .81% | .82% | .87% |
Net investment income (loss) | 1.49%A | .95% | 1.19% | 1.39% | 1.09% | 1.47% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 3,427 | $ 3,191 | $ 3,541 | $ 5,654 | $ 3,999 | $ 3,838 |
Portfolio turnover rate G | 32%A | 52% | 59% | 71% | 68% | 126% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds ranged from less than .01% to .20%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount represents less than $.01 per share.
J Total distributions of $.25 per share is comprised of distributions from net investment income of $.195 and distributions from net realized gain of $.055 per share.
K Total distributions of $.19 per share is comprised of distributions from net investment income of $.148 and distributions from net realized gain of $.045 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.10 | $ 14.97 | $ 13.21 | $ 14.36 | $ 12.51 | $ 9.57 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .12 | .12 | .14 | .17 | .12 | .14 |
Net realized and unrealized gain (loss) | 1.19 | 3.18 | 1.84 | (1.09) | 1.88 | 2.97 |
Total from investment operations | 1.31 | 3.30 | 1.98 | (.92) | 2.00 | 3.11 |
Distributions from net investment income | - | (.12) | (.17) | (.20) | (.11) | (.15) |
Distributions from net realized gain | - I | (.05) | (.06) | (.03) | (.05) | (.02) |
Total distributions | - I | (.17) | (.22)J | (.23) | (.15)K | (.17) |
Net asset value, end of period | $ 19.41 | $ 18.10 | $ 14.97 | $ 13.21 | $ 14.36 | $ 12.51 |
Total Return B, C, D | 7.25% | 22.09% | 15.03% | (6.39)% | 16.02% | 32.55% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | 1.01%A | 1.03% | 1.04% | 1.01% | 1.02% | 1.06% |
Expenses net of fee waivers, if any | 1.01%A | 1.02% | 1.04% | 1.01% | 1.02% | 1.06% |
Expenses net of all reductions | 1.01%A | 1.02% | 1.03% | 1.00% | 1.00% | 1.05% |
Net investment income (loss) | 1.28%A | .74% | .97% | 1.20% | .91% | 1.29% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 3,852 | $ 3,626 | $ 3,621 | $ 3,260 | $ 6,046 | $ 8,139 |
Portfolio turnover rate G | 32%A | 52% | 59% | 71% | 68% | 126% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds ranged from less than .01% to .20%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount represents less than $.01 per share.
J Total distributions of $.22 per share is comprised of distributions from net investment income of $.167 and distributions from net realized gain of $.055 per share.
K Total distributions of $.15 per share is comprised of distributions from net investment income of $.108 and distributions from net realized gain of $.045 per share.
Financial Highlights - Investor Class
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.22 | $ 15.08 | $ 13.30 | $ 14.46 | $ 12.61 | $ 9.65 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .14 | .16 | .18 | .20 | .15 | .16 |
Net realized and unrealized gain (loss) | 1.21 | 3.20 | 1.86 | (1.10) | 1.90 | 2.99 |
Total from investment operations | 1.35 | 3.36 | 2.04 | (.90) | 2.05 | 3.15 |
Distributions from net investment income | - | (.17) | (.20) | (.23) | (.15) | (.17) |
Distributions from net realized gain | -I | (.05) | (.06) | (.03) | (.05) | (.02) |
Total distributions | -I | (.22) | (.26) | (.26) | (.20) | (.19) |
Net asset value, end of period | $ 19.57 | $ 18.22 | $ 15.08 | $ 13.30 | $ 14.46 | $ 12.61 |
Total ReturnB, C, D | 7.43% | 22.30% | 15.34% | (6.20)% | 16.25% | 32.68% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .78%A | .80% | .81% | .81% | .83% | .89% |
Expenses net of fee waivers, if any | .78%A | .80% | .81% | .81% | .82% | .89% |
Expenses net of all reductions | .78%A | .79% | .79% | .80% | .81% | .87% |
Net investment income (loss) | 1.51%A | .97% | 1.21% | 1.41% | 1.11% | 1.47% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 72,277 | $ 58,295 | $ 37,574 | $ 36,235 | $ 33,627 | $ 26,307 |
Portfolio turnover rateG | 32%A | 52% | 59% | 71% | 68% | 126% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds ranged from less than .01% to .20%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
I Amount 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 June 30, 2014 (Unaudited)
1. Organization.
VIP Asset Manager: Growth Portfolio (the Fund) is a fund of Variable Insurance Products Fund V (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. Shares of the Fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The Fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares and Investor Class shares. All classes have equal rights and voting privileges, except for matters affecting a single class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, 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.
Based on its investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.
Fidelity Central Fund | Investment Manager | Investment Objective | Investment Practices | Expense Ratio* |
Fidelity Commodity Strategy Central Fund | Geode Capital Management, LLC (Geode) | Seeks to provide investment returns that correspond to the performance of the commodities market. | Investment in commodity-related investments through a wholly-owned subsidiary organized under the laws of the Cayman Islands Futures Swaps | .04% |
Fidelity Emerging Markets Debt Central Fund | FMR Co., Inc. (FMRC) | Seeks high total return by normally investing in debt securities of issuers in emerging markets and other debt investments that are tied economically to emerging markets. | Foreign Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | .00%** |
Fidelity Emerging Markets Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in equity securities of issuers in emerging markets. | Foreign Securities Futures Restricted Securities | .20% |
Fidelity International Equity Central Fund | FMRC | Seeks capital appreciation by investing primarily in non-U.S. based common stocks, including securities of issuers located in emerging markets. | Delayed Delivery & When Issued Securities Foreign Securities Futures Repurchase Agreements | .01% |
Fidelity Floating Rate Central Fund | FMRC | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | .00%** |
Fidelity High Income Central Fund 1 | FMRC | Seeks a high level of income and may also seek capital appreciation by investing primarily in debt securities, preferred stocks, and convertible securities, with an emphasis on lower-quality debt securities. | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Restricted Securities | .00%** |
Fidelity Inflation-Protected Bond Index Central Fund | Fidelity Investment Money Management, Inc. (FIMM) | Seeks to provide investment results that correspond to the performance of the inflation-protected United States Treasury market, and may invest in derivatives. | | .00%** |
Fidelity VIP Investment Grade Central Fund | FIMM | Seeks a high level of current income by normally investing in investment-grade debt securities and repurchase agreements. | Delayed Delivery & When Issued Securities Repurchase Agreements Restricted Securities Swaps | .00%** |
Fidelity Money Market Central Funds | FIMM | Each fund seeks to obtain a high level of current income consistent with the preservation of capital and liquidity. | Short-term Investments | .00%** |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
** Amount represents less than .01%.
An unaudited holdings listing for each Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through each fund's investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete
Semiannual Report
2. Investments in Fidelity Central Funds - continued
unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds which contain the significant accounting policies (including investment valuation policies) of those funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of June 30, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the Fidelity Central Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Fidelity Central Funds' expenses through the impact of these expenses on each Fidelity Central Fund's NAV.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to the short-term gain distributions from the Fidelity Central Funds, futures contracts, foreign currency transactions, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 45,040,731 |
Gross unrealized depreciation | (4,916,436) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 40,124,295 |
| |
Tax cost | $ 171,856,642 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
Fiscal year of expiration | |
2017 | $ (18,888,513) |
Semiannual Report
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts." The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end.
During the period the Fund recognized net realized gain (loss) of $276,754 and a change in net unrealized appreciation (depreciation) of $(187,769) related to its investment in futures contracts. These amounts are included in the Statement of Operations.
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Equity and Fixed-Income Central Funds), other than short-term securities, aggregated $40,318,552 and $31,767,941, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .25% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .55% of the Fund's average net assets.
The investment adviser pays a portion of the management fees received from the Fund to the Fidelity Central Funds' investment advisers, who are also affiliates, for managing the assets of the Fidelity Central Funds.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.
For the period, total fees, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services were as follows:
Service Class | $ 1,674 |
Service Class 2 | 4,768 |
| $ 6,442 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each class. Each class (with the exception of Investor Class) pays a fee for transfer agent services, typesetting, printing and mailing of shareholder reports, excluding mailing of proxy statements and out of pocket expenses, equal to an annual rate of .07% ( .15% for Investor Class) of average net assets. For the period, transfer agent fees for each class, including out of pocket expenses, were as follows:
Initial Class | $ 44,282 |
Service Class | 1,185 |
Service Class 2 | 2,386 |
Investor Class | 48,417 |
| $ 96,270 |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $511 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $177 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $10,260. During the period, there were no securities loaned to FCM.
Semiannual Report
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $2,571 for the period.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
June 30,
2014 | Year ended
December 31,
2013 |
From net investment income | | |
Initial Class | $ - | $ 1,223,555 |
Service Class | - | 26,731 |
Service Class 2 | - | 24,103 |
Investor Class | - | 513,560 |
Total | $ - | $ 1,787,949 |
From net realized gain | | |
Initial Class | $ 20,600 | $ 335,311 |
Service Class | 545 | 8,656 |
Service Class 2 | 619 | 9,703 |
Investor Class | 9,854 | 145,006 |
Total | $ 31,618 | $ 498,676 |
11. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
June 30,
2014 | Year ended
December 31,
2013 | Six months ended
June 30,
2014 | Year ended
December 31,
2013 |
Initial Class | | | | |
Shares sold | 79,650 | 254,258 | $ 1,504,269 | $ 4,235,828 |
Reinvestment of distributions | 1,091 | 88,376 | 20,600 | 1,558,866 |
Shares redeemed | (345,338) | (1,057,265) | (6,491,158) | (17,597,555) |
Net increase (decrease) | (264,597) | (714,631) | $ (4,966,289) | $ (11,802,861) |
Service Class | | | | |
Shares sold | 9,836 | 7,813 | $ 180,332 | $ 123,295 |
Reinvestment of distributions | 29 | 2,020 | 545 | 35,387 |
Shares redeemed | (9,822) | (69,763) | (183,503) | (1,172,829) |
Net increase (decrease) | 43 | (59,930) | $ (2,626) | $ (1,014,147) |
Service Class 2 | | | | |
Shares sold | 21,193 | 38,367 | $ 394,051 | $ 623,037 |
Reinvestment of distributions | 33 | 1,940 | 619 | 33,806 |
Shares redeemed | (23,150) | (81,713) | (434,733) | (1,327,456) |
Net increase (decrease) | (1,924) | (41,406) | $ (40,063) | $ (670,613) |
Investor Class | | | | |
Shares sold | 648,867 | 876,640 | $ 12,250,581 | $ 14,728,602 |
Reinvestment of distributions | 524 | 37,462 | 9,854 | 658,566 |
Shares redeemed | (155,272) | (206,156) | (2,905,537) | (3,358,338) |
Net increase (decrease) | 494,119 | 707,946 | $ 9,354,898 | $ 12,028,830 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
12. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, the investment adviser or its affiliates were the owners of record of 82% of the total outstanding shares of the Fund.
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 Investments Money Management, Inc.
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
VIPAMG-SANN-0814
1.705700.116
Fidelity® Variable Insurance Products:
Freedom Funds -
Income, 2005, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050
Semiannual Report
June 30, 2014
(Fidelity Cover Art)
Contents
Semiannual Report
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
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. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the funds nor Fidelity Distributors Corporation is a bank.
Semiannual Report
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including 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 Funds 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 (January 1, 2014 to June 30, 2014).
Actual Expenses
The first line of the accompanying table for each class of each 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, each Fund, as a shareholder in underlying Fidelity Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Funds. These fees and expenses are not included in each Fund's annualized expense ratio used to calculate the expense estimates in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of each 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, each Fund, as a shareholder in underlying Fidelity Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Funds. These fees and expenses are not included in each Fund's annualized expense ratio used to calculate the expense estimates 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.
| Annualized
Expense Ratio B | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
VIP Freedom Income | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,032.40 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,031.50 | $ .50 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,031.60 | $ 1.26 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
VIP Freedom 2005 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,039.30 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,038.10 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,037.50 | $ 1.26 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
| Annualized
Expense Ratio B | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
VIP Freedom 2010 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,041.90 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,041.10 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,040.50 | $ 1.26 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
VIP Freedom 2015 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,043.90 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,044.00 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,043.30 | $ 1.27 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
VIP Freedom 2020 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,046.70 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,046.00 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,045.40 | $ 1.27 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
VIP Freedom 2025 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,050.10 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,049.50 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,048.90 | $ 1.27 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
| Annualized
Expense Ratio B | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
VIP Freedom 2030 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,051.40 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,051.40 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,050.00 | $ 1.27 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
VIP Freedom 2035 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,052.70 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,052.20 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,051.30 | $ 1.27 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
VIP Freedom 2040 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,052.30 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,051.80 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,051.40 | $ 1.27 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
VIP Freedom 2045 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,052.70 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,052.20 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,051.20 | $ 1.27 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
| Annualized
Expense Ratio B | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
VIP Freedom 2050 | | | | |
Initial Class | .00% | | | |
Actual | | $ 1,000.00 | $ 1,052.90 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
Service Class | .10% | | | |
Actual | | $ 1,000.00 | $ 1,051.70 | $ .51 |
HypotheticalA | | $ 1,000.00 | $ 1,024.30 | $ .50 |
Service Class 2 | .25% | | | |
Actual | | $ 1,000.00 | $ 1,051.20 | $ 1.27 |
HypotheticalA | | $ 1,000.00 | $ 1,023.55 | $ 1.25 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/ 365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Funds in which each Fund invests are not included in each Class' annualized expense ratio.
Semiannual Report
VIP Freedom Income Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 2.9 | 3.0 |
VIP Equity-Income Portfolio Initial Class | 3.1 | 3.1 |
VIP Growth & Income Portfolio Initial Class | 3.5 | 3.6 |
VIP Growth Portfolio Initial Class | 3.0 | 3.2 |
VIP Mid Cap Portfolio Initial Class | 0.8 | 0.9 |
VIP Value Portfolio Initial Class | 2.3 | 2.3 |
VIP Value Strategies Portfolio Initial Class | 1.1 | 1.1 |
| 16.7 | 17.2 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 1.5 | 1.5 |
VIP Overseas Portfolio Initial Class | 5.7 | 5.9 |
| 7.2 | 7.4 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 6.0 | 5.9 |
VIP Investment Grade Bond Portfolio Initial Class | 40.1 | 39.7 |
| 46.1 | 45.6 |
Short-Term Funds | | |
VIP Money Market Portfolio Initial Class | 30.0 | 29.8 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%. |
Asset Allocation (% of fund's net assets) |
Period end |
 | Domestic Equity Funds | 16.7% | |
 | International Equity Funds | 7.2% | |
 | Bond Funds | 46.1% | |
 | Short-Term Funds | 30.0% | |
Six months ago |
| Domestic Equity Funds | 17.2% | |
| International Equity Funds | 7.4% | |
| Bond Funds | 45.6% | |
| Short-Term Funds | 29.8% | |
Semiannual Report
VIP Freedom Income Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 16.7% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (b) | 24,161 | | $ 885,743 |
VIP Equity-Income Portfolio Initial Class (b) | 37,199 | | 931,088 |
VIP Growth & Income Portfolio Initial Class (b) | 52,239 | | 1,064,100 |
VIP Growth Portfolio Initial Class (b) | 14,599 | | 906,904 |
VIP Mid Cap Portfolio Initial Class (b) | 6,827 | | 256,956 |
VIP Value Portfolio Initial Class (b) | 42,330 | | 683,201 |
VIP Value Strategies Portfolio Initial Class (b) | 21,791 | | 332,531 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $3,804,250) |
5,060,523
|
International Equity Funds - 7.2% |
| | | |
VIP Emerging Markets Portfolio Initial Class (b) | 48,129 | | 462,521 |
VIP Overseas Portfolio Initial Class (b) | 83,292 | | 1,704,979 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $1,724,739) |
2,167,500
|
Bond Funds - 46.1% |
| Shares | | Value |
VIP High Income Portfolio Initial Class (b) | 297,834 | | $ 1,813,807 |
VIP Investment Grade Bond Portfolio Initial Class (b) | 941,667 | | 12,119,256 |
TOTAL BOND FUNDS (Cost $13,652,702) |
13,933,063
|
Short-Term Funds - 30.0% |
| | | |
VIP Money Market Portfolio Initial Class 0.01% (a)(b)
(Cost $9,069,037) | 9,069,037 | |
9,069,037
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $28,250,728) | | 30,230,123 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (2,102) |
NET ASSETS - 100% | $ 30,228,021 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 881,526 | $ 109,086 | $ 162,996 | $ - | $ 885,743 |
VIP Emerging Markets Portfolio Initial Class | 442,582 | 59,961 | 68,869 | - | 462,521 |
VIP Equity-Income Portfolio Initial Class | 891,202 | 112,378 | 139,091 | - | 931,088 |
VIP Growth & Income Portfolio Initial Class | 1,035,773 | 131,439 | 169,291 | - | 1,064,100 |
VIP Growth Portfolio Initial Class | 919,975 | 145,821 | 238,052 | - | 906,904 |
VIP High Income Portfolio Initial Class | 1,728,037 | 242,846 | 243,630 | - | 1,813,807 |
VIP Investment Grade Bond Portfolio Initial Class | 11,508,917 | 1,718,216 | 1,586,325 | - | 12,119,256 |
VIP Mid Cap Portfolio Initial Class | 264,014 | 34,221 | 50,453 | - | 256,956 |
VIP Money Market Portfolio Initial Class | 8,627,262 | 1,485,349 | 1,043,574 | 436 | 9,069,037 |
VIP Overseas Portfolio Initial Class | 1,708,577 | 252,174 | 243,154 | - | 1,704,979 |
VIP Value Portfolio Initial Class | 672,840 | 84,373 | 116,181 | - | 683,201 |
VIP Value Strategies Portfolio Initial Class | 330,099 | 38,726 | 56,307 | - | 332,531 |
Total | $ 29,010,804 | $ 4,414,590 | $ 4,117,923 | $ 436 | $ 30,230,123 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom Income Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $28,250,728) - See accompanying schedule | | $ 30,230,123 |
Cash | | 1 |
Receivable for investments sold | | 42,599 |
Receivable for fund shares sold | | 16,228 |
Total assets | | 30,288,951 |
| | |
Liabilities | | |
Payable for investments purchased | $ 3 | |
Payable for fund shares redeemed | 58,827 | |
Distribution and service plan fees payable | 2,100 | |
Total liabilities | | 60,930 |
| | |
Net Assets | | $ 30,228,021 |
Net Assets consist of: | | |
Paid in capital | | $ 28,351,198 |
Accumulated net investment loss | | (11,685) |
Accumulated undistributed net realized gain (loss) on investments | | (90,887) |
Net unrealized appreciation (depreciation) on investments | | 1,979,395 |
Net Assets | | $ 30,228,021 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($17,134,500 ÷ 1,535,906 shares) | | $ 11.16 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($4,903,216 ÷ 439,590 shares) | | $ 11.15 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($8,190,305 ÷ 737,503 shares) | | $ 11.11 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 436 |
| | |
Expenses | | |
Distribution and service plan fees | $ 12,121 | |
Independent trustees' compensation | 56 | |
Total expenses before reductions | 12,177 | |
Expense reductions | (56) | 12,121 |
Net investment income (loss) | | (11,685) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (11,975) | |
Capital gain distributions from underlying funds | 19,609 | |
Total net realized gain (loss) | | 7,634 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 935,022 |
Net gain (loss) | | 942,656 |
Net increase (decrease) in net assets resulting from operations | | $ 930,971 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (11,685) | $ 413,397 |
Net realized gain (loss) | 7,634 | 310,368 |
Change in net unrealized appreciation (depreciation) | 935,022 | 637,601 |
Net increase (decrease) in net assets resulting from operations | 930,971 | 1,361,366 |
Distributions to shareholders from net investment income | - | (415,198) |
Distributions to shareholders from net realized gain | (213,861) | (227,373) |
Total distributions | (213,861) | (642,571) |
Share transactions - net increase (decrease) | 501,969 | 5,143,347 |
Total increase (decrease) in net assets | 1,219,079 | 5,862,142 |
| | |
Net Assets | | |
Beginning of period | 29,008,942 | 23,146,800 |
End of period (including accumulated net investment loss of $11,685 and $0, respectively) | $ 30,228,021 | $ 29,008,942 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 10.89 | $ 10.57 | $ 10.21 | $ 10.27 | $ 10.00 | $ 9.14 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - I | .18 | .16 | .19 | .19 | .39 |
Net realized and unrealized gain (loss) | .35 | .40 | .50 | (.02) | .56 | .96 |
Total from investment operations | .35 | .58 | .66 | .17 | .75 | 1.35 |
Distributions from net investment income | - | (.17) | (.16) | (.19) | (.20) | (.35) |
Distributions from net realized gain | (.08) | (.10) | (.14) | (.04) | (.28) | (.15) |
Total distributions | (.08) | (.26) J | (.30) | (.23) | (.48) | (.49) K |
Net asset value, end of period | $ 11.16 | $ 10.89 | $ 10.57 | $ 10.21 | $ 10.27 | $ 10.00 |
Total ReturnB, C, D | 3.24% | 5.55% | 6.52% | 1.63% | 7.49% | 14.95% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions G | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00%A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A,G | 1.67% | 1.55% | 1.85% | 1.88% | 4.00% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 17,135 | $ 16,980 | $ 14,184 | $ 10,938 | $ 11,165 | $ 12,679 |
Portfolio turnover rate F | 28% A | 43% | 43% | 49% | 41% | 32% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds G Amount represents less than .01%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. IAmount represents less than $.01 per share. J Total distributions of $.26 per share is comprised of distributions from net investment income of $.166 and distributions from net realized gain of $.097 per share. K Total distributions of $.49 per share is comprised of distributions from net investment income of $.347 and distributions from net realized gain of $.146 per share. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 10.89 | $ 10.58 | $ 10.22 | $ 10.28 | $ 10.00 | $ 9.14 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .17 | .15 | .18 | .18 | .37 |
Net realized and unrealized gain (loss) | .35 | .40 | .50 | (.02) | .56 | .97 |
Total from investment operations | .34 | .57 | .65 | .16 | .74 | 1.34 |
Distributions from net investment income | - | (.16) | (.15) | (.18) | (.19) | (.33) |
Distributions from net realized gain | (.08) | (.10) | (.14) | (.04) | (.28) | (.15) |
Total distributions | (.08) | (.26) | (.29) | (.22) | (.46) H | (.48) I |
Net asset value, end of period | $ 11.15 | $ 10.89 | $ 10.58 | $ 10.22 | $ 10.28 | $ 10.00 |
Total Return B, C, D | 3.15% | 5.38% | 6.42% | 1.56% | 7.46% | 14.81% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .10%A | .10% | .10% | .10% | .10% | .10% |
Expenses net of fee waivers, if any | .10%A | .10% | .10% | .10% | .10% | .10% |
Expenses net of all reductions | .10%A | .10% | .10% | .10% | .10% | .10% |
Net investment income (loss) | (.10) %A | 1.57% | 1.45% | 1.75% | 1.78% | 3.90% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 4,903 | $ 4,529 | $ 2,467 | $ 2,505 | $ 172 | $ 163 |
Portfolio turnover rate F | 28% A | 43% | 43% | 49% | 41% | 32% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.46 per share is comprised of distributions from net investment income of $.189 and distributions from net realized gain of $.275 per share. I Total distributions of $.48 per share is comprised of distributions from net investment income of $.334 and distributions from net realized gain of $.146 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 10.85 | $ 10.54 | $ 10.18 | $ 10.24 | $ 9.97 | $ 9.12 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .15 | .14 | .17 | .17 | .36 |
Net realized and unrealized gain (loss) | .35 | .40 | .49 | (.03) | .55 | .96 |
Total from investment operations | .34 | .55 | .63 | .14 | .72 | 1.32 |
Distributions from net investment income | - | (.14) | (.13) | (.16) | (.18) | (.33) |
Distributions from net realized gain | (.08) | (.10) | (.14) | (.04) | (.28) | (.15) |
Total distributions | (.08) | (.24) | (.27) | (.20) | (.45) H | (.47) I |
Net asset value, end of period | $ 11.11 | $ 10.85 | $ 10.54 | $ 10.18 | $ 10.24 | $ 9.97 |
Total Return B, C, D | 3.16% | 5.21% | 6.26% | 1.39% | 7.25% | 14.64% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of all reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Net investment income (loss) | (.25)% A | 1.42% | 1.30% | 1.60% | 1.63% | 3.76% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 8,190 | $ 7,500 | $ 6,495 | $ 7,731 | $ 7,313 | $ 6,753 |
Portfolio turnover rate F | 28% A | 43% | 43% | 49% | 41% | 32% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.45 per share is comprised of distributions from net investment income of $.176 and distributions from net realized gain of $.275 per share. I Total distributions of $.47 per share is comprised of distributions from net investment income of $.326 and distributions from net realized gain of $.146 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2005 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 5.0 | 4.8 |
VIP Equity-Income Portfolio Initial Class | 5.2 | 4.8 |
VIP Growth & Income Portfolio Initial Class | 5.9 | 5.6 |
VIP Growth Portfolio Initial Class | 5.1 | 5.1 |
VIP Mid Cap Portfolio Initial Class | 1.5 | 1.5 |
VIP Value Portfolio Initial Class | 3.8 | 3.7 |
VIP Value Strategies Portfolio Initial Class | 1.9 | 1.8 |
| 28.4 | 27.3 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 2.5 | 2.4 |
VIP Overseas Portfolio Initial Class | 9.4 | 9.4 |
| 11.9 | 11.8 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 6.3 | 6.2 |
VIP Investment Grade Bond Portfolio Initial Class | 33.7 | 34.1 |
| 40.0 | 40.3 |
Short-Term Funds | | |
VIP Money Market Portfolio Initial Class | 19.7 | 20.6 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%. |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 28.4% | |
| International Equity Funds | 11.9% | |
| Bond Funds | 40.0% | |
| Short-Term Funds | 19.7% | |
Six months ago |
| Domestic Equity Funds | 27.3% | |
| International Equity Funds | 11.8% | |
| Bond Funds | 40.3% | |
| Short-Term Funds | 20.6% | |
Semiannual Report
VIP Freedom 2005 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 28.4% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (b) | 10,869 | | $ 398,472 |
VIP Equity-Income Portfolio Initial Class (b) | 16,671 | | 417,283 |
VIP Growth & Income Portfolio Initial Class (b) | 23,234 | | 473,282 |
VIP Growth Portfolio Initial Class (b) | 6,598 | | 409,855 |
VIP Mid Cap Portfolio Initial Class (b) | 3,105 | | 116,867 |
VIP Value Portfolio Initial Class (b) | 18,862 | | 304,438 |
VIP Value Strategies Portfolio Initial Class (b) | 9,825 | | 149,935 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $1,767,852) |
2,270,132
|
International Equity Funds - 11.9% |
| | | |
VIP Emerging Markets Portfolio Initial Class (b) | 20,890 | | 200,757 |
VIP Overseas Portfolio Initial Class (b) | 36,868 | | 754,679 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $902,450) |
955,436
|
Bond Funds - 40.0% |
| Shares | | Value |
VIP High Income Portfolio Initial Class (b) | 81,943 | | $ 499,035 |
VIP Investment Grade Bond Portfolio Initial Class (b) | 209,330 | | 2,694,083 |
TOTAL BOND FUNDS (Cost $3,151,997) |
3,193,118
|
Short-Term Funds - 19.7% |
| | | |
VIP Money Market Portfolio Initial Class 0.01% (a)(b)
(Cost $1,572,288) | 1,572,288 | |
1,572,288
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $7,394,587) | | 7,990,974 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (42) |
NET ASSETS - 100% | $ 7,990,932 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 355,021 | $ 40,798 | $ 23,094 | $ - | $ 398,472 |
VIP Emerging Markets Portfolio Initial Class | 175,304 | 24,061 | 11,551 | - | 200,757 |
VIP Equity-Income Portfolio Initial Class | 357,123 | 58,476 | 28,313 | - | 417,283 |
VIP Growth & Income Portfolio Initial Class | 416,920 | 62,760 | 36,613 | - | 473,282 |
VIP Growth Portfolio Initial Class | 373,359 | 49,052 | 46,946 | - | 409,855 |
VIP High Income Portfolio Initial Class | 454,241 | 45,897 | 24,474 | - | 499,035 |
VIP Investment Grade Bond Portfolio Initial Class | 2,517,174 | 299,493 | 227,894 | - | 2,694,083 |
VIP Mid Cap Portfolio Initial Class | 109,010 | 13,175 | 9,564 | - | 116,867 |
VIP Money Market Portfolio Initial Class | 1,515,699 | 194,604 | 138,015 | 77 | 1,572,288 |
VIP Overseas Portfolio Initial Class | 693,747 | 119,143 | 54,160 | - | 754,679 |
VIP Value Portfolio Initial Class | 269,695 | 33,579 | 17,570 | - | 304,438 |
VIP Value Strategies Portfolio Initial Class | 135,381 | 12,775 | 7,096 | - | 149,935 |
Total | $ 7,372,674 | $ 953,813 | $ 625,290 | $ 77 | $ 7,990,974 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2005 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $7,394,587) - See accompanying schedule | | $ 7,990,974 |
Receivable for investments sold | | 351 |
Receivable for fund shares sold | | 152 |
Total assets | | 7,991,477 |
| | |
Liabilities | | |
Payable for fund shares redeemed | $ 503 | |
Distribution and service plan fees payable | 42 | |
Total liabilities | | 545 |
| | |
Net Assets | | $ 7,990,932 |
Net Assets consist of: | | |
Paid in capital | | $ 7,478,863 |
Accumulated net investment loss | | (187) |
Accumulated undistributed net realized gain (loss) on investments | | (84,131) |
Net unrealized appreciation (depreciation) on investments | | 596,387 |
Net Assets | | $ 7,990,932 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($7,606,487 ÷ 648,070 shares) | | $ 11.74 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($310,562 ÷ 26,316 shares) | | $ 11.80 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($73,883 ÷ 6,309 shares) | | $ 11.71 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 77 |
| | |
Expenses | | |
Distribution and service plan fees | $ 264 | |
Independent trustees' compensation | 14 | |
Total expenses before reductions | 278 | |
Expense reductions | (14) | 264 |
Net investment income (loss) | | (187) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (9,932) | |
Capital gain distributions from underlying funds | 7,722 | |
Total net realized gain (loss) | | (2,210) |
Change in net unrealized appreciation (depreciation) on underlying funds | | 299,707 |
Net gain (loss) | | 297,497 |
Net increase (decrease) in net assets resulting from operations | | $ 297,310 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (187) | $ 115,256 |
Net realized gain (loss) | (2,210) | 178,499 |
Change in net unrealized appreciation (depreciation) | 299,707 | 386,770 |
Net increase (decrease) in net assets resulting from operations | 297,310 | 680,525 |
Distributions to shareholders from net investment income | - | (115,267) |
Distributions to shareholders from net realized gain | (49,746) | (23,784) |
Total distributions | (49,746) | (139,051) |
Share transactions - net increase (decrease) | 370,730 | 432,519 |
Total increase (decrease) in net assets | 618,294 | 973,993 |
| | |
Net Assets | | |
Beginning of period | 7,372,638 | 6,398,645 |
End of period (including accumulated net investment loss of $187 and $0, respectively) | $ 7,990,932 | $ 7,372,638 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.37 | $ 10.56 | $ 9.86 | $ 10.07 | $ 9.34 | $ 8.14 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - I | .17 | .18 | .22 | .18 | .34 |
Net realized and unrealized gain (loss) | .44 | .86 | .76 | (.20) | .87 | 1.48 |
Total from investment operations | .44 | 1.03 | .94 | .02 | 1.05 | 1.82 |
Distributions from net investment income | - | (.18) | (.17) | (.19) | (.20) | (.35) |
Distributions from net realized gain | (.07) | (.04) | (.07) | (.04) | (.12) | (.26) |
Total distributions | (.07) | (.22) | (.24) | (.23) | (.32) | (.62) J |
Net asset value, end of period | $ 11.74 | $ 11.37 | $ 10.56 | $ 9.86 | $ 10.07 | $ 9.34 |
Total ReturnB, C, D | 3.93% | 9.74% | 9.57% | .18% | 11.34% | 23.02% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions G | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00%A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A,G | 1.57% | 1.72% | 2.17% | 1.90% | 3.95% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 7,606 | $ 7,145 | $ 5,971 | $ 5,224 | $ 5,733 | $ 6,833 |
Portfolio turnover rate F | 16% A | 54% | 30% | 54% | 42% | 50% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Amount represents less than .01%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Amount represents less than $.01 per share. J Total distributions of $.62 per share is comprised of distributions from net investment income of $.353 and distributions from net realized gain of $.262 per share. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.44 | $ 10.57 | $ 9.86 | $ 10.08 | $ 9.35 | $ 8.14 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | (.01) | .16 | .17 | .21 | .17 | .33 |
Net realized and unrealized gain (loss) | .44 | .85 | .77 | (.21) | .87 | 1.48 |
Total from investment operations | .43 | 1.01 | .94 | - H | 1.04 | 1.81 |
Distributions from net investment income | - | (.11) | (.16) | (.18) | (.19) | (.34) |
Distributions from net realized gain | (.07) | (.04) | (.07) | (.04) | (.12) | (.26) |
Total distributions | (.07) | (.14) I | (.23) | (.22) | (.31) | (.60) J |
Net asset value, end of period | $ 11.80 | $ 11.44 | $ 10.57 | $ 9.86 | $ 10.08 | $ 9.35 |
Total ReturnB, C, D | 3.81% | 9.60% | 9.59% | (.04)% | 11.24% | 23.00% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .10% A | .10% | .10% | .10% | .10% | .10% |
Expenses net of fee waivers, if any | .10% A | .10% | .10% | .10% | .10% | .10% |
Expenses net of all reductions | .10% A | .10% | .10% | .10% | .10% | .10% |
Net investment income (loss) | (.10)% A | 1.47% | 1.62% | 2.07% | 1.80% | 3.85% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 311 | $ 125 | $ 177 | $ 95 | $ 179 | $ 172 |
Portfolio turnover rate F | 16% A | 54% | 30% | 54% | 42% | 50% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Amount represents less than $.01 per share. I Total distributions of $.14 per share is comprised of distributions from net investment income of $.107 and distributions from net realized gain of $.037 per share. J Total distributions of $.60 per share is comprised of distributions from net investment income of $.341 and distributions from net realized gain of $.262 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.36 | $ 10.55 | $ 9.85 | $ 10.08 | $ 9.35 | $ 8.14 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .15 | .15 | .19 | .16 | .32 |
Net realized and unrealized gain (loss) | .43 | .85 | .77 | (.20) | .86 | 1.48 |
Total from investment operations | .42 | 1.00 | .92 | (.01) | 1.02 | 1.80 |
Distributions from net investment income | - | (.15) | (.15) | (.18) | (.18) | (.32) |
Distributions from net realized gain | (.07) | (.04) | (.07) | (.04) | (.12) | (.26) |
Total distributions | (.07) | (.19) | (.22) | (.22) | (.29) H | (.59) I |
Net asset value, end of period | $ 11.71 | $ 11.36 | $ 10.55 | $ 9.85 | $ 10.08 | $ 9.35 |
Total ReturnB, C, D | 3.75% | 9.46% | 9.35% | (.09)% | 11.06% | 22.78% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of all reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Net investment income (loss) | (.25)% A | 1.31% | 1.48% | 1.92% | 1.65% | 3.70% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 74 | $ 102 | $ 251 | $ 226 | $ 157 | $ 183 |
Portfolio turnover rate F | 16% A | 54% | 30% | 54% | 42% | 50% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.29 per share is comprised of distributions from net investment income of $.177 and distributions from net realized gain of $.117 per share. I Total distributions of $.59 per share is comprised of distributions from net investment income of $.324 and distributions from net realized gain of $.262 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2010 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 6.0 | 5.9 |
VIP Equity-Income Portfolio Initial Class | 6.3 | 6.0 |
VIP Growth & Income Portfolio Initial Class | 7.1 | 7.0 |
VIP Growth Portfolio Initial Class | 6.2 | 6.2 |
VIP Mid Cap Portfolio Initial Class | 1.7 | 1.8 |
VIP Value Portfolio Initial Class | 4.6 | 4.5 |
VIP Value Strategies Portfolio Initial Class | 2.3 | 2.2 |
| 34.2 | 33.6 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 3.0 | 2.9 |
VIP Overseas Portfolio Initial Class | 11.5 | 11.6 |
| 14.5 | 14.5 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 6.4 | 6.3 |
VIP Investment Grade Bond Portfolio Initial Class | 30.3 | 30.4 |
| 36.7 | 36.7 |
Short-Term Funds | | |
VIP Money Market Portfolio Initial Class | 14.6 | 15.2 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%. |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 34.2% | |
| International Equity Funds | 14.5% | |
| Bond Funds | 36.7% | |
| Short-Term Funds | 14.6% | |
Six months ago |
| Domestic Equity Funds | 33.6% | |
| International Equity Funds | 14.5% | |
| Bond Funds | 36.7% | |
| Short-Term Funds | 15.2% | |
Semiannual Report
VIP Freedom 2010 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 34.2% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (b) | 480,989 | | $ 17,633,040 |
VIP Equity-Income Portfolio Initial Class (b) | 739,520 | | 18,510,181 |
VIP Growth & Income Portfolio Initial Class (b) | 1,035,232 | | 21,087,685 |
VIP Growth Portfolio Initial Class (b) | 292,556 | | 18,173,609 |
VIP Mid Cap Portfolio Initial Class (b) | 137,099 | | 5,160,421 |
VIP Value Portfolio Initial Class (b) | 840,050 | | 13,558,408 |
VIP Value Strategies Portfolio Initial Class (b) | 437,736 | | 6,679,850 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $71,256,774) |
100,803,194
|
International Equity Funds - 14.5% |
| | | |
VIP Emerging Markets Portfolio Initial Class (b) | 927,512 | | 8,913,386 |
VIP Overseas Portfolio Initial Class (b) | 1,648,677 | | 33,748,424 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $37,025,352) |
42,661,810
|
Bond Funds - 36.7% |
| | | |
VIP High Income Portfolio Initial Class (b) | 3,088,541 | | 18,809,216 |
VIP Investment Grade Bond Portfolio Initial Class (b) | 6,949,943 | | 89,445,769 |
TOTAL BOND FUNDS (Cost $106,995,816) |
108,254,985
|
Short-Term Funds - 14.6% |
| Shares | | Value |
VIP Money Market Portfolio Initial Class 0.01% (a)(b)
(Cost $43,048,268) | 43,048,268 | | $ 43,048,268 |
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $258,326,210) | | 294,768,257 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (48,167) |
NET ASSETS - 100% | $ 294,720,090 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 16,647,567 | $ 1,088,788 | $ 1,252,698 | $ - | $ 17,633,040 |
VIP Emerging Markets Portfolio Initial Class | 8,186,669 | 881,864 | 723,504 | - | 8,913,386 |
VIP Equity-Income Portfolio Initial Class | 16,747,109 | 1,862,725 | 1,450,488 | - | 18,510,181 |
VIP Growth & Income Portfolio Initial Class | 19,583,629 | 1,863,098 | 1,708,473 | - | 21,087,685 |
VIP Growth Portfolio Initial Class | 17,455,242 | 1,683,167 | 2,491,438 | - | 18,173,609 |
VIP High Income Portfolio Initial Class | 17,612,716 | 1,129,041 | 822,151 | - | 18,809,216 |
VIP Investment Grade Bond Portfolio Initial Class | 85,504,368 | 5,091,395 | 4,671,416 | - | 89,445,769 |
VIP Mid Cap Portfolio Initial Class | 5,069,177 | 372,494 | 463,202 | - | 5,160,421 |
VIP Money Market Portfolio Initial Class | 42,788,632 | 3,208,843 | 2,949,206 | 2,078 | 43,048,268 |
VIP Overseas Portfolio Initial Class | 32,483,675 | 3,359,115 | 1,874,083 | - | 33,748,424 |
VIP Value Portfolio Initial Class | 12,610,351 | 965,961 | 862,707 | - | 13,558,408 |
VIP Value Strategies Portfolio Initial Class | 6,305,361 | 320,245 | 341,633 | - | 6,679,850 |
Total | $ 280,994,496 | $ 21,826,736 | $ 19,610,999 | $ 2,078 | $ 294,768,257 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2010 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $258,326,210) - See accompanying schedule | | $ 294,768,257 |
Cash | | 3 |
Receivable for investments sold | | 6,202 |
Receivable for fund shares sold | | 302,048 |
Total assets | | 295,076,510 |
| | |
Liabilities | | |
Payable for investments purchased | $ 234,399 | |
Payable for fund shares redeemed | 73,862 | |
Distribution and service plan fees payable | 48,159 | |
Total liabilities | | 356,420 |
| | |
Net Assets | | $ 294,720,090 |
Net Assets consist of: | | |
Paid in capital | | $ 259,194,825 |
Accumulated net investment loss | | (274,632) |
Accumulated undistributed net realized gain (loss) on investments | | (642,150) |
Net unrealized appreciation (depreciation) on investments | | 36,442,047 |
Net Assets | | $ 294,720,090 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($45,434,541 ÷ 3,589,095 shares) | | $ 12.66 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($26,852,749 ÷ 2,124,463 shares) | | $ 12.64 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($222,432,800 ÷ 17,685,969 shares) | | $ 12.58 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 2,078 |
| | |
Expenses | | |
Distribution and service plan fees | $ 282,001 | |
Independent trustees' compensation | 544 | |
Total expenses before reductions | 282,545 | |
Expense reductions | (544) | 282,001 |
Net investment income (loss) | | (279,923) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (3,311) | |
Capital gain distributions from underlying funds | 339,468 | |
Total net realized gain (loss) | | 336,157 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 11,561,992 |
Net gain (loss) | | 11,898,149 |
Net increase (decrease) in net assets resulting from operations | | $ 11,618,226 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (279,923) | $ 4,113,219 |
Net realized gain (loss) | 336,157 | 4,641,187 |
Change in net unrealized appreciation (depreciation) | 11,561,992 | 22,424,595 |
Net increase (decrease) in net assets resulting from operations | 11,618,226 | 31,179,001 |
Distributions to shareholders from net investment income | - | (4,107,928) |
Distributions to shareholders from net realized gain | (3,455,391) | (2,907,571) |
Total distributions | (3,455,391) | (7,015,499) |
Share transactions - net increase (decrease) | 5,607,776 | 37,971,934 |
Total increase (decrease) in net assets | 13,770,611 | 62,135,436 |
| | |
Net Assets | | |
Beginning of period | 280,949,479 | 218,814,043 |
End of period (including accumulated net investment loss of $274,632 and undistributed net investment income of $5,291, respectively) | $ 294,720,090 | $ 280,949,479 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.30 | $ 11.15 | $ 10.31 | $ 10.61 | $ 9.77 | $ 8.23 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - I | .22 | .23 | .24 | .24 | .38 |
Net realized and unrealized gain (loss) | .51 | 1.27 | .98 | (.26) | 1.02 | 1.60 |
Total from investment operations | .51 | 1.49 | 1.21 | (.02) | 1.26 | 1.98 |
Distributions from net investment income | - | (.21) | (.21) | (.23) | (.23) | (.37) |
Distributions from net realized gain | (.15) | (.14) | (.16) | (.06) | (.19) | (.07) |
Total distributions | (.15) | (.34) J | (.37) | (.28) K | (.42) | (.44) |
Net asset value, end of period | $ 12.66 | $ 12.30 | $ 11.15 | $ 10.31 | $ 10.61 | $ 9.77 |
Total ReturnB, C, D | 4.19% | 13.49% | 11.78% | (.19)% | 12.95% | 24.27% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions G | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A,G | 1.83% | 2.07% | 2.27% | 2.38% | 4.22% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 45,435 | $ 44,430 | $ 27,416 | $ 22,338 | $ 22,573 | $ 21,197 |
Portfolio turnover rate F | 14% A | 19% | 18% | 17% | 29% | 28% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Amount represents less than .01%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Amount represents less than $.01 per share. J Total distributions of $.34 per share is comprised of distributions from net investment income of $.205 and distributions from net realized gain of $.139 per share. K Total distributions of $.28 per share is comprised of distributions from net investment income of $.225 and distributions from net realized gain of $.055 per share. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.29 | $ 11.14 | $ 10.30 | $ 10.60 | $ 9.77 | $ 8.23 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .20 | .22 | .23 | .23 | .37 |
Net realized and unrealized gain (loss) | .51 | 1.28 | .98 | (.26) | 1.01 | 1.60 |
Total from investment operations | .50 | 1.48 | 1.20 | (.03) | 1.24 | 1.97 |
Distributions from net investment income | - | (.19) | (.20) | (.22) | (.21) | (.36) |
Distributions from net realized gain | (.15) | (.14) | (.16) | (.06) | (.19) | (.07) |
Total distributions | (.15) | (.33) | (.36) | (.27) H | (.41) I | (.43) |
Net asset value, end of period | $ 12.64 | $ 12.29 | $ 11.14 | $ 10.30 | $ 10.60 | $ 9.77 |
Total ReturnB, C, D | 4.11% | 13.39% | 11.69% | (.28)% | 12.74% | 24.15% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .10% A | .10% | .10% | .10% | .10% | .10% |
Expenses net of fee waivers, if any | .10% A | .10% | .10% | .10% | .10% | .10% |
Expenses net of all reductions | .10% A | .10% | .10% | .10% | .10% | .10% |
Net investment income (loss) | (.10)% A | 1.73% | 1.97% | 2.17% | 2.28% | 4.12% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 26,853 | $ 27,143 | $ 23,896 | $ 20,927 | $ 19,259 | $ 19,238 |
Portfolio turnover rate F | 14% A | 19% | 18% | 17% | 29% | 28% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.27 per share is comprised of distributions from net investment income of $.215 and distributions from net realized gain of $.055 per share. I Total distributions of $.41 per share is comprised of distributions from net investment income of $.214 and distributions from net realized gain of $.191 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.24 | $ 11.10 | $ 10.26 | $ 10.56 | $ 9.74 | $ 8.21 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | .19 | .20 | .22 | .22 | .35 |
Net realized and unrealized gain (loss) | .51 | 1.27 | .98 | (.26) | .99 | 1.60 |
Total from investment operations | .49 | 1.46 | 1.18 | (.04) | 1.21 | 1.95 |
Distributions from net investment income | - | (.18) | (.19) | (.20) | (.20) | (.35) |
Distributions from net realized gain | (.15) | (.14) | (.16) | (.06) | (.19) | (.07) |
Total distributions | (.15) | (.32) | (.34) H | (.26) | (.39) | (.42) |
Net asset value, end of period | $ 12.58 | $ 12.24 | $ 11.10 | $ 10.26 | $ 10.56 | $ 9.74 |
Total ReturnB, C, D | 4.05% | 13.20% | 11.58% | (.43)% | 12.55% | 23.95% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .25%A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .25%A | .25% | .25% | .25% | .25% | .25% |
Expenses net of all reductions | .25%A | .25% | .25% | .25% | .25% | .25% |
Net investment income (loss) | (.25)% A | 1.58% | 1.82% | 2.02% | 2.13% | 3.97% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 222,433 | $ 209,377 | $ 167,502 | $ 136,353 | $ 117,966 | $ 87,791 |
Portfolio turnover rate F | 14% A | 19% | 18% | 17% | 29% | 28% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.34 per share is comprised of distributions from net investment income of $.186 and distributions from net realized gain of $.157 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2015 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 6.9 | 7.0 |
VIP Equity-Income Portfolio Initial Class | 7.2 | 7.1 |
VIP Growth & Income Portfolio Initial Class | 8.2 | 8.2 |
VIP Growth Portfolio Initial Class | 7.0 | 7.3 |
VIP Mid Cap Portfolio Initial Class | 2.0 | 2.1 |
VIP Value Portfolio Initial Class | 5.3 | 5.3 |
VIP Value Strategies Portfolio Initial Class | 2.6 | 2.6 |
| 39.2 | 39.6 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 3.6 | 3.5 |
VIP Overseas Portfolio Initial Class | 13.2 | 13.6 |
| 16.8 | 17.1 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 6.6 | 6.4 |
VIP Investment Grade Bond Portfolio Initial Class | 27.2 | 26.8 |
| 33.8 | 33.2 |
Short-Term Funds | | |
VIP Money Market Portfolio Initial Class | 10.2 | 10.1 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%. |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 39.2% | |
| International Equity Funds | 16.8% | |
| Bond Funds | 33.8% | |
| Short-Term Funds | 10.2% | |
Six months ago |
| Domestic Equity Funds | 39.6% | |
| International Equity Funds | 17.1% | |
| Bond Funds | 33.2% | |
| Short-Term Funds | 10.1% | |
Semiannual Report
VIP Freedom 2015 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 39.2% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (b) | 222,976 | | $ 8,174,306 |
VIP Equity-Income Portfolio Initial Class (b) | 343,222 | | 8,590,850 |
VIP Growth & Income Portfolio Initial Class (b) | 481,334 | | 9,804,779 |
VIP Growth Portfolio Initial Class (b) | 134,654 | | 8,364,726 |
VIP Mid Cap Portfolio Initial Class (b) | 63,244 | | 2,380,491 |
VIP Value Portfolio Initial Class (b) | 390,694 | | 6,305,806 |
VIP Value Strategies Portfolio Initial Class (b) | 201,872 | | 3,080,563 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $30,772,513) |
46,701,521
|
International Equity Funds - 16.8% |
| | | |
VIP Emerging Markets Portfolio Initial Class (b) | 444,636 | | 4,272,952 |
VIP Overseas Portfolio Initial Class (b) | 769,982 | | 15,761,535 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $17,365,716) |
20,034,487
|
Bond Funds - 33.8% |
| | | |
VIP High Income Portfolio Initial Class (b) | 1,279,715 | | 7,793,465 |
VIP Investment Grade Bond Portfolio Initial Class (b) | 2,516,044 | | 32,381,485 |
TOTAL BOND FUNDS (Cost $39,286,079) |
40,174,950
|
Short-Term Funds - 10.2% |
| Shares | | Value |
VIP Money Market Portfolio Initial Class 0.01% (a)(b)
(Cost $12,101,724) | 12,101,724 | | $ 12,101,724 |
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $99,526,032) | | 119,012,682 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (14,606) |
NET ASSETS - 100% | $ 118,998,076 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 8,001,284 | $ 567,106 | $ 918,147 | $ - | $ 8,174,306 |
VIP Emerging Markets Portfolio Initial Class | 3,963,850 | 582,276 | 532,808 | - | 4,272,952 |
VIP Equity-Income Portfolio Initial Class | 8,075,257 | 737,446 | 818,795 | - | 8,590,850 |
VIP Growth & Income Portfolio Initial Class | 9,425,320 | 745,420 | 957,197 | - | 9,804,779 |
VIP Growth Portfolio Initial Class | 8,368,225 | 876,323 | 1,604,268 | - | 8,364,726 |
VIP High Income Portfolio Initial Class | 7,323,728 | 947,836 | 842,014 | - | 7,793,465 |
VIP Investment Grade Bond Portfolio Initial Class | 30,639,904 | 3,634,920 | 3,152,336 | - | 32,381,485 |
VIP Mid Cap Portfolio Initial Class | 2,420,315 | 227,105 | 350,777 | - | 2,380,491 |
VIP Money Market Portfolio Initial Class | 11,611,098 | 1,265,002 | 774,376 | 573 | 12,101,724 |
VIP Overseas Portfolio Initial Class | 15,584,370 | 1,737,907 | 1,439,719 | - | 15,761,535 |
VIP Value Portfolio Initial Class | 6,066,706 | 466,244 | 605,945 | - | 6,305,806 |
VIP Value Strategies Portfolio Initial Class | 3,018,527 | 191,187 | 310,575 | - | 3,080,563 |
Total | $ 114,498,584 | $ 11,978,772 | $ 12,306,957 | $ 573 | $ 119,012,682 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2015 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $99,526,032) - See accompanying schedule | | $ 119,012,682 |
Receivable for fund shares sold | | 336,514 |
Total assets | | 119,349,196 |
| | |
Liabilities | | |
Payable to custodian bank | $ 29 | |
Payable for investments purchased | 176,904 | |
Payable for fund shares redeemed | 159,691 | |
Distribution and service plan fees payable | 14,496 | |
Total liabilities | | 351,120 |
| | |
Net Assets | | $ 118,998,076 |
Net Assets consist of: | | |
Paid in capital | | $ 99,876,055 |
Accumulated net investment loss | | (78,606) |
Accumulated undistributed net realized gain (loss) on investments | | (286,023) |
Net unrealized appreciation (depreciation) on investments | | 19,486,650 |
Net Assets | | $ 118,998,076 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($40,450,444 ÷ 3,157,100 shares) | | $ 12.81 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($12,419,073 ÷ 971,057 shares) | | $ 12.79 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($66,128,559 ÷ 5,191,511 shares) | | $ 12.74 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 573 |
| | |
Expenses | | |
Distribution and service plan fees | $ 84,411 | |
Independent trustees' compensation | 219 | |
Total expenses before reductions | 84,630 | |
Expense reductions | (219) | 84,411 |
Net investment income (loss) | | (83,838) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (5,537) | |
Capital gain distributions from underlying funds | 154,833 | |
Total net realized gain (loss) | | 149,296 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 4,848,884 |
Net gain (loss) | | 4,998,180 |
Net increase (decrease) in net assets resulting from operations | | $ 4,914,342 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (83,838) | $ 1,787,558 |
Net realized gain (loss) | 149,296 | 2,016,704 |
Change in net unrealized appreciation (depreciation) | 4,848,884 | 10,728,968 |
Net increase (decrease) in net assets resulting from operations | 4,914,342 | 14,533,230 |
Distributions to shareholders from net investment income | - | (1,804,111) |
Distributions to shareholders from net realized gain | (1,458,481) | (1,618,311) |
Total distributions | (1,458,481) | (3,422,422) |
Share transactions - net increase (decrease) | 1,057,393 | (269,133) |
Total increase (decrease) in net assets | 4,513,254 | 10,841,675 |
| | |
Net Assets | | |
Beginning of period | 114,484,822 | 103,643,147 |
End of period (including accumulated net investment loss of $78,606 and undistributed net investment income of $5,232, respectively) | $ 118,998,076 | $ 114,484,822 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.43 | $ 11.22 | $ 10.38 | $ 10.70 | $ 9.78 | $ 8.19 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - I | .21 | .22 | .23 | .23 | .38 |
Net realized and unrealized gain (loss) | .54 | 1.39 | 1.04 | (.27) | 1.04 | 1.67 |
Total from investment operations | .54 | 1.60 | 1.26 | (.04) | 1.27 | 2.05 |
Distributions from net investment income | - | (.22) | (.23) | (.23) | (.23) | (.34) |
Distributions from net realized gain | (.16) | (.18) | (.20) | (.06) | (.13) | (.12) |
Total distributions | (.16) | (.39) J | (.42) K | (.28) L | (.35) M | (.46) |
Net asset value, end of period | $ 12.81 | $ 12.43 | $ 11.22 | $ 10.38 | $ 10.70 | $ 9.78 |
Total ReturnB, C, D | 4.39% | 14.41% | 12.23% | (.36)% | 13.09% | 25.28% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions G | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A,G | 1.79% | 2.01% | 2.16% | 2.30% | 4.21% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 40,450 | $ 41,070 | $ 36,449 | $ 38,879 | $ 39,535 | $ 37,291 |
Portfolio turnover rate F | 21% A | 29% | 28% | 26% | 30% | 23% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Amount represents less than .01%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Amount represents less than $.01 per share. J Total distributions of $.39 per share is comprised of distributions from net investment income of $.217 and distributions from net realized gain of $.175 per share. K Total distributions of $.42 per share is comprised of distributions from net investment income of $.227 and distributions from net realized gain of $.195 per share. L Total distributions of $.28 per share is comprised of distributions from net investment income of $.227 and distributions from net realized gain of $.055 per share. M Total distributions of $.35 per share is comprised of distributions from net investment income of $.227 and distributions from net realized gain of $.127 per share. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.41 | $ 11.21 | $ 10.37 | $ 10.69 | $ 9.77 | $ 8.19 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .20 | .21 | .22 | .22 | .37 |
Net realized and unrealized gain (loss) | .55 | 1.38 | 1.04 | (.26) | 1.05 | 1.66 |
Total from investment operations | .54 | 1.58 | 1.25 | (.04) | 1.27 | 2.03 |
Distributions from net investment income | - | (.21) | (.22) | (.22) | (.22) | (.33) |
Distributions from net realized gain | (.16) | (.18) | (.20) | (.06) | (.13) | (.12) |
Total distributions | (.16) | (.38) H | (.41) I | (.28) | (.35) | (.45) |
Net asset value, end of period | $ 12.79 | $ 12.41 | $ 11.21 | $ 10.37 | $ 10.69 | $ 9.77 |
Total ReturnB, C, D | 4.40% | 14.24% | 12.13% | (.41)% | 13.00% | 25.06% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .10%A | .10% | .10% | .10% | .10% | .10% |
Expenses net of fee waivers, if any | .10%A | .10% | .10% | .10% | .10% | .10% |
Expenses net of all reductions | .10%A | .10% | .10% | .10% | .10% | .10% |
Net investment income (loss) | (.10)% A | 1.69% | 1.91% | 2.06% | 2.20% | 4.12% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 12,419 | $ 10,762 | $ 6,600 | $ 7,743 | $ 2,723 | $ 1,524 |
Portfolio turnover rate F | 21% A | 29% | 28% | 26% | 30% | 23% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.38 per share is comprised of distributions from net investment income of $.207 and distributions from net realized gain of $.175 per share. I Total distributions of $.41 per share is comprised of distributions from net investment income of $.216 and distributions from net realized gain of $.195 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.37 | $ 11.17 | $ 10.34 | $ 10.65 | $ 9.74 | $ 8.16 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | .18 | .19 | .21 | .21 | .35 |
Net realized and unrealized gain (loss) | .55 | 1.38 | 1.03 | (.26) | 1.03 | 1.67 |
Total from investment operations | .53 | 1.56 | 1.22 | (.05) | 1.24 | 2.02 |
Distributions from net investment income | - | (.19) | (.20) | (.20) | (.20) | (.32) |
Distributions from net realized gain | (.16) | (.18) | (.20) | (.06) | (.13) | (.12) |
Total distributions | (.16) | (.36) H | (.39) I | (.26) | (.33) | (.44) |
Net asset value, end of period | $ 12.74 | $ 12.37 | $ 11.17 | $ 10.34 | $ 10.65 | $ 9.74 |
Total ReturnB, C, D | 4.33% | 14.10% | 11.90% | (.52)% | 12.79% | 25.02% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .25%A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .25%A | .25% | .25% | .25% | .25% | .25% |
Expenses net of all reductions | .25%A | .25% | .25% | .25% | .25% | .25% |
Net investment income (loss) | (.25)% A | 1.54% | 1.76% | 1.91% | 2.05% | 3.97% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 66,129 | $ 62,652 | $ 60,594 | $ 55,246 | $ 56,112 | $ 42,534 |
Portfolio turnover rate F | 21% A | 29% | 28% | 26% | 30% | 23% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.36 per share is comprised of distributions from net investment income of $.186 and distributions from net realized gain of $.175 per share. I Total distributions of $.39 per share is comprised of distributions from net investment income of $.199 and distributions from net realized gain of $.195 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2020 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 7.7 | 7.8 |
VIP Equity-Income Portfolio Initial Class | 8.1 | 7.9 |
VIP Growth & Income Portfolio Initial Class | 9.1 | 9.2 |
VIP Growth Portfolio Initial Class | 7.8 | 8.1 |
VIP Mid Cap Portfolio Initial Class | 2.3 | 2.3 |
VIP Value Portfolio Initial Class | 5.9 | 5.9 |
VIP Value Strategies Portfolio Initial Class | 2.9 | 2.9 |
| 43.8 | 44.1 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 3.8 | 3.8 |
VIP Overseas Portfolio Initial Class | 14.7 | 15.2 |
| 18.5 | 19.0 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 6.6 | 6.5 |
VIP Investment Grade Bond Portfolio Initial Class | 24.5 | 24.0 |
| 31.1 | 30.5 |
Short-Term Funds | | |
VIP Money Market Portfolio Initial Class | 6.6 | 6.4 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%. |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 43.8% | |
| International Equity Funds | 18.5% | |
| Bond Funds | 31.1% | |
| Short-Term Funds | 6.6% | |
Six months ago |
| Domestic Equity Funds | 44.1% | |
| International Equity Funds | 19.0% | |
| Bond Funds | 30.5% | |
| Short-Term Funds | 6.4% | |
Semiannual Report
VIP Freedom 2020 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 43.8% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (b) | 1,598,009 | | $ 58,582,994 |
VIP Equity-Income Portfolio Initial Class (b) | 2,456,691 | | 61,490,983 |
VIP Growth & Income Portfolio Initial Class (b) | 3,426,811 | | 69,804,134 |
VIP Growth Portfolio Initial Class (b) | 963,971 | | 59,881,866 |
VIP Mid Cap Portfolio Initial Class (b) | 455,392 | | 17,140,958 |
VIP Value Portfolio Initial Class (b) | 2,794,445 | | 45,102,346 |
VIP Value Strategies Portfolio Initial Class (b) | 1,460,912 | | 22,293,518 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $220,169,467) |
334,296,799
|
International Equity Funds - 18.5% |
| | | |
VIP Emerging Markets Portfolio Initial Class (b) | 3,058,302 | | 29,390,286 |
VIP Overseas Portfolio Initial Class (b) | 5,479,936 | | 112,174,297 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $119,726,806) |
141,564,583
|
Bond Funds - 31.1% |
| | | |
VIP High Income Portfolio Initial Class (b) | 8,236,485 | | 50,160,191 |
VIP Investment Grade Bond Portfolio Initial Class (b) | 14,572,763 | | 187,551,460 |
TOTAL BOND FUNDS (Cost $236,533,086) |
237,711,651
|
Short-Term Funds - 6.6% |
| Shares | | Value |
VIP Money Market Portfolio Initial Class 0.01% (a)(b)
(Cost $50,469,175) | 50,469,175 | | $ 50,469,175 |
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $626,898,534) | | 764,042,208 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (129,056) |
NET ASSETS - 100% | $ 763,913,152 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 57,485,863 | $ 950,490 | $ 3,612,639 | $ - | $ 58,582,994 |
VIP Emerging Markets Portfolio Initial Class | 28,392,902 | 891,543 | 1,740,512 | - | 29,390,286 |
VIP Equity-Income Portfolio Initial Class | 58,076,823 | 1,721,783 | 2,611,595 | - | 61,490,983 |
VIP Growth & Income Portfolio Initial Class | 67,759,370 | 1,104,797 | 3,319,830 | - | 69,804,134 |
VIP Growth Portfolio Initial Class | 60,074,001 | 2,701,279 | 8,069,310 | - | 59,881,866 |
VIP High Income Portfolio Initial Class | 48,287,935 | 1,341,204 | 1,866,025 | - | 50,160,191 |
VIP Investment Grade Bond Portfolio Initial Class | 177,683,069 | 11,608,928 | 9,080,211 | - | 187,551,460 |
VIP Mid Cap Portfolio Initial Class | 17,379,772 | 597,345 | 1,427,777 | - | 17,140,958 |
VIP Money Market Portfolio Initial Class | 47,569,070 | 4,021,753 | 1,121,647 | 2,391 | 50,469,175 |
VIP Overseas Portfolio Initial Class | 112,048,720 | 4,487,468 | 3,466,858 | - | 112,174,297 |
VIP Value Portfolio Initial Class | 43,586,683 | 1,223,148 | 2,432,685 | - | 45,102,346 |
VIP Value Strategies Portfolio Initial Class | 21,698,160 | 341,801 | 1,053,316 | - | 22,293,518 |
Total | $ 740,042,368 | $ 30,991,539 | $ 39,802,405 | $ 2,391 | $ 764,042,208 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2020 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $626,898,534) - See accompanying schedule | | $ 764,042,208 |
Receivable for investments sold | | 73,087 |
Receivable for fund shares sold | | 480,273 |
Total assets | | 764,595,568 |
| | |
Liabilities | | |
Payable to custodian bank | $ 30 | |
Payable for investments purchased | 447,978 | |
Payable for fund shares redeemed | 105,454 | |
Distribution and service plan fees payable | 128,954 | |
Total liabilities | | 682,416 |
| | |
Net Assets | | $ 763,913,152 |
Net Assets consist of: | | |
Paid in capital | | $ 628,088,910 |
Accumulated net investment loss | | (747,588) |
Accumulated undistributed net realized gain (loss) on investments | | (571,844) |
Net unrealized appreciation (depreciation) on investments | | 137,143,674 |
Net Assets | | $ 763,913,152 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($99,564,959 ÷ 7,642,169 shares) | | $ 13.03 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($67,889,160 ÷ 5,223,856 shares) | | $ 13.00 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($596,459,033 ÷ 46,083,423 shares) | | $ 12.94 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 2,391 |
| | |
Expenses | | |
Distribution and service plan fees | $ 760,672 | |
Independent trustees' compensation | 1,414 | |
Total expenses before reductions | 762,086 | |
Expense reductions | (1,414) | 760,672 |
Net investment income (loss) | | (758,281) |
Realized and Unrealized Gain (Loss Realized gain (loss) on sale of underlying fund shares | 204,424 | |
Capital gain distributions from underlying funds | 1,099,799 | |
Total net realized gain (loss) | | 1,304,223 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 32,613,892 |
Net gain (loss) | | 33,918,115 |
Net increase (decrease) in net assets resulting from operations | | $ 33,159,834 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (758,281) | $ 11,187,330 |
Net realized gain (loss) | 1,304,223 | 13,643,550 |
Change in net unrealized appreciation (depreciation) | 32,613,892 | 75,308,233 |
Net increase (decrease) in net assets resulting from operations | 33,159,834 | 100,139,113 |
Distributions to shareholders from net investment income | - | (11,274,396) |
Distributions to shareholders from net realized gain | (9,467,252) | (9,210,708) |
Total distributions | (9,467,252) | (20,485,104) |
Share transactions - net increase (decrease) | 302,905 | 36,361,165 |
Total increase (decrease) in net assets | 23,995,487 | 116,015,174 |
| | |
Net Assets | | |
Beginning of period | 739,917,665 | 623,902,491 |
End of period (including accumulated net investment loss of $747,588 and undistributed net investment income of $10,693, respectively) | $ 763,913,152 | $ 739,917,665 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.61 | $ 11.21 | $ 10.21 | $ 10.59 | $ 9.52 | $ 7.71 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - I | .22 | .24 | .26 | .26 | .33 |
Net realized and unrealized gain (loss) | .58 | 1.56 | 1.12 | (.37) | 1.11 | 1.88 |
Total from investment operations | .58 | 1.78 | 1.36 | (.11) | 1.37 | 2.21 |
Distributions from net investment income | - | (.22) | (.23) | (.23) | (.22) | (.29) |
Distributions from net realized gain | (.16) | (.16) | (.13) | (.04) | (.08) | (.11) |
Total distributions | (.16) | (.38) | (.36) | (.27) | (.30) | (.40) J |
Net asset value, end of period | $ 13.03 | $ 12.61 | $ 11.21 | $ 10.21 | $ 10.59 | $ 9.52 |
Total ReturnB, C, D | 4.67% | 16.01% | 13.38% | (1.03)% | 14.49% | 28.97% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions G | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A,G | 1.84% | 2.16% | 2.47% | 2.61% | 3.93% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 99,565 | $ 91,328 | $ 58,113 | $ 47,731 | $ 45,225 | $ 38,330 |
Portfolio turnover rate F | 8% A | 20% | 15% | 10% | 21% | 18% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Amount represents less than .01%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Amount represents less than $.01 per share. J Total distributions of $.40 per share is comprised of distributions from net investment income of $.293 and distributions from net realized gain of $.107 per share. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.59 | $ 11.19 | $ 10.20 | $ 10.58 | $ 9.50 | $ 7.70 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .21 | .23 | .25 | .25 | .32 |
Net realized and unrealized gain (loss) | .58 | 1.56 | 1.11 | (.37) | 1.12 | 1.87 |
Total from investment operations | .57 | 1.77 | 1.34 | (.12) | 1.37 | 2.19 |
Distributions from net investment income | - | (.21) | (.22) | (.22) | (.21) | (.29) |
Distributions from net realized gain | (.16) | (.16) | (.13) | (.04) | (.08) | (.11) |
Total distributions | (.16) | (.37) | (.35) | (.26) | (.29) | (.39) H |
Net asset value, end of period | $ 13.00 | $ 12.59 | $ 11.19 | $ 10.20 | $ 10.58 | $ 9.50 |
Total ReturnB, C, D | 4.60% | 15.95% | 13.19% | (1.12)% | 14.52% | 28.78% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .10% A | .10% | .10% | .10% | .10% | .10% |
Expenses net of fee waivers, if any | .10% A | .10% | .10% | .10% | .10% | .10% |
Expenses net of all reductions | .10% A | .10% | .10% | .10% | .10% | .10% |
Net investment income (loss) | (.10)% A | 1.74% | 2.06% | 2.37% | 2.51% | 3.83% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 67,889 | $ 65,867 | $ 45,779 | $ 36,818 | $ 33,244 | $ 25,941 |
Portfolio turnover rate F | 8% A | 20% | 15% | 10% | 21% | 18% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.39 per share is comprised of distributions from net investment income of $.285 and distributions from net realized gain of $.107 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.54 | $ 11.16 | $ 10.17 | $ 10.55 | $ 9.48 | $ 7.69 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | .19 | .21 | .24 | .23 | .31 |
Net realized and unrealized gain (loss) | .58 | 1.54 | 1.11 | (.37) | 1.12 | 1.86 |
Total from investment operations | .56 | 1.73 | 1.32 | (.13) | 1.35 | 2.17 |
Distributions from net investment income | - | (.19) | (.20) | (.21) | (.20) | (.28) |
Distributions from net realized gain | (.16) | (.16) | (.13) | (.04) | (.08) | (.11) |
Total distributions | (.16) | (.35) | (.33) | (.25) | (.28) | (.38) H |
Net asset value, end of period | $ 12.94 | $ 12.54 | $ 11.16 | $ 10.17 | $ 10.55 | $ 9.48 |
Total ReturnB, C, D | 4.54% | 15.63% | 13.07% | (1.24)% | 14.33% | 28.55% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of all reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Net investment income (loss) | (.25)% A | 1.59% | 1.91% | 2.22% | 2.36% | 3.68% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 596,459 | $ 582,722 | $ 520,011 | $ 426,477 | $ 310,255 | $ 189,686 |
Portfolio turnover rate F | 8% A | 20% | 15% | 10% | 21% | 18% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.38 per share is comprised of distributions from net investment income of $.275 and distributions from net realized gain of $.107 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2025 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 8.8 | 9.2 |
VIP Equity-Income Portfolio Initial Class | 9.2 | 9.3 |
VIP Growth & Income Portfolio Initial Class | 10.5 | 10.8 |
VIP Growth Portfolio Initial Class | 9.0 | 9.6 |
VIP Mid Cap Portfolio Initial Class | 2.6 | 2.8 |
VIP Value Portfolio Initial Class | 6.8 | 7.0 |
VIP Value Strategies Portfolio Initial Class | 3.3 | 3.4 |
| 50.2 | 52.1 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 4.6 | 4.6 |
VIP Overseas Portfolio Initial Class | 16.9 | 17.9 |
| 21.5 | 22.5 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 6.8 | 6.6 |
VIP Investment Grade Bond Portfolio Initial Class | 20.4 | 18.8 |
| 27.2 | 25.4 |
Short-Term Funds | | |
VIP Money Market Portfolio Initial Class | 1.1 | 0.0 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1% |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 50.2% | |
| International Equity Funds | 21.5% | |
| Bond Funds | 27.2% | |
| Short-Term Funds | 1.1% | |
Six months ago |
| Domestic Equity Funds | 52.1% | |
 | International Equity Funds | 22.5% | |
| Bond Funds | 25.4% | |
Semiannual Report
VIP Freedom 2025 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 50.2% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (b) | 239,103 | | $ 8,765,523 |
VIP Equity-Income Portfolio Initial Class (b) | 368,158 | | 9,214,987 |
VIP Growth & Income Portfolio Initial Class (b) | 516,614 | | 10,523,428 |
VIP Growth Portfolio Initial Class (b) | 144,966 | | 9,005,308 |
VIP Mid Cap Portfolio Initial Class (b) | 68,032 | | 2,560,730 |
VIP Value Portfolio Initial Class (b) | 418,706 | | 6,757,917 |
VIP Value Strategies Portfolio Initial Class (b) | 216,385 | | 3,302,034 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $35,424,762) |
50,129,927
|
International Equity Funds - 21.5% |
| | | |
VIP Emerging Markets Portfolio Initial Class (b) | 474,612 | | 4,561,024 |
VIP Overseas Portfolio Initial Class (b) | 825,883 | | 16,905,822 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $18,290,073) |
21,466,846
|
Bond Funds - 27.2% |
| Shares | | Value |
VIP High Income Portfolio Initial Class (b) | 1,117,874 | | $ 6,807,856 |
VIP Investment Grade Bond Portfolio Initial Class (b) | 1,585,986 | | 20,411,642 |
TOTAL BOND FUNDS (Cost $27,030,993) |
27,219,498
|
Short-Term Funds - 1.1% |
| | | |
VIP Money Market Portfolio Initial Class 0.01% (a)(b)
(Cost $1,064,700) | 1,064,700 | |
1,064,700
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $81,810,528) | | 99,880,971 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (11,669) |
NET ASSETS - 100% | $ 99,869,302 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 8,526,388 | $ 1,195,455 | $ 1,514,727 | $ - | $ 8,765,523 |
VIP Emerging Markets Portfolio Initial Class | 4,226,339 | 717,325 | 656,893 | - | 4,561,024 |
VIP Equity-Income Portfolio Initial Class | 8,618,255 | 1,402,954 | 1,450,120 | - | 9,214,987 |
VIP Growth & Income Portfolio Initial Class | 10,054,377 | 1,452,757 | 1,619,458 | - | 10,523,428 |
VIP Growth Portfolio Initial Class | 8,908,461 | 1,544,100 | 2,211,461 | - | 9,005,308 |
VIP High Income Portfolio Initial Class | 6,160,224 | 1,198,741 | 860,239 | - | 6,807,856 |
VIP Investment Grade Bond Portfolio Initial Class | 17,405,403 | 5,309,428 | 3,048,472 | - | 20,411,642 |
VIP Mid Cap Portfolio Initial Class | 2,562,544 | 425,158 | 516,833 | - | 2,560,730 |
VIP Money Market Portfolio Initial Class | - | 1,120,968 | 56,268 | 29 | 1,064,700 |
VIP Overseas Portfolio Initial Class | 16,594,173 | 2,684,566 | 2,266,996 | - | 16,905,822 |
VIP Value Portfolio Initial Class | 6,461,681 | 941,020 | 1,046,602 | - | 6,757,917 |
VIP Value Strategies Portfolio Initial Class | 3,201,074 | 436,821 | 527,622 | - | 3,302,034 |
Total | $ 92,718,919 | $ 18,429,293 | $ 15,775,691 | $ 29 | $ 99,880,971 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2025 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $81,810,528) - See accompanying schedule | | $ 99,880,971 |
Receivable for fund shares sold | | 547,608 |
Total assets | | 100,428,579 |
| | |
Liabilities | | |
Payable to custodian bank | $ 35 | |
Payable for investments purchased | 306,233 | |
Payable for fund shares redeemed | 241,447 | |
Distribution and service plan fees payable | 11,562 | |
Total liabilities | | 559,277 |
| | |
Net Assets | | $ 99,869,302 |
Net Assets consist of: | | |
Paid in capital | | $ 81,736,326 |
Accumulated net investment loss | | (66,285) |
Accumulated undistributed net realized gain (loss) on investments | | 128,818 |
Net unrealized appreciation (depreciation) on investments | | 18,070,443 |
Net Assets | | $ 99,869,302 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($26,828,669 ÷ 1,990,117 shares) | | $ 13.48 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($27,997,981 ÷ 2,081,491 shares) | | $ 13.45 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($45,042,652 ÷ 3,364,260 shares) | | $ 13.39 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 29 |
| | |
Expenses | | |
Distribution and service plan fees | $ 66,314 | |
Independent trustees' compensation | 177 | |
Total expenses before reductions | 66,491 | |
Expense reductions | (177) | 66,314 |
Net investment income (loss) | | (66,285) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | 244,876 | |
Capital gain distributions from underlying funds | 161,872 | |
Total net realized gain (loss) | | 406,748 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 4,264,976 |
Net gain (loss) | | 4,671,724 |
Net increase (decrease) in net assets resulting from operations | | $ 4,605,439 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (66,285) | $ 1,503,074 |
Net realized gain (loss) | 406,748 | 1,765,872 |
Change in net unrealized appreciation (depreciation) | 4,264,976 | 11,161,093 |
Net increase (decrease) in net assets resulting from operations | 4,605,439 | 14,430,039 |
Distributions to shareholders from net investment income | - | (1,503,790) |
Distributions to shareholders from net realized gain | (1,113,055) | (1,289,396) |
Total distributions | (1,113,055) | (2,793,186) |
Share transactions - net increase (decrease) | 3,669,288 | 13,669,826 |
Total increase (decrease) in net assets | 7,161,672 | 25,306,679 |
| | |
Net Assets | | |
Beginning of period | 92,707,630 | 67,400,951 |
End of period (including accumulated net investment loss of $66,285 and $0, respectively) | $ 99,869,302 | $ 92,707,630 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.99 | $ 11.20 | $ 10.02 | $ 10.49 | $ 9.30 | $ 7.49 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - I | .25 | .24 | .24 | .28 | .32 |
Net realized and unrealized gain (loss) | .64 | 1.97 | 1.27 | (.46) | 1.19 | 1.89 |
Total from investment operations | .64 | 2.22 | 1.51 | (.22) | 1.47 | 2.21 |
Distributions from net investment income | - | (.23) | (.21) | (.22) | (.21) | (.29) |
Distributions from net realized gain | (.15) | (.20) | (.12) | (.03) | (.06) | (.12) |
Total distributions | (.15) | (.43) | (.33) | (.25) | (.28) K | (.40) J |
Net asset value, end of period | $ 13.48 | $ 12.99 | $ 11.20 | $ 10.02 | $ 10.49 | $ 9.30 |
Total ReturnB, C, D | 5.01% | 19.95% | 15.11% | (2.11)% | 15.79% | 30.05% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions G | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A | 2.03% | 2.17% | 2.25% | 2.91% | 3.84% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 26,829 | $ 24,548 | $ 17,792 | $ 15,537 | $ 17,388 | $ 14,888 |
Portfolio turnover rate F | 34% A | 30% | 34% | 21% | 25% | 30% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Amount represents less than .01%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Amount represents less than $.01 per share. J Total distributions of $.40 per share is comprised of distributions from net investment income of $.285 and distributions from net realized gain of $.117 per share. K Total distributions of $.28 per share is comprised of distributions from net investment income of $.214 and distributions from net realized gain of $.061 per share. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.97 | $ 11.18 | $ 10.01 | $ 10.49 | $ 9.30 | $ 7.49 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .23 | .22 | .23 | .27 | .31 |
Net realized and unrealized gain (loss) | .64 | 1.98 | 1.27 | (.47) | 1.19 | 1.90 |
Total from investment operations | .63 | 2.21 | 1.49 | (.24) | 1.46 | 2.21 |
Distributions from net investment income | - | (.22) | (.20) | (.21) | (.21) | (.28) |
Distributions from net realized gain | (.15) | (.20) | (.12) | (.03) | (.06) | (.12) |
Total distributions | (.15) | (.42) | (.32) | (.24) | (.27) | (.40) H |
Net asset value, end of period | $ 13.45 | $ 12.97 | $ 11.18 | $ 10.01 | $ 10.49 | $ 9.30 |
Total ReturnB, C, D | 4.95% | 19.89% | 14.97% | (2.26)% | 15.70% | 29.96% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .10% A | .10% | .10% | .10% | .10% | .10% |
Expenses net of fee waivers, if any | .10% A | .10% | .10% | .10% | .10% | .10% |
Expenses net of all reductions | .10% A | .10% | .10% | .10% | .10% | .10% |
Net investment income (loss) | (.10)% A | 1.93% | 2.07% | 2.16% | 2.81% | 3.74% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 27,998 | $ 21,780 | $ 16,558 | $ 7,149 | $ 1,429 | $ 679 |
Portfolio turnover rate F | 34% A | 30% | 34% | 21% | 25% | 30% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.40 per share is comprised of distributions from net investment income of $.278 and distributions from net realized gain of $.117 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.92 | $ 11.14 | $ 9.97 | $ 10.44 | $ 9.27 | $ 7.47 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | .22 | .21 | .21 | .26 | .30 |
Net realized and unrealized gain (loss) | .64 | 1.96 | 1.26 | (.45) | 1.17 | 1.89 |
Total from investment operations | .62 | 2.18 | 1.47 | (.24) | 1.43 | 2.19 |
Distributions from net investment income | - | (.20) | (.18) | (.19) | (.20) | (.27) |
Distributions from net realized gain | (.15) | (.20) | (.12) | (.03) | (.06) | (.12) |
Total distributions | (.15) | (.40) | (.30) | (.23) I | (.26) | (.39) H |
Net asset value, end of period | $ 13.39 | $ 12.92 | $ 11.14 | $ 9.97 | $ 10.44 | $ 9.27 |
Total ReturnB, C, D | 4.89% | 19.71% | 14.80% | (2.35)% | 15.47% | 29.79% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of all reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Net investment income (loss) | (.25)% A | 1.78% | 1.92% | 2.00% | 2.67% | 3.59% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 45,043 | $ 46,379 | $ 33,051 | $ 25,869 | $ 22,782 | $ 8,262 |
Portfolio turnover rate F | 34%A | 30% | 34% | 21% | 25% | 30% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.39 per share is comprised of distributions from net investment income of $.270 and distributions from net realized gain of $.117 per share. I Total distributions of $.23 per share is comprised of distributions from net investment income of $.192 and distributions from net realized gain of $.033 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2030 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 10.4 | 10.8 |
VIP Equity-Income Portfolio Initial Class | 10.9 | 11.0 |
VIP Growth & Income Portfolio Initial Class | 12.4 | 12.8 |
VIP Growth Portfolio Initial Class | 10.7 | 11.3 |
VIP Mid Cap Portfolio Initial Class | 3.0 | 3.2 |
VIP Value Portfolio Initial Class | 8.0 | 8.2 |
VIP Value Strategies Portfolio Initial Class | 3.9 | 4.0 |
| 59.3 | 61.3 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 5.4 | 5.3 |
VIP Overseas Portfolio Initial Class | 20.0 | 21.1 |
| 25.4 | 26.4 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 7.0 | 6.8 |
VIP Investment Grade Bond Portfolio Initial Class | 8.3 | 5.5 |
| 15.3 | 12.3 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1% |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 59.3% | |
| International Equity Funds | 25.4% | |
| Bond Funds | 15.3% | |
Six months ago |
| Domestic Equity Funds | 61.3% | |
| International Equity Funds | 26.4% | |
| Bond Funds | 12.3% | |
Semiannual Report
VIP Freedom 2030 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 59.3% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (a) | 734,121 | | $ 26,912,891 |
VIP Equity-Income Portfolio Initial Class (a) | 1,131,268 | | 28,315,626 |
VIP Growth & Income Portfolio Initial Class (a) | 1,586,452 | | 32,316,020 |
VIP Growth Portfolio Initial Class (a) | 445,149 | | 27,652,654 |
VIP Mid Cap Portfolio Initial Class (a) | 208,691 | | 7,855,148 |
VIP Value Portfolio Initial Class (a) | 1,286,025 | | 20,756,440 |
VIP Value Strategies Portfolio Initial Class (a) | 666,768 | | 10,174,881 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $114,128,196) |
153,983,660
|
International Equity Funds - 25.4% |
| | | |
VIP Emerging Markets Portfolio Initial Class (a) | 1,457,079 | | 14,002,528 |
VIP Overseas Portfolio Initial Class (a) | 2,539,340 | | 51,980,293 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $57,713,855) |
65,982,821
|
Bond Funds - 15.3% |
| Shares | | Value |
VIP High Income Portfolio Initial Class (a) | 2,964,676 | | $ 18,054,876 |
VIP Investment Grade Bond Portfolio Initial Class (a) | 1,683,420 | | 21,665,621 |
TOTAL BOND FUNDS (Cost $39,255,918) |
39,720,497
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $211,097,969) | | 259,686,978 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (32,581) |
NET ASSETS - 100% | $ 259,654,397 |
Legend |
(a) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 26,290,743 | $ 1,455,070 | $ 2,517,922 | $ - | $ 26,912,891 |
VIP Emerging Markets Portfolio Initial Class | 12,999,146 | 1,234,027 | 1,068,384 | - | 14,002,528 |
VIP Equity-Income Portfolio Initial Class | 26,631,689 | 1,904,732 | 2,193,814 | - | 28,315,626 |
VIP Growth & Income Portfolio Initial Class | 31,025,447 | 1,691,595 | 2,333,076 | - | 32,316,020 |
VIP Growth Portfolio Initial Class | 27,431,063 | 2,505,060 | 4,569,783 | - | 27,652,654 |
VIP High Income Portfolio Initial Class | 16,416,959 | 1,881,647 | 1,064,689 | - | 18,054,876 |
VIP Investment Grade Bond Portfolio Initial Class | 13,395,744 | 9,238,552 | 1,662,534 | - | 21,665,621 |
VIP Mid Cap Portfolio Initial Class | 7,860,120 | 662,207 | 934,486 | - | 7,855,148 |
VIP Overseas Portfolio Initial Class | 51,174,972 | 3,998,670 | 2,790,205 | - | 51,980,293 |
VIP Value Portfolio Initial Class | 19,932,844 | 1,360,335 | 1,772,342 | - | 20,756,440 |
VIP Value Strategies Portfolio Initial Class | 9,842,202 | 535,363 | 794,114 | - | 10,174,881 |
Total | $ 243,000,929 | $ 26,467,258 | $ 21,701,349 | $ - | $ 259,686,978 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2030 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $211,097,969) - See accompanying schedule | | $ 259,686,978 |
Receivable for investments sold | | 78,858 |
Receivable for fund shares sold | | 1,345,569 |
Total assets | | 261,111,405 |
| | |
Liabilities | | |
Payable to custodian bank | $ 49 | |
Payable for investments purchased | 1,310,895 | |
Payable for fund shares redeemed | 113,550 | |
Distribution and service plan fees payable | 32,514 | |
Total liabilities | | 1,457,008 |
| | |
Net Assets | | $ 259,654,397 |
Net Assets consist of: | | |
Paid in capital | | $ 211,897,081 |
Accumulated net investment loss | | (187,805) |
Accumulated undistributed net realized gain (loss) on investments | | (643,888) |
Net unrealized appreciation (depreciation) on investments | | 48,589,009 |
Net Assets | | $ 259,654,397 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($70,705,044 ÷ 5,304,324 shares) | | $ 13.33 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($50,229,999 ÷ 3,775,163 shares) | | $ 13.31 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($138,719,354 ÷ 10,466,714 shares) | | $ 13.25 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ - |
| | |
Expenses | | |
Distribution and service plan fees | $ 187,805 | |
Independent trustees' compensation | 461 | |
Total expenses before reductions | 188,266 | |
Expense reductions | (461) | 187,805 |
Net investment income (loss) | | (187,805) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | 141,099 | |
Capital gain distributions from underlying funds | 472,995 | |
Total net realized gain (loss) | | 614,094 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 11,787,937 |
Net gain (loss) | | 12,402,031 |
Net increase (decrease) in net assets resulting from operations | | $ 12,214,226 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (187,805) | $ 3,522,718 |
Net realized gain (loss) | 614,094 | 4,474,469 |
Change in net unrealized appreciation (depreciation) | 11,787,937 | 32,087,717 |
Net increase (decrease) in net assets resulting from operations | 12,214,226 | 40,084,904 |
Distributions to shareholders from net investment income | - | (3,560,740) |
Distributions to shareholders from net realized gain | (3,015,983) | (2,890,634) |
Total distributions | (3,015,983) | (6,451,374) |
Share transactions - net increase (decrease) | 7,485,671 | 43,511,429 |
Total increase (decrease) in net assets | 16,683,914 | 77,144,959 |
| | |
Net Assets | | |
Beginning of period | 242,970,483 | 165,825,524 |
End of period (including accumulated net investment loss of $187,805 and $0, respectively) | $ 259,654,397 | $ 242,970,483 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.84 | $ 10.88 | $ 9.70 | $ 10.21 | $ 9.03 | $ 7.12 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - | .22 | .25 | .23 | .21 | .24 |
Net realized and unrealized gain (loss) | .65 | 2.12 | 1.26 | (.49) | 1.24 | 1.96 |
Total from investment operations | .65 | 2.34 | 1.51 | (.26) | 1.45 | 2.20 |
Distributions from net investment income | - | (.21) | (.23) | (.22) | (.20) | (.18) |
Distributions from net realized gain | (.16) | (.17) | (.10) | (.03) | (.07) | (.11) |
Total distributions | (.16) | (.38) | (.33) | (.25) | (.27) | (.29) |
Net asset value, end of period | $ 13.33 | $ 12.84 | $ 10.88 | $ 9.70 | $ 10.21 | $ 9.03 |
Total ReturnB, C, D | 5.14% | 21.66% | 15.58% | (2.60)% | 16.08% | 31.66% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions G | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A | 1.88% | 2.39% | 2.27% | 2.25% | 3.13% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 70,705 | $ 64,173 | $ 39,111 | $ 30,601 | $ 28,917 | $ 23,836 |
Portfolio turnover rate F | 18% A | 30% | 17% | 16% | 25% | 24% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Amounts represents less than .01%. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.82 | $ 10.87 | $ 9.69 | $ 10.20 | $ 9.02 | $ 7.12 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .21 | .24 | .22 | .20 | .24 |
Net realized and unrealized gain (loss) | .66 | 2.11 | 1.26 | (.49) | 1.24 | 1.94 |
Total from investment operations | .65 | 2.32 | 1.50 | (.27) | 1.44 | 2.18 |
Distributions from net investment income | - | (.20) | (.22) | (.21) | (.19) | (.17) |
Distributions from net realized gain | (.16) | (.17) | (.10) | (.03) | (.07) | (.11) |
Total distributions | (.16) | (.37) | (.32) | (.24) | (.26) | (.28) |
Net asset value, end of period | $ 13.31 | $ 12.82 | $ 10.87 | $ 9.69 | $ 10.20 | $ 9.02 |
Total ReturnB, C, D | 5.14% | 21.50% | 15.48% | (2.70)% | 16.00% | 31.40% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .10%A | .10% | .10% | .10% | .10% | .10% |
Expenses net of fee waivers, if any | .10%A | .10% | .10% | .10% | .10% | .10% |
Expenses net of all reductions | .10%A | .10% | .10% | .10% | .10% | .10% |
Net investment income (loss) | (.10)% A | 1.78% | 2.29% | 2.17% | 2.15% | 3.03% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 50,230 | $ 46,868 | $ 32,295 | $ 28,666 | $ 23,137 | $ 16,162 |
Portfolio turnover rate F | 18% A | 30% | 17% | 16% | 25% | 24% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.78 | $ 10.83 | $ 9.67 | $ 10.18 | $ 9.00 | $ 7.11 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | .19 | .23 | .21 | .19 | .23 |
Net realized and unrealized gain (loss) | .65 | 2.11 | 1.23 | (.50) | 1.24 | 1.93 |
Total from investment operations | .63 | 2.30 | 1.46 | (.29) | 1.43 | 2.16 |
Distributions from net investment income | - | (.18) | (.21) | (.19) | (.17) | (.16) |
Distributions from net realized gain | (.16) | (.17) | (.10) | (.03) | (.07) | (.11) |
Total distributions | (.16) | (.35) | (.30) I | (.22) | (.25) H | (.27) |
Net asset value, end of period | $ 13.25 | $ 12.78 | $ 10.83 | $ 9.67 | $ 10.18 | $ 9.00 |
Total ReturnB, C, D | 5.00% | 21.41% | 15.18% | (2.83)% | 15.89% | 31.18% |
Ratios to Average Net Assets F,G | | | | | | |
Expenses before reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .25% A | .25% | .25% | .25% | .25% | .25% |
Expenses net of all reductions | .25% A | .25% | .25% | .25% | .25% | .25% |
Net investment income (loss) | (.25)% A | 1.63% | 2.14% | 2.02% | 2.01% | 2.88% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 138,719 | $ 131,930 | $ 94,419 | $ 59,671 | $ 49,574 | $ 34,809 |
Portfolio turnover rate F | 18% A | 30% | 17% | 16% | 25% | 24% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. H Total distributions of $.25 per share is comprised of distributions from net investment income of $.173 and distributions from net realized gain of $.072 per share. I Total distributions of $.30 per share is comprised of distributions from net investment income of $.207 and distributions from net realized gain of $.096 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2035 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 11.0 | 11.1 |
VIP Equity-Income Portfolio Initial Class | 11.6 | 11.4 |
VIP Growth & Income Portfolio Initial Class | 13.2 | 13.2 |
VIP Growth Portfolio Initial Class | 11.3 | 11.5 |
VIP Mid Cap Portfolio Initial Class | 3.2 | 3.3 |
VIP Value Portfolio Initial Class | 8.5 | 8.4 |
VIP Value Strategies Portfolio Initial Class | 4.2 | 4.2 |
| 63.0 | 63.1 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 5.7 | 5.6 |
VIP Overseas Portfolio Initial Class | 21.3 | 21.5 |
| 27.0 | 27.1 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 7.0 | 6.8 |
VIP Investment Grade Bond Portfolio Initial Class | 3.0 | 3.0 |
| 10.0 | 9.8 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1% |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 63.0% | |
| International Equity Funds | 27.0% | |
| Bond Funds | 10.0% | |
Six months ago |
| Domestic Equity Funds | 63.1% | |
| International Equity Funds | 27.1% | |
| Bond Funds | 9.8% | |
Semiannual Report
VIP Freedom 2035 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 63.0% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (a) | 34,748 | | $ 1,273,876 |
VIP Equity-Income Portfolio Initial Class (a) | 53,478 | | 1,338,551 |
VIP Growth & Income Portfolio Initial Class (a) | 75,010 | | 1,527,958 |
VIP Growth Portfolio Initial Class (a) | 20,971 | | 1,302,748 |
VIP Mid Cap Portfolio Initial Class (a) | 9,849 | | 370,729 |
VIP Value Portfolio Initial Class (a) | 60,894 | | 982,836 |
VIP Value Strategies Portfolio Initial Class (a) | 31,484 | | 480,446 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $6,454,914) |
7,277,144
|
International Equity Funds - 27.0% |
| | | |
VIP Emerging Markets Portfolio Initial Class (a) | 68,983 | | 662,923 |
VIP Overseas Portfolio Initial Class (a) | 119,893 | | 2,454,202 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $2,913,134) |
3,117,125
|
Bond Funds - 10.0% |
| Shares | | Value |
VIP High Income Portfolio Initial Class (a) | 132,749 | | $ 808,443 |
VIP Investment Grade Bond Portfolio Initial Class (a) | 26,921 | | 346,476 |
TOTAL BOND FUNDS (Cost $1,120,174) |
1,154,919
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $10,488,222) | | 11,549,188 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (2,021) |
NET ASSETS - 100% | $ 11,547,167 |
Legend |
(a) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 640,327 | $ 651,020 | $ 90,287 | $ - | $ 1,273,876 |
VIP Emerging Markets Portfolio Initial Class | 325,159 | 363,698 | 67,438 | - | 662,923 |
VIP Equity-Income Portfolio Initial Class | 655,181 | 696,062 | 97,511 | - | 1,338,551 |
VIP Growth & Income Portfolio Initial Class | 759,347 | 795,701 | 114,159 | - | 1,527,958 |
VIP Growth Portfolio Initial Class | 665,321 | 680,036 | 132,487 | - | 1,302,748 |
VIP High Income Portfolio Initial Class | 391,568 | 492,659 | 104,466 | - | 808,443 |
VIP Investment Grade Bond Portfolio Initial Class | 174,929 | 329,564 | 168,657 | - | 346,476 |
VIP Mid Cap Portfolio Initial Class | 189,279 | 194,554 | 27,215 | - | 370,729 |
VIP Overseas Portfolio Initial Class | 1,238,968 | 1,383,762 | 176,499 | - | 2,454,202 |
VIP Value Portfolio Initial Class | 487,649 | 510,391 | 69,053 | - | 982,836 |
VIP Value Strategies Portfolio Initial Class | 240,059 | 245,870 | 32,142 | - | 480,446 |
Total | $ 5,767,787 | $ 6,343,317 | $ 1,079,914 | $ - | $ 11,549,188 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2035 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $10,488,222) - See accompanying schedule | | $ 11,549,188 |
Receivable for investments sold | | 53,980 |
Receivable for fund shares sold | | 25,889 |
Total assets | | 11,629,057 |
| | |
Liabilities | | |
Payable for investments purchased | $ 1,152 | |
Payable for fund shares redeemed | 78,719 | |
Distribution and service plan fees payable | 2,019 | |
Total liabilities | | 81,890 |
| | |
Net Assets | | $ 11,547,167 |
Net Assets consist of: | | |
Paid in capital | | $ 10,503,156 |
Accumulated net investment loss | | (9,293) |
Accumulated undistributed net realized gain (loss) on investments | | (7,662) |
Net unrealized appreciation (depreciation) on investments | | 1,060,966 |
Net Assets | | $ 11,547,167 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($565,755 ÷ 28,294 shares) | | $ 20.00 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($984,026 ÷ 49,256 shares) | | $ 19.98 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($9,997,386 ÷ 502,483 shares) | | $ 19.90 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ - |
| | |
Expenses | | |
Distribution and service plan fees | $ 9,293 | |
Independent trustees' compensation | 15 | |
Total expenses before reductions | 9,308 | |
Expense reductions | (15) | 9,293 |
Net investment income (loss) | | (9,293) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (11,234) | |
Capital gain distributions from underlying funds | 14,022 | |
Total net realized gain (loss) | | 2,788 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 529,224 |
Net gain (loss) | | 532,012 |
Net increase (decrease) in net assets resulting from operations | | $ 522,719 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (9,293) | $ 80,289 |
Net realized gain (loss) | 2,788 | 88,918 |
Change in net unrealized appreciation (depreciation) | 529,224 | 359,936 |
Net increase (decrease) in net assets resulting from operations | 522,719 | 529,143 |
Distributions to shareholders from net investment income | - | (80,620) |
Distributions to shareholders from net realized gain | (60,319) | (41,889) |
Total distributions | (60,319) | (122,509) |
Share transactions - net increase (decrease) | 5,317,857 | 4,318,971 |
Total increase (decrease) in net assets | 5,780,257 | 4,725,605 |
| | |
Net Assets | | |
Beginning of period | 5,766,910 | 1,041,305 |
End of period (including accumulated net investment loss of $9,293 and $0, respectively) | $ 11,547,167 | $ 5,766,910 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 19.16 | $ 15.76 | $ 13.82 | $ 14.74 | $ 13.74 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - | .66 | .49 | .27 | .27 | .25 |
Net realized and unrealized gain (loss) | 1.00 | 3.24 | 1.83 | (.85) | 2.04 | 3.76 |
Total from investment operations | 1.00 | 3.90 | 2.32 | (.58) | 2.31 | 4.01 |
Distributions from net investment income | - | (.29) | (.31) | (.28) | (.28) | (.25) |
Distributions from net realized gain | (.16) | (.20) | (.07) | (.06) | (1.03) | (.01) |
Total distributions | (.16) | (.50) J | (.38) | (.34) | (1.31) | (.27) K |
Net asset value, end of period | $ 20.00 | $ 19.16 | $ 15.76 | $ 13.82 | $ 14.74 | $ 13.74 |
Total ReturnB, C, D | 5.27% | 24.84% | 16.82% | (3.99)% | 17.01% | 40.04% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .00% A, K | .00% | .00% | .00% | .00% | .00% A |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% A |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% A |
Net investment income (loss) | .00% A | 3.72% | 3.20% | 1.82% | 1.92% | 2.78% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 566 | $ 1,054 | $ 128 | $ 97 | $ 121 | $ 144 |
Portfolio turnover rate F | 25% A | 31% | 19% | 38% | 38% | 5% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. ECalculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Total distributions of $.50 per share is comprised of distributions from net investment income of $.292 and distributions from net realized gain of $.204 per share. J Total distributions of $.27 per share is comprised of distributions from net investment income of $.252 and distributions from net realized gain of $.014 per share. K Amount represents less than .01%. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 19.15 | $ 15.76 | $ 13.82 | $ 14.74 | $ 13.73 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .64 | .47 | .25 | .26 | .24 |
Net realized and unrealized gain (loss) | 1.00 | 3.24 | 1.84 | (.85) | 2.04 | 3.75 |
Total from investment operations | .99 | 3.88 | 2.31 | (.60) | 2.30 | 3.99 |
Distributions from net investment income | - | (.28) | (.30) | (.26) | (.26) | (.24) |
Distributions from net realized gain | (.16) | (.20) | (.07) | (.06) | (1.03) | (.01) |
Total distributions | (.16) | (.49) J | (.37) | (.32) | (1.29) | (.26) I |
Net asset value, end of period | $ 19.98 | $ 19.15 | $ 15.76 | $ 13.82 | $ 14.74 | $ 13.73 |
Total ReturnB, C, D | 5.22% | 24.72% | 16.71% | (4.10)% | 16.97% | 39.85% |
Ratios to Average Net Assets E,H | | | | | | |
Expenses before reductions | .10% A | .10% | .10% | .10% | .10% | .10% A |
Expenses net of fee waivers, if any | .10% A | .10% | .10% | .10% | .10% | .10% A |
Expenses net of all reductions | .10% A | .10% | .10% | .10% | .10% | .10%A |
Net investment income (loss) | (.10)% A | 3.62% | 3.10% | 1.72% | 1.82% | 2.68%A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 984 | $ 289 | $ 105 | $ 90 | $ 116 | $ 140 |
Portfolio turnover rate E | 25% A | 31% | 19% | 38% | 38% | 5% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Total distributions of $.26 per share is comprised of distributions from net investment income of $.243 and distributions from net realized gain of $.014 per share. J Total distributions of $.49 per share is comprised of distributions from net investment income of $.283 and distributions from net realized gain of $.204 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 19.09 | $ 15.73 | $ 13.80 | $ 14.72 | $ 13.73 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | .62 | .45 | .23 | .24 | .23 |
Net realized and unrealized gain (loss) | .99 | 3.22 | 1.84 | (.85) | 2.03 | 3.74 |
Total from investment operations | .97 | 3.84 | 2.29 | (.62) | 2.27 | 3.97 |
Distributions from net investment income | - | (.27) | (.29) | (.24) | (.26) | (.23) |
Distributions from net realized gain | (.16) | (.20) | (.07) | (.06) | (1.03) | (.01) |
Total distributions | (.16) | (.48) I | (.36) | (.30) | (1.28) K | (.24) J |
Net asset value, end of period | $ 19.90 | $ 19.09 | $ 15.73 | $ 13.80 | $ 14.72 | $ 13.73 |
Total ReturnB, C, D | 5.13% | 24.50% | 16.61% | (4.25)% | 16.76% | 39.72% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .25% A | .25% | .25% | .25% | .25% | .25% A |
Expenses net of fee waivers, if any | .25% A | .25% | .25% | .25% | .25% | .25% A |
Expenses net of all reductions | .25% A | .25% | .25% | .25% | .25% | .25% A |
Net investment income (loss) | (.25)%A | 3.48% | 2.95% | 1.57% | 1.67% | 2.53% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 9,997 | $ 4,423 | $ 808 | $ 276 | $ 211 | $ 143 |
Portfolio turnover rate F | 25% A | 31% | 19% | 38% | 38% | 5% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Total distributions of $.48 per share is comprised of distributions from net investment income of $.271 and distributions from net realized gain of $.204 per share. J Total distributions of $.24 per share is comprised of distributions from net investment income of $.230 and distributions from net realized gain of $.014 per share. K Total distributions of $1.28 per share is comprised of distributions from net investment income of $.255 and distributions from net realized gain of $1.029 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2040 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 11.0 | 11.1 |
VIP Equity-Income Portfolio Initial Class | 11.6 | 11.3 |
VIP Growth & Income Portfolio Initial Class | 13.2 | 13.1 |
VIP Growth Portfolio Initial Class | 11.3 | 11.6 |
VIP Mid Cap Portfolio Initial Class | 3.2 | 3.3 |
VIP Value Portfolio Initial Class | 8.5 | 8.5 |
VIP Value Strategies Portfolio Initial Class | 4.2 | 4.1 |
| 63.0 | 63.0 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 5.8 | 5.6 |
VIP Overseas Portfolio Initial Class | 21.2 | 21.5 |
| 27.0 | 27.1 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 7.0 | 6.8 |
VIP Investment Grade Bond Portfolio Initial Class | 3.0 | 3.1 |
| 10.0 | 9.9 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1% |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 63.0% | |
| International Equity Funds | 27.0% | |
| Bond Funds | 10.0% | |
Six months ago |
| Domestic Equity Funds | 63.0% | |
| International Equity Funds | 27.1% | |
| Bond Funds | 9.9% | |
Semiannual Report
VIP Freedom 2040 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 63.0% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (a) | 95,744 | | $ 3,509,973 |
VIP Equity-Income Portfolio Initial Class (a) | 147,359 | | 3,688,398 |
VIP Growth & Income Portfolio Initial Class (a) | 206,722 | | 4,210,926 |
VIP Growth Portfolio Initial Class (a) | 58,009 | | 3,603,498 |
VIP Mid Cap Portfolio Initial Class (a) | 27,103 | | 1,020,139 |
VIP Value Portfolio Initial Class (a) | 167,761 | | 2,707,660 |
VIP Value Strategies Portfolio Initial Class (a) | 86,716 | | 1,323,284 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $16,687,006) |
20,063,878
|
International Equity Funds - 27.0% |
| | | |
VIP Emerging Markets Portfolio Initial Class (a) | 191,337 | | 1,838,751 |
VIP Overseas Portfolio Initial Class (a) | 331,042 | | 6,776,431 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $7,741,650) |
8,615,182
|
Bond Funds - 10.0% |
| Shares | | Value |
VIP High Income Portfolio Initial Class (a) | 365,792 | | $ 2,227,671 |
VIP Investment Grade Bond Portfolio Initial Class (a) | 74,186 | | 954,777 |
TOTAL BOND FUNDS (Cost $3,085,707) |
3,182,448
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $27,514,363) | | 31,861,508 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (2,136) |
NET ASSETS - 100% | $ 31,859,372 |
Legend |
(a) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 2,460,749 | $ 1,092,305 | $ 244,709 | $ - | $ 3,509,973 |
VIP Emerging Markets Portfolio Initial Class | 1,238,252 | 604,410 | 113,237 | - | 1,838,751 |
VIP Equity-Income Portfolio Initial Class | 2,495,378 | 1,168,503 | 211,382 | - | 3,688,398 |
VIP Growth & Income Portfolio Initial Class | 2,914,207 | 1,293,983 | 234,571 | - | 4,210,926 |
VIP Growth Portfolio Initial Class | 2,568,656 | 1,164,418 | 387,620 | - | 3,603,498 |
VIP High Income Portfolio Initial Class | 1,504,471 | 784,698 | 147,646 | - | 2,227,671 |
VIP Investment Grade Bond Portfolio Initial Class | 679,618 | 620,601 | 376,885 | - | 954,777 |
VIP Mid Cap Portfolio Initial Class | 733,608 | 339,844 | 88,864 | - | 1,020,139 |
VIP Overseas Portfolio Initial Class | 4,763,663 | 2,424,674 | 401,612 | - | 6,776,431 |
VIP Value Portfolio Initial Class | 1,874,418 | 854,805 | 169,857 | - | 2,707,660 |
VIP Value Strategies Portfolio Initial Class | 920,617 | 410,217 | 80,267 | - | 1,323,284 |
Total | $ 22,153,637 | $ 10,758,458 | $ 2,456,650 | $ - | $ 31,861,508 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2040 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $27,514,363) - See accompanying schedule | | $ 31,861,508 |
Receivable for investments sold | | 4,847 |
Receivable for fund shares sold | | 20,821 |
Total assets | | 31,887,176 |
| | |
Liabilities | | |
Payable for investments purchased | $ 6,854 | |
Payable for fund shares redeemed | 18,812 | |
Distribution and service plan fees payable | 2,138 | |
Total liabilities | | 27,804 |
| | |
Net Assets | | $ 31,859,372 |
Net Assets consist of: | | |
Paid in capital | | $ 27,597,201 |
Accumulated net investment loss | | (10,363) |
Accumulated undistributed net realized gain (loss) on investments | | (74,611) |
Net unrealized appreciation (depreciation) on investments | | 4,347,145 |
Net Assets | | $ 31,859,372 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($14,341,841 ÷ 750,108 shares) | | $ 19.12 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($11,530,239 ÷ 603,873 shares) | | $ 19.09 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($5,987,292 ÷ 314,476 shares) | | $ 19.04 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ - |
| | |
Expenses | | |
Distribution and service plan fees | $ 10,363 | |
Independent trustees' compensation | 46 | |
Total expenses before reductions | 10,409 | |
Expense reductions | (46) | 10,363 |
Net investment income (loss) | | (10,363) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (19,779) | |
Capital gain distributions from underlying funds | 46,044 | |
Total net realized gain (loss) | | 26,265 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 1,429,132 |
Net gain (loss) | | 1,455,397 |
Net increase (decrease) in net assets resulting from operations | | $ 1,445,034 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (10,363) | $ 311,434 |
Net realized gain (loss) | 26,265 | 349,031 |
Change in net unrealized appreciation (depreciation) | 1,429,132 | 2,561,148 |
Net increase (decrease) in net assets resulting from operations | 1,445,034 | 3,221,613 |
Distributions to shareholders from net investment income | - | (313,021) |
Distributions to shareholders from net realized gain | (225,214) | (186,661) |
Total distributions | (225,214) | (499,682) |
Share transactions - net increase (decrease) | 8,487,105 | 10,880,097 |
Total increase (decrease) in net assets | 9,706,925 | 13,602,028 |
| | |
Net Assets | | |
Beginning of period | 22,152,447 | 8,550,419 |
End of period (including accumulated net investment loss of $10,363 and $0, respectively) | $ 31,859,372 | $ 22,152,447 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 H |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.35 | $ 15.03 | $ 13.16 | $ 14.02 | $ 13.82 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - | .38 | .42 | .35 | .20 | .26 |
Net realized and unrealized gain (loss) | .95 | 3.41 | 1.81 | (.91) | 2.15 | 3.83 |
Total from investment operations | .95 | 3.79 | 2.23 | (.56) | 2.35 | 4.09 |
Distributions from net investment income | - | (.27) | (.29) | (.27) | (.28) | (.26) |
Distributions from net realized gain | (.18) | (.19) | (.07) | (.02) | (1.87) | (.01) |
Total distributions | (.18) | (.47) J | (.36) | (.30) L | (2.15) | (.27) K |
Net asset value, end of period | $ 19.12 | $ 18.35 | $ 15.03 | $ 13.16 | $ 14.02 | $ 13.82 |
Total ReturnB, C, D | 5.23% | 25.29% | 16.95% | (4.02)% | 17.19% | 40.89% |
Ratios to Average Net Assets F,I | | | | | | |
Expenses before reductions | .00% A,G | .00% G | .00% G | .00% G | .00% | .00% A |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% A |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% A |
Net investment income (loss) | .00%A | 2.26% | 2.91% | 2.50% | 1.46% | 2.81% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 14,342 | $ 10,262 | $ 3,369 | $ 1,559 | $ 278 | $ 145 |
Portfolio turnover rate F | 19% A | 36% | 39% | 42% | 194% | 5% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. GAmount represents less than .01%. H For the period April 8, 2009 (commencement of operations) to December 31, 2009. I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. J Total distributions of $.47 per share is comprised of distributions from net investment income of $.272 and distributions from net realized gain of $.193 per share. K Total distributions of $.27 per share is comprised of distributions from net investment income of $.257 and distributions from net realized gain of $.014 per share. L Total distributions of $.30 per share is comprised of distributions from net investment income of $.274 and distributions from net realized gain of $.022 per share. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.33 | $ 15.02 | $ 13.15 | $ 14.02 | $ 13.82 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .36 | .41 | .33 | .19 | .25 |
Net realized and unrealized gain (loss) | .95 | 3.40 | 1.81 | (.91) | 2.14 | 3.83 |
Total from investment operations | .94 | 3.76 | 2.22 | (.58) | 2.33 | 4.08 |
Distributions from net investment income | - | (.26) | (.28) | (.26) | (.26) | (.25) |
Distributions from net realized gain | (.18) | (.19) | (.07) | (.02) | (1.87) | (.01) |
Total distributions | (.18) | (.45) | (.35) | (.29) J | (2.13) | (.26) I |
Net asset value, end of period | $ 19.09 | $ 18.33 | $ 15.02 | $ 13.15 | $ 14.02 | $ 13.82 |
Total ReturnB, C, D | 5.18% | 25.16% | 16.88% | (4.17)% | 17.05% | 40.80% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .10% A | .10% | .10% | .10% | .10% | .10% A |
Expenses net of fee waivers, if any | .10% A | .10% | .10% | .10% | .10% | .10% A |
Expenses net of all reductions | .10% A | .10% | .10% | .10% | .10% | .10% A |
Net investment income (loss) | (.10)% A | 2.16% | 2.81% | 2.41% | 1.36% | 2.71% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 11,530 | $ 9,076 | $ 4,600 | $ 1,058 | $ 116 | $ 141 |
Portfolio turnover rate F | 19% A | 36% | 39% | 42% | 194% | 5% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Total distributions of $.26 per share is comprised of distributions from net investment income of $.248 and distributions from net realized gain of $.014 per share. J Total distributions of $.29 per share is comprised of distributions from net investment income of $.264 and distributions from net realized gain of $.022 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.29 | $ 15.00 | $ 13.15 | $ 14.02 | $ 13.82 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | .34 | .39 | .32 | .17 | .23 |
Net realized and unrealized gain (loss) | .95 | 3.39 | 1.79 | (.92) | 2.14 | 3.84 |
Total from investment operations | .93 | 3.73 | 2.18 | (.60) | 2.31 | 4.07 |
Distributions from net investment income | - | (.25) | (.27) | (.24) | (.24) | (.23) |
Distributions from net realized gain | (.18) | (.19) | (.07) | (.02) | (1.87) | (.01) |
Total distributions | (.18) | (.44) | (.33) K | (.27) J | (2.11) | (.25) I |
Net asset value, end of period | $ 19.04 | $ 18.29 | $ 15.00 | $ 13.15 | $ 14.02 | $ 13.82 |
Total ReturnB, C, D | 5.14% | 24.99% | 16.64% | (4.32)% | 16.92% | 40.66% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .25% A | .25% | .25% | .25% | .25% | .25% A |
Expenses net of fee waivers, if any | .25% A | .25% | .25% | .25% | .25% | .25% A |
Expenses net of all reductions | .25% A | .25% | .25% | .25% | .25% | .25% A |
Net investment income (loss) | (.25)% A | 2.01% | 2.66% | 2.25% | 1.21% | 2.56% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 5,987 | $ 2,815 | $ 581 | $ 137 | $ 144 | $ 141 |
Portfolio turnover rate F | 19% A | 36% | 39% | 42% | 194% | 5% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Total distributions of $.25 per share is comprised of distributions from net investment income of $.234 and distributions from net realized gain of $.014 per share. J Total distributions of $.27 per share is comprised of distributions from net investment income of $.243 and distributions from net realized gain of $.022 per share. K Total distributions of $.33 per share is comprised of distributions from net investment income of $.265 and distributions from net realized gain of $.069 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2045 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 11.0 | 11.1 |
VIP Equity-Income Portfolio Initial Class | 11.6 | 11.3 |
VIP Growth & Income Portfolio Initial Class | 13.2 | 13.2 |
VIP Growth Portfolio Initial Class | 11.3 | 11.5 |
VIP Mid Cap Portfolio Initial Class | 3.2 | 3.3 |
VIP Value Portfolio Initial Class | 8.5 | 8.5 |
VIP Value Strategies Portfolio Initial Class | 4.2 | 4.2 |
| 63.0 | 63.1 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 5.7 | 5.7 |
VIP Overseas Portfolio Initial Class | 21.3 | 21.5 |
| 27.0 | 27.2 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 7.0 | 6.8 |
VIP Investment Grade Bond Portfolio Initial Class | 3.0 | 2.9 |
| 10.0 | 9.7 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1% |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 63.0% | |
| International Equity Funds | 27.0% | |
| Bond Funds | 10.0% | |
Six months ago |
| Domestic Equity Funds | 63.1% | |
| International Equity Funds | 27.2% | |
| Bond Funds | 9.7% | |
Semiannual Report
VIP Freedom 2045 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 63.0% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (a) | 18,352 | | $ 672,774 |
VIP Equity-Income Portfolio Initial Class (a) | 28,243 | | 706,931 |
VIP Growth & Income Portfolio Initial Class (a) | 39,615 | | 806,963 |
VIP Growth Portfolio Initial Class (a) | 11,076 | | 688,023 |
VIP Mid Cap Portfolio Initial Class (a) | 5,202 | | 195,794 |
VIP Value Portfolio Initial Class (a) | 32,160 | | 519,067 |
VIP Value Strategies Portfolio Initial Class (a) | 16,628 | | 253,739 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $3,336,562) |
3,843,291
|
International Equity Funds - 27.0% |
| | | |
VIP Emerging Markets Portfolio Initial Class (a) | 36,432 | | 350,111 |
VIP Overseas Portfolio Initial Class (a) | 63,319 | | 1,296,142 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $1,514,660) |
1,646,253
|
Bond Funds - 10.0% |
| Shares | | Value |
VIP High Income Portfolio Initial Class (a) | 70,109 | | $ 426,965 |
VIP Investment Grade Bond Portfolio Initial Class (a) | 14,218 | | 182,985 |
TOTAL BOND FUNDS (Cost $586,309) |
609,950
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $5,437,531) | | 6,099,494 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (1,099) |
NET ASSETS - 100% | $ 6,098,395 |
Legend |
(a) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 326,601 | $ 370,863 | $ 60,401 | $ - | $ 672,774 |
VIP Emerging Markets Portfolio Initial Class | 166,319 | 192,222 | 28,677 | - | 350,111 |
VIP Equity-Income Portfolio Initial Class | 333,339 | 392,920 | 60,427 | - | 706,931 |
VIP Growth & Income Portfolio Initial Class | 388,011 | 443,589 | 66,734 | - | 806,963 |
VIP Growth Portfolio Initial Class | 336,722 | 375,488 | 69,246 | - | 688,023 |
VIP High Income Portfolio Initial Class | 199,421 | 259,371 | 45,710 | - | 426,965 |
VIP Investment Grade Bond Portfolio Initial Class | 85,400 | 208,971 | 116,394 | - | 182,985 |
VIP Mid Cap Portfolio Initial Class | 96,671 | 109,944 | 17,877 | - | 195,794 |
VIP Overseas Portfolio Initial Class | 631,251 | 760,083 | 101,488 | - | 1,296,142 |
VIP Value Portfolio Initial Class | 248,594 | 288,687 | 44,048 | - | 519,067 |
VIP Value Strategies Portfolio Initial Class | 122,454 | 138,416 | 20,286 | - | 253,739 |
Total | $ 2,934,783 | $ 3,540,554 | $ 631,288 | $ - | $ 6,099,494 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2045 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $5,437,531) - See accompanying schedule | | $ 6,099,494 |
Receivable for fund shares sold | | 65,065 |
Total assets | | 6,164,559 |
| | |
Liabilities | | |
Payable for investments purchased | $ 58,008 | |
Payable for fund shares redeemed | 7,058 | |
Distribution and service plan fees payable | 1,098 | |
Total liabilities | | 66,164 |
| | |
Net Assets | | $ 6,098,395 |
Net Assets consist of: | | |
Paid in capital | | $ 5,442,016 |
Accumulated net investment loss | | (4,725) |
Accumulated undistributed net realized gain (loss) on investments | | (859) |
Net unrealized appreciation (depreciation) on investments | | 661,963 |
Net Assets | | $ 6,098,395 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($271,468 ÷ 14,326 shares) | | $ 18.95 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($171,918 ÷ 9,077 shares) | | $ 18.94 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($5,655,009 ÷ 299,663 shares) | | $ 18.87 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ - |
| | |
Expenses | | |
Distribution and service plan fees | $ 4,725 | |
Independent trustees' compensation | 7 | |
Total expenses before reductions | 4,732 | |
Expense reductions | (7) | 4,725 |
Net investment income (loss) | | (4,725) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (4,645) | |
Capital gain distributions from underlying funds | 6,920 | |
Total net realized gain (loss) | | 2,275 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 261,203 |
Net gain (loss) | | 263,478 |
Net increase (decrease) in net assets resulting from operations | | $ 258,753 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (4,725) | $ 42,445 |
Net realized gain (loss) | 2,275 | 54,366 |
Change in net unrealized appreciation (depreciation) | 261,203 | 251,989 |
Net increase (decrease) in net assets resulting from operations | 258,753 | 348,800 |
Distributions to shareholders from net investment income | - | (42,511) |
Distributions to shareholders from net realized gain | (33,108) | (27,647) |
Total distributions | (33,108) | (70,158) |
Share transactions - net increase (decrease) | 2,938,479 | 1,900,136 |
Total increase (decrease) in net assets | 3,164,124 | 2,178,778 |
| | |
Net Assets | | |
Beginning of period | 2,934,271 | 755,493 |
End of period (including accumulated net investment loss of $4,725 and $0, respectively) | $ 6,098,395 | $ 2,934,271 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.18 | $ 14.83 | $ 13.38 | $ 14.61 | $ 13.86 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - | .52 | .44 | .27 | .24 | .26 |
Net realized and unrealized gain (loss) | .95 | 3.33 | 1.84 | (.89) | 2.14 | 3.87 |
Total from investment operations | .95 | 3.85 | 2.28 | (.62) | 2.38 | 4.13 |
Distributions from net investment income | - | (.29) | (.30) | (.28) | (.29) | (.26) |
Distributions from net realized gain | (.18) | (.21) | (.53) | (.34) | (1.34) | (.01) |
Total distributions | (.18) | (.50) | (.83) | (.61) I | (1.63) | (.27) |
Net asset value, end of period | $ 18.95 | $ 18.18 | $ 14.83 | $ 13.38 | $ 14.61 | $ 13.86 |
Total ReturnB, C, D | 5.27% | 26.07% | 17.33% | (4.41)% | 17.37% | 41.28% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .00% A, J | .00% | .00% | .00% | .00% | .00% A |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% A |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% A |
Net investment income (loss) | .00% A | 3.13% | 3.07% | 1.88% | 1.65% | 2.83% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 271 | $ 272 | $ 136 | $ 95 | $ 121 | $ 145 |
Portfolio turnover rate F | 30% A | 42% | 16% | 29% | 17% | 5% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. ITotal distributions of $.61 per share is comprised of distributions from net investment income of $.279 and distributions from net realized gain of $.335 per share. JAmount represents less than .01%. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.18 | $ 14.83 | $ 13.38 | $ 14.61 | $ 13.86 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .51 | .43 | .26 | .22 | .25 |
Net realized and unrealized gain (loss) | .95 | 3.33 | 1.83 | (.89) | 2.14 | 3.87 |
Total from investment operations | .94 | 3.84 | 2.26 | (.63) | 2.36 | 4.12 |
Distributions from net investment income | - | (.27) | (.29) | (.26) | (.28) | (.25) |
Distributions from net realized gain | (.18) | (.21) | (.53) | (.34) | (1.34) | (.01) |
Total distributions | (.18) | (.49) K | (.81) J | (.60) | (1.61) I | (.26) |
Net asset value, end of period | $ 18.94 | $ 18.18 | $ 14.83 | $ 13.38 | $ 14.61 | $ 13.86 |
Total ReturnB, C, D | 5.22% | 25.96% | 17.24% | (4.52)% | 17.23% | 41.19% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .10% A | .10% | .10% | .10% | .10% | .10% A |
Expenses net of fee waivers, if any | .10% A | .10% | .10% | .10% | .10% | .10% A |
Expenses net of all reductions | .10% A | .10% | .10% | .10% | .10% | .10% A |
Net investment income (loss) | (.10)% A | 3.03% | 2.97% | 1.78% | 1.55% | 2.73% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 172 | $ 169 | $ 134 | $ 90 | $ 117 | $ 141 |
Portfolio turnover rate F | 30% A | 42% | 16% | 29% | 17% | 5% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Total distributions of $1.61 per share is comprised of distributions from net investment income of $.276 and distributions from net realized gain of $1.335 per share. J Total distributions of $.81 per share is comprised of distributions from net investment income of $.289 and distributions from net realized gain of $.525 per share. K Total distributions of $.49 per share is comprised of distributions from net investment income of $.271 and distributions from net realized gain of $.214 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.13 | $ 14.81 | $ 13.38 | $ 14.61 | $ 13.85 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | .49 | .41 | .23 | .20 | .24 |
Net realized and unrealized gain (loss) | .94 | 3.31 | 1.83 | (.88) | 2.15 | 3.86 |
Total from investment operations | .92 | 3.80 | 2.24 | (.65) | 2.35 | 4.10 |
Distributions from net investment income | - | (.27) | (.28) | (.25) | (.25) | (.24) |
Distributions from net realized gain | (.18) | (.21) | (.53) | (.34) | (1.34) | (.01) |
Total distributions | (.18) | (.48) | (.81) | (.58) I | (1.59) | (.25) |
Net asset value, end of period | $ 18.87 | $ 18.13 | $ 14.81 | $ 13.38 | $ 14.61 | $ 13.85 |
Total ReturnB, C, D | 5.12% | 25.76% | 17.02% | (4.64)% | 17.15% | 40.96% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .25% A | .25% | .25% | .25% | .25% | .25% A |
Expenses net of fee waivers, if any | .25% A | .25% | .25% | .25% | .25% | .25% A |
Expenses net of all reductions | .25% A | .25% | .25% | .25% | .25% | .25% A |
Net investment income (loss) | (.25)% A | 2.88% | 2.82% | 1.63% | 1.40% | 2.58% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 5,655 | $ 2,493 | $ 486 | $ 143 | $ 126 | $ 141 |
Portfolio turnover rate F | 30% A | 42% | 16% | 29% | 17% | 5% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Total distributions of $.58 per share is comprised of distributions from net investment income of $.245 and distributions from net realized gain of $.335 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2050 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Initial Class | 11.0 | 11.1 |
VIP Equity-Income Portfolio Initial Class | 11.6 | 11.3 |
VIP Growth & Income Portfolio Initial Class | 13.2 | 13.2 |
VIP Growth Portfolio Initial Class | 11.3 | 11.5 |
VIP Mid Cap Portfolio Initial Class | 3.2 | 3.3 |
VIP Value Portfolio Initial Class | 8.5 | 8.5 |
VIP Value Strategies Portfolio Initial Class | 4.2 | 4.2 |
| 63.0 | 63.1 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Initial Class | 5.7 | 5.6 |
VIP Overseas Portfolio Initial Class | 21.3 | 21.4 |
| 27.0 | 27.0 |
Bond Funds | | |
VIP High Income Portfolio Initial Class | 7.0 | 6.9 |
VIP Investment Grade Bond Portfolio Initial Class | 3.0 | 3.0 |
| 10.0 | 9.9 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1% |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 63.0% | |
| International Equity Funds | 27.0% | |
| Bond Funds | 10.0% | |
Six months ago |
| Domestic Equity Funds | 63.1% | |
| International Equity Funds | 27.0% | |
| Bond Funds | 9.9% | |
Semiannual Report
VIP Freedom 2050 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 63.0% |
| Shares | | Value |
VIP Contrafund Portfolio Initial Class (a) | 24,964 | | $ 915,186 |
VIP Equity-Income Portfolio Initial Class (a) | 38,420 | | 961,650 |
VIP Growth & Income Portfolio Initial Class (a) | 53,889 | | 1,097,725 |
VIP Growth Portfolio Initial Class (a) | 15,066 | | 935,929 |
VIP Mid Cap Portfolio Initial Class (a) | 7,076 | | 266,341 |
VIP Value Portfolio Initial Class (a) | 43,748 | | 706,095 |
VIP Value Strategies Portfolio Initial Class (a) | 22,619 | | 345,165 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $4,485,928) |
5,228,091
|
International Equity Funds - 27.0% |
| | | |
VIP Emerging Markets Portfolio Initial Class (a) | 49,559 | | 476,262 |
VIP Overseas Portfolio Initial Class (a) | 86,134 | | 1,763,163 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $2,047,389) |
2,239,425
|
Bond Funds - 10.0% |
| Shares | | Value |
VIP High Income Portfolio Initial Class (a) | 95,371 | | $ 580,807 |
VIP Investment Grade Bond Portfolio Initial Class (a) | 19,341 | | 248,917 |
TOTAL BOND FUNDS (Cost $797,642) |
829,724
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $7,330,959) | | 8,297,240 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (1,191) |
NET ASSETS - 100% | $ 8,296,049 |
Legend |
(a) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value,
end of
period |
VIP Contrafund Portfolio Initial Class | $ 493,030 | $ 412,511 | $ 44,283 | $ - | $ 915,186 |
VIP Emerging Markets Portfolio Initial Class | 249,508 | 226,157 | 30,017 | - | 476,262 |
VIP Equity-Income Portfolio Initial Class | 503,165 | 435,763 | 40,566 | - | 961,650 |
VIP Growth & Income Portfolio Initial Class | 585,000 | 493,931 | 45,929 | - | 1,097,725 |
VIP Growth Portfolio Initial Class | 512,072 | 434,498 | 76,104 | - | 935,929 |
VIP High Income Portfolio Initial Class | 307,724 | 292,528 | 40,602 | - | 580,807 |
VIP Investment Grade Bond Portfolio Initial Class | 133,777 | 229,830 | 122,119 | - | 248,917 |
VIP Mid Cap Portfolio Initial Class | 145,877 | 125,044 | 15,151 | - | 266,341 |
VIP Overseas Portfolio Initial Class | 948,854 | 875,436 | 71,300 | - | 1,763,163 |
VIP Value Portfolio Initial Class | 375,450 | 323,585 | 32,934 | - | 706,095 |
VIP Value Strategies Portfolio Initial Class | 184,653 | 152,310 | 11,793 | - | 345,165 |
Total | $ 4,439,110 | $ 4,001,593 | $ 530,798 | $ - | $ 8,297,240 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2050 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $7,330,959) - See accompanying schedule | | $ 8,297,240 |
Cash | | 1 |
Receivable for investments sold | | 628 |
Receivable for fund shares sold | | 79,635 |
Total assets | | 8,377,504 |
| | |
Liabilities | | |
Payable for investments purchased | $ 78,902 | |
Payable for fund shares redeemed | 1,362 | |
Distribution and service plan fees payable | 1,191 | |
Total liabilities | | 81,455 |
| | |
Net Assets | | $ 8,296,049 |
Net Assets consist of: | | |
Paid in capital | | $ 7,333,745 |
Accumulated net investment loss | | (5,099) |
Accumulated undistributed net realized gain (loss) on investments | | 1,122 |
Net unrealized appreciation (depreciation) on investments | | 966,281 |
Net Assets | | $ 8,296,049 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($1,138,643 ÷ 65,976 shares) | | $ 17.26 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($1,969,094 ÷ 114,262 shares) | | $ 17.23 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($5,188,312 ÷ 301,800 shares) | | $ 17.19 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom 2050 Portfolio
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ - |
| | |
Expenses | | |
Distribution and service plan fees | $ 5,099 | |
Independent trustees' compensation | 11 | |
Total expenses before reductions | 5,110 | |
Expense reductions | (11) | 5,099 |
Net investment income (loss) | | (5,099) |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (1,184) | |
Capital gain distributions from underlying funds | 10,470 | |
Total net realized gain (loss) | | 9,286 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 389,729 |
Net gain (loss) | | 399,015 |
Net increase (decrease) in net assets resulting from operations | | $ 393,916 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ (5,099) | $ 53,200 |
Net realized gain (loss) | 9,286 | 78,122 |
Change in net unrealized appreciation (depreciation) | 389,729 | 408,501 |
Net increase (decrease) in net assets resulting from operations | 393,916 | 539,823 |
Distributions to shareholders from net investment income | - | (53,488) |
Distributions to shareholders from net realized gain | (49,646) | (39,156) |
Total distributions | (49,646) | (92,644) |
Share transactions - net increase (decrease) | 3,513,103 | 2,670,262 |
Total increase (decrease) in net assets | 3,857,373 | 3,117,441 |
| | |
Net Assets | | |
Beginning of period | 4,438,676 | 1,321,235 |
End of period (including accumulated net investment loss of $5,099 and $0, respectively) | $ 8,296,049 | $ 4,438,676 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.55 | $ 13.41 | $ 13.34 | $ 15.82 | $ 14.01 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - | .37 | .47 | .26 | .39 | .26 |
Net realized and unrealized gain (loss) | .87 | 3.16 | 1.72 | (1.03) | 2.06 | 4.01 |
Total from investment operations | .87 | 3.53 | 2.19 | (.77) | 2.45 | 4.27 |
Distributions from net investment income | - | (.22) | (.28) | (.28) | (.28) | (.25) |
Distributions from net realized gain | (.16) | (.18) | (1.84) | (1.43) | (.36) | (.01) |
Total distributions | (.16) | (.39) I | (2.12) | (1.71) | (.64) | (.26) |
Net asset value, end of period | $ 17.26 | $ 16.55 | $ 13.41 | $ 13.34 | $ 15.82 | $ 14.01 |
Total ReturnB, C, D | 5.29% | 26.44% | 17.64% | (4.93)% | 17.58% | 42.70% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .00%A, J | .00% | .00% | .00% | .00% | .00% A |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% A |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% A |
Net investment income (loss) | .00% A | 2.42% | 3.57% | 1.67% | 2.64% | 2.76% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,139 | $ 880 | $ 441 | $ 253 | $ 666 | $ 159 |
Portfolio turnover rate F | 17% A | 59% | 24% | 92% | 50% | 4% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Total distributions of $.39 per share is comprised of distributions from net investment income of $.218 and distributions from net realized gain of $.175 per share. J Amount represents less than .01%. |
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.54 | $ 13.41 | $ 13.34 | $ 15.82 | $ 14.00 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.01) | .35 | .46 | .25 | .37 | .25 |
Net realized and unrealized gain (loss) | .86 | 3.17 | 1.73 | (1.04) | 2.07 | 4.00 |
Total from investment operations | .85 | 3.52 | 2.19 | (.79) | 2.44 | 4.25 |
Distributions from net investment income | - | (.21) | (.27) | (.26) | (.26) | (.24) |
Distributions from net realized gain | (.16) | (.18) | (1.84) | (1.43) | (.36) | (.01) |
Total distributions | (.16) | (.39) | (2.12) I | (1.69) | (.62) | (.25) |
Net asset value, end of period | $ 17.23 | $ 16.54 | $ 13.41 | $ 13.34 | $ 15.82 | $ 14.00 |
Total ReturnB, C, D | 5.17% | 26.32% | 17.59% | (5.06)% | 17.53% | 42.51% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .10% A | .10% | .10% | .10% | .10% | .10% A |
Expenses net of fee waivers, if any | .10% A | .10% | .10% | .10% | .10% | .10% A |
Expenses net of all reductions | .10% A | .10% | .10% | .10% | .10% | .10% A |
Net investment income (loss) | (.10)% A | 2.32% | 3.47% | 1.57% | 2.54% | 2.66% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,969 | $ 1,892 | $ 490 | $ 91 | $ 118 | $ 143 |
Portfolio turnover rate F | 17% A | 59% | 24% | 92% | 50% | 4% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. I Total distributions of $2.12 per share is comprised of distributions from net investment income of $.272 and distributions from net realized gain of $1.843 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 G |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 16.51 | $ 13.39 | $ 13.33 | $ 15.81 | $ 14.00 | $ 10.00 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | (.02) | .33 | .43 | .22 | .35 | .23 |
Net realized and unrealized gain (loss) | .86 | 3.16 | 1.73 | (1.02) | 2.06 | 4.01 |
Total from investment operations | .84 | 3.49 | 2.16 | (.80) | 2.41 | 4.24 |
Distributions from net investment income | - | (.19) | (.26) | (.25) | (.24) | (.23) |
Distributions from net realized gain | (.16) | (.18) | (1.84) | (1.43) | (.36) | (.01) |
Total distributions | (.16) | (.37) | (2.10) | (1.68) | (.60) | (.24) |
Net asset value, end of period | $ 17.19 | $ 16.51 | $ 13.39 | $ 13.33 | $ 15.81 | $ 14.00 |
Total ReturnB, C, D | 5.12% | 26.13% | 17.38% | (5.16)% | 17.30% | 42.37% |
Ratios to Average Net Assets F,H | | | | | | |
Expenses before reductions | .25%A | .25% | .25% | .25% | .25% | .25% A |
Expenses net of fee waivers, if any | .25%A | .25% | .25% | .25% | .25% | .25% A |
Expenses net of all reductions | .25%A | .25% | .25% | .25% | .25% | .25% A |
Net investment income (loss) | (.25)% A | 2.17% | 3.32% | 1.42% | 2.39% | 2.51% A |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 5,188 | $ 1,666 | $ 390 | $ 163 | $ 142 | $ 147 |
Portfolio turnover rate F | 17% A | 59% | 24% | 92% | 50% | 4% A |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. E Calculated based on average shares outstanding during the period. F Amounts do not include the activity of the Underlying Funds. G For the period April 8, 2009 (commencement of operations) to December 31, 2009. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2014 (Unaudited)
1. Organization.
VIP Freedom Income PortfolioSM, VIP Freedom 2005 PortfolioSM, VIP Freedom 2010 PortfolioSM, VIP Freedom 2015 PortfolioSM, VIP Freedom 2020 PortfolioSM, VIP Freedom 2025 PortfolioSM, VIP Freedom 2030 PortfolioSM, VIP Freedom 2035 PortfolioSM, VIP Freedom 2040 PortfolioSM, VIP Freedom 2045 PortfolioSM and VIP Freedom 2050 PortfolioSM (the Funds) are funds of Variable Insurance Products Fund V (the Trust). 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. Each Fund is authorized to issue an unlimited number of shares. The Funds invest primarily in a combination of other VIP equity, bond, and short-term funds (the Underlying Funds) managed by Fidelity Management & Research Company (FMR). Shares of each Fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. Each Fund offers three classes of shares: Initial Class shares, Service Class shares and Service Class 2 shares. All classes have equal rights and voting privileges, except for matters affecting a single class.
2. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Funds:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Each Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value each Fund's investments by major category are as follows. Investments in the Underlying Funds are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Investment Transactions and Income. For financial reporting purposes, the Funds' 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. Income and capital gain distributions from the Underlying Funds, if any, are recorded on the ex-dividend date.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of each Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of each Fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expenses included in the accompanying financial statements reflect the expenses of each Fund and do not include any expenses associated with the Underlying Funds. Although not included in each Fund's expenses, each Fund indirectly bears its proportionate share of the Underlying Funds' expenses through the impact of these expenses on each Underlying Fund's NAV. 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, each Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to the short-term gain distributions from the Underlying Funds, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows for each Fund:
| Tax cost | Gross unrealized
appreciation | Gross unrealized
depreciation | Net unrealized
appreciation
(depreciation) on
securities and
other investments |
VIP Freedom Income | $ 28,362,056 | $ 1,983,924 | $ (115,857) | $ 1,868,067 |
VIP Freedom 2005 | 7,484,784 | 595,779 | (89,589) | 506,190 |
VIP Freedom 2010 | 259,259,411 | 37,819,985 | (2,311,139) | 35,508,846 |
VIP Freedom 2015 | 100,108,572 | 20,120,695 | (1,216,585) | 18,904,110 |
VIP Freedom 2020 | 628,874,293 | 141,786,114 | (6,618,199) | 135,167,915 |
VIP Freedom 2025 | 82,248,552 | 18,347,414 | (714,995) | 17,632,419 |
VIP Freedom 2030 | 212,429,021 | 49,271,194 | (2,013,237) | 47,257,957 |
VIP Freedom 2035 | 10,506,209 | 1,050,429 | (7,450) | 1,042,979 |
VIP Freedom 2040 | 27,620,857 | 4,252,368 | (11,717) | 4,240,651 |
VIP Freedom 2045 | 5,446,132 | 655,977 | (2,615) | 653,362 |
VIP Freedom 2050 | 7,341,547 | 958,093 | (2,400) | 955,693 |
3. Purchases and Redemptions of Underlying Fund Shares.
Purchases and redemptions of the Underlying Fund shares are noted in the table below.
| Purchases ($) | Redemptions ($) |
VIP Freedom Income | 4,414,590 | 4,117,923 |
VIP Freedom 2005 | 953,813 | 625,290 |
VIP Freedom 2010 | 21,826,736 | 19,610,999 |
VIP Freedom 2015 | 11,978,772 | 12,306,957 |
VIP Freedom 2020 | 30,991,539 | 39,802,405 |
VIP Freedom 2025 | 18,429,293 | 15,775,691 |
VIP Freedom 2030 | 26,467,258 | 21,701,349 |
VIP Freedom 2035 | 6,343,317 | 1,079,914 |
VIP Freedom 2040 | 10,758,458 | 2,456,650 |
VIP Freedom 2045 | 3,540,554 | 631,288 |
VIP Freedom 2050 | 4,001,593 | 530,798 |
4. Fees and Other Transactions with Affiliates.
Management Fee. Strategic Advisers, Inc. (the investment adviser), an affiliate of FMR, provides the Funds with investment management related services. The Funds do not pay any fees for these services.
Other Transactions. The investment adviser has entered into an administration agreement with FMR under which FMR provides management and administrative services (other than investment advisory services) necessary for the operation of each Fund. Pursuant to this agreement, FMR pays all expenses of each Fund, excluding distribution and service fees, compensation of the independent Trustees and certain other expenses such as interest expense. FMR also contracts with other Fidelity companies to perform the services necessary for the operation of each Fund. The Funds do not pay any fees for these services.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Funds have adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.
Semiannual Report
4. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan Fees - continued
For the period, total fees, all of which were reallowed to insurance companies for the distribution of shares and providing shareholder support services were as follows:
| Service
Class | Service
Class 2 | Total |
VIP Freedom Income | $ 2,361 | $ 9,760 | $ 12,121 |
VIP Freedom 2005 | 155 | 109 | 264 |
VIP Freedom 2010 | 13,309 | 268,692 | 282,001 |
VIP Freedom 2015 | 5,436 | 78,975 | 84,411 |
VIP Freedom 2020 | 33,222 | 727,450 | 760,672 |
VIP Freedom 2025 | 12,385 | 53,929 | 66,314 |
VIP Freedom 2030 | 23,936 | 163,869 | 187,805 |
VIP Freedom 2035 | 292 | 9,001 | 9,293 |
VIP Freedom 2040 | 4,882 | 5,481 | 10,363 |
VIP Freedom 2045 | 84 | 4,641 | 4,725 |
VIP Freedom 2050 | 941 | 4,158 | 5,099 |
Other. During the period, the following Funds were reimbursed by the investment adviser for certain losses:
| Amounts |
Freedom Income Portfolio | $ 392 |
Freedom 2010 Portfolio | 657 |
Freedom 2015 Portfolio | 1,066 |
Freedom 2020 Portfolio | 7,583 |
Freedom 2025 Portfolio | 1,405 |
Freedom 2030 Portfolio | 8,895 |
Freedom 2040 Portfolio | 3,290 |
Freedom 2045 Portfolio | 1,109 |
Freedom 2050 Portfolio | 1,211 |
5. Expense Reductions.
FMR voluntarily agreed to reimburse funds to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
The following classes of each applicable Fund were in reimbursement during the period:
| Expense
Limitations | Reimbursement |
VIP Freedom Income | | |
Initial Class | -% | $ 32 |
Service Class | .10% | 9 |
Service Class 2 | .25% | 15 |
VIP Freedom 2005 | | |
Initial Class | -% | 13 |
Service Class | .10% | 1 |
Service Class 2 | .25% | - |
VIP Freedom 2010 | | |
Initial Class | -% | 85 |
Service Class | .10% | 51 |
Service Class 2 | .25% | 408 |
VIP Freedom 2015 | | |
Initial Class | -% | 77 |
Service Class | .10% | 21 |
Service Class 2 | .25% | 121 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
5. Expense Reductions - continued
| Expense
Limitations | Reimbursement |
VIP Freedom 2020 | | |
Initial Class | -% | $ 177 |
Service Class | .10% | 127 |
Service Class 2 | .25% | 1,110 |
VIP Freedom 2025 | | |
Initial Class | -% | 48 |
Service Class | .10% | 47 |
Service Class 2 | .25% | 82 |
VIP Freedom 2030 | | |
Initial Class | -% | 122 |
Service Class | .10% | 91 |
Service Class 2 | .25% | 248 |
VIP Freedom 2035 | | |
Initial Class | -% | 1 |
Service Class | .10% | 1 |
Service Class 2 | .25% | 13 |
VIP Freedom 2040 | | |
Initial Class | -% | 21 |
Service Class | .10% | 17 |
Service Class 2 | .25% | 8 |
VIP Freedom 2045 | | |
Initial Class | -% | - |
Service Class | .10% | - |
Service Class 2 | .25% | 7 |
VIP Freedom 2050 | | |
Initial Class | -% | 2 |
Service Class | .10% | 3 |
Service Class 2 | .25% | 6 |
6. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
June 30, 2014 | Year ended
December 31, 2013 |
VIP Freedom Income | | |
From net investment income | | |
Initial Class | $ - | $ 255,596 |
Service Class | - | 65,076 |
Service Class 2 | - | 94,526 |
Total | $ - | $ 415,198 |
From net realized gain | | |
Initial Class | $ 124,939 | $ 131,752 |
Service Class | 32,294 | 28,487 |
Service Class 2 | 56,628 | 67,134 |
Total | $ 213,861 | $ 227,373 |
Semiannual Report
6. Distributions to Shareholders - continued
| Six months ended
June 30, 2014 | Year ended
December 31, 2013 |
VIP Freedom 2005 | | |
From net investment income | | |
Initial Class | $ - | $ 112,762 |
Service Class | - | 1,176 |
Service Class 2 | - | 1,329 |
Total | $ - | $ 115,267 |
From net realized gain | | |
Initial Class | $ 46,598 | $ 23,051 |
Service Class | 2,479 | 407 |
Service Class 2 | 669 | 326 |
Total | $ 49,746 | $ 23,784 |
VIP Freedom 2010 | | |
From net investment income | | |
Initial Class | $ - | $ 728,350 |
Service Class | - | 422,544 |
Service Class 2 | - | 2,957,034 |
Total | $ - | $ 4,107,928 |
From net realized gain | | |
Initial Class | $ 541,106 | $ 394,542 |
Service Class | 322,600 | 302,244 |
Service Class 2 | 2,591,685 | 2,210,785 |
Total | $ 3,455,391 | $ 2,907,571 |
VIP Freedom 2015 | | |
From net investment income | | |
Initial Class | $ - | $ 700,891 |
Service Class | - | 177,530 |
Service Class 2 | - | 925,690 |
Total | $ - | $ 1,804,111 |
From net realized gain | | |
Initial Class | $ 515,924 | $ 570,080 |
Service Class | 133,772 | 129,859 |
Service Class 2 | 808,785 | 918,372 |
Total | $ 1,458,481 | $ 1,618,311 |
VIP Freedom 2020 | | |
From net investment income | | |
Initial Class | $ - | $ 1,550,848 |
Service Class | - | 1,066,976 |
Service Class 2 | - | 8,656,572 |
Total | $ - | $ 11,274,396 |
From net realized gain | | |
Initial Class | $ 1,144,002 | $ 984,904 |
Service Class | 850,008 | 735,382 |
Service Class 2 | 7,473,242 | 7,490,422 |
Total | $ 9,467,252 | $ 9,210,708 |
VIP Freedom 2025 | | |
From net investment income | | |
Initial Class | $ - | $ 419,762 |
Service Class | - | 371,669 |
Service Class 2 | - | 712,359 |
Total | $ - | $ 1,503,790 |
From net realized gain | | |
Initial Class | $ 293,167 | $ 339,026 |
Service Class | 263,045 | 305,689 |
Service Class 2 | 556,843 | 644,681 |
Total | $ 1,113,055 | $ 1,289,396 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Distributions to Shareholders - continued
| Six months ended
June 30, 2014 | Year ended
December 31, 2013 |
VIP Freedom 2030 | | |
From net investment income | | |
Initial Class | $ - | $ 1,021,484 |
Service Class | - | 708,478 |
Service Class 2 | - | 1,830,778 |
Total | $ - | $ 3,560,740 |
From net realized gain | | |
Initial Class | $ 780,683 | $ 716,739 |
Service Class | 588,296 | 552,081 |
Service Class 2 | 1,647,004 | 1,621,814 |
Total | $ 3,015,983 | $ 2,890,634 |
VIP Freedom 2035 | | |
From net investment income | | |
Initial Class | $ - | $ 15,527 |
Service Class | - | 4,181 |
Service Class 2 | - | 60,912 |
Total | $ - | $ 80,620 |
From net realized gain | | |
Initial Class | $ 7,287 | $ 7,160 |
Service Class | 2,503 | 2,358 |
Service Class 2 | 50,529 | 32,371 |
Total | $ 60,319 | $ 41,889 |
VIP Freedom 2040 | | |
From net investment income | | |
Initial Class | $ - | $ 147,607 |
Service Class | - | 128,484 |
Service Class 2 | - | 36,930 |
Total | $ - | $ 313,021 |
From net realized gain | | |
Initial Class | $ 106,430 | $ 83,140 |
Service Class | 86,102 | 82,004 |
Service Class 2 | 32,682 | 21,517 |
Total | $ 225,214 | $ 186,661 |
VIP Freedom 2045 | | |
From net investment income | | |
Initial Class | $ - | $ 4,212 |
Service Class | - | 2,508 |
Service Class 2 | - | 35,791 |
Total | $ - | $ 42,511 |
From net realized gain | | |
Initial Class | $ 2,056 | $ 2,788 |
Service Class | 1,675 | 1,959 |
Service Class 2 | 29,377 | 22,900 |
Total | $ 33,108 | $ 27,647 |
VIP Freedom 2050 | | |
From net investment income | | |
Initial Class | $ - | $ 11,234 |
Service Class | - | 23,546 |
Service Class 2 | - | 18,708 |
Total | $ - | $ 53,488 |
From net realized gain | | |
Initial Class | $ 8,947 | $ 8,296 |
Service Class | 17,577 | 15,999 |
Service Class 2 | 23,122 | 14,861 |
Total | $ 49,646 | $ 39,156 |
Semiannual Report
7. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended June 30, 2014 | Year ended
December 31, 2013 | Six months ended June 30, 2014 | Year ended
December 31, 2013 |
VIP Freedom Income | | | | |
Initial Class | | | | |
Shares sold | 150,163 | 697,498 | $ 1,644,266 | $ 7,508,739 |
Reinvestment of distributions | 11,483 | 35,816 | 124,939 | 387,348 |
Shares redeemed | (185,465) | (515,273) | (2,036,660) | (5,550,243) |
Net increase (decrease) | (23,819) | 218,041 | $ (267,455) | $ 2,345,844 |
Service Class | | | | |
Shares sold | 139,963 | 251,595 | $ 1,530,641 | $ 2,738,723 |
Reinvestment of distributions | 2,969 | 8,639 | 32,294 | 93,563 |
Shares redeemed | (119,197) | (77,622) | (1,301,060) | (837,256) |
Net increase (decrease) | 23,735 | 182,612 | $ 261,875 | $ 1,995,030 |
Service Class 2 | | | | |
Shares sold | 161,165 | 385,422 | $ 1,761,480 | $ 4,123,984 |
Reinvestment of distributions | 5,223 | 15,025 | 56,628 | 161,660 |
Shares redeemed | (120,043) | (325,641) | (1,310,559) | (3,483,171) |
Net increase (decrease) | 46,345 | 74,806 | $ 507,549 | $ 802,473 |
VIP Freedom 2005 | | | | |
Initial Class | | | | |
Shares sold | 45,504 | 165,892 | $ 519,900 | $ 1,831,685 |
Reinvestment of distributions | 4,102 | 11,966 | 46,598 | 135,813 |
Shares redeemed | (29,783) | (114,913) | (339,312) | (1,264,764) |
Net increase (decrease) | 19,823 | 62,945 | $ 227,186 | $ 702,734 |
Service Class | | | | |
Shares sold | 25,216 | 117,100 | $ 286,652 | $ 1,267,819 |
Reinvestment of distributions | 216 | 139 | 2,479 | 1,583 |
Shares redeemed | (10,080) | (123,064) | (115,430) | (1,382,013) |
Net increase (decrease) | 15,352 | (5,825) | $ 173,701 | $ (112,611) |
Service Class 2 | | | | |
Shares sold | 516 | 6,220 | $ 5,894 | $ 67,155 |
Reinvestment of distributions | 59 | 146 | 669 | 1,655 |
Shares redeemed | (3,226) | (21,164) | (36,720) | (226,414) |
Net increase (decrease) | (2,651) | (14,798) | $ (30,157) | $ (157,604) |
VIP Freedom 2010 | | | | |
Initial Class | | | | |
Shares sold | 474,258 | 1,986,285 | $ 5,828,635 | $ 23,305,406 |
Reinvestment of distributions | 44,352 | 92,885 | 541,106 | 1,122,892 |
Shares redeemed | (541,813) | (924,715) | (6,679,621) | (10,962,841) |
Net increase (decrease) | (23,203) | 1,154,455 | $ (309,880) | $ 13,465,457 |
Service Class | | | | |
Shares sold | 191,078 | 699,448 | $ 2,348,588 | $ 8,320,948 |
Reinvestment of distributions | 26,464 | 60,386 | 322,600 | 724,788 |
Shares redeemed | (302,115) | (695,038) | (3,711,732) | (8,178,280) |
Net increase (decrease) | (84,573) | 64,796 | $ (1,040,544) | $ 867,456 |
Service Class 2 | | | | |
Shares sold | 1,090,236 | 2,966,063 | $ 13,337,754 | $ 34,666,277 |
Reinvestment of distributions | 213,483 | 432,321 | 2,591,685 | 5,167,819 |
Shares redeemed | (729,668) | (1,376,502) | (8,971,239) | (16,195,075) |
Net increase (decrease) | 574,051 | 2,021,882 | $ 6,958,200 | $ 23,639,021 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Share Transactions - continued
| Shares | Dollars |
| Six months ended June 30, 2014 | Year ended
December 31, 2013 | Six months ended June 30, 2014 | Year ended
December 31, 2013 |
VIP Freedom 2015 | | | | |
Initial Class | | | | |
Shares sold | 212,995 | 568,689 | $ 2,637,516 | $ 6,775,424 |
Reinvestment of distributions | 41,911 | 105,400 | 515,924 | 1,270,971 |
Shares redeemed | (402,453) | (618,401) | (5,004,402) | (7,345,257) |
Net increase (decrease) | (147,547) | 55,688 | $ (1,850,962) | $ 701,138 |
Service Class | | | | |
Shares sold | 235,933 | 452,049 | $ 2,964,320 | $ 5,363,465 |
Reinvestment of distributions | 10,885 | 25,438 | 133,772 | 307,389 |
Shares redeemed | (142,868) | (199,353) | (1,778,251) | (2,365,023) |
Net increase (decrease) | 103,950 | 278,134 | $ 1,319,841 | $ 3,305,831 |
Service Class 2 | | | | |
Shares sold | 651,146 | 970,192 | $ 8,072,376 | $ 11,406,266 |
Reinvestment of distributions | 66,023 | 154,189 | 808,785 | 1,844,062 |
Shares redeemed | (589,795) | (1,485,035) | (7,292,647) | (17,526,430) |
Net increase (decrease) | 127,374 | (360,654) | $ 1,588,514 | $ (4,276,102) |
VIP Freedom 2020 | | | | |
Initial Class | | | | |
Shares sold | 1,149,720 | 3,463,224 | $ 14,530,565 | $ 40,977,645 |
Reinvestment of distributions | 91,666 | 205,810 | 1,144,002 | 2,535,752 |
Shares redeemed | (841,222) | (1,609,325) | (10,565,310) | (19,417,224) |
Net increase (decrease) | 400,164 | 2,059,709 | $ 5,109,257 | $ 24,096,173 |
Service Class | | | | |
Shares sold | 631,860 | 1,831,801 | $ 7,968,302 | $ 22,308,623 |
Reinvestment of distributions | 68,218 | 146,856 | 850,008 | 1,802,358 |
Shares redeemed | (709,504) | (834,633) | (8,952,551) | (10,018,305) |
Net increase (decrease) | (9,426) | 1,144,024 | $ (134,241) | $ 14,092,676 |
Service Class 2 | | | | |
Shares sold | 1,227,303 | 2,691,292 | $ 15,388,527 | $ 31,848,028 |
Reinvestment of distributions | 602,195 | 1,327,096 | 7,473,242 | 16,146,994 |
Shares redeemed | (2,197,105) | (4,169,480) | (27,533,880) | (49,822,706) |
Net increase (decrease) | (367,607) | (151,092) | $ (4,672,111) | $ (1,827,684) |
VIP Freedom 2025 | | | | |
Initial Class | | | | |
Shares sold | 217,903 | 533,264 | $ 2,840,029 | $ 6,515,651 |
Reinvestment of distributions | 22,797 | 60,269 | 293,167 | 758,788 |
Shares redeemed | (139,889) | (292,668) | (1,824,525) | (3,548,920) |
Net increase (decrease) | 100,811 | 300,865 | $ 1,308,671 | $ 3,725,519 |
Service Class | | | | |
Shares sold | 549,174 | 690,373 | $ 7,151,434 | $ 8,333,071 |
Reinvestment of distributions | 20,502 | 53,856 | 263,045 | 677,358 |
Shares redeemed | (167,296) | (545,603) | (2,190,111) | (6,597,340) |
Net increase (decrease) | 402,380 | 198,626 | $ 5,224,368 | $ 2,413,089 |
Service Class 2 | | | | |
Shares sold | 658,528 | 1,520,235 | $ 8,497,320 | $ 18,315,316 |
Reinvestment of distributions | 43,571 | 108,504 | 556,843 | 1,357,040 |
Shares redeemed | (927,193) | (1,004,998) | (11,917,914) | (12,141,138) |
Net increase (decrease) | (225,094) | 623,741 | $ (2,863,751) | $ 7,531,218 |
Semiannual Report
7. Share Transactions - continued
| Shares | Dollars |
| Six months ended June 30, 2014 | Year ended
December 31, 2013 | Six months ended June 30, 2014 | Year ended
December 31, 2013 |
VIP Freedom 2030 | | | | |
Initial Class | | | | |
Shares sold | 779,510 | 2,155,912 | $ 10,077,316 | $ 25,300,188 |
Reinvestment of distributions | 61,665 | 139,570 | 780,683 | 1,738,223 |
Shares redeemed | (534,523) | (893,298) | (6,806,003) | (10,673,085) |
Net increase (decrease) | 306,652 | 1,402,184 | $ 4,051,996 | $ 16,365,326 |
Service Class | | | | |
Shares sold | 400,770 | 1,172,540 | $ 5,105,455 | $ 14,126,268 |
Reinvestment of distributions | 46,542 | 101,713 | 588,296 | 1,260,559 |
Shares redeemed | (326,989) | (591,435) | (4,172,450) | (6,983,113) |
Net increase (decrease) | 120,323 | 682,818 | $ 1,521,301 | $ 8,403,714 |
Service Class 2 | | | | |
Shares sold | 1,065,325 | 2,956,366 | $ 13,641,107 | $ 34,718,018 |
Reinvestment of distributions | 130,715 | 280,405 | 1,647,004 | 3,452,592 |
Shares redeemed | (1,049,594) | (1,630,902) | (13,375,737) | (19,428,221) |
Net increase (decrease) | 146,446 | 1,605,869 | $ 1,912,374 | $ 18,742,389 |
VIP Freedom 2035 | | | | |
Initial Class | | | | |
Shares sold | 15,012 | 47,066 | $ 287,370 | $ 891,578 |
Reinvestment of distributions | 384 | 1,196 | 7,287 | 22,687 |
Shares redeemed | (42,126) | (1,381) | (813,184) | (25,376) |
Net increase (decrease) | (26,730) | 46,881 | $ (518,527) | $ 888,889 |
Service Class | | | | |
Shares sold | 36,143 | 8,593 | $ 681,807 | $ 160,540 |
Reinvestment of distributions | 132 | 348 | 2,503 | 6,539 |
Shares redeemed | (2,115) | (491) | (40,676) | (9,338) |
Net increase (decrease) | 34,160 | 8,450 | $ 643,634 | $ 157,741 |
Service Class 2 | | | | |
Shares sold | 306,948 | 199,956 | $ 5,873,230 | $ 3,604,089 |
Reinvestment of distributions | 2,675 | 4,955 | 50,529 | 93,283 |
Shares redeemed | (38,855) | (24,585) | (731,009) | (425,031) |
Net increase (decrease) | 270,768 | 180,326 | $ 5,192,750 | $ 3,272,341 |
VIP Freedom 2040 | | | | |
Initial Class | | | | |
Shares sold | 243,364 | 435,007 | $ 4,507,634 | $ 7,354,319 |
Reinvestment of distributions | 5,867 | 12,798 | 106,430 | 230,747 |
Shares redeemed | (58,467) | (112,620) | (1,064,450) | (1,962,464) |
Net increase (decrease) | 190,764 | 335,185 | $ 3,549,614 | $ 5,622,602 |
Service Class | | | | |
Shares sold | 159,522 | 294,776 | $ 2,936,672 | $ 5,055,998 |
Reinvestment of distributions | 4,752 | 11,747 | 86,102 | 210,488 |
Shares redeemed | (55,517) | (117,657) | (1,012,629) | (1,988,868) |
Net increase (decrease) | 108,757 | 188,866 | $ 2,010,145 | $ 3,277,618 |
Service Class 2 | | | | |
Shares sold | 184,118 | 136,223 | $ 3,351,813 | $ 2,328,951 |
Reinvestment of distributions | 1,808 | 3,242 | 32,682 | 58,447 |
Shares redeemed | (25,324) | (24,335) | (457,149) | (407,521) |
Net increase (decrease) | 160,602 | 115,130 | $ 2,927,346 | $ 1,979,877 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Share Transactions - continued
| Shares | Dollars |
| Six months ended June 30, 2014 | Year ended
December 31, 2013 | Six months ended June 30, 2014 | Year ended
December 31, 2013 |
VIP Freedom 2045 | | | | |
Initial Class | | | | |
Shares sold | 8,574 | 6,906 | $ 156,107 | $ 122,766 |
Reinvestment of distributions | 114 | 392 | 2,056 | 7,000 |
Shares redeemed | (9,294) | (1,526) | (165,952) | (26,776) |
Net increase (decrease) | (606) | 5,772 | $ (7,789) | $ 102,990 |
Service Class | | | | |
Shares sold | 520 | 3,786 | $ 9,475 | $ 63,342 |
Reinvestment of distributions | 93 | 252 | 1,675 | 4,467 |
Shares redeemed | (852) | (3,755) | (15,277) | (64,325) |
Net increase (decrease) | (239) | 283 | $ (4,127) | $ 3,484 |
Service Class 2 | | | | |
Shares sold | 192,055 | 128,955 | $ 3,489,129 | $ 2,192,890 |
Reinvestment of distributions | 1,639 | 3,277 | 29,377 | 58,691 |
Shares redeemed | (31,540) | (27,505) | (568,111) | (457,919) |
Net increase (decrease) | 162,154 | 104,727 | $ 2,950,395 | $ 1,793,662 |
VIP Freedom 2050 | | | | |
Initial Class | | | | |
Shares sold | 21,808 | 31,847 | $ 361,490 | $ 481,158 |
Reinvestment of distributions | 547 | 1,205 | 8,947 | 19,530 |
Shares redeemed | (9,537) | (12,779) | (158,884) | (195,189) |
Net increase (decrease) | 12,818 | 20,273 | $ 211,553 | $ 305,499 |
Service Class | | | | |
Shares sold | 14,053 | 130,257 | $ 232,296 | $ 2,105,119 |
Reinvestment of distributions | 1,075 | 2,422 | 17,577 | 39,545 |
Shares redeemed | (15,285) | (54,776) | (250,029) | (856,642) |
Net increase (decrease) | (157) | 77,903 | $ (156) | $ 1,288,022 |
Service Class 2 | | | | |
Shares sold | 208,392 | 85,642 | $ 3,430,853 | $ 1,291,392 |
Reinvestment of distributions | 1,417 | 2,070 | 23,122 | 33,569 |
Shares redeemed | (8,947) | (15,920) | (152,269) | (248,220) |
Net increase (decrease) | 200,862 | 71,792 | $ 3,301,706 | $ 1,076,741 |
8. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
The Funds do not invest in the Underlying Funds for the purpose of exercising management or control; however, investments by the Funds within their principal investment strategies may represent a significant portion of the Underlying Fund's net assets. At the end of the period, the following VIP Freedom Portfolios were the owners of record of 10% or more of the total outstanding shares of the Underlying Funds.
Fund | VIP Freedom 2020 |
VIP Emerging Markets Portfolio | 20% |
VIP Value Portfolio | 16% |
The Funds, in aggregate, were the owners of record of more than 20% of the total outstanding shares of the following Underlying Funds.
Fund | % of shares held |
VIP Emerging Markets Portfolio | 45% |
VIP Value Portfolio | 36% |
Semiannual Report
8. Other - continued
In addition, at the end of the period, the investment adviser or its affiliates and certain otherwise unaffiliated shareholders each were owners of record of more than 10% of the outstanding shares of the following funds:
| Affiliated % | Number of
Unaffiliated
Shareholders | Unaffiliated
Shareholders % |
VIP Freedom Income | 53 | 1 | 13 |
VIP Freedom 2005 | 94 | - | - |
VIP Freedom 2010 | - | 1 | 77 |
VIP Freedom 2015 | 29 | 2 | 31 |
VIP Freedom 2020 | - | 1 | 73 |
VIP Freedom 2025 | 19 | 3 | 60 |
VIP Freedom 2030 | - | 3 | 69 |
VIP Freedom 2035 | - | 2 | 77 |
VIP Freedom 2040 | - | 3 | 83 |
VIP Freedom 2045 | - | 2 | 89 |
VIP Freedom 2050 | - | 3 | 85 |
Semiannual Report
Investment Adviser
Strategic Advisers, Inc.
Boston, MA
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Bank of New York Mellon
New York, NY
VIPFF2K-SANN-0814
1.819548.110
Fidelity® Variable Insurance Products:
Freedom Lifetime Income Funds -
Portfolios I, II, & III
Semiannual Report
June 30, 2014
(Fidelity Cover Art)
Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
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. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the funds nor Fidelity Distributors Corporation is a bank.
Semiannual Report
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 (January 1, 2014 to June 30, 2014).
Actual Expenses
The first line of the accompanying table for each 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 fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, each Fund, as a shareholder in underlying Fidelity Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Funds. These fees and expenses are not included in each Fund's annualized expense ratio used to calculate the expense estimates in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each fund provides information about hypothetical account values and hypothetical expenses based on a 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, each Fund, as a shareholder in underlying Fidelity Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Funds. These fees and expenses are not included in each Fund's annualized expense ratio used to calculate the expense estimates 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.
| Annualized
Expense Ratio B | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
VIP Freedom Lifetime Income I | .00% | | | |
Actual | | $ 1,000.00 | $ 1,039.80 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
VIP Freedom Lifetime Income II | .00% | | | |
Actual | | $ 1,000.00 | $ 1,043.70 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
VIP Freedom Lifetime Income III | .00% | | | |
Actual | | $ 1,000.00 | $ 1,050.30 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Funds in which each Fund invests are not included in each Fund's annualized expense ratio.
Semiannual Report
VIP Freedom Lifetime Income I Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 4.1 | 4.7 |
VIP Equity-Income Portfolio Investor Class | 4.3 | 4.7 |
VIP Growth & Income Portfolio Investor Class | 4.9 | 5.5 |
VIP Growth Portfolio Investor Class | 4.2 | 4.8 |
VIP Mid Cap Portfolio Investor Class | 1.3 | 1.4 |
VIP Value Portfolio Investor Class | 3.2 | 3.5 |
VIP Value Strategies Portfolio Investor Class | 1.6 | 1.8 |
| 23.6 | 26.4 |
Developed International Equity Funds | | |
VIP Overseas Portfolio Investor Class R | 6.8 | 7.5 |
Emerging Markets Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 1.8 | 1.9 |
High Yield Bond Funds | | |
VIP High Income Portfolio Investor Class | 5.0 | 5.0 |
Investment Grade Bond Funds | | |
VIP Investment Grade Bond Portfolio Investor Class | 47.9 | 44.4 |
Short-Term Funds | | |
VIP Money Market Portfolio Investor Class | 14.9 | 14.8 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%. |
Asset Allocation (% of fund's net assets) |
Period end |
 | Domestic Equity Funds | 23.6% | |
 | Developed International Equity Funds | 6.8% | |
 | Emerging Markets Equity Funds | 1.8% | |
 | High Yield Bond Funds | 5.0% | |
 | Investment Grade Bond Funds | 47.9% | |
 | Short-Term Funds | 14.9% | |
Six months ago |
| Domestic Equity Funds | 26.4% | |
| Developed International Equity Funds | 7.5% | |
| Emerging Markets Equity Funds | 1.9% | |
| High Yield Bond Funds | 5.0% | |
| Investment Grade Bond Funds | 44.4% | |
| Short-Term Funds | 14.8% | |
Expected |
| Domestic Equity Funds | 21.3% | |
| Developed International Equity Funds | 6.2% | |
| Emerging Markets Equity Funds | 1.6% | |
| High Yield Bond Funds | 5.0% | |
| Investment Grade Bond Funds | 50.9% | |
| Short-Term Funds | 15.0% | |
The fund invests according to an asset allocation strategy that becomes increasingly conservative over time. The six months ago allocation is based on the fund's holdings as of December 31, 2013. The period end allocation is based on the fund's holdings as of June 30, 2014. The expected allocation represents the fund's anticipated allocation at December 31, 2014. |
Semiannual Report
VIP Freedom Lifetime Income I Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 23.6% |
| Shares | | Value |
Domestic Equity Funds - 23.6% |
VIP Contrafund Portfolio Investor Class (b) | 15,037 | | $ 548,833 |
VIP Equity-Income Portfolio Investor Class (b) | 23,130 | | 576,869 |
VIP Growth & Income Portfolio Investor Class (b) | 32,274 | | 655,156 |
VIP Growth Portfolio Investor Class (b) | 9,091 | | 563,010 |
VIP Mid Cap Portfolio Investor Class (b) | 4,419 | | 165,613 |
VIP Value Portfolio Investor Class (b) | 26,480 | | 426,589 |
VIP Value Strategies Portfolio Investor Class (b) | 14,110 | | 214,193 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $2,462,384) |
3,150,263
|
International Equity Funds - 8.6% |
| | | |
Developed International Equity Funds - 6.8% |
VIP Overseas Portfolio Investor Class R (b) | 44,358 | | 904,911 |
Emerging Markets Equity Funds - 1.8% |
VIP Emerging Markets Portfolio Investor Class R (b) | 24,783 | | 237,172 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $1,120,200) |
1,142,083
|
Bond Funds - 52.9% |
| Shares | | Value |
High Yield Bond Funds - 5.0% |
VIP High Income Portfolio Investor Class (b) | 110,479 | | $ 669,501 |
Investment Grade Bond Funds - 47.9% |
VIP Investment Grade Bond Portfolio Investor Class (b) | 497,883 | | 6,387,843 |
TOTAL BOND FUNDS (Cost $7,013,845) |
7,057,344
|
Short-Term Funds - 14.9% |
| | | |
VIP Money Market Portfolio Investor Class 0.01% (a)(b)
(Cost $1,983,086) | 1,983,086 | |
1,983,086
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $12,579,515) | | 13,332,776 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (1) |
NET ASSETS - 100% | $ 13,332,775 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 603,956 | $ 24,146 | $ 115,214 | $ - | $ 548,833 |
VIP Emerging Markets Portfolio Investor Class R | 251,964 | 10,162 | 40,120 | - | 237,172 |
VIP Equity-Income Portfolio Investor Class | 611,387 | 27,515 | 104,383 | - | 576,869 |
VIP Growth & Income Portfolio Investor Class | 710,091 | 29,118 | 125,136 | - | 655,156 |
VIP Growth Portfolio Investor Class | 625,868 | 24,965 | 136,668 | - | 563,010 |
VIP High Income Portfolio Investor Class | 645,915 | 28,594 | 35,932 | - | 669,501 |
VIP Investment Grade Bond Portfolio Investor Class | 5,775,152 | 621,570 | 255,157 | - | 6,387,843 |
VIP Mid Cap Portfolio Investor Class | 184,619 | 9,705 | 34,455 | - | 165,613 |
VIP Money Market Portfolio Investor Class | 1,922,420 | 138,103 | 77,437 | 95 | 1,983,086 |
VIP Overseas Portfolio Investor Class R | 971,422 | 40,305 | 97,498 | - | 904,911 |
VIP Value Portfolio Investor Class | 458,793 | 23,877 | 82,168 | - | 426,589 |
VIP Value Strategies Portfolio Investor Class | 229,838 | 9,084 | 37,400 | - | 214,193 |
Total | $ 12,991,425 | $ 987,144 | $ 1,141,568 | $ 95 | $ 13,332,776 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom Lifetime Income I Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $12,579,515) - See accompanying schedule | | $ 13,332,776 |
Receivable for investments sold | | 658 |
Total assets | | 13,333,434 |
| | |
Liabilities | | |
Payable for fund shares redeemed | | 659 |
| | |
Net Assets | | $ 13,332,775 |
Net Assets consist of: | | |
Paid in capital | | $ 12,562,666 |
Undistributed net investment income | | 95 |
Accumulated undistributed net realized gain (loss) on investments | | 16,753 |
Net unrealized appreciation (depreciation) on investments | | 753,261 |
Net Assets, for 1,194,700 shares outstanding | | $ 13,332,775 |
Net Asset Value, offering price and redemption price per share ($13,332,775 ÷ 1,194,700 shares) | | $ 11.16 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 95 |
| | |
Expenses | | |
Independent trustees' compensation | $ 25 | |
Total expenses before reductions | 25 | |
Expense reductions | (25) | 0 |
Net investment income (loss) | | 95 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | 47,783 | |
Capital gain distributions from underlying funds | 12,334 | |
Total net realized gain (loss) | | 60,117 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 447,990 |
Net gain (loss) | | 508,107 |
Net increase (decrease) in net assets resulting from operations | | $ 508,202 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 95 | $ 228,756 |
Net realized gain (loss) | 60,117 | 324,846 |
Change in net unrealized appreciation (depreciation) | 447,990 | 636,670 |
Net increase (decrease) in net assets resulting from operations | 508,202 | 1,190,272 |
Distributions to shareholders from net investment income | - | (230,800) |
Distributions to shareholders from net realized gain | (252,779) | (149,260) |
Total distributions | (252,779) | (380,060) |
Share transactions
Proceeds from sales of shares | 571,954 | 1,418,782 |
Reinvestment of distributions | 252,779 | 380,060 |
Cost of shares redeemed | (738,807) | (1,654,250) |
Net increase (decrease) in net assets resulting from share transactions | 85,926 | 144,592 |
Total increase (decrease) in net assets | 341,349 | 954,804 |
| | |
Net Assets | | |
Beginning of period | 12,991,426 | 12,036,622 |
End of period (including undistributed net investment income of $95 and $0, respectively) | $ 13,332,775 | $ 12,991,426 |
Other Information Shares | | |
Sold | 52,592 | 132,500 |
Issued in reinvestment of distributions | 23,384 | 35,198 |
Redeemed | (67,401) | (154,296) |
Net increase (decrease) | 8,575 | 13,402 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 10.95 | $ 10.26 | $ 9.65 | $ 9.88 | $ 9.13 | $ 7.81 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - I | .19 | .20 | .22 | .21 | .36 |
Net realized and unrealized gain (loss) | .43 | .83 | .80 | (.17) | .87 | 1.40 |
Total from investment operations | .43 | 1.02 | 1.00 | .05 | 1.08 | 1.76 |
Distributions from net investment income | - | (.20) | (.20) | (.21) | (.22) | (.36) |
Distributions from net realized gain | (.22) | (.13) | (.19) | (.06) | (.11) | (.08) |
Total distributions | (.22) | (.33) | (.39) | (.28) J | (.33) | (.44) |
Net asset value, end of period | $ 11.16 | $ 10.95 | $ 10.26 | $ 9.65 | $ 9.88 | $ 9.13 |
Total Return B, C, D | 3.98% | 9.96% | 10.42% | .48% | 11.84% | 22.76% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions G | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A, G | 1.81% | 1.97% | 2.25% | 2.26% | 4.28% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 13,333 | $ 12,991 | $ 12,037 | $ 10,747 | $ 10,345 | $ 8,773 |
Portfolio turnover rate F | 15% A | 22% | 19% | 17% | 26% | 20% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
I Amount represents less than $.01 per share.
J Total distributions of $.28 per share is comprised of distributions from net investment income of $.214 and distributions from net realized gain of $.064 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom Lifetime Income II Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 5.8 | 6.1 |
VIP Equity-Income Portfolio Investor Class | 6.1 | 6.1 |
VIP Growth & Income Portfolio Investor Class | 7.0 | 7.2 |
VIP Growth Portfolio Investor Class | 5.9 | 6.4 |
VIP Mid Cap Portfolio Investor Class | 1.7 | 1.8 |
VIP Value Portfolio Investor Class | 4.5 | 4.6 |
VIP Value Strategies Portfolio Investor Class | 2.2 | 2.3 |
| 33.2 | 34.5 |
Developed International Equity Funds | | |
VIP Overseas Portfolio Investor Class R | 9.6 | 9.9 |
Emerging Markets Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 2.5 | 2.5 |
High Yield Bond Funds | | |
VIP High Income Portfolio Investor Class | 5.0 | 5.0 |
Investment Grade Bond Funds | | |
VIP Investment Grade Bond Portfolio Investor Class | 39.8 | 38.5 |
Short-Term Funds | | |
VIP Money Market Portfolio Investor Class | 9.9 | 9.6 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%. |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 33.2% | |
| Developed International Equity Funds | 9.6% | |
| Emerging Markets Equity Funds | 2.5% | |
| High Yield Bond Funds | 5.0% | |
| Investment Grade Bond Funds | 39.8% | |
| Short-Term Funds | 9.9% | |
Six months ago |
| Domestic Equity Funds | 34.5% | |
| Developed International Equity Funds | 9.9% | |
| Emerging Markets Equity Funds | 2.5% | |
| High Yield Bond Funds | 5.0% | |
| Investment Grade Bond Funds | 38.5% | |
| Short-Term Funds | 9.6% | |
Expected |
| Domestic Equity Funds | 33.1% | |
| Developed International Equity Funds | 9.6% | |
| Emerging Markets Equity Funds | 2.5% | |
| High Yield Bond Funds | 5.0% | |
| Investment Grade Bond Funds | 39.8% | |
| Short-Term Funds | 10.0% | |
The fund invests according to an asset allocation strategy that becomes increasingly conservative over time. The six months ago allocation is based on the fund's holdings as of December 31, 2013. The period end allocation is based on the fund's holdings as of June 30, 2014. The expected allocation represents the fund's anticipated allocation at December 31, 2014. |
Semiannual Report
VIP Freedom Lifetime Income II Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 33.2% |
| Shares | | Value |
Domestic Equity Funds - 33.2% |
VIP Contrafund Portfolio Investor Class (b) | 40,664 | | $ 1,484,243 |
VIP Equity-Income Portfolio Investor Class (b) | 62,553 | | 1,560,064 |
VIP Growth & Income Portfolio Investor Class (b) | 87,716 | | 1,780,628 |
VIP Growth Portfolio Investor Class (b) | 24,534 | | 1,519,370 |
VIP Mid Cap Portfolio Investor Class (b) | 11,665 | | 437,198 |
VIP Value Portfolio Investor Class (b) | 71,036 | | 1,144,392 |
VIP Value Strategies Portfolio Investor Class (b) | 36,878 | | 559,809 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $6,799,920) |
8,485,704
|
International Equity Funds - 12.1% |
| | | |
Developed International Equity Funds - 9.6% |
VIP Overseas Portfolio Investor Class R (b) | 121,032 | | 2,469,063 |
Emerging Markets Equity Funds - 2.5% |
VIP Emerging Markets Portfolio Investor Class R (b) | 65,733 | | 629,063 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $3,054,412) |
3,098,126
|
Bond Funds - 44.8% |
| Shares | | Value |
High Yield Bond Funds - 5.0% |
VIP High Income Portfolio Investor Class (b) | 211,068 | | $ 1,279,070 |
Investment Grade Bond Funds - 39.8% |
VIP Investment Grade Bond Portfolio Investor Class (b) | 793,590 | | 10,181,755 |
TOTAL BOND FUNDS (Cost $11,355,514) |
11,460,825
|
Short-Term Funds - 9.9% |
| | | |
VIP Money Market Portfolio Investor Class 0.01% (a)(b)
(Cost $2,523,129) | 2,523,129 | |
2,523,129
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $23,732,975) | | 25,567,784 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | 1 |
NET ASSETS - 100% | $ 25,567,785 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 1,403,825 | $ 132,519 | $ 146,315 | $ - | $ 1,484,243 |
VIP Emerging Markets Portfolio Investor Class R | 572,025 | 51,625 | 34,514 | - | 629,063 |
VIP Equity-Income Portfolio Investor Class | 1,414,953 | 142,408 | 106,268 | - | 1,560,064 |
VIP Growth & Income Portfolio Investor Class | 1,654,034 | 157,926 | 138,724 | - | 1,780,628 |
VIP Growth Portfolio Investor Class | 1,469,901 | 164,975 | 242,718 | - | 1,519,370 |
VIP High Income Portfolio Investor Class | 1,147,848 | 144,158 | 69,788 | - | 1,279,070 |
VIP Investment Grade Bond Portfolio Investor Class | 8,895,556 | 1,534,386 | 630,603 | - | 10,181,755 |
VIP Mid Cap Portfolio Investor Class | 426,151 | 47,663 | 52,288 | - | 437,198 |
VIP Money Market Portfolio Investor Class | 2,201,020 | 445,595 | 123,486 | 114 | 2,523,129 |
VIP Overseas Portfolio Investor Class R | 2,290,233 | 324,356 | 129,205 | - | 2,469,063 |
VIP Value Portfolio Investor Class | 1,064,594 | 104,799 | 92,873 | - | 1,144,392 |
VIP Value Strategies Portfolio Investor Class | 530,701 | 39,288 | 42,936 | - | 559,809 |
Total | $ 23,070,841 | $ 3,289,698 | $ 1,809,718 | $ 114 | $ 25,567,784 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom Lifetime Income II Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $23,732,975) - See accompanying schedule | | $ 25,567,784 |
Cash | | 2 |
Receivable for investments sold | | 1,262 |
Total assets | | 25,569,048 |
| | |
Liabilities | | |
Payable for fund shares redeemed | | 1,263 |
| | |
Net Assets | | $ 25,567,785 |
Net Assets consist of: | | |
Paid in capital | | $ 23,961,605 |
Undistributed net investment income | | 114 |
Accumulated undistributed net realized gain (loss) on investments | | (228,743) |
Net unrealized appreciation (depreciation) on investments | | 1,834,809 |
Net Assets, for 2,142,539 shares outstanding | | $ 25,567,785 |
Net Asset Value, offering price and redemption price per share ($25,567,785 ÷ 2,142,539 shares) | | $ 11.93 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 114 |
| | |
Expenses | | |
Independent trustees' compensation | $ 45 | |
Total expenses before reductions | 45 | |
Expense reductions | (45) | 0 |
Net investment income (loss) | | 114 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (13,375) | |
Capital gain distributions from underlying funds | 28,989 | |
Total net realized gain (loss) | | 15,614 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 1,030,338 |
Net gain (loss) | | 1,045,952 |
Net increase (decrease) in net assets resulting from operations | | $ 1,046,066 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 114 | $ 401,864 |
Net realized gain (loss) | 15,614 | 498,350 |
Change in net unrealized appreciation (depreciation) | 1,030,338 | 1,700,609 |
Net increase (decrease) in net assets resulting from operations | 1,046,066 | 2,600,823 |
Distributions to shareholders from net investment income | - | (405,910) |
Distributions to shareholders from net realized gain | - | (88,661) |
Total distributions | - | (494,571) |
Share transactions
Proceeds from sales of shares | 2,889,304 | 2,232,231 |
Reinvestment of distributions | - | 494,571 |
Cost of shares redeemed | (1,438,427) | (1,483,988) |
Net increase (decrease) in net assets resulting from share transactions | 1,450,877 | 1,242,814 |
Total increase (decrease) in net assets | 2,496,943 | 3,349,066 |
| | |
Net Assets | | |
Beginning of period | 23,070,842 | 19,721,776 |
End of period (including undistributed net investment income of $114 and $0, respectively) | $ 25,567,785 | $ 23,070,842 |
Other Information Shares | | |
Sold | 248,922 | 205,615 |
Issued in reinvestment of distributions | - | 43,409 |
Redeemed | (124,425) | (134,692) |
Net increase (decrease) | 124,497 | 114,332 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.43 | $ 10.36 | $ 9.55 | $ 9.79 | $ 8.90 | $ 7.42 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - I | .20 | .21 | .23 | .21 | .34 |
Net realized and unrealized gain (loss) | .50 | 1.12 | .90 | (.21) | .95 | 1.59 |
Total from investment operations | .50 | 1.32 | 1.11 | .02 | 1.16 | 1.93 |
Distributions from net investment income | - | (.21) | (.21) | (.22) | (.22) | (.36) |
Distributions from net realized gain | - | (.05) | (.09) | (.04) | (.05) | (.09) |
Total distributions | - | (.25) J | (.30) | (.26) | (.27) | (.45) |
Net asset value, end of period | $ 11.93 | $ 11.43 | $ 10.36 | $ 9.55 | $ 9.79 | $ 8.90 |
Total Return B, C, D | 4.37% | 12.76% | 11.60% | .25% | 12.99% | 26.44% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions G | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A, G | 1.86% | 2.06% | 2.33% | 2.22% | 4.25% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 25,568 | $ 23,071 | $ 19,722 | $ 16,594 | $ 14,637 | $ 14,172 |
Portfolio turnover rate F | 15% A | 13% | 25% | 12% | 23% | 21% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
I Amount represents less than $.01 per share.
J Total distributions of $.25 per share is comprised of distributions from net investment income of $.206 and distributions from net realized gain of $.045 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom Lifetime Income III Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 8.7 | 9.0 |
VIP Equity-Income Portfolio Investor Class | 9.2 | 9.1 |
VIP Growth & Income Portfolio Investor Class | 10.4 | 10.7 |
VIP Growth Portfolio Investor Class | 9.0 | 9.4 |
VIP Mid Cap Portfolio Investor Class | 2.5 | 2.7 |
VIP Value Portfolio Investor Class | 6.7 | 6.9 |
VIP Value Strategies Portfolio Investor Class | 3.3 | 3.4 |
| 49.8 | 51.2 |
Developed International Equity Funds | | |
VIP Overseas Portfolio Investor Class R | 14.5 | 14.7 |
Emerging Markets Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 3.7 | 3.8 |
High Yield Bond Funds | | |
VIP High Income Portfolio Investor Class | 7.4 | 7.3 |
Investment Grade Bond Funds | | |
VIP Investment Grade Bond Portfolio Investor Class | 24.1 | 22.7 |
Short-Term Funds | | |
VIP Money Market Portfolio Investor Class | 0.5 | 0.3 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%. |
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 49.8% | |
| Developed International Equity Funds | 14.5% | |
| Emerging Markets Equity Funds | 3.7% | |
| High Yield Bond Funds | 7.4% | |
| Investment Grade Bond Funds | 24.1% | |
| Short-Term Funds | 0.5% | |
Six months ago |
| Domestic Equity Funds | 51.2% | |
| Developed International Equity Funds | 14.7% | |
| Emerging Markets Equity Funds | 3.8% | |
| High Yield Bond Funds | 7.3% | |
| Investment Grade Bond Funds | 22.7% | |
| Short-Term Funds | 0.3% | |
Expected |
| Domestic Equity Funds | 49.2% | |
| Developed International Equity Funds | 14.3% | |
| Emerging Markets Equity Funds | 3.6% | |
| High Yield Bond Funds | 7.4% | |
| Investment Grade Bond Funds | 24.8% | |
| Short-Term Funds | 0.7% | |
The fund invests according to an asset allocation strategy that becomes increasingly conservative over time. The six months ago allocation is based on the fund's holdings as of December 31, 2013. The period end allocation is based on the fund's holdings as of June 30, 2014. The expected allocation represents the fund's anticipated allocation at December 31, 2014. |
Semiannual Report
VIP Freedom Lifetime Income III Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 49.8% |
| Shares | | Value |
Domestic Equity Funds - 49.8% |
VIP Contrafund Portfolio Investor Class (b) | 35,858 | | $ 1,308,815 |
VIP Equity-Income Portfolio Investor Class (b) | 55,192 | | 1,376,489 |
VIP Growth & Income Portfolio Investor Class (b) | 77,307 | | 1,569,331 |
VIP Growth Portfolio Investor Class (b) | 21,758 | | 1,347,478 |
VIP Mid Cap Portfolio Investor Class (b) | 10,199 | | 382,264 |
VIP Value Portfolio Investor Class (b) | 62,680 | | 1,009,777 |
VIP Value Strategies Portfolio Investor Class (b) | 32,501 | | 493,372 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $6,117,623) |
7,487,526
|
International Equity Funds - 18.2% |
| | | |
Developed International Equity Funds - 14.5% |
VIP Overseas Portfolio Investor Class R (b) | 106,948 | | 2,181,738 |
Emerging Markets Equity Funds - 3.7% |
VIP Emerging Markets Portfolio Investor Class R (b) | 58,103 | | 556,049 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $2,581,132) |
2,737,787
|
Bond Funds - 31.5% |
| Shares | | Value |
High Yield Bond Funds - 7.4% |
VIP High Income Portfolio Investor Class (b) | 184,162 | | $ 1,116,020 |
Investment Grade Bond Funds - 24.1% |
VIP Investment Grade Bond Portfolio Investor Class (b) | 282,536 | | 3,624,932 |
TOTAL BOND FUNDS (Cost $4,693,766) |
4,740,952
|
Short-Term Funds - 0.5% |
| | | |
VIP Money Market Portfolio Investor Class 0.01% (a)(b)
(Cost $67,202) | 67,202 | |
67,202
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $13,459,723) | | 15,033,467 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (1) |
NET ASSETS - 100% | $ 15,033,466 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 1,144,394 | $ 211,784 | $ 126,757 | $ - | $ 1,308,815 |
VIP Emerging Markets Portfolio Investor Class R | 475,711 | 87,455 | 40,642 | - | 556,049 |
VIP Equity-Income Portfolio Investor Class | 1,159,079 | 233,980 | 108,792 | - | 1,376,489 |
VIP Growth & Income Portfolio Investor Class | 1,351,539 | 251,844 | 124,340 | - | 1,569,331 |
VIP Growth Portfolio Investor Class | 1,195,187 | 241,876 | 196,836 | - | 1,347,478 |
VIP High Income Portfolio Investor Class | 924,700 | 215,908 | 71,982 | - | 1,116,020 |
VIP Investment Grade Bond Portfolio Investor Class | 2,869,576 | 888,421 | 263,362 | - | 3,624,932 |
VIP Mid Cap Portfolio Investor Class | 343,155 | 70,091 | 43,842 | - | 382,264 |
VIP Money Market Portfolio Investor Class | 34,017 | 36,147 | 2,962 | 2 | 67,202 |
VIP Overseas Portfolio Investor Class R | 1,866,281 | 460,291 | 130,723 | - | 2,181,738 |
VIP Value Portfolio Investor Class | 868,158 | 175,722 | 91,153 | - | 1,009,777 |
VIP Value Strategies Portfolio Investor Class | 429,477 | 74,865 | 38,417 | - | 493,372 |
Total | $ 12,661,274 | $ 2,948,384 | $ 1,239,808 | $ 2 | $ 15,033,467 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Freedom Lifetime Income III Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $13,459,723) - See accompanying schedule | | $ 15,033,467 |
Receivable for investments sold | | 743 |
Total assets | | 15,034,210 |
| | |
Liabilities | | |
Payable for fund shares redeemed | | 744 |
| | |
Net Assets | | $ 15,033,466 |
Net Assets consist of: | | |
Paid in capital | | $ 13,521,028 |
Undistributed net investment income | | 2 |
Accumulated undistributed net realized gain (loss) on investments | | (61,308) |
Net unrealized appreciation (depreciation) on investments | | 1,573,744 |
Net Assets, for 1,234,909 shares outstanding | | $ 15,033,466 |
Net Asset Value, offering price and redemption price per share ($15,033,466 ÷ 1,234,909 shares) | | $ 12.17 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 2 |
| | |
Expenses | | |
Independent trustees' compensation | $ 25 | |
Total expenses before reductions | 25 | |
Expense reductions | (25) | 0 |
Net investment income (loss) | | 2 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (28,872) | |
Capital gain distributions from underlying funds | 22,302 | |
Total net realized gain (loss) | | (6,570) |
Change in net unrealized appreciation (depreciation) on underlying funds | | 692,488 |
Net gain (loss) | | 685,918 |
Net increase (decrease) in net assets resulting from operations | | $ 685,920 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 2 | $ 204,562 |
Net realized gain (loss) | (6,570) | 251,316 |
Change in net unrealized appreciation (depreciation) | 692,488 | 1,370,475 |
Net increase (decrease) in net assets resulting from operations | 685,920 | 1,826,353 |
Distributions to shareholders from net investment income | - | (206,323) |
Distributions to shareholders from net realized gain | (169,660) | (90,884) |
Total distributions | (169,660) | (297,207) |
Share transactions
Proceeds from sales of shares | 2,711,518 | 3,863,570 |
Reinvestment of distributions | 169,660 | 297,207 |
Cost of shares redeemed | (1,025,246) | (1,347,649) |
Net increase (decrease) in net assets resulting from share transactions | 1,855,932 | 2,813,128 |
Total increase (decrease) in net assets | 2,372,192 | 4,342,274 |
| | |
Net Assets | | |
Beginning of period | 12,661,274 | 8,319,000 |
End of period (including undistributed net investment income of $2 and $0, respectively) | $ 15,033,466 | $ 12,661,274 |
Other Information Shares | | |
Sold | 229,308 | 344,361 |
Issued in reinvestment of distributions | 14,601 | 25,618 |
Redeemed | (87,669) | (123,719) |
Net increase (decrease) | 156,240 | 246,260 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.74 | $ 9.99 | $ 8.92 | $ 9.37 | $ 8.28 | $ 6.72 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | - I | .23 | .23 | .20 | .18 | .24 |
Net realized and unrealized gain (loss) | .58 | 1.81 | 1.12 | (.42) | 1.14 | 1.76 |
Total from investment operations | .58 | 2.04 | 1.35 | (.22) | 1.32 | 2.00 |
Distributions from net investment income | - | (.20) | (.22) | (.20) | (.19) | (.26) |
Distributions from net realized gain | (.15) | (.09) | (.07) | (.03) | (.04) | (.18) |
Total distributions | (.15) | (.29) | (.28) J | (.23) | (.23) | (.44) |
Net asset value, end of period | $ 12.17 | $ 11.74 | $ 9.99 | $ 8.92 | $ 9.37 | $ 8.28 |
Total Return B, C, D | 5.03% | 20.43% | 15.20% | (2.36) % | 15.98% | 30.34% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions G | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00% A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00% A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00% A, G | 2.07% | 2.34% | 2.13% | 2.03% | 3.33% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 15,033 | $ 12,661 | $ 8,319 | $ 6,824 | $ 6,741 | $ 6,630 |
Portfolio turnover rate F | 18% A | 19% | 20% | 16% | 20% | 10% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
I Amount represents less than $.01 per share.
J Total distributions of $.28 per share is comprised of distributions from net investment income of $.218 and distributions from net realized gain of $.065 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2014 (Unaudited)
1. Organization.
VIP Freedom Lifetime Income® I Portfolio, VIP Freedom Lifetime Income II Portfolio, and VIP Freedom Lifetime Income III Portfolio (the Funds) are funds of Variable Insurance Products Fund V (the Trust). 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. Each Fund is authorized to issue an unlimited number of shares. The Funds invest primarily in a combination of other VIP equity, bond, and short-term funds (the Underlying Funds) managed by Fidelity Management & Research Company (FMR). Shares of each Fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts.
2. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Funds:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Each Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value each Fund's investments by major category are as follows. Investments in the Underlying Funds are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Investment Transactions and Income. For financial reporting purposes, the Funds' 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. Income and capital gain distributions from the Underlying Funds, if any, are recorded on the ex-dividend date.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expenses included in the accompanying financial statements reflect the expenses of each Fund and do not include any expenses associated with the Underlying Funds. Although not included in each Fund's expenses, each Fund indirectly bears its proportionate share of the Underlying Funds' expenses through the impact of these expenses on each Underlying Fund's NAV. 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, each Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to the short-term gain distributions from the Underlying Funds, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows for each Fund:
| Tax cost | Gross unrealized
appreciation | Gross unrealized
depreciation | Net unrealized
appreciation
(depreciation) on
securities and
other investments |
VIP Freedom Lifetime Income I | $ 12,620,425 | $ 876,994 | $ (164,643) | $ 712,351 |
VIP Freedom Lifetime Income II | 23,889,693 | 2,048,295 | (370,204) | 1,678,091 |
VIP Freedom Lifetime Income III | 13,557,581 | 1,645,396 | (169,510) | 1,475,886 |
Semiannual Report
2. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital loss carryforwards are only available to offset future capital gains of the Funds to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Funds are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
| Fiscal year
of expiration |
VIP Freedom Lifetime Income II | $ (129,150) |
3. Purchases and Redemptions of Underlying Fund Shares.
Purchases and redemptions of the Underlying Fund shares are noted in the table below.
| Purchases ($) | Redemptions ($) |
VIP Freedom Lifetime Income I | 987,144 | 1,141,568 |
VIP Freedom Lifetime Income II | 3,289,698 | 1,809,718 |
VIP Freedom Lifetime Income III | 2,948,384 | 1,239,808 |
4. Fees and Other Transactions with Affiliates.
Management Fee. Strategic Advisers, Inc. (the investment adviser), an affiliate of FMR, provides the Funds with investment management related services. The Funds do not pay any fees for these services.
Other Transactions. The investment adviser has entered into an administration agreement with FMR under which FMR provides management and administrative services (other than investment advisory services) necessary for the operation of each Fund. Pursuant to this agreement, FMR pays all expenses of each Fund, excluding compensation of the independent Trustees and certain other expenses such as interest expense. FMR also contracts with other Fidelity companies to perform the services necessary for the operation of each Fund. The Funds do not pay any fees for these services.
5. Expense Reductions.
FMR voluntarily agreed to reimburse each Fund to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
The following Funds were in reimbursement during the period:
| Expense Limitations | Reimbursement |
VIP Freedom Lifetime Income I | .00% | $ 25 |
VIP Freedom Lifetime Income II | .00% | $ 45 |
VIP Freedom Lifetime Income III | .00% | $ 25 |
6. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
At the end of the period, the investment adviser or its affiliates were owners of record of all of the outstanding shares of the Funds.
Semiannual Report
Investment Adviser
Strategic Advisers, Inc.
Boston, MA
Administrator
Fidelity Management & Research Company
Boston, MA
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Bank of New York Mellon
New York, NY
VIPFLI-SANN-0814
1.816202.108
Fidelity® Variable Insurance Products:
FundsManager - 20%, 50%, 60%, 70%, 85% Portfolio
Semiannual Report
June 30, 2014
(Fidelity Cover Art)
Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
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. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the funds nor Fidelity Distributors Corporation is a bank.
Semiannual Report
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including 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 Funds 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 (January 1, 2014 to June 30, 2014).
Actual Expenses
The first line of the accompanying table for each class of each 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, each Fund, as a shareholder in underlying Fidelity Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Funds. These fees and expenses are not included in each Fund's annualized expense ratio used to calculate the expense estimates in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of each 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, each Fund, as a shareholder in underlying Fidelity Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Funds. These fees and expenses are not included in each Fund's annualized expense ratio used to calculate the expense estimates 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.
| Annualized
Expense RatioB | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014 to June 30, 2014 |
VIP FundsManager 20% Portfolio | | | | |
Service Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,032.10 | $ 1.01 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
Service Class 2 | .35% | | | |
Actual | | $ 1,000.00 | $ 1,031.30 | $ 1.76 |
HypotheticalA | | $ 1,000.00 | $ 1,023.06 | $ 1.76 |
Investor Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,032.20 | $ 1.01 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
VIP FundsManager 50% Portfolio | | | | |
Service Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,044.10 | $ 1.01 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
Service Class 2 | .35% | | | |
Actual | | $ 1,000.00 | $ 1,043.40 | $ 1.77 |
HypotheticalA | | $ 1,000.00 | $ 1,023.06 | $ 1.76 |
Investor Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,044.10 | $ 1.01 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
| Annualized
Expense RatioB | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014 to June 30, 2014 |
VIP FundsManager 60% Portfolio | | | | |
Service Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,047.70 | $ 1.02 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
Service Class 2 | .35% | | | |
Actual | | $ 1,000.00 | $ 1,046.90 | $ 1.78 |
HypotheticalA | | $ 1,000.00 | $ 1,023.06 | $ 1.76 |
Investor Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,047.70 | $ 1.02 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
VIP FundsManager 70% Portfolio | | | | |
Service Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,050.00 | $ 1.02 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
Service Class 2 | .35% | | | |
Actual | | $ 1,000.00 | $ 1,049.20 | $ 1.78 |
HypotheticalA | | $ 1,000.00 | $ 1,023.06 | $ 1.76 |
Investor Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,049.10 | $ 1.02 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
VIP FundsManager 85% Portfolio | | | | |
Service Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,049.70 | $ 1.02 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
Service Class 2 | .35% | | | |
Actual | | $ 1,000.00 | $ 1,049.00 | $ 1.78 |
HypotheticalA | | $ 1,000.00 | $ 1,023.06 | $ 1.76 |
Investor Class | .20% | | | |
Actual | | $ 1,000.00 | $ 1,050.50 | $ 1.02 |
HypotheticalA | | $ 1,000.00 | $ 1,023.80 | $ 1.00 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Funds in which each Fund invests are not included in each Class' annualized expense ratio.
Semiannual Report
VIP FundsManager 20% Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
Fidelity Air Transportation Portfolio | 0.1 | 0.1 |
Fidelity Automotive Portfolio | 0.2 | 0.2 |
Fidelity Banking Portfolio | 0.5 | 0.4 |
Fidelity Biotechnology Portfolio | 0.0* | 0.0* |
Fidelity Blue Chip Growth Fund | 0.2 | 0.1 |
Fidelity Blue Chip Value Fund | 0.1 | 0.0 |
Fidelity Brokerage and Investment Management Portfolio | 0.6 | 1.1 |
Fidelity Capital Appreciation Fund | 0.0* | 0.3 |
Fidelity Chemicals Portfolio | 0.7 | 0.2 |
Fidelity Communications Equipment Portfolio | 0.3 | 0.3 |
Fidelity Computers Portfolio | 0.3 | 0.2 |
Fidelity Construction and Housing Portfolio | 0.0* | 0.0* |
Fidelity Consumer Discretionary Portfolio | 1.0 | 0.9 |
Fidelity Consumer Finance Portfolio | 0.1 | 0.3 |
Fidelity Consumer Staples Portfolio | 0.9 | 0.9 |
Fidelity Contrafund | 0.0* | 0.1 |
Fidelity Defense and Aerospace Portfolio | 0.0* | 0.0* |
Fidelity Disciplined Equity Fund | 0.1 | 0.1 |
Fidelity Dividend Growth Fund | 0.0* | 0.0* |
Fidelity Electronics Portfolio | 0.4 | 0.1 |
Fidelity Energy Portfolio | 1.4 | 0.8 |
Fidelity Energy Service Portfolio | 0.4 | 0.3 |
Fidelity Environmental and Alternative Energy Portfolio | 0.0* | 0.0* |
Fidelity Equity Dividend Income Fund | 0.0* | 0.0* |
Fidelity Equity-Income Fund | 0.2 | 0.2 |
Fidelity Financial Services Portfolio | 0.9 | 0.8 |
Fidelity Fund | 0.0* | 0.0* |
Fidelity Global Commodity Stock Fund | 0.0* | 0.0* |
Fidelity Gold Portfolio | 0.0* | 0.0* |
Fidelity Growth & Income Portfolio | 0.0* | 0.0* |
Fidelity Growth Company Fund | 0.0* | 0.0* |
Fidelity Growth Discovery Fund | 0.0* | 0.0* |
Fidelity Health Care Portfolio | 2.0 | 2.3 |
Fidelity Independence Fund | 0.4 | 0.1 |
Fidelity Industrial Equipment Portfolio | 0.2 | 0.5 |
|
| % of fund's
net assets | % of fund's net assets
6 months ago |
Fidelity Industrials Portfolio | 1.4 | 1.5 |
Fidelity Insurance Portfolio | 0.6 | 0.7 |
Fidelity IT Services Portfolio | 0.0* | 0.4 |
Fidelity Large Cap Stock Fund | 0.4 | 0.3 |
Fidelity Leisure Portfolio | 0.1 | 0.1 |
Fidelity Leveraged Company Stock Fund | 0.0* | 0.0* |
Fidelity Low-Priced Stock Fund | 0.0* | 0.0* |
Fidelity Magellan Fund | 0.0* | 0.0* |
Fidelity Materials Portfolio | 0.1 | 0.1 |
Fidelity Medical Delivery Portfolio | 0.0* | 0.0* |
Fidelity Medical Equipment and Systems Portfolio | 0.0* | 0.0* |
Fidelity Mega Cap Stock Fund | 0.1 | 0.2 |
Fidelity Mid-Cap Stock Fund | 0.0* | 0.0* |
Fidelity Multimedia Portfolio | 0.4 | 0.4 |
Fidelity Natural Gas Portfolio | 0.0* | 0.0* |
Fidelity Natural Resources Portfolio | 0.0* | 0.0* |
Fidelity New Millennium Fund | 0.3 | 0.3 |
Fidelity OTC Portfolio | 0.2 | 0.5 |
Fidelity Pharmaceuticals Portfolio | 0.0* | 0.0* |
Fidelity Real Estate Investment Portfolio | 0.2 | 0.1 |
Fidelity Retailing Portfolio | 0.1 | 0.1 |
Fidelity Series Commodity Strategy Fund | 0.0* | 0.0* |
Fidelity Small Cap Discovery Fund | 0.0* | 0.3 |
Fidelity Small Cap Growth Fund | 0.0* | 0.0* |
Fidelity Small Cap Stock Fund | 0.0* | 0.0* |
Fidelity Small Cap Value Fund | 0.0* | 0.3 |
Fidelity Software and Computer Services Portfolio | 0.3 | 1.8 |
Fidelity Stock Selector Large Cap Value Fund | 0.0* | 0.0* |
Fidelity Technology Portfolio | 1.6 | 0.0 |
Fidelity Telecom and Utilities Fund | 0.0* | 0.0* |
Fidelity Telecommunications Portfolio | 0.2 | 0.2 |
Fidelity Transportation Portfolio | 0.2 | 0.2 |
Fidelity Utilities Portfolio | 0.2 | 0.0* |
Fidelity Value Discovery Fund | 0.0* | 0.0 |
Fidelity Value Fund | 0.1 | 0.0* |
Spartan Extended Market Index Fund Investor Class | 0.0* | 0.0* |
Spartan Total Market Index Fund Investor Class | 0.0* | 0.0* |
VIP Energy Portfolio Investor Class | 0.4 | 0.4 |
VIP Mid Cap Portfolio Investor Class | 0.0* | 0.0* |
| 17.9 | 18.2 |
Fund Holdings as of June 30, 2014 - continued |
| % of fund's
net assets | % of fund's net assets
6 months ago |
International Equity Funds | | |
Fidelity Canada Fund | 0.0* | 0.0* |
Fidelity China Region Fund | 0.1 | 0.1 |
Fidelity Diversified International Fund | 0.7 | 1.4 |
Fidelity Emerging Asia Fund | 0.3 | 0.3 |
Fidelity Emerging Markets Fund | 0.8 | 0.3 |
Fidelity Europe Capital Appreciation Fund | 0.0 | 0.1 |
Fidelity Europe Fund | 0.6 | 0.4 |
Fidelity International Capital Appreciation Fund | 0.5 | 0.2 |
Fidelity International Discovery Fund | 0.6 | 2.5 |
Fidelity International Real Estate Fund | 0.0* | 0.0* |
Fidelity International Small Cap Fund | 0.1 | 0.1 |
Fidelity International Small Cap Opportunities Fund | 0.2 | 0.3 |
Fidelity International Value Fund | 0.2 | 0.2 |
Fidelity Japan Fund | 0.0* | 0.0* |
Fidelity Japan Smaller Companies Fund | 0.1 | 0.2 |
Fidelity Nordic Fund | 0.3 | 0.2 |
Fidelity Overseas Fund | 1.6 | 0.0* |
Fidelity Pacific Basin Fund | 0.2 | 0.2 |
Spartan International Index Fund Investor Class | 1.2 | 1.3 |
| 7.5 | 7.8 |
Fixed-Income Funds | | |
Fidelity Floating Rate High Income Fund | 1.5 | 1.6 |
Fidelity Focused High Income Fund | 0.1 | 0.1 |
Fidelity High Income Fund | 1.7 | 1.6 |
Fidelity New Markets Income Fund | 0.5 | 0.1 |
Fidelity Real Estate Income Fund | 0.3 | 0.1 |
Spartan U.S. Bond Index Fund Investor Class | 47.0 | 46.0 |
| 51.1 | 49.5 |
Money Market Funds | | |
Fidelity Institutional Money Market Portfolio Class I | 1.8 | 1.9 |
Fidelity Institutional Prime Money Market Portfolio Class I | 17.3 | 17.9 |
Fidelity Select Money Market Portfolio | 4.4 | 4.7 |
| 23.5 | 24.5 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%
Asset Allocation (% of fund's net assets) |
As of June 30, 2014 |
 | Domestic Equity Funds | 17.9% | |
 | International Equity Funds | 7.5% | |
 | Fixed-Income Funds | 51.1% | |
 | Money Market Funds | 23.5% | |
As of December 31, 2013 |
| Domestic Equity Funds | 18.2% | |
| International Equity Funds | 7.8% | |
| Fixed-Income Funds | 49.5% | |
| Money Market Funds | 24.5% | |
Semiannual Report
VIP FundsManager 20% Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Equity Funds - 25.4% |
| Shares | | Value |
Domestic Equity Funds - 17.9% |
Fidelity Air Transportation Portfolio (c) | 9,563 | | $ 625,324 |
Fidelity Automotive Portfolio (c) | 26,534 | | 1,438,119 |
Fidelity Banking Portfolio (c) | 151,476 | | 3,973,214 |
Fidelity Biotechnology Portfolio (c) | 123 | | 24,709 |
Fidelity Blue Chip Growth Fund (c) | 16,751 | | 1,137,573 |
Fidelity Blue Chip Value Fund (c) | 60,634 | | 938,608 |
Fidelity Brokerage and Investment Management Portfolio (c) | 56,333 | | 4,115,682 |
Fidelity Capital Appreciation Fund (c) | 1,360 | | 51,229 |
Fidelity Chemicals Portfolio (c) | 32,425 | | 4,957,385 |
Fidelity Communications Equipment Portfolio (c) | 77,689 | | 2,509,365 |
Fidelity Computers Portfolio (c) | 24,183 | | 1,891,832 |
Fidelity Construction and Housing Portfolio (c) | 1,050 | | 56,935 |
Fidelity Consumer Discretionary Portfolio (c) | 219,623 | | 7,032,321 |
Fidelity Consumer Finance Portfolio (c) | 44,364 | | 692,522 |
Fidelity Consumer Staples Portfolio (c) | 68,204 | | 6,334,815 |
Fidelity Contrafund (c) | 263 | | 26,105 |
Fidelity Defense and Aerospace Portfolio (c) | 2,061 | | 240,387 |
Fidelity Disciplined Equity Fund (c) | 12,773 | | 436,956 |
Fidelity Dividend Growth Fund (c) | 544 | | 20,518 |
Fidelity Electronics Portfolio (c) | 33,372 | | 2,598,380 |
Fidelity Energy Portfolio (c) | 163,259 | | 10,073,089 |
Fidelity Energy Service Portfolio (c) | 33,697 | | 3,309,705 |
Fidelity Environmental and Alternative Energy Portfolio (c) | 11,100 | | 268,512 |
Fidelity Equity Dividend Income Fund (c) | 732 | | 19,150 |
Fidelity Equity-Income Fund (c) | 17,386 | | 1,091,522 |
Fidelity Financial Services Portfolio (c) | 81,868 | | 6,898,176 |
Fidelity Fund (c) | 709 | | 32,200 |
Fidelity Global Commodity Stock Fund (c) | 3,802 | | 57,976 |
Fidelity Gold Portfolio (a)(c) | 6,965 | | 163,549 |
Fidelity Growth & Income Portfolio (c) | 112 | | 3,310 |
Fidelity Growth Company Fund (c) | 1,260 | | 159,915 |
Fidelity Growth Discovery Fund (c) | 7,805 | | 180,051 |
Fidelity Health Care Portfolio (c) | 71,034 | | 14,680,683 |
Fidelity Independence Fund (c) | 81,601 | | 3,277,895 |
Fidelity Industrial Equipment Portfolio (c) | 28,321 | | 1,214,989 |
Fidelity Industrials Portfolio (c) | 305,159 | | 10,079,411 |
Fidelity Insurance Portfolio (c) | 64,524 | | 4,298,581 |
Fidelity IT Services Portfolio (c) | 7,282 | | 265,922 |
Fidelity Large Cap Stock Fund (c) | 92,802 | | 2,603,109 |
Fidelity Leisure Portfolio (c) | 4,678 | | 620,661 |
Fidelity Leveraged Company Stock Fund (c) | 197 | | 9,130 |
Fidelity Low-Priced Stock Fund (c) | 1,417 | | 73,539 |
Fidelity Magellan Fund (c) | 438 | | 40,462 |
Fidelity Materials Portfolio (c) | 8,956 | | 789,472 |
Fidelity Medical Delivery Portfolio (c) | 178 | | 13,405 |
|
| Shares | | Value |
Fidelity Medical Equipment and Systems Portfolio (c) | 471 | | $ 17,945 |
Fidelity Mega Cap Stock Fund (c) | 53,337 | | 876,856 |
Fidelity Mid-Cap Stock Fund (c) | 2,367 | | 93,297 |
Fidelity Multimedia Portfolio (c) | 35,558 | | 2,912,198 |
Fidelity Natural Gas Portfolio (c) | 150 | | 6,930 |
Fidelity Natural Resources Portfolio (c) | 902 | | 39,118 |
Fidelity New Millennium Fund (c) | 46,567 | | 1,953,937 |
Fidelity OTC Portfolio (c) | 20,206 | | 1,669,411 |
Fidelity Pharmaceuticals Portfolio (c) | 11,197 | | 234,811 |
Fidelity Real Estate Investment Portfolio (c) | 37,369 | | 1,395,000 |
Fidelity Retailing Portfolio (c) | 9,115 | | 738,403 |
Fidelity Series Commodity Strategy Fund (a)(c) | 1,089 | | 9,206 |
Fidelity Small Cap Discovery Fund (c) | 7,206 | | 224,093 |
Fidelity Small Cap Growth Fund (c) | 10,287 | | 201,427 |
Fidelity Small Cap Stock Fund (c) | 630 | | 12,540 |
Fidelity Small Cap Value Fund (c) | 8,426 | | 175,265 |
Fidelity Software and Computer Services Portfolio (c) | 15,920 | | 1,871,404 |
Fidelity Stock Selector Large Cap Value Fund (c) | 18,431 | | 307,055 |
Fidelity Technology Portfolio (c) | 95,607 | | 11,588,500 |
Fidelity Telecom and Utilities Fund (c) | 5,660 | | 139,461 |
Fidelity Telecommunications Portfolio (c) | 21,204 | | 1,302,153 |
Fidelity Transportation Portfolio (c) | 19,339 | | 1,607,439 |
Fidelity Utilities Portfolio (c) | 22,226 | | 1,728,310 |
Fidelity Value Discovery Fund (c) | 13,128 | | 309,292 |
Fidelity Value Fund (c) | 9,166 | | 1,037,589 |
Spartan Extended Market Index Fund Investor Class (c) | 298 | | 16,632 |
Spartan Total Market Index Fund Investor Class (c) | 3,513 | | 202,699 |
VIP Energy Portfolio Investor Class (c) | 108,256 | | 2,972,703 |
VIP Mid Cap Portfolio Investor Class (c) | 101 | | 3,778 |
TOTAL DOMESTIC EQUITY FUNDS | | 132,973,845 |
International Equity Funds - 7.5% |
Fidelity Canada Fund (c) | 436 | | 28,081 |
Fidelity China Region Fund (c) | 15,197 | | 513,652 |
Fidelity Diversified International Fund (c) | 131,646 | | 5,007,809 |
Fidelity Emerging Asia Fund (c) | 69,984 | | 2,287,068 |
Fidelity Emerging Markets Fund (c) | 246,790 | | 6,352,367 |
Fidelity Europe Fund (c) | 121,213 | | 4,899,445 |
Fidelity International Capital Appreciation Fund (c) | 237,575 | | 4,148,066 |
Fidelity International Discovery Fund (c) | 115,831 | | 4,769,906 |
Fidelity International Real Estate Fund (c) | 1,097 | | 12,060 |
Fidelity International Small Cap Fund (c) | 20,756 | | 573,905 |
Fidelity International Small Cap Opportunities Fund (c) | 80,347 | | 1,197,971 |
Fidelity International Value Fund (c) | 130,552 | | 1,208,913 |
Fidelity Japan Fund (c) | 3,353 | | 40,805 |
Equity Funds - continued |
| Shares | | Value |
International Equity Funds - continued |
Fidelity Japan Smaller Companies Fund (c) | 56,014 | | $ 762,904 |
Fidelity Nordic Fund (c) | 39,803 | | 1,947,563 |
Fidelity Overseas Fund (c) | 283,561 | | 11,869,884 |
Fidelity Pacific Basin Fund (c) | 47,541 | | 1,384,390 |
Spartan International Index Fund Investor Class (c) | 215,822 | | 9,146,531 |
TOTAL INTERNATIONAL EQUITY FUNDS | | 56,151,320 |
TOTAL EQUITY FUNDS (Cost $149,511,260) |
189,125,165
|
Fixed-Income Funds - 51.1% |
| | | |
Fidelity Floating Rate High Income Fund (c) | 1,107,099 | | 11,059,918 |
Fidelity Focused High Income Fund (c) | 63,630 | | 577,757 |
Fidelity High Income Fund (c) | 1,283,481 | | 12,193,066 |
Fidelity New Markets Income Fund (c) | 224,496 | | 3,773,786 |
Fidelity Real Estate Income Fund (c) | 205,133 | | 2,451,334 |
Spartan U.S. Bond Index Fund Investor Class (c) | 29,988,750 | | 349,668,822 |
TOTAL FIXED-INCOME FUNDS (Cost $367,714,488) |
379,724,683
|
Money Market Funds - 23.5% |
| Shares | | Value |
Fidelity Institutional Money Market Portfolio Class I 0.05% (b)(c) | 13,205,949 | | $ 13,205,949 |
Fidelity Institutional Prime Money Market Portfolio Class I 0.01% (b)(c) | 128,515,872 | | 128,515,872 |
Fidelity Select Money Market Portfolio 0.01% (b)(c) | 32,975,103 | | 32,975,103 |
TOTAL MONEY MARKET FUNDS (Cost $174,696,924) |
174,696,924
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $691,922,672) | 743,546,772 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | (166,831) |
NET ASSETS - 100% | $ 743,379,941 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. |
(c) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Air Transportation Portfolio | $ 563,881 | $ 3,205 | $ - | $ 257 | $ 625,324 |
Fidelity Automotive Portfolio | 1,357,761 | 120,205 | - | 1,036 | 1,438,119 |
Fidelity Banking Portfolio | 2,565,839 | 1,719,150 | 252,151 | 10,919 | 3,973,214 |
Fidelity Biotechnology Portfolio | 188,247 | - | 200,000 | - | 24,709 |
Fidelity Blue Chip Growth Fund | 771,438 | 299,203 | - | - | 1,137,573 |
Fidelity Blue Chip Value Fund | - | 892,250 | - | - | 938,608 |
Fidelity Brokerage and Investment Management Portfolio | 7,463,745 | 85,191 | 3,200,000 | 8,211 | 4,115,682 |
Fidelity Canada Fund | 146,592 | - | 120,000 | - | 28,081 |
Fidelity Capital Appreciation Fund | 2,099,582 | - | 2,040,000 | - | 51,229 |
Fidelity Chemicals Portfolio | 1,045,303 | 3,784,508 | - | 6,970 | 4,957,385 |
Fidelity China Region Fund | 513,044 | - | - | - | 513,652 |
Fidelity Communications Equipment Portfolio | 2,289,418 | 2,483 | - | 310 | 2,509,365 |
Fidelity Computers Portfolio | 1,544,074 | 253,162 | - | 2,854 | 1,891,832 |
Fidelity Construction and Housing Portfolio | 54,655 | 2,477 | - | 46 | 56,935 |
Fidelity Consumer Discretionary Portfolio | 6,455,657 | 2,218,475 | 1,495,574 | 1,396 | 7,032,321 |
Fidelity Consumer Finance Portfolio | 2,280,416 | 79,214 | 1,590,000 | 2,558 | 692,522 |
Fidelity Consumer Staples Portfolio | 6,212,247 | 212,769 | 266,012 | 16,843 | 6,334,815 |
Fidelity Contrafund | 479,558 | 34,460 | 500,000 | - | 26,105 |
Fidelity Defense and Aerospace Portfolio | 212,338 | 39,029 | - | 413 | 240,387 |
Fidelity Disciplined Equity Fund | 383,340 | 29,324 | - | - | 436,956 |
Fidelity Diversified International Fund | 9,595,158 | 334,693 | 5,000,000 | - | 5,007,809 |
Fidelity Dividend Growth Fund | 19,256 | - | - | - | 20,518 |
Fidelity Electronics Portfolio | 350,161 | 2,015,223 | - | 1,023 | 2,598,380 |
Affiliate | Value,
beginning of period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Emerging Asia Fund | $ 2,320,860 | $ 104,456 | $ 273,864 | $ - | $ 2,287,068 |
Fidelity Emerging Markets Fund | 2,270,820 | 4,013,389 | 259,646 | - | 6,352,367 |
Fidelity Energy Portfolio | 5,796,947 | 4,473,027 | 1,179,769 | 14,642 | 10,073,089 |
Fidelity Energy Service Portfolio | 1,839,664 | 1,305,828 | 171,062 | 541 | 3,309,705 |
Fidelity Environmental and Alternative Energy Portfolio | 253,092 | 321 | - | 33 | 268,512 |
Fidelity Equity Dividend Income Fund | 17,854 | 177 | - | 177 | 19,150 |
Fidelity Equity-Income Fund | 1,298,201 | 952,529 | 1,200,000 | 2,297 | 1,091,522 |
Fidelity Europe Capital Appreciation Fund | 914,247 | 8,347 | - | 8,347 | - |
Fidelity Europe Fund | 3,026,041 | 830,352 | 52,532 | - | 4,899,445 |
Fidelity Financial Services Portfolio | 5,654,338 | 1,296,770 | 253,879 | 8,626 | 6,898,176 |
Fidelity Floating Rate High Income Fund | 11,044,861 | 365,467 | 383,595 | 180,926 | 11,059,918 |
Fidelity Focused High Income Fund | 553,576 | 19,270 | - | 12,568 | 577,757 |
Fidelity Fund | 30,236 | - | - | - | 32,200 |
Fidelity Global Commodity Stock Fund | 53,718 | - | - | - | 57,976 |
Fidelity Gold Portfolio | 125,169 | - | - | - | 163,549 |
Fidelity Growth & Income Portfolio | 3,113 | 13 | - | 13 | 3,310 |
Fidelity Growth Company Fund | 150,203 | 881 | - | - | 159,915 |
Fidelity Growth Discovery Fund | 118,269 | 48,898 | - | - | 180,051 |
Fidelity Health Care Portfolio | 16,170,782 | 2,147,610 | 5,254,724 | - | 14,680,683 |
Fidelity High Income Fund | 11,137,255 | 947,081 | 50,136 | 302,609 | 12,193,066 |
Fidelity Independence Fund | 860,940 | 2,300,000 | - | - | 3,277,895 |
Fidelity Industrial Equipment Portfolio | 3,174,351 | 182,027 | 2,000,000 | 4,814 | 1,214,989 |
Fidelity Industrials Portfolio | 10,676,857 | 659,940 | 1,088,163 | 13,908 | 10,079,411 |
Fidelity Institutional Money Market Portfolio Class I | 13,203,190 | 2,759 | - | 2,759 | 13,205,949 |
Fidelity Institutional Prime Money Market Portfolio Class I | 124,480,048 | 12,430,715 | 8,394,892 | 6,271 | 128,515,872 |
Fidelity Insurance Portfolio | 5,016,864 | 248,948 | 832,510 | 12,302 | 4,298,581 |
Fidelity International Capital Appreciation Fund | 1,330,972 | 2,649,911 | - | - | 4,148,066 |
Fidelity International Discovery Fund | 17,361,242 | 32,058 | 12,409,883 | - | 4,769,906 |
Fidelity International Real Estate Fund | 11,160 | - | - | - | 12,060 |
Fidelity International Small Cap Fund | 556,055 | - | - | - | 573,905 |
Fidelity International Small Cap Opportunities Fund | 2,355,520 | 135,345 | 1,448,761 | - | 1,197,971 |
Fidelity International Value Fund | 1,181,497 | - | - | - | 1,208,913 |
Fidelity IT Services Portfolio | 3,042,691 | 10,639 | 2,680,186 | - | 265,922 |
Fidelity Japan Fund | 40,369 | - | - | - | 40,805 |
Fidelity Japan Smaller Companies Fund | 1,051,705 | - | 285,618 | - | 762,904 |
Fidelity Large Cap Stock Fund | 1,944,931 | 645,766 | 55,292 | 8,249 | 2,603,109 |
Fidelity Leisure Portfolio | 603,162 | 18,605 | - | 1,694 | 620,661 |
Fidelity Leveraged Company Stock Fund | 8,519 | - | - | - | 9,130 |
Fidelity Low-Priced Stock Fund | 70,108 | - | - | - | 73,539 |
Fidelity Magellan Fund | 37,919 | 2,366 | - | 73 | 40,462 |
Fidelity Materials Portfolio | 281,082 | 493,821 | - | 790 | 789,472 |
Fidelity Medical Delivery Portfolio | 12,500 | 495 | - | - | 13,405 |
Fidelity Medical Equipment and Systems Portfolio | 15,916 | 872 | - | - | 17,945 |
Fidelity Mega Cap Stock Fund | 1,309,441 | 506,156 | 1,000,000 | - | 876,856 |
Fidelity Mid-Cap Stock Fund | 87,173 | 6,257 | - | - | 93,297 |
Fidelity Multimedia Portfolio | 2,827,249 | 47,453 | - | 210 | 2,912,198 |
Fidelity Natural Gas Portfolio | 5,666 | 11 | - | 5 | 6,930 |
Fidelity Natural Resources Portfolio | 33,076 | 201 | - | 4 | 39,118 |
Fidelity New Markets Income Fund | 1,130,813 | 2,509,519 | 19,041 | 42,461 | 3,773,786 |
Fidelity New Millennium Fund | 1,678,855 | 552,942 | 390,966 | - | 1,953,937 |
Fidelity Nordic Fund | 1,657,534 | 129,525 | - | - | 1,947,563 |
Fidelity OTC Portfolio | 3,598,123 | 2,683,185 | 4,600,578 | - | 1,669,411 |
Fidelity Overseas Fund | 18,319 | 11,418,031 | - | - | 11,869,884 |
Fidelity Pacific Basin Fund | 1,314,981 | - | - | - | 1,384,390 |
Fidelity Pharmaceuticals Portfolio | 133,265 | 84,779 | - | 597 | 234,811 |
Fidelity Real Estate Income Fund | 565,052 | 1,826,984 | - | 26,676 | 2,451,334 |
Fidelity Real Estate Investment Portfolio | 451,969 | 862,311 | - | 5,666 | 1,395,000 |
Fidelity Retailing Portfolio | 763,312 | 30,466 | - | 209 | 738,403 |
Affiliate | Value,
beginning of period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Select Money Market Portfolio | $ 32,970,809 | $ 4,294 | $ - | $ 1,656 | $ 32,975,103 |
Fidelity Series Commodity Strategy Fund | 8,628 | - | - | - | 9,206 |
Fidelity Small Cap Discovery Fund | 1,745,982 | 19,020 | 1,513,982 | 283 | 224,093 |
Fidelity Small Cap Growth Fund | 198,238 | - | - | - | 201,427 |
Fidelity Small Cap Stock Fund | 11,961 | 1,146 | - | 35 | 12,540 |
Fidelity Small Cap Value Fund | 1,844,650 | - | 1,600,000 | - | 175,265 |
Fidelity Software and Computer Services Portfolio | 12,089,760 | 372,378 | 10,429,863 | - | 1,871,404 |
Fidelity Stock Selector Large Cap Value Fund | 157,841 | 133,725 | - | - | 307,055 |
Fidelity Technology Portfolio | - | 11,504,283 | - | - | 11,588,500 |
Fidelity Telecom and Utilities Fund | 122,424 | 2,253 | - | 2,253 | 139,461 |
Fidelity Telecommunications Portfolio | 1,251,781 | 100,605 | 69,055 | 24,774 | 1,302,153 |
Fidelity Transportation Portfolio | 1,127,230 | 331,735 | - | 1,910 | 1,607,439 |
Fidelity Utilities Portfolio | 229,274 | 1,448,234 | - | 1,157 | 1,728,310 |
Fidelity Value Discovery Fund | - | 307,106 | - | - | 309,292 |
Fidelity Value Fund | 158,870 | 839,805 | - | - | 1,037,589 |
Spartan Extended Market Index Fund Investor Class | 15,662 | 245 | - | 33 | 16,632 |
Spartan International Index Fund Investor Class | 8,726,882 | 357,546 | 293,498 | 55,584 | 9,146,531 |
Spartan Total Market Index Fund Investor Class | 189,613 | 501 | - | 501 | 202,699 |
Spartan U.S. Bond Index Fund Investor Class | 320,240,419 | 25,972,667 | 5,171,951 | 3,948,529 | 349,668,822 |
VIP Energy Portfolio Investor Class | 2,572,440 | 14,531 | - | - | 2,972,703 |
VIP Mid Cap Portfolio Investor Class | 3,595 | 56 | - | - | 3,778 |
Total | $ 695,929,441 | $ 110,521,654 | $ 78,027,183 | $ 4,747,018 | $ 743,546,772 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 20% Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $691,922,672) - See accompanying schedule | | $ 743,546,772 |
Receivable for investments sold | | 2,000,000 |
Receivable for fund shares sold | | 3,151,674 |
Total assets | | 748,698,446 |
| | |
Liabilities | | |
Payable for investments purchased | $ 5,193,938 | |
Payable for fund shares redeemed | 2,075 | |
Accrued management fee | 122,320 | |
Distribution and service plan fees payable | 172 | |
Total liabilities | | 5,318,505 |
| | |
Net Assets | | $ 743,379,941 |
Net Assets consist of: | | |
Paid in capital | | $ 676,920,402 |
Undistributed net investment income | | 4,044,888 |
Accumulated undistributed net realized gain (loss) on investments | | 10,790,551 |
Net unrealized appreciation (depreciation) on investments | | 51,624,100 |
Net Assets | | $ 743,379,941 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($75,520 ÷ 6,508 shares) | | $ 11.60 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($1,420,780 ÷ 122,697 shares) | | $ 11.58 |
| | |
Investor Class:
Net Asset Value, offering price and redemption price per share ($741,883,641 ÷ 63,963,609 shares) | | $ 11.60 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 20% Portfolio
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 4,747,018 |
| | |
Expenses | | |
Management fee | $ 893,512 | |
Distribution and service plan fees | 1,630 | |
Independent trustees' compensation | 1,362 | |
Total expenses before reductions | 896,504 | |
Expense reductions | (179,683) | 716,821 |
Net investment income (loss) | | 4,030,197 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | 7,712,658 | |
Capital gain distributions from underlying funds | 3,650,405 | |
Total net realized gain (loss) | | 11,363,063 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 7,410,189 |
Net gain (loss) | | 18,773,252 |
Net increase (decrease) in net assets resulting from operations | | $ 22,803,449 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 4,030,197 | $ 8,470,570 |
Net realized gain (loss) | 11,363,063 | 18,598,537 |
Change in net unrealized appreciation (depreciation) | 7,410,189 | 9,581,168 |
Net increase (decrease) in net assets resulting from operations | 22,803,449 | 36,650,275 |
Distributions to shareholders from net investment income | - | (8,453,986) |
Distributions to shareholders from net realized gain | (5,702,377) | (14,302,675) |
Total distributions | (5,702,377) | (22,756,661) |
Share transactions - net increase (decrease) | 30,464,693 | 29,613,069 |
Total increase (decrease) in net assets | 47,565,765 | 43,506,683 |
| | |
Net Assets | | |
Beginning of period | 695,814,176 | 652,307,493 |
End of period (including undistributed net investment income of $4,044,888 and undistributed net investment income of $14,691, respectively) | $ 743,379,941 | $ 695,814,176 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.33 | $ 11.10 | $ 10.68 | $ 10.63 | $ 10.07 | $ 9.27 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .06 | .14 | .17 | .20 | .19 | .21 |
Net realized and unrealized gain (loss) | .30 | .47 | .44 | .05 | .55 | .76 |
Total from investment operations | .36 | .61 | .61 | .25 | .74 | .97 |
Distributions from net investment income | - | (.14) | (.16) | (.18) | (.17) | (.16) |
Distributions from net realized gain | (.09) | (.24) | (.03) | (.02) | (.01) | (.01) |
Total distributions | (.09) | (.38) | (.19) | (.20) | (.18) | (.17)H |
Net asset value, end of period | $ 11.60 | $ 11.33 | $ 11.10 | $ 10.68 | $ 10.63 | $ 10.07 |
Total ReturnB, C, D | 3.21% | 5.53% | 5.68% | 2.30% | 7.36% | 10.43% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | 1.12%A | 1.23% | 1.51% | 1.84% | 1.84% | 2.19% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 76 | $ 72 | $ 71 | $ 64 | $ 67 | $ 61 |
Portfolio turnover rateF | 22%A | 25% | 17% | 12% | 14% | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.17 per share is comprised of distributions from net investment income of $.161 and distributions from net realized gain of $.006 per share.
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.32 | $ 11.08 | $ 10.67 | $ 10.62 | $ 10.06 | $ 9.28 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .06 | .12 | .15 | .18 | .18 | .20 |
Net realized and unrealized gain (loss) | .29 | .48 | .43 | .05 | .55 | .74 |
Total from investment operations | .35 | .60 | .58 | .23 | .73 | .94 |
Distributions from net investment income | - | (.12) | (.14) | (.16) | (.16) | (.16) |
Distributions from net realized gain | (.09) | (.24) | (.03) | (.02) | (.01) | (.01) |
Total distributions | (.09) | (.36) | (.17) | (.18) | (.17) | (.16)H |
Net asset value, end of period | $ 11.58 | $ 11.32 | $ 11.08 | $ 10.67 | $ 10.62 | $ 10.06 |
Total ReturnB, C, D | 3.13% | 5.46% | 5.43% | 2.20% | 7.24% | 10.14% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .50%A | .50% | .50% | .50% | .50% | .50% |
Expenses net of fee waivers, if any | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of all reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Net investment income (loss) | .98%A | 1.08% | 1.36% | 1.69% | 1.69% | 2.04% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,421 | $ 1,197 | $ 1,274 | $ 1,373 | $ 569 | $ 425 |
Portfolio turnover rateF | 22%A | 25% | 17% | 12% | 14% | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.16 per share is comprised of distributions from net investment income of $.155 and distributions from net realized gain of $.006 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Investor Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.33 | $ 11.09 | $ 10.68 | $ 10.63 | $ 10.06 | $ 9.27 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .06 | .14 | .17 | .20 | .19 | .21 |
Net realized and unrealized gain (loss) | .30 | .48 | .43 | .05 | .56 | .75 |
Total from investment operations | .36 | .62 | .60 | .25 | .75 | .96 |
Distributions from net investment income | - | (.14) | (.16) | (.18) | (.17) | (.16) |
Distributions from net realized gain | (.09) | (.24) | (.03) | (.02) | (.01) | (.01) |
Total distributions | (.09) | (.38) | (.19) | (.20) | (.18) | (.17)H |
Net asset value, end of period | $ 11.60 | $ 11.33 | $ 11.09 | $ 10.68 | $ 10.63 | $ 10.06 |
Total ReturnB, C, D | 3.22% | 5.62% | 5.58% | 2.31% | 7.47% | 10.32% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .25%A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | 1.13%A | 1.23% | 1.51% | 1.84% | 1.84% | 2.19% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 741,884 | $ 694,546 | $ 650,963 | $ 533,568 | $ 391,226 | $ 270,852 |
Portfolio turnover rateF | 22%A | 25% | 17% | 12% | 14% | 31% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.17 per share is comprised of distributions from net investment income of $.161 and distributions from net realized gain of $.006 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 50% Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
Fidelity Air Transportation Portfolio | 0.3 | 0.3 |
Fidelity Automotive Portfolio | 0.3 | 0.6 |
Fidelity Banking Portfolio | 1.2 | 1.3 |
Fidelity Biotechnology Portfolio | 0.0* | 0.7 |
Fidelity Blue Chip Growth Fund | 1.0 | 0.9 |
Fidelity Blue Chip Value Fund | 0.3 | 0.0 |
Fidelity Brokerage and Investment Management Portfolio | 1.5 | 1.9 |
Fidelity Capital Appreciation Fund | 0.0* | 0.1 |
Fidelity Chemicals Portfolio | 1.3 | 0.7 |
Fidelity Communications Equipment Portfolio | 0.3 | 0.4 |
Fidelity Computers Portfolio | 0.7 | 0.8 |
Fidelity Construction and Housing Portfolio | 0.6 | 0.7 |
Fidelity Consumer Discretionary Portfolio | 1.5 | 1.5 |
Fidelity Consumer Finance Portfolio | 0.1 | 0.2 |
Fidelity Consumer Staples Portfolio | 1.7 | 2.4 |
Fidelity Contrafund | 0.0* | 0.2 |
Fidelity Defense and Aerospace Portfolio | 0.0* | 0.0* |
Fidelity Disciplined Equity Fund | 0.2 | 0.4 |
Fidelity Dividend Growth Fund | 0.0* | 0.0* |
Fidelity Electronics Portfolio | 0.6 | 0.3 |
Fidelity Energy Portfolio | 2.4 | 1.4 |
Fidelity Energy Service Portfolio | 1.3 | 0.9 |
Fidelity Environmental and Alternative Energy Portfolio | 0.0* | 0.0* |
Fidelity Equity Dividend Income Fund | 0.0* | 0.0* |
Fidelity Equity-Income Fund | 0.3 | 0.8 |
Fidelity Financial Services Portfolio | 1.7 | 1.6 |
Fidelity Fund | 0.0* | 0.0* |
Fidelity Global Commodity Stock Fund | 0.0* | 0.0* |
Fidelity Gold Portfolio | 0.0* | 0.0* |
Fidelity Growth & Income Portfolio | 0.1 | 0.7 |
Fidelity Growth Company Fund | 0.1 | 0.1 |
Fidelity Growth Discovery Fund | 0.3 | 0.2 |
Fidelity Health Care Portfolio | 2.8 | 2.4 |
Fidelity Independence Fund | 0.7 | 0.1 |
Fidelity Industrial Equipment Portfolio | 0.7 | 1.1 |
|
| % of fund's
net assets | % of fund's net assets
6 months ago |
Fidelity Industrials Portfolio | 2.1 | 2.3 |
Fidelity Insurance Portfolio | 0.8 | 1.0 |
Fidelity IT Services Portfolio | 0.1 | 0.5 |
Fidelity Large Cap Stock Fund | 2.0 | 1.6 |
Fidelity Leisure Portfolio | 0.1 | 0.1 |
Fidelity Leveraged Company Stock Fund | 0.0* | 0.0* |
Fidelity Low-Priced Stock Fund | 0.0* | 0.1 |
Fidelity Magellan Fund | 0.0* | 0.0* |
Fidelity Materials Portfolio | 0.3 | 0.2 |
Fidelity Medical Delivery Portfolio | 0.2 | 0.2 |
Fidelity Medical Equipment and Systems Portfolio | 0.0* | 0.0* |
Fidelity Mega Cap Stock Fund | 1.1 | 1.6 |
Fidelity Mid Cap Value Fund | 0.0* | 0.0* |
Fidelity Mid-Cap Stock Fund | 0.0* | 0.0* |
Fidelity Multimedia Portfolio | 0.6 | 0.9 |
Fidelity Nasdaq Composite Index Fund | 0.0* | 0.0* |
Fidelity Natural Gas Portfolio | 0.1 | 0.0* |
Fidelity Natural Resources Portfolio | 0.0* | 0.0* |
Fidelity New Millennium Fund | 1.8 | 0.7 |
Fidelity OTC Portfolio | 0.5 | 0.7 |
Fidelity Pharmaceuticals Portfolio | 0.8 | 0.7 |
Fidelity Real Estate Investment Portfolio | 0.1 | 0.0* |
Fidelity Retailing Portfolio | 0.3 | 0.3 |
Fidelity Series Commodity Strategy Fund | 0.0* | 0.0* |
Fidelity Small Cap Discovery Fund | 0.1 | 0.8 |
Fidelity Small Cap Growth Fund | 0.0* | 0.0* |
Fidelity Small Cap Stock Fund | 0.0* | 0.0* |
Fidelity Small Cap Value Fund | 0.0* | 0.0* |
Fidelity Software and Computer Services Portfolio | 1.7 | 2.3 |
Fidelity Stock Selector Large Cap Value Fund | 0.3 | 0.0* |
Fidelity Technology Portfolio | 1.6 | 1.2 |
Fidelity Telecom and Utilities Fund | 0.0* | 0.0* |
Fidelity Telecommunications Portfolio | 0.3 | 0.4 |
Fidelity Transportation Portfolio | 0.5 | 0.5 |
Fidelity Utilities Portfolio | 0.2 | 0.2 |
Fidelity Value Discovery Fund | 0.2 | 0.0 |
Fidelity Value Fund | 0.8 | 0.5 |
Fidelity Value Strategies Fund | 0.0* | 0.0* |
Spartan 500 Index Fund Investor Class | 0.0* | 0.0* |
Spartan Extended Market Index Fund Investor Class | 0.1 | 0.3 |
Spartan Total Market Index Fund Investor Class | 0.1 | 0.3 |
VIP Mid Cap Portfolio Investor Class | 0.0* | 0.0* |
| 38.8 | 40.1 |
Fund Holdings as of June 30, 2014 - continued |
| % of fund's
net assets | % of fund's net assets
6 months ago |
International Equity Funds | | |
Fidelity Canada Fund | 0.0* | 0.0* |
Fidelity China Region Fund | 0.0* | 0.0* |
Fidelity Diversified International Fund | 2.5 | 2.5 |
Fidelity Emerging Asia Fund | 0.5 | 0.5 |
Fidelity Emerging Markets Fund | 0.9 | 0.9 |
Fidelity Europe Capital Appreciation Fund | 0.0 | 0.1 |
Fidelity Europe Fund | 2.6 | 2.1 |
Fidelity International Capital Appreciation Fund | 0.5 | 0.4 |
Fidelity International Discovery Fund | 3.7 | 4.5 |
Fidelity International Growth Fund | 0.1 | 0.2 |
Fidelity International Real Estate Fund | 0.0* | 0.0* |
Fidelity International Small Cap Fund | 0.3 | 0.8 |
Fidelity International Small Cap Opportunities Fund | 0.7 | 0.5 |
Fidelity International Value Fund | 0.3 | 0.3 |
Fidelity Japan Fund | 0.1 | 0.1 |
Fidelity Japan Smaller Companies Fund | 0.3 | 0.9 |
Fidelity Latin America Fund | 0.0* | 0.0* |
Fidelity Nordic Fund | 0.4 | 0.2 |
Fidelity Overseas Fund | 1.3 | 0.1 |
Fidelity Pacific Basin Fund | 0.2 | 0.3 |
Spartan International Index Fund Investor Class | 2.3 | 2.6 |
| 16.7 | 17.0 |
Fixed-Income Funds | | |
Fidelity Floating Rate High Income Fund | 1.5 | 1.7 |
Fidelity Focused High Income Fund | 0.2 | 0.2 |
Fidelity High Income Fund | 1.0 | 1.0 |
Fidelity New Markets Income Fund | 0.5 | 0.2 |
Fidelity Real Estate Income Fund | 0.4 | 0.0* |
Spartan U.S. Bond Index Fund Investor Class | 35.5 | 33.8 |
| 39.1 | 36.9 |
Money Market Funds | | |
Fidelity Institutional Prime Money Market Portfolio Class I | 5.2 | 5.7 |
Fidelity Select Money Market Portfolio | 0.2 | 0.3 |
| 5.4 | 6.0 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%
Asset Allocation (% of fund's net assets) |
As of June 30, 2014 |
 | Domestic Equity Funds | 38.8% | |
 | International Equity Funds | 16.7% | |
 | Fixed-Income Funds | 39.1% | |
 | Money Market Funds | 5.4% | |
As of December 31, 2013 |
| Domestic Equity Funds | 40.1% | |
 | International Equity Funds | 17.0% | |
 | Fixed-Income Funds | 36.9% | |
| Money Market Funds | 6.0% | |
Semiannual Report
VIP FundsManager 50% Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Equity Funds - 55.5% |
| Shares | | Value |
Domestic Equity Funds - 38.8% |
Fidelity Air Transportation Portfolio (c) | 185,824 | | $ 12,151,009 |
Fidelity Automotive Portfolio (c) | 238,080 | | 12,903,917 |
Fidelity Banking Portfolio (c) | 2,018,474 | | 52,944,565 |
Fidelity Biotechnology Portfolio (c) | 336 | | 67,322 |
Fidelity Blue Chip Growth Fund (c) | 660,026 | | 44,822,364 |
Fidelity Blue Chip Value Fund (c) | 878,332 | | 13,596,580 |
Fidelity Brokerage and Investment Management Portfolio (c) | 901,440 | | 65,859,177 |
Fidelity Capital Appreciation Fund (c) | 3,223 | | 121,432 |
Fidelity Chemicals Portfolio (c) | 363,653 | | 55,598,871 |
Fidelity Communications Equipment Portfolio (c) | 422,928 | | 13,660,571 |
Fidelity Computers Portfolio (c) | 399,262 | | 31,234,303 |
Fidelity Construction and Housing Portfolio (c) | 439,412 | | 23,820,518 |
Fidelity Consumer Discretionary Portfolio (c) | 2,053,399 | | 65,749,841 |
Fidelity Consumer Finance Portfolio (c) | 404,172 | | 6,309,117 |
Fidelity Consumer Staples Portfolio (c) | 783,920 | | 72,810,476 |
Fidelity Contrafund (c) | 752 | | 74,670 |
Fidelity Defense and Aerospace Portfolio (c) | 13,871 | | 1,617,510 |
Fidelity Disciplined Equity Fund (c) | 307,079 | | 10,505,162 |
Fidelity Dividend Growth Fund (c) | 4,379 | | 165,116 |
Fidelity Electronics Portfolio (c) | 342,692 | | 26,681,992 |
Fidelity Energy Portfolio (c) | 1,648,656 | | 101,722,062 |
Fidelity Energy Service Portfolio (c) | 573,060 | | 56,285,970 |
Fidelity Environmental and Alternative Energy Portfolio (c) | 16,977 | | 410,667 |
Fidelity Equity Dividend Income Fund (c) | 550 | | 14,390 |
Fidelity Equity-Income Fund (c) | 225,573 | | 14,161,503 |
Fidelity Financial Services Portfolio (c) | 846,208 | | 71,301,472 |
Fidelity Fund (c) | 753 | | 34,209 |
Fidelity Global Commodity Stock Fund (c) | 4,619 | | 70,434 |
Fidelity Gold Portfolio (a)(c) | 5,877 | | 137,995 |
Fidelity Growth & Income Portfolio (c) | 80,757 | | 2,383,137 |
Fidelity Growth Company Fund (c) | 21,574 | | 2,737,554 |
Fidelity Growth Discovery Fund (c) | 608,851 | | 14,046,195 |
Fidelity Health Care Portfolio (c) | 576,665 | | 119,179,412 |
Fidelity Independence Fund (c) | 755,003 | | 30,328,485 |
Fidelity Industrial Equipment Portfolio (c) | 683,940 | | 29,341,027 |
Fidelity Industrials Portfolio (c) | 2,753,740 | | 90,956,026 |
Fidelity Insurance Portfolio (c) | 520,616 | | 34,683,462 |
Fidelity IT Services Portfolio (c) | 120,394 | | 4,396,790 |
Fidelity Large Cap Stock Fund (c) | 3,011,522 | | 84,473,199 |
Fidelity Leisure Portfolio (c) | 26,974 | | 3,578,849 |
Fidelity Leveraged Company Stock Fund (c) | 774 | | 35,886 |
Fidelity Low-Priced Stock Fund (c) | 1,064 | | 55,198 |
Fidelity Magellan Fund (c) | 130 | | 11,994 |
Fidelity Materials Portfolio (c) | 158,859 | | 14,003,379 |
Fidelity Medical Delivery Portfolio (c) | 106,351 | | 7,993,350 |
|
| Shares | | Value |
Fidelity Medical Equipment and Systems Portfolio (c) | 16,183 | | $ 617,064 |
Fidelity Mega Cap Stock Fund (c) | 2,893,174 | | 47,563,782 |
Fidelity Mid Cap Value Fund (c) | 21,426 | | 514,876 |
Fidelity Mid-Cap Stock Fund (c) | 6,848 | | 269,878 |
Fidelity Multimedia Portfolio (c) | 329,504 | | 26,986,378 |
Fidelity Nasdaq Composite Index Fund (c) | 10,556 | | 616,795 |
Fidelity Natural Gas Portfolio (c) | 49,292 | | 2,274,313 |
Fidelity Natural Resources Portfolio (c) | 3,582 | | 155,404 |
Fidelity New Millennium Fund (c) | 1,811,632 | | 76,016,058 |
Fidelity OTC Portfolio (c) | 233,694 | | 19,307,786 |
Fidelity Pharmaceuticals Portfolio (c) | 1,578,775 | | 33,106,906 |
Fidelity Real Estate Investment Portfolio (c) | 160,878 | | 6,005,574 |
Fidelity Retailing Portfolio (c) | 134,391 | | 10,887,005 |
Fidelity Series Commodity Strategy Fund (a)(c) | 1,089 | | 9,206 |
Fidelity Small Cap Discovery Fund (c) | 115,949 | | 3,606,000 |
Fidelity Small Cap Growth Fund (c) | 4,989 | | 97,676 |
Fidelity Small Cap Stock Fund (c) | 9,757 | | 194,264 |
Fidelity Small Cap Value Fund (c) | 9,762 | | 203,056 |
Fidelity Software and Computer Services Portfolio (c) | 641,426 | | 75,399,666 |
Fidelity Stock Selector Large Cap Value Fund (c) | 848,896 | | 14,142,601 |
Fidelity Technology Portfolio (c) | 585,258 | | 70,939,106 |
Fidelity Telecom and Utilities Fund (c) | 10,011 | | 246,660 |
Fidelity Telecommunications Portfolio (c) | 192,135 | | 11,799,038 |
Fidelity Transportation Portfolio (c) | 269,029 | | 22,361,669 |
Fidelity Utilities Portfolio (c) | 102,636 | | 7,980,948 |
Fidelity Value Discovery Fund (c) | 443,104 | | 10,439,528 |
Fidelity Value Fund (c) | 311,034 | | 35,209,004 |
Fidelity Value Strategies Fund (c) | 293 | | 12,694 |
Spartan 500 Index Fund Investor Class (c) | 2,973 | | 207,562 |
Spartan Extended Market Index Fund Investor Class (c) | 53,294 | | 2,974,846 |
Spartan Total Market Index Fund Investor Class (c) | 54,033 | | 3,117,732 |
VIP Mid Cap Portfolio Investor Class (c) | 10,053 | | 376,799 |
TOTAL DOMESTIC EQUITY FUNDS | | 1,676,677,032 |
International Equity Funds - 16.7% |
Fidelity Canada Fund (c) | 2,644 | | 170,096 |
Fidelity China Region Fund (c) | 44,327 | | 1,498,236 |
Fidelity Diversified International Fund (c) | 2,782,426 | | 105,843,490 |
Fidelity Emerging Asia Fund (c) | 658,507 | | 21,520,007 |
Fidelity Emerging Markets Fund (c) | 1,500,283 | | 38,617,294 |
Fidelity Europe Fund (c) | 2,791,580 | | 112,835,651 |
Fidelity International Capital Appreciation Fund (c) | 1,305,084 | | 22,786,773 |
Fidelity International Discovery Fund (c) | 3,823,827 | | 157,465,200 |
Fidelity International Growth Fund (c) | 487,707 | | 5,589,117 |
Fidelity International Real Estate Fund (c) | 14,690 | | 161,447 |
Equity Funds - continued |
| Shares | | Value |
International Equity Funds - continued |
Fidelity International Small Cap Fund (c) | 523,437 | | $ 14,473,035 |
Fidelity International Small Cap Opportunities Fund (c) | 2,039,219 | | 30,404,760 |
Fidelity International Value Fund (c) | 1,154,582 | | 10,691,430 |
Fidelity Japan Fund (c) | 181,051 | | 2,203,386 |
Fidelity Japan Smaller Companies Fund (c) | 927,277 | | 12,629,512 |
Fidelity Latin America Fund (c) | 645 | | 21,243 |
Fidelity Nordic Fund (c) | 371,784 | | 18,191,407 |
Fidelity Overseas Fund (c) | 1,371,718 | | 57,420,129 |
Fidelity Pacific Basin Fund (c) | 340,365 | | 9,911,431 |
Spartan International Index Fund Investor Class (c) | 2,301,247 | | 97,526,834 |
TOTAL INTERNATIONAL EQUITY FUNDS | | 719,960,478 |
TOTAL EQUITY FUNDS (Cost $2,000,167,579) |
2,396,637,510
|
Fixed-Income Funds - 39.1% |
| | | |
Fidelity Floating Rate High Income Fund (c) | 6,321,941 | | 63,156,192 |
Fidelity Focused High Income Fund (c) | 833,457 | | 7,567,786 |
Fidelity High Income Fund (c) | 4,799,374 | | 45,594,054 |
Fidelity New Markets Income Fund (c) | 1,309,354 | | 22,010,237 |
|
| Shares | | Value |
Fidelity Real Estate Income Fund (c) | 1,309,602 | | $ 15,649,746 |
Spartan U.S. Bond Index Fund Investor Class (c) | 131,681,414 | | 1,535,405,286 |
TOTAL FIXED-INCOME FUNDS (Cost $1,668,214,252) |
1,689,383,301
|
Money Market Funds - 5.4% |
| | | |
Fidelity Institutional Prime Money Market Portfolio Class I 0.01% (b)(c) | 225,681,493 | | 225,681,493 |
Fidelity Select Money Market Portfolio 0.01% (b)(c) | 10,216,172 | | 10,216,172 |
TOTAL MONEY MARKET FUNDS (Cost $235,897,665) |
235,897,665
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $3,904,279,496) | 4,321,918,476 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | (911,042) |
NET ASSETS - 100% | $ 4,321,007,434 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. |
(c) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Air Transportation Portfolio | $ 10,870,505 | $ 155,509 | $ - | $ 4,949 | $ 12,151,009 |
Fidelity Automotive Portfolio | 21,453,398 | 1,600,932 | 9,805,621 | 8,927 | 12,903,917 |
Fidelity Banking Portfolio | 43,657,362 | 9,425,353 | 271,175 | 137,587 | 52,944,565 |
Fidelity Biotechnology Portfolio | 22,936,543 | - | 24,212,312 | - | 67,322 |
Fidelity Blue Chip Growth Fund | 31,205,529 | 10,810,998 | - | - | 44,822,364 |
Fidelity Blue Chip Value Fund | - | 12,898,264 | - | - | 13,596,580 |
Fidelity Brokerage and Investment Management Portfolio | 63,762,714 | 7,416,062 | 4,041,468 | 97,262 | 65,859,177 |
Fidelity Canada Fund | 154,154 | - | - | - | 170,096 |
Fidelity Capital Appreciation Fund | 2,203,863 | - | 2,100,000 | - | 121,432 |
Fidelity Chemicals Portfolio | 22,984,107 | 30,656,756 | - | 74,317 | 55,598,871 |
Fidelity China Region Fund | 1,496,463 | - | - | - | 1,498,236 |
Fidelity Communications Equipment Portfolio | 11,905,092 | 612,914 | - | 1,614 | 13,660,571 |
Fidelity Computers Portfolio | 28,580,421 | 1,118,216 | 69,409 | 52,696 | 31,234,303 |
Fidelity Construction and Housing Portfolio | 22,375,540 | 1,832,314 | 267,670 | 19,415 | 23,820,518 |
Fidelity Consumer Discretionary Portfolio | 49,761,238 | 17,348,800 | 145,003 | 14,190 | 65,749,841 |
Fidelity Consumer Finance Portfolio | 7,384,535 | 456,786 | 1,169,945 | 14,749 | 6,309,117 |
Fidelity Consumer Staples Portfolio | 82,262,236 | 4,901,156 | 16,100,000 | 188,995 | 72,810,476 |
Fidelity Contrafund | 6,879,234 | 1,108,222 | 8,100,000 | - | 74,670 |
Fidelity Defense and Aerospace Portfolio | 1,626,260 | 65,298 | - | 2,778 | 1,617,510 |
Fidelity Disciplined Equity Fund | 12,943,925 | 1,028,375 | 4,239,497 | - | 10,505,162 |
Fidelity Diversified International Fund | 85,047,614 | 38,787,386 | 21,043,840 | - | 105,843,490 |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Dividend Growth Fund | $ 154,957 | $ - | $ - | $ - | $ 165,116 |
Fidelity Electronics Portfolio | 8,492,416 | 15,218,464 | - | 12,163 | 26,681,992 |
Fidelity Emerging Asia Fund | 18,099,927 | 2,203,411 | 106,446 | - | 21,520,007 |
Fidelity Emerging Markets Fund | 30,608,006 | 5,882,633 | 238,863 | - | 38,617,294 |
Fidelity Energy Portfolio | 47,967,394 | 54,351,238 | 9,425,452 | 128,544 | 101,722,062 |
Fidelity Energy Service Portfolio | 31,966,985 | 20,038,374 | 2,810,219 | 11,080 | 56,285,970 |
Fidelity Environmental and Alternative Energy Portfolio | 387,084 | 492 | - | 51 | 410,667 |
Fidelity Equity Dividend Income Fund | 13,416 | 133 | - | 133 | 14,390 |
Fidelity Equity-Income Fund | 26,381,003 | 10,736,509 | 24,000,000 | 114,064 | 14,161,503 |
Fidelity Europe Capital Appreciation Fund | 1,779,295 | 16,244 | - | 16,244 | - |
Fidelity Europe Fund | 71,684,771 | 36,638,754 | 1,146,816 | - | 112,835,651 |
Fidelity Financial Services Portfolio | 53,716,017 | 18,177,280 | 2,633,832 | 85,255 | 71,301,472 |
Fidelity Floating Rate High Income Fund | 56,083,137 | 7,110,280 | 216,682 | 976,471 | 63,156,192 |
Fidelity Focused High Income Fund | 7,251,058 | 252,414 | - | 164,618 | 7,567,786 |
Fidelity Fund | 32,123 | - | - | - | 34,209 |
Fidelity Global Commodity Stock Fund | 65,261 | - | - | - | 70,434 |
Fidelity Gold Portfolio | 105,612 | - | - | - | 137,995 |
Fidelity Growth & Income Portfolio | 22,508,160 | 9,169 | 20,071,100 | 9,169 | 2,383,137 |
Fidelity Growth Company Fund | 4,484,663 | 26,299 | 2,000,000 | - | 2,737,554 |
Fidelity Growth Discovery Fund | 7,535,082 | 6,630,076 | 1,000,000 | - | 14,046,195 |
Fidelity Health Care Portfolio | 80,076,772 | 49,844,563 | 19,307,967 | - | 119,179,412 |
Fidelity High Income Fund | 34,753,759 | 10,347,510 | 38,208 | 1,042,229 | 45,594,054 |
Fidelity Independence Fund | 2,166,780 | 29,600,000 | 2,000,000 | - | 30,328,485 |
Fidelity Industrial Equipment Portfolio | 36,454,898 | 3,068,672 | 8,000,000 | 81,152 | 29,341,027 |
Fidelity Industrials Portfolio | 79,138,311 | 21,258,316 | 8,103,453 | 121,267 | 90,956,026 |
Fidelity Institutional Prime Money Market Portfolio Class I | 193,114,698 | 58,827,442 | 26,260,648 | 10,359 | 225,681,493 |
Fidelity Insurance Portfolio | 34,275,979 | 1,843,590 | 601,927 | 91,133 | 34,683,462 |
Fidelity International Capital Appreciation Fund | 13,558,285 | 8,436,682 | 172,950 | - | 22,786,773 |
Fidelity International Discovery Fund | 155,124,844 | 12,655,226 | 12,777,154 | - | 157,465,200 |
Fidelity International Growth Fund | 5,481,822 | - | - | - | 5,589,117 |
Fidelity International Real Estate Fund | 149,401 | - | - | - | 161,447 |
Fidelity International Small Cap Fund | 28,772,812 | - | 14,729,505 | - | 14,473,035 |
Fidelity International Small Cap Opportunities Fund | 16,795,337 | 14,321,315 | 2,288,170 | - | 30,404,760 |
Fidelity International Value Fund | 10,637,089 | - | 185,013 | - | 10,691,430 |
Fidelity IT Services Portfolio | 17,782,991 | 824,433 | 13,453,360 | - | 4,396,790 |
Fidelity Japan Fund | 2,179,850 | - | - | - | 2,203,386 |
Fidelity Japan Smaller Companies Fund | 31,243,206 | - | 18,176,000 | - | 12,629,512 |
Fidelity Large Cap Stock Fund | 53,850,480 | 28,813,837 | 331,186 | 261,289 | 84,473,199 |
Fidelity Latin America Fund | 20,172 | - | - | - | 21,243 |
Fidelity Leisure Portfolio | 3,477,945 | 107,279 | - | 9,767 | 3,578,849 |
Fidelity Leveraged Company Stock Fund | 33,485 | - | - | - | 35,886 |
Fidelity Low-Priced Stock Fund | 3,231,719 | - | 3,200,000 | - | 55,198 |
Fidelity Magellan Fund | 11,241 | 701 | - | 22 | 11,994 |
Fidelity Materials Portfolio | 5,958,829 | 7,560,952 | - | 10,576 | 14,003,379 |
Fidelity Medical Delivery Portfolio | 7,453,627 | 295,080 | - | - | 7,993,350 |
Fidelity Medical Equipment and Systems Portfolio | 547,281 | 29,983 | - | - | 617,064 |
Fidelity Mega Cap Stock Fund | 54,268,895 | 18,998,063 | 28,409,704 | - | 47,563,782 |
Fidelity Mid Cap Value Fund | 473,960 | 10,171 | - | 147 | 514,876 |
Fidelity Mid-Cap Stock Fund | 927,714 | 18,100 | 700,000 | - | 269,878 |
Fidelity Multimedia Portfolio | 30,727,011 | 439,727 | 4,400,000 | 1,941 | 26,986,378 |
Fidelity Nasdaq Composite Index Fund | 581,474 | 274 | - | - | 616,795 |
Fidelity Natural Gas Portfolio | 224,625 | 2,000,434 | - | 202 | 2,274,313 |
Fidelity Natural Resources Portfolio | 131,404 | 798 | - | 14 | 155,404 |
Fidelity New Markets Income Fund | 7,301,936 | 13,873,704 | 35,214 | 251,993 | 22,010,237 |
Fidelity New Millennium Fund | 24,710,327 | 48,125,273 | 558,517 | - | 76,016,058 |
Fidelity Nordic Fund | 7,476,087 | 9,320,305 | - | - | 18,191,407 |
Fidelity OTC Portfolio | 24,811,439 | 10,063,712 | 16,575,043 | - | 19,307,786 |
Fidelity Overseas Fund | 2,115,407 | 53,522,454 | - | - | 57,420,129 |
Fidelity Pacific Basin Fund | 9,414,498 | - | - | - | 9,911,431 |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Pharmaceuticals Portfolio | $ 25,515,323 | $ 4,944,603 | $ 56,887 | $ 113,974 | $ 33,106,906 |
Fidelity Real Estate Income Fund | 107,384 | 15,396,581 | - | 158,483 | 15,649,746 |
Fidelity Real Estate Investment Portfolio | 159,956 | 5,754,462 | - | 24,210 | 6,005,574 |
Fidelity Retailing Portfolio | 11,338,726 | 449,193 | 81,602 | 3,087 | 10,887,005 |
Fidelity Select Money Market Portfolio | 10,214,841 | 1,330 | - | 513 | 10,216,172 |
Fidelity Series Commodity Strategy Fund | 8,628 | - | - | - | 9,206 |
Fidelity Small Cap Discovery Fund | 27,965,478 | 156,324 | 23,979,004 | 2,328 | 3,606,000 |
Fidelity Small Cap Growth Fund | 96,130 | - | - | - | 97,676 |
Fidelity Small Cap Stock Fund | 185,291 | 17,750 | - | 549 | 194,264 |
Fidelity Small Cap Value Fund | 195,636 | - | - | - | 203,056 |
Fidelity Software and Computer Services Portfolio | 78,372,926 | 8,925,015 | 11,171,770 | - | 75,399,666 |
Fidelity Stock Selector Large Cap Value Fund | 504,762 | 13,338,764 | - | - | 14,142,601 |
Fidelity Technology Portfolio | 42,452,935 | 29,346,548 | 158,417 | - | 70,939,106 |
Fidelity Telecom and Utilities Fund | 216,526 | 3,984 | - | 3,984 | 246,660 |
Fidelity Telecommunications Portfolio | 13,450,208 | 2,084,240 | 3,912,050 | 199,977 | 11,799,038 |
Fidelity Transportation Portfolio | 16,686,513 | 3,465,870 | - | 28,410 | 22,361,669 |
Fidelity Utilities Portfolio | 6,386,832 | 4,995,495 | 3,966,717 | 12,503 | 7,980,948 |
Fidelity Value Discovery Fund | - | 10,325,069 | - | - | 10,439,528 |
Fidelity Value Fund | 18,208,133 | 14,578,998 | - | - | 35,209,004 |
Fidelity Value Strategies Fund | 11,986 | - | - | - | 12,694 |
Spartan 500 Index Fund Investor Class | 193,825 | 844 | - | 844 | 207,562 |
Spartan Extended Market Index Fund Investor Class | 8,509,059 | 43,841 | 5,940,000 | 5,821 | 2,974,846 |
Spartan International Index Fund Investor Class | 87,515,519 | 6,526,285 | 233,377 | 573,055 | 97,526,834 |
Spartan Total Market Index Fund Investor Class | 8,789,820 | 11,527 | 5,925,000 | 11,527 | 3,117,732 |
Spartan U.S. Bond Index Fund Investor Class | 1,153,386,318 | 349,470,167 | 1,156,161 | 15,828,797 | 1,535,405,286 |
VIP Mid Cap Portfolio Investor Class | 358,602 | 5,569 | - | - | 376,799 |
Total | $ 3,409,094,847 | $ 1,191,566,166 | $ 392,100,354 | $ 20,985,424 | $ 4,321,918,476 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 50% Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $3,904,279,496) - See accompanying schedule | | $ 4,321,918,476 |
Receivable for investments sold | | 26,817,352 |
Receivable for fund shares sold | | 7,811,320 |
Total assets | | 4,356,547,148 |
| | |
Liabilities | | |
Payable for investments purchased | $ 34,792,157 | |
Payable for fund shares redeemed | 31,529 | |
Accrued management fee | 704,548 | |
Distribution and service plan fees payable | 11,480 | |
Total liabilities | | 35,539,714 |
| | |
Net Assets | | $ 4,321,007,434 |
Net Assets consist of: | | |
Paid in capital | | $ 3,814,851,475 |
Undistributed net investment income | | 17,087,994 |
Accumulated undistributed net realized gain (loss) on investments | | 71,428,985 |
Net unrealized appreciation (depreciation) on investments | | 417,638,980 |
Net Assets | | $ 4,321,007,434 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($91,289 ÷ 7,285 shares) | | $ 12.53 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($92,103,341 ÷ 7,376,716 shares) | | $ 12.49 |
| | |
Investor Class:
Net Asset Value, offering price and redemption price per share ($4,228,812,804 ÷ 337,519,257 shares) | | $ 12.53 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 50% Portfolio
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 20,985,424 |
| | |
Expenses | | |
Management fee | $ 4,780,998 | |
Distribution and service plan fees | 112,858 | |
Independent trustees' compensation | 7,052 | |
Total expenses before reductions | 4,900,908 | |
Expense reductions | (1,003,478) | 3,897,430 |
Net investment income (loss) | | 17,087,994 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | 30,069,980 | |
Capital gain distributions from underlying funds | 43,195,224 | |
Total net realized gain (loss) | | 73,265,204 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 83,287,837 |
Net gain (loss) | | 156,553,041 |
Net increase (decrease) in net assets resulting from operations | | $ 173,641,035 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 17,087,994 | $ 31,722,891 |
Net realized gain (loss) | 73,265,204 | 77,920,322 |
Change in net unrealized appreciation (depreciation) | 83,287,837 | 222,867,946 |
Net increase (decrease) in net assets resulting from operations | 173,641,035 | 332,511,159 |
Distributions to shareholders from net investment income | - | (31,865,189) |
Distributions to shareholders from net realized gain | (2,690,573) | (18,085,537) |
Total distributions | (2,690,573) | (49,950,726) |
Share transactions - net increase (decrease) | 741,521,831 | 1,696,818,975 |
Total increase (decrease) in net assets | 912,472,293 | 1,979,379,408 |
| | |
Net Assets | | |
Beginning of period | 3,408,535,141 | 1,429,155,733 |
End of period (including undistributed net investment income of $17,087,994 and undistributed net investment income of $0, respectively) | $ 4,321,007,434 | $ 3,408,535,141 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.01 | $ 10.62 | $ 9.78 | $ 10.02 | $ 9.11 | $ 7.80 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .05 | .15 | .18 | .19 | .17 | .17 |
Net realized and unrealized gain (loss) | .48 | 1.42 | .82 | (.23) | .91 | 1.30 |
Total from investment operations | .53 | 1.57 | 1.00 | (.04) | 1.08 | 1.47 |
Distributions from net investment income | - | (.12) | (.13) | (.18) | (.16) | (.15) |
Distributions from net realized gain | (.01) | (.07) | (.03) | (.02) | (.02) | (.01) |
Total distributions | (.01) | (.18)I | (.16) | (.20) | (.17)H | (.16) |
Net asset value, end of period | $ 12.53 | $ 12.01 | $ 10.62 | $ 9.78 | $ 10.02 | $ 9.11 |
Total ReturnB, C, D | 4.41% | 14.79% | 10.24% | (.42)% | 11.89% | 18.82% |
Ratios to Average Net AssetsF, G | | | | | | |
Expenses before reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | .89%A | 1.33% | 1.77% | 1.84% | 1.78% | 2.07% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 91 | $ 80 | $ 72 | $ 59 | $ 62 | $ 58 |
Portfolio turnover rateF | 20%A | 15% | 15% | 14% | 16% | 44% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.17 per share is comprised of distributions from net investment income of $.155 and distributions from net realized gain of $.018 per share.
I Total distributions of $.18 per share is comprised of distributions from net investment income of $.115 and distributions from net realized gain of $.065 per share.
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.98 | $ 10.59 | $ 9.75 | $ 10.01 | $ 9.10 | $ 7.79 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .05 | .13 | .17 | .17 | .15 | .16 |
Net realized and unrealized gain (loss) | .47 | 1.42 | .82 | (.24) | .92 | 1.30 |
Total from investment operations | .52 | 1.55 | .99 | (.07) | 1.07 | 1.46 |
Distributions from net investment income | - | (.10) | (.12) | (.17) | (.14) | (.14) |
Distributions from net realized gain | (.01) | (.07) | (.03) | (.02) | (.02) | (.01) |
Total distributions | (.01) | (.16)H | (.15) | (.19) | (.16) | (.15) |
Net asset value, end of period | $ 12.49 | $ 11.98 | $ 10.59 | $ 9.75 | $ 10.01 | $ 9.10 |
Total ReturnB, C, D | 4.34% | 14.66% | 10.12% | (.68)% | 11.75% | 18.76% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .50%A | .50% | .50% | .50% | .50% | .50% |
Expenses net of fee waivers, if any | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of all reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Net investment income (loss) | .75%A | 1.18% | 1.62% | 1.69% | 1.63% | 1.92% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 92,103 | $ 89,164 | $ 81,647 | $ 17,800 | $ 1,030 | $ 550 |
Portfolio turnover rateF | 20%A | 15% | 15% | 14% | 16% | 44% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.16 per share is comprised of distributions from net investment income of $.097 and distributions from net realized gain of $.065 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Investor Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.01 | $ 10.61 | $ 9.78 | $ 10.02 | $ 9.11 | $ 7.79 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .05 | .15 | .18 | .19 | .17 | .17 |
Net realized and unrealized gain (loss) | .48 | 1.43 | .81 | (.23) | .91 | 1.31 |
Total from investment operations | .53 | 1.58 | .99 | (.04) | 1.08 | 1.48 |
Distributions from net investment income | - | (.12) | (.13) | (.18) | (.16) | (.15) |
Distributions from net realized gain | (.01) | (.07) | (.03) | (.02) | (.02) | (.01) |
Total distributions | (.01) | (.18)I | (.16) | (.20) | (.17)H | (.16) |
Net asset value, end of period | $ 12.53 | $ 12.01 | $ 10.61 | $ 9.78 | $ 10.02 | $ 9.11 |
Total ReturnB, C, D | 4.41% | 14.90% | 10.13% | (.42)% | 11.89% | 18.98% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .25%A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | .90%A | 1.33% | 1.77% | 1.84% | 1.78% | 2.07% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 4,228,813 | $ 3,319,291 | $ 1,347,437 | $ 747,577 | $ 671,632 | $ 520,243 |
Portfolio turnover rateF | 20%A | 15% | 15% | 14% | 16% | 44% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.17 per share is comprised of distributions from net investment income of $.155 and distributions from net realized gain of $.018 per share.
I Total distributions of $.18 per share is comprised of distributions from net investment income of $.115 and distributions from net realized gain of $.065 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 60% Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
Fidelity Air Transportation Portfolio | 0.3 | 0.2 |
Fidelity Automotive Portfolio | 0.2 | 0.3 |
Fidelity Banking Portfolio | 2.3 | 2.3 |
Fidelity Biotechnology Portfolio | 0.1 | 0.4 |
Fidelity Blue Chip Growth Fund | 0.2 | 0.1 |
Fidelity Blue Chip Value Fund | 0.1 | 0.0 |
Fidelity Brokerage and Investment Management Portfolio | 0.9 | 1.2 |
Fidelity Capital Appreciation Fund | 0.0* | 0.2 |
Fidelity Chemicals Portfolio | 1.6 | 0.6 |
Fidelity Communications Equipment Portfolio | 0.3 | 0.3 |
Fidelity Computers Portfolio | 1.4 | 1.5 |
Fidelity Construction and Housing Portfolio | 0.6 | 0.7 |
Fidelity Consumer Discretionary Portfolio | 2.5 | 2.7 |
Fidelity Consumer Finance Portfolio | 0.3 | 0.8 |
Fidelity Consumer Staples Portfolio | 2.7 | 3.1 |
Fidelity Contrafund | 0.0* | 0.0* |
Fidelity Defense and Aerospace Portfolio | 0.0* | 0.0* |
Fidelity Disciplined Equity Fund | 0.0* | 0.0* |
Fidelity Dividend Growth Fund | 0.0* | 0.0* |
Fidelity Electronics Portfolio | 0.9 | 0.4 |
Fidelity Energy Portfolio | 3.5 | 2.2 |
Fidelity Energy Service Portfolio | 1.6 | 1.1 |
Fidelity Environmental and Alternative Energy Portfolio | 0.0* | 0.0* |
Fidelity Equity Dividend Income Fund | 0.0* | 0.0* |
Fidelity Equity-Income Fund | 0.1 | 0.1 |
Fidelity Financial Services Portfolio | 3.3 | 2.5 |
Fidelity Fund | 0.0* | 0.0* |
Fidelity Global Commodity Stock Fund | 0.0* | 0.0* |
Fidelity Gold Portfolio | 0.0* | 0.0* |
Fidelity Growth & Income Portfolio | 0.0* | 0.0* |
Fidelity Growth Company Fund | 0.4 | 0.4 |
Fidelity Growth Discovery Fund | 0.3 | 0.2 |
Fidelity Health Care Portfolio | 4.2 | 4.6 |
Fidelity Independence Fund | 0.3 | 0.2 |
Fidelity Industrial Equipment Portfolio | 1.4 | 2.0 |
|
| % of fund's
net assets | % of fund's net assets
6 months ago |
Fidelity Industrials Portfolio | 2.9 | 3.3 |
Fidelity Insurance Portfolio | 1.1 | 1.9 |
Fidelity IT Services Portfolio | 0.0* | 1.3 |
Fidelity Large Cap Stock Fund | 1.2 | 1.1 |
Fidelity Leisure Portfolio | 0.3 | 0.3 |
Fidelity Leveraged Company Stock Fund | 0.0* | 0.0* |
Fidelity Low-Priced Stock Fund | 0.0* | 0.0* |
Fidelity Magellan Fund | 0.0* | 0.0* |
Fidelity Materials Portfolio | 0.4 | 0.1 |
Fidelity Medical Delivery Portfolio | 0.0* | 0.0* |
Fidelity Medical Equipment and Systems Portfolio | 0.0* | 0.0* |
Fidelity Mega Cap Stock Fund | 0.1 | 0.5 |
Fidelity Mid Cap Value Fund | 0.0* | 0.0* |
Fidelity Mid-Cap Stock Fund | 0.0* | 0.1 |
Fidelity Multimedia Portfolio | 0.7 | 0.8 |
Fidelity Natural Gas Portfolio | 0.0* | 0.0* |
Fidelity Natural Resources Portfolio | 0.1 | 0.1 |
Fidelity New Millennium Fund | 0.3 | 0.2 |
Fidelity OTC Portfolio | 0.4 | 0.8 |
Fidelity Pharmaceuticals Portfolio | 1.6 | 1.4 |
Fidelity Real Estate Investment Portfolio | 0.2 | 0.0* |
Fidelity Retailing Portfolio | 0.5 | 0.8 |
Fidelity Series Commodity Strategy Fund | 0.0* | 0.0* |
Fidelity Small Cap Discovery Fund | 0.0* | 0.1 |
Fidelity Small Cap Growth Fund | 0.0* | 0.0* |
Fidelity Small Cap Value Fund | 0.0* | 0.1 |
Fidelity Software and Computer Services Portfolio | 2.3 | 3.0 |
Fidelity Stock Selector All Cap Fund | 0.0* | 0.0* |
Fidelity Stock Selector Large Cap Value Fund | 0.0* | 0.0* |
Fidelity Technology Portfolio | 3.0 | 1.3 |
Fidelity Telecom and Utilities Fund | 0.0* | 0.0* |
Fidelity Telecommunications Portfolio | 0.4 | 0.9 |
Fidelity Transportation Portfolio | 0.5 | 0.3 |
Fidelity Utilities Portfolio | 0.5 | 0.4 |
Fidelity Value Discovery Fund | 0.0* | 0.0 |
Fidelity Value Fund | 0.1 | 0.0* |
Fidelity Value Strategies Fund | 0.0* | 0.0* |
Spartan 500 Index Fund Investor Class | 0.0* | 0.0* |
Spartan Total Market Index Fund Investor Class | 0.0* | 0.3 |
VIP Industrials Portfolio Investor Class | 0.0* | 0.0* |
VIP Mid Cap Portfolio Investor Class | 0.0* | 0.0* |
| 46.1 | 47.2 |
Fund Holdings as of June 30, 2014 - continued |
| % of fund's
net assets | % of fund's net assets
6 months ago |
International Equity Funds | | |
Fidelity Canada Fund | 0.0* | 0.0* |
Fidelity China Region Fund | 0.2 | 0.2 |
Fidelity Diversified International Fund | 2.9 | 3.5 |
Fidelity Emerging Asia Fund | 0.7 | 0.9 |
Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund | 0.0* | 0.0* |
Fidelity Emerging Markets Discovery Fund | 0.0* | 0.0* |
Fidelity Emerging Markets Fund | 0.2 | 0.4 |
Fidelity Europe Capital Appreciation Fund | 0.0 | 0.1 |
Fidelity Europe Fund | 0.9 | 0.2 |
Fidelity International Capital Appreciation Fund | 1.2 | 1.3 |
Fidelity International Discovery Fund | 4.2 | 6.1 |
Fidelity International Growth Fund | 0.4 | 0.4 |
Fidelity International Real Estate Fund | 0.0* | 0.0* |
Fidelity International Small Cap Fund | 0.4 | 0.5 |
Fidelity International Small Cap Opportunities Fund | 0.7 | 0.7 |
Fidelity International Value Fund | 0.4 | 0.4 |
Fidelity Japan Fund | 0.0* | 0.0* |
Fidelity Japan Smaller Companies Fund | 0.3 | 0.7 |
Fidelity Latin America Fund | 0.0* | 0.0* |
Fidelity Nordic Fund | 0.7 | 0.6 |
Fidelity Overseas Fund | 3.1 | 0.1 |
Fidelity Pacific Basin Fund | 0.7 | 0.6 |
Spartan International Index Fund Investor Class | 3.0 | 3.0 |
| 20.0 | 19.7 |
Fixed-Income Funds | | |
Fidelity Floating Rate High Income Fund | 1.5 | 1.6 |
Fidelity Focused High Income Fund | 0.4 | 0.4 |
Fidelity High Income Fund | 0.8 | 0.8 |
Fidelity New Markets Income Fund | 0.5 | 0.3 |
Fidelity Real Estate Income Fund | 0.3 | 0.0* |
Spartan U.S. Bond Index Fund Investor Class | 30.4 | 28.5 |
| 33.9 | 31.6 |
Money Market Funds | | |
Fidelity Institutional Prime Money Market Portfolio Class I | 0.0* | 1.5 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%
Asset Allocation (% of fund's net assets) |
As of June 30, 2014 |
| Domestic Equity Funds | 46.1% | |
| International Equity Funds | 20.0% | |
| Fixed-Income Funds | 33.9% | |
| Money Market Funds | 0.0%* | |
As of December 31, 2013 |
| Domestic Equity Funds | 47.2% | |
| International Equity Funds | 19.7% | |
| Fixed-Income Funds | 31.6% | |
| Money Market Funds | 1.5% | |
Semiannual Report
VIP FundsManager 60% Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Equity Funds - 66.1% |
| Shares | | Value |
Domestic Equity Funds - 46.1% |
Fidelity Air Transportation Portfolio (c) | 256,112 | | $ 16,747,132 |
Fidelity Automotive Portfolio (c) | 270,266 | | 14,648,418 |
Fidelity Banking Portfolio (c) | 5,704,318 | | 149,624,256 |
Fidelity Biotechnology Portfolio (c) | 16,235 | | 3,251,613 |
Fidelity Blue Chip Growth Fund (c) | 152,764 | | 10,374,190 |
Fidelity Blue Chip Value Fund (c) | 440,404 | | 6,817,457 |
Fidelity Brokerage and Investment Management Portfolio (c) | 832,340 | | 60,810,788 |
Fidelity Capital Appreciation Fund (c) | 13,239 | | 498,849 |
Fidelity Chemicals Portfolio (c) | 684,873 | | 104,710,195 |
Fidelity Communications Equipment Portfolio (c) | 511,709 | | 16,528,206 |
Fidelity Computers Portfolio (c) | 1,147,932 | | 89,802,746 |
Fidelity Construction and Housing Portfolio (c) | 734,966 | | 39,842,527 |
Fidelity Consumer Discretionary Portfolio (c) | 5,261,434 | | 168,471,130 |
Fidelity Consumer Finance Portfolio (c) | 1,276,879 | | 19,932,076 |
Fidelity Consumer Staples Portfolio (c) | 1,925,613 | | 178,850,923 |
Fidelity Contrafund (c) | 1,624 | | 161,280 |
Fidelity Defense and Aerospace Portfolio (c) | 17,440 | | 2,033,725 |
Fidelity Disciplined Equity Fund (c) | 32,851 | | 1,123,842 |
Fidelity Dividend Growth Fund (c) | 2,056 | | 77,522 |
Fidelity Electronics Portfolio (c) | 723,380 | | 56,322,392 |
Fidelity Energy Portfolio (c) | 3,720,578 | | 229,559,643 |
Fidelity Energy Service Portfolio (c) | 1,099,319 | | 107,975,127 |
Fidelity Environmental and Alternative Energy Portfolio (c) | 4,669 | | 112,936 |
Fidelity Equity Dividend Income Fund (c) | 5,236 | | 136,987 |
Fidelity Equity-Income Fund (c) | 80,831 | | 5,074,586 |
Fidelity Financial Services Portfolio (c) | 2,593,736 | | 218,548,217 |
Fidelity Fund (c) | 2,027 | | 92,070 |
Fidelity Global Commodity Stock Fund (c) | 13,776 | | 210,088 |
Fidelity Gold Portfolio (a)(c) | 28,629 | | 672,209 |
Fidelity Growth & Income Portfolio (c) | 33,921 | | 1,001,001 |
Fidelity Growth Company Fund (c) | 190,231 | | 24,138,367 |
Fidelity Growth Discovery Fund (c) | 860,905 | | 19,861,073 |
Fidelity Health Care Portfolio (c) | 1,353,711 | | 279,771,426 |
Fidelity Independence Fund (c) | 450,381 | | 18,091,800 |
Fidelity Industrial Equipment Portfolio (c) | 2,224,377 | | 95,425,772 |
Fidelity Industrials Portfolio (c) | 5,886,114 | | 194,418,340 |
Fidelity Insurance Portfolio (c) | 1,113,025 | | 74,149,745 |
Fidelity IT Services Portfolio (c) | 67,533 | | 2,466,305 |
Fidelity Large Cap Stock Fund (c) | 2,816,909 | | 79,014,296 |
Fidelity Leisure Portfolio (c) | 134,886 | | 17,896,695 |
Fidelity Leveraged Company Stock Fund (c) | 4,378 | | 202,871 |
Fidelity Low-Priced Stock Fund (c) | 10,808 | | 560,715 |
Fidelity Magellan Fund (c) | 648 | | 59,930 |
Fidelity Materials Portfolio (c) | 262,581 | | 23,146,505 |
Fidelity Medical Delivery Portfolio (c) | 1,095 | | 82,283 |
|
| Shares | | Value |
Fidelity Medical Equipment and Systems Portfolio (c) | 6,306 | | $ 240,447 |
Fidelity Mega Cap Stock Fund (c) | 459,120 | | 7,547,940 |
Fidelity Mid Cap Value Fund (c) | 6,341 | | 152,382 |
Fidelity Mid-Cap Stock Fund (c) | 35,297 | | 1,391,063 |
Fidelity Multimedia Portfolio (c) | 603,856 | | 49,455,844 |
Fidelity Natural Gas Portfolio (c) | 1,560 | | 71,999 |
Fidelity Natural Resources Portfolio (c) | 173,658 | | 7,534,999 |
Fidelity New Millennium Fund (c) | 442,077 | | 18,549,556 |
Fidelity OTC Portfolio (c) | 318,383 | | 26,304,810 |
Fidelity Pharmaceuticals Portfolio (c) | 4,900,355 | | 102,760,445 |
Fidelity Real Estate Investment Portfolio (c) | 348,777 | | 13,019,830 |
Fidelity Retailing Portfolio (c) | 405,352 | | 32,837,563 |
Fidelity Series Commodity Strategy Fund (a)(c) | 1,149 | | 9,713 |
Fidelity Small Cap Discovery Fund (c) | 37,607 | | 1,169,581 |
Fidelity Small Cap Growth Fund (c) | 11,672 | | 228,536 |
Fidelity Small Cap Value Fund (c) | 63,306 | | 1,316,772 |
Fidelity Software and Computer Services Portfolio (c) | 1,292,795 | | 151,968,037 |
Fidelity Stock Selector All Cap Fund (c) | 4,761 | | 182,883 |
Fidelity Stock Selector Large Cap Value Fund (c) | 47,425 | | 790,108 |
Fidelity Technology Portfolio (c) | 1,659,571 | | 201,156,576 |
Fidelity Telecom and Utilities Fund (c) | 4,442 | | 109,452 |
Fidelity Telecommunications Portfolio (c) | 427,024 | | 26,223,550 |
Fidelity Transportation Portfolio (c) | 411,304 | | 34,187,563 |
Fidelity Utilities Portfolio (c) | 388,425 | | 30,203,914 |
Fidelity Value Discovery Fund (c) | 99,909 | | 2,353,862 |
Fidelity Value Fund (c) | 84,213 | | 9,532,887 |
Fidelity Value Strategies Fund (c) | 19,678 | | 853,432 |
Spartan 500 Index Fund Investor Class (c) | 2,347 | | 163,867 |
Spartan Total Market Index Fund Investor Class (c) | 8,144 | | 469,920 |
VIP Industrials Portfolio Investor Class (c) | 83,846 | | 1,891,574 |
VIP Mid Cap Portfolio Investor Class (c) | 6,346 | | 237,849 |
TOTAL DOMESTIC EQUITY FUNDS | | 3,056,215,208 |
International Equity Funds - 20.0% |
Fidelity Canada Fund (c) | 2,342 | | 150,706 |
Fidelity China Region Fund (c) | 395,635 | | 13,372,451 |
Fidelity Diversified International Fund (c) | 5,090,672 | | 193,649,170 |
Fidelity Emerging Asia Fund (c) | 1,526,912 | | 49,899,499 |
Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund (c) | 73,398 | | 703,155 |
Fidelity Emerging Markets Discovery Fund (c) | 7,343 | | 93,775 |
Fidelity Emerging Markets Fund (c) | 577,377 | | 14,861,691 |
Fidelity Europe Fund (c) | 1,467,991 | | 59,336,205 |
Fidelity International Capital Appreciation Fund (c) | 4,690,834 | | 81,901,956 |
Fidelity International Discovery Fund (c) | 6,777,791 | | 279,109,422 |
Fidelity International Growth Fund (c) | 2,291,361 | | 26,258,992 |
Equity Funds - continued |
| Shares | | Value |
International Equity Funds - continued |
Fidelity International Real Estate Fund (c) | 18,781 | | $ 206,401 |
Fidelity International Small Cap Fund (c) | 870,469 | | 24,068,477 |
Fidelity International Small Cap Opportunities Fund (c) | 2,992,244 | | 44,614,354 |
Fidelity International Value Fund (c) | 2,885,288 | | 26,717,768 |
Fidelity Japan Fund (c) | 32,165 | | 391,452 |
Fidelity Japan Smaller Companies Fund (c) | 1,602,724 | | 21,829,104 |
Fidelity Latin America Fund (c) | 3,591 | | 118,178 |
Fidelity Nordic Fund (c) | 953,248 | | 46,642,419 |
Fidelity Overseas Fund (c) | 4,876,074 | | 204,112,440 |
Fidelity Pacific Basin Fund (c) | 1,516,635 | | 44,164,401 |
Spartan International Index Fund Investor Class (c) | 4,635,732 | | 196,462,340 |
TOTAL INTERNATIONAL EQUITY FUNDS | | 1,328,664,356 |
TOTAL EQUITY FUNDS (Cost $3,215,533,526) |
4,384,879,564
|
Fixed-Income Funds - 33.9% |
| | | |
Fidelity Floating Rate High Income Fund (c) | 10,119,086 | | 101,089,666 |
Fidelity Focused High Income Fund (c) | 3,117,597 | | 28,307,779 |
|
| Shares | | Value |
Fidelity High Income Fund (c) | 5,468,282 | | $ 51,948,678 |
Fidelity New Markets Income Fund (c) | 2,060,859 | | 34,643,043 |
Fidelity Real Estate Income Fund (c) | 1,784,178 | | 21,320,930 |
Spartan U.S. Bond Index Fund Investor Class (c) | 172,919,129 | | 2,016,237,038 |
TOTAL FIXED-INCOME FUNDS (Cost $2,204,699,987) |
2,253,547,134
|
Money Market Funds - 0.0% |
| | | |
Fidelity Institutional Prime Money Market Portfolio Class I 0.01% (b)(c)
(Cost $1,213,572) | 1,213,572 | |
1,213,572
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $5,421,447,085) | 6,639,640,270 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | (1,404,502) |
NET ASSETS - 100% | $ 6,638,235,768 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. |
(c) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Air Transportation Portfolio | $ 10,764,473 | $ 4,918,251 | $ - | $ 4,901 | $ 16,747,132 |
Fidelity Automotive Portfolio | 18,179,192 | 5,213,143 | 8,339,165 | 9,015 | 14,648,418 |
Fidelity Banking Portfolio | 147,319,936 | 14,787,364 | 12,310,304 | 404,279 | 149,624,256 |
Fidelity Biotechnology Portfolio | 28,405,668 | - | 27,200,508 | - | 3,251,613 |
Fidelity Blue Chip Growth Fund | 4,708,772 | 5,087,163 | - | - | 10,374,190 |
Fidelity Blue Chip Value Fund | - | 6,512,850 | - | - | 6,817,457 |
Fidelity Brokerage and Investment Management Portfolio | 73,888,782 | 2,241,630 | 13,610,000 | 104,283 | 60,810,788 |
Fidelity Canada Fund | 136,581 | - | - | - | 150,706 |
Fidelity Capital Appreciation Fund | 11,917,558 | - | 11,500,000 | - | 498,849 |
Fidelity Chemicals Portfolio | 40,783,175 | 60,639,745 | - | 142,269 | 104,710,195 |
Fidelity China Region Fund | 15,550,971 | - | 2,000,000 | - | 13,372,451 |
Fidelity Communications Equipment Portfolio | 16,318,255 | 615,750 | 1,800,000 | 1,969 | 16,528,206 |
Fidelity Computers Portfolio | 98,615,097 | 2,596,694 | 16,221,888 | 152,639 | 89,802,746 |
Fidelity Construction and Housing Portfolio | 44,329,023 | 1,962,671 | 6,131,549 | 36,537 | 39,842,527 |
Fidelity Consumer Discretionary Portfolio | 172,689,100 | 8,510,465 | 7,523,481 | 45,534 | 168,471,130 |
Fidelity Consumer Finance Portfolio | 53,450,391 | 2,168,451 | 33,911,413 | 69,986 | 19,932,076 |
Fidelity Consumer Staples Portfolio | 196,574,068 | 5,651,620 | 28,000,000 | 476,599 | 178,850,923 |
Fidelity Contrafund | 1,572,407 | 92,708 | 1,487,019 | - | 161,280 |
Fidelity Defense and Aerospace Portfolio | 2,044,728 | 82,100 | - | 3,493 | 2,033,725 |
Fidelity Disciplined Equity Fund | 2,473,524 | 69,421 | 1,500,000 | - | 1,123,842 |
Fidelity Diversified International Fund | 224,553,670 | 53,035,554 | 87,632,182 | - | 193,649,170 |
Fidelity Dividend Growth Fund | 72,753 | - | - | - | 77,522 |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Electronics Portfolio | $ 24,715,566 | $ 24,455,556 | $ - | $ 29,954 | $ 56,322,392 |
Fidelity Emerging Asia Fund | 57,559,606 | 255,286 | 10,579,582 | - | 49,899,499 |
Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund | 1,382,302 | - | 660,000 | - | 703,155 |
Fidelity Emerging Markets Discovery Fund | 359,944 | - | 250,000 | - | 93,775 |
Fidelity Emerging Markets Fund | 23,963,217 | 5,425,273 | 14,274,718 | - | 14,861,691 |
Fidelity Energy Portfolio | 140,836,028 | 100,049,393 | 30,450,113 | 286,456 | 229,559,643 |
Fidelity Energy Service Portfolio | 69,577,784 | 41,004,052 | 16,374,833 | 21,614 | 107,975,127 |
Fidelity Environmental and Alternative Energy Portfolio | 106,450 | 135 | - | 14 | 112,936 |
Fidelity Equity Dividend Income Fund | 127,712 | 1,265 | - | 1,265 | 136,987 |
Fidelity Equity-Income Fund | 5,075,546 | 5,812,686 | 6,065,669 | 16,974 | 5,074,586 |
Fidelity Europe Capital Appreciation Fund | 6,923,174 | 5,411,555 | - | 111,555 | - |
Fidelity Europe Fund | 12,017,140 | 33,503,892 | 349,790 | - | 59,336,205 |
Fidelity Financial Services Portfolio | 161,662,533 | 59,952,738 | 9,957,524 | 275,344 | 218,548,217 |
Fidelity Floating Rate High Income Fund | 104,825,906 | 2,189,404 | 6,233,421 | 1,715,512 | 101,089,666 |
Fidelity Focused High Income Fund | 27,123,038 | 944,171 | - | 615,751 | 28,307,779 |
Fidelity Fund | 86,455 | - | - | - | 92,070 |
Fidelity Global Commodity Stock Fund | 194,659 | - | - | - | 210,088 |
Fidelity Gold Portfolio | 514,463 | - | - | - | 672,209 |
Fidelity Growth & Income Portfolio | 941,193 | 3,851 | - | 3,851 | 1,001,001 |
Fidelity Growth Company Fund | 27,369,829 | 160,502 | 5,000,000 | - | 24,138,367 |
Fidelity Growth Discovery Fund | 14,681,938 | 3,791,868 | - | - | 19,861,073 |
Fidelity Health Care Portfolio | 291,730,709 | 41,368,918 | 81,195,899 | - | 279,771,426 |
Fidelity High Income Fund | 49,170,122 | 2,572,566 | 487,977 | 1,316,140 | 51,948,678 |
Fidelity Independence Fund | 14,495,781 | 2,000,000 | - | - | 18,091,800 |
Fidelity Industrial Equipment Portfolio | 125,402,020 | 11,525,162 | 34,070,000 | 277,020 | 95,425,772 |
Fidelity Industrials Portfolio | 214,260,968 | 18,836,672 | 35,404,527 | 285,817 | 194,418,340 |
Fidelity Institutional Prime Money Market Portfolio Class I | 94,885,114 | 22,745,835 | 116,417,377 | 3,047 | 1,213,572 |
Fidelity Insurance Portfolio | 122,254,346 | 4,008,490 | 48,455,262 | 198,145 | 74,149,745 |
Fidelity International Capital Appreciation Fund | 81,026,362 | 4,658,042 | 7,026,038 | - | 81,901,956 |
Fidelity International Discovery Fund | 390,190,103 | 13,034,074 | 124,638,630 | - | 279,109,422 |
Fidelity International Growth Fund | 25,754,892 | - | - | - | 26,258,992 |
Fidelity International Real Estate Fund | 191,001 | - | - | - | 206,401 |
Fidelity International Small Cap Fund | 30,534,602 | - | 7,219,182 | - | 24,068,477 |
Fidelity International Small Cap Opportunities Fund | 44,133,986 | 1,503,183 | 3,974,775 | - | 44,614,354 |
Fidelity International Value Fund | 29,031,726 | - | 2,881,167 | - | 26,717,768 |
Fidelity IT Services Portfolio | 81,216,571 | 135,351 | 78,230,613 | - | 2,466,305 |
Fidelity Japan Fund | 387,270 | - | - | - | 391,452 |
Fidelity Japan Smaller Companies Fund | 47,067,969 | - | 23,937,352 | - | 21,829,104 |
Fidelity Large Cap Stock Fund | 71,512,561 | 8,228,561 | 2,897,490 | 250,599 | 79,014,296 |
Fidelity Latin America Fund | 112,217 | - | - | - | 118,178 |
Fidelity Leisure Portfolio | 20,067,012 | 618,976 | 2,600,000 | 56,353 | 17,896,695 |
Fidelity Leveraged Company Stock Fund | 189,299 | - | - | - | 202,871 |
Fidelity Low-Priced Stock Fund | 534,560 | - | - | - | 560,715 |
Fidelity Magellan Fund | 56,164 | 3,504 | - | 108 | 59,930 |
Fidelity Materials Portfolio | 4,691,227 | 17,709,325 | - | 16,926 | 23,146,505 |
Fidelity Medical Delivery Portfolio | 76,727 | 3,038 | - | - | 82,283 |
Fidelity Medical Equipment and Systems Portfolio | 213,255 | 11,683 | - | - | 240,447 |
Fidelity Mega Cap Stock Fund | 34,834,919 | 1,599,169 | 29,257,453 | - | 7,547,940 |
Fidelity Mid Cap Value Fund | 140,273 | 3,010 | - | 43 | 152,382 |
Fidelity Mid-Cap Stock Fund | 3,229,902 | 93,296 | 2,000,000 | - | 1,391,063 |
Fidelity Multimedia Portfolio | 48,013,216 | 805,854 | - | 3,558 | 49,455,844 |
Fidelity Natural Gas Portfolio | 58,865 | 114 | - | 53 | 71,999 |
Fidelity Natural Resources Portfolio | 6,371,293 | 38,677 | - | 691 | 7,534,999 |
Fidelity New Markets Income Fund | 17,303,042 | 24,266,733 | 8,000,000 | 399,644 | 34,643,043 |
Fidelity New Millennium Fund | 11,086,536 | 12,213,774 | 5,853,892 | - | 18,549,556 |
Fidelity Nordic Fund | 37,784,319 | 4,923,538 | - | - | 46,642,419 |
Fidelity OTC Portfolio | 50,885,898 | 8,411,269 | 33,629,932 | - | 26,304,810 |
Fidelity Overseas Fund | 4,390,551 | 190,600,749 | - | - | 204,112,440 |
Fidelity Pacific Basin Fund | 41,950,114 | - | - | - | 44,164,401 |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Pharmaceuticals Portfolio | $ 89,429,800 | $ 14,515,461 | $ 10,268,365 | $ 357,299 | $ 102,760,445 |
Fidelity Real Estate Income Fund | 250,381 | 20,856,662 | - | 217,982 | 21,320,930 |
Fidelity Real Estate Investment Portfolio | 146,129 | 12,768,086 | - | 53,573 | 13,019,830 |
Fidelity Retailing Portfolio | 51,886,791 | 2,036,160 | 17,312,013 | 13,994 | 32,837,563 |
Fidelity Series Commodity Strategy Fund | 9,103 | - | - | - | 9,713 |
Fidelity Small Cap Discovery Fund | 5,181,827 | 50,703 | 3,950,000 | 755 | 1,169,581 |
Fidelity Small Cap Growth Fund | 224,917 | - | - | - | 228,536 |
Fidelity Small Cap Value Fund | 9,305,485 | - | 7,700,000 | - | 1,316,772 |
Fidelity Software and Computer Services Portfolio | 194,510,796 | 8,520,472 | 49,217,300 | - | 151,968,037 |
Fidelity Stock Selector All Cap Fund | 169,456 | - | - | - | 182,883 |
Fidelity Stock Selector Large Cap Value Fund | 444,559 | 300,625 | - | - | 790,108 |
Fidelity Technology Portfolio | 82,140,436 | 133,501,241 | 9,846,288 | - | 201,156,576 |
Fidelity Telecom and Utilities Fund | 96,081 | 1,768 | - | 1,768 | 109,452 |
Fidelity Telecommunications Portfolio | 57,398,659 | 675,025 | 31,783,827 | 527,157 | 26,223,550 |
Fidelity Transportation Portfolio | 16,588,194 | 15,219,099 | - | 32,173 | 34,187,563 |
Fidelity Utilities Portfolio | 22,621,725 | 22,121,666 | 16,162,025 | 34,411 | 30,203,914 |
Fidelity Value Discovery Fund | - | 2,321,995 | - | - | 2,353,862 |
Fidelity Value Fund | 1,989,757 | 7,241,380 | 142,142 | - | 9,532,887 |
Fidelity Value Strategies Fund | 805,811 | - | - | - | 853,432 |
Spartan 500 Index Fund Investor Class | 153,021 | 666 | - | 666 | 163,867 |
Spartan International Index Fund Investor Class | 190,324,702 | 1,565,943 | 3,302,895 | 1,228,450 | 196,462,340 |
Spartan Total Market Index Fund Investor Class | 17,048,656 | 1,162 | 16,800,000 | 1,162 | 469,920 |
Spartan U.S. Bond Index Fund Investor Class | 1,828,631,075 | 168,320,575 | 29,764,819 | 22,590,502 | 2,016,237,038 |
VIP Industrials Portfolio Investor Class | 1,818,755 | 30,656 | - | - | 1,891,574 |
VIP Mid Cap Portfolio Investor Class | 226,362 | 3,516 | - | - | 237,849 |
Total | $ 6,411,030,577 | $ 1,259,119,631 | $ 1,203,790,399 | $ 32,397,830 | $ 6,639,640,270 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 60% Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $5,421,447,085) - See accompanying schedule | | $ 6,639,640,270 |
Receivable for investments sold | | 50,071,099 |
Receivable for fund shares sold | | 657,475 |
Total assets | | 6,690,368,844 |
| | |
Liabilities | | |
Payable for investments purchased | $ 49,862,097 | |
Payable for fund shares redeemed | 1,121,671 | |
Accrued management fee | 1,097,944 | |
Distribution and service plan fees payable | 51,364 | |
Total liabilities | | 52,133,076 |
| | |
Net Assets | | $ 6,638,235,768 |
Net Assets consist of: | | |
Paid in capital | | $ 5,158,490,513 |
Undistributed net investment income | | 25,650,444 |
Accumulated undistributed net realized gain (loss) on investments | | 235,901,626 |
Net unrealized appreciation (depreciation) on investments | | 1,218,193,185 |
Net Assets | | $ 6,638,235,768 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($78,806 ÷ 6,479 shares) | | $ 12.16 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($415,780,781 ÷ 34,269,004 shares) | | $ 12.13 |
| | |
Investor Class:
Net Asset Value, offering price and redemption price per share ($6,222,376,181 ÷ 511,691,203 shares) | | $ 12.16 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 60% Portfolio
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 32,397,830 |
| | |
Expenses | | |
Management fee | $ 8,054,613 | |
Distribution and service plan fees | 490,129 | |
Independent trustees' compensation | 12,300 | |
Total expenses before reductions | 8,557,042 | |
Expense reductions | (1,809,656) | 6,747,386 |
Net investment income (loss) | | 25,650,444 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | 135,001,236 | |
Capital gain distributions from underlying funds | 104,086,958 | |
Total net realized gain (loss) | | 239,088,194 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 38,279,230 |
Net gain (loss) | | 277,367,424 |
Net increase (decrease) in net assets resulting from operations | | $ 303,017,868 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 25,650,444 | $ 69,567,341 |
Net realized gain (loss) | 239,088,194 | 286,200,950 |
Change in net unrealized appreciation (depreciation) | 38,279,230 | 658,777,682 |
Net increase (decrease) in net assets resulting from operations | 303,017,868 | 1,014,545,973 |
Distributions to shareholders from net investment income | - | (69,509,916) |
Distributions to shareholders from net realized gain | (110,414,374) | (222,348,021) |
Total distributions | (110,414,374) | (291,857,937) |
Share transactions - net increase (decrease) | 35,694,288 | 157,204,419 |
Total increase (decrease) in net assets | 228,297,782 | 879,892,455 |
| | |
Net Assets | | |
Beginning of period | 6,409,937,986 | 5,530,045,531 |
End of period (including undistributed net investment income of $25,650,444 and undistributed net investment income of $0, respectively) | $ 6,638,235,768 | $ 6,409,937,986 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.81 | $ 10.44 | $ 9.53 | $ 9.88 | $ 8.83 | $ 7.32 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .05 | .13 | .15 | .18 | .16 | .15 |
Net realized and unrealized gain (loss) | .50 | 1.80 | .94 | (.37) | 1.03 | 1.51 |
Total from investment operations | .55 | 1.93 | 1.09 | (.19) | 1.19 | 1.66 |
Distributions from net investment income | - | (.13) | (.15) | (.14) | (.12) | (.13) |
Distributions from net realized gain | (.20) | (.43) | (.03) | (.02) | (.02) | (.01) |
Total distributions | (.20) | (.56) | (.18) | (.16) | (.14) | (.15)H |
Net asset value, end of period | $ 12.16 | $ 11.81 | $ 10.44 | $ 9.53 | $ 9.88 | $ 8.83 |
Total ReturnB, C, D | 4.77% | 18.62% | 11.48% | (1.92)% | 13.49% | 22.61% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | .80%A | 1.18% | 1.51% | 1.77% | 1.77% | 1.89% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 79 | $ 75 | $ 66 | $ 58 | $ 60 | $ 52 |
Portfolio turnover rateF | 37%A | 21% | 19% | 9% | 10% | 38% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.15 per share is comprised of distributions from net investment income of $.134 and distributions from net realized gain of $.012 per share.
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.79 | $ 10.43 | $ 9.52 | $ 9.88 | $ 8.83 | $ 7.33 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .04 | .12 | .14 | .16 | .15 | .14 |
Net realized and unrealized gain (loss) | .50 | 1.78 | .94 | (.37) | 1.03 | 1.50 |
Total from investment operations | .54 | 1.90 | 1.08 | (.21) | 1.18 | 1.64 |
Distributions from net investment income | - | (.12) | (.14) | (.13) | (.11) | (.12) |
Distributions from net realized gain | (.20) | (.43) | (.03) | (.02) | (.02) | (.01) |
Total distributions | (.20) | (.54)I | (.17) | (.15) | (.13) | (.14)H |
Net asset value, end of period | $ 12.13 | $ 11.79 | $ 10.43 | $ 9.52 | $ 9.88 | $ 8.83 |
Total ReturnB, C, D | 4.69% | 18.39% | 11.35% | (2.08)% | 13.35% | 22.31% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .50%A | .50% | .50% | .50% | .50% | .50% |
Expenses net of fee waivers, if any | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of all reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Net investment income (loss) | .65%A | 1.03% | 1.36% | 1.62% | 1.62% | 1.74% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 415,781 | $ 372,191 | $ 254,505 | $ 45,494 | $ 125 | $ 83 |
Portfolio turnover rateF | 37%A | 21% | 19% | 9% | 10% | 38% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.14 per share is comprised of distributions from net investment income of $.124 and distributions from net realized gain of $.012 per share.
I Total distributions of $.54 per share is comprised of distributions from net investment income of $.119 and distributions from net realized gain of $.425 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Investor Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.81 | $ 10.44 | $ 9.52 | $ 9.88 | $ 8.82 | $ 7.32 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .05 | .13 | .15 | .17 | .16 | .15 |
Net realized and unrealized gain (loss) | .50 | 1.80 | .95 | (.37) | 1.04 | 1.50 |
Total from investment operations | .55 | 1.93 | 1.10 | (.20) | 1.20 | 1.65 |
Distributions from net investment income | - | (.13) | (.15) | (.14) | (.12) | (.13) |
Distributions from net realized gain | (.20) | (.43) | (.03) | (.02) | (.02) | (.01) |
Total distributions | (.20) | (.56) | (.18) | (.16) | (.14) | (.15)H |
Net asset value, end of period | $ 12.16 | $ 11.81 | $ 10.44 | $ 9.52 | $ 9.88 | $ 8.82 |
Total ReturnB, C, D | 4.77% | 18.62% | 11.60% | (2.02)% | 13.62% | 22.48% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .25%A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | .80%A | 1.18% | 1.51% | 1.77% | 1.77% | 1.89% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 6,222,376 | $ 6,037,672 | $ 5,275,474 | $ 4,094,228 | $ 2,584,021 | $ 1,159,764 |
Portfolio turnover rateF | 37%A | 21% | 19% | 9% | 10% | 38% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.15 per share is comprised of distributions from net investment income of $.134 and distributions from net realized gain of $.012 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 70% Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
Fidelity Air Transportation Portfolio | 0.3 | 0.2 |
Fidelity Automotive Portfolio | 0.4 | 0.6 |
Fidelity Banking Portfolio | 2.5 | 2.7 |
Fidelity Biotechnology Portfolio | 0.0* | 0.2 |
Fidelity Blue Chip Growth Fund | 1.2 | 0.8 |
Fidelity Blue Chip Value Fund | 0.3 | 0.1 |
Fidelity Brokerage and Investment Management Portfolio | 1.3 | 1.7 |
Fidelity Capital Appreciation Fund | 0.0* | 0.1 |
Fidelity Chemicals Portfolio | 1.6 | 1.1 |
Fidelity Communications Equipment Portfolio | 0.1 | 0.1 |
Fidelity Computers Portfolio | 1.1 | 1.2 |
Fidelity Construction and Housing Portfolio | 0.5 | 0.5 |
Fidelity Consumer Discretionary Portfolio | 2.5 | 2.3 |
Fidelity Consumer Finance Portfolio | 0.2 | 0.2 |
Fidelity Consumer Staples Portfolio | 2.5 | 2.7 |
Fidelity Contrafund | 0.0* | 0.3 |
Fidelity Defense and Aerospace Portfolio | 0.5 | 0.5 |
Fidelity Disciplined Equity Fund | 0.2 | 0.7 |
Fidelity Dividend Growth Fund | 0.0* | 0.0* |
Fidelity Electronics Portfolio | 1.3 | 0.1 |
Fidelity Energy Portfolio | 3.7 | 1.6 |
Fidelity Energy Service Portfolio | 1.6 | 0.8 |
Fidelity Environmental and Alternative Energy Portfolio | 0.1 | 0.1 |
Fidelity Equity Dividend Income Fund | 0.0* | 0.0* |
Fidelity Equity-Income Fund | 0.2 | 1.7 |
Fidelity Financial Services Portfolio | 2.7 | 2.4 |
Fidelity Fund | 0.0* | 0.0* |
Fidelity Gold Portfolio | 0.0* | 0.0* |
Fidelity Growth & Income Portfolio | 0.0* | 0.7 |
Fidelity Growth Company Fund | 0.4 | 0.4 |
Fidelity Growth Discovery Fund | 0.3 | 0.0* |
Fidelity Health Care Portfolio | 3.3 | 3.3 |
Fidelity Independence Fund | 0.5 | 0.5 |
Fidelity Industrial Equipment Portfolio | 0.7 | 1.4 |
Fidelity Industrials Portfolio | 3.1 | 3.3 |
Fidelity Insurance Portfolio | 0.9 | 1.6 |
|
| % of fund's
net assets | % of fund's net assets
6 months ago |
Fidelity IT Services Portfolio | 0.1 | 0.6 |
Fidelity Large Cap Stock Fund | 1.9 | 0.9 |
Fidelity Leisure Portfolio | 0.0* | 0.0* |
Fidelity Leveraged Company Stock Fund | 0.0* | 0.0* |
Fidelity Low-Priced Stock Fund | 0.0* | 0.5 |
Fidelity Magellan Fund | 0.0* | 0.0* |
Fidelity Materials Portfolio | 0.8 | 0.5 |
Fidelity Medical Delivery Portfolio | 0.0* | 0.0* |
Fidelity Medical Equipment and Systems Portfolio | 0.0* | 0.0* |
Fidelity Mega Cap Stock Fund | 1.0 | 2.1 |
Fidelity Mid Cap Value Fund | 0.2 | 0.2 |
Fidelity Mid-Cap Stock Fund | 0.0* | 0.1 |
Fidelity Multimedia Portfolio | 0.6 | 0.7 |
Fidelity Nasdaq Composite Index Fund | 0.2 | 0.3 |
Fidelity Natural Gas Portfolio | 0.0* | 0.0* |
Fidelity Natural Resources Portfolio | 0.0* | 0.0* |
Fidelity New Millennium Fund | 2.1 | 0.3 |
Fidelity OTC Portfolio | 0.1 | 0.6 |
Fidelity Pharmaceuticals Portfolio | 2.5 | 2.4 |
Fidelity Real Estate Investment Portfolio | 0.1 | 0.0* |
Fidelity Retailing Portfolio | 0.5 | 1.0 |
Fidelity Series Commodity Strategy Fund | 0.0* | 0.0* |
Fidelity Small Cap Discovery Fund | 0.0* | 0.4 |
Fidelity Small Cap Growth Fund | 0.0* | 0.0* |
Fidelity Small Cap Stock Fund | 0.0* | 0.0* |
Fidelity Small Cap Value Fund | 0.0* | 0.0* |
Fidelity Software and Computer Services Portfolio | 1.5 | 4.0 |
Fidelity Stock Selector Large Cap Value Fund | 0.2 | 0.0* |
Fidelity Technology Portfolio | 3.7 | 1.3 |
Fidelity Telecom and Utilities Fund | 0.0* | 0.1 |
Fidelity Telecommunications Portfolio | 0.3 | 0.4 |
Fidelity Transportation Portfolio | 0.9 | 0.5 |
Fidelity Utilities Portfolio | 0.7 | 0.0* |
Fidelity Value Discovery Fund | 0.1 | 0.0* |
Fidelity Value Fund | 0.7 | 0.5 |
Spartan 500 Index Fund Investor Class | 0.0* | 0.0* |
Spartan Extended Market Index Fund Investor Class | 0.0* | 1.5 |
Spartan Total Market Index Fund Investor Class | 0.0* | 0.5 |
VIP Mid Cap Portfolio Investor Class | 0.0* | 0.0* |
| 52.2 | 53.3 |
Fund Holdings as of June 30, 2014 - continued |
| % of fund's
net assets | % of fund's net assets
6 months ago |
International Equity Funds | | |
Fidelity Canada Fund | 0.0* | 0.0* |
Fidelity China Region Fund | 0.0* | 0.0* |
Fidelity Diversified International Fund | 2.7 | 2.5 |
Fidelity Emerging Asia Fund | 0.3 | 0.4 |
Fidelity Emerging Markets Fund | 1.1 | 1.1 |
Fidelity Europe Capital Appreciation Fund | 0.0 | 0.1 |
Fidelity Europe Fund | 2.3 | 0.7 |
Fidelity International Capital Appreciation Fund | 0.7 | 0.7 |
Fidelity International Discovery Fund | 3.8 | 4.8 |
Fidelity International Growth Fund | 0.1 | 0.0* |
Fidelity International Real Estate Fund | 0.0* | 0.0* |
Fidelity International Small Cap Fund | 0.4 | 0.8 |
Fidelity International Small Cap Opportunities Fund | 0.7 | 0.3 |
Fidelity International Value Fund | 0.0* | 0.1 |
Fidelity Japan Fund | 0.0* | 0.0* |
Fidelity Japan Smaller Companies Fund | 0.3 | 0.8 |
Fidelity Nordic Fund | 0.9 | 0.9 |
Fidelity Overseas Fund | 2.9 | 0.3 |
Fidelity Pacific Basin Fund | 0.6 | 0.7 |
Spartan International Index Fund Investor Class | 6.2 | 8.5 |
| 23.0 | 22.7 |
Fixed-Income Funds | | |
Fidelity Floating Rate High Income Fund | 1.4 | 1.5 |
Fidelity Focused High Income Fund | 0.5 | 0.5 |
Fidelity High Income Fund | 1.0 | 1.0 |
Fidelity New Markets Income Fund | 0.5 | 0.2 |
Fidelity Real Estate Income Fund | 0.3 | 0.0* |
Spartan U.S. Bond Index Fund Investor Class | 20.4 | 19.2 |
| 24.1 | 22.4 |
Money Market Funds | | |
Fidelity Institutional Prime Money Market Portfolio Class I | 0.7 | 1.6 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%
Asset Allocation (% of fund's net assets) |
As of June 30, 2014 |
| Domestic Equity Funds | 52.2% | |
| International Equity Funds | 23.0% | |
| Fixed-Income Funds | 24.1% | |
| Money Market Funds | 0.7% | |
As of December 31, 2013 |
| Domestic Equity Funds | 53.3% | |
| International Equity Funds | 22.7% | |
| Fixed-Income Funds | 22.4% | |
| Money Market Funds | 1.6% | |
Semiannual Report
VIP FundsManager 70% Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Equity Funds - 75.2% |
| Shares | | Value |
Domestic Equity Funds - 52.2% |
Fidelity Air Transportation Portfolio (c) | 38,927 | | $ 2,545,408 |
Fidelity Automotive Portfolio (c) | 69,595 | | 3,772,038 |
Fidelity Banking Portfolio (c) | 953,129 | | 25,000,577 |
Fidelity Biotechnology Portfolio (c) | 107 | | 21,419 |
Fidelity Blue Chip Growth Fund (c) | 174,738 | | 11,866,446 |
Fidelity Blue Chip Value Fund (c) | 167,881 | | 2,598,803 |
Fidelity Brokerage and Investment Management Portfolio (c) | 179,494 | | 13,113,852 |
Fidelity Capital Appreciation Fund (c) | 2,346 | | 88,395 |
Fidelity Chemicals Portfolio (c) | 101,455 | | 15,511,480 |
Fidelity Communications Equipment Portfolio (c) | 17,196 | | 555,419 |
Fidelity Computers Portfolio (c) | 143,798 | | 11,249,308 |
Fidelity Construction and Housing Portfolio (c) | 89,244 | | 4,837,943 |
Fidelity Consumer Discretionary Portfolio (c) | 779,971 | | 24,974,681 |
Fidelity Consumer Finance Portfolio (c) | 107,741 | | 1,681,839 |
Fidelity Consumer Staples Portfolio (c) | 269,565 | | 25,037,163 |
Fidelity Contrafund (c) | 338 | | 33,544 |
Fidelity Defense and Aerospace Portfolio (c) | 38,761 | | 4,519,862 |
Fidelity Disciplined Equity Fund (c) | 55,074 | | 1,884,098 |
Fidelity Dividend Growth Fund (c) | 424 | | 15,989 |
Fidelity Electronics Portfolio (c) | 167,924 | | 13,074,543 |
Fidelity Energy Portfolio (c) | 590,270 | | 36,419,667 |
Fidelity Energy Service Portfolio (c) | 156,686 | | 15,389,744 |
Fidelity Environmental and Alternative Energy Portfolio (c) | 23,745 | | 574,402 |
Fidelity Equity Dividend Income Fund (c) | 543 | | 14,192 |
Fidelity Equity-Income Fund (c) | 28,971 | | 1,818,823 |
Fidelity Financial Services Portfolio (c) | 318,460 | | 26,833,445 |
Fidelity Fund (c) | 539 | | 24,484 |
Fidelity Gold Portfolio (a)(c) | 4,361 | | 102,407 |
Fidelity Growth & Income Portfolio (c) | 12,992 | | 383,398 |
Fidelity Growth Company Fund (c) | 27,891 | | 3,539,059 |
Fidelity Growth Discovery Fund (c) | 134,361 | | 3,099,706 |
Fidelity Health Care Portfolio (c) | 156,880 | | 32,422,395 |
Fidelity Independence Fund (c) | 120,162 | | 4,826,891 |
Fidelity Industrial Equipment Portfolio (c) | 153,775 | | 6,596,937 |
Fidelity Industrials Portfolio (c) | 934,926 | | 30,880,600 |
Fidelity Insurance Portfolio (c) | 127,627 | | 8,502,528 |
Fidelity IT Services Portfolio (c) | 22,423 | | 818,901 |
Fidelity Large Cap Stock Fund (c) | 650,193 | | 18,237,925 |
Fidelity Leisure Portfolio (c) | 2,251 | | 298,663 |
Fidelity Leveraged Company Stock Fund (c) | 974 | | 45,150 |
Fidelity Low-Priced Stock Fund (c) | 2,551 | | 132,328 |
Fidelity Magellan Fund (c) | 203 | | 18,797 |
Fidelity Materials Portfolio (c) | 84,081 | | 7,411,744 |
Fidelity Medical Delivery Portfolio (c) | 1,976 | | 148,495 |
Fidelity Medical Equipment and Systems Portfolio (c) | 9,906 | | 377,710 |
|
| Shares | | Value |
Fidelity Mega Cap Stock Fund (c) | 583,893 | | $ 9,599,198 |
Fidelity Mid Cap Value Fund (c) | 75,438 | | 1,812,767 |
Fidelity Mid-Cap Stock Fund (c) | 4,937 | | 194,584 |
Fidelity Multimedia Portfolio (c) | 73,224 | | 5,997,016 |
Fidelity Nasdaq Composite Index Fund (c) | 27,717 | | 1,619,476 |
Fidelity Natural Gas Portfolio (c) | 310 | | 14,294 |
Fidelity Natural Resources Portfolio (c) | 1,850 | | 80,272 |
Fidelity New Millennium Fund (c) | 484,066 | | 20,311,398 |
Fidelity OTC Portfolio (c) | 7,988 | | 659,938 |
Fidelity Pharmaceuticals Portfolio (c) | 1,170,072 | | 24,536,416 |
Fidelity Real Estate Investment Portfolio (c) | 40,105 | | 1,497,118 |
Fidelity Retailing Portfolio (c) | 61,003 | | 4,941,881 |
Fidelity Series Commodity Strategy Fund (a)(c) | 1,089 | | 9,206 |
Fidelity Small Cap Discovery Fund (c) | 8,630 | | 268,381 |
Fidelity Small Cap Growth Fund (c) | 7,019 | | 137,433 |
Fidelity Small Cap Stock Fund (c) | 604 | | 12,025 |
Fidelity Small Cap Value Fund (c) | 6,704 | | 139,439 |
Fidelity Software and Computer Services Portfolio (c) | 125,197 | | 14,716,932 |
Fidelity Stock Selector Large Cap Value Fund (c) | 96,369 | | 1,605,506 |
Fidelity Technology Portfolio (c) | 300,231 | | 36,390,962 |
Fidelity Telecom and Utilities Fund (c) | 13,964 | | 344,079 |
Fidelity Telecommunications Portfolio (c) | 54,528 | | 3,348,551 |
Fidelity Transportation Portfolio (c) | 104,535 | | 8,688,939 |
Fidelity Utilities Portfolio (c) | 84,547 | | 6,574,370 |
Fidelity Value Discovery Fund (c) | 43,804 | | 1,032,017 |
Fidelity Value Fund (c) | 61,343 | | 6,944,056 |
Spartan 500 Index Fund Investor Class (c) | 333 | | 23,278 |
Spartan Extended Market Index Fund Investor Class (c) | 3,436 | | 191,778 |
Spartan Total Market Index Fund Investor Class (c) | 6,143 | | 354,457 |
VIP Mid Cap Portfolio Investor Class (c) | 675 | | 25,300 |
TOTAL DOMESTIC EQUITY FUNDS | | 513,372,265 |
International Equity Funds - 23.0% |
Fidelity Canada Fund (c) | 1,741 | | 112,043 |
Fidelity China Region Fund (c) | 6,306 | | 213,157 |
Fidelity Diversified International Fund (c) | 688,182 | | 26,178,435 |
Fidelity Emerging Asia Fund (c) | 92,924 | | 3,036,749 |
Fidelity Emerging Markets Fund (c) | 400,790 | | 10,316,328 |
Fidelity Europe Fund (c) | 555,267 | | 22,443,885 |
Fidelity International Capital Appreciation Fund (c) | 414,676 | | 7,240,239 |
Fidelity International Discovery Fund (c) | 915,659 | | 37,706,828 |
Fidelity International Growth Fund (c) | 34,234 | | 392,324 |
Fidelity International Real Estate Fund (c) | 1,527 | | 16,782 |
Fidelity International Small Cap Fund (c) | 138,391 | | 3,826,523 |
Fidelity International Small Cap Opportunities Fund (c) | 474,196 | | 7,070,260 |
Equity Funds - continued |
| Shares | | Value |
International Equity Funds - continued |
Fidelity International Value Fund (c) | 14,376 | | $ 133,121 |
Fidelity Japan Fund (c) | 11,889 | | 144,688 |
Fidelity Japan Smaller Companies Fund (c) | 210,646 | | 2,868,995 |
Fidelity Nordic Fund (c) | 178,049 | | 8,711,915 |
Fidelity Overseas Fund (c) | 685,812 | | 28,708,078 |
Fidelity Pacific Basin Fund (c) | 205,882 | | 5,995,292 |
Spartan International Index Fund Investor Class (c) | 1,427,942 | | 60,516,191 |
TOTAL INTERNATIONAL EQUITY FUNDS | | 225,631,833 |
TOTAL EQUITY FUNDS (Cost $565,816,091) |
739,004,098
|
Fixed-Income Funds - 24.1% |
| | | |
Fidelity Floating Rate High Income Fund (c) | 1,374,420 | | 13,730,451 |
Fidelity Focused High Income Fund (c) | 488,654 | | 4,436,976 |
Fidelity High Income Fund (c) | 1,058,304 | | 10,053,890 |
Fidelity New Markets Income Fund (c) | 297,544 | | 5,001,707 |
|
| Shares | | Value |
Fidelity Real Estate Income Fund (c) | 288,541 | | $ 3,448,061 |
Spartan U.S. Bond Index Fund Investor Class (c) | 17,202,825 | | 200,584,930 |
TOTAL FIXED-INCOME FUNDS (Cost $227,703,457) |
237,256,015
|
Money Market Funds - 0.7% |
| | | |
Fidelity Institutional Prime Money Market Portfolio Class I 0.01% (b)(c)
(Cost $6,667,683) | 6,667,683 | |
6,667,683
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $800,187,231) | 982,927,796 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | (188,471) |
NET ASSETS - 100% | $ 982,739,325 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. |
(c) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Air Transportation Portfolio | $ 1,523,733 | $ 871,295 | $ - | $ 694 | $ 2,545,408 |
Fidelity Automotive Portfolio | 5,028,073 | 2,142,082 | 3,357,726 | 1,302 | 3,772,038 |
Fidelity Banking Portfolio | 23,823,886 | 2,753,731 | 1,558,066 | 68,876 | 25,000,577 |
Fidelity Biotechnology Portfolio | 2,145,330 | - | 2,280,011 | - | 21,419 |
Fidelity Blue Chip Growth Fund | 7,188,043 | 3,941,819 | 40,244 | - | 11,866,446 |
Fidelity Blue Chip Value Fund | 565,500 | 3,010,596 | 1,150,000 | - | 2,598,803 |
Fidelity Brokerage and Investment Management Portfolio | 14,751,425 | 1,310,030 | 2,600,000 | 22,007 | 13,113,852 |
Fidelity Canada Fund | 101,542 | - | - | - | 112,043 |
Fidelity Capital Appreciation Fund | 565,609 | - | 500,000 | - | 88,395 |
Fidelity Chemicals Portfolio | 10,030,573 | 4,893,419 | - | 20,901 | 15,511,480 |
Fidelity China Region Fund | 212,904 | - | - | - | 213,157 |
Fidelity Communications Equipment Portfolio | 506,736 | 550 | - | 69 | 555,419 |
Fidelity Computers Portfolio | 10,675,100 | 43,671 | 58,667 | 19,622 | 11,249,308 |
Fidelity Construction and Housing Portfolio | 4,838,113 | 280,303 | 258,015 | 4,029 | 4,837,943 |
Fidelity Consumer Discretionary Portfolio | 20,010,753 | 6,409,042 | 982,170 | 5,484 | 24,974,681 |
Fidelity Consumer Finance Portfolio | 1,840,136 | 108,714 | 192,974 | 3,510 | 1,681,839 |
Fidelity Consumer Staples Portfolio | 23,701,263 | 838,634 | 231,771 | 66,728 | 25,037,163 |
Fidelity Contrafund | 2,258,050 | 304,131 | 2,500,000 | - | 33,544 |
Fidelity Defense and Aerospace Portfolio | 4,429,512 | 297,878 | - | 7,762 | 4,519,862 |
Fidelity Disciplined Equity Fund | 6,323,302 | 173,222 | 4,762,513 | - | 1,884,098 |
Fidelity Diversified International Fund | 22,139,254 | 18,643,034 | 15,000,000 | - | 26,178,435 |
Fidelity Dividend Growth Fund | 15,005 | - | - | - | 15,989 |
Fidelity Electronics Portfolio | 1,342,678 | 10,523,162 | - | 6,011 | 13,074,543 |
Fidelity Emerging Asia Fund | 3,844,227 | 987,309 | 1,902,548 | - | 3,036,749 |
Fidelity Emerging Markets Fund | 9,254,861 | 2,373,365 | 1,821,627 | - | 10,316,328 |
Fidelity Energy Portfolio | 13,706,915 | 19,797,976 | 349,052 | 47,479 | 36,419,667 |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Energy Service Portfolio | $ 6,902,549 | $ 6,904,629 | $ 348,271 | $ 3,228 | $ 15,389,744 |
Fidelity Environmental and Alternative Energy Portfolio | 541,416 | 688 | - | 71 | 574,402 |
Fidelity Equity Dividend Income Fund | 13,231 | 131 | - | 131 | 14,192 |
Fidelity Equity-Income Fund | 14,713,236 | 1,123,413 | 14,060,310 | 7,764 | 1,818,823 |
Fidelity Europe Capital Appreciation Fund | 873,877 | 916,139 | - | 16,139 | - |
Fidelity Europe Fund | 6,236,767 | 18,787,822 | 5,183,595 | - | 22,443,885 |
Fidelity Financial Services Portfolio | 20,666,390 | 5,537,264 | 134,052 | 32,162 | 26,833,445 |
Fidelity Floating Rate High Income Fund | 13,030,432 | 862,578 | 203,312 | 220,053 | 13,730,451 |
Fidelity Focused High Income Fund | 4,251,279 | 147,990 | - | 96,515 | 4,436,976 |
Fidelity Fund | 22,991 | - | - | - | 24,484 |
Fidelity Gold Portfolio | 78,375 | - | - | - | 102,407 |
Fidelity Growth & Income Portfolio | 6,358,338 | 1,475 | 6,000,000 | 1,475 | 383,398 |
Fidelity Growth Company Fund | 3,324,123 | 19,493 | - | - | 3,539,059 |
Fidelity Growth Discovery Fund | 298,029 | 2,609,995 | - | - | 3,099,706 |
Fidelity Health Care Portfolio | 28,763,962 | 14,582,318 | 14,112,258 | - | 32,422,395 |
Fidelity High Income Fund | 8,516,936 | 1,435,921 | 24,979 | 243,485 | 10,053,890 |
Fidelity Independence Fund | 4,130,364 | 1,285,000 | 1,000,000 | - | 4,826,891 |
Fidelity Industrial Equipment Portfolio | 12,302,351 | 1,035,577 | 6,000,005 | 27,386 | 6,596,937 |
Fidelity Industrials Portfolio | 28,995,845 | 4,441,579 | 2,097,850 | 40,313 | 30,880,600 |
Fidelity Institutional Prime Money Market Portfolio Class I | 14,356,626 | 4,652,642 | 12,341,585 | 615 | 6,667,683 |
Fidelity Insurance Portfolio | 14,171,347 | 579,750 | 5,883,855 | 28,660 | 8,502,528 |
Fidelity International Capital Appreciation Fund | 5,826,109 | 3,619,234 | 2,523,558 | - | 7,240,239 |
Fidelity International Discovery Fund | 42,400,130 | 5,900,502 | 10,970,308 | - | 37,706,828 |
Fidelity International Growth Fund | 384,792 | - | - | - | 392,324 |
Fidelity International Real Estate Fund | 15,530 | - | - | - | 16,782 |
Fidelity International Small Cap Fund | 6,988,341 | - | 3,296,696 | - | 3,826,523 |
Fidelity International Small Cap Opportunities Fund | 3,009,843 | 3,906,276 | 150,279 | - | 7,070,260 |
Fidelity International Value Fund | 611,699 | - | 480,000 | - | 133,121 |
Fidelity IT Services Portfolio | 5,059,451 | 3,008,308 | 6,953,213 | - | 818,901 |
Fidelity Japan Fund | 143,142 | - | - | - | 144,688 |
Fidelity Japan Smaller Companies Fund | 6,600,466 | - | 3,537,819 | - | 2,868,995 |
Fidelity Large Cap Stock Fund | 7,590,283 | 10,604,069 | 366,961 | 57,339 | 18,237,925 |
Fidelity Leisure Portfolio | 290,242 | 8,953 | - | 815 | 298,663 |
Fidelity Leveraged Company Stock Fund | 42,129 | - | - | - | 45,150 |
Fidelity Low-Priced Stock Fund | 4,041,728 | - | 3,900,000 | - | 132,328 |
Fidelity Magellan Fund | 17,616 | 1,099 | - | 34 | 18,797 |
Fidelity Materials Portfolio | 4,845,338 | 2,323,863 | - | 8,313 | 7,411,744 |
Fidelity Medical Delivery Portfolio | 138,469 | 5,482 | - | - | 148,495 |
Fidelity Medical Equipment and Systems Portfolio | 334,995 | 18,353 | - | - | 377,710 |
Fidelity Mega Cap Stock Fund | 18,467,388 | 4,717,039 | 14,099,994 | - | 9,599,198 |
Fidelity Mid Cap Value Fund | 1,668,712 | 35,811 | - | 517 | 1,812,767 |
Fidelity Mid-Cap Stock Fund | 857,362 | 13,050 | 700,000 | - | 194,584 |
Fidelity Multimedia Portfolio | 6,009,194 | 97,718 | 183,589 | 431 | 5,997,016 |
Fidelity Nasdaq Composite Index Fund | 2,516,407 | 1,187 | 996,000 | - | 1,619,476 |
Fidelity Natural Gas Portfolio | 11,686 | 23 | - | 11 | 14,294 |
Fidelity Natural Resources Portfolio | 67,875 | 412 | - | 7 | 80,272 |
Fidelity New Markets Income Fund | 2,114,017 | 3,397,464 | 700,000 | 58,770 | 5,001,707 |
Fidelity New Millennium Fund | 2,830,011 | 17,182,766 | 742,345 | - | 20,311,398 |
Fidelity Nordic Fund | 7,779,901 | 210,601 | - | - | 8,711,915 |
Fidelity OTC Portfolio | 5,162,774 | 5,825,560 | 10,022,687 | - | 659,938 |
Fidelity Overseas Fund | 2,700,100 | 24,942,737 | - | - | 28,708,078 |
Fidelity Pacific Basin Fund | 5,694,704 | - | - | - | 5,995,292 |
Fidelity Pharmaceuticals Portfolio | 20,830,732 | 1,626,910 | - | 93,256 | 24,536,416 |
Fidelity Real Estate Income Fund | 43,112 | 3,369,743 | - | 35,211 | 3,448,061 |
Fidelity Real Estate Investment Portfolio | 26,108 | 1,456,923 | - | 6,094 | 1,497,118 |
Fidelity Retailing Portfolio | 8,444,586 | 337,050 | 3,217,074 | 2,316 | 4,941,881 |
Fidelity Series Commodity Strategy Fund | 8,628 | - | - | - | 9,206 |
Fidelity Small Cap Discovery Fund | 3,122,078 | 11,635 | 2,800,000 | 173 | 268,381 |
Fidelity Small Cap Growth Fund | 264,120 | - | 130,000 | - | 137,433 |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Small Cap Stock Fund | $ 11,469 | $ 1,099 | $ - | $ 34 | $ 12,025 |
Fidelity Small Cap Value Fund | 260,995 | - | 130,000 | - | 139,439 |
Fidelity Software and Computer Services Portfolio | 34,894,923 | 3,914,365 | 23,594,174 | - | 14,716,932 |
Fidelity Stock Selector Large Cap Value Fund | 101,356 | 1,482,585 | - | - | 1,605,506 |
Fidelity Technology Portfolio | 11,508,486 | 27,453,925 | 2,568,888 | - | 36,390,962 |
Fidelity Telecom and Utilities Fund | 1,264,558 | 11,744 | 1,000,000 | 5,451 | 344,079 |
Fidelity Telecommunications Portfolio | 3,447,415 | 219,897 | 365,572 | 64,522 | 3,348,551 |
Fidelity Transportation Portfolio | 4,444,738 | 3,571,731 | - | 9,563 | 8,688,939 |
Fidelity Utilities Portfolio | 272,154 | 6,238,396 | - | 1,373 | 6,574,370 |
Fidelity Value Discovery Fund | 36,416 | 977,332 | - | - | 1,032,017 |
Fidelity Value Fund | 4,330,632 | 2,143,893 | 53,659 | - | 6,944,056 |
Spartan 500 Index Fund Investor Class | 21,737 | 95 | - | 95 | 23,278 |
Spartan Extended Market Index Fund Investor Class | 12,987,300 | 2,826 | 12,870,000 | 375 | 191,778 |
Spartan International Index Fund Investor Class | 74,250,749 | 1,151,725 | 17,251,420 | 373,855 | 60,516,191 |
Spartan Total Market Index Fund Investor Class | 4,317,514 | 876 | 3,960,000 | 876 | 354,457 |
Spartan U.S. Bond Index Fund Investor Class | 168,261,451 | 29,129,188 | 1,472,612 | 2,172,871 | 200,584,930 |
VIP Mid Cap Portfolio Investor Class | 24,078 | 374 | - | - | 25,300 |
Total | $ 876,766,756 | $ 313,551,186 | $ 235,972,304 | $ 3,884,773 | $ 982,927,796 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 70% Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $800,187,231) - See accompanying schedule | | $ 982,927,796 |
Cash | | 4 |
Receivable for investments sold | | 16,700,010 |
Receivable for fund shares sold | | 913,371 |
Total assets | | 1,000,541,181 |
| | |
Liabilities | | |
Payable for investments purchased | $ 17,636,605 | |
Payable for fund shares redeemed | 2,379 | |
Accrued management fee | 161,979 | |
Distribution and service plan fees payable | 893 | |
Total liabilities | | 17,801,856 |
| | |
Net Assets | | $ 982,739,325 |
Net Assets consist of: | | |
Paid in capital | | $ 817,394,096 |
Undistributed net investment income | | 2,962,012 |
Accumulated undistributed net realized gain (loss) on investments | | (20,357,348) |
Net unrealized appreciation (depreciation) on investments | | 182,740,565 |
Net Assets | | $ 982,739,325 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($119,434 ÷ 9,474 shares) | | $ 12.61 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($7,210,300 ÷ 573,783 shares) | | $ 12.57 |
| | |
Investor Class:
Net Asset Value, offering price and redemption price per share ($975,409,591 ÷ 77,395,750 shares) | | $ 12.60 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 3,884,773 |
| | |
Expenses | | |
Management fee | $ 1,145,409 | |
Distribution and service plan fees | 8,616 | |
Independent trustees' compensation | 1,724 | |
Total expenses before reductions | 1,155,749 | |
Expense reductions | (232,988) | 922,761 |
Net investment income (loss) | | 2,962,012 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | 23,981,828 | |
Capital gain distributions from underlying funds | 14,237,461 | |
Total net realized gain (loss) | | 38,219,289 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 4,600,344 |
Net gain (loss) | | 42,819,633 |
Net increase (decrease) in net assets resulting from operations | | $ 45,781,645 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 2,962,012 | $ 8,896,278 |
Net realized gain (loss) | 38,219,289 | 58,620,188 |
Change in net unrealized appreciation (depreciation) | 4,600,344 | 79,310,616 |
Net increase (decrease) in net assets resulting from operations | 45,781,645 | 146,827,082 |
Distributions to shareholders from net investment income | - | (8,894,045) |
Distributions to shareholders from net realized gain | - | (6,389,993) |
Total distributions | - | (15,284,038) |
Share transactions - net increase (decrease) | 60,334,070 | 117,126,900 |
Total increase (decrease) in net assets | 106,115,715 | 248,669,944 |
| | |
Net Assets | | |
Beginning of period | 876,623,610 | 627,953,666 |
End of period (including undistributed net investment income of $2,962,012 and undistributed net investment income of $0, respectively) | $ 982,739,325 | $ 876,623,610 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.01 | $ 10.04 | $ 9.04 | $ 9.48 | $ 8.42 | $ 6.87 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .04 | .13 | .15 | .15 | .13 | .13 |
Net realized and unrealized gain (loss) | .56 | 2.05 | 1.03 | (.41) | 1.08 | 1.55 |
Total from investment operations | .60 | 2.18 | 1.18 | (.26) | 1.21 | 1.68 |
Distributions from net investment income | - | (.12) | (.15) | (.15) | (.13) | (.12) |
Distributions from net realized gain | - | (.09) | (.03) | (.02) | (.02) | (.01) |
Total distributions | - | (.21) | (.18) | (.18)H | (.15) | (.13) |
Net asset value, end of period | $ 12.61 | $ 12.01 | $ 10.04 | $ 9.04 | $ 9.48 | $ 8.42 |
Total ReturnB, C, D | 5.00% | 21.75% | 13.10% | (2.79)% | 14.32% | 24.44% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | .65%A | 1.19% | 1.57% | 1.60% | 1.49% | 1.73% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 119 | $ 91 | $ 77 | $ 63 | $ 67 | $ 68 |
Portfolio turnover rateF | 51%A | 31% | 24% | 16% | 22% | 55% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.18 per share is comprised of distributions from net investment income of $.151 and distributions from net realized gain of $.024 per share.
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.98 | $ 10.02 | $ 9.02 | $ 9.46 | $ 8.41 | $ 6.86 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .03 | .12 | .14 | .14 | .12 | .12 |
Net realized and unrealized gain (loss) | .56 | 2.04 | 1.03 | (.42) | 1.07 | 1.55 |
Total from investment operations | .59 | 2.16 | 1.17 | (.28) | 1.19 | 1.67 |
Distributions from net investment income | - | (.11) | (.14) | (.14) | (.12) | (.11) |
Distributions from net realized gain | - | (.09) | (.03) | (.02) | (.02) | (.01) |
Total distributions | - | (.20) | (.17) | (.16) | (.14) | (.12) |
Net asset value, end of period | $ 12.57 | $ 11.98 | $ 10.02 | $ 9.02 | $ 9.46 | $ 8.41 |
Total ReturnB, C, D | 4.92% | 21.54% | 12.98% | (2.94)% | 14.09% | 24.38% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .50%A | .50% | .50% | .50% | .50% | .50% |
Expenses net of fee waivers, if any | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of all reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Net investment income (loss) | .50%A | 1.04% | 1.42% | 1.45% | 1.34% | 1.58% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 7,210 | $ 6,752 | $ 5,035 | $ 3,675 | $ 2,586 | $ 1,464 |
Portfolio turnover rateF | 51%A | 31% | 24% | 16% | 22% | 55% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Investor Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.01 | $ 10.04 | $ 9.03 | $ 9.48 | $ 8.42 | $ 6.87 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .04 | .13 | .15 | .15 | .13 | .13 |
Net realized and unrealized gain (loss) | .55 | 2.05 | 1.04 | (.42) | 1.08 | 1.55 |
Total from investment operations | .59 | 2.18 | 1.19 | (.27) | 1.21 | 1.68 |
Distributions from net investment income | - | (.12) | (.15) | (.15) | (.13) | (.12) |
Distributions from net realized gain | - | (.09) | (.03) | (.02) | (.02) | (.01) |
Total distributions | - | (.21) | (.18) | (.18)H | (.15) | (.13) |
Net asset value, end of period | $ 12.60 | $ 12.01 | $ 10.04 | $ 9.03 | $ 9.48 | $ 8.42 |
Total ReturnB, C, D | 4.91% | 21.75% | 13.22% | (2.90)% | 14.32% | 24.44% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .25%A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | .65%A | 1.19% | 1.57% | 1.60% | 1.49% | 1.73% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 975,410 | $ 869,781 | $ 622,842 | $ 554,088 | $ 536,918 | $ 445,681 |
Portfolio turnover rateF | 51%A | 31% | 24% | 16% | 22% | 55% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.18 per share is comprised of distributions from net investment income of $.151 and distributions from net realized gain of $.024 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 85% Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
Fidelity Air Transportation Portfolio | 0.3 | 0.5 |
Fidelity Automotive Portfolio | 0.5 | 0.4 |
Fidelity Banking Portfolio | 2.6 | 2.3 |
Fidelity Biotechnology Portfolio | 0.0* | 0.5 |
Fidelity Blue Chip Growth Fund | 1.3 | 0.4 |
Fidelity Blue Chip Value Fund | 0.3 | 0.0 |
Fidelity Brokerage and Investment Management Portfolio | 1.7 | 2.8 |
Fidelity Capital Appreciation Fund | 0.1 | 0.2 |
Fidelity Chemicals Portfolio | 2.3 | 0.9 |
Fidelity Communications Equipment Portfolio | 0.0* | 0.0* |
Fidelity Computers Portfolio | 1.1 | 1.7 |
Fidelity Construction and Housing Portfolio | 0.3 | 0.3 |
Fidelity Consumer Discretionary Portfolio | 4.0 | 4.1 |
Fidelity Consumer Finance Portfolio | 0.1 | 0.7 |
Fidelity Consumer Staples Portfolio | 2.6 | 4.1 |
Fidelity Contrafund | 0.0* | 0.2 |
Fidelity Defense and Aerospace Portfolio | 0.1 | 0.8 |
Fidelity Disciplined Equity Fund | 0.1 | 1.3 |
Fidelity Dividend Growth Fund | 0.0* | 0.0* |
Fidelity Electronics Portfolio | 2.1 | 0.7 |
Fidelity Energy Portfolio | 4.5 | 2.5 |
Fidelity Energy Service Portfolio | 1.7 | 1.4 |
Fidelity Environmental and Alternative Energy Portfolio | 0.0* | 0.0* |
Fidelity Equity Dividend Income Fund | 0.0* | 0.0* |
Fidelity Equity-Income Fund | 0.0* | 0.4 |
Fidelity Financial Services Portfolio | 3.9 | 1.0 |
Fidelity Global Commodity Stock Fund | 0.0* | 0.0* |
Fidelity Gold Portfolio | 0.0* | 0.0* |
Fidelity Growth & Income Portfolio | 0.0* | 0.2 |
Fidelity Growth Company Fund | 0.1 | 0.1 |
Fidelity Growth Discovery Fund | 0.4 | 0.1 |
Fidelity Health Care Portfolio | 5.6 | 6.0 |
Fidelity Independence Fund | 1.5 | 0.1 |
Fidelity Industrial Equipment Portfolio | 0.2 | 1.4 |
Fidelity Industrials Portfolio | 4.8 | 6.8 |
Fidelity Insurance Portfolio | 1.1 | 3.2 |
Fidelity IT Services Portfolio | 0.0* | 1.8 |
|
| % of fund's
net assets | % of fund's net assets
6 months ago |
Fidelity Large Cap Stock Fund | 2.9 | 1.6 |
Fidelity Leisure Portfolio | 0.0* | 0.0* |
Fidelity Leveraged Company Stock Fund | 0.0* | 0.0* |
Fidelity Low-Priced Stock Fund | 0.0* | 0.5 |
Fidelity Magellan Fund | 0.0* | 0.0* |
Fidelity Materials Portfolio | 0.3 | 0.1 |
Fidelity Medical Delivery Portfolio | 0.1 | 0.1 |
Fidelity Medical Equipment and Systems Portfolio | 0.0* | 0.1 |
Fidelity Mega Cap Stock Fund | 1.2 | 1.1 |
Fidelity Mid Cap Value Fund | 0.0* | 0.0* |
Fidelity Mid-Cap Stock Fund | 0.0* | 0.2 |
Fidelity Multimedia Portfolio | 0.6 | 0.7 |
Fidelity Nasdaq Composite Index Fund | 0.0* | 0.0* |
Fidelity Natural Gas Portfolio | 0.0* | 0.0* |
Fidelity Natural Resources Portfolio | 0.0* | 0.0* |
Fidelity New Millennium Fund | 1.8 | 0.9 |
Fidelity OTC Portfolio | 0.2 | 0.6 |
Fidelity Pharmaceuticals Portfolio | 1.1 | 0.7 |
Fidelity Real Estate Investment Portfolio | 0.2 | 0.0* |
Fidelity Retailing Portfolio | 0.4 | 1.0 |
Fidelity Series Commodity Strategy Fund | 0.0* | 0.0* |
Fidelity Small Cap Discovery Fund | 0.1 | 0.4 |
Fidelity Small Cap Growth Fund | 0.0* | 0.0* |
Fidelity Small Cap Stock Fund | 0.0* | 0.0* |
Fidelity Small Cap Value Fund | 0.0* | 0.7 |
Fidelity Software and Computer Services Portfolio | 0.9 | 4.5 |
Fidelity Stock Selector Large Cap Value Fund | 1.2 | 0.1 |
Fidelity Technology Portfolio | 5.5 | 1.1 |
Fidelity Telecom and Utilities Fund | 0.0* | 0.0* |
Fidelity Telecommunications Portfolio | 0.3 | 0.3 |
Fidelity Transportation Portfolio | 0.8 | 0.7 |
Fidelity Utilities Portfolio | 0.6 | 0.0* |
Fidelity Value Discovery Fund | 0.2 | 0.0* |
Fidelity Value Fund | 0.6 | 0.1 |
Fidelity Value Strategies Fund | 0.0* | 0.0* |
Spartan 500 Index Fund Investor Class | 0.0* | 0.0* |
Spartan Extended Market Index Fund Investor Class | 0.0* | 0.0* |
Spartan Total Market Index Fund Investor Class | 0.0* | 0.0* |
VIP Energy Portfolio Investor Class | 0.1 | 0.1 |
VIP Mid Cap Portfolio Investor Class | 0.0* | 0.0* |
| 62.4 | 62.5 |
Fund Holdings as of June 30, 2014 - continued |
| % of fund's
net assets | % of fund's net assets
6 months ago |
International Equity Funds | | |
Fidelity Canada Fund | 0.0* | 0.0* |
Fidelity China Region Fund | 0.0* | 0.1 |
Fidelity Diversified International Fund | 4.1 | 5.3 |
Fidelity Emerging Asia Fund | 0.5 | 0.5 |
Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund | 0.1 | 0.1 |
Fidelity Emerging Markets Fund | 1.2 | 0.9 |
Fidelity Europe Capital Appreciation Fund | 0.0 | 0.0* |
Fidelity Europe Fund | 2.4 | 3.3 |
Fidelity International Capital Appreciation Fund | 1.1 | 0.2 |
Fidelity International Discovery Fund | 2.1 | 5.8 |
Fidelity International Real Estate Fund | 0.0* | 0.0* |
Fidelity International Small Cap Fund | 0.1 | 1.0 |
Fidelity International Small Cap Opportunities Fund | 0.8 | 0.4 |
Fidelity International Value Fund | 0.0* | 0.1 |
Fidelity Japan Fund | 0.0* | 0.0* |
Fidelity Japan Smaller Companies Fund | 0.3 | 1.0 |
Fidelity Nordic Fund | 0.9 | 0.9 |
Fidelity Overseas Fund | 5.8 | 0.0* |
Fidelity Pacific Basin Fund | 0.1 | 0.2 |
Spartan International Index Fund Investor Class | 7.1 | 7.3 |
| 26.6 | 27.1 |
Fixed-Income Funds | | |
Fidelity Floating Rate High Income Fund | 0.0* | 0.0* |
Fidelity Focused High Income Fund | 0.2 | 0.2 |
Fidelity High Income Fund | 1.2 | 1.3 |
Fidelity New Markets Income Fund | 0.6 | 0.2 |
Fidelity Real Estate Income Fund | 0.4 | 0.0* |
Spartan U.S. Bond Index Fund Investor Class | 8.6 | 8.7 |
| 11.0 | 10.4 |
Money Market Funds | | |
Fidelity Institutional Prime Money Market Portfolio Class I | 0.0* | 0.0* |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%
Asset Allocation (% of fund's net assets) |
As of June 30, 2014 |
| Domestic Equity Funds | 62.4% | |
| International Equity Funds | 26.6% | |
| Fixed-Income Funds | 11.0% | |
| Money Market Funds | 0.0%* | |
As of December 31, 2013 |
| Domestic Equity Funds | 62.5% | |
| International Equity Funds | 27.1% | |
| Fixed-Income Funds | 10.4% | |
| Money Market Funds | 0.0%* | |
Semiannual Report
VIP FundsManager 85% Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Equity Funds - 89.0% |
| Shares | | Value |
Domestic Equity Funds - 62.4% |
Fidelity Air Transportation Portfolio (c) | 14,642 | | $ 957,424 |
Fidelity Automotive Portfolio (c) | 33,866 | | 1,835,513 |
Fidelity Banking Portfolio (c) | 373,756 | | 9,803,607 |
Fidelity Biotechnology Portfolio (c) | 461 | | 92,418 |
Fidelity Blue Chip Growth Fund (c) | 70,261 | | 4,771,458 |
Fidelity Blue Chip Value Fund (c) | 76,110 | | 1,178,190 |
Fidelity Brokerage and Investment Management Portfolio (c) | 89,539 | | 6,541,710 |
Fidelity Capital Appreciation Fund (c) | 5,450 | | 205,366 |
Fidelity Chemicals Portfolio (c) | 58,320 | | 8,916,597 |
Fidelity Communications Equipment Portfolio (c) | 2,482 | | 80,179 |
Fidelity Computers Portfolio (c) | 54,429 | | 4,257,971 |
Fidelity Construction and Housing Portfolio (c) | 18,529 | | 1,004,457 |
Fidelity Consumer Discretionary Portfolio (c) | 478,878 | | 15,333,679 |
Fidelity Consumer Finance Portfolio (c) | 21,507 | | 335,729 |
Fidelity Consumer Staples Portfolio (c) | 106,646 | | 9,905,260 |
Fidelity Contrafund (c) | 1,261 | | 125,290 |
Fidelity Defense and Aerospace Portfolio (c) | 3,978 | | 463,920 |
Fidelity Disciplined Equity Fund (c) | 9,656 | | 330,319 |
Fidelity Dividend Growth Fund (c) | 223 | | 8,392 |
Fidelity Electronics Portfolio (c) | 102,382 | | 7,971,450 |
Fidelity Energy Portfolio (c) | 278,083 | | 17,157,706 |
Fidelity Energy Service Portfolio (c) | 64,332 | | 6,318,659 |
Fidelity Environmental and Alternative Energy Portfolio (c) | 4,221 | | 102,098 |
Fidelity Equity Dividend Income Fund (c) | 1,295 | | 33,878 |
Fidelity Equity-Income Fund (c) | 1,392 | | 87,407 |
Fidelity Financial Services Portfolio (c) | 174,741 | | 14,723,662 |
Fidelity Global Commodity Stock Fund (c) | 1,829 | | 27,897 |
Fidelity Gold Portfolio (a)(c) | 3,652 | | 85,754 |
Fidelity Growth & Income Portfolio (c) | 991 | | 29,237 |
Fidelity Growth Company Fund (c) | 2,815 | | 357,167 |
Fidelity Growth Discovery Fund (c) | 62,036 | | 1,431,172 |
Fidelity Health Care Portfolio (c) | 103,843 | | 21,461,260 |
Fidelity Independence Fund (c) | 144,440 | | 5,802,148 |
Fidelity Industrial Equipment Portfolio (c) | 15,564 | | 667,698 |
Fidelity Industrials Portfolio (c) | 552,155 | | 18,237,696 |
Fidelity Insurance Portfolio (c) | 64,851 | | 4,320,369 |
Fidelity IT Services Portfolio (c) | 3,765 | | 137,511 |
Fidelity Large Cap Stock Fund (c) | 389,920 | | 10,937,261 |
Fidelity Leisure Portfolio (c) | 953 | | 126,427 |
Fidelity Leveraged Company Stock Fund (c) | 3,137 | | 145,382 |
Fidelity Low-Priced Stock Fund (c) | 1,493 | | 77,457 |
Fidelity Magellan Fund (c) | 140 | | 12,966 |
Fidelity Materials Portfolio (c) | 13,789 | | 1,215,477 |
Fidelity Medical Delivery Portfolio (c) | 2,768 | | 208,078 |
Fidelity Medical Equipment and Systems Portfolio (c) | 4,786 | | 182,489 |
|
| Shares | | Value |
Fidelity Mega Cap Stock Fund (c) | 270,461 | | $ 4,446,380 |
Fidelity Mid Cap Value Fund (c) | 5,138 | | 123,456 |
Fidelity Mid-Cap Stock Fund (c) | 4,469 | | 176,114 |
Fidelity Multimedia Portfolio (c) | 27,841 | | 2,280,218 |
Fidelity Nasdaq Composite Index Fund (c) | 919 | | 53,675 |
Fidelity Natural Gas Portfolio (c) | 942 | | 43,479 |
Fidelity Natural Resources Portfolio (c) | 2,417 | | 104,887 |
Fidelity New Millennium Fund (c) | 163,366 | | 6,854,847 |
Fidelity OTC Portfolio (c) | 8,103 | | 669,430 |
Fidelity Pharmaceuticals Portfolio (c) | 197,920 | | 4,150,383 |
Fidelity Real Estate Investment Portfolio (c) | 20,727 | | 773,728 |
Fidelity Retailing Portfolio (c) | 17,323 | | 1,403,316 |
Fidelity Series Commodity Strategy Fund (a)(c) | 1,089 | | 9,206 |
Fidelity Small Cap Discovery Fund (c) | 6,474 | | 201,353 |
Fidelity Small Cap Growth Fund (c) | 2,762 | | 54,076 |
Fidelity Small Cap Stock Fund (c) | 4,308 | | 85,780 |
Fidelity Small Cap Value Fund (c) | 7,457 | | 155,100 |
Fidelity Software and Computer Services Portfolio (c) | 29,396 | | 3,455,457 |
Fidelity Stock Selector Large Cap Value Fund (c) | 265,761 | | 4,427,573 |
Fidelity Technology Portfolio (c) | 173,931 | | 21,082,175 |
Fidelity Telecom and Utilities Fund (c) | 1,664 | | 40,993 |
Fidelity Telecommunications Portfolio (c) | 15,854 | | 973,594 |
Fidelity Transportation Portfolio (c) | 38,462 | | 3,196,999 |
Fidelity Utilities Portfolio (c) | 29,086 | | 2,261,751 |
Fidelity Value Discovery Fund (c) | 25,466 | | 599,979 |
Fidelity Value Fund (c) | 19,234 | | 2,177,288 |
Fidelity Value Strategies Fund (c) | 275 | | 11,918 |
Spartan 500 Index Fund Investor Class (c) | 214 | | 14,975 |
Spartan Extended Market Index Fund Investor Class (c) | 209 | | 11,653 |
Spartan Total Market Index Fund Investor Class (c) | 1,289 | | 74,401 |
VIP Energy Portfolio Investor Class (c) | 17,201 | | 472,351 |
VIP Mid Cap Portfolio Investor Class (c) | 388 | | 14,555 |
TOTAL DOMESTIC EQUITY FUNDS | | 238,406,875 |
International Equity Funds - 26.6% |
Fidelity Canada Fund (c) | 583 | | 37,523 |
Fidelity China Region Fund (c) | 4,927 | | 166,549 |
Fidelity Diversified International Fund (c) | 413,349 | | 15,723,785 |
Fidelity Emerging Asia Fund (c) | 56,249 | | 1,838,203 |
Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund (c) | 38,811 | | 371,810 |
Fidelity Emerging Markets Fund (c) | 184,801 | | 4,756,780 |
Fidelity Europe Fund (c) | 231,529 | | 9,358,403 |
Fidelity International Capital Appreciation Fund (c) | 231,627 | | 4,044,213 |
Fidelity International Discovery Fund (c) | 190,530 | | 7,846,038 |
Fidelity International Real Estate Fund (c) | 1,392 | | 15,294 |
Equity Funds - continued |
| Shares | | Value |
International Equity Funds - continued |
Fidelity International Small Cap Fund (c) | 16,914 | | $ 467,675 |
Fidelity International Small Cap Opportunities Fund (c) | 203,314 | | 3,031,411 |
Fidelity International Value Fund (c) | 15,668 | | 145,087 |
Fidelity Japan Fund (c) | 8,892 | | 108,221 |
Fidelity Japan Smaller Companies Fund (c) | 81,405 | | 1,108,736 |
Fidelity Nordic Fund (c) | 67,737 | | 3,314,351 |
Fidelity Overseas Fund (c) | 525,146 | | 21,982,630 |
Fidelity Pacific Basin Fund (c) | 11,914 | | 346,933 |
Spartan International Index Fund Investor Class (c) | 642,408 | | 27,225,272 |
TOTAL INTERNATIONAL EQUITY FUNDS | | 101,888,914 |
TOTAL EQUITY FUNDS (Cost $273,425,686) |
340,295,789
|
Fixed-Income Funds - 11.0% |
| | | |
Fidelity Floating Rate High Income Fund (c) | 804 | | 8,030 |
Fidelity Focused High Income Fund (c) | 70,809 | | 642,941 |
Fidelity High Income Fund (c) | 500,164 | | 4,751,553 |
Fidelity New Markets Income Fund (c) | 140,270 | | 2,357,940 |
|
| Shares | | Value |
Fidelity Real Estate Income Fund (c) | 120,925 | | $ 1,445,054 |
Spartan U.S. Bond Index Fund Investor Class (c) | 2,804,865 | | 32,704,730 |
TOTAL FIXED-INCOME FUNDS (Cost $40,225,161) |
41,910,248
|
Money Market Funds - 0.0% |
| | | |
Fidelity Institutional Prime Money Market Portfolio Class I 0.01% (b)(c)
(Cost $34,226) | 34,226 | |
34,226
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $313,685,073) | 382,240,263 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | (68,133) |
NET ASSETS - 100% | $ 382,172,130 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. |
(c) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Air Transportation Portfolio | $ 1,724,077 | $ 15,957 | $ 870,000 | $ 388 | $ 957,424 |
Fidelity Automotive Portfolio | 1,456,984 | 1,555,315 | 1,167,348 | 202 | 1,835,513 |
Fidelity Banking Portfolio | 7,701,740 | 4,346,024 | 2,165,391 | 27,278 | 9,803,607 |
Fidelity Biotechnology Portfolio | 1,477,080 | - | 1,500,028 | - | 92,418 |
Fidelity Blue Chip Growth Fund | 1,196,064 | 3,329,978 | 29,198 | - | 4,771,458 |
Fidelity Blue Chip Value Fund | - | 1,593,303 | 500,000 | - | 1,178,190 |
Fidelity Brokerage and Investment Management Portfolio | 9,443,261 | 1,562,691 | 4,200,000 | 9,106 | 6,541,710 |
Fidelity Canada Fund | 34,007 | - | - | - | 37,523 |
Fidelity Capital Appreciation Fund | 493,910 | - | 300,000 | - | 205,366 |
Fidelity Chemicals Portfolio | 3,090,753 | 5,540,631 | - | 10,847 | 8,916,597 |
Fidelity China Region Fund | 377,484 | - | 200,000 | - | 166,549 |
Fidelity Communications Equipment Portfolio | 73,151 | 79 | - | 10 | 80,179 |
Fidelity Computers Portfolio | 5,483,866 | 75,783 | 1,546,150 | 7,321 | 4,257,971 |
Fidelity Construction and Housing Portfolio | 866,394 | 293,321 | 136,738 | 814 | 1,004,457 |
Fidelity Consumer Discretionary Portfolio | 13,612,436 | 3,108,911 | 1,015,220 | 3,797 | 15,333,679 |
Fidelity Consumer Finance Portfolio | 2,192,220 | 66,467 | 1,841,615 | 2,146 | 335,729 |
Fidelity Consumer Staples Portfolio | 13,529,608 | 514,340 | 4,359,630 | 26,138 | 9,905,260 |
Fidelity Contrafund | 500,621 | 431,261 | 800,000 | - | 125,290 |
Fidelity Defense and Aerospace Portfolio | 2,477,250 | 99,467 | 2,000,000 | 4,231 | 463,920 |
Fidelity Disciplined Equity Fund | 4,356,302 | 421,916 | 4,440,010 | - | 330,319 |
Fidelity Diversified International Fund | 17,738,041 | 9,984,582 | 12,156,814 | - | 15,723,785 |
Fidelity Dividend Growth Fund | 7,876 | - | - | - | 8,392 |
Fidelity Electronics Portfolio | 2,200,902 | 4,897,657 | - | 3,356 | 7,971,450 |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Emerging Asia Fund | $ 1,541,612 | $ 390,842 | $ 195,898 | $ - | $ 1,838,203 |
Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund | 356,673 | - | - | - | 371,810 |
Fidelity Emerging Markets Fund | 3,107,945 | 2,473,343 | 1,110,303 | - | 4,756,780 |
Fidelity Energy Portfolio | 8,145,068 | 8,476,367 | 1,085,837 | 23,888 | 17,157,706 |
Fidelity Energy Service Portfolio | 4,673,665 | 1,923,596 | 1,086,953 | 1,317 | 6,318,659 |
Fidelity Environmental and Alternative Energy Portfolio | 96,235 | 122 | - | 13 | 102,098 |
Fidelity Equity Dividend Income Fund | 31,584 | 313 | - | 313 | 33,878 |
Fidelity Equity-Income Fund | 1,305,301 | 3,120,769 | 4,431,467 | 16,495 | 87,407 |
Fidelity Europe Capital Appreciation Fund | 5,696 | 908,189 | - | 8,189 | - |
Fidelity Europe Fund | 11,082,898 | 3,839,815 | 7,007,353 | - | 9,358,403 |
Fidelity Financial Services Portfolio | 3,179,016 | 12,479,713 | 1,381,511 | 19,377 | 14,723,662 |
Fidelity Floating Rate High Income Fund | 7,874 | 132 | - | 132 | 8,030 |
Fidelity Focused High Income Fund | 625,783 | 21,512 | 9,875 | 14,052 | 642,941 |
Fidelity Global Commodity Stock Fund | 25,848 | - | - | - | 27,897 |
Fidelity Gold Portfolio | 6,413 | 2,050,000 | 1,700,000 | - | 85,754 |
Fidelity Growth & Income Portfolio | 631,295 | 112 | 600,000 | 112 | 29,237 |
Fidelity Growth Company Fund | 335,476 | 1,967 | - | - | 357,167 |
Fidelity Growth Discovery Fund | 439,496 | 2,816,972 | 1,999,988 | - | 1,431,172 |
Fidelity Health Care Portfolio | 20,071,686 | 6,194,984 | 7,077,886 | - | 21,461,260 |
Fidelity High Income Fund | 4,441,205 | 918,854 | 674,648 | 128,092 | 4,751,553 |
Fidelity Independence Fund | 294,914 | 5,400,000 | - | - | 5,802,148 |
Fidelity Industrial Equipment Portfolio | 4,631,391 | 219,230 | 4,000,000 | 5,798 | 667,698 |
Fidelity Industrials Portfolio | 22,558,946 | 1,339,921 | 5,324,211 | 22,816 | 18,237,696 |
Fidelity Institutional Prime Money Market Portfolio Class I | 772 | 1,433,386 | 1,399,932 | 1 | 34,226 |
Fidelity Insurance Portfolio | 10,690,013 | 228,762 | 6,338,354 | 11,309 | 4,320,369 |
Fidelity International Capital Appreciation Fund | 723,688 | 3,160,635 | - | - | 4,044,213 |
Fidelity International Discovery Fund | 19,308,143 | 1,266,962 | 12,586,438 | - | 7,846,038 |
Fidelity International Real Estate Fund | 14,153 | - | - | - | 15,294 |
Fidelity International Small Cap Fund | 3,339,998 | - | 2,858,531 | - | 467,675 |
Fidelity International Small Cap Opportunities Fund | 1,217,801 | 3,213,458 | 1,561,147 | - | 3,031,411 |
Fidelity International Value Fund | 141,796 | - | - | - | 145,087 |
Fidelity IT Services Portfolio | 6,128,504 | 212,450 | 6,035,404 | - | 137,511 |
Fidelity Japan Fund | 107,065 | - | - | - | 108,221 |
Fidelity Japan Smaller Companies Fund | 3,428,255 | - | 2,232,884 | - | 1,108,736 |
Fidelity Large Cap Stock Fund | 5,201,963 | 5,571,684 | 79,992 | 34,242 | 10,937,261 |
Fidelity Leisure Portfolio | 122,863 | 3,790 | - | 345 | 126,427 |
Fidelity Leveraged Company Stock Fund | 135,656 | - | - | - | 145,382 |
Fidelity Low-Priced Stock Fund | 1,584,712 | - | 1,500,000 | - | 77,457 |
Fidelity Magellan Fund | 12,151 | 758 | - | 23 | 12,966 |
Fidelity Materials Portfolio | 470,363 | 719,588 | - | 1,467 | 1,215,477 |
Fidelity Medical Delivery Portfolio | 194,028 | 7,681 | - | - | 208,078 |
Fidelity Medical Equipment and Systems Portfolio | 161,851 | 8,867 | - | - | 182,489 |
Fidelity Mega Cap Stock Fund | 3,591,727 | 2,503,083 | 1,919,614 | - | 4,446,380 |
Fidelity Mid Cap Value Fund | 113,645 | 2,439 | - | 35 | 123,456 |
Fidelity Mid-Cap Stock Fund | 743,597 | 11,812 | 600,000 | - | 176,114 |
Fidelity Multimedia Portfolio | 2,376,137 | 37,155 | 156,713 | 164 | 2,280,218 |
Fidelity Nasdaq Composite Index Fund | 50,601 | 24 | - | - | 53,675 |
Fidelity Natural Gas Portfolio | 35,547 | 69 | - | 32 | 43,479 |
Fidelity Natural Resources Portfolio | 88,688 | 538 | - | 10 | 104,887 |
Fidelity New Markets Income Fund | 575,464 | 2,211,428 | 480,000 | 17,338 | 2,357,940 |
Fidelity New Millennium Fund | 2,987,493 | 4,247,789 | 749,141 | - | 6,854,847 |
Fidelity Nordic Fund | 2,949,407 | 90,993 | - | - | 3,314,351 |
Fidelity OTC Portfolio | 2,021,928 | 5,352,564 | 6,395,408 | - | 669,430 |
Fidelity Overseas Fund | 14,120 | 21,181,653 | - | - | 21,982,630 |
Fidelity Pacific Basin Fund | 542,636 | - | 200,000 | - | 346,933 |
Fidelity Pharmaceuticals Portfolio | 2,380,658 | 1,457,647 | - | 10,658 | 4,150,383 |
Fidelity Real Estate Income Fund | 12,724 | 1,418,830 | - | 14,676 | 1,445,054 |
Fidelity Real Estate Investment Portfolio | 28,478 | 734,991 | - | 3,188 | 773,728 |
Fidelity Retailing Portfolio | 3,428,010 | 131,973 | 1,911,334 | 907 | 1,403,316 |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Series Commodity Strategy Fund | $ 8,628 | $ - | $ - | $ - | $ 9,206 |
Fidelity Small Cap Discovery Fund | 1,475,771 | 8,729 | 1,257,208 | 130 | 201,353 |
Fidelity Small Cap Growth Fund | 53,219 | - | - | - | 54,076 |
Fidelity Small Cap Stock Fund | 81,818 | 7,838 | - | 242 | 85,780 |
Fidelity Small Cap Value Fund | 2,430,280 | - | 2,250,000 | - | 155,100 |
Fidelity Software and Computer Services Portfolio | 14,872,498 | 1,005,270 | 12,195,855 | - | 3,455,457 |
Fidelity Stock Selector Large Cap Value Fund | 146,444 | 4,175,847 | - | - | 4,427,573 |
Fidelity Technology Portfolio | 3,564,904 | 17,933,591 | 199,959 | - | 21,082,175 |
Fidelity Telecom and Utilities Fund | 104,218 | 662 | 70,000 | 662 | 40,993 |
Fidelity Telecommunications Portfolio | 1,036,511 | 121,754 | 196,026 | 17,536 | 973,594 |
Fidelity Transportation Portfolio | 2,160,489 | 1,945,576 | 1,150,000 | 4,267 | 3,196,999 |
Fidelity Utilities Portfolio | 66,267 | 2,178,546 | - | 334 | 2,261,751 |
Fidelity Value Discovery Fund | 13,203 | 577,800 | - | - | 599,979 |
Fidelity Value Fund | 215,727 | 1,914,561 | 29,198 | - | 2,177,288 |
Fidelity Value Strategies Fund | 11,253 | - | - | - | 11,918 |
Spartan 500 Index Fund Investor Class | 13,984 | 61 | - | 61 | 14,975 |
Spartan Extended Market Index Fund Investor Class | 10,973 | 172 | - | 23 | 11,653 |
Spartan International Index Fund Investor Class | 24,218,616 | 2,481,654 | 477,305 | 156,238 | 27,225,272 |
Spartan Total Market Index Fund Investor Class | 69,598 | 184 | - | 184 | 74,401 |
Spartan U.S. Bond Index Fund Investor Class | 28,881,813 | 7,584,731 | 4,538,394 | 371,509 | 32,704,730 |
VIP Energy Portfolio Investor Class | 408,751 | 2,309 | - | - | 472,351 |
VIP Mid Cap Portfolio Investor Class | 13,852 | 215 | - | - | 14,555 |
Total | $ 332,413,499 | $ 185,564,945 | $ 146,282,909 | $ 981,809 | $ 382,240,263 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 85% Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $313,685,073) - See accompanying schedule | | $ 382,240,263 |
Cash | | 6 |
Receivable for investments sold | | 9,400,000 |
Receivable for fund shares sold | | 766,689 |
Total assets | | 392,406,958 |
| | |
Liabilities | | |
Payable for investments purchased | $ 10,169,919 | |
Payable for fund shares redeemed | 953 | |
Accrued management fee | 62,952 | |
Distribution and service plan fees payable | 1,004 | |
Total liabilities | | 10,234,828 |
| | |
Net Assets | | $ 382,172,130 |
Net Assets consist of: | | |
Paid in capital | | $ 314,090,406 |
Undistributed net investment income | | 619,774 |
Accumulated undistributed net realized gain (loss) on investments | | (1,093,240) |
Net unrealized appreciation (depreciation) on investments | | 68,555,190 |
Net Assets | | $ 382,172,130 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($258,531 ÷ 20,404 shares) | | $ 12.67 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($8,058,461 ÷ 638,371 shares) | | $ 12.62 |
| | |
Investor Class:
Net Asset Value, offering price and redemption price per share ($373,855,138 ÷ 29,488,883 shares) | | $ 12.68 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP FundsManager 85% Portfolio
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 981,809 |
| | |
Expenses | | |
Management fee | $ 444,877 | |
Distribution and service plan fees | 9,512 | |
Independent trustees' compensation | 665 | |
Total expenses before reductions | 455,054 | |
Expense reductions | (93,019) | 362,035 |
Net investment income (loss) | | 619,774 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | 12,026,344 | |
Capital gain distributions from underlying funds | 6,826,507 | |
Total net realized gain (loss) | | 18,852,851 |
Change in net unrealized appreciation (depreciation) on underlying funds | | (1,481,614) |
Net gain (loss) | | 17,371,237 |
Net increase (decrease) in net assets resulting from operations | | $ 17,991,011 |
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 619,774 | $ 2,692,096 |
Net realized gain (loss) | 18,852,851 | 30,434,024 |
Change in net unrealized appreciation (depreciation) | (1,481,614) | 33,277,740 |
Net increase (decrease) in net assets resulting from operations | 17,991,011 | 66,403,860 |
Distributions to shareholders from net investment income | - | (2,700,538) |
Distributions to shareholders from net realized gain | - | (3,433,717) |
Total distributions | - | (6,134,255) |
Share transactions - net increase (decrease) | 31,821,598 | 40,580,804 |
Total increase (decrease) in net assets | 49,812,609 | 100,850,409 |
| | |
Net Assets | | |
Beginning of period | 332,359,521 | 231,509,112 |
End of period (including undistributed net investment income of $619,774 and undistributed net investment income of $0, respectively) | $ 382,172,130 | $ 332,359,521 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.07 | $ 9.62 | $ 8.57 | $ 9.19 | $ 8.02 | $ 6.32 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .02 | .11 | .12 | .11 | .10 | .11 |
Net realized and unrealized gain (loss) | .58 | 2.57 | 1.09 | (.60) | 1.19 | 1.70 |
Total from investment operations | .60 | 2.68 | 1.21 | (.49) | 1.29 | 1.81 |
Distributions from net investment income | - | (.10) | (.13) | (.11) | (.10) | (.10) |
Distributions from net realized gain | - | (.13) | (.03) | (.02) | (.02) | (.01) |
Total distributions | - | (.23) | (.16) | (.13) | (.12) | (.11) |
Net asset value, end of period | $ 12.67 | $ 12.07 | $ 9.62 | $ 8.57 | $ 9.19 | $ 8.02 |
Total ReturnB, C, D | 4.97% | 27.86% | 14.13% | (5.30)% | 16.07% | 28.56% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | .35%A | 1.00% | 1.25% | 1.23% | 1.20% | 1.53% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 259 | $ 242 | $ 149 | $ 183 | $ 108 | $ 112 |
Portfolio turnover rateF | 82%A | 51% | 50% | 26% | 38% | 66% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.03 | $ 9.60 | $ 8.55 | $ 9.17 | $ 8.00 | $ 6.32 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .01 | .09 | .10 | .10 | .09 | .10 |
Net realized and unrealized gain (loss) | .58 | 2.55 | 1.10 | (.60) | 1.19 | 1.68 |
Total from investment operations | .59 | 2.64 | 1.20 | (.50) | 1.28 | 1.78 |
Distributions from net investment income | - | (.09) | (.11) | (.10) | (.09) | (.09) |
Distributions from net realized gain | - | (.13) | (.03) | (.02) | (.02) | (.01) |
Total distributions | - | (.21)I | (.15)H | (.12) | (.11) | (.10) |
Net asset value, end of period | $ 12.62 | $ 12.03 | $ 9.60 | $ 8.55 | $ 9.17 | $ 8.00 |
Total ReturnB, C, D | 4.90% | 27.54% | 14.01% | (5.44)% | 16.00% | 28.17% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .50%A | .50% | .50% | .50% | .50% | .50% |
Expenses net of fee waivers, if any | .35%A | .35% | .35% | .35% | .35% | .35% |
Expenses net of all reductions | .35%A | .35% | .35% | .35% | .35% | .35% |
Net investment income (loss) | .20%A | .85% | 1.10% | 1.08% | 1.05% | 1.38% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 8,058 | $ 6,862 | $ 4,812 | $ 3,574 | $ 2,384 | $ 886 |
Portfolio turnover rateF | 82%A | 51% | 50% | 26% | 38% | 66% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
H Total distributions of $.15 per share is comprised of distributions from net investment income of $.113 and distributions from net realized gain of $.033 per share.
I Total distributions of $.21 per share is comprised of distributions from net investment income of $.085 and distributions from net realized gain of $.128 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Investor Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.07 | $ 9.63 | $ 8.58 | $ 9.20 | $ 8.02 | $ 6.32 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .02 | .11 | .12 | .11 | .10 | .11 |
Net realized and unrealized gain (loss) | .59 | 2.56 | 1.09 | (.60) | 1.20 | 1.70 |
Total from investment operations | .61 | 2.67 | 1.21 | (.49) | 1.30 | 1.81 |
Distributions from net investment income | - | (.10) | (.13) | (.11) | (.10) | (.10) |
Distributions from net realized gain | - | (.13) | (.03) | (.02) | (.02) | (.01) |
Total distributions | - | (.23) | (.16) | (.13) | (.12) | (.11) |
Net asset value, end of period | $ 12.68 | $ 12.07 | $ 9.63 | $ 8.58 | $ 9.20 | $ 8.02 |
Total ReturnB, C, D | 5.05% | 27.73% | 14.11% | (5.29)% | 16.20% | 28.56% |
Ratios to Average Net Assets F, G | | | | | | |
Expenses before reductions | .25%A | .25% | .25% | .25% | .25% | .25% |
Expenses net of fee waivers, if any | .20%A | .20% | .20% | .20% | .20% | .20% |
Expenses net of all reductions | .20%A | .20% | .20% | .20% | .20% | .20% |
Net investment income (loss) | .35%A | 1.00% | 1.25% | 1.23% | 1.20% | 1.53% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 373,855 | $ 325,256 | $ 226,548 | $ 231,895 | $ 225,225 | $ 180,463 |
Portfolio turnover rateF | 82%A | 51% | 50% | 26% | 38% | 66% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class but do not include expenses of the underlying funds in which the Fund invests.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2014 (Unaudited)
1. Organization.
VIP FundsManager® 20% Portfolio, VIP FundsManager 50% Portfolio, VIP FundsManager 60% Portfolio, VIP FundsManager 70% Portfolio, and VIP FundsManager 85% Portfolio (the Funds) are funds of Variable Insurance Products Fund V (the Trust). 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. Each Fund is authorized to issue an unlimited number of shares. The Funds invest primarily in a combination of other Fidelity equity, fixed income, and short-term funds (the Underlying Funds) managed by Fidelity Management & Research Company (FMR). Shares of each Fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. Each Fund offers three classes of shares: Service Class shares, Service Class 2 shares, and Investor Class shares. All classes have equal rights and voting privileges, except for matters affecting a single class.
2. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Funds:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Each Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value each Fund's investments by major category are as follows. Investments in the Underlying Funds are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Investment Transactions and Income. For financial reporting purposes, the Funds' 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. Income and capital gain distributions from the Underlying Funds, if any, are recorded on the ex-dividend date. Distributions from the Underlying Funds that are deemed to be return of capital are recorded as a reduction of cost of investments.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of each Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of each Fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expenses included in the accompanying financial statements reflect the expenses of each Fund and do not include any expenses associated with the Underlying Funds. Although not included in each Fund's expenses, each Fund indirectly bears its proportionate share of the Underlying Funds' expenses through the impact of these expenses on each Underlying Fund's NAV. 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, each Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Semiannual Report
2. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to the short-term gain distributions from the Underlying Funds, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows for each Fund:
| Tax cost | Gross unrealized
appreciation | Gross unrealized
depreciation | Net unrealized
appreciation
(depreciation) on
securities and
other investments |
VIP FundsManager 20% Portfolio | $ 692,417,641 | $ 53,238,316 | $ (2,109,185) | $ 51,129,131 |
VIP FundsManager 50% Portfolio | 3,905,866,971 | 427,827,790 | (11,776,285) | 416,051,505 |
VIP FundsManager 60% Portfolio | 5,423,689,327 | 1,232,921,923 | (16,970,980) | 1,215,950,943 |
VIP FundsManager 70% Portfolio | 800,650,351 | 183,589,432 | (1,311,987) | 182,277,445 |
VIP FundsManager 85% Portfolio | 313,946,590 | 68,992,748 | (699,075) | 68,293,673 |
Capital loss carryforwards are only available to offset future capital gains of the Funds to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Funds are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
| Fiscal year of
expiration 2017 |
VIP FundsManager 70% Portfolio | $ (58,222,450) |
VIP FundsManager 85% Portfolio | (19,741,105) |
3. Purchases and Redemptions of Underlying Fund Shares.
Purchases and redemptions of the Underlying Fund shares are noted in the table below.
| Purchases ($) | Redemptions ($) |
VIP FundsManager 20% Portfolio | 110,521,654 | 78,027,183 |
VIP FundsManager 50% Portfolio | 1,191,566,166 | 392,100,354 |
VIP FundsManager 60% Portfolio | 1,259,119,631 | 1,203,790,399 |
VIP FundsManager 70% Portfolio | 313,551,186 | 235,972,304 |
VIP FundsManager 85% Portfolio | 185,564,945 | 146,282,909 |
4. Fees and Other Transactions with Affiliates.
Management Fee. Strategic Advisers, Inc. (the investment adviser), an affiliate of FMR, provides the funds with investment management related services. For these services each fund pays a monthly management fee to the investment adviser. The management fee is based on an annual rate of .25% of each fund's average net assets. The management fee is reduced by an amount equal to the fees and expenses paid by the fund to the independent Trustees.
The investment adviser has contractually agreed to waive 0.05% of its management fee, thereby limiting each fund's management fee to an annual rate of 0.20% of average net assets, until April 30, 2015.
Other Transactions. The investment adviser has entered into an administration agreement with FMR under which FMR provides management and administrative services (other than investment advisory services) necessary for the operation of each Fund. Pursuant to this agreement, FMR pays all expenses of each Fund, excluding distribution and service fees, compensation of the independent Trustees and certain other expenses such as interest expense. FMR also contracts with other Fidelity companies to perform the services necessary for the operation of each Fund.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Funds have adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.
For the period, total fees, all of which were reallowed to insurance companies for the distribution of shares and providing shareholder support services were as follows:
| Service
Class | Service
Class 2 | Total |
VIP FundsManager 20% Portfolio | $ 37 | $ 1,593 | $ 1,630 |
VIP FundsManager 50% Portfolio | 45 | 112,813 | 112,858 |
VIP FundsManager 60% Portfolio | 38 | 490,091 | 490,129 |
VIP FundsManager 70% Portfolio | 56 | 8,560 | 8,616 |
VIP FundsManager 85% Portfolio | 122 | 9,390 | 9,512 |
5. Expense Reductions.
The investment adviser contractually agreed to limit each funds' management fee to an annual rate of 0.20% of each funds' average net assets until April 30, 2015. For the period, each fund's management fees were reduced by the following amounts:
| Management Fee Waiver |
VIP FundsManager 20% Portfolio | $ 179,008 |
VIP FundsManager 50% Portfolio | 958,314 |
VIP FundsManager 60% Portfolio | 1,613,481 |
VIP FundsManager 70% Portfolio | 229,507 |
VIP FundsManager 85% Portfolio | 89,139 |
In addition, FMR has contractually agreed to reimburse 0.10% of class-level expenses for each fund's Service Class and Service Class 2. During the period, this reimbursement reduced each fund's Service Class and Service Class 2's expenses by the following amounts:
| Reimbursement |
VIP FundsManager 20% Portfolio | |
Service Class | $ 37 |
Service Class 2 | 638 |
VIP FundsManager 50% Portfolio | |
Service Class | 46 |
Service Class 2 | 45,118 |
VIP FundsManager 60% Portfolio | |
Service Class | 38 |
Service Class 2 | 196,137 |
VIP FundsManager 70% Portfolio | |
Service Class | 56 |
Service Class 2 | 3,425 |
VIP FundsManager 85% Portfolio | |
Service Class | 122 |
Service Class 2 | 3,758 |
Semiannual Report
6. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
June 30,
2014 | Year ended
December 31,
2013 |
VIP FundsManager 20% Portfolio | | |
From net investment income | | |
Service Class | $ - | $ 894 |
Service Class 2 | - | 12,626 |
Investor Class | - | 8,440,466 |
Total | $ - | $ 8,453,986 |
From net realized gain | | |
Service Class | 591 | 1,512 |
Service Class 2 | 9,844 | 25,038 |
Investor Class | 5,691,942 | 14,276,125 |
Total | $ 5,702,377 | $ 14,302,675 |
VIP FundsManager 50% Portfolio | | |
From net investment income | | |
Service Class | - | 755 |
Service Class 2 | - | 712,942 |
Investor Class | - | 31,151,492 |
Total | $ - | $ 31,865,189 |
From net realized gain | | |
Service Class | 62 | 427 |
Service Class 2 | 68,251 | 477,745 |
Investor Class | 2,622,260 | 17,607,365 |
Total | $ 2,690,573 | $ 18,085,537 |
VIP FundsManager 60% Portfolio | | |
From net investment income | | |
Service Class | - | 847 |
Service Class 2 | - | 3,604,593 |
Investor Class | - | 65,904,476 |
Total | $ - | $ 69,509,916 |
From net realized gain | | |
Service Class | 1,301 | 2,688 |
Service Class 2 | 6,584,740 | 12,440,936 |
Investor Class | 103,828,333 | 209,904,397 |
Total | $ 110,414,374 | $ 222,348,021 |
VIP FundsManager 70% Portfolio | | |
From net investment income | | |
Service Class | - | 932 |
Service Class 2 | - | 59,847 |
Investor Class | - | 8,833,266 |
Total | $ - | $ 8,894,045 |
From net realized gain | | |
Service Class | - | 669 |
Service Class 2 | - | 49,318 |
Investor Class | - | 6,340,006 |
Total | $ - | $ 6,389,993 |
VIP FundsManager 85% Portfolio | | |
From net investment income | | |
Service Class | - | 1,972 |
Service Class 2 | - | 47,174 |
Investor Class | - | 2,651,392 |
Total | $ - | $ 2,700,538 |
From net realized gain | | |
Service Class | - | 2,499 |
Service Class 2 | - | 71,038 |
Investor Class | - | 3,360,180 |
Total | $ - | $ 3,433,717 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended June 30,
2014 | Year ended
December 31,
2013 | Six months ended June 30,
2014 | Year ended
December 31,
2013 |
VIP FundsManager 20% Portfolio | | | | |
Service Class | | | | |
Shares sold | 281 | 4,335 | $ 3,197 | $ 49,173 |
Reinvestment of distributions | 52 | 213 | 591 | 2,406 |
Shares redeemed | (160) | (4,569) | (1,825) | (52,347) |
Net increase (decrease) | 173 | (21) | $ 1,963 | $ (768) |
Service Class 2 | | | | |
Shares sold | 18,741 | 35,304 | $ 214,146 | $ 399,373 |
Reinvestment of distributions | 870 | 3,336 | 9,844 | 37,664 |
Shares redeemed | (2,652) | (47,827) | (30,180) | (543,206) |
Net increase (decrease) | 16,959 | (9,187) | $ 193,810 | $ (106,169) |
Investor Class | | | | |
Shares sold | 3,748,405 | 8,431,513 | $ 42,798,267 | $ 95,563,353 |
Reinvestment of distributions | 502,822 | 2,009,790 | 5,691,942 | 22,716,591 |
Shares redeemed | (1,599,515) | (7,802,750) | (18,221,289) | (88,559,938) |
Net increase (decrease) | 2,651,712 | 2,638,553 | $ 30,268,920 | $ 29,720,006 |
VIP FundsManager 50% Portfolio | | | | |
Service Class | | | | |
Shares sold | 1,357 | 473 | $ 16,447 | $ 5,428 |
Reinvestment of distributions | 5 | 99 | 62 | 1,182 |
Shares redeemed | (729) | (707) | (9,065) | (8,141) |
Net increase (decrease) | 633 | (135) | $ 7,444 | $ (1,531) |
Service Class 2 | | | | |
Shares sold | 647,653 | 1,076,347 | $ 7,778,162 | $ 12,153,363 |
Reinvestment of distributions | 5,673 | 99,723 | 68,251 | 1,190,687 |
Shares redeemed | (721,879) | (1,443,409) | (8,751,438) | (16,222,057) |
Net increase (decrease) | (68,553) | (267,339) | $ (905,025) | $ (2,878,007) |
Investor Class | | | | |
Shares sold | 62,915,810 | 148,703,643 | $ 764,392,842 | $ 1,688,464,574 |
Reinvestment of distributions | 217,254 | 4,073,422 | 2,622,260 | 48,758,856 |
Shares redeemed | (2,022,340) | (3,312,150) | (24,595,690) | (37,524,917) |
Net increase (decrease) | 61,110,724 | 149,464,915 | $ 742,419,412 | $ 1,699,698,513 |
VIP FundsManager 60% Portfolio | | | | |
Service Class | | | | |
Shares sold | 239 | 453 | $ 2,809 | $ 5,145 |
Reinvestment of distributions | 112 | 305 | 1,301 | 3,535 |
Shares redeemed | (257) | (698) | (3,010) | (8,130) |
Net increase (decrease) | 94 | 60 | $ 1,100 | $ 550 |
Service Class 2 | | | | |
Shares sold | 4,210,087 | 8,672,414 | $ 49,584,583 | $ 98,156,461 |
Reinvestment of distributions | 565,699 | 1,384,119 | 6,584,740 | 16,045,529 |
Shares redeemed | (2,071,119) | (2,896,140) | (24,376,213) | (32,768,682) |
Net increase (decrease) | 2,704,667 | 7,160,393 | $ 31,793,110 | $ 81,433,308 |
Investor Class | | | | |
Shares sold | 5,614,519 | 8,809,786 | $ 66,331,130 | $ 99,670,330 |
Reinvestment of distributions | 8,904,660 | 23,801,207 | 103,828,333 | 275,808,873 |
Shares redeemed | (14,102,456) | (26,609,299) | (166,259,385) | (299,708,642) |
Net increase (decrease) | 416,723 | 6,001,694 | $ 3,900,078 | $ 75,770,561 |
Semiannual Report
7. Share Transactions - continued
| Shares | Dollars |
| Six months ended June 30,
2014 | Year ended
December 31,
2013 | Six months ended June 30,
2014 | Year ended
December 31,
2013 |
VIP FundsManager 70% Portfolio | | | | |
Service Class | | | | |
Shares sold | 2,674 | 462 | $ 31,145 | $ 5,187 |
Reinvestment of distributions | - | 134 | - | 1,601 |
Shares redeemed | (767) | (696) | (9,412) | (7,956) |
Net increase (decrease) | 1,907 | (100) | $ 21,733 | $ (1,168) |
Service Class 2 | | | | |
Shares sold | 41,677 | 104,492 | $ 504,578 | $ 1,136,389 |
Reinvestment of distributions | - | 9,150 | - | 109,165 |
Shares redeemed | (31,422) | (52,752) | (379,387) | (591,226) |
Net increase (decrease) | 10,255 | 60,890 | $ 125,191 | $ 654,328 |
Investor Class | | | | |
Shares sold | 6,038,274 | 11,344,976 | $ 73,329,110 | $ 126,241,051 |
Reinvestment of distributions | - | 1,268,668 | - | 15,173,272 |
Shares redeemed | (1,082,953) | (2,230,299) | (13,141,964) | (24,940,583) |
Net increase (decrease) | 4,955,321 | 10,383,345 | $ 60,187,146 | $ 116,473,740 |
VIP FundsManager 85% Portfolio | | | | |
Service Class | | | | |
Shares sold | 1,503 | 5,300 | $ 18,254 | $ 58,028 |
Reinvestment of distributions | - | 372 | - | 4,471 |
Shares redeemed | (1,117) | (1,178) | (13,313) | (12,542) |
Net increase (decrease) | 386 | 4,494 | $ 4,941 | $ 49,957 |
Service Class 2 | | | | |
Shares sold | 96,168 | 146,877 | $ 1,163,876 | $ 1,596,213 |
Reinvestment of distributions | - | 9,876 | - | 118,212 |
Shares redeemed | (28,272) | (87,603) | (350,822) | (959,046) |
Net increase (decrease) | 67,896 | 69,150 | $ 813,054 | $ 755,379 |
Investor Class | | | | |
Shares sold | 3,277,391 | 5,435,173 | $ 39,900,945 | $ 60,347,651 |
Reinvestment of distributions | - | 500,131 | - | 6,011,572 |
Shares redeemed | (731,187) | (2,519,325) | (8,897,342) | (26,583,755) |
Net increase (decrease) | 2,546,204 | 3,415,979 | $ 31,003,603 | $ 39,775,468 |
8. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
The Funds do not invest in the Underlying Funds for the purpose of exercising management or control; however, investments by the Funds within their principal investment strategies may represent a significant portion of the Underlying Fund's net assets.
At the end of the period, the following Funds were each the owners of record of 10% or more of the total outstanding shares of the Underlying Funds.
Fund | VIP FundsManager 50% | VIP FundsManager 60% |
Fidelity Banking Portfolio | - | 24% |
Fidelity Industrial Equipment Portfolio | - | 24% |
Fidelity Consumer Discretionary Portfolio | - | 19% |
Fidelity Insurance Portfolio | - | 18% |
Fidelity Financial Services Portfolio | - | 18% |
Fidelity Computers Portfolio | - | 14% |
Fidelity Industrials Portfolio | - | 13% |
Fidelity International Value Fund | - | 12% |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. Other - continued
Fund | VIP FundsManager 50% | VIP FundsManager 60% |
Fidelity Construction and Housing Portfolio | - | 12% |
Fidelity Consumer Finance Portfolio | - | 12% |
Spartan U.S. Bond Index Fund | - | 11% |
Fidelity Brokerage and Investment Management Portfolio | 10% | - |
The Funds, in aggregate, were the owners of record of more than 20% of the total outstanding shares of the following Underlying Funds.
Fund | % of shares held |
Fidelity Banking Portfolio | 38% |
Fidelity Industrial Equipment Portfolio | 33% |
Fidelity Consumer Discretionary Portfolio | 32% |
Fidelity Insurance Portfolio | 31% |
Fidelity Financial Services Portfolio | 27% |
Fidelity Industrials Portfolio | 24% |
Fidelity Brokerage and Investment Management Portfolio | 23% |
Spartan U.S. Bond Index Fund | 23% |
Fidelity Construction and Housing Portfolio | 21% |
Fidelity Computers Portfolio | 21% |
In addition, at the end of the period, the investment adviser or its affiliates and certain otherwise unaffiliated shareholders each were owners of record of more than 10% of the outstanding shares of the following funds:
| Affiliated % | Number of
Unaffiliated
Shareholders | Unaffiliated
Shareholders % |
VIP FundsManager 20% Portfolio | 100% | - | - |
VIP FundsManager 50% Portfolio | 29% | 1 | 64% |
VIP FundsManager 60% Portfolio | 28% | 1 | 62% |
VIP FundsManager 70% Portfolio | 99% | - | - |
VIP FundsManager 85% Portfolio | 98% | - | - |
Semiannual Report
Investment Adviser
Strategic Advisers, Inc.
Boston, MA
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Bank of New York Mellon
New York, NY
VIPFM-SANN-0814
1.833444.108
Fidelity® Variable Insurance Products:
Investment Grade Bond Portfolio
Semiannual Report
June 30, 2014
(Fidelity Cover Art)
Contents
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. |
Fidelity® VIP Investment Grade Central Fund Financial Statements | 19 | Complete list of investments and financial statements for Fidelity® VIP Investment Grade Central Fund. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
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. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs 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 (January 1, 2014 to June 30, 2014).
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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. 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.
| Annualized Expense Ratio B | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
Initial Class | .42% | | | |
Actual | | $ 1,000.00 | $ 1,041.60 | $ 2.13 |
HypotheticalA | | $ 1,000.00 | $ 1,022.71 | $ 2.11 |
Service Class | .52% | | | |
Actual | | $ 1,000.00 | $ 1,042.00 | $ 2.63 |
HypotheticalA | | $ 1,000.00 | $ 1,022.22 | $ 2.61 |
Service Class 2 | .67% | | | |
Actual | | $ 1,000.00 | $ 1,040.00 | $ 3.39 |
HypotheticalA | | $ 1,000.00 | $ 1,021.47 | $ 3.36 |
Investor Class | .45% | | | |
Actual | | $ 1,000.00 | $ 1,041.70 | $ 2.28 |
HypotheticalA | | $ 1,000.00 | $ 1,022.56 | $ 2.26 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in each Class' annualized expense ratio.
In addition to the expenses noted above, the Fund also indirectly bears its proportional share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying non-money market Fidelity Central Funds as of their most recent fiscal half year were less than .01%.
Semiannual Report
Investment Changes (Unaudited)
Quality Diversification (% of fund's net assets) |
As of June 30, 2014 | As of December 31, 2013 |
 | U.S. Government and
U.S. Government
Agency Obligations 49.9% | | | U.S. Government and
U.S. Government
Agency Obligations 51.5% | |
 | AAA 4.0% | | | AAA 4.5% | |
 | AA 2.9% | | | AA 2.8% | |
 | A 8.9% | | | A 9.0% | |
 | BBB 25.1% | | | BBB 23.7% | |
 | BB and Below 3.7% | | | BB and Below 3.6% | |
 | Not Rated 0.1% | | | Not Rated 0.1% | |
 | Short-Term
Investments and
Net Other Assets 5.4% | | | Short-Term
Investments and
Net Other Assets 4.8% | |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes. Securities rated BB or below were rated investment grade at the time of acquisition. The information in the above table is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's fixed-income central funds. |
Weighted Average Maturity as of June 30, 2014 |
| | 6 months ago |
Years | 6.7 | 6.7 |
This is a weighted average of all the maturities of the securities held in a fund. Weighted Average Maturity (WAM) can be used as a measure of sensitivity to interest rate changes and market changes. Generally, the longer the maturity, the greater the sensitivity to such changes. WAM is based on the dollar-weighted average length of time until principal payments must be paid. Depending on the types of securities held in a fund, certain maturity shortening devices (e.g., demand features, interest rate resets, and call options) may be taken into account when calculating the WAM. |
Duration as of June 30, 2014 |
| | 6 months ago |
Years | 5.1 | 5.4 |
Duration is a measure of a security's price sensitivity to changes in interest rates. Duration differs from maturity in that it considers a security's interest payments in addition to the amount of time until the security reaches maturity, and also takes into account certain maturity shortening features (e.g., demand features, interest rate resets, and call options) when applicable. Securities with longer durations generally tend to be more sensitive to interest rate changes than securities with shorter durations. A fund with a longer average duration generally can be expected to be more sensitive to interest rate changes than a fund with a shorter average duration. |
Asset Allocation (% of fund's net assets) |
As of June 30, 2014* | As of December 31, 2013** |
| Corporate Bonds 33.2% | | | Corporate Bonds 31.4% | |
 | U.S. Government and
U.S. Government
Agency Obligations 49.9% | | | U.S. Government and
U.S. Government
Agency Obligations 51.5% | |
| Asset-Backed Securities 0.7% | | | Asset-Backed Securities 1.0% | |
| CMOs and Other Mortgage Related Securities 7.4% | | | CMOs and Other Mortgage Related Securities 8.3% | |
| Municipal Bonds 2.6% | | | Municipal Bonds 2.3% | |
 | Other Investments 0.8% | | | Other Investments 0.7% | |
| Short-Term
Investments and
Net Other Assets
(Liabilities) 5.4% | | | Short-Term
Investments and
Net Other Assets
(Liabilities) 4.8% | |
* Foreign investments | 6.4% | | ** Foreign investments | 5.1% | |
* Futures and Swaps | 0.0%† | | ** Futures and Swaps | 0.0%† | |
† Amount represents less than 0.1%
Percentages in the above tables are adjusted for the effect of TBA Sale Commitments. |
The information in the above table is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's fixed-income central funds. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. Fidelity VIP Investment Grade Central Fund's holding's and financial statements are included at the end of this report. |
Semiannual Report
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Fixed-Income Funds - 99.3% |
| Shares | | Value |
Fidelity Specialized High Income Central Fund (c) | 370,813 | | $ 40,133,068 |
Fidelity VIP Investment Grade Central Fund (d) | 27,872,849 | | 2,962,326,356 |
TOTAL FIXED-INCOME FUNDS (Cost $2,924,877,538) |
3,002,459,424
|
Nonconvertible Bonds - 0.0% |
| Principal
Amount | | |
FINANCIALS - 0.0% |
Real Estate Investment Trusts - 0.0% |
CommonWealth REIT 5.875% 9/15/20 (Cost $583,208) | | $ 546,000 | |
594,424
|
Asset-Backed Securities - 0.0% |
|
Ally Master Owner Trust Series 2012-3 Class A2, 1.21% 6/15/17
(Cost $439,951) | | 440,000 | |
442,897
|
Collateralized Mortgage Obligations - 0.1% |
|
Private Sponsor - 0.1% |
MASTR Adjustable Rate Mortgages Trust Series 2007-3 Class 22A2, 0.362% 5/25/47 (b) | | 351,751 | | 289,694 |
Merrill Lynch Alternative Note Asset Trust floater Series 2007-OAR1 Class A1, 0.322% 2/25/37 (b) | | 987,854 | | 907,047 |
Wells Fargo Mortgage Backed Securities Trust Series 2005-AR2 Class 1A2, 2.6153% 3/25/35 (b) | | 681,278 | | 511,915 |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $749,737) |
1,708,656
|
Money Market Funds - 0.6% |
| Shares | | Value |
Fidelity Cash Central Fund, 0.11% (a)
(Cost $17,128,885) | 17,128,885 | | $ 17,128,885 |
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $2,943,779,319) | | 3,022,334,286 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (91,924) |
NET ASSETS - 100% | $ 3,022,242,362 |
Legend |
(a) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(b) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end. |
(c) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's website at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(d) Affiliated central fund that is available only to investment companies and other accounts managed by Fidelity Investments. Fidelity VIP Investment Grade Central Fund's investments and financial statements are included at the end of this report as an attachment. |
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 | $ 6,199 |
Fidelity Specialized High Income Central Fund | 1,008,835 |
Fidelity VIP Investment Grade Central Fund | 42,758,921 |
Total | $ 43,773,955 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value,
beginning of
period | Purchases | Sales
Proceeds | Value,
end of
period | % ownership,
end of
period |
Fidelity Specialized High Income Central Fund | $ 38,285,173 | $ 1,008,835 | $ - | $ 40,133,068 | 8.5% |
Fidelity VIP Investment Grade Central Fund | 2,902,063,071 | 42,756,304 | 65,984,046 | 2,962,326,356 | 71.1% |
Total | $ 2,940,348,244 | $ 43,765,139 | $ 65,984,046 | $ 3,002,459,424 | |
Other Information |
The following is a summary of the inputs used, as of June 30, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | | | | |
Corporate Bonds | $ 594,424 | $ - | $ 594,424 | $ - |
Asset-Backed Securities | 442,897 | - | 442,897 | - |
Collateralized Mortgage Obligations | 1,708,656 | - | 1,708,656 | - |
Fixed-Income Funds | 3,002,459,424 | 3,002,459,424 | - | - |
Money Market Funds | 17,128,885 | 17,128,885 | - | - |
Total Investments in Securities: | $ 3,022,334,286 | $ 3,019,588,309 | $ 2,745,977 | $ - |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $1,772,896) | $ 2,745,977 | |
Fidelity Central Funds (cost $2,942,006,423) | 3,019,588,309 | |
Total Investments (cost $2,943,779,319) | | $ 3,022,334,286 |
Receivable for fund shares sold | | 3,130,237 |
Interest receivable | | 11,211 |
Distributions receivable from Fidelity Central Funds | | 1,286 |
Other receivables | | 238,119 |
Total assets | | 3,025,715,139 |
| | |
Liabilities | | |
Payable for investments purchased | $ 236,818 | |
Payable for fund shares redeemed | 1,905,432 | |
Accrued management fee | 779,773 | |
Transfer agent fee payable | 187,884 | |
Distribution and service plan fees payable | 253,473 | |
Other affiliated payables | 80,250 | |
Other payables and accrued expenses | 29,147 | |
Total liabilities | | 3,472,777 |
| | |
Net Assets | | $ 3,022,242,362 |
Net Assets consist of: | | |
Paid in capital | | $ 2,909,338,378 |
Undistributed net investment income | | 36,090,879 |
Accumulated undistributed net realized gain (loss) on investments | | (1,741,862) |
Net unrealized appreciation (depreciation) on investments | | 78,554,967 |
Net Assets | | $ 3,022,242,362 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($1,010,133,489 ÷ 78,478,781 shares) | | $ 12.87 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($268,716,905 ÷ 21,082,552 shares) | | $ 12.75 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($1,110,723,615 ÷ 88,280,990 shares) | | $ 12.58 |
| | |
Investor Class:
Net Asset Value, offering price and redemption price per share ($632,668,353 ÷ 49,317,478 shares) | | $ 12.83 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Interest | | $ 175,026 |
Income from Fidelity Central Funds | | 43,773,955 |
Total income | | 43,948,981 |
| | |
Expenses | | |
Management fee | $ 4,642,691 | |
Transfer agent fees | 1,135,440 | |
Distribution and service plan fees | 1,533,838 | |
Accounting fees and expenses | 477,144 | |
Custodian fees and expenses | 11,614 | |
Independent trustees' compensation | 5,812 | |
Registration fees | 4,681 | |
Audit | 27,888 | |
Legal | 4,992 | |
Miscellaneous | 13,854 | |
Total expenses | | 7,857,954 |
Net investment income (loss) | | 36,091,027 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 214,356 | |
Fidelity Central Funds | (743,942) | |
Total net realized gain (loss) | | (529,586) |
Change in net unrealized appreciation (depreciation) on investment securities | | 84,961,703 |
Net gain (loss) | | 84,432,117 |
Net increase (decrease) in net assets resulting from operations | | $ 120,523,144 |
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 36,091,027 | $ 70,198,216 |
Net realized gain (loss) | (529,586) | 38,034,115 |
Change in net unrealized appreciation (depreciation) | 84,961,703 | (170,719,353) |
Net increase (decrease) in net assets resulting from operations | 120,523,144 | (62,487,022) |
Distributions to shareholders from net investment income | - | (70,294,727) |
Distributions to shareholders from net realized gain | (956,268) | (37,771,525) |
Total distributions | (956,268) | (108,066,252) |
Share transactions - net increase (decrease) | (42,154,621) | (265,727,285) |
Total increase (decrease) in net assets | 77,412,255 | (436,280,559) |
| | |
Net Assets | | |
Beginning of period | 2,944,830,107 | 3,381,110,666 |
End of period (including undistributed net investment income of $36,090,879 and distributions in excess of net investment income of $148, respectively) | $ 3,022,242,362 | $ 2,944,830,107 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.36 | $ 13.06 | $ 12.97 | $ 12.83 | $ 12.48 | $ 11.84 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .160 | .295 | .318 | .431 | .443 | .510 |
Net realized and unrealized gain (loss) | .354 | (.526) | .443 | .492 | .528 | 1.266 |
Total from investment operations | .514 | (.231) | .761 | .923 | .971 | 1.776 |
Distributions from net investment income | - | (.310) | (.315) | (.436) | (.476) | (1.087) |
Distributions from net realized gain | (.004) | (.159) | (.356) | (.347) | (.145) | (.049) |
Total distributions | (.004) | (.469) | (.671) | (.783) | (.621) | (1.136) |
Net asset value, end of period | $ 12.87 | $ 12.36 | $ 13.06 | $ 12.97 | $ 12.83 | $ 12.48 |
Total ReturnB, C, D | 4.16% | (1.78)% | 5.90% | 7.33% | 7.80% | 15.72% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .42%A | .42% | .42% | .43% | .43% | .45% |
Expenses net of fee waivers, if any | .42%A | .42% | .42% | .42% | .42% | .45% |
Expenses net of all reductions | .42%A | .42% | .42% | .42% | .42% | .45% |
Net investment income (loss) | 2.55%A | 2.29% | 2.39% | 3.30% | 3.38% | 4.19% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,010,133 | $ 981,378 | $ 1,149,849 | $ 1,116,778 | $ 1,110,373 | $ 1,083,773 |
Portfolio turnover rate G | 3%A | 4% | 2% | 5% | 8% | 3% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
Financial Highlights - Service Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.24 | $ 12.94 | $ 12.86 | $ 12.73 | $ 12.39 | $ 11.75 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .152 | .280 | .302 | .415 | .427 | .495 |
Net realized and unrealized gain (loss) | .362 | (.523) | .436 | .485 | .521 | 1.262 |
Total from investment operations | .514 | (.243) | .738 | .900 | .948 | 1.757 |
Distributions from net investment income | - | (.298) | (.302) | (.423) | (.463) | (1.068) |
Distributions from net realized gain | (.004) | (.159) | (.356) | (.347) | (.145) | (.049) |
Total distributions | (.004) | (.457) | (.658) | (.770) | (.608) | (1.117) |
Net asset value, end of period | $ 12.75 | $ 12.24 | $ 12.94 | $ 12.86 | $ 12.73 | $ 12.39 |
Total ReturnB, C, D | 4.20% | (1.89)% | 5.77% | 7.21% | 7.68% | 15.67% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .52%A | .52% | .52% | .52% | .53% | .54% |
Expenses net of fee waivers, if any | .52%A | .52% | .52% | .52% | .52% | .54% |
Expenses net of all reductions | .52%A | .52% | .52% | .52% | .52% | .54% |
Net investment income (loss) | 2.45%A | 2.19% | 2.29% | 3.20% | 3.28% | 4.09% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 268,717 | $ 265,505 | $ 288,708 | $ 277,732 | $ 283,962 | $ 259,246 |
Portfolio turnover rateG | 3%A | 4% | 2% | 5% | 8% | 3% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.10 | $ 12.79 | $ 12.72 | $ 12.60 | $ 12.26 | $ 11.62 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .141 | .257 | .279 | .391 | .402 | .473 |
Net realized and unrealized gain (loss) | .343 | (.510) | .430 | .478 | .520 | 1.244 |
Total from investment operations | .484 | (.253) | .709 | .869 | .922 | 1.717 |
Distributions from net investment income | - | (.278) | (.283) | (.402) | (.437) | (1.028) |
Distributions from net realized gain | (.004) | (.159) | (.356) | (.347) | (.145) | (.049) |
Total distributions | (.004) | (.437) | (.639) | (.749) | (.582) | (1.077) |
Net asset value, end of period | $ 12.58 | $ 12.10 | $ 12.79 | $ 12.72 | $ 12.60 | $ 12.26 |
Total ReturnB, C, D | 4.00% | (1.99)% | 5.60% | 7.03% | 7.55% | 15.47% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .67%A | .67% | .67% | .67% | .68% | .69% |
Expenses net of fee waivers, if any | .67%A | .67% | .67% | .67% | .67% | .69% |
Expenses net of all reductions | .67%A | .67% | .67% | .67% | .67% | .69% |
Net investment income (loss) | 2.30%A | 2.04% | 2.14% | 3.05% | 3.13% | 3.94% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 1,110,724 | $ 1,115,493 | $ 1,198,326 | $ 972,651 | $ 1,011,652 | $ 1,240,935 |
Portfolio turnover rateG | 3%A | 4% | 2% | 5% | 8% | 3% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
Financial Highlights - Investor Class
| Six months ended June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.32 | $ 13.02 | $ 12.93 | $ 12.80 | $ 12.45 | $ 11.81 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .157 | .290 | .313 | .426 | .438 | .511 |
Net realized and unrealized gain (loss) | .357 | (.526) | .444 | .484 | .529 | 1.263 |
Total from investment operations | .514 | (.236) | .757 | .910 | .967 | 1.774 |
Distributions from net investment income | - | (.305) | (.311) | (.433) | (.472) | (1.085) |
Distributions from net realized gain | (.004) | (.159) | (.356) | (.347) | (.145) | (.049) |
Total distributions | (.004) | (.464) | (.667) | (.780) | (.617) | (1.134) |
Net asset value, end of period | $ 12.83 | $ 12.32 | $ 13.02 | $ 12.93 | $ 12.80 | $ 12.45 |
Total ReturnB, C, D | 4.17% | (1.82)% | 5.89% | 7.25% | 7.79% | 15.75% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .45%A | .45% | .46% | .46% | .46% | .48% |
Expenses net of fee waivers, if any | .45%A | .45% | .46% | .45% | .45% | .45% |
Expenses net of all reductions | .45%A | .45% | .46% | .45% | .45% | .45% |
Net investment income (loss) | 2.52%A | 2.26% | 2.36% | 3.27% | 3.35% | 4.18% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 632,668 | $ 582,454 | $ 744,227 | $ 612,611 | $ 537,936 | $ 523,032 |
Portfolio turnover rateG | 3%A | 4% | 2% | 5% | 8% | 3% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2014 (Unaudited)
1. Organization.
VIP Investment Grade Bond Portfolio (the Fund) is a fund of Variable Insurance Products Fund V (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. Shares of the Fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The Fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares, and Investor Class shares. All classes have equal rights and voting privileges, except for matters affecting a single class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
Based on its investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%. The following summarizes the Fund's investment in each non-money market Fidelity Central Fund.
Fidelity Central Fund | | Investment Manager | Investment Objective | | Investment Practices | Expense Ratio* |
Fidelity Specialized High Income Central Fund | | FMR Co., Inc. (FMRC) | Seeks a high level of current income by normally investing in income-producing debt securities, with an emphasis on lower-quality debt securities. | | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Restricted Securities | Less than .01% |
Fidelity VIP Investment Grade Central Fund | | FIMM | Seeks a high level of current income by normally investing in investment-grade debt securities and repurchase agreements. | | Delayed Delivery & When Issued Securities Repurchase Agreements Restricted Securities Swaps | Less than .01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
An unaudited holdings listing for each Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through each fund's investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds which contain the significant accounting policies (including investment valuation policies) of those funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
Semiannual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. Asset backed securities and collateralized mortgage obligations are valued by pricing vendors who utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of June 30, 2014, is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to the short-term gain distributions from the Underlying Funds, in-kind transactions, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation and losses deferred due to wash sales and excise tax regulations.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 142,383,961 |
Gross unrealized depreciation | (10,145,396) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 132,238,565 |
| |
Tax cost | $ 2,890,095,721 |
4. Purchases and Sales of Investments.
Purchases and sales of securities (including the Fixed-Income Central Funds), other than short-term securities, aggregated $44,349,992 and $69,584,300, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .31% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.
For the period, total fees, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services were as follows:
Service Class | $ 133,698 |
Service Class 2 | 1,400,140 |
| $ 1,533,838 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each class. Each class (with the exception of Investor Class) pays a fee for transfer agent services, typesetting, printing and mailing of shareholder reports, excluding mailing of proxy statements and out of pocket expenses, equal to an annual rate of .07% (.10% for Investor Class) of average net assets. For the period, transfer agent fees for each class, including out of pocket expenses, were as follows:
Initial Class | $ 350,203 |
Service Class | 91,854 |
Service Class 2 | 382,700 |
Investor Class | 310,683 |
| $ 1,135,440 |
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The fee is based on the level of average net assets for each month.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2,807 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
Semiannual Report
7. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
June 30, 2014 | Year ended
December 31, 2013 |
From net investment income | | |
Initial Class | $ - | $ 24,788,498 |
Service Class | - | 6,230,965 |
Service Class 2 | - | 24,850,468 |
Investor Class | - | 14,424,796 |
Total | $ - | $ 70,294,727 |
From net realized gain | | |
Initial Class | $ 314,272 | $ 12,714,101 |
Service Class | 85,886 | 3,324,575 |
Service Class 2 | 367,153 | 14,213,037 |
Investor Class | 188,957 | 7,519,812 |
Total | $ 956,268 | $ 37,771,525 |
8. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
June 30,
2014 | Year ended
December 31,
2013 | Six months ended
June 30,
2014 | Year ended
December 31,
2013 |
Initial Class | | | | |
Shares sold | 4,925,913 | 12,397,143 | $ 62,413,599 | $ 159,779,398 |
Reinvestment of distributions | 25,022 | 3,026,844 | 314,272 | 37,502,598 |
Shares redeemed | (5,881,925) | (24,071,551) | (74,316,665) | (308,354,985) |
Net increase (decrease) | (930,990) | (8,647,564) | $ (11,588,794) | $ (111,072,989) |
Service Class | | | | |
Shares sold | 1,031,338 | 2,416,244 | $ 12,905,511 | $ 30,836,373 |
Reinvestment of distributions | 6,904 | 778,138 | 85,886 | 9,555,540 |
Shares redeemed | (1,640,270) | (3,817,953) | (20,529,557) | (48,792,908) |
Net increase (decrease) | (602,028) | (623,571) | $ (7,538,160) | $ (8,400,995) |
Service Class 2 | | | | |
Shares sold | 4,073,709 | 12,430,324 | $ 50,094,626 | $ 156,751,818 |
Reinvestment of distributions | 29,874 | 3,220,404 | 367,153 | 39,063,505 |
Shares redeemed | (8,048,250) | (17,124,623) | (99,412,760) | (215,459,350) |
Net increase (decrease) | (3,944,667) | (1,473,895) | $ (48,950,981) | $ (19,644,027) |
Investor Class | | | | |
Shares sold | 4,879,794 | 6,898,022 | $ 61,628,722 | $ 88,686,246 |
Reinvestment of distributions | 15,092 | 1,776,891 | 188,957 | 21,944,608 |
Shares redeemed | (2,857,648) | (18,567,930) | (35,894,365) | (237,240,128) |
Net increase (decrease) | 2,037,238 | (9,893,017) | $ 25,923,314 | $ (126,609,274) |
9. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, the investment adviser or its affiliates were the owners of record of 24% of the total outstanding shares of the Fund and one otherwise unaffiliated shareholder was the owner of record of 19% of the total outstanding shares of the Fund.
Semiannual Report
The following are the financial statements for the Fidelity VIP Investment
Grade Central Fund as of June 30, 2014 which is a direct investment of
VIP Investment Grade Bond Portfolio.
Not Part of Financial Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including 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 (January 1, 2014 to June 30, 2014).
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. 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. 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.
| Annualized
Expense RatioB | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
Actual | .0018% | $ 1,000.00 | $ 1,044.00 | $ .01 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .01 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Not Part of Financial Report
Investment Changes (Unaudited)
Quality Diversification (% of fund's net assets) as of June 30, 2014 |
As of June 30, 2014 | As of December 31, 2013 |
| U.S. Government and
U.S. Government
Agency Obligations 50.7% | | | U.S. Government and
U.S. Government
Agency Obligations 52.2% | |
| AAA 4.1% | | | AAA 4.5% | |
| AA 2.9% | | | AA 2.9% | |
| A 9.1% | | | A 9.4% | |
| BBB 25.6% | | | BBB 23.8% | |
| BB and Below 2.4% | | | BB and Below 2.3% | |
| Not Rated 0.1% | | | Not Rated 0.1% | |
| Short-Term
Investments and
Net Other Assets 5.1% | | | Short-Term
Investments and
Net Other Assets 4.8% | |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes. Securities rated BB or below were rated investment grade at the time of acquisition. |
Weighted Average Maturity as of June 30, 2014 |
| | 6 months ago |
Years | 6.8 | 6.8 |
This is a weighted average of all the maturities of the securities held in a fund. Weighted Average Maturity (WAM) can be used as a measure of sensitivity to interest rate changes and market changes. Generally, the longer the maturity, the greater the sensitivity to such changes. WAM is based on the dollar-weighted average length of time until principal payments must be paid. Depending on the types of securities held in a fund, certain maturity shortening devices (e.g., demand features, interest rate resets, and call options) may be taken into account when calculating the WAM. |
Duration as of June 30, 2014 |
| | 6 months ago |
Years | 5.1 | 5.3 |
Duration is a measure of a security's price sensitivity to changes in interest rates. Duration differs from maturity in that it considers a security's interest payments in addition to the amount of time until the security reaches maturity, and also takes into account certain maturity shortening features (e.g., demand features, interest rate resets, and call options) when applicable. Securities with longer durations generally tend to be more sensitive to interest rate changes than securities with shorter durations. A fund with a longer average duration generally can be expected to be more sensitive to interest rate changes than a fund with a shorter average duration. |
Asset Allocation (% of fund's net assets) |
As of June 30, 2014* | As of December 31, 2013** |
| Corporate Bonds 32.7% | | | Corporate Bonds 30.5% | |
| U.S. Government and
U.S. Government
Agency Obligations 50.7% | | | U.S. Government and
U.S. Government
Agency Obligations 52.2% | |
| Asset-Backed Securities 0.7% | | | Asset-Backed Securities 1.0% | |
| CMOs and Other
Mortgage Related
Securities 7.4% | | | CMOs and Other
Mortgage Related
Securities 8.4% | |
| Municipal Bonds 2.7% | | | Municipal Bonds 2.4% | |
| Other Investments 0.7% | | | Other Investments 0.7% | |
| Short-Term
Investments and
Net Other Assets
(Liabilities) 5.1% | | | Short-Term
Investments and
Net Other Assets
(Liabilities) 4.8% | |
* Foreign investments | 6.3% | | ** Foreign investments | 5.1% | |
* Futures and Swaps | 0.0%† | | ** Futures and Swaps | 0.0%† | |
† Amount represents less than 0.1% |
Percentages in the above tables are adjusted for the effect of TBA Sale Commitments. |
Not Part of Financial Report
Investments June 30, 2014
Showing Percentage of Net Assets
Nonconvertible Bonds - 32.7% |
| Principal Amount | | Value |
CONSUMER DISCRETIONARY - 2.2% |
Automobiles - 0.3% |
Daimler Finance North America LLC: | | | | |
1.45% 8/1/16 (c) | | $ 2,724,000 | | $ 2,753,773 |
2.875% 3/10/21 (c) | | 8,000,000 | | 8,063,824 |
| | 10,817,597 |
Diversified Consumer Services - 0.1% |
Ingersoll-Rand Global Holding Co. Ltd.: | | | | |
2.875% 1/15/19 | | 416,000 | | 426,373 |
4.25% 6/15/23 | | 2,932,000 | | 3,082,813 |
| | 3,509,186 |
Media - 1.8% |
AOL Time Warner, Inc. 7.625% 4/15/31 | | 1,625,000 | | 2,230,103 |
Comcast Corp.: | | | | |
4.95% 6/15/16 | | 2,975,000 | | 3,216,558 |
6.45% 3/15/37 | | 1,410,000 | | 1,795,787 |
COX Communications, Inc. 3.25% 12/15/22 (c) | | 1,609,000 | | 1,574,789 |
DIRECTV Holdings LLC/DIRECTV Financing, Inc. 5.875% 10/1/19 | | 4,711,000 | | 5,478,582 |
Discovery Communications LLC: | | | | |
3.25% 4/1/23 | | 604,000 | | 592,545 |
6.35% 6/1/40 | | 2,421,000 | | 2,916,341 |
NBCUniversal, Inc.: | | | | |
5.15% 4/30/20 | | 3,234,000 | | 3,699,867 |
6.4% 4/30/40 | | 3,340,000 | | 4,275,237 |
News America Holdings, Inc. 7.75% 12/1/45 | | 3,169,000 | | 4,561,487 |
News America, Inc.: | | | | |
6.15% 3/1/37 | | 2,331,000 | | 2,798,629 |
6.15% 2/15/41 | | 1,822,000 | | 2,204,649 |
Thomson Reuters Corp. 1.3% 2/23/17 | | 1,374,000 | | 1,375,525 |
Time Warner Cable, Inc.: | | | | |
4% 9/1/21 | | 7,363,000 | | 7,861,887 |
4.5% 9/15/42 | | 3,083,000 | | 2,995,933 |
5.85% 5/1/17 | | 1,239,000 | | 1,393,267 |
5.875% 11/15/40 | | 1,806,000 | | 2,103,235 |
6.75% 7/1/18 | | 4,425,000 | | 5,235,536 |
8.25% 4/1/19 | | 7,716,000 | | 9,775,879 |
Time Warner, Inc.: | | | | |
5.875% 11/15/16 | | 5,514,000 | | 6,139,282 |
6.5% 11/15/36 | | 2,337,000 | | 2,855,662 |
Viacom, Inc.: | | | | |
2.5% 9/1/18 | | 546,000 | | 557,992 |
3.5% 4/1/17 | | 1,312,000 | | 1,393,323 |
| | 77,032,095 |
TOTAL CONSUMER DISCRETIONARY | | 91,358,878 |
|
| Principal Amount | | Value |
CONSUMER STAPLES - 1.3% |
Beverages - 0.2% |
Heineken NV: | | | | |
1.4% 10/1/17 (c) | | $ 2,178,000 | | $ 2,176,584 |
2.75% 4/1/23 (c) | | 2,276,000 | | 2,172,626 |
SABMiller Holdings, Inc. 3.75% 1/15/22 (c) | | 3,034,000 | | 3,140,120 |
| | 7,489,330 |
Food & Staples Retailing - 0.1% |
CVS Caremark Corp.: | | | | |
2.25% 12/5/18 | | 3,097,000 | | 3,135,697 |
4% 12/5/23 | | 3,097,000 | | 3,239,115 |
| | 6,374,812 |
Food Products - 0.2% |
ConAgra Foods, Inc.: | | | | |
1.9% 1/25/18 | | 1,554,000 | | 1,557,573 |
3.2% 1/25/23 | | 1,807,000 | | 1,744,646 |
General Mills, Inc. 5.2% 3/17/15 | | 3,528,000 | | 3,646,467 |
| | 6,948,686 |
Tobacco - 0.8% |
Altria Group, Inc.: | | | | |
2.85% 8/9/22 | | 2,952,000 | | 2,847,340 |
4% 1/31/24 | | 2,394,000 | | 2,458,504 |
4.25% 8/9/42 | | 2,952,000 | | 2,745,425 |
4.75% 5/5/21 | | 4,000,000 | | 4,410,768 |
5.375% 1/31/44 | | 4,099,000 | | 4,481,994 |
9.7% 11/10/18 | | 2,242,000 | | 2,937,408 |
Philip Morris International, Inc. 5.65% 5/16/18 | | 2,751,000 | | 3,157,840 |
Reynolds American, Inc.: | | | | |
3.25% 11/1/22 | | 2,224,000 | | 2,144,519 |
4.75% 11/1/42 | | 3,437,000 | | 3,271,869 |
6.15% 9/15/43 | | 1,680,000 | | 1,920,712 |
7.25% 6/15/37 | | 2,962,000 | | 3,702,479 |
| | 34,078,858 |
TOTAL CONSUMER STAPLES | | 54,891,686 |
ENERGY - 4.8% |
Energy Equipment & Services - 0.4% |
DCP Midstream LLC: | | | | |
4.75% 9/30/21 (c) | | 3,739,000 | | 3,944,088 |
5.35% 3/15/20 (c) | | 3,724,000 | | 4,121,191 |
El Paso Pipeline Partners Operating Co. LLC: | | | | |
4.1% 11/15/15 | | 3,902,000 | | 4,059,091 |
5% 10/1/21 | | 1,517,000 | | 1,657,747 |
Transocean, Inc. 5.05% 12/15/16 | | 2,488,000 | | 2,702,520 |
| | 16,484,637 |
Oil, Gas & Consumable Fuels - 4.4% |
Anadarko Petroleum Corp. 6.375% 9/15/17 | | 6,869,000 | | 7,907,304 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value |
ENERGY - continued |
Oil, Gas & Consumable Fuels - continued |
Canadian Natural Resources Ltd. 3.8% 4/15/24 | | $ 6,783,000 | | $ 6,987,901 |
ConocoPhillips Co. 5.75% 2/1/19 | | 3,900,000 | | 4,538,836 |
DCP Midstream Operating LP: | | | | |
2.5% 12/1/17 | | 1,990,000 | | 2,046,741 |
2.7% 4/1/19 | | 397,000 | | 402,072 |
3.875% 3/15/23 | | 1,228,000 | | 1,242,605 |
Duke Energy Field Services 6.45% 11/3/36 (c) | | 2,477,000 | | 2,822,041 |
El Paso Natural Gas Co. 5.95% 4/15/17 | | 3,330,000 | | 3,743,380 |
Enable Midstream Partners LP: | | | | |
2.4% 5/15/19 (c) | | 1,253,000 | | 1,253,970 |
3.9% 5/15/24 (c) | | 1,322,000 | | 1,318,415 |
Enbridge Energy Partners LP 4.2% 9/15/21 | | 4,399,000 | | 4,658,457 |
EnLink Midstream Partners LP 2.7% 4/1/19 | | 6,288,000 | | 6,376,667 |
Marathon Petroleum Corp. 5.125% 3/1/21 | | 2,187,000 | | 2,478,580 |
Motiva Enterprises LLC 5.75% 1/15/20 (c) | | 1,496,000 | | 1,700,068 |
Nakilat, Inc. 6.067% 12/31/33 (c) | | 1,808,000 | | 1,981,848 |
Petro-Canada 6.05% 5/15/18 | | 1,480,000 | | 1,712,674 |
Petrobras Global Finance BV: | | | | |
3% 1/15/19 | | 714,000 | | 700,898 |
3.25% 3/17/17 | | 8,149,000 | | 8,355,088 |
4.375% 5/20/23 | | 7,020,000 | | 6,760,611 |
4.875% 3/17/20 | | 8,149,000 | | 8,369,838 |
5.625% 5/20/43 | | 6,681,000 | | 6,046,305 |
Petrobras International Finance Co. Ltd.: | | | | |
3.875% 1/27/16 | | 3,612,000 | | 3,724,153 |
5.375% 1/27/21 | | 9,195,000 | | 9,583,305 |
5.75% 1/20/20 | | 6,461,000 | | 6,905,517 |
7.875% 3/15/19 | | 4,277,000 | | 4,986,298 |
Petroleos Mexicanos: | | | | |
3.125% 1/23/19 (c) | | 642,000 | | 664,149 |
3.5% 7/18/18 | | 5,440,000 | | 5,717,440 |
3.5% 1/30/23 | | 3,410,000 | | 3,329,865 |
4.875% 1/24/22 | | 3,398,000 | | 3,675,956 |
4.875% 1/18/24 | | 1,456,000 | | 1,561,560 |
4.875% 1/18/24 (c) | | 3,083,000 | | 3,306,518 |
5.5% 1/21/21 | | 3,601,000 | | 4,042,123 |
5.5% 6/27/44 | | 7,799,000 | | 8,118,759 |
6.375% 1/23/45 (c) | | 4,048,000 | | 4,700,740 |
6.5% 6/2/41 | | 7,675,000 | | 8,922,188 |
Phillips 66 Co. 4.3% 4/1/22 | | 3,770,000 | | 4,064,871 |
Plains All American Pipeline LP/PAA Finance Corp.: | | | | |
3.65% 6/1/22 | | 1,784,000 | | 1,841,461 |
6.125% 1/15/17 | | 1,250,000 | | 1,400,630 |
|
| Principal Amount | | Value |
Spectra Energy Capital, LLC 3.3% 3/15/23 | | $ 5,000,000 | | $ 4,782,695 |
Spectra Energy Partners, LP: | | | | |
2.95% 6/15/16 | | 668,000 | | 693,016 |
2.95% 9/25/18 | | 733,000 | | 760,785 |
4.6% 6/15/21 | | 873,000 | | 952,999 |
Suncor Energy, Inc. 6.1% 6/1/18 | | 4,665,000 | | 5,413,411 |
The Williams Companies, Inc.: | | | | |
3.7% 1/15/23 | | 1,208,000 | | 1,161,416 |
4.55% 6/24/24 | | 5,492,000 | | 5,543,196 |
Transcontinental Gas Pipe Line Corp. 6.4% 4/15/16 | | 615,000 | | 672,154 |
Western Gas Partners LP 5.375% 6/1/21 | | 3,820,000 | | 4,324,611 |
Williams Partners LP 4.3% 3/4/24 | | 3,059,000 | | 3,188,411 |
| | 185,442,526 |
TOTAL ENERGY | | 201,927,163 |
FINANCIALS - 16.6% |
Banks - 6.2% |
Banco Nacional de Desenvolvimento Economico e Social: | | | | |
4% 4/14/19 (c) | | 5,277,000 | | 5,356,155 |
6.5% 6/10/19 (c) | | 1,340,000 | | 1,507,500 |
Bank of America Corp.: | | | | |
2.6% 1/15/19 | | 5,065,000 | | 5,123,865 |
3.3% 1/11/23 | | 12,978,000 | | 12,766,264 |
3.875% 3/22/17 | | 10,557,000 | | 11,246,699 |
4.1% 7/24/23 | | 4,166,000 | | 4,321,404 |
5.75% 12/1/17 | | 12,290,000 | | 13,877,204 |
6.5% 8/1/16 | | 3,000,000 | | 3,324,909 |
Bank of America NA 5.3% 3/15/17 | | 3,403,000 | | 3,742,228 |
Barclays Bank PLC 2.5% 2/20/19 | | 2,600,000 | | 2,633,179 |
Citigroup, Inc.: | | | | |
1.3% 11/15/16 | | 6,383,000 | | 6,390,653 |
3.375% 3/1/23 | | 2,800,000 | | 2,787,792 |
3.953% 6/15/16 | | 3,838,000 | | 4,049,082 |
4.05% 7/30/22 | | 1,800,000 | | 1,843,184 |
4.75% 5/19/15 | | 4,790,000 | | 4,964,773 |
5.3% 5/6/44 | | 8,263,000 | | 8,603,940 |
5.5% 9/13/25 | | 1,663,000 | | 1,853,892 |
6.125% 5/15/18 | | 1,159,000 | | 1,335,155 |
Credit Suisse AG 6% 2/15/18 | | 6,486,000 | | 7,389,052 |
Discover Bank: | | | | |
4.2% 8/8/23 | | 2,849,000 | | 3,004,701 |
7% 4/15/20 | | 2,309,000 | | 2,773,040 |
8.7% 11/18/19 | | 1,503,000 | | 1,909,961 |
Fifth Third Bancorp: | | | | |
4.5% 6/1/18 | | 1,179,000 | | 1,286,255 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value |
FINANCIALS - continued |
Banks - continued |
Fifth Third Bancorp: - continued | | | | |
8.25% 3/1/38 | | $ 4,319,000 | | $ 6,347,107 |
HBOS PLC 6.75% 5/21/18 (c) | | 2,600,000 | | 2,994,937 |
HSBC Holdings PLC 4.25% 3/14/24 | | 2,200,000 | | 2,262,786 |
HSBC U.S.A., Inc. 1.625% 1/16/18 | | 3,721,000 | | 3,728,915 |
Huntington Bancshares, Inc. 7% 12/15/20 | | 1,004,000 | | 1,217,458 |
JPMorgan Chase & Co.: | | | | |
1.625% 5/15/18 | | 8,510,000 | | 8,475,713 |
2% 8/15/17 | | 5,000,000 | | 5,083,945 |
3.15% 7/5/16 | | 4,200,000 | | 4,377,530 |
3.25% 9/23/22 | | 5,719,000 | | 5,742,145 |
4.35% 8/15/21 | | 4,371,000 | | 4,730,996 |
4.5% 1/24/22 | | 6,648,000 | | 7,281,096 |
6.3% 4/23/19 | | 3,920,000 | | 4,634,059 |
KeyBank NA: | | | | |
5.45% 3/3/16 | | 1,618,000 | | 1,740,023 |
5.8% 7/1/14 | | 2,049,000 | | 2,049,000 |
6.95% 2/1/28 | | 800,000 | | 1,009,358 |
Marshall & Ilsley Bank: | | | | |
4.85% 6/16/15 | | 1,796,000 | | 1,864,759 |
5% 1/17/17 | | 4,952,000 | | 5,327,465 |
Regions Bank: | | | | |
6.45% 6/26/37 | | 7,720,000 | | 9,172,827 |
7.5% 5/15/18 | | 13,237,000 | | 15,753,076 |
Regions Financial Corp.: | | | | |
2% 5/15/18 | | 4,497,000 | | 4,480,626 |
5.75% 6/15/15 | | 814,000 | | 850,768 |
7.75% 11/10/14 | | 2,367,000 | | 2,426,128 |
Royal Bank of Scotland Group PLC: | | | | |
5.125% 5/28/24 | | 8,300,000 | | 8,423,131 |
6% 12/19/23 | | 5,383,000 | | 5,817,085 |
6.1% 6/10/23 | | 5,485,000 | | 6,000,848 |
6.125% 12/15/22 | | 8,239,000 | | 9,006,965 |
Wells Fargo & Co.: | | | | |
1.25% 7/20/16 | | 14,500,000 | | 14,624,004 |
3.676% 6/15/16 | | 1,714,000 | | 1,808,654 |
| | 259,322,291 |
Capital Markets - 2.3% |
Affiliated Managers Group, Inc. 4.25% 2/15/24 | | 1,593,000 | | 1,647,221 |
BlackRock, Inc. 3.5% 3/18/24 | | 9,600,000 | | 9,707,664 |
Goldman Sachs Group, Inc.: | | | | |
1.748% 9/15/17 | | 13,467,000 | | 13,428,418 |
2.625% 1/31/19 | | 9,739,000 | | 9,867,866 |
2.9% 7/19/18 | | 6,251,000 | | 6,439,418 |
5.25% 7/27/21 | | 1,125,000 | | 1,262,757 |
|
| Principal Amount | | Value |
5.625% 1/15/17 | | $ 3,000,000 | | $ 3,301,197 |
5.95% 1/18/18 | | 755,000 | | 859,016 |
6.15% 4/1/18 | | 5,954,000 | | 6,820,462 |
Lazard Group LLC: | | | | |
4.25% 11/14/20 | | 2,080,000 | | 2,178,808 |
6.85% 6/15/17 | | 3,241,000 | | 3,676,454 |
Morgan Stanley, Inc.: | | | | |
2.125% 4/25/18 | | 4,257,000 | | 4,303,252 |
3.75% 2/25/23 | | 6,489,000 | | 6,597,639 |
4.875% 11/1/22 | | 4,345,000 | | 4,661,694 |
5% 11/24/25 | | 1,047,000 | | 1,117,458 |
5.45% 1/9/17 | | 4,980,000 | | 5,485,241 |
5.75% 1/25/21 | | 1,751,000 | | 2,033,191 |
6.625% 4/1/18 | | 10,165,000 | | 11,881,299 |
| | 95,269,055 |
Consumer Finance - 1.1% |
Discover Financial Services 3.85% 11/21/22 | | 5,040,000 | | 5,128,759 |
Ford Motor Credit Co. LLC: | | | | |
1.5% 1/17/17 | | 2,686,000 | | 2,700,241 |
1.7% 5/9/16 | | 6,586,000 | | 6,669,379 |
2.875% 10/1/18 | | 4,500,000 | | 4,657,082 |
General Electric Capital Corp.: | | | | |
1% 12/11/15 | | 3,432,000 | | 3,455,550 |
2.95% 5/9/16 | | 774,000 | | 806,899 |
3.5% 6/29/15 | | 799,000 | | 824,005 |
5.625% 5/1/18 | | 9,700,000 | | 11,113,329 |
Hyundai Capital America: | | | | |
1.45% 2/6/17 (c) | | 5,241,000 | | 5,260,030 |
1.625% 10/2/15 (c) | | 1,373,000 | | 1,385,368 |
1.875% 8/9/16 (c) | | 1,083,000 | | 1,098,846 |
2.125% 10/2/17 (c) | | 1,518,000 | | 1,540,838 |
2.875% 8/9/18 (c) | | 1,921,000 | | 1,976,319 |
| | 46,616,645 |
Diversified Financial Services - 0.5% |
BP Capital Markets PLC: | | | | |
3.814% 2/10/24 | | 3,957,000 | | 4,085,824 |
4.742% 3/11/21 | | 3,000,000 | | 3,362,115 |
Five Corners Funding Trust 4.419% 11/15/23 (c) | | 4,110,000 | | 4,330,913 |
RBS Citizens Financial Group, Inc. 4.15% 9/28/22 (c) | | 4,259,000 | | 4,281,470 |
TECO Finance, Inc.: | | | | |
4% 3/15/16 | | 1,075,000 | | 1,131,395 |
5.15% 3/15/20 | | 1,545,000 | | 1,744,816 |
| | 18,936,533 |
Insurance - 2.1% |
AIA Group Ltd. 2.25% 3/11/19 (c) | | 913,000 | | 913,482 |
American International Group, Inc.: | | | | |
4.875% 9/15/16 | | 2,638,000 | | 2,853,187 |
4.875% 6/1/22 | | 1,252,000 | | 1,393,516 |
5.6% 10/18/16 | | 3,756,000 | | 4,128,990 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value |
FINANCIALS - continued |
Insurance - continued |
Aon Corp.: | | | | |
3.125% 5/27/16 | | $ 3,681,000 | | $ 3,831,715 |
3.5% 9/30/15 | | 1,538,000 | | 1,590,701 |
5% 9/30/20 | | 1,402,000 | | 1,572,330 |
Axis Capital Holdings Ltd. 5.75% 12/1/14 | | 420,000 | | 428,923 |
Hartford Financial Services Group, Inc. 5.125% 4/15/22 | | 4,644,000 | | 5,278,282 |
Liberty Mutual Group, Inc. 5% 6/1/21 (c) | | 4,093,000 | | 4,500,307 |
Marsh & McLennan Companies, Inc. 4.8% 7/15/21 | | 2,278,000 | | 2,529,042 |
Massachusetts Mutual Life Insurance Co. 5.375% 12/1/41 (c) | | 1,135,000 | | 1,288,339 |
MetLife, Inc.: | | | | |
3.048% 12/15/22 | | 3,731,000 | | 3,704,715 |
4.368% 9/15/23 | | 3,574,000 | | 3,832,189 |
4.75% 2/8/21 | | 1,477,000 | | 1,650,000 |
6.75% 6/1/16 | | 3,234,000 | | 3,593,572 |
Metropolitan Life Global Funding I 3% 1/10/23 (c) | | 2,636,000 | | 2,613,810 |
Pacific Life Insurance Co. 9.25% 6/15/39 (c) | | 2,297,000 | | 3,528,628 |
Pacific LifeCorp: | | | | |
5.125% 1/30/43 (c) | | 5,252,000 | | 5,439,906 |
6% 2/10/20 (c) | | 4,627,000 | | 5,283,539 |
Prudential Financial, Inc.: | | | | |
2.3% 8/15/18 | | 599,000 | | 609,091 |
4.5% 11/16/21 | | 2,157,000 | | 2,373,444 |
6.2% 11/15/40 | | 1,297,000 | | 1,621,070 |
7.375% 6/15/19 | | 1,250,000 | | 1,547,785 |
Symetra Financial Corp. 6.125% 4/1/16 (c) | | 6,355,000 | | 6,819,945 |
Unum Group: | | | | |
4% 3/15/24 | | 5,930,000 | | 6,116,024 |
5.625% 9/15/20 | | 2,889,000 | | 3,313,721 |
5.75% 8/15/42 | | 5,234,000 | | 6,085,383 |
| | 88,441,636 |
Real Estate Investment Trusts - 1.7% |
Alexandria Real Estate Equities, Inc. 4.6% 4/1/22 | | 1,200,000 | | 1,268,243 |
American Campus Communities Operating Partnership LP 3.75% 4/15/23 | | 1,184,000 | | 1,169,701 |
AvalonBay Communities, Inc.: | | | | |
3.625% 10/1/20 | | 1,872,000 | | 1,954,297 |
4.2% 12/15/23 | | 4,000,000 | | 4,230,568 |
Boston Properties, Inc. 3.85% 2/1/23 | | 4,708,000 | | 4,852,573 |
Camden Property Trust: | | | | |
2.95% 12/15/22 | | 1,607,000 | | 1,552,740 |
4.25% 1/15/24 | | 3,408,000 | | 3,564,233 |
|
| Principal Amount | | Value |
DDR Corp.: | | | | |
4.625% 7/15/22 | | $ 2,855,000 | | $ 3,053,542 |
4.75% 4/15/18 | | 3,691,000 | | 4,016,568 |
7.5% 4/1/17 | | 1,944,000 | | 2,242,913 |
9.625% 3/15/16 | | 1,253,000 | | 1,433,614 |
Duke Realty LP: | | | | |
3.625% 4/15/23 | | 2,123,000 | | 2,102,706 |
3.875% 10/15/22 | | 3,512,000 | | 3,573,123 |
4.375% 6/15/22 | | 2,340,000 | | 2,463,763 |
5.5% 3/1/16 | | 1,270,000 | | 1,360,341 |
5.95% 2/15/17 | | 928,000 | | 1,031,279 |
6.5% 1/15/18 | | 2,445,000 | | 2,795,126 |
Equity One, Inc.: | | | | |
3.75% 11/15/22 | | 5,500,000 | | 5,447,899 |
5.375% 10/15/15 | | 455,000 | | 480,072 |
6% 9/15/17 | | 2,405,000 | | 2,688,386 |
Federal Realty Investment Trust 5.9% 4/1/20 | | 1,046,000 | | 1,225,286 |
HCP, Inc. 3.75% 2/1/16 | | 2,272,000 | | 2,374,529 |
Health Care REIT, Inc.: | | | | |
2.25% 3/15/18 | | 1,731,000 | | 1,757,332 |
4.7% 9/15/17 | | 568,000 | | 621,249 |
HRPT Properties Trust: | | | | |
5.75% 11/1/15 | | 1,155,000 | | 1,192,036 |
6.25% 6/15/17 | | 3,000,000 | | 3,219,984 |
Lexington Corporate Properties Trust 4.4% 6/15/24 | | 1,441,000 | | 1,456,471 |
Omega Healthcare Investors, Inc. 4.95% 4/1/24 (c) | | 1,354,000 | | 1,382,924 |
Retail Opportunity Investments Partnership LP 5% 12/15/23 | | 737,000 | | 788,406 |
Simon Property Group LP: | | | | |
4.125% 12/1/21 | | 2,399,000 | | 2,596,989 |
5.1% 6/15/15 | | 2,220,000 | | 2,316,859 |
United Dominion Realty Trust, Inc. 5.25% 1/15/15 | | 904,000 | | 926,639 |
Weingarten Realty Investors 3.375% 10/15/22 | | 812,000 | | 795,393 |
| | 71,935,784 |
Real Estate Management & Development - 2.7% |
BioMed Realty LP: | | | | |
2.625% 5/1/19 | | 765,000 | | 769,487 |
3.85% 4/15/16 | | 3,700,000 | | 3,870,729 |
4.25% 7/15/22 | | 1,842,000 | | 1,898,297 |
6.125% 4/15/20 | | 1,392,000 | | 1,604,404 |
Brandywine Operating Partnership LP: | | | | |
3.95% 2/15/23 | | 4,271,000 | | 4,297,292 |
4.95% 4/15/18 | | 2,900,000 | | 3,158,004 |
5.7% 5/1/17 | | 5,000,000 | | 5,511,560 |
6% 4/1/16 | | 1,005,000 | | 1,083,533 |
7.5% 5/15/15 | | 523,000 | | 552,325 |
Digital Realty Trust LP: | | | | |
4.5% 7/15/15 | | 1,829,000 | | 1,881,108 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value |
FINANCIALS - continued |
Real Estate Management & Development - continued |
Digital Realty Trust LP: - continued | | | | |
5.25% 3/15/21 | | $ 1,953,000 | | $ 2,097,116 |
ERP Operating LP: | | | | |
2.375% 7/1/19 | | 2,683,000 | | 2,690,024 |
4.625% 12/15/21 | | 5,595,000 | | 6,155,888 |
4.75% 7/15/20 | | 2,827,000 | | 3,155,676 |
5.375% 8/1/16 | | 1,066,000 | | 1,164,254 |
5.75% 6/15/17 | | 5,343,000 | | 6,029,485 |
Essex Portfolio LP 5.5% 3/15/17 (c) | | 670,000 | | 742,020 |
Liberty Property LP: | | | | |
3.375% 6/15/23 | | 2,202,000 | | 2,135,892 |
4.125% 6/15/22 | | 2,007,000 | | 2,087,872 |
4.4% 2/15/24 | | 4,876,000 | | 5,111,345 |
4.75% 10/1/20 | | 4,185,000 | | 4,542,834 |
5.5% 12/15/16 | | 2,290,000 | | 2,499,995 |
6.625% 10/1/17 | | 2,673,000 | | 3,056,947 |
Mack-Cali Realty LP: | | | | |
2.5% 12/15/17 | | 2,995,000 | | 3,030,820 |
3.15% 5/15/23 | | 4,988,000 | | 4,502,264 |
4.5% 4/18/22 | | 1,218,000 | | 1,232,955 |
Mid-America Apartments LP: | | | | |
4.3% 10/15/23 | | 831,000 | | 869,422 |
5.5% 10/1/15 (c) | | 6,290,000 | | 6,649,165 |
Post Apartment Homes LP 3.375% 12/1/22 | | 790,000 | | 767,490 |
Prime Property Funding, Inc. 5.125% 6/1/15 (c) | | 3,844,000 | | 3,974,977 |
Reckson Operating Partnership LP 6% 3/31/16 | | 4,360,000 | | 4,691,975 |
Regency Centers LP: | | | | |
5.25% 8/1/15 | | 1,468,000 | | 1,537,124 |
5.875% 6/15/17 | | 2,430,000 | | 2,731,371 |
Tanger Properties LP: | | | | |
3.875% 12/1/23 | | 1,792,000 | | 1,826,921 |
6.125% 6/1/20 | | 4,876,000 | | 5,712,400 |
Ventas Realty LP 1.55% 9/26/16 | | 2,853,000 | | 2,881,787 |
Ventas Realty LP/Ventas Capital Corp.: | | | | |
2% 2/15/18 | | 2,696,000 | | 2,717,811 |
4% 4/30/19 | | 1,357,000 | | 1,457,737 |
| | 110,680,306 |
TOTAL FINANCIALS | | 691,202,250 |
|
| Principal Amount | | Value |
HEALTH CARE - 1.1% |
Biotechnology - 0.2% |
Amgen, Inc.: | | | | |
1.25% 5/22/17 | | $ 4,146,000 | | $ 4,141,663 |
2.2% 5/22/19 | | 4,398,000 | | 4,392,230 |
| | 8,533,893 |
Health Care Providers & Services - 0.4% |
Aetna, Inc. 2.75% 11/15/22 | | 2,118,000 | | 2,044,967 |
Express Scripts Holding Co. 4.75% 11/15/21 | | 3,953,000 | | 4,385,486 |
Medco Health Solutions, Inc. 4.125% 9/15/20 | | 2,723,000 | | 2,921,754 |
UnitedHealth Group, Inc.: | | | | |
2.75% 2/15/23 | | 708,000 | | 685,812 |
2.875% 3/15/23 | | 5,473,000 | | 5,365,970 |
WellPoint, Inc. 3.3% 1/15/23 | | 1,974,000 | | 1,970,605 |
| | 17,374,594 |
Life Sciences Tools & Services - 0.1% |
Thermo Fisher Scientific, Inc.: | | | | |
1.3% 2/1/17 | | 1,129,000 | | 1,130,511 |
2.4% 2/1/19 | | 712,000 | | 719,144 |
4.15% 2/1/24 | | 1,093,000 | | 1,142,357 |
| | 2,992,012 |
Pharmaceuticals - 0.4% |
AbbVie, Inc.: | | | | |
1.75% 11/6/17 | | 4,266,000 | | 4,282,974 |
2.9% 11/6/22 | | 4,376,000 | | 4,229,513 |
Mylan, Inc. 1.35% 11/29/16 | | 1,345,000 | | 1,347,116 |
Perrigo Co. PLC: | | | | |
1.3% 11/8/16 (c) | | 1,103,000 | | 1,101,257 |
2.3% 11/8/18 (c) | | 1,180,000 | | 1,179,356 |
Watson Pharmaceuticals, Inc. 1.875% 10/1/17 | | 1,428,000 | | 1,440,494 |
Zoetis, Inc.: | | | | |
1.875% 2/1/18 | | 676,000 | | 677,445 |
3.25% 2/1/23 | | 1,649,000 | | 1,630,314 |
| | 15,888,469 |
TOTAL HEALTH CARE | | 44,788,968 |
INDUSTRIALS - 0.4% |
Airlines - 0.2% |
Continental Airlines, Inc.: | | | | |
6.648% 3/15/19 | | 655,214 | | 695,756 |
6.795% 2/2/20 | | 822,057 | | 875,491 |
Northwest Airlines, Inc. pass-thru trust certificates 7.027% 11/1/19 | | 2,433,864 | | 2,798,944 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value |
INDUSTRIALS - continued |
Airlines - continued |
U.S. Airways pass-thru trust certificates: | | | | |
6.85% 1/30/18 | | $ 774,291 | | $ 834,299 |
8.36% 1/20/19 | | 3,143,249 | | 3,492,935 |
| | 8,697,425 |
Industrial Conglomerates - 0.2% |
General Electric Co. 5.25% 12/6/17 | | 7,130,000 | | 8,043,018 |
TOTAL INDUSTRIALS | | 16,740,443 |
INFORMATION TECHNOLOGY - 0.0% |
Electronic Equipment & Components - 0.0% |
Tyco Electronics Group SA 2.375% 12/17/18 | | 832,000 | | 838,396 |
MATERIALS - 0.7% |
Chemicals - 0.2% |
The Dow Chemical Co.: | | | | |
4.125% 11/15/21 | | 3,587,000 | | 3,847,872 |
4.25% 11/15/20 | | 1,931,000 | | 2,098,783 |
| | 5,946,655 |
Metals & Mining - 0.5% |
Corporacion Nacional del Cobre de Chile (Codelco): | | | | |
3.875% 11/3/21 (c) | | 3,750,000 | | 3,885,338 |
4.25% 7/17/42 (c) | | 876,000 | | 799,675 |
5.625% 10/18/43 (c) | | 4,583,000 | | 5,058,569 |
Rio Tinto Finance (U.S.A.) PLC 2.25% 12/14/18 | | 4,174,000 | | 4,254,224 |
Vale Overseas Ltd.: | | | | |
4.375% 1/11/22 | | 3,818,000 | | 3,919,941 |
6.25% 1/23/17 | | 3,115,000 | | 3,481,947 |
| | 21,399,694 |
TOTAL MATERIALS | | 27,346,349 |
TELECOMMUNICATION SERVICES - 2.0% |
Diversified Telecommunication Services - 1.8% |
AT&T, Inc. 6.3% 1/15/38 | | 364,000 | | 439,847 |
CenturyLink, Inc.: | | | | |
5.15% 6/15/17 | | 330,000 | | 356,400 |
6% 4/1/17 | | 825,000 | | 910,594 |
6.15% 9/15/19 | | 2,305,000 | | 2,512,450 |
Embarq Corp.: | | | | |
7.082% 6/1/16 | | 2,793,000 | | 3,107,472 |
7.995% 6/1/36 | | 1,808,000 | | 1,975,240 |
Verizon Communications, Inc.: | | | | |
1.35% 6/9/17 | | 6,483,000 | | 6,479,843 |
2.5% 9/15/16 | | 3,710,000 | | 3,823,737 |
4.5% 9/15/20 | | 11,000,000 | | 12,097,756 |
|
| Principal Amount | | Value |
6.25% 4/1/37 | | $ 1,380,000 | | $ 1,672,172 |
6.4% 9/15/33 | | 4,059,000 | | 4,965,395 |
6.55% 9/15/43 | | 29,145,000 | | 36,616,933 |
| | 74,957,839 |
Wireless Telecommunication Services - 0.2% |
America Movil S.A.B. de CV: | | | | |
2.375% 9/8/16 | | 5,411,000 | | 5,563,753 |
3.125% 7/16/22 | | 2,875,000 | | 2,829,000 |
| | 8,392,753 |
TOTAL TELECOMMUNICATION SERVICES | | 83,350,592 |
UTILITIES - 3.6% |
Electric Utilities - 1.8% |
AmerenUE 6.4% 6/15/17 | | 3,819,000 | | 4,339,618 |
American Electric Power Co., Inc.: | | | | |
1.65% 12/15/17 | | 1,748,000 | | 1,756,960 |
2.95% 12/15/22 | | 1,655,000 | | 1,607,420 |
Dayton Power & Light Co. 1.875% 9/15/16 (c) | | 1,393,000 | | 1,416,473 |
Duquesne Light Holdings, Inc.: | | | | |
5.9% 12/1/21 (c) | | 2,664,000 | | 3,142,231 |
6.4% 9/15/20 (c) | | 6,054,000 | | 7,187,067 |
Edison International 3.75% 9/15/17 | | 2,401,000 | | 2,561,471 |
FirstEnergy Corp.: | | | | |
2.75% 3/15/18 | | 3,523,000 | | 3,564,755 |
4.25% 3/15/23 | | 6,228,000 | | 6,199,357 |
7.375% 11/15/31 | | 4,145,000 | | 4,893,007 |
FirstEnergy Solutions Corp. 6.05% 8/15/21 | | 7,286,000 | | 8,072,815 |
LG&E and KU Energy LLC: | | | | |
2.125% 11/15/15 | | 2,670,000 | | 2,706,045 |
3.75% 11/15/20 | | 525,000 | | 555,379 |
Monongahela Power Co. 4.1% 4/15/24 (c) | | 1,477,000 | | 1,560,709 |
Nevada Power Co. 6.5% 5/15/18 | | 3,165,000 | | 3,712,960 |
Northeast Utilities: | | | | |
1.45% 5/1/18 | | 1,125,000 | | 1,104,615 |
2.8% 5/1/23 | | 5,110,000 | | 4,918,160 |
NV Energy, Inc. 6.25% 11/15/20 | | 1,238,000 | | 1,461,024 |
Pennsylvania Electric Co. 6.05% 9/1/17 | | 2,905,000 | | 3,295,415 |
Pepco Holdings, Inc. 2.7% 10/1/15 | | 2,535,000 | | 2,584,818 |
PPL Capital Funding, Inc. 3.4% 6/1/23 | | 2,425,000 | | 2,422,507 |
Progress Energy, Inc.: | | | | |
4.4% 1/15/21 | | 4,274,000 | | 4,681,487 |
5.625% 1/15/16 | | 2,000,000 | | 2,147,720 |
| | 75,892,013 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value |
UTILITIES - continued |
Gas Utilities - 0.1% |
Southern Natural Gas Co./Southern Natural Issuing Corp. 4.4% 6/15/21 | | $ 1,182,000 | | $ 1,280,056 |
Multi-Utilities - 1.7% |
Ameren Illinois Co. 6.125% 11/15/17 | | 1,465,000 | | 1,693,043 |
Dominion Resources, Inc.: | | | | |
1.25% 3/15/17 | | 8,300,000 | | 8,331,474 |
2.5341% 9/30/66 (f) | | 13,401,000 | | 12,384,534 |
MidAmerican Energy Holdings, Co.: | | | | |
1.1% 5/15/17 | | 5,903,000 | | 5,878,036 |
2% 11/15/18 | | 4,545,000 | | 4,551,981 |
National Grid PLC 6.3% 8/1/16 | | 4,181,000 | | 4,629,839 |
NiSource Finance Corp.: | | | | |
4.45% 12/1/21 | | 1,622,000 | | 1,745,136 |
5.25% 2/15/43 | | 4,094,000 | | 4,402,274 |
5.4% 7/15/14 | | 3,885,000 | | 3,891,985 |
5.45% 9/15/20 | | 4,156,000 | | 4,756,218 |
5.8% 2/1/42 | | 2,085,000 | | 2,384,840 |
5.95% 6/15/41 | | 3,834,000 | | 4,432,771 |
6.4% 3/15/18 | | 3,266,000 | | 3,751,974 |
PG&E Corp. 2.4% 3/1/19 | | 600,000 | | 605,326 |
Puget Energy, Inc. 6% 9/1/21 | | 524,000 | | 617,540 |
Sempra Energy: | | | | |
2.3% 4/1/17 | | 4,185,000 | | 4,295,497 |
2.875% 10/1/22 | | 1,723,000 | | 1,688,390 |
Wisconsin Energy Corp. 6.25% 5/15/67 (f) | | 1,426,000 | | 1,472,345 |
| | 71,513,203 |
TOTAL UTILITIES | | 148,685,272 |
TOTAL NONCONVERTIBLE BONDS (Cost $1,275,248,325) |
1,361,129,997
|
U.S. Treasury Obligations - 29.1% |
|
U.S. Treasury Bonds: | | | | |
3.625% 8/15/43 | | 68,501,000 | | 72,204,301 |
3.625% 2/15/44 | | 27,358,000 | | 28,811,394 |
U.S. Treasury Notes: | | | | |
0.5% 7/31/17 | | 5,745,000 | | 5,667,799 |
0.75% 2/28/18 | | 98,100,000 | | 96,544,232 |
0.875% 4/30/17 | | 695,000 | | 696,141 |
0.875% 5/15/17 | | 60,000,000 | | 60,075,000 |
0.875% 1/31/18 | | 63,538,000 | | 62,922,444 |
1% 5/31/18 | | 69,810,000 | | 69,040,973 |
|
| Principal
Amount | | Value |
1.25% 10/31/18 | | $ 231,238,000 | | $ 229,413,290 |
1.375% 7/31/18 | | 115,163,000 | | 115,306,954 |
1.5% 12/31/18 | | 57,607,000 | | 57,629,524 |
1.5% 1/31/19 | | 206,591,000 | | 206,413,538 |
1.625% 4/30/19 | | 19,965,000 | | 19,997,763 |
1.625% 6/30/19 | | 4,957,000 | | 4,956,227 |
1.875% 10/31/17 (e) | | 20,552,000 | | 21,118,783 |
2.25% 3/31/21 | | 100,079,000 | | 101,126,727 |
2.25% 4/30/21 | | 17,013,000 | | 17,175,151 |
2.75% 2/15/24 | | 43,692,000 | | 44,654,578 |
TOTAL U.S. TREASURY OBLIGATIONS (Cost $1,205,867,231) |
1,213,754,819
|
U.S. Government Agency - Mortgage Securities - 23.4% |
|
Fannie Mae - 14.0% |
1.688% 5/1/34 (f) | | 1,013,491 | | 1,044,776 |
1.751% 9/1/33 (f) | | 459,487 | | 474,636 |
1.93% 10/1/33 (f) | | 29,531 | | 30,470 |
1.94% 7/1/35 (f) | | 26,650 | | 27,808 |
2.05% 3/1/35 (f) | | 11,598 | | 11,951 |
2.058% 10/1/33 (f) | | 587,116 | | 613,871 |
2.23% 7/1/34 (f) | | 41,766 | | 43,987 |
2.303% 6/1/36 (f) | | 84,462 | | 89,668 |
2.332% 3/1/35 (f) | | 37,707 | | 39,433 |
2.361% 8/1/36 (f) | | 1,439,764 | | 1,529,575 |
2.379% 7/1/35 (f) | | 70,143 | | 74,515 |
2.393% 11/1/36 (f) | | 970,518 | | 1,033,827 |
2.412% 2/1/36 (f) | | 703,859 | | 750,214 |
2.421% 10/1/33 (f) | | 59,479 | | 63,175 |
2.5% 1/1/43 | | 7,310,102 | | 6,934,032 |
2.542% 6/1/42 (f) | | 666,093 | | 687,803 |
2.57% 12/1/35 (f) | | 356,957 | | 381,092 |
2.583% 5/1/35 (f) | | 166,818 | | 178,088 |
2.59% 9/1/36 (f) | | 847,028 | | 907,379 |
2.594% 5/1/36 (f) | | 302,350 | | 323,893 |
2.607% 7/1/37 (f) | | 127,893 | | 137,006 |
2.949% 11/1/40 (f) | | 426,270 | | 447,704 |
2.982% 9/1/41 (f) | | 458,397 | | 480,625 |
3% 10/1/42 to 3/1/44 | | 153,465,362 | | 151,716,552 |
3.083% 10/1/41 (f) | | 233,134 | | 244,167 |
3.229% 7/1/41 (f) | | 753,161 | | 796,137 |
3.348% 10/1/41 (f) | | 406,112 | | 426,931 |
3.5% 1/1/34 to 11/1/43 | | 95,287,491 | | 97,634,638 |
3.5% 7/1/44 (d) | | 24,700,000 | | 25,398,546 |
3.553% 7/1/41 (f) | | 770,267 | | 818,251 |
4% 9/1/26 to 1/1/44 | | 86,212,697 | | 91,614,835 |
4% 7/1/44 (d) | | 38,500,000 | | 40,822,027 |
4% 7/1/44 (d) | | 3,000,000 | | 3,180,937 |
U.S. Government Agency - Mortgage Securities - continued |
| Principal Amount | | Value |
Fannie Mae - continued |
4.5% 5/1/25 to 1/1/43 | | $ 45,297,579 | | $ 49,203,765 |
4.5% 7/1/44 (d) | | 13,400,000 | | 14,501,313 |
4.5% 7/1/44 (d) | | 7,200,000 | | 7,791,750 |
4.5% 7/1/44 (d) | | 7,200,000 | | 7,791,750 |
4.5% 7/1/44 (d) | | 2,800,000 | | 3,030,125 |
5% 9/1/20 to 9/1/25 | | 1,905,056 | | 2,060,516 |
5.5% 11/1/17 to 3/1/39 | | 39,323,209 | | 44,009,763 |
5.5% 7/1/44 (d) | | 4,500,000 | | 5,035,781 |
6% 1/1/23 to 1/1/42 | | 12,628,163 | | 14,226,212 |
6.5% 12/1/14 to 8/1/36 | | 5,140,377 | | 5,778,749 |
7% 3/1/15 to 8/1/32 | | 978,745 | | 1,130,388 |
7.5% 7/1/16 to 11/1/31 | | 874,496 | | 1,032,847 |
8% 1/1/30 to 5/1/30 | | 41,868 | | 50,481 |
8.5% 3/1/25 to 6/1/25 | | 595 | | 716 |
TOTAL FANNIE MAE | | 584,602,705 |
Freddie Mac - 4.8% |
2% 3/1/36 (f) | | 147,727 | | 154,604 |
2.03% 4/1/35 (f) | | 710,348 | | 744,672 |
2.373% 1/1/35 (f) | | 105,990 | | 112,173 |
2.785% 11/1/35 (f) | | 275,051 | | 294,649 |
2.823% 3/1/33 (f) | | 7,545 | | 8,083 |
3% 8/1/42 to 3/1/43 | | 21,988,790 | | 21,744,119 |
3.067% 10/1/35 (f) | | 113,906 | | 121,743 |
3.234% 4/1/41 (f) | | 454,546 | | 479,346 |
3.239% 9/1/41 (f) | | 451,643 | | 476,169 |
3.281% 6/1/41 (f) | | 598,151 | | 631,210 |
3.469% 5/1/41 (f) | | 515,795 | | 546,689 |
3.5% 1/1/26 to 10/1/43 | | 71,486,062 | | 73,172,547 |
3.621% 6/1/41 (f) | | 783,933 | | 832,068 |
3.695% 5/1/41 (f) | | 719,077 | | 764,864 |
4% 6/1/24 to 4/1/42 | | 28,360,588 | | 30,083,935 |
4.5% 7/1/25 to 3/1/44 | | 37,557,595 | | 40,790,749 |
4.5% 7/1/44 (d) | | 7,500,000 | | 8,111,720 |
5% 1/1/35 to 9/1/40 | | 14,860,404 | | 16,515,922 |
5.5% 1/1/38 | | 295,626 | | 331,067 |
6% 4/1/32 to 8/1/37 | | 2,126,251 | | 2,404,360 |
7.5% 5/1/17 to 11/1/31 | | 85,377 | | 100,839 |
8% 7/1/17 to 5/1/27 | | 5,260 | | 6,164 |
8.5% 3/1/20 to 1/1/28 | | 80,212 | | 95,147 |
TOTAL FREDDIE MAC | | 198,522,839 |
Ginnie Mae - 4.6% |
3% 7/1/44 (d) | | 8,700,000 | | 8,776,125 |
3.5% 1/15/41 to 1/20/44 | | 35,626,108 | | 37,108,170 |
3.5% 7/1/44 (d) | | 4,500,000 | | 4,682,461 |
|
| Principal Amount | | Value |
3.5% 7/1/44 (d) | | $ 2,700,000 | | $ 2,809,477 |
3.5% 7/1/44 (d) | | 700,000 | | 728,383 |
3.5% 7/1/44 (d) | | 900,000 | | 936,492 |
3.5% 7/1/44 (d) | | 2,600,000 | | 2,705,422 |
4% 2/15/40 to 12/15/41 | | 30,265,719 | | 32,452,054 |
4% 7/1/44 (d) | | 2,200,000 | | 2,352,625 |
4.5% 5/15/39 to 4/15/41 | | 38,016,512 | | 41,576,941 |
5% 3/15/39 to 6/20/41 | | 36,810,165 | | 40,958,470 |
5.5% 6/15/35 | | 1,560,717 | | 1,759,901 |
6% 3/15/29 to 6/15/36 | | 11,030,398 | | 12,676,606 |
6.5% 10/15/34 to 11/15/35 | | 242,959 | | 280,594 |
7% 1/15/28 to 7/15/32 | | 1,898,888 | | 2,238,174 |
7.5% 4/15/22 to 10/15/28 | | 469,592 | | 550,494 |
8% 2/15/17 to 9/15/30 | | 34,312 | | 40,412 |
8.5% 12/15/16 to 3/15/30 | | 6,567 | | 7,359 |
TOTAL GINNIE MAE | | 192,640,160 |
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $963,601,095) |
975,765,704
|
Asset-Backed Securities - 0.7% |
|
Accredited Mortgage Loan Trust Series 2005-1 Class M1, 0.622% 4/25/35 (f) | | 234,160 | | 203,164 |
Airspeed Ltd. Series 2007-1A Class C1, 2.6518% 6/15/32 (c)(f) | | 2,311,139 | | 1,305,793 |
Ally Master Owner Trust Series 2012-3 Class A2, 1.21% 6/15/17 | | 4,120,000 | | 4,147,126 |
Ameriquest Mortgage Securities, Inc. pass-thru certificates: | | | | |
Series 2003-10 Class M1, 1.2023% 12/25/33 (f) | | 20,639 | | 19,204 |
Series 2004-R2 Class M3, 0.9773% 4/25/34 (f) | | 31,593 | | 20,570 |
Series 2005-R2 Class M1, 0.602% 4/25/35 (f) | | 254,992 | | 254,312 |
Argent Securities, Inc. pass-thru certificates: | | | | |
Series 2003-W7 Class A2, 0.93% 3/25/34 (f) | | 16,878 | | 16,119 |
Series 2004-W11 Class M2, 1.202% 11/25/34 (f) | | 198,000 | | 190,103 |
Series 2004-W7 Class M1, 0.9773% 5/25/34 (f) | | 209,000 | | 202,843 |
Series 2006-W4 Class A2C, 0.312% 5/25/36 (f) | | 423,580 | | 148,774 |
Asset Backed Securities Corp. Home Equity Loan Trust Series 2004-HE2 Class M1, 0.977% 4/25/34 (f) | | 681,054 | | 626,339 |
Asset-Backed Securities - continued |
| Principal Amount | | Value |
Capital Auto Receivables Trust Series 2013-3 Class A3, 1.31% 12/20/17 | | $ 4,260,000 | | $ 4,295,707 |
Carrington Mortgage Loan Trust Series 2007-RFC1 Class A3, 0.292% 12/25/36 (f) | | 635,000 | | 395,262 |
CFC LLC: | | | | |
Series 2013-1A Class A, 1.65% 7/17/17 (c) | | 475,595 | | 477,100 |
Series 2013-2A Class A, 1.75% 11/15/17 (c) | | 2,647,536 | | 2,657,608 |
Countrywide Home Loans, Inc.: | | | | |
Series 2003-BC1 Class B1, 5.402% 3/25/32 (MGIC Investment Corp. Insured) (f) | | 11,075 | | 9,723 |
Series 2004-3 Class M4, 1.607% 4/25/34 (f) | | 28,610 | | 20,733 |
Series 2004-4 Class M2, 0.947% 6/25/34 (f) | | 101,134 | | 97,686 |
Series 2004-7 Class AF5, 5.868% 1/25/35 (b) | | 1,473,527 | | 1,543,804 |
Fannie Mae Series 2004-T5 Class AB3, 0.9146% 5/28/35 (f) | | 13,702 | | 12,745 |
Fieldstone Mortgage Investment Corp. Series 2004-3 Class M5, 2.3273% 8/25/34 (f) | | 102,000 | | 82,458 |
First Franklin Mortgage Loan Trust Series 2004-FF2 Class M3, 0.977% 3/25/34 (f) | | 3,702 | | 3,407 |
Ford Credit Floorplan Master Owner Trust Series 2013-3 Class A1, 0.79% 6/15/17 | | 8,230,000 | | 8,254,655 |
Fremont Home Loan Trust Series 2005-A: | | | | |
Class M3, 0.887% 1/25/35 (f) | | 334,000 | | 276,943 |
Class M4, 1.172% 1/25/35 (f) | | 122,221 | | 68,646 |
GCO Education Loan Funding Master Trust II Series 2007-1A Class C1L, 0.6072% 2/25/47 (c)(f) | | 673,193 | | 575,151 |
GE Business Loan Trust Series 2003-1 Class A, 0.5818% 4/15/31 (c)(f) | | 19,269 | | 18,597 |
GSAMP Trust Series 2004-AR1 Class B4, 5.5% 6/25/34 (c) | | 138,597 | | 9,073 |
Guggenheim Structured Real Estate Funding Ltd. Series 2006-3 Class C, 0.702% 9/25/46 (c)(f) | | 183,434 | | 184,168 |
Home Equity Asset Trust: | | | | |
Series 2003-3 Class M1, 1.442% 8/25/33 (f) | | 181,070 | | 169,952 |
Series 2003-5 Class A2, 0.852% 12/25/33 (f) | | 11,595 | | 10,857 |
HSI Asset Securitization Corp. Trust Series 2007-HE1 Class 2A3, 0.342% 1/25/37 (f) | | 436,000 | | 271,730 |
|
| Principal Amount | | Value |
JPMorgan Mortgage Acquisition Trust Series 2007-CH1 Class AV4, 0.28% 11/25/36 (f) | | $ 324,331 | | $ 320,590 |
KeyCorp Student Loan Trust Series 1999-A Class A2, 0.5639% 12/27/29 (f) | | 88,976 | | 88,050 |
MASTR Asset Backed Securities Trust Series 2007-HE1 Class M1, 0.452% 5/25/37 (f) | | 146,790 | | 1,300 |
Merrill Lynch Mortgage Investors Trust: | | | | |
Series 2003-OPT1 Class M1, 1.127% 7/25/34 (f) | | 26,234 | | 23,998 |
Series 2006-FM1 Class A2B, 0.26% 4/25/37 (f) | | 215,756 | | 199,370 |
Series 2006-OPT1 Class A1A, 0.672% 6/25/35 (f) | | 364,410 | | 346,943 |
Morgan Stanley ABS Capital I Trust: | | | | |
Series 2004-HE6 Class A2, 0.832% 8/25/34 (f) | | 20,187 | | 19,382 |
Series 2004-NC8 Class M6, 2.027% 9/25/34 (f) | | 76,769 | | 50,877 |
Series 2005-NC1 Class M1, 0.812% 1/25/35 (f) | | 141,000 | | 133,720 |
New Century Home Equity Loan Trust Series 2005-4 Class M2, 0.662% 9/25/35 (f) | | 503,000 | | 398,556 |
Park Place Securities, Inc.: | | | | |
Series 2004-WCW1: | | | | |
Class M3, 1.402% 9/25/34 (f) | | 188,000 | | 169,127 |
Class M4, 1.602% 9/25/34 (f) | | 241,000 | | 154,815 |
Series 2005-WCH1 Class M4, 0.982% 1/25/36 (f) | | 520,000 | | 459,384 |
Salomon Brothers Mortgage Securities VII, Inc. Series 2003-HE1 Class A, 0.952% 4/25/33 (f) | | 1,796 | | 1,702 |
Saxon Asset Securities Trust Series 2004-1 Class M1, 0.945% 3/25/35 (f) | | 342,236 | | 297,941 |
SLM Private Credit Student Loan Trust Series 2004-A Class C, 1.1806% 6/15/33 (f) | | 320,845 | | 287,170 |
Structured Asset Investment Loan Trust Series 2004-8 Class M5, 1.877% 9/25/34 (f) | | 17,445 | | 14,121 |
Terwin Mortgage Trust Series 2003-4HE Class A1, 1.012% 9/25/34 (f) | | 10,148 | | 9,622 |
Whinstone Capital Management Ltd. Series 1A Class B3, 2.0288% 10/25/44 (c)(f) | | 630,180 | | 635,347 |
TOTAL ASSET-BACKED SECURITIES (Cost $30,433,356) |
30,182,367
|
Collateralized Mortgage Obligations - 0.5% |
| Principal Amount | | Value |
Private Sponsor - 0.4% |
Bear Stearns ALT-A Trust floater Series 2005-1 Class A1, 0.712% 1/25/35 (f) | | $ 474,147 | | $ 473,168 |
Granite Master Issuer PLC floater: | | | | |
Series 2006-1A: | | | | |
Class A1, 0.223% 12/20/54 (c)(f) | | 3,441,536 | | 3,408,498 |
Class C2, 1.353% 12/20/54 (c)(f) | | 2,117,000 | | 2,095,830 |
Series 2006-2: | | | | |
Class A4, 0.233% 12/20/54 (f) | | 1,026,907 | | 1,017,048 |
Class C1, 1.093% 12/20/54 (f) | | 1,885,000 | | 1,843,530 |
Series 2006-3: | | | | |
Class A3, 0.233% 12/20/54 (f) | | 494,464 | | 489,915 |
Class A7, 0.353% 12/20/54 (f) | | 537,503 | | 533,741 |
Class C2, 1.153% 12/20/54 (f) | | 396,000 | | 388,634 |
Series 2006-4: | | | | |
Class A4, 0.253% 12/20/54 (f) | | 1,576,387 | | 1,561,726 |
Class B1, 0.333% 12/20/54 (f) | | 1,059,000 | | 1,031,360 |
Class C1, 0.913% 12/20/54 (f) | | 647,000 | | 625,973 |
Class M1, 0.493% 12/20/54 (f) | | 279,000 | | 270,239 |
Series 2007-1: | | | | |
Class 1C1, 0.753% 12/20/54 (f) | | 654,000 | | 625,943 |
Class 1M1, 0.453% 12/20/54 (f) | | 425,000 | | 412,930 |
Class 2A1, 0.293% 12/20/54 (f) | | 1,236,911 | | 1,226,273 |
Class 2C1, 1.013% 12/20/54 (f) | | 298,000 | | 291,444 |
Class 2M1, 0.653% 12/20/54 (f) | | 546,000 | | 533,988 |
Series 2007-2: | | | | |
Class 2C1, 1.0143% 12/17/54 (f) | | 757,000 | | 740,346 |
Class 3A1, 0.3343% 12/17/54 (f) | | 220,659 | | 218,938 |
Granite Mortgages PLC floater Series 2003-3 Class 1C, 2.6779% 1/20/44 (f) | | 151,584 | | 161,645 |
MASTR Adjustable Rate Mortgages Trust Series 2007-3 Class 22A2, 0.362% 5/25/47 (f) | | 183,936 | | 151,486 |
Merrill Lynch Alternative Note Asset Trust floater Series 2007-OAR1 Class A1, 0.322% 2/25/37 (f) | | 278,460 | | 255,682 |
|
| Principal Amount | | Value |
Opteum Mortgage Acceptance Corp. floater Series 2005-3 Class APT, 0.442% 7/25/35 (f) | | $ 480,300 | | $ 458,173 |
RESI Finance LP/RESI Finance DE Corp. floater Series 2003-B Class B5, 2.5003% 7/10/35 (c)(f) | | 96,517 | | 88,262 |
Sequoia Mortgage Trust floater Series 2004-6 Class A3B, 1.2269% 7/20/34 (f) | | 9,537 | | 9,188 |
TOTAL PRIVATE SPONSOR | | 18,913,960 |
U.S. Government Agency - 0.1% |
Fannie Mae: | | | | |
planned amortization class: | | | | |
Series 1999-54 Class PH, 6.5% 11/18/29 | | 634,111 | | 687,371 |
Series 1999-57 Class PH, 6.5% 12/25/29 | | 541,540 | | 620,736 |
Series 2002-9 Class PC, 6% 3/25/17 | | 41,005 | | 43,030 |
sequential payer Series 2004-86 Class KC, 4.5% 5/25/19 | | 21,473 | | 21,638 |
Freddie Mac planned amortization class Series 2500 Class TE, 5.5% 9/15/17 | | 1,055,669 | | 1,110,927 |
Ginnie Mae guaranteed REMIC pass-thru certificates Series 2007-35 Class SC, 0% 6/16/37 (f)(h) | | 65,112 | | 125,271 |
TOTAL U.S. GOVERNMENT AGENCY | | 2,608,973 |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $18,736,925) |
21,522,933
|
Commercial Mortgage Securities - 7.0% |
|
Banc of America Commercial Mortgage Trust: | | | | |
sequential payer: | | | | |
Series 2006-2 Class AAB, 5.7116% 5/10/45 (f) | | 597,051 | | 608,384 |
Series 2006-3 Class A4, 5.889% 7/10/44 | | 3,639,041 | | 3,924,593 |
Series 2006-5 Class A2, 5.317% 9/10/47 | | 3,862,219 | | 3,875,520 |
Series 2006-4 Class A1A, 5.617% 7/10/46 (f) | | 10,012,383 | | 10,889,728 |
Series 2007-3 Class A3, 5.5907% 6/10/49 (f) | | 4,384,176 | | 4,393,370 |
Banc of America Commercial Mortgage, Inc. sequential payer Series 2001-1 Class A4, 5.451% 1/15/49 | | 8,305,000 | | 8,953,288 |
Commercial Mortgage Securities - continued |
| Principal Amount | | Value |
Bayview Commercial Asset Trust floater: | | | | |
Series 2005-4A: | | | | |
Class A2, 0.542% 1/25/36 (c)(f) | | $ 507,500 | | $ 450,269 |
Class M1, 0.602% 1/25/36 (c)(f) | | 106,186 | | 59,463 |
Class M2, 0.622% 1/25/36 (c)(f) | | 32,034 | | 17,001 |
Class M3, 0.652% 1/25/36 (c)(f) | | 46,568 | | 24,118 |
Series 2007-1 Class A2, 0.422% 3/25/37 (c)(f) | | 145,571 | | 103,875 |
Series 2007-2A: | | | | |
Class A1, 0.422% 7/25/37 (c)(f) | | 153,783 | | 130,042 |
Class A2, 0.472% 7/25/37 (c)(f) | | 143,941 | | 104,024 |
Class M2, 0.562% 7/25/37 (c)(f) | | 79,967 | | 13,702 |
Class M3, 0.642% 7/25/37 (c)(f) | | 79,967 | | 8,365 |
Class M4, 0.802% 7/25/37 (c)(f) | | 20,153 | | 211 |
Series 2007-3: | | | | |
Class A2, 0.442% 7/25/37 (c)(f) | | 205,142 | | 146,854 |
Class M1, 0.462% 7/25/37 (c)(f) | | 84,039 | | 54,034 |
Class M2, 0.492% 7/25/37 (c)(f) | | 88,349 | | 50,430 |
Class M3, 0.522% 7/25/37 (c)(f) | | 193,075 | | 75,945 |
Class M4, 0.652% 7/25/37 (c)(f) | | 305,127 | | 70,299 |
Class M5, 0.752% 7/25/37 (c)(f) | | 114,207 | | 20,398 |
Class M6, 0.952% 7/25/37 (c)(f) | | 2,396 | | 17 |
Bear Stearns Commercial Mortgage Securities Trust floater Series 2007-BBA8: | | | | |
Class H, 0.7018% 3/15/22 (c)(f) | | 45,230 | | 45,244 |
Class J, 0.8518% 3/15/22 (c)(f) | | 147,000 | | 143,229 |
C-BASS Trust floater Series 2006-SC1 Class A, 0.42% 5/25/36 (c)(f) | | 169,222 | | 164,213 |
Citigroup/Deutsche Bank Commercial Mortgage Trust sequential payer Series 2007-CD4: | | | | |
Class A3, 5.293% 12/11/49 | | 4,855,318 | | 4,944,175 |
Class A4, 5.322% 12/11/49 | | 16,150,000 | | 17,570,263 |
COMM Mortgage Trust pass-thru certificates: | | | | |
floater Series 2005-F10A Class J, 1.0018% 4/15/17 (c)(f) | | 44,103 | | 44,116 |
|
| Principal Amount | | Value |
sequential payer Series 2006-C7 Class A1A, 5.7412% 6/10/46 (f) | | $ 8,652,287 | | $ 9,305,552 |
Series 2004-LB4A Class A5, 4.84% 10/15/37 | | 4,204,110 | | 4,217,311 |
Credit Suisse Commercial Mortgage Trust: | | | | |
sequential payer: | | | | |
Series 2007-C2 Class A2, 5.448% 1/15/49 (f) | | 10,599 | | 10,563 |
Series 2007-C3 Class A4, 5.6765% 6/15/39 (f) | | 2,384,734 | | 2,589,068 |
Series 2007-C5 Class A4, 5.695% 9/15/40 (f) | | 2,750,000 | | 3,026,628 |
Credit Suisse First Boston Mortgage Securities Corp. Series 2001-CKN5 Class AX, 0% 9/15/34 (c)(f)(g) | | 11,272 | | 0 |
Credit Suisse Mortgage Capital Certificates floater Series 2007-TFL1 Class F, 0.4718% 2/15/22 (c)(f) | | 19,794 | | 19,591 |
GE Capital Commercial Mortgage Corp. sequential payer Series 2007-C1 Class A4, 5.543% 12/10/49 | | 5,341,000 | | 5,801,928 |
Greenwich Capital Commercial Funding Corp.: | | | | |
sequential payer Series 2007-GG9 Class A4, 5.444% 3/10/39 | | 2,090,000 | | 2,280,537 |
Series 2006-GG7 Class A4, 5.8198% 7/10/38 (f) | | 4,898,359 | | 5,272,079 |
GS Mortgage Securities Corp. II Series 2006-GG6 Class A2, 5.506% 4/10/38 | | 14,189 | | 14,175 |
GS Mortgage Securities Trust sequential payer Series 2006-GG8 Class A4, 5.56% 11/10/39 (f) | | 920,000 | | 997,597 |
Hilton U.S.A. Trust Series 2013-HLT: | | | | |
Class CFX, 3.7141% 11/5/30 (c) | | 890,000 | | 905,778 |
Class DFX, 4.4065% 11/5/30 (c) | | 8,320,000 | | 8,608,445 |
JPMorgan Chase Commercial Mortgage Securities Trust: | | | | |
floater Series 2006-FL2A: | | | | |
Class E, 0.4318% 11/15/18 (c)(f) | | 39,013 | | 38,617 |
Class F, 0.4818% 11/15/18 (c)(f) | | 88,352 | | 85,726 |
Class G, 0.5118% 11/15/18 (c)(f) | | 76,973 | | 72,586 |
Class H, 0.6518% 11/15/18 (c)(f) | | 58,914 | | 54,461 |
sequential payer: | | | | |
Series 2006-CB16 Class A1A, 5.546% 5/12/45 | | 5,780,439 | | 6,258,019 |
Commercial Mortgage Securities - continued |
| Principal Amount | | Value |
JPMorgan Chase Commercial Mortgage Securities Trust: - continued | | | | |
sequential payer: | | | | |
Series 2006-CB17 Class A4, 5.429% 12/12/43 | | $ 2,810,000 | | $ 3,025,347 |
Series 2006-LDP8 Class A1A, 5.397% 5/15/45 | | 9,747,982 | | 10,530,385 |
Series 2007-CB18 Class A4, 5.44% 6/12/47 | | 857,485 | | 935,354 |
Series 2007-CB19 Class A4, 5.703% 2/12/49 (f) | | 4,967,639 | | 5,475,452 |
Series 2007-LD11 Class A4, 5.8036% 6/15/49 (f) | | 6,664,597 | | 7,328,844 |
Series 2007-LDPX Class A3, 5.42% 1/15/49 | | 5,134,669 | | 5,607,844 |
Series 2006-LDP7 Class A4, 5.8634% 4/15/45 (f) | | 8,035,000 | | 8,642,743 |
Series 2007-CB20 Class A1A, 5.746% 2/12/51 | | 15,230,297 | | 17,006,744 |
Series 2007-LDP10 Class CS, 5.466% 1/15/49 (f) | | 745,000 | | 89,427 |
LB Commercial Conduit Mortgage Trust sequential payer Series 2007-C3 Class A4, 5.8932% 7/15/44 (f) | | 3,733,000 | | 4,144,209 |
LB-UBS Commercial Mortgage Trust: | | | | |
sequential payer: | | | | |
Series 2007-C1 Class A4, 5.424% 2/15/40 | | 12,445,592 | | 13,586,902 |
Series 2007-C2 Class A3, 5.43% 2/15/40 | | 957,494 | | 1,050,164 |
Series 2007-C7 Class A3, 5.866% 9/15/45 | | 4,487,299 | | 5,045,870 |
Merrill Lynch Mortgage Trust Series 2007-C1 Class A4, 5.829% 6/12/50 (f) | | 10,916,000 | | 12,195,410 |
Merrill Lynch-CFC Commercial Mortgage Trust: | | | | |
sequential payer: | | | | |
Series 2006-4 Class A3, 5.172% 12/12/49 (f) | | 490,000 | | 527,305 |
Series 2007-5 Class A4, 5.378% 8/12/48 | | 2,479,276 | | 2,674,849 |
Series 2007-6 Class A4, 5.485% 3/12/51 (f) | | 3,875,000 | | 4,256,153 |
Series 2007-9 Class A4, 5.7% 9/12/49 | | 5,500,000 | | 6,109,978 |
Series 2007-7 Class B, 5.7432% 6/12/50 (f) | | 770,000 | | 30,836 |
Morgan Stanley Capital I Trust: | | | | |
floater: | | | | |
Series 2006-XLF Class C, 1.355% 7/15/19 (c)(f) | | 113,478 | | 70,854 |
Series 2007-XLFA: | | | | |
Class D, 0.345% 10/15/20 (c)(f) | | 235,000 | | 231,837 |
|
| Principal Amount | | Value |
Class E, 0.405% 10/15/20 (c)(f) | | $ 294,000 | | $ 288,573 |
Class F, 0.455% 10/15/20 (c)(f) | | 176,000 | | 171,871 |
Class G, 0.495% 10/15/20 (c)(f) | | 218,000 | | 210,706 |
Class H, 0.585% 10/15/20 (c)(f) | | 137,000 | | 125,566 |
Class J, 0.735% 10/15/20 (c)(f) | | 79,407 | | 41,017 |
sequential payer Series 2007-HQ11 Class A31, 5.439% 2/12/44 (f) | | 1,043,735 | | 1,048,638 |
Series 2007-HQ12 Class A2, 5.5924% 4/12/49 (f) | | 2,136,264 | | 2,136,816 |
Series 2007-IQ14 Class B, 5.722% 4/15/49 (f) | | 2,175,000 | | 476,456 |
Providence Place Group Ltd. Partnership Series 2000-C1 Class A2, 7.75% 7/20/28 (c) | | 3,913,418 | | 5,082,747 |
Wachovia Bank Commercial Mortgage Trust: | | | | |
floater: | | | | |
Series 2006-WL7A: | | | | |
Class G, 0.5143% 9/15/21 (c)(f) | | 358,893 | | 351,839 |
Class J, 0.7543% 9/15/21 (c)(f) | | 139,000 | | 133,488 |
Series 2007-WHL8 Class F, 0.6318% 6/15/20 (c)(f) | | 1,046,000 | | 964,347 |
sequential payer: | | | | |
Series 2006-C28 Class A4, 5.572% 10/15/48 | | 3,746,125 | | 4,039,409 |
Series 2006-C29 Class A1A, 5.297% 11/15/48 | | 3,357,746 | | 3,665,067 |
Series 2007-C30 Class A5, 5.342% 12/15/43 | | 13,901,000 | | 15,137,445 |
Series 2007-C31 Class A4, 5.509% 4/15/47 | | 6,652,000 | | 7,201,595 |
Series 2007-C32 Class A3, 5.7454% 6/15/49 (f) | | 10,240,000 | | 11,255,982 |
Series 2007-C33 Class A4, 5.9436% 2/15/51 (f) | | 5,735,000 | | 6,275,449 |
Series 2006-C23 Class A5, 5.416% 1/15/45 (f) | | 3,010,000 | | 3,204,807 |
Series 2006-C26 Class A1A, 6.009% 6/15/45 (f) | | 4,633,727 | | 5,018,840 |
Series 2006-C27 Class A1A, 5.749% 7/15/45 (f) | | 8,202,639 | | 8,897,837 |
Series 2007-C31 Class C, 5.6701% 4/15/47 (f) | | 2,455,000 | | 2,365,402 |
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $289,369,611) |
293,104,235
|
Municipal Securities - 2.7% |
| Principal Amount | | Value |
Beaver County Indl. Dev. Auth. Poll. Cont. Rev. Bonds (FirstEnergy Nuclear Generation Corp. Proj.) Series 2005 A, 3.375%, tender 7/1/15 (f) | | $ 1,200,000 | | $ 1,224,768 |
California Gen. Oblig.: | | | | |
Series 2009, 7.35% 11/1/39 | | 805,000 | | 1,151,665 |
6.65% 3/1/22 | | 4,360,000 | | 5,424,494 |
7.3% 10/1/39 | | 6,270,000 | | 8,922,649 |
7.5% 4/1/34 | | 5,055,000 | | 7,195,793 |
7.6% 11/1/40 | | 10,310,000 | | 15,587,586 |
7.625% 3/1/40 | | 1,675,000 | | 2,471,027 |
Chicago Gen. Oblig.: | | | | |
(Taxable Proj.): | | | | |
Series 2008 B, 5.63% 1/1/22 | | 880,000 | | 946,950 |
Series 2010 C1, 7.781% 1/1/35 | | 4,760,000 | | 5,892,547 |
Series 2012 B, 5.432% 1/1/42 | | 1,205,000 | | 1,196,914 |
6.314% 1/1/44 | | 5,300,000 | | 5,817,969 |
Illinois Gen. Oblig.: | | | | |
Series 2003: | | | | |
4.35% 6/1/18 | | 445,000 | | 470,788 |
5.1% 6/1/33 | | 20,780,000 | | 20,878,082 |
Series 2010, 4.421% 1/1/15 | | 2,850,000 | | 2,903,837 |
Series 2010-1, 6.63% 2/1/35 | | 3,720,000 | | 4,248,054 |
Series 2010-3: | | | | |
5.547% 4/1/19 | | 120,000 | | 132,737 |
6.725% 4/1/35 | | 5,545,000 | | 6,442,680 |
7.35% 7/1/35 | | 2,580,000 | | 3,123,967 |
Series 2011: | | | | |
4.961% 3/1/16 | | 365,000 | | 388,261 |
5.365% 3/1/17 | | 140,000 | | 153,215 |
5.665% 3/1/18 | | 3,680,000 | | 4,108,168 |
5.877% 3/1/19 | | 9,635,000 | | 10,854,117 |
Series 2013: | | | | |
2.69% 12/1/17 | | 1,225,000 | | 1,245,825 |
3.14% 12/1/18 | | 1,270,000 | | 1,291,806 |
TOTAL MUNICIPAL SECURITIES (Cost $105,130,514) |
112,073,899
|
Foreign Government and Government Agency Obligations - 0.7% |
|
Banco Nacional de Desenvolvimento Economico e Social: | | | | |
3.375% 9/26/16 (c) | | 4,235,000 | | 4,377,931 |
|
| Principal
Amount | | Value |
5.75% 9/26/23 (c) | | $ 3,877,000 | | $ 4,167,775 |
Brazilian Federative Republic: | | | | |
4.25% 1/7/25 | | 4,015,000 | | 4,069,203 |
5.625% 1/7/41 | | 4,104,000 | | 4,411,800 |
United Mexican States: | | | | |
4% 10/2/23 | | 9,396,000 | | 9,875,196 |
4.75% 3/8/44 | | 4,170,000 | | 4,253,400 |
TOTAL FOREIGN GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $29,949,151) |
31,155,305
|
Bank Notes - 0.0% |
|
Fifth Third Bank 4.75% 2/1/15
(Cost $491,199) | | 487,000 | |
498,797
|
Money Market Funds - 7.1% |
| Shares | | |
Fidelity Cash Central Fund, 0.11% (a)
(Cost $294,490,988) | 294,490,988 | |
294,490,988
|
TOTAL INVESTMENT
PORTFOLIO - 103.9% (Cost $4,213,318,395) | | 4,333,679,044 |
NET OTHER ASSETS (LIABILITIES) - (3.9)% | | (164,532,286) |
NET ASSETS - 100% | $ 4,169,146,758 |
TBA Sale Commitments |
| Principal
Amount | | |
Fannie Mae |
3% 7/1/44 | $ (31,700,000) | | (31,283,941) |
4.5% 7/1/44 | (7,500,000) | | (8,116,406) |
4.5% 7/1/44 | (10,000,000) | | (10,821,875) |
4.5% 7/1/44 | (7,200,000) | | (7,791,750) |
4.5% 7/1/44 | (2,800,000) | | (3,030,124) |
TOTAL FANNIE MAE | | (61,044,096) |
Freddie Mac |
4.5% 7/1/44 | (10,200,000) | | (11,031,939) |
TOTAL TBA SALE COMMITMENTS (Proceeds $71,715,344) | $ (72,076,035) |
Swaps |
Credit Default Swaps |
Underlying Reference | Rating(1) | Expiration Date | Clearinghouse/
Counterparty | Fixed Payment Received/
(Paid) | Notional Amount(2) | Value(1) | Upfront
Premium Received/
(Paid) | Unrealized
Appreciation/
(Depreciation) |
Sell Protection |
Ameriquest Mortgage Securities Inc Series 2004-R11 Class M9 | C | Dec. 2034 | Bank of America | 4.25% | $ 48,128 | $ (46,457) | $ 0 | $ (46,457) |
Ameriquest Mortgage Securities Inc Series 2004-R11 Class M9 | C | Dec. 2034 | Credit Suisse | 4.25% | 83,608 | (80,703) | 0 | (80,703) |
Morgan Stanley ABS Capital I Inc Series 2004-HE7 Class B3 | C | Sep. 2034 | Morgan Stanley, Inc. | 5.10% | 78,601 | (54,351) | 0 | (54,351) |
Morgan Stanley ABS Capital I Inc Series 2004-NC6 Class M3 | Ca | Aug. 2034 | Barclays Bank PLC | 1.545% | 64,313 | (13,844) | 0 | (13,844) |
TOTAL CREDIT DEFAULT SWAPS | $ (195,355) | $ 0 | $ (195,355) |
|
(1) Ratings are presented for credit default swaps in which the Fund has sold protection on the underlying referenced debt. Ratings for an underlying index represent a weighted average of the ratings of all securities included in the index. The credit rating or value can be measures of the current payment/performance risk. Ratings are from Moody's Investors Service, Inc. Where Moody's ratings are not available, S&P ratings are disclosed and are indicated as such. All ratings are as of the report date and do not reflect subsequent changes. |
|
(2) The notional amount of each credit default swap where the Fund has sold protection approximates the maximum potential amount of future payments that the Fund could be required to make if a credit event were to occur. |
Legend |
(a) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request. |
(b) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. |
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $183,079,868 or 4.4% of net assets. |
(d) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(e) Security or a portion of the security has been segregated as collateral for open bi-lateral over-the-counter (OTC) swaps. At period end, the value of securities pledged amounted to $1,522,871. |
(f) Coupon rates for floating and adjustable rate securities reflect the rates in effect 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 as of the end of the period. |
(h) Coupon is inversely indexed to a floating interest rate multiplied by a specified factor. The price may be considerably more volatile than the price of a comparable fixed rate security. |
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 | $ 142,747 |
Other Information |
The following is a summary of the inputs used, as of June 30, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | | | | |
Corporate Bonds | $ 1,361,129,997 | $ - | $ 1,361,129,997 | $ - |
U.S. Government and Government Agency Obligations | 1,213,754,819 | - | 1,213,754,819 | - |
U.S. Government Agency - Mortgage Securities | 975,765,704 | - | 975,765,704 | - |
Asset-Backed Securities | 30,182,367 | - | 28,057,059 | 2,125,308 |
Collateralized Mortgage Obligations | 21,522,933 | - | 21,434,671 | 88,262 |
Commercial Mortgage Securities | 293,104,235 | - | 293,033,381 | 70,854 |
Municipal Securities | 112,073,899 | - | 112,073,899 | - |
Foreign Government and Government Agency Obligations | 31,155,305 | - | 31,155,305 | - |
Bank Notes | 498,797 | - | 498,797 | - |
Money Market Funds | 294,490,988 | 294,490,988 | - | - |
Total Investments in Securities: | $ 4,333,679,044 | $ 294,490,988 | $ 4,036,903,632 | $ 2,284,424 |
Derivative Instruments: | | | | |
Liabilities | | | | |
Swaps | $ (195,355) | $ - | $ (195,355) | $ - |
Other Financial Instruments: | | | | |
TBA Sale Commitments | $ (72,076,035) | $ - | $ (72,076,035) | $ - |
Value of Derivative Instruments |
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of June 30, 2014. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements. |
Primary Risk Exposure /
Derivative Type | Value |
| Asset | Liability |
Credit Risk | | |
Swaps (a) | $ - | $ (195,355) |
Total Value of Derivatives | $ - | $ (195,355) |
(a) For bi-lateral OTC swaps, reflects gross value which is presented in the Statement of Assets and Liabilities in the bi-lateral OTC swaps, at value line-items. |
See accompanying notes which are an integral part of the financial statements.
Not Part of Financial Report
Financial Statements
Statement of Assets and Liabilities
| June 30, 2014 |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $3,918,827,407) | $ 4,039,188,056 | |
Fidelity Central Funds (cost $294,490,988) | 294,490,988 | |
Total Investments (cost $4,213,318,395) | | $ 4,333,679,044 |
Cash | | 2 |
Receivable for investments sold, regular delivery | | 50,269 |
Receivable for TBA sale commitments | | 71,715,344 |
Receivable for swaps | | 678 |
Interest receivable | | 25,520,160 |
Distributions receivable from Fidelity Central Funds | | 24,020 |
Other receivables | | 299,711 |
Total assets | | 4,431,289,228 |
| | |
Liabilities | | |
Payable for investments purchased
Regular delivery | $ 51,299,876 | |
Delayed delivery | 137,974,076 | |
TBA sale commitments, at value | 72,076,035 | |
Payable for fund shares redeemed | 272,875 | |
Distributions payable | 12 | |
Bi-lateral OTC swaps, at value | 195,355 | |
Other payables and accrued expenses | 324,241 | |
Total liabilities | | 262,142,470 |
| | |
Net Assets | | $ 4,169,146,758 |
Net Assets consist of: | | |
Paid in capital | | $ 4,072,715,550 |
Undistributed net investment income | | 3,669,519 |
Accumulated undistributed net realized gain (loss) on investments | | (27,042,923) |
Net unrealized appreciation (depreciation) on investments | | 119,804,612 |
Net Assets, for 39,226,288 shares outstanding | | $ 4,169,146,758 |
Net Asset Value, offering price and redemption price per share ($4,169,146,758 ÷ 39,226,288 shares) | | $ 106.28 |
Statement of Operations
| Six months ended June 30, 2014 |
| | |
Investment Income | | |
Interest | | $ 60,594,285 |
Income from Fidelity Central Funds | | 142,747 |
Total income | | 60,737,032 |
| | |
Expenses | | |
Custodian fees and expenses | $ 35,979 | |
Independent trustees' compensation | 7,819 | |
Total expenses before reductions | 43,798 | |
Expense reductions | (7,909) | 35,889 |
Net investment income (loss) | | 60,701,143 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 1,190,199 | |
Swaps | (239,894) | |
Total net realized gain (loss) | | 950,305 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 115,179,712 | |
Swaps | 213,206 | |
Delayed delivery commitments | (352,456) | |
Total change in net unrealized appreciation (depreciation) | | 115,040,462 |
Net gain (loss) | | 115,990,767 |
Net increase (decrease) in net assets resulting from operations | | $ 176,691,910 |
See accompanying notes which are an integral part of the financial statements.
Not Part of Financial Report
Statement of Changes in Net Assets
| Six months ended
June 30,
2014 | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 60,701,143 | $ 111,623,482 |
Net realized gain (loss) | 950,305 | (29,715,704) |
Change in net unrealized appreciation (depreciation) | 115,040,462 | (143,796,025) |
Net increase (decrease) in net assets resulting from operations | 176,691,910 | (61,888,247) |
Distributions to shareholders from net investment income | (59,837,929) | (111,480,985) |
Distributions to shareholders from net realized gain | - | (47,197,834) |
Total distributions | (59,837,929) | (158,678,819) |
Share transactions
Proceeds from sales of shares | 152,304,559 | 138,326,373 |
Reinvestment of distributions | 59,837,917 | 158,678,818 |
Cost of shares redeemed | (105,598,625) | (383,113,369) |
Net increase (decrease) in net assets resulting from share transactions | 106,543,851 | (86,108,178) |
Total increase (decrease) in net assets | 223,397,832 | (306,675,244) |
| | |
Net Assets | | |
Beginning of period | 3,945,748,926 | 4,252,424,170 |
End of period (including undistributed net investment income of $3,669,519 and undistributed net investment income of $2,806,305, respectively) | $ 4,169,146,758 | $ 3,945,748,926 |
Other Information Shares | | |
Sold | 1,462,633 | 1,312,355 |
Issued in reinvestment of distributions | 567,385 | 1,501,757 |
Redeemed | (1,006,148) | (3,663,162) |
Net increase (decrease) | 1,023,870 | (849,050) |
Financial Highlights
| Six months ended
June 30, | Years ended December 31, |
| 2014 | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 103.29 | $ 108.89 | $ 107.64 | $ 105.18 | $ 104.52 | $ 94.78 |
Income from Investment Operations | | | | | | |
Net investment income (loss) D | 1.559 | 2.829 | 3.111 | 3.817 | 3.943 | 4.762 |
Net realized and unrealized gain (loss) | 2.968 | (4.398) | 3.442 | 4.385 | 4.424 | 9.818 |
Total from investment operations | 4.527 | (1.569) | 6.553 | 8.202 | 8.367 | 14.580 |
Distributions from net investment income | (1.537) | (2.826) | (3.056) | (3.851) | (3.947) | (4.580) |
Distributions from net realized gain | - | (1.205) | (2.247) | (1.891) | (3.760) | (.260) |
Total distributions | (1.537) | (4.031) | (5.303) | (5.742) | (7.707) | (4.840) |
Net asset value, end of period | $ 106.28 | $ 103.29 | $ 108.89 | $ 107.64 | $ 105.18 | $ 104.52 |
Total ReturnB, C | 4.40% | (1.46)% | 6.16% | 7.96% | 8.12% | 15.71% |
Ratios to Average Net AssetsE, H | | | | | | |
Expenses before reductionsG | -%A | -% | -% | -% | -% | -% |
Expenses net of fee waivers, if anyG | -%A | -% | -% | -% | -% | -% |
Expenses net of all reductionsG | -%A | -% | -% | -% | -% | -% |
Net investment income (loss) | 2.99%A | 2.68% | 2.84% | 3.57% | 3.65% | 4.75% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 4,169,147 | $ 3,945,749 | $ 4,252,424 | $ 3,790,381 | $ 3,758,091 | $ 3,957,226 |
Portfolio turnover rateF | 170%A | 333% | 291% | 302% | 230% | 141% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
See accompanying notes which are an integral part of the financial statements.
Not Part of Financial Report
Notes to Financial Statements
For the period ended June 30, 2014
1. Organization.
Fidelity® VIP Investment Grade Central Fund (the Fund) is a fund of Fidelity Garrison Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the Fund are only offered to other investment companies and accounts managed by Fidelity Management & Research Company (FMR), or its affiliates (the Investing Funds).
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the FMR Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank notes, foreign government and government agency obligations, municipal securities and U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. Asset backed securities, collateralized mortgage obligations, commercial mortgage securities and U.S. government agency mortgage securities are valued by pricing vendors who utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. Brokers which make markets in asset backed securities, collateralized mortgage obligations and commercial mortgage securities may also consider such factors as the structure of the issue, cash flow assumptions, the value of underlying assets as well as any guarantees. Swaps are marked-to-market daily based on valuations from third party pricing vendors, registered derivatives clearing organizations (clearinghouses) or broker-supplied valuations. These pricing sources may utilize inputs such as interest rate curves, credit spread curves, default possibilities and recovery rates. When independent prices are unavailable or unreliable, debt securities and swaps may be valued utilizing pricing methodologies which consider similar
Not Part of Financial Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
factors that would be used by third party pricing vendors. Debt securities and swaps are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of June 30, 2014 is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. The principal amount on inflation-indexed securities is periodically adjusted to the rate of inflation and interest is accrued based on the principal amount. The adjustments to principal due to inflation are reflected as increases or decreases to Interest in the accompanying Statement of Operations.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to swaps agreements, market discount, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 143,514,464 |
Gross unrealized depreciation | (19,775,515) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 123,738,949 |
| |
Tax cost | $ 4,209,940,095 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of prior fiscal period end and is subject to adjustment.
No expiration | |
Short-term | $ (27,535,971) |
Delayed Delivery Transactions and When-Issued Securities. During the period, the Fund transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a
Not Part of Financial Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Delayed Delivery Transactions and When-Issued Securities - continued
delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
To-Be-Announced (TBA) Securities and Mortgage Dollar Rolls. During the period, the Fund transacted in TBA securities that involved buying or selling mortgage-backed securities (MBS) on a forward commitment basis. A TBA transaction typically does not designate the actual security to be delivered and only includes an approximate principal amount; however delivered securities must meet specified terms defined by industry guidelines, including issuer, rate and current principal amount outstanding on underlying mortgage pools. The Fund may enter into a TBA transaction with the intent to take possession of or deliver the underlying MBS, or the Fund may elect to extend the settlement by entering into either a mortgage or reverse mortgage dollar roll. Mortgage dollar rolls are transactions where a fund sells TBA securities and simultaneously agrees to repurchase MBS on a later date at a lower price and with the same counterparty. Reverse mortgage dollar rolls involve the purchase and simultaneous agreement to sell TBA securities on a later date at a lower price. Transactions in mortgage dollar rolls and reverse mortgage dollar rolls are accounted for as purchases and sales and may result in an increase to the Fund's portfolio turnover rate.
Purchases and sales of TBA securities involve risks similar to those discussed above for delayed delivery and when-issued securities. Also, if the counterparty in a mortgage dollar roll or a reverse mortgage dollar roll transaction files for bankruptcy or becomes insolvent, the Fund's right to repurchase or sell securities may be limited. Additionally, when a fund sells TBA securities without already owning or having the right to obtain the deliverable securities (an uncovered forward commitment to sell), it incurs a risk of loss because it could have to purchase the securities at a price that is higher than the price at which it sold them. A fund may be unable to purchase the deliverable securities if the corresponding market is illiquid.
TBA securities subject to a forward commitment to sell at period end are included at the end of the Fund's Schedule of Investments under the caption "TBA Sale Commitments." The proceeds and value of these commitments are reflected in the Fund's Statement of Assets and Liabilities as Receivable for TBA sale commitments and TBA sale commitments, at value, respectively.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including swaps. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns, to gain exposure to certain types of assets and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
Credit Risk | Credit risk relates to the ability of the issuer of a financial instrument to make further principal or interest payments on an obligation or commitment that it has to the Fund. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain OTC derivatives such as bi-lateral swaps, the Fund attempts to reduce its exposure to counterparty credit risk by entering into an International Swaps and Derivatives Association, Inc. (ISDA) Master Agreement with each of its counterparties. The ISDA Master Agreement gives the Fund the right to terminate all transactions traded under such agreement upon the deterioration in the credit quality of the counterparty beyond specified levels. The ISDA Master Agreement gives each party the right, upon an event of default by the other party or a termination of the agreement, to close out all transactions traded under such agreement and to net amounts owed under each transaction to one net payable by
Not Part of Financial Report
4. Derivative Instruments - continued
Risk Exposures and the Use of Derivative Instruments - continued
one party to the other. To mitigate counterparty credit risk on bi-lateral OTC derivatives, the Fund receives collateral in the form of cash or securities once the Fund's net unrealized appreciation on outstanding derivative contracts under an ISDA Master Agreement exceeds certain applicable thresholds, subject to certain minimum transfer provisions. The collateral received is held in segregated accounts with the Fund's custodian bank in accordance with the collateral agreements entered into between the Fund, the counterparty and the Fund's custodian bank. The Fund could experience delays and costs in gaining access to the collateral even though it is held by the Fund's custodian bank. The Fund's maximum risk of loss from counterparty credit risk related to bi-lateral OTC derivatives is generally the aggregate unrealized appreciation and unpaid counterparty payments in excess of any collateral pledged by the counterparty to the Fund. The Fund may be required to pledge collateral for the benefit of the counterparties on bi-lateral OTC derivatives in an amount not less than each counterparty's unrealized appreciation on outstanding derivative contracts, subject to certain minimum transfer provisions, and any such pledged collateral is identified in the Schedule of Investments.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Net Realized Gain (Loss) and Change in Net Unrealized Appreciation (Depreciation) on Derivatives. The table below, which reflects the impacts of derivatives on the financial performance of the Fund, summarizes the net realized gain (loss) and change in net unrealized appreciation (depreciation) for derivatives during the period as presented in the Statement of Operations.
Primary Risk Exposure / Derivative Type | Net Realized
Gain (Loss) | Change in Net
Unrealized
Appreciation
(Depreciation) |
Credit Risk | | |
Swaps (a) | $ (239,894) | $ 213,206 |
(a) A summary of the value of derivatives by primary risk exposure as of period end is included at the end of the Schedule of Investments.
Swaps. A swap is a contract between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. A bi-lateral OTC swap is a transaction between a fund and a dealer counterparty where cash flows are exchanged between the two parties for the life of the swap.
Bi-lateral OTC swaps are marked-to-market daily and changes in value are reflected in the Statement of Assets and Liabilities in the bi-lateral OTC swaps at value line items. Any upfront premiums paid or received upon entering a bi-lateral OTC swap to compensate for differences between stated terms of the swap and prevailing market conditions (e.g. credit spreads, interest rates or other factors) are recorded in net unrealized appreciation (depreciation) in the Statement of Assets and Liabilities and amortized to realized gain or (loss) ratably over the term of the swap. Any unamortized upfront premiums are presented in the Schedule of Investments.
Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gain or (loss). Some swaps may be terminated prior to the effective date and realize a gain or loss upon termination. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on swaps during the period is included in the Statement of Operations.
Any open swaps at period end are included in the Schedule of Investments under the caption "Swaps" and are representative of volume of activity during the period.
Credit Default Swaps. Credit default swaps enable the Fund to buy or sell protection against specified credit events on a single-name issuer or a traded credit index. Under the terms of a credit default swap the buyer of protection (buyer) receives credit protection in exchange for making periodic payments to the seller of protection (seller) based on a fixed percentage applied to a notional principal amount. In return for these payments, the seller will be required to make a payment upon the occurrence of one or more specified credit events. The Fund enters into credit default swaps as a seller to gain credit exposure to an issuer and/or as a buyer to obtain a measure of protection against defaults of an issuer. Periodic payments are made over the life of the contract by the buyer provided that no credit event occurs.
For credit default swaps on most corporate and sovereign issuers, credit events include bankruptcy, failure to pay or repudiation/moratorium. For credit default swaps on corporate or sovereign issuers, the obligation that may be put to the seller is not limited to the specific reference obligation described in the Schedule of Investments. For credit default swaps on asset-backed securities, a credit event may be triggered by events such as failure to pay principal, maturity extension, rating downgrade or write-down. For credit default swaps on asset-backed securities, the reference obligation described represents the security that may be put to the seller. For credit default swaps on a traded credit index, a specified credit event may affect all or individual underlying securities included in the index.
As a seller, if an underlying credit event occurs, the Fund will pay a net settlement amount of cash equal to the notional amount of the swap less the recovery value of the reference obligation or underlying securities comprising an index. Only in the event of the industry's inability to value the
Not Part of Financial Report
Notes to Financial Statements - continued
4. Derivative Instruments - continued
Credit Default Swaps - continued
underlying asset will the Fund be required to take delivery of the reference obligation or underlying securities comprising an index and pay an amount equal to the notional amount of the swap.
As a buyer, if an underlying credit event occurs, the Fund will receive a net settlement amount of cash equal to the notional amount of the swap less the recovery value of the reference obligation or underlying securities comprising an index. Only in the event of the industry's inability to value the underlying asset will the Fund be required to deliver the reference obligation or underlying securities comprising an index in exchange for payment of an amount equal to the notional amount of the swap.
Typically, the value of each credit default swap and credit rating disclosed for each reference obligation in the Schedule of Investments, where the Fund is the seller, can be used as measures of the current payment/performance risk of the swap. As the value of the swap changes as a positive or negative percentage of the total notional amount, the payment/performance risk may decrease or increase, respectively. In addition to these measures, the investment adviser monitors a variety of factors including cash flow assumptions, market activity and market sentiment as part of its ongoing process of assessing payment/performance risk.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $258,338,012 and $171,055,287, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee and Expense Contract. Fidelity Investments Money Management, Inc. (the investment adviser), an affiliate of FMR, provides the Fund with investment management services. The Fund does not pay any fees for these services. Pursuant to the Fund's management contract with the investment adviser, FMR pays the investment adviser a portion of the management fees it receives from the Investing Funds. In addition, under an expense contract, FMR also pays all other expenses of the Fund, excluding custody fees, the compensation of the independent Trustees, and certain exceptions such as interest expense.
7. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is maintained at the Fund's custodian and/or invested in cash equivalents. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of interest income. Total security lending income during the period amounted to $79,476.
8. Expense Reductions.
The investment adviser has voluntarily agreed to reimburse a portion of the Fund's operating expenses. For the period, the reimbursement reduced the expenses by $7,819.
In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $90.
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.
Not Part of Financial Report
9. Other - continued
At the end of the period, mutual funds managed by the investment adviser or its affiliates were the owners of record of all of the outstanding shares of the Fund according to the following schedule.
Fund | Ownership % |
VIP Asset Manager Portfolio | 12.35% |
VIP Asset Manager: Growth Portfolio | 1.07% |
VIP Balanced Portfolio | 15.52% |
VIP Investment Grade Bond Portfolio | 71.06% |
10. Credit Risk.
The Fund invests a portion of its assets in structured securities of issuers backed by residential mortgage loans, credit card receivables and automotive loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults.
Not Part of Financial Report
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Garrison Street Trust and Shareholders of Fidelity VIP Investment Grade Central Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity VIP Investment Grade Central Fund (the Fund), a fund of Fidelity Garrison Street Trust, including the schedule of investments, as of June 30, 2014, and the related statement of operations for the six months then ended, the statements of changes in net assets for the six months ended June 30, 2014 and for the year ended December 31, 2013, and the financial highlights for the six months ended June 30, 2014 and for each of the five years in the period ended December 31, 2013. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements 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 June 30, 2014, 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 VIP Investment Grade Central Fund as of June 30, 2014, the results of its operations for the six months then ended, the changes in its net assets for the six months ended June 30, 2014 and for the year ended December 31, 2013, and the financial highlights for the six months ended June 30, 2014 and for each of the five years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
August 15, 2014
Not Part of Financial Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Adviser
Fidelity Investments Money Management, Inc.
Fidelity Management & Research (U.K.) Inc.
Fidelity Management & Research (Hong Kong) Limited
Fidelity Management & Research (Japan) Inc.
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Co., Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Bank of New York Mellon
New York, NY
VIPIGB-SANN-0814
1.705629.116
Fidelity® Variable Insurance Products:
Investor Freedom® Funds -
Income, 2005, 2010, 2015, 2020, 2025, 2030
Semiannual Report
June 30, 2014
(Fidelity Cover Art)
Contents
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
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. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the funds nor Fidelity Distributors Corporation is a bank.
Semiannual Report
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds 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 (January 1, 2014 to June 30, 2014).
Actual Expenses
The first line of the accompanying table for each 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 fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, each Fund, as a shareholder in underlying Fidelity Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Funds. These fees and expenses are not included in each Fund's annualized expense ratio used to calculate the expense estimates in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each fund provides information about hypothetical account values and hypothetical expenses based on a 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, each Fund, as a shareholder in underlying Fidelity Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Funds. These fees and expenses are not included in each Fund's annualized expense ratio used to calculate the expense estimates 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.
| Annualized
Expense RatioB | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
VIP Investor Freedom Income | .00% | | | |
Actual | | $ 1,000.00 | $ 1,032.60 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
VIP Investor Freedom 2005 | .00% | | | |
Actual | | $ 1,000.00 | $ 1,038.10 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
VIP Investor Freedom 2010 | .00% | | | |
Actual | | $ 1,000.00 | $ 1,041.70 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
VIP Investor Freedom 2015 | .00% | | | |
Actual | | $ 1,000.00 | $ 1,043.60 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
VIP Investor Freedom 2020 | .00% | | | |
Actual | | $ 1,000.00 | $ 1,046.10 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
VIP Investor Freedom 2025 | .00% | | | |
Actual | | $ 1,000.00 | $ 1,049.40 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
VIP Investor Freedom 2030 | .00% | | | |
Actual | | $ 1,000.00 | $ 1,050.60 | $ .00 |
HypotheticalA | | $ 1,000.00 | $ 1,024.79 | $ .00 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Funds in which each Fund invests are not included in each Fund's annualized expense ratio.
Semiannual Report
VIP Investor Freedom Income Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 2.9 | 3.0 |
VIP Equity-Income Portfolio Investor Class | 3.1 | 3.1 |
VIP Growth & Income Portfolio Investor Class | 3.5 | 3.6 |
VIP Growth Portfolio Investor Class | 3.0 | 3.2 |
VIP Mid Cap Portfolio Investor Class | 0.8 | 0.9 |
VIP Value Portfolio Investor Class | 2.3 | 2.3 |
VIP Value Strategies Portfolio Investor Class | 1.1 | 1.1 |
| 16.7 | 17.2 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 1.5 | 1.5 |
VIP Overseas Portfolio Investor Class R | 5.7 | 5.9 |
| 7.2 | 7.4 |
Bond Funds | | |
VIP High Income Portfolio Investor Class | 6.0 | 6.0 |
VIP Investment Grade Bond Portfolio Investor Class | 40.1 | 39.7 |
| 46.1 | 45.7 |
Short-Term Funds | | |
VIP Money Market Portfolio Investor Class | 30.0 | 29.7 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%.
Asset Allocation (% of fund's net assets) |
Period end |
 | Domestic Equity Funds | 16.7% | |
 | International Equity Funds | 7.2% | |
 | Bond Funds | 46.1% | |
 | Short-Term Funds | 30.0% | |
Six months ago |
| Domestic Equity Funds | 17.2% | |
| International Equity Funds | 7.4% | |
| Bond Funds | 45.7% | |
| Short-Term Funds | 29.7% | |
Semiannual Report
VIP Investor Freedom Income Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 16.7% |
| Shares | | Value |
VIP Contrafund Portfolio Investor Class (b) | 50,941 | | $ 1,859,362 |
VIP Equity-Income Portfolio Investor Class (b) | 78,303 | | 1,952,871 |
VIP Growth & Income Portfolio Investor Class (b) | 109,992 | | 2,232,830 |
VIP Growth Portfolio Investor Class (b) | 30,909 | | 1,914,223 |
VIP Mid Cap Portfolio Investor Class (b) | 14,454 | | 541,743 |
VIP Value Portfolio Investor Class (b) | 89,008 | | 1,433,925 |
VIP Value Strategies Portfolio Investor Class (b) | 45,992 | | 698,166 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $8,037,614) |
10,633,120
|
International Equity Funds - 7.2% |
| | | |
VIP Emerging Markets Portfolio Investor Class R (b) | 101,920 | | 975,372 |
VIP Overseas Portfolio InvestorClass R (b) | 175,844 | | 3,587,226 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $3,685,270) |
4,562,598
|
Bond Funds - 46.1% |
| Shares | | Value |
VIP High Income Portfolio Investor Class (b) | 628,124 | | $ 3,806,430 |
VIP Investment Grade Bond Portfolio Investor Class (b) | 1,984,048 | | 25,455,336 |
TOTAL BOND FUNDS (Cost $28,799,288) |
29,261,766
|
Short-Term Funds - 30.0% |
| | | |
VIP Money Market Portfolio Investor Class 0.01% (a)(b)
(Cost $19,047,666) | 19,047,666 | |
19,047,666
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $59,569,838) | | 63,505,150 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (5) |
NET ASSETS - 100% | $ 63,505,145 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 1,828,510 | $ 239,080 | $ 329,531 | $ - | $ 1,859,362 |
VIP Emerging Markets Portfolio Investor Class R | 923,538 | 140,509 | 150,026 | - | 975,372 |
VIP Equity-Income Portfolio Investor Class | 1,849,086 | 202,556 | 238,723 | - | 1,952,871 |
VIP Growth & Income Portfolio Investor Class | 2,150,832 | 268,002 | 324,173 | - | 2,232,830 |
VIP Growth Portfolio Investor Class | 1,906,316 | 350,372 | 512,916 | - | 1,914,223 |
VIP High Income Portfolio Investor Class | 3,595,571 | 550,395 | 514,454 | - | 3,806,430 |
VIP Investment Grade Bond Portfolio Investor Class | 23,919,858 | 2,884,151 | 2,342,058 | - | 25,455,336 |
VIP Mid Cap Portfolio Investor Class | 544,698 | 96,867 | 119,762 | - | 541,743 |
VIP Money Market Portfolio Investor Class | 17,885,497 | 2,937,252 | 1,775,081 | 907 | 19,047,666 |
VIP Overseas Portfolio Investor Class R | 3,538,221 | 507,848 | 434,422 | - | 3,587,226 |
VIP Value Portfolio Investor Class | 1,389,783 | 186,026 | 229,031 | - | 1,433,925 |
VIP Value Strategies Portfolio Investor Class | 682,371 | 86,146 | 112,199 | - | 698,166 |
Total | $ 60,214,281 | $ 8,449,204 | $ 7,082,376 | $ 907 | $ 63,505,150 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom Income Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $59,569,838) - See accompanying schedule | | $ 63,505,150 |
Receivable for fund shares sold | | 21,555 |
Total assets | | 63,526,705 |
| | |
Liabilities | | |
Payable for investments purchased | $ 21,467 | |
Payable for fund shares redeemed | 93 | |
Total liabilities | | 21,560 |
| | |
Net Assets | | $ 63,505,145 |
Net Assets consist of: | | |
Paid in capital | | $ 59,704,804 |
Undistributed net investment income | | 907 |
Accumulated undistributed net realized gain (loss) on investments | | (135,878) |
Net unrealized appreciation (depreciation) on investments | | 3,935,312 |
Net Assets, for 5,650,153 shares outstanding | | $ 63,505,145 |
Net Asset Value, offering price and redemption price per share ($63,505,145 ÷ 5,650,153 shares) | | $ 11.24 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 907 |
| | |
Expenses | | |
Independent trustees' compensation | $ 116 | |
Total expenses before reductions | 116 | |
Expense reductions | (116) | 0 |
Net investment income (loss) | | 907 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (44,361) | |
Capital gain distributions from underlying funds | 41,504 | |
Total net realized gain (loss) | | (2,857) |
Change in net unrealized appreciation (depreciation) on underlying funds | | 1,969,139 |
Net gain (loss) | | 1,966,282 |
Net increase (decrease) in net assets resulting from operations | | $ 1,967,189 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 907 | $ 872,952 |
Net realized gain (loss) | (2,857) | 606,600 |
Change in net unrealized appreciation (depreciation) | 1,969,139 | 1,200,525 |
Net increase (decrease) in net assets resulting from operations | 1,967,189 | 2,680,077 |
Distributions to shareholders from net investment income | - | (877,001) |
Distributions to shareholders from net realized gain | (465,282) | (356,491) |
Total distributions | (465,282) | (1,233,492) |
Share transactions
Proceeds from sales of shares | 7,924,219 | 29,468,306 |
Reinvestment of distributions | 465,282 | 1,233,491 |
Cost of shares redeemed | (6,600,540) | (10,479,431) |
Net increase (decrease) in net assets resulting from share transactions | 1,788,961 | 20,222,366 |
Total increase (decrease) in net assets | 3,290,868 | 21,668,951 |
| | |
Net Assets | | |
Beginning of period | 60,214,277 | 38,545,326 |
End of period (including undistributed net investment income of $907 and undistributed net investment income of $0, respectively) | $ 63,505,145 | $ 60,214,277 |
Other Information Shares | | |
Sold | 718,172 | 2,716,873 |
Issued in reinvestment of distributions | 42,453 | 113,049 |
Redeemed | (597,991) | (962,614) |
Net increase (decrease) | 162,634 | 1,867,308 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 10.97 | $ 10.65 | $ 10.30 | $ 10.40 | $ 9.95 | $ 9.10 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | -I | .19 | .17 | .18 | .21 | .40 |
Net realized and unrealized gain (loss) | .36 | .39 | .50 | (.02) | .54 | .94 |
Total from investment operations | .36 | .58 | .67 | .16 | .75 | 1.34 |
Distributions from net investment income | - | (.17) | (.16) | (.19) | (.20) | (.33) |
Distributions from net realized gain | (.09) | (.09) | (.16) | (.07) | (.10) | (.16) |
Total distributions | (.09) | (.26) | (.32) | (.26) | (.30) | (.49) |
Net asset value, end of period | $ 11.24 | $ 10.97 | $ 10.65 | $ 10.30 | $ 10.40 | $ 9.95 |
Total ReturnB, C, D | 3.26% | 5.43% | 6.54% | 1.54% | 7.50% | 14.85% |
Ratios to Average Net AssetsF, H | | | | | | |
Expenses before reductionsG | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00%A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00%A, G | 1.77% | 1.63% | 1.74% | 2.00% | 4.12% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 63,505 | $ 60,214 | $ 38,545 | $ 30,547 | $ 32,467 | $ 25,374 |
Portfolio turnover rateF | 23%A | 33% | 15% | 28% | 24% | 30% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2005 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 4.9 | 4.8 |
VIP Equity-Income Portfolio Investor Class | 5.1 | 4.9 |
VIP Growth & Income Portfolio Investor Class | 5.8 | 5.7 |
VIP Growth Portfolio Investor Class | 5.0 | 5.0 |
VIP Mid Cap Portfolio Investor Class | 1.4 | 1.5 |
VIP Value Portfolio Investor Class | 3.8 | 3.7 |
VIP Value Strategies Portfolio Investor Class | 1.9 | 1.8 |
| 27.9 | 27.4 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 2.4 | 2.4 |
VIP Overseas Portfolio Investor Class R | 9.4 | 9.4 |
| 11.8 | 11.8 |
Bond Funds | | |
VIP High Income Portfolio Investor Class | 6.2 | 6.2 |
VIP Investment Grade Bond Portfolio Investor Class | 34.1 | 34.2 |
| 40.3 | 40.4 |
Short-Term Funds | | |
VIP Money Market Portfolio Investor Class | 20.0 | 20.4 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%.
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 27.9% | |
| International Equity Funds | 11.8% | |
| Bond Funds | 40.3% | |
| Short-Term Funds | 20.0% | |
Six months ago |
| Domestic Equity Funds | 27.4% | |
| International Equity Funds | 11.8% | |
| Bond Funds | 40.4% | |
| Short-Term Funds | 20.4% | |
Semiannual Report
VIP Investor Freedom 2005 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 27.9% |
| Shares | | Value |
VIP Contrafund Portfolio Investor Class (b) | 29,122 | | $ 1,062,940 |
VIP Equity-Income Portfolio Investor Class (b) | 44,804 | | 1,117,408 |
VIP Growth & Income Portfolio Investor Class (b) | 62,772 | | 1,274,276 |
VIP Growth Portfolio Investor Class (b) | 17,551 | | 1,086,906 |
VIP Mid Cap Portfolio Investor Class (b) | 8,363 | | 313,461 |
VIP Value Portfolio Investor Class (b) | 50,962 | | 821,006 |
VIP Value Strategies Portfolio Investor Class (b) | 26,619 | | 404,079 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $4,894,188) |
6,080,076
|
International Equity Funds - 11.8% |
| | | |
VIP Emerging Markets Portfolio Investor Class R (b) | 56,038 | | 536,280 |
VIP Overseas Portfolio InvestorClass R (b) | 100,093 | | 2,041,904 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $2,388,139) |
2,578,184
|
Bond Funds - 40.3% |
| Shares | | Value |
VIP High Income Portfolio Investor Class (b) | 223,437 | | $ 1,354,031 |
VIP Investment Grade Bond Portfolio Investor Class (b) | 578,379 | | 7,420,598 |
TOTAL BOND FUNDS (Cost $8,658,138) |
8,774,629
|
Short-Term Funds - 20.0% |
| | | |
VIP Money Market Portfolio Investor Class 0.01% (a)(b)
(Cost $4,354,293) | 4,354,293 | |
4,354,293
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $20,294,758) | | 21,787,182 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (3) |
NET ASSETS - 100% | $ 21,787,179 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 911,805 | $ 141,406 | $ 57,905 | $ - | $ 1,062,940 |
VIP Emerging Markets Portfolio Investor Class R | 454,347 | 75,478 | 28,517 | - | 536,280 |
VIP Equity-Income Portfolio Investor Class | 922,167 | 179,819 | 65,857 | - | 1,117,408 |
VIP Growth & Income Portfolio Investor Class | 1,074,680 | 195,265 | 76,466 | - | 1,274,276 |
VIP Growth Portfolio Investor Class | 952,455 | 157,006 | 108,912 | - | 1,086,906 |
VIP High Income Portfolio Investor Class | 1,167,676 | 155,593 | 29,165 | - | 1,354,031 |
VIP Investment Grade Bond Portfolio Investor Class | 6,466,853 | 1,022,021 | 346,804 | - | 7,420,598 |
VIP Mid Cap Portfolio Investor Class | 277,826 | 45,274 | 21,003 | - | 313,461 |
VIP Money Market Portfolio Investor Class | 3,863,625 | 681,752 | 191,084 | 200 | 4,354,293 |
VIP Overseas Portfolio Investor Class R | 1,780,247 | 338,066 | 66,738 | - | 2,041,904 |
VIP Value Portfolio Investor Class | 693,182 | 109,301 | 31,278 | - | 821,006 |
VIP Value Strategies Portfolio Investor Class | 347,060 | 45,758 | 12,283 | - | 404,079 |
Total | $ 18,911,923 | $ 3,146,739 | $ 1,036,012 | $ 200 | $ 21,787,182 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2005 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $20,294,758) - See accompanying schedule | | $ 21,787,182 |
Receivable for investments sold | | 30,416 |
Total assets | | 21,817,598 |
| | |
Liabilities | | |
Payable to custodian bank | $ 2 | |
Payable for fund shares redeemed | 30,417 | |
Total liabilities | | 30,419 |
| | |
Net Assets | | $ 21,787,179 |
Net Assets consist of: | | |
Paid in capital | | $ 20,366,277 |
Undistributed net investment income | | 200 |
Accumulated undistributed net realized gain (loss) on investments | | (71,722) |
Net unrealized appreciation (depreciation) on investments | | 1,492,424 |
Net Assets, for 1,944,044 shares outstanding | | $ 21,787,179 |
Net Asset Value, offering price and redemption price per share ($21,787,179 ÷ 1,944,044 shares) | | $ 11.21 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 200 |
| | |
Expenses | | |
Independent trustees' compensation | $ 38 | |
Total expenses before reductions | 38 | |
Expense reductions | (38) | 0 |
Net investment income (loss) | | 200 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (17,601) | |
Capital gain distributions from underlying funds | 19,229 | |
Total net realized gain (loss) | | 1,628 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 782,136 |
Net gain (loss) | | 783,764 |
Net increase (decrease) in net assets resulting from operations | | $ 783,964 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 200 | $ 277,779 |
Net realized gain (loss) | 1,628 | 272,620 |
Change in net unrealized appreciation (depreciation) | 782,136 | 974,243 |
Net increase (decrease) in net assets resulting from operations | 783,964 | 1,524,642 |
Distributions to shareholders from net investment income | - | (280,823) |
Distributions to shareholders from net realized gain | (177,960) | (184,678) |
Total distributions | (177,960) | (465,501) |
Share transactions
Proceeds from sales of shares | 2,888,773 | 8,395,343 |
Reinvestment of distributions | 177,960 | 465,501 |
Cost of shares redeemed | (797,476) | (5,104,519) |
Net increase (decrease) in net assets resulting from share transactions | 2,269,257 | 3,756,325 |
Total increase (decrease) in net assets | 2,875,261 | 4,815,466 |
| | |
Net Assets | | |
Beginning of period | 18,911,918 | 14,096,452 |
End of period (including undistributed net investment income of $200 and undistributed net investment income of $0, respectively) | $ 21,787,179 | $ 18,911,918 |
Other Information Shares | | |
Sold | 264,629 | 788,377 |
Issued in reinvestment of distributions | 16,402 | 43,353 |
Redeemed | (72,791) | (478,541) |
Net increase (decrease) | 208,240 | 353,189 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 10.90 | $ 10.20 | $ 9.60 | $ 9.85 | $ 9.21 | $ 7.91 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | -I | .18 | .19 | .17 | .18 | .35 |
Net realized and unrealized gain (loss) | .41 | .81 | .73 | (.17) | .87 | 1.41 |
Total from investment operations | .41 | .99 | .92 | -I | 1.05 | 1.76 |
Distributions from net investment income | - | (.17) | (.16) | (.19) | (.19) | (.33) |
Distributions from net realized gain | (.10) | (.12) | (.16) | (.07) | (.22) | (.14) |
Total distributions | (.10) | (.29) | (.32) | (.25)K | (.41) | (.46)J |
Net asset value, end of period | $ 11.21 | $ 10.90 | $ 10.20 | $ 9.60 | $ 9.85 | $ 9.21 |
Total ReturnB, C, D | 3.81% | 9.73% | 9.61% | .02% | 11.41% | 22.71% |
Ratios to Average Net AssetsF,H | | | | | | |
Expenses before reductionsG | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00%A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00%A, G | 1.68% | 1.87% | 1.72% | 1.90% | 4.12% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 21,787 | $ 18,912 | $ 14,096 | $ 9,777 | $ 10,438 | $ 9,398 |
Portfolio turnover rateF | 10%A | 46% | 33% | 45% | 63% | 47% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
I Amount represents less than $.01 per share.
J Total distributions of $.46 per share is comprised of distributions from net investment income of $.325 and distributions from net realized gain of $.135 per share.
K Total distributions of $.25 per share is comprised of distributions from net investment income of $.185 and distributions from net realized gain of $.067 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2010 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 5.9 | 5.9 |
VIP Equity-Income Portfolio Investor Class | 6.3 | 6.0 |
VIP Growth & Income Portfolio Investor Class | 7.1 | 7.0 |
VIP Growth Portfolio Investor Class | 6.1 | 6.2 |
VIP Mid Cap Portfolio Investor Class | 1.7 | 1.8 |
VIP Value Portfolio Investor Class | 4.6 | 4.5 |
VIP Value Strategies Portfolio Investor Class | 2.3 | 2.2 |
| 34.0 | 33.6 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 3.1 | 2.9 |
VIP Overseas Portfolio Investor Class R | 11.5 | 11.6 |
| 14.6 | 14.5 |
Bond Funds | | |
VIP High Income Portfolio Investor Class | 6.4 | 6.3 |
VIP Investment Grade Bond Portfolio Investor Class | 30.4 | 30.4 |
| 36.8 | 36.7 |
Short-Term Funds | | |
VIP Money Market Portfolio Investor Class | 14.6 | 15.2 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%.
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 34.0% | |
| International Equity Funds | 14.6% | |
| Bond Funds | 36.8% | |
| Short-Term Funds | 14.6% | |
Six months ago |
| Domestic Equity Funds | 33.6% | |
| International Equity Funds | 14.5% | |
| Bond Funds | 36.7% | |
| Short-Term Funds | 15.2% | |
Semiannual Report
VIP Investor Freedom 2010 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 34.0% |
| Shares | | Value |
VIP Contrafund Portfolio Investor Class (b) | 100,652 | | $ 3,673,795 |
VIP Equity-Income Portfolio Investor Class (b) | 154,944 | | 3,864,292 |
VIP Growth & Income Portfolio Investor Class (b) | 217,102 | | 4,407,173 |
VIP Growth Portfolio Investor Class (b) | 60,732 | | 3,761,115 |
VIP Mid Cap Portfolio Investor Class (b) | 28,663 | | 1,074,284 |
VIP Value Portfolio Investor Class (b) | 175,952 | | 2,834,595 |
VIP Value Strategies Portfolio Investor Class (b) | 91,348 | | 1,386,669 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $16,759,222) |
21,001,923
|
International Equity Funds - 14.6% |
| | | |
VIP Emerging Markets Portfolio Investor Class R (b) | 199,348 | | 1,907,758 |
VIP Overseas Portfolio InvestorClass R (b) | 348,001 | | 7,099,227 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $8,995,306) |
9,006,985
|
Bond Funds - 36.8% |
| Shares | | Value |
VIP High Income Portfolio Investor Class (b) | 653,924 | | $ 3,962,781 |
VIP Investment Grade Bond Portfolio Investor Class (b) | 1,465,401 | | 18,801,102 |
TOTAL BOND FUNDS (Cost $22,495,072) |
22,763,883
|
Short-Term Funds - 14.6% |
| | | |
VIP Money Market Portfolio Investor Class 0.01% (a)(b)
(Cost $9,056,181) | 9,056,181 | |
9,056,181
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $57,305,781) | | 61,828,972 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | 6 |
NET ASSETS - 100% | $ 61,828,978 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 3,704,040 | $ 278,666 | $ 538,267 | $ - | $ 3,673,795 |
VIP Emerging Markets Portfolio Investor Class R | 1,829,893 | 185,996 | 215,667 | - | 1,907,758 |
VIP Equity-Income Portfolio Investor Class | 3,723,037 | 482,461 | 610,930 | - | 3,864,292 |
VIP Growth & Income Portfolio Investor Class | 4,359,163 | 476,333 | 691,251 | - | 4,407,173 |
VIP Growth Portfolio Investor Class | 3,887,719 | 334,306 | 774,953 | - | 3,761,115 |
VIP High Income Portfolio Investor Class | 3,943,378 | 376,327 | 539,714 | - | 3,962,781 |
VIP Investment Grade Bond Portfolio Investor Class | 18,992,757 | 1,612,486 | 2,559,308 | - | 18,801,102 |
VIP Mid Cap Portfolio Investor Class | 1,130,072 | 90,105 | 179,863 | - | 1,074,284 |
VIP Money Market Portfolio Investor Class | 9,536,485 | 866,232 | 1,346,535 | 439 | 9,056,181 |
VIP Overseas Portfolio Investor Class R | 7,256,024 | 780,999 | 862,728 | - | 7,099,227 |
VIP Value Portfolio Investor Class | 2,804,584 | 258,638 | 394,359 | - | 2,834,595 |
VIP Value Strategies Portfolio Investor Class | 1,404,092 | 83,744 | 177,710 | - | 1,386,669 |
Total | $ 62,571,244 | $ 5,826,293 | $ 8,891,285 | $ 439 | $ 61,828,972 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2010 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $57,305,781) - See accompanying schedule | | $ 61,828,972 |
Cash | | 6 |
Receivable for fund shares sold | | 5,413 |
Total assets | | 61,834,391 |
| | |
Liabilities | | |
Payable for investments purchased | $ 5,289 | |
Payable for fund shares redeemed | 124 | |
Total liabilities | | 5,413 |
| | |
Net Assets | | $ 61,828,978 |
Net Assets consist of: | | |
Paid in capital | | $ 57,467,492 |
Undistributed net investment income | | 439 |
Accumulated undistributed net realized gain (loss) on investments | | (162,144) |
Net unrealized appreciation (depreciation) on investments | | 4,523,191 |
Net Assets, for 5,168,902 shares outstanding | | $ 61,828,978 |
Net Asset Value, offering price and redemption price per share ($61,828,978 ÷ 5,168,902 shares) | | $ 11.96 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 439 |
| | |
Expenses | | |
Independent trustees' compensation | $ 116 | |
Total expenses before reductions | 116 | |
Expense reductions | (116) | 0 |
Net investment income (loss) | | 439 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | 49,570 | |
Capital gain distributions from underlying funds | 70,845 | |
Total net realized gain (loss) | | 120,415 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 2,273,146 |
Net gain (loss) | | 2,393,561 |
Net increase (decrease) in net assets resulting from operations | | $ 2,394,000 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 439 | $ 1,037,057 |
Net realized gain (loss) | 120,415 | 1,195,499 |
Change in net unrealized appreciation (depreciation) | 2,273,146 | 5,236,706 |
Net increase (decrease) in net assets resulting from operations | 2,394,000 | 7,469,262 |
Distributions to shareholders from net investment income | - | (1,045,621) |
Distributions to shareholders from net realized gain | (805,664) | (733,067) |
Total distributions | (805,664) | (1,778,688) |
Share transactions
Proceeds from sales of shares | 4,635,093 | 9,159,310 |
Reinvestment of distributions | 805,664 | 1,778,688 |
Cost of shares redeemed | (7,771,368) | (8,716,419) |
Net increase (decrease) in net assets resulting from share transactions | (2,330,611) | 2,221,579 |
Total increase (decrease) in net assets | (742,275) | 7,912,153 |
| | |
Net Assets | | |
Beginning of period | 62,571,253 | 54,659,100 |
End of period (including undistributed net investment income of $439 and undistributed net investment income of $0, respectively) | $ 61,828,978 | $ 62,571,253 |
Other Information Shares | | |
Sold | 397,301 | 821,710 |
Issued in reinvestment of distributions | 69,815 | 156,010 |
Redeemed | (671,702) | (773,835) |
Net increase (decrease) | (204,586) | 203,885 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.64 | $ 10.57 | $ 9.77 | $ 10.06 | $ 9.14 | $ 7.77 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | -I | .20 | .20 | .21 | .21 | .35 |
Net realized and unrealized gain (loss) | .48 | 1.21 | .95 | (.24) | .97 | 1.49 |
Total from investment operations | .48 | 1.41 | 1.15 | (.03) | 1.18 | 1.84 |
Distributions from net investment income | - | (.20) | (.20) | (.21) | (.21) | (.35) |
Distributions from net realized gain | (.16) | (.14) | (.15) | (.04) | (.05) | (.12) |
Total distributions | (.16) | (.34) | (.35) | (.26)J | (.26) | (.47) |
Net asset value, end of period | $ 11.96 | $ 11.64 | $ 10.57 | $ 9.77 | $ 10.06 | $ 9.14 |
Total ReturnB, C, D | 4.17% | 13.41% | 11.82% | (.35)% | 12.88% | 24.09% |
Ratios to Average Net AssetsF, H | | | | | | |
Expenses before reductionsG | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00%A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00%A, G | 1.76% | 1.88% | 2.02% | 2.20% | 4.18% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 61,829 | $ 62,571 | $ 54,659 | $ 51,167 | $ 54,591 | $ 47,671 |
Portfolio turnover rateF | 19%A | 23% | 21% | 24% | 31% | 28% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
I Amount represents less than $.01 per share.
J Total distributions of $.26 per share is comprised of distributions from net investment income of $.214 and distributions from net realized gain of $.041 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2015 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 6.9 | 7.0 |
VIP Equity-Income Portfolio Investor Class | 7.3 | 7.1 |
VIP Growth & Income Portfolio Investor Class | 8.3 | 8.3 |
VIP Growth Portfolio Investor Class | 7.1 | 7.3 |
VIP Mid Cap Portfolio Investor Class | 2.0 | 2.1 |
VIP Value Portfolio Investor Class | 5.3 | 5.3 |
VIP Value Strategies Portfolio Investor Class | 2.6 | 2.6 |
| 39.5 | 39.7 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 3.5 | 3.5 |
VIP Overseas Portfolio Investor Class R | 13.3 | 13.6 |
| 16.8 | 17.1 |
Bond Funds | | |
VIP High Income Portfolio Investor Class | 6.5 | 6.5 |
VIP Investment Grade Bond Portfolio Investor Class | 27.1 | 26.6 |
| 33.6 | 33.1 |
Short-Term Funds | | |
VIP Money Market Portfolio Investor Class | 10.1 | 10.1 |
| | |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%.
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 39.5% | |
| International Equity Funds | 16.8% | |
| Bond Funds | 33.6% | |
| Short-Term Funds | 10.1% | |
Six months ago |
| Domestic Equity Funds | 39.7% | |
| International Equity Funds | 17.1% | |
| Bond Funds | 33.1% | |
| Short-Term Funds | 10.1% | |
Semiannual Report
VIP Investor Freedom 2015 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 39.5% |
| Shares | | Value |
VIP Contrafund Portfolio Investor Class (b) | 191,360 | | $ 6,984,634 |
VIP Equity-Income Portfolio Investor Class (b) | 294,277 | | 7,339,276 |
VIP Growth & Income Portfolio Investor Class (b) | 412,448 | | 8,372,688 |
VIP Growth Portfolio Investor Class (b) | 115,942 | | 7,180,284 |
VIP Mid Cap Portfolio Investor Class (b) | 55,023 | | 2,062,271 |
VIP Value Portfolio Investor Class (b) | 335,071 | | 5,397,992 |
VIP Value Strategies Portfolio Investor Class (b) | 174,810 | | 2,653,617 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $31,030,971) |
39,990,762
|
International Equity Funds - 16.8% |
| | | |
VIP Emerging Markets Portfolio Investor Class R (b) | 368,770 | | 3,529,131 |
VIP Overseas Portfolio InvestorClass R (b) | 659,502 | | 13,453,851 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $15,810,469) |
16,982,982
|
Bond Funds - 33.6% |
| Shares | | Value |
VIP High Income Portfolio Investor Class (b) | 1,084,973 | | $ 6,574,936 |
VIP Investment Grade Bond Portfolio Investor Class (b) | 2,143,903 | | 27,506,274 |
TOTAL BOND FUNDS (Cost $33,716,817) |
34,081,210
|
Short-Term Funds - 10.1% |
| | | |
VIP Money Market Portfolio Investor Class 0.01% (a)(b)
(Cost $10,201,962) | 10,201,962 | |
10,201,962
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $90,760,219) | | 101,256,916 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (3) |
NET ASSETS - 100% | $ 101,256,913 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 6,800,272 | $ 394,403 | $ 658,448 | $ - | $ 6,984,634 |
VIP Emerging Markets Portfolio Investor Class R | 3,387,514 | 185,652 | 265,474 | - | 3,529,131 |
VIP Equity-Income Portfolio Investor Class | 6,869,108 | 474,163 | 519,496 | - | 7,339,276 |
VIP Growth & Income Portfolio Investor Class | 8,019,368 | 468,291 | 621,816 | - | 8,372,688 |
VIP Growth Portfolio Investor Class | 7,109,253 | 592,374 | 1,136,858 | - | 7,180,284 |
VIP High Income Portfolio Investor Class | 6,244,518 | 446,063 | 417,785 | - | 6,574,936 |
VIP Investment Grade Bond Portfolio Investor Class | 25,881,469 | 2,692,248 | 2,140,609 | - | 27,506,274 |
VIP Mid Cap Portfolio Investor Class | 2,054,489 | 146,803 | 209,910 | - | 2,062,271 |
VIP Money Market Portfolio Investor Class | 9,862,291 | 921,052 | 581,381 | 489 | 10,201,962 |
VIP Overseas Portfolio Investor Class R | 13,270,508 | 1,090,415 | 800,871 | - | 13,453,851 |
VIP Value Portfolio Investor Class | 5,157,500 | 337,928 | 419,292 | - | 5,397,992 |
VIP Value Strategies Portfolio Investor Class | 2,564,781 | 130,045 | 195,809 | - | 2,653,617 |
Total | $ 97,221,071 | $ 7,879,437 | $ 7,967,749 | $ 489 | $ 101,256,916 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2015 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $90,760,219) - See accompanying schedule | | $ 101,256,916 |
Receivable for fund shares sold | | 67,934 |
Total assets | | 101,324,850 |
| | |
Liabilities | | |
Payable to custodian bank | $ 2 | |
Payable for investments purchased | 67,851 | |
Payable for fund shares redeemed | 84 | |
Total liabilities | | 67,937 |
| | |
Net Assets | | $ 101,256,913 |
Net Assets consist of: | | |
Paid in capital | | $ 91,041,037 |
Undistributed net investment income | | 489 |
Accumulated undistributed net realized gain (loss) on investments | | (281,310) |
Net unrealized appreciation (depreciation) on investments | | 10,496,697 |
Net Assets, for 8,550,644 shares outstanding | | $ 101,256,913 |
Net Asset Value, offering price and redemption price per share ($101,256,913 ÷ 8,550,644 shares) | | $ 11.84 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 489 |
| | |
Expenses | | |
Independent trustees' compensation | $ 187 | |
Total expenses before reductions | 187 | |
Expense reductions | (187) | 0 |
Net investment income (loss) | | 489 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (11,595) | |
Capital gain distributions from underlying funds | 132,557 | |
Total net realized gain (loss) | | 120,962 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 4,137,061 |
Net gain (loss) | | 4,258,023 |
Net increase (decrease) in net assets resulting from operations | | $ 4,258,512 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 489 | $ 1,638,146 |
Net realized gain (loss) | 120,962 | 1,571,719 |
Change in net unrealized appreciation (depreciation) | 4,137,061 | 8,665,051 |
Net increase (decrease) in net assets resulting from operations | 4,258,512 | 11,874,916 |
Distributions to shareholders from net investment income | - | (1,649,772) |
Distributions to shareholders from net realized gain | (1,136,856) | (1,082,834) |
Total distributions | (1,136,856) | (2,732,606) |
Share transactions
Proceeds from sales of shares | 7,054,989 | 17,144,035 |
Reinvestment of distributions | 1,136,856 | 2,732,606 |
Cost of shares redeemed | (7,277,653) | (10,799,550) |
Net increase (decrease) in net assets resulting from share transactions | 914,192 | 9,077,091 |
Total increase (decrease) in net assets | 4,035,848 | 18,219,401 |
| | |
Net Assets | | |
Beginning of period | 97,221,065 | 79,001,664 |
End of period (including undistributed net investment income of $489 and undistributed net investment income of $0, respectively) | $ 101,256,913 | $ 97,221,065 |
Other Information Shares | | |
Sold | 614,909 | 1,564,617 |
Issued in reinvestment of distributions | 99,900 | 243,678 |
Redeemed | (634,260) | (981,805) |
Net increase (decrease) | 80,549 | 826,490 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.48 | $ 10.34 | $ 9.55 | $ 9.87 | $ 9.11 | $ 7.69 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | -I | .20 | .21 | .21 | .21 | .34 |
Net realized and unrealized gain (loss) | .50 | 1.27 | .94 | (.24) | .97 | 1.58 |
Total from investment operations | .50 | 1.47 | 1.15 | (.03) | 1.18 | 1.92 |
Distributions from net investment income | - | (.20) | (.20) | (.21) | (.22) | (.34) |
Distributions from net realized gain | (.14) | (.13) | (.16) | (.08) | (.20) | (.16) |
Total distributions | (.14) | (.33) | (.36) | (.29) | (.42) | (.50) |
Net asset value, end of period | $ 11.84 | $ 11.48 | $ 10.34 | $ 9.55 | $ 9.87 | $ 9.11 |
Total ReturnB, C, D | 4.36% | 14.35% | 12.10% | (.33)% | 13.06% | 25.25% |
Ratios to Average Net AssetsF, H | | | | | | |
Expenses before reductionsG | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00%A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00%A, G | 1.86% | 2.02% | 2.07% | 2.24% | 4.08% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 101,257 | $ 97,221 | $ 79,002 | $ 67,804 | $ 69,259 | $ 60,033 |
Portfolio turnover rateF | 16%A | 21% | 18% | 30% | 31% | 22% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2020 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 7.6 | 7.8 |
VIP Equity-Income Portfolio Investor Class | 8.0 | 7.9 |
VIP Growth & Income Portfolio Investor Class | 9.1 | 9.2 |
VIP Growth Portfolio Investor Class | 7.8 | 8.1 |
VIP Mid Cap Portfolio Investor Class | 2.2 | 2.3 |
VIP Value Portfolio Investor Class | 5.8 | 5.9 |
VIP Value Strategies Portfolio Investor Class | 2.8 | 2.9 |
| 43.3 | 44.1 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 4.0 | 3.8 |
VIP Overseas Portfolio Investor Class R | 14.6 | 15.2 |
| 18.6 | 19.0 |
Bond Funds | | |
VIP High Income Portfolio Investor Class | 6.7 | 6.5 |
VIP Investment Grade Bond Portfolio Investor Class | 24.7 | 24.0 |
| 31.4 | 30.5 |
Short-Term Funds | | |
VIP Money Market Portfolio Investor Class | 6.7 | 6.4 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%.
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 43.3% | |
| International Equity Funds | 18.6% | |
| Bond Funds | 31.4% | |
| Short-Term Funds | 6.7% | |
Six months ago |
| Domestic Equity Funds | 44.1% | |
| International Equity Funds | 19.0% | |
| Bond Funds | 30.5% | |
| Short-Term Funds | 6.4% | |
Semiannual Report
VIP Investor Freedom 2020 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 43.3% |
| Shares | | Value |
VIP Contrafund Portfolio Investor Class (b) | 380,893 | | $ 13,902,598 |
VIP Equity-Income Portfolio Investor Class (b) | 586,161 | | 14,618,863 |
VIP Growth & Income Portfolio Investor Class (b) | 822,374 | | 16,694,195 |
VIP Growth Portfolio Investor Class (b) | 231,217 | | 14,319,243 |
VIP Mid Cap Portfolio Investor Class (b) | 108,129 | | 4,052,660 |
VIP Value Portfolio Investor Class (b) | 665,789 | | 10,725,865 |
VIP Value Strategies Portfolio Investor Class (b) | 345,595 | | 5,246,137 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $62,735,852) |
79,559,561
|
International Equity Funds - 18.6% |
| | | |
VIP Emerging Markets Portfolio Investor Class R (b) | 760,752 | | 7,280,393 |
VIP Overseas Portfolio InvestorClass R (b) | 1,317,735 | | 26,881,798 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $31,745,773) |
34,162,191
|
Bond Funds - 31.4% |
| Shares | | Value |
VIP High Income Portfolio Investor Class (b) | 2,024,430 | | $ 12,268,044 |
VIP Investment Grade Bond Portfolio Investor Class (b) | 3,531,416 | | 45,308,069 |
TOTAL BOND FUNDS (Cost $57,231,741) |
57,576,113
|
Short-Term Funds - 6.7% |
| | | |
VIP Money Market Portfolio Investor Class 0.01% (a)(b)
(Cost $12,359,873) | 12,359,873 | |
12,359,873
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $164,073,239) | | 183,657,738 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (4) |
NET ASSETS - 100% | $ 183,657,734 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 12,511,725 | $ 1,022,457 | $ 503,033 | $ - | $ 13,902,598 |
VIP Emerging Markets Portfolio Investor Class R | 6,193,977 | 769,837 | 125,878 | - | 7,280,393 |
VIP Equity-Income Portfolio Investor Class | 12,660,933 | 1,109,998 | 159,629 | - | 14,618,863 |
VIP Growth & Income Portfolio Investor Class | 14,767,731 | 1,213,149 | 279,711 | - | 16,694,195 |
VIP Growth Portfolio Investor Class | 13,066,290 | 1,440,454 | 1,369,081 | - | 14,319,243 |
VIP High Income Portfolio Investor Class | 10,519,736 | 1,483,917 | 267,645 | - | 12,268,044 |
VIP Investment Grade Bond Portfolio Investor Class | 38,622,409 | 6,082,348 | 1,077,838 | - | 45,308,069 |
VIP Mid Cap Portfolio Investor Class | 3,780,589 | 392,783 | 262,210 | - | 4,052,660 |
VIP Money Market Portfolio Investor Class | 10,350,270 | 2,153,942 | 144,340 | 550 | 12,359,873 |
VIP Overseas Portfolio Investor Class R | 24,402,297 | 3,001,756 | 343,679 | - | 26,881,798 |
VIP Value Portfolio Investor Class | 9,491,884 | 896,432 | 287,409 | - | 10,725,865 |
VIP Value Strategies Portfolio Investor Class | 4,724,784 | 369,644 | 149,335 | - | 5,246,137 |
Total | $ 161,092,625 | $ 19,936,717 | $ 4,969,788 | $ 550 | $ 183,657,738 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2020 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $164,073,239) - See accompanying schedule | | $ 183,657,738 |
Cash | | 1 |
Receivable for fund shares sold | | 59,118 |
Total assets | | 183,716,857 |
| | |
Liabilities | | |
Payable for investments purchased | $ 58,787 | |
Payable for fund shares redeemed | 336 | |
Total liabilities | | 59,123 |
| | |
Net Assets | | $ 183,657,734 |
Net Assets consist of: | | |
Paid in capital | | $ 164,507,378 |
Undistributed net investment income | | 550 |
Accumulated undistributed net realized gain (loss) on investments | | (434,693) |
Net unrealized appreciation (depreciation) on investments | | 19,584,499 |
Net Assets, for 15,488,744 shares outstanding | | $ 183,657,734 |
Net Asset Value, offering price and redemption price per share ($183,657,734 ÷ 15,488,744 shares) | | $ 11.86 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 550 |
| | |
Expenses | | |
Independent trustees' compensation | $ 319 | |
Total expenses before reductions | 319 | |
Expense reductions | (319) | 0 |
Net investment income (loss) | | 550 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (33,224) | |
Capital gain distributions from underlying funds | 246,482 | |
Total net realized gain (loss) | | 213,258 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 7,638,699 |
Net gain (loss) | | 7,851,957 |
Net increase (decrease) in net assets resulting from operations | | $ 7,852,507 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 550 | $ 2,669,751 |
Net realized gain (loss) | 213,258 | 2,788,106 |
Change in net unrealized appreciation (depreciation) | 7,638,699 | 15,648,706 |
Net increase (decrease) in net assets resulting from operations | 7,852,507 | 21,106,563 |
Distributions to shareholders from net investment income | - | (2,693,134) |
Distributions to shareholders from net realized gain | (1,919,973) | (1,934,772) |
Total distributions | (1,919,973) | (4,627,906) |
Share transactions
Proceeds from sales of shares | 18,293,736 | 31,278,689 |
Reinvestment of distributions | 1,919,973 | 4,627,906 |
Cost of shares redeemed | (3,581,133) | (15,018,940) |
Net increase (decrease) in net assets resulting from share transactions | 16,632,576 | 20,887,655 |
Total increase (decrease) in net assets | 22,565,110 | 37,366,312 |
| | |
Net Assets | | |
Beginning of period | 161,092,624 | 123,726,312 |
End of period (including undistributed net investment income of $550 and undistributed net investment income of $0, respectively) | $ 183,657,734 | $ 161,092,624 |
Other Information Shares | | |
Sold | 1,587,732 | 2,878,040 |
Issued in reinvestment of distributions | 168,863 | 414,433 |
Redeemed | (313,427) | (1,376,924) |
Net increase (decrease) | 1,443,168 | 1,915,549 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.47 | $ 10.20 | $ 9.31 | $ 9.68 | $ 8.77 | $ 7.12 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | -J | .20 | .21 | .21 | .21 | .30 |
Net realized and unrealized gain (loss) | .52 | 1.42 | 1.02 | (.32) | 1.05 | 1.72 |
Total from investment operations | .52 | 1.62 | 1.23 | (.11) | 1.26 | 2.02 |
Distributions from net investment income | - | (.20) | (.21) | (.21) | (.20) | (.28) |
Distributions from net realized gain | (.13) | (.15) | (.14) | (.05) | (.15) | (.09) |
Total distributions | (.13) | (.35) | (.34)I | (.26) | (.35) | (.37) |
Net asset value, end of period | $ 11.86 | $ 11.47 | $ 10.20 | $ 9.31 | $ 9.68 | $ 8.77 |
Total ReturnB, C, D | 4.61% | 15.96% | 13.30% | (1.11)% | 14.46% | 28.75% |
Ratios to Average Net AssetsF, H | | | | | | |
Expenses before reductionsG | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00%A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00%A, G | 1.87% | 2.13% | 2.20% | 2.28% | 3.82% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 183,658 | $ 161,093 | $ 123,726 | $ 102,875 | $ 96,543 | $ 80,478 |
Portfolio turnover rateF | 6%A | 22% | 18% | 16% | 31% | 20% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
I Total distribution of $.34 per share is compromised of distributions from net investment income of $.205 and distributions from net realized gain of $.137 per share.
J Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2025 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 8.8 | 9.2 |
VIP Equity-Income Portfolio Investor Class | 9.2 | 9.3 |
VIP Growth & Income Portfolio Investor Class | 10.5 | 10.8 |
VIP Growth Portfolio Investor Class | 9.1 | 9.6 |
VIP Mid Cap Portfolio Investor Class | 2.6 | 2.8 |
VIP Value Portfolio Investor Class | 6.8 | 7.0 |
VIP Value Strategies Portfolio Investor Class | 3.3 | 3.4 |
| 50.3 | 52.1 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 4.6 | 4.6 |
VIP Overseas Portfolio Investor Class R | 16.9 | 17.9 |
| 21.5 | 22.5 |
Bond Funds | | |
VIP High Income Portfolio Investor Class | 6.8 | 6.6 |
VIP Investment Grade Bond Portfolio Investor Class | 20.4 | 18.8 |
| 27.2 | 25.4 |
Short-Term Funds | | |
VIP Money Market Portfolio Investor Class | 1.0 | 0.0 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%.
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 50.3% | |
| International Equity Funds | 21.5% | |
| Bond Funds | 27.2% | |
| Short-Term Funds | 1.0% | |
Six months ago |
| Domestic Equity Funds | 52.1% | |
| International Equity Funds | 22.5% | |
| Bond Funds | 25.4% | |
| Short-Term Funds | 0.0% | |
Semiannual Report
VIP Investor Freedom 2025 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 50.3% |
| Shares | | Value |
VIP Contrafund Portfolio Investor Class (b) | 323,956 | | $ 11,824,376 |
VIP Equity-Income Portfolio Investor Class (b) | 497,304 | | 12,402,771 |
VIP Growth & Income Portfolio Investor Class (b) | 695,558 | | 14,119,837 |
VIP Growth Portfolio Investor Class (b) | 197,411 | | 12,225,658 |
VIP Mid Cap Portfolio Investor Class (b) | 92,493 | | 3,466,626 |
VIP Value Portfolio Investor Class (b) | 562,319 | | 9,058,952 |
VIP Value Strategies Portfolio Investor Class (b) | 293,704 | | 4,458,425 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $50,592,629) |
67,556,645
|
International Equity Funds - 21.5% |
| | | |
VIP Emerging Markets Portfolio Investor Class R (b) | 637,622 | | 6,102,045 |
VIP Overseas Portfolio InvestorClass R (b) | 1,112,828 | | 22,701,695 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $25,384,221) |
28,803,740
|
Bond Funds - 27.2% |
| Shares | | Value |
VIP High Income Portfolio Investor Class (b) | 1,505,582 | | $ 9,123,826 |
VIP Investment Grade Bond Portfolio Investor Class (b) | 2,136,841 | | 27,415,674 |
TOTAL BOND FUNDS (Cost $36,252,754) |
36,539,500
|
Short-Term Funds - 1.0% |
| | | |
VIP Money Market Portfolio Investor Class 0.01% (a)(b)
(Cost $1,401,496) | 1,401,496 | |
1,401,496
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $113,631,100) | | 134,301,381 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (1) |
NET ASSETS - 100% | $ 134,301,380 |
Legend |
(a) The rate quoted is the annualized seven-day yield of the fund at period end. |
(b) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 10,516,884 | $ 1,319,059 | $ 761,246 | $ - | $ 11,824,376 |
VIP Emerging Markets Portfolio Investor Class R | 5,230,757 | 759,247 | 273,939 | - | 6,102,045 |
VIP Equity-Income Portfolio Investor Class | 10,643,828 | 1,573,138 | 698,705 | - | 12,402,771 |
VIP Growth & Income Portfolio Investor Class | 12,419,336 | 1,618,164 | 788,904 | - | 14,119,837 |
VIP Growth Portfolio Investor Class | 10,975,652 | 1,740,720 | 1,479,149 | - | 12,225,658 |
VIP High Income Portfolio Investor Class | 7,602,691 | 1,339,109 | 211,506 | - | 9,123,826 |
VIP Investment Grade Bond Portfolio Investor Class | 21,475,869 | 5,795,073 | 827,215 | - | 27,415,674 |
VIP Mid Cap Portfolio Investor Class | 3,157,396 | 478,441 | 297,211 | - | 3,466,626 |
VIP Money Market Portfolio Investor Class | 5 | 1,409,741 | 8,249 | 32 | 1,401,496 |
VIP Overseas Portfolio Investor Class R | 20,461,266 | 2,899,709 | 545,770 | - | 22,701,695 |
VIP Value Portfolio Investor Class | 7,973,371 | 1,038,156 | 495,139 | - | 9,058,952 |
VIP Value Strategies Portfolio Investor Class | 3,949,942 | 468,021 | 221,736 | - | 4,458,425 |
Total | $ 114,406,997 | $ 20,438,578 | $ 6,608,769 | $ 32 | $ 134,301,381 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2025 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $113,631,100) - See accompanying schedule | | $ 134,301,381 |
Cash | | 1 |
Receivable for fund shares sold | | 171,094 |
Total assets | | 134,472,476 |
| | |
Liabilities | | |
Payable for investments purchased | $ 170,911 | |
Payable for fund shares redeemed | 185 | |
Total liabilities | | 171,096 |
| | |
Net Assets | | $ 134,301,380 |
Net Assets consist of: | | |
Paid in capital | | $ 113,892,145 |
Undistributed net investment income | | 32 |
Accumulated undistributed net realized gain (loss) on investments | | (261,078) |
Net unrealized appreciation (depreciation) on investments | | 20,670,281 |
Net Assets, for 10,648,747 shares outstanding | | $ 134,301,380 |
Net Asset Value, offering price and redemption price per share ($134,301,380 ÷ 10,648,747 shares) | | $ 12.61 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ 32 |
| | |
Expenses | | |
Independent trustees' compensation | $ 229 | |
Total expenses before reductions | 229 | |
Expense reductions | (229) | 0 |
Net investment income (loss) | | 32 |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (55,876) | |
Capital gain distributions from underlying funds | 206,473 | |
Total net realized gain (loss) | | 150,597 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 6,124,649 |
Net gain (loss) | | 6,275,246 |
Net increase (decrease) in net assets resulting from operations | | $ 6,275,278 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 32 | $ 1,936,761 |
Net realized gain (loss) | 150,597 | 1,994,053 |
Change in net unrealized appreciation (depreciation) | 6,124,649 | 12,823,189 |
Net increase (decrease) in net assets resulting from operations | 6,275,278 | 16,754,003 |
Distributions to shareholders from net investment income | - | (1,950,892) |
Distributions to shareholders from net realized gain | (1,409,723) | (1,204,571) |
Total distributions | (1,409,723) | (3,155,463) |
Share transactions
Proceeds from sales of shares | 17,438,313 | 30,370,562 |
Reinvestment of distributions | 1,409,723 | 3,155,463 |
Cost of shares redeemed | (3,819,209) | (5,104,660) |
Net increase (decrease) in net assets resulting from share transactions | 15,028,827 | 28,421,365 |
Total increase (decrease) in net assets | 19,894,382 | 42,019,905 |
| | |
Net Assets | | |
Beginning of period | 114,406,998 | 72,387,093 |
End of period (including undistributed net investment income of $32 and undistributed net investment income of $0, respectively) | $ 134,301,380 | $ 114,406,998 |
Other Information Shares | | |
Sold | 1,442,063 | 2,662,862 |
Issued in reinvestment of distributions | 117,184 | 266,775 |
Redeemed | (317,316) | (447,523) |
Net increase (decrease) | 1,241,931 | 2,482,114 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 12.16 | $ 10.45 | $ 9.36 | $ 9.83 | $ 8.73 | $ 7.04 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | -I | .24 | .24 | .22 | .21 | .28 |
Net realized and unrealized gain (loss) | .59 | 1.83 | 1.16 | (.44) | 1.17 | 1.79 |
Total from investment operations | .59 | 2.07 | 1.40 | (.22) | 1.38 | 2.07 |
Distributions from net investment income | - | (.21) | (.21) | (.21) | (.20) | (.25) |
Distributions from net realized gain | (.14) | (.15) | (.10) | (.04) | (.08) | (.13) |
Total distributions | (.14) | (.36) | (.31) | (.25) | (.28) | (.38) |
Net asset value, end of period | $ 12.61 | $ 12.16 | $ 10.45 | $ 9.36 | $ 9.83 | $ 8.73 |
Total ReturnB, C, D | 4.94% | 19.95% | 15.05% | (2.28)% | 15.80% | 29.95% |
Ratios to Average Net AssetsF, H | | | | | | |
Expenses before reductionsG | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00%A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00%A, G | 2.09% | 2.33% | 2.26% | 2.28% | 3.65% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 134,301 | $ 114,407 | $ 72,387 | $ 52,278 | $ 44,530 | $ 32,981 |
Portfolio turnover rateF | 11%A | 15% | 13% | 15% | 29% | 18% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
I Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2030 Portfolio
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
VIP Contrafund Portfolio Investor Class | 10.4 | 10.8 |
VIP Equity-Income Portfolio Investor Class | 10.9 | 11.0 |
VIP Growth & Income Portfolio Investor Class | 12.4 | 12.8 |
VIP Growth Portfolio Investor Class | 10.7 | 11.3 |
VIP Mid Cap Portfolio Investor Class | 3.0 | 3.2 |
VIP Value Portfolio Investor Class | 7.9 | 8.2 |
VIP Value Strategies Portfolio Investor Class | 3.9 | 4.1 |
| 59.2 | 61.4 |
International Equity Funds | | |
VIP Emerging Markets Portfolio Investor Class R | 5.5 | 5.4 |
VIP Overseas Portfolio Investor Class R | 20.0 | 21.0 |
| 25.5 | 26.4 |
Bond Funds | | |
VIP High Income Portfolio Investor Class | 6.9 | 6.8 |
VIP Investment Grade Bond Portfolio Investor Class | 8.4 | 5.4 |
| 15.3 | 12.2 |
Net Other Assets (Liabilities)* | 0.0 | 0.0 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%.
Asset Allocation (% of fund's net assets) |
Period end |
| Domestic Equity Funds | 59.2% | |
 | International Equity Funds | 25.5% | |
| Bond Funds | 15.3% | |
Six months ago |
| Domestic Equity Funds | 61.4% | |
| International Equity Funds | 26.4% | |
| Bond Funds | 12.2% | |
Semiannual Report
VIP Investor Freedom 2030 Portfolio
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Domestic Equity Funds - 59.2% |
| Shares | | Value |
VIP Contrafund Portfolio Investor Class (a) | 365,127 | | $ 13,327,136 |
VIP Equity-Income Portfolio Investor Class (a) | 561,005 | | 13,991,455 |
VIP Growth & Income Portfolio Investor Class (a) | 785,870 | | 15,953,159 |
VIP Growth Portfolio Investor Class (a) | 222,006 | | 13,748,846 |
VIP Mid Cap Portfolio Investor Class (a) | 103,611 | | 3,883,344 |
VIP Value Portfolio Investor Class (a) | 635,592 | | 10,239,385 |
VIP Value Strategies Portfolio Investor Class (a) | 330,473 | | 5,016,576 |
TOTAL DOMESTIC EQUITY FUNDS (Cost $60,641,650) |
76,159,901
|
International Equity Funds - 25.5% |
| | | |
VIP Emerging Markets Portfolio Investor Class R (a) | 730,304 | | 6,989,007 |
VIP Overseas Portfolio InvestorClass R (a) | 1,261,680 | | 25,738,282 |
TOTAL INTERNATIONAL EQUITY FUNDS (Cost $29,847,707) |
32,727,289
|
Bond Funds - 15.3% |
| Shares | | Value |
VIP High Income Portfolio Investor Class (a) | 1,470,145 | | $ 8,909,081 |
VIP Investment Grade Bond Portfolio Investor Class (a) | 836,415 | | 10,731,198 |
TOTAL BOND FUNDS (Cost $19,497,095) |
19,640,279
|
TOTAL INVESTMENT PORTFOLIO - 100.0% (Cost $109,986,452) | | 128,527,469 |
NET OTHER ASSETS (LIABILITIES) - 0.0% | | (2) |
NET ASSETS - 100% | $ 128,527,467 |
Legend |
(a) Affiliated Fund |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
VIP Contrafund Portfolio Investor Class | $ 12,030,459 | $ 1,111,559 | $ 647,889 | $ - | $ 13,327,136 |
VIP Emerging Markets Portfolio Investor Class R | 5,978,050 | 894,420 | 315,042 | - | 6,989,007 |
VIP Equity-Income Portfolio Investor Class | 12,205,231 | 1,368,168 | 567,665 | - | 13,991,455 |
VIP Growth & Income Portfolio Investor Class | 14,215,080 | 1,370,827 | 595,154 | - | 15,953,159 |
VIP Growth Portfolio Investor Class | 12,535,331 | 1,528,492 | 1,423,235 | - | 13,748,846 |
VIP High Income Portfolio Investor Class | 7,508,823 | 1,180,212 | 166,315 | - | 8,909,081 |
VIP Investment Grade Bond Portfolio Investor Class | 6,049,929 | 4,778,576 | 435,491 | - | 10,731,198 |
VIP Mid Cap Portfolio Investor Class | 3,592,490 | 429,052 | 272,536 | - | 3,883,344 |
VIP Overseas Portfolio Investor Class R | 23,409,916 | 2,740,775 | 250,417 | - | 25,738,282 |
VIP Value Portfolio Investor Class | 9,125,369 | 993,187 | 485,225 | - | 10,239,385 |
VIP Value Strategies Portfolio Investor Class | 4,506,694 | 405,799 | 188,495 | - | 5,016,576 |
Total | $ 111,157,372 | $ 16,801,067 | $ 5,347,464 | $ - | $ 128,527,469 |
Other Information |
All investments are categorized as Level 1 under the Fair Value Hierarchy. 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, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
VIP Investor Freedom 2030 Portfolio
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $109,986,452) - See accompanying schedule | | $ 128,527,469 |
Receivable for investments sold | | 10,391 |
Receivable for fund shares sold | | 36,963 |
Total assets | | 128,574,823 |
| | |
Liabilities | | |
Payable to custodian bank | $ 2 | |
Payable for fund shares redeemed | 47,354 | |
Total liabilities | | 47,356 |
| | |
Net Assets | | $ 128,527,467 |
Net Assets consist of: | | |
Paid in capital | | $ 110,220,075 |
Accumulated undistributed net realized gain (loss) on investments | | (233,625) |
Net unrealized appreciation (depreciation) on investments | | 18,541,017 |
Net Assets, for 10,484,114 shares outstanding | | $ 128,527,467 |
Net Asset Value, offering price and redemption price per share ($128,527,467 ÷ 10,484,114 shares) | | $ 12.26 |
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Income distributions from underlying funds | | $ - |
| | |
Expenses | | |
Independent trustees' compensation | $ 222 | |
Total expenses before reductions | 222 | |
Expense reductions | (222) | 0 |
Net investment income (loss) | | - |
Realized and Unrealized Gain (Loss) Realized gain (loss) on sale of underlying fund shares | (60,684) | |
Capital gain distributions from underlying funds | 228,580 | |
Total net realized gain (loss) | | 167,896 |
Change in net unrealized appreciation (depreciation) on underlying funds | | 5,978,142 |
Net gain (loss) | | 6,146,038 |
Net increase (decrease) in net assets resulting from operations | | $ 6,146,038 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ - | $ 1,709,521 |
Net realized gain (loss) | 167,896 | 2,038,180 |
Change in net unrealized appreciation (depreciation) | 5,978,142 | 13,671,862 |
Net increase (decrease) in net assets resulting from operations | 6,146,038 | 17,419,563 |
Distributions to shareholders from net investment income | - | (1,740,415) |
Distributions to shareholders from net realized gain | (1,370,495) | (1,263,165) |
Total distributions | (1,370,495) | (3,003,580) |
Share transactions
Proceeds from sales of shares | 13,733,382 | 32,221,718 |
Reinvestment of distributions | 1,370,495 | 3,003,580 |
Cost of shares redeemed | (2,509,313) | (6,094,311) |
Net increase (decrease) in net assets resulting from share transactions | 12,594,564 | 29,130,987 |
Total increase (decrease) in net assets | 17,370,107 | 43,546,970 |
| | |
Net Assets | | |
Beginning of period | 111,157,360 | 67,610,390 |
End of period | $ 128,527,467 | $ 111,157,360 |
Other Information Shares | | |
Sold | 1,166,176 | 2,942,684 |
Issued in reinvestment of distributions | 117,639 | 262,749 |
Redeemed | (212,972) | (550,526) |
Net increase (decrease) | 1,070,843 | 2,654,907 |
Financial Highlights
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.81 | $ 10.00 | $ 8.92 | $ 9.41 | $ 8.38 | $ 6.66 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | - | .21 | .22 | .20 | .19 | .21 |
Net realized and unrealized gain (loss) | .59 | 1.95 | 1.16 | (.46) | 1.15 | 1.85 |
Total from investment operations | .59 | 2.16 | 1.38 | (.26) | 1.34 | 2.06 |
Distributions from net investment income | - | (.19) | (.21) | (.20) | (.18) | (.20) |
Distributions from net realized gain | (.14) | (.16) | (.09) | (.03) | (.13) | (.14) |
Total distributions | (.14) | (.35) | (.30) | (.23) | (.31) | (.34) |
Net asset value, end of period | $ 12.26 | $ 11.81 | $ 10.00 | $ 8.92 | $ 9.41 | $ 8.38 |
Total ReturnB, C, D | 5.06% | 21.72% | 15.50% | (2.78)% | 16.12% | 31.57% |
Ratios to Average Net AssetsF, H | | | | | | |
Expenses before reductionsG | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of fee waivers, if any | .00%A | .00% | .00% | .00% | .00% | .00% |
Expenses net of all reductions | .00%A | .00% | .00% | .00% | .00% | .00% |
Net investment income (loss) | .00%A | 1.94% | 2.28% | 2.16% | 2.20% | 2.86% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 128,527 | $ 111,157 | $ 67,610 | $ 51,478 | $ 46,070 | $ 34,560 |
Portfolio turnover rateF | 9%A | 27% | 14% | 14% | 26% | 21% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Amounts do not include the activity of the Underlying Funds.
G Amount represents less than .01%.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from 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 expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund but do not include expenses of the underlying funds in which the Fund invests.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2014 (Unaudited)
1. Organization.
VIP Investor Freedom Income PortfolioSM, VIP Investor Freedom 2005 PortfolioSM, VIP Investor Freedom 2010 PortfolioSM, VIP Investor Freedom 2015 PortfolioSM, VIP Investor Freedom 2020 PortfolioSM, VIP Investor Freedom 2025 PortfolioSM and VIP Investor Freedom 2030 PortfolioSM (the Funds) are funds of Variable Insurance Products Fund V (the Trust). 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. Each Fund is authorized to issue an unlimited number of shares. The Funds invest primarily in a combination of other VIP equity, bond, and short-term funds (the Underlying Funds) managed by Fidelity Management & Research Company (FMR). Shares of each Fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts.
2. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Funds:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Each Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value each Fund's investments by major category are as follows. Investments in the Underlying Funds are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Investment Transactions and Income. For financial reporting purposes, the Funds' 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. Income and capital gain distributions from the Underlying Funds, if any, are recorded on the ex-dividend date.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expenses included in the accompanying financial statements reflect the expenses of each Fund and do not include any expenses associated with the Underlying Funds. Although not included in each Fund's expenses, each Fund indirectly bears its proportionate share of the Underlying Funds' expenses through the impact of these expenses on each Underlying Fund's NAV. 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, each Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to the short-term gain distributions from the Underlying Funds and losses deferred due to wash sales.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows for each Fund:
| Tax cost | Gross unrealized
appreciation | Gross unrealized
depreciation | Net unrealized
appreciation
(depreciation) on
securities and other
investments |
VIP Investor Freedom Income | $ 59,761,338 | $ 4,020,363 | $ (276,551) | $ 3,743,812 |
VIP Investor Freedom 2005 | 20,382,807 | 1,589,821 | (185,446) | 1,404,375 |
VIP Investor Freedom 2010 | 57,588,508 | 5,187,154 | (946,690) | 4,240,464 |
VIP Investor Freedom 2015 | 91,160,900 | 11,145,964 | (1,049,948) | 10,096,016 |
VIP Investor Freedom 2020 | 164,784,934 | 20,935,225 | (2,062,421) | 18,872,804 |
VIP Investor Freedom 2025 | 114,156,250 | 21,098,883 | (953,752) | 20,145,131 |
VIP Investor Freedom 2030 | 110,515,406 | 19,142,446 | (1,130,383) | 18,012,063 |
3. Purchases and Redemptions of Underlying Fund Shares.
Purchases and redemptions of the Underlying Fund shares are noted in the table below.
| Purchases ($) | Redemptions ($) |
VIP Investor Freedom Income | 8,449,204 | 7,082,376 |
VIP Investor Freedom 2005 | 3,146,739 | 1,036,012 |
VIP Investor Freedom 2010 | 5,826,293 | 8,891,285 |
VIP Investor Freedom 2015 | 7,879,437 | 7,967,749 |
VIP Investor Freedom 2020 | 19,936,717 | 4,969,788 |
VIP Investor Freedom 2025 | 20,438,578 | 6,608,769 |
VIP Investor Freedom 2030 | 16,801,067 | 5,347,464 |
4. Fees and Other Transactions with Affiliates.
Management Fee. Strategic Advisers, Inc. (the investment adviser), an affiliate of FMR, provides the Funds with investment management related services. The Funds do not pay any fees for these services.
Other Transactions. The investment adviser has entered into an administration agreement with FMR under which FMR provides management and administrative services (other than investment advisory services) necessary for the operation of each Fund. Pursuant to this agreement, FMR pays all expenses of each Fund, excluding compensation of the independent Trustees and certain other expenses such as interest expense. FMR also contracts with other Fidelity companies to perform the services necessary for the operation of each Fund. The Funds do not pay any fees for these services.
Other. During the period the following Funds were reimbursed by the investment adviser for certain losses:
| Amount |
VIP Investor Freedom Income | $ 743 |
VIP Investor Freedom 2015 | 1,306 |
VIP Investor Freedom 2020 | 7,293 |
VIP Investor Freedom 2025 | 4,200 |
VIP Investor Freedom 2030 | 955 |
5. Expense Reductions.
FMR voluntarily agreed to reimburse each Fund to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
Semiannual Report
5. Expense Reductions - continued
The following Funds were in reimbursement during the period:
| Expense Limitations | Reimbursement |
VIP Investor Freedom Income | 0% | $ 116 |
VIP Investor Freedom 2005 | 0% | 38 |
VIP Investor Freedom 2010 | 0% | 116 |
VIP Investor Freedom 2015 | 0% | 187 |
VIP Investor Freedom 2020 | 0% | 319 |
VIP Investor Freedom 2025 | 0% | 229 |
VIP Investor Freedom 2030 | 0% | 222 |
6. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
At the end of the period, the investment adviser or its affiliates were owners of record of all of the outstanding shares of the Funds.
Semiannual Report
Investment Adviser
Strategic Advisers, Inc.
Boston, MA
Administrator
Fidelity Management & Research Company
Boston, MA
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Bank of New York Mellon
New York, NY
VIPIFF-SANN-0814
1.833440.108
Fidelity® Variable Insurance Products:
Strategic Income Portfolio
Semiannual Report
June 30, 2014
(Fidelity Cover Art)
Contents
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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
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. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (January 1, 2014 to June 30, 2014).
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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. 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.
| Annualized
Expense Ratio B | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
Initial Class | .69% | | | |
Actual | | $ 1,000.00 | $ 1,058.00 | $ 3.52 |
Hypothetical A | | $ 1,000.00 | $ 1,021.37 | $ 3.46 |
Service Class | .79% | | | |
Actual | | $ 1,000.00 | $ 1,057.20 | $ 4.03 |
Hypothetical A | | $ 1,000.00 | $ 1,020.88 | $ 3.96 |
Service Class 2 | .94% | | | |
Actual | | $ 1,000.00 | $ 1,056.60 | $ 4.79 |
Hypothetical A | | $ 1,000.00 | $ 1,020.13 | $ 4.71 |
Investor Class | .72% | | | |
Actual | | $ 1,000.00 | $ 1,057.30 | $ 3.67 |
Hypothetical A | | $ 1,000.00 | $ 1,021.22 | $ 3.61 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in each Class' annualized expense ratio.
In addition to the expenses noted above, the Fund also indirectly bears its proportional share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying non-money market Fidelity Central Funds as of their most recent fiscal half year were less than .01%.
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's fixed-income central funds. |
Top Five Holdings as of June 30, 2014 |
(by issuer, excluding cash equivalents) | % of fund's
net assets | % of fund's net assets
6 months ago |
U.S. Treasury Obligations | 17.9 | 16.7 |
Buoni Poliennali del Tesoro | 3.1 | 2.2 |
Japan Government | 2.3 | 2.4 |
Canadian Government | 2.3 | 2.4 |
United Kingdom, Great Britain and Northern Ireland | 2.1 | 2.2 |
| 27.7 | |
Top Five Market Sectors as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Financials | 9.6 | 9.5 |
Consumer Discretionary | 8.9 | 7.6 |
Energy | 6.7 | 6.5 |
Telecommunication Services | 6.1 | 5.4 |
Industrials | 4.1 | 4.8 |
Quality Diversification (% of fund's net assets) |
As of June 30, 2014 | As of December 31, 2013 |
 | U.S. Government and
U.S. Government Agency Obligations† 24.7% | | | U.S. Government and
U.S. Government Agency
Obligations† 25.2% | |
 | AAA,AA,A 9.8% | | | AAA,AA,A 11.6% | |
 | BBB 11.6% | | | BBB 11.0% | |
 | BB 18.1% | | | BB 18.1% | |
 | B 17.1% | | | B 19.8% | |
 | CCC,CC,C 7.9% | | | CCC,CC,C 7.3% | |
 | D 0.0% | | | D 0.1% | |
 | Not Rated 5.8% | | | Not Rated 1.7% | |
 | Other Investments 0.9% | | | Other Investments 1.0% | |
 | Short-Term
Investments and
Net Other Assets 4.1% | | | Short-Term
Investments and
Net Other Assets 4.2% | |
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes. |
Asset Allocation (% of fund's net assets) |
As of June 30, 2014* | As of December 31, 2013** |
| Preferred Securities 2.0% | | | Preferred Securities 0.8% | |
| Corporate Bonds 41.7% | | | Corporate Bonds 43.6% | |
| U.S. Government and
U.S. Government Agency
Obligations† 24.7% | | | U.S. Government and
U.S. Government Agency
Obligations† 25.2% | |
| Foreign Government &
Government Agency
Obligations 23.2% | | | Foreign Government &
Government Agency
Obligations 22.4% | |
| Bank Loan Obligations 3.2% | | | Bank Loan Obligations 2.5% | |
| Stocks 0.9% | | | Stocks 1.0% | |
 | Other Investments 0.2% | | | Other Investments 0.3% | |
| Short-Term
Investments and
Net Other Assets
(Liabilities) 4.1% | | | Short-Term
Investments and
Net Other Assets
(Liabilities) 4.2% | |
* Foreign investments | 38.5% | | ** Foreign investments | 35.7% | |
* Futures and Swaps | 1.1% | | ** Futures and Swaps | 1.1% | |
† Includes NCUA Guaranteed Notes |
An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. |
Semiannual Report
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Nonconvertible Bonds - 41.7% |
| Principal Amount (d) | | Value |
CONSUMER DISCRETIONARY - 8.0% |
Auto Components - 0.8% |
AA Bond Co. Ltd.: | | | | |
3.781% 7/31/43 (Reg S.) | GBP | 700,000 | | $ 1,210,784 |
4.7201% 7/31/18 (Reg. S) | GBP | 300,000 | | 541,196 |
Affinia Group, Inc. 7.75% 5/1/21 | | $ 110,000 | | 115,775 |
Chassix Holdings, Inc. 10% 12/15/18 pay-in-kind (f)(k) | | 240,000 | | 241,800 |
Chassix, Inc. 9.25% 8/1/18 (f) | | 850,000 | | 924,375 |
Dana Holding Corp.: | | | | |
5.375% 9/15/21 | | 380,000 | | 397,100 |
6% 9/15/23 | | 380,000 | | 402,800 |
6.5% 2/15/19 | | 345,000 | | 363,544 |
6.75% 2/15/21 | | 1,105,000 | | 1,192,019 |
Delphi Corp. 5% 2/15/23 | | 953,000 | | 1,024,475 |
Exide Technologies 8.625% 2/1/18 (c) | | 1,190,000 | | 714,000 |
International Automotive Components Group SA 9.125% 6/1/18 (f) | | 495,000 | | 525,938 |
Lear Corp. 4.75% 1/15/23 | | 665,000 | | 661,675 |
Pittsburgh Glass Works LLC 8% 11/15/18 (f) | | 230,000 | | 250,125 |
PT Gadjah Tunggal Tbk 7.75% 2/6/18 (f) | | 500,000 | | 513,200 |
Stoneridge, Inc. 9.5% 10/15/17 (f) | | 200,000 | | 213,000 |
Tenneco, Inc. 6.875% 12/15/20 | | 545,000 | | 593,369 |
| | 9,885,175 |
Automobiles - 0.2% |
Chrysler Group LLC/CG Co-Issuer, Inc.: | | | | |
8% 6/15/19 | | 900,000 | | 977,625 |
8.25% 6/15/21 | | 900,000 | | 1,017,000 |
General Motors Corp.: | | | | |
6.75% 5/1/28 (c) | | 692,000 | | 0 |
7.125% 7/15/49 (c) | | 140,000 | | 0 |
7.2% 1/15/11 (c) | | 350,000 | | 0 |
7.4% 9/1/25 (c) | | 45,000 | | 0 |
7.7% 4/15/16 (c) | | 531,000 | | 0 |
8.25% 7/15/23 (c) | | 415,000 | | 0 |
8.375% 7/15/33 (c) | | 605,000 | | 0 |
| | 1,994,625 |
Distributors - 0.0% |
American Builders & Contractors Supply Co., Inc. 5.625% 4/15/21 (f) | | 160,000 | | 165,600 |
LKQ Corp. 4.75% 5/15/23 | | 115,000 | | 113,390 |
| | 278,990 |
Diversified Consumer Services - 0.2% |
Laureate Education, Inc. 9.25% 9/1/19 (f) | | 2,490,000 | | 2,564,700 |
|
| Principal Amount (d) | | Value |
Hotels, Restaurants & Leisure - 1.7% |
24 Hour Holdings III LLC 8% 6/1/22 (f) | | $ 220,000 | | $ 218,900 |
Arcos Dorados Holdings, Inc. 10.25% 7/13/16 (f) | BRL | 2,150,000 | | 919,552 |
Caesars Growth Propeties Holdings LLC/Caesars Growth Properties Finance, Inc. 9.375% 5/1/22 (f) | | 3,140,000 | | 3,187,100 |
Choice Hotels International, Inc. 5.75% 7/1/22 | | 145,000 | | 155,623 |
FelCor Lodging LP 5.625% 3/1/23 | | 440,000 | | 453,200 |
GLP Capital LP/GLP Financing II, Inc.: | | | | |
4.375% 11/1/18 (f) | | 210,000 | | 216,825 |
4.875% 11/1/20 (f) | | 545,000 | | 561,350 |
5.375% 11/1/23 (f) | | 430,000 | | 446,125 |
Graton Economic Development Authority 9.625% 9/1/19 (f) | | 1,080,000 | | 1,228,500 |
MCE Finance Ltd. 5% 2/15/21 (f) | | 1,175,000 | | 1,186,750 |
Mohegan Tribal Gaming Authority 11% 9/15/18 pay-in-kind (f)(k) | | 125,000 | | 125,938 |
MTR Gaming Group, Inc. 11.5% 8/1/19 pay-in-kind | | 317,080 | | 356,319 |
Palace Entertainment Holdings LLC/Corp. 8.875% 4/15/17 (f) | | 100,000 | | 103,750 |
Paris Las Vegas Holding LLC/Harrah's Las Vegas LLC/Flamingo Las Vegas Holdings, Inc.: | | | | |
8% 10/1/20 (f) | | 1,970,000 | | 2,058,650 |
11% 10/1/21 (f) | | 2,061,000 | | 2,215,575 |
Playa Resorts Holding BV 8% 8/15/20 (f) | | 1,640,000 | | 1,767,100 |
RHP Hotel Properties LP/RHP Finance Co. 5% 4/15/21 | | 460,000 | | 458,850 |
Six Flags Entertainment Corp. 5.25% 1/15/21 (f) | | 785,000 | | 804,625 |
Waterford Gaming LLC/Waterford Gaming Finance Corp. 8.625% 9/15/14 (f) | | 32,746 | | 3,720 |
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp.: | | | | |
4.25% 5/30/23 (f) | | 790,000 | | 764,325 |
5.375% 3/15/22 | | 1,440,000 | | 1,499,400 |
7.75% 8/15/20 | | 1,170,000 | | 1,275,300 |
Wynn Macau Ltd. 5.25% 10/15/21 (f) | | 520,000 | | 534,300 |
| | 20,541,777 |
Household Durables - 1.0% |
Brookfield Residential Properties, Inc./Brookfield Residential U.S. Corp. 6.125% 7/1/22 (f) | | 335,000 | | 348,400 |
Brookfield Residential Properties, Inc. 6.5% 12/15/20 (f) | | 740,000 | | 782,550 |
D.R. Horton, Inc.: | | | | |
4.375% 9/15/22 | | 565,000 | | 560,056 |
4.75% 2/15/23 | | 225,000 | | 224,438 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
CONSUMER DISCRETIONARY - continued |
Household Durables - continued |
D.R. Horton, Inc.: - continued | | | | |
5.75% 8/15/23 | | $ 200,000 | | $ 215,000 |
Reliance Intermediate Holdings LP 9.5% 12/15/19 (f) | | 485,000 | | 524,382 |
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA: | | | | |
5.75% 10/15/20 | | 2,555,000 | | 2,695,525 |
6.875% 2/15/21 | | 565,000 | | 609,706 |
7.125% 4/15/19 | | 1,185,000 | | 1,238,325 |
8.25% 2/15/21 | | 625,000 | | 679,688 |
8.5% 5/15/18 (e) | | 45,000 | | 47,081 |
9% 4/15/19 | | 505,000 | | 534,669 |
9.875% 8/15/19 | | 405,000 | | 448,538 |
Springs Industries, Inc. 6.25% 6/1/21 | | 160,000 | | 163,200 |
Standard Pacific Corp.: | | | | |
8.375% 5/15/18 | | 220,000 | | 259,600 |
8.375% 1/15/21 | | 420,000 | | 497,700 |
Tempur Sealy International, Inc. 6.875% 12/15/20 | | 210,000 | | 229,950 |
Toll Brothers Finance Corp.: | | | | |
4.375% 4/15/23 | | 675,000 | | 663,188 |
5.875% 2/15/22 | | 565,000 | | 614,438 |
William Lyon Homes, Inc. 8.5% 11/15/20 | | 250,000 | | 279,688 |
| | 11,616,122 |
Internet & Catalog Retail - 0.0% |
Netflix, Inc. 5.375% 2/1/21 (f) | | 420,000 | | 439,950 |
Media - 3.6% |
Altice S.A. 7.75% 5/15/22 (f) | | 3,075,000 | | 3,282,563 |
AMC Networks, Inc. 4.75% 12/15/22 | | 320,000 | | 320,000 |
CBS Outdoor Americas Capital LLC/CBS Outdoor Americas Capital Corp.: | | | | |
5.25% 2/15/22 (f) | | 115,000 | | 118,163 |
5.625% 2/15/24 (f) | | 125,000 | | 129,063 |
CCO Holdings LLC/CCO Holdings Capital Corp.: | | | | |
5.125% 2/15/23 | | 690,000 | | 696,038 |
5.25% 3/15/21 | | 520,000 | | 533,000 |
5.25% 9/30/22 | | 740,000 | | 751,100 |
5.75% 9/1/23 | | 415,000 | | 430,044 |
6.5% 4/30/21 | | 935,000 | | 995,775 |
6.625% 1/31/22 | | 820,000 | | 881,500 |
7.375% 6/1/20 | | 555,000 | | 604,950 |
Cequel Communications Escrow I LLC/Cequel Communications Escrow Capital Corp. 6.375% 9/15/20 (f) | | 660,000 | | 701,250 |
|
| Principal Amount (d) | | Value |
Cequel Communications Holdings I LLC/Cequel Capital Corp. 5.125% 12/15/21 (f) | | $ 1,490,000 | | $ 1,484,413 |
Cinemark U.S.A., Inc.: | | | | |
4.875% 6/1/23 | | 525,000 | | 523,688 |
5.125% 12/15/22 | | 155,000 | | 158,681 |
Clear Channel Communications, Inc. 14% 2/1/21 pay-in-kind (k) | | 1,673,966 | | 1,710,328 |
Clear Channel Worldwide Holdings, Inc.: | | | | |
6.5% 11/15/22 | | 825,000 | | 880,688 |
6.5% 11/15/22 | | 2,235,000 | | 2,408,213 |
Columbus International, Inc. 7.375% 3/30/21 (f) | | 430,000 | | 463,325 |
DISH DBS Corp.: | | | | |
5% 3/15/23 | | 3,151,000 | | 3,210,081 |
5.125% 5/1/20 | | 50,000 | | 52,563 |
5.875% 7/15/22 | | 3,030,000 | | 3,287,550 |
6.75% 6/1/21 | | 890,000 | | 1,014,600 |
DreamWorks Animation SKG, Inc. 6.875% 8/15/20 (f) | | 245,000 | | 263,988 |
Liberty Media Corp.: | | | | |
8.25% 2/1/30 | | 1,295,000 | | 1,430,975 |
8.5% 7/15/29 | | 230,000 | | 255,300 |
McGraw-Hill Global Education Holdings LLC/McGraw-Hill Global Education Finance 9.75% 4/1/21 | | 1,560,000 | | 1,790,100 |
MDC Partners, Inc. 6.75% 4/1/20 (f) | | 595,000 | | 627,725 |
Nielsen Finance LLC/Nielsen Finance Co. 5% 4/15/22 (f)(h) | | 295,000 | | 297,213 |
Numericable Group SA: | | | | |
4.875% 5/15/19 (f) | | 820,000 | | 841,525 |
6% 5/15/22 (f) | | 3,445,000 | | 3,582,800 |
6.25% 5/15/24 (f) | | 2,810,000 | | 2,932,938 |
Quebecor Media, Inc. 5.75% 1/15/23 | | 790,000 | | 811,725 |
RCN Telecom Services LLC/RCN Capital Corp. 8.5% 8/15/20 (f) | | 165,000 | | 176,550 |
Regal Entertainment Group: | | | | |
5.75% 6/15/23 | | 1,015,000 | | 1,042,913 |
5.75% 2/1/25 | | 150,000 | | 151,875 |
Sinclair Television Group, Inc. 5.375% 4/1/21 | | 520,000 | | 523,250 |
Sirius XM Radio, Inc.: | | | | |
4.25% 5/15/20 (f) | | 650,000 | | 641,063 |
4.625% 5/15/23 (f) | | 260,000 | | 248,950 |
5.25% 8/15/22 (f) | | 750,000 | | 808,125 |
Starz LLC/Starz Finance Corp. 5% 9/15/19 | | 440,000 | | 458,150 |
TV Azteca SA de CV 7.5% 5/25/18 (Reg. S) | | 800,000 | | 852,000 |
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH 5.5% 1/15/23 (f) | | 575,000 | | 595,125 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
CONSUMER DISCRETIONARY - continued |
Media - continued |
Wave Holdco LLC / Wave Holdco Corp. 8.25% 7/15/19 pay-in-kind (f)(k) | | $ 120,000 | | $ 123,150 |
WMG Acquisition Corp.: | | | | |
5.625% 4/15/22 (f) | | 115,000 | | 115,863 |
6.75% 4/15/22 (f) | | 465,000 | | 465,581 |
| | 43,674,460 |
Specialty Retail - 0.2% |
Asbury Automotive Group, Inc. 8.375% 11/15/20 | | 125,000 | | 138,750 |
CST Brands, Inc. 5% 5/1/23 | | 140,000 | | 140,000 |
HT Intermediate Holdings Corp. 12% 5/15/19 pay-in-kind (f)(k) | | 265,000 | | 282,225 |
L Brands, Inc. 5.625% 10/15/23 | | 520,000 | | 564,850 |
Limited Brands, Inc. 5.625% 2/15/22 | | 685,000 | | 741,513 |
Sally Holdings LLC 6.875% 11/15/19 | | 325,000 | | 351,813 |
Sonic Automotive, Inc. 5% 5/15/23 | | 85,000 | | 83,513 |
Tenedora Nemak SA de CV 5.5% 2/28/23 (f) | | 200,000 | | 203,500 |
The Men's Wearhouse, Inc. 7% 7/1/22 (f) | | 200,000 | | 207,000 |
| | 2,713,164 |
Textiles, Apparel & Luxury Goods - 0.3% |
Hanesbrands, Inc. 6.375% 12/15/20 | | 405,000 | | 437,906 |
Levi Strauss & Co.: | | | | |
6.875% 5/1/22 | | 375,000 | | 413,438 |
7.625% 5/15/20 | | 775,000 | | 834,094 |
Polymer Group, Inc.: | | | | |
6.875% 6/1/19 (f) | | 215,000 | | 218,494 |
7.75% 2/1/19 | | 135,000 | | 143,438 |
PVH Corp. 4.5% 12/15/22 | | 1,137,000 | | 1,119,945 |
| | 3,167,315 |
TOTAL CONSUMER DISCRETIONARY | | 96,876,278 |
CONSUMER STAPLES - 1.4% |
Food & Staples Retailing - 0.5% |
BI-LO LLC/BI-LO Finance Corp.: | | | | |
8.625% 9/15/18 pay-in-kind (f)(k) | | 465,000 | | 471,975 |
9.25% 2/15/19 (f) | | 830,000 | | 894,325 |
ESAL GmbH 6.25% 2/5/23 (f) | | 1,075,000 | | 1,058,875 |
Hearthside Group Holdings LLC/Hearthside Finance, Inc. 6.5% 5/1/22 (f) | | 155,000 | | 154,613 |
Rite Aid Corp.: | | | | |
6.75% 6/15/21 | | 1,740,000 | | 1,883,550 |
9.25% 3/15/20 | | 360,000 | | 410,400 |
|
| Principal Amount (d) | | Value |
Roundy's Supermarket, Inc. 10.25% 12/15/20 (f) | | $ 130,000 | | $ 137,313 |
Shearers Foods LLC/Chip Finance Corp. 9% 11/1/19 (f) | | 152,000 | | 166,440 |
Tops Markets LLC 8.875% 12/15/17 | | 295,000 | | 320,813 |
| | 5,498,304 |
Food Products - 0.5% |
B&G Foods, Inc. 4.625% 6/1/21 | | 565,000 | | 566,413 |
FAGE Dairy Industry SA/FAGE U.S.A. Dairy Industry, Inc. 9.875% 2/1/20 (f) | | 650,000 | | 695,500 |
Gruma S.A.B. de CV 7.75% (Reg. S) (g) | | 930,000 | | 941,625 |
H.J. Heinz Co. 4.25% 10/15/20 | | 1,040,000 | | 1,046,500 |
JBS Investments GmbH 7.25% 4/3/24 (f) | | 765,000 | | 795,600 |
JBS U.S.A. LLC/JBS U.S.A. Finance, Inc.: | | | | |
7.25% 6/1/21 (f) | | 350,000 | | 375,375 |
8.25% 2/1/20 (f) | | 330,000 | | 358,050 |
Kazagro National Management Holding JSC 4.625% 5/24/23 (f) | | 200,000 | | 193,480 |
Post Holdings, Inc.: | | | | |
6% 12/15/22 (f) | | 290,000 | | 295,800 |
7.375% 2/15/22 | | 815,000 | | 881,219 |
7.375% 2/15/22 (f) | | 155,000 | | 167,594 |
TreeHouse Foods, Inc. 4.875% 3/15/22 | | 200,000 | | 205,500 |
| | 6,522,656 |
Household Products - 0.1% |
Spectrum Brands Holdings, Inc.: | | | | |
6.375% 11/15/20 | | 850,000 | | 913,750 |
6.625% 11/15/22 | | 175,000 | | 189,438 |
| | 1,103,188 |
Personal Products - 0.3% |
Elizabeth Arden, Inc. 7.375% 3/15/21 | | 135,000 | | 142,763 |
First Quality Finance Co., Inc. 4.625% 5/15/21 (f) | | 135,000 | | 127,575 |
NBTY, Inc. 9% 10/1/18 | | 425,000 | | 449,438 |
Prestige Brands, Inc.: | | | | |
5.375% 12/15/21 (f) | | 725,000 | | 739,500 |
8.125% 2/1/20 | | 75,000 | | 83,625 |
Revlon Consumer Products Corp. 5.75% 2/15/21 | | 1,979,000 | | 2,033,423 |
| | 3,576,324 |
TOTAL CONSUMER STAPLES | | 16,700,472 |
ENERGY - 6.4% |
Energy Equipment & Services - 0.5% |
Atwood Oceanics, Inc. 6.5% 2/1/20 | | 110,000 | | 117,288 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
ENERGY - continued |
Energy Equipment & Services - continued |
Basic Energy Services, Inc. 7.75% 10/15/22 | | $ 375,000 | | $ 419,063 |
Exterran Partners LP/EXLP Finance Corp. 6% 10/1/22 (f) | | 385,000 | | 390,775 |
Forbes Energy Services Ltd. 9% 6/15/19 | | 350,000 | | 363,125 |
Forum Energy Technologies, Inc. 6.25% 10/1/21 (f) | | 280,000 | | 296,800 |
McDermott International, Inc. 8% 5/1/21 (f) | | 535,000 | | 549,713 |
Offshore Group Investment Ltd.: | | | | |
7.125% 4/1/23 | | 1,445,000 | | 1,466,675 |
7.5% 11/1/19 | | 258,000 | | 272,835 |
Pacific Drilling V Ltd. 7.25% 12/1/17 (f) | | 1,010,000 | | 1,068,075 |
Precision Drilling Corp.: | | | | |
5.25% 11/15/24 (f) | | 540,000 | | 544,130 |
6.5% 12/15/21 | | 90,000 | | 97,875 |
Summit Midstream Holdings LLC 7.5% 7/1/21 | | 220,000 | | 239,800 |
Trinidad Drilling Ltd. 7.875% 1/15/19 (f) | | 140,000 | | 148,050 |
| | 5,974,204 |
Oil, Gas & Consumable Fuels - 5.9% |
Access Midstream Partners LP/ACMP Finance Corp.: | | | | |
4.875% 5/15/23 | | 735,000 | | 774,506 |
4.875% 3/15/24 | | 315,000 | | 332,719 |
Afren PLC: | | | | |
6.625% 12/9/20 (f) | | 270,000 | | 278,775 |
10.25% 4/8/19 (Reg. S) | | 400,000 | | 453,500 |
Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp.: | | | | |
4.75% 11/15/21 | | 340,000 | | 333,200 |
6.625% 10/1/20 | | 500,000 | | 531,250 |
Calumet Specialty Products Partners LP/Calumet Finance Corp. 9.625% 8/1/20 | | 485,000 | | 558,963 |
Carrizo Oil & Gas, Inc. 8.625% 10/15/18 | | 2,295,000 | | 2,418,356 |
Chaparral Energy, Inc. 9.875% 10/1/20 | | 155,000 | | 174,763 |
Concho Resources, Inc.: | | | | |
5.5% 4/1/23 | | 1,370,000 | | 1,472,750 |
6.5% 1/15/22 | | 575,000 | | 633,938 |
Continental Resources, Inc. 5% 9/15/22 | | 2,440,000 | | 2,653,500 |
Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp.: | | | | |
6% 12/15/20 | | 695,000 | | 729,750 |
6.125% 3/1/22 (f) | | 390,000 | | 410,475 |
|
| Principal Amount (d) | | Value |
CVR Refining LLC/Coffeyville Finance, Inc. 6.5% 11/1/22 | | $ 755,000 | | $ 796,525 |
Denbury Resources, Inc. 5.5% 5/1/22 | | 670,000 | | 685,075 |
DTEK Finance BV 9.5% 4/28/15 (Reg. S) | | 630,000 | | 593,775 |
Eagle Rock Energy Partners LP/Eagle Rock Energy Finance Corp. 8.375% 6/1/19 | | 480,000 | | 518,400 |
Endeavor Energy Resources LP/EER Finance, Inc. 7% 8/15/21 (f) | | 320,000 | | 341,600 |
Energy Partners Ltd. 8.25% 2/15/18 | | 1,090,000 | | 1,166,300 |
Everest Acquisition LLC/Everest Acquisition Finance, Inc. 6.875% 5/1/19 | | 560,000 | | 595,700 |
Genesis Energy LP/Genesis Energy Finance Corp. 5.75% 2/15/21 | | 250,000 | | 260,000 |
Georgian Oil & Gas Corp. 6.875% 5/16/17 (f) | | 400,000 | | 422,320 |
Global Partners LP / GLP Finance Corp. 6.25% 7/15/22 (f) | | 130,000 | | 130,000 |
Goodrich Petroleum Corp. 8.875% 3/15/19 | | 305,000 | | 324,825 |
Halcon Resources Corp.: | | | | |
8.875% 5/15/21 | | 430,000 | | 462,250 |
9.75% 7/15/20 | | 265,000 | | 289,181 |
Hiland Partners LP/Finance Corp. 7.25% 10/1/20 (f) | | 395,000 | | 430,550 |
Holly Energy Partners LP/Holly Finance Corp. 6.5% 3/1/20 | | 485,000 | | 522,588 |
IPIC GMTN Ltd. 3.625% 5/30/23 | EUR | 450,000 | | 675,216 |
KazMunaiGaz Finance Sub BV: | | | | |
6.375% 4/9/21 (f) | | 320,000 | | 356,320 |
7% 5/5/20 (f) | | 360,000 | | 409,500 |
9.125% 7/2/18 (f) | | 240,000 | | 289,164 |
KazMunaiGaz National Co.: | | | | |
4.4% 4/30/23 (f) | | 285,000 | | 279,443 |
5.75% 4/30/43 (f) | | 485,000 | | 465,600 |
Kinder Morgan Holding Co. LLC: | | | | |
5% 2/15/21 (f) | | 435,000 | | 451,313 |
5.625% 11/15/23 (f) | | 525,000 | | 539,438 |
Kodiak Oil & Gas Corp. 5.5% 1/15/21 | | 215,000 | | 224,138 |
Laredo Petroleum Holdings, Inc. 7.375% 5/1/22 (Reg. S) | | 600,000 | | 670,500 |
Markwest Energy Partners LP/Markwest Energy Finance Corp.: | | | | |
5.5% 2/15/23 | | 235,000 | | 250,275 |
6.25% 6/15/22 | | 608,000 | | 664,240 |
Naftogaz of Ukraine NJSC 9.5% 9/30/14 | | 465,000 | | 455,700 |
Newfield Exploration Co. 5.625% 7/1/24 | | 525,000 | | 576,188 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
ENERGY - continued |
Oil, Gas & Consumable Fuels - continued |
Northern Tier Energy LLC/Northern Tier Finance Corp. 7.125% 11/15/20 | | $ 235,000 | | $ 254,681 |
Nostrum Oil & Gas Finance BV 6.375% 2/14/19 (f) | | 540,000 | | 564,300 |
Pacific Rubiales Energy Corp.: | | | | |
5.375% 1/26/19 (f) | | 275,000 | | 286,688 |
7.25% 12/12/21 (f) | | 805,000 | | 893,550 |
Pan American Energy LLC 7.875% 5/7/21 (f) | | 470,000 | | 491,150 |
PBF Holding Co. LLC/PBF Finance Corp. 8.25% 2/15/20 | | 930,000 | | 1,013,700 |
Pemex Project Funding Master Trust: | | | | |
6.625% 6/15/35 | | 1,260,000 | | 1,483,650 |
6.625% 6/15/38 | | 50,000 | | 58,500 |
8.625% 12/1/23 (e) | | 250,000 | | 318,500 |
Petrobras Global Finance BV 2.3665% 1/15/19 (k) | | 725,000 | | 721,375 |
Petrobras International Finance Co. Ltd.: | | | | |
5.375% 1/27/21 | | 645,000 | | 672,238 |
6.875% 1/20/40 | | 795,000 | | 832,763 |
8.375% 12/10/18 | | 495,000 | | 587,830 |
Petroleos de Venezuela SA: | | | | |
4.9% 10/28/14 | | 1,325,000 | | 1,322,218 |
6% 11/15/26 (f) | | 705,000 | | 454,725 |
8.5% 11/2/17 (f) | | 5,510,000 | | 5,153,503 |
9% 11/17/21 (Reg. S) | | 380,000 | | 322,962 |
9.75% 5/17/35 (f) | | 1,825,000 | | 1,494,675 |
12.75% 2/17/22 (f) | | 1,085,000 | | 1,097,206 |
Petroleos Mexicanos: | | | | |
3.5% 1/30/23 | | 495,000 | | 483,368 |
4.875% 1/24/22 | | 410,000 | | 443,538 |
4.875% 1/18/24 | | 420,000 | | 450,450 |
4.875% 1/18/24 (f) | | 25,000 | | 26,813 |
5.5% 1/21/21 | | 645,000 | | 724,013 |
5.5% 6/27/44 | | 755,000 | | 785,955 |
6% 3/5/20 | | 345,000 | | 394,680 |
6.375% 1/23/45 (f) | | 945,000 | | 1,097,381 |
6.5% 6/2/41 | | 1,190,000 | | 1,383,375 |
6.625% (f)(g) | | 2,090,000 | | 2,168,375 |
8% 5/3/19 | | 230,000 | | 284,970 |
Pioneer Natural Resources Co. 7.5% 1/15/20 | | 640,000 | | 789,576 |
PT Adaro Indonesia 7.625% 10/22/19 (f) | | 905,000 | | 950,250 |
PT Pertamina Persero: | | | | |
4.3% 5/20/23 (f) | | 600,000 | | 567,390 |
4.875% 5/3/22 (f) | | 675,000 | | 669,938 |
5.25% 5/23/21 (f) | | 295,000 | | 303,850 |
5.625% 5/20/43 (f) | | 400,000 | | 359,000 |
5.625% 5/20/43 (Reg. S) | | 200,000 | | 179,500 |
|
| Principal Amount (d) | | Value |
6% 5/3/42 (f) | | $ 475,000 | | $ 444,125 |
6.5% 5/27/41 (f) | | 715,000 | | 713,213 |
QEP Resources, Inc. 5.25% 5/1/23 | | 610,000 | | 623,725 |
QR Energy LP/QRE Finance Corp. 9.25% 8/1/20 | | 415,000 | | 453,388 |
Range Resources Corp.: | | | | |
5% 8/15/22 | | 635,000 | | 673,100 |
5% 3/15/23 | | 960,000 | | 1,022,400 |
5.75% 6/1/21 | | 210,000 | | 226,800 |
Rice Energy, Inc. 6.25% 5/1/22 (f) | | 325,000 | | 333,125 |
Rosetta Resources, Inc.: | | | | |
5.625% 5/1/21 | | 485,000 | | 498,944 |
5.875% 6/1/22 | | 545,000 | | 569,525 |
Sabine Pass Liquefaction LLC: | | | | |
5.625% 2/1/21 | | 525,000 | | 555,188 |
5.625% 4/15/23 | | 785,000 | | 818,363 |
5.75% 5/15/24 (f) | | 785,000 | | 818,363 |
SemGroup Corp. 7.5% 6/15/21 | | 440,000 | | 481,800 |
Southern Star Central Corp. 5.125% 7/15/22 (f) | | 320,000 | | 322,400 |
Targa Resources Partners LP/Targa Resources Partners Finance Corp.: | | | | |
5.25% 5/1/23 | | 135,000 | | 141,075 |
6.375% 8/1/22 | | 199,000 | | 216,413 |
6.875% 2/1/21 | | 240,000 | | 259,800 |
Teekay Corp. 8.5% 1/15/20 | | 295,000 | | 340,725 |
Tennessee Gas Pipeline Co. 7.625% 4/1/37 | | 50,000 | | 69,072 |
Tesoro Corp.: | | | | |
4.25% 10/1/17 | | 305,000 | | 318,725 |
5.375% 10/1/22 | | 345,000 | | 360,525 |
Tesoro Logistics LP/Tesoro Logistics Finance Corp.: | | | | |
5.875% 10/1/20 | | 105,000 | | 110,513 |
6.125% 10/15/21 | | 300,000 | | 320,250 |
W&T Offshore, Inc. 8.5% 6/15/19 | | 505,000 | | 545,400 |
Western Refining, Inc. 6.25% 4/1/21 | | 665,000 | | 694,925 |
Whiting Petroleum Corp.: | | | | |
5% 3/15/19 | | 385,000 | | 405,213 |
5.75% 3/15/21 | | 385,000 | | 421,575 |
WPX Energy, Inc. 6% 1/15/22 | | 690,000 | | 736,575 |
YPF SA: | | | | |
8.75% 4/4/24 (f) | | 540,000 | | 564,246 |
8.875% 12/19/18 (f) | | 880,000 | | 928,400 |
Zhaikmunai International BV 7.125% 11/13/19 (f) | | 565,000 | | 614,438 |
| | 71,291,534 |
TOTAL ENERGY | | 77,265,738 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
FINANCIALS - 6.6% |
Banks - 1.1% |
Banco Daycoval SA 5.75% 3/19/19 (f) | | $ 260,000 | | $ 271,180 |
Banco de Galicia y Buenos Aires SA 16% 1/1/19 (Reg. S) | | 145,000 | | 152,250 |
BBVA Paraguay SA 9.75% 2/11/16 (f) | | 450,000 | | 483,750 |
CIT Group, Inc.: | | | | |
5% 8/15/22 | | 845,000 | | 874,575 |
5.375% 5/15/20 | | 1,055,000 | | 1,132,476 |
5.5% 2/15/19 (f) | | 2,355,000 | | 2,552,231 |
Development Bank of Kazakhstan JSC 4.125% 12/10/22 (f) | | 125,000 | | 118,613 |
Development Bank of Philippines 8.375% (g)(k) | | 720,000 | | 769,886 |
Export-Import Bank of Korea 6% 6/4/16 (Reg. S) | INR | 16,500,000 | | 269,698 |
FBN Finance Co. BV 8.25% 8/7/20 (f)(k) | | 280,000 | | 290,500 |
Finansbank A/S: | | | | |
5.5% 5/11/16 (Reg. S) | | 600,000 | | 615,540 |
6.25% 4/30/19 (f) | | 675,000 | | 697,005 |
Georgia Bank Joint Stock Co.: | | | | |
7.75% 7/5/17 (f) | | 690,000 | | 738,300 |
7.75% 7/5/17 (Reg. S) | | 200,000 | | 214,000 |
HSBK BV 7.25% 5/3/17 (f) | | 435,000 | | 469,278 |
Itau Unibanco Holding SA 6.2% 12/21/21 (f) | | 400,000 | | 427,000 |
RSHB Capital SA 6% 6/3/21 (f)(k) | | 200,000 | | 201,000 |
SB Capital SA 5.5% 2/26/24 (f)(k) | | 465,000 | | 452,213 |
Vnesheconombank Via VEB Finance PLC 6.902% 7/9/20 (f) | | 325,000 | | 353,454 |
Volkswagen Bank GmbH 1.5% 2/13/19 (Reg. S) | EUR | 300,000 | | 419,245 |
Yapi ve Kredi Bankasi A/S: | | | | |
5.25% 12/3/18 (f) | | 200,000 | | 204,760 |
6.75% 2/8/17 (f) | | 780,000 | | 834,600 |
Zenith Bank PLC 6.25% 4/22/19 (f) | | 470,000 | | 468,261 |
| | 13,009,815 |
Capital Markets - 0.1% |
Morgan Stanley, Inc. 2.375% 3/31/21 (Reg. S) | EUR | 700,000 | | 990,074 |
Consumer Finance - 2.6% |
Ally Financial, Inc.: | | | | |
7.5% 9/15/20 | | 4,620,000 | | 5,567,100 |
8% 3/15/20 | | 8,440,000 | | 10,254,600 |
Credito Real S.A.B. de CV 7.5% 3/13/19 (f) | | 400,000 | | 432,000 |
General Motors Acceptance Corp. 8% 11/1/31 | | 2,545,000 | | 3,254,419 |
GMAC LLC 8% 11/1/31 | | 5,653,000 | | 7,221,708 |
|
| Principal Amount (d) | | Value |
SLM Corp.: | | | | |
5.5% 1/25/23 | | $ 2,410,000 | | $ 2,388,913 |
7.25% 1/25/22 | | 1,340,000 | | 1,482,375 |
8% 3/25/20 | | 725,000 | | 838,281 |
| | 31,439,396 |
Diversified Financial Services - 1.7% |
AerCap Ireland Capital Ltd. / AerCap Global Aviation Trust 4.5% 5/15/21 (f) | | 995,000 | | 1,012,413 |
Aquarius Investments Luxemburg 8.25% 2/18/16 | | 600,000 | | 619,501 |
Barry Callebaut Services NV 5.5% 6/15/23 (f) | | 635,000 | | 669,735 |
Biz Finance PLC 8.375% 4/27/15 (Reg. S) | | 1,370,000 | | 1,280,950 |
City of Buenos Aires 9.95% 3/1/17 (f) | | 725,000 | | 734,788 |
Comcel Trust 6.875% 2/6/24 (f) | | 275,000 | | 297,000 |
GTB Finance BV: | | | | |
6% 11/8/18 (f) | | 680,000 | | 676,600 |
7.5% 5/19/16 (f) | | 400,000 | | 419,520 |
Hilcorp Energy I LP/Hilcorp Finance Co. 7.625% 4/15/21 (f) | | 360,000 | | 393,300 |
Icahn Enterprises LP/Icahn Enterprises Finance Corp.: | | | | |
3.5% 3/15/17 | | 560,000 | | 566,300 |
4.875% 3/15/19 | | 855,000 | | 880,650 |
5.875% 2/1/22 | | 3,505,000 | | 3,671,488 |
6% 8/1/20 | | 2,980,000 | | 3,192,325 |
Imperial Tobacco Finance: | | | | |
2.25% 2/26/21 (Reg. S) | EUR | 300,000 | | 423,134 |
3.375% 2/26/26 (Reg. S) | EUR | 550,000 | | 804,854 |
4.875% 6/7/32 (Reg. S) | GBP | 200,000 | | 349,721 |
Landry's Acquisition Co. 9.375% 5/1/20 (f) | | 95,000 | | 104,500 |
Magnesita Finance Ltd. 8.625% (f)(g) | | 400,000 | | 396,000 |
Mozambique Ematum Finance 2020 6.305% 9/11/20 (Reg. S) | | 400,000 | | 404,000 |
Opal Acquisition, Inc. 8.875% 12/15/21 (f) | | 530,000 | | 557,825 |
Pacnet Ltd. 9% 12/12/18 (f) | | 200,000 | | 216,500 |
Perusahaan Penerbit SBSN 6.125% 3/15/19 (f) | | 400,000 | | 444,500 |
TMK Capital SA 7.75% 1/27/18 | | 1,250,000 | | 1,296,875 |
TransUnion Holding Co., Inc. 9.625% 6/15/18 pay-in-kind (k) | | 155,000 | | 163,215 |
Unite (USAF) II PLC 3.374% 6/30/28 | GBP | 450,000 | | 742,575 |
| | 20,318,269 |
Insurance - 0.0% |
Hockey Merger Sub 2, Inc. 7.875% 10/1/21 (f) | | 710,000 | | 760,588 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
FINANCIALS - continued |
Real Estate Investment Trusts - 0.5% |
Corrections Corp. of America 4.625% 5/1/23 | | $ 220,000 | | $ 216,700 |
Crown Castle International Corp. 5.25% 1/15/23 | | 855,000 | | 891,338 |
CTR Partnership LP / CareTrust Capital Corp. 5.875% 6/1/21 (f) | | 85,000 | | 85,638 |
MPT Operating Partnership LP/MPT Finance Corp.: | | | | |
6.375% 2/15/22 | | 475,000 | | 509,438 |
6.875% 5/1/21 | | 725,000 | | 790,250 |
Omega Healthcare Investors, Inc.: | | | | |
5.875% 3/15/24 | | 1,385,000 | | 1,468,377 |
6.75% 10/15/22 | | 725,000 | | 783,508 |
7.5% 2/15/20 | | 385,000 | | 413,875 |
Prologis LP 3% 6/2/26 | EUR | 500,000 | | 691,961 |
The Geo Group, Inc. 5.125% 4/1/23 | | 200,000 | | 200,000 |
| | 6,051,085 |
Real Estate Management & Development - 0.6% |
CBRE Group, Inc.: | | | | |
5% 3/15/23 | | 785,000 | | 792,850 |
6.625% 10/15/20 | | 480,000 | | 509,400 |
Howard Hughes Corp. 6.875% 10/1/21 (f) | | 1,210,000 | | 1,294,700 |
Inversiones y Representaciones SA 11.5% 7/20/20 (Reg. S) | | 85,000 | | 91,095 |
KWG Property Holding Ltd. 12.5% 8/18/17 (f) | | 330,000 | | 353,100 |
Realogy Corp.: | | | | |
7.625% 1/15/20 (f) | | 630,000 | | 694,575 |
7.875% 2/15/19 (f) | | 532,000 | | 569,240 |
9% 1/15/20 (f) | | 1,085,000 | | 1,234,188 |
Taylor Morrison Communities, Inc./Monarch Communities, Inc.: | | | | |
5.25% 4/15/21 (f) | | 785,000 | | 796,775 |
7.75% 4/15/20 (f) | | 277,000 | | 302,623 |
Weyerhaeuser Real Estate Co.: | | | | |
4.375% 6/15/19 (f) | | 320,000 | | 320,800 |
5.875% 6/15/24 (f) | | 780,000 | | 802,425 |
| | 7,761,771 |
TOTAL FINANCIALS | | 80,330,998 |
HEALTH CARE - 2.4% |
Health Care Equipment & Supplies - 0.0% |
DJO Finance LLC/DJO Finance Corp. 8.75% 3/15/18 | | 230,000 | | 247,250 |
Health Care Providers & Services - 1.8% |
Community Health Systems, Inc.: | | | | |
5.125% 8/15/18 | | 495,000 | | 519,131 |
5.125% 8/1/21 (f) | | 355,000 | | 363,875 |
|
| Principal Amount (d) | | Value |
Fresenius Medical Care U.S. Finance II, Inc. 5.625% 7/31/19 (f) | | $ 1,510,000 | | $ 1,645,900 |
Gentiva Health Services, Inc. 11.5% 9/1/18 | | 475,000 | | 507,063 |
Hanger, Inc. 7.125% 11/15/18 | | 1,230,000 | | 1,291,500 |
HCA Holdings, Inc.: | | | | |
4.75% 5/1/23 | | 630,000 | | 629,213 |
5.875% 3/15/22 | | 1,915,000 | | 2,075,381 |
5.875% 5/1/23 | | 2,145,000 | | 2,244,206 |
6.25% 2/15/21 | | 610,000 | | 654,988 |
6.5% 2/15/20 | | 2,410,000 | | 2,711,250 |
7.5% 2/15/22 | | 1,175,000 | | 1,355,656 |
7.75% 5/15/21 | | 2,577,000 | | 2,825,036 |
HealthSouth Corp.: | | | | |
5.75% 11/1/24 | | 310,000 | | 327,825 |
8.125% 2/15/20 | | 575,000 | | 615,969 |
InVentiv Health, Inc. 11% 8/15/18 (f) | | 75,000 | | 71,625 |
LifePoint Hospitals, Inc. 5.5% 12/1/21 (f) | | 275,000 | | 288,750 |
MPH Acquisition Holdings LLC 6.625% 4/1/22 (f) | | 250,000 | | 261,875 |
ResCare, Inc. 10.75% 1/15/19 | | 240,000 | | 262,200 |
Sabra Health Care LP/Sabra Capital Corp.: | | | | |
5.375% 6/1/23 | | 330,000 | | 338,250 |
5.5% 2/1/21 | | 265,000 | | 278,250 |
Tenet Healthcare Corp.: | | | | |
5% 3/1/19 (f) | | 280,000 | | 283,850 |
6.875% 11/15/31 | | 1,210,000 | | 1,170,675 |
Truven Health Analytics, Inc. 10.625% 6/1/20 | | 435,000 | | 477,413 |
UHS Escrow Corp. 7% 10/1/18 | | 85,000 | | 89,038 |
| | 21,288,919 |
Pharmaceuticals - 0.6% |
Pinnacle Merger Sub, Inc. 9.5% 10/1/23 (f) | | 1,095,000 | | 1,216,819 |
Salix Pharmaceuticals Ltd. 6% 1/15/21 (f) | | 155,000 | | 166,238 |
Valeant Pharmaceuticals International: | | | | |
5.625% 12/1/21 (f) | | 1,215,000 | | 1,245,375 |
6.75% 8/15/21 (f) | | 1,250,000 | | 1,331,250 |
7.5% 7/15/21 (f) | | 1,020,000 | | 1,129,650 |
VPI Escrow Corp. 6.375% 10/15/20 (f) | | 2,520,000 | | 2,677,500 |
| | 7,766,832 |
TOTAL HEALTH CARE | | 29,303,001 |
INDUSTRIALS - 3.8% |
Aerospace & Defense - 0.2% |
Alion Science & Technology Corp.: | | | | |
10.25% 2/1/15 | | 50,000 | | 36,500 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
INDUSTRIALS - continued |
Aerospace & Defense - continued |
Alion Science & Technology Corp.: - continued | | | | |
12% 11/1/14 pay-in-kind | | $ 124,796 | | $ 123,860 |
Bombardier, Inc. 6.125% 1/15/23 (f) | | 505,000 | | 520,150 |
GenCorp, Inc. 7.125% 3/15/21 | | 140,000 | | 152,950 |
Huntington Ingalls Industries, Inc.: | | | | |
6.875% 3/15/18 | | 1,510,000 | | 1,596,825 |
7.125% 3/15/21 | | 150,000 | | 163,875 |
Triumph Group, Inc. 4.875% 4/1/21 | | 520,000 | | 518,700 |
| | 3,112,860 |
Airlines - 0.4% |
Air Canada: | | | | |
5.375% 11/15/22 (f) | | 177,894 | | 184,120 |
7.75% 4/15/21 (f) | | 470,000 | | 499,375 |
Allegiant Travel Co. 5.5% 7/15/19 | | 160,000 | | 162,600 |
Aviation Capital Group Corp. 4.625% 1/31/18 (f) | | 372,000 | | 392,319 |
Continental Airlines, Inc.: | | | | |
pass-thru trust certificates 6.903% 4/19/22 | | 45,650 | | 49,530 |
6.125% 4/29/18 (f) | | 180,000 | | 192,600 |
7.25% 11/10/19 | | 312,269 | | 365,354 |
Delta Air Lines, Inc. pass-thru trust certificates: | | | | |
6.821% 8/10/22 | | 592,050 | | 698,619 |
8.021% 8/10/22 | | 187,387 | | 219,243 |
Hawaiian Airlines pass-thru certificates Series 2013-1 Class B, 4.95% 1/15/22 | | 265,000 | | 264,006 |
Northwest Airlines, Inc. pass-thru trust certificates: | | | | |
7.027% 11/1/19 | | 106,240 | | 122,176 |
8.028% 11/1/17 | | 31,963 | | 36,157 |
U.S. Airways Group, Inc. 6.125% 6/1/18 | | 790,000 | | 834,438 |
U.S. Airways pass-thru certificates: | | | | |
Series 2011-1 Class A, 7.125% 4/22/25 | | 414,700 | | 486,236 |
Series 2012-2 Class B, 6.75% 12/3/22 | | 187,083 | | 204,154 |
Series 2013-1 Class B, 5.375% 5/15/23 | | 245,000 | | 253,575 |
United Air Lines, Inc. pass-thru trust certificates 9.75% 1/15/17 | | 399,648 | | 457,597 |
United Continental Holdings, Inc. 6.375% 6/1/18 | | 105,000 | | 113,400 |
| | 5,535,499 |
Commercial Services & Supplies - 0.8% |
ADT Corp. 6.25% 10/15/21 | | 1,560,000 | | 1,653,600 |
|
| Principal Amount (d) | | Value |
APX Group, Inc.: | | | | |
6.375% 12/1/19 | | $ 485,000 | | $ 503,188 |
8.75% 12/1/20 | | 660,000 | | 669,900 |
Bakercorp International, Inc. 8.25% 6/1/19 | | 270,000 | | 278,775 |
Brand Energy & Infrastructure Services, Inc. 8.5% 12/1/21 (f) | | 395,000 | | 421,663 |
Cenveo Corp.: | | | | |
6% 8/1/19 (f) | | 315,000 | | 315,000 |
8.5% 9/15/22 (f) | | 540,000 | | 535,950 |
Clean Harbors, Inc.: | | | | |
5.125% 6/1/21 | | 320,000 | | 327,000 |
5.25% 8/1/20 | | 1,050,000 | | 1,082,813 |
Covanta Holding Corp.: | | | | |
5.875% 3/1/24 | | 370,000 | | 382,950 |
7.25% 12/1/20 | | 430,000 | | 468,700 |
Garda World Security Corp. 7.25% 11/15/21 (f) | | 225,000 | | 236,531 |
Iron Mountain, Inc. 5.75% 8/15/24 | | 385,000 | | 398,244 |
Office Depot de Mexico SA de CV 6.875% 9/20/20 (f) | | 470,000 | | 501,725 |
R.R. Donnelley & Sons Co.: | | | | |
6% 4/1/24 | | 230,000 | | 232,300 |
7% 2/15/22 | | 385,000 | | 424,463 |
7.875% 3/15/21 | | 520,000 | | 598,000 |
TMS International Corp. 7.625% 10/15/21 (f) | | 110,000 | | 117,425 |
United Rentals North America, Inc. 8.375% 9/15/20 | | 605,000 | | 663,988 |
| | 9,812,215 |
Construction & Engineering - 0.2% |
Cementos Progreso Trust 7.125% 11/6/23 (f) | | 200,000 | | 216,000 |
MasTec, Inc. 4.875% 3/15/23 | | 555,000 | | 546,675 |
Odebrecht Finance Ltd. 7.5% (f)(g) | | 1,275,000 | | 1,314,844 |
| | 2,077,519 |
Electrical Equipment - 0.1% |
Sensata Technologies BV: | | | | |
4.875% 10/15/23 (f) | | 265,000 | | 263,013 |
6.5% 5/15/19 (f) | | 485,000 | | 515,919 |
| | 778,932 |
Machinery - 0.2% |
Blueline Rent Finance Corp./Volvo 7% 2/1/19 (f) | | 200,000 | | 213,500 |
Schaeffler Finance BV 4.75% 5/15/21 (f) | | 520,000 | | 535,600 |
Terex Corp. 6% 5/15/21 | | 1,255,000 | | 1,352,263 |
Vander Intermediate Holding II Corp. 9.75% 2/1/19 pay-in-kind (f)(k) | | 95,000 | | 101,175 |
| | 2,202,538 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
INDUSTRIALS - continued |
Marine - 0.2% |
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S., Inc. 8.125% 11/15/21 (f) | | $ 595,000 | | $ 621,775 |
Navios Maritime Holdings, Inc. 7.375% 1/15/22 (f) | | 660,000 | | 679,800 |
Navios South American Logistics, Inc./Navios Logistics Finance U.S., Inc. 7.25% 5/1/22 (f) | | 490,000 | | 509,600 |
Ultrapetrol (Bahamas) Ltd. 8.875% 6/15/21 | | 350,000 | | 378,875 |
| | 2,190,050 |
Road & Rail - 0.1% |
JSC Georgian Railway 7.75% 7/11/22 (f) | | 200,000 | | 224,000 |
Swift Services Holdings, Inc. 10% 11/15/18 | | 455,000 | | 486,850 |
Western Express, Inc. 12.5% 4/15/15 (f) | | 325,000 | | 263,250 |
| | 974,100 |
Trading Companies & Distributors - 1.5% |
Ahern Rentals, Inc. 9.5% 6/15/18 (f) | | 130,000 | | 143,325 |
Aircastle Ltd.: | | | | |
4.625% 12/15/18 | | 395,000 | | 406,850 |
6.25% 12/1/19 | | 610,000 | | 667,950 |
7.625% 4/15/20 | | 380,000 | | 443,650 |
International Lease Finance Corp.: | | | | |
3.875% 4/15/18 | | 750,000 | | 768,750 |
4.625% 4/15/21 | | 700,000 | | 722,750 |
5.875% 4/1/19 | | 3,655,000 | | 4,020,500 |
5.875% 8/15/22 | | 635,000 | | 693,738 |
6.25% 5/15/19 | | 2,550,000 | | 2,856,000 |
7.125% 9/1/18 (f) | | 945,000 | | 1,096,200 |
8.25% 12/15/20 | | 2,870,000 | | 3,544,450 |
8.625% 1/15/22 | | 2,145,000 | | 2,691,975 |
NES Rentals Holdings, Inc. 7.875% 5/1/18 (f) | | 160,000 | | 169,600 |
| | 18,225,738 |
Transportation Infrastructure - 0.1% |
Aeropuertos Argentina 2000 SA: | | | | |
10.75% 12/1/20 (f) | | 734,440 | | 771,162 |
10.75% 12/1/20 (Reg. S) | | 51,600 | | 54,180 |
| | 825,342 |
TOTAL INDUSTRIALS | | 45,734,793 |
INFORMATION TECHNOLOGY - 1.9% |
Communications Equipment - 0.4% |
Alcatel-Lucent U.S.A., Inc.: | | | | |
6.75% 11/15/20 (f) | | 1,580,000 | | 1,682,700 |
|
| Principal Amount (d) | | Value |
8.875% 1/1/20 (f) | | $ 295,000 | | $ 334,088 |
Banglalink Digital Communications Ltd. 8.625% 5/6/19 (f) | | 475,000 | | 503,500 |
Brocade Communications Systems, Inc. 4.625% 1/15/23 | | 350,000 | | 339,500 |
Lucent Technologies, Inc.: | | | | |
6.45% 3/15/29 | | 1,629,000 | | 1,612,710 |
6.5% 1/15/28 | | 290,000 | | 287,100 |
| | 4,759,598 |
Electronic Equipment & Components - 0.1% |
Flextronics International Ltd.: | | | | |
4.625% 2/15/20 | | 500,000 | | 513,750 |
5% 2/15/23 | | 260,000 | | 269,100 |
Jabil Circuit, Inc. 4.7% 9/15/22 | | 265,000 | | 268,313 |
| | 1,051,163 |
Internet Software & Services - 0.1% |
Bankrate, Inc. 6.125% 8/15/18 (f) | | 385,000 | | 408,581 |
CyrusOne LP/CyrusOne Finance Corp. 6.375% 11/15/22 | | 370,000 | | 398,675 |
j2 Global, Inc. 8% 8/1/20 | | 350,000 | | 378,875 |
VeriSign, Inc. 4.625% 5/1/23 | | 465,000 | | 459,374 |
| | 1,645,505 |
IT Services - 0.4% |
Audatex North America, Inc.: | | | | |
6% 6/15/21 (f) | | 1,000,000 | | 1,067,500 |
6.125% 11/1/23 (f) | | 150,000 | | 160,125 |
Ceridian HCM Holding, Inc. 11% 3/15/21 (f) | | 250,000 | | 288,750 |
Ceridian LLC / Comdata, Inc. 8.125% 11/15/17 (f) | | 600,000 | | 606,000 |
First Data Corp.: | | | | |
11.25% 1/15/21 | | 440,000 | | 513,700 |
11.75% 8/15/21 | | 1,615,000 | | 1,915,794 |
| | 4,551,869 |
Semiconductors & Semiconductor Equipment - 0.3% |
Advanced Micro Devices, Inc. 7% 7/1/24 (f) | | 555,000 | | 566,794 |
Entegris, Inc. 6% 4/1/22 (f) | | 155,000 | | 159,650 |
NXP BV/NXP Funding LLC: | | | | |
3.75% 6/1/18 (f) | | 590,000 | | 591,475 |
5.75% 2/15/21 (f) | | 525,000 | | 551,906 |
5.75% 3/15/23 (f) | | 1,305,000 | | 1,371,881 |
| | 3,241,706 |
Software - 0.5% |
Activision Blizzard, Inc.: | | | | |
5.625% 9/15/21 (f) | | 3,695,000 | | 3,981,363 |
6.125% 9/15/23 (f) | | 770,000 | | 847,000 |
Infor Software Parent LLC/Infor Software Parent, Inc. 7.125% 5/1/21 pay-in-kind (f)(k) | | 230,000 | | 235,175 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
INFORMATION TECHNOLOGY - continued |
Software - continued |
Nuance Communications, Inc. 5.375% 8/15/20 (f) | | $ 250,000 | | $ 258,750 |
Sophia Holding Finance LP/Sophia Holding Finance, Inc. 9.625% 12/1/18 pay-in-kind (f)(k) | | 395,000 | | 410,800 |
| | 5,733,088 |
Technology Hardware, Storage & Peripherals - 0.1% |
Seagate HDD Cayman: | | | | |
4.75% 6/1/23 (f) | | 1,050,000 | | 1,057,875 |
4.75% 1/1/25 (f) | | 540,000 | | 535,950 |
| | 1,593,825 |
TOTAL INFORMATION TECHNOLOGY | | 22,576,754 |
MATERIALS - 3.3% |
Chemicals - 1.2% |
Axiall Corp. 4.875% 5/15/23 | | 165,000 | | 164,175 |
Chemtura Corp. 5.75% 7/15/21 | | 255,000 | | 264,563 |
Eagle Spinco, Inc. 4.625% 2/15/21 | | 280,000 | | 277,900 |
Hexion U.S. Finance Corp. 6.625% 4/15/20 | | 1,230,000 | | 1,303,800 |
LSB Industries, Inc. 7.75% 8/1/19 | | 185,000 | | 197,950 |
Momentive Performance Materials, Inc. 10% 10/15/20 | | 1,865,000 | | 1,986,225 |
MPM Escrow LLC/MPM Finance Escrow Corp. 8.875% 10/15/20 | | 3,580,000 | | 3,821,650 |
Nufarm Australia Ltd. 6.375% 10/15/19 (f) | | 210,000 | | 219,713 |
Orion Engineered Carbons Finance & Co. SCA 9.25% 8/1/19 pay-in-kind (f)(k) | | 640,000 | | 667,520 |
PetroLogistics LP/PetroLogistics Finance Corp. 6.25% 4/1/20 | | 355,000 | | 386,950 |
PolyOne Corp.: | | | | |
5.25% 3/15/23 | | 320,000 | | 328,800 |
7.375% 9/15/20 | | 155,000 | | 168,369 |
Rain CII Carbon LLC/CII Carbon Corp.: | | | | |
8% 12/1/18 (f) | | 300,000 | | 315,000 |
8.25% 1/15/21 (f) | | 215,000 | | 225,750 |
Rentech Nitrogen Partners LP/Rentech Nitrogen Finance Corp. 6.5% 4/15/21 (f) | | 225,000 | | 227,250 |
Rockwood Specialties Group, Inc. 4.625% 10/15/20 | | 920,000 | | 954,500 |
SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp. 7.375% 2/1/20 (f) | | 205,000 | | 218,838 |
Taminco Global Chemical Corp. 9.75% 3/31/20 (f) | | 125,000 | | 139,688 |
TPC Group, Inc. 8.75% 12/15/20 (f) | | 765,000 | | 847,238 |
|
| Principal Amount (d) | | Value |
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. 8.75% 2/1/19 | | $ 1,045,000 | | $ 1,125,988 |
U.S. Coatings Acquisition, Inc./Flash Dutch 2 BV 7.375% 5/1/21 (f) | | 255,000 | | 277,950 |
| | 14,119,817 |
Construction Materials - 0.0% |
Prince Mineral Holding Corp. 11.75% 12/15/19 (f) | | 175,000 | | 197,313 |
Rearden G Holdings Eins GmbH 7.875% 3/30/20 (f) | | 320,000 | | 338,400 |
| | 535,713 |
Containers & Packaging - 0.9% |
Ardagh Finance Holdings SA 8.625% 6/15/19 pay-in-kind (f)(k) | | 1,420,000 | | 1,457,497 |
Ardagh Packaging Finance PLC/Ardagh MP Holdings U.S.A., Inc.: | | | | |
6% 6/30/21 (f)(h) | | 210,000 | | 210,126 |
6.25% 1/31/19 (f) | | 285,000 | | 292,125 |
6.75% 1/31/21 (f) | | 330,000 | | 340,725 |
7% 11/15/20 (f) | | 55,588 | | 57,534 |
Ball Corp. 5.75% 5/15/21 | | 3,000,000 | | 3,191,250 |
Beverage Packaging Holdings II SA (Luxembourg): | | | | |
5.625% 12/15/16 (f) | | 625,000 | | 640,625 |
6% 6/15/17 (f) | | 315,000 | | 322,875 |
BWAY Holding Co. 10% 6/15/18 | | 205,000 | | 216,019 |
Consolidated Container Co. LLC/Consolidated Container Capital, Inc. 10.125% 7/15/20 (f) | | 210,000 | | 211,050 |
Crown Cork & Seal, Inc.: | | | | |
7.375% 12/15/26 | | 1,210,000 | | 1,341,588 |
7.5% 12/15/96 | | 160,000 | | 152,000 |
Graphic Packaging International, Inc. 4.75% 4/15/21 | | 165,000 | | 168,300 |
Sappi Papier Holding GmbH 7.75% 7/15/17 (f) | | 240,000 | | 267,000 |
Sealed Air Corp. 5.25% 4/1/23 (f) | | 270,000 | | 274,050 |
Silgan Holdings, Inc. 5% 4/1/20 | | 960,000 | | 984,000 |
Tekni-Plex, Inc. 9.75% 6/1/19 (f) | | 276,000 | | 308,430 |
| | 10,435,194 |
Metals & Mining - 1.1% |
Aleris International, Inc.: | | | | |
6% 6/1/20 (f) | | 1,759 | | 3,503 |
9% 12/15/14 pay-in-kind (c)(k) | | 150,000 | | 0 |
Alrosa Finance SA 7.75% 11/3/20 (f) | | 950,000 | | 1,050,985 |
Edgen Murray Corp. 8.75% 11/1/20 (f) | | 397,000 | | 453,573 |
EVRAZ Group SA: | | | | |
6.5% 4/22/20 (f) | | 280,000 | | 261,100 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
MATERIALS - continued |
Metals & Mining - continued |
EVRAZ Group SA: - continued | | | | |
8.25% 11/10/15 (f) | | $ 940,000 | | $ 981,642 |
9.5% 4/24/18 (Reg. S) | | 675,000 | | 726,469 |
Ferrexpo Finance PLC 7.875% 4/7/16 (f) | | 600,000 | | 577,500 |
First Quantum Minerals Ltd.: | | | | |
6.75% 2/15/20 (f) | | 377,000 | | 388,310 |
7% 2/15/21 (f) | | 602,000 | | 619,308 |
7.25% 5/15/22 (f) | | 540,000 | | 562,950 |
Gold Fields Orogen Holding BVI Ltd. 4.875% 10/7/20 (f) | | 700,000 | | 644,000 |
Metinvest BV 10.25% 5/20/15 (f) | | 1,285,000 | | 1,236,813 |
Midwest Vanadium Pty Ltd. 11.5% 2/15/18 (e)(f) | | 190,000 | | 81,700 |
Mirabela Nickel Ltd. 8.75% 4/15/18 (c)(f) | | 100,000 | | 23,000 |
New Gold, Inc. 7% 4/15/20 (f) | | 150,000 | | 160,313 |
Nord Gold NV 6.375% 5/7/18 (f) | | 1,090,000 | | 1,077,738 |
Polyus Gold International Ltd.: | | | | |
5.625% 4/29/20 (f) | | 870,000 | | 861,300 |
5.625% 4/29/20 (Reg. S) | | 200,000 | | 198,000 |
Ryerson, Inc./Joseph T Ryerson & Son, Inc.: | | | | |
9% 10/15/17 | | 725,000 | | 775,750 |
11.25% 10/15/18 | | 1,100,000 | | 1,226,500 |
Southern Copper Corp.: | | | | |
6.75% 4/16/40 | | 295,000 | | 320,755 |
7.5% 7/27/35 | | 450,000 | | 523,856 |
Steel Dynamics, Inc. 5.25% 4/15/23 | | 250,000 | | 258,750 |
Walter Energy, Inc. 9.5% 10/15/19 (f) | | 705,000 | | 715,575 |
| | 13,729,390 |
Paper & Forest Products - 0.1% |
Boise Cascade Co. 6.375% 11/1/20 | | 145,000 | | 155,875 |
NewPage Corp.: | | | | |
0% 5/1/49 (c)(k) | | 90,000 | | 0 |
11.375% 12/31/14 (c) | | 318,200 | | 0 |
Sino-Forest Corp. 6.25% 10/21/17 (c)(f) | | 565,000 | | 0 |
Verso Paper Holdings LLC/Verso Paper, Inc. 11.75% 1/15/19 | | 705,000 | | 742,013 |
| | 897,888 |
TOTAL MATERIALS | | 39,718,002 |
TELECOMMUNICATION SERVICES - 6.0% |
Diversified Telecommunication Services - 2.0% |
Altice Financing SA: | | | | |
6.5% 1/15/22 (f) | | 1,435,000 | | 1,528,275 |
|
| Principal Amount (d) | | Value |
7.875% 12/15/19 (f) | | $ 440,000 | | $ 481,580 |
Altice Finco SA: | | | | |
8.125% 1/15/24 (f) | | 1,820,000 | | 2,006,550 |
9.875% 12/15/20 (f) | | 655,000 | | 754,888 |
Citizens Communications Co.: | | | | |
7.875% 1/15/27 | | 280,000 | | 289,450 |
9% 8/15/31 | | 220,000 | | 237,050 |
Consolidated Communications, Inc. 10.875% 6/1/20 | | 245,000 | | 286,038 |
Eileme 2 AB 11.625% 1/31/20 (f) | | 935,000 | | 1,117,325 |
FairPoint Communications, Inc. 8.75% 8/15/19 (f) | | 520,000 | | 560,300 |
Frontier Communications Corp. 8.5% 4/15/20 | | 1,010,000 | | 1,191,800 |
Indosat Palapa Co. BV: | | | | |
7.375% 7/29/20 (f) | | 300,000 | | 325,140 |
7.375% 7/29/20 | | 100,000 | | 108,380 |
Koninklijke KPN NV 3.25% 2/1/21 | EUR | 1,050,000 | | 1,556,199 |
Level 3 Communications, Inc. 8.875% 6/1/19 | | 165,000 | | 180,469 |
Level 3 Financing, Inc.: | | | | |
8.125% 7/1/19 | | 380,000 | | 414,675 |
8.625% 7/15/20 | | 875,000 | | 980,000 |
Lynx I Corp. 5.375% 4/15/21 (f) | | 335,000 | | 351,750 |
Lynx II Corp. 6.375% 4/15/23 (f) | | 200,000 | | 217,000 |
SBA Telecommunications, Inc. 5.75% 7/15/20 | | 585,000 | | 620,100 |
Sprint Capital Corp.: | | | | |
6.875% 11/15/28 | | 2,312,000 | | 2,335,120 |
8.75% 3/15/32 | | 1,161,000 | | 1,340,955 |
Telefonica Celular del Paraguay SA: | | | | |
6.75% 12/13/22 (f) | | 200,000 | | 215,250 |
6.75% 12/13/22 (Reg. S) | | 200,000 | | 215,000 |
TW Telecom Holdings, Inc.: | | | | |
5.375% 10/1/22 | | 1,442,000 | | 1,577,188 |
5.375% 10/1/22 | | 590,000 | | 645,313 |
6.375% 9/1/23 | | 691,000 | | 786,013 |
U.S. West Communications: | | | | |
6.875% 9/15/33 | | 200,000 | | 201,197 |
7.25% 9/15/25 | | 35,000 | | 41,163 |
7.25% 10/15/35 | | 70,000 | | 72,481 |
Virgin Media Finance PLC 4.875% 2/15/22 | | 565,000 | | 532,513 |
Wind Acquisition Finance SA: | | | | |
4.75% 7/15/20 (f)(h) | | 1,350,000 | | 1,360,193 |
7.375% 4/23/21 (f) | | 1,295,000 | | 1,382,413 |
| | 23,911,768 |
Wireless Telecommunication Services - 4.0% |
America Movil S.A.B. de CV 6.45% 12/5/22 | MXN | 7,000,000 | | 535,044 |
Digicel Group Ltd.: | | | | |
6% 4/15/21 (f) | | 3,100,000 | | 3,200,750 |
7% 2/15/20 (f) | | 1,200,000 | | 1,266,000 |
Nonconvertible Bonds - continued |
| Principal Amount (d) | | Value |
TELECOMMUNICATION SERVICES - continued |
Wireless Telecommunication Services - continued |
Digicel Group Ltd.: - continued | | | | |
7.125% 4/1/22 (f) | | $ 5,675,000 | | $ 5,916,188 |
8.25% 9/1/17 (f) | | 1,150,000 | | 1,183,120 |
8.25% 9/30/20 (f) | | 6,225,000 | | 6,785,250 |
Intelsat Jackson Holdings SA: | | | | |
5.5% 8/1/23 | | 2,115,000 | | 2,104,425 |
6.625% 12/15/22 (Reg. S) | | 2,855,000 | | 2,987,187 |
7.25% 4/1/19 | | 1,000,000 | | 1,063,750 |
7.25% 10/15/20 | | 1,545,000 | | 1,664,738 |
7.5% 4/1/21 | | 2,485,000 | | 2,721,075 |
8.5% 11/1/19 | | 325,000 | | 345,313 |
MetroPCS Wireless, Inc. 7.875% 9/1/18 | | 385,000 | | 404,366 |
Millicom International Cellular SA 4.75% 5/22/20 (f) | | 275,000 | | 275,000 |
MTS International Funding Ltd. 8.625% 6/22/20 (f) | | 1,210,000 | | 1,431,309 |
NII International Telecom S.C.A.: | | | | |
7.875% 8/15/19 (f) | | 515,000 | | 445,475 |
11.375% 8/15/19 (f) | | 300,000 | | 265,500 |
Sprint Corp. 7.125% 6/15/24 (f) | | 1,275,000 | | 1,351,500 |
T-Mobile U.S.A., Inc.: | | | | |
6.125% 1/15/22 | | 1,875,000 | | 1,987,313 |
6.25% 4/1/21 | | 1,750,000 | | 1,859,375 |
6.5% 1/15/24 | | 2,828,000 | | 3,017,476 |
6.542% 4/28/20 | | 780,000 | | 842,400 |
6.625% 4/1/23 | | 2,126,000 | | 2,306,710 |
6.633% 4/28/21 | | 860,000 | | 930,950 |
6.731% 4/28/22 | | 425,000 | | 458,469 |
6.836% 4/28/23 | | 525,000 | | 571,594 |
Telemovil Finance Co. Ltd. 8% 10/1/17 (f) | | 445,000 | | 467,829 |
Vimpel Communications OJSC 7.748% 2/2/21 (Issued by VIP Finance Ireland Ltd. for Vimpel Communications) (f) | | 1,670,000 | | 1,824,475 |
| | 48,212,581 |
TOTAL TELECOMMUNICATION SERVICES | | 72,124,349 |
UTILITIES - 1.9% |
Electric Utilities - 0.1% |
Comision Federal de Electricid 5.75% 2/14/42 (f) | | 200,000 | | 212,500 |
Empresa Distribuidora y Comercializadora Norte SA 9.75% 10/25/22 (f) | | 450,000 | | 346,500 |
Majapahit Holding BV 7.75% 1/20/20 (f) | | 265,000 | | 310,050 |
Mirant Americas Generation LLC 9.125% 5/1/31 | | 410,000 | | 421,275 |
| | 1,290,325 |
|
| Principal Amount (d) | | Value |
Gas Utilities - 0.2% |
Intergas Finance BV 6.375% 5/14/17 (Reg. S) | | $ 455,000 | | $ 490,263 |
Southern Natural Gas Co.: | | | | |
7.35% 2/15/31 | | 175,000 | | 221,499 |
8% 3/1/32 | | 335,000 | | 457,753 |
Star Gas Partners LP/Star Gas Finance Co. 8.875% 12/1/17 | | 210,000 | | 222,558 |
Suburban Propane Partners LP/Suburban Energy Finance Corp. 7.375% 8/1/21 | | 236,000 | | 256,650 |
Transportadora de Gas del Sur SA 9.625% 5/14/20 (f) | | 1,225,895 | | 1,250,412 |
| | 2,899,135 |
Independent Power Producers & Energy Traders - 1.6% |
Calpine Corp.: | | | | |
7.5% 2/15/21 (f) | | 496,000 | | 538,160 |
7.875% 7/31/20 (f) | | 1,315,000 | | 1,426,775 |
7.875% 1/15/23 (f) | | 1,292,000 | | 1,440,580 |
Energy Future Holdings Corp.: | | | | |
10.875% 11/1/17 | | 1,125,000 | | 1,372,500 |
11.25% 11/1/17 pay-in-kind (c)(k) | | 896,100 | | 1,093,242 |
Energy Future Intermediate Holding Co. LLC/Energy Future Intermediate Holding Finance, Inc.: | | | | |
11% 10/1/21 | | 2,486,000 | | 2,883,760 |
12.25% 3/1/22 (f) | | 3,120,000 | | 3,837,600 |
Listrindo Capital BV 6.95% 2/21/19 (f) | | 200,000 | | 215,500 |
Power Sector Assets and Liabilities Management Corp. 7.39% 12/2/24 (f) | | 280,000 | | 359,800 |
The AES Corp.: | | | | |
4.875% 5/15/23 | | 590,000 | | 584,100 |
5.5% 3/15/24 | | 315,000 | | 322,088 |
TXU Corp.: | | | | |
5.55% 11/15/14 | | 186,000 | | 140,430 |
6.5% 11/15/24 | | 3,225,000 | | 2,434,875 |
6.55% 11/15/34 | | 2,775,000 | | 2,095,125 |
| | 18,744,535 |
Multi-Utilities - 0.0% |
Puget Energy, Inc. 5.625% 7/15/22 | | 375,000 | | 435,335 |
TOTAL UTILITIES | | 23,369,330 |
TOTAL NONCONVERTIBLE BONDS (Cost $473,118,655) |
503,999,715
|
U.S. Government and Government Agency Obligations - 18.9% |
| Principal Amount (d) | | Value |
U.S. Government Agency Obligations - 0.4% |
Federal Home Loan Bank 1% 6/21/17 | | $ 880,000 | | $ 882,735 |
Tennessee Valley Authority: | | | | |
1.75% 10/15/18 | | 1,672,000 | | 1,685,252 |
3.5% 12/15/42 | | 510,000 | | 468,089 |
5.25% 9/15/39 | | 126,000 | | 152,647 |
5.375% 4/1/56 | | 1,200,000 | | 1,435,501 |
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS | | 4,624,224 |
U.S. Treasury Obligations - 17.9% |
U.S. Treasury Bonds: | | | | |
3.375% 5/15/44 | | 1,029,000 | | 1,033,824 |
3.625% 8/15/43 | | 884,000 | | 931,791 |
3.625% 2/15/44 | | 15,554,000 | | 16,380,306 |
4.375% 2/15/38 | | 675,000 | | 804,410 |
4.75% 2/15/37 | | 450,000 | | 564,610 |
5.25% 2/15/29 | | 2,310,000 | | 2,958,244 |
5.375% 2/15/31 (j) | | 1,869,000 | | 2,451,018 |
6.25% 8/15/23 (i) | | 2,249,000 | | 2,965,167 |
7.5% 11/15/16 | | 655,000 | | 761,386 |
7.875% 2/15/21 | | 200,000 | | 273,359 |
U.S. Treasury Notes: | | | | |
0.25% 2/15/15 | | 300,000 | | 300,328 |
0.25% 7/15/15 | | 8,678,000 | | 8,686,140 |
0.25% 4/15/16 | | 385,000 | | 384,083 |
0.25% 5/15/16 | | 4,386,000 | | 4,373,320 |
0.375% 1/15/16 | | 17,777,000 | | 17,804,074 |
0.5% 6/30/16 | | 16,190,000 | | 16,202,644 |
0.5% 7/31/17 | | 4,952,000 | | 4,885,455 |
0.625% 7/15/16 | | 4,724,000 | | 4,738,026 |
0.625% 8/15/16 | | 2,085,000 | | 2,090,050 |
0.625% 11/15/16 | | 392,000 | | 392,061 |
0.625% 12/15/16 | | 2,591,000 | | 2,589,381 |
0.625% 2/15/17 | | 1,000,000 | | 997,500 |
0.625% 4/30/18 | | 2,970,000 | | 2,899,463 |
0.75% 1/15/17 | | 500,000 | | 500,781 |
0.75% 6/30/17 | | 4,441,000 | | 4,422,610 |
0.875% 11/30/16 | | 396,000 | | 398,382 |
0.875% 1/31/17 | | 296,000 | | 297,295 |
0.875% 4/30/17 | | 4,330,000 | | 4,337,106 |
0.875% 5/15/17 | | 3,067,000 | | 3,070,834 |
0.875% 6/15/17 | | 1,000,000 | | 1,000,234 |
0.875% 1/31/18 | | 6,950,000 | | 6,882,668 |
0.875% 7/31/19 | | 4,926,000 | | 4,735,886 |
1% 9/30/16 | | 3,684,000 | | 3,719,691 |
1% 10/31/16 | | 3,620,000 | | 3,653,938 |
1% 5/31/18 | | 2,971,000 | | 2,938,271 |
1.25% 10/31/15 | | 1,715,000 | | 1,739,116 |
1.25% 11/30/18 | | 3,700,000 | | 3,666,178 |
1.375% 7/31/18 | | 2,861,000 | | 2,864,576 |
|
| Principal Amount (d) | | Value |
1.375% 9/30/18 | | $ 1,503,000 | | $ 1,500,887 |
1.375% 2/28/19 | | 4,070,000 | | 4,039,475 |
1.5% 12/31/18 | | 416,000 | | 416,163 |
1.5% 1/31/19 | | 4,585,000 | | 4,581,061 |
1.625% 4/30/19 | | 6,996,000 | | 7,007,480 |
1.625% 6/30/19 | | 5,164,000 | | 5,163,194 |
1.75% 7/31/15 | | 1,453,000 | | 1,478,031 |
1.875% 8/31/17 | | 3,300,000 | | 3,393,070 |
1.875% 9/30/17 | | 1,900,000 | | 1,952,250 |
1.875% 10/31/17 | | 1,898,000 | | 1,950,343 |
2% 5/31/21 | | 3,700,000 | | 3,671,384 |
2.125% 6/30/21 | | 1,500,000 | | 1,499,297 |
2.25% 3/31/21 | | 7,824,000 | | 7,905,909 |
2.25% 4/30/21 | | 7,201,000 | | 7,269,633 |
2.375% 6/30/18 | | 1,912,000 | | 1,992,663 |
2.5% 5/15/24 | | 1,039,000 | | 1,036,890 |
2.75% 11/30/16 | | 1,500,000 | | 1,576,407 |
2.75% 2/15/24 | | 15,356,000 | | 15,694,308 |
3% 2/28/17 | | 1,500,000 | | 1,589,414 |
3.5% 2/15/18 | | 1,501,000 | | 1,625,771 |
4.5% 5/15/17 | | 1,172,000 | | 1,294,053 |
TOTAL U.S. TREASURY OBLIGATIONS | | 216,331,889 |
Other Government Related - 0.6% |
National Credit Union Administration Guaranteed Notes: | | | | |
Series 2010-A1 Class A, 0.5005% 12/7/20 (NCUA Guaranteed) (k) | | 220,891 | | 221,318 |
Series 2011-R1 Class 1A, 0.6015% 1/8/20 (NCUA Guaranteed) (k) | | 438,252 | | 440,204 |
Series 2011-R4 Class 1A, 0.5315% 3/6/20 (NCUA Guaranteed) (k) | | 196,675 | | 196,975 |
National Credit Union Administration Guaranteed Notes Master Trust: | | | | |
1.4% 6/12/15 (NCUA Guaranteed) | | 330,000 | | 333,726 |
2.35% 6/12/17 (NCUA Guaranteed) | | 2,930,000 | | 3,055,697 |
3.45% 6/12/21 (NCUA Guaranteed) | | 3,400,000 | | 3,631,853 |
TOTAL OTHER GOVERNMENT RELATED | | 7,879,773 |
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $226,210,615) |
228,835,886
|
U.S. Government Agency - Mortgage Securities - 1.9% |
| Principal Amount (d) | | Value |
Fannie Mae - 0.4% |
1.925% 9/1/33 (k) | | $ 28,612 | | $ 29,736 |
1.925% 11/1/35 (k) | | 18,506 | | 19,303 |
2.04% 11/1/33 (k) | | 4,318 | | 4,484 |
2.044% 10/1/35 (k) | | 1,586 | | 1,659 |
2.19% 3/1/37 (k) | | 1,538 | | 1,631 |
2.204% 1/1/35 (k) | | 15,504 | | 16,319 |
2.259% 3/1/33 (k) | | 7,215 | | 7,613 |
2.303% 6/1/36 (k) | | 2,696 | | 2,862 |
2.338% 9/1/36 (k) | | 7,613 | | 7,988 |
2.369% 6/1/47 (k) | | 8,154 | | 8,729 |
2.379% 7/1/35 (k) | | 24,109 | | 25,612 |
2.381% 2/1/37 (k) | | 31,706 | | 33,948 |
2.393% 11/1/36 (k) | | 4,281 | | 4,561 |
2.476% 5/1/36 (k) | | 2,773 | | 2,920 |
2.503% 2/1/36 (k) | | 3,590 | | 3,838 |
2.517% 4/1/36 (k) | | 20,230 | | 21,615 |
2.542% 6/1/42 (k) | | 48,738 | | 50,327 |
2.89% 8/1/35 (k) | | 46,898 | | 50,240 |
2.949% 11/1/40 (k) | | 36,537 | | 38,375 |
2.982% 9/1/41 (k) | | 40,447 | | 42,408 |
3.083% 10/1/41 (k) | | 17,063 | | 17,870 |
3.163% 3/1/42 (k) | | 1,465,718 | | 1,543,865 |
3.189% 1/1/44 (k) | | 863,117 | | 897,841 |
3.229% 7/1/41 (k) | | 57,058 | | 60,313 |
3.348% 10/1/41 (k) | | 34,810 | | 36,594 |
3.553% 7/1/41 (k) | | 56,361 | | 59,872 |
5% 9/1/22 to 12/1/22 | | 990,428 | | 1,069,979 |
5.5% 10/1/20 to 1/1/29 | | 533,017 | | 584,108 |
6% 6/1/16 to 10/1/16 | | 2,671 | | 2,773 |
6.5% 3/1/16 to 8/1/36 | | 629,963 | | 724,768 |
TOTAL FANNIE MAE | | 5,372,151 |
Freddie Mac - 0.2% |
1.82% 3/1/35 (k) | | 7,580 | | 7,846 |
1.95% 3/1/37 (k) | | 2,182 | | 2,286 |
1.954% 1/1/36 (k) | | 5,637 | | 5,914 |
2.022% 2/1/37 (k) | | 2,952 | | 3,093 |
2.05% 6/1/37 (k) | | 1,829 | | 1,915 |
2.06% 1/1/37 (k) | | 16,360 | | 17,122 |
2.095% 8/1/37 (k) | | 5,268 | | 5,564 |
2.121% 5/1/37 (k) | | 4,362 | | 4,613 |
2.16% 6/1/33 (k) | | 16,806 | | 17,603 |
2.29% 10/1/35 (k) | | 12,862 | | 13,545 |
2.29% 7/1/36 (k) | | 329,633 | | 349,359 |
2.35% 7/1/35 (k) | | 9,613 | | 10,180 |
2.362% 10/1/36 (k) | | 23,878 | | 25,291 |
2.375% 5/1/37 (k) | | 4,380 | | 4,643 |
2.385% 5/1/37 (k) | | 59,276 | | 63,341 |
2.385% 5/1/37 (k) | | 32,051 | | 34,090 |
|
| Principal Amount (d) | | Value |
2.415% 6/1/37 (k) | | $ 15,864 | | $ 16,922 |
2.418% 4/1/37 (k) | | 5,685 | | 6,083 |
2.451% 6/1/37 (k) | | 3,615 | | 3,842 |
2.49% 9/1/35 (k) | | 3,682 | | 3,903 |
2.492% 4/1/35 (k) | | 375 | | 375 |
2.595% 4/1/37 (k) | | 475 | | 508 |
2.673% 7/1/35 (k) | | 13,353 | | 14,305 |
2.795% 7/1/36 (k) | | 7,189 | | 7,701 |
3.067% 10/1/35 (k) | | 3,254 | | 3,478 |
3.084% 9/1/41 (k) | | 331,100 | | 347,398 |
3.234% 4/1/41 (k) | | 33,259 | | 35,074 |
3.239% 9/1/41 (k) | | 39,851 | | 42,015 |
3.281% 6/1/41 (k) | | 49,846 | | 52,601 |
3.469% 5/1/41 (k) | | 36,843 | | 39,049 |
3.621% 6/1/41 (k) | | 56,807 | | 60,295 |
3.695% 5/1/41 (k) | | 52,107 | | 55,425 |
5.5% 2/1/19 to 11/1/21 | | 664,475 | | 711,366 |
6% 1/1/24 | | 188,181 | | 207,795 |
6.5% 12/1/14 to 3/1/22 | | 45,147 | | 49,237 |
TOTAL FREDDIE MAC | | 2,223,777 |
Ginnie Mae - 1.3% |
4.3% 8/20/61 (o) | | 351,005 | | 378,010 |
4.5% 3/15/25 to 6/15/25 | | 583,010 | | 632,452 |
4.515% 3/20/62 (o) | | 1,165,117 | | 1,274,554 |
4.53% 10/20/62 (o) | | 351,023 | | 386,490 |
4.55% 5/20/62 (o) | | 2,148,974 | | 2,355,467 |
4.556% 12/20/61 (o) | | 1,283,899 | | 1,403,170 |
4.604% 3/20/62 (o) | | 606,153 | | 665,053 |
4.626% 3/20/62 (o) | | 436,467 | | 478,232 |
4.649% 2/20/62 (o) | | 238,481 | | 261,525 |
4.65% 3/20/62 (o) | | 408,278 | | 448,177 |
4.682% 2/20/62 (o) | | 309,019 | | 338,629 |
4.684% 1/20/62 (o) | | 1,396,238 | | 1,528,252 |
4.751% 12/20/60 (o) | | 515,275 | | 557,792 |
4.804% 3/20/61 (o) | | 779,409 | | 847,489 |
4.834% 3/20/61 (o) | | 1,454,546 | | 1,582,272 |
5.47% 8/20/59 (o) | | 190,574 | | 202,839 |
5.492% 4/20/60 (o) | | 727,836 | | 805,182 |
5.5% 11/15/35 | | 263,882 | | 297,262 |
5.612% 4/20/58 (o) | | 259,913 | | 268,983 |
6% 6/15/36 | | 521,179 | | 597,070 |
TOTAL GINNIE MAE | | 15,308,900 |
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $22,421,570) |
22,904,828
|
Collateralized Mortgage Obligations - 2.9% |
| Principal Amount (d) | | Value |
U.S. Government Agency - 2.9% |
Fannie Mae: | | | | |
floater: | | | | |
Series 2008-76 Class EF, 0.652% 9/25/23 (k) | | $ 54,711 | | $ 54,912 |
Series 2010-15 Class FJ, 1.082% 6/25/36 (k) | | 579,810 | | 590,199 |
Series 2010-86 Class FE, 0.602% 8/25/25 (k) | | 58,974 | | 59,378 |
pass-thru certificates Series 2012-127 Class DH, 4% 11/25/27 | | 350,900 | | 373,251 |
planned amortization class: | | | | |
Series 2002-9 Class PC, 6% 3/25/17 | | 1,152 | | 1,209 |
Series 2003-113 Class PE, 4% 11/25/18 | | 45,986 | | 48,123 |
Series 2003-70 Class BJ, 5% 7/25/33 | | 29,664 | | 32,333 |
Series 2004-80 Class LD, 4% 1/25/19 | | 4,300 | | 4,314 |
Series 2005-19 Class PA, 5.5% 7/25/34 | | 216,332 | | 237,428 |
Series 2005-27 Class NE, 5.5% 5/25/34 | | 278,834 | | 294,036 |
Series 2005-52 Class PB, 6.5% 12/25/34 | | 8,461 | | 8,726 |
Series 2005-64 Class PX, 5.5% 6/25/35 | | 206,288 | | 225,498 |
Series 2010-118 Class PB, 4.5% 10/25/40 | | 300,000 | | 319,854 |
Series 2011-126 Class KB, 4% 12/25/41 | | 380,000 | | 389,526 |
sequential payer: | | | | |
Series 2002-57 Class BD, 5.5% 9/25/17 | | 4,750 | | 5,012 |
Series 2003-117 Class MD, 5% 12/25/23 | | 135,933 | | 147,051 |
Series 2004-52 Class KZ, 5.5% 7/25/34 | | 1,451,776 | | 1,600,283 |
Series 2004-91 Class Z, 5% 12/25/34 | | 516,199 | | 568,974 |
Series 2004-95 Class AN, 5.5% 1/25/25 | | 8,501 | | 8,597 |
Series 2005-117 Class JN, 4.5% 1/25/36 | | 40,000 | | 43,708 |
Series 2005-14 Class ZB, 5% 3/25/35 | | 208,685 | | 230,269 |
Series 2005-47 Class HK, 4.5% 6/25/20 | | 278,415 | | 294,215 |
Series 2006-72 Class CY, 6% 8/25/26 | | 104,016 | | 115,750 |
Series 2009-14 Class EB, 4.5% 3/25/24 | | 262,549 | | 278,735 |
Series 2009-59 Class HB, 5% 8/25/39 | | 276,858 | | 305,456 |
|
| Principal Amount (d) | | Value |
Series 2010-88 Class NA, 4% 8/25/28 | | $ 2,319,689 | | $ 2,415,122 |
Series 2010-97 Class CX, 4.5% 9/25/25 | | 500,000 | | 551,284 |
Series 2009-85 Class IB, 4.5% 8/25/24 (m) | | 38,140 | | 3,073 |
Series 2009-93 Class IC, 4.5% 9/25/24 (m) | | 57,553 | | 4,577 |
Series 2010-139 Class NI, 4.5% 2/25/40 (m) | | 304,991 | | 52,773 |
Series 2010-39 Class FG, 1.072% 3/25/36 (k) | | 354,646 | | 363,636 |
Series 2010-97 Class CI, 4.5% 8/25/25 (m) | | 122,644 | | 11,256 |
Series 2011-67 Class AI, 4% 7/25/26 (m) | | 94,213 | | 10,658 |
Freddie Mac: | | | | |
floater: | | | | |
Series 2630 Class FL, 0.6518% 6/15/18 (k) | | 833 | | 836 |
Series 2711 Class FC, 1.0518% 2/15/33 (k) | | 227,715 | | 231,112 |
floater planned amortization class Series 2770 Class FH, 0.5518% 3/15/34 (k) | | 239,761 | | 241,476 |
planned amortization class: | | | | |
Series 2006-3245 Class ME, 5.5% 6/15/35 | | 150,015 | | 152,815 |
Series 2101 Class PD, 6% 11/15/28 | | 4,011 | | 4,419 |
Series 2376 Class JE, 5.5% 11/15/16 | | 4,336 | | 4,527 |
Series 2381 Class OG, 5.5% 11/15/16 | | 2,322 | | 2,416 |
Series 2425 Class JH, 6% 3/15/17 | | 6,040 | | 6,350 |
Series 2672 Class MG, 5% 9/15/23 | | 310,000 | | 341,267 |
Series 2695 Class DG, 4% 10/15/18 | | 103,005 | | 108,367 |
Series 2996 Class MK, 5.5% 6/15/35 | | 10,303 | | 11,566 |
Series 3415 Class PC, 5% 12/15/37 | | 104,289 | | 112,555 |
Series 3763 Class QA, 4% 4/15/34 | | 231,429 | | 244,324 |
planned amortization class sequential payer Series 2005-2963 Class VB, 5% 11/15/34 | | 370,000 | | 396,337 |
sequential payer: | | | | |
Series 2004-2802 Class ZG, 5.5% 5/15/34 | | 775,392 | | 882,177 |
Series 2303 Class ZV, 6% 4/15/31 | | 9,244 | | 10,232 |
Series 2877 Class ZD, 5% 10/15/34 | | 601,911 | | 668,868 |
Collateralized Mortgage Obligations - continued |
| Principal Amount (d) | | Value |
U.S. Government Agency - continued |
Freddie Mac: - continued | | | | |
sequential payer: - continued | | | | |
Series 3277 Class B, 4% 2/15/22 | | $ 300,000 | | $ 317,372 |
Series 3372 Class BD, 4.5% 10/15/22 | | 790,000 | | 841,366 |
Series 3578 Class B, 4.5% 9/15/24 | | 306,679 | | 322,943 |
Series 2715 Class NG, 4.5% 12/15/18 | | 630,091 | | 667,705 |
Series 4181 Class LA, 3% 3/15/37 | | 499,225 | | 515,015 |
Ginnie Mae guaranteed REMIC pass-thru certificates: | | | | |
floater: | | | | |
Series 2007-59 Class FC, 0.6493% 7/20/37 (k) | | 124,540 | | 125,457 |
Series 2008-2 Class FD, 0.6293% 1/20/38 (k) | | 30,832 | | 31,048 |
Series 2008-73 Class FA, 1.0093% 8/20/38 (k) | | 179,610 | | 183,027 |
Series 2008-83 Class FB, 1.0493% 9/20/38 (k) | | 184,290 | | 187,952 |
Series 2009-108 Class CF, 0.7511% 11/16/39 (k) | | 150,479 | | 152,008 |
Series 2009-116 Class KF, 0.6811% 12/16/39 (k) | | 128,795 | | 129,940 |
Series 2010-9 Class FA, 0.6711% 1/16/40 (k) | | 200,293 | | 202,029 |
Series 2010-H17 Class FA, 0.4805% 7/20/60 (k)(o) | | 557,537 | | 551,728 |
Series 2010-H18 Class AF, 0.4505% 9/20/60 (k)(o) | | 619,299 | | 612,051 |
Series 2010-H19 Class FG, 0.4505% 8/20/60 (k)(o) | | 749,418 | | 740,855 |
Series 2010-H27 Series FA, 0.5305% 12/20/60 (k)(o) | | 286,077 | | 283,654 |
Series 2011-H05 Class FA, 0.6505% 12/20/60 (k)(o) | | 407,558 | | 406,334 |
Series 2011-H07 Class FA, 0.6505% 2/20/61 (k)(o) | | 652,649 | | 650,698 |
Series 2011-H12 Class FA, 0.6405% 2/20/61 (k)(o) | | 964,904 | | 961,620 |
Series 2011-H13 Class FA, 0.6505% 4/20/61 (k)(o) | | 363,362 | | 362,300 |
Series 2011-H14: | | | | |
Class FB, 0.6505% 5/20/61 (k)(o) | | 424,714 | | 423,346 |
Class FC, 0.6505% 5/20/61 (k)(o) | | 392,451 | | 391,240 |
Series 2011-H17 Class FA, 0.6805% 6/20/61 (k)(o) | | 514,734 | | 513,756 |
Series 2011-H21 Class FA, 0.7505% 10/20/61 (k)(o) | | 568,926 | | 569,499 |
Series 2012-H01 Class FA, 0.8505% 11/20/61 (k)(o) | | 485,734 | | 488,262 |
|
| Principal Amount (d) | | Value |
Series 2012-H03 Class FA, 0.8505% 1/20/62 (k)(o) | | $ 297,742 | | $ 299,308 |
Series 2012-H06 Class FA, 0.7805% 1/20/62 (k)(o) | | 465,695 | | 466,752 |
Series 2012-H07 Class FA, 0.7805% 3/20/62 (k)(o) | | 280,511 | | 281,652 |
Series 2014-H11 Class BA, 0.6492% 6/20/64 (k)(o) | | 2,165,000 | | 2,160,941 |
floater sequential payer Series 2011-150 Class D, 3% 4/20/37 | | 56,141 | | 57,066 |
planned amortization class: | | | | |
Series 2010-112 Class PM, 3.25% 9/20/33 | | 36,559 | | 36,823 |
Series 2010-99 Class PT, 3.5% 8/20/33 | | 49,308 | | 49,722 |
Series 2011-136 Class WI, 4.5% 5/20/40 (m) | | 198,168 | | 36,361 |
sequential payer Series 2011-69 Class GX, 4.5% 5/16/40 | | 470,000 | | 505,674 |
Series 2010-H13 Class JA, 5.46% 10/20/59 (o) | | 806,076 | | 856,911 |
Series 2010-H15 Class TP, 5.15% 8/20/60 (o) | | 1,164,887 | | 1,288,777 |
Series 2010-H17 Class XP, 5.3017% 7/20/60 (k)(o) | | 1,642,825 | | 1,812,961 |
Series 2010-H18 Class PL, 5.01% 9/20/60 (k)(o) | | 1,257,090 | | 1,386,515 |
Series 2011-71: | | | | |
Class ZB, 5.5% 8/20/34 | | 1,096,890 | | 1,255,273 |
Class ZC, 5.5% 7/16/34 | | 1,034,556 | | 1,188,476 |
Series 2012-64 Class KB, 3.9572% 5/20/41 (k) | | 156,812 | | 174,830 |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $35,213,109) |
35,558,107
|
Commercial Mortgage Securities - 1.0% |
|
Freddie Mac: | | | | |
pass thru-certificates floater Series KF01 Class A, 0.502% 4/25/19 (k) | | 574,940 | | 574,377 |
pass-thru certificates sequential payer Series K011 Class A2, 4.084% 11/25/20 | | 260,000 | | 286,671 |
sequential payer: | | | | |
Series K006 Class A2, 4.251% 1/25/20 | | 1,410,000 | | 1,563,163 |
Series K009 Class A2, 3.808% 8/25/20 | | 2,150,000 | | 2,338,086 |
Series K034 Class A1, 2.669% 2/25/23 | | 1,086,934 | | 1,119,297 |
Series K032 Class A1, 3.016% 2/25/23 | | 2,052,491 | | 2,152,695 |
Commercial Mortgage Securities - continued |
| Principal Amount (d) | | Value |
Freddie Mac: - continued | | | | |
Series K501 Class A2, 1.655% 11/25/16 | | $ 550,000 | | $ 560,236 |
Series K714 Class A2, 3.097% 10/25/20 | | 3,500,000 | | 3,660,703 |
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $12,073,134) |
12,255,228
|
Foreign Government and Government Agency Obligations - 23.2% |
|
Argentine Republic: | | | | |
7% 10/3/15 | | 3,425,000 | | 3,252,038 |
7% 4/17/17 | | 2,615,000 | | 2,403,766 |
Aruba Government 4.625% 9/14/23 (f) | | 245,000 | | 239,120 |
Azerbaijan Republic 4.75% 3/18/24 (f) | | 250,000 | | 257,500 |
Bahamian Republic 6.95% 11/20/29 (f) | | 250,000 | | 277,750 |
Barbados Government 7% 8/4/22 (f) | | 140,000 | | 127,050 |
Belarus Republic: | | | | |
8.75% 8/3/15 (Reg. S) | | 1,705,000 | | 1,754,104 |
8.95% 1/26/18 | | 300,000 | | 324,000 |
Brazilian Federative Republic: | | | | |
4.25% 1/7/25 | | 220,000 | | 222,970 |
5.625% 1/7/41 | | 1,500,000 | | 1,612,500 |
7.125% 1/20/37 | | 1,270,000 | | 1,606,550 |
8.25% 1/20/34 | | 1,015,000 | | 1,405,775 |
12.25% 3/6/30 | | 540,000 | | 999,000 |
Buenos Aires Province 10.875% 1/26/21 (Reg. S) | | 700,000 | | 668,500 |
Buoni Poliennali del Tesoro: | | | | |
1.5% 12/15/16 | EUR | 1,350,000 | | 1,881,016 |
2.5% 5/1/19 | EUR | 13,600,000 | | 19,609,389 |
3.5% 6/1/18 | EUR | 1,700,000 | | 2,535,683 |
3.5% 3/1/30 (Reg. S) | EUR | 650,000 | | 907,312 |
4.5% 3/1/24 | EUR | 6,500,000 | | 10,237,387 |
4.75% 9/1/28 (f) | EUR | 500,000 | | 794,981 |
Canadian Government: | | | | |
1.25% 2/1/16 | CAD | 18,200,000 | | 17,105,493 |
1.5% 6/1/23 | CAD | 6,750,000 | | 6,006,586 |
3.5% 12/1/45 | CAD | 4,750,000 | | 5,119,120 |
Central Bank of Nigeria warrants 11/15/20 (n) | | 750 | | 126,017 |
City of Buenos Aires 12.5% 4/6/15 (f) | | 360,000 | | 366,300 |
Colombian Republic: | | | | |
5.625% 2/26/44 | | 200,000 | | 224,000 |
6.125% 1/18/41 | | 520,000 | | 622,700 |
7.375% 9/18/37 | | 605,000 | | 822,800 |
10.375% 1/28/33 | | 865,000 | | 1,366,700 |
Congo Republic 3.5% 6/30/29 (e) | | 1,472,926 | | 1,337,623 |
|
| Principal Amount (d) | | Value |
Costa Rican Republic: | | | | |
4.25% 1/26/23 (f) | | $ 300,000 | | $ 288,000 |
4.375% 4/30/25 (f) | | 245,000 | | 228,830 |
7% 4/4/44 (f) | | 470,000 | | 488,800 |
Croatia Republic: | | | | |
5.5% 4/4/23 (f) | | 590,000 | | 612,863 |
6% 1/26/24 (f) | | 200,000 | | 214,500 |
6.25% 4/27/17 (f) | | 665,000 | | 720,275 |
6.375% 3/24/21 (f) | | 500,000 | | 549,375 |
6.625% 7/14/20 (f) | | 420,000 | | 469,350 |
6.75% 11/5/19 (f) | | 480,000 | | 538,200 |
Democratic Socialist Republic of Sri Lanka: | | | | |
5.125% 4/11/19 (f) | | 215,000 | | 218,494 |
5.875% 7/25/22 (f) | | 400,000 | | 411,500 |
6% 1/14/19 (f) | | 410,000 | | 431,525 |
6.25% 10/4/20 (f) | | 830,000 | | 882,664 |
6.25% 7/27/21 (f) | | 410,000 | | 432,550 |
7.4% 1/22/15 (f) | | 315,000 | | 324,135 |
Dominican Republic: | | | | |
1.1344% 8/30/24 (k) | | 995,000 | | 865,650 |
5.875% 4/18/24 (f) | | 285,000 | | 297,398 |
7.45% 4/30/44 (f) | | 645,000 | | 690,600 |
7.5% 5/6/21 (f) | | 615,000 | | 702,023 |
9.04% 1/23/18 (f) | | 181,871 | | 200,695 |
Dutch Government: | | | | |
1.75% 7/15/23 (Reg. S) | EUR | 3,850,000 | | 5,462,138 |
2% 7/15/24 | EUR | 5,050,000 | | 7,244,463 |
El Salvador Republic: | | | | |
7.625% 2/1/41 (f) | | 175,000 | | 183,750 |
7.65% 6/15/35 (Reg. S) | | 240,000 | | 259,560 |
8.25% 4/10/32 (Reg. S) | | 140,000 | | 159,250 |
French Government: | | | | |
OAT 3.25% 5/25/45 | EUR | 2,425,000 | | 3,689,612 |
1% 5/25/19 | EUR | 4,750,000 | | 6,647,683 |
Georgia Republic 6.875% 4/12/21 (f) | | 210,000 | | 237,825 |
German Federal Republic 1.75% 2/15/24 | EUR | 3,175,000 | | 4,561,687 |
Hungarian Republic: | | | | |
4.125% 2/19/18 | | 378,000 | | 394,065 |
5.375% 3/25/24 | | 268,000 | | 286,760 |
5.75% 11/22/23 | | 427,000 | | 470,768 |
7.625% 3/29/41 | | 704,000 | | 901,556 |
Indonesian Republic: | | | | |
3.375% 4/15/23 (f) | | 280,000 | | 259,700 |
4.875% 5/5/21 (f) | | 900,000 | | 945,000 |
5.25% 1/17/42 (f) | | 495,000 | | 470,250 |
5.375% 10/17/23 | | 400,000 | | 424,500 |
5.875% 3/13/20 (f) | | 730,000 | | 810,300 |
6.625% 2/17/37 (f) | | 625,000 | | 693,750 |
6.75% 1/15/44 (f) | | 605,000 | | 695,750 |
7.75% 1/17/38 (f) | | 1,290,000 | | 1,607,663 |
Foreign Government and Government Agency Obligations - continued |
| Principal
Amount (d) | | Value |
Indonesian Republic: - continued | | | | |
8.5% 10/12/35 (Reg. S) | | $ 1,175,000 | | $ 1,556,875 |
11.625% 3/4/19 (f) | | 675,000 | | 920,194 |
Islamic Republic of Pakistan: | | | | |
7.125% 3/31/16 (f) | | 1,325,000 | | 1,364,750 |
7.25% 4/15/19 (f) | | 1,165,000 | | 1,191,213 |
8.25% 4/15/24 (f) | | 200,000 | | 206,250 |
Israeli State (guaranteed by U.S. Government through Agency for International Development): | | | | |
5.5% 9/18/23 | | 2,590,000 | | 3,155,488 |
5.5% 12/4/23 | | 1,503,000 | | 1,829,522 |
Italian Republic: | | | | |
4% 2/1/37 | EUR | 1,500,000 | | 2,169,177 |
4.75% 5/1/17 | EUR | 2,100,000 | | 3,188,071 |
4.75% 9/1/44 | EUR | 1,700,000 | | 2,653,797 |
Ivory Coast 7.7743% 12/31/32 (e) | | 1,000,000 | | 968,750 |
Japan Government: | | | | |
0.1% 4/15/15 | JPY | 1,023,000,000 | | 10,101,813 |
0.1% 10/15/15 | JPY | 816,700,000 | | 8,064,285 |
1.8% 3/20/43 | JPY | 135,000,000 | | 1,373,266 |
1.9% 9/20/30 | JPY | 805,000,000 | | 8,890,289 |
Jordanian Kingdom: | | | | |
2.503% 10/30/20 | | 2,924,000 | | 2,960,524 |
3.875% 11/12/15 | | 400,000 | | 402,000 |
Lebanese Republic: | | | | |
4% 12/31/17 | | 1,228,500 | | 1,225,429 |
4.75% 11/2/16 | | 265,000 | | 268,048 |
5.15% 11/12/18 | | 400,000 | | 402,000 |
5.45% 11/28/19 | | 580,000 | | 581,450 |
6.375% 3/9/20 | | 450,000 | | 471,375 |
Moroccan Kingdom: | | | | |
4.25% 12/11/22 (f) | | 495,000 | | 495,619 |
5.5% 12/11/42 (f) | | 200,000 | | 196,576 |
Panamanian Republic: | | | | |
6.7% 1/26/36 | | 190,000 | | 234,365 |
8.875% 9/30/27 | | 200,000 | | 286,000 |
9.375% 4/1/29 | | 195,000 | | 290,160 |
Peruvian Republic: | | | | |
4% 3/7/27 (e) | | 570,000 | | 570,000 |
8.75% 11/21/33 | | 785,000 | | 1,194,770 |
Philippine Republic: | | | | |
7.75% 1/14/31 | | 875,000 | | 1,208,594 |
9.5% 2/2/30 | | 810,000 | | 1,266,638 |
10.625% 3/16/25 | | 580,000 | | 909,875 |
Plurinational State of Bolivia: | | | | |
4.875% 10/29/22 (f) | | 225,000 | | 225,675 |
5.95% 8/22/23 (f) | | 535,000 | | 564,425 |
|
| Principal Amount (d) | | Value |
Provincia de Cordoba 12.375% 8/17/17 (f) | | $ 765,000 | | $ 736,313 |
Provincia de Neuquen Argentina 7.875% 4/26/21 (Reg. S) | | 510,000 | | 503,625 |
Republic of Angola 7% 8/16/19 (Issued by Northern Lights III BV for Republic of Angola) (Reg. S) | | 275,000 | | 299,805 |
Republic of Armenia 6% 9/30/20 (f) | | 920,000 | | 970,600 |
Republic of Iraq 5.8% 1/15/28 (Reg. S) | | 1,250,000 | | 1,125,000 |
Republic of Namibia 5.5% 11/3/21 (f) | | 330,000 | | 353,506 |
Republic of Nigeria 6.75% 1/28/21 (f) | | 155,000 | | 171,081 |
Republic of Serbia: | | | | |
5.25% 11/21/17 (f) | | 280,000 | | 291,900 |
5.875% 12/3/18 (f) | | 520,000 | | 553,150 |
6.75% 11/1/24 (f) | | 971,435 | | 982,606 |
7.25% 9/28/21 (f) | | 400,000 | | 456,000 |
Republic of Zambia 5.375% 9/20/22 (f) | | 200,000 | | 188,260 |
Romanian Republic: | | | | |
4.375% 8/22/23 (f) | | 398,000 | | 407,870 |
6.125% 1/22/44 (f) | | 534,000 | | 606,811 |
6.75% 2/7/22 (f) | | 650,000 | | 775,938 |
6.75% 2/7/22 | | 50,000 | | 59,688 |
Russian Federation: | | | | |
4.5% 4/4/22 (f) | | 400,000 | | 409,000 |
4.875% 9/16/23 (f) | | 1,000,000 | | 1,032,500 |
5.625% 4/4/42 (f) | | 600,000 | | 625,500 |
5.875% 9/16/43 (f) | | 600,000 | | 640,500 |
7.5% 3/31/30 (Reg. S) | | 4,038,075 | | 4,676,656 |
12.75% 6/24/28 (Reg. S) | | 2,195,000 | | 3,800,643 |
South African Republic 5.875% 9/16/25 | | 200,000 | | 222,300 |
Spanish Kingdom: | | | | |
2.1% 4/30/17 | EUR | 3,650,000 | | 5,182,459 |
2.75% 10/31/24 (Reg. S) | EUR | 1,200,000 | | 1,638,395 |
State Oil Co. of Azerbaijan Republic 4.75% 3/13/23 (Reg. S) | | 400,000 | | 398,000 |
Turkish Republic: | | | | |
5.125% 3/25/22 | | 485,000 | | 512,403 |
5.625% 3/30/21 | | 490,000 | | 534,100 |
6.25% 9/26/22 | | 475,000 | | 535,230 |
6.75% 4/3/18 | | 680,000 | | 767,720 |
6.75% 5/30/40 | | 670,000 | | 781,756 |
6.875% 3/17/36 | | 1,265,000 | | 1,489,538 |
7% 3/11/19 | | 445,000 | | 512,195 |
7.25% 3/5/38 | | 825,000 | | 1,018,875 |
7.375% 2/5/25 | | 1,270,000 | | 1,543,050 |
7.5% 11/7/19 | | 945,000 | | 1,120,298 |
8% 2/14/34 | | 260,000 | | 341,926 |
11.875% 1/15/30 | | 450,000 | | 769,860 |
Foreign Government and Government Agency Obligations - continued |
| Principal Amount (d) | | Value |
Ukraine Financing of Infrastructure Projects State Enterprise 8.375% 11/3/17 (f) | | $ 655,000 | | $ 618,975 |
Ukraine Government: | | | | |
1.844% 5/16/19 | | 1,142,000 | | 1,140,712 |
7.75% 9/23/20 (f) | | 300,000 | | 286,200 |
9.25% 7/24/17 (f) | | 790,000 | | 799,875 |
United Kingdom, Great Britain and Northern Ireland: | | | | |
1.25% 7/22/18 | GBP | 3,250,000 | | 5,443,745 |
2.25% 9/7/23 | GBP | 2,000,000 | | 3,305,946 |
2.75% 1/22/15 | GBP | 7,100,000 | | 12,302,219 |
3.5% 7/22/68 | GBP | 2,325,000 | | 4,107,288 |
United Mexican States: | | | | |
4.75% 3/8/44 | | 1,286,000 | | 1,311,720 |
5.55% 1/21/45 | | 265,000 | | 301,438 |
6.05% 1/11/40 | | 1,316,000 | | 1,594,992 |
6.75% 9/27/34 | | 970,000 | | 1,256,150 |
7.5% 4/8/33 | | 345,000 | | 476,100 |
8.3% 8/15/31 | | 250,000 | | 366,625 |
United Republic of Tanzania 6.332% 3/9/20 (k) | | 200,000 | | 213,000 |
Uruguay Republic 7.875% 1/15/33 pay-in-kind | | 845,000 | | 1,149,200 |
Venezuelan Republic: | | | | |
oil recovery rights 4/15/20 (n) | | 10,236 | | 225,192 |
5.75% 2/26/16 (Reg S.) | | 3,005,000 | | 2,845,735 |
6% 12/9/20 | | 495,000 | | 379,913 |
7% 3/31/38 | | 360,000 | | 252,900 |
8.5% 10/8/14 | | 2,235,000 | | 2,240,588 |
9% 5/7/23 (Reg. S) | | 1,940,000 | | 1,658,700 |
9.25% 9/15/27 | | 580,000 | | 498,800 |
9.25% 5/7/28 (Reg. S) | | 630,000 | | 529,200 |
9.375% 1/13/34 | | 595,000 | | 501,288 |
11.75% 10/21/26 (Reg. S) | | 1,085,000 | | 1,062,215 |
11.95% 8/5/31 (Reg. S) | | 2,205,000 | | 2,160,900 |
12.75% 8/23/22 | | 1,670,000 | | 1,715,925 |
13.625% 8/15/18 | | 806,000 | | 870,480 |
Vietnamese Socialist Republic: | | | | |
1.1875% 3/12/16 (k) | | 271,304 | | 238,748 |
4% 3/12/28 (e) | | 1,448,750 | | 1,318,363 |
6.875% 1/15/16 (f) | | 430,000 | | 460,100 |
TOTAL FOREIGN GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $269,583,335) |
280,242,739
|
Supranational Obligations - 0.1% |
|
European Bank for Reconstruction & Development 6.2% 6/27/15 | INR | 20,300,000 | | 336,779 |
Inter-American Development Bank 4.75% 10/25/15(Reg. S) | INR | 7,400,000 | | 120,044 |
|
| Principal Amount (d) | | Value |
International Finance Corp. 7.75% 12/3/16 | INR | 13,000,000 | | $ 218,565 |
Korea Development Bank 1.5% 5/30/18 (Reg.S) | EUR | 600,000 | | 834,093 |
TOTAL SUPRANATIONAL OBLIGATIONS (Cost $1,451,962) |
1,509,481
|
Common Stocks - 0.4% |
| Shares | | |
CONSUMER DISCRETIONARY - 0.3% |
Auto Components - 0.2% |
Remy International, Inc. | 6,195 | | 144,654 |
TRW Automotive Holdings Corp. (a) | 22,706 | | 2,032,641 |
| | 2,177,295 |
Automobiles - 0.1% |
General Motors Co.: | | | |
warrants 7/10/16 (a) | 10,738 | | 285,738 |
warrants 7/10/19 (a) | 10,738 | | 199,297 |
Motors Liquidation Co. GUC Trust (a) | 2,816 | | 72,090 |
| | 557,125 |
Diversified Consumer Services - 0.0% |
Houghton Mifflin Harcourt Co. warrants 6/22/19 (a)(q) | 2,218 | | 3,327 |
Media - 0.0% |
Haights Cross Communications, Inc. (a) | 107 | | 0 |
Interpublic Group of Companies, Inc. | 23,368 | | 455,910 |
TOTAL CONSUMER DISCRETIONARY | | 3,193,657 |
CONSUMER STAPLES - 0.0% |
Food Products - 0.0% |
Reddy Ice Holdings, Inc. (a) | 5,683 | | 24,653 |
FINANCIALS - 0.0% |
Capital Markets - 0.0% |
Penson Worldwide, Inc. Class A | 314,563 | | 3 |
HEALTH CARE - 0.0% |
Health Care Providers & Services - 0.0% |
Rotech Healthcare, Inc. | 6,069 | | 112,201 |
INDUSTRIALS - 0.1% |
Aerospace & Defense - 0.0% |
Alion Science & Technology Corp. warrants 3/15/17 (a) | 115 | | 0 |
Airlines - 0.0% |
Delta Air Lines, Inc. | 1,150 | | 44,528 |
Building Products - 0.0% |
Nortek, Inc. warrants 12/7/14 (a) | 524 | | 20,174 |
Commercial Services & Supplies - 0.0% |
WP Rocket Holdings, Inc. | 202,108 | | 252,635 |
Common Stocks - continued |
| Shares | | Value |
INDUSTRIALS - continued |
Marine - 0.0% |
U.S. Shipping Partners Corp. (a) | 644 | | $ 0 |
U.S. Shipping Partners Corp. warrants 12/31/29 (a) | 6,028 | | 0 |
Trading Companies & Distributors - 0.0% |
Penhall Acquisition Co.: | | | |
Class A (a) | 321 | | 26,945 |
Class B (a) | 107 | | 8,982 |
| | 35,927 |
Transportation Infrastructure - 0.1% |
DeepOcean Group Holding BV (a)(f) | 31,897 | | 832,039 |
TOTAL INDUSTRIALS | | 1,185,303 |
INFORMATION TECHNOLOGY - 0.0% |
Semiconductors & Semiconductor Equipment - 0.0% |
MagnaChip Semiconductor Corp. (a) | 2,669 | | 37,633 |
Spansion, Inc. Class A (a) | 126 | | 2,655 |
| | 40,288 |
MATERIALS - 0.0% |
Containers & Packaging - 0.0% |
Rock-Tenn Co. Class A | 416 | | 43,925 |
Metals & Mining - 0.0% |
Aleris International, Inc. (a)(q) | 2,037 | | 65,566 |
TOTAL MATERIALS | | 109,491 |
UTILITIES - 0.0% |
Electric Utilities - 0.0% |
Portland General Electric Co. | 140 | | 4,854 |
TOTAL COMMON STOCKS (Cost $2,948,644) |
4,670,450
|
Preferred Stocks - 0.5% |
| | | |
Convertible Preferred Stocks - 0.2% |
CONSUMER STAPLES - 0.0% |
Food Products - 0.0% |
Reddy Ice Holdings, Inc. 7.00% pay-in-kind (a) | 2,286 | | 17,458 |
UTILITIES - 0.2% |
Electric Utilities - 0.2% |
Exelon Corp. 6.50% (a) | 38,600 | | 2,082,339 |
TOTAL CONVERTIBLE PREFERRED STOCKS | | 2,099,797 |
|
| Shares | | Value |
Nonconvertible Preferred Stocks - 0.3% |
FINANCIALS - 0.3% |
Capital Markets - 0.1% |
Goldman Sachs Group, Inc. Series K, 6.375% (a) | 26,704 | | $ 702,849 |
Consumer Finance - 0.2% |
Ally Financial, Inc. 7.00% (f) | 2,620 | | 2,626,632 |
TOTAL FINANCIALS | | 3,329,481 |
INDUSTRIALS - 0.0% |
Commercial Services & Supplies - 0.0% |
WP Rocket Holdings, Inc. 15.00% | 147,896 | | 1 |
TOTAL NONCONVERTIBLE PREFERRED STOCKS | | 3,329,482 |
TOTAL PREFERRED STOCKS (Cost $4,299,497) |
5,429,279
|
Bank Loan Obligations - 2.7% |
| Principal Amount (d) | | |
CONSUMER DISCRETIONARY - 0.4% |
Hotels, Restaurants & Leisure - 0.3% |
Caesars Growth Properties Holdings, LLC Tranche 1LN, term loan 6.25% 5/8/21 (k) | | $ 1,265,000 | | 1,261,838 |
Centaur Acquisition LLC Tranche 2LN, term loan 8.75% 2/20/20 (k) | | 165,000 | | 168,094 |
Graton Economic Development Authority Tranche B, term loan 9% 8/22/18 (k) | | 230,393 | | 238,456 |
Hilton Worldwide Finance, LLC Tranche B, term loan 3.5% 10/25/20 (k) | | 1,069,836 | | 1,069,836 |
MGM Mirage, Inc. Tranche B, term loan 3.5% 12/20/19 (k) | | 275,800 | | 274,780 |
TGI Friday's, Inc.: | | | | |
Tranche B 1LN, term loan 6/30/20 (p) | | 190,000 | | 190,238 |
Tranche B 2LN, term loan 6/30/21 (p) | | 215,000 | | 211,775 |
| | 3,415,017 |
Media - 0.1% |
Checkout Holding Corp. Tranche 2LN, term loan 7.75% 4/9/22 (k) | | 260,000 | | 260,000 |
Springer Science+Business Media Deutschland GmbH Tranche B 2LN, term loan 5% 8/14/20 (k) | | 1,096,039 | | 1,098,094 |
| | 1,358,094 |
Bank Loan Obligations - continued |
| Principal Amount (d) | | Value |
CONSUMER DISCRETIONARY - continued |
Specialty Retail - 0.0% |
General Nutrition Centers, Inc. Tranche B, term loan 3.25% 3/4/19 (k) | | $ 94,587 | | $ 93,405 |
TOTAL CONSUMER DISCRETIONARY | | 4,866,516 |
CONSUMER STAPLES - 0.1% |
Food & Staples Retailing - 0.0% |
Focus Brands, Inc. Tranche 2LN, term loan 10.25% 8/21/18 (k) | | 285,000 | | 287,166 |
Personal Products - 0.1% |
Revlon Consumer Products Corp.: | | | | |
term loan 4% 8/19/19 (k) | | 835,800 | | 835,800 |
Tranche B, term loan 3.25% 11/19/17 (k) | | 371,250 | | 371,250 |
| | 1,207,050 |
TOTAL CONSUMER STAPLES | | 1,494,216 |
ENERGY - 0.3% |
Energy Equipment & Services - 0.1% |
Seadrill Operating LP Tranche B, term loan 4% 2/21/21 (k) | | 478,625 | | 476,830 |
Oil, Gas & Consumable Fuels - 0.2% |
Alon U.S.A. Partners LP term loan 9.25% 11/26/18 (k) | | 331,069 | | 344,726 |
Fieldwood Energy, LLC Tranche 2LN, term loan 8.375% 9/30/20 (k) | | 1,870,000 | | 1,930,775 |
Panda Sherman Power, LLC term loan 9% 9/14/18 (k) | | 205,000 | | 208,588 |
Panda Temple Power, LLC term loan 7.25% 4/3/19 (k) | | 110,000 | | 112,888 |
Samson Investment Co. Tranche B 2LN, term loan 5% 9/25/18 (k) | | 120,000 | | 119,400 |
| | 2,716,377 |
TOTAL ENERGY | | 3,193,207 |
FINANCIALS - 0.2% |
Diversified Financial Services - 0.2% |
Moxie Patriot LLC Tranche B, term loan 6.75% 12/19/20 (k) | | 130,000 | | 133,738 |
Sheridan Investment Partners I term loan 4.25% 12/16/20 (k) | | 171,266 | | 171,266 |
Sheridan Production Partners I: | | | | |
Tranche A, term loan 4.25% 12/16/20 (k) | | 23,824 | | 23,824 |
|
| Principal Amount (d) | | Value |
Tranche M, term loan 4.25% 12/16/20 (k) | | $ 8,885 | | $ 8,885 |
TransUnion LLC Tranche B, term loan 4% 4/9/21 (k) | | 1,286,775 | | 1,286,775 |
| | 1,624,488 |
Real Estate Management & Development - 0.0% |
Realogy Corp. Credit-Linked Deposit 4.4463% 10/10/16 (k) | | 36,798 | | 36,752 |
TOTAL FINANCIALS | | 1,661,240 |
HEALTH CARE - 0.2% |
Health Care Providers & Services - 0.1% |
Emergency Medical Services Corp. Tranche B, term loan 4% 5/25/18 (k) | | 1,068,004 | | 1,072,009 |
Life Sciences Tools & Services - 0.1% |
Jaguar Holding Co. II Tranche B, term loan 4% 12/5/18 (k) | | 1,228,689 | | 1,234,832 |
TOTAL HEALTH CARE | | 2,306,841 |
INDUSTRIALS - 0.1% |
Airlines - 0.0% |
Northwest Airlines Corp. Tranche A, term loan 1.99% 12/24/18 (k) | | 212,060 | | 199,337 |
Commercial Services & Supplies - 0.1% |
Arysta Lifescience SPC LLC: | | | | |
Tranche B 1LN, term loan 4.5% 5/29/20 (k) | | 188,100 | | 188,335 |
Tranche B 2LN, term loan 8.25% 11/30/20 (k) | | 375,000 | | 382,500 |
GCA Services Group, Inc. Tranche 2LN, term loan 9.25% 11/1/20 (k) | | 180,000 | | 181,800 |
| | 752,635 |
Machinery - 0.0% |
Pinafore LLC Tranche B 2LN, term loan 3.7101% 9/21/16 (k) | | 702,702 | | 702,702 |
TOTAL INDUSTRIALS | | 1,654,674 |
INFORMATION TECHNOLOGY - 0.2% |
Electronic Equipment & Components - 0.0% |
Infor U.S., Inc. Tranche B 5LN, term loan 3.75% 6/3/20 (k) | | 278,600 | | 276,176 |
Semiconductors & Semiconductor Equipment - 0.1% |
Avago Technologies, Inc. Tranche B, term loan 3.75% 5/6/21 (k) | | 1,130,000 | | 1,134,238 |
Software - 0.1% |
Kronos, Inc. Tranche 2LN, term loan 9.75% 4/30/20 (k) | | 730,000 | | 755,550 |
TOTAL INFORMATION TECHNOLOGY | | 2,165,964 |
Bank Loan Obligations - continued |
| Principal Amount (d) | | Value |
MATERIALS - 0.1% |
Chemicals - 0.0% |
Momentive Performance Materials, Inc. term loan 4% 4/15/15 (k) | | $ 130,000 | | $ 130,325 |
Containers & Packaging - 0.1% |
Berry Plastics Corp. Tranche E, term loan 3.75% 1/6/21 (k) | | 508,725 | | 506,817 |
Metals & Mining - 0.0% |
MRC Global, Inc. Tranche B, term loan 5% 11/9/19 (k) | | 337,450 | | 339,137 |
TOTAL MATERIALS | | 976,279 |
TELECOMMUNICATION SERVICES - 0.1% |
Diversified Telecommunication Services - 0.1% |
FairPoint Communications, Inc. Tranche B, term loan 7.5% 2/14/19 (k) | | 745,563 | | 771,657 |
Integra Telecom Holdings, Inc. Tranche 2LN, term loan 9.75% 2/22/20 (k) | | 40,000 | | 40,800 |
| | 812,457 |
Wireless Telecommunication Services - 0.0% |
Digicel International Finance Ltd. Tranche D 1LN, term loan 3.75% 3/31/17 (k) | | 345,000 | | 343,275 |
Intelsat Jackson Holdings SA Tranche B 2LN, term loan 3.75% 6/30/19 (k) | | 415,000 | | 414,502 |
| | 757,777 |
TOTAL TELECOMMUNICATION SERVICES | | 1,570,234 |
UTILITIES - 1.0% |
Electric Utilities - 0.0% |
Essential Power LLC Tranche B, term loan 4.75% 8/8/19 (k) | | 307,859 | | 310,168 |
Gas Utilities - 0.0% |
Everest Acquisition LLC Tranche B 3LN, term loan 3.5% 5/24/18 (k) | | 176,667 | | 176,225 |
Independent Power Producers & Energy Traders - 1.0% |
Energy Future Holdings Corp. Tranche 1LN, term loan 4.25% 6/19/16 (k) | | 11,927,003 | | 11,927,003 |
TOTAL UTILITIES | | 12,413,396 |
TOTAL BANK LOAN OBLIGATIONS (Cost $31,918,488) |
32,302,567
|
Sovereign Loan Participations - 0.1% |
| Principal Amount (d) | | Value |
Indonesian Republic loan participation: | | | | |
Citibank 1.1875% 12/14/19 (k) | | $ 255,430 | | $ 247,768 |
Goldman Sachs 1.1875% 12/14/19 (k) | | 459,740 | | 445,947 |
Mizuho 1.1875% 12/14/19 (k) | | 343,773 | | 333,459 |
TOTAL SOVEREIGN LOAN PARTICIPATIONS (Cost $977,913) |
1,027,174
|
Fixed-Income Funds - 0.5% |
| Shares | | |
Fidelity Floating Rate Central Fund (l)
(Cost $4,455,711) | 55,212 | |
6,007,618
|
Preferred Securities - 2.0% |
| Principal Amount (d) | | |
CONSUMER DISCRETIONARY - 0.1% |
Media - 0.1% |
Globo Comunicacoes e Participacoes SA 6.25% (e)(f)(g) | | $ 470,000 | | 497,548 |
NBCUniversal Enterprise, Inc. 5.25% (f)(g) | | 770,000 | | 805,968 |
| | 1,303,516 |
CONSUMER STAPLES - 0.0% |
Food Products - 0.0% |
Cosan Overseas Ltd. 8.25% (g) | | 400,000 | | 421,711 |
ENERGY - 0.0% |
Oil, Gas & Consumable Fuels - 0.0% |
Reliance Industries Ltd. 5.875% (f)(g) | | 400,000 | | 401,478 |
FINANCIALS - 1.8% |
Banks - 1.6% |
Bank of America Corp.: | | | | |
5.125% (g)(k) | | 1,345,000 | | 1,342,597 |
5.2% (g)(k) | | 2,762,000 | | 2,656,393 |
8% (g)(k) | | 255,000 | | 290,788 |
8.125% (g)(k) | | 145,000 | | 164,630 |
Barclays Bank PLC 7.625% 11/21/22 | | 1,910,000 | | 2,196,491 |
Citigroup, Inc.: | | | | |
5.9% (g)(k) | | 1,455,000 | | 1,501,801 |
5.95% (g)(k) | | 2,675,000 | | 2,768,574 |
6.3% (g)(k) | | 270,000 | | 277,928 |
JPMorgan Chase & Co.: | | | | |
5% (g)(k) | | 1,615,000 | | 1,613,950 |
6% (g)(k) | | 2,580,000 | | 2,695,744 |
6.125% (g)(k) | | 725,000 | | 754,774 |
6.75% (g)(k) | | 400,000 | | 442,389 |
Preferred Securities - continued |
| Principal Amount (d) | | Value |
FINANCIALS - continued |
Banks - continued |
Wells Fargo & Co.: | | | | |
5.9% (g)(k) | | $ 2,500,000 | | $ 2,671,913 |
7.98% (g)(k) | | 135,000 | | 156,724 |
| | 19,534,696 |
Capital Markets - 0.2% |
Goldman Sachs Group, Inc. 5.7% (g)(k) | | 1,556,000 | | 1,623,004 |
TOTAL FINANCIALS | | 21,157,700 |
INDUSTRIALS - 0.0% |
Construction & Engineering - 0.0% |
Odebrecht Finance Ltd. 7.5% (Reg. S) (g) | | 100,000 | | 103,471 |
MATERIALS - 0.1% |
Metals & Mining - 0.1% |
CSN Islands XII Corp. 7% (Reg. S) (g) | | 820,000 | | 776,148 |
TOTAL PREFERRED SECURITIES (Cost $23,692,077) |
24,164,024
|
Other - 0.0% |
| Shares | | |
Other - 0.0% |
Idearc, Inc. Claim (a)
(Cost $1) | 108,228 | |
1
|
Money Market Funds - 3.3% |
| | | |
Fidelity Cash Central Fund, 0.11% (b)
(Cost $40,343,807) | 40,343,807 | |
40,343,807
|
Purchased Swaptions - 0.0% |
| Expiration Date | | Notional Amount | | |
Put Options - 0.0% |
Option on an interest rate swap with JPMorgan to pay a fixed rate of 3.3825% and receive a floating rate based on 3-month LIBOR | 1/13/15 | | $ 3,021,000 | | 11,912 |
|
| Expiration Date | | Notional Amount | | Value |
Call Options - 0.0% |
Option on an interest rate swap with JPMorgan to receive a fixed rate of 3.3825% and pay a floating rate based on 3-month LIBOR | 1/13/15 | | $ 3,021,000 | | $ 161,320 |
TOTAL PURCHASED SWAPTIONS (Cost $180,580) | |
173,232
|
TOTAL INVESTMENT PORTFOLIO - 99.2% (Cost $1,148,889,098) | | 1,199,424,136 |
NET OTHER ASSETS (LIABILITIES) - 0.8% | | 9,114,865 |
NET ASSETS - 100% | $ 1,208,539,001 |
Futures Contracts |
| Expiration Date | | Underlying
Face Amount
at Value | | Unrealized Appreciation/(Depreciation) |
Purchased |
Treasury Contracts |
18 CBOT 10 Year U.S. Treasury Note Contracts | Sept. 2014 | | $ 2,253,094 | | $ 6,429 |
42 CBOT 2 Year U.S. Treasury Note Contracts | Sept. 2014 | | 9,222,938 | | (2,707) |
35 CBOT 5 Year U.S. Treasury Note Contracts | Sept. 2014 | | 4,181,133 | | (2,809) |
21 CBOT Long Term U.S. Treasury Bond Contracts | Sept. 2014 | | 2,880,938 | | 32,115 |
23 CBOT Ultra Long Term U.S. Treasury Bond Contracts | Sept. 2014 | | 3,448,563 | | 56,556 |
TOTAL TREASURY CONTRACTS | | $ 21,986,666 | | $ 89,584 |
|
The face value of futures purchased as a percentage of net assets is 1.8% |
Swaps |
Interest Rate Swaps |
Clearinghouse/Counterparty (1) | Expiration Date | Notional
Amount | Payment
Received | Payment Paid | Value | Upfront Premium Received/(Paid) (2) | Unrealized
Appreciation/
(Depreciation) |
Interest Rate Swaps |
CME | Sep. 2016 | $ 813,806 | 3-month LIBOR | 1% | $ (417) | $ 0 | $ (417) |
CME | Sep. 2019 | 483,606 | 3-month LIBOR | 2.25% | (3,301) | 0 | (3,301) |
CME | Sep. 2024 | 7,657,000 | 3-month LIBOR | 3.25% | (97,062) | 0 | (97,062) |
CME | Sep. 2044 | 75,000 | 4% | 3-month LIBOR | 1,932 | 0 | 1,932 |
TOTAL INTEREST RATE SWAPS | $ (98,848) | $ 0 | $ (98,848) |
|
(1) Swaps with CME Group (CME) are centrally cleared over-the-counter (OTC) swaps. |
|
(2) Any premiums for centrally cleared OTC swaps are recorded periodically throughout the term of the swap to variation margin and included in unrealized appreciation (depreciation). |
Currency Abbreviations |
BRL | - | Brazilian real |
CAD | - | Canadian dollar |
EUR | - | European Monetary Unit |
GBP | - | British pound |
INR | - | Indian rupee |
JPY | - | Japanese yen |
MXN | - | Mexican peso |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(c) Non-income producing - Security is in default. |
(d) Amount is stated in United States dollars unless otherwise noted. |
(e) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. |
(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 $239,158,988 or 19.8% of net assets. |
(g) Security is perpetual in nature with no stated maturity date. |
(h) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(i) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $221,498. |
(j) Security or a portion of the security was pledged to cover margin requirements for centrally cleared OTC swaps. At period end, the value of securities pledged amounted to $232,119. |
(k) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end. |
(l) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's website at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
(m) 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 as of the end of the period. |
(n) Quantity represents share amount. |
(o) Represents an investment in an underlying pool of reverse mortgages which typically do not require regular principal and interest payments as repayment is deferred until a maturity event. |
(p) The coupon rate will be determined upon settlement of the loan after period end. |
(q) 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 $68,893 or 0.0% of net assets. |
Additional information on each restricted holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Aleris International, Inc. | 6/1/10 | $ 71,295 |
Houghton Mifflin Harcourt Co. warrants 6/22/19 | 6/22/12 | $ 4,281 |
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 | $ 20,560 |
Fidelity Floating Rate Central Fund | 145,063 |
Total | $ 165,623 |
Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows: |
Fund | Value,
beginning of
period | Purchases | Sales Proceeds | Value,
end of
period | % ownership,
end of
period |
Fidelity Floating Rate Central Fund | $ 5,933,634 | $ - | $ - | $ 6,007,618 | 0.4% |
Other Information |
The following is a summary of the inputs used, as of June 30, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | | | | |
Equities: | | | | |
Consumer Discretionary | $ 3,193,657 | $ 3,190,330 | $ - | $ 3,327 |
Consumer Staples | 42,111 | - | 24,653 | 17,458 |
Financials | 3,329,484 | 702,849 | 2,626,632 | 3 |
Health Care | 112,201 | - | - | 112,201 |
Industrials | 1,185,304 | 64,702 | - | 1,120,602 |
Information Technology | 40,288 | 40,288 | - | - |
Materials | 109,491 | 43,925 | - | 65,566 |
Utilities | 2,087,193 | 2,087,193 | - | - |
Corporate Bonds | 503,999,715 | - | 503,992,492 | 7,223 |
U.S. Government and Government Agency Obligations | 228,835,886 | - | 228,835,886 | - |
U.S. Government Agency - Mortgage Securities | 22,904,828 | - | 22,904,828 | - |
Collateralized Mortgage Obligations | 35,558,107 | - | 35,558,107 | - |
Commercial Mortgage Securities | 12,255,228 | - | 12,255,228 | - |
Foreign Government and Government Agency Obligations | 280,242,739 | - | 279,672,739 | 570,000 |
Supranational Obligations | 1,509,481 | - | 1,509,481 | - |
Bank Loan Obligations | 32,302,567 | - | 31,723,203 | 579,364 |
Sovereign Loan Participations | 1,027,174 | - | - | 1,027,174 |
Fixed-Income Funds | 6,007,618 | 6,007,618 | - | - |
Preferred Securities | 24,164,024 | - | 23,358,056 | 805,968 |
Other | 1 | - | - | 1 |
Money Market Funds | 40,343,807 | 40,343,807 | - | - |
Purchased Swaptions | 173,232 | - | 173,232 | - |
Total Investments in Securities: | $ 1,199,424,136 | $ 52,480,712 | $ 1,142,634,537 | $ 4,308,887 |
Other Derivative Instruments: | | | | |
Assets | | | | |
Futures Contracts | $ 95,100 | $ 95,100 | $ - | $ - |
Swaps | 1,932 | - | 1,932 | - |
Total Assets | $ 97,032 | $ 95,100 | $ 1,932 | $ - |
Liabilities | | | | |
Futures Contracts | $ (5,516) | $ (5,516) | $ - | $ - |
Swaps | (100,780) | - | (100,780) | - |
Total Liabilities | $ (106,296) | $ (5,516) | $ (100,780) | $ - |
Total Other Derivative Instruments: | $ (9,264) | $ 89,584 | $ (98,848) | $ - |
Value of Derivative Instruments |
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of June 30, 2014. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements. |
Primary Risk Exposure /
Derivative Type | Value |
| Asset | Liability |
Interest Rate Risk | | |
Futures Contracts (a) | $ 95,100 | $ (5,516) |
Purchased Swaptions (b) | 173,232 | - |
Swaps (c) | 1,932 | (100,780) |
Total Value of Derivatives | $ 270,264 | $ (106,296) |
(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Schedule of Investments. Only the period end receivable or payable for daily variation margin and net unrealized appreciation (depreciation) are presented in the Statement of Assets and Liabilities. |
(b) Gross value is included in the Statement of Assets and Liabilities in the investments, at value line-item. |
(c) For centrally cleared OTC swaps, reflects gross cumulative appreciation (depreciation) as presented in the Schedule of Investments. For centrally cleared OTC swaps, only the period end receivable or payable for daily variation margin and net unrealized appreciation (depreciation) are presented in the Statement of Assets and Liabilities. |
Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows (Unaudited): |
United States of America | 61.5% |
Italy | 3.8% |
Canada | 3.3% |
Luxembourg | 2.8% |
United Kingdom | 2.7% |
Netherlands | 2.7% |
Japan | 2.3% |
Venezuela | 1.8% |
Bermuda | 1.7% |
France | 1.5% |
Turkey | 1.4% |
Mexico | 1.3% |
Indonesia | 1.2% |
Argentina | 1.2% |
Russia | 1.0% |
Others (Individually Less Than 1%) | 9.8% |
| 100.0% |
The information in the above table is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's fixed-income central funds. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $1,104,089,580) | $ 1,153,072,711 | |
Fidelity Central Funds (cost $44,799,518) | 46,351,425 | |
Total Investments (cost $1,148,889,098) | | $ 1,199,424,136 |
Cash | | 2,493,402 |
Receivable for investments sold | | 12,492,580 |
Receivable for fund shares sold | | 427,425 |
Dividends receivable | | 6,549 |
Interest receivable | | 13,496,625 |
Distributions receivable from Fidelity Central Funds | | 27,788 |
Receivable for daily variation margin for derivative instruments | | 11,854 |
Other receivables | | 453 |
Total assets | | 1,228,380,812 |
| | |
Liabilities | | |
Payable for investments purchased
Regular delivery | $ 16,922,380 | |
Delayed delivery | 1,859,671 | |
Payable for fund shares redeemed | 293,008 | |
Accrued management fee | 560,295 | |
Distribution and service plan fees payable | 19,931 | |
Other affiliated payables | 130,548 | |
Other payables and accrued expenses | 55,978 | |
Total liabilities | | 19,841,811 |
| | |
Net Assets | | $ 1,208,539,001 |
Net Assets consist of: | | |
Paid in capital | | $ 1,129,492,183 |
Undistributed net investment income | | 23,681,184 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 4,965,696 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 50,399,938 |
Net Assets | | $ 1,208,539,001 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Initial Class:
Net Asset Value, offering price and redemption price per share ($116,534,929 ÷ 9,837,477 shares) | | $ 11.85 |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($884,936 ÷ 74,800 shares) | | $ 11.83 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($98,658,442 ÷ 8,385,560 shares) | | $ 11.77 |
| | |
Investor Class:
Net Asset Value, offering price and redemption price per share ($992,460,694 ÷ 84,017,009 shares) | | $ 11.81 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 299,078 |
Interest | | 25,007,483 |
Income from Fidelity Central Funds | | 165,623 |
Total income | | 25,472,184 |
| | |
Expenses | | |
Management fee | $ 3,222,918 | |
Transfer agent fees | 552,974 | |
Distribution and service plan fees | 102,212 | |
Accounting fees and expenses | 201,274 | |
Custodian fees and expenses | 33,018 | |
Independent trustees' compensation | 2,188 | |
Registration fees | 2 | |
Audit | 45,163 | |
Legal | 1,286 | |
Miscellaneous | 5,506 | |
Total expenses before reductions | 4,166,541 | |
Expense reductions | (150) | 4,166,391 |
Net investment income (loss) | | 21,305,793 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities: | | |
Unaffiliated issuers | 7,798,051 | |
Foreign currency transactions | (2,933) | |
Futures contracts | 447,449 | |
Swaps | (318,994) | |
Total net realized gain (loss) | | 7,923,573 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 35,010,628 | |
Assets and liabilities in foreign currencies | (5,319) | |
Futures contracts | 293,267 | |
Swaps | (301,236) | |
Total change in net unrealized appreciation (depreciation) | | 34,997,340 |
Net gain (loss) | | 42,920,913 |
Net increase (decrease) in net assets resulting from operations | | $ 64,226,706 |
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | Year ended
December 31,
2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 21,305,793 | $ 45,140,632 |
Net realized gain (loss) | 7,923,573 | 6,656,916 |
Change in net unrealized appreciation (depreciation) | 34,997,340 | (51,427,205) |
Net increase (decrease) in net assets resulting from operations | 64,226,706 | 370,343 |
Distributions to shareholders from net investment income | - | (46,718,517) |
Distributions to shareholders from net realized gain | - | (11,002,756) |
Total distributions | - | (57,721,273) |
Share transactions - net increase (decrease) | 17,038,430 | (107,057,354) |
Total increase (decrease) in net assets | 81,265,136 | (164,408,284) |
| | |
Net Assets | | |
Beginning of period | 1,127,273,865 | 1,291,682,149 |
End of period (including undistributed net investment income of $23,681,184 and undistributed net investment income of $2,375,391, respectively) | $ 1,208,539,001 | $ 1,127,273,865 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Initial Class
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.20 | $ 11.76 | $ 11.15 | $ 11.36 | $ 11.11 | $ 8.94 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .216 | .437 | .465 | .511 | .588 | .619 |
Net realized and unrealized gain (loss) | .434 | (.403) | .704 | .013 | .473 | 2.065 |
Total from investment operations | .650 | .034 | 1.169 | .524 | 1.061 | 2.684 |
Distributions from net investment income | - | (.483) | (.425) | (.486) | (.517) | (.439) |
Distributions from net realized gain | - | (.111) | (.134) | (.248) | (.294) | (.075) |
Total distributions | - | (.594) | (.559) | (.734) | (.811) | (.514) |
Net asset value, end of period | $ 11.85 | $ 11.20 | $ 11.76 | $ 11.15 | $ 11.36 | $ 11.11 |
Total Return B, C, D | 5.80% | .29% | 10.50% | 4.66% | 9.64% | 30.02% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .69% A | .68% | .69% | .69% | .71% | .74% |
Expenses net of fee waivers, if any | .69% A | .68% | .69% | .69% | .70% | .74% |
Expenses net of all reductions | .69% A | .68% | .69% | .69% | .70% | .74% |
Net investment income (loss) | 3.79% A | 3.74% | 3.97% | 4.38% | 5.07% | 5.98% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 116,535 | $ 119,063 | $ 164,166 | $ 164,168 | $ 154,861 | $ 166,898 |
Portfolio turnover rate G | 124% A | 141% | 129% | 224% | 208% | 199% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
Financial Highlights - Service Class
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.19 | $ 11.75 | $ 11.14 | $ 11.35 | $ 11.10 | $ 8.92 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .210 | .425 | .453 | .499 | .574 | .594 |
Net realized and unrealized gain (loss) | .430 | (.403) | .704 | .009 | .469 | 2.083 |
Total from investment operations | .640 | .022 | 1.157 | .508 | 1.043 | 2.677 |
Distributions from net investment income | - | (.471) | (.413) | (.470) | (.499) | (.422) |
Distributions from net realized gain | - | (.111) | (.134) | (.248) | (.294) | (.075) |
Total distributions | - | (.582) | (.547) | (.718) | (.793) | (.497) |
Net asset value, end of period | $ 11.83 | $ 11.19 | $ 11.75 | $ 11.14 | $ 11.35 | $ 11.10 |
Total Return B, C, D | 5.72% | .19% | 10.40% | 4.52% | 9.48% | 30.01% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .79% A | .78% | .78% | .80% | .81% | .84% |
Expenses net of fee waivers, if any | .79% A | .78% | .78% | .80% | .81% | .84% |
Expenses net of all reductions | .79% A | .78% | .78% | .80% | .81% | .84% |
Net investment income (loss) | 3.69% A | 3.64% | 3.87% | 4.28% | 4.96% | 5.88% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 885 | $ 837 | $ 975 | $ 883 | $ 1,199 | $ 1,898 |
Portfolio turnover rate G | 124% A | 141% | 129% | 224% | 208% | 199% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class 2
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.14 | $ 11.71 | $ 11.11 | $ 11.33 | $ 11.11 | $ 8.92 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .200 | .404 | .434 | .478 | .560 | .578 |
Net realized and unrealized gain (loss) | .430 | (.400) | .701 | .021 | .457 | 2.087 |
Total from investment operations | .630 | .004 | 1.135 | .499 | 1.017 | 2.665 |
Distributions from net investment income | - | (.463) | (.401) | (.471) | (.503) | (.400) |
Distributions from net realized gain | - | (.111) | (.134) | (.248) | (.294) | (.075) |
Total distributions | - | (.574) | (.535) | (.719) | (.797) | (.475) |
Net asset value, end of period | $ 11.77 | $ 11.14 | $ 11.71 | $ 11.11 | $ 11.33 | $ 11.11 |
Total Return B, C, D | 5.66% | .03% | 10.23% | 4.45% | 9.23% | 29.88% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .94% A | .93% | .94% | .95% | .97% | .99% |
Expenses net of fee waivers, if any | .94% A | .93% | .94% | .94% | .96% | .99% |
Expenses net of all reductions | .94% A | .93% | .94% | .94% | .96% | .99% |
Net investment income (loss) | 3.53% A | 3.49% | 3.72% | 4.13% | 4.81% | 5.72% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 98,658 | $ 68,196 | $ 41,502 | $ 25,652 | $ 7,599 | $ 1,918 |
Portfolio turnover rate G | 124% A | 141% | 129% | 224% | 208% | 199% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
Financial Highlights - Investor Class
| Six months ended
June 30, 2014 | Years ended December 31, |
| (Unaudited) | 2013 | 2012 | 2011 | 2010 | 2009 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.17 | $ 11.73 | $ 11.12 | $ 11.34 | $ 11.09 | $ 8.92 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .214 | .432 | .461 | .506 | .584 | .617 |
Net realized and unrealized gain (loss) | .426 | (.401) | .705 | .005 | .474 | 2.065 |
Total from investment operations | .640 | .031 | 1.166 | .511 | 1.058 | 2.682 |
Distributions from net investment income | - | (.480) | (.422) | (.483) | (.514) | (.437) |
Distributions from net realized gain | - | (.111) | (.134) | (.248) | (.294) | (.075) |
Total distributions | - | (.591) | (.556) | (.731) | (.808) | (.512) |
Net asset value, end of period | $ 11.81 | $ 11.17 | $ 11.73 | $ 11.12 | $ 11.34 | $ 11.09 |
Total Return B, C, D | 5.73% | .27% | 10.50% | 4.55% | 9.63% | 30.06% |
Ratios to Average Net Assets F, H | | | | | | |
Expenses before reductions | .72% A | .72% | .72% | .73% | .74% | .77% |
Expenses net of fee waivers, if any | .72% A | .71% | .72% | .73% | .74% | .77% |
Expenses net of all reductions | .72% A | .71% | .72% | .73% | .74% | .77% |
Net investment income (loss) | 3.75% A | 3.70% | 3.94% | 4.35% | 5.03% | 5.95% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 992,461 | $ 939,177 | $ 1,085,039 | $ 817,192 | $ 628,706 | $ 475,890 |
Portfolio turnover rate G | 124% A | 141% | 129% | 224% | 208% | 199% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2014 (Unaudited)
1. Organization.
VIP Strategic Income Portfolio (the Fund) is a fund of Variable Insurance Products Fund V (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. Shares of the Fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The Fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares and Investor Class shares. All classes have equal rights and voting privileges, except for matters affecting a single class.
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
Based on its investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%. The following summarizes the Fund's investment in each non-money market Fidelity Central Fund.
Fidelity Central Fund | | Investment Manager | | Investment Objective | | Investment Practices | | Expense Ratio* |
Fidelity Floating Rate Central Fund | | FMR Co., Inc. (FMRC) | | Seeks a high level of income by normally investing in floating rate loans and other floating rate securities. | | Delayed Delivery & When Issued Securities Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities | | Less than 0.01% |
* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.
An unaudited holdings listing for each Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through each fund's investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds which contain the significant accounting policies (including investment valuation policies) of those funds are available on the SEC website or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Semiannual Report
3. Significant Accounting Policies - continued
Investment Valuation - continued
Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, bank loan obligations, foreign government and government agency obligations, preferred securities, supranational obligations, U.S. government and government agency obligations and sovereign loan participations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. Collateralized mortgage obligations, commercial mortgage securities and U.S. government agency mortgage securities are valued by pricing vendors who utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. Swaps are marked-to-market daily based on valuations from third party pricing vendors, registered derivatives clearing organizations (clearinghouses) or broker-supplied valuations. These pricing sources may utilize inputs such as interest rate curves, credit spread curves, default possibilities and recovery rates. When independent prices are unavailable or unreliable, debt securities and swaps may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities and swaps are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Options traded over-the-counter are valued using broker-supplied valuations and are categorized as Level 2 in the hierarchy. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of June 30, 2014, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Subsequent to ex-dividend date the Fund determines the components of these distributions, based upon receipt of tax filings or other correspondence relating to the underlying investment. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. The principal amount on inflation-indexed securities is periodically adjusted to the rate of inflation and interest is accrued based on the principal amount. The adjustments to principal due to inflation are reflected as increases or decreases to Interest in the accompanying Statement of Operations. 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 portion of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, swaps, foreign currency transactions, market discount, partnerships (including allocations from Fidelity Central Funds) and losses deferred due to wash sales, futures transactions and excise tax regulations.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 59,400,636 |
Gross unrealized depreciation | (6,225,899) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 53,174,737 |
| |
Tax cost | $ 1,146,249,399 |
Delayed Delivery Transactions and When-Issued Securities. During the period, the Fund transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. The payables and receivables associated with the purchases and sales of delayed delivery securities having the same coupon, settlement date and broker are offset. Delayed delivery or when-issued securities that have been purchased from and sold to different brokers are reflected as both payables and receivables in the fund's Statement of Assets and Liabilities under the caption "Delayed delivery." Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
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 invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation, or may be made directly to a borrower. The Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these loans. The Fund did not have any unfunded loan commitments, which are contractual obligations for future funding, at period end.
Semiannual Report
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts, options and swaps. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns, to gain exposure to certain types of assets and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
Interest Rate Risk | Interest rate risk relates to the fluctuations in the value of interest-bearing securities due to changes in the prevailing levels of market interest rates. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain OTC derivatives such as options, the Fund attempts to reduce its exposure to counterparty credit risk by entering into an International Swaps and Derivatives Association, Inc. (ISDA) Master Agreement with each of its counterparties. The ISDA Master Agreement gives the Fund the right to terminate all transactions traded under such agreement upon the deterioration in the credit quality of the counterparty beyond specified levels. The ISDA Master Agreement gives each party the right, upon an event of default by the other party or a termination of the agreement, to close out all transactions traded under such agreement and to net amounts owed under each transaction to one net payable by one party to the other. To mitigate counterparty credit risk on bi-lateral OTC derivatives, the Fund receives collateral in the form of cash or securities once the Fund's net unrealized appreciation on outstanding derivative contracts under an ISDA Master Agreement exceeds certain applicable thresholds, subject to certain minimum transfer provisions. The collateral received is held in segregated accounts with the Fund's custodian bank in accordance with the collateral agreements entered into between the Fund, the counterparty and the Fund's custodian bank. The Fund could experience delays and costs in gaining access to the collateral even though it is held by the Fund's custodian bank. The Fund's maximum risk of loss from counterparty credit risk related to bi-lateral OTC derivatives is generally the aggregate unrealized appreciation and unpaid counterparty payments in excess of any collateral pledged by the counterparty to the Fund. The Fund may be required to pledge collateral for the benefit of the counterparties on bi-lateral OTC derivatives in an amount not less than each counterparty's unrealized appreciation on outstanding derivative contracts, subject to certain minimum transfer provisions, and any such pledged collateral is identified in the Schedule of Investments. Exchange-traded futures contracts are not covered by the ISDA Master Agreement; however counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange's clearinghouse. Counterparty credit risk related to centrally cleared OTC swaps may be mitigated by the protection provided by the clearinghouse.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Net Realized Gain (Loss) and Change in Net Unrealized Appreciation (Depreciation) on Derivatives. The table below, which reflects the impacts of derivatives on the financial performance of the Fund, summarizes the net realized gain (loss) and change in net unrealized appreciation (depreciation) for derivatives during the period as presented in the Statement of Operations.
Primary Risk Exposure / Derivative Type | Net Realized
Gain (Loss) | Change in Net Unrealized Appreciation (Depreciation) |
Interest Rate Risk | | |
Futures Contracts | $ 447,449 | $ 293,267 |
Purchased Options | - | (7,348) |
Swaps | (318,994) | (301,236) |
Totals (a) | $ 128,455 | $ (15,317) |
(a) A summary of the value of derivatives by primary risk exposure as of period end is included at the end of the Schedule of Investments.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the bond market and fluctuations in interest rates.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Derivative Instruments - continued
Futures Contracts - continued
margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on futures contracts during the period is included in the Statement of Operations.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts." The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end and is representative of volume of activity during the period. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
Options. Options give the purchaser the right, but not the obligation, to buy (call) or sell (put) an underlying security or financial instrument at an agreed exercise or strike price between or on certain dates. Options obligate the seller (writer) to buy (put) or sell (call) an underlying instrument at the exercise or strike price or cash settle an underlying derivative instrument if the holder exercises the option on or before the expiration date. The Fund used OTC options, such as swaptions, which are options where the underlying instrument is a swap, to manage its exposure to fluctuations in interest rates.
Upon entering into an options contract, a fund will pay or receive a premium. Premiums paid on purchased options are reflected as cost of investments and premiums received on written options are reflected as a liability on the Statement of Assets and Liabilities. Certain options may be purchased or written with premiums to be paid or received on a future date. Options are valued daily and any unrealized appreciation (depreciation) is reflected on the Statement of Assets and Liabilities. When an option is exercised, the cost or proceeds of the underlying instrument purchased or sold is adjusted by the amount of the premium. When an option is closed the Fund will realize a gain or loss depending on whether the proceeds or amount paid for the closing sale transaction is greater or less than the premium received or paid. When an option expires, gains and losses are realized to the extent of premiums received and paid, respectively. The net realized and unrealized gains (losses) on purchased options are included on the Statement of Operations in net realized gain (loss) and change in net unrealized appreciation (depreciation) on investment securities. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on written options are reflected separately on the Statement of Operations.
Any open options at period end are presented in the Schedule of Investments under the captions "Purchased Options," "Purchased Swaptions," "Written Options" and "Written Swaptions," as applicable, and are representative of volume of activity during the period.
Writing puts and buying calls tend to increase exposure to the underlying instrument while buying puts and writing calls tend to decrease exposure to the underlying instrument. For purchased options, risk of loss is limited to the premium paid, and for written options, risk of loss is the change in value in excess of the premium received.
Swaps. A swap is a contract between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. A centrally cleared OTC swap is a transaction executed between a fund and a dealer counterparty, then cleared by a futures commission merchant (FCM) through a clearinghouse. Once cleared, the clearinghouse serves as a central counterparty, with whom a fund exchanges cash flows for the life of the transaction, similar to transactions in futures contracts.
Centrally cleared OTC swaps require a fund to deposit either cash or securities (initial margin) with the FCM, at the instruction of and for the benefit of the clearinghouse. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments. Centrally cleared OTC swaps are marked-to-market daily and subsequent payments (variation margin) are made or received depending on the daily fluctuations in the value of the swaps and are recorded as unrealized appreciation or (depreciation). These daily payments, if any, are included in receivable or payable for daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Any premiums for centrally cleared OTC swaps are recorded periodically throughout the term of the swap to variation margin and included in unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. Any premiums are recognized as realized gain (loss) upon termination or maturity of the swap.
Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gain or (loss). Some swaps may be terminated prior to the effective date and realize a gain or loss upon termination. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on swaps during the period is included in the Statement of Operations.
Any open swaps at period end are included in the Schedule of Investments under the caption "Swaps" and are representative of volume of activity during the period.
Interest Rate Swaps. Interest rate swaps are agreements between counterparties to exchange cash flows, one based on a fixed rate, and the other on a floating rate. The Fund entered into interest rate swaps to manage its exposure to interest rate changes. Changes in interest rates can have an effect on both the value of bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.
Semiannual Report
5. Purchases and Sales of Investments.
Purchases and sales of securities (including the Fixed-Income Central Funds), other than short-term securities and U.S. government securities, aggregated $433,312,258 and $388,909,802, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .56% of the Fund's average net assets.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.
For the period, total fees, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services were as follows:
Service Class | $ 430 |
Service Class 2 | 101,782 |
| $ 102,212 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each class. Each class (with the exception of Investor Class) pays a fee for transfer agent services, typesetting, printing and mailing of shareholder reports, excluding mailing of proxy statements and out of pocket expenses, equal to an annual rate of .07% (.10% for Investor Class) of average net assets. For the period, transfer agent fees for each class, including out of pocket expenses, were as follows:
Initial Class | $ 40,390 |
Service Class | 295 |
Service Class 2 | 28,195 |
Investor Class | 484,094 |
| $ 552,974 |
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The fee is based on the level of average net assets for each month.
7. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1,054 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $150 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
June 30,
2014 | Year ended
December 31,
2013 |
From net investment income | | |
Initial Class | $ - | $ 5,053,580 |
Service Class | - | 35,255 |
Service Class 2 | - | 2,666,002 |
Investor Class | - | 38,963,680 |
Total | $ - | $ 46,718,517 |
From net realized gain | | |
Initial Class | $ - | $ 1,204,917 |
Service Class | - | 8,433 |
Service Class 2 | - | 607,316 |
Investor Class | - | 9,182,090 |
Total | $ - | $ 11,002,756 |
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
June 30,
2014 | Year ended
December 31,
2013 | Six months ended
June 30,
2014 | Year ended
December 31,
2013 |
Initial Class | | | | |
Shares sold | 365,034 | 623,949 | $ 4,225,512 | $ 7,325,056 |
Reinvestment of distributions | - | 557,794 | - | 6,258,497 |
Shares redeemed | (1,157,891) | (4,508,150) | (13,235,460) | (52,458,877) |
Net increase (decrease) | (792,857) | (3,326,407) | $ (9,009,948) | $ (38,875,324) |
Service Class | | | | |
Reinvestment of distributions | - | 3,898 | $ - | $ 43,688 |
Shares redeemed | - | (12,042) | - | (139,470) |
Net increase (decrease) | - | (8,144) | $ - | $ (95,782) |
Service Class 2 | | | | |
Shares sold | 2,775,779 | 3,120,590 | $ 31,820,593 | $ 36,207,352 |
Reinvestment of distributions | - | 293,554 | - | 3,273,318 |
Shares redeemed | (513,163) | (835,537) | (5,858,307) | (9,659,462) |
Net increase (decrease) | 2,262,616 | 2,578,607 | $ 25,962,286 | $ 29,821,208 |
Investor Class | | | | |
Shares sold | 3,360,075 | 4,595,613 | $ 38,806,550 | $ 53,868,632 |
Reinvestment of distributions | - | 4,303,289 | - | 48,145,770 |
Shares redeemed | (3,419,442) | (17,295,535) | (38,720,458) | (199,921,858) |
Net increase (decrease) | (59,367) | (8,396,633) | $ 86,092 | $ (97,907,456) |
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
At the end of the period, the investment adviser or its affiliates were the owners of record of 91% of the total outstanding shares of the Fund.
12. Credit Risk.
The Fund's relatively large investment in countries with limited or developing capital markets may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the Fund's investments and the income they generate, as well as the Fund's ability to repatriate such amounts.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Investments Money Management, Inc.
FIL Investments (Japan) Limited
FIL Investment Advisors
FIL Investment Advisors (U.K.) Ltd.
Fidelity Management & Research (U.K.) Inc.
Fidelity Management & Research (Japan) Inc.
Fidelity Management & Research (Hong Kong) Limited
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
State Street Bank and Trust Company
Quincy, MA
VIPSI-SANN-0814
1.803539.110
Fidelity® Variable Insurance Products:
Target Volatility Portfolio
Semiannual Report
June 30, 2014
(Fidelity Cover Art)
Contents
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/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
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. © 2014 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (January 1, 2014 to June 30, 2014).
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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, the Fund, as a shareholder in underlying mutual funds and exchange-traded funds (ETFs)(the Underlying Funds), will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity 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. The estimate of expenses does not include any fees or other expenses of any variable annuity or variable life insurance product. If they were, the estimate of expenses you paid during the period would be higher, and your ending account value would be lower. In addition, the Fund, as a shareholder in underlying mutual funds and exchange-traded funds (ETFs)(the Underlying Funds), will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity 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.
| Annualized
Expense RatioB | Beginning
Account Value
January 1, 2014 | Ending
Account Value
June 30, 2014 | Expenses Paid
During Period*
January 1, 2014
to June 30, 2014 |
Service Class | .26% | | | |
Actual | | $ 1,000.00 | $ 1,051.00 | $ 1.32 |
HypotheticalA | | $ 1,000.00 | $ 1,023.51 | $ 1.30 |
Service Class 2 | .41% | | | |
Actual | | $ 1,000.00 | $ 1,050.20 | $ 2.08 |
HypotheticalA | | $ 1,000.00 | $ 1,022.76 | $ 2.06 |
A 5% return per year before expenses
B Annualized expense ratio reflects expenses net of applicable fee waivers.
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes (Unaudited)
The information in the following tables is based on the direct investments of the Fund. |
Fund Holdings as of June 30, 2014 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Domestic Equity Funds | | |
Fidelity Air Transportation Portfolio | 0.1 | 0.3 |
Fidelity Automotive Portfolio | 0.0* | 0.0* |
Fidelity Banking Portfolio | 1.6 | 1.6 |
Fidelity Biotechnology Portfolio | 0.0 | 0.3 |
Fidelity Blue Chip Growth Fund | 3.5 | 4.0 |
Fidelity Blue Chip Value Fund | 0.5 | 0.0 |
Fidelity Brokerage and Investment Management Portfolio | 0.3 | 0.7 |
Fidelity Chemicals Portfolio | 1.0 | 0.8 |
Fidelity Communications Equipment Portfolio | 0.1 | 0.1 |
Fidelity Computers Portfolio | 0.2 | 0.0 |
Fidelity Consumer Discretionary Portfolio | 1.7 | 0.6 |
Fidelity Consumer Staples Portfolio | 0.6 | 0.7 |
Fidelity Contrafund | 0.0 | 1.8 |
Fidelity Disciplined Equity Fund | 2.0 | 2.9 |
Fidelity Electronics Portfolio | 1.3 | 0.0 |
Fidelity Energy Portfolio | 2.0 | 0.5 |
Fidelity Energy Service Portfolio | 0.6 | 0.1 |
Fidelity Equity-Income Fund | 0.0 | 0.4 |
Fidelity Event Driven Opportunities Fund | 0.1 | 0.0 |
Fidelity Financial Services Portfolio | 1.7 | 0.2 |
Fidelity Gold Portfolio | 0.2 | 0.0 |
Fidelity Growth Discovery Fund | 0.6 | 0.0 |
Fidelity Health Care Portfolio | 2.1 | 1.5 |
Fidelity Independence Fund | 0.9 | 0.0 |
Fidelity Industrial Equipment Portfolio | 0.0 | 0.4 |
Fidelity Industrials Portfolio | 1.5 | 2.1 |
Fidelity Insurance Portfolio | 0.0 | 1.0 |
Fidelity Large Cap Stock Fund | 4.0 | 4.2 |
Fidelity Low-Priced Stock Fund | 0.0 | 2.9 |
Fidelity Materials Portfolio | 0.6 | 0.3 |
Fidelity Medical Equipment & Systems Portfolio | 0.0 | 0.1 |
Fidelity Mega Cap Stock Fund | 4.2 | 2.2 |
Fidelity Mid Cap Value Fund | 0.0 | 0.9 |
Fidelity Multimedia Portfolio | 0.1 | 0.2 |
Fidelity New Millennium Fund | 1.3 | 1.9 |
Fidelity OTC Portfolio | 0.0 | 0.6 |
Fidelity Pharmaceuticals Portfolio | 0.9 | 0.5 |
Fidelity Real Estate Investment Portfolio | 0.4 | 0.0* |
Fidelity Small Cap Enhanced Index Fund | 0.0 | 0.1 |
Fidelity Small Cap Growth Fund | 0.0 | 1.1 |
Fidelity Small Cap Value Fund | 0.1 | 1.1 |
Fidelity Software and Computer Services Portfolio | 0.5 | 1.1 |
Fidelity Stock Selector Large Cap Value Fund | 0.7 | 0.0 |
Fidelity Technology Portfolio | 1.7 | 0.9 |
Fidelity Telecommunications Portfolio | 0.0 | 0.0* |
Fidelity Transportation Portfolio | 1.2 | 0.5 |
Fidelity Utilities Portfolio | 0.7 | 0.0 |
Fidelity Value Discovery Fund | 0.5 | 0.0 |
Fidelity Value Fund | 2.4 | 1.6 |
SPDR S&P 500 ETF | 0.0 | 0.4 |
Vanguard Value ETF | 1.0 | 1.5 |
| 42.9 | 42.1 |
International Equity Funds | | |
Fidelity Diversified International Fund | 2.4 | 1.7 |
Fidelity Emerging Asia Fund | 0.2 | 0.0 |
Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund | 0.0* | 0.0* |
Fidelity Emerging Markets Discovery Fund | 0.0* | 0.0* |
Fidelity Emerging Markets Fund | 0.4 | 0.3 |
|
| % of fund's
net assets | % of fund's net assets
6 months ago |
Fidelity Europe Fund | 3.2 | 3.4 |
Fidelity Europe Capital Appreciation Fund | 0.0 | 0.0* |
Fidelity International Capital Appreciation Fund | 0.5 | 0.0 |
Fidelity International Discovery Fund | 0.8 | 5.6 |
Fidelity International Small Cap Fund | 0.1 | 3.1 |
Fidelity International Small Cap Opportunities Fund | 1.8 | 0.9 |
Fidelity Japan Smaller Companies Fund | 0.5 | 1.5 |
Fidelity Nordic Fund | 2.1 | 1.9 |
Fidelity Overseas Fund | 4.7 | 0.0 |
Fidelity Pacific Basin Fund | 0.0* | 0.0* |
iShares MSCI EAFE Index ETF | 1.5 | 0.9 |
iShares MSCI Taiwan Index ETF | 1.4 | 0.0 |
WisdomTree Japan Hedged Equity ETF | 0.5 | 0.8 |
| 20.1 | 20.1 |
Fixed-Income Funds | | |
Fidelity Conservative Income Bond Fund | 0.1 | 0.3 |
Fidelity Corporate Bond Fund | 7.2 | 5.7 |
Fidelity Floating Rate High Income Fund | 0.1 | 0.4 |
Fidelity High Income Fund | 0.3 | 0.2 |
Fidelity New Markets Income Fund | 0.2 | 0.0 |
Fidelity Real Estate Income Fund | 0.3 | 0.0* |
Fidelity Total Bond Fund | 23.2 | 23.7 |
iShares JPMorgan USD Emerging Markets Bond ETF | 0.6 | 0.0 |
SPDR Lehman High Yield Bond ETF | 0.8 | 1.2 |
| 32.8 | 31.5 |
U.S. Treasury Obligations | | |
U.S. Treasury Bills, yield at date of purchase 0.02% to 0.03% 7/31/14 to 9/18/14 | 0.1 | 0.0 |
U.S. Treasury Bills, yield at date of purchase 0.02% to 0.07% 1/2/14 to 2/27/14 | 0.0 | 0.2 |
| 0.1 | 0.2 |
Net Other Assets (Liabilities) | 4.1 | 6.1 |
| 100.0 | 100.0 |
* Amount represents less than 0.1%.
Asset Allocation (% of fund's net assets) |
As of June 30, 2014 * |
 | Domestic Equity Funds | 42.9% | |
 | International Equity Funds | 20.1% | |
 | Fixed-Income Funds | 32.8% | |
 | Short-Term Investments | 0.1% | |
 | Net Other Assets (Liabilities) | 4.1% | |
As of December 31, 2013 * |
| Domestic Equity Funds | 42.1% | |
| International Equity Funds | 20.1% | |
| Fixed-Income Funds | 31.5% | |
| Short-Term Investments | 0.2% | |
| Net Other Assets (Liabilities) | 6.1% | |
Semiannual Report
Investments June 30, 2014 (Unaudited)
Showing Percentage of Net Assets
Equity Funds - 63.0% |
| Shares | | Value |
Domestic Equity Funds - 42.9% |
Fidelity Air Transportation Portfolio (b) | 1,007 | | $ 65,876 |
Fidelity Automotive Portfolio (b) | 1,047 | | 56,755 |
Fidelity Banking Portfolio (b) | 60,305 | | 1,581,804 |
Fidelity Blue Chip Growth Fund (b) | 50,821 | | 3,451,286 |
Fidelity Blue Chip Value Fund (b) | 30,154 | | 466,782 |
Fidelity Brokerage and Investment Management Portfolio (b) | 4,006 | | 292,661 |
Fidelity Chemicals Portfolio (b) | 6,369 | | 973,699 |
Fidelity Communications Equipment Portfolio (b) | 2,123 | | 68,570 |
Fidelity Computers Portfolio (b) | 2,277 | | 178,127 |
Fidelity Consumer Discretionary Portfolio (b) | 52,570 | | 1,683,306 |
Fidelity Consumer Staples Portfolio (b) | 6,980 | | 648,286 |
Fidelity Disciplined Equity Fund (b) | 57,643 | | 1,971,952 |
Fidelity Electronics Portfolio (b) | 16,997 | | 1,323,385 |
Fidelity Energy Portfolio (b) | 32,181 | | 1,985,540 |
Fidelity Energy Service Portfolio (b) | 6,363 | | 624,969 |
Fidelity Event Driven Opportunities Fund (b) | 9,137 | | 101,601 |
Fidelity Financial Services Portfolio (b) | 19,675 | | 1,657,777 |
Fidelity Gold Portfolio (a)(b) | 9,792 | | 229,920 |
Fidelity Growth Discovery Fund (b) | 27,778 | | 640,849 |
Fidelity Health Care Portfolio (b) | 10,020 | | 2,070,934 |
Fidelity Independence Fund (b) | 22,187 | | 891,257 |
Fidelity Industrials Portfolio (b) | 44,489 | | 1,469,457 |
Fidelity Large Cap Stock Fund (b) | 141,683 | | 3,974,222 |
Fidelity Materials Portfolio (b) | 7,133 | | 628,760 |
Fidelity Mega Cap Stock Fund (b) | 256,895 | | 4,223,349 |
Fidelity Multimedia Portfolio (b) | 1,238 | | 101,422 |
Fidelity New Millennium Fund (b) | 30,057 | | 1,261,202 |
Fidelity Pharmaceuticals Portfolio (b) | 43,318 | | 908,381 |
Fidelity Real Estate Investment Portfolio (b) | 10,108 | | 377,333 |
Fidelity Small Cap Value Fund (b) | 3,749 | | 77,972 |
Fidelity Software and Computer Services Portfolio (b) | 4,015 | | 471,985 |
Fidelity Stock Selector Large Cap Value Fund (b) | 42,952 | | 715,575 |
Fidelity Technology Portfolio (b) | 13,719 | | 1,662,827 |
Fidelity Transportation Portfolio (b) | 14,145 | | 1,175,749 |
Fidelity Utilities Portfolio (b) | 9,258 | | 719,932 |
Fidelity Value Discovery Fund (b) | 23,859 | | 562,123 |
Fidelity Value Fund (b) | 21,141 | | 2,393,196 |
Vanguard Value ETF | 12,442 | | 1,007,180 |
TOTAL DOMESTIC EQUITY FUNDS | | 42,696,001 |
International Equity Funds - 20.1% |
Fidelity Diversified International Fund (b) | 63,321 | | 2,408,732 |
Fidelity Emerging Asia Fund (b) | 4,605 | | 150,482 |
|
| Shares | | Value |
Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund (b) | 101 | | $ 971 |
Fidelity Emerging Markets Discovery Fund (b) | 3,872 | | 49,439 |
Fidelity Emerging Markets Fund (b) | 14,151 | | 364,243 |
Fidelity Europe Fund (b) | 78,022 | | 3,153,631 |
Fidelity International Capital Appreciation Fund (b) | 28,822 | | 503,235 |
Fidelity International Discovery Fund (b) | 18,112 | | 745,839 |
Fidelity International Small Cap Fund (b) | 2,918 | | 80,683 |
Fidelity International Small Cap Opportunities Fund (b) | 122,625 | | 1,828,344 |
Fidelity Japan Smaller Companies Fund (b) | 37,910 | | 516,328 |
Fidelity Nordic Fund (b) | 42,287 | | 2,069,112 |
Fidelity Overseas Fund (b) | 111,430 | | 4,664,442 |
Fidelity Pacific Basin Fund (b) | 493 | | 14,352 |
iShares MSCI EAFE Index ETF | 22,437 | | 1,534,018 |
iShares MSCI Taiwan Index ETF | 90,353 | | 1,427,577 |
WisdomTree Japan Hedged Equity ETF | 9,541 | | 470,944 |
TOTAL INTERNATIONAL EQUITY FUNDS | | 19,982,372 |
TOTAL EQUITY FUNDS (Cost $58,910,431) |
62,678,373
|
Fixed-Income Funds - 32.8% |
| | | |
Fidelity Conservative Income Bond Fund (b) | 13,594 | | 136,483 |
Fidelity Corporate Bond Fund (b) | 622,166 | | 7,123,796 |
Fidelity Floating Rate High Income Fund (b) | 12,538 | | 125,252 |
Fidelity High Income Fund (b) | 27,478 | | 261,040 |
Fidelity New Markets Income Fund (b) | 8,285 | | 139,274 |
Fidelity Real Estate Income Fund (b) | 27,844 | | 332,741 |
Fidelity Total Bond Fund (b) | 2,146,108 | | 23,049,202 |
iShares JPMorgan USD Emerging Markets Bond ETF | 4,793 | | 552,489 |
SPDR Lehman High Yield Bond ETF | 19,202 | | 801,299 |
TOTAL FIXED-INCOME FUNDS (Cost $31,912,412) |
32,521,576
|
U.S. Treasury Obligations - 0.1% |
| Principal Amount | | Value |
U.S. Treasury Bills, yield at date of purchase 0.02% to 0.03% 7/31/14 to 9/18/14 (c)
(Cost $129,994) | | $ 130,000 | | $ 129,996 |
TOTAL INVESTMENT PORTFOLIO - 95.9% (Cost $90,952,837) | | 95,329,945 |
NET OTHER ASSETS (LIABILITIES) - 4.1% | | 4,094,980 |
NET ASSETS - 100% | $ 99,424,925 |
Futures Contracts |
| Expiration
Date | | Underlying
Face Amount
at Value | | Unrealized
Appreciation/
(Depreciation) |
Purchased |
Equity Index Contracts |
23 CME E-mini S&P 500 Index Contracts | Sept. 2014 | | $ 2,245,260 | | $ 33,566 |
3 NYSE E-mini MSCI EAFE Index Contracts | Sept. 2014 | | 295,335 | | 1,330 |
TOTAL EQUITY INDEX CONTRACTS | | $ 2,540,595 | | $ 34,896 |
|
The face value of futures purchased as a percentage of net assets is 2.6% |
Legend |
(a) Non-income producing |
(b) Affiliated Fund |
(c) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $125,996. |
For the period, the average monthly underlying face amount at value for futures contracts in the aggregate was $2,733,448. |
Affiliated Underlying Funds |
Information regarding the Fund's fiscal year to date purchases and sales of the affiliated Underlying Funds and income earned by the Fund from investments in affiliated Underlying Funds is as follows: |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Air Transportation Portfolio | $ 209,440 | $ 65,107 | $ 209,193 | $ - | $ 65,876 |
Fidelity Automotive Portfolio | 31,477 | 26,082 | - | 24 | 56,755 |
Fidelity Banking Portfolio | 1,039,280 | 547,524 | - | 3,994 | 1,581,804 |
Fidelity Biotechnology Portfolio | 159,089 | - | 174,461 | - | - |
Fidelity Blue Chip Growth Fund | 2,499,014 | 728,879 | - | - | 3,451,286 |
Fidelity Blue Chip Value Fund | - | 443,540 | - | - | 466,782 |
Fidelity Brokerage and Investment Management Portfolio | 456,119 | 298,512 | 437,622 | 739 | 292,661 |
Fidelity Chemicals Portfolio | 482,150 | 457,933 | - | 1,369 | 973,699 |
Fidelity Communications Equipment Portfolio | 62,560 | 68 | - | 8 | 68,570 |
Fidelity Computers Portfolio | - | 171,067 | - | - | 178,127 |
Fidelity Conservative Income Bond Fund | 157,790 | 195 | 21,501 | 195 | 136,483 |
Fidelity Consumer Discretionary Portfolio | 400,585 | 1,471,787 | 203,868 | 124 | 1,683,306 |
Fidelity Consumer Staples Portfolio | 413,214 | 219,295 | - | 1,173 | 648,286 |
Fidelity Contrafund | 1,112,860 | 56,443 | 1,160,629 | - | - |
Fidelity Corporate Bond Fund | 3,623,807 | 3,295,556 | 23,165 | 81,864 | 7,123,796 |
Fidelity Disciplined Equity Fund | 1,806,653 | 55,985 | - | - | 1,971,952 |
Fidelity Diversified International Fund | 1,051,203 | 1,882,442 | 573,141 | - | 2,408,732 |
Fidelity Electronics Portfolio | - | 1,241,046 | - | 281 | 1,323,385 |
Fidelity Emerging Asia Fund | - | 144,035 | - | - | 150,482 |
Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund | 932 | - | - | - | 971 |
Fidelity Emerging Markets Discovery Fund | 33,135 | 13,519 | - | - | 49,439 |
Fidelity Emerging Markets Fund | 160,167 | 185,323 | - | - | 364,243 |
Fidelity Energy Portfolio | 289,435 | 1,967,837 | 463,953 | 2,581 | 1,985,540 |
Affiliate | Value,
beginning of
period | Purchases | Sales
Proceeds | Dividend
Income | Value,
end of
period |
Fidelity Energy Service Portfolio | $ 88,968 | $ 462,537 | $ - | $ 90 | $ 624,969 |
Fidelity Equity-Income Fund | 270,886 | 419,170 | 698,810 | 715 | - |
Fidelity Europe Capital Appreciation Fund | 5,696 | - | 5,795 | - | - |
Fidelity Europe Fund | 2,183,567 | 2,282,604 | 1,469,075 | - | 3,153,631 |
Fidelity Event Driven Opportunities Fund | - | 100,606 | - | - | 101,601 |
Fidelity Financial Services Portfolio | 102,376 | 1,502,338 | - | 1,842 | 1,657,777 |
Fidelity Floating Rate High Income Fund | 240,294 | 3,705 | 119,238 | 3,694 | 125,252 |
Fidelity Gold Portfolio | - | 337,414 | 121,172 | - | 229,920 |
Fidelity Growth Discovery Fund | - | 1,158,524 | 560,306 | - | 640,849 |
Fidelity Health Care Portfolio | 961,354 | 1,903,035 | 942,055 | - | 2,070,934 |
Fidelity High Income Fund | 147,660 | 110,464 | - | 5,735 | 261,040 |
Fidelity Independence Fund | - | 880,165 | - | - | 891,257 |
Fidelity Industrial Equipment Portfolio | 262,007 | 22,055 | 267,625 | 583 | - |
Fidelity Industrials Portfolio | 1,343,952 | 1,025,268 | 888,370 | 2,129 | 1,469,457 |
Fidelity Insurance Portfolio | 636,498 | - | 615,551 | - | - |
Fidelity International Capital Appreciation Fund | - | 480,345 | - | - | 503,235 |
Fidelity International Discovery Fund | 3,532,493 | 152,927 | 2,887,310 | - | 745,839 |
Fidelity International Small Cap Fund | 1,948,358 | 21,040 | 1,881,898 | - | 80,683 |
Fidelity International Small Cap Opportunities Fund | 541,201 | 1,398,510 | 196,706 | - | 1,828,344 |
Fidelity IT Services Portfolio | - | 63,682 | 62,140 | - | - |
Fidelity Japan Smaller Companies Fund | 961,008 | - | 415,291 | - | 516,328 |
Fidelity Large Cap Stock Fund | 2,648,195 | 1,456,762 | 228,536 | 12,399 | 3,974,222 |
Fidelity Low-Priced Stock Fund | 1,813,267 | 10,649 | 1,844,255 | - | - |
Fidelity Materials Portfolio | 181,107 | 426,705 | - | 277 | 628,760 |
Fidelity Medical Equipment and Systems Portfolio | 76,837 | - | 81,890 | - | - |
Fidelity Mega Cap Stock Fund | 1,423,614 | 3,213,364 | 642,565 | - | 4,223,349 |
Fidelity Mid Cap Value Fund | 579,054 | - | 561,375 | - | - |
Fidelity Multimedia Portfolio | 98,463 | 1,653 | - | 7 | 101,422 |
Fidelity New Markets Income Fund | - | 136,467 | - | 678 | 139,274 |
Fidelity New Millennium Fund | 1,177,807 | 1,905,294 | 1,924,160 | - | 1,261,202 |
Fidelity Nordic Fund | 1,224,918 | 711,127 | - | - | 2,069,112 |
Fidelity OTC Portfolio | 405,892 | 387,793 | 771,047 | - | - |
Fidelity Overseas Fund | - | 4,497,078 | - | - | 4,664,442 |
Fidelity Pacific Basin Fund | 13,632 | - | - | - | 14,352 |
Fidelity Pharmaceuticals Portfolio | 330,992 | 517,663 | - | 1,482 | 908,381 |
Fidelity Real Estate Income Fund | 1,485 | 327,773 | - | 3,395 | 332,741 |
Fidelity Real Estate Investment Portfolio | 4,418 | 364,335 | - | 1,560 | 377,333 |
Fidelity Small Cap Enhanced Index Fund | 58,106 | - | 58,884 | - | - |
Fidelity Small Cap Growth Fund | 701,386 | - | 659,409 | - | - |
Fidelity Small Cap Value Fund | 722,853 | - | 640,693 | - | 77,972 |
Fidelity Software and Computer Services Portfolio | 692,186 | 686,094 | 893,502 | - | 471,985 |
Fidelity Stock Selector Large Cap Value Fund | - | 701,372 | - | - | 715,575 |
Fidelity Technology Portfolio | 582,773 | 1,379,654 | 289,153 | - | 1,662,827 |
Fidelity Telecommunications Portfolio | 5,918 | - | 5,717 | - | - |
Fidelity Total Bond Fund | 14,965,343 | 8,661,227 | 1,085,230 | 262,280 | 23,049,202 |
Fidelity Transportation Portfolio | 304,946 | 1,161,912 | 324,012 | 1,672 | 1,175,749 |
Fidelity Utilities Portfolio | - | 714,322 | - | - | 719,932 |
Fidelity Value Discovery Fund | - | 555,916 | - | - | 562,123 |
Fidelity Value Fund | 1,027,270 | 1,187,809 | - | - | 2,393,196 |
Total | $ 56,255,690 | $ 54,601,533 | $ 24,409,303 | $ 390,890 | $ 89,406,442 |
Other Information |
The following is a summary of the inputs used, as of June 30, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | | | | |
Equity Funds | $ 64,032,161 | $ 64,032,161 | $ - | $ - |
Fixed-Income Funds | 31,167,788 | 31,167,788 | - | - |
Other Short-Term Investments and Net Other Assets | 129,996 | - | 129,996 | - |
Total Investments in Securities: | $ 95,329,945 | $ 95,199,949 | $ 129,996 | $ - |
Derivative Instruments: | | | | |
Assets | | | | |
Futures Contracts | $ 34,896 | $ 34,896 | $ - | $ - |
Value of Derivative Instruments |
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of June 30, 2014. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements. |
Primary Risk Exposure /
Derivative Type | Value |
| Asset | Liability |
Equity Risk | | |
Futures Contracts (a) | $ 34,896 | $ - |
Total Value of Derivatives | $ 34,896 | $ - |
(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Schedule of Investments. Only the period end receivable or payable for daily variation margin and net unrealized appreciation (depreciation) are presented in the Statement of Assets and Liabilities. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities
| June 30, 2014 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $5,760,806) | $ 5,923,503 | |
Affiliated underlying funds (cost $85,192,031) | 89,406,442 | |
Total Investments (cost $90,952,837) | | $ 95,329,945 |
Cash | | 5,060,947 |
Receivable for investments sold | | 216,489 |
Receivable for fund shares sold | | 796,139 |
Dividends receivable | | 13,604 |
Receivable for daily variation margin for derivative instruments | | 685 |
Other receivables | | 145 |
Total assets | | 101,417,954 |
| | |
Liabilities | | |
Payable for investments purchased | $ 1,944,908 | |
Payable for fund shares redeemed | 16,207 | |
Accrued management fee | 19,839 | |
Distribution and service plan fees payable | 11,541 | |
Other affiliated payables | 534 | |
Total liabilities | | 1,993,029 |
| | |
Net Assets | | $ 99,424,925 |
Net Assets consist of: | | |
Paid in capital | | $ 93,612,780 |
Undistributed net investment income | | 273,324 |
Accumulated undistributed net realized gain (loss) on investments | | 1,126,817 |
Net unrealized appreciation (depreciation) on investments | | 4,412,004 |
Net Assets | | $ 99,424,925 |
Statement of Assets and Liabilities - continued
| June 30, 2014 (Unaudited) |
| | |
Service Class:
Net Asset Value, offering price and redemption price per share ($2,907,618 ÷ 250,318 shares) | | $ 11.62 |
| | |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($96,517,307 ÷ 8,323,929 shares) | | $ 11.60 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Six months ended June 30, 2014 (Unaudited) |
| | |
Investment Income | | |
Dividends from underlying funds: | | |
Unaffiliated | | $ 50,694 |
Affiliated | | 390,890 |
Interest | | 887 |
Total income | | 442,471 |
| | |
Expenses | | |
Management fee | $ 117,664 | |
Transfer agent fees | 3,788 | |
Distribution and service plan fees | 96,101 | |
Independent trustees' compensation | 139 | |
Miscellaneous | 1 | |
Total expenses before reductions | 217,693 | |
Expense reductions | (59,721) | 157,972 |
Net investment income (loss) | | 284,499 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Sale of underlying fund shares: | | |
Unaffiliated | 104,251 | |
Affiliated | 323,338 | |
Realized gain distributions from underlying funds: | | |
Affiliated | 599,980 | |
Futures contracts | 221,472 | |
Total net realized gain (loss) | | 1,249,041 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 2,695,630 | |
Futures contracts | (70,468) | |
Total change in net unrealized appreciation (depreciation) | | 2,625,162 |
Net gain (loss) | | 3,874,203 |
Net increase (decrease) in net assets resulting from operations | | $ 4,158,702 |
Statement of Changes in Net Assets
| Six months ended
June 30, 2014
(Unaudited) | For the period
February 13, 2013
(commencement of
operations) to
December 31, 2013 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 284,499 | $ 385,632 |
Net realized gain (loss) | 1,249,041 | 1,683,607 |
Change in net unrealized appreciation (depreciation) | 2,625,162 | 1,786,842 |
Net increase (decrease) in net assets resulting from operations | 4,158,702 | 3,856,081 |
Distributions to shareholders from net investment income | (24,640) | (372,167) |
Distributions to shareholders from net realized gain | (806,959) | (998,871) |
Total distributions | (831,599) | (1,371,038) |
Share transactions - net increase (decrease) | 32,844,945 | 60,767,834 |
Total increase (decrease) in net assets | 36,172,048 | 63,252,877 |
| | |
Net Assets | | |
Beginning of period | 63,252,877 | - |
End of period (including undistributed net investment income of $273,324 and undistributed net investment income of $13,465, respectively) | $ 99,424,925 | $ 63,252,877 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Service Class
| Six months ended
June 30, 2014 | Years ended
December 31, |
| (Unaudited) | 2013 F |
Selected Per-Share Data | | |
Net asset value, beginning of period | $ 11.19 | $ 10.00 |
Income from Investment Operations | | |
Net investment income (loss) E | .05 | .19 |
Net realized and unrealized gain (loss) | .52 | 1.26 |
Total from investment operations | .57 | 1.45 |
Distributions from net investment income | - H | (.07) |
Distributions from net realized gain | (.13) | (.18) |
Total distributions | (.14) I | (.26) J |
Net asset value, end of period | $ 11.62 | $ 11.19 |
Total ReturnB, C, D | 5.10% | 14.46% |
Ratios to Average Net Assets G, K | | |
Expenses before reductions | .41% A | .42% A |
Expenses net of fee waivers, if any | .26% A | .26% A |
Expenses net of all reductions | .26% A | .26% A |
Net investment income (loss) | .87% A | 1.98% A |
Supplemental Data | | |
Net assets, end of period (000 omitted) | $ 2,908 | $ 2,802 |
Portfolio turnover rateK | 68% A | 91% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F For the period February 13, 2013 (commencement of operations) to December 31, 2013.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
H Amount represents less than $.01 per share.
I Total distributions of $.14 per share is comprised of distributions from net investment income of $.004 and distributions from net realized gain of $.131 per share.
J Total distributions of $.26 per share is comprised of distributions from net investment income of $.072 and distributions from net realized gain of $.183 per share.
K Amounts do not include the activity of the Underlying Funds.
Financial Highlights - Service Class 2
| Six months ended
June 30, 2014 | Years ended
December 31, |
| (Unaudited) | 2013 F |
Selected Per-Share Data | | |
Net asset value, beginning of period | $ 11.18 | $ 10.00 |
Income from Investment Operations | | |
Net investment income (loss) E | .04 | .17 |
Net realized and unrealized gain (loss) | .52 | 1.26 |
Total from investment operations | .56 | 1.43 |
Distributions from net investment income | - H | (.07) |
Distributions from net realized gain | (.13) | (.18) |
Total distributions | (.14) I | (.25) |
Net asset value, end of period | $ 11.60 | $ 11.18 |
Total ReturnB, C, D | 5.02% | 14.32% |
Ratios to Average Net Assets G, J | | |
Expenses before reductions | .56% A | .56% A |
Expenses net of fee waivers, if any | .41% A | .41% A |
Expenses net of all reductions | .41% A | .40% A |
Net investment income (loss) | .72% A | 1.83% A |
Supplemental Data | | |
Net assets, end of period (000 omitted) | $ 96,517 | $ 60,451 |
Portfolio turnover rateJ | 68% A | 91% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Calculated based on average shares outstanding during the period.
F For the period February 13, 2013 (commencement of operations) to December 31, 2013.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. 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.
H Amount represents less than $.01 per share.
I Total distributions of $.14 per share is comprised of distributions from net investment income of $.004 and distributions from net realized gain of $.131 per share.
J Amounts do not include the activity of the Underlying Funds.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2014 (Unaudited)
1. Organization.
VIP Target Volatility Portfolio (the Fund) is a fund of Variable Insurance Products Fund V (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. Shares of the Fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The Fund offers the following classes of shares: Service Class shares and Service Class 2 shares. All classes have equal rights and voting privileges, except for matters affecting a single class.
2. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The Fund's Schedule of Investments lists each underlying mutual fund and exchange-traded fund (ETF)(the Underlying Funds) as an investment of the Fund but does not include the underlying holdings of each Underlying Fund. The following summarizes the significant accounting policies of the Fund:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses a third party pricing vendor approved by the Board of Trustees (the Board) to value its investments. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Strategic Advisers, Inc. (Strategic Advisers) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Valuation techniques used to value the Fund's investments by major category are as follows. Investments in open-end mutual funds are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy. If an unaffiliated open-end mutual fund's NAV is unavailable, shares of that fund may be valued by another method that the Board believes reflects fair value in accordance with the Board's fair value pricing policies and is categorized as Level 2 in the hierarchy. Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or brokers who make markets in such securities. For U.S. government and government agency obligations, pricing vendors utilize matrix pricing which considers yield of price of bonds of comparable quality, coupon, maturity and type as well as broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. ETFs are valued at their last sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day but the exchange reports a closing bid level, ETFs are valued at the closing bid and would be categorized as Level 1 in the hierarchy. In the event there was no closing bid, ETFs may be valued by another method that the Board believes reflects fair value in accordance with the Board's fair value pricing policies and may be categorized as Level 2 in the hierarchy.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded and are categorized as Level 1 in the hierarchy.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of June 30, 2014, is included at the end of the Fund's Schedule of Investments.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Income and capital gain distributions from the Underlying Funds, if any, are recorded on the ex-dividend date. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Significant Accounting Policies - continued
Class Allocations and Expenses - continued
also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expenses included in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses associated with the Underlying Funds. Although not included in the Fund's expenses, the Fund indirectly bears its proportionate share of the Underlying Funds' expenses through the impact of these expenses on each Underlying Fund's NAV. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.
Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to the short-term gain distributions from the Underlying Funds, futures contracts and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 4,414,376 |
Gross unrealized depreciation | (88,727) |
Net unrealized appreciation (depreciation) on securities and other investments | $ 4,325,649 |
| |
Tax cost | $ 91,004,296 |
3. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment. |
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Semiannual Report
3. Derivative Instruments - continued
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts." The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
During the period the Fund recognized net realized gain (loss) of $221,472 and a change in net unrealized appreciation (depreciation) of $(70,468) related to its investment in futures contracts. These amounts are included in the Statement of Operations.
4. Purchases and Redemptions of Underlying Fund Shares.
Purchases and redemptions of the Underlying Fund shares aggregated $58,388,803 and $25,551,464, respectively.
5. Fees and Other Transactions with Affiliates.
Management Fee. Strategic Advisers, Inc. (the investment adviser), an affiliate of Fidelity Management & Research Company (FMR), provides the Fund with investment management related services. For these services the Fund pays a monthly management fee to the investment adviser. The management fee is computed at an annual rate of .30% of the Fund's average net assets.
During the period, the investment adviser waived a portion of its management fee as described in the Expense Reductions note.
Other Transactions. The investment adviser has entered into an administration agreement with FMR under which FMR provides management and administrative services (other than investment advisory services) necessary for the operation of the Fund. Pursuant to this agreement, FMR pays all expenses of the Fund, excluding distribution and service fees, transfer agent fees, compensation of the independent Trustees and certain other expenses such as interest expense. FMR also contracts with other Fidelity companies to perform the services necessary for the operation of the Fund.
Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.
For the period, total fees, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services were as follows:
Service Class | $ 1,409 |
Service Class 2 | 94,692 |
| $ 96,101 |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each class. Each class pays a fee for transfer agent services, typesetting, printing and mailing of shareholder reports, excluding mailing of proxy statements and out of pocket expenses, equal to an annual rate of .15% of average net assets invested in Underlying Funds that are not managed by the investment adviser or its affiliates. For the period, transfer agent fees for each class, including out of pocket expenses, were as follows:
Service Class | $ 136 |
Service Class 2 | 3,652 |
| $ 3,788 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $1 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Expense Reductions.
The investment adviser contractually agreed to waive the Fund's management fee in an amount equal to .05% of the Funds' average net assets until April 30, 2015. During the period, the Fund's management fee was reduced by $19,643.
In addition, FMR has contractually agreed to reimburse .10% of class-level expenses for Service Class and Service Class 2. During the period, this reimbursement reduced the Fund's Service Class and Service Class 2's expenses by the following amounts:
| Reimbursement |
Service Class | $ 1,409 |
Service Class 2 | 37,993 |
Total | $ 39,402 |
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $607 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $69.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
June 30, 2014 | Year ended
December 31, 2013A |
From net investment income | | |
Service Class | $ 1,001 | $ 18,021 |
Service Class 2 | 23,639 | 354,146 |
Total | $ 24,640 | $ 372,167 |
From net realized gain | | |
Service Class | 32,790 | 45,803 |
Service Class 2 | 774,169 | 953,068 |
Total | $ 806,959 | $ 998,871 |
A For the period February 13, 2013 (commencement of operations) to December 31, 2013.
9. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
June 30, 2014 | Year ended
December 31, 2013 A | Six months ended
June 30, 2014 | Year ended
December 31, 2013 A |
Service Class | | | | |
Shares sold | 29 | 250,295 | $ 321 | $ 2,503,060 |
Reinvestment of distributions | 3,039 | 5,724 | 33,791 | 63,824 |
Shares redeemed | (3,051) | (5,718) | (33,923) | (63,869) |
Net increase (decrease) | 17 | 250,301 | $ 189 | $ 2,503,015 |
Service Class 2 | | | | |
Shares sold | 3,269,326 | 5,531,253 | $ 36,800,534 | $ 59,610,791 |
Reinvestment of distributions | 71,875 | 117,344 | 797,808 | 1,307,214 |
Shares redeemed | (422,445) | (243,424) | (4,753,586) | (2,653,186) |
Net increase (decrease) | 2,918,756 | 5,405,173 | $ 32,844,756 | $ 58,264,819 |
A For the period February 13, 2013 (commencement of operations) to December 31, 2013.
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, one otherwise unaffiliated shareholder was the owner of record of 89% of the total outstanding shares of the Fund.
Semiannual Report
Investment Adviser
Strategic Advisers, Inc.
Boston, MA
General Distributor
Fidelity Distributors Corporation
Smithfield, RI
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Bank of New York Mellon
New York, NY
Administrator
Fidelity Management & Research Company
Boston, MA
VIPTV-SANN-0814
1.955018.101
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 Variable Insurance Products Fund V's Board of Trustees.
Item 11. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Variable Insurance Products Fund V's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
Item 12. Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Variable Insurance Products Fund V
By: | /s/Stephanie J. Dorsey |
| Stephanie J. Dorsey |
| President and Treasurer |
| |
Date: | August 25, 2014 |
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/Stephanie J. Dorsey |
| Stephanie J. Dorsey |
| President and Treasurer |
| |
Date: | August 25, 2014 |
By: | /s/Howard J. Galligan III |
| Howard J. Galligan III |
| Chief Financial Officer |
| |
Date: | August 25, 2014 |
