Fidelity U.S. Dividend Registered Fund

Transcription

1 Fidelity U.S. Dividend Registered Fund Semi-Annual Report December 31, 2016 Notice to Readers The accompanying interim financial statements have not been reviewed by the external auditor of the Fund. The external auditor will be auditing the annual financial statements of the Fund in accordance with Canadian generally accepted auditing standards.

2 Fidelity U.S. Dividend Registered Fund Schedule of Investments December 31, 2016 (Unaudited) Showing Percentage of Net Assets Attributable to Holders of Redeemable Securities (Net Assets) Equities 97.4% Shares / Units Cost Market Value Bailiwick of Jersey 0.1% CONSUMER DISCRETIONARY 0.1% Delphi Automotive PLC 6,700 $ 611 $ 606 Curacao 0.5% ENERGY 0.5% Schlumberger Ltd. 20,100 2,032 2,266 Ireland 1.9% HEALTH CARE 1.4% Medtronic PLC 61,693 5,957 5,900 INDUSTRIALS 0.5% Eaton Corp. PLC 25,001 1,966 2,252 TOTAL IRELAND 7,923 8,152 Israel 0.5% HEALTH CARE 0.5% Teva Pharmaceutical Industries Ltd. sponsored ADR 45,500 3,114 2,215 Netherlands 1.0% CONSUMER DISCRETIONARY 0.2% Fiat Chrysler Automobiles NV 56, CONSUMER STAPLES 0.2% Unilever NV (NY Reg.) 16, MATERIALS 0.6% LyondellBasell Industries NV Class A 21,000 2,293 2,419 TOTAL NETHERLANDS 3,828 4,015 Switzerland 2.6% FINANCIALS 2.3% Chubb Ltd. 55,273 7,754 9,805 INFORMATION TECHNOLOGY 0.3% TE Connectivity Ltd. 10, TOTAL SWITZERLAND 8,491 10,800 United Kingdom 0.1% HEALTH CARE 0.1% GlaxoSmithKline PLC 7, United States of America 90.7% CONSUMER DISCRETIONARY 8.7% Bed Bath & Beyond, Inc. 3, Comcast Corp. Class A 92,562 6,617 8,581 Dunkin Brands Group, Inc. 46,800 2,836 3,295 Foot Locker, Inc. 13, ,275 General Motors Co. 127,500 5,577 5,964 GNC Holdings, Inc. 21,400 1, Kohl s Corp. 31,750 1,818 2,105 L Brands, Inc. 5, M.D.C. Holdings, Inc. 39,480 1,201 1,360 Macy s, Inc. 39,400 2,475 1,894 Shares / Units Cost Market Value Mattel, Inc. 51,600 $ 1,734 $ 1,909 Polaris Industries, Inc. 9,100 1,032 1,007 Stage Stores, Inc. 55, Target Corp. 35,118 2,687 3,406 The Walt Disney Co. 9,000 1,269 1,259 Time Warner, Inc. 16,200 1,636 2,100 Tupperware Brands Corp. 11, Williams Sonoma, Inc. 5, TOTAL CONSUMER DISCRETIONARY 33,867 36,698 CONSUMER STAPLES 9.0% B&G Foods, Inc. Class A 24,000 1,098 1,411 CVS Health Corp. 52,010 5,510 5,510 Kimberly Clark Corp. 6,600 1,037 1,011 Kroger Co. 10, Molson Coors Brewing Co. Class B 8, ,098 Procter & Gamble Co. 108,955 10,484 12,300 Reynolds American, Inc. 11, The Coca Cola Co. 41,500 2,273 2,310 The Hain Celestial Group, Inc. 6, The Hershey Co. 10,800 1,271 1,500 The J.M. Smucker Co. 1, Wal Mart Stores, Inc. 51,181 4,605 4,750 Walgreens Boots Alliance, Inc. 44,447 4,035 4,939 Whole Foods Market, Inc. 24,100 1, TOTAL CONSUMER STAPLES 34,036 37,705 ENERGY 10.7% Anadarko Petroleum Corp. 27,700 2,382 2,593 Apache Corp. 27,096 2,170 2,309 Baker Hughes, Inc. 14, ,221 Chevron Corp. 78,185 9,803 12,356 ConocoPhillips Co. 90,700 5,156 6,106 CONSOL Energy, Inc. 22, Halliburton Co. 16, ,177 Kinder Morgan, Inc. 145,300 4,567 4,040 Oceaneering International, Inc. 5, The Williams Companies, Inc. 347,069 12,526 14,511 TOTAL ENERGY 39,187 45,059 FINANCIALS 23.7% Agnc Investment Corp. 8, American International Group, Inc. 2, Annaly Capital Management, Inc. 18, Ares Capital Corp. 36, Bank of America Corp. 291,300 5,998 8,644 Comerica, Inc. 31,323 1,736 2,864 Huntington Bancshares, Inc. 17, JPMorgan Chase & Co. 186,888 12,425 21,655 KeyCorp 140,092 2,274 3,436 M&T Bank Corp. 43,891 6,098 9,218 Marsh & McLennan Companies, Inc. 12, ,116 MetLife, Inc. 104,350 5,847 7,550 Morgan Stanley 120,444 4,289 6,832 See accompanying notes which are an integral part of the financial statements. Semi-Annual Reportport 2

3 Equities continued Shares / Units Cost Market Value United States of America continued FINANCIALS continued Prosperity Bancshares, Inc. 2,100 $ 118 $ 202 Prudential Financial, Inc. 27,989 2,636 3,911 Radian Group, Inc. 16, Regions Financial Corp. 171,500 2,092 3,307 State Street Corp. 58,200 5,203 6,073 SunTrust Banks, Inc. 46,300 2,205 3,410 TPG Specialty Lending, Inc. 15, U.S. Bancorp 133,252 6,570 9,191 Virtu Financial, Inc. Class A 9, Wells Fargo & Co. 126,493 7,022 9,360 TOTAL FINANCIALS 67,761 99,536 HEALTH CARE 6.6% AmerisourceBergen Corp. 1, Amgen, Inc. 18,251 3,267 3,583 Anthem, Inc. 1, Bristol Myers Squibb Co. 16,600 1,295 1,303 Dentsply Sirona, Inc. 15, ,186 Gilead Sciences, Inc. 27,900 3,342 2,683 Johnson & Johnson 77,795 9,173 12,034 McKesson Corp. 1, Merck & Co., Inc. 29,900 2,190 2,363 Pfizer, Inc. 87,156 3,365 3,801 TOTAL HEALTH CARE 24,377 27,701 INDUSTRIALS 9.9% Allegiant Travel Co Allison Transmission Holdings, Inc. 9, AMETEK, Inc. 6, C.H. Robinson Worldwide, Inc. 5, Emerson Electric Co. 3, General Dynamics Corp. 15,800 3,027 3,663 General Electric Co. 323,736 9,993 13,735 KAR Auction Services, Inc. 30,900 1,256 1,768 Raytheon Co. 10,200 1,534 1,945 Regal Beloit Corp. 7, The Boeing Co. 9,200 1,463 1,923 United Parcel Service, Inc. Class B 48,700 5,653 7,496 United Technologies Corp. 60,231 7,424 8,865 TOTAL INDUSTRIALS 32,359 41,810 INFORMATION TECHNOLOGY 9.8% Apple, Inc. 26,600 4,076 4,136 Cisco Systems, Inc. 352,759 11,510 14,313 Dell Technologies, Inc. 18,435 1,072 1,361 First Data Corp. Class A 137,800 2,693 2,625 KLA Tencor Corp. 1, Maxim Integrated Products, Inc. 23, ,233 Microsoft Corp. 51,960 2,610 4,335 Paychex, Inc. 49,299 2,513 4,030 Qualcomm, Inc. 88,900 7,197 7,782 See accompanying notes which are an integral part of the financial statements. Shares / Units Cost Market Value Sabre Corp. 31,600 $ 1,116 $ 1,059 SS&C Technologies Holdings, Inc. 8, TOTAL INFORMATION TECHNOLOGY 34,299 41,394 MATERIALS 1.6% CF Industries Holdings, Inc. 25, ,082 The Dow Chemical Co. 39,300 2,582 3,019 WestRock Co. 36,300 2,374 2,474 TOTAL MATERIALS 5,851 6,575 REAL ESTATE 1.9% American Tower Corp. 5, Cousins Properties, Inc. 50, Crown Castle International Corp. 14,800 1,603 1,724 Duke Realty LP 22, First Potomac Realty Trust 50, Piedmont Office Realty Trust, Inc. Class A 39, ,115 Public Storage 4,100 1,185 1,230 Sabra Health Care REIT, Inc. 12, Ventas, Inc. 7, TOTAL REAL ESTATE 7,274 8,109 TELECOMMUNICATION SERVICES 3.6% AT&T, Inc. 108,256 4,363 6,182 Verizon Communications, Inc. 124,938 7,223 8,954 TOTAL TELECOMMUNICATION SERVICES 11,586 15,136 UTILITIES 5.2% American Electric Power Co., Inc. 17,000 1,114 1,437 CenterPoint Energy, Inc. 34, ,155 Duke Energy Corp. 11,300 1,143 1,178 Entergy Corp. 20,600 1,940 2,032 Exelon Corp. 135,500 5,602 6,457 PPL Corp. 61,300 2,682 2,802 Public Service Enterprise Group, Inc. 14, Southern Co. 76,176 4,062 5,031 Xcel Energy, Inc. 15, TOTAL UTILITIES 18,927 21,771 TOTAL UNITED STATES OF AMERICA 309, ,494 TOTAL EQUITIES 335, ,752 Bonds 0.7% Principal Amount Cost Market Value Luxembourg 0.1% Altice SA 7.625% 2/15/ USD $ 418 $ 472 Marshall Islands 0.1% Scorpio Tankers, Inc % 7/1/ USD United States of America 0.5% H.J. Heinz Co % 2/15/ USD Semi-Annual Report

4 Fidelity U.S. Dividend Registered Fund Schedule of Investments (Unaudited) continued Bonds continued Principal Amount Cost Market Value United States of America continued HCA Holdings, Inc. 4.25% 10/15/ USD $ 436 $ 468 Intel Corp. 3.25% 8/1/ USD InterDigital, Inc. 1.5% 3/1/ USD Vector Group Ltd. 7.75% 2/15/ USD TOTAL UNITED STATES OF AMERICA 1,956 2,226 TOTAL BONDS 2,790 3,040 TOTAL INVESTMENT PORTFOLIO 98.1% $338, ,792 NET OTHER ASSETS (LIABILITIES) 1.9% 8,064 NET ASSETS 100% $ 420,856 Currency Abbreviations USD U.S. dollar Presentation Notes Cost amount includes broker commissions and other trading expenses, if any. Investment Valuation The following is a summary of the inputs used, as of December 31, 2016 and June 30, 2016, involving the Fund s assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements. Valuation Inputs at December 31, 2016: Description Total Level 1 Level 2 Level 3 (Amounts in thousands) Investments in Securities: Equities: Consumer Discretionary $ 37,996 $ 37,996 $ $ Consumer Staples 38,609 38,609 Energy 47,325 47,325 Financials 109, ,341 Health Care 36,020 35, Industrials 44,062 44,062 Information Technology 42,389 42,389 Materials 8,994 8,994 Real Estate 8,109 8,109 Telecommunication Services 15,136 15,136 Utilities 21,771 21,771 Bonds 3,040 3,040 Total Investments in Securities: $412,792 $409,548 $3,244 $ Valuation Inputs at June 30, 2016: Description Total Level 1 Level 2 Level 3 (Amounts in thousands) Investments in Securities: Equities: Consumer Discretionary $ 26,916 $ 26,916 $ $ See accompanying notes which are an integral part of the financial statements. Semi-Annual Reportport 4

5 Valuation Inputs at June 30, 2016: Description Total Level 1 Level 2 Level 3 (Amounts in thousands) Consumer Staples $ 38,278 $ 38,278 $ $ Energy 42,785 42,785 Financials 90,657 90,657 Health Care 40,836 40,836 Industrials 44,739 44,739 Information Technology 41,424 41,424 Materials 5,603 5,603 Telecommunication Services 16,219 16,219 Utilities 21,933 21,933 Bonds 3,142 3,142 Total Investments in Securities: $372,532 $369,390 $3,142 $ See accompanying notes which are an integral part of the financial statements. 5 Semi-Annual Report

6 Financial Statements (Unaudited) Statements of Financial Position Amounts in thousands of Canadian Dollars /thousands of securities (except per security amounts) As at December 31, 2016 June 30, 2016 Assets (Note 3) Current assets Investments at fair value through profit or loss (Note 8) $ 412,792 $ 372,532 Cash 7, Receivable for investments sold 362 Other receivables 6 4 Accrued interest and dividends receivable Subscriptions receivable , ,770 Liabilities (Note 3) Current liabilities Payable for investments purchased 145 Redemptions payable Management and advisory fees payable (Note 4) Other payables to affiliates (Note 4) Other payables and accrued expenses (Note 4) ,335 1,444 Net assets attributable to holders of redeemable securities (Notes 3 and 6) $ 420,856 $ 372,326 Net assets attributable to holders of redeemable securities per Series and per security (Note 6) Series A: ($122,982 / 7,637 securities and $119,365 / 8,248 securities, respectively) $ $ Series B: ($205,437 / 12,765 securities and $191,972 / 13,258 securities, respectively) $ $ Series F: ($47,630 / 2,967 securities and $37,918 / 2,609 securities, respectively) $ $ Series E1: ($30,533 / 2,628 securities and $16,701 / 1,597 securities, respectively) $ $ Series E2: ($3,846 / 331 securities and $1,993 / 191 securities, respectively) $ $ Series E3: ($713 / 61 securities and $31 / 3 securities, respectively) $ $ Series P1: ($6,839 / 673 securities and $2,939 / 319 securities, respectively) $ $ Series P2: ($2,131 / 210 securities and $1,385 / 150 securities, respectively) $ $ Series P3: ($745 / 73 securities and $22 / 2 securities, respectively) $ $ See accompanying notes which are an integral part of the financial statements. Semi-Annual Reportport 6

7 Statements of Comprehensive Income Amounts in thousands of Canadian Dollars (except per security amounts) For the six-month periods ended December 31, Investment income (Note 3) Interest $ 66 $ 70 Dividends 5,864 8,537 Net gain (loss) on Investments Net realized gain (loss) on investments 20,975 11,904 Change in net unrealized appreciation (depreciation) on investments 36,200 10,104 57,175 22,008 Net gain (loss) on Foreign Currencies Net realized gain (loss) on foreign currency transactions Change in net unrealized appreciation (depreciation) on other net assets in foreign currencies (30) (11) Total investment income (loss) 63,345 30,637 Operating expenses (Note 4) Management and advisory fees 3,480 3,780 Administration fees Independent Review Committee fees Commissions and other portfolio costs Sales tax Total operating expenses 4,580 4,963 Expenses waived (Note 4) (57) (76) Net operating expenses 4,523 4,887 Net increase (decrease) in net assets attributable to holders of redeemable securities from operations $ 58,822 $ 25,750 Other information: Increase (decrease) in net assets attributable to holders of redeemable securities from operations per Series (Note 3) Series A $ 18,026 $ 9,006 Series B $ 29,378 $ 13,940 Series F $ 6,301 $ 2,733 Series E1 $ 3,530 $ Series E2 $ 409 $ Series E3 $ 62 $ Series P1 $ 757 $ 49 Series P2 $ 284 $ 22 Series P3 $ 75 $ Increase (decrease) in net assets attributable to holders of redeemable securities from operations per Series per security (Note 3) Series A $ $.9149 Series B $ $.9324 Series F $ $ Series E1 $ $ Series E2 $ $ Series E3 $ $ Series P1 $ $.3476 Series P2 $ $.3336 Series P3 $ $.1553 For certain Series the period shown is from the commencement of sale of securities to period end. See Note 1 for the commencement dates for newly offered Series. See accompanying notes which are an integral part of the financial statements. 7 Semi-Annual Report

8 Financial Statements (Unaudited) continued Statements of Changes in Net Assets Attributable to Holders of Redeemable Securities Amounts in thousands of Canadian Dollars For the six-month period ended December 31, 2016 Total Series A Series B Series F Series E1 Series E2 Net assets attributable to holders of redeemable securities, beginning of period $ 372,326 $ 119,365 $ 191,972 $ 37,918 $ 16,701 $ 1,993 Distributions to holders of redeemable securities (Note 5) From net investment income (3,758) (1,027) (1,790) (519) (273) (33) From net realized gain (15,254) (4,167) (7,268) (2,106) (1,110) (133) Management fee reduction (7) (6) (1) (19,019) (5,194) (9,064) (2,626) (1,383) (166) Redeemable security transactions (Note 6) Proceeds from sale of redeemable securities 62,145 4,277 21,785 12,457 15,382 1,883 Reinvestment of distributions 17,849 4,917 8,854 2,027 1, Amounts paid upon redemption of redeemable securities (71,267) (18,409) (37,488) (8,447) (5,057) (437) 8,727 (9,215) (6,849) 6,037 11,685 1,610 Increase (decrease) in net assets attributable to holders of redeemable securities from operations 58,822 18,026 29,378 6,301 3, Net increase (decrease) in net assets attributable to holders of redeemable securities 48,530 3,617 13,465 9,712 13,832 1,853 Net assets attributable to holders of redeemable securities, end of period $ 420,856 $ 122,982 $ 205,437 $ 47,630 $ 30,533 $ 3,846 Amounts in thousands of Canadian Dollars For the six-month period ended December 31, 2016 Series E3 Series P1 Series P2 Series P3 Net assets attributable to holders of redeemable securities, beginning of period $ 31 $ 2,939 $ 1,385 $ 22 Distributions to holders of redeemable securities (Note 5) From net investment income (6) (77) (24) (9) From net realized gain (26) (311) (98) (35) (32) (388) (122) (44) Redeemable security transactions (Note 6) Proceeds from sale of redeemable securities 679 4, Reinvestment of distributions Amounts paid upon redemption of redeemable securities (60) (1,360) (9) 652 3, Increase (decrease) in net assets attributable to holders of redeemable securities from operations Net increase (decrease) in net assets attributable to holders of redeemable securities 682 3, Net assets attributable to holders of redeemable securities, end of period $ 713 $ 6,839 $ 2,131 $ 745 See accompanying notes which are an integral part of the financial statements. Semi-Annual Reportport 8

9 Statements of Changes in Net Assets Attributable to Holders of Redeemable Securities continued Amounts in thousands of Canadian Dollars For the six-month period ended December 31, 2015 Total Series A Series B Series F Net assets attributable to holders of redeemable securities, beginning of period $ 411,141 $ 150,392 $ 222,603 $ 38,146 Distributions to holders of redeemable securities (Note 5) From net investment income (3,906) (1,323) (2,112) (441) From net realized gain (27,066) (9,168) (14,631) (3,060) Management fee reduction (11) (2) (8) (1) (30,983) (10,493) (16,751) (3,502) Redeemable security transactions (Note 6) Proceeds from sale of redeemable securities 34,243 5,982 18,279 7,147 Reinvestment of distributions 29,177 9,854 16,402 2,721 Amounts paid upon redemption of redeemable securities (39,550) (13,948) (19,671) (5,928) 23,870 1,888 15,010 3,940 Increase (decrease) in net assets attributable to holders of redeemable securities from operations 25,750 9,006 13,940 2,733 Net increase (decrease) in net assets attributable to holders of redeemable securities 18, ,199 3,171 Net assets attributable to holders of redeemable securities, end of period $ 429,778 $ 150,793 $ 234,802 $ 41,317 Amounts in thousands of Canadian Dollars For the six-month period ended December 31, 2015 Series P1 Series P2 Series P3 Net assets attributable to holders of redeemable securities, beginning of period $ $ $ Distributions to holders of redeemable securities (Note 5) From net investment income (20) (10) From net realized gain (140) (67) (160) (77) Redeemable security transactions (Note 6) Proceeds from sale of redeemable securities 1, Reinvestment of distributions Amounts paid upon redemption of redeemable securities (2) (1) 2,029 1,002 1 Increase (decrease) in net assets attributable to holders of redeemable securities from operations Net increase (decrease) in net assets attributable to holders of redeemable securities 1, Net assets attributable to holders of redeemable securities, end of period $ 1,918 $ 947 $ 1 For certain Series the period shown is from the commencement of sale of securities to period end. See Note 1 for the commencement dates for newly offered Series. See accompanying notes which are an integral part of the financial statements. 9 Semi-Annual Report

10 Financial Statements (Unaudited) continued Statements of Cash Flows Amounts in thousands of Canadian Dollars For the six-month periods ended December 31, Cash, beginning of period $ 519 $ 7,955 Cash flows from (used in) operating activities: Purchases of investments (116,052) (76,502) Proceeds from sale and maturity of investments 133,019 74,860 Cash receipts from dividend income 5,787 8,548 Cash receipts from interest income Cash paid for operating expenses (4,444) (4,877) Net cash from (used in) operating activities 18,402 2,194 Cash flows from (used in) financing activities: Distributions to holders of redeemable securities net of reinvestments (1,170) (1,806) Proceeds from sales of securities 23,376 34,271 Amounts paid upon redemption of securities (33,340) (39,781) Net cash from (used in) financing activities (11,134) (7,316) Net change in cash 7,268 (5,122) Foreign exchange gain (loss) on cash (31) (7) Cash, end of period $ 7,756 $ 2,826 See accompanying notes which are an integral part of the financial statements. Semi-Annual Reportport 10

11 Notes to Financial Statements (Unaudited) For the period ended December 31, 2016 (Unaudited) (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) 1. Formation of the Fund Fidelity U.S. Dividend Registered Fund (Fund) is an open end mutual fund trust formed under the laws of Ontario and governed by a Master Declaration of Trust dated January 22, 2013 (Inception Date), as amended thereafter from time to time. The Fund is authorized to issue an unlimited number of securities. Fidelity Investments Canada ULC (Fidelity), as manager and trustee of the Fund, is responsible for the dayto-day operations and provides all general management and administrative services. The investment advisor is responsible for the investment management of the Fund s portfolio. On December 31, 2015, the investment advisor changed from FIAM LLC (formerly Pyramis Global Advisors, LLC) to Fidelity. The registered office of the Fund is located at 483 Bay Street, Suite 300, Toronto, Ontario, M5G 2N7. Currently, Fidelity mutual funds are offered in the following Series: Series A, Series B, Series C, Series D, Series F, Series F5, Series F8, Series I, Series I5, Series I8, Series O, Series T5, Series T8, Series S5, Series S8, Series E1, Series E1T5, Series E2, Series E2T5, Series E3, Series E3T5, Series E4, Series E4T5, Series E5, Series E5T5, Series P1, Series P1T5, Series P2, Series P2T5, Series P3, Series P3T5, Series P4, Series P4T5, Series P5 and Series P5T5. Series A, Series C, Series T5 and Series T8 securities are available to all investors in a deferred sales charge (DSC) option. Series A, Series T5 and Series T8 securities will be converted to lower management and advisory fee Series B, Series S5 and Series S8 securities, respectively, one year after completion of their redemption schedule. Series T5 and Series T8 securities have substantially all the same attributes as the Series A securities with the exception that Series T5 and Series T8 securities distribute an amount comprised of net income and/or return of capital monthly, if available. Series B, Series D, Series S5 and Series S8 securities are available to all investors in an initial sales charge (ISC) option. Series S5 and Series S8 securities have substantially all the same attributes as the Series B securities with the exception that Series S5 and Series S8 securities distribute an amount comprised of net income and/or return of capital monthly, if available. Series C and Series D securities are available to investors who have enrolled in the rebalancing service. Series F, Series F5 and Series F8 securities are usually only available to investors who have fee based accounts with dealers who have signed an eligibility agreement with Fidelity. Series F5 and Series F8 securities have substantially all the same attributes as the Series F securities with the exception that Series F5 and Series F8 securities distribute an amount comprised of net income and/or return of capital monthly, if available. Series E1, Series E1T5, Series E2, Series E2T5, Series E3, Series E3T5, Series E4, Series E4T5, Series E5 and Series E5T5 securities are available only to investors who initially hold Series B and/or Series S5 securities and then become eligible to hold certain Series E securities. Series E1, Series E1T5, Series E2, Series E2T5, Series E3, Series E3T5, Series E4, Series E4T5, Series E5 and Series E5T5 securities have lower combined management and administration fees than Series B or Series S5 securities. Series E1T5, Series E2T5, Series E3T5, Series E4T5 and Series E5T5 securities have the same attributes as the other Series E securities with the exception that Series E1T5, Series E2T5, Series E3T5, Series E4T5 and Series E5T5 securities distribute an amount comprised of net income and/or return of capital monthly, if available. Series P1, Series P1T5, Series P2, Series P2T5, Series P3, Series P3T5, Series P4, Series P4T5, Series P5 and Series P5T5 securities are available only to investors who initially hold Series F and/or Series F5 securities and then become eligible to hold certain Series P securities. Series P1, Series P1T5, Series P2, Series P2T5, Series P3, Series P3T5, Series P4, Series P4T5, Series P5 and Series P5T5 securities have lower combined management and administration fees than Series F or Series F5 securities. Series P1T5, Series P2T5, Series P3T5, Series P4T5 and Series P5T5 securities have the same attributes as the other Series P securities with the exception that Series P1T5, Series P2T5, Series P3T5, Series P4T5 and Series P5T5 securities distribute an amount comprised of net income and/or return of capital monthly, if available. Series O securities are only available to selected investors who have been approved by Fidelity and have entered into a Series O Account Agreement with Fidelity. Series I, Series I5 and Series I8 securities are available to all investors who have entered into a Series I Agreement with Fidelity and are available to all investors in an initial sales charge (ISC) option. Series I5 and Series I8 securities have substantially all the same attributes as the Series I securities with the exception that Series I5 and Series I8 securities distribute an amount comprised of net income and/or return of capital monthly, if available. The Fund offers Series A, Series B, Series F, Series E1, Series E2, Series E3, Series P1, Series P2 and Series P3 securities. The Fund commenced the offering of Series P1, Series P2 and Series P3 securities on December 4, 2015 and commenced the offering of Series E1, Series E2 and Series E3 securities on February 5, 2016 The Fund meets the definition of an investment entity and its purpose is to provide investment management services to its securityholders by investing its net assets for capital growth and/or investment income and by measuring its investment performance on a fair value basis. Refer to the Financial Instruments Risk note below for the Fund s investment objective. 2. Basis of Preparation Statement of Compliance - These interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB) and as applicable to the preparation of interim financial statements, including IAS 34 Interim Financial Reporting. The accounting policies set out below have been applied consistently unless otherwise stated. The policies applied in these interim financial statements are based on IFRS issued as of February 7, 2017, which is the date on which the interim financial statements were authorized for issue by Fidelity s board of directors. Any subsequent changes to IFRS that are given effect in the Fund s annual financial statements for the period ending June 30, 2017 could result in restatement of these interim financial statements. 11 Semi-Annual Report

12 Notes to Financial Statements (Unaudited) continued (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) Functional and Presentation Currency These financial statements are presented in Canadian dollars, which is the Fund s functional currency. 3. Summary of Significant Accounting Policies Basis of Measurement These financial statements have been prepared on the historical cost basis except for investments which are measured at fair value in the Statements of Financial Position. Use of Estimates and Judgments Under IFRS, management is required to make certain estimates and judgments at the date of the financial statements. The principal financial statement components subject to significant accounting estimates and judgments include: Fair value measurements The Fund may invest in financial instruments that are not quoted in an active market. Where applicable, these instruments are categorized in Level 2 and Level 3 of the fair value hierarchy explained below. When current market prices or quotations are not readily available or reliable, valuation techniques will be applied in good faith and in accordance with procedures adopted by the manager. Factors used in determining fair value may include, but are not limited to, broker quotes from reputable pricing sources, market or security specific events, changes in interest rates and credit quality. Fair value models use observable data, to the extent practical; however, the manager is required from time to time to make estimates and assumptions that are based on the best information available at that particular time. Changes in these estimates could impact the fair values of the financial instruments, and the impact could be material. The aggregate fair value of investments measured by valuation techniques as at December 31, 2016 and June 30, 2016, is included at the end of the Fund s Schedule of Investments. Classification and measurement of financial instruments The Fund has made significant judgments when determining the classification and measurement of its financial instruments under IAS 39, Financial Instruments Recognition and Measurement (IAS 39). These judgments centre upon the determination that certain investments are held-for-trading and that the fair value measurement option can be applied to those that are not due to factors including performance evaluation and management of the Fund on a fair value basis. Presentation of financial instruments The Fund has made significant judgments when determining the classification of its redeemable securities as financial liabilities in accordance with IAS 32 Financial Instruments Presentation (IAS 32). These judgments centre upon the determination that the Fund s redeemable securities do not have identical features and their entitlements include a contractual obligation to distribute any net income and net realized capital gains at least annually in cash (at the request of the securityholder). Therefore, the ongoing redemption feature is not the securities only contractual obligation. Investment Valuation Investments are designated at their fair value through profit or loss in accordance with IAS 39 and are carried at their fair value. The Fund categorizes the inputs to valuation techniques used to fair 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) Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. There were no significant transfers between Level 1 and Level 2 during the periods. The aggregate value of investments by input level, as at December 31, 2016 and June 30, 2016, as well as a roll forward of Level 3 securities, where applicable, is included at the end of the Fund s Schedule of Investments. 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 sales price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event that the last sales price or official closing price is not readily available, or is outside the bid-ask spread, the point within the bid ask spread that is most representative of fair value based on specific facts and circumstances will be used. For foreign equity securities, when significant 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 are used and are categorized as Level 2 in the hierarchy in these circumstances. 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 prices received from independent pricing services or from dealers who make markets in such securities. Pricing services utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type, prepayment speed assumptions, attributes of the collateral as well as dealer supplied prices and are generally categorized as Level 2 in the hierarchy, but may be categorized as Level 3. Semi-Annual Reportport 12

13 When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing matrices which consider similar factors that would be used by independent pricing services. These are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances Cash Cash is comprised of cash on deposit and may include cash equivalents which are short-term debt instruments with terms to maturity of less than 90 days at acquisition which are held for the purpose of meeting short-term cash commitments. Foreign currencies are comprised of cash amounts denominated in currencies other than Canadian dollars, which are on deposit with the custodian to facilitate the settlement of foreign denominated security transactions. Cash is carried at amortized cost which approximates its fair value. The Fund did not hold any cash equivalents as at December 31, 2016 and June 30, Impairment of Financial Assets At each reporting date, the Fund assesses whether there is objective evidence that a financial asset carried at amortized cost is impaired. If such impairment exists, the Fund recognizes the difference between the amortized cost of the financial assets and the present value of the estimated future cash flows, discounted using the instrument s original effective interest rate as an impairment loss on the Statements of Comprehensive Income. Such impairment losses are reversed in subsequent periods in the Statements of Comprehensive Income if the conditions that lead to the initial recognition of the loss diminish or cease to exist. Other Assets and Liabilities Other assets and liabilities may include amounts due to or from the custodian, affiliates or other counterparties for accrued income, investment transactions, Fund s security transactions, accrued expenses and other unsettled transactions at period end. These amounts are classified as loans and receivables or financial liabilities and are carried at amortized cost, which approximates fair value due to their short-term nature. Classification of redeemable securities issued by the Fund In accordance with IAS 32, the Fund s redeemable securities entitlements include a contractual obligation to distribute any net income and net realized capital gains at least annually in cash (at the request of the securityholder) and, therefore, the ongoing redemption feature is not the securities only contractual obligation. In addition, each series of redeemable securities are equally subordinated to each other, but have differing features as outlined in the notes below. Therefore, the Fund s redeemable securities do not meet the criteria for classification as equity and have been classified as financial liabilities on the Statements of Financial Position. The Fund s obligation for net assets attributable to holders of redeemable securities is recorded at the redemption amount. As at December 31, 2016 and June 30, 2016, the Fund s net asset value per Series per security may differ by less than $0.01 from its net assets attributable to holders of redeemable securities per Series per securities calculated in accordance with IFRS as a result of normal reporting period end procedures to close off the books and records. Investment Transactions, Income Recognition and Transaction Costs Regular way purchases and sales of financial assets are recognized at their trade date. The cost of investments is determined on an average cost basis, excluding commissions and other portfolio transaction costs. However, for presentation purposes, the Schedule of Investments includes broker commissions and other trading expenses. Income from investments is recognized on an accrual basis. Interest income is accrued as earned. Dividend income is recognized 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. Distributions received from investment trusts are recorded as income, capital gains or a return of capital based on the best information available to the manager. Due to the nature of these investments, actual allocations could vary from this information. Distributions from investment trusts treated as a return of capital reduce the average cost of the underlying investment trust. Net realized gains and losses from the sale of investments and change in net unrealized appreciation (depreciation) on investments are calculated with reference to average cost of the related investment securities which exclude transaction costs and may include proceeds received from litigation. Transaction costs, such as brokerage commissions, incurred in the purchase and sale of securities by the Fund are recognized as Commissions and other portfolio costs in the Statements of Comprehensive Income. Foreign Currency Translation Securities and other assets and liabilities denominated in a foreign currency are translated into Canadian dollars at the period-end exchange rates. Purchases and sales of securities, income and expenses denominated in foreign currencies are translated into Canadian dollars at the exchange rate on the date of the respective transaction. The effects of exchange rate fluctuations on investments are included in the Net realized gain (loss) and change in net unrealized appreciation (depreciation) on investments and exchange rate fluctuations on other foreign currency transactions are included in the Net realized gain (loss) on foreign currency transactions and Change in net unrealized appreciation (depreciation) on other net assets in foreign currencies in the Statements of Comprehensive Income. Valuation of Series Separate net assets attributable to holders of redeemable securities is calculated for each Series of securities in the Fund. The net assets attributable to holders of redeemable securities of a Series is computed by calculating the Series proportionate share of the assets and liabilities of the Fund common to all Series, adjusted for the assets and liabilities of the Fund attributable only to that Series. Expenses directly attributable to a Series are charged to that Series. Investment income and operating expenses are allocated proportionately to each Series based upon the relative net assets attributable to holders of redeemable securities of each Series, except for items that can be specifically attributed to one or more Series. Per Security from Operations - The increase (decrease) in net assets attributable to holders of redeemable securities resulting from operations per security in the Statements of Comprehensive Income represent the increase (decrease) in net assets attributable to holders of 13 Semi-Annual Report

14 Notes to Financial Statements (Unaudited) continued (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) redeemable securities resulting from operations for each Series of the Fund, divided by the weighted average securities outstanding for each Series of the Fund during the period as follows: Weighted Average Securities Period ended December 31, 2016 Series A 7,795 Series B 12,643 Series F 2,602 Series E1 2,041 Series E2 228 Series E3 25 Series P1 444 Series P2 177 Series P3 41 Period ended December 31, 2015 Series A 9,844 Series B 14,948 Series F 2,662 Series P1 142 Series P2 66 Series P3 Statements of Cash Flows When preparing the Statements of Cash Flows, the Fund nets the rollover activity of its short-term investments, and includes only the net cash flow impact in Purchases of investments or Proceeds from sale and maturity of investments, as applicable. Additionally, in accordance with IFRS, the Fund s Statements of Cash Flows excludes non-cash transactions from its operating and financing activities. Recent Accounting Pronouncements The final version of IFRS 9, Financial Instruments, was issued by the IASB in July 2014 and will replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 introduces a model for classification and measurement, a single, forward-looking expected loss impairment model and a substantially reformed approach to hedge accounting. The new single, principle based approach for determining the classification of financial assets is driven by cash flow characteristics and the business model in which an asset is held. The new model also results in a single impairment model being applied to all financial instruments, which will require more timely recognition of expected credit losses. It also includes changes in respect of an entity s own credit risk in measuring liabilities elected to be measured at fair value, so that gains caused by the deterioration of an entity s own credit risk on such liabilities are no longer recognised in profit or loss. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, however is available for early adoption. In addition, the entity s own credit risk changes can be early applied in isolation without otherwise changing the accounting for financial instruments. The Fund is in the process of assessing the impact of IFRS 9 and does not plan to adopt the new standard early. 4. Expenses and Other Related Party Transactions Management and Advisory Fees Fidelity serves as the manager and investment advisor of the Fund. Fidelity is part of a broader group of companies collectively known as Fidelity Investments. Fidelity has entered into sub-advisory agreements with a number of entities including FMR Co., Inc., to provide investment advice with respect to all or a portion of the investments of the Fund. The sub-advisors arrange for acquisition and disposition of portfolio investments, including all necessary brokerage arrangements. The Fund pays Fidelity a monthly management and advisory fee for their services and the provision of key management personnel to the Fund, based on the net asset value of each Series, calculated daily and payable monthly. Fidelity may reduce the management and advisory fee or fund expenses for certain investors by reducing the management and advisory fee it charges to the Fund or reducing the amount charged to the Fund for certain expenses and having the Fund pay out the amount of the reduction to the investors as a distribution. These distributions are disclosed as Management fee reduction in the Statements of Changes in Net Assets Attributable to Holders of Redeemable Securities. The annual management and advisory fee rates for each Series were as follows: Semi-Annual Reportport 14

15 Annual Management and Advisory Fee Rate (%) Series A Series B Series F Series E Series E Series E Series P Series P Series P Administration Fee Fidelity charges the Fund a fixed administration fee in place of certain variable expenses and the provision of key management personnel to the Fund. Fidelity, in turn, pays all of the operating expenses of the Fund, other than certain specified fund costs, including the fees and expenses of the Independent Review Committee (IRC), taxes, brokerage commissions and interest charges. The administration fee is in addition to the management and advisory fee. The annual rate of the administration fee will fall under one of three tiers, depending on the net asset value of the Fund: Under $100 Million (Tier 1), $100 Million to $1 Billion (Tier 2) and Over $1 Billion (Tier 3). The administration fee is calculated as a fixed annual percentage, accrued daily and payable monthly, of the net asset value of each Series as follows: Tier 1 (%) Tier 2 (%) Tier 3 (%) Series A Series B Series F Series E Series E Series E Series P Series P Series P Prior to October 28, 2016, the administration fee was calculated as a fixed annual percentage of the net asset value of each Series as follows (some or all Series administration fees may not have changed): Tier 1 (%) Tier 2 (%) Tier 3 (%) Series A Series B Series F Series E Series E Series E Series P Series P Series P Prior to October 29, 2015, the administration fee was calculated as a fixed annual percentage of the net asset value of each Series as follows (some or all Series administration fees may not have changed): Tier 1 (%) Tier 2 (%) Tier 3 (%) Series A Series B Series F Independent Review Committee Fees - The IRC, as required under National Instrument , reviews conflict of interest matters referred to it by the manager and provides recommendations or approves actions, as appropriate, that are in the best interest of the funds. There are currently four members of the IRC who are independent of Fidelity and its affiliates. IRC members are compensated by way of an annual retainer fee and a per meeting attendance fee, as well as reimbursed for expenses associated with IRC duties. These costs are allocated among the individual funds proportionately by assets. 15 Semi-Annual Report

16 Notes to Financial Statements (Unaudited) continued (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) Sales Tax - Certain provinces have harmonized their Provincial Sales Tax (PST) with the federal Goods and Services Tax (GST). The Harmonized Sales Tax (HST) combines the GST rate of 5% with the PST rate of certain provinces. The Provincial GST/HST liability or refund is calculated using the residency of securityholders and the value of their interests in the Fund as at specific times, rather than the physical location of the Fund. The effective GST/HST rate charged to each Series of the Fund is based on the securityholders proportionate investments by province, using each province s HST rate or GST rate in the case of non-participating provinces. All amounts are included in the Statements of Comprehensive Income as Sales tax. Expenses Waived - Fidelity may absorb or waive certain expenses at its sole discretion. Fidelity can terminate the absorption or waiver at any time. The manager of the Fund waived a portion of its administration fee. The expenses absorbed or waived during the periods are disclosed as Expenses waived in the Statements of Comprehensive Income, if applicable. Commissions and Other Portfolio Costs - Commissions and other portfolio costs paid for security transactions during the period were $97 (December 31, 2015: $53), of which $1 (December 31, 2015: $-) were paid to brokerage firms that are affiliates of Fidelity Investments. The Fund may execute certain portfolio trades with brokers who reimbursed a portion of their commissions to the Fund. Reimbursement estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known. Commissions reimbursed under this arrangement were $6 (December 31, 2015: $21) and are included in Commissions and other portfolio costs in the Statements of Comprehensive Income. In addition, a portion of commissions may be paid for research. The total of such payments was $34 (December 31, 2015: $27). Amounts paid for research provided to the Fund by executing brokers are estimates made by Fidelity. Fidelity has established procedures to assist them in making a good faith determination that the Fund received a reasonable benefit considering the value of research goods and services and the amount of brokerage commissions paid. 5. Taxation and Distributions The Fund qualifies as a mutual fund trust under the provisions of the Income Tax Act (Canada). For tax purposes, the Fund has a December year end. In each tax year, the Fund declares and credits as due and payable sufficient net investment income and net realized capital gains to securityholders such that the Fund will not be subject to income taxes. As a result, the Fund does not record income taxes under IAS 12 Income Taxes (IAS 12) and accordingly does not recognize the deferred tax benefit associated with tax loss carry forwards and other taxable temporary differences. Distributions are taxable in securityholders hands. At the end of each tax year, the character of the distributions is determined for tax purposes. Under the terms of the Declaration of Trust, the trustee may capitalize any distribution amount without any increase in the number of securities outstanding. Distributions, if any, are declared separately for each Series. Capital losses may be carried forward indefinitely to reduce future realized capital gains. As at the last taxation year-end, the Fund had no capital losses available to be carried forward. Non capital losses may be carried forward for up to 20 tax years to reduce future taxable income, but expire in December of the year noted. As at the last taxation year-end, the Fund had no non capital losses available to be carried forward. 6. Capital Risk Management Securities issued and outstanding are considered to be the capital of the Fund. The capital of each series of the Fund is divided into an unlimited number of securities of equal value, with no par value. All securities in a series of the Fund rank equally with respect to distributions. A securityholder of the Fund is entitled to one vote for each one dollar in value of securities owned. Fractional securities are proportionately entitled to these rights. The Fund generally has no restrictions or specific capital requirements on the subscriptions and redemptions of securities other than minimum subscription requirements; although, on rare occasions, Fidelity may temporarily suspend securityholders right to redeem securities and postpone paying sale proceeds. The relevant movements attributable to securityholders are shown in the Statements of Changes in Net Assets Attributable to Holders of Redeemable Securities. In accordance with the objectives and the risk management policies outlined in the Financial Instruments Risk notes, the Fund endeavors to invest the subscriptions received in appropriate investments while maintaining sufficient liquidity to meet redemptions. Such liquidity is managed by investing the majority of assets in investments that can be readily disposed and via the Fund s ability to borrow up to 5% of its net asset value. Security Transactions - Security transactions for each Series were as follows: Semi-Annual Reportport 16

17 Securities Outstanding, Beginning of Period Issued Reinvested Redeemed Securities Outstanding, End of Period Period ended December 31, 2016 Series A 8, (1,182) 7,637 Series B 13,258 1, (2,405) 12,765 Series F 2, (541) 2,967 Series E1 1,597 1, (447) 2,628 Series E (40) 331 Series E (5) 61 Series P (138) 673 Series P (1) 210 Series P Period ended December 31, 2015 Series A 10, (919) 10,221 Series B 14,923 1,193 1,097 (1,288) 15,925 Series F 2, (383) 2,808 Series P Series P Series P3 7. Financial Instruments Risk The Fund s activities expose it to a variety of financial instruments risks: credit risk, liquidity risk, other price risk, interest rate risk and currency risk. Fidelity seeks to minimize potential adverse effects of these performance risks by employing professional, experienced portfolio advisors, by daily monitoring of positions and market events, and by diversifying the investment portfolio within the constraints of the investment mandate. The Fund may use derivative financial instruments to moderate certain risk exposures. Risk, as defined by Fidelity, is the mismatch of certain risk factors, such as the market capitalization, beta, common factors such as size, priceearnings ratio, price-to-book ratio and industry exposures, between a portfolio and its benchmark. Such mismatches may result in divergence of returns relative to the benchmark. Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. A beta of 1 indicates that the security s price will move with the market. A beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicates that the security s price will be more volatile than the market. For example, if a stock s beta is 1.2, it s theoretically 20% more volatile than the market. Fidelity s objective is to provide consistent value-added return over the benchmark. Unsystematic risk is mitigated primarily through investments in a diverse portfolio of securities across many sectors, styles or regions of the market. Fidelity s qualitative fundamental security selection is also well diversified across many analysts. Rather than relying on a single valuation process or quantitative model that implicitly assumes that past value-added returns of some sectors or styles will persist into the future, Fidelity s analysts select securities based on their own unique valuation processes. The Fund aims to achieve long-term capital growth. The Fund invests primarily in equity securities of U.S. companies that pay dividends or that are expected to pay dividends and other types of securities that are expected to distribute income. The Fund s benchmark is the Russell 3000 Value Index. Portfolio risk is monitored daily and reviewed monthly by an investment compliance group. In addition, there is a formal quarterly review of each fund. The investment compliance group, portfolio managers and the senior analysts attend a quarterly portfolio review. Portfolios within each strategy are reviewed relative to each other and to their benchmark. Active industry and security allocations are analyzed. Credit Risk - Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Fund. The Fund s own credit risk in the case of financial liabilities and a counterparty s credit risk in the case of financial assets are considered, where applicable, in determining the fair value of financial assets and financial liabilities. The Fund may be exposed to indirect credit risk through its investments in any Underlying Fund. The fair value of debt securities includes consideration of the credit worthiness of the debt issuer. In addition, as part of its cash management, the Fund limits its direct exposure to credit loss by placing its cash with high credit quality financial institutions. The carrying amount of investments and other assets represents the maximum credit risk exposure as at December 31, 2016 and June 30, Other than outlined above, there were no significant concentrations of credit risk to counterparties as at December 31, 2016 and June 30, Semi-Annual Report

18 Notes to Financial Statements (Unaudited) continued (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) Concentration Risk - Fidelity analyzes credit concentration based on the counterparty, industry and/or geographical location of the financial assets that the Fund holds. The following table summarizes the investment concentration risk that is relevant for the Fund based on its investment objective Sector Mix % of Fund s Net Assets as at 12/31/16 % of Fund s Net Assets as at 6/30/16 Financials Energy Industrials Information Technology Consumer Staples Consumer Discretionary Health Care Utilities Telecommunication Services Materials Real Estate Others (Individually Less Than 1%) Cash and Short-Term Investments Net Other Assets (Liabilities) Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. Fidelity regularly monitors the relative weights of individual securities, sectors, countries, and also monitors the market capitalization and trading liquidity of each holding. Liquidity Risk - Liquidity risk is defined as the risk that the Fund may not be able to settle or meet its obligations on time or at a reasonable price. The Fund is exposed to daily cash redemptions of redeemable securities. Redeemable securities are redeemed on demand at the securityholder s option based on the Fund s net asset value per security (NAVPS) at the time of redemption. In accordance with securities regulations, investment funds must maintain at least 90% of assets in liquid investments; investments that are traded in an active market and can be readily disposed of. In addition, the Fund aims to retain sufficient cash and short-term investments to maintain liquidity, and has the ability to borrow up to 5% of its net asset value from the custodian for the purpose of funding redemptions. The Fund may, from time to time, invest in securities that are not traded in an active market and may be illiquid. Private and/or restricted securities held, if any, are identified in the Fund s Schedule of Investments as at their respective period ends. The liquidity position of the Fund is monitored on a daily basis. As at December 31, 2016 and June 30, 2016, the Fund did not have financial liabilities with maturities greater than 3 months. Other Price Risk - Other price risk is the risk that the value of financial instruments will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk on monetary instruments), whether caused by factors specific to an individual investment, its issuer, or other factors affecting all instruments traded in a market or market segment. All securities present a risk of loss of capital. The Fund moderates this risk through a careful selection of securities and other financial instruments within the parameters of the investment strategy. The maximum risk resulting from financial instruments is equivalent to their fair value. The Fund s investments are susceptible to other price risk arising from uncertainties about future prices of the instruments. If the benchmark had increased or decreased by 5% on December 31, 2016 and June 30, 2016, with all other variables held constant, the net assets attributable to holders of redeemable securities of the Fund would have increased or decreased by approximately $19,195 (June 30, 2016: $16,950). This change is estimated using the Fund s beta which is calculated based on the historical correlation between the return of the Fund as compared to the return of the benchmark. In practice, the actual trading results may differ from this sensitivity analysis and the difference could be material. Interest Rate Risk - Interest rate risk arises on interest-bearing financial instruments held in the investment portfolio such as bonds. The Fund is exposed to the risk that the fair value or the future cash flows of interest-bearing financial instruments will fluctuate due to changes in the prevailing levels of market interest rates. Any excess cash and cash equivalents are invested in short-term investments at market interest rates. The majority of the Fund s financial assets and liabilities are non-interest bearing. As a result, the Fund is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. Semi-Annual Reportport 18

19 Currency Risk - Currency risk arises from financial instruments that are denominated in a currency other than Canadian dollar, which is the Fund s functional currency. The Fund is exposed to the risk that the value of financial instruments denominated in other currencies will fluctuate due to changes in exchange rates. Currency risk is not considered to arise from financial instruments that are non-monetary items such as equity investments, or forward foreign exchange contracts related to such non-monetary items. The Fund considers the foreign exchange exposure relating to nonmonetary assets and liabilities to be a component of other price risk, not foreign currency risk. As a result, the Fund is not subject to significant amounts of risk due to fluctuations in exchange rates. 19 Semi-Annual Report

20 Fidelity Investments Canada ULC 483 Bay Street, Suite 300 Toronto, Ontario M5G 2N7 Manager, Transfer Agent and Registrar Fidelity Investments Canada ULC 483 Bay Street, Suite 300 Toronto, Ontario M5G 2N7 Portfolio Adviser Fidelity Investments Canada ULC Toronto, Ontario Custodian State Street Trust Company of Canada Toronto, Ontario Auditor PricewaterhouseCoopers LLP Toronto, Ontario Visit us online at or call Fidelity Client Services at Fidelity s mutual funds are sold by registered Investment Professionals. Each Fund has a simplified prospectus, which contains important information on the Fund, including its investment objective, purchase options, and applicable charges. Please obtain a copy of the prospectus, read it carefully, and consult your Investment Professional before investing. As with any investment, there are risks to investing in mutual funds. There is no assurance that any Fund will achieve its investment objective, and its net asset value, yield, and investment return will fluctuate from time to time with market conditions. Investors may experience a gain or loss when they sell their securities in any Fidelity Fund. Fidelity Global Funds may be more volatile than other Fidelity Funds as they concentrate investments in one sector and in fewer issuers; no single Fund is intended to be a complete diversified investment program. Past performance is no assurance or indicator of future returns. There is no assurance that either Fidelity Canadian Money Market Fund or Fidelity U.S. Money Market Fund will be able to maintain its net asset value at a constant amount. The breakdown of Fund investments is presented to illustrate the way in which a Fund may invest, and may not be representative of a Fund s current or future investments. A Fund s investments may change at any time. Fidelity Investments is a registered trademark of FMR LLC E FICL-DRU-SANN-0217