Fidelity Dividend Fund

Transcription

1 Fidelity Dividend Fund Annual Report June 30, 2017

2 Fidelity Dividend Fund Schedule of Investments June 30, 2017 Showing Percentage of Net Assets Attributable to Securityholders (Net Assets) Equities 61.0% Shares / Units Cost (000s) Market Value (000s) Bermuda 2.3% FINANCIALS 0.9% OneBeacon Insurance Group Ltd. 679,185 $ 16,536 $ 16,056 REAL ESTATE 0.7% Brookfield Property Partners LP 388,633 8,853 11,923 UTILITIES 0.7% Brookfield Infrastructure Partners LP 101,715 1,745 5,395 Brookfield Renewable Energy Partners LP 201,100 5,272 8,315 TOTAL UTILITIES 7,017 13,710 TOTAL BERMUDA 32,406 41,689 Canada 48.6% CONSUMER DISCRETIONARY 2.2% Cogeco Communications, Inc. 174,500 11,161 13,822 Restaurant Brands International, Inc. 169,492 7,660 13,753 Shaw Communications, Inc. Class B 455,000 11,851 12,872 TOTAL CONSUMER DISCRETIONARY 30,672 40,447 CONSUMER STAPLES 1.4% Alimentation Couche Tard, Inc. Class B (sub. vtg.) 150,400 6,802 9,349 Empire Co. Ltd. Class A (non vtg.) 88,000 2,317 1,947 Loblaw Companies Ltd. 187,744 11,033 13,544 TOTAL CONSUMER STAPLES 20,152 24,840 ENERGY 8.5% AltaGas Ltd. 51,800 1,307 1,537 Cameco Corp. 250,000 4,063 2,953 Canadian Natural Resources Ltd. 404,700 14,826 15,144 Enbridge, Inc. 1,054,000 51,480 54,450 Inter Pipeline Ltd. 186,500 3,430 4,737 Keyera Corp. 74,000 2,889 3,021 Parkland Fuel Corp. 104,900 3,048 3,117 Parkland Fuel Corp. 43,300 1,199 1,222 Pembina Pipeline Corp. 161,700 5,135 6,945 Peyto Exploration & Development Corp. 55,000 1,602 1,294 PrairieSky Royalty Ltd. 131,300 4,540 3,877 Suncor Energy, Inc. 542,300 19,321 20,548 TransCanada Corp. 480,400 21,450 29,698 Veresen, Inc. 400,000 5,217 7,336 TOTAL ENERGY 139, ,879 FINANCIALS 19.7% Bank of Montreal 245,600 15,032 23,386 Bank of Nova Scotia 302,600 19,714 23,606 Brookfield Asset Management, Inc. Class A 522,200 21,684 26,575 Canadian Imperial Bank of Commerce 184,900 13,485 19,487 Shares / Units Cost (000s) Market Value (000s) Great West Lifeco, Inc. 86,200 $ 2,269 $ 3,030 Intact Financial Corp. 111,600 8,156 10,932 Manulife Financial Corp. 879,490 14,128 21,380 National Bank of Canada 212,200 7,447 11,571 Power Corp. of Canada (sub. vtg.) 600,000 16,728 17,748 Royal Bank of Canada 719,100 50,646 67,710 Sun Life Financial, Inc. 522,040 17,263 24,202 The Toronto Dominion Bank 1,604,900 61, ,877 Thomson Reuters Corp. 66,900 3,215 4,017 Trisura Group Ltd. 1, TOTAL FINANCIALS 251, ,553 INDUSTRIALS 1.1% Canadian National Railway Co. 124,300 10,271 13,079 Morneau Shephell, Inc. 365,000 3,785 7,607 TOTAL INDUSTRIALS 14,056 20,686 MATERIALS 2.5% Agnico Eagle Mines Ltd. (Canada) 210,900 10,315 12,333 Agrium, Inc. 101,000 12,161 11,871 First Quantum Minerals Ltd. 750,000 11,528 8,228 Franco Nevada Corp. 105,500 6,493 9,872 Wheaton Precious Metals Corp. 105,000 2,302 2,705 TOTAL MATERIALS 42,799 45,009 REAL ESTATE 2.6% Boardwalk (REIT) 18, Canadian (REIT) 79,500 3,364 3,647 Canadian Apartment Properties (REIT) unit 97,000 2,296 3,256 Cominar (REIT) 60,000 1, Dream Industrial (REIT) 32, First Capital Realty, Inc. 308,500 6,306 6,096 H&R REIT/H&R Finance Trust 562,818 11,583 12,393 RioCan (REIT) 463,300 11,496 11,152 Smart (REIT) 252,770 7,636 8,119 WPT Industrial (REIT) 52, TOTAL REAL ESTATE 46,121 47,479 TELECOMMUNICATION SERVICES 6.4% BCE, Inc. 724,969 35,862 42,338 Rogers Communications, Inc. Class B (non vtg.) 815,400 40,753 49,943 TELUS Corp. 544,400 17,421 24,373 TOTAL TELECOMMUNICATION SERVICES 94, ,654 UTILITIES 4.2% Canadian Utilities Ltd. Class A (non vtg.) 185,500 6,938 7,730 Emera, Inc. 290,000 11,790 13,981 Fortis, Inc. 860,000 32,271 39,199 Hydro One Ltd. 711,500 16,457 16,528 TOTAL UTILITIES 67,456 77,438 TOTAL CANADA 706, ,985 See accompanying notes which are an integral part of the financial statements. Annual Reportport 2

3 Equities continued Shares / Units Cost (000s) Market Value (000s) United Kingdom 0.4% INDUSTRIALS 0.4% WS Atkins PLC 203,000 $ 7,420 $ 7,135 UTILITIES 0.0% National Grid PLC 11, TOTAL UNITED KINGDOM 7,594 7,312 United States of America 9.7% CONSUMER DISCRETIONARY 1.3% Comcast Corp. Class A 135,900 5,451 6,859 Staples, Inc. 1,260,000 16,630 16,454 TOTAL CONSUMER DISCRETIONARY 22,081 23,313 CONSUMER STAPLES 1.3% Reynolds American, Inc. 20,300 1,300 1,712 Safeway, Inc.: rights 1,447, rights 1,447, Whole Foods Market, Inc. 394,300 21,853 21,532 TOTAL CONSUMER STAPLES 23,153 23,582 ENERGY 0.7% EOG Resources, Inc. 105,600 13,602 12,396 FINANCIALS 0.9% Fidelity & Guaranty Life 418,000 17,235 16,831 HEALTH CARE 0.4% Danaher Corp. 69,000 7,490 7,551 INFORMATION TECHNOLOGY 3.8% Brocade Communications Systems, Inc. 2,998,000 49,643 49,025 Intel Corp. 157,900 7,614 6,909 Microsoft Corp. 67,200 5,757 6,007 Visa, Inc. Class A 69,000 8,763 8,391 TOTAL INFORMATION TECHNOLOGY 71,777 70,332 REAL ESTATE 1.1% AvalonBay Communities, Inc. 3, Boston Properties, Inc. 12,460 1,355 1,988 Equity Residential (SBI) 8, General Growth Properties, Inc. 42,000 1,335 1,283 Parkway, Inc. 421,000 12,503 12,497 Public Storage 3, Simon Property Group, Inc. 8, ,697 TOTAL REAL ESTATE 17,758 19,858 UTILITIES 0.2% CMS Energy Corp. 66,700 3,000 4,000 TOTAL UNITED STATES OF AMERICA 176, ,863 TOTAL EQUITIES 922,519 1,113,849 Bonds 13.2% Principal Amount (000s) Cost (000s) Market Value (000s) Domestic Bonds 5.9% Canadian Government: 0.25% 11/1/17 $ 27,255 $ 27,224 $ 27, % 8/1/17 26,874 26,890 26, % 2/1/18 26,537 26,638 26, % 9/1/17 26,749 26,790 26,783 TOTAL DOMESTIC BONDS 107, ,477 Foreign Bonds 7.3% U.S. Treasury Bills, yield at date of purchase 0.89% 10/12/17 20,025 USD 26,620 25,894 U.S. Treasury Notes: 0.625% 9/30/17 16,550 USD 21,900 21, % 10/31/17 16,446 USD 21,742 21, % 11/30/17 16,446 USD 21,748 21, % 11/30/17 13,158 USD 17,740 17, % 11/15/17 19,864 USD 27,273 26,054 TOTAL FOREIGN BONDS 137, ,135 TOTAL BONDS 244, ,612 Underlying Funds 4.9% Shares / Units (000s) Fidelity Canadian Bond Fund Series O 6,157 84,399 88,823 Short-Term Investments 22.8% Principal Amount (000s) Canada 22.8% Investments in reverse repurchase agreements in a joint trading account at 0.47%, dated 6/30/17 due 7/4/17 (Collateralized by Canadian Government Obligations) # $ 415, , ,759 TOTAL INVESTMENT PORTFOLIO 101.9% $1,667,242 1,859,043 NET OTHER ASSETS (LIABILITIES) (1.9)% (33,785) NET ASSETS 100% $ 1,825,258 Presentation Notes Cost amount includes broker commissions and other trading expenses, if any. Principal Amount is stated in Canadian dollars unless otherwise noted. See accompanying notes which are an integral part of the financial statements. 3 Annual Report

4 Fidelity Dividend Fund Schedule of Investments continued Investment Valuation The following is a summary of the inputs used, as of June 30, 2017 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 June 30, 2017: Description Total Level 1 Level 2 Level 3 (Amounts in thousands) Investments in Securities: Equities: Consumer Discretionary $ 63,760 $ 63,760 $ $ Consumer Staples 48,422 48, Energy 168, ,053 1,222 Financials 391, ,440 Health Care 7,551 7,551 Industrials 27,821 27,821 Information Technology 70,332 70,332 Materials 45,009 45,009 Real Estate 79,260 79,260 Telecommunication Services 116, ,654 Utilities 95,325 95,325 Bonds 240, ,612 Underlying Funds 88,823 88,823 Short-Term Investments 415, ,759 Total Investments in Securities: $1,859,043 $1,201,112 $657,593 $ 338 Valuation Inputs at June 30, 2016: Description Total Level 1 Level 2 Level 3 (Amounts in thousands) Investments in Securities: Equities: Consumer Discretionary $ 47,873 $ 47,873 $ $ Consumer Staples 44,827 44, Energy 226, ,114 Financials 466, ,559 Health Care 35,034 35,034 Industrials 18,784 18,784 Information Technology 46,465 46,465 Materials 125, ,002 Telecommunication Services 109, ,044 Utilities 212, ,427 6,422 Bonds 50,565 50,565 Underlying Funds 86,054 86,054 Short-Term Investments 330, ,712 Total Investments in Securities: $1,799,882 $1,411,846 $387,699 $ 337 The following is a summary of transfers between Level 1 and Level 2 for the periods ended June 30, Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements: Transfers Level 1 to Level 2 $ 0 Level 2 to Level 1 $ 6,422 The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value: (Amounts in thousands) Investments in Securities: Beginning Balance $ 337 Net Realized Gain (Loss) on Investment Securities 24 Net Unrealized Gain (Loss) on Investment Securities 1 Total (000s) See accompanying notes which are an integral part of the financial statements. Annual Reportport 4

5 (Amounts in thousands) Cost of Purchases Proceeds of Sales (24) Amortization/Accretion Transfers into Level 3 Transfers out of Level 3 Ending Balance $ 338 The change in unrealized gain (loss) for the period attributable to Level 3 securities held at June 30, 2017 $ 1 (Amounts in thousands) Investments in Securities: Beginning Balance $ 325 Net Realized Gain (Loss) on Investment Securities Net Unrealized Gain (Loss) on Investment Securities 12 Cost of Purchases Proceeds of Sales Amortization/Accretion Transfers into Level 3 Transfers out of Level 3 Ending Balance $ 337 The change in unrealized gain (loss) for the period attributable to Level 3 securities held at June 30, 2016 $ 12 The information used in the above reconciliations represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliations are included in Net Gain (Loss) on Investments on the Statements of Comprehensive Income. Other Information # Additional information on each counterparty to the reverse repurchase agreement is as follows: Reverse Repurchase Agreement / Counterparty Value (000s) $415,759,000 due 7/04/17 at 0.47% Bank of Montreal $ 42,538 CIBC World Markets, Inc. 49,628 Royal Bank of Canada 99,255 Scotia Capital, Inc. 177,241 The Toronto-Dominion Bank 47,097 $ 415,759 See accompanying notes which are an integral part of the financial statements. 5 Annual Report

6 Financial Statements Statements of Financial Position Amounts in thousands of Canadian Dollars (except per security amounts) As at June 30, 2017 June 30, 2016 Current assets (Note 3) Investments at fair value through profit or loss (Note 8) $ 1,859,043 $ 1,799,882 Cash 1, Receivable for investments sold 3,485 13,325 Other receivables Accrued interest and dividends receivable 4,490 4,005 Subscriptions receivable 1,105 2,898 1,869,894 1,820,333 Current liabilities (Note 3) Payable for investments purchased 38,874 5,673 Redemptions payable 3,299 2,611 Distributions payable (Note 5) Management and advisory fees payable (Note 4) 1,778 1,738 Other payables to affiliates (Note 4) Other payables and accrued expenses (Note 4) ,636 10,784 Net assets attributable to securityholders (Notes 3 and 6) $ 1,825,258 $ 1,809,549 Net assets attributable to securityholders per Series and per security (Note 6) Series A: ($229,210 and $292,974, respectively) $ $ Series B: ($732,076 and $752,169, respectively) $ $ Series F: ($136,328 and $103,962, respectively) $ $ Series F5: ($4,223 and $2,836, respectively) $ $ Series F8: ($1,460 and $372, respectively) $ $ Series O: ($486,856 and $499,467, respectively) $ $ Series T5: ($7,380 and $9,025, respectively) $ $ Series T8: ($10,620 and $13,771, respectively) $ $ Series S5: ($9,751 and $10,712, respectively) $ $ Series S8: ($31,534 and $30,467, respectively) $ $ Series E1: ($113,473 and $65,527, respectively) $ $ Series E1T5: ($3,777 and $1,343, respectively) $ $ Series E2: ($15,328 and $7,781, respectively) $ $ Series E2T5: ($1 and $1, respectively) $ $ Series E3: ($1,372 and $1,021, respectively) $ $ Series E4: ($1,475 and $1, respectively) $ $ Series E5: ($457 and $1, respectively) $ $ Series P1: ($33,667 and $13,186, respectively) $ $ Series P1T5: ($323 and $123, respectively) $ $ Series P2: ($3,857 and $3,201, respectively) $ $ Series P2T5: ($74 and $-, respectively) $ $ Series P3: ($621 and $266, respectively) $ $ Series P4: ($668 and $630, respectively) $ $ Series P5: ($727 and $713, respectively) $ $ See accompanying notes which are an integral part of the financial statements. Annual Reportport 6

7 Statements of Comprehensive Income Amounts in thousands of Canadian Dollars (except per security amounts) For the periods ended June 30, (Note 1) Investment income (Note 3) Interest $ 2,649 $ 1,585 Dividends 37,979 44,294 Security lending Income distributions from underlying funds 2,902 2,837 Capital gain distributions from underlying funds 44 Net gain (loss) on investments Net realized gain (loss) on investments 79, ,785 Change in net unrealized appreciation (depreciation) on investments (22,632) 14,630 57, ,415 Net gain (loss) on foreign currencies Net realized gain (loss) on foreign currency transactions (55) (687) Change in net unrealized appreciation (depreciation) on other net assets in foreign currencies (20) (27) (75) (714) Total investment income (loss) 100, ,483 Operating expenses (Note 4) Management and advisory fees 21,874 21,175 Administration fees 2,932 2,929 Independent Review Committee fees 2 2 Commissions and other portfolio costs Foreign taxes withheld (Note 5) Sales tax 2,801 2,723 Total operating expenses 28,815 28,265 Expenses waived (Note 4) (476) (480) Net operating expenses 28,339 27,785 Net increase (decrease) in net assets attributable to securityholders from operations $ 72,346 $ 136,698 Increase (decrease) in net assets attributable to securityholders from operations per Series (Note 3) Series A $ 9,293 $ 20,849 Series B $ 24,256 $ 53,196 Series F $ 4,863 $ 7,617 Series F5 $ 136 $ 188 Series F8 $ 25 $ 29 Series O $ 27,597 $ 44,273 Series T5 $ 274 $ 662 Series T8 $ 435 $ 985 Series S5 $ 345 $ 799 Series S8 $ 1,012 $ 2,089 Series E1 $ 2,531 $ 4,280 Series E1T5 $ 62 $ 83 Series E2 $ 355 $ 412 Series E2T5 $ $ Series E3 $ 16 $ 82 Series E4 $ 47 $ Series E5 $ (2) $ Series P1 $ 851 $ 856 Series P1T5 $ 7 $ 7 Series P2 $ 171 $ 262 Series P2T5 $ $ See accompanying notes which are an integral part of the financial statements. 7 Annual Report

8 Financial Statements continued Statements of Comprehensive Income continued Amounts in thousands of Canadian Dollars (except per security amounts) For the periods ended June 30, (Note 1) Series P3 $ 10 $ 21 Series P4 $ 29 $ 4 Series P5 $ 33 $ 4 Increase (decrease) in net assets attributable to securityholders from operations per Series per security (Notes 3 and 6) Series A $.59 $ 1.06 Series B $.56 $ 1.14 Series F $.69 $ 1.45 Series F5 $.79 $ 2.00 Series F8 $.48 $ 2.02 Series O $.94 $ 1.57 Series T5 $.60 $ 1.19 Series T8 $.55 $ 1.07 Series S5 $.60 $ 1.26 Series S8 $.53 $ 1.25 Series E1 $.29 $.86 Series E1T5 $.45 $ 1.73 Series E2 $.29 $.79 Series E2T5 $.70 $ 1.42 Series E3 $.14 $.92 Series E4 $.38 $.72 Series E5 $ (.11) $.72 Series P1 $.36 $.97 Series P1T5 $.70 $ 1.88 Series P2 $.47 $.85 Series P2T5 $ (.09) $ Series P3 $.32 $ 1.23 Series P4 $.46 $.60 Series P5 $.47 $.51 See accompanying notes which are an integral part of the financial statements. Annual Reportport 8

9 Statements of Changes in Net Assets Attributable to Securityholders Amounts in thousands of Canadian Dollars For the period ended June 30, 2017 (Note 1) Total Series A Series B Series F Series F5 Series F8 Net assets attributable to securityholders, beginning of period $ 1,809,549 $ 292,974 $ 752,169 $ 103,962 $ 2,836 $ 372 Increase (decrease) in net assets attributable to securityholders from operations 72,346 9,293 24,256 4, Distributions to securityholders (Note 5) From net investment income (14,176) (219) (1,489) (1,439) (42) (13) From net realized gain (45,184) (6,486) (17,510) (2,988) (87) (23) Management fee reduction (54) (1) (44) (9) Return of capital (4,587) (110) (70) (64,001) (6,706) (19,043) (4,436) (239) (106) Security transactions (Note 6) Proceeds from sale of securities 474,046 38, ,788 78,186 1,970 1,454 Reinvestment of distributions 58,713 6,374 18,213 3, Amounts paid upon redemption of securities (525,395) (111,083) (221,307) (49,571) (594) (325) 7,364 (66,351) (25,306) 31,939 1,490 1,169 Net assets attributable to securityholders, end of period $ 1,825,258 $ 229,210 $ 732,076 $ 136,328 $ 4,223 $ 1,460 For the period ended June 30, 2017 (Note 1) Series O Series T5 Series T8 Series S5 Series S8 Net assets attributable to securityholders, beginning of period $ 499,467 $ 9,025 $ 13,771 $ 10,712 $ 30,467 Increase (decrease) in net assets attributable to securityholders from operations 27, ,012 Distributions to securityholders (Note 5) From net investment income (10,260) (5) (9) (19) (59) From net realized gain (13,053) (195) (304) (248) (759) Management fee reduction Return of capital (363) (1,000) (453) (2,459) (23,313) (563) (1,313) (720) (3,277) Security transactions (Note 6) Proceeds from sale of securities 37,635 1,312 1,701 4,103 8,116 Reinvestment of distributions 23, ,145 Amounts paid upon redemption of securities (77,842) (2,914) (4,862) (5,121) (6,929) (16,895) (1,356) (2,273) (586) 3,332 Net assets attributable to securityholders, end of period $ 486,856 $ 7,380 $ 10,620 $ 9,751 $ 31,534 See accompanying notes which are an integral part of the financial statements. 9 Annual Report

10 Financial Statements continued Statements of Changes in Net Assets Attributable to Securityholders continued For the period ended June 30, 2017 (Note 1) Series E1 Series E1T5 Series E2 Series E2T5 Series E3 Net assets attributable to securityholders, beginning of period $ 65,527 $ 1,343 $ 7,781 $ 1 $ 1,021 Increase (decrease) in net assets attributable to securityholders from operations 2, Distributions to securityholders (Note 5) From net investment income (200) (5) (34) (4) From net realized gain (2,270) (72) (332) (24) Management fee reduction Return of capital (125) (2,470) (202) (366) (28) Security transactions (Note 6) Proceeds from sale of securities 73,691 3,406 12,582 1,547 Reinvestment of distributions 2, Amounts paid upon redemption of securities (28,190) (976) (5,374) (1,209) 47,885 2,574 7, Net assets attributable to securityholders, end of period $ 113,473 $ 3,777 $ 15,328 $ 1 $ 1,372 For the period ended June 30, 2017 (Note 1) Series E4 Series E5 Series P1 Series P1T5 Series P2 Net assets attributable to securityholders, beginning of period $ 1 $ 1 $ 13,186 $ 123 $ 3,201 Increase (decrease) in net assets attributable to securityholders from operations 47 (2) Distributions to securityholders (Note 5) From net investment income (3) (1) (304) (2) (46) From net realized gain (43) (645) (5) (98) Management fee reduction Return of capital (6) (46) (1) (949) (13) (144) Security transactions (Note 6) Proceeds from sale of securities 2,090 1,904 25, ,366 Reinvestment of distributions Amounts paid upon redemption of securities (659) (1,446) (5,027) (138) (1,795) 1, , Net assets attributable to securityholders, end of period $ 1,475 $ 457 $ 33,667 $ 323 $ 3,857 For the period ended June 30, 2017 (Note 1) Series P2T5 Series P3 Series P4 Series P5 Net assets attributable to securityholders, beginning of period $ $ 266 $ 630 $ 713 Increase (decrease) in net assets attributable to securityholders from operations Distributions to securityholders (Note 5) From net investment income (1) (4) (8) (10) From net realized gain (8) (16) (18) Management fee reduction Return of capital (1) (2) (12) (24) (28) Security transactions (Note 6) Proceeds from sale of securities Reinvestment of distributions 12 Amounts paid upon redemption of securities (33) Net assets attributable to securityholders, end of period $ 74 $ 621 $ 668 $ 727 See accompanying notes which are an integral part of the financial statements. Annual Reportport 10

11 Statements of Changes in Net Assets Attributable to Securityholders continued For the period ended June 30, 2016 (Note 1) Total Series A Series B Series F Series F5 Series F8 Net assets attributable to securityholders, beginning of period $ 1,792,278 $ 369,001 $ 808,159 $ 77,432 $ 1,221 $ 174 Increase (decrease) in net assets attributable to securityholders from operations 136,698 20,849 53,196 7, Distributions to securityholders (Note 5) From net investment income (13,974) (765) (2,642) (963) (22) (3) From net realized gain (74,308) (13,987) (33,153) (3,534) (86) (11) Management fee reduction (52) (2) (38) (10) Return of capital (4,375) (64) (17) (92,709) (14,754) (35,833) (4,507) (172) (31) Security transactions (Note 6) Proceeds from sale of securities 397,004 33, ,007 52,892 1, Reinvestment of distributions 86,473 13,992 34,133 3, Amounts paid upon redemption of securities (510,195) (129,506) (249,493) (32,681) (336) (118) (26,718) (82,122) (73,353) 23,420 1, Net assets attributable to securityholders, end of period $ 1,809,549 $ 292,974 $ 752,169 $ 103,962 $ 2,836 $ 372 For the period ended June 30, 2016 (Note 1) Series O Series T5 Series T8 Series S5 Series S8 Net assets attributable to securityholders, beginning of period $ 466,244 $ 11,299 $ 18,089 $ 12,403 $ 28,256 Increase (decrease) in net assets attributable to securityholders from operations 44, ,089 Distributions to securityholders (Note 5) From net investment income (9,159) (21) (35) (38) (98) From net realized gain (20,369) (418) (658) (503) (1,196) Management fee reduction (2) Return of capital (437) (1,180) (493) (2,165) (29,528) (876) (1,873) (1,036) (3,459) Security transactions (Note 6) Proceeds from sale of securities 54,580 1,193 1,567 1,937 6,945 Reinvestment of distributions 29, , ,437 Amounts paid upon redemption of securities (65,631) (3,746) (6,409) (4,118) (5,801) 18,478 (2,060) (3,430) (1,454) 3,581 Net assets attributable to securityholders, end of period $ 499,467 $ 9,025 $ 13,771 $ 10,712 $ 30,467 For the period ended June 30, 2016 (Note 1) Series E1 Series E1T5 Series E2 Series E2T5 Series E3 Net assets attributable to securityholders, beginning of period $ $ $ $ $ Increase (decrease) in net assets attributable to securityholders from operations 4, Distributions to securityholders (Note 5) From net investment income (105) (2) (13) (2) From net realized gain Management fee reduction Return of capital (18) (105) (20) (13) (2) Security transactions (Note 6) Proceeds from sale of securities 69,554 1,269 7, Reinvestment of distributions Amounts paid upon redemption of securities (8,304) (7) (261) (1) 61,352 1,280 7, Net assets attributable to securityholders, end of period $ 65,527 $ 1,343 $ 7,781 $ 1 $ 1,021 See accompanying notes which are an integral part of the financial statements. 11 Annual Report

12 Financial Statements continued Statements of Changes in Net Assets Attributable to Securityholders continued For the period ended June 30, 2016 (Note 1) Series E4 Series E5 Series P1 Series P1T5 Series P2 Net assets attributable to securityholders, beginning of period $ $ $ $ $ Increase (decrease) in net assets attributable to securityholders from operations Distributions to securityholders (Note 5) From net investment income (74) (1) (27) From net realized gain (275) (3) (115) Management fee reduction Return of capital (1) (349) (5) (142) Security transactions (Note 6) Proceeds from sale of securities , ,767 Reinvestment of distributions Amounts paid upon redemption of securities (2,045) (1,737) , ,081 Net assets attributable to securityholders, end of period $ 1 $ 1 $ 13,186 $ 123 $ 3,201 For the period ended June 30, 2016 (Note 1) Series P2T5 Series P3 Series P4 Series P5 Net assets attributable to securityholders, beginning of period $ $ $ $ Increase (decrease) in net assets attributable to securityholders from operations Distributions to securityholders (Note 5) From net investment income (2) (1) (1) From net realized gain Management fee reduction Return of capital (2) (1) (1) Security transactions (Note 6) Proceeds from sale of securities Reinvestment of distributions 2 Amounts paid upon redemption of securities (1) Net assets attributable to securityholders, end of period $ $ 266 $ 630 $ 713 See accompanying notes which are an integral part of the financial statements. Annual Reportport 12

13 Statements of Cash Flows Amounts in thousands of Canadian Dollars For the periods ended June 30, (Note 1) Cash flows from (used in) operating activities: Purchases of investments $ (1,111,385) $ (1,093,122) Proceeds from sale and maturity of investments 1,152,231 1,194,530 Cash receipts from dividend income 37,675 43,202 Cash receipts from interest income 2,136 1,801 Cash receipts from other investment income 3,029 2,903 Cash paid for operating expenses (27,923) (27,157) Net cash from (used in) operating activities 55, ,157 Cash flows from (used in) financing activities: Distributions to securityholders net of reinvestments (5,295) (6,267) Proceeds from sales of securities 232, ,060 Amounts paid upon redemption of securities (280,961) (510,757) Net cash from (used in) financing activities (54,165) (121,964) Net change in cash 1, Foreign exchange gain (loss) on cash (72) 17 Cash, beginning of period Cash, end of period $ 1,737 $ 211 See accompanying notes which are an integral part of the financial statements. 13 Annual Report

14 Notes to Financial Statements For the periods ended June 30, 2017 and 2016 (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) 1. Formation of the Fund Fidelity Dividend Fund (Fund) is an open end mutual fund trust formed under the laws of Ontario and governed by a Master Declaration of Trust dated May 9, 2005 (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 day-to-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. The Fund invests a portion of its assets in Fidelity Canadian Bond Fund Series O (Underlying Fund). Currently, Fidelity mutual funds are offered in the following Series: 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 B, Series D, Series S5 and Series S8 securities are available to all investors in an initial sales charge (ISC) option. 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 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 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 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. In addition, Series F5, Series F8, Series I5, Series I8, Series T5, Series T8, Series S5, Series S8, Series E1T5, Series E2T5, Series E3T5, Series E4T5, Series E5T5, 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. The Fund commenced the offering of Series P1, Series P1T5, Series P2, Series P3, Series P4 and Series P5 securities on December 4, 2015, commenced the offering of Series E1, Series E1T5, Series E2, Series E2T5, Series E3, Series E4 and Series E5 securities on February 5, 2016 and commenced offering of Series P2T5 securities on January 6, 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 financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB). The accounting policies set out below have been applied consistently unless otherwise stated. The financial statements were authorized for issue by Fidelity s board of directors on September 7, Functional and Presentation Currency These financial statements are presented in Canadian dollars, which is the Fund s functional currency. Comparative Figures - Per security comparative figures have been conformed to the current rounding presentation of two decimal places. 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 Annual Reportport 14

15 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 June 30, 2017 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. Determination of Relationship with Underlying Funds The Fund has made significant judgments when determining the nature of its relationship with an Underlying Fund in accordance with IFRS 10 Consolidated financial statements (IFRS 10) and IAS 28 Investment in associates and joint ventures (IAS 28). These judgments centre upon identifying the Fund s ability to control or significantly influence an Underlying Fund. In both determinations, the Fund looks at the relevant activities of an Underlying Fund such as voting rights, participation in policy choices and material cash flows such as subscription and redemption proceeds. The Fund has determined that it does not have the ability to control nor exercise significant influence on an Underlying Fund due to the Fund s inability to exercise its voting rights and direct or participate in the financial and operating policy decisions of an Underlying Fund. 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 period ended June 30, Information on transfers between Level 1 and Level 2 for the period ended June 30, 2017 is included at the end of the Fund s Schedule of Investments. The aggregate value of investments by input level, as at June 30, 2017 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. The Fund did not hold any significant positions of Level 3 investments at the beginning of or end of the period. Valuation techniques used to value the Fund s investments by major category are as follows: Equity securities, including restricted equity securities and Exchange-traded funds (ETFs) 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, 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 equity 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 debt 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. 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. Independent prices obtained from a single source or broker are evaluated by management and may be categorized as Level 3 in the hierarchy. 15 Annual Report

16 Notes to Financial Statements continued (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) Fidelity managed Underlying Funds are valued at their closing net asset value per security (NAVPS) each business day and are categorized as Level 1 in the hierarchy. Short-term securities for which quotations are not readily available are valued at amortized cost, which approximates fair value and are categorized as Level 2 in the hierarchy. 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 June 30, 2017 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 securityholders is recorded at the redemption amount. As at June 30, 2017 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 securityholders 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. Net realized gains and losses from the sale of investments (which may include proceeds received from litigation) and change in net unrealized appreciation (depreciation) on investments are calculated with reference to average cost of the related investment securities. Interest income is accrued as earned and includes coupon interest and accretion of discount and amortization of premium on debt securities using the effective interest rate. This is the rate that exactly discounts the estimated future cash receipts through the expected life of the relevant debt securities, to their net carrying amounts. 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, including Underlying Funds, are recorded as income, capital gains or a return of capital based on the best information available. 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. Transaction costs, such as brokerage commissions, incurred in the purchase and sale of investment 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. Reverse Repurchase Agreements Uninvested cash balances may be transferred into one or more joint trading accounts where these balances are invested in reverse repurchase transactions. In reverse repurchase transactions, U.S. or Canadian Government securities are purchased from a counterparty who agrees to repurchase the securities at a higher price at a specified future date. The difference in price is reported as interest income. Credit risk arises from the potential for a counterparty to default on its obligation to repurchase the security. The risk is managed by the use of counterparties acceptable to Fidelity and by the receipt of the securities as collateral. The value of the collateral must be at least 102% of the daily fair value of the cash invested. Any reverse repurchase agreements open at period end are included in the Schedule of Investments. The following tables summarize the securities pledged to the Fund as collateral: Annual Reportport 16

17 June 30, 2017 Collateral Description Interest Rate (%) Maturity Date % of Collateral Collateral Value as a % of CAD Cash Invested Canada Housing Trust /15/ Canadian Treasury Bonds /1/ /1/ Canadian Treasury Bill n/a 3/8/2018 4/5/ June 30, 2016 Collateral Description Interest Rate (%) Maturity Date % of Collateral Collateral Value as a % of CAD Cash Invested Canadian Treasury Bonds /1/ /1/ Canadian Treasury Bill n/a 12/29/ Securities Lending The Fund lends portfolio securities from time to time in order to earn additional income. The Fund has entered into a securities lending program with its custodian, State Street Trust Company of Canada (SSB). The aggregate market value of all securities loaned under securities lending transactions or sold in repurchase transactions cannot exceed 50% of the net asset value of the Fund. SSB is entitled to receive payments out of the gross amount generated from the securities lending transactions of the Fund and bear all operational costs directly related to securities lending as well as the cost of borrower default indemnification. The following tables reconcile the gross amount of income generated from the Fund s securities lending transactions to what is retained by the Fund and reported under Security lending in the Statements of Comprehensive Income. Total Income Earned ($) Fund Income Earned ($) SSB Income Earned ($) Fund % of Total Income Earned SSB % of Total Income Earned Period ended June 30, June 30, The Fund receives collateral (in the form of obligations of, or guaranteed by, the Government of Canada, or a province thereof, or by the United States government or its agencies) against the loaned securities and maintains collateral in an amount of at least 105% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined daily at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. As at June 30, 2017 and June 30, 2016 the Fund s aggregate values of the securities loaned and the collateral received were as follows: Fair value of securities on loan ($) Fair value of Collateral ($) June 30, ,020 41,164 June 30, ,073 18,875 Valuation of Series Separate net assets attributable to securityholders is calculated for each Series of securities of the Fund. The net assets attributable to securityholders 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 securityholders 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 securityholders resulting from operations per security in the Statements of Comprehensive Income represent the operational increase (decrease) for each Series of the Fund, divided by the relevant weighted average securities outstanding during the period. Refer to the Security Transactions Note for the Fund s weighted average securities outstanding. 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, 17 Annual Report

18 Notes to Financial Statements continued (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) 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. and Fidelity (Canada) Asset Management ULC, 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 Securityholders. No management and advisory fees are charged with respect to the Series O securities. To avoid duplication of fees, Series O securities of any Fidelity managed Underlying Fund are not subject to management and advisory fees. The annual management and advisory fee rates for each Series were as follows: Annual Management and Advisory Fee Rate (%) Series A Series B Series F Series F Series F Series T Series T Series S Series S Series E Series E1T Series E Series E2T Series E Series E Series E Series P Series P1T Series P Series P2T Series P Series P Series P Administration Fee Fidelity charges the Fund a fixed administration fee in place of certain variable and administrative expenses, including the provision of key administrative 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, taxes, brokerage commissions and interest charges. To avoid duplication of fees, Series O securities of any Fidelity managed Underlying Fund are not subject to the Administration fee. The administration fee is in addition to the management and advisory fee. No administration fees are charged with respect to the Series O securities. 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), Annual Reportport 18

19 $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 F Series F Series T Series T Series S Series S Series E Series E1T Series E Series E2T Series E Series E Series E Series P Series P1T Series P Series P2T 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 F Series F Series T Series T Series S Series S Series E Series E1T Series E Series E2T Series E Series E Series E Series P Series P1T Series P 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): 19 Annual Report

20 Notes to Financial Statements continued (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) Tier 1 (%) Tier 2 (%) Tier 3 (%) Series A Series B Series F Series F Series F Series T Series T Series S Series S Independent Review Committee Fees - The Independent Review Committee (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. No IRC fees are charged with respect to the Series O securities. 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 and can terminate the absorption or waiver at any time. Fidelity waived a portion of its administration fee which is disclosed as Expenses waived in the Statements of Comprehensive Income. Commissions and Other Portfolio Costs - Commissions and other portfolio costs paid for security transactions during the period were $761 (June 30, 2016: $686), of which $5 (June 30, 2016: $-) 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 $97 (June 30, 2016: $94) 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 $209 (June 30, 2016: $257). 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. Foreign withholding taxes are imposed by certain countries on investment income and are estimated based on the tax rules and actual rates that exist in the foreign markets. Investment income is recorded gross of foreign taxes withheld. Foreign withholding taxes are accrued for in conjunction with the accrual for the related investment income and are included in Foreign taxes withheld on the Statements of Comprehensive Income and Other payables and accrued expenses on the Statements of Financial Position. 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. Annual Reportport 20

21 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 Securityholders. 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 and weighted average securities for each Series were as follows: 21 Annual Report

22 Notes to Financial Statements continued (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) Securities Outstanding, Beginning of Period Issued Reinvested Redeemed Securities Outstanding, End of Period Weighted Average Securities Period ended June 30, 2017 Series A 17,253 2, (6,422) 13,419 15,643 Series B 44,225 10,260 1,057 (12,784) 42,758 43,332 Series F 6,089 4, (2,848) 7,924 7,078 Series F (29) Series F (18) Series O 29,260 2,164 1,345 (4,463) 28,306 29,242 Series T (160) Series T (303) Series S (277) Series S8 1, (420) 2,007 1,926 Series E1 6,127 6, (2,587) 10,539 8,831 Series E1T (46) Series E , (492) 1,423 1,205 Series E2T5 Series E (111) Series E (60) Series E5 176 (134) Series P1 1,296 2, (485) 3,284 2,370 Series P1T (7) 17 9 Series P (173) Series P2T Series P (3) Series P Series P Period ended June 30, 2016 Series A 22,274 2, (7,930) 17,253 19,638 Series B 48,749 8,663 2,138 (15,325) 44,225 46,547 Series F 4,668 3, (1,985) 6,089 5,236 Series F (17) Series F (6) Series O 28,115 3,318 1,827 (4,000) 29,260 28,163 Series T (208) Series T8 1, (388) Series S (227) Series S8 1, (345) 1,807 1,670 Series E1 6, (804) 6,127 4,985 Series E1T Series E (25) Series E2T5 Series E Series E4 Series E5 Series P1 1, (212) 1, Series P1T Series P (181) Series P Series P Series P Affiliated Ownership - As at June 30, 2017, Fidelity and its affiliates held approximately 22% of the Fund. As at June 30, 2016, Fidelity and its affiliates held approximately 23% of the Fund. 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 Annual Reportport 22

23 daily monitoring of positions and market events, and by diversifying the investment portfolio within the constraints of the investment mandate. Derivative financial instruments may be used 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. This Fund aims to achieve high total investment return. It invests, either directly or indirectly through investments in underlying funds, primarily in equity securities of companies that pay dividends or that are expected to pay dividends, income trusts, fixed-income securities, and other securities that are expected to distribute income. The Fund s benchmark is a blended index made up of 75.0% MSCI Canada Value Capped Index, 15.0% allocation to a blend of four S&P/TSX industry groups (telecommunication services, utilities, oil and gas transportation and storage, and Real Estate Investment Trusts (REITs) (market capitalization weighted)), 5.0% S&P U.S. REIT Index and 5.0% FTSE TMX Canada Universe Bond 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, both indirect and direct, are considered, where applicable, in determining the fair value of financial assets and financial liabilities. 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 June 30, 2017 and June 30, Credit risk arising on Canadian debt securities held directly or indirectly, as applicable, is mitigated by investing primarily in rated instruments or instruments issued by rated counterparties with credit ratings of at least BB or better as determined by Moody s Investor Services, Inc. or S&P at the date of purchase. Refer to the Quality Diversification tables in the Summary of Investment Portfolio of the Fund s Annual Management Report of Fund Performance as at June 30, 2017, which summarize the credit risk that is relevant for the Fund. Collateralized reverse repurchase agreements may result in credit exposure in the event that the counterparty to the transaction is unable to fulfill its contractual obligations. The risk is managed by the receipt of the underlying securities as collateral and use of counterparties whose credit worthiness is considered sufficient based on Fidelity s independent review. Other than outlined above, there were no significant concentrations of credit risk to counterparties as at June 30, 2017 and June 30, Concentration Risk - The Fund may be exposed to risk based on the concentration levels of its financial instruments in various sectors, geographic regions, asset weightings and market capitalization, as applicable. Fidelity analyzes and monitors these concentration risks regularly. Refer to the Geographic Mix, Sector Mix, and Asset Mix tables in the Summary of Investment Portfolio of the Fund s Annual Management Report of Fund Performance as at June 30, 2017, which summarize the investment concentration risks that are relevant for the Fund. 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 its redeemable securities. Redeemable securities are redeemed on demand at the securityholder s option based on the Fund s NAVPS at the time of redemption. The Fund may be exposed to indirect liquidity risk through its investments. 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 liquidity position is monitored on a daily basis. As at June 30, 2017 and June 30, 2016, the Fund did not have financial liabilities with maturities greater than 3 months. 23 Annual Report

24 Notes to Financial Statements continued (Amounts in thousands of Canadian dollars/thousands of securities (except per security amounts)) 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 financial instruments present a risk of loss of capital. This risk is moderated 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. Investments, if applicable, 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 June 30, 2017 and June 30, 2016, with all other variables held constant, the net assets attributable to securityholders of the Fund would have increased or decreased by approximately $29,745 (June 30, 2016: $35,998). 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 directly or indirectly 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 may be invested in short-term investments at market interest rates. Refer to the Maturity Diversification tables in the Summary of Investment Portfolio of the Fund s Annual Management Report of Fund Performance as at June 30, 2017, which summarize the Fund s exposure to interest-bearing financial instruments at period end categorized by the earlier of contractual interest rate reset or maturity dates. The fixed income investment strategy adheres to independent quantitative understanding of all benchmark and portfolio risk and return characteristics with an explicit understanding of all active exposures relative to the investment benchmark. Interest rate anticipation is not a significant component of the fixed income investment strategy. The Fund s exposure to interest-bearing financial instruments is such that a 25 basis point fluctuation in the prevailing levels of market interest rates would not subject the Fund to significant amounts of interest rate risk. 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 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. Foreign exchange exposure relating to non-monetary assets and liabilities is considered to be a component of other price risk, not foreign currency risk. As at June 30, 2017 and June 30, 2016, the majority of the Fund s monetary assets and liabilities are denominated in Canadian dollars. As a result, the Fund is not subject to significant amounts of risk due to fluctuations in exchange rates. 8. Investment in Structured Entities The Fund s investment in a Fidelity managed Underlying Fund represents an interest in a structured entity. A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements such as those agreements executed by a Fund with its manager and portfolio advisor. An Underlying Fund is financed through the issuance of its redeemable trust securities. In addition, its purpose is to provide investment management services to its securityholders by investing its net assets for capital growth and/or investment income. The Fund does not control nor significantly influence an Underlying Fund, as defined by IFRS 10 and IAS 28, due to the Fund s inability to exercise its voting rights and direct or participate in the financial and operating policy decisions. The maximum risk of loss in an investment in an Underlying Fund is equal to its fair value and carrying value which is outlined in the tables below and included in Investments on the Statements of Financial Position. There is no difference between the maximum risk of loss and the carrying amounts of the assets and liabilities of an Underlying Fund that relate to the Fund s interests. There are additional risks associated with an investment in an Underlying Fund. Refer to the Financial Instruments Risk note for further discussion. In the normal course of operations to fulfil its investment objective, the Fund will, from time to time, subscribe for additional securities issued by an Underlying Fund or redeem in whole or in part its investment in an Underlying Fund. However, the Fund does not have any obligation or intention to provide financial support to an Underlying Fund. In addition, the Fund may receive a distribution of income and/or capital gains from an Underlying Fund as described above in the Investment Transactions, Income Recognition and Transaction Costs note. The following tables present additional information that is relevant to the Fund s investment in structured entities. Total Net Assets Fair Value of June 30, 2017 ($) Investment ($) Fidelity Canadian Bond Fund 10,870,379 88,823 Annual Reportport 24

25 Total Net Assets Fair Value of June 30, 2016 ($) Investment ($) Fidelity Canadian Bond Fund 10,529,736 86,054 Underlying Fund names presented in the tables reflect names in effect as at the dates shown. 25 Annual Report

26 Management Report and Independent Auditor s Report Management Responsibility for Financial Reporting To the Securityholders and Trustee of Fidelity Dividend Fund (Fund) The accompanying financial statements have been prepared by Fidelity Investments Canada ULC (Fidelity), as manager of the Fund. Fidelity is responsible for the information and representations contained in these financial statements. The Board of Directors of Fidelity is responsible for reviewing and approving the financial statements. Fidelity maintains appropriate processes to ensure that relevant and reliable financial information is produced. The financial statements have been prepared in accordance with International Financial Reporting Standards and include certain amounts and disclosures that are based on estimates and judgments. The significant accounting policies, which management believes are appropriate for the Fund, are described in Note 3 to the financial statements. PricewaterhouseCoopers LLP is the external auditor of the Fund. They have audited the financial statements in accordance with Canadian generally accepted auditing standards to enable them to express to the securityholders their opinion on the financial statements. Their report is set out below. Brock Dunlop Vice President and Fund Treasurer Fidelity Investments Canada ULC September 7, 2017 Independent Auditor s Report To the Securityholders and Trustee of Fidelity Dividend Fund (Fund) We have audited the accompanying financial statements of the Fund, which comprise the statements of financial position as at June 30, 2017 and 2016 and the statements of comprehensive income, changes in net assets attributable to securityholders and cash flows for the years ended June 30, 2017 and 2016, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as at June 30, 2017 and 2016 and its financial performance and its cash flows for the years ended June 30, 2017 and 2016 in accordance with International Financial Reporting Standards. PricewaterhouseCoopers LLP Chartered Professional Accountants, Licensed Public Accountants Toronto, Ontario September 7, 2017 Annual Reportport 26

27 27 Annual Report

28 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 Fidelity Investments Canada ULC E FICL-DIV-ANN-0917