Fidelity International Growth Investment Trust

Transcription

1 Fidelity International Growth Investment Trust Semi-Annual Report September 30, 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 International Growth Investment Trust Schedule of Investments September 30, 2016 (Unaudited) Showing Percentage of Net Assets Attributable to Holders of Redeemable Units (Net Assets) Equities 96.2% Shares Cost Market Value Australia 4.1% HEALTH CARE 3.1% CSL Ltd. 145,867 $ 12,298 $ 15,736 INDUSTRIALS 1.0% Sydney Airport unit 249,138 1,215 1,752 Transurban Group unit 315,530 2,771 3,618 TOTAL INDUSTRIALS 3,986 5,370 TOTAL AUSTRALIA 16,284 21,106 Austria 1.6% INDUSTRIALS 1.2% Andritz AG 82,864 5,453 5,917 REAL ESTATE 0.4% Buwog Gemeinnuetzige Wohnung 61,524 1,791 2,184 TOTAL AUSTRIA 7,244 8,101 Belgium 4.2% CONSUMER STAPLES 3.8% Anheuser Busch InBev SA NV 113,100 16,005 19,513 FINANCIALS 0.4% KBC Groep NV 29,158 1,954 2,227 TOTAL BELGIUM 17,959 21,740 Canada 1.0% CONSUMER STAPLES 0.3% Alimentation Couche Tard, Inc. Class B (sub. vtg.) 20,800 1,246 1,322 ENERGY 0.4% Pason Systems, Inc. 112,200 2,082 1,884 MATERIALS 0.3% Franco Nevada Corp. 19,000 1,911 1,742 TOTAL CANADA 5,239 4,948 Cayman Islands 0.9% INFORMATION TECHNOLOGY 0.9% 58.com, Inc. ADR 30,700 2,091 1,920 Alibaba Group Holding Ltd. sponsored ADR 21,400 2,188 2,970 TOTAL INFORMATION TECHNOLOGY 4,279 4,890 Denmark 2.4% FINANCIALS 0.5% Jyske Bank A/S (Reg.) 38,900 2,384 2,379 HEALTH CARE 1.9% Novo Nordisk A/S Series B sponsored ADR 184,900 10,668 10,089 TOTAL DENMARK 13,052 12,468 Finland 0.3% MATERIALS 0.3% Tikkurila Oyj 64,744 1,582 1,827 Shares Cost Market Value France 1.1% HEALTH CARE 1.1% Essilor International SA 34,388 $ 5,850 $ 5,818 Germany 3.5% HEALTH CARE 1.3% Bayer AG 52,500 7,713 6,917 INFORMATION TECHNOLOGY 2.2% SAP AG 94,482 10,127 11,336 TOTAL GERMANY 17,840 18,253 Hong Kong 2.1% FINANCIALS 2.1% AIA Group Ltd. 1,208,600 10,039 10,663 India 0.7% FINANCIALS 0.7% Housing Development Finance Corp. Ltd. 130,111 3,307 3,582 Ireland 3.2% MATERIALS 3.2% CRH PLC sponsored ADR 201,000 6,444 8,773 James Hardie Industries PLC CDI 368,370 4,992 7,566 TOTAL MATERIALS 11,436 16,339 Isle of Man 0.4% INFORMATION TECHNOLOGY 0.4% Playtech Ltd. 143,254 2,391 2,217 Israel 0.3% REAL ESTATE 0.3% Azrieli Group 25,400 1,029 1,463 Italy 0.7% FINANCIALS 0.2% Azimut Holding SpA 43,700 1, INDUSTRIALS 0.5% Interpump Group SpA 114,200 1,879 2,553 TOTAL ITALY 3,190 3,397 Japan 13.6% CONSUMER DISCRETIONARY 2.6% DENSO Corp. 124,600 6,728 6,523 USS Co. Ltd. 310,200 5,841 6,888 TOTAL CONSUMER DISCRETIONARY 12,569 13,411 CONSUMER STAPLES 1.5% Japan Tobacco, Inc. 143,600 6,638 7,712 FINANCIALS 0.4% Seven Bank Ltd. 483,100 2,475 2,030 HEALTH CARE 3.5% Astellas Pharma, Inc. 456,600 8,195 9,356 See accompanying notes which are an integral part of the financial statements. Semi-Annual Reportport 2

3 Equities continued Shares Cost Market Value Japan continued HEALTH CARE continued Hoya Corp. 78,600 $ 3,917 $ 4,148 Olympus Corp. 95,700 4,830 4,385 TOTAL HEALTH CARE 16,942 17,889 INDUSTRIALS 2.4% East Japan Railway Co. 40,000 4,310 4,737 Misumi Group, Inc. 102,600 2,281 2,530 OSG Corp. 86,300 2,095 2,257 SHO BOND Holdings Co. Ltd. 44,800 2,162 2,740 TOTAL INDUSTRIALS 10,848 12,264 INFORMATION TECHNOLOGY 2.3% Keyence Corp. 9,600 5,551 9,228 Nintendo Co. Ltd. 7,900 1,732 2,775 TOTAL INFORMATION TECHNOLOGY 7,283 12,003 REAL ESTATE 0.9% Mitsui Fudosan Co. Ltd. 170,000 5,812 4,745 TOTAL JAPAN 62,567 70,054 Kenya 0.4% TELECOMMUNICATION SERVICES 0.4% Safaricom Ltd. 7,666,500 1,471 1,981 Korea (South) 0.7% CONSUMER STAPLES 0.7% BGFretail Co. Ltd. 15,901 2,512 3,668 Mexico 0.5% CONSUMER STAPLES 0.5% Fomento Economico Mexicano S.A.B. de CV sponsored ADR 23,700 2,656 2,862 Netherlands 1.1% INFORMATION TECHNOLOGY 1.1% ASML Holding NV (Netherlands) 40,000 5,720 5,751 South Africa 1.7% CONSUMER DISCRETIONARY 1.3% Naspers Ltd. Class N 29,200 5,042 6,630 CONSUMER STAPLES 0.4% Clicks Group Ltd. 161,231 1,219 1,960 TOTAL SOUTH AFRICA 6,261 8,590 Spain 5.0% CONSUMER DISCRETIONARY 2.7% Inditex SA 284,470 10,834 13,835 INDUSTRIALS 0.4% Prosegur Compania de Seguridad SA (Reg.) 218,400 1,419 2,002 INFORMATION TECHNOLOGY 1.4% Amadeus IT Holding SA Class A 114,800 6,275 7,524 See accompanying notes which are an integral part of the financial statements. Shares Cost Market Value REAL ESTATE 0.5% Hispania Activos Inmobiliarios SA 64,440 $ 1,026 $ 1,133 Merlin Properties Socimi SA 86,200 1,351 1,338 TOTAL REAL ESTATE 2,377 2,471 TOTAL SPAIN 20,905 25,832 Sweden 4.6% CONSUMER STAPLES 0.7% Svenska Cellulosa AB (SCA) (B Shares) 89,800 3,591 3,499 FINANCIALS 0.8% Svenska Handelsbanken AB (A Shares) 215,922 3,851 3,893 INDUSTRIALS 3.1% ASSA ABLOY AB (B Shares) 444,600 10,038 11,851 Fagerhult AB 96,116 1,524 3,373 Intrum Justitia AB 23, TOTAL INDUSTRIALS 12,435 16,214 TOTAL SWEDEN 19,877 23,606 Switzerland 12.9% CONSUMER STAPLES 5.5% Nestle SA 274,829 26,108 28,473 HEALTH CARE 6.1% Novartis AG 143,497 16,629 14,858 Roche Holding AG (participation certificate) 49,834 16,419 16,247 TOTAL HEALTH CARE 33,048 31,105 INDUSTRIALS 1.3% Schindler Holding AG: (participation certificate) 22,831 4,264 5,618 (Reg.) 4, TOTAL INDUSTRIALS 4,982 6,610 TOTAL SWITZERLAND 64,138 66,188 Taiwan 0.8% INFORMATION TECHNOLOGY 0.8% Taiwan Semiconductor Manufacturing Co. Ltd. 535,000 2,916 4,133 United Kingdom 10.5% CONSUMER DISCRETIONARY 2.9% Informa PLC 308,069 3,218 3,730 InterContinental Hotel Group PLC ADR 202,217 10,865 11,044 TOTAL CONSUMER DISCRETIONARY 14,083 14,774 CONSUMER STAPLES 4.3% Associated British Foods PLC 48,100 2,902 2,127 Reckitt Benckiser Group PLC 121,400 12,740 14,995 SABMiller PLC 67,900 4,002 5,190 TOTAL CONSUMER STAPLES 19,644 22,312 FINANCIALS 1.2% Prudential PLC 271,093 7,007 6,305 3 Semi-Annual Report

4 Fidelity International Growth Investment Trust Schedule of Investments (Unaudited) continued Equities continued Shares Cost Market Value United Kingdom continued INDUSTRIALS 1.6% BAE Systems PLC 392,500 $ 3,689 $ 3,498 Berendsen PLC 159,300 3,248 3,370 Howden Joinery Group PLC 163,300 1,534 1,200 TOTAL INDUSTRIALS 8,471 8,068 INFORMATION TECHNOLOGY 0.3% Rightmove PLC 18,300 1,344 1,314 REAL ESTATE 0.2% Shaftesbury PLC 74, ,231 TOTAL UNITED KINGDOM 51,542 54,004 United States of America 17.9% CONSUMER DISCRETIONARY 3.1% Autoliv, Inc. 38,000 4,810 5,324 Domino s Pizza, Inc. 21,114 3,179 4,206 Mohawk Industries, Inc. 25,200 5,121 6,623 TOTAL CONSUMER DISCRETIONARY 13,110 16,153 CONSUMER STAPLES 3.5% Molson Coors Brewing Co. Class B 22,700 2,837 3,270 Philip Morris International, Inc. 53,600 5,870 6,837 PriceSmart, Inc. 20,400 2,165 2,242 Reynolds American, Inc. 92,000 5,850 5,691 TOTAL CONSUMER STAPLES 16,722 18,040 Diversified Financials 1.9% McGraw Hill Financial, Inc. 25,000 2,933 4,151 Moody s Corp. 20,600 2,507 2,926 MSCI, Inc. Class A 24,500 2,365 2,698 TOTAL DIVERSIFIED FINANCIALS 7,805 9,775 FINANCIALS 1.0% Berkshire Hathaway, Inc. Class B 27,000 4,422 5,118 HEALTH CARE 1.2% China Biologic Products, Inc. 17,000 2,415 2,776 ResMed, Inc. 36,400 2,448 3,094 TOTAL HEALTH CARE 4,863 5,870 INFORMATION TECHNOLOGY 6.0% Alphabet, Inc. Class A 6,940 5,789 7,321 MasterCard, Inc. Class A 71,200 7,235 9,506 SS&C Technologies Holdings, Inc. 60,600 2,090 2,556 Visa, Inc. Class A 104,570 8,250 11,346 TOTAL INFORMATION TECHNOLOGY 23,364 30,729 Shares Cost Market Value MATERIALS 1.2% Martin Marietta Materials, Inc. 13,600 $ 2,080 $ 3,196 Sherwin Williams Co. 8,500 2,964 3,085 TOTAL MATERIALS 5,044 6,281 TOTAL UNITED STATES OF AMERICA 75,330 91,966 TOTAL EQUITIES 436, ,447 TOTAL INVESTMENT PORTFOLIO 96.2% $436, ,447 NET OTHER ASSETS (LIABILITIES) 3.8% 19,364 NET ASSETS 100% $ 514,811 Presentation Notes Cost amount includes broker commissions and other trading expenses, if any. See accompanying notes which are an integral part of the financial statements. Semi-Annual Reportport 4

5 Investment Valuation The following is a summary of the inputs used, as of September 30, 2016 and March 31, 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 September 30, 2016: Description Total Level 1 Level 2 Level 3 (Amounts in thousands) Investments in Securities: Equities: Consumer Discretionary $ 64,803 $ 44,762 $ 20,041 $ Consumer Staples 109,361 35,000 74,361 Energy 1,884 1,884 Financials 46,816 24,236 22,580 Health Care 93,424 21,777 71,647 Industrials 58,998 37,866 21,132 Information Technology 79,897 46,674 33,223 Materials 26,189 18,623 7,566 Real Estate 12,094 7,349 4,745 Telecommunication Services 1,981 1,981 Total Investments in Securities: $495,447 $240,152 $255,295 $ Valuation Inputs at March 31, 2016: Description Total Level 1 Level 2 Level 3 (Amounts in thousands) Investments in Securities: Equities: Consumer Discretionary $ 62,184 $ 41,754 $ 20,430 $ Consumer Staples 92,478 40,360 52,118 Energy 1,825 1,825 Financials 64,032 50,729 13,303 Health Care 84,505 40,973 43,532 Industrials 50,827 32,348 18,479 Information Technology 65,314 48,959 16,355 Materials 20,170 20,170 Telecommunication Services 1,356 1,356 Total Investments in Securities: $442,691 $278,474 $164,217 $ The following is a summary of transfers between Level 1 and Level 2 for the periods ended September 30, 2016 and March 31, 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: Total Transfers Level 1 to Level 2 $ 78,818 Level 2 to Level 1 $ 28,290 Total Transfers Level 1 to Level 2 $ 29,804 Level 2 to Level 1 $ 27,869 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 units (except per unit amounts) As at September 30, 2016 March 31, 2016 Assets (Note 3) Current assets Investments at fair value through profit or loss $ 495,447 $ 442,691 Cash 17,364 10,169 Receivable for investments sold 1, Other receivables 5 8 Accrued interest and dividends receivable 2,352 2,202 Receivable on sale of units 367 9, , ,857 Liabilities (Note 3) Current liabilities Payable for investments purchased 1, Payable on redemption of units 898 7,864 Other payables and accrued expenses (Notes 4 and 5) ,569 8,306 Net assets attributable to holders of redeemable units (Notes 3 and 6) $ 514,811 $ 456,551 Net assets attributable to holders of redeemable units per Series and per unit (Note 6) Series O: ($514,811 / 37,617 units and $456,551 / 35,649 units, 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 unit amounts) For the six-month periods ended September 30, Investment income (Note 3) Interest $ 2 $ 25 Dividends 7,098 4,785 Net gain (loss) on Investments Net realized gain (loss) on investments 443 7,526 Change in net unrealized appreciation (depreciation) on investments 25,270 (17,673) 25,713 (10,147) Net gain (loss) on Foreign Currencies Net realized gain (loss) on foreign currency transactions (71) 271 Change in net unrealized appreciation (depreciation) on other net assets in foreign currencies 274 (8) Total investment income (loss) 33,016 (5,074) Operating expenses (Note 4) Management and advisory fees Other operating expenses Independent Review Committee fees Commissions and other portfolio costs Sales tax Foreign taxes withheld (Note 5) Total operating expenses Net increase (decrease) in net assets attributable to holders of redeemable units from operations $ 32,513 $ (5,756) Other information: Increase (decrease) in net assets attributable to holders of redeemable units from operations per Series (Note 3) Series O $ 32,513 $ (5,756) Increase (decrease) in net assets attributable to holders of redeemable units from operations per Series per unit (Note 3) Series O $.8875 $ (.1857) 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 Units Amounts in thousands of Canadian Dollars September 30, 2016 Series O Net assets attributable to holders of redeemable units, beginning of period $ 456,551 Redeemable unit transactions (Note 6) Proceeds from sale of redeemable units 53,102 Amounts paid upon redemption of redeemable units (27,355) 25,747 Increase (decrease) in net assets attributable to holders of redeemable units from operations 32,513 Net increase (decrease) in net assets attributable to holders of redeemable units 58,260 Net assets attributable to holders of redeemable units, end of period $ 514,811 Amounts in thousands of Canadian Dollars For the six-month period ended September 30, 2015 Series O Net assets attributable to holders of redeemable units, beginning of period $ 391,716 Redeemable unit transactions (Note 6) Proceeds from sale of redeemable units 71,164 Amounts paid upon redemption of redeemable units (22,408) 48,756 Increase (decrease) in net assets attributable to holders of redeemable units from operations (5,756) Net increase (decrease) in net assets attributable to holders of redeemable units 43,000 Net assets attributable to holders of redeemable units, end of period $ 434,716 See accompanying notes which are an integral part of the financial statements. Semi-Annual Reportport 8

9 Statements of Cash Flows Amounts in thousands of Canadian Dollars For the six-month periods ended September 30, Cash, beginning of period $ 10,169 $ 4,569 Cash flows from (used in) operating activities: Purchases of investments (64,674) (113,829) Proceeds from sale and maturity of investments 37,224 73,432 Cash receipts from dividend income 6,548 4,426 Cash receipts from interest income 2 25 Cash paid for operating expenses (124) (162) Net cash from (used in) operating activities (21,024) (36,108) Cash flows from (used in) financing activities: Proceeds from sales of units 62,274 71,049 Amounts paid upon redemption of units (34,321) (22,530) Net cash from (used in) financing activities 27,953 48,519 Net change in cash 6,929 12,411 Foreign exchange gain (loss) on cash 266 (51) Cash, end of period $ 17,364 $ 16,929 See accompanying notes which are an integral part of the financial statements. 9 Semi-Annual Report

10 Notes to Financial Statements (Unaudited) For the period ended September 30, 2016 (Unaudited) (Amounts in thousands of Canadian dollars/thousands of units (except per unit amounts)) 1. Formation of the Fund Fidelity International Growth Investment Trust (Fund) is a unit trust formed under the laws of Ontario and governed by a Declaration of Trust dated September 26, 2013 (Inception Date), as amended thereafter from time to time. The Fund is authorized to issue an unlimited number of units. 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. 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 units are available to all investors in a deferred sales charge (DSC) option. Series A, Series T5 and Series T8 units will be converted to lower management and advisory fee Series B, Series S5 and Series S8 units, respectively, one year after completion of their redemption schedule. Series T5 and Series T8 units have substantially all the same attributes as the Series A units with the exception that Series T5 and Series T8 units distribute an amount comprised of net income and/or return of capital monthly, if available. Series B, Series D, Series S5 and Series S8 units are available to all investors in an initial sales charge (ISC) option. Series S5 and Series S8 units have substantially all the same attributes as the Series B units with the exception that Series S5 and Series S8 units distribute an amount comprised of net income and/or return of capital monthly, if available. Series C and Series D units are available to investors who have enrolled in the rebalancing service. Series F, Series F5 and Series F8 units 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 units have substantially all the same attributes as the Series F units with the exception that Series F5 and Series F8 units 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 units are available only to investors who initially hold Series B and/or Series S5 units and then become eligible to hold certain Series E units. Series E1, Series E1T5, Series E2, Series E2T5, Series E3, Series E3T5, Series E4, Series E4T5, Series E5 and Series E5T5 units have lower combined management and administration fees than Series B or Series S5 units. Series E1T5, Series E2T5, Series E3T5, Series E4T5 and Series E5T5 units have the same attributes as the other Series E units with the exception that Series E1T5, Series E2T5, Series E3T5, Series E4T5 and Series E5T5 units 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 units are available only to investors who initially hold Series F and/or Series F5 units and then become eligible to hold certain Series P units. Series P1, Series P1T5, Series P2, Series P2T5, Series P3, Series P3T5, Series P4, Series P4T5, Series P5 and Series P5T5 units have lower combined management and administration fees than Series F or Series F5 units. Series P1T5, Series P2T5, Series P3T5, Series P4T5 and Series P5T5 units have the same attributes as the other Series P units with the exception that Series P1T5, Series P2T5, Series P3T5, Series P4T5 and Series P5T5 units distribute an amount comprised of net income and/or return of capital monthly, if available. Series O units 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 units 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 units have substantially all the same attributes as the Series I units with the exception that Series I5 and Series I8 units distribute an amount comprised of net income and/or return of capital monthly, if available. This Fund offers Series O units, which are only available to other Fidelity products and are not available for public purchase. The Fund meets the definition of an investment entity and its purpose is to provide investment management services to its unitholders 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 November 8, 2016, 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 March 31, 2017 could result in restatement of these interim financial statements. Functional and Presentation Currency These financial statements are presented in Canadian dollars, which is the Fund s functional currency. Semi-Annual Reportport 10

11 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 September 30, 2016 and March 31, 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 units as financial liabilities in accordance with IAS 32 Financial Instruments Presentation (IAS 32). These judgments centre upon the determination that the Fund s redeemable units 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 unitholder) and, therefore, the ongoing redemption feature is not the units 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. Information on transfers between Level 1 and Level 2 for the period ended September 30, 2016 and March 31, 2016, is included at the end of the Fund s Schedule of Investments. The aggregate value of investments by input level, as at September 30, 2016 and March 31, 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. 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 September 30, 2016 and March 31, Semi-Annual Report

12 Notes to Financial Statements (Unaudited) continued (Amounts in thousands of Canadian dollars/thousands of units (except per unit amounts)) 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, unit 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 shortterm nature. Classification of redeemable units issued by the Fund In accordance with IAS 32, the Fund s redeemable units 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 unitholder) and, therefore, the ongoing redemption feature is not the units only contractual obligation. Therefore, the Fund s redeemable units 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 units is recorded at the redemption amount. As at September 30, 2016 and March 31, 2016, the Fund s net asset value per unit may differ by less than $0.01 from its net assets attributable to holders of redeemable units per unit 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 taxes are estimated based on the Fund s understanding of the tax rules and actual rates that exist in the foreign markets in which it invests. Investment income is recorded gross of foreign taxes withheld. 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. Per Unit from Operations - The increase (decrease) in net assets attributable to holders of redeemable units resulting from operations per unit in the Statements of Comprehensive Income represent the increase (decrease) in net assets attributable to holders of redeemable units resulting from operations for the Fund, divided by the weighted average units outstanding for the Fund during the period as follows: Weighted Average Units Period ended September 30, 2016 Series O 36,633 Period ended September 30, 2015 Series O 31,006 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 Semi-Annual Reportport 12

13 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 has not yet determined when it will adopt the new standard. 4. Expenses and Other Related Party Transactions Management and Advisory Fees Fidelity serves as the manager and investment advisor of the Fund. Fidelity has entered into a sub advisory agreement with a number of entities including FMR Co., Inc., an affiliate of Fidelity, to provide investment advice with respect to all or a portion of the investments of the Fund. 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 the Fund, calculated daily and payable monthly. No management and advisory fees are charged with respect to the Series O units. 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 units. 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 HST liability or refund is calculated using the residency of unitholders 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 the Fund is based on the unitholders 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. Other Operating Expenses - Fidelity is responsible for the payment of all expenses relating to the operation of the Fund except for brokerage commissions, interest charges and taxes which are paid by the Fund. Commissions and Other Portfolio Costs - Commissions and other portfolio costs paid for security transactions during the period were $105 (September 30, 2015: $154), of which $- (September 30, 2015: $-) were paid to brokerage firms that are affiliates of Fidelity. 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 $15 (September 30, 2015: $113) 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 $37 (September 30, 2015: $60). 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 unit 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 unitholders 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. The Fund is subject to foreign withholding taxes imposed by certain countries on investment income. 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. In addition, certain countries apply withholding taxes on capital gains on investments and such taxes are accrued against the relevant security and included in other payables and accrued expenses. The taxes paid on realized gains from sales of securities paid by the Fund and the accrued tax liability on unrealized gains on securities subject to withholding taxes are included in Foreign taxes withheld and Change in net unrealized appreciation (depreciation) on investments in the Statements of Comprehensive Income, respectively. At period end, the accrued tax liability on unrealized gains was as follows: 13 Semi-Annual Report

14 Notes to Financial Statements (Unaudited) continued (Amounts in thousands of Canadian dollars/thousands of units (except per unit amounts)) September 30, March 31, 2016 ($) 2016 ($) Accrued tax liability on unrealized gains 4 Distributions are taxable in unitholders 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 units outstanding. 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 Units 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 units of equal value, with no par value. All units in a series of the Fund rank equally with respect to distributions. A unitholder of the Fund is entitled to one vote for each one dollar in value of units owned. Fractional units are proportionately entitled to these rights. The Fund generally has no restrictions or specific capital requirements on the subscriptions and redemptions of units other than minimum subscription requirements; although, on rare occasions, Fidelity may temporarily suspend unitholders right to redeem units and postpone paying sale proceeds. The relevant movements attributable to unitholders are shown in the Statements of Changes in Net Assets Attributable to Holders of Redeemable Units. 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. Unit Transactions - Unit transactions for each Series were as follows: Units Outstanding, Beginning of Period Issued Reinvested Redeemed Units Outstanding, End of Period Period ended September 30, 2016 Series O 35,649 4,058 (2,090) 37,617 Period ended September 30, 2015 Series O 29,512 5,285 (1,678) 33,119 Affiliated Ownership - As at September 30, 2016, Fidelity and its affiliates held 100% of the Fund. As at March 31, 2016, Fidelity and its affiliates held 100% 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 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. Semi-Annual Reportport 14

15 The Fund aims to seek long-term capital appreciation by investing primarily in equity securities of companies that have their principal business activities or interests outside of the United States and Canada. The Fund s benchmark is the MSCI EAFE Growth 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. 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 September 30, 2016 and March 31, Other than outlined above, there were no significant concentrations of credit risk to counterparties as at September 30, 2016 and March 31, 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 tables summarize the investment concentration risks that are relevant for the Fund based on its investment objective. Sector Mix % of Fund s Net Assets as at 9/30/16 % of Fund s Net Assets as at 3/31/16 Consumer Staples Health Care Information Technology Consumer Discretionary Industrials Financials Materials Real Estate Diversified Financials 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. Geographic Mix % of Fund s Net Assets as at 9/30/16 % of Fund s Net Assets as at 3/31/16 United States of America Japan Switzerland United Kingdom Spain Sweden Belgium Australia Germany Ireland Denmark Hong Kong South Africa Austria France Netherlands Canada Semi-Annual Report

16 Notes to Financial Statements (Unaudited) continued (Amounts in thousands of Canadian dollars/thousands of units (except per unit amounts)) % of Fund s Net Assets as at 9/30/16 % of Fund s Net Assets as at 3/31/16 Others (Individually Less Than 1%) Cash and Short-Term Investments Net Other Assets (Liabilities) 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 units. Redeemable units are redeemed on demand at the unitholder s option based on the Fund s net asset value per unit (NAVPU) 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 September 30, 2016 and March 31, 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 September 30, 2016 and March 31, 2016, with all other variables held constant, the net assets attributable to holders of redeemable units of the Fund would have increased or decreased by approximately $24,772 (March 31, 2016: $22,135). 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. 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. Semi-Annual Reportport 16

17 17 Semi-Annual Report

18 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 units 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-IGIT-SANN-1116