Fidelity ClearPath 2045 Portfolio

Transcription

1 Fidelity ClearPath 45 Portfolio Annual Management Report of Fund Performance June 3,

2 Caution Regarding Forward-looking Statements Certain portions of this report, including, but not limited to, Results of Operations and Recent Developments, may contain forward-looking statements about the Fund, including its strategy, risks, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates and similar forward-looking expressions or negative versions thereof. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Accordingly, assumptions concerning future economic and other factors may prove to be incorrect at a future date. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. It should be stressed that the above-mentioned list of important factors is not exhaustive. You are encouraged to consider these and other factors carefully before making any investment decisions and you are urged to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Report of Fund Performance.

3 Annual Management Report of Fund Performance as at June 3, Fidelity ClearPath 45 Portfolio This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements for the investment fund. You can get a copy of the annual financial statements at your request, and at no cost, by calling , by writing to us at Fidelity Investments, 483 Bay St. Suite 3, Toronto ON M5G 2N7 or by visiting our website at or SEDAR at Securityholders may also contact us using one of these methods to request a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record or quarterly portfolio disclosure relating to the investment fund. Management Discussion of Fund Performance Investment Objective and Strategies: Investment Objective: Fidelity ClearPath 45 Portfolio (Fund) aims to achieve high total investment return. The Fund uses a dynamic asset allocation strategy and invests primarily in underlying funds. These underlying funds will generally invest in equity securities, fixed-income securities and/or money market instruments. From inception, through to its target date in 45 and for a period of approximately years thereafter, an increasing proportion of the Fund s assets are invested in securities of fixed-income funds and money market funds. When the Fund s asset allocation is substantially similar to that of Fidelity ClearPath Income Portfolio, it is expected that the Fund will, on prior notice to investors, and on a date determined by Fidelity, be combined with Fidelity ClearPath Income Portfolio, and the Fund s securityholders will become securityholders of Fidelity ClearPath Income Portfolio. Strategies: The Fund invests primarily in underlying funds, including other Fidelity Funds and ETFs. The Fund is managed in accordance with its current neutral mix of assets, which includes underlying funds that generally invest in equity securities, fixed-income securities and/or money market investments (i.e., its current neutral mix). The neutral mix will change over time as the Fund s target date approaches and afterwards. The portfolio managers may change the funds invested in, or the percentage of the Fund s assets invested in any particular fund, at any time. The Fund may invest in underlying funds that invest in any kind of equity or fixed-income security or money market instrument. This includes high-yield securities and other lower-quality debt securities. This also includes Canadian, U.S. or international securities. The Fund s current neutral mix is approximately as follows: equity 92% and fixed-income 8%. Depending on market conditions, the portfolio managers may vary the Fund s actual asset allocation by up to +/-% from the current neutral mix if they believe this will produce the best overall return. The Fund s expected neutral mix on or about its target date is approximately as follows: equity 49%, fixed-income 43% and money market instruments and short-term bonds 8%. The Fund s expected neutral mix on or about the time it is anticipated to combine with Fidelity ClearPath Income Portfolio is approximately as follows: equity 21%, fixed-income 35% and money market instruments and short-term bonds 44%. The Fund may also invest a portion of its assets in securities of ETFs. Underlying Fidelity Funds may invest in securities of other funds, including ETFs. Risk The risks associated with investing in the Fund remain as discussed in the prospectus. Any changes to the Fund over the period have not affected the overall level of risk of the Fund. The Fund is designed for investors who are planning on retiring around 45, want to gain exposure to both equity and fixed-income securities, want the convenience of a diversified portfolio in a single fund, and can handle the volatility of returns generally associated with equity investments. Investors in the Fund should be able to accept a medium level of risk. The suitability of the investment has not changed from what has been disclosed in the prospectus. Results of Operations Fidelity ClearPath 45 Portfolio, Series B, returned 7.4% after fees and expenses, for the one-year period ended June 3,. The net returns of the other series of this Fund are similar to those of Series B, except for differences attributable to expense structures. By way of comparison, the S&P/TSX Composite Index, broadly representative of Canadian equities, returned.4% for the period under review. Canadian investment-grade bonds, as measured by the FTSE TMX Canada Universe Bond Index, returned.8% for the period under review. Market overview: During the first half of the review period, Canadian equities underperformed global markets, weighed down by uncertainty over NAFTA renegotiations, imposition of tariffs on aluminum and steel exports, and high consumer debt levels. The potential collapse of NAFTA could hurt shares of auto parts, railroad and energy companies that depend on trade with the U.S. In the second half of the period, energy stocks gained ground, supported by higher crude oil prices. Rising interest rates and higher commodity prices boosted cyclical stocks that make up nearly 65% of Canadian equities. The Canadian economy performed slightly weaker than expectations, with GDP growing at 1.3% in the first quarter of. Canadian fixed income markets registered positive returns during the review period, but lagged equity markets. The Bank of Canada increased its target overnight rate three times by a total of.75% to 1.25%, citing mounting inflationary pressures and robust economic data as the main reasons for the hikes. The Bank, however, expressed caution on the potential negative impact of NAFTA s uncertain future having spillover effects on trade and business investments in Canada. GDP growth in the first quarter of was weaker than expected, but it is expected to rebound in the second quarter. Additionally, Canada s unemployment rate stood at 5.8% in May and wage growth began to pick up during the period. The annual inflation rate accelerated to 2.2% in May mainly due to higher gasoline prices, exceeding the Bank of Canada s inflation target of 2.%. As a result, the Bank of Canada believes higher interest rates will be needed to keep inflation in line with its target. Factors affecting performance: 1

4 Fidelity ClearPath 45 Portfolio Management Discussion of Fund Performance continued The Fund s benchmark returned 11.1% for the period under review. At the end of the review period, the Fund s benchmark was a blended index composed of approximately 34.5% Russell 3 Index, 34.5% MSCI EAFE + EM Index, 23.% S&P/TSX Capped Composite Index and 7.9% FTSE TMX Canada Universe Bond Index. The Fund underperformed its benchmark. Asset allocation was positive with the overweight to emerging market equity and the underweight to Canadian Investment Grade contributing the most. An underweight to U.S. Equity, the strongest performing asset class in the period dampened results. Stock selection overall detracted with the Fund s underlying Canadian, U.S. and international equity strategies underperforming their benchmarks. The relative performance of the underlying managers was mixed. Most notable was the underperformance of the Fidelity Canadian Large Cap Fund and Fidelity International Disciplined Equity Fund and the outperformance of the Fidelity Canadian Bond Fund. Portfolio changes: During the review period, the portfolio managers continued to dynamically de-risk the Fund s equity exposure into fixed-income and short-term securities each month. The investment team also added inflation-protected debt securities into the strategic mix and initiated exposure to Canadian real return bonds. This decision reflects the team s intermediate market return and risk expectations. Fidelity ClearPath Retirement Portfolios are managed using a proprietary asset allocation model to guide and determine the most efficient transformation of the Fund from its current allocation toward a more conservative neutral asset mix to be achieved approximately twenty years after its target date. The portfolio managers monitor total Fund exposures and risks on a daily basis to seek to ensure that the Fund remains near to its prescribed allocation; however, they may deviate if they believe this will produce the best overall return. Derivative disclosure: The Fund and the underlying funds may use derivatives such as options, futures contracts, forward contracts and swaps to hedge against losses caused by changes in security prices or exchange rates. They may also use derivatives as a substitute for a stock, stock market or other security, which is known as a non-hedging purpose. Recent Developments Portfolio co-managers Andrew Dierdorf and Brett Sumsion continue to monitor and adjust the Fund s asset mix to meet its changing and more conservative target allocations over time. The proprietary long-term asset allocation strategy is frequently reviewed to potentially improve its process. The purpose of this review is to seek to ensure that the Fund s asset mix is optimized to meet its fundamental investment objectives, and to confirm that the Fund s targeted risk and return characteristics remain consistent. The portfolio managers invest primarily in underlying Fidelity Funds that invest primarily in a mix of equity securities and fixed-income securities. During the reporting period, the investment team added inflation-protected debt securities into the strategic mix and initiated exposure to Canadian real return bonds. The glide path, or dynamic shift from equities to fixed-income and short-term securities, was also marginally changed, resulting in a lower equity allocation at retirement. The investment team continues to favour the secular outlook for equities over fixed-income securities. The Fund continues to allocate less than the benchmark to investment-grade debt, and more to international equities, particularly in the emerging markets. The investment team also remains committed to high-yield and corporate debt securities and continues to allocate a small out-of-benchmark position. Related Party Transactions Manager and Portfolio Adviser The Fund is managed by Fidelity Investments Canada ULC (Fidelity). Fidelity is part of a broader collection of companies collectively known as Fidelity Investments. Fidelity provides or arranges for the provision of all general management and administrative services required by the Fund in its day to day operations, bookkeeping, record keeping and other administrative services for the Fund. Fidelity is the portfolio adviser to the Fund and it provides investment advisory services to the Fund. Fidelity has entered into sub-advisory agreements with a number of entities including FMR Co., Inc., to provide investment advice with respect to all or a portion of the investments of the Fund. The sub-advisors arrange for acquisition and disposition of portfolio investments, including all necessary brokerage arrangements. The Fund pays Fidelity a monthly management and advisory fee for their services, based on the net asset value of each Series, calculated daily and payable monthly. The Fund paid Fidelity management and advisory fees of $1,845, for the period ended June 3,. Administration Fee Fidelity charges the Fund a fixed administration fee in place of certain variable expenses. Fidelity, in turn, pays all of the operating expenses of the Fund, other than certain specified fund costs (e.g. the fees and expenses of the Independent Review Committee, taxes, brokerage commissions and interest charges). The Fund pays an annual rate, which is calculated on a tiered basis, based on the net asset value of each Series, calculated daily and payable monthly. The Fund paid Fidelity administration fees of $3, for the period ended June 3,. 2

5 Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the period end of the years shown. This information is derived from the Fund s audited annual and/or unaudited semi-annual financial statements. Please see the front page for information about how you can obtain the Fund s annual or semi-annual financial statements. Fidelity ClearPath 45 Portfolio Series A Periods ended June 3, Net assets, beginning of period B $ $ $ 17.1 $ 15.6 $ 13.3 Total revenue Total expenses (excluding distributions) (.45) (.43) (.41) (.41) (.36) Realized gains (losses) Unrealized gains (losses) (1.87) Total increase (decrease) from operations B (.31) From net investment income (excluding dividends) (.6) (.9) (.3) (.1) From dividends (.3) (.4) (.6) (.4) From capital gains (.15) (.74) (.28) (.) Return of capital Total distributions B,C (.24) (.87) (.37) (.14) Net assets, end of period B $ $ $ $ 17.1 $ 15.6 Net asset value (s) D $ 23,753 $ 25,13 $ 25,44 $ 28,314 $ 26,954 Securities outstanding D 1,28,834 1,435,6 1,554,576 1,656,96 1,727,496 Management expense ratio E,F 2.48% 2.49% 2.49% 2.48% 2.5% Management expense ratio before waivers or absorptions E,F 2.5% 2.5% 2.5% 2.5% 2.5% Trading expense ratio G.15%.13%.%.%.14% Portfolio turnover rate H 12.25% 12.34% 72.3% 4.23% 2.88% Net asset value per security, end of period $ $ $ $ $ Fidelity ClearPath 45 Portfolio Series B Periods ended June 3, Net assets, beginning of period B $ $ $ $ $ Total revenue Total expenses (excluding distributions) (.41) (.39) (.38) (.38) (.34) Realized gains (losses) Unrealized gains (losses) (1.87) Total increase (decrease) from operations B (.22) From net investment income (excluding dividends) (.7) (.) (.3) (.1) From dividends (.3) (.5) (.7) (.5) From capital gains (.18) (.78) (.31) (.12) Return of capital Total distributions B,C (.28) (.93) (.41) (.17) Net assets, end of period B $ 18.8 $ $ $ $ Net asset value (s) D $ 72,363 $ 6,949 $ 52,16 $ 46,737 $ 34,373 Securities outstanding D 3,85,852 3,429,62 3,134,558 2,78,45 2,171,286 Management expense ratio E,I 2.28% 2.28% 2.28% 2.28% 2.29% Management expense ratio before waivers or absorptions E,I 2.28% 2.29% 2.28% 2.29% 2.29% Trading expense ratio G.15%.13%.%.%.14% Portfolio turnover rate H 12.25% 12.34% 72.3% 4.23% 2.88% Net asset value per security, end of period $ $ $ $ $

6 Financial Highlights continued Fidelity ClearPath 45 Portfolio Series F Periods ended June 3, Net assets, beginning of period B $ $ $ $ $ Total revenue Total expenses (excluding distributions) (.23) (.21) (.) (.) (.19) Realized gains (losses) Unrealized gains (losses) (1.96) Total increase (decrease) from operations B From net investment income (excluding dividends) (.13) (.13) (.5) (.2) (.3) From dividends (.6) (.6) (.) (.11) (.11) From capital gains (.33) (1.1) (.5) (.26) Return of capital Total distributions B,C (.52) (1.) (.65) (.39) (.14) Net assets, end of period B $ $ $ $ $ Net asset value (s) D $ 5,37 $ 4,43 $ 4,512 $ 3,155 $ 1,322 Securities outstanding D 27, , , ,326 78,939 Management expense ratio E,F 1.17% 1.17% 1.14% 1.13% 1.19% Management expense ratio before waivers or absorptions E,F 1.17% 1.17% 1.17% 1.19% 1.19% Trading expense ratio G.15%.13%.%.%.14% Portfolio turnover rate H 12.25% 12.34% 72.3% 4.23% 2.88% Net asset value per security, end of period $ $ $ $ $ Fidelity ClearPath 45 Portfolio Series O Periods ended June 3, Net assets, beginning of period B $ 17.8 $ $ $ $ Total revenue Total expenses (excluding distributions) Realized gains (losses) Unrealized gains (losses) (1.85) Total increase (decrease) from operations B From net investment income (excluding dividends) (.17) (.14) (.6) (.2) (.6) From dividends (.8) (.7) (.13) (.16) (.25) From capital gains (.46) (1.14) (.62) (.37) Return of capital Total distributions B,C (.71) (1.35) (.81) (.55) (.31) Net assets, end of period B $ $ 17.8 $ $ $ Net asset value (s) D $ 186,781 $ 145,613 $ 8,453 $ 83,927 $ 52,469 Securities outstanding D 9,923,294 8,177,849 6,252,613 4,835,42 3,31,464 Management expense ratio % % % % % Management expense ratio before waivers or absorptions % % % % % Trading expense ratio G.15%.13%.%.%.14% Portfolio turnover rate H 12.25% 12.34% 72.3% 4.23% 2.88% Net asset value per security, end of period $ $ $ $ $

7 Fidelity ClearPath 45 Portfolio Series E1 Periods ended June 3, J Net assets, beginning of period B $ $.38 $. Total revenue Total expenses (excluding distributions) (.25) (.24) (.9) Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations B From net investment income (excluding dividends) (.5) (.6) From dividends (.2) (.3) From capital gains (.12) (.5) Return of capital Total distributions B,C (.19) (.59) Net assets, end of period B $ $ $.38 Net asset value (s) D $ 4,966 $ 4,66 $ 1,554 Securities outstanding D 422, ,36 149,714 Management expense ratio E,K 2.19% 2.18% 2.17% Management expense ratio before waivers or absorptions E,K 2.19% 2.19% 2.17% Trading expense ratio G.15%.13%.% Portfolio turnover rate H 12.25% 12.34% 72.3% Net asset value per security, end of period $ $ $.383 Fidelity ClearPath 45 Portfolio Series E2 Periods ended June 3, J Net assets, beginning of period B $ $.38 $. Total revenue Total expenses (excluding distributions) (.24) (.22) (.9) Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations B From net investment income (excluding dividends) (.5) (.6) From dividends (.2) (.3) From capital gains (.13) (.51) Return of capital Total distributions B,C (.) (.6) Net assets, end of period B $ $ $.38 Net asset value (s) D $ 86 $ 461 $ 2 Securities outstanding D 73,143 41,491 9,811 Management expense ratio E,K 2.7% 2.4% 2.17% Management expense ratio before waivers or absorptions E,K 2.8% 2.4% 2.17% Trading expense ratio G.15%.13%.% Portfolio turnover rate H 12.25% 12.34% 72.3% Net asset value per security, end of period $ $ $

8 Financial Highlights continued Fidelity ClearPath 45 Portfolio Series E3 Periods ended June 3, J Net assets, beginning of period B $ $.39 $. Total revenue Total expenses (excluding distributions) (.24) (.22) (.8) Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations B From net investment income (excluding dividends) (.5) (.6) From dividends (.2) (.3) From capital gains (.13) (.51) Return of capital Total distributions B,C (.) (.6) Net assets, end of period B $ $ $.39 Net asset value (s) D $ 34 $ 25 $ 66 Securities outstanding D 2,97 2,273 6,377 Management expense ratio E,K 2.7% 2.1% 2.2% Management expense ratio before waivers or absorptions E,K 2.7% 2.1% 2.2% Trading expense ratio G.15%.13%.% Portfolio turnover rate H 12.25% 12.34% 72.3% Net asset value per security, end of period $ $ $.3883 Fidelity ClearPath 45 Portfolio Series E4 Periods ended June 3, J Net assets, beginning of period B $ $.39 $. Total revenue Total expenses (excluding distributions) (.23) (.22) (.8) Realized gains (losses) Unrealized gains (losses) Total increase (decrease) from operations B From net investment income (excluding dividends) (.5) (.7) From dividends (.2) (.3) From capital gains (.13) (.52) Return of capital Total distributions B,C (.) (.62) Net assets, end of period B $ $ $.39 Net asset value (s) D $ 94 $ 7 $ 1 Securities outstanding D 7,974 6,39 Management expense ratio E,K 1.98% 2.5% 2.2% Management expense ratio before waivers or absorptions E,K 1.98% 2.5% 2.2% Trading expense ratio G.15%.13%.% Portfolio turnover rate H 12.25% 12.34% 72.3% Net asset value per security, end of period $ $ $

9 Fidelity ClearPath 45 Portfolio Series P1 Periods ended June 3, L Net assets, beginning of period B $.3 $ 9.63 $. Total revenue Total expenses (excluding distributions) (.11) (.11) (.6) Realized gains (losses) Unrealized gains (losses) (.25) Total increase (decrease) from operations B From net investment income (excluding dividends) (.7) (.7) (.3) From dividends (.3) (.3) (.6) From capital gains (.19) (.56) (.27) Return of capital Total distributions B,C (.29) (.66) (.36) Net assets, end of period B $.89 $.3 $ 9.63 Net asset value (s) D $ 1,476 $ 1,529 $ 95 Securities outstanding D 135, ,472 9,837 Management expense ratio E,M 1.8% 1.% 1.9% Management expense ratio before waivers or absorptions E,M 1.8% 1.% 1.% Trading expense ratio G.15%.13%.% Portfolio turnover rate H 12.25% 12.34% 72.3% Net asset value per security, end of period $.8921 $.2985 $ Fidelity ClearPath 45 Portfolio Series P2 Periods ended June 3, L Net assets, beginning of period B $.31 $ 9.64 $. Total revenue Total expenses (excluding distributions) (.11) (.) (.5) Realized gains (losses) Unrealized gains (losses).22 (1.1).27 Total increase (decrease) from operations B.63 (.81).47 From net investment income (excluding dividends) (.7) (.7) (.3) From dividends (.3) (.3) (.6) From capital gains (.19) (.57) (.27) Return of capital Total distributions B,C (.29) (.67) (.36) Net assets, end of period B $.9 $.31 $ 9.64 Net asset value (s) D $ 57 $ 2 $ 27 Securities outstanding D 52,236,398 2,844 Management expense ratio E,M 1.1% 1.2% 1.1% Management expense ratio before waivers or absorptions E,M 1.1% 1.2% 1.1% Trading expense ratio G.15%.13%.% Portfolio turnover rate H 12.25% 12.34% 72.3% Net asset value per security, end of period $.943 $.399 $

10 Financial Highlights continued Fidelity ClearPath 45 Portfolio Series P3 Periods ended June 3, N Net assets, beginning of period B $.64 $. Total revenue.14.1 Total expenses (excluding distributions) (.11) (.5) Realized gains (losses).36.9 Unrealized gains (losses) Total increase (decrease) from operations B From net investment income (excluding dividends) (.8) From dividends (.4) From capital gains (.) Return of capital Total distributions B,C (.32) Net assets, end of period B $ $.64 Net asset value (s) D $ 1 $ 24 Securities outstanding D 3 2,214 Management expense ratio E,O.98%.99% Management expense ratio before waivers or absorptions E,O.98%.99% Trading expense ratio G.15%.13% Portfolio turnover rate H 12.25% 12.34% Net asset value per security, end of period $ $

11 Financial Highlights Footnotes A This information is derived from the Fund s audited annual and/or unaudited interim financial statements. Periods beginning on or after January 1, follow International Financial Reporting Standards (IFRS) and periods prior to January 1, follow Canadian Generally Accepted Accounting Principles (Canadian GAAP). The net assets attributable to securityholders per security presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. An explanation of these differences can be found in the notes to financial statements. For reporting periods ending after January 1, per security comparative figures (except for net asset value per security, end of period) have been conformed to the current rounding presentation of two decimal places. As a result, reporting periods ending prior to January 1, may not foot due to this rounding change. B Net assets and distributions are based on the actual number of securities outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of securities outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per security. C Distributions were paid in cash or reinvested in additional securities of the Fund, or both, and excludes any applicable distributions of management fee reduction to securityholders. Distributions are presented based on management s best estimate of the tax character. D This information is provided as at period end of the year shown. E Management expense ratio is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset values during the period, including the Fund s pro-rata share of estimated expenses incurred in any underlying investment fund, if applicable. F Effective November 1,, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. A portfolio turnover rate of % is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. For periods greater than six months, but less than a full fiscal year, the portfolio turnover rate is annualized. I Effective October 1,, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. J For the period February 5, (commencement of sale of securities) to June 3,. K Effective February 9,, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. L For the period December 4, (commencement of sale of securities) to June 3,. M Effective December 8,, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. N For the period January 6, (commencement of sale of securities) to June 3,. O Effective January,, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. 9

12 Management and Advisory Fees Fidelity serves as manager and investment advisor of the Fund. The Fund pays Fidelity a monthly management and advisory fee for their services, based on the net asset value of each Series, calculated daily and payable monthly. Fidelity uses these management fees to pay for sales and trailing commissions to registered dealers on the distribution of the Fund securities, as well as for the general investment management expenses. Dealer compensation represents cash commissions paid by Fidelity to registered dealers during the period and includes upfront deferred sales charge and trailing commissions. This amount may, in certain circumstances, exceed % of the fees earned by Fidelity during the period. For new Funds or Series the amounts presented may not be indicative of longer term operating periods. Management Fees Dealer Compensation Investment management, administration and other Series A 2.% 47.64% 52.36% Series B 1.85% 54.5% 45.95% Series F.85%.% Series E % 54.79% 45.21% Series E2 1.8% 55.56% 44.44% Series E % 56.34% 43.66% Series E % 57.97% 42.3% Series P1.825%.% Series P2.8%.% Series P3.775%.%

13 Fidelity ClearPath 45 Portfolio Past Performance The performance information shown assumes that all distributions made by the Fund in the periods shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution or other optional charges that would have reduced returns or performance. How the Fund has performed in the past does not necessarily indicate how it will perform in the future. The performance data shown for the period occurring prior to the commencement of operations of a series P or E is that of the corresponding series F or F5 (for series P) or B or S5 (for series E). Series F, F5, B and S5 have higher combined management and administration fees than the applicable series P and E. Had a series P or E existed since the commencement of operations of series F, F5, B or S5, the returns of the applicable series P or E would have been higher. Year-by-Year Returns The following bar chart shows the Fund s annual performance for each of the years shown, and illustrates how the Fund s performance was changed from year to year. In percentage terms, the bar chart shows how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year. Series A Series O Series B Commencement of Operations is August 13, 8 Series E Series F -3 Commencement of Operations is February 5, Series E Commencement of Operations is February 5, 11

14 Fidelity ClearPath 45 Portfolio Past Performance continued Series E3 Series P Commencement of Operations is February 5, Series E4 Commencement of Operations is December 4, Series P Commencement of Operations is February 5, Commencement of Operations is January 6, Series P Commencement of Operations is December 4, Annual Compound Returns This table shows the Fund s historical annual compound total returns for the periods indicated, compared with a broad-based index, the S&P/TSX Composite Index, and the Fund s benchmark, as described below. 12

15 Average Annual Total Returns Fidelity ClearPath 45 Portfolio - Series A 7.2% 5.9% 9.4% 5.9% n/a Fidelity ClearPath 45 Portfolio - Series B 7.4% 6.1% 9.6% 6.2% n/a Fidelity ClearPath 45 Portfolio - Series F 8.6% 7.3%.8% 7.3% n/a Fidelity ClearPath 45 Portfolio - Series O 9.8% 8.6% 12.1% n/a 9.2% Fidelity ClearPath 45 Portfolio - Series E1 7.4% 6.2% 9.6% 6.2% n/a Fidelity ClearPath 45 Portfolio - Series E2 7.6% 6.3% 9.7% 6.2% n/a Fidelity ClearPath 45 Portfolio - Series E3 7.6% 6.3% 9.7% 6.2% n/a Fidelity ClearPath 45 Portfolio - Series E4 7.7% 6.4% 9.7% 6.3% n/a Fidelity ClearPath 45 Portfolio - Series P1 8.7% 7.4%.9% 7.4% n/a Fidelity ClearPath 45 Portfolio - Series P2 8.8% 7.5%.9% 7.4% n/a Fidelity ClearPath 45 Portfolio - Series P3 8.9% 7.4%.9% 7.4% n/a Fidelity ClearPath 45 Portfolio Blend Index 11.1% 8.2%.7% 6.6% 7.% S&P/TSX Composite Index.4% 7.% 9.2% 4.2% 5.1% A discussion of the performance of the Fund can be found in the Results of Operations section of this report. In the above table, we compare the Fund s annual compound returns with a broad index, the S&P/TSX Composite Index, and with a narrow index a blended index made up of: approximately 34.5% Russell 3 Index, 34.5% MSCI EAFE + EM Index, 23.% S&P/TSX Capped Composite Index and 7.9% FTSE TMX Canada Universe Bond Index. Effective July 1,, the Dow Jones U.S. Total Stock Market Index was replaced with the Russell 3 Index, and the MSCI EAFE Index was replaced with the MSCI EAFE + EM Index. The S&P/TSX Composite Index is an index of stocks that are generally considered to represent the Canadian equity market. The S&P/TSX Capped Composite Index is the same as the S&P/TSX Composite index except that it is adjusted quarterly so that no single stock has a relative weight in the index greater than.%. The Dow Jones U.S. Total Stock Market Index measures the performance of all U.S. equity securities with readily available prices. Dow Jones Indexes has elected to allow the Dow Jones Wilshire Indexes to be discontinued effective March 31,. The Russell 3 Index measures the performance of the largest 3, U.S. companies representing approximately 98.% of the investable U.S. equity market. The MSCI EAFE Index is a free float-adjusted market capitalization weighted index designed to measure developed market equity performance, excluding Canada and the U.S. The MSCI EAFE Index is composed of companies representative of the market structure of Developed Market countries. The MSCI EAFE + EM Index are a free-float weighted equity index. As of January 1,, DEX was rebranded FTSE TMX Canada as a result of a merger of fixed-income businesses between FTSE Group and TMX Group. The benchmark s methodology remains the same. The FTSE TMX Canada Universe Bond Index is capitalization-weighted, with more than 95 Canadian bonds, and includes the highest quality bonds with terms-to-maturity of one to thirty years, designed to reflect the Canadian bond market. Effective October 22, 7, the Scotia Capital Universe Bond Index was renamed the DEX Universe Bond Index. The ICE BofAMLUS High Yield Constrained Index is a market value weighted index of U.S. currency high-yield bonds issued by U.S. and non-u.s. issuers, including deferred interest bonds and payment-in-kind securities. Issues included in the index have maturities of one year or more and have a credit rating lower than BBB-/Baa3, but are not in default. The index imposes a fixed limit on the maximum concentration of any individual issuer to 2.%. Effective September 25,, the Merrill Lynch indices were re-branded The BankofAmerica Merrill Lynch indices. The FTSE EPRA/NAREIT Developed Index series is designed to reflect the stock performance of companies engaged in specific aspects of the North American, European and Asian Real Estate markets. According to a survey conducted by ABN AMRO, the index is used by 75.% of global real estate investors and managers. Each Series will have different returns because of differences in management fees and expenses. Past 1 year Past 3 years Past 5 years Past years Since Inception 13

16 Fidelity ClearPath 45 Portfolio Summary of Investment Portfolio as at June 3, Asset Mix % of Fund s Net Assets as at 6/3/18 % of Fund s Net Assets as at 6/3/17 Foreign Equities Canadian Equities Canadian Bonds Foreign Bonds Cash and Cash Equivalents Net Other Assets (Liabilities) (.3) 2.4 Geographic Mix % of Fund s Net Assets as at 6/3/18 % of Fund s Net Assets as at 6/3/17 United States of America Canada United Kingdom Germany Japan Cayman Islands France India Korea (South) Switzerland Sweden Netherlands Brazil Hong Kong Others (Individually Less Than 1%) Cash and Cash Equivalents Net Other Assets (Liabilities) (.3) 2.4 Maturity Diversification Years % of Fund s Net Assets as at 6/3/18 % of Fund s Net Assets as at 6/3/ Over Quality Diversification % of Fund s Net Assets as at 6/3/18 % of Fund s Net Assets as at 6/3/17 AAA AA A BBB BB and Below Not Rated.2.3 Equities Short-Term Investments and Net Other Assets We have used ratings from Moody s Investors Service, Inc. Where Moody s ratings are not available, we have used S&P ratings. All ratings are as of the date indicated and do not reflect subsequent changes. Top Issuers % of Fund s Net Assets 1. Fidelity American Disciplined Equity Fund Series O Fidelity International Disciplined Equity Fund Series O Fidelity International Equity Investment Trust Series O Fidelity Emerging Markets Fund Series O Fidelity Canadian Disciplined Equity Fund Series O Fidelity Canadian Large Cap Fund Series O Fidelity True North Fund Series O Fidelity U.S. Dividend Investment Trust Series O Fidelity Small Cap America Fund Series O 4.8. Fidelity Canadian Bond Fund Series O Fidelity Dividend Investment Trust Series O Fidelity International Growth Investment Trust Series O Fidelity American High Yield Currency Neutral Fund Series O Fidelity Canadian Opportunities Fund Series O Fidelity Canadian Money Market Fund Series O Fidelity Canadian Short Term Bond Fund Series O Cash and Cash Equivalents. Total Fund Net Assets $296,247,. Where applicable, the information in the above tables includes the Fund s pro-rata share of the investment in any Fidelity managed underlying fund. The summary of investment portfolio may change due to ongoing portfolio transactions of the investment fund. The most recent annual report, semi-annual report, quarterly report, fund facts document or simplified prospectus for the investment fund and/or underlying fund is available at no cost, by calling , by writing to us at Fidelity Investments Canada ULC, 483 Bay St. Suite 3, Toronto ON M5G 2N7 or by visiting our web site at or SEDAR at 14

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20 Fidelity Investments Canada ULC 483 Bay Street, Suite 3 Toronto, Ontario M5G 2N7 Manager, Transfer Agent and Registrar Fidelity Investments Canada ULC 483 Bay Street, Suite 3 Toronto, Ontario M5G 2N7 Custodian State Street Trust Company of Canada Toronto, Ontario Portfolio Adviser Fidelity Investments Canada ULC 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, Fidelity U.S. Money Market Fund or Fidelity U.S. Money Market Investment Trust 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-CP45-MRFPA-918