Fidelity VIP Consumer Discretionary Portfolio

Transcription

1 Fidelity VIP Consumer Discretionary Portfolio Key Takeaways For the semiannual reporting period ending June 30, 2017, the fund's share classes gained about 9%, trailing the 11.12% return of the MSCI U.S. IMI Consumer Discretionary 25/50 Index. The consumer discretionary sector outpaced the broader market amid solid fundamentals, wage growth and improving consumer sentiment, among other factors. The fund's underperformance of the MSCI sector index largely was due to a single stock: an overweighted stake in L Brands, which returned about -16% the past six months. The fund's biggest individual contributor this period also was its largest holding: Amazon.com, which gained 29%. On August 3, 2017, Katherine Shaw became Portfolio Manager of the fund, succeeding Peter Dixon. MARKET RECAP The U.S. equity bellwether S&P 500 index returned 9.34% for the six months ending June 30, 2017, gaining strongly to begin the new year on optimism for President Trump's probusiness agenda. Equity markets leveled off in March, however, as the fledgling administration faced the first test of its domestic agenda. The index reacted with uncertainty to efforts by Congress to repeal and replace the Affordable Care Act (ACA) and then turned upward through June 30. In a stark reversal from 2016, growthoriented stocks handily topped their value counterparts for the first half of Among sectors, information technology (+17%) fared best, surging as a handful of major index constituents posted stellar returns. Health care (+16%) was close behind, climbing in February and again in the second quarter, following the ACA's reprieve. Meanwhile, consumer staples (+8%) and utilities (+9%) fell just shy of the broader market amid investors' general preference for risk assets. Financials (+7%) lagged because sentiment regarding the potential for deregulation and lower taxes faded as the White House turned its attention to other initiatives. Rising interest rates hurt real estate (+6%) and dividend-rich telecommunication services (-11%), the latter of which was further hampered by increased competition. Lastly, lower oil prices sent energy (-13%) to the bottom of the sector performance rankings. Not FDIC Insured May Lose Value No Bank Guarantee

2 Q&A Fund Facts Peter Dixon Portfolio Manager Start Date: July 18, 2001 Size (in millions): $ Investment Approach Fidelity VIP Consumer Discretionary Portfolio is a sectorbased, equity-focused strategy that seeks to outperform its benchmark through active management. The fund is constructed to maximize ownership of companies with characteristics that we believe should drive outperformance: a tailwind from improving consumer macro trends; market-share gains; a technology lead relative to peers; improving margins; increasing returns of capital to shareholders; and reasonable valuation. We look to invest when the stock prices do not yet reflect our higher-than-consensus expectations for long-term earnings growth. Position sizes and fund concentration are a function of our conviction level in our investment ideas, weighed against the probability of upside to a stock's intrinsic (fair) value and the time horizon needed to capture it. Stock selection and idea generation come from bottom-up research that leverages Fidelity's deep and experienced global consumer team. We consider attractive consumer stocks outside of the benchmark that offer the potential for favorable risk-adjusted returns. Sector strategies could be used by investors as alternatives to individual stocks for either tactical- or strategic-allocation purposes. An interview with Peter Dixon, Portfolio Manager for the period in review Q: Peter, how did the fund and sector perform for the six months ending June 30, 2017 The fund's share classes gained about 9%, trailing the 11.12% return of the MSCI U.S. IMI Consumer Discretionary 25/50 Index and finishing modestly behind the S&P 500. The fund outpaced the peer group average. The consumer discretionary sector notched a solid gain the past six months, outperforming the broad market as stocks here were boosted in part by strong fundamentals. While the U.S. Federal Reserve raised short-term interest rates twice this period, future increases are expected to be measured and gradual, which I think should encourage consumer borrowing and spending. Wage growth and improving consumer sentiment were two other positives. Looking back a full 12 months, the fund again lagged the MSCI sector index and the S&P 500 ; however, we topped the peer average for the one-year time frame. Q: What influenced the fund's performance most versus the MSCI sector index The fund's underperformance largely was due to a single position: an overweighted stake in L Brands. When it comes to investing in the consumer discretionary sector, I believe that a company's stock price follows its earnings. In my view, superior earnings growth often starts with strong sales, so I look for companies with brands that are growing in popularity with consumers, as well as those competing in categories that I expect to grow faster than the sector average and even the market overall. The fund's large stake in L Brands is an example of one type of name I look for: companies with strong brands. Unfortunately, the apparel maker and retailer, whose product lines include Victoria's Secret and Bath & Body Works, saw its shares return about -16% the past six months, making it by far our largest relative detractor. Shares of L Brands declined mostly in the first half of the period. The stock suffered from P/E (price-earnings) multiple compression after the company's Victoria's Secret brand repositioned itself to build on its strengths, reduce 2 For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.

3 discounts and align its selling channels. This overhaul included eliminating its swim and apparel lines, which hurt year-over-year sales figures. What's more, slowing foot traffic continued to hurt mall retailers. As a result, L Brands' late-february release of 2017 fiscal guidance was far below many analysts' expectations, sending the stock price plunging the day after the announcement. Despite its poor performance during the period, I held on to the stock in light of what I considered its positive growth potential in terms of revenue and earnings per share. Q: What else influenced relative results Another major laggard was our stake in Dollar Tree. Shares of the discount retailer returned -9%, pressured by the continued headwinds facing brick-and-mortar retailers, as well as by slower-than-expected progress integrating Family Dollar, which it acquired in Dollar Tree reported firstquarter financial results in May that included earnings that failed to meet analysts' estimates. In addition, the company lowered its fiscal 2017 earnings guidance. As was the case with L Brands, I remained confident in Dollar Tree's longer-term prospects, and the stock remained one of the fund's largest holdings at period end. Some of the index components I largely avoided proved disappointing as well. For example, I sold the fund's stake in fast-food giant McDonald's because of valuation concerns and increasingly difficult comparisons, as well as rising competitive pressure in the quick-service restaurant industry. So, the fund missed out when the stock gained 28% for the full period. McDonald's share price was boosted by the company's earlier move to feature all-day breakfast, along with a focus on better ingredients and the remodeling of its restaurants. Stores in Japan also experienced strong growth. Elsewhere, a high valuation and free-cash-flow concerns kept me from owning electric-vehicle maker Tesla, which also provides energy-storage and solar-panel solutions. This hurt because Tesla stock shot up 69% the past six months amid attention and demand for the soon-to-be-released mass-market Model 3. Q: Where did you find success The fund's biggest individual contributor also was its largest holding this period: Amazon.com. The firm's competitive moat continued to grow, and I thought the gap would widen even further, as its sales still remained fairly low as a percentage of overall U.S. retail sales. Amazon shares gained 29% the past six months, rising after the online retailer reported consecutive quarters of impressive earnings. The firm continued to rapidly increase sales within its Amazon Web Services cloud-computing division. The big news this period was Amazon's $13.5 billion buyout of grocer Whole Foods, which shook the broader retailing industry and sent Amazon shares higher. Avoiding big-box stalwart Target and automotive parts and accessories retailer AutoZone also helped. Weakening fundamentals and rising concern about online competition prevented me from owning either stock. Target shares returned -26%, including a record plunge in late February after announcing weaker-than-expected quarterly financial results and downbeat guidance. AutoZone returned -28% for the period. The stock posted its largest single-day decline ever on May 23, falling sharply after the firm announced disappointing financial results. Q: Peter, what is your outlook at period end The consumer discretionary sector arguably presents many reasons for optimism. A number of macroeconomic tailwinds are delivering direct benefits to consumer sentiment: unemployment remains low, housing trends continue to improve, wages are beginning to rise, and while interest rates have risen and likely will continue to rise, Fed hikes are expected to be slow and incremental. The potential for lower personal and corporate taxes following the recent election could be another positive for economic activity and consumer spending. Still, staying selective when deciding which consumer discretionary stocks to buy is probably the best course, in my view. It's relatively early for the new presidential administration, and optimistic pro-growth expectations persist amid several unknowns. Additionally, the sector tends to outperform the market in the early stages of an economic recovery, and its overall performance during rate-tightening cycles historically has been spotty. Consequently, the fund still emphasizes those companies and industries with the potential to endure economic headwinds and to outperform over the course of an entire economic cycle, while avoiding those that may decline as a result of the macroeconomic environment, even if their earnings are strong. 3 For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.

4 LARGEST CONTRIBUTORS VS. BENCHMARK Peter Dixon on disruption in retailing: "There's no question that retailers have been under immense pressure of late. In fact, more than 300 retailers have filed for bankruptcy since the beginning of The further proliferation of online and mobile shopping and decreased mall traffic largely due to millennials' purchasing habits, along with technological innovation have pressured profit margins. "In June, Amazon announced its intent to acquire Whole Foods in a deal expected to be completed sometime before year-end. Stocks of various retailers collapsed as investors became skittish that the long-term business models of many firms could be threatened by the e-commerce giant. "Given this disruption, it's important for the fund to be even more selective when picking consumer discretionary stocks, if you ask me, and to identify strong brands, budding innovation or other growth drivers that can help companies increase their earnings and 'win' over the long term. "Increasingly, consumers are better able to comparison-shop, purchasing goods based purely on the lowest price or additional benefits such as free shipping or corporate rewards incentives. To beat earnings expectations, we believe companies likely will have to overcome increasing price transparency and easy substitution. "Traditional brick-and-mortar retailers that can encourage consumers to spend more than the market expects look increasingly attractive. Strong brand allegiance also can protect firms against the substitution of their products with cheaper alternatives. Further, we believe companies that can control the distribution and pricing of their goods are better equipped to maintain strong sales margins." Holding Amazon.com, Inc. Target Corp. Market Segment Internet & Direct Marketing Retail General Merchandise Stores Average Relative Weight Relative Contribution (basis points)* 3.72% % 49 AutoZone, Inc. Automotive Retail -0.65% 30 Ford Motor Co. Charter Communications, Inc. Class A * 1 basis point = 0.01%. Automobile Manufacturers -1.40% 24 Cable & Satellite 4.64% 24 LARGEST DETRACTORS VS. BENCHMARK Holding Market Segment Average Relative Weight Relative Contribution (basis points)* L Brands, Inc. Apparel Retail 3.55% -120 Dollar Tree, Inc. General Merchandise Stores 3.28% -66 McDonald's Corp. Restaurants -3.53% -57 Tesla, Inc. The Walt Disney Co. * 1 basis point = 0.01%. Automobile Manufacturers Movies & Entertainment -1.19% % For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.

5 10 LARGEST HOLDINGS Holding Market Segment Portfolio Weight Portfolio Weight Six Months Ago Amazon.com, Inc. Internet & Direct Marketing Retail 15.53% 14.30% The Walt Disney Co. Movies & Entertainment 9.03% 9.67% Home Depot, Inc. Home Improvement Retail 8.70% 9.64% NIKE, Inc. Class B Footwear 6.58% 5.31% Charter Communications, Inc. Class A Cable & Satellite 6.35% 6.78% L Brands, Inc. Apparel Retail 3.95% 4.91% Dollar Tree, Inc. General Merchandise Stores 3.52% 3.10% Comcast Corp. Class A Cable & Satellite 3.20% 2.35% TJX Companies, Inc. Apparel Retail 3.10% 2.52% Wyndham Worldwide Corp. Hotels, Resorts & Cruise Lines 2.77% Largest Holdings as a % of Net Assets 62.74% 64.77% Total Number of Holdings The 10 largest holdings are as of the end of the reporting period, and may not be representative of the fund's current or future investments. Holdings do not include money market investments. MARKET-SEGMENT DIVERSIFICATION Market Segment Portfolio Weight Portfolio Weight Six Months Ago Internet & Direct Marketing Retail 22.02% 16.90% Cable & Satellite 10.58% 11.16% Apparel Retail 10.17% 11.31% Movies & Entertainment 9.98% 10.14% Home Improvement Retail 9.82% 9.64% Footwear 6.58% 5.31% Hotels, Resorts & Cruise Lines 5.03% 4.55% General Merchandise Stores 4.05% 3.99% Restaurants 3.66% 5.80% Advertising 2.40% 3.03% Other 13.54% 14.78% ASSET ALLOCATION Asset Class Portfolio Weight Portfolio Weight Six Months Ago Domestic Equities 92.75% 94.13% International Equities 4.75% 4.45% Developed Markets 3.57% 3.84% Emerging Markets 1.18% 0.61% Tax-Advantaged Domiciles 0.00% 0.00% Bonds 0.34% 0.31% Cash & Net Other Assets 2.16% 1.11% Net Other Assets can include fund receivables, fund payables, and offsets to other derivative positions, as well as certain assets that do not fall into any of the portfolio composition categories. Depending on the extent to which the fund invests in derivatives and the number of positions that are held for future settlement, Net Other Assets can be a negative number. "Tax-Advantaged Domiciles" represent countries whose tax policies may be favorable for company incorporation. 5 For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.

6 PERFORMANCE SUMMARY Variable annuity contracts are issued by insurance companies through separate accounts that are part of the insurer. The value of a variable annuity contract depends on the values of units of subaccounts of the separate account. Each subaccount purchases shares of a corresponding mutual fund. Subaccount investment performance is based on the performance of the mutual fund in which it invests, less insurance company charges made against the assets of the separate account. A subaccount is not a mutual fund. The information provided in this Performance Summary contains performance information for the fund, or class, and each variable subaccount, with comparisons over different time periods to the fund's relevant benchmarks including an appropriate index as well as a group of similar funds whose average returns are compiled and monitored by an independent mutual fund research company. Figures for more than one year assume a steady compounded rate of return and are not a class' year-by-year results, which fluctuated over the periods shown. Fund performance numbers are net of all underlying fund operating expenses, but do not include any insurance charges imposed by your insurance company's separate account. If fund performance information included the effect of these additional charges, the total returns would have been lower. The performance table also contains performance information for certain insurance company subaccounts that invest in the fund. Each variable subaccount's performance, as shown, is net of all fees and expenses, including those charges imposed by your insurance company. Seeing the returns over different time periods can help you assess the performance against relevant measurements and across multiple market environments. The performance information includes average annual total returns and cumulative total returns and is further explained in this section.* Investing in a variable annuity involves risk of loss investment returns, contract value, and, for variable income annuities, payment amounts are not guaranteed and will fluctuate. Withdrawals of taxable amounts from an annuity are subject to ordinary income tax, and, if taken before age 59 1/2, may be subject to a 10% IRS penalty. Current performance may be higher or lower than the performance data quoted below. An investor's shares, when redeemed, may be worth more or less than their original cost. For month-end performance figures, please visit or call Fidelity. The performance data featured represents past performance, which is no guarantee of future results. Fiscal periods ending June 30, 2017 Cumulative Annualized Total Returns for the Fund 6 Month YTD / LOF 1 VIP Consumer Discretionary Portfolio - Initial Class Gross Expense Ratio: 0.70% % 9.15% 14.18% 9.16% 14.66% 8.73% VIP Consumer Discretionary Portfolio - Investor Class Gross Expense Ratio: 0.78% % 9.11% 14.14% 9.07% 14.58% 8.64% S&P 500 Index 9.34% 9.34% 17.90% 9.61% 14.63% 7.18% MSCI US IMI Consumer Discretionary 25/ % 11.12% 18.31% 10.98% 17.16% 10.01% Morningstar Insurance Consumer Cyclical 8.21% 8.21% 13.27% 8.02% 13.71% 7.94% 1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 07/18/ This expense ratio is from the prospectus in effect as of the date shown above and generally is based on amounts incurred during that fiscal year. This fund has a short term trading fee 1.00% for shares held less than 60 days. Performance and disclosure information continued on next page. 6 For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.

7 PERFORMANCE SUMMARY (continued): Fiscal periods ending June 30, 2017 Total Returns for the Variable Subaccount** Annualized Cumulative Annualized New York Only: 10 /Life of Subaccount 6 Month YTD /Life of Subaccount Fidelity Retirement Reserves A 7.85% 8.71% 8.71% 13.27% 8.29% 13.74% 7.85% Fidelity Income Advantage B 7.64% 8.60% 8.60% 13.04% 8.07% 13.51% 7.64% Fidelity Personal Retirement Annuity C (for contracts purchased prior to 1/1/09 and on or after 9/7/10) Fidelity Personal Retirement Annuity C (for contracts purchased between 1/1/09 and 9/6/10) Fidelity Personal Retirement Annuity C (for contracts purchased on or after 9/7/10 with an initial purchase payment of $1M+) 8.37% 8.97% 8.97% 13.86% 8.80% 14.30% 8.37% 8.34% 8.97% 8.97% 13.86% 8.80% 14.30% 8.34% 8.53% 9.05% 9.05% 14.03% 8.96% 14.47% 8.53% Fidelity Retirement Reserves - Subaccount Inception: July 30, 2001; New York Only Inception: July 30, Fidelity Income Advantage - Subaccount Inception: July 30, 2001; New York Only Inception: July 30, Fidelity Personal Retirement Annuity - Subaccount Inception: August 15, 2005; New York Only Inception: October 28, Fidelity Retirement Reserves' underlying fund options are Initial Class fund offerings. Fidelity Income Advantage's underlying fund options are Initial Class fund offerings. Fidelity Personal Retirement Annuity's underlying fund options are Investor Class fund offerings. A In NY, Retirement Reserves B In NY, Income Advantage C In NY, Personal Retirement Annuity * Total returns are historical and include changes in share price (for the fund) and unit price (for the variable subaccount) and reinvestment of dividends and capital gains, if any. ** Returns for Fidelity Retirement Reserves include the 0.80% annual annuity charge. For Fidelity Retirement Reserves contracts, returns do not reflect the annual $30 maintenance fee which applies to contracts where purchase payments less any withdrawals are less than $25,000. Returns for Fidelity Income Advantage include the 1.00% annual annuity charge. Returns for Fidelity Personal Retirement Annuity ("FPRA") include the 0.25% annual annuity charge for contracts purchased prior to 1/1/2009, and on or after 9/7/2010. For FPRA contracts purchased between 1/1/2009 and 9/6/2010, returns include a 0.35% annual annuity charge prior to 9/7/2010 and 0.25% thereafter. For FPRA contracts purchased on or after 9/7/2010 with an initial purchase payment of $1,000,000 or more, returns include a 0.10% annual annuity charge. Life of subaccount returns are from the subaccount inception, the date the portfolio was first available in the insurance company's variable product. Please see the last page(s) of this Q&A document for most-recent calendar-quarter performance. 7 For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.

8 Definitions and Important Information Fidelity Income Advantage (policy form nos. FVIA-92100, et al. and FVIA-99100, et al.), Fidelity Retirement Reserves (policy form no. NRR-96100, et al.), Fidelity Personal Retirement Annuity (policy form no. DVA-2005, et al.), Fidelity Freedom Lifetime Income (policy form nos. FFLI-Q-2005, et al. and FFLI-NQ-2005, et al.), and Fidelity Growth and Guaranteed Income (policy form no. DVA-GWB- 2007, et al.) are issued by Fidelity Investments Life Insurance Company, 100 Salem Street, Smithfield, RI 02917, and for NY residents, Income Advantage (policy form nos. EFVIA-92100, et al. and EFVIA-99100, et al.), Retirement Reserves (policy form no. EVA-91100, et al.), Personal Retirement Annuity (policy form no. EDVA-2005, et al.), Fidelity Freedom Lifetime Income (policy form nos. EFLI-Q-2005, et al. and EFLI-NQ-2005, et al.), and Growth and Guaranteed Income (policy form no. EDVA-GWB-2007, et al.) are issued by Empire Fidelity Investments Life Insurance Company, New York, NY. Annuities are distributed by Fidelity Brokerage Services (Member NYSE, SIPC) and Fidelity Insurance Agency, Inc. FUND RISKS Stock markets, especially foreign markets, are volatile and can decline significantly in response to issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks. The consumer discretionary industries can be significantly affected by the performance of the overall economy, interest rates, competition, consumer confidence and spending, and changes in demographics and consumer tastes. The fund may have additional volatility because it can invest a significant portion of assets in securities of a small number of individual issuers. in which the fund may invest, and may not be representative of the fund's current or future investments. Should not be construed or used as a recommendation for any sector or industry. MORNINGSTAR INFORMATION 2017 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for mutual fund performance, you should check the fund's current prospectus for the most up-to-date information concerning applicable loads, fees and expenses. RELATIVE WEIGHTS Relative weights represents the % of fund assets in a particular market segment, asset class or credit quality relative to the benchmark. A positive number represents an overweight, and a negative number is an underweight. The fund's benchmark is listed immediately under the fund name in the Performance Summary. IMPORTANT FUND INFORMATION Relative positioning data presented in this commentary is based on the fund's primary benchmark (index) unless a secondary benchmark is provided to assess performance. VIP refers to Variable Insurance Products Unless otherwise disclosed to you, in providing this information, Fidelity is not undertaking to provide impartial investment advice, act as an impartial adviser, or to give advice in a fiduciary capacity. INDICES It is not possible to invest directly in an index. All indices represented are unmanaged. All indices include reinvestment of dividends and interest income unless otherwise noted. MSCI US IMI Consumer Discretionary 25/50 Index is a modified market-capitalization-weighted index of stocks designed to measure the performance of Consumer Discretionary companies in the MSCI U.S. Investable Market 2500 Index. The MSCI U.S. Investable Market 2500 Index is the aggregation of the MSCI U.S. Large Cap 300, Mid Cap 450, and Small Cap 1750 Indices. S&P 500 is a market-capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. MARKET-SEGMENT WEIGHTS Market-segment weights illustrate examples of sectors or industries 8

9 Manager Facts Katherine Shaw is a sector leader at Fidelity Management & Research Company (FMR Co.), the investment advisor for Fidelity's family of mutual funds. Fidelity Investments is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and other financial products and services to more than 20 million individuals, institutions and financial intermediaries. In this role, Ms. Shaw serves as sector leader of the Global Consumer team and is responsible for providing research coverage for the consumer discretionary sector. Additionally, she manages Fidelity Select Consumer Discretionary Portfolio, Fidelity Advisor Consumer Discretionary Fund, and Fidelity VIP Consumer Discretionary Portfolio, as well as Fidelity Select Leisure Portfolio and Fidelity Consumer Discretionary Central Fund. She also comanages Fidelity Stock Selector All Cap Fund. Prior to joining Fidelity in 2008, Ms. Shaw served as a private equity associate at TA Associates and as an investment banking analyst at Salomon Smith Barney. She has been in the investments industry since Ms. Shaw earned her bachelor of arts degree in economics and government from The University of Virginia and her master of business administration degree from Harvard Business School. She is also a CFA charterholder. 9 For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.

10 PERFORMANCE SUMMARY Quarter ending September 30, 2017 Total Returns for the Variable Subaccount New York Only: 10 /Life of Subaccount 1 Annualized /Life of Subaccount Fidelity Retirement Reserves 8.44% 9.59% 9.25% 12.74% 8.44% Fidelity Income Advantage 8.22% 9.37% 9.03% 12.51% 8.22% Fidelity Personal Retirement Annuity (for contracts purchased prior to 1/1/09 and on or after 9/7/10) Fidelity Personal Retirement Annuity (for contracts purchased between 1/1/09 and 9/6/10) Fidelity Personal Retirement Annuity (for contracts purchased on or after 9/7/10 with an initial purchase payment of $1M+) 8.96% 10.14% 9.77% 13.29% 8.96% 8.92% 10.14% 9.77% 13.29% 8.92% 9.12% 10.30% 9.93% 13.46% 9.12% Current performance may be higher or lower than the performance data quoted above. For month-end performance figures, please visit or call Fidelity. The performance data featured represents past performance, which is no guarantee of future results. Investing in a variable annuity involves risk of loss investment returns, contract value, and, for variable income annuities, payment amounts are not guaranteed and will fluctuate. Withdrawals of taxable amounts from an annuity are subject to ordinary income tax, and, if taken before age 59 1/2, may be subject to a 10% IRS penalty. Please see the Fiscal Performance Summary section of this Q&A document for performance footnotes and additional information. Before investing, please carefully consider the investment objectives, risks, charges, and expenses of the fund or annuity and its investment options. For this and other information, call or write Fidelity for a free prospectus or, if available, a summary prospectus. Read it carefully before you invest. Past performance is no guarantee of future results. Views expressed are through the end of the period stated and do not necessarily represent the views of Fidelity. Views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund. The securities mentioned are not necessarily holdings invested in by the portfolio manager(s) or FMR LLC. References to specific company securities should not be construed as recommendations or investment advice. Information included on this page is as of the most recent calendar quarter. S&P 500 is a registered service mark of Standard & Poor's Financial Services LLC. Other third-party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. Fidelity Brokerage Services LLC, Member NYSE, SIPC., 900 Salem Street, Smithfield, RI Fidelity Investments Institutional Services Company, Inc., 500 Salem Street, Smithfield, RI FMR LLC. All rights reserved. Not NCUA or NCUSIF insured. May lose value. No credit union guarantee Diversification does not ensure a profit or guarantee against a loss.