Fidelity VIP Consumer Staples Portfolio

Transcription

1 Fidelity VIP Consumer Staples Key Takeaways For the year ending December 31, 2017, the fund's share classes gained about 15%, topping the 11.91% advance of the MSCI U.S. IMI Consumer Staples 25/50 index but lagging the 21.83% rise of the broad-based S&P 500 index. Consumer staples stocks lagged the broader market by a wide margin the past year amid improved global economic growth that boosted more-economically sensitive sectors such as information technology, consumer discretionary and financials. The fund's outperformance of the MSCI sector index was driven by security selection, especially in the soft drinks and packaged foods & meats segments. A sizable overweighting in the strongperforming personal products group also notably contributed. By contrast, the fund's relative result was hampered most by weak stock picks in personal products and an underweighting in the hypermarkets & super centers industry. Looking ahead, Manager James McElligott is optimistic about prospects for the staples sector, given year-end valuations, an improved currency backdrop and rebounding economic growth in many emerging markets. He also expects U.S. tax reform to provide an added tailwind. On December 8, 2017, shareholders approved proposals from the Board of Trustees to eliminate each sector/industry fund's fundamental "invests primarily" policy and to modify the fundamental concentration policy for certain funds. The changes took effect on January 1, 2018, and do not impact how the funds are managed. MARKET RECAP U.S. equities gained 21.83% in 2017, as the S&P 500 index rose steadily and closed the year just shy of an alltime high after a particularly strong three-month finish. Early on, equities rallied on optimism for President Trump's pro-business agenda but leveled off in March amid fading optimism and stalled efforts by Congress to repeal and replace the Affordable Care Act. Upward momentum soon returned and continued through year-end with consumer sentiment and other market indicators staying positive. The lone exception was a brief cooldown in August, when geopolitical tension escalated and uncertainty grew regarding the future of health care, tax reform and the debt ceiling. Sectorwise, information technology fared best by a wide margin, rising 39% amid strong earnings growth from several major index constituents. A 24% gain in materials was spurred by increased demand, especially from China. Consumer discretionary gained 23%, despite many brick-and-mortar retailers suffering from online competition, and financials edged the broader market on an uptick in bond yields. Conversely, the defensive energy and telecom services sectors returned about -1% each. Rising interest rates held back real estate (+11%), while consumer staples (+13%) and utilities (+12%) struggled due to investors' general preference for risk assets. Not FDIC Insured May Lose Value No Bank Guarantee

2 Q&A An interview with Manager James McElligott Fund Facts James McElligott Manager Start Date: April 24, 2007 Size (in millions): $ Investment Approach Fidelity VIP Consumer Staples is a sectorbased, equity-focused strategy that seeks to outperform its benchmark through active management. Our core philosophy is that stock prices follow earnings, and those businesses that deliver the strongest earnings growth over time should produce the greatest returns. We closely monitor valuations, seeking to mitigate risk and improve the probability for above-average returns by purchasing stocks with solid earnings growth potential at below-average relative valuations. Fundamental research is key to our approach, as we build the portfolio stock by stock and take a multiyear investment perspective to get a differentiated view on long-term performance drivers. We also look to capitalize on short-term market opportunities, with the goal of optimizing risk-adjusted returns for shareholders. Sector strategies could be used by investors as alternatives to individual stocks for either tactical- or strategic-allocation purposes. Q: James, how did the fund perform in 2017 The fund's share classes gained about 15%, outpacing the 11.91% return of the MSCI U.S. IMI Consumer Staples 25/50 Index but lagging the 21.83% advance of the S&P 500. Q: Why did consumer staples stocks finish so far behind the broader market As global economic growth improved, more-economically sensitive sectors looked as if they had the most to gain. As a result, investors drove stock prices much higher relative to earnings in information technology, consumer discretionary and financials, which together accounted for roughly half of the S&P 500 the past year. The broad-based index saw a roughly 11% gain in price-to-earnings (P/E) ratios, compared to about 5% for the MSCI consumer staples index. In addition, valuations on staples stocks started the year in line with their historical premium to the market. In other words, valuations weren't particularly compelling. Despite this less-than-favorable backdrop, earnings growth for stocks in the MSCI sector index was only slightly behind that of the broader market. Many staples companies improved profitability through self-help efforts, such as cost cutting or acquisitions. Plus, as the year progressed, economic growth picked up globally and currency headwinds started to ease. This backdrop aided the sector since many staples companies are multinational, with an estimated 20% to 60% of their revenue coming from emerging markets. Q: What factors helped the fund outpace the MSCI sector index Bottom-up security selection, which drives the fund's industry allocations, was the biggest contributor. We benefited from focusing on companies I thought had better revenue- and earnings-growth prospects than their peers over the next two to four years, and selling at what I viewed as a discounted valuation. Stock picks were particularly strong in the soft drinks and packaged foods & meats groups. 2 For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.

3 Industry allocations gave an added boost, especially our overweighting in personal products one of the topperforming segments in the sector benchmark. Lastly, the fund had more exposure to international markets than the sector index, which helped performance amid improved economic growth and a broadly weaker U.S. dollar. Q: Which stocks helped performance most Versus the sector index, the biggest individual contributor by a wide margin was timely ownership of infant-formula company Mead Johnson Nutrition. The company benefited from taking steps to address challenges in China, one of its largest end markets, and then accepted a generous buyout offer last February from U.K.-based consumer goods company Reckitt Benckiser Group. We had eliminated our position by the time the deal closed in June, but not before our investment in Mead gained 27%. Our overweighting in energy-drink company Monster Beverage also stood out. I liked Monster because it had what I viewed as a favorable revenue- and earnings-growth outlook, given strong execution by management, a loyal consumer following and high-single-digit growth globally in the energy-drink category. Plus, its balance sheet had a net cash position. In June 2016, Coca-Cola, our second-largest holding, bought a 17% stake in Monster and acquired its non-core, non-energy-drink assets. Monster gained access to Coca-Cola's huge distribution network here and overseas, including in China, the second-largest energy drink market in the world. Partly as a result, Monster saw market-share gains drive its stock higher by roughly 43%. It was among the fund's largest holdings, even though I trimmed our stake the past year. Q: How about other contributors Also in the soft drinks group, a non-benchmark stake in European bottling company Coca-Cola European Partners (CCE) had a favorable impact. CCE was formed when three European Coca-Cola bottling businesses merged in At the time, I expected cost synergies, improved customer service and increased revenue to drive above-average earnings growth. In 2017, better-than-expected revenue growth and easing currency headwinds resulted in a 30% gain in CCE's share price. Elsewhere, the fund's non-benchmark position in Svenska Cellulosa gained roughly 78%. In recent years, this Sweden-based forest products and paper company had shifted about 90% of its business into personal hygiene products, including diapers and tissues. This past June, the company was split into two separate entities, helping to unlock value. At year-end, we held a small position in the legacy forest products company, Svenska Cellulosa, as well as a non-index investment in Essity, the hygiene business. Q: Which segments and stocks detracted Stock picks in personal products hurt relative performance most, followed by an underweighting in the hypermarkets & super centers segment. In terms of individual disappointments, the most notable was Wal-Mart Stores. We had a sizable underweighting as the stock rose roughly 47% the past year. Although the company has invested heavily to boost its competitiveness and improve its online offerings, I didn't think its earningsgrowth prospects for the next several years were that compelling. Earnings for 2017 weren't up that much but were better than expected, driving a sizable P/E revision. Another name that continued to dog us was Avon Products, a London-based maker of cosmetics and other personalcare items. The fund's shares returned -58% in 2017, as bad debt expenses in Latin America hurt Avon's profits, turnaround plans failed to deliver expected results and earnings missed estimates. I added to our position, encouraged in part by recent management changes. In addition, all of Avon's revenue comes from outside the U.S., a benefit as currency headwinds recede. Q: What's your outlook for consumer staples stocks as of year-end, James I'm cautiously optimistic. Valuations in the sector are much cheaper than historically. In fact, staples stocks have the biggest discount relative to history of any sector in the market right now. I also think earnings prospects for many staples companies look good at this point in the economic cycle, especially given accelerating growth in emerging markets and dissipating currency headwinds. Higher interest rates could pose a bit of a challenge, but investors tend to rely less on staples stocks for their dividends than some other sectors, such as utilities and real estate. In fact, there have been a number of times when staples stocks have outperformed the broader market as rates rose. Lastly, even though a lot of staples companies are global, they stand to benefit from U.S. tax reform because they still have a lot of income in the U.S., and some have lots of capital stranded overseas that can now be freed up. I also expect staples companies with branded products to retain the benefits from U.S. tax reform more than companies with more commodity-like products. 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 James McElligott on opportunities in emerging markets: "In recent years, multinational consumer staples companies faced headwinds as slowing economic growth, low commodity prices and a weakening U.S. dollar hindered sales in emerging markets. But those challenges have started to reverse. "Why do emerging markets matter so much to multinational staples companies To start, emerging markets represent more than 80% of the world's population. Not surprisingly, emerging markets also represent a significant portion of the revenue coming from the staples sector. "The economies of developing countries have been growing at a faster pace than those of developed markets for some time. Expectations are that emerging-market economies will continue to strengthen, helped in part by rising commodity prices. As that happens, more people will join the middle class. With more discretionary income, they'll start to incorporate various staples products such as toothpaste, shampoo, laundry detergent and packaged foods into their lifestyles. "Lastly, between 2014 and 2016, the U.S. dollar's strength forced many multinational staples companies to increase prices in emerging markets above the rate of inflation, which dramatically slowed category growth. As currency headwinds ease, these increases are no longer necessary. "In the second half of 2017, we started to see consumer staples sales pick up in emerging markets, with many companies reporting thirdquarter revenue and earnings results that were up substantially from earlier in the year. Many management teams I talked to confirmed this positive trend. "In the slower-growth environment of recent years, I was looking for staples companies with self-help opportunities that could help drive better revenue growth. Now I'm becoming more interested in companies I think have the best sales-driven earnings-growth opportunities, which often is tied to their exposure to emerging markets." Holding Mead Johnson Nutrition Co. Class A Monster Beverage Corp. Svenska Cellulosa AB (SCA) (B Shares) Coca-Cola European Partners PLC Unilever NV (Certificaten Van Aandelen) (Bearer) * 1 basis point = 0.01%. Market Segment Packaged Foods & Meats Average Relative Weight Relative Contribution (basis points)* 0.26% 101 Soft Drinks 2.55% 69 Forest Products 1.36% 52 Soft Drinks 1.98% 46 Personal Products 2.25% 40 LARGEST DETRACTORS VS. BENCHMARK Holding Wal-Mart Stores, Inc. Market Segment Hypermarkets & Super Centers Average Relative Weight Relative Contribution (basis points)* -4.31% -125 Avon Products, Inc. Personal Products 1.09% -111 TreeHouse Foods, Inc. Spectrum Brands Holdings, Inc. Brown-Forman Corp. Class B (non-vtg.) * 1 basis point = 0.01%. Packaged Foods & Meats 1.51% -56 Household Products 2.24% -40 Distillers & Vintners -0.63% 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 Weight Weight Six Months Ago Procter & Gamble Co. Household Products 9.36% 9.21% The Coca-Cola Co. Soft Drinks 9.09% 8.89% Philip Morris International, Inc. Tobacco 7.80% 8.98% PepsiCo, Inc. Soft Drinks 7.74% 6.96% Altria Group, Inc. Tobacco 4.16% 3.92% CVS Health Corp. Drug Retail 4.03% 3.37% Mondelez International, Inc. Packaged Foods & Meats 3.71% 3.36% Monster Beverage Corp. Soft Drinks 3.62% 3.52% Costco Wholesale Corp. Hypermarkets & Super Centers 3.19% 2.86% Coty, Inc. Class A Personal Products 3.15% 2.68% 10 Largest Holdings as a % of Net Assets 55.84% 53.80% 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 Weight Weight Six Months Ago Soft Drinks 23.31% 24.43% Packaged Foods & Meats 17.52% 12.81% Household Products 15.02% 15.55% Tobacco 14.32% 17.78% Personal Products 8.97% 9.68% Drug Retail 6.46% 6.28% Hypermarkets & Super Centers 4.13% 3.67% Food Distributors 2.38% 2.01% Distillers & Vintners 1.92% 1.92% Agricultural Products 1.39% 1.21% Other 4.15% 4.16% ASSET ALLOCATION Asset Class Weight Weight Six Months Ago Domestic Equities 90.84% 88.34% International Equities 8.74% 11.35% Developed Markets 8.09% 10.68% Emerging Markets 0.65% 0.67% Tax-Advantaged Domiciles 0.00% 0.00% Bonds 0.00% 0.00% Cash & Net Other Assets 0.42% 0.31% 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 December 31, 2017 Cumulative Annualized Total Returns for the Fund 6 Month YTD / LOF 1 VIP Consumer Staples - Initial Class Gross Expense Ratio: 0.68% % 14.66% 14.66% 9.19% 12.90% 9.62% VIP Consumer Staples - Investor Class Gross Expense Ratio: 0.76% % 14.52% 14.52% 9.11% 12.82% 9.53% S&P 500 Index 11.42% 21.83% 21.83% 11.41% 15.79% 8.50% MSCI US IMI Consumer Staples 25/ % 11.91% 11.91% 8.08% 13.42% 10.16% Morningstar Insurance Consumer Defensive 4.29% 13.72% 13.72% 8.10% 12.44% 8.93% 1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 04/24/ 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. 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 December 31, 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 8.74% 3.01% 13.75% 13.75% 8.32% 11.99% 8.74% Fidelity Income Advantage B 8.52% 2.90% 13.52% 13.52% 8.10% 11.77% 8.52% 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+) 9.26% 3.24% 14.24% 14.24% 8.84% 12.53% 9.26% 9.23% 3.24% 14.24% 14.24% 8.84% 12.53% 9.23% 9.42% 3.31% 14.41% 14.41% 9.00% 12.70% 9.42% Fidelity Retirement Reserves - Subaccount Inception: April 30, 2007; New York Only Inception: April 30, Fidelity Income Advantage - Subaccount Inception: April 30, 2007; New York Only Inception: April 30, Fidelity Personal Retirement Annuity - Subaccount Inception: April 30, 2007; New York Only Inception: April 30, 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 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. 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 adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. The consumer staples industries can be significantly affected by demographic and product trends, competitive pricing, food fads, marketing campaigns, environmental factors, and government regulation, the performance of overall economy, interest rates, and consumer confidence. The fund may have additional volatility because it can invest a significant portion of assets in securities of a small number of individual issuers 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 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 2018 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. The Board of Trustees unanimously approved a proposal to shareholders for trustee election that would combine oversight of Fidelity's sector funds with Fidelity's broader equity and high income funds under a single Board of Trustees. If approved, the unified Board would be effective on or about 3/1/18. Effective 12/18/17, the fund's redemption fee has been removed. VIP refers to Variable Insurance Products 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 Staples 25/50 Index is a modified marketcapitalization-weighted index of stocks designed to measure the performance of Consumer Staples companies in the MSCI U.S. Investable Market 2500 Index. The MSCI U.S. Investable Market 8

9 Manager Facts James McElligott is a research analyst at Fidelity Management & Research Company (FMRCo), 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, he is responsible for coverage of global food, non-alcoholic beverages, and household and personal care product stocks within the consumer sector. James also manages Fidelity VIP Consumer Staples (since 2014). Prior to assuming his current responsibilities, James managed Select Natural Gas from 2005 to He became cosector leader of the Natural Resources team and gained coverage of integrated oil companies in 2007, and has been an equity research analyst since Since joining Fidelity full time in 2003, James has followed refinery, exploration, and production and steel stocks. Previously, James was a summer intern at Fidelity in 2002, an equity research summer intern at Arrowstreet Capital Management in 2001, and a summer intern at Wedbush Morgan Securities in He has been in the investments industry since James earned his bachelor of arts degree in economics from Harvard University, where he graduated with honors. He also served as the business manager for Harvard's Current, the nation's largest student magazine. 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 December 31, 2017 Total Returns for the Variable Subaccount New York Only: 10 /Life of Subaccount 1 Annualized /Life of Subaccount Fidelity Retirement Reserves 8.74% 13.75% 8.32% 11.99% 8.74% Fidelity Income Advantage 8.52% 13.52% 8.10% 11.77% 8.52% 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+) 9.26% 14.24% 8.84% 12.53% 9.26% 9.23% 14.24% 8.84% 12.53% 9.23% 9.42% 14.41% 9.00% 12.70% 9.42% 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.