Fidelity Worldwide Fund

Transcription

1 Fidelity Worldwide Fund Key Takeaways For the fiscal year ending October 31, 2017, the fund's Retail Class shares gained 26.49%, outpacing the 23.32% return of the benchmark MSCI World Index. Managers Bill Kennedy and Steve DuFour maintained their focus on companies with above-average earnings growth and reasonable stock prices, splitting the portfolio nearly equally between U.S. and non-u.s. markets. Versus the benchmark, most of the fund's outperformance came from stock selection and a large overweighting in the topperforming information technology sector. Picks in consumer discretionary and industrials were additive as well. Geographically, U.S. selections aided relative performance most. Choices in continental Europe and Japan provided a modest boost, as did the fund's small allocation to emerging markets. On the downside, picks in the health care and materials sectors detracted versus the benchmark due to disappointing performance from two particular stocks. Regionally, Canada nicked our result. At period end, Bill and Steve, who have been co-managing the fund for 10 years, remain optimistic about its prospects given the fund's flexibility to pursue the best investment opportunities worldwide and an improving global macroeconomic backdrop. MARKET RECAP The MSCI ACWI (All Country World Index) Index returned 23.70% for the 12 months ending October 31, 2017, helped partly by a generally weak U.S. dollar. Favorable election results in continental Europe (+30%) suggested ebbing political uncertainty and nearterm risk there, but the U.K. (+20%) faced more-mixed conditions ahead of its expected exit from the European Union. Despite central-bank easing and pressured recently by yen strength Japan (+18%) lagged the rest of the Asia-Pacific group (+23%). Commodityprice volatility slowed Canada (+17%), but the emerging-markets group (+26%) sped ahead. The U.S. (+23%) finished close to the index result. Sector-wise, information technology (+41%) was driven by a surge among several U.S. and Chinese internetrelated names. Financials (+31%) rode rising interest rates that, at the same time, weighed on real estate (+13%) as well as utilities (+15%), consumer staples (+9%) and telecommunication services (+5%) so-called "bond proxy" sectors. Materials (+28%) and industrials (+26%) responded to demand from China and price gains for certain commodities. In the energy sector (+10%), oil prices lost ground in the spring before rebounding through October 31 to end well above where they started 12 months ago. Lastly, health care (+20%) was hurt by earlyperiod turmoil around drug pricing and health care legislation. Not FDIC Insured May Lose Value No Bank Guarantee

2 Q&A William Kennedy Manager Fund Facts Trading Symbol: FWWFX Start Date: May 30, 1990 Size (in millions): $1, Investment Approach Stephen DuFour Co-Manager Fidelity Worldwide Fund is a diversified global equity strategy that seeks capital growth. The fund takes a mosaic approach to investing that combines the expertise of two co-portfolio managers, emphasizing their best ideas across the globe. We manage the fund with a holistic and long-term view, focusing on high-quality companies with aboveaverage growth prospects and that are trading at reasonable prices. Layered into this investment framework is a desire to own businesses that have stable and high returns on capital, durable competitive positions, consistent profitability, solid free-cash-flow generation, good balance sheets and management teams whose interests are aligned with those of shareholders. We strive to uncover these companies through in-depth fundamental, technical and quantitative analysis, working in concert with Fidelity's global research team, with the goal of producing above-index performance over a full market cycle. An interview with William Kennedy, Lead Manager and manager of the non-u.s. equity subportfolio, and Stephen DuFour, Co-Manager and manager of the U.S. equity subportfolio Q: Bill, how did the fund perform for the fiscal year ending October 31, 2017 B.K. The fund's Retail Class shares gained 26.49%, beating the 23.32% return of the benchmark MSCI World Index and also outpacing the peer group average. Although the fund had a good year, it got off to a rough start. The kinds of companies we look for namely, those with above-average earnings growth at reasonable prices (GARP) fell out of favor right after President Trump's election last November. That was true both in the U.S. and overseas. In addition, we were underexposed to the moreeconomically sensitive, lower-quality stocks that took the lead at that time. In 2017, however, the pendulum shifted back in our favor as investors began focusing once again on companies with strong earnings growth. For the first 10 months of 2017, growth stocks worldwide significantly outperformed value stocks, which aided our relative result. Q: What helped most in pushing the fund ahead of the benchmark the past 12 months B.K. Security selection and a sizable overweighting in the top-performing information technology sector, particularly the software & services segment, gave the biggest boost by far. From a geographic perspective, stock picks in the U.S. accounting for about 53% of the fund's assets, on average had a major, positive impact on our relative result. Our U.S. investments often have a big influence on performance because they tend to be our largest positions. Q: Turning to you, Steve, which stocks gave the biggest boost to relative performance S.D. Two of our top individual contributors were U.S. software & services names: Adobe Systems and PayPal 2 For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.

3 Holdings. At the time of purchase, both answered 'yes' to the five key questions I like to ask: Do you grow revenue Do you earn money Do you have a decent balance sheet Do you grow earnings faster than the market average And is your P/E (price-earnings) ratio below 30 Adobe, a leader in desktop publishing software, was the fund's largest holding at period end. Its stock returned 63% this period, helped by a subscription-based business model that generates recurring revenue from the company's Creative Cloud software, which includes popular products such as Photoshop and Illustrator. Adobe is continually adding new products that help grow revenue and earnings. Plus, the company benefits from increased advertising on digital platforms. Our overweighting in payment processor PayPal Holdings returned about 73% this period. We added to our position over the past 12 months because we thought PayPal had some pretty compelling revenue and earnings-growth drivers, including more retailers signing on to accept payments through the PayPal system, general growth in online purchases and a strong outlook for Venmo, a peerto-peer, mobile-based payment application that PayPal acquired in The stock took off last spring, as more investors began recognizing that PayPal's business could sustain double-digit earnings and revenue growth. Q: Any "winners" outside of tech S.D. Yes. Stock picks in consumer discretionary and industrials also contributed to our outperformance. The biggest individual standouts came from elsewhere, though. These included CBOE Global Markets, one of the world's largest exchanges and the fund's seventh-largest holding at period end. We significantly upped our stake in CBOE early in the period, soon after it announced it would buy Kansasbased rival BATS Global Markets, a deal that closed at the end of February. We expected this would be a highly complementary purchase, given BATS' large presence in Europe and its proprietary trading technology. We also thought CBOE's own proprietary products and valuable information sets could help drive strong revenue growth. CBOE checked all the boxes I mentioned earlier: it earned money, generated substantial free cash flow that could help it pay down debt related to the acquisition, traded at less than 30 times earnings, and was growing earnings well above 10%. Our position rose 82% the past 12 months. Q: What about relative detractors S.D. Picks in health care and materials cost us principally because of Intercept Pharmaceuticals, which is not in the benchmark, and First Quantum Minerals. Intercept's only product, Ocaliva a treatment for a liver disease known as NASH (nonalcoholic steatohepatitis) is in late-stage trials. The company was generating limited revenue, losing money and trading on investor sentiment related to Ocaliva's prospects. However, we thought the stock could benefit if Intercept were to receive regulatory approval to sell Ocaliva for NASH. In September, news that 19 patient deaths had occurred when the drug was used at higher dosages to treat other liver diseases sank the stock, and our stake ended the period with a -50% return for the year. In materials, Canada-based First Quantum Minerals was our biggest disappointment. This conservatively managed copper miner was a new addition to the portfolio this period. We thought the company had above-average earnings-growth prospects, driven by demand for copper that is outstripping supply and a resultant rise in copper prices. Quantum also has been in the process of bringing one of the industry's only new copper mines online. Unfortunately for the fund, political challenges in Zambia, along with cost overruns and delays building a new mine in Panama, hindered First Quantum's full-year return. Q: Bill, what do you and Steve see ahead B.K. We're encouraged at period end to see the macroeconomic backdrop improving worldwide. The U.S. has reported two quarters in a row of 3% (annualized) economic growth. In Europe, many countries are seeing growth stabilize or accelerate. Japan is experiencing better economic growth as well and, as a big exporter, stands to gain from the recoveries in the U.S. and Europe. Lastly, many emerging markets seem likely to benefit from greater political clarity and higher commodity prices. We're also pleased that growth investing has come back into favor. Steve is finding more U.S. stocks that are passing his earnings and valuation screens. However, finding non-u.s. stocks that meet both my quality and price criteria has become more challenging as valuations have risen. Still, international stocks generally are cheaper than U.S. stocks, and that discount is wide relative to historical ranges. Going forward, Steve and I plan to continue looking for what we consider the best investment opportunities worldwide. We expect to remain disciplined in selling stocks that have appreciated to what we regard as fair value and rotating the proceeds into stocks that seem reasonably priced versus our estimate of their earningsgrowth prospects. 3 For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.

4 LARGEST CONTRIBUTORS VS. BENCHMARK Bill Kennedy on opportunities in Europe: "About 22% of fund assets were in continental Europe at period end, an overweighting relative to the MSCI World Index. More important than our relative weighting, though, is how our focus in Europe has shifted. "Until recently, we had been investing in European software companies that we expected to benefit as banks and retailers caught up on their tech spending. We made money as that new-economy theme started to play out. "We think the next opportunity in Europe could be in old-economy industries, which have become a lot more rationally structured since the financial crisis and the subsequent European sovereign-debt crisis. The weaker players are gone, which means less competition. As demand ramps up, we believe the surviving old-economy businesses are in a much better position to raise prices, which in turn could benefit earnings. "Among the more-rational industries that we're most excited about are homebuilders in Spain, Ireland and France, and construction and building-materials companies throughout Europe. In Ireland and Spain, for example, there are fewer homebuilders, which has resulted in supply falling short of demand. In Europe, construction and capital expenditures as a percentage of gross domestic product remain at multi-decade lows, which means more homes, roads and plants likely will be built going forward. We think the combination of better economic growth, morerational industry structures and pent-up demand bodes well for the earnings growth of these oldeconomy companies. "At period end, stocks we own related to this theme include an out-of-index brick manufacturer based in Austria that is heavily exposed to newhome construction in Europe and an Irelandheadquartered cement and paving firm that seems to us poised to gain as governments start investing in long-neglected infrastructure upgrades." Holding Adobe Systems, Inc. Market Segment Average Relative Relative Contribution (basis points)* 2.54% 83 CBOE Holdings, Inc. Financials 1.54% 70 PayPal Holdings, Inc. 1.01% 62 Caterpillar, Inc. Industrials 1.23% 53 Square, Inc. * 1 basis point = 0.01%. LARGEST DETRACTORS VS. BENCHMARK Holding First Quantum Minerals Ltd. Intercept Pharmaceuticals, Inc. Market Segment 0.31% 44 Average Relative Relative Contribution (basis points)* Materials 0.72% -51 Health Care 0.34% -33 American Tower Corp. Real Estate 0.61% -29 JPMorgan Chase & Co. Financials -0.20% -25 British American Tobacco PLC sponsored ADR * 1 basis point = 0.01%. ASSET ALLOCATION Asset Class Consumer Staples 1.13% -24 Six Months Ago International Equities 46.49% 46.41% Developed Markets 37.98% 40.65% Emerging Markets 8.51% 5.75% Tax-Advantaged Domiciles 0.00% 0.01% Domestic Equities 51.54% 52.34% Bonds 0.00% 0.00% Cash & Net Other Assets 1.97% 1.25% 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. 4 For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.

5 MARKET-SEGMENT DIVERSIFICATION Market Segment Six Months Ago 26.78% 23.42% Financials 16.96% 19.42% Consumer Discretionary 12.19% 13.01% Health Care 11.59% 10.50% Industrials 10.17% 14.67% Consumer Staples 7.83% 7.47% Materials 5.27% 4.35% Energy 3.69% 3.04% Real Estate 1.90% 1.05% Telecommunication Services 1.11% 1.53% Multi Sector 0.40% -- Utilities 0.13% 0.30% Other 0.00% 0.00% COUNTRY DIVERSIFICATION Country Six Months Ago United States 53.47% 53.57% Japan 6.90% 6.79% United Kingdom 5.99% 8.14% Germany 5.25% 4.85% France 4.53% 3.78% China 2.98% 1.60% Switzerland 2.95% 2.85% Netherlands 2.19% 3.04% India 1.98% 1.31% Spain 1.77% 1.59% Canada 1.46% 1.38% Ireland 1.27% 1.11% Sweden 1.21% 1.62% Zambia 1.09% LARGEST HOLDINGS Holding Adobe Systems, Inc. Market Segment Six Months Ago 3.31% 2.63% Caterpillar, Inc. Industrials 2.70% 1.24% adidas AG Microsoft Corp. Consumer Discretionary 2.62% 2.69% 2.19% 1.88% S&P Global, Inc. Financials 2.16% 1.54% British American Tobacco PLC (United Kingdom) Consumer Staples 2.13% 1.68% CBOE Holdings, Inc. Financials 2.04% 1.30% Alphabet, Inc. Class A Apple, Inc. PayPal Holdings, Inc. 2.00% 2.24% 1.99% 2.75% 1.95% 1.24% 10 Largest Holdings as a % of Net Assets 23.09% 20.85% 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. 5 For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.

6 FISCAL PERFORMANCE SUMMARY: Periods ending October 31, Month Cumulative YTD 1 3 Annualized 5 10 / LOF 1 Fidelity Worldwide Fund Gross Expense Ratio: 0.91% % 26.59% 26.49% 8.94% 12.30% 4.96% MSCI World (Net MA) Index 9.74% 18.64% 23.32% 8.61% 12.04% 4.53% Morningstar Fund World Large Stock 9.70% 19.73% 22.31% 7.53% 10.91% 3.81% % Rank in Morningstar Category (1% = Best) % 24% 26% 26% # of Funds in Morningstar Category Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 05/30/ 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. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. Performance shown is that of the fund's Retail Class shares (if multiclass). You may own another share class of the fund with a different expense structure and, thus, have different returns. To learn more or to obtain the most recent month-end or other share-class performance, visit fidelity.com/performance, institutional.fidelity.com, or 401k.com. Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated. Please see the last page(s) of this Q&A document for most-recent calendarquarter performance. 6 For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.

7 Definitions and Important 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. 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. but impose different expense structures. 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. 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 World Index (Net MA Tax) is a market-capitalization weighted index that is designed to measure the investable equity market performance for global investors of developed markets. Index returns are adjusted for tax withholding rates applicable to U.S. based on mutual funds organized as Massachusetts business trusts. MSCI ACWI (All Country World Index) Index is a marketcapitalization-weighted index that is designed to measure the investable equity market performance for global investors of developed and emerging markets. 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. RANKING 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. % Rank in Morningstar Category is the fund's total-return percentile rank relative to all funds that have the same Morningstar Category. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100. The top-performing fund in a category will always receive a rank of 1%. % Rank in Morningstar Category is based on total returns which include reinvested dividends and capital gains, if any, and exclude sales charges. Multiple share classes of a fund have a common portfolio 7

8 Manager Facts William Kennedy is a portfolio manager 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. Mr. DuFour earned his bachelor of arts degree in American studies from the University of Notre Dame and his master of business administration degree in finance from the University of Chicago. In this role, Mr. Kennedy manages Fidelity International Discovery Fund and Fidelity Advisor International Discovery Fund. Additionally, he co-manages Fidelity Worldwide Fund and Fidelity Advisor Worldwide Fund. Prior to assuming his current responsibilities, Mr. Kennedy managed Fidelity Pacific Basin Fund and Fidelity Advisor Japan Fund. Previously, he served as an assistant portfolio manager and as a research analyst covering investment opportunities in India and the regional power sector. Mr. Kennedy also served as director of equity research in Fidelity's Hong Kong office as well as group leader of the Global Research group. He has been in the investments industry since Mr. Kennedy earned his bachelor of arts degree in economics from the University of Notre Dame. He is also a CFA charterholder. Stephen DuFour is a portfolio manager 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, Mr. DuFour manages Fidelity Focused Stock Fund and Fidelity U.S. Focused Stock Fund. Additionally, he comanages Fidelity and Fidelity Advisor Worldwide Fund and Fidelity and Fidelity Advisor Global Balanced Fund. Prior to assuming his current responsibilities, Mr. DuFour managed various other Fidelity funds, including Fidelity Advisor Equity Value Fund and Fidelity VIP Value, Fidelity Equity- Income II Fund, and Fidelity Balanced Fund. Previously, Mr. DuFour served as sector leader of Fidelity's Natural Resources Equity Research group. During this time, he also managed Fidelity Convertible Securities Fund, Fidelity Advisor Energy Fund, and Select Energy. Prior to that, Mr. DuFour managed Select Transportation and Select Multimedia. Before joining Fidelity as an equity analyst in 1992, Mr. DuFour worked as an associate in portfolio management at General Electric Capital Corporation and as a financial analyst in the Mergers and Acquisitions department of Paine Webber, Inc. He has been in the investments industry since For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.

9 PERFORMANCE SUMMARY: Quarter ending December 31, Annualized 5 10 / LOF 1 Fidelity Worldwide Fund Gross Expense Ratio: 0.81% % 10.05% 11.99% 5.78% 1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 05/30/ 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. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. Performance shown is that of the fund's Retail Class shares (if multiclass). You may own another share class of the fund with a different expense structure and, thus, have different returns. To learn more or to obtain the most recent month-end or other share-class performance, visit fidelity.com/performance, institutional.fidelity.com, or 401k.com. Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated. Before investing in any mutual fund, please carefully consider the investment objectives, risks, charges, and expenses. 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. 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.