Fidelity NorthStar Balanced Fund

Transcription

1 Fidelity NorthStar Balanced Fund Semi-Annual Management Report of Fund Performance September 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 Semi-Annual Management Report of Fund Performance as at September 3, Fidelity NorthStar Balanced Fund This semi-annual management report of fund performance contains financial highlights but does not contain the complete semi-annual financial statements for the investment fund. You can get a copy of the semi-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 MG 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 Results of Operations Fidelity NorthStar Balanced Fund (Fund), Series B, returned -3.4% for the six-month period ended September 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. Global equities, as represented by the MSCI ACWI (All Country World Index) Index, returned 2.9% (in Canadian dollar terms), while global investment-grade bonds, as measured by the Bloomberg Barclays Global Aggregate Bond Index, returned -2.1% (in Canadian dollar terms) for the same period. Market overview: Global equities registered positive returns amid signs of stabilization in Europe and positive economic data in the U.S. European markets, as represented by the MSCI Europe Index, which returned 7.2%, outperforming other global equity markets, due in part to supportive economic data and solid corporate earnings. European markets were also supported by the victory of a centrist candidate in the French presidential election. Asian equities gained during the review period, with the MSCI AC (All Country) Asia-Pacific Index returning 4.4%, after optimism regarding global economic growth and improved corporate earnings forecasts in the region boosted sentiment. U.S. markets lagged other global markets, with the S&P Index returning 1.%; the impact of positive economic data was offset by concerns regarding geopolitical tensions in the Korean peninsula and the implications of Hurricanes Harvey and Irma, as well as the Canadian dollar s appreciation against the U.S. dollar. Global investment-grade bonds lagged equity markets; yields rose after the U.S. Federal Reserve (Fed) increased interest rates by.2% in June, the central bank s second rate increase in. The U.S. president s tax reform plan raised concerns about an increase in the federal deficit, and this too weighed on global bond markets. In Europe, the European Central Bank s concerns about currency volatility led to increased uncertainty, which also weighed on bond markets. Meanwhile, U.K. government bonds (Gilts) rallied in the first half of the period, amid expectations that concerns about the U.K. s exit from the E.U. could cause policy makers to offer continued support to the economy. This positive momentum was reversed in the second half, and Gilts posted negative returns for the quarter after the Bank of England signalled that it could raise interest rates in November. Factors affecting performance: The Fund s exposure to equity securities through Fidelity NorthStar Fund detracted from absolute performance, due to holdings in the consumer discretionary, energy and consumer staples sectors. In the consumer discretionary sector, investments in a U.S.-based chain of domestic merchandise retail stores Bed Bath & Beyond and U.S.-based fashion designer and manufacturer of accessories Fossil Group detracted from absolute performance. In the energy sector, holdings in U.S.-based oil and gas drilling company Unit and U.S.-based oil and gas equipment and services provider Carbo Ceramics detracted from total return. In the consumer staples sector, top detractions from performance came from South Korean food company Ottogi and U.S.-based fruit and vegetables supplier Fresh Del Monte Produce. In contrast, exposure to certain investments in the industrials and information technology sectors contributed to absolute performance. In the industrials sector, exposure to India s capital good provider Graphite India and Japan-based automobile transportation services provider Sakai Moving Service made top contributions. In other sectors, exposure to Japanese discount consumer goods retailer Seria, U.S.-based biopharmaceutical company Gilead Sciences and American health insurance company Anthem contributed to returns. Among fixed-income securities, exposure to treasuries and high-yield bonds made the primary detraction from total returns. An increase in interest rates by the Fed and expectations that central banks will increase interest rates further weighed on fixed-income asset classes. At the end of the review period, the Fund had no exposure to Graphite India. Portfolio changes: During the period, the Fund maintained a strategic allocation of % equities and % fixed-income securities, in line with its neutral mix. During the review period, the Fund s allocation to the consumer discretionary sector decreased as the portfolio managers sold holdings in firms with valuations that become expensive or where fundamentals had weakened. However, exposure was added to select holdings in the information technology and materials sectors. Equity portfolio co-manager Dan Dupont initiated positions in companies that had publicly announced they would be acquired by another company and where the transaction was expected to have a high likelihood of closing. These 1

4 Fidelity NorthStar Balanced Fund Management Discussion of Fund Performance continued investments were considered to be relatively short term in nature and were used as an alternative to cash. Positions in NXP Semiconductors in the information technology sector and American multinational agrochemical and agricultural biotechnology company Monsanto in the materials sector were initiated to serve as short-term cash alternatives. In contrast, exposure to the consumer discretionary sector declined after the portfolio manager closed a position in American clothing company Hanesbrands, due to its weakening fundamentals and relatively less attractive risk-to-reward profile. Fixed-income portfolio managers Jeff Moore and Michael Plage have maintained a preference for riskier fixed-income securities (such as corporate bonds, high-yield bonds and floating rate debt) over risk-free securities (such as government bonds and cash). Among government bonds, the portfolio managers have maintained significant exposure to Treasury Inflation-Protected Securities to mitigate the risks of higher inflation. The portfolio managers continue to favour high-yield bonds in light of the low default risk environment, with an emphasis on BB-rated and B-rated bonds. In addition, the portfolio managers continue to hold a large position in leveraged loans, favoured for their floating rate characteristics. They believe upcoming regulatory changes will support credit quality and lead to some spread tightening in this sector. At the end of the review period, the Fund held 18.8% of its assets in cash and cash equivalents. This allocation is primarily attributable to equity portfolio co-manager Dan Dupont s caution on equity valuation levels and his aim to mitigate downside risk in the event of a market correction. The cash may be readily deployed as investment opportunities arise, and Mr. Dupont is continually monitoring the market. Effective July 21,, Geoff Stein and David Wolf assumed portfolio management responsibilities for the Fund, succeeding portfolio manager Christopher Sharpe. Derivatives exposure: The Fund engaged in forward foreign currency contracts with the aim of mitigating the impact of foreign exchange rate changes. The use of currency forward contracts for this purpose allowed the portfolio managers to actively allocate portions of the Underlying Fund s assets to more attractive markets and securities, while mitigating the exchange rate risk that such active capital allocation would otherwise entail. Recent Developments Equity portfolio co-manager Dan Dupont remains focused on mitigating downside risk and continues to be cautious about overall market valuations. He is also watchful of the loose credit environment and the risks associated with the late market cycle. Against this background, the cash allocation in the Fund remains higher than typical. As U.S. equities continued to trend higher, the co-portfolio manager Joel Tillinghast reduced exposure to U.S. holdings where valuations had become excessive. He continues to find a relatively high number of attractively priced Japanese securities in the small- and mid-cap segments, noting their strong balance sheets, low debt levels and low price-to-earnings ratios. Fixed-income portfolio managers Jeff Moore and Michael Plage maintained a positive view on U.S. Treasury Inflation-Protected securities because of their relative attractiveness from a valuation perspective and the managers view of the economic cycle and interest rate environment. 2

5 Related Party Transactions Manager and Portfolio Adviser The Fund is managed by Fidelity Investments Canada ULC (Fidelity). Fidelity is part of a broader group 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 Fidelity Investments Money Management, Inc. and 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 $24,36, for the period ended September 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 $2,893, for the period ended September 3,. 3

6 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 NorthStar Balanced Fund Series A September 3, Periods ended March 31, A Net assets, beginning of period C $ $ 11. $ $ 1. Total revenue Total expenses (excluding distributions) (.1) (.29) (.3) (.23) Realized gains (losses) (.19) (.47) Unrealized gains (losses) (.34).73 (.9) 2.19 Total increase (decrease) from operations C (.43) From net investment income (excluding dividends) (.3) (.6) (.2) From dividends From capital gains (.43) (.6) Return of capital Total distributions C,D (.3) (.48) (.9) Net assets, end of period C $ $ $ 11. $ Net asset value (s) E $ 723,78 $ 78,734 $ 762,84 $ 312,3 Securities outstanding E 6,988,28 63,918,9 66,8,794 26,667,327 Management expense ratio F,G 2.4% 2.46% 2.48% 2.2% Management expense ratio before waivers or absorptions F,G 2.1% 2.4% 2.6% 2.7% Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ $ $ $ Fidelity NorthStar Balanced Fund Series B September 3, Periods ended March 31, A Net assets, beginning of period C $ 12.3 $ 11.8 $ $ 1. Total revenue.2 (1.1).3.18 Total expenses (excluding distributions) (.14) (.27) (.27) (.21) Realized gains (losses) (.19) (.46) Unrealized gains (losses) (.33) 2.64 (.74) 2.21 Total increase (decrease) from operations C (.41).81 (.7) 2.49 From net investment income (excluding dividends) (.4) (.6) (.2) From dividends From capital gains (.43) (.7) Return of capital Total distributions C,D (.4) (.49) (.9) Net assets, end of period C $ $ 12.3 $ 11.8 $ Net asset value (s) E $ 1,119,76 $ 1,21,692 $ 1,39,487 $ 428,16 Securities outstanding E 93,788,462 98,43,8 113,146,682 36,482,36 Management expense ratio F,G 2.24% 2.2% 2.26% 2.3% Management expense ratio before waivers or absorptions F,G 2.29% 2.31% 2.31% 2.32% Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ $ $ $

7 Fidelity NorthStar Balanced Fund Series F September 3, Periods ended March 31, A Net assets, beginning of period C $ 12.9 $ $ $ 1. Total revenue Total expenses (excluding distributions) (.7) (.14) (.13) (.1) Realized gains (losses) (.19) (.49).6.31 Unrealized gains (losses) (.3).76 (.7) 2.13 Total increase (decrease) from operations C (.36) From net investment income (excluding dividends) (.1) (.8) (.8) (.6) From dividends From capital gains (.47) (.9) Return of capital Total distributions C,D (.1) (.8) (.6) (.1) Net assets, end of period C $ $ 12.9 $ $ Net asset value (s) E $ 388,76 $ 396,87 $ 37,648 $ 17,6 Securities outstanding E 31,679,14 31,2,148 31,661,97 9,13,8 Management expense ratio F,G 1.1% 1.12% 1.1% 1.13% Management expense ratio before waivers or absorptions F,G 1.12% 1.14% 1.16% 1.17% Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ $ $ $ Fidelity NorthStar Balanced Fund Series F September 3, Periods ended March 31, A Net assets, beginning of period C $ $ $ $ 2. Total revenue Total expenses (excluding distributions) (.12) (.24) (.2) (.2) Realized gains (losses) (.34) (.76) Unrealized gains (losses) (.9) 1.3 (1.44) 4.44 Total increase (decrease) from operations C (.61) From net investment income (excluding dividends) (.1) (.14) (.16) (.11) From dividends From capital gains (.88) (.17) Return of capital (.4) (1.9) (.99) (.77) Total distributions C,D (.) (1.23) (2.3) (1.6) Net assets, end of period C $ 2.9 $ $ $ Net asset value (s) E $ 24,478 $ 2,442 $ 29,472 $ 6,48 Securities outstanding E 1,16,266 1,14,366 1,36, ,286 Management expense ratio F,G 1.8% 1.1% 1.8% 1.12% Management expense ratio before waivers or absorptions F,G 1.1% 1.13% 1.1% 1.16% Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ 2.94 $ $ $

8 Financial Highlights continued Fidelity NorthStar Balanced Fund Series F8 September 3, Periods ended March 31, A Net assets, beginning of period C $ 2.24 $ 2.42 $ $ 2. Total revenue Total expenses (excluding distributions) (.11) (.23) (.24) (.19) Realized gains (losses) (.31) (.77) Unrealized gains (losses) (.) 1.27 (1.48) 4.3 Total increase (decrease) from operations C (.7) From net investment income (excluding dividends) (.1) (.13) (.1) (.11) From dividends From capital gains (.84) (.17) Return of capital (.82) (1.66) (1.64) (1.28) Total distributions C,D (.83) (1.79) (2.64) (1.) Net assets, end of period C $ $ 2.24 $ 2.42 $ Net asset value (s) E $ 1,61 $ 12,381 $ 12,23 $ 2,19 Securities outstanding E 6,61 612,2 98,68 97,19 Management expense ratio F,G 1.11% 1.11% 1.1% 1.1% Management expense ratio before waivers or absorptions F,G 1.12% 1.14% 1.17% 1.19% Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ $ $ $ Fidelity NorthStar Balanced Fund Series O September 3, Periods ended March 31, A Net assets, beginning of period C $ $ $ 11.8 $ 1. Total revenue Total expenses (excluding distributions) Realized gains (losses) (.2) (.1) Unrealized gains (losses) (.33).79 (1.13) 2.6 Total increase (decrease) from operations C (.28) 1.13 (.36) 2.2 From net investment income (excluding dividends) (.4) (.2) (.1) (.14) From dividends (.1) From capital gains (.) (.11) Return of capital Total distributions C,D (.4) (.21) (.6) (.24) Net assets, end of period C $ 12.3 $ $ $ 11.8 Net asset value (s) E $ 967,497 $ 1,44,883 $ 796,87 $ 6,946 Securities outstanding E 78,62,43 82,76,84 68,434,89,23,867 Management expense ratio % % % % Management expense ratio before waivers or absorptions % % % % Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ $ $ $

9 Fidelity NorthStar Balanced Fund Series T September 3, Periods ended March 31, A Net assets, beginning of period C $ 21.4 $ $ $ 2. Total revenue Total expenses (excluding distributions) (.26) (.2) (.6) (.4) Realized gains (losses) (.33) (.86) Unrealized gains (losses) (.7) 1.32 (1.12) 4.23 Total increase (decrease) from operations C (.73) From net investment income (excluding dividends) (.6) (.1) (.4) From dividends From capital gains (.79) (.13) Return of capital (.4) (1.9) (1.2) (.83) Total distributions C,D (.4) (1.1) (1.93) (1.) Net assets, end of period C $ 2.17 $ 21.4 $ $ Net asset value (s) E $ 34,64 $ 38,26 $ 36,816 $ 1,24 Securities outstanding E 1,716,22 1,797,772 1,738,77 676,378 Management expense ratio F,G 2.43% 2.4% 2.47% 2.3% Management expense ratio before waivers or absorptions F,G 2.49% 2.2% 2.% 2.7% Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ $ $ $ Fidelity NorthStar Balanced Fund Series T8 September 3, Periods ended March 31, A Net assets, beginning of period C $ $ 2.3 $ 22.7 $ 2. Total revenue Total expenses (excluding distributions) (.24) (.49) (.3) (.44) Realized gains (losses) (.3) (.71) Unrealized gains (losses) (.48) 1.23 (1.46) 4.13 Total increase (decrease) from operations C (.62) 1.32 (.34) 4.62 From net investment income (excluding dividends) (.) (.1) (.4) From dividends From capital gains (.76) (.12) Return of capital (.83) (1.66) (1.67) (1.33) Total distributions C,D (.83) (1.71) (2.3) (1.49) Net assets, end of period C $ $ $ 2.3 $ 22.7 Net asset value (s) E $ 21,3 $ 26,979 $ 33,643 $ 9,14 Securities outstanding E 1,148,896 1,377,87 1,677, ,661 Management expense ratio F,G 2.44% 2.4% 2.48% 2.4% Management expense ratio before waivers or absorptions F,G 2.% 2.3% 2.6% 2.8% Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ $ $ $

10 Financial Highlights continued Fidelity NorthStar Balanced Fund Series S September 3, Periods ended March 31, A Net assets, beginning of period C $ 21. $ $ 22.6 $ 2. Total revenue Total expenses (excluding distributions) (.24) (.48) (.) (.4) Realized gains (losses) (.33) (.77) Unrealized gains (losses) (.8) 1.37 (1.13) 4.3 Total increase (decrease) from operations C (.72) From net investment income (excluding dividends) (.7) (.11) (.) From dividends From capital gains (.81) (.13) Return of capital (.4) (1.9) (1.2) (.83) Total distributions C,D (.4) (1.16) (1.94) (1.1) Net assets, end of period C $ 2.3 $ 21. $ $ 22.6 Net asset value (s) E $ 24,86 $ 27,232 $ 31,71 $ 13,16 Securities outstanding E 1,213,88 1,28,99 1,497,6 98,874 Management expense ratio F,G 2.22% 2.23% 2.24% 2.28% Management expense ratio before waivers or absorptions F,G 2.27% 2.29% 2.3% 2.31% Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ $ $ $ Fidelity NorthStar Balanced Fund Series S8 September 3, Periods ended March 31, A Net assets, beginning of period C $ $ 2.1 $ 22.1 $ 2. Total revenue Total expenses (excluding distributions) (.21) (.4) (.48) (.4) Realized gains (losses) (.31) (.7) Unrealized gains (losses) (.7) 1.22 (1.62) 4.43 Total increase (decrease) from operations C (.69) 1.33 (.4).2 From net investment income (excluding dividends) (.6) (.1) (.4) From dividends From capital gains (.77) (.13) Return of capital (.83) (1.66) (1.67) (1.33) Total distributions C,D (.83) (1.72) (2.) (1.1) Net assets, end of period C $ 18.2 $ $ 2.1 $ 22.1 Net asset value (s) E $ 24,49 $ 3,61 $ 37,428 $ 7,92 Securities outstanding E 1,341,12 1,6,93 1,869, ,64 Management expense ratio F,G 2.22% 2.23% 2.23% 2.27% Management expense ratio before waivers or absorptions F,G 2.28% 2.29% 2.29% 2.3% Trading expense ratio H.2%.1%.3%.% Portfolio turnover rate I 1.68% 32.9% % 1.% Net asset value per security, end of period $ $ $ $

11 Fidelity NorthStar Balanced Fund Series E1 September 3, Periods ended March 31, 216 J Net assets, beginning of period C $ 1.34 $ 9.69 $ 1. Total revenue Total expenses (excluding distributions) (.11) (.22) (.3) Realized gains (losses) (.16) (.47) (.4) Unrealized gains (losses) (.28).61 (.14) Total increase (decrease) from operations C (.3).66 (.19) From net investment income (excluding dividends) (.3) From dividends From capital gains Return of capital Total distributions C,D (.3) Net assets, end of period C $ 1. $ 1.34 $ 9.69 Net asset value (s) E $ 242,41 $ 23,28 $ 142,741 Securities outstanding E 24,244,243 22,77,712 14,767,618 Management expense ratio F,K 2.1% 2.16% 2.18% Management expense ratio before waivers or absorptions F,K 2.21% 2.22% 2.24% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ 1.8 $ $ Fidelity NorthStar Balanced Fund Series E1T September 3, Periods ended March 31, 216 J Net assets, beginning of period C $ 19.1 $ $ 2. Total revenue Total expenses (excluding distributions) (.2) (.41) (.6) Realized gains (losses) (.3) (1.11) (.7) Unrealized gains (losses) (.) 1.11 (.27) Total increase (decrease) from operations C (.67) 1.16 (.3) From net investment income (excluding dividends) (.7) From dividends From capital gains Return of capital (.49) (.99) (.16) Total distributions C,D (.49) (1.6) (.16) Net assets, end of period C $ $ 19.1 $ Net asset value (s) E $ 8,34 $ 8,1 $ 3,32 Securities outstanding E 43,2 433,79 183,9 Management expense ratio F,K 2.11% 2.12% 2.1% Management expense ratio before waivers or absorptions F,K 2.16% 2.17% 2.22% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $

12 Financial Highlights continued Fidelity NorthStar Balanced Fund Series E2 September 3, Periods ended March 31, 216 J Net assets, beginning of period C $ 1.3 $ 9.69 $ 1. Total revenue Total expenses (excluding distributions) (.11) (.21) (.3) Realized gains (losses) (.16) (.) (.3) Unrealized gains (losses) (.31).62 (.1) Total increase (decrease) from operations C (.38).67 (.19) From net investment income (excluding dividends) (.4) From dividends From capital gains Return of capital Total distributions C,D (.4) Net assets, end of period C $ 1.1 $ 1.3 $ 9.69 Net asset value (s) E $,132 $ 47,48 $ 23,92 Securities outstanding E,8,618 4,9,97 2,42, Management expense ratio F,K 2.7% 2.8% 2.9% Management expense ratio before waivers or absorptions F,K 2.12% 2.14% 2.1% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $ Fidelity NorthStar Balanced Fund Series E2T September 3, Periods ended March 31, 216 J Net assets, beginning of period C $ 19.2 $ $ 2. Total revenue Total expenses (excluding distributions) (.2) (.4) (.6) Realized gains (losses) (.3) (1.68) (.8) Unrealized gains (losses) (.3) 1.19 (.4) Total increase (decrease) from operations C (.68) 1.1 (.49) From net investment income (excluding dividends) (.7) From dividends From capital gains Return of capital (.49) (.99) (.16) Total distributions C,D (.49) (1.6) (.16) Net assets, end of period C $ 18.4 $ 19.2 $ Net asset value (s) E $ 1,8 $ 1,13 $ 38 Securities outstanding E 82,9 8,199 18,684 Management expense ratio F,K 2.7% 2.% 2.2% Management expense ratio before waivers or absorptions F,K 2.12% 2.1% 2.9% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $

13 Fidelity NorthStar Balanced Fund Series E3 September 3, Periods ended March 31, 216 J Net assets, beginning of period C $ 1.36 $ 9.7 $ 1. Total revenue Total expenses (excluding distributions) (.1) (.2) (.3) Realized gains (losses) (.16) (.49) (.3) Unrealized gains (losses) (.33).61 (.9) Total increase (decrease) from operations C (.4).69 (.13) From net investment income (excluding dividends) (.4) From dividends From capital gains Return of capital Total distributions C,D (.4) Net assets, end of period C $ 1.3 $ 1.36 $ 9.7 Net asset value (s) E $ 11,18 $ 8,74 $ 8,243 Securities outstanding E 1,11,34 839,866 8,13 Management expense ratio F,K 1.97% 1.98% 2.% Management expense ratio before waivers or absorptions F,K 2.2% 2.3% 2.7% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $ Fidelity NorthStar Balanced Fund Series E3T September 3, L Net assets, beginning of period C $ 2. Total revenue Total expenses (excluding distributions) Realized gains (losses) Unrealized gains (losses).26 Total increase (decrease) from operations C.26 From net investment income (excluding dividends) From dividends From capital gains Return of capital (.8) Total distributions C,D (.8) Net assets, end of period C $ 2.17 Net asset value (s) E $ 1 Securities outstanding E Management expense ratio F,M 2.3% Management expense ratio before waivers or absorptions F,M 2.3% Trading expense ratio H.2% Portfolio turnover rate I 1.68% Net asset value per security, end of period $

14 Financial Highlights continued Fidelity NorthStar Balanced Fund Series E4 September 3, Periods ended March 31, 216 J Net assets, beginning of period C $ 1.36 $ 9.7 $ 1. Total revenue Total expenses (excluding distributions) (.1) (.19) (.3) Realized gains (losses) (.1) (.) (.3) Unrealized gains (losses) (.6).62 (.2) Total increase (decrease) from operations C (.66).81 (.29) From net investment income (excluding dividends) (.4) From dividends From capital gains Return of capital Total distributions C,D (.4) Net assets, end of period C $ 1.3 $ 1.36 $ 9.7 Net asset value (s) E $ 2,31 $ 2,696 $ 74 Securities outstanding E 229,32 26,13 9,24 Management expense ratio F,K 1.87% 1.9% 2.% Management expense ratio before waivers or absorptions F,K 1.92% 1.9% 2.12% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $ Fidelity NorthStar Balanced Fund Series E September 3, Periods ended March 31, 216 J Net assets, beginning of period C $ 1.36 $ 9.7 $ 1. Total revenue Total expenses (excluding distributions) (.1) (.19) (.3) Realized gains (losses) (.13) (.72) (.) Unrealized gains (losses) (.11).72 (.19) Total increase (decrease) from operations C (.19).81 (.24) From net investment income (excluding dividends) (.4) From dividends From capital gains Return of capital Total distributions C,D (.4) Net assets, end of period C $ 1.3 $ 1.36 $ 9.7 Net asset value (s) E $ 9,3 $ 3,179 $ 44 Securities outstanding E 932,8 36,114 4,912 Management expense ratio F,K 1.89% 1.92% 1.97% Management expense ratio before waivers or absorptions F,K 1.9% 1.98% 2.3% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $

15 Fidelity NorthStar Balanced Fund Series P1 September 3, Periods ended March 31, 216 N Net assets, beginning of period C $ 1.2 $ 9.49 $ 1. Total revenue Total expenses (excluding distributions) (.) (.1) (.3) Realized gains (losses) (.16) (.7).28 Unrealized gains (losses) (.28).64 (.68) Total increase (decrease) from operations C (.3).77 (.34) From net investment income (excluding dividends) (.1) (.7) (.) From dividends From capital gains (.38) Return of capital Total distributions C,D (.1) (.7) (.43) Net assets, end of period C $ 9.91 $ 1.2 $ 9.49 Net asset value (s) E $ 99,482 $ 8,4 $ 28,37 Securities outstanding E 1,6,13 8,4,42 3,23,121 Management expense ratio F,O 1.1% 1.3% 1.1% Management expense ratio before waivers or absorptions F,O 1.3% 1.% 1.7% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $ Fidelity NorthStar Balanced Fund Series P1T September 3, Periods ended March 31, 216 N Net assets, beginning of period C $ $ $ 2. Total revenue Total expenses (excluding distributions) (.1) (.2) (.6) Realized gains (losses) (.29) (1.3).7 Unrealized gains (losses) (.6) 1.14 (1.38) Total increase (decrease) from operations C (.9) 1.36 (.66) From net investment income (excluding dividends) (.1) (.13) (.1) From dividends From capital gains (.76) Return of capital (.46) (.94) (.32) Total distributions C,D (.47) (1.7) (1.18) Net assets, end of period C $ $ $ Net asset value (s) E $ 9,42 $ 8,217 $ 2,638 Securities outstanding E 37,21 43, ,484 Management expense ratio F,O 1.2% 1.3% 1.1% Management expense ratio before waivers or absorptions F,O 1.4% 1.% 1.7% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $

16 Financial Highlights continued Fidelity NorthStar Balanced Fund Series P2 September 3, Periods ended March 31, 216 N Net assets, beginning of period C $ 1.21 $ 9.49 $ 1. Total revenue Total expenses (excluding distributions) (.) (.9) (.3) Realized gains (losses) (.16) (.71).3 Unrealized gains (losses) (.31).6 (.74) Total increase (decrease) from operations C (.32).73 (.37) From net investment income (excluding dividends) (.1) (.7) (.) From dividends From capital gains (.38) Return of capital Total distributions C,D (.1) (.7) (.43) Net assets, end of period C $ 9.93 $ 1.21 $ 9.49 Net asset value (s) E $ 2,267 $ 24,3 $ 3,429 Securities outstanding E 2,67,73 2,36, ,332 Management expense ratio F,O.94%.9%.93% Management expense ratio before waivers or absorptions F,O.9%.96%.99% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ 9.92 $ 1.21 $ Fidelity NorthStar Balanced Fund Series P2T September 3, Periods ended March 31, 216 N Net assets, beginning of period C $ $ $ 2. Total revenue (.8) Total expenses (excluding distributions) (.9) (.18) (.6) Realized gains (losses) (.29) (.7).3 Unrealized gains (losses) (.39) 1. (1.8) Total increase (decrease) from operations C (.38) 1.33 (.92) From net investment income (excluding dividends) (.1) (.14) (.1) From dividends From capital gains (.76) Return of capital (.46) (.93) (.32) Total distributions C,D (.47) (1.7) (1.18) Net assets, end of period C $ $ $ Net asset value (s) E $ 1,279 $ 1,39 $ 938 Securities outstanding E 7,29 72,99,266 Management expense ratio F,O.9%.96%.97% Management expense ratio before waivers or absorptions F,O.97%.98% 1.2% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $

17 Fidelity NorthStar Balanced Fund Series P3 September 3, Periods ended March 31, 216 N Net assets, beginning of period C $ 1.2 $ 9.49 $ 1. Total revenue Total expenses (excluding distributions) (.) (.9) (.3) Realized gains (losses) (.16) (.47).16 Unrealized gains (losses) (.24).24 (.49) Total increase (decrease) from operations C (.27).4 (.28) From net investment income (excluding dividends) (.1) (.7) (.) From dividends From capital gains (.38) Return of capital Total distributions C,D (.1) (.7) (.43) Net assets, end of period C $ 9.92 $ 1.2 $ 9.49 Net asset value (s) E $ 6,436 $ 3,41 $ 2,68 Securities outstanding E 648,71 338, ,367 Management expense ratio F,O.9%.91%.89% Management expense ratio before waivers or absorptions F,O.91%.93%.94% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ 1.24 $ Fidelity NorthStar Balanced Fund Series P3T September 3, Periods ended March 31, P Net assets, beginning of period C $ $ 2. Total revenue..6 Total expenses (excluding distributions) (.1) (.1) Realized gains (losses) (.28) (.81) Unrealized gains (losses) (1.2).22 Total increase (decrease) from operations C (1.8) (.4) From net investment income (excluding dividends) (.1) (.1) From dividends From capital gains Return of capital (.48) (.6) Total distributions C,D (.49) (.71) Net assets, end of period C $ $ Net asset value (s) E $ 4 $ 26 Securities outstanding E 2,362 26,416 Management expense ratio F,Q.9%.91% Management expense ratio before waivers or absorptions F,Q.9%.92% Trading expense ratio H.2%.1% Portfolio turnover rate I 1.68% 32.9% Net asset value per security, end of period $ $

18 Financial Highlights continued Fidelity NorthStar Balanced Fund Series P4 September 3, Periods ended March 31, 216 N Net assets, beginning of period C $ 1.23 $ 9.49 $ 1. Total revenue Total expenses (excluding distributions) (.4) (.9) (.2) Realized gains (losses) (.16) (1.87).33 Unrealized gains (losses) (.33) 1. (.1) Total increase (decrease) from operations C (.3) 1.4 (.1) From net investment income (excluding dividends) (.1) (.8) (.) From dividends From capital gains (.38) Return of capital Total distributions C,D (.1) (.8) (.43) Net assets, end of period C $ 9.94 $ 1.23 $ 9.49 Net asset value (s) E $ 1,374 $ 49 $ 1 Securities outstanding E 138,194 44, Management expense ratio F,O.87%.88%.81% Management expense ratio before waivers or absorptions F,O.88%.88%.81% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $ Fidelity NorthStar Balanced Fund Series P4T September 3, R Net assets, beginning of period C $ 2. Total revenue.8 Total expenses (excluding distributions) (.4) Realized gains (losses) (.14) Unrealized gains (losses).12 Total increase (decrease) from operations C.2 From net investment income (excluding dividends) From dividends From capital gains Return of capital (.2) Total distributions C,D (.2) Net assets, end of period C $ Net asset value (s) E $ 1 Securities outstanding E 1 Management expense ratio F,S.83% Management expense ratio before waivers or absorptions F,S.83% Trading expense ratio H.2% Portfolio turnover rate I 1.68% Net asset value per security, end of period $

19 Fidelity NorthStar Balanced Fund Series P September 3, Periods ended March 31, 216 N Net assets, beginning of period C $ 1.21 $ 9.49 $ 1. Total revenue Total expenses (excluding distributions) (.4) (.8) (.2) Realized gains (losses) (.16) (.46) (.8) Unrealized gains (losses) (.27).66 (.49) Total increase (decrease) from operations C (.27).86 (.3) From net investment income (excluding dividends) (.1) (.8) (.) From dividends From capital gains (.38) Return of capital Total distributions C,D (.1) (.8) (.43) Net assets, end of period C $ 9.93 $ 1.21 $ 9.49 Net asset value (s) E $ 6,324 $ 6,6 $ 4,941 Securities outstanding E 636,77 636,944 2,69 Management expense ratio F,O.82%.84%.82% Management expense ratio before waivers or absorptions F,O.84%.86%.88% Trading expense ratio H.2%.1%.3% Portfolio turnover rate I 1.68% 32.9% % Net asset value per security, end of period $ $ $ Fidelity NorthStar Balanced Fund Series PT September 3, R Net assets, beginning of period C $ 2. Total revenue.7 Total expenses (excluding distributions) (.3) Realized gains (losses) (.14) Unrealized gains (losses).11 Total increase (decrease) from operations C.1 From net investment income (excluding dividends) From dividends From capital gains Return of capital (.2) Total distributions C,D (.2) Net assets, end of period C $ Net asset value (s) E $ 4 Securities outstanding E 23,4 Management expense ratio F,S.81% Management expense ratio before waivers or absorptions F,S.84% Trading expense ratio H.2% Portfolio turnover rate I 1.68% Net asset value per security, end of period $

20 Financial Highlights continued Financial Highlights Footnotes A For the period May 28, 214 (inception date) to March 31, 21. B C D E F G H I This information is derived from the Fund s audited annual and/or unaudited interim financial statements. 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. 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. 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. This information is provided as at period end of the year shown. 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. Effective November 1, 214, 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. 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. The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. A portfolio turnover rate of 1% 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. J For the period February, 216 (commencement of sale of securities) to March 31, 216. K Effective February 9, 216, 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 September 22, (commencement of sale of securities) to September 3,. M Effective September 26,, 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 December 4, 21 (commencement of sale of securities) to March 31, 216. O Effective December 8, 21, 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. P For the period September 16, 216 (commencement of sale of securities) to March 31,. Q Effective September 2, 216, 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. R For the period July 14, (commencement of sale of securities) to September 3,. S Effective July 18,, 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. 18

21 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 1% 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 1.9% 38.1% 61.9% Series B 1.8%.6% 44.44% Series F.8% 1.% Series F.8% 1.% Series F8.8% 1.% Series T 1.9% 37.23% 62.77% Series T8 1.9% 36.83% 63.17% Series S 1.8%.6% 44.44% Series S8 1.8%.6% 44.44% Series E1 1.77% 6.34% 43.66% Series E1T 1.77% 6.34% 43.66% Series E2 1.7% 7.14% 42.86% Series E2T 1.7% 7.14% 42.86% Series E3 1.72% 7.97% 42.3% Series E3T 1.72% 7.97% 42.3% Series E4 1.7% 8.82% 41.18% Series E 1.6% 6.61% 39.39% Series P1.77% 1.% Series P1T.77% 1.% Series P2.7% 1.% Series P2T.7% 1.% Series P3.72% 1.% Series P3T.72% 1.% Series P4.7% 1.% Series P4T.7% 1.% Series P.6% 1.% Series PT.6% 1.% 19

22 Fidelity NorthStar Balanced Fund 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. 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. For each Series in the Year-by-Year Returns table below, the most recent returns stated are for the current six month period. Series A Series F Commencement of Operations is May 28, 214 Commencement of Operations is May 28, 214 Series B Series F Commencement of Operations is May 28, 214 Commencement of Operations is May 28, 214 Series F Series O Commencement of Operations is May 28, 214 Commencement of Operations is May 28, 214 2

23 Series T Series E Commencement of Operations is May 28, 214 Commencement of Operations is February, 216 Series T8 Series E1T Commencement of Operations is May 28, 214 Commencement of Operations is February, 216 Series S Series E Commencement of Operations is May 28, 214 Commencement of Operations is February, 216 Series S8 Series E2T Commencement of Operations is May 28, 214 Commencement of Operations is February,

24 Fidelity NorthStar Balanced Fund Past Performance continued Series E3 Series P Commencement of Operations is February, 216 Commencement of Operations is December 4, 21 Series E3T Series P1T Commencement of Operations is September 22, Commencement of Operations is December 4, 21 Series E4 Series P Commencement of Operations is February, 216 Commencement of Operations is December 4, 21 Series E Series P2T Commencement of Operations is February, 216 Commencement of Operations is December 4, 21 22

25 Series P3 Series P Commencement of Operations is December 4, 21 Commencement of Operations is December 4, 21 Series P3T Series PT Commencement of Operations is September 16, 216 Commencement of Operations is July 14, Series P Commencement of Operations is December 4, 21 Series P4T Commencement of Operations is July 14, 23