Fidelity American Disciplined Equity Fund

Transcription

1 Fidelity American Disciplined Equity Fund Annual Management Report of Fund Performance June 3, 17

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

3 Annual Management Report of Fund Performance as at June 3, 17 Fidelity American Disciplined Equity Fund This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements for the investment fund. You can get a copy of the annual financial statements at your request, and at no cost, by calling , by writing to us at Fidelity Investments, 483 Bay St. Suite 3, Toronto ON M5G 2N7 or by visiting our website at or SEDAR at Securityholders may also contact us using one of these methods to request a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record or quarterly portfolio disclosure relating to the investment fund. Management Discussion of Fund Performance Investment Objective and Strategies Investment Objective: Fidelity American Disciplined Equity Fund (Fund) aims to achieve long-term capital growth by investing primarily in equity securities of U.S. companies. Strategies: The Fund aims to invest in sectors in approximately the same proportions as those sectors are represented in the S&P 5 Index. The sector portfolio managers choose investments for their sector based on a thorough review of a number of factors, which may include each company s management, financial condition and potential for earnings growth over the long term. The portfolio manager regularly reviews the target allocations and rebalances the allocations, as necessary. Risk The risks associated with investing in this Fund remain as discussed in the prospectus. Any changes to the Fund over the period have not affected the overall level of risk of the Fund. The Fund is suitable for long-term investors wishing to gain U.S. equity exposure for their portfolio and who can handle the volatility of returns generally associated with equity investments. To invest in this Fund, they should be able to accept a medium level of risk. The suitability of the investment has not changed from what has been disclosed in the prospectus. Results of Operations Fidelity American Disciplined Equity Fund, Series B, returned 14.%, after fees and expenses, for the one-year period ended June 3, 17. The net returns of the other series of this Fund are similar to those of Series B, except for differences attributable to expense structures. U.S. equity markets, as represented by the S&P 5 Index, returned 17.9% (in Canadian dollar terms) for the review period. Market overview: During the review period, U.S. equities rose following a series of gains based on improving economic data and optimism regarding the proposed policies of the new U.S. administration, strengthening corporate earnings, solid labour market conditions and multi-year-high consumer confidence. These factors continued to support the economy and equity market. During the period, the U.S. Federal Reserve (the Fed) increased the target Fed funds rate three times against the backdrop of continued strength in the U.S. economy. Factors affecting performance: The Fund underperformed its benchmark, the S&P 5, primarily due to investments in the consumer staples and energy sectors. In the consumer staples sector, investments in American food retailer Kroger, beauty products manufacturer Coty and health care company CVS Health detracted from relative returns. At the end of the review period, the Fund had no exposure to Kroger. In the energy sector, investments in oil and natural gas exploration and production firms Hess and Pioneer Natural Resources detracted from relative returns. In contrast, investments in the industrials sector contributed. In the sector, investments in transportation service provider CSX and air compressor supplier Ingersoll Rand, as well as having no exposure to U.S.-based conglomerate General Electric, contributed to relative returns. Among other sectors, notable contributions came from banks KeyCorp and Citigroup and having lower than benchmark exposure to oil and gas company ExxonMobil. Portfolio changes: During the review period, the Fund s exposure to the semiconductors and semiconductor equipment and banking industries was increased. Within the semiconductors and semiconductor equipment industry, positions were initiated in Intel and Micron Technology, owing to their favorable valuations. Within the banking industry, a position in American bank holding company Huntington Bancshares was initiated, and exposure was increased to Citigroup. The portfolio manager believes banks should benefit as interest rates gradually rise. In contrast, exposure to the health care equipment and services and the software and services industries declined. In the former industry, a position in medical device firm Medtronic and a position in Bard, a developer, manufacturer and marketer of medical devices, were exited when their stocks had reached their target potential. Holdings in the software and services industry also declined during the review period: a position in software firm Oracle was exited, and exposure was reduced to social media company Facebook, after the portfolio manager found more attractive valuations elsewhere. 1

4 Fidelity American Disciplined Equity Fund Management Discussion of Fund Performance continued Recent Developments Portfolio manager Chandler Willett believes the U.S. economy appears relatively strong and ranks among the best regions in which to invest globally. He believes that for now, the likelihood of a U.S. recession is low; steady job creation and solid consumer spending continue to support the economy as it shifts into the later part of the business cycle. Mr. Willett believes the slower pace of global growth and continued speculation about interest rate tightening could potentially moderate the transition from mid- to late-cycle. Meanwhile, he believes inflation may also surpass expectations as commodities continue their recent but steady rise. On a sector basis, he is optimistic that sources of higher relative returns can be found in the information technology and health care sectors, where the dispersion of returns is greater. Mr. Willett and his team remain consistent in their investment process, which aims to deliver a cohesive portfolio that captures the best thinking of the team. At the end of the review period, the information technology sector accounted for the largest absolute exposure for the Fund. At an industry level, the Fund deviated the most from the benchmark weighting by having more exposure to the consumer durables and apparel industry and less exposure to the technology hardware and equipment industry. Independent Review Committee Effective February 28, 17, Helen M. Meyer retired from the Independent Review Committee and was replaced by James E. Cook as Chair. Also effective on that date, Frances Horodelski of Toronto, Ontario, became a member of the Independent Review Committee. 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 FIAM LLC, 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 $3,863, for the period ended June 3, 17. 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 $5, for the period ended June 3, 17. Brokerage Commissions The Fund may place a portion of its portfolio transactions with brokerage firms which are affiliates of Fidelity Investments, including National Financial Services LLC, provided it determines that these affiliates trade execution abilities and costs are comparable to those of non affiliated, qualified brokerage firms, on an execution only basis. Commissions paid to brokerage firms that are affiliates of Fidelity Investments were $11, for the period ended June 3, 17. Fidelity receives standing instructions from the IRC in respect of policies and procedures governing best execution of transactions with affiliates, which includes brokers affiliated to Fidelity Investments, at least once per year. 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 American Disciplined Equity Fund Series A Periods ended June 3, Net assets, beginning of period B $ $ 17.7 $ $ $ 9.9 Total revenue Total expenses (excluding distributions) (.48) (.48) (.46) (.36) (.27) Realized gains (losses) Unrealized gains (losses) 1.21 (1.49) Total increase (decrease) from operations B 2.26 (.56) From net investment income (excluding dividends) (.7) (.11) (.12) From dividends From capital gains (.85) (1.4) (.9) Return of capital Total distributions B,C (.92) (1.51) (.21) Net assets, end of period B $ $ $ 17.7 $ $ Net asset value (s) D $ 38,929 $ 44,279 $ 58,325 $ 54,371 $ 53,419 Securities outstanding D 2,183,556 2,826,538 3,421,468 3,711,52 4,481,113 Management expense ratio E,F 2.54% 2.55% 2.59% 2.62% 2.58% Management expense ratio before waivers or absorptions E,F 2.57% 2.6% 2.62% 2.62% 2.58% Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $ $ $ $ $ Fidelity American Disciplined Equity Fund Series B Periods ended June 3, Net assets, beginning of period B $ $ 17.4 $ $ $.7 Total revenue Total expenses (excluding distributions) (.45) (.45) (.43) (.33) (.25) Realized gains (losses) Unrealized gains (losses) 1.21 (1.57) Total increase (decrease) from operations B 2.33 (.58) From net investment income (excluding dividends) (.8) (.11) (.14) From dividends From capital gains (.91) (1.46) (.11) Return of capital Total distributions B,C (.98) (1.58) (.25) Net assets, end of period B $ 18. $ $ 17.4 $ $ Net asset value (s) D $ 114,375 $ 124,885 $ 163,8 $ 129,821 $ 4,445 Securities outstanding D 6,28,365 7,818,11 9,448,724 8,697,53 8,594,279 Management expense ratio E,F 2.32% 2.32% 2.35% 2.37% 2.35% Management expense ratio before waivers or absorptions E,F 2.34% 2.35% 2.36% 2.37% 2.35% Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $ $ $ $ $

7 Fidelity American Disciplined Equity Fund Series F Periods ended June 3, Net assets, beginning of period B $ $ $ $ $ Total revenue Total expenses (excluding distributions) (.27) (.28) (.27) (.19) (.15) Realized gains (losses) Unrealized gains (losses) 1.15 (1.68) 1.37 (.8) 1.8 Total increase (decrease) from operations B 2.67 (.45) From net investment income (excluding dividends) (.11) (.14) (.27) From dividends (.2) From capital gains (1.25) (1.85) (.) Return of capital Total distributions B,C (1.36) (2.) (.46) (.2) Net assets, end of period B $.61 $ $ $ $ Net asset value (s) D $ 28,2 $ 24,42 $ 22,417 $,199 $ 5,57 Securities outstanding D 1,364,95 1,347,694 1,15,2 611, ,32 Management expense ratio E,F 1.14% 1.15% 1.17% 1.% 1.21% Management expense ratio before waivers or absorptions E,F 1.16% 1.18% 1.% 1.% 1.21% Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $.692 $ $ $ $ Fidelity American Disciplined Equity Fund Series F5 Periods ended June 3, I Net assets, beginning of period B $ $ $ 24.8 $ $. Total revenue Total expenses (excluding distributions) (.37) (.39) (.38) (.29) (.6) Realized gains (losses) Unrealized gains (losses).63 (2.66) 2.25 (.57).68 Total increase (decrease) from operations B 2.79 (1.24) From net investment income (excluding dividends) (.15) (.21) (.41) From dividends From capital gains (1.74) (2.7) (.3) Return of capital (1.35) (1.21) (1.13) (1.) (.17) Total distributions B,C (1.35) (3.) (4.4) (1.8) (.17) Net assets, end of period B $ $ $ $ 24.8 $ Net asset value (s) D $ 92 $ 4 $ 155 $ 59 $ 1 Securities outstanding D 34,121 8,444 5,623 2,368 5 Management expense ratio E,F 1.16% 1.16% 1.17% 1.18% 1.24% Management expense ratio before waivers or absorptions E,F 1.17% 1.18% 1.19% 1.18% 1.24% Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $ $ $ $ 24.8 $

8 Financial Highlights continued Fidelity American Disciplined Equity Fund Series F8 Periods ended June 3, I Net assets, beginning of period B $ $ $ $ 21.7 $. Total revenue Total expenses (excluding distributions) (.33) (.37) (.39) (.31) (.6) Realized gains (losses) Unrealized gains (losses) 1.14 (2.91) 2.51 (.67).68 Total increase (decrease) from operations B 3.2 (1.6) From net investment income (excluding dividends) (.14) (.) (.38) From dividends From capital gains (1.62) (2.6) (.28) Return of capital (1.82) (1.88) (1.74) (1.57) (.27) Total distributions B,C (1.82) (3.64) (4.54) (2.23) (.27) Net assets, end of period B $ $ $ $ $ 21.6 Net asset value (s) D $ 223 $ 158 $ 35 $ 9 $ 1 Securities outstanding D 9,333 7,124 1, Management expense ratio E,F 1.13% 1.17% 1.22% 1.28% 1.24% Management expense ratio before waivers or absorptions E,F 1.15% 1.% 1.25% 1.28% 1.24% Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $ $ $ $ $ Fidelity American Disciplined Equity Fund Series O Periods ended June 3, Net assets, beginning of period B $ $ $ $ $ Total revenue Total expenses (excluding distributions) (.5) (.7) (.5) Realized gains (losses) Unrealized gains (losses) 1.42 (1.37) Total increase (decrease) from operations B From net investment income (excluding dividends) (.22) (.14) (.17) (.41) From dividends (.17) From capital gains (1.6) (2.24) (.3) Return of capital Total distributions B,C (.22) (1.74) (2.41) (.71) (.17) Net assets, end of period B $ $ $ $ $ Net asset value (s) D $ 965,49 $ 947,514 $ 936,149 $ 44,27 $ 59,97 Securities outstanding D 42,7,827 48,2,123 44,238,346 24,166,189 34,49,646 Management expense ratio % % % % % Management expense ratio before waivers or absorptions % % % % % Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $ $ $ $ $

9 Fidelity American Disciplined Equity Fund Series T5 Periods ended June 3, Net assets, beginning of period B $ $ $ $ $ Total revenue Total expenses (excluding distributions) (.52) (.56) (.55) (.45) (.37) Realized gains (losses) Unrealized gains (losses) 1.27 (1.87) Total increase (decrease) from operations B 2.42 (.7) From net investment income (excluding dividends) (.8) (.13) (.15) From dividends From capital gains (.97) (1.66) (.11) Return of capital (.98) (.88) (.82) (.78) (.7) Total distributions B,C (.98) (1.93) (2.61) (1.4) (.7) Net assets, end of period B $ $ $ $ $ Net asset value (s) D $ 265 $ 274 $ 485 $ 431 $ 344 Securities outstanding D 14,165 15,8 24,517 24,39 22,73 Management expense ratio E,F 2.57% 2.57% 2.6% 2.64% 2.63% Management expense ratio before waivers or absorptions E,F 2.6% 2.63% 2.65% 2.64% 2.63% Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $ $ $ $ $ Fidelity American Disciplined Equity Fund Series T8 Periods ended June 3, Net assets, beginning of period B $.29 $ $ $ 9.87 $ 8.99 Total revenue Total expenses (excluding distributions) (.3) (.33) (.34) (.29) (.24) Realized gains (losses) Unrealized gains (losses).85 (1.2) Total increase (decrease) from operations B 1.5 (.41) From net investment income (excluding dividends) (.5) (.8) (.) From dividends From capital gains (.58) (1.4) (.7) Return of capital (.86) (.88) (.87) (.86) (.86) Total distributions B,C (.86) (1.51) (1.99) (1.2) (.86) Net assets, end of period B $.82 $.29 $ $ $ 9.87 Net asset value (s) D $ 1,197 $ 2,34 $ 2,723 $ 2,621 $ 3,562 Securities outstanding D 1, , , , ,285 Management expense ratio E,F 2.53% 2.55% 2.59% 2.63% 2.6% Management expense ratio before waivers or absorptions E,F 2.56% 2.6% 2.64% 2.63% 2.6% Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $.8221 $.294 $ $ $

10 Financial Highlights continued Fidelity American Disciplined Equity Fund Series S5 Periods ended June 3, Net assets, beginning of period B $ $. $ 18.9 $ $ Total revenue Total expenses (excluding distributions) (.49) (.52) (.52) (.42) (.33) Realized gains (losses) Unrealized gains (losses) 1.22 (1.61) Total increase (decrease) from operations B 2.44 (.58) From net investment income (excluding dividends) (.9) (.13) (.17) From dividends From capital gains (1.2) (1.73) (.13) Return of capital (.99) (.89) (.83) (.79) (.7) Total distributions B,C (.99) (2.) (2.69) (1.8) (.7) Net assets, end of period B $ $ $. $ 18.9 $ Net asset value (s) D $ 4,551 $ 4,541 $ 4,883 $ 3,881 $ 3,694 Securities outstanding D 238, , , , ,819 Management expense ratio E,F 2.37% 2.37% 2.41% 2.45% 2.39% Management expense ratio before waivers or absorptions E,F 2.39% 2.41% 2.44% 2.45% 2.39% Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $ $ $.1 $ $ Fidelity American Disciplined Equity Fund Series S8 Periods ended June 3, Net assets, beginning of period B $.51 $ $ $.6 $ 9.15 Total revenue Total expenses (excluding distributions) (.29) (.31) (.32) (.27) (.22) Realized gains (losses) Unrealized gains (losses).74 (.99) 1.4 (.1).84 Total increase (decrease) from operations B 1.45 (.33) From net investment income (excluding dividends) (.5) (.8) (.11) From dividends From capital gains (.62) (1.8) (.8) Return of capital (.87) (.89) (.88) (.87) (.88) Total distributions B,C (.87) (1.57) (2.5) (1.6) (.88) Net assets, end of period B $ 11.7 $.51 $ $ $.6 Net asset value (s) D $ 4,236 $ 4,364 $ 5,869 $ 4,65 $ 2,744 Securities outstanding D 383, , , , ,979 Management expense ratio E,F 2.34% 2.34% 2.37% 2.4% 2.39% Management expense ratio before waivers or absorptions E,F 2.36% 2.37% 2.4% 2.4% 2.39% Trading expense ratio G.5%.7%.6%.13%.17% Portfolio turnover rate H 77.85% % 85.9% 3.24% % Net asset value per security, end of period $ $.536 $ $ $.58 8

11 Fidelity American Disciplined Equity Fund Series E1 Periods ended June 3, J Net assets, beginning of period B $.26 $. Total revenue..6 Total expenses (excluding distributions) (.28) (.11) Realized gains (losses).86 (.11) Unrealized gains (losses) Total increase (decrease) from operations B From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions B,C Net assets, end of period B $ $.26 Net asset value (s) D $ 18,119 $ 9,539 Securities outstanding D 1,547,393 93,59 Management expense ratio E,K 2.25% 2.26% Management expense ratio before waivers or absorptions E,K 2.28% 2.29% Trading expense ratio G.5%.7% Portfolio turnover rate H 77.85% % Net asset value per security, end of period $ $.26 Fidelity American Disciplined Equity Fund Series E1T5 Periods ended June 3, J Net assets, beginning of period B $.6 $. Total revenue Total expenses (excluding distributions) (.54) (.22) Realized gains (losses) 1.61 (.14) Unrealized gains (losses) Total increase (decrease) from operations B From net investment income (excluding dividends) From dividends From capital gains Return of capital (1.13) (.47) Total distributions B,C (1.13) (.47) Net assets, end of period B $ $.6 Net asset value (s) D $ 134 $ 87 Securities outstanding D 6,181 4,36 Management expense ratio E,K 2.25% 2.22% Management expense ratio before waivers or absorptions E,K 2.28% 2.25% Trading expense ratio G.5%.7% Portfolio turnover rate H 77.85% % Net asset value per security, end of period $ $.581 9

12 Financial Highlights continued Fidelity American Disciplined Equity Fund Series E2 Periods ended June 3, J Net assets, beginning of period B $.27 $. Total revenue..6 Total expenses (excluding distributions) (.27) (.) Realized gains (losses).87 (.12) Unrealized gains (losses) Total increase (decrease) from operations B From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions B,C Net assets, end of period B $ $.27 Net asset value (s) D $ 1,513 $ 687 Securities outstanding D 128,985 66,875 Management expense ratio E,K 2.12% 2.12% Management expense ratio before waivers or absorptions E,K 2.15% 2.15% Trading expense ratio G.5%.7% Portfolio turnover rate H 77.85% % Net asset value per security, end of period $ $.2664 Fidelity American Disciplined Equity Fund Series E3 Periods ended June 3, J Net assets, beginning of period B $.27 $. Total revenue..7 Total expenses (excluding distributions) (.27) (.11) Realized gains (losses).84 (.) Unrealized gains (losses).44. Total increase (decrease) from operations B From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions B,C Net assets, end of period B $ $.27 Net asset value (s) D $ 465 $ 319 Securities outstanding D 39,614 31,65 Management expense ratio E,K 2.17% 2.17% Management expense ratio before waivers or absorptions E,K 2.19% 2.% Trading expense ratio G.5%.7% Portfolio turnover rate H 77.85% % Net asset value per security, end of period $ $.2678

13 Fidelity American Disciplined Equity Fund Series E4 Periods ended June 3, J Net assets, beginning of period B $.27 $. Total revenue..7 Total expenses (excluding distributions) (.27) (.) Realized gains (losses).85 (.12) Unrealized gains (losses) Total increase (decrease) from operations B From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions B,C Net assets, end of period B $ $.27 Net asset value (s) D $ $ 1 Securities outstanding D 847 Management expense ratio E,K 2.% 2.2% Management expense ratio before waivers or absorptions E,K 2.13% 2.2% Trading expense ratio G.5%.7% Portfolio turnover rate H 77.85% % Net asset value per security, end of period $ $.278 Fidelity American Disciplined Equity Fund Series P1 Periods ended June 3, L Net assets, beginning of period B $ 8.7 $. Total revenue.17.7 Total expenses (excluding distributions) (.13) (.7) Realized gains (losses) Unrealized gains (losses).54 (.87) Total increase (decrease) from operations B 1.33 (.68) From net investment income (excluding dividends) (.5) From dividends From capital gains (.61) Return of capital Total distributions B,C (.66) Net assets, end of period B $.5 $ 8.7 Net asset value (s) D $ 5,312 $ 955 Securities outstanding D 532,863 9,767 Management expense ratio E,M 1.% 1.11% Management expense ratio before waivers or absorptions E,M 1.11% 1.12% Trading expense ratio G.5%.7% Portfolio turnover rate H 77.85% % Net asset value per security, end of period $.464 $

14 Financial Highlights continued Fidelity American Disciplined Equity Fund Series P2 Periods ended June 3, L Net assets, beginning of period B $ 8.71 $. Total revenue.17.8 Total expenses (excluding distributions) (.13) (.7) Realized gains (losses).72.2 Unrealized gains (losses).34 (.74) Total increase (decrease) from operations B 1. (.72) From net investment income (excluding dividends) (.5) From dividends From capital gains (.61) Return of capital Total distributions B,C (.66) Net assets, end of period B $.5 $ 8.71 Net asset value (s) D $ 699 $ 267 Securities outstanding D 69,491 3,73 Management expense ratio E,M 1.3% 1.5% Management expense ratio before waivers or absorptions E,M 1.4% 1.6% Trading expense ratio G.5%.7% Portfolio turnover rate H 77.85% % Net asset value per security, end of period $.549 $ Fidelity American Disciplined Equity Fund Series P3 Periods ended June 3, L Net assets, beginning of period B $ 8.71 $. Total revenue.16.7 Total expenses (excluding distributions) (.12) (.7) Realized gains (losses) Unrealized gains (losses).23 (.84) Total increase (decrease) from operations B 1.6 (.63) From net investment income (excluding dividends) (.2) (.5) From dividends From capital gains (.61) Return of capital Total distributions B,C (.2) (.66) Net assets, end of period B $.6 $ 8.71 Net asset value (s) D $ 3 $ 1 Securities outstanding D Management expense ratio E,M.94%.88% Management expense ratio before waivers or absorptions E,M.94%.88% Trading expense ratio G.5%.7% Portfolio turnover rate H 77.85% % Net asset value per security, end of period $.68 $

15 Financial Highlights Footnotes A This information is derived from the Fund s audited annual and/or unaudited interim financial statements. Periods beginning on or after January 1, 13 follow International Financial Reporting Standards (IFRS) and periods prior to January 1, 13 follow Canadian Generally Accepted Accounting Principles (Canadian GAAP). The net assets attributable to securityholders per security presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. An explanation of these differences can be found in the notes to financial statements. For reporting periods ending after January 1, 17 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, 17 may not foot due to this rounding change. B C D E F G H 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, 14, 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 % is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. For periods greater than six months, but less than a full fiscal year, the portfolio turnover rate is annualized. I For the period April 17, 13 (commencement of sale of securities) to June 3, 13. J For the period February 5, 16 (commencement of sale of securities) to June 3, 16. K Effective February 9, 16, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. L For the period December 4, 15 (commencement of sale of securities) to June 3, 16. M Effective December 8, 15, 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. 13

16 Management and Advisory Fees Fidelity serves as manager and investment advisor of the Fund. The Fund pays Fidelity a monthly management and advisory fee for their services, based on the net asset value of each Series, calculated daily and payable monthly. Fidelity uses these management fees to pay for sales and trailing commissions to registered dealers on the distribution of the Fund securities, as well as for the general investment management expenses. Dealer compensation represents cash commissions paid by Fidelity to registered dealers during the period and includes upfront deferred sales charge and trailing commissions. This amount may, in certain circumstances, exceed % of the fees earned by Fidelity during the period. For new Funds or Series the amounts presented may not be indicative of longer term operating periods. Management Fees Dealer Compensation Investment management, administration and other Series A 2.% 37.% 62.8% Series B 1.85% 54.5% 45.95% Series F.85%.% Series F5.85%.% Series F8.85%.% Series T5 2.% 35.13% 64.87% Series T8 2.% 25.12% 74.88% Series S5 1.85% 54.5% 45.95% Series S8 1.85% 54.5% 45.95% Series E % 54.79% 45.21% Series E1T % 54.79% 45.21% Series E2 1.8% 55.56% 44.44% Series E % 56.34% 43.66% Series E % 57.97% 42.3% Series P1.825%.% Series P2.8%.% Series P3.775%.% 14

17 Fidelity American Disciplined Equity 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. Series A Series F Series B Commencement of Operations is April 17, Series F Series F - Commencement of Operations is April 17, Series O

18 Fidelity American Disciplined Equity Fund Past Performance continued Series T5 Series E Series T8 Commencement of Operations is February 5, Series E1T Series S5 - Commencement of Operations is February 5, Series E Series S Commencement of Operations is February 5, Series E Commencement of Operations is February 5, 16 16

19 Series E4 Series P Commencement of Operations is February 5, 16 Commencement of Operations is December 4, 15 Series P1 Series P Commencement of Operations is December 4, 15 Commencement of Operations is December 4, 15 Annual Compound Returns This table shows the Fund s historical annual compound total returns for the periods indicated, compared with the Fund s benchmark, the S&P 5 Index, as described below. 17

20 Fidelity American Disciplined Equity Fund Past Performance continued Past 1 year Past 3 years Past 5 years Past years Since Inception Average Annual Total Returns Fidelity American Disciplined Equity Fund - Series A 13.8% 12.2% 16.2% 5.8% n/a Fidelity American Disciplined Equity Fund - Series B 14.% 12.4% 16.5% 6.1% n/a Fidelity American Disciplined Equity Fund - Series F 15.4% 13.8% 17.9% 7.3% n/a Fidelity American Disciplined Equity Fund - Series F5 15.4% 13.8% n/a n/a 17.7% Fidelity American Disciplined Equity Fund - Series F8 15.4% 13.8% n/a n/a 17.7% Fidelity American Disciplined Equity Fund - Series O 16.7% 15.1% 19.3% 8.6% n/a Fidelity American Disciplined Equity Fund - Series T5 13.7% 12.2% 16.2% 5.8% n/a Fidelity American Disciplined Equity Fund - Series T8 13.8% 12.2% 16.2% 5.8% n/a Fidelity American Disciplined Equity Fund - Series S5 14.% 12.4% 16.4% 6.1% n/a Fidelity American Disciplined Equity Fund - Series S8 14.% 12.4% 16.5% 6.1% n/a Fidelity American Disciplined Equity Fund - Series E1 14.1% n/a n/a n/a 11.9% Fidelity American Disciplined Equity Fund - Series E1T5 14.1% n/a n/a n/a 12.% Fidelity American Disciplined Equity Fund - Series E2 14.3% n/a n/a n/a 12.1% Fidelity American Disciplined Equity Fund - Series E3 14.2% n/a n/a n/a 12.1% Fidelity American Disciplined Equity Fund - Series E4 14.3% n/a n/a n/a 12.2% Fidelity American Disciplined Equity Fund - Series P1 15.4% n/a n/a n/a 4.8% Fidelity American Disciplined Equity Fund - Series P2 15.5% n/a n/a n/a 4.8% Fidelity American Disciplined Equity Fund - Series P3 15.7% n/a n/a n/a 5.% S&P 5 Index 17.9% 17.1%.3% 9.3%.% The period used for the since inception S&P 5 Index returns are based on Series F5 which has been in existence the longest compared to all Series with less than years of operations. A discussion of the performance of the Fund can be found in the Results of Operation section of this report. The S&P 5 Index is a widely recognized index of 5 U.S. common stocks of large- and mid-capitalization companies. Each Series will have different returns because of differences in management fees and expenses. 18

21 Fidelity American Disciplined Equity Fund Summary of Investment Portfolio as at June 3, 17 Sector Mix % of Fund s Net Assets as at 6/3/17 % of Fund s Net Assets as at 6/3/16 Information Technology Financials Health Care Consumer Discretionary Industrials.3. Consumer Staples Energy Utilities Materials Real Estate 2.7. Telecommunication Services Cash and Cash Equivalents Net Other Assets (Liabilities) (.8).5 Prior period industry classifications reflect the categories in place as of the date indicated and have not been adjusted to reflect current industry classifications. Top 25 Issuers % of Fund s Net Assets 1. Alphabet, Inc Citigroup, Inc Apple, Inc Merck & Co., Inc Danaher Corp Visa, Inc Pioneer Natural Resources Co Amazon.com, Inc Salesforce.com, Inc Intel Corp Broadcom Ltd Cash and Cash Equivalents American Electric Power Co., Inc Fidelity National Information Services, Inc United Technologies Corp Newell Brands, Inc Humana, Inc CME Group, Inc Regions Financial Corp Ingersoll-Rand PLC Lockheed Martin Corp Altria Group, Inc PayPal Holdings, Inc Bristol-Myers Squibb Co Home Depot, Inc Total Fund Net Assets $1,174,347, The summary of investment portfolio may change due to ongoing portfolio transactions of the investment fund. The most recent annual report, semi-annual report, quarterly report, fund facts document or simplified prospectus for the investment fund and/or underlying fund is available at no cost, by calling , by writing to us at Fidelity Investments Canada ULC, 483 Bay St. Suite 3, Toronto ON M5G 2N7 or by visiting our web site at or SEDAR at 19

22

23

24 Fidelity Investments Canada ULC 483 Bay Street, Suite 3 Toronto, Ontario M5G 2N7 Manager, Transfer Agent and Registrar Fidelity Investments Canada ULC 483 Bay Street, Suite 3 Toronto, Ontario M5G 2N7 Custodian State Street Trust Company of Canada Toronto, Ontario Portfolio Adviser Fidelity Investments Canada ULC Toronto, Ontario Visit us online at or call Fidelity Client Services at Fidelity s mutual funds are sold by registered Investment Professionals. Each Fund has a simplified prospectus, which contains important information on the Fund, including its investment objective, purchase options, and applicable charges. Please obtain a copy of the prospectus, read it carefully, and consult your Investment Professional before investing. As with any investment, there are risks to investing in mutual funds. There is no assurance that any Fund will achieve its investment objective, and its net asset value, yield, and investment return will fluctuate from time to time with market conditions. Investors may experience a gain or loss when they sell their securities in any Fidelity Fund. Fidelity Global Funds may be more volatile than other Fidelity Funds as they concentrate investments in one sector and in fewer issuers; no single Fund is intended to be a complete diversified investment program. Past performance is no assurance or indicator of future returns. There is no assurance that either Fidelity Canadian Money Market Fund or Fidelity U.S. Money Market Fund will be able to maintain its net asset value at a constant amount. The breakdown of Fund investments is presented to illustrate the way in which a Fund may invest, and may not be representative of a Fund s current or future investments. A Fund s investments may change at any time. Fidelity Investments is a registered trademark of Fidelity Investments Canada ULC E FICL-ADE-MRFPA-917