Fidelity Large Cap Growth Enhanced Index Fund Key Takeaways The fund gained 7.04% for the six months ending August 3, 207 the period since our last annual report lagging the 0.69% increase in the benchmark Russell 000 Growth Index. Elevated exposure to low-valuation companies and a corresponding underweighting in growth- and momentumoriented investments hurt performance versus the benchmark. During the period, large-cap growth stocks significantly outperformed their value-oriented counterparts. Stock picks in the information technology sector specifically our decision to underweight strong performer NVIDIA and hold an out-of-index stake in Seagate were significantly negative. Security selection in consumer discretionary also detracted. Senior Manager Max Kaufmann and his team continued to employ an investment model designed with the goal of identifying companies with strong fundamental characteristics they believe may be correlated with long-term outperformance. The team's data-driven approach is intended to help reduce emotional biases and generate a more objective investment decision-making process. FISCAL PERFORMANCE SUMMARY: Periods ending August 3, 207 6 Month Cumulative YTD 3 Annualized 5 0 / LOF Fidelity Large Cap Growth Enhanced Index Fund Gross Expense Ratio: 0.39% 2 7.04% 4.24% 7.49% 9.65% 4.40% 8.65% Russell 000 Growth Index 0.69% 9.7% 20.82%.67% 5.4% 9.39% Morningstar Fund Large Growth 9.98% 8.8% 8.8% 9.6% 3.88% 7.95% % Rank in Morningstar Category (% = Best) -- -- 59% 47% 43% 36% # of Funds in Morningstar Category -- --,39,258,24 790 Life of Fund (LOF) if performance is less than 0 years. Fund inception date: 04/9/2007. 2 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 40k.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. For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A. Not FDIC Insured May Lose Value No Bank Guarantee
Q&A Fund Facts Trading Symbol: Maximilian Kaufmann Manager FLGEX Start Date: April 9, 2007 Size (in millions): $925.24 Investment Approach Fidelity Large Cap Growth Enhanced Index Fund is a diversified domestic equity strategy with a large-cap growth orientation. The fund seeks to outperform its benchmark through a quantitative investment process that balances both risk and return. Our approach involves building multifactor statistical models to help us select companies with desirable fundamental characteristics. We generally favor companies with improving fundamentals and that are also trading at reasonable valuations. Our systematic investment process accounts for both topdown market indicators and bottom-up fundamental insights, using a dynamic factor allocation that allows the fund to adapt to changing market conditions in a riskaware manner. An interview with Maximilian Kaufmann, Senior Manager of the Geode Capital Management, LLC, investment management team Q: Max, how did the fund perform for the sixmonth review period ending August 3, 207 The fund gained 7.04%, trailing the 0.69% return of the benchmark Russell 000 Growth Index. The fund also lagged the peer group average during the same time frame. During the period, large-cap growth stocks, as measured by the Russell 000 Growth Index, significantly outpaced their large-cap value counterparts, as measured by the Russell 000 Value Index, with a narrow slice of large-cap technology companies increasingly responsible for growth stocks' significant outperformance. Meanwhile, mid- and small-cap stocks each lagged the S&P 500, a proxy for the overall U.S. large-cap market. Looking out a bit further, the fund was up 7.49% for the 2 months ending August 3, 207 a result that lagged the 20.82% gain in the Russell 000 Growth Index as well as the peer group average. Q: What factors influenced the fund's results the past six months After the U.S. presidential election last November, the prospects of lower corporate taxes and deregulation raised investors' expectation for economic growth dynamics that, as we approached the reporting period, had been benefiting cheaply valued companies. Beginning in 207, however, and continuing through period end, political gridlock in Washington dampened investors' optimism, leading to a reversal in the performance of cheap stocks. Unfortunately for the fund, our relatively high exposure to lower-valuation stocks within the large-cap growth universe detracted from results. At the same time, growth and momentum were desirable characteristics this past six months, but our generally low exposure to these factors muted the positive impact on the fund. Such positioning was, as always, the product of our quantitative approach to investing. This involves building systems that select investments with a variety of desirable 2 For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.
fundamental traits that our research has shown to be correlated with potential long-term outperformance. Ultimately, we're seeking to identify good businesses with durable competitive advantages and with stocks that are selling at what we consider reasonable prices. To accomplish this objective, my team and I use computeraided analytical models to help us examine and rank individual securities. With these models, we build a portfolio that seeks to outperform the benchmark. These rankings generally are based on factors such as valuations, earnings growth and technical indicators. In general, we seek to establish a risk profile for the portfolio similar to that of the index. Our models are designed to provide a framework in which we may decide to overweight securities that our quantitative process shows have more exposure to the fundamental factors we believe can lead to outperformance, and underweight those that have little to no exposure to such characteristics. In addition, we consider the fund's security, industry and market-capitalization weightings relative to the benchmark. We generally invest at least 80% of the fund's assets in common stocks included in the benchmark, but maintain the ability to invest in non-index securities if our models identify attractive opportunities elsewhere. Q: Why do you favor a data-driven approach One important reason is our view that financial markets are less than 00% efficient, primarily due to investors' behavioral tendencies. In an effort to reduce the influence of human emotion and potentially eliminate some common investing biases that affect both institutional and individual investors we apply a systematic investment process grounded in traditional fundamental security analysis to make the process more objective. Q: Which decisions influenced results relative to the Russell benchmark most this period Stock picking in the information technology sector was by far the biggest source of difficulty. In this category, Seagate, a maker of hard disk drives that twice reported weaker-than-expected financial results this period, especially hurt results. Nevertheless, our models continued to classify this stock as very attractively valued, and we added to the fund's position over the six months. Other information technology detractors included our underweighting in graphics-processing company NVIDIA, a strong performer this period, and diversified technology firm IBM, which we overweighted for the stock's valuation characteristics but which nevertheless struggled this period. Stock picking in consumer discretionary was a secondary detractor. In this group, an overweight in home products retailer Bed Bath & Beyond which we maintained largely due to the company's attractive valuation and profitability factors hampered results, as the company disappointed in an increasingly competitive retail environment. We ultimately sold the fund's stake in Bed Bath & Beyond in July, partly reflecting the stock's poor price momentum and growth characteristics. On the positive side, two of our top individual contributors of the period were aircraft manufacturer Boeing and industrial conglomerate General Electric. Boeing's stock, which we found attractive for its growth and price momentum characteristics, among other reasons, rose throughout the period and especially sharply in July on stronger-than-expected earnings. Meanwhile, our models led us to mostly avoid GE, largely because it exhibited poor price momentum and earnings quality. This positioning was helpful in light of the stock's struggles. We did not hold a GE position as of July 3. Note to shareholders: During 208, Fidelity's Large-Cap, Mid-Cap and International Enhanced Index Funds will begin investing all or substantially all of their assets in a "master portfolio." The master portfolio will be an affiliated mutual fund with an investment objective and investment strategies substantially the same as the existing enhanced index mutual funds. This is commonly referred to as a master-feeder structure. In this structure, a fund does not invest in securities directly and instead invests in a master portfolio that, in turn, invests directly in securities. Fidelity will file preliminary registration statements for five multifactor, enhanced index exchange-traded funds (ETFs) with the Securities and Exchange Commission (SEC) that, if approved, also will invest in the master portfolio. In order to facilitate the conversion of the Large-Cap, Mid- Cap and International Enhanced Index Funds to a masterfeeder structure, the following changes were made: the fiscal year-end of each fund changed to August 3 from February 28; and each fund is now allowed to pay dividends quarterly instead of semiannually, and capital gains once a year instead of twice. In addition, pursuant with the conversion, the funds will disclose the full holdings of the underlying master portfolios daily with no lag, rather than the current monthly disclosure with a 30-day lag. 3 For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.
LARGEST CONTRIBUTORS VS. BENCHMARK 0 LARGEST HOLDINGS Holding Average Contribution (basis points)* The Boeing Co. Industrials 0.5% 2 Simon Property Group, Inc. Real Estate -0.40% General Electric Co. Industrials -0.37% 0 The Chemours Co. LLC Materials 0.4% 0 Costco Wholesale Corp. * basis point = 0.0%. Staples -0.5% 0 LARGEST DETRACTORS VS. BENCHMARK Holding NVIDIA Corp. Seagate LLC Bed Bath & Beyond, Inc. IBM Corp. PayPal Holdings, Inc. * basis point = 0.0%. Average Contribution (basis points)* -0.50% -25 0.44% -23 0.32% -9 0.48% -6-0.49% -5 Holding Apple, Inc. Microsoft Corp. Facebook, Inc. Class A Amazon.com, Inc. Alphabet, Inc. Class C Alphabet, Inc. Class A Six Months Ago 7.73% 6.43% 4.25% 3.68% 3.92% 3.2% 3.35% 3.26% 2.70%.59% 2.39% 2.5% UnitedHealth Group, Inc. Health Care 2.4%.75% Comcast Corp. Class A Home Depot, Inc. 2.02%.07%.94%.24% PepsiCo, Inc. Staples.73%.65% 0 Largest Holdings as a % of Net Assets 32.6% 27.28% Total Number of Holdings 84 202 The 0 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. ASSET ALLOCATION Asset Class Six Months Ago Domestic Equities 99.02% 99.79% International Equities 0.96% 0.6% Developed Markets 0.42% 0.6% Emerging Markets 0.54% 0.00% Tax-Advantaged Domiciles 0.00% 0.00% Bonds 0.00% 0.00% Cash & Net Other Assets 0.02% 0.05% 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. MARKET-SEGMENT DIVERSIFICATION Six Months Ago 39.37% 33.49% 9.43% 20.47% Health Care 5.59% 7.69% Industrials 0.6% 9.65% Staples 6.86% 8.7% Materials 2.78% 2.64% Financials 2.55%.48% Real Estate.2%.36% Telecommunication Services 0.96%.85% Multi Sector 0.96%.88% Energy 0.2%.25% Utilities 0.00% 0.00% Other 0.00% 0.00% 4 For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.
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. Growth stocks can perform differently from the market as a whole and other types of stocks and can be more volatile than other types of stocks. Although the fund seeks to beat the index, this is not guaranteed and the fund may trail the index. 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 but impose different expense structures. RELATIVE WEIGHTS 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 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. Russell 000 Growth Index is a market-capitalization-weighted index designed to measure the performance of the large-cap growth segment of the U.S. equity market. It includes those Russell 000 Index companies with higher price-to-book ratios and higher forecasted growth rates. Russell 000 Value Index is a market-capitalization-weighted index designed to measure the performance of the large-cap value segment of the U.S. equity market. It includes those Russell 000 Index companies with lower price-to-book ratios and lower expected growth rates. 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 207 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: () 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 and the lowest (or least favorable) percentile rank is 00. The top-performing fund in a category will always receive a rank of %. % Rank in 5
Manager Facts Maximilian Kaufmann is a senior portfolio manager on the equity portfolio team at Geode Capital Management. In this role Max is responsible for the management of the Quantitative Active Equity strategies, as well as portfolio construction, optimization, and continuous development of Geode's Quantitative Active Equity capabilities. He is the lead manager of the Fidelity Enhanced Index Funds, which Geode has sub-advised since 2007. Prior to joining Geode in 2009, Max worked as a portfolio manager of Active Quantitative Equities at Lazard Asset Management, LLC where he was responsible for developing the firm's quantitative long/short and long-only equity capabilities. In this role, he oversaw the investment process including analysis, trading and obtaining new investment mandates in active quantitative equity strategies. Prior to that, Max worked as lead portfolio manager of the Global Equity team at PanAgora Asset Management, Inc., where he was responsible for global equity research and investment process. Preceding that, he was a quantitative research analyst at Putnam Investments and CitiGroup Asset Management. Max earned his bachelor of science degree in economics from State University of New York at Binghamton and his master of arts degree in statistics from Columbia University. 6 For definitions, fund risks and other important information, please see the Definitions and Important section of this Q&A.
PERFORMANCE SUMMARY: Quarter ending September 30, 207 3 Annualized 5 0 / LOF Fidelity Large Cap Growth Enhanced Index Fund Gross Expense Ratio: 0.39% 2 9.76% 0.96% 4.55% 8.5% Life of Fund (LOF) if performance is less than 0 years. Fund inception date: 04/9/2007. 2 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 40k.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 0297. Fidelity Investments Institutional Services Company, Inc., 500 Salem Street, Smithfield, RI 0297. 207 FMR LLC. All rights reserved. Not NCUA or NCUSIF insured. May lose value. No credit union guarantee. 73869.5.0 Diversification does not ensure a profit or guarantee against a loss.