Fidelity International Growth Investment Trust Annual Management Report of Fund Performance March 31, 2018
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.
Annual Management Report of Fund Performance as at March 31, 2018 Fidelity International Growth Investment Trust 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 1-800-263-4077, by writing to us at Fidelity Investments, 483 Bay St. Suite 300, Toronto ON M5G 2N7 or by visiting our website at www.fidelity.ca or SEDAR at www.sedar.com. 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 International Growth Investment Trust (Fund) aims to achieve long-term capital appreciation by investing primarily in equity securities of companies that have their principal business activities or interests outside of the U.S. and Canada. Strategies: When buying or selling securities for the Fund, the portfolio manager relies on fundamental analysis of each issuer and examines each company s potential for success in light of its current financial condition, earnings estimates, quality of management, industry position and economic and market conditions. The portfolio manager aims to favour companies that show the potential for above-average earnings or growth. The portfolio manager invests the Fund s assets in non-canadian/non-u.s. securities, including securities of issuers located in emerging markets. Risk The risks associated with investing in this Fund remain as discussed in the prospectus. Any changes to the investment fund over the period have not affected the overall level of risk of the investment fund. The Fund is suitable for long-term investors who want to gain exposure to international (non-canadian/non-u.s.) equity securities, can handle the volatility of returns associated with equity investments and are willing 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 Units of this Fund are only available for purchase by other funds and accounts managed or advised by Fidelity and are not available for public purchase. Fidelity International Growth Investment Trust Series O returned 15.3% for the one-year period ended March 31, 2018. Global equities, as measured by the MSCI World Index, returned 9.8% in Canadian dollar terms for the one-year period ended March 31, 2018. Market overview: Global equities registered positive returns during the review period supported by strengthening economic and corporate data across the world. Towards the end of the review period, markets experienced higher volatility as heightened concerns of a potential global trade war, and faster interest rate hikes by the U.S. Federal Reserve (Fed), negatively impacted investor sentiment. The Fed increased the target federal funds rate three times during the review period against the backdrop of continued strength in the U.S. economy. U.S. equities registered healthy gains due to strong corporate earnings as deregulation and tax reforms fueled business optimism. Canadian equities were weighed down by uncertainty over NAFTA renegotiation and high consumer debt levels. European equities gained on economic recovery in the region and an accommodative monetary policy. However, the U.K. underperformed amid uncertainty around Brexit negotiations. Asian markets registered gains amid healthy economic data releases in China, as well as investor optimism toward global economic growth. Factors affecting performance: The Fund s benchmark, the MSCI EAFE Growth Index, returned 13.6% for the one-year period under review. The Fund outperformed its benchmark primarily due to certain holdings and its higher-than-benchmark exposure to the information technology sector. In the information technology sector, exposure to U.S.-based global payment solution company MasterCard, higher-than-benchmark exposure to Japan-based sensor technology company Keyence, and exposure to Netherland-based semiconductor chip-maker ASML Holding, contributed to relative performance. Among other sectors, exposure to South Africa-based Internet and media company Naspers, and U.K.-based textile maintenance services provider Berendsen, contributed to relative performance. In contrast, the Fund s exposure to certain stocks in the consumer staples and materials sectors detracted from relative performance. In the consumer staples sector, exposure to U.S.-based tobacco and cigarette manufacturer Philip Morris International, and investments in Belgium-based beverage and brewing company Anheuser-Busch InBev, detracted the most from relative performance. In the materials sector, the Fund s investment in Ireland-based building materials manufacturer CRH detracted from relative performance. Among other sectors, the Fund s investment in South Korea-based convenience store operator BGF, and U.K.-based multinational consumer goods company Reckitt Benckiser, detracted from relative returns. Portfolio changes: During the review period, exposure was increased to the industrials and information technology sectors. Within the industrials sector, the Fund increased exposure to Japan-based capital goods firm Komatsu, based on strong fundamentals and reasonable valuations given its growth potential. Within the information technology sector, exposure was increased to Netherlandsbased chip-making equipment manufacturer ASML, as the company is the market leader in providing next generation technology EUV (Extreme Ultraviolet), and has a strong orders pipeline. The portfolio manager believes ASML has a multi-year structural growth opportunity. In contrast, exposure to the consumer staples sector declined as the Fund reduced positions in companies such as Switzerland-based food & beverage company Nestlé, and Belgium-based beverage and brewing company Anheuser-Busch InBev, as the portfolio manager opted to invest in other opportunities with more attractive risk/reward profiles. The Fund also reduced 1
Fidelity International Growth Investment Trust Management Discussion of Fund Performance continued exposure to the health care sector, as the Fund exited positions in Switzerland-based pharmaceuticals firm Novartis. Although structural demand for certain therapeutics remains, competition and pricing pressure has compromised the investment thesis. Geographically, the Fund diverged most from its benchmark weightings by having more exposure to the U.S. and less exposure to Japan. The Fund s geographic allocations are a by-product of the portfolio manager s bottom-up fundamental stock selection process, reflecting his intent to add value through stock selection and not macro-level calls. Recent Developments Jed Weiss returned on schedule from a brief leave of absence that stretched from June 15, 2017 to November 29, 2017. Vincent Montemaggiore, who had assumed portfolio co-management responsibilities for the Fund starting March 31, 2017, and managed the portfolio in Mr. Weiss s absence, was removed as co-manager on December 5, 2017, thus leaving Mr. Weiss as the sole manager once again. The Fund s investment objective and strategy were not affected by this change. All trading decisions made during the leave of absence period, of which there only a few, were anchored to Mr. Weiss s own investment process and his specific investment thesis for each holding. Portfolio manager Jed Weiss remains committed to buying high-quality companies with multi-year structural growth prospects, high barriers to entry and attractive valuations. In addition, Jed looks forward to periods of market volatility that can cause indiscriminate selloffs in fundamentally sound companies. He uses these opportunities to invest in great businesses that align with his investment approach. He continues to focus on finding good business franchises with stocks trading at attractive valuations, believing these companies can continue to do well regardless of the economic backdrop. As at March 31, 2018, the information technology sector accounted for the Fund s largest absolute exposure. The Fund diverged most from the benchmark s sector weightings by having more exposure to the information technology sector, and less exposure to the consumer staples sector. Fidelity Global Balanced Class Portfolio became a holder of more than 10% of the outstanding securities of the Fund in the period ending March 31, 2018. Related Party Transactions Manager and Portfolio Adviser The Fund is managed by Fidelity Investments Canada ULC (Fidelity). Fidelity is part of a broader collection 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 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 is only offered in Series O securities and is not available for public purchase. The Fund was created as an underlying fund for other Fidelity products. The Fund does not pay management and advisory fees, or other operating expenses, other than certain specified fund costs, including taxes, brokerage commissions and interest charges. Brokerage Commissions The Fund may place a portion of its portfolio transactions with brokerage firms which are affiliates of Fidelity, 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 $1,000 for the period ended March 31, 2018. 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. 2
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 International Growth Investment Trust Series O Periods ended March 31, 2018 2017 2016 2015 2014 A The Series Net Assets per Security B Net assets, beginning of period C $ 13.96 $ 12.81 $ 13.27 $ 11.33 $ 10.00 Increase (decrease) from operations: Total revenue.45.35.27.29.11 Total expenses (excluding distributions) (.05) (.03) (.05) (.05) (.03) Realized gains (losses).21.12.42.54 Unrealized gains (losses) 1.36 1.10 (.94) 1.52 1.23 Total increase (decrease) from operations C 1.97 1.54 (.29) 2.31 1.31 Distributions: From net investment income (excluding dividends) (.39) (.33) (.20) (.32) (.02) From dividends From capital gains (.12) Return of capital Total distributions C,D (.39) (.33) (.32) (.32) (.02) Net assets, end of period C $ 15.69 $ 13.96 $ 12.81 $ 13.27 $ 11.33 Ratios and Supplemental Data Net asset value (000s) E $ 948,410 $ 579,122 $ 455,735 $ 392,225 $ 314,308 Securities outstanding E 60,310,471 41,418,322 35,648,636 29,511,892 27,728,576 Management expense ratio % % % % % Management expense ratio before waivers or absorptions % % % % % Trading expense ratio F.11%.08%.12%.16%.35% Portfolio turnover rate G 28.81% 25.52% 52.69% 71.93% 17.47% Net asset value per security, end of period $ 15.7028 $ 13.9618 $ 12.8069 $ 13.2740 $ 11.3254 A For the period October 3, 2013 (inception date) to March 31, 2014. B C D E F G 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, 2017 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, 2017 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. 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 100% 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. 3
Fidelity International Growth Investment Trust 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 O Fiscal Years 2014 2015 2016 2017 2018 (%) 30 13.4 20.4-1.3 11.8 15.3 20 10 0-10 Commencement of Operations is October 3, 2013 Annual Compound Returns This table shows the Fund s historical annual compound total returns for the periods indicated, compared with a broad-based benchmark, the MSCI World Index, and the Fund s benchmark, the MSCI EAFE Growth Index. Total fund returns are calculated through the last business day of the period on which Canadian markets were open, which was March 29, 2018. Average Annual Total Returns Fidelity International Growth Investment Trust Series O 15.3% 8.3% 13.1% MSCI EAFE Growth Index 13.6% 7.4% 11.3% MSCI World Index 9.8% 8.6% 14.3% A discussion of the performance of the Fund can be found in the Results of Operations section of this report. MSCI EAFE Growth Index is a market capitalization-weighted index that is designed to measure the investable equity market performance of growth stocks for global investors in developed markets, excluding the U.S. & Canada. The MSCI World Index is a market capitalization weighted index composed of companies representative of the market structure of Developed Market countries in North America, Europe and the Asia/Pacific Region. Past 1 year Past 3 years Since Inception 4
Fidelity International Growth Investment Trust Summary of Investment Portfolio as at March 31, 2018 Sector Mix Net Assets as at 3/31/18 Net Assets as at 3/31/17 Information Technology 23.0 18.6 Industrials 19.8 13.7 Financials 13.2 10.2 Consumer Staples 11.9 19.7 Health Care 10.1 14.5 Consumer Discretionary 10.1 11.2 Materials 7.6 7.0 Others (Individually Less Than 1%) 2.3 3.4 Cash and Cash Equivalents 4.8 1.6 Net Other Assets (Liabilities) (2.8) 0.1 Geographic Mix Net Assets as at 3/31/18 Net Assets as at 3/31/17 United States of America 18.6 17.9 Japan 13.8 11.9 United Kingdom 10.7 11.5 Switzerland 6.6 11.1 Germany 6.2 4.8 Sweden 5.3 5.9 Spain 3.5 4.6 Ireland 3.4 3.5 Australia 3.3 3.8 Netherlands 2.7 2.1 France 2.7 0.8 Belgium 2.6 3.9 Hong Kong 2.6 2.1 South Africa 2.4 2.0 Canada 1.8 1.4 Cayman Islands 1.8 1.1 Denmark 1.2 1.3 Taiwan 1.2 0.9 Austria 1.2 1.6 India 1.1 1.0 Others (Individually Less Than 1%) 5.3 5.1 Cash and Cash Equivalents 4.8 1.6 Net Other Assets (Liabilities) (2.8) 0.1 Top Issuers Net Assets 1. Cash and Cash Equivalents 4.8 2. CSL Ltd. 3.3 3. Keyence Corp. 3.2 4. SAP SE 3.0 5. Nestle SA 3.0 6. ASML Holding NV 2.7 7. Roche Holding AG 2.6 8. AIA Group Ltd. 2.6 9. MasterCard, Inc. 2.5 10. Visa, Inc. 2.5 11. British American Tobacco PLC 2.3 12. ASSA ABLOY AB 2.1 13. Prudential PLC 2.0 14. Amadeus IT Holding SA 1.9 15. CRH PLC 1.9 16. Atlas Copco AB 1.7 17. Bayer AG 1.7 18. Anheuser-Busch InBev SA NV 1.7 19. USS Co. Ltd. 1.7 20. Naspers Ltd. 1.6 21. InterContinental Hotel Group PLC 1.5 22. James Hardie Industries PLC 1.5 23. Alphabet, Inc. 1.5 24. Berkshire Hathaway, Inc. 1.4 25. Sherwin-Williams Co. 1.4 Total Fund Net Assets $946,378,000 56.1 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 1-800-263-4077, by writing to us at Fidelity Investments Canada ULC, 483 Bay St. Suite 300, Toronto ON M5G 2N7 or by visiting our web site at www.fidelity.ca or SEDAR at www.sedar.com. 5
Fidelity Investments Canada ULC 483 Bay Street, Suite 300 Toronto, Ontario M5G 2N7 Manager, Transfer Agent and Registrar Fidelity Investments Canada ULC 483 Bay Street, Suite 300 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 www.fidelity.ca or call Fidelity Client Services at 1-800-263-4077 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, Fidelity U.S. Money Market Fund or Fidelity U.S. Money Market Investment Trust 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. 62.111044E 1.9587018.104 FICL-IGIT-MRFPA-0618