-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
S9H+kEB0GxA5UfOqd7ebwWjr+6bYpOXP8GpHeFaHdZapc0f0rrO15XQL4vN94/dD
iEtzHCH3/2LgkOimj9Spfg==
UNITED STATES FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-215
Fidelity Hastings Street Trust 82 Devonshire St., Boston, Massachusetts 02109 Scott C. Goebel, Secretary
82 Devonshire St.
Boston, Massachusetts 02109 Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end:
June 30
Date of reporting period:
December 31, 2008
Item 1. Reports to Stockholders
Fidelity Fifty®
Semiannual Report
December 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Chairman's Message
Ned Johnson's message to shareholders.
Shareholder Expense Example
An example of shareholder expenses.
Investment Changes
A summary of major shifts in the fund's investments over the past
six months.
Investments
A complete list of the fund's investments with their market values.
Financial Statements
Statements of assets and liabilities, operations, and changes in net
assets, as well as financial highlights.
Notes
Notes to the financial statements.
Board Approval of Investment Advisory
Contracts and Management Fees
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy
of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
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.
This report and the financial statements contained herein are submitted for the general information
of the shareholders of the fund. This report is not authorized for distribution to prospective investors
in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third
quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at
http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference
Room in Washington, DC. Information regarding the operation of the SEC's Public Reference
Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio
holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's
web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Exact name of registrant as specified in charter)
(Address of principal executive offices) (Zip code)
(Name and address of agent for service)
Contents
Semiannual Report
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
An all-out credit crisis gripped the world's capital markets in 2008, stunting economic growth, toppling commodity prices and pushing equity markets into their steepest declines in decades. Within this ultra-risk-averse climate, virtually the only positive results came from the relative security of U.S. government-backed assets. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2008 to December 31, 2008).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Semiannual Report
|
Annualized Expense Ratio |
Beginning |
Ending |
Expenses Paid |
Actual |
.77% |
$ 1,000.00 |
$ 556.10 |
$ 3.02 |
Hypothetical (5% return per year before expenses) |
|
$ 1,000.00 |
$ 1,021.32 |
$ 3.92 |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the aver-
age account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Top Ten Stocks as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Anheuser-Busch InBev NV |
6.9 |
0.0 |
QUALCOMM, Inc. |
5.3 |
1.9 |
Fiserv, Inc. |
5.0 |
2.5 |
DeVry, Inc. |
4.7 |
2.0 |
Exxon Mobil Corp. |
4.3 |
0.0 |
The DIRECTV Group, Inc. |
3.7 |
0.0 |
CVS Caremark Corp. |
3.6 |
3.0 |
Express Scripts, Inc. |
3.6 |
2.2 |
Electronic Arts, Inc. |
3.6 |
0.0 |
Wal-Mart Stores, Inc. |
3.5 |
0.0 |
|
44.2 |
|
Top Five Market Sectors as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Information Technology |
17.4 |
14.7 |
Consumer Staples |
17.1 |
6.2 |
Consumer Discretionary |
17.1 |
10.4 |
Health Care |
15.2 |
5.8 |
Energy |
12.3 |
26.5 |
Asset Allocation (% of fund's net assets) |
|||||||
As of December 31, 2008 * |
As of June 30, 2008 ** |
||||||
Stocks 99.1% |
|
Stocks 95.3% |
|
||||
Short-Term |
|
Short-Term |
|
||||
* Foreign investments |
14.5% |
|
** Foreign investments |
17.9% |
|
Semiannual Report
Showing Percentage of Net Assets
Common Stocks - 99.1% |
|||
Shares |
Value |
||
CONSUMER DISCRETIONARY - 17.1% |
|||
Diversified Consumer Services - 5.1% |
|||
American Public Education, Inc. (a) |
67,600 |
$ 2,514,044 |
|
DeVry, Inc. |
528,400 |
30,335,444 |
|
|
32,849,488 |
||
Hotels, Restaurants & Leisure - 6.5% |
|||
International Game Technology |
1,800,629 |
21,409,479 |
|
Las Vegas Sands Corp. unit (a) |
74,600 |
7,721,100 |
|
McDonald's Corp. |
208,000 |
12,935,520 |
|
|
42,066,099 |
||
Media - 4.7% |
|||
The DIRECTV Group, Inc. (a) |
1,042,918 |
23,893,251 |
|
The Walt Disney Co. |
270,145 |
6,129,590 |
|
|
30,022,841 |
||
Specialty Retail - 0.8% |
|||
Staples, Inc. |
270,900 |
4,854,528 |
|
TOTAL CONSUMER DISCRETIONARY |
109,792,956 |
||
CONSUMER STAPLES - 17.1% |
|||
Beverages - 10.0% |
|||
Anheuser-Busch InBev NV |
1,904,108 |
44,429,519 |
|
Anheuser-Busch InBev NV (strip VVPR) (a) |
1,924,936 |
11,130 |
|
Molson Coors Brewing Co. Class B |
407,666 |
19,943,021 |
|
|
64,383,670 |
||
Food & Staples Retailing - 7.1% |
|||
CVS Caremark Corp. |
808,662 |
23,240,946 |
|
Wal-Mart Stores, Inc. |
396,101 |
22,205,422 |
|
|
45,446,368 |
||
TOTAL CONSUMER STAPLES |
109,830,038 |
||
ENERGY - 12.3% |
|||
Energy Equipment & Services - 1.8% |
|||
BJ Services Co. |
719,000 |
8,390,730 |
|
Patterson-UTI Energy, Inc. |
299,700 |
3,449,547 |
|
|
11,840,277 |
||
Oil, Gas & Consumable Fuels - 10.5% |
|||
Chevron Corp. |
160,800 |
11,894,376 |
|
ConocoPhillips |
118,400 |
6,133,120 |
|
CONSOL Energy, Inc. |
206,300 |
5,896,054 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
ENERGY - continued |
|||
Oil, Gas & Consumable Fuels - continued |
|||
Denbury Resources, Inc. (a) |
388,300 |
$ 4,240,236 |
|
EOG Resources, Inc. |
42,261 |
2,813,737 |
|
Exxon Mobil Corp. |
349,500 |
27,900,585 |
|
Hess Corp. |
103,100 |
5,530,284 |
|
Southwestern Energy Co. (a) |
103,000 |
2,983,910 |
|
|
67,392,302 |
||
TOTAL ENERGY |
79,232,579 |
||
FINANCIALS - 11.5% |
|||
Capital Markets - 5.2% |
|||
Ashmore Global Opps Ltd. |
1,032,520 |
6,917,884 |
|
Ashmore Group PLC |
3,720,690 |
7,292,594 |
|
Greenhill & Co., Inc. (d) |
93,085 |
6,494,540 |
|
Morgan Stanley |
398,600 |
6,393,544 |
|
State Street Corp. |
165,800 |
6,520,914 |
|
|
33,619,476 |
||
Commercial Banks - 1.4% |
|||
Wells Fargo & Co. |
302,691 |
8,923,331 |
|
Insurance - 4.9% |
|||
ACE Ltd. |
255,500 |
13,521,060 |
|
Everest Re Group Ltd. |
134,000 |
10,202,760 |
|
The Chubb Corp. |
157,500 |
8,032,500 |
|
|
31,756,320 |
||
TOTAL FINANCIALS |
74,299,127 |
||
HEALTH CARE - 15.2% |
|||
Biotechnology - 3.1% |
|||
Amgen, Inc. (a) |
172,252 |
9,947,553 |
|
Cephalon, Inc. (a)(d) |
129,400 |
9,968,976 |
|
|
19,916,529 |
||
Health Care Equipment & Supplies - 3.2% |
|||
Baxter International, Inc. |
122,000 |
6,537,980 |
|
Edwards Lifesciences Corp. (a) |
255,710 |
14,051,265 |
|
|
20,589,245 |
||
Health Care Providers & Services - 3.6% |
|||
Express Scripts, Inc. (a) |
421,500 |
23,174,070 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
HEALTH CARE - continued |
|||
Pharmaceuticals - 5.3% |
|||
Abbott Laboratories |
242,500 |
$ 12,942,225 |
|
Merck & Co., Inc. |
687,000 |
20,884,800 |
|
|
33,827,025 |
||
TOTAL HEALTH CARE |
97,506,869 |
||
INDUSTRIALS - 6.0% |
|||
Airlines - 2.5% |
|||
Allegiant Travel Co. (a) |
232,900 |
11,311,953 |
|
AMR Corp. (a) |
440,820 |
4,703,549 |
|
|
16,015,502 |
||
Commercial Services & Supplies - 2.1% |
|||
Waste Management, Inc. |
407,400 |
13,501,236 |
|
Professional Services - 1.4% |
|||
FTI Consulting, Inc. (a)(d) |
209,768 |
9,372,434 |
|
TOTAL INDUSTRIALS |
38,889,172 |
||
INFORMATION TECHNOLOGY - 17.4% |
|||
Communications Equipment - 6.2% |
|||
Cisco Systems, Inc. (a) |
367,488 |
5,990,054 |
|
QUALCOMM, Inc. |
940,386 |
33,694,030 |
|
|
39,684,084 |
||
Computers & Peripherals - 0.9% |
|||
Apple, Inc. (a) |
71,500 |
6,102,525 |
|
IT Services - 5.0% |
|||
Fiserv, Inc. (a)(d) |
886,400 |
32,238,368 |
|
Semiconductors & Semiconductor Equipment - 1.7% |
|||
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR |
1,370,300 |
10,825,370 |
|
Software - 3.6% |
|||
Electronic Arts, Inc. (a) |
1,432,900 |
22,983,716 |
|
TOTAL INFORMATION TECHNOLOGY |
111,834,063 |
||
MATERIALS - 0.8% |
|||
Metals & Mining - 0.8% |
|||
Freeport-McMoRan Copper & Gold, Inc. Class B |
204,600 |
5,000,424 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
TELECOMMUNICATION SERVICES - 0.5% |
|||
Diversified Telecommunication Services - 0.5% |
|||
AT&T, Inc. |
114,900 |
$ 3,274,650 |
|
UTILITIES - 1.2% |
|||
Electric Utilities - 1.2% |
|||
Entergy Corp. |
90,900 |
7,556,517 |
|
TOTAL COMMON STOCKS (Cost $669,491,242) |
637,216,395 |
||
Money Market Funds - 2.8% |
|||
|
|
|
|
Fidelity Cash Central Fund, 1.06% (b) |
7,581,223 |
7,581,223 |
|
Fidelity Securities Lending Cash Central Fund, 0.87% (b)(c) |
10,449,075 |
10,449,075 |
|
TOTAL MONEY MARKET FUNDS (Cost $18,030,298) |
18,030,298 |
||
TOTAL INVESTMENT PORTFOLIO - 101.9% (Cost $687,521,540) |
655,246,693 |
||
NET OTHER ASSETS - (1.9)% |
(12,006,336) |
||
NET ASSETS - 100% |
$ 643,240,357 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund |
Income earned |
Fidelity Cash Central Fund |
$ 176,175 |
Fidelity Securities Lending Cash Central Fund |
256,991 |
Total |
$ 433,166 |
Other Information |
The following is a summary of the inputs used, as of December 31, 2008, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
||||
Description |
Total |
Level 1 |
Level 2 |
Level 3 |
Investments in Securities |
$ 655,246,693 |
$ 593,343,366 |
$ 54,182,227 |
$ 7,721,100 |
The following is a reconciliation of assets for which Level 3 inputs were used in determining value: |
|
Investments in Securities |
Beginning Balance |
$ - |
Total Realized Gain (Loss) |
- |
Total Unrealized Gain (Loss) |
261,100 |
Cost of Purchases |
7,460,000 |
Proceeds of Sales |
- |
Amortization/Accretion |
- |
Transfer in/out of Level 3 |
- |
Ending Balance |
$ 7,721,100 |
The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: (Unaudited) |
United States of America |
85.5% |
Belgium |
6.9% |
United Kingdom |
2.2% |
Switzerland |
2.1% |
Taiwan |
1.7% |
Bermuda |
1.6% |
|
100.0% |
Income Tax Information |
The fund intends to elect to defer to its fiscal year ending June 30, 2009 approximately $180,935,820 of losses recognized during the period November 1, 2007 to June 30, 2008. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
December 31, 2008 (Unaudited) |
|
|
|
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $10,339,589) - See accompanying schedule: Unaffiliated issuers (cost $669,491,242) |
$ 637,216,395 |
|
Fidelity Central Funds (cost $18,030,298) |
18,030,298 |
|
Total Investments (cost $687,521,540) |
|
$ 655,246,693 |
Receivable for fund shares sold |
|
708,980 |
Dividends receivable |
|
1,055,778 |
Distributions receivable from Fidelity Central Funds |
|
173,672 |
Prepaid expenses |
|
8,829 |
Other receivables |
|
119,419 |
Total assets |
|
657,313,371 |
|
|
|
Liabilities |
|
|
Payable to custodian bank |
$ 4,519 |
|
Payable for investments purchased |
1,378,407 |
|
Payable for fund shares redeemed |
1,942,731 |
|
Accrued management fee |
81,440 |
|
Other affiliated payables |
179,848 |
|
Other payables and accrued expenses |
36,994 |
|
Collateral on securities loaned, at value |
10,449,075 |
|
Total liabilities |
|
14,073,014 |
|
|
|
Net Assets |
|
$ 643,240,357 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 1,292,722,616 |
Accumulated net investment loss |
|
(51,287) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(617,160,662) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
(32,270,310) |
Net Assets, for 58,360,538 shares outstanding |
|
$ 643,240,357 |
Net Asset Value, offering price and redemption price per share ($643,240,357 ÷ 58,360,538 shares) |
|
$ 11.02 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Six months ended December 31, 2008 (Unaudited) |
||
|
|
|
Investment Income |
|
|
Dividends |
|
$ 5,836,543 |
Interest |
|
876 |
Income from Fidelity Central Funds |
|
433,166 |
Total income |
|
6,270,585 |
|
|
|
Expenses |
|
|
Management fee |
$ 2,537,784 |
|
Performance adjustment |
(634,095) |
|
Transfer agent fees |
1,256,916 |
|
Accounting and security lending fees |
154,813 |
|
Custodian fees and expenses |
30,683 |
|
Independent trustees' compensation |
2,582 |
|
Registration fees |
24,081 |
|
Audit |
29,402 |
|
Legal |
5,620 |
|
Interest |
10,600 |
|
Miscellaneous |
66,762 |
|
Total expenses before reductions |
3,485,148 |
|
Expense reductions |
(104,093) |
3,381,055 |
Net investment income (loss) |
|
2,889,530 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities: |
|
|
Unaffiliated issuers |
(431,580,683) |
|
Foreign currency transactions |
(1,503,067) |
|
Futures contracts |
190,341 |
|
Total net realized gain (loss) |
|
(432,893,409) |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of increase in deferred foreign taxes of $61) |
(126,175,084) |
|
Assets and liabilities in foreign currencies |
44,784 |
|
Total change in net unrealized appreciation (depreciation) |
|
(126,130,300) |
Net gain (loss) |
|
(559,023,709) |
Net increase (decrease) in net assets resulting from operations |
|
$ (556,134,179) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
|
Six months ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 2,889,530 |
$ (1,250,250) |
Net realized gain (loss) |
(432,893,409) |
(84,881,932) |
Change in net unrealized appreciation (depreciation) |
(126,130,300) |
(66,457,417) |
Net increase (decrease) in net assets resulting |
(556,134,179) |
(152,589,599) |
Distributions to shareholders from net investment income |
(2,940,730) |
(1,166,932) |
Distributions to shareholders from net realized gain |
(2,245,538) |
(264,783,222) |
Total distributions |
(5,186,268) |
(265,950,154) |
Share transactions |
58,997,019 |
538,874,678 |
Reinvestment of distributions |
5,069,294 |
259,377,085 |
Cost of shares redeemed |
(161,982,567) |
(564,686,677) |
Net increase (decrease) in net assets resulting from share transactions |
(97,916,254) |
233,565,086 |
Total increase (decrease) in net assets |
(659,236,701) |
(184,974,667) |
|
|
|
Net Assets |
|
|
Beginning of period |
1,302,477,058 |
1,487,451,725 |
End of period (including accumulated net investment loss of $51,287 and $87, respectively) |
$ 643,240,357 |
$ 1,302,477,058 |
Other Information Shares |
|
|
Sold |
4,271,044 |
23,613,048 |
Issued in reinvestment of distributions |
393,754 |
11,524,073 |
Redeemed |
(11,575,219) |
(26,883,343) |
Net increase (decrease) |
(6,910,421) |
8,253,778 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended December 31, 2008 |
Years ended June 30, |
||||
|
(Unaudited) |
2008 |
2007 |
2006 |
2005 |
2004 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period |
$ 19.95 |
$ 26.09 |
$ 23.62 |
$ 20.07 |
$ 19.59 |
$ 17.90 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D |
.05 |
(.02) |
.07 |
.11 G |
.07 H |
(.05) |
Net realized and unrealized gain (loss) |
(8.89) |
(1.85) |
4.27 |
3.61 |
.49 |
1.77 |
Total from investment operations |
(8.84) |
(1.87) |
4.34 |
3.72 |
.56 |
1.72 |
Distributions from net investment income |
(.05) |
(.02) |
(.09) |
(.01) |
(.08) |
(.03) |
Distributions from net realized gain |
(.04) |
(4.25) |
(1.78) |
(.16) |
- |
- |
Total distributions |
(.09) |
(4.27) |
(1.87) |
(.17) |
(.08) |
(.03) |
Redemption fees added to paid in capital |
- |
- |
- D, J, K |
-D, K |
-D, K |
-D, K |
Net asset value, end of period |
$ 11.02 |
$ 19.95 |
$ 26.09 |
$ 23.62 |
$ 20.07 |
$ 19.59 |
Total Return B,C |
(44.39)% |
(8.50) % |
20.47% |
18.56% |
2.85% |
9.63% |
Ratios to Average Net Assets E,I |
|
|
|
|
|
|
Expenses before reductions |
.77% A |
.99% |
.84% |
.79% |
.97% |
1.05% |
Expenses net of fee waivers, if any |
.77% A |
.99% |
.84% |
.79% |
.97% |
1.05% |
Expenses net of all reductions |
.75% A |
.98% |
.83% |
.77% |
.92% |
.99% |
Net investment income (loss) |
.64% A |
(.08)% |
.30% |
.46% G |
.35% H |
(.29)% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
$ 643,240 |
$ 1,302,477 |
$ 1,487,452 |
$ 1,195,648 |
$ 795,058 |
$ 926,174 |
Portfolio turnover rate F |
452% A |
173% |
236% |
107% |
110% |
161% |
A Annualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GInvestment income per share reflects a special dividend which amounted to $.04 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been .27%. HInvestment income per share reflects a special dividend which amounted to $.10 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been (.14) %. IExpense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund. J The redemption fee was eliminated during the year ended June 30, 2007. K Amount represents less than $.01 per share. |
Semiannual Report
See accompanying notes which are an integral part of the financial statements.
For the period ended December 31, 2008 (Unaudited)
1. Organization.
Fidelity Fifty (the Fund) is a non-diversified fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 |
Quoted prices in active markets for identical securities. |
Level 2 |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of December 31, 2008, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, partnerships, deferred trustees compensation and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation |
$ 38,000,604 |
Unrealized depreciation |
(100,977,457) |
Net unrealized appreciation (depreciation) |
$ (62,976,853) |
Cost for federal income tax purposes |
$ 718,223,546 |
New Accounting Pronouncement. In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for reporting periods beginning after Novem-
ber 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the
accounting treatment and the effect derivatives have on financial performance.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $2,076,369,382 and $2,116,881,870, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the Fund's relative investment performance as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .42% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the transfer agent fees were equivalent to an annualized rate of .28% of average net assets.
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $19,430 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender |
Average Daily Loan Balance |
Weighted Average Interest Rate |
Interest |
Borrower |
$ 9,549,813 |
1.20% |
$ 10,210 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $1,215 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $256,991.
9. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average daily loan balance during the period for which loans were outstanding amounted to $11,219,000. The weighted average interest rate was 1.25%. The interest expense amounted to $390 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
Semiannual Report
10. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $97,077 for the period. In addition, through arrangements with the Fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody and transfer agent expenses by $2,595 and $4,421, respectively.
11. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Fidelity Fifty
Each year, typically in July, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly and, acting directly and through its separate committees, requests and receives information concerning, and considers at each of its meetings factors that are relevant to, its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. Each committee has a written charter outlining the structure and purposes of the committee. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.
At its July 2008 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders. The Board also approved agreements with foreign sub-advisers Fidelity Management & Research (Japan) Inc. and Fidelity Management & Research (Hong Kong) Limited, as well as amendments to the fund's agreement with Fidelity Management & Research (U.K.) Inc.
In considering whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund's shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the backgrounds of the fund's investment personnel and the fund's investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services. The Board further considered that Fidelity voluntarily pays for market data out of its own resources.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge. The Board noted that Fidelity has taken a number of actions over the previous year that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) contractually agreeing to reduce the management fees on Fidelity's Institutional Money Market Funds and launching Class IV and Institutional Class of certain of these funds; (iii) reducing the transfer agent fees for the Fidelity Select Portfolios and Investor Class of the VIP funds; and (iv) launching Class K of 29 equity funds as a lower-fee class available to certain employer-sponsored retirement plans.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund's absolute investment performance, as well as the fund's relative investment performance measured against (i) a broad-based securities market index, and (ii) a custom peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one-, three-, and five-year periods ended December 31, 2007, the fund's cumulative total returns, the cumulative total returns of a broad-based securities market index ("benchmark"), and a range of cumulative total returns of a custom peer group of mutual funds defined by FMR based on categories assigned by Morningstar, Inc. The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the peer group whose performance was equal to or lower than that of the fund. The fund's custom peer group, defined by FMR, is a peer group that FMR believes provides a more meaningful performance comparison than the peer group assigned by Morningstar, Inc., which assigns mutual funds to categories based on their investment styles as measured by their underlying portfolio holdings.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Fidelity Fifty
The Board reviewed the fund's relative investment performance against its peer group and stated that the performance of the fund was in the first quartile for the one- and three-year periods and the third quartile for the five-year period. The Board also stated that the investment performance of the fund compared favorably to its benchmark for the one- and three-year periods, although the fund's five-year cumulative total return was lower than its benchmark.
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, the record (over the same period) of a Board-approved performance adjustment index. The Board realizes that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for the fund's shareholders and helps to more closely align the interests of FMR and the fund's shareholders.
The Board considered that FMR has taken steps to refocus and strengthen equity research, equity portfolio management, and compliance.
Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Semiannual Report
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's management fee and total expenses compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board's management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared. The Board also considered supplemental information about how the fund's management fee and total expenses ranked relative to groups based on Lipper classifications, which take into account a fund's market capitalization and style.
The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a TMG % of 9% means that 91% of the funds in the Total Mapped Group had higher management fees than the fund. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to non-Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee ranked and the impact of the fund's performance adjustment, is also included in the chart and considered by the Board.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Fidelity Fifty
The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2007. The Board also noted the effect of the fund's positive performance adjustment on the fund's management fee ranking. The Board noted that the performance adjustment for each year represents calculations for performance periods that differ from the periods shown in the performance charts above.
Based on its review, the Board concluded that the fund's management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
In its review of the fund's total expenses, the Board considered the fund's management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses, as well as the impact of the fund's performance adjustment. As part of its review, the Board also considered current and historical total expenses of the fund compared to competitive fund median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund's total expenses ranked below its competitive median for 2007.
Semiannual Report
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund's total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of the results of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of Fidelity's methodologies used in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board has also reviewed Fidelity's non-fund businesses and any fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including (i) fund performance trends and actions to be taken by FMR to improve certain funds' overall performance; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability and the extent to which portfolio manager compensation is linked to fund performance; (v) Fidelity's fee structures and rationale for recommending different fees among categories of funds; and (vi) Fidelity's rationale for recommending which funds should have a performance adjustment component as part of their management fees.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Semiannual Report
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
15445 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
2000 Avenue of the Stars
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
123 South Lake Avenue
Pasadena, CA
16656 Bernardo Ctr. Drive
Rancho Bernardo, CA
1220 Roseville Parkway
Roseville, CA
1740 Arden Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
11943 El Camino Real
San Diego, CA
8 Montgomery Street
San Francisco, CA
3793 State Street
Santa Barbara, CA
1200 Wilshire Boulevard
Santa Monica, CA
398 West El Camino Real
Sunnyvale, CA
111 South Westlake Blvd
Thousand Oaks, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6326 Canoga Avenue
Woodland Hills, CA
Colorado
281 East Flatiron Circle
Broomfield, CO
1625 Broadway
Denver, CO
9185 Westview Road
Lone Tree, CO
Connecticut
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
Delaware
400 Delaware Avenue
Wilmington, DE
Florida
175 East Altamonte Drive
Altamonte Springs, FL
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
4671 Town Center Parkway
Jacksonville, FL
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
Palm Beach, FL
3501 PGA Boulevard
Palm Beach Gardens, FL
3550 Tamiami Trail, South
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
2465 State Road 7
Wellington, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7315 Wisconsin Avenue
Bethesda, MD
610 York Road
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
Novi, MI
Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
Scarsdale, NY
North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
Columbus, OH
1800 Crocker Road
Westlake, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
FIL Investment Advisors
FIL Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) 1-800-544-5555
Automated line for quickest service
FIF-USAN-0209 1.787779.105
Fidelity®
Fund
Semiannual Report
December 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Chairman's Message |
Ned Johnson's message to shareholders. |
|
Shareholder Expense Example |
An example of shareholder expenses. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
|
Notes |
Notes to the financial statements. |
|
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
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.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
An all-out credit crisis gripped the world's capital markets in 2008, stunting economic growth, toppling commodity prices and pushing equity markets into their steepest declines in decades. Within this ultra-risk-averse climate, virtually the only positive results came from the relative security of U.S. government-backed assets. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2008 to December 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Semiannual Report
|
Annualized |
Beginning |
Ending |
Expenses Paid |
Fidelity Fund |
.61% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 664.20 |
$ 2.56 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,022.13 |
$ 3.11 |
Class K |
.44% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 665.00 |
$ 1.85 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,022.99 |
$ 2.24 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Top Ten Stocks as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Exxon Mobil Corp. |
4.5 |
2.2 |
Wells Fargo & Co. |
2.5 |
0.6 |
Wal-Mart Stores, Inc. |
2.5 |
1.7 |
Procter & Gamble Co. |
2.3 |
0.9 |
Johnson & Johnson |
2.1 |
0.4 |
Wyeth |
2.0 |
1.7 |
General Electric Co. |
1.9 |
0.0 |
Cisco Systems, Inc. |
1.6 |
1.3 |
Chevron Corp. |
1.5 |
1.0 |
Philip Morris International, Inc. |
1.4 |
0.8 |
|
22.3 |
|
Top Five Market Sectors as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Health Care |
15.0 |
10.2 |
Information Technology |
14.7 |
17.1 |
Financials |
13.8 |
12.0 |
Consumer Discretionary |
11.4 |
6.9 |
Consumer Staples |
11.1 |
7.9 |
Asset Allocation (% of fund's net assets) |
|||||||
As of December 31, 2008 * |
As of June 30, 2008 ** |
||||||
Stocks 92.7% |
|
Stocks 93.8% |
|
||||
Bonds 2.7% |
|
Bonds 0.0% |
|
||||
Convertible |
|
Convertible |
|
||||
Other Investments 1.5% |
|
Other Investments 0.0% |
|
||||
Short-Term |
|
Short-Term |
|
||||
* Foreign investments |
7.5% |
|
** Foreign investments |
14.3% |
|
Semiannual Report
Showing Percentage of Net Assets
Common Stocks - 92.7% |
|||
Shares |
Value (000s) |
||
CONSUMER DISCRETIONARY - 10.3% |
|||
Auto Components - 0.2% |
|||
The Goodyear Tire & Rubber Co. (a) |
1,155,200 |
$ 6,897 |
|
Diversified Consumer Services - 0.3% |
|||
Brinks Home Security Holdings, Inc. (a) |
580,900 |
12,733 |
|
Hotels, Restaurants & Leisure - 1.4% |
|||
Burger King Holdings, Inc. |
421,700 |
10,070 |
|
Carnival Corp. unit |
135,800 |
3,303 |
|
Marriott International, Inc. Class A |
264,000 |
5,135 |
|
McDonald's Corp. |
559,000 |
34,764 |
|
Royal Caribbean Cruises Ltd. |
453,100 |
6,230 |
|
Starwood Hotels & Resorts Worldwide, Inc. |
268,500 |
4,806 |
|
|
64,308 |
||
Household Durables - 1.7% |
|||
Lennar Corp. Class A (d) |
666,800 |
5,781 |
|
Mohawk Industries, Inc. (a) |
419,300 |
18,017 |
|
Pulte Homes, Inc. (d) |
1,854,500 |
20,270 |
|
Whirlpool Corp. (d) |
784,200 |
32,427 |
|
|
76,495 |
||
Internet & Catalog Retail - 0.2% |
|||
Amazon.com, Inc. (a) |
178,000 |
9,128 |
|
Media - 2.4% |
|||
Comcast Corp. Class A |
1,621,200 |
27,366 |
|
McGraw-Hill Companies, Inc. |
851,900 |
19,756 |
|
The Walt Disney Co. |
1,490,100 |
33,810 |
|
Time Warner, Inc. |
3,038,200 |
30,564 |
|
|
111,496 |
||
Multiline Retail - 0.3% |
|||
Target Corp. |
352,900 |
12,186 |
|
Specialty Retail - 3.0% |
|||
AutoZone, Inc. (a) |
114,800 |
16,011 |
|
Best Buy Co., Inc. |
798,300 |
22,440 |
|
Home Depot, Inc. |
391,300 |
9,008 |
|
Lowe's Companies, Inc. |
2,101,800 |
45,231 |
|
PetSmart, Inc. |
434,451 |
8,016 |
|
Staples, Inc. |
2,077,350 |
37,226 |
|
|
137,932 |
||
Textiles, Apparel & Luxury Goods - 0.8% |
|||
Polo Ralph Lauren Corp. Class A |
845,273 |
38,384 |
|
TOTAL CONSUMER DISCRETIONARY |
469,559 |
||
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
CONSUMER STAPLES - 11.0% |
|||
Beverages - 1.8% |
|||
PepsiCo, Inc. |
890,690 |
$ 48,783 |
|
The Coca-Cola Co. |
779,200 |
35,274 |
|
|
84,057 |
||
Food & Staples Retailing - 3.5% |
|||
Costco Wholesale Corp. |
455,200 |
23,898 |
|
CVS Caremark Corp. |
842,000 |
24,199 |
|
Wal-Mart Stores, Inc. |
1,999,300 |
112,081 |
|
|
160,178 |
||
Food Products - 1.6% |
|||
Kellogg Co. |
431,300 |
18,913 |
|
Lindt & Spruengli AG (participation certificate) |
8,459 |
15,791 |
|
Nestle SA (Reg.) |
969,724 |
38,311 |
|
|
73,015 |
||
Household Products - 2.3% |
|||
Procter & Gamble Co. |
1,719,544 |
106,302 |
|
Tobacco - 1.8% |
|||
British American Tobacco PLC sponsored ADR |
291,700 |
15,443 |
|
Philip Morris International, Inc. |
1,504,100 |
65,443 |
|
|
80,886 |
||
TOTAL CONSUMER STAPLES |
504,438 |
||
ENERGY - 10.4% |
|||
Energy Equipment & Services - 0.7% |
|||
Schlumberger Ltd. (NY Shares) |
547,000 |
23,155 |
|
Transocean Ltd. (a) |
203,933 |
9,636 |
|
|
32,791 |
||
Oil, Gas & Consumable Fuels - 9.7% |
|||
Canadian Natural Resources Ltd. |
340,100 |
13,627 |
|
Chesapeake Energy Corp. |
732,300 |
11,841 |
|
Chevron Corp. |
931,400 |
68,896 |
|
ConocoPhillips |
632,500 |
32,764 |
|
Denbury Resources, Inc. (a) |
621,700 |
6,789 |
|
Devon Energy Corp. |
169,800 |
11,158 |
|
Exxon Mobil Corp. |
2,592,000 |
206,921 |
|
Hess Corp. |
254,900 |
13,673 |
|
Occidental Petroleum Corp. |
779,800 |
46,780 |
|
Range Resources Corp. |
112,300 |
3,862 |
|
Ultra Petroleum Corp. (a) |
251,479 |
8,679 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
ENERGY - continued |
|||
Oil, Gas & Consumable Fuels - continued |
|||
Valero Energy Corp. |
308,500 |
$ 6,676 |
|
Williams Companies, Inc. |
823,700 |
11,927 |
|
|
443,593 |
||
TOTAL ENERGY |
476,384 |
||
FINANCIALS - 13.8% |
|||
Capital Markets - 4.0% |
|||
Bank of New York Mellon Corp. |
1,209,800 |
34,274 |
|
Charles Schwab Corp. |
857,900 |
13,872 |
|
Goldman Sachs Group, Inc. |
357,000 |
30,127 |
|
Julius Baer Holding Ltd. |
316,215 |
12,227 |
|
Lazard Ltd. Class A |
514,500 |
15,301 |
|
Morgan Stanley |
615,300 |
9,869 |
|
State Street Corp. |
1,152,500 |
45,328 |
|
T. Rowe Price Group, Inc. |
597,200 |
21,165 |
|
|
182,163 |
||
Commercial Banks - 4.5% |
|||
Banco Itau Holding Financeira SA sponsored ADR (non-vtg.) (d) |
696,600 |
8,081 |
|
First Horizon National Corp. (d) |
1,113,587 |
11,771 |
|
PNC Financial Services Group, Inc. |
431,300 |
21,134 |
|
Sumitomo Mitsui Financial Group, Inc. |
5,761 |
25,953 |
|
U.S. Bancorp, Delaware |
1,063,600 |
26,601 |
|
Wells Fargo & Co. |
3,882,200 |
114,447 |
|
|
207,987 |
||
Consumer Finance - 0.6% |
|||
American Express Co. |
643,192 |
11,931 |
|
Capital One Financial Corp. |
500,500 |
15,961 |
|
|
27,892 |
||
Diversified Financial Services - 3.6% |
|||
Bank of America Corp. |
4,134,765 |
58,217 |
|
Citigroup, Inc. |
6,019,000 |
40,387 |
|
JPMorgan Chase & Co. |
2,034,200 |
64,138 |
|
|
162,742 |
||
Insurance - 0.9% |
|||
AFLAC, Inc. |
351,100 |
16,094 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
FINANCIALS - continued |
|||
Insurance - continued |
|||
Berkshire Hathaway, Inc. Class A (a) |
131 |
$ 12,655 |
|
MetLife, Inc. |
284,100 |
9,904 |
|
|
38,653 |
||
Thrifts & Mortgage Finance - 0.2% |
|||
Hudson City Bancorp, Inc. |
683,800 |
10,913 |
|
TOTAL FINANCIALS |
630,350 |
||
HEALTH CARE - 14.3% |
|||
Biotechnology - 4.6% |
|||
Amgen, Inc. (a) |
954,200 |
55,105 |
|
Cephalon, Inc. (a) |
267,200 |
20,585 |
|
CSL Ltd. |
929,520 |
22,358 |
|
Genentech, Inc. (a) |
784,700 |
65,059 |
|
Gilead Sciences, Inc. (a) |
919,000 |
46,998 |
|
|
210,105 |
||
Health Care Equipment & Supplies - 2.6% |
|||
C.R. Bard, Inc. |
561,900 |
47,346 |
|
Covidien Ltd. |
1,106,300 |
40,092 |
|
St. Jude Medical, Inc. (a) |
923,000 |
30,422 |
|
|
117,860 |
||
Health Care Providers & Services - 1.0% |
|||
Medco Health Solutions, Inc. (a) |
1,092,900 |
45,803 |
|
Pharmaceuticals - 6.1% |
|||
Abbott Laboratories |
930,600 |
49,666 |
|
Allergan, Inc. |
181,000 |
7,298 |
|
Elan Corp. PLC sponsored ADR (a) |
1,954,296 |
11,726 |
|
Johnson & Johnson |
1,641,200 |
98,193 |
|
Merck & Co., Inc. |
691,700 |
21,028 |
|
Wyeth |
2,446,240 |
91,758 |
|
|
279,669 |
||
TOTAL HEALTH CARE |
653,437 |
||
INDUSTRIALS - 10.4% |
|||
Aerospace & Defense - 3.1% |
|||
General Dynamics Corp. |
474,900 |
27,349 |
|
Honeywell International, Inc. |
685,800 |
22,515 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
INDUSTRIALS - continued |
|||
Aerospace & Defense - continued |
|||
Lockheed Martin Corp. |
754,230 |
$ 63,416 |
|
Raytheon Co. |
530,800 |
27,092 |
|
|
140,372 |
||
Air Freight & Logistics - 0.8% |
|||
United Parcel Service, Inc. Class B |
633,500 |
34,944 |
|
Building Products - 0.4% |
|||
Masco Corp. |
1,904,700 |
21,199 |
|
Commercial Services & Supplies - 0.7% |
|||
Stericycle, Inc. (a) |
298,100 |
15,525 |
|
The Brink's Co. |
580,900 |
15,615 |
|
|
31,140 |
||
Construction & Engineering - 0.6% |
|||
Quanta Services, Inc. (a)(d) |
1,247,000 |
24,691 |
|
Shaw Group, Inc. (a) |
99,188 |
2,030 |
|
|
26,721 |
||
Electrical Equipment - 0.2% |
|||
Cooper Industries Ltd. Class A |
384,700 |
11,245 |
|
Industrial Conglomerates - 1.9% |
|||
General Electric Co. |
5,473,400 |
88,669 |
|
Machinery - 1.7% |
|||
Briggs & Stratton Corp. |
251,400 |
4,422 |
|
Cummins, Inc. |
541,600 |
14,477 |
|
Danaher Corp. |
304,900 |
17,260 |
|
Deere & Co. |
253,200 |
9,703 |
|
Illinois Tool Works, Inc. |
476,100 |
16,687 |
|
Navistar International Corp. (a) |
296,800 |
6,346 |
|
PACCAR, Inc. |
307,000 |
8,780 |
|
Sulzer AG (Reg.) |
22,036 |
1,269 |
|
|
78,944 |
||
Professional Services - 0.3% |
|||
Manpower, Inc. |
344,900 |
11,723 |
|
Monster Worldwide, Inc. (a) |
113,200 |
1,369 |
|
|
13,092 |
||
Road & Rail - 0.4% |
|||
Union Pacific Corp. |
352,600 |
16,854 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
INDUSTRIALS - continued |
|||
Trading Companies & Distributors - 0.3% |
|||
GATX Corp. |
471,800 |
$ 14,612 |
|
TOTAL INDUSTRIALS |
477,792 |
||
INFORMATION TECHNOLOGY - 14.2% |
|||
Communications Equipment - 2.6% |
|||
Cisco Systems, Inc. (a) |
4,457,676 |
72,660 |
|
QUALCOMM, Inc. |
1,348,100 |
48,302 |
|
|
120,962 |
||
Computers & Peripherals - 3.0% |
|||
Apple, Inc. (a) |
489,000 |
41,736 |
|
Hewlett-Packard Co. |
1,544,000 |
56,032 |
|
International Business Machines Corp. |
381,400 |
32,099 |
|
NCR Corp. (a) |
574,621 |
8,125 |
|
|
137,992 |
||
Electronic Equipment & Components - 1.2% |
|||
Amphenol Corp. Class A |
1,541,138 |
36,956 |
|
Arrow Electronics, Inc. (a) |
815,100 |
15,356 |
|
|
52,312 |
||
Internet Software & Services - 0.7% |
|||
Google, Inc. Class A (sub. vtg.) (a) |
110,485 |
33,991 |
|
IT Services - 1.0% |
|||
Cognizant Technology Solutions Corp. Class A (a) |
479,900 |
8,667 |
|
Visa, Inc. |
715,800 |
37,544 |
|
|
46,211 |
||
Semiconductors & Semiconductor Equipment - 3.7% |
|||
Applied Materials, Inc. |
3,976,400 |
40,281 |
|
Intel Corp. |
2,871,200 |
42,092 |
|
KLA-Tencor Corp. |
392,500 |
8,553 |
|
Lam Research Corp. (a) |
754,200 |
16,049 |
|
MEMC Electronic Materials, Inc. (a) |
394,500 |
5,633 |
|
Skyworks Solutions, Inc. (a) |
1,040,534 |
5,765 |
|
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR |
2,627,586 |
20,758 |
|
Texas Instruments, Inc. |
1,135,400 |
17,621 |
|
Xilinx, Inc. |
665,300 |
11,856 |
|
|
168,608 |
||
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
INFORMATION TECHNOLOGY - continued |
|||
Software - 2.0% |
|||
Microsoft Corp. |
2,444,800 |
$ 47,527 |
|
Oracle Corp. (a) |
2,444,600 |
43,343 |
|
|
90,870 |
||
TOTAL INFORMATION TECHNOLOGY |
650,946 |
||
MATERIALS - 4.0% |
|||
Chemicals - 3.0% |
|||
Albemarle Corp. |
452,100 |
10,082 |
|
E.I. du Pont de Nemours & Co. |
639,800 |
16,187 |
|
Ecolab, Inc. |
240,800 |
8,464 |
|
FMC Corp. |
583,500 |
26,100 |
|
Monsanto Co. |
863,267 |
60,731 |
|
Praxair, Inc. |
185,622 |
11,019 |
|
Solutia, Inc. (a) |
900,000 |
4,050 |
|
|
136,633 |
||
Construction Materials - 0.4% |
|||
Vulcan Materials Co. (d) |
260,300 |
18,112 |
|
Containers & Packaging - 0.1% |
|||
Sealed Air Corp. |
141,700 |
2,117 |
|
Metals & Mining - 0.5% |
|||
Goldcorp, Inc. |
442,100 |
13,949 |
|
Newcrest Mining Ltd. |
447,353 |
10,861 |
|
|
24,810 |
||
TOTAL MATERIALS |
181,672 |
||
TELECOMMUNICATION SERVICES - 2.6% |
|||
Diversified Telecommunication Services - 2.4% |
|||
AT&T, Inc. |
2,060,395 |
58,721 |
|
Verizon Communications, Inc. |
1,459,100 |
49,463 |
|
|
108,184 |
||
Wireless Telecommunication Services - 0.2% |
|||
American Tower Corp. Class A (a) |
381,900 |
11,197 |
|
TOTAL TELECOMMUNICATION SERVICES |
119,381 |
||
UTILITIES - 1.7% |
|||
Electric Utilities - 1.5% |
|||
Entergy Corp. |
328,900 |
27,341 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
UTILITIES - continued |
|||
Electric Utilities - continued |
|||
Exelon Corp. |
488,800 |
$ 27,182 |
|
FirstEnergy Corp. |
279,800 |
13,593 |
|
|
68,116 |
||
Independent Power Producers & Energy Traders - 0.2% |
|||
NRG Energy, Inc. (a) |
489,400 |
11,418 |
|
TOTAL UTILITIES |
79,534 |
||
TOTAL COMMON STOCKS (Cost $5,119,340) |
4,243,493 |
Corporate Bonds - 2.9% |
||||
|
Principal Amount (000s) |
|
||
Convertible Bonds - 0.2% |
||||
ENERGY - 0.2% |
||||
Oil, Gas & Consumable Fuels - 0.2% |
||||
Chesapeake Energy Corp. 2.5% 5/15/37 |
|
$ 19,400 |
11,702 |
|
Nonconvertible Bonds - 2.7% |
||||
CONSUMER DISCRETIONARY - 0.6% |
||||
Hotels, Restaurants & Leisure - 0.2% |
||||
MGM Mirage, Inc.: |
|
|
|
|
5.875% 2/27/14 |
|
12,000 |
7,530 |
|
13% 11/15/13 (e) |
|
3,810 |
3,648 |
|
|
11,178 |
|||
Media - 0.3% |
||||
Charter Communications Operating LLC/Charter Communications Operating Capital Corp. 8.375% 4/30/14 (e) |
|
10,000 |
7,550 |
|
TL Acquisitions, Inc. 10.5% 1/15/15 (e) |
|
10,000 |
4,200 |
|
|
11,750 |
|||
Specialty Retail - 0.1% |
||||
Sally Holdings LLC 9.25% 11/15/14 |
|
5,000 |
4,100 |
|
TOTAL CONSUMER DISCRETIONARY |
27,028 |
|||
Corporate Bonds - continued |
||||
|
Principal Amount (000s) |
Value (000s) |
||
Nonconvertible Bonds - continued |
||||
CONSUMER STAPLES - 0.1% |
||||
Beverages - 0.1% |
||||
Constellation Brands, Inc.: |
|
|
|
|
7.25% 9/1/16 |
|
$ 4,905 |
$ 4,635 |
|
7.25% 5/15/17 |
|
1,225 |
1,158 |
|
|
5,793 |
|||
ENERGY - 0.1% |
||||
Oil, Gas & Consumable Fuels - 0.1% |
||||
Chesapeake Energy Corp.: |
|
|
|
|
6.5% 8/15/17 |
|
4,655 |
3,584 |
|
6.625% 1/15/16 |
|
355 |
280 |
|
6.875% 1/15/16 |
|
2,425 |
1,964 |
|
|
5,828 |
|||
FINANCIALS - 0.0% |
||||
Real Estate Investment Trusts - 0.0% |
||||
Rouse Co. 5.375% 11/26/13 |
|
190 |
60 |
|
HEALTH CARE - 0.4% |
||||
Health Care Providers & Services - 0.4% |
||||
HCA, Inc. 9.25% 11/15/16 |
|
10,000 |
9,150 |
|
Tenet Healthcare Corp. 9.875% 7/1/14 |
|
10,000 |
8,050 |
|
|
17,200 |
|||
INDUSTRIALS - 0.4% |
||||
Building Products - 0.1% |
||||
Nortek, Inc. 10% 12/1/13 |
|
10,000 |
6,850 |
|
Commercial Services & Supplies - 0.2% |
||||
ARAMARK Corp. 8.5% 2/1/15 |
|
10,000 |
8,900 |
|
Trading Companies & Distributors - 0.1% |
||||
VWR Funding, Inc. 10.25% 7/15/15 |
|
5,000 |
2,850 |
|
TOTAL INDUSTRIALS |
18,600 |
|||
INFORMATION TECHNOLOGY - 0.3% |
||||
Electronic Equipment & Components - 0.1% |
||||
Texas Competitive Electric Holdings Co. LLC Series A, 10.25% 11/1/15 (e) |
|
9,335 |
6,464 |
|
Corporate Bonds - continued |
||||
|
Principal Amount (000s) |
Value (000s) |
||
Nonconvertible Bonds - continued |
||||
INFORMATION TECHNOLOGY - continued |
||||
IT Services - 0.2% |
||||
SunGard Data Systems, Inc. 9.125% 8/15/13 |
|
$ 10,000 |
$ 8,300 |
|
TOTAL INFORMATION TECHNOLOGY |
14,764 |
|||
MATERIALS - 0.2% |
||||
Metals & Mining - 0.2% |
||||
Freeport-McMoRan Copper & Gold, Inc. 8.375% 4/1/17 |
|
10,000 |
8,050 |
|
TELECOMMUNICATION SERVICES - 0.6% |
||||
Diversified Telecommunication Services - 0.1% |
||||
Level 3 Financing, Inc. 9.25% 11/1/14 |
|
5,235 |
2,670 |
|
Wireless Telecommunication Services - 0.5% |
||||
Cricket Communications, Inc. 9.375% 11/1/14 |
|
10,000 |
8,200 |
|
Intelsat Jackson Holdings Ltd. 9.5% 6/15/16 (e) |
|
15,000 |
13,725 |
|
|
21,925 |
|||
TOTAL TELECOMMUNICATION SERVICES |
24,595 |
|||
TOTAL NONCONVERTIBLE BONDS |
121,918 |
|||
TOTAL CORPORATE BONDS (Cost $133,225) |
133,620 |
|||
Floating Rate Loans - 1.5% |
||||
|
||||
CONSUMER DISCRETIONARY - 0.5% |
||||
Diversified Consumer Services - 0.0% |
||||
Thomson Learning, Inc. term loan 2.96% 7/5/14 (f) |
|
2,150 |
1,392 |
|
Media - 0.3% |
||||
Charter Communications Operating LLC Tranche B 1LN, term loan 5.0596% 3/6/14 (f) |
|
9,975 |
7,381 |
|
VNU, Inc. term loan 4.2434% 8/9/13 (f) |
|
11,969 |
8,079 |
|
|
15,460 |
|||
Floating Rate Loans - continued |
||||
|
Principal Amount (000s) |
Value (000s) |
||
CONSUMER DISCRETIONARY - continued |
||||
Multiline Retail - 0.2% |
||||
Dollar General Corp. Tranche B1, term loan 5.2862% 7/6/14 (f) |
|
$ 10,000 |
$ 7,700 |
|
TOTAL CONSUMER DISCRETIONARY |
24,552 |
|||
HEALTH CARE - 0.3% |
||||
Health Care Providers & Services - 0.3% |
||||
Community Health Systems, Inc.: |
|
|
|
|
term loan 4.4454% 7/25/14 (f) |
|
9,704 |
7,472 |
|
Tranche DD, term loan 1.8013% 7/25/14 (f)(g) |
|
496 |
382 |
|
HCA, Inc. Tranche B, term loan 3.7088% 11/17/13 (f) |
|
9,975 |
7,680 |
|
|
15,534 |
|||
INDUSTRIALS - 0.0% |
||||
Trading Companies & Distributors - 0.0% |
||||
VWR Funding, Inc. term loan 2.9613% 6/29/14 (f) |
|
2,620 |
1,651 |
|
INFORMATION TECHNOLOGY - 0.2% |
||||
Electronic Equipment & Components - 0.2% |
||||
Texas Competitive Electric Holdings Co. LLC Tranche B2, term loan 5.6032% 10/10/14 (f) |
|
11,970 |
8,379 |
|
MATERIALS - 0.2% |
||||
Paper & Forest Products - 0.2% |
||||
Georgia-Pacific Corp. Tranche B1, term loan 3.6819% 12/20/12 (f) |
|
9,281 |
7,610 |
|
UTILITIES - 0.3% |
||||
Independent Power Producers & Energy Traders - 0.3% |
||||
Calpine Corp. Tranche D, term loan 4.335% 3/29/14 (f) |
|
14,962 |
11,109 |
|
TOTAL FLOATING RATE LOANS (Cost $72,190) |
68,835 |
Money Market Funds - 3.9% |
|||
Shares |
|
||
Fidelity Cash Central Fund, 1.06% (b) |
117,446,889 |
117,447 |
|
Fidelity Securities Lending Cash Central Fund, 0.87% (b)(c) |
62,029,025 |
62,029 |
|
TOTAL MONEY MARKET FUNDS (Cost $179,476) |
179,476 |
||
Cash Equivalents - 0.0% |
|||
Maturity Amount (000s) |
Value (000s) |
||
Investments in repurchase agreements in a joint trading account at 0.01%, dated 12/31/08 due
1/2/09 (Collateralized by U.S. Treasury Obligations) # |
$ 27 |
$ 27 |
|
TOTAL INVESTMENT PORTFOLIO - 101.0% (Cost $5,504,258) |
4,625,451 |
||
NET OTHER ASSETS - (1.0)% |
(47,909) |
||
NET ASSETS - 100% |
$ 4,577,542 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $35,587,000 or 0.8% of net assets. |
(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(g) Position or a portion of the position represents an unfunded loan commitment. At period end, the total principal amount and market value of unfunded commitments totaled $487,000 and $375,000, respectively. |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty |
Value |
$27,000 due 1/02/09 at 0.01% |
|
BNP Paribas Securities Corp. |
$ 0 |
Banc of America Securities LLC |
3 |
Goldman, Sachs & Co. |
18 |
UBS Securities LLC |
6 |
|
$ 27 |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund |
Income earned |
Fidelity Cash Central Fund |
$ 2,194 |
Fidelity Securities Lending Cash Central Fund |
528 |
Total |
$ 2,722 |
Other Information |
The following is a summary of the inputs used, as of December 31, 2008, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
||||
Description |
Total |
Level 1 |
Level 2 |
Level 3 |
Investments in Securities |
$ 4,625,451 |
$ 4,296,199 |
$ 303,299 |
$ 25,953 |
The following is a reconciliation of assets for which Level 3 inputs were used in determining value: |
|
Investments in Securities |
Beginning Balance |
$ 0 |
Total Realized Gain (Loss) |
(4,801) |
Total Unrealized Gain (Loss) |
(17,817) |
Cost of Purchases |
31,849 |
Proceeds of Sales |
(4,448) |
Amortization/Accretion |
0 |
Transfer in/out of Level 3 |
21,170 |
Ending Balance |
$ 25,953 |
The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands (except per-share amounts) |
December 31, 2008 (Unaudited) |
|
|
|
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $61,408 and repurchase agreements of $27) - See accompanying schedule: Unaffiliated issuers (cost $5,324,782) |
$ 4,445,975 |
|
Fidelity Central Funds (cost $179,476) |
179,476 |
|
Total Investments (cost $5,504,258) |
|
$ 4,625,451 |
Cash |
|
740 |
Receivable for investments sold |
|
13,431 |
Receivable for fund shares sold |
|
9,061 |
Dividends receivable |
|
7,846 |
Interest receivable |
|
3,767 |
Distributions receivable from Fidelity Central Funds |
|
229 |
Prepaid expenses |
|
60 |
Other receivables |
|
147 |
Total assets |
|
4,660,732 |
|
|
|
Liabilities |
|
|
Payable for investments purchased |
$ 11,680 |
|
Payable for fund shares redeemed |
6,842 |
|
Accrued management fee |
1,321 |
|
Other affiliated payables |
1,120 |
|
Other payables and accrued expenses |
198 |
|
Collateral on securities loaned, at value |
62,029 |
|
Total liabilities |
|
83,190 |
|
|
|
Net Assets |
|
$ 4,577,542 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 6,297,977 |
Undistributed net investment income |
|
1,322 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(842,963) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
(878,794) |
Net Assets |
|
$ 4,577,542 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands (except per-share amounts) |
December 31, 2008 (Unaudited) |
|
|
|
|
Fidelity: |
|
$ 22.76 |
|
|
|
Class K: |
|
$ 22.76 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Amounts in thousands |
Six months ended December 31, 2008 (Unaudited) |
|
|
|
|
Investment Income |
|
|
Dividends |
|
$ 54,164 |
Interest |
|
4,495 |
Income from Fidelity Central Funds |
|
2,722 |
Total income |
|
61,381 |
|
|
|
Expenses |
|
|
Management fee |
$ 9,999 |
|
Transfer agent fees |
6,317 |
|
Accounting and security lending fees |
564 |
|
Custodian fees and expenses |
73 |
|
Independent trustees' compensation |
13 |
|
Registration fees |
66 |
|
Audit |
47 |
|
Legal |
37 |
|
Miscellaneous |
284 |
|
Total expenses before reductions |
17,400 |
|
Expense reductions |
(42) |
17,358 |
Net investment income (loss) |
|
44,023 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities: |
|
|
Unaffiliated issuers |
(810,606) |
|
Foreign currency transactions |
(320) |
|
Total net realized gain (loss) |
|
(810,926) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(1,610,497) |
|
Assets and liabilities in foreign currencies |
7 |
|
Total change in net unrealized appreciation (depreciation) |
|
(1,610,490) |
Net gain (loss) |
|
(2,421,416) |
Net increase (decrease) in net assets resulting from operations |
|
$ (2,377,393) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands |
Six months ended December 31, 2008 (Unaudited) |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 44,023 |
$ 72,684 |
Net realized gain (loss) |
(810,926) |
467,755 |
Change in net unrealized appreciation (depreciation) |
(1,610,490) |
(825,272) |
Net increase (decrease) in net assets resulting |
(2,377,393) |
(284,833) |
Distributions to shareholders from net investment income |
(61,882) |
(72,940) |
Distributions to shareholders from net realized gain |
(199,008) |
(310,354) |
Total distributions |
(260,890) |
(383,294) |
Share transactions - net increase (decrease) |
42,156 |
423,387 |
Total increase (decrease) in net assets |
(2,596,127) |
(244,740) |
|
|
|
Net Assets |
|
|
Beginning of period |
7,173,669 |
7,418,409 |
End of period (including undistributed net investment income of $1,322 and undistributed net investment income of $19,181, respectively) |
$ 4,577,542 |
$ 7,173,669 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months endedDecember 31, 2008 |
Years ended June 30, |
||||
|
(Unaudited) |
2008 |
2007 |
2006 |
2005 |
2004 |
Selected Per-Share Data |
|
|
|
|
||
Net asset value, beginning of period |
$ 35.69 |
$ 38.98 |
$ 32.55 |
$ 29.74 |
$ 28.81 |
$ 24.46 |
Income from Investment |
|
|
|
|
|
|
Net investment income (loss)D |
.22 |
.37 |
.30 |
.28 |
.44 G |
.24 |
Net realized and unrealized gain (loss) |
(11.85) |
(1.65) |
6.45 |
2.80 |
.87 |
4.35 |
Total from investment operations |
(11.63) |
(1.28) |
6.75 |
3.08 |
1.31 |
4.59 |
Distributions from net investment income |
(.31) |
(.38) |
(.32) |
(.27) |
(.38) |
(.24) |
Distributions from net realized gain |
(.99) |
(1.63) |
- |
- |
- |
- |
Total distributions |
(1.30) |
(2.01) |
(.32) |
(.27) |
(.38) |
(.24) |
Net asset value, end of period |
$ 22.76 |
$ 35.69 |
$ 38.98 |
$ 32.55 |
$ 29.74 |
$ 28.81 |
Total Return B,C |
(33.58)% |
(3.73)% |
20.86% |
10.40% |
4.58% |
18.81% |
Ratios to Average Net Assets E,H |
|
|
|
|
||
Expenses before reductions |
.61% A |
.56% |
.57% |
.59% |
.60% |
.61% |
Expenses net of fee waivers, if any |
.61% A |
.56% |
.57% |
.59% |
.60% |
.61% |
Expenses net of all reductions |
.61% A |
.55% |
.56% |
.56% |
.57% |
.59% |
Net investment income (loss) |
1.55% A |
.98% |
.86% |
.87% |
1.52% G |
.89% |
Supplemental Data |
|
|
|
|
||
Net assets, end of period (in millions) |
$ 4,398 |
$ 7,174 |
$ 7,418 |
$ 8,284 |
$ 10,178 |
$ 10,499 |
Portfolio turnover rate F |
84% A |
80% |
50% |
72% |
74% |
53% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.12 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.09%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Period ended
|
|
(Unaudited) |
2008 G |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 35.70 |
$ 37.54 |
Income from Investment Operations |
|
|
Net investment income (loss) D |
.20 |
.05 |
Net realized and unrealized gain (loss) |
(11.81) |
(1.89) |
Total from investment operations |
(11.61) |
(1.84) |
Distributions from net investment income |
(.34) |
- |
Distributions from net realized gain |
(.99) |
- |
Total distributions |
(1.33) |
- |
Net asset value, end of period |
$ 22.76 |
$ 35.70 |
Total Return B,C |
(33.50)% |
(4.90)% |
Ratios to Average Net Assets E,H |
|
|
Expenses before reductions |
.44% A |
.43% A |
Expenses net of fee waivers, if any |
.44% A |
.43% A |
Expenses net of all reductions |
.44% A |
.43% A |
Net investment income (loss) |
1.72% A |
1.00% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 179,248 |
$ 95 |
Portfolio turnover rate F |
84% A |
80% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period May 9, 2008 (commencement of sale of shares) to June 30, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
For the period ended December 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. After the commencement of Class K, the Fund began offering conversion privileges between Fidelity Fund and Class K to eligible shareholders of Fidelity Fund. The Fund offers Fidelity Fund and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 |
Quoted prices in active markets for identical securities. |
Level 2 |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of December 31, 2008, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation and losses deferred due to wash sales.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation |
$ 261,012 |
Unrealized depreciation |
(1,167,455) |
Net unrealized appreciation (depreciation) |
$ (906,443) |
Cost for federal income tax purposes |
$ 5,531,894 |
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments, including revolving credit facilities, that obligate the Fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. The Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these investments.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $2,485,570 and $2,384,746, respectively.
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .09% of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .35% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Fidelity Fund. FIIOC receives an asset-based fee of .05% of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
|
Amount |
% of |
Fidelity Fund |
6,306 |
.22 |
Class K |
11 |
.05 |
|
$ 6,317 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $20 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $7
Semiannual Report
7. Committed Line of Credit - continued
and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $528.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $20 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $1. During the period, credits reduced each class' transfer agent expense as noted in the table below.
|
Transfer Agent |
Fidelity Fund |
$ 21 |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
10. Other - continued
enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
|
Six months ended |
Year ended |
From net investment income |
|
|
Fidelity Fund |
$ 60,642 |
$ 72,940 |
Class K |
1,240 |
- |
Total |
$ 61,882 |
$ 72,940 |
From net realized gain |
|
|
Fidelity Fund |
$ 199,005 |
$ 310,354 |
Class K |
3 |
- |
Total |
$ 199,008 |
$ 310,354 |
12. Share Transactions.
Transactions for each class of shares were as follows:
|
Shares |
Dollars |
||
|
Six months ended |
Year ended |
Six months ended |
Year ended |
Fidelity Fund |
|
|
|
|
Shares sold |
16,727 |
34,776 |
$ 453,465 |
$ 1,322,511 |
Conversion to Class K |
(8,944) |
- |
(220,404) |
- |
Reinvestment of distributions |
7,748 |
9,112 |
244,485 |
359,856 |
Shares redeemed |
(23,301) |
(33,213) |
(629,681) |
(1,259,080) |
Net increase (decrease) |
(7,770) |
10,675 |
$ (152,135) |
$ 423,287 |
Class K |
|
|
|
|
Shares sold |
185 |
3 |
$ 4,357 |
$ 100 |
Conversion from Fidelity Fund |
8,941 |
- |
220,404 |
- |
Reinvestment of distributions |
54 |
- |
1,243 |
- |
Shares redeemed |
(1,306) |
- |
(31,713) |
- |
Net increase (decrease) |
7,874 |
3 |
$ 194,291 |
$ 100 |
A Share transactions for Class K are for the period May 9, 2008 to June 30, 2008.
Semiannual Report
Fidelity Fund
Each year, typically in July, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly and, acting directly and through its separate committees, requests and receives information concerning, and considers at each of its meetings factors that are relevant to, its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. Each committee has a written charter outlining the structure and purposes of the committee. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.
At its July 2008 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders. The Board also approved agreements with foreign sub-advisers Fidelity Management & Research (Japan) Inc. and Fidelity Management & Research (Hong Kong) Limited, as well as amendments to the fund's agreement with Fidelity Management & Research (U.K.) Inc.
In considering whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund's shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Semiannual Report
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the backgrounds of the fund's investment personnel and the fund's investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services. The Board further considered that Fidelity voluntarily pays for market data out of its own resources.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge. The Board noted that Fidelity has taken a number of actions over the previous year that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) contractually agreeing to reduce the management fees on Fidelity's Institutional Money Market Funds and launching Class IV and Institutional Class of certain of these funds; (iii) reducing the transfer agent fees for the Fidelity Select Portfolios and Investor Class of the VIP funds; and (iv) launching Class K of 29 equity funds as a lower-fee class available to certain employer-sponsored retirement plans.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund's absolute investment performance, as well as the fund's relative investment performance measured against (i) a broad-based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one-, three-, and five-year periods ended December 31, 2007, the fund's cumulative total returns, the cumulative total returns of a broad-based securities market index ("benchmark"), and a range of cumulative total returns of a peer group of mutual funds identified by Morningstar, Inc. as having an investment style similar to that of the fund based on underlying portfolio holdings. (The fund did not offer Class K as of December 31, 2007.) The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the peer group whose performance was equal to or lower than that of the fund.
Semiannual Report
Fidelity Fund
The Board reviewed the fund's relative investment performance against its peer group and stated that the performance of the fund was in the first quartile for all the periods shown. The Board also stated that the investment performance of the fund compared favorably to its benchmark for all the periods shown.
The Board considered that FMR has taken steps to refocus and strengthen equity research, equity portfolio management, and compliance.
Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's management fee and total expenses compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board's management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared. The Board also considered supplemental information about how the fund's management fee and total expenses ranked relative to groups based on Lipper classifications, which take into account a fund's market capitalization and style.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a TMG % of 5% means that 95% of the funds in the Total Mapped Group had higher management fees than the fund. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to non-Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee ranked, is also included in the chart and considered by the Board.
Fidelity Fund
The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2007.
Based on its review, the Board concluded that the fund's management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
In its review of the fund's total expenses, the Board considered the fund's management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered current and historical total expenses of the fund compared to competitive fund median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
Semiannual Report
The Board noted that the fund's total expenses ranked below its competitive median for 2007.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund's total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of the results of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of Fidelity's methodologies used in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board has also reviewed Fidelity's non-fund businesses and any fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including (i) fund performance trends and actions to be taken by FMR to improve certain funds' overall performance; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability and the extent to which portfolio manager compensation is linked to fund performance; (v) Fidelity's fee structures and rationale for recommending different fees among categories of funds; and (vi) Fidelity's rationale for recommending which funds should have a performance adjustment component as part of their management fees.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Semiannual Report
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
15445 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
2000 Avenue of the Stars
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
123 South Lake Avenue
Pasadena, CA
16656 Bernardo Ctr. Drive
Rancho Bernardo, CA
1220 Roseville Parkway
Roseville, CA
1740 Arden Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
11943 El Camino Real
San Diego, CA
8 Montgomery Street
San Francisco, CA
3793 State Street
Santa Barbara, CA
1200 Wilshire Boulevard
Santa Monica, CA
398 West El Camino Real
Sunnyvale, CA
111 South Westlake Blvd
Thousand Oaks, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6326 Canoga Avenue
Woodland Hills, CA
Colorado
281 East Flatiron Circle
Broomfield, CO
1625 Broadway
Denver, CO
9185 Westview Road
Lone Tree, CO
Connecticut
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
Delaware
400 Delaware Avenue
Wilmington, DE
Florida
175 East Altamonte Drive
Altamonte Springs, FL
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
4671 Town Center Parkway
Jacksonville, FL
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
Palm Beach, FL
3501 PGA Boulevard
Palm Beach Gardens, FL
3550 Tamiami Trail, South
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
2465 State Road 7
Wellington, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7315 Wisconsin Avenue
Bethesda, MD
610 York Road
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
Novi, MI
Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
Scarsdale, NY
North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
Columbus, OH
1800 Crocker Road
Westlake, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
Investment Adviser
Fidelity Management &
Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
FIL Investment Advisors
FIL Investment Advisors
(U.K.) Ltd.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Northern Trust Company
Chicago, IL
FID-USAN-0209 1.787780.105
Fidelity®
Fund -
Class K
Semiannual Report
December 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Chairman's Message |
Ned Johnson's message to shareholders. |
|
Shareholder Expense Example |
An example of shareholder expenses. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
|
Notes |
Notes to the financial statements. |
|
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
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.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
An all-out credit crisis gripped the world's capital markets in 2008, stunting economic growth, toppling commodity prices and pushing equity markets into their steepest declines in decades. Within this ultra-risk-averse climate, virtually the only positive results came from the relative security of U.S. government-backed assets. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2008 to December 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Semiannual Report
|
Annualized |
Beginning |
Ending |
Expenses Paid |
Fidelity Fund |
.61% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 664.20 |
$ 2.56 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,022.13 |
$ 3.11 |
Class K |
.44% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 665.00 |
$ 1.85 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,022.99 |
$ 2.24 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Top Ten Stocks as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Exxon Mobil Corp. |
4.5 |
2.2 |
Wells Fargo & Co. |
2.5 |
0.6 |
Wal-Mart Stores, Inc. |
2.5 |
1.7 |
Procter & Gamble Co. |
2.3 |
0.9 |
Johnson & Johnson |
2.1 |
0.4 |
Wyeth |
2.0 |
1.7 |
General Electric Co. |
1.9 |
0.0 |
Cisco Systems, Inc. |
1.6 |
1.3 |
Chevron Corp. |
1.5 |
1.0 |
Philip Morris International, Inc. |
1.4 |
0.8 |
|
22.3 |
|
Top Five Market Sectors as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Health Care |
15.0 |
10.2 |
Information Technology |
14.7 |
17.1 |
Financials |
13.8 |
12.0 |
Consumer Discretionary |
11.4 |
6.9 |
Consumer Staples |
11.1 |
7.9 |
Asset Allocation (% of fund's net assets) |
|||||||
As of December 31, 2008 * |
As of June 30, 2008 ** |
||||||
Stocks 92.7% |
|
Stocks 93.8% |
|
||||
Bonds 2.7% |
|
Bonds 0.0% |
|
||||
Convertible |
|
Convertible |
|
||||
Other Investments 1.5% |
|
Other Investments 0.0% |
|
||||
Short-Term |
|
Short-Term |
|
||||
* Foreign investments |
7.5% |
|
** Foreign investments |
14.3% |
|
Semiannual Report
Showing Percentage of Net Assets
Common Stocks - 92.7% |
|||
Shares |
Value (000s) |
||
CONSUMER DISCRETIONARY - 10.3% |
|||
Auto Components - 0.2% |
|||
The Goodyear Tire & Rubber Co. (a) |
1,155,200 |
$ 6,897 |
|
Diversified Consumer Services - 0.3% |
|||
Brinks Home Security Holdings, Inc. (a) |
580,900 |
12,733 |
|
Hotels, Restaurants & Leisure - 1.4% |
|||
Burger King Holdings, Inc. |
421,700 |
10,070 |
|
Carnival Corp. unit |
135,800 |
3,303 |
|
Marriott International, Inc. Class A |
264,000 |
5,135 |
|
McDonald's Corp. |
559,000 |
34,764 |
|
Royal Caribbean Cruises Ltd. |
453,100 |
6,230 |
|
Starwood Hotels & Resorts Worldwide, Inc. |
268,500 |
4,806 |
|
|
64,308 |
||
Household Durables - 1.7% |
|||
Lennar Corp. Class A (d) |
666,800 |
5,781 |
|
Mohawk Industries, Inc. (a) |
419,300 |
18,017 |
|
Pulte Homes, Inc. (d) |
1,854,500 |
20,270 |
|
Whirlpool Corp. (d) |
784,200 |
32,427 |
|
|
76,495 |
||
Internet & Catalog Retail - 0.2% |
|||
Amazon.com, Inc. (a) |
178,000 |
9,128 |
|
Media - 2.4% |
|||
Comcast Corp. Class A |
1,621,200 |
27,366 |
|
McGraw-Hill Companies, Inc. |
851,900 |
19,756 |
|
The Walt Disney Co. |
1,490,100 |
33,810 |
|
Time Warner, Inc. |
3,038,200 |
30,564 |
|
|
111,496 |
||
Multiline Retail - 0.3% |
|||
Target Corp. |
352,900 |
12,186 |
|
Specialty Retail - 3.0% |
|||
AutoZone, Inc. (a) |
114,800 |
16,011 |
|
Best Buy Co., Inc. |
798,300 |
22,440 |
|
Home Depot, Inc. |
391,300 |
9,008 |
|
Lowe's Companies, Inc. |
2,101,800 |
45,231 |
|
PetSmart, Inc. |
434,451 |
8,016 |
|
Staples, Inc. |
2,077,350 |
37,226 |
|
|
137,932 |
||
Textiles, Apparel & Luxury Goods - 0.8% |
|||
Polo Ralph Lauren Corp. Class A |
845,273 |
38,384 |
|
TOTAL CONSUMER DISCRETIONARY |
469,559 |
||
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
CONSUMER STAPLES - 11.0% |
|||
Beverages - 1.8% |
|||
PepsiCo, Inc. |
890,690 |
$ 48,783 |
|
The Coca-Cola Co. |
779,200 |
35,274 |
|
|
84,057 |
||
Food & Staples Retailing - 3.5% |
|||
Costco Wholesale Corp. |
455,200 |
23,898 |
|
CVS Caremark Corp. |
842,000 |
24,199 |
|
Wal-Mart Stores, Inc. |
1,999,300 |
112,081 |
|
|
160,178 |
||
Food Products - 1.6% |
|||
Kellogg Co. |
431,300 |
18,913 |
|
Lindt & Spruengli AG (participation certificate) |
8,459 |
15,791 |
|
Nestle SA (Reg.) |
969,724 |
38,311 |
|
|
73,015 |
||
Household Products - 2.3% |
|||
Procter & Gamble Co. |
1,719,544 |
106,302 |
|
Tobacco - 1.8% |
|||
British American Tobacco PLC sponsored ADR |
291,700 |
15,443 |
|
Philip Morris International, Inc. |
1,504,100 |
65,443 |
|
|
80,886 |
||
TOTAL CONSUMER STAPLES |
504,438 |
||
ENERGY - 10.4% |
|||
Energy Equipment & Services - 0.7% |
|||
Schlumberger Ltd. (NY Shares) |
547,000 |
23,155 |
|
Transocean Ltd. (a) |
203,933 |
9,636 |
|
|
32,791 |
||
Oil, Gas & Consumable Fuels - 9.7% |
|||
Canadian Natural Resources Ltd. |
340,100 |
13,627 |
|
Chesapeake Energy Corp. |
732,300 |
11,841 |
|
Chevron Corp. |
931,400 |
68,896 |
|
ConocoPhillips |
632,500 |
32,764 |
|
Denbury Resources, Inc. (a) |
621,700 |
6,789 |
|
Devon Energy Corp. |
169,800 |
11,158 |
|
Exxon Mobil Corp. |
2,592,000 |
206,921 |
|
Hess Corp. |
254,900 |
13,673 |
|
Occidental Petroleum Corp. |
779,800 |
46,780 |
|
Range Resources Corp. |
112,300 |
3,862 |
|
Ultra Petroleum Corp. (a) |
251,479 |
8,679 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
ENERGY - continued |
|||
Oil, Gas & Consumable Fuels - continued |
|||
Valero Energy Corp. |
308,500 |
$ 6,676 |
|
Williams Companies, Inc. |
823,700 |
11,927 |
|
|
443,593 |
||
TOTAL ENERGY |
476,384 |
||
FINANCIALS - 13.8% |
|||
Capital Markets - 4.0% |
|||
Bank of New York Mellon Corp. |
1,209,800 |
34,274 |
|
Charles Schwab Corp. |
857,900 |
13,872 |
|
Goldman Sachs Group, Inc. |
357,000 |
30,127 |
|
Julius Baer Holding Ltd. |
316,215 |
12,227 |
|
Lazard Ltd. Class A |
514,500 |
15,301 |
|
Morgan Stanley |
615,300 |
9,869 |
|
State Street Corp. |
1,152,500 |
45,328 |
|
T. Rowe Price Group, Inc. |
597,200 |
21,165 |
|
|
182,163 |
||
Commercial Banks - 4.5% |
|||
Banco Itau Holding Financeira SA sponsored ADR (non-vtg.) (d) |
696,600 |
8,081 |
|
First Horizon National Corp. (d) |
1,113,587 |
11,771 |
|
PNC Financial Services Group, Inc. |
431,300 |
21,134 |
|
Sumitomo Mitsui Financial Group, Inc. |
5,761 |
25,953 |
|
U.S. Bancorp, Delaware |
1,063,600 |
26,601 |
|
Wells Fargo & Co. |
3,882,200 |
114,447 |
|
|
207,987 |
||
Consumer Finance - 0.6% |
|||
American Express Co. |
643,192 |
11,931 |
|
Capital One Financial Corp. |
500,500 |
15,961 |
|
|
27,892 |
||
Diversified Financial Services - 3.6% |
|||
Bank of America Corp. |
4,134,765 |
58,217 |
|
Citigroup, Inc. |
6,019,000 |
40,387 |
|
JPMorgan Chase & Co. |
2,034,200 |
64,138 |
|
|
162,742 |
||
Insurance - 0.9% |
|||
AFLAC, Inc. |
351,100 |
16,094 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
FINANCIALS - continued |
|||
Insurance - continued |
|||
Berkshire Hathaway, Inc. Class A (a) |
131 |
$ 12,655 |
|
MetLife, Inc. |
284,100 |
9,904 |
|
|
38,653 |
||
Thrifts & Mortgage Finance - 0.2% |
|||
Hudson City Bancorp, Inc. |
683,800 |
10,913 |
|
TOTAL FINANCIALS |
630,350 |
||
HEALTH CARE - 14.3% |
|||
Biotechnology - 4.6% |
|||
Amgen, Inc. (a) |
954,200 |
55,105 |
|
Cephalon, Inc. (a) |
267,200 |
20,585 |
|
CSL Ltd. |
929,520 |
22,358 |
|
Genentech, Inc. (a) |
784,700 |
65,059 |
|
Gilead Sciences, Inc. (a) |
919,000 |
46,998 |
|
|
210,105 |
||
Health Care Equipment & Supplies - 2.6% |
|||
C.R. Bard, Inc. |
561,900 |
47,346 |
|
Covidien Ltd. |
1,106,300 |
40,092 |
|
St. Jude Medical, Inc. (a) |
923,000 |
30,422 |
|
|
117,860 |
||
Health Care Providers & Services - 1.0% |
|||
Medco Health Solutions, Inc. (a) |
1,092,900 |
45,803 |
|
Pharmaceuticals - 6.1% |
|||
Abbott Laboratories |
930,600 |
49,666 |
|
Allergan, Inc. |
181,000 |
7,298 |
|
Elan Corp. PLC sponsored ADR (a) |
1,954,296 |
11,726 |
|
Johnson & Johnson |
1,641,200 |
98,193 |
|
Merck & Co., Inc. |
691,700 |
21,028 |
|
Wyeth |
2,446,240 |
91,758 |
|
|
279,669 |
||
TOTAL HEALTH CARE |
653,437 |
||
INDUSTRIALS - 10.4% |
|||
Aerospace & Defense - 3.1% |
|||
General Dynamics Corp. |
474,900 |
27,349 |
|
Honeywell International, Inc. |
685,800 |
22,515 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
INDUSTRIALS - continued |
|||
Aerospace & Defense - continued |
|||
Lockheed Martin Corp. |
754,230 |
$ 63,416 |
|
Raytheon Co. |
530,800 |
27,092 |
|
|
140,372 |
||
Air Freight & Logistics - 0.8% |
|||
United Parcel Service, Inc. Class B |
633,500 |
34,944 |
|
Building Products - 0.4% |
|||
Masco Corp. |
1,904,700 |
21,199 |
|
Commercial Services & Supplies - 0.7% |
|||
Stericycle, Inc. (a) |
298,100 |
15,525 |
|
The Brink's Co. |
580,900 |
15,615 |
|
|
31,140 |
||
Construction & Engineering - 0.6% |
|||
Quanta Services, Inc. (a)(d) |
1,247,000 |
24,691 |
|
Shaw Group, Inc. (a) |
99,188 |
2,030 |
|
|
26,721 |
||
Electrical Equipment - 0.2% |
|||
Cooper Industries Ltd. Class A |
384,700 |
11,245 |
|
Industrial Conglomerates - 1.9% |
|||
General Electric Co. |
5,473,400 |
88,669 |
|
Machinery - 1.7% |
|||
Briggs & Stratton Corp. |
251,400 |
4,422 |
|
Cummins, Inc. |
541,600 |
14,477 |
|
Danaher Corp. |
304,900 |
17,260 |
|
Deere & Co. |
253,200 |
9,703 |
|
Illinois Tool Works, Inc. |
476,100 |
16,687 |
|
Navistar International Corp. (a) |
296,800 |
6,346 |
|
PACCAR, Inc. |
307,000 |
8,780 |
|
Sulzer AG (Reg.) |
22,036 |
1,269 |
|
|
78,944 |
||
Professional Services - 0.3% |
|||
Manpower, Inc. |
344,900 |
11,723 |
|
Monster Worldwide, Inc. (a) |
113,200 |
1,369 |
|
|
13,092 |
||
Road & Rail - 0.4% |
|||
Union Pacific Corp. |
352,600 |
16,854 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
INDUSTRIALS - continued |
|||
Trading Companies & Distributors - 0.3% |
|||
GATX Corp. |
471,800 |
$ 14,612 |
|
TOTAL INDUSTRIALS |
477,792 |
||
INFORMATION TECHNOLOGY - 14.2% |
|||
Communications Equipment - 2.6% |
|||
Cisco Systems, Inc. (a) |
4,457,676 |
72,660 |
|
QUALCOMM, Inc. |
1,348,100 |
48,302 |
|
|
120,962 |
||
Computers & Peripherals - 3.0% |
|||
Apple, Inc. (a) |
489,000 |
41,736 |
|
Hewlett-Packard Co. |
1,544,000 |
56,032 |
|
International Business Machines Corp. |
381,400 |
32,099 |
|
NCR Corp. (a) |
574,621 |
8,125 |
|
|
137,992 |
||
Electronic Equipment & Components - 1.2% |
|||
Amphenol Corp. Class A |
1,541,138 |
36,956 |
|
Arrow Electronics, Inc. (a) |
815,100 |
15,356 |
|
|
52,312 |
||
Internet Software & Services - 0.7% |
|||
Google, Inc. Class A (sub. vtg.) (a) |
110,485 |
33,991 |
|
IT Services - 1.0% |
|||
Cognizant Technology Solutions Corp. Class A (a) |
479,900 |
8,667 |
|
Visa, Inc. |
715,800 |
37,544 |
|
|
46,211 |
||
Semiconductors & Semiconductor Equipment - 3.7% |
|||
Applied Materials, Inc. |
3,976,400 |
40,281 |
|
Intel Corp. |
2,871,200 |
42,092 |
|
KLA-Tencor Corp. |
392,500 |
8,553 |
|
Lam Research Corp. (a) |
754,200 |
16,049 |
|
MEMC Electronic Materials, Inc. (a) |
394,500 |
5,633 |
|
Skyworks Solutions, Inc. (a) |
1,040,534 |
5,765 |
|
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR |
2,627,586 |
20,758 |
|
Texas Instruments, Inc. |
1,135,400 |
17,621 |
|
Xilinx, Inc. |
665,300 |
11,856 |
|
|
168,608 |
||
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
INFORMATION TECHNOLOGY - continued |
|||
Software - 2.0% |
|||
Microsoft Corp. |
2,444,800 |
$ 47,527 |
|
Oracle Corp. (a) |
2,444,600 |
43,343 |
|
|
90,870 |
||
TOTAL INFORMATION TECHNOLOGY |
650,946 |
||
MATERIALS - 4.0% |
|||
Chemicals - 3.0% |
|||
Albemarle Corp. |
452,100 |
10,082 |
|
E.I. du Pont de Nemours & Co. |
639,800 |
16,187 |
|
Ecolab, Inc. |
240,800 |
8,464 |
|
FMC Corp. |
583,500 |
26,100 |
|
Monsanto Co. |
863,267 |
60,731 |
|
Praxair, Inc. |
185,622 |
11,019 |
|
Solutia, Inc. (a) |
900,000 |
4,050 |
|
|
136,633 |
||
Construction Materials - 0.4% |
|||
Vulcan Materials Co. (d) |
260,300 |
18,112 |
|
Containers & Packaging - 0.1% |
|||
Sealed Air Corp. |
141,700 |
2,117 |
|
Metals & Mining - 0.5% |
|||
Goldcorp, Inc. |
442,100 |
13,949 |
|
Newcrest Mining Ltd. |
447,353 |
10,861 |
|
|
24,810 |
||
TOTAL MATERIALS |
181,672 |
||
TELECOMMUNICATION SERVICES - 2.6% |
|||
Diversified Telecommunication Services - 2.4% |
|||
AT&T, Inc. |
2,060,395 |
58,721 |
|
Verizon Communications, Inc. |
1,459,100 |
49,463 |
|
|
108,184 |
||
Wireless Telecommunication Services - 0.2% |
|||
American Tower Corp. Class A (a) |
381,900 |
11,197 |
|
TOTAL TELECOMMUNICATION SERVICES |
119,381 |
||
UTILITIES - 1.7% |
|||
Electric Utilities - 1.5% |
|||
Entergy Corp. |
328,900 |
27,341 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
UTILITIES - continued |
|||
Electric Utilities - continued |
|||
Exelon Corp. |
488,800 |
$ 27,182 |
|
FirstEnergy Corp. |
279,800 |
13,593 |
|
|
68,116 |
||
Independent Power Producers & Energy Traders - 0.2% |
|||
NRG Energy, Inc. (a) |
489,400 |
11,418 |
|
TOTAL UTILITIES |
79,534 |
||
TOTAL COMMON STOCKS (Cost $5,119,340) |
4,243,493 |
Corporate Bonds - 2.9% |
||||
|
Principal Amount (000s) |
|
||
Convertible Bonds - 0.2% |
||||
ENERGY - 0.2% |
||||
Oil, Gas & Consumable Fuels - 0.2% |
||||
Chesapeake Energy Corp. 2.5% 5/15/37 |
|
$ 19,400 |
11,702 |
|
Nonconvertible Bonds - 2.7% |
||||
CONSUMER DISCRETIONARY - 0.6% |
||||
Hotels, Restaurants & Leisure - 0.2% |
||||
MGM Mirage, Inc.: |
|
|
|
|
5.875% 2/27/14 |
|
12,000 |
7,530 |
|
13% 11/15/13 (e) |
|
3,810 |
3,648 |
|
|
11,178 |
|||
Media - 0.3% |
||||
Charter Communications Operating LLC/Charter Communications Operating Capital Corp. 8.375% 4/30/14 (e) |
|
10,000 |
7,550 |
|
TL Acquisitions, Inc. 10.5% 1/15/15 (e) |
|
10,000 |
4,200 |
|
|
11,750 |
|||
Specialty Retail - 0.1% |
||||
Sally Holdings LLC 9.25% 11/15/14 |
|
5,000 |
4,100 |
|
TOTAL CONSUMER DISCRETIONARY |
27,028 |
|||
Corporate Bonds - continued |
||||
|
Principal Amount (000s) |
Value (000s) |
||
Nonconvertible Bonds - continued |
||||
CONSUMER STAPLES - 0.1% |
||||
Beverages - 0.1% |
||||
Constellation Brands, Inc.: |
|
|
|
|
7.25% 9/1/16 |
|
$ 4,905 |
$ 4,635 |
|
7.25% 5/15/17 |
|
1,225 |
1,158 |
|
|
5,793 |
|||
ENERGY - 0.1% |
||||
Oil, Gas & Consumable Fuels - 0.1% |
||||
Chesapeake Energy Corp.: |
|
|
|
|
6.5% 8/15/17 |
|
4,655 |
3,584 |
|
6.625% 1/15/16 |
|
355 |
280 |
|
6.875% 1/15/16 |
|
2,425 |
1,964 |
|
|
5,828 |
|||
FINANCIALS - 0.0% |
||||
Real Estate Investment Trusts - 0.0% |
||||
Rouse Co. 5.375% 11/26/13 |
|
190 |
60 |
|
HEALTH CARE - 0.4% |
||||
Health Care Providers & Services - 0.4% |
||||
HCA, Inc. 9.25% 11/15/16 |
|
10,000 |
9,150 |
|
Tenet Healthcare Corp. 9.875% 7/1/14 |
|
10,000 |
8,050 |
|
|
17,200 |
|||
INDUSTRIALS - 0.4% |
||||
Building Products - 0.1% |
||||
Nortek, Inc. 10% 12/1/13 |
|
10,000 |
6,850 |
|
Commercial Services & Supplies - 0.2% |
||||
ARAMARK Corp. 8.5% 2/1/15 |
|
10,000 |
8,900 |
|
Trading Companies & Distributors - 0.1% |
||||
VWR Funding, Inc. 10.25% 7/15/15 |
|
5,000 |
2,850 |
|
TOTAL INDUSTRIALS |
18,600 |
|||
INFORMATION TECHNOLOGY - 0.3% |
||||
Electronic Equipment & Components - 0.1% |
||||
Texas Competitive Electric Holdings Co. LLC Series A, 10.25% 11/1/15 (e) |
|
9,335 |
6,464 |
|
Corporate Bonds - continued |
||||
|
Principal Amount (000s) |
Value (000s) |
||
Nonconvertible Bonds - continued |
||||
INFORMATION TECHNOLOGY - continued |
||||
IT Services - 0.2% |
||||
SunGard Data Systems, Inc. 9.125% 8/15/13 |
|
$ 10,000 |
$ 8,300 |
|
TOTAL INFORMATION TECHNOLOGY |
14,764 |
|||
MATERIALS - 0.2% |
||||
Metals & Mining - 0.2% |
||||
Freeport-McMoRan Copper & Gold, Inc. 8.375% 4/1/17 |
|
10,000 |
8,050 |
|
TELECOMMUNICATION SERVICES - 0.6% |
||||
Diversified Telecommunication Services - 0.1% |
||||
Level 3 Financing, Inc. 9.25% 11/1/14 |
|
5,235 |
2,670 |
|
Wireless Telecommunication Services - 0.5% |
||||
Cricket Communications, Inc. 9.375% 11/1/14 |
|
10,000 |
8,200 |
|
Intelsat Jackson Holdings Ltd. 9.5% 6/15/16 (e) |
|
15,000 |
13,725 |
|
|
21,925 |
|||
TOTAL TELECOMMUNICATION SERVICES |
24,595 |
|||
TOTAL NONCONVERTIBLE BONDS |
121,918 |
|||
TOTAL CORPORATE BONDS (Cost $133,225) |
133,620 |
|||
Floating Rate Loans - 1.5% |
||||
|
||||
CONSUMER DISCRETIONARY - 0.5% |
||||
Diversified Consumer Services - 0.0% |
||||
Thomson Learning, Inc. term loan 2.96% 7/5/14 (f) |
|
2,150 |
1,392 |
|
Media - 0.3% |
||||
Charter Communications Operating LLC Tranche B 1LN, term loan 5.0596% 3/6/14 (f) |
|
9,975 |
7,381 |
|
VNU, Inc. term loan 4.2434% 8/9/13 (f) |
|
11,969 |
8,079 |
|
|
15,460 |
|||
Floating Rate Loans - continued |
||||
|
Principal Amount (000s) |
Value (000s) |
||
CONSUMER DISCRETIONARY - continued |
||||
Multiline Retail - 0.2% |
||||
Dollar General Corp. Tranche B1, term loan 5.2862% 7/6/14 (f) |
|
$ 10,000 |
$ 7,700 |
|
TOTAL CONSUMER DISCRETIONARY |
24,552 |
|||
HEALTH CARE - 0.3% |
||||
Health Care Providers & Services - 0.3% |
||||
Community Health Systems, Inc.: |
|
|
|
|
term loan 4.4454% 7/25/14 (f) |
|
9,704 |
7,472 |
|
Tranche DD, term loan 1.8013% 7/25/14 (f)(g) |
|
496 |
382 |
|
HCA, Inc. Tranche B, term loan 3.7088% 11/17/13 (f) |
|
9,975 |
7,680 |
|
|
15,534 |
|||
INDUSTRIALS - 0.0% |
||||
Trading Companies & Distributors - 0.0% |
||||
VWR Funding, Inc. term loan 2.9613% 6/29/14 (f) |
|
2,620 |
1,651 |
|
INFORMATION TECHNOLOGY - 0.2% |
||||
Electronic Equipment & Components - 0.2% |
||||
Texas Competitive Electric Holdings Co. LLC Tranche B2, term loan 5.6032% 10/10/14 (f) |
|
11,970 |
8,379 |
|
MATERIALS - 0.2% |
||||
Paper & Forest Products - 0.2% |
||||
Georgia-Pacific Corp. Tranche B1, term loan 3.6819% 12/20/12 (f) |
|
9,281 |
7,610 |
|
UTILITIES - 0.3% |
||||
Independent Power Producers & Energy Traders - 0.3% |
||||
Calpine Corp. Tranche D, term loan 4.335% 3/29/14 (f) |
|
14,962 |
11,109 |
|
TOTAL FLOATING RATE LOANS (Cost $72,190) |
68,835 |
Money Market Funds - 3.9% |
|||
Shares |
|
||
Fidelity Cash Central Fund, 1.06% (b) |
117,446,889 |
117,447 |
|
Fidelity Securities Lending Cash Central Fund, 0.87% (b)(c) |
62,029,025 |
62,029 |
|
TOTAL MONEY MARKET FUNDS (Cost $179,476) |
179,476 |
||
Cash Equivalents - 0.0% |
|||
Maturity Amount (000s) |
Value (000s) |
||
Investments in repurchase agreements in a joint trading account at 0.01%, dated 12/31/08 due
1/2/09 (Collateralized by U.S. Treasury Obligations) # |
$ 27 |
$ 27 |
|
TOTAL INVESTMENT PORTFOLIO - 101.0% (Cost $5,504,258) |
4,625,451 |
||
NET OTHER ASSETS - (1.0)% |
(47,909) |
||
NET ASSETS - 100% |
$ 4,577,542 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $35,587,000 or 0.8% of net assets. |
(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(g) Position or a portion of the position represents an unfunded loan commitment. At period end, the total principal amount and market value of unfunded commitments totaled $487,000 and $375,000, respectively. |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty |
Value |
$27,000 due 1/02/09 at 0.01% |
|
BNP Paribas Securities Corp. |
$ 0 |
Banc of America Securities LLC |
3 |
Goldman, Sachs & Co. |
18 |
UBS Securities LLC |
6 |
|
$ 27 |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund |
Income earned |
Fidelity Cash Central Fund |
$ 2,194 |
Fidelity Securities Lending Cash Central Fund |
528 |
Total |
$ 2,722 |
Other Information |
The following is a summary of the inputs used, as of December 31, 2008, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
||||
Description |
Total |
Level 1 |
Level 2 |
Level 3 |
Investments in Securities |
$ 4,625,451 |
$ 4,296,199 |
$ 303,299 |
$ 25,953 |
The following is a reconciliation of assets for which Level 3 inputs were used in determining value: |
|
Investments in Securities |
Beginning Balance |
$ 0 |
Total Realized Gain (Loss) |
(4,801) |
Total Unrealized Gain (Loss) |
(17,817) |
Cost of Purchases |
31,849 |
Proceeds of Sales |
(4,448) |
Amortization/Accretion |
0 |
Transfer in/out of Level 3 |
21,170 |
Ending Balance |
$ 25,953 |
The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands (except per-share amounts) |
December 31, 2008 (Unaudited) |
|
|
|
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $61,408 and repurchase agreements of $27) - See accompanying schedule: Unaffiliated issuers (cost $5,324,782) |
$ 4,445,975 |
|
Fidelity Central Funds (cost $179,476) |
179,476 |
|
Total Investments (cost $5,504,258) |
|
$ 4,625,451 |
Cash |
|
740 |
Receivable for investments sold |
|
13,431 |
Receivable for fund shares sold |
|
9,061 |
Dividends receivable |
|
7,846 |
Interest receivable |
|
3,767 |
Distributions receivable from Fidelity Central Funds |
|
229 |
Prepaid expenses |
|
60 |
Other receivables |
|
147 |
Total assets |
|
4,660,732 |
|
|
|
Liabilities |
|
|
Payable for investments purchased |
$ 11,680 |
|
Payable for fund shares redeemed |
6,842 |
|
Accrued management fee |
1,321 |
|
Other affiliated payables |
1,120 |
|
Other payables and accrued expenses |
198 |
|
Collateral on securities loaned, at value |
62,029 |
|
Total liabilities |
|
83,190 |
|
|
|
Net Assets |
|
$ 4,577,542 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 6,297,977 |
Undistributed net investment income |
|
1,322 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(842,963) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
(878,794) |
Net Assets |
|
$ 4,577,542 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands (except per-share amounts) |
December 31, 2008 (Unaudited) |
|
|
|
|
Fidelity: |
|
$ 22.76 |
|
|
|
Class K: |
|
$ 22.76 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Amounts in thousands |
Six months ended December 31, 2008 (Unaudited) |
|
|
|
|
Investment Income |
|
|
Dividends |
|
$ 54,164 |
Interest |
|
4,495 |
Income from Fidelity Central Funds |
|
2,722 |
Total income |
|
61,381 |
|
|
|
Expenses |
|
|
Management fee |
$ 9,999 |
|
Transfer agent fees |
6,317 |
|
Accounting and security lending fees |
564 |
|
Custodian fees and expenses |
73 |
|
Independent trustees' compensation |
13 |
|
Registration fees |
66 |
|
Audit |
47 |
|
Legal |
37 |
|
Miscellaneous |
284 |
|
Total expenses before reductions |
17,400 |
|
Expense reductions |
(42) |
17,358 |
Net investment income (loss) |
|
44,023 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities: |
|
|
Unaffiliated issuers |
(810,606) |
|
Foreign currency transactions |
(320) |
|
Total net realized gain (loss) |
|
(810,926) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(1,610,497) |
|
Assets and liabilities in foreign currencies |
7 |
|
Total change in net unrealized appreciation (depreciation) |
|
(1,610,490) |
Net gain (loss) |
|
(2,421,416) |
Net increase (decrease) in net assets resulting from operations |
|
$ (2,377,393) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands |
Six months ended December 31, 2008 (Unaudited) |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 44,023 |
$ 72,684 |
Net realized gain (loss) |
(810,926) |
467,755 |
Change in net unrealized appreciation (depreciation) |
(1,610,490) |
(825,272) |
Net increase (decrease) in net assets resulting |
(2,377,393) |
(284,833) |
Distributions to shareholders from net investment income |
(61,882) |
(72,940) |
Distributions to shareholders from net realized gain |
(199,008) |
(310,354) |
Total distributions |
(260,890) |
(383,294) |
Share transactions - net increase (decrease) |
42,156 |
423,387 |
Total increase (decrease) in net assets |
(2,596,127) |
(244,740) |
|
|
|
Net Assets |
|
|
Beginning of period |
7,173,669 |
7,418,409 |
End of period (including undistributed net investment income of $1,322 and undistributed net investment income of $19,181, respectively) |
$ 4,577,542 |
$ 7,173,669 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months endedDecember 31, 2008 |
Years ended June 30, |
||||
|
(Unaudited) |
2008 |
2007 |
2006 |
2005 |
2004 |
Selected Per-Share Data |
|
|
|
|
||
Net asset value, beginning of period |
$ 35.69 |
$ 38.98 |
$ 32.55 |
$ 29.74 |
$ 28.81 |
$ 24.46 |
Income from Investment |
|
|
|
|
|
|
Net investment income (loss)D |
.22 |
.37 |
.30 |
.28 |
.44 G |
.24 |
Net realized and unrealized gain (loss) |
(11.85) |
(1.65) |
6.45 |
2.80 |
.87 |
4.35 |
Total from investment operations |
(11.63) |
(1.28) |
6.75 |
3.08 |
1.31 |
4.59 |
Distributions from net investment income |
(.31) |
(.38) |
(.32) |
(.27) |
(.38) |
(.24) |
Distributions from net realized gain |
(.99) |
(1.63) |
- |
- |
- |
- |
Total distributions |
(1.30) |
(2.01) |
(.32) |
(.27) |
(.38) |
(.24) |
Net asset value, end of period |
$ 22.76 |
$ 35.69 |
$ 38.98 |
$ 32.55 |
$ 29.74 |
$ 28.81 |
Total Return B,C |
(33.58)% |
(3.73)% |
20.86% |
10.40% |
4.58% |
18.81% |
Ratios to Average Net Assets E,H |
|
|
|
|
||
Expenses before reductions |
.61% A |
.56% |
.57% |
.59% |
.60% |
.61% |
Expenses net of fee waivers, if any |
.61% A |
.56% |
.57% |
.59% |
.60% |
.61% |
Expenses net of all reductions |
.61% A |
.55% |
.56% |
.56% |
.57% |
.59% |
Net investment income (loss) |
1.55% A |
.98% |
.86% |
.87% |
1.52% G |
.89% |
Supplemental Data |
|
|
|
|
||
Net assets, end of period (in millions) |
$ 4,398 |
$ 7,174 |
$ 7,418 |
$ 8,284 |
$ 10,178 |
$ 10,499 |
Portfolio turnover rate F |
84% A |
80% |
50% |
72% |
74% |
53% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.12 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.09%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Period ended
|
|
(Unaudited) |
2008 G |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 35.70 |
$ 37.54 |
Income from Investment Operations |
|
|
Net investment income (loss) D |
.20 |
.05 |
Net realized and unrealized gain (loss) |
(11.81) |
(1.89) |
Total from investment operations |
(11.61) |
(1.84) |
Distributions from net investment income |
(.34) |
- |
Distributions from net realized gain |
(.99) |
- |
Total distributions |
(1.33) |
- |
Net asset value, end of period |
$ 22.76 |
$ 35.70 |
Total Return B,C |
(33.50)% |
(4.90)% |
Ratios to Average Net Assets E,H |
|
|
Expenses before reductions |
.44% A |
.43% A |
Expenses net of fee waivers, if any |
.44% A |
.43% A |
Expenses net of all reductions |
.44% A |
.43% A |
Net investment income (loss) |
1.72% A |
1.00% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 179,248 |
$ 95 |
Portfolio turnover rate F |
84% A |
80% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period May 9, 2008 (commencement of sale of shares) to June 30, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
For the period ended December 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. After the commencement of Class K, the Fund began offering conversion privileges between Fidelity Fund and Class K to eligible shareholders of Fidelity Fund. The Fund offers Fidelity Fund and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Debt securities, including restricted securities, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 |
Quoted prices in active markets for identical securities. |
Level 2 |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of December 31, 2008, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensation and losses deferred due to wash sales.
Semiannual Report
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation |
$ 261,012 |
Unrealized depreciation |
(1,167,455) |
Net unrealized appreciation (depreciation) |
$ (906,443) |
Cost for federal income tax purposes |
$ 5,531,894 |
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments, including revolving credit facilities, that obligate the Fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. The Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these investments.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $2,485,570 and $2,384,746, respectively.
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .09% of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .35% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Fidelity Fund. FIIOC receives an asset-based fee of .05% of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
|
Amount |
% of |
Fidelity Fund |
6,306 |
.22 |
Class K |
11 |
.05 |
|
$ 6,317 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $20 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $7
Semiannual Report
7. Committed Line of Credit - continued
and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $528.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $20 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $1. During the period, credits reduced each class' transfer agent expense as noted in the table below.
|
Transfer Agent |
Fidelity Fund |
$ 21 |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also
Semiannual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
10. Other - continued
enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
|
Six months ended |
Year ended |
From net investment income |
|
|
Fidelity Fund |
$ 60,642 |
$ 72,940 |
Class K |
1,240 |
- |
Total |
$ 61,882 |
$ 72,940 |
From net realized gain |
|
|
Fidelity Fund |
$ 199,005 |
$ 310,354 |
Class K |
3 |
- |
Total |
$ 199,008 |
$ 310,354 |
12. Share Transactions.
Transactions for each class of shares were as follows:
|
Shares |
Dollars |
||
|
Six months ended |
Year ended |
Six months ended |
Year ended |
Fidelity Fund |
|
|
|
|
Shares sold |
16,727 |
34,776 |
$ 453,465 |
$ 1,322,511 |
Conversion to Class K |
(8,944) |
- |
(220,404) |
- |
Reinvestment of distributions |
7,748 |
9,112 |
244,485 |
359,856 |
Shares redeemed |
(23,301) |
(33,213) |
(629,681) |
(1,259,080) |
Net increase (decrease) |
(7,770) |
10,675 |
$ (152,135) |
$ 423,287 |
Class K |
|
|
|
|
Shares sold |
185 |
3 |
$ 4,357 |
$ 100 |
Conversion from Fidelity Fund |
8,941 |
- |
220,404 |
- |
Reinvestment of distributions |
54 |
- |
1,243 |
- |
Shares redeemed |
(1,306) |
- |
(31,713) |
- |
Net increase (decrease) |
7,874 |
3 |
$ 194,291 |
$ 100 |
A Share transactions for Class K are for the period May 9, 2008 to June 30, 2008.
Semiannual Report
Fidelity Fund
Each year, typically in July, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly and, acting directly and through its separate committees, requests and receives information concerning, and considers at each of its meetings factors that are relevant to, its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. Each committee has a written charter outlining the structure and purposes of the committee. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.
At its July 2008 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders. The Board also approved agreements with foreign sub-advisers Fidelity Management & Research (Japan) Inc. and Fidelity Management & Research (Hong Kong) Limited, as well as amendments to the fund's agreement with Fidelity Management & Research (U.K.) Inc.
In considering whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund's shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Semiannual Report
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the backgrounds of the fund's investment personnel and the fund's investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services. The Board further considered that Fidelity voluntarily pays for market data out of its own resources.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge. The Board noted that Fidelity has taken a number of actions over the previous year that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) contractually agreeing to reduce the management fees on Fidelity's Institutional Money Market Funds and launching Class IV and Institutional Class of certain of these funds; (iii) reducing the transfer agent fees for the Fidelity Select Portfolios and Investor Class of the VIP funds; and (iv) launching Class K of 29 equity funds as a lower-fee class available to certain employer-sponsored retirement plans.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund's absolute investment performance, as well as the fund's relative investment performance measured against (i) a broad-based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one-, three-, and five-year periods ended December 31, 2007, the fund's cumulative total returns, the cumulative total returns of a broad-based securities market index ("benchmark"), and a range of cumulative total returns of a peer group of mutual funds identified by Morningstar, Inc. as having an investment style similar to that of the fund based on underlying portfolio holdings. (The fund did not offer Class K as of December 31, 2007.) The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the peer group whose performance was equal to or lower than that of the fund.
Semiannual Report
Fidelity Fund
The Board reviewed the fund's relative investment performance against its peer group and stated that the performance of the fund was in the first quartile for all the periods shown. The Board also stated that the investment performance of the fund compared favorably to its benchmark for all the periods shown.
The Board considered that FMR has taken steps to refocus and strengthen equity research, equity portfolio management, and compliance.
Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's management fee and total expenses compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board's management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared. The Board also considered supplemental information about how the fund's management fee and total expenses ranked relative to groups based on Lipper classifications, which take into account a fund's market capitalization and style.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a TMG % of 5% means that 95% of the funds in the Total Mapped Group had higher management fees than the fund. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to non-Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee ranked, is also included in the chart and considered by the Board.
Fidelity Fund
The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2007.
Based on its review, the Board concluded that the fund's management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
In its review of the fund's total expenses, the Board considered the fund's management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered current and historical total expenses of the fund compared to competitive fund median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
Semiannual Report
The Board noted that the fund's total expenses ranked below its competitive median for 2007.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund's total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of the results of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of Fidelity's methodologies used in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board has also reviewed Fidelity's non-fund businesses and any fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including (i) fund performance trends and actions to be taken by FMR to improve certain funds' overall performance; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability and the extent to which portfolio manager compensation is linked to fund performance; (v) Fidelity's fee structures and rationale for recommending different fees among categories of funds; and (vi) Fidelity's rationale for recommending which funds should have a performance adjustment component as part of their management fees.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Semiannual Report
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
15445 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
2000 Avenue of the Stars
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
123 South Lake Avenue
Pasadena, CA
16656 Bernardo Ctr. Drive
Rancho Bernardo, CA
1220 Roseville Parkway
Roseville, CA
1740 Arden Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
11943 El Camino Real
San Diego, CA
8 Montgomery Street
San Francisco, CA
3793 State Street
Santa Barbara, CA
1200 Wilshire Boulevard
Santa Monica, CA
398 West El Camino Real
Sunnyvale, CA
111 South Westlake Blvd
Thousand Oaks, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6326 Canoga Avenue
Woodland Hills, CA
Colorado
281 East Flatiron Circle
Broomfield, CO
1625 Broadway
Denver, CO
9185 Westview Road
Lone Tree, CO
Connecticut
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
Delaware
400 Delaware Avenue
Wilmington, DE
Florida
175 East Altamonte Drive
Altamonte Springs, FL
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
4671 Town Center Parkway
Jacksonville, FL
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
Palm Beach, FL
3501 PGA Boulevard
Palm Beach Gardens, FL
3550 Tamiami Trail, South
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
2465 State Road 7
Wellington, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7315 Wisconsin Avenue
Bethesda, MD
610 York Road
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
Novi, MI
Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
Scarsdale, NY
North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
Columbus, OH
1800 Crocker Road
Westlake, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
Investment Adviser
Fidelity Management &
Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
FIL Investment Advisors
FIL Investment Advisors
(U.K.) Ltd.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Northern Trust Company
Chicago, IL
FID-K-USAN-0209 1.863257.100
Fidelity®
Growth Discovery Fund
Semiannual Report
December 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Chairman's Message |
Ned Johnson's message to shareholders. |
|
Shareholder Expense Example |
An example of shareholder expenses. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
|
Notes |
Notes to the financial statements. |
|
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
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.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
An all-out credit crisis gripped the world's capital markets in 2008, stunting economic growth, toppling commodity prices and pushing equity markets into their steepest declines in decades. Within this ultra-risk-averse climate, virtually the only positive results came from the relative security of U.S. government-backed assets. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2008 to December 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Semiannual Report
Shareholder Expense Example - continued
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
|
Annualized |
Beginning |
Ending |
Expenses Paid |
Growth Discovery |
.93% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 592.90 |
$ 3.73 |
HypotheticalA |
|
$ 1,000.00 |
$ 1,020.52 |
$ 4.74 |
Class K |
.72% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 592.90 |
$ 2.89 |
HypotheticalA |
|
$ 1,000.00 |
$ 1,021.58 |
$ 3.67 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Top Ten Stocks as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Wells Fargo & Co. |
6.7 |
0.0 |
Berkshire Hathaway, Inc. Class B |
6.1 |
3.6 |
Medco Health Solutions, Inc. |
4.9 |
2.3 |
Nestle SA sponsored ADR |
4.2 |
1.1 |
Procter & Gamble Co. |
4.1 |
1.5 |
QUALCOMM, Inc. |
3.8 |
1.5 |
VeriSign, Inc. |
3.6 |
1.9 |
Goldman Sachs Group, Inc. |
3.0 |
0.0 |
Cisco Systems, Inc. |
2.8 |
1.3 |
Visa, Inc. |
2.7 |
1.5 |
|
41.9 |
|
Top Five Market Sectors as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Information Technology |
24.7 |
24.4 |
Financials |
23.1 |
13.6 |
Health Care |
20.4 |
12.4 |
Consumer Staples |
11.2 |
4.7 |
Consumer Discretionary |
4.6 |
4.3 |
Asset Allocation (% of fund's net assets) |
|||||||
As of December 31, 2008 * |
As of June 30, 2008 ** |
||||||
Stocks 91.7% |
|
Stocks 95.9% |
|
||||
Short-Term |
|
Short-Term |
|
||||
* Foreign investments |
12.8% |
|
** Foreign investments |
26.1% |
|
Semiannual Report
Showing Percentage of Net Assets
Common Stocks - 91.7% |
|||
Shares |
Value (000s) |
||
CONSUMER DISCRETIONARY - 4.6% |
|||
Diversified Consumer Services - 1.8% |
|||
Apollo Group, Inc. Class A (non-vtg.) (a) |
60,900 |
$ 4,666 |
|
Strayer Education, Inc. |
59,425 |
12,741 |
|
Universal Technical Institute, Inc. (a)(d) |
15,414 |
265 |
|
|
17,672 |
||
Hotels, Restaurants & Leisure - 1.9% |
|||
Burger King Holdings, Inc. |
55,700 |
1,330 |
|
Marriott International, Inc. Class A |
5,700 |
111 |
|
McDonald's Corp. |
265,400 |
16,505 |
|
Starwood Hotels & Resorts Worldwide, Inc. |
5,900 |
106 |
|
|
18,052 |
||
Media - 0.2% |
|||
The Walt Disney Co. |
87,500 |
1,985 |
|
Specialty Retail - 0.5% |
|||
DSW, Inc. Class A (a) |
258,268 |
3,218 |
|
Lowe's Companies, Inc. |
88,300 |
1,900 |
|
|
5,118 |
||
Textiles, Apparel & Luxury Goods - 0.2% |
|||
American Apparel, Inc. (a) |
173,600 |
345 |
|
Lululemon Athletica, Inc. (a)(d) |
188,011 |
1,491 |
|
|
1,836 |
||
TOTAL CONSUMER DISCRETIONARY |
44,663 |
||
CONSUMER STAPLES - 11.2% |
|||
Beverages - 1.1% |
|||
The Coca-Cola Co. |
230,100 |
10,417 |
|
Food & Staples Retailing - 0.9% |
|||
Costco Wholesale Corp. |
39,800 |
2,090 |
|
CVS Caremark Corp. |
242,979 |
6,983 |
|
|
9,073 |
||
Food Products - 4.3% |
|||
Flowers Foods, Inc. |
46,610 |
1,135 |
|
Nestle SA sponsored ADR |
1,009,350 |
40,071 |
|
|
41,206 |
||
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
CONSUMER STAPLES - continued |
|||
Household Products - 4.9% |
|||
Colgate-Palmolive Co. |
113,490 |
$ 7,779 |
|
Procter & Gamble Co. |
638,400 |
39,466 |
|
|
47,245 |
||
TOTAL CONSUMER STAPLES |
107,941 |
||
ENERGY - 3.4% |
|||
Energy Equipment & Services - 0.3% |
|||
Schlumberger Ltd. (NY Shares) |
51,900 |
2,197 |
|
Oil, Gas & Consumable Fuels - 3.1% |
|||
Chesapeake Energy Corp. |
663,122 |
10,723 |
|
Denbury Resources, Inc. (a) |
610,127 |
6,663 |
|
Southwestern Energy Co. (a) |
347,303 |
10,061 |
|
Ultra Petroleum Corp. (a) |
76,500 |
2,640 |
|
|
30,087 |
||
TOTAL ENERGY |
32,284 |
||
FINANCIALS - 23.1% |
|||
Capital Markets - 5.5% |
|||
Charles Schwab Corp. |
435,944 |
7,049 |
|
Goldman Sachs Group, Inc. |
343,600 |
28,996 |
|
JMP Group, Inc. |
41,500 |
230 |
|
Morgan Stanley |
1,062,352 |
17,040 |
|
|
53,315 |
||
Commercial Banks - 7.1% |
|||
PNC Financial Services Group, Inc. |
87,300 |
4,278 |
|
Wells Fargo & Co. |
2,192,810 |
64,643 |
|
|
68,921 |
||
Consumer Finance - 0.4% |
|||
American Express Co. |
215,300 |
3,994 |
|
Diversified Financial Services - 2.7% |
|||
CIT Group, Inc. |
2,000 |
9 |
|
Citigroup, Inc. |
652,900 |
4,381 |
|
JPMorgan Chase & Co. |
655,878 |
20,680 |
|
KKR Financial Holdings LLC |
678,117 |
1,071 |
|
|
26,141 |
||
Insurance - 7.1% |
|||
Berkshire Hathaway, Inc. Class B (a) |
18,449 |
59,295 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
FINANCIALS - continued |
|||
Insurance - continued |
|||
The First American Corp. |
184,069 |
$ 5,318 |
|
Willis Group Holdings Ltd. |
142,122 |
3,536 |
|
|
68,149 |
||
Real Estate Investment Trusts - 0.3% |
|||
General Growth Properties, Inc. |
662,030 |
854 |
|
SL Green Realty Corp. |
28,400 |
736 |
|
Vornado Realty Trust |
16,700 |
1,008 |
|
|
2,598 |
||
TOTAL FINANCIALS |
223,118 |
||
HEALTH CARE - 20.4% |
|||
Biotechnology - 4.9% |
|||
Biogen Idec, Inc. (a) |
389,504 |
18,552 |
|
Celgene Corp. (a) |
93,200 |
5,152 |
|
CSL Ltd. |
779,343 |
18,746 |
|
Genzyme Corp. (a) |
35,700 |
2,369 |
|
Gilead Sciences, Inc. (a) |
52,728 |
2,697 |
|
|
47,516 |
||
Health Care Equipment & Supplies - 5.8% |
|||
Alcon, Inc. |
122,100 |
10,890 |
|
Baxter International, Inc. |
289,512 |
15,515 |
|
C.R. Bard, Inc. |
79,777 |
6,722 |
|
Covidien Ltd. |
314,241 |
11,388 |
|
DENTSPLY International, Inc. (d) |
313,266 |
8,847 |
|
Medtronic, Inc. |
83,400 |
2,620 |
|
|
55,982 |
||
Health Care Providers & Services - 6.4% |
|||
Express Scripts, Inc. (a) |
126,585 |
6,960 |
|
Henry Schein, Inc. (a) |
115,877 |
4,252 |
|
Medco Health Solutions, Inc. (a) |
1,128,652 |
47,302 |
|
UnitedHealth Group, Inc. |
118,000 |
3,139 |
|
|
61,653 |
||
Pharmaceuticals - 3.3% |
|||
Johnson & Johnson |
206,000 |
12,325 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
HEALTH CARE - continued |
|||
Pharmaceuticals - continued |
|||
Novo Nordisk AS Series B |
179,510 |
$ 9,305 |
|
Teva Pharmaceutical Industries Ltd. sponsored ADR (d) |
234,665 |
9,990 |
|
|
31,620 |
||
TOTAL HEALTH CARE |
196,771 |
||
INDUSTRIALS - 3.3% |
|||
Building Products - 0.2% |
|||
USG Corp. (a) |
207,600 |
1,669 |
|
Machinery - 2.1% |
|||
CLARCOR, Inc. |
98,637 |
3,273 |
|
Cummins, Inc. |
222,100 |
5,937 |
|
Danaher Corp. |
202,700 |
11,475 |
|
PACCAR, Inc. |
3,400 |
97 |
|
|
20,782 |
||
Professional Services - 0.8% |
|||
Equifax, Inc. |
82,300 |
2,183 |
|
FTI Consulting, Inc. (a) |
91,910 |
4,107 |
|
Robert Half International, Inc. |
64,600 |
1,345 |
|
|
7,635 |
||
Trading Companies & Distributors - 0.2% |
|||
Fastenal Co. (d) |
50,643 |
1,765 |
|
TOTAL INDUSTRIALS |
31,851 |
||
INFORMATION TECHNOLOGY - 24.7% |
|||
Communications Equipment - 8.6% |
|||
Cisco Systems, Inc. (a) |
1,638,543 |
26,708 |
|
Juniper Networks, Inc. (a) |
1,107,501 |
19,392 |
|
QUALCOMM, Inc. |
1,031,400 |
36,955 |
|
|
83,055 |
||
Computers & Peripherals - 1.0% |
|||
Apple, Inc. (a) |
92,377 |
7,884 |
|
SanDisk Corp. (a) |
129,488 |
1,243 |
|
|
9,127 |
||
Electronic Equipment & Components - 0.1% |
|||
BYD Co. Ltd. (H Shares) |
288,000 |
475 |
|
Internet Software & Services - 6.0% |
|||
Baidu.com, Inc. sponsored ADR (a)(d) |
5,296 |
691 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
INFORMATION TECHNOLOGY - continued |
|||
Internet Software & Services - continued |
|||
Google, Inc. Class A (sub. vtg.) (a) |
66,534 |
$ 20,469 |
|
The Knot, Inc. (a) |
245,400 |
2,042 |
|
VeriSign, Inc. (a) |
1,824,855 |
34,818 |
|
|
58,020 |
||
IT Services - 6.2% |
|||
Cognizant Technology Solutions Corp. Class A (a) |
334,200 |
6,036 |
|
Infosys Technologies Ltd. sponsored ADR |
188,700 |
4,636 |
|
The Western Union Co. |
1,591,428 |
22,821 |
|
Visa, Inc. |
491,157 |
25,761 |
|
|
59,254 |
||
Semiconductors & Semiconductor Equipment - 1.9% |
|||
Applied Materials, Inc. |
1,436,549 |
14,552 |
|
Monolithic Power Systems, Inc. (a) |
52,700 |
665 |
|
Netlogic Microsystems, Inc. (a) |
158,214 |
3,482 |
|
|
18,699 |
||
Software - 0.9% |
|||
Autonomy Corp. PLC (a) |
466,505 |
6,589 |
|
EPIQ Systems, Inc. (a) |
1,800 |
30 |
|
VMware, Inc. Class A (a) |
99,460 |
2,356 |
|
|
8,975 |
||
TOTAL INFORMATION TECHNOLOGY |
237,605 |
||
MATERIALS - 1.0% |
|||
Chemicals - 1.0% |
|||
Ecolab, Inc. |
149,000 |
5,237 |
|
Monsanto Co. |
66,524 |
4,680 |
|
|
9,917 |
||
TOTAL COMMON STOCKS (Cost $1,162,640) |
884,150 |
||
Money Market Funds - 9.6% |
|||
Shares |
Value (000s) |
||
Fidelity Cash Central Fund, 1.06% (b) |
81,274,908 |
$ 81,275 |
|
Fidelity Securities Lending Cash Central Fund, 0.87% (b)(c) |
10,957,048 |
10,957 |
|
TOTAL MONEY MARKET FUNDS (Cost $92,232) |
92,232 |
||
TOTAL INVESTMENT PORTFOLIO - 101.3% (Cost $1,254,872) |
976,382 |
||
NET OTHER ASSETS - (1.3)% |
(12,471) |
||
NET ASSETS - 100% |
$ 963,911 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund |
Income earned |
Fidelity Cash Central Fund |
$ 466 |
Fidelity Securities Lending Cash Central Fund |
340 |
Total |
$ 806 |
Other Information |
The following is a summary of the inputs used, as of December 31, 2008, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
||||
Description |
Total |
Level 1 |
Level 2 |
Level 3 |
Investments in Securities |
$ 976,382 |
$ 941,267 |
$ 35,115 |
$ - |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: (Unaudited) |
United States of America |
87.2% |
Switzerland |
5.3% |
Australia |
1.9% |
Bermuda |
1.6% |
Israel |
1.0% |
Denmark |
1.0% |
Others (individually less than 1%) |
2.0% |
|
100.0% |
Income Tax Information |
At June 30, 2008, the fund had a capital loss carryforward of approximately $134,259,000 of which $44,168,000 and $90,091,000 will expire on June 30, 2010 and 2011, respectively. |
The fund intends to elect to defer to its fiscal year ending June 30, 2009 approximately $67,547,000 of losses recognized during the period November 1, 2007 to June 30, 2008. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands (except per-share amounts) |
December 31, 2008 (Unaudited) |
|
|
|
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $10,964) - See accompanying schedule: Unaffiliated issuers (cost $1,162,640) |
$ 884,150 |
|
Fidelity Central Funds (cost $92,232) |
92,232 |
|
Total Investments (cost $1,254,872) |
|
$ 976,382 |
Receivable for investments sold |
|
2,306 |
Receivable for fund shares sold |
|
5,092 |
Dividends receivable |
|
617 |
Distributions receivable from Fidelity Central Funds |
|
80 |
Prepaid expenses |
|
13 |
Other receivables |
|
44 |
Total assets |
|
984,534 |
|
|
|
Liabilities |
|
|
Payable for investments purchased |
$ 4,575 |
|
Payable for fund shares redeemed |
4,152 |
|
Accrued management fee |
425 |
|
Other affiliated payables |
268 |
|
Other payables and accrued expenses |
246 |
|
Collateral on securities loaned, at value |
10,957 |
|
Total liabilities |
|
20,623 |
|
|
|
Net Assets |
|
$ 963,911 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 1,865,245 |
Distributions in excess of net investment income |
|
(776) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(621,868) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
(278,690) |
Net Assets |
|
$ 963,911 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands (except per-share amounts) |
December 31, 2008 (Unaudited) |
|
|
|
|
Growth Discovery: |
|
$ 8.61 |
|
|
|
Class K: |
|
$ 8.60 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Amounts in thousands |
Six months ended December 31, 2008 (Unaudited) |
|
Investment Income |
|
|
Dividends |
|
$ 6,774 |
Income from Fidelity Central Funds |
|
806 |
Total income |
|
7,580 |
|
|
|
Expenses |
|
|
Management fee |
$ 3,682 |
|
Performance adjustment |
298 |
|
Transfer agent fees |
1,654 |
|
Accounting and security lending fees |
214 |
|
Custodian fees and expenses |
71 |
|
Independent trustees' compensation |
4 |
|
Registration fees |
39 |
|
Audit |
34 |
|
Legal |
8 |
|
Miscellaneous |
72 |
|
Total expenses before reductions |
6,076 |
|
Expense reductions |
(55) |
6,021 |
Net investment income (loss) |
|
1,559 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities: |
|
|
Unaffiliated issuers |
(415,130) |
|
Foreign currency transactions |
325 |
|
Total net realized gain (loss) |
|
(414,805) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(278,812) |
|
Assets and liabilities in foreign currencies |
26 |
|
Total change in net unrealized appreciation (depreciation) |
|
(278,786) |
Net gain (loss) |
|
(693,591) |
Net increase (decrease) in net assets resulting from operations |
|
$ (692,032) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands |
Six months ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 1,559 |
$ 8,413 |
Net realized gain (loss) |
(414,805) |
(51,392) |
Change in net unrealized appreciation (depreciation) |
(278,786) |
(50,125) |
Net increase (decrease) in net assets resulting |
(692,032) |
(93,104) |
Distributions to shareholders from net investment income |
(8,686) |
(2,017) |
Share transactions - net increase (decrease) |
(103,179) |
1,382,342 |
Total increase (decrease) in net assets |
(803,897) |
1,287,221 |
|
|
|
Net Assets |
|
|
Beginning of period |
1,767,808 |
480,587 |
End of period (including distributions in excess of net investment income of $776 and undistributed net investment income of $6,351, respectively) |
$ 963,911 |
$ 1,767,808 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Years ended June 30, |
||||
|
(Unaudited) |
2008 |
2007 |
2006 |
2005 |
2004 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period |
$ 14.61 |
$ 14.36 |
$ 11.60 |
$ 10.70 |
$ 10.35 |
$ 9.40 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D |
.01 |
.09 |
.07 |
.12 |
.16 G |
.07 |
Net realized and unrealized gain (loss) |
(5.94) |
.20 H |
2.83 |
.91 |
.32 |
.93 |
Total from investment operations |
(5.93) |
.29 |
2.90 |
1.03 |
.48 |
1.00 |
Distributions from net investment income |
(.07) |
(.04) |
(.12) |
(.13) |
(.13) |
(.05) |
Distributions from net realized gain |
- |
- |
(.02) |
- |
- |
- |
Total distributions |
(.07) |
(.04) |
(.14) |
(.13) |
(.13) |
(.05) |
Net asset value, end of period |
$ 8.61 |
$ 14.61 |
$ 14.36 |
$ 11.60 |
$ 10.70 |
$ 10.35 |
Total Return B, C |
(40.71)% |
1.98% |
25.24% |
9.67% |
4.64% |
10.67% |
Ratios to Average Net Assets E, I |
|
|
|
|
|
|
Expenses before reductions |
.93% A |
.91% |
.81% |
.68% |
.81% |
.91% |
Expenses net of fee waivers, if any |
.93% A |
.91% |
.81% |
.68% |
.81% |
.91% |
Expenses net of all reductions |
.92% A |
.90% |
.80% |
.61% |
.70% |
.84% |
Net investment income (loss) |
.24% A |
.57% |
.55% |
1.04% |
1.54% G |
.73% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) |
$ 933 |
$ 1,768 |
$ 481 |
$ 412 |
$ 459 |
$ 541 |
Portfolio turnover rate F |
172% A |
150% |
199% |
184% |
229% |
249% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.04 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.13%.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Period ended
|
|
(Unaudited) |
2008 G |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 14.62 |
$ 14.94 |
Income from Investment Operations |
|
|
Net investment income (loss) D |
.02 |
.03 |
Net realized and unrealized gain (loss) |
(5.95) |
(.35) |
Total from investment operations |
(5.93) |
(.32) |
Distributions from net investment income |
(.09) |
- |
Net asset value, end of period |
$ 8.60 |
$ 14.62 |
Total Return B, C |
(40.71)% |
(2.14)% |
Ratios to Average Net Assets E, H |
|
|
Expenses before reductions |
.72% A |
.76% A |
Expenses net of fee waivers, if any |
.72% A |
.76% A |
Expenses net of all reductions |
.71% A |
.75% A |
Net investment income (loss) |
.44% A |
1.44% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 31,161 |
$ 98 |
Portfolio turnover rate F |
172% A |
150% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period May 9, 2008 (commencement of sale of shares) to June 30, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
For the period ended December 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Growth Discovery Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. After the commencement of Class K, the Fund began offering conversion privileges between Growth Discovery and Class K to eligible shareholders of Growth Discovery. The Fund offers Growth Discovery and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 |
Quoted prices in active markets for identical securities. |
Level 2 |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of December 31, 2008, for the Fund's investments is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), capital loss carryforwards, partnerships, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation |
$ 14,794 |
Unrealized depreciation |
(303,538) |
Net unrealized appreciation (depreciation) |
$ (288,744) |
Cost for federal income tax purposes |
$ 1,265,126 |
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
4. Operating Policies - continued
Repurchase Agreements - continued
are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,120,577 and $1,237,634, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of the retail class of the Fund, Growth Discovery, as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .61% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Growth Discovery. FIIOC receives an asset-based fee of .05% of Class K's average net assets.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
|
Amount |
% of |
Growth Discovery |
$ 1,650 |
.25 |
Class K |
4 |
.05 |
|
$ 1,654 |
|
* Annualized.
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $20 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
8. Security Lending - continued
experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $340.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $49 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $5. During the period, credits reduced each class' transfer agent expense as noted in the table below.
|
Transfer Agent |
Growth Discovery |
$ 1 |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, Lehman Brothers Holdings, Inc. and certain of its affiliates (LBHI) sought protection under the insolvency laws of their jurisdictions of organization, including the United States, the United Kingdom and Japan. At the time LBHI's insolvency proceedings were instituted, the Fund had outstanding securities trades with counterparties affiliated with LBHI. As a result of the insolvency proceedings, LBHI is unable to fulfill its commitments and, in certain cases, the Fund may have terminated its trades and related agreements with the relevant entities and, where appropriate, is in the
Semiannual Report
10. Other - continued
process of initiating claims for damages. FMR believes that the financial impact to the Fund relating to the terminated trades and agreements is immaterial.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
|
Six months ended |
Year ended |
From net investment income |
|
|
Growth Discovery |
$ 8,572 |
$ 2,017 |
Class K |
114 |
- |
Total |
$ 8,686 |
$ 2,017 |
12. Share Transactions.
Transactions for each class of shares were as follows:
|
Shares |
Dollars |
||
|
Six months ended |
Year ended |
Six months ended |
Year ended |
Growth Discovery |
|
|
|
|
Shares sold |
26,559 |
135,067 |
$ 290,687 |
$ 2,088,523 |
Conversion to Class K |
(2,111) |
- |
(27,925) |
- |
Reinvestment of distributions |
682 |
126 |
8,199 |
1,926 |
Shares redeemed |
(37,759) |
(47,663) |
(414,570) |
(708,207) |
Net increase (decrease) |
(12,629) |
87,530 |
$ (143,609) |
$ 1,382,242 |
Class K |
|
|
|
|
Shares sold |
1,850 |
7 |
$ 15,842 |
$ 100 |
Conversion from Growth Discovery |
2,109 |
- |
27,925 |
- |
Reinvestment of distributions |
13 |
- |
114 |
- |
Shares redeemed |
(357) |
- |
(3,451) |
- |
Net increase (decrease) |
3,615 |
7 |
$ 40,430 |
$ 100 |
A Share transactions for Class K are for the period May 9, 2008 (commencement of sale of shares) to June 30, 2008.
Semiannual Report
Fidelity Growth Discovery Fund
Each year, typically in July, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly and, acting directly and through its separate committees, requests and receives information concerning, and considers at each of its meetings factors that are relevant to, its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. Each committee has a written charter outlining the structure and purposes of the committee. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.
At its July 2008 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders. The Board also approved agreements with foreign sub-advisers Fidelity Management & Research (Japan) Inc. and Fidelity Management & Research (Hong Kong) Limited, as well as amendments to the fund's agreement with Fidelity Management & Research (U.K.) Inc.
In considering whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund's shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Semiannual Report
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the backgrounds of the fund's investment personnel and the fund's investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services. The Board further considered that Fidelity voluntarily pays for market data out of its own resources.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge. The Board noted that Fidelity has taken a number of actions over the previous year that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) contractually agreeing to reduce the management fees on Fidelity's Institutional Money Market Funds and launching Class IV and Institutional Class of certain of these funds; (iii) reducing the transfer agent fees for the Fidelity Select Portfolios and Investor Class of the VIP funds; and (iv) launching Class K of 29 equity funds as a lower-fee class available to certain employer-sponsored retirement plans.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund's absolute investment performance, as well as the fund's relative investment performance measured against (i) a broad-based securities market index, and (ii) a custom peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one-, three-, and five-year periods ended December 31, 2007, the fund's cumulative total returns, the cumulative total returns of a broad-based securities market index ("benchmark"), and a range of cumulative total returns of a custom peer group of mutual funds defined by FMR based on categories assigned by Morningstar, Inc. (The fund did not offer Class K as of December 31, 2007.) The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the peer group whose performance was equal to or lower than that of the fund. The fund's custom peer group, defined by FMR, is a peer group that FMR believes provides a more meaningful performance comparison than the peer group assigned by Morningstar, Inc., which assigns mutual funds to categories based on their investment styles as measured by their underlying portfolio holdings.
Semiannual Report
Fidelity Growth Discovery Fund
The Board reviewed the fund's relative investment performance against its peer group and stated that the performance of the fund was in the first quartile for the one- and three-year periods and the second quartile for the five-year period. The Board also stated that the investment performance of the fund compared favorably to its benchmark for all the periods shown.
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, the record (over the same period) of a Board-approved performance adjustment index. The Board realizes that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for the fund's shareholders and helps to more closely align the interests of FMR and the fund's shareholders.
The Board considered that FMR has taken steps to refocus and strengthen equity research, equity portfolio management, and compliance.
Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's management fee and total expenses compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board's management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared. The Board also considered supplemental information about how the fund's management fee and total expenses ranked relative to groups based on Lipper classifications, which take into account a fund's market capitalization and style.
The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a TMG % of 9% means that 91% of the funds in the Total Mapped Group had higher management fees than the fund. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to non-Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee ranked and the impact of the fund's performance adjustment, is also included in the chart and considered by the Board.
Semiannual Report
Fidelity Growth Discovery Fund
The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2007. The Board also noted the effect of the fund's positive performance adjustment on the fund's management fee ranking. The Board noted that the performance adjustment for each year represents calculations for performance periods that differ from the periods shown in the performance charts above.
Furthermore, the Board considered that shareholders approved a prospective change in the index used to calculate the fund's performance adjustment, beginning February 1, 2007. The Board also considered that, because the performance adjustment is based on a rolling 36-month measurement period, during a transition period the fund's performance is compared to a blended index return that reflects the performance of the former index for the portion of the measurement period prior to February 1, 2007 and the performance of the current index for the remainder of the measurement period. The Board noted that the fund's performance adjustment for 2007 shown in the chart above reflects the effect of using the blended index return to calculate the fund's performance adjustment.
In connection with the renewal of the fund's management contract, the Board also approved non-material amendments to the fund's management contract to clarify certain provisions regarding the calculation of the fund's performance adjustment.
Based on its review, the Board concluded that the fund's management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
In its review of the fund's total expenses, the Board considered the fund's management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses, as well as the impact of the fund's performance adjustment. As part of its review, the Board also considered current and historical total expenses of the fund compared to competitive fund median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund's total expenses ranked below its competitive median for 2007.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund's total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of the results of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of Fidelity's methodologies used in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
Semiannual Report
The Board has also reviewed Fidelity's non-fund businesses and any fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including (i) fund performance trends and actions to be taken by FMR to improve certain funds' overall performance; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability and the extent to which portfolio manager compensation is linked to fund performance; (v) Fidelity's fee structures and rationale for recommending different fees among categories of funds; and (vi) Fidelity's rationale for recommending which funds should have a performance adjustment component as part of their management fees.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Semiannual Report
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
15445 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
2000 Avenue of the Stars
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
123 South Lake Avenue
Pasadena, CA
16656 Bernardo Ctr. Drive
Rancho Bernardo, CA
1220 Roseville Parkway
Roseville, CA
1740 Arden Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
11943 El Camino Real
San Diego, CA
8 Montgomery Street
San Francisco, CA
3793 State Street
Santa Barbara, CA
1200 Wilshire Boulevard
Santa Monica, CA
398 West El Camino Real
Sunnyvale, CA
111 South Westlake Blvd
Thousand Oaks, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6326 Canoga Avenue
Woodland Hills, CA
Colorado
281 East Flatiron Circle
Broomfield, CO
1625 Broadway
Denver, CO
9185 Westview Road
Lone Tree, CO
Connecticut
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
Delaware
400 Delaware Avenue
Wilmington, DE
Florida
175 East Altamonte Drive
Altamonte Springs, FL
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
4671 Town Center Parkway
Jacksonville, FL
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
Palm Beach, FL
3501 PGA Boulevard
Palm Beach Gardens, FL
3550 Tamiami Trail, South
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
2465 State Road 7
Wellington, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7315 Wisconsin Avenue
Bethesda, MD
610 York Road
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
Novi, MI
Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
Scarsdale, NY
North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
Columbus, OH
1800 Crocker Road
Westlake, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
Investment Adviser
Fidelity Management &
Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
FIL Investment Advisors
FIL Investment Advisors
(U.K.) Ltd.
Fidelity Management & Research
(Japan) Inc.
Fidelity Management & Research
(Hong Kong) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Brown Brothers Harriman & Co.
Boston, MA
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST ®) 1-800-544-5555
Automated line for quickest service
CII-USAN-0209 1.787778.105
Fidelity®
Growth Discovery
Fund -
Class K
Semiannual Report
December 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Chairman's Message |
Ned Johnson's message to shareholders. |
|
Shareholder Expense Example |
An example of shareholder expenses. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
|
Notes |
Notes to the financial statements. |
|
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
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.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
An all-out credit crisis gripped the world's capital markets in 2008, stunting economic growth, toppling commodity prices and pushing equity markets into their steepest declines in decades. Within this ultra-risk-averse climate, virtually the only positive results came from the relative security of U.S. government-backed assets. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2008 to December 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Semiannual Report
Shareholder Expense Example - continued
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
|
Annualized |
Beginning |
Ending |
Expenses Paid |
Growth Discovery |
.93% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 592.90 |
$ 3.73 |
HypotheticalA |
|
$ 1,000.00 |
$ 1,020.52 |
$ 4.74 |
Class K |
.72% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 592.90 |
$ 2.89 |
HypotheticalA |
|
$ 1,000.00 |
$ 1,021.58 |
$ 3.67 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Top Ten Stocks as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Wells Fargo & Co. |
6.7 |
0.0 |
Berkshire Hathaway, Inc. Class B |
6.1 |
3.6 |
Medco Health Solutions, Inc. |
4.9 |
2.3 |
Nestle SA sponsored ADR |
4.2 |
1.1 |
Procter & Gamble Co. |
4.1 |
1.5 |
QUALCOMM, Inc. |
3.8 |
1.5 |
VeriSign, Inc. |
3.6 |
1.9 |
Goldman Sachs Group, Inc. |
3.0 |
0.0 |
Cisco Systems, Inc. |
2.8 |
1.3 |
Visa, Inc. |
2.7 |
1.5 |
|
41.9 |
|
Top Five Market Sectors as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Information Technology |
24.7 |
24.4 |
Financials |
23.1 |
13.6 |
Health Care |
20.4 |
12.4 |
Consumer Staples |
11.2 |
4.7 |
Consumer Discretionary |
4.6 |
4.3 |
Asset Allocation (% of fund's net assets) |
|||||||
As of December 31, 2008 * |
As of June 30, 2008 ** |
||||||
Stocks 91.7% |
|
Stocks 95.9% |
|
||||
Short-Term |
|
Short-Term |
|
||||
* Foreign investments |
12.8% |
|
** Foreign investments |
26.1% |
|
Semiannual Report
Showing Percentage of Net Assets
Common Stocks - 91.7% |
|||
Shares |
Value (000s) |
||
CONSUMER DISCRETIONARY - 4.6% |
|||
Diversified Consumer Services - 1.8% |
|||
Apollo Group, Inc. Class A (non-vtg.) (a) |
60,900 |
$ 4,666 |
|
Strayer Education, Inc. |
59,425 |
12,741 |
|
Universal Technical Institute, Inc. (a)(d) |
15,414 |
265 |
|
|
17,672 |
||
Hotels, Restaurants & Leisure - 1.9% |
|||
Burger King Holdings, Inc. |
55,700 |
1,330 |
|
Marriott International, Inc. Class A |
5,700 |
111 |
|
McDonald's Corp. |
265,400 |
16,505 |
|
Starwood Hotels & Resorts Worldwide, Inc. |
5,900 |
106 |
|
|
18,052 |
||
Media - 0.2% |
|||
The Walt Disney Co. |
87,500 |
1,985 |
|
Specialty Retail - 0.5% |
|||
DSW, Inc. Class A (a) |
258,268 |
3,218 |
|
Lowe's Companies, Inc. |
88,300 |
1,900 |
|
|
5,118 |
||
Textiles, Apparel & Luxury Goods - 0.2% |
|||
American Apparel, Inc. (a) |
173,600 |
345 |
|
Lululemon Athletica, Inc. (a)(d) |
188,011 |
1,491 |
|
|
1,836 |
||
TOTAL CONSUMER DISCRETIONARY |
44,663 |
||
CONSUMER STAPLES - 11.2% |
|||
Beverages - 1.1% |
|||
The Coca-Cola Co. |
230,100 |
10,417 |
|
Food & Staples Retailing - 0.9% |
|||
Costco Wholesale Corp. |
39,800 |
2,090 |
|
CVS Caremark Corp. |
242,979 |
6,983 |
|
|
9,073 |
||
Food Products - 4.3% |
|||
Flowers Foods, Inc. |
46,610 |
1,135 |
|
Nestle SA sponsored ADR |
1,009,350 |
40,071 |
|
|
41,206 |
||
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
CONSUMER STAPLES - continued |
|||
Household Products - 4.9% |
|||
Colgate-Palmolive Co. |
113,490 |
$ 7,779 |
|
Procter & Gamble Co. |
638,400 |
39,466 |
|
|
47,245 |
||
TOTAL CONSUMER STAPLES |
107,941 |
||
ENERGY - 3.4% |
|||
Energy Equipment & Services - 0.3% |
|||
Schlumberger Ltd. (NY Shares) |
51,900 |
2,197 |
|
Oil, Gas & Consumable Fuels - 3.1% |
|||
Chesapeake Energy Corp. |
663,122 |
10,723 |
|
Denbury Resources, Inc. (a) |
610,127 |
6,663 |
|
Southwestern Energy Co. (a) |
347,303 |
10,061 |
|
Ultra Petroleum Corp. (a) |
76,500 |
2,640 |
|
|
30,087 |
||
TOTAL ENERGY |
32,284 |
||
FINANCIALS - 23.1% |
|||
Capital Markets - 5.5% |
|||
Charles Schwab Corp. |
435,944 |
7,049 |
|
Goldman Sachs Group, Inc. |
343,600 |
28,996 |
|
JMP Group, Inc. |
41,500 |
230 |
|
Morgan Stanley |
1,062,352 |
17,040 |
|
|
53,315 |
||
Commercial Banks - 7.1% |
|||
PNC Financial Services Group, Inc. |
87,300 |
4,278 |
|
Wells Fargo & Co. |
2,192,810 |
64,643 |
|
|
68,921 |
||
Consumer Finance - 0.4% |
|||
American Express Co. |
215,300 |
3,994 |
|
Diversified Financial Services - 2.7% |
|||
CIT Group, Inc. |
2,000 |
9 |
|
Citigroup, Inc. |
652,900 |
4,381 |
|
JPMorgan Chase & Co. |
655,878 |
20,680 |
|
KKR Financial Holdings LLC |
678,117 |
1,071 |
|
|
26,141 |
||
Insurance - 7.1% |
|||
Berkshire Hathaway, Inc. Class B (a) |
18,449 |
59,295 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
FINANCIALS - continued |
|||
Insurance - continued |
|||
The First American Corp. |
184,069 |
$ 5,318 |
|
Willis Group Holdings Ltd. |
142,122 |
3,536 |
|
|
68,149 |
||
Real Estate Investment Trusts - 0.3% |
|||
General Growth Properties, Inc. |
662,030 |
854 |
|
SL Green Realty Corp. |
28,400 |
736 |
|
Vornado Realty Trust |
16,700 |
1,008 |
|
|
2,598 |
||
TOTAL FINANCIALS |
223,118 |
||
HEALTH CARE - 20.4% |
|||
Biotechnology - 4.9% |
|||
Biogen Idec, Inc. (a) |
389,504 |
18,552 |
|
Celgene Corp. (a) |
93,200 |
5,152 |
|
CSL Ltd. |
779,343 |
18,746 |
|
Genzyme Corp. (a) |
35,700 |
2,369 |
|
Gilead Sciences, Inc. (a) |
52,728 |
2,697 |
|
|
47,516 |
||
Health Care Equipment & Supplies - 5.8% |
|||
Alcon, Inc. |
122,100 |
10,890 |
|
Baxter International, Inc. |
289,512 |
15,515 |
|
C.R. Bard, Inc. |
79,777 |
6,722 |
|
Covidien Ltd. |
314,241 |
11,388 |
|
DENTSPLY International, Inc. (d) |
313,266 |
8,847 |
|
Medtronic, Inc. |
83,400 |
2,620 |
|
|
55,982 |
||
Health Care Providers & Services - 6.4% |
|||
Express Scripts, Inc. (a) |
126,585 |
6,960 |
|
Henry Schein, Inc. (a) |
115,877 |
4,252 |
|
Medco Health Solutions, Inc. (a) |
1,128,652 |
47,302 |
|
UnitedHealth Group, Inc. |
118,000 |
3,139 |
|
|
61,653 |
||
Pharmaceuticals - 3.3% |
|||
Johnson & Johnson |
206,000 |
12,325 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
HEALTH CARE - continued |
|||
Pharmaceuticals - continued |
|||
Novo Nordisk AS Series B |
179,510 |
$ 9,305 |
|
Teva Pharmaceutical Industries Ltd. sponsored ADR (d) |
234,665 |
9,990 |
|
|
31,620 |
||
TOTAL HEALTH CARE |
196,771 |
||
INDUSTRIALS - 3.3% |
|||
Building Products - 0.2% |
|||
USG Corp. (a) |
207,600 |
1,669 |
|
Machinery - 2.1% |
|||
CLARCOR, Inc. |
98,637 |
3,273 |
|
Cummins, Inc. |
222,100 |
5,937 |
|
Danaher Corp. |
202,700 |
11,475 |
|
PACCAR, Inc. |
3,400 |
97 |
|
|
20,782 |
||
Professional Services - 0.8% |
|||
Equifax, Inc. |
82,300 |
2,183 |
|
FTI Consulting, Inc. (a) |
91,910 |
4,107 |
|
Robert Half International, Inc. |
64,600 |
1,345 |
|
|
7,635 |
||
Trading Companies & Distributors - 0.2% |
|||
Fastenal Co. (d) |
50,643 |
1,765 |
|
TOTAL INDUSTRIALS |
31,851 |
||
INFORMATION TECHNOLOGY - 24.7% |
|||
Communications Equipment - 8.6% |
|||
Cisco Systems, Inc. (a) |
1,638,543 |
26,708 |
|
Juniper Networks, Inc. (a) |
1,107,501 |
19,392 |
|
QUALCOMM, Inc. |
1,031,400 |
36,955 |
|
|
83,055 |
||
Computers & Peripherals - 1.0% |
|||
Apple, Inc. (a) |
92,377 |
7,884 |
|
SanDisk Corp. (a) |
129,488 |
1,243 |
|
|
9,127 |
||
Electronic Equipment & Components - 0.1% |
|||
BYD Co. Ltd. (H Shares) |
288,000 |
475 |
|
Internet Software & Services - 6.0% |
|||
Baidu.com, Inc. sponsored ADR (a)(d) |
5,296 |
691 |
|
Common Stocks - continued |
|||
Shares |
Value (000s) |
||
INFORMATION TECHNOLOGY - continued |
|||
Internet Software & Services - continued |
|||
Google, Inc. Class A (sub. vtg.) (a) |
66,534 |
$ 20,469 |
|
The Knot, Inc. (a) |
245,400 |
2,042 |
|
VeriSign, Inc. (a) |
1,824,855 |
34,818 |
|
|
58,020 |
||
IT Services - 6.2% |
|||
Cognizant Technology Solutions Corp. Class A (a) |
334,200 |
6,036 |
|
Infosys Technologies Ltd. sponsored ADR |
188,700 |
4,636 |
|
The Western Union Co. |
1,591,428 |
22,821 |
|
Visa, Inc. |
491,157 |
25,761 |
|
|
59,254 |
||
Semiconductors & Semiconductor Equipment - 1.9% |
|||
Applied Materials, Inc. |
1,436,549 |
14,552 |
|
Monolithic Power Systems, Inc. (a) |
52,700 |
665 |
|
Netlogic Microsystems, Inc. (a) |
158,214 |
3,482 |
|
|
18,699 |
||
Software - 0.9% |
|||
Autonomy Corp. PLC (a) |
466,505 |
6,589 |
|
EPIQ Systems, Inc. (a) |
1,800 |
30 |
|
VMware, Inc. Class A (a) |
99,460 |
2,356 |
|
|
8,975 |
||
TOTAL INFORMATION TECHNOLOGY |
237,605 |
||
MATERIALS - 1.0% |
|||
Chemicals - 1.0% |
|||
Ecolab, Inc. |
149,000 |
5,237 |
|
Monsanto Co. |
66,524 |
4,680 |
|
|
9,917 |
||
TOTAL COMMON STOCKS (Cost $1,162,640) |
884,150 |
||
Money Market Funds - 9.6% |
|||
Shares |
Value (000s) |
||
Fidelity Cash Central Fund, 1.06% (b) |
81,274,908 |
$ 81,275 |
|
Fidelity Securities Lending Cash Central Fund, 0.87% (b)(c) |
10,957,048 |
10,957 |
|
TOTAL MONEY MARKET FUNDS (Cost $92,232) |
92,232 |
||
TOTAL INVESTMENT PORTFOLIO - 101.3% (Cost $1,254,872) |
976,382 |
||
NET OTHER ASSETS - (1.3)% |
(12,471) |
||
NET ASSETS - 100% |
$ 963,911 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund |
Income earned |
Fidelity Cash Central Fund |
$ 466 |
Fidelity Securities Lending Cash Central Fund |
340 |
Total |
$ 806 |
Other Information |
The following is a summary of the inputs used, as of December 31, 2008, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
||||
Description |
Total |
Level 1 |
Level 2 |
Level 3 |
Investments in Securities |
$ 976,382 |
$ 941,267 |
$ 35,115 |
$ - |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: (Unaudited) |
United States of America |
87.2% |
Switzerland |
5.3% |
Australia |
1.9% |
Bermuda |
1.6% |
Israel |
1.0% |
Denmark |
1.0% |
Others (individually less than 1%) |
2.0% |
|
100.0% |
Income Tax Information |
At June 30, 2008, the fund had a capital loss carryforward of approximately $134,259,000 of which $44,168,000 and $90,091,000 will expire on June 30, 2010 and 2011, respectively. |
The fund intends to elect to defer to its fiscal year ending June 30, 2009 approximately $67,547,000 of losses recognized during the period November 1, 2007 to June 30, 2008. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands (except per-share amounts) |
December 31, 2008 (Unaudited) |
|
|
|
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $10,964) - See accompanying schedule: Unaffiliated issuers (cost $1,162,640) |
$ 884,150 |
|
Fidelity Central Funds (cost $92,232) |
92,232 |
|
Total Investments (cost $1,254,872) |
|
$ 976,382 |
Receivable for investments sold |
|
2,306 |
Receivable for fund shares sold |
|
5,092 |
Dividends receivable |
|
617 |
Distributions receivable from Fidelity Central Funds |
|
80 |
Prepaid expenses |
|
13 |
Other receivables |
|
44 |
Total assets |
|
984,534 |
|
|
|
Liabilities |
|
|
Payable for investments purchased |
$ 4,575 |
|
Payable for fund shares redeemed |
4,152 |
|
Accrued management fee |
425 |
|
Other affiliated payables |
268 |
|
Other payables and accrued expenses |
246 |
|
Collateral on securities loaned, at value |
10,957 |
|
Total liabilities |
|
20,623 |
|
|
|
Net Assets |
|
$ 963,911 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 1,865,245 |
Distributions in excess of net investment income |
|
(776) |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(621,868) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
(278,690) |
Net Assets |
|
$ 963,911 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands (except per-share amounts) |
December 31, 2008 (Unaudited) |
|
|
|
|
Growth Discovery: |
|
$ 8.61 |
|
|
|
Class K: |
|
$ 8.60 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Amounts in thousands |
Six months ended December 31, 2008 (Unaudited) |
|
Investment Income |
|
|
Dividends |
|
$ 6,774 |
Income from Fidelity Central Funds |
|
806 |
Total income |
|
7,580 |
|
|
|
Expenses |
|
|
Management fee |
$ 3,682 |
|
Performance adjustment |
298 |
|
Transfer agent fees |
1,654 |
|
Accounting and security lending fees |
214 |
|
Custodian fees and expenses |
71 |
|
Independent trustees' compensation |
4 |
|
Registration fees |
39 |
|
Audit |
34 |
|
Legal |
8 |
|
Miscellaneous |
72 |
|
Total expenses before reductions |
6,076 |
|
Expense reductions |
(55) |
6,021 |
Net investment income (loss) |
|
1,559 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities: |
|
|
Unaffiliated issuers |
(415,130) |
|
Foreign currency transactions |
325 |
|
Total net realized gain (loss) |
|
(414,805) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(278,812) |
|
Assets and liabilities in foreign currencies |
26 |
|
Total change in net unrealized appreciation (depreciation) |
|
(278,786) |
Net gain (loss) |
|
(693,591) |
Net increase (decrease) in net assets resulting from operations |
|
$ (692,032) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Amounts in thousands |
Six months ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 1,559 |
$ 8,413 |
Net realized gain (loss) |
(414,805) |
(51,392) |
Change in net unrealized appreciation (depreciation) |
(278,786) |
(50,125) |
Net increase (decrease) in net assets resulting |
(692,032) |
(93,104) |
Distributions to shareholders from net investment income |
(8,686) |
(2,017) |
Share transactions - net increase (decrease) |
(103,179) |
1,382,342 |
Total increase (decrease) in net assets |
(803,897) |
1,287,221 |
|
|
|
Net Assets |
|
|
Beginning of period |
1,767,808 |
480,587 |
End of period (including distributions in excess of net investment income of $776 and undistributed net investment income of $6,351, respectively) |
$ 963,911 |
$ 1,767,808 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Years ended June 30, |
||||
|
(Unaudited) |
2008 |
2007 |
2006 |
2005 |
2004 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period |
$ 14.61 |
$ 14.36 |
$ 11.60 |
$ 10.70 |
$ 10.35 |
$ 9.40 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D |
.01 |
.09 |
.07 |
.12 |
.16 G |
.07 |
Net realized and unrealized gain (loss) |
(5.94) |
.20 H |
2.83 |
.91 |
.32 |
.93 |
Total from investment operations |
(5.93) |
.29 |
2.90 |
1.03 |
.48 |
1.00 |
Distributions from net investment income |
(.07) |
(.04) |
(.12) |
(.13) |
(.13) |
(.05) |
Distributions from net realized gain |
- |
- |
(.02) |
- |
- |
- |
Total distributions |
(.07) |
(.04) |
(.14) |
(.13) |
(.13) |
(.05) |
Net asset value, end of period |
$ 8.61 |
$ 14.61 |
$ 14.36 |
$ 11.60 |
$ 10.70 |
$ 10.35 |
Total Return B, C |
(40.71)% |
1.98% |
25.24% |
9.67% |
4.64% |
10.67% |
Ratios to Average Net Assets E, I |
|
|
|
|
|
|
Expenses before reductions |
.93% A |
.91% |
.81% |
.68% |
.81% |
.91% |
Expenses net of fee waivers, if any |
.93% A |
.91% |
.81% |
.68% |
.81% |
.91% |
Expenses net of all reductions |
.92% A |
.90% |
.80% |
.61% |
.70% |
.84% |
Net investment income (loss) |
.24% A |
.57% |
.55% |
1.04% |
1.54% G |
.73% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (in millions) |
$ 933 |
$ 1,768 |
$ 481 |
$ 412 |
$ 459 |
$ 541 |
Portfolio turnover rate F |
172% A |
150% |
199% |
184% |
229% |
249% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.04 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.13%.
H The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the Fund.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Period ended
|
|
(Unaudited) |
2008 G |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 14.62 |
$ 14.94 |
Income from Investment Operations |
|
|
Net investment income (loss) D |
.02 |
.03 |
Net realized and unrealized gain (loss) |
(5.95) |
(.35) |
Total from investment operations |
(5.93) |
(.32) |
Distributions from net investment income |
(.09) |
- |
Net asset value, end of period |
$ 8.60 |
$ 14.62 |
Total Return B, C |
(40.71)% |
(2.14)% |
Ratios to Average Net Assets E, H |
|
|
Expenses before reductions |
.72% A |
.76% A |
Expenses net of fee waivers, if any |
.72% A |
.76% A |
Expenses net of all reductions |
.71% A |
.75% A |
Net investment income (loss) |
.44% A |
1.44% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 31,161 |
$ 98 |
Portfolio turnover rate F |
172% A |
150% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period May 9, 2008 (commencement of sale of shares) to June 30, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
For the period ended December 31, 2008 (Unaudited)
(Amounts in thousands except ratios)
1. Organization.
Fidelity Growth Discovery Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. After the commencement of Class K, the Fund began offering conversion privileges between Growth Discovery and Class K to eligible shareholders of Growth Discovery. The Fund offers Growth Discovery and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 |
Quoted prices in active markets for identical securities. |
Level 2 |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of December 31, 2008, for the Fund's investments is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, certain foreign taxes, passive foreign investment companies (PFIC), capital loss carryforwards, partnerships, losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation |
$ 14,794 |
Unrealized depreciation |
(303,538) |
Net unrealized appreciation (depreciation) |
$ (288,744) |
Cost for federal income tax purposes |
$ 1,265,126 |
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
4. Operating Policies - continued
Repurchase Agreements - continued
are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $1,120,577 and $1,237,634, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and a group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of the retail class of the Fund, Growth Discovery, as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .61% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Growth Discovery. FIIOC receives an asset-based fee of .05% of Class K's average net assets.
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
|
Amount |
% of |
Growth Discovery |
$ 1,650 |
.25 |
Class K |
4 |
.05 |
|
$ 1,654 |
|
* Annualized.
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $20 for the period.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
8. Security Lending - continued
experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $340.
9. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the Fund provided services to the Fund in addition to trade execution. These services included payments of certain expenses on behalf of the Fund totaling $49 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $5. During the period, credits reduced each class' transfer agent expense as noted in the table below.
|
Transfer Agent |
Growth Discovery |
$ 1 |
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
During the period, Lehman Brothers Holdings, Inc. and certain of its affiliates (LBHI) sought protection under the insolvency laws of their jurisdictions of organization, including the United States, the United Kingdom and Japan. At the time LBHI's insolvency proceedings were instituted, the Fund had outstanding securities trades with counterparties affiliated with LBHI. As a result of the insolvency proceedings, LBHI is unable to fulfill its commitments and, in certain cases, the Fund may have terminated its trades and related agreements with the relevant entities and, where appropriate, is in the
Semiannual Report
10. Other - continued
process of initiating claims for damages. FMR believes that the financial impact to the Fund relating to the terminated trades and agreements is immaterial.
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
|
Six months ended |
Year ended |
From net investment income |
|
|
Growth Discovery |
$ 8,572 |
$ 2,017 |
Class K |
114 |
- |
Total |
$ 8,686 |
$ 2,017 |
12. Share Transactions.
Transactions for each class of shares were as follows:
|
Shares |
Dollars |
||
|
Six months ended |
Year ended |
Six months ended |
Year ended |
Growth Discovery |
|
|
|
|
Shares sold |
26,559 |
135,067 |
$ 290,687 |
$ 2,088,523 |
Conversion to Class K |
(2,111) |
- |
(27,925) |
- |
Reinvestment of distributions |
682 |
126 |
8,199 |
1,926 |
Shares redeemed |
(37,759) |
(47,663) |
(414,570) |
(708,207) |
Net increase (decrease) |
(12,629) |
87,530 |
$ (143,609) |
$ 1,382,242 |
Class K |
|
|
|
|
Shares sold |
1,850 |
7 |
$ 15,842 |
$ 100 |
Conversion from Growth Discovery |
2,109 |
- |
27,925 |
- |
Reinvestment of distributions |
13 |
- |
114 |
- |
Shares redeemed |
(357) |
- |
(3,451) |
- |
Net increase (decrease) |
3,615 |
7 |
$ 40,430 |
$ 100 |
A Share transactions for Class K are for the period May 9, 2008 (commencement of sale of shares) to June 30, 2008.
Semiannual Report
Fidelity Growth Discovery Fund
Each year, typically in July, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly and, acting directly and through its separate committees, requests and receives information concerning, and considers at each of its meetings factors that are relevant to, its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. Each committee has a written charter outlining the structure and purposes of the committee. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.
At its July 2008 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders. The Board also approved agreements with foreign sub-advisers Fidelity Management & Research (Japan) Inc. and Fidelity Management & Research (Hong Kong) Limited, as well as amendments to the fund's agreement with Fidelity Management & Research (U.K.) Inc.
In considering whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund's shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Semiannual Report
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the backgrounds of the fund's investment personnel and the fund's investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services. The Board further considered that Fidelity voluntarily pays for market data out of its own resources.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge. The Board noted that Fidelity has taken a number of actions over the previous year that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) contractually agreeing to reduce the management fees on Fidelity's Institutional Money Market Funds and launching Class IV and Institutional Class of certain of these funds; (iii) reducing the transfer agent fees for the Fidelity Select Portfolios and Investor Class of the VIP funds; and (iv) launching Class K of 29 equity funds as a lower-fee class available to certain employer-sponsored retirement plans.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund's absolute investment performance, as well as the fund's relative investment performance measured against (i) a broad-based securities market index, and (ii) a custom peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one-, three-, and five-year periods ended December 31, 2007, the fund's cumulative total returns, the cumulative total returns of a broad-based securities market index ("benchmark"), and a range of cumulative total returns of a custom peer group of mutual funds defined by FMR based on categories assigned by Morningstar, Inc. (The fund did not offer Class K as of December 31, 2007.) The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the peer group whose performance was equal to or lower than that of the fund. The fund's custom peer group, defined by FMR, is a peer group that FMR believes provides a more meaningful performance comparison than the peer group assigned by Morningstar, Inc., which assigns mutual funds to categories based on their investment styles as measured by their underlying portfolio holdings.
Semiannual Report
Fidelity Growth Discovery Fund
The Board reviewed the fund's relative investment performance against its peer group and stated that the performance of the fund was in the first quartile for the one- and three-year periods and the second quartile for the five-year period. The Board also stated that the investment performance of the fund compared favorably to its benchmark for all the periods shown.
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by, the record (over the same period) of a Board-approved performance adjustment index. The Board realizes that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior performance for the fund's shareholders and helps to more closely align the interests of FMR and the fund's shareholders.
The Board considered that FMR has taken steps to refocus and strengthen equity research, equity portfolio management, and compliance.
Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's management fee and total expenses compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board's management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared. The Board also considered supplemental information about how the fund's management fee and total expenses ranked relative to groups based on Lipper classifications, which take into account a fund's market capitalization and style.
The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a TMG % of 9% means that 91% of the funds in the Total Mapped Group had higher management fees than the fund. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to non-Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee ranked and the impact of the fund's performance adjustment, is also included in the chart and considered by the Board.
Semiannual Report
Fidelity Growth Discovery Fund
The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2007. The Board also noted the effect of the fund's positive performance adjustment on the fund's management fee ranking. The Board noted that the performance adjustment for each year represents calculations for performance periods that differ from the periods shown in the performance charts above.
Furthermore, the Board considered that shareholders approved a prospective change in the index used to calculate the fund's performance adjustment, beginning February 1, 2007. The Board also considered that, because the performance adjustment is based on a rolling 36-month measurement period, during a transition period the fund's performance is compared to a blended index return that reflects the performance of the former index for the portion of the measurement period prior to February 1, 2007 and the performance of the current index for the remainder of the measurement period. The Board noted that the fund's performance adjustment for 2007 shown in the chart above reflects the effect of using the blended index return to calculate the fund's performance adjustment.
In connection with the renewal of the fund's management contract, the Board also approved non-material amendments to the fund's management contract to clarify certain provisions regarding the calculation of the fund's performance adjustment.
Based on its review, the Board concluded that the fund's management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
In its review of the fund's total expenses, the Board considered the fund's management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses, as well as the impact of the fund's performance adjustment. As part of its review, the Board also considered current and historical total expenses of the fund compared to competitive fund median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund's total expenses ranked below its competitive median for 2007.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund's total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of the results of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of Fidelity's methodologies used in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
Semiannual Report
The Board has also reviewed Fidelity's non-fund businesses and any fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including (i) fund performance trends and actions to be taken by FMR to improve certain funds' overall performance; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability and the extent to which portfolio manager compensation is linked to fund performance; (v) Fidelity's fee structures and rationale for recommending different fees among categories of funds; and (vi) Fidelity's rationale for recommending which funds should have a performance adjustment component as part of their management fees.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Semiannual Report
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
15445 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
2000 Avenue of the Stars
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
123 South Lake Avenue
Pasadena, CA
16656 Bernardo Ctr. Drive
Rancho Bernardo, CA
1220 Roseville Parkway
Roseville, CA
1740 Arden Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
11943 El Camino Real
San Diego, CA
8 Montgomery Street
San Francisco, CA
3793 State Street
Santa Barbara, CA
1200 Wilshire Boulevard
Santa Monica, CA
398 West El Camino Real
Sunnyvale, CA
111 South Westlake Blvd
Thousand Oaks, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6326 Canoga Avenue
Woodland Hills, CA
Colorado
281 East Flatiron Circle
Broomfield, CO
1625 Broadway
Denver, CO
9185 Westview Road
Lone Tree, CO
Connecticut
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
Delaware
400 Delaware Avenue
Wilmington, DE
Florida
175 East Altamonte Drive
Altamonte Springs, FL
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
4671 Town Center Parkway
Jacksonville, FL
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
Palm Beach, FL
3501 PGA Boulevard
Palm Beach Gardens, FL
3550 Tamiami Trail, South
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
2465 State Road 7
Wellington, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7315 Wisconsin Avenue
Bethesda, MD
610 York Road
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
Novi, MI
Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
Scarsdale, NY
North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
Columbus, OH
1800 Crocker Road
Westlake, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
Investment Adviser
Fidelity Management &
Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
FIL Investment Advisors
FIL Investment Advisors
(U.K.) Ltd.
Fidelity Management & Research
(Japan) Inc.
Fidelity Management & Research
(Hong Kong) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
Brown Brothers Harriman & Co.
Boston, MA
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST ®) 1-800-544-5555
Automated line for quickest service
CII-K-USAN-0209 1.863273.100
Fidelity®
Mega Cap Stock
Fund
Semiannual Report
December 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Chairman's Message |
Ned Johnson's message to shareholders. |
|
Shareholder Expense Example |
An example of shareholder expenses. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
|
Notes |
Notes to the financial statements. |
|
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
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.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
An all-out credit crisis gripped the world's capital markets in 2008, stunting economic growth, toppling commodity prices and pushing equity markets into their steepest declines in decades. Within this ultra-risk-averse climate, virtually the only positive results came from the relative security of U.S. government-backed assets. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2008 to December 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Semiannual Report
Shareholder Expense Example - continued
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
Annualized |
Beginning |
Ending |
Expenses Paid |
Class A |
1.10% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 713.40 |
$ 4.75 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,019.66 |
$ 5.60 |
Class T |
1.35% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 712.20 |
$ 5.83 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,018.40 |
$ 6.87 |
Class B |
1.85% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 709.90 |
$ 7.97 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,015.88 |
$ 9.40 |
Class C |
1.80% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 709.80 |
$ 7.76 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,016.13 |
$ 9.15 |
Mega Cap Stock |
.75% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 713.50 |
$ 3.24 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,021.42 |
$ 3.82 |
Institutional Class |
.69% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 714.10 |
$ 2.98 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,021.73 |
$ 3.52 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Top Ten Stocks as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Exxon Mobil Corp. |
5.0 |
5.2 |
JPMorgan Chase & Co. |
3.4 |
2.6 |
Johnson & Johnson |
2.9 |
2.6 |
Wells Fargo & Co. |
2.9 |
1.2 |
Microsoft Corp. |
2.7 |
2.8 |
ConocoPhillips |
2.4 |
2.1 |
AT&T, Inc. |
2.3 |
2.7 |
General Electric Co. |
2.2 |
0.7 |
Wal-Mart Stores, Inc. |
2.2 |
1.6 |
Hewlett-Packard Co. |
2.0 |
3.4 |
|
28.0 |
|
Top Five Market Sectors as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Information Technology |
18.3 |
20.5 |
Health Care |
15.6 |
12.6 |
Financials |
15.2 |
15.9 |
Energy |
12.1 |
16.6 |
Consumer Staples |
10.7 |
8.6 |
Asset Allocation (% of fund's net assets) |
|||||||
As of December 31, 2008 * |
As of June 30, 2008 ** |
||||||
Stocks 97.9% |
|
Stocks 100.0% |
|
||||
Short-Term |
|
Short-Term |
|
||||
* Foreign investments |
4.2% |
|
** Foreign investments |
4.9% |
|
Semiannual Report
Showing Percentage of Net Assets
Common Stocks - 97.9% |
|||
Shares |
Value |
||
CONSUMER DISCRETIONARY - 9.4% |
|||
Auto Components - 0.2% |
|||
Magna International, Inc. Class A |
23,000 |
$ 694,707 |
|
Hotels, Restaurants & Leisure - 1.6% |
|||
McDonald's Corp. |
112,000 |
6,965,280 |
|
Starbucks Corp. (a) |
40,000 |
378,400 |
|
|
7,343,680 |
||
Household Durables - 1.5% |
|||
NVR, Inc. (a) |
2,000 |
912,500 |
|
Whirlpool Corp. (d) |
139,900 |
5,784,865 |
|
|
6,697,365 |
||
Media - 2.7% |
|||
Comcast Corp. Class A (special) (non-vtg.) |
190,000 |
3,068,500 |
|
News Corp. Class A |
50,100 |
455,409 |
|
Omnicom Group, Inc. |
11,100 |
298,812 |
|
The DIRECTV Group, Inc. (a) |
67,400 |
1,544,134 |
|
The Walt Disney Co. |
210,900 |
4,785,321 |
|
Time Warner, Inc. |
192,100 |
1,932,526 |
|
Viacom, Inc. Class B (non-vtg.) (a) |
23,300 |
444,098 |
|
|
12,528,800 |
||
Multiline Retail - 0.0% |
|||
Kohl's Corp. (a) |
1,000 |
36,200 |
|
Target Corp. |
3,400 |
117,402 |
|
|
153,602 |
||
Specialty Retail - 2.2% |
|||
Abercrombie & Fitch Co. Class A |
6,100 |
140,727 |
|
Best Buy Co., Inc. |
41,000 |
1,152,510 |
|
Home Depot, Inc. |
183,000 |
4,212,660 |
|
Lowe's Companies, Inc. |
130,000 |
2,797,600 |
|
Staples, Inc. |
80,643 |
1,445,123 |
|
TJX Companies, Inc. |
20,000 |
411,400 |
|
|
10,160,020 |
||
Textiles, Apparel & Luxury Goods - 1.2% |
|||
Coach, Inc. (a) |
50,000 |
1,038,500 |
|
NIKE, Inc. Class B |
89,000 |
4,539,000 |
|
|
5,577,500 |
||
TOTAL CONSUMER DISCRETIONARY |
43,155,674 |
||
Common Stocks - continued |
|||
Shares |
Value |
||
CONSUMER STAPLES - 10.7% |
|||
Beverages - 1.8% |
|||
Coca-Cola Enterprises, Inc. |
24,300 |
$ 292,329 |
|
Molson Coors Brewing Co. Class B |
75,293 |
3,683,334 |
|
The Coca-Cola Co. |
94,300 |
4,268,961 |
|
|
8,244,624 |
||
Food & Staples Retailing - 3.7% |
|||
CVS Caremark Corp. |
148,700 |
4,273,638 |
|
Kroger Co. |
77,700 |
2,052,057 |
|
Wal-Mart Stores, Inc. |
178,584 |
10,011,419 |
|
Walgreen Co. |
20,000 |
493,400 |
|
|
16,830,514 |
||
Food Products - 0.3% |
|||
Archer Daniels Midland Co. |
300 |
8,649 |
|
Kellogg Co. |
25,200 |
1,105,020 |
|
Tyson Foods, Inc. Class A |
51,300 |
449,388 |
|
|
1,563,057 |
||
Household Products - 1.8% |
|||
Kimberly-Clark Corp. |
10,000 |
527,400 |
|
Procter & Gamble Co. |
123,200 |
7,616,224 |
|
|
8,143,624 |
||
Personal Products - 0.2% |
|||
Avon Products, Inc. |
40,000 |
961,200 |
|
Tobacco - 2.9% |
|||
Altria Group, Inc. |
429,130 |
6,462,698 |
|
Philip Morris International, Inc. |
155,630 |
6,771,461 |
|
|
13,234,159 |
||
TOTAL CONSUMER STAPLES |
48,977,178 |
||
ENERGY - 12.1% |
|||
Energy Equipment & Services - 0.7% |
|||
ENSCO International, Inc. |
43,700 |
1,240,643 |
|
Halliburton Co. |
53,400 |
970,812 |
|
National Oilwell Varco, Inc. (a) |
5,000 |
122,200 |
|
Noble Corp. |
8,900 |
196,601 |
|
Schlumberger Ltd. (NY Shares) |
715 |
30,266 |
|
Transocean Ltd. (a) |
11,552 |
545,832 |
|
|
3,106,354 |
||
Oil, Gas & Consumable Fuels - 11.4% |
|||
Alpha Natural Resources, Inc. (a) |
30,000 |
485,700 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
ENERGY - continued |
|||
Oil, Gas & Consumable Fuels - continued |
|||
Apache Corp. |
36,800 |
$ 2,742,704 |
|
Chesapeake Energy Corp. |
95,000 |
1,536,150 |
|
Chevron Corp. |
118,400 |
8,758,048 |
|
ConocoPhillips |
207,500 |
10,748,500 |
|
Devon Energy Corp. |
5,000 |
328,550 |
|
Exxon Mobil Corp. |
286,271 |
22,853,013 |
|
Marathon Oil Corp. |
4,500 |
123,120 |
|
Occidental Petroleum Corp. |
51,500 |
3,089,485 |
|
Peabody Energy Corp. |
8,927 |
203,089 |
|
Plains Exploration & Production Co. (a) |
6,100 |
141,764 |
|
Tesoro Corp. |
100 |
1,317 |
|
Valero Energy Corp. |
71,500 |
1,547,260 |
|
|
52,558,700 |
||
TOTAL ENERGY |
55,665,054 |
||
FINANCIALS - 15.2% |
|||
Capital Markets - 2.8% |
|||
Bank of New York Mellon Corp. |
35,000 |
991,550 |
|
BlackRock, Inc. Class A |
1,000 |
134,150 |
|
Charles Schwab Corp. |
100,000 |
1,617,000 |
|
Goldman Sachs Group, Inc. |
72,400 |
6,109,836 |
|
Janus Capital Group, Inc. |
78,700 |
631,961 |
|
Morgan Stanley |
120,000 |
1,924,800 |
|
State Street Corp. |
38,700 |
1,522,071 |
|
|
12,931,368 |
||
Commercial Banks - 3.5% |
|||
PNC Financial Services Group, Inc. |
40,000 |
1,960,000 |
|
U.S. Bancorp, Delaware |
5,000 |
125,050 |
|
Wachovia Corp. |
156,100 |
864,794 |
|
Wells Fargo & Co. |
445,574 |
13,135,522 |
|
|
16,085,366 |
||
Consumer Finance - 0.6% |
|||
Capital One Financial Corp. |
90,000 |
2,870,100 |
|
Diversified Financial Services - 5.9% |
|||
Bank of America Corp. |
547,080 |
7,702,886 |
|
Citigroup, Inc. |
408,300 |
2,739,693 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
FINANCIALS - continued |
|||
Diversified Financial Services - continued |
|||
CME Group, Inc. |
4,000 |
$ 832,440 |
|
JPMorgan Chase & Co. |
493,000 |
15,544,290 |
|
|
26,819,309 |
||
Insurance - 2.4% |
|||
ACE Ltd. |
16,100 |
852,012 |
|
American International Group, Inc. |
254,330 |
399,298 |
|
Berkshire Hathaway, Inc. Class B (a) |
560 |
1,799,840 |
|
Loews Corp. |
45,900 |
1,296,675 |
|
MetLife, Inc. |
27,500 |
958,650 |
|
Prudential Financial, Inc. |
16,600 |
502,316 |
|
The Chubb Corp. |
37,000 |
1,887,000 |
|
The Travelers Companies, Inc. |
68,900 |
3,114,280 |
|
|
10,810,071 |
||
TOTAL FINANCIALS |
69,516,214 |
||
HEALTH CARE - 15.6% |
|||
Biotechnology - 2.9% |
|||
Amgen, Inc. (a) |
92,590 |
5,347,073 |
|
Biogen Idec, Inc. (a) |
27,200 |
1,295,536 |
|
Genentech, Inc. (a) |
52,000 |
4,311,320 |
|
Gilead Sciences, Inc. (a) |
45,220 |
2,312,551 |
|
|
13,266,480 |
||
Health Care Equipment & Supplies - 2.0% |
|||
Baxter International, Inc. |
70,600 |
3,783,454 |
|
Boston Scientific Corp. (a) |
70,000 |
541,800 |
|
C.R. Bard, Inc. |
5,200 |
438,152 |
|
Covidien Ltd. |
50,000 |
1,812,000 |
|
Medtronic, Inc. |
88,300 |
2,774,386 |
|
|
9,349,792 |
||
Health Care Providers & Services - 2.8% |
|||
Express Scripts, Inc. (a) |
35,000 |
1,924,300 |
|
Humana, Inc. (a) |
80,400 |
2,997,312 |
|
Medco Health Solutions, Inc. (a) |
93,800 |
3,931,158 |
|
UnitedHealth Group, Inc. |
116,700 |
3,104,220 |
|
WellPoint, Inc. (a) |
21,900 |
922,647 |
|
|
12,879,637 |
||
Life Sciences Tools & Services - 0.0% |
|||
Thermo Fisher Scientific, Inc. (a) |
100 |
3,407 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
HEALTH CARE - continued |
|||
Pharmaceuticals - 7.9% |
|||
Abbott Laboratories |
89,600 |
$ 4,781,952 |
|
Allergan, Inc. |
1,000 |
40,320 |
|
Eli Lilly & Co. |
80,100 |
3,225,627 |
|
Johnson & Johnson |
223,300 |
13,360,039 |
|
Merck & Co., Inc. |
83,900 |
2,550,560 |
|
Pfizer, Inc. |
296,300 |
5,247,473 |
|
Schering-Plough Corp. |
75,100 |
1,278,953 |
|
Wyeth |
147,100 |
5,517,721 |
|
|
36,002,645 |
||
TOTAL HEALTH CARE |
71,501,961 |
||
INDUSTRIALS - 8.8% |
|||
Aerospace & Defense - 3.4% |
|||
General Dynamics Corp. |
38,500 |
2,217,215 |
|
Honeywell International, Inc. |
38,600 |
1,267,238 |
|
L-3 Communications Holdings, Inc. |
4,100 |
302,498 |
|
Lockheed Martin Corp. |
26,900 |
2,261,752 |
|
Northrop Grumman Corp. |
75,300 |
3,391,512 |
|
Raytheon Co. |
67,000 |
3,419,680 |
|
The Boeing Co. |
2,800 |
119,476 |
|
United Technologies Corp. |
50,900 |
2,728,240 |
|
|
15,707,611 |
||
Air Freight & Logistics - 0.3% |
|||
FedEx Corp. |
20,000 |
1,283,000 |
|
Commercial Services & Supplies - 0.3% |
|||
Republic Services, Inc. |
45,000 |
1,115,550 |
|
Waste Management, Inc. |
10,000 |
331,400 |
|
|
1,446,950 |
||
Industrial Conglomerates - 2.4% |
|||
General Electric Co. |
624,800 |
10,121,760 |
|
Tyco International Ltd. |
40,000 |
864,000 |
|
|
10,985,760 |
||
Machinery - 1.7% |
|||
Caterpillar, Inc. |
54,900 |
2,452,383 |
|
Cummins, Inc. |
35,000 |
935,550 |
|
Deere & Co. |
97,400 |
3,732,368 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
INDUSTRIALS - continued |
|||
Machinery - continued |
|||
Eaton Corp. |
700 |
$ 34,797 |
|
Navistar International Corp. (a) |
25,000 |
534,500 |
|
|
7,689,598 |
||
Road & Rail - 0.7% |
|||
CSX Corp. |
44,000 |
1,428,680 |
|
Norfolk Southern Corp. |
20,000 |
941,000 |
|
Union Pacific Corp. |
22,000 |
1,051,600 |
|
|
3,421,280 |
||
TOTAL INDUSTRIALS |
40,534,199 |
||
INFORMATION TECHNOLOGY - 18.3% |
|||
Communications Equipment - 2.6% |
|||
Cisco Systems, Inc. (a) |
428,900 |
6,991,070 |
|
Corning, Inc. |
112,100 |
1,068,313 |
|
Juniper Networks, Inc. (a) |
10,000 |
175,100 |
|
Nokia Corp. sponsored ADR |
35,400 |
552,240 |
|
QUALCOMM, Inc. |
88,700 |
3,178,121 |
|
|
11,964,844 |
||
Computers & Peripherals - 4.2% |
|||
Apple, Inc. (a) |
46,300 |
3,951,705 |
|
Hewlett-Packard Co. |
251,300 |
9,119,677 |
|
International Business Machines Corp. |
70,400 |
5,924,864 |
|
Western Digital Corp. (a) |
30,800 |
352,660 |
|
|
19,348,906 |
||
Electronic Equipment & Components - 0.2% |
|||
Tyco Electronics Ltd. |
51,600 |
836,436 |
|
Internet Software & Services - 1.1% |
|||
Google, Inc. Class A (sub. vtg.) (a) |
16,350 |
5,030,078 |
|
Yahoo!, Inc. (a) |
14,300 |
174,460 |
|
|
5,204,538 |
||
IT Services - 1.9% |
|||
Accenture Ltd. Class A |
152,200 |
4,990,638 |
|
MasterCard, Inc. Class A |
15,000 |
2,143,950 |
|
The Western Union Co. |
80,000 |
1,147,200 |
|
Visa, Inc. |
10,000 |
524,500 |
|
|
8,806,288 |
||
Semiconductors & Semiconductor Equipment - 3.4% |
|||
Applied Materials, Inc. |
520,918 |
5,276,899 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
INFORMATION TECHNOLOGY - continued |
|||
Semiconductors & Semiconductor Equipment - continued |
|||
ASML Holding NV (NY Shares) |
289,900 |
$ 5,238,493 |
|
Intel Corp. |
172,200 |
2,524,452 |
|
Texas Instruments, Inc. |
145,000 |
2,250,400 |
|
|
15,290,244 |
||
Software - 4.9% |
|||
Adobe Systems, Inc. (a) |
40,000 |
851,600 |
|
Microsoft Corp. |
631,000 |
12,266,640 |
|
Oracle Corp. (a) |
383,900 |
6,806,547 |
|
Symantec Corp. (a) |
168,300 |
2,275,416 |
|
|
22,200,203 |
||
TOTAL INFORMATION TECHNOLOGY |
83,651,459 |
||
MATERIALS - 1.7% |
|||
Chemicals - 1.1% |
|||
Celanese Corp. Class A |
75,880 |
943,188 |
|
CF Industries Holdings, Inc. |
10,000 |
491,600 |
|
FMC Corp. |
30,000 |
1,341,900 |
|
Lubrizol Corp. |
30,000 |
1,091,700 |
|
Monsanto Co. |
18,300 |
1,287,405 |
|
|
5,155,793 |
||
Metals & Mining - 0.6% |
|||
ArcelorMittal SA (NY Shares) Class A |
19,300 |
474,587 |
|
Barrick Gold Corp. |
37,800 |
1,389,034 |
|
Freeport-McMoRan Copper & Gold, Inc. Class B |
1,400 |
34,216 |
|
Rio Tinto PLC sponsored ADR |
5,000 |
444,550 |
|
United States Steel Corp. |
5,000 |
186,000 |
|
|
2,528,387 |
||
TOTAL MATERIALS |
7,684,180 |
||
TELECOMMUNICATION SERVICES - 4.0% |
|||
Diversified Telecommunication Services - 3.9% |
|||
AT&T, Inc. |
376,900 |
10,741,650 |
|
Qwest Communications International, Inc. |
50,000 |
182,000 |
|
Verizon Communications, Inc. |
211,800 |
7,180,020 |
|
|
18,103,670 |
||
Common Stocks - continued |
|||
Shares |
Value |
||
TELECOMMUNICATION SERVICES - continued |
|||
Wireless Telecommunication Services - 0.1% |
|||
Sprint Nextel Corp. |
150,000 |
$ 274,500 |
|
TOTAL TELECOMMUNICATION SERVICES |
18,378,170 |
||
UTILITIES - 2.1% |
|||
Electric Utilities - 1.4% |
|||
Entergy Corp. |
33,000 |
2,743,290 |
|
Exelon Corp. |
15,000 |
834,150 |
|
FirstEnergy Corp. |
60,000 |
2,914,800 |
|
|
6,492,240 |
||
Independent Power Producers & Energy Traders - 0.4% |
|||
AES Corp. (a) |
32,100 |
264,504 |
|
Constellation Energy Group, Inc. |
11,800 |
296,062 |
|
NRG Energy, Inc. (a) |
50,000 |
1,166,500 |
|
|
1,727,066 |
||
Multi-Utilities - 0.3% |
|||
Dominion Resources, Inc. |
20,000 |
716,800 |
|
Public Service Enterprise Group, Inc. |
27,300 |
796,341 |
|
|
1,513,141 |
||
TOTAL UTILITIES |
9,732,447 |
||
TOTAL COMMON STOCKS (Cost $586,447,960) |
448,796,536 |
||
Money Market Funds - 3.4% |
|||
|
|
|
|
Fidelity Cash Central Fund, 1.06% (b) |
11,065,456 |
11,065,456 |
|
Fidelity Securities Lending Cash Central Fund, 0.87% (b)(c) |
4,648,000 |
4,648,000 |
|
TOTAL MONEY MARKET FUNDS (Cost $15,713,456) |
15,713,456 |
||
TOTAL INVESTMENT PORTFOLIO - 101.3% (Cost $602,161,416) |
464,509,992 |
||
NET OTHER ASSETS - (1.3)% |
(6,094,728) |
||
NET ASSETS - 100% |
$ 458,415,264 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund |
Income earned |
Fidelity Cash Central Fund |
$ 62,471 |
Fidelity Securities Lending Cash Central Fund |
155,565 |
Total |
$ 218,036 |
Other Information |
The following is a summary of the inputs used, as of December 31, 2008, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
||||
Description |
Total |
Level 1 |
Level 2 |
Level 3 |
Investments in Securities |
$ 464,509,992 |
$ 464,509,992 |
$ - |
$ - |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
December 31, 2008 (Unaudited) |
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $4,631,200) - See accompanying schedule: Unaffiliated issuers (cost $586,447,960) |
$ 448,796,536 |
|
Fidelity Central Funds (cost $15,713,456) |
15,713,456 |
|
Total Investments (cost $602,161,416) |
|
$ 464,509,992 |
Receivable for investments sold |
|
18,069,846 |
Receivable for fund shares sold |
|
1,821,489 |
Dividends receivable |
|
829,237 |
Distributions receivable from Fidelity Central Funds |
|
15,012 |
Prepaid expenses |
|
5,678 |
Total assets |
|
485,251,254 |
|
|
|
Liabilities |
|
|
Payable for fund shares redeemed |
$ 21,866,576 |
|
Accrued management fee |
181,658 |
|
Distribution fees payable |
501 |
|
Other affiliated payables |
111,848 |
|
Other payables and accrued expenses |
27,407 |
|
Collateral on securities loaned, at value |
4,648,000 |
|
Total liabilities |
|
26,835,990 |
|
|
|
Net Assets |
|
$ 458,415,264 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 716,942,710 |
Undistributed net investment income |
|
74,156 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(120,950,178) |
Net unrealized appreciation (depreciation) on investments |
|
(137,651,424) |
Net Assets |
|
$ 458,415,264 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
|
December 31, 2008 (Unaudited) |
|
|
|
|
Calculation of Maximum Offering Price |
|
$ 6.94 |
|
|
|
Maximum offering price per share (100/94.25 of $6.94) |
|
$ 7.36 |
Class T: |
|
$ 6.95 |
|
|
|
Maximum offering price per share (100/96.50 of $6.95) |
|
$ 7.20 |
Class B: |
|
$ 6.95 |
|
|
|
Class C: |
|
$ 6.92 |
|
|
|
|
|
|
Mega Cap Stock: |
|
$ 6.95 |
|
|
|
Institutional Class: |
|
$ 6.95 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Six months ended December 31, 2008 (Unaudited) |
||
|
|
|
Investment Income |
|
|
Dividends |
|
$ 6,394,502 |
Interest |
|
11 |
Income from Fidelity Central Funds |
|
218,036 |
Total income |
|
6,612,549 |
|
|
|
Expenses |
|
|
Management fee |
$ 1,235,698 |
|
Transfer agent fees |
577,424 |
|
Distribution fees |
2,099 |
|
Accounting and security lending fees |
102,619 |
|
Custodian fees and expenses |
10,075 |
|
Independent trustees' compensation |
1,470 |
|
Registration fees |
37,552 |
|
Audit |
26,952 |
|
Legal |
2,591 |
|
Interest |
5,631 |
|
Miscellaneous |
26,850 |
|
Total expenses before reductions |
2,028,961 |
|
Expense reductions |
(21,633) |
2,007,328 |
Net investment income (loss) |
|
4,605,221 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities: |
|
|
Unaffiliated issuers |
(115,768,325) |
|
Foreign currency transactions |
(492) |
|
Total net realized gain (loss) |
|
(115,768,817) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(62,563,867) |
|
Assets and liabilities in foreign currencies |
(479) |
|
Total change in net unrealized appreciation (depreciation) |
|
(62,564,346) |
Net gain (loss) |
|
(178,333,163) |
Net increase (decrease) in net assets resulting from operations |
|
$ (173,727,942) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
|
Six months ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 4,605,221 |
$ 6,085,707 |
Net realized gain (loss) |
(115,768,817) |
(652,994) |
Change in net unrealized appreciation (depreciation) |
(62,564,346) |
(106,617,222) |
Net increase (decrease) in net assets resulting |
(173,727,942) |
(101,184,509) |
Distributions to shareholders from net investment income |
(8,071,102) |
(2,028,069) |
Distributions to shareholders from net realized gain |
(1,264,702) |
(12,126,374) |
Total distributions |
(9,335,804) |
(14,154,443) |
Share transactions - net increase (decrease) |
(26,603,680) |
578,258,425 |
Total increase (decrease) in net assets |
(209,667,426) |
462,919,473 |
|
|
|
Net Assets |
|
|
Beginning of period |
668,082,690 |
205,163,217 |
End of period (including undistributed net investment income of $74,156 and undistributed net investment income of $4,457,069, respectively) |
$ 458,415,264 |
$ 668,082,690 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended
|
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.89 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.05 |
.05 |
Net realized and unrealized gain (loss) |
(2.86) |
(.77) |
Total from investment operations |
(2.81) |
(.72) |
Distributions from net investment income |
(.12) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.14) |
- |
Net asset value, end of period |
$ 6.94 |
$ 9.89 |
Total Return B, C, D |
(28.66)% |
(6.79)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.10% A |
1.02% A |
Expenses net of fee waivers, if any |
1.10% A |
1.02% A |
Expenses net of all reductions |
1.10% A |
1.01% A |
Net investment income (loss) |
1.37% A |
1.24% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 509 |
$ 106 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.88 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.05 |
.04 |
Net realized and unrealized gain (loss) |
(2.88) |
(.77) |
Total from investment operations |
(2.83) |
(.73) |
Distributions from net investment income |
(.08) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.10) |
- |
Net asset value, end of period |
$ 6.95 |
$ 9.88 |
Total Return B, C, D |
(28.78)% |
(6.88)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.35% A |
1.32% A |
Expenses net of fee waivers, if any |
1.35% A |
1.32% A |
Expenses net of all reductions |
1.35% A |
1.32% A |
Net investment income (loss) |
1.12% A |
.89% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 160 |
$ 136 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.87 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.03 |
.02 |
Net realized and unrealized gain (loss) |
(2.88) |
(.76) |
Total from investment operations |
(2.85) |
(.74) |
Distributions from net investment income |
(.05) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.07) |
- |
Net asset value, end of period |
$ 6.95 |
$ 9.87 |
Total Return B, C, D |
(29.01)% |
(6.97)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.85% A |
1.73% A |
Expenses net of fee waivers, if any |
1.85% A |
1.73% A |
Expenses net of all reductions |
1.85% A |
1.73% A |
Net investment income (loss) |
.62% A |
.52% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 109 |
$ 107 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.87 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.03 |
.02 |
Net realized and unrealized gain (loss) |
(2.88) |
(.76) |
Total from investment operations |
(2.85) |
(.74) |
Distributions from net investment income |
(.08) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.10) |
- |
Net asset value, end of period |
$ 6.92 |
$ 9.87 |
Total Return B, C, D |
(29.02)% |
(6.97)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.80% A |
1.71% A |
Expenses net of fee waivers, if any |
1.80% A |
1.71% A |
Expenses net of all reductions |
1.80% A |
1.71% A |
Net investment income (loss) |
.67% A |
.55% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 477 |
$ 98 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Years ended June 30, |
||||
|
(Unaudited) |
2008 |
2007 |
2006 |
2005 |
2004 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period |
$ 9.91 |
$ 12.06 |
$ 10.31 |
$ 9.28 |
$ 9.24 |
$ 8.48 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D |
.07 |
.14 |
.09 |
.05 |
.14 G |
.06 |
Net realized and unrealized gain (loss) |
(2.89) |
(1.60) |
1.93 |
1.21 |
.02 |
.76 |
Total from investment operations |
(2.82) |
(1.46) |
2.02 |
1.26 |
.16 |
.82 |
Distributions from net investment income |
(.12) |
(.07) |
(.09) |
(.06) |
(.12) |
(.06) |
Distributions from net realized gain |
(.02) |
(.62) |
(.18) |
(.17) |
- |
- |
Total distributions |
(.14) |
(.69) |
(.27) |
(.23) |
(.12) |
(.06) |
Net asset value, end of period |
$ 6.95 |
$ 9.91 |
$ 12.06 |
$ 10.31 |
$ 9.28 |
$ 9.24 |
Total Return B, C |
(28.65)% |
(12.73)% |
20.05% |
13.63% |
1.71% |
9.68% |
Ratios to Average Net Assets E, H |
|
|
|
|
|
|
Expenses before reductions |
.76% A |
.75% |
.81% |
.86% |
.84% |
.86% |
Expenses net of fee waivers, if any |
.75% A |
.74% |
.81% |
.86% |
.84% |
.86% |
Expenses net of all reductions |
.75% A |
.74% |
.81% |
.82% |
.81% |
.85% |
Net investment income (loss) |
1.72% A |
1.28% |
.79% |
.51% |
1.52% G |
.72% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
$ 456,973 |
$ 667,542 |
$ 205,163 |
$ 182,834 |
$ 179,344 |
$ 209,344 |
Portfolio turnover rate F |
112% A |
97% |
94% |
180% |
79% |
26% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.03 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.15%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 G |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.91 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) D |
.07 |
.07 |
Net realized and unrealized gain (loss) |
(2.88) |
(.77) |
Total from investment operations |
(2.81) |
(.70) |
Distributions from net investment income |
(.13) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.15) |
- |
Net asset value, end of period |
$ 6.95 |
$ 9.91 |
Total Return B, C |
(28.59)% |
(6.60)% |
Ratios to Average Net Assets E, H |
|
|
Expenses before reductions |
.69% A |
.70% A |
Expenses net of fee waivers, if any |
.69% A |
.70% A |
Expenses net of all reductions |
.69% A |
.70% A |
Net investment income (loss) |
1.78% A |
1.57% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 188 |
$ 93 |
Portfolio turnover rate F |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
For the period ended December 31, 2008 (Unaudited)
1. Organization.
Fidelity Mega Cap Stock Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Mega Cap Stock and Institutional Class Shares, each of which has equal rights to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 |
Quoted prices in active markets for identical securities. |
Level 2 |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of December 31, 2008, for the Fund's investments, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation |
$ 12,991,808 |
Unrealized depreciation |
(161,209,957) |
Net unrealized appreciation (depreciation) |
$ (148,218,149) |
|
|
Cost for federal income tax purposes |
$ 612,728,141 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $305,296,191 and $346,010,520, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and a group fee rate that averaged 0.26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .46% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
|
Distribution |
Service |
Paid to |
Retained |
Class A |
0% |
.25% |
$ 326 |
$ 91 |
Class T |
.25% |
.25% |
362 |
196 |
Class B |
.75% |
.25% |
506 |
477 |
Class C |
.75% |
.25% |
905 |
687 |
|
|
|
$ 2,099 |
$ 1,451 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
|
Retained |
Class A |
$ 1,206 |
Class T |
10 |
Class B* |
41 |
Class C* |
- |
|
$ 1,257 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
|
Amount |
% of |
Class A |
$ 392 |
.30 |
Class T |
223 |
.31 |
Class B |
156 |
.31 |
Class C |
238 |
.26 |
Mega Cap Stock |
576,347 |
.22 |
Institutional Class |
68 |
.15 |
|
$ 577,424 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $7,216 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender |
Average Daily |
Weighted Average Interest Rate |
Interest |
Borrower |
$ 18,683,400 |
2.17% |
$ 5,631 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $652
Semiannual Report
7. Committed Line of Credit - continued
and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $155,565.
9. Expense Reductions.
Through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
|
Transfer Agent |
Mega Cap Stock |
$ 8 |
In addition, FMR voluntarily agreed to reimburse a portion of Mega Cap Stock's operating expenses. During the period, this reimbursement reduced the class's expenses by $21,625.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
|
Six months ended |
Year ended |
From net investment income |
|
|
Class A |
$ 5,012 |
$ - |
Class T |
1,485 |
- |
Class B |
634 |
- |
Class C |
2,462 |
- |
Mega Cap Stock |
8,059,632 |
2,028,069 |
Institutional Class |
1,877 |
- |
Total |
$ 8,071,102 |
$ 2,028,069 |
From net realized gain |
|
|
Class A |
$ 291 |
$ - |
Class T |
296 |
- |
Class B |
207 |
- |
Class C |
292 |
- |
Mega Cap Stock |
1,263,428 |
12,126,374 |
Institutional Class |
188 |
- |
Total |
$ 1,264,702 |
$ 12,126,374 |
12. Share Transactions.
Transactions for each class of shares were as follows:
|
Shares |
Dollars |
||
|
Six months ended December 31, 2008 |
Year ended |
Six months ended December 31, 2008 |
Year ended |
Class A |
|
|
|
|
Shares sold |
92,614 |
10,749 |
$ 666,998 |
$ 114,109 |
Reinvestment of distributions |
668 |
- |
4,811 |
- |
Shares redeemed |
(30,699) |
- |
(213,333) |
- |
Net increase (decrease) |
62,583 |
10,749 |
$ 458,476 |
$ 114,109 |
Class T |
|
|
|
|
Shares sold |
19,792 |
13,813 |
$ 138,373 |
$ 145,705 |
Reinvestment of distributions |
225 |
- |
1,781 |
- |
Shares redeemed |
(10,735) |
(75) |
(72,562) |
(773) |
Net increase (decrease) |
9,282 |
13,738 |
$ 67,592 |
$ 144,932 |
Semiannual Report
12. Share Transactions - continued
|
Shares |
Dollars |
||
|
Six months ended December 31, 2008 |
Year ended |
Six months ended December 31, 2008 |
Year ended |
Class B |
|
|
|
|
Shares sold |
5,536 |
10,836 |
$ 41,197 |
$ 114,788 |
Reinvestment of distributions |
106 |
- |
833 |
- |
Shares redeemed |
(808) |
(9) |
(7,337) |
(99) |
Net increase (decrease) |
4,834 |
10,827 |
$ 34,693 |
$ 114,689 |
Class C |
|
|
|
|
Shares sold |
61,613 |
9,953 |
$ 454,109 |
$ 105,728 |
Reinvestment of distributions |
373 |
- |
2,754 |
- |
Shares redeemed |
(3,012) |
- |
(18,812) |
- |
Net increase (decrease) |
58,974 |
9,953 |
$ 438,051 |
$ 105,728 |
Mega Cap Stock |
|
|
|
|
Shares sold |
22,345,635 |
62,330,525 |
$ 171,418,950 |
$ 706,742,566 |
Reinvestment of distributions |
1,015,272 |
1,173,267 |
8,283,272 |
13,245,178 |
Shares redeemed |
(25,020,288) |
(13,126,183) |
(207,426,868) |
(142,308,777) |
Net increase (decrease) |
(1,659,381) |
50,377,609 |
$ (27,724,646) |
$ 577,678,967 |
Institutional Class |
|
|
|
|
Shares sold |
17,421 |
9,425 |
$ 120,754 |
$ 100,000 |
Reinvestment of distributions |
172 |
- |
1,400 |
- |
Net increase (decrease) |
17,593 |
9,425 |
$ 122,154 |
$ 100,000 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
Semiannual Report
Fidelity Mega Cap Stock Fund (formerly known as Fidelity Growth & Income II Portfolio)
Each year, typically in July, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly and, acting directly and through its separate committees, requests and receives information concerning, and considers at each of its meetings factors that are relevant to, its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. Each committee has a written charter outlining the structure and purposes of the committee. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.
At its July 2008 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders. The Board also approved agreements with foreign sub-advisers Fidelity Management & Research (Japan) Inc. and Fidelity Management & Research (Hong Kong) Limited, as well as amendments to the fund's agreement with Fidelity Management & Research (U.K.) Inc.
In considering whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund's shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Semiannual Report
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the backgrounds of the fund's investment personnel and the fund's investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services. The Board further considered that Fidelity voluntarily pays for market data out of its own resources.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge. The Board noted that Fidelity has taken a number of actions over the previous year that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) contractually agreeing to reduce the management fees on Fidelity's Institutional Money Market Funds and launching Class IV and Institutional Class of certain of these funds; (iii) reducing the transfer agent fees for the Fidelity Select Portfolios and Investor Class of the VIP funds; and (iv) launching Class K of 29 equity funds as a lower-fee class available to certain employer-sponsored retirement plans.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund's absolute investment performance, as well as the fund's relative investment performance measured against (i) a broad-based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one-, three-, and five-year periods ended December 31, 2007, the fund's cumulative total returns, the cumulative total returns of a broad-based securities market index ("benchmark"), and a range of cumulative total returns of a peer group of mutual funds identified by Morningstar, Inc. as having an investment style similar to that of the fund based on underlying portfolio holdings. (The fund did not offer Advisor classes as of Decem-ber 31, 2007.) The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the peer group whose performance was equal to or lower than that of the fund.
Semiannual Report
Fidelity Mega Cap Stock Fund
The Board reviewed the fund's relative investment performance against its peer group and stated that the performance of the fund was in the first quartile for the one- and three-year periods and the third quartile for the five-year period. The Board also stated that the investment performance of the fund compared favorably to its benchmark for the one- and three-year periods, although the fund's five-year cumulative total return was lower than its benchmark.
The Board considered that FMR has taken steps to refocus and strengthen equity research, equity portfolio management, and compliance.
Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's management fee and total expenses compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board's management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared. The Board also considered supplemental information about how the fund's management fee and total expenses ranked relative to groups based on Lipper classifications, which take into account a fund's market capitalization and style.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a TMG % of 11% means that 89% of the funds in the Total Mapped Group had higher management fees than the fund. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to non-Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee ranked, is also included in the chart and considered by the Board.
Fidelity Mega Cap Stock Fund
The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2007.
Based on its review, the Board concluded that the fund's management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
Semiannual Report
In its review of the fund's total expenses, the Board considered the fund's management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered current and historical total expenses of the fund compared to competitive fund median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund's total expenses ranked below its competitive median for 2007.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund's total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of the results of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of Fidelity's methodologies used in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board has also reviewed Fidelity's non-fund businesses and any fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including (i) fund performance trends and actions to be taken by FMR to improve certain funds' overall performance; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability and the extent to which portfolio manager compensation is linked to fund performance; (v) Fidelity's fee structures and rationale for recommending different fees among categories of funds; and (vi) Fidelity's rationale for recommending which funds should have a performance adjustment component as part of their management fees.
Semiannual Report
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Semiannual Report
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Semiannual Report
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)
For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Semiannual Report
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
15445 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
2000 Avenue of the Stars
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
123 South Lake Avenue
Pasadena, CA
16656 Bernardo Ctr. Drive
Rancho Bernardo, CA
1220 Roseville Parkway
Roseville, CA
1740 Arden Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
11943 El Camino Real
San Diego, CA
8 Montgomery Street
San Francisco, CA
3793 State Street
Santa Barbara, CA
1200 Wilshire Boulevard
Santa Monica, CA
398 West El Camino Real
Sunnyvale, CA
111 South Westlake Blvd
Thousand Oaks, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6326 Canoga Avenue
Woodland Hills, CA
Colorado
281 East Flatiron Circle
Broomfield, CO
1625 Broadway
Denver, CO
9185 Westview Road
Lone Tree, CO
Connecticut
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
Delaware
400 Delaware Avenue
Wilmington, DE
Florida
175 East Altamonte Drive
Altamonte Springs, FL
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
4671 Town Center Parkway
Jacksonville, FL
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
Palm Beach, FL
3501 PGA Boulevard
Palm Beach Gardens, FL
3550 Tamiami Trail, South
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
2465 State Road 7
Wellington, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7315 Wisconsin Avenue
Bethesda, MD
610 York Road
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
238 Main Street
Cambridge, MA
200 Endicott Street
Danvers, MA
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
Novi, MI
Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
980 Madison Avenue
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
200 Fifth Avenue
New York, NY
733 Third Avenue
New York, NY
11 Penn Plaza
New York, NY
2070 Broadway
New York, NY
1075 Northern Blvd.
Roslyn, NY
799 Central Park Avenue
Scarsdale, NY
North Carolina
4611 Sharon Road
Charlotte, NC
7011 Fayetteville Road
Durham, NC
Ohio
3805 Edwards Road
Cincinnati, OH
1324 Polaris Parkway
Columbus, OH
1800 Crocker Road
Westlake, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
7493 SW Bridgeport Road
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, TN
Texas
10000 Research Boulevard
Austin, TX
4001 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6560 Fannin Street
Houston, TX
1701 Lake Robbins Drive
The Woodlands, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
San Antonio, TX
1576 East Southlake Blvd.
Southlake, TX
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
FIL Investment Advisors
FIL Investment Advisors (U.K.) Ltd.
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations, Co.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) 1-800-544-5555
Automated line for quickest service
GII-USAN-0209-01 1.787781.106
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Mega Cap Stock
Fund - Class A, Class T, Class B
and Class C
Semiannual Report
December 31, 2008
Class A, Class T, Class B,
and Class C are classes of
Fidelity® Mega Cap Stock Fund
(2_fidelity_logos) (Registered_Trademark)
Chairman's Message |
Ned Johnson's message to shareholders. |
|
Shareholder Expense Example |
An example of shareholder expenses. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
|
Notes |
Notes to the financial statements. |
|
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
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.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
An all-out credit crisis gripped the world's capital markets in 2008, stunting economic growth, toppling commodity prices and pushing equity markets into their steepest declines in decades. Within this ultra-risk-averse climate, virtually the only positive results came from the relative security of U.S. government-backed assets. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2008 to December 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Semiannual Report
Shareholder Expense Example - continued
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
Annualized |
Beginning |
Ending |
Expenses Paid |
Class A |
1.10% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 713.40 |
$ 4.75 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,019.66 |
$ 5.60 |
Class T |
1.35% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 712.20 |
$ 5.83 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,018.40 |
$ 6.87 |
Class B |
1.85% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 709.90 |
$ 7.97 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,015.88 |
$ 9.40 |
Class C |
1.80% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 709.80 |
$ 7.76 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,016.13 |
$ 9.15 |
Mega Cap Stock |
.75% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 713.50 |
$ 3.24 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,021.42 |
$ 3.82 |
Institutional Class |
.69% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 714.10 |
$ 2.98 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,021.73 |
$ 3.52 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Top Ten Stocks as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Exxon Mobil Corp. |
5.0 |
5.2 |
JPMorgan Chase & Co. |
3.4 |
2.6 |
Johnson & Johnson |
2.9 |
2.6 |
Wells Fargo & Co. |
2.9 |
1.2 |
Microsoft Corp. |
2.7 |
2.8 |
ConocoPhillips |
2.4 |
2.1 |
AT&T, Inc. |
2.3 |
2.7 |
General Electric Co. |
2.2 |
0.7 |
Wal-Mart Stores, Inc. |
2.2 |
1.6 |
Hewlett-Packard Co. |
2.0 |
3.4 |
|
28.0 |
|
Top Five Market Sectors as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Information Technology |
18.3 |
20.5 |
Health Care |
15.6 |
12.6 |
Financials |
15.2 |
15.9 |
Energy |
12.1 |
16.6 |
Consumer Staples |
10.7 |
8.6 |
Asset Allocation (% of fund's net assets) |
|||||||
As of December 31, 2008 * |
As of June 30, 2008 ** |
||||||
Stocks 97.9% |
|
Stocks 100.0% |
|
||||
Short-Term |
|
Short-Term |
|
||||
* Foreign investments |
4.2% |
|
** Foreign investments |
4.9% |
|
Semiannual Report
Showing Percentage of Net Assets
Common Stocks - 97.9% |
|||
Shares |
Value |
||
CONSUMER DISCRETIONARY - 9.4% |
|||
Auto Components - 0.2% |
|||
Magna International, Inc. Class A |
23,000 |
$ 694,707 |
|
Hotels, Restaurants & Leisure - 1.6% |
|||
McDonald's Corp. |
112,000 |
6,965,280 |
|
Starbucks Corp. (a) |
40,000 |
378,400 |
|
|
7,343,680 |
||
Household Durables - 1.5% |
|||
NVR, Inc. (a) |
2,000 |
912,500 |
|
Whirlpool Corp. (d) |
139,900 |
5,784,865 |
|
|
6,697,365 |
||
Media - 2.7% |
|||
Comcast Corp. Class A (special) (non-vtg.) |
190,000 |
3,068,500 |
|
News Corp. Class A |
50,100 |
455,409 |
|
Omnicom Group, Inc. |
11,100 |
298,812 |
|
The DIRECTV Group, Inc. (a) |
67,400 |
1,544,134 |
|
The Walt Disney Co. |
210,900 |
4,785,321 |
|
Time Warner, Inc. |
192,100 |
1,932,526 |
|
Viacom, Inc. Class B (non-vtg.) (a) |
23,300 |
444,098 |
|
|
12,528,800 |
||
Multiline Retail - 0.0% |
|||
Kohl's Corp. (a) |
1,000 |
36,200 |
|
Target Corp. |
3,400 |
117,402 |
|
|
153,602 |
||
Specialty Retail - 2.2% |
|||
Abercrombie & Fitch Co. Class A |
6,100 |
140,727 |
|
Best Buy Co., Inc. |
41,000 |
1,152,510 |
|
Home Depot, Inc. |
183,000 |
4,212,660 |
|
Lowe's Companies, Inc. |
130,000 |
2,797,600 |
|
Staples, Inc. |
80,643 |
1,445,123 |
|
TJX Companies, Inc. |
20,000 |
411,400 |
|
|
10,160,020 |
||
Textiles, Apparel & Luxury Goods - 1.2% |
|||
Coach, Inc. (a) |
50,000 |
1,038,500 |
|
NIKE, Inc. Class B |
89,000 |
4,539,000 |
|
|
5,577,500 |
||
TOTAL CONSUMER DISCRETIONARY |
43,155,674 |
||
Common Stocks - continued |
|||
Shares |
Value |
||
CONSUMER STAPLES - 10.7% |
|||
Beverages - 1.8% |
|||
Coca-Cola Enterprises, Inc. |
24,300 |
$ 292,329 |
|
Molson Coors Brewing Co. Class B |
75,293 |
3,683,334 |
|
The Coca-Cola Co. |
94,300 |
4,268,961 |
|
|
8,244,624 |
||
Food & Staples Retailing - 3.7% |
|||
CVS Caremark Corp. |
148,700 |
4,273,638 |
|
Kroger Co. |
77,700 |
2,052,057 |
|
Wal-Mart Stores, Inc. |
178,584 |
10,011,419 |
|
Walgreen Co. |
20,000 |
493,400 |
|
|
16,830,514 |
||
Food Products - 0.3% |
|||
Archer Daniels Midland Co. |
300 |
8,649 |
|
Kellogg Co. |
25,200 |
1,105,020 |
|
Tyson Foods, Inc. Class A |
51,300 |
449,388 |
|
|
1,563,057 |
||
Household Products - 1.8% |
|||
Kimberly-Clark Corp. |
10,000 |
527,400 |
|
Procter & Gamble Co. |
123,200 |
7,616,224 |
|
|
8,143,624 |
||
Personal Products - 0.2% |
|||
Avon Products, Inc. |
40,000 |
961,200 |
|
Tobacco - 2.9% |
|||
Altria Group, Inc. |
429,130 |
6,462,698 |
|
Philip Morris International, Inc. |
155,630 |
6,771,461 |
|
|
13,234,159 |
||
TOTAL CONSUMER STAPLES |
48,977,178 |
||
ENERGY - 12.1% |
|||
Energy Equipment & Services - 0.7% |
|||
ENSCO International, Inc. |
43,700 |
1,240,643 |
|
Halliburton Co. |
53,400 |
970,812 |
|
National Oilwell Varco, Inc. (a) |
5,000 |
122,200 |
|
Noble Corp. |
8,900 |
196,601 |
|
Schlumberger Ltd. (NY Shares) |
715 |
30,266 |
|
Transocean Ltd. (a) |
11,552 |
545,832 |
|
|
3,106,354 |
||
Oil, Gas & Consumable Fuels - 11.4% |
|||
Alpha Natural Resources, Inc. (a) |
30,000 |
485,700 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
ENERGY - continued |
|||
Oil, Gas & Consumable Fuels - continued |
|||
Apache Corp. |
36,800 |
$ 2,742,704 |
|
Chesapeake Energy Corp. |
95,000 |
1,536,150 |
|
Chevron Corp. |
118,400 |
8,758,048 |
|
ConocoPhillips |
207,500 |
10,748,500 |
|
Devon Energy Corp. |
5,000 |
328,550 |
|
Exxon Mobil Corp. |
286,271 |
22,853,013 |
|
Marathon Oil Corp. |
4,500 |
123,120 |
|
Occidental Petroleum Corp. |
51,500 |
3,089,485 |
|
Peabody Energy Corp. |
8,927 |
203,089 |
|
Plains Exploration & Production Co. (a) |
6,100 |
141,764 |
|
Tesoro Corp. |
100 |
1,317 |
|
Valero Energy Corp. |
71,500 |
1,547,260 |
|
|
52,558,700 |
||
TOTAL ENERGY |
55,665,054 |
||
FINANCIALS - 15.2% |
|||
Capital Markets - 2.8% |
|||
Bank of New York Mellon Corp. |
35,000 |
991,550 |
|
BlackRock, Inc. Class A |
1,000 |
134,150 |
|
Charles Schwab Corp. |
100,000 |
1,617,000 |
|
Goldman Sachs Group, Inc. |
72,400 |
6,109,836 |
|
Janus Capital Group, Inc. |
78,700 |
631,961 |
|
Morgan Stanley |
120,000 |
1,924,800 |
|
State Street Corp. |
38,700 |
1,522,071 |
|
|
12,931,368 |
||
Commercial Banks - 3.5% |
|||
PNC Financial Services Group, Inc. |
40,000 |
1,960,000 |
|
U.S. Bancorp, Delaware |
5,000 |
125,050 |
|
Wachovia Corp. |
156,100 |
864,794 |
|
Wells Fargo & Co. |
445,574 |
13,135,522 |
|
|
16,085,366 |
||
Consumer Finance - 0.6% |
|||
Capital One Financial Corp. |
90,000 |
2,870,100 |
|
Diversified Financial Services - 5.9% |
|||
Bank of America Corp. |
547,080 |
7,702,886 |
|
Citigroup, Inc. |
408,300 |
2,739,693 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
FINANCIALS - continued |
|||
Diversified Financial Services - continued |
|||
CME Group, Inc. |
4,000 |
$ 832,440 |
|
JPMorgan Chase & Co. |
493,000 |
15,544,290 |
|
|
26,819,309 |
||
Insurance - 2.4% |
|||
ACE Ltd. |
16,100 |
852,012 |
|
American International Group, Inc. |
254,330 |
399,298 |
|
Berkshire Hathaway, Inc. Class B (a) |
560 |
1,799,840 |
|
Loews Corp. |
45,900 |
1,296,675 |
|
MetLife, Inc. |
27,500 |
958,650 |
|
Prudential Financial, Inc. |
16,600 |
502,316 |
|
The Chubb Corp. |
37,000 |
1,887,000 |
|
The Travelers Companies, Inc. |
68,900 |
3,114,280 |
|
|
10,810,071 |
||
TOTAL FINANCIALS |
69,516,214 |
||
HEALTH CARE - 15.6% |
|||
Biotechnology - 2.9% |
|||
Amgen, Inc. (a) |
92,590 |
5,347,073 |
|
Biogen Idec, Inc. (a) |
27,200 |
1,295,536 |
|
Genentech, Inc. (a) |
52,000 |
4,311,320 |
|
Gilead Sciences, Inc. (a) |
45,220 |
2,312,551 |
|
|
13,266,480 |
||
Health Care Equipment & Supplies - 2.0% |
|||
Baxter International, Inc. |
70,600 |
3,783,454 |
|
Boston Scientific Corp. (a) |
70,000 |
541,800 |
|
C.R. Bard, Inc. |
5,200 |
438,152 |
|
Covidien Ltd. |
50,000 |
1,812,000 |
|
Medtronic, Inc. |
88,300 |
2,774,386 |
|
|
9,349,792 |
||
Health Care Providers & Services - 2.8% |
|||
Express Scripts, Inc. (a) |
35,000 |
1,924,300 |
|
Humana, Inc. (a) |
80,400 |
2,997,312 |
|
Medco Health Solutions, Inc. (a) |
93,800 |
3,931,158 |
|
UnitedHealth Group, Inc. |
116,700 |
3,104,220 |
|
WellPoint, Inc. (a) |
21,900 |
922,647 |
|
|
12,879,637 |
||
Life Sciences Tools & Services - 0.0% |
|||
Thermo Fisher Scientific, Inc. (a) |
100 |
3,407 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
HEALTH CARE - continued |
|||
Pharmaceuticals - 7.9% |
|||
Abbott Laboratories |
89,600 |
$ 4,781,952 |
|
Allergan, Inc. |
1,000 |
40,320 |
|
Eli Lilly & Co. |
80,100 |
3,225,627 |
|
Johnson & Johnson |
223,300 |
13,360,039 |
|
Merck & Co., Inc. |
83,900 |
2,550,560 |
|
Pfizer, Inc. |
296,300 |
5,247,473 |
|
Schering-Plough Corp. |
75,100 |
1,278,953 |
|
Wyeth |
147,100 |
5,517,721 |
|
|
36,002,645 |
||
TOTAL HEALTH CARE |
71,501,961 |
||
INDUSTRIALS - 8.8% |
|||
Aerospace & Defense - 3.4% |
|||
General Dynamics Corp. |
38,500 |
2,217,215 |
|
Honeywell International, Inc. |
38,600 |
1,267,238 |
|
L-3 Communications Holdings, Inc. |
4,100 |
302,498 |
|
Lockheed Martin Corp. |
26,900 |
2,261,752 |
|
Northrop Grumman Corp. |
75,300 |
3,391,512 |
|
Raytheon Co. |
67,000 |
3,419,680 |
|
The Boeing Co. |
2,800 |
119,476 |
|
United Technologies Corp. |
50,900 |
2,728,240 |
|
|
15,707,611 |
||
Air Freight & Logistics - 0.3% |
|||
FedEx Corp. |
20,000 |
1,283,000 |
|
Commercial Services & Supplies - 0.3% |
|||
Republic Services, Inc. |
45,000 |
1,115,550 |
|
Waste Management, Inc. |
10,000 |
331,400 |
|
|
1,446,950 |
||
Industrial Conglomerates - 2.4% |
|||
General Electric Co. |
624,800 |
10,121,760 |
|
Tyco International Ltd. |
40,000 |
864,000 |
|
|
10,985,760 |
||
Machinery - 1.7% |
|||
Caterpillar, Inc. |
54,900 |
2,452,383 |
|
Cummins, Inc. |
35,000 |
935,550 |
|
Deere & Co. |
97,400 |
3,732,368 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
INDUSTRIALS - continued |
|||
Machinery - continued |
|||
Eaton Corp. |
700 |
$ 34,797 |
|
Navistar International Corp. (a) |
25,000 |
534,500 |
|
|
7,689,598 |
||
Road & Rail - 0.7% |
|||
CSX Corp. |
44,000 |
1,428,680 |
|
Norfolk Southern Corp. |
20,000 |
941,000 |
|
Union Pacific Corp. |
22,000 |
1,051,600 |
|
|
3,421,280 |
||
TOTAL INDUSTRIALS |
40,534,199 |
||
INFORMATION TECHNOLOGY - 18.3% |
|||
Communications Equipment - 2.6% |
|||
Cisco Systems, Inc. (a) |
428,900 |
6,991,070 |
|
Corning, Inc. |
112,100 |
1,068,313 |
|
Juniper Networks, Inc. (a) |
10,000 |
175,100 |
|
Nokia Corp. sponsored ADR |
35,400 |
552,240 |
|
QUALCOMM, Inc. |
88,700 |
3,178,121 |
|
|
11,964,844 |
||
Computers & Peripherals - 4.2% |
|||
Apple, Inc. (a) |
46,300 |
3,951,705 |
|
Hewlett-Packard Co. |
251,300 |
9,119,677 |
|
International Business Machines Corp. |
70,400 |
5,924,864 |
|
Western Digital Corp. (a) |
30,800 |
352,660 |
|
|
19,348,906 |
||
Electronic Equipment & Components - 0.2% |
|||
Tyco Electronics Ltd. |
51,600 |
836,436 |
|
Internet Software & Services - 1.1% |
|||
Google, Inc. Class A (sub. vtg.) (a) |
16,350 |
5,030,078 |
|
Yahoo!, Inc. (a) |
14,300 |
174,460 |
|
|
5,204,538 |
||
IT Services - 1.9% |
|||
Accenture Ltd. Class A |
152,200 |
4,990,638 |
|
MasterCard, Inc. Class A |
15,000 |
2,143,950 |
|
The Western Union Co. |
80,000 |
1,147,200 |
|
Visa, Inc. |
10,000 |
524,500 |
|
|
8,806,288 |
||
Semiconductors & Semiconductor Equipment - 3.4% |
|||
Applied Materials, Inc. |
520,918 |
5,276,899 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
INFORMATION TECHNOLOGY - continued |
|||
Semiconductors & Semiconductor Equipment - continued |
|||
ASML Holding NV (NY Shares) |
289,900 |
$ 5,238,493 |
|
Intel Corp. |
172,200 |
2,524,452 |
|
Texas Instruments, Inc. |
145,000 |
2,250,400 |
|
|
15,290,244 |
||
Software - 4.9% |
|||
Adobe Systems, Inc. (a) |
40,000 |
851,600 |
|
Microsoft Corp. |
631,000 |
12,266,640 |
|
Oracle Corp. (a) |
383,900 |
6,806,547 |
|
Symantec Corp. (a) |
168,300 |
2,275,416 |
|
|
22,200,203 |
||
TOTAL INFORMATION TECHNOLOGY |
83,651,459 |
||
MATERIALS - 1.7% |
|||
Chemicals - 1.1% |
|||
Celanese Corp. Class A |
75,880 |
943,188 |
|
CF Industries Holdings, Inc. |
10,000 |
491,600 |
|
FMC Corp. |
30,000 |
1,341,900 |
|
Lubrizol Corp. |
30,000 |
1,091,700 |
|
Monsanto Co. |
18,300 |
1,287,405 |
|
|
5,155,793 |
||
Metals & Mining - 0.6% |
|||
ArcelorMittal SA (NY Shares) Class A |
19,300 |
474,587 |
|
Barrick Gold Corp. |
37,800 |
1,389,034 |
|
Freeport-McMoRan Copper & Gold, Inc. Class B |
1,400 |
34,216 |
|
Rio Tinto PLC sponsored ADR |
5,000 |
444,550 |
|
United States Steel Corp. |
5,000 |
186,000 |
|
|
2,528,387 |
||
TOTAL MATERIALS |
7,684,180 |
||
TELECOMMUNICATION SERVICES - 4.0% |
|||
Diversified Telecommunication Services - 3.9% |
|||
AT&T, Inc. |
376,900 |
10,741,650 |
|
Qwest Communications International, Inc. |
50,000 |
182,000 |
|
Verizon Communications, Inc. |
211,800 |
7,180,020 |
|
|
18,103,670 |
||
Common Stocks - continued |
|||
Shares |
Value |
||
TELECOMMUNICATION SERVICES - continued |
|||
Wireless Telecommunication Services - 0.1% |
|||
Sprint Nextel Corp. |
150,000 |
$ 274,500 |
|
TOTAL TELECOMMUNICATION SERVICES |
18,378,170 |
||
UTILITIES - 2.1% |
|||
Electric Utilities - 1.4% |
|||
Entergy Corp. |
33,000 |
2,743,290 |
|
Exelon Corp. |
15,000 |
834,150 |
|
FirstEnergy Corp. |
60,000 |
2,914,800 |
|
|
6,492,240 |
||
Independent Power Producers & Energy Traders - 0.4% |
|||
AES Corp. (a) |
32,100 |
264,504 |
|
Constellation Energy Group, Inc. |
11,800 |
296,062 |
|
NRG Energy, Inc. (a) |
50,000 |
1,166,500 |
|
|
1,727,066 |
||
Multi-Utilities - 0.3% |
|||
Dominion Resources, Inc. |
20,000 |
716,800 |
|
Public Service Enterprise Group, Inc. |
27,300 |
796,341 |
|
|
1,513,141 |
||
TOTAL UTILITIES |
9,732,447 |
||
TOTAL COMMON STOCKS (Cost $586,447,960) |
448,796,536 |
||
Money Market Funds - 3.4% |
|||
|
|
|
|
Fidelity Cash Central Fund, 1.06% (b) |
11,065,456 |
11,065,456 |
|
Fidelity Securities Lending Cash Central Fund, 0.87% (b)(c) |
4,648,000 |
4,648,000 |
|
TOTAL MONEY MARKET FUNDS (Cost $15,713,456) |
15,713,456 |
||
TOTAL INVESTMENT PORTFOLIO - 101.3% (Cost $602,161,416) |
464,509,992 |
||
NET OTHER ASSETS - (1.3)% |
(6,094,728) |
||
NET ASSETS - 100% |
$ 458,415,264 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund |
Income earned |
Fidelity Cash Central Fund |
$ 62,471 |
Fidelity Securities Lending Cash Central Fund |
155,565 |
Total |
$ 218,036 |
Other Information |
The following is a summary of the inputs used, as of December 31, 2008, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
||||
Description |
Total |
Level 1 |
Level 2 |
Level 3 |
Investments in Securities |
$ 464,509,992 |
$ 464,509,992 |
$ - |
$ - |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
December 31, 2008 (Unaudited) |
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $4,631,200) - See accompanying schedule: Unaffiliated issuers (cost $586,447,960) |
$ 448,796,536 |
|
Fidelity Central Funds (cost $15,713,456) |
15,713,456 |
|
Total Investments (cost $602,161,416) |
|
$ 464,509,992 |
Receivable for investments sold |
|
18,069,846 |
Receivable for fund shares sold |
|
1,821,489 |
Dividends receivable |
|
829,237 |
Distributions receivable from Fidelity Central Funds |
|
15,012 |
Prepaid expenses |
|
5,678 |
Total assets |
|
485,251,254 |
|
|
|
Liabilities |
|
|
Payable for fund shares redeemed |
$ 21,866,576 |
|
Accrued management fee |
181,658 |
|
Distribution fees payable |
501 |
|
Other affiliated payables |
111,848 |
|
Other payables and accrued expenses |
27,407 |
|
Collateral on securities loaned, at value |
4,648,000 |
|
Total liabilities |
|
26,835,990 |
|
|
|
Net Assets |
|
$ 458,415,264 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 716,942,710 |
Undistributed net investment income |
|
74,156 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(120,950,178) |
Net unrealized appreciation (depreciation) on investments |
|
(137,651,424) |
Net Assets |
|
$ 458,415,264 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
|
December 31, 2008 (Unaudited) |
|
|
|
|
Calculation of Maximum Offering Price |
|
$ 6.94 |
|
|
|
Maximum offering price per share (100/94.25 of $6.94) |
|
$ 7.36 |
Class T: |
|
$ 6.95 |
|
|
|
Maximum offering price per share (100/96.50 of $6.95) |
|
$ 7.20 |
Class B: |
|
$ 6.95 |
|
|
|
Class C: |
|
$ 6.92 |
|
|
|
|
|
|
Mega Cap Stock: |
|
$ 6.95 |
|
|
|
Institutional Class: |
|
$ 6.95 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Six months ended December 31, 2008 (Unaudited) |
||
|
|
|
Investment Income |
|
|
Dividends |
|
$ 6,394,502 |
Interest |
|
11 |
Income from Fidelity Central Funds |
|
218,036 |
Total income |
|
6,612,549 |
|
|
|
Expenses |
|
|
Management fee |
$ 1,235,698 |
|
Transfer agent fees |
577,424 |
|
Distribution fees |
2,099 |
|
Accounting and security lending fees |
102,619 |
|
Custodian fees and expenses |
10,075 |
|
Independent trustees' compensation |
1,470 |
|
Registration fees |
37,552 |
|
Audit |
26,952 |
|
Legal |
2,591 |
|
Interest |
5,631 |
|
Miscellaneous |
26,850 |
|
Total expenses before reductions |
2,028,961 |
|
Expense reductions |
(21,633) |
2,007,328 |
Net investment income (loss) |
|
4,605,221 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities: |
|
|
Unaffiliated issuers |
(115,768,325) |
|
Foreign currency transactions |
(492) |
|
Total net realized gain (loss) |
|
(115,768,817) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(62,563,867) |
|
Assets and liabilities in foreign currencies |
(479) |
|
Total change in net unrealized appreciation (depreciation) |
|
(62,564,346) |
Net gain (loss) |
|
(178,333,163) |
Net increase (decrease) in net assets resulting from operations |
|
$ (173,727,942) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
|
Six months ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 4,605,221 |
$ 6,085,707 |
Net realized gain (loss) |
(115,768,817) |
(652,994) |
Change in net unrealized appreciation (depreciation) |
(62,564,346) |
(106,617,222) |
Net increase (decrease) in net assets resulting |
(173,727,942) |
(101,184,509) |
Distributions to shareholders from net investment income |
(8,071,102) |
(2,028,069) |
Distributions to shareholders from net realized gain |
(1,264,702) |
(12,126,374) |
Total distributions |
(9,335,804) |
(14,154,443) |
Share transactions - net increase (decrease) |
(26,603,680) |
578,258,425 |
Total increase (decrease) in net assets |
(209,667,426) |
462,919,473 |
|
|
|
Net Assets |
|
|
Beginning of period |
668,082,690 |
205,163,217 |
End of period (including undistributed net investment income of $74,156 and undistributed net investment income of $4,457,069, respectively) |
$ 458,415,264 |
$ 668,082,690 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended
|
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.89 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.05 |
.05 |
Net realized and unrealized gain (loss) |
(2.86) |
(.77) |
Total from investment operations |
(2.81) |
(.72) |
Distributions from net investment income |
(.12) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.14) |
- |
Net asset value, end of period |
$ 6.94 |
$ 9.89 |
Total Return B, C, D |
(28.66)% |
(6.79)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.10% A |
1.02% A |
Expenses net of fee waivers, if any |
1.10% A |
1.02% A |
Expenses net of all reductions |
1.10% A |
1.01% A |
Net investment income (loss) |
1.37% A |
1.24% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 509 |
$ 106 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.88 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.05 |
.04 |
Net realized and unrealized gain (loss) |
(2.88) |
(.77) |
Total from investment operations |
(2.83) |
(.73) |
Distributions from net investment income |
(.08) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.10) |
- |
Net asset value, end of period |
$ 6.95 |
$ 9.88 |
Total Return B, C, D |
(28.78)% |
(6.88)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.35% A |
1.32% A |
Expenses net of fee waivers, if any |
1.35% A |
1.32% A |
Expenses net of all reductions |
1.35% A |
1.32% A |
Net investment income (loss) |
1.12% A |
.89% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 160 |
$ 136 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.87 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.03 |
.02 |
Net realized and unrealized gain (loss) |
(2.88) |
(.76) |
Total from investment operations |
(2.85) |
(.74) |
Distributions from net investment income |
(.05) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.07) |
- |
Net asset value, end of period |
$ 6.95 |
$ 9.87 |
Total Return B, C, D |
(29.01)% |
(6.97)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.85% A |
1.73% A |
Expenses net of fee waivers, if any |
1.85% A |
1.73% A |
Expenses net of all reductions |
1.85% A |
1.73% A |
Net investment income (loss) |
.62% A |
.52% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 109 |
$ 107 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.87 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.03 |
.02 |
Net realized and unrealized gain (loss) |
(2.88) |
(.76) |
Total from investment operations |
(2.85) |
(.74) |
Distributions from net investment income |
(.08) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.10) |
- |
Net asset value, end of period |
$ 6.92 |
$ 9.87 |
Total Return B, C, D |
(29.02)% |
(6.97)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.80% A |
1.71% A |
Expenses net of fee waivers, if any |
1.80% A |
1.71% A |
Expenses net of all reductions |
1.80% A |
1.71% A |
Net investment income (loss) |
.67% A |
.55% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 477 |
$ 98 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Years ended June 30, |
||||
|
(Unaudited) |
2008 |
2007 |
2006 |
2005 |
2004 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period |
$ 9.91 |
$ 12.06 |
$ 10.31 |
$ 9.28 |
$ 9.24 |
$ 8.48 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D |
.07 |
.14 |
.09 |
.05 |
.14 G |
.06 |
Net realized and unrealized gain (loss) |
(2.89) |
(1.60) |
1.93 |
1.21 |
.02 |
.76 |
Total from investment operations |
(2.82) |
(1.46) |
2.02 |
1.26 |
.16 |
.82 |
Distributions from net investment income |
(.12) |
(.07) |
(.09) |
(.06) |
(.12) |
(.06) |
Distributions from net realized gain |
(.02) |
(.62) |
(.18) |
(.17) |
- |
- |
Total distributions |
(.14) |
(.69) |
(.27) |
(.23) |
(.12) |
(.06) |
Net asset value, end of period |
$ 6.95 |
$ 9.91 |
$ 12.06 |
$ 10.31 |
$ 9.28 |
$ 9.24 |
Total Return B, C |
(28.65)% |
(12.73)% |
20.05% |
13.63% |
1.71% |
9.68% |
Ratios to Average Net Assets E, H |
|
|
|
|
|
|
Expenses before reductions |
.76% A |
.75% |
.81% |
.86% |
.84% |
.86% |
Expenses net of fee waivers, if any |
.75% A |
.74% |
.81% |
.86% |
.84% |
.86% |
Expenses net of all reductions |
.75% A |
.74% |
.81% |
.82% |
.81% |
.85% |
Net investment income (loss) |
1.72% A |
1.28% |
.79% |
.51% |
1.52% G |
.72% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
$ 456,973 |
$ 667,542 |
$ 205,163 |
$ 182,834 |
$ 179,344 |
$ 209,344 |
Portfolio turnover rate F |
112% A |
97% |
94% |
180% |
79% |
26% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.03 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.15%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 G |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.91 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) D |
.07 |
.07 |
Net realized and unrealized gain (loss) |
(2.88) |
(.77) |
Total from investment operations |
(2.81) |
(.70) |
Distributions from net investment income |
(.13) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.15) |
- |
Net asset value, end of period |
$ 6.95 |
$ 9.91 |
Total Return B, C |
(28.59)% |
(6.60)% |
Ratios to Average Net Assets E, H |
|
|
Expenses before reductions |
.69% A |
.70% A |
Expenses net of fee waivers, if any |
.69% A |
.70% A |
Expenses net of all reductions |
.69% A |
.70% A |
Net investment income (loss) |
1.78% A |
1.57% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 188 |
$ 93 |
Portfolio turnover rate F |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
For the period ended December 31, 2008 (Unaudited)
1. Organization.
Fidelity Mega Cap Stock Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Mega Cap Stock and Institutional Class Shares, each of which has equal rights to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 |
Quoted prices in active markets for identical securities. |
Level 2 |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of December 31, 2008, for the Fund's investments, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation |
$ 12,991,808 |
Unrealized depreciation |
(161,209,957) |
Net unrealized appreciation (depreciation) |
$ (148,218,149) |
|
|
Cost for federal income tax purposes |
$ 612,728,141 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $305,296,191 and $346,010,520, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and a group fee rate that averaged 0.26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .46% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
|
Distribution |
Service |
Paid to |
Retained |
Class A |
0% |
.25% |
$ 326 |
$ 91 |
Class T |
.25% |
.25% |
362 |
196 |
Class B |
.75% |
.25% |
506 |
477 |
Class C |
.75% |
.25% |
905 |
687 |
|
|
|
$ 2,099 |
$ 1,451 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
|
Retained |
Class A |
$ 1,206 |
Class T |
10 |
Class B* |
41 |
Class C* |
- |
|
$ 1,257 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
|
Amount |
% of |
Class A |
$ 392 |
.30 |
Class T |
223 |
.31 |
Class B |
156 |
.31 |
Class C |
238 |
.26 |
Mega Cap Stock |
576,347 |
.22 |
Institutional Class |
68 |
.15 |
|
$ 577,424 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $7,216 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender |
Average Daily |
Weighted Average Interest Rate |
Interest |
Borrower |
$ 18,683,400 |
2.17% |
$ 5,631 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $652
Semiannual Report
7. Committed Line of Credit - continued
and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $155,565.
9. Expense Reductions.
Through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
|
Transfer Agent |
Mega Cap Stock |
$ 8 |
In addition, FMR voluntarily agreed to reimburse a portion of Mega Cap Stock's operating expenses. During the period, this reimbursement reduced the class's expenses by $21,625.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
|
Six months ended |
Year ended |
From net investment income |
|
|
Class A |
$ 5,012 |
$ - |
Class T |
1,485 |
- |
Class B |
634 |
- |
Class C |
2,462 |
- |
Mega Cap Stock |
8,059,632 |
2,028,069 |
Institutional Class |
1,877 |
- |
Total |
$ 8,071,102 |
$ 2,028,069 |
From net realized gain |
|
|
Class A |
$ 291 |
$ - |
Class T |
296 |
- |
Class B |
207 |
- |
Class C |
292 |
- |
Mega Cap Stock |
1,263,428 |
12,126,374 |
Institutional Class |
188 |
- |
Total |
$ 1,264,702 |
$ 12,126,374 |
12. Share Transactions.
Transactions for each class of shares were as follows:
|
Shares |
Dollars |
||
|
Six months ended December 31, 2008 |
Year ended |
Six months ended December 31, 2008 |
Year ended |
Class A |
|
|
|
|
Shares sold |
92,614 |
10,749 |
$ 666,998 |
$ 114,109 |
Reinvestment of distributions |
668 |
- |
4,811 |
- |
Shares redeemed |
(30,699) |
- |
(213,333) |
- |
Net increase (decrease) |
62,583 |
10,749 |
$ 458,476 |
$ 114,109 |
Class T |
|
|
|
|
Shares sold |
19,792 |
13,813 |
$ 138,373 |
$ 145,705 |
Reinvestment of distributions |
225 |
- |
1,781 |
- |
Shares redeemed |
(10,735) |
(75) |
(72,562) |
(773) |
Net increase (decrease) |
9,282 |
13,738 |
$ 67,592 |
$ 144,932 |
Semiannual Report
12. Share Transactions - continued
|
Shares |
Dollars |
||
|
Six months ended December 31, 2008 |
Year ended |
Six months ended December 31, 2008 |
Year ended |
Class B |
|
|
|
|
Shares sold |
5,536 |
10,836 |
$ 41,197 |
$ 114,788 |
Reinvestment of distributions |
106 |
- |
833 |
- |
Shares redeemed |
(808) |
(9) |
(7,337) |
(99) |
Net increase (decrease) |
4,834 |
10,827 |
$ 34,693 |
$ 114,689 |
Class C |
|
|
|
|
Shares sold |
61,613 |
9,953 |
$ 454,109 |
$ 105,728 |
Reinvestment of distributions |
373 |
- |
2,754 |
- |
Shares redeemed |
(3,012) |
- |
(18,812) |
- |
Net increase (decrease) |
58,974 |
9,953 |
$ 438,051 |
$ 105,728 |
Mega Cap Stock |
|
|
|
|
Shares sold |
22,345,635 |
62,330,525 |
$ 171,418,950 |
$ 706,742,566 |
Reinvestment of distributions |
1,015,272 |
1,173,267 |
8,283,272 |
13,245,178 |
Shares redeemed |
(25,020,288) |
(13,126,183) |
(207,426,868) |
(142,308,777) |
Net increase (decrease) |
(1,659,381) |
50,377,609 |
$ (27,724,646) |
$ 577,678,967 |
Institutional Class |
|
|
|
|
Shares sold |
17,421 |
9,425 |
$ 120,754 |
$ 100,000 |
Reinvestment of distributions |
172 |
- |
1,400 |
- |
Net increase (decrease) |
17,593 |
9,425 |
$ 122,154 |
$ 100,000 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
Semiannual Report
Fidelity Mega Cap Stock Fund (formerly known as Fidelity Growth & Income II Portfolio)
Each year, typically in July, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly and, acting directly and through its separate committees, requests and receives information concerning, and considers at each of its meetings factors that are relevant to, its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. Each committee has a written charter outlining the structure and purposes of the committee. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.
At its July 2008 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders. The Board also approved agreements with foreign sub-advisers Fidelity Management & Research (Japan) Inc. and Fidelity Management & Research (Hong Kong) Limited, as well as amendments to the fund's agreement with Fidelity Management & Research (U.K.) Inc.
In considering whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund's shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Semiannual Report
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the backgrounds of the fund's investment personnel and the fund's investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services. The Board further considered that Fidelity voluntarily pays for market data out of its own resources.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge. The Board noted that Fidelity has taken a number of actions over the previous year that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) contractually agreeing to reduce the management fees on Fidelity's Institutional Money Market Funds and launching Class IV and Institutional Class of certain of these funds; (iii) reducing the transfer agent fees for the Fidelity Select Portfolios and Investor Class of the VIP funds; and (iv) launching Class K of 29 equity funds as a lower-fee class available to certain employer-sponsored retirement plans.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund's absolute investment performance, as well as the fund's relative investment performance measured against (i) a broad-based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one-, three-, and five-year periods ended December 31, 2007, the fund's cumulative total returns, the cumulative total returns of a broad-based securities market index ("benchmark"), and a range of cumulative total returns of a peer group of mutual funds identified by Morningstar, Inc. as having an investment style similar to that of the fund based on underlying portfolio holdings. (The fund did not offer Advisor classes as of Decem-ber 31, 2007.) The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the peer group whose performance was equal to or lower than that of the fund.
Semiannual Report
Fidelity Mega Cap Stock Fund
The Board reviewed the fund's relative investment performance against its peer group and stated that the performance of the fund was in the first quartile for the one- and three-year periods and the third quartile for the five-year period. The Board also stated that the investment performance of the fund compared favorably to its benchmark for the one- and three-year periods, although the fund's five-year cumulative total return was lower than its benchmark.
The Board considered that FMR has taken steps to refocus and strengthen equity research, equity portfolio management, and compliance.
Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's management fee and total expenses compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board's management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared. The Board also considered supplemental information about how the fund's management fee and total expenses ranked relative to groups based on Lipper classifications, which take into account a fund's market capitalization and style.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a TMG % of 11% means that 89% of the funds in the Total Mapped Group had higher management fees than the fund. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to non-Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee ranked, is also included in the chart and considered by the Board.
Fidelity Mega Cap Stock Fund
The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2007.
Based on its review, the Board concluded that the fund's management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
Semiannual Report
In its review of the fund's total expenses, the Board considered the fund's management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered current and historical total expenses of the fund compared to competitive fund median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund's total expenses ranked below its competitive median for 2007.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund's total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of the results of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of Fidelity's methodologies used in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board has also reviewed Fidelity's non-fund businesses and any fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including (i) fund performance trends and actions to be taken by FMR to improve certain funds' overall performance; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability and the extent to which portfolio manager compensation is linked to fund performance; (v) Fidelity's fee structures and rationale for recommending different fees among categories of funds; and (vi) Fidelity's rationale for recommending which funds should have a performance adjustment component as part of their management fees.
Semiannual Report
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co. Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
FIL Investment Advisors
FIL Investment Advisors
(U.K.) Ltd.
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AGII-USAN-0209-01 1.855229.101
(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Mega Cap Stock
Fund - Institutional Class
Semiannual Report
December 31, 2008
Institutional Class
is a class of Fidelity®
Mega Cap Stock Fund
(2_fidelity_logos) (Registered_Trademark)
Chairman's Message |
Ned Johnson's message to shareholders. |
|
Shareholder Expense Example |
An example of shareholder expenses. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
|
Notes |
Notes to the financial statements. |
|
Board Approval of Investment Advisory Contracts and Management Fees |
|
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
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.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
An all-out credit crisis gripped the world's capital markets in 2008, stunting economic growth, toppling commodity prices and pushing equity markets into their steepest declines in decades. Within this ultra-risk-averse climate, virtually the only positive results came from the relative security of U.S. government-backed assets. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).
A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2008 to December 31, 2008).
Actual Expenses
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Semiannual Report
Shareholder Expense Example - continued
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
Annualized |
Beginning |
Ending |
Expenses Paid |
Class A |
1.10% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 713.40 |
$ 4.75 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,019.66 |
$ 5.60 |
Class T |
1.35% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 712.20 |
$ 5.83 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,018.40 |
$ 6.87 |
Class B |
1.85% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 709.90 |
$ 7.97 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,015.88 |
$ 9.40 |
Class C |
1.80% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 709.80 |
$ 7.76 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,016.13 |
$ 9.15 |
Mega Cap Stock |
.75% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 713.50 |
$ 3.24 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,021.42 |
$ 3.82 |
Institutional Class |
.69% |
|
|
|
Actual |
|
$ 1,000.00 |
$ 714.10 |
$ 2.98 |
Hypothetical A |
|
$ 1,000.00 |
$ 1,021.73 |
$ 3.52 |
A 5% return per year before expenses
* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Top Ten Stocks as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Exxon Mobil Corp. |
5.0 |
5.2 |
JPMorgan Chase & Co. |
3.4 |
2.6 |
Johnson & Johnson |
2.9 |
2.6 |
Wells Fargo & Co. |
2.9 |
1.2 |
Microsoft Corp. |
2.7 |
2.8 |
ConocoPhillips |
2.4 |
2.1 |
AT&T, Inc. |
2.3 |
2.7 |
General Electric Co. |
2.2 |
0.7 |
Wal-Mart Stores, Inc. |
2.2 |
1.6 |
Hewlett-Packard Co. |
2.0 |
3.4 |
|
28.0 |
|
Top Five Market Sectors as of December 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Information Technology |
18.3 |
20.5 |
Health Care |
15.6 |
12.6 |
Financials |
15.2 |
15.9 |
Energy |
12.1 |
16.6 |
Consumer Staples |
10.7 |
8.6 |
Asset Allocation (% of fund's net assets) |
|||||||
As of December 31, 2008 * |
As of June 30, 2008 ** |
||||||
Stocks 97.9% |
|
Stocks 100.0% |
|
||||
Short-Term |
|
Short-Term |
|
||||
* Foreign investments |
4.2% |
|
** Foreign investments |
4.9% |
|
Semiannual Report
Showing Percentage of Net Assets
Common Stocks - 97.9% |
|||
Shares |
Value |
||
CONSUMER DISCRETIONARY - 9.4% |
|||
Auto Components - 0.2% |
|||
Magna International, Inc. Class A |
23,000 |
$ 694,707 |
|
Hotels, Restaurants & Leisure - 1.6% |
|||
McDonald's Corp. |
112,000 |
6,965,280 |
|
Starbucks Corp. (a) |
40,000 |
378,400 |
|
|
7,343,680 |
||
Household Durables - 1.5% |
|||
NVR, Inc. (a) |
2,000 |
912,500 |
|
Whirlpool Corp. (d) |
139,900 |
5,784,865 |
|
|
6,697,365 |
||
Media - 2.7% |
|||
Comcast Corp. Class A (special) (non-vtg.) |
190,000 |
3,068,500 |
|
News Corp. Class A |
50,100 |
455,409 |
|
Omnicom Group, Inc. |
11,100 |
298,812 |
|
The DIRECTV Group, Inc. (a) |
67,400 |
1,544,134 |
|
The Walt Disney Co. |
210,900 |
4,785,321 |
|
Time Warner, Inc. |
192,100 |
1,932,526 |
|
Viacom, Inc. Class B (non-vtg.) (a) |
23,300 |
444,098 |
|
|
12,528,800 |
||
Multiline Retail - 0.0% |
|||
Kohl's Corp. (a) |
1,000 |
36,200 |
|
Target Corp. |
3,400 |
117,402 |
|
|
153,602 |
||
Specialty Retail - 2.2% |
|||
Abercrombie & Fitch Co. Class A |
6,100 |
140,727 |
|
Best Buy Co., Inc. |
41,000 |
1,152,510 |
|
Home Depot, Inc. |
183,000 |
4,212,660 |
|
Lowe's Companies, Inc. |
130,000 |
2,797,600 |
|
Staples, Inc. |
80,643 |
1,445,123 |
|
TJX Companies, Inc. |
20,000 |
411,400 |
|
|
10,160,020 |
||
Textiles, Apparel & Luxury Goods - 1.2% |
|||
Coach, Inc. (a) |
50,000 |
1,038,500 |
|
NIKE, Inc. Class B |
89,000 |
4,539,000 |
|
|
5,577,500 |
||
TOTAL CONSUMER DISCRETIONARY |
43,155,674 |
||
Common Stocks - continued |
|||
Shares |
Value |
||
CONSUMER STAPLES - 10.7% |
|||
Beverages - 1.8% |
|||
Coca-Cola Enterprises, Inc. |
24,300 |
$ 292,329 |
|
Molson Coors Brewing Co. Class B |
75,293 |
3,683,334 |
|
The Coca-Cola Co. |
94,300 |
4,268,961 |
|
|
8,244,624 |
||
Food & Staples Retailing - 3.7% |
|||
CVS Caremark Corp. |
148,700 |
4,273,638 |
|
Kroger Co. |
77,700 |
2,052,057 |
|
Wal-Mart Stores, Inc. |
178,584 |
10,011,419 |
|
Walgreen Co. |
20,000 |
493,400 |
|
|
16,830,514 |
||
Food Products - 0.3% |
|||
Archer Daniels Midland Co. |
300 |
8,649 |
|
Kellogg Co. |
25,200 |
1,105,020 |
|
Tyson Foods, Inc. Class A |
51,300 |
449,388 |
|
|
1,563,057 |
||
Household Products - 1.8% |
|||
Kimberly-Clark Corp. |
10,000 |
527,400 |
|
Procter & Gamble Co. |
123,200 |
7,616,224 |
|
|
8,143,624 |
||
Personal Products - 0.2% |
|||
Avon Products, Inc. |
40,000 |
961,200 |
|
Tobacco - 2.9% |
|||
Altria Group, Inc. |
429,130 |
6,462,698 |
|
Philip Morris International, Inc. |
155,630 |
6,771,461 |
|
|
13,234,159 |
||
TOTAL CONSUMER STAPLES |
48,977,178 |
||
ENERGY - 12.1% |
|||
Energy Equipment & Services - 0.7% |
|||
ENSCO International, Inc. |
43,700 |
1,240,643 |
|
Halliburton Co. |
53,400 |
970,812 |
|
National Oilwell Varco, Inc. (a) |
5,000 |
122,200 |
|
Noble Corp. |
8,900 |
196,601 |
|
Schlumberger Ltd. (NY Shares) |
715 |
30,266 |
|
Transocean Ltd. (a) |
11,552 |
545,832 |
|
|
3,106,354 |
||
Oil, Gas & Consumable Fuels - 11.4% |
|||
Alpha Natural Resources, Inc. (a) |
30,000 |
485,700 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
ENERGY - continued |
|||
Oil, Gas & Consumable Fuels - continued |
|||
Apache Corp. |
36,800 |
$ 2,742,704 |
|
Chesapeake Energy Corp. |
95,000 |
1,536,150 |
|
Chevron Corp. |
118,400 |
8,758,048 |
|
ConocoPhillips |
207,500 |
10,748,500 |
|
Devon Energy Corp. |
5,000 |
328,550 |
|
Exxon Mobil Corp. |
286,271 |
22,853,013 |
|
Marathon Oil Corp. |
4,500 |
123,120 |
|
Occidental Petroleum Corp. |
51,500 |
3,089,485 |
|
Peabody Energy Corp. |
8,927 |
203,089 |
|
Plains Exploration & Production Co. (a) |
6,100 |
141,764 |
|
Tesoro Corp. |
100 |
1,317 |
|
Valero Energy Corp. |
71,500 |
1,547,260 |
|
|
52,558,700 |
||
TOTAL ENERGY |
55,665,054 |
||
FINANCIALS - 15.2% |
|||
Capital Markets - 2.8% |
|||
Bank of New York Mellon Corp. |
35,000 |
991,550 |
|
BlackRock, Inc. Class A |
1,000 |
134,150 |
|
Charles Schwab Corp. |
100,000 |
1,617,000 |
|
Goldman Sachs Group, Inc. |
72,400 |
6,109,836 |
|
Janus Capital Group, Inc. |
78,700 |
631,961 |
|
Morgan Stanley |
120,000 |
1,924,800 |
|
State Street Corp. |
38,700 |
1,522,071 |
|
|
12,931,368 |
||
Commercial Banks - 3.5% |
|||
PNC Financial Services Group, Inc. |
40,000 |
1,960,000 |
|
U.S. Bancorp, Delaware |
5,000 |
125,050 |
|
Wachovia Corp. |
156,100 |
864,794 |
|
Wells Fargo & Co. |
445,574 |
13,135,522 |
|
|
16,085,366 |
||
Consumer Finance - 0.6% |
|||
Capital One Financial Corp. |
90,000 |
2,870,100 |
|
Diversified Financial Services - 5.9% |
|||
Bank of America Corp. |
547,080 |
7,702,886 |
|
Citigroup, Inc. |
408,300 |
2,739,693 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
FINANCIALS - continued |
|||
Diversified Financial Services - continued |
|||
CME Group, Inc. |
4,000 |
$ 832,440 |
|
JPMorgan Chase & Co. |
493,000 |
15,544,290 |
|
|
26,819,309 |
||
Insurance - 2.4% |
|||
ACE Ltd. |
16,100 |
852,012 |
|
American International Group, Inc. |
254,330 |
399,298 |
|
Berkshire Hathaway, Inc. Class B (a) |
560 |
1,799,840 |
|
Loews Corp. |
45,900 |
1,296,675 |
|
MetLife, Inc. |
27,500 |
958,650 |
|
Prudential Financial, Inc. |
16,600 |
502,316 |
|
The Chubb Corp. |
37,000 |
1,887,000 |
|
The Travelers Companies, Inc. |
68,900 |
3,114,280 |
|
|
10,810,071 |
||
TOTAL FINANCIALS |
69,516,214 |
||
HEALTH CARE - 15.6% |
|||
Biotechnology - 2.9% |
|||
Amgen, Inc. (a) |
92,590 |
5,347,073 |
|
Biogen Idec, Inc. (a) |
27,200 |
1,295,536 |
|
Genentech, Inc. (a) |
52,000 |
4,311,320 |
|
Gilead Sciences, Inc. (a) |
45,220 |
2,312,551 |
|
|
13,266,480 |
||
Health Care Equipment & Supplies - 2.0% |
|||
Baxter International, Inc. |
70,600 |
3,783,454 |
|
Boston Scientific Corp. (a) |
70,000 |
541,800 |
|
C.R. Bard, Inc. |
5,200 |
438,152 |
|
Covidien Ltd. |
50,000 |
1,812,000 |
|
Medtronic, Inc. |
88,300 |
2,774,386 |
|
|
9,349,792 |
||
Health Care Providers & Services - 2.8% |
|||
Express Scripts, Inc. (a) |
35,000 |
1,924,300 |
|
Humana, Inc. (a) |
80,400 |
2,997,312 |
|
Medco Health Solutions, Inc. (a) |
93,800 |
3,931,158 |
|
UnitedHealth Group, Inc. |
116,700 |
3,104,220 |
|
WellPoint, Inc. (a) |
21,900 |
922,647 |
|
|
12,879,637 |
||
Life Sciences Tools & Services - 0.0% |
|||
Thermo Fisher Scientific, Inc. (a) |
100 |
3,407 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
HEALTH CARE - continued |
|||
Pharmaceuticals - 7.9% |
|||
Abbott Laboratories |
89,600 |
$ 4,781,952 |
|
Allergan, Inc. |
1,000 |
40,320 |
|
Eli Lilly & Co. |
80,100 |
3,225,627 |
|
Johnson & Johnson |
223,300 |
13,360,039 |
|
Merck & Co., Inc. |
83,900 |
2,550,560 |
|
Pfizer, Inc. |
296,300 |
5,247,473 |
|
Schering-Plough Corp. |
75,100 |
1,278,953 |
|
Wyeth |
147,100 |
5,517,721 |
|
|
36,002,645 |
||
TOTAL HEALTH CARE |
71,501,961 |
||
INDUSTRIALS - 8.8% |
|||
Aerospace & Defense - 3.4% |
|||
General Dynamics Corp. |
38,500 |
2,217,215 |
|
Honeywell International, Inc. |
38,600 |
1,267,238 |
|
L-3 Communications Holdings, Inc. |
4,100 |
302,498 |
|
Lockheed Martin Corp. |
26,900 |
2,261,752 |
|
Northrop Grumman Corp. |
75,300 |
3,391,512 |
|
Raytheon Co. |
67,000 |
3,419,680 |
|
The Boeing Co. |
2,800 |
119,476 |
|
United Technologies Corp. |
50,900 |
2,728,240 |
|
|
15,707,611 |
||
Air Freight & Logistics - 0.3% |
|||
FedEx Corp. |
20,000 |
1,283,000 |
|
Commercial Services & Supplies - 0.3% |
|||
Republic Services, Inc. |
45,000 |
1,115,550 |
|
Waste Management, Inc. |
10,000 |
331,400 |
|
|
1,446,950 |
||
Industrial Conglomerates - 2.4% |
|||
General Electric Co. |
624,800 |
10,121,760 |
|
Tyco International Ltd. |
40,000 |
864,000 |
|
|
10,985,760 |
||
Machinery - 1.7% |
|||
Caterpillar, Inc. |
54,900 |
2,452,383 |
|
Cummins, Inc. |
35,000 |
935,550 |
|
Deere & Co. |
97,400 |
3,732,368 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
INDUSTRIALS - continued |
|||
Machinery - continued |
|||
Eaton Corp. |
700 |
$ 34,797 |
|
Navistar International Corp. (a) |
25,000 |
534,500 |
|
|
7,689,598 |
||
Road & Rail - 0.7% |
|||
CSX Corp. |
44,000 |
1,428,680 |
|
Norfolk Southern Corp. |
20,000 |
941,000 |
|
Union Pacific Corp. |
22,000 |
1,051,600 |
|
|
3,421,280 |
||
TOTAL INDUSTRIALS |
40,534,199 |
||
INFORMATION TECHNOLOGY - 18.3% |
|||
Communications Equipment - 2.6% |
|||
Cisco Systems, Inc. (a) |
428,900 |
6,991,070 |
|
Corning, Inc. |
112,100 |
1,068,313 |
|
Juniper Networks, Inc. (a) |
10,000 |
175,100 |
|
Nokia Corp. sponsored ADR |
35,400 |
552,240 |
|
QUALCOMM, Inc. |
88,700 |
3,178,121 |
|
|
11,964,844 |
||
Computers & Peripherals - 4.2% |
|||
Apple, Inc. (a) |
46,300 |
3,951,705 |
|
Hewlett-Packard Co. |
251,300 |
9,119,677 |
|
International Business Machines Corp. |
70,400 |
5,924,864 |
|
Western Digital Corp. (a) |
30,800 |
352,660 |
|
|
19,348,906 |
||
Electronic Equipment & Components - 0.2% |
|||
Tyco Electronics Ltd. |
51,600 |
836,436 |
|
Internet Software & Services - 1.1% |
|||
Google, Inc. Class A (sub. vtg.) (a) |
16,350 |
5,030,078 |
|
Yahoo!, Inc. (a) |
14,300 |
174,460 |
|
|
5,204,538 |
||
IT Services - 1.9% |
|||
Accenture Ltd. Class A |
152,200 |
4,990,638 |
|
MasterCard, Inc. Class A |
15,000 |
2,143,950 |
|
The Western Union Co. |
80,000 |
1,147,200 |
|
Visa, Inc. |
10,000 |
524,500 |
|
|
8,806,288 |
||
Semiconductors & Semiconductor Equipment - 3.4% |
|||
Applied Materials, Inc. |
520,918 |
5,276,899 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
INFORMATION TECHNOLOGY - continued |
|||
Semiconductors & Semiconductor Equipment - continued |
|||
ASML Holding NV (NY Shares) |
289,900 |
$ 5,238,493 |
|
Intel Corp. |
172,200 |
2,524,452 |
|
Texas Instruments, Inc. |
145,000 |
2,250,400 |
|
|
15,290,244 |
||
Software - 4.9% |
|||
Adobe Systems, Inc. (a) |
40,000 |
851,600 |
|
Microsoft Corp. |
631,000 |
12,266,640 |
|
Oracle Corp. (a) |
383,900 |
6,806,547 |
|
Symantec Corp. (a) |
168,300 |
2,275,416 |
|
|
22,200,203 |
||
TOTAL INFORMATION TECHNOLOGY |
83,651,459 |
||
MATERIALS - 1.7% |
|||
Chemicals - 1.1% |
|||
Celanese Corp. Class A |
75,880 |
943,188 |
|
CF Industries Holdings, Inc. |
10,000 |
491,600 |
|
FMC Corp. |
30,000 |
1,341,900 |
|
Lubrizol Corp. |
30,000 |
1,091,700 |
|
Monsanto Co. |
18,300 |
1,287,405 |
|
|
5,155,793 |
||
Metals & Mining - 0.6% |
|||
ArcelorMittal SA (NY Shares) Class A |
19,300 |
474,587 |
|
Barrick Gold Corp. |
37,800 |
1,389,034 |
|
Freeport-McMoRan Copper & Gold, Inc. Class B |
1,400 |
34,216 |
|
Rio Tinto PLC sponsored ADR |
5,000 |
444,550 |
|
United States Steel Corp. |
5,000 |
186,000 |
|
|
2,528,387 |
||
TOTAL MATERIALS |
7,684,180 |
||
TELECOMMUNICATION SERVICES - 4.0% |
|||
Diversified Telecommunication Services - 3.9% |
|||
AT&T, Inc. |
376,900 |
10,741,650 |
|
Qwest Communications International, Inc. |
50,000 |
182,000 |
|
Verizon Communications, Inc. |
211,800 |
7,180,020 |
|
|
18,103,670 |
||
Common Stocks - continued |
|||
Shares |
Value |
||
TELECOMMUNICATION SERVICES - continued |
|||
Wireless Telecommunication Services - 0.1% |
|||
Sprint Nextel Corp. |
150,000 |
$ 274,500 |
|
TOTAL TELECOMMUNICATION SERVICES |
18,378,170 |
||
UTILITIES - 2.1% |
|||
Electric Utilities - 1.4% |
|||
Entergy Corp. |
33,000 |
2,743,290 |
|
Exelon Corp. |
15,000 |
834,150 |
|
FirstEnergy Corp. |
60,000 |
2,914,800 |
|
|
6,492,240 |
||
Independent Power Producers & Energy Traders - 0.4% |
|||
AES Corp. (a) |
32,100 |
264,504 |
|
Constellation Energy Group, Inc. |
11,800 |
296,062 |
|
NRG Energy, Inc. (a) |
50,000 |
1,166,500 |
|
|
1,727,066 |
||
Multi-Utilities - 0.3% |
|||
Dominion Resources, Inc. |
20,000 |
716,800 |
|
Public Service Enterprise Group, Inc. |
27,300 |
796,341 |
|
|
1,513,141 |
||
TOTAL UTILITIES |
9,732,447 |
||
TOTAL COMMON STOCKS (Cost $586,447,960) |
448,796,536 |
||
Money Market Funds - 3.4% |
|||
|
|
|
|
Fidelity Cash Central Fund, 1.06% (b) |
11,065,456 |
11,065,456 |
|
Fidelity Securities Lending Cash Central Fund, 0.87% (b)(c) |
4,648,000 |
4,648,000 |
|
TOTAL MONEY MARKET FUNDS (Cost $15,713,456) |
15,713,456 |
||
TOTAL INVESTMENT PORTFOLIO - 101.3% (Cost $602,161,416) |
464,509,992 |
||
NET OTHER ASSETS - (1.3)% |
(6,094,728) |
||
NET ASSETS - 100% |
$ 458,415,264 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. |
(c) Investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Affiliated Central Funds |
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
Fund |
Income earned |
Fidelity Cash Central Fund |
$ 62,471 |
Fidelity Securities Lending Cash Central Fund |
155,565 |
Total |
$ 218,036 |
Other Information |
The following is a summary of the inputs used, as of December 31, 2008, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: |
||||
Description |
Total |
Level 1 |
Level 2 |
Level 3 |
Investments in Securities |
$ 464,509,992 |
$ 464,509,992 |
$ - |
$ - |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
December 31, 2008 (Unaudited) |
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $4,631,200) - See accompanying schedule: Unaffiliated issuers (cost $586,447,960) |
$ 448,796,536 |
|
Fidelity Central Funds (cost $15,713,456) |
15,713,456 |
|
Total Investments (cost $602,161,416) |
|
$ 464,509,992 |
Receivable for investments sold |
|
18,069,846 |
Receivable for fund shares sold |
|
1,821,489 |
Dividends receivable |
|
829,237 |
Distributions receivable from Fidelity Central Funds |
|
15,012 |
Prepaid expenses |
|
5,678 |
Total assets |
|
485,251,254 |
|
|
|
Liabilities |
|
|
Payable for fund shares redeemed |
$ 21,866,576 |
|
Accrued management fee |
181,658 |
|
Distribution fees payable |
501 |
|
Other affiliated payables |
111,848 |
|
Other payables and accrued expenses |
27,407 |
|
Collateral on securities loaned, at value |
4,648,000 |
|
Total liabilities |
|
26,835,990 |
|
|
|
Net Assets |
|
$ 458,415,264 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 716,942,710 |
Undistributed net investment income |
|
74,156 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(120,950,178) |
Net unrealized appreciation (depreciation) on investments |
|
(137,651,424) |
Net Assets |
|
$ 458,415,264 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
|
December 31, 2008 (Unaudited) |
|
|
|
|
Calculation of Maximum Offering Price |
|
$ 6.94 |
|
|
|
Maximum offering price per share (100/94.25 of $6.94) |
|
$ 7.36 |
Class T: |
|
$ 6.95 |
|
|
|
Maximum offering price per share (100/96.50 of $6.95) |
|
$ 7.20 |
Class B: |
|
$ 6.95 |
|
|
|
Class C: |
|
$ 6.92 |
|
|
|
|
|
|
Mega Cap Stock: |
|
$ 6.95 |
|
|
|
Institutional Class: |
|
$ 6.95 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Six months ended December 31, 2008 (Unaudited) |
||
|
|
|
Investment Income |
|
|
Dividends |
|
$ 6,394,502 |
Interest |
|
11 |
Income from Fidelity Central Funds |
|
218,036 |
Total income |
|
6,612,549 |
|
|
|
Expenses |
|
|
Management fee |
$ 1,235,698 |
|
Transfer agent fees |
577,424 |
|
Distribution fees |
2,099 |
|
Accounting and security lending fees |
102,619 |
|
Custodian fees and expenses |
10,075 |
|
Independent trustees' compensation |
1,470 |
|
Registration fees |
37,552 |
|
Audit |
26,952 |
|
Legal |
2,591 |
|
Interest |
5,631 |
|
Miscellaneous |
26,850 |
|
Total expenses before reductions |
2,028,961 |
|
Expense reductions |
(21,633) |
2,007,328 |
Net investment income (loss) |
|
4,605,221 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities: |
|
|
Unaffiliated issuers |
(115,768,325) |
|
Foreign currency transactions |
(492) |
|
Total net realized gain (loss) |
|
(115,768,817) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(62,563,867) |
|
Assets and liabilities in foreign currencies |
(479) |
|
Total change in net unrealized appreciation (depreciation) |
|
(62,564,346) |
Net gain (loss) |
|
(178,333,163) |
Net increase (decrease) in net assets resulting from operations |
|
$ (173,727,942) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
|
Six months ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 4,605,221 |
$ 6,085,707 |
Net realized gain (loss) |
(115,768,817) |
(652,994) |
Change in net unrealized appreciation (depreciation) |
(62,564,346) |
(106,617,222) |
Net increase (decrease) in net assets resulting |
(173,727,942) |
(101,184,509) |
Distributions to shareholders from net investment income |
(8,071,102) |
(2,028,069) |
Distributions to shareholders from net realized gain |
(1,264,702) |
(12,126,374) |
Total distributions |
(9,335,804) |
(14,154,443) |
Share transactions - net increase (decrease) |
(26,603,680) |
578,258,425 |
Total increase (decrease) in net assets |
(209,667,426) |
462,919,473 |
|
|
|
Net Assets |
|
|
Beginning of period |
668,082,690 |
205,163,217 |
End of period (including undistributed net investment income of $74,156 and undistributed net investment income of $4,457,069, respectively) |
$ 458,415,264 |
$ 668,082,690 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended
|
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.89 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.05 |
.05 |
Net realized and unrealized gain (loss) |
(2.86) |
(.77) |
Total from investment operations |
(2.81) |
(.72) |
Distributions from net investment income |
(.12) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.14) |
- |
Net asset value, end of period |
$ 6.94 |
$ 9.89 |
Total Return B, C, D |
(28.66)% |
(6.79)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.10% A |
1.02% A |
Expenses net of fee waivers, if any |
1.10% A |
1.02% A |
Expenses net of all reductions |
1.10% A |
1.01% A |
Net investment income (loss) |
1.37% A |
1.24% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 509 |
$ 106 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.88 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.05 |
.04 |
Net realized and unrealized gain (loss) |
(2.88) |
(.77) |
Total from investment operations |
(2.83) |
(.73) |
Distributions from net investment income |
(.08) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.10) |
- |
Net asset value, end of period |
$ 6.95 |
$ 9.88 |
Total Return B, C, D |
(28.78)% |
(6.88)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.35% A |
1.32% A |
Expenses net of fee waivers, if any |
1.35% A |
1.32% A |
Expenses net of all reductions |
1.35% A |
1.32% A |
Net investment income (loss) |
1.12% A |
.89% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 160 |
$ 136 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.87 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.03 |
.02 |
Net realized and unrealized gain (loss) |
(2.88) |
(.76) |
Total from investment operations |
(2.85) |
(.74) |
Distributions from net investment income |
(.05) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.07) |
- |
Net asset value, end of period |
$ 6.95 |
$ 9.87 |
Total Return B, C, D |
(29.01)% |
(6.97)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.85% A |
1.73% A |
Expenses net of fee waivers, if any |
1.85% A |
1.73% A |
Expenses net of all reductions |
1.85% A |
1.73% A |
Net investment income (loss) |
.62% A |
.52% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 109 |
$ 107 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 H |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.87 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) E |
.03 |
.02 |
Net realized and unrealized gain (loss) |
(2.88) |
(.76) |
Total from investment operations |
(2.85) |
(.74) |
Distributions from net investment income |
(.08) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.10) |
- |
Net asset value, end of period |
$ 6.92 |
$ 9.87 |
Total Return B, C, D |
(29.02)% |
(6.97)% |
Ratios to Average Net Assets F, I |
|
|
Expenses before reductions |
1.80% A |
1.71% A |
Expenses net of fee waivers, if any |
1.80% A |
1.71% A |
Expenses net of all reductions |
1.80% A |
1.71% A |
Net investment income (loss) |
.67% A |
.55% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 477 |
$ 98 |
Portfolio turnover rate G |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Years ended June 30, |
||||
|
(Unaudited) |
2008 |
2007 |
2006 |
2005 |
2004 |
Selected Per-Share Data |
|
|
|
|
|
|
Net asset value, beginning of period |
$ 9.91 |
$ 12.06 |
$ 10.31 |
$ 9.28 |
$ 9.24 |
$ 8.48 |
Income from Investment Operations |
|
|
|
|
|
|
Net investment income (loss) D |
.07 |
.14 |
.09 |
.05 |
.14 G |
.06 |
Net realized and unrealized gain (loss) |
(2.89) |
(1.60) |
1.93 |
1.21 |
.02 |
.76 |
Total from investment operations |
(2.82) |
(1.46) |
2.02 |
1.26 |
.16 |
.82 |
Distributions from net investment income |
(.12) |
(.07) |
(.09) |
(.06) |
(.12) |
(.06) |
Distributions from net realized gain |
(.02) |
(.62) |
(.18) |
(.17) |
- |
- |
Total distributions |
(.14) |
(.69) |
(.27) |
(.23) |
(.12) |
(.06) |
Net asset value, end of period |
$ 6.95 |
$ 9.91 |
$ 12.06 |
$ 10.31 |
$ 9.28 |
$ 9.24 |
Total Return B, C |
(28.65)% |
(12.73)% |
20.05% |
13.63% |
1.71% |
9.68% |
Ratios to Average Net Assets E, H |
|
|
|
|
|
|
Expenses before reductions |
.76% A |
.75% |
.81% |
.86% |
.84% |
.86% |
Expenses net of fee waivers, if any |
.75% A |
.74% |
.81% |
.86% |
.84% |
.86% |
Expenses net of all reductions |
.75% A |
.74% |
.81% |
.82% |
.81% |
.85% |
Net investment income (loss) |
1.72% A |
1.28% |
.79% |
.51% |
1.52% G |
.72% |
Supplemental Data |
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
$ 456,973 |
$ 667,542 |
$ 205,163 |
$ 182,834 |
$ 179,344 |
$ 209,344 |
Portfolio turnover rate F |
112% A |
97% |
94% |
180% |
79% |
26% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Investment income per share reflects a special dividend which amounted to $.03 per share. Excluding the special dividend, the ratio of net investment income (loss) to average net assets would have been 1.15%.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
|
Six months ended
|
Year ended June 30, |
|
(Unaudited) |
2008 G |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 9.91 |
$ 10.61 |
Income from Investment Operations |
|
|
Net investment income (loss) D |
.07 |
.07 |
Net realized and unrealized gain (loss) |
(2.88) |
(.77) |
Total from investment operations |
(2.81) |
(.70) |
Distributions from net investment income |
(.13) |
- |
Distributions from net realized gain |
(.02) |
- |
Total distributions |
(.15) |
- |
Net asset value, end of period |
$ 6.95 |
$ 9.91 |
Total Return B, C |
(28.59)% |
(6.60)% |
Ratios to Average Net Assets E, H |
|
|
Expenses before reductions |
.69% A |
.70% A |
Expenses net of fee waivers, if any |
.69% A |
.70% A |
Expenses net of all reductions |
.69% A |
.70% A |
Net investment income (loss) |
1.78% A |
1.57% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 188 |
$ 93 |
Portfolio turnover rate F |
112% A |
97% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
For the period ended December 31, 2008 (Unaudited)
1. Organization.
Fidelity Mega Cap Stock Fund (the Fund) is a fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Mega Cap Stock and Institutional Class Shares, each of which has equal rights to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
2. Investments in Fidelity Central Funds.
The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.
The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.
3. Significant Accounting Policies.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:
Semiannual Report
3. Significant Accounting Policies - continued
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments.
Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund is subject to the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:
Level 1 |
Quoted prices in active markets for identical securities. |
Level 2 |
Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
Level 3 |
Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.
The aggregate value by input level, as of December 31, 2008, for the Fund's investments, is included at the end of the Fund's Schedule of Investments.
Foreign Currency. The Fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Semiannual Report
3. Significant Accounting Policies - continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation |
$ 12,991,808 |
Unrealized depreciation |
(161,209,957) |
Net unrealized appreciation (depreciation) |
$ (148,218,149) |
|
|
Cost for federal income tax purposes |
$ 612,728,141 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $305,296,191 and $346,010,520, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and a group fee rate that averaged 0.26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .46% of the Fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Semiannual Report
6. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan - continued
|
Distribution |
Service |
Paid to |
Retained |
Class A |
0% |
.25% |
$ 326 |
$ 91 |
Class T |
.25% |
.25% |
362 |
196 |
Class B |
.75% |
.25% |
506 |
477 |
Class C |
.75% |
.25% |
905 |
687 |
|
|
|
$ 2,099 |
$ 1,451 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, 1.00% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
|
Retained |
Class A |
$ 1,206 |
Class T |
10 |
Class B* |
41 |
Class C* |
- |
|
$ 1,257 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
6. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
|
Amount |
% of |
Class A |
$ 392 |
.30 |
Class T |
223 |
.31 |
Class B |
156 |
.31 |
Class C |
238 |
.26 |
Mega Cap Stock |
576,347 |
.22 |
Institutional Class |
68 |
.15 |
|
$ 577,424 |
|
* Annualized
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $7,216 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender |
Average Daily |
Weighted Average Interest Rate |
Interest |
Borrower |
$ 18,683,400 |
2.17% |
$ 5,631 |
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounted to $652
Semiannual Report
7. Committed Line of Credit - continued
and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Net income from lending portfolio securities during the period amounted to $155,565.
9. Expense Reductions.
Through arrangements with each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, credits reduced each class' transfer agent expense as noted in the table below.
|
Transfer Agent |
Mega Cap Stock |
$ 8 |
In addition, FMR voluntarily agreed to reimburse a portion of Mega Cap Stock's operating expenses. During the period, this reimbursement reduced the class's expenses by $21,625.
10. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
11. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
|
Six months ended |
Year ended |
From net investment income |
|
|
Class A |
$ 5,012 |
$ - |
Class T |
1,485 |
- |
Class B |
634 |
- |
Class C |
2,462 |
- |
Mega Cap Stock |
8,059,632 |
2,028,069 |
Institutional Class |
1,877 |
- |
Total |
$ 8,071,102 |
$ 2,028,069 |
From net realized gain |
|
|
Class A |
$ 291 |
$ - |
Class T |
296 |
- |
Class B |
207 |
- |
Class C |
292 |
- |
Mega Cap Stock |
1,263,428 |
12,126,374 |
Institutional Class |
188 |
- |
Total |
$ 1,264,702 |
$ 12,126,374 |
12. Share Transactions.
Transactions for each class of shares were as follows:
|
Shares |
Dollars |
||
|
Six months ended December 31, 2008 |
Year ended |
Six months ended December 31, 2008 |
Year ended |
Class A |
|
|
|
|
Shares sold |
92,614 |
10,749 |
$ 666,998 |
$ 114,109 |
Reinvestment of distributions |
668 |
- |
4,811 |
- |
Shares redeemed |
(30,699) |
- |
(213,333) |
- |
Net increase (decrease) |
62,583 |
10,749 |
$ 458,476 |
$ 114,109 |
Class T |
|
|
|
|
Shares sold |
19,792 |
13,813 |
$ 138,373 |
$ 145,705 |
Reinvestment of distributions |
225 |
- |
1,781 |
- |
Shares redeemed |
(10,735) |
(75) |
(72,562) |
(773) |
Net increase (decrease) |
9,282 |
13,738 |
$ 67,592 |
$ 144,932 |
Semiannual Report
12. Share Transactions - continued
|
Shares |
Dollars |
||
|
Six months ended December 31, 2008 |
Year ended |
Six months ended December 31, 2008 |
Year ended |
Class B |
|
|
|
|
Shares sold |
5,536 |
10,836 |
$ 41,197 |
$ 114,788 |
Reinvestment of distributions |
106 |
- |
833 |
- |
Shares redeemed |
(808) |
(9) |
(7,337) |
(99) |
Net increase (decrease) |
4,834 |
10,827 |
$ 34,693 |
$ 114,689 |
Class C |
|
|
|
|
Shares sold |
61,613 |
9,953 |
$ 454,109 |
$ 105,728 |
Reinvestment of distributions |
373 |
- |
2,754 |
- |
Shares redeemed |
(3,012) |
- |
(18,812) |
- |
Net increase (decrease) |
58,974 |
9,953 |
$ 438,051 |
$ 105,728 |
Mega Cap Stock |
|
|
|
|
Shares sold |
22,345,635 |
62,330,525 |
$ 171,418,950 |
$ 706,742,566 |
Reinvestment of distributions |
1,015,272 |
1,173,267 |
8,283,272 |
13,245,178 |
Shares redeemed |
(25,020,288) |
(13,126,183) |
(207,426,868) |
(142,308,777) |
Net increase (decrease) |
(1,659,381) |
50,377,609 |
$ (27,724,646) |
$ 577,678,967 |
Institutional Class |
|
|
|
|
Shares sold |
17,421 |
9,425 |
$ 120,754 |
$ 100,000 |
Reinvestment of distributions |
172 |
- |
1,400 |
- |
Net increase (decrease) |
17,593 |
9,425 |
$ 122,154 |
$ 100,000 |
A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period February 5, 2008 (commencement of sale of shares) to June 30, 2008.
Semiannual Report
Fidelity Mega Cap Stock Fund (formerly known as Fidelity Growth & Income II Portfolio)
Each year, typically in July, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly and, acting directly and through its separate committees, requests and receives information concerning, and considers at each of its meetings factors that are relevant to, its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. Each committee has a written charter outlining the structure and purposes of the committee. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.
At its July 2008 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders. The Board also approved agreements with foreign sub-advisers Fidelity Management & Research (Japan) Inc. and Fidelity Management & Research (Hong Kong) Limited, as well as amendments to the fund's agreement with Fidelity Management & Research (U.K.) Inc.
In considering whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund's shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Semiannual Report
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the backgrounds of the fund's investment personnel and the fund's investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services. The Board further considered that Fidelity voluntarily pays for market data out of its own resources.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge. The Board noted that Fidelity has taken a number of actions over the previous year that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) contractually agreeing to reduce the management fees on Fidelity's Institutional Money Market Funds and launching Class IV and Institutional Class of certain of these funds; (iii) reducing the transfer agent fees for the Fidelity Select Portfolios and Investor Class of the VIP funds; and (iv) launching Class K of 29 equity funds as a lower-fee class available to certain employer-sponsored retirement plans.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund's absolute investment performance, as well as the fund's relative investment performance measured against (i) a broad-based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one-, three-, and five-year periods ended December 31, 2007, the fund's cumulative total returns, the cumulative total returns of a broad-based securities market index ("benchmark"), and a range of cumulative total returns of a peer group of mutual funds identified by Morningstar, Inc. as having an investment style similar to that of the fund based on underlying portfolio holdings. (The fund did not offer Advisor classes as of Decem-ber 31, 2007.) The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the peer group whose performance was equal to or lower than that of the fund.
Semiannual Report
Fidelity Mega Cap Stock Fund
The Board reviewed the fund's relative investment performance against its peer group and stated that the performance of the fund was in the first quartile for the one- and three-year periods and the third quartile for the five-year period. The Board also stated that the investment performance of the fund compared favorably to its benchmark for the one- and three-year periods, although the fund's five-year cumulative total return was lower than its benchmark.
The Board considered that FMR has taken steps to refocus and strengthen equity research, equity portfolio management, and compliance.
Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's management fee and total expenses compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board's management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared. The Board also considered supplemental information about how the fund's management fee and total expenses ranked relative to groups based on Lipper classifications, which take into account a fund's market capitalization and style.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a TMG % of 11% means that 89% of the funds in the Total Mapped Group had higher management fees than the fund. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to non-Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee ranked, is also included in the chart and considered by the Board.
Fidelity Mega Cap Stock Fund
The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2007.
Based on its review, the Board concluded that the fund's management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
Semiannual Report
In its review of the fund's total expenses, the Board considered the fund's management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered current and historical total expenses of the fund compared to competitive fund median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund's total expenses ranked below its competitive median for 2007.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund's total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of the results of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of Fidelity's methodologies used in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
Semiannual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
The Board has also reviewed Fidelity's non-fund businesses and any fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including (i) fund performance trends and actions to be taken by FMR to improve certain funds' overall performance; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability and the extent to which portfolio manager compensation is linked to fund performance; (v) Fidelity's fee structures and rationale for recommending different fees among categories of funds; and (vi) Fidelity's rationale for recommending which funds should have a performance adjustment component as part of their management fees.
Semiannual Report
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co. Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Japan) Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Research & Analysis Company
Fidelity Investments Japan Limited
FIL Investment Advisors
FIL Investment Advisors
(U.K.) Ltd.
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
AGIII-USAN-0209-01 1.855222.101
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Not applicable.
(b) Not applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Hastings Street Trust's Board of Trustees.
Item 11. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Hastings Street Trust's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
Item 12. Exhibits
(a) |
(1) |
Not applicable. |
(a) |
(2) |
Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) |
(3) |
Not applicable. |
(b) |
|
Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Hastings Street Trust
By: |
/s/ Kenneth B. Robins |
|
Kenneth B. Robins |
|
President and Treasurer |
|
|
Date: |
March 11, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: |
/s/ Kenneth B. Robins |
|
Kenneth B. Robins |
|
President and Treasurer |
|
|
Date: |
March 11, 2009 |
By: |
/s/Christine Reynolds |
|
Christine Reynolds |
|
Chief Financial Officer |
|
|
Date: |
March 11, 2009 |
Exhibit EX-99.CERT
I, Kenneth B. Robins, certify that:
1. I have reviewed this report on Form N-CSR of Fidelity Hastings Street Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based upon such evaluation; and
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: March 11, 2009
/s/Kenneth B. Robins |
Kenneth B. Robins |
President and Treasurer |
I, Christine Reynolds, certify that:
1. I have reviewed this report on Form N-CSR of Fidelity Hastings Street Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based upon such evaluation; and
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: March 11, 2009
/s/Christine Reynolds |
Christine Reynolds |
Chief Financial Officer |
Exhibit EX-99.906CERT
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code)
In connection with the attached Report of Fidelity Hastings Street Trust (the "Trust") on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the Trust does hereby certify that, to the best of such officer's knowledge:
1. The Report fully complies with the requirements of 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust as of, and for, the periods presented in the Report.
Dated: March 11, 2009
/s/Kenneth B. Robins |
Kenneth B. Robins |
President and Treasurer |
Dated: March 11, 2009
/s/Christine Reynolds |
Christine Reynolds |
Chief Financial Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Trust and will be retained by the Trust and furnished to the Securities and Exchange Commission or its staff upon request.
@V)-2I,K'$)VKT(=J#4O`KW/ICKL>];
MM'[-YNU+%(#C@8['I@*`V.#DR@X?1]168>C\QIUMVJ_W&6F[7/>:@BG6H^156,Q78*T(8:W(D:5+'/V4!2PS
M,IQ2G:78TVI82S2)Y5S+JHC(M=15O>F)2A5'SV#3T&!/=CV,TFQ3I*R(*3@N
M./W`E]'05U!*I+#3D2K)+\A3@TA)/EW)JB@)A76EEYR-0TR(F9304/VOTE0$
M8QR)+WTHGE!:<[K4$O6*L32/WHRMG8!9AY#9,X35L80/&\U9GE4YS2S%L,15
M':@*`T3%'J55Z<.LA7`!AD#.IH#8[S'2S++!`R&++,E1),Q77[*JS/I%D6?0
M0D5[=IP1)LR1(!VR]FCYX&@=F\O._APZ85;-+$U3I/R:WF@
MD\FA5=E\$5B,49MNU
/($.*'$FRI,F3*%.J7,FRI"8Q[A;,9#+LN,A/V3&1G[(CY6[Y"2/&,9)WI&/HRQC(5-YR@J!\I61
M?&6_W+C+/2PRF`]RXB8;F<;*17.27SQF]/"W_\UD_C*<9R/F.3L'RW;>L';5
M;&0VYUG/.OXSBK5KYB$_6="#MK&@^>Q;1@/9SW_F\I\+W5M*\_C0@BXSHAU-
M%D[G&-)YEG2>+3T64M<8TY/&
/($.*'$FRI,F3*%.J7,FRI %0@W!.$
MLS9!_X)PC 9FHE3;JI$&C]H.LF%8JQH&K0(^E055OQ_$80!NJ*
MW@G!CNDZF^D!9#V6UEHC0>>RS3H:P(D17E(PE3&3[>O\Q`NN1D>5@&3MG6>0
MF2]\0?.1,3>.F.E2NKOGQE#+(98Q.+0;&5",,@O-P2
MP5R/J8F8&))'Z;P2=AD(`WHCHT++&+'-Z5MFBJ>.0$J(%:;/9=,V[CL3`KT[
M)Y-.:1P2=]G0#8T"]J@5=;D"$GV7+E'-V1JA=Z,3!RU\!+IMI`.;E<$_N`2CE8-
M/N$6?E81?N$:#E$5ON$>CE`9CE%BE(9'(4_SIK*48R)CDQ2@Y4V"RMR$U5EK
M-=8SD,W`9<'49$N
M_;HX$:4WG!#$?1.9Y4LH/A,=3N$&BE/U2!"MNXOSPA`M8,VNZQ.\)3-C_@]M
MKA/?Q:QGCJ[TC!.!5'8Q$>(:E;V3M['H&I2`H`I6T`*!7NBJ8.B(_W[HBI[H
MC+[HCM[HD*[HLA'HKNVD!L'9X)N%D;[IC][IG![IB$T%JH#8*)`"INXLB3[H
MAJ[JGM[JG^[JA^ZK=\="IX'IKHOF/)$H:7OI_&T27>ZJ?R><8?X/2QNU5WOL
MA(OLRI[LS([L*/"T6M&TEIT"4]L"+""XS9[MR[[MVDZXT;X"ECVU*'"UQOZT
MY<[MZ-[MZ7[LI0[MX\ZTTU[MU^ZTUNZT:$S$F9[F*J'G&;6O*O+G!/&].C-E
M3-ON],X"U3ZU=BZ
I(_
M:HK)3RXRE'^)ZD.J^LHQEF=7Y8INCWQ9VM,V#:WW;.#90KC8N09B12559U\W
M!M@,UK-N:;NXB`:;H0K?89_3_.>,)IRC@_9OH0\^IA5;F]V,+N]B"3?E0(*;
MTI&=W&01/4WRX5$Z',PL>JGMQW;6NSG
\MX/Y(%5_!
M$[GIP/]QQ"RA6/N5AMUUVM\M7RGEG.(]7^&-8/:=5V%97^
/($.*'$FRI,F3*%.J7,FRI <[E'7$@TI/4[W;>4XX0YQ%+N4'+..GLA]YGG-V[@ZX9C^[9
MFG@UR`ZT;W[G)[SD"K'LDEO9V*S$W>$"XOT/3?#$4F[0X:)-^,D<62!26T[K
M7>[M,8CK[/QS!*)JVMS,P.&NP5ZR!T&RSVO0UA-%(.9*Q
M$;[LAD`4V,5C@/(*DK3FKN15BB_A"
/($.*'$FRI,F3*%.J7,FRI ``V#2MTJ(YP!Q?SRZPP8*>O*=,P+>-U*)TSJE2S
MD:WO5^/_L2AS+PJK-)[,\/RJKUHP1/A6L^>B0!.`],N@-/9J+_8V=6OC`4-H
ML1Y;<=\B,M2J[_8.8^Q`V[L0/'=?[>KQN7]?S.ZUX_H'!+L2.#1/F"\B[\24]0NDBM9R$LQ1]!
MQ'-""C^4DZ71N7YWDCZ%!*$U9!"$M1=#
NT#TXX0"4M8:S!=;1%0J3T<\3_6LRU^
P#D]'MH<@!!]7=@5]TV:-TV7*$&QZB$YZ
M/^"8/]X=WZ9-!1<(<13X]>JP%6$/Z](P0Q$E!#69#0S);BV9<"Q-U"Z7'2-&
M9O^AJXX/M_9+^4+PF/!M;^`^\78W2FU.5_;XYKU3P=I6UG72]'07&''"J"5Q
MGW<\_?>$L.'J6&VNV/<>1]AR?LF`5R
,RC'@\6$``[ ` end
/($.*'$FRI,F3*%.J7,FRI
/($.*'$FRI,F3*%.J7,FRI D\)1/*O2*B]$(9<,
M+$.X(LSL/;WD&Y"^^A[FG1@;07(H]6>WYX47PY4K_(&**S(]>2/JD((FS!+I[S,&L9'S%#
M@*;_&%$$)N(Q(F9HX]I@CR&(`F):'YG"@>#+F8WGHN)G)MYI&^"\O)H(8
M*",46$C*F5*D66``(Q9NH1KQ5F]DD14W$ABB:#H06A:P&*&`M6T8$F^C2*&'
MH1>"01UC84(+BA5ZLQ88FJ"'P8=9<2^84:%IXZ(SUGHFBA#MQIDE%9UZ^$^)
M"!*'.!&=.%(%FJ/\M*.%J)`<(8LPA:-"NJ0!-X9,^J1*V(M0.J4?%J14>J6(
MI:18NJ5A9:5<^J4WZJ1@.J8$*J9D>J8>I:5HNJ84Y:5L^J8'I:8&YIE'56:-
MAT9!P2A?,HKTY*8O!7.`^G)ZXQ5+U)\W*5::B'/XXA6K_P*A,Q&H@"H7:<%#
M,AH4L*25L201
"U%L(\K`L@L$/#>SFWM#G1;UZ! ]PS[7`DPB-."-<0I39
MT9HH**4(#0*M$@@]TA1UPDN93F>\D,&@"ZJ`%['"4LGXT%=IS*13M^QQC>"T
MT/\33<+RS$LM(\LV#:JN%6PMVW,(#$TKI[O\=C!Z>>?__H$.W7N.I%-$X%=2\E/_4VQCUS!.^5W%9L-+/(IM0US*-*YAG(J\1#
M/]3*-5S)KC2FKP1+I8S%L8RTK31+Q\A*LR3*5XE*FO3&D#F*F2@H@R!*?DS+
M&_O`F"$DH(B>0=*>3_%'=!FWN:04\DA)
W7AVK%ABPKT.U8K&G1SCT*``!3
M@86?`E"8RK#$PH\7&RPL^0'ELULA'Z1\^6/ALXTY5Q;M&'%ISZ(/F]2,^#!K
MRY4I4E[[^:%F/[$[)A:(6_1`TIAK9P80G'A#W)A'OO[-FK)JI,N93(*TE,#X(8JH1+_Z^$S!-2S=6LN_.[.V0
!D,Y]9
M3[/V5TMI,,H5R4QA?%B`-=B`05P`5]/))[(,D#3XN4/B)TN_)T2L3$
MT*@$S*E
G$:\E,R'2`5A@E-7B],YE=,ZI=,[M=,\Q=,]U=,^Y=,_#:E^X[$"/-X/]E%F':40@^X?,!7W]N+7%5R_37L4%X[](8CVI
MLFD-,?\GCMP
/($.*'$FRI,F3*%.J7,FRI
M=%4VG(GW=6:DE#V&>25DDE6XY(14TI?7B$5>:1YO!4G(IX&TN4EG@CQ>)YB5
MA=ZH9X_0T LKA\S1S*H=#@=>*7F7
MRN8U6>5I4.380J]L+*DQYBAJ7*I6F.*QI4T?$TJT>]2\I)6-8L4JM=>U4
MI0\TZEVQ&DN<(J1@`ZK3=JBU'+0"=2]3-:QW<-J9K595K#[C:5,'BYFOED6E
M;`TJ7S=K.LWV5;"8O2Q9"2+:PBZ5.34UK&9VTZRK7I:N8XEM3O[C*+#_?$A$
M"#F;;'?+V]Y2I6#I(\M7?4O
B0W7<
M+%[DIFYBQ(T=/7Y\B.*C1)`E37I,=5+E2I8M7?XCF3#E25A@;-I
+QB6J$073TMU-$0)6XFP,*1P?$1?\N7(VEZ#@F
M]$?7<\B^>YH^8K!DP1HR;$"("<:*_#J`>\*';"W`NL?K\\1
/($.*'$FRI,F3*%.J7,FRI 9D/6;DDK.@T["=7@WCG?O8LF)E-$7`)GG7YQ^EX4I"
MYT2E`4FML7W:!R@RXFV78B,?5VM(B$3MA8/FUSTJI7X:QWY8=UTHA7XQ,5._
M%AU-!WU=&%'E-Q.)8CUA*%/G=X89I84M83EJN!(52%_25!$/M2Z501@@(6YO
MP6T7P1:+L6>N!S\601JGIA:"B"B2%A65Q894EX8V_Q4(+1")DK@*P?$XP78\
M1Z=!KJ818_@V(N%)FSAS@-@]$_1WU^,VG5AE<7A2JR")DA@(#Y&*8*AM838N
M3D02M48^_9>'-D=RZ,>%#C$9BZ$
Y
M-A'+PAI^**#,\%S*&L'+!]NU[2P2\0S/FFS)[]P"E^S/FYS/`CW0D>Q]'4.Z
MFS'&-U60T!R350`HT6PHW#S1W4S1W&R04CR3CI$"E.R*&\VW%9T2]&Q$#K.R
MK/JF,T'*J/J5@W.H+^')?>R)2HK$1O^ESY&X`AT]R?U,T#S=TY/LG.\'%$*L
MPC;AR3/LFT=<$Z0
#RK6.!AP17O8O0#>2+ M!1L^2*`PK,-Q"0::U.HP'L:+
M\:9N-3FT*=R74>G>Q;O1J5V/KV[>=.@'ZQ0``*;,')I*I&(`BO.JY!OX\=O)
M,.%&GHPYH>:\=@V*!;WPZTG-%=EF],@9K]R-JBO+?!W[+O_/M+)MGZRM,'?F
MV+M;^L;K&_A=K`S)NL7W-:S9JQ[7GG8[]_8#UEFGM[Z>_;=D[=T[)I#6
M`8S]ZL.@=04Q0XK)7.JL0[GGJ:E2WW'2N.:(Q*W-<9!K*9C0U@@BQ8B,/%<4
M$V82*!!,2K$M!OK=B>H6R3S.9&15N].BTJ607BU*@4F:4M94UKMH@=%#8_+>
M"+\5*&5.:&:O$EB:VB=-\Z@1C"B,VXZLJ2=DSLA&2%L4X5:UHVR.D)K/LY(]
MJ0;_*3=M[D<2'-E!QG3*?-Z)7/.[##$I!;&9#
E.5)=\5,!(E1(,J)V>K>Q-RUK#BAHI6_V(U3>K1+*G
MQ#3KM=CR=#/WQ65=4G4QNPJ#U]HY9Y13+ZGD6LS2