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UNITED STATES FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3221
Fidelity Charles 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:
October 31
Date of reporting period:
October 31, 2008
Item 1. Reports to Stockholders
Fidelity® Annual Report
October 31, 2008
(2_fidelity_logos) (Registered_Trademark)
Chairman's Message
Ned Johnson's message to shareholders.
Performance
How the fund has done over time.
Management's Discussion
The manager's review of fund performance, strategy and outlook.
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 financial statements.
Report of Independent Registered Public
Accounting Firm
Trustees and Officers
Distributions
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.
Annual Report
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)
Global Balanced
Fund
Contents
Annual Report
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Turmoil has been the watchword for the world's securities markets in 2008, with domestic and international stocks down sharply amid the global credit squeeze. A flight to quality boosted returns for U.S. Treasuries, one of the few asset classes with positive results heading into the latter stages of the year. Financial markets are always unpredictable, but 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
Annual Report
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended October 31, 2008 |
Past 1 |
Past 5 |
Past 10 |
Fidelity® Global Balanced Fund |
-26.96% |
5.13% |
5.38% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Global Balanced Fund on October 31, 1998. The chart shows how the value of your investment would have changed, and also shows how the MSCI® World Index performed over the same period.
Annual Report
Comments from Derek Young, Lead Portfolio Manager of Fidelity® Global Balanced Fund
In a dramatic reversal of what had been a multiyear growth story, international stocks fell hard during the 12 months ending October 31, 2008, especially so during the latter stages of the period and mostly as a result of fallout from the financial crisis that emanated from the U.S. The viral spread of this financial contagion - which began in the subprime mortgage market, then froze the credit markets, hobbled major financial institutions and eventually slowed economic growth worldwide - left virtually no corner of the globe untouched. Developed international equity markets - as gauged by the MSCI® Europe, Australasia, Far East (EAFE®) Index, which monitors established markets outside the U.S. and Canada - fell 46.54%, while the Standard & Poor's 500SM Index, a measure of U.S. stocks, dropped 36.10%. Among countries constituting at least 1% of the EAFE index, Switzerland had the "least worst" showing, falling roughly 32%, followed by Japan, where stocks slid by around 37%, and the weakest overall performance came from Belgium, where stocks slipped nearly 70%. In the United Kingdom, the largest index component, equities were down almost 48%. Emerging markets were the weakest of the global economies, declining 56.22% as measured by the MSCI Emerging Markets Index. Meanwhile, in the fixed-income sector, the Citigroup® World Government Bond Index registered a 2.08% gain.
Within this disappointing overall environment, the fund posted a -26.96% return for the year, which was basically in line with the 26.24% decline in the Fidelity Global Balanced Composite Index - a 60%/40% blend of the MSCI World Index and the Citigroup World Government Bond Index. The decision to create an underweighting in equities - especially in markets outside the U.S., where stock performance was weaker - coupled with increasing the fund's allocation to developed-country debt and maintaining a meaningful cash position, proved beneficial to relative performance. This relative gain from overall asset allocation was largely offset, however, by unfavorable security selection, particularly among euro zone bonds in the fixed-income subportfolio. Although all five of the fund's equity subportfolios had negative absolute results, four of them - the U.S., Canadian, European and Japanese sleeves - outperformed their individual benchmarks, largely on the strength of favorable stock selection. The Asia Ex-Japan sleeve fell short of its benchmark, however, largely due to unproductive stock picks in industrials and energy, which were under pressure from the severe global economic slowdown, especially in Australia and Singapore.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, 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 (May 1, 2008 to October 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.
Annual Report
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 |
Actual |
1.13% |
$ 1,000.00 |
$ 761.00 |
$ 5.00 |
Hypothetical (5% return per year before expenses) |
|
$ 1,000.00 |
$ 1,019.46 |
$ 5.74 |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).
Annual Report
Geographic Diversification (% of fund's net assets) |
|||
As of October 31, 2008 |
|||
![]() |
United States of America 38.1% |
|
|
![]() |
Japan 22.9% |
|
|
![]() |
Germany 10.2% |
|
|
![]() |
United Kingdom 7.0% |
|
|
![]() |
France 3.1% |
|
|
![]() |
Canada 3.1% |
|
|
![]() |
Switzerland 2.7% |
|
|
![]() |
Australia 2.5% |
|
|
![]() |
Italy 1.6% |
|
|
![]() |
Other 8.8% |
|
Percentages are adjusted for the effect of futures contracts, if applicable. |
As of April 30, 2008 |
|||
![]() |
United States of America 38.5% |
|
|
![]() |
Japan 15.4% |
|
|
![]() |
Germany 10.3% |
|
|
![]() |
United Kingdom 7.2% |
|
|
![]() |
France 4.6% |
|
|
![]() |
Australia 3.9% |
|
|
![]() |
Canada 3.4% |
|
|
![]() |
Switzerland 2.2% |
|
|
![]() |
Italy 1.4% |
|
|
![]() |
Other 13.1% |
|
Percentages are adjusted for the effect of futures contracts, if applicable. |
Asset Allocation |
||
|
% of fund's |
% of fund's net assets |
Stocks |
51.7 |
56.4 |
Bonds |
40.5 |
35.2 |
Convertible Securities |
0.0 |
0.1 |
Other Investments |
0.2 |
0.0 |
Short-Term Investments and Net Other Assets |
7.6 |
8.3 |
Top Five Stocks as of October 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Union Pacific Corp. (United States of America) |
2.1 |
0.3 |
Bank of America Corp. (United States of America) |
1.6 |
0.0 |
Wells Fargo & Co. (United States of America) |
1.6 |
0.0 |
Google, Inc. Class A (sub. vtg.) (United States of America) |
1.6 |
1.0 |
VF Corp. (United States of America) |
1.4 |
0.0 |
|
8.3 |
|
Top Five Bond Issuers as of October 31, 2008 |
||
(with maturities greater than one year) |
% of fund's |
% of fund's net assets |
Japan Government |
12.4 |
9.4 |
German Federal Republic |
7.9 |
7.6 |
U.S. Treasury Obligations |
3.4 |
1.6 |
Fannie Mae |
1.5 |
0.5 |
French Republic |
1.0 |
1.7 |
|
26.2 |
|
Market Sectors as of October 31, 2008 |
||
|
% of fund's |
% of fund's net assets |
Financials |
18.6 |
20.1 |
Health Care |
7.4 |
3.7 |
Information Technology |
7.0 |
5.3 |
Consumer Staples |
6.6 |
4.6 |
Consumer Discretionary |
5.3 |
5.5 |
Industrials |
5.9 |
7.9 |
Energy |
3.9 |
9.1 |
Materials |
2.6 |
5.4 |
Utilities |
2.0 |
3.0 |
Telecommunication Services |
1.6 |
1.7 |
Annual Report
Showing Percentage of Net Assets
Common Stocks - 51.7% |
|||
Shares |
Value |
||
Australia - 2.4% |
|||
Australia & New Zealand Banking Group Ltd. |
23,298 |
$ 272,967 |
|
BHP Billiton Ltd. |
53,934 |
1,035,594 |
|
Commonwealth Bank of Australia |
29,164 |
796,802 |
|
Computershare Ltd. |
113,943 |
643,839 |
|
CSL Ltd. |
45,440 |
1,104,510 |
|
Lion Nathan Ltd. |
76,442 |
451,499 |
|
Macquarie Group Ltd. (g) |
2,207 |
43,762 |
|
National Australia Bank Ltd. |
14,703 |
238,447 |
|
Origin Energy Ltd. |
36,385 |
381,379 |
|
QBE Insurance Group Ltd. |
43,340 |
739,035 |
|
Rio Tinto Ltd. |
7,198 |
372,177 |
|
Sunland Group Ltd. |
98,830 |
65,308 |
|
Telstra Corp. Ltd. |
267,188 |
735,075 |
|
Wesfarmers Ltd. |
33,183 |
476,641 |
|
Woolworths Ltd. |
45,019 |
838,787 |
|
WorleyParsons Ltd. |
12,983 |
130,364 |
|
TOTAL AUSTRALIA |
8,326,186 |
||
Belgium - 0.2% |
|||
InBev SA |
5,800 |
233,932 |
|
KBC Groupe SA |
2,200 |
94,583 |
|
Umicore SA |
11,500 |
205,658 |
|
TOTAL BELGIUM |
534,173 |
||
Bermuda - 0.1% |
|||
Noble Group Ltd. |
258,000 |
187,809 |
|
Canada - 2.2% |
|||
Agnico-Eagle Mines Ltd. |
1,500 |
41,375 |
|
Agrium, Inc. |
1,100 |
42,119 |
|
Astral Media, Inc. Class A (non-vtg.) |
1,600 |
36,981 |
|
Bank of Montreal |
3,700 |
132,007 |
|
Bank of Nova Scotia |
4,700 |
156,654 |
|
Barrick Gold Corp. |
10,400 |
237,704 |
|
BCE, Inc. |
7,500 |
217,884 |
|
Bombardier, Inc. Class B (sub. vtg.) |
21,100 |
81,369 |
|
Brookfield Asset Management, Inc. Class A |
6,000 |
104,993 |
|
Brookfield Properties Corp. |
1,100 |
11,099 |
|
Cameco Corp. |
700 |
11,454 |
|
Canadian Imperial Bank of Commerce |
2,300 |
104,261 |
|
Canadian National Railway Co. |
6,600 |
286,376 |
|
Canadian Natural Resources Ltd. |
10,100 |
509,439 |
|
Canadian Oil Sands Trust |
4,200 |
112,646 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
Canada - continued |
|||
Canadian Pacific Railway Ltd. |
2,300 |
$ 104,051 |
|
Canadian Utilities Ltd. Class A (non-vtg.) |
1,500 |
52,745 |
|
CI Financial Income Fund |
1,500 |
21,770 |
|
Corus Entertainment, Inc. Class B (non-vtg.) |
3,800 |
44,435 |
|
Emera, Inc. |
2,300 |
40,953 |
|
Enbridge, Inc. |
2,700 |
93,732 |
|
EnCana Corp. |
12,500 |
634,745 |
|
Fairfax Financial Holdings Ltd. |
200 |
54,901 |
|
Finning International, Inc. |
1,600 |
19,439 |
|
Fortis, Inc. |
4,500 |
98,151 |
|
Gildan Activewear, Inc. (a) |
1,000 |
23,304 |
|
Goldcorp, Inc. |
9,600 |
179,453 |
|
Great-West Lifeco, Inc. |
2,000 |
42,461 |
|
Husky Energy, Inc. |
2,000 |
60,043 |
|
IGM Financial, Inc. |
1,300 |
39,287 |
|
Imperial Oil Ltd. |
3,500 |
123,797 |
|
ING Canada, Inc. |
1,200 |
32,652 |
|
Keyera Facilities Income Fund |
5,000 |
75,717 |
|
Kinross Gold Corp. |
5,500 |
57,244 |
|
Manulife Financial Corp. |
13,800 |
276,046 |
|
Metro, Inc. Class A (sub. vtg.) |
2,800 |
70,476 |
|
National Bank of Canada |
1,200 |
44,993 |
|
Nexen, Inc. |
5,600 |
88,890 |
|
Onex Corp. (sub. vtg.) |
900 |
15,562 |
|
Open Text Corp. (a) |
1,000 |
25,344 |
|
Penn West Energy Trust |
2,200 |
39,209 |
|
Petro-Canada |
4,400 |
109,982 |
|
Petrobank Energy & Resources Ltd. (a) |
7,200 |
137,336 |
|
Potash Corp. of Saskatchewan, Inc. |
3,100 |
264,306 |
|
Power Corp. of Canada (sub. vtg.) |
4,700 |
102,123 |
|
Power Financial Corp. |
1,500 |
37,531 |
|
Quebecor, Inc. Class B (sub. vtg.) |
2,300 |
37,519 |
|
Research In Motion Ltd. (a) |
5,000 |
252,150 |
|
RioCan (REIT) |
4,100 |
57,158 |
|
Rogers Communications, Inc. Class B (non-vtg.) |
6,800 |
197,323 |
|
Royal Bank of Canada |
12,400 |
481,685 |
|
Shaw Communications, Inc. Class B |
2,400 |
42,017 |
|
Shoppers Drug Mart Corp. |
3,400 |
130,834 |
|
Silver Wheaton Corp. (a) |
29,300 |
102,057 |
|
SNC-Lavalin Group, Inc. |
1,400 |
36,771 |
|
Sun Life Financial, Inc. |
4,300 |
101,099 |
|
Suncor Energy, Inc. |
7,900 |
189,671 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
Canada - continued |
|||
Talisman Energy, Inc. |
8,700 |
$ 85,932 |
|
Teck Cominco Ltd. Class B (sub. vtg.) |
3,700 |
36,822 |
|
TELUS Corp. |
3,400 |
120,035 |
|
Toronto-Dominion Bank |
8,400 |
396,524 |
|
TransCanada Corp. |
8,600 |
259,755 |
|
Yamana Gold, Inc. |
6,000 |
28,612 |
|
Yellow Pages Income Fund |
2,000 |
14,513 |
|
TOTAL CANADA |
7,667,516 |
||
Cayman Islands - 0.1% |
|||
Belle International Holdings Ltd. |
948,000 |
455,280 |
|
Denmark - 0.2% |
|||
Genmab AS (a) |
3,600 |
162,587 |
|
Novo Nordisk AS Series B |
7,800 |
418,101 |
|
TOTAL DENMARK |
580,688 |
||
Finland - 0.1% |
|||
Nokia Corp. sponsored ADR |
19,100 |
289,938 |
|
France - 1.5% |
|||
AXA SA |
25,200 |
481,422 |
|
BNP Paribas SA |
10,300 |
743,673 |
|
Cap Gemini SA |
9,400 |
302,865 |
|
Credit Agricole SA |
12,500 |
180,838 |
|
Essilor International SA |
2,700 |
121,116 |
|
Pernod Ricard SA |
4,300 |
280,010 |
|
Pinault Printemps-Redoute SA |
7,100 |
452,486 |
|
Sanofi-Aventis |
10,000 |
633,571 |
|
Societe Generale Series A |
4,600 |
250,723 |
|
Suez Environnement SA (a) |
1,650 |
31,924 |
|
Total SA sponsored ADR |
26,600 |
1,474,704 |
|
Unibail-Rodamco |
2,100 |
316,012 |
|
TOTAL FRANCE |
5,269,344 |
||
Germany - 1.9% |
|||
Adidas-Salomon AG |
11,100 |
394,155 |
|
Bayer AG |
11,100 |
617,934 |
|
Bayerische Motoren Werke AG (BMW) |
17,500 |
454,041 |
|
Commerzbank AG |
6,200 |
67,415 |
|
E.ON AG |
30,300 |
1,159,181 |
|
ESCADA AG (a)(g) |
3,800 |
19,459 |
|
Fresenius AG |
8,500 |
504,329 |
|
GEA Group AG |
9,100 |
132,987 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
Germany - continued |
|||
Linde AG |
6,300 |
$ 529,085 |
|
Muenchener Rueckversicherungs-Gesellschaft AG (Reg.) |
5,800 |
769,805 |
|
RWE AG |
10,200 |
852,404 |
|
SAP AG |
8,200 |
291,971 |
|
SAP AG sponsored ADR |
2,600 |
91,858 |
|
Siemens AG (Reg.) |
4,900 |
293,638 |
|
Symrise AG |
17,200 |
213,645 |
|
TOTAL GERMANY |
6,391,907 |
||
Hong Kong - 0.5% |
|||
Cheung Kong Holdings Ltd. |
18,000 |
172,826 |
|
Esprit Holdings Ltd. |
79,000 |
448,883 |
|
Hang Seng Bank Ltd. |
64,500 |
804,793 |
|
Hutchison Whampoa Ltd. |
44,000 |
234,960 |
|
Sun Hung Kai Properties Ltd. |
14,000 |
122,655 |
|
TOTAL HONG KONG |
1,784,117 |
||
Ireland - 0.2% |
|||
Allied Irish Banks PLC |
13,700 |
72,975 |
|
CRH PLC |
15,400 |
341,353 |
|
Ryanair Holdings PLC sponsored ADR (a)(g) |
8,000 |
178,160 |
|
TOTAL IRELAND |
592,488 |
||
Italy - 0.6% |
|||
ENI SpA sponsored ADR |
20,700 |
994,635 |
|
Fiat SpA |
19,100 |
151,802 |
|
IFIL Finanziaria di Partecipazioni SpA |
12,436 |
38,555 |
|
Intesa Sanpaolo SpA |
133,700 |
489,069 |
|
Prysmian SpA |
10,600 |
128,589 |
|
UniCredit SpA |
111,600 |
273,054 |
|
TOTAL ITALY |
2,075,704 |
||
Japan - 6.4% |
|||
ABC-Mart, Inc. |
4,800 |
147,677 |
|
ACOM Co. Ltd. |
160 |
6,112 |
|
Asahi Glass Co. Ltd. |
16,000 |
100,535 |
|
Astellas Pharma, Inc. |
16,400 |
660,538 |
|
Benesse Corp. |
12,600 |
529,184 |
|
Bridgestone Corp. |
22,200 |
388,103 |
|
Canon, Inc. |
17,800 |
622,820 |
|
Capcom Co. Ltd. |
2,800 |
62,419 |
|
Central Japan Ry Co. |
118 |
969,270 |
|
Credit Saison Co. Ltd. |
8,300 |
88,079 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
Japan - continued |
|||
Daihen Corp. |
22,000 |
$ 51,288 |
|
Daiichi Sankyo Co. Ltd. |
8,500 |
174,283 |
|
Dainippon Screen Manufacturing Co. Ltd. |
92,000 |
196,143 |
|
Daiwa House Industry Co. Ltd. |
107,000 |
951,173 |
|
Denso Corp. |
23,100 |
450,210 |
|
Disco Corp. |
4,300 |
103,052 |
|
Doutor Nichires Holdings Co., Ltd. |
6,000 |
93,384 |
|
Fuji Machine Manufacturing Co. Ltd. |
7,300 |
63,033 |
|
Fuji Oil Co. Ltd. |
26,400 |
303,048 |
|
Fujifilm Holdings Corp. |
15,500 |
356,798 |
|
Fujitsu Ltd. |
49,000 |
192,649 |
|
Haseko Corp. |
140,500 |
127,136 |
|
Hitachi Ltd. |
119,000 |
558,683 |
|
Japan Airlines Corp. (a) |
121,000 |
275,328 |
|
Kao Corp. |
16,000 |
467,842 |
|
Kobayashi Pharmaceutical Co. Ltd. |
7,100 |
227,467 |
|
KOEI Co. Ltd. (g) |
11,300 |
123,287 |
|
Kubota Corp. |
43,000 |
215,821 |
|
Lawson, Inc. |
3,600 |
175,946 |
|
Maeda Road Construction Co. Ltd. |
27,000 |
192,147 |
|
Matsumotokiyoshi Holdings Co. Ltd. |
16,100 |
315,595 |
|
Matsushita Electric Works Coltd(OLD) |
34,000 |
296,730 |
|
Mazda Motor Corp. |
35,000 |
77,620 |
|
Mitsubishi UFJ Financial Group, Inc. |
177,900 |
1,117,898 |
|
Mitsubishi UFJ Lease & Finance Co. Ltd. |
5,170 |
123,808 |
|
Mitsui & Co. Ltd. |
12,000 |
116,268 |
|
Mitsui Chemicals, Inc. |
76,000 |
265,340 |
|
Mitsui O.S.K. Lines Ltd. |
46,000 |
240,196 |
|
Namco Bandai Holdings, Inc. |
9,200 |
94,602 |
|
Nintendo Co. Ltd. |
600 |
187,200 |
|
Nippon Building Fund, Inc. |
28 |
269,038 |
|
Nippon Meat Packers, Inc. |
7,000 |
96,007 |
|
Nippon Mining Holdings, Inc. |
47,000 |
143,876 |
|
Nissin Food Holdings Co. Ltd. |
9,800 |
280,114 |
|
Nomura Holdings, Inc. |
27,900 |
264,321 |
|
Nomura Real Estate Office Fund, Inc. |
18 |
102,329 |
|
NTT DoCoMo, Inc. |
685 |
1,086,320 |
|
Obayashi Corp. |
35,000 |
171,238 |
|
Okinawa Cellular Telephone Co. |
51 |
89,552 |
|
Osaka Securities Exchange Co. Ltd. |
74 |
243,149 |
|
Rakuten, Inc. |
1,376 |
682,101 |
|
Rinnai Corp. |
3,000 |
109,700 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
Japan - continued |
|||
Ryohin Keikaku Co. Ltd. |
2,200 |
$ 105,257 |
|
Sankyo Co. Ltd. (Gunma) |
5,200 |
231,354 |
|
Sega Sammy Holdings, Inc. |
20,800 |
157,236 |
|
Seven & I Holdings Co. Ltd. |
9,400 |
263,919 |
|
SHO-BOND Holdings Co. Ltd. |
8,300 |
148,274 |
|
SMC Corp. |
1,800 |
169,917 |
|
Sompo Japan Insurance, Inc. |
85,000 |
595,748 |
|
Square Enix Holdings Co. Ltd. |
10,600 |
267,039 |
|
Stanley Electric Co. Ltd. |
4,700 |
59,088 |
|
Sumitomo Corp. |
58,800 |
517,299 |
|
Sumitomo Electric Industries Ltd. |
37,500 |
303,605 |
|
Sumitomo Metal Industries Ltd. |
63,000 |
162,024 |
|
Sumitomo Mitsui Financial Group, Inc. |
178 |
713,542 |
|
Sumitomo Trust & Banking Co. Ltd. |
43,000 |
199,126 |
|
THK Co. Ltd. |
5,000 |
68,468 |
|
Toho Pharmaceutical Co. Ltd. |
13,400 |
143,657 |
|
Tohokushinsha Film Corp. |
12,400 |
64,996 |
|
Tokai Carbon Co. Ltd. |
6,000 |
31,458 |
|
Tokio Marine Holdings, Inc. |
10,700 |
322,070 |
|
Tokuyama Corp. |
37,000 |
187,365 |
|
Tokyo Electric Power Co. |
32,300 |
914,706 |
|
Toyota Motor Corp. |
15,400 |
601,354 |
|
Toyota Motor Corp. sponsored ADR |
4,000 |
304,360 |
|
Uni-Charm Corp. |
2,600 |
186,473 |
|
USJ Co. Ltd. |
209 |
86,414 |
|
TOTAL JAPAN |
22,051,206 |
||
Luxembourg - 0.0% |
|||
ArcelorMittal SA (France) |
3,900 |
101,437 |
|
Netherlands - 0.5% |
|||
ASML Holding NV (Netherlands) |
5,100 |
89,282 |
|
Koninklijke KPN NV |
60,200 |
847,808 |
|
Unilever NV (Certificaten Van Aandelen) |
37,600 |
906,140 |
|
TOTAL NETHERLANDS |
1,843,230 |
||
Norway - 0.1% |
|||
Pronova BioPharma ASA |
95,700 |
248,619 |
|
Papua New Guinea - 0.2% |
|||
Lihir Gold Ltd. (a) |
154,269 |
192,392 |
|
Oil Search Ltd. |
140,195 |
424,511 |
|
TOTAL PAPUA NEW GUINEA |
616,903 |
||
Common Stocks - continued |
|||
Shares |
Value |
||
Russia - 0.0% |
|||
OAO Gazprom sponsored ADR |
2,900 |
$ 59,305 |
|
Singapore - 0.5% |
|||
CapitaLand Ltd. |
97,000 |
194,404 |
|
DBS Group Holdings Ltd. |
79,000 |
603,046 |
|
Raffles Education Corp. Ltd. |
682,000 |
263,373 |
|
Rickmers Maritime |
396,000 |
112,689 |
|
United Overseas Bank Ltd. |
43,000 |
388,752 |
|
TOTAL SINGAPORE |
1,562,264 |
||
Spain - 0.4% |
|||
Banco Santander SA |
30,200 |
326,618 |
|
Inditex SA |
2,700 |
91,267 |
|
Telefonica SA sponsored ADR |
20,300 |
1,126,853 |
|
TOTAL SPAIN |
1,544,738 |
||
Sweden - 0.1% |
|||
H&M Hennes & Mauritz AB (B Shares) |
6,400 |
229,456 |
|
Switzerland - 2.7% |
|||
Actelion Ltd. (Reg.) (a) |
9,179 |
484,802 |
|
Credit Suisse Group (Reg.) |
18,346 |
685,880 |
|
EFG International |
10,940 |
235,461 |
|
Julius Baer Holding AG |
6,729 |
263,116 |
|
Lindt & Spruengli AG |
7 |
169,783 |
|
Lonza Group AG |
1,393 |
115,584 |
|
Nestle SA (Reg.) |
55,701 |
2,165,578 |
|
Nobel Biocare Holding AG (Switzerland) |
4,870 |
83,642 |
|
Novartis AG: |
|
|
|
(Reg.) |
20,249 |
1,027,578 |
|
sponsored ADR |
26,000 |
1,325,740 |
|
Roche Holding AG (participation certificate) |
9,094 |
1,390,417 |
|
Sonova Holding AG |
4,285 |
178,006 |
|
UBS AG: |
|
|
|
(For. Reg.) |
22,063 |
374,268 |
|
(NY Shares) |
13,645 |
230,601 |
|
Zurich Financial Services AG (Reg.) |
3,581 |
726,348 |
|
TOTAL SWITZERLAND |
9,456,804 |
||
United Kingdom - 4.1% |
|||
Aegis Group PLC |
86,900 |
91,572 |
|
Anglo American PLC (United Kingdom) |
3,600 |
90,317 |
|
AstraZeneca PLC sponsored ADR (g) |
36,000 |
1,528,560 |
|
Autonomy Corp. PLC (a) |
9,200 |
145,854 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
United Kingdom - continued |
|||
Barclays PLC |
45,700 |
$ 130,987 |
|
Bellway PLC |
38,300 |
333,620 |
|
BG Group PLC |
17,200 |
252,877 |
|
Bovis Homes Group PLC |
59,400 |
324,651 |
|
BP PLC |
55,900 |
455,612 |
|
British American Tobacco PLC (United Kingdom) |
24,700 |
677,420 |
|
Capita Group PLC |
36,700 |
379,174 |
|
Centrica PLC |
85,600 |
420,571 |
|
easyJet PLC (a) |
60,200 |
300,276 |
|
Experian PLC |
111,200 |
613,189 |
|
Hammerson PLC |
16,300 |
187,843 |
|
HBOS PLC |
65,500 |
107,238 |
|
HSBC Holdings PLC sponsored ADR |
19,200 |
1,132,800 |
|
Informa PLC |
64,100 |
217,142 |
|
Kesa Electricals PLC |
172,600 |
221,614 |
|
Kingfisher PLC |
136,900 |
252,651 |
|
Lloyds TSB Group PLC |
66,600 |
215,232 |
|
Man Group PLC |
43,600 |
251,693 |
|
National Grid PLC |
31,900 |
359,313 |
|
Persimmon PLC |
34,800 |
168,454 |
|
Prudential PLC |
72,500 |
364,147 |
|
Reckitt Benckiser Group PLC |
21,600 |
913,563 |
|
Redrow PLC |
49,600 |
165,869 |
|
Rio Tinto PLC (Reg.) |
6,200 |
289,580 |
|
Royal Dutch Shell PLC Class A (United Kingdom) |
42,700 |
1,173,027 |
|
SSL International PLC |
53,100 |
358,586 |
|
Standard Chartered PLC (United Kingdom) |
29,300 |
484,182 |
|
Tesco PLC |
110,500 |
605,367 |
|
Vodafone Group PLC |
266,600 |
512,799 |
|
Vodafone Group PLC sponsored ADR |
23,000 |
443,210 |
|
TOTAL UNITED KINGDOM |
14,168,990 |
||
United States of America - 26.7% |
|||
Amazon.com, Inc. (a) |
20,000 |
1,144,800 |
|
Amgen, Inc. (a) |
40,000 |
2,395,600 |
|
Anheuser-Busch Companies, Inc. |
1,800 |
111,654 |
|
Apple, Inc. (a) |
38,500 |
4,142,215 |
|
Bank of America Corp. |
226,700 |
5,479,339 |
|
Baxter International, Inc. |
38,000 |
2,298,620 |
|
Bristol-Myers Squibb Co. |
140,000 |
2,877,000 |
|
C.R. Bard, Inc. |
3,000 |
264,750 |
|
Capital One Financial Corp. |
70,300 |
2,750,136 |
|
Common Stocks - continued |
|||
Shares |
Value |
||
United States of America - continued |
|||
Chevron Corp. |
20,000 |
$ 1,492,000 |
|
Electronic Arts, Inc. (a) |
7,000 |
159,460 |
|
Exxon Mobil Corp. |
28,700 |
2,127,244 |
|
FMC Corp. |
67,800 |
2,952,012 |
|
Genentech, Inc. (a) |
5,700 |
472,758 |
|
Genzyme Corp. (a) |
6,000 |
437,280 |
|
Gilead Sciences, Inc. (a) |
29,000 |
1,329,650 |
|
Google, Inc. Class A (sub. vtg.) (a) |
14,800 |
5,318,528 |
|
Johnson & Johnson |
46,000 |
2,821,640 |
|
Masco Corp. |
159,000 |
1,613,850 |
|
Meritage Homes Corp. (a) |
50,000 |
686,500 |
|
Microsoft Corp. |
128,000 |
2,858,240 |
|
Oracle Corp. (a) |
194,900 |
3,564,721 |
|
PACCAR, Inc. |
99,200 |
2,900,608 |
|
Philip Morris International, Inc. |
67,000 |
2,912,490 |
|
PNC Financial Services Group, Inc. |
11,000 |
733,370 |
|
Procter & Gamble Co. |
21,000 |
1,355,340 |
|
Pulte Homes, Inc. |
284,300 |
3,167,102 |
|
QUALCOMM, Inc. |
59,800 |
2,287,948 |
|
Questar Corp. |
54,000 |
1,860,840 |
|
Raytheon Co. warrants 6/16/11 (a) |
112 |
1,710 |
|
Southwestern Energy Co. (a) |
49,000 |
1,745,380 |
|
Synthes, Inc. |
1,485 |
191,587 |
|
The Coca-Cola Co. |
34,000 |
1,498,040 |
|
The Travelers Companies, Inc. |
42,000 |
1,787,100 |
|
Tim Hortons, Inc. |
2,200 |
55,374 |
|
Union Pacific Corp. |
106,800 |
7,131,036 |
|
VF Corp. |
90,100 |
4,964,510 |
|
Virgin Media, Inc. |
22,800 |
131,328 |
|
W.R. Berkley Corp. |
79,800 |
2,096,346 |
|
Wal-Mart Stores, Inc. |
85,600 |
4,777,336 |
|
Wells Fargo & Co. |
159,900 |
5,444,595 |
|
TOTAL UNITED STATES OF AMERICA |
92,340,037 |
||
TOTAL COMMON STOCKS (Cost $210,998,705) |
178,378,139 |
Corporate Bonds - 9.4% |
||||
|
Principal Amount (e) |
Value |
||
Convertible Bonds - 0.0% |
||||
United Kingdom - 0.0% |
||||
Shire PLC 2.75% 5/9/14 |
|
$ 300,000 |
$ 204,000 |
|
Nonconvertible Bonds - 9.4% |
||||
Australia - 0.1% |
||||
Didon Tunisia Pty. Ltd. 6.3188% 3/13/12 (h)(j) |
|
100,000 |
60,000 |
|
QBE Capital Funding II LP 6.797% (h)(j) |
|
130,000 |
55,250 |
|
WT Finance (Aust) Pty Ltd./Westfield Europe Finance PLC/WEA Finance 3.625% 6/27/12 |
EUR |
300,000 |
316,770 |
|
TOTAL AUSTRALIA |
432,020 |
|||
Bermuda - 0.1% |
||||
MPF Corp. (Norway) AS 9.9538% 9/20/11 (d)(h)(j) |
|
300,000 |
45,000 |
|
Northern Offshore Ltd. 7.3188% 6/14/10 (h)(j) |
|
100,000 |
55,000 |
|
Rubicon Offshore Holdings Ltd. 9.635% 4/16/12 (h)(j) |
|
200,000 |
130,000 |
|
Seadrill Ltd. 7.99% 1/23/09 (h)(j) |
NOK |
500,000 |
71,266 |
|
TOTAL BERMUDA |
301,266 |
|||
British Virgin Islands - 0.0% |
||||
CEMEX SAB de CV 6.196% (j) |
|
100,000 |
44,750 |
|
Canada - 0.4% |
||||
Ontario Province 4.2% 3/8/18 |
CAD |
1,800,000 |
1,410,309 |
|
Cayman Islands - 0.3% |
||||
Bosphorus Financial Services Ltd. 4.6044% 2/15/12 (j) |
|
218,750 |
194,688 |
|
Finans Capital Finance Ltd. 9% 10/7/14 (Reg. S) (f) |
|
160,000 |
165,581 |
|
MUFG Capital Finance 5 Ltd. 6.299% (j) |
GBP |
100,000 |
111,158 |
|
PetroProd Ltd. 10.75% 1/12/12 (h)(j) |
|
200,000 |
110,000 |
|
SMFG Finance Ltd. 6.164% (j) |
GBP |
75,000 |
85,186 |
|
SMFG Preferred Capital USD 1 Ltd. 6.078% (h)(j) |
|
300,000 |
207,384 |
|
TOTAL CAYMAN ISLANDS |
873,997 |
|||
Cyprus - 0.1% |
||||
Colgrade Ltd. 8.25% 6/28/10 |
|
380,000 |
247,243 |
|
Mizuho Capital Investment Europe 1 Ltd. 5.02% (j) |
EUR |
100,000 |
98,261 |
|
Remedial Cyprus PCL 9.0188% 3/28/12 (h)(j) |
|
200,000 |
110,000 |
|
TOTAL CYPRUS |
455,504 |
|||
France - 0.6% |
||||
BNP Paribas SA: |
|
|
|
|
3.0106% 11/23/15 (j) |
|
200,000 |
183,480 |
|
8.667% (j) |
EUR |
100,000 |
118,804 |
|
Corporate Bonds - continued |
||||
|
Principal Amount (e) |
Value |
||
Nonconvertible Bonds - continued |
||||
France - continued |
||||
Caisse Nationale des Caisses d' Epargne et de Prevoyance 6.117% (j) |
EUR |
$ 50,000 |
$ 37,620 |
|
CMA CGM SA 5.5% 5/16/12 (Reg. S) |
EUR |
445,000 |
276,328 |
|
Compagnie de St. Gobain 5.643% 4/11/12 (j) |
EUR |
175,000 |
195,364 |
|
Credit Logement SA: |
|
|
|
|
4.604% (j) |
EUR |
250,000 |
234,444 |
|
5.558% 12/2/49 (j) |
EUR |
150,000 |
170,152 |
|
Natixis SA: |
|
|
|
|
5.171% 1/26/17 (j) |
EUR |
100,000 |
83,122 |
|
6.307% (j) |
EUR |
100,000 |
60,637 |
|
Societe Generale 5.136% 6/7/17 (j) |
EUR |
100,000 |
108,161 |
|
Veolia Environnement 6.125% 10/29/37 |
GBP |
200,000 |
271,113 |
|
Vivendi 5.75% 4/4/13 (Reg. S) |
|
300,000 |
282,483 |
|
TOTAL FRANCE |
2,021,708 |
|||
Germany - 0.2% |
||||
Bayer AG: |
|
|
|
|
5.493% 4/10/10 (j) |
EUR |
200,000 |
252,606 |
|
5.625% 5/23/18 |
GBP |
150,000 |
215,172 |
|
Deutsche Boerse AG 7.5% 6/13/38 (j) |
EUR |
200,000 |
180,555 |
|
Wuerttembergische Lebens AG 5.375% 6/1/26 (j) |
EUR |
100,000 |
101,942 |
|
TOTAL GERMANY |
750,275 |
|||
Hong Kong - 0.2% |
||||
Chong Hing Bank Ltd. 3.7488% 12/16/16 (j) |
|
175,000 |
152,387 |
|
Dah Sing Bank Ltd. 3.56% 6/3/16 (j) |
|
250,000 |
204,662 |
|
Wing Hang Bank Ltd. 6% (j) |
|
260,000 |
151,533 |
|
TOTAL HONG KONG |
508,582 |
|||
India - 0.1% |
||||
Export-Import Bank of India 1.3925% 6/7/12 (j) |
JPY |
40,000,000 |
324,824 |
|
ICICI Bank Ltd. 5.29% 1/12/10 (Reg. S) (j) |
|
125,000 |
120,066 |
|
TOTAL INDIA |
444,890 |
|||
Ireland - 0.5% |
||||
Anglo Irish Bank Corp. PLC 5.223% 6/19/17 (j) |
EUR |
100,000 |
89,558 |
|
Ardagh Glass Group PLC 10.75% 3/1/15 pay-in-kind |
EUR |
289,713 |
124,254 |
|
Bank of Ireland UK Holdings PLC 7.4% (j) |
EUR |
400,000 |
247,008 |
|
Irish Nationwide Building Society: |
|
|
|
|
5.089% 5/18/09 (j) |
EUR |
300,000 |
374,951 |
|
5.875% 12/15/08 |
GBP |
85,000 |
133,496 |
|
Corporate Bonds - continued |
||||
|
Principal Amount (e) |
Value |
||
Nonconvertible Bonds - continued |
||||
Ireland - continued |
||||
JSC Vneshtorgbank 7% 4/13/09 (Issued by Dali Capital PLC for JSC Vneshtorgbank) |
RUB |
$ 7,000,000 |
$ 238,016 |
|
ROSBANK (OJSC JSCB) 8% 9/30/09 (Issued by Dali Capital PLC for ROSBANK (OJSC JSCB)) |
RUB |
3,800,000 |
73,031 |
|
TransCapitalInvest Ltd. 5.67% 3/5/14 (Reg. S) |
|
400,000 |
266,844 |
|
VTB24 Capital PLC 3.635% 12/7/09 (j) |
|
270,000 |
207,252 |
|
TOTAL IRELAND |
1,754,410 |
|||
Italy - 0.3% |
||||
Banca Italease SpA 5.168% 2/2/10 (j) |
EUR |
400,000 |
438,222 |
|
Banca Popolare di Milano 9% (j) |
EUR |
200,000 |
196,418 |
|
IFIL Finanziaria di Partecipazioni SpA 5.375% 6/12/17 |
EUR |
150,000 |
152,774 |
|
Intesa Sanpaolo SpA 6.375% 11/12/17 (j) |
GBP |
150,000 |
235,034 |
|
TOTAL ITALY |
1,022,448 |
|||
Kazakhstan - 0.0% |
||||
ATF Bank JSC 8.875% 11/9/09 |
|
200,000 |
157,234 |
|
Korea (South) - 0.1% |
||||
GS Caltex Corp. 5.5% 4/24/17 (Reg. S) |
|
300,000 |
237,105 |
|
Hyundai Capital Services, Inc. 5.625% 1/24/12 |
|
200,000 |
183,302 |
|
TOTAL KOREA (SOUTH) |
420,407 |
|||
Luxembourg - 0.5% |
||||
Fiat Finance & Trade Ltd. 5.625% 11/15/11 |
EUR |
100,000 |
89,737 |
|
Gaz Capital SA (Luxembourg): |
|
|
|
|
6.58% 10/31/13 |
GBP |
100,000 |
95,490 |
|
7.51% 7/31/13 (Reg S.) |
|
200,000 |
144,000 |
|
Glencore Finance (Europe) SA 6.5% 2/27/19 |
GBP |
200,000 |
158,019 |
|
ICB OJSC 6.2% 9/29/15 (Issued by Or-ICB for ICB OJSC) (j) |
|
500,000 |
320,000 |
|
Lux-Development SA 6.1% 10/31/16 (f) |
EUR |
200,000 |
263,386 |
|
Russian Standard Finance SA 6.825% 9/16/09 |
EUR |
150,000 |
141,448 |
|
Slavinvestbank LLC 9.875% 12/21/09 (Issued by Slavinvest Finance SA for Slavinvestbank LLC) |
|
210,000 |
183,884 |
|
TNK-BP Finance SA 7.5% 7/18/16 |
|
250,000 |
127,500 |
|
VTB Capital SA 4.4913% 11/2/09 (j) |
|
175,000 |
144,375 |
|
TOTAL LUXEMBOURG |
1,667,839 |
|||
Malaysia - 0.1% |
||||
IOI Ventures (L) Bhd 5.25% 3/16/15 |
|
300,000 |
277,779 |
|
Corporate Bonds - continued |
||||
|
Principal Amount (e) |
Value |
||
Nonconvertible Bonds - continued |
||||
Netherlands - 0.5% |
||||
ALB Finance BV 8.75% 4/20/11 |
|
$ 100,000 |
$ 31,433 |
|
ASML Holding NV 5.75% 6/13/17 |
EUR |
250,000 |
250,395 |
|
Asset Repackaging Trust Five BV 12.59% 12/21/11 pay-in-kind (j) |
EUR |
120,385 |
61,375 |
|
BOATS Investments (Netherlands) BV 11% 3/31/17 pay-in-kind |
EUR |
305,745 |
162,000 |
|
CenterCredit International BV 8.625% 1/30/14 (Reg. S) |
|
100,000 |
48,350 |
|
Eureko BV 5.125% (j) |
EUR |
200,000 |
145,762 |
|
Fortis Bank (Nederland) NV 4.625% (j) |
EUR |
150,000 |
105,150 |
|
ING Bank NV 5.0688% 10/14/14 (j) |
|
175,000 |
166,491 |
|
Intergas Finance BV 6.375% 5/14/17 (Reg. S) |
|
300,000 |
180,000 |
|
Invitel Holdings NN 13.568% 4/15/13 (Reg. S) (j) |
EUR |
220,469 |
141,615 |
|
Media Nusantara Citra BV 10.75% 9/12/11 |
|
148,958 |
113,118 |
|
Siemens Financieringsmaatschappij NV 6.125% 9/14/66 (j) |
GBP |
150,000 |
159,306 |
|
TuranAlem Finance BV 6.25% 9/27/11 |
EUR |
250,000 |
150,798 |
|
TOTAL NETHERLANDS |
1,715,793 |
|||
Norway - 0.7% |
||||
Africa Offshore Services AS 9.7688% 6/29/12 (h)(j) |
|
100,000 |
60,000 |
|
DDI Holding AS: |
|
|
|
|
7.8344% 3/15/12 (h)(j) |
|
100,000 |
69,250 |
|
9.3% 1/19/12 (k) |
|
89,201 |
53,521 |
|
Kommunalbanken AS 5.125% 5/30/12 |
|
1,900,000 |
2,007,103 |
|
Petrojack AS 11% 4/19/10 |
NOK |
1,000,000 |
103,930 |
|
Petrolia Drilling ASA 12% 6/20/12 (h) |
NOK |
500,000 |
22,271 |
|
Petromena AS 10.85% 11/19/10 (h) |
|
100,000 |
65,000 |
|
ProdJack AS: |
|
|
|
|
11.25% 2/22/13 (h) |
|
100,000 |
55,000 |
|
11.25% 3/8/13 (h) |
|
100,000 |
55,000 |
|
Sevan Marine ASA 5.8044% 5/14/13 (h)(j) |
|
100,000 |
60,000 |
|
TOTAL NORWAY |
2,551,075 |
|||
Russia - 0.1% |
||||
Bank St. Petersburg 9.501% 11/25/09 (Issued by BSPB Finance PLC for Bank St. Petersburg) |
|
250,000 |
196,120 |
|
Raspadskaya Securities Ltd. 7.5% 5/22/12 |
|
200,000 |
112,922 |
|
TOTAL RUSSIA |
309,042 |
|||
Spain - 0.2% |
||||
Bancaja Emisiones SA 4.625% (j) |
EUR |
239,000 |
98,294 |
|
Corporate Bonds - continued |
||||
|
Principal Amount (e) |
Value |
||
Nonconvertible Bonds - continued |
||||
Spain - continued |
||||
Corporacion Mapfre SA 5.921% 7/24/37 (j) |
EUR |
$ 250,000 |
$ 218,034 |
|
Santander Issuances SA Unipersonal 5.296% 7/25/17 (j) |
EUR |
150,000 |
161,673 |
|
Telefonica Emisiones SAU 5.888% 1/31/14 |
GBP |
100,000 |
147,118 |
|
TOTAL SPAIN |
625,119 |
|||
Sweden - 0.1% |
||||
Svenska Handelsbanken AB 2.9688% 3/15/16 (j) |
|
200,000 |
182,690 |
|
Switzerland - 0.0% |
||||
UBS AG London Branch 6.625% 4/11/18 |
GBP |
100,000 |
156,854 |
|
United Arab Emirates - 0.1% |
||||
Emirates Bank International PJSC 3.415% 12/7/16 (j) |
|
300,000 |
224,634 |
|
United Kingdom - 1.6% |
||||
Alliance & Leicester PLC 4.25% 12/30/08 |
GBP |
170,000 |
270,251 |
|
Bank of Scotland 6.375% 8/16/19 |
GBP |
400,000 |
508,150 |
|
Barclays Bank PLC 6.75% 1/16/23 (j) |
GBP |
300,000 |
427,727 |
|
Broadgate PLC 7.0775% 10/5/25 (j) |
GBP |
38,750 |
43,118 |
|
Cattles PLC 7.125% 7/5/17 |
GBP |
100,000 |
76,005 |
|
Centrica PLC 7% 9/19/33 |
GBP |
200,000 |
299,189 |
|
EFG Hellas Funding Ltd. 4.565% (j) |
EUR |
200,000 |
134,159 |
|
Getin Finance PLC 6.967% 5/13/09 (j) |
EUR |
100,000 |
119,761 |
|
HBOS PLC 3.0731% 2/6/14 (j) |
|
200,000 |
186,440 |
|
ICICI Bank UK PLC 3.43% 2/27/12 (j) |
|
125,000 |
68,589 |
|
Imperial Tobacco Finance 7.25% 9/15/14 |
EUR |
150,000 |
186,086 |
|
Lloyds TSB Bank PLC 4.385% (j) |
EUR |
200,000 |
163,004 |
|
Lloyds TSB Group PLC 6.267% (h)(j) |
|
200,000 |
90,750 |
|
Nationwide Building Society 3.375% 8/17/15 (j) |
EUR |
455,000 |
506,154 |
|
Northern Rock PLC 4.5188% 10/21/10 (j) |
|
250,000 |
213,285 |
|
Novae Group PLC 8.375% 4/27/17 (j) |
GBP |
50,000 |
52,297 |
|
Old Mutual Capital Funding L.P. 8% |
|
320,000 |
166,272 |
|
Old Mutual PLC 4.5% 1/18/17 (j) |
EUR |
100,000 |
97,516 |
|
Rexam PLC 4.375% 3/15/13 |
EUR |
250,000 |
267,627 |
|
Royal Bank of Scotland PLC: |
|
|
|
|
3.8413% 7/24/14 (j) |
|
200,000 |
173,833 |
|
5.891% (j) |
EUR |
100,000 |
64,341 |
|
Scottish & Southern Energy PLC 6.25% 8/27/38 |
GBP |
150,000 |
239,364 |
|
Tesco PLC 5.875% 9/12/16 |
EUR |
300,000 |
348,640 |
|
UBS AG Jersey Branch 4.6525% 4/18/16 (j) |
|
200,000 |
161,012 |
|
UBS AG London Branch 6.25% 9/3/13 |
EUR |
100,000 |
125,299 |
|
Corporate Bonds - continued |
||||
|
Principal Amount (e) |
Value |
||
Nonconvertible Bonds - continued |
||||
United Kingdom - continued |
||||
Ukrsotsbank 8% 2/22/10 (Issued by Credit Suisse First Boston International for Ukrsotsbank) |
|
$ 300,000 |
$ 271,326 |
|
Vodafone Group PLC 3.09% 2/27/12 (j) |
|
160,000 |
128,744 |
|
TOTAL UNITED KINGDOM |
5,388,939 |
|||
United States of America - 2.5% |
||||
BA Covered Bond Issuer 4.125% 4/5/12 |
EUR |
1,700,000 |
2,110,682 |
|
Banca Popolare di Lodi Investor Trust III 6.742% (j) |
EUR |
200,000 |
178,758 |
|
Bank of America Corp. 5.125% 9/26/14 |
EUR |
250,000 |
296,393 |
|
BSP Finance BV 10.75% 11/1/11 |
|
100,000 |
55,000 |
|
Citigroup, Inc. 4.25% 2/25/30 (j) |
EUR |
200,000 |
136,400 |
|
Countrywide Home Loans, Inc. 5.414% 11/24/08 (j) |
EUR |
150,000 |
190,504 |
|
Credit Suisse First Boston New York Branch 5% 5/15/13 |
|
400,000 |
360,740 |
|
DaimlerChrysler NA Holding Corp. 3.2488% 3/13/09 (j) |
|
100,000 |
95,129 |
|
General Electric Co. 5.25% 12/6/17 |
|
200,000 |
167,410 |
|
Goldman Sachs Group, Inc.: |
|
|
|
|
5.375% 2/15/13 |
EUR |
200,000 |
223,849 |
|
6.15% 4/1/18 |
|
200,000 |
165,679 |
|
6.5% 10/6/10 |
EUR |
250,000 |
317,688 |
|
7.125% 8/7/25 |
GBP |
200,000 |
278,526 |
|
HVB Funding Trust VIII 7.055% 3/28/49 (j) |
EUR |
800,000 |
638,284 |
|
JPMorgan Chase & Co. 5.25% 5/8/13 |
EUR |
250,000 |
312,475 |
|
Lehman Brothers Holdings E-Capital Trust I 3.5888% 8/19/65 (d)(j) |
|
350,000 |
35 |
|
Merrill Lynch & Co., Inc.: |
|
|
|
|
4.625% 10/2/13 |
EUR |
550,000 |
567,926 |
|
6.15% 4/25/13 |
|
500,000 |
461,351 |
|
6.75% 5/21/13 |
EUR |
150,000 |
175,196 |
|
Morgan Stanley 5.39% 7/20/12 (j) |
EUR |
430,000 |
402,109 |
|
PPL Energy Supply LLC 6.5% 5/1/18 |
|
160,000 |
124,678 |
|
RBS Capital Trust IV 4.5619% (j) |
|
205,000 |
92,353 |
|
Schering-Plough Corp. 5.375% 10/1/14 |
EUR |
200,000 |
240,752 |
|
SLM Corp.: |
|
|
|
|
5.158% 12/15/10 (j) |
EUR |
200,000 |
175,618 |
|
5.288% 6/17/13 (j) |
EUR |
112,000 |
79,606 |
|
Corporate Bonds - continued |
||||
|
Principal Amount (e) |
Value |
||
Nonconvertible Bonds - continued |
||||
United States of America - continued |
||||
Sprint Capital Corp. 8.75% 3/15/32 |
|
$ 325,000 |
$ 212,875 |
|
WaMu Covered Bond Program 4.375% 5/19/14 |
EUR |
550,000 |
597,759 |
|
TOTAL UNITED STATES OF AMERICA |
8,657,775 |
|||
TOTAL NONCONVERTIBLE BONDS |
32,355,339 |
|||
TOTAL CORPORATE BONDS (Cost $43,793,404) |
32,559,339 |
|||
Government Obligations - 32.0% |
||||
|
||||
Canada - 0.5% |
||||
Canadian Government 5.25% 6/1/12 |
CAD |
1,750,000 |
1,579,107 |
|
France - 1.0% |
||||
French Republic 4.5% 7/12/13 |
EUR |
2,700,000 |
3,508,734 |
|
Germany - 7.9% |
||||
German Federal Republic: |
|
|
|
|
3.5% 4/12/13 |
EUR |
100,000 |
128,902 |
|
4% 7/4/16 |
EUR |
1,587,500 |
2,049,065 |
|
4.25% 1/4/14 |
EUR |
7,170,000 |
9,554,235 |
|
4.25% 7/4/17 |
EUR |
6,750,000 |
8,844,705 |
|
4.25% 7/4/18 |
EUR |
1,400,000 |
1,834,207 |
|
5.625% 1/4/28 |
EUR |
3,460,000 |
4,961,539 |
|
TOTAL GERMANY |
27,372,653 |
|||
Greece - 0.7% |
||||
Greek Government: |
|
|
|
|
4.5% 9/20/37 |
EUR |
1,150,000 |
1,228,430 |
|
4.6% 7/20/18 |
EUR |
1,100,000 |
1,306,669 |
|
TOTAL GREECE |
2,535,099 |
|||
Italy - 0.7% |
||||
Italian Republic 4.5% 3/1/19 |
EUR |
2,000,000 |
2,398,015 |
|
Japan - 16.5% |
||||
Japan Government: |
|
|
|
|
Inflation-Indexed Bond 1.1% 12/10/16 |
JPY |
1,002,622,000 |
8,678,229 |
|
0.4965% to 0.5845% 11/4/08 to 2/2/09 |
JPY |
1,240,000,000 |
12,581,105 |
|
0.9% 12/22/08 |
JPY |
150,000,000 |
1,523,281 |
|
Government Obligations - continued |
||||
|
Principal |
Value |
||
Japan - continued |
||||
Japan Government: - continued |
|
|
|
|
0.9% 6/20/13 |
JPY |
$ 110,000,000 |
$ 1,119,105 |
|
0.92% 11/20/20 (j) |
JPY |
225,000,000 |
2,081,789 |
|
1.3% 3/20/15 |
JPY |
1,040,000,000 |
10,731,267 |
|
1.4% 3/20/18 |
JPY |
25,000,000 |
253,782 |
|
1.5% 3/20/14 |
JPY |
400,000,000 |
4,185,230 |
|
1.9% 6/20/16 |
JPY |
935,000,000 |
10,011,803 |
|
2.5% 9/20/36 |
JPY |
350,000,000 |
3,728,513 |
|
2.5% 9/20/37 |
JPY |
200,000,000 |
2,136,568 |
|
TOTAL JAPAN |
57,030,672 |
|||
Poland - 0.4% |
||||
Polish Government 5.625% 6/20/18 |
EUR |
1,100,000 |
1,278,825 |
|
United Kingdom - 0.8% |
||||
UK Treasury GILT: |
|
|
|
|
4.75% 12/7/38 |
GBP |
505,000 |
844,963 |
|
5% 3/7/18 |
GBP |
1,080,000 |
1,801,662 |
|
TOTAL UNITED KINGDOM |
2,646,625 |
|||
United States of America - 3.5% |
||||
Federal Home Loan Bank 3.625% 10/18/13 |
|
300,000 |
289,366 |
|
U.S. Treasury Bonds 5% 5/15/37 |
|
265,000 |
291,873 |
|
U.S. Treasury Inflation-Indexed Notes 1.625% 1/15/15 |
|
5,163,840 |
4,518,379 |
|
U.S. Treasury Notes: |
|
|
|
|
3.5% 2/15/18 |
|
40,000 |
38,909 |
|
4% 8/15/18 |
|
3,000,000 |
3,003,984 |
|
5.125% 5/15/16 |
|
3,605,000 |
3,907,762 |
|
TOTAL UNITED STATES OF AMERICA |
12,050,273 |
|||
TOTAL GOVERNMENT OBLIGATIONS (Cost $111,918,384) |
110,400,003 |
|||
U.S. Government Agency - Mortgage Securities - 1.5% |
||||
|
||||
Fannie Mae - 1.5% |
||||
5.5% 11/1/38 (i) |
|
3,000,000 |
2,931,556 |
|
6% 11/1/38 (i) |
|
2,250,000 |
2,249,582 |
|
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $5,203,242) |
5,181,138 |
|||
Asset-Backed Securities - 0.4% |
||||
|
Principal Amount (e) |
Value |
||
Clock Finance BV Series 2007-1 Class B2, 5.134% 2/25/15 (j) |
EUR |
$ 100,000 |
$ 107,814 |
|
Leek Finance PLC Series 2005-15X Class BA, 6.35% 3/21/37 (j) |
GBP |
100,000 |
112,641 |
|
Mermaid Secured Finance Ltd. Series 2007-1: |
|
|
|
|
Class C, 5.16% 1/30/40 (j) |
EUR |
50,000 |
59,904 |
|
Class D, 5.36% 1/30/40 (j) |
EUR |
100,000 |
117,259 |
|
Prime Bricks Series 2007-1: |
|
|
|
|
Class B, 5.16% 1/30/40 (j) |
EUR |
50,000 |
59,929 |
|
Class C, 5.36% 1/30/40 (j) |
EUR |
50,000 |
58,629 |
|
Promise K 2006-1 GmbH Series I 2006-1 Class D, 5.629% 3/10/17 (j) |
EUR |
100,000 |
102,843 |
|
Provide Bricks Series 2007-1 Class B, 5.22% 1/30/40 (j) |
EUR |
200,000 |
237,602 |
|
TS Co.mit One GmbH Series 1 Class C, 5.419% 6/29/13 (Reg. S) (j) |
EUR |
78,654 |
93,762 |
|
Volkswagen Car Lease Series 9 Class B, 4.911% 10/21/13 (j) |
EUR |
250,000 |
295,627 |
|
Whinstone Capital Management Ltd. Series 2005-1X Class B1, 6.8538% 10/25/45 (j) |
GBP |
70,098 |
63,697 |
|
TOTAL ASSET-BACKED SECURITIES (Cost $1,653,169) |
1,309,707 |
|||
Collateralized Mortgage Obligations - 0.2% |
||||
|
||||
Private Sponsor - 0.2% |
||||
Arkle Master Issuer PLC: |
|
|
|
|
floater Series 2006-1X Class 5M1, 5.234% 2/17/52 (j) |
EUR |
100,000 |
100,622 |
|
Series 2006-1X Class 2C, 5.314% 2/17/52 (j) |
EUR |
75,000 |
94,922 |
|
Arran Residential Mortgages Funding No. 1 PLC Series 2006-1X Class CC, 5.611% 4/12/56 (j) |
EUR |
94,905 |
107,340 |
|
Holmes Master Issuer PLC floater Series 2007-1 Class 3C2, 5.738% 7/15/40 (j) |
EUR |
150,000 |
133,168 |
|
Permanent Master Issuer PLC floater Series 2006-1 Class 2C, 5.1525% 7/17/42 (j) |
|
400,000 |
335,212 |
|
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $968,578) |
771,264 |
|||
Commercial Mortgage Securities - 0.3% |
||||
|
Principal Amount (e) |
Value |
||
France - 0.0% |
||||
Paris Prime Community Real Estate Series 2006-1 Class B, 5.25% 4/22/14 (h)(j) |
EUR |
$ 72,109 |
$ 82,753 |
|
Ireland - 0.1% |
||||
European Property Capital Series 4 Class C, 6.3963% 7/20/14 (j) |
GBP |
41,701 |
60,644 |
|
German Residential Asset Note Distributor PLC Series 1 Class A, 5.33% 7/20/16 (j) |
EUR |
177,244 |
203,355 |
|
Rivoli Pan Europe PLC Series 2006-1 Class B 5.248% 8/3/18 (j) |
EUR |
100,000 |
110,784 |
|
TOTAL IRELAND |
374,783 |
|||
Japan - 0.0% |
||||
JLOC 37 LLC (Reg. S) Series X Class B1, 1.4575% 1/15/15 (j) |
JPY |
13,502,000 |
133,972 |
|
Netherlands - 0.0% |
||||
Skyline BV Series 2007-1 Class D, 5.81% 7/22/43 (j) |
EUR |
100,000 |
63,728 |
|
United Kingdom - 0.2% |
||||
Canary Wharf Finance II PLC Series 3MUK Class C2, 6.555% 10/22/37 (j) |
GBP |
150,000 |
168,961 |
|
Eddystone Finance PLC Series 2006-1: |
|
|
|
|
Class B, 6.4963% 4/19/21 (j) |
GBP |
100,000 |
120,899 |
|
Class C, 6.6963% 4/19/21 (j) |
GBP |
50,000 |
55,939 |
|
London & Regional Debt Securitisation No. 1 PLC Class A, 6.42% 10/15/14 (j) |
GBP |
100,000 |
136,799 |
|
TOTAL UNITED KINGDOM |
482,598 |
|||
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $1,488,439) |
1,137,834 |
|||
Supranational Obligations - 0.4% |
||||
|
||||
European Investment Bank 5.625% 6/7/32 |
GBP |
800,000 |
1,379,595 |
|
Certificates of Deposit - 0.0% |
||||
|
||||
Norway - 0.0% |
||||
MPU-Multi Purpose Unit-Offshore Lift ASA 16.1% 7/23/08 (d) |
NOK |
1,500,000 |
4,454 |
Preferred Securities - 0.2% |
|||
Principal Amount (e) |
Value |
||
Cayman Islands - 0.0% |
|||
MUFG Capital Finance 2 Ltd. 4.85% (j) |
150,000 |
$ 118,493 |
|
Germany - 0.1% |
|||
BayernLB Capital Trust I 6.2032% (j) |
650,000 |
313,970 |
|
Luxembourg - 0.1% |
|||
Glencore Finance (Europe) SA 8% |
450,000 |
207,885 |
|
TOTAL PREFERRED SECURITIES (Cost $1,155,167) |
640,348 |
||
Money Market Funds - 7.8% |
|||
Shares |
|
||
Fidelity Cash Central Fund, 1.81% (b) |
25,685,206 |
25,685,206 |
|
Fidelity Securities Lending Cash Central Fund, 2.67% (b)(c) |
1,347,485 |
1,347,485 |
|
TOTAL MONEY MARKET FUNDS (Cost $27,032,691) |
27,032,691 |
||
Cash Equivalents - 0.0% |
|||
Maturity Amount |
|
||
Investments in repurchase agreements in a joint trading account at 0.14%, dated 10/31/08 due
11/3/08 (Collateralized by U.S. Treasury Obligations) # |
$ 44,001 |
44,000 |
|
TOTAL INVESTMENT PORTFOLIO - 103.9% (Cost $406,297,344) |
358,838,512 |
||
NET OTHER ASSETS - (3.9)% |
(13,559,366) |
||
NET ASSETS - 100% |
$ 345,279,146 |
Currency Abbreviations |
||
CAD |
- |
Canadian dollar |
EUR |
- |
European Monetary Unit |
GBP |
- |
British pound |
JPY |
- |
Japanese yen |
NOK |
- |
Norwegian krone |
RUB |
- |
Russian ruble |
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) Non-income producing - Issuer is in default. |
(e) Principal amount is stated in United States dollars unless otherwise noted. |
(f) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. |
(g) Security or a portion of the security is on loan at period end. |
(h) 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 $1,403,924 or 0.4% of net assets. |
(i) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(j) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(k) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $53,521 or 0.0% of net assets. |
Additional information on each holding is as follows: |
Security |
Acquisition Date |
Acquisition Cost |
DDI Holding AS 9.3% 1/19/12 |
3/22/07 |
$ 92,212 |
# Additional Information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty |
Value |
$44,000 due 11/03/08 at 0.14% |
|
BNP Paribas Securities Corp. |
$ 2,965 |
Banc of America Securities LLC |
5,929 |
Barclays Capital, Inc. |
5,929 |
Deutsche Bank Securities, Inc. |
15,416 |
Morgan Stanley & Co., Inc. |
421 |
UBS Securities LLC |
13,340 |
|
$ 44,000 |
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 |
$ 714,134 |
Fidelity Securities Lending Cash Central Fund |
38,819 |
Total |
$ 752,953 |
Other Information |
The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and U.S. Government Agency Obligations |
5.0% |
AAA,AA,A |
31.6% |
BBB |
2.4% |
BB |
0.5% |
B |
0.1% |
CCC,CC,C |
0.0% |
Not Rated |
1.1% |
Equities |
51.7% |
Short-Term Investments and Net Other Assets |
7.6% |
|
100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. |
Income Tax Information |
At October 31, 2008, the fund had a capital loss carryforward of approximately $38,189,912 all of which will expire on October 31, 2016. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
|
October 31, 2008 |
|
|
|
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $1,307,496 and repurchase agreements of $44,000) - See accompanying schedule: Unaffiliated issuers (cost $379,264,653) |
$ 331,805,821 |
|
Fidelity Central Funds (cost $27,032,691) |
27,032,691 |
|
Total Investments (cost $406,297,344) |
|
$ 358,838,512 |
Cash |
|
1,019 |
Foreign currency held at value (cost $50,529) |
|
49,944 |
Receivable for investments sold |
|
8,389,531 |
Delayed delivery |
|
4,589,906 |
Receivable for fund shares sold |
|
621,618 |
Dividends receivable |
|
447,363 |
Interest receivable |
|
2,010,171 |
Distributions receivable from Fidelity Central Funds |
|
37,722 |
Prepaid expenses |
|
90 |
Other receivables |
|
22,312 |
Total assets |
|
375,008,188 |
|
|
|
Liabilities |
|
|
Payable for investments purchased |
$ 17,474,023 |
|
Delayed delivery |
9,827,055 |
|
Payable for fund shares redeemed |
605,122 |
|
Accrued management fee |
208,902 |
|
Other affiliated payables |
97,707 |
|
Other payables and accrued expenses |
168,748 |
|
Collateral on securities loaned, at value |
1,347,485 |
|
Total liabilities |
|
29,729,042 |
|
|
|
Net Assets |
|
$ 345,279,146 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 428,891,088 |
Undistributed net investment income |
|
6,726,768 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(42,616,405) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
(47,722,305) |
Net Assets, for 20,378,899 shares outstanding |
|
$ 345,279,146 |
Net Asset Value, offering price and redemption price per share ($345,279,146 ÷ 20,378,899 shares) |
|
$ 16.94 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
|
Year ended October 31, 2008 |
|
|
|
|
Investment Income |
|
|
Dividends |
|
$ 5,223,320 |
Interest |
|
6,448,032 |
Income from Fidelity Central Funds |
|
752,953 |
|
|
12,424,305 |
Less foreign taxes withheld |
|
(296,667) |
Total income |
|
12,127,638 |
|
|
|
Expenses |
|
|
Management fee |
$ 2,866,364 |
|
Transfer agent fees |
933,023 |
|
Accounting and security lending fees |
210,303 |
|
Custodian fees and expenses |
420,473 |
|
Independent trustees' compensation |
1,576 |
|
Registration fees |
51,814 |
|
Audit |
92,134 |
|
Legal |
2,005 |
|
Miscellaneous |
6,556 |
|
Total expenses before reductions |
4,584,248 |
|
Expense reductions |
(75,509) |
4,508,739 |
Net investment income (loss) |
|
7,618,899 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities: |
|
|
Unaffiliated issuers (net of foreign taxes of $(957)) |
(42,039,377) |
|
Foreign currency transactions |
132,311 |
|
Total net realized gain (loss) |
|
(41,907,066) |
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $2,855) |
(91,265,722) |
|
Assets and liabilities in foreign currencies |
(344,717) |
|
Total change in net unrealized appreciation (depreciation) |
|
(91,610,439) |
Net gain (loss) |
|
(133,517,505) |
Net increase (decrease) in net assets resulting from operations |
|
$ (125,898,606) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
|
Year ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 7,618,899 |
$ 4,830,566 |
Net realized gain (loss) |
(41,907,066) |
32,398,007 |
Change in net unrealized appreciation (depreciation) |
(91,610,439) |
24,988,350 |
Net increase (decrease) in net assets resulting |
(125,898,606) |
62,216,923 |
Distributions to shareholders from net investment income |
(5,015,376) |
(2,296,243) |
Distributions to shareholders from net realized gain |
(27,812,540) |
(24,110,533) |
Total distributions |
(32,827,916) |
(26,406,776) |
Share transactions |
263,385,231 |
157,223,429 |
Reinvestment of distributions |
31,418,376 |
25,322,315 |
Cost of shares redeemed |
(162,108,177) |
(107,252,455) |
Net increase (decrease) in net assets resulting from share transactions |
132,695,430 |
75,293,289 |
Redemption fees |
48,708 |
14,161 |
Total increase (decrease) in net assets |
(25,982,384) |
111,117,597 |
|
|
|
Net Assets |
|
|
Beginning of period |
371,261,530 |
260,143,933 |
End of period (including undistributed net investment income of $6,726,768 and undistributed net investment income of $4,821,537, respectively) |
$ 345,279,146 |
$ 371,261,530 |
Other Information Shares |
|
|
Sold |
12,310,512 |
6,881,716 |
Issued in reinvestment of distributions |
1,384,069 |
1,178,330 |
Redeemed |
(7,932,619) |
(4,712,119) |
Net increase (decrease) |
5,761,962 |
3,347,927 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
|
|
|
|
|
|
Years ended October 31, |
2008 |
2007 |
2006 |
2005 |
2004 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period |
$ 25.40 |
$ 23.08 |
$ 21.95 |
$ 19.69 |
$ 18.06 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) B |
.40 |
.35 |
.28 |
.17 E |
.10 F |
Net realized and unrealized gain (loss) |
(6.70) |
4.27 |
2.66 |
2.54 |
1.85 |
Total from investment operations |
(6.30) |
4.62 |
2.94 |
2.71 |
1.95 |
Distributions from net investment income |
(.33) |
(.20) |
(.14) |
(.13) |
(.32) |
Distributions from net realized gain |
(1.83) |
(2.10) |
(1.67) |
(.32) |
- |
Total distributions |
(2.16) |
(2.30) |
(1.81) |
(.45) |
(.32) |
Redemption fees added to paid in capitalB |
- H |
-H |
-H |
-H |
-H |
Net asset value, end of period |
$ 16.94 |
$ 25.40 |
$ 23.08 |
$ 21.95 |
$ 19.69 |
Total ReturnA |
(26.96)% |
21.83% |
14.23% |
13.92% |
10.93% |
Ratios to Average Net AssetsC, G |
|
|
|
|
|
Expenses before reductions |
1.13% |
1.14% |
1.18% |
1.17% |
1.20% |
Expenses net of fee waivers, if any |
1.13% |
1.14% |
1.18% |
1.17% |
1.20% |
Expenses net of all reductions |
1.11% |
1.12% |
1.14% |
1.15% |
1.19% |
Net investment income (loss) |
1.88% |
1.55% |
1.27% |
.80% E |
.54% F |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) |
$ 345,279 |
$ 371,262 |
$ 260,144 |
$ 191,247 |
$ 137,619 |
Portfolio turnover rateD |
264% |
169% |
208% |
95% |
94% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Calculated based on average shares outstanding during the period.
C 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.
D Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
E 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 .66%.
F Net investment income per share includes approximately $.05 per share received as a result of a reorganization of an issuer that was in bankruptcy. Excluding this non-recurring amount, the ratio of net investment income(loss) to average net assets would have been .26%
G Expense 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.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
For the period ended October 31, 2008
1. Organization.
Fidelity Global Balanced Fund (the Fund) is a fund of Fidelity Charles 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.
On November 20, 2008, the Board of Trustees approved the creation of additional classes of shares. The Fund will commence sale of shares of Class A, Class T, Class B, Class C and Institutional Class and the existing class will be designated Global Balanced on or about January 28, 2009.
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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, 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
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
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.
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
Annual Report
3. Significant Accounting Policies - continued
Investment Transactions and Income - continued
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. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
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. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service (IRS). 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
Annual Report
Notes to Financial Statements - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
generally accepted accounting principles. In addition, the Fund will claim 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, passive foreign investment companies (PFIC), market discount, partnerships, deferred trustees compensation, and losses deferred due to wash sales.
The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows:
Unrealized appreciation |
$ 11,130,446 |
Unrealized depreciation |
(66,511,719) |
Net unrealized appreciation (depreciation) |
(55,381,273) |
Undistributed ordinary income |
9,869,178 |
|
|
Capital loss carryforward |
(38,189,912) |
|
|
Cost for federal income tax purposes |
$ 414,219,785 |
The tax character of distributions paid was as follows:
|
October 31, 2008 |
October 31, 2007 |
Ordinary Income |
$ 16,413,958 |
$ 8,496,094 |
Long-term Capital Gains |
16,413,958 |
17,910,682 |
Total |
$ 32,827,916 |
$ 26,406,776 |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to 1.00% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
New Accounting Pronouncement. In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and results in expanded disclosures about fair value measurements.
Annual Report
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.
Delayed Delivery Transactions and When-Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
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.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $1,018,108,564 and $927,778,231, respectively.
Annual Report
Notes to Financial Statements - continued
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 .45% 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 annual management fee rate was .71% 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. Prior to January 1, 2008, Fidelity Service Company, Inc. (FSC), also an affiliate of FMR, was the Fund's transfer agent. For the period the transfer agent fees were equivalent to an annual rate of .23% of average net assets.
Accounting and Security Lending Fees. FSC 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 $12,887 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 $792 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Annual Report
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 $38,819.
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 $65,975 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 $2,064 and $7,470 respectively.
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.
In December 2006, the Independent Trustees, with the assistance of independent counsel, completed an investigation regarding gifts, gratuities and business entertainment provided by certain brokers to certain individuals who were employed on FMR's
Annual Report
Notes to Financial Statements - continued
10. Other - continued
domestic equity trading desk during the period 2002 to 2004. The Independent Trustees and FMR agreed that, despite the absence of proof that the Fidelity mutual funds experienced diminished execution quality as a result of the improper receipt of gifts and business entertainment, the conduct at issue was serious and was worthy of redress. Accordingly, the Independent Trustees requested, and FMR agreed to make, a payment of $42 million plus accrued interest, which equaled approximately $7.3 million, to certain Fidelity mutual funds.
In March 2008, the Trustees approved a method for allocating this payment among the funds and, in total, FMR paid the fund $9,378, which is recorded in the accompanying Statement of Operations.
In a related administrative order dated March 5, 2008, the U.S. Securities and Exchange Commission ("SEC") announced a settlement with FMR and FMR Co., Inc. (an affiliate of FMR) involving the SEC's regulatory rules for investment advisers and the improper receipt of gifts, gratuities and business entertainment. Without admitting or denying the SEC's findings, FMR agreed to pay an $8 million civil penalty to the United States Treasury.
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 process of initiating claims for damages. FMR believes that the financial impact to the Fund relating to the terminated trades and agreements is immaterial.
Annual Report
To the Trustees of Fidelity Charles Street Trust and the Shareholders of Fidelity Global Balanced Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Global Balanced Fund (a fund of Fidelity Charles Street Trust) at October 31, 2008, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Global Balanced Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 19, 2008
Annual Report
The Trustees, Member of the Advisory Board, and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for Edward C. Johnson 3d and James C. Curvey, each of the Trustees oversees 159 funds advised by FMR or an affiliate. Messrs. Johnson and Curvey oversee 379 funds advised by FMR or an affiliate.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) (Independent Trustee), shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. The executive officers and Advisory Board Member hold office without limit in time, except that any officer and Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Interested Trustees*:
Correspondence intended for each Trustee who is an interested person may be sent to Fidelity Investments, 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
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Edward C. Johnson 3d (78) |
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Year of Election or Appointment: 1981 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as Chief Executive Officer, Chairman, and a Director of FMR LLC; Chairman and a Director of FMR; Chairman and a Director of Fidelity Research & Analysis Company (FRAC); Chairman and a Director of Fidelity Investments Money Management, Inc.; and Chairman and a Director of FMR Co., Inc. In addition, Mr. Johnson serves as Chairman and Director of FIL Limited. Previously, Mr. Johnson served as President of FMR LLC (2006-2007). Mr. Edward C. Johnson 3d and Mr. Arthur E. Johnson are not related. |
James C. Curvey (73) |
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Year of Election or Appointment: 2007 Mr. Curvey also serves as Trustee (2007-present) of other investment companies advised by FMR. Mr. Curvey is a Director of FMR and FMR Co., Inc. (2007-present). Mr. Curvey is also Vice Chairman (2006-present) and Director of FMR LLC. In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the Trustees of Villanova University. |
* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR. FMR Corp. merged with and into FMR LLC on October 1, 2007. Any references to FMR LLC for prior periods are deemed to be references to the prior entity.
Independent Trustees:
Correspondence intended for each Independent Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Age; Principal Occupation |
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Albert R. Gamper, Jr. (66) |
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Year of Election or Appointment:2006 Prior to his retirement in December 2004, Mr. Gamper served as Chairman of the Board of CIT Group Inc. (commercial finance). During his tenure with CIT Group Inc. Mr. Gamper served in numerous senior management positions, including Chairman (1987-1989; 1999-2001; 2002-2004), Chief Executive Officer (1987-2004), and President (1989-2002). He currently serves as a member of the Board of Directors of Public Service Enterprise Group (utilities), a member of the Board of Governors, Rutgers University (2004-present), and Chairman of the Board of Saint Barnabas Health Care System. Previously, Mr. Gamper served as Chairman of the Board of Governors, Rutgers University (2004-2007). |
George H. Heilmeier (72) |
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Year of Election or Appointment: 2004 Dr. Heilmeier is Chairman Emeritus of Telcordia Technologies (communication software and systems), where prior to his retirement, he served as company Chairman and Chief Executive Officer. He currently serves on the Boards of Directors of The Mitre Corporation (systems engineering and information technology support for the government), and HRL Laboratories (private research and development, 2004-present). He is Chairman of the General Motors Science & Technology Advisory Board and a Life Fellow of the Institute of Electrical and Electronics Engineers (IEEE). Dr. Heilmeier is a member of the Defense Science Board and the National Security Agency Advisory Board. He is also a member of the National Academy of Engineering, the American Academy of Arts and Sciences, and the Board of Overseers of the School of Engineering and Applied Science of the University of Pennsylvania. Previously, Dr. Heilmeier served as a Director of TRW Inc. (automotive, space, defense, and information technology), Compaq, Automatic Data Processing, Inc. (ADP) (technology-based business outsourcing), INET Technologies Inc. (telecommunications network surveillance, 2001-2004), and Teletech Holdings (customer management services). He is the recipient of the 2005 Kyoto Prize in Advanced Technology for his invention of the liquid crystal display, and a member of the Consumer Electronics Hall of Fame. |
Arthur E. Johnson (61) |
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Year of Election or Appointment: 2008 Mr. Johnson serves as Senior Vice President of Corporate Strategic Development of Lockheed Martin Corporation (defense contractor). In addition, Mr. Johnson serves as a member of the Board of Directors of AGL Resources, Inc. (holding company), and IKON Office Solutions, Inc. (document management systems and services). Mr. Arthur E. Johnson and Mr. Edward C. Johnson 3d are not related. |
James H. Keyes (68) |
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Year of Election or Appointment: 2007 Prior to his retirement in 2003, Mr. Keyes was Chairman, President, and Chief Executive Officer of Johnson Controls, Inc. (automotive supplier, 1993-2003). He currently serves as a member of the boards of Navistar International Corporation (manufacture and sale of trucks, buses, and diesel engines) and Pitney Bowes, Inc. (integrated mail, messaging, and document management solutions). Previously, Mr. Keyes served as a member of the Board of LSI Logic Corporation (semiconductor technologies, 1984-2008). |
Marie L. Knowles (62) |
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Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. She currently serves as a Director of McKesson Corporation (healthcare service). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. Previously, Ms. Knowles served as a Director of Phelps Dodge Corporation (copper mining and manufacturing, 1994-2007). |
Kenneth L. Wolfe (69) |
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Year of Election or Appointment: 2005 Mr. Wolfe is Chairman and a Director of Hershey Foods Corporation (2007-present), where prior to his retirement in 2001, he was Chairman and Chief Executive Officer. Mr. Wolfe currently serves as a member of the board of Revlon Inc. (2004-present). Previously, Mr. Wolfe served as a member of the boards of Adelphia Communications Corporation (2003-2006) and Bausch & Lomb, Inc. (1993-2007). |
Advisory Board Member and Executive Officers**:
Correspondence intended for Mr. Kennealy may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for each executive officer may be sent to Fidelity Investments, 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
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Michael E. Kenneally (54) |
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Year of Election or Appointment: 2008 Member of the Advisory Board of Fidelity's Fixed Income and Asset Allocation Funds. Previously, Mr. Kenneally served as Chairman and Global Chief Executive Officer of Credit Suisse Asset Management (2003-2005). Mr. Kenneally was a Director of The Credit Suisse Funds (U.S. Mutual Fund, 2004-2008) and was awarded the Chartered Financial Analyst (CFA) designation in 1991. |
John R. Hebble (50) |
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Year of Election or Appointment: 2008 President and Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Hebble is an employee of Fidelity Investments (2003-present). Before joining Fidelity Investments, Mr. Hebble worked at Deutsche Asset Management where he served as Director of Fund Accounting (2002-2003) and Assistant Treasurer of the Scudder Funds. |
Ren Y. Cheng (51) |
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Year of Election or Appointment: 2007 Vice President of Asset Allocation Funds. Mr. Cheng also serves as Group Chief Investment Officer, Asset Allocation of FMR. Previously, Mr. Cheng served as a portfolio manager for the Fidelity Freedom Funds. |
Boyce I. Greer (52) |
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Year of Election or Appointment: 2005 or 2006 Vice President of Fidelity's Fixed Income (2006) and Asset Allocation (2005) Funds. Mr. Greer is also a Trustee of other investment companies advised by FMR (2003-present). Mr. Greer is President and a Director of Fidelity Investments Money Management, Inc. (2007-present), and an Executive Vice President of FMR and FMR Co., Inc. (2005-present). Previously, Mr. Greer served as a Director and Managing Director of Strategic Advisers, Inc. (2002-2005). |
Scott C. Goebel (40) |
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Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of Fidelity funds. Mr. Goebel also serves as General Counsel, Secretary, and Senior Vice President of FMR (2008-present); Deputy General Counsel of FMR LLC; Chief Legal Secretary (2008-present) of Fidelity Management & Research (Hong Kong) Limited and Assistant Secretary of Fidelity Management & Research (Japan) Inc. (2008-present). Previously, Mr. Goebel served as Assistant Secretary of the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007). |
Nancy D. Prior (41) |
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Year of Election or Appointment: 2008 Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds. Ms. Prior is an employee of Fidelity Investments (2002-present). |
Holly C. Laurent (54) |
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Year of Election or Appointment: 2008 Anti-Money Laundering (AML) Officer of Fidelity funds. Ms. Laurent is an employee of Fidelity Investments. Previously, Ms. Laurent was Senior Vice President and Head of Legal for Fidelity Business Services India Pvt. Ltd. (2006-2008), Senior Vice President, Deputy General Counsel and Group Head for FMR LLC (2005-2006). |
Christine Reynolds (50) |
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Year of Election or Appointment: 2008 Chief Financial Officer of the Fidelity funds. Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. She served as Chief Operating Officer of FPCMS from 2007 through July 2008. Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007). Before joining Fidelity Investments, Ms. Reynolds worked at PricewaterhouseCoopers LLP (PwC) (1980-2002), where she was an audit partner with PwC's investment management practice. |
Michael H. Whitaker (41) |
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Year of Election or Appointment: 2008 Chief Compliance Officer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Whitaker is an employee of Fidelity
Investments (2007- |
Bryan A. Mehrmann (47) |
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Year of Election or Appointment: 2005 Deputy Treasurer of the Fidelity funds. Mr. Mehrmann is an employee of Fidelity Investments. Previously, Mr. Mehrmann served as Vice President of Fidelity Investments Institutional Services Group (FIIS)/Fidelity Investments Institutional Operations Corporation, Inc. (FIIOC) Client Services (1998-2004). |
Stephanie J. Dorsey (39) |
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Year of Election or Appointment: 2008 Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Income Funds. Ms. Dorsey is an employee of Fidelity
Investments (2008- |
Robert G. Byrnes (41) |
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Year of Election or Appointment: 2005 Assistant Treasurer of Fidelity funds. Mr. Byrnes is an employee of Fidelity Investments (2005-present). Previously, Mr. Byrnes served as Vice President of Fidelity Pricing and Cash Management Services (FPCMS) (2003-2005). Before joining Fidelity Investments, Mr. Byrnes worked at Deutsche Asset Management where he served as Vice President of the Investment Operations Group (2000-2003). |
Peter L. Lydecker (54) |
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Year of Election or Appointment: 2004 Assistant Treasurer of the Fidelity funds. Mr. Lydecker is an employee of Fidelity Investments. |
Paul M. Murphy (61) |
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Year of Election or Appointment: 2007 Assistant Treasurer of the Fidelity funds. Mr. Murphy is an employee of Fidelity Investments (2007-present). Previously, Mr. Murphy served as Chief Financial Officer of the Fidelity Funds (2005-2006), Vice President and Associate General Counsel of FMR (2007), and Senior Vice President of Fidelity Pricing and Cash Management Services (FPCMS) (1994-2007). |
Gary W. Ryan (50) |
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Year of Election or Appointment: 2005 Assistant Treasurer of the Fidelity funds. Mr. Ryan is an employee of Fidelity Investments. Previously, Mr. Ryan served as Vice President of Fund Reporting in Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005). |
** FMR Corp. merged with and into FMR LLC on October 1, 2007. Any references to FMR LLC for prior periods are deemed to be references to the prior entity.
Annual Report
The Board of Trustees of Fidelity Global Balanced Fund voted to pay on December 8, 2008, to shareholders of record at the opening of business on December 5, 2008, a distribution of $0.17 per share derived from capital gains realized from sales of portfolio securities and a dividend of $0.38 per share from net investment income.
A total of 5.7% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.
The fund designates 19% of the dividends distributed in December during the fiscal year as amounts which may be taken into account as a dividend for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund designates 6% of the dividends distributed during the fiscal year as qualifying for the dividends-received deduction for corporate shareholders.
The amounts per share which represent income derived from sources within, and taxes paid to, foreign countries or possessions of the United States are $0.328 and $0.0139 for the dividend paid December 7, 2007.
The fund will notify shareholders in January 2009 of amounts for use in preparing 2008 income tax returns.
Annual Report
Fidelity Global Balanced Fund
Each year, typically in June, 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 June 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.
Annual 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.
Annual 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 proprietary custom 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 proprietary custom 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 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 proprietary custom index is an index developed by FMR that represents the performance of the fund's general investment categories in both equity and bond securities.
Annual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Fidelity Global Balanced 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-year period and the second quartile for the three- and five-year periods. 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.
Annual Report
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 33% means that 67% 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 Global Balanced Fund
The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and equal to 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.
Annual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
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.
Annual 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; (vi) the funds' sub-advisory arrangements; and (vii) accounts managed by Fidelity other than the Fidelity funds.
Annual 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.
Annual 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.
Annual 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
Annual 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
FIL Investment Advisors
Fidelity Investments Japan Limited
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 & Company
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
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
GBL-UANN-1208 1.848649.101
Item 2. Code of Ethics
As of the end of the period, October 31, 2008, Fidelity Charles Street Trust (the trust) has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer and its Chief Financial Officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3. Audit Committee Financial Expert
The Board of Trustees of the trust has determined that Marie L. Knowles is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Ms. Knowles is independent for purposes of Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services
Fees and Services
The following table presents fees billed by PricewaterhouseCoopers LLP ("PwC") in each of the last two fiscal years for services rendered to Fidelity Global Balanced Fund (the "Fund"):
Services Billed by PwC
October 31, 2008 FeesA
|
Audit Fees |
Audit-Related Fees |
Tax Fees |
All Other Fees |
Fidelity Global Balanced Fund |
$72,000 |
$- |
$8,300 |
$1,800 |
October 31, 2007 FeesA
|
Audit Fees |
Audit-Related Fees |
Tax Fees |
All Other Fees |
Fidelity Global Balanced Fund |
$77,000 |
$- |
$4,800 |
$1,400 |
A Amounts may reflect rounding.
The following table presents fees billed by PwC that were required to be approved by the Audit Committee for services that relate directly to the operations and financial reporting of the Fund and that are rendered on behalf of Fidelity Management & Research Company ("FMR") and entities controlling, controlled by, or under common control with FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund ("Fund Service Providers"):
Services Billed by PwC
|
October 31, 2008A |
October 31, 2007A |
Audit-Related Fees |
$2,110,000 |
$- |
Tax Fees |
$- |
$- |
All Other Fees |
$185,000 |
$ 275,000 |
A Amounts may reflect rounding.
"Audit-Related Fees" represent fees billed for assurance and related services that are reasonably related to the performance of the fund audit or the review of the fund's financial statements and that are not reported under Audit Fees.
"Tax Fees" represent fees billed for tax compliance, tax advice or tax planning that relate directly to the operations and financial reporting of the fund.
"All Other Fees" represent fees billed for assurance services provided to the fund or Fund Service Provider that relate directly to the operations and financial reporting of the fund, excluding those services that are reported under Audit Fees, Audit-Related Fees or Tax Fees.
Assurance services must be performed by an independent public accountant.
* * *
The aggregate non-audit fees billed by PwC for services rendered to the Fund, FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any Fund Service Provider for each of the last two fiscal years of the Fund are as follows:
Billed By |
October 31, 2008 A |
October 31, 2007 A |
PwC |
$3,000,000 |
$2,005,000 |
A Amounts may reflect rounding.
The trust's Audit Committee has considered non-audit services that were not pre-approved that were provided by PwC to Fund Service Providers to be compatible with maintaining the independence of PwC in its audit of the Fund, taking into account representations from PwC, in accordance with Independence Standards Board Standard No. 1, regarding its independence from the Fund and its related entities and FMR's review of the appropriateness and permissibility under applicable law of such non-audit services prior to their provision to the Fund Service Providers.
Audit Committee Pre-Approval Policies and Procedures
The Fidelity fund's Audit Committee must pre-approve all audit and non-audit services provided by a fund's independent registered public accounting firm relating to the operations or financial reporting of the fund. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee's consideration of non-audit services by the audit firms that audit the Fidelity funds. The policies and procedures require that any non-audit service provided by a fund audit firm to a Fidelity fund and any non-audit service provided by a fund auditor to a Fund Service Provider that relates directly to the operations and financial reporting of a Fidelity fund ("Covered Service") are subject to approval by the Audit Committee before such service is provided.
All Covered Services must be approved in advance of provision of the service either: (i) by formal resolution of the Audit Committee, or (ii) by oral or written approval of the service by the Chair of the Audit Committee (or if the Chair is unavailable, such other member of the Audit Committee as may be designated by the Chair to act in the Chair's absence). The approval contemplated by (ii) above is permitted where the Treasurer determines that action on such an engagement is necessary before the next meeting of the Audit Committee.
Non-audit services provided by a fund audit firm to a Fund Service Provider that do not relate directly to the operations and financial reporting of a Fidelity fund are reported to the Audit Committee on a periodic basis.
Non-Audit Services Approved Pursuant to Rule 2-01(c)(7)(i)(C) and (ii) of Regulation S-X ("De Minimis Exception")
There were no non-audit services approved or required to be approved by the Audit Committee pursuant to the De Minimis Exception during the Fund's last two fiscal years relating to services provided to (i) the Fund or (ii) any Fund Service Provider that relate directly to the operations and financial reporting of the Fund.
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 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 trust's 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) |
Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(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 Charles Street Trust
By: |
/s/John R. Hebble |
|
John R. Hebble |
|
President and Treasurer |
|
|
Date: |
December 29, 2008 |
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/John R. Hebble |
|
John R. Hebble |
|
President and Treasurer |
|
|
Date: |
December 29, 2008 |
By: |
/s/Christine Reynolds |
|
Christine Reynolds |
|
Chief Financial Officer |
|
|
Date: |
December 29, 2008 |
Exhibit EX-99.CERT
I, John R. Hebble, certify that:
1. I have reviewed this report on Form N-CSR of Fidelity Charles 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: December 29, 2008
/s/John R. Hebble |
John R. Hebble |
President and Treasurer |
I, Christine Reynolds, certify that:
1. I have reviewed this report on Form N-CSR of Fidelity Charles 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: December 29, 2008
/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 Charles 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: December 29, 2008
/s/John R. Hebble |
John R. Hebble |
President and Treasurer |
Dated: December 29, 2008
/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.
EXHIBIT EX-99.CODE ETH
FIDELITY FUNDS' CODE OF ETHICS FOR
PRESIDENT, TREASURER AND PRINCIPAL ACCOUNTING OFFICER
I. Purposes of the Code/Covered Officers
This document constitutes the Code of Ethics ("the Code") adopted by the Fidelity Funds (the "Funds") pursuant to the provisions of Rule 30b2-1(a) under the Investment Company Act of 1940), which Rule implements Sections 406 of the Sarbanes-Oxley Act of 2002 with respect to registered investment companies. The Code applies to the Fidelity Funds' President and Treasurer, and Chief Financial Officer (the "Covered Officers"). Fidelity's Ethics Office, a part of Fidelity Enterprise Compliance within Risk Oversight, administers the Code.
The purposes of the Code are to deter wrongdoing and to promote, on the part of the Covered Officers:
II. Covered Officers Should Handle Ethically
Actual and Apparent Conflicts of Interest
Overview. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, the Fidelity Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Fidelity Funds.
Certain conflicts of interest arise out of the relationships between Covered Officers and the Fidelity Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with a Fidelity Fund because of their status as "affiliated persons" of the Fund. Separate compliance programs and procedures of the Fidelity Funds, Fidelity Management & Research Company ("FMR") and the other Fidelity companies are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Fidelity Funds and FMR (or another Fidelity company) of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Fidelity Funds, FMR or another Fidelity company), be involved in establishing policies and implementing decisions that have different effects on the Fidelity Funds, FMR and other Fidelity companies. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fidelity Funds and FMR (or another Fidelity company), and is consistent with the performance by the Covered Officers of their duties as officers of the Fidelity Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds' Board of Trustees ("Board") that the Covered Officers also may be officers or employees of one or more other Fidelity Funds covered by this Code.
Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of a Fidelity Fund.
* * *
Each Covered Officer must:
With respect to other fact patterns, if a Covered Officer is in doubt, other potential conflict of interest situations should be described immediately to the Fidelity Ethics Office for resolution. Similarly, any questions a Covered Officer has generally regarding the application or interpretation of the Code should be directed to the Fidelity Ethics Office immediately.
III. Disclosure and Compliance
IV. Reporting and Accountability
Each Covered Officer must:
The Fidelity Ethics Office shall take all action it considers appropriate to investigate any actual or potential violations reported to it. Upon completion of the investigation, if necessary, the matter will be reviewed with senior management or other appropriate parties, and a determination will be made as to whether any action should be taken as detailed below. The Covered Officer will be informed of any action determined to be appropriate. The Fidelity Ethics Office will inform the Ethics Oversight Committee of all Code violations and actions taken in response. Without implied limitation, appropriate remedial, disciplinary or preventive action may include a written warning, a letter of censure, suspension, dismissal or, in the event of criminal or other serious violations of law, notification of the SEC or other appropriate law enforcement authorities. Additionally, other legal remedies may be pursued.
The policies and procedures described in the Code do not create any obligations to any person or entity other than the Fidelity Funds. The Code is intended solely for the internal use by the Fidelity Funds and does not constitute a promise, contract or an admission by or on behalf of any Fidelity Fund as to any fact, circumstance, or legal conclusion. The Fidelity Funds, the Fidelity companies and the Fidelity Ethics Officer retain the discretion to decide whether the Code applies to a specific situation, and how it should be interpreted.
V. Oversight
Material violations of this Code will be reported promptly by FMR to the Board's Compliance Committee. In addition, at least once each year, FMR will provide a written report to the Board, which describes any issues arising under the Code since the last report to the Board, including, but not limited to, information about material violations of the Code and action taken in response to the material violations.
VI. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the Fidelity Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Other Fidelity policies or procedures that cover the behavior or activities of Covered Officers are separate requirements applying to the Covered Officers (and others), and are not part of this Code.
VII. Amendments
Any material amendments or changes to this Code must be approved or ratified by a majority vote of the Board, including a majority of the Trustees who are not interested persons of the Fidelity Funds.
VIII. Records and Confidentiality
Records of any violation of the Code and of the actions taken as a result of such violations will be kept by the Fidelity Ethics Office. All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Fidelity Ethics Office, the Ethics Oversight Committee, the Board, appropriate personnel at the relevant Fidelity company or companies and the legal counsel of any or all of the foregoing.
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