UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-03466
Fidelity Hanover Street Trust
(Exact name of registrant as specified in charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)
Scott C. Goebel, Secretary
82 Devonshire St.
Boston, Massachusetts 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
|
Date of fiscal year end: |
December 31 |
|
|
|
|
Date of reporting period: |
June 30, 2011 |
Item 1. Reports to Stockholders
Fidelity® Emerging Markets Debt
Central Fund
Semiannual Report
June 30, 2011
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/proxyvotingresults 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.
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.
EMC-SANN-0811 1.926208.100
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (March 17, 2011 to June 30, 2011). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (January 1, 2011 to June 30, 2011).
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. 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. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Semiannual Report
Shareholder Expense Example - continued
|
|
Annualized Expense Ratio |
Beginning |
Ending |
Expenses Paid |
|
Actual |
.0210% |
$ 1,000.00 |
$ 1,034.40 |
$ .06 A |
|
Hypothetical (5% return per year before expenses) |
|
$ 1,000.00 |
$ 1,024.69 |
$ .11B |
A Actual expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 106/365 (to reflect the period March 17, 2011 to June 30, 2011).
B Hypothetical expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Semiannual Report
Investment Summary (Unaudited)
|
Top Five Countries as of June 30, 2011 |
|
|
(excluding cash equivalents) |
% of fund's |
|
Venezuela |
9.8 |
|
Argentina |
9.1 |
|
Turkey |
7.6 |
|
Russia |
7.5 |
|
Mexico |
6.7 |
|
Percentages are adjusted for the effect of open futures contracts, if applicable. |
|
Top Five Holdings as of June 30, 2011 |
|
|
(by issuer, excluding cash equivalents) |
% of fund's |
|
Russian Federation |
7.2 |
|
Argentine Republic |
6.7 |
|
Turkish Republic |
6.6 |
|
Venezuelan Republic |
5.2 |
|
Petroleos de Venezuela SA |
4.6 |
|
|
30.3 |
|
Asset Allocation (% of fund's net assets) |
|||
|
As of June 30, 2011 |
|||
 |
Corporate Bonds 35.6% |
|
|
 |
Government |
|
|
 |
Supranational Obligations 0.1% |
|
|
 |
Other Investments 0.9% |
|
|
 |
Short-Term |
|
|
Semiannual Report
Investments June 30, 2011 (Unaudited)
Showing Percentage of Net Assets
|
Nonconvertible Bonds - 35.6% |
||||
|
|
Principal |
Value |
||
|
Argentina - 2.0% |
||||
|
Aeropuertos Argentina 2000 SA 10.75% 12/1/20 (d) |
|
$ 220,500 |
$ 237,864 |
|
|
City of Buenos Aires 12.5% 4/6/15 (d) |
|
825,000 |
933,488 |
|
|
Empresa Distribuidora y Comercializadora Norte SA 9.75% 10/25/22 (d) |
|
150,000 |
151,500 |
|
|
Pan American Energy LLC 7.875% 5/7/21 (d) |
|
150,000 |
160,125 |
|
|
Transportadora de Gas del Sur SA 7.875% 5/14/17 (d) |
|
530,000 |
514,100 |
|
|
YPF SA 10% 11/2/28 |
|
140,000 |
161,700 |
|
|
TOTAL ARGENTINA |
2,158,777 |
|||
|
Brazil - 3.3% |
||||
|
Banco Bradesco SA 5.9% 1/16/21 (d) |
|
150,000 |
151,500 |
|
|
Banco Nacional de Desenvolvimento Economico e Social 5.5% 7/12/20 (d) |
|
250,000 |
265,000 |
|
|
Banco Votorantim SA 5.25% 2/11/16 (d) |
|
400,000 |
406,000 |
|
|
BFF International Ltd. 7.25% 1/28/20 (d) |
|
250,000 |
265,000 |
|
|
Braskem Finance Ltd. 7% 5/7/20 (d) |
|
150,000 |
163,313 |
|
|
Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP) 6.25% 12/16/20 (d) |
|
200,000 |
205,000 |
|
|
Globo Comunicacoes e Participacoes SA 6.25% (c)(d)(e) |
|
900,000 |
949,500 |
|
|
Itau Unibanco Holding SA 6.2% 12/21/21 (d) |
|
200,000 |
203,500 |
|
|
Net Servicos de Comunicacao SA 7.5% 1/27/20 |
|
100,000 |
114,250 |
|
|
OGX Petroleo e Gas Participacoes SA 8.5% 6/1/18 (d) |
|
200,000 |
202,750 |
|
|
Rearden G Holdings Eins GmbH 7.875% 3/30/20 (d) |
|
225,000 |
244,125 |
|
|
Telemar Norte Leste SA 5.5% 10/23/20 (d) |
|
150,000 |
147,945 |
|
|
Votorantim Cimentos SA 7.25% 4/5/41 (d) |
|
200,000 |
198,000 |
|
|
TOTAL BRAZIL |
3,515,883 |
|||
|
British Virgin Islands - 0.1% |
||||
|
Gerdau Trade, Inc. 5.75% 1/30/21 (d) |
|
150,000 |
152,438 |
|
|
Canada - 0.4% |
||||
|
Pacific Rubiales Energy Corp. 8.75% 11/10/16 |
|
300,000 |
338,250 |
|
|
Sino-Forest Corp. 6.25% 10/21/17 (d) |
|
150,000 |
69,000 |
|
|
TOTAL CANADA |
407,250 |
|||
|
Cayman Islands - 1.8% |
||||
|
Braskem Finance Ltd. 5.75% 4/15/21 (d) |
|
200,000 |
201,000 |
|
|
CSN Islands XII Corp. 7% (Reg. S) (e) |
|
600,000 |
589,500 |
|
|
Fibria Overseas Finance Ltd. 6.75% 3/3/21 (d) |
|
150,000 |
156,938 |
|
|
Odebrecht Finance Ltd.: |
|
|
|
|
|
6% 4/5/23 (d) |
|
200,000 |
199,000 |
|
|
7% 4/21/20 (d) |
|
150,000 |
164,813 |
|
|
Nonconvertible Bonds - continued |
||||
|
|
Principal |
Value |
||
|
Cayman Islands - continued |
||||
|
Petrobras International Finance Co. Ltd.: |
|
|
|
|
|
6.875% 1/20/40 |
|
$ 225,000 |
$ 243,000 |
|
|
8.375% 12/10/18 |
|
255,000 |
314,288 |
|
|
TOTAL CAYMAN ISLANDS |
1,868,539 |
|||
|
Chile - 0.2% |
||||
|
Automotores Gildemeister SA 8.25% 5/24/21 (d) |
|
165,000 |
168,506 |
|
|
Colombia - 0.3% |
||||
|
BanColombia SA: |
|
|
|
|
|
4.25% 1/12/16 (d) |
|
150,000 |
150,750 |
|
|
5.95% 6/3/21 (d) |
|
165,000 |
166,898 |
|
|
TOTAL COLOMBIA |
317,648 |
|||
|
Dominican Republic - 0.1% |
||||
|
Cerveceria Nacional Dominicana C por A 16% 3/27/12 (d) |
|
175,000 |
153,475 |
|
|
Egypt - 0.3% |
||||
|
African Export-Import Bank 8.75% 11/13/14 |
|
300,000 |
338,250 |
|
|
El Salvador - 0.5% |
||||
|
Telemovil Finance Co. Ltd. 8% 10/1/17 (d) |
|
500,000 |
527,500 |
|
|
Georgia - 0.2% |
||||
|
Georgian Railway Ltd. 9.875% 7/22/15 |
|
150,000 |
166,688 |
|
|
Indonesia - 0.9% |
||||
|
Indo Energy Finance BV 7% 5/7/18 (d) |
|
200,000 |
206,000 |
|
|
PT Adaro Indonesia 7.625% 10/22/19 (d) |
|
325,000 |
360,750 |
|
|
PT Pertamina Persero: |
|
|
|
|
|
5.25% 5/23/21 (d) |
|
235,000 |
237,350 |
|
|
6.5% 5/27/41 (d) |
|
200,000 |
198,500 |
|
|
TOTAL INDONESIA |
1,002,600 |
|||
|
Ireland - 0.6% |
||||
|
SCF Capital Ltd. 5.375% 10/27/17 (d) |
|
200,000 |
200,000 |
|
|
VIP Finance Ireland Ltd. 7.748% 2/2/21 (d) |
|
200,000 |
205,500 |
|
|
Vnesheconombank Via VEB Finance Ltd. 6.8% 11/22/25 (d) |
|
175,000 |
177,406 |
|
|
TOTAL IRELAND |
582,906 |
|||
|
Nonconvertible Bonds - continued |
||||
|
|
Principal |
Value |
||
|
Kazakhstan - 0.6% |
||||
|
Development Bank of Kazakhstan JSC 5.5% 12/20/15 (d) |
|
$ 200,000 |
$ 207,000 |
|
|
Zhaikmunai Finance BV 10.5% 10/19/15 (d) |
|
450,000 |
480,938 |
|
|
TOTAL KAZAKHSTAN |
687,938 |
|||
|
Korea (South) - 0.2% |
||||
|
Export-Import Bank of Korea 5.1% 10/29/13 (d) |
INR |
12,100,000 |
260,951 |
|
|
Luxembourg - 2.8% |
||||
|
Alrosa Finance SA: |
|
|
|
|
|
(Reg. S) 8.875% 11/17/14 |
|
125,000 |
142,813 |
|
|
7.75% 11/3/20 (d) |
|
200,000 |
217,250 |
|
|
Aquarius Investments Luxemburg 8.25% 2/18/16 |
|
200,000 |
214,060 |
|
|
Evraz Group SA: |
|
|
|
|
|
8.25% 11/10/15 (d) |
|
150,000 |
166,875 |
|
|
9.5% 4/24/18 (Reg. S) |
|
225,000 |
258,750 |
|
|
MHP SA 10.25% 4/29/15 (d) |
|
145,000 |
154,788 |
|
|
RSHB Capital SA: |
|
|
|
|
|
6% 6/3/21 (d) |
|
200,000 |
201,500 |
|
|
9% 6/11/14 (d) |
|
100,000 |
114,140 |
|
|
SB Capital SA 5.4% 3/24/17 (Reg. S) |
|
150,000 |
155,813 |
|
|
T2 Capital Finance Co. SA 6.95% 2/6/17 (Reg. S) (c) |
|
250,000 |
253,125 |
|
|
TMK Capital SA 7.75% 1/27/18 |
|
200,000 |
207,250 |
|
|
TNK-BP Finance SA 7.5% 7/18/16 |
|
150,000 |
168,563 |
|
|
Vimpel Communications 8.25% 5/23/16 (Reg. S) (Issued by UBS Luxembourg SA for Vimpel Communications) |
|
610,000 |
667,188 |
|
|
TOTAL LUXEMBOURG |
2,922,115 |
|||
|
Mexico - 2.8% |
||||
|
Alestra SA de RL de CV 11.75% 8/11/14 |
|
425,000 |
486,625 |
|
|
Gruma SAB de CV 7.75% (Reg. S) (e) |
|
350,000 |
350,000 |
|
|
Kansas City Southern de Mexico SA de CV: |
|
|
|
|
|
6.125% 6/15/21 (d) |
|
65,000 |
64,838 |
|
|
6.625% 12/15/20 (d) |
|
150,000 |
154,875 |
|
|
12.5% 4/1/16 |
|
404,000 |
480,760 |
|
|
Petroleos Mexicanos: |
|
|
|
|
|
5.5% 1/21/21 |
|
225,000 |
236,250 |
|
|
6% 3/5/20 |
|
225,000 |
246,375 |
|
|
6.625% (d)(e) |
|
650,000 |
654,875 |
|
|
8% 5/3/19 |
|
200,000 |
248,000 |
|
|
TOTAL MEXICO |
2,922,598 |
|||
|
Nonconvertible Bonds - continued |
||||
|
|
Principal |
Value |
||
|
Mongolia - 0.1% |
||||
|
Trade & Development Bank of Mongolia LLC 8.5% 10/25/13 (Reg. S) |
|
$ 150,000 |
$ 154,125 |
|
|
Multi-National - 0.4% |
||||
|
Eastern and Southern African Trade and Development Bank 6.875% 1/9/16 (Reg. S) |
|
200,000 |
195,000 |
|
|
International Bank for Reconstruction & Development 8.2% 12/12/12 |
NGN |
40,000,000 |
263,003 |
|
|
TOTAL MULTI-NATIONAL |
458,003 |
|||
|
Netherlands - 4.4% |
||||
|
Bank of Georgia JSC 9% 2/8/12 (Issued by BG Finance BV for Bank of Georgia JSC) |
|
150,000 |
154,125 |
|
|
DTEK Finance BV 9.5% 4/28/15 (d) |
|
225,000 |
238,500 |
|
|
HSBK (Europe) BV: |
|
|
|
|
|
7.25% 5/3/17 (d) |
|
400,000 |
408,000 |
|
|
9.25% 10/16/13 (d) |
|
325,000 |
353,438 |
|
|
Indosat Palapa Co. BV 7.375% 7/29/20 (d) |
|
150,000 |
166,125 |
|
|
Intergas Finance BV 6.375% 5/14/17 (Reg. S) |
|
125,000 |
134,375 |
|
|
KazMunaiGaz Finance Sub BV: |
|
|
|
|
|
6.375% 4/9/21 (d) |
|
200,000 |
211,000 |
|
|
7% 5/5/20 (d) |
|
225,000 |
247,500 |
|
|
8.375% 7/2/13 (d) |
|
225,000 |
245,813 |
|
|
9.125% 7/2/18 (d) |
|
275,000 |
338,250 |
|
|
11.75% 1/23/15 (d) |
|
350,000 |
434,455 |
|
|
Majapahit Holding BV: |
|
|
|
|
|
7.75% 10/17/16 (Reg. S) |
|
325,000 |
377,813 |
|
|
7.75% 1/20/20 (d) |
|
250,000 |
292,500 |
|
|
8% 8/7/19 (d) |
|
175,000 |
206,938 |
|
|
Metinvest BV 10.25% 5/20/15 (d) |
|
125,000 |
136,100 |
|
|
VimpelCom Holdings BV: |
|
|
|
|
|
4.2465% 6/29/14 (d)(f) |
|
200,000 |
200,000 |
|
|
7.5043% 3/1/22 (d) |
|
480,000 |
480,000 |
|
|
TOTAL NETHERLANDS |
4,624,932 |
|||
|
Pakistan - 0.5% |
||||
|
Pakistan Mobile Communications Ltd. 8.625% 11/13/13 (d) |
|
500,000 |
490,000 |
|
|
Paraguay - 0.4% |
||||
|
BBVA Paraguay SA 9.75% 2/11/16 (d) |
|
375,000 |
408,750 |
|
|
Nonconvertible Bonds - continued |
||||
|
|
Principal |
Value |
||
|
Peru - 0.6% |
||||
|
Banco de Credito del Peru: |
|
|
|
|
|
4.75% 3/16/16 (d) |
|
$ 365,000 |
$ 360,438 |
|
|
5.375% 9/16/20 (d) |
|
250,000 |
236,875 |
|
|
TOTAL PERU |
597,313 |
|||
|
Philippines - 1.3% |
||||
|
Development Bank of Philippines: |
|
|
|
|
|
5.5% 3/25/21 |
|
200,000 |
198,000 |
|
|
8.375% (e)(f) |
|
485,000 |
538,350 |
|
|
National Power Corp. 6.875% 11/2/16 (d) |
|
150,000 |
171,750 |
|
|
Power Sector Assets and Liabilities Management Corp.: |
|
|
|
|
|
7.25% 5/27/19 (d) |
|
200,000 |
237,000 |
|
|
7.39% 12/2/24 (d) |
|
200,000 |
237,000 |
|
|
TOTAL PHILIPPINES |
1,382,100 |
|||
|
Russia - 0.3% |
||||
|
MTS International Funding Ltd. 8.625% 6/22/20 (d) |
|
300,000 |
341,640 |
|
|
Singapore - 0.2% |
||||
|
STATS ChipPAC Ltd. 7.5% 8/12/15 (d) |
|
150,000 |
161,250 |
|
|
Trinidad & Tobago - 0.2% |
||||
|
Petroleum Co. of Trinidad & Tobago Ltd. (Reg. S) 6% 5/8/22 |
|
229,167 |
232,604 |
|
|
Turkey - 1.0% |
||||
|
Akbank T.A.S. 5.125% 7/22/15 (d) |
|
225,000 |
222,750 |
|
|
Turkiye Garanti Bankasi AS: |
|
|
|
|
|
2.774% 4/20/16 (d)(f) |
|
200,000 |
198,500 |
|
|
6.25% 4/20/21 (d) |
|
400,000 |
388,500 |
|
|
Turkiye Is Bankasi AS 5.1% 2/1/16 (d) |
|
200,000 |
197,500 |
|
|
TOTAL TURKEY |
1,007,250 |
|||
|
Ukraine - 0.2% |
||||
|
Naftogaz of Ukraine NJSC 9.5% 9/30/14 |
|
200,000 |
218,500 |
|
|
United Kingdom - 2.8% |
||||
|
Afren PLC 11.5% 2/1/16 (d) |
|
200,000 |
218,500 |
|
|
EXIM of Ukraine 7.65% 9/7/11 (Issued by Credit Suisse International for EXIM of Ukraine) |
|
1,550,000 |
1,555,890 |
|
|
Ferrexpo Finance PLC 7.875% 4/7/16 (d) |
|
230,000 |
236,325 |
|
|
Standard Bank PLC 8.75% 2/9/16 (Issued by Standard Bank PLC for PrivatBank) (f) |
|
175,000 |
149,625 |
|
|
Nonconvertible Bonds - continued |
||||
|
|
Principal |
Value |
||
|
United Kingdom - continued |
||||
|
The State Export-Import Bank of Ukraine JSC 5.7928% 2/9/16 (Issued by Credit Suisse First Boston International for The State Export-Import Bank of Ukraine JSC) (c) |
|
$ 375,000 |
$ 337,500 |
|
|
Vedanta Resources PLC: |
|
|
|
|
|
6.75% 6/7/16 (d) |
|
255,000 |
255,000 |
|
|
8.25% 6/7/21 (d) |
|
200,000 |
202,000 |
|
|
TOTAL UNITED KINGDOM |
2,954,840 |
|||
|
United States of America - 1.5% |
||||
|
Drummond Co., Inc. 7.375% 2/15/16 |
|
220,000 |
222,200 |
|
|
Korea Development Bank 4% 9/9/16 |
|
200,000 |
204,680 |
|
|
NII Capital Corp.: |
|
|
|
|
|
7.625% 4/1/21 |
|
110,000 |
114,675 |
|
|
10% 8/15/16 |
|
200,000 |
232,000 |
|
|
Pemex Project Funding Master Trust 6.625% 6/15/35 |
|
500,000 |
521,875 |
|
|
Southern Copper Corp. 6.75% 4/16/40 |
|
345,000 |
334,719 |
|
|
TOTAL UNITED STATES OF AMERICA |
1,630,149 |
|||
|
Venezuela - 4.6% |
||||
|
Petroleos de Venezuela SA: |
|
|
|
|
|
4.9% 10/28/14 |
|
1,075,000 |
825,063 |
|
|
5.25% 4/12/17 |
|
700,000 |
439,250 |
|
|
5.375% 4/12/27 |
|
1,840,000 |
920,000 |
|
|
5.5% 4/12/37 |
|
925,000 |
453,250 |
|
|
Petroleos de Venezuela SA 144A: |
|
|
|
|
|
8.5% 11/2/17 (d) |
|
1,505,000 |
1,109,938 |
|
|
12.75% 2/17/22 (d) |
|
1,295,000 |
1,058,663 |
|
|
TOTAL VENEZUELA |
4,806,164 |
|||
|
TOTAL NONCONVERTIBLE BONDS (Cost $37,330,649) |
37,621,682 |
|||
|
Government Obligations - 60.8% |
||||
|
|
||||
|
Argentina - 7.1% |
||||
|
Argentine Republic: |
|
|
|
|
|
discount (with partial capitalization through 12/31/13) 8.28% 12/31/33 |
|
658,639 |
581,249 |
|
|
0.4677% 8/3/12 (f) |
|
2,797,500 |
2,738,526 |
|
|
2.5% 12/31/38 (c) |
|
625,000 |
271,875 |
|
|
7% 9/12/13 |
|
1,785,000 |
1,812,519 |
|
|
7% 10/3/15 |
|
1,680,000 |
1,625,400 |
|
|
Government Obligations - continued |
||||
|
|
Principal |
Value |
||
|
Argentina - continued |
||||
|
Provincia de Cordoba 12.375% 8/17/17 (d) |
|
$ 350,000 |
$ 365,750 |
|
|
Provincia de Neuquen Argentina 7.875% 4/26/21 (d) |
|
135,000 |
138,038 |
|
|
TOTAL ARGENTINA |
7,533,357 |
|||
|
Bahamas (Nassau) - 0.2% |
||||
|
Bahamian Republic 6.95% 11/20/29 (d) |
|
225,000 |
243,000 |
|
|
Bahrain - 0.2% |
||||
|
Bahrain Kingdom 5.5% 3/31/20 |
|
200,000 |
195,500 |
|
|
Barbados - 0.2% |
||||
|
Barbados Government 7.25% 12/15/21 (d) |
|
225,000 |
236,250 |
|
|
Belarus - 0.8% |
||||
|
Belarus Republic: |
|
|
|
|
|
8.75% 8/3/15 (Reg. S) |
|
650,000 |
585,000 |
|
|
8.95% 1/26/18 |
|
300,000 |
264,000 |
|
|
TOTAL BELARUS |
849,000 |
|||
|
Bermuda - 0.2% |
||||
|
Bermuda Government 5.603% 7/20/20 (d) |
|
150,000 |
166,125 |
|
|
Brazil - 2.3% |
||||
|
Brazilian Federative Republic: |
|
|
|
|
|
5.625% 1/7/41 |
|
450,000 |
461,700 |
|
|
6% 1/17/17 |
|
305,000 |
356,545 |
|
|
7.125% 1/20/37 |
|
350,000 |
431,375 |
|
|
8.25% 1/20/34 |
|
110,000 |
150,975 |
|
|
8.75% 2/4/25 |
|
175,000 |
248,500 |
|
|
10.125% 5/15/27 |
|
225,000 |
352,125 |
|
|
12.25% 3/6/30 |
|
220,000 |
402,600 |
|
|
TOTAL BRAZIL |
2,403,820 |
|||
|
Bulgaria - 0.1% |
||||
|
Bulgarian Republic 8.25% 1/15/15 (Reg. S) |
|
120,000 |
140,100 |
|
|
Colombia - 1.7% |
||||
|
Colombian Republic: |
|
|
|
|
|
7.375% 1/27/17 |
|
225,000 |
275,625 |
|
|
7.375% 9/18/37 |
|
425,000 |
535,500 |
|
|
10.375% 1/28/33 |
|
400,000 |
632,000 |
|
|
11.75% 2/25/20 |
|
200,000 |
309,000 |
|
|
TOTAL COLOMBIA |
1,752,125 |
|||
|
Congo - 0.3% |
||||
|
Congo Republic 3% 6/30/29 (c) |
|
427,500 |
277,875 |
|
|
Government Obligations - continued |
||||
|
|
Principal |
Value |
||
|
Croatia - 1.2% |
||||
|
Croatia Republic: |
|
|
|
|
|
6.375% 3/24/21 (d) |
|
$ 450,000 |
$ 466,313 |
|
|
6.625% 7/14/20 (d) |
|
475,000 |
502,906 |
|
|
6.75% 11/5/19 (d) |
|
300,000 |
323,313 |
|
|
TOTAL CROATIA |
1,292,532 |
|||
|
Dominican Republic - 0.8% |
||||
|
Dominican Republic: |
|
|
|
|
|
1.2156% 8/30/24 (f) |
|
250,000 |
220,625 |
|
|
7.5% 5/6/21 (d) |
|
225,000 |
234,000 |
|
|
9.04% 1/23/18 (d) |
|
191,271 |
214,702 |
|
|
9.5% 9/27/11 (Reg. S) |
|
153,699 |
156,388 |
|
|
TOTAL DOMINICAN REPUBLIC |
825,715 |
|||
|
Egypt - 0.3% |
||||
|
Arab Republic of Egypt: |
|
|
|
|
|
5.75% 4/29/20 (d) |
|
125,000 |
125,438 |
|
|
6.875% 4/30/40 (d) |
|
175,000 |
168,438 |
|
|
TOTAL EGYPT |
293,876 |
|||
|
El Salvador - 0.8% |
||||
|
El Salvador Republic: |
|
|
|
|
|
7.375% 12/1/19 (d) |
|
150,000 |
165,000 |
|
|
7.625% 2/1/41 (d) |
|
150,000 |
153,750 |
|
|
7.65% 6/15/35 (Reg. S) |
|
225,000 |
232,875 |
|
|
7.75% 1/24/23 (Reg. S) |
|
175,000 |
197,750 |
|
|
8.25% 4/10/32 (Reg. S) |
|
100,000 |
111,750 |
|
|
TOTAL EL SALVADOR |
861,125 |
|||
|
Gabon - 0.3% |
||||
|
Gabonese Republic 8.2% 12/12/17 (d) |
|
250,000 |
293,125 |
|
|
Georgia - 0.3% |
||||
|
Georgia Republic 6.875% 4/12/21 (d) |
|
345,000 |
353,625 |
|
|
Ghana - 0.9% |
||||
|
Ghana Republic: |
|
|
|
|
|
8.5% 10/4/17 (d) |
|
200,000 |
225,500 |
|
|
14.99% 3/11/13 |
GHS |
1,100,000 |
749,346 |
|
|
TOTAL GHANA |
974,846 |
|||
|
Hungary - 1.1% |
||||
|
Hungarian Republic: |
|
|
|
|
|
6.25% 1/29/20 |
|
250,000 |
263,750 |
|
|
Government Obligations - continued |
||||
|
|
Principal |
Value |
||
|
Hungary - continued |
||||
|
Hungarian Republic: - continued |
|
|
|
|
|
6.375% 3/29/21 |
|
$ 588,000 |
$ 620,340 |
|
|
7.625% 3/29/41 |
|
288,000 |
311,040 |
|
|
TOTAL HUNGARY |
1,195,130 |
|||
|
Iceland - 0.2% |
||||
|
Republic of Iceland 4.875% 6/16/16 (d) |
|
165,000 |
165,619 |
|
|
Indonesia - 3.0% |
||||
|
Indonesian Republic: |
|
|
|
|
|
4.875% 5/5/21 (d) |
|
200,000 |
205,500 |
|
|
5.875% 3/13/20 (d) |
|
425,000 |
472,813 |
|
|
6.625% 2/17/37 (d) |
|
275,000 |
305,938 |
|
|
6.875% 1/17/18 (d) |
|
250,000 |
292,825 |
|
|
7.5% 1/15/16 (d) |
|
150,000 |
177,945 |
|
|
7.75% 1/17/38 (d) |
|
450,000 |
563,625 |
|
|
8.5% 10/12/35 (Reg. S) |
|
350,000 |
472,500 |
|
|
11.625% 3/4/19 (d) |
|
450,000 |
664,875 |
|
|
TOTAL INDONESIA |
3,156,021 |
|||
|
Iraq - 0.7% |
||||
|
Republic of Iraq 5.8% 1/15/28 (Reg. S) |
|
800,000 |
720,000 |
|
|
Jordan - 0.2% |
||||
|
Jordanian Kingdom 3.875% 11/12/15 |
|
200,000 |
190,500 |
|
|
Lebanon - 0.7% |
||||
|
Lebanese Republic 4% 12/31/17 |
|
737,750 |
711,043 |
|
|
Lithuania - 0.9% |
||||
|
Lithuanian Republic: |
|
|
|
|
|
5.125% 9/14/17 (d) |
|
125,000 |
128,438 |
|
|
6.125% 3/9/21 (d) |
|
150,000 |
159,188 |
|
|
6.75% 1/15/15 (d) |
|
300,000 |
330,375 |
|
|
7.375% 2/11/20 (d) |
|
325,000 |
374,563 |
|
|
TOTAL LITHUANIA |
992,564 |
|||
|
Mexico - 3.9% |
||||
|
United Mexican States: |
|
|
|
|
|
5.125% 1/15/20 |
|
702,000 |
758,160 |
|
|
5.625% 1/15/17 |
|
554,000 |
630,175 |
|
|
5.75% 10/12/10 |
|
375,000 |
349,500 |
|
|
5.95% 3/19/19 |
|
302,000 |
346,545 |
|
|
6.05% 1/11/40 |
|
1,002,000 |
1,066,128 |
|
|
6.75% 9/27/34 |
|
425,000 |
494,063 |
|
|
Government Obligations - continued |
||||
|
|
Principal |
Value |
||
|
Mexico - continued |
||||
|
United Mexican States: - continued |
|
|
|
|
|
7.5% 4/8/33 |
|
$ 200,000 |
$ 252,000 |
|
|
8.3% 8/15/31 |
|
190,000 |
260,300 |
|
|
TOTAL MEXICO |
4,156,871 |
|||
|
Nigeria - 0.4% |
||||
|
Republic of Nigeria 6.75% 1/28/21 (d) |
|
350,000 |
367,500 |
|
|
Pakistan - 0.7% |
||||
|
Islamic Republic of Pakistan 7.125% 3/31/16 (d) |
|
875,000 |
756,875 |
|
|
Peru - 1.2% |
||||
|
Peruvian Republic: |
|
|
|
|
|
5.625% 11/18/50 |
|
375,000 |
353,438 |
|
|
7.35% 7/21/25 |
|
175,000 |
213,063 |
|
|
8.75% 11/21/33 |
|
495,000 |
674,438 |
|
|
TOTAL PERU |
1,240,939 |
|||
|
Philippines - 1.4% |
||||
|
Philippine Republic: |
|
|
|
|
|
5.5% 3/30/26 |
|
200,000 |
205,000 |
|
|
6.375% 1/15/32 |
|
150,000 |
164,445 |
|
|
6.375% 10/23/34 |
|
200,000 |
219,260 |
|
|
6.5% 1/20/20 |
|
225,000 |
262,125 |
|
|
9.5% 2/2/30 |
|
175,000 |
254,188 |
|
|
10.625% 3/16/25 |
|
240,000 |
366,000 |
|
|
TOTAL PHILIPPINES |
1,471,018 |
|||
|
Poland - 0.1% |
||||
|
Polish Government 3.875% 7/16/15 |
|
150,000 |
154,875 |
|
|
Russia - 7.2% |
||||
|
Russian Federation: |
|
|
|
|
|
3.625% 4/29/15 (d) |
|
500,000 |
512,500 |
|
|
5% 4/29/20 (d) |
|
800,000 |
825,040 |
|
|
7.5% 3/31/30 (Reg. S) |
|
4,203,900 |
4,954,275 |
|
|
11% 7/24/18 (Reg. S) |
|
100,000 |
142,750 |
|
|
12.75% 6/24/28 (Reg. S) |
|
650,000 |
1,150,500 |
|
|
TOTAL RUSSIA |
7,585,065 |
|||
|
Senegal - 0.2% |
||||
|
Republic of Senegal 8.75% 5/13/21 (d) |
|
200,000 |
205,750 |
|
|
Serbia - 1.6% |
||||
|
Republic of Serbia 6.75% 11/1/24 (d) |
|
1,737,000 |
1,737,000 |
|
|
Government Obligations - continued |
||||
|
|
Principal |
Value |
||
|
Sri Lanka - 0.8% |
||||
|
Democratic Socialist Republic of Sri Lanka: |
|
|
|
|
|
6.25% 10/4/20 (d) |
|
$ 350,000 |
$ 352,625 |
|
|
7.4% 1/22/15 (d) |
|
325,000 |
354,250 |
|
|
8.25% 10/24/12 (d) |
|
150,000 |
159,938 |
|
|
TOTAL SRI LANKA |
866,813 |
|||
|
Turkey - 6.6% |
||||
|
Turkish Republic: |
|
|
|
|
|
5.625% 3/30/21 |
|
325,000 |
340,113 |
|
|
6% 1/14/41 |
|
200,000 |
194,800 |
|
|
6.75% 4/3/18 |
|
500,000 |
568,500 |
|
|
6.75% 5/30/40 |
|
500,000 |
540,000 |
|
|
6.875% 3/17/36 |
|
875,000 |
962,500 |
|
|
7% 9/26/16 |
|
550,000 |
630,025 |
|
|
7.25% 3/15/15 |
|
325,000 |
370,663 |
|
|
7.25% 3/5/38 |
|
575,000 |
660,963 |
|
|
7.375% 2/5/25 |
|
900,000 |
1,066,050 |
|
|
7.5% 7/14/17 |
|
500,000 |
587,750 |
|
|
7.5% 11/7/19 |
|
400,000 |
474,800 |
|
|
11.875% 1/15/30 |
|
350,000 |
595,000 |
|
|
TOTAL TURKEY |
6,991,164 |
|||
|
Ukraine - 2.1% |
||||
|
Ukraine Financing of Infrastructure Projects State Enterprise 8.375% 11/3/17 (d) |
|
325,000 |
338,813 |
|
|
Ukraine Government: |
|
|
|
|
|
6.25% 6/17/16 (d) |
|
200,000 |
199,800 |
|
|
6.385% 6/26/12 (d) |
|
375,000 |
384,375 |
|
|
6.75% 11/14/17 (d) |
|
425,000 |
427,125 |
|
|
6.875% 9/23/15 (d) |
|
225,000 |
232,538 |
|
|
7.65% 6/11/13 (d) |
|
225,000 |
236,363 |
|
|
7.75% 9/23/20 (d) |
|
200,000 |
207,300 |
|
|
7.95% 2/23/21 (d) |
|
200,000 |
208,300 |
|
|
TOTAL UKRAINE |
2,234,614 |
|||
|
United Arab Emirates - 0.2% |
||||
|
United Arab Emirates 7.75% 10/5/20 (Reg. S) |
|
150,000 |
159,188 |
|
|
United States of America - 2.0% |
||||
|
U.S. Treasury Bonds 3.875% 8/15/40 |
|
2,277,000 |
2,084,878 |
|
|
Government Obligations - continued |
||||
|
|
Principal |
Value |
||
|
Uruguay - 1.0% |
||||
|
Uruguay Republic: |
|
|
|
|
|
6.875% 9/28/25 |
|
$ 125,000 |
$ 152,188 |
|
|
7.875% 1/15/33 pay-in-kind |
|
275,000 |
347,188 |
|
|
8% 11/18/22 |
|
450,000 |
582,300 |
|
|
TOTAL URUGUAY |
1,081,676 |
|||
|
Venezuela - 5.2% |
||||
|
Venezuelan Republic: |
|
|
|
|
|
6% 12/9/20 |
|
350,000 |
216,650 |
|
|
7% 3/31/38 |
|
300,000 |
171,750 |
|
|
8.5% 10/8/14 |
|
365,000 |
330,325 |
|
|
9% 5/7/23 (Reg. S) |
|
1,450,000 |
1,042,550 |
|
|
9.25% 9/15/27 |
|
950,000 |
712,500 |
|
|
9.25% 5/7/28 (Reg. S) |
|
590,000 |
411,820 |
|
|
9.375% 1/13/34 |
|
510,000 |
359,040 |
|
|
10.75% 9/19/13 |
|
365,000 |
360,438 |
|
|
12.75% 8/23/22 |
|
1,300,000 |
1,163,500 |
|
|
13.625% 8/15/18 |
|
685,000 |
681,575 |
|
|
TOTAL VENEZUELA |
5,450,148 |
|||
|
Vietnam - 1.7% |
||||
|
Vietnamese Socialist Republic: |
|
|
|
|
|
1.274% 3/12/16 (f) |
|
239,131 |
227,174 |
|
|
4% 3/12/28 (c) |
|
1,100,000 |
929,500 |
|
|
6.75% 1/29/20 (d) |
|
225,000 |
234,000 |
|
|
6.875% 1/15/16 (d) |
|
375,000 |
399,375 |
|
|
TOTAL VIETNAM |
1,790,049 |
|||
|
TOTAL GOVERNMENT OBLIGATIONS (Cost $62,889,830) |
64,157,296 |
|||
|
Supranational Obligations - 0.1% |
||||
|
|
||||
|
Eurasian Development Bank 7.375% 9/29/14 (d) |
|
125,000 |
137,500 |
|
|
Sovereign Loan Participations - 0.9% |
||||
|
|
||||
|
Indonesia - 0.9% |
||||
|
Indonesian Republic loan participation Goldman Sachs 1.25% 12/14/19 (f) |
|
953,704 |
904,826 |
|
|
Money Market Funds - 0.7% |
|||
|
Shares |
Value |
||
|
Fidelity Cash Central Fund, 0.11% (a) |
694,423 |
$ 694,423 |
|
|
TOTAL INVESTMENT PORTFOLIO - 98.1% (Cost $101,957,923) |
103,515,727 |
||
|
NET OTHER ASSETS (LIABILITIES) - 1.9% |
2,013,299 |
||
|
NET ASSETS - 100% |
$ 105,529,026 |
||
|
Currency Abbreviations |
||
|
GHS |
- |
Ghana Cedi |
|
INR |
- |
Indian rupee |
|
NGN |
- |
Nigerian naira |
|
Legend |
|
(a) 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. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request. |
|
(b) Principal amount is stated in United States dollars unless otherwise noted. |
|
(c) 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. |
|
(d) 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 $38,957,506 or 36.9% of net assets. |
|
(e) Security is perpetual in nature with no stated maturity date. |
|
(f) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end. |
|
Affiliated Central Funds |
|
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows: |
|
Fund |
Income earned |
|
Fidelity Cash Central Fund |
$ 2,396 |
|
Other Information |
|
The following is a summary of the inputs used, as of June 30, 2011, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
|
Valuation Inputs at Reporting Date: |
||||
|
Description |
Total |
Level 1 |
Level 2 |
Level 3 |
|
Investments in Securities: |
||||
|
Corporate Bonds |
$ 37,621,682 |
$ - |
$ 37,621,682 |
$ - |
|
Government Obligations |
64,157,296 |
- |
64,157,296 |
- |
|
Supranational Obligations |
137,500 |
- |
137,500 |
- |
|
Sovereign Loan Participations |
904,826 |
- |
904,826 |
- |
|
Money Market Funds |
694,423 |
694,423 |
- |
- |
|
Total Investments in Securities: |
$ 103,515,727 |
$ 694,423 |
$ 102,821,304 |
$ - |
|
The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited): |
|
U.S. Government and U.S. Government Agency Obligations |
2.0% |
|
AAA,AA,A |
1.9% |
|
BBB |
29.4% |
|
BB |
26.3% |
|
B |
30.9% |
|
CCC,CC,C |
0.5% |
|
Not Rated |
6.4% |
|
Short-Term Investments and Net Other Assets |
2.6% |
|
|
100.0% |
|
We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
|
|
June 30, 2011 (Unaudited) |
|
|
|
|
|
|
Assets |
|
|
|
Investment in securities, at value - See accompanying schedule: Unaffiliated issuers (cost $101,263,500) |
$ 102,821,304 |
|
|
Fidelity Central Funds (cost $694,423) |
694,423 |
|
|
Total Investments (cost $101,957,923) |
|
$ 103,515,727 |
|
Cash |
|
155,500 |
|
Receivable for investments sold |
|
833,287 |
|
Receivable for fund shares sold |
|
16,882 |
|
Interest receivable |
|
1,902,990 |
|
Distributions receivable from Fidelity Central Funds |
|
235 |
|
Other receivables |
|
98 |
|
Total assets |
|
106,424,719 |
|
|
|
|
|
Liabilities |
|
|
|
Payable for investments purchased |
$ 855,733 |
|
|
Payable for fund shares redeemed |
37,595 |
|
|
Other payables and accrued expenses |
2,365 |
|
|
Total liabilities |
|
895,693 |
|
|
|
|
|
Net Assets |
|
$ 105,529,026 |
|
Net Assets consist of: |
|
|
|
Paid in capital |
|
$ 103,682,547 |
|
Undistributed net investment income |
|
116,217 |
|
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
172,252 |
|
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
1,558,010 |
|
Net Assets, for 10,361,822 shares outstanding |
|
$ 105,529,026 |
|
Net Asset Value, offering price and redemption price per share ($105,529,026 ÷ 10,361,822 shares) |
|
$ 10.18 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
|
|
For the period March 17, 2011 |
|
|
|
|
|
|
Investment Income |
|
|
|
Dividends |
|
$ 13,759 |
|
Interest |
|
1,743,582 |
|
Income from Fidelity Central Funds |
|
2,396 |
|
Total income |
|
1,759,737 |
|
|
|
|
|
Expenses |
|
|
|
Custodian fees and expenses |
$ 6,142 |
|
|
Independent directors' compensation |
123 |
|
|
Total expenses before reductions |
6,265 |
|
|
Expense reductions |
(166) |
6,099 |
|
Net investment income (loss) |
|
1,753,638 |
|
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
|
Investment securities: |
|
|
|
Unaffiliated issuers |
177,560 |
|
|
Foreign currency transactions |
(5,308) |
|
|
Total net realized gain (loss) |
|
172,252 |
|
Change in net unrealized appreciation (depreciation) on: Investment securities |
1,557,804 |
|
|
Assets and liabilities in foreign currencies |
206 |
|
|
Total change in net unrealized appreciation (depreciation) |
|
1,558,010 |
|
Net gain (loss) |
|
1,730,262 |
|
Net increase (decrease) in net assets resulting from operations |
|
$ 3,483,900 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
|
|
For the period |
|
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 1,753,638 |
|
Net realized gain (loss) |
172,252 |
|
Change in net unrealized appreciation (depreciation) |
1,558,010 |
|
Net increase (decrease) in net assets resulting from operations |
3,483,900 |
|
Distributions to shareholders from net investment income |
(1,637,421) |
|
Share transactions |
102,746,295 |
|
Reinvestment of distributions |
1,637,421 |
|
Cost of shares redeemed |
(701,169) |
|
Net increase (decrease) in net assets resulting from share transactions |
103,682,547 |
|
Total increase (decrease) in net assets |
105,529,026 |
|
|
|
|
Net Assets |
|
|
Beginning of period |
$ - |
|
End of period (including undistributed net investment income of |
$ 105,529,026 |
|
Other Information Shares |
|
|
Sold |
10,269,529 |
|
Issued in reinvestment of distributions |
161,575 |
|
Redeemed |
(69,282) |
|
Net increase (decrease) |
10,361,822 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
|
Period ended |
|
|
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 10.00 |
|
Income from Investment Operations |
|
|
Net investment income (loss) D |
.174 |
|
Net realized and unrealized gain (loss) |
.168 |
|
Total from investment operations |
.342 |
|
Distributions from net investment income |
(.162) |
|
Net asset value, end of period |
$ 10.18 |
|
Total Return B,C |
3.44% |
|
Ratios to Average Net Assets E,H |
|
|
Expenses before reductions |
.02% A |
|
Expenses net of fee waivers, if any |
.02% A |
|
Expenses net of all reductions |
.02% A |
|
Net investment income (loss) |
5.99% A |
|
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 105,529 |
|
Portfolio turnover rate F |
13% I |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D Calculated based on average shares outstanding during the period.
E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G For the period March 17, 2011 (commencement of operations) to June 30, 2011.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Amount not annualized.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2011 (Unaudited)
1. Organization.
Fidelity Emerging Markets Debt Central Fund (the Fund) is a non-diversified fund of Fidelity Hanover 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. Shares of the Fund are only offered to other investment companies and accounts managed by Fidelity Management & Research Company (FMR), or its affiliates (the Investing Funds).
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by 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 Securities and Exchange Commission (the SEC) web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, are available on the SEC 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 (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. 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. The Fund uses independent pricing services approved by the Board of Trustees to value its investments. 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 market or security specific events, changes in interest rates and credit quality. The
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Security Valuation - continued
frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The value used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of June 30, 2011 for the Fund's investments, is included at the end of the Fund's Schedule of Investments. Valuation techniques used to value the Fund's investments by major category are as follows:
Debt securities, including restricted securities, are valued based on evaluated prices received from independent pricing services or from dealers who make markets in such securities. For corporate bonds, foreign government and government agency obligations, supranational obligations, U.S. government and government agency obligations and sovereign loan participations, pricing services utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices and are generally categorized as Level 2 in the hierarchy. The Fund invests a significant portion of its assets in below investment grade securities. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.
When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing matrices which consider similar factors that would be used by independent pricing services. These are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Investments in open-end mutual funds, including other Fidelity Central Funds, are valued at their closing net asset value each business day and are categorized as Level 1 in the hierarchy.
Semiannual Report
3. Significant Accounting Policies - continued
Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date. Interest income and distributions from other Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. 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, including 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. A fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
3. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
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.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
|
Gross unrealized appreciation |
$ 1,985,059 |
|
Gross unrealized depreciation |
(326,992) |
|
Net unrealized appreciation (depreciation) on securities and other investments |
$ 1,658,067 |
|
|
|
|
Tax cost |
$ 101,857,660 |
Under the recently enacted Regulated Investment Company Modernization Act of 2010 (the Act), the Fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to any losses incurred in pre-enactment taxable years, which generally expire after eight years from when they are incurred. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. The Fund's first fiscal year end subject to the Act will be December 31, 2011.
New Accounting Pronouncement. In May 2011, the Financial Accounting Standards Board issued Accounting Standard Update No. 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The update changes the wording used to describe the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The update is effective during interim and annual periods beginning after December 15, 2011. Management is currently evaluating the impact of the update's adoption on the Fund's financial statement disclosures.
Semiannual Report
4. Operating Policies.
Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The Fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments, including revolving credit facilities, that obligate the Fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $107,810,026 and $10,695,104, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee and Expense Contract. FMR Co., Inc. (FMRC), an affiliate of FMR, provides the Fund with investment management services. The Fund does not pay any fees for these services. Pursuant to the Fund's management contract with FMRC, FMR pays FMRC a portion of the management fees it receives from the Investing Funds. In addition, under an expense contract, FMR also pays all other expenses of the Fund, excluding custody fees, the compensation of the independent Trustees, and certain exceptions such as interest expense.
7. Expense Reductions.
FMR has voluntarily agreed to reimburse a portion of the Fund's operating expenses. For the period, the reimbursement reduced the expenses by $123.
In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $43, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
8. 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.
At the end of the period, mutual funds managed by FMR or an affiliate were the owners of record of all of the outstanding shares of the Fund.
9. Credit Risk.
The Fund's relatively large investment in countries with limited or developing capital markets may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the Fund's investments and the income they generate, as well as the Fund's ability to repatriate such amounts.
Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Emerging Markets Debt Central Fund
On January 19, 2011, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve 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, considered a broad range of information.
Nature, Extent, and Quality of Services Provided. The Board considered the staffing within the investment adviser, FMR Co., Inc., 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 Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives to act in the best interest of the fund.
Resources Dedicated to Investment Management and Support Services. The Board and the Research Committee 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. The Board noted Fidelity Management & Research Company (FMR)'s continued focus on strengthening the organization and discipline of equity portfolio management and research.
Administrative Services. The Board considered the nature, extent, quality, and cost of advisory and administrative 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. The Board also considered the nature and extent of the investment adviser's supervision of third party service providers, principally custodians and subcustodians.
Investment Performance. The fund is a new fund and therefore had no historical performance for the Board to review at the time it approved the fund's Advisory Contracts. The Board noted that the fund is designed to offer a liquid investment option for other investment companies and accounts managed by FMR or its affiliates and ultimately to enhance the performance of those investment companies and accounts. The Board considered the Investment Advisers' strength in fundamental, research-driven emerging markets bond selection, which the Board is familiar with through its supervision of other Fidelity funds that invest in such securities.
Semiannual Report
Based on its review, the Board concluded that the nature, extent, and quality of the services provided by Fidelity will benefit the fund's shareholders.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered that while the fund does not pay a management fee, FMR, on behalf of the fund, pays a management fee to FMR Co., Inc. The Board also noted that FMR bears all expenses of the fund, except expenses related to the fund's investment activities (primarily custody expenses). Based on its review, the Board concluded that the management fee paid to FMR Co., Inc. by FMR on behalf of the fund and the fund's projected 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 fund is a new fund and therefore no revenue, cost, or profitability data was available for the Board to review in respect of the fund at the time it approved the Advisory Contracts. In connection with its future renewal of the fund's Advisory Contracts, the Board will consider the level of Fidelity's profits in respect of all the Fidelity funds, as well as the profitability of each fund that invests in this fund.
Economies of Scale. The Board concluded that because the fund pays no advisory fees and FMR bears all other expenses of the fund, except expenses related to the fund's investment activities, economies of scale cannot be realized by the fund.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Advisory Contracts, the Board received information explaining that the fund is a centralized vehicle for the management of securities on a pooled basis. The Board also noted that those Fidelity funds investing in the fund will benefit from investing in one centralized fund as the fund may deliver more uniform asset class performance and offer additional opportunities to generate returns and diversify the investing funds' fixed income allocations.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be approved.
Semiannual Report
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Not applicable.
(b) Not applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Hanover Street Trust's Board of Trustees.
Item 11. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Hanover Street Trust's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
Item 12. Exhibits
|
(a) |
(1) |
Not applicable. |
|
(a) |
(2) |
Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
|
(a) |
(3) |
Not applicable. |
|
(b) |
|
Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Hanover Street Trust
|
By: |
/s/Kenneth B. Robins |
|
|
Kenneth B. Robins |
|
|
President and Treasurer |
|
|
|
|
Date: |
August 31, 2011 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
By: |
/s/Kenneth B. Robins |
|
|
Kenneth B. Robins |
|
|
President and Treasurer |
|
|
|
|
Date: |
August 31, 2011 |
|
By: |
/s/Christine Reynolds |
|
|
Christine Reynolds |
|
|
Chief Financial Officer |
|
|
|
|
Date: |
August 31, 2011 |