N-CSRS 1 main.htm

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 811-3587

Fidelity Financial 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:

November 30

 

 

Date of reporting period:

May 31, 2012

Item 1. Reports to Stockholders

Fidelity®

Convertible Securities

Fund

Semiannual Report

May 31, 2012

(Fidelity Cover Art)

Contents

Shareholder Expense Example

(Click Here)

An example of shareholder expenses.

Investment Changes

(Click Here)

A summary of major shifts in the fund's investments over the past six months.

Investments

(Click Here)

A complete list of the fund's investments with their market values.

Financial Statements

(Click Here)

Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.

Notes

(Click Here)

Notes to the financial statements.

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.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2011 to May 31, 2012).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

 

Annualized
Expense Ratio

Beginning
Account Value
December 1, 2011

Ending
Account Value
May 31, 2012

Expenses Paid
During Period*
December 1, 2011
to May 31, 2012

Class A

1.12%

 

 

 

Actual

 

$ 1,000.00

$ 1,047.30

$ 5.73

HypotheticalA

 

$ 1,000.00

$ 1,019.40

$ 5.65

Class T

1.44%

 

 

 

Actual

 

$ 1,000.00

$ 1,045.20

$ 7.36

HypotheticalA

 

$ 1,000.00

$ 1,017.80

$ 7.26

Class B

1.97%

 

 

 

Actual

 

$ 1,000.00

$ 1,042.60

$ 10.06

HypotheticalA

 

$ 1,000.00

$ 1,015.15

$ 9.92

Class C

1.91%

 

 

 

Actual

 

$ 1,000.00

$ 1,043.40

$ 9.76

HypotheticalA

 

$ 1,000.00

$ 1,015.45

$ 9.62

Convertible Securities

.84%

 

 

 

Actual

 

$ 1,000.00

$ 1,049.00

$ 4.30

HypotheticalA

 

$ 1,000.00

$ 1,020.80

$ 4.24

Institutional Class

.89%

 

 

 

Actual

 

$ 1,000.00

$ 1,048.30

$ 4.56

HypotheticalA

 

$ 1,000.00

$ 1,020.55

$ 4.50

A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Top Ten Investments as of May 31, 2012

(excluding cash equivalents)

% of fund's
net assets

% of fund's net assets
6 months ago

General Motors Co. 4.75%

7.1

6.5

Wells Fargo & Co. 7.50%

7.1

6.4

MGM Mirage, Inc. 4.25% 4/15/15

5.4

3.9

Ford Motor Co. 4.25% 11/15/16

5.0

2.8

Alpha Natural Resources, Inc. 2.375% 4/15/15

3.7

2.7

Western Refining, Inc. 5.75% 6/15/14

3.5

1.6

Citigroup, Inc. 7.50%

2.5

2.4

Peabody Energy Corp. 4.75% 12/15/66

2.4

6.2

Bank of America Corp. Series L, 7.25%

2.3

1.8

Nuance Communications, Inc. 2.75% 8/15/27

1.9

1.6

 

40.9

Top Five Market Sectors as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Consumer Discretionary

20.7

17.3

Information Technology

20.0

21.0

Financials

15.6

14.2

Industrials

12.8

10.4

Energy

12.5

20.4

Asset Allocation (% of fund's net assets)

As of May 31, 2012 *

As of November 30, 2011 **

abc436225

Convertible
Securities 91.5%

 

abc436225

Convertible
Securities 87.3%

 

abc436228

Stocks 3.0%

 

abc436228

Stocks 8.3%

 

abc436231

Nonconvertible
Bonds 1.0%

 

abc436231

Nonconvertible
Bonds 0.6%

 

abc436234

Short-Term Investments and Net Other Assets (Liabilities) 4.0%

 

abc436234

Short-Term Investments and Net Other Assets (Liabilities) 3.3%

 

abc436237

Floating Rate Loans 0.5%

 

abc436239

Floating Rate Loans 0.5%

 

* Foreign investments

3.2%

 

** Foreign investments

4.6%

 

abc436241

Semiannual Report

Investments May 31, 2012 (Unaudited)

Showing Percentage of Net Assets

Corporate Bonds - 68.5%

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - 67.5%

CONSUMER DISCRETIONARY - 12.1%

Automobiles - 5.0%

Ford Motor Co. 4.25% 11/15/16

$ 66,000

$ 95,086

Diversified Consumer Services - 0.6%

Stewart Enterprises, Inc. 3.375% 7/15/16 (e)

11,000

10,649

Hotels, Restaurants & Leisure - 5.4%

MGM Mirage, Inc. 4.25% 4/15/15

102,300

101,469

Media - 1.1%

Virgin Media, Inc. 6.5% 11/15/16

8,000

11,166

XM Satellite Radio, Inc. 7% 12/1/14 (e)

7,500

9,769

 

20,935

TOTAL CONSUMER DISCRETIONARY

228,139

CONSUMER STAPLES - 2.0%

Beverages - 0.7%

Molson Coors Brewing Co. 2.5% 7/30/13

14,000

14,273

Food Products - 1.3%

Smithfield Foods, Inc. 4% 6/30/13

22,250

23,899

TOTAL CONSUMER STAPLES

38,172

ENERGY - 12.3%

Energy Equipment & Services - 0.5%

Oil States International, Inc. 2.375% 7/1/25 (e)

4,500

9,416

Oil, Gas & Consumable Fuels - 11.8%

Alpha Natural Resources, Inc. 2.375% 4/15/15

82,000

69,454

Chesapeake Energy Corp. 2.5% 5/15/37

10,000

8,291

Peabody Energy Corp. 4.75% 12/15/66

52,250

45,262

Pioneer Natural Resources Co. 2.875% 1/15/38

20,000

33,075

Western Refining, Inc. 5.75% 6/15/14

34,185

66,105

 

222,187

TOTAL ENERGY

231,603

FINANCIALS - 1.7%

Diversified Financial Services - 1.1%

The NASDAQ Stock Market, Inc. 2.5% 8/15/13

20,000

20,200

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

FINANCIALS - continued

Insurance - 0.6%

Fidelity National Financial, Inc. 4.25% 8/15/18 (e)

$ 10,000

$ 10,938

TOTAL FINANCIALS

31,138

HEALTH CARE - 3.5%

Health Care Equipment & Supplies - 2.0%

Alere, Inc. 3% 5/15/16

31,000

27,745

SonoSite, Inc. 3.75% 7/15/14

7,000

10,264

 

38,009

Health Care Providers & Services - 0.8%

Omnicare, Inc.:

3.25% 12/15/35

2,086

1,992

3.75% 12/15/25

3,610

4,765

3.75% 4/1/42

10,000

9,226

 

15,983

Life Sciences Tools & Services - 0.2%

Charles River Laboratories International, Inc. 2.25% 6/15/13 (e)

4,000

3,995

Pharmaceuticals - 0.5%

Akorn, Inc. 3.5% 6/1/16 (e)

5,000

8,488

TOTAL HEALTH CARE

66,475

INDUSTRIALS - 11.9%

Aerospace & Defense - 1.0%

GenCorp, Inc. 4.0625% 12/31/39

7,830

7,830

Textron, Inc. 4.5% 5/1/13

6,440

11,777

 

19,607

Airlines - 4.1%

Continental Airlines, Inc. 4.5% 1/15/15

9,280

14,059

UAL Corp.:

4.5% 6/30/21 (e)

10,500

10,185

4.5% 6/30/21

5,000

4,850

6% 10/15/29

3,600

10,706

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

INDUSTRIALS - continued

Airlines - continued

US Airways Group, Inc.:

7% 9/30/20 (e)

$ 4,810

$ 4,249

7.25% 5/15/14

11,200

33,338

 

77,387

Commercial Services & Supplies - 1.0%

Metalico, Inc. 7% 4/30/28

20,000

18,200

Construction & Engineering - 0.6%

MasTec, Inc. 4.25% 12/15/14

8,000

10,360

Electrical Equipment - 0.8%

General Cable Corp. 4.5% 11/15/29 (c)

14,800

15,416

Machinery - 3.0%

Greenbrier Companies, Inc.:

2.375% 5/15/26 (e)

5,500

5,390

2.375% 5/15/26

8,000

7,840

3.5% 4/1/18 (e)

2,860

2,356

Terex Corp. 4% 6/1/15

19,590

25,175

Trinity Industries, Inc. 3.875% 6/1/36

15,000

14,831

 

55,592

Marine - 0.5%

Excel Maritime Carriers Ltd. 1.875% 10/15/27 (e)

24,000

10,080

Road & Rail - 0.9%

Hertz Global Holdings, Inc. 5.25% 6/1/14

10,000

17,400

TOTAL INDUSTRIALS

224,042

INFORMATION TECHNOLOGY - 18.8%

Computers & Peripherals - 3.4%

EMC Corp.:

1.75% 12/1/13 (e)

17,000

25,996

1.75% 12/1/13

10,000

15,292

NetApp, Inc. 1.75% 6/1/13

19,800

22,018

 

63,306

Electronic Equipment & Components - 1.5%

Anixter International, Inc. 1% 2/15/13 (e)

4,540

5,056

SYNNEX Corp. 4% 5/15/18

10,000

12,238

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

INFORMATION TECHNOLOGY - continued

Electronic Equipment & Components - continued

Vishay Intertechnology, Inc.:

2.25% 11/15/40 (e)

$ 7,000

$ 6,431

2.25% 5/15/41 (e)

7,000

5,460

 

29,185

Internet Software & Services - 0.7%

VeriSign, Inc. 3.25% 8/15/37

10,000

12,638

IT Services - 0.5%

DST Systems, Inc. 4.125% 8/15/23 (c)

8,612

9,666

Semiconductors & Semiconductor Equipment - 9.1%

Advanced Micro Devices, Inc. 6% 5/1/15

11,916

11,961

Micron Technology, Inc.:

1.5% 8/1/31 (e)

10,000

8,600

1.875% 8/1/31 (e)

30,000

25,763

3.125% 5/1/32 (e)

23,000

20,341

4.25% 10/15/13

6,130

7,337

Novellus Systems, Inc. 2.625% 5/15/41

20,000

24,325

ON Semiconductor Corp.:

1.875% 12/15/25 (e)

3,750

4,066

1.875% 12/15/25

10,000

10,919

2.625% 12/15/26

5,818

5,953

2.625% 12/15/26

29,512

30,803

PMC-Sierra, Inc. 2.25% 10/15/25

10,000

10,119

Xilinx, Inc. 3.125% 3/15/37

10,000

11,500

 

171,687

Software - 3.6%

Nuance Communications, Inc.:

2.75% 8/15/27

28,085

35,212

2.75% 11/1/31 (e)

32,000

33,296

 

68,508

TOTAL INFORMATION TECHNOLOGY

354,990

MATERIALS - 1.5%

Metals & Mining - 1.5%

Alcoa, Inc. 5.25% 3/15/14

5,000

7,375

Goldcorp, Inc. 2% 8/1/14

5,000

5,619

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

MATERIALS - continued

Metals & Mining - continued

Horsehead Holding Corp. 3.8% 7/1/17 (e)

$ 5,000

$ 4,628

Newmont Mining Corp. 1.625% 7/15/17

8,000

10,450

 

28,072

TELECOMMUNICATION SERVICES - 3.7%

Diversified Telecommunication Services - 2.5%

Level 3 Communications, Inc.:

6.5% 10/1/16

19,820

27,562

7% 3/15/15

10,000

12,175

Time Warner Telecom, Inc. 2.375% 4/1/26

6,000

7,695

 

47,432

Wireless Telecommunication Services - 1.2%

Leap Wireless International, Inc. 4.5% 7/15/14

23,000

21,707

TOTAL TELECOMMUNICATION SERVICES

69,139

TOTAL CONVERTIBLE BONDS

1,271,770

Nonconvertible Bonds - 1.0%

CONSUMER DISCRETIONARY - 0.2%

Household Durables - 0.2%

K. Hovnanian Enterprises, Inc.:

7.5% 5/15/16

1,000

603

8.625% 1/15/17

4,000

2,410

 

3,013

MATERIALS - 0.3%

Chemicals - 0.3%

OMNOVA Solutions, Inc. 7.875% 11/1/18

5,960

5,930

TELECOMMUNICATION SERVICES - 0.5%

Diversified Telecommunication Services - 0.5%

Intelsat Luxembourg SA 11.25% 2/4/17

10,000

9,900

TOTAL NONCONVERTIBLE BONDS

18,843

TOTAL CORPORATE BONDS

(Cost $1,275,487)


1,290,613

Common Stocks - 3.0%

Shares

Value (000s)

CONSUMER DISCRETIONARY - 0.1%

Auto Components - 0.1%

BorgWarner, Inc. (a)

27,728

$ 1,989

Hotels, Restaurants & Leisure - 0.0%

Ambassadors International, Inc. (a)(d)

230,377

2

Media - 0.0%

HMH Holdings, Inc. (a)(g)

52,880

1

HMH Holdings, Inc. warrants 3/9/17 (a)(g)

164,823

0*

 

1

TOTAL CONSUMER DISCRETIONARY

1,992

FINANCIALS - 1.3%

Commercial Banks - 0.7%

Huntington Bancshares, Inc.

2,120,500

13,868

Insurance - 0.6%

MetLife, Inc. unit (a)

200,000

11,688

TOTAL FINANCIALS

25,556

INDUSTRIALS - 0.4%

Machinery - 0.4%

Ingersoll-Rand PLC

173,739

7,177

INFORMATION TECHNOLOGY - 1.2%

Electronic Equipment & Components - 0.6%

Viasystems Group, Inc. (a)

549,643

10,559

Semiconductors & Semiconductor Equipment - 0.6%

ON Semiconductor Corp. (a)

1,716,800

11,571

TOTAL INFORMATION TECHNOLOGY

22,130

TOTAL COMMON STOCKS

(Cost $60,000)


56,855

Convertible Preferred Stocks - 24.0%

 

 

 

 

CONSUMER DISCRETIONARY - 8.3%

Automobiles - 7.1%

General Motors Co. 4.75%

3,645,600

133,867

Household Durables - 0.1%

Hovnanian Enterprises, Inc./K. Hovanian Enterprises, Inc. 7.25%

125,000

1,340

Convertible Preferred Stocks - continued

Shares

Value (000s)

CONSUMER DISCRETIONARY - continued

Leisure Equipment & Products - 0.2%

Callaway Golf Co. 7.50%

50,000

$ 4,806

Media - 0.9%

Interpublic Group of Companies, Inc. 5.25%

10,000

9,980

LodgeNet Entertainment Corp. 10.00% (e)

11,118

6,487

 

16,467

TOTAL CONSUMER DISCRETIONARY

156,480

CONSUMER STAPLES - 1.2%

Food Products - 1.2%

Bunge Ltd. 4.875%

237,000

21,859

ENERGY - 0.2%

Oil, Gas & Consumable Fuels - 0.2%

ATP Oil & Gas Corp. Series B, 8.00%

110,000

3,671

FINANCIALS - 12.6%

Commercial Banks - 7.2%

Huntington Bancshares, Inc. 8.50%

2,100

2,434

Wells Fargo & Co. 7.50%

120,550

133,689

 

136,123

Diversified Financial Services - 4.8%

Bank of America Corp. Series L, 7.25%

47,085

43,977

Citigroup, Inc. 7.50%

553,300

46,521

 

90,498

Insurance - 0.3%

Assured Guaranty Ltd. 8.50%

100,000

4,623

Real Estate Investment Trusts - 0.3%

Health Care REIT, Inc. Series I, 6.50%

98,800

5,298

TOTAL FINANCIALS

236,542

HEALTH CARE - 1.7%

Health Care Providers & Services - 1.7%

Tenet Healthcare Corp. 7.00%

40,000

32,650

TOTAL CONVERTIBLE PREFERRED STOCKS

(Cost $525,504)


451,202

Floating Rate Loans - 0.5%

 

Principal Amount (000s)

Value (000s)

INDUSTRIALS - 0.5%

Airlines - 0.5%

US Airways Group, Inc. term loan 2.7398% 3/23/14 (f)

(Cost $9,563)

$ 10,692

$ 10,131

Money Market Funds - 3.4%

Shares

 

Fidelity Cash Central Fund, 0.17% (b)
(Cost $64,358)

64,357,788


64,358

TOTAL INVESTMENT PORTFOLIO - 99.4%

(Cost $1,934,912)

1,873,159

NET OTHER ASSETS (LIABILITIES) - 0.6%

11,752

NET ASSETS - 100%

$ 1,884,911

*Amount represents less than $1,000

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. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.

(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) Affiliated company

(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $231,639,000 or 12.3% of net assets.

(f) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.

(g) 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 $1,000 or 0.0% of net assets.

Additional information on each restricted holding is as follows:

Security

Acquisition Date

Acquisition Cost (000s)

HMH Holdings, Inc.

8/1/08 - 12/31/09

$ 6,902

HMH Holdings, Inc. warrants 3/9/17

3/9/10

$ 48

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
(Amounts in thousands)

Fidelity Cash Central Fund

$ 71

Other Affiliated Issuers

An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:

Affiliate
(Amounts in thousands)

Value, beginning of period

Purchases

Sales Proceeds

Dividend Income

Value,
end of
period

Ambassadors International, Inc.

$ 8

$ -

$ -

$ -

$ 2

Other Information

The following is a summary of the inputs used, as of May 31, 2012, 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 tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:

Description
(Amounts in thousands)

Total

Level 1

Level 2

Level 3

Investments in Securities:

Equities:

Consumer Discretionary

$ 158,472

$ 137,198

$ 21,274

$ -

Consumer Staples

21,859

-

21,859

-

Energy

3,671

-

3,671

-

Financials

262,098

240,489

21,609

-

Health Care

32,650

-

32,650

-

Industrials

7,177

7,177

-

-

Information Technology

22,130

22,130

-

-

Corporate Bonds

1,290,613

-

1,290,613

-

Floating Rate Loans

10,131

-

10,131

-

Money Market Funds

64,358

64,358

-

-

Total Investments in Securities:

$ 1,873,159

$ 471,352

$ 1,401,807

$ -

The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:

(Amounts in thousands)

 

Investments in Securities:

Beginning Balance

$ 8

Total Realized Gain (Loss)

-

Total Unrealized Gain (Loss)

(8)

Cost of Purchases

-

Proceeds of Sales

-

Amortization/Accretion

-

Transfers in to Level 3

-

Transfers out of Level 3

-

Ending Balance

$ -

The change in unrealized gain (loss) for the period attributable to Level 3 securities held at May 31, 2012

$ (8)

The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.

The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited):

AAA,AA,A

2.2%

BBB

11.7%

BB

15.8%

B

16.6%

CCC,CC,C

11.7%

Not Rated

11.0%

Equities

27.0%

Short-Term Investments and Net Other Assets

4.0%

 

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

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

Assets

Investment in securities, at value - See accompanying schedule:

Unaffiliated issuers (cost $1,867,715)

$ 1,808,799

 

Fidelity Central Funds (cost $64,358)

64,358

 

Other affiliated issuers (cost $2,839)

2

 

Total Investments (cost $1,934,912)

 

$ 1,873,159

Receivable for fund shares sold

817

Dividends receivable

5,101

Interest receivable

10,381

Distributions receivable from Fidelity Central Funds

8

Prepaid expenses

1

Other receivables

10

Total assets

1,889,477

 

 

 

Liabilities

Payable for fund shares redeemed

$ 3,208

Accrued management fee

939

Transfer agent fee payable

309

Distribution and service plan fees payable

21

Other affiliated payables

51

Other payables and accrued expenses

38

Total liabilities

4,566

 

 

 

Net Assets

$ 1,884,911

Net Assets consist of:

 

Paid in capital

$ 2,030,313

Undistributed net investment income

18,383

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(102,032)

Net unrealized appreciation (depreciation) on investments

(61,753)

Net Assets

$ 1,884,911

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Calculation of Maximum Offering Price

 Class A:
Net Asset Value and redemption price per share ($33,077 ÷ 1,404.4 shares)

$ 23.55

 

 

 

Maximum offering price per share (100/94.25 of $23.55)

$ 24.99

Class T:
Net Asset Value and redemption price per share ($4,789 ÷ 203.3 shares)

$ 23.56

 

 

 

Maximum offering price per share (100/96.50 of $23.56)

$ 24.41

Class B:
Net Asset Value and offering price per share ($1,079 ÷ 45.9 shares)A

$ 23.51

 

 

 

Class C:
Net Asset Value and offering price per share ($12,928 ÷ 551.3 shares)A

$ 23.45

 

 

 

Convertible Securities:
Net Asset Value, offering price and redemption price per share ($1,811,896 ÷ 76,685.4 shares)

$ 23.63

 

 

 

Institutional Class:
Net Asset Value, offering price and redemption price per share ($21,142 ÷ 895.7 shares)

$ 23.60

A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

 Amounts in thousands

 Six months ended May 31, 2012(Unaudited)

Investment Income

  

  

Dividends

 

$ 15,683

Interest

 

24,372

Income from Fidelity Central Funds

 

71

Total income

 

40,126

 

 

 

Expenses

Management fee
Basic fee

$ 4,721

Performance adjustment

1,601

Transfer agent fees

1,885

Distribution and service plan fees

124

Accounting fees and expenses

312

Custodian fees and expenses

13

Independent trustees' compensation

7

Registration fees

114

Audit

41

Legal

8

Miscellaneous

13

Total expenses before reductions

8,839

Expense reductions

(22)

8,817

Net investment income (loss)

31,309

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

 

 

Unaffiliated issuers

61,170

Foreign currency transactions

63

Total net realized gain (loss)

 

61,233

Change in net unrealized appreciation (depreciation) on:

Investment securities

6,152

Net gain (loss)

67,385

Net increase (decrease) in net assets resulting from operations

$ 98,694

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

 Amounts in thousands

Six months ended May 31, 2012
(Unaudited)

Year ended
November 30, 2011

Increase (Decrease) in Net Assets

 

 

Operations

 

 

Net investment income (loss)

$ 31,309

$ 75,374

Net realized gain (loss)

61,233

137,050

Change in net unrealized appreciation (depreciation)

6,152

(266,196)

Net increase (decrease) in net assets resulting
from operations

98,694

(53,772)

Distributions to shareholders from net investment income

(34,966)

(76,767)

Share transactions - net increase (decrease)

(156,984)

(212,577)

Total increase (decrease) in net assets

(93,256)

(343,116)

 

 

 

Net Assets

Beginning of period

1,978,167

2,321,283

End of period (including undistributed net investment income of $18,383 and undistributed net investment income of $23,529, respectively)

$ 1,884,911

$ 1,978,167

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.85

$ 24.22

$ 21.25

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .34

  .72

  .75

  .58

Net realized and unrealized gain (loss)

  .74

  (1.34)

  3.01

  8.53

Total from investment operations

  1.08

  (.62)

  3.76

  9.11

Distributions from net investment income

  (.38)

  (.75)

  (.79)

  (.65)

Net asset value, end of period

$ 23.55

$ 22.85

$ 24.22

$ 21.25

Total Return B,C,D

  4.73%

  (2.79)%

  18.05%

  72.83%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.12% A

  .88%

  .87%

  1.04%A

Expenses net of fee waivers, if any

  1.12%A

  .88%

  .87%

  1.04%A

Expenses net of all reductions

  1.12%A

  .88%

  .87%

  1.04%A

Net investment income (loss)

  2.77%A

  2.84%

  3.29%

  3.70%A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 33

$ 33

$ 19

$ 6

Portfolio turnover rate G

  30%A

  24%

  28%

  31%

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 Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class T

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.87

$ 24.23

$ 21.25

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .30

  .65

  .69

  .57

Net realized and unrealized gain (loss)

  .74

  (1.34)

  3.01

  8.52

Total from investment operations

  1.04

  (.69)

  3.70

  9.09

Distributions from net investment income

  (.35)

  (.67)

  (.72)

  (.63)

Net asset value, end of period

$ 23.56

$ 22.87

$ 24.23

$ 21.25

Total Return B,C,D

  4.52%

  (3.07)%

  17.74%

  72.60%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.44% A

  1.18%

  1.13%

  1.25% A

Expenses net of fee waivers, if any

  1.44% A

  1.18%

  1.13%

  1.25% A

Expenses net of all reductions

  1.44% A

  1.17%

  1.13%

  1.25% A

Net investment income (loss)

  2.45% A

  2.55%

  3.03%

  3.83% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 5

$ 5

$ 4

$ 2

Portfolio turnover rate G

  30% A

  24%

  28%

  31%

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 Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class B

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.82

$ 24.17

$ 21.22

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .23

  .51

  .56

  .50

Net realized and unrealized gain (loss)

  .74

  (1.34)

  3.01

  8.51

Total from investment operations

  .97

  (.83)

  3.57

  9.01

Distributions from net investment income

  (.28)

  (.52)

  (.62)

  (.58)

Net asset value, end of period

$ 23.51

$ 22.82

$ 24.17

$ 21.22

Total Return B,C,D

  4.26%

  (3.59)%

  17.08%

  71.85%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.97% A

  1.73%

  1.69%

  1.78% A

Expenses net of fee waivers, if any

  1.97% A

  1.73%

  1.69%

  1.78% A

Expenses net of all reductions

  1.97% A

  1.73%

  1.69%

  1.78% A

Net investment income (loss)

  1.92% A

  2.00%

  2.47%

  3.41% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 1

$ 1

$ 1

$ 1

Portfolio turnover rate G

  30% A

  24%

  28%

  31%

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 Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class C

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.75

$ 24.14

$ 21.20

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .24

  .51

  .56

  .47

Net realized and unrealized gain (loss)

  .75

  (1.33)

  3.01

  8.53

Total from investment operations

  .99

  (.82)

  3.57

  9.00

Distributions from net investment income

  (.29)

  (.57)

  (.63)

  (.59)

Net asset value, end of period

$ 23.45

$ 22.75

$ 24.14

$ 21.20

Total Return B,C,D

  4.34%

  (3.57)%

  17.13%

  71.81%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.91% A

  1.67%

  1.66%

  1.80% A

Expenses net of fee waivers, if any

  1.91% A

  1.67%

  1.66%

  1.80% A

Expenses net of all reductions

  1.91% A

  1.67%

  1.66%

  1.80% A

Net investment income (loss)

  1.98% A

  2.06%

  2.50%

  3.17% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 13

$ 13

$ 5

$ 2

Portfolio turnover rate G

  30% A

  24%

  28%

  31%

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 Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Convertible Securities

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008

2007

Selected Per-Share Data

 

 

 

 

 

 

Net asset value, beginning of period

$ 22.92

$ 24.29

$ 21.30

$ 13.55

$ 28.71

$ 25.21

Income from Investment Operations

 

 

 

 

 

 

Net investment income (loss) D

  .37

  .79

  .81

  .96

  .76

  .59

Net realized and unrealized gain (loss)

  .75

  (1.35)

  3.02

  7.78

  (14.43)

  3.43

Total from investment operations

  1.12

  (.56)

  3.83

  8.74

  (13.67)

  4.02

Distributions from net investment income

  (.41)

  (.81)

  (.84)

  (.99)

  (.64)

  (.50)

Distributions from net realized gain

  -

  -

  -

  -

  (.85)

  (.02)

Total distributions

  (.41)

  (.81)

  (.84)

  (.99)

  (1.49)

  (.52)

Net asset value, end of period

$ 23.63

$ 22.92

$ 24.29

$ 21.30

$ 13.55

$ 28.71

Total Return B,C

  4.90%

  (2.54)%

  18.37%

  67.65%

  (50.09)%

  16.02%

Ratios to Average Net Assets E,G

 

 

 

 

 

Expenses before reductions

  .84% A

  .61%

  .59%

  .70%

  .78%

  .79%

Expenses net of fee waivers, if any

  .84% A

  .61%

  .59%

  .69%

  .78%

  .79%

Expenses net of all reductions

  .84% A

  .61%

  .59%

  .69%

  .78%

  .79%

Net investment income (loss)

  3.05% A

  3.12%

  3.57%

  5.59%

  3.06%

  2.11%

Supplemental Data

 

 

 

 

 

 

Net assets, end of period (in millions)

$ 1,812

$ 1,904

$ 2,287

$ 2,340

$ 1,439

$ 2,919

Portfolio turnover rate F

  30% A

  24%

  28%

  31%

  39%

  24%

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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Institutional Class

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009 G

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.90

$ 24.27

$ 21.29

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) D

  .37

  .77

  .80

  .63

Net realized and unrealized gain (loss)

  .74

  (1.33)

  3.02

  8.54

Total from investment operations

  1.11

  (.56)

  3.82

  9.17

Distributions from net investment income

  (.41)

  (.81)

  (.84)

  (.67)

Total distributions

  (.41)

  (.81)

  (.84)

  (.67)

Net asset value, end of period

$ 23.60

$ 22.90

$ 24.27

$ 21.29

Total Return B,C

  4.83%

  (2.55)%

  18.34%

  73.31%

Ratios to Average Net Assets E,H

 

 

 

 

Expenses before reductions

  .89% A

  .65%

  .60%

  .73% A

Expenses net of fee waivers, if any

  .89% A

  .65%

  .60%

  .73% A

Expenses net of all reductions

  .88% A

  .65%

  .60%

  .73% A

Net investment income (loss)

  3.01% A

  3.07%

  3.56%

  4.19% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 21

$ 23

$ 6

$ 3

Portfolio turnover rate F

  30% A

  24%

  28%

  31%

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 February 19, 2009 (commencement of sale of shares) to November 30, 2009.

H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended May 31, 2012 (Unaudited)

(Amounts in thousands except percentages)

1. Organization.

Fidelity® Convertible Securities Fund (the Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Convertible Securities and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Effective after the close of business on September 1, 2010, Class B shares were closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class.

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 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 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:

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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 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 May 31, 2012, as well as a roll forward of Level 3 securities, 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:

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. 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 or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when significant market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities are used and are categorized as Level 2 in the hierarchy in these circumstances. Utilizing these techniques may result in transfers between Level 1 and Level 2. For restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are categorized as Level 3 in the hierarchy.

Semiannual Report

3. Significant Accounting Policies - continued

Security Valuation - continued

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 and floating rate loans, 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. 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. 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.

Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day and are categorized as Level 1 in the hierarchy.

New Accounting Pronouncements. 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 is effective during interim and annual periods beginning after December 15, 2011 and will result in additional disclosure for transfers between levels as well as expanded disclosure for securities categorized as Level 3 under the fair value hierarchy.

In December 2011, the Financial Accounting Standards Board issued Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update creates new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for interim and annual reporting periods beginning on or after January 1, 2013. Management is currently evaluating the impact of the update's adoption on the Fund's financial statement disclosures.

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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Foreign Currency - continued

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. 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 under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. A fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.

Semiannual Report

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

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 declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from 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.

Book-tax differences are primarily due to market discount, equity-debt classifications, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:

Gross unrealized appreciation

$ 176,373

Gross unrealized depreciation

(229,338)

Net unrealized appreciation (depreciation) on securities and other investments

$ (52,965)

 

 

Tax cost

$ 1,926,124

Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. At November 30, 2011, capital loss carryforwards were as follows:

Fiscal year of expiration

 

2017

$ (157,179)

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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

4. Operating Policies - continued

Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation, or may be made directly to a borrower. The Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these loans.

5. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities, aggregated $289,105 and $460,313, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .15% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Convertible Securities as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .61% of the Fund's average net assets.

Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:

Semiannual Report

6. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan Fees - continued

 

Distribution
Fee

Service
Fee

Total Fees

Retained
by FDC

Class A

-%

.25%

$ 42

$ 1

Class T

.25%

.25%

12

-

Class B

.75%

.25%

6

4

Class C

.75%

.25%

64

28

 

 

 

$ 124

$ 33

Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B, 1.00% for Class C, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

 

Retained
by FDC

Class A

$ 14

Class T

1

Class B*

2

Class C*

2

 

$ 19

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

6. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees - continued

 

Amount

% of
Average
Net Assets*

Class A

$ 35

.21

Class T

7

.28

Class B

2

.31

Class C

16

.25

Convertible Securities

1,801

.18

Institutional Class

24

.22

 

$ 1,885

 

* Annualized

Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for each month.

Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $7 for the period.

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR or an affiliate in a $4.25 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 $3 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. 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 $22 for the period. 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 one hundred eighty-six dollars.

Semiannual Report

9. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
May 31,
2012

Year ended
November 30,
2011

From net investment income

 

 

Class A

$ 541

$ 964

Class T

67

145

Class B

14

26

Class C

157

253

Convertible Securities

33,816

74,771

Institutional Class

371

608

Total

$ 34,966

$ 76,767

10. Share Transactions.

Transactions for each class of shares were as follows:

 

Shares

Dollars

Six months ended May 31,
2012

Year ended
November 30, 2011

Six months ended May 31,
2012

Year ended
November 30, 2011

Class A

 

 

 

 

Shares sold

350

1,463

$ 8,642

$ 38,298

Reinvestment of distributions

16

28

380

713

Shares redeemed

(403)

(828)

(9,630)

(20,357)

Net increase (decrease)

(37)

663

$ (608)

$ 18,654

Class T

 

 

 

 

Shares sold

42

206

$ 1,045

$ 5,378

Reinvestment of distributions

3

6

62

140

Shares redeemed

(39)

(160)

(955)

(3,916)

Net increase (decrease)

6

52

$ 152

$ 1,602

Class B

 

 

 

 

Shares sold

6

21

$ 144

$ 566

Reinvestment of distributions

-

1

10

18

Shares redeemed

(9)

(21)

(228)

(527)

Net increase (decrease)

(3)

1

$ (74)

$ 57

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

10. Share Transactions - continued

 

Shares

Dollars

Six months ended May 31,
2012

Year ended
November 30, 2011

Six months ended May 31,
2012

Year ended
November 30, 2011

Class C

 

 

 

 

Shares sold

128

542

$ 3,167

$ 14,072

Reinvestment of distributions

5

8

111

187

Shares redeemed

(138)

(204)

(3,292)

(4,875)

Net increase (decrease)

(5)

346

$ (14)

$ 9,384

Convertible Securities

 

 

 

 

Shares sold

6,901

20,504

$ 170,727

$ 533,363

Reinvestment of distributions

1,244

2,642

29,629

66,219

Shares redeemed

(14,513)

(34,235)

(354,398)

(862,374)

Net increase (decrease)

(6,368)

(11,089)

$ (154,042)

$ (262,792)

Institutional Class

 

 

 

 

Shares sold

452

1,454

$ 11,154

$ 37,674

Reinvestment of distributions

10

16

233

391

Shares redeemed

(570)

(719)

(13,785)

(17,547)

Net increase (decrease)

(108)

751

$ (2,398)

$ 20,518

11. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research (Hong Kong) Limited

Fidelity Management & Research (Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Smithfield, RI

Transfer and Service Agents

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

Citibank, N.A.

New York, NY

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)

TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

Fidelity Automated Service
Telephone (FAST®) abc436243 1-800-544-5555

abc436243 Automated line for quickest service 

CVS-USAN-0712
1.786810.109

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®

Convertible Securities

Fund - Class A, Class T, Class B
and Class C

Semiannual Report

May 31, 2012

(Fidelity Cover Art)

Class A, Class T, Class B, and Class C are classes of Fidelity® Convertible Securities Fund

Contents

Shareholder Expense Example

(Click Here)

An example of shareholder expenses.

Investment Changes

(Click Here)

A summary of major shifts in the fund's investments over the past six months.

Investments

(Click Here)

A complete list of the fund's investments with their market values.

Financial Statements

(Click Here)

Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.

Notes

(Click Here)

Notes to the financial statements.

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 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2011 to May 31, 2012).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

 

Annualized
Expense Ratio

Beginning
Account Value
December 1, 2011

Ending
Account Value
May 31, 2012

Expenses Paid
During Period*
December 1, 2011
to May 31, 2012

Class A

1.12%

 

 

 

Actual

 

$ 1,000.00

$ 1,047.30

$ 5.73

HypotheticalA

 

$ 1,000.00

$ 1,019.40

$ 5.65

Class T

1.44%

 

 

 

Actual

 

$ 1,000.00

$ 1,045.20

$ 7.36

HypotheticalA

 

$ 1,000.00

$ 1,017.80

$ 7.26

Class B

1.97%

 

 

 

Actual

 

$ 1,000.00

$ 1,042.60

$ 10.06

HypotheticalA

 

$ 1,000.00

$ 1,015.15

$ 9.92

Class C

1.91%

 

 

 

Actual

 

$ 1,000.00

$ 1,043.40

$ 9.76

HypotheticalA

 

$ 1,000.00

$ 1,015.45

$ 9.62

Convertible Securities

.84%

 

 

 

Actual

 

$ 1,000.00

$ 1,049.00

$ 4.30

HypotheticalA

 

$ 1,000.00

$ 1,020.80

$ 4.24

Institutional Class

.89%

 

 

 

Actual

 

$ 1,000.00

$ 1,048.30

$ 4.56

HypotheticalA

 

$ 1,000.00

$ 1,020.55

$ 4.50

A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Top Ten Investments as of May 31, 2012

(excluding cash equivalents)

% of fund's
net assets

% of fund's net assets
6 months ago

General Motors Co. 4.75%

7.1

6.5

Wells Fargo & Co. 7.50%

7.1

6.4

MGM Mirage, Inc. 4.25% 4/15/15

5.4

3.9

Ford Motor Co. 4.25% 11/15/16

5.0

2.8

Alpha Natural Resources, Inc. 2.375% 4/15/15

3.7

2.7

Western Refining, Inc. 5.75% 6/15/14

3.5

1.6

Citigroup, Inc. 7.50%

2.5

2.4

Peabody Energy Corp. 4.75% 12/15/66

2.4

6.2

Bank of America Corp. Series L, 7.25%

2.3

1.8

Nuance Communications, Inc. 2.75% 8/15/27

1.9

1.6

 

40.9

Top Five Market Sectors as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Consumer Discretionary

20.7

17.3

Information Technology

20.0

21.0

Financials

15.6

14.2

Industrials

12.8

10.4

Energy

12.5

20.4

Asset Allocation (% of fund's net assets)

As of May 31, 2012 *

As of November 30, 2011 **

abc436225

Convertible
Securities 91.5%

 

abc436225

Convertible
Securities 87.3%

 

abc436228

Stocks 3.0%

 

abc436228

Stocks 8.3%

 

abc436231

Nonconvertible
Bonds 1.0%

 

abc436231

Nonconvertible
Bonds 0.6%

 

abc436234

Short-Term Investments and Net Other Assets (Liabilities) 4.0%

 

abc436234

Short-Term Investments and Net Other Assets (Liabilities) 3.3%

 

abc436239

Floating Rate Loans 0.5%

 

abc436239

Floating Rate Loans 0.5%

 

* Foreign investments

3.2%

 

** Foreign investments

4.6%

 

abc436261

Semiannual Report

Investments May 31, 2012 (Unaudited)

Showing Percentage of Net Assets

Corporate Bonds - 68.5%

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - 67.5%

CONSUMER DISCRETIONARY - 12.1%

Automobiles - 5.0%

Ford Motor Co. 4.25% 11/15/16

$ 66,000

$ 95,086

Diversified Consumer Services - 0.6%

Stewart Enterprises, Inc. 3.375% 7/15/16 (e)

11,000

10,649

Hotels, Restaurants & Leisure - 5.4%

MGM Mirage, Inc. 4.25% 4/15/15

102,300

101,469

Media - 1.1%

Virgin Media, Inc. 6.5% 11/15/16

8,000

11,166

XM Satellite Radio, Inc. 7% 12/1/14 (e)

7,500

9,769

 

20,935

TOTAL CONSUMER DISCRETIONARY

228,139

CONSUMER STAPLES - 2.0%

Beverages - 0.7%

Molson Coors Brewing Co. 2.5% 7/30/13

14,000

14,273

Food Products - 1.3%

Smithfield Foods, Inc. 4% 6/30/13

22,250

23,899

TOTAL CONSUMER STAPLES

38,172

ENERGY - 12.3%

Energy Equipment & Services - 0.5%

Oil States International, Inc. 2.375% 7/1/25 (e)

4,500

9,416

Oil, Gas & Consumable Fuels - 11.8%

Alpha Natural Resources, Inc. 2.375% 4/15/15

82,000

69,454

Chesapeake Energy Corp. 2.5% 5/15/37

10,000

8,291

Peabody Energy Corp. 4.75% 12/15/66

52,250

45,262

Pioneer Natural Resources Co. 2.875% 1/15/38

20,000

33,075

Western Refining, Inc. 5.75% 6/15/14

34,185

66,105

 

222,187

TOTAL ENERGY

231,603

FINANCIALS - 1.7%

Diversified Financial Services - 1.1%

The NASDAQ Stock Market, Inc. 2.5% 8/15/13

20,000

20,200

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

FINANCIALS - continued

Insurance - 0.6%

Fidelity National Financial, Inc. 4.25% 8/15/18 (e)

$ 10,000

$ 10,938

TOTAL FINANCIALS

31,138

HEALTH CARE - 3.5%

Health Care Equipment & Supplies - 2.0%

Alere, Inc. 3% 5/15/16

31,000

27,745

SonoSite, Inc. 3.75% 7/15/14

7,000

10,264

 

38,009

Health Care Providers & Services - 0.8%

Omnicare, Inc.:

3.25% 12/15/35

2,086

1,992

3.75% 12/15/25

3,610

4,765

3.75% 4/1/42

10,000

9,226

 

15,983

Life Sciences Tools & Services - 0.2%

Charles River Laboratories International, Inc. 2.25% 6/15/13 (e)

4,000

3,995

Pharmaceuticals - 0.5%

Akorn, Inc. 3.5% 6/1/16 (e)

5,000

8,488

TOTAL HEALTH CARE

66,475

INDUSTRIALS - 11.9%

Aerospace & Defense - 1.0%

GenCorp, Inc. 4.0625% 12/31/39

7,830

7,830

Textron, Inc. 4.5% 5/1/13

6,440

11,777

 

19,607

Airlines - 4.1%

Continental Airlines, Inc. 4.5% 1/15/15

9,280

14,059

UAL Corp.:

4.5% 6/30/21 (e)

10,500

10,185

4.5% 6/30/21

5,000

4,850

6% 10/15/29

3,600

10,706

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

INDUSTRIALS - continued

Airlines - continued

US Airways Group, Inc.:

7% 9/30/20 (e)

$ 4,810

$ 4,249

7.25% 5/15/14

11,200

33,338

 

77,387

Commercial Services & Supplies - 1.0%

Metalico, Inc. 7% 4/30/28

20,000

18,200

Construction & Engineering - 0.6%

MasTec, Inc. 4.25% 12/15/14

8,000

10,360

Electrical Equipment - 0.8%

General Cable Corp. 4.5% 11/15/29 (c)

14,800

15,416

Machinery - 3.0%

Greenbrier Companies, Inc.:

2.375% 5/15/26 (e)

5,500

5,390

2.375% 5/15/26

8,000

7,840

3.5% 4/1/18 (e)

2,860

2,356

Terex Corp. 4% 6/1/15

19,590

25,175

Trinity Industries, Inc. 3.875% 6/1/36

15,000

14,831

 

55,592

Marine - 0.5%

Excel Maritime Carriers Ltd. 1.875% 10/15/27 (e)

24,000

10,080

Road & Rail - 0.9%

Hertz Global Holdings, Inc. 5.25% 6/1/14

10,000

17,400

TOTAL INDUSTRIALS

224,042

INFORMATION TECHNOLOGY - 18.8%

Computers & Peripherals - 3.4%

EMC Corp.:

1.75% 12/1/13 (e)

17,000

25,996

1.75% 12/1/13

10,000

15,292

NetApp, Inc. 1.75% 6/1/13

19,800

22,018

 

63,306

Electronic Equipment & Components - 1.5%

Anixter International, Inc. 1% 2/15/13 (e)

4,540

5,056

SYNNEX Corp. 4% 5/15/18

10,000

12,238

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

INFORMATION TECHNOLOGY - continued

Electronic Equipment & Components - continued

Vishay Intertechnology, Inc.:

2.25% 11/15/40 (e)

$ 7,000

$ 6,431

2.25% 5/15/41 (e)

7,000

5,460

 

29,185

Internet Software & Services - 0.7%

VeriSign, Inc. 3.25% 8/15/37

10,000

12,638

IT Services - 0.5%

DST Systems, Inc. 4.125% 8/15/23 (c)

8,612

9,666

Semiconductors & Semiconductor Equipment - 9.1%

Advanced Micro Devices, Inc. 6% 5/1/15

11,916

11,961

Micron Technology, Inc.:

1.5% 8/1/31 (e)

10,000

8,600

1.875% 8/1/31 (e)

30,000

25,763

3.125% 5/1/32 (e)

23,000

20,341

4.25% 10/15/13

6,130

7,337

Novellus Systems, Inc. 2.625% 5/15/41

20,000

24,325

ON Semiconductor Corp.:

1.875% 12/15/25 (e)

3,750

4,066

1.875% 12/15/25

10,000

10,919

2.625% 12/15/26

5,818

5,953

2.625% 12/15/26

29,512

30,803

PMC-Sierra, Inc. 2.25% 10/15/25

10,000

10,119

Xilinx, Inc. 3.125% 3/15/37

10,000

11,500

 

171,687

Software - 3.6%

Nuance Communications, Inc.:

2.75% 8/15/27

28,085

35,212

2.75% 11/1/31 (e)

32,000

33,296

 

68,508

TOTAL INFORMATION TECHNOLOGY

354,990

MATERIALS - 1.5%

Metals & Mining - 1.5%

Alcoa, Inc. 5.25% 3/15/14

5,000

7,375

Goldcorp, Inc. 2% 8/1/14

5,000

5,619

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

MATERIALS - continued

Metals & Mining - continued

Horsehead Holding Corp. 3.8% 7/1/17 (e)

$ 5,000

$ 4,628

Newmont Mining Corp. 1.625% 7/15/17

8,000

10,450

 

28,072

TELECOMMUNICATION SERVICES - 3.7%

Diversified Telecommunication Services - 2.5%

Level 3 Communications, Inc.:

6.5% 10/1/16

19,820

27,562

7% 3/15/15

10,000

12,175

Time Warner Telecom, Inc. 2.375% 4/1/26

6,000

7,695

 

47,432

Wireless Telecommunication Services - 1.2%

Leap Wireless International, Inc. 4.5% 7/15/14

23,000

21,707

TOTAL TELECOMMUNICATION SERVICES

69,139

TOTAL CONVERTIBLE BONDS

1,271,770

Nonconvertible Bonds - 1.0%

CONSUMER DISCRETIONARY - 0.2%

Household Durables - 0.2%

K. Hovnanian Enterprises, Inc.:

7.5% 5/15/16

1,000

603

8.625% 1/15/17

4,000

2,410

 

3,013

MATERIALS - 0.3%

Chemicals - 0.3%

OMNOVA Solutions, Inc. 7.875% 11/1/18

5,960

5,930

TELECOMMUNICATION SERVICES - 0.5%

Diversified Telecommunication Services - 0.5%

Intelsat Luxembourg SA 11.25% 2/4/17

10,000

9,900

TOTAL NONCONVERTIBLE BONDS

18,843

TOTAL CORPORATE BONDS

(Cost $1,275,487)


1,290,613

Common Stocks - 3.0%

Shares

Value (000s)

CONSUMER DISCRETIONARY - 0.1%

Auto Components - 0.1%

BorgWarner, Inc. (a)

27,728

$ 1,989

Hotels, Restaurants & Leisure - 0.0%

Ambassadors International, Inc. (a)(d)

230,377

2

Media - 0.0%

HMH Holdings, Inc. (a)(g)

52,880

1

HMH Holdings, Inc. warrants 3/9/17 (a)(g)

164,823

0*

 

1

TOTAL CONSUMER DISCRETIONARY

1,992

FINANCIALS - 1.3%

Commercial Banks - 0.7%

Huntington Bancshares, Inc.

2,120,500

13,868

Insurance - 0.6%

MetLife, Inc. unit (a)

200,000

11,688

TOTAL FINANCIALS

25,556

INDUSTRIALS - 0.4%

Machinery - 0.4%

Ingersoll-Rand PLC

173,739

7,177

INFORMATION TECHNOLOGY - 1.2%

Electronic Equipment & Components - 0.6%

Viasystems Group, Inc. (a)

549,643

10,559

Semiconductors & Semiconductor Equipment - 0.6%

ON Semiconductor Corp. (a)

1,716,800

11,571

TOTAL INFORMATION TECHNOLOGY

22,130

TOTAL COMMON STOCKS

(Cost $60,000)


56,855

Convertible Preferred Stocks - 24.0%

 

 

 

 

CONSUMER DISCRETIONARY - 8.3%

Automobiles - 7.1%

General Motors Co. 4.75%

3,645,600

133,867

Household Durables - 0.1%

Hovnanian Enterprises, Inc./K. Hovanian Enterprises, Inc. 7.25%

125,000

1,340

Convertible Preferred Stocks - continued

Shares

Value (000s)

CONSUMER DISCRETIONARY - continued

Leisure Equipment & Products - 0.2%

Callaway Golf Co. 7.50%

50,000

$ 4,806

Media - 0.9%

Interpublic Group of Companies, Inc. 5.25%

10,000

9,980

LodgeNet Entertainment Corp. 10.00% (e)

11,118

6,487

 

16,467

TOTAL CONSUMER DISCRETIONARY

156,480

CONSUMER STAPLES - 1.2%

Food Products - 1.2%

Bunge Ltd. 4.875%

237,000

21,859

ENERGY - 0.2%

Oil, Gas & Consumable Fuels - 0.2%

ATP Oil & Gas Corp. Series B, 8.00%

110,000

3,671

FINANCIALS - 12.6%

Commercial Banks - 7.2%

Huntington Bancshares, Inc. 8.50%

2,100

2,434

Wells Fargo & Co. 7.50%

120,550

133,689

 

136,123

Diversified Financial Services - 4.8%

Bank of America Corp. Series L, 7.25%

47,085

43,977

Citigroup, Inc. 7.50%

553,300

46,521

 

90,498

Insurance - 0.3%

Assured Guaranty Ltd. 8.50%

100,000

4,623

Real Estate Investment Trusts - 0.3%

Health Care REIT, Inc. Series I, 6.50%

98,800

5,298

TOTAL FINANCIALS

236,542

HEALTH CARE - 1.7%

Health Care Providers & Services - 1.7%

Tenet Healthcare Corp. 7.00%

40,000

32,650

TOTAL CONVERTIBLE PREFERRED STOCKS

(Cost $525,504)


451,202

Floating Rate Loans - 0.5%

 

Principal Amount (000s)

Value (000s)

INDUSTRIALS - 0.5%

Airlines - 0.5%

US Airways Group, Inc. term loan 2.7398% 3/23/14 (f)

(Cost $9,563)

$ 10,692

$ 10,131

Money Market Funds - 3.4%

Shares

 

Fidelity Cash Central Fund, 0.17% (b)
(Cost $64,358)

64,357,788


64,358

TOTAL INVESTMENT PORTFOLIO - 99.4%

(Cost $1,934,912)

1,873,159

NET OTHER ASSETS (LIABILITIES) - 0.6%

11,752

NET ASSETS - 100%

$ 1,884,911

*Amount represents less than $1,000

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. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.

(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) Affiliated company

(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $231,639,000 or 12.3% of net assets.

(f) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.

(g) 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 $1,000 or 0.0% of net assets.

Additional information on each restricted holding is as follows:

Security

Acquisition Date

Acquisition Cost (000s)

HMH Holdings, Inc.

8/1/08 - 12/31/09

$ 6,902

HMH Holdings, Inc. warrants 3/9/17

3/9/10

$ 48

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
(Amounts in thousands)

Fidelity Cash Central Fund

$ 71

Other Affiliated Issuers

An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:

Affiliate
(Amounts in thousands)

Value, beginning of period

Purchases

Sales Proceeds

Dividend Income

Value,
end of
period

Ambassadors International, Inc.

$ 8

$ -

$ -

$ -

$ 2

Other Information

The following is a summary of the inputs used, as of May 31, 2012, 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 tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:

Description
(Amounts in thousands)

Total

Level 1

Level 2

Level 3

Investments in Securities:

Equities:

Consumer Discretionary

$ 158,472

$ 137,198

$ 21,274

$ -

Consumer Staples

21,859

-

21,859

-

Energy

3,671

-

3,671

-

Financials

262,098

240,489

21,609

-

Health Care

32,650

-

32,650

-

Industrials

7,177

7,177

-

-

Information Technology

22,130

22,130

-

-

Corporate Bonds

1,290,613

-

1,290,613

-

Floating Rate Loans

10,131

-

10,131

-

Money Market Funds

64,358

64,358

-

-

Total Investments in Securities:

$ 1,873,159

$ 471,352

$ 1,401,807

$ -

The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:

(Amounts in thousands)

 

Investments in Securities:

Beginning Balance

$ 8

Total Realized Gain (Loss)

-

Total Unrealized Gain (Loss)

(8)

Cost of Purchases

-

Proceeds of Sales

-

Amortization/Accretion

-

Transfers in to Level 3

-

Transfers out of Level 3

-

Ending Balance

$ -

The change in unrealized gain (loss) for the period attributable to Level 3 securities held at May 31, 2012

$ (8)

The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.

The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited):

AAA,AA,A

2.2%

BBB

11.7%

BB

15.8%

B

16.6%

CCC,CC,C

11.7%

Not Rated

11.0%

Equities

27.0%

Short-Term Investments and Net Other Assets

4.0%

 

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

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

Assets

Investment in securities, at value - See accompanying schedule:

Unaffiliated issuers (cost $1,867,715)

$ 1,808,799

 

Fidelity Central Funds (cost $64,358)

64,358

 

Other affiliated issuers (cost $2,839)

2

 

Total Investments (cost $1,934,912)

 

$ 1,873,159

Receivable for fund shares sold

817

Dividends receivable

5,101

Interest receivable

10,381

Distributions receivable from Fidelity Central Funds

8

Prepaid expenses

1

Other receivables

10

Total assets

1,889,477

 

 

 

Liabilities

Payable for fund shares redeemed

$ 3,208

Accrued management fee

939

Transfer agent fee payable

309

Distribution and service plan fees payable

21

Other affiliated payables

51

Other payables and accrued expenses

38

Total liabilities

4,566

 

 

 

Net Assets

$ 1,884,911

Net Assets consist of:

 

Paid in capital

$ 2,030,313

Undistributed net investment income

18,383

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(102,032)

Net unrealized appreciation (depreciation) on investments

(61,753)

Net Assets

$ 1,884,911

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Calculation of Maximum Offering Price

 Class A:
Net Asset Value and redemption price per share ($33,077 ÷ 1,404.4 shares)

$ 23.55

 

 

 

Maximum offering price per share (100/94.25 of $23.55)

$ 24.99

Class T:
Net Asset Value and redemption price per share ($4,789 ÷ 203.3 shares)

$ 23.56

 

 

 

Maximum offering price per share (100/96.50 of $23.56)

$ 24.41

Class B:
Net Asset Value and offering price per share ($1,079 ÷ 45.9 shares)A

$ 23.51

 

 

 

Class C:
Net Asset Value and offering price per share ($12,928 ÷ 551.3 shares)A

$ 23.45

 

 

 

Convertible Securities:
Net Asset Value, offering price and redemption price per share ($1,811,896 ÷ 76,685.4 shares)

$ 23.63

 

 

 

Institutional Class:
Net Asset Value, offering price and redemption price per share ($21,142 ÷ 895.7 shares)

$ 23.60

A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

 Amounts in thousands

 Six months ended May 31, 2012(Unaudited)

Investment Income

  

  

Dividends

 

$ 15,683

Interest

 

24,372

Income from Fidelity Central Funds

 

71

Total income

 

40,126

 

 

 

Expenses

Management fee
Basic fee

$ 4,721

Performance adjustment

1,601

Transfer agent fees

1,885

Distribution and service plan fees

124

Accounting fees and expenses

312

Custodian fees and expenses

13

Independent trustees' compensation

7

Registration fees

114

Audit

41

Legal

8

Miscellaneous

13

Total expenses before reductions

8,839

Expense reductions

(22)

8,817

Net investment income (loss)

31,309

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

 

 

Unaffiliated issuers

61,170

Foreign currency transactions

63

Total net realized gain (loss)

 

61,233

Change in net unrealized appreciation (depreciation) on:

Investment securities

6,152

Net gain (loss)

67,385

Net increase (decrease) in net assets resulting from operations

$ 98,694

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

 Amounts in thousands

Six months ended May 31, 2012
(Unaudited)

Year ended
November 30, 2011

Increase (Decrease) in Net Assets

 

 

Operations

 

 

Net investment income (loss)

$ 31,309

$ 75,374

Net realized gain (loss)

61,233

137,050

Change in net unrealized appreciation (depreciation)

6,152

(266,196)

Net increase (decrease) in net assets resulting
from operations

98,694

(53,772)

Distributions to shareholders from net investment income

(34,966)

(76,767)

Share transactions - net increase (decrease)

(156,984)

(212,577)

Total increase (decrease) in net assets

(93,256)

(343,116)

 

 

 

Net Assets

Beginning of period

1,978,167

2,321,283

End of period (including undistributed net investment income of $18,383 and undistributed net investment income of $23,529, respectively)

$ 1,884,911

$ 1,978,167

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.85

$ 24.22

$ 21.25

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .34

  .72

  .75

  .58

Net realized and unrealized gain (loss)

  .74

  (1.34)

  3.01

  8.53

Total from investment operations

  1.08

  (.62)

  3.76

  9.11

Distributions from net investment income

  (.38)

  (.75)

  (.79)

  (.65)

Net asset value, end of period

$ 23.55

$ 22.85

$ 24.22

$ 21.25

Total Return B,C,D

  4.73%

  (2.79)%

  18.05%

  72.83%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.12% A

  .88%

  .87%

  1.04%A

Expenses net of fee waivers, if any

  1.12%A

  .88%

  .87%

  1.04%A

Expenses net of all reductions

  1.12%A

  .88%

  .87%

  1.04%A

Net investment income (loss)

  2.77%A

  2.84%

  3.29%

  3.70%A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 33

$ 33

$ 19

$ 6

Portfolio turnover rate G

  30%A

  24%

  28%

  31%

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 Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class T

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.87

$ 24.23

$ 21.25

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .30

  .65

  .69

  .57

Net realized and unrealized gain (loss)

  .74

  (1.34)

  3.01

  8.52

Total from investment operations

  1.04

  (.69)

  3.70

  9.09

Distributions from net investment income

  (.35)

  (.67)

  (.72)

  (.63)

Net asset value, end of period

$ 23.56

$ 22.87

$ 24.23

$ 21.25

Total Return B,C,D

  4.52%

  (3.07)%

  17.74%

  72.60%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.44% A

  1.18%

  1.13%

  1.25% A

Expenses net of fee waivers, if any

  1.44% A

  1.18%

  1.13%

  1.25% A

Expenses net of all reductions

  1.44% A

  1.17%

  1.13%

  1.25% A

Net investment income (loss)

  2.45% A

  2.55%

  3.03%

  3.83% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 5

$ 5

$ 4

$ 2

Portfolio turnover rate G

  30% A

  24%

  28%

  31%

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 Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class B

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.82

$ 24.17

$ 21.22

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .23

  .51

  .56

  .50

Net realized and unrealized gain (loss)

  .74

  (1.34)

  3.01

  8.51

Total from investment operations

  .97

  (.83)

  3.57

  9.01

Distributions from net investment income

  (.28)

  (.52)

  (.62)

  (.58)

Net asset value, end of period

$ 23.51

$ 22.82

$ 24.17

$ 21.22

Total Return B,C,D

  4.26%

  (3.59)%

  17.08%

  71.85%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.97% A

  1.73%

  1.69%

  1.78% A

Expenses net of fee waivers, if any

  1.97% A

  1.73%

  1.69%

  1.78% A

Expenses net of all reductions

  1.97% A

  1.73%

  1.69%

  1.78% A

Net investment income (loss)

  1.92% A

  2.00%

  2.47%

  3.41% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 1

$ 1

$ 1

$ 1

Portfolio turnover rate G

  30% A

  24%

  28%

  31%

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 Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class C

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.75

$ 24.14

$ 21.20

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .24

  .51

  .56

  .47

Net realized and unrealized gain (loss)

  .75

  (1.33)

  3.01

  8.53

Total from investment operations

  .99

  (.82)

  3.57

  9.00

Distributions from net investment income

  (.29)

  (.57)

  (.63)

  (.59)

Net asset value, end of period

$ 23.45

$ 22.75

$ 24.14

$ 21.20

Total Return B,C,D

  4.34%

  (3.57)%

  17.13%

  71.81%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.91% A

  1.67%

  1.66%

  1.80% A

Expenses net of fee waivers, if any

  1.91% A

  1.67%

  1.66%

  1.80% A

Expenses net of all reductions

  1.91% A

  1.67%

  1.66%

  1.80% A

Net investment income (loss)

  1.98% A

  2.06%

  2.50%

  3.17% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 13

$ 13

$ 5

$ 2

Portfolio turnover rate G

  30% A

  24%

  28%

  31%

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 Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Convertible Securities

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008

2007

Selected Per-Share Data

 

 

 

 

 

 

Net asset value, beginning of period

$ 22.92

$ 24.29

$ 21.30

$ 13.55

$ 28.71

$ 25.21

Income from Investment Operations

 

 

 

 

 

 

Net investment income (loss) D

  .37

  .79

  .81

  .96

  .76

  .59

Net realized and unrealized gain (loss)

  .75

  (1.35)

  3.02

  7.78

  (14.43)

  3.43

Total from investment operations

  1.12

  (.56)

  3.83

  8.74

  (13.67)

  4.02

Distributions from net investment income

  (.41)

  (.81)

  (.84)

  (.99)

  (.64)

  (.50)

Distributions from net realized gain

  -

  -

  -

  -

  (.85)

  (.02)

Total distributions

  (.41)

  (.81)

  (.84)

  (.99)

  (1.49)

  (.52)

Net asset value, end of period

$ 23.63

$ 22.92

$ 24.29

$ 21.30

$ 13.55

$ 28.71

Total Return B,C

  4.90%

  (2.54)%

  18.37%

  67.65%

  (50.09)%

  16.02%

Ratios to Average Net Assets E,G

 

 

 

 

 

Expenses before reductions

  .84% A

  .61%

  .59%

  .70%

  .78%

  .79%

Expenses net of fee waivers, if any

  .84% A

  .61%

  .59%

  .69%

  .78%

  .79%

Expenses net of all reductions

  .84% A

  .61%

  .59%

  .69%

  .78%

  .79%

Net investment income (loss)

  3.05% A

  3.12%

  3.57%

  5.59%

  3.06%

  2.11%

Supplemental Data

 

 

 

 

 

 

Net assets, end of period (in millions)

$ 1,812

$ 1,904

$ 2,287

$ 2,340

$ 1,439

$ 2,919

Portfolio turnover rate F

  30% A

  24%

  28%

  31%

  39%

  24%

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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Institutional Class

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009 G

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.90

$ 24.27

$ 21.29

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) D

  .37

  .77

  .80

  .63

Net realized and unrealized gain (loss)

  .74

  (1.33)

  3.02

  8.54

Total from investment operations

  1.11

  (.56)

  3.82

  9.17

Distributions from net investment income

  (.41)

  (.81)

  (.84)

  (.67)

Total distributions

  (.41)

  (.81)

  (.84)

  (.67)

Net asset value, end of period

$ 23.60

$ 22.90

$ 24.27

$ 21.29

Total Return B,C

  4.83%

  (2.55)%

  18.34%

  73.31%

Ratios to Average Net Assets E,H

 

 

 

 

Expenses before reductions

  .89% A

  .65%

  .60%

  .73% A

Expenses net of fee waivers, if any

  .89% A

  .65%

  .60%

  .73% A

Expenses net of all reductions

  .88% A

  .65%

  .60%

  .73% A

Net investment income (loss)

  3.01% A

  3.07%

  3.56%

  4.19% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 21

$ 23

$ 6

$ 3

Portfolio turnover rate F

  30% A

  24%

  28%

  31%

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 February 19, 2009 (commencement of sale of shares) to November 30, 2009.

H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended May 31, 2012 (Unaudited)

(Amounts in thousands except percentages)

1. Organization.

Fidelity® Convertible Securities Fund (the Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Convertible Securities and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Effective after the close of business on September 1, 2010, Class B shares were closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class.

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 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 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:

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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 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 May 31, 2012, as well as a roll forward of Level 3 securities, 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:

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. 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 or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when significant market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities are used and are categorized as Level 2 in the hierarchy in these circumstances. Utilizing these techniques may result in transfers between Level 1 and Level 2. For restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are categorized as Level 3 in the hierarchy.

Semiannual Report

3. Significant Accounting Policies - continued

Security Valuation - continued

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 and floating rate loans, 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. 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. 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.

Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day and are categorized as Level 1 in the hierarchy.

New Accounting Pronouncements. 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 is effective during interim and annual periods beginning after December 15, 2011 and will result in additional disclosure for transfers between levels as well as expanded disclosure for securities categorized as Level 3 under the fair value hierarchy.

In December 2011, the Financial Accounting Standards Board issued Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update creates new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for interim and annual reporting periods beginning on or after January 1, 2013. Management is currently evaluating the impact of the update's adoption on the Fund's financial statement disclosures.

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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Foreign Currency - continued

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. 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 under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. A fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.

Semiannual Report

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

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 declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from 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.

Book-tax differences are primarily due to market discount, equity-debt classifications, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:

Gross unrealized appreciation

$ 176,373

Gross unrealized depreciation

(229,338)

Net unrealized appreciation (depreciation) on securities and other investments

$ (52,965)

 

 

Tax cost

$ 1,926,124

Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. At November 30, 2011, capital loss carryforwards were as follows:

Fiscal year of expiration

 

2017

$ (157,179)

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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

4. Operating Policies - continued

Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation, or may be made directly to a borrower. The Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these loans.

5. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities, aggregated $289,105 and $460,313, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .15% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Convertible Securities as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .61% of the Fund's average net assets.

Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:

Semiannual Report

6. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan Fees - continued

 

Distribution
Fee

Service
Fee

Total Fees

Retained
by FDC

Class A

-%

.25%

$ 42

$ 1

Class T

.25%

.25%

12

-

Class B

.75%

.25%

6

4

Class C

.75%

.25%

64

28

 

 

 

$ 124

$ 33

Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B, 1.00% for Class C, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

 

Retained
by FDC

Class A

$ 14

Class T

1

Class B*

2

Class C*

2

 

$ 19

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

6. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees - continued

 

Amount

% of
Average
Net Assets*

Class A

$ 35

.21

Class T

7

.28

Class B

2

.31

Class C

16

.25

Convertible Securities

1,801

.18

Institutional Class

24

.22

 

$ 1,885

 

* Annualized

Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for each month.

Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $7 for the period.

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR or an affiliate in a $4.25 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 $3 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. 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 $22 for the period. 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 one hundred eighty-six dollars.

Semiannual Report

9. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
May 31,
2012

Year ended
November 30,
2011

From net investment income

 

 

Class A

$ 541

$ 964

Class T

67

145

Class B

14

26

Class C

157

253

Convertible Securities

33,816

74,771

Institutional Class

371

608

Total

$ 34,966

$ 76,767

10. Share Transactions.

Transactions for each class of shares were as follows:

 

Shares

Dollars

Six months ended May 31,
2012

Year ended
November 30, 2011

Six months ended May 31,
2012

Year ended
November 30, 2011

Class A

 

 

 

 

Shares sold

350

1,463

$ 8,642

$ 38,298

Reinvestment of distributions

16

28

380

713

Shares redeemed

(403)

(828)

(9,630)

(20,357)

Net increase (decrease)

(37)

663

$ (608)

$ 18,654

Class T

 

 

 

 

Shares sold

42

206

$ 1,045

$ 5,378

Reinvestment of distributions

3

6

62

140

Shares redeemed

(39)

(160)

(955)

(3,916)

Net increase (decrease)

6

52

$ 152

$ 1,602

Class B

 

 

 

 

Shares sold

6

21

$ 144

$ 566

Reinvestment of distributions

-

1

10

18

Shares redeemed

(9)

(21)

(228)

(527)

Net increase (decrease)

(3)

1

$ (74)

$ 57

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

10. Share Transactions - continued

 

Shares

Dollars

Six months ended May 31,
2012

Year ended
November 30, 2011

Six months ended May 31,
2012

Year ended
November 30, 2011

Class C

 

 

 

 

Shares sold

128

542

$ 3,167

$ 14,072

Reinvestment of distributions

5

8

111

187

Shares redeemed

(138)

(204)

(3,292)

(4,875)

Net increase (decrease)

(5)

346

$ (14)

$ 9,384

Convertible Securities

 

 

 

 

Shares sold

6,901

20,504

$ 170,727

$ 533,363

Reinvestment of distributions

1,244

2,642

29,629

66,219

Shares redeemed

(14,513)

(34,235)

(354,398)

(862,374)

Net increase (decrease)

(6,368)

(11,089)

$ (154,042)

$ (262,792)

Institutional Class

 

 

 

 

Shares sold

452

1,454

$ 11,154

$ 37,674

Reinvestment of distributions

10

16

233

391

Shares redeemed

(570)

(719)

(13,785)

(17,547)

Net increase (decrease)

(108)

751

$ (2,398)

$ 20,518

11. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Smithfield, RI

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

Citibank, N.A.

New York, NY 

ACVS-USAN-0712
1.884069.103

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®

Convertible Securities

Fund - Institutional Class

Semiannual Report

May 31, 2012

(Fidelity Cover Art)

Institutional Class is a class
of Fidelity® Convertible
Securities Fund

Contents

Shareholder Expense Example

(Click Here)

An example of shareholder expenses.

Investment Changes

(Click Here)

A summary of major shifts in the fund's investments over the past six months.

Investments

(Click Here)

A complete list of the fund's investments with their market values.

Financial Statements

(Click Here)

Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.

Notes

(Click Here)

Notes to the financial statements.

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 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2011 to May 31, 2012).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

 

Annualized
Expense Ratio

Beginning
Account Value
December 1, 2011

Ending
Account Value
May 31, 2012

Expenses Paid
During Period*
December 1, 2011
to May 31, 2012

Class A

1.12%

 

 

 

Actual

 

$ 1,000.00

$ 1,047.30

$ 5.73

HypotheticalA

 

$ 1,000.00

$ 1,019.40

$ 5.65

Class T

1.44%

 

 

 

Actual

 

$ 1,000.00

$ 1,045.20

$ 7.36

HypotheticalA

 

$ 1,000.00

$ 1,017.80

$ 7.26

Class B

1.97%

 

 

 

Actual

 

$ 1,000.00

$ 1,042.60

$ 10.06

HypotheticalA

 

$ 1,000.00

$ 1,015.15

$ 9.92

Class C

1.91%

 

 

 

Actual

 

$ 1,000.00

$ 1,043.40

$ 9.76

HypotheticalA

 

$ 1,000.00

$ 1,015.45

$ 9.62

Convertible Securities

.84%

 

 

 

Actual

 

$ 1,000.00

$ 1,049.00

$ 4.30

HypotheticalA

 

$ 1,000.00

$ 1,020.80

$ 4.24

Institutional Class

.89%

 

 

 

Actual

 

$ 1,000.00

$ 1,048.30

$ 4.56

HypotheticalA

 

$ 1,000.00

$ 1,020.55

$ 4.50

A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Top Ten Investments as of May 31, 2012

(excluding cash equivalents)

% of fund's
net assets

% of fund's net assets
6 months ago

General Motors Co. 4.75%

7.1

6.5

Wells Fargo & Co. 7.50%

7.1

6.4

MGM Mirage, Inc. 4.25% 4/15/15

5.4

3.9

Ford Motor Co. 4.25% 11/15/16

5.0

2.8

Alpha Natural Resources, Inc. 2.375% 4/15/15

3.7

2.7

Western Refining, Inc. 5.75% 6/15/14

3.5

1.6

Citigroup, Inc. 7.50%

2.5

2.4

Peabody Energy Corp. 4.75% 12/15/66

2.4

6.2

Bank of America Corp. Series L, 7.25%

2.3

1.8

Nuance Communications, Inc. 2.75% 8/15/27

1.9

1.6

 

40.9

Top Five Market Sectors as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Consumer Discretionary

20.7

17.3

Information Technology

20.0

21.0

Financials

15.6

14.2

Industrials

12.8

10.4

Energy

12.5

20.4

Asset Allocation (% of fund's net assets)

As of May 31, 2012 *

As of November 30, 2011 **

abc436225

Convertible
Securities 91.5%

 

abc436225

Convertible
Securities 87.3%

 

abc436228

Stocks 3.0%

 

abc436271

Stocks 8.3%

 

abc436231

Nonconvertible
Bonds 1.0%

 

abc436231

Nonconvertible
Bonds 0.6%

 

abc436234

Short-Term Investments and Net Other Assets (Liabilities) 4.0%

 

abc436234

Short-Term Investments and Net Other Assets (Liabilities) 3.3%

 

abc436239

Floating Rate Loans 0.5%

 

abc436239

Floating Rate Loans 0.5%

 

* Foreign investments

3.2%

 

** Foreign investments

4.6%

 

abc436279

Semiannual Report

Investments May 31, 2012 (Unaudited)

Showing Percentage of Net Assets

Corporate Bonds - 68.5%

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - 67.5%

CONSUMER DISCRETIONARY - 12.1%

Automobiles - 5.0%

Ford Motor Co. 4.25% 11/15/16

$ 66,000

$ 95,086

Diversified Consumer Services - 0.6%

Stewart Enterprises, Inc. 3.375% 7/15/16 (e)

11,000

10,649

Hotels, Restaurants & Leisure - 5.4%

MGM Mirage, Inc. 4.25% 4/15/15

102,300

101,469

Media - 1.1%

Virgin Media, Inc. 6.5% 11/15/16

8,000

11,166

XM Satellite Radio, Inc. 7% 12/1/14 (e)

7,500

9,769

 

20,935

TOTAL CONSUMER DISCRETIONARY

228,139

CONSUMER STAPLES - 2.0%

Beverages - 0.7%

Molson Coors Brewing Co. 2.5% 7/30/13

14,000

14,273

Food Products - 1.3%

Smithfield Foods, Inc. 4% 6/30/13

22,250

23,899

TOTAL CONSUMER STAPLES

38,172

ENERGY - 12.3%

Energy Equipment & Services - 0.5%

Oil States International, Inc. 2.375% 7/1/25 (e)

4,500

9,416

Oil, Gas & Consumable Fuels - 11.8%

Alpha Natural Resources, Inc. 2.375% 4/15/15

82,000

69,454

Chesapeake Energy Corp. 2.5% 5/15/37

10,000

8,291

Peabody Energy Corp. 4.75% 12/15/66

52,250

45,262

Pioneer Natural Resources Co. 2.875% 1/15/38

20,000

33,075

Western Refining, Inc. 5.75% 6/15/14

34,185

66,105

 

222,187

TOTAL ENERGY

231,603

FINANCIALS - 1.7%

Diversified Financial Services - 1.1%

The NASDAQ Stock Market, Inc. 2.5% 8/15/13

20,000

20,200

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

FINANCIALS - continued

Insurance - 0.6%

Fidelity National Financial, Inc. 4.25% 8/15/18 (e)

$ 10,000

$ 10,938

TOTAL FINANCIALS

31,138

HEALTH CARE - 3.5%

Health Care Equipment & Supplies - 2.0%

Alere, Inc. 3% 5/15/16

31,000

27,745

SonoSite, Inc. 3.75% 7/15/14

7,000

10,264

 

38,009

Health Care Providers & Services - 0.8%

Omnicare, Inc.:

3.25% 12/15/35

2,086

1,992

3.75% 12/15/25

3,610

4,765

3.75% 4/1/42

10,000

9,226

 

15,983

Life Sciences Tools & Services - 0.2%

Charles River Laboratories International, Inc. 2.25% 6/15/13 (e)

4,000

3,995

Pharmaceuticals - 0.5%

Akorn, Inc. 3.5% 6/1/16 (e)

5,000

8,488

TOTAL HEALTH CARE

66,475

INDUSTRIALS - 11.9%

Aerospace & Defense - 1.0%

GenCorp, Inc. 4.0625% 12/31/39

7,830

7,830

Textron, Inc. 4.5% 5/1/13

6,440

11,777

 

19,607

Airlines - 4.1%

Continental Airlines, Inc. 4.5% 1/15/15

9,280

14,059

UAL Corp.:

4.5% 6/30/21 (e)

10,500

10,185

4.5% 6/30/21

5,000

4,850

6% 10/15/29

3,600

10,706

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

INDUSTRIALS - continued

Airlines - continued

US Airways Group, Inc.:

7% 9/30/20 (e)

$ 4,810

$ 4,249

7.25% 5/15/14

11,200

33,338

 

77,387

Commercial Services & Supplies - 1.0%

Metalico, Inc. 7% 4/30/28

20,000

18,200

Construction & Engineering - 0.6%

MasTec, Inc. 4.25% 12/15/14

8,000

10,360

Electrical Equipment - 0.8%

General Cable Corp. 4.5% 11/15/29 (c)

14,800

15,416

Machinery - 3.0%

Greenbrier Companies, Inc.:

2.375% 5/15/26 (e)

5,500

5,390

2.375% 5/15/26

8,000

7,840

3.5% 4/1/18 (e)

2,860

2,356

Terex Corp. 4% 6/1/15

19,590

25,175

Trinity Industries, Inc. 3.875% 6/1/36

15,000

14,831

 

55,592

Marine - 0.5%

Excel Maritime Carriers Ltd. 1.875% 10/15/27 (e)

24,000

10,080

Road & Rail - 0.9%

Hertz Global Holdings, Inc. 5.25% 6/1/14

10,000

17,400

TOTAL INDUSTRIALS

224,042

INFORMATION TECHNOLOGY - 18.8%

Computers & Peripherals - 3.4%

EMC Corp.:

1.75% 12/1/13 (e)

17,000

25,996

1.75% 12/1/13

10,000

15,292

NetApp, Inc. 1.75% 6/1/13

19,800

22,018

 

63,306

Electronic Equipment & Components - 1.5%

Anixter International, Inc. 1% 2/15/13 (e)

4,540

5,056

SYNNEX Corp. 4% 5/15/18

10,000

12,238

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

INFORMATION TECHNOLOGY - continued

Electronic Equipment & Components - continued

Vishay Intertechnology, Inc.:

2.25% 11/15/40 (e)

$ 7,000

$ 6,431

2.25% 5/15/41 (e)

7,000

5,460

 

29,185

Internet Software & Services - 0.7%

VeriSign, Inc. 3.25% 8/15/37

10,000

12,638

IT Services - 0.5%

DST Systems, Inc. 4.125% 8/15/23 (c)

8,612

9,666

Semiconductors & Semiconductor Equipment - 9.1%

Advanced Micro Devices, Inc. 6% 5/1/15

11,916

11,961

Micron Technology, Inc.:

1.5% 8/1/31 (e)

10,000

8,600

1.875% 8/1/31 (e)

30,000

25,763

3.125% 5/1/32 (e)

23,000

20,341

4.25% 10/15/13

6,130

7,337

Novellus Systems, Inc. 2.625% 5/15/41

20,000

24,325

ON Semiconductor Corp.:

1.875% 12/15/25 (e)

3,750

4,066

1.875% 12/15/25

10,000

10,919

2.625% 12/15/26

5,818

5,953

2.625% 12/15/26

29,512

30,803

PMC-Sierra, Inc. 2.25% 10/15/25

10,000

10,119

Xilinx, Inc. 3.125% 3/15/37

10,000

11,500

 

171,687

Software - 3.6%

Nuance Communications, Inc.:

2.75% 8/15/27

28,085

35,212

2.75% 11/1/31 (e)

32,000

33,296

 

68,508

TOTAL INFORMATION TECHNOLOGY

354,990

MATERIALS - 1.5%

Metals & Mining - 1.5%

Alcoa, Inc. 5.25% 3/15/14

5,000

7,375

Goldcorp, Inc. 2% 8/1/14

5,000

5,619

Corporate Bonds - continued

 

Principal Amount (000s)

Value (000s)

Convertible Bonds - continued

MATERIALS - continued

Metals & Mining - continued

Horsehead Holding Corp. 3.8% 7/1/17 (e)

$ 5,000

$ 4,628

Newmont Mining Corp. 1.625% 7/15/17

8,000

10,450

 

28,072

TELECOMMUNICATION SERVICES - 3.7%

Diversified Telecommunication Services - 2.5%

Level 3 Communications, Inc.:

6.5% 10/1/16

19,820

27,562

7% 3/15/15

10,000

12,175

Time Warner Telecom, Inc. 2.375% 4/1/26

6,000

7,695

 

47,432

Wireless Telecommunication Services - 1.2%

Leap Wireless International, Inc. 4.5% 7/15/14

23,000

21,707

TOTAL TELECOMMUNICATION SERVICES

69,139

TOTAL CONVERTIBLE BONDS

1,271,770

Nonconvertible Bonds - 1.0%

CONSUMER DISCRETIONARY - 0.2%

Household Durables - 0.2%

K. Hovnanian Enterprises, Inc.:

7.5% 5/15/16

1,000

603

8.625% 1/15/17

4,000

2,410

 

3,013

MATERIALS - 0.3%

Chemicals - 0.3%

OMNOVA Solutions, Inc. 7.875% 11/1/18

5,960

5,930

TELECOMMUNICATION SERVICES - 0.5%

Diversified Telecommunication Services - 0.5%

Intelsat Luxembourg SA 11.25% 2/4/17

10,000

9,900

TOTAL NONCONVERTIBLE BONDS

18,843

TOTAL CORPORATE BONDS

(Cost $1,275,487)


1,290,613

Common Stocks - 3.0%

Shares

Value (000s)

CONSUMER DISCRETIONARY - 0.1%

Auto Components - 0.1%

BorgWarner, Inc. (a)

27,728

$ 1,989

Hotels, Restaurants & Leisure - 0.0%

Ambassadors International, Inc. (a)(d)

230,377

2

Media - 0.0%

HMH Holdings, Inc. (a)(g)

52,880

1

HMH Holdings, Inc. warrants 3/9/17 (a)(g)

164,823

0*

 

1

TOTAL CONSUMER DISCRETIONARY

1,992

FINANCIALS - 1.3%

Commercial Banks - 0.7%

Huntington Bancshares, Inc.

2,120,500

13,868

Insurance - 0.6%

MetLife, Inc. unit (a)

200,000

11,688

TOTAL FINANCIALS

25,556

INDUSTRIALS - 0.4%

Machinery - 0.4%

Ingersoll-Rand PLC

173,739

7,177

INFORMATION TECHNOLOGY - 1.2%

Electronic Equipment & Components - 0.6%

Viasystems Group, Inc. (a)

549,643

10,559

Semiconductors & Semiconductor Equipment - 0.6%

ON Semiconductor Corp. (a)

1,716,800

11,571

TOTAL INFORMATION TECHNOLOGY

22,130

TOTAL COMMON STOCKS

(Cost $60,000)


56,855

Convertible Preferred Stocks - 24.0%

 

 

 

 

CONSUMER DISCRETIONARY - 8.3%

Automobiles - 7.1%

General Motors Co. 4.75%

3,645,600

133,867

Household Durables - 0.1%

Hovnanian Enterprises, Inc./K. Hovanian Enterprises, Inc. 7.25%

125,000

1,340

Convertible Preferred Stocks - continued

Shares

Value (000s)

CONSUMER DISCRETIONARY - continued

Leisure Equipment & Products - 0.2%

Callaway Golf Co. 7.50%

50,000

$ 4,806

Media - 0.9%

Interpublic Group of Companies, Inc. 5.25%

10,000

9,980

LodgeNet Entertainment Corp. 10.00% (e)

11,118

6,487

 

16,467

TOTAL CONSUMER DISCRETIONARY

156,480

CONSUMER STAPLES - 1.2%

Food Products - 1.2%

Bunge Ltd. 4.875%

237,000

21,859

ENERGY - 0.2%

Oil, Gas & Consumable Fuels - 0.2%

ATP Oil & Gas Corp. Series B, 8.00%

110,000

3,671

FINANCIALS - 12.6%

Commercial Banks - 7.2%

Huntington Bancshares, Inc. 8.50%

2,100

2,434

Wells Fargo & Co. 7.50%

120,550

133,689

 

136,123

Diversified Financial Services - 4.8%

Bank of America Corp. Series L, 7.25%

47,085

43,977

Citigroup, Inc. 7.50%

553,300

46,521

 

90,498

Insurance - 0.3%

Assured Guaranty Ltd. 8.50%

100,000

4,623

Real Estate Investment Trusts - 0.3%

Health Care REIT, Inc. Series I, 6.50%

98,800

5,298

TOTAL FINANCIALS

236,542

HEALTH CARE - 1.7%

Health Care Providers & Services - 1.7%

Tenet Healthcare Corp. 7.00%

40,000

32,650

TOTAL CONVERTIBLE PREFERRED STOCKS

(Cost $525,504)


451,202

Floating Rate Loans - 0.5%

 

Principal Amount (000s)

Value (000s)

INDUSTRIALS - 0.5%

Airlines - 0.5%

US Airways Group, Inc. term loan 2.7398% 3/23/14 (f)

(Cost $9,563)

$ 10,692

$ 10,131

Money Market Funds - 3.4%

Shares

 

Fidelity Cash Central Fund, 0.17% (b)
(Cost $64,358)

64,357,788


64,358

TOTAL INVESTMENT PORTFOLIO - 99.4%

(Cost $1,934,912)

1,873,159

NET OTHER ASSETS (LIABILITIES) - 0.6%

11,752

NET ASSETS - 100%

$ 1,884,911

*Amount represents less than $1,000

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. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.

(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) Affiliated company

(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $231,639,000 or 12.3% of net assets.

(f) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.

(g) 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 $1,000 or 0.0% of net assets.

Additional information on each restricted holding is as follows:

Security

Acquisition Date

Acquisition Cost (000s)

HMH Holdings, Inc.

8/1/08 - 12/31/09

$ 6,902

HMH Holdings, Inc. warrants 3/9/17

3/9/10

$ 48

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
(Amounts in thousands)

Fidelity Cash Central Fund

$ 71

Other Affiliated Issuers

An affiliated company is a company in which the Fund has ownership of at least 5% of the voting securities. Fiscal year to date transactions with companies which are or were affiliates are as follows:

Affiliate
(Amounts in thousands)

Value, beginning of period

Purchases

Sales Proceeds

Dividend Income

Value,
end of
period

Ambassadors International, Inc.

$ 8

$ -

$ -

$ -

$ 2

Other Information

The following is a summary of the inputs used, as of May 31, 2012, 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 tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:

Description
(Amounts in thousands)

Total

Level 1

Level 2

Level 3

Investments in Securities:

Equities:

Consumer Discretionary

$ 158,472

$ 137,198

$ 21,274

$ -

Consumer Staples

21,859

-

21,859

-

Energy

3,671

-

3,671

-

Financials

262,098

240,489

21,609

-

Health Care

32,650

-

32,650

-

Industrials

7,177

7,177

-

-

Information Technology

22,130

22,130

-

-

Corporate Bonds

1,290,613

-

1,290,613

-

Floating Rate Loans

10,131

-

10,131

-

Money Market Funds

64,358

64,358

-

-

Total Investments in Securities:

$ 1,873,159

$ 471,352

$ 1,401,807

$ -

The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:

(Amounts in thousands)

 

Investments in Securities:

Beginning Balance

$ 8

Total Realized Gain (Loss)

-

Total Unrealized Gain (Loss)

(8)

Cost of Purchases

-

Proceeds of Sales

-

Amortization/Accretion

-

Transfers in to Level 3

-

Transfers out of Level 3

-

Ending Balance

$ -

The change in unrealized gain (loss) for the period attributable to Level 3 securities held at May 31, 2012

$ (8)

The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.

The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited):

AAA,AA,A

2.2%

BBB

11.7%

BB

15.8%

B

16.6%

CCC,CC,C

11.7%

Not Rated

11.0%

Equities

27.0%

Short-Term Investments and Net Other Assets

4.0%

 

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

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

Assets

Investment in securities, at value - See accompanying schedule:

Unaffiliated issuers (cost $1,867,715)

$ 1,808,799

 

Fidelity Central Funds (cost $64,358)

64,358

 

Other affiliated issuers (cost $2,839)

2

 

Total Investments (cost $1,934,912)

 

$ 1,873,159

Receivable for fund shares sold

817

Dividends receivable

5,101

Interest receivable

10,381

Distributions receivable from Fidelity Central Funds

8

Prepaid expenses

1

Other receivables

10

Total assets

1,889,477

 

 

 

Liabilities

Payable for fund shares redeemed

$ 3,208

Accrued management fee

939

Transfer agent fee payable

309

Distribution and service plan fees payable

21

Other affiliated payables

51

Other payables and accrued expenses

38

Total liabilities

4,566

 

 

 

Net Assets

$ 1,884,911

Net Assets consist of:

 

Paid in capital

$ 2,030,313

Undistributed net investment income

18,383

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(102,032)

Net unrealized appreciation (depreciation) on investments

(61,753)

Net Assets

$ 1,884,911

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Calculation of Maximum Offering Price

 Class A:
Net Asset Value and redemption price per share ($33,077 ÷ 1,404.4 shares)

$ 23.55

 

 

 

Maximum offering price per share (100/94.25 of $23.55)

$ 24.99

Class T:
Net Asset Value and redemption price per share ($4,789 ÷ 203.3 shares)

$ 23.56

 

 

 

Maximum offering price per share (100/96.50 of $23.56)

$ 24.41

Class B:
Net Asset Value and offering price per share ($1,079 ÷ 45.9 shares)A

$ 23.51

 

 

 

Class C:
Net Asset Value and offering price per share ($12,928 ÷ 551.3 shares)A

$ 23.45

 

 

 

Convertible Securities:
Net Asset Value, offering price and redemption price per share ($1,811,896 ÷ 76,685.4 shares)

$ 23.63

 

 

 

Institutional Class:
Net Asset Value, offering price and redemption price per share ($21,142 ÷ 895.7 shares)

$ 23.60

A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

 Amounts in thousands

 Six months ended May 31, 2012(Unaudited)

Investment Income

  

  

Dividends

 

$ 15,683

Interest

 

24,372

Income from Fidelity Central Funds

 

71

Total income

 

40,126

 

 

 

Expenses

Management fee
Basic fee

$ 4,721

Performance adjustment

1,601

Transfer agent fees

1,885

Distribution and service plan fees

124

Accounting fees and expenses

312

Custodian fees and expenses

13

Independent trustees' compensation

7

Registration fees

114

Audit

41

Legal

8

Miscellaneous

13

Total expenses before reductions

8,839

Expense reductions

(22)

8,817

Net investment income (loss)

31,309

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

 

 

Unaffiliated issuers

61,170

Foreign currency transactions

63

Total net realized gain (loss)

 

61,233

Change in net unrealized appreciation (depreciation) on:

Investment securities

6,152

Net gain (loss)

67,385

Net increase (decrease) in net assets resulting from operations

$ 98,694

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

 Amounts in thousands

Six months ended May 31, 2012
(Unaudited)

Year ended
November 30, 2011

Increase (Decrease) in Net Assets

 

 

Operations

 

 

Net investment income (loss)

$ 31,309

$ 75,374

Net realized gain (loss)

61,233

137,050

Change in net unrealized appreciation (depreciation)

6,152

(266,196)

Net increase (decrease) in net assets resulting
from operations

98,694

(53,772)

Distributions to shareholders from net investment income

(34,966)

(76,767)

Share transactions - net increase (decrease)

(156,984)

(212,577)

Total increase (decrease) in net assets

(93,256)

(343,116)

 

 

 

Net Assets

Beginning of period

1,978,167

2,321,283

End of period (including undistributed net investment income of $18,383 and undistributed net investment income of $23,529, respectively)

$ 1,884,911

$ 1,978,167

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.85

$ 24.22

$ 21.25

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .34

  .72

  .75

  .58

Net realized and unrealized gain (loss)

  .74

  (1.34)

  3.01

  8.53

Total from investment operations

  1.08

  (.62)

  3.76

  9.11

Distributions from net investment income

  (.38)

  (.75)

  (.79)

  (.65)

Net asset value, end of period

$ 23.55

$ 22.85

$ 24.22

$ 21.25

Total Return B,C,D

  4.73%

  (2.79)%

  18.05%

  72.83%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.12% A

  .88%

  .87%

  1.04%A

Expenses net of fee waivers, if any

  1.12%A

  .88%

  .87%

  1.04%A

Expenses net of all reductions

  1.12%A

  .88%

  .87%

  1.04%A

Net investment income (loss)

  2.77%A

  2.84%

  3.29%

  3.70%A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 33

$ 33

$ 19

$ 6

Portfolio turnover rate G

  30%A

  24%

  28%

  31%

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 Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class T

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.87

$ 24.23

$ 21.25

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .30

  .65

  .69

  .57

Net realized and unrealized gain (loss)

  .74

  (1.34)

  3.01

  8.52

Total from investment operations

  1.04

  (.69)

  3.70

  9.09

Distributions from net investment income

  (.35)

  (.67)

  (.72)

  (.63)

Net asset value, end of period

$ 23.56

$ 22.87

$ 24.23

$ 21.25

Total Return B,C,D

  4.52%

  (3.07)%

  17.74%

  72.60%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.44% A

  1.18%

  1.13%

  1.25% A

Expenses net of fee waivers, if any

  1.44% A

  1.18%

  1.13%

  1.25% A

Expenses net of all reductions

  1.44% A

  1.17%

  1.13%

  1.25% A

Net investment income (loss)

  2.45% A

  2.55%

  3.03%

  3.83% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 5

$ 5

$ 4

$ 2

Portfolio turnover rate G

  30% A

  24%

  28%

  31%

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 Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class B

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.82

$ 24.17

$ 21.22

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .23

  .51

  .56

  .50

Net realized and unrealized gain (loss)

  .74

  (1.34)

  3.01

  8.51

Total from investment operations

  .97

  (.83)

  3.57

  9.01

Distributions from net investment income

  (.28)

  (.52)

  (.62)

  (.58)

Net asset value, end of period

$ 23.51

$ 22.82

$ 24.17

$ 21.22

Total Return B,C,D

  4.26%

  (3.59)%

  17.08%

  71.85%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.97% A

  1.73%

  1.69%

  1.78% A

Expenses net of fee waivers, if any

  1.97% A

  1.73%

  1.69%

  1.78% A

Expenses net of all reductions

  1.97% A

  1.73%

  1.69%

  1.78% A

Net investment income (loss)

  1.92% A

  2.00%

  2.47%

  3.41% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 1

$ 1

$ 1

$ 1

Portfolio turnover rate G

  30% A

  24%

  28%

  31%

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 Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class C

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009H

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.75

$ 24.14

$ 21.20

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) E

  .24

  .51

  .56

  .47

Net realized and unrealized gain (loss)

  .75

  (1.33)

  3.01

  8.53

Total from investment operations

  .99

  (.82)

  3.57

  9.00

Distributions from net investment income

  (.29)

  (.57)

  (.63)

  (.59)

Net asset value, end of period

$ 23.45

$ 22.75

$ 24.14

$ 21.20

Total Return B,C,D

  4.34%

  (3.57)%

  17.13%

  71.81%

Ratios to Average Net Assets F,I

 

 

 

 

Expenses before reductions

  1.91% A

  1.67%

  1.66%

  1.80% A

Expenses net of fee waivers, if any

  1.91% A

  1.67%

  1.66%

  1.80% A

Expenses net of all reductions

  1.91% A

  1.67%

  1.66%

  1.80% A

Net investment income (loss)

  1.98% A

  2.06%

  2.50%

  3.17% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 13

$ 13

$ 5

$ 2

Portfolio turnover rate G

  30% A

  24%

  28%

  31%

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 Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F Fees and expenses of 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.

G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

H For the period February 19, 2009 (commencement of sale of shares) to November 30, 2009.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Convertible Securities

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008

2007

Selected Per-Share Data

 

 

 

 

 

 

Net asset value, beginning of period

$ 22.92

$ 24.29

$ 21.30

$ 13.55

$ 28.71

$ 25.21

Income from Investment Operations

 

 

 

 

 

 

Net investment income (loss) D

  .37

  .79

  .81

  .96

  .76

  .59

Net realized and unrealized gain (loss)

  .75

  (1.35)

  3.02

  7.78

  (14.43)

  3.43

Total from investment operations

  1.12

  (.56)

  3.83

  8.74

  (13.67)

  4.02

Distributions from net investment income

  (.41)

  (.81)

  (.84)

  (.99)

  (.64)

  (.50)

Distributions from net realized gain

  -

  -

  -

  -

  (.85)

  (.02)

Total distributions

  (.41)

  (.81)

  (.84)

  (.99)

  (1.49)

  (.52)

Net asset value, end of period

$ 23.63

$ 22.92

$ 24.29

$ 21.30

$ 13.55

$ 28.71

Total Return B,C

  4.90%

  (2.54)%

  18.37%

  67.65%

  (50.09)%

  16.02%

Ratios to Average Net Assets E,G

 

 

 

 

 

Expenses before reductions

  .84% A

  .61%

  .59%

  .70%

  .78%

  .79%

Expenses net of fee waivers, if any

  .84% A

  .61%

  .59%

  .69%

  .78%

  .79%

Expenses net of all reductions

  .84% A

  .61%

  .59%

  .69%

  .78%

  .79%

Net investment income (loss)

  3.05% A

  3.12%

  3.57%

  5.59%

  3.06%

  2.11%

Supplemental Data

 

 

 

 

 

 

Net assets, end of period (in millions)

$ 1,812

$ 1,904

$ 2,287

$ 2,340

$ 1,439

$ 2,919

Portfolio turnover rate F

  30% A

  24%

  28%

  31%

  39%

  24%

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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Institutional Class

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009 G

Selected Per-Share Data

 

 

 

 

Net asset value, beginning of period

$ 22.90

$ 24.27

$ 21.29

$ 12.79

Income from Investment Operations

 

 

 

 

Net investment income (loss) D

  .37

  .77

  .80

  .63

Net realized and unrealized gain (loss)

  .74

  (1.33)

  3.02

  8.54

Total from investment operations

  1.11

  (.56)

  3.82

  9.17

Distributions from net investment income

  (.41)

  (.81)

  (.84)

  (.67)

Total distributions

  (.41)

  (.81)

  (.84)

  (.67)

Net asset value, end of period

$ 23.60

$ 22.90

$ 24.27

$ 21.29

Total Return B,C

  4.83%

  (2.55)%

  18.34%

  73.31%

Ratios to Average Net Assets E,H

 

 

 

 

Expenses before reductions

  .89% A

  .65%

  .60%

  .73% A

Expenses net of fee waivers, if any

  .89% A

  .65%

  .60%

  .73% A

Expenses net of all reductions

  .88% A

  .65%

  .60%

  .73% A

Net investment income (loss)

  3.01% A

  3.07%

  3.56%

  4.19% A

Supplemental Data

 

 

 

 

Net assets, end of period (in millions)

$ 21

$ 23

$ 6

$ 3

Portfolio turnover rate F

  30% A

  24%

  28%

  31%

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 February 19, 2009 (commencement of sale of shares) to November 30, 2009.

H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended May 31, 2012 (Unaudited)

(Amounts in thousands except percentages)

1. Organization.

Fidelity® Convertible Securities Fund (the Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class C, Convertible Securities and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Effective after the close of business on September 1, 2010, Class B shares were closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class.

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 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 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:

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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 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 May 31, 2012, as well as a roll forward of Level 3 securities, 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:

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. 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 or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when significant market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities are used and are categorized as Level 2 in the hierarchy in these circumstances. Utilizing these techniques may result in transfers between Level 1 and Level 2. For restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are categorized as Level 3 in the hierarchy.

Semiannual Report

3. Significant Accounting Policies - continued

Security Valuation - continued

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 and floating rate loans, 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. 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. 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.

Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day and are categorized as Level 1 in the hierarchy.

New Accounting Pronouncements. 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 is effective during interim and annual periods beginning after December 15, 2011 and will result in additional disclosure for transfers between levels as well as expanded disclosure for securities categorized as Level 3 under the fair value hierarchy.

In December 2011, the Financial Accounting Standards Board issued Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update creates new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for interim and annual reporting periods beginning on or after January 1, 2013. Management is currently evaluating the impact of the update's adoption on the Fund's financial statement disclosures.

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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Foreign Currency - continued

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. 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 under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. A fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.

Semiannual Report

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

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 declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from 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.

Book-tax differences are primarily due to market discount, equity-debt classifications, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:

Gross unrealized appreciation

$ 176,373

Gross unrealized depreciation

(229,338)

Net unrealized appreciation (depreciation) on securities and other investments

$ (52,965)

 

 

Tax cost

$ 1,926,124

Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. At November 30, 2011, capital loss carryforwards were as follows:

Fiscal year of expiration

 

2017

$ (157,179)

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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

4. Operating Policies - continued

Loans and Other Direct Debt Instruments. The Fund invests in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. These instruments may be in the form of loans, trade claims or other receivables and may include standby financing commitments such as revolving credit facilities that obligate the Fund to supply additional cash to the borrower on demand. Loans may be acquired through assignment or participation, or may be made directly to a borrower. The Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these loans.

5. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities, aggregated $289,105 and $460,313, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .15% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Convertible Securities as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .61% of the Fund's average net assets.

Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:

Semiannual Report

6. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan Fees - continued

 

Distribution
Fee

Service
Fee

Total Fees

Retained
by FDC

Class A

-%

.25%

$ 42

$ 1

Class T

.25%

.25%

12

-

Class B

.75%

.25%

6

4

Class C

.75%

.25%

64

28

 

 

 

$ 124

$ 33

Sales Load. FDC may receive a front-end sales charge of up to 5.75% for selling Class A shares and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B, 1.00% for Class C, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

 

Retained
by FDC

Class A

$ 14

Class T

1

Class B*

2

Class C*

2

 

$ 19

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

6. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees - continued

 

Amount

% of
Average
Net Assets*

Class A

$ 35

.21

Class T

7

.28

Class B

2

.31

Class C

16

.25

Convertible Securities

1,801

.18

Institutional Class

24

.22

 

$ 1,885

 

* Annualized

Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The fee is based on the level of average net assets for each month.

Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $7 for the period.

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR or an affiliate in a $4.25 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 $3 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. 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 $22 for the period. 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 one hundred eighty-six dollars.

Semiannual Report

9. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
May 31,
2012

Year ended
November 30,
2011

From net investment income

 

 

Class A

$ 541

$ 964

Class T

67

145

Class B

14

26

Class C

157

253

Convertible Securities

33,816

74,771

Institutional Class

371

608

Total

$ 34,966

$ 76,767

10. Share Transactions.

Transactions for each class of shares were as follows:

 

Shares

Dollars

Six months ended May 31,
2012

Year ended
November 30, 2011

Six months ended May 31,
2012

Year ended
November 30, 2011

Class A

 

 

 

 

Shares sold

350

1,463

$ 8,642

$ 38,298

Reinvestment of distributions

16

28

380

713

Shares redeemed

(403)

(828)

(9,630)

(20,357)

Net increase (decrease)

(37)

663

$ (608)

$ 18,654

Class T

 

 

 

 

Shares sold

42

206

$ 1,045

$ 5,378

Reinvestment of distributions

3

6

62

140

Shares redeemed

(39)

(160)

(955)

(3,916)

Net increase (decrease)

6

52

$ 152

$ 1,602

Class B

 

 

 

 

Shares sold

6

21

$ 144

$ 566

Reinvestment of distributions

-

1

10

18

Shares redeemed

(9)

(21)

(228)

(527)

Net increase (decrease)

(3)

1

$ (74)

$ 57

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

10. Share Transactions - continued

 

Shares

Dollars

Six months ended May 31,
2012

Year ended
November 30, 2011

Six months ended May 31,
2012

Year ended
November 30, 2011

Class C

 

 

 

 

Shares sold

128

542

$ 3,167

$ 14,072

Reinvestment of distributions

5

8

111

187

Shares redeemed

(138)

(204)

(3,292)

(4,875)

Net increase (decrease)

(5)

346

$ (14)

$ 9,384

Convertible Securities

 

 

 

 

Shares sold

6,901

20,504

$ 170,727

$ 533,363

Reinvestment of distributions

1,244

2,642

29,629

66,219

Shares redeemed

(14,513)

(34,235)

(354,398)

(862,374)

Net increase (decrease)

(6,368)

(11,089)

$ (154,042)

$ (262,792)

Institutional Class

 

 

 

 

Shares sold

452

1,454

$ 11,154

$ 37,674

Reinvestment of distributions

10

16

233

391

Shares redeemed

(570)

(719)

(13,785)

(17,547)

Net increase (decrease)

(108)

751

$ (2,398)

$ 20,518

11. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Smithfield, RI

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

Citibank, N.A.

New York, NY 

ACVSI-USAN-0712
1.884061.103

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

Fidelity®

Equity Dividend Income

Fund

(formerly Fidelity Equity-Income II Fund)

Semiannual Report

May 31, 2012

(Fidelity Cover Art)

Contents

Shareholder Expense Example

(Click Here)

An example of shareholder expenses.

Investment Changes

(Click Here)

A summary of major shifts in the fund's investments over the past six months.

Investments

(Click Here)

A complete list of the fund's investments with their market values.

Financial Statements

(Click Here)

Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.

Notes

(Click Here)

Notes to the financial statements.

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.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

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 Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2011 to May 31, 2012).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

Semiannual Report

Shareholder Expense Example - continued

 

Annualized Expense Ratio

Beginning
Account Value
December 1, 2011

Ending
Account Value
May 31, 2012

Expenses Paid
During Period*
December 1, 2011
to May 31, 2012

Fidelity Equity Dividend Income

.68%

 

 

 

Actual

 

$ 1,000.00

$ 1,070.70

$ 3.52

HypotheticalA

 

$ 1,000.00

$ 1,021.60

$ 3.44

Class K

.54%

 

 

 

Actual

 

$ 1,000.00

$ 1,071.50

$ 2.80

HypotheticalA

 

$ 1,000.00

$ 1,022.30

$ 2.73

A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Top Ten Stocks as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Chevron Corp.

4.0

2.5

Wells Fargo & Co.

3.8

1.8

Microsoft Corp.

3.4

3.4

General Electric Co.

3.3

2.6

AT&T, Inc.

3.2

2.2

IBM Corp.

2.8

0.0

Pfizer, Inc.

2.5

1.8

The Coca-Cola Co.

2.3

2.0

Merck & Co., Inc.

2.3

2.2

Procter & Gamble Co.

2.3

2.9

 

29.9

Top Five Market Sectors as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Financials

15.6

14.3

Consumer Staples

15.1

15.3

Information Technology

15.0

12.3

Health Care

11.5

10.3

Consumer Discretionary

11.1

8.6

Asset Allocation (% of fund's net assets)

As of May 31, 2012*

As of November 30, 2011**

abc436225

Stocks 99.6%

 

abc436225

Stocks 97.5%

 

abc436239

Short-Term Investments and Net Other Assets (Liabilities) 0.4%

 

abc436239

Short-Term Investments and Net Other Assets (Liabilities) 2.5%

 

* Foreign investments

11.0%

 

** Foreign investments

10.5%

 

abc436290

Semiannual Report

Investments May 31, 2012 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 99.6%

Shares

Value (000s)

CONSUMER DISCRETIONARY - 11.1%

Automobiles - 0.6%

Ford Motor Co.

2,741,100

$ 28,946

Hotels, Restaurants & Leisure - 2.6%

Brinker International, Inc.

215,100

6,950

Darden Restaurants, Inc.

533,100

27,577

McDonald's Corp.

608,900

54,399

Wyndham Worldwide Corp.

540,200

26,902

 

115,828

Media - 3.7%

Comcast Corp. Class A

2,217,400

64,105

The Walt Disney Co.

921,200

42,108

Time Warner Cable, Inc.

434,171

32,736

Time Warner, Inc.

773,143

26,650

 

165,599

Multiline Retail - 0.7%

Target Corp.

503,756

29,173

Specialty Retail - 2.7%

Foot Locker, Inc.

1,314,600

41,725

Home Depot, Inc.

1,053,400

51,975

Limited Brands, Inc.

213,200

9,458

Lowe's Companies, Inc.

654,000

17,475

 

120,633

Textiles, Apparel & Luxury Goods - 0.8%

VF Corp.

263,300

37,136

TOTAL CONSUMER DISCRETIONARY

497,315

CONSUMER STAPLES - 15.1%

Beverages - 4.4%

Anheuser-Busch InBev SA NV ADR

395,100

26,748

Diageo PLC

617,343

14,709

Dr Pepper Snapple Group, Inc.

703,900

29,043

PepsiCo, Inc.

335,571

22,768

The Coca-Cola Co.

1,377,942

102,974

 

196,242

Food & Staples Retailing - 1.3%

Safeway, Inc.

172,300

3,277

Sysco Corp.

242,000

6,754

Wal-Mart Stores, Inc.

757,900

49,885

 

59,916

Common Stocks - continued

Shares

Value (000s)

CONSUMER STAPLES - continued

Food Products - 1.8%

B&G Foods, Inc. Class A

200,000

$ 4,816

Kraft Foods, Inc. Class A

1,451,841

55,562

Unilever PLC sponsored ADR

722,900

22,829

 

83,207

Household Products - 4.2%

Colgate-Palmolive Co.

407,200

40,028

Kimberly-Clark Corp.

346,921

27,528

Procter & Gamble Co.

1,628,005

101,408

Reckitt Benckiser Group PLC

332,300

17,683

 

186,647

Tobacco - 3.4%

Altria Group, Inc.

728,400

23,447

British American Tobacco PLC sponsored ADR

146,700

13,802

Imperial Tobacco Group PLC

244,352

8,840

Japan Tobacco, Inc.

4,666

25,963

Lorillard, Inc.

116,100

14,350

Philip Morris International, Inc.

800,259

67,630

 

154,032

TOTAL CONSUMER STAPLES

680,044

ENERGY - 8.7%

Oil, Gas & Consumable Fuels - 8.7%

Atlas Pipeline Partners, LP

296,900

8,907

Bonavista Energy Corp. (d)

254,200

4,359

Chevron Corp.

1,817,170

178,651

Exxon Mobil Corp.

1,118,856

87,976

Legacy Reserves LP

224,100

5,535

Marathon Oil Corp.

585,268

14,579

Marathon Petroleum Corp.

90

3

Occidental Petroleum Corp.

227,100

18,002

Penn West Petroleum Ltd.

366,100

4,884

Royal Dutch Shell PLC Class A sponsored ADR

802,900

49,924

Williams Companies, Inc.

603,700

18,431

 

391,251

Common Stocks - continued

Shares

Value (000s)

FINANCIALS - 15.6%

Capital Markets - 0.6%

BlackRock, Inc. Class A

50,300

$ 8,591

State Street Corp.

439,300

18,104

 

26,695

Commercial Banks - 5.9%

Australia & New Zealand Banking Group Ltd.

401,129

8,166

Commerce Bancshares, Inc.

123,000

4,765

Huntington Bancshares, Inc.

1,836,700

12,012

M&T Bank Corp.

66,400

5,400

U.S. Bancorp

1,905,800

59,289

UMB Financial Corp.

121,700

5,935

Wells Fargo & Co.

5,279,708

169,215

 

264,782

Diversified Financial Services - 2.0%

CME Group, Inc.

32,870

8,466

JPMorgan Chase & Co.

2,480,808

82,239

 

90,705

Insurance - 2.5%

ACE Ltd.

274,400

19,847

AFLAC, Inc.

321,700

12,894

Allied World Assurance Co. Holdings Ltd.

214,900

16,526

Axis Capital Holdings Ltd.

693,600

22,819

MetLife, Inc.

567,517

16,577

Prudential Financial, Inc.

478,400

22,222

 

110,885

Real Estate Investment Trusts - 4.6%

AvalonBay Communities, Inc.

100,800

14,087

Boston Properties, Inc.

134,900

13,885

Camden Property Trust (SBI)

189,073

12,311

DDR Corp.

1,066,500

14,814

Douglas Emmett, Inc.

751,400

16,080

Glimcher Realty Trust

347,100

3,193

Kimco Realty Corp.

618,400

11,100

Lexington Corporate Properties Trust

1,158,100

9,624

Post Properties, Inc.

655,100

31,713

Prologis, Inc.

577,113

18,456

Common Stocks - continued

Shares

Value (000s)

FINANCIALS - continued

Real Estate Investment Trusts - continued

Simon Property Group, Inc.

243,800

$ 35,965

Ventas, Inc.

470,313

27,664

 

208,892

TOTAL FINANCIALS

701,959

HEALTH CARE - 11.5%

Biotechnology - 1.0%

Amgen, Inc.

657,900

45,737

Health Care Equipment & Supplies - 0.6%

Covidien PLC

530,800

27,485

Health Care Providers & Services - 0.8%

UnitedHealth Group, Inc.

455,100

25,381

WellPoint, Inc.

143,500

9,670

 

35,051

Pharmaceuticals - 9.1%

Eli Lilly & Co.

812,952

33,290

GlaxoSmithKline PLC

1,743,023

38,624

Johnson & Johnson

1,270,566

79,321

Merck & Co., Inc.

2,723,528

102,350

Pfizer, Inc.

5,099,435

111,525

Roche Holding AG (participation certificate)

131,178

20,529

Sanofi SA

320,927

21,861

 

407,500

TOTAL HEALTH CARE

515,773

INDUSTRIALS - 10.3%

Aerospace & Defense - 2.1%

Honeywell International, Inc.

834,900

46,471

Raytheon Co.

389,400

19,595

United Technologies Corp.

386,030

28,609

 

94,675

Air Freight & Logistics - 1.2%

United Parcel Service, Inc. Class B

746,000

55,905

Commercial Services & Supplies - 0.1%

Republic Services, Inc.

175,311

4,621

Electrical Equipment - 0.5%

Emerson Electric Co.

469,972

21,981

Common Stocks - continued

Shares

Value (000s)

INDUSTRIALS - continued

Industrial Conglomerates - 3.9%

3M Co.

342,000

$ 28,868

General Electric Co.

7,773,197

148,390

 

177,258

Machinery - 1.4%

Caterpillar, Inc.

144,900

12,696

Illinois Tool Works, Inc.

256,100

14,380

Ingersoll-Rand PLC

715,700

29,566

Stanley Black & Decker, Inc.

63,300

4,194

 

60,836

Road & Rail - 1.1%

Union Pacific Corp.

429,700

47,869

TOTAL INDUSTRIALS

463,145

INFORMATION TECHNOLOGY - 15.0%

Communications Equipment - 1.0%

Motorola Solutions, Inc.

434,200

20,876

QUALCOMM, Inc.

395,700

22,678

 

43,554

Computers & Peripherals - 1.0%

Apple, Inc. (a)

77,500

44,774

Electronic Equipment & Components - 0.3%

TE Connectivity Ltd.

474,616

14,912

IT Services - 4.7%

Accenture PLC Class A

809,800

46,240

Automatic Data Processing, Inc.

493,700

25,746

Fidelity National Information Services, Inc.

433,900

14,223

IBM Corp.

645,500

124,517

 

210,726

Semiconductors & Semiconductor Equipment - 4.6%

Analog Devices, Inc.

1,095,600

39,847

Intel Corp.

3,477,487

89,858

Intersil Corp. Class A

761,900

8,038

Linear Technology Corp.

765,200

22,206

Maxim Integrated Products, Inc.

522,900

13,156

Texas Instruments, Inc.

1,246,500

35,500

 

208,605

Common Stocks - continued

Shares

Value (000s)

INFORMATION TECHNOLOGY - continued

Software - 3.4%

Microsoft Corp.

5,151,926

$ 150,385

TOTAL INFORMATION TECHNOLOGY

672,956

MATERIALS - 1.9%

Chemicals - 1.9%

Air Products & Chemicals, Inc.

104,700

8,275

Dow Chemical Co.

625,832

19,438

E.I. du Pont de Nemours & Co.

482,200

23,271

Eastman Chemical Co.

266,500

12,408

LyondellBasell Industries NV Class A

592,200

23,368

 

86,760

TELECOMMUNICATION SERVICES - 3.8%

Diversified Telecommunication Services - 3.8%

AT&T, Inc.

4,199,000

143,480

CenturyLink, Inc.

658,900

25,842

 

169,322

UTILITIES - 6.6%

Electric Utilities - 5.1%

American Electric Power Co., Inc.

679,677

26,174

Duke Energy Corp.

2,180,600

47,930

Edison International

685,557

30,823

FirstEnergy Corp.

222,430

10,407

NextEra Energy, Inc.

806,572

52,701

Northeast Utilities

198,000

7,130

PPL Corp.

1,228,209

33,616

Southern Co.

467,300

21,454

 

230,235

Multi-Utilities - 1.5%

National Grid PLC

1,987,791

19,937

PG&E Corp.

388,900

16,995

Sempra Energy

471,900

30,678

 

67,610

TOTAL UTILITIES

297,845

TOTAL COMMON STOCKS

(Cost $4,323,699)


4,476,370

Money Market Funds - 0.3%

Shares

Value (000s)

Fidelity Cash Central Fund, 0.17% (b)

11,301,363

$ 11,301

Fidelity Securities Lending Cash Central Fund, 0.17% (b)(c)

4,792,900

4,793

TOTAL MONEY MARKET FUNDS

(Cost $16,094)


16,094

TOTAL INVESTMENT PORTFOLIO - 99.9%

(Cost $4,339,793)

4,492,464

NET OTHER ASSETS (LIABILITIES) - 0.1%

3,591

NET ASSETS - 100%

$ 4,496,055

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. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.

(c) Investment made with cash collateral received from securities on loan.

(d) Security or a portion of the security is on loan at period end.

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund

Income earned
(Amounts in thousands)

Fidelity Cash Central Fund

$ 18

Fidelity Securities Lending Cash Central Fund

330

Total

$ 348

Other Information

The following is a summary of the inputs used, as of May 31, 2012, 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
(Amounts in thousands)

Total

Level 1

Level 2

Level 3

Investments in Securities:

Equities:

Consumer Discretionary

$ 497,315

$ 497,315

$ -

$ -

Consumer Staples

680,044

612,849

67,195

-

Energy

391,251

391,251

-

-

Financials

701,959

701,959

-

-

Health Care

515,773

434,759

81,014

-

Industrials

463,145

463,145

-

-

Information Technology

672,956

672,956

-

-

Materials

86,760

86,760

-

-

Telecommunication Services

169,322

169,322

-

-

Utilities

297,845

277,908

19,937

-

Money Market Funds

16,094

16,094

-

-

Total Investments in Securities:

$ 4,492,464

$ 4,324,318

$ 168,146

$ -

Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited)

United States of America

89.0%

United Kingdom

4.1%

Ireland

2.3%

Switzerland

1.5%

Others (Individually Less Than 1%)

3.1%

 

100.0%

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Assets

Investment in securities, at value (including securities loaned of $4,433) - See accompanying schedule:

Unaffiliated issuers (cost $4,323,699)

$ 4,476,370

 

Fidelity Central Funds (cost $16,094)

16,094

 

Total Investments (cost $4,339,793)

 

$ 4,492,464

Foreign currency held at value (cost $139)

139

Receivable for fund shares sold

982

Dividends receivable

17,549

Distributions receivable from Fidelity Central Funds

269

Prepaid expenses

2

Other receivables

348

Total assets

4,511,753

 

 

 

Liabilities

Payable for investments purchased

$ 1,371

Payable for fund shares redeemed

6,650

Accrued management fee

1,755

Other affiliated payables

763

Other payables and accrued expenses

366

Collateral on securities loaned, at value

4,793

Total liabilities

15,698

 

 

 

Net Assets

$ 4,496,055

Net Assets consist of:

 

Paid in capital

$ 5,617,485

Undistributed net investment income

24,780

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(1,298,859)

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

152,649

Net Assets

$ 4,496,055

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Fidelity Equity Dividend Income:
Net Asset Value, offering price and redemption price per share ($4,057,874 ÷ 225,105 shares)

$ 18.03

 

 

 

Class K:
Net Asset Value, offering price and redemption price per share ($438,181 ÷ 24,308 shares)

$ 18.03

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

 Amounts in thousands

 Six months ended May 31, 2012 (Unaudited)

 

  

  

Investment Income

  

  

Dividends

 

$ 73,054

Income from Fidelity Central Funds

 

348

Total income

 

73,402

 

 

 

Expenses

Management fee

$ 10,722

Transfer agent fees

4,101

Accounting and security lending fees

536

Custodian fees and expenses

58

Independent trustees' compensation

15

Appreciation in deferred trustee compensation account

1

Registration fees

65

Audit

39

Legal

9

Interest

1

Miscellaneous

26

Total expenses before reductions

15,573

Expense reductions

(161)

15,412

Net investment income (loss)

57,990

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

 

 

Unaffiliated issuers

171,819

Foreign currency transactions

(138)

Total net realized gain (loss)

 

171,681

Change in net unrealized appreciation (depreciation) on:

Investment securities

92,246

Assets and liabilities in foreign currencies

(43)

Total change in net unrealized appreciation (depreciation)

 

92,203

Net gain (loss)

263,884

Net increase (decrease) in net assets resulting from operations

$ 321,874

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

 Amounts in thousands

Six months ended May 31, 2012
(Unaudited)

Year ended
November 30, 2011

Increase (Decrease) in Net Assets

 

 

Operations

 

 

Net investment income (loss)

$ 57,990

$ 93,398

Net realized gain (loss)

171,681

476,531

Change in net unrealized appreciation (depreciation)

92,203

(362,330)

Net increase (decrease) in net assets resulting
from operations

321,874

207,599

Distributions to shareholders from net investment income

(52,709)

(92,232)

Share transactions - net increase (decrease)

(315,092)

(718,611)

Total increase (decrease) in net assets

(45,927)

(603,244)

 

 

 

Net Assets

Beginning of period

4,541,982

5,145,226

End of period (including undistributed net investment income of $24,780 and undistributed net investment income of $20,488, respectively)

$ 4,496,055

$ 4,541,982

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Fidelity Equity Dividend Income

 

Six months ended
May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008

2007

Selected Per-Share Data

 

 

 

 

 

 

Net asset value, beginning of period

$ 17.03

$ 16.81

$ 16.16

$ 13.32

$ 24.29

$ 25.12

Income from Investment Operations

 

 

 

 

 

 

Net investment income (loss) D

  .22

  .33

  .26

  .27

  .33

  .33

Net realized and unrealized gain (loss)

  .98

  .21

  .63

  2.86

  (9.72)

  1.29

Total from investment operations

  1.20

  .54

  .89

  3.13

  (9.39)

  1.62

Distributions from net investment income

  (.20)

  (.32)

  (.24)

  (.29)

  (.36)

  (.38)

Distributions from net realized gain

  -

  -

  -

  -

  (1.22)

  (2.07)

Total distributions

  (.20)

  (.32)

  (.24)

  (.29)

  (1.58)

  (2.45)

Net asset value, end of period

$ 18.03

$ 17.03

$ 16.81

$ 16.16

$ 13.32

$ 24.29

Total Return B,C

  7.07%

  3.17%

  5.57%

  24.07%

  (41.13)%

  6.90%

Ratios to Average Net Assets E,G

 

 

 

 

 

Expenses before reductions

  .68% A

  .68%

  .69%

  .75%

  .67%

  .65%

Expenses net of fee waivers, if any

  .68% A

  .68%

  .69%

  .75%

  .67%

  .65%

Expenses net of all reductions

  .67% A

  .67%

  .69%

  .74%

  .67%

  .65%

Net investment income (loss)

  2.46% A

  1.83%

  1.57%

  1.98%

  1.70%

  1.34%

Supplemental Data

 

 

 

 

 

 

Net assets, end of period (in millions)

$ 4,058

$ 4,198

$ 4,777

$ 5,288

$ 5,212

$ 10,530

Portfolio turnover rate F

  78% A

  82%

  30%

  75%

  76%

  47%

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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class K

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008 G

Selected Per-Share Data

 

 

 

 

 

Net asset value, beginning of period

$ 17.03

$ 16.82

$ 16.16

$ 13.32

$ 21.42

Income from Investment Operations

 

 

 

 

 

Net investment income (loss) D

  .24

  .35

  .28

  .29

  .17

Net realized and unrealized gain (loss)

  .98

  .21

  .65

  2.87

  (8.08)

Total from investment operations

  1.22

  .56

  .93

  3.16

  (7.91)

Distributions from net investment income

  (.22)

  (.35)

  (.27)

  (.32)

  (.19)

Net asset value, end of period

$ 18.03

$ 17.03

$ 16.82

$ 16.16

$ 13.32

Total Return B,C

  7.15%

  3.26%

  5.80%

  24.30%

  (37.13)%

Ratios to Average Net Assets E,H

 

 

 

 

Expenses before reductions

  .54% A

  .54%

  .54%

  .56%

  .54% A

Expenses net of fee waivers, if any

  .54% A

  .54%

  .54%

  .56%

  .54% A

Expenses net of all reductions

  .53% A

  .53%

  .54%

  .56%

  .54% A

Net investment income (loss)

  2.60% A

  1.96%

  1.72%

  2.17%

  2.11% A

Supplemental Data

 

 

 

 

 

Net assets, end of period (in millions)

$ 438

$ 344

$ 368

$ 208

$ 154

Portfolio turnover rate F

  78% A

  82%

  30%

  75%

  76%

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 May 9, 2008 (commencement of sale of shares) to November 30, 2008.

H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended May 31, 2012 (Unaudited)

(Amounts in thousands except percentages)

1. Organization.

Fidelity® Equity Dividend Income Fund (the Fund)(formerly Fidelity Equity-Income II Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Fidelity Equity Dividend Income and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class.

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 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 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:

Semiannual Report

3. Significant Accounting Policies - continued

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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. The 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 May 31, 2012, 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:

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. 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 or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when significant market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities are used and are categorized as Level 2 in the hierarchy in these circumstances. Utilizing these techniques may result in transfers between Level 1 and Level 2. For restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are categorized as Level 3 in the hierarchy.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Security Valuation - continued

Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day and are categorized as Level 1 in the hierarchy.

New Accounting Pronouncements. 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 is effective during interim and annual periods beginning after December 15, 2011 and will result in additional disclosure for transfers between levels as well as expanded disclosure for securities categorized as Level 3 under the fair value hierarchy.

In December 2011, the Financial Accounting Standards Board issued Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update creates new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for interim and annual reporting periods beginning on or after January 1, 2013. Management is currently evaluating the impact of the update's adoption on the Fund's financial statement disclosures.

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.

Semiannual Report

3. Significant Accounting Policies - continued

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. 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.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. A fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. 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

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from 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.

Book-tax differences are primarily due to futures transactions, foreign currency transactions, market discount, equity-debt classifications, partnerships, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:

Gross unrealized appreciation

$ 318,342

Gross unrealized depreciation

(172,803)

Net unrealized appreciation (depreciation) on securities and other investments

$ 145,539

 

 

Tax cost

$ 4,346,925

Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. At November 30, 2011, capital loss carryforwards were as follows:

Fiscal year of expiration

 

2016

$ (410,732)

2017

(1,009,696)

Total capital loss carryforward

$ (1,420,428)

The Fund intends to elect to defer to its fiscal year ending November 30, 2012 approximately $44,502 of capital losses recognized during the period November 1, 2011 to November 30, 2011.

Semiannual Report

4. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities, aggregated $1,815,060 and $2,030,772, respectively.

5. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .46% of the Fund's average net assets.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Fidelity Equity Dividend Income. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:

 

Amount

% of
Average
Net Assets*

Fidelity Equity Dividend Income

$ 3,995

.19

Class K

106

.05

 

$ 4,101

 

* Annualized

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each 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 $33 for the period.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

5. Fees and Other Transactions with Affiliates - continued

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:

Borrower or Lender

Average Loan
Balance

Weighted Average Interest Rate

Interest
Expense

Borrower

$ 8,735

.38%

$ 1

6. Committed Line of Credit.

The Fund participates with other funds managed by FMR or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $7 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.

7. Security Lending.

The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. 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 rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $330. During the period, there were no securities loaned to FCM.

Semiannual Report

8. Bank Borrowings.

The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $2,806. The weighted average interest rate was .61%. The interest expense amounted to ninety five dollars under the bank borrowing program. At period end, there were no bank borrowings outstanding.

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 $161 for the period.

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

 

Six months ended
May 31,
2012

Year ended
November 30,
2011

From net investment income

 

 

Fidelity Equity Dividend Income

$ 47,929

$ 85,256

Class K

4,780

6,976

Total

$ 52,709

$ 92,232

11. Share Transactions.

Transactions for each class of shares were as follows:

 

Shares

Dollars

Six months ended
May 31,
2012

Year ended
November 30,
2011

Six months ended
May 31,
2012

Year ended
November 30,
2011

Fidelity Equity Dividend Income

 

 

 

 

Shares sold

4,736

12,006

$ 85,861

$ 216,001

Reinvestment of distributions

2,549

4,548

45,388

80,768

Shares redeemed

(28,727)

(54,092)

(521,419)

(982,318)

Net increase (decrease)

(21,442)

(37,538)

$ (390,170)

$ (685,549)

Class K

 

 

 

 

Shares sold

6,360

4,934

$ 115,894

$ 87,259

Reinvestment of distributions

267

394

4,780

6,976

Shares redeemed

(2,513)

(7,042)

(45,596)

(127,297)

Net increase (decrease)

4,114

(1,714)

$ 75,078

$ (33,062)

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

12. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research (Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Smithfield, RI

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Northern Trust Company

Chicago, IL

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®) abc436243 1-800-544-5555

abc436243 Automated line for quickest service 

EII-USAN-0712
1.786811.109

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

Fidelity®

Equity Dividend Income

Fund -
Class K

(formerly Fidelity Equity-Income II Fund)

Semiannual Report

May 31, 2012

(Fidelity Cover Art)

Contents

Shareholder Expense Example

(Click Here)

An example of shareholder expenses.

Investment Changes

(Click Here)

A summary of major shifts in the fund's investments over the past six months.

Investments

(Click Here)

A complete list of the fund's investments with their market values.

Financial Statements

(Click Here)

Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.

Notes

(Click Here)

Notes to the financial statements.

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 1-800-835-5092 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

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 Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2011 to May 31, 2012).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

Semiannual Report

Shareholder Expense Example - continued

 

Annualized Expense Ratio

Beginning
Account Value
December 1, 2011

Ending
Account Value
May 31, 2012

Expenses Paid
During Period*
December 1, 2011
to May 31, 2012

Fidelity Equity Dividend Income

.68%

 

 

 

Actual

 

$ 1,000.00

$ 1,070.70

$ 3.52

HypotheticalA

 

$ 1,000.00

$ 1,021.60

$ 3.44

Class K

.54%

 

 

 

Actual

 

$ 1,000.00

$ 1,071.50

$ 2.80

HypotheticalA

 

$ 1,000.00

$ 1,022.30

$ 2.73

A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Top Ten Stocks as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Chevron Corp.

4.0

2.5

Wells Fargo & Co.

3.8

1.8

Microsoft Corp.

3.4

3.4

General Electric Co.

3.3

2.6

AT&T, Inc.

3.2

2.2

IBM Corp.

2.8

0.0

Pfizer, Inc.

2.5

1.8

The Coca-Cola Co.

2.3

2.0

Merck & Co., Inc.

2.3

2.2

Procter & Gamble Co.

2.3

2.9

 

29.9

Top Five Market Sectors as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Financials

15.6

14.3

Consumer Staples

15.1

15.3

Information Technology

15.0

12.3

Health Care

11.5

10.3

Consumer Discretionary

11.1

8.6

Asset Allocation (% of fund's net assets)

As of May 31, 2012*

As of November 30, 2011**

abc436225

Stocks 99.6%

 

abc436225

Stocks 97.5%

 

abc436239

Short-Term Investments and Net Other Assets (Liabilities) 0.4%

 

abc436239

Short-Term Investments and Net Other Assets (Liabilities) 2.5%

 

* Foreign investments

11.0%

 

** Foreign investments

10.5%

 

abc436303

Semiannual Report

Investments May 31, 2012 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 99.6%

Shares

Value (000s)

CONSUMER DISCRETIONARY - 11.1%

Automobiles - 0.6%

Ford Motor Co.

2,741,100

$ 28,946

Hotels, Restaurants & Leisure - 2.6%

Brinker International, Inc.

215,100

6,950

Darden Restaurants, Inc.

533,100

27,577

McDonald's Corp.

608,900

54,399

Wyndham Worldwide Corp.

540,200

26,902

 

115,828

Media - 3.7%

Comcast Corp. Class A

2,217,400

64,105

The Walt Disney Co.

921,200

42,108

Time Warner Cable, Inc.

434,171

32,736

Time Warner, Inc.

773,143

26,650

 

165,599

Multiline Retail - 0.7%

Target Corp.

503,756

29,173

Specialty Retail - 2.7%

Foot Locker, Inc.

1,314,600

41,725

Home Depot, Inc.

1,053,400

51,975

Limited Brands, Inc.

213,200

9,458

Lowe's Companies, Inc.

654,000

17,475

 

120,633

Textiles, Apparel & Luxury Goods - 0.8%

VF Corp.

263,300

37,136

TOTAL CONSUMER DISCRETIONARY

497,315

CONSUMER STAPLES - 15.1%

Beverages - 4.4%

Anheuser-Busch InBev SA NV ADR

395,100

26,748

Diageo PLC

617,343

14,709

Dr Pepper Snapple Group, Inc.

703,900

29,043

PepsiCo, Inc.

335,571

22,768

The Coca-Cola Co.

1,377,942

102,974

 

196,242

Food & Staples Retailing - 1.3%

Safeway, Inc.

172,300

3,277

Sysco Corp.

242,000

6,754

Wal-Mart Stores, Inc.

757,900

49,885

 

59,916

Common Stocks - continued

Shares

Value (000s)

CONSUMER STAPLES - continued

Food Products - 1.8%

B&G Foods, Inc. Class A

200,000

$ 4,816

Kraft Foods, Inc. Class A

1,451,841

55,562

Unilever PLC sponsored ADR

722,900

22,829

 

83,207

Household Products - 4.2%

Colgate-Palmolive Co.

407,200

40,028

Kimberly-Clark Corp.

346,921

27,528

Procter & Gamble Co.

1,628,005

101,408

Reckitt Benckiser Group PLC

332,300

17,683

 

186,647

Tobacco - 3.4%

Altria Group, Inc.

728,400

23,447

British American Tobacco PLC sponsored ADR

146,700

13,802

Imperial Tobacco Group PLC

244,352

8,840

Japan Tobacco, Inc.

4,666

25,963

Lorillard, Inc.

116,100

14,350

Philip Morris International, Inc.

800,259

67,630

 

154,032

TOTAL CONSUMER STAPLES

680,044

ENERGY - 8.7%

Oil, Gas & Consumable Fuels - 8.7%

Atlas Pipeline Partners, LP

296,900

8,907

Bonavista Energy Corp. (d)

254,200

4,359

Chevron Corp.

1,817,170

178,651

Exxon Mobil Corp.

1,118,856

87,976

Legacy Reserves LP

224,100

5,535

Marathon Oil Corp.

585,268

14,579

Marathon Petroleum Corp.

90

3

Occidental Petroleum Corp.

227,100

18,002

Penn West Petroleum Ltd.

366,100

4,884

Royal Dutch Shell PLC Class A sponsored ADR

802,900

49,924

Williams Companies, Inc.

603,700

18,431

 

391,251

Common Stocks - continued

Shares

Value (000s)

FINANCIALS - 15.6%

Capital Markets - 0.6%

BlackRock, Inc. Class A

50,300

$ 8,591

State Street Corp.

439,300

18,104

 

26,695

Commercial Banks - 5.9%

Australia & New Zealand Banking Group Ltd.

401,129

8,166

Commerce Bancshares, Inc.

123,000

4,765

Huntington Bancshares, Inc.

1,836,700

12,012

M&T Bank Corp.

66,400

5,400

U.S. Bancorp

1,905,800

59,289

UMB Financial Corp.

121,700

5,935

Wells Fargo & Co.

5,279,708

169,215

 

264,782

Diversified Financial Services - 2.0%

CME Group, Inc.

32,870

8,466

JPMorgan Chase & Co.

2,480,808

82,239

 

90,705

Insurance - 2.5%

ACE Ltd.

274,400

19,847

AFLAC, Inc.

321,700

12,894

Allied World Assurance Co. Holdings Ltd.

214,900

16,526

Axis Capital Holdings Ltd.

693,600

22,819

MetLife, Inc.

567,517

16,577

Prudential Financial, Inc.

478,400

22,222

 

110,885

Real Estate Investment Trusts - 4.6%

AvalonBay Communities, Inc.

100,800

14,087

Boston Properties, Inc.

134,900

13,885

Camden Property Trust (SBI)

189,073

12,311

DDR Corp.

1,066,500

14,814

Douglas Emmett, Inc.

751,400

16,080

Glimcher Realty Trust

347,100

3,193

Kimco Realty Corp.

618,400

11,100

Lexington Corporate Properties Trust

1,158,100

9,624

Post Properties, Inc.

655,100

31,713

Prologis, Inc.

577,113

18,456

Common Stocks - continued

Shares

Value (000s)

FINANCIALS - continued

Real Estate Investment Trusts - continued

Simon Property Group, Inc.

243,800

$ 35,965

Ventas, Inc.

470,313

27,664

 

208,892

TOTAL FINANCIALS

701,959

HEALTH CARE - 11.5%

Biotechnology - 1.0%

Amgen, Inc.

657,900

45,737

Health Care Equipment & Supplies - 0.6%

Covidien PLC

530,800

27,485

Health Care Providers & Services - 0.8%

UnitedHealth Group, Inc.

455,100

25,381

WellPoint, Inc.

143,500

9,670

 

35,051

Pharmaceuticals - 9.1%

Eli Lilly & Co.

812,952

33,290

GlaxoSmithKline PLC

1,743,023

38,624

Johnson & Johnson

1,270,566

79,321

Merck & Co., Inc.

2,723,528

102,350

Pfizer, Inc.

5,099,435

111,525

Roche Holding AG (participation certificate)

131,178

20,529

Sanofi SA

320,927

21,861

 

407,500

TOTAL HEALTH CARE

515,773

INDUSTRIALS - 10.3%

Aerospace & Defense - 2.1%

Honeywell International, Inc.

834,900

46,471

Raytheon Co.

389,400

19,595

United Technologies Corp.

386,030

28,609

 

94,675

Air Freight & Logistics - 1.2%

United Parcel Service, Inc. Class B

746,000

55,905

Commercial Services & Supplies - 0.1%

Republic Services, Inc.

175,311

4,621

Electrical Equipment - 0.5%

Emerson Electric Co.

469,972

21,981

Common Stocks - continued

Shares

Value (000s)

INDUSTRIALS - continued

Industrial Conglomerates - 3.9%

3M Co.

342,000

$ 28,868

General Electric Co.

7,773,197

148,390

 

177,258

Machinery - 1.4%

Caterpillar, Inc.

144,900

12,696

Illinois Tool Works, Inc.

256,100

14,380

Ingersoll-Rand PLC

715,700

29,566

Stanley Black & Decker, Inc.

63,300

4,194

 

60,836

Road & Rail - 1.1%

Union Pacific Corp.

429,700

47,869

TOTAL INDUSTRIALS

463,145

INFORMATION TECHNOLOGY - 15.0%

Communications Equipment - 1.0%

Motorola Solutions, Inc.

434,200

20,876

QUALCOMM, Inc.

395,700

22,678

 

43,554

Computers & Peripherals - 1.0%

Apple, Inc. (a)

77,500

44,774

Electronic Equipment & Components - 0.3%

TE Connectivity Ltd.

474,616

14,912

IT Services - 4.7%

Accenture PLC Class A

809,800

46,240

Automatic Data Processing, Inc.

493,700

25,746

Fidelity National Information Services, Inc.

433,900

14,223

IBM Corp.

645,500

124,517

 

210,726

Semiconductors & Semiconductor Equipment - 4.6%

Analog Devices, Inc.

1,095,600

39,847

Intel Corp.

3,477,487

89,858

Intersil Corp. Class A

761,900

8,038

Linear Technology Corp.

765,200

22,206

Maxim Integrated Products, Inc.

522,900

13,156

Texas Instruments, Inc.

1,246,500

35,500

 

208,605

Common Stocks - continued

Shares

Value (000s)

INFORMATION TECHNOLOGY - continued

Software - 3.4%

Microsoft Corp.

5,151,926

$ 150,385

TOTAL INFORMATION TECHNOLOGY

672,956

MATERIALS - 1.9%

Chemicals - 1.9%

Air Products & Chemicals, Inc.

104,700

8,275

Dow Chemical Co.

625,832

19,438

E.I. du Pont de Nemours & Co.

482,200

23,271

Eastman Chemical Co.

266,500

12,408

LyondellBasell Industries NV Class A

592,200

23,368

 

86,760

TELECOMMUNICATION SERVICES - 3.8%

Diversified Telecommunication Services - 3.8%

AT&T, Inc.

4,199,000

143,480

CenturyLink, Inc.

658,900

25,842

 

169,322

UTILITIES - 6.6%

Electric Utilities - 5.1%

American Electric Power Co., Inc.

679,677

26,174

Duke Energy Corp.

2,180,600

47,930

Edison International

685,557

30,823

FirstEnergy Corp.

222,430

10,407

NextEra Energy, Inc.

806,572

52,701

Northeast Utilities

198,000

7,130

PPL Corp.

1,228,209

33,616

Southern Co.

467,300

21,454

 

230,235

Multi-Utilities - 1.5%

National Grid PLC

1,987,791

19,937

PG&E Corp.

388,900

16,995

Sempra Energy

471,900

30,678

 

67,610

TOTAL UTILITIES

297,845

TOTAL COMMON STOCKS

(Cost $4,323,699)


4,476,370

Money Market Funds - 0.3%

Shares

Value (000s)

Fidelity Cash Central Fund, 0.17% (b)

11,301,363

$ 11,301

Fidelity Securities Lending Cash Central Fund, 0.17% (b)(c)

4,792,900

4,793

TOTAL MONEY MARKET FUNDS

(Cost $16,094)


16,094

TOTAL INVESTMENT PORTFOLIO - 99.9%

(Cost $4,339,793)

4,492,464

NET OTHER ASSETS (LIABILITIES) - 0.1%

3,591

NET ASSETS - 100%

$ 4,496,055

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. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.

(c) Investment made with cash collateral received from securities on loan.

(d) Security or a portion of the security is on loan at period end.

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund

Income earned
(Amounts in thousands)

Fidelity Cash Central Fund

$ 18

Fidelity Securities Lending Cash Central Fund

330

Total

$ 348

Other Information

The following is a summary of the inputs used, as of May 31, 2012, 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
(Amounts in thousands)

Total

Level 1

Level 2

Level 3

Investments in Securities:

Equities:

Consumer Discretionary

$ 497,315

$ 497,315

$ -

$ -

Consumer Staples

680,044

612,849

67,195

-

Energy

391,251

391,251

-

-

Financials

701,959

701,959

-

-

Health Care

515,773

434,759

81,014

-

Industrials

463,145

463,145

-

-

Information Technology

672,956

672,956

-

-

Materials

86,760

86,760

-

-

Telecommunication Services

169,322

169,322

-

-

Utilities

297,845

277,908

19,937

-

Money Market Funds

16,094

16,094

-

-

Total Investments in Securities:

$ 4,492,464

$ 4,324,318

$ 168,146

$ -

Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited)

United States of America

89.0%

United Kingdom

4.1%

Ireland

2.3%

Switzerland

1.5%

Others (Individually Less Than 1%)

3.1%

 

100.0%

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Assets

Investment in securities, at value (including securities loaned of $4,433) - See accompanying schedule:

Unaffiliated issuers (cost $4,323,699)

$ 4,476,370

 

Fidelity Central Funds (cost $16,094)

16,094

 

Total Investments (cost $4,339,793)

 

$ 4,492,464

Foreign currency held at value (cost $139)

139

Receivable for fund shares sold

982

Dividends receivable

17,549

Distributions receivable from Fidelity Central Funds

269

Prepaid expenses

2

Other receivables

348

Total assets

4,511,753

 

 

 

Liabilities

Payable for investments purchased

$ 1,371

Payable for fund shares redeemed

6,650

Accrued management fee

1,755

Other affiliated payables

763

Other payables and accrued expenses

366

Collateral on securities loaned, at value

4,793

Total liabilities

15,698

 

 

 

Net Assets

$ 4,496,055

Net Assets consist of:

 

Paid in capital

$ 5,617,485

Undistributed net investment income

24,780

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(1,298,859)

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

152,649

Net Assets

$ 4,496,055

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Fidelity Equity Dividend Income:
Net Asset Value, offering price and redemption price per share ($4,057,874 ÷ 225,105 shares)

$ 18.03

 

 

 

Class K:
Net Asset Value, offering price and redemption price per share ($438,181 ÷ 24,308 shares)

$ 18.03

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

 Amounts in thousands

 Six months ended May 31, 2012 (Unaudited)

 

  

  

Investment Income

  

  

Dividends

 

$ 73,054

Income from Fidelity Central Funds

 

348

Total income

 

73,402

 

 

 

Expenses

Management fee

$ 10,722

Transfer agent fees

4,101

Accounting and security lending fees

536

Custodian fees and expenses

58

Independent trustees' compensation

15

Appreciation in deferred trustee compensation account

1

Registration fees

65

Audit

39

Legal

9

Interest

1

Miscellaneous

26

Total expenses before reductions

15,573

Expense reductions

(161)

15,412

Net investment income (loss)

57,990

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

 

 

Unaffiliated issuers

171,819

Foreign currency transactions

(138)

Total net realized gain (loss)

 

171,681

Change in net unrealized appreciation (depreciation) on:

Investment securities

92,246

Assets and liabilities in foreign currencies

(43)

Total change in net unrealized appreciation (depreciation)

 

92,203

Net gain (loss)

263,884

Net increase (decrease) in net assets resulting from operations

$ 321,874

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

 Amounts in thousands

Six months ended May 31, 2012
(Unaudited)

Year ended
November 30, 2011

Increase (Decrease) in Net Assets

 

 

Operations

 

 

Net investment income (loss)

$ 57,990

$ 93,398

Net realized gain (loss)

171,681

476,531

Change in net unrealized appreciation (depreciation)

92,203

(362,330)

Net increase (decrease) in net assets resulting
from operations

321,874

207,599

Distributions to shareholders from net investment income

(52,709)

(92,232)

Share transactions - net increase (decrease)

(315,092)

(718,611)

Total increase (decrease) in net assets

(45,927)

(603,244)

 

 

 

Net Assets

Beginning of period

4,541,982

5,145,226

End of period (including undistributed net investment income of $24,780 and undistributed net investment income of $20,488, respectively)

$ 4,496,055

$ 4,541,982

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Fidelity Equity Dividend Income

 

Six months ended
May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008

2007

Selected Per-Share Data

 

 

 

 

 

 

Net asset value, beginning of period

$ 17.03

$ 16.81

$ 16.16

$ 13.32

$ 24.29

$ 25.12

Income from Investment Operations

 

 

 

 

 

 

Net investment income (loss) D

  .22

  .33

  .26

  .27

  .33

  .33

Net realized and unrealized gain (loss)

  .98

  .21

  .63

  2.86

  (9.72)

  1.29

Total from investment operations

  1.20

  .54

  .89

  3.13

  (9.39)

  1.62

Distributions from net investment income

  (.20)

  (.32)

  (.24)

  (.29)

  (.36)

  (.38)

Distributions from net realized gain

  -

  -

  -

  -

  (1.22)

  (2.07)

Total distributions

  (.20)

  (.32)

  (.24)

  (.29)

  (1.58)

  (2.45)

Net asset value, end of period

$ 18.03

$ 17.03

$ 16.81

$ 16.16

$ 13.32

$ 24.29

Total Return B,C

  7.07%

  3.17%

  5.57%

  24.07%

  (41.13)%

  6.90%

Ratios to Average Net Assets E,G

 

 

 

 

 

Expenses before reductions

  .68% A

  .68%

  .69%

  .75%

  .67%

  .65%

Expenses net of fee waivers, if any

  .68% A

  .68%

  .69%

  .75%

  .67%

  .65%

Expenses net of all reductions

  .67% A

  .67%

  .69%

  .74%

  .67%

  .65%

Net investment income (loss)

  2.46% A

  1.83%

  1.57%

  1.98%

  1.70%

  1.34%

Supplemental Data

 

 

 

 

 

 

Net assets, end of period (in millions)

$ 4,058

$ 4,198

$ 4,777

$ 5,288

$ 5,212

$ 10,530

Portfolio turnover rate F

  78% A

  82%

  30%

  75%

  76%

  47%

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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class K

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008 G

Selected Per-Share Data

 

 

 

 

 

Net asset value, beginning of period

$ 17.03

$ 16.82

$ 16.16

$ 13.32

$ 21.42

Income from Investment Operations

 

 

 

 

 

Net investment income (loss) D

  .24

  .35

  .28

  .29

  .17

Net realized and unrealized gain (loss)

  .98

  .21

  .65

  2.87

  (8.08)

Total from investment operations

  1.22

  .56

  .93

  3.16

  (7.91)

Distributions from net investment income

  (.22)

  (.35)

  (.27)

  (.32)

  (.19)

Net asset value, end of period

$ 18.03

$ 17.03

$ 16.82

$ 16.16

$ 13.32

Total Return B,C

  7.15%

  3.26%

  5.80%

  24.30%

  (37.13)%

Ratios to Average Net Assets E,H

 

 

 

 

Expenses before reductions

  .54% A

  .54%

  .54%

  .56%

  .54% A

Expenses net of fee waivers, if any

  .54% A

  .54%

  .54%

  .56%

  .54% A

Expenses net of all reductions

  .53% A

  .53%

  .54%

  .56%

  .54% A

Net investment income (loss)

  2.60% A

  1.96%

  1.72%

  2.17%

  2.11% A

Supplemental Data

 

 

 

 

 

Net assets, end of period (in millions)

$ 438

$ 344

$ 368

$ 208

$ 154

Portfolio turnover rate F

  78% A

  82%

  30%

  75%

  76%

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 May 9, 2008 (commencement of sale of shares) to November 30, 2008.

H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended May 31, 2012 (Unaudited)

(Amounts in thousands except percentages)

1. Organization.

Fidelity® Equity Dividend Income Fund (the Fund)(formerly Fidelity Equity-Income II Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Fidelity Equity Dividend Income and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class.

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 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 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:

Semiannual Report

3. Significant Accounting Policies - continued

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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. The 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 May 31, 2012, 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:

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. 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 or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when significant market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities are used and are categorized as Level 2 in the hierarchy in these circumstances. Utilizing these techniques may result in transfers between Level 1 and Level 2. For restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are categorized as Level 3 in the hierarchy.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Security Valuation - continued

Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day and are categorized as Level 1 in the hierarchy.

New Accounting Pronouncements. 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 is effective during interim and annual periods beginning after December 15, 2011 and will result in additional disclosure for transfers between levels as well as expanded disclosure for securities categorized as Level 3 under the fair value hierarchy.

In December 2011, the Financial Accounting Standards Board issued Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update creates new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for interim and annual reporting periods beginning on or after January 1, 2013. Management is currently evaluating the impact of the update's adoption on the Fund's financial statement disclosures.

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.

Semiannual Report

3. Significant Accounting Policies - continued

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. 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.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. A fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. 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

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

Distributions are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from 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.

Book-tax differences are primarily due to futures transactions, foreign currency transactions, market discount, equity-debt classifications, partnerships, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:

Gross unrealized appreciation

$ 318,342

Gross unrealized depreciation

(172,803)

Net unrealized appreciation (depreciation) on securities and other investments

$ 145,539

 

 

Tax cost

$ 4,346,925

Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. At November 30, 2011, capital loss carryforwards were as follows:

Fiscal year of expiration

 

2016

$ (410,732)

2017

(1,009,696)

Total capital loss carryforward

$ (1,420,428)

The Fund intends to elect to defer to its fiscal year ending November 30, 2012 approximately $44,502 of capital losses recognized during the period November 1, 2011 to November 30, 2011.

Semiannual Report

4. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities, aggregated $1,815,060 and $2,030,772, respectively.

5. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .46% of the Fund's average net assets.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Fidelity Equity Dividend Income. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:

 

Amount

% of
Average
Net Assets*

Fidelity Equity Dividend Income

$ 3,995

.19

Class K

106

.05

 

$ 4,101

 

* Annualized

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each 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 $33 for the period.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

5. Fees and Other Transactions with Affiliates - continued

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:

Borrower or Lender

Average Loan
Balance

Weighted Average Interest Rate

Interest
Expense

Borrower

$ 8,735

.38%

$ 1

6. Committed Line of Credit.

The Fund participates with other funds managed by FMR or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $7 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.

7. Security Lending.

The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. 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 rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $330. During the period, there were no securities loaned to FCM.

Semiannual Report

8. Bank Borrowings.

The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity requirements. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average loan balance during the period for which loans were outstanding amounted to $2,806. The weighted average interest rate was .61%. The interest expense amounted to ninety five dollars under the bank borrowing program. At period end, there were no bank borrowings outstanding.

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 $161 for the period.

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

 

Six months ended
May 31,
2012

Year ended
November 30,
2011

From net investment income

 

 

Fidelity Equity Dividend Income

$ 47,929

$ 85,256

Class K

4,780

6,976

Total

$ 52,709

$ 92,232

11. Share Transactions.

Transactions for each class of shares were as follows:

 

Shares

Dollars

Six months ended
May 31,
2012

Year ended
November 30,
2011

Six months ended
May 31,
2012

Year ended
November 30,
2011

Fidelity Equity Dividend Income

 

 

 

 

Shares sold

4,736

12,006

$ 85,861

$ 216,001

Reinvestment of distributions

2,549

4,548

45,388

80,768

Shares redeemed

(28,727)

(54,092)

(521,419)

(982,318)

Net increase (decrease)

(21,442)

(37,538)

$ (390,170)

$ (685,549)

Class K

 

 

 

 

Shares sold

6,360

4,934

$ 115,894

$ 87,259

Reinvestment of distributions

267

394

4,780

6,976

Shares redeemed

(2,513)

(7,042)

(45,596)

(127,297)

Net increase (decrease)

4,114

(1,714)

$ 75,078

$ (33,062)

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

12. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research (Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Smithfield, RI

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Northern Trust Company

Chicago, IL 

EII-K-USAN-0712
1.863199.103

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

Fidelity®

Independence

Fund

Semiannual Report

May 31, 2012

(Fidelity Cover Art)

Contents

Shareholder Expense Example

(Click Here)

An example of shareholder expenses.

Investment Changes

(Click Here)

A summary of major shifts in the fund's investments over the past six months.

Investments

(Click Here)

A complete list of the fund's investments with their market values.

Financial Statements

(Click Here)

Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.

Notes

(Click Here)

Notes to the financial statements.

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) website at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

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 Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2011 to May 31, 2012).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

Semiannual Report

Shareholder Expense Example - continued

 

Annualized
Expense Ratio

Beginning
Account Value
December 1, 2011

Ending
Account Value
May 31, 2012

Expenses Paid
During Period*
December 1, 2011 to
May 31, 2012

Independence

.90%

 

 

 

Actual

 

$ 1,000.00

$ 1,055.70

$ 4.63

Hypothetical A

 

$ 1,000.00

$ 1,020.50

$ 4.55

Class K

.78%

 

 

 

Actual

 

$ 1,000.00

$ 1,056.70

$ 4.01

Hypothetical A

 

$ 1,000.00

$ 1,021.10

$ 3.94

A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Top Ten Stocks as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Apple, Inc.

8.1

4.3

United Continental Holdings, Inc.

3.2

2.4

Delta Air Lines, Inc.

2.4

1.7

Pioneer Natural Resources Co.

2.1

2.2

TJX Companies, Inc.

1.8

0.8

Macy's, Inc.

1.8

1.5

Concho Resources, Inc.

1.8

2.0

Continental Resources, Inc.

1.7

1.6

Vertex Pharmaceuticals, Inc.

1.6

0.7

UnitedHealth Group, Inc.

1.6

1.2

 

26.1

Top Five Market Sectors as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Consumer Discretionary

27.2

23.4

Information Technology

22.2

16.4

Health Care

13.9

9.9

Industrials

11.1

11.2

Energy

10.3

19.3

Asset Allocation (% of fund's net assets)

As of May 31, 2012*

As of November 30, 2011**

abc436225

Stocks 99.8%

 

abc436225

Stocks 92.0%

 

abc436312

Convertible
Securities 0.0%

 

abc436231

Convertible
Securities 0.2%

 

abc436239

Short-Term
Investments and
Net Other Assets (Liabilities) 0.2%

 

abc436239

Short-Term
Investments and
Net Other Assets (Liabilities) 7.8%

 

* Foreign investments

12.4%

 

** Foreign investments

15.7%

 

abc436317

Semiannual Report

Investments May 31, 2012 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 99.8%

Shares

Value (000s)

CONSUMER DISCRETIONARY - 27.2%

Auto Components - 1.5%

BorgWarner, Inc. (a)

125,000

$ 8,969

Delphi Automotive PLC

400,000

11,612

TRW Automotive Holdings Corp. (a)

782,200

30,169

 

50,750

Automobiles - 0.6%

Harley-Davidson, Inc.

400,000

19,272

Hotels, Restaurants & Leisure - 1.9%

Arcos Dorados Holdings, Inc.

430,000

5,814

Las Vegas Sands Corp.

300,000

13,854

Panera Bread Co. Class A (a)

161,600

23,747

Yum! Brands, Inc.

293,300

20,637

 

64,052

Household Durables - 3.4%

D.R. Horton, Inc.

1,475,000

24,485

KB Home (d)

1,532,709

11,112

PulteGroup, Inc. (a)

4,888,400

45,755

Toll Brothers, Inc. (a)

1,251,057

34,129

 

115,481

Internet & Catalog Retail - 1.3%

Expedia, Inc.

500,000

22,945

Priceline.com, Inc. (a)

35,000

21,892

 

44,837

Leisure Equipment & Products - 0.4%

Polaris Industries, Inc.

200,000

15,194

Media - 1.9%

CBS Corp. Class B

782,200

24,968

The Walt Disney Co.

875,500

40,019

 

64,987

Multiline Retail - 2.6%

Dollar Tree, Inc. (a)

244,400

25,217

Macy's, Inc.

1,613,200

61,382

 

86,599

Specialty Retail - 7.2%

Dick's Sporting Goods, Inc.

300,000

13,950

Home Depot, Inc.

977,700

48,240

Limited Brands, Inc.

1,026,600

45,540

Lowe's Companies, Inc.

1,200,000

32,064

O'Reilly Automotive, Inc. (a)

100,000

9,579

Common Stocks - continued

Shares

Value (000s)

CONSUMER DISCRETIONARY - continued

Specialty Retail - continued

PetSmart, Inc.

393,300

$ 25,344

Pier 1 Imports, Inc.

500,000

8,150

TJX Companies, Inc.

1,466,500

62,268

 

245,135

Textiles, Apparel & Luxury Goods - 6.4%

Arezzo Industria e Comercio SA

796,000

11,643

Burberry Group PLC

600,000

12,696

Coach, Inc.

400,000

26,980

Crocs, Inc. (a)

600,000

10,146

Michael Kors Holdings Ltd.

221,100

8,707

Michael Kors Holdings Ltd. (e)

535,647

18,984

NIKE, Inc. Class B

293,300

31,729

Prada SpA

2,000,000

12,317

PVH Corp.

245,200

19,861

Ralph Lauren Corp.

150,000

22,320

Under Armour, Inc. Class A (sub. vtg.) (a)

140,000

14,102

Vera Bradley, Inc. (a)(d)

283,889

6,209

VF Corp.

160,000

22,566

 

218,260

TOTAL CONSUMER DISCRETIONARY

924,567

CONSUMER STAPLES - 4.0%

Beverages - 1.0%

Monster Beverage Corp. (a)

486,600

35,327

Food & Staples Retailing - 0.2%

Drogasil SA

717,032

6,630

Food Products - 1.0%

Green Mountain Coffee Roasters, Inc. (a)

1,024,300

24,173

Orion Corp.

10,000

8,149

 

32,322

Personal Products - 1.1%

Hengan International Group Co. Ltd.

2,425,500

23,203

Nu Skin Enterprises, Inc. Class A

342,200

14,674

 

37,877

Common Stocks - continued

Shares

Value (000s)

CONSUMER STAPLES - continued

Tobacco - 0.7%

British American Tobacco PLC sponsored ADR

150,000

$ 14,112

Souza Cruz SA

700,000

9,371

 

23,483

TOTAL CONSUMER STAPLES

135,639

ENERGY - 10.3%

Energy Equipment & Services - 0.9%

Cameron International Corp. (a)

265,000

12,108

Ensco PLC Class A

100,000

4,491

McDermott International, Inc. (a)

600,000

6,090

Noble Corp.

300,000

9,381

 

32,070

Oil, Gas & Consumable Fuels - 9.4%

Anadarko Petroleum Corp.

491,100

29,957

Concho Resources, Inc. (a)

693,000

60,804

Continental Resources, Inc. (a)

798,200

58,157

EOG Resources, Inc.

100,000

9,930

Genel Energy PLC

638,500

6,237

Kosmos Energy Ltd.

367,500

3,829

Oasis Petroleum, Inc. (a)(d)

586,600

15,070

Occidental Petroleum Corp.

238,800

18,930

Pioneer Natural Resources Co.

751,500

72,670

SM Energy Co.

200,000

10,818

Whiting Petroleum Corp. (a)

300,400

12,980

Williams Companies, Inc.

600,000

18,318

 

317,700

TOTAL ENERGY

349,770

FINANCIALS - 6.1%

Capital Markets - 2.0%

Apollo Global Management LLC Class A

2,543,700

29,685

Morgan Stanley

2,933,100

39,186

 

68,871

Diversified Financial Services - 3.4%

Bank of America Corp.

1,500,000

11,025

Citigroup, Inc.

1,750,000

46,393

Common Stocks - continued

Shares

Value (000s)

FINANCIALS - continued

Diversified Financial Services - continued

JPMorgan Chase & Co.

1,150,000

$ 38,123

Moody's Corp.

500,000

18,295

 

113,836

Real Estate Investment Trusts - 0.4%

American Tower Corp.

193,300

12,541

Real Estate Management & Development - 0.2%

CBRE Group, Inc. (a)

400,000

6,580

Thrifts & Mortgage Finance - 0.1%

Nationstar Mortgage Holdings, Inc.

200,000

3,834

TOTAL FINANCIALS

205,662

HEALTH CARE - 13.9%

Biotechnology - 5.0%

Alexion Pharmaceuticals, Inc. (a)

314,400

28,475

Biogen Idec, Inc. (a)

300,000

39,225

Clovis Oncology, Inc.

164,600

2,932

Gilead Sciences, Inc. (a)

400,000

19,980

InterMune, Inc. (a)

250,000

2,608

Medivation, Inc. (a)

200,000

16,846

Progenics Pharmaceuticals, Inc. (a)

100,000

866

Synageva BioPharma Corp. (a)

100,000

3,901

Vertex Pharmaceuticals, Inc. (a)

920,700

55,279

 

170,112

Health Care Providers & Services - 4.2%

Express Scripts Holding Co. (a)

300,000

15,657

Health Net, Inc. (a)

250,000

6,405

HMS Holdings Corp. (a)

796,300

21,333

Humana, Inc.

557,900

42,618

UnitedHealth Group, Inc.

979,900

54,649

 

140,662

Health Care Technology - 0.8%

SXC Health Solutions Corp. (a)

293,300

26,949

Pharmaceuticals - 3.9%

Allergan, Inc.

150,000

13,538

Elan Corp. PLC sponsored ADR (a)

2,053,100

28,661

Perrigo Co.

150,000

15,584

Shire PLC sponsored ADR

314,200

26,522

Common Stocks - continued

Shares

Value (000s)

HEALTH CARE - continued

Pharmaceuticals - continued

Valeant Pharmaceuticals International, Inc. (Canada) (a)

825,560

$ 40,341

ViroPharma, Inc. (a)

400,000

8,056

 

132,702

TOTAL HEALTH CARE

470,425

INDUSTRIALS - 11.1%

Airlines - 7.5%

Copa Holdings SA Class A

263,000

21,834

Delta Air Lines, Inc. (a)

6,661,775

80,607

Southwest Airlines Co.

699,800

6,319

United Continental Holdings, Inc. (a)

4,344,100

109,341

US Airways Group, Inc. (a)(d)

2,750,000

36,355

 

254,456

Building Products - 0.5%

Owens Corning (a)

488,800

15,084

Commercial Services & Supplies - 0.5%

Aggreko PLC

400,000

13,600

Swisher Hygiene, Inc. (a)

1,531,745

2,743

 

16,343

Construction & Engineering - 0.3%

MasTec, Inc. (a)

300,000

4,905

Quanta Services, Inc. (a)

300,000

6,774

 

11,679

Electrical Equipment - 0.2%

Hubbell, Inc. Class B

100,000

7,892

Machinery - 0.5%

Chart Industries, Inc. (a)

150,000

9,369

Kennametal, Inc.

191,100

6,643

 

16,012

Marine - 0.0%

DryShips, Inc. (a)

500,000

1,105

Professional Services - 1.0%

Qualicorp SA

1,386,000

11,820

Robert Half International, Inc.

782,200

22,230

 

34,050

Common Stocks - continued

Shares

Value (000s)

INDUSTRIALS - continued

Trading Companies & Distributors - 0.6%

Air Lease Corp. Class A (a)(d)

498,200

$ 10,427

Mills Estruturas e Servicos de Engenharia SA

801,000

9,830

 

20,257

TOTAL INDUSTRIALS

376,878

INFORMATION TECHNOLOGY - 22.2%

Communications Equipment - 2.0%

Acme Packet, Inc. (a)

300,000

6,864

Cisco Systems, Inc.

644,200

10,520

QUALCOMM, Inc.

800,000

45,848

Riverbed Technology, Inc. (a)

250,000

4,100

 

67,332

Computers & Peripherals - 8.9%

3D Systems Corp. (a)(d)

225,000

6,840

Apple, Inc. (a)

474,300

274,016

EMC Corp. (a)

600,000

14,310

Lenovo Group Ltd.

9,048,000

7,694

 

302,860

Internet Software & Services - 2.8%

Bankrate, Inc. (d)

571,600

9,934

Cornerstone OnDemand, Inc. (a)

283,600

5,686

eBay, Inc. (a)

200,000

7,838

Facebook, Inc. Class B (a)(e)

171,740

4,580

IAC/InterActiveCorp

350,000

15,722

Liquidity Services, Inc. (a)

400,000

25,556

Rackspace Hosting, Inc. (a)

225,000

11,131

VeriSign, Inc.

400,000

15,292

 

95,739

IT Services - 1.4%

Cognizant Technology Solutions Corp. Class A (a)

191,700

11,167

MasterCard, Inc. Class A

13,200

5,366

Teradata Corp. (a)

200,000

13,296

Visa, Inc. Class A

150,000

17,280

 

47,109

Semiconductors & Semiconductor Equipment - 3.4%

ASML Holding NV

488,800

22,392

Freescale Semiconductor Holdings I Ltd.

1,260,800

11,599

Common Stocks - continued

Shares

Value (000s)

INFORMATION TECHNOLOGY - continued

Semiconductors & Semiconductor Equipment - continued

Intel Corp.

2,050,000

$ 52,972

NXP Semiconductors NV (a)

1,248,100

26,347

 

113,310

Software - 3.7%

Ariba, Inc. (a)

400,000

17,972

Citrix Systems, Inc. (a)

450,000

32,886

CommVault Systems, Inc. (a)

250,000

11,718

Informatica Corp. (a)

718,500

29,767

Microsoft Corp.

400,000

11,676

RealPage, Inc. (a)

275,941

4,926

salesforce.com, Inc. (a)

50,000

6,931

Splunk, Inc.

6,900

225

VMware, Inc. Class A (a)

100,000

9,301

 

125,402

TOTAL INFORMATION TECHNOLOGY

751,752

MATERIALS - 4.4%

Chemicals - 4.1%

Celanese Corp. Class A

150,000

5,972

CF Industries Holdings, Inc.

155,900

26,653

Dow Chemical Co.

408,400

12,685

Eastman Chemical Co.

400,000

18,624

FMC Corp.

300,000

15,291

Huntsman Corp.

600,000

7,680

LyondellBasell Industries NV Class A

471,500

18,605

PetroLogistics LP

350,000

4,900

Rockwood Holdings, Inc. (a)

253,300

12,260

Westlake Chemical Corp. (d)

317,700

17,311

 

139,981

Metals & Mining - 0.3%

First Quantum Minerals Ltd.

525,000

9,195

TOTAL MATERIALS

149,176

TELECOMMUNICATION SERVICES - 0.6%

Wireless Telecommunication Services - 0.6%

SBA Communications Corp. Class A (a)

400,000

20,780

TOTAL COMMON STOCKS

(Cost $3,047,965)


3,384,649

Money Market Funds - 1.0%

Shares

Value (000s)

Fidelity Cash Central Fund, 0.17% (b)

6,433,937

$ 6,434

Fidelity Securities Lending Cash Central Fund, 0.17% (b)(c)

28,634,358

28,634

TOTAL MONEY MARKET FUNDS

(Cost $35,068)


35,068

TOTAL INVESTMENT PORTFOLIO - 100.8%

(Cost $3,083,033)

3,419,717

NET OTHER ASSETS (LIABILITIES) - (0.8)%

(28,639)

NET ASSETS - 100%

$ 3,391,078

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. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.

(c) Investment made with cash collateral received from securities on loan.

(d) Security or a portion of the security is on loan at period end.

(e) 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 $23,564,000 or 0.7% of net assets.

Additional information on each restricted holding is as follows:

Security

Acquisition Date

Acquisition Cost (000s)

Facebook, Inc. Class B

3/31/11

$ 4,294

Michael Kors Holdings Ltd.

7/8/11

$ 6,492

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
(Amounts in thousands)

Fidelity Cash Central Fund

$ 27

Fidelity Securities Lending Cash Central Fund

460

Total

$ 487

Other Information

The following is a summary of the inputs used, as of May 31, 2012, 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 tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:

Description
(Amounts in thousands)

Total

Level 1

Level 2

Level 3

Investments in Securities:

Equities:

Consumer Discretionary

$ 924,567

$ 892,887

$ 31,680

$ -

Consumer Staples

135,639

135,639

-

-

Energy

349,770

343,533

6,237

-

Financials

205,662

205,662

-

-

Health Care

470,425

470,425

-

-

Industrials

376,878

360,535

16,343

-

Information Technology

751,752

747,172

4,580

-

Materials

149,176

149,176

-

-

Telecommunication Services

20,780

20,780

-

-

Money Market Funds

35,068

35,068

-

-

Total Investments in Securities:

$ 3,419,717

$ 3,360,877

$ 58,840

$ -

The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:

(Amounts in thousands)

 

Investments in Securities:

Beginning Balance

$ 12,794

Total Realized Gain (Loss)

-

Total Unrealized Gain (Loss)

-

Cost of Purchases

-

Proceeds of Sales

(8,500)

Amortization/Accretion

-

Transfers in to Level 3

-

Transfers out of Level 3

(4,294)

Ending Balance

$ -

The change in unrealized gain (loss) for the period attributable to Level 3 securities held at May 31, 2012

$ -

The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.

Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited)

United States of America

87.6%

Canada

2.3%

Netherlands

2.0%

Brazil

1.4%

United Kingdom

1.3%

Bailiwick of Jersey

1.3%

Others (Individually Less Than 1%)

4.1%

 

100.0%

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Assets

Investment in securities, at value (including securities loaned of $27,864) - See accompanying schedule:

Unaffiliated issuers (cost $3,047,965)

$ 3,384,649

 

Fidelity Central Funds (cost $35,068)

35,068

 

Total Investments (cost $3,083,033)

 

$ 3,419,717

Foreign currency held at value (cost $275)

275

Receivable for investments sold

6,617

Receivable for fund shares sold

635

Dividends receivable

2,761

Distributions receivable from Fidelity Central Funds

49

Prepaid expenses

2

Other receivables

126

Total assets

3,430,182

 

 

 

Liabilities

Payable for investments purchased

$ 6,053

Payable for fund shares redeemed

2,256

Accrued management fee

1,429

Other affiliated payables

558

Other payables and accrued expenses

174

Collateral on securities loaned, at value

28,634

Total liabilities

39,104

 

 

 

Net Assets

$ 3,391,078

Net Assets consist of:

 

Paid in capital

$ 3,900,263

Accumulated net investment loss

(4,271)

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(841,587)

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

336,673

Net Assets

$ 3,391,078

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Independence:
Net Asset Value, offering price and redemption price per share ($3,038,026 ÷ 129,117.7 shares)

$ 23.53

 

 

 

Class K:
Net Asset Value, offering price and redemption price per share ($353,052 ÷ 14,994.7 shares)

$ 23.55

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

 Amounts in thousands Six months ended May 31, 2012 (Unaudited)

 

  

  

Investment Income

  

  

Dividends

 

$ 13,583

Income from Fidelity Central Funds

 

487

Total income

 

14,070

 

 

 

Expenses

Management fee
Basic fee

$ 10,094

Performance adjustment

2,432

Transfer agent fees

2,956

Accounting and security lending fees

518

Custodian fees and expenses

16

Independent trustees' compensation

12

Registration fees

47

Audit

35

Legal

9

Miscellaneous

24

Total expenses before reductions

16,143

Expense reductions

(143)

16,000

Net investment income (loss)

(1,930)

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

 

 

Unaffiliated issuers

109,405

Foreign currency transactions

(236)

Total net realized gain (loss)

 

109,169

Change in net unrealized appreciation (depreciation) on:

Investment securities

93,534

Assets and liabilities in foreign currencies

98

Total change in net unrealized appreciation (depreciation)

 

93,632

Net gain (loss)

202,801

Net increase (decrease) in net assets resulting from operations

$ 200,871

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

 Amounts in thousands

Six months ended May 31, 2012
(Unaudited)

Year ended
November 30, 2011

Increase (Decrease) in Net Assets

 

 

Operations

 

 

Net investment income (loss)

$ (1,930)

$ 9,186

Net realized gain (loss)

109,169

543,773

Change in net unrealized appreciation (depreciation)

93,632

(682,954)

Net increase (decrease) in net assets resulting
from operations

200,871

(129,995)

Distributions to shareholders from net investment income

(9,642)

-

Share transactions - net increase (decrease)

(359,148)

(542,641)

Total increase (decrease) in net assets

(167,919)

(672,636)

 

 

 

Net Assets

Beginning of period

3,558,997

4,231,633

End of period (including accumulated net investment loss of $4,271 and undistributed net investment income of $7,301, respectively)

$ 3,391,078

$ 3,558,997

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Independence

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008

2007

Selected Per-Share Data

 

 

 

 

 

Net asset value, beginning of period

$ 22.35

$ 23.29

$ 19.10

$ 14.17

$ 27.60

$ 22.03

Income from Investment Operations

 

 

 

 

 

 

Net investment income (loss) D

  (.01)

  .05 G

  (.03)

  .06

  .08

  .07

Net realized and unrealized gain (loss)

  1.25

  (.99)

  4.26

  4.96

  (12.75)

  5.60

Total from investment operations

  1.24

  (.94)

  4.23

  5.02

  (12.67)

  5.67

Distributions from net investment income

  (.06)

  -

  (.03)

  (.09)

  (.01)

  (.10)

Distributions from net realized gain

  -

  -

  (.01)

  -

  (.75)

  -

Total distributions

  (.06)

  -

  (.04)

  (.09)

  (.76)

  (.10)

Net asset value, end of period

$ 23.53

$ 22.35

$ 23.29

$ 19.10

$ 14.17

$ 27.60

Total Return B,C

  5.57%

  (4.04)%

  22.18%

  35.62%

  (47.19)%

  25.85%

Ratios to Average Net Assets E,H

 

 

 

 

 

Expenses before reductions

  .90% A

  .70%

  .92%

  .92%

  .91%

  .90%

Expenses net of fee waivers, if any

  .90% A

  .70%

  .92%

  .92%

  .91%

  .90%

Expenses net of all reductions

  .90% A

  .70%

  .92%

  .91%

  .90%

  .89%

Net investment income (loss)

  (.12)% A

  .21% G

  (.16)%

  .36%

  .34%

  .31%

Supplemental Data

 

 

 

 

 

 

Net assets, end of period (in millions)

$ 3,038

$ 3,272

$ 3,988

$ 3,824

$ 3,407

$ 5,899

Portfolio turnover rate F

  105% A

  93%

  103%

  173%

  173%

  175%

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 Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .08%.

H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class K

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008 H

Selected Per-Share Data

 

 

 

 

 

Net asset value, beginning of period

$ 22.39

$ 23.31

$ 19.12

$ 14.18

$ 28.56

Income from Investment Operations

 

 

 

 

 

Net investment income (loss) D

  - J

  .08 G

  - J

  .09

  .09

Net realized and unrealized gain (loss)

  1.26

  (1.00)

  4.26

  4.96

  (14.47)

Total from investment operations

  1.26

  (.92)

  4.26

  5.05

  (14.38)

Distributions from net investment income

  (.10)

  -

  (.07)

  (.11)

  -

Distributions from net realized gain

  -

  -

  (.01)

  -

  -

Total distributions

  (.10)

  -

  (.07) K

  (.11)

  -

Net asset value, end of period

$ 23.55

$ 22.39

$ 23.31

$ 19.12

$ 14.18

Total Return B,C

  5.67%

  (3.95)%

  22.37%

  35.94%

  (50.35)%

Ratios to Average Net Assets E,I

 

 

 

 

Expenses before reductions

  .78% A

  .57%

  .78%

  .73%

  .79% A

Expenses net of fee waivers, if any

  .78% A

  .57%

  .78%

  .73%

  .79% A

Expenses net of all reductions

  .77% A

  .57%

  .77%

  .72%

  .78% A

Net investment income (loss)

  .01% A

  .34%G

  (.01)%

  .56%

  1.04% A

Supplemental Data

 

 

 

 

 

Net assets, end of period (in millions)

$ 353

$ 287

$ 243

$ 178

$ 78

Portfolio turnover rate F

  105% A

  93%

  103%

  173%

  173%

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 Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .21%.

H For the period May 9, 2008 (commencement of sale of shares) to November 30, 2008.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

J Amount represents less than $.01 per share.

K Total distributions of $.07 per share is comprised of distributions from net investment income of $.067 and distributions from net realized gain of $.005 per share.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended May 31, 2012 (Unaudited)

(Amounts in thousands except percentages)

1. Organization.

Fidelity® Independence Fund (the Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Independence and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.

2. Investments in Fidelity Central Funds.

The Fund invests 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 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:

Semiannual Report

3. Significant Accounting Policies - continued

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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. The 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 May 31, 2012, as well as a roll forward of Level 3 securities, 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:

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. 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 or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when significant market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities are used and are categorized as Level 2 in the hierarchy in these circumstances. Utilizing these techniques may result in transfers between Level 1 and Level 2. For restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are categorized as Level 3 in the hierarchy.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Security Valuation - continued

Investments in open-end mutual funds, including Fidelity Central Funds, are valued at their closing net asset value each business day and are categorized as Level 1 in the hierarchy.

New Accounting Pronouncements. 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 is effective during interim and annual periods beginning after December 15, 2011 and will result in additional disclosure for transfers between levels as well as expanded disclosure for securities categorized as Level 3 under the fair value hierarchy.

In December 2011, the Financial Accounting Standards Board issued Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update creates new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for interim and annual reporting periods beginning on or after January 1, 2013. Management is currently evaluating the impact of the update's adoption on the Fund's financial statement disclosures.

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

Semiannual Report

3. Significant Accounting Policies - continued

Investment Transactions and Income - continued

4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. As a result of a change in the estimate of the return of capital component of dividend income realized in the year ended November 30, 2011, dividend income has been reduced $3,940,010 with a corresponding increase to net unrealized appreciation (depreciation). The change in estimate has no impact on total net assets or total return of the Fund. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. 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.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. A fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

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 declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from 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.

Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensations, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:

Gross unrealized appreciation

$ 576,802

Gross unrealized depreciation

(245,444)

Net unrealized appreciation (depreciation) on securities and other investments

$ 331,358

 

 

Tax cost

$ 3,088,359

Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. At November 30, 2011, capital loss carryforwards were as follows:

Fiscal year of expiration

 

2016

$ (170,413,000)

2017

(772,898,000)

Total capital loss carryforward

$ (943,311,000)

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

Semiannual Report

4. Operating Policies - continued

Restricted Securities - continued

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, aggregated $1,847,852 and $1,942,603, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Independence as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .69% of the Fund's average net assets.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Independence. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:

 

Amount

% of
Average
Net Assets*

Independence

$ 2,870

.17

Class K

86

.05

 

$ 2,956

 

* Annualized

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

6. Fees and Other Transactions with Affiliates - continued

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each 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 $42 for the period.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:

Borrower or Lender

Average Loan
Balance

Weighted Average
Interest Rate

Interest
Expense

Borrower

$ 8,436

.40%

$ -*

* Amount represents three hundred and seventy-eight dollars.

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR or an affiliate in a $4.25 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 $5 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. Security Lending.

The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. 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

Semiannual Report

8. Security Lending - continued

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 rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $460, including $1 from securities loaned to FCM.

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 $143 for the period.

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

 

Six months ended
May 31,
2012

Year ended
November 30,
2011

From net investment income

 

 

Independence

$ 8,340

$ -

Class K

1,302

-

Total

$ 9,642

$ -

11. Share Transactions.

Transactions for each class of shares were as follows:

 

Shares

Dollars

 

Six months ended May 31,
2012

Year ended
November 30,
2011

Six months ended May 31,
2012

Year ended
November 30,
2011

Independence

 

 

 

 

Shares sold

2,853

10,435

$ 69,082

$ 255,584

Reinvestment of distributions

385

-

8,196

-

Shares redeemed

(20,553)

(35,226)

(491,052)

(854,587)

Net increase (decrease)

(17,315)

(24,791)

$ (413,774)

$ (599,003)

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

11. Share Transactions - continued

 

Shares

Dollars

 

Six months ended May 31,
2012

Year ended
November 30,
2011

Six months ended May 31,
2012

Year ended
November 30,
2011

Class K

 

 

 

 

Shares sold

4,352

5,587

$ 105,348

$ 134,810

Reinvestment of distributions

61

-

1,302

-

Shares redeemed

(2,217)

(3,230)

(52,024)

(78,448)

Net increase (decrease)

2,196

2,357

$ 54,626

$ 56,362

12. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research
(UK) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Smithfield, RI

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Northern Trust Company

Chicago, Illinois

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)

TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

Fidelity Automated Service
Telephone (FAST®) abc436243 1-800-544-5555

abc436243 Automated line for quickest service 

FRE-USAN-0712
1.786813.109

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

Fidelity®

Independence

Fund -
Class K

Semiannual Report

May 31, 2012

(Fidelity Cover Art)

Contents

Shareholder Expense Example

(Click Here)

An example of shareholder expenses.

Investment Changes

(Click Here)

A summary of major shifts in the fund's investments over the past six months.

Investments

(Click Here)

A complete list of the fund's investments with their market values.

Financial Statements

(Click Here)

Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.

Notes

(Click Here)

Notes to the financial statements.

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) website at http://www.sec.gov. You may also call 1-800-835-5092 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

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 Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (December 1, 2011 to May 31, 2012).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

Semiannual Report

Shareholder Expense Example - continued

 

Annualized
Expense Ratio

Beginning
Account Value
December 1, 2011

Ending
Account Value
May 31, 2012

Expenses Paid
During Period*
December 1, 2011 to
May 31, 2012

Independence

.90%

 

 

 

Actual

 

$ 1,000.00

$ 1,055.70

$ 4.63

Hypothetical A

 

$ 1,000.00

$ 1,020.50

$ 4.55

Class K

.78%

 

 

 

Actual

 

$ 1,000.00

$ 1,056.70

$ 4.01

Hypothetical A

 

$ 1,000.00

$ 1,021.10

$ 3.94

A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Top Ten Stocks as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Apple, Inc.

8.1

4.3

United Continental Holdings, Inc.

3.2

2.4

Delta Air Lines, Inc.

2.4

1.7

Pioneer Natural Resources Co.

2.1

2.2

TJX Companies, Inc.

1.8

0.8

Macy's, Inc.

1.8

1.5

Concho Resources, Inc.

1.8

2.0

Continental Resources, Inc.

1.7

1.6

Vertex Pharmaceuticals, Inc.

1.6

0.7

UnitedHealth Group, Inc.

1.6

1.2

 

26.1

Top Five Market Sectors as of May 31, 2012

 

% of fund's
net assets

% of fund's net assets
6 months ago

Consumer Discretionary

27.2

23.4

Information Technology

22.2

16.4

Health Care

13.9

9.9

Industrials

11.1

11.2

Energy

10.3

19.3

Asset Allocation (% of fund's net assets)

As of May 31, 2012*

As of November 30, 2011**

abc436225

Stocks 99.8%

 

abc436225

Stocks 92.0%

 

abc436312

Convertible
Securities 0.0%

 

abc436231

Convertible
Securities 0.2%

 

abc436239

Short-Term
Investments and
Net Other Assets (Liabilities) 0.2%

 

abc436239

Short-Term
Investments and
Net Other Assets (Liabilities) 7.8%

 

* Foreign investments

12.4%

 

** Foreign investments

15.7%

 

abc436332

Semiannual Report

Investments May 31, 2012 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 99.8%

Shares

Value (000s)

CONSUMER DISCRETIONARY - 27.2%

Auto Components - 1.5%

BorgWarner, Inc. (a)

125,000

$ 8,969

Delphi Automotive PLC

400,000

11,612

TRW Automotive Holdings Corp. (a)

782,200

30,169

 

50,750

Automobiles - 0.6%

Harley-Davidson, Inc.

400,000

19,272

Hotels, Restaurants & Leisure - 1.9%

Arcos Dorados Holdings, Inc.

430,000

5,814

Las Vegas Sands Corp.

300,000

13,854

Panera Bread Co. Class A (a)

161,600

23,747

Yum! Brands, Inc.

293,300

20,637

 

64,052

Household Durables - 3.4%

D.R. Horton, Inc.

1,475,000

24,485

KB Home (d)

1,532,709

11,112

PulteGroup, Inc. (a)

4,888,400

45,755

Toll Brothers, Inc. (a)

1,251,057

34,129

 

115,481

Internet & Catalog Retail - 1.3%

Expedia, Inc.

500,000

22,945

Priceline.com, Inc. (a)

35,000

21,892

 

44,837

Leisure Equipment & Products - 0.4%

Polaris Industries, Inc.

200,000

15,194

Media - 1.9%

CBS Corp. Class B

782,200

24,968

The Walt Disney Co.

875,500

40,019

 

64,987

Multiline Retail - 2.6%

Dollar Tree, Inc. (a)

244,400

25,217

Macy's, Inc.

1,613,200

61,382

 

86,599

Specialty Retail - 7.2%

Dick's Sporting Goods, Inc.

300,000

13,950

Home Depot, Inc.

977,700

48,240

Limited Brands, Inc.

1,026,600

45,540

Lowe's Companies, Inc.

1,200,000

32,064

O'Reilly Automotive, Inc. (a)

100,000

9,579

Common Stocks - continued

Shares

Value (000s)

CONSUMER DISCRETIONARY - continued

Specialty Retail - continued

PetSmart, Inc.

393,300

$ 25,344

Pier 1 Imports, Inc.

500,000

8,150

TJX Companies, Inc.

1,466,500

62,268

 

245,135

Textiles, Apparel & Luxury Goods - 6.4%

Arezzo Industria e Comercio SA

796,000

11,643

Burberry Group PLC

600,000

12,696

Coach, Inc.

400,000

26,980

Crocs, Inc. (a)

600,000

10,146

Michael Kors Holdings Ltd.

221,100

8,707

Michael Kors Holdings Ltd. (e)

535,647

18,984

NIKE, Inc. Class B

293,300

31,729

Prada SpA

2,000,000

12,317

PVH Corp.

245,200

19,861

Ralph Lauren Corp.

150,000

22,320

Under Armour, Inc. Class A (sub. vtg.) (a)

140,000

14,102

Vera Bradley, Inc. (a)(d)

283,889

6,209

VF Corp.

160,000

22,566

 

218,260

TOTAL CONSUMER DISCRETIONARY

924,567

CONSUMER STAPLES - 4.0%

Beverages - 1.0%

Monster Beverage Corp. (a)

486,600

35,327

Food & Staples Retailing - 0.2%

Drogasil SA

717,032

6,630

Food Products - 1.0%

Green Mountain Coffee Roasters, Inc. (a)

1,024,300

24,173

Orion Corp.

10,000

8,149

 

32,322

Personal Products - 1.1%

Hengan International Group Co. Ltd.

2,425,500

23,203

Nu Skin Enterprises, Inc. Class A

342,200

14,674

 

37,877

Common Stocks - continued

Shares

Value (000s)

CONSUMER STAPLES - continued

Tobacco - 0.7%

British American Tobacco PLC sponsored ADR

150,000

$ 14,112

Souza Cruz SA

700,000

9,371

 

23,483

TOTAL CONSUMER STAPLES

135,639

ENERGY - 10.3%

Energy Equipment & Services - 0.9%

Cameron International Corp. (a)

265,000

12,108

Ensco PLC Class A

100,000

4,491

McDermott International, Inc. (a)

600,000

6,090

Noble Corp.

300,000

9,381

 

32,070

Oil, Gas & Consumable Fuels - 9.4%

Anadarko Petroleum Corp.

491,100

29,957

Concho Resources, Inc. (a)

693,000

60,804

Continental Resources, Inc. (a)

798,200

58,157

EOG Resources, Inc.

100,000

9,930

Genel Energy PLC

638,500

6,237

Kosmos Energy Ltd.

367,500

3,829

Oasis Petroleum, Inc. (a)(d)

586,600

15,070

Occidental Petroleum Corp.

238,800

18,930

Pioneer Natural Resources Co.

751,500

72,670

SM Energy Co.

200,000

10,818

Whiting Petroleum Corp. (a)

300,400

12,980

Williams Companies, Inc.

600,000

18,318

 

317,700

TOTAL ENERGY

349,770

FINANCIALS - 6.1%

Capital Markets - 2.0%

Apollo Global Management LLC Class A

2,543,700

29,685

Morgan Stanley

2,933,100

39,186

 

68,871

Diversified Financial Services - 3.4%

Bank of America Corp.

1,500,000

11,025

Citigroup, Inc.

1,750,000

46,393

Common Stocks - continued

Shares

Value (000s)

FINANCIALS - continued

Diversified Financial Services - continued

JPMorgan Chase & Co.

1,150,000

$ 38,123

Moody's Corp.

500,000

18,295

 

113,836

Real Estate Investment Trusts - 0.4%

American Tower Corp.

193,300

12,541

Real Estate Management & Development - 0.2%

CBRE Group, Inc. (a)

400,000

6,580

Thrifts & Mortgage Finance - 0.1%

Nationstar Mortgage Holdings, Inc.

200,000

3,834

TOTAL FINANCIALS

205,662

HEALTH CARE - 13.9%

Biotechnology - 5.0%

Alexion Pharmaceuticals, Inc. (a)

314,400

28,475

Biogen Idec, Inc. (a)

300,000

39,225

Clovis Oncology, Inc.

164,600

2,932

Gilead Sciences, Inc. (a)

400,000

19,980

InterMune, Inc. (a)

250,000

2,608

Medivation, Inc. (a)

200,000

16,846

Progenics Pharmaceuticals, Inc. (a)

100,000

866

Synageva BioPharma Corp. (a)

100,000

3,901

Vertex Pharmaceuticals, Inc. (a)

920,700

55,279

 

170,112

Health Care Providers & Services - 4.2%

Express Scripts Holding Co. (a)

300,000

15,657

Health Net, Inc. (a)

250,000

6,405

HMS Holdings Corp. (a)

796,300

21,333

Humana, Inc.

557,900

42,618

UnitedHealth Group, Inc.

979,900

54,649

 

140,662

Health Care Technology - 0.8%

SXC Health Solutions Corp. (a)

293,300

26,949

Pharmaceuticals - 3.9%

Allergan, Inc.

150,000

13,538

Elan Corp. PLC sponsored ADR (a)

2,053,100

28,661

Perrigo Co.

150,000

15,584

Shire PLC sponsored ADR

314,200

26,522

Common Stocks - continued

Shares

Value (000s)

HEALTH CARE - continued

Pharmaceuticals - continued

Valeant Pharmaceuticals International, Inc. (Canada) (a)

825,560

$ 40,341

ViroPharma, Inc. (a)

400,000

8,056

 

132,702

TOTAL HEALTH CARE

470,425

INDUSTRIALS - 11.1%

Airlines - 7.5%

Copa Holdings SA Class A

263,000

21,834

Delta Air Lines, Inc. (a)

6,661,775

80,607

Southwest Airlines Co.

699,800

6,319

United Continental Holdings, Inc. (a)

4,344,100

109,341

US Airways Group, Inc. (a)(d)

2,750,000

36,355

 

254,456

Building Products - 0.5%

Owens Corning (a)

488,800

15,084

Commercial Services & Supplies - 0.5%

Aggreko PLC

400,000

13,600

Swisher Hygiene, Inc. (a)

1,531,745

2,743

 

16,343

Construction & Engineering - 0.3%

MasTec, Inc. (a)

300,000

4,905

Quanta Services, Inc. (a)

300,000

6,774

 

11,679

Electrical Equipment - 0.2%

Hubbell, Inc. Class B

100,000

7,892

Machinery - 0.5%

Chart Industries, Inc. (a)

150,000

9,369

Kennametal, Inc.

191,100

6,643

 

16,012

Marine - 0.0%

DryShips, Inc. (a)

500,000

1,105

Professional Services - 1.0%

Qualicorp SA

1,386,000

11,820

Robert Half International, Inc.

782,200

22,230

 

34,050

Common Stocks - continued

Shares

Value (000s)

INDUSTRIALS - continued

Trading Companies & Distributors - 0.6%

Air Lease Corp. Class A (a)(d)

498,200

$ 10,427

Mills Estruturas e Servicos de Engenharia SA

801,000

9,830

 

20,257

TOTAL INDUSTRIALS

376,878

INFORMATION TECHNOLOGY - 22.2%

Communications Equipment - 2.0%

Acme Packet, Inc. (a)

300,000

6,864

Cisco Systems, Inc.

644,200

10,520

QUALCOMM, Inc.

800,000

45,848

Riverbed Technology, Inc. (a)

250,000

4,100

 

67,332

Computers & Peripherals - 8.9%

3D Systems Corp. (a)(d)

225,000

6,840

Apple, Inc. (a)

474,300

274,016

EMC Corp. (a)

600,000

14,310

Lenovo Group Ltd.

9,048,000

7,694

 

302,860

Internet Software & Services - 2.8%

Bankrate, Inc. (d)

571,600

9,934

Cornerstone OnDemand, Inc. (a)

283,600

5,686

eBay, Inc. (a)

200,000

7,838

Facebook, Inc. Class B (a)(e)

171,740

4,580

IAC/InterActiveCorp

350,000

15,722

Liquidity Services, Inc. (a)

400,000

25,556

Rackspace Hosting, Inc. (a)

225,000

11,131

VeriSign, Inc.

400,000

15,292

 

95,739

IT Services - 1.4%

Cognizant Technology Solutions Corp. Class A (a)

191,700

11,167

MasterCard, Inc. Class A

13,200

5,366

Teradata Corp. (a)

200,000

13,296

Visa, Inc. Class A

150,000

17,280

 

47,109

Semiconductors & Semiconductor Equipment - 3.4%

ASML Holding NV

488,800

22,392

Freescale Semiconductor Holdings I Ltd.

1,260,800

11,599

Common Stocks - continued

Shares

Value (000s)

INFORMATION TECHNOLOGY - continued

Semiconductors & Semiconductor Equipment - continued

Intel Corp.

2,050,000

$ 52,972

NXP Semiconductors NV (a)

1,248,100

26,347

 

113,310

Software - 3.7%

Ariba, Inc. (a)

400,000

17,972

Citrix Systems, Inc. (a)

450,000

32,886

CommVault Systems, Inc. (a)

250,000

11,718

Informatica Corp. (a)

718,500

29,767

Microsoft Corp.

400,000

11,676

RealPage, Inc. (a)

275,941

4,926

salesforce.com, Inc. (a)

50,000

6,931

Splunk, Inc.

6,900

225

VMware, Inc. Class A (a)

100,000

9,301

 

125,402

TOTAL INFORMATION TECHNOLOGY

751,752

MATERIALS - 4.4%

Chemicals - 4.1%

Celanese Corp. Class A

150,000

5,972

CF Industries Holdings, Inc.

155,900

26,653

Dow Chemical Co.

408,400

12,685

Eastman Chemical Co.

400,000

18,624

FMC Corp.

300,000

15,291

Huntsman Corp.

600,000

7,680

LyondellBasell Industries NV Class A

471,500

18,605

PetroLogistics LP

350,000

4,900

Rockwood Holdings, Inc. (a)

253,300

12,260

Westlake Chemical Corp. (d)

317,700

17,311

 

139,981

Metals & Mining - 0.3%

First Quantum Minerals Ltd.

525,000

9,195

TOTAL MATERIALS

149,176

TELECOMMUNICATION SERVICES - 0.6%

Wireless Telecommunication Services - 0.6%

SBA Communications Corp. Class A (a)

400,000

20,780

TOTAL COMMON STOCKS

(Cost $3,047,965)


3,384,649

Money Market Funds - 1.0%

Shares

Value (000s)

Fidelity Cash Central Fund, 0.17% (b)

6,433,937

$ 6,434

Fidelity Securities Lending Cash Central Fund, 0.17% (b)(c)

28,634,358

28,634

TOTAL MONEY MARKET FUNDS

(Cost $35,068)


35,068

TOTAL INVESTMENT PORTFOLIO - 100.8%

(Cost $3,083,033)

3,419,717

NET OTHER ASSETS (LIABILITIES) - (0.8)%

(28,639)

NET ASSETS - 100%

$ 3,391,078

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. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.

(c) Investment made with cash collateral received from securities on loan.

(d) Security or a portion of the security is on loan at period end.

(e) 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 $23,564,000 or 0.7% of net assets.

Additional information on each restricted holding is as follows:

Security

Acquisition Date

Acquisition Cost (000s)

Facebook, Inc. Class B

3/31/11

$ 4,294

Michael Kors Holdings Ltd.

7/8/11

$ 6,492

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
(Amounts in thousands)

Fidelity Cash Central Fund

$ 27

Fidelity Securities Lending Cash Central Fund

460

Total

$ 487

Other Information

The following is a summary of the inputs used, as of May 31, 2012, 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 tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:

Description
(Amounts in thousands)

Total

Level 1

Level 2

Level 3

Investments in Securities:

Equities:

Consumer Discretionary

$ 924,567

$ 892,887

$ 31,680

$ -

Consumer Staples

135,639

135,639

-

-

Energy

349,770

343,533

6,237

-

Financials

205,662

205,662

-

-

Health Care

470,425

470,425

-

-

Industrials

376,878

360,535

16,343

-

Information Technology

751,752

747,172

4,580

-

Materials

149,176

149,176

-

-

Telecommunication Services

20,780

20,780

-

-

Money Market Funds

35,068

35,068

-

-

Total Investments in Securities:

$ 3,419,717

$ 3,360,877

$ 58,840

$ -

The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:

(Amounts in thousands)

 

Investments in Securities:

Beginning Balance

$ 12,794

Total Realized Gain (Loss)

-

Total Unrealized Gain (Loss)

-

Cost of Purchases

-

Proceeds of Sales

(8,500)

Amortization/Accretion

-

Transfers in to Level 3

-

Transfers out of Level 3

(4,294)

Ending Balance

$ -

The change in unrealized gain (loss) for the period attributable to Level 3 securities held at May 31, 2012

$ -

The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represent the beginning value of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. The cost of purchases and the proceeds of sales may include securities received or delivered through corporate actions or exchanges. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.

Distribution of investments by country or territory of incorporation, as a percentage of total net assets, is as follows. (Unaudited)

United States of America

87.6%

Canada

2.3%

Netherlands

2.0%

Brazil

1.4%

United Kingdom

1.3%

Bailiwick of Jersey

1.3%

Others (Individually Less Than 1%)

4.1%

 

100.0%

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Assets

Investment in securities, at value (including securities loaned of $27,864) - See accompanying schedule:

Unaffiliated issuers (cost $3,047,965)

$ 3,384,649

 

Fidelity Central Funds (cost $35,068)

35,068

 

Total Investments (cost $3,083,033)

 

$ 3,419,717

Foreign currency held at value (cost $275)

275

Receivable for investments sold

6,617

Receivable for fund shares sold

635

Dividends receivable

2,761

Distributions receivable from Fidelity Central Funds

49

Prepaid expenses

2

Other receivables

126

Total assets

3,430,182

 

 

 

Liabilities

Payable for investments purchased

$ 6,053

Payable for fund shares redeemed

2,256

Accrued management fee

1,429

Other affiliated payables

558

Other payables and accrued expenses

174

Collateral on securities loaned, at value

28,634

Total liabilities

39,104

 

 

 

Net Assets

$ 3,391,078

Net Assets consist of:

 

Paid in capital

$ 3,900,263

Accumulated net investment loss

(4,271)

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

(841,587)

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

336,673

Net Assets

$ 3,391,078

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

 Amounts in thousands (except per-share amounts)

May 31, 2012 (Unaudited)

 

 

 

Independence:
Net Asset Value, offering price and redemption price per share ($3,038,026 ÷ 129,117.7 shares)

$ 23.53

 

 

 

Class K:
Net Asset Value, offering price and redemption price per share ($353,052 ÷ 14,994.7 shares)

$ 23.55

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

 Amounts in thousands Six months ended May 31, 2012 (Unaudited)

 

  

  

Investment Income

  

  

Dividends

 

$ 13,583

Income from Fidelity Central Funds

 

487

Total income

 

14,070

 

 

 

Expenses

Management fee
Basic fee

$ 10,094

Performance adjustment

2,432

Transfer agent fees

2,956

Accounting and security lending fees

518

Custodian fees and expenses

16

Independent trustees' compensation

12

Registration fees

47

Audit

35

Legal

9

Miscellaneous

24

Total expenses before reductions

16,143

Expense reductions

(143)

16,000

Net investment income (loss)

(1,930)

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

 

 

Unaffiliated issuers

109,405

Foreign currency transactions

(236)

Total net realized gain (loss)

 

109,169

Change in net unrealized appreciation (depreciation) on:

Investment securities

93,534

Assets and liabilities in foreign currencies

98

Total change in net unrealized appreciation (depreciation)

 

93,632

Net gain (loss)

202,801

Net increase (decrease) in net assets resulting from operations

$ 200,871

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

 Amounts in thousands

Six months ended May 31, 2012
(Unaudited)

Year ended
November 30, 2011

Increase (Decrease) in Net Assets

 

 

Operations

 

 

Net investment income (loss)

$ (1,930)

$ 9,186

Net realized gain (loss)

109,169

543,773

Change in net unrealized appreciation (depreciation)

93,632

(682,954)

Net increase (decrease) in net assets resulting
from operations

200,871

(129,995)

Distributions to shareholders from net investment income

(9,642)

-

Share transactions - net increase (decrease)

(359,148)

(542,641)

Total increase (decrease) in net assets

(167,919)

(672,636)

 

 

 

Net Assets

Beginning of period

3,558,997

4,231,633

End of period (including accumulated net investment loss of $4,271 and undistributed net investment income of $7,301, respectively)

$ 3,391,078

$ 3,558,997

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Independence

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008

2007

Selected Per-Share Data

 

 

 

 

 

Net asset value, beginning of period

$ 22.35

$ 23.29

$ 19.10

$ 14.17

$ 27.60

$ 22.03

Income from Investment Operations

 

 

 

 

 

 

Net investment income (loss) D

  (.01)

  .05 G

  (.03)

  .06

  .08

  .07

Net realized and unrealized gain (loss)

  1.25

  (.99)

  4.26

  4.96

  (12.75)

  5.60

Total from investment operations

  1.24

  (.94)

  4.23

  5.02

  (12.67)

  5.67

Distributions from net investment income

  (.06)

  -

  (.03)

  (.09)

  (.01)

  (.10)

Distributions from net realized gain

  -

  -

  (.01)

  -

  (.75)

  -

Total distributions

  (.06)

  -

  (.04)

  (.09)

  (.76)

  (.10)

Net asset value, end of period

$ 23.53

$ 22.35

$ 23.29

$ 19.10

$ 14.17

$ 27.60

Total Return B,C

  5.57%

  (4.04)%

  22.18%

  35.62%

  (47.19)%

  25.85%

Ratios to Average Net Assets E,H

 

 

 

 

 

Expenses before reductions

  .90% A

  .70%

  .92%

  .92%

  .91%

  .90%

Expenses net of fee waivers, if any

  .90% A

  .70%

  .92%

  .92%

  .91%

  .90%

Expenses net of all reductions

  .90% A

  .70%

  .92%

  .91%

  .90%

  .89%

Net investment income (loss)

  (.12)% A

  .21% G

  (.16)%

  .36%

  .34%

  .31%

Supplemental Data

 

 

 

 

 

 

Net assets, end of period (in millions)

$ 3,038

$ 3,272

$ 3,988

$ 3,824

$ 3,407

$ 5,899

Portfolio turnover rate F

  105% A

  93%

  103%

  173%

  173%

  175%

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 Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .08%.

H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class K

 

Six months ended May 31, 2012

Years ended November 30,

 

(Unaudited)

2011

2010

2009

2008 H

Selected Per-Share Data

 

 

 

 

 

Net asset value, beginning of period

$ 22.39

$ 23.31

$ 19.12

$ 14.18

$ 28.56

Income from Investment Operations

 

 

 

 

 

Net investment income (loss) D

  - J

  .08 G

  - J

  .09

  .09

Net realized and unrealized gain (loss)

  1.26

  (1.00)

  4.26

  4.96

  (14.47)

Total from investment operations

  1.26

  (.92)

  4.26

  5.05

  (14.38)

Distributions from net investment income

  (.10)

  -

  (.07)

  (.11)

  -

Distributions from net realized gain

  -

  -

  (.01)

  -

  -

Total distributions

  (.10)

  -

  (.07) K

  (.11)

  -

Net asset value, end of period

$ 23.55

$ 22.39

$ 23.31

$ 19.12

$ 14.18

Total Return B,C

  5.67%

  (3.95)%

  22.37%

  35.94%

  (50.35)%

Ratios to Average Net Assets E,I

 

 

 

 

Expenses before reductions

  .78% A

  .57%

  .78%

  .73%

  .79% A

Expenses net of fee waivers, if any

  .78% A

  .57%

  .78%

  .73%

  .79% A

Expenses net of all reductions

  .77% A

  .57%

  .77%

  .72%

  .78% A

Net investment income (loss)

  .01% A

  .34%G

  (.01)%

  .56%

  1.04% A

Supplemental Data

 

 

 

 

 

Net assets, end of period (in millions)

$ 353

$ 287

$ 243

$ 178

$ 78

Portfolio turnover rate F

  105% A

  93%

  103%

  173%

  173%

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 Investment income per share reflects a large, non-recurring dividend which amounted to $.03 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .21%.

H For the period May 9, 2008 (commencement of sale of shares) to November 30, 2008.

I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

J Amount represents less than $.01 per share.

K Total distributions of $.07 per share is comprised of distributions from net investment income of $.067 and distributions from net realized gain of $.005 per share.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended May 31, 2012 (Unaudited)

(Amounts in thousands except percentages)

1. Organization.

Fidelity® Independence Fund (the Fund) is a fund of Fidelity Financial Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Independence and Class K shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent fees incurred. Certain expense reductions may also differ by class. The Fund's investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.

2. Investments in Fidelity Central Funds.

The Fund invests 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 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:

Semiannual Report

3. Significant Accounting Policies - continued

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. 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. The 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 May 31, 2012, as well as a roll forward of Level 3 securities, 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:

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. 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 or may be valued using the last available price and are generally categorized as Level 2 in the hierarchy. For foreign equity securities, when significant market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities are used and are categorized as Level 2 in the hierarchy in these circumstances. Utilizing these techniques may result in transfers between Level 1 and Level 2. For restricted equity securities and private placements where observable inputs are limited, assumptions about market activity and risk are used and these securities are categorized as Level 3 in the hierarchy.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Security Valuation - continued

Investments in open-end mutual funds, including Fidelity Central Funds, are valued at their closing net asset value each business day and are categorized as Level 1 in the hierarchy.

New Accounting Pronouncements. 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 is effective during interim and annual periods beginning after December 15, 2011 and will result in additional disclosure for transfers between levels as well as expanded disclosure for securities categorized as Level 3 under the fair value hierarchy.

In December 2011, the Financial Accounting Standards Board issued Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The update creates new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for interim and annual reporting periods beginning on or after January 1, 2013. Management is currently evaluating the impact of the update's adoption on the Fund's financial statement disclosures.

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

Semiannual Report

3. Significant Accounting Policies - continued

Investment Transactions and Income - continued

4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. As a result of a change in the estimate of the return of capital component of dividend income realized in the year ended November 30, 2011, dividend income has been reduced $3,940,010 with a corresponding increase to net unrealized appreciation (depreciation). The change in estimate has no impact on total net assets or total return of the Fund. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. 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.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. A fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

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 declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from 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.

Book-tax differences are primarily due to foreign currency transactions, partnerships, deferred trustees compensations, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:

Gross unrealized appreciation

$ 576,802

Gross unrealized depreciation

(245,444)

Net unrealized appreciation (depreciation) on securities and other investments

$ 331,358

 

 

Tax cost

$ 3,088,359

Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. Under the Regulated Investment Company Modernization Act of 2010 (the Act), the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period and such capital losses are required to be used prior to any losses that expire. At November 30, 2011, capital loss carryforwards were as follows:

Fiscal year of expiration

 

2016

$ (170,413,000)

2017

(772,898,000)

Total capital loss carryforward

$ (943,311,000)

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

Semiannual Report

4. Operating Policies - continued

Restricted Securities - continued

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, aggregated $1,847,852 and $1,942,603, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the Fund's average net assets and an annualized group fee rate that averaged .26% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the Fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the relative investment performance of Independence as compared to an appropriate benchmark index. For the period, the total annualized management fee rate, including the performance adjustment, was .69% of the Fund's average net assets.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of Independence. FIIOC receives an asset-based fee of Class K's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, transfer agent fees for each class were as follows:

 

Amount

% of
Average
Net Assets*

Independence

$ 2,870

.17

Class K

86

.05

 

$ 2,956

 

* Annualized

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

6. Fees and Other Transactions with Affiliates - continued

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each 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 $42 for the period.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:

Borrower or Lender

Average Loan
Balance

Weighted Average
Interest Rate

Interest
Expense

Borrower

$ 8,436

.40%

$ -*

* Amount represents three hundred and seventy-eight dollars.

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR or an affiliate in a $4.25 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 $5 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. Security Lending.

The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. 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

Semiannual Report

8. Security Lending - continued

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 rebates paid to borrowers and any lending agent fees associated with the loan, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $460, including $1 from securities loaned to FCM.

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 $143 for the period.

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

 

Six months ended
May 31,
2012

Year ended
November 30,
2011

From net investment income

 

 

Independence

$ 8,340

$ -

Class K

1,302

-

Total

$ 9,642

$ -

11. Share Transactions.

Transactions for each class of shares were as follows:

 

Shares

Dollars

 

Six months ended May 31,
2012

Year ended
November 30,
2011

Six months ended May 31,
2012

Year ended
November 30,
2011

Independence

 

 

 

 

Shares sold

2,853

10,435

$ 69,082

$ 255,584

Reinvestment of distributions

385

-

8,196

-

Shares redeemed

(20,553)

(35,226)

(491,052)

(854,587)

Net increase (decrease)

(17,315)

(24,791)

$ (413,774)

$ (599,003)

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

11. Share Transactions - continued

 

Shares

Dollars

 

Six months ended May 31,
2012

Year ended
November 30,
2011

Six months ended May 31,
2012

Year ended
November 30,
2011

Class K

 

 

 

 

Shares sold

4,352

5,587

$ 105,348

$ 134,810

Reinvestment of distributions

61

-

1,302

-

Shares redeemed

(2,217)

(3,230)

(52,024)

(78,448)

Net increase (decrease)

2,196

2,357

$ 54,626

$ 56,362

12. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research
(UK) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Smithfield, RI

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Northern Trust Company

Chicago, Illinois 

FRE-K-USAN-0712
1.863218.103

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

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 Financial 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 Financial 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 Financial Trust

By:

/s/Kenneth B. Robins

 

Kenneth B. Robins

 

President and Treasurer

 

 

Date:

July 26, 2012

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:

July 26, 2012

By:

/s/Christine Reynolds

 

Christine Reynolds

 

Chief Financial Officer

 

 

Date:

July 26, 2012