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 811-01352
Fidelity Devonshire Trust
(Exact name of registrant as specified in charter)
245 Summer St., Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Cynthia Lo Bessette, Secretary
245 Summer St.
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code:
617-563-7000
| |
Date of fiscal year end: | January 31 |
|
|
Date of reporting period: | January 31, 2020 |
Item 1.
Reports to Stockholders
Fidelity® Equity-Income Fund
Annual Report
January 31, 2020
See the inside front cover for important information about access to your fund’s shareholder reports.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of a fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a financial advisor, broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a fund electronically, by contacting your financial intermediary. For Fidelity customers, visit Fidelity's web site or call Fidelity using the contact information listed below.
You may elect to receive all future reports in paper free of charge. If you wish to continue receiving paper copies of your shareholder reports, you may contact your financial intermediary or, if you are a Fidelity customer, visit Fidelity’s website, or call Fidelity at the applicable toll-free number listed below. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
| Account Type | Website | Phone Number |
| Brokerage, Mutual Fund, or Annuity Contracts: | fidelity.com/mailpreferences | 1-800-343-3548 |
| Employer Provided Retirement Accounts: | netbenefits.fidelity.com/preferences (choose 'no' under Required Disclosures to continue to print) | 1-800-343-0860 |
| Advisor Sold Accounts Serviced Through Your Financial Intermediary: | Contact Your Financial Intermediary | Your Financial Intermediary's phone number |
| Advisor Sold Accounts Serviced by Fidelity: | institutional.fidelity.com | 1-877-208-0098 |
Contents
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 if you’re an individual investing directly with Fidelity, call 1-800-835-5092 if you’re a plan sponsor or participant with Fidelity as your recordkeeper or call 1-877-208-0098 on institutional accounts or if you’re an advisor or invest through one 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. © 2020 FMR LLC. All rights reserved.
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-PORT. Forms N-PORT are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-PORT 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.institutional.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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended January 31, 2020 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Equity-Income Fund | 16.69% | 8.84% | 10.50% |
| Class K | 16.77% | 8.95% | 10.63% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Equity-Income Fund, a class of the fund, on January 31, 2010.
The chart shows how the value of your investment would have changed, and also shows how the Russell 3000® Value Index performed over the same period.
| Period Ending Values |
| $27,141 | Fidelity® Equity-Income Fund |
| $30,410 | Russell 3000® Value Index |
Management's Discussion of Fund Performance
Market Recap: U.S. stocks rolled for the 12 months ending January 31, 2020, with the S&P 500
® index gaining 21.68%, despite persistent, nagging concerns about global economic growth and trade. After a rough end to 2018, equities sharply reversed course to begin 2019 amid upbeat company earnings and signs the Federal Reserve may pause on rates. The uptrend extended until May, when the index sunk as trade talks between the U.S. and China broke down. The bull market roared back to record a series of highs in July, when the Fed cut interest rates for the first time since 2008. Volatility intensified in August, as the Treasury yield curve inverted, which some investors viewed as a sign the U.S. economy could be heading for recession. But the market proved resilient, hitting a new high on October 30, when the Fed lowered rates for the third time in 2019, and moving higher through December 31. The new year began with a flattish January, with growing anxiety related to the new coronavirus outbreak and its impact on the global economy. By sector, information technology (+46%) led the way, driven by strong growth trends. The defensive utilities sector (+30%) also stood out, while communication services and consumer staples were about in line with the broader market. Conversely, energy (-11%) was by far the weakest – struggling due to sluggish oil prices – followed by several strong gainers that still lagged: materials (+11%), health care (+12%), industrials (+16%), consumer discretionary (+17%), and financials and real estate (+18% each).
Comments from Portfolio Manager Ramona Persaud: For the fiscal year, the fund's share classes gained about 17%, ahead of the 14.14% advance of the benchmark Russell 3000
® Value Index. The fund’s outperformance of the benchmark was driven by security selection, particularly within two industries: pharmaceuticals, biotechnology & life sciences and diversified financials. My choices within pockets of the information technology sector also helped, led by an overweighting in software maker Microsoft (+64%) and a non-benchmark investment in consumer electronics giant Apple (+88%). Shares of Microsoft were boosted by the company’s transition to cloud-computing services to help clients store and manage data. Apple’s stock benefited in large part from surprisingly strong growth for subscription services and its fast-growing wearables business. A non-benchmark position in private-equity firm and alternative asset manager Blackstone Group (+85%) was another notable positive. Conversely, the fund’s cash position of about 4%, on average, detracted amid the rising market backdrop. Also, it hurt to not own chipmaker and benchmark component Intel for nearly the entire 12 months, as it rose 39%. An overweighting in chemicals giant DuPont de Nemours (-35%) also hurt relative performance.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Note to shareholders: On April 1, 2019, Adam Kramer came off of the fund, leaving Ramona Persaud as sole manager.
Investment Summary (Unaudited)
Top Ten Stocks as of January 31, 2020
| | % of fund's net assets |
| JPMorgan Chase & Co. | 4.0 |
| Berkshire Hathaway, Inc. Class B | 3.3 |
| Johnson & Johnson | 3.3 |
| Bank of America Corp. | 2.9 |
| Wells Fargo & Co. | 2.4 |
| Citigroup, Inc. | 2.3 |
| Walmart, Inc. | 2.3 |
| Verizon Communications, Inc. | 2.3 |
| The Walt Disney Co. | 2.2 |
| McDonald's Corp. | 2.2 |
| | 27.2 |
Top Five Market Sectors as of January 31, 2020
| | % of fund's net assets |
| Financials | 24.8 |
| Health Care | 14.0 |
| Consumer Staples | 9.7 |
| Communication Services | 9.2 |
| Industrials | 8.9 |
Asset Allocation (% of fund's net assets)
| As of January 31, 2020 * |
| | Stocks | 99.3% |
| | Other Investments | 0.2% |
| | Short-Term Investments and Net Other Assets (Liabilities) | 0.5% |
* Foreign investments - 13.4%
Schedule of Investments January 31, 2020
Showing Percentage of Net Assets
| Common Stocks - 99.3% | | | |
| | | Shares | Value (000s) |
| COMMUNICATION SERVICES - 9.2% | | | |
| Diversified Telecommunication Services - 3.6% | | | |
| AT&T, Inc. | | 2,204,689 | $82,940 |
| Verizon Communications, Inc. | | 2,338,260 | 138,986 |
| | | | 221,926 |
| Entertainment - 2.2% | | | |
| The Walt Disney Co. | | 987,900 | 136,636 |
| Media - 2.6% | | | |
| Comcast Corp. Class A | | 2,803,414 | 121,079 |
| Interpublic Group of Companies, Inc. | | 1,546,400 | 35,103 |
| | | | 156,182 |
| Wireless Telecommunication Services - 0.8% | | | |
| T-Mobile U.S., Inc. (a) | | 632,800 | 50,111 |
|
| TOTAL COMMUNICATION SERVICES | | | 564,855 |
|
| CONSUMER DISCRETIONARY - 7.3% | | | |
| Automobiles - 0.4% | | | |
| General Motors Co. | | 693,600 | 23,159 |
| Hotels, Restaurants & Leisure - 2.9% | | | |
| McDonald's Corp. | | 620,500 | 132,768 |
| Royal Caribbean Cruises Ltd. | | 390,200 | 45,685 |
| | | | 178,453 |
| Multiline Retail - 0.3% | | | |
| Dollar General Corp. | | 133,400 | 20,465 |
| Specialty Retail - 3.3% | | | |
| Burlington Stores, Inc. (a) | | 59,200 | 12,874 |
| Lowe's Companies, Inc. | | 691,800 | 80,415 |
| The Home Depot, Inc. | | 235,300 | 53,672 |
| TJX Companies, Inc. | | 889,400 | 52,510 |
| | | | 199,471 |
| Textiles, Apparel & Luxury Goods - 0.4% | | | |
| PVH Corp. | | 199,200 | 17,364 |
| Tapestry, Inc. | | 326,400 | 8,411 |
| | | | 25,775 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 447,323 |
|
| CONSUMER STAPLES - 9.7% | | | |
| Beverages - 1.3% | | | |
| Diageo PLC | | 370,600 | 14,655 |
| PepsiCo, Inc. | | 437,300 | 62,105 |
| | | | 76,760 |
| Food & Staples Retailing - 3.3% | | | |
| Alimentation Couche-Tard, Inc. Class B (sub. vtg.) | | 493,900 | 16,507 |
| BJ's Wholesale Club Holdings, Inc. (a) | | 1,129,824 | 23,184 |
| Kroger Co. | | 788,200 | 21,171 |
| Walmart, Inc. | | 1,247,291 | 142,802 |
| | | | 203,664 |
| Food Products - 2.4% | | | |
| Hilton Food Group PLC | | 1,668,103 | 23,261 |
| McCormick & Co., Inc. (non-vtg.) | | 92,900 | 15,177 |
| Mondelez International, Inc. | | 856,000 | 49,117 |
| Nestle SA (Reg. S) | | 291,599 | 32,161 |
| The J.M. Smucker Co. | | 248,900 | 25,789 |
| | | | 145,505 |
| Household Products - 0.6% | | | |
| Kimberly-Clark Corp. | | 265,900 | 38,088 |
| Personal Products - 0.6% | | | |
| Unilever NV | | 674,000 | 39,329 |
| Tobacco - 1.5% | | | |
| Altria Group, Inc. | | 750,000 | 35,648 |
| Philip Morris International, Inc. | | 716,900 | 59,288 |
| | | | 94,936 |
|
| TOTAL CONSUMER STAPLES | | | 598,282 |
|
| ENERGY - 8.5% | | | |
| Oil, Gas & Consumable Fuels - 8.5% | | | |
| BP PLC | | 5,812,600 | 34,992 |
| Chevron Corp. | | 1,216,672 | 130,354 |
| ConocoPhillips Co. | | 1,517,600 | 90,191 |
| Enterprise Products Partners LP | | 1,145,600 | 29,522 |
| Equinor ASA | | 1,573,700 | 28,598 |
| Exxon Mobil Corp. | | 829,100 | 51,504 |
| Imperial Oil Ltd. | | 983,600 | 23,323 |
| Phillips 66 Co. | | 368,700 | 33,688 |
| Suncor Energy, Inc. | | 1,151,400 | 35,193 |
| The Williams Companies, Inc. | | 1,031,862 | 21,349 |
| Valero Energy Corp. | | 548,700 | 46,261 |
| | | | 524,975 |
| FINANCIALS - 24.8% | | | |
| Banks - 13.5% | | | |
| Bank of America Corp. | | 5,369,800 | 176,291 |
| BB&T Corp. | | 1,105,671 | 57,019 |
| Citigroup, Inc. | | 1,945,200 | 144,742 |
| Huntington Bancshares, Inc. | | 1,490,700 | 20,229 |
| JPMorgan Chase & Co. | | 1,887,682 | 249,851 |
| M&T Bank Corp. | | 247,300 | 41,675 |
| Wells Fargo & Co. | | 3,099,650 | 145,498 |
| | | | 835,305 |
| Capital Markets - 2.4% | | | |
| KKR & Co. LP | | 2,497,665 | 79,676 |
| The Blackstone Group LP | | 1,097,032 | 66,996 |
| | | | 146,672 |
| Consumer Finance - 1.2% | | | |
| Capital One Financial Corp. | | 738,500 | 73,702 |
| Diversified Financial Services - 3.3% | | | |
| Berkshire Hathaway, Inc. Class B (a) | | 913,000 | 204,905 |
| Insurance - 4.4% | | | |
| Chubb Ltd. | | 599,200 | 91,072 |
| Marsh & McLennan Companies, Inc. | | 438,000 | 48,995 |
| MetLife, Inc. | | 1,240,238 | 61,652 |
| The Travelers Companies, Inc. | | 515,900 | 67,903 |
| | | | 269,622 |
|
| TOTAL FINANCIALS | | | 1,530,206 |
|
| HEALTH CARE - 14.0% | | | |
| Biotechnology - 1.8% | | | |
| AbbVie, Inc. | | 377,400 | 30,577 |
| Amgen, Inc. | | 373,800 | 80,759 |
| | | | 111,336 |
| Health Care Equipment & Supplies - 2.2% | | | |
| Becton, Dickinson & Co. | | 292,600 | 80,518 |
| Danaher Corp. | | 363,300 | 58,444 |
| | | | 138,962 |
| Health Care Providers & Services - 1.1% | | | |
| Cigna Corp. | | 176,100 | 33,878 |
| UnitedHealth Group, Inc. | | 122,300 | 33,321 |
| | | | 67,199 |
| Pharmaceuticals - 8.9% | | | |
| AstraZeneca PLC (United Kingdom) | | 830,355 | 81,232 |
| Bristol-Myers Squibb Co. | | 1,336,800 | 84,152 |
| Eli Lilly & Co. | | 277,400 | 38,736 |
| Johnson & Johnson | | 1,354,148 | 201,592 |
| Roche Holding AG (participation certificate) | | 265,920 | 89,208 |
| Sanofi SA | | 551,819 | 53,217 |
| | | | 548,137 |
|
| TOTAL HEALTH CARE | | | 865,634 |
|
| INDUSTRIALS - 8.9% | | | |
| Aerospace & Defense - 3.6% | | | |
| General Dynamics Corp. | | 277,400 | 48,667 |
| Northrop Grumman Corp. | | 127,700 | 47,833 |
| United Technologies Corp. | | 839,620 | 126,111 |
| | | | 222,611 |
| Commercial Services & Supplies - 0.3% | | | |
| Waste Connection, Inc. (Canada) | | 175,945 | 16,958 |
| Electrical Equipment - 1.1% | | | |
| AMETEK, Inc. | | 729,900 | 70,910 |
| Industrial Conglomerates - 2.6% | | | |
| General Electric Co. | | 6,137,655 | 76,414 |
| Roper Technologies, Inc. | | 221,700 | 84,614 |
| | | | 161,028 |
| Machinery - 1.0% | | | |
| Fortive Corp. | | 395,800 | 29,657 |
| Ingersoll-Rand PLC | | 242,900 | 32,362 |
| | | | 62,019 |
| Professional Services - 0.3% | | | |
| Equifax, Inc. | | 116,700 | 17,493 |
|
| TOTAL INDUSTRIALS | | | 551,019 |
|
| INFORMATION TECHNOLOGY - 8.6% | | | |
| Communications Equipment - 0.8% | | | |
| Cisco Systems, Inc. | | 1,113,786 | 51,201 |
| Electronic Equipment & Components - 0.2% | | | |
| TE Connectivity Ltd. | | 163,632 | 15,084 |
| IT Services - 1.9% | | | |
| Amdocs Ltd. | | 414,400 | 29,816 |
| Black Knight, Inc. (a) | | 108,600 | 7,268 |
| Fiserv, Inc. (a) | | 174,411 | 20,687 |
| Paychex, Inc. | | 384,757 | 33,001 |
| Visa, Inc. Class A | | 120,800 | 24,036 |
| | | | 114,808 |
| Semiconductors & Semiconductor Equipment - 2.5% | | | |
| NXP Semiconductors NV | | 506,700 | 64,280 |
| Qualcomm, Inc. | | 414,400 | 35,352 |
| Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | | 982,800 | 53,012 |
| | | | 152,644 |
| Software - 1.9% | | | |
| Microsoft Corp. | | 696,916 | 118,636 |
| Technology Hardware, Storage & Peripherals - 1.3% | | | |
| Apple, Inc. | | 251,500 | 77,842 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 530,215 |
|
| MATERIALS - 1.0% | | | |
| Chemicals - 0.9% | | | |
| DowDuPont, Inc. | | 752,899 | 38,533 |
| International Flavors & Fragrances, Inc. (b) | | 143,200 | 18,775 |
| | | | 57,308 |
| Containers & Packaging - 0.1% | | | |
| Reynolds Consumer Products, Inc. (a) | | 232,300 | 6,632 |
|
| TOTAL MATERIALS | | | 63,940 |
|
| REAL ESTATE - 1.7% | | | |
| Equity Real Estate Investment Trusts (REITs) - 1.7% | | | |
| American Tower Corp. | | 302,900 | 70,194 |
| Public Storage | | 143,600 | 32,132 |
| | | | 102,326 |
| UTILITIES - 5.6% | | | |
| Electric Utilities - 3.1% | | | |
| Exelon Corp. | | 2,411,100 | 114,744 |
| NextEra Energy, Inc. | | 287,600 | 77,134 |
| | | | 191,878 |
| Independent Power and Renewable Electricity Producers - 0.9% | | | |
| NRG Energy, Inc. | | 771,500 | 28,461 |
| Vistra Energy Corp. | | 1,179,200 | 26,556 |
| | | | 55,017 |
| Multi-Utilities - 1.6% | | | |
| Ameren Corp. | | 463,800 | 38,055 |
| CenterPoint Energy, Inc. | | 806,300 | 21,351 |
| WEC Energy Group, Inc. (b) | | 404,300 | 40,386 |
| | | | 99,792 |
|
| TOTAL UTILITIES | | | 346,687 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $4,479,346) | | | 6,125,462 |
|
| Other - 0.2% | | | |
| Energy - 0.2% | | | |
| Oil, Gas & Consumable Fuels - 0.2% | | | |
| Utica Shale Drilling Program (non-operating revenue interest) (c)(d)(e) | | | |
| (Cost $22,679) | | 22,678,929 | 10,042 |
|
| Money Market Funds - 0.2% | | | |
| Fidelity Cash Central Fund 1.58% (f) | | 3,283,316 | 3,284 |
| Fidelity Securities Lending Cash Central Fund 1.59% (f)(g) | | 10,052,979 | 10,054 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $13,338) | | | 13,338 |
| TOTAL INVESTMENT IN SECURITIES - 99.7% | | | |
| (Cost $4,515,363) | | | 6,148,842 |
| NET OTHER ASSETS (LIABILITIES) - 0.3% | | | 17,306 |
| NET ASSETS - 100% | | | $6,166,148 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Investment is owned by a wholly-owned subsidiary (Subsidiary) that is treated as a corporation for U.S. tax purposes.
(d) Restricted securities (including private placements) - 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 $10,042,000 or 0.2% of net assets.
(e) Level 3 security
(f) Affiliated fund that is generally 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(g) Investment made with cash collateral received from securities on loan.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost (000s) |
| Utica Shale Drilling Program (non-operating revenue interest) | 10/5/16 - 9/1/17 | $22,679 |
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 | $5,230 |
| Fidelity Securities Lending Cash Central Fund | 359 |
| Total | $5,589 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations, if applicable. Amount for Fidelity Securities Lending Cash Central Fund 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.
Investment Valuation
The following is a summary of the inputs used, as of January 31, 2020, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| (Amounts in thousands) | | | | |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Communication Services | $564,855 | $564,855 | $-- | $-- |
| Consumer Discretionary | 447,323 | 447,323 | -- | -- |
| Consumer Staples | 598,282 | 512,137 | 86,145 | -- |
| Energy | 524,975 | 489,983 | 34,992 | -- |
| Financials | 1,530,206 | 1,530,206 | -- | -- |
| Health Care | 865,634 | 641,977 | 223,657 | -- |
| Industrials | 551,019 | 551,019 | -- | -- |
| Information Technology | 530,215 | 530,215 | -- | -- |
| Materials | 63,940 | 63,940 | -- | -- |
| Real Estate | 102,326 | 102,326 | -- | -- |
| Utilities | 346,687 | 346,687 | -- | -- |
| Other | 10,042 | -- | -- | 10,042 |
| Money Market Funds | 13,338 | 13,338 | -- | -- |
| Total Investments in Securities: | $6,148,842 | $5,794,006 | $344,794 | $10,042 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 86.6% |
| Switzerland | 3.6% |
| United Kingdom | 2.6% |
| Netherlands | 1.6% |
| Canada | 1.6% |
| Others (Individually Less Than 1%) | 4.0% |
| | 100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| Amounts in thousands (except per-share amounts) | | January 31, 2020 |
| Assets | | |
Investment in securities, at value (including securities loaned of $9,711) — See accompanying schedule:
Unaffiliated issuers (cost $4,502,025) | $6,135,504 | |
| Fidelity Central Funds (cost $13,338) | 13,338 | |
| Total Investment in Securities (cost $4,515,363) | | $6,148,842 |
| Restricted cash | | 1,314 |
| Receivable for investments sold | | 31,046 |
| Receivable for fund shares sold | | 1,605 |
| Dividends receivable | | 7,678 |
| Distributions receivable from Fidelity Central Funds | | 31 |
| Prepaid expenses | | 7 |
| Other receivables | | 1,543 |
| Total assets | | 6,192,066 |
| Liabilities | | |
| Payable for investments purchased | $6,040 | |
| Payable for fund shares redeemed | 5,714 | |
| Accrued management fee | 2,287 | |
| Other affiliated payables | 724 | |
| Other payables and accrued expenses | 1,101 | |
| Collateral on securities loaned | 10,052 | |
| Total liabilities | | 25,918 |
| Net Assets | | $6,166,148 |
| Net Assets consist of: | | |
| Paid in capital | | $4,532,770 |
| Total accumulated earnings (loss) | | 1,633,378 |
| Net Assets | | $6,166,148 |
| Net Asset Value and Maximum Offering Price | | |
| Equity-Income: | | |
| Net Asset Value, offering price and redemption price per share ($5,377,890 ÷ 90,605 shares) | | $59.36 |
| Class K: | | |
| Net Asset Value, offering price and redemption price per share ($788,258 ÷ 13,290 shares) | | $59.31 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| Amounts in thousands | | Year ended January 31, 2020 |
| Investment Income | | |
| Dividends | | $156,566 |
| Interest | | 50 |
| Income from Fidelity Central Funds (including $359 from security lending) | | 5,589 |
| Total income | | 162,205 |
| Expenses | | |
| Management fee | $26,838 | |
| Transfer agent fees | 7,725 | |
| Accounting and security lending fees | 1,129 | |
| Custodian fees and expenses | 96 | |
| Independent trustees' fees and expenses | 33 | |
| Registration fees | 121 | |
| Audit | 93 | |
| Legal | 18 | |
| Miscellaneous | 41 | |
| Total expenses before reductions | 36,094 | |
| Expense reductions | (192) | |
| Total expenses after reductions | | 35,902 |
| Net investment income (loss) | | 126,303 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 326,976 | |
| Redemptions in-kind with affiliated entities | 11,545 | |
| Fidelity Central Funds | 2 | |
| Foreign currency transactions | 139 | |
| Total net realized gain (loss) | | 338,662 |
| Change in net unrealized appreciation (depreciation) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 479,707 | |
| Assets and liabilities in foreign currencies | 21 | |
| Total change in net unrealized appreciation (depreciation) | | 479,728 |
| Net gain (loss) | | 818,390 |
| Net increase (decrease) in net assets resulting from operations | | $944,693 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| Amounts in thousands | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $126,303 | $161,780 |
| Net realized gain (loss) | 338,662 | 333,750 |
| Change in net unrealized appreciation (depreciation) | 479,728 | (944,456) |
| Net increase (decrease) in net assets resulting from operations | 944,693 | (448,926) |
| Distributions to shareholders | (445,556) | (545,344) |
| Share transactions - net increase (decrease) | (156,322) | (726,863) |
| Total increase (decrease) in net assets | 342,815 | (1,721,133) |
| Net Assets | | |
| Beginning of period | 5,823,333 | 7,544,466 |
| End of period | $6,166,148 | $5,823,333 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Equity-Income Fund
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $54.70 | $63.45 | $57.76 | $48.57 | $57.26 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | 1.19 | 1.44 | 1.30 | 1.22 | 1.43 |
| Net realized and unrealized gain (loss) | 7.81 | (5.22) | 8.52 | 10.43 | (3.91)B |
| Total from investment operations | 9.00 | (3.78) | 9.82 | 11.65 | (2.48) |
| Distributions from net investment income | (1.10) | (1.39) | (1.20)C | (1.36) | (1.71)C |
| Distributions from net realized gain | (3.24) | (3.58) | (2.93)C | (1.10) | (4.51)C |
| Total distributions | (4.34) | (4.97) | (4.13) | (2.46) | (6.21)D |
| Net asset value, end of period | $59.36 | $54.70 | $63.45 | $57.76 | $48.57 |
| Total ReturnE | 16.69% | (5.91)% | 17.57% | 24.42% | (4.89)%B |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | .60% | .61% | .61% | .63% | .64% |
| Expenses net of fee waivers, if any | .60% | .61% | .61% | .63% | .64% |
| Expenses net of all reductions | .60% | .60% | .61% | .62% | .63% |
| Net investment income (loss) | 2.04% | 2.50% | 2.18% | 2.27% | 2.55% |
| Supplemental Data | | | | | |
| Net assets, end of period (in millions) | $5,378 | $5,016 | $5,921 | $6,686 | $5,752 |
| Portfolio turnover rateH | 32%I | 24%I | 33% | 36% | 46%I |
A Calculated based on average shares outstanding during the period.
B Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.13 per share. Excluding these litigation proceeds, the total return would have been (5.12)%.
C The amounts shown reflect certain reclassifications related to book to tax differences that were made in the year shown.
D Total distributions of $6.21 per share is comprised of distributions from net investment income of $1.709 and distributions from net realized gain of $4.505 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 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.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Equity-Income Fund Class K
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $54.67 | $63.41 | $57.73 | $48.55 | $57.25 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | 1.24 | 1.51 | 1.36 | 1.28 | 1.50 |
| Net realized and unrealized gain (loss) | 7.80 | (5.22) | 8.51 | 10.42 | (3.92)B |
| Total from investment operations | 9.04 | (3.71) | 9.87 | 11.70 | (2.42) |
| Distributions from net investment income | (1.16) | (1.45) | (1.26)C | (1.42) | (1.78)C |
| Distributions from net realized gain | (3.24) | (3.58) | (2.93)C | (1.10) | (4.51)C |
| Total distributions | (4.40) | (5.03) | (4.19) | (2.52) | (6.28)D |
| Net asset value, end of period | $59.31 | $54.67 | $63.41 | $57.73 | $48.55 |
| Total ReturnE | 16.77% | (5.81)% | 17.68% | 24.56% | (4.78)%B |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | .51% | .51% | .51% | .52% | .52% |
| Expenses net of fee waivers, if any | .51% | .51% | .51% | .52% | .52% |
| Expenses net of all reductions | .50% | .50% | .51% | .51% | .51% |
| Net investment income (loss) | 2.13% | 2.60% | 2.28% | 2.39% | 2.67% |
| Supplemental Data | | | | | |
| Net assets, end of period (in millions) | $788 | $807 | $1,623 | $1,791 | $1,646 |
| Portfolio turnover rateH | 32%I | 24%I | 33% | 36% | 46%I |
A Calculated based on average shares outstanding during the period.
B Net realized and unrealized gain (loss) per share reflects proceeds received from litigation which amounted to $.13 per share. Excluding these litigation proceeds, the total return would have been (5.01)%.
C The amounts shown reflect certain reclassifications related to book to tax differences that were made in the year shown.
D Total distributions of $6.28 per share is comprised of distributions from net investment income of $1.777 and distributions from net realized gain of $4.505 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 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.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended January 31, 2020
(Amounts in thousands except percentages)
1. Organization.
Fidelity Equity-Income Fund (the Fund) is a fund of Fidelity Devonshire 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 Equity-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.
Effective January 1, 2020:
Investment advisers Fidelity Investments Money Management, Inc., FMR Co., Inc., and Fidelity SelectCo, LLC, merged with and into Fidelity Management & Research Company. In connection with the merger transactions, the resulting, merged investment adviser was then redomiciled from Massachusetts to Delaware, changed its corporate structure from a corporation to a limited liability company, and changed its name to "Fidelity Management & Research Company LLC".
Fidelity Investments Institutional Operations Company, Inc. converted from a Massachusetts corporation to a Massachusetts LLC, and changed its name to "Fidelity Investments Institutional Operations Company LLC".
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser 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 the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date ranged from less than .005% to .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
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)
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 a third party pricing vendor 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 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 may be used and would be categorized as Level 2 in the hierarchy. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
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 January 31, 2020 is included at the end of the Fund's Schedule of Investments.
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 rates 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 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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily 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. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. 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) for the Fund, certain independent Trustees have elected 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 of $975 are included in the accompanying Statement of Assets and Liabilities in other receivables and other payables and accrued expenses, respectively.
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 U.S. Federal income taxes is required. As of January 31, 2020, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The 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.
Distributions are declared and recorded on the ex-dividend date. Income 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. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, equity-debt classifications, certain conversion ratio adjustments, market discount, contingent interest, redemptions in kind, partnerships, deferred trustees compensation and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
| Gross unrealized appreciation | $1,763,367 |
| Gross unrealized depreciation | (141,853) |
| Net unrealized appreciation (depreciation) | $1,621,514 |
| Tax Cost | $4,527,328 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $3,982 |
| Undistributed long-term capital gain | $15,378 |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,614,992 |
The tax character of distributions paid was as follows:
| | January 31, 2020 | January 31, 2019 |
| Ordinary Income | $116,646 | $ 165,598 |
| Long-term Capital Gains | 328,910 | 379,746 |
| Total | $445,556 | $ 545,344 |
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.
Consolidated Subsidiary. The Fund invests in certain investments through a wholly-owned subsidiary ("Subsidiary"), which may be subject to federal and state taxes upon disposition.
As of period end, the Fund held an investment of $11,356 in this Subsidiary, representing .18% of the Fund's net assets. The financial statements have been consolidated and include accounts of the Fund and the Subsidiary. Accordingly, all inter-company transactions and balances have been eliminated.
Any cash held by the Subsidiary is restricted as to its use and is presented as Restricted cash in the Statement of Assets and Liabilities.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $1,877,874 and $2,142,279, respectively.
Unaffiliated Redemptions In-Kind. During the period, 578 shares of the Fund were redeemed in-kind for investments and cash with a value of $33,732. The net realized gain of $11,289 on investments delivered through in-kind redemptions is included in the accompanying Statement of Operations. The amount of the in-kind redemptions is included in share transactions in the accompanying Statement of Changes in Net Assets as well as the Notes to Financial Statements. The Fund recognized no gain or loss for federal income tax purposes.
Prior Fiscal Year Unaffiliated Redemptions In-Kind. During the prior period, 1,109 shares of the Fund were redeemed in-kind for investments and cash with a value of $63,055. The Fund had a net realized gain of $22,455 on investments delivered through in-kind redemptions. The amount of the in-kind redemptions is included in share transactions in the accompanying Statement of Changes in Net Assets as well as the Notes to Financial Statements. The Fund recognized no gain or loss for federal income tax purposes.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company LLC (the investment adviser) 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 .24% during the period. The group fee rate is based upon the monthly average net assets of a group of registered investment companies with which the investment adviser has management contracts. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annual management fee rate was .44% of the Fund's average net assets.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company LLC (FIIOC), an affiliate of the investment adviser, 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 Equity-Income, except for Class K. 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 Class-Level Average Net Assets |
| Equity-Income | $7,320 | .14 |
| Class K | 405 | .05 |
| | $7,725 | |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Prior to April 1, 2019, FSC had a separate agreement with the Fund for administration of the security lending program, based on the number and duration of lending transactions. For the period, the total fees paid for accounting and administration of securities lending were equivalent to the following annual rates:
| | % of Average Net Assets |
| Fidelity Equity-Income Fund | .02 |
Brokerage Commissions. A portion of portfolio transactions were placed with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were as follows:
| | Amount |
| Fidelity Equity-Income Fund | $46 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Affiliated Redemptions In-Kind. During the period, 674 shares of the Fund were redeemed in-kind for investments and cash with a value of $38,317. The net realized gain of $11,545 on investments delivered through in-kind redemptions is included in the accompanying Statement of Operations. The amount of the in-kind redemptions is included in share transactions in the accompanying Statement of Changes in Net Assets as well as the Notes to Financial Statements. The Fund recognized no gain or loss for federal income tax purposes.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser 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 $16 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. For equity securities, lending agents are used, including National Financial Services (NFS), an affiliate of the Fund. Pursuant to a securities lending agreement, NFS will receive a fee, which is capped at 9.9% of daily lending revenue, for its services as lending agent. The Fund may lend securities to certain qualified borrowers, including NFS. 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. 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. Total fees paid by the Fund to NFS, as lending agent, amounted to $4. 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. During the period, there were no securities loaned to NFS.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $136 for the period. In addition, through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, custodian credits reduced the Fund's expenses by $8. During the period, transfer agent credits reduced each class' expenses as noted in the table below.
| | Expense reduction |
| Equity-Income | $13 |
In addition, during the period the investment adviser or an affiliate reimbursed and/or waived a portion of fund-level operating expenses in the amount of $35.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
January 31, 2020 | Year ended
January 31, 2019 |
| Distributions to shareholders | | |
| Equity-Income | $384,187 | $449,948 |
| Class K | 61,369 | 95,396 |
| Total | $445,556 | $545,344 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended January 31, 2020 | Year ended January 31, 2019 | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Equity-Income | | | | |
| Shares sold | 3,785 | 3,108 | $221,414 | $177,756 |
| Reinvestment of distributions | 6,120 | 7,538 | 359,151 | 422,015 |
| Shares redeemed | (11,001) | (12,269) | (643,179) | (705,345) |
| Net increase (decrease) | (1,096) | (1,623) | $(62,614) | $(105,574) |
| Class K | | | | |
| Shares sold | 6,683 | 2,167 | $382,177 | $124,052 |
| Reinvestment of distributions | 1,048 | 1,691 | 61,369 | 95,395 |
| Shares redeemed | (9,205)(a),(b) | (14,688)(c) | (537,254)(a),(b) | (840,736)(c) |
| Net increase (decrease) | (1,474) | (10,830) | $(93,708) | $(621,289) |
(a) Amount includes in-kind redemptions (see the Unaffiliated Redemptions In-Kind note for additional details)
(b) Amount includes in-kind redemptions (see the Affiliated Redemptions In-Kind note for additional details)
(c) Amount includes in-kind redemptions (see the Prior Fiscal Year Unaffiliated Redemptions In-Kind note for additional details)
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.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Fidelity Devonshire Trust and Shareholders of Fidelity Equity-Income Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Fidelity Equity-Income Fund (one of the funds constituting Fidelity Devonshire Trust, referred to hereafter as the “Fund”) as of January 31, 2020, the related statement of operations for the year ended January 31, 2020, the statement of changes in net assets for each of the two years in the period ended January 31, 2020, including the related notes, and the financial highlights for each of the five years in the period ended January 31, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of January 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended January 31, 2020 and the financial highlights for each of the five years in the period ended January 31, 2020 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of January 31, 2020 by correspondence with the custodian, issuers of privately offered securities and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 12, 2020
We have served as the auditor of one or more investment companies in the Fidelity group of funds since 1932.
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Michael E. Wiley, each of the Trustees oversees 302 funds. Mr. Wiley oversees 199 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the Investment Company Act of 1940 (1940 Act)) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544 if you’re an individual investing directly with Fidelity, call 1-800-835-5092 if you’re a plan sponsor or participant with Fidelity as your recordkeeper or call 1-877-208-0098 on institutional accounts or if you’re an advisor or invest through one.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and other equity funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey is an Overseer Emeritus for the Boston Symphony Orchestra, a Director of Artis-Naples, and a Trustee of Brewster Academy in Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-2018), Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks served as Chief Operating Officer and as a member of the Board of The Depository Trust & Clearing Corporation (financial markets infrastructure), President, Chief Operating Officer and a member of the Board of The Depository Trust Company (DTC), President and a member of the Board of the National Securities Clearing Corporation (NSCC), Chief Executive Officer and a member of the Board of the Government Securities Clearing Corporation and Chief Executive Officer and a member of the Board of the Mortgage-Backed Securities Clearing Corporation. Mr. Dirks currently serves as a member of the Finance Committee (2016-present) and Board (2017-present) and is Treasurer (2018-present) of the Asolo Repertory Theatre.
Donald F. Donahue (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Donahue also serves as Trustee of other Fidelity® funds. Mr. Donahue serves as President and Chief Executive Officer of Miranda Partners, LLC (risk consulting for the financial services industry, 2012-present). Previously, Mr. Donahue served as Chief Executive Officer (2006-2012), Chief Operating Officer (2003-2006) and Managing Director, Customer Marketing and Development (1999-2003) of The Depository Trust & Clearing Corporation (financial markets infrastructure). Mr. Donahue currently serves as a member (2007-present) and Co-Chairman (2016-present) of the Board of United Way of New York, a member of the Board of NYC Leadership Academy (2012-present) and a member of the Board of Advisors of Ripple Labs, Inc. (financial services, 2015-present). Mr. Donahue previously served as a member of the Advisory Board of certain Fidelity® funds (2015-2018).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Previously, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity), Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail), Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005) and Chairman (2014-2017) and a member of the Board (2010-2017) of Dave & Buster’s Entertainment, Inc. (restaurant and entertainment complexes). Mr. Lacy currently serves as a member of the Board of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present), Trustee of the California Chapter of The Nature Conservancy (2015-present) and a member of the Board of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as Chair of the Board of Governors, State University System of Florida (2013-present) and is a member of the Council on Foreign Relations (1994-present). He is also a member and has in the past served as Chairman of the Board of Directors of Artis-Naples (2012-present). Previously, Mr. Lautenbach served as a member and then Lead Director of the Board of Directors of Eaton Corporation (diversified industrial, 1997-2016). He was also a Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010); as well as Director of Sony Corporation (2006-2007). In addition, Mr. Lautenbach had a 30-year career with IBM (technology company), during which time he served as Senior Vice President and as a member of the Corporate Executive Committee (1968-1998).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Independent Directors Council Governing Council (2015-present). Previously, Mr. Mauriello served as a member of the Board of XL Group plc. (global insurance and re-insurance, 2006-2018).
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Previously, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments and a member of Scudder, Stevens & Clark and Scudder Kemper Investments. Ms. Small previously served as a member of the Board (2009-2019) and Chair of the Investment Committee (2010-2019) of the Teagle Foundation and a member of the Investment Committee of the Berkshire Taconic Community Foundation (2008-2019).
Garnett A. Smith (1947)
Year of Election or Appointment: 2018
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to his retirement, Mr. Smith served as Chairman and Chief Executive Officer (1990-1997) and President (1986-1990) of Inbrand Corp. (manufacturer of personal absorbent products). Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank (now Bank of America). Mr. Smith previously served as a member of the Advisory Board of certain Fidelity® funds (2012-2013).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions). Mr. Thomas currently serves as Non-Executive Chairman of the Board of Fortune Brands Home and Security (home and security products, 2011-present), and a member of the Board (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication).
Michael E. Wiley (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Wiley also serves as Trustee or a member of the Advisory Board of other Fidelity® funds. Previously, Mr. Wiley served as Chairman, President and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004). Mr. Wiley currently serves as a member of the Board of High Point Resources (exploration and production, 2005-present). Previously, Mr. Wiley served as a member of the Board of Andeavor Corporation (independent oil refiner and marketer, 2005-2018) and a member of the Board of Andeavor Logistics LP (natural resources logistics, 2015-2018).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for a Member of the Advisory Board (if any) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Vicki L. Fuller (1957)
Year of Election or Appointment: 2018
Member of the Advisory Board
Ms. Fuller also serves as a member of the Advisory Board of other Fidelity® funds. Previously, Ms. Fuller served as Chief Investment Officer of the New York State Common Retirement Fund (2012-2018) and held a variety of positions at AllianceBernstein L.P. (global asset management, 1985-2012), including Managing Director (2006-2012) and Senior Vice President and Senior Portfolio Manager (2001-2006). Ms. Fuller currently serves as a member of the Board, Audit Committee and Nominating and Governance Committee of The Williams Companies, Inc. (natural gas infrastructure, 2018-present) and as a member of the Board of Treliant, LLC (consulting, 2019-present).
Patricia L. Kampling (1959)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Kampling also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Kampling served as Chairman of the Board and Chief Executive Officer (2012-2019), President and Chief Operating Officer (2011-2012) and Executive Vice President and Chief Financial Officer (2010-2011) of Alliant Energy Corporation. Ms. Kampling currently serves as a member of the Board, Compensation Committee and Executive Committee and as Chair of the Audit Committee of Briggs & Stratton Corporation (manufacturing, 2011-present) and as a member of the Board, Audit, Finance and Risk Committee and Safety, Environmental, Technology and Operations Committee of American Water Works Company, Inc. (utilities company, 2019-present). In addition, Ms. Kampling currently serves as a member of the Board of the Nature Conservancy, Wisconsin Chapter (2019-present). Previously, Ms. Kampling served as a member of the Board of Interstate Power and Light Company (2012-2019) and Wisconsin Power and Light Company (2012-2019) (each a subsidiary of Alliant Energy Corporation) and as a member of the Board and Workforce Development Committee of the Business Roundtable (2018-2019).
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of Fidelity Management & Research Company LLC (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served as Vice Chairman and a Director of FMR Co., Inc. (investment adviser firm) and on the Special Olympics International Board of Directors (1997-2006).
Susan Tomasky (1953)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Tomasky also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Tomasky served in various executive officer positions at American Electric Power Company, Inc. (1998-2011), including most recently as President of AEP Transmission (2007-2011). Ms. Tomasky currently serves as a member of the Board and Sustainability Committee and as Chair of the Audit Committee of Marathon Petroleum Corporation (2018-present) and as a member of the Board, Corporate Governance Committee and Organization and Compensation Committee and as Chair of the Audit Committee of Public Service Enterprise Group, Inc. (utilities company, 2012-present). In addition, Ms. Tomasky currently serves as a member of the Board of the Columbus Regional Airport Authority (2007-present), as a member of the Board of the Royal Shakespeare Company – America (2009-present), as a member of the Board of the Columbus Association for the Performing Arts (2011-present) and as a member of the Board of Kenyon College (2016-present). Previously, Ms. Tomasky served as a member of the Board (2011-2019) and as Lead Independent Director (2015-2018) of Andeavor Corporation (previously Tesoro Corporation) (independent oil refiner and marketer) and as a member of the Board of Summit Midstream Partners LP (energy, 2012-2018).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2017
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer (2012-present) and Senior Vice President (2014-present) of FMR LLC (diversified financial services company) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as AML Officer of certain funds (2017-2019), as AML Officer of the funds (2012-2016), and Vice President (2007-2014) and Deputy Anti-Money Laundering Officer (2007-2012) of FMR LLC.
Craig S. Brown (1977)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Brown also serves as Assistant Treasurer of other funds. Mr. Brown is an employee of Fidelity Investments (2013-present).
John J. Burke III (1964)
Year of Election or Appointment: 2018
Chief Financial Officer
Mr. Burke also serves as Chief Financial Officer of other funds. Mr. Burke serves as Head of Investment Operations for Fidelity Fund and Investment Operations (2018-present) and is an employee of Fidelity Investments (1998-present). Previously Mr. Burke served as head of Asset Management Investment Operations (2012-2018).
William C. Coffey (1969)
Year of Election or Appointment: 2019
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Secretary and CLO of certain funds (2018-2019); CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2018-2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2018-2019); CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2018-2019); and Assistant Secretary of certain funds (2009-2018).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2018
Vice President
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Co-Head of Equity (2018-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Executive Vice President of Fidelity SelectCo, LLC (2019), Head of Global Equity Research (2016-2018), Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015) and as a Director of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2017).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Laura M. Del Prato (1964)
Year of Election or Appointment: 2018
Assistant Treasurer
Ms. Del Prato also serves as an officer of other funds. Ms. Del Prato is an employee of Fidelity Investments (2017-present). Prior to joining Fidelity Investments, Ms. Del Prato served as a Managing Director and Treasurer of the JPMorgan Mutual Funds (2014-2017). Prior to JPMorgan, Ms. Del Prato served as a partner at Cohen Fund Audit Services (accounting firm, 2012-2013) and KPMG LLP (accounting firm, 2004-2012).
Colm A. Hogan (1973)
Year of Election or Appointment: 2020
Assistant Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2005-present). Previously, Mr. Hogan served as Deputy Treasurer of certain Fidelity® funds (2016-2020) and Assistant Treasurer of certain Fidelity® funds (2016-2018).
Pamela R. Holding (1964)
Year of Election or Appointment: 2018
Vice President
Ms. Holding also serves as Vice President of other funds. Ms. Holding serves as Co-Head of Equity (2018-present) and is an employee of Fidelity Investments (2013-present). Previously, Ms. Holding served as Executive Vice President of Fidelity SelectCo, LLC (2019) and as Chief Investment Officer of Fidelity Institutional Asset Management (2013-2018).
Cynthia Lo Bessette (1969)
Year of Election or Appointment: 2019
Secretary and Chief Legal Officer (CLO)
Ms. Lo Bessette also serves as an officer of other funds. Ms. Lo Bessette serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company LLC (investment adviser firm, 2019-present); and CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2019-present). She is a Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2019-present), and is an employee of Fidelity Investments. Previously, Ms. Lo Bessette served as CLO, Secretary, and Senior Vice President of FMR Co., Inc. (investment adviser firm, 2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2019). Prior to joining Fidelity Investments, Ms. Lo Bessette was Executive Vice President, General Counsel (2016-2019) and Senior Vice President, Deputy General Counsel (2015-2016) of OppenheimerFunds (investment management company) and Deputy Chief Legal Officer (2013-2015) of Jennison Associates LLC (investment adviser firm).
Chris Maher (1972)
Year of Election or Appointment: 2020
Deputy Treasurer
Mr. Maher also serves as an officer of other funds. Mr. Maher serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), and is an employee of Fidelity Investments (2008-present). Previously, Mr. Maher served as Assistant Treasurer of certain funds (2013-2020); Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company LLC (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Compliance Officer of FMR Co., Inc. (investment adviser firm, 2016-2019), as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. Ms. Smith serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), is an employee of Fidelity Investments (2009-present), and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Assistant Treasurer (2013-2019) and Deputy Treasurer (2013-2016) of certain Fidelity® funds.
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche LLP (accounting firm, 2005-2013).
Jim Wegmann (1979)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Wegmann also serves as Assistant Treasurer of other funds. Mr. Wegmann is an employee of Fidelity Investments (2011-present).
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 (August 1, 2019 to January 31, 2020).
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. 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. 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.
| | Annualized Expense Ratio-A | Beginning
Account Value
August 1, 2019 | Ending
Account Value
January 31, 2020 | Expenses Paid
During Period-B
August 1, 2019
to January 31, 2020 |
| Equity-Income | .59% | | | |
| Actual | | $1,000.00 | $1,072.50 | $3.08 |
| Hypothetical-C | | $1,000.00 | $1,022.23 | $3.01 |
| Class K | .50% | | | |
| Actual | | $1,000.00 | $1,072.90 | $2.61 |
| Hypothetical-C | | $1,000.00 | $1,022.68 | $2.55 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Equity-Income Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities, and dividends derived from net investment income:
| | Pay Date | Record Date | Capital Gains |
| Fidelity Equity-Income Fund | | | |
| Equity Income | 03/09/20 | 03/06/20 | $0.152 |
| Class K | 03/09/20 | 03/06/20 | $0.152 |
|
The fund hereby designates as a capital gain dividend with respect to the taxable year ended January 31, 2020, $302,085,665, or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.79% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.
Equity Income designates 100%, 100%, 100%, and 100; and Class K designates 97%, 96%, 95%, and 95%; of the dividends distributed in April, July, October, and December, respectively during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Equity Income and Class K designate 100% of the dividends distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2021 of amounts for use in preparing 2020 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Equity-Income Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company LLC (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. FMR and the sub-advisers are referred to herein as the Investment Advisers. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
Approval of Amended and Restated Advisory Contracts. At its November 2019 meeting, the Board unanimously determined to approve an amended and restated management contract and sub-advisory agreements (Amended and Restated Contracts) for a stub period of January 1, 2020 through January 31, 2020 in connection with a consolidation of certain of Fidelity's advisory businesses. The Board considered that, on or about January 1, 2020, FMR Co., Inc. (FMRC) expected to merge with and into FMR and, after the merger, FMR expected to redomicile as a Delaware limited liability company. The Board also approved the termination of the sub-advisory agreement with FMRC upon the completion of the merger. The Board noted that references to FMR in the Amended and Restated Contracts would be updated to reflect FMR's new form of organization and domicile and considered that the definition of "group assets" for purposes of the fund's group fee would be modified to avoid double-counting assets once the reorganization is complete. The Board also noted Fidelity's assurance that neither the planned consolidation nor the Amended and Restated Contracts will change the investment processes, the level or nature of services provided, the resources and personnel allocated, trading and compliance operations, or any fees paid by the fund.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to review matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through joint ad hoc committees to discuss certain matters relevant to all of the Fidelity funds.
At its January 2020 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services provided by and the profits realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and are realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value and convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information over the Internet and through telephone representatives, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
The Board noted that it and the boards of certain other Fidelity funds had formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to Fidelity's investment research process, which includes meetings with management of issuers of securities in which the funds invest, and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and ETFs with innovative structures, strategies and pricing and making other enhancements to meet client needs; (iv) launching new share classes of existing funds; (v) eliminating purchase minimums and broadening eligibility requirements for certain funds and share classes; (vi) reducing management fees and total expenses for certain target date funds and index funds; (vii) lowering expense caps for certain existing funds and classes, and converting certain voluntary expense caps to contractual caps, to reduce expenses borne by shareholders; (viii) rationalizing product lines and gaining increased efficiencies from fund mergers, liquidations, and share class consolidations; (ix) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; and (x) continuing to implement enhancements to further strengthen Fidelity's product line to increase investors' probability of success in achieving their investment goals, including retirement income goals.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history. The Board noted that there were portfolio management changes in January 2018 and April 2019. The Board will continue to monitor closely the fund's performance, taking into account the portfolio management changes.
The Board took into account discussions that occur at Board meetings throughout the year with representatives of the Investment Advisers about fund investment performance. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund for different time periods, measured against an appropriate securities market index (benchmark index) and a peer group of funds with similar objectives (peer group), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods ended June 30, 2019, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.
Fidelity Equity-Income Fund
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable investment mandates. Combining Lipper investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods ended June 30 (December 31 for periods prior to 2018) shown in basis points (BP) in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group is broader than the Lipper peer group used by the Board for performance comparisons because the Total Mapped Group combines several Lipper investment objective categories while the Lipper peer group does not. The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Sized Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked, is also included in the chart and was considered by the Board.
Fidelity Equity-Income Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for the 12-month period ended June 30, 2019.
The Board noted that it and the boards of other Fidelity funds formed an ad hoc Committee on Group Fee, which meets periodically, to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted that Fidelity may agree to waive fees or reimburse expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of Class A, Class C, Class I, and Class Z, and the retail class ranked below the competitive median for the 12-month period ended June 30, 2019 and the total expense ratio of Class M ranked above the competitive median for the 12-month period ended June 30, 2019. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of Class M was above the competitive median primarily because of higher 12b-1 fees on Class M as compared to most competitor funds. Class M has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class M is primarily sold load-waived to retirement plans and intermediary wrap programs where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans and wrap programs.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted that a joint ad hoc committee created by it and the boards of other Fidelity funds periodically reviews and compares Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds and also noted the most recent findings of the committee. The Board noted that the committee's review included a consideration of the differences in services provided, fees charged, and costs incurred, as well as competition in the markets serving the different categories of clients.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationships with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies and the full Board approves such changes.
PricewaterhouseCoopers LLP (PwC), auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and potential indirect benefits such businesses may have received as a result of their association with Fidelity's mutual fund business (i.e., fall-out benefits) as well as cases where Fidelity's affiliates may benefit from the funds' business. The Board noted that changes to fall-out benefits year-over-year reflect business developments at Fidelity's various businesses. The Board considered that a joint ad hoc committee created by it and the boards of other Fidelity funds had recently been established, and met periodically, to evaluate potential fall-out benefits (PFOB Committee). The Board noted that the PFOB Committee, among other things: (i) discussed the legal framework surrounding potential fall-out benefits; (ii) reviewed the Board's responsibilities and approach to potential fall-out benefits; and (iii) reviewed practices employed by competitor funds regarding the review of potential fall-out benefits.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund, including the conclusions of the PFOB Committee, and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that a committee (the Economies of Scale Committee) created by it and the boards of other Fidelity funds periodically analyzes whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total "group assets" increase, and for higher group fee rates as total "group assets" decrease ("group assets" as defined in the management contracts). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as "group assets" increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' advisory contracts, the Board requested and received additional information on certain topics, including: (i) fund flow and performance trends, in particular the underperformance of certain funds and strategies, and Fidelity's long-term strategies for certain funds; (ii) consideration of performance fees for additional funds; (iii) changes in Fidelity's non-fund businesses and the impact of such changes on the funds; (iv) metrics for evaluating index fund and ETF performance and information about ETF trading characteristics; (v) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (vi) the expense structures for different funds and classes; (vii) information regarding other accounts managed by Fidelity, including collective investment trusts and separately managed accounts; and (viii) Fidelity's philosophies and strategies for evaluating funds and classes with lower or declining asset levels.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee arrangements are fair and reasonable, and that the fund's Amended and Restated Contracts should be approved and the fund's Advisory Contracts should be renewed.
EQU-ANN-0320
1.471443.123
Fidelity® Series All-Sector Equity Fund
Fidelity® Series Stock Selector Large Cap Value Fund
Fidelity® Series Value Discovery Fund
Annual Report
January 31, 2020
See the inside front cover for important information about access to your fund’s shareholder reports.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of a fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a financial advisor, broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a fund electronically, by contacting your financial intermediary. For Fidelity customers, visit Fidelity's web site or call Fidelity using the contact information listed below.
You may elect to receive all future reports in paper free of charge. If you wish to continue receiving paper copies of your shareholder reports, you may contact your financial intermediary or, if you are a Fidelity customer, visit Fidelity’s website, or call Fidelity at the applicable toll-free number listed below. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
| Account Type | Website | Phone Number |
| Brokerage, Mutual Fund, or Annuity Contracts: | fidelity.com/mailpreferences | 1-800-343-3548 |
| Employer Provided Retirement Accounts: | netbenefits.fidelity.com/preferences (choose 'no' under Required Disclosures to continue to print) | 1-800-343-0860 |
| Advisor Sold Accounts Serviced Through Your Financial Intermediary: | Contact Your Financial Intermediary | Your Financial Intermediary's phone number |
| Advisor Sold Accounts Serviced by Fidelity: | institutional.fidelity.com | 1-877-208-0098 |
Contents
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. © 2020 FMR LLC. All rights reserved.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Funds. This report is not authorized for distribution to prospective investors in the Funds 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-PORT. Forms N-PORT are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-PORT 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.institutional.fidelity.com, or http://www.401k.com, as applicable.
NOT FDIC INSURED •MAY LOSE VALUE •NO BANK GUARANTEE
Neither the Funds nor Fidelity Distributors Corporation is a bank.
Fidelity® Series All-Sector Equity Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended January 31, 2020 | Past 1 year | Past 5 years | Past 10 years |
| Fidelity® Series All-Sector Equity Fund | 21.33% | 11.48% | 13.33% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Series All-Sector Equity Fund on January 31, 2010.
The chart shows how the value of your investment would have changed, and also shows how the Russell 1000® Index performed over the same period.
| Period Ending Values |
| $34,938 | Fidelity® Series All-Sector Equity Fund |
| $36,978 | Russell 1000® Index |
Fidelity® Series All-Sector Equity Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks rolled for the 12 months ending January 31, 2020, with the S&P 500
® index gaining 21.68%, despite persistent, nagging concerns about global economic growth and trade. After a rough end to 2018, equities sharply reversed course to begin 2019 amid upbeat company earnings and signs the Federal Reserve may pause on rates. The uptrend extended until May, when the index sunk as trade talks between the U.S. and China broke down. The bull market roared back to record a series of highs in July, when the Fed cut interest rates for the first time since 2008. Volatility intensified in August, as the Treasury yield curve inverted, which some investors viewed as a sign the U.S. economy could be heading for recession. But the market proved resilient, hitting a new high on October 30, when the Fed lowered rates for the third time in 2019, and moving higher through December 31. The new year began with a flattish January, with growing anxiety related to the new coronavirus outbreak and its impact on the global economy. By sector, information technology (+46%) led the way, driven by strong growth trends. The defensive utilities sector (+30%) also stood out, while communication services and consumer staples were about in line with the broader market. Conversely, energy (-11%) was by far the weakest – struggling due to sluggish oil prices – followed by several strong gainers that still lagged: materials (+11%), health care (+12%), industrials (+16%), consumer discretionary (+17%), and financials and real estate (+18% each).
Comments from Co-Portfolio Manager Robert Stansky: For the fiscal year, the fund gained 21.33%, about in line with the 21.39% advance of the benchmark Russell 1000
® Index. Versus the benchmark, stock selection in the financials, materials and consumer staples sectors detracted from performance most. An overweighted position in data-services provider Nielsen Holdings (-17%) was the fund’s largest individual relative detractor, as fundamentals disappointed during the year. Avoiding credit- and debit-card processor Visa (+48%), a benchmark component, also hampered our relative result. Overweighting American Airlines Group (-24%) detracted as well. Conversely, security choices in the real estate, information technology and communication services sectors contributed to relative performance. Avoiding the stock of drug manufacturer Pfizer was timely, as it returned -9% the past 12 months, making this benchmark component the fund’s top relative contributor. Within the capital goods industry, AECOM (+58%) and General Electric (+27%) were hidden-value conglomerate break-up stories that we thought traded at large discounts to intrinsic value. Overweighting these stocks contributed to the fund’s relative result the past 12 months. We notably added to GE, making it a sizable period-end holding.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Note to shareholders: There were several portfolio management changes among the fund’s equity sector sleeves. On March 30, 2019, Nicola Stafford assumed responsibility for the consumer staples subportfolio, succeeding Robert Lee. On November 8, 2019, Jody Simes assumed responsibility for the materials subportfolio, succeeding Richard Malnight. On January 1, 2020, Ashley Fernandes assumed responsibility for the energy subportfolio, succeeding Jonathan Kasen. On January 1, 2020, Melissa Reilly assumed responsibility for the consumer staples subportfolio, succeeding Nicola Stafford, who retains management of the consumer discretionary sleeve.
Fidelity® Series All-Sector Equity Fund
Investment Summary (Unaudited)
Top Ten Stocks as of January 31, 2020
| | % of fund's net assets |
| Microsoft Corp. | 4.7 |
| Apple, Inc. | 4.5 |
| Alphabet, Inc. Class C | 3.0 |
| Amazon.com, Inc. | 2.3 |
| Facebook, Inc. Class A | 2.1 |
| Capital One Financial Corp. | 1.9 |
| General Electric Co. | 1.7 |
| UnitedHealth Group, Inc. | 1.6 |
| PepsiCo, Inc. | 1.5 |
| Bank of America Corp. | 1.5 |
| | 24.8 |
Top Five Market Sectors as of January 31, 2020
| | % of fund's net assets |
| Information Technology | 23.8 |
| Health Care | 13.2 |
| Financials | 12.7 |
| Consumer Discretionary | 9.9 |
| Communication Services | 9.7 |
Asset Allocation (% of fund's net assets)
| As of January 31, 2020* |
| | Stocks and Equity Futures | 99.5% |
| | Short-Term Investments and Net Other Assets (Liabilities) | 0.5% |
* Foreign investments - 3.3%
Fidelity® Series All-Sector Equity Fund
Schedule of Investments January 31, 2020
Showing Percentage of Net Assets
| Common Stocks - 98.5% | | | |
| | | Shares | Value |
| COMMUNICATION SERVICES - 9.7% | | | |
| Diversified Telecommunication Services - 0.5% | | | |
| AT&T, Inc. | | 469,900 | $17,677,638 |
| Entertainment - 2.9% | | | |
| Activision Blizzard, Inc. | | 690,621 | 40,387,516 |
| Electronic Arts, Inc. (a) | | 56,900 | 6,140,648 |
| Netflix, Inc. (a) | | 55,800 | 19,256,022 |
| Take-Two Interactive Software, Inc. (a) | | 12,800 | 1,595,392 |
| The Walt Disney Co. | | 242,517 | 33,542,526 |
| | | | 100,922,104 |
| Interactive Media & Services - 5.6% | | | |
| Alphabet, Inc.: | | | |
| Class A (a) | | 7,300 | 10,459,294 |
| Class C (a) | | 72,266 | 103,646,065 |
| Facebook, Inc. Class A (a) | | 359,200 | 72,526,072 |
| IAC/InterActiveCorp (a) | | 20,700 | 5,042,313 |
| TripAdvisor, Inc. | | 12,500 | 341,500 |
| Twitter, Inc. (a) | | 114,700 | 3,725,456 |
| | | | 195,740,700 |
| Media - 0.5% | | | |
| Altice U.S.A., Inc. Class A (a) | | 192,700 | 5,272,272 |
| CBS Corp. Class B | | 133,792 | 4,566,321 |
| Comcast Corp. Class A | | 142,248 | 6,143,691 |
| Liberty Media Corp. Liberty SiriusXM Series A (a) | | 37,400 | 1,816,518 |
| | | | 17,798,802 |
| Wireless Telecommunication Services - 0.2% | | | |
| Sprint Corp. (a) | | 83,600 | 365,332 |
| T-Mobile U.S., Inc. (a) | | 76,781 | 6,080,287 |
| | | | 6,445,619 |
|
| TOTAL COMMUNICATION SERVICES | | | 338,584,863 |
|
| CONSUMER DISCRETIONARY - 9.9% | | | |
| Auto Components - 0.2% | | | |
| Aptiv PLC | | 93,200 | 7,902,428 |
| Automobiles - 0.3% | | | |
| General Motors Co. | | 330,700 | 11,042,073 |
| Diversified Consumer Services - 0.3% | | | |
| Service Corp. International | | 204,400 | 9,800,980 |
| Hotels, Restaurants & Leisure - 1.9% | | | |
| Domino's Pizza, Inc. | | 24,100 | 6,790,175 |
| McDonald's Corp. | | 205,300 | 43,928,041 |
| Royal Caribbean Cruises Ltd. | | 117,800 | 13,792,024 |
| | | | 64,510,240 |
| Household Durables - 0.2% | | | |
| Lennar Corp. Class A | | 112,300 | 7,452,228 |
| Internet & Direct Marketing Retail - 3.1% | | | |
| Amazon.com, Inc. (a) | | 39,120 | 78,581,126 |
| Etsy, Inc. (a) | | 107,800 | 5,261,718 |
| The Booking Holdings, Inc. (a) | | 12,990 | 23,778,845 |
| | | | 107,621,689 |
| Leisure Products - 0.4% | | | |
| Brunswick Corp. | | 105,500 | 6,630,675 |
| Hasbro, Inc. | | 75,900 | 7,731,933 |
| | | | 14,362,608 |
| Multiline Retail - 0.4% | | | |
| Dollar Tree, Inc. (a) | | 176,000 | 15,324,320 |
| Specialty Retail - 2.5% | | | |
| Burlington Stores, Inc. (a) | | 51,160 | 11,125,765 |
| The Home Depot, Inc. | | 172,879 | 39,433,700 |
| TJX Companies, Inc. | | 359,696 | 21,236,452 |
| Ulta Beauty, Inc. (a) | | 53,700 | 14,386,767 |
| | | | 86,182,684 |
| Textiles, Apparel & Luxury Goods - 0.6% | | | |
| NIKE, Inc. Class B | | 219,700 | 21,157,110 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 345,356,360 |
|
| CONSUMER STAPLES - 6.6% | | | |
| Beverages - 1.9% | | | |
| Keurig Dr. Pepper, Inc. | | 252,843 | 7,213,611 |
| Monster Beverage Corp. (a) | | 116,198 | 7,738,787 |
| PepsiCo, Inc. | | 366,400 | 52,036,128 |
| | | | 66,988,526 |
| Food & Staples Retailing - 1.7% | | | |
| Costco Wholesale Corp. | | 66,900 | 20,439,288 |
| Kroger Co. | | 290,100 | 7,792,086 |
| U.S. Foods Holding Corp. (a) | | 142,100 | 5,708,157 |
| Walmart, Inc. | | 222,900 | 25,519,821 |
| | | | 59,459,352 |
| Food Products - 0.7% | | | |
| Beyond Meat, Inc. (b) | | 12,731 | 1,405,757 |
| Mondelez International, Inc. | | 292,700 | 16,795,126 |
| Tyson Foods, Inc. Class A | | 77,200 | 6,379,036 |
| | | | 24,579,919 |
| Household Products - 1.4% | | | |
| Energizer Holdings, Inc. | | 143,700 | 6,647,562 |
| Procter & Gamble Co. | | 327,100 | 40,763,202 |
| | | | 47,410,764 |
| Personal Products - 0.2% | | | |
| Estee Lauder Companies, Inc. Class A | | 37,900 | 7,396,564 |
| Tobacco - 0.7% | | | |
| Altria Group, Inc. | | 465,130 | 22,107,629 |
|
| TOTAL CONSUMER STAPLES | | | 227,942,754 |
|
| ENERGY - 3.5% | | | |
| Energy Equipment & Services - 0.2% | | | |
| Baker Hughes, A GE Co. Class A | | 206,300 | 4,468,458 |
| Schlumberger Ltd. | | 83,400 | 2,794,734 |
| | | | 7,263,192 |
| Oil, Gas & Consumable Fuels - 3.3% | | | |
| Apache Corp. | | 61,700 | 1,693,048 |
| Cheniere Energy, Inc. (a) | | 159,000 | 9,419,160 |
| Chevron Corp. | | 129,829 | 13,909,879 |
| Concho Resources, Inc. | | 29,400 | 2,227,932 |
| ConocoPhillips Co. | | 63,100 | 3,750,033 |
| Exxon Mobil Corp. | | 764,224 | 47,473,595 |
| Hess Corp. | | 155,500 | 8,796,635 |
| Kosmos Energy Ltd. | | 517,900 | 2,646,469 |
| Murphy Oil Corp. | | 289,900 | 6,076,304 |
| Noble Energy, Inc. | | 121,100 | 2,394,147 |
| Phillips 66 Co. | | 90,800 | 8,296,396 |
| Pioneer Natural Resources Co. | | 26,600 | 3,591,000 |
| Valero Energy Corp. | | 63,400 | 5,345,254 |
| | | | 115,619,852 |
|
| TOTAL ENERGY | | | 122,883,044 |
|
| FINANCIALS - 12.7% | | | |
| Banks - 4.7% | | | |
| Bank of America Corp. | | 1,579,187 | 51,844,709 |
| BB&T Corp. | | 225,783 | 11,643,629 |
| Citigroup, Inc. | | 375,584 | 27,947,205 |
| First Horizon National Corp. | | 243,900 | 3,902,400 |
| Huntington Bancshares, Inc. | | 520,857 | 7,068,029 |
| KeyCorp | | 626,700 | 11,725,557 |
| M&T Bank Corp. | | 51,500 | 8,678,780 |
| Signature Bank | | 59,600 | 8,456,644 |
| Synovus Financial Corp. | | 81,300 | 2,847,126 |
| Wells Fargo & Co. | | 586,500 | 27,530,310 |
| | | | 161,644,389 |
| Capital Markets - 1.9% | | | |
| BlackRock, Inc. Class A | | 26,500 | 13,974,775 |
| Cboe Global Markets, Inc. | | 131,300 | 16,178,786 |
| E*TRADE Financial Corp. | | 100,552 | 4,285,526 |
| Intercontinental Exchange, Inc. | | 103,000 | 10,273,220 |
| Morgan Stanley | | 333,100 | 17,407,806 |
| Virtu Financial, Inc. Class A (b) | | 310,863 | 5,188,303 |
| | | | 67,308,416 |
| Consumer Finance - 2.9% | | | |
| Ally Financial, Inc. | | 260,500 | 8,343,815 |
| American Express Co. | | 133,000 | 17,272,710 |
| Capital One Financial Corp. | | 664,205 | 66,287,659 |
| SLM Corp. | | 125,900 | 1,374,828 |
| Synchrony Financial | | 199,400 | 6,462,554 |
| | | | 99,741,566 |
| Diversified Financial Services - 0.7% | | | |
| Berkshire Hathaway, Inc. Class B (a) | | 112,600 | 25,270,818 |
| Insurance - 2.5% | | | |
| American International Group, Inc. | | 298,500 | 15,002,610 |
| Hartford Financial Services Group, Inc. | | 120,900 | 7,166,952 |
| Marsh & McLennan Companies, Inc. | | 141,000 | 15,772,260 |
| MetLife, Inc. | | 160,200 | 7,963,542 |
| The Travelers Companies, Inc. | | 176,600 | 23,244,092 |
| Willis Group Holdings PLC | | 87,100 | 18,403,359 |
| | | | 87,552,815 |
|
| TOTAL FINANCIALS | | | 441,518,004 |
|
| HEALTH CARE - 13.2% | | | |
| Biotechnology - 2.4% | | | |
| Alexion Pharmaceuticals, Inc. (a) | | 96,400 | 9,581,196 |
| Amgen, Inc. | | 163,103 | 35,238,403 |
| Biogen, Inc. (a) | | 11,600 | 3,118,660 |
| Neurocrine Biosciences, Inc. (a) | | 57,800 | 5,784,624 |
| Sarepta Therapeutics, Inc. (a) | | 19,300 | 2,238,028 |
| Vertex Pharmaceuticals, Inc. (a) | | 119,000 | 27,018,950 |
| | | | 82,979,861 |
| Health Care Equipment & Supplies - 3.4% | | | |
| Abbott Laboratories | | 276,600 | 24,102,924 |
| Becton, Dickinson & Co. | | 82,400 | 22,674,832 |
| Boston Scientific Corp. (a) | | 676,310 | 28,317,100 |
| Danaher Corp. | | 61,100 | 9,829,157 |
| Intuitive Surgical, Inc. (a) | | 32,500 | 18,192,850 |
| Stryker Corp. | | 71,100 | 14,980,770 |
| | | | 118,097,633 |
| Health Care Providers & Services - 3.1% | | | |
| Cigna Corp. | | 91,400 | 17,583,532 |
| HCA Holdings, Inc. | | 95,400 | 13,241,520 |
| Humana, Inc. | | 66,600 | 22,393,584 |
| UnitedHealth Group, Inc. | | 198,500 | 54,081,325 |
| | | | 107,299,961 |
| Life Sciences Tools & Services - 0.7% | | | |
| Thermo Fisher Scientific, Inc. | | 76,800 | 24,052,992 |
| Pharmaceuticals - 3.6% | | | |
| Bristol-Myers Squibb Co. | | 609,600 | 38,374,320 |
| Eli Lilly & Co. | | 316,366 | 44,177,348 |
| Horizon Pharma PLC (a) | | 277,100 | 9,557,179 |
| Merck & Co., Inc. | | 232,200 | 19,839,168 |
| Zoetis, Inc. Class A | | 111,000 | 14,897,310 |
| | | | 126,845,325 |
|
| TOTAL HEALTH CARE | | | 459,275,772 |
|
| INDUSTRIALS - 9.4% | | | |
| Aerospace & Defense - 1.0% | | | |
| General Dynamics Corp. | | 31,100 | 5,456,184 |
| Northrop Grumman Corp. | | 23,500 | 8,802,395 |
| The Boeing Co. | | 31,200 | 9,930,024 |
| United Technologies Corp. | | 74,448 | 11,182,090 |
| | | | 35,370,693 |
| Air Freight & Logistics - 0.5% | | | |
| FedEx Corp. | | 119,399 | 17,269,871 |
| Airlines - 0.6% | | | |
| American Airlines Group, Inc. (b) | | 674,565 | 18,105,325 |
| JetBlue Airways Corp. (a) | | 226,447 | 4,490,444 |
| | | | 22,595,769 |
| Construction & Engineering - 1.1% | | | |
| AECOM (a) | | 669,600 | 32,294,808 |
| Jacobs Engineering Group, Inc. | | 53,000 | 4,904,090 |
| | | | 37,198,898 |
| Electrical Equipment - 0.4% | | | |
| Sensata Technologies, Inc. PLC (a) | | 307,500 | 14,535,525 |
| Industrial Conglomerates - 1.9% | | | |
| 3M Co. | | 40,500 | 6,425,730 |
| General Electric Co. | | 4,708,519 | 58,621,062 |
| Honeywell International, Inc. | | 9,305 | 1,611,812 |
| | | | 66,658,604 |
| Machinery - 0.9% | | | |
| Allison Transmission Holdings, Inc. | | 372,500 | 16,464,500 |
| Caterpillar, Inc. | | 25,600 | 3,362,560 |
| WABCO Holdings, Inc. (a) | | 78,300 | 10,621,395 |
| | | | 30,448,455 |
| Professional Services - 0.9% | | | |
| Nielsen Holdings PLC | | 1,627,484 | 33,200,674 |
| Road & Rail - 1.3% | | | |
| CSX Corp. | | 90,900 | 6,939,306 |
| Norfolk Southern Corp. | | 154,800 | 32,230,908 |
| Union Pacific Corp. | | 27,500 | 4,934,050 |
| | | | 44,104,264 |
| Trading Companies & Distributors - 0.8% | | | |
| HD Supply Holdings, Inc. (a) | | 672,800 | 27,409,872 |
|
| TOTAL INDUSTRIALS | | | 328,792,625 |
|
| INFORMATION TECHNOLOGY - 23.8% | | | |
| Communications Equipment - 0.1% | | | |
| CommScope Holding Co., Inc. (a) | | 200,100 | 2,438,219 |
| Electronic Equipment & Components - 0.2% | | | |
| Jabil, Inc. | | 219,436 | 8,533,866 |
| IT Services - 5.0% | | | |
| DXC Technology Co. | | 130,200 | 4,150,776 |
| Euronet Worldwide, Inc. (a) | | 14,900 | 2,348,836 |
| Fidelity National Information Services, Inc. | | 225,758 | 32,432,394 |
| Genpact Ltd. | | 162,200 | 7,180,594 |
| Global Payments, Inc. | | 68,700 | 13,427,415 |
| GoDaddy, Inc. (a) | | 160,400 | 10,780,484 |
| IBM Corp. | | 38,900 | 5,591,097 |
| MasterCard, Inc. Class A | | 102,900 | 32,510,226 |
| MongoDB, Inc. Class A (a)(b) | | 111,300 | 18,243,183 |
| PayPal Holdings, Inc. (a) | | 222,300 | 25,317,747 |
| Square, Inc. (a) | | 74,300 | 5,549,467 |
| Twilio, Inc. Class A (a)(b) | | 138,600 | 17,233,524 |
| | | | 174,765,743 |
| Semiconductors & Semiconductor Equipment - 3.7% | | | |
| Advanced Micro Devices, Inc. (a) | | 104,900 | 4,930,300 |
| Analog Devices, Inc. | | 29,900 | 3,281,525 |
| Applied Materials, Inc. | | 226,600 | 13,140,534 |
| Lam Research Corp. | | 28,430 | 8,478,110 |
| Marvell Technology Group Ltd. | | 625,900 | 15,046,636 |
| Microchip Technology, Inc. (b) | | 28,300 | 2,758,684 |
| Micron Technology, Inc. (a) | | 608,530 | 32,306,858 |
| NVIDIA Corp. | | 87,580 | 20,706,539 |
| ON Semiconductor Corp. (a) | | 403,168 | 9,333,339 |
| Qorvo, Inc. (a) | | 24,400 | 2,582,984 |
| Qualcomm, Inc. | | 146,804 | 12,523,849 |
| Skyworks Solutions, Inc. | | 30,900 | 3,496,335 |
| Xilinx, Inc. | | 12,800 | 1,081,344 |
| | | | 129,667,037 |
| Software - 9.8% | | | |
| Adobe, Inc. (a) | | 60,000 | 21,068,400 |
| Autodesk, Inc. (a) | | 243,835 | 47,998,920 |
| Citrix Systems, Inc. | | 22,454 | 2,721,874 |
| Elastic NV (a) | | 122,300 | 7,934,824 |
| HubSpot, Inc. (a) | | 23,100 | 4,179,714 |
| Microsoft Corp. | | 966,600 | 164,544,320 |
| Nortonlifelock, Inc. | | 448,500 | 12,746,370 |
| Nuance Communications, Inc. (a) | | 117,401 | 2,221,227 |
| Nutanix, Inc. Class A (a) | | 12,000 | 389,640 |
| Oracle Corp. | | 86,900 | 4,557,905 |
| Palo Alto Networks, Inc. (a) | | 16,500 | 3,873,870 |
| Parametric Technology Corp. (a) | | 42,000 | 3,491,040 |
| RealPage, Inc. (a) | | 41,700 | 2,433,195 |
| RingCentral, Inc. (a) | | 15,800 | 3,248,164 |
| Salesforce.com, Inc. (a) | | 207,263 | 37,786,118 |
| Splunk, Inc. (a) | | 17,400 | 2,701,524 |
| SS&C Technologies Holdings, Inc. | | 77,300 | 4,870,673 |
| Workday, Inc. Class A (a) | | 53,600 | 9,896,168 |
| Zendesk, Inc. (a) | | 41,800 | 3,611,520 |
| | | | 340,275,466 |
| Technology Hardware, Storage & Peripherals - 5.0% | | | |
| Apple, Inc. | | 506,659 | 156,816,027 |
| Pure Storage, Inc. Class A (a) | | 231,500 | 4,120,700 |
| Western Digital Corp. | | 204,300 | 13,381,650 |
| | | | 174,318,377 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 829,998,708 |
|
| MATERIALS - 2.6% | | | |
| Chemicals - 1.2% | | | |
| Air Products & Chemicals, Inc. | | 36,877 | 8,802,909 |
| Albemarle Corp. U.S. (b) | | 52,900 | 4,246,812 |
| DuPont de Nemours, Inc. | | 114,474 | 5,858,779 |
| Ecolab, Inc. | | 23,317 | 4,572,697 |
| FMC Corp. | | 44,748 | 4,277,461 |
| Linde PLC | | 42,486 | 8,630,181 |
| Sherwin-Williams Co. | | 7,185 | 4,001,973 |
| The Chemours Co. LLC | | 168,861 | 2,342,102 |
| | | | 42,732,914 |
| Construction Materials - 0.3% | | | |
| Martin Marietta Materials, Inc. | | 16,639 | 4,389,368 |
| Vulcan Materials Co. | | 31,500 | 4,461,345 |
| | | | 8,850,713 |
| Containers & Packaging - 0.4% | | | |
| Avery Dennison Corp. | | 32,034 | 4,204,142 |
| Crown Holdings, Inc. (a) | | 110,300 | 8,165,509 |
| | | | 12,369,651 |
| Metals & Mining - 0.7% | | | |
| Freeport-McMoRan, Inc. | | 966,334 | 10,726,307 |
| Newmont Corp. | | 181,600 | 8,182,896 |
| Reliance Steel & Aluminum Co. | | 36,469 | 4,186,641 |
| Royal Gold, Inc. | | 15,800 | 1,822,056 |
| | | | 24,917,900 |
|
| TOTAL MATERIALS | | | 88,871,178 |
|
| REAL ESTATE - 3.7% | | | |
| Equity Real Estate Investment Trusts (REITs) - 3.6% | | | |
| Alexandria Real Estate Equities, Inc. | | 40,900 | 6,674,880 |
| American Homes 4 Rent Class A | | 317,200 | 8,669,076 |
| American Tower Corp. | | 97,000 | 22,478,780 |
| Corporate Office Properties Trust (SBI) | | 99,000 | 2,947,230 |
| CubeSmart | | 136,000 | 4,307,120 |
| Digital Realty Trust, Inc. | | 116,300 | 14,303,737 |
| Equinix, Inc. | | 15,000 | 8,845,950 |
| Equity Lifestyle Properties, Inc. | | 133,400 | 9,704,850 |
| Omega Healthcare Investors, Inc. | | 65,200 | 2,735,140 |
| Prologis, Inc. | | 197,200 | 18,315,936 |
| Public Storage | | 21,300 | 4,766,088 |
| Store Capital Corp. | | 104,200 | 4,089,850 |
| Welltower, Inc. | | 125,600 | 10,664,696 |
| Weyerhaeuser Co. | | 146,300 | 4,235,385 |
| | | | 122,738,718 |
| Real Estate Management & Development - 0.1% | | | |
| Jones Lang LaSalle, Inc. | | 24,800 | 4,211,536 |
|
| TOTAL REAL ESTATE | | | 126,950,254 |
|
| UTILITIES - 3.4% | | | |
| Electric Utilities - 2.1% | | | |
| Edison International | | 155,400 | 11,895,870 |
| Entergy Corp. | | 53,600 | 7,049,472 |
| Evergy, Inc. | | 81,600 | 5,888,256 |
| Exelon Corp. | | 304,800 | 14,505,432 |
| FirstEnergy Corp. | | 120,300 | 6,110,037 |
| NextEra Energy, Inc. | | 65,135 | 17,469,207 |
| PG&E Corp. (a) | | 63,000 | 958,230 |
| Southern Co. | | 107,400 | 7,560,960 |
| | | | 71,437,464 |
| Independent Power and Renewable Electricity Producers - 0.2% | | | |
| NRG Energy, Inc. | | 138,300 | 5,101,887 |
| Vistra Energy Corp. | | 151,000 | 3,400,520 |
| | | | 8,502,407 |
| Multi-Utilities - 1.1% | | | |
| Dominion Energy, Inc. | | 251,214 | 21,541,601 |
| Sempra Energy | | 101,844 | 16,360,220 |
| | | | 37,901,821 |
|
| TOTAL UTILITIES | | | 117,841,692 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $2,311,654,430) | | | 3,428,015,254 |
| | | Principal Amount | Value |
|
| U.S. Treasury Obligations - 0.1% | | | |
| U.S. Treasury Bills, yield at date of purchase 1.53% to 1.56% 3/26/20 (c) | | | |
| (Cost $4,669,310) | | 4,680,000 | 4,669,729 |
| | | Shares | Value |
|
| Money Market Funds - 2.7% | | | |
| Fidelity Cash Central Fund 1.58% (d) | | 58,103,822 | $58,115,443 |
| Fidelity Securities Lending Cash Central Fund 1.59% (d)(e) | | 33,752,369 | 33,755,745 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $91,870,067) | | | 91,871,188 |
| TOTAL INVESTMENT IN SECURITIES - 101.3% | | | |
| (Cost $2,408,193,807) | | | 3,524,556,171 |
| NET OTHER ASSETS (LIABILITIES) - (1.3)% | | | (43,681,716) |
| NET ASSETS - 100% | | | $3,480,874,455 |
| Futures Contracts | | | | | |
| | Number of contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/(Depreciation) |
| Purchased | | | | | |
| Equity Index Contracts | | | | | |
| CME E-mini S&P 500 Index Contracts (United States) | 221 | March 2020 | $35,625,200 | $70,742 | $70,742 |
The notional amount of futures purchased as a percentage of Net Assets is 1.0%
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $1,089,604.
(d) Affiliated fund that is generally 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $1,754,162 |
| Fidelity Securities Lending Cash Central Fund | 33,872 |
| Total | $1,788,034 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations, if applicable. Amount for Fidelity Securities Lending Cash Central Fund 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.
Investment Valuation
The following is a summary of the inputs used, as of January 31, 2020, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Communication Services | $338,584,863 | $338,584,863 | $-- | $-- |
| Consumer Discretionary | 345,356,360 | 345,356,360 | -- | -- |
| Consumer Staples | 227,942,754 | 227,942,754 | -- | -- |
| Energy | 122,883,044 | 122,883,044 | -- | -- |
| Financials | 441,518,004 | 441,518,004 | -- | -- |
| Health Care | 459,275,772 | 459,275,772 | -- | -- |
| Industrials | 328,792,625 | 328,792,625 | -- | -- |
| Information Technology | 829,998,708 | 829,998,708 | -- | -- |
| Materials | 88,871,178 | 88,871,178 | -- | -- |
| Real Estate | 126,950,254 | 126,950,254 | -- | -- |
| Utilities | 117,841,692 | 117,841,692 | -- | -- |
| U.S. Government and Government Agency Obligations | 4,669,729 | -- | 4,669,729 | -- |
| Money Market Funds | 91,871,188 | 91,871,188 | -- | -- |
| Total Investments in Securities: | $3,524,556,171 | $3,519,886,442 | $4,669,729 | $-- |
| Derivative Instruments: | | | | |
| Assets | | | | |
| Futures Contracts | $70,742 | $70,742 | $-- | $-- |
| Total Assets | $70,742 | $70,742 | $-- | $-- |
| Total Derivative Instruments: | $70,742 | $70,742 | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of January 31, 2020. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.
| Primary Risk Exposure / Derivative Type | Value |
| | Asset | Liability |
| Equity Risk | | |
| Futures Contracts(a) | $70,742 | $0 |
| Total Equity Risk | 70,742 | 0 |
| Total Value of Derivatives | $70,742 | $0 |
(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Schedule of Investments. In the Statement of Assets and Liabilities, the period end daily variation margin is included in receivable or payable for daily variation margin on futures contracts, and the net cumulative appreciation (depreciation) is included in Total accumulated earnings (loss).
See accompanying notes which are an integral part of the financial statements.
Fidelity® Series All-Sector Equity Fund
Financial Statements
Statement of Assets and Liabilities
| | | January 31, 2020 |
| Assets | | |
Investment in securities, at value (including securities loaned of $32,576,846) — See accompanying schedule:
Unaffiliated issuers (cost $2,316,323,740) | $3,432,684,983 | |
| Fidelity Central Funds (cost $91,870,067) | 91,871,188 | |
| Total Investment in Securities (cost $2,408,193,807) | | $3,524,556,171 |
| Cash | | 426,174 |
| Receivable for investments sold | | 101,496,778 |
| Receivable for fund shares sold | | 26,244 |
| Dividends receivable | | 1,870,345 |
| Distributions receivable from Fidelity Central Funds | | 81,049 |
| Other receivables | | 122,157 |
| Total assets | | 3,628,578,918 |
| Liabilities | | |
| Payable for investments purchased | $26,283,284 | |
| Payable for fund shares redeemed | 81,494,329 | |
| Payable for daily variation margin on futures contracts | 537,050 | |
| Deferred dividend income | 5,603,100 | |
| Other payables and accrued expenses | 29,500 | |
| Collateral on securities loaned | 33,757,200 | |
| Total liabilities | | 147,704,463 |
| Net Assets | | $3,480,874,455 |
| Net Assets consist of: | | |
| Paid in capital | | $2,182,600,350 |
| Total accumulated earnings (loss) | | 1,298,274,105 |
| Net Assets | | $3,480,874,455 |
| Net Asset Value, offering price and redemption price per share ($3,480,874,455 ÷ 334,395,448 shares) | | $10.39 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended January 31, 2020 |
| Investment Income | | |
| Dividends | | $59,390,558 |
| Interest | | 77,754 |
| Income from Fidelity Central Funds (including $33,872 from security lending) | | 1,788,034 |
| Total income | | 61,256,346 |
| Expenses | | |
| Custodian fees and expenses | $88,507 | |
| Independent trustees' fees and expenses | 19,833 | |
| Interest | 2,343 | |
| Commitment fees | 9,247 | |
| Total expenses | | 119,930 |
| Net investment income (loss) | | 61,136,416 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 384,532,859 | |
| Fidelity Central Funds | 2,751 | |
| Foreign currency transactions | 14,766 | |
| Futures contracts | 10,358,106 | |
| Total net realized gain (loss) | | 394,908,482 |
| Change in net unrealized appreciation (depreciation) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 248,122,624 | |
| Fidelity Central Funds | (4,205) | |
| Assets and liabilities in foreign currencies | (908) | |
| Futures contracts | (1,491,956) | |
| Total change in net unrealized appreciation (depreciation) | | 246,625,555 |
| Net gain (loss) | | 641,534,037 |
| Net increase (decrease) in net assets resulting from operations | | $702,670,453 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $61,136,416 | $88,943,119 |
| Net realized gain (loss) | 394,908,482 | 1,141,470,899 |
| Change in net unrealized appreciation (depreciation) | 246,625,555 | (1,240,879,844) |
| Net increase (decrease) in net assets resulting from operations | 702,670,453 | (10,465,826) |
| Distributions to shareholders | (301,301,401) | (1,124,214,915) |
| Share transactions | | |
| Proceeds from sales of shares | 401,081,505 | 378,787,782 |
| Reinvestment of distributions | 301,301,401 | 1,124,214,915 |
| Cost of shares redeemed | (1,221,330,518) | (3,320,012,000) |
| Net increase (decrease) in net assets resulting from share transactions | (518,947,612) | (1,817,009,303) |
| Total increase (decrease) in net assets | (117,578,560) | (2,951,690,044) |
| Net Assets | | |
| Beginning of period | 3,598,453,015 | 6,550,143,059 |
| End of period | $3,480,874,455 | $3,598,453,015 |
| Other Information | | |
| Shares | | |
| Sold | 39,640,867 | 30,970,396 |
| Issued in reinvestment of distributions | 30,042,877 | 117,674,923 |
| Redeemed | (120,330,645) | (250,295,870) |
| Net increase (decrease) | (50,646,901) | (101,650,551) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Series All-Sector Equity Fund
| | | | | | |
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $9.35 | $13.46 | $12.33 | $12.02 | $13.80 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .17 | .21 | .18 | .12 | .12 |
| Net realized and unrealized gain (loss) | 1.78 | (.79) | 2.80 | 2.33 | (.54) |
| Total from investment operations | 1.95 | (.58) | 2.98 | 2.45 | (.42) |
| Distributions from net investment income | (.18) | (.22) | (.19) | (.18) | (.14)B |
| Distributions from net realized gain | (.71) | (3.31) | (1.66) | (1.96) | (1.22)B |
| Total distributions | (.89) | (3.53) | (1.85) | (2.14) | (1.36) |
| Net asset value, end of period | $10.41 | $9.35 | $13.46 | $12.33 | $12.02 |
| Total ReturnC | 21.33% | (3.23)% | 25.62% | 21.03% | (3.55)% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | - %F | - %F | .20% | .68% | .73% |
| Expenses net of fee waivers, if any | - %F | - %F | .20% | .68% | .73% |
| Expenses net of all reductions | - %F | - %F | .20% | .67% | .73% |
| Net investment income (loss) | 1.68% | 1.68% | 1.37% | .95% | .85% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $3,480,874 | $3,598,453 | $6,550,143 | $2,736,748 | $4,418,280 |
| Portfolio turnover rateG | 59% | 65% | 61% | 43% | 66% |
A Calculated based on average shares outstanding during the period.
B The amounts shown reflect certain reclassifications related to book to tax differences that were made in the year shown.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D 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.
E Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
F Amount represents less than .005%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Fidelity® Series Stock Selector Large Cap Value Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended January 31, 2020 | Past 1 year | Past 5 years | Life of fundA |
| Fidelity® Series Stock Selector Large Cap Value Fund | 13.98% | 7.59% | 10.84% |
A From December 6, 2012
$10,000 Over Life of Fund
Let's say hypothetically that $10,000 was invested in Fidelity® Series Stock Selector Large Cap Value Fund on December 6, 2012, when the fund started.
The chart shows how the value of your investment would have changed, and also shows how the Russell 1000® Value Index performed over the same period.
| Period Ending Values |
| $20,887 | Fidelity® Series Stock Selector Large Cap Value Fund |
| $22,277 | Russell 1000® Value Index |
Fidelity® Series Stock Selector Large Cap Value Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks rolled for the 12 months ending January 31, 2020, with the S&P 500
® index gaining 21.68%, despite persistent, nagging concerns about global economic growth and trade. After a rough end to 2018, equities sharply reversed course to begin 2019 amid upbeat company earnings and signs the Federal Reserve may pause on rates. The uptrend extended until May, when the index sunk as trade talks between the U.S. and China broke down. The bull market roared back to record a series of highs in July, when the Fed cut interest rates for the first time since 2008. Volatility intensified in August, as the Treasury yield curve inverted, which some investors viewed as a sign the U.S. economy could be heading for recession. But the market proved resilient, hitting a new high on October 30, when the Fed lowered rates for the third time in 2019, and moving higher through December 31. The new year began with a flattish January, with growing anxiety related to the new coronavirus outbreak and its impact on the global economy. By sector, information technology (+46%) led the way, driven by strong growth trends. The defensive utilities sector (+30%) also stood out, while communication services and consumer staples were about in line with the broader market. Conversely, energy (-11%) was by far the weakest – struggling due to sluggish oil prices – followed by several strong gainers that still lagged: materials (+11%), health care (+12%), industrials (+16%), consumer discretionary (+17%), and financials and real estate (+18% each).
Comments from Lead Portfolio Manager Matthew Friedman: For the fiscal year, the fund gained 13.98%, underperforming the 14.88% advance of the benchmark Russell 1000
® Value Index. Stock picking hurt the fund’s return versus the benchmark, especially within the materials sector, as well as the software & services and banking industries. The fund’s cash position of about 3%, on average, detracted against a backdrop of rising equity markets the past 12 months. In terms of individual stocks, not owning financial services giant and index component JPMorgan Chase (+32%) was the portfolio’s largest individual detractor. Notably, the company reported better-than-anticipated third- and fourth-quarter financial results owed in part to consumer strength, economic stabilization and receding U.S.-China trade tensions. An overweighting in chemicals giant DuPont de Nemours (-35%) also weighed on the fund’s relative result. The firm's management team took longer than investors expected with plans to split off some of the firm's businesses in 2019. Specifically, investors also worried about liabilities faced by DuPont and Chemours, a 2015 spinoff of DuPont, related to lawsuits tied to PFOA, a cancer-linked chemical formerly used to make Teflon non-stick coating. Conversely, favorable investment choices among energy stocks were a big positive, not owning large benchmark component and industry stalwart Exxon Mobil (-11%) in particular, which underperformed this period. An overweighting in multinational engineering firm Aecom (+57%) also contributed.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® Series Stock Selector Large Cap Value Fund
Investment Summary (Unaudited)
Top Ten Stocks as of January 31, 2020
| | % of fund's net assets |
| Bank of America Corp. | 3.2 |
| Capital One Financial Corp. | 3.0 |
| Johnson & Johnson | 2.4 |
| General Electric Co. | 2.2 |
| Procter & Gamble Co. | 2.1 |
| McDonald's Corp. | 1.9 |
| Wells Fargo & Co. | 1.7 |
| Citigroup, Inc. | 1.6 |
| Verizon Communications, Inc. | 1.6 |
| Berkshire Hathaway, Inc. Class B | 1.6 |
| | 21.3 |
Top Five Market Sectors as of January 31, 2020
| | % of fund's net assets |
| Financials | 23.1 |
| Health Care | 11.9 |
| Industrials | 9.8 |
| Consumer Staples | 8.6 |
| Communication Services | 7.8 |
Asset Allocation (% of fund's net assets)
| As of January 31, 2020* |
| | Stocks and Equity Futures | 97.8% |
| | Short-Term Investments and Net Other Assets (Liabilities) | 2.2% |
* Foreign investments - 9.0%
Fidelity® Series Stock Selector Large Cap Value Fund
Schedule of Investments January 31, 2020
Showing Percentage of Net Assets
| Common Stocks - 96.7% | | | |
| | | Shares | Value |
| COMMUNICATION SERVICES - 7.8% | | | |
| Diversified Telecommunication Services - 2.9% | | | |
| AT&T, Inc. | | 3,600,000 | $135,432,000 |
| Verizon Communications, Inc. | | 2,619,003 | 155,673,538 |
| | | | 291,105,538 |
| Entertainment - 2.0% | | | |
| Cinemark Holdings, Inc. | | 2,011,719 | 63,389,266 |
| The Walt Disney Co. | | 982,824 | 135,934,387 |
| | | | 199,323,653 |
| Media - 2.9% | | | |
| CBS Corp. Class B | | 926,300 | 31,614,619 |
| Comcast Corp. Class A | | 3,235,200 | 139,728,288 |
| Interpublic Group of Companies, Inc. | | 5,312,300 | 120,589,210 |
| | | | 291,932,117 |
|
| TOTAL COMMUNICATION SERVICES | | | 782,361,308 |
|
| CONSUMER DISCRETIONARY - 5.8% | | | |
| Auto Components - 0.5% | | | |
| Aptiv PLC | | 538,500 | 45,659,415 |
| Automobiles - 0.6% | | | |
| General Motors Co. | | 1,915,900 | 63,971,901 |
| Hotels, Restaurants & Leisure - 2.7% | | | |
| McDonald's Corp. | | 904,260 | 193,484,512 |
| Royal Caribbean Cruises Ltd. | | 650,600 | 76,172,248 |
| | | | 269,656,760 |
| Household Durables - 0.4% | | | |
| Lennar Corp. Class A | | 636,000 | 42,204,960 |
| Multiline Retail - 0.6% | | | |
| Dollar Tree, Inc. (a) | | 699,300 | 60,888,051 |
| Specialty Retail - 1.0% | | | |
| Burlington Stores, Inc. (a) | | 256,490 | 55,778,880 |
| Ulta Beauty, Inc. (a) | | 155,660 | 41,702,871 |
| | | | 97,481,751 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 579,862,838 |
|
| CONSUMER STAPLES - 8.6% | | | |
| Beverages - 0.7% | | | |
| The Coca-Cola Co. | | 1,079,500 | 63,042,800 |
| Food & Staples Retailing - 1.5% | | | |
| U.S. Foods Holding Corp. (a) | | 581,133 | 23,344,113 |
| Walmart, Inc. | | 1,117,971 | 127,996,500 |
| | | | 151,340,613 |
| Food Products - 2.1% | | | |
| Conagra Brands, Inc. | | 755,000 | 24,854,600 |
| General Mills, Inc. | | 638,500 | 33,342,470 |
| Mondelez International, Inc. | | 1,826,752 | 104,819,030 |
| Post Holdings, Inc. (a) | | 269,332 | 28,164,047 |
| Tyson Foods, Inc. Class A | | 190,100 | 15,707,963 |
| | | | 206,888,110 |
| Household Products - 3.0% | | | |
| Colgate-Palmolive Co. | | 541,200 | 39,929,736 |
| Kimberly-Clark Corp. | | 351,600 | 50,363,184 |
| Procter & Gamble Co. | | 1,688,872 | 210,467,229 |
| | | | 300,760,149 |
| Tobacco - 1.3% | | | |
| Altria Group, Inc. | | 956,300 | 45,452,939 |
| Philip Morris International, Inc. | | 1,038,346 | 85,871,214 |
| | | | 131,324,153 |
|
| TOTAL CONSUMER STAPLES | | | 853,355,825 |
|
| ENERGY - 7.4% | | | |
| Energy Equipment & Services - 0.3% | | | |
| Baker Hughes, A GE Co. Class A | | 1,530,581 | 33,152,384 |
| Oil, Gas & Consumable Fuels - 7.1% | | | |
| BP PLC sponsored ADR | | 2,175,793 | 78,611,401 |
| Cenovus Energy, Inc. (Canada) | | 10,517,985 | 91,557,494 |
| Cheniere Energy, Inc. (a) | | 1,334,900 | 79,079,476 |
| ConocoPhillips Co. | | 2,207,406 | 131,186,139 |
| Hess Corp. | | 1,134,000 | 64,150,380 |
| Noble Energy, Inc. | | 2,251,800 | 44,518,086 |
| Suncor Energy, Inc. | | 3,714,700 | 113,540,589 |
| Valero Energy Corp. | | 1,251,800 | 105,539,258 |
| | | | 708,182,823 |
|
| TOTAL ENERGY | | | 741,335,207 |
|
| FINANCIALS - 23.1% | | | |
| Banks - 9.5% | | | |
| Bank of America Corp. | | 9,730,700 | 319,458,879 |
| BB&T Corp. | | 1,747,671 | 90,127,393 |
| Citigroup, Inc. | | 2,224,100 | 165,495,281 |
| DNB ASA | | 2,125,800 | 37,406,241 |
| First Horizon National Corp. | | 2,124,000 | 33,984,000 |
| Huntington Bancshares, Inc. | | 3,446,600 | 46,770,362 |
| KeyCorp | | 4,654,200 | 87,080,082 |
| Wells Fargo & Co. | | 3,638,800 | 170,805,272 |
| | | | 951,127,510 |
| Capital Markets - 3.7% | | | |
| BlackRock, Inc. Class A | | 152,100 | 80,209,935 |
| Cboe Global Markets, Inc. | | 641,800 | 79,082,596 |
| E*TRADE Financial Corp. | | 419,000 | 17,857,780 |
| Intercontinental Exchange, Inc. | | 605,100 | 60,352,674 |
| Morgan Stanley | | 1,974,200 | 103,171,692 |
| Virtu Financial, Inc. Class A (b) | | 1,362,458 | 22,739,424 |
| | | | 363,414,101 |
| Consumer Finance - 3.8% | | | |
| Ally Financial, Inc. | | 1,640,800 | 52,554,824 |
| Capital One Financial Corp. | | 3,009,000 | 300,298,200 |
| Synchrony Financial | | 892,800 | 28,935,648 |
| | | | 381,788,672 |
| Diversified Financial Services - 1.6% | | | |
| Berkshire Hathaway, Inc. Class B (a) | | 690,300 | 154,924,029 |
| Insurance - 4.5% | | | |
| American International Group, Inc. | | 1,787,930 | 89,861,362 |
| Hartford Financial Services Group, Inc. | | 720,300 | 42,699,384 |
| Marsh & McLennan Companies, Inc. | | 358,800 | 40,135,368 |
| MetLife, Inc. | | 1,330,951 | 66,161,574 |
| The Travelers Companies, Inc. | | 859,164 | 113,083,166 |
| Willis Group Holdings PLC | | 459,900 | 97,172,271 |
| | | | 449,113,125 |
|
| TOTAL FINANCIALS | | | 2,300,367,437 |
|
| HEALTH CARE - 11.9% | | | |
| Biotechnology - 1.3% | | | |
| Biogen, Inc. (a) | | 73,300 | 19,706,705 |
| Ironwood Pharmaceuticals, Inc. Class A (a) | | 1,877,300 | 22,677,784 |
| Regeneron Pharmaceuticals, Inc. (a) | | 123,100 | 41,600,414 |
| Vertex Pharmaceuticals, Inc. (a) | | 226,400 | 51,404,120 |
| | | | 135,389,023 |
| Health Care Equipment & Supplies - 4.7% | | | |
| Abbott Laboratories | | 678,800 | 59,150,632 |
| Becton, Dickinson & Co. | | 286,900 | 78,949,142 |
| Boston Scientific Corp. (a) | | 1,253,400 | 52,479,858 |
| Danaher Corp. | | 662,900 | 106,640,723 |
| Envista Holdings Corp. (a) | | 1,234,200 | 36,519,978 |
| Medtronic PLC | | 848,764 | 97,981,316 |
| Zimmer Biomet Holdings, Inc. | | 229,900 | 34,002,210 |
| | | | 465,723,859 |
| Health Care Providers & Services - 1.8% | | | |
| Anthem, Inc. | | 270,100 | 71,652,128 |
| CVS Health Corp. | | 817,236 | 55,424,946 |
| Humana, Inc. | | 148,100 | 49,797,144 |
| | | | 176,874,218 |
| Life Sciences Tools & Services - 0.3% | | | |
| Thermo Fisher Scientific, Inc. | | 99,600 | 31,193,724 |
| Pharmaceuticals - 3.8% | | | |
| Johnson & Johnson | | 1,645,606 | 244,981,365 |
| Pfizer, Inc. | | 3,665,136 | 136,489,665 |
| | | | 381,471,030 |
|
| TOTAL HEALTH CARE | | | 1,190,651,854 |
|
| INDUSTRIALS - 9.8% | | | |
| Aerospace & Defense - 1.1% | | | |
| General Dynamics Corp. | | 167,300 | 29,351,112 |
| United Technologies Corp. | | 511,253 | 76,790,201 |
| | | | 106,141,313 |
| Air Freight & Logistics - 0.6% | | | |
| FedEx Corp. | | 437,221 | 63,239,645 |
| Airlines - 0.6% | | | |
| American Airlines Group, Inc. | | 2,309,415 | 61,984,699 |
| Construction & Engineering - 1.1% | | | |
| AECOM (a) | | 2,209,420 | 106,560,327 |
| Electrical Equipment - 0.5% | | | |
| Sensata Technologies, Inc. PLC (a) | | 975,598 | 46,116,517 |
| Industrial Conglomerates - 2.2% | | | |
| General Electric Co. | | 17,436,445 | 217,083,740 |
| Machinery - 0.1% | | | |
| Caterpillar, Inc. | | 70,500 | 9,260,175 |
| Marine - 0.3% | | | |
| A.P. Moller - Maersk A/S Series B | | 28,958 | 34,626,934 |
| Professional Services - 1.1% | | | |
| Nielsen Holdings PLC | | 5,588,178 | 113,998,831 |
| Road & Rail - 1.3% | | | |
| Norfolk Southern Corp. | | 598,044 | 124,518,741 |
| Trading Companies & Distributors - 0.9% | | | |
| HD Supply Holdings, Inc. (a) | | 2,248,249 | 91,593,664 |
|
| TOTAL INDUSTRIALS | | | 975,124,586 |
|
| INFORMATION TECHNOLOGY - 6.4% | | | |
| Communications Equipment - 0.6% | | | |
| CommScope Holding Co., Inc. (a) | | 2,363,000 | 28,793,155 |
| F5 Networks, Inc. (a) | | 224,900 | 27,464,788 |
| | | | 56,257,943 |
| Electronic Equipment & Components - 0.2% | | | |
| SYNNEX Corp. | | 143,200 | 19,727,232 |
| IT Services - 3.0% | | | |
| Amdocs Ltd. | | 660,569 | 47,527,940 |
| Capgemini SA | | 447,200 | 55,721,911 |
| Cognizant Technology Solutions Corp. Class A | | 860,100 | 52,792,938 |
| IBM Corp. | | 762,600 | 109,608,498 |
| Sabre Corp. | | 1,687,900 | 36,357,366 |
| | | | 302,008,653 |
| Semiconductors & Semiconductor Equipment - 1.2% | | | |
| Intel Corp. | | 1,818,000 | 116,224,740 |
| Software - 1.4% | | | |
| Nortonlifelock, Inc. | | 2,405,200 | 68,355,784 |
| SS&C Technologies Holdings, Inc. | | 1,200,100 | 75,618,301 |
| | | | 143,974,085 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 638,192,653 |
|
| MATERIALS - 3.8% | | | |
| Chemicals - 3.0% | | | |
| DuPont de Nemours, Inc. | | 1,668,223 | 85,379,653 |
| Nutrien Ltd. | | 813,300 | 34,716,123 |
| Olin Corp. | | 5,417,500 | 80,558,225 |
| The Chemours Co. LLC | | 2,664,800 | 36,960,776 |
| The Mosaic Co. | | 1,818,140 | 36,071,898 |
| Westlake Chemical Corp. | | 358,310 | 21,928,572 |
| | | | 295,615,247 |
| Containers & Packaging - 0.8% | | | |
| Crown Holdings, Inc. (a) | | 1,103,800 | 81,714,314 |
|
| TOTAL MATERIALS | | | 377,329,561 |
|
| REAL ESTATE - 5.2% | | | |
| Equity Real Estate Investment Trusts (REITs) - 4.9% | | | |
| Alexandria Real Estate Equities, Inc. | | 330,700 | 53,970,240 |
| American Homes 4 Rent Class A | | 1,452,200 | 39,688,626 |
| American Tower Corp. | | 226,384 | 52,462,228 |
| Corporate Office Properties Trust (SBI) | | 983,477 | 29,278,110 |
| Digital Realty Trust, Inc. | | 579,300 | 71,248,107 |
| Prologis, Inc. | | 1,154,263 | 107,207,947 |
| Store Capital Corp. | | 700,655 | 27,500,709 |
| Welltower, Inc. | | 871,400 | 73,990,574 |
| Weyerhaeuser Co. | | 1,187,400 | 34,375,230 |
| | | | 489,721,771 |
| Real Estate Management & Development - 0.3% | | | |
| Cushman & Wakefield PLC (a) | | 1,730,630 | 33,262,709 |
|
| TOTAL REAL ESTATE | | | 522,984,480 |
|
| UTILITIES - 6.9% | | | |
| Electric Utilities - 3.7% | | | |
| Edison International | | 1,283,500 | 98,251,925 |
| Entergy Corp. | | 658,800 | 86,645,376 |
| Exelon Corp. | | 2,028,400 | 96,531,556 |
| NextEra Energy, Inc. | | 315,267 | 84,554,609 |
| | | | 365,983,466 |
| Independent Power and Renewable Electricity Producers - 1.2% | | | |
| The AES Corp. | | 3,003,500 | 59,649,510 |
| Vistra Energy Corp. | | 2,844,000 | 64,046,880 |
| | | | 123,696,390 |
| Multi-Utilities - 2.0% | | | |
| Dominion Energy, Inc. | | 1,140,500 | 97,797,875 |
| Sempra Energy | | 599,099 | 96,239,263 |
| | | | 194,037,138 |
|
| TOTAL UTILITIES | | | 683,716,994 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $8,255,429,829) | | | 9,645,282,743 |
| | | Principal Amount | Value |
|
| U.S. Treasury Obligations - 0.1% | | | |
| U.S. Treasury Bills, yield at date of purchase 1.56% to 1.57% 2/27/20 (c) | | | |
| (Cost $4,654,734) | | 4,660,000 | 4,655,431 |
| | | Shares | Value |
|
| Money Market Funds - 3.4% | | | |
| Fidelity Cash Central Fund 1.58% (d) | | 330,728,567 | $330,794,713 |
| Fidelity Securities Lending Cash Central Fund 1.59% (d)(e) | | 11,322,818 | 11,323,950 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $342,117,802) | | | 342,118,663 |
| TOTAL INVESTMENT IN SECURITIES - 100.2% | | | |
| (Cost $8,602,202,365) | | | 9,992,056,837 |
| NET OTHER ASSETS (LIABILITIES) - (0.2)% | | | (18,409,241) |
| NET ASSETS - 100% | | | $9,973,647,596 |
| Futures Contracts | | | | | |
| | Number of contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/(Depreciation) |
| Purchased | | | | | |
| Equity Index Contracts | | | | | |
| CME E-mini Russell 1000 Value Index Contracts (United States) | 1,628 | March 2020 | $107,016,580 | $(1,012,358) | $(1,012,358) |
The notional amount of futures purchased as a percentage of Net Assets is 1.1%
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $3,948,125.
(d) Affiliated fund that is generally 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $7,277,537 |
| Fidelity Securities Lending Cash Central Fund | 199,115 |
| Total | $7,476,652 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations, if applicable. Amount for Fidelity Securities Lending Cash Central Fund 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.
Investment Valuation
The following is a summary of the inputs used, as of January 31, 2020, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Communication Services | $782,361,308 | $782,361,308 | $-- | $-- |
| Consumer Discretionary | 579,862,838 | 579,862,838 | -- | -- |
| Consumer Staples | 853,355,825 | 853,355,825 | -- | -- |
| Energy | 741,335,207 | 741,335,207 | -- | -- |
| Financials | 2,300,367,437 | 2,300,367,437 | -- | -- |
| Health Care | 1,190,651,854 | 1,190,651,854 | -- | -- |
| Industrials | 975,124,586 | 940,497,652 | 34,626,934 | -- |
| Information Technology | 638,192,653 | 638,192,653 | -- | -- |
| Materials | 377,329,561 | 377,329,561 | -- | -- |
| Real Estate | 522,984,480 | 522,984,480 | -- | -- |
| Utilities | 683,716,994 | 683,716,994 | -- | -- |
| U.S. Government and Government Agency Obligations | 4,655,431 | -- | 4,655,431 | -- |
| Money Market Funds | 342,118,663 | 342,118,663 | -- | -- |
| Total Investments in Securities: | $9,992,056,837 | $9,952,774,472 | $39,282,365 | $-- |
| Derivative Instruments: | | | | |
| Liabilities | | | | |
| Futures Contracts | $(1,012,358) | $(1,012,358) | $-- | $-- |
| Total Liabilities | $(1,012,358) | $(1,012,358) | $-- | $-- |
| Total Derivative Instruments: | $(1,012,358) | $(1,012,358) | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of January 31, 2020. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.
| Primary Risk Exposure / Derivative Type | Value |
| | Asset | Liability |
| Equity Risk | | |
| Futures Contracts(a) | $0 | $(1,012,358) |
| Total Equity Risk | 0 | (1,012,358) |
| Total Value of Derivatives | $0 | $(1,012,388) |
(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Schedule of Investments. In the Statement of Assets and Liabilities, the period end daily variation margin is included in receivable or payable for daily variation margin on futures contracts, and the net cumulative appreciation (depreciation) is included in Total accumulated earnings (loss).
See accompanying notes which are an integral part of the financial statements.
Fidelity® Series Stock Selector Large Cap Value Fund
Financial Statements
Statement of Assets and Liabilities
| | | January 31, 2020 |
| Assets | | |
Investment in securities, at value (including securities loaned of $11,454,347) — See accompanying schedule:
Unaffiliated issuers (cost $8,260,084,563) | $9,649,938,174 | |
| Fidelity Central Funds (cost $342,117,802) | 342,118,663 | |
| Total Investment in Securities (cost $8,602,202,365) | | $9,992,056,837 |
| Receivable for investments sold | | 65,233,980 |
| Receivable for fund shares sold | | 17,541,253 |
| Dividends receivable | | 10,969,663 |
| Distributions receivable from Fidelity Central Funds | | 400,994 |
| Other receivables | | 12,975 |
| Total assets | | 10,086,215,702 |
| Liabilities | | |
| Payable to custodian bank | $1,633,918 | |
| Payable for investments purchased | 66,044,181 | |
| Payable for fund shares redeemed | 2,034,313 | |
| Payable for daily variation margin on futures contracts | 1,921,040 | |
| Deferred dividend income | 29,578,800 | |
| Other payables and accrued expenses | 31,904 | |
| Collateral on securities loaned | 11,323,950 | |
| Total liabilities | | 112,568,106 |
| Net Assets | | $9,973,647,596 |
| Net Assets consist of: | | |
| Paid in capital | | $8,446,931,633 |
| Total accumulated earnings (loss) | | 1,526,715,963 |
| Net Assets | | $9,973,647,596 |
| Net Asset Value, offering price and redemption price per share ($9,973,647,596 ÷ 800,335,199 shares) | | $12.46 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended January 31, 2020 |
| Investment Income | | |
| Dividends | | $234,261,011 |
| Interest | | 82,866 |
| Income from Fidelity Central Funds (including $199,115 from security lending) | | 7,476,652 |
| Total income | | 241,820,529 |
| Expenses | | |
| Custodian fees and expenses | $85,222 | |
| Independent trustees' fees and expenses | 57,038 | |
| Interest | 14,364 | |
| Commitment fees | 26,599 | |
| Total expenses | | 183,223 |
| Net investment income (loss) | | 241,637,306 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 429,974,271 | |
| Fidelity Central Funds | 39,307 | |
| Foreign currency transactions | 46,434 | |
| Futures contracts | 6,963,365 | |
| Total net realized gain (loss) | | 437,023,377 |
| Change in net unrealized appreciation (depreciation) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 721,085,000 | |
| Fidelity Central Funds | (39,301) | |
| Assets and liabilities in foreign currencies | (1,326) | |
| Futures contracts | (2,139,942) | |
| Total change in net unrealized appreciation (depreciation) | | 718,904,431 |
| Net gain (loss) | | 1,155,927,808 |
| Net increase (decrease) in net assets resulting from operations | | $1,397,565,114 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $241,637,306 | $237,322,270 |
| Net realized gain (loss) | 437,023,377 | 662,883,907 |
| Change in net unrealized appreciation (depreciation) | 718,90,431 | (1,478,711,475) |
| Net increase (decrease) in net assets resulting from operations | 1,397,565,114 | (578,505,298) |
| Distributions to shareholders | (570,671,464) | (975,442,209) |
| Share transactions | | |
| Proceeds from sales of shares | 1,185,143,827 | 704,125,905 |
| Net asset value of shares issued in exchange for the net assets of Fidelity Advisor Series Stock Selector Large Cap Value Fund (note 11) | – | 1,142,737,823 |
| Reinvestment of distributions | 570,671,463 | 975,442,209 |
| Cost of shares redeemed | (3,140,079,084) | (1,223,137,140) |
| Net increase (decrease) in net assets resulting from share transactions | (1,384,263,794) | 1,599,168,797 |
| Total increase (decrease) in net assets | (557,370,144) | 45,221,290 |
| Net Assets | | |
| Beginning of period | 10,531,017,740 | 10,485,796,450 |
| End of period | $9,973,647,596 | $10,531,017,740 |
| Other Information | | |
| Shares | | |
| Sold | 96,419,816 | 56,636,973 |
| Issued in exchange for the shares of Fidelity Advisor Series Stock Selector Large Cap Value Fund (note 11) | – | 86,505,464 |
| Issued in reinvestment of distributions | 46,089,849 | 86,317,969 |
| Redeemed | (252,732,221) | (97,345,371) |
| Net increase (decrease) | (110,222,556) | 132,115,035 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Series Stock Selector Large Cap Value Fund
| | | | | | |
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $11.57 | $13.47 | $12.49 | $10.38 | $12.67 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .28 | .29 | .28B | .17 | .18 |
| Net realized and unrealized gain (loss) | 1.33 | (1.01) | 1.63 | 2.25 | (.96) |
| Total from investment operations | 1.61 | (.72) | 1.91 | 2.42 | (.78) |
| Distributions from net investment income | (.31) | (.27) | (.28) | (.16) | (.20)C |
| Distributions from net realized gain | (.41) | (.90) | (.65) | (.14) | (1.31)C |
| Total distributions | (.72) | (1.18)D | (.93) | (.31)E | (1.51) |
| Net asset value, end of period | $12.46 | $11.57 | $13.47 | $12.49 | $10.38 |
| Total ReturnF | 13.98% | (5.07)% | 15.62% | 23.49% | (6.69)% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | - %I | - %I | .20% | .67% | .73% |
| Expenses net of fee waivers, if any | - %I | - %I | .20% | .67% | .73% |
| Expenses net of all reductions | - %I | - %I | .20% | .66% | .72% |
| Net investment income (loss) | 2.32% | 2.33% | 2.13%B | 1.51% | 1.43% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $9,973,648 | $10,531,018 | $10,485,796 | $3,615,123 | $2,860,230 |
| Portfolio turnover rateJ | 65%K | 87%L | 61% | 54% | 64% |
A Calculated based on average shares outstanding during the period.
B Net 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 1.87%.
C The amounts shown reflect certain reclassifications related to book to tax differences that were made in the year shown.
D Total distributions of $1.18 per share is comprised of distributions from net investment income of $.274 and distributions from net realized gain of $.902 per share.
E Total distributions of $.31 per share is comprised of distributions from net investment income of $.162 and distributions from net realized gain of $.144 per share.
F Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
G 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.
H Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
I Amount represents less than .005%.
J Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
K Portfolio turnover rate excludes securities received or delivered in-kind.
L The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Fidelity® Series Value Discovery Fund
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended January 31, 2020 | Past 1 year | Past 5 years | Life of fundA |
| Fidelity® Series Value Discovery Fund | 10.95% | 7.54% | 9.79% |
A From December 6, 2012
$10,000 Over Life of Fund
Let's say hypothetically that $10,000 was invested in Fidelity® Series Value Discovery Fund on December 6, 2012, when the fund started.
The chart shows how the value of your investment would have changed, and also shows how the Russell 3000® Value Index performed over the same period.
| Period Ending Values |
| $19,508 | Fidelity® Series Value Discovery Fund |
| $22,053 | Russell 3000® Value Index |
Fidelity® Series Value Discovery Fund
Management's Discussion of Fund Performance
Market Recap: U.S. stocks rolled for the 12 months ending January 31, 2020, with the S&P 500
® index gaining 21.68%, despite persistent, nagging concerns about global economic growth and trade. After a rough end to 2018, equities sharply reversed course to begin 2019 amid upbeat company earnings and signs the Federal Reserve may pause on rates. The uptrend extended until May, when the index sunk as trade talks between the U.S. and China broke down. The bull market roared back to record a series of highs in July, when the Fed cut interest rates for the first time since 2008. Volatility intensified in August, as the Treasury yield curve inverted, which some investors viewed as a sign the U.S. economy could be heading for recession. But the market proved resilient, hitting a new high on October 30, when the Fed lowered rates for the third time in 2019, and moving higher through December 31. The new year began with a flattish January, with growing anxiety related to the new coronavirus outbreak and its impact on the global economy. By sector, information technology (+46%) led the way, driven by strong growth trends. The defensive utilities sector (+30%) also stood out, while communication services and consumer staples were about in line with the broader market. Conversely, energy (-11%) was by far the weakest – struggling due to sluggish oil prices – followed by several strong gainers that still lagged: materials (+11%), health care (+12%), industrials (+16%), consumer discretionary (+17%), and financials and real estate (+18% each).
Comments from Portfolio Manager Sean Gavin: For the fiscal year, the fund gained 10.95%, lagging the 14.14% increase in the benchmark Russell 3000
® Value Index. Subpar security selection drove the fund's relative underperformance, especially in the financials, communication services and information technology sectors. In contrast, picks among consumer staples and materials stocks added value versus the benchmark. Individually, some of our biggest detractors were several stocks devoted to liquefied natural gas (LNG) transportation, particularly GasLog Partners (-50%) and Golar LNG Partners (-41%), due partly to deteriorating demand for LNG. We reduced the fund's allocation to both of these out-of-benchmark investments and were continuing to monitor our positions at period end. An overweight holding in media company Lions Gate Entertainment (-47%) detracted from the portfolio's relative return, as did semiconductor manufacturer Intel (+39%), a strong-performing benchmark component we declined to own in favor of other stocks we believed offered a superior risk/reward trade-off. Not owning financial giant JPMorgan Chase (+32%), another benchmark component, also detracted. On the positive side, shares of chocolate manufacturer Hershey (+37%) gained in response to the company's favorable sales growth and competitive position, among other qualities. I sold the stock in October 2019 in exchange for others offering better upside potential, in my opinion. In health care, a top-contributing stock was Centene (+20%), an overweighting and service provider to government-sponsored health care programs. The company, along with many other health care stocks, gained ground as investors' concern about radical future changes to federal health care policy diminished. Another relative contributor was our position in gas and electric provider Southern Company (+37%), which benefited along with broader strength in the utilities sector.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Fidelity® Series Value Discovery Fund
Investment Summary (Unaudited)
Top Ten Stocks as of January 31, 2020
| | % of fund's net assets |
| Berkshire Hathaway, Inc. Class B | 3.4 |
| Wells Fargo & Co. | 3.3 |
| Comcast Corp. Class A | 3.2 |
| U.S. Bancorp | 2.5 |
| PNC Financial Services Group, Inc. | 2.4 |
| Cigna Corp. | 2.1 |
| Chevron Corp. | 2.1 |
| Verizon Communications, Inc. | 2.1 |
| Amgen, Inc. | 2.1 |
| Exelon Corp. | 2.1 |
| | 25.3 |
Top Five Market Sectors as of January 31, 2020
| | % of fund's net assets |
| Financials | 24.9 |
| Health Care | 17.6 |
| Communication Services | 10.4 |
| Consumer Staples | 8.4 |
| Energy | 7.9 |
Asset Allocation (% of fund's net assets)
| As of January 31, 2020* |
| | Stocks | 95.9% |
| | Other Investments | 0.2% |
| | Short-Term Investments and Net Other Assets (Liabilities) | 3.9% |
* Foreign investments - 16.0%
Fidelity® Series Value Discovery Fund
Schedule of Investments January 31, 2020
Showing Percentage of Net Assets
| Common Stocks - 95.3% | | | |
| | | Shares | Value |
| COMMUNICATION SERVICES - 10.4% | | | |
| Diversified Telecommunication Services - 2.1% | | | |
| Verizon Communications, Inc. | | 2,681,541 | $159,390,797 |
| Entertainment - 2.0% | | | |
| Activision Blizzard, Inc. | | 1,203,711 | 70,393,019 |
| Electronic Arts, Inc. (a) | | 549,358 | 59,286,715 |
| Lions Gate Entertainment Corp. Class B (a) | | 2,179,506 | 20,334,791 |
| | | | 150,014,525 |
| Interactive Media & Services - 0.7% | | | |
| Alphabet, Inc. Class A (a) | | 38,791 | 55,578,969 |
| Media - 4.8% | | | |
| Comcast Corp. Class A | | 5,613,604 | 242,451,557 |
| Fox Corp. Class A | | 956,210 | 35,456,267 |
| Interpublic Group of Companies, Inc. | | 3,569,414 | 81,025,698 |
| | | | 358,933,522 |
| Wireless Telecommunication Services - 0.8% | | | |
| T-Mobile U.S., Inc. (a) | | 774,853 | 61,360,609 |
|
| TOTAL COMMUNICATION SERVICES | | | 785,278,422 |
|
| CONSUMER DISCRETIONARY - 5.3% | | | |
| Auto Components - 0.5% | | | |
| Lear Corp. | | 331,413 | 40,823,453 |
| Internet & Direct Marketing Retail - 0.6% | | | |
| eBay, Inc. | | 1,350,047 | 45,307,577 |
| Multiline Retail - 1.5% | | | |
| Dollar General Corp. | | 717,739 | 110,108,340 |
| Specialty Retail - 1.3% | | | |
| Best Buy Co., Inc. | | 522,800 | 44,275,932 |
| Lowe's Companies, Inc. | | 479,900 | 55,783,576 |
| | | | 100,059,508 |
| Textiles, Apparel & Luxury Goods - 1.4% | | | |
| PVH Corp. | | 744,785 | 64,922,908 |
| Tapestry, Inc. | | 1,642,855 | 42,336,373 |
| | | | 107,259,281 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 403,558,159 |
|
| CONSUMER STAPLES - 8.4% | | | |
| Beverages - 1.1% | | | |
| C&C Group PLC (United Kingdom) | | 482,454 | 2,280,748 |
| PepsiCo, Inc. | | 584,580 | 83,022,052 |
| | | | 85,302,800 |
| Food & Staples Retailing - 4.0% | | | |
| Kroger Co. | | 1,737,800 | 46,677,308 |
| Sysco Corp. | | 1,166,224 | 95,793,639 |
| U.S. Foods Holding Corp. (a) | | 1,005,630 | 40,396,157 |
| Walmart, Inc. | | 1,028,843 | 117,792,235 |
| | | | 300,659,339 |
| Food Products - 1.1% | | | |
| Danone SA | | 927,948 | 74,258,549 |
| Seaboard Corp. | | 1,319 | 5,085,550 |
| | | | 79,344,099 |
| Personal Products - 0.6% | | | |
| Unilever NV (NY Reg.) | | 825,348 | 48,101,281 |
| Tobacco - 1.6% | | | |
| Altria Group, Inc. | | 2,480,900 | 117,917,177 |
|
| TOTAL CONSUMER STAPLES | | | 631,324,696 |
|
| ENERGY - 7.7% | | | |
| Oil, Gas & Consumable Fuels - 7.7% | | | |
| BP PLC sponsored ADR | | 1,681,300 | 60,745,369 |
| Cabot Oil & Gas Corp. | | 3,569,600 | 50,295,664 |
| Chevron Corp. | | 1,490,676 | 159,711,027 |
| Dynagas LNG Partners LP | | 783,700 | 1,586,993 |
| Exxon Mobil Corp. | | 685,665 | 42,593,510 |
| GasLog Partners LP | | 2,360,773 | 24,174,316 |
| Golar LNG Ltd. | | 1,155,233 | 11,113,341 |
| Golar LNG Partners LP (b) | | 4,181,145 | 28,557,220 |
| Hoegh LNG Partners LP | | 1,274,854 | 19,212,050 |
| Parex Resources, Inc. (a) | | 2,191,900 | 34,698,734 |
| Suncor Energy, Inc. | | 1,978,900 | 60,534,551 |
| Teekay LNG Partners LP | | 2,561,496 | 32,915,224 |
| Total SA sponsored ADR | | 1,175,000 | 57,093,250 |
| | | | 583,231,249 |
| FINANCIALS - 24.9% | | | |
| Banks - 11.3% | | | |
| BB&T Corp. | | 2,100,300 | 108,312,471 |
| Huntington Bancshares, Inc. | | 3,284,988 | 44,577,287 |
| M&T Bank Corp. | | 515,844 | 86,930,031 |
| PNC Financial Services Group, Inc. | | 1,211,815 | 180,015,118 |
| U.S. Bancorp | | 3,510,553 | 186,831,631 |
| Wells Fargo & Co. | | 5,249,022 | 246,389,093 |
| | | | 853,055,631 |
| Capital Markets - 2.5% | | | |
| Affiliated Managers Group, Inc. | | 467,631 | 37,340,335 |
| Goldman Sachs Group, Inc. | | 261,649 | 62,207,050 |
| Invesco Ltd. | | 1,348,324 | 23,326,005 |
| State Street Corp. | | 869,739 | 65,778,361 |
| | | | 188,651,751 |
| Consumer Finance - 2.1% | | | |
| Capital One Financial Corp. | | 710,174 | 70,875,365 |
| Discover Financial Services | | 1,122,734 | 84,351,005 |
| | | | 155,226,370 |
| Diversified Financial Services - 3.4% | | | |
| Berkshire Hathaway, Inc. Class B (a) | | 1,134,666 | 254,653,092 |
| Insurance - 3.8% | | | |
| Allstate Corp. | | 471,903 | 55,939,382 |
| Chubb Ltd. | | 590,139 | 89,695,227 |
| FNF Group | | 1,047,217 | 51,051,829 |
| The Travelers Companies, Inc. | | 701,770 | 92,366,967 |
| | | | 289,053,405 |
| Mortgage Real Estate Investment Trusts - 1.8% | | | |
| AGNC Investment Corp. | | 3,367,813 | 62,607,644 |
| MFA Financial, Inc. | | 9,884,990 | 77,102,922 |
| | | | 139,710,566 |
|
| TOTAL FINANCIALS | | | 1,880,350,815 |
|
| HEALTH CARE - 17.6% | | | |
| Biotechnology - 2.8% | | | |
| AbbVie, Inc. | | 642,489 | 52,054,459 |
| Amgen, Inc. | | 725,598 | 156,765,448 |
| | | | 208,819,907 |
| Health Care Providers & Services - 8.8% | | | |
| Anthem, Inc. | | 310,026 | 82,243,697 |
| Centene Corp. (a) | | 2,296,003 | 144,211,948 |
| Cigna Corp. | | 830,207 | 159,715,223 |
| CVS Health Corp. | | 1,166,534 | 79,114,336 |
| Humana, Inc. | | 160,422 | 53,940,293 |
| UnitedHealth Group, Inc. | | 529,144 | 144,165,283 |
| | | | 663,390,780 |
| Pharmaceuticals - 6.0% | | | |
| Allergan PLC | | 627,094 | 117,040,824 |
| Bristol-Myers Squibb Co. | | 2,420,248 | 152,354,612 |
| Bristol-Myers Squibb Co. rights (a) | | 1,566,696 | 5,452,102 |
| Roche Holding AG (participation certificate) | | 315,969 | 105,997,684 |
| Sanofi SA sponsored ADR | | 1,515,278 | 73,142,469 |
| | | | 453,987,691 |
|
| TOTAL HEALTH CARE | | | 1,326,198,378 |
|
| INDUSTRIALS - 6.2% | | | |
| Aerospace & Defense - 1.4% | | | |
| General Dynamics Corp. | | 582,317 | 102,161,694 |
| Air Freight & Logistics - 0.5% | | | |
| Expeditors International of Washington, Inc. | | 534,100 | 39,010,664 |
| Airlines - 0.5% | | | |
| Alaska Air Group, Inc. | | 606,100 | 39,147,999 |
| Building Products - 0.5% | | | |
| Owens Corning | | 645,600 | 39,052,344 |
| Electrical Equipment - 1.1% | | | |
| Acuity Brands, Inc. | | 328,700 | 38,743,869 |
| Vestas Wind Systems A/S | | 466,468 | 46,305,118 |
| | | | 85,048,987 |
| Machinery - 1.5% | | | |
| Ingersoll-Rand PLC | | 564,271 | 75,177,825 |
| Oshkosh Corp. | | 445,700 | 38,348,028 |
| | | | 113,525,853 |
| Trading Companies & Distributors - 0.7% | | | |
| HD Supply Holdings, Inc. (a) | | 1,274,729 | 51,932,459 |
|
| TOTAL INDUSTRIALS | | | 469,880,000 |
|
| INFORMATION TECHNOLOGY - 5.2% | | | |
| Communications Equipment - 1.3% | | | |
| Cisco Systems, Inc. | | 2,046,675 | 94,085,650 |
| Electronic Equipment & Components - 1.3% | | | |
| Arrow Electronics, Inc. (a) | | 88,089 | 6,689,479 |
| TE Connectivity Ltd. | | 1,006,638 | 92,791,891 |
| | | | 99,481,370 |
| IT Services - 1.9% | | | |
| Amdocs Ltd. | | 1,044,538 | 75,154,509 |
| Cognizant Technology Solutions Corp. Class A | | 1,160,079 | 71,205,649 |
| | | | 146,360,158 |
| Software - 0.7% | | | |
| Nortonlifelock, Inc. | | 1,869,728 | 53,137,670 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 393,064,848 |
|
| MATERIALS - 2.3% | | | |
| Containers & Packaging - 0.8% | | | |
| Graphic Packaging Holding Co. | | 4,112,422 | 64,277,156 |
| Metals & Mining - 1.5% | | | |
| Newmont Corp. | | 2,494,329 | 112,394,465 |
|
| TOTAL MATERIALS | | | 176,671,621 |
|
| REAL ESTATE - 2.3% | | | |
| Equity Real Estate Investment Trusts (REITs) - 0.7% | | | |
| Simon Property Group, Inc. | | 423,394 | 56,374,911 |
| Real Estate Management & Development - 1.6% | | | |
| CBRE Group, Inc. (a) | | 1,937,372 | 118,276,561 |
|
| TOTAL REAL ESTATE | | | 174,651,472 |
|
| UTILITIES - 5.0% | | | |
| Electric Utilities - 5.0% | | | |
| Exelon Corp. | | 3,288,806 | 156,514,278 |
| OGE Energy Corp. | | 1,496,733 | 68,625,208 |
| Southern Co. | | 2,168,576 | 152,667,750 |
| | | | 377,807,236 |
| TOTAL COMMON STOCKS | | | |
| (Cost $6,604,337,557) | | | 7,202,016,896 |
|
| Nonconvertible Preferred Stocks - 0.6% | | | |
| ENERGY - 0.0% | | | |
| Oil, Gas & Consumable Fuels - 0.0% | | | |
| Dynagas LNG Partners LP 9.00% | | 82,472 | 1,933,968 |
| INFORMATION TECHNOLOGY - 0.6% | | | |
| Technology Hardware, Storage & Peripherals - 0.6% | | | |
| Samsung Electronics Co. Ltd. | | 1,173,020 | 45,694,966 |
| TOTAL NONCONVERTIBLE PREFERRED STOCKS | | | |
| (Cost $48,588,789) | | | 47,628,934 |
|
| Other - 0.2% | | | |
| Energy - 0.2% | | | |
| Oil, Gas & Consumable Fuels - 0.2% | | | |
| Utica Shale Drilling Program (non-operating revenue interest) (c)(d)(e) | | | |
| | | | |
| (Cost $39,369,027) | | 39,369,027 | 17,432,605 |
|
| Money Market Funds - 1.6% | | | |
| Fidelity Cash Central Fund 1.58% (f) | | | |
| (Cost $118,054,128) | | 118,030,522 | 118,054,128 |
| TOTAL INVESTMENT IN SECURITIES - 97.7% | | | |
| (Cost $6,810,349,501) | | | 7,385,132,563 |
| NET OTHER ASSETS (LIABILITIES) - 2.3% | | | 171,858,281 |
| NET ASSETS - 100% | | | $7,556,990,844 |
Legend
(a) Non-income producing
(b) Affiliated company
(c) Investment is owned by a wholly-owned subsidiary (Subsidiary) that is treated as a corporation for U.S. tax purposes.
(d) 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 $17,432,605 or 0.2% of net assets.
(e) Level 3 security
(f) Affiliated fund that is generally 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
Additional information on each restricted holding is as follows:
| Security | Acquisition Date | Acquisition Cost |
| Utica Shale Drilling Program (non-operating revenue interest) | 10/5/16 - 10/30/18 | $39,369,027 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $5,520,000 |
| Fidelity Securities Lending Cash Central Fund | 73,367 |
| Total | $5,593,367 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations, if applicable. Amount for Fidelity Securities Lending Cash Central Fund 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.
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 | Value, beginning of period | Purchases(a) | Sales Proceeds | Dividend Income | Realized Gain (loss) | Change in Unrealized appreciation (depreciation) | Value, end of period |
| GasLog Partners LP | $56,470,872 | $3,060,935 | $4,573,136 | $5,460,982 | $(2,121,812) | $(28,662,543) | $-- |
| Golar LNG Partners LP | 54,402,660 | 1,593,618 | 298,439 | 6,584,314 | (697,832) | (26,442,787) | 28,557,220 |
| Hoegh LNG Partners LP | 21,914,240 | 1,351,558 | 859,118 | 2,214,612 | (239,646) | (2,954,984) | -- |
| Total | $132,787,772 | $6,006,111 | $5,730,693 | $14,259,908 | $(3,059,290) | $(58,060,314) | $28,557,220 |
(a) Includes the value of securities received through in-kind transactions, if applicable.
Investment Valuation
The following is a summary of the inputs used, as of January 31, 2020, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Communication Services | $785,278,422 | $785,278,422 | $-- | $-- |
| Consumer Discretionary | 403,558,159 | 403,558,159 | -- | -- |
| Consumer Staples | 631,324,696 | 557,066,147 | 74,258,549 | -- |
| Energy | 585,165,217 | 585,165,217 | -- | -- |
| Financials | 1,880,350,815 | 1,880,350,815 | -- | -- |
| Health Care | 1,326,198,378 | 1,220,200,694 | 105,997,684 | -- |
| Industrials | 469,880,000 | 423,574,882 | 46,305,118 | -- |
| Information Technology | 438,759,814 | 393,064,848 | 45,694,966 | -- |
| Materials | 176,671,621 | 176,671,621 | -- | -- |
| Real Estate | 174,651,472 | 174,651,472 | -- | -- |
| Utilities | 377,807,236 | 377,807,236 | -- | -- |
| Other | 17,432,605 | -- | -- | 17,432,605 |
| Money Market Funds | 118,054,128 | 118,054,128 | -- | -- |
| Total Investments in Securities: | $7,385,132,563 | $7,095,443,641 | $272,256,317 | $17,432,605 |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 84.0% |
| Switzerland | 3.8% |
| France | 2.8% |
| Ireland | 2.5% |
| Canada | 1.6% |
| Marshall Islands | 1.3% |
| Bailiwick of Guernsey | 1.0% |
| Others (Individually Less Than 1%) | 3.0% |
| | 100.0% |
See accompanying notes which are an integral part of the financial statements.
Fidelity® Series Value Discovery Fund
Financial Statements
Statement of Assets and Liabilities
| | | January 31, 2020 |
| Assets | | |
Investment in securities, at value — See accompanying schedule:
Unaffiliated issuers (cost $6,608,504,686) | $7,238,521,215 | |
| Fidelity Central Funds (cost $118,054,128) | 118,054,128 | |
| Other affiliated issuers (cost $83,790,687) | 28,557,220 | |
| Total Investment in Securities (cost $6,810,349,501) | | $7,385,132,563 |
| Restricted cash | | 2,281,364 |
| Receivable for investments sold | | 5,371,020 |
| Receivable for fund shares sold | | 183,619,247 |
| Dividends receivable | | 9,388,765 |
| Distributions receivable from Fidelity Central Funds | | 73,931 |
| Other receivables | | 62,599 |
| Total assets | | 7,585,929,489 |
| Liabilities | | |
| Payable for investments purchased | $6,330,760 | |
| Payable for fund shares redeemed | 130,146 | |
| Deferred dividend income | 22,436,736 | |
| Other payables and accrued expenses | 41,003 | |
| Total liabilities | | 28,938,645 |
| Net Assets | | $7,556,990,844 |
| Net Assets consist of: | | |
| Paid in capital | | $6,921,948,629 |
| Total accumulated earnings (loss) | | 635,042,215 |
| Net Assets | | $7,556,990,844 |
| Net Asset Value, offering price and redemption price per share ($7,556,990,844 ÷ 580,788,679 shares) | | $13.01 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended January 31, 2020 |
| Investment Income | | |
| Dividends (including $14,259,908 earned from other affiliated issuers) | | $188,124,173 |
| Income from Fidelity Central Funds (including $73,367 from security lending) | | 5,593,367 |
| Total income | | 193,717,540 |
| Expenses | | |
| Custodian fees and expenses | $111,605 | |
| Independent trustees' fees and expenses | 42,500 | |
| Interest | 8,580 | |
| Commitment fees | 19,808 | |
| Total expenses before reductions | 182,493 | |
| Expense reductions | (3,650) | |
| Total expenses after reductions | | 178,843 |
| Net investment income (loss) | | 193,538,697 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers (net of foreign taxes of $67) | 202,039,086 | |
| Fidelity Central Funds | 2,127 | |
| Other affiliated issuers | (3,059,290) | |
| Foreign currency transactions | (50,792) | |
| Futures contracts | 4,534,684 | |
| Total net realized gain (loss) | | 203,465,815 |
| Change in net unrealized appreciation (depreciation) on: | | |
| Investment securities: | | |
| Unaffiliated issuers (net of decrease in deferred foreign taxes of $67) | 483,629,933 | |
| Fidelity Central Funds | (3,144) | |
| Other affiliated issuers | (58,060,314) | |
| Assets and liabilities in foreign currencies | 13,721 | |
| Futures contracts | (5,097,763) | |
| Total change in net unrealized appreciation (depreciation) | | 420,482,433 |
| Net gain (loss) | | 623,948,248 |
| Net increase (decrease) in net assets resulting from operations | | $817,486,945 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $193,538,697 | $181,231,991 |
| Net realized gain (loss) | 203,465,815 | 266,026,896 |
| Change in net unrealized appreciation (depreciation) | 420,482,433 | (959,923,116) |
| Net increase (decrease) in net assets resulting from operations | 817,486,945 | (512,664,229) |
| Distributions to shareholders | (296,535,267) | (488,658,856) |
| Share transactions | | |
| Proceeds from sales of shares | 1,277,932,118 | 489,756,078 |
| Net asset value of shares issued in exchange for the net assets of Fidelity Advisor Series Equity Value Fund (note 11) | – | 1,141,600,514 |
| Reinvestment of distributions | 296,535,267 | 488,658,856 |
| Cost of shares redeemed | (2,280,713,430) | (807,125,106) |
| Net increase (decrease) in net assets resulting from share transactions | (706,246,045) | 1,312,890,342 |
| Total increase (decrease) in net assets | (185,294,367) | 311,567,257 |
| Net Assets | | |
| Beginning of period | 7,742,285,211 | 7,430,717,954 |
| End of period | $7,556,990,844 | $7,742,285,211 |
| Other Information | | |
| Shares | | |
| Sold | 97,940,472 | 37,884,354 |
| Issued in exchange for the shares of Fidelity Advisor Series Equity Value Fund (note 11) | – | 82,306,891 |
| Issued in reinvestment of distributions | 22,195,753 | 41,468,961 |
| Redeemed | (174,379,368) | (61,689,584) |
| Net increase (decrease) | (54,243,143) | 99,970,622 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Series Value Discovery Fund
| | | | | | |
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $12.19 | $13.89 | $13.03 | $10.83 | $12.31 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .32 | .32 | .31 | .27 | .31 |
| Net realized and unrealized gain (loss) | 1.03 | (1.20) | 1.58 | 2.44 | (.80) |
| Total from investment operations | 1.35 | (.88) | 1.89 | 2.71 | (.49) |
| Distributions from net investment income | (.34) | (.30) | (.25)B | (.26) | (.32) |
| Distributions from net realized gain | (.19) | (.52) | (.78)B | (.25) | (.67) |
| Total distributions | (.53) | (.82) | (1.03) | (.51) | (.99) |
| Net asset value, end of period | $13.01 | $12.19 | $13.89 | $13.03 | $10.83 |
| Total ReturnC | 10.95% | (6.12)% | 15.05% | 25.40% | (4.32)% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | - %F | - %F | .27% | .62% | .62% |
| Expenses net of fee waivers, if any | - %F | - %F | .27% | .62% | .62% |
| Expenses net of all reductions | - %F | - %F | .26% | .62% | .62% |
| Net investment income (loss) | 2.49% | 2.47% | 2.29% | 2.21% | 2.51% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $7,556,991 | $7,742,285 | $7,430,718 | $5,063,707 | $4,400,959 |
| Portfolio turnover rateG | 47%H | 40%I | 74%H | 42% | 41% |
A Calculated based on average shares outstanding during the period.
B The amounts shown reflect certain reclassifications related to book to tax differences that were made in the year shown.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D 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.
E Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
F Amount represents less than .005%.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
I The portfolio turnover rate does not include the assets acquired in the merger.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended January 31, 2020
1. Organization.
Fidelity Series All-Sector Equity Fund, Fidelity Series Stock Selector Large Cap Value Fund and Fidelity Series Value Discovery Fund (the Funds) are funds of Fidelity Devonshire Trust (the Trust). 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. Each Fund is authorized to issue an unlimited number of shares. Shares are offered only to certain other Fidelity funds and Fidelity managed 529 plans.
Effective January 1, 2020, investment advisers Fidelity Investments Money Management, Inc., FMR Co., Inc., and Fidelity SelectCo, LLC, merged with and into Fidelity Management & Research Company. In connection with the merger transactions, the resulting, merged investment adviser was then redomiciled from Massachusetts to Delaware, changed its corporate structure from a corporation to a limited liability company, and changed its name to "Fidelity Management & Research Company LLC".
2. Investments in Fidelity Central Funds.
The Funds invest in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Funds' Schedules of Investments list each of the Fidelity Central Funds held as of period end, if any, as an investment of each Fund, but do not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, each 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 the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date ranged from less than .005% to .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Funds' Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
Each Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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 Funds:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of each Fund's investments to the Fair Value Committee (the Committee) established by each Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, each Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment 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 Committee oversees each Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing each Fund's investments and ratifies the fair value determinations of the Committee.
Each 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)
Valuation techniques used to value each 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 a third party pricing vendor 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 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 may be used and would be categorized as Level 2 in the hierarchy. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
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 January 31, 2020 is included at the end of each Fund's Schedule of Investments.
Foreign Currency. The Funds 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 rates 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 Funds' 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 for certain Funds 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 Funds are 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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Certain distributions received by the Funds represent a return of capital or capital gain. The Funds determine the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. For each Fund, a large, non-recurring dividend with a payable date of January 31, 2020 and an ex-date of February 3, 2020 is presented in the Statement of Assets and Liabilities as "Deferred dividend income". Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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, each 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 U.S. Federal income taxes is required. As of January 31, 2020, each Fund did not have any unrecognized tax benefits in the financial statements; nor is each Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Each Fund files a U.S. federal tax return, in addition to state and local tax returns as required. Each 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 each 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 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. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to the short-term gain distributions from the Underlying Funds, futures contracts, foreign currency transactions, certain foreign taxes, market discount, certain deemed distributions and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows for each Fund:
The tax-based components of distributable earnings as of period end were as follows for each Fund:
| | Tax cost | Gross unrealized appreciation | Gross unrealized depreciation | Net unrealized appreciation (depreciation) |
| Fidelity Series All-Sector Equity Fund | $2,414,520,925 | $1,162,950,139 | $(52,914,893) | $1,110,035,246 |
| Fidelity Series Stock Selector Large Cap Value Fund | 8,637,315,142 | 1,720,639,265 | (365,897,570) | 1,354,741,695 |
| Fidelity Series Value Discovery Fund | 6,824,478,051 | 947,529,582 | (386,875,070) | 560,654,512 |
The tax-based components of distributable earnings as of period end were as follows for each Fund:
| | Undistributed ordinary income | Undistributed long-term capital gain | Net unrealized appreciation (depreciation) on securities and other investments |
| Fidelity Series All-Sector Equity Fund | $24,374,247 | $163,927,354 | $1,109,972,504 |
| Fidelity Series Stock Selector Large Cap Value Fund | 50,603,468 | 121,372,126 | 1,354,740,369 |
| Fidelity Series Value Discovery Fund | – | 74,828,354 | 560,649,806 |
At period end, certain funds elected to defer to the next fiscal year end ordinary losses recognized during the period January 1, 2020 to January 31, 2020. Loss deferrals were as follows:
| Fidelity Series Value Discovery Fund | $436,012 |
The tax character of distributions paid was as follows:
| January 31, 2020 | | | |
| | Ordinary Income | Long-term Capital Gains | Total |
| Fidelity Series All-Sector Equity Fund | $69,838,128 | $231,463,273 | $301,301,401 |
| Fidelity Series Stock Selector Large Cap Value Fund | 243,933,376 | 326,738,088 | 570,671,464 |
| Fidelity Series Value Discovery Fund | 267,386,243 | 29,149,024 | 296,535,267 |
| January 31, 2019 | | | |
| | Ordinary Income | Long-term Capital Gains | Total |
| Fidelity Series All-Sector Equity Fund | $86,417,134 | $1,037,797,781 | $1,124,214,915 |
| Fidelity Series Stock Selector Large Cap Value Fund | 229,498,154 | 745,944,055 | 975,442,209 |
| Fidelity Series Value Discovery Fund | 184,311,821 | 304,347,035 | 488,658,856 |
Restricted Securities. The Funds 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 each applicable Fund's Schedule of Investments.
Consolidated Subsidiary. Fidelity Series Value Discovery Fund (the Fund) invests in certain investments through a wholly-owned subsidiary ("Subsidiary"), which may be subject to federal and state taxes upon disposition.
As of period end, the Fund held an investment of $19,713,969 in this Subsidiary, representing .26% of the Fund's net assets. The financial statements have been consolidated and include accounts of the Fund and the Subsidiary. Accordingly, all inter-company transactions and balances have been eliminated.
Any cash held by the Subsidiary is restricted as to its use and is presented as Restricted cash in the Statement of Assets and Liabilities.
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Funds' investment objective allows the Funds to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Funds used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Funds may not achieve their objectives.
The Funds' use of derivatives increased or decreased their exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment.
|
The Funds are also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Funds will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Funds. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Funds used futures contracts to manage their exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin on futures contracts in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on futures contracts during the period is presented in the Statement of Operations.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts". The notional amount at value reflects each contract's exposure to the underlying instrument or index at period end and is representative of volume of activity during the period. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, are noted in the table below.
| | Purchases ($) | Sales ($) |
| Fidelity Series All-Sector Equity Fund | 2,074,042,349 | 2,715,771,699 |
| Fidelity Series Stock Selector Large Cap Value Fund | 6,483,009,028 | 8,499,350,652 |
| Fidelity Series Value Discovery Fund | 3,528,517,500 | 4,709,624,417 |
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company LLC (the investment adviser) and its affiliates provide the Funds with investment management related services for which the Funds do not pay a management fee. Under the management contract, the investment adviser or an affiliate pays all ordinary operating expenses of the Funds, except custody fees, fees and expenses of the independent Trustees, and certain miscellaneous expenses such as proxy and shareholder meeting expenses.
Brokerage Commissions. A portion of portfolio transactions were placed with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were as follows:
| | Amount |
| Fidelity Series All-Sector Equity Fund | $60,121 |
| Fidelity Series Stock Selector Large Cap Value Fund | 206,315 |
| Fidelity Series Value Discovery Fund | 75,151 |
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, each fund, along with other registered investment companies having management contracts with Fidelity Management & Research Company LLC (FMR), or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing each fund to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. 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 |
| Fidelity Series All-Sector Equity Fund | Borrower | $33,207,000 | 2.54% | $2,343 |
| Fidelity Series Stock Selector Large Cap Value Fund | Borrower | $95,007,000 | 1.81% | $14,364 |
| Fidelity Series Value Discovery Fund | Borrower | $174,022,000 | 1.77% | $8,580 |
Interfund Trades. The Funds may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Affiliated Exchanges In-Kind. During the period, Fidelity Series Stock Selector Large Cap Value Fund and Fidelity Series Value Discovery Fund received investments and cash in exchange for shares of the Fund. The amount of in-kind exchanges is included in the Fund's share transactions in the accompanying Statement of Changes in Net Assets as well as the Notes to Financial Statements.
| | Shares | Value of investments and cash |
| Fidelity Series Stock Selector Large Cap Value Fund | 37,578,396 | $ 463,341,627 |
| Fidelity Series Value Discovery Fund | 23,888,120 | $ 321,493,726 |
Other. During the period, the investment adviser reimbursed the Funds for certain losses as follows:
| Fidelity Series All-Sector Equity Fund | $17,102 |
| Fidelity Series Stock Selector Large Cap Value Fund | 13,115 |
| Fidelity Series Value Discovery Fund | 62,599 |
7. Committed Line of Credit.
Certain Funds participate with other funds managed by the investment adviser 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 participating funds have agreed to pay commitment fees on their pro-rata portion of the line of credit, which are reflected in Commitment fees on the Statement of Operations, and are as follows:
| Fidelity Series All-Sector Equity Fund | $9,247 |
| Fidelity Series Stock Selector Large Cap Value Fund | 26,599 |
| Fidelity Series Value Discovery Fund | 19,808 |
During the period, the Funds did not borrow on this line of credit.
8. Security Lending.
Certain Funds lend portfolio securities from time to time in order to earn additional income. For equity securities, lending agents are used, including National Financial Services (NFS), an affiliate of the Funds. Pursuant to a securities lending agreement, NFS will receive a fee, which is capped at 9.9% of a Fund's daily lending revenue, for its services as lending agent. The Funds may lend securities to certain qualified borrowers, including NFS. On the settlement date of the loan, each applicable 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 Funds and any additional required collateral is delivered to the Funds on the next business day. The Funds or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Funds may apply collateral received from the borrower against the obligation. The Funds may experience delays and costs in recovering the securities loaned. 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 each applicable Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with NFS, as affiliated borrower. 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 on each applicable Fund's Statement of Operations as a component of income from Fidelity Central Funds. Affiliated security lending activity was as follows:
| | Total Security Lending Income Fees Paid to NFS | Security Lending Income From Securities Loaned to NFS |
| Fidelity Series All-Sector Equity Fund | $2,573 | $40 |
| Fidelity Series Stock Selector Large Cap Value Fund | $9,782 | $128 |
| Fidelity Series Value Discovery Fund | $2,420 | $– |
9. Expense Reductions.
Through arrangements with each applicable Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce each applicable Fund's expenses. All of the applicable expense reductions are noted in the table below.
| | Custodian credits |
| Fidelity Series Value Discovery Fund | $3,650 |
10. Other.
The Funds' 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 Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
At the end of the period, mutual funds and accounts managed by the investment adviser or its affiliates were the owners of record of all of the outstanding shares of the Funds.
11. Prior Fiscal Year Merger Information.
On September 14, 2018, Fidelity Series Stock Selector Large Cap Value Fund acquired all of the assets and assumed all of the liabilities of Fidelity Advisor Series Stock Selector Large Cap Value Fund ("Target Fund") pursuant to an Agreement and Plan of Reorganization approved by the Board of Trustees ("The Board"). The acquisition was accomplished by an exchange of shares of the Fund for shares then outstanding of the Target Fund at its respective net asset value on the acquisition date.
On September 21, 2018, Fidelity Series Value Discovery Fund acquired all of the assets and assumed all of the liabilities of Fidelity Advisor Series Equity Value Fund ("Target Fund") pursuant to an Agreement and Plan of Reorganization approved by the Board of Trustees ("The Board"). The acquisition was accomplished by an exchange of shares of the Fund for shares then outstanding of the Target Fund at its respective net asset value on the acquisition date.
The reorganizations provide shareholders of each Target Fund access to a larger portfolio with a similar investment objective and lower expenses. The reorganization qualified as a tax-free reorganization for federal income tax purposes with no gain or loss recognized to the funds or their shareholders.
Combined total net assets after the acquisition are as follows:
| Target Funds | Securities | Unrealized appreciation (depreciation) | Net Assets |
| Fidelity Advisor Series Stock Selector Large Cap Value Fund | $1,141,814,114 | $155,225,458 | $1,142,737,823 |
| Fidelity Advisor Series Equity Value Fund | 1,146,283,856 | 130,414,969 | 1,141,600,514 |
| Surviving Funds | Net assets | Total net assets after the acquisition |
| Fidelity Series Stock Selector Large Cap Value Fund | $10,008,538,109 | $11,151,275,932 |
| Fidelity Series Value Discovery Fund | 7,203,814,366 | 8,345,414,880 |
Pro forma results of operations of the combined entity for the entire period ended January 31, 2019, as though each acquisition had occurred as of the beginning of the year (rather than on the actual acquisition date), are as follows:
| Surviving Funds | Net investment income (loss) | Total net realized gain (loss) | Total change in net unrealized appreciation (depreciation) | Net increase (decrease) in net assets resulting from operations |
| Fidelity Series Stock Selector Large Cap Value Fund | $254,718,097 | $741,150,176 | $(1,575,583,949) | $(579,715,676) |
| Fidelity Series Value Discovery Fund | 200,459,630 | 284,494,276 | (998,645,857) | (513,691,951) |
Because each combined investment portfolio has been managed as a single portfolio since each acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of each Target Fund that has been included in each Surviving Fund's Statement of Operations since the respective acquisition dates.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Fidelity Devonshire Trust and Shareholders of Fidelity Series All-Sector Equity Fund and Fidelity Series Value Discovery Fund:
Opinion on the Financial Statements and Financial Highlights
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Fidelity Series All-Sector Equity Fund and Fidelity Series Value Discovery Fund (the "Funds"), each a fund of Fidelity Devonshire Trust, including the schedules of investments, as of January 31, 2020, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds as of January 31, 2020, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
Basis for Opinions
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of January 31, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
March 16, 2020
We have served as the auditor of one or more of the Fidelity investment companies since 1999.
We have served as the auditor of one or more investment companies in the Fidelity group of funds since 1932.
Report of Independent Registered Public Accounting Firm
To the Board Trustees of Fidelity Devonshire Trust and the Shareholders of Fidelity Series Stock Selector Large Cap Value Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Fidelity Series Stock Selector Large Cap Value Fund (one of the funds constituting Fidelity Devonshire Trust, referred to hereafter as the “Fund”) as of January 31, 2020, the related statement of operations for the year ended January 31, 2020, the statement of changes in net assets for each of the two years in the period ended January 31, 2020, including the related notes, and the financial highlights for each of the five years in the period ended January 31, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of January 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended January 31, 2020 and the financial highlights for each of the five years in the period ended January 31, 2020 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of January 31, 2020 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 16, 2020
We have served as the auditor of one or more investment companies in the Fidelity group of funds since 1932.
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and funds, as applicable, are listed below. The Board of Trustees governs each fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee each fund's activities, review contractual arrangements with companies that provide services to each fund, oversee management of the risks associated with such activities and contractual arrangements, and review each fund's performance. Except for Michael E. Wiley, each of the Trustees oversees 302 funds. Mr. Wiley oversees 199 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the Investment Company Act of 1940 (1940 Act)) of the trust and the funds is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
Each fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing each fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the funds, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the funds. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The funds' Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and other equity funds. The asset allocation funds may invest in Fidelity® funds overseen by the funds' Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, each fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the funds' activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the funds' business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the funds are carried out by or through FMR, its affiliates, and other service providers, the funds' exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the funds' activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. Appropriate personnel, including but not limited to the funds' Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the funds' Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey is an Overseer Emeritus for the Boston Symphony Orchestra, a Director of Artis-Naples, and a Trustee of Brewster Academy in Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-2018), Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for each fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks served as Chief Operating Officer and as a member of the Board of The Depository Trust & Clearing Corporation (financial markets infrastructure), President, Chief Operating Officer and a member of the Board of The Depository Trust Company (DTC), President and a member of the Board of the National Securities Clearing Corporation (NSCC), Chief Executive Officer and a member of the Board of the Government Securities Clearing Corporation and Chief Executive Officer and a member of the Board of the Mortgage-Backed Securities Clearing Corporation. Mr. Dirks currently serves as a member of the Finance Committee (2016-present) and Board (2017-present) and is Treasurer (2018-present) of the Asolo Repertory Theatre.
Donald F. Donahue (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Donahue also serves as Trustee of other Fidelity® funds. Mr. Donahue serves as President and Chief Executive Officer of Miranda Partners, LLC (risk consulting for the financial services industry, 2012-present). Previously, Mr. Donahue served as Chief Executive Officer (2006-2012), Chief Operating Officer (2003-2006) and Managing Director, Customer Marketing and Development (1999-2003) of The Depository Trust & Clearing Corporation (financial markets infrastructure). Mr. Donahue currently serves as a member (2007-present) and Co-Chairman (2016-present) of the Board of United Way of New York, a member of the Board of NYC Leadership Academy (2012-present) and a member of the Board of Advisors of Ripple Labs, Inc. (financial services, 2015-present). Mr. Donahue previously served as a member of the Advisory Board of certain Fidelity® funds (2015-2018).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Previously, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity), Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail), Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005) and Chairman (2014-2017) and a member of the Board (2010-2017) of Dave & Buster’s Entertainment, Inc. (restaurant and entertainment complexes). Mr. Lacy currently serves as a member of the Board of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present), Trustee of the California Chapter of The Nature Conservancy (2015-present) and a member of the Board of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as Chair of the Board of Governors, State University System of Florida (2013-present) and is a member of the Council on Foreign Relations (1994-present). He is also a member and has in the past served as Chairman of the Board of Directors of Artis-Naples (2012-present). Previously, Mr. Lautenbach served as a member and then Lead Director of the Board of Directors of Eaton Corporation (diversified industrial, 1997-2016). He was also a Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010); as well as Director of Sony Corporation (2006-2007). In addition, Mr. Lautenbach had a 30-year career with IBM (technology company), during which time he served as Senior Vice President and as a member of the Corporate Executive Committee (1968-1998).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Independent Directors Council Governing Council (2015-present). Previously, Mr. Mauriello served as a member of the Board of XL Group plc. (global insurance and re-insurance, 2006-2018).
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Previously, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments and a member of Scudder, Stevens & Clark and Scudder Kemper Investments. Ms. Small previously served as a member of the Board (2009-2019) and Chair of the Investment Committee (2010-2019) of the Teagle Foundation and a member of the Investment Committee of the Berkshire Taconic Community Foundation (2008-2019).
Garnett A. Smith (1947)
Year of Election or Appointment: 2018
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to his retirement, Mr. Smith served as Chairman and Chief Executive Officer (1990-1997) and President (1986-1990) of Inbrand Corp. (manufacturer of personal absorbent products). Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank (now Bank of America). Mr. Smith previously served as a member of the Advisory Board of certain Fidelity® funds (2012-2013).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions). Mr. Thomas currently serves as Non-Executive Chairman of the Board of Fortune Brands Home and Security (home and security products, 2011-present), and a member of the Board (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication).
Michael E. Wiley (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Wiley also serves as Trustee or a member of the Advisory Board of other Fidelity® funds. Previously, Mr. Wiley served as Chairman, President and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004). Mr. Wiley currently serves as a member of the Board of High Point Resources (exploration and production, 2005-present). Previously, Mr. Wiley served as a member of the Board of Andeavor Corporation (independent oil refiner and marketer, 2005-2018) and a member of the Board of Andeavor Logistics LP (natural resources logistics, 2015-2018).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for each fund.
Advisory Board Members and Officers:
Correspondence intended for a Member of the Advisory Board (if any) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Vicki L. Fuller (1957)
Year of Election or Appointment: 2018
Member of the Advisory Board
Ms. Fuller also serves as a member of the Advisory Board of other Fidelity® funds. Previously, Ms. Fuller served as Chief Investment Officer of the New York State Common Retirement Fund (2012-2018) and held a variety of positions at AllianceBernstein L.P. (global asset management, 1985-2012), including Managing Director (2006-2012) and Senior Vice President and Senior Portfolio Manager (2001-2006). Ms. Fuller currently serves as a member of the Board, Audit Committee and Nominating and Governance Committee of The Williams Companies, Inc. (natural gas infrastructure, 2018-present) and as a member of the Board of Treliant, LLC (consulting, 2019-present).
Patricia L. Kampling (1959)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Kampling also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Kampling served as Chairman of the Board and Chief Executive Officer (2012-2019), President and Chief Operating Officer (2011-2012) and Executive Vice President and Chief Financial Officer (2010-2011) of Alliant Energy Corporation. Ms. Kampling currently serves as a member of the Board, Compensation Committee and Executive Committee and as Chair of the Audit Committee of Briggs & Stratton Corporation (manufacturing, 2011-present) and as a member of the Board, Audit, Finance and Risk Committee and Safety, Environmental, Technology and Operations Committee of American Water Works Company, Inc. (utilities company, 2019-present). In addition, Ms. Kampling currently serves as a member of the Board of the Nature Conservancy, Wisconsin Chapter (2019-present). Previously, Ms. Kampling served as a member of the Board of Interstate Power and Light Company (2012-2019) and Wisconsin Power and Light Company (2012-2019) (each a subsidiary of Alliant Energy Corporation) and as a member of the Board and Workforce Development Committee of the Business Roundtable (2018-2019).
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of Fidelity Management & Research Company LLC (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served as Vice Chairman and a Director of FMR Co., Inc. (investment adviser firm) and on the Special Olympics International Board of Directors (1997-2006).
Susan Tomasky (1953)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Tomasky also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Tomasky served in various executive officer positions at American Electric Power Company, Inc. (1998-2011), including most recently as President of AEP Transmission (2007-2011). Ms. Tomasky currently serves as a member of the Board and Sustainability Committee and as Chair of the Audit Committee of Marathon Petroleum Corporation (2018-present) and as a member of the Board, Corporate Governance Committee and Organization and Compensation Committee and as Chair of the Audit Committee of Public Service Enterprise Group, Inc. (utilities company, 2012-present). In addition, Ms. Tomasky currently serves as a member of the Board of the Columbus Regional Airport Authority (2007-present), as a member of the Board of the Royal Shakespeare Company – America (2009-present), as a member of the Board of the Columbus Association for the Performing Arts (2011-present) and as a member of the Board of Kenyon College (2016-present). Previously, Ms. Tomasky served as a member of the Board (2011-2019) and as Lead Independent Director (2015-2018) of Andeavor Corporation (previously Tesoro Corporation) (independent oil refiner and marketer) and as a member of the Board of Summit Midstream Partners LP (energy, 2012-2018).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2017
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer (2012-present) and Senior Vice President (2014-present) of FMR LLC (diversified financial services company) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as AML Officer of certain funds (2017-2019), as AML Officer of the funds (2012-2016), and Vice President (2007-2014) and Deputy Anti-Money Laundering Officer (2007-2012) of FMR LLC.
Craig S. Brown (1977)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Brown also serves as Assistant Treasurer of other funds. Mr. Brown is an employee of Fidelity Investments (2013-present).
John J. Burke III (1964)
Year of Election or Appointment: 2018
Chief Financial Officer
Mr. Burke also serves as Chief Financial Officer of other funds. Mr. Burke serves as Head of Investment Operations for Fidelity Fund and Investment Operations (2018-present) and is an employee of Fidelity Investments (1998-present). Previously Mr. Burke served as head of Asset Management Investment Operations (2012-2018).
William C. Coffey (1969)
Year of Election or Appointment: 2019
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Secretary and CLO of certain funds (2018-2019); CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2018-2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2018-2019); CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2018-2019); and Assistant Secretary of certain funds (2009-2018).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2018
Vice President
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Co-Head of Equity (2018-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Executive Vice President of Fidelity SelectCo, LLC (2019), Head of Global Equity Research (2016-2018), Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015) and as a Director of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2017).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Laura M. Del Prato (1964)
Year of Election or Appointment: 2018
Assistant Treasurer
Ms. Del Prato also serves as an officer of other funds. Ms. Del Prato is an employee of Fidelity Investments (2017-present). Prior to joining Fidelity Investments, Ms. Del Prato served as a Managing Director and Treasurer of the JPMorgan Mutual Funds (2014-2017). Prior to JPMorgan, Ms. Del Prato served as a partner at Cohen Fund Audit Services (accounting firm, 2012-2013) and KPMG LLP (accounting firm, 2004-2012).
Colm A. Hogan (1973)
Year of Election or Appointment: 2020
Assistant Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2005-present). Previously, Mr. Hogan served as Deputy Treasurer of certain Fidelity® funds (2016-2020) and Assistant Treasurer of certain Fidelity® funds (2016-2018).
Pamela R. Holding (1964)
Year of Election or Appointment: 2018
Vice President
Ms. Holding also serves as Vice President of other funds. Ms. Holding serves as Co-Head of Equity (2018-present) and is an employee of Fidelity Investments (2013-present). Previously, Ms. Holding served as Executive Vice President of Fidelity SelectCo, LLC (2019) and as Chief Investment Officer of Fidelity Institutional Asset Management (2013-2018).
Cynthia Lo Bessette (1969)
Year of Election or Appointment: 2019
Secretary and Chief Legal Officer (CLO)
Ms. Lo Bessette also serves as an officer of other funds. Ms. Lo Bessette serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company LLC (investment adviser firm, 2019-present); and CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2019-present). She is a Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2019-present), and is an employee of Fidelity Investments. Previously, Ms. Lo Bessette served as CLO, Secretary, and Senior Vice President of FMR Co., Inc. (investment adviser firm, 2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2019). Prior to joining Fidelity Investments, Ms. Lo Bessette was Executive Vice President, General Counsel (2016-2019) and Senior Vice President, Deputy General Counsel (2015-2016) of OppenheimerFunds (investment management company) and Deputy Chief Legal Officer (2013-2015) of Jennison Associates LLC (investment adviser firm).
Chris Maher (1972)
Year of Election or Appointment: 2020
Deputy Treasurer
Mr. Maher also serves as an officer of other funds. Mr. Maher serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), and is an employee of Fidelity Investments (2008-present). Previously, Mr. Maher served as Assistant Treasurer of certain funds (2013-2020); Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company LLC (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Compliance Officer of FMR Co., Inc. (investment adviser firm, 2016-2019), as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. Ms. Smith serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), is an employee of Fidelity Investments (2009-present), and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Assistant Treasurer (2013-2019) and Deputy Treasurer (2013-2016) of certain Fidelity® funds.
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche LLP (accounting firm, 2005-2013).
Jim Wegmann (1979)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Wegmann also serves as Assistant Treasurer of other funds. Mr. Wegmann is an employee of Fidelity Investments (2011-present).
Shareholder Expense Example
As a shareholder of a 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 Funds 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 (August 1, 2019 to January 31, 2020).
Actual Expenses
The first line of the accompanying table for each 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 fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, each 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 fund provides information about hypothetical account values and hypothetical expenses based on a fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, each 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.
| | Annualized Expense Ratio-A | Beginning
Account Value
August 1, 2019 | Ending
Account Value
January 31, 2020 | Expenses Paid
During Period-B
August 1, 2019
to January 31, 2020 |
| Fidelity Series All-Sector Equity Fund | - %-C | | | |
| Actual | | $1,000.00 | $1,103.50 | $--D |
| Hypothetical-E | | $1,000.00 | $1,025.21 | $--D |
| Fidelity Series Stock Selector Large Cap Value Fund | - %-C | | | |
| Actual | | $1,000.00 | $1,055.50 | $--D |
| Hypothetical-E | | $1,000.00 | $1,025.21 | $--D |
| Fidelity Series Value Discovery Fund | - %-C | | | |
| Actual | | $1,000.00 | $1,037.20 | $--D |
| Hypothetical-E | | $1,000.00 | $1,025.21 | $--D |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/ 365 (to reflect the one-half year period).
C Amount represents less than .005%.
D Amount represents less than $.005.
E 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of each fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities, and dividends derived from net investment income:
| | Pay Date | Record Date | Dividends | Capital Gains |
| Fidelity Series All-Sector Equity Fund | 03/09/20 | 03/06/20 | $0.007 | $0.561 |
| Fidelity Series Stock Selector Large Cap Value Fund | 03/09/20 | 03/06/20 | $0.009 | $0.208 |
| Fidelity Series Value Discovery Fund | 03/09/20 | 03/06/20 | $0.000 | $0.131 |
|
The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended January 31, 2020, or, if subsequently determined to be different, the net capital gain of such year.
| Fidelity Series All-Sector Equity Fund | $353,311,617 |
| Fidelity Series Stock Selector Large Cap Value Fund | $378,402,711 |
| Fidelity Series Value Discovery Fund | $104,552,332 |
|
A percentage of the dividends distributed during the fiscal year for the following funds qualify for the dividends–received deduction for corporate shareholders:
| Fidelity Series All-Sector Equity Fund | |
| December, 2019 | 74% |
| Fidelity Series Stock Selector Large Cap Value Fund | |
| March, 2019 | 99% |
| December, 2019 | 78% |
| Fidelity Series Value Discovery Fund | |
| December, 2019 | 50% |
|
A percentage of the dividends distributed during the fiscal year for the following funds may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
| Fidelity Series All-Sector Equity Fund | |
| December, 2019 | 79% |
| Fidelity Series Stock Selector Large Cap Value Fund | |
| March, 2019 | 100% |
| December, 2019 | 88% |
| Fidelity Series Value Discovery Fund | |
| December, 2019 | 87% |
|
A percentage of the dividends distributed during the fiscal year for the following funds qualify for as a section 199A dividend:
| Fidelity Series All-Sector Equity Fund | |
| December, 2019 | 5% |
| Fidelity Series Stock Selector Large Cap Value Fund | |
| March 2019 | 1% |
| December, 2019 | 7% |
| Fidelity Series Value Discovery Fund | |
| December, 2019 | 9% |
|
The funds will notify shareholders in January 2021 of amounts for use in preparing 2020 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Series All-Sector Equity Fund
Fidelity Series Value Discovery Fund
Fidelity Series Stock Selector Large Cap Value Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company LLC (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for each fund. FMR and the sub-advisers are referred to herein as the Investment Advisers. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
Approval of Amended and Restated Advisory Contracts. At its November 2019 meeting, the Board unanimously determined to approve an amended and restated management contract and sub-advisory agreements (Amended and Restated Contracts) for a stub period of January 1, 2020 through January 31, 2020 in connection with a consolidation of certain of Fidelity's advisory businesses. The Board considered that, on or about January 1, 2020, FMR Co., Inc. (FMRC) expected to merge with and into FMR and, after the merger, FMR expected to redomicile as a Delaware limited liability company. The Board also approved the termination of the sub-advisory agreement with FMRC upon the completion of the merger. The Board noted that references to FMR in the Amended and Restated Contracts would be updated to reflect FMR's new form of organization and domicile. The Board also noted Fidelity's assurance that neither the planned consolidation nor the Amended and Restated Contracts will change the investment processes, the level or nature of services provided, the resources and personnel allocated, trading and compliance operations, or any fees paid by the fund.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of each fund's Advisory Contracts, including the services and support provided to each fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of each fund's Advisory Contracts. The Board also meets as needed to review matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through joint ad hoc committees to discuss certain matters relevant to all of the Fidelity funds.
At its January 2020 meeting, the Board unanimously determined to renew each fund's Advisory Contracts. In considering whether to renew the Advisory Contracts for each fund, the Board considered all factors it believed relevant and reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of each fund and its shareholders and the fact that no fee is payable under the management contracts was fair and reasonable.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the funds, including the backgrounds of investment personnel of Fidelity, and also considered the funds' investment objectives, strategies, and related investment philosophies. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of each fund.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory and administrative services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for each fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, each fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
Investment Performance. The Board considered whether each fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions. The Board reviewed each fund's absolute investment performance, as well as each fund's relative investment performance, and considered each of Fidelity Series All-Sector Equity Fund's and Fidelity Series Value Discovery Fund's underperformance for different time periods ended June 30, 2019. In this regard, the Board noted that each fund is designed to offer an investment option for other investment companies and 529 plans managed by Fidelity and ultimately to enhance the performance of those investment companies and 529 plans. The Board noted that there were portfolio management changes for the Fidelity Series All-Sector Equity Fund in March 2019 and November 2019. The Board will continue to monitor closely the fund's performance, taking into account the portfolio management change
Based on its review, the Board concluded that the nature, extent, and quality of services provided to each fund under the Advisory Contracts should continue to benefit the shareholders of each fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered that each fund does not pay FMR a management fee for investment advisory services. The Board also noted that FMR undertakes to pay all operating expenses of each fund with certain exceptions.
In connection with the renewal of the Advisory Contracts, the Board also approved amendments to the management contract for each fund to clarify that the fund pays its non-operating expenses, including brokerage commissions and fees and expenses associated with the fund's securities lending program. The Board considered that the amendments would not change the services provided to the funds or the party responsible for making such payments under the current management contracts.
The Board further considered that FMR has contractually agreed to reimburse each fund to the extent that total operating expenses, with certain exceptions, as a percentage of its average net assets, exceed 0.014% through May 31, 2022.
Based on its review, the Board considered that each fund does not pay a management fee and concluded that the total expense ratio of each class of each fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the level of Fidelity's profits in respect of all the Fidelity funds.
PricewaterhouseCoopers LLP (PwC), auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and potential indirect benefits such businesses may have received as a result of their association with Fidelity's mutual fund business (i.e., fall-out benefits) as well as cases where Fidelity's affiliates may benefit from the funds' business. The Board noted that changes to fall-out benefits year-over-year reflect business developments at Fidelity's various businesses. The Board considered that a joint ad hoc committee created by it and the boards of other Fidelity funds had recently been established, and met periodically, to evaluate potential fall-out benefits (PFOB Committee). The Board noted that the PFOB Committee, among other things: (i) discussed the legal framework surrounding potential fall-out benefits; (ii) reviewed the Board's responsibilities and approach to potential fall-out benefits; and (iii) reviewed practices employed by competitor funds regarding the review of potential fall-out benefits.
The Board concluded that the costs of the services provided by and the profits realized by Fidelity in connection with the operation of each fund were not relevant to the renewal of the Advisory Contracts because each fund pays no advisory fees and FMR bears all expenses of each fund with certain exceptions.
Economies of Scale. The Board concluded that because each fund pays no advisory fees and FMR bears all expenses of each fund with certain exceptions, the realization of economies of scale was not a material factor in the Board's decision to renew each fund's Advisory Contracts.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' advisory contracts, the Board requested and received additional information on certain topics, including: (i) fund flow and performance trends, in particular the underperformance of certain funds and strategies, and Fidelity's long-term strategies for certain funds; (ii) consideration of performance fees for additional funds; (iii) changes in Fidelity's non-fund businesses and the impact of such changes on the funds; (iv) metrics for evaluating index fund and ETF performance and information about ETF trading characteristics; (v) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (vi) the expense structures for different funds and classes; (vii) information regarding other accounts managed by Fidelity, including collective investment trusts and separately managed accounts; and (viii) Fidelity's philosophies and strategies for evaluating funds and classes with lower or declining asset levels.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee arrangements are fair and reasonable, and that each fund's Amended and Restated Contracts should be approved and each fund's Advisory Contracts should be renewed.
EDT-LDT-ANN-0320
1.956971.107
Fidelity® Stock Selector Large Cap Value Fund
Annual Report
January 31, 2020
Includes Fidelity and Fidelity Advisor share classes
See the inside front cover for important information about access to your fund’s shareholder reports.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of a fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a financial advisor, broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a fund electronically, by contacting your financial intermediary. For Fidelity customers, visit Fidelity's web site or call Fidelity using the contact information listed below.
You may elect to receive all future reports in paper free of charge. If you wish to continue receiving paper copies of your shareholder reports, you may contact your financial intermediary or, if you are a Fidelity customer, visit Fidelity’s website, or call Fidelity at the applicable toll-free number listed below. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
| Account Type | Website | Phone Number |
| Brokerage, Mutual Fund, or Annuity Contracts: | fidelity.com/mailpreferences | 1-800-343-3548 |
| Employer Provided Retirement Accounts: | netbenefits.fidelity.com/preferences (choose 'no' under Required Disclosures to continue to print) | 1-800-343-0860 |
| Advisor Sold Accounts Serviced Through Your Financial Intermediary: | Contact Your Financial Intermediary | Your Financial Intermediary's phone number |
| Advisor Sold Accounts Serviced by Fidelity: | institutional.fidelity.com | 1-877-208-0098 |
Contents
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 if you’re an individual investing directly with Fidelity, call 1-800-835-5092 if you’re a plan sponsor or participant with Fidelity as your recordkeeper or call 1-877-208-0098 on institutional accounts or if you’re an advisor or invest through one 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. © 2020 FMR LLC. All rights reserved.
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-PORT. Forms N-PORT are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-PORT 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.institutional.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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended January 31, 2020 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | 6.42% | 6.04% | 9.64% |
| Class M (incl. 3.50% sales charge) | 8.65% | 6.20% | 9.57% |
| Class C (incl. contingent deferred sales charge) | 10.96% | 6.42% | 9.40% |
| Fidelity® Stock Selector Large Cap Value Fund | 13.24% | 7.62% | 10.61% |
| Class I | 13.20% | 7.58% | 10.57% |
| Class Z | 13.38% | 7.68% | 10.63% |
Class C shares' contingent deferred sales charges included in the past one year, past five years and past ten years total return figures are 1%, 0% and 0%, respectively.
The initial offering of Class Z shares took place on February 1, 2017. Returns prior to February 1, 2017, are those of Class I.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Stock Selector Large Cap Value Fund, a class of the fund, on January 31, 2010.
The chart shows how the value of your investment would have changed, and also shows how the Russell 1000® Value Index performed over the same period.
| Period Ending Values |
| $27,405 | Fidelity® Stock Selector Large Cap Value Fund |
| $30,712 | Russell 1000® Value Index |
Management's Discussion of Fund Performance
Market Recap: U.S. stocks rolled for the 12 months ending January 31, 2020, with the S&P 500
® index gaining 21.68%, despite persistent, nagging concerns about global economic growth and trade. After a rough end to 2018, equities sharply reversed course to begin 2019 amid upbeat company earnings and signs the Federal Reserve may pause on rates. The uptrend extended until May, when the index sunk as trade talks between the U.S. and China broke down. The bull market roared back to record a series of highs in July, when the Fed cut interest rates for the first time since 2008. Volatility intensified in August, as the Treasury yield curve inverted, which some investors viewed as a sign the U.S. economy could be heading for recession. But the market proved resilient, hitting a new high on October 30, when the Fed lowered rates for the third time in 2019, and moving higher through December 31. The new year began with a flattish January, with growing anxiety related to the new coronavirus outbreak and its impact on the global economy. By sector, information technology (+46%) led the way, driven by strong growth trends. The defensive utilities sector (+30%) also stood out, while communication services and consumer staples were about in line with the broader market. Conversely, energy (-11%) was by far the weakest – struggling due to sluggish oil prices – followed by several strong gainers that still lagged: materials (+11%), health care (+12%), industrials (+16%), consumer discretionary (+17%), and financials and real estate (+18% each).
Comments from Lead Portfolio Manager Matthew Friedman: For the fiscal year, the fund’s share classes returned in a range between about 12% and 13% (excluding sales charges, if applicable), underperforming the 14.88% advance of the benchmark Russell 1000
® Value Index. Stock picking hurt the fund’s return versus the benchmark, especially within the materials sector, as well as the software & services and banking industries. The fund’s cash position of about 3%, on average, hurt against a backdrop of rising equity markets the past 12 months. In terms of individual stocks, not owning financial services giant and index component JPMorgan Chase (+32%) was the portfolio’s largest individual detractor. Notably, the company reported better-than-anticipated third- and fourth-quarter financial results owed in part to consumer strength, economic stabilization and receding U.S.-China trade tensions. An overweighting in chemicals giant DuPont de Nemours (-35%) also weighed on the fund’s relative result. The firm's management team took longer than investors expected with plans to split off some of the firm's businesses in 2019. Specifically, investors also worried about liabilities faced by DuPont and Chemours, a 2015 spinoff of DuPont, related to lawsuits tied to PFOA, a cancer-linked chemical formerly used to make Teflon non-stick coating. Conversely, favorable investment choices among energy stocks were a big positive, not owning large benchmark component and industry stalwart Exxon Mobil (-11%) in particular, which underperformed this period. An overweighting in multinational engineering firm Aecom (+53%) also contributed.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of January 31, 2020
| | % of fund's net assets |
| Bank of America Corp. | 3.1 |
| Capital One Financial Corp. | 2.8 |
| Johnson & Johnson | 2.5 |
| Berkshire Hathaway, Inc. Class B | 2.4 |
| General Electric Co. | 2.2 |
| Procter & Gamble Co. | 2.2 |
| McDonald's Corp. | 1.9 |
| Citigroup, Inc. | 1.8 |
| Wells Fargo & Co. | 1.6 |
| Verizon Communications, Inc. | 1.6 |
| | 22.1 |
Top Five Market Sectors as of January 31, 2020
| | % of fund's net assets |
| Financials | 23.4 |
| Health Care | 12.1 |
| Industrials | 9.8 |
| Consumer Staples | 8.7 |
| Communication Services | 8.0 |
Asset Allocation (% of fund's net assets)
| As of January 31, 2020* |
| | Stocks and Equity Futures | 98.0% |
| | Short-Term Investments and Net Other Assets (Liabilities) | 2.0% |
* Foreign investments - 9.2%
Schedule of Investments January 31, 2020
Showing Percentage of Net Assets
| Common Stocks - 97.6% | | | |
| | | Shares | Value |
| COMMUNICATION SERVICES - 8.0% | | | |
| Diversified Telecommunication Services - 3.0% | | | |
| AT&T, Inc. | | 182,700 | $6,873,174 |
| Verizon Communications, Inc. | | 132,863 | 7,897,377 |
| | | | 14,770,551 |
| Entertainment - 2.0% | | | |
| Cinemark Holdings, Inc. | | 102,200 | 3,220,322 |
| The Walt Disney Co. | | 49,985 | 6,913,425 |
| | | | 10,133,747 |
| Media - 3.0% | | | |
| CBS Corp. Class B | | 47,000 | 1,604,110 |
| Comcast Corp. Class A | | 164,148 | 7,089,552 |
| Interpublic Group of Companies, Inc. | | 269,579 | 6,119,443 |
| | | | 14,813,105 |
|
| TOTAL COMMUNICATION SERVICES | | | 39,717,403 |
|
| CONSUMER DISCRETIONARY - 5.9% | | | |
| Auto Components - 0.5% | | | |
| Aptiv PLC | | 27,130 | 2,300,353 |
| Automobiles - 0.7% | | | |
| General Motors Co. | | 96,540 | 3,223,471 |
| Hotels, Restaurants & Leisure - 2.7% | | | |
| McDonald's Corp. | | 45,560 | 9,748,473 |
| Royal Caribbean Cruises Ltd. | | 32,780 | 3,837,882 |
| | | | 13,586,355 |
| Household Durables - 0.4% | | | |
| Lennar Corp. Class A | | 32,050 | 2,126,838 |
| Multiline Retail - 0.6% | | | |
| Dollar Tree, Inc. (a) | | 35,240 | 3,068,347 |
| Specialty Retail - 1.0% | | | |
| Burlington Stores, Inc. (a) | | 12,921 | 2,809,930 |
| Ulta Beauty, Inc. (a) | | 7,840 | 2,100,414 |
| | | | 4,910,344 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 29,215,708 |
|
| CONSUMER STAPLES - 8.7% | | | |
| Beverages - 0.7% | | | |
| The Coca-Cola Co. | | 54,700 | 3,194,480 |
| Food & Staples Retailing - 1.5% | | | |
| U.S. Foods Holding Corp. (a) | | 29,465 | 1,183,609 |
| Walmart, Inc. | | 56,745 | 6,496,735 |
| | | | 7,680,344 |
| Food Products - 2.1% | | | |
| Conagra Brands, Inc. | | 38,300 | 1,260,836 |
| General Mills, Inc. | | 32,400 | 1,691,928 |
| Mondelez International, Inc. | | 92,600 | 5,313,388 |
| Post Holdings, Inc. (a) | | 13,685 | 1,431,040 |
| Tyson Foods, Inc. Class A | | 9,600 | 793,248 |
| | | | 10,490,440 |
| Household Products - 3.1% | | | |
| Colgate-Palmolive Co. | | 27,400 | 2,021,572 |
| Kimberly-Clark Corp. | | 17,800 | 2,549,672 |
| Procter & Gamble Co. | | 85,680 | 10,677,442 |
| | | | 15,248,686 |
| Tobacco - 1.3% | | | |
| Altria Group, Inc. | | 48,500 | 2,305,205 |
| Philip Morris International, Inc. | | 52,700 | 4,358,290 |
| | | | 6,663,495 |
|
| TOTAL CONSUMER STAPLES | | | 43,277,445 |
|
| ENERGY - 7.5% | | | |
| Energy Equipment & Services - 0.3% | | | |
| Baker Hughes, A GE Co. Class A | | 78,000 | 1,689,480 |
| Oil, Gas & Consumable Fuels - 7.2% | | | |
| BP PLC sponsored ADR | | 110,843 | 4,004,758 |
| Cenovus Energy, Inc. (Canada) | | 499,400 | 4,347,203 |
| Cheniere Energy, Inc. (a) | | 68,000 | 4,028,320 |
| ConocoPhillips Co. | | 111,800 | 6,644,274 |
| Hess Corp. | | 57,600 | 3,258,432 |
| Noble Energy, Inc. | | 114,700 | 2,267,619 |
| Suncor Energy, Inc. | | 189,300 | 5,785,994 |
| Valero Energy Corp. | | 63,100 | 5,319,961 |
| | | | 35,656,561 |
|
| TOTAL ENERGY | | | 37,346,041 |
|
| FINANCIALS - 23.4% | | | |
| Banks - 9.3% | | | |
| Bank of America Corp. | | 471,200 | 15,469,497 |
| BB&T Corp. | | 79,767 | 4,113,584 |
| Citigroup, Inc. | | 118,400 | 8,810,144 |
| DNB ASA | | 103,000 | 1,812,420 |
| First Horizon National Corp. | | 97,900 | 1,566,400 |
| Huntington Bancshares, Inc. | | 193,700 | 2,628,509 |
| KeyCorp | | 201,600 | 3,771,936 |
| Wells Fargo & Co. | | 176,000 | 8,261,440 |
| | | | 46,433,930 |
| Capital Markets - 3.4% | | | |
| BlackRock, Inc. Class A | | 6,800 | 3,585,980 |
| Cboe Global Markets, Inc. | | 36,900 | 4,546,818 |
| E*TRADE Financial Corp. | | 24,500 | 1,044,190 |
| Intercontinental Exchange, Inc. | | 23,200 | 2,313,968 |
| Morgan Stanley | | 80,800 | 4,222,608 |
| Virtu Financial, Inc. Class A (b) | | 72,300 | 1,206,687 |
| | | | 16,920,251 |
| Consumer Finance - 3.8% | | | |
| Ally Financial, Inc. | | 79,600 | 2,549,588 |
| Capital One Financial Corp. | | 139,400 | 13,912,120 |
| Synchrony Financial | | 70,600 | 2,288,146 |
| | | | 18,749,854 |
| Diversified Financial Services - 2.4% | | | |
| Berkshire Hathaway, Inc. Class B (a) | | 54,457 | 12,221,785 |
| Insurance - 4.5% | | | |
| American International Group, Inc. | | 103,170 | 5,185,324 |
| Hartford Financial Services Group, Inc. | | 30,000 | 1,778,400 |
| Marsh & McLennan Companies, Inc. | | 16,900 | 1,890,434 |
| MetLife, Inc. | | 82,000 | 4,076,220 |
| The Travelers Companies, Inc. | | 40,100 | 5,277,962 |
| Willis Group Holdings PLC | | 21,000 | 4,437,090 |
| | | | 22,645,430 |
|
| TOTAL FINANCIALS | | | 116,971,250 |
|
| HEALTH CARE - 12.1% | | | |
| Biotechnology - 1.4% | | | |
| Biogen, Inc. (a) | | 3,700 | 994,745 |
| Ironwood Pharmaceuticals, Inc. Class A (a) | | 95,400 | 1,152,432 |
| Regeneron Pharmaceuticals, Inc. (a) | | 6,300 | 2,129,022 |
| Vertex Pharmaceuticals, Inc. (a) | | 11,500 | 2,611,075 |
| | | | 6,887,274 |
| Health Care Equipment & Supplies - 4.7% | | | |
| Abbott Laboratories | | 34,500 | 3,006,330 |
| Becton, Dickinson & Co. | | 14,600 | 4,017,628 |
| Boston Scientific Corp. (a) | | 63,900 | 2,675,493 |
| Danaher Corp. | | 33,800 | 5,437,406 |
| Envista Holdings Corp. (a) | | 62,700 | 1,855,293 |
| Medtronic PLC | | 43,220 | 4,989,317 |
| Zimmer Biomet Holdings, Inc. | | 11,700 | 1,730,430 |
| | | | 23,711,897 |
| Health Care Providers & Services - 1.8% | | | |
| Anthem, Inc. | | 13,700 | 3,634,336 |
| CVS Health Corp. | | 41,634 | 2,823,618 |
| Humana, Inc. | | 7,500 | 2,521,800 |
| | | | 8,979,754 |
| Life Sciences Tools & Services - 0.3% | | | |
| Thermo Fisher Scientific, Inc. | | 5,100 | 1,597,269 |
| Pharmaceuticals - 3.9% | | | |
| Johnson & Johnson | | 83,585 | 12,443,299 |
| Pfizer, Inc. | | 186,871 | 6,959,076 |
| | | | 19,402,375 |
|
| TOTAL HEALTH CARE | | | 60,578,569 |
|
| INDUSTRIALS - 9.8% | | | |
| Aerospace & Defense - 1.1% | | | |
| General Dynamics Corp. | | 8,544 | 1,498,959 |
| United Technologies Corp. | | 25,696 | 3,859,539 |
| | | | 5,358,498 |
| Air Freight & Logistics - 0.6% | | | |
| FedEx Corp. | | 22,000 | 3,182,080 |
| Airlines - 0.6% | | | |
| American Airlines Group, Inc. | | 115,918 | 3,111,239 |
| Construction & Engineering - 1.1% | | | |
| AECOM (a) | | 112,530 | 5,427,322 |
| Electrical Equipment - 0.5% | | | |
| Sensata Technologies, Inc. PLC (a) | | 48,986 | 2,315,568 |
| Industrial Conglomerates - 2.2% | | | |
| General Electric Co. | | 889,852 | 11,078,657 |
| Machinery - 0.1% | | | |
| Caterpillar, Inc. | | 3,600 | 472,860 |
| Marine - 0.3% | | | |
| A.P. Moller - Maersk A/S Series B | | 1,456 | 1,741,032 |
| Professional Services - 1.2% | | | |
| Nielsen Holdings PLC | | 284,478 | 5,803,351 |
| Road & Rail - 1.3% | | | |
| Norfolk Southern Corp. | | 30,058 | 6,258,376 |
| Trading Companies & Distributors - 0.8% | | | |
| HD Supply Holdings, Inc. (a) | | 102,299 | 4,167,661 |
|
| TOTAL INDUSTRIALS | | | 48,916,644 |
|
| INFORMATION TECHNOLOGY - 6.4% | | | |
| Communications Equipment - 0.6% | | | |
| CommScope Holding Co., Inc. (a) | | 118,500 | 1,443,923 |
| F5 Networks, Inc. (a) | | 11,300 | 1,379,956 |
| | | | 2,823,879 |
| Electronic Equipment & Components - 0.2% | | | |
| SYNNEX Corp. | | 7,200 | 991,872 |
| IT Services - 3.0% | | | |
| Amdocs Ltd. | | 33,150 | 2,385,143 |
| Capgemini SA | | 22,400 | 2,791,080 |
| Cognizant Technology Solutions Corp. Class A | | 43,100 | 2,645,478 |
| IBM Corp. | | 38,300 | 5,504,859 |
| Sabre Corp. | | 84,700 | 1,824,438 |
| | | | 15,150,998 |
| Semiconductors & Semiconductor Equipment - 1.2% | | | |
| Intel Corp. | | 91,200 | 5,830,416 |
| Software - 1.4% | | | |
| Nortonlifelock, Inc. | | 120,700 | 3,430,294 |
| SS&C Technologies Holdings, Inc. | | 60,200 | 3,793,202 |
| | | | 7,223,496 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 32,020,661 |
|
| MATERIALS - 3.6% | | | |
| Chemicals - 2.8% | | | |
| DuPont de Nemours, Inc. | | 80,247 | 4,107,041 |
| Nutrien Ltd. | | 39,100 | 1,669,003 |
| Olin Corp. | | 260,600 | 3,875,122 |
| The Chemours Co. LLC | | 128,200 | 1,778,134 |
| The Mosaic Co. | | 87,440 | 1,734,810 |
| Westlake Chemical Corp. | | 17,235 | 1,054,782 |
| | | | 14,218,892 |
| Containers & Packaging - 0.8% | | | |
| Crown Holdings, Inc. (a) | | 53,100 | 3,930,993 |
|
| TOTAL MATERIALS | | | 18,149,885 |
|
| REAL ESTATE - 5.3% | | | |
| Equity Real Estate Investment Trusts (REITs) - 5.0% | | | |
| Alexandria Real Estate Equities, Inc. | | 19,200 | 3,133,440 |
| American Homes 4 Rent Class A | | 76,000 | 2,077,080 |
| American Tower Corp. | | 10,700 | 2,479,618 |
| Corporate Office Properties Trust (SBI) | | 59,800 | 1,780,246 |
| Digital Realty Trust, Inc. | | 26,500 | 3,259,235 |
| Prologis, Inc. | | 59,600 | 5,535,648 |
| Store Capital Corp. | | 37,918 | 1,488,282 |
| Welltower, Inc. | | 43,100 | 3,659,621 |
| Weyerhaeuser Co. | | 53,700 | 1,554,615 |
| | | | 24,967,785 |
| Real Estate Management & Development - 0.3% | | | |
| Cushman & Wakefield PLC (a) | | 86,400 | 1,660,608 |
|
| TOTAL REAL ESTATE | | | 26,628,393 |
|
| UTILITIES - 6.9% | | | |
| Electric Utilities - 3.7% | | | |
| Edison International | | 64,600 | 4,945,130 |
| Entergy Corp. | | 33,200 | 4,366,464 |
| Exelon Corp. | | 102,100 | 4,858,939 |
| NextEra Energy, Inc. | | 15,810 | 4,240,242 |
| | | | 18,410,775 |
| Independent Power and Renewable Electricity Producers - 1.2% | | | |
| The AES Corp. | | 151,100 | 3,000,846 |
| Vistra Energy Corp. | | 143,100 | 3,222,612 |
| | | | 6,223,458 |
| Multi-Utilities - 2.0% | | | |
| Dominion Energy, Inc. | | 57,400 | 4,922,050 |
| Sempra Energy | | 30,150 | 4,843,296 |
| | | | 9,765,346 |
|
| TOTAL UTILITIES | | | 34,399,579 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $458,514,412) | | | 487,221,578 |
| | | Principal Amount | Value |
|
| U.S. Treasury Obligations - 0.0% | | | |
| U.S. Treasury Bills, yield at date of purchase 1.54% to 1.56% 2/27/20 to 3/12/20 (c) | | | |
| (Cost $159,773) | | 160,000 | 159,792 |
| | | Shares | Value |
|
| Money Market Funds - 2.9% | | | |
| Fidelity Cash Central Fund 1.58% (d) | | 13,394,301 | $13,396,980 |
| Fidelity Securities Lending Cash Central Fund 1.59% (d)(e) | | 1,131,787 | 1,131,900 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $14,528,650) | | | 14,528,880 |
| TOTAL INVESTMENT IN SECURITIES - 100.5% | | | |
| (Cost $473,202,835) | | | 501,910,250 |
| NET OTHER ASSETS (LIABILITIES) - (0.5)% | | | (2,626,254) |
| NET ASSETS - 100% | | | $499,283,996 |
| Futures Contracts | | | | | |
| | Number of contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/(Depreciation) |
| Purchased | | | | | |
| Equity Index Contracts | | | | | |
| CME E-mini Russell 1000 Value Index Contracts (United States) | 29 | March 2020 | $1,906,315 | $(43,942) | $(43,942) |
The notional amount of futures purchased as a percentage of Net Assets is 0.4%
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $159,792.
(d) Affiliated fund that is generally 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(e) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $602,706 |
| Fidelity Securities Lending Cash Central Fund | 11,762 |
| Total | $614,468 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations, if applicable. Amount for Fidelity Securities Lending Cash Central Fund 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.
Investment Valuation
The following is a summary of the inputs used, as of January 31, 2020, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Communication Services | $39,717,403 | $39,717,403 | $-- | $-- |
| Consumer Discretionary | 29,215,708 | 29,215,708 | -- | -- |
| Consumer Staples | 43,277,445 | 43,277,445 | -- | -- |
| Energy | 37,346,041 | 37,346,041 | -- | -- |
| Financials | 116,971,250 | 116,971,250 | -- | -- |
| Health Care | 60,578,569 | 60,578,569 | -- | -- |
| Industrials | 48,916,644 | 47,175,612 | 1,741,032 | -- |
| Information Technology | 32,020,661 | 32,020,661 | -- | -- |
| Materials | 18,149,885 | 18,149,885 | -- | -- |
| Real Estate | 26,628,393 | 26,628,393 | -- | -- |
| Utilities | 34,399,579 | 34,399,579 | -- | -- |
| U.S. Government and Government Agency Obligations | 159,792 | -- | 159,792 | -- |
| Money Market Funds | 14,528,880 | 14,528,880 | -- | -- |
| Total Investments in Securities: | $501,910,250 | $500,009,426 | $1,900,824 | $-- |
| Derivative Instruments: | | | | |
| Liabilities | | | | |
| Futures Contracts | $(43,942) | $(43,942) | $-- | $-- |
| Total Liabilities | $(43,942) | $(43,942) | $-- | $-- |
| Total Derivative Instruments: | $(43,942) | $(43,942) | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of January 31, 2020. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.
| Primary Risk Exposure / Derivative Type | Value |
| | Asset | Liability |
| Equity Risk | | |
| Futures Contracts(a) | $0 | $(43,942) |
| Total Equity Risk | 0 | (43,942) |
| Total Value of Derivatives | $0 | $(43,942) |
(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Schedule of Investments. In the Statement of Assets and Liabilities, the period end daily variation margin is included in receivable or payable for daily variation margin on futures contracts, and the net cumulative appreciation (depreciation) is included in Total accumulated earnings (loss).
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | January 31, 2020 |
| Assets | | |
Investment in securities, at value (including securities loaned of $1,144,934) — See accompanying schedule:
Unaffiliated issuers (cost $458,674,185) | $487,381,370 | |
| Fidelity Central Funds (cost $14,528,650) | 14,528,880 | |
| Total Investment in Securities (cost $473,202,835) | | $501,910,250 |
| Cash | | 43,929 |
| Receivable for investments sold | | 3,340,304 |
| Receivable for fund shares sold | | 90,280 |
| Dividends receivable | | 555,975 |
| Distributions receivable from Fidelity Central Funds | | 17,763 |
| Prepaid expenses | | 1,101 |
| Other receivables | | 17,332 |
| Total assets | | 505,976,934 |
| Liabilities | | |
| Payable for investments purchased | $3,367,371 | |
| Payable for fund shares redeemed | 355,366 | |
| Accrued management fee | 154,651 | |
| Distribution and service plan fees payable | 17,400 | |
| Payable for daily variation margin on futures contracts | 40,347 | |
| Other affiliated payables | 84,956 | |
| Other payables and accrued expenses | 58,947 | |
| Collateral on securities loaned | 1,131,900 | |
| Deferred dividend income | 1,482,000 | |
| Total liabilities | | 6,692,938 |
| Net Assets | | $499,283,996 |
| Net Assets consist of: | | |
| Paid in capital | | $473,210,890 |
| Total accumulated earnings (loss) | | 26,073,106 |
| Net Assets | | $499,283,996 |
| Net Asset Value and Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($25,576,497 ÷ 1,222,462 shares)(a) | | $20.92 |
| Maximum offering price per share (100/94.25 of $20.92) | | $22.20 |
| Class M: | | |
| Net Asset Value and redemption price per share ($10,385,344 ÷ 497,407 shares)(a) | | $20.88 |
| Maximum offering price per share (100/96.50 of $20.88) | | $21.64 |
| Class C: | | |
| Net Asset Value and offering price per share ($8,812,924 ÷ 431,933 shares)(a) | | $20.40 |
| Stock Selector Large Cap Value: | | |
| Net Asset Value, offering price and redemption price per share ($432,154,443 ÷ 20,470,940 shares) | | $21.11 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($9,450,285 ÷ 445,287 shares) | | $21.22 |
| Class Z: | | |
| Net Asset Value, offering price and redemption price per share ($12,904,503 ÷ 615,412 shares) | | $20.97 |
(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.
Statement of Operations
| | | Year ended January 31, 2020 |
| Investment Income | | |
| Dividends | | $18,954,593 |
| Interest | | 7,862 |
| Income from Fidelity Central Funds (including $11,762 from security lending) | | 614,468 |
| Total income | | 19,576,923 |
| Expenses | | |
| Management fee | | |
| Basic fee | $4,420,243 | |
| Performance adjustment | (979,840) | |
| Transfer agent fees | 1,429,722 | |
| Distribution and service plan fees | 196,695 | |
| Accounting and security lending fees | 283,870 | |
| Custodian fees and expenses | 30,609 | |
| Independent trustees' fees and expenses | 4,814 | |
| Registration fees | 86,008 | |
| Audit | 57,097 | |
| Legal | 5,710 | |
| Miscellaneous | 6,278 | |
| Total expenses before reductions | 5,541,206 | |
| Expense reductions | (57,858) | |
| Total expenses after reductions | | 5,483,348 |
| Net investment income (loss) | | 14,093,575 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 5,591,638 | |
| Redemptions in-kind with affiliated entities | 45,639,734 | |
| Fidelity Central Funds | 1 | |
| Foreign currency transactions | 1,949 | |
| Futures contracts | 1,750,885 | |
| Total net realized gain (loss) | | 52,984,207 |
| Change in net unrealized appreciation (depreciation) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 27,702,503 | |
| Assets and liabilities in foreign currencies | (109) | |
| Futures contracts | (43,942) | |
| Total change in net unrealized appreciation (depreciation) | | 27,658,452 |
| Net gain (loss) | | 80,642,659 |
| Net increase (decrease) in net assets resulting from operations | | $94,736,234 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $14,093,575 | $15,947,572 |
| Net realized gain (loss) | 52,984,207 | 48,774,750 |
| Change in net unrealized appreciation (depreciation) | 27,658,452 | (121,766,269) |
| Net increase (decrease) in net assets resulting from operations | 94,736,234 | (57,043,947) |
| Distributions to shareholders | (7,816,909) | (62,736,837) |
| Share transactions - net increase (decrease) | (537,512,895) | (87,164,437) |
| Total increase (decrease) in net assets | (450,593,570) | (206,945,221) |
| Net Assets | | |
| Beginning of period | 949,877,566 | 1,156,822,787 |
| End of period | $499,283,996 | $949,877,566 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Stock Selector Large Cap Value Fund Class A
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.80 | $21.26 | $18.63 | $15.37 | $16.41 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .29 | .26 | .25B | .19 | .15 |
| Net realized and unrealized gain (loss) | 2.14 | (1.45) | 2.54 | 3.27 | (1.03) |
| Total from investment operations | 2.43 | (1.19) | 2.79 | 3.46 | (.88) |
| Distributions from net investment income | (.31) | (.24) | (.16) | (.20) | (.16) |
| Distributions from net realized gain | – | (1.03) | – | – | – |
| Total distributions | (.31) | (1.27) | (.16) | (.20) | (.16) |
| Net asset value, end of period | $20.92 | $18.80 | $21.26 | $18.63 | $15.37 |
| Total ReturnC,D | 12.92% | (5.46)% | 15.02% | 22.48% | (5.40)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | .93% | .96% | 1.02% | 1.05% | 1.10% |
| Expenses net of fee waivers, if any | .93% | .96% | 1.02% | 1.05% | 1.10% |
| Expenses net of all reductions | .93% | .95% | 1.01% | 1.05% | 1.09% |
| Net investment income (loss) | 1.45% | 1.28% | 1.27%B | 1.10% | .90% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $25,576 | $25,204 | $27,297 | $31,054 | $24,201 |
| Portfolio turnover rateG | 68%H | 92% | 90% | 51% | 67% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .90%.
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 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 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.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Stock Selector Large Cap Value Fund Class M
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.77 | $21.24 | $18.61 | $15.36 | $16.40 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .23 | .19 | .19B | .13 | .10 |
| Net realized and unrealized gain (loss) | 2.13 | (1.44) | 2.54 | 3.26 | (1.03) |
| Total from investment operations | 2.36 | (1.25) | 2.73 | 3.39 | (.93) |
| Distributions from net investment income | (.25) | (.18) | (.10) | (.14) | (.11) |
| Distributions from net realized gain | – | (1.03) | – | – | – |
| Total distributions | (.25) | (1.22)C | (.10) | (.14) | (.11) |
| Net asset value, end of period | $20.88 | $18.77 | $21.24 | $18.61 | $15.36 |
| Total ReturnD,E | 12.59% | (5.78)% | 14.70% | 22.04% | (5.71)% |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | 1.24% | 1.28% | 1.34% | 1.39% | 1.42% |
| Expenses net of fee waivers, if any | 1.23% | 1.28% | 1.34% | 1.39% | 1.42% |
| Expenses net of all reductions | 1.23% | 1.27% | 1.33% | 1.39% | 1.41% |
| Net investment income (loss) | 1.15% | .96% | .95%B | .76% | .58% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $10,385 | $9,542 | $10,615 | $10,704 | $9,515 |
| Portfolio turnover rateH | 68%I | 92% | 90% | 51% | 67% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .58%.
C Total distributions of $1.22 per share is comprised of distributions from net investment income of $.183 and distributions from net realized gain of $1.032 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
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 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.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Stock Selector Large Cap Value Fund Class C
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.37 | $20.81 | $18.25 | $15.09 | $16.18 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .12 | .09 | .08B | .05 | .01 |
| Net realized and unrealized gain (loss) | 2.08 | (1.42) | 2.49 | 3.18 | (1.00) |
| Total from investment operations | 2.20 | (1.33) | 2.57 | 3.23 | (.99) |
| Distributions from net investment income | (.17) | (.08) | (.01) | (.07) | (.10) |
| Distributions from net realized gain | – | (1.03) | – | – | – |
| Total distributions | (.17) | (1.11) | (.01) | (.07) | (.10) |
| Net asset value, end of period | $20.40 | $18.37 | $20.81 | $18.25 | $15.09 |
| Total ReturnC,D | 11.96% | (6.26)% | 14.07% | 21.43% | (6.13)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | 1.78% | 1.80% | 1.86% | 1.88% | 1.93% |
| Expenses net of fee waivers, if any | 1.77% | 1.80% | 1.85% | 1.88% | 1.93% |
| Expenses net of all reductions | 1.77% | 1.79% | 1.85% | 1.87% | 1.93% |
| Net investment income (loss) | .61% | .44% | .43%B | .27% | .07% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $8,813 | $9,813 | $10,703 | $10,802 | $8,956 |
| Portfolio turnover rateG | 68%H | 92% | 90% | 51% | 67% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .06%.
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 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 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.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Stock Selector Large Cap Value Fund
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.94 | $21.41 | $18.76 | $15.47 | $16.51 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .35 | .32 | .31B | .24 | .20 |
| Net realized and unrealized gain (loss) | 2.16 | (1.46) | 2.57 | 3.29 | (1.03) |
| Total from investment operations | 2.51 | (1.14) | 2.88 | 3.53 | (.83) |
| Distributions from net investment income | (.34) | (.29) | (.23) | (.24) | (.21) |
| Distributions from net realized gain | – | (1.03) | – | – | – |
| Total distributions | (.34) | (1.33)C | (.23) | (.24) | (.21) |
| Net asset value, end of period | $21.11 | $18.94 | $21.41 | $18.76 | $15.47 |
| Total ReturnD | 13.24% | (5.20)% | 15.39% | 22.82% | (5.10)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | .64% | .67% | .73% | .77% | .81% |
| Expenses net of fee waivers, if any | .64% | .67% | .73% | .77% | .81% |
| Expenses net of all reductions | .64% | .66% | .72% | .76% | .80% |
| Net investment income (loss) | 1.74% | 1.57% | 1.56%B | 1.38% | 1.19% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $432,154 | $806,342 | $989,001 | $703,722 | $644,182 |
| Portfolio turnover rateG | 68%H | 92% | 90% | 51% | 67% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.19%.
C Total distributions of $1.33 per share is comprised of distributions from net investment income of $.294 and distributions from net realized gain of $1.032 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 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.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Stock Selector Large Cap Value Fund Class I
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $18.82 | $21.28 | $18.66 | $15.40 | $16.44 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .34 | .31 | .30B | .23 | .20 |
| Net realized and unrealized gain (loss) | 2.14 | (1.45) | 2.55 | 3.27 | (1.04) |
| Total from investment operations | 2.48 | (1.14) | 2.85 | 3.50 | (.84) |
| Distributions from net investment income | (.08) | (.29) | (.23) | (.24) | (.20) |
| Distributions from net realized gain | – | (1.03) | – | – | – |
| Total distributions | (.08) | (1.32) | (.23) | (.24) | (.20) |
| Net asset value, end of period | $21.22 | $18.82 | $21.28 | $18.66 | $15.40 |
| Total ReturnC | 13.20% | (5.20)% | 15.33% | 22.72% | (5.14)% |
| Ratios to Average Net AssetsD,E | | | | | |
| Expenses before reductions | .67% | .69% | .76% | .84% | .82% |
| Expenses net of fee waivers, if any | .66% | .69% | .76% | .84% | .82% |
| Expenses net of all reductions | .66% | .68% | .75% | .84% | .81% |
| Net investment income (loss) | 1.72% | 1.55% | 1.53%B | 1.30% | 1.18% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $9,450 | $98,119 | $118,319 | $11,273 | $6,164 |
| Portfolio turnover rateF | 68%G | 92% | 90% | 51% | 67% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.16%.
C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
D 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.
E 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.
F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
G Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Stock Selector Large Cap Value Fund Class Z
| Years ended January 31, | 2020 | 2019 | 2018 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $18.84 | $21.30 | $18.64 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .38 | .34 | .34C |
| Net realized and unrealized gain (loss) | 2.14 | (1.45) | 2.57 |
| Total from investment operations | 2.52 | (1.11) | 2.91 |
| Distributions from net investment income | (.39) | (.32) | (.25) |
| Distributions from net realized gain | – | (1.03) | – |
| Total distributions | (.39) | (1.35) | (.25) |
| Net asset value, end of period | $20.97 | $18.84 | $21.30 |
| Total ReturnD | 13.38% | (5.04)% | 15.65% |
| Ratios to Average Net AssetsE,F | | | |
| Expenses before reductions | .52% | .55% | .60% |
| Expenses net of fee waivers, if any | .52% | .55% | .60% |
| Expenses net of all reductions | .51% | .54% | .59% |
| Net investment income (loss) | 1.86% | 1.70% | 1.68%C |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $12,905 | $858 | $888 |
| Portfolio turnover rateG | 68%H | 92% | 90% |
A For the period February 1, 2017 (commencement of sale of shares) to January 31, 2018.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.07 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.31%.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 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.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended January 31, 2020
1. Organization.
Fidelity Stock Selector Large Cap Value Fund (the Fund) is a fund of Fidelity Devonshire 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 M, Class C, Stock Selector Large Cap Value, Class I and Class Z 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. Effective March 1, 2019, Class C shares will automatically convert to Class A shares after a holding period of ten years from the initial date of purchase, with certain exceptions.
Effective January 1, 2020:
Investment advisers Fidelity Investments Money Management, Inc., FMR Co., Inc., and Fidelity SelectCo, LLC, merged with and into Fidelity Management & Research Company. In connection with the merger transactions, the resulting, merged investment adviser was then redomiciled from Massachusetts to Delaware, changed its corporate structure from a corporation to a limited liability company, and changed its name to "Fidelity Management & Research Company LLC".
Broker-dealer Fidelity Distributors Corporation merged with and into Fidelity Investments Institutional Services Company, Inc. ("FIISC"). FIISC was then redomiciled from Massachusetts to Delaware, changed its corporate structure from a corporation to a limited liability company, and changed its name to "Fidelity Distributors Company LLC".
Fidelity Investments Institutional Operations Company, Inc. converted from a Massachusetts corporation to a Massachusetts LLC, and changed its name to "Fidelity Investments Institutional Operations Company LLC".
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser 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 the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date ranged from less than .005% to .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment 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 Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
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)
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 a third party pricing vendor 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 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 may be used and would be categorized as Level 2 in the hierarchy. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
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 January 31, 2020 is included at the end of the Fund's Schedule of Investments.
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 rates 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 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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. A large, non-recurring dividend with a payable date of January 31, 2020 and an ex-date of February 3, 2020 is presented in the Statement of Assets and Liabilities as "Deferred dividend income". Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily 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. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. 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 U.S. Federal income taxes is required. As of January 31, 2020, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The 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.
Distributions are declared and recorded on the ex-dividend date. Income 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. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, market discount, redemptions in kind and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
| Gross unrealized appreciation | $53,336,729 |
| Gross unrealized depreciation | (29,681,523) |
| Net unrealized appreciation (depreciation) | $23,655,206 |
| Tax Cost | $478,255,044 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $2,418,008 |
| Net unrealized appreciation (depreciation) on securities and other investments | $23,655,097 |
The tax character of distributions paid was as follows:
| | January 31, 2020 | January 31, 2019 |
| Ordinary Income | $7,816,909 | $ 19,901,690 |
| Long-term Capital Gains | – | 42,835,147 |
| Total | $7,816,909 | $ 62,736,837 |
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment.
|
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin on futures contracts in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on futures contracts during the period is presented in the Statement of Operations.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts". The notional amount at value reflects each contract's exposure to the underlying instrument or index at period end and is representative of volume of activity during the period. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $536,888,104 and $592,700,694, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company LLC (the investment adviser) 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 .24% during the period. The group fee rate is based upon the monthly average net assets of a group of registered investment companies with which the investment adviser has management contracts. 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 Stock Selector Large Cap Value as compared to its benchmark index, the Russell 1000 Value Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .42% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
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 Company LLC (FDC), an affiliate of the investment adviser, 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:
| | Distribution Fee | Service Fee | Total Fees | Retained by FDC |
| Class A | -% | .25% | $62,384 | $1,189 |
| Class M | .25% | .25% | 49,950 | 484 |
| Class C | .75% | .25% | 84,361 | 8,433 |
| | | | $196,695 | $10,106 |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained by FDC |
| Class A | $5,983 |
| Class M | 1,326 |
| Class C(a) | 968 |
| | $8,277 |
(a) When 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 LLC (FIIOC), an affiliate of the investment adviser, 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, except for Class Z. FIIOC receives an asset-based fee of Class Z'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 Class-Level Average Net Assets |
| Class A | $52,236 | .21 |
| Class M | 26,069 | .26 |
| Class C | 24,976 | .30 |
| Stock Selector Large Cap Value | 1,184,900 | .17 |
| Class I | 138,859 | .19 |
| Class Z | 2,682 | .04 |
| | $1,429,722 | |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Prior to April 1, 2019, FSC had a separate agreement with the Fund for administration of the security lending program, based on the number and duration of lending transactions. For the period, the total fees paid for accounting and administration of securities lending were equivalent to the following annual rates:
| | % of Average Net Assets |
| Fidelity Stock Selector Large Cap Value Fund | .03 |
Brokerage Commissions. A portion of portfolio transactions were placed with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were as follows:
| | Amount |
| Fidelity Stock Selector Large Cap Value Fund | $15,492 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Affiliated Redemptions In-Kind. During the period, 22,911,566 shares of the Fund were redeemed in-kind for investments and cash with a value of $463,341,627. The net realized gain of $45,639,734 on investments delivered through in-kind redemptions is included in the accompanying Statement of Operations. The amount of the in-kind redemptions is included in share transactions in the accompanying Statement of Changes in Net Assets as well as the Notes to Financial Statements. The Fund recognized no gain or loss for federal income tax purposes.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $3,446.
7. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser 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 $2,217 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. For equity securities, lending agents are used, including National Financial Services (NFS), an affiliate of the Fund. Pursuant to a securities lending agreement, NFS will receive a fee, which is capped at 9.9% of daily lending revenue, for its services as lending agent. The Fund may lend securities to certain qualified borrowers, including NFS. 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. 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. At period end, there were no security loans outstanding with NFS, as affiliated borrower. Total fees paid by the Fund to NFS, as lending agent, amounted to $639. 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, and includes $59 from securities loaned to NFS, as affiliated borrower.
9. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $45,761 for the period.
In addition, during the period the investment adviser or an affiliate reimbursed and/or waived a portion of fund-level operating expenses in the amount of $4,647.
In addition, during the period, the investment adviser or an affiliate reimbursed the Fund $7,450 for an operational error which is included in the accompanying Statement of Operations.
10. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
January 31, 2020 | Year ended
January 31, 2019 |
| Distributions to shareholders | | |
| Class A | $376,526 | $1,484,646 |
| Class M | 124,103 | 591,114 |
| Class C | 73,576 | 493,332 |
| Stock Selector Large Cap Value | 6,974,541 | 53,627,596 |
| Class I | 38,278 | 6,488,440 |
| Class Z | 229,885 | 51,709 |
| Total | $7,816,909 | $62,736,837 |
11. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended January 31, 2020 | Year ended January 31, 2019 | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Class A | | | | |
| Shares sold | 272,583 | 234,115 | $5,444,751 | $4,439,388 |
| Reinvestment of distributions | 16,942 | 76,506 | 356,457 | 1,405,420 |
| Shares redeemed | (407,710) | (253,896) | (8,121,788) | (5,115,380) |
| Net increase (decrease) | (118,185) | 56,725 | $(2,320,580) | $729,428 |
| Class M | | | | |
| Shares sold | 52,572 | 62,410 | $1,061,174 | $1,246,554 |
| Reinvestment of distributions | 5,893 | 32,124 | 123,762 | 589,481 |
| Shares redeemed | (69,435) | (86,013) | (1,393,986) | (1,706,074) |
| Net increase (decrease) | (10,970) | 8,521 | $(209,050) | $129,961 |
| Class C | | | | |
| Shares sold | 117,640 | 121,071 | $2,317,618 | $2,229,406 |
| Reinvestment of distributions | 3,552 | 27,181 | 72,960 | 488,438 |
| Shares redeemed | (223,436) | (128,443) | (4,307,137) | (2,505,335) |
| Net increase (decrease) | (102,244) | 19,809 | $(1,916,559) | $212,509 |
| Stock Selector Large Cap Value | | | | |
| Shares sold | 3,286,805 | 4,057,401 | $65,276,805 | $79,972,379 |
| Reinvestment of distributions | 312,906 | 2,830,522 | 6,639,858 | 52,364,656 |
| Shares redeemed | (25,706,426)(a) | (10,510,704) | (519,914,728)(a) | (212,617,692) |
| Net increase (decrease) | (22,106,715) | (3,622,781) | $(447,998,065) | $(80,280,657) |
| Class I | | | | |
| Shares sold | 584,249 | 736,639 | $11,412,152 | $14,368,319 |
| Reinvestment of distributions | 871 | 335,385 | 18,584 | 6,164,368 |
| Shares redeemed | (5,353,625)(a) | (1,417,982) | (107,597,098)(a) | (28,541,232) |
| Net increase (decrease) | (4,768,505) | (345,958) | $(96,166,362) | $(8,008,545) |
| Class Z | | | | |
| Shares sold | 614,598 | 84,527 | $11,995,991 | $1,680,407 |
| Reinvestment of distributions | 10,810 | 2,600 | 227,875 | 47,820 |
| Shares redeemed | (55,521) | (83,298) | (1,126,145) | (1,675,360) |
| Net increase (decrease) | 569,887 | 3,829 | $11,097,721 | $52,867 |
(a) Amount includes in-kind redemptions (see the Affiliated Redemptions In-Kind note for additional details).
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.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Fidelity Devonshire Trust and Shareholders of Fidelity Stock Selector Large Cap Value Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Fidelity Stock Selector Large Cap Value Fund (one of the funds constituting Fidelity Devonshire Trust, referred to hereafter as the “Fund”) as of January 31, 2020, the related statement of operations for the year ended January 31, 2020, the statement of changes in net assets for each of the two years in the period ended January 31, 2020, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of January 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended January 31, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of January 31, 2020 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 12, 2020
We have served as the auditor of one or more investment companies in the Fidelity group of funds since 1932.
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Michael E. Wiley, each of the Trustees oversees 302 funds. Mr. Wiley oversees 199 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the Investment Company Act of 1940 (1940 Act)) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544 if you’re an individual investing directly with Fidelity, call 1-800-835-5092 if you’re a plan sponsor or participant with Fidelity as your recordkeeper or call 1-877-208-0098 on institutional accounts or if you’re an advisor or invest through one.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and other equity funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey is an Overseer Emeritus for the Boston Symphony Orchestra, a Director of Artis-Naples, and a Trustee of Brewster Academy in Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-2018), Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks served as Chief Operating Officer and as a member of the Board of The Depository Trust & Clearing Corporation (financial markets infrastructure), President, Chief Operating Officer and a member of the Board of The Depository Trust Company (DTC), President and a member of the Board of the National Securities Clearing Corporation (NSCC), Chief Executive Officer and a member of the Board of the Government Securities Clearing Corporation and Chief Executive Officer and a member of the Board of the Mortgage-Backed Securities Clearing Corporation. Mr. Dirks currently serves as a member of the Finance Committee (2016-present) and Board (2017-present) and is Treasurer (2018-present) of the Asolo Repertory Theatre.
Donald F. Donahue (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Donahue also serves as Trustee of other Fidelity® funds. Mr. Donahue serves as President and Chief Executive Officer of Miranda Partners, LLC (risk consulting for the financial services industry, 2012-present). Previously, Mr. Donahue served as Chief Executive Officer (2006-2012), Chief Operating Officer (2003-2006) and Managing Director, Customer Marketing and Development (1999-2003) of The Depository Trust & Clearing Corporation (financial markets infrastructure). Mr. Donahue currently serves as a member (2007-present) and Co-Chairman (2016-present) of the Board of United Way of New York, a member of the Board of NYC Leadership Academy (2012-present) and a member of the Board of Advisors of Ripple Labs, Inc. (financial services, 2015-present). Mr. Donahue previously served as a member of the Advisory Board of certain Fidelity® funds (2015-2018).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Previously, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity), Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail), Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005) and Chairman (2014-2017) and a member of the Board (2010-2017) of Dave & Buster’s Entertainment, Inc. (restaurant and entertainment complexes). Mr. Lacy currently serves as a member of the Board of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present), Trustee of the California Chapter of The Nature Conservancy (2015-present) and a member of the Board of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as Chair of the Board of Governors, State University System of Florida (2013-present) and is a member of the Council on Foreign Relations (1994-present). He is also a member and has in the past served as Chairman of the Board of Directors of Artis-Naples (2012-present). Previously, Mr. Lautenbach served as a member and then Lead Director of the Board of Directors of Eaton Corporation (diversified industrial, 1997-2016). He was also a Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010); as well as Director of Sony Corporation (2006-2007). In addition, Mr. Lautenbach had a 30-year career with IBM (technology company), during which time he served as Senior Vice President and as a member of the Corporate Executive Committee (1968-1998).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Independent Directors Council Governing Council (2015-present). Previously, Mr. Mauriello served as a member of the Board of XL Group plc. (global insurance and re-insurance, 2006-2018).
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Previously, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments and a member of Scudder, Stevens & Clark and Scudder Kemper Investments. Ms. Small previously served as a member of the Board (2009-2019) and Chair of the Investment Committee (2010-2019) of the Teagle Foundation and a member of the Investment Committee of the Berkshire Taconic Community Foundation (2008-2019).
Garnett A. Smith (1947)
Year of Election or Appointment: 2018
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to his retirement, Mr. Smith served as Chairman and Chief Executive Officer (1990-1997) and President (1986-1990) of Inbrand Corp. (manufacturer of personal absorbent products). Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank (now Bank of America). Mr. Smith previously served as a member of the Advisory Board of certain Fidelity® funds (2012-2013).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions). Mr. Thomas currently serves as Non-Executive Chairman of the Board of Fortune Brands Home and Security (home and security products, 2011-present), and a member of the Board (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication).
Michael E. Wiley (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Wiley also serves as Trustee or a member of the Advisory Board of other Fidelity® funds. Previously, Mr. Wiley served as Chairman, President and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004). Mr. Wiley currently serves as a member of the Board of High Point Resources (exploration and production, 2005-present). Previously, Mr. Wiley served as a member of the Board of Andeavor Corporation (independent oil refiner and marketer, 2005-2018) and a member of the Board of Andeavor Logistics LP (natural resources logistics, 2015-2018).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for a Member of the Advisory Board (if any) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Vicki L. Fuller (1957)
Year of Election or Appointment: 2018
Member of the Advisory Board
Ms. Fuller also serves as a member of the Advisory Board of other Fidelity® funds. Previously, Ms. Fuller served as Chief Investment Officer of the New York State Common Retirement Fund (2012-2018) and held a variety of positions at AllianceBernstein L.P. (global asset management, 1985-2012), including Managing Director (2006-2012) and Senior Vice President and Senior Portfolio Manager (2001-2006). Ms. Fuller currently serves as a member of the Board, Audit Committee and Nominating and Governance Committee of The Williams Companies, Inc. (natural gas infrastructure, 2018-present) and as a member of the Board of Treliant, LLC (consulting, 2019-present).
Patricia L. Kampling (1959)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Kampling also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Kampling served as Chairman of the Board and Chief Executive Officer (2012-2019), President and Chief Operating Officer (2011-2012) and Executive Vice President and Chief Financial Officer (2010-2011) of Alliant Energy Corporation. Ms. Kampling currently serves as a member of the Board, Compensation Committee and Executive Committee and as Chair of the Audit Committee of Briggs & Stratton Corporation (manufacturing, 2011-present) and as a member of the Board, Audit, Finance and Risk Committee and Safety, Environmental, Technology and Operations Committee of American Water Works Company, Inc. (utilities company, 2019-present). In addition, Ms. Kampling currently serves as a member of the Board of the Nature Conservancy, Wisconsin Chapter (2019-present). Previously, Ms. Kampling served as a member of the Board of Interstate Power and Light Company (2012-2019) and Wisconsin Power and Light Company (2012-2019) (each a subsidiary of Alliant Energy Corporation) and as a member of the Board and Workforce Development Committee of the Business Roundtable (2018-2019).
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of Fidelity Management & Research Company LLC (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served as Vice Chairman and a Director of FMR Co., Inc. (investment adviser firm) and on the Special Olympics International Board of Directors (1997-2006).
Susan Tomasky (1953)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Tomasky also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Tomasky served in various executive officer positions at American Electric Power Company, Inc. (1998-2011), including most recently as President of AEP Transmission (2007-2011). Ms. Tomasky currently serves as a member of the Board and Sustainability Committee and as Chair of the Audit Committee of Marathon Petroleum Corporation (2018-present) and as a member of the Board, Corporate Governance Committee and Organization and Compensation Committee and as Chair of the Audit Committee of Public Service Enterprise Group, Inc. (utilities company, 2012-present). In addition, Ms. Tomasky currently serves as a member of the Board of the Columbus Regional Airport Authority (2007-present), as a member of the Board of the Royal Shakespeare Company – America (2009-present), as a member of the Board of the Columbus Association for the Performing Arts (2011-present) and as a member of the Board of Kenyon College (2016-present). Previously, Ms. Tomasky served as a member of the Board (2011-2019) and as Lead Independent Director (2015-2018) of Andeavor Corporation (previously Tesoro Corporation) (independent oil refiner and marketer) and as a member of the Board of Summit Midstream Partners LP (energy, 2012-2018).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2017
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer (2012-present) and Senior Vice President (2014-present) of FMR LLC (diversified financial services company) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as AML Officer of certain funds (2017-2019), as AML Officer of the funds (2012-2016), and Vice President (2007-2014) and Deputy Anti-Money Laundering Officer (2007-2012) of FMR LLC.
Craig S. Brown (1977)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Brown also serves as Assistant Treasurer of other funds. Mr. Brown is an employee of Fidelity Investments (2013-present).
John J. Burke III (1964)
Year of Election or Appointment: 2018
Chief Financial Officer
Mr. Burke also serves as Chief Financial Officer of other funds. Mr. Burke serves as Head of Investment Operations for Fidelity Fund and Investment Operations (2018-present) and is an employee of Fidelity Investments (1998-present). Previously Mr. Burke served as head of Asset Management Investment Operations (2012-2018).
William C. Coffey (1969)
Year of Election or Appointment: 2019
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Secretary and CLO of certain funds (2018-2019); CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2018-2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2018-2019); CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2018-2019); and Assistant Secretary of certain funds (2009-2018).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2018
Vice President
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Co-Head of Equity (2018-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Executive Vice President of Fidelity SelectCo, LLC (2019), Head of Global Equity Research (2016-2018), Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015) and as a Director of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2017).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Laura M. Del Prato (1964)
Year of Election or Appointment: 2018
Assistant Treasurer
Ms. Del Prato also serves as an officer of other funds. Ms. Del Prato is an employee of Fidelity Investments (2017-present). Prior to joining Fidelity Investments, Ms. Del Prato served as a Managing Director and Treasurer of the JPMorgan Mutual Funds (2014-2017). Prior to JPMorgan, Ms. Del Prato served as a partner at Cohen Fund Audit Services (accounting firm, 2012-2013) and KPMG LLP (accounting firm, 2004-2012).
Colm A. Hogan (1973)
Year of Election or Appointment: 2020
Assistant Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2005-present). Previously, Mr. Hogan served as Deputy Treasurer of certain Fidelity® funds (2016-2020) and Assistant Treasurer of certain Fidelity® funds (2016-2018).
Pamela R. Holding (1964)
Year of Election or Appointment: 2018
Vice President
Ms. Holding also serves as Vice President of other funds. Ms. Holding serves as Co-Head of Equity (2018-present) and is an employee of Fidelity Investments (2013-present). Previously, Ms. Holding served as Executive Vice President of Fidelity SelectCo, LLC (2019) and as Chief Investment Officer of Fidelity Institutional Asset Management (2013-2018).
Cynthia Lo Bessette (1969)
Year of Election or Appointment: 2019
Secretary and Chief Legal Officer (CLO)
Ms. Lo Bessette also serves as an officer of other funds. Ms. Lo Bessette serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company LLC (investment adviser firm, 2019-present); and CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2019-present). She is a Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2019-present), and is an employee of Fidelity Investments. Previously, Ms. Lo Bessette served as CLO, Secretary, and Senior Vice President of FMR Co., Inc. (investment adviser firm, 2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2019). Prior to joining Fidelity Investments, Ms. Lo Bessette was Executive Vice President, General Counsel (2016-2019) and Senior Vice President, Deputy General Counsel (2015-2016) of OppenheimerFunds (investment management company) and Deputy Chief Legal Officer (2013-2015) of Jennison Associates LLC (investment adviser firm).
Chris Maher (1972)
Year of Election or Appointment: 2020
Deputy Treasurer
Mr. Maher also serves as an officer of other funds. Mr. Maher serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), and is an employee of Fidelity Investments (2008-present). Previously, Mr. Maher served as Assistant Treasurer of certain funds (2013-2020); Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company LLC (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Compliance Officer of FMR Co., Inc. (investment adviser firm, 2016-2019), as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. Ms. Smith serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), is an employee of Fidelity Investments (2009-present), and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Assistant Treasurer (2013-2019) and Deputy Treasurer (2013-2016) of certain Fidelity® funds.
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche LLP (accounting firm, 2005-2013).
Jim Wegmann (1979)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Wegmann also serves as Assistant Treasurer of other funds. Mr. Wegmann is an employee of Fidelity Investments (2011-present).
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 (August 1, 2019 to January 31, 2020).
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. 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. 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.
| | Annualized Expense Ratio-A | Beginning
Account Value
August 1, 2019 | Ending
Account Value
January 31, 2020 | Expenses Paid
During Period-B
August 1, 2019
to January 31, 2020 |
| Class A | .92% | | | |
| Actual | | $1,000.00 | $1,050.40 | $4.75 |
| Hypothetical-C | | $1,000.00 | $1,020.57 | $4.69 |
| Class M | 1.22% | | | |
| Actual | | $1,000.00 | $1,049.30 | $6.30 |
| Hypothetical-C | | $1,000.00 | $1,019.06 | $6.21 |
| Class C | 1.76% | | | |
| Actual | | $1,000.00 | $1,046.20 | $9.08 |
| Hypothetical-C | | $1,000.00 | $1,016.33 | $8.94 |
| Stock Selector Large Cap Value | .63% | | | |
| Actual | | $1,000.00 | $1,052.40 | $3.26 |
| Hypothetical-C | | $1,000.00 | $1,022.03 | $3.21 |
| Class I | .64% | | | |
| Actual | | $1,000.00 | $1,052.00 | $3.31 |
| Hypothetical-C | | $1,000.00 | $1,021.98 | $3.26 |
| Class Z | .52% | | | |
| Actual | | $1,000.00 | $1,052.70 | $2.69 |
| Hypothetical-C | | $1,000.00 | $1,022.58 | $2.65 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The fund hereby designates as a capital gain dividend with respect to the taxable year ended January 31, 2020, $2,653,738, or, if subsequently determined to be different, the net capital gain of such year.
Class A, Class M, Class C, Stock Selector Large Cap Value, Class I, and Class Z designate 100% of the dividends distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Class A, Class M, Class C, Stock Selector Large Cap Value, Class I, and Class Z designate 100% of the dividends distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2021 of amounts for use in preparing 2020 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Stock Selector Large Cap Value Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company LLC (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. FMR and the sub-advisers are referred to herein as the Investment Advisers. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
Approval of Amended and Restated Advisory Contracts. At its November 2019 meeting, the Board unanimously determined to approve an amended and restated management contract and sub-advisory agreements (Amended and Restated Contracts) for a stub period of January 1, 2020 through January 31, 2020 in connection with a consolidation of certain of Fidelity's advisory businesses. The Board considered that, on or about January 1, 2020, FMR Co., Inc. (FMRC) expected to merge with and into FMR and, after the merger, FMR expected to redomicile as a Delaware limited liability company. The Board also approved the termination of the sub-advisory agreement with FMRC upon the completion of the merger. The Board noted that references to FMR in the Amended and Restated Contracts would be updated to reflect FMR's new form of organization and domicile and considered that the definition of "group assets" for purposes of the fund's group fee would be modified to avoid double-counting assets once the reorganization is complete. The Board also noted Fidelity's assurance that neither the planned consolidation nor the Amended and Restated Contracts will change the investment processes, the level or nature of services provided, the resources and personnel allocated, trading and compliance operations, or any fees paid by the fund.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to review matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through joint ad hoc committees to discuss certain matters relevant to all of the Fidelity funds.
At its January 2020 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services provided by and the profits realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and are realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value and convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information over the Internet and through telephone representatives, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
The Board noted that it and the boards of certain other Fidelity funds had formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to Fidelity's investment research process, which includes meetings with management of issuers of securities in which the funds invest, and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and ETFs with innovative structures, strategies and pricing and making other enhancements to meet client needs; (iv) launching new share classes of existing funds; (v) eliminating purchase minimums and broadening eligibility requirements for certain funds and share classes; (vi) reducing management fees and total expenses for certain target date funds and index funds; (vii) lowering expense caps for certain existing funds and classes, and converting certain voluntary expense caps to contractual caps, to reduce expenses borne by shareholders; (viii) rationalizing product lines and gaining increased efficiencies from fund mergers, liquidations, and share class consolidations; (ix) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; and (x) continuing to implement enhancements to further strengthen Fidelity's product line to increase investors' probability of success in achieving their investment goals, including retirement income goals.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history. The Board noted that there was a portfolio management change for the fund in April 2018. The Board will continue to monitor closely the fund's performance, taking into account the portfolio management change.
The Board took into account discussions that occur at Board meetings throughout the year with representatives of the Investment Advisers about fund investment performance. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund for different time periods, measured against an appropriate securities market index (benchmark index) and a peer group of funds with similar objectives (peer group), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods ended June 30, 2019, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.
Fidelity Stock Selector Large Cap Value Fund
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period (a rolling 36-month period) exceeds, or is exceeded by, a securities index, thus leading to a performance adjustment for the same period. The Board noted that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior long-term performance for the fund's shareholders and helps to more closely align the interests of FMR and the shareholders of the fund.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable investment mandates. Combining Lipper investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods ended June 30 (December 31 for periods prior to 2018) shown in basis points (BP) in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment, relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Sized Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure without taking into account performance adjustments, if any. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked and the impact of the fund's performance adjustment, is also included in the chart and was considered by the Board.
Fidelity Stock Selector Large Cap Value Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for the 12-month period ended June 30, 2019. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
The Board noted that it and the boards of other Fidelity funds formed an ad hoc Committee on Group Fee, which meets periodically, to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board noted the impact of the fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees or reimburse expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each of Class A, Class C, Class I, Class Z, and the retail class ranked below the competitive median for the 12-month period ended June 30, 2019 and the total expense ratio of Class M ranked above the competitive median for the 12-month period ended June 30, 2019. The Board considered that, in general, various factors can affect total expense ratios. The Board noted that the total expense ratio of Class M was above the competitive median primarily because of higher 12b-1 fees on Class M as compared to most competitor funds. Class M has a higher 12b-1 fee, but a lower front-end sales charge, than traditionally priced front-end sales charge classes. The Board considered that Class M is primarily sold load-waived to retirement plans and intermediary wrap programs where its 0.50% 12b-1 fee is comparable to competing no-load, higher 12b-1 fee classes designed specifically for retirement plans and wrap programs. The Board noted that, when compared with competitor funds that charge a 0.50% 12b-1 fee, the total expense ratio of Class M is below median. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b-1 fee structure, and that the multiple structures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expense ratios of the classes vary primarily by the level of their 12b-1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted that a joint ad hoc committee created by it and the boards of other Fidelity funds periodically reviews and compares Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds and also noted the most recent findings of the committee. The Board noted that the committee's review included a consideration of the differences in services provided, fees charged, and costs incurred, as well as competition in the markets serving the different categories of clients.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationships with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies and the full Board approves such changes.
PricewaterhouseCoopers LLP (PwC), auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and potential indirect benefits such businesses may have received as a result of their association with Fidelity's mutual fund business (i.e., fall-out benefits) as well as cases where Fidelity's affiliates may benefit from the funds' business. The Board noted that changes to fall-out benefits year-over-year reflect business developments at Fidelity's various businesses. The Board considered that a joint ad hoc committee created by it and the boards of other Fidelity funds had recently been established, and met periodically, to evaluate potential fall-out benefits (PFOB Committee). The Board noted that the PFOB Committee, among other things: (i) discussed the legal framework surrounding potential fall-out benefits; (ii) reviewed the Board's responsibilities and approach to potential fall-out benefits; and (iii) reviewed practices employed by competitor funds regarding the review of potential fall-out benefits.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund, including the conclusions of the PFOB Committee, and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that a committee (the Economies of Scale Committee) created by it and the boards of other Fidelity funds periodically analyzes whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total "group assets" increase, and for higher group fee rates as total "group assets" decrease ("group assets" as defined in the management contract). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as "group assets" increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' advisory contracts, the Board requested and received additional information on certain topics, including: (i) fund flow and performance trends, in particular the underperformance of certain funds and strategies, and Fidelity's long-term strategies for certain funds; (ii) consideration of performance fees for additional funds; (iii) changes in Fidelity's non-fund businesses and the impact of such changes on the funds; (iv) metrics for evaluating index fund and ETF performance and information about ETF trading characteristics; (v) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (vi) the expense structures for different funds and classes; (vii) information regarding other accounts managed by Fidelity, including collective investment trusts and separately managed accounts; and (viii) Fidelity's philosophies and strategies for evaluating funds and classes with lower or declining asset levels.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee arrangements are fair and reasonable, and that the fund's Amended and Restated Contracts should be approved and the fund's Advisory Contracts should be renewed.
LCV-ANN-0320
1.900194.110
Fidelity® Mid Cap Value Fund
Annual Report
January 31, 2020
Includes Fidelity and Fidelity Advisor share classes
See the inside front cover for important information about access to your fund’s shareholder reports.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of a fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a financial advisor, broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a fund electronically, by contacting your financial intermediary. For Fidelity customers, visit Fidelity's web site or call Fidelity using the contact information listed below.
You may elect to receive all future reports in paper free of charge. If you wish to continue receiving paper copies of your shareholder reports, you may contact your financial intermediary or, if you are a Fidelity customer, visit Fidelity’s website, or call Fidelity at the applicable toll-free number listed below. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
| Account Type | Website | Phone Number |
| Brokerage, Mutual Fund, or Annuity Contracts: | fidelity.com/mailpreferences | 1-800-343-3548 |
| Employer Provided Retirement Accounts: | netbenefits.fidelity.com/preferences (choose 'no' under Required Disclosures to continue to print) | 1-800-343-0860 |
| Advisor Sold Accounts Serviced Through Your Financial Intermediary: | Contact Your Financial Intermediary | Your Financial Intermediary's phone number |
| Advisor Sold Accounts Serviced by Fidelity: | institutional.fidelity.com | 1-877-208-0098 |
Contents
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 if you’re an individual investing directly with Fidelity, call 1-800-835-5092 if you’re a plan sponsor or participant with Fidelity as your recordkeeper or call 1-877-208-0098 on institutional accounts or if you’re an advisor or invest through one 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. © 2020 FMR LLC. All rights reserved.
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-PORT. Forms N-PORT are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-PORT 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.institutional.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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended January 31, 2020 | Past 1 year | Past 5 years | Past 10 years |
| Class A (incl. 5.75% sales charge) | (0.36)% | 2.62% | 10.12% |
| Class M (incl. 3.50% sales charge) | 1.75% | 2.83% | 10.08% |
| Class C (incl. contingent deferred sales charge) | 3.96% | 3.08% | 9.96% |
| Fidelity® Mid Cap Value Fund | 6.03% | 4.15% | 11.11% |
| Class I | 6.01% | 4.13% | 11.09% |
| Class Z | 6.19% | 4.22% | 11.13% |
Class C shares' contingent deferred sales charges included in the past one year, past five years and past ten years total return figures are 1%, 0% and 0%, respectively.
The initial offering of Class Z shares took place on February 1, 2017. Returns prior to February 1, 2017, are those of Class I.
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Mid Cap Value Fund, a class of the fund, on January 31, 2010.
The chart shows how the value of your investment would have changed, and also shows how the Russell Midcap® Value Index performed over the same period.
| Period Ending Values |
| $28,676 | Fidelity® Mid Cap Value Fund |
| $32,485 | Russell Midcap® Value Index |
Management's Discussion of Fund Performance
Market Recap: U.S. stocks rolled for the 12 months ending January 31, 2020, with the S&P 500
® index gaining 21.68%, despite persistent, nagging concerns about global economic growth and trade. After a rough end to 2018, equities sharply reversed course to begin 2019 amid upbeat company earnings and signs the Federal Reserve may pause on rates. The uptrend extended until May, when the index sunk as trade talks between the U.S. and China broke down. The bull market roared back to record a series of highs in July, when the Fed cut interest rates for the first time since 2008. Volatility intensified in August, as the Treasury yield curve inverted, which some investors viewed as a sign the U.S. economy could be heading for recession. But the market proved resilient, hitting a new high on October 30, when the Fed lowered rates for the third time in 2019, and moving higher through December 31. The new year began with a flattish January, with growing anxiety related to the new coronavirus outbreak and its impact on the global economy. By sector, information technology (+46%) led the way, driven by strong growth trends. The defensive utilities sector (+30%) also stood out, while communication services and consumer staples were about in line with the broader market. Conversely, energy (-11%) was by far the weakest – struggling due to sluggish oil prices – followed by several strong gainers that still lagged: materials (+11%), health care (+12%), industrials (+16%), consumer discretionary (+17%), and financials and real estate (+18% each).
Comments from Portfolio Manager Kevin Walenta: For the fiscal year, the fund’s share classes (excluding sales charges, if applicable) gained about 6%, lagging the 12.96% advance of the benchmark Russell Midcap
® Value Index. The fund’s value bias meant it was underexposed to expensive, low-volatility benchmark components, which outperformed the past 12 months, and overexposed to stocks with more volatility in their earnings streams, a group that underperformed. This positioning led to disappointing security selection, especially in the utilities, real estate, information technology, financials and industrials sectors. The biggest individual detractor was software & services company DXC Technology (-47%). Its stock declined amid earnings and revenue shortfalls, the surprise retirement of its CEO and increased debt, prompting me to eliminate our stake. In real estate, shares of hotel and lodging company Park Hotels & Resorts returned -23% while held in the fund, hurt by concern about a recent acquisition. Conversely, stock picks in the consumer discretionary sector, notably retailing, contributed to relative performance. The top individual contributor this period was CBRE Group, a diversified commercial real estate broker and the fund’s largest holding. Its stock rose roughly 33% this period, thanks to strong growth in the maintenance and facilities management side of its business.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of January 31, 2020
| | % of fund's net assets |
| CBRE Group, Inc. | 4.1 |
| Jones Lang LaSalle, Inc. | 3.7 |
| Reliance Steel & Aluminum Co. | 3.6 |
| Best Buy Co., Inc. | 3.0 |
| Synchrony Financial | 2.9 |
| OGE Energy Corp. | 2.9 |
| Lazard Ltd. Class A | 2.8 |
| Laboratory Corp. of America Holdings | 2.7 |
| Discover Financial Services | 2.6 |
| MDU Resources Group, Inc. | 2.5 |
| | 30.8 |
Top Five Market Sectors as of January 31, 2020
| | % of fund's net assets |
| Financials | 17.9 |
| Real Estate | 12.7 |
| Industrials | 12.3 |
| Utilities | 11.0 |
| Consumer Discretionary | 9.4 |
Asset Allocation (% of fund's net assets)
| As of January 31, 2020 * |
| | Stocks | 95.9% |
| | Short-Term Investments and Net Other Assets (Liabilities) | 4.1% |
* Foreign investments - 10.6%
Schedule of Investments January 31, 2020
Showing Percentage of Net Assets
| Common Stocks - 95.9% | | | |
| | | Shares | Value |
| COMMUNICATION SERVICES - 2.2% | | | |
| Entertainment - 0.1% | | | |
| Activision Blizzard, Inc. | | 13,200 | $771,936 |
| Electronic Arts, Inc. (a) | | 7,200 | 777,024 |
| | | | 1,548,960 |
| Media - 2.1% | | | |
| AMC Networks, Inc. Class A (a) | | 85,600 | 3,132,104 |
| CBS Corp. Class B | | 91,600 | 3,126,308 |
| Interpublic Group of Companies, Inc. | | 1,195,569 | 27,139,416 |
| | | | 33,397,828 |
|
| TOTAL COMMUNICATION SERVICES | | | 34,946,788 |
|
| CONSUMER DISCRETIONARY - 9.4% | | | |
| Auto Components - 3.2% | | | |
| BorgWarner, Inc. | | 461,690 | 15,831,350 |
| Lear Corp. | | 277,608 | 34,195,753 |
| | | | 50,027,103 |
| Diversified Consumer Services - 0.3% | | | |
| H&R Block, Inc. | | 168,200 | 3,902,240 |
| Internet & Direct Marketing Retail - 0.2% | | | |
| eBay, Inc. | | 20,276 | 680,463 |
| Stamps.com, Inc. (a) | | 8,300 | 618,267 |
| The Booking Holdings, Inc. (a) | | 899 | 1,645,664 |
| | | | 2,944,394 |
| Specialty Retail - 5.4% | | | |
| Best Buy Co., Inc. | | 557,512 | 47,215,691 |
| Rent-A-Center, Inc. | | 30,200 | 879,726 |
| Williams-Sonoma, Inc. (b) | | 504,539 | 35,358,093 |
| | | | 83,453,510 |
| Textiles, Apparel & Luxury Goods - 0.3% | | | |
| PVH Corp. | | 62,200 | 5,421,974 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 145,749,221 |
|
| CONSUMER STAPLES - 3.0% | | | |
| Food & Staples Retailing - 0.1% | | | |
| Sysco Corp. | | 19,900 | 1,634,586 |
| Food Products - 2.8% | | | |
| Ingredion, Inc. | | 281,993 | 24,815,384 |
| The J.M. Smucker Co. | | 182,584 | 18,917,528 |
| | | | 43,732,912 |
| Tobacco - 0.1% | | | |
| Universal Corp. | | 23,869 | 1,268,637 |
|
| TOTAL CONSUMER STAPLES | | | 46,636,135 |
|
| ENERGY - 3.9% | | | |
| Energy Equipment & Services - 0.3% | | | |
| Baker Hughes, A GE Co. Class A | | 233,800 | 5,064,108 |
| Oil, Gas & Consumable Fuels - 3.6% | | | |
| Black Stone Minerals LP | | 50,895 | 510,986 |
| Cabot Oil & Gas Corp. | | 296,600 | 4,179,094 |
| Chevron Corp. | | 181,561 | 19,452,446 |
| ConocoPhillips Co. | | 388,467 | 23,086,594 |
| CVR Energy, Inc. | | 193,400 | 6,693,574 |
| Enable Midstream Partners LP | | 31,800 | 298,920 |
| World Fuel Services Corp. | | 27,700 | 1,083,624 |
| | | | 55,305,238 |
|
| TOTAL ENERGY | | | 60,369,346 |
|
| FINANCIALS - 17.9% | | | |
| Banks - 2.7% | | | |
| Bank OZK | | 203,700 | 5,536,566 |
| Citizens Financial Group, Inc. | | 518,401 | 19,325,989 |
| East West Bancorp, Inc. | | 66,000 | 3,025,440 |
| PacWest Bancorp | | 384,800 | 13,487,240 |
| | | | 41,375,235 |
| Capital Markets - 4.1% | | | |
| Bank of New York Mellon Corp. | | 35,300 | 1,580,734 |
| Federated Investors, Inc. Class B (non-vtg.) | | 100,800 | 3,651,984 |
| Janus Henderson Group PLC (b) | | 460,800 | 11,644,416 |
| Lazard Ltd. Class A (b) | | 1,022,273 | 42,894,575 |
| Waddell & Reed Financial, Inc. Class A (b) | | 222,973 | 3,563,109 |
| | | | 63,334,818 |
| Consumer Finance - 6.5% | | | |
| Capital One Financial Corp. | | 108,085 | 10,786,883 |
| Discover Financial Services | | 532,535 | 40,009,355 |
| Encore Capital Group, Inc. (a) | | 160,000 | 5,432,000 |
| Synchrony Financial | | 1,398,446 | 45,323,635 |
| | | | 101,551,873 |
| Insurance - 3.6% | | | |
| Allstate Corp. | | 61,656 | 7,308,702 |
| Athene Holding Ltd. (a) | | 255,700 | 11,138,292 |
| Hartford Financial Services Group, Inc. | | 376,000 | 22,289,280 |
| MetLife, Inc. | | 288,280 | 14,330,399 |
| National Western Life Group, Inc. | | 1,299 | 345,534 |
| | | | 55,412,207 |
| Thrifts & Mortgage Finance - 1.0% | | | |
| Essent Group Ltd. | | 146,613 | 7,273,471 |
| Radian Group, Inc. | | 367,000 | 8,987,830 |
| | | | 16,261,301 |
|
| TOTAL FINANCIALS | | | 277,935,434 |
|
| HEALTH CARE - 8.0% | | | |
| Biotechnology - 1.0% | | | |
| AbbVie, Inc. | | 9,500 | 769,690 |
| Amgen, Inc. | | 33,668 | 7,273,971 |
| Regeneron Pharmaceuticals, Inc. (a) | | 23,283 | 7,868,257 |
| | | | 15,911,918 |
| Health Care Providers & Services - 5.5% | | | |
| AmerisourceBergen Corp. | | 37,367 | 3,197,121 |
| HCA Holdings, Inc. | | 1,100 | 152,680 |
| Laboratory Corp. of America Holdings (a) | | 234,693 | 41,165,152 |
| National Healthcare Corp. | | 30,200 | 2,534,384 |
| Quest Diagnostics, Inc. | | 159,579 | 17,660,608 |
| Universal Health Services, Inc. Class B | | 149,521 | 20,500,824 |
| | | | 85,210,769 |
| Pharmaceuticals - 1.5% | | | |
| Jazz Pharmaceuticals PLC (a) | | 160,413 | 22,995,204 |
|
| TOTAL HEALTH CARE | | | 124,117,891 |
|
| INDUSTRIALS - 12.3% | | | |
| Aerospace & Defense - 0.5% | | | |
| Raytheon Co. | | 31,900 | 7,047,986 |
| Building Products - 0.2% | | | |
| Builders FirstSource, Inc. (a) | | 138,049 | 3,422,925 |
| Construction & Engineering - 0.3% | | | |
| EMCOR Group, Inc. | | 58,500 | 4,806,945 |
| Electrical Equipment - 2.8% | | | |
| Acuity Brands, Inc. | | 174,551 | 20,574,326 |
| Eaton Corp. PLC | | 71,504 | 6,754,983 |
| Regal Beloit Corp. | | 212,877 | 16,702,329 |
| | | | 44,031,638 |
| Machinery - 6.2% | | | |
| Allison Transmission Holdings, Inc. | | 583,800 | 25,803,960 |
| Crane Co. | | 195,867 | 16,738,794 |
| Oshkosh Corp. | | 211,392 | 18,188,168 |
| PACCAR, Inc. | | 484,200 | 35,932,482 |
| | | | 96,663,404 |
| Professional Services - 1.6% | | | |
| Manpower, Inc. | | 184,226 | 16,854,837 |
| Robert Half International, Inc. | | 137,100 | 7,975,107 |
| | | | 24,829,944 |
| Trading Companies & Distributors - 0.7% | | | |
| HD Supply Holdings, Inc. (a) | | 276,618 | 11,269,417 |
|
| TOTAL INDUSTRIALS | | | 192,072,259 |
|
| INFORMATION TECHNOLOGY - 8.5% | | | |
| Communications Equipment - 1.6% | | | |
| Cisco Systems, Inc. | | 176,000 | 8,090,720 |
| F5 Networks, Inc. (a) | | 144,580 | 17,656,110 |
| | | | 25,746,830 |
| Electronic Equipment & Components - 0.3% | | | |
| Sanmina Corp. (a) | | 131,000 | 4,171,040 |
| IT Services - 4.1% | | | |
| Amdocs Ltd. | | 526,097 | 37,852,679 |
| Cognizant Technology Solutions Corp. Class A | | 167,700 | 10,293,426 |
| CSG Systems International, Inc. | | 46,300 | 2,306,666 |
| Sykes Enterprises, Inc. (a) | | 136,100 | 4,571,599 |
| The Western Union Co. | | 310,300 | 8,347,070 |
| | | | 63,371,440 |
| Semiconductors & Semiconductor Equipment - 1.4% | | | |
| Lam Research Corp. | | 73,824 | 22,015,055 |
| Software - 0.2% | | | |
| Oracle Corp. | | 47,700 | 2,501,865 |
| Technology Hardware, Storage & Peripherals - 0.9% | | | |
| HP, Inc. | | 205,600 | 4,383,392 |
| Xerox Holdings Corp. | | 268,800 | 9,561,216 |
| | | | 13,944,608 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 131,750,838 |
|
| MATERIALS - 7.0% | | | |
| Chemicals - 1.8% | | | |
| Cabot Corp. | | 245,700 | 9,791,145 |
| NewMarket Corp. | | 42,200 | 18,551,964 |
| | | | 28,343,109 |
| Containers & Packaging - 1.2% | | | |
| Packaging Corp. of America | | 203,900 | 19,523,425 |
| Metals & Mining - 3.7% | | | |
| Kaiser Aluminum Corp. | | 15,200 | 1,522,280 |
| Reliance Steel & Aluminum Co. | | 482,438 | 55,383,882 |
| | | | 56,906,162 |
| Paper & Forest Products - 0.3% | | | |
| Domtar Corp. | | 43,900 | 1,528,598 |
| Schweitzer-Mauduit International, Inc. | | 92,600 | 3,243,778 |
| | | | 4,772,376 |
|
| TOTAL MATERIALS | | | 109,545,072 |
|
| REAL ESTATE - 12.7% | | | |
| Equity Real Estate Investment Trusts (REITs) - 4.8% | | | |
| Alexanders, Inc. | | 6,895 | 2,224,879 |
| Apple Hospitality (REIT), Inc. | | 2,299,536 | 34,539,031 |
| CoreCivic, Inc. | | 72,900 | 1,162,755 |
| Host Hotels & Resorts, Inc. | | 1,141,400 | 18,650,476 |
| PS Business Parks, Inc. | | 2,800 | 469,168 |
| Simon Property Group, Inc. | | 134,153 | 17,862,472 |
| | | | 74,908,781 |
| Real Estate Management & Development - 7.9% | | | |
| CBRE Group, Inc. (a) | | 1,059,556 | 64,685,894 |
| Jones Lang LaSalle, Inc. | | 335,719 | 57,011,801 |
| Newmark Group, Inc. | | 137,000 | 1,612,490 |
| | | | 123,310,185 |
|
| TOTAL REAL ESTATE | | | 198,218,966 |
|
| UTILITIES - 11.0% | | | |
| Electric Utilities - 5.6% | | | |
| Endesa SA | | 177,200 | 4,867,891 |
| Exelon Corp. | | 415,284 | 19,763,366 |
| Iberdrola SA | | 1,602,129 | 17,537,422 |
| OGE Energy Corp. | | 983,374 | 45,087,698 |
| | | | 87,256,377 |
| Gas Utilities - 0.8% | | | |
| National Fuel Gas Co. (b) | | 222,802 | 9,622,818 |
| Suburban Propane Partners LP | | 116,662 | 2,642,394 |
| | | | 12,265,212 |
| Independent Power and Renewable Electricity Producers - 1.9% | | | |
| NRG Energy, Inc. | | 810,239 | 29,889,717 |
| Multi-Utilities - 2.7% | | | |
| AGL Energy Ltd. | | 288,300 | 3,826,093 |
| MDU Resources Group, Inc. | | 1,285,772 | 38,071,709 |
| | | | 41,897,802 |
|
| TOTAL UTILITIES | | | 171,309,108 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $1,417,657,126) | | | 1,492,651,058 |
|
| Money Market Funds - 7.2% | | | |
| Fidelity Cash Central Fund 1.58% (c) | | 65,393,304 | 65,406,382 |
| Fidelity Securities Lending Cash Central Fund 1.59% (c)(d) | | 46,830,477 | 46,835,160 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $112,241,542) | | | 112,241,542 |
| TOTAL INVESTMENT IN SECURITIES - 103.1% | | | |
| (Cost $1,529,898,668) | | | 1,604,892,600 |
| NET OTHER ASSETS (LIABILITIES) - (3.1)% | | | (48,578,421) |
| NET ASSETS - 100% | | | $1,556,314,179 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Affiliated fund that is generally 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $964,271 |
| Fidelity Securities Lending Cash Central Fund | 74,249 |
| Total | $1,038,520 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations, if applicable. Amount for Fidelity Securities Lending Cash Central Fund 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.
Investment Valuation
The following is a summary of the inputs used, as of January 31, 2020, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Communication Services | $34,946,788 | $34,946,788 | $-- | $-- |
| Consumer Discretionary | 145,749,221 | 145,749,221 | -- | -- |
| Consumer Staples | 46,636,135 | 46,636,135 | -- | -- |
| Energy | 60,369,346 | 60,369,346 | -- | -- |
| Financials | 277,935,434 | 277,935,434 | -- | -- |
| Health Care | 124,117,891 | 124,117,891 | -- | -- |
| Industrials | 192,072,259 | 192,072,259 | -- | -- |
| Information Technology | 131,750,838 | 131,750,838 | -- | -- |
| Materials | 109,545,072 | 109,545,072 | -- | -- |
| Real Estate | 198,218,966 | 198,218,966 | -- | -- |
| Utilities | 171,309,108 | 167,483,015 | 3,826,093 | -- |
| Money Market Funds | 112,241,542 | 112,241,542 | -- | -- |
| Total Investments in Securities: | $1,604,892,600 | $1,601,066,507 | $3,826,093 | $-- |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 89.4% |
| Bermuda | 3.9% |
| Bailiwick of Guernsey | 2.4% |
| Ireland | 1.9% |
| Spain | 1.4% |
| Others (Individually Less Than 1%) | 1.0% |
| | 100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | January 31, 2020 |
| Assets | | |
Investment in securities, at value (including securities loaned of $44,396,683) — See accompanying schedule:
Unaffiliated issuers (cost $1,417,657,126) | $1,492,651,058 | |
| Fidelity Central Funds (cost $112,241,542) | 112,241,542 | |
| Total Investment in Securities (cost $1,529,898,668) | | $1,604,892,600 |
| Cash | | 68,160 |
| Receivable for investments sold | | 7,897,307 |
| Receivable for fund shares sold | | 604,902 |
| Dividends receivable | | 890,648 |
| Distributions receivable from Fidelity Central Funds | | 79,339 |
| Prepaid expenses | | 2,051 |
| Other receivables | | 48,085 |
| Total assets | | 1,614,483,092 |
| Liabilities | | |
| Payable for investments purchased | $9,113,314 | |
| Payable for fund shares redeemed | 1,481,299 | |
| Accrued management fee | 305,531 | |
| Distribution and service plan fees payable | 99,406 | |
| Other affiliated payables | 288,115 | |
| Other payables and accrued expenses | 53,263 | |
| Collateral on securities loaned | 46,827,985 | |
| Total liabilities | | 58,168,913 |
| Net Assets | | $1,556,314,179 |
| Net Assets consist of: | | |
| Paid in capital | | $1,609,148,361 |
| Total accumulated earnings (loss) | | (52,834,182) |
| Net Assets | | $1,556,314,179 |
| Net Asset Value and Maximum Offering Price | | |
| Class A: | | |
| Net Asset Value and redemption price per share ($141,439,350 ÷ 6,502,182 shares)(a) | | $21.75 |
| Maximum offering price per share (100/94.25 of $21.75) | | $23.08 |
| Class M: | | |
| Net Asset Value and redemption price per share ($35,683,562 ÷ 1,648,470 shares)(a) | | $21.65 |
| Maximum offering price per share (100/96.50 of $21.65) | | $22.44 |
| Class C: | | |
| Net Asset Value and offering price per share ($60,684,653 ÷ 2,891,550 shares)(a) | | $20.99 |
| Mid Cap Value: | | |
| Net Asset Value, offering price and redemption price per share ($1,156,286,449 ÷ 52,355,553 shares) | | $22.09 |
| Class I: | | |
| Net Asset Value, offering price and redemption price per share ($127,646,959 ÷ 5,833,013 shares) | | $21.88 |
| Class Z: | | |
| Net Asset Value, offering price and redemption price per share ($34,573,206 ÷ 1,581,906 shares) | | $21.86 |
(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.
Statement of Operations
| | | Year ended January 31, 2020 |
| Investment Income | | |
| Dividends | | $44,145,298 |
| Income from Fidelity Central Funds (including $74,249 from security lending) | | 1,038,520 |
| Total income | | 45,183,818 |
| Expenses | | |
| Management fee | | |
| Basic fee | $9,621,372 | |
| Performance adjustment | (5,293,955) | |
| Transfer agent fees | 3,289,692 | |
| Distribution and service plan fees | 1,287,343 | |
| Accounting and security lending fees | 554,297 | |
| Custodian fees and expenses | 13,394 | |
| Independent trustees' fees and expenses | 10,056 | |
| Registration fees | 102,976 | |
| Audit | 62,347 | |
| Legal | 9,064 | |
| Interest | 3,880 | |
| Miscellaneous | 14,061 | |
| Total expenses before reductions | 9,674,527 | |
| Expense reductions | (176,946) | |
| Total expenses after reductions | | 9,497,581 |
| Net investment income (loss) | | 35,686,237 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (65,990,938) | |
| Fidelity Central Funds | 514 | |
| Foreign currency transactions | (8,288) | |
| Total net realized gain (loss) | | (65,998,712) |
| Change in net unrealized appreciation (depreciation) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 137,720,319 | |
| Assets and liabilities in foreign currencies | 421 | |
| Total change in net unrealized appreciation (depreciation) | | 137,720,740 |
| Net gain (loss) | | 71,722,028 |
| Net increase (decrease) in net assets resulting from operations | | $107,408,265 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $35,686,237 | $48,954,890 |
| Net realized gain (loss) | (65,998,712) | 88,477,569 |
| Change in net unrealized appreciation (depreciation) | 137,720,740 | (459,352,496) |
| Net increase (decrease) in net assets resulting from operations | 107,408,265 | (321,920,037) |
| Distributions to shareholders | (30,653,496) | (293,130,399) |
| Share transactions - net increase (decrease) | (557,574,102) | (576,020,015) |
| Total increase (decrease) in net assets | (480,819,333) | (1,191,070,451) |
| Net Assets | | |
| Beginning of period | 2,037,133,512 | 3,228,203,963 |
| End of period | $1,556,314,179 | $2,037,133,512 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Mid Cap Value Fund Class A
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $20.91 | $26.62 | $24.94 | $20.52 | $23.90 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .38 | .39 | .44B | .29 | .29 |
| Net realized and unrealized gain (loss) | .83 | (3.35) | 3.54 | 4.40 | (2.57) |
| Total from investment operations | 1.21 | (2.96) | 3.98 | 4.69 | (2.28) |
| Distributions from net investment income | (.37) | (.40) | (.43) | (.27) | (.28) |
| Distributions from net realized gain | – | (2.35) | (1.87) | – | (.82) |
| Total distributions | (.37) | (2.75) | (2.30) | (.27) | (1.10) |
| Redemption fees added to paid in capitalA | – | – | – | –C | –C |
| Net asset value, end of period | $21.75 | $20.91 | $26.62 | $24.94 | $20.52 |
| Total ReturnD,E | 5.72% | (11.23)% | 16.13% | 22.87% | (9.83)% |
| Ratios to Average Net AssetsF,G | | | | | |
| Expenses before reductions | .76% | .82% | .98% | 1.01% | 1.14% |
| Expenses net of fee waivers, if any | .76% | .82% | .98% | 1.01% | 1.14% |
| Expenses net of all reductions | .75% | .81% | .97% | 1.00% | 1.14% |
| Net investment income (loss) | 1.77% | 1.66% | 1.67%B | 1.25% | 1.21% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $141,439 | $173,538 | $255,907 | $299,124 | $277,462 |
| Portfolio turnover rateH | 83%I | 80%I | 138%I | 83% | 83% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.17 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.18%.
C Amount represents less than $.005 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
E Total returns do not include the effect of the sales charges.
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 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.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Mid Cap Value Fund Class M
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $20.82 | $26.51 | $24.84 | $20.46 | $23.81 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .32 | .32 | .36B | .22 | .22 |
| Net realized and unrealized gain (loss) | .82 | (3.33) | 3.54 | 4.38 | (2.54) |
| Total from investment operations | 1.14 | (3.01) | 3.90 | 4.60 | (2.32) |
| Distributions from net investment income | (.31) | (.33) | (.35) | (.22) | (.21) |
| Distributions from net realized gain | – | (2.35) | (1.87) | – | (.82) |
| Total distributions | (.31) | (2.68) | (2.23)C | (.22) | (1.03) |
| Redemption fees added to paid in capitalA | – | – | – | –D | –D |
| Net asset value, end of period | $21.65 | $20.82 | $26.51 | $24.84 | $20.46 |
| Total ReturnE,F | 5.44% | (11.48)% | 15.84% | 22.48% | (10.04)% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.03% | 1.10% | 1.25% | 1.29% | 1.42% |
| Expenses net of fee waivers, if any | 1.03% | 1.10% | 1.25% | 1.29% | 1.42% |
| Expenses net of all reductions | 1.02% | 1.09% | 1.24% | 1.29% | 1.42% |
| Net investment income (loss) | 1.50% | 1.39% | 1.40%B | .96% | .93% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $35,684 | $41,540 | $57,807 | $60,761 | $46,084 |
| Portfolio turnover rateI | 83%J | 80%J | 138%J | 83% | 83% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.17 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .91%.
C Total distributions of $2.23 per share is comprised of distributions from net investment income of $.352 and distributions from net realized gain of $1.873 per share.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the sales charges.
G 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.
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.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Mid Cap Value Fund Class C
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $20.19 | $25.76 | $24.22 | $19.95 | $23.30 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .21 | .21 | .23B | .11 | .11 |
| Net realized and unrealized gain (loss) | .80 | (3.23) | 3.43 | 4.27 | (2.49) |
| Total from investment operations | 1.01 | (3.02) | 3.66 | 4.38 | (2.38) |
| Distributions from net investment income | (.21) | (.20) | (.25) | (.11) | (.15) |
| Distributions from net realized gain | – | (2.35) | (1.87) | – | (.81) |
| Total distributions | (.21) | (2.55) | (2.12) | (.11) | (.97)C |
| Redemption fees added to paid in capitalA | – | – | – | –D | –D |
| Net asset value, end of period | $20.99 | $20.19 | $25.76 | $24.22 | $19.95 |
| Total ReturnE,F | 4.96% | (11.89)% | 15.28% | 21.97% | (10.52)% |
| Ratios to Average Net AssetsG,H | | | | | |
| Expenses before reductions | 1.51% | 1.56% | 1.72% | 1.76% | 1.89% |
| Expenses net of fee waivers, if any | 1.51% | 1.56% | 1.72% | 1.76% | 1.89% |
| Expenses net of all reductions | 1.50% | 1.55% | 1.71% | 1.75% | 1.88% |
| Net investment income (loss) | 1.02% | .92% | .93%B | .50% | .47% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $60,685 | $85,519 | $138,506 | $144,503 | $130,636 |
| Portfolio turnover rateI | 83%J | 80%J | 138%J | 83% | 83% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.16 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been .44%.
C Total distributions of $.97 per share is comprised of distributions from net investment income of $.153 and distributions from net realized gain of $.812 per share.
D Amount represents less than $.005 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
F Total returns do not include the effect of the contingent deferred sales charge.
G 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.
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.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Mid Cap Value Fund
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $21.23 | $26.99 | $25.24 | $20.76 | $24.15 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .45 | .47 | .52B | .35 | .36 |
| Net realized and unrealized gain (loss) | .84 | (3.41) | 3.60 | 4.46 | (2.60) |
| Total from investment operations | 1.29 | (2.94) | 4.12 | 4.81 | (2.24) |
| Distributions from net investment income | (.43) | (.47) | (.50) | (.33) | (.33) |
| Distributions from net realized gain | – | (2.35) | (1.87) | – | (.82) |
| Total distributions | (.43) | (2.82) | (2.37) | (.33) | (1.15) |
| Redemption fees added to paid in capitalA | – | – | – | –C | –C |
| Net asset value, end of period | $22.09 | $21.23 | $26.99 | $25.24 | $20.76 |
| Total ReturnD | 6.03% | (10.97)% | 16.51% | 23.19% | (9.58)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | .46% | .53% | .69% | .73% | .86% |
| Expenses net of fee waivers, if any | .46% | .53% | .69% | .73% | .85% |
| Expenses net of all reductions | .45% | .52% | .68% | .72% | .85% |
| Net investment income (loss) | 2.07% | 1.96% | 1.96%B | 1.53% | 1.50% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $1,156,286 | $1,456,510 | $2,332,143 | $2,426,359 | $2,331,665 |
| Portfolio turnover rateG | 83%H | 80%H | 138%H | 83% | 83% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.17 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.47%.
C Amount represents less than $.005 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 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.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Mid Cap Value Fund Class I
| Years ended January 31, | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per–Share Data | | | | | |
| Net asset value, beginning of period | $21.03 | $26.77 | $25.05 | $20.61 | $24.00 |
| Income from Investment Operations | | | | | |
| Net investment income (loss)A | .45 | .46 | .51B | .35 | .35 |
| Net realized and unrealized gain (loss) | .83 | (3.38) | 3.58 | 4.43 | (2.58) |
| Total from investment operations | 1.28 | (2.92) | 4.09 | 4.78 | (2.23) |
| Distributions from net investment income | (.43) | (.47) | (.50) | (.34) | (.34) |
| Distributions from net realized gain | – | (2.35) | (1.87) | – | (.82) |
| Total distributions | (.43) | (2.82) | (2.37) | (.34) | (1.16) |
| Redemption fees added to paid in capitalA | – | – | – | –C | –C |
| Net asset value, end of period | $21.88 | $21.03 | $26.77 | $25.05 | $20.61 |
| Total ReturnD | 6.01% | (10.99)% | 16.52% | 23.19% | (9.60)% |
| Ratios to Average Net AssetsE,F | | | | | |
| Expenses before reductions | .46% | .53% | .69% | .73%�� | .87% |
| Expenses net of fee waivers, if any | .46% | .53% | .69% | .73% | .86% |
| Expenses net of all reductions | .45% | .52% | .68% | .73% | .86% |
| Net investment income (loss) | 2.07% | 1.95% | 1.95%B | 1.53% | 1.49% |
| Supplemental Data | | | | | |
| Net assets, end of period (000 omitted) | $127,647 | $244,054 | $410,868 | $363,949 | $261,686 |
| Portfolio turnover rateG | 83%H | 80%H | 138%H | 83% | 83% |
A Calculated based on average shares outstanding during the period.
B Net investment income per share reflects a large, non-recurring dividend which amounted to $.17 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.47%.
C Amount represents less than $.005 per share.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 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.
G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
H Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity Mid Cap Value Fund Class Z
| Years ended January 31, | 2020 | 2019 | 2018 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $21.01 | $26.76 | $25.03 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .48 | .49 | .56C |
| Net realized and unrealized gain (loss) | .83 | (3.38) | 3.59 |
| Total from investment operations | 1.31 | (2.89) | 4.15 |
| Distributions from net investment income | (.46) | (.51) | (.54) |
| Distributions from net realized gain | – | (2.35) | (1.87) |
| Total distributions | (.46) | (2.86) | (2.42)D |
| Net asset value, end of period | $21.86 | $21.01 | $26.76 |
| Total ReturnE | 6.19% | (10.86)% | 16.74% |
| Ratios to Average Net AssetsF,G | | | |
| Expenses before reductions | .33% | .40% | .56% |
| Expenses net of fee waivers, if any | .33% | .40% | .56% |
| Expenses net of all reductions | .32% | .39% | .55% |
| Net investment income (loss) | 2.20% | 2.09% | 2.09%C |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $34,573 | $35,972 | $32,974 |
| Portfolio turnover rateH | 83%I | 80%I | 138%I |
A For the period February 1, 2017 (commencement of sale of shares) to January 31, 2018.
B Calculated based on average shares outstanding during the period.
C Net investment income per share reflects a large, non-recurring dividend which amounted to $.17 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 1.60%.
D Total distributions of $2.42 per share is comprised of distributions from net investment income of $.542 and distributions from net realized gain of $1.873 per share.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 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.
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended January 31, 2020
1. Organization.
Fidelity Mid Cap Value Fund (the Fund) is a fund of Fidelity Devonshire 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 M, Class C, Mid Cap Value, Class I and Class Z 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.
Effective March 1, 2019, Class C shares will automatically convert to Class A shares after a holding period of ten years from the initial date of purchase, with certain exceptions.
Effective January 1, 2020:
Investment advisers Fidelity Investments Money Management, Inc., FMR Co., Inc., and Fidelity SelectCo, LLC, merged with and into Fidelity Management & Research Company. In connection with the merger transactions, the resulting, merged investment adviser was then redomiciled from Massachusetts to Delaware, changed its corporate structure from a corporation to a limited liability company, and changed its name to "Fidelity Management & Research Company LLC".
Broker-dealer Fidelity Distributors Corporation merged with and into Fidelity Investments Institutional Services Company, Inc. ("FIISC"). FIISC was then redomiciled from Massachusetts to Delaware, changed its corporate structure from a corporation to a limited liability company, and changed its name to "Fidelity Distributors Company LLC".
Fidelity Investments Institutional Operations Company, Inc. converted from a Massachusetts corporation to a Massachusetts LLC, and changed its name to "Fidelity Investments Institutional Operations Company LLC".
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser 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 the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date ranged from less than .005% to .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
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)
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 a third party pricing vendor 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 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 may be used and would be categorized as Level 2 in the hierarchy. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
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 January 31, 2020 is included at the end of the Fund's Schedule of Investments.
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 rates 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 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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily 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. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. 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 U.S. Federal income taxes is required. As of January 31, 2020, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The 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.
Distributions are declared and recorded on the ex-dividend date. Income 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. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to the short-term gain distributions from the Underlying Funds, foreign currency transactions, partnerships, redemptions in-kind, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
| Gross unrealized appreciation | $156,338,278 |
| Gross unrealized depreciation | (81,746,501) |
| Net unrealized appreciation (depreciation) | $74,591,777 |
| Tax Cost | $1,530,300,823 |
The tax-based components of distributable earnings as of period end were as follows:
| Capital loss carryforward | $(127,426,381) |
| Net unrealized appreciation (depreciation) on securities and other investments | $74,592,198 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(29,679,377) |
| Long-term | (97,747,004) |
| Total capital loss carryforward | $(127,426,381) |
The tax character of distributions paid was as follows:
| | January 31, 2020 | January 31, 2019 |
| Ordinary Income | $30,653,496 | $ 46,445,545 |
| Long-term Capital Gains | – | 246,684,854 |
| Total | $30,653,496 | $ 293,130,399 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $1,445,203,056 and $2,036,458,344, respectively.
Unaffiliated Redemptions In-Kind. During the period, 357,313 shares of the Fund were redeemed in-kind for investments and cash with a value of $7,769,327. The net realized gain of $953,056 on investments delivered through in-kind redemptions is included in the accompanying Statement of Operations. The amount of the in-kind redemptions is included in share transactions in the accompanying Statement of Changes in Net Assets as well as the Notes to Financial Statements. The Fund recognized no gain or loss for federal income tax purposes.
Prior Fiscal Year Unaffiliated Redemptions In-Kind. During the prior period, 876,174 shares of the Fund were redeemed in-kind for investments and cash with a value of $21,501,311. The Fund had a net realized gain of $2,657,810 on investments delivered through in-kind redemptions. The amount of the in-kind redemptions is included in share transactions in the accompanying Statement of Changes in Net Assets as well as the Notes to Financial Statements. The Fund recognized no gain or loss for federal income tax purposes.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company LLC (the investment adviser) 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 .24% during the period. The group fee rate is based upon the monthly average net assets of a group of registered investment companies with which the investment adviser has management contracts. 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 Midcap Value as compared to its benchmark index, the Russell Midcap Value Index, over the same 36 month performance period. For the reporting period, the total annual management fee rate, including the performance adjustment, was .24% of the Fund's average net assets. The performance adjustment included in the management fee rate may be higher or lower than the maximum performance adjustment rate due to the difference between the average net assets for the reporting and performance periods.
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 Company LLC (FDC), an affiliate of the investment adviser, 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:
| | Distribution Fee | Service Fee | Total Fees | Retained by FDC |
| Class A | -% | .25% | $394,773 | $7,637 |
| Class M | .25% | .25% | 191,344 | 1,366 |
| Class C | .75% | .25% | 701,226 | 34,964 |
| | | | $1,287,343 | $43,967 |
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 M 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 M and Class C redemptions. The deferred sales charges are 1.00% for Class C shares, 1.00% for certain purchases of Class A shares and .25% for certain purchases of Class M shares.
For the period, sales charge amounts retained by FDC were as follows:
| | Retained by FDC |
| Class A | $31,081 |
| Class M | 3,359 |
| Class C(a) | 3,079 |
| | $37,519 |
(a) When 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 LLC (FIIOC), an affiliate of the investment adviser, 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, except for Class Z. FIIOC receives an asset-based fee of Class Z'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 Class-Level Average Net Assets |
| Class A | $358,031 | .23 |
| Class M | 94,392 | .25 |
| Class C | 154,848 | .22 |
| Mid Cap Value | 2,360,068 | .18 |
| Class I | 307,331 | .18 |
| Class Z | 15,022 | .05 |
| | $3,289,692 | |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Prior to April 1, 2019, FSC had a separate agreement with the Fund for administration of the security lending program, based on the number and duration of lending transactions. For the period, the total fees paid for accounting and administration of securities lending were equivalent to the following annual rates:
| | % of Average Net Assets |
| Fidelity Mid Cap Value Fund | .03 |
Brokerage Commissions. A portion of portfolio transactions were placed with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were as follows:
| | Amount |
| Fidelity Mid Cap Value Fund | $60,026 |
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with Fidelity Management & Research Company LLC, or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the fund to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. 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 |
| Fidelity Mid Cap Value Fund | Borrower | $17,411,000 | 2.67% | $3,880 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Other. During the period, the investment adviser reimbursed the Fund for certain losses in the amount of $4,871.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser 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 $4,687 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. For equity securities, lending agents are used, including National Financial Services (NFS), an affiliate of the Fund. Pursuant to a securities lending agreement, NFS will receive a fee, which is capped at 9.9% of daily lending revenue, for its services as lending agent. The Fund may lend securities to certain qualified borrowers, including NFS. 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. 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. At period end, there were no security loans outstanding with NFS, as affiliated borrower. Total fees paid by the Fund to NFS, as lending agent, amounted to $4,128. 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, and includes $1,284 from securities loaned to NFS, as affiliated borrower.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $154,772 for the period.
In addition, through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses. During the period, custodian credits reduced the Fund's expenses by $510.
During the period the investment adviser or an affiliate reimbursed and/or waived a portion of fund-level operating expenses in the amount of $11,314.
In addition, during the period, the investment adviser or an affiliate reimbursed the Fund $10,350 for an operational error which is included in the accompanying Statement of Operations.
9. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| | Year ended
January 31, 2020 | Year ended
January 31, 2019 |
| Distributions to shareholders | | |
| Class A | $2,394,766 | $24,177,514 |
| Class M | 510,699 | 5,348,381 |
| Class C | 616,126 | 12,076,102 |
| Mid Cap Value | 23,731,890 | 210,242,141 |
| Class I | 2,698,882 | 36,984,577 |
| Class Z | 701,133 | 4,301,684 |
| Total | $30,653,496 | $293,130,399 |
10. Share Transactions.
Share transactions for each class were as follows and may contain automatic conversions between classes or exchanges between affiliated funds:
| | Shares | Shares | Dollars | Dollars |
| | Year ended January 31, 2020 | Year ended January 31, 2019 | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Class A | | | | |
| Shares sold | 1,004,356 | 1,111,101 | $21,578,476 | $26,179,746 |
| Reinvestment of distributions | 105,481 | 1,090,741 | 2,363,773 | 23,882,423 |
| Shares redeemed | (2,904,976) | (3,516,152) | (62,269,422) | (80,987,072) |
| Net increase (decrease) | (1,795,139) | (1,314,310) | $(38,327,173) | $(30,924,903) |
| Class M | | | | |
| Shares sold | 154,682 | 328,890 | $3,319,054 | $7,376,153 |
| Reinvestment of distributions | 22,710 | 242,648 | 506,671 | 5,307,008 |
| Shares redeemed | (524,041) | (757,165) | (11,218,534) | (17,585,718) |
| Net increase (decrease) | (346,649) | (185,627) | $(7,392,809) | $(4,902,557) |
| Class C | | | | |
| Shares sold | 182,381 | 352,125 | $3,784,548 | $7,860,127 |
| Reinvestment of distributions | 27,336 | 545,524 | 591,589 | 11,655,287 |
| Shares redeemed | (1,553,063) | (2,039,444) | (32,022,085) | (45,351,086) |
| Net increase (decrease) | (1,343,346) | (1,141,795) | $(27,645,948) | $(25,835,672) |
| Mid Cap Value | | | | |
| Shares sold | 2,687,666 | 5,324,150 | $58,799,714 | $126,674,668 |
| Reinvestment of distributions | 997,660 | 9,003,439 | 22,686,785 | 200,688,042 |
| Shares redeemed | (19,943,038)(a) | (32,131,599)(b) | (438,331,615)(a) | (765,003,490)(b) |
| Net increase (decrease) | (16,257,712) | (17,804,010) | $(356,845,116) | $(437,640,780) |
| Class I | | | | |
| Shares sold | 1,766,654 | 3,178,396 | $37,972,577 | $75,426,021 |
| Reinvestment of distributions | 113,719 | 1,607,734 | 2,563,218 | 35,521,968 |
| Shares redeemed | (7,651,428) | (8,532,865) | (165,254,663) | (198,881,148) |
| Net increase (decrease) | (5,771,055) | (3,746,735) | $(124,718,868) | $(87,933,159) |
| Class Z | | | | |
| Shares sold | 781,177 | 1,511,067 | $17,085,406 | $35,624,073 |
| Reinvestment of distributions | 24,328 | 159,287 | 547,372 | 3,423,612 |
| Shares redeemed | (935,595) | (1,190,688) | (20,276,966) | (27,830,629) |
| Net increase (decrease) | (130,090) | 479,666 | $(2,644,188) | $11,217,056 |
(a) Amount includes in-kind redemptions (see the Unaffiliated Redemptions In-Kind note for additional details).
(b) Amount includes in-kind redemptions (see the Prior Fiscal Year Unaffiliated Redemptions In-Kind note for additional details).
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.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Fidelity Devonshire Trust and Shareholders of Fidelity Mid Cap Value Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Fidelity Mid Cap Value Fund (one of the funds constituting Fidelity Devonshire Trust, referred to hereafter as the “Fund”) as of January 31, 2020, the related statement of operations for the year ended January 31, 2020, the statement of changes in net assets for each of the two years in the period ended January 31, 2020, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of January 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended January 31, 2020 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of January 31, 2020 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 12, 2020
We have served as the auditor of one or more investment companies in the Fidelity group of funds since 1932.
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Michael E. Wiley, each of the Trustees oversees 302 funds. Mr. Wiley oversees 199 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the Investment Company Act of 1940 (1940 Act)) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544 if you’re an individual investing directly with Fidelity, call 1-800-835-5092 if you’re a plan sponsor or participant with Fidelity as your recordkeeper or call 1-877-208-0098 on institutional accounts or if you’re an advisor or invest through one.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and other equity funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey is an Overseer Emeritus for the Boston Symphony Orchestra, a Director of Artis-Naples, and a Trustee of Brewster Academy in Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-2018), Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks served as Chief Operating Officer and as a member of the Board of The Depository Trust & Clearing Corporation (financial markets infrastructure), President, Chief Operating Officer and a member of the Board of The Depository Trust Company (DTC), President and a member of the Board of the National Securities Clearing Corporation (NSCC), Chief Executive Officer and a member of the Board of the Government Securities Clearing Corporation and Chief Executive Officer and a member of the Board of the Mortgage-Backed Securities Clearing Corporation. Mr. Dirks currently serves as a member of the Finance Committee (2016-present) and Board (2017-present) and is Treasurer (2018-present) of the Asolo Repertory Theatre.
Donald F. Donahue (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Donahue also serves as Trustee of other Fidelity® funds. Mr. Donahue serves as President and Chief Executive Officer of Miranda Partners, LLC (risk consulting for the financial services industry, 2012-present). Previously, Mr. Donahue served as Chief Executive Officer (2006-2012), Chief Operating Officer (2003-2006) and Managing Director, Customer Marketing and Development (1999-2003) of The Depository Trust & Clearing Corporation (financial markets infrastructure). Mr. Donahue currently serves as a member (2007-present) and Co-Chairman (2016-present) of the Board of United Way of New York, a member of the Board of NYC Leadership Academy (2012-present) and a member of the Board of Advisors of Ripple Labs, Inc. (financial services, 2015-present). Mr. Donahue previously served as a member of the Advisory Board of certain Fidelity® funds (2015-2018).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Previously, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity), Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail), Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005) and Chairman (2014-2017) and a member of the Board (2010-2017) of Dave & Buster’s Entertainment, Inc. (restaurant and entertainment complexes). Mr. Lacy currently serves as a member of the Board of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present), Trustee of the California Chapter of The Nature Conservancy (2015-present) and a member of the Board of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as Chair of the Board of Governors, State University System of Florida (2013-present) and is a member of the Council on Foreign Relations (1994-present). He is also a member and has in the past served as Chairman of the Board of Directors of Artis-Naples (2012-present). Previously, Mr. Lautenbach served as a member and then Lead Director of the Board of Directors of Eaton Corporation (diversified industrial, 1997-2016). He was also a Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010); as well as Director of Sony Corporation (2006-2007). In addition, Mr. Lautenbach had a 30-year career with IBM (technology company), during which time he served as Senior Vice President and as a member of the Corporate Executive Committee (1968-1998).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Independent Directors Council Governing Council (2015-present). Previously, Mr. Mauriello served as a member of the Board of XL Group plc. (global insurance and re-insurance, 2006-2018).
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Previously, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments and a member of Scudder, Stevens & Clark and Scudder Kemper Investments. Ms. Small previously served as a member of the Board (2009-2019) and Chair of the Investment Committee (2010-2019) of the Teagle Foundation and a member of the Investment Committee of the Berkshire Taconic Community Foundation (2008-2019).
Garnett A. Smith (1947)
Year of Election or Appointment: 2018
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to his retirement, Mr. Smith served as Chairman and Chief Executive Officer (1990-1997) and President (1986-1990) of Inbrand Corp. (manufacturer of personal absorbent products). Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank (now Bank of America). Mr. Smith previously served as a member of the Advisory Board of certain Fidelity® funds (2012-2013).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions). Mr. Thomas currently serves as Non-Executive Chairman of the Board of Fortune Brands Home and Security (home and security products, 2011-present), and a member of the Board (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication).
Michael E. Wiley (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Wiley also serves as Trustee or a member of the Advisory Board of other Fidelity® funds. Previously, Mr. Wiley served as Chairman, President and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004). Mr. Wiley currently serves as a member of the Board of High Point Resources (exploration and production, 2005-present). Previously, Mr. Wiley served as a member of the Board of Andeavor Corporation (independent oil refiner and marketer, 2005-2018) and a member of the Board of Andeavor Logistics LP (natural resources logistics, 2015-2018).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for a Member of the Advisory Board (if any) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Vicki L. Fuller (1957)
Year of Election or Appointment: 2018
Member of the Advisory Board
Ms. Fuller also serves as a member of the Advisory Board of other Fidelity® funds. Previously, Ms. Fuller served as Chief Investment Officer of the New York State Common Retirement Fund (2012-2018) and held a variety of positions at AllianceBernstein L.P. (global asset management, 1985-2012), including Managing Director (2006-2012) and Senior Vice President and Senior Portfolio Manager (2001-2006). Ms. Fuller currently serves as a member of the Board, Audit Committee and Nominating and Governance Committee of The Williams Companies, Inc. (natural gas infrastructure, 2018-present) and as a member of the Board of Treliant, LLC (consulting, 2019-present).
Patricia L. Kampling (1959)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Kampling also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Kampling served as Chairman of the Board and Chief Executive Officer (2012-2019), President and Chief Operating Officer (2011-2012) and Executive Vice President and Chief Financial Officer (2010-2011) of Alliant Energy Corporation. Ms. Kampling currently serves as a member of the Board, Compensation Committee and Executive Committee and as Chair of the Audit Committee of Briggs & Stratton Corporation (manufacturing, 2011-present) and as a member of the Board, Audit, Finance and Risk Committee and Safety, Environmental, Technology and Operations Committee of American Water Works Company, Inc. (utilities company, 2019-present). In addition, Ms. Kampling currently serves as a member of the Board of the Nature Conservancy, Wisconsin Chapter (2019-present). Previously, Ms. Kampling served as a member of the Board of Interstate Power and Light Company (2012-2019) and Wisconsin Power and Light Company (2012-2019) (each a subsidiary of Alliant Energy Corporation) and as a member of the Board and Workforce Development Committee of the Business Roundtable (2018-2019).
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of Fidelity Management & Research Company LLC (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served as Vice Chairman and a Director of FMR Co., Inc. (investment adviser firm) and on the Special Olympics International Board of Directors (1997-2006).
Susan Tomasky (1953)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Tomasky also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Tomasky served in various executive officer positions at American Electric Power Company, Inc. (1998-2011), including most recently as President of AEP Transmission (2007-2011). Ms. Tomasky currently serves as a member of the Board and Sustainability Committee and as Chair of the Audit Committee of Marathon Petroleum Corporation (2018-present) and as a member of the Board, Corporate Governance Committee and Organization and Compensation Committee and as Chair of the Audit Committee of Public Service Enterprise Group, Inc. (utilities company, 2012-present). In addition, Ms. Tomasky currently serves as a member of the Board of the Columbus Regional Airport Authority (2007-present), as a member of the Board of the Royal Shakespeare Company – America (2009-present), as a member of the Board of the Columbus Association for the Performing Arts (2011-present) and as a member of the Board of Kenyon College (2016-present). Previously, Ms. Tomasky served as a member of the Board (2011-2019) and as Lead Independent Director (2015-2018) of Andeavor Corporation (previously Tesoro Corporation) (independent oil refiner and marketer) and as a member of the Board of Summit Midstream Partners LP (energy, 2012-2018).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2017
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer (2012-present) and Senior Vice President (2014-present) of FMR LLC (diversified financial services company) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as AML Officer of certain funds (2017-2019), as AML Officer of the funds (2012-2016), and Vice President (2007-2014) and Deputy Anti-Money Laundering Officer (2007-2012) of FMR LLC.
Craig S. Brown (1977)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Brown also serves as Assistant Treasurer of other funds. Mr. Brown is an employee of Fidelity Investments (2013-present).
John J. Burke III (1964)
Year of Election or Appointment: 2018
Chief Financial Officer
Mr. Burke also serves as Chief Financial Officer of other funds. Mr. Burke serves as Head of Investment Operations for Fidelity Fund and Investment Operations (2018-present) and is an employee of Fidelity Investments (1998-present). Previously Mr. Burke served as head of Asset Management Investment Operations (2012-2018).
William C. Coffey (1969)
Year of Election or Appointment: 2019
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Secretary and CLO of certain funds (2018-2019); CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2018-2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2018-2019); CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2018-2019); and Assistant Secretary of certain funds (2009-2018).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2018
Vice President
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Co-Head of Equity (2018-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Executive Vice President of Fidelity SelectCo, LLC (2019), Head of Global Equity Research (2016-2018), Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015) and as a Director of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2017).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Laura M. Del Prato (1964)
Year of Election or Appointment: 2018
Assistant Treasurer
Ms. Del Prato also serves as an officer of other funds. Ms. Del Prato is an employee of Fidelity Investments (2017-present). Prior to joining Fidelity Investments, Ms. Del Prato served as a Managing Director and Treasurer of the JPMorgan Mutual Funds (2014-2017). Prior to JPMorgan, Ms. Del Prato served as a partner at Cohen Fund Audit Services (accounting firm, 2012-2013) and KPMG LLP (accounting firm, 2004-2012).
Colm A. Hogan (1973)
Year of Election or Appointment: 2020
Assistant Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2005-present). Previously, Mr. Hogan served as Deputy Treasurer of certain Fidelity® funds (2016-2020) and Assistant Treasurer of certain Fidelity® funds (2016-2018).
Pamela R. Holding (1964)
Year of Election or Appointment: 2018
Vice President
Ms. Holding also serves as Vice President of other funds. Ms. Holding serves as Co-Head of Equity (2018-present) and is an employee of Fidelity Investments (2013-present). Previously, Ms. Holding served as Executive Vice President of Fidelity SelectCo, LLC (2019) and as Chief Investment Officer of Fidelity Institutional Asset Management (2013-2018).
Cynthia Lo Bessette (1969)
Year of Election or Appointment: 2019
Secretary and Chief Legal Officer (CLO)
Ms. Lo Bessette also serves as an officer of other funds. Ms. Lo Bessette serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company LLC (investment adviser firm, 2019-present); and CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2019-present). She is a Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2019-present), and is an employee of Fidelity Investments. Previously, Ms. Lo Bessette served as CLO, Secretary, and Senior Vice President of FMR Co., Inc. (investment adviser firm, 2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2019). Prior to joining Fidelity Investments, Ms. Lo Bessette was Executive Vice President, General Counsel (2016-2019) and Senior Vice President, Deputy General Counsel (2015-2016) of OppenheimerFunds (investment management company) and Deputy Chief Legal Officer (2013-2015) of Jennison Associates LLC (investment adviser firm).
Chris Maher (1972)
Year of Election or Appointment: 2020
Deputy Treasurer
Mr. Maher also serves as an officer of other funds. Mr. Maher serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), and is an employee of Fidelity Investments (2008-present). Previously, Mr. Maher served as Assistant Treasurer of certain funds (2013-2020); Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company LLC (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Compliance Officer of FMR Co., Inc. (investment adviser firm, 2016-2019), as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. Ms. Smith serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), is an employee of Fidelity Investments (2009-present), and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Assistant Treasurer (2013-2019) and Deputy Treasurer (2013-2016) of certain Fidelity® funds.
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche LLP (accounting firm, 2005-2013).
Jim Wegmann (1979)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Wegmann also serves as Assistant Treasurer of other funds. Mr. Wegmann is an employee of Fidelity Investments (2011-present).
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 (August 1, 2019 to January 31, 2020).
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. 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. 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.
| | Annualized Expense Ratio-A | Beginning
Account Value
August 1, 2019 | Ending
Account Value
January 31, 2020 | Expenses Paid
During Period-B
August 1, 2019
to January 31, 2020 |
| Class A | .76% | | | |
| Actual | | $1,000.00 | $1,023.40 | $3.88 |
| Hypothetical-C | | $1,000.00 | $1,021.37 | $3.87 |
| Class M | 1.03% | | | |
| Actual | | $1,000.00 | $1,022.50 | $5.25 |
| Hypothetical-C | | $1,000.00 | $1,020.01 | $5.24 |
| Class C | 1.51% | | | |
| Actual | | $1,000.00 | $1,019.80 | $7.69 |
| Hypothetical-C | | $1,000.00 | $1,017.59 | $7.68 |
| Mid Cap Value | .46% | | | |
| Actual | | $1,000.00 | $1,025.10 | $2.35 |
| Hypothetical-C | | $1,000.00 | $1,022.89 | $2.35 |
| Class I | .46% | | | |
| Actual | | $1,000.00 | $1,025.00 | $2.35 |
| Hypothetical-C | | $1,000.00 | $1,022.89 | $2.35 |
| Class Z | .33% | | | |
| Actual | | $1,000.00 | $1,025.80 | $1.69 |
| Hypothetical-C | | $1,000.00 | $1,023.54 | $1.68 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
Class A designates 100%; Class M designates 100%; Class C designates 100%; Mid Cap Value designates 95%; Class I designates 96% and Class Z designates 88% of the dividends distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
Class A designates 100%; Class M designates 100%; Class C designates 100%; Mid Cap Value designates 100%; Class I designates 100% and Class Z designates 93%; of the dividends distributed during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
Mid Cap Value designates 1% and Class Z designates 8% of the dividends distributed during the fiscal year as a section 199A dividend.
The fund will notify shareholders in January 2021 of amounts for use in preparing 2020 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Mid Cap Value Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company LLC (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. FMR and the sub-advisers are referred to herein as the Investment Advisers. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
Approval of Amended and Restated Advisory Contracts. At its November 2019 meeting, the Board unanimously determined to approve an amended and restated management contract and sub-advisory agreements (Amended and Restated Contracts) for a stub period of January 1, 2020 through January 31, 2020 in connection with a consolidation of certain of Fidelity's advisory businesses. The Board considered that, on or about January 1, 2020, FMR Co., Inc. (FMRC) expected to merge with and into FMR and, after the merger, FMR expected to redomicile as a Delaware limited liability company. The Board also approved the termination of the sub-advisory agreement with FMRC upon the completion of the merger. The Board noted that references to FMR in the Amended and Restated Contracts would be updated to reflect FMR's new form of organization and domicile and considered that the definition of "group assets" for purposes of the fund's group fee would be modified to avoid double-counting assets once the reorganization is complete. The Board also noted Fidelity's assurance that neither the planned consolidation nor the Amended and Restated Contracts will change the investment processes, the level or nature of services provided, the resources and personnel allocated, trading and compliance operations, or any fees paid by the fund.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to review matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through joint ad hoc committees to discuss certain matters relevant to all of the Fidelity funds.
At its January 2020 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services provided by and the profits realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and are realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value and convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information over the Internet and through telephone representatives, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
The Board noted that it and the boards of certain other Fidelity funds had formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to Fidelity's investment research process, which includes meetings with management of issuers of securities in which the funds invest, and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and ETFs with innovative structures, strategies and pricing and making other enhancements to meet client needs; (iv) launching new share classes of existing funds; (v) eliminating purchase minimums and broadening eligibility requirements for certain funds and share classes; (vi) reducing management fees and total expenses for certain target date funds and index funds; (vii) lowering expense caps for certain existing funds and classes, and converting certain voluntary expense caps to contractual caps, to reduce expenses borne by shareholders; (viii) rationalizing product lines and gaining increased efficiencies from fund mergers, liquidations, and share class consolidations; (ix) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; and (x) continuing to implement enhancements to further strengthen Fidelity's product line to increase investors' probability of success in achieving their investment goals, including retirement income goals.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history. The Board noted that there was a portfolio management change for the fund in June 2017. The Board will continue to monitor closely the fund's performance as the new portfolio manager(s) establishes a track record.
The Board took into account discussions that occur at Board meetings throughout the year with representatives of the Investment Advisers about fund investment performance. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund for different time periods, measured against an appropriate securities market index (benchmark index) and a peer group of funds with similar objectives (peer group), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods ended June 30, 2019, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.
Fidelity Mid Cap Value Fund
The Board considered the fund's underperformance for different time periods ended June 30, 2019 (based on the performance of Class A shares of the fund). The Board noted that the fund's underperformance has continued since the Board approved the management contract in January 2019. The Board's discussions with FMR regarding underperformance cover topics including, but not limited to: the longer-term track record of a fund's portfolio manager(s); broader trends in the market that may adversely impact a fund's performance; and attribution reports on contributors to the fund's underperformance. The Board engages with FMR on steps that might be taken to address a fund's underperformance. For a fund with underperformance over longer periods of time, the Board typically monitors the fund's performance more closely.
The Board also considered that the fund's management fee is subject to upward or downward adjustment depending upon whether, and to what extent, the fund's investment performance for the performance period (a rolling 36-month period) exceeds, or is exceeded by, a securities index, thus leading to a performance adjustment for the same period. The Board noted that the performance adjustment provides FMR with a strong economic incentive to seek to achieve superior long-term performance for the fund's shareholders and helps to more closely align the interests of FMR and the shareholders of the fund.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable investment mandates. Combining Lipper investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods ended June 30 (December 31 for periods prior to 2018) shown in basis points (BP) in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps, and without giving effect to the fund's performance adjustment, relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG %s and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Sized Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure without taking into account performance adjustments, if any. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked and the impact of the fund's performance adjustment, is also included in the chart and was considered by the Board.
Fidelity Mid Cap Value Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for the 12-month period ended June 30, 2019. The Board also noted the effect of the fund's performance adjustment, if any, on the fund's management fee ranking.
The Board noted that it and the boards of other Fidelity funds formed an ad hoc Committee on Group Fee, which meets periodically, to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee rate as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board noted the impact of the fund's performance adjustment. The Board also noted that Fidelity may agree to waive fees or reimburse expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expense ratio of each class ranked below the competitive median for the 12-month period ended June 30, 2019.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted that a joint ad hoc committee created by it and the boards of other Fidelity funds periodically reviews and compares Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds and also noted the most recent findings of the committee. The Board noted that the committee's review included a consideration of the differences in services provided, fees charged, and costs incurred, as well as competition in the markets serving the different categories of clients.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationships with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies and the full Board approves such changes.
PricewaterhouseCoopers LLP (PwC), auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and potential indirect benefits such businesses may have received as a result of their association with Fidelity's mutual fund business (i.e., fall-out benefits) as well as cases where Fidelity's affiliates may benefit from the funds' business. The Board noted that changes to fall-out benefits year-over-year reflect business developments at Fidelity's various businesses. The Board considered that a joint ad hoc committee created by it and the boards of other Fidelity funds had recently been established, and met periodically, to evaluate potential fall-out benefits (PFOB Committee). The Board noted that the PFOB Committee, among other things: (i) discussed the legal framework surrounding potential fall-out benefits; (ii) reviewed the Board's responsibilities and approach to potential fall-out benefits; and (iii) reviewed practices employed by competitor funds regarding the review of potential fall-out benefits.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund, including the conclusions of the PFOB Committee, and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board also noted that a committee (the Economies of Scale Committee) created by it and the boards of other Fidelity funds periodically analyzes whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total "group assets" increase, and for higher group fee rates as total "group assets" decrease ("group assets" as defined in the management contract). FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total Fidelity fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will benefit from lower management fees as "group assets" increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' advisory contracts, the Board requested and received additional information on certain topics, including: (i) fund flow and performance trends, in particular the underperformance of certain funds and strategies, and Fidelity's long-term strategies for certain funds; (ii) consideration of performance fees for additional funds; (iii) changes in Fidelity's non-fund businesses and the impact of such changes on the funds; (iv) metrics for evaluating index fund and ETF performance and information about ETF trading characteristics; (v) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (vi) the expense structures for different funds and classes; (vii) information regarding other accounts managed by Fidelity, including collective investment trusts and separately managed accounts; and (viii) Fidelity's philosophies and strategies for evaluating funds and classes with lower or declining asset levels.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee arrangements are fair and reasonable, and that the fund's Amended and Restated Contracts should be approved and the fund's Advisory Contracts should be renewed.
MCV-ANN-0320
1.900180.110
Fidelity Flex® Funds
Fidelity Flex® Mid Cap Value Fund
Annual Report
January 31, 2020
See the inside front cover for important information about access to your fund’s shareholder reports.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of a fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a financial advisor, broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a fund electronically, by contacting your financial intermediary. For Fidelity customers, visit Fidelity's web site or call Fidelity using the contact information listed below.
You may elect to receive all future reports in paper free of charge. If you wish to continue receiving paper copies of your shareholder reports, you may contact your financial intermediary or, if you are a Fidelity customer, visit Fidelity’s website, or call Fidelity at the applicable toll-free number listed below. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
| Account Type | Website | Phone Number |
| Brokerage, Mutual Fund, or Annuity Contracts: | fidelity.com/mailpreferences | 1-800-343-3548 |
| Employer Provided Retirement Accounts: | netbenefits.fidelity.com/preferences (choose 'no' under Required Disclosures to continue to print) | 1-800-343-0860 |
| Advisor Sold Accounts Serviced Through Your Financial Intermediary: | Contact Your Financial Intermediary | Your Financial Intermediary's phone number |
| Advisor Sold Accounts Serviced by Fidelity: | institutional.fidelity.com | 1-877-208-0098 |
Contents
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 1-800-544-3455 (for managed account clients) or 1-800-835-5092 (for retirement plan participants) 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. © 2020 FMR LLC. All rights reserved.
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-PORT. Forms N-PORT are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-PORT 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.institutional.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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended January 31, 2020 | Past 1 year | Life of fundA |
| Fidelity Flex® Mid Cap Value Fund | 16.26% | 6.42% |
A From March 8, 2017
$10,000 Over Life of Fund
Let's say hypothetically that $10,000 was invested in Fidelity Flex® Mid Cap Value Fund on March 8, 2017, when the fund started.
The chart shows how the value of your investment would have changed, and also shows how the Russell Midcap® Value Index performed over the same period.
| Period Ending Values |
| $11,978 | Fidelity Flex® Mid Cap Value Fund |
| $12,028 | Russell Midcap® Value Index |
Management's Discussion of Fund Performance
Market Recap: U.S. stocks rolled for the 12 months ending January 31, 2020, with the S&P 500
® index gaining 21.68%, despite persistent, nagging concerns about global economic growth and trade. After a rough end to 2018, equities sharply reversed course to begin 2019 amid upbeat company earnings and signs the Federal Reserve may pause on rates. The uptrend extended until May, when the index sunk as trade talks between the U.S. and China broke down. The bull market roared back to record a series of highs in July, when the Fed cut interest rates for the first time since 2008. Volatility intensified in August, as the Treasury yield curve inverted, which some investors viewed as a sign the U.S. economy could be heading for recession. But the market proved resilient, hitting a new high on October 30, when the Fed lowered rates for the third time in 2019, and moving higher through December 31. The new year began with a flattish January, with growing anxiety related to the new coronavirus outbreak and its impact on the global economy. By sector, information technology (+46%) led the way, driven by strong growth trends. The defensive utilities sector (+30%) also stood out, while communication services and consumer staples were about in line with the broader market. Conversely, energy (-11%) was by far the weakest – struggling due to sluggish oil prices – followed by several strong gainers that still lagged: materials (+11%), health care (+12%), industrials (+16%), consumer discretionary (+17%), and financials and real estate (+18% each).
Comments from Portfolio Manager Matthew Friedman: For the fiscal year, the fund gained 16.26%, outperforming the 12.96% advance of the benchmark Russell Midcap
® Value Index. Stock picking contributed to the fund’s return versus the benchmark, especially within the financials, real estate, consumer staples and energy sectors. In terms of individual stocks, non-benchmark exposure to private-equity companies and alternative asset managers Apollo Global Management (+70%) and Blackstone Group (+43%) were notable individual contributors. Both announced that they would shift from publicly traded partnerships to C-corporations, in order to benefit from 2017 changes in corporate taxes and to make their stocks more accessible to retail investors, index funds and exchange-traded funds (ETFs). We sold the fund’s stake in Blackstone before the end of the period. Also lifting the portfolio’s relative result was an out-of-benchmark position in Equinix (+53%),a real estate firm that specializes in internet connection and data centers. Conversely, security selection among information technology stocks hurt, especially the fund’s untimely positioning in Conduent (-67%), a provider of technology-led business process services. The firm’s shares declined sharply in May, after the CEO announced plans to step down. An overweighting in IT services provider DXC Technology (-49%) also weighed on performance, as the stock fell sharply in August, after the company slashed its full-year revenue guidance. The fund’s cash position of about 2%, on average, also detracted against a backdrop of rising equity markets the past 12 months.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Open for comments: Open for comments.
Investment Summary (Unaudited)
Top Ten Stocks as of January 31, 2020
| | % of fund's net assets |
| Sempra Energy | 2.7 |
| Edison International | 2.6 |
| CubeSmart | 2.5 |
| Equity Lifestyle Properties, Inc. | 2.3 |
| CBRE Group, Inc. | 2.2 |
| Vistra Energy Corp. | 2.1 |
| National Retail Properties, Inc. | 2.0 |
| Exelon Corp. | 1.9 |
| Capital One Financial Corp. | 1.8 |
| Raymond James Financial, Inc. | 1.8 |
| | 21.9 |
Top Five Market Sectors as of January 31, 2020
| | % of fund's net assets |
| Financials | 18.6 |
| Industrials | 14.4 |
| Real Estate | 13.2 |
| Utilities | 9.3 |
| Consumer Discretionary | 8.4 |
Asset Allocation (% of fund's net assets)
| As of January 31, 2020* |
| | Stocks and Equity Futures | 99.2% |
| | Short-Term Investments and Net Other Assets (Liabilities) | 0.8% |
* Foreign investments - 10.2%
Schedule of Investments January 31, 2020
Showing Percentage of Net Assets
| Common Stocks - 98.6% | | | |
| | | Shares | Value |
| COMMUNICATION SERVICES - 3.2% | | | |
| Diversified Telecommunication Services - 0.9% | | | |
| GCI Liberty, Inc. (a) | | 4,523 | $330,993 |
| Media - 2.3% | | | |
| Liberty Global PLC Class C (a) | | 16,335 | 318,206 |
| Nexstar Broadcasting Group, Inc. Class A | | 4,243 | 514,039 |
| | | | 832,245 |
|
| TOTAL COMMUNICATION SERVICES | | | 1,163,238 |
|
| CONSUMER DISCRETIONARY - 8.4% | | | |
| Distributors - 1.1% | | | |
| LKQ Corp. (a) | | 12,159 | 397,417 |
| Diversified Consumer Services - 1.0% | | | |
| Laureate Education, Inc. Class A (a) | | 16,805 | 350,216 |
| Hotels, Restaurants & Leisure - 0.2% | | | |
| Eldorado Resorts, Inc. (a) | | 1,111 | 66,416 |
| Household Durables - 1.1% | | | |
| Mohawk Industries, Inc. (a) | | 3,131 | 412,290 |
| Internet & Direct Marketing Retail - 1.1% | | | |
| eBay, Inc. | | 12,201 | 409,466 |
| Leisure Products - 0.9% | | | |
| Mattel, Inc. (a) | | 21,209 | 310,288 |
| Specialty Retail - 0.7% | | | |
| Lowe's Companies, Inc. | | 2,320 | 269,677 |
| Textiles, Apparel & Luxury Goods - 2.3% | | | |
| Capri Holdings Ltd. (a) | | 13,443 | 402,752 |
| PVH Corp. | | 4,886 | 425,913 |
| | | | 828,665 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 3,044,435 |
|
| CONSUMER STAPLES - 6.9% | | | |
| Food & Staples Retailing - 1.5% | | | |
| U.S. Foods Holding Corp. (a) | | 14,043 | 564,107 |
| Food Products - 3.1% | | | |
| Conagra Brands, Inc. | | 17,693 | 582,454 |
| Darling International, Inc. (a) | | 19,843 | 538,341 |
| | | | 1,120,795 |
| Household Products - 1.3% | | | |
| Spectrum Brands Holdings, Inc. | | 7,652 | 469,909 |
| Tobacco - 1.0% | | | |
| Altria Group, Inc. | | 7,754 | 368,548 |
|
| TOTAL CONSUMER STAPLES | | | 2,523,359 |
|
| ENERGY - 6.1% | | | |
| Oil, Gas & Consumable Fuels - 6.1% | | | |
| Cheniere Energy, Inc. (a) | | 8,676 | 513,966 |
| Golar LNG Ltd. | | 16,999 | 163,530 |
| Hess Corp. | | 9,180 | 519,313 |
| Noble Energy, Inc. | | 24,527 | 484,899 |
| Ovintiv, Inc. | | 14,198 | 221,220 |
| Valero Energy Corp. | | 3,993 | 336,650 |
| | | | 2,239,578 |
| FINANCIALS - 18.6% | | | |
| Banks - 4.0% | | | |
| BB&T Corp. | | 12,475 | 643,336 |
| East West Bancorp, Inc. | | 8,664 | 397,158 |
| First Citizens Bancshares, Inc. | | 324 | 170,690 |
| Wells Fargo & Co. | | 5,180 | 243,149 |
| | | | 1,454,333 |
| Capital Markets - 7.9% | | | |
| Ameriprise Financial, Inc. | | 3,718 | 614,994 |
| Apollo Global Management LLC Class A | | 12,923 | 611,516 |
| Lazard Ltd. Class A | | 9,782 | 410,453 |
| LPL Financial | | 6,369 | 586,776 |
| Raymond James Financial, Inc. | | 7,144 | 653,176 |
| | | | 2,876,915 |
| Consumer Finance - 4.9% | | | |
| Capital One Financial Corp. | | 6,658 | 664,468 |
| Discover Financial Services | | 4,961 | 372,720 |
| OneMain Holdings, Inc. | | 5,892 | 249,644 |
| SLM Corp. | | 46,573 | 508,577 |
| | | | 1,795,409 |
| Insurance - 1.8% | | | |
| The Travelers Companies, Inc. | | 4,820 | 634,408 |
|
| TOTAL FINANCIALS | | | 6,761,065 |
|
| HEALTH CARE - 5.9% | | | |
| Biotechnology - 0.9% | | | |
| Alexion Pharmaceuticals, Inc. (a) | | 3,447 | 342,597 |
| Health Care Providers & Services - 3.8% | | | |
| Centene Corp. (a) | | 9,198 | 577,726 |
| Cigna Corp. | | 2,298 | 442,089 |
| Humana, Inc. | | 1,072 | 360,449 |
| | | | 1,380,264 |
| Pharmaceuticals - 1.2% | | | |
| Jazz Pharmaceuticals PLC (a) | | 2,988 | 428,330 |
|
| TOTAL HEALTH CARE | | | 2,151,191 |
|
| INDUSTRIALS - 14.4% | | | |
| Aerospace & Defense - 2.0% | | | |
| General Dynamics Corp. | | 1,305 | 228,949 |
| Huntington Ingalls Industries, Inc. | | 1,932 | 504,252 |
| | | | 733,201 |
| Airlines - 0.9% | | | |
| American Airlines Group, Inc. | | 12,006 | 322,241 |
| Commercial Services & Supplies - 1.1% | | | |
| The Brink's Co. | | 4,697 | 395,440 |
| Construction & Engineering - 2.9% | | | |
| AECOM (a) | | 12,156 | 586,284 |
| Williams Scotsman Corp. (a) | | 25,169 | 474,436 |
| | | | 1,060,720 |
| Machinery - 0.6% | | | |
| Allison Transmission Holdings, Inc. | | 5,175 | 228,735 |
| Road & Rail - 1.3% | | | |
| Knight-Swift Transportation Holdings, Inc. Class A | | 1,578 | 58,512 |
| Ryder System, Inc. | | 8,583 | 409,581 |
| | | | 468,093 |
| Trading Companies & Distributors - 5.6% | | | |
| AerCap Holdings NV (a) | | 8,668 | 490,695 |
| Ashtead Group PLC | | 9,144 | 296,433 |
| Fortress Transportation & Infrastructure Investors LLC | | 15,317 | 293,780 |
| HD Supply Holdings, Inc. (a) | | 12,731 | 518,661 |
| Univar, Inc. (a) | | 21,201 | 456,882 |
| | | | 2,056,451 |
|
| TOTAL INDUSTRIALS | | | 5,264,881 |
|
| INFORMATION TECHNOLOGY - 6.6% | | | |
| Communications Equipment - 0.9% | | | |
| CommScope Holding Co., Inc. (a) | | 25,577 | 311,656 |
| Electronic Equipment & Components - 0.9% | | | |
| Flextronics International Ltd. (a) | | 23,692 | 311,550 |
| IT Services - 1.6% | | | |
| Conduent, Inc. (a) | | 31,731 | 135,809 |
| DXC Technology Co. | | 13,985 | 445,842 |
| | | | 581,651 |
| Semiconductors & Semiconductor Equipment - 1.4% | | | |
| Marvell Technology Group Ltd. | | 2,944 | 70,774 |
| NXP Semiconductors NV | | 3,609 | 457,838 |
| | | | 528,612 |
| Software - 1.8% | | | |
| Micro Focus International PLC | | 15,743 | 211,421 |
| SS&C Technologies Holdings, Inc. | | 7,022 | 442,456 |
| | | | 653,877 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 2,387,346 |
|
| MATERIALS - 6.0% | | | |
| Chemicals - 4.3% | | | |
| DuPont de Nemours, Inc. | | 6,791 | 347,563 |
| Olin Corp. | | 39,724 | 590,696 |
| The Chemours Co. LLC | | 15,299 | 212,197 |
| The Mosaic Co. | | 14,322 | 284,148 |
| Tronox Holdings PLC | | 18,163 | 153,659 |
| | | | 1,588,263 |
| Containers & Packaging - 1.7% | | | |
| Crown Holdings, Inc. (a) | | 8,276 | 612,672 |
|
| TOTAL MATERIALS | | | 2,200,935 |
|
| REAL ESTATE - 13.2% | | | |
| Equity Real Estate Investment Trusts (REITs) - 11.0% | | | |
| American Tower Corp. | | 1,728 | 400,447 |
| CubeSmart | | 28,719 | 909,531 |
| Douglas Emmett, Inc. | | 12,126 | 503,229 |
| Equinix, Inc. | | 1,053 | 620,986 |
| Equity Lifestyle Properties, Inc. | | 11,747 | 854,594 |
| National Retail Properties, Inc. | | 12,957 | 725,592 |
| | | | 4,014,379 |
| Real Estate Management & Development - 2.2% | | | |
| CBRE Group, Inc. (a) | | 13,129 | 801,525 |
|
| TOTAL REAL ESTATE | | | 4,815,904 |
|
| UTILITIES - 9.3% | | | |
| Electric Utilities - 4.5% | | | |
| Edison International | | 12,271 | 939,345 |
| Exelon Corp. | | 14,334 | 682,155 |
| | | | 1,621,500 |
| Independent Power and Renewable Electricity Producers - 2.1% | | | |
| Vistra Energy Corp. | | 34,164 | 769,373 |
| Multi-Utilities - 2.7% | | | |
| Sempra Energy | | 6,225 | 999,983 |
|
| TOTAL UTILITIES | | | 3,390,856 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $34,585,022) | | | 35,942,788 |
| | | Principal Amount | Value |
|
| U.S. Treasury Obligations - 0.1% | | | |
| U.S. Treasury Bills, yield at date of purchase 1.52% to 1.52% 2/6/20 to 3/12/20 (b) | | | |
| (Cost $19,981) | | 20,000 | 19,983 |
| | | Shares | Value |
|
| Money Market Funds - 1.1% | | | |
| Fidelity Cash Central Fund 1.58% (c) | | | |
| (Cost $404,284) | | 404,203 | 404,284 |
| TOTAL INVESTMENT IN SECURITIES - 99.8% | | | |
| (Cost $35,009,287) | | | 36,367,055 |
| NET OTHER ASSETS (LIABILITIES) - 0.2% | | | 78,467 |
| NET ASSETS - 100% | | | $36,445,522 |
| Futures Contracts | | | | | |
| | Number of contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/(Depreciation) |
| Purchased | | | | | |
| Equity Index Contracts | | | | | |
| CME E-mini S&P MidCap 400 Index Contracts (United States) | 1 | March 2020 | $200,700 | $(2,832) | $(2,832) |
The notional amount of futures purchased as a percentage of Net Assets is 0.6%
Legend
(a) Non-income producing
(b) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $14,983.
(c) Affiliated fund that is generally 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $5,721 |
| Total | $5,721 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations, if applicable.
Investment Valuation
The following is a summary of the inputs used, as of January 31, 2020, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Communication Services | $1,163,238 | $1,163,238 | $-- | $-- |
| Consumer Discretionary | 3,044,435 | 3,044,435 | -- | -- |
| Consumer Staples | 2,523,359 | 2,523,359 | -- | -- |
| Energy | 2,239,578 | 2,239,578 | -- | -- |
| Financials | 6,761,065 | 6,761,065 | -- | -- |
| Health Care | 2,151,191 | 2,151,191 | -- | -- |
| Industrials | 5,264,881 | 5,264,881 | -- | -- |
| Information Technology | 2,387,346 | 2,175,925 | 211,421 | -- |
| Materials | 2,200,935 | 2,200,935 | -- | -- |
| Real Estate | 4,815,904 | 4,815,904 | -- | -- |
| Utilities | 3,390,856 | 3,390,856 | -- | -- |
| U.S. Government and Government Agency Obligations | 19,983 | -- | 19,983 | -- |
| Money Market Funds | 404,284 | 404,284 | -- | -- |
| Total Investments in Securities: | $36,367,055 | $36,135,651 | $231,404 | $-- |
| Derivative Instruments: | | | | |
| Liabilities | | | | |
| Futures Contracts | $(2,832) | $(2,832) | $-- | $-- |
| Total Liabilities | $(2,832) | $(2,832) | $-- | $-- |
| Total Derivative Instruments: | $(2,832) | $(2,832) | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of January 31, 2020. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.
| Primary Risk Exposure / Derivative Type | Value |
| | Asset | Liability |
| Equity Risk | | |
| Futures Contracts(a) | $0 | $(2,832) |
| Total Equity Risk | 0 | (2,832) |
| Total Value of Derivatives | $0 | $(2,832) |
(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Schedule of Investments. In the Statement of Assets and Liabilities, the period end daily variation margin is included in receivable or payable for daily variation margin on futures contracts, and the net cumulative appreciation (depreciation) is included in Total accumulated earnings (loss).
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 89.8% |
| United Kingdom | 2.7% |
| Netherlands | 2.5% |
| Bermuda | 1.8% |
| Ireland | 1.2% |
| British Virgin Islands | 1.1% |
| Others (Individually Less Than 1%) | 0.9% |
| | 100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | January 31, 2020 |
| Assets | | |
Investment in securities, at value — See accompanying schedule:
Unaffiliated issuers (cost $34,605,003) | $35,962,771 | |
| Fidelity Central Funds (cost $404,284) | 404,284 | |
| Total Investment in Securities (cost $35,009,287) | | $36,367,055 |
| Cash | | 42,428 |
| Foreign currency held at value (cost $151) | | 151 |
| Receivable for fund shares sold | | 25,329 |
| Dividends receivable | | 16,288 |
| Distributions receivable from Fidelity Central Funds | | 727 |
| Total assets | | 36,451,978 |
| Liabilities | | |
| Payable for fund shares redeemed | $2,306 | |
| Payable for daily variation margin on futures contracts | 4,150 | |
| Total liabilities | | 6,456 |
| Net Assets | | $36,445,522 |
| Net Assets consist of: | | |
| Paid in capital | | $35,112,439 |
| Total accumulated earnings (loss) | | 1,333,083 |
| Net Assets | | $36,445,522 |
| Net Asset Value, offering price and redemption price per share ($36,445,522 ÷ 3,316,901 shares) | | $10.99 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended January 31, 2020 |
| Investment Income | | |
| Dividends | | $218,261 |
| Interest | | 58 |
| Income from Fidelity Central Funds | | 5,721 |
| Total income | | 224,040 |
| Expenses | | |
| Independent trustees' fees and expenses | $49 | |
| Commitment fees | 24 | |
| Total expenses | | 73 |
| Net investment income (loss) | | 223,967 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 69,606 | |
| Foreign currency transactions | 83 | |
| Futures contracts | 7,952 | |
| Total net realized gain (loss) | | 77,641 |
| Change in net unrealized appreciation (depreciation) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 1,457,667 | |
| Assets and liabilities in foreign currencies | (9) | |
| Futures contracts | (2,832) | |
| Total change in net unrealized appreciation (depreciation) | | 1,454,826 |
| Net gain (loss) | | 1,532,467 |
| Net increase (decrease) in net assets resulting from operations | | $1,756,434 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $223,967 | $62,629 |
| Net realized gain (loss) | 77,641 | 16,015 |
| Change in net unrealized appreciation (depreciation) | 1,454,826 | (338,241) |
| Net increase (decrease) in net assets resulting from operations | 1,756,434 | (259,597) |
| Distributions to shareholders | (209,901) | (192,570) |
| Share transactions | | |
| Proceeds from sales of shares | 36,549,568 | 2,556,315 |
| Reinvestment of distributions | 209,901 | 192,570 |
| Cost of shares redeemed | (4,581,492) | (2,444,930) |
| Net increase (decrease) in net assets resulting from share transactions | 32,177,977 | 303,955 |
| Total increase (decrease) in net assets | 33,724,510 | (148,212) |
| Net Assets | | |
| Beginning of period | 2,721,012 | 2,869,224 |
| End of period | $36,445,522 | $2,721,012 |
| Other Information | | |
| Shares | | |
| Sold | 3,433,071 | 240,625 |
| Issued in reinvestment of distributions | 18,893 | 20,748 |
| Redeemed | (421,308) | (232,742) |
| Net increase (decrease) | 3,030,656 | 28,631 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Flex Mid Cap Value Fund
| | | | |
| Years ended January 31, | 2020 | 2019 | 2018 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $9.51 | $11.14 | $10.00 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .18 | .20 | .17 |
| Net realized and unrealized gain (loss) | 1.37 | (1.18) | 1.10 |
| Total from investment operations | 1.55 | (.98) | 1.27 |
| Distributions from net investment income | (.07) | (.21) | (.10) |
| Distributions from net realized gain | – | (.44) | (.03) |
| Total distributions | (.07) | (.65) | (.13) |
| Net asset value, end of period | $10.99 | $9.51 | $11.14 |
| Total ReturnC | 16.26% | (8.60)% | 12.72% |
| Ratios to Average Net AssetsD,E | | | |
| Expenses before reductionsF | -% | -% | - %G |
| Expenses net of fee waivers, if anyF | -% | -% | - %G |
| Expenses net of all reductionsF | -% | -% | - %G |
| Net investment income (loss) | 1.71% | 1.88% | 1.76%G |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $36,446 | $2,721 | $2,869 |
| Portfolio turnover rateH | 89% | 218% | 137%G |
A For the period March 8, 2017 (commencement of operations) to January 31, 2018.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D 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.
E Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
F Amount represents less than .005%.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended January 31, 2020
1. Organization.
Fidelity Flex Mid Cap Value Fund (the Fund) is a fund of Fidelity Devonshire Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. 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 is available only to certain fee-based accounts offered by Fidelity.
Effective January 1, 2020:
Investment advisers Fidelity Investments Money Management, Inc., FMR Co., Inc., and Fidelity SelectCo, LLC, merged with and into Fidelity Management & Research Company. In connection with the merger transactions, the resulting, merged investment adviser was then redomiciled from Massachusetts to Delaware, changed its corporate structure from a corporation to a limited liability company, and changed its name to "Fidelity Management & Research Company LLC".
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser 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 the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date ranged from less than .005% to .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment 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 Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
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)
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 a third party pricing vendor 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 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 may be used and would be categorized as Level 2 in the hierarchy. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
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 January 31, 2020 is included at the end of the Fund's Schedule of Investments.
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 rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, 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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 U.S. Federal income taxes is required. As of January 31, 2020, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The 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.
Distributions are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to futures contracts, foreign currency transactions, market discount, partnerships and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
| Gross unrealized appreciation | $2,777,407 |
| Gross unrealized depreciation | (1,666,003) |
| Net unrealized appreciation (depreciation) | $1,111,404 |
| Tax Cost | $35,255,651 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $216,747 |
| Undistributed long-term capital gain | $4,923 |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,111,415 |
The tax character of distributions paid was as follows:
| | January 31, 2020 | January 31, 2019 |
| Ordinary Income | $ 209,901 | $ 190,954 |
| Long-term Capital Gains | - | 1,616 |
| Total | $209,901 | $ 192,570 |
4. Derivative Instruments.
Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.
The Fund used derivatives to increase returns and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
The Fund's use of derivatives increased or decreased its exposure to the following risk:
| Equity Risk | Equity risk relates to the fluctuations in the value of financial instruments as a result of changes in market prices (other than those arising from interest rate risk or foreign exchange risk), whether caused by factors specific to an individual investment, its issuer, or all factors affecting all instruments traded in a market or market segment.
|
The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade.
Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.
Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the stock market.
Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin on futures contracts in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on futures contracts during the period is presented in the Statement of Operations.
Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts". The notional amount at value reflects each contract's exposure to the underlying instrument or index at period end and is representative of volume of activity during the period. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, aggregated $43,175,836 and $11,429,765, respectively.
6. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company LLC (the investment adviser) and its affiliates provide the Fund with investment management related services and the Fund does not pay any fees for these services. Under the management contract, the investment adviser or an affiliate pays all other expenses of the Fund, excluding fees and expenses of the independent Trustees, and certain miscellaneous expenses such as proxy and shareholder meeting expenses.
Brokerage Commissions. A portion of portfolio transactions were placed with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were as follows:
| | Amount |
| Fidelity Flex Mid Cap Value Fund | $667 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
7. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser 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 $24 and is reflected in Commitment fees on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Fidelity Devonshire Trust and Shareholders of Fidelity Flex Mid Cap Value Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities of Fidelity Flex Mid Cap Value Fund (the "Fund"), a fund of Fidelity Devonshire Trust, including the schedule of investments, as of January 31, 2020, the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the two years in the period then ended and for the period from March 8, 2017 (commencement of operations) to January 31, 2018, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of January 31, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and for the period from March 8, 2017 (commencement of operations) to January 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of January 31, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
March 16, 2020
We have served as the auditor of one or more of the Fidelity investment companies since 1999.
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Michael E. Wiley, each of the Trustees oversees 302 funds. Mr. Wiley oversees 199 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the Investment Company Act of 1940 (1940 Act)) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-3455 (for managed account clients) or 1-800-835-5092 (for retirement plan participants).
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and other equity funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey is an Overseer Emeritus for the Boston Symphony Orchestra, a Director of Artis-Naples, and a Trustee of Brewster Academy in Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-2018), Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust[s] or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks served as Chief Operating Officer and as a member of the Board of The Depository Trust & Clearing Corporation (financial markets infrastructure), President, Chief Operating Officer and a member of the Board of The Depository Trust Company (DTC), President and a member of the Board of the National Securities Clearing Corporation (NSCC), Chief Executive Officer and a member of the Board of the Government Securities Clearing Corporation and Chief Executive Officer and a member of the Board of the Mortgage-Backed Securities Clearing Corporation. Mr. Dirks currently serves as a member of the Finance Committee (2016-present) and Board (2017-present) and is Treasurer (2018-present) of the Asolo Repertory Theatre.
Donald F. Donahue (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Donahue also serves as Trustee of other Fidelity® funds. Mr. Donahue serves as President and Chief Executive Officer of Miranda Partners, LLC (risk consulting for the financial services industry, 2012-present). Previously, Mr. Donahue served as Chief Executive Officer (2006-2012), Chief Operating Officer (2003-2006) and Managing Director, Customer Marketing and Development (1999-2003) of The Depository Trust & Clearing Corporation (financial markets infrastructure). Mr. Donahue currently serves as a member (2007-present) and Co-Chairman (2016-present) of the Board of United Way of New York, a member of the Board of NYC Leadership Academy (2012-present) and a member of the Board of Advisors of Ripple Labs, Inc. (financial services, 2015-present). Mr. Donahue previously served as a member of the Advisory Board of certain Fidelity® funds (2015-2018).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Previously, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity), Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail), Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005) and Chairman (2014-2017) and a member of the Board (2010-2017) of Dave & Buster’s Entertainment, Inc. (restaurant and entertainment complexes). Mr. Lacy currently serves as a member of the Board of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present), Trustee of the California Chapter of The Nature Conservancy (2015-present) and a member of the Board of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as Chair of the Board of Governors, State University System of Florida (2013-present) and is a member of the Council on Foreign Relations (1994-present). He is also a member and has in the past served as Chairman of the Board of Directors of Artis-Naples (2012-present). Previously, Mr. Lautenbach served as a member and then Lead Director of the Board of Directors of Eaton Corporation (diversified industrial, 1997-2016). He was also a Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010); as well as Director of Sony Corporation (2006-2007). In addition, Mr. Lautenbach had a 30-year career with IBM (technology company), during which time he served as Senior Vice President and as a member of the Corporate Executive Committee (1968-1998).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Independent Directors Council Governing Council (2015-present). Previously, Mr. Mauriello served as a member of the Board of XL Group plc. (global insurance and re-insurance, 2006-2018).
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Previously, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments and a member of Scudder, Stevens & Clark and Scudder Kemper Investments. Ms. Small previously served as a member of the Board (2009-2019) and Chair of the Investment Committee (2010-2019) of the Teagle Foundation and a member of the Investment Committee of the Berkshire Taconic Community Foundation (2008-2019).
Garnett A. Smith (1947)
Year of Election or Appointment: 2018
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to his retirement, Mr. Smith served as Chairman and Chief Executive Officer (1990-1997) and President (1986-1990) of Inbrand Corp. (manufacturer of personal absorbent products). Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank (now Bank of America). Mr. Smith previously served as a member of the Advisory Board of certain Fidelity® funds (2012-2013).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions). Mr. Thomas currently serves as Non-Executive Chairman of the Board of Fortune Brands Home and Security (home and security products, 2011-present), and a member of the Board (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication).
Michael E. Wiley (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Wiley also serves as Trustee or a member of the Advisory Board of other Fidelity® funds. Previously, Mr. Wiley served as Chairman, President and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004). Mr. Wiley currently serves as a member of the Board of High Point Resources (exploration and production, 2005-present). Previously, Mr. Wiley served as a member of the Board of Andeavor Corporation (independent oil refiner and marketer, 2005-2018) and a member of the Board of Andeavor Logistics LP (natural resources logistics, 2015-2018).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for a Member of the Advisory Board (if any) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Vicki L. Fuller (1957)
Year of Election or Appointment: 2018
Member of the Advisory Board
Ms. Fuller also serves as a member of the Advisory Board of other Fidelity® funds. Previously, Ms. Fuller served as Chief Investment Officer of the New York State Common Retirement Fund (2012-2018) and held a variety of positions at AllianceBernstein L.P. (global asset management, 1985-2012), including Managing Director (2006-2012) and Senior Vice President and Senior Portfolio Manager (2001-2006). Ms. Fuller currently serves as a member of the Board, Audit Committee and Nominating and Governance Committee of The Williams Companies, Inc. (natural gas infrastructure, 2018-present) and as a member of the Board of Treliant, LLC (consulting, 2019-present).
Patricia L. Kampling (1959)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Kampling also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Kampling served as Chairman of the Board and Chief Executive Officer (2012-2019), President and Chief Operating Officer (2011-2012) and Executive Vice President and Chief Financial Officer (2010-2011) of Alliant Energy Corporation. Ms. Kampling currently serves as a member of the Board, Compensation Committee and Executive Committee and as Chair of the Audit Committee of Briggs & Stratton Corporation (manufacturing, 2011-present) and as a member of the Board, Audit, Finance and Risk Committee and Safety, Environmental, Technology and Operations Committee of American Water Works Company, Inc. (utilities company, 2019-present). In addition, Ms. Kampling currently serves as a member of the Board of the Nature Conservancy, Wisconsin Chapter (2019-present). Previously, Ms. Kampling served as a member of the Board of Interstate Power and Light Company (2012-2019) and Wisconsin Power and Light Company (2012-2019) (each a subsidiary of Alliant Energy Corporation) and as a member of the Board and Workforce Development Committee of the Business Roundtable (2018-2019).
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of Fidelity Management & Research Company LLC (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served as Vice Chairman and a Director of FMR Co., Inc. (investment adviser firm) and on the Special Olympics International Board of Directors (1997-2006).
Susan Tomasky (1953)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Tomasky also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Tomasky served in various executive officer positions at American Electric Power Company, Inc. (1998-2011), including most recently as President of AEP Transmission (2007-2011). Ms. Tomasky currently serves as a member of the Board and Sustainability Committee and as Chair of the Audit Committee of Marathon Petroleum Corporation (2018-present) and as a member of the Board, Corporate Governance Committee and Organization and Compensation Committee and as Chair of the Audit Committee of Public Service Enterprise Group, Inc. (utilities company, 2012-present). In addition, Ms. Tomasky currently serves as a member of the Board of the Columbus Regional Airport Authority (2007-present), as a member of the Board of the Royal Shakespeare Company – America (2009-present), as a member of the Board of the Columbus Association for the Performing Arts (2011-present) and as a member of the Board of Kenyon College (2016-present). Previously, Ms. Tomasky served as a member of the Board (2011-2019) and as Lead Independent Director (2015-2018) of Andeavor Corporation (previously Tesoro Corporation) (independent oil refiner and marketer) and as a member of the Board of Summit Midstream Partners LP (energy, 2012-2018).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2017
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer (2012-present) and Senior Vice President (2014-present) of FMR LLC (diversified financial services company) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as AML Officer of certain funds (2017-2019), as AML Officer of the funds (2012-2016), and Vice President (2007-2014) and Deputy Anti-Money Laundering Officer (2007-2012) of FMR LLC.
Craig S. Brown (1977)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Brown also serves as Assistant Treasurer of other funds. Mr. Brown is an employee of Fidelity Investments (2013-present).
John J. Burke III (1964)
Year of Election or Appointment: 2018
Chief Financial Officer
Mr. Burke also serves as Chief Financial Officer of other funds. Mr. Burke serves as Head of Investment Operations for Fidelity Fund and Investment Operations (2018-present) and is an employee of Fidelity Investments (1998-present). Previously Mr. Burke served as head of Asset Management Investment Operations (2012-2018).
William C. Coffey (1969)
Year of Election or Appointment: 2019
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Secretary and CLO of certain funds (2018-2019); CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2018-2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2018-2019); CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2018-2019); and Assistant Secretary of certain funds (2009-2018).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2018
Vice President
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Co-Head of Equity (2018-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Executive Vice President of Fidelity SelectCo, LLC (2019), Head of Global Equity Research (2016-2018), Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015) and as a Director of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2017).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Laura M. Del Prato (1964)
Year of Election or Appointment: 2018
Assistant Treasurer
Ms. Del Prato also serves as an officer of other funds. Ms. Del Prato is an employee of Fidelity Investments (2017-present). Prior to joining Fidelity Investments, Ms. Del Prato served as a Managing Director and Treasurer of the JPMorgan Mutual Funds (2014-2017). Prior to JPMorgan, Ms. Del Prato served as a partner at Cohen Fund Audit Services (accounting firm, 2012-2013) and KPMG LLP (accounting firm, 2004-2012).
Colm A. Hogan (1973)
Year of Election or Appointment: 2020
Assistant Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2005-present). Previously, Mr. Hogan served as Deputy Treasurer of certain Fidelity® funds (2016-2020) and Assistant Treasurer of certain Fidelity® funds (2016-2018).
Pamela R. Holding (1964)
Year of Election or Appointment: 2018
Vice President
Ms. Holding also serves as Vice President of other funds. Ms. Holding serves as Co-Head of Equity (2018-present) and is an employee of Fidelity Investments (2013-present). Previously, Ms. Holding served as Executive Vice President of Fidelity SelectCo, LLC (2019) and as Chief Investment Officer of Fidelity Institutional Asset Management (2013-2018).
Cynthia Lo Bessette (1969)
Year of Election or Appointment: 2019
Secretary and Chief Legal Officer (CLO)
Ms. Lo Bessette also serves as an officer of other funds. Ms. Lo Bessette serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company LLC (investment adviser firm, 2019-present); and CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2019-present). She is a Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2019-present), and is an employee of Fidelity Investments. Previously, Ms. Lo Bessette served as CLO, Secretary, and Senior Vice President of FMR Co., Inc. (investment adviser firm, 2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2019). Prior to joining Fidelity Investments, Ms. Lo Bessette was Executive Vice President, General Counsel (2016-2019) and Senior Vice President, Deputy General Counsel (2015-2016) of OppenheimerFunds (investment management company) and Deputy Chief Legal Officer (2013-2015) of Jennison Associates LLC (investment adviser firm).
Chris Maher (1972)
Year of Election or Appointment: 2020
Deputy Treasurer
Mr. Maher also serves as an officer of other funds. Mr. Maher serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), and is an employee of Fidelity Investments (2008-present). Previously, Mr. Maher served as Assistant Treasurer of certain funds (2013-2020); Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company LLC (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Compliance Officer of FMR Co., Inc. (investment adviser firm, 2016-2019), as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. Ms. Smith serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), is an employee of Fidelity Investments (2009-present), and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Assistant Treasurer (2013-2019) and Deputy Treasurer (2013-2016) of certain Fidelity® funds.
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche LLP (accounting firm, 2005-2013).
Jim Wegmann (1979)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Wegmann also serves as Assistant Treasurer of other funds. Mr. Wegmann is an employee of Fidelity Investments (2011-present).
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including 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 (August 1, 2019 to January 31, 2020).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
| | Annualized Expense Ratio-A | Beginning
Account Value
August 1, 2019 | Ending
Account Value
January 31, 2020 | Expenses Paid
During Period-B
August 1, 2019
to January 31, 2020 |
| Actual | - %-C | $1,000.00 | $1,054.00 | $--D |
| Hypothetical-E | | $1,000.00 | $1,025.21 | $--D |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C Amount represents less than .005%.
D Amount represents less than $.005.
E 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Flex Mid Cap Value Fund voted to pay on March 9, 2020, to shareholders of record at the opening of business on March 6, 2020, a distribution of $0.067 per share derived from capital gains realized from sales of portfolio securities and a dividend of $0.003 per share from net investment income.
The fund hereby designates as a capital gain dividend with respect to the taxable year ended January 31, 2020, $4,922, or, if subsequently determined to be different, the net capital gain of such year.
The fund designates 65% of the dividend distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
The fund designates 71% of the dividend distributed in December during the fiscal year as amounts which may be taken into account as a dividend for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund designates 16% of the dividend distributed during the fiscal year as a section 199A dividend.
The fund will notify shareholders in January 2021 of amounts for use in preparing 2020 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Flex Mid Cap Value Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company LLC (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. FMR and the sub-advisers are referred to herein as the Investment Advisers. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
Approval of Amended and Restated Advisory Contracts. At its November 2019 meeting, the Board unanimously determined to approve an amended and restated management contract and sub-advisory agreements (Amended and Restated Contracts) for a stub period of January 1, 2020 through January 31, 2020 in connection with a consolidation of certain of Fidelity's advisory businesses. The Board considered that, on or about January 1, 2020, FMR Co., Inc. (FMRC) expected to merge with and into FMR and, after the merger, FMR expected to redomicile as a Delaware limited liability company. The Board also approved the termination of the sub-advisory agreement with FMRC upon the completion of the merger. The Board noted that references to FMR in the Amended and Restated Contracts would be updated to reflect FMR's new form of organization and domicile. The Board also noted Fidelity's assurance that neither the planned consolidation nor the Amended and Restated Contracts will change the investment processes, the level or nature of services provided, the resources and personnel allocated, trading and compliance operations, or any fees paid by the fund.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to review matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through joint ad hoc committees to discuss certain matters relevant to all of the Fidelity funds.
At its January 2020 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In considering whether to renew the Advisory Contracts for the fund, the Board considered all factors it believed relevant and reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and the fact that no fee is payable under the management contract was fair and reasonable.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value and convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information over the Internet and through telephone representatives, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to Fidelity's investment research process, which includes meetings with management of issuers of securities in which the funds invest, and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and ETFs with innovative structures, strategies and pricing and making other enhancements to meet client needs; (iv) launching new share classes of existing funds; (v) eliminating purchase minimums and broadening eligibility requirements for certain funds and share classes; (vi) reducing management fees and total expenses for certain target date funds and index funds; (vii) lowering expense caps for certain existing funds and classes, and converting certain voluntary expense caps to contractual caps, to reduce expenses borne by shareholders; (viii) rationalizing product lines and gaining increased efficiencies from fund mergers, liquidations, and share class consolidations; (ix) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; and (x) continuing to implement enhancements to further strengthen Fidelity's product line to increase investors' probability of success in achieving their investment goals, including retirement income goals.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions. The Board reviewed the fund's absolute investment performance, as well as the fund's relative investment performance.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board noted that the fund is available exclusively to certain Fidelity fee-based programs. The Board considered that the fund does not pay FMR a management fee for investment advisory services, but that FMR is indirectly compensated for its services out of the program fees. The Board also noted that FMR or an affiliate undertakes to pay all operating expenses of the fund with limited exceptions.
Based on its review, the Board considered that the fund does not pay a management fee and concluded that the total expense ratio of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the level of Fidelity's profits in respect of all the Fidelity funds.
PricewaterhouseCoopers LLP (PwC), auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and potential indirect benefits such businesses may have received as a result of their association with Fidelity's mutual fund business (i.e., fall-out benefits) as well as cases where Fidelity's affiliates may benefit from the funds' business. The Board noted that changes to fall-out benefits year-over-year reflect business developments at Fidelity's various businesses. The Board considered that a joint ad hoc committee created by it and the boards of other Fidelity funds had recently been established, and met periodically, to evaluate potential fall-out benefits (PFOB Committee). The Board noted that the PFOB Committee, among other things: (i) discussed the legal framework surrounding potential fall-out benefits; (ii) reviewed the Board's responsibilities and approach to potential fall-out benefits; and (iii) reviewed practices employed by competitor funds regarding the review of potential fall-out benefits.
The Board concluded that the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund were not relevant to the renewal of the Advisory Contracts because the fund pays no advisory fees and FMR or an affiliate bears all expenses of the fund with limited exceptions.
Economies of Scale. The Board concluded that because the fund pays no advisory fees and FMR bears all expenses of the fund with limited exceptions, the realization of economies of scale was not a material factor in the Board's decision to renew the fund's Advisory Contracts.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' advisory contracts, the Board requested and received additional information on certain topics, including: (i) fund flow and performance trends, in particular the underperformance of certain funds and strategies, and Fidelity's long-term strategies for certain funds; (ii) consideration of performance fees for additional funds; (iii) changes in Fidelity's non-fund businesses and the impact of such changes on the funds; (iv) metrics for evaluating index fund and ETF performance and information about ETF trading characteristics; (v) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (vi) the expense structures for different funds and classes; (vii) information regarding other accounts managed by Fidelity, including collective investment trusts and separately managed accounts; and (viii) Fidelity's philosophies and strategies for evaluating funds and classes with lower or declining asset levels.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee arrangements are fair and reasonable, and that the fund's Amended and Restated Contracts should be approved and the fund's Advisory Contracts should be renewed.
ZMV-ANN-0320
1.9881567.102
Fidelity® Mid Cap Value K6 Fund
Annual Report
January 31, 2020
See the inside front cover for important information about access to your fund’s shareholder reports.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of a fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a financial advisor, broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a fund electronically, by contacting your financial intermediary. For Fidelity customers, visit Fidelity's web site or call Fidelity using the contact information listed below.
You may elect to receive all future reports in paper free of charge. If you wish to continue receiving paper copies of your shareholder reports, you may contact your financial intermediary or, if you are a Fidelity customer, visit Fidelity’s website, or call Fidelity at the applicable toll-free number listed below. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
| Account Type | Website | Phone Number |
| Brokerage, Mutual Fund, or Annuity Contracts: | fidelity.com/mailpreferences | 1-800-343-3548 |
| Employer Provided Retirement Accounts: | netbenefits.fidelity.com/preferences (choose 'no' under Required Disclosures to continue to print) | 1-800-343-0860 |
| Advisor Sold Accounts Serviced Through Your Financial Intermediary: | Contact Your Financial Intermediary | Your Financial Intermediary's phone number |
| Advisor Sold Accounts Serviced by Fidelity: | institutional.fidelity.com | 1-877-208-0098 |
Contents
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. © 2020 FMR LLC. All rights reserved.
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-PORT. Forms N-PORT are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-PORT 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.institutional.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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
| For the periods ended January 31, 2020 | Past 1 year | Life of fundA |
| Fidelity® Mid Cap Value K6 Fund | 6.15% | 3.00% |
A From May 25, 2017
$10,000 Over Life of Fund
Let's say hypothetically that $10,000 was invested in Fidelity® Mid Cap Value K6 Fund on May 25, 2017, when the fund started.
The chart shows how the value of your investment would have changed, and also shows how the Russell Midcap® Value Index performed over the same period.
| Period Ending Values |
| $10,827 | Fidelity® Mid Cap Value K6 Fund |
| $11,912 | Russell Midcap® Value Index |
Management's Discussion of Fund Performance
Market Recap: U.S. stocks rolled for the 12 months ending January 31, 2020, with the S&P 500
® index gaining 21.68%, despite persistent, nagging concerns about global economic growth and trade. After a rough end to 2018, equities sharply reversed course to begin 2019 amid upbeat company earnings and signs the Federal Reserve may pause on rates. The uptrend extended until May, when the index sunk as trade talks between the U.S. and China broke down. The bull market roared back to record a series of highs in July, when the Fed cut interest rates for the first time since 2008. Volatility intensified in August, as the Treasury yield curve inverted, which some investors viewed as a sign the U.S. economy could be heading for recession. But the market proved resilient, hitting a new high on October 30, when the Fed lowered rates for the third time in 2019, and moving higher through December 31. The new year began with a flattish January, with growing anxiety related to the new coronavirus outbreak and its impact on the global economy. By sector, information technology (+46%) led the way, driven by strong growth trends. The defensive utilities sector (+30%) also stood out, while communication services and consumer staples were about in line with the broader market. Conversely, energy (-11%) was by far the weakest – struggling due to sluggish oil prices – followed by several strong gainers that still lagged: materials (+11%), health care (+12%), industrials (+16%), consumer discretionary (+17%), and financials and real estate (+18% each).
Comments from Portfolio Manager Kevin Walenta: For the fiscal year, the fund gained 6.15%, lagging the 12.96% advance of the benchmark Russell Midcap
® Value Index. The fund’s value bias meant it was underexposed to expensive, low-volatility benchmark components, which outperformed the past 12 months, and overexposed to stocks with more volatility in their earnings streams, a group that underperformed. This positioning led to disappointing security selection, especially in the utilities, real estate, information technology, financials and industrials sectors. The biggest individual relative detractor was hotel and lodging company Park Hotels & Resorts, which returned roughly -23% while held in the fund, hurt by concern about a recent acquisition. Another notable detractor was software & services company DXC Technology (-47%). Its stock declined amid earnings and revenue shortfalls, the surprise retirement of its CEO and increased debt, prompting me to eliminate our stake. Conversely, stock picks in the consumer discretionary sector, notably retailing, aided relative performance. The top individual contributor this period was Tyson Foods (+39%), which benefited as the African swine flu pushed up protein prices, in turn increasing revenues and earnings growth expectations for the company. The stock was not held at period end.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of January 31, 2020
| | % of fund's net assets |
| CBRE Group, Inc. | 4.1 |
| Jones Lang LaSalle, Inc. | 3.6 |
| Reliance Steel & Aluminum Co. | 3.5 |
| Best Buy Co., Inc. | 3.0 |
| Synchrony Financial | 2.9 |
| OGE Energy Corp. | 2.9 |
| Lazard Ltd. Class A | 2.7 |
| Laboratory Corp. of America Holdings | 2.6 |
| Discover Financial Services | 2.5 |
| MDU Resources Group, Inc. | 2.4 |
| | 30.2 |
Top Five Market Sectors as of January 31, 2020
| | % of fund's net assets |
| Financials | 17.6 |
| Real Estate | 12.6 |
| Industrials | 12.2 |
| Utilities | 11.4 |
| Consumer Discretionary | 9.2 |
Asset Allocation (% of fund's net assets)
| As of January 31, 2020 * |
| | Stocks | 96.0% |
| | Short-Term Investments and Net Other Assets (Liabilities) | 4.0% |
* Foreign investments - 10.6%
Schedule of Investments January 31, 2020
Showing Percentage of Net Assets
| Common Stocks - 96.0% | | | |
| | | Shares | Value |
| COMMUNICATION SERVICES - 2.2% | | | |
| Entertainment - 0.1% | | | |
| Activision Blizzard, Inc. | | 500 | $29,240 |
| Electronic Arts, Inc. (a) | | 200 | 21,584 |
| | | | 50,824 |
| Media - 2.1% | | | |
| AMC Networks, Inc. Class A (a) | | 2,800 | 102,452 |
| CBS Corp. Class B | | 3,100 | 105,803 |
| Interpublic Group of Companies, Inc. | | 40,331 | 915,514 |
| | | | 1,123,769 |
|
| TOTAL COMMUNICATION SERVICES | | | 1,174,593 |
|
| CONSUMER DISCRETIONARY - 9.2% | | | |
| Auto Components - 3.2% | | | |
| BorgWarner, Inc. | | 15,538 | 532,798 |
| Lear Corp. | | 9,362 | 1,153,211 |
| | | | 1,686,009 |
| Diversified Consumer Services - 0.2% | | | |
| H&R Block, Inc. | | 5,800 | 134,560 |
| Internet & Direct Marketing Retail - 0.2% | | | |
| eBay, Inc. | | 624 | 20,941 |
| Stamps.com, Inc. (a) | | 300 | 22,347 |
| The Booking Holdings, Inc. (a) | | 28 | 51,255 |
| | | | 94,543 |
| Specialty Retail - 5.3% | | | |
| Best Buy Co., Inc. | | 18,794 | 1,591,664 |
| Rent-A-Center, Inc. | | 1,000 | 29,130 |
| Williams-Sonoma, Inc. | | 17,029 | 1,193,392 |
| | | | 2,814,186 |
| Textiles, Apparel & Luxury Goods - 0.3% | | | |
| PVH Corp. | | 2,100 | 183,057 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 4,912,355 |
|
| CONSUMER STAPLES - 3.0% | | | |
| Food & Staples Retailing - 0.1% | | | |
| Sysco Corp. | | 700 | 57,498 |
| Food Products - 2.8% | | | |
| Ingredion, Inc. | | 9,497 | 835,736 |
| The J.M. Smucker Co. | | 6,116 | 633,679 |
| | | | 1,469,415 |
| Tobacco - 0.1% | | | |
| Universal Corp. | | 731 | 38,853 |
|
| TOTAL CONSUMER STAPLES | | | 1,565,766 |
|
| ENERGY - 3.8% | | | |
| Energy Equipment & Services - 0.3% | | | |
| Baker Hughes, A GE Co. Class A | | 8,000 | 173,280 |
| Oil, Gas & Consumable Fuels - 3.5% | | | |
| Black Stone Minerals LP | | 1,500 | 15,060 |
| Cabot Oil & Gas Corp. | | 10,100 | 142,309 |
| Chevron Corp. | | 6,099 | 653,447 |
| ConocoPhillips Co. | | 13,068 | 776,631 |
| CVR Energy, Inc. | | 6,600 | 228,426 |
| Enable Midstream Partners LP | | 1,100 | 10,340 |
| World Fuel Services Corp. | | 900 | 35,208 |
| | | | 1,861,421 |
|
| TOTAL ENERGY | | | 2,034,701 |
|
| FINANCIALS - 17.6% | | | |
| Banks - 2.6% | | | |
| Bank OZK | | 6,900 | 187,542 |
| Citizens Financial Group, Inc. | | 17,499 | 652,363 |
| East West Bancorp, Inc. | | 2,200 | 100,848 |
| PacWest Bancorp | | 13,000 | 455,650 |
| | | | 1,396,403 |
| Capital Markets - 4.0% | | | |
| Bank of New York Mellon Corp. | | 1,200 | 53,736 |
| Federated Investors, Inc. Class B (non-vtg.) | | 3,400 | 123,182 |
| Janus Henderson Group PLC | | 15,500 | 391,685 |
| Lazard Ltd. Class A | | 34,426 | 1,444,515 |
| Waddell & Reed Financial, Inc. Class A (b) | | 7,627 | 121,879 |
| | | | 2,134,997 |
| Consumer Finance - 6.4% | | | |
| Capital One Financial Corp. | | 3,648 | 364,070 |
| Discover Financial Services | | 17,919 | 1,346,254 |
| Encore Capital Group, Inc. (a) | | 5,500 | 186,725 |
| Synchrony Financial | | 47,145 | 1,527,969 |
| | | | 3,425,018 |
| Insurance - 3.5% | | | |
| Allstate Corp. | | 2,044 | 242,296 |
| Athene Holding Ltd. (a) | | 8,700 | 378,972 |
| Hartford Financial Services Group, Inc. | | 12,700 | 752,856 |
| MetLife, Inc. | | 9,720 | 483,181 |
| National Western Life Group, Inc. | | 1 | 266 |
| | | | 1,857,571 |
| Thrifts & Mortgage Finance - 1.1% | | | |
| Essent Group Ltd. | | 5,013 | 248,695 |
| Radian Group, Inc. | | 12,500 | 306,125 |
| | | | 554,820 |
|
| TOTAL FINANCIALS | | | 9,368,809 |
|
| HEALTH CARE - 7.9% | | | |
| Biotechnology - 1.0% | | | |
| AbbVie, Inc. | | 300 | 24,306 |
| Amgen, Inc. | | 1,132 | 244,569 |
| Regeneron Pharmaceuticals, Inc. (a) | | 817 | 276,097 |
| | | | 544,972 |
| Health Care Providers & Services - 5.4% | | | |
| AmerisourceBergen Corp. | | 1,233 | 105,495 |
| Laboratory Corp. of America Holdings (a) | | 7,938 | 1,392,325 |
| National Healthcare Corp. | | 1,000 | 83,920 |
| Quest Diagnostics, Inc. | | 5,330 | 589,871 |
| Universal Health Services, Inc. Class B | | 5,035 | 690,349 |
| | | | 2,861,960 |
| Pharmaceuticals - 1.5% | | | |
| Jazz Pharmaceuticals PLC (a) | | 5,447 | 780,827 |
|
| TOTAL HEALTH CARE | | | 4,187,759 |
|
| INDUSTRIALS - 12.2% | | | |
| Aerospace & Defense - 0.5% | | | |
| Raytheon Co. | | 1,100 | 243,034 |
| Building Products - 0.2% | | | |
| Builders FirstSource, Inc. (a) | | 4,751 | 117,801 |
| Construction & Engineering - 0.3% | | | |
| EMCOR Group, Inc. | | 2,000 | 164,340 |
| Electrical Equipment - 2.8% | | | |
| Acuity Brands, Inc. | | 5,883 | 693,429 |
| Eaton Corp. PLC | | 2,396 | 226,350 |
| Regal Beloit Corp. | | 7,223 | 566,717 |
| | | | 1,486,496 |
| Machinery - 6.1% | | | |
| Allison Transmission Holdings, Inc. | | 19,700 | 870,740 |
| Crane Co. | | 6,633 | 566,856 |
| Oshkosh Corp. | | 7,157 | 615,788 |
| PACCAR, Inc. | | 16,300 | 1,209,623 |
| | | | 3,263,007 |
| Professional Services - 1.6% | | | |
| Manpower, Inc. | | 6,174 | 564,859 |
| Robert Half International, Inc. | | 4,600 | 267,582 |
| | | | 832,441 |
| Trading Companies & Distributors - 0.7% | | | |
| HD Supply Holdings, Inc. (a) | | 9,314 | 379,452 |
|
| TOTAL INDUSTRIALS | | | 6,486,571 |
|
| INFORMATION TECHNOLOGY - 8.3% | | | |
| Communications Equipment - 1.6% | | | |
| Cisco Systems, Inc. | | 5,900 | 271,223 |
| F5 Networks, Inc. (a) | | 4,859 | 593,381 |
| | | | 864,604 |
| Electronic Equipment & Components - 0.3% | | | |
| Sanmina Corp. (a) | | 4,400 | 140,096 |
| IT Services - 4.0% | | | |
| Amdocs Ltd. | | 17,724 | 1,275,242 |
| Cognizant Technology Solutions Corp. Class A | | 5,700 | 349,866 |
| CSG Systems International, Inc. | | 1,500 | 74,730 |
| Sykes Enterprises, Inc. (a) | | 4,600 | 154,514 |
| The Western Union Co. | | 10,500 | 282,450 |
| | | | 2,136,802 |
| Semiconductors & Semiconductor Equipment - 1.4% | | | |
| Lam Research Corp. | | 2,477 | 738,666 |
| Software - 0.1% | | | |
| Oracle Corp. | | 1,600 | 83,920 |
| Technology Hardware, Storage & Peripherals - 0.9% | | | |
| HP, Inc. | | 7,000 | 149,240 |
| Xerox Holdings Corp. | | 9,100 | 323,687 |
| | | | 472,927 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 4,437,015 |
|
| MATERIALS - 7.8% | | | |
| Chemicals - 2.7% | | | |
| Cabot Corp. | | 8,300 | 330,755 |
| Innospec, Inc. | | 4,693 | 472,726 |
| NewMarket Corp. | | 1,400 | 615,468 |
| | | | 1,418,949 |
| Containers & Packaging - 1.2% | | | |
| Packaging Corp. of America | | 6,900 | 660,675 |
| Metals & Mining - 3.6% | | | |
| Kaiser Aluminum Corp. | | 500 | 50,075 |
| Reliance Steel & Aluminum Co. | | 16,279 | 1,868,829 |
| | | | 1,918,904 |
| Paper & Forest Products - 0.3% | | | |
| Domtar Corp. | | 1,500 | 52,230 |
| Schweitzer-Mauduit International, Inc. | | 3,100 | 108,593 |
| | | | 160,823 |
|
| TOTAL MATERIALS | | | 4,159,351 |
|
| REAL ESTATE - 12.6% | | | |
| Equity Real Estate Investment Trusts (REITs) - 4.8% | | | |
| Alexanders, Inc. | | 238 | 76,798 |
| Apple Hospitality (REIT), Inc. | | 77,557 | 1,164,906 |
| CoreCivic, Inc. | | 2,400 | 38,280 |
| Host Hotels & Resorts, Inc. | | 38,500 | 629,090 |
| PS Business Parks, Inc. | | 100 | 16,756 |
| Simon Property Group, Inc. | | 4,537 | 604,102 |
| | | | 2,529,932 |
| Real Estate Management & Development - 7.8% | | | |
| CBRE Group, Inc. (a) | | 35,676 | 2,178,024 |
| Jones Lang LaSalle, Inc. | | 11,354 | 1,928,136 |
| Newmark Group, Inc. | | 4,600 | 54,142 |
| | | | 4,160,302 |
|
| TOTAL REAL ESTATE | | | 6,690,234 |
|
| UTILITIES - 11.4% | | | |
| Electric Utilities - 6.1% | | | |
| Endesa SA | | 5,900 | 162,080 |
| Exelon Corp. | | 14,016 | 667,021 |
| Hawaiian Electric Industries, Inc. | | 5,844 | 285,830 |
| Iberdrola SA | | 53,948 | 590,532 |
| OGE Energy Corp. | | 33,131 | 1,519,056 |
| | | | 3,224,519 |
| Gas Utilities - 0.8% | | | |
| National Fuel Gas Co. | | 7,528 | 325,134 |
| Suburban Propane Partners LP | | 3,938 | 89,196 |
| | | | 414,330 |
| Independent Power and Renewable Electricity Producers - 1.9% | | | |
| NRG Energy, Inc. | | 27,282 | 1,006,433 |
| Multi-Utilities - 2.6% | | | |
| AGL Energy Ltd. | | 9,884 | 131,173 |
| MDU Resources Group, Inc. | | 43,373 | 1,284,275 |
| | | | 1,415,448 |
|
| TOTAL UTILITIES | | | 6,060,730 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $49,534,662) | | | 51,077,884 |
|
| Money Market Funds - 4.2% | | | |
| Fidelity Cash Central Fund 1.58% (c) | | 2,134,547 | 2,134,974 |
| Fidelity Securities Lending Cash Central Fund 1.59% (c)(d) | | 91,791 | 91,800 |
| TOTAL MONEY MARKET FUNDS | | | |
| (Cost $2,226,774) | | | 2,226,774 |
| TOTAL INVESTMENT IN SECURITIES - 100.2% | | | |
| (Cost $51,761,436) | | | 53,304,658 |
| NET OTHER ASSETS (LIABILITIES) - (0.2)% | | | (117,064) |
| NET ASSETS - 100% | | | $53,187,594 |
Legend
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Affiliated fund that is generally 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
(d) Investment made with cash collateral received from securities on loan.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $47,017 |
| Fidelity Securities Lending Cash Central Fund | 1,117 |
| Total | $48,134 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations, if applicable. Amount for Fidelity Securities Lending Cash Central Fund 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.
Investment Valuation
The following is a summary of the inputs used, as of January 31, 2020, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Communication Services | $1,174,593 | $1,174,593 | $-- | $-- |
| Consumer Discretionary | 4,912,355 | 4,912,355 | -- | -- |
| Consumer Staples | 1,565,766 | 1,565,766 | -- | -- |
| Energy | 2,034,701 | 2,034,701 | -- | -- |
| Financials | 9,368,809 | 9,368,809 | -- | -- |
| Health Care | 4,187,759 | 4,187,759 | -- | -- |
| Industrials | 6,486,571 | 6,486,571 | -- | -- |
| Information Technology | 4,437,015 | 4,437,015 | -- | -- |
| Materials | 4,159,351 | 4,159,351 | -- | -- |
| Real Estate | 6,690,234 | 6,690,234 | -- | -- |
| Utilities | 6,060,730 | 5,929,557 | 131,173 | -- |
| Money Market Funds | 2,226,774 | 2,226,774 | -- | -- |
| Total Investments in Securities: | $53,304,658 | $53,173,485 | $131,173 | $-- |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 89.4% |
| Bermuda | 3.9% |
| Bailiwick of Guernsey | 2.4% |
| Ireland | 1.9% |
| Spain | 1.4% |
| Others (Individually Less Than 1%) | 1.0% |
| | 100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | January 31, 2020 |
| Assets | | |
Investment in securities, at value (including securities loaned of $86,292) — See accompanying schedule:
Unaffiliated issuers (cost $49,534,662) | $51,077,884 | |
| Fidelity Central Funds (cost $2,226,774) | 2,226,774 | |
| Total Investment in Securities (cost $51,761,436) | | $53,304,658 |
| Cash | | 863 |
| Receivable for investments sold | | 267,652 |
| Receivable for fund shares sold | | 27,041 |
| Dividends receivable | | 29,604 |
| Distributions receivable from Fidelity Central Funds | | 3,113 |
| Other receivables | | 1,311 |
| Total assets | | 53,634,242 |
| Liabilities | | |
| Payable for investments purchased | $306,630 | |
| Payable for fund shares redeemed | 27,642 | |
| Accrued management fee | 20,576 | |
| Collateral on securities loaned | 91,800 | |
| Total liabilities | | 446,648 |
| Net Assets | | $53,187,594 |
| Net Assets consist of: | | |
| Paid in capital | | $57,575,234 |
| Total accumulated earnings (loss) | | (4,387,640) |
| Net Assets | | $53,187,594 |
| Net Asset Value, offering price and redemption price per share ($53,187,594 ÷ 5,174,799 shares) | | $10.28 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | Year ended January 31, 2020 |
| Investment Income | | |
| Dividends | | $1,230,515 |
| Income from Fidelity Central Funds (including $1,117 from security lending) | | 48,134 |
| Total income | | 1,278,649 |
| Expenses | | |
| Management fee | $230,922 | |
| Independent trustees' fees and expenses | 281 | |
| Commitment fees | 131 | |
| Total expenses before reductions | 231,334 | |
| Expense reductions | (4,442) | |
| Total expenses after reductions | | 226,892 |
| Net investment income (loss) | | 1,051,757 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | (1,226,451) | |
| Fidelity Central Funds | 2 | |
| Foreign currency transactions | (71) | |
| Total net realized gain (loss) | | (1,226,520) |
| Change in net unrealized appreciation (depreciation) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 3,245,970 | |
| Assets and liabilities in foreign currencies | 14 | |
| Total change in net unrealized appreciation (depreciation) | | 3,245,984 |
| Net gain (loss) | | 2,019,464 |
| Net increase (decrease) in net assets resulting from operations | | $3,071,221 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | Year ended January 31, 2020 | Year ended January 31, 2019 |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net investment income (loss) | $1,051,757 | $1,429,958 |
| Net realized gain (loss) | (1,226,520) | (4,722,983) |
| Change in net unrealized appreciation (depreciation) | 3,245,984 | (5,421,187) |
| Net increase (decrease) in net assets resulting from operations | 3,071,221 | (8,714,212) |
| Distributions to shareholders | (925,927) | (1,713,265) |
| Share transactions | | |
| Proceeds from sales of shares | 12,851,209 | 31,073,572 |
| Reinvestment of distributions | 925,927 | 1,713,265 |
| Cost of shares redeemed | (11,658,955) | (40,998,020) |
| Net increase (decrease) in net assets resulting from share transactions | 2,118,181 | (8,211,183) |
| Total increase (decrease) in net assets | 4,263,475 | (18,638,660) |
| Net Assets | | |
| Beginning of period | 48,924,119 | 67,562,779 |
| End of period | $53,187,594 | $48,924,119 |
| Other Information | | |
| Shares | | |
| Sold | 1,265,042 | 2,915,882 |
| Issued in reinvestment of distributions | 87,517 | 177,982 |
| Redeemed | (1,146,724) | (4,080,030) |
| Net increase (decrease) | 205,835 | (986,166) |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Mid Cap Value K6 Fund
| | | | |
| Years ended January 31, | 2020 | 2019 | 2018 A |
| Selected Per–Share Data | | | |
| Net asset value, beginning of period | $9.85 | $11.35 | $10.00 |
| Income from Investment Operations | | | |
| Net investment income (loss)B | .21 | .21 | .11 |
| Net realized and unrealized gain (loss) | .40 | (1.44) | 1.33 |
| Total from investment operations | .61 | (1.23) | 1.44 |
| Distributions from net investment income | (.18) | (.22) | (.09) |
| Distributions from net realized gain | – | (.05) | – |
| Total distributions | (.18) | (.27) | (.09) |
| Net asset value, end of period | $10.28 | $9.85 | $11.35 |
| Total ReturnC,D | 6.15% | (10.82)% | 14.38% |
| Ratios to Average Net AssetsE,F | | | |
| Expenses before reductions | .45% | .45% | .45%G |
| Expenses net of fee waivers, if any | .45% | .45% | .45%G |
| Expenses net of all reductions | .44% | .44% | .45%G |
| Net investment income (loss) | 2.05% | 2.05% | 1.52%G |
| Supplemental Data | | | |
| Net assets, end of period (000 omitted) | $53,188 | $48,924 | $67,563 |
| Portfolio turnover rateH | 102%I | 89%I | 142%G,I |
A For the period May 25, 2017 (commencement of operations) to January 31, 2018.
B Calculated based on average shares outstanding during the period.
C Total returns for periods of less than one year are not annualized.
D Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
G Annualized
H Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
I Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended January 31, 2020
1. Organization.
Fidelity Mid Cap Value K6 Fund (the Fund) is a fund of Fidelity Devonshire Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares generally are available only to employer-sponsored retirement plans that are recordkept by Fidelity, or to certain employer-sponsored retirement plans that are not recordkept by Fidelity.
Effective January 1, 2020:
Investment advisers Fidelity Investments Money Management, Inc., FMR Co., Inc., and Fidelity SelectCo, LLC, merged with and into Fidelity Management & Research Company. In connection with the merger transactions, the resulting, merged investment adviser was then redomiciled from Massachusetts to Delaware, changed its corporate structure from a corporation to a limited liability company, and changed its name to "Fidelity Management & Research Company LLC".
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser 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 the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date ranged from less than .005% to .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
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)
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 a third party pricing vendor 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 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 may be used and would be categorized as Level 2 in the hierarchy. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
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 January 31, 2020 is included at the end of the Fund's Schedule of Investments.
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 rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, 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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Certain distributions received by the Fund represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain. 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 U.S. Federal income taxes is required. As of January 31, 2020, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The 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.
Distributions are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to partnerships, foreign currency transactions, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
| Gross unrealized appreciation | $4,006,010 |
| Gross unrealized depreciation | (2,602,108) |
| Net unrealized appreciation (depreciation) | $1,403,902 |
| Tax Cost | $51,900,756 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $56,174 |
| Capital loss carryforward | $(5,847,729) |
| Net unrealized appreciation (depreciation) on securities and other investments | $1,403,916 |
Capital loss carryforwards are only available to offset future capital gains of the Fund to the extent provided by regulations and may be limited. The capital loss carryforward information presented below, including any applicable limitation, is estimated as of fiscal period end and is subject to adjustment.
| No expiration | |
| Short-term | $(3,873,355) |
| Long-term | (1,974,374) |
| Total capital loss carryforward | $(5,847,729) |
Due to large redemptions in a prior period, approximately $3,019,437 of the Fund's realized capital losses are subject to limitation. Due to this limitation, the Fund will only be permitted to use approximately $1,170,413 of those capital losses per year to offset capital gains.
The tax character of distributions paid was as follows:
| | January 31, 2020 | January 31, 2019 |
| Ordinary Income | $925,927 | $ 1,713,265 |
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $49,425,460 and $55,862,548, respectively.
Unaffiliated Exchanges In-Kind. During the period, the Fund received investments and cash valued at $7,769,327 in exchange for 769,274 shares of the Fund. The amount of in-kind exchanges is included in share transactions in the accompanying Statement of Changes in Net Assets.
Prior Fiscal Year Unaffiliated Exchanges In-Kind. During the prior period, the Fund received investments and cash valued at $21,501,311 in exchange for 1,998,263 shares of the Fund. The amount of in-kind exchanges is included in share transactions in the accompanying Statement of Changes in Net Assets.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee that is based on an annual rate of .45% of average net assets. Under the management contract, the investment adviser or an affiliate pays all other expenses of the Fund, excluding fees and expenses of the independent Trustees, and certain miscellaneous expenses such as proxy and shareholder meeting expenses.
Brokerage Commissions. A portion of portfolio transactions were placed with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were as follows:
| | Amount |
| Fidelity Mid Cap Value K6 Fund | $1,666 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
6. Committed Line of Credit.
The Fund participates with other funds managed by the investment adviser 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 $131 and is reflected in Commitment fees on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.
7. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. For equity securities, lending agents are used, including National Financial Services (NFS), an affiliate of the Fund. Pursuant to a securities lending agreement, NFS will receive a fee, which is capped at 9.9% of daily lending revenue, for its services as lending agent. The Fund may lend securities to certain qualified borrowers, including NFS. 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. 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. Total fees paid by the Fund to NFS, as lending agent, amounted to $37. 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. During the period, there were no securities loaned to NFS.
8. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $4,365 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses by $77.
9. 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.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Fidelity Devonshire Trust and Shareholders of Fidelity Mid Cap Value K6 Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities of Fidelity Mid Cap Value K6 Fund (the "Fund"), a fund of Fidelity Devonshire Trust, including the schedule of investments, as of January 31, 2020, the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the two years in the period then ended and for the period from May 25, 2017 (commencement of operations) to January 31, 2018, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of January 31, 2020, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and for the period from May 25, 2017 (commencement of operations) to January 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of January 31, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
March 16, 2020
We have served as the auditor of one or more of the Fidelity investment companies since 1999.
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Michael E. Wiley, each of the Trustees oversees 302 funds. Mr. Wiley oversees 199 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the Investment Company Act of 1940 (1940 Act)) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-835-5092.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and other equity funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey is an Overseer Emeritus for the Boston Symphony Orchestra, a Director of Artis-Naples, and a Trustee of Brewster Academy in Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-2018), Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks served as Chief Operating Officer and as a member of the Board of The Depository Trust & Clearing Corporation (financial markets infrastructure), President, Chief Operating Officer and a member of the Board of The Depository Trust Company (DTC), President and a member of the Board of the National Securities Clearing Corporation (NSCC), Chief Executive Officer and a member of the Board of the Government Securities Clearing Corporation and Chief Executive Officer and a member of the Board of the Mortgage-Backed Securities Clearing Corporation. Mr. Dirks currently serves as a member of the Finance Committee (2016-present) and Board (2017-present) and is Treasurer (2018-present) of the Asolo Repertory Theatre.
Donald F. Donahue (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Donahue also serves as Trustee of other Fidelity® funds. Mr. Donahue serves as President and Chief Executive Officer of Miranda Partners, LLC (risk consulting for the financial services industry, 2012-present). Previously, Mr. Donahue served as Chief Executive Officer (2006-2012), Chief Operating Officer (2003-2006) and Managing Director, Customer Marketing and Development (1999-2003) of The Depository Trust & Clearing Corporation (financial markets infrastructure). Mr. Donahue currently serves as a member (2007-present) and Co-Chairman (2016-present) of the Board of United Way of New York, a member of the Board of NYC Leadership Academy (2012-present) and a member of the Board of Advisors of Ripple Labs, Inc. (financial services, 2015-present). Mr. Donahue previously served as a member of the Advisory Board of certain Fidelity® funds (2015-2018).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Previously, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity), Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail), Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005) and Chairman (2014-2017) and a member of the Board (2010-2017) of Dave & Buster’s Entertainment, Inc. (restaurant and entertainment complexes). Mr. Lacy currently serves as a member of the Board of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present), Trustee of the California Chapter of The Nature Conservancy (2015-present) and a member of the Board of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as Chair of the Board of Governors, State University System of Florida (2013-present) and is a member of the Council on Foreign Relations (1994-present). He is also a member and has in the past served as Chairman of the Board of Directors of Artis-Naples (2012-present). Previously, Mr. Lautenbach served as a member and then Lead Director of the Board of Directors of Eaton Corporation (diversified industrial, 1997-2016). He was also a Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010); as well as Director of Sony Corporation (2006-2007). In addition, Mr. Lautenbach had a 30-year career with IBM (technology company), during which time he served as Senior Vice President and as a member of the Corporate Executive Committee (1968-1998).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Independent Directors Council Governing Council (2015-present). Previously, Mr. Mauriello served as a member of the Board of XL Group plc. (global insurance and re-insurance, 2006-2018).
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Previously, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments and a member of Scudder, Stevens & Clark and Scudder Kemper Investments. Ms. Small previously served as a member of the Board (2009-2019) and Chair of the Investment Committee (2010-2019) of the Teagle Foundation and a member of the Investment Committee of the Berkshire Taconic Community Foundation (2008-2019).
Garnett A. Smith (1947)
Year of Election or Appointment: 2018
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to his retirement, Mr. Smith served as Chairman and Chief Executive Officer (1990-1997) and President (1986-1990) of Inbrand Corp. (manufacturer of personal absorbent products). Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank (now Bank of America). Mr. Smith previously served as a member of the Advisory Board of certain Fidelity® funds (2012-2013).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions). Mr. Thomas currently serves as Non-Executive Chairman of the Board of Fortune Brands Home and Security (home and security products, 2011-present), and a member of the Board (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication).
Michael E. Wiley (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Wiley also serves as Trustee or a member of the Advisory Board of other Fidelity® funds. Previously, Mr. Wiley served as Chairman, President and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004). Mr. Wiley currently serves as a member of the Board of High Point Resources (exploration and production, 2005-present). Previously, Mr. Wiley served as a member of the Board of Andeavor Corporation (independent oil refiner and marketer, 2005-2018) and a member of the Board of Andeavor Logistics LP (natural resources logistics, 2015-2018).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for a Member of the Advisory Board (if any) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Vicki L. Fuller (1957)
Year of Election or Appointment: 2018
Member of the Advisory Board
Ms. Fuller also serves as a member of the Advisory Board of other Fidelity® funds. Previously, Ms. Fuller served as Chief Investment Officer of the New York State Common Retirement Fund (2012-2018) and held a variety of positions at AllianceBernstein L.P. (global asset management, 1985-2012), including Managing Director (2006-2012) and Senior Vice President and Senior Portfolio Manager (2001-2006). Ms. Fuller currently serves as a member of the Board, Audit Committee and Nominating and Governance Committee of The Williams Companies, Inc. (natural gas infrastructure, 2018-present) and as a member of the Board of Treliant, LLC (consulting, 2019-present).
Patricia L. Kampling (1959)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Kampling also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Kampling served as Chairman of the Board and Chief Executive Officer (2012-2019), President and Chief Operating Officer (2011-2012) and Executive Vice President and Chief Financial Officer (2010-2011) of Alliant Energy Corporation. Ms. Kampling currently serves as a member of the Board, Compensation Committee and Executive Committee and as Chair of the Audit Committee of Briggs & Stratton Corporation (manufacturing, 2011-present) and as a member of the Board, Audit, Finance and Risk Committee and Safety, Environmental, Technology and Operations Committee of American Water Works Company, Inc. (utilities company, 2019-present). In addition, Ms. Kampling currently serves as a member of the Board of the Nature Conservancy, Wisconsin Chapter (2019-present). Previously, Ms. Kampling served as a member of the Board of Interstate Power and Light Company (2012-2019) and Wisconsin Power and Light Company (2012-2019) (each a subsidiary of Alliant Energy Corporation) and as a member of the Board and Workforce Development Committee of the Business Roundtable (2018-2019).
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of Fidelity Management & Research Company LLC (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served as Vice Chairman and a Director of FMR Co., Inc. (investment adviser firm) and on the Special Olympics International Board of Directors (1997-2006).
Susan Tomasky (1953)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Tomasky also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Tomasky served in various executive officer positions at American Electric Power Company, Inc. (1998-2011), including most recently as President of AEP Transmission (2007-2011). Ms. Tomasky currently serves as a member of the Board and Sustainability Committee and as Chair of the Audit Committee of Marathon Petroleum Corporation (2018-present) and as a member of the Board, Corporate Governance Committee and Organization and Compensation Committee and as Chair of the Audit Committee of Public Service Enterprise Group, Inc. (utilities company, 2012-present). In addition, Ms. Tomasky currently serves as a member of the Board of the Columbus Regional Airport Authority (2007-present), as a member of the Board of the Royal Shakespeare Company – America (2009-present), as a member of the Board of the Columbus Association for the Performing Arts (2011-present) and as a member of the Board of Kenyon College (2016-present). Previously, Ms. Tomasky served as a member of the Board (2011-2019) and as Lead Independent Director (2015-2018) of Andeavor Corporation (previously Tesoro Corporation) (independent oil refiner and marketer) and as a member of the Board of Summit Midstream Partners LP (energy, 2012-2018).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2017
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer (2012-present) and Senior Vice President (2014-present) of FMR LLC (diversified financial services company) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as AML Officer of certain funds (2017-2019), as AML Officer of the funds (2012-2016), and Vice President (2007-2014) and Deputy Anti-Money Laundering Officer (2007-2012) of FMR LLC.
Craig S. Brown (1977)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Brown also serves as Assistant Treasurer of other funds. Mr. Brown is an employee of Fidelity Investments (2013-present).
John J. Burke III (1964)
Year of Election or Appointment: 2018
Chief Financial Officer
Mr. Burke also serves as Chief Financial Officer of other funds. Mr. Burke serves as Head of Investment Operations for Fidelity Fund and Investment Operations (2018-present) and is an employee of Fidelity Investments (1998-present). Previously Mr. Burke served as head of Asset Management Investment Operations (2012-2018).
William C. Coffey (1969)
Year of Election or Appointment: 2019
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Secretary and CLO of certain funds (2018-2019); CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2018-2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2018-2019); CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2018-2019); and Assistant Secretary of certain funds (2009-2018).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2018
Vice President
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Co-Head of Equity (2018-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Executive Vice President of Fidelity SelectCo, LLC (2019), Head of Global Equity Research (2016-2018), Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015) and as a Director of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2017).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Laura M. Del Prato (1964)
Year of Election or Appointment: 2018
Assistant Treasurer
Ms. Del Prato also serves as an officer of other funds. Ms. Del Prato is an employee of Fidelity Investments (2017-present). Prior to joining Fidelity Investments, Ms. Del Prato served as a Managing Director and Treasurer of the JPMorgan Mutual Funds (2014-2017). Prior to JPMorgan, Ms. Del Prato served as a partner at Cohen Fund Audit Services (accounting firm, 2012-2013) and KPMG LLP (accounting firm, 2004-2012).
Colm A. Hogan (1973)
Year of Election or Appointment: 2020
Assistant Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2005-present). Previously, Mr. Hogan served as Deputy Treasurer of certain Fidelity® funds (2016-2020) and Assistant Treasurer of certain Fidelity® funds (2016-2018).
Pamela R. Holding (1964)
Year of Election or Appointment: 2018
Vice President
Ms. Holding also serves as Vice President of other funds. Ms. Holding serves as Co-Head of Equity (2018-present) and is an employee of Fidelity Investments (2013-present). Previously, Ms. Holding served as Executive Vice President of Fidelity SelectCo, LLC (2019) and as Chief Investment Officer of Fidelity Institutional Asset Management (2013-2018).
Cynthia Lo Bessette (1969)
Year of Election or Appointment: 2019
Secretary and Chief Legal Officer (CLO)
Ms. Lo Bessette also serves as an officer of other funds. Ms. Lo Bessette serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company LLC (investment adviser firm, 2019-present); and CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2019-present). She is a Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2019-present), and is an employee of Fidelity Investments. Previously, Ms. Lo Bessette served as CLO, Secretary, and Senior Vice President of FMR Co., Inc. (investment adviser firm, 2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2019). Prior to joining Fidelity Investments, Ms. Lo Bessette was Executive Vice President, General Counsel (2016-2019) and Senior Vice President, Deputy General Counsel (2015-2016) of OppenheimerFunds (investment management company) and Deputy Chief Legal Officer (2013-2015) of Jennison Associates LLC (investment adviser firm).
Chris Maher (1972)
Year of Election or Appointment: 2020
Deputy Treasurer
Mr. Maher also serves as an officer of other funds. Mr. Maher serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), and is an employee of Fidelity Investments (2008-present). Previously, Mr. Maher served as Assistant Treasurer of certain funds (2013-2020); Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company LLC (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Compliance Officer of FMR Co., Inc. (investment adviser firm, 2016-2019), as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. Ms. Smith serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), is an employee of Fidelity Investments (2009-present), and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Assistant Treasurer (2013-2019) and Deputy Treasurer (2013-2016) of certain Fidelity® funds.
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche LLP (accounting firm, 2005-2013).
Jim Wegmann (1979)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Wegmann also serves as Assistant Treasurer of other funds. Mr. Wegmann is an employee of Fidelity Investments (2011-present).
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 (August 1, 2019 to January 31, 2020).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
| | Annualized Expense Ratio-A | Beginning
Account Value
August 1, 2019 | Ending
Account Value
January 31, 2020 | Expenses Paid
During Period-B
August 1, 2019
to January 31, 2020 |
| Actual | .45% | $1,000.00 | $1,025.10 | $2.30 |
| Hypothetical-C | | $1,000.00 | $1,022.94 | $2.29 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The fund designates 89% of the dividend distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
The fund designates 96% of the dividend distributed during the fiscal year as amounts which may be taken into account as a dividend for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund designates 5% of the dividend distributed during the fiscal year as a section 199A dividend.
The fund will notify shareholders in January 2021 of amounts for use in preparing 2020 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Mid Cap Value K6 Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company LLC (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. FMR and the sub-advisers are referred to herein as the Investment Advisers. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
Approval of Amended and Restated Advisory Contracts. At its November 2019 meeting, the Board unanimously determined to approve an amended and restated management contract and sub-advisory agreements (Amended and Restated Contracts) for a stub period of January 1, 2020 through January 31, 2020 in connection with a consolidation of certain of Fidelity's advisory businesses. The Board considered that, on or about January 1, 2020, FMR Co., Inc. (FMRC) expected to merge with and into FMR and, after the merger, FMR expected to redomicile as a Delaware limited liability company. The Board also approved the termination of the sub-advisory agreement with FMRC upon the completion of the merger. The Board noted that references to FMR in the Amended and Restated Contracts would be updated to reflect FMR's new form of organization and domicile. The Board also noted Fidelity's assurance that neither the planned consolidation nor the Amended and Restated Contracts will change the investment processes, the level or nature of services provided, the resources and personnel allocated, trading and compliance operations, or any fees paid by the fund.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to review matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through joint ad hoc committees to discuss certain matters relevant to all of the Fidelity funds.
At its January 2020 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services provided by and the profits realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and are realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value and convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information over the Internet and through telephone representatives, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
The Board noted that it and the boards of certain other Fidelity funds had formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to Fidelity's investment research process, which includes meetings with management of issuers of securities in which the funds invest, and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and ETFs with innovative structures, strategies and pricing and making other enhancements to meet client needs; (iv) launching new share classes of existing funds; (v) eliminating purchase minimums and broadening eligibility requirements for certain funds and share classes; (vi) reducing management fees and total expenses for certain target date funds and index funds; (vii) lowering expense caps for certain existing funds and classes, and converting certain voluntary expense caps to contractual caps, to reduce expenses borne by shareholders; (viii) rationalizing product lines and gaining increased efficiencies from fund mergers, liquidations, and share class consolidations; (ix) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; and (x) continuing to implement enhancements to further strengthen Fidelity's product line to increase investors' probability of success in achieving their investment goals, including retirement income goals.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.
The Board took into account discussions that occur at Board meetings throughout the year with representatives of the Investment Advisers about fund investment performance. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board considers annualized return information for the fund for different time periods, measured against an appropriate securities market index (benchmark index) and a peer group of funds with similar objectives (peer group), if any. In its evaluation of fund investment performance, the Board gave particular attention to information indicating changes in performance of certain Fidelity funds for specific time periods and discussed with the Investment Advisers the reasons for any overperformance or underperformance.
In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on net performance (after fees and expenses) of both the highest performing and lowest performing fund share classes, where applicable, compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; issuer-specific information; and fund cash flows and other factors.
The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net total return information for the fund and an appropriate benchmark index and peer group for the most recent one-year period ended June 30, 2019, as shown below. Returns are shown compared to the 25th percentile (top of box, 75% beaten) and 75th percentile (bottom of box, 25% beaten) of the peer universe.
Fidelity Mid Cap Value K6 Fund
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable investment mandates. Combining Lipper investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods ended June 30 shown in basis points (BP) in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG % and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Sized Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked, is also included in the chart and was considered by the Board.
Fidelity Mid Cap Value K6 Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for the 12-month period ended June 30, 2019.
The Board noted that it and the boards of other Fidelity funds formed an ad hoc Committee on Group Fee, which meets periodically, to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component (such as the fund) and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of the fund's total expense ratio, the Board considered the fund's unitary fee rate as well as other fund expenses paid by FMR under the fund's management contract, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted that Fidelity may agree to waive fees or reimburse expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current total expense ratio of the fund compared to competitive fund median expenses. The fund is compared to those funds in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund's total expense ratio ranked below the competitive median for the 12-month period ended June 30, 2019.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted that a joint ad hoc committee created by it and the boards of other Fidelity funds periodically reviews and compares Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds and also noted the most recent findings of the committee. The Board noted that the committee's review included a consideration of the differences in services provided, fees charged, and costs incurred, as well as competition in the markets serving the different categories of clients.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that the fund's total expense ratio was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationships with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies and the full Board approves such changes.
PricewaterhouseCoopers LLP (PwC), auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and potential indirect benefits such businesses may have received as a result of their association with Fidelity's mutual fund business (i.e., fall-out benefits) as well as cases where Fidelity's affiliates may benefit from the funds' business. The Board noted that changes to fall-out benefits year-over-year reflect business developments at Fidelity's various businesses. The Board considered that a joint ad hoc committee created by it and the boards of other Fidelity funds had recently been established, and met periodically, to evaluate potential fall-out benefits (PFOB Committee). The Board noted that the PFOB Committee, among other things: (i) discussed the legal framework surrounding potential fall-out benefits; (ii) reviewed the Board's responsibilities and approach to potential fall-out benefits; and (iii) reviewed practices employed by competitor funds regarding the review of potential fall-out benefits.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund, including the conclusions of the PFOB Committee, and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board recognized that, due to the fund's current contractual arrangements, its expense ratio will not decline if the fund's operating costs decrease as assets grow, or rise as assets decrease. The Board also noted that a committee (the Economies of Scale Committee) created by it and the boards of other Fidelity funds periodically analyzes whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' advisory contracts, the Board requested and received additional information on certain topics, including: (i) fund flow and performance trends, in particular the underperformance of certain funds and strategies, and Fidelity's long-term strategies for certain funds; (ii) consideration of performance fees for additional funds; (iii) changes in Fidelity's non-fund businesses and the impact of such changes on the funds; (iv) metrics for evaluating index fund and ETF performance and information about ETF trading characteristics; (v) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (vi) the expense structures for different funds and classes; (vii) information regarding other accounts managed by Fidelity, including collective investment trusts and separately managed accounts; and (viii) Fidelity's philosophies and strategies for evaluating funds and classes with lower or declining asset levels.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee arrangements are fair and reasonable, and that the fund's Amended and Restated Contracts should be approved and the fund's Advisory Contracts should be renewed.
MCVK6-ANN-0320
1.9883983.102
Fidelity® Equity-Income K6 Fund
Annual Report
January 31, 2020
See the inside front cover for important information about access to your fund’s shareholder reports.
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of a fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a financial advisor, broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a fund electronically, by contacting your financial intermediary. For Fidelity customers, visit Fidelity's web site or call Fidelity using the contact information listed below.
You may elect to receive all future reports in paper free of charge. If you wish to continue receiving paper copies of your shareholder reports, you may contact your financial intermediary or, if you are a Fidelity customer, visit Fidelity’s website, or call Fidelity at the applicable toll-free number listed below. Your election to receive reports in paper will apply to all funds held with the fund complex/your financial intermediary.
| Account Type | Website | Phone Number |
| Brokerage, Mutual Fund, or Annuity Contracts: | fidelity.com/mailpreferences | 1-800-343-3548 |
| Employer Provided Retirement Accounts: | netbenefits.fidelity.com/preferences (choose 'no' under Required Disclosures to continue to print) | 1-800-343-0860 |
| Advisor Sold Accounts Serviced Through Your Financial Intermediary: | Contact Your Financial Intermediary | Your Financial Intermediary's phone number |
| Advisor Sold Accounts Serviced by Fidelity: | institutional.fidelity.com | 1-877-208-0098 |
Contents
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. © 2020 FMR LLC. All rights reserved.
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-PORT. Forms N-PORT are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-PORT 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.institutional.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.
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The hypothetical investment and the average annual total returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund’s total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average annual total returns for Fidelity® Equity-Income K6 Fund will be reported once the fund is a year old.
$10,000 Over Life of Fund
Let's say hypothetically that $10,000 was invested in Fidelity® Equity-Income K6 Fund on June 13, 2019, when the fund started.
The chart shows how the value of your investment would have changed, and also shows how the Russell 3000® Value Index performed over the same period.
| Period Ending Values |
| $10,914 | Fidelity® Equity-Income K6 Fund |
| $10,830 | Russell 3000® Value Index |
Management's Discussion of Fund Performance
Market Recap: U.S. stocks rolled for the 12 months ending January 31, 2020, with the S&P 500
® index gaining 21.68%, despite persistent, nagging concerns about global economic growth and trade. After a rough end to 2018, equities sharply reversed course to begin 2019 amid upbeat company earnings and signs the Federal Reserve may pause on rates. The uptrend extended until May, when the index sunk as trade talks between the U.S. and China broke down. The bull market roared back to record a series of highs in July, when the Fed cut interest rates for the first time since 2008. Volatility intensified in August, as the Treasury yield curve inverted, which some investors viewed as a sign the U.S. economy could be heading for recession. But the market proved resilient, hitting a new high on October 30, when the Fed lowered rates for the third time in 2019, and moving higher through December 31. The new year began with a flattish January, with growing anxiety related to the new coronavirus outbreak and its impact on the global economy. By sector, information technology (+46%) led the way, driven by strong growth trends. The defensive utilities sector (+30%) also stood out, while communication services and consumer staples were about in line with the broader market. Conversely, energy (-11%) was by far the weakest – struggling due to sluggish oil prices – followed by several strong gainers that still lagged: materials (+11%), health care (+12%), industrials (+16%), consumer discretionary (+17%), and financials and real estate (+18% each).
Comments from Portfolio Manager Ramona Persaud: Since inception on June 13, 2019, through January 31, 2020, the fund gained 9.14%, ahead of the 8.30% advance of the benchmark Russell 3000
® Value Index. The fund’s outperformance of the benchmark the past 12 months was driven by security selection, particularly within the pharmaceuticals, biotechnology & life sciences industry. Here, it helped to avoid pharma giant and benchmark component Pfizer (-10%), as we thought the stock’s valuation and fundamentals suggested both investment return and downside protection were at risk. Two technology stocks were the fund’s top individual contributors: consumer electronics giant Apple, a non-benchmark holding, and software maker Microsoft. Apple’s stock benefited in large part from surprisingly strong growth for subscription services and its fast-growing wearables business. Meanwhile, our shares of Microsoft rose about 29%, boosted by the company’s transition to cloud-computing services to help clients store and manage data, as well as rapid adoption of its cloud-based Office
® products. Conversely, relative performance was hurt by security selection in consumer staples, utilities, communication services and materials. My decision to avoid benchmark component and chipmaker Intel, which gained 39% this period, was the largest individual relative detractor. It also hurt to overweight networking gear maker Cisco Systems (-17%) and utility company Exelon (-4%).
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Investment Summary (Unaudited)
Top Ten Stocks as of January 31, 2020
| | % of fund's net assets |
| JPMorgan Chase & Co. | 4.1 |
| Berkshire Hathaway, Inc. Class B | 3.3 |
| Johnson & Johnson | 3.3 |
| Bank of America Corp. | 2.9 |
| Wells Fargo & Co. | 2.4 |
| Citigroup, Inc. | 2.3 |
| Walmart, Inc. | 2.3 |
| Verizon Communications, Inc. | 2.3 |
| The Walt Disney Co. | 2.2 |
| McDonald's Corp. | 2.2 |
| | 27.3 |
Top Five Market Sectors as of January 31, 2020
| | % of fund's net assets |
| Financials | 24.9 |
| Health Care | 14.0 |
| Consumer Staples | 9.6 |
| Communication Services | 9.1 |
| Industrials | 8.9 |
Asset Allocation (% of fund's net assets)
| As of January 31, 2020 * |
| | Stocks | 99.1% |
| | Short-Term Investments and Net Other Assets (Liabilities) | 0.9% |
* Foreign investments - 13.5%
Schedule of Investments January 31, 2020
Showing Percentage of Net Assets
| Common Stocks - 99.1% | | | |
| | | Shares | Value |
| COMMUNICATION SERVICES - 9.1% | | | |
| Diversified Telecommunication Services - 3.6% | | | |
| AT&T, Inc. | | 17,433 | $655,829 |
| Verizon Communications, Inc. | | 18,489 | 1,098,986 |
| | | | 1,754,815 |
| Entertainment - 2.2% | | | |
| The Walt Disney Co. | | 7,812 | 1,080,478 |
| Media - 2.5% | | | |
| Comcast Corp. Class A | | 21,354 | 922,279 |
| Interpublic Group of Companies, Inc. | | 11,993 | 272,241 |
| | | | 1,194,520 |
| Wireless Telecommunication Services - 0.8% | | | |
| T-Mobile U.S., Inc. (a) | | 4,947 | 391,753 |
|
| TOTAL COMMUNICATION SERVICES | | | 4,421,566 |
|
| CONSUMER DISCRETIONARY - 7.2% | | | |
| Automobiles - 0.4% | | | |
| General Motors Co. | | 5,517 | 184,213 |
| Hotels, Restaurants & Leisure - 2.9% | | | |
| McDonald's Corp. | | 4,906 | 1,049,737 |
| Royal Caribbean Cruises Ltd. | | 3,057 | 357,914 |
| | | | 1,407,651 |
| Multiline Retail - 0.3% | | | |
| Dollar General Corp. | | 1,023 | 156,938 |
| Specialty Retail - 3.2% | | | |
| Burlington Stores, Inc. (a) | | 459 | 99,819 |
| Lowe's Companies, Inc. | | 5,470 | 635,833 |
| The Home Depot, Inc. | | 1,825 | 416,283 |
| TJX Companies, Inc. | | 6,951 | 410,387 |
| | | | 1,562,322 |
| Textiles, Apparel & Luxury Goods - 0.4% | | | |
| PVH Corp. | | 1,534 | 133,719 |
| Tapestry, Inc. | | 2,655 | 68,419 |
| | | | 202,138 |
|
| TOTAL CONSUMER DISCRETIONARY | | | 3,513,262 |
|
| CONSUMER STAPLES - 9.6% | | | |
| Beverages - 1.2% | | | |
| Diageo PLC | | 2,862 | 113,172 |
| PepsiCo, Inc. | | 3,412 | 484,572 |
| | | | 597,744 |
| Food & Staples Retailing - 3.2% | | | |
| Alimentation Couche-Tard, Inc. Class B (sub. vtg.) | | 3,784 | 126,467 |
| BJ's Wholesale Club Holdings, Inc. (a) | | 5,600 | 114,912 |
| Kroger Co. | | 6,909 | 185,576 |
| Walmart, Inc. | | 9,863 | 1,129,215 |
| | | | 1,556,170 |
| Food Products - 2.3% | | | |
| Hilton Food Group PLC | | 12,500 | 174,306 |
| McCormick & Co., Inc. (non-vtg.) | | 716 | 116,973 |
| Mondelez International, Inc. | | 6,730 | 386,167 |
| Nestle SA (Reg. S) | | 2,267 | 250,034 |
| The J.M. Smucker Co. | | 1,931 | 200,071 |
| | | | 1,127,551 |
| Household Products - 0.6% | | | |
| Kimberly-Clark Corp. | | 2,086 | 298,799 |
| Personal Products - 0.7% | | | |
| Unilever NV | | 5,298 | 309,150 |
| Tobacco - 1.6% | | | |
| Altria Group, Inc. | | 5,928 | 281,758 |
| Philip Morris International, Inc. | | 5,582 | 461,631 |
| | | | 743,389 |
|
| TOTAL CONSUMER STAPLES | | | 4,632,803 |
|
| ENERGY - 8.5% | | | |
| Oil, Gas & Consumable Fuels - 8.5% | | | |
| BP PLC | | 45,679 | 274,993 |
| Chevron Corp. | | 9,620 | 1,030,687 |
| ConocoPhillips Co. | | 12,000 | 713,160 |
| Enterprise Products Partners LP | | 8,993 | 231,750 |
| Equinor ASA | | 12,365 | 224,703 |
| Exxon Mobil Corp. | | 6,441 | 400,115 |
| Imperial Oil Ltd. | | 7,766 | 184,145 |
| Phillips 66 Co. | | 2,891 | 264,151 |
| Suncor Energy, Inc. | | 8,994 | 274,904 |
| The Williams Companies, Inc. | | 8,074 | 167,051 |
| Valero Energy Corp. | | 4,293 | 361,943 |
| | | | 4,127,602 |
| FINANCIALS - 24.9% | | | |
| Banks - 13.6% | | | |
| Bank of America Corp. | | 42,460 | 1,393,962 |
| BB&T Corp. | | 8,605 | 443,760 |
| Citigroup, Inc. | | 15,381 | 1,144,500 |
| Huntington Bancshares, Inc. | | 11,651 | 158,104 |
| JPMorgan Chase & Co. | | 14,926 | 1,975,598 |
| M&T Bank Corp. | | 1,930 | 325,244 |
| Wells Fargo & Co. | | 24,510 | 1,150,499 |
| | | | 6,591,667 |
| Capital Markets - 2.4% | | | |
| KKR & Co. LP | | 19,750 | 630,025 |
| The Blackstone Group LP | | 8,674 | 529,721 |
| | | | 1,159,746 |
| Consumer Finance - 1.2% | | | |
| Capital One Financial Corp. | | 5,839 | 582,732 |
| Diversified Financial Services - 3.3% | | | |
| Berkshire Hathaway, Inc. Class B (a) | | 7,219 | 1,620,160 |
| Insurance - 4.4% | | | |
| Chubb Ltd. | | 4,738 | 720,129 |
| Marsh & McLennan Companies, Inc. | | 3,376 | 377,639 |
| MetLife, Inc. | | 9,686 | 481,491 |
| The Travelers Companies, Inc. | | 4,079 | 536,878 |
| | | | 2,116,137 |
|
| TOTAL FINANCIALS | | | 12,070,442 |
|
| HEALTH CARE - 14.0% | | | |
| Biotechnology - 1.8% | | | |
| AbbVie, Inc. | | 2,939 | 238,118 |
| Amgen, Inc. | | 2,914 | 629,570 |
| | | | 867,688 |
| Health Care Equipment & Supplies - 2.2% | | | |
| Becton, Dickinson & Co. | | 2,281 | 627,686 |
| Danaher Corp. | | 2,873 | 462,180 |
| | | | 1,089,866 |
| Health Care Providers & Services - 1.1% | | | |
| Cigna Corp. | | 1,378 | 265,100 |
| UnitedHealth Group, Inc. | | 964 | 262,642 |
| | | | 527,742 |
| Pharmaceuticals - 8.9% | | | |
| AstraZeneca PLC (United Kingdom) | | 6,473 | 633,238 |
| Bristol-Myers Squibb Co. | | 10,570 | 665,382 |
| Eli Lilly & Co. | | 2,147 | 299,807 |
| Johnson & Johnson | | 10,707 | 1,593,951 |
| Roche Holding AG (participation certificate) | | 2,103 | 705,491 |
| Sanofi SA | | 4,293 | 414,010 |
| | | | 4,311,879 |
|
| TOTAL HEALTH CARE | | | 6,797,175 |
|
| INDUSTRIALS - 8.9% | | | |
| Aerospace & Defense - 3.6% | | | |
| General Dynamics Corp. | | 2,147 | 376,670 |
| Northrop Grumman Corp. | | 1,010 | 378,316 |
| United Technologies Corp. | | 6,639 | 997,178 |
| | | | 1,752,164 |
| Commercial Services & Supplies - 0.3% | | | |
| Waste Connection, Inc. (Canada) | | 1,430 | 137,824 |
| Electrical Equipment - 1.1% | | | |
| AMETEK, Inc. | | 5,690 | 552,784 |
| Industrial Conglomerates - 2.6% | | | |
| General Electric Co. | | 47,788 | 594,961 |
| Roper Technologies, Inc. | | 1,753 | 669,050 |
| | | | 1,264,011 |
| Machinery - 1.0% | | | |
| Fortive Corp. | | 3,150 | 236,030 |
| Ingersoll-Rand PLC | | 1,933 | 257,534 |
| | | | 493,564 |
| Professional Services - 0.3% | | | |
| Equifax, Inc. | | 920 | 137,908 |
|
| TOTAL INDUSTRIALS | | | 4,338,255 |
|
| INFORMATION TECHNOLOGY - 8.6% | | | |
| Communications Equipment - 0.8% | | | |
| Cisco Systems, Inc. | | 8,682 | 399,112 |
| Electronic Equipment & Components - 0.3% | | | |
| TE Connectivity Ltd. | | 1,328 | 122,415 |
| IT Services - 1.9% | | | |
| Amdocs Ltd. | | 3,257 | 234,341 |
| Black Knight, Inc. (a) | | 900 | 60,228 |
| Fiserv, Inc. (a) | | 1,371 | 162,614 |
| Paychex, Inc. | | 3,024 | 259,368 |
| Visa, Inc. Class A | | 910 | 181,063 |
| | | | 897,614 |
| Semiconductors & Semiconductor Equipment - 2.5% | | | |
| NXP Semiconductors NV | | 3,941 | 499,955 |
| Qualcomm, Inc. | | 3,257 | 277,855 |
| Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | | 7,666 | 413,504 |
| | | | 1,191,314 |
| Software - 1.9% | | | |
| Microsoft Corp. | | 5,511 | 938,138 |
| Technology Hardware, Storage & Peripherals - 1.2% | | | |
| Apple, Inc. | | 1,958 | 606,021 |
|
| TOTAL INFORMATION TECHNOLOGY | | | 4,154,614 |
|
| MATERIALS - 1.0% | | | |
| Chemicals - 0.9% | | | |
| DowDuPont, Inc. | | 5,953 | 304,675 |
| International Flavors & Fragrances, Inc. | | 1,116 | 146,319 |
| | | | 450,994 |
| Containers & Packaging - 0.1% | | | |
| Reynolds Consumer Products, Inc. (a) | | 1,800 | 51,390 |
|
| TOTAL MATERIALS | | | 502,384 |
|
| REAL ESTATE - 1.7% | | | |
| Equity Real Estate Investment Trusts (REITs) - 1.7% | | | |
| American Tower Corp. | | 2,395 | 555,017 |
| Public Storage | | 1,114 | 249,269 |
| | | | 804,286 |
| UTILITIES - 5.6% | | | |
| Electric Utilities - 3.1% | | | |
| Exelon Corp. | | 19,065 | 907,303 |
| NextEra Energy, Inc. | | 2,274 | 609,887 |
| | | | 1,517,190 |
| Independent Power and Renewable Electricity Producers - 0.9% | | | |
| NRG Energy, Inc. | | 6,030 | 222,447 |
| Vistra Energy Corp. | | 9,299 | 209,413 |
| | | | 431,860 |
| Multi-Utilities - 1.6% | | | |
| Ameren Corp. | | 3,659 | 300,221 |
| CenterPoint Energy, Inc. | | 6,336 | 167,777 |
| WEC Energy Group, Inc. | | 3,169 | 316,551 |
| | | | 784,549 |
|
| TOTAL UTILITIES | | | 2,733,599 |
|
| TOTAL COMMON STOCKS | | | |
| (Cost $44,157,744) | | | 48,095,988 |
|
| Money Market Funds - 0.4% | | | |
| Fidelity Cash Central Fund 1.58% (b) | | | |
| (Cost $172,879) | | 172,845 | 172,879 |
| TOTAL INVESTMENT IN SECURITIES - 99.5% | | | |
| (Cost $44,330,623) | | | 48,268,867 |
| NET OTHER ASSETS (LIABILITIES) - 0.5% | | | 262,192 |
| NET ASSETS - 100% | | | $48,531,059 |
Legend
(a) Non-income producing
(b) Affiliated fund that is generally 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.
Affiliated Central Funds
Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:
| Fund | Income earned |
| Fidelity Cash Central Fund | $6,114 |
| Fidelity Securities Lending Cash Central Fund | 341 |
| Total | $6,455 |
Amounts in the income column in the above table include any capital gain distributions from underlying funds, which are presented in the corresponding line-item in the Statement of Operations, if applicable. Amount for Fidelity Securities Lending Cash Central Fund 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.
Investment Valuation
The following is a summary of the inputs used, as of January 31, 2020, 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 below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.
| | Valuation Inputs at Reporting Date: |
| Description | Total | Level 1 | Level 2 | Level 3 |
| Investments in Securities: | | | | |
| Equities: | | | | |
| Communication Services | $4,421,566 | $4,421,566 | $-- | $-- |
| Consumer Discretionary | 3,513,262 | 3,513,262 | -- | -- |
| Consumer Staples | 4,632,803 | 3,960,447 | 672,356 | -- |
| Energy | 4,127,602 | 3,852,609 | 274,993 | -- |
| Financials | 12,070,442 | 12,070,442 | -- | -- |
| Health Care | 6,797,175 | 5,044,436 | 1,752,739 | -- |
| Industrials | 4,338,255 | 4,338,255 | -- | -- |
| Information Technology | 4,154,614 | 4,154,614 | -- | -- |
| Materials | 502,384 | 502,384 | -- | -- |
| Real Estate | 804,286 | 804,286 | -- | -- |
| Utilities | 2,733,599 | 2,733,599 | -- | -- |
| Money Market Funds | 172,879 | 172,879 | -- | -- |
| Total Investments in Securities: | $48,268,867 | $45,568,779 | $2,700,088 | $-- |
Other Information
Distribution of investments by country or territory of incorporation, as a percentage of Total Net Assets, is as follows (Unaudited):
| United States of America | 86.5% |
| Switzerland | 3.8% |
| United Kingdom | 2.5% |
| Netherlands | 1.7% |
| Canada | 1.6% |
| Others (Individually Less Than 1%) | 3.9% |
| | 100.0% |
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
| | | January 31, 2020 |
| Assets | | |
Investment in securities, at value — See accompanying schedule:
Unaffiliated issuers (cost $44,157,744) | $48,095,988 | |
| Fidelity Central Funds (cost $172,879) | 172,879 | |
| Total Investment in Securities (cost $44,330,623) | | $48,268,867 |
| Receivable for investments sold | | 280,943 |
| Receivable for fund shares sold | | 599 |
| Dividends receivable | | 50,185 |
| Distributions receivable from Fidelity Central Funds | | 762 |
| Other receivables | | 3 |
| Total assets | | 48,601,359 |
| Liabilities | | |
| Payable for investments purchased | $46,800 | |
| Payable for fund shares redeemed | 9,460 | |
| Accrued management fee | 14,040 | |
| Total liabilities | | 70,300 |
| Net Assets | | $48,531,059 |
| Net Assets consist of: | | |
| Paid in capital | | $44,492,187 |
| Total accumulated earnings (loss) | | 4,038,872 |
| Net Assets | | $48,531,059 |
| Net Asset Value, offering price and redemption price per share ($48,531,059 ÷ 4,480,652 shares) | | $10.83 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
| | | For the period
June 13, 2019 (commencement of operations) to
January 31, 2020 |
| Investment Income | | |
| Dividends | | $438,896 |
| Income from Fidelity Central Funds (including $341 from security lending) | | 6,455 |
| Total income | | 445,351 |
| Expenses | | |
| Management fee | $71,703 | |
| Independent trustees' fees and expenses | 81 | |
| Total expenses before reductions | 71,784 | |
| Expense reductions | (70) | |
| Total expenses after reductions | | 71,714 |
| Net investment income (loss) | | 373,637 |
| Realized and Unrealized Gain (Loss) | | |
| Net realized gain (loss) on: | | |
| Investment securities: | | |
| Unaffiliated issuers | 59,678 | |
| Foreign currency transactions | 418 | |
| Total net realized gain (loss) | | 60,096 |
| Change in net unrealized appreciation (depreciation) on investment securities | | 3,938,244 |
| Net gain (loss) | | 3,998,340 |
| Net increase (decrease) in net assets resulting from operations | | $4,371,977 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
| | For the period
June 13, 2019 (commencement of operations) to
January 31, 2020 |
| Increase (Decrease) in Net Assets | |
| Operations | |
| Net investment income (loss) | $373,637 |
| Net realized gain (loss) | 60,096 |
| Change in net unrealized appreciation (depreciation) | 3,938,244 |
| Net increase (decrease) in net assets resulting from operations | 4,371,977 |
| Distributions to shareholders | (333,105) |
| Share transactions | |
| Proceeds from sales of shares | 47,694,819 |
| Reinvestment of distributions | 333,105 |
| Cost of shares redeemed | (3,535,737) |
| Net increase (decrease) in net assets resulting from share transactions | 44,492,187 |
| Total increase (decrease) in net assets | 48,531,059 |
| Net Assets | |
| Beginning of period | – |
| End of period | $48,531,059 |
| Other Information | |
| Shares | |
| Sold | 4,782,107 |
| Issued in reinvestment of distributions | 31,108 |
| Redeemed | (332,563) |
| Net increase (decrease) | 4,480,652 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Equity-Income K6 Fund
| | |
| Year ended January 31, | 2020 A |
| Selected Per–Share Data | |
| Net asset value, beginning of period | $10.00 |
| Income from Investment Operations | |
| Net investment income (loss)B | .12 |
| Net realized and unrealized gain (loss) | .79 |
| Total from investment operations | .91 |
| Distributions from net investment income | (.08) |
| Distributions from net realized gain | –C |
| Total distributions | (.08) |
| Net asset value, end of period | $10.83 |
| Total ReturnD,E | 9.14% |
| Ratios to Average Net AssetsF,G | |
| Expenses before reductions | .34%H |
| Expenses net of fee waivers, if any | .34%H |
| Expenses net of all reductions | .34%H |
| Net investment income (loss) | 1.78%H |
| Supplemental Data | |
| Net assets, end of period (000 omitted) | $48,531 |
| Portfolio turnover rateI | 21%H,J |
A For the period June 13, 2019 (commencement of operations) to January 31, 2020.
B Calculated based on average shares outstanding during the period.
C Amount represents less than $.005 per share.
D Total returns for periods of less than one year are not annualized.
E Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
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 Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer term operating periods. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.
H Annualized.
I Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
J Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended January 31, 2020
1. Organization.
Fidelity Equity-Income K6 Fund (the Fund) is a fund of Fidelity Devonshire Trust (the Trust) and is authorized to issue an unlimited number of shares. Share transactions on the Statement of Changes in Net Assets may contain exchanges between affiliated funds. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares generally are available only to employer-sponsored retirement plans that are recordkept by Fidelity, or to certain employer-sponsored retirement plans that are not recordkept by Fidelity.
Effective January 1, 2020:
Investment advisers Fidelity Investments Money Management, Inc., FMR Co., Inc., and Fidelity SelectCo, LLC, merged with and into Fidelity Management & Research Company. In connection with the merger transactions, the resulting, merged investment adviser was then redomiciled from Massachusetts to Delaware, changed its corporate structure from a corporation to a limited liability company, and changed its name to "Fidelity Management & Research Company LLC".
2. Investments in Fidelity Central Funds.
The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser 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 the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date ranged from less than .005% to .01%.
A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC website or upon request.
3. Significant Accounting Policies.
The Fund is an investment company and applies the accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investments Companies. 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:
Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Board of Trustees (the Board) has delegated the day to day responsibility for the valuation of the Fund's investments to the Fair Value Committee (the Committee) established by the Fund's investment adviser. In accordance with valuation policies and procedures approved by the Board, the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Committee, in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and reports to the Board on the Committee's activities and fair value determinations. The Board monitors the appropriateness of the procedures used in valuing the Fund's investments and ratifies the fair value determinations of the Committee.
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)
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 a third party pricing vendor 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 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 may be used and would be categorized as Level 2 in the hierarchy. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.
Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.
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 January 31, 2020 is included at the end of the Fund's Schedule of Investments.
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 rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, 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. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. 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 U.S. Federal income taxes is required. As of January 31, 2020, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The 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.
Distributions are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, partnerships and losses deferred due to wash sales.
As of period end, the cost and unrealized appreciation (depreciation) in securities, and derivatives if applicable, for federal income tax purposes were as follows:
| Gross unrealized appreciation | $4,523,802 |
| Gross unrealized depreciation | (583,501) |
| Net unrealized appreciation (depreciation) | $3,940,301 |
| Tax Cost | $44,328,566 |
The tax-based components of distributable earnings as of period end were as follows:
| Undistributed ordinary income | $98,399 |
| Undistributed long-term capital gain | $171 |
| Net unrealized appreciation (depreciation) on securities and other investments | $3,940,301 |
The tax character of distributions paid was as follows:
| | January 31, 2020(a) |
| Ordinary Income | $333,105 |
(a) For the period June 13, 2019 (commencement of operations) to January 31, 2020.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $4,237,974 and $3,822,048, respectively.
Unaffiliated Exchanges In-Kind. During the period, the Fund received investments and cash valued at $6,437,242 in exchange for 631,721 shares of the Fund. The amount of in-kind exchanges is included in share transactions in the accompanying Statement of Changes in Net Assets.
5. Fees and Other Transactions with Affiliates.
Management Fee. Fidelity Management & Research Company LLC (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee that is based on an annual rate of .34% of average net assets. Under the management contract, the investment adviser or an affiliate pays all other expenses of the Fund, excluding fees and expenses of the independent Trustees, and certain miscellaneous expenses such as proxy and shareholder meeting expenses.
Brokerage Commissions. A portion of portfolio transactions were placed with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were as follows:
| | Amount |
| Fidelity Equity-Income K6 Fund | $62 |
Interfund Trades. The Fund may purchase from or sell securities to other Fidelity Funds under procedures adopted by the Board. The procedures have been designed to ensure these interfund trades are executed in accordance with Rule 17a-7 of the 1940 Act. Interfund trades are included within the respective purchases and sales amounts shown in the Purchases and Sales of Investments note.
Affiliated Exchanges In-Kind. During the period, the Fund received investments and cash valued at $38,316,698 in exchange for 3,870,373 shares of the Fund. The amount of in-kind exchanges is included in share transactions in the accompanying Statement of Changes in Net Assets.
6. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. For equity securities, lending agents are used, including National Financial Services (NFS), an affiliate of the Fund. Pursuant to a securities lending agreement, NFS will receive a fee, which is capped at 9.9% of daily lending revenue, for its services as lending agent. The Fund may lend securities to certain qualified borrowers, including NFS. 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. The Fund or borrower may terminate the loan at any time, and if the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. At period end, there were no security loans outstanding. Total fees paid by the Fund to NFS, as lending agent, amounted to $20. 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. During the period, there were no securities loaned to NFS.
7. Expense Reductions.
Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $17 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of certain uninvested cash balances were used to reduce the Fund's expenses by $53.
8. Other.
The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Fidelity Devonshire Trust and Shareholders of Fidelity Equity-Income K6 Fund:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities of Fidelity Equity-Income K6 Fund (the "Fund"), a fund of Fidelity Devonshire Trust, including the schedule of investments, as of January 31, 2020, the related statement of operations, the statement of changes in net assets and the financial highlights for the period from June 13, 2019 (commencement of operations) to January 31, 2020, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of January 31, 2020, and the results of its operations, the changes in its net assets and the financial highlights for the period from June 13, 2019 (commencement of operations) to January 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements and financial highlights based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of January 31, 2020, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audit provides a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
March 16, 2020
We have served as the auditor of one or more of the Fidelity investment companies since 1999.
Trustees and Officers
The Trustees, Members of the Advisory Board (if any), and officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Michael E. Wiley, each of the Trustees oversees 302 funds. Mr. Wiley oversees 199 funds.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the Investment Company Act of 1940 (1940 Act)) of the trust and the fund is referred to herein as an Independent Trustee. Each Independent Trustee shall retire not later than the last day of the calendar year in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. Officers and Advisory Board Members hold office without limit in time, except that any officer or Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund’s Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-835-5092.
Experience, Skills, Attributes, and Qualifications of the Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.
In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.
Board Structure and Oversight Function. James C. Curvey is an interested person and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Ned C. Lautenbach serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.
Fidelity® funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's high income and certain equity funds, and other Boards oversee Fidelity's investment-grade bond, money market, asset allocation, and other equity funds. The asset allocation funds may invest in Fidelity® funds overseen by the fund's Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity® funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity® funds overseen by each Board.
The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations, Audit, and Compliance Committees. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of Fidelity's risk management program for the Fidelity® funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Trustees."
Interested Trustees*:
Correspondence intended for a Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
James C. Curvey (1935)
Year of Election or Appointment: 2007
Trustee
Chairman of the Board of Trustees
Mr. Curvey also serves as Trustee of other Fidelity® funds. Mr. Curvey is Vice Chairman (2007-present) and Director of FMR LLC (diversified financial services company). In addition, Mr. Curvey is an Overseer Emeritus for the Boston Symphony Orchestra, a Director of Artis-Naples, and a Trustee of Brewster Academy in Wolfeboro, New Hampshire. Previously, Mr. Curvey served as a Director of Fidelity Research & Analysis Co. (investment adviser firm, 2009-2018), Director of Fidelity Investments Money Management, Inc. (investment adviser firm, 2009-2014) and a Director of FMR and FMR Co., Inc. (investment adviser firms, 2007-2014).
* Determined to be an “Interested Trustee” by virtue of, among other things, his or her affiliation with the trust or various entities under common control with FMR.
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Independent Trustees:
Correspondence intended for an Independent Trustee may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Year of Birth; Principal Occupations and Other Relevant Experience+
Dennis J. Dirks (1948)
Year of Election or Appointment: 2005
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks served as Chief Operating Officer and as a member of the Board of The Depository Trust & Clearing Corporation (financial markets infrastructure), President, Chief Operating Officer and a member of the Board of The Depository Trust Company (DTC), President and a member of the Board of the National Securities Clearing Corporation (NSCC), Chief Executive Officer and a member of the Board of the Government Securities Clearing Corporation and Chief Executive Officer and a member of the Board of the Mortgage-Backed Securities Clearing Corporation. Mr. Dirks currently serves as a member of the Finance Committee (2016-present) and Board (2017-present) and is Treasurer (2018-present) of the Asolo Repertory Theatre.
Donald F. Donahue (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Donahue also serves as Trustee of other Fidelity® funds. Mr. Donahue serves as President and Chief Executive Officer of Miranda Partners, LLC (risk consulting for the financial services industry, 2012-present). Previously, Mr. Donahue served as Chief Executive Officer (2006-2012), Chief Operating Officer (2003-2006) and Managing Director, Customer Marketing and Development (1999-2003) of The Depository Trust & Clearing Corporation (financial markets infrastructure). Mr. Donahue currently serves as a member (2007-present) and Co-Chairman (2016-present) of the Board of United Way of New York, a member of the Board of NYC Leadership Academy (2012-present) and a member of the Board of Advisors of Ripple Labs, Inc. (financial services, 2015-present). Mr. Donahue previously served as a member of the Advisory Board of certain Fidelity® funds (2015-2018).
Alan J. Lacy (1953)
Year of Election or Appointment: 2008
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Previously, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity), Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail), Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005) and Chairman (2014-2017) and a member of the Board (2010-2017) of Dave & Buster’s Entertainment, Inc. (restaurant and entertainment complexes). Mr. Lacy currently serves as a member of the Board of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present), Trustee of the California Chapter of The Nature Conservancy (2015-present) and a member of the Board of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2000
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as Chair of the Board of Governors, State University System of Florida (2013-present) and is a member of the Council on Foreign Relations (1994-present). He is also a member and has in the past served as Chairman of the Board of Directors of Artis-Naples (2012-present). Previously, Mr. Lautenbach served as a member and then Lead Director of the Board of Directors of Eaton Corporation (diversified industrial, 1997-2016). He was also a Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010); as well as Director of Sony Corporation (2006-2007). In addition, Mr. Lautenbach had a 30-year career with IBM (technology company), during which time he served as Senior Vice President and as a member of the Corporate Executive Committee (1968-1998).
Joseph Mauriello (1944)
Year of Election or Appointment: 2008
Trustee
Mr. Mauriello also serves as Trustee of other Fidelity® funds. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services, 1965-2005). Mr. Mauriello currently serves as a member of the Independent Directors Council Governing Council (2015-present). Previously, Mr. Mauriello served as a member of the Board of XL Group plc. (global insurance and re-insurance, 2006-2018).
Cornelia M. Small (1944)
Year of Election or Appointment: 2005
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Previously, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments and a member of Scudder, Stevens & Clark and Scudder Kemper Investments. Ms. Small previously served as a member of the Board (2009-2019) and Chair of the Investment Committee (2010-2019) of the Teagle Foundation and a member of the Investment Committee of the Berkshire Taconic Community Foundation (2008-2019).
Garnett A. Smith (1947)
Year of Election or Appointment: 2018
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to his retirement, Mr. Smith served as Chairman and Chief Executive Officer (1990-1997) and President (1986-1990) of Inbrand Corp. (manufacturer of personal absorbent products). Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank (now Bank of America). Mr. Smith previously served as a member of the Advisory Board of certain Fidelity® funds (2012-2013).
David M. Thomas (1949)
Year of Election or Appointment: 2008
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Previously, Mr. Thomas served as Executive Chairman (2005-2006) and Chairman and Chief Executive Officer (2000-2005) of IMS Health, Inc. (pharmaceutical and healthcare information solutions). Mr. Thomas currently serves as Non-Executive Chairman of the Board of Fortune Brands Home and Security (home and security products, 2011-present), and a member of the Board (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication).
Michael E. Wiley (1950)
Year of Election or Appointment: 2018
Trustee
Mr. Wiley also serves as Trustee or a member of the Advisory Board of other Fidelity® funds. Previously, Mr. Wiley served as Chairman, President and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004). Mr. Wiley currently serves as a member of the Board of High Point Resources (exploration and production, 2005-present). Previously, Mr. Wiley served as a member of the Board of Andeavor Corporation (independent oil refiner and marketer, 2005-2018) and a member of the Board of Andeavor Logistics LP (natural resources logistics, 2015-2018).
+ The information includes the Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to the Trustee's qualifications to serve as a Trustee, which led to the conclusion that the Trustee should serve as a Trustee for the fund.
Advisory Board Members and Officers:
Correspondence intended for a Member of the Advisory Board (if any) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for an officer or Peter S. Lynch may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210. Officers appear below in alphabetical order.
Name, Year of Birth; Principal Occupation
Vicki L. Fuller (1957)
Year of Election or Appointment: 2018
Member of the Advisory Board
Ms. Fuller also serves as a member of the Advisory Board of other Fidelity® funds. Previously, Ms. Fuller served as Chief Investment Officer of the New York State Common Retirement Fund (2012-2018) and held a variety of positions at AllianceBernstein L.P. (global asset management, 1985-2012), including Managing Director (2006-2012) and Senior Vice President and Senior Portfolio Manager (2001-2006). Ms. Fuller currently serves as a member of the Board, Audit Committee and Nominating and Governance Committee of The Williams Companies, Inc. (natural gas infrastructure, 2018-present) and as a member of the Board of Treliant, LLC (consulting, 2019-present).
Patricia L. Kampling (1959)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Kampling also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Kampling served as Chairman of the Board and Chief Executive Officer (2012-2019), President and Chief Operating Officer (2011-2012) and Executive Vice President and Chief Financial Officer (2010-2011) of Alliant Energy Corporation. Ms. Kampling currently serves as a member of the Board, Compensation Committee and Executive Committee and as Chair of the Audit Committee of Briggs & Stratton Corporation (manufacturing, 2011-present) and as a member of the Board, Audit, Finance and Risk Committee and Safety, Environmental, Technology and Operations Committee of American Water Works Company, Inc. (utilities company, 2019-present). In addition, Ms. Kampling currently serves as a member of the Board of the Nature Conservancy, Wisconsin Chapter (2019-present). Previously, Ms. Kampling served as a member of the Board of Interstate Power and Light Company (2012-2019) and Wisconsin Power and Light Company (2012-2019) (each a subsidiary of Alliant Energy Corporation) and as a member of the Board and Workforce Development Committee of the Business Roundtable (2018-2019).
Peter S. Lynch (1944)
Year of Election or Appointment: 2003
Member of the Advisory Board
Mr. Lynch also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Lynch is Vice Chairman and a Director of Fidelity Management & Research Company LLC (investment adviser firm). In addition, Mr. Lynch serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund. Previously, Mr. Lynch served as Vice Chairman and a Director of FMR Co., Inc. (investment adviser firm) and on the Special Olympics International Board of Directors (1997-2006).
Susan Tomasky (1953)
Year of Election or Appointment: 2020
Member of the Advisory Board
Ms. Tomasky also serves as Member of the Advisory Board of other Fidelity® funds. Prior to her retirement, Ms. Tomasky served in various executive officer positions at American Electric Power Company, Inc. (1998-2011), including most recently as President of AEP Transmission (2007-2011). Ms. Tomasky currently serves as a member of the Board and Sustainability Committee and as Chair of the Audit Committee of Marathon Petroleum Corporation (2018-present) and as a member of the Board, Corporate Governance Committee and Organization and Compensation Committee and as Chair of the Audit Committee of Public Service Enterprise Group, Inc. (utilities company, 2012-present). In addition, Ms. Tomasky currently serves as a member of the Board of the Columbus Regional Airport Authority (2007-present), as a member of the Board of the Royal Shakespeare Company – America (2009-present), as a member of the Board of the Columbus Association for the Performing Arts (2011-present) and as a member of the Board of Kenyon College (2016-present). Previously, Ms. Tomasky served as a member of the Board (2011-2019) and as Lead Independent Director (2015-2018) of Andeavor Corporation (previously Tesoro Corporation) (independent oil refiner and marketer) and as a member of the Board of Summit Midstream Partners LP (energy, 2012-2018).
Elizabeth Paige Baumann (1968)
Year of Election or Appointment: 2017
Anti-Money Laundering (AML) Officer
Ms. Baumann also serves as AML Officer of other funds. She is Chief AML Officer (2012-present) and Senior Vice President (2014-present) of FMR LLC (diversified financial services company) and is an employee of Fidelity Investments. Previously, Ms. Baumann served as AML Officer of certain funds (2017-2019), as AML Officer of the funds (2012-2016), and Vice President (2007-2014) and Deputy Anti-Money Laundering Officer (2007-2012) of FMR LLC.
Craig S. Brown (1977)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Brown also serves as Assistant Treasurer of other funds. Mr. Brown is an employee of Fidelity Investments (2013-present).
John J. Burke III (1964)
Year of Election or Appointment: 2018
Chief Financial Officer
Mr. Burke also serves as Chief Financial Officer of other funds. Mr. Burke serves as Head of Investment Operations for Fidelity Fund and Investment Operations (2018-present) and is an employee of Fidelity Investments (1998-present). Previously Mr. Burke served as head of Asset Management Investment Operations (2012-2018).
William C. Coffey (1969)
Year of Election or Appointment: 2019
Assistant Secretary
Mr. Coffey also serves as Assistant Secretary of other funds. He is Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2010-present), and is an employee of Fidelity Investments. Previously, Mr. Coffey served as Secretary and CLO of certain funds (2018-2019); CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2018-2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2018-2019); CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2018-2019); and Assistant Secretary of certain funds (2009-2018).
Timothy M. Cohen (1969)
Year of Election or Appointment: 2018
Vice President
Mr. Cohen also serves as Vice President of other funds. Mr. Cohen serves as Co-Head of Equity (2018-present), a Director of Fidelity Management & Research (Japan) Limited (investment adviser firm, 2016-present), and is an employee of Fidelity Investments. Previously, Mr. Cohen served as Executive Vice President of Fidelity SelectCo, LLC (2019), Head of Global Equity Research (2016-2018), Chief Investment Officer - Equity and a Director of Fidelity Management & Research (U.K.) Inc. (investment adviser firm, 2013-2015) and as a Director of Fidelity Management & Research (Hong Kong) Limited (investment adviser firm, 2017).
Jonathan Davis (1968)
Year of Election or Appointment: 2010
Assistant Treasurer
Mr. Davis also serves as Assistant Treasurer of other funds. Mr. Davis serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (diversified financial services company, 2003-2010).
Laura M. Del Prato (1964)
Year of Election or Appointment: 2018
Assistant Treasurer
Ms. Del Prato also serves as an officer of other funds. Ms. Del Prato is an employee of Fidelity Investments (2017-present). Prior to joining Fidelity Investments, Ms. Del Prato served as a Managing Director and Treasurer of the JPMorgan Mutual Funds (2014-2017). Prior to JPMorgan, Ms. Del Prato served as a partner at Cohen Fund Audit Services (accounting firm, 2012-2013) and KPMG LLP (accounting firm, 2004-2012).
Colm A. Hogan (1973)
Year of Election or Appointment: 2020
Assistant Treasurer
Mr. Hogan also serves as an officer of other funds. Mr. Hogan serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2005-present). Previously, Mr. Hogan served as Deputy Treasurer of certain Fidelity® funds (2016-2020) and Assistant Treasurer of certain Fidelity® funds (2016-2018).
Pamela R. Holding (1964)
Year of Election or Appointment: 2018
Vice President
Ms. Holding also serves as Vice President of other funds. Ms. Holding serves as Co-Head of Equity (2018-present) and is an employee of Fidelity Investments (2013-present). Previously, Ms. Holding served as Executive Vice President of Fidelity SelectCo, LLC (2019) and as Chief Investment Officer of Fidelity Institutional Asset Management (2013-2018).
Cynthia Lo Bessette (1969)
Year of Election or Appointment: 2019
Secretary and Chief Legal Officer (CLO)
Ms. Lo Bessette also serves as an officer of other funds. Ms. Lo Bessette serves as CLO, Secretary, and Senior Vice President of Fidelity Management & Research Company LLC (investment adviser firm, 2019-present); and CLO of Fidelity Management & Research (Hong Kong) Limited, FMR Investment Management (UK) Limited, and Fidelity Management & Research (Japan) Limited (investment adviser firms, 2019-present). She is a Senior Vice President and Deputy General Counsel of FMR LLC (diversified financial services company, 2019-present), and is an employee of Fidelity Investments. Previously, Ms. Lo Bessette served as CLO, Secretary, and Senior Vice President of FMR Co., Inc. (investment adviser firm, 2019); Secretary of Fidelity SelectCo, LLC and Fidelity Investments Money Management, Inc. (investment adviser firms, 2019). Prior to joining Fidelity Investments, Ms. Lo Bessette was Executive Vice President, General Counsel (2016-2019) and Senior Vice President, Deputy General Counsel (2015-2016) of OppenheimerFunds (investment management company) and Deputy Chief Legal Officer (2013-2015) of Jennison Associates LLC (investment adviser firm).
Chris Maher (1972)
Year of Election or Appointment: 2020
Deputy Treasurer
Mr. Maher also serves as an officer of other funds. Mr. Maher serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), and is an employee of Fidelity Investments (2008-present). Previously, Mr. Maher served as Assistant Treasurer of certain funds (2013-2020); Vice President of Asset Management Compliance (2013), Vice President of the Program Management Group of FMR (investment adviser firm, 2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2016
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company LLC (investment adviser firm, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served as Compliance Officer of FMR Co., Inc. (investment adviser firm, 2016-2019), as Executive Vice President of Fidelity Investments Money Management, Inc. (investment adviser firm, 2013-2016) and served in other fund officer roles.
Stacie M. Smith (1974)
Year of Election or Appointment: 2016
President and Treasurer
Ms. Smith also serves as an officer of other funds. Ms. Smith serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), is an employee of Fidelity Investments (2009-present), and has served in other fund officer roles. Prior to joining Fidelity Investments, Ms. Smith served as Senior Audit Manager of Ernst & Young LLP (accounting firm, 1996-2009). Previously, Ms. Smith served as Assistant Treasurer (2013-2019) and Deputy Treasurer (2013-2016) of certain Fidelity® funds.
Marc L. Spector (1972)
Year of Election or Appointment: 2016
Assistant Treasurer
Mr. Spector also serves as an officer of other funds. Mr. Spector serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (2016-present). Prior to joining Fidelity Investments, Mr. Spector served as Director at the Siegfried Group (accounting firm, 2013-2016), and prior to Siegfried Group as audit senior manager at Deloitte & Touche LLP (accounting firm, 2005-2013).
Jim Wegmann (1979)
Year of Election or Appointment: 2019
Assistant Treasurer
Mr. Wegmann also serves as Assistant Treasurer of other funds. Mr. Wegmann is an employee of Fidelity Investments (2011-present).
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 (August 1, 2019 to January 31, 2020).
Actual Expenses
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
| | Annualized Expense Ratio-A | Beginning
Account Value
August 1, 2019 | Ending
Account Value
January 31, 2020 | Expenses Paid
During Period-B
August 1, 2019
to January 31, 2020 |
| Actual | .34% | $1,000.00 | $1,073.60 | $1.78 |
| Hypothetical-C | | $1,000.00 | $1,023.49 | $1.73 |
A Annualized expense ratio reflects expenses net of applicable fee waivers.
B Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
C 5% return per year before expenses
Distributions (Unaudited)
The Board of Trustees of Fidelity Equity-Income K6 Fund voted to pay on March 9, 2020, to shareholders of record at the opening of business on March 6, 2020, a distribution of $0.013 per share derived from capital gains realized from sales of portfolio securities.
The fund hereby designates as a capital gain dividend with respect to the taxable year ended January 31, 2020, $171, or, if subsequently determined to be different, the net capital gain of such year.
A total of 0.31% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.
The fund designates 92% of the dividends distributed during the fiscal year as qualifying for the dividends–received deduction for corporate shareholders.
The fund designates 100% of the dividends distributed in July, October, and December during the fiscal year as amounts which may be taken into account as a dividend for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2021 of amounts for use in preparing 2020 income tax returns.
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Equity-Income K6 Fund
Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company LLC (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. FMR and the sub-advisers are referred to herein as the Investment Advisers. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.
Approval of Amended and Restated Advisory Contracts. At its November 2019 meeting, the Board unanimously determined to approve an amended and restated management contract and sub-advisory agreements (Amended and Restated Contracts) for a stub period of January 1, 2020 through January 31, 2020 in connection with a consolidation of certain of Fidelity's advisory businesses. The Board considered that, on or about January 1, 2020, FMR Co., Inc. (FMRC) expected to merge with and into FMR and, after the merger, FMR expected to redomicile as a Delaware limited liability company. The Board also approved the termination of the sub-advisory agreement with FMRC upon the completion of the merger. The Board noted that references to FMR in the Amended and Restated Contracts would be updated to reflect FMR's new form of organization and domicile. The Board also noted Fidelity's assurance that neither the planned consolidation nor the Amended and Restated Contracts will change the investment processes, the level or nature of services provided, the resources and personnel allocated, trading and compliance operations, or any fees paid by the fund.
The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established various standing committees (Committees), each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to review matters specifically related to the Board's annual consideration of the renewal of the Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through joint ad hoc committees to discuss certain matters relevant to all of the Fidelity funds.
At its January 2020 meeting, the Board unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services provided by and the profits realized by Fidelity from its relationships with the fund; and (iv) the extent to which, if any, economies of scale exist and are realized as the fund grows, and whether any economies of scale are appropriately shared with fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders of the fund have a broad range of investment choices available to them, including a wide choice among funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.
Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of Fidelity, and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the investment personnel compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund. Additionally, the Board considered the portfolio managers' investments, if any, in the funds that they manage.
Resources Dedicated to Investment Management and Support Services. The Board and the Fund Oversight and Research Committees reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, training, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board considered that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading, risk management, compliance, and technology and operations capabilities and resources, which are integral parts of the investment management process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians, subcustodians, and pricing vendors; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures. The Board also reviewed the allocation of fund brokerage, including allocations to brokers affiliated with the Investment Advisers, the use of brokerage commissions to pay fund expenses, and the use of "soft" commission dollars to pay for research services.
The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value and convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information over the Internet and through telephone representatives, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.
The Board noted that it and the boards of certain other Fidelity funds had formed an ad hoc Committee on Transfer Agency Fees to review the variety of transfer agency fee structures throughout the industry and Fidelity's competitive positioning with respect to industry participants.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including: (i) continuing to dedicate additional resources to Fidelity's investment research process, which includes meetings with management of issuers of securities in which the funds invest, and to the support of the senior management team that oversees asset management; (ii) continuing efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and ETFs with innovative structures, strategies and pricing and making other enhancements to meet client needs; (iv) launching new share classes of existing funds; (v) eliminating purchase minimums and broadening eligibility requirements for certain funds and share classes; (vi) reducing management fees and total expenses for certain target date funds and index funds; (vii) lowering expense caps for certain existing funds and classes, and converting certain voluntary expense caps to contractual caps, to reduce expenses borne by shareholders; (viii) rationalizing product lines and gaining increased efficiencies from fund mergers, liquidations, and share class consolidations; (ix) continuing to develop, acquire and implement systems and technology to improve services to the funds and shareholders, strengthen information security, and increase efficiency; and (x) continuing to implement enhancements to further strengthen Fidelity's product line to increase investors' probability of success in achieving their investment goals, including retirement income goals.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions. As the fund recently commenced operations, the Board did not believe that it was appropriate to assign significant weight to its limited investment performance.
Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should continue to benefit the shareholders of the fund.
Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes created for the purpose of facilitating the Trustees' competitive analysis of management fees and total expenses. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable investment mandates. Combining Lipper investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison.
Management Fee. The Board considered two proprietary management fee comparisons for the period of the fund's operations ended June 30 shown in basis points (BP) in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group." The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. Funds with comparable investment mandates offer exposure to similar types of securities. Funds with comparable management fee structures have similar management fee contractual arrangements (
e.g., flat rate charged for advisory services, all-inclusive fee rate,
etc.). "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher, and 20% had lower, management fees than the fund. The fund's actual TMG % and the number of funds in the Total Mapped Group are in the chart below. The "Asset-Sized Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked, is also included in the chart and was considered by the Board.
Fidelity Equity-Income K6 Fund
The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for the period ended June 30, 2019.
The Board noted that it and the boards of other Fidelity funds formed an ad hoc Committee on Group Fee, which meets periodically, to conduct an in-depth review of the "group fee" component of the management fee of funds with such management fee structures. The Committee's focus included the mechanics of the group fee, the competitive landscape of group fee structures, Fidelity funds with no group fee component (such as the fund) and investment products not included in group fee assets. The Board also considered that, for funds subject to the group fee, FMR agreed to voluntarily waive fees over a specified period of time in amounts designed to account for assets converted from certain funds to certain collective investment trusts.
The Board also noted that, in 2013, the ad hoc Committee on Management Fees was formed to conduct an in-depth review of the management fee rates of Fidelity's active equity mutual funds. The Committee focused on the following areas: (i) standard fee structures; (ii) research consumption and trading evolution; (iii) management fee competitiveness/profitability by category; and (iv) factors that drive institutional pricing.
Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.
Total Expense Ratio. In its review of the fund's total expense ratio, the Board considered the fund's unitary fee rate as well as other fund expenses paid by FMR under the fund's management contract, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted that Fidelity may agree to waive fees or reimburse expenses from time to time, and the extent to which, if any, it has done so for the fund. As part of its review, the Board also considered the current total expense ratio of the fund compared to competitive fund median expenses. The fund is compared to those funds in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund's total expense ratio ranked below the competitive median for the period ended June 30, 2019.
Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients with similar mandates. The Board noted that a joint ad hoc committee created by it and the boards of other Fidelity funds periodically reviews and compares Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds and also noted the most recent findings of the committee. The Board noted that the committee's review included a consideration of the differences in services provided, fees charged, and costs incurred, as well as competition in the markets serving the different categories of clients.
Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that the fund's total expense ratio was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.
On an annual basis, Fidelity presents to the Board information about the profitability of its relationships with the fund. Fidelity calculates profitability information for each fund, as well as aggregate profitability information for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies and the full Board approves such changes.
PricewaterhouseCoopers LLP (PwC), auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures in respect of the mathematical accuracy of the fund profitability information and its conformity to established allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.
The Board also reviewed Fidelity's non-fund businesses and potential indirect benefits such businesses may have received as a result of their association with Fidelity's mutual fund business (i.e., fall-out benefits) as well as cases where Fidelity's affiliates may benefit from the funds' business. The Board noted that changes to fall-out benefits year-over-year reflect business developments at Fidelity's various businesses. The Board considered that a joint ad hoc committee created by it and the boards of other Fidelity funds had recently been established, and met periodically, to evaluate potential fall-out benefits (PFOB Committee). The Board noted that the PFOB Committee, among other things: (i) discussed the legal framework surrounding potential fall-out benefits; (ii) reviewed the Board's responsibilities and approach to potential fall-out benefits; and (iii) reviewed practices employed by competitor funds regarding the review of potential fall-out benefits. The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund, including the conclusions of the PFOB Committee, and was satisfied that the profitability was not excessive.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale as assets grow through increased services to the fund, through waivers or reimbursements, or through fee or expense ratio reductions. The Board recognized that, due to the fund's current contractual arrangements, its expense ratio will not decline if the fund's operating costs decrease as assets grow, or rise as assets decrease. The Board also noted that a committee (the Economies of Scale Committee) created by it and the boards of other Fidelity funds periodically analyzes whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' advisory contracts, the Board requested and received additional information on certain topics, including: (i) fund flow and performance trends, in particular the underperformance of certain funds and strategies, and Fidelity's long-term strategies for certain funds; (ii) consideration of performance fees for additional funds; (iii) changes in Fidelity's non-fund businesses and the impact of such changes on the funds; (iv) metrics for evaluating index fund and ETF performance and information about ETF trading characteristics; (v) the methodology with respect to evaluating competitive fund data and peer group classifications and fee comparisons; (vi) the expense structures for different funds and classes; (vii) information regarding other accounts managed by Fidelity, including collective investment trusts and separately managed accounts; and (viii) Fidelity's philosophies and strategies for evaluating funds and classes with lower or declining asset levels.
Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board concluded that the advisory fee arrangements are fair and reasonable, and that the fund's Amended and Restated Contracts should be approved and the fund's Advisory Contracts should be renewed.
EQU-K6-ANN-0320
1.9893876.100
Item 2.
Code of Ethics
As of the end of the period, January 31, 2020, Fidelity Devonshire Trust (the trust) has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer and its Chief Financial Officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3.
Audit Committee Financial Expert
The Board of Trustees of the trust has determined that Joseph Mauriello is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Mauriello is independent for purposes of Item 3 of Form N-CSR.
Item 4.
Principal Accountant Fees and Services
Fees and Services
The following table presents fees billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte Entities”) in each of the last two fiscal years for services rendered to Fidelity Equity-Income K6 Fund, Fidelity Flex Mid Cap Value Fund, Fidelity Mid Cap Value K6 Fund, Fidelity Series All-Sector Equity Fund and Fidelity Series Value Discovery Fund (the “Funds”):
Services Billed by Deloitte Entities
January 31, 2020 FeesA,B
| | | | |
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Equity-Income K6 Fund | $36,700 | $- | $9,000 | $500 |
Fidelity Flex Mid Cap Value Fund | $35,100 | $100 | $7,300 | $900 |
Fidelity Mid Cap Value K6 Fund | $37,400 | $100 | $7,100 | $900 |
Fidelity Series All-Sector Equity Fund | $41,600 | $100 | $7,600 | $1,000 |
Fidelity Series Value Discovery Fund | $54,700 | $100 | $9,400 | $1,100 |
| | | | |
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Equity-Income K6 Fund | $- | $- | $- | $- |
Fidelity Flex Mid Cap Value Fund | $37,000 | $100 | $5,200 | $1,000 |
Fidelity Mid Cap Value K6 Fund | $50,000 | $100 | $5,200 | $1,000 |
Fidelity Series All-Sector Equity Fund | $44,000 | $100 | $5,100 | $1,300 |
Fidelity Series Value Discovery Fund | $53,000 | $100 | $9,200 | $1,400 |
AAmounts may reflect rounding.
BFidelity Equity-Income K6 Fund commenced operations on June 13, 2019.
The following table presents fees billed by PricewaterhouseCoopers LLP (“PwC”) in each of the last two fiscal years for services rendered to Fidelity Equity-Income Fund, Fidelity Mid Cap Value Fund, Fidelity Series Stock Selector Large Cap Value Fund and Fidelity Stock Selector Large Cap Value Fund (the “Funds”):
Services Billed by PwC
January 31, 2020 FeesA
| | | | |
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Equity-Income Fund | $60,000 | $5,200 | $17,400 | $2,200 |
Fidelity Mid Cap Value Fund | $47,900 | $4,000 | $8,100 | $1,700 |
Fidelity Series Stock Selector Large Cap Value Fund | $42,800 | $3,500 | $9,300 | $1,500 |
Fidelity Stock Selector Large Cap Value Fund | $42,700 | $4,000 | $8,100 | $1,700 |
|
|
|
|
|
| | | | |
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Equity-Income Fund | $64,000 | $5,700 | $4,500 | $2,800 |
Fidelity Mid Cap Value Fund | $49,000 | $4,300 | $5,700 | $2,100 |
Fidelity Series Stock Selector Large Cap Value Fund | $43,000 | $2,500 | $2,600 | $1,200 |
Fidelity Stock Selector Large Cap Value Fund | $49,000 | $4,300 | $3,300 | $2,100 |
|
|
|
|
|
|
|
|
|
|
AAmounts may reflect rounding.
The following table(s) present(s) fees billed by Deloitte Entities and PwC that were required to be approved by the Audit Committee for services that relate directly to the operations and financial reporting of the Fund(s) and that are rendered on behalf of Fidelity Management & Research Company ("FMR") and entities controlling, controlled by, or under common control with FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund(s) (“Fund Service Providers”):
Services Billed by Deloitte Entities
| | |
| January 31, 2020A,B | January 31, 2019A,B |
Audit-Related Fees | $287,500 | $- |
Tax Fees | $3,000 | $5,000 |
All Other Fees | $- | $- |
A Amounts may reflect rounding.
BMay include amounts billed prior to the Fidelity Equity-Income K6 Fund’s commencement of operations.
Services Billed by PwC
| | |
| January 31, 2020A | January 31, 2019A |
Audit-Related Fees | $7,927,700 | $7,930,000 |
Tax Fees | $23,500 | $20,000 |
All Other Fees | $- | $- |
A Amounts may reflect rounding.
“Audit-Related Fees” represent fees billed for assurance and related services that are reasonably related to the performance of the fund audit or the review of the fund's financial statements and that are not reported under Audit Fees.
“Tax Fees” represent fees billed for tax compliance, tax advice or tax planning that relate directly to the operations and financial reporting of the fund.
“All Other Fees” represent fees billed for services provided to the fund or Fund Service Provider, a significant portion of which are assurance related, that relate directly to the operations and financial reporting of the fund, excluding those services that are reported under Audit Fees, Audit-Related Fees or Tax Fees.
Assurance services must be performed by an independent public accountant.
* * *
The aggregate non-audit fees billed by Deloitte Entities and PwC for services rendered to the Fund(s), FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any Fund Service Provider for each of the last two fiscal years of the Fund(s) are as follows:
| | |
Billed By | January 31, 2020A,B | January 31, 2019A,B |
Deloitte Entities | $614,700 | $505,000 |
PwC | $12,655,600 | $11,165,000 |
|
|
|
A Amounts may reflect rounding.
BMay include amounts billed prior to the Fidelity Equity-Income K6 Fund’s commencement of operations.
The trust's Audit Committee has considered non-audit services that were not pre-approved that were provided by Deloitte Entities and PwC to Fund Service Providers to be compatible with maintaining the independence of Deloitte Entities and PwC in its(their) audit of the Fund(s), taking into account representations from Deloitte Entities and PwC, in accordance with Public Company Accounting Oversight Board rules, regarding its independence from the Fund(s) and its(their) related entities and FMR’s review of the appropriateness and permissibility under applicable law of such non-audit services prior to their provision to the Fund(s) Service Providers.
Audit Committee Pre-Approval Policies and Procedures
The trust’s Audit Committee must pre-approve all audit and non-audit services provided by a fund’s independent registered public accounting firm relating to the operations or financial reporting of the fund. Prior to the commencement of any audit or non-audit
services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of non-audit services by the audit firms that audit the Fidelity funds. The policies and procedures require that any non-audit service provided by a fund audit firm to a Fidelity fund and any non-audit service provided by a fund auditor to a Fund Service Provider that relates directly to the operations and financial reporting of a Fidelity fund (“Covered Service”) are subject to approval by the Audit Committee before such service is provided.
All Covered Services must be approved in advance of provision of the service either: (i) by formal resolution of the Audit Committee, or (ii) by oral or written approval of the service by the Chair of the Audit Committee (or if the Chair is unavailable, such other member of the Audit Committee as may be designated by the Chair to act in the Chair’s absence). The approval contemplated by (ii) above is permitted where the Treasurer determines that action on such an engagement is necessary before the next meeting of the Audit Committee.
Non-audit services provided by a fund audit firm to a Fund Service Provider that do not relate directly to the operations and financial reporting of a Fidelity fund are reported to the Audit Committee periodically.
Non-Audit Services Approved Pursuant to Rule 2-01(c)(7)(i)(C) and (ii) of Regulation S-X (“De Minimis Exception”)
There were no non-audit services approved or required to be approved by the Audit Committee pursuant to the De Minimis Exception during the Fund’s(s’) last two fiscal years relating to services provided to (i) the Fund(s) or (ii) any Fund Service Provider that relate directly to the operations and financial reporting of the Fund(s).
Item 5.
Audit Committee of Listed Registrants
Not applicable.
Item 6.
Investments
(a)
Not applicable.
(b)
Not applicable.
Item 7.
Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8.
Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9.
Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10.
Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the trust’s Board of Trustees.
Item 11.
Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the trust’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the trust’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the 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.
Disclosure of Securities Lending Activities for Closed-End Management
Investment Companies
Not applicable.
Item 13.
Exhibits
| | |
(a) | (1) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) |
| Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Devonshire Trust
| |
By: | /s/Stacie M. Smith |
| Stacie M. Smith |
| President and Treasurer |
|
|
Date: | March 26, 2020 |
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/Stacie M. Smith |
| Stacie M. Smith |
| President and Treasurer |
|
|
Date: | March 26, 2020 |
| |
By: | /s/John J. Burke III |
| John J. Burke III |
| Chief Financial Officer |
|
|
Date: | March 26, 2020 |
