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 811-21990
Fidelity Commonwealth Trust II
(Exact name of registrant as specified in charter)
245 Summer St., Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
William C. Coffey, 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: | August 31 |
|
|
Date of reporting period: | August 31, 2018 |
Item 1.
Reports to Stockholders
Fidelity® Large Cap Growth Enhanced Index Fund Fidelity® Large Cap Value Enhanced Index Fund Fidelity® Large Cap Core Enhanced Index Fund Fidelity® Mid Cap Enhanced Index Fund Fidelity® International Enhanced Index Fund Annual Report August 31, 2018 |
Contents
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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. © 2018 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-Q. Forms N-Q are available on the SEC’s web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330.
For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.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® Large Cap Growth Enhanced Index 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 August 31, 2018 | Past 1 year | Past 5 years | Past 10 years |
Fidelity® Large Cap Growth Enhanced Index Fund | 26.86% | 16.51% | 12.25% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Large Cap Growth Enhanced Index Fund on August 31, 2008.
The chart shows how the value of your investment would have changed, and also shows how the Russell 1000® Growth Index performed over the same period.
Period Ending Values | ||
$31,761 | Fidelity® Large Cap Growth Enhanced Index Fund | |
$33,481 | Russell 1000® Growth Index |
Fidelity® Large Cap Growth Enhanced Index Fund
Management's Discussion of Fund Performance
Market Recap: The S&P 500® index gained 19.66% for the year ending August 31, 2018, as the U.S. equity bellwether overcame resurgent volatility to achieve a record close in late August. The previous high on January 26 came just before stocks began a sharp retreat amid concern that rising inflation and the potential for the economy to overheat would prompt the U.S. Federal Reserve to pick up the pace of interest rate hikes. In February, the index posted its first negative monthly result since October 2016, and then lost further ground in March on fear of a global trade war. The market stabilized in April and turned upward through mid-June, when trade tension between the U.S. and China soured investor sentiment. Uncertainty lingered into July, but strong corporate earnings helped the S&P 500 rise 7.10% in the final two months of the period. For the full 12 months, growth handily topped value, while small-caps bested large-caps. By sector, information technology (+33%) led the way amid strong earnings growth from several major index constituents. Consumer discretionary was close behind, with its roughly 32% gain driven by retailers. Energy (+22%) moved higher alongside oil prices. Financials (+17%) and health care (+16%) fared well but trailed the broader market, along with industrials (+13%) and materials (+10%). At the back of the pack were defensive sectors that struggled amid rising interest rates and investors’ preference for risk: telecom services (+3%), consumer staples (+1%) and utilities (+1%).Comments from Maximilian Kaufmann, Senior Portfolio Manager of the Geode Capital Management, LLC, investment management team: For the fiscal year, the fund gained 26.86%, trailing the 27.23% return of the Russell 1000® Growth Index. Relative to the index, the fund was hampered by security selection in the information technology and consumer staples sectors. In contrast, stock picking in industrials, consumer discretionary and energy contributed. In individual terms, the fund was hurt by our average underweighting in Netflix, a video-on-demand provider whose shares more than doubled on strong growth in earnings and new subscribers. At the recommendation of our models, we began adding exposure to the stock and finished with a relative overweighting in the name. Another detractor was Western Digital, a maker of computer hard-disk drives and other data-storage products. The company's shares returned -25%, partly reflecting the prospect of weaker storage pricing. We sold this position late in the period. Also hampering results was financial services company BGC Partners (-10%), another stock sold from the fund. On the positive side, we benefited from an average overweighting in online retail giant Amazon.com, whose shares more than doubled, reflecting extremely strong earnings driven primarily by growth in its market-leading cloud-computing business. Another top contributor was industrial conglomerate General Electric (-45%), a struggling benchmark component we did not hold throughout the 12 months. Further adding value was Michael Kors Holdings (+72%), a retailer and designer of apparel and accessories.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® Large Cap Growth Enhanced Index Fund
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Apple, Inc. | 7.5 |
Amazon.com, Inc. | 6.3 |
Microsoft Corp. | 5.7 |
Facebook, Inc. Class A | 3.3 |
Alphabet, Inc. Class A | 2.6 |
UnitedHealth Group, Inc. | 2.3 |
Alphabet, Inc. Class C | 2.2 |
Home Depot, Inc. | 2.2 |
Visa, Inc. Class A | 2.1 |
MasterCard, Inc. Class A | 1.9 |
36.1 |
Top Market Sectors as of August 31, 2018
% of fund's net assets | |
Information Technology | 43.8 |
Consumer Discretionary | 19.2 |
Health Care | 15.3 |
Industrials | 10.2 |
Consumer Staples | 3.7 |
Financials | 2.8 |
Materials | 1.7 |
Real Estate | 1.2 |
Telecommunication Services | 0.5 |
Energy | 0.5 |
Asset Allocation (% of fund's net assets)
As of August 31, 2018 * | ||
Stocks and Equity Futures | 100.0% |
* Foreign investments - 1.2%
Fidelity® Large Cap Growth Enhanced Index Fund
Schedule of Investments August 31, 2018
Showing Percentage of Net Assets
Common Stocks - 98.9% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 19.2% | |||
Auto Components - 0.9% | |||
BorgWarner, Inc. | 5,524 | $241,785 | |
Gentex Corp. | 255,116 | 5,964,612 | |
Lear Corp. | 29,354 | 4,761,219 | |
10,967,616 | |||
Automobiles - 0.0% | |||
Tesla, Inc. (a) | 301 | 90,800 | |
Diversified Consumer Services - 0.2% | |||
Chegg, Inc. (a) | 13,736 | 444,772 | |
Grand Canyon Education, Inc. (a) | 16,645 | 1,983,085 | |
2,427,857 | |||
Hotels, Restaurants & Leisure - 0.6% | |||
Extended Stay America, Inc. unit | 87,673 | 1,769,241 | |
Hilton Worldwide Holdings, Inc. | 11,252 | 873,380 | |
Las Vegas Sands Corp. | 71,556 | 4,681,194 | |
Starbucks Corp. | 3,029 | 161,900 | |
7,485,715 | |||
Household Durables - 0.8% | |||
Garmin Ltd. | 8,916 | 607,536 | |
PulteGroup, Inc. | 140,175 | 3,917,891 | |
Toll Brothers, Inc. | 115,299 | 4,177,283 | |
8,702,710 | |||
Internet & Direct Marketing Retail - 7.7% | |||
Amazon.com, Inc. (a) | 36,869 | 74,206,605 | |
Netflix, Inc. (a) | 36,917 | 13,573,643 | |
The Booking Holdings, Inc. (a) | 1,757 | 3,428,873 | |
91,209,121 | |||
Media - 2.1% | |||
Comcast Corp. Class A | 115,163 | 4,259,879 | |
Omnicom Group, Inc. | 78,728 | 5,457,425 | |
The Walt Disney Co. | 134,803 | 15,100,632 | |
24,817,936 | |||
Multiline Retail - 0.5% | |||
Nordstrom, Inc. | 92,359 | 5,804,763 | |
Target Corp. | 2,354 | 205,975 | |
6,010,738 | |||
Specialty Retail - 4.4% | |||
Best Buy Co., Inc. | 61,924 | 4,926,673 | |
Gap, Inc. | 92,603 | 2,810,501 | |
Home Depot, Inc. | 126,801 | 25,457,837 | |
Lowe's Companies, Inc. | 25,088 | 2,728,320 | |
O'Reilly Automotive, Inc. (a) | 11,538 | 3,870,076 | |
Ross Stores, Inc. | 82,395 | 7,891,793 | |
TJX Companies, Inc. | 20,727 | 2,279,348 | |
Williams-Sonoma, Inc. (b) | 28,167 | 1,978,168 | |
51,942,716 | |||
Textiles, Apparel & Luxury Goods - 2.0% | |||
Carter's, Inc. | 12,988 | 1,375,819 | |
Columbia Sportswear Co. | 5,173 | 469,191 | |
Deckers Outdoor Corp. (a) | 46,448 | 5,659,224 | |
Michael Kors Holdings Ltd. (a) | 48,567 | 3,526,936 | |
NIKE, Inc. Class B | 145,493 | 11,959,525 | |
22,990,695 | |||
TOTAL CONSUMER DISCRETIONARY | 226,645,904 | ||
CONSUMER STAPLES - 3.7% | |||
Beverages - 2.5% | |||
Keurig Dr. Pepper, Inc. | 5,281 | 120,407 | |
PepsiCo, Inc. | 154,852 | 17,344,973 | |
The Coca-Cola Co. | 271,100 | 12,082,927 | |
29,548,307 | |||
Food & Staples Retailing - 0.4% | |||
Costco Wholesale Corp. | 9,519 | 2,219,164 | |
Walmart, Inc. | 26,071 | 2,499,166 | |
4,718,330 | |||
Household Products - 0.4% | |||
Colgate-Palmolive Co. | 4,536 | 301,236 | |
Procter & Gamble Co. | 47,536 | 3,943,111 | |
4,244,347 | |||
Personal Products - 0.1% | |||
Estee Lauder Companies, Inc. Class A | 9,067 | 1,270,468 | |
Tobacco - 0.3% | |||
Altria Group, Inc. | 57,655 | 3,373,971 | |
TOTAL CONSUMER STAPLES | 43,155,423 | ||
ENERGY - 0.5% | |||
Oil, Gas & Consumable Fuels - 0.5% | |||
CVR Energy, Inc. | 13,236 | 503,630 | |
PBF Energy, Inc. Class A | 109,295 | 5,674,596 | |
6,178,226 | |||
FINANCIALS - 2.8% | |||
Banks - 0.2% | |||
Comerica, Inc. | 20,973 | 2,044,448 | |
Capital Markets - 1.2% | |||
Evercore, Inc. Class A | 21,323 | 2,263,436 | |
LPL Financial | 31,181 | 2,065,429 | |
Morningstar, Inc. | 27,665 | 3,937,283 | |
MSCI, Inc. | 30,180 | 5,440,247 | |
S&P Global, Inc. | 3,318 | 686,992 | |
14,393,387 | |||
Consumer Finance - 0.6% | |||
American Express Co. | 60,903 | 6,454,500 | |
Capital One Financial Corp. | 4,854 | 480,983 | |
Discover Financial Services | 3,795 | 296,465 | |
7,231,948 | |||
Insurance - 0.8% | |||
Progressive Corp. | 142,879 | 9,648,619 | |
TOTAL FINANCIALS | 33,318,402 | ||
HEALTH CARE - 15.3% | |||
Biotechnology - 6.0% | |||
AbbVie, Inc. | 195,887 | 18,801,234 | |
Alnylam Pharmaceuticals, Inc. (a) | 594 | 72,866 | |
Amgen, Inc. | 81,930 | 16,370,433 | |
Biogen, Inc. (a) | 24,127 | 8,528,653 | |
Celgene Corp. (a) | 128,515 | 12,138,242 | |
Gilead Sciences, Inc. | 129,686 | 9,821,121 | |
Neurocrine Biosciences, Inc. (a) | 2,727 | 335,285 | |
Regeneron Pharmaceuticals, Inc. (a) | 12,340 | 5,019,295 | |
Sarepta Therapeutics, Inc. (a) | 834 | 115,125 | |
71,202,254 | |||
Health Care Equipment & Supplies - 0.5% | |||
Abbott Laboratories | 42,102 | 2,814,098 | |
Baxter International, Inc. | 25,291 | 1,880,892 | |
Hill-Rom Holdings, Inc. | 824 | 80,150 | |
Hologic, Inc. (a) | 7,166 | 284,920 | |
5,060,060 | |||
Health Care Providers & Services - 5.0% | |||
Aetna, Inc. | 2,115 | 423,571 | |
Anthem, Inc. | 1,090 | 288,556 | |
Centene Corp. (a) | 44,281 | 6,486,281 | |
Cigna Corp. | 40,707 | 7,666,756 | |
Humana, Inc. | 29,288 | 9,760,519 | |
UnitedHealth Group, Inc. | 103,002 | 27,651,917 | |
Wellcare Health Plans, Inc. (a) | 23,318 | 7,055,327 | |
59,332,927 | |||
Pharmaceuticals - 3.8% | |||
Bristol-Myers Squibb Co. | 172,801 | 10,463,101 | |
Eli Lilly & Co. | 109,588 | 11,577,972 | |
Johnson & Johnson | 83,985 | 11,311,940 | |
Merck & Co., Inc. | 102,500 | 7,030,475 | |
Pfizer, Inc. | 113,566 | 4,715,260 | |
45,098,748 | |||
TOTAL HEALTH CARE | 180,693,989 | ||
INDUSTRIALS - 10.2% | |||
Aerospace & Defense - 2.4% | |||
Curtiss-Wright Corp. | 4,729 | 633,450 | |
Lockheed Martin Corp. | 1,288 | 412,688 | |
Raytheon Co. | 28,632 | 5,710,366 | |
The Boeing Co. | 63,045 | 21,611,196 | |
28,367,700 | |||
Air Freight & Logistics - 0.1% | |||
United Parcel Service, Inc. Class B | 7,256 | 891,617 | |
Building Products - 0.0% | |||
Armstrong World Industries, Inc. (a) | 8,797 | 614,031 | |
Commercial Services & Supplies - 1.5% | |||
KAR Auction Services, Inc. | 108,564 | 6,805,877 | |
Republic Services, Inc. | 42,986 | 3,153,453 | |
Waste Management, Inc. | 86,816 | 7,891,574 | |
17,850,904 | |||
Construction & Engineering - 0.3% | |||
EMCOR Group, Inc. | 37,741 | 3,023,054 | |
Electrical Equipment - 0.5% | |||
Emerson Electric Co. | 57,654 | 4,423,791 | |
GrafTech International Ltd. | 68,253 | 1,261,315 | |
5,685,106 | |||
Industrial Conglomerates - 0.7% | |||
3M Co. | 16,149 | 3,406,147 | |
Honeywell International, Inc. | 33,552 | 5,336,781 | |
8,742,928 | |||
Machinery - 2.2% | |||
Allison Transmission Holdings, Inc. | 138,089 | 6,857,500 | |
Caterpillar, Inc. | 87,756 | 12,184,921 | |
Cummins, Inc. | 45,550 | 6,458,990 | |
25,501,411 | |||
Professional Services - 1.2% | |||
Insperity, Inc. | 49,865 | 5,976,320 | |
Korn/Ferry International | 4,922 | 330,414 | |
Robert Half International, Inc. | 88,493 | 6,918,383 | |
TransUnion Holding Co., Inc. | 15,352 | 1,156,006 | |
14,381,123 | |||
Road & Rail - 0.7% | |||
CSX Corp. | 31,380 | 2,327,141 | |
Landstar System, Inc. | 13,388 | 1,550,330 | |
Union Pacific Corp. | 33,434 | 5,035,829 | |
8,913,300 | |||
Trading Companies & Distributors - 0.6% | |||
W.W. Grainger, Inc. | 19,406 | 6,871,082 | |
TOTAL INDUSTRIALS | 120,842,256 | ||
INFORMATION TECHNOLOGY - 43.8% | |||
Communications Equipment - 1.6% | |||
Arista Networks, Inc. (a) | 17,949 | 5,366,392 | |
Cisco Systems, Inc. | 125,162 | 5,978,989 | |
F5 Networks, Inc. (a) | 37,610 | 7,112,803 | |
18,458,184 | |||
Electronic Equipment & Components - 0.2% | |||
Zebra Technologies Corp. Class A (a) | 11,706 | 2,010,388 | |
Internet Software & Services - 9.5% | |||
Alphabet, Inc.: | |||
Class A (a) | 25,268 | 31,125,122 | |
Class C (a) | 21,145 | 25,758,628 | |
CarGurus, Inc. Class A (b) | 116,385 | 5,740,108 | |
eBay, Inc. (a) | 84,624 | 2,928,837 | |
Etsy, Inc. (a) | 8,634 | 420,389 | |
Facebook, Inc. Class A (a) | 220,155 | 38,687,838 | |
GoDaddy, Inc. (a) | 90,058 | 7,336,125 | |
Yelp, Inc. (a) | 5,634 | 265,474 | |
112,262,521 | |||
IT Services - 7.8% | |||
Accenture PLC Class A | 17,812 | 3,011,475 | |
Alliance Data Systems Corp. | 26,741 | 6,379,868 | |
Broadridge Financial Solutions, Inc. | 19,039 | 2,572,930 | |
Cognizant Technology Solutions Corp. Class A | 35,529 | 2,786,539 | |
DXC Technology Co. | 6,638 | 604,655 | |
Fidelity National Information Services, Inc. | 48,815 | 5,280,319 | |
IBM Corp. | 83,331 | 12,206,325 | |
MasterCard, Inc. Class A | 105,769 | 22,799,566 | |
Maximus, Inc. | 54,320 | 3,612,280 | |
Paychex, Inc. | 24,050 | 1,761,663 | |
PayPal Holdings, Inc. (a) | 32,346 | 2,986,506 | |
Sabre Corp. | 59,509 | 1,553,780 | |
The Western Union Co. | 117,767 | 2,228,152 | |
Visa, Inc. Class A | 166,979 | 24,527,545 | |
92,311,603 | |||
Semiconductors & Semiconductor Equipment - 5.9% | |||
Applied Materials, Inc. | 210,865 | 9,071,412 | |
Broadcom, Inc. | 47,623 | 10,430,866 | |
Intel Corp. | 118,130 | 5,721,036 | |
KLA-Tencor Corp. | 32,779 | 3,809,248 | |
Lam Research Corp. | 25,166 | 4,355,983 | |
Maxim Integrated Products, Inc. | 68,572 | 4,146,549 | |
Micron Technology, Inc. (a) | 184,799 | 9,705,643 | |
NVIDIA Corp. | 46,994 | 13,190,276 | |
ON Semiconductor Corp. (a) | 96,228 | 2,053,506 | |
Texas Instruments, Inc. | 60,722 | 6,825,153 | |
69,309,672 | |||
Software - 9.7% | |||
Adobe Systems, Inc. (a) | 64,813 | 17,078,874 | |
Aspen Technology, Inc. (a) | 3,808 | 439,291 | |
Black Knight, Inc. (a) | 38,974 | 2,081,212 | |
Citrix Systems, Inc. (a) | 43,865 | 5,001,487 | |
Electronic Arts, Inc. (a) | 3,162 | 358,602 | |
Fortinet, Inc. (a) | 16 | 1,340 | |
Intuit, Inc. | 48,415 | 10,625,640 | |
Microsoft Corp. | 600,449 | 67,448,436 | |
Red Hat, Inc. (a) | 55,661 | 8,222,800 | |
Salesforce.com, Inc. (a) | 18,071 | 2,759,080 | |
Synopsys, Inc. (a) | 4,977 | 508,351 | |
114,525,113 | |||
Technology Hardware, Storage & Peripherals - 9.1% | |||
Apple, Inc. | 389,427 | 88,645,269 | |
HP, Inc. | 238,649 | 5,882,698 | |
NetApp, Inc. | 88,818 | 7,710,291 | |
Seagate Technology LLC | 111,562 | 5,973,029 | |
108,211,287 | |||
TOTAL INFORMATION TECHNOLOGY | 517,088,768 | ||
MATERIALS - 1.7% | |||
Chemicals - 1.2% | |||
Celanese Corp. Class A | 35,003 | 4,089,400 | |
Huntsman Corp. | 184,257 | 5,617,996 | |
Westlake Chemical Corp. | 52,095 | 4,926,624 | |
14,634,020 | |||
Paper & Forest Products - 0.5% | |||
Louisiana-Pacific Corp. | 205,717 | 5,998,708 | |
TOTAL MATERIALS | 20,632,728 | ||
REAL ESTATE - 1.2% | |||
Equity Real Estate Investment Trusts (REITs) - 1.2% | |||
CubeSmart (b) | 39,917 | 1,219,464 | |
Gaming & Leisure Properties | 144,804 | 5,182,535 | |
Hudson Pacific Properties, Inc. | 31,394 | 1,062,373 | |
Life Storage, Inc. | 4,199 | 409,822 | |
The GEO Group, Inc. | 18,910 | 479,747 | |
Weyerhaeuser Co. | 166,498 | 5,779,146 | |
14,133,087 | |||
TELECOMMUNICATION SERVICES - 0.5% | |||
Diversified Telecommunication Services - 0.5% | |||
Verizon Communications, Inc. | 114,120 | 6,204,704 | |
TOTAL COMMON STOCKS | |||
(Cost $817,925,969) | 1,168,893,487 | ||
Principal Amount | Value | ||
U.S. Treasury Obligations - 0.1% | |||
U.S. Treasury Bills, yield at date of purchase 2.11% to 2.13% 1/3/19 (c) | |||
(Cost $992,767) | 1,000,000 | 992,866 | |
Shares | Value | ||
Money Market Funds - 1.4% | |||
Fidelity Cash Central Fund, 1.97% (d) | 10,708,233 | $10,710,375 | |
Fidelity Securities Lending Cash Central Fund 1.98% (d)(e) | 6,006,654 | 6,007,255 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $16,717,630) | 16,717,630 | ||
TOTAL INVESTMENT IN SECURITIES - 100.4% | |||
(Cost $835,636,366) | 1,186,603,983 | ||
NET OTHER ASSETS (LIABILITIES) - (0.4)% | (4,617,916) | ||
NET ASSETS - 100% | $1,181,986,067 |
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) | 88 | Sept. 2018 | $12,769,240 | $514,839 | $514,839 |
The notional amount of futures purchased as a percentage of Net Assets is 1.1%
(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 $496,433.
(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 | $166,135 |
Fidelity Securities Lending Cash Central Fund | 23,376 |
Total | $189,511 |
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 August 31, 2018, 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: | ||||
Consumer Discretionary | $226,645,904 | $226,645,904 | $-- | $-- |
Consumer Staples | 43,155,423 | 43,155,423 | -- | -- |
Energy | 6,178,226 | 6,178,226 | -- | -- |
Financials | 33,318,402 | 33,318,402 | -- | -- |
Health Care | 180,693,989 | 180,693,989 | -- | -- |
Industrials | 120,842,256 | 120,842,256 | -- | -- |
Information Technology | 517,088,768 | 517,088,768 | -- | -- |
Materials | 20,632,728 | 20,632,728 | -- | -- |
Real Estate | 14,133,087 | 14,133,087 | -- | -- |
Telecommunication Services | 6,204,704 | 6,204,704 | -- | -- |
U.S. Government and Government Agency Obligations | 992,866 | -- | 992,866 | -- |
Money Market Funds | 16,717,630 | 16,717,630 | -- | -- |
Total Investments in Securities: | $1,186,603,983 | $1,185,611,117 | $992,866 | $-- |
Derivative Instruments: | ||||
Assets | ||||
Futures Contracts | $514,839 | $514,839 | $-- | $-- |
Total Assets | $514,839 | $514,839 | $-- | $-- |
Total Derivative Instruments: | $514,839 | $514,839 | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of August 31, 2018. 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) | $514,839 | $0 |
Total Equity Risk | 514,839 | 0 |
Total Value of Derivatives | $514,839 | $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 net unrealized appreciation (depreciation).
See accompanying notes which are an integral part of the financial statements.
Fidelity® Large Cap Growth Enhanced Index Fund
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 | ||
Assets | ||
Investment in securities, at value (including securities loaned of $5,911,120) — See accompanying schedule: Unaffiliated issuers (cost $818,918,736) | $1,169,886,353 | |
Fidelity Central Funds (cost $16,717,630) | 16,717,630 | |
Total Investment in Securities (cost $835,636,366) | $1,186,603,983 | |
Segregated cash with brokers for derivative instruments | 1,663 | |
Receivable for fund shares sold | 918,099 | |
Dividends receivable | 1,452,793 | |
Distributions receivable from Fidelity Central Funds | 21,007 | |
Receivable for daily variation margin on futures contracts | 1,110 | |
Total assets | 1,188,998,655 | |
Liabilities | ||
Payable for fund shares redeemed | 629,266 | |
Accrued management fee | 375,037 | |
Collateral on securities loaned | 6,008,285 | |
Total liabilities | 7,012,588 | |
Net Assets | $1,181,986,067 | |
Net Assets consist of: | ||
Paid in capital | $773,402,065 | |
Undistributed net investment income | 7,947,045 | |
Accumulated undistributed net realized gain (loss) on investments | 49,154,501 | |
Net unrealized appreciation (depreciation) on investments | 351,482,456 | |
Net Assets, for 54,776,497 shares outstanding | $1,181,986,067 | |
Net Asset Value, offering price and redemption price per share ($1,181,986,067 ÷ 54,776,497 shares) | $21.58 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Year ended August 31, 2018 | ||
Investment Income | ||
Dividends | $16,257,893 | |
Interest | 13,350 | |
Income from Fidelity Central Funds (including $23,376 from security lending) | 189,511 | |
Total income | 16,460,754 | |
Expenses | ||
Management fee | $4,059,297 | |
Independent trustees' fees and expenses | 12,735 | |
Miscellaneous | 27,056 | |
Total expenses before reductions | 4,099,088 | |
Expense reductions | (491) | |
Total expenses after reductions | 4,098,597 | |
Net investment income (loss) | 12,362,157 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 65,828,383 | |
Fidelity Central Funds | 97 | |
Futures contracts | 1,345,171 | |
Total net realized gain (loss) | 67,173,651 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 166,195,218 | |
Fidelity Central Funds | (1,041) | |
Futures contracts | 360,294 | |
Total change in net unrealized appreciation (depreciation) | 166,554,471 | |
Net gain (loss) | 233,728,122 | |
Net increase (decrease) in net assets resulting from operations | $246,090,279 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Year ended August 31, 2018 | Six months ended August 31, 2017 | Year ended February 28, 2017 | |
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $12,362,157 | $6,482,495 | $9,269,617 |
Net realized gain (loss) | 67,173,651 | 16,535,611 | 11,025,224 |
Change in net unrealized appreciation (depreciation) | 166,554,471 | 38,291,752 | 102,035,283 |
Net increase (decrease) in net assets resulting from operations | 246,090,279 | 61,309,858 | 122,330,124 |
Distributions to shareholders from net investment income | (9,595,922) | (2,076,402) | (7,111,776) |
Distributions to shareholders from net realized gain | (24,876,385) | (8,201,785) | – |
Total distributions | (34,472,307) | (10,278,187) | (7,111,776) |
Share transactions | |||
Proceeds from sales of shares | 257,337,762 | 148,068,388 | 438,141,867 |
Reinvestment of distributions | 32,926,414 | 9,882,890 | 6,777,223 |
Cost of shares redeemed | (244,227,679) | (110,113,958) | (183,763,026) |
Net increase (decrease) in net assets resulting from share transactions | 46,036,497 | 47,837,320 | 261,156,064 |
Total increase (decrease) in net assets | 257,654,469 | 98,868,991 | 376,374,412 |
Net Assets | |||
Beginning of period | 924,331,598 | 825,462,607 | 449,088,195 |
End of period | $1,181,986,067 | $924,331,598 | $825,462,607 |
Other Information | |||
Undistributed net investment income end of period | $7,947,045 | $6,064,111 | $2,048,261 |
Shares | |||
Sold | 13,103,171 | 8,778,514 | 28,762,124 |
Issued in reinvestment of distributions | 1,756,075 | 600,784 | 429,482 |
Redeemed | (12,568,315) | (6,458,191) | (12,024,884) |
Net increase (decrease) | 2,290,931 | 2,921,107 | 17,166,722 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Large Cap Growth Enhanced Index Fund
Years ended August 31, | 2018 | 2017 A | 2017 B | 2016 C | 2015 B | 2014 B |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $17.61 | $16.65 | $13.86 | $15.42 | $14.22 | $11.77 |
Income from Investment Operations | ||||||
Net investment income (loss)D | .23 | .12 | .22 | .20 | .20 | .18 |
Net realized and unrealized gain (loss) | 4.40 | 1.04 | 2.73 | (1.09) | 2.15 | 3.15 |
Total from investment operations | 4.63 | 1.16 | 2.95 | (.89) | 2.35 | 3.33 |
Distributions from net investment income | (.18) | (.04) | (.16) | (.18) | (.15) | (.17) |
Distributions from net realized gain | (.48) | (.16) | – | (.49) | (1.00) | (.71) |
Total distributions | (.66) | (.20) | (.16) | (.67) | (1.15) | (.88) |
Net asset value, end of period | $21.58 | $17.61 | $16.65 | $13.86 | $15.42 | $14.22 |
Total ReturnE,F | 26.86% | 7.04% | 21.33% | (6.01)% | 17.46% | 29.08% |
Ratios to Average Net AssetsG,H | ||||||
Expenses before reductions | .39% | .40%I | .45% | .45% | .45% | .45% |
Expenses net of fee waivers, if any | .39% | .40%I | .45% | .45% | .45% | .45% |
Expenses net of all reductions | .39% | .40%I | .45% | .45% | .45% | .45% |
Net investment income (loss) | 1.18% | 1.44%I | 1.43% | 1.38% | 1.37% | 1.41% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,181,986 | $924,332 | $825,463 | $449,088 | $404,087 | $248,855 |
Portfolio turnover rateJ | 100% | 110%I | 86% | 89% | 69% | 83% |
A For the six month period ended August 31. The Fund changed its fiscal year end from February 28 to August 31, effective August 31, 2017.
B For the year ended February 28.
C For the year ended February 29.
D Calculated based on average shares outstanding during the period.
E Total returns for periods of less than one year are not annualized.
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 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.
I Annualized
J 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® Large Cap Value Enhanced Index 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 August 31, 2018 | Past 1 year | Past 5 years | Past 10 years |
Fidelity® Large Cap Value Enhanced Index Fund | 15.20% | 12.14% | 9.25% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Large Cap Value Enhanced Index Fund on August 31, 2008.
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 | ||
$24,222 | Fidelity® Large Cap Value Enhanced Index Fund | |
$23,522 | Russell 1000® Value Index |
Fidelity® Large Cap Value Enhanced Index Fund
Management's Discussion of Fund Performance
Market Recap: The S&P 500® index gained 19.66% for the year ending August 31, 2018, as the U.S. equity bellwether overcame resurgent volatility to achieve a record close in late August. The previous high on January 26 came just before stocks began a sharp retreat amid concern that rising inflation and the potential for the economy to overheat would prompt the U.S. Federal Reserve to pick up the pace of interest rate hikes. In February, the index posted its first negative monthly result since October 2016, and then lost further ground in March on fear of a global trade war. The market stabilized in April and turned upward through mid-June, when trade tension between the U.S. and China soured investor sentiment. Uncertainty lingered into July, but strong corporate earnings helped the S&P 500 rise 7.10% in the final two months of the period. For the full 12 months, growth handily topped value, while small-caps bested large-caps. By sector, information technology (+33%) led the way amid strong earnings growth from several major index constituents. Consumer discretionary was close behind, with its roughly 32% gain driven by retailers. Energy (+22%) moved higher alongside oil prices. Financials (+17%) and health care (+16%) fared well but trailed the broader market, along with industrials (+13%) and materials (+10%). At the back of the pack were defensive sectors that struggled amid rising interest rates and investors’ preference for risk: telecom services (+3%), consumer staples (+1%) and utilities (+1%).Comments from Maximilian Kaufmann, Senior Portfolio Manager of the Geode Capital Management, LLC, investment management team: For the fiscal year, the fund gained 15.20%, outpacing the 12.47% return of the Russell 1000® Value Index. Relative to the index, the fund benefited from strong security selection in the consumer discretionary sector, while stock picking in consumer staples, industrials and health care also contributed. In contrast, security selection in telecommunication services and materials was slightly negative. On an individual basis, the fund's top relative contributor was industrial conglomerate General Electric (-45%), a struggling benchmark component we significantly underweighted throughout the 12 months. During the period, GE encountered various business challenges. At the recommendation of our models, we reduced our modest GE stake during the period. Similarly, our relative underweighting in tobacco manufacturer Philip Morris International contributed to results in light of the stock's -30% return. Overweighting energy-refining company Valero Energy (+78%) also contributed. In contrast, the fund was hurt by a position in Western Digital, a maker of computer hard-disk drives and other data-storage products. The company's shares returned -27%, partly reflecting the prospect of weaker storage pricing. Automaker Ford also struggled this period, as the stock returned about -9% for the fund, reflecting the company's disappointing profit outlook and expectation for a longer-than-anticipated business turnaround.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® Large Cap Value Enhanced Index Fund
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
JPMorgan Chase & Co. | 3.3 |
Exxon Mobil Corp. | 2.9 |
Bank of America Corp. | 2.6 |
Johnson & Johnson | 2.6 |
Pfizer, Inc. | 2.3 |
Cisco Systems, Inc. | 2.2 |
Intel Corp. | 2.1 |
Chevron Corp. | 2.1 |
Berkshire Hathaway, Inc. Class B | 2.1 |
AT&T, Inc. | 2.1 |
24.3 |
Top Market Sectors as of August 31, 2018
% of fund's net assets | |
Financials | 21.5 |
Health Care | 16.4 |
Information Technology | 11.8 |
Consumer Discretionary | 10.1 |
Energy | 9.2 |
Consumer Staples | 7.7 |
Industrials | 7.0 |
Utilities | 4.5 |
Materials | 3.9 |
Real Estate | 3.4 |
Asset Allocation (% of fund's net assets)
As of August 31, 2018* | ||
Stocks and Equity Futures | 100.0% |
* Foreign investments - 3.8%
Fidelity® Large Cap Value Enhanced Index Fund
Schedule of Investments August 31, 2018
Showing Percentage of Net Assets
Common Stocks - 98.9% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 10.1% | |||
Auto Components - 0.1% | |||
BorgWarner, Inc. | 101,514 | $4,443,268 | |
Automobiles - 0.7% | |||
Ford Motor Co. | 2,943,475 | 27,904,143 | |
Diversified Consumer Services - 0.1% | |||
Bright Horizons Family Solutions, Inc. (a) | 9,154 | 1,093,262 | |
Grand Canyon Education, Inc. (a) | 19,070 | 2,272,000 | |
3,365,262 | |||
Hotels, Restaurants & Leisure - 0.5% | |||
Carnival Corp. | 20,463 | 1,258,270 | |
Extended Stay America, Inc. unit | 14,941 | 301,509 | |
McDonald's Corp. | 59,287 | 9,618,130 | |
U.S. Foods Holding Corp. (a) | 263,855 | 8,599,034 | |
19,776,943 | |||
Household Durables - 0.9% | |||
Garmin Ltd. | 259,206 | 17,662,297 | |
Toll Brothers, Inc. | 472,169 | 17,106,683 | |
34,768,980 | |||
Media - 3.3% | |||
Comcast Corp. Class A | 1,654,038 | 61,182,866 | |
Liberty Media Corp.: | |||
Liberty SiriusXM Series A (a) | 92,307 | 4,314,429 | |
Liberty SiriusXM Series C (a) | 113,192 | 5,324,552 | |
Tegna, Inc. | 144,982 | 1,687,590 | |
The Walt Disney Co. | 297,565 | 33,333,231 | |
Tribune Media Co. Class A | 282,488 | 10,420,982 | |
Viacom, Inc. Class B (non-vtg.) | 433,351 | 12,688,517 | |
128,952,167 | |||
Multiline Retail - 1.5% | |||
Kohl's Corp. | 262,607 | 20,774,840 | |
Macy's, Inc. | 517,270 | 18,906,219 | |
Target Corp. | 200,585 | 17,551,188 | |
57,232,247 | |||
Specialty Retail - 1.6% | |||
AutoNation, Inc. (a) | 69,149 | 3,135,907 | |
Best Buy Co., Inc. | 133,742 | 10,640,514 | |
Dick's Sporting Goods, Inc. | 474,391 | 17,761,199 | |
Foot Locker, Inc. | 46,654 | 2,300,042 | |
Gap, Inc. | 537,472 | 16,312,275 | |
Penske Automotive Group, Inc. | 5,087 | 267,729 | |
Ross Stores, Inc. | 144,896 | 13,878,139 | |
64,295,805 | |||
Textiles, Apparel & Luxury Goods - 1.4% | |||
Columbia Sportswear Co. | 21,225 | 1,925,108 | |
Deckers Outdoor Corp. (a) | 133,449 | 16,259,426 | |
Michael Kors Holdings Ltd. (a) | 258,126 | 18,745,110 | |
PVH Corp. | 40,206 | 5,755,891 | |
Ralph Lauren Corp. | 97,964 | 13,010,599 | |
55,696,134 | |||
TOTAL CONSUMER DISCRETIONARY | 396,434,949 | ||
CONSUMER STAPLES - 7.7% | |||
Beverages - 1.1% | |||
Molson Coors Brewing Co. Class B | 110,493 | 7,374,303 | |
PepsiCo, Inc. | 222,336 | 24,903,855 | |
The Coca-Cola Co. | 250,696 | 11,173,521 | |
43,451,679 | |||
Food & Staples Retailing - 2.5% | |||
Kroger Co. | 271,212 | 8,543,178 | |
Walgreens Boots Alliance, Inc. | 398,086 | 27,292,776 | |
Walmart, Inc. | 628,369 | 60,235,452 | |
96,071,406 | |||
Food Products - 1.6% | |||
Archer Daniels Midland Co. | 549,966 | 27,718,286 | |
ConAgra Foods, Inc. | 285,956 | 10,508,883 | |
Tyson Foods, Inc. Class A | 401,807 | 25,237,498 | |
63,464,667 | |||
Household Products - 2.1% | |||
Church & Dwight Co., Inc. | 19,386 | 1,096,860 | |
Colgate-Palmolive Co. | 29,434 | 1,954,712 | |
Procter & Gamble Co. | 947,455 | 78,591,392 | |
81,642,964 | |||
Tobacco - 0.4% | |||
Philip Morris International, Inc. | 195,618 | 15,236,686 | |
TOTAL CONSUMER STAPLES | 299,867,402 | ||
ENERGY - 9.2% | |||
Energy Equipment & Services - 0.2% | |||
Schlumberger Ltd. | 97,197 | 6,138,963 | |
Oil, Gas & Consumable Fuels - 9.0% | |||
Anadarko Petroleum Corp. | 125,563 | 8,086,257 | |
Andeavor | 11,554 | 1,765,336 | |
Antero Resources Corp. (a)(b) | 493,139 | 9,128,003 | |
Chevron Corp. | 704,980 | 83,511,931 | |
ConocoPhillips Co. | 613,745 | 45,067,295 | |
Exxon Mobil Corp. | 1,423,732 | 114,140,594 | |
HollyFrontier Corp. | 170,915 | 12,736,586 | |
Kinder Morgan, Inc. | 32,670 | 578,259 | |
Marathon Oil Corp. | 445,064 | 9,573,327 | |
Marathon Petroleum Corp. | 364,347 | 29,982,115 | |
Murphy Oil Corp. | 219,891 | 6,779,240 | |
PBF Energy, Inc. Class A | 77,754 | 4,036,988 | |
Phillips 66 Co. | 25,853 | 3,063,839 | |
Valero Energy Corp. | 225,425 | 26,573,099 | |
355,022,869 | |||
TOTAL ENERGY | 361,161,832 | ||
FINANCIALS - 21.5% | |||
Banks - 11.5% | |||
Associated Banc-Corp. | 36,935 | 1,006,479 | |
Bank of America Corp. | 3,302,429 | 102,144,129 | |
Citigroup, Inc. | 1,000,184 | 71,253,108 | |
Fifth Third Bancorp | 25,188 | 741,283 | |
JPMorgan Chase & Co. | 1,128,934 | 129,353,250 | |
M&T Bank Corp. | 132,065 | 23,395,315 | |
Peoples United Financial, Inc. | 557,613 | 10,321,417 | |
PNC Financial Services Group, Inc. | 79,249 | 11,375,401 | |
Regions Financial Corp. | 985,515 | 19,178,122 | |
TCF Financial Corp. | 21,492 | 544,822 | |
U.S. Bancorp | 109,661 | 5,933,757 | |
Wells Fargo & Co. | 1,325,485 | 77,514,363 | |
452,761,446 | |||
Capital Markets - 1.3% | |||
CME Group, Inc. | 25,116 | 4,388,519 | |
Goldman Sachs Group, Inc. | 31,844 | 7,572,822 | |
LPL Financial | 43,881 | 2,906,677 | |
Morgan Stanley | 754,893 | 36,861,425 | |
Northern Trust Corp. | 2,667 | 286,596 | |
State Street Corp. | 967 | 84,042 | |
52,100,081 | |||
Consumer Finance - 2.4% | |||
Ally Financial, Inc. | 137,859 | 3,705,650 | |
American Express Co. | 260,007 | 27,555,542 | |
Capital One Financial Corp. | 288,351 | 28,572,701 | |
Discover Financial Services | 116,565 | 9,106,058 | |
OneMain Holdings, Inc. (a) | 12,776 | 468,879 | |
Synchrony Financial | 757,748 | 23,997,879 | |
93,406,709 | |||
Diversified Financial Services - 2.2% | |||
Berkshire Hathaway, Inc. Class B (a) | 385,486 | 80,458,638 | |
Donnelley Financial Solutions, Inc. (a) | 15,020 | 313,768 | |
Jefferies Financial Group, Inc. | 151,175 | 3,510,284 | |
84,282,690 | |||
Insurance - 2.9% | |||
AFLAC, Inc. | 452,671 | 20,931,507 | |
Allstate Corp. | 199,328 | 20,046,417 | |
American National Insurance Co. | 4,905 | 629,508 | |
First American Financial Corp. | 378,783 | 21,537,601 | |
FNF Group | 300,476 | 12,049,088 | |
Loews Corp. | 466,406 | 23,464,886 | |
Old Republic International Corp. | 484,023 | 10,735,630 | |
Progressive Corp. | 22,964 | 1,550,759 | |
Unum Group | 73,761 | 2,720,306 | |
113,665,702 | |||
Mortgage Real Estate Investment Trusts - 1.2% | |||
Annaly Capital Management, Inc. | 2,159,935 | 22,938,510 | |
Chimera Investment Corp. | 410,723 | 7,651,769 | |
MFA Financial, Inc. | 1,504,203 | 11,522,195 | |
New Residential Investment Corp. | 263,349 | 4,890,391 | |
Two Harbors Investment Corp. | 85,093 | 1,329,153 | |
48,332,018 | |||
TOTAL FINANCIALS | 844,548,646 | ||
HEALTH CARE - 16.4% | |||
Biotechnology - 1.4% | |||
Amgen, Inc. | 113,919 | 22,762,155 | |
Biogen, Inc. (a) | 7,881 | 2,785,855 | |
Gilead Sciences, Inc. | 358,738 | 27,167,229 | |
United Therapeutics Corp. (a) | 16,323 | 2,007,566 | |
54,722,805 | |||
Health Care Equipment & Supplies - 1.7% | |||
Abbott Laboratories | 345,213 | 23,074,037 | |
Baxter International, Inc. | 348,712 | 25,933,711 | |
Medtronic PLC | 166,629 | 16,064,702 | |
65,072,450 | |||
Health Care Providers & Services - 4.7% | |||
Aetna, Inc. | 36,511 | 7,312,058 | |
Anthem, Inc. | 146,456 | 38,771,297 | |
Centene Corp. (a) | 146,490 | 21,457,855 | |
Cigna Corp. | 145,887 | 27,476,358 | |
CVS Health Corp. | 568,851 | 42,800,349 | |
Express Scripts Holding Co. (a) | 94,838 | 8,347,641 | |
Humana, Inc. | 65,230 | 21,738,550 | |
Laboratory Corp. of America Holdings (a) | 2,398 | 414,542 | |
Quest Diagnostics, Inc. | 122,723 | 13,497,076 | |
UnitedHealth Group, Inc. | 761 | 204,298 | |
Universal Health Services, Inc. Class B | 1,849 | 240,666 | |
Wellcare Health Plans, Inc. (a) | 9,723 | 2,941,888 | |
185,202,578 | |||
Life Sciences Tools & Services - 0.1% | |||
Bio-Rad Laboratories, Inc. Class A (a) | 2,361 | 768,033 | |
Thermo Fisher Scientific, Inc. | 17,050 | 4,076,655 | |
4,844,688 | |||
Pharmaceuticals - 8.5% | |||
Allergan PLC | 60,801 | 11,656,160 | |
Bristol-Myers Squibb Co. | 564,143 | 34,158,859 | |
Eli Lilly & Co. | 241,806 | 25,546,804 | |
Johnson & Johnson | 756,295 | 101,865,374 | |
Merck & Co., Inc. | 1,016,416 | 69,715,973 | |
Pfizer, Inc. | 2,143,662 | 89,004,846 | |
331,948,016 | |||
TOTAL HEALTH CARE | 641,790,537 | ||
INDUSTRIALS - 7.0% | |||
Aerospace & Defense - 0.7% | |||
Rockwell Collins, Inc. | 12,557 | 1,707,124 | |
Teledyne Technologies, Inc. (a) | 10,946 | 2,597,048 | |
United Technologies Corp. | 163,523 | 21,535,979 | |
25,840,151 | |||
Commercial Services & Supplies - 1.4% | |||
KAR Auction Services, Inc. | 284,598 | 17,841,449 | |
LSC Communications, Inc. | 61,739 | 755,068 | |
Republic Services, Inc. | 269,113 | 19,742,130 | |
Waste Management, Inc. | 203,427 | 18,491,514 | |
56,830,161 | |||
Construction & Engineering - 0.0% | |||
EMCOR Group, Inc. | 18,293 | 1,465,269 | |
Electrical Equipment - 1.2% | |||
AMETEK, Inc. | 68,354 | 5,260,524 | |
Eaton Corp. PLC | 361,919 | 30,089,946 | |
Emerson Electric Co. | 150,724 | 11,565,053 | |
46,915,523 | |||
Industrial Conglomerates - 0.8% | |||
General Electric Co. | 904,897 | 11,709,367 | |
Honeywell International, Inc. | 131,438 | 20,906,528 | |
32,615,895 | |||
Machinery - 2.2% | |||
AGCO Corp. | 348,025 | 20,763,172 | |
Caterpillar, Inc. | 156,331 | 21,706,559 | |
Cummins, Inc. | 164,097 | 23,268,955 | |
Oshkosh Corp. | 75,365 | 5,295,145 | |
Pentair PLC | 269,158 | 11,702,990 | |
Snap-On, Inc. | 26,382 | 4,663,810 | |
87,400,631 | |||
Professional Services - 0.4% | |||
Manpower, Inc. | 84,643 | 7,933,588 | |
Robert Half International, Inc. | 97,677 | 7,636,388 | |
15,569,976 | |||
Road & Rail - 0.2% | |||
Union Pacific Corp. | 49,074 | 7,391,526 | |
Trading Companies & Distributors - 0.1% | |||
Air Lease Corp. Class A | 42,216 | 1,950,801 | |
TOTAL INDUSTRIALS | 275,979,933 | ||
INFORMATION TECHNOLOGY - 11.8% | |||
Communications Equipment - 3.1% | |||
Arris International PLC (a) | 472,730 | 12,248,434 | |
Cisco Systems, Inc. | 1,770,686 | 84,585,670 | |
Juniper Networks, Inc. | 819,773 | 23,306,146 | |
120,140,250 | |||
Electronic Equipment & Components - 0.0% | |||
Avnet, Inc. | 17,817 | 862,343 | |
Dell Technologies, Inc. (a) | 2,310 | 222,153 | |
Vishay Intertechnology, Inc. | 16,636 | 395,937 | |
1,480,433 | |||
Internet Software & Services - 0.6% | |||
eBay, Inc. (a) | 615,823 | 21,313,634 | |
IT Services - 2.2% | |||
Amdocs Ltd. | 64,257 | 4,194,697 | |
Booz Allen Hamilton Holding Corp. Class A | 68,414 | 3,500,060 | |
Conduent, Inc. (a) | 373,080 | 8,647,994 | |
CoreLogic, Inc. (a) | 56,652 | 2,880,188 | |
DXC Technology Co. | 251,729 | 22,929,995 | |
IBM Corp. | 210,508 | 30,835,212 | |
Sabre Corp. | 91,365 | 2,385,540 | |
The Western Union Co. | 646,041 | 12,223,096 | |
87,596,782 | |||
Semiconductors & Semiconductor Equipment - 2.8% | |||
Intel Corp. | 1,736,437 | 84,095,644 | |
Micron Technology, Inc. (a) | 269,964 | 14,178,509 | |
NXP Semiconductors NV (a) | 26,411 | 2,459,921 | |
Qualcomm, Inc. | 130,170 | 8,943,981 | |
109,678,055 | |||
Software - 1.4% | |||
Intuit, Inc. | 4,050 | 888,854 | |
Oracle Corp. | 334,498 | 16,249,913 | |
Symantec Corp. | 1,197,250 | 24,136,560 | |
Synopsys, Inc. (a) | 67,104 | 6,854,003 | |
Zynga, Inc. (a) | 1,348,185 | 5,608,450 | |
53,737,780 | |||
Technology Hardware, Storage & Peripherals - 1.7% | |||
Hewlett Packard Enterprise Co. | 201,846 | 3,336,514 | |
HP, Inc. | 888,802 | 21,908,969 | |
Seagate Technology LLC | 155,767 | 8,339,765 | |
Western Digital Corp. | 391,710 | 24,771,740 | |
Xerox Corp. | 335,169 | 9,337,808 | |
67,694,796 | |||
TOTAL INFORMATION TECHNOLOGY | 461,641,730 | ||
MATERIALS - 3.9% | |||
Chemicals - 1.7% | |||
Celanese Corp. Class A | 8,390 | 980,204 | |
DowDuPont, Inc. | 355,608 | 24,938,789 | |
Eastman Chemical Co. | 204,907 | 19,882,126 | |
Huntsman Corp. | 671,278 | 20,467,266 | |
NewMarket Corp. | 571 | 228,994 | |
The Mosaic Co. | 17,179 | 537,187 | |
67,034,566 | |||
Construction Materials - 0.1% | |||
nVent Electric PLC | 155,438 | 4,366,253 | |
Metals & Mining - 1.5% | |||
Freeport-McMoRan, Inc. | 1,096,627 | 15,407,609 | |
Newmont Mining Corp. | 649,312 | 20,148,151 | |
Nucor Corp. | 174,892 | 10,930,750 | |
Reliance Steel & Aluminum Co. | 146,199 | 12,849,430 | |
59,335,940 | |||
Paper & Forest Products - 0.6% | |||
Domtar Corp. | 375,125 | 19,093,863 | |
Louisiana-Pacific Corp. | 158,440 | 4,620,110 | |
23,713,973 | |||
TOTAL MATERIALS | 154,450,732 | ||
REAL ESTATE - 3.4% | |||
Equity Real Estate Investment Trusts (REITs) - 3.2% | |||
Apple Hospitality (REIT), Inc. | 526,112 | 9,285,877 | |
Brixmor Property Group, Inc. | 577,127 | 10,515,254 | |
Corrections Corp. of America | 187,529 | 4,855,126 | |
Equity Commonwealth (a) | 81,175 | 2,602,471 | |
Gaming & Leisure Properties | 474,672 | 16,988,511 | |
Life Storage, Inc. | 34,065 | 3,324,744 | |
Park Hotels & Resorts, Inc. | 667,499 | 22,327,842 | |
Retail Properties America, Inc. | 237,692 | 3,025,819 | |
Senior Housing Properties Trust (SBI) | 162,052 | 3,096,814 | |
Spirit MTA REIT | 107,659 | 1,154,104 | |
Spirit Realty Capital, Inc. | 2,403,791 | 20,119,731 | |
The GEO Group, Inc. | 8,451 | 214,402 | |
Weyerhaeuser Co. | 772,215 | 26,803,583 | |
124,314,278 | |||
Real Estate Management & Development - 0.2% | |||
VICI Properties, Inc. | 495,905 | 10,369,374 | |
TOTAL REAL ESTATE | 134,683,652 | ||
TELECOMMUNICATION SERVICES - 3.4% | |||
Diversified Telecommunication Services - 3.4% | |||
AT&T, Inc. | 2,506,093 | 80,044,610 | |
Verizon Communications, Inc. | 962,144 | 52,311,769 | |
132,356,379 | |||
Wireless Telecommunication Services - 0.0% | |||
Telephone & Data Systems, Inc. | 11,878 | 356,815 | |
U.S. Cellular Corp. (a) | 2,146 | 91,763 | |
448,578 | |||
TOTAL TELECOMMUNICATION SERVICES | 132,804,957 | ||
UTILITIES - 4.5% | |||
Electric Utilities - 2.8% | |||
Duke Energy Corp. | 65,190 | 5,296,036 | |
Entergy Corp. | 116,132 | 9,707,474 | |
Eversource Energy | 5,719 | 357,037 | |
Exelon Corp. | 740,561 | 32,369,921 | |
NextEra Energy, Inc. | 63,021 | 10,719,872 | |
OGE Energy Corp. | 584,948 | 21,543,635 | |
PG&E Corp. | 145,788 | 6,732,490 | |
Portland General Electric Co. | 170,526 | 7,912,406 | |
PPL Corp. | 513,533 | 15,272,471 | |
109,911,342 | |||
Gas Utilities - 0.6% | |||
National Fuel Gas Co. | 47,056 | 2,613,020 | |
UGI Corp. | 418,286 | 22,608,358 | |
25,221,378 | |||
Multi-Utilities - 1.1% | |||
Ameren Corp. | 172,334 | 10,896,679 | |
CenterPoint Energy, Inc. | 411,804 | 11,444,033 | |
CMS Energy Corp. | 46,817 | 2,305,269 | |
DTE Energy Co. | 24,386 | 2,710,260 | |
MDU Resources Group, Inc. | 427,844 | 11,932,569 | |
Public Service Enterprise Group, Inc. | 49,123 | 2,571,589 | |
41,860,399 | |||
TOTAL UTILITIES | 176,993,119 | ||
TOTAL COMMON STOCKS | |||
(Cost $3,357,505,790) | 3,880,357,489 | ||
Principal Amount | Value | ||
U.S. Treasury Obligations - 0.0% | |||
U.S. Treasury Bills, yield at date of purchase 2.11% 1/3/19 (c) | |||
(Cost $1,737,423) | 1,750,000 | 1,737,516 | |
Shares | Value | ||
Money Market Funds - 1.1% | |||
Fidelity Cash Central Fund, 1.97% (d) | 33,132,432 | $33,139,059 | |
Fidelity Securities Lending Cash Central Fund 1.98% (d)(e) | 9,125,626 | 9,126,538 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $42,265,597) | 42,265,597 | ||
TOTAL INVESTMENT IN SECURITIES - 100.0% | |||
(Cost $3,401,508,810) | 3,924,360,602 | ||
NET OTHER ASSETS (LIABILITIES) - 0.0% | 917,145 | ||
NET ASSETS - 100% | $3,925,277,747 |
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) | 308 | Sept. 2018 | $44,692,340 | $1,874,472 | $1,874,472 |
The notional amount of futures purchased as a percentage of Net Assets is 1.1%
(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 $1,737,516.
(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 | $626,993 |
Fidelity Securities Lending Cash Central Fund | 83,830 |
Total | $710,823 |
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 August 31, 2018, 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: | ||||
Consumer Discretionary | $396,434,949 | $396,434,949 | $-- | $-- |
Consumer Staples | 299,867,402 | 299,867,402 | -- | -- |
Energy | 361,161,832 | 361,161,832 | -- | -- |
Financials | 844,548,646 | 844,548,646 | -- | -- |
Health Care | 641,790,537 | 641,790,537 | -- | -- |
Industrials | 275,979,933 | 275,979,933 | -- | -- |
Information Technology | 461,641,730 | 461,641,730 | -- | -- |
Materials | 154,450,732 | 154,450,732 | -- | -- |
Real Estate | 134,683,652 | 134,683,652 | -- | -- |
Telecommunication Services | 132,804,957 | 132,804,957 | -- | -- |
Utilities | 176,993,119 | 176,993,119 | -- | -- |
U.S. Government and Government Agency Obligations | 1,737,516 | -- | 1,737,516 | -- |
Money Market Funds | 42,265,597 | 42,265,597 | -- | -- |
Total Investments in Securities: | $3,924,360,602 | $3,922,623,086 | $1,737,516 | $-- |
Derivative Instruments: | ||||
Assets | ||||
Futures Contracts | $1,874,472 | $1,874,472 | $-- | $-- |
Total Assets | $1,874,472 | $1,874,472 | $-- | $-- |
Total Derivative Instruments: | $1,874,472 | $1,874,472 | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of August 31, 2018. 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) | $1,874,472 | $0 |
Total Equity Risk | 1,874,472 | 0 |
Total Value of Derivatives | $1,874,472 | $0 |
(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Consolidated Schedule of Investments. In the Consolidated 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 net unrealized appreciation (depreciation).
See accompanying notes which are an integral part of the financial statements.
Fidelity® Large Cap Value Enhanced Index Fund
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 | ||
Assets | ||
Investment in securities, at value (including securities loaned of $8,782,995) — See accompanying schedule: Unaffiliated issuers (cost $3,359,243,213) | $3,882,095,005 | |
Fidelity Central Funds (cost $42,265,597) | 42,265,597 | |
Total Investment in Securities (cost $3,401,508,810) | $3,924,360,602 | |
Segregated cash with brokers for derivative instruments | 2,921 | |
Receivable for investments sold | 18,597,615 | |
Receivable for fund shares sold | 3,873,347 | |
Dividends receivable | 9,949,516 | |
Distributions receivable from Fidelity Central Funds | 59,612 | |
Receivable for daily variation margin on futures contracts | 1,481 | |
Total assets | 3,956,845,094 | |
Liabilities | ||
Payable for investments purchased | $19,298,193 | |
Payable for fund shares redeemed | 1,872,253 | |
Accrued management fee | 1,262,343 | |
Payable for daily variation margin on futures contracts | 433 | |
Collateral on securities loaned | 9,134,125 | |
Total liabilities | 31,567,347 | |
Net Assets | $3,925,277,747 | |
Net Assets consist of: | ||
Paid in capital | $3,236,239,000 | |
Undistributed net investment income | 53,264,514 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 111,047,969 | |
Net unrealized appreciation (depreciation) on investments | 524,726,264 | |
Net Assets, for 284,302,225 shares outstanding | $3,925,277,747 | |
Net Asset Value, offering price and redemption price per share ($3,925,277,747 ÷ 284,302,225 shares) | $13.81 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Year ended August 31, 2018 | ||
Investment Income | ||
Dividends | $94,091,893 | |
Interest | 61,908 | |
Income from Fidelity Central Funds (including $83,830 from security lending) | 710,823 | |
Total income | 94,864,624 | |
Expenses | ||
Management fee | $13,817,937 | |
Independent trustees' fees and expenses | 42,741 | |
Interest | 5,648 | |
Miscellaneous | 69,565 | |
Total expenses before reductions | 13,935,891 | |
Expense reductions | (1,678) | |
Total expenses after reductions | 13,934,213 | |
Net investment income (loss) | 80,930,411 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 167,261,980 | |
Fidelity Central Funds | (5,306) | |
Foreign currency transactions | 105,583 | |
Futures contracts | 4,050,009 | |
Total net realized gain (loss) | 171,412,266 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 235,121,118 | |
Fidelity Central Funds | (3,210) | |
Assets and liabilities in foreign currencies | (348) | |
Futures contracts | 1,231,458 | |
Total change in net unrealized appreciation (depreciation) | 236,349,018 | |
Net gain (loss) | 407,761,284 | |
Net increase (decrease) in net assets resulting from operations | $488,691,695 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Year ended August 31, 2018 | Six months ended August 31, 2017 | Year ended February 28, 2017 | |
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $80,930,411 | $33,327,028 | $45,932,334 |
Net realized gain (loss) | 171,412,266 | 52,871,856 | 45,434,277 |
Change in net unrealized appreciation (depreciation) | 236,349,018 | (65,046,421) | 416,077,031 |
Net increase (decrease) in net assets resulting from operations | 488,691,695 | 21,152,463 | 507,443,642 |
Distributions to shareholders from net investment income | (54,064,321) | (9,524,832) | (38,789,221) |
Distributions to shareholders from net realized gain | (84,958,215) | (20,240,257) | – |
Total distributions | (139,022,536) | (29,765,089) | (38,789,221) |
Share transactions | |||
Proceeds from sales of shares | 3,117,051,859 | 585,123,239 | 1,358,650,321 |
Reinvestment of distributions | 135,660,919 | 28,992,659 | 37,834,856 |
Cost of shares redeemed | (2,739,945,144) | (431,889,605) | (544,200,825) |
Net increase (decrease) in net assets resulting from share transactions | 512,767,634 | 182,226,293 | 852,284,352 |
Total increase (decrease) in net assets | 862,436,793 | 173,613,667 | 1,320,938,773 |
Net Assets | |||
Beginning of period | 3,062,840,954 | 2,889,227,287 | 1,568,288,514 |
End of period | $3,925,277,747 | $3,062,840,954 | $2,889,227,287 |
Other Information | |||
Undistributed net investment income end of period | $53,264,514 | $31,818,640 | $9,477,261 |
Shares | |||
Sold | 238,097,759 | 47,098,344 | 117,663,726 |
Issued in reinvestment of distributions | 10,395,472 | 2,384,267 | 3,143,198 |
Redeemed | (209,314,245) | (34,998,563) | (47,915,162) |
Net increase (decrease) | 39,178,986 | 14,484,048 | 72,891,762 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Large Cap Value Enhanced Index Fund
Years ended August 31, | 2018 | 2017 A | 2017 B | 2016 C | 2015 B | 2014 B |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $12.50 | $12.53 | $9.94 | $11.38 | $10.21 | $8.89 |
Income from Investment Operations | ||||||
Net investment income (loss)D | .30 | .14 | .25 | .24 | .26E | .20 |
Net realized and unrealized gain (loss) | 1.57 | (.04) | 2.55 | (1.32) | 1.28 | 1.87 |
Total from investment operations | 1.87 | .10 | 2.80 | (1.08) | 1.54 | 2.07 |
Distributions from net investment income | (.22) | (.04) | (.21) | (.21) | (.12) | (.16) |
Distributions from net realized gain | (.34) | (.09) | – | (.15) | (.24) | (.59) |
Total distributions | (.56) | (.13) | (.21) | (.36) | (.37)F | (.75) |
Net asset value, end of period | $13.81 | $12.50 | $12.53 | $9.94 | $11.38 | $10.21 |
Total ReturnG,H | 15.20% | .79% | 28.30% | (9.69)% | 15.37% | 23.92% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .39% | .40%K | .45% | .45% | .45% | .45% |
Expenses net of fee waivers, if any | .39% | .40%K | .45% | .45% | .45% | .45% |
Expenses net of all reductions | .39% | .40%K | .45% | .45% | .45% | .45% |
Net investment income (loss) | 2.27% | 2.27%K | 2.23% | 2.20% | 2.34%E | 2.01% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $3,925,278 | $3,062,841 | $2,889,227 | $1,568,289 | $1,105,349 | $180,081 |
Portfolio turnover rateL | 99% | 93%K | 81% | 88% | 76%M | 85% |
A For the six month period ended August 31. The Fund changed its fiscal year from February 28 to August 31, effective August 31, 2017.
B For the year ended February 28.
C For the year ended February 29.
D Calculated based on average shares outstanding during the period.
E Net investment income per share reflects a large, non-recurring dividend which amounted to $.04 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 2.00%.
F Total distributions of $.37 per share is comprised of distributions from net investment income of $.124 and distributions from net realized gain of $.243 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I 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.
J 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.
K Annualized
L Amount does not include the portfolio activity of any underlying Fidelity Central Funds.
M Portfolio turnover rate excludes securities received or delivered in-kind.
See accompanying notes which are an integral part of the financial statements.
Fidelity® Large Cap Core Enhanced Index 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 August 31, 2018 | Past 1 year | Past 5 years | Past 10 years |
Fidelity® Large Cap Core Enhanced Index Fund | 22.32% | 14.20% | 10.58% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Large Cap Core Enhanced Index Fund on August 31, 2008.
The chart shows how the value of your investment would have changed, and also shows how the S&P 500® Index performed over the same period.
Period Ending Values | ||
$27,338 | Fidelity® Large Cap Core Enhanced Index Fund | |
$28,044 | S&P 500® Index |
Fidelity® Large Cap Core Enhanced Index Fund
Management's Discussion of Fund Performance
Market Recap: The S&P 500® index gained 19.66% for the year ending August 31, 2018, as the U.S. equity bellwether overcame resurgent volatility to achieve a record close in late August. The previous high on January 26 came just before stocks began a sharp retreat amid concern that rising inflation and the potential for the economy to overheat would prompt the U.S. Federal Reserve to pick up the pace of interest rate hikes. In February, the index posted its first negative monthly result since October 2016, and then lost further ground in March on fear of a global trade war. The market stabilized in April and turned upward through mid-June, when trade tension between the U.S. and China soured investor sentiment. Uncertainty lingered into July, but strong corporate earnings helped the S&P 500 rise 7.10% in the final two months of the period. For the full 12 months, growth handily topped value, while small-caps bested large-caps. By sector, information technology (+33%) led the way amid strong earnings growth from several major index constituents. Consumer discretionary was close behind, with its roughly 32% gain driven by retailers. Energy (+22%) moved higher alongside oil prices. Financials (+17%) and health care (+16%) fared well but trailed the broader market, along with industrials (+13%) and materials (+10%). At the back of the pack were defensive sectors that struggled amid rising interest rates and investors’ preference for risk: telecom services (+3%), consumer staples (+1%) and utilities (+1%).Comments from Maximilian Kaufmann, Senior Portfolio Manager of the Geode Capital Management, LLC, investment management team: For the fiscal year, the fund gained 22.32%, outpacing the 19.66% return of the S&P 500® index. Relative to the index, the fund benefited from strong security selection in the industrials sector, while stock picking in energy, health care and consumer staples also contributed. In contrast, security selection in materials and telecommunication services was slightly negative. On an individual basis, our top relative contributor was industrial conglomerate General Electric (-45%), a struggling benchmark component we significantly underweighted throughout the 12 months and ultimately sold before period end. Similarly, our relative underweighting in tobacco manufacturer Philip Morris International added to the fund's relative result in light of the stock's -30% return. At period end, we held only a very small stake in this name. Overweighting energy-refining company Valero Energy (+79%) also contributed. In contrast, the fund was hurt by our lack of a position in strong-performing benchmark component Netflix, a video-on-demand provider whose shares more than doubled on strong growth in earnings and new subscribers. Another notable relative detractor was Western Digital, a maker of computer hard-disk drives and other data-storage products. The company's shares returned -27%, partly reflecting the prospect of weaker storage pricing.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® Large Cap Core Enhanced Index Fund
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Apple, Inc. | 4.6 |
Microsoft Corp. | 3.9 |
Amazon.com, Inc. | 3.6 |
JPMorgan Chase & Co. | 2.0 |
Facebook, Inc. Class A | 2.0 |
Johnson & Johnson | 1.9 |
Exxon Mobil Corp. | 1.8 |
Bank of America Corp. | 1.7 |
Alphabet, Inc. Class C | 1.6 |
UnitedHealth Group, Inc. | 1.5 |
24.6 |
Top Market Sectors as of August 31, 2018
% of fund's net assets | |
Information Technology | 27.6 |
Health Care | 15.9 |
Consumer Discretionary | 13.8 |
Financials | 11.6 |
Industrials | 8.2 |
Consumer Staples | 5.9 |
Energy | 5.8 |
Materials | 2.9 |
Telecommunication Services | 2.8 |
Utilities | 1.4 |
Asset Allocation (% of fund's net assets)
As of August 31, 2018* | ||
Stocks and Equity Futures | 99.7% | |
Short-Term Investments and Net Other Assets (Liabilities) | 0.3% |
* Foreign investments - 1.4%
Fidelity® Large Cap Core Enhanced Index Fund
Schedule of Investments August 31, 2018
Showing Percentage of Net Assets
Common Stocks - 96.8% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 13.8% | |||
Auto Components - 0.2% | |||
Gentex Corp. | 63,903 | $1,494,052 | |
Automobiles - 0.5% | |||
Ford Motor Co. | 399,691 | 3,789,071 | |
Diversified Consumer Services - 0.2% | |||
Bright Horizons Family Solutions, Inc. (a) | 5,401 | 645,041 | |
Grand Canyon Education, Inc. (a) | 4,792 | 570,919 | |
1,215,960 | |||
Hotels, Restaurants & Leisure - 0.2% | |||
Hilton Worldwide Holdings, Inc. | 19,552 | 1,517,626 | |
McDonald's Corp. | 851 | 138,058 | |
1,655,684 | |||
Household Durables - 0.2% | |||
Taylor Morrison Home Corp. (a) | 85,529 | 1,664,394 | |
Internet & Direct Marketing Retail - 4.2% | |||
Amazon.com, Inc. (a) | 13,696 | 27,566,076 | |
Netflix, Inc. (a) | 12,552 | 4,615,119 | |
32,181,195 | |||
Media - 2.0% | |||
Comcast Corp. Class A | 91,231 | 3,374,635 | |
The Walt Disney Co. | 78,941 | 8,842,971 | |
Twenty-First Century Fox, Inc. Class A | 11,408 | 517,923 | |
Viacom, Inc. Class B (non-vtg.) | 71,156 | 2,083,448 | |
14,818,977 | |||
Multiline Retail - 0.9% | |||
Kohl's Corp. | 45,792 | 3,622,605 | |
Macy's, Inc. | 49,020 | 1,791,681 | |
Target Corp. | 14,231 | 1,245,213 | |
6,659,499 | |||
Specialty Retail - 3.6% | |||
Best Buy Co., Inc. | 23,197 | 1,845,553 | |
Dick's Sporting Goods, Inc. | 14,232 | 532,846 | |
Gap, Inc. | 76,748 | 2,329,302 | |
Home Depot, Inc. | 53,281 | 10,697,226 | |
O'Reilly Automotive, Inc. (a) | 2,982 | 1,000,222 | |
Ross Stores, Inc. | 42,595 | 4,079,749 | |
Tiffany & Co., Inc. | 18,040 | 2,212,606 | |
TJX Companies, Inc. | 40,617 | 4,466,651 | |
27,164,155 | |||
Textiles, Apparel & Luxury Goods - 1.8% | |||
Deckers Outdoor Corp. (a) | 32,220 | 3,925,685 | |
NIKE, Inc. Class B | 38,912 | 3,198,566 | |
Ralph Lauren Corp. | 27,003 | 3,586,268 | |
VF Corp. | 35,139 | 3,237,356 | |
13,947,875 | |||
TOTAL CONSUMER DISCRETIONARY | 104,590,862 | ||
CONSUMER STAPLES - 5.9% | |||
Beverages - 2.0% | |||
PepsiCo, Inc. | 76,046 | 8,517,912 | |
The Coca-Cola Co. | 154,414 | 6,882,232 | |
15,400,144 | |||
Food & Staples Retailing - 1.7% | |||
Costco Wholesale Corp. | 13,071 | 3,047,242 | |
Kroger Co. | 30,988 | 976,122 | |
Walgreens Boots Alliance, Inc. | 11,402 | 781,721 | |
Walmart, Inc. | 83,507 | 8,004,981 | |
12,810,066 | |||
Food Products - 0.0% | |||
Mondelez International, Inc. | 6,228 | 266,060 | |
Household Products - 2.1% | |||
Colgate-Palmolive Co. | 80,420 | 5,340,692 | |
Kimberly-Clark Corp. | 2,139 | 247,140 | |
Procter & Gamble Co. | 122,306 | 10,145,283 | |
15,733,115 | |||
Personal Products - 0.1% | |||
Estee Lauder Companies, Inc. Class A | 5,706 | 799,525 | |
Tobacco - 0.0% | |||
Philip Morris International, Inc. | 735 | 57,249 | |
TOTAL CONSUMER STAPLES | 45,066,159 | ||
ENERGY - 5.8% | |||
Oil, Gas & Consumable Fuels - 5.8% | |||
Chevron Corp. | 88,240 | 10,452,910 | |
ConocoPhillips Co. | 87,835 | 6,449,724 | |
Exxon Mobil Corp. | 173,416 | 13,902,761 | |
HollyFrontier Corp. | 56,231 | 4,190,334 | |
Marathon Petroleum Corp. | 47,881 | 3,940,127 | |
ONEOK, Inc. | 3,333 | 219,678 | |
Peabody Energy Corp. | 37,388 | 1,544,498 | |
Valero Energy Corp. | 24,232 | 2,856,468 | |
43,556,500 | |||
FINANCIALS - 11.6% | |||
Banks - 6.2% | |||
Associated Banc-Corp. | 18,210 | 496,223 | |
Bank of America Corp. | 405,901 | 12,554,518 | |
Citigroup, Inc. | 120,809 | 8,606,433 | |
Comerica, Inc. | 3,963 | 386,313 | |
JPMorgan Chase & Co. | 134,040 | 15,358,303 | |
M&T Bank Corp. | 3,583 | 634,728 | |
Peoples United Financial, Inc. | 39,613 | 733,237 | |
Webster Financial Corp. | 5,992 | 391,757 | |
Wells Fargo & Co. | 132,162 | 7,728,834 | |
46,890,346 | |||
Capital Markets - 0.8% | |||
Morgan Stanley | 89,002 | 4,345,968 | |
Morningstar, Inc. | 2,892 | 411,589 | |
S&P Global, Inc. | 4,570 | 946,219 | |
Thomson Reuters Corp. | 16,327 | 726,145 | |
6,429,921 | |||
Consumer Finance - 0.8% | |||
American Express Co. | 40,325 | 4,273,644 | |
Discover Financial Services | 20,353 | 1,589,976 | |
Synchrony Financial | 7,152 | 226,504 | |
6,090,124 | |||
Diversified Financial Services - 1.1% | |||
Berkshire Hathaway, Inc. Class B (a) | 38,813 | 8,101,049 | |
Insurance - 1.7% | |||
AFLAC, Inc. | 49,472 | 2,287,585 | |
American National Insurance Co. | 2,425 | 311,225 | |
First American Financial Corp. | 64,745 | 3,681,401 | |
Loews Corp. | 36,484 | 1,835,510 | |
Progressive Corp. | 77,586 | 5,239,383 | |
13,355,104 | |||
Mortgage Real Estate Investment Trusts - 1.0% | |||
Annaly Capital Management, Inc. | 346,675 | 3,681,689 | |
MFA Financial, Inc. | 365,295 | 2,798,160 | |
New Residential Investment Corp. | 48,479 | 900,255 | |
7,380,104 | |||
TOTAL FINANCIALS | 88,246,648 | ||
HEALTH CARE - 15.9% | |||
Biotechnology - 3.5% | |||
AbbVie, Inc. | 83,457 | 8,010,203 | |
Amgen, Inc. | 39,281 | 7,848,737 | |
Biogen, Inc. (a) | 10,400 | 3,676,296 | |
Celgene Corp. (a) | 1,814 | 171,332 | |
Gilead Sciences, Inc. | 88,364 | 6,691,806 | |
26,398,374 | |||
Health Care Equipment & Supplies - 1.1% | |||
Abbott Laboratories | 85,984 | 5,747,171 | |
Baxter International, Inc. | 32,251 | 2,398,507 | |
Medtronic PLC | 598 | 57,653 | |
8,203,331 | |||
Health Care Providers & Services - 4.9% | |||
Aetna, Inc. | 5,491 | 1,099,683 | |
Anthem, Inc. | 7,939 | 2,101,691 | |
Cardinal Health, Inc. | 23,362 | 1,219,263 | |
Centene Corp. (a) | 8,826 | 1,292,832 | |
Chemed Corp. | 1,793 | 580,107 | |
Cigna Corp. | 26,995 | 5,084,238 | |
CVS Health Corp. | 83,741 | 6,300,673 | |
Express Scripts Holding Co. (a) | 6,958 | 612,443 | |
Humana, Inc. | 16,214 | 5,403,478 | |
Quest Diagnostics, Inc. | 19,541 | 2,149,119 | |
UnitedHealth Group, Inc. | 42,972 | 11,536,263 | |
37,379,790 | |||
Pharmaceuticals - 6.4% | |||
Allergan PLC | 4,966 | 952,032 | |
Bristol-Myers Squibb Co. | 114,188 | 6,914,083 | |
Eli Lilly & Co. | 56,006 | 5,917,034 | |
Johnson & Johnson | 109,126 | 14,698,181 | |
Merck & Co., Inc. | 137,579 | 9,436,544 | |
Pfizer, Inc. | 263,900 | 10,957,128 | |
48,875,002 | |||
TOTAL HEALTH CARE | 120,856,497 | ||
INDUSTRIALS - 8.2% | |||
Aerospace & Defense - 1.9% | |||
Northrop Grumman Corp. | 1,835 | 547,729 | |
Raytheon Co. | 21,960 | 4,379,702 | |
The Boeing Co. | 26,887 | 9,216,595 | |
14,144,026 | |||
Commercial Services & Supplies - 1.3% | |||
KAR Auction Services, Inc. | 62,954 | 3,946,586 | |
Republic Services, Inc. | 44,126 | 3,237,083 | |
UniFirst Corp. | 776 | 143,715 | |
Waste Management, Inc. | 25,832 | 2,348,129 | |
9,675,513 | |||
Construction & Engineering - 0.2% | |||
EMCOR Group, Inc. | 14,984 | 1,200,218 | |
Electrical Equipment - 0.4% | |||
Emerson Electric Co. | 30,245 | 2,320,699 | |
GrafTech International Ltd. | 44,432 | 821,103 | |
3,141,802 | |||
Industrial Conglomerates - 0.3% | |||
3M Co. | 5,909 | 1,246,326 | |
Honeywell International, Inc. | 8,802 | 1,400,046 | |
2,646,372 | |||
Machinery - 2.6% | |||
AGCO Corp. | 51,238 | 3,056,859 | |
Allison Transmission Holdings, Inc. | 55,899 | 2,775,944 | |
Caterpillar, Inc. | 44,352 | 6,158,275 | |
Cummins, Inc. | 31,115 | 4,412,107 | |
Oshkosh Corp. | 18,197 | 1,278,521 | |
Pentair PLC | 49,318 | 2,144,347 | |
19,826,053 | |||
Professional Services - 0.5% | |||
Robert Half International, Inc. | 53,611 | 4,191,308 | |
Road & Rail - 0.7% | |||
Union Pacific Corp. | 34,867 | 5,251,668 | |
Trading Companies & Distributors - 0.3% | |||
MSC Industrial Direct Co., Inc. Class A | 5,509 | 470,909 | |
W.W. Grainger, Inc. | 4,503 | 1,594,377 | |
2,065,286 | |||
TOTAL INDUSTRIALS | 62,142,246 | ||
INFORMATION TECHNOLOGY - 27.6% | |||
Communications Equipment - 2.0% | |||
Cisco Systems, Inc. | 225,458 | 10,770,129 | |
F5 Networks, Inc. (a) | 574 | 108,555 | |
Juniper Networks, Inc. | 145,898 | 4,147,880 | |
15,026,564 | |||
Internet Software & Services - 5.9% | |||
Alphabet, Inc.: | |||
Class A (a) | 8,963 | 11,040,623 | |
Class C (a) | 10,225 | 12,455,993 | |
eBay, Inc. (a) | 132,926 | 4,600,569 | |
Facebook, Inc. Class A (a) | 85,727 | 15,064,806 | |
GoDaddy, Inc. (a) | 22,969 | 1,871,055 | |
45,033,046 | |||
IT Services - 4.2% | |||
Amdocs Ltd. | 35,856 | 2,340,680 | |
DXC Technology Co. | 49,398 | 4,499,664 | |
Fidelity National Information Services, Inc. | 5,606 | 606,401 | |
IBM Corp. | 50,221 | 7,356,372 | |
MasterCard, Inc. Class A | 24,781 | 5,341,792 | |
Maximus, Inc. | 13,038 | 867,027 | |
Paychex, Inc. | 49,878 | 3,653,564 | |
The Western Union Co. | 97,984 | 1,853,857 | |
Visa, Inc. Class A | 38,235 | 5,616,339 | |
32,135,696 | |||
Semiconductors & Semiconductor Equipment - 3.0% | |||
Intel Corp. | 217,058 | 10,512,119 | |
Micron Technology, Inc. (a) | 93,861 | 4,929,580 | |
NVIDIA Corp. | 16,760 | 4,704,197 | |
Texas Instruments, Inc. | 23,531 | 2,644,884 | |
22,790,780 | |||
Software - 5.6% | |||
Adobe Systems, Inc. (a) | 2,312 | 609,235 | |
Aspen Technology, Inc. (a) | 6,833 | 788,255 | |
Cadence Design Systems, Inc. (a) | 60,075 | 2,825,928 | |
Citrix Systems, Inc. (a) | 1,548 | 176,503 | |
Intuit, Inc. | 24,675 | 5,415,422 | |
Microsoft Corp. | 265,512 | 29,824,963 | |
Oracle Corp. | 13,628 | 662,048 | |
Red Hat, Inc. (a) | 10,332 | 1,526,346 | |
Synopsys, Inc. (a) | 2,476 | 252,899 | |
42,081,599 | |||
Technology Hardware, Storage & Peripherals - 6.9% | |||
Apple, Inc. | 154,319 | 35,127,637 | |
HP, Inc. | 170,086 | 4,192,620 | |
NetApp, Inc. | 53,353 | 4,631,574 | |
Seagate Technology LLC | 79,334 | 4,247,542 | |
Western Digital Corp. | 65,219 | 4,124,450 | |
52,323,823 | |||
TOTAL INFORMATION TECHNOLOGY | 209,391,508 | ||
MATERIALS - 2.9% | |||
Chemicals - 0.8% | |||
Celanese Corp. Class A | 15,342 | 1,792,406 | |
DowDuPont, Inc. | 15,495 | 1,086,664 | |
Huntsman Corp. | 116,269 | 3,545,042 | |
6,424,112 | |||
Metals & Mining - 1.4% | |||
Freeport-McMoRan, Inc. | 262,157 | 3,683,306 | |
Newmont Mining Corp. | 90,301 | 2,802,040 | |
Nucor Corp. | 62,839 | 3,927,438 | |
10,412,784 | |||
Paper & Forest Products - 0.7% | |||
Domtar Corp. | 32,992 | 1,679,293 | |
Louisiana-Pacific Corp. | 125,388 | 3,656,314 | |
5,335,607 | |||
TOTAL MATERIALS | 22,172,503 | ||
REAL ESTATE - 0.9% | |||
Equity Real Estate Investment Trusts (REITs) - 0.9% | |||
Equity Commonwealth (a) | 37,979 | 1,217,607 | |
Spirit Realty Capital, Inc. | 113,058 | 946,295 | |
The GEO Group, Inc. | 9,573 | 242,867 | |
Weyerhaeuser Co. | 128,425 | 4,457,632 | |
6,864,401 | |||
TELECOMMUNICATION SERVICES - 2.8% | |||
Diversified Telecommunication Services - 2.8% | |||
AT&T, Inc. | 330,579 | 10,558,693 | |
Verizon Communications, Inc. | 197,281 | 10,726,168 | |
21,284,861 | |||
UTILITIES - 1.4% | |||
Electric Utilities - 0.9% | |||
Exelon Corp. | 41,264 | 1,803,649 | |
OGE Energy Corp. | 88,485 | 3,258,903 | |
Portland General Electric Co. | 21,717 | 1,007,669 | |
PPL Corp. | 32,417 | 964,082 | |
7,034,303 | |||
Gas Utilities - 0.3% | |||
UGI Corp. | 44,808 | 2,421,872 | |
Multi-Utilities - 0.2% | |||
Dominion Resources, Inc. | 3,970 | 280,957 | |
MDU Resources Group, Inc. | 28,328 | 790,068 | |
1,071,025 | |||
TOTAL UTILITIES | 10,527,200 | ||
TOTAL COMMON STOCKS | |||
(Cost $559,861,635) | 734,699,385 | ||
Principal Amount | Value | ||
U.S. Treasury Obligations - 0.1% | |||
U.S. Treasury Bills, yield at date of purchase 2.1% to 2.13% 1/3/19 (b) | |||
(Cost $893,491) | 900,000 | 893,579 | |
Shares | Value | ||
Money Market Funds - 2.5% | |||
Fidelity Cash Central Fund, 1.97% (c) | |||
(Cost $18,736,304) | 18,732,367 | 18,736,113 | |
TOTAL INVESTMENT IN SECURITIES - 99.4% | |||
(Cost $579,491,430) | 754,329,077 | ||
NET OTHER ASSETS (LIABILITIES) - 0.6% | 4,407,058 | ||
NET ASSETS - 100% | $758,736,135 |
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) | 152 | Sept. 2018 | $22,055,960 | $554,500 | $554,500 |
The notional amount of futures purchased as a percentage of Net Assets is 2.9%
(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 $848,900.
(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 | $183,588 |
Fidelity Securities Lending Cash Central Fund | 5,096 |
Total | $188,684 |
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 August 31, 2018, 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: | ||||
Consumer Discretionary | $104,590,862 | $104,590,862 | $-- | $-- |
Consumer Staples | 45,066,159 | 45,066,159 | -- | -- |
Energy | 43,556,500 | 43,556,500 | -- | -- |
Financials | 88,246,648 | 88,246,648 | -- | -- |
Health Care | 120,856,497 | 120,856,497 | -- | -- |
Industrials | 62,142,246 | 62,142,246 | -- | -- |
Information Technology | 209,391,508 | 209,391,508 | -- | -- |
Materials | 22,172,503 | 22,172,503 | -- | -- |
Real Estate | 6,864,401 | 6,864,401 | -- | -- |
Telecommunication Services | 21,284,861 | 21,284,861 | -- | -- |
Utilities | 10,527,200 | 10,527,200 | -- | -- |
U.S. Government and Government Agency Obligations | 893,579 | -- | 893,579 | -- |
Money Market Funds | 18,736,113 | 18,736,113 | -- | -- |
Total Investments in Securities: | $754,329,077 | $753,435,498 | $893,579 | $-- |
Derivative Instruments: | ||||
Assets | ||||
Futures Contracts | $554,500 | $554,500 | $-- | $-- |
Total Assets | $554,500 | $554,500 | $-- | $-- |
Total Derivative Instruments: | $554,500 | $554,500 | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of August 31, 2018. 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) | $554,500 | $0 |
Total Equity Risk | 554,500 | 0 |
Total Value of Derivatives | $554,500 | $0 |
(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Consolidated Schedule of Investments. In the Consolidated 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 net unrealized appreciation (depreciation).
See accompanying notes which are an integral part of the financial statements.
Fidelity® Large Cap Core Enhanced Index Fund
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 | ||
Assets | ||
Investment in securities, at value — See accompanying schedule: Unaffiliated issuers (cost $560,755,126) | $735,592,964 | |
Fidelity Central Funds (cost $18,736,304) | 18,736,113 | |
Total Investment in Securities (cost $579,491,430) | $754,329,077 | |
Receivable for investments sold | 3,918,981 | |
Receivable for fund shares sold | 2,430,095 | |
Dividends receivable | 1,397,044 | |
Distributions receivable from Fidelity Central Funds | 22,130 | |
Receivable for daily variation margin on futures contracts | 717 | |
Other receivables | 76 | |
Total assets | 762,098,120 | |
Liabilities | ||
Payable for investments purchased | $2,690,301 | |
Payable for fund shares redeemed | 432,771 | |
Accrued management fee | 238,624 | |
Payable for daily variation margin on futures contracts | 289 | |
Total liabilities | 3,361,985 | |
Net Assets | $758,736,135 | |
Net Assets consist of: | ||
Paid in capital | $539,565,208 | |
Undistributed net investment income | 7,483,302 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 36,295,478 | |
Net unrealized appreciation (depreciation) on investments | 175,392,147 | |
Net Assets, for 46,780,724 shares outstanding | $758,736,135 | |
Net Asset Value, offering price and redemption price per share ($758,736,135 ÷ 46,780,724 shares) | $16.22 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Year ended August 31, 2018 | ||
Investment Income | ||
Dividends | $13,664,524 | |
Interest | 9,419 | |
Income from Fidelity Central Funds (including $5,096 from security lending) | 188,684 | |
Total income | 13,862,627 | |
Expenses | ||
Management fee | $2,475,656 | |
Independent trustees' fees and expenses | 7,552 | |
Miscellaneous | 13,589 | |
Total expenses before reductions | 2,496,797 | |
Expense reductions | (651) | |
Total expenses after reductions | 2,496,146 | |
Net investment income (loss) | 11,366,481 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 48,134,434 | |
Fidelity Central Funds | (220) | |
Foreign currency transactions | 638 | |
Futures contracts | 1,955,770 | |
Total net realized gain (loss) | 50,090,622 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 63,642,035 | |
Fidelity Central Funds | (467) | |
Futures contracts | 449,891 | |
Total change in net unrealized appreciation (depreciation) | 64,091,459 | |
Net gain (loss) | 114,182,081 | |
Net increase (decrease) in net assets resulting from operations | $125,548,562 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Year ended August 31, 2018 | Six months ended August 31, 2017 | Year ended February 28, 2017 | |
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $11,366,481 | $4,942,098 | $8,807,566 |
Net realized gain (loss) | 50,090,622 | 9,752,955 | 8,291,786 |
Change in net unrealized appreciation (depreciation) | 64,091,459 | 7,700,638 | 81,900,675 |
Net increase (decrease) in net assets resulting from operations | 125,548,562 | 22,395,691 | 99,000,027 |
Distributions to shareholders from net investment income | (7,652,635) | (1,405,265) | (7,861,211) |
Distributions to shareholders from net realized gain | (13,164,116) | – | – |
Total distributions | (20,816,751) | (1,405,265) | (7,861,211) |
Share transactions | |||
Proceeds from sales of shares | 234,510,657 | 56,911,888 | 166,579,819 |
Reinvestment of distributions | 19,696,589 | 1,332,680 | 7,444,746 |
Cost of shares redeemed | (134,439,243) | (69,984,446) | (151,876,457) |
Net increase (decrease) in net assets resulting from share transactions | 119,768,003 | (11,739,878) | 22,148,108 |
Total increase (decrease) in net assets | 224,499,814 | 9,250,548 | 113,286,924 |
Net Assets | |||
Beginning of period | 534,236,321 | 524,985,773 | 411,698,849 |
End of period | $758,736,135 | $534,236,321 | $524,985,773 |
Other Information | |||
Undistributed net investment income end of period | $7,483,302 | $4,538,723 | $1,335,391 |
Shares | |||
Sold | 15,527,264 | 4,273,941 | 13,918,048 |
Issued in reinvestment of distributions | 1,357,449 | 102,121 | 591,010 |
Redeemed | (8,984,401) | (5,222,228) | (12,563,272) |
Net increase (decrease) | 7,900,312 | (846,166) | 1,945,786 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Large Cap Core Enhanced Index Fund
Years ended August 31, | 2018 | 2017 A | 2017 B | 2016 C | 2015 B | 2014 B |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $13.74 | $13.21 | $10.90 | $12.29 | $11.30 | $10.70 |
Income from Investment Operations | ||||||
Net investment income (loss)D | .27 | .12 | .22 | .22 | .20 | .19 |
Net realized and unrealized gain (loss) | 2.74 | .45 | 2.29 | (1.17) | 1.55 | 2.45 |
Total from investment operations | 3.01 | .57 | 2.51 | (.95) | 1.75 | 2.64 |
Distributions from net investment income | (.19) | (.04) | (.20) | (.19) | (.16) | (.27) |
Distributions from net realized gain | (.33) | – | – | (.25) | (.60) | (1.77) |
Total distributions | (.53)E | (.04) | (.20) | (.44) | (.76) | (2.04) |
Net asset value, end of period | $16.22 | $13.74 | $13.21 | $10.90 | $12.29 | $11.30 |
Total ReturnF,G | 22.32% | 4.29% | 23.09% | (7.94)% | 16.04% | 26.44% |
Ratios to Average Net AssetsH,I | ||||||
Expenses before reductions | .39% | .40%J | .45% | .45% | .45% | .45% |
Expenses net of fee waivers, if any | .39% | .40%J | .45% | .45% | .45% | .45% |
Expenses net of all reductions | .39% | .40%J | .45% | .45% | .45% | .45% |
Net investment income (loss) | 1.78% | 1.85%J | 1.82% | 1.86% | 1.69% | 1.67% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $758,736 | $534,236 | $524,986 | $411,699 | $381,883 | $441,773 |
Portfolio turnover rateK | 92% | 88%J | 82% | 84% | 101% | 125% |
A For the six month period ended August 31. The Fund changed its fiscal year from February 28 to August 31, effective August 31, 2017.
B For the year ended February 28.
C For the year ended February 29.
D Calculated based on average shares outstanding during the period.
E Total distributions of $.53 per share is comprised of distributions from net investment income of $.193 and distributions from net realized gain of $.332 per share.
F Total returns for periods of less than one year are not annualized.
G Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
H 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.
I 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.
J Annualized
K 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® Mid Cap Enhanced Index 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 August 31, 2018 | Past 1 year | Past 5 years | Past 10 years |
Fidelity® Mid Cap Enhanced Index Fund | 16.67% | 12.53% | 10.88% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Mid Cap Enhanced Index Fund on August 31, 2008.
The chart shows how the value of your investment would have changed, and also shows how the Russell Midcap® Index performed over the same period.
Period Ending Values | ||
$28,094 | Fidelity® Mid Cap Enhanced Index Fund | |
$28,198 | Russell Midcap® Index |
Fidelity® Mid Cap Enhanced Index Fund
Management's Discussion of Fund Performance
Market Recap: The S&P 500® index gained 19.66% for the year ending August 31, 2018, as the U.S. equity bellwether overcame resurgent volatility to achieve a record close in late August. The previous high on January 26 came just before stocks began a sharp retreat amid concern that rising inflation and the potential for the economy to overheat would prompt the U.S. Federal Reserve to pick up the pace of interest rate hikes. In February, the index posted its first negative monthly result since October 2016, and then lost further ground in March on fear of a global trade war. The market stabilized in April and turned upward through mid-June, when trade tension between the U.S. and China soured investor sentiment. Uncertainty lingered into July, but strong corporate earnings helped the S&P 500 rise 7.10% in the final two months of the period. For the full 12 months, growth handily topped value, while small-caps bested large-caps. By sector, information technology (+33%) led the way amid strong earnings growth from several major index constituents. Consumer discretionary was close behind, with its roughly 32% gain driven by retailers. Energy (+22%) moved higher alongside oil prices. Financials (+17%) and health care (+16%) fared well but trailed the broader market, along with industrials (+13%) and materials (+10%). At the back of the pack were defensive sectors that struggled amid rising interest rates and investors’ preference for risk: telecom services (+3%), consumer staples (+1%) and utilities (+1%).Comments from Maximilian Kaufmann, Senior Portfolio Manager of the Geode Capital Management, LLC, investment management team: For the fiscal year, the fund gained 16.67%, trailing the 17.89% return of the Russell Midcap® Index. Relative to the index, the fund was hampered by security selection in the information technology and industrials sectors. In contrast, stock picking in consumer discretionary and energy was positive, although an underweighting in the latter sector, which outperformed, was a partly offsetting negative. In individual terms, the fund was hurt by an overweighting in COPA Holdings, a Panamanian airline operator whose stock returned about -34% this period. Much of the decline came in a single day in August, after the company reported weaker-than-anticipated quarterly earnings. Another detractor was Western Digital, a maker of computer hard-disk drives and other data-storage products. The company's shares returned -27%, partly reflecting the prospect of weaker storage pricing. Automaker Ford (-9%) also struggled. In contrast, the fund's top individual contributor was NetApp (+127%), a data-storage company boosted by healthy financial results. Department store retailer Kohl's also added value, benefiting from improving sales trends. An out-of-index stake in energy-refining company Valero Energy (+76%) further contributed, as the company benefited from higher profit margins. We sold the fund's Valero stake in this period to lock in profits.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® Mid Cap Enhanced Index Fund
Investment Summary (Unaudited)
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Fidelity National Information Services, Inc. | 1.0 |
Centene Corp. | 0.9 |
VF Corp. | 0.9 |
Edwards Lifesciences Corp. | 0.9 |
Discover Financial Services | 0.9 |
Kroger Co. | 0.9 |
DXC Technology Co. | 0.9 |
Ingersoll-Rand PLC | 0.9 |
Ross Stores, Inc. | 0.8 |
M&T Bank Corp. | 0.8 |
8.9 |
Top Market Sectors as of August 31, 2018
% of fund's net assets | |
Information Technology | 20.8 |
Consumer Discretionary | 16.3 |
Industrials | 12.0 |
Health Care | 11.8 |
Financials | 11.7 |
Real Estate | 6.8 |
Materials | 5.9 |
Energy | 4.7 |
Utilities | 4.6 |
Consumer Staples | 4.4 |
Asset Allocation (% of fund's net assets)
As of August 31, 2018 * | ||
Stocks and Equity Futures | 100.0% |
* Foreign investments - 5.2%
Fidelity® Mid Cap Enhanced Index Fund
Schedule of Investments August 31, 2018
Showing Percentage of Net Assets
Common Stocks - 99.1% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 16.3% | |||
Auto Components - 1.7% | |||
BorgWarner, Inc. | 177,133 | $7,753,111 | |
Gentex Corp. | 324,851 | 7,595,016 | |
Lear Corp. | 41,695 | 6,762,929 | |
22,111,056 | |||
Automobiles - 0.4% | |||
Ford Motor Co. | 480,761 | 4,557,614 | |
Diversified Consumer Services - 0.6% | |||
Grand Canyon Education, Inc. (a) | 13,891 | 1,654,974 | |
Weight Watchers International, Inc. (a)(b) | 79,388 | 5,946,161 | |
7,601,135 | |||
Hotels, Restaurants & Leisure - 0.7% | |||
Extended Stay America, Inc. unit | 15,574 | 314,283 | |
Royal Caribbean Cruises Ltd. | 15,219 | 1,865,545 | |
U.S. Foods Holding Corp. (a) | 210,738 | 6,867,951 | |
Yum China Holdings, Inc. | 14,550 | 562,794 | |
9,610,573 | |||
Household Durables - 2.5% | |||
D.R. Horton, Inc. | 173,238 | 7,710,823 | |
Garmin Ltd. | 119,366 | 8,133,599 | |
NVR, Inc. (a) | 2,066 | 5,513,018 | |
PulteGroup, Inc. | 159,869 | 4,468,339 | |
Toll Brothers, Inc. | 174,333 | 6,316,085 | |
32,141,864 | |||
Internet & Direct Marketing Retail - 0.3% | |||
Liberty Interactive Corp. QVC Group Series A (a) | 156,067 | 3,244,633 | |
Leisure Products - 1.0% | |||
Hasbro, Inc. | 60,308 | 5,989,187 | |
Polaris Industries, Inc. | 61,254 | 6,642,996 | |
12,632,183 | |||
Media - 1.6% | |||
DISH Network Corp. Class A (a) | 3,831 | 135,426 | |
Liberty Media Corp.: | |||
Liberty SiriusXM Series A (a) | 41,357 | 1,933,026 | |
Liberty SiriusXM Series C (a) | 60,028 | 2,823,717 | |
Omnicom Group, Inc. | 91,527 | 6,344,652 | |
Tribune Media Co. Class A | 30,177 | 1,113,230 | |
Viacom, Inc. Class B (non-vtg.) | 271,938 | 7,962,345 | |
20,312,396 | |||
Multiline Retail - 1.4% | |||
Kohl's Corp. | 98,194 | 7,768,127 | |
Macy's, Inc. | 192,006 | 7,017,819 | |
Nordstrom, Inc. | 44,230 | 2,779,856 | |
Target Corp. | 9,698 | 848,575 | |
18,414,377 | |||
Specialty Retail - 3.3% | |||
AutoZone, Inc. (a) | 5,619 | 4,309,099 | |
Best Buy Co., Inc. | 108,937 | 8,667,028 | |
Dick's Sporting Goods, Inc. | 160,398 | 6,005,301 | |
Foot Locker, Inc. | 107,128 | 5,281,410 | |
Gap, Inc. | 206,574 | 6,269,521 | |
Ross Stores, Inc. | 115,165 | 11,030,504 | |
Urban Outfitters, Inc. (a) | 31,902 | 1,482,805 | |
43,045,668 | |||
Textiles, Apparel & Luxury Goods - 2.8% | |||
Columbia Sportswear Co. | 4,277 | 387,924 | |
lululemon athletica, Inc. (a) | 55,356 | 8,576,305 | |
Michael Kors Holdings Ltd. (a) | 116,554 | 8,464,151 | |
Ralph Lauren Corp. | 55,893 | 7,423,149 | |
VF Corp. | 126,491 | 11,653,616 | |
36,505,145 | |||
TOTAL CONSUMER DISCRETIONARY | 210,176,644 | ||
CONSUMER STAPLES - 4.4% | |||
Beverages - 0.7% | |||
Keurig Dr. Pepper, Inc. | 13,862 | 316,054 | |
Molson Coors Brewing Co. Class B | 118,854 | 7,932,316 | |
8,248,370 | |||
Food & Staples Retailing - 0.9% | |||
Kroger Co. | 361,560 | 11,389,140 | |
Food Products - 2.5% | |||
Archer Daniels Midland Co. | 206,002 | 10,382,501 | |
Ingredion, Inc. | 49,702 | 5,023,381 | |
Pinnacle Foods, Inc. | 975 | 64,760 | |
The Hershey Co. | 73,907 | 7,429,132 | |
Tyson Foods, Inc. Class A | 154,327 | 9,693,279 | |
32,593,053 | |||
Household Products - 0.3% | |||
Colgate-Palmolive Co. | 41,645 | 2,765,644 | |
Energizer Holdings, Inc. | 24,531 | 1,559,926 | |
4,325,570 | |||
TOTAL CONSUMER STAPLES | 56,556,133 | ||
ENERGY - 4.7% | |||
Oil, Gas & Consumable Fuels - 4.7% | |||
Andeavor | 14,456 | 2,208,732 | |
Cabot Oil & Gas Corp. | 300,811 | 7,168,326 | |
Cheniere Energy, Inc. (a) | 61,996 | 4,149,392 | |
Devon Energy Corp. | 234,800 | 10,079,964 | |
HollyFrontier Corp. | 98,109 | 7,311,083 | |
Marathon Oil Corp. | 461,625 | 9,929,554 | |
Murphy Oil Corp. | 182,145 | 5,615,530 | |
ONEOK, Inc. | 20,496 | 1,350,891 | |
PBF Energy, Inc. Class A | 128,592 | 6,676,497 | |
Peabody Energy Corp. | 109,802 | 4,535,921 | |
The Williams Companies, Inc. | 56,049 | 1,658,490 | |
60,684,380 | |||
FINANCIALS - 11.7% | |||
Banks - 3.1% | |||
Comerica, Inc. | 73,100 | 7,125,788 | |
Fifth Third Bancorp | 135,548 | 3,989,178 | |
M&T Bank Corp. | 62,038 | 10,990,032 | |
Peoples United Financial, Inc. | 279,618 | 5,175,729 | |
Regions Financial Corp. | 538,319 | 10,475,688 | |
SunTrust Banks, Inc. | 11,733 | 863,079 | |
TCF Financial Corp. | 32,116 | 814,141 | |
39,433,635 | |||
Capital Markets - 1.6% | |||
BGC Partners, Inc. Class A | 509,736 | 6,330,921 | |
FactSet Research Systems, Inc. | 2,995 | 687,023 | |
LPL Financial | 45,029 | 2,982,721 | |
Morningstar, Inc. | 49,388 | 7,028,900 | |
MSCI, Inc. | 20,593 | 3,712,094 | |
SEI Investments Co. | 8,709 | 549,364 | |
21,291,023 | |||
Consumer Finance - 1.9% | |||
Discover Financial Services | 146,118 | 11,414,738 | |
OneMain Holdings, Inc. (a) | 56,537 | 2,074,908 | |
Synchrony Financial | 336,855 | 10,668,198 | |
24,157,844 | |||
Diversified Financial Services - 0.5% | |||
Jefferies Financial Group, Inc. | 290,766 | 6,751,587 | |
Insurance - 3.2% | |||
American International Group, Inc. warrants 1/19/21 (a) | 574 | 8,122 | |
First American Financial Corp. | 139,065 | 7,907,236 | |
FNF Group | 210,230 | 8,430,223 | |
Loews Corp. | 173,329 | 8,720,182 | |
Old Republic International Corp. | 277,922 | 6,164,310 | |
Progressive Corp. | 104,297 | 7,043,176 | |
Unum Group | 67,065 | 2,473,357 | |
XL Group Ltd. | 19,666 | 1,128,632 | |
41,875,238 | |||
Mortgage Real Estate Investment Trusts - 1.4% | |||
Annaly Capital Management, Inc. | 819,683 | 8,705,033 | |
Chimera Investment Corp. | 81,687 | 1,521,829 | |
MFA Financial, Inc. | 903,935 | 6,924,142 | |
New Residential Investment Corp. | 26,082 | 484,343 | |
17,635,347 | |||
TOTAL FINANCIALS | 151,144,674 | ||
HEALTH CARE - 11.8% | |||
Biotechnology - 1.4% | |||
Alnylam Pharmaceuticals, Inc. (a) | 7,466 | 915,854 | |
bluebird bio, Inc. (a) | 4,599 | 774,012 | |
Neurocrine Biosciences, Inc. (a) | 3,933 | 483,562 | |
Regeneron Pharmaceuticals, Inc. (a) | 17,168 | 6,983,084 | |
Sage Therapeutics, Inc. (a) | 3,004 | 493,437 | |
Sarepta Therapeutics, Inc. (a)(b) | 5,212 | 719,464 | |
Seattle Genetics, Inc. (a) | 300 | 23,028 | |
United Therapeutics Corp. (a) | 61,799 | 7,600,659 | |
Vertex Pharmaceuticals, Inc. (a) | 3,416 | 629,910 | |
18,623,010 | |||
Health Care Equipment & Supplies - 2.8% | |||
Baxter International, Inc. | 84,033 | 6,249,534 | |
Edwards Lifesciences Corp. (a) | 80,304 | 11,583,049 | |
Haemonetics Corp. (a) | 463 | 51,689 | |
Hill-Rom Holdings, Inc. | 21,860 | 2,126,322 | |
Hologic, Inc. (a) | 203,059 | 8,073,626 | |
IDEXX Laboratories, Inc. (a) | 444 | 112,794 | |
ResMed, Inc. | 2,279 | 253,903 | |
Varian Medical Systems, Inc. (a) | 50,077 | 5,609,626 | |
Zimmer Biomet Holdings, Inc. | 15,721 | 1,943,587 | |
36,004,130 | |||
Health Care Providers & Services - 4.8% | |||
Cardinal Health, Inc. | 173,125 | 9,035,394 | |
Centene Corp. (a) | 81,126 | 11,883,336 | |
Cigna Corp. | 33,941 | 6,392,448 | |
HCA Holdings, Inc. | 4,504 | 604,031 | |
Humana, Inc. | 20,977 | 6,990,795 | |
Laboratory Corp. of America Holdings (a) | 29,180 | 5,044,347 | |
Quest Diagnostics, Inc. | 82,851 | 9,111,953 | |
Universal Health Services, Inc. Class B | 22,597 | 2,941,226 | |
Wellcare Health Plans, Inc. (a) | 31,111 | 9,413,255 | |
61,416,785 | |||
Life Sciences Tools & Services - 1.8% | |||
Agilent Technologies, Inc. | 155,236 | 10,484,639 | |
Bio-Rad Laboratories, Inc. Class A (a) | 11,531 | 3,751,034 | |
Bruker Corp. | 201,166 | 7,157,486 | |
Illumina, Inc. (a) | 5,639 | 2,000,886 | |
Waters Corp. (a) | 380 | 72,002 | |
23,466,047 | |||
Pharmaceuticals - 1.0% | |||
Jazz Pharmaceuticals PLC (a) | 587 | 100,330 | |
Mylan NV (a) | 178,489 | 6,984,275 | |
Nektar Therapeutics (a) | 77,869 | 5,177,510 | |
12,262,115 | |||
TOTAL HEALTH CARE | 151,772,087 | ||
INDUSTRIALS - 12.0% | |||
Aerospace & Defense - 1.2% | |||
Curtiss-Wright Corp. | 9,653 | 1,293,019 | |
Harris Corp. | 26,690 | 4,337,392 | |
Huntington Ingalls Industries, Inc. | 17,217 | 4,209,040 | |
Northrop Grumman Corp. | 1,554 | 463,853 | |
Raytheon Co. | 10,824 | 2,158,739 | |
Rockwell Collins, Inc. | 17,964 | 2,442,206 | |
14,904,249 | |||
Air Freight & Logistics - 0.0% | |||
C.H. Robinson Worldwide, Inc. | 4,898 | 470,600 | |
Airlines - 0.1% | |||
Copa Holdings SA Class A | 20,178 | 1,613,029 | |
Building Products - 0.3% | |||
Armstrong World Industries, Inc. (a) | 22,238 | 1,552,212 | |
Owens Corning | 34,532 | 1,955,202 | |
3,507,414 | |||
Commercial Services & Supplies - 1.4% | |||
KAR Auction Services, Inc. | 132,056 | 8,278,591 | |
Republic Services, Inc. | 129,334 | 9,487,942 | |
17,766,533 | |||
Construction & Engineering - 0.1% | |||
EMCOR Group, Inc. | 15,946 | 1,277,275 | |
Electrical Equipment - 1.1% | |||
Acuity Brands, Inc. | 26,074 | 3,985,150 | |
GrafTech International Ltd. | 118,434 | 2,188,660 | |
Regal Beloit Corp. | 58,033 | 4,857,362 | |
Rockwell Automation, Inc. | 15,137 | 2,739,192 | |
13,770,364 | |||
Machinery - 5.6% | |||
AGCO Corp. | 118,060 | 7,043,460 | |
Allison Transmission Holdings, Inc. | 161,977 | 8,043,778 | |
Crane Co. | 3,875 | 353,710 | |
Cummins, Inc. | 73,568 | 10,431,942 | |
Graco, Inc. | 82,311 | 3,869,440 | |
Ingersoll-Rand PLC | 110,296 | 11,171,882 | |
Lincoln Electric Holdings, Inc. | 1,049 | 98,774 | |
Oshkosh Corp. | 93,606 | 6,576,758 | |
PACCAR, Inc. | 158,787 | 10,864,207 | |
Parker Hannifin Corp. | 14,783 | 2,595,895 | |
Pentair PLC | 172,692 | 7,508,648 | |
Stanley Black & Decker, Inc. | 7,269 | 1,021,513 | |
Terex Corp. | 67,566 | 2,618,183 | |
72,198,190 | |||
Professional Services - 1.4% | |||
Insperity, Inc. | 22,077 | 2,645,928 | |
Manpower, Inc. | 80,329 | 7,529,237 | |
Robert Half International, Inc. | 107,531 | 8,406,774 | |
18,581,939 | |||
Road & Rail - 0.0% | |||
J.B. Hunt Transport Services, Inc. | 2,357 | 284,608 | |
Trading Companies & Distributors - 0.8% | |||
Univar, Inc. (a) | 16,713 | 464,956 | |
W.W. Grainger, Inc. | 26,451 | 9,365,506 | |
9,830,462 | |||
TOTAL INDUSTRIALS | 154,204,663 | ||
INFORMATION TECHNOLOGY - 20.8% | |||
Communications Equipment - 2.5% | |||
Arista Networks, Inc. (a) | 17,540 | 5,244,109 | |
Arris International PLC (a) | 99,137 | 2,568,640 | |
F5 Networks, Inc. (a) | 47,257 | 8,937,244 | |
Juniper Networks, Inc. | 301,088 | 8,559,932 | |
Motorola Solutions, Inc. | 50,657 | 6,502,333 | |
31,812,258 | |||
Electronic Equipment & Components - 1.5% | |||
Dell Technologies, Inc. (a) | 99,399 | 9,559,202 | |
Dolby Laboratories, Inc. Class A | 6,848 | 480,661 | |
National Instruments Corp. | 16,427 | 784,389 | |
Zebra Technologies Corp. Class A (a) | 49,935 | 8,575,837 | |
19,400,089 | |||
Internet Software & Services - 1.4% | |||
eBay, Inc. (a) | 185,909 | 6,434,310 | |
GoDaddy, Inc. (a) | 100,984 | 8,226,157 | |
Twilio, Inc. Class A (a) | 41,137 | 3,318,110 | |
17,978,577 | |||
IT Services - 5.1% | |||
Amdocs Ltd. | 89,512 | 5,843,343 | |
Booz Allen Hamilton Holding Corp. Class A | 119,001 | 6,088,091 | |
Broadridge Financial Solutions, Inc. | 57,981 | 7,835,552 | |
Conduent, Inc. (a) | 139,795 | 3,240,448 | |
DXC Technology Co. | 124,648 | 11,354,186 | |
Fidelity National Information Services, Inc. | 118,273 | 12,793,592 | |
Paychex, Inc. | 70,908 | 5,194,011 | |
Sabre Corp. | 73,406 | 1,916,631 | |
Square, Inc. (a) | 24,356 | 2,158,916 | |
The Western Union Co. | 414,380 | 7,840,070 | |
Total System Services, Inc. | 17,886 | 1,737,446 | |
66,002,286 | |||
Semiconductors & Semiconductor Equipment - 3.1% | |||
Applied Materials, Inc. | 83,936 | 3,610,927 | |
KLA-Tencor Corp. | 83,528 | 9,706,789 | |
Lam Research Corp. | 56,353 | 9,754,141 | |
Marvell Technology Group Ltd. | 20,441 | 422,720 | |
Maxim Integrated Products, Inc. | 156,696 | 9,475,407 | |
ON Semiconductor Corp. (a) | 13,392 | 285,785 | |
Teradyne, Inc. | 110,530 | 4,552,731 | |
Xilinx, Inc. | 30,648 | 2,385,334 | |
40,193,834 | |||
Software - 5.1% | |||
Aspen Technology, Inc. (a) | 38,967 | 4,495,233 | |
Atlassian Corp. PLC (a) | 93,941 | 8,455,629 | |
CA Technologies, Inc. | 22,985 | 1,006,743 | |
Cadence Design Systems, Inc. (a) | 189,960 | 8,935,718 | |
Citrix Systems, Inc. (a) | 83,749 | 9,549,061 | |
Electronic Arts, Inc. (a) | 4,623 | 524,294 | |
Intuit, Inc. | 31,787 | 6,976,293 | |
Red Hat, Inc. (a) | 49,047 | 7,245,713 | |
SS&C Technologies Holdings, Inc. | 4,764 | 282,696 | |
Symantec Corp. | 426,678 | 8,601,828 | |
Synopsys, Inc. (a) | 86,815 | 8,867,284 | |
Zynga, Inc. (a) | 105,364 | 438,314 | |
65,378,806 | |||
Technology Hardware, Storage & Peripherals - 2.1% | |||
HP, Inc. | 282,728 | 6,969,245 | |
NetApp, Inc. | 125,122 | 10,861,841 | |
Western Digital Corp. | 150,542 | 9,520,276 | |
27,351,362 | |||
TOTAL INFORMATION TECHNOLOGY | 268,117,212 | ||
MATERIALS - 5.9% | |||
Chemicals - 2.2% | |||
Cabot Corp. | 52,061 | 3,379,800 | |
Celanese Corp. Class A | 3,967 | 463,465 | |
CF Industries Holdings, Inc. | 102,451 | 5,322,329 | |
Eastman Chemical Co. | 86,993 | 8,440,931 | |
Huntsman Corp. | 247,302 | 7,540,238 | |
Westlake Chemical Corp. | 35,041 | 3,313,827 | |
28,460,590 | |||
Construction Materials - 0.1% | |||
nVent Electric PLC | 38,702 | 1,087,139 | |
Containers & Packaging - 0.4% | |||
WestRock Co. | 91,792 | 5,055,903 | |
Metals & Mining - 2.7% | |||
Freeport-McMoRan, Inc. | 694,248 | 9,754,184 | |
Newmont Mining Corp. | 264,793 | 8,216,527 | |
Nucor Corp. | 154,097 | 9,631,063 | |
Reliance Steel & Aluminum Co. | 58,074 | 5,104,124 | |
Steel Dynamics, Inc. | 37,208 | 1,701,522 | |
United States Steel Corp. | 6,281 | 186,420 | |
34,593,840 | |||
Paper & Forest Products - 0.5% | |||
Domtar Corp. | 144,468 | 7,353,421 | |
TOTAL MATERIALS | 76,550,893 | ||
REAL ESTATE - 6.8% | |||
Equity Real Estate Investment Trusts (REITs) - 6.5% | |||
Apple Hospitality (REIT), Inc. | 395,347 | 6,977,875 | |
Brixmor Property Group, Inc. | 421,939 | 7,687,729 | |
Equity Commonwealth (a) | 212,082 | 6,799,349 | |
Gaming & Leisure Properties | 201,165 | 7,199,695 | |
Hospitality Properties Trust (SBI) | 93,178 | 2,701,230 | |
Host Hotels & Resorts, Inc. | 428,180 | 9,218,715 | |
Liberty Property Trust (SBI) | 71,232 | 3,116,400 | |
Park Hotels & Resorts, Inc. | 241,229 | 8,069,110 | |
Prologis, Inc. | 39,516 | 2,654,685 | |
Rayonier, Inc. | 13,604 | 473,827 | |
Retail Properties America, Inc. | 536,098 | 6,824,528 | |
SBA Communications Corp. Class A (a) | 11,483 | 1,782,506 | |
Senior Housing Properties Trust (SBI) | 301,352 | 5,758,837 | |
Spirit Realty Capital, Inc. | 452,402 | 3,786,605 | |
Weyerhaeuser Co. | 312,658 | 10,852,359 | |
83,903,450 | |||
Real Estate Management & Development - 0.3% | |||
Brookfield Property Partners LP | 16,749 | 334,645 | |
VICI Properties, Inc. | 180,359 | 3,771,307 | |
4,105,952 | |||
TOTAL REAL ESTATE | 88,009,402 | ||
TELECOMMUNICATION SERVICES - 0.1% | |||
Wireless Telecommunication Services - 0.1% | |||
Telephone & Data Systems, Inc. | 49,754 | 1,494,610 | |
UTILITIES - 4.6% | |||
Electric Utilities - 2.2% | |||
Entergy Corp. | 52,399 | 4,380,032 | |
FirstEnergy Corp. | 148,709 | 5,558,742 | |
OGE Energy Corp. | 204,153 | 7,518,955 | |
Portland General Electric Co. | 7,423 | 344,427 | |
PPL Corp. | 249,081 | 7,407,669 | |
Xcel Energy, Inc. | 78,245 | 3,759,672 | |
28,969,497 | |||
Gas Utilities - 0.7% | |||
National Fuel Gas Co. | 13,926 | 773,311 | |
UGI Corp. | 154,313 | 8,340,618 | |
9,113,929 | |||
Independent Power and Renewable Electricity Producers - 0.7% | |||
NRG Energy, Inc. | 250,708 | 8,872,556 | |
Multi-Utilities - 1.0% | |||
Ameren Corp. | 2,246 | 142,015 | |
CenterPoint Energy, Inc. | 245,088 | 6,810,996 | |
CMS Energy Corp. | 2,812 | 138,463 | |
MDU Resources Group, Inc. | 190,356 | 5,309,028 | |
12,400,502 | |||
TOTAL UTILITIES | 59,356,484 | ||
TOTAL COMMON STOCKS | |||
(Cost $1,101,734,786) | 1,278,067,182 | ||
Principal Amount | Value | ||
U.S. Treasury Obligations - 0.0% | |||
U.S. Treasury Bills, yield at date of purchase 2.1% 1/3/19 (c) | |||
(Cost $645,330) | 650,000 | 645,363 | |
Shares | Value | ||
Money Market Funds - 1.4% | |||
Fidelity Cash Central Fund, 1.97% (d) | 11,729,152 | $11,731,498 | |
Fidelity Securities Lending Cash Central Fund 1.98% (d)(e) | 5,838,100 | 5,838,683 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $17,570,181) | 17,570,181 | ||
TOTAL INVESTMENT IN SECURITIES - 100.5% | |||
(Cost $1,119,950,297) | 1,296,282,726 | ||
NET OTHER ASSETS (LIABILITIES) - (0.5)% | (6,864,819) | ||
NET ASSETS - 100% | $1,289,417,907 |
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) | 56 | Sept. 2018 | $11,455,360 | $285,257 | $285,257 |
The notional amount of futures purchased as a percentage of Net Assets is 0.9%
(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 $543,098.
(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 | $160,113 |
Fidelity Securities Lending Cash Central Fund | 84,425 |
Total | $244,538 |
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 August 31, 2018, 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: | ||||
Consumer Discretionary | $210,176,644 | $210,176,644 | $-- | $-- |
Consumer Staples | 56,556,133 | 56,556,133 | -- | -- |
Energy | 60,684,380 | 60,684,380 | -- | -- |
Financials | 151,144,674 | 151,144,674 | -- | -- |
Health Care | 151,772,087 | 151,772,087 | -- | -- |
Industrials | 154,204,663 | 154,204,663 | -- | -- |
Information Technology | 268,117,212 | 268,117,212 | -- | -- |
Materials | 76,550,893 | 76,550,893 | -- | -- |
Real Estate | 88,009,402 | 88,009,402 | -- | -- |
Telecommunication Services | 1,494,610 | 1,494,610 | -- | -- |
Utilities | 59,356,484 | 59,356,484 | -- | -- |
U.S. Government and Government Agency Obligations | 645,363 | -- | 645,363 | -- |
Money Market Funds | 17,570,181 | 17,570,181 | -- | -- |
Total Investments in Securities: | $1,296,282,726 | $1,295,637,363 | $645,363 | $-- |
Derivative Instruments: | ||||
Assets | ||||
Futures Contracts | $285,257 | $285,257 | $-- | $-- |
Total Assets | $285,257 | $285,257 | $-- | $-- |
Total Derivative Instruments: | $285,257 | $285,257 | $-- | $-- |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of August 31, 2018. 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) | $285,257 | $0 |
Total Equity Risk | 285,257 | 0 |
Total Value of Derivatives | $285,257 | $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 net unrealized appreciation (depreciation).
See accompanying notes which are an integral part of the financial statements.
Fidelity® Mid Cap Enhanced Index Fund
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 | ||
Assets | ||
Investment in securities, at value (including securities loaned of $5,677,364) — See accompanying schedule: Unaffiliated issuers (cost $1,102,380,116) | $1,278,712,545 | |
Fidelity Central Funds (cost $17,570,181) | 17,570,181 | |
Total Investment in Securities (cost $1,119,950,297) | $1,296,282,726 | |
Receivable for investments sold | 10,075,163 | |
Receivable for fund shares sold | 646,441 | |
Dividends receivable | 1,768,023 | |
Distributions receivable from Fidelity Central Funds | 17,280 | |
Receivable for daily variation margin on futures contracts | 29,760 | |
Total assets | 1,308,819,393 | |
Liabilities | ||
Payable for investments purchased | $11,904,000 | |
Payable for fund shares redeemed | 1,016,285 | |
Accrued management fee | 635,546 | |
Payable for daily variation margin on futures contracts | 4,830 | |
Collateral on securities loaned | 5,840,825 | |
Total liabilities | 19,401,486 | |
Net Assets | $1,289,417,907 | |
Net Assets consist of: | ||
Paid in capital | $1,024,895,070 | |
Undistributed net investment income | 11,923,900 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 75,981,251 | |
Net unrealized appreciation (depreciation) on investments | 176,617,686 | |
Net Assets, for 78,542,521 shares outstanding | $1,289,417,907 | |
Net Asset Value, offering price and redemption price per share ($1,289,417,907 ÷ 78,542,521 shares) | $16.42 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Year ended August 31, 2018 | ||
Investment Income | ||
Dividends | $28,083,571 | |
Interest | 13,292 | |
Income from Fidelity Central Funds (including $84,425 from security lending) | 244,538 | |
Total income | 28,341,401 | |
Expenses | ||
Management fee | $7,483,000 | |
Independent trustees' fees and expenses | 15,961 | |
Interest | 391 | |
Miscellaneous | 34,101 | |
Total expenses before reductions | 7,533,453 | |
Expense reductions | (1,167) | |
Total expenses after reductions | 7,532,286 | |
Net investment income (loss) | 20,809,115 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | 96,385,799 | |
Fidelity Central Funds | 5,000 | |
Foreign currency transactions | (246) | |
Futures contracts | 1,515,698 | |
Total net realized gain (loss) | 97,906,251 | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | 73,520,702 | |
Fidelity Central Funds | (7,044) | |
Assets and liabilities in foreign currencies | 156 | |
Futures contracts | 172,310 | |
Total change in net unrealized appreciation (depreciation) | 73,686,124 | |
Net gain (loss) | 171,592,375 | |
Net increase (decrease) in net assets resulting from operations | $192,401,490 |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Year ended August 31, 2018 | Six months ended August 31, 2017 | Year ended February 28, 2017 | |
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $20,809,115 | $9,568,754 | $14,927,630 |
Net realized gain (loss) | 97,906,251 | 49,899,267 | 23,850,804 |
Change in net unrealized appreciation (depreciation) | 73,686,124 | (39,529,211) | 174,682,897 |
Net increase (decrease) in net assets resulting from operations | 192,401,490 | 19,938,810 | 213,461,331 |
Distributions to shareholders from net investment income | (16,317,390) | (1,441,547) | (13,411,857) |
Distributions to shareholders from net realized gain | (56,685,523) | (5,846,277) | – |
Total distributions | (73,002,913) | (7,287,824) | (13,411,857) |
Share transactions | |||
Proceeds from sales of shares | 223,076,939 | 127,094,477 | 426,253,089 |
Reinvestment of distributions | 68,383,542 | 6,841,106 | 12,561,998 |
Cost of shares redeemed | (305,302,063) | (138,749,134) | (268,090,456) |
Net increase (decrease) in net assets resulting from share transactions | (13,841,582) | (4,813,551) | 170,724,631 |
Redemption fees | – | – | 7,663 |
Total increase (decrease) in net assets | 105,556,995 | 7,837,435 | 370,781,768 |
Net Assets | |||
Beginning of period | 1,183,860,912 | 1,176,023,477 | 805,241,709 |
End of period | $1,289,417,907 | $1,183,860,912 | $1,176,023,477 |
Other Information | |||
Undistributed net investment income end of period | $11,923,900 | $9,061,191 | $1,439,172 |
Shares | |||
Sold | 14,135,009 | 8,574,869 | 31,499,548 |
Issued in reinvestment of distributions | 4,408,997 | 471,151 | 869,944 |
Redeemed | (19,306,709) | (9,371,828) | (19,978,229) |
Net increase (decrease) | (762,703) | (325,808) | 12,391,263 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity Mid Cap Enhanced Index Fund
Years ended August 31, | 2018 | 2017 A | 2017 B | 2016 C | 2015B | 2014 B |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $14.93 | $14.77 | $11.98 | $14.16 | $13.60 | $10.97 |
Income from Investment Operations | ||||||
Net investment income (loss)D | .26 | .12 | .21 | .18 | .15 | .15 |
Net realized and unrealized gain (loss) | 2.17 | .13 | 2.76 | (1.70) | 1.73 | 3.17 |
Total from investment operations | 2.43 | .25 | 2.97 | (1.52) | 1.88 | 3.32 |
Distributions from net investment income | (.21) | (.02) | (.18) | (.14) | (.10) | (.12) |
Distributions from net realized gain | (.73) | (.07) | – | (.51) | (1.22) | (.57) |
Total distributions | (.94) | (.09) | (.18) | (.66)E | (1.32) | (.69) |
Redemption fees added to paid in capitalD | – | –F | –F | –F | –F | –F |
Net asset value, end of period | $16.42 | $14.93 | $14.77 | $11.98 | $14.16 | $13.60 |
Total ReturnG,H | 16.67% | 1.72% | 24.85% | (11.02)% | 15.22% | 30.97% |
Ratios to Average Net AssetsI,J | ||||||
Expenses before reductions | .59% | .59%K | .60% | .60% | .60% | .60% |
Expenses net of fee waivers, if any | .59% | .59%K | .60% | .60% | .60% | .60% |
Expenses net of all reductions | .59% | .59%K | .60% | .60% | .60% | .60% |
Net investment income (loss) | 1.64% | 1.62%K | 1.53% | 1.34% | 1.08% | 1.24% |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,289,418 | $1,183,861 | $1,176,023 | $805,242 | $608,475 | $271,674 |
Portfolio turnover rateL | 108% | 94%K | 87% | 88% | 89% | 128% |
A For the six month period ended August 31. The Fund changed its fiscal year end from February 28 to August 31, effective August 31, 2017.
B For the year ended February 28.
C For the year ended February 29.
D Calculated based on average shares outstanding during the period.
E Total distributions of $.66 per share is comprised of distributions from net investment income of $.144 and distributions from net realized gain of $.511 per share.
F Amount represents less than $.005 per share.
G Total returns for periods of less than one year are not annualized.
H Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
I 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.
J 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.
K Annualized
L 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® International Enhanced Index 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 August 31, 2018 | Past 1 year | Past 5 years | Past 10 years |
Fidelity® International Enhanced Index Fund | 2.71% | 7.10% | 4.10% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® International Enhanced Index Fund on August 31, 2008.
The chart shows how the value of your investment would have changed, and also shows how the MSCI EAFE Index performed over the same period.
Period Ending Values | ||
$14,952 | Fidelity® International Enhanced Index Fund | |
$14,547 | MSCI EAFE Index |
Fidelity® International Enhanced Index Fund
Management's Discussion of Fund Performance
Market Recap: The MSCI ACWI (All Country World Index) ex USA Index gained 3.36% for the 12 months ending August 31, 2018. Manufacturing and export activity – plus a generally weak U.S. dollar – underpinned markets into February, when foreign stocks reversed sharply amid concerns about escalating trade conflicts. The U.S. announced tariffs on Chinese imports, and China reciprocated with their own tariffs on U.S. goods. By region, Japan led the way with a gain of roughly 9%, despite central-bank easing and recent pressure from regional yen strength. Higher crude-oil prices buoyed resource-rich Canada (+7%), but had less influence on emerging markets (0%). Europe (+3%) slightly lagged the broader market, due partly to economic deceleration, while the U.K. rose 5%. From a sector perspective, 8 of 11 major groups gained ground. Energy (+21%) was a standout, benefiting from steady global demand for crude oil and declining global inventory. Health care (+10%) was bolstered by innovation and strong corporate fundamentals for makers of health care equipment and medical devices. Information technology (+8%) also outperformed. Conversely, rising interest rates hindered the high-dividend-yielding telecommunication services (-8%) and utilities (-3%) sectors, while financials (-2%) also lagged.Comments from Maximilian Kaufmann, Senior Portfolio Manager of the Geode Capital Management, LLC, investment management team: For the fiscal year, the fund gained 2.71%, trailing the 4.62% return of the MSCI EAFE Index. Relative to the index, the fund struggled in the health care sector, where security selection was weak. Also, a combination of an overweighting and poor stock picking in the lagging telecommunication services sector detracted. Security selection in information technology and real estate also hurt. In contrast, stock picking in consumer staples was modestly beneficial. (The fund may use fair-value pricing techniques to better reflect the value of foreign securities whose prices may be stale due to differences in market-closure times and dates around the world. Fair-value pricing is an adjustment process that attempts to best represent the value of fund holdings as of the close in trading in U.S. markets, accounting for any major changes occurring after the close of foreign markets. The MSCI EAFE does not engage in fair value pricing; differences between fund and index pricing methodologies may cause short-term discrepancies in performance, which tend to smooth out over time.) On an individual basis, the fund's biggest detractor was an out-of-index investment in Ceconomy, a Germany-based electronics retailer whose shares returned about -29%, reflecting weaker-than-expected financial results. Another detractor was Australian iron ore miner Fortescue Metals Group (-37%), which struggled amid a weakening commodity pricing environment. French aircraft maker Airbus (+50%) was another relative detractor, as for most of the reporting period the fund lacked a position in this strong-performing stock. Turning to contributors, healthy financial results boosted shares of French automaker Peugeot (+32%). Japanese drug manufacturer Astellas Pharma (+38%) and IT service provider Amadeus IT Group (+52%) 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® International Enhanced Index Fund
Investment Summary (Unaudited)
Geographic Diversification (% of fund's net assets)
As of August 31, 2018 | ||
Japan | 24.3% | |
United Kingdom | 15.8% | |
France | 11.3% | |
Germany | 8.4% | |
Australia | 7.8% | |
Switzerland | 7.6% | |
Netherlands | 5.6% | |
Spain | 3.2% | |
Sweden | 2.5% | |
Other* | 13.5% |
* Includes Short-Term investments and Net Other Assets (Liabilities).
Percentages are based on country or territory of incorporation and are adjusted for the effect of futures contracts, if applicable.
Asset Allocation as of August 31, 2018
% of fund's net assets | |
Stocks and Equity Futures | 100.0 |
Top Ten Stocks as of August 31, 2018
% of fund's net assets | |
Nestle SA (Reg. S) (Switzerland, Food Products) | 1.9 |
Roche Holding AG (participation certificate) (Switzerland, Pharmaceuticals) | 1.7 |
Novartis AG (Switzerland, Pharmaceuticals) | 1.5 |
Toyota Motor Corp. (Japan, Automobiles) | 1.5 |
Total SA (France, Oil, Gas & Consumable Fuels) | 1.3 |
Royal Dutch Shell PLC Class B (United Kingdom) (United Kingdom, Oil, Gas & Consumable Fuels) | 1.1 |
Novo Nordisk A/S Series B (Denmark, Pharmaceuticals) | 1.1 |
BASF AG (Germany, Chemicals) | 1.1 |
BHP Billiton Ltd. (Australia, Metals & Mining) | 1.0 |
Royal Dutch Shell PLC Class A (United Kingdom) (United Kingdom, Oil, Gas & Consumable Fuels) | 1.0 |
13.2 |
Top Market Sectors as of August 31, 2018
% of fund's net assets | |
Financials | 17.5 |
Consumer Discretionary | 13.5 |
Health Care | 12.9 |
Industrials | 12.9 |
Consumer Staples | 10.6 |
Materials | 9.5 |
Information Technology | 7.9 |
Energy | 7.6 |
Telecommunication Services | 3.9 |
Real Estate | 1.5 |
Fidelity® International Enhanced Index Fund
Schedule of Investments August 31, 2018
Showing Percentage of Net Assets
Common Stocks - 99.2% | |||
Shares | Value | ||
Australia - 7.8% | |||
ASX Ltd. | 481 | $23,389 | |
Australia & New Zealand Banking Group Ltd. | 655,590 | 13,903,458 | |
Bendigo & Adelaide Bank Ltd. | 31,429 | 261,868 | |
BHP Billiton Ltd. | 723,962 | 17,391,291 | |
BlueScope Steel Ltd. | 47,373 | 589,517 | |
Cimic Group Ltd. | 89,097 | 3,156,474 | |
Coca-Cola Amatil Ltd. | 956,311 | 6,455,550 | |
Cochlear Ltd. | 7,123 | 1,105,104 | |
Commonwealth Bank of Australia | 148,762 | 7,618,762 | |
Computershare Ltd. | 190,055 | 2,626,039 | |
Crown Ltd. | 107,454 | 1,096,931 | |
CSL Ltd. | 54,666 | 8,933,144 | |
Fortescue Metals Group Ltd. | 941,036 | 2,597,801 | |
Macquarie Group Ltd. | 76,515 | 7,117,858 | |
National Australia Bank Ltd. | 712,985 | 14,580,429 | |
Qantas Airways Ltd. | 1,030,954 | 4,765,613 | |
Rio Tinto Ltd. | 135,585 | 7,090,117 | |
Scentre Group unit | 730,532 | 2,158,488 | |
Sonic Healthcare Ltd. | 157,731 | 2,969,758 | |
South32 Ltd. | 2,706,638 | 6,771,391 | |
Stockland Corp. Ltd. unit | 171,351 | 508,751 | |
Suncorp Group Ltd. | 188,261 | 2,096,430 | |
Wesfarmers Ltd. | 356,201 | 13,174,951 | |
Westpac Banking Corp. | 136,191 | 2,797,081 | |
Woolworths Group Ltd. | 72,242 | 1,469,754 | |
TOTAL AUSTRALIA | 131,259,949 | ||
Austria - 0.4% | |||
OMV AG | 117,398 | 6,217,988 | |
Bailiwick of Jersey - 0.6% | |||
Ferguson PLC | 60,892 | 4,879,494 | |
Shire PLC | 78,121 | 4,569,373 | |
TOTAL BAILIWICK OF JERSEY | 9,448,867 | ||
Belgium - 1.2% | |||
Ageas | 67,826 | 3,509,740 | |
Anheuser-Busch InBev SA NV | 3,042 | 283,645 | |
Colruyt NV | 71,129 | 4,227,225 | |
Solvay SA Class A | 21,302 | 2,834,870 | |
UCB SA | 105,824 | 9,674,501 | |
TOTAL BELGIUM | 20,529,981 | ||
Bermuda - 0.1% | |||
Hongkong Land Holdings Ltd. | 167,006 | 1,155,682 | |
Kerry Properties Ltd. | 282,500 | 1,070,792 | |
TOTAL BERMUDA | 2,226,474 | ||
Cayman Islands - 1.0% | |||
Cheung Kong Property Holdings Ltd. | 252,500 | 1,799,952 | |
CK Hutchison Holdings Ltd. | 530,000 | 6,107,788 | |
Sands China Ltd. | 1,881,200 | 9,179,801 | |
TOTAL CAYMAN ISLANDS | 17,087,541 | ||
Denmark - 2.2% | |||
Carlsberg A/S Series B | 36,017 | 4,396,831 | |
Coloplast A/S Series B | 3,452 | 369,485 | |
Danske Bank A/S | 77,223 | 2,272,007 | |
DSV de Sammensluttede Vognmaend A/S | 21,863 | 2,048,699 | |
H Lundbeck A/S | 97,822 | 5,739,362 | |
Novo Nordisk A/S Series B | 377,632 | 18,589,381 | |
Novozymes A/S Series B | 34,715 | 1,902,725 | |
Tryg A/S | 27,827 | 683,738 | |
William Demant Holding A/S (a) | 45,600 | 1,854,617 | |
TOTAL DENMARK | 37,856,845 | ||
Finland - 1.4% | |||
Neste Oyj | 67,511 | 5,861,582 | |
Sampo Oyj (A Shares) | 16,887 | 863,842 | |
Stora Enso Oyj (R Shares) | 382,835 | 7,125,565 | |
UPM-Kymmene Corp. | 241,085 | 9,290,669 | |
TOTAL FINLAND | 23,141,658 | ||
France - 11.3% | |||
Arkema SA | 54,059 | 6,770,615 | |
Atos Origin SA | 57,956 | 6,942,514 | |
AXA SA | 325,740 | 8,208,906 | |
bioMerieux SA | 11,122 | 977,277 | |
BNP Paribas SA | 138,193 | 8,113,413 | |
Bouygues SA | 59,533 | 2,627,984 | |
Capgemini SA | 3,571 | 459,063 | |
Casino Guichard Perrachon SA (b) | 21,654 | 686,434 | |
CNP Assurances | 38,538 | 888,844 | |
Compagnie de St. Gobain | 184,693 | 7,963,750 | |
Credit Agricole SA | 314,230 | 4,299,465 | |
Dassault Aviation SA | 1,870 | 3,479,476 | |
Dassault Systemes SA | 23,908 | 3,874,069 | |
Eiffage SA | 32,460 | 3,653,254 | |
ENGIE | 273,899 | 4,015,434 | |
Eutelsat Communications | 24,742 | 585,873 | |
Faurecia SA | 29,922 | 1,833,153 | |
Hermes International SCA | 9,367 | 6,090,912 | |
Kering SA | 24,029 | 13,053,298 | |
Klepierre SA | 11,637 | 417,386 | |
L'Oreal SA | 64,395 | 15,450,101 | |
LVMH Moet Hennessy - Louis Vuitton SA | 9,139 | 3,203,689 | |
Michelin CGDE Series B | 14,597 | 1,727,682 | |
Orange SA | 479,230 | 7,758,554 | |
Peugeot Citroen SA | 369,368 | 10,161,231 | |
Renault SA | 119,771 | 10,315,595 | |
Rexel SA | 82,425 | 1,296,394 | |
Safran SA | 49,344 | 6,432,100 | |
Sanofi SA | 153,541 | 13,185,083 | |
Schneider Electric SA | 12,487 | 1,014,755 | |
Societe Generale Series A | 130,563 | 5,346,205 | |
SR Teleperformance SA | 6,957 | 1,336,468 | |
Thales SA | 20,643 | 2,907,711 | |
Total SA (b) | 358,429 | 22,476,312 | |
Valeo SA | 21,126 | 959,056 | |
Veolia Environnement SA | 57,369 | 1,209,294 | |
VINCI SA | 7,034 | 672,131 | |
TOTAL FRANCE | 190,393,481 | ||
Germany - 8.4% | |||
Allianz SE | 63,394 | 13,511,914 | |
BASF AG | 197,888 | 18,285,948 | |
Bayer AG | 160,585 | 14,986,497 | |
Bayerische Motoren Werke AG (BMW) | 7,606 | 736,399 | |
Beiersdorf AG | 11,784 | 1,371,931 | |
Brenntag AG | 11,323 | 682,656 | |
Continental AG | 27,607 | 5,064,685 | |
Covestro AG (c) | 116,462 | 9,919,748 | |
Deutsche Bank AG | 12,151 | 136,840 | |
Deutsche Borse AG | 40,990 | 5,656,577 | |
Deutsche Lufthansa AG | 22,874 | 597,132 | |
Deutsche Telekom AG | 221,900 | 3,578,502 | |
Evonik Industries AG | 31,089 | 1,158,739 | |
Fresenius SE & Co. KGaA | 41,055 | 3,134,719 | |
Hannover Reuck SE | 16,449 | 2,258,723 | |
Hugo Boss AG | 66,909 | 5,344,879 | |
Infineon Technologies AG | 321,570 | 8,177,239 | |
Linde AG | 14,356 | 3,269,423 | |
Metro AG | 653,021 | 4,963,346 | |
Metro Wholesale & Food Specialist AG | 143,032 | 2,233,858 | |
MTU Aero Engines Holdings AG | 25,492 | 5,589,521 | |
Muenchener Rueckversicherungs AG | 22,151 | 4,777,247 | |
ProSiebenSat.1 Media AG | 110,351 | 2,900,941 | |
SAP SE | 75,690 | 9,086,423 | |
Schaeffler AG | 305,235 | 4,145,328 | |
Siemens AG | 54,778 | 7,110,399 | |
Siemens Healthineers AG (a)(c) | 33,554 | 1,525,001 | |
TUI AG (GB) | 65,235 | 1,202,641 | |
Wirecard AG | 5,191 | 1,152,669 | |
TOTAL GERMANY | 142,559,925 | ||
Hong Kong - 1.7% | |||
AIA Group Ltd. | 419,200 | 3,615,842 | |
Galaxy Entertainment Group Ltd. | 636,000 | 4,707,960 | |
Henderson Land Development Co. Ltd. | 357,736 | 1,891,517 | |
Link (REIT) | 127,500 | 1,270,330 | |
Sun Hung Kai Properties Ltd. | 544,000 | 8,074,662 | |
Swire Pacific Ltd. (A Shares) | 15,500 | 175,267 | |
Swire Properties Ltd. | 68,000 | 267,278 | |
Techtronic Industries Co. Ltd. | 154,000 | 941,806 | |
Wharf Holdings Ltd. | 2,158,000 | 6,158,841 | |
Wheelock and Co. Ltd. | 349,000 | 2,189,935 | |
TOTAL HONG KONG | 29,293,438 | ||
Isle of Man - 0.4% | |||
Genting Singapore Ltd. | 8,851,800 | 6,900,605 | |
Italy - 1.2% | |||
Assicurazioni Generali SpA | 283,534 | 4,721,113 | |
Eni SpA | 489,749 | 9,088,281 | |
Intesa Sanpaolo SpA | 749,171 | 1,849,518 | |
Poste Italiane SpA (c) | 378,276 | 2,912,004 | |
Snam Rete Gas SpA | 88,976 | 365,194 | |
Terna SpA | 189,850 | 997,387 | |
UniCredit SpA | 67,378 | 972,451 | |
TOTAL ITALY | 20,905,948 | ||
Japan - 24.3% | |||
Agc, Inc. | 106,900 | 4,281,388 | |
Aisin Seiki Co. Ltd. | 77,400 | 3,580,560 | |
Alfresa Holdings Corp. | 29,700 | 744,973 | |
Asahi Kasei Corp. | 186,800 | 2,740,383 | |
Astellas Pharma, Inc. | 724,200 | 12,277,808 | |
Bridgestone Corp. | 62,100 | 2,287,601 | |
Brother Industries Ltd. | 206,400 | 4,239,086 | |
Canon, Inc. | 382,400 | 12,269,924 | |
Central Japan Railway Co. | 51,100 | 10,262,771 | |
Chubu Electric Power Co., Inc. | 52,500 | 763,331 | |
Chugai Pharmaceutical Co. Ltd. | 10,500 | 608,586 | |
Dai Nippon Printing Co. Ltd. | 40,100 | 899,733 | |
Dai-ichi Mutual Life Insurance Co. | 90,500 | 1,724,314 | |
Daicel Chemical Industries Ltd. | 109,800 | 1,242,180 | |
Eisai Co. Ltd. | 124,200 | 11,245,180 | |
Electric Power Development Co. Ltd. | 56,300 | 1,490,220 | |
Fujifilm Holdings Corp. | 246,800 | 10,437,523 | |
Fujitsu Ltd. | 1,417,000 | 10,369,568 | |
Hakuhodo DY Holdings, Inc. | 54,700 | 923,072 | |
Hamamatsu Photonics K.K. | 8,200 | 329,889 | |
Hitachi Ltd. | 1,855,000 | 12,112,344 | |
Honda Motor Co. Ltd. | 469,100 | 13,896,246 | |
Hoya Corp. | 185,800 | 10,864,392 | |
Itochu Corp. | 253,800 | 4,439,387 | |
Japan Post Holdings Co. Ltd. | 704,900 | 8,374,296 | |
JTEKT Corp. | 46,000 | 644,604 | |
JX Holdings, Inc. | 1,551,400 | 10,924,447 | |
Kajima Corp. | 264,000 | 1,900,819 | |
Kansai Electric Power Co., Inc. | 41,800 | 599,104 | |
KDDI Corp. | 105,200 | 2,781,471 | |
Kikkoman Corp. | 6,000 | 300,783 | |
Kirin Holdings Co. Ltd. | 302,900 | 7,490,035 | |
Konica Minolta, Inc. | 180,100 | 1,833,256 | |
Kyocera Corp. | 42,200 | 2,662,425 | |
Marubeni Corp. | 1,204,400 | 9,881,478 | |
Mazda Motor Corp. | 145,900 | 1,691,946 | |
Medipal Holdings Corp. | 98,000 | 1,976,582 | |
Mitsubishi Chemical Holdings Corp. | 1,088,500 | 9,757,412 | |
Mitsubishi Corp. | 449,700 | 12,834,117 | |
Mitsubishi Gas Chemical Co., Inc. | 35,400 | 736,611 | |
Mitsubishi UFJ Financial Group, Inc. | 111,400 | 673,378 | |
Mitsui & Co. Ltd. | 677,900 | 11,302,401 | |
Mizuho Financial Group, Inc. | 7,659,000 | 13,451,576 | |
MS&AD Insurance Group Holdings, Inc. | 35,000 | 1,075,736 | |
NEC Corp. | 49,100 | 1,356,647 | |
Nippon Telegraph & Telephone Corp. | 137,900 | 6,135,308 | |
Nitto Denko Corp. | 3,900 | 302,846 | |
NKSJ Holdings, Inc. | 88,200 | 3,765,825 | |
NTT Data Corp. | 156,100 | 2,006,217 | |
NTT DOCOMO, Inc. | 317,700 | 8,233,424 | |
OBIC Co. Ltd. | 9,700 | 911,421 | |
Oriental Land Co. Ltd. | 2,900 | 310,724 | |
ORIX Corp. | 493,600 | 7,938,648 | |
Pola Orbis Holdings, Inc. | 92,400 | 3,259,905 | |
Resona Holdings, Inc. | 99,200 | 562,380 | |
Sekisui House Ltd. | 82,300 | 1,343,273 | |
Seven & i Holdings Co. Ltd. | 250,400 | 10,197,642 | |
Shionogi & Co. Ltd. | 132,500 | 7,698,857 | |
Shiseido Co. Ltd. | 140,300 | 9,879,464 | |
SoftBank Corp. | 4,400 | 407,384 | |
Sony Corp. | 243,400 | 13,840,367 | |
Subaru Corp. | 139,200 | 4,135,534 | |
Sumitomo Chemical Co. Ltd. | 1,192,000 | 6,769,436 | |
Sumitomo Corp. | 626,800 | 10,174,006 | |
Sumitomo Mitsui Financial Group, Inc. | 370,900 | 14,581,362 | |
Suntory Beverage & Food Ltd. | 800 | 32,796 | |
Suzuki Motor Corp. | 162,100 | 10,547,952 | |
Taisei Corp. | 123,100 | 5,506,318 | |
Takeda Pharmaceutical Co. Ltd. | 16,400 | 683,244 | |
Terumo Corp. | 35,800 | 1,975,106 | |
Tokyo Electric Power Co., Inc. (a) | 1,928,300 | 8,920,405 | |
Tokyo Electron Ltd. | 40,100 | 6,827,019 | |
Tokyo Gas Co. Ltd. | 47,700 | 1,130,358 | |
Toyo Seikan Group Holdings Ltd. | 17,700 | 335,171 | |
Toyota Motor Corp. | 401,800 | 25,013,120 | |
Toyota Tsusho Corp. | 43,200 | 1,473,567 | |
Unicharm Corp. | 4,700 | 153,635 | |
TOTAL JAPAN | 411,332,297 | ||
Luxembourg - 0.1% | |||
RTL Group SA | 16,447 | 1,233,269 | |
Netherlands - 5.6% | |||
ABN AMRO Group NV GDR | 141,364 | 3,828,179 | |
AEGON NV | 532,211 | 3,191,368 | |
AEGON NV rights (a)(b)(d) | 532,211 | 86,487 | |
Airbus Group NV | 1,505 | 185,778 | |
ASML Holding NV (Netherlands) | 9,578 | 1,958,463 | |
EXOR NV | 51,386 | 3,339,000 | |
Fiat Chrysler Automobiles NV | 575,758 | 9,730,610 | |
Heineken Holding NV | 45,387 | 4,325,271 | |
ING Groep NV (Certificaten Van Aandelen) | 503,442 | 6,838,648 | |
Koninklijke Ahold Delhaize NV | 489,683 | 11,913,654 | |
Koninklijke DSM NV (b) | 48,150 | 5,051,348 | |
Koninklijke KPN NV | 1,162,616 | 2,969,980 | |
Koninklijke Philips Electronics NV | 297,782 | 13,305,542 | |
NN Group NV | 71,883 | 3,081,372 | |
NN Group NV rights (a)(b)(d) | 71,883 | 55,069 | |
NXP Semiconductors NV (a) | 22,546 | 2,099,934 | |
RELX NV | 38,314 | 849,650 | |
STMicroelectronics NV (France) | 468,718 | 9,670,864 | |
Unilever NV (Certificaten Van Aandelen) (Bearer) | 34,718 | 1,996,333 | |
Wolters Kluwer NV | 165,254 | 10,473,295 | |
TOTAL NETHERLANDS | 94,950,845 | ||
New Zealand - 0.0% | |||
Fisher & Paykel Healthcare Corp. | 56,902 | 617,024 | |
Norway - 1.4% | |||
DNB ASA | 38,883 | 791,927 | |
Equinor ASA | 463,504 | 11,888,615 | |
Marine Harvest ASA | 178,186 | 3,849,012 | |
Orkla ASA | 170,211 | 1,400,471 | |
Telenor ASA | 315,327 | 5,944,706 | |
TOTAL NORWAY | 23,874,731 | ||
Portugal - 0.4% | |||
Galp Energia SGPS SA Class B | 285,646 | 5,792,416 | |
Singapore - 0.6% | |||
ComfortDelgro Corp. Ltd. | 2,436,000 | 4,064,289 | |
Oversea-Chinese Banking Corp. Ltd. | 423,000 | 3,482,496 | |
United Overseas Bank Ltd. | 114,400 | 2,255,411 | |
Yangzijiang Shipbuilding Holdings Ltd. | 612,900 | 477,799 | |
TOTAL SINGAPORE | 10,279,995 | ||
Spain - 3.2% | |||
ACS Actividades de Construccion y Servicios SA | 207,877 | 8,657,601 | |
Amadeus IT Holding SA Class A | 141,270 | 13,105,214 | |
Banco Bilbao Vizcaya Argentaria SA | 389,947 | 2,422,958 | |
Banco Santander SA (Spain) | 1,657,519 | 8,236,587 | |
International Consolidated Airlines Group SA | 538,048 | 4,833,934 | |
MAPFRE SA (Reg.) | 953,816 | 2,811,033 | |
Red Electrica Corporacion SA | 19,025 | 398,793 | |
Repsol SA | 549,542 | 10,566,497 | |
Telefonica SA | 435,078 | 3,520,074 | |
TOTAL SPAIN | 54,552,691 | ||
Sweden - 2.5% | |||
Hexagon AB (B Shares) | 77,138 | 4,581,812 | |
Lundbergfoeretagen AB | 11,752 | 394,768 | |
Nordea Bank AB | 118,031 | 1,275,153 | |
Sandvik AB | 610,919 | 10,691,742 | |
Securitas AB (B Shares) | 108,423 | 1,928,937 | |
SKF AB (B Shares) | 20,980 | 403,190 | |
Swedbank AB (A Shares) | 139,227 | 3,239,696 | |
Swedish Match Co. AB | 181,325 | 9,693,640 | |
Volvo AB (B Shares) | 551,421 | 9,496,707 | |
TOTAL SWEDEN | 41,705,645 | ||
Switzerland - 7.6% | |||
Baloise Holdings AG | 12,799 | 1,967,553 | |
Barry Callebaut AG | 764 | 1,362,076 | |
Coca-Cola HBC AG | 54,142 | 1,851,675 | |
Credit Suisse Group AG | 195,249 | 2,923,770 | |
Lonza Group AG | 5,400 | 1,737,694 | |
Nestle SA (Reg. S) | 381,778 | 32,003,356 | |
Novartis AG | 304,892 | 25,294,507 | |
Partners Group Holding AG | 3,544 | 2,782,547 | |
Roche Holding AG (participation certificate) | 116,752 | 28,949,087 | |
SGS SA (Reg.) | 3,825 | 10,075,032 | |
Sonova Holding AG Class B | 5,065 | 961,004 | |
Swatch Group AG (Bearer) | 1,324 | 564,980 | |
Swiss Life Holding AG | 3,329 | 1,206,237 | |
Swiss Re Ltd. | 8,435 | 758,519 | |
Temenos Group AG | 15,304 | 2,763,167 | |
UBS Group AG | 295,454 | 4,613,563 | |
Zurich Insurance Group AG | 26,189 | 7,976,263 | |
TOTAL SWITZERLAND | 127,791,030 | ||
United Kingdom - 15.8% | |||
3i Group PLC | 308,030 | 3,579,733 | |
Anglo American PLC (United Kingdom) | 512,525 | 10,243,362 | |
Antofagasta PLC | 33,890 | 353,954 | |
AstraZeneca PLC (United Kingdom) | 41,496 | 3,131,861 | |
Aviva PLC | 869,646 | 5,471,303 | |
BAE Systems PLC | 786,571 | 6,189,513 | |
Barclays PLC | 1,859,436 | 4,259,450 | |
Barratt Developments PLC | 540,503 | 3,797,984 | |
Berkeley Group Holdings PLC | 108,663 | 5,132,118 | |
BHP Billiton PLC | 633,185 | 13,546,715 | |
BP PLC | 1,393,319 | 9,922,054 | |
British American Tobacco PLC (United Kingdom) | 99,228 | 4,798,397 | |
BT Group PLC | 2,587,633 | 7,305,179 | |
Burberry Group PLC | 332,478 | 9,638,079 | |
Centrica PLC | 2,180,640 | 4,051,221 | |
Croda International PLC | 7,511 | 496,619 | |
Diageo PLC | 56,021 | 1,959,307 | |
GlaxoSmithKline PLC | 120,866 | 2,447,885 | |
GlaxoSmithKline PLC sponsored ADR | 162,205 | 6,569,303 | |
HSBC Holdings PLC: | |||
(United Kingdom) | 620,538 | 5,401,141 | |
sponsored ADR (b) | 289,667 | 12,748,245 | |
Imperial Tobacco Group PLC | 247,163 | 8,792,722 | |
Investec PLC | 45,254 | 297,103 | |
J Sainsbury PLC | 1,022,858 | 4,299,165 | |
Legal & General Group PLC | 1,436,393 | 4,735,604 | |
Lloyds Banking Group PLC | 5,453,390 | 4,200,859 | |
London Stock Exchange Group PLC | 80,876 | 4,848,342 | |
Marks & Spencer Group PLC | 1,849,784 | 7,232,828 | |
Meggitt PLC | 270,191 | 1,885,256 | |
Mondi PLC | 40,298 | 1,120,641 | |
Next PLC | 52,487 | 3,742,572 | |
Pearson PLC | 31,209 | 371,141 | |
Persimmon PLC | 302,517 | 9,542,181 | |
Prudential PLC | 190,580 | 4,285,135 | |
RELX PLC | 87,446 | 1,938,616 | |
Rio Tinto PLC | 235,568 | 11,187,692 | |
Royal Bank of Scotland Group PLC | 953,311 | 2,988,401 | |
Royal Dutch Shell PLC: | |||
Class A (United Kingdom) | 530,084 | 17,245,692 | |
Class B (United Kingdom) | 584,786 | 19,357,535 | |
Royal Mail PLC | 1,034,835 | 6,010,421 | |
RSA Insurance Group PLC | 156,699 | 1,283,111 | |
Schroders PLC | 10,133 | 403,961 | |
SKY PLC | 36,314 | 725,256 | |
Standard Chartered PLC (United Kingdom) | 34,021 | 276,592 | |
Tate & Lyle PLC | 822,640 | 7,149,894 | |
Taylor Wimpey PLC | 2,285,264 | 4,958,130 | |
Tesco PLC | 178,424 | 570,177 | |
Unilever PLC | 23,622 | 1,346,094 | |
Vodafone Group PLC | 6,796,634 | 14,482,540 | |
WM Morrison Supermarkets PLC | 459,667 | 1,568,799 | |
TOTAL UNITED KINGDOM | 267,889,883 | ||
TOTAL COMMON STOCKS | |||
(Cost $1,659,027,875) | 1,677,842,526 | ||
Principal Amount | Value | ||
Government Obligations - 0.1% | |||
United States of America - 0.1% | |||
U.S. Treasury Bills, yield at date of purchase 2.11% 1/3/19 (e) | |||
(Cost $943,173) | $950,000 | 943,223 | |
Shares | Value | ||
Money Market Funds - 0.8% | |||
Fidelity Cash Central Fund, 1.97% (f) | 5,422,774 | 5,423,859 | |
Fidelity Securities Lending Cash Central Fund 1.98% (f)(g) | 8,297,333 | 8,298,163 | |
TOTAL MONEY MARKET FUNDS | |||
(Cost $13,722,022) | 13,722,022 | ||
TOTAL INVESTMENT IN SECURITIES - 100.1% | |||
(Cost $1,673,693,070) | 1,692,507,771 | ||
NET OTHER ASSETS (LIABILITIES) - (0.1)% | (1,356,991) | ||
NET ASSETS - 100% | $1,691,150,780 |
Futures Contracts | |||||
Number of contracts | Expiration Date | Notional Amount | Value | Unrealized Appreciation/(Depreciation) | |
Purchased | |||||
Equity Index Contracts | |||||
ICE E-mini MSCI EAFE Index Contracts (United States) | 133 | Sept. 2018 | $13,026,020 | $105,467 | $105,467 |
The notional amount of futures purchased as a percentage of Net Assets is 0.8%
Categorizations in the Schedule of Investments are based on country or territory of incorporation.
(a) Non-income producing
(b) Security or a portion of the security is on loan at period end.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $14,356,753 or 0.8% of net assets.
(d) Security or a portion of the security purchased on a delayed delivery or when-issued basis.
(e) 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 $660,256.
(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.
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 | $428,156 |
Fidelity Securities Lending Cash Central Fund | 286,120 |
Total | $714,276 |
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 August 31, 2018, 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: | ||||
Consumer Discretionary | $229,355,354 | $168,402,168 | $60,953,186 | $-- |
Consumer Staples | 179,944,583 | 136,987,274 | 42,957,309 | -- |
Energy | 129,706,613 | 51,616,739 | 78,089,874 | -- |
Financials | 297,482,763 | 165,498,100 | 131,984,663 | -- |
Health Care | 218,701,937 | 81,281,669 | 137,420,268 | -- |
Industrials | 218,084,148 | 194,098,172 | 23,985,976 | -- |
Information Technology | 131,852,789 | 83,862,857 | 47,989,932 | -- |
Materials | 158,882,789 | 98,471,143 | 60,411,646 | -- |
Real Estate | 27,138,881 | 27,138,881 | -- | -- |
Telecommunication Services | 63,117,122 | 5,944,706 | 57,172,416 | -- |
Utilities | 23,575,547 | 23,176,754 | 398,793 | -- |
Government Obligations | 943,223 | -- | 943,223 | -- |
Money Market Funds | 13,722,022 | 13,722,022 | -- | -- |
Total Investments in Securities: | $1,692,507,771 | $1,050,200,485 | $642,307,286 | $-- |
Derivative Instruments: | ||||
Assets | ||||
Futures Contracts | $105,467 | $105,467 | $-- | $-- |
Total Assets | $105,467 | $105,467 | $-- | $-- |
Total Derivative Instruments: | $105,467 | $105,467 | $-- | $-- |
The following is a summary of transfers between Level 1 and Level 2 for the period ended August 31, 2018. Transfers are assumed to have occurred at the beginning of the period, and are primarily attributable to the valuation techniques used for foreign equity securities, as discussed in the accompanying Notes to Financial Statements:
Transfers | Total |
Level 1 to Level 2 | $24,184,466 |
Level 2 to Level 1 | $1,391,074 |
Value of Derivative Instruments
The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of August 31, 2018. 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) | $105,467 | $0 |
Total Equity Risk | 105,467 | 0 |
Total Value of Derivatives | $105,467 | $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 net unrealized appreciation (depreciation).
See accompanying notes which are an integral part of the financial statements.
Fidelity® International Enhanced Index Fund
Financial Statements
Statement of Assets and Liabilities
August 31, 2018 | ||
Assets | ||
Investment in securities, at value (including securities loaned of $7,980,382) — See accompanying schedule: Unaffiliated issuers (cost $1,659,971,048) | $1,678,785,749 | |
Fidelity Central Funds (cost $13,722,022) | 13,722,022 | |
Total Investment in Securities (cost $1,673,693,070) | $1,692,507,771 | |
Foreign currency held at value (cost $6,131,462) | 6,131,391 | |
Receivable for investments sold | 8,385,988 | |
Receivable for fund shares sold | 2,479,207 | |
Dividends receivable | 6,062,345 | |
Distributions receivable from Fidelity Central Funds | 19,593 | |
Total assets | 1,715,586,295 | |
Liabilities | ||
Payable for investments purchased | ||
Regular delivery | $12,427,790 | |
Delayed delivery | 141,556 | |
Payable for fund shares redeemed | 2,637,194 | |
Accrued management fee | 838,154 | |
Payable for daily variation margin on futures contracts | 91,700 | |
Collateral on securities loaned | 8,299,121 | |
Total liabilities | 24,435,515 | |
Net Assets | $1,691,150,780 | |
Net Assets consist of: | ||
Paid in capital | $1,667,411,958 | |
Undistributed net investment income | 23,544,715 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (18,720,753) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 18,914,860 | |
Net Assets, for 172,053,018 shares outstanding | $1,691,150,780 | |
Net Asset Value, offering price and redemption price per share ($1,691,150,780 ÷ 172,053,018 shares) | $9.83 |
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
Year ended August 31, 2018 | ||
Investment Income | ||
Dividends | $40,468,011 | |
Interest | 24,807 | |
Income from Fidelity Central Funds (including $286,120 from security lending) | 714,276 | |
Income before foreign taxes withheld | 41,207,094 | |
Less foreign taxes withheld | (3,777,794) | |
Total income | 37,429,300 | |
Expenses | ||
Management fee | $6,685,737 | |
Independent trustees' fees and expenses | 11,076 | |
Interest | 272 | |
Miscellaneous | 19,472 | |
Total expenses before reductions | 6,716,557 | |
Expense reductions | (204) | |
Total expenses after reductions | 6,716,353 | |
Net investment income (loss) | 30,712,947 | |
Realized and Unrealized Gain (Loss) | ||
Net realized gain (loss) on: | ||
Investment securities: | ||
Unaffiliated issuers | (10,791,557) | |
Fidelity Central Funds | (1,842) | |
Foreign currency transactions | (144,491) | |
Futures contracts | 156,046 | |
Total net realized gain (loss) | (10,781,844) | |
Change in net unrealized appreciation (depreciation) on: | ||
Investment securities: | ||
Unaffiliated issuers | (31,731,015) | |
Fidelity Central Funds | (42) | |
Assets and liabilities in foreign currencies | (35,646) | |
Futures contracts | (133,839) | |
Total change in net unrealized appreciation (depreciation) | (31,900,542) | |
Net gain (loss) | (42,682,386) | |
Net increase (decrease) in net assets resulting from operations | $(11,969,439) |
See accompanying notes which are an integral part of the financial statements.
Statement of Changes in Net Assets
Year ended August 31, 2018 | Six months ended August 31, 2017 | Year ended February 28, 2017 | |
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $30,712,947 | $7,927,209 | $4,621,784 |
Net realized gain (loss) | (10,781,844) | 8,731,504 | (4,295,521) |
Change in net unrealized appreciation (depreciation) | (31,900,542) | 35,923,235 | 28,813,632 |
Net increase (decrease) in net assets resulting from operations | (11,969,439) | 52,581,948 | 29,139,895 |
Distributions to shareholders from net investment income | (12,641,480) | – | (4,288,268) |
Distributions to shareholders from net realized gain | (2,690,142) | – | (392,264) |
Total distributions | (15,331,622) | – | (4,680,532) |
Share transactions | |||
Proceeds from sales of shares | 1,480,868,009 | 290,120,502 | 151,532,441 |
Reinvestment of distributions | 14,714,616 | – | 4,408,489 |
Cost of shares redeemed | (353,536,211) | (37,899,931) | (61,528,135) |
Net increase (decrease) in net assets resulting from share transactions | 1,142,046,414 | 252,220,571 | 94,412,795 |
Redemption fees | 19,770 | 7,280 | 5,161 |
Total increase (decrease) in net assets | 1,114,765,123 | 304,809,799 | 118,877,319 |
Net Assets | |||
Beginning of period | 576,385,657 | 271,575,858 | 152,698,539 |
End of period | $1,691,150,780 | $576,385,657 | $271,575,858 |
Other Information | |||
Undistributed net investment income end of period | $23,544,715 | $7,649,198 | $1,283 |
Shares | |||
Sold | 146,438,695 | 31,303,660 | 18,467,381 |
Issued in reinvestment of distributions | 1,478,856 | – | 542,369 |
Redeemed | (35,086,750) | (4,088,208) | (7,586,650) |
Net increase (decrease) | 112,830,801 | 27,215,452 | 11,423,100 |
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
Fidelity International Enhanced Index Fund
Years ended August 31, | 2018 | 2017A | 2017 B | 2016 C | 2015 B | 2014 B |
Selected Per–Share Data | ||||||
Net asset value, beginning of period | $9.73 | $8.48 | $7.42 | $8.77 | $8.85 | $7.45 |
Income from Investment Operations | ||||||
Net investment income (loss)D | .27 | .18 | .20 | .19 | .20 | .28E |
Net realized and unrealized gain (loss) | –F | 1.07 | 1.08 | (1.38) | (.10) | 1.29 |
Total from investment operations | .27 | 1.25 | 1.28 | (1.19) | .10 | 1.57 |
Distributions from net investment income | (.14)G | – | (.20) | (.16) | (.16) | (.15) |
Distributions from net realized gain | (.03)G | – | (.02) | –F | (.02) | (.01) |
Total distributions | (.17) | – | (.22) | (.16) | (.18) | (.17)H |
Redemption fees added to paid in capitalD,F | – | – | – | – | – | – |
Net asset value, end of period | $9.83 | $9.73 | $8.48 | $7.42 | $8.77 | $8.85 |
Total ReturnI,J | 2.71% | 14.74% | 17.31% | (13.71)% | 1.25% | 21.21% |
Ratios to Average Net AssetsK,L | ||||||
Expenses before reductions | .59% | .59%M | .62% | .62% | .62% | .62% |
Expenses net of fee waivers, if any | .59% | .59%M | .62% | .62% | .62% | .62% |
Expenses net of all reductions | .59% | .59%M | .62% | .62% | .62% | .62% |
Net investment income (loss) | 2.69% | 3.86%M | 2.53% | 2.27% | 2.31% | 3.40%E |
Supplemental Data | ||||||
Net assets, end of period (000 omitted) | $1,691,151 | $576,386 | $271,576 | $152,699 | $105,360 | $44,828 |
Portfolio turnover rateN | 66% | 70%M | 75% | 77% | 75% | 63% |
A For the six month period ended August 31. The Fund changed its fiscal year end from February 28 to August 31, effective August 31, 2017.
B For the year ended February 28.
C For the year ended February 29.
D Calculated based on average shares outstanding during the period.
E Net investment income per share reflects a large, non-recurring dividend which amounted to $.06 per share. Excluding this non-recurring dividend, the ratio of net investment income (loss) to average net assets would have been 2.64%.
F Amount represents less than $.005 per share.
G The amounts shown reflect certain reclassifications related to book to tax differences that were made in the year shown.
H Total distributions of $.17 per share is comprised of distributions from net investment income of $.153 and distributions from net realized gain of $.013 per share.
I Total returns for periods of less than one year are not annualized.
J Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown.
K 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.
L 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.
M Annualized
N 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 August 31, 2018
1. Organization.
Fidelity Large Cap Growth Enhanced Index Fund, Fidelity Large Cap Value Enhanced Index Fund, Fidelity Large Cap Core Enhanced Index Fund, Fidelity Mid Cap Enhanced Index Fund and Fidelity International Enhanced Index Fund (the Funds) are funds of Fidelity Commonwealth Trust II (the Trust) and are 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 Delaware statutory trust.
2. 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. Utilizing these techniques may result in transfers between Level 1 and Level 2. 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 August 31, 2018, including information on transfers between Levels 1 and 2 is included at the end of each applicable 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. 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 August 31, 2018, 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. These differences resulted in distribution reclassifications. In addition, the Funds 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, passive foreign investment companies (PFIC), market discount, partnerships, 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 for each Fund:
Tax cost | Gross unrealized appreciation | Gross unrealized depreciation | Net unrealized appreciation (depreciation) | |
Fidelity Large Cap Growth Enhanced Index Fund | $841,144,900 | $356,312,878 | $(10,853,795) | $345,459,083 |
Fidelity Large Cap Value Enhanced Index Fund | 3,415,685,523 | 594,554,960 | (85,879,881) | 508,675,079 |
Fidelity Large Cap Core Enhanced Index Fund | 581,345,352 | 184,196,298 | (11,212,573) | 172,983,725 |
Fidelity Mid Cap Enhanced Index Fund | 1,122,584,570 | 203,250,212 | (29,552,056) | 173,698,156 |
Fidelity International Enhanced Index Fund | 1,682,755,389 | 93,598,311 | (83,845,929) | 9,752,382 |
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 Large Cap Growth Enhanced Index Fund | $15,419,522 | $47,705,397 | $345,459,083 |
Fidelity Large Cap Value Enhanced Index Fund | 80,645,505 | 99,718,165 | 508,675,079 |
Fidelity Large Cap Core Enhanced Index Fund | 13,661,423 | 32,525,776 | 172,983,725 |
Fidelity Mid Cap Enhanced Index Fund | 17,229,352 | 73,595,331 | 173,698,156 |
Fidelity International Enhanced Index Fund | 23,542,897 | – | 9,747,074 |
Certain of the Funds intend to elect to defer to the next fiscal year capital losses recognized during the period November 1, 2017 to August 31, 2018. Loss deferrals were as follows:
Capital losses | |
Fidelity International Enhanced Index Fund | $(9,551,150) |
The tax character of distributions paid was as follows:
August 31, 2018 | |||
Ordinary Income | Long-term Capital Gains | Total | |
Fidelity Large Cap Growth Enhanced Index Fund | $16,688,560 | $17,783,747 | $34,472,307 |
Fidelity Large Cap Value Enhanced Index Fund | 79,726,187 | 59,296,349 | 139,022,536 |
Fidelity Large Cap Core Enhanced Index Fund | 8,524,955 | 12,291,796 | 20,816,751 |
Fidelity Mid Cap Enhanced Index Fund | 16,549,391 | 56,453,522 | 73,002,913 |
Fidelity International Enhanced Index Fund | 15,145,025 | 186,597 | 15,331,622 |
August 31, 2017 | |||
Ordinary Income | Long-term Capital Gains | Total | |
Fidelity Large Cap Growth Enhanced Index Fund | $2,232,132 | $8,046,055 | $10,278,187 |
Fidelity Large Cap Value Enhanced Index Fund | 18,573,418 | 11,191,671 | 29,765,089 |
Fidelity Large Cap Core Enhanced Index Fund | 1,405,265 | – | 1,405,265 |
Fidelity Mid Cap Enhanced Index Fund | 1,441,547 | 5,846,277 | 7,287,824 |
February 28, 2017 | |
Ordinary Income | |
Fidelity Large Cap Growth Enhanced Index Fund | $7,111,776 |
Fidelity Large Cap Value Enhanced Index Fund | 38,789,221 |
Fidelity Large Cap Core Enhanced Index Fund | 7,861,211 |
Fidelity Mid Cap Enhanced Index Fund | 13,411,857 |
Fidelity International Enhanced Index Fund | 4,680,532 |
Short Term Trading (Redemption) Fees. Shares held by investors of Fidelity International Enhanced Index Fund less than 30 days may be subject to a redemption fee equal to 0.75% and 1.00%, respectively, of the net asset value of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Funds and accounted for as an addition to paid in capital. In November 2017, the Board of Trustees approved the elimination of these redemption fees effective December 18, 2017.
Delayed Delivery Transactions and When-Issued Securities. During the period, certain Funds transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed delivery or when-issued basis are identified as such in each applicable Fund's Schedule of Investments. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. The 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.
3. 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. Cash deposited to meet initial margin requirements is presented as segregated cash with brokers for derivative instruments in the Statement of Assets and Liabilities.
4. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities, are noted in the table below.
Purchases ($) | Sales ($) | |
Fidelity Large Cap Growth Enhanced Index Fund | 1,051,047,185 | 1,025,039,770 |
Fidelity Large Cap Value Enhanced Index Fund | 3,910,656,782 | 3,443,317,421 |
Fidelity Large Cap Core Enhanced Index Fund | 669,681,736 | 573,102,568 |
Fidelity Mid Cap Enhanced Index Fund | 1,349,577,531 | 1,410,253,412 |
Fidelity International Enhanced Index Fund | 1,898,857,536 | 731,544,990 |
5. Fees and Other Transactions with Affiliates.
Management Fee. FMR Co., Inc. (the investment adviser) and its affiliates provide the Funds with investment management related services for which the Funds pay a monthly management fee. Each Fund pays an all-inclusive management fee based on the annual rates noted in the following table; and the investment adviser pays all ordinary operating expenses of each Fund, except fees and expenses of the independent Trustees and certain miscellaneous expenses such as proxy and shareholder meeting expenses. The management fees are reduced by an amount equal to the fees and expenses paid by the Funds to the independent Trustees.
Fidelity Large Cap Growth Enhanced Index Fund | .39% |
Fidelity Large Cap Value Enhanced Index Fund | .39% |
Fidelity Large Cap Core Enhanced Index Fund | .39% |
Fidelity Mid Cap Enhanced Index Fund | .59% |
Fidelity International Enhanced Index Fund | .59% |
Sub-Adviser. Geode Capital Management, LLC (Geode), serves as sub-adviser for the Funds. Geode provides discretionary investment advisory services to the Funds and is paid by the investment adviser for providing these services.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Funds, along with other registered investment companies having management contracts with Fidelity Management & Research Company (FMR) or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. Each applicable fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or Lender | Average Loan Balance | Weighted Average Interest Rate | Interest Expense | |
Fidelity Large Cap Value Enhanced Index Fund | Borrower | $94,575,000 | 2.15% | $5,648 |
Fidelity Mid Cap Enhanced Index Fund | Borrower | 6,490,000 | 2.17% | 391 |
Fidelity International Enhanced Index Fund | Borrower | 5,042,000 | 1.95% | 272 |
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.
6. Investments in Fidelity Central Funds.
The Funds invest in Fidelity Central Funds, which are open-end investment companies 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 does 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 Fidelity Money Market Central Funds are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .005%.
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.
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 Miscellaneous expenses on the Statement of Operations, and are as follows:
Fidelity Large Cap Growth Enhanced Index Fund | $2,832 |
Fidelity Large Cap Value Enhanced Index Fund | 9,539 |
Fidelity Large Cap Core Enhanced Index Fund | 1,696 |
Fidelity Mid Cap Enhanced Index Fund | 3,541 |
Fidelity International Enhanced Index Fund | 2,514 |
During the period, the Funds did not borrow on this line of credit.
8. Security Lending.
Certain Funds lend portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Funds. 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 FCM. 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. FCM security lending activity was as follows:
Security Lending Income From Securities Loaned to FCM | |
Fidelity Large Cap Value Enhanced Index Fund | $1,310 |
Fidelity Large Cap Core Enhanced Index Fund | 1 |
Fidelity Mid Cap Enhanced Index Fund | 1,054 |
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.
Expense reduction | |
Fidelity Large Cap Growth Enhanced Index Fund | $491 |
Fidelity Large Cap Value Enhanced Index Fund | 1,678 |
Fidelity Large Cap Core Enhanced Index Fund | 651 |
Fidelity Mid Cap Enhanced Index Fund | 1,167 |
Fidelity International Enhanced Index Fund | 204 |
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, Strategic Advisers Fidelity U.S. Total Stock Fund was the owner of record of approximately 41% of the total outstanding shares of Fidelity Large Cap Value Enhanced Index Fund.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Fidelity Commonwealth Trust II and Shareholders of Fidelity Large Cap Growth Enhanced Index Fund, Fidelity Large Cap Value Enhanced Index Fund, Fidelity Large Cap Core Enhanced Index Fund, Fidelity Mid Cap Enhanced Index Fund and Fidelity International Enhanced Index Fund:
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Fidelity Large Cap Growth Enhanced Index Fund, Fidelity Large Cap Value Enhanced Index Fund, Fidelity Large Cap Core Enhanced Index Fund, Fidelity Mid Cap Enhanced Index Fund and Fidelity International Enhanced Index Fund (five of the funds constituting Fidelity Commonwealth Trust II, hereafter collectively referred to as the "Funds") as of August 31, 2018, the related statements of operations for the year ended August 31, 2018, the statements of changes in net assets for the year ended August 31, 2018, for the six months ended August 31, 2017, and for the year ended February 28, 2017, including the related notes, and the financial highlights for the year ended August 31, 2018, for the six months ended August 31, 2017 and for each of the four years in the period ended February 28, 2017 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of August 31, 2018, the results of each of their operations for the year then ended, the changes in each of their net assets for the year ended August 31, 2018, for the six months ended August 31, 2017, and for the year ended February 28, 2017 and each of the financial highlights for the year ended August 31, 2018, for the six months ended August 31, 2017, and for each of the four years in the period ended February 28, 2017 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Funds' management. Our responsibility is to express an opinion on the Funds' 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 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 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 August 31, 2018 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 opinions.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 19, 2018
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 283 funds. Mr. Wiley oversees 193 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 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. In addition, the Independent Trustees have worked with Fidelity to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. 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: 2018
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).
Charles S. Morrison (1960)
Year of Election or Appointment: 2018
Trustee
Mr. Morrison also serves as Trustee of other funds. He serves as President of Fidelity SelectCo, LLC (investment adviser firm, 2017-present) and Fidelity Management & Research Company (FMR) (investment adviser firm, 2016-present), a Director of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2014-present), Director of Fidelity SelectCo, LLC (investment adviser firm, 2014-present), President, Asset Management (2014-present), and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Fixed Income and Asset Allocation Funds (2012-2014), President, Fixed Income (2011-2014), Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (investment adviser firm, 2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Bond Division.
* 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: 2018
Trustee
Mr. Dirks also serves as Trustee of other Fidelity® funds. Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) and President and Board member of the National Securities Clearing Corporation (NSCC). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation, Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation, as a Trustee and a member of the Finance Committee of Manhattan College (2005-2008), as a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-2008), as a member of the Independent Directors Council (IDC) Governing Council (2010-2015), and as a member of the Board of Directors for The Brookville Center for Children’s Services, Inc. (2009-2017). Mr. Dirks is a member of the Finance Committee (2016-present), Board of Directors (2017-present) and Board of Trustees (2018-present) and is Treasurer (2018-present) of the Asolo Repertory Theatre.
Donald F. Donahue (1950)
Year of Election or Appointment: 2017
Trustee
Mr. Donahue also serves as a Trustee of other Fidelity® funds. Mr. Donahue is President and Chief Executive Officer of Miranda Partners, LLC (risk consulting for the financial services industry, 2012-present). Previously, Mr. Donahue served as a Member of the Advisory Board of certain Fidelity® funds (2015-2018) and 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 serves as a Member (2007-present) and Co-Chairman (2016-present) of the Board of Directors of United Way of New York, Member of the Board of Directors of NYC Leadership Academy (2012-present) and Member of the Board of Advisors of Ripple Labs, Inc. (financial services, 2015-present). He also served as Chairman (2010-2012) and Member of the Board of Directors (2012-2013) of Omgeo, LLC (financial services), Treasurer of United Way of New York (2012-2016), and Member of the Board of Directors of XBRL US (financial services non-profit, 2009-2012) and the International Securities Services Association (2009-2012).
Alan J. Lacy (1953)
Year of Election or Appointment: 2018
Trustee
Mr. Lacy also serves as Trustee of other Fidelity® funds. Mr. Lacy serves as a Director of Bristol-Myers Squibb Company (global pharmaceuticals, 2008-present). He is a Trustee of the California Chapter of The Nature Conservancy (2015-present) and a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University (2015-present). In addition, Mr. Lacy served as Senior Adviser (2007-2014) of Oak Hill Capital Partners, L.P. (private equity) and also served as Chief Executive Officer (2005) and Vice Chairman (2005-2006) of Sears Holdings Corporation (retail) and Chief Executive Officer and Chairman of the Board of Sears, Roebuck and Co. (retail, 2000-2005). Previously, Mr. Lacy served as Chairman (2014-2017) and a member (2010-2017) of the Board of Directors of Dave & Buster’s Entertainment, Inc. (restaurant and entertainment complexes), as Chairman (2008-2011) and a member (2006-2015) of the Board of Trustees of the National Parks Conservation Association, and as a member of the Board of Directors for The Hillman Companies, Inc. (hardware wholesalers, 2010-2014), Earth Fare, Inc. (retail grocery, 2010-2014), and The Western Union Company (global money transfer, 2006-2011).
Ned C. Lautenbach (1944)
Year of Election or Appointment: 2018
Trustee
Chairman of the Independent Trustees
Mr. Lautenbach also serves as Trustee of other Fidelity® funds. Mr. Lautenbach currently serves as Vice 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 most recently 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 and Advisory Partner at Clayton, Dubilier & Rice, LLC (private equity investment, 1998-2010), as well as a Director of Sony Corporation (2006-2007). In addition, Mr. Lautenbach also had a 30-year career with IBM (technology company) during which time he served as Senior Vice President and a member of the Corporate Executive Committee (1968-1998).
Joseph Mauriello (1944)
Year of Election or Appointment: 2018
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 (IDC) Governing Council (2015-present). Previously, Mr. Mauriello served as a member of the Board of Directors of XL Group plc. (global insurance and re-insurance, 2006-2018).
Cornelia M. Small (1944)
Year of Election or Appointment: 2018
Trustee
Ms. Small also serves as Trustee of other Fidelity® funds. Ms. Small is a member of the Board of Directors (2009-present) and Chair of the Investment Committee (2010-present) of the Teagle Foundation. Ms. Small also serves on the Investment Committee of the Berkshire Taconic Community Foundation (2008-present). Previously, Ms. Small served as Chairperson (2002-2008) and a member of the Investment Committee and Chairperson (2008-2012) and a member of the Board of Trustees of Smith College. In addition, Ms. Small served as Chief Investment Officer, Director of Global Equity Investments, and a member of the Board of Directors of Scudder, Stevens & Clark and Scudder Kemper Investments.
Garnett A. Smith (1947)
Year of Election or Appointment: 2017
Trustee
Mr. Smith also serves as Trustee of other Fidelity® funds. Prior to Mr. Smith's retirement, he served as Chairman and Chief Executive Officer of Inbrand Corp. (manufacturer of personal absorbent products, 1990-1997). He also served as President (1986-1990) of Inbrand Corp. Prior to his employment with Inbrand Corp., he was employed by a retail fabric chain and North Carolina National Bank. In addition, Mr. Smith served as a Member of the Advisory Board of certain Fidelity® funds (2012-2013) and as a board member of the Jackson Hole Land Trust (2009-2012).
David M. Thomas (1949)
Year of Election or Appointment: 2018
Trustee
Mr. Thomas also serves as Trustee of other Fidelity® funds. Mr. Thomas serves as Non-Executive Chairman of the Board of Directors of Fortune Brands Home and Security (home and security products, 2011-present), as a member of the Board of Directors (2004-present) and Presiding Director (2013-present) of Interpublic Group of Companies, Inc. (marketing communication), and as a member of the Board of Trustees of the University of Florida (2013-present). 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), and a Director of Fortune Brands, Inc. (consumer products, 2000-2011).
Michael E. Wiley (1950)
Year of Election or Appointment: 2017
Trustee
Mr. Wiley also serves as Trustee or Member of the Advisory Board of other Fidelity® funds. Mr. Wiley serves as a Director of Andeavor Corporation (independent oil refiner and marketer, 2005-present), a Director of Andeavor Logistics LP (natural resources logistics, 2015-present), and a Director of Bill Barrett Corporation (exploration and production, 2005-present). In addition, Mr. Wiley also serves as a Director of Post Oak Bank (privately-held bank, 2004-present). Previously, Mr. Wiley served as a Trustee of other Fidelity® funds (2008-2013), as a Director of Asia Pacific Exploration Consolidated (international oil and gas exploration and production, 2008-2013), as a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-2010), as a Senior Energy Advisor of Katzenbach Partners, LLC (consulting, 2006-2007), as an Advisory Director of Riverstone Holdings (private investment), Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production, 2001-2005).
+ 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 Member of the Advisory Board of other Fidelity® funds. Ms. Fuller serves as a member of the Board of Directors, Audit Committee, and Nominating and Governance Committee of The Williams Companies, Inc. (natural gas infrastructure, 2018-present). Previously, Ms. Fuller served as the 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).
Peter S. Lynch (1944)
Year of Election or Appointment: 2018
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 FMR (investment adviser firm) and FMR Co., Inc. (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 on the Special Olympics International Board of Directors (1997-2006).
William S. Stavropoulos (1939)
Year of Election or Appointment: 2018
Member of the Advisory Board
Mr. Stavropoulos also serves as Member of the Advisory Board of other Fidelity® funds. Mr. Stavropoulos serves as President and Founder of the Michigan Baseball Foundation, the Great Lakes Loons (2007-present). Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company, where he previously served in numerous senior management positions, including President, CEO (1995-2000; 2002-2004), Chairman of the Executive Committee (2000-2006), and as a member of the Board of Directors (1990-2006). Currently, Mr. Stavropoulos is Chairman of the Board of Directors of Univar Inc. (global distributor of commodity and specialty chemicals), a Director of Teradata Corporation (data warehousing and technology solutions), and a member of the Advisory Board for Metalmark Capital LLC (private equity investment, 2005-present). Mr. Stavropoulos is an operating advisor to Clayton, Dubilier & Rice, LLC (private equity investment). In addition, Mr. Stavropoulos is a member of the University of Notre Dame Advisory Council for the College of Science, a Trustee of the Rollin L. Gerstacker Foundation, and a Director of Artis-Naples in Naples, Florida. Previously, Mr. Stavropoulos served as Trustee of certain Fidelity® funds (2001-2018) and as a Director of Chemical Financial Corporation (bank holding company, 1993-2012) and Tyco International, Ltd. (multinational manufacturing and services, 2007-2012).
Carol B. Tomé (1957)
Year of Election or Appointment: 2017
Member of the Advisory Board
Ms. Tomé also serves as Member of the Advisory Board of other Fidelity® funds. Ms. Tomé is Chief Financial Officer (2001-present) and Executive Vice President of Corporate Services (2007-present) of The Home Depot, Inc. (home improvement retailer) and a Director (2003-present) and Chair of the Audit Committee (2004-present) of United Parcel Service, Inc. (package delivery and supply chain management). Previously, Ms. Tomé served as Trustee of certain Fidelity® funds (2017), Senior Vice President of Finance and Accounting/Treasurer (2000-2007) and Vice President and Treasurer (1995-2000) of The Home Depot, Inc. and Chair of the Board (2010-2012), Vice Chair of the Board (2009 and 2013), and a Director (2008-2013) of the Federal Reserve Bank of Atlanta. Ms. Tomé is also a director or trustee of many community and professional organizations.
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 the funds (2012-2016), and Vice President (2007-2014) and Deputy Anti-Money Laundering Officer (2007-2012) of FMR LLC.
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: 2018
Secretary and Chief Legal Officer (CLO)
Mr. Coffey also serves as Secretary and CLO 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 Assistant Secretary of certain funds (2009-2018) and as Vice President and Associate General Counsel of FMR LLC (2005-2009).
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 Global Equity Research (2016-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 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: 2017
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).
Adrien E. Deberghes (1967)
Year of Election or Appointment: 2018
Assistant Treasurer
Mr. Deberghes also serves as an officer of other funds. He serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (investment adviser firm, 2016-present), and is an employee of Fidelity Investments (2008-present). Previously, Mr. Deberghes served as President and Treasurer of certain Fidelity® funds (2013-2018). Prior to joining Fidelity Investments, Mr. Deberghes was Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005). Previously, Mr. Deberghes served in other fund officer roles.
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: 2018
Deputy 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 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 Global Equity Research (2018-present) and is an employee of Fidelity Investments (2013-present).
Chris Maher (1972)
Year of Election or Appointment: 2017
Assistant Treasurer
Mr. Maher serves as Assistant Treasurer of other funds. Mr. Maher is Vice President of Valuation Oversight, serves as Assistant Treasurer of FMR Capital, Inc. (2017-present), and is an employee of Fidelity Investments. Previously, Mr. Maher served as 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).
Rieco E. Mello (1969)
Year of Election or Appointment: 2017
Assistant Treasurer
Mr. Mello also serves as Assistant Treasurer of other funds. Mr. Mello serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (1995-present).
Kenneth B. Robins (1969)
Year of Election or Appointment: 2018
Chief Compliance Officer
Mr. Robins also serves as an officer of other funds. Mr. Robins serves as Compliance Officer of Fidelity Management & Research Company and FMR Co., Inc. (investment adviser firms, 2016-present) and is an employee of Fidelity Investments (2004-present). Previously, Mr. Robins served 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: 2018
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 (2013-2018) and Deputy Treasurer (2013-2016) of certain Fidelity® funds.
Marc L. Spector (1972)
Year of Election or Appointment: 2017
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 (accounting firm, 2005-2013).
Renee Stagnone (1975)
Year of Election or Appointment: 2017
Assistant Treasurer
Ms. Stagnone also serves as an officer of other funds. Ms. Stagnone serves as Assistant Treasurer of FMR Capital, Inc. (2017-present) and is an employee of Fidelity Investments (1997-present). Previously, Ms. Stagnone served as Deputy Treasurer of certain Fidelity® funds (2013-2016).
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the 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 (March 1, 2018 to August 31, 2018).
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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, 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. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee, which was eliminated effective August 1, 2018, is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, 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. In addition, if these transactional costs were included, your costs would have been higher.
Annualized Expense Ratio-A | Beginning Account Value March 1, 2018 | Ending Account Value August 31, 2018 | Expenses Paid During Period-B March 1, 2018 to August 31, 2018 | |
Fidelity Large Cap Growth Enhanced Index Fund | .39% | |||
Actual | $1,000.00 | $1,099.30 | $2.06 | |
Hypothetical-C | $1,000.00 | $1,023.24 | $1.99 | |
Fidelity Large Cap Value Enhanced Index Fund | .38% | |||
Actual | $1,000.00 | $1,051.80 | $1.97 | |
Hypothetical-C | $1,000.00 | $1,023.29 | $1.94 | |
Fidelity Large Cap Core Enhanced Index Fund | .39% | |||
Actual | $1,000.00 | $1,080.60 | $2.05 | |
Hypothetical-C | $1,000.00 | $1,023.24 | $1.99 | |
Fidelity Mid Cap Enhanced Index Fund | .59% | |||
Actual | $1,000.00 | $1,054.60 | $3.06 | |
Hypothetical-C | $1,000.00 | $1,022.23 | $3.01 | |
Fidelity International Enhanced Index Fund | .59% | |||
Actual | $1,000.00 | $969.40 | $2.93 | |
Hypothetical-C | $1,000.00 | $1,022.23 | $3.01 |
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 5% return per year before expenses
Distributions (Unaudited)
The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended August 31, 2018, or, if subsequently determined to be different, the net capital gain of such year.
Fidelity Large Cap Growth Enhanced Index Fund | $53,428,890 |
Fidelity Large Cap Value Enhanced Index Fund | $120,276,890 |
Fidelity Large Cap Core Enhanced Index Fund | $40,395,850 |
Fidelity Mid Cap Enhanced Index Fund | $82,264,478 |
Fidelity International Enhanced Index Fund | $186,597 |
A percentage of the dividends distributed during the fiscal year for the following funds qualify for the dividends–received deduction for corporate shareholders:
December 2017 | |
Fidelity Large Cap Growth Enhanced Index Fund | 69% |
Fidelity Large Cap Value Enhanced Index Fund | 68% |
Fidelity Large Cap Core Enhanced Index Fund | 91% |
Fidelity Mid Cap Enhanced Index Fund | 92% |
Fidelity International Enhanced Index Fund | 0% |
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.
December 2017 | |
Fidelity Large Cap Growth Enhanced Index Fund | 73% |
Fidelity Large Cap Value Enhanced Index Fund | 73% |
Fidelity Large Cap Core Enhanced Index Fund | 94% |
Fidelity Mid Cap Enhanced Index Fund | 97% |
Fidelity International Enhanced Index Fund | 87% |
The funds will notify shareholders in January 2019 of amounts for use in preparing 2018 income tax returns.
Proxy Voting Results
A special meeting of shareholders was held on December 8, 2017. The results of votes taken among shareholders on the proposal before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1
To elect a Board of Trustees.
# of Votes | % of Votes | |
James C. Curvey | ||
Affirmative | 5,014,365,315.80 | 94.427 |
Withheld | 295,993,797.41 | 5.573 |
TOTAL | 5,310,359,113.21 | 100.000 |
Dennis J. Dirks | ||
Affirmative | 5,052,634,760.68 | 95.147 |
Withheld | 257,724,352.53 | 4.853 |
TOTAL | 5,310,359,113.21 | 100.000 |
Donald F. Donahue | ||
Affirmative | 5,064,743,894.68 | 95.375 |
Withheld | 245,615,218.53 | 4.625 |
TOTAL | 5,310,359,113.21 | 100.000 |
Alan J. Lacy | ||
Affirmative | 5,056,278,999.15 | 95.216 |
Withheld | 254,080,114.06 | 4.784 |
TOTAL | 5,310,359,113.21 | 100.00 |
Ned C. Lautenbach | ||
Affirmative | 5,025,209,677.81 | 94.631 |
Withheld | 285,149,435.40 | 5.369 |
TOTAL | 5,310,359,113.21 | 100.000 |
Joseph Mauriello | ||
Affirmative | 5,039,532,996.03 | 94.901 |
Withheld | 270,826,117.18 | 5.099 |
TOTAL | 5,310,359,113.21 | 100.000 |
Charles S. Morrison | ||
Affirmative | 5,069,032,147.39 | 95.456 |
Withheld | 241,326,965.82 | 4.544 |
TOTAL | 5,310,359,113.21 | 100.000 |
Cornelia M. Small | ||
Affirmative | 5,038,003,098.83 | 94.872 |
Withheld | 272,356,014.38 | 5.128 |
TOTAL | 5,310,359,113.21 | 100.000 |
Garnett A. Smith | ||
Affirmative | 5,045,917,150.32 | 95.021 |
Withheld | 264,441,962.89 | 4.979 |
TOTAL | 5,310,359,113.21 | 100.000 |
David M. Thomas | ||
Affirmative | 5,054,154,708.47 | 95.176 |
Withheld | 256,204,404.74 | 4.824 |
TOTAL | 5,310,359,113.21 | 100.000 |
Michael E. Wiley | ||
Affirmative | 5,063,571,773.15 | 95.353 |
Withheld | 246,787,340.06 | 4.647 |
TOTAL | 5,310,359,113.21 | 100.000 |
Proposal 1 reflects trust wide proposal and voting results. | ||
GEI-ANN-1018
1.855140.112
Item 2.
Code of Ethics
As of the end of the period, August 31, 2018, Fidelity Commonwealth Trust II (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 PricewaterhouseCoopers LLP (“PwC”) for the fiscal year ended August 31, 2018, for the six month period ended August 31, 2017 and for the fiscal year ended February 28, 2017 for services rendered to Fidelity International Enhanced Index Fund, Fidelity Large Cap Core Enhanced Index Fund, Fidelity Large Cap Growth Enhanced Index Fund, Fidelity Large Cap Value Enhanced Index Fund and Fidelity Mid Cap Enhanced Index Fund (the “Funds”):
Services Billed by PwC
August 31, 2018 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity International Enhanced Index Fund | $40,000 | $3,400 | $6,300 | $1,700 |
Fidelity Large Cap Core Enhanced Index Fund | $40,000 | $3,300 | $3,700 | $1,700 |
Fidelity Large Cap Growth Enhanced Index Fund | $40,000 | $3,300 | $5,300 | $1,700 |
Fidelity Large Cap Value Enhanced Index Fund | $40,000 | $3,300 | $3,700 | $1,700 |
Fidelity Mid Cap Enhanced Index Fund | $40,000 | $3,300 | $3,700 | $1,700 |
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|
|
|
|
August 31, 2017 FeesA,B
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity International Enhanced Index Fund | $32,000 | $4,400 | $3,700 | $2,100 |
Fidelity Large Cap Core Enhanced Index Fund | $32,000 | $4,300 | $5,400 | $2,100 |
Fidelity Large Cap Growth Enhanced Index Fund | $32,000 | $4,300 | $3,700 | $2,100 |
Fidelity Large Cap Value Enhanced Index Fund | $32,000 | $4,300 | $3,700 | $2,100 |
Fidelity Mid Cap Enhanced Index Fund | $32,000 | $4,300 | $3,700 | $2,100 |
|
|
|
|
|
February 28, 2017 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity International Enhanced Index Fund | $45,000 | $4,700 | $3,700 | $2,300 |
Fidelity Large Cap Core Enhanced Index Fund | $46,000 | $4,600 | $5,400 | $2,200 |
Fidelity Large Cap Growth Enhanced Index Fund | $45,000 | $4,600 | $3,700 | $2,200 |
Fidelity Large Cap Value Enhanced Index Fund | $45,000 | $4,600 | $3,700 | $2,200 |
Fidelity Mid Cap Enhanced Index Fund | $45,000 | $4,600 | $3,700 | $2,200 |
A Amounts may reflect rounding.
B For the six month period ended August 31, 2017.
The following table presents fees billed by PwC that were required to be approved by the Audit Committee for services that relate directly to the operations and financial reporting of the Funds 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 Funds (“Fund Service Providers”):
Services Billed by PwC
| August 31, 2018A | August 31, 2017A,B | February 28, 2017A |
Audit-Related Fees | $7,605,000 | $9,815,000 | $6,065,000 |
Tax Fees | $20,000 | $155,000 | $150,000 |
All Other Fees | $- | $- | $- |
A Amounts may reflect rounding.
B For the six month period ended August 31, 2017.
“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 PwC for services rendered to the Funds, 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 the fiscal year ended August 31, 2018, for the six month period ended August 31, 2017 and for the fiscal year ended February 28, 2017 are as follows:
Billed By | August 31, 2018A | August 31, 2017A,B | February 28, 2017A | |
PwC | $10,630,000 | $12,555,000 | $7,570,000 | |
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A Amounts may reflect rounding.
B For the six month period ended August 31, 2017.
The trust's Audit Committee has considered non-audit services that were not pre-approved that were provided by PwC to Fund Service Providers to be compatible with maintaining the independence of PwC in its audit of the Funds, taking into account representations from PwC, in accordance with Public Company Accounting Oversight Board rules, regarding its independence from the Funds and 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 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 periods ended August 31, 2018, August 31, 2017 and February 28, 2017, relating to services provided to (i) the Funds or (ii) any Fund Service Provider that relate directly to the operations and financial reporting of the Funds.
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 Commonwealth Trust II
By: | /s/Stacie M. Smith |
| Stacie M. Smith |
| President and Treasurer |
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|
Date: | October 25, 2018 |
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 |
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|
Date: | October 25, 2018 |
By: | /s/John J. Burke III |
| John J. Burke III |
| Chief Financial Officer |
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|
Date: | October 25, 2018 |