Fidelity® Convertible Securities Fund

  • Symbol: FCVSX
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Summary

Morningstar® Snapshot*

AS OF 11/30/2014; MORNINGSTAR CATEGORY: Convertibles
Returns 5 out of 5, High Returns
LOWAVGHIGH
Expenses 1 out of 5, Low Fees
LOWAVGHIGH
Risk of this Category Category Risk Rating:5, where 1 is Lower and 10 is Higher
LOWERHIGHER

*Data provided by Morningstar. Please click on the indicator above to learn more about comparison groups and methodology.

Performance

 2 More Information
AS OF 11/30/2014
Average Annual Returns
YTD (Daily)* 1 Yr 3 Yr 5 Yr 10 Yr
YTD (Daily)* +8.31% 1 Yr +11.32% 3 Yr +16.80% 5 Yr +12.95% 10 Yr +8.30%
*AS OF 12/19/2014; Value is cumulative

Hypothetical Growth of $10,000

 3, 4 More Information
AS OF 11/30/2014; MORNINGSTAR CATEGORY: Convertibles
Shows growth of hypothetical $10,000 investment in Fidelity® Convertible Securities Fund compared to BofA ML All US Convt,Convertibles over the selected time period
Fidelity® Convertible Securities Fund
Convertibles

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The performance data featured represents past performance, which is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance data quoted.

Fund Manager(s)

More Information
Thomas Soviero since 6/21/2005

Fund Overview

Objective

Seeks a high level of total return through a combination of current income and capital appreciation.

Strategy

Normally investing at least 80% of assets in convertible securities, which are often lower-quality debt securities and perform more like a stock when the underlying share price is high and more like a bond when the underlying share price is low. Potentially investing in other types of securities, including common stocks.

Risk

Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Fixed income investments entail interest rate risk (as interest rates rise bond prices usually fall), the risk of issuer default, issuer credit risk and inflation risk. Lower-quality bonds can be more volatile and have greater risk of default than higher-quality bonds. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks.

Additional Disclosures

A mutual fund registered under Fidelity Financial Trust, and managed by Fidelity Management & Research Company. This description is only intended to provide a brief overview of the fund. Read the fund's prospectus for more detailed information about the fund.

Details

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Morningstar Category Convertibles
Fund Inception 1/5/1987
NAV
12/19/2014
$31.95
Glossary definition opens in new window.Exp Ratio (Gross)
1/29/2014
0.73%
($7.30 per $1000)
Glossary definition opens in new window.Exp Ratio (Net)
1/29/2014
0.73%
($7.30 per $1000)
Minimum to Invest 5 $2,500.00
Turnover Rate
5/31/2014
24%
Glossary definition opens in new window.Portfolio Net Assets ($M)
11/30/2014
$2,679.91
Glossary definition opens in new window.Share Class Net Assets ($M)
11/30/2014
$2,308.28
12 Month Low-High
11/30/2014
$30.11 - $33.57

Fixed Income Characteristics

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30-Day Yield 6
1.24%
11/30/2014

Asset Allocation

 7 More Information
AS OF 10/31/2014
Asset Allocation
Fund
Equities 18.79%
Convertible Bonds 51.29%
Convertible Preferred Stock 19.80%
Bonds 0.00%
Cash & Net Other Assets 10.12%

"Tax-Advantaged Domiciles" represent countries whose tax policies may be favorable for company incorporation.

Net Other Assets can include fund receivables, fund payables, and offsets to other derivative positions, as well as certain assets that do not fall into any of the Portfolio Composition categories. Depending on the extent to which the fund invests in derivatives and the number of positions that are held for future settlement, Net Other Assets can be a negative number.

The percent of net assets invested in both domestic and foreign Equities (common stocks, preferred stocks, rights and warrants, convertible preferred stocks and stock index futures and options), Bond (all debt instruments, including investment grade, non-investment grade, non-rated securities and convertible bonds), and Cash & Net Other Assets (cash, repurchase agreements, receivables and payables).

Quarter-End Average Annual Total Returns

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AS OF 9/30/2014; FUND INCEPTION 1/5/1987 Glossary definition opens in new window.

EXPENSE RATIO (GROSS):
0.73% AS OF 1/29/2014
1 Yr 3 Yr 5 Yr 10 Yr Life
Glossary definition opens in new window.Before Taxes
Fidelity® Convertible Securities Fund 12.17% 17.30% 12.37% 8.45% 11.19%
BofA ML All US Convt 14.18% 17.28% 12.66% 7.63% --
Convertibles 10.73% 14.08% 10.27% 6.64% --
Glossary definition opens in new window.After Taxes on Distributions
Fidelity® Convertible Securities Fund 11.04% 16.24% 11.38% 7.45% --
Convertibles 6.63% 11.89% 8.67% 5.11% --
Glossary definition opens in new window.After taxes on distributions and sale of fund shares
Fidelity® Convertible Securities Fund 7.01% 13.25% 9.54% 6.49% --
Convertibles 5.61% 10.06% 7.42% 4.73% --

Read more about after-tax returns.

The "Mutual Funds" area at the top of each page allows access to mutual fund holdings with individual and joint Fidelity non-retirement accounts. Individual stock positions, ETFs and 529 funds are not available through this view. For the full list of your holdings visit Portfolio Summary.

Mutual Funds are priced as of the previous business day's market close when the market is open. Mutual fund positions are priced as of the official market close (typically 4p.m.) and prices are generally available between 5 p.m. and 6p.m.

Watch a brief video to learn about using the new mutual fund library to evaluate funds

2013 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for fund performance, you should check the fund's current prospectus or other product materials for the most up-to-date information concerning applicable loads, fees and expenses.

Performance & Risk

Average Annual Total Returns

 8, 3, 2 More Information
AS OF 11/30/2014; FUND INCEPTION 1/5/1987
1 Yr 3 Yr 5 Yr 10 Yr Life
Fidelity® Convertible Securities Fund 11.32% 16.80% 12.95% 8.30% 11.27%
BofA ML All US Convt 12.44% 16.66% 12.80% 7.46% --
Convertibles 9.08% 13.60% 10.85% 6.75% --
Rank in Morningstar Category 18% 1% 2% 3% --
# of Funds in Morningstar Category 88 79 59 42 --

Yield

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12/18/2014 11/30/2014
30-Day Yield 6 1.47% 1.24%

Hypothetical Growth of $10,000

 3, 4 More Information
AS OF 11/30/2014; MORNINGSTAR CATEGORY: Convertibles
Fidelity® Convertible Securities Fund
Convertibles
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
This Fund 10.21% 5.95% 15.13% 16.24% -47.78% 64.11% 20.85% -7.33% 16.82% 24.06% 9.24%
Benchmark 9.61% 1.01% 12.83% 4.53% -35.73% 49.13% 16.77% -5.18% 14.96% 24.92% 10.34%
Category 9.03% 3.59% 10.72% 7.51% -33.38% 40.58% 16.77% -5.62% 10.92% 21.66% 7.39%
+/- Benchmark 0.60% 4.94% 2.30% 11.71% -12.05% 14.98% 4.08% -2.15% 1.86% -0.86% -1.10%
+/- Category 1.18% 2.36% 4.41% 8.73% -14.40% 23.53% 4.08% -1.71% 5.90% 2.40% 1.85%

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The performance data featured represents past performance, which is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance data quoted.

Quarter-End Average Annual Total Returns

 3, 2 More Information
AS OF 9/30/2014; FUND INCEPTION 1/5/1987 Glossary definition opens in new window.

EXPENSE RATIO (GROSS):
0.73% AS OF 1/29/2014
1 Yr 3 Yr 5 Yr 10 Yr Life
Glossary definition opens in new window.Before Taxes
Fidelity® Convertible Securities Fund 12.17% 17.30% 12.37% 8.45% 11.19%
BofA ML All US Convt 14.18% 17.28% 12.66% 7.63% --
Convertibles 10.73% 14.08% 10.27% 6.64% --
Glossary definition opens in new window.After Taxes on Distributions
Fidelity® Convertible Securities Fund 11.04% 16.24% 11.38% 7.45% --
Convertibles 6.63% 11.89% 8.67% 5.11% --
Glossary definition opens in new window.After taxes on distributions and sale of fund shares
Fidelity® Convertible Securities Fund 7.01% 13.25% 9.54% 6.49% --
Convertibles 5.61% 10.06% 7.42% 4.73% --

Read more about after-tax returns.

Cumulative Total Returns

 2 More Information
AS OF 11/30/2014
YTD (Daily)* YTD (Monthly) 1 Month 3 Months 6 Months
Fidelity® Convertible Securities Fund 8.31% 9.24% 2.69% 0.72% 3.81%
BofA ML All US Convt -- 10.34% 0.95% -0.65% 3.51%
Convertibles -- 7.39% 0.77% -0.89% 2.43%
*AS OF 12/19/2014

Fund Risk and Return

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AS OF 11/30/2014; MORNINGSTAR CATEGORY: Convertibles
Risk of this Category Category Risk Rating:5, where 1 is Lower and 10 is Higher
LOWERHIGHER

Risk

Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Fixed income investments entail interest rate risk (as interest rates rise bond prices usually fall), the risk of issuer default, issuer credit risk and inflation risk. Lower-quality bonds can be more volatile and have greater risk of default than higher-quality bonds. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks.

Volatility Measures

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Beta 1.06
AS OF 11/30/2014

A measure of a portfolio's sensitivity to market movements (as represented by a benchmark index). The benchmark index has a beta of 1.0. A beta of more (less) than 1.0 indicates that a fund's historical returns have fluctuated more (less) than the benchmark index. Beta is a more reliable measure of volatility when used in combination with a high R2 which indicates a high correlation between the movements in a fund's returns and movements in a benchmark index.

R2 0.84
AS OF 11/30/2014

A measurement of how closely the portfolio's performance correlates with the performance of the fund's primary benchmark index or equivalent. R2 is a proportion which ranges between 0.00 and 1.00. An R2 of 1.00 indicates perfect correlation to the benchmark index, that is, all of the portfolio's fluctuations are explained by performance fluctuations of the index, while an R2 of 0.00 indicates no correlation. Therefore, the lower the R2, the more the fund's performance is affected by factors other than the market as measured by that benchmark index. An R2 value of less than 0.5 indicates that the Annualized Alpha and Beta are not reliable performance statistics.

Sharpe Ratio 1.81
AS OF 11/30/2014

The Sharpe ratio is a measure of historical adjusted performance calculated by dividing the fund's excess returns (fund's average monthly returns minus the average monthly return of the Salomon Smith Barney 3-Month T-Bill Index) by the standard deviation of those returns. The higher the ratio, the better the fund's return per unit of risk.

Standard Deviation 8.82
AS OF 11/30/2014

Statistical measure of how much a return varies over an extended period of time. The more variable the returns, the larger the standard deviation. Investors may examine historical standard deviation in conjunction with historical returns to decide whether an investment's volatility would have been acceptable given the returns it would have produced. A higher standard deviation indicates a wider dispersion of past returns and thus greater historical volatility. Standard deviation does not indicate how an investment actually performed, but it does indicate the volatility of its returns over time. Standard deviation is annualized. The returns used for this calculation are not load-adjusted.

Volatility measures are based on the variability of historical returns of the portfolio. In the case of annuity funds, this is before the effect of annuity charges. Relative Volatility, Beta, and R2 compare a portfolio's total return to those of a relevant market, represented by the benchmark index. Standard Deviation is calculated independent of an index.

Historical Fund Performance

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Current year's data as of: 11/30/2014
Year Total Returns Capital Gains Dividends Glossary definition opens in new window.Share Class Net Assets ($M)
2014 9.24% $1.098 $0.613 $2,308.28
2013 24.06% $0.205 $0.758 $2,153.65
2012 16.82% -- $0.723 $1,765.68
2011 -7.33% -- $0.791 $1,877.35
2010 20.85% -- $0.816 $2,403.82
2009 64.11% -- $0.936 $2,414.40
2008 -47.78% $0.02 $0.77 $1,477.40
2007 16.24% $0.83 $0.58 $2,977.43
2006 15.13% $0.02 $0.48 $2,105.42
2005 5.95% $0.01 $0.4 $1,801.62

The "Mutual Funds" area at the top of each page allows access to mutual fund holdings with individual and joint Fidelity non-retirement accounts. Individual stock positions, ETFs and 529 funds are not available through this view. For the full list of your holdings visit Portfolio Summary.

Mutual Funds are priced as of the previous business day's market close when the market is open. Mutual fund positions are priced as of the official market close (typically 4p.m.) and prices are generally available between 5 p.m. and 6p.m.

The performance data featured represents past performance, which is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance data quoted.

Fund Characteristics and Attribution

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2013 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for fund performance, you should check the fund's current prospectus or other product materials for the most up-to-date information concerning applicable loads, fees and expenses.

Ratings

Morningstar Ratings

AS OF 11/30/2014; MORNINGSTAR CATEGORY: Convertibles
Overall
3 out of 5 stars
Out of 79 funds
3 Yr
5 out of 5 stars
Out of 79 funds
5 Yr
4 out of 5 stars
Out of 59 funds
10 Yr
2 out of 5 stars
Out of 42 funds

An overall rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Metrics as of the date stated. The number of funds in the Convertibles category tracked by Morningstar was 79 for the 3 year period and Overall Ranking; 59 for the 5 year period; and 42 for the 10 year period. Please click on the question mark above for additional Morningstar information.

Past performance is no guarantee of future results.

Lipper Ranking

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AS OF 11/30/2014; LIPPER PEER GROUP: Convertible Secs
1 Yr
#14 out of 76 funds
5 Yr
#2 out of 54 funds
10 Yr
#2 out of 37 funds

The fund is ranked based on total return. Each fund is ranked within a universe of funds with similar investment objectives. Rankings include the reinvestment of dividends and capital gains but exclude the effect of a fund's sales load, if applicable. Lipper Inc. is a nationally recognized organization that ranks the performance of mutual funds.

Past performance is no guarantee of future results.

Watch a brief video to learn about using the new mutual fund library to evaluate funds

The "Mutual Funds" area at the top of each page allows access to mutual fund holdings with individual and joint Fidelity non-retirement accounts. Individual stock positions, ETFs and 529 funds are not available through this view. For the full list of your holdings visit Portfolio Summary.

Mutual Funds are priced as of the previous business day's market close when the market is open. Mutual fund positions are priced as of the official market close (typically 4p.m.) and prices are generally available between 5 p.m. and 6p.m.

2013 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for fund performance, you should check the fund's current prospectus or other product materials for the most up-to-date information concerning applicable loads, fees and expenses.

Composition

Major Market Sectors for Equities

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AS OF 10/31/2014
Portfolio Weight BofA ML All US Convt
Financials 15.94% 18.50%
Consumer Discretionary 15.81% 10.35%
Health Care 13.54% 19.64%
Information Technology 13.09% 27.77%
Industrials 11.67% 6.85%
Energy 9.75% 6.56%
Telecommunication Services 4.04% 1.15%
Consumer Staples 3.29% 2.06%
Materials 1.61% 2.87%
Utilities 1.15% 3.82%
Other 0.00% 0.00%

Asset Allocation

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AS OF 10/31/2014
Fund
Equities 18.79%
Convertible Bonds 51.29%
Convertible Preferred Stock 19.80%
Bonds 0.00%
Cash & Net Other Assets 10.12%

"Tax-Advantaged Domiciles" represent countries whose tax policies may be favorable for company incorporation.

Net Other Assets can include fund receivables, fund payables, and offsets to other derivative positions, as well as certain assets that do not fall into any of the Portfolio Composition categories. Depending on the extent to which the fund invests in derivatives and the number of positions that are held for future settlement, Net Other Assets can be a negative number.

The percent of net assets invested in both domestic and foreign Equities (common stocks, preferred stocks, rights and warrants, convertible preferred stocks and stock index futures and options), Bond (all debt instruments, including investment grade, non-investment grade, non-rated securities and convertible bonds), and Cash & Net Other Assets (cash, repurchase agreements, receivables and payables).

Top 10 Holdings

 7 More Information
AS OF 9/30/2014
WELLS FARGO 7.5% PC PERP A/L
FORD MOTOR CONV 4.25% 11/15/16
MGM MIRAGE CONV 4.25% 4/15/15
GENERAL MOTORS CO
BANK AMER PC 7.25% PERP
MICRON TECH CV 3.125 5/32 WI
CITIGROUP INC
CONTINENTL AIR CONV 4.5% 1/15
PEABODY ENRG CV 4.75% 12/15/41
CHESPK ENGY 5.75 PRP PC 144A A
% of Total Portfolio 34.57%
Total # of holdings: 86 as of 9/30/2014
Total # of issuers: 72 as of 9/30/2014

Credit Quality

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AS OF 10/31/2014
U.S. Government 0.00%
AAA 0.00%
AA 0.00%
A 1.16%
BBB 13.47%
BB 13.99%
B 16.79%
CCC & Below 3.53%
Short-Term Rated 0.00%
Not Rated/Not Available 40.95%
Cash & Net Other Assets 10.11%

Fixed Income Characteristics

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30-Day Yield 6
1.24%
11/30/2014

Equity StyleMap®*

AS OF 10/31/2014
Capitalization
LG current
MD
SM
Value Blend Growth
Style
Current
Historical

Large Blend

Invest in companies with market values greater than $10 billion. These funds invest in a combination of growth and value-oriented stocks.

*18.87%  Fund Assets Covered

Regional Diversification

 7 More Information
AS OF 10/31/2014
United States
98.51%
Europe
1.27%
Emerging Markets
0.22%
Canada
0.00%
Japan
0.00%
Asia-Pacific ex Japan
0.00%
Other
0.00%

Country Diversification

 7 More Information
AS OF 10/31/2014
USA
98.52%

Currency Diversification

 7 More Information
AS OF 10/31/2014
U.S. Dollar
100.00%

Fund Facts

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Fiscal Year End
November
Fund Inception
1/5/1987
Fund Number
308
Fund Symbol
FCVSX
Order Cutoff Time
04:00 PM EST

The "Mutual Funds" area at the top of each page allows access to mutual fund holdings with individual and joint Fidelity non-retirement accounts. Individual stock positions, ETFs and 529 funds are not available through this view. For the full list of your holdings visit Portfolio Summary.

Mutual Funds are priced as of the previous business day's market close when the market is open. Mutual fund positions are priced as of the official market close (typically 4p.m.) and prices are generally available between 5 p.m. and 6p.m.

Browse Our Proxy Voting Results

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2013 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for fund performance, you should check the fund's current prospectus or other product materials for the most up-to-date information concerning applicable loads, fees and expenses.

Fees and Distributions

Expenses & Fees

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0.73%
($7.30 per $1000)
1/29/2014
Distribution and/or service fee(12b-1) Fees
0.00%
Small Balance Fee 10

You can receive a prospectus from Fidelity by mail

See prospectus for more information on Fees, Expenses & Loads.

Minimums

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Initial Investment
$2,500.00
Additional Investment
$0.00
Initial IRA Investment
$2,500.00
Additional IRA Investment
$0.00
Initial Group Retirement Investment 5
$500.00
Additional Group Retirement Investment
$0.00
Required Balance
$2,000.00
Direct Deposit
$0.00

Features

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Retirement Accounts
yes
Check Writing
no
Direct Deposit
yes
Automatic Account Builder
yes
Max Exchange Redemptions in a Year
yes
Simple IRA
yes

Distribution

Dividend History

Date Per Share Amount Reinvestment Price
12/12/14 $0.22 $31.49
10/03/14 $0.153 $32.18
7/03/14 $0.112 $33.39
4/04/14 $0.128 $31.50

Capital Gains History

Date Per Share Amount Reinvestment Price
12/12/14 $1.093 $31.49
1/10/14 $0.005 $31.77
12/30/13 $0.205 $30.93
1/11/08 $0.02 $26.92

Pricing

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AS OF 11/30/2014
NAV
$31.95
12/19/2014
12 Month Low-High
$30.11 - $33.57
Monthly Low-High
$32.54 - $33.57
On 11/30/2014
$33.57

Price History By Month

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Actual Values: Nov. 2014 to Nov. 2013

Close Low High
Nov $33.57 $32.54 $33.57
Oct $32.69 $30.11 $32.69
Sep $32.51 $32.51 $33.48
Aug $33.49 $32.17 $33.50
Jul $32.70 $32.70 $33.41
Jun $33.18 $32.68 $33.18
May $32.60 $31.70 $32.61
Apr $31.90 $30.68 $32.22
Mar $31.78 $31.35 $32.55
Feb $32.15 $30.65 $32.32
Jan $31.16 $31.01 $32.05
Dec $31.11 $30.71 $31.18
Nov $30.90 $29.81 $30.90

The "Mutual Funds" area at the top of each page allows access to mutual fund holdings with individual and joint Fidelity non-retirement accounts. Individual stock positions, ETFs and 529 funds are not available through this view. For the full list of your holdings visit Portfolio Summary.

Mutual Funds are priced as of the previous business day's market close when the market is open. Mutual fund positions are priced as of the official market close (typically 4p.m.) and prices are generally available between 5 p.m. and 6p.m.

Commentary

Third Quarter 2014 Summary

Overview

  • Fidelity® Convertible Securities Fund is focused on investing primarily in the convertible and preferred securities of speculative and investment-grade issuers.
  • We apply an opportunistic investment approach, which results in a focus on the speculative-grade portion of the market, coupled with a high concentration in the portfolio manager's best ideas.
  • In particular, we seek companies with strong competitive positioning and management teams that can prudently use free cash flow and aim to reduce leverage over the intermediate term.
  • We strive to uncover these companies through in-depth fundamental credit analysis of the entire capital structure, working in concert with Fidelity's high-income and global-research teams.
  • For the three months ending September 30, 2014, Fidelity Convertible Securities Fund (Retail Class) returned -1.69%, about in line with the -1.66% return of The BofA Merrill LynchSM All US Convertibles Index.
  • While this review mainly outlines drivers for the past quarter, our buy and sell decisions are typically based on the longer-term prospects for stocks and not on short time periods.

Drivers of Fund Performance:

  • Security selection in the consumer discretionary sector detracted from performance versus the benchmark, especially the decision to overweight car manufacturers General Motors and Ford Motor. General Motors came under pressure early in the quarter, as North American costs increased more than expected while vehicle prices remained unchanged. Additionally, both car manufacturers fell under pressure toward the end of the period when fears of slowing economic growth escalated.
  • An underweighting and security selection in the health care sector held back the fund's result versus the BofA Merrill Lynch index. In particular, our decision to not own Gilead Sciences detracted the most. The company's convertible bonds outperformed during the quarter, driven largely by its new drug, SOVALDI®. After gaining U.S. and Canadian regulatory approval in late 2013 and European approval in 2014, first-quarter sales of the once-daily, all-oral hepatitis C drug came in at roughly twice consensus estimates. Investors believed that SOVALDI® had the potential to end up as one of the biggest drug launches in history given Gilead's track record of success combined with estimates that roughly 3% of the world's population is infected with the hepatitis C virus.
  • Within the industrials sector, the fund's overweighted position in the airlines industry contributed to performance. Most notably, the fund's position in United Continental Holdings outperformed following the release of financial results that beat consensus estimates. The airline operator reported a 73% increase in earnings from the same period last year, driven by increased volume and lower fuel prices.
  • Security selection and an underweighting in the financials sector also proved additive. The fund's overweighted position in large, investment-grade money center banks such as Bank of America, Citi and Wells Fargo outperformed, as fears of slowing global economic growth led to outperformance of the investment-grade sector of the convertible bond market.

End-of-Quarter Positioning:

  • We continued to position the fund using a barbell approach to volatility. Top holdings in the fund remained split among positions that are highly sensitive to their underlying equity, as well as those with little sensitivity to the underlying equity and trading well below their call price.
  • At the conclusion of the quarter, the fund remained concentrated in our highest-conviction names, with the top-10 holdings accounting for roughly 35% of fund assets. We believe this approach allows our best ideas to drive performance.
  • The fund's largest overweighting was in the consumer discretionary sector, where we held greater-than-benchmark exposure to companies within the automotive industry. Improving auto sales and an aging auto fleet provide a positive fundamental backdrop for auto and auto parts manufacturers, in our view.
  • The overweighting in industrials remained through the end of the quarter, driven by positions in United Continental Holdings. We believe the company is poised to reduce leverage, while revenue per available seat mile continues to trend upward.
  • The technology sector represented the fund's largest underweighting. The decision to not own large issuers and index components SanDisk and Intel contributed the most the fund's underweighted position in this sector.
Finally, we remain committed to a disciplined investment process in pursuit of strong long-term results for our shareholders.

Fund Manager(s)

More Information
Thomas Soviero since 6/21/2005

Strategy & Objective

Objective

Seeks a high level of total return through a combination of current income and capital appreciation.

Strategy

Normally investing at least 80% of assets in convertible securities, which are often lower-quality debt securities and perform more like a stock when the underlying share price is high and more like a bond when the underlying share price is low. Potentially investing in other types of securities, including common stocks.

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The "Mutual Funds" area at the top of each page allows access to mutual fund holdings with individual and joint Fidelity non-retirement accounts. Individual stock positions, ETFs and 529 funds are not available through this view. For the full list of your holdings visit Portfolio Summary.

Mutual Funds are priced as of the previous business day's market close when the market is open. Mutual fund positions are priced as of the official market close (typically 4p.m.) and prices are generally available between 5 p.m. and 6p.m.

1. No Transaction Fee Fidelity funds are available without paying a trading fee to Fidelity or a sales load to the fund. However, the fund may charge a short-term trading or redemption fee to protect the interests of long-term shareholders of the fund. Shares are subject to the fund's management and operating expenses. See Expenses & Fees for more information.

2. Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated. Life of fund figures are reported as of the commencement date to the period indicated and are cumulative if the fund is less than one year old. Total returns do not reflect the fund's [%] sales charge. If sales charges were included, total returns would have been lower.

3. The Morningstar Category Average is the average return for the peer group based on the returns of each individual fund within the group, for the period shown. This average assumes reinvestment of dividends.

4. This chart illustrates the performance of a hypothetical $10,000 investment made in this investment product (and a benchmark or category average, if shown) from the beginning date shown or on the inception date of the product (whichever is later). The inception date used for products with underlying funds, or multiple shares classes, or are offered as a separate account, strategy or sub account, may be the inception date of the underlying fund, the earliest share class of the product, or the date composite performance for the product was first made available. The product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Benchmark returns include reinvestment of capital gains and dividends, if any, but do not reflect any fees or expenses. It is not possible to invest in an index. Past performance is no guarantee of future results. This chart is not intended to imply any future performance of the investment product.

5. Initial minimum investments into group retirement accounts such as Fidelity Simplified Employee Pension-IRA, Keogh, Self-Employed 401(k), and Non-Fidelity Prototype Retirement accounts are $500 or higher. There is no minimum for additional investments in any type of Fidelity fund you already own.

6. A standard yield calculation developed by the Securities and Exchange Commission for bond funds. The yield is calculated by dividing the net investment income per share earned during the 30-day period by the maximum offering price per share on the last day of the period. The yield figure reflects the dividends and interest earned during the 30-day period, after the deduction of the fund's expenses. It is sometimes referred to as "SEC 30-Day Yield" or "standardized yield".

7. Any holdings, asset allocation, diversification breakdowns or other composition data shown are as of the date indicated and are subject to change at any time. They may not be representative of the fund's current or future investments. The Top Ten holdings do not include money market instruments or futures contracts, if any. Depository receipts are normally combined with the underlying security. Some breakdowns may be intentionally limited to a particular asset class or other subset of the fund's entire portfolio, particularly in multi-asset class funds where the attributes of the equity and fixed income portions are different.

Under the asset allocation section, international (or foreign) assets may be reported differently depending on how an investment option reports its holdings. Some do not report international (or foreign) holdings here, but instead report them in a "Regional Diversification" section. Some report them in this section in addition to the equity, bond and other allocation shown. Others report international (or foreign) holding as a subset of the equity and bond allocations shown. If the allocation without the foreign component equals (or rounds to) 100%, then international (or foreign) is a subset of the equity and bond percentage shown.

8. Percent Rank in Category is the fund's total-return percentile rank relative to all funds that have the same Morningstar Category. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100. The top-performing fund in a category will always receive a rank of 1. % Rank in Category is based on total returns which include reinvested dividends and capital gains, if any, and exclude sales charges.

9. Credit ratings for a rated issuer or security are categorized using Moody's Investors Service (Moody's). If Moody's does not publish a rating for a security or issuer, then the Standard & Poor's Ratings Services (S&P) rating is used. When S&P and Moody's provide different ratings for the same issuer or security, the Moody's rating is used. If neither Moody's nor S&P publishes a rating on the issuer or security, then the security is categorized as Not Rated. All U.S. government securities are included in the U.S. Government category. The table information is based on the combined investments of the fund and its pro rata share of any investments in other Fidelity funds.

10. Fidelity may deduct a small balance maintenance fee of $12.00 from a fund balance with a value less than $2,000. Fund positions opened after September 30 will not be subject to the fee for that calendar year. This fee will not be deducted from fund positions opened after January 1 of that calendar year if those positions use regular investment plans. Refer to the fund prospectus for details.

Generally, data on Fidelity mutual funds is provided by FMR, LLC, Morningstar ratings and data on non-Fidelity mutual funds is provided by Morningstar, Inc. and data on non-mutual fund products is provided by the product's investment manager, trustee or issuer or the plan sponsor whose plan is offering the product to participants. Although Fidelity believes the data gathered from these third-party sources is reliable, it does not review such information and cannot warrant it to be accurate, complete or timely. Fidelity is not responsible for any damages or losses arising from any use of this third-party information.

Before investing, consider the investment objectives, risks, charges and expenses of the fund or annuity and its investment options. Contact Fidelity for a free prospectus and, if available, summary prospectus containing this information. Read it carefully.