Fidelity Global Small Cap Fund

Transcription

1 Fidelity Global Small Cap Fund nnual Management Report of Fund Performance March 31, 2016

2 Caution Regarding Forward-looking Statements Certain portions of this report, including, but not limited to, Results of Operations and Recent Developments, may contain forward-looking statements about the Fund, including its strategy, risks, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates and similar forward-looking expressions or negative versions thereof. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. ccordingly, assumptions concerning future economic and other factors may prove to be incorrect at a future date. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Fund. ny number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North merica and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. It should be stressed that the above-mentioned list of important factors is not exhaustive. You are encouraged to consider these and other factors carefully before making any investment decisions and you are urged to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Report of Fund Performance.

3 nnual Management Report of Fund Performance as at March 31, 2016 Fidelity Global Small Cap Fund This annual management report of fund performance contains financial highlights but does not contain the complete annual financial statements for the investment fund. You can get a copy of the annual financial statements at your request, and at no cost, by calling , by writing to us at Fidelity Investments, 483 Bay St. Suite 300, Toronto ON M5G 2N7 or by visiting our website at or SEDR at Security holders may also contact us using one of these methods to request a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record or quarterly portfolio disclosure relating to the investment fund. Management Discussion of Fund Performance Investment Objective and Strategies Investment Objective: Fidelity Global Small Cap Fund (Fund) aims to achieve long-term capital growth by investing primarily in equity securities of small-capitalization companies located anywhere in the world. Strategies: The portfolio manager considers small companies to be those similar in size to the companies in the MSCI CWI (ll Country World Index) Small Cap Index. The portfolio manager generally diversifies the Fund s investments across different countries and regions. When buying and selling securities for the Fund, the portfolio manager examines each company s potential for success in light of its current financial condition, its industry position and economic and market conditions. The portfolio manager considers factors like growth potential, earnings estimates and quality of management. The Fund may also invest in medium and large companies anywhere in the world. It may hold cash and invest in fixed-income securities. Risk The risks associated with investing in the Fund remain as discussed in the prospectus. ny changes to the Fund over the period have not affected the overall level of risk of the Fund. The Fund is suitable for long-term investors who want to gain exposure to global small-capitalization companies and can handle the volatility of returns generally associated with equity investments in small companies and who are willing to accept a medium to high level of risk. The suitability of the investment has not changed from what has been disclosed in the prospectus. Results of Operations Fidelity Global Small Cap Fund, Series B, returned -4.8%, after fees and expenses, for the past one-year period ended March 31, The net returns of the other series of this Fund are similar to those of Series B, except for differences attributable to expense structures. Global equities, as broadly measured by the MSCI World Index, returned -1.4%, in Canadian dollar terms, for the review period. Market overview: Global equities fell during the period amid concerns about the economic slowdown in China and the implications it would have for global growth. sian markets were the worst-performing markets; investors were worried about China s slowing economy and rising prospects of an increase in U.S. interest rates. European markets followed global equity markets, registering negative returns during the review period. The U.S. was among the best-performing markets, registering a positive return supported by strong corporate earnings and positive economic data. Factors affecting performance: The Fund s benchmark, the MSCI CWI (ll Country World Index) Small Cap Index, returned -2.5% (in Canadian dollar terms) for the one-year period under review. Before fees and expenses, the Fund performed in line with the benchmark. However, after fees and expenses, the Fund underperformed the benchmark. The Fund s investments in the energy sector, specifically in Japanese oil and gas company San-i Oil, contributed to relative performance. In addition, exposure to health care contributed to performance, specifically positions in Bruker, which manufactures scientific instruments, and Swedish Orphan Biovitrum, a specialty health care company. Other notable contributions to performance during the review period came from industrials company Regus and information technology company Constellation Software. In contrast, the Fund s investments in the financials and industrials sectors detracted from relative performance. Specifically, its investment in U.S.-based real estate firm Jones Lang LaSalle and Howard Hughes Corporation detracted. In industrials, exposure to Japanese transportation company, Kintetsu World Express detracted from relative performance. Other holdings that detracted from relative performance included biopharmaceutical firm Medivation, packing company Nampak and oil and natural gas exploration & production company Whiting Petroleum. The Fund did not have any exposure to Whiting Petroleum at the end of the review period. Portfolio changes: 1

4 Fidelity Global Small Cap Fund Management Discussion of Fund Performance continued During the period under review, portfolio manager Rob Feldman increased the Fund s exposure to the consumer staples sector. In particular, the portfolio manager initiated positions in several food companies, based on a combination of quality and valuation. The manager believes that these companies may offer more consistent returns, because the businesses tend to be less economically sensitive. In contrast, the Fund s exposure to information technology and industrials companies was decreased. The Fund eliminated its exposure to PTC and reduced its exposure to Constellation Software after the stocks outperformed the broader sector and their valuations accordingly became less attractive. Exposure to semiconductor companies was also reduced after the manager grew more cautious on the industry s earnings outlook. In industrials, exposure to transportation companies, such as laska ir Group, was reduced, due to the cyclical nature of the industry and concerns that fundamentals had weakened. In terms of country allocation, exposure to Hong Kong was increased during the period, while exposure to the U.S. was reduced. This was a result of the portfolio manager s bottom-up stock-selection process rather than top-down macro calls. Recent Developments Mr. Feldman remains optimistic about the potential of small-cap stocks to provide diversification and attractive returns. He believes that the valuations of small-cap securities are more attractive than those of large-cap securities. Mr. Feldman believes that the global small-cap segment is inefficient and under-researched; as a result, with sufficient research resources, he believes it is possible to find attractively priced stocks in all parts of the market cycle. In addition, he believes that small-cap companies are more exposed to local markets and local factors, and so may be insulated, to some degree, from broader market forces. s at March 31, 2016, the Fund had its largest absolute exposure to the financials sector, followed by the industrials sector. The Fund diverged most from the benchmark weightings by having more exposure to the telecommunication services sector and less to the materials sector. In terms of country allocation, the U.S. accounted for the largest absolute exposure, followed by Japan. 2

5 Related Party Transactions Manager and Portfolio dviser The Fund is managed by Fidelity Investments Canada ULC (Fidelity). Fidelity is part of a broader group of companies collectively known as Fidelity Investments. Fidelity provides or arranges for the provision of all general management and administrative services required by the Fund in its day to day operations, bookkeeping, record keeping and other administrative services for the Fund. Fidelity provides investment advice to the Fund. Fidelity has entered into a sub-advisory agreement with Fidelity Institutional sset Management Trust Company, an affiliate of Fidelity, to provide investment advice with respect to all or a portion of the investments of the Fund. Fidelity provides investment advice with respect to the Fund s investment portfolio and arranges for the acquisition and disposition of portfolio investments, including all necessary brokerage arrangements. The Fund pays Fidelity a monthly management and advisory fee for their services, based on the net asset value of each Series, calculated daily and payable monthly. The Fund paid Fidelity management and advisory fees of $182,000 for the period ended March 31, dministration Fee Fidelity charges the Fund a fixed administration fee in place of certain variable expenses. Fidelity, in turn, pays all of the operating expenses of the Fund, other than certain specified fund costs (e.g. the fees and expenses of the Independent Review Committee, taxes, brokerage commissions and interest charges). The Fund pays an annual rate, which is calculated on a tiered basis, based on the net asset value of each Series, calculated daily and payable monthly. The Fund paid Fidelity administration fees of $30,000 for the period ended March 31, Brokerage Commissions The Fund may place a portion of its portfolio transactions with brokerage firms which are affiliates of Fidelity, including National Financial Services LLC, provided it determines that these affiliates trade execution abilities and costs are comparable to those of non affiliated, qualified brokerage firms, on an execution only basis. Commissions paid to brokerage firms that are affiliates of Fidelity were $0 for the period ended March 31, Fidelity receives standing instructions from the IRC in respect of policies and procedures governing best execution of transactions with affiliates, which includes brokers affiliated to Fidelity, at least once per year. 3

6 Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the period end of the years shown. This information is derived from the Fund s audited annual and/or unaudited semi-annual financial statements. Please see the front page for information about how you can obtain the Fund s annual or semi-annual financial statements. Fidelity Global Small Cap Fund Series Periods ended March 31, The Series Net ssets per Unit B Net assets, beginning of period C $ $ $ $ $ Increase (decrease) from operations: Total revenue Total expenses (excluding distributions) (.4501) (.4008) (.3594) (.2565) (.2429) Realized gains (losses) (.1833) (.2301) Unrealized gains (losses) (2.5418) (.1311) Total increase (decrease) from operations C (.7016) (.4605) Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions C,D Net assets, end of period C $ $ $ $ $ Ratios and Supplemental Data Net asset value (000s) E $ 3,738 $ 5,506 $ 6,271 $ 3,840 $ 2,553 Units outstanding E 244, , , , ,295 Management expense ratio F 2.58% 2.64% 2.68% 2.69% 2.70% Management expense ratio before waivers or absorptions F 2.64% 2.67% 2.68% 2.69% 2.70% Trading expense ratio G.05%.07%.10%.12%.26% Portfolio turnover rate H 27% 22% 36% 46% 41% Net asset value per unit, end of period $ $ $ $ $ For the period March 25, 2011 (inception date) to March 31, B This information is derived from the Fund s audited annual and/or unaudited interim financial statements. Periods beginning on or after January 1, 2013 follow International Financial Reporting Standards (IFRS) and periods prior to January 1, 2013 follow Canadian Generally ccepted ccounting Principles (Canadian GP). The net assets attributable to holders of redeemable units per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. n explanation of these differences can be found in the notes to financial statements. C Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. D Distributions were paid in cash or reinvested in additional units of the Fund, or both, and excludes distributions of management fee reductions to unitholders. Distributions are presented based on management s best estimate of the tax character. E This information is provided as at period end of the year shown. F Management expense ratio is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset values during the period, including the Fund s pro-rata share of estimated expenses incurred in any underlying investment fund, if applicable. Effective November 1, 2014, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. 4

7 Fidelity Global Small Cap Fund Series B Periods ended March 31, The Series Net ssets per Unit B Net assets, beginning of period C $ $ $ $ $ Increase (decrease) from operations: Total revenue Total expenses (excluding distributions) (.4015) (.3622) (.3235) (.2289) (.2220) Realized gains (losses) (.1943) (.2388) Unrealized gains (losses) (2.7493) (.0947) Total increase (decrease) from operations C (.8337) (.4117) Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions C,D Net assets, end of period C $ $ $ $ $ Ratios and Supplemental Data Net asset value (000s) E $ 4,051 $ 5,741 $ 6,935 $ 4,232 $ 2,980 Units outstanding E 263, , , , ,686 Management expense ratio F 2.39% 2.43% 2.45% 2.47% 2.47% Management expense ratio before waivers or absorptions F 2.43% 2.44% 2.45% 2.47% 2.47% Trading expense ratio G.05%.07%.10%.12%.26% Portfolio turnover rate H 27% 22% 36% 46% 41% Net asset value per unit, end of period $ $ $ $ $ For the period March 25, 2011(inception date) to March 31, B This information is derived from the Fund s audited annual and/or unaudited interim financial statements. Periods beginning on or after January 1, 2013 follow International Financial Reporting Standards (IFRS) and periods prior to January 1, 2013 follow Canadian Generally ccepted ccounting Principles (Canadian GP). The net assets attributable to holders of redeemable units per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. n explanation of these differences can be found in the notes to financial statements. C Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. D Distributions were paid in cash or reinvested in additional units of the Fund, or both, and excludes distributions of management fee reductions to unitholders. Distributions are presented based on management s best estimate of the tax character. E This information is provided as at period end of the year shown. F Management expense ratio is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset values during the period, including the Fund s pro-rata share of estimated expenses incurred in any underlying investment fund, if applicable. Effective November 1, 2014, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. 5

8 Financial Highlights continued Fidelity Global Small Cap Fund Series F Periods ended March 31, The Series Net ssets per Unit B Net assets, beginning of period C $ $ $ $ $ Increase (decrease) from operations: Total revenue Total expenses (excluding distributions) (.2367) (.2052) (.1805) (.1226) (.1112) Realized gains (losses) (.2618) Unrealized gains (losses) (3.3629) Total increase (decrease) from operations C (1.1425) (.0998) Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions C,D Net assets, end of period C $ $ $ $ $ Ratios and Supplemental Data Net asset value (000s) E $ 409 $ 728 $ 586 $ 35 $ 10 Units outstanding E 24,911 42,665 40,335 3,025 1,000 Management expense ratio F 1.23% 1.20% 1.22% 1.23% 1.23% Management expense ratio before waivers or absorptions F 1.23% 1.20% 1.22% 1.23% 1.23% Trading expense ratio G.05%.07%.10%.12%.26% Portfolio turnover rate H 27% 22% 36% 46% 41% Net asset value per unit, end of period $ $ $ $ $ For the period March 25, 2011(inception date) to March 31, B This information is derived from the Fund s audited annual and/or unaudited interim financial statements. Periods beginning on or after January 1, 2013 follow International Financial Reporting Standards (IFRS) and periods prior to January 1, 2013 follow Canadian Generally ccepted ccounting Principles (Canadian GP). The net assets attributable to holders of redeemable units per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. n explanation of these differences can be found in the notes to financial statements. C Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. D Distributions were paid in cash or reinvested in additional units of the Fund, or both, and excludes distributions of management fee reductions to unitholders. Distributions are presented based on management s best estimate of the tax character. E This information is provided as at period end of the year shown. F Management expense ratio is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset values during the period, including the Fund s pro-rata share of estimated expenses incurred in any underlying investment fund, if applicable. Effective November 1, 2014, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. 6

9 Fidelity Global Small Cap Fund Series O Periods ended March 31, The Series Net ssets per Unit B Net assets, beginning of period C $ $ $ $ $ Increase (decrease) from operations: Total revenue Total expenses (excluding distributions) (.0377) (.0343) (.0285) Realized gains (losses) (.1749) (.2851) Unrealized gains (losses) (3.1879) Total increase (decrease) from operations C (.7623) Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions C,D Net assets, end of period C $ $ $ $ $ Ratios and Supplemental Data Net asset value (000s) E $ 2,846 $ 2,346 $ 2,434 $ 887 $ 690 Units outstanding E 158, , ,245 75,913 70,594 Management expense ratio F % % % % % Management expense ratio before waivers or absorptions F % % % % % Trading expense ratio G.05%.07%.10%.12%.26% Portfolio turnover rate H 27% 22% 36% 46% 41% Net asset value per unit, end of period $ $ $ $ $ For the period March 25, 2011(inception date) to March 31, B This information is derived from the Fund s audited annual and/or unaudited interim financial statements. Periods beginning on or after January 1, 2013 follow International Financial Reporting Standards (IFRS) and periods prior to January 1, 2013 follow Canadian Generally ccepted ccounting Principles (Canadian GP). The net assets attributable to holders of redeemable units per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. n explanation of these differences can be found in the notes to financial statements. C Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. D Distributions were paid in cash or reinvested in additional units of the Fund, or both. Distributions are presented based on management s best estimate of the tax character. E This information is provided as at period end of the year shown. F No fees are charged to the Series, but investors may be charged a negotiated management fee. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. 7

10 Financial Highlights continued Fidelity Global Small Cap Fund Series E1 Periods ended March 31, 2016 The Series Net ssets per Unit B Net assets, beginning of period C $ Increase (decrease) from operations: Total revenue.0371 Total expenses (excluding distributions) (.0413) Realized gains (losses).0079 Unrealized gains (losses).9457 Total increase (decrease) from operations C.9494 Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions C,D Net assets, end of period C $ Ratios and Supplemental Data Net asset value (000s) E $ 575 Units outstanding E 42,962 Management expense ratio F 2.31% Management expense ratio before waivers or absorptions F 2.35% Trading expense ratio G.05% Portfolio turnover rate H 27% Net asset value per unit, end of period $ For the period February 5, 2016 (commencement of sale of units) to March 31, B This information is derived from the Fund s audited annual and/or unaudited interim financial statements. The net assets attributable to holders of redeemable units per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. n explanation of these differences can be found in the notes to financial statements. C Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. D Distributions were paid in cash or reinvested in additional units of the Fund, or both, and excludes distributions of management fee reductions to unitholders. Distributions are presented based on management s best estimate of the tax character. E This information is provided as at period end of the year shown. F Management expense ratio is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset values during the period, including the Fund s pro-rata share of estimated expenses incurred in any underlying investment fund, if applicable. Effective February 9, 2016, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. 8

11 Fidelity Global Small Cap Fund Series E2 Periods ended March 31, 2016 The Series Net ssets per Unit B Net assets, beginning of period C $ Increase (decrease) from operations: Total revenue.0380 Total expenses (excluding distributions) (.0361) Realized gains (losses).0167 Unrealized gains (losses).5926 Total increase (decrease) from operations C.6112 Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions C,D Net assets, end of period C $ Ratios and Supplemental Data Net asset value (000s) E $ 60 Units outstanding E 5,720 Management expense ratio F 2.24% Management expense ratio before waivers or absorptions F 2.29% Trading expense ratio G.05% Portfolio turnover rate H 27% Net asset value per unit, end of period $ For the period February 5, 2016 (commencement of sale of units) to March 31, B This information is derived from the Fund s audited annual and/or unaudited interim financial statements. The net assets attributable to holders of redeemable units per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. n explanation of these differences can be found in the notes to financial statements. C Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. D Distributions were paid in cash or reinvested in additional units of the Fund, or both, and excludes distributions of management fee reductions to unitholders. Distributions are presented based on management s best estimate of the tax character. E This information is provided as at period end of the year shown. F Management expense ratio is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset values during the period, including the Fund s pro-rata share of estimated expenses incurred in any underlying investment fund, if applicable. Effective February 9, 2016, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. 9

12 Financial Highlights continued Fidelity Global Small Cap Fund Series P1 Periods ended March 31, 2016 The Series Net ssets per Unit B Net assets, beginning of period C $ Increase (decrease) from operations: Total revenue.0577 Total expenses (excluding distributions) (.0401) Realized gains (losses).0443 Unrealized gains (losses).5292 Total increase (decrease) from operations C.5911 Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions C,D Net assets, end of period C $ Ratios and Supplemental Data Net asset value (000s) E $ 89 Units outstanding E 9,791 Management expense ratio F 1.15% Management expense ratio before waivers or absorptions F 1.15% Trading expense ratio G.05% Portfolio turnover rate H 27% Net asset value per unit, end of period $ For the period December 4, 2015 (commencement of sale of units) to March 31, B This information is derived from the Fund s audited annual and/or unaudited interim financial statements. The net assets attributable to holders of redeemable units per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. n explanation of these differences can be found in the notes to financial statements. C Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. D Distributions were paid in cash or reinvested in additional units of the Fund, or both, and excludes distributions of management fee reductions to unitholders. Distributions are presented based on management s best estimate of the tax character. E This information is provided as at period end of the year shown. F Management expense ratio is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset values during the period, including the Fund s pro-rata share of estimated expenses incurred in any underlying investment fund, if applicable. Effective December 8, 2015, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. 10

13 Fidelity Global Small Cap Fund Series P2 Periods ended March 31, 2016 The Series Net ssets per Unit B Net assets, beginning of period C $ Increase (decrease) from operations: Total revenue.0400 Total expenses (excluding distributions) (.0200) Realized gains (losses).1500 Unrealized gains (losses) (1.0700) Total increase (decrease) from operations C (.9000) Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions C,D Net assets, end of period C $ Ratios and Supplemental Data Net asset value (000s) E $ 1 Units outstanding E 100 Management expense ratio F.90% Management expense ratio before waivers or absorptions F.90% Trading expense ratio G.05% Portfolio turnover rate H 27% Net asset value per unit, end of period $ For the period December 4, 2015 (commencement of sale of units) to March 31, B This information is derived from the Fund s audited annual and/or unaudited interim financial statements. The net assets attributable to holders of redeemable units per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. n explanation of these differences can be found in the notes to financial statements. C Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. D Distributions were paid in cash or reinvested in additional units of the Fund, or both, and excludes distributions of management fee reductions to unitholders. Distributions are presented based on management s best estimate of the tax character. E This information is provided as at period end of the year shown. F Management expense ratio is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset values during the period, including the Fund s pro-rata share of estimated expenses incurred in any underlying investment fund, if applicable. Effective December 8, 2015, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. 11

14 Financial Highlights continued Fidelity Global Small Cap Fund Series P3 Periods ended March 31, 2016 The Series Net ssets per Unit B Net assets, beginning of period C $ Increase (decrease) from operations: Total revenue.0400 Total expenses (excluding distributions) (.0200) Realized gains (losses).1500 Unrealized gains (losses) (1.0700) Total increase (decrease) from operations C (.9000) Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions C,D Net assets, end of period C $ Ratios and Supplemental Data Net asset value (000s) E $ 1 Units outstanding E 100 Management expense ratio F.90% Management expense ratio before waivers or absorptions F.90% Trading expense ratio G.05% Portfolio turnover rate H 27% Net asset value per unit, end of period $ For the period December 4, 2015 (commencement of sale of units) to March 31, B This information is derived from the Fund s audited annual and/or unaudited interim financial statements. The net assets attributable to holders of redeemable units per unit presented in the financial statements may differ from the net asset value calculated for fund pricing purposes. n explanation of these differences can be found in the notes to financial statements. C Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations is based on the weighted average number of units outstanding over the financial period. This table is not intended to be a reconciliation of beginning to ending net assets per unit. D Distributions were paid in cash or reinvested in additional units of the Fund, or both, and excludes distributions of management fee reductions to unitholders. Distributions are presented based on management s best estimate of the tax character. E This information is provided as at period end of the year shown. F Management expense ratio is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period and is expressed as an annualized percentage of daily average net asset values during the period, including the Fund s pro-rata share of estimated expenses incurred in any underlying investment fund, if applicable. Effective December 8, 2015, the manager of the Fund has waived a portion of its administration fee and as of the date of the MRFP has continued to provide the Fund with such waivers. The manager may terminate the waiver at any time, at its sole discretion. It is not known when such waivers will be terminated. G The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net asset value during the period, including the Fund s pro-rata share of estimated trading costs incurred in any underlying investment fund, if applicable. H The Fund s portfolio turnover rate indicates how actively the Fund s portfolio adviser manages its portfolio investments. portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the year. The higher the Fund s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of the Fund. The portfolio turnover rate is calculated based on the lesser of purchases or sales of securities divided by the weighted average market value of the portfolio securities, excluding short-term securities. 12

15 Management and dvisory Fees Fidelity serves as manager and investment advisor of the Fund. The Fund pays Fidelity a monthly management and advisory fee for their services, based on the net asset value of each Series, calculated daily and payable monthly. Fidelity uses these management fees to pay for sales and trailing commissions to registered dealers on the distribution of the Fund units, as well as for the general investment management expenses. Dealer compensation represents cash commissions paid by Fidelity to registered dealers during the period and includes upfront deferred sales charge and trailing commissions. This amount may, in certain circumstances, exceed 100% of the fees earned by Fidelity during the period. For new Classes/Funds or Series the amounts presented may not be indicative of longer term operating periods. Management Fees Dealer Compensation Investment management, administration and other Series 2.000% 60.26% 39.74% Series B 1.850% 54.05% 45.95% Series F 0.850% % Series E % 54.79% 45.21% Series E % 55.56% 44.44% Series P % % Series P % % Series P % % 13

16 Fidelity Global Small Cap Fund Past Performance The performance information shown assumes that all distributions made by the Fund in the periods shown were reinvested in additional securities of the Fund. The performance information does not take into account sales, redemption, distribution or other optional charges that would have reduced returns or performance. How the Fund has performed in the past does not necessarily indicate how it will perform in the future. Year-by-Year Returns The following bar chart shows the Fund s annual performance for each of the years shown, and illustrates how the Fund s performance was changed from year to year. In percentage terms, the bar chart shows how much an investment made on the first day of each financial year would have grown or decreased by the last day of each financial year. Series Fiscal Years Percentage (%) Since the Commencement of Operations, from pril 4, 2011 to March 31, Series B Fiscal Years Percentage (%) Since the Commencement of Operations, from pril 4, 2011 to March 31, Series F Fiscal Years Percentage (%) Since the Commencement of Operations, from pril 4, 2011 to March 31,

17 Series O Fiscal Years Percentage (%) Since the Commencement of Operations, from pril 4, 2011 to March 31, Series E1 Fiscal Years 2016 Percentage (%) Since the Commencement of Operations, from February 5, 2016 to March 31, Series E2 Fiscal Years 2016 Percentage (%) Since the Commencement of Operations, from February 5, 2016 to March 31,

18 Fidelity Global Small Cap Fund Past Performance continued Series P1 Fiscal Years Percentage (%) Since the Commencement of Operations, from December 4, 2015 to March 31, Series P2 Fiscal Years Percentage (%) Since the Commencement of Operations, from December 4, 2015 to March 31, Series P3 Fiscal Years Percentage (%) Since the Commencement of Operations, from December 4, 2015 to March 31, nnual Compound Returns This table shows the Fund s historical annual compound total returns for the periods indicated, compared with a broad-based index, the MSCI World Index, and the Fund s benchmark, the MSCI CWI (ll Country World Index) Small Cap Index. verage nnual Total Returns Past 1 year Past 3 years Since Inception Fidelity Global Small Cap Fund Series (4.9)% 11.3% 8.9% Fidelity Global Small Cap Fund Series B (4.8)% 11.6% 9.1% Fidelity Global Small Cap Fund Series F (3.7)% 12.9% 10.5% Fidelity Global Small Cap Fund Series O (2.5)% 14.3% 11.8% 16

19 verage nnual Total Returns year years Inception Fidelity Global Small Cap Fund Series E1 n/a n/a 5.1% Fidelity Global Small Cap Fund Series E2 n/a n/a 5.2% Fidelity Global Small Cap Fund Series P1 n/a n/a (9.1)% Fidelity Global Small Cap Fund Series P2 n/a n/a (9.0)% Fidelity Global Small Cap Fund Series P3 n/a n/a (9.0)% MSCI CWI (ll Country World Index) Small Cap Index (2.5)% 14.9% 11.5% MSCI World Index (1.4)% 15.8% 12.7% The period used for the since inception MSCI CWI (ll Country World Index) Small Cap Index and MSCI World Index returns are based on Series B which has been in existence the longest compared to all Series with less than 10 years of operations. Fidelity Global Small Cap Fund, Series B, underperformed the broad global equity markets, as represented by the MSCI World Index, for the oneyear review period. Global equities, as broadly measured by the MSCI World Index, returned -1.4%, in Canadian dollar terms, for the review period. Global equities fell during the period amid concerns about the economic slowdown in China and the implications it would have for global growth. sian markets were the worst-performing markets; investors were worried about China s slowing economy and rising prospects of an increase in U.S. interest rates. European markets followed global equity markets, registering negative returns during the review period. The U.S. was among the bestperforming markets, registering a positive return supported by strong corporate earnings and positive economic data. The Fund s benchmark, the MSCI CWI (ll Country World Index) Small Cap Index, returned -2.5% (in Canadian dollar terms) for the one-year period under review. Before fees and expenses, the Fund performed in line with the benchmark. However, after fees and expenses, the Fund underperformed the benchmark. The Fund s investments in the energy sector, specifically in Japanese oil and gas company San-i Oil, contributed to relative performance. In addition, exposure to health care contributed to performance, specifically positions in Bruker, which manufactures scientific instruments, and Swedish Orphan Biovitrum, a specialty health care company. Other notable contributions to performance during the review period came from industrials company Regus and information technology company Constellation Software. In contrast, the Fund s investments in the financials and industrials sectors detracted from relative performance. Specifically, its investment in U.S.-based real estate firm Jones Lang LaSalle and Howard Hughes Corporation detracted. In industrials, exposure to a Japanese transportation company detracted from relative performance. Other holdings that detracted from relative performance included biopharmaceutical firm Medivation, packing company Nampak and oil and natural gas exploration & production company Whiting Petroleum. The Fund did not have any exposure to Whiting Petroleum at the end of the review period. The MSCI CWI (ll Country World Index) Small Cap Index is an unmanaged, free float-adjusted, market capitalization-weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure small-capitalization equity market performance in global developed and emerging markets. The MSCI World Index is a market capitalization-weighted index composed of companies representative of the market structure of developed market countries in North merica, Europe and the sia-pacific region. Each Series will have different returns due to differences in management fees and expenses. Past 1 Past 3 Since 17

20 Fidelity Global Small Cap Fund Summary of Investment Portfolio as at March 31, 2016 Sector Mix % of Fund s Net ssets Financials 23.4 Industrials 16.0 Information Technology 14.7 Consumer Discretionary 14.3 Health Care 11.0 Consumer Staples 6.2 Materials 5.7 Energy 3.9 Utilities 2.9 Telecommunication Services 2.6 Cash and Cash Equivalents 0.5 Net Other ssets (Liabilities) (1.2) Market Capitalization % of Net ssets Large 1.0 Mid 64.8 Small 33.3 Market Capitalization is a measure of the size of a company. It is calculated by multiplying the current share price by the number of outstanding common shares of the company. The Fund defines small cap as less than $2 billion, mid cap as between $2 billion and $10 billion, and large cap as over $10 billion in capitalization. Geographic Mix % of Fund s Net ssets United States of merica 52.3 Japan 10.1 United Kingdom 6.0 ustralia 2.7 Spain 2.2 Canada 2.0 Ireland 1.7 Hong Kong 1.7 Bailiwick of Jersey 1.6 Bermuda 1.5 Finland 1.5 Netherlands 1.4 Turkey 1.4 Luxembourg 1.4 France 1.3 Israel 1.3 Korea (South) 1.2 ustria 1.1 Cayman Islands 1.1 South frica 1.1 Others (Individually Less Than 1%) 6.1 Cash and Cash Equivalents 0.5 Net Other ssets (Liabilities) (1.2) 18