Fidelity Emerging Markets Fund

Transcription

1 Fidelity Emerging Markets 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 Emerging Markets 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 Emerging Markets Fund (Fund) aims to achieve high total investment return by investing primarily in equity securities of companies in emerging market countries. Strategies: The Fund s investments are normally diversified across different emerging markets. 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 invest in small, medium and large companies and may hold cash and invest in fixed-income securities. Risk The risks associated with investing in this 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 wanting to gain exposure to companies in emerging markets and who can handle the volatility generally associated with equity investments. To invest in this Fund, investors should be willing to accept a high level of risk. The suitability of the investment has not changed from what has been disclosed in the prospectus. Results of Operations Fidelity Emerging Markets Fund, Series B, returned -9.6%, after fees and expenses, for the 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. The MSCI World Index, broadly representative of global equities, returned -1.4%, in Canadian dollar terms, for the review period. The Fund s benchmark, the MSCI Emerging Markets Index, returned -9.8% for the period under review. Global equities fell amid concerns about the economic slowdown in China and the implications it would have for global growth. European markets followed global equity markets, registering negative returns during the review period. U.S. equities performed better, registering a positive return, supported by positive economic data and corporate earnings that generally surpassed investor expectations. Emerging markets fell as weakness in commodity prices and the slowing growth in China weighed on their equity markets. fter fees and expenses, the Fund performed in line with its benchmark; however, before fees and expenses, the Fund outperformed its benchmark. Investments in industrials sector stocks such as Mexican airport developer and operator Grupo eroportuario and Thailand-based irports of Thailand contributed to relative performance. Having less exposure to Chinese stocks than the benchmark contributed to relative performance, after Chinese equity markets fell over the period. Having more exposure to U.S. equities than the benchmark also contributed to relative performance; U.S. stocks fared well over the period. In contrast, exposure to the consumer discretionary sector detracted, with Indonesian media firm Media Nusantara Citra and Indonesian automotive firm stra International making some of the top detractions from returns. t the end of the review period, the Fund did not have any exposure to these two stocks. mong individual holdings, notable detractions were made by Indian business technology and IT solutions company Infosys and Indian pharmaceutical company Lupin. During the one-year period, exposure to the consumer staples sector was increased by initiating positions in South Korea-based firms such as cosmetics manufacturer MOREPCIFIC and household goods and cosmetics manufacturer LG Household & Health Care, owing to their attractive valuations. In contrast, exposure to the financials sector was reduced, particularly to banks, because slowing growth in emerging markets has put pressure on banks. 1

4 Fidelity Emerging Markets Fund Management Discussion of Fund Performance continued t the country level, exposure to the U.S. and India was increased. Country-level allocations are a result of the portfolio manager s bottom-up stock selection process and are not driven by top-down macro calls. During the review period, the Fund s assets increased from $306 million to $744 million. The increase in assets was primarily attributable to strong investment flows from other Fidelity multi-asset class solutions, that invest a portion of their assets in Fidelity Emerging Markets Fund. The impact of these flows on the Fund was largely mitigated by the execution of planned and orderly transactions. Recent Developments Portfolio manager Sammy Simnegar continues to focus on companies with potential for growth, good management teams and dominant market share, and who operate in industries with high barriers to entry. Mr. Simnegar believes that emerging markets will continue to remain volatile in the near term as a result of lower prices for commodities and uncertainty regarding global growth. He currently favours countries, such as India, that are embarking on significant structural reforms. He is relatively cautious about heavily resource-focused countries, such as Russia and Brazil, that can be hurt by falling commodity prices. t the sector level, the Fund had its largest exposure to information technology, followed by financials. The Fund diverged most from the benchmark sector weightings by having less exposure to the financials sector and more exposure to the health care sector. 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 Management & Research (UK) Inc., 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 $705,000 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 $110,000 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 $1,000 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 Emerging Markets Fund Series Periods ended March 31, The Series Net ssets per Unit Net assets, beginning of period B $ $ $ $ $ Increase (decrease) from operations: Total revenue Total expenses (excluding distributions) (.4461) (.5395) (.4639) (.3297) (.3495) Realized gains (losses) (.3861) (.0079) (.4318) Unrealized gains (losses) (.9949) (1.2127) (1.3512) Total increase (decrease) from operations B (1.5864) (.1513) (1.7798) Distributions: From net investment income (excluding dividends) From dividends From capital gains Return of capital Total distributions B,C Net assets, end of period B $ $ $ $ $ Ratios and Supplemental Data Net asset value (000s) D $ 7,873 $ 11,869 $ 15,097 $ 22,459 $ 30,257 Units outstanding D 578, ,208 1,130,986 1,722,353 2,319,213 Management expense ratio E 2.56% 2.62% 2.67% 2.65% 2.63% Management expense ratio before waivers or absorptions E 2.63% 2.66% 2.67% 2.65% 2.63% Trading expense ratio F.52%.65%.70%.69%.60% Portfolio turnover rate G 89% 144% 197% 187% 157% Net asset value per unit, end of period $ $ $ $ $ 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. B 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. C 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. D This information is provided as at period end of the year shown. E 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. F 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. G 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 Emerging Markets Fund Series B Periods ended March 31, The Series Net ssets per Unit Net assets, beginning of period B $ $ $ $ $ Increase (decrease) from operations: Total revenue Total expenses (excluding distributions) (.4246) (.5179) (.4375) (.3045) (.3223) Realized gains (losses) (.4049) (.0286) (.4370) Unrealized gains (losses) (.9851) (1.2188) (1.3159) Total increase (decrease) from operations B (1.5692) (.0681) (1.7210) Distributions: From net investment income (excluding dividends) (.0207) From dividends (.0122) (.0026) From capital gains Return of capital Total distributions B,C (.0122) (.0233) Net assets, end of period B $ $ $ $ $ Ratios and Supplemental Data Net asset value (000s) D $ 22,985 $ 30,241 $ 30,190 $ 35,079 $ 39,293 Units outstanding D 1,647,800 1,958,279 2,216,760 2,646,388 2,966,792 Management expense ratio E 2.36% 2.40% 2.44% 2.43% 2.41% Management expense ratio before waivers or absorptions E 2.41% 2.43% 2.44% 2.43% 2.41% Trading expense ratio F.52%.65%.70%.69%.60% Portfolio turnover rate G 89% 144% 197% 187% 157% Net asset value per unit, end of period $ $ $ $ $ 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. B 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. C 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. D This information is provided as at period end of the year shown. E 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. F 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. G 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 Emerging Markets Fund Series F Periods ended March 31, The Series Net ssets per Unit Net assets, beginning of period B $ $ $ $ $ Increase (decrease) from operations: Total revenue Total expenses (excluding distributions) (.3033) (.4117) (.3106) (.1805) (.1929) Realized gains (losses) (.4673) (.0263) (.5070) Unrealized gains (losses) (1.0623) (1.3201) (1.5709) Total increase (decrease) from operations B (1.5515) (1.8717) Distributions: From net investment income (excluding dividends) (.1573) From dividends (.1761) (.0193) From capital gains Return of capital Total distributions B,C (.1761) (.1766) Net assets, end of period B $ $ $ $ $ Ratios and Supplemental Data Net asset value (000s) D $ 1,935 $ 2,349 $ 2,549 $ 1,435 $ 1,853 Units outstanding D 119, , ,762 96, ,071 Management expense ratio E 1.23% 1.28% 1.31% 1.29% 1.29% Management expense ratio before waivers or absorptions E 1.30% 1.31% 1.31% 1.29% 1.29% Trading expense ratio F.52%.65%.70%.69%.60% Portfolio turnover rate G 89% 144% 197% 187% 157% Net asset value per unit, end of period $ $ $ $ $ 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. B 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. C 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. D This information is provided as at period end of the year shown. E 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. F 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. G 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 Emerging Markets Fund Series O Periods ended March 31, The Series Net ssets per Unit Net assets, beginning of period B $ $ $ $ $ Increase (decrease) from operations: Total revenue Total expenses (excluding distributions) (.0917) (.1713) (.1213) Realized gains (losses) (.4857) (.1546) (.0021) (.4193) Unrealized gains (losses) (.2023) (1.0198) (1.1478) Total increase (decrease) from operations B (.5741) (1.2512) Distributions: From net investment income (excluding dividends) (.1540) (.0714) (.0959) (.2528) From dividends (.2934) (.0309) From capital gains Return of capital Total distributions B,C (.1540) (.0714) (.0959) (.2934) (.2837) Net assets, end of period B $ $ $ $ $ Ratios and Supplemental Data Net asset value (000s) D $ 619,463 $ 262,250 $ 48,340 $ 14,713 $ 22,294 Units outstanding D 54,038,014 18,254,697 3,900,412 1,235,188 1,873,257 Management expense ratio E % % % % % Management expense ratio before waivers or absorptions E % % % % % Trading expense ratio F.52%.65%.70%.69%.60% Portfolio turnover rate G 89% 144% 197% 187% 157% Net asset value per unit, end of period $ $ $ $ $ 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. B 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. C 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. D This information is provided as at period end of the year shown. E No fees are charged to the Series, but investors may be charged a negotiated management fee. F 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. G 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 Emerging Markets 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.0227 Total expenses (excluding distributions) (.0456) Realized gains (losses) (.0760) Unrealized gains (losses).7819 Total increase (decrease) from operations C.6830 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 $ 1,371 Units outstanding E 133,755 Management expense ratio F 2.28% Management expense ratio before waivers or absorptions F 2.33% Trading expense ratio G.52% Portfolio turnover rate H 89% 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 Emerging Markets 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.0221 Total expenses (excluding distributions) (.0462) Realized gains (losses) (.0835) Unrealized gains (losses).7963 Total increase (decrease) from operations C.6887 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 $ 110 Units outstanding E 10,679 Management expense ratio F 2.22% Management expense ratio before waivers or absorptions F 2.27% Trading expense ratio G.52% Portfolio turnover rate H 89% 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 Emerging Markets Fund Series E3 Periods ended March 31, 2016 The Series Net ssets per Unit B Net assets, beginning of period C $ Increase (decrease) from operations: Total revenue.0200 Total expenses (excluding distributions) (.0400) Realized gains (losses) (.0800) Unrealized gains (losses).3800 Total increase (decrease) from operations C.2800 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 2.06% Management expense ratio before waivers or absorptions F 2.48% Trading expense ratio G.52% Portfolio turnover rate H 89% 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. 10

13 Fidelity Emerging Markets Fund Series E4 Periods ended March 31, 2016 The Series Net ssets per Unit B Net assets, beginning of period C $ Increase (decrease) from operations: Total revenue.0200 Total expenses (excluding distributions) (.0400) Realized gains (losses) (.0800) Unrealized gains (losses).3800 Total increase (decrease) from operations C.2800 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 2.06% Management expense ratio before waivers or absorptions F 2.48% Trading expense ratio G.52% Portfolio turnover rate H 89% 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. 11

14 Financial Highlights continued Fidelity Emerging Markets 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.0359 Total expenses (excluding distributions) (.0618) Realized gains (losses) (.1538) Unrealized gains (losses).1956 Total increase (decrease) from operations C.0159 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 $ 295 Units outstanding E 23,870 Management expense ratio F 1.14% Management expense ratio before waivers or absorptions F 1.19% Trading expense ratio G.52% Portfolio turnover rate H 89% 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 Fidelity Emerging Markets 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.0357 Total expenses (excluding distributions) (.0603) Realized gains (losses) (.1684) Unrealized gains (losses).2351 Total increase (decrease) from operations C.0421 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 $ 68 Units outstanding E 7,022 Management expense ratio F 1.08% Management expense ratio before waivers or absorptions F 1.12% Trading expense ratio G.52% Portfolio turnover rate H 89% 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. 13

16 Financial Highlights continued 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% 34.99% 65.01% 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 E % 56.34% 43.66% Series E % 57.97% 42.03% Series P % % Series P % % 14

17 Fidelity Emerging Markets 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 (%) Series B Fiscal Years Percentage (%) Series F Fiscal Years Percentage (%)

18 Fidelity Emerging Markets Fund Past Performance continued Series O Fiscal Years Percentage (%) Since the Commencement of Operations, from ugust 16, 2006 to March 31, Series E1 Fiscal Years Percentage (%) Since the Commencement of Operations, from February 5, 2016 to March 31, Series E2 Fiscal Years Percentage (%) Since the Commencement of Operations, from February 5, 2016 to March 31,

19 Series E3 Fiscal Years Percentage (%) Since the Commencement of Operations, from February 5, 2016 to March 31, Series E4 Fiscal Years Percentage (%) Since the Commencement of Operations, from February 5, 2016 to March 31, Series P1 Fiscal Years Percentage (%) Since the Commencement of Operations, from December 4, 2015 to March 31,

20 Fidelity Emerging Markets Fund Past Performance continued Series P2 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 Emerging Markets Index. verage nnual Total Returns Past 1 year Past 3 years Past 5 years Past 10 years Since Inception Fidelity Emerging Markets Fund Series (9.8)% 1.5% (1.5)% 0.3% n/a Fidelity Emerging Markets Fund Series B (9.6)% 1.8% (1.2)% 0.5% n/a Fidelity Emerging Markets Fund Series F (8.6)% 2.9% (0.1)% 1.6% n/a Fidelity Emerging Markets Fund Series O (7.5)% 4.2% 1.2% n/a 3.7% Fidelity Emerging Markets Fund Series E1 n/a n/a n/a n/a 2.8% Fidelity Emerging Markets Fund Series E2 n/a n/a n/a n/a 2.8% Fidelity Emerging Markets Fund Series E3 n/a n/a n/a n/a 2.9% Fidelity Emerging Markets Fund Series E4 n/a n/a n/a n/a 2.9% Fidelity Emerging Markets Fund Series P1 n/a n/a n/a n/a (2.7)% Fidelity Emerging Markets Fund Series P2 n/a n/a n/a n/a (2.7)% MSCI Emerging Markets Index (9.8)% 3.9% 1.8% 4.4% 5.0% MSCI World Index (1.4)% 15.8% 12.8% 5.4% 5.8% The period used for the since inception MSCI Emerging Markets Index and MSCI World Index returns are based on Series O which has been in existence the longest compared to all Series with less than 10 years of operations. Fidelity Emerging Markets Fund, Series B, underperformed the broad global equity markets, as represented by the MSCI World Index, for the past one-year period. The Fund s benchmark, the MSCI Emerging Markets Index, returned -9.8% for the period under review. Global equities fell amid concerns about the economic slowdown in China and the implications it would have for global growth. European markets followed global equity markets, registering negative returns during the review period. U.S. equities performed better, registering a positive return, supported by positive economic data and corporate earnings that generally surpassed investor expectations. Emerging markets fell as weakness in commodity prices and the slowing growth in China weighed on their equity markets. fter fees and expenses, the Fund performed in line with its benchmark; however, before fees and expenses, the Fund outperformed its benchmark. Investments in industrials sector stocks such as Mexican airport developer and operator Grupo eroportuario and Thailand-based irports of Thailand contributed to relative performance. Having less exposure to Chinese stocks than the benchmark contributed to relative performance, after Chinese equity markets fell over the period. Having more exposure to U.S. equities than the benchmark also contributed to relative performance; U.S. stocks fared well over the period. In contrast, exposure to the consumer discretionary sector detracted, with Indonesian media firm Media Nusantara Citra and Indonesian automotive firm stra International making some of the top detractions from returns. t the end of the review period, the Fund did not have any exposure to these two stocks. 18