pro.en.xx.2151231.gb25162.pdf INSTITUTIONAL UK CORPORATE BOND FUND 31 DECEMBER 215 Approach and Style The fund invests primarily in sterling denominated investment grade corporate bonds. Emphasis is put on bottom up issuer selection and ensuring adequate diversity due to the asymmetric nature of corporate bond returns. The manager also retains a degree of flexibility to invest in outof index strategies as a means of adding performance but adherence to the investment objective remains imperative. The fund is managed according to Fidelity s active philosophy and approach to fixed income investing. This is teambased, but led by the Portfolio Manager to generate attractive riskadjusted returns through combining multiple, diversified investment positions advised by inhouse fundamental credit research, quantitative modelling and specialist traders. Fund Facts Fund launch date: 1.11. Portfolio manager: Ian Fishwick Appointed to fund: 1.8.7 Years at Fidelity: 9 Fund Size: 628m Fund reference currency: UK Sterling (GBP) Fund domicile: United Kingdom Fund legal structure: OEIC Management company: FIL Investment Services (UK) Limited Ongoing Charges Figure (OCF) per year:.42% (3.6.15) OCF takes into account annual management charge per year:.35% Objectives & Investment Policy Aims to provide income and capital growth. Obtains exposure primarily to nongovernment bonds. Has the freedom to invest outside the fund's principal geographies, market sectors, industries or asset classes. Investments may be made in relation to bonds issued in currencies other than the fund s denominated currency. Exposure to currencies may be hedged, for example with currency forward contracts. Can invest in relation to bonds issued by governments, companies and other bodies. The fund may make use of derivatives which are consistent with achieving the fund s objective. This may result in leverage by which we mean a level of exposure which could expose the fund to the potential of greater gains or losses than would otherwise be the case. The fund has discretion in its choices of investments within its objectives and policies. Income is reinvested in additional shares or paid to shareholders on request. Shares can usually be bought and sold each business day of the fund. This fund may not be appropriate for investors who plan to sell their shares in the fund within 5 years. Investment in the fund should be regarded as a longterm investment. Share Class Risk and Reward Profile This risk indicator is taken from the Key Investor Document (KIID) at the relevant monthend. Because it may be updated during a month, please refer to the KIID for the most uptodate information. The risk category was calculated using historical performance data. The risk category may not be a reliable indication of the future risk profile of the fund, is not guaranteed and may change over time. The lowest category does not mean a "risk free" investment. The risk and reward profile is classified by the level of historical fluctuation of the Net Asset Values of the share class, and within this classification, categories 12 indicate a low level of historical fluctuations, 35 a medium level and 67 a high level. Important Information Before investing you should read the Key Investor Information Document (KIID). Details of where the KIID is available are on the last page of this factsheet. The value of investments and any income from them may go down as well as up and an investor may not get back the amount invested. Where an investor's own currency is different to the currency of the fund's investments, the fund's returns can be affected by fluctuations in currency exchange rates. The use of financial derivative instruments may result in increased gains or losses within the fund. The price of bonds is influenced by movements in interest rates, changes in the credit rating of bond issuers, and other factors such as inflation and market dynamics. In general, as interest rates rise the price of a bond will fall (and vice versa). Bonds with a longer time to maturity are generally affected to a greater degree. The risk of default is based on the issuer's ability to make interest payments and to repay the loan at maturity. Default risk may therefore vary between different government issuers as well as between different corporate issuers. The investment policy of this fund means it can be more than 35% invested in Government and public securities. These can be issued or guaranteed by other countries and Governments. For a full list please refer to the fund's prospectus. This information is for Investment Professionals only and should not be relied upon by private investors.
pro.en.xx.2151231.gb25162.pdf INSTITUTIONAL UK CORPORATE BOND FUND 31 DECEMBER 215 These figures relate to the fund s past performance, which is not a reliable indicator of future results. The value of investments and any income from them may go down as well as up and an investor may not get back the amount invested. Performance Comparator(s) Market index from 1.11. The BofA Merrill Lynch EuroSterling Index Market index is for comparative purposes only unless specifically referenced in the Objectives & Investment Policy on page 1. The same index is used in the positioning tables on this factsheet. Where the effective date for the current market index is after the share class launch date, full history is available from Fidelity. Performance for calendar years in GBP (%) Fund Index Performance in GBP (%) Fund Index 1mth 3mths 1yr 3yrs (pa) 5yrs (pa) 1.2%.7% 1.% 5.3% 7.8%.7%.5%.7% 4.5% 6.7% Since 1.11. (pa) 7.% 6.1% Source: Fidelity. Fund returns are quoted gross of fees with net income invested. The official valuation point for the fund is 12. noon UK time. However, the fund is revalued each monthend using closing prices for all securities so that fund performance is consistent with the valuation point used in the calculation of the index performance. Fidelity has used this approach since October 21. 2
pro.en.xx.2151231.gb25162.pdf INSTITUTIONAL UK CORPORATE BOND FUND 31 DECEMBER 215 Introduction This factsheet contains information about the composition of the fund at a particular point in time. It aims to help you understand how the manager has positioned the fund to meet its objectives. Each table shows a different breakdown of the fund s investments. The index used in the positioning tables is the index defined in the Performance Comparator(s) section on page 2 of this factsheet. Portfolio Characteristics Distribution Yield (%) Effective Duration Running Yield (%) Yield to Maturity (%) Average Maturity (years) Average Coupon (%) Spread Duration Option Adjusted Spread (Basis Points) Duration Times Spread (DTS) Number of Holdings Number of Names Average Credit Rating 3.9 7.8 7.8. 4.8 4.4.4 4.3 18.1 4.9 8.2 227 1592 346 197 BBB 3.3 14. 5.1 8. 142 1158 A 1. 4..2.3 84 435 n / a Definitions of these characteristics can be found in the Glossary section of this factsheet. Derivatives Exposure Long % Short % Net % Gross % Bond / Interest Rate Futures 9.31 18.13 8.82 27.44 Interest Rate Swaps Inflation Indexed Swaps Credit Default Swaps Index Credit Default Swaps Mortgage To Be Announced 26.87 7.5 26.87 7.5 26.87 7.5 61.36 Exposure as a percent of total net assets. Excludes FX forwards. Asset Allocation Contribution to Duration (incl. Derivatives) Treasury 1.98.5 1.94.4..4 2 1 1 Index Linked Investment Grade Sovs Supras & Agencies Investment Grade Financials Investment Grade NonFinancials Investment Grade ABS Investment Grade Emerging Markets High Yield Index Credit Default Swaps 4.39 38.12 29.87 7.47 7.22 8.59 2.53 3.18 39.87 6.94.95.43 16.14 7.95 1.53 6.26 8.16..5 2.7 2.8.5.5.4.. 1.5 2.2 3.4.5.1... 1..5.5..4.4. 87 491 58 17 124 216 87 38 564 8 18 9 111 16 27 16 26 Other 1.87 1.2.85.1.1.1 29 19 1 Interest Rate Derivatives... FX / Derivative P&L.59.59.1..1 42 42 Cash 1.7 1.7... Rounding adjustment.1.3...2 2 1 1 7.8 7.8. 1592 1158 435 as a percent of total net assets. Contribution to duration (CTD) and contribution to durationtimesspread (DTS) are in the appropriate units of measure. CTD and DTS include the effect of derivatives. FX / Derivative P&L includes collateral balances with counterparties arising from derivatives used in the fund (this can lead to a negative balance). Index linked includes nongovernment index linked bonds. 3
pro.en.xx.2151231.gb25162.pdf INSTITUTIONAL UK CORPORATE BOND FUND 31 DECEMBER 215 Sector Positioning Treasury 1.98.5 1.94 2 1 1 Quasi / Sov / Supra / Agncy Agency Mortgages Banks & Brokers Insurance Property Other Financials Basic Industry Capital goods Consumer Cyclical Consumer Non Cyclical Energy Transportation Technology Communications Utility Covered ABS / MBS Unclassified Index Credit Default Swaps Interest Rate Derivatives FX / Derivative P&L 8.2 23.28 1.59 1.73 3.49 4.24 2.65 3.99 3.37 3.57 2.26 6.4 5.15 6.6 3.96 8.61.59 2.67 15.1 6.38 2.76 4.55 1.52 1.4 4.63 5.3 1.8 4.36.44 6.43 15.49 3.48 5.67 12.65 8.18 4.21 1.3 1.6 2.72 1.25.65 1.92 1.76 2.1 5.6 1.28 8.89.48 2.94.59 132 34 186 23 5 113 55 46 48 75 24 18 92 162 28 161 27 42 89 167 117 37 7 29 15 41 68 19 53 4 16 253 21 67 43 137 68 14 21 84 4 5 19 56 29 14 14 91 7 94 27 42 Cash 1.7 1.7 Rounding adjustment.1.3 2 1 1 1 1 1592 1158 435 as a percent of total net assets. Contribution to durationtimesspread (DTS) in the appropriate unit of measure. DTS includes the effect of derivatives. FX / Derivative P&L includes collateral balances with counterparties arising from derivatives used in the fund (this can lead to a negative balance). Financial Sector Exposure By Capital Structure Govt Guaranteed Covered Senior Lower Tier 2 Upper Tier 2 Tier 1 Other.43 3.96 3.48 14.99 9.95 5.8 5.49.36.6 2.7 1.33 11.37 3.68 37.83 24.96.43.48 5.5.41.24.74 7.69 1 1 28 139 56 7 33 254 21 85 86 11 2 82 7 54 29 5 14 172 517 36 212 as a percent of total net assets. Contribution to durationtimesspread (DTS) in the appropriate unit of measure. DTS includes the effect of derivatives. FX / Derivative P&L includes collateral balances with counterparties arising from derivatives used in the fund (this can lead to a negative balance). The Financials sector includes the following subsectors: Banks & Brokers, Insurance & Covered. Duration Breakdown (By Currency) Fund Nominal Real Index Relative GBP 7.5. 7.5 EUR.2..2 USD.1..1 JPY... CAD... Other... 7.8. 7.8 7.8..... 7.8.3.2.1.... Duration includes the effect of interest rate derivatives such as government bond futures, inflation swaps and interest rate swaps. Nominal Fund refers to the sensitivity to nominal yields, whereas Real Fund refers to the sensitivity to inflationlinked / real yields. 4
pro.en.xx.2151231.gb25162.pdf INSTITUTIONAL UK CORPORATE BOND FUND 31 DECEMBER 215 Credit Rating AAA/Aaa AA/Aa A BBB/Baa BB/Ba B CC/Ca Not Rated Interest Rate Derivatives FX / Derivative P&L Cash Rounding adjustment 8.38 18.35 18.35 14.5 33.9 3.49 29.24 35.2 7.78.43.81 1.87 1.2.59 1.7.1 1 1 9.98 12 63 38 3.85 144 114 3 2.6 526 422 13 5.96 577 53 47 7.35 195 9 186.81 2 2.85 29 19 1.59 1.7 1 1 1 1592 1158 435 Exposure as a percent of total net assets and contribution to durationtimesspread (DTS). 'FX / Derivative P&L' includes collateral balances with counterparties arising from derivatives used in the fund (this can lead to a negative balance). DTS includes the effect of derivatives. For ratings breakdown, worst of the two best ratings from across S&P, Moody's and Fitch is applied (commonly known as the Basel method). Maturity Profile (Contribution to Duration) to 1 years 1 to 3 years 3 to 5 years 5 to 1 years 1 to 15 years 15 to 2 years 2 to 25 years 25 to 3 years 3 to 4 years 4 + years Rounding adjustment 2..4.5 2.1.8 1.5.8 1.8.8 1.2.1 7.8. 2..3.1.4.1 1.3.8 1.5.7 1.3.2 1.3.5.9 1..6.1.3.8.1.1 7.8. Includes the effect of interest rate derivatives such as government bond futures, inflation swaps and interest rate swaps. Currency Exposure GBP USD EUR JPY CAD Other Before Hedging 61.33 29.56 9.11 1 After Hedging 11.26.85.41 1 Index 1 1 This table shows the currency exposure and hedging of the fund s investments. The After Hedging column shows the currency exposure relevant to the investor. 5
pro.en.xx.2151231.gb25162.pdf INSTITUTIONAL UK CORPORATE BOND FUND 31 DECEMBER 215 Regional Exposure Domicile Of Issuer Contribution to Duration (incl. Derivatives) Multinational United States (& Other Amer.) Canada United Kingdom (& Ire.) France Germany (& Aust.) Benelux Scandinavia Mediterranean Switzerland Other Europe Japan Australia & N.Z. Asia ex Japan ex Aus. C.I.S / Eastern Europe Latin America Middle East & N Africa Other Unclassified FX / Derivative P&L Index Credit Default Swaps Cash Rounding adjustment 7.26 7.26..5.5 2 2 22.11 12.3 1.8.2 1.1.8 38 158 222.9.34.25... 2 3 2 4.35 48.96 8.61 5.3 4. 1.3 52 612 92 5.61 7.48 1.86.8.7.1 159 125 33 1.76 9.6 7.3.3.6.9 17 63 46 6.1 3.76 2.33.5.2.3 18 28 74 1.46 2.7 1.24.1.2.1 1 33 18.98 2.63 1.65..2.2 1 38 28 4.79 1.11 3.69.2..2 11 11 9... 1.89.7 1.18.1..1 21 6 15 2.88 2.26.61.1.1. 48 26 22 4.34.36 3.97.2..1 23 3 2.21.5.17... 6 1 5 5.2.94 4.25.4.1.3 146 25 12 2.28.13 2.14.2..2 31 2 29.29.6.23... 5 1 4.26.16.1... 6 2 4.59.59..........1.1..1.1 1 1 3 1 1 7.8 7.8. 1592 1158 435 as a percent of total net assets. Contribution to duration (CTD) and contribution to durationtimesspread (DTS) are in the appropriate units of measure. CTD and DTS include the effect of derivatives. FX / Derivative P&L includes collateral balances with counterparties arising from derivatives used in the fund (this can lead to a negative balance). Top 1 Long Exposures By Issuer (GE) Ge Capital Uk Funding (LLOYDS) Lloyds Tsb Bank Plc (AAPL) Apple Inc (BACR) Barclays Plc (MSFT) Microsoft Corp (UKT) United Kingdom of Great Britain (RABOBK) Rabobank Nederland (HSBC) Hsbc Bank Plc (EDF) Electricite De France (CS) Credit Suisse 4.1 3.67 3.4 2.26 2.1 1.98 1.87 1.81 1.8 1.77 1.95 2.47.23 1.53 1.9 1.75 2.4.15 2.6 1.2 3.17.73 2.1 1.98.78.7.23 1.63 Top long exposures are those bond issuers that reflect the largest percentage of the fund s total net assets. The effect of credit derivatives is included where the reference entity is a specific bond issuer. Government bond futures and index credit default swaps are excluded. Top Overweights By Issuer Top Underweights By Issuer (AAPL) Apple Inc 3.4.23 3.17 (EIB) European Investment Bank 6.4 6.4 (GE) Ge Capital Uk Funding (MSFT) Microsoft Corp (UKT) United Kingdom of Great Britain (CS) Credit Suisse (JPM) Jp Morgan Chase Bank Na (LLOYDS) Lloyds Tsb Bank Plc (CPKLN) Cpuk Finance Ltd (AABOND) Aa Bond Co Ltd (TSCOLN) Tesco Property Fin 1 Plc 4.1 2.1 1.98 1.77 1.69 3.67 1.39 1.46 1.6 1.95.15.32 2.47.2.35.6 2.6 2.1 1.98 1.63 1.37 1.2 1.19 1.1 1. (KFW) Kfw (UKRAIL) Network Rail Infra Fin (T_) At&T Inc (GSK) Glaxosmithkline Capital (RWE) Rwe Finance Bv (CNALN) Centrica Plc (ORAFP) Orange Sa (EOANGR) E.On Intl Finance Bv (SSELN) Scottish & Southern Ener 3.59 1.14 1..94.81.79.78.78.75 3.59 1.14 1..94.81.79.78.78.75 Top overweights and underweights are those bond issuers that have the largest active positions relative to the index holding. The effect of credit derivatives is included where the reference entity is a specific bond issuer. Government bond futures and index credit default swaps are excluded. 6
pro.en.xx.2151231.gb25162.pdf INSTITUTIONAL UK CORPORATE BOND FUND 31 DECEMBER 215 Glossary Portfolio Characteristics Distribution Yield (%) The Distribution Yield reflects the amount of income that investors may expect to receive over the next twelve months as a percentage of the price of the fund on the date shown. It is based on a snapshot of the portfolio on that day. It is net of the fund s ongoing charges but does not include any entry charge. The Distribution Yield is gross of tax and investors may be subject to tax on distributions. Effective Duration Duration is a measure of sensitivity of the fund value to changes in interest rates. Effective duration is a duration calculation for bonds with embedded options (such as a call or a put option). It takes into account that expected cash flows will fluctuate as interest rates change and affect a bond s price. The effective duration of a fund is calculated by a market weighted sum of the effective duration of each individual instrument. The effect of derivatives such as bond futures and interest rate swaps are included in the calculation. Running Yield (%) Describes the income investors get from their portfolio as a percentage of market value of the securities. It should not be relied on as a measure of expected fund return (or distribution). Bonds with high probability of default are excluded from the calculation. The running yield does not reflect the total return over the life of the bond and takes no account of reinvestment risk (the uncertainty about the rate at which future cash flows can be reinvested) or the fact that bonds usually mature at par value, which can be an important component of a bond's return. The running yield does not include the impact of fees. Yield to Maturity (%) The Yield to Maturity (also known as the redemption yield) is the internal rate of return earned on a bond, assuming that the bond will be held until maturity and all coupon and principal payments will be made. It is an estimation of future return, as the rate at which coupon payments can be reinvested when received is unknown. The portfolio s redemption yield is the value weighted sum of the redemption yield of each individual instrument. The redemption yield is gross of the fund s charges and gross of tax. Average Maturity (Years) The marketweighted average maturity of bonds held in the portfolio. Perpetual bonds are assigned a maturity of 31 December 249. Derivatives are excluded from the calculation. Average Coupon (%) The coupon is the interest rate stated on a bond when it is issued. Average Coupon is the weighted average coupon of bonds held in the portfolio. Derivatives are excluded from the calculation. Spread Duration The sensitivity of the price of a bond to a change in its Option Adjusted Spread. Option Adjusted Spread (Basis Points) Option Adjusted Spread (OAS) measures the yield spread that is not directly attributable to the bond's characteristics. OAS is a measurement tool for evaluating price differences between similar bonds with different embedded options. A larger OAS implies a greater return for greater risks. Duration Times Spread (DTS) DTS is a measure of credit risk sensitivity that utilises credit spread and credit spread duration based on current market valuations. It is superior to spread duration as a standalone measure of credit risk because it recognises that securities with a higher spread tend to experience greater spread changes. The portfolio s DTS is the value weighted sum of the DTS of each individual instrument. Number of Holdings The number of bonds and derivatives held in the fund. Where the fund invests in another fund, it is counted as one holding. FX (foreign exchange) forwards are excluded. These are forward contracts that allow currency to be bought or sold at an agreed price on a future date. Number of Names The total number of individual issuers whose bonds are held in the fund. Since the fund will often hold more than one bond from an issuer, this figure is generally lower than the number of holdings. Average Credit Rating This is the weighted average of all the bond credit ratings in the fund, expressed using the industry standard letter system (ie AAA, BBB). It takes into account all investments in the fund, including derivatives. This measure gives an idea of how risky the fund s bonds are overall: the lower the average credit rating, the riskier the fund. 7
pro.en.xx.2151231.gb25162.pdf INSTITUTIONAL UK CORPORATE BOND FUND 31 DECEMBER 215 Important Information Fidelity International refers to the group of companies which form the global investment management organisation that provides information on products and services in designated jurisdictions outside of North America. Fidelity only offers information on its own products and services and does not provide investment advice based on individual circumstances, other than when specifically stipulated by an appropriately authorised firm, in a formal communication with the client. This communication is not directed at, and must not be acted upon by persons inside the United States and is otherwise only directed at persons residing in jurisdictions where the relevant funds are authorised for distribution or where no such authorisation is required. Unless otherwise stated, all views are those of Fidelity. Reference in this document to specific securities or funds should not be construed as a recommendation to buy or sell them, but is included for the purposes of illustration only. Investors should also note that the views expressed may no longer be current and may have already been acted upon by Fidelity. The research and analysis used in this documentation is gathered by Fidelity for its use as an investment manager and may have already been acted upon for its own purposes. Past performance is not a reliable indicator of future results. The value of investments can go down as well as up and you may get back less than you invested. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. This fund is managed by FIL Investment Services (UK) Limited. This document describes a subfund and share class of Fidelity Institutional Funds (the 'investment company'). The Prospectus and Reports and Accounts are prepared for the entire investment company. Before investing you should read the Key Investor Information Document (KIID), which is available in your local language through the website www.fidelityinternational.com or from your distributor. Switzerland: Fidelity Institutional Funds is an openended investment company with variable capital incorporated in England and Wales. Investments should be made on the basis of the current prospectus and KIID (key investor information document), which are available along with the current annual and semiannual reports free of charge from FIL Investment Switzerland AG or from our legal representative and paying agent in Switzerland: BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 82 Zurich. Issuer: FIL Investment Switzerland AG, authorised and supervised by the Swiss Financial Market Supervisory Authority FINMA. United Kingdom: Investments should be made on the basis of the KIID (key investor information document) which is available at www.fidelity.co.uk/importantinformation. The full prospectus may also be obtained from Fidelity. Issued by FIL Pensions Management, a firm authorised and regulated in the UK by the Financial Conduct Authority. FIL Pensions Management is registered in England and Wales under the company number 215142. The registered office of the company is Oakhill House, 13 Tonbridge Road, Hildenborough, Tonbridge, Kent TN11 9DZ, United Kingdom. CI3165 English FM28 T12a 8