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Fidelity's Stock Selector Funds

Fidelity's Stock Selector Funds employ a fundamental investment strategy designed to deliver Fidelity's sector specialists' best ideas. Fidelity's sector specialists are experienced stock research analysts whose in-depth knowledge of their respective sectors allows for significant insight into the companies they research.

Each sector specialist manages an independent sector sub-portfolio of stocks that is then aggregated to form the diversified Stock Selector fund. The allocation of assets to each of the sector sub-portfolios closely corresponds to the weight of the sector within the fund's respective benchmark index. This is a "sector-neutral" approach to investing and helps to ensure that the sector specialist's ability to pick the best stocks in each sector is the primary source of alpha, or excess return of the fund relative to the return of the benchmark index.

The merits of a sector specialist, sector neutral investing strategy

Focused analysis

Fidelity's sector specialists are able to tailor their analysis to sector specific fundamental drivers. In the energy sector, for example, a value approach to security selection may be an optimal alpha strategy. In the technology sector, however, a more optimal approach may be to focus on companies with the potential for surprisingly strong earnings growth driven by new product cycles.

Risk diversification

A disciplined, sector neutral portfolio construction approach employing multiple sector specialists may also provide diversification benefits. A multi-sector specialist model includes a variety of investment styles, processes, and experience, which may ultimately lead to diversification in investment outcomes from each sector and across an entire portfolio.

Seeks to provide more consistent alpha

The sector specialist, sector-neutral approach seeks to limit the likelihood that sector volatility will influence performance, and focuses risk on stock selection, which has historically been a strength for Fidelity.

Fund offerings

Fidelity offers six funds that employ a stock selector strategy.

Strategy Fund
All-cap equity Fidelity Stock Selector All-Cap Fund
Large-cap equity Fidelity Balanced Fund
Large-cap value equity Fidelity Stock Selector Large-Cap Value Fund
Mid-cap equity Fidelity Stock Selector Mid-Cap Fund
Small-cap equity Fidelity Stock Selector Small-Cap Fund
Value equity Fidelity Value Fund

Questions?

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information.  Read it carefully.
Past performance is no guarantee of future results.
Diversification does not ensure a profit or guarantee against loss.
Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.
Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks.
Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time.
The securities of smaller, less well-known companies can be more volatile than those of larger companies.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer.
Leverage can increase market exposure and magnify investment risk.
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