Fidelity Fund Overview
NCCMT: Cash and Term Portfolios
February 2012
Michael Morin, CFA®
Director of Institutional Portfolio Management
Money Markets
Not FDIC insured. May lose value. No bank guarantee.
For Institutional Client Use Only
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Agenda
I.
1
Current Market Conditions
A.
Low Rate Environment
B.
European Sovereign Crisis
II.
NCCMT Cash Portfolio Composition
III.
NCCMT Term Portfolio Composition
IV.
Outlook / Investment Strategy
V.
Money Market Regulatory Reform Update
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Current Market Conditions
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Fed Maintains Highly Accommodative Monetary Policy
Federal Reserve Board Rate Expectations
Appropriate Timing of Policy Firming
3
Source: Federal Reserve as of 12/12/12
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Appropriate Pace of Policy Firming
(December 2012)
Fed
Shifts
From
Date-Based
Fed
Shifts
From
Date-BasedtotoThreshold-Based
Threshold-BasedGuidance
Guidance
Source: Bloomberg as of 12/12/12
4
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Short-Term Credit Spreads Trend Lower
3-MONTH LIBOR VS. 3-MONTH TREASURIES
5.0
TED Spread High:
10/10/08: 464 bps
Yield (%)
4.0
3.0
2.0
1.0
TED Spread Low:
3/16/10: 11 bps
TED Spread Current:
12/31/12: 27 bps
3 Month LIBOR
3 Month Treasury
Past performance is no guarantee of future results. It is not possible to invest directly in an index. Index performance is not
meant to represent that of any Fidelity mutual fund.
Source: Bloomberg as of 12/31/12
5
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Dec-12
Oct-12
Aug-12
Jun-12
Apr-12
Feb-12
Dec-11
Oct-11
Aug-11
Jun-11
Apr-11
Feb-11
Dec-10
Oct-10
Aug-10
Jun-10
Apr-10
Feb-10
Dec-09
Oct-09
Aug-09
Jun-09
Apr-09
Feb-09
Dec-08
Oct-08
Aug-08
0.0
Credit Concerns Remain in Eurozone
40
35
35
30
30
25
25
20
20
15
15
10
10
Greece
Source: Bloomberg as of 12/31/12
6
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Portugal
Ireland
Spain
Italy
France
Past performance is no guarantee of future results
Germany
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
Dec-11
Nov-11
Oct-11
Sep-11
Aug-11
Jul-11
Jun-11
May-11
Apr-11
0
Mar-11
0
Feb-11
5
Jan-11
5
Yield (%)
40
Dec-10
Yield (%)
10 YEAR BOND YIELDS OF SELECT EUROZONE COUNTRIES
Europe - What to Watch
 The Eurozone remains in recession as significant austerity measures crimp
short-term growth prospects
 Austerity causes social and political unrest, leading to potential leadership
changes as voters seek change
 Sovereigns and banks in the periphery continue to face bailouts amid credit
downgrades (Spain, Cyprus)
 The regulatory Impact from Basel III may hinder loan supply and as banks
restructure under the new rules
 While the region is better off than last year, the euro debt crisis is far from being
resolved and will continue to create headline risk that leads to enhanced volatility
7
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Industry Assets Rise While Supply Declines
Taxable Money Market Fund Assets vs. Taxable Investible Universe
(Index: Sept 2010 = 100)
Industry MMF Assets
Treasury Bills
Total Commercial
Paper
Agency Discount Notes
Sources: FMR, Federal Reserve Board, Treasury Direct, Federal Home Loan Bank, Freddie Mac, Fannie Mae and
iMoneyNet as of 12/31/12
8
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NCCMT Portfolios
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Fund Composition
NCCMT CASH PORTFOLIO
December 31, 2012
2%
December 31, 2011
2%
11%
North American Banks
10%
5%
Asian/Australian Banks
Euro Zone
19%
37%
33%
Nordic/Swiss Banks
UK Banks
22%
Asset Backed CP
4%
Other Corp/VRDN
Government
4%
11%
Finance Companies
8%
3%
14%
Fund Characteristics
10
2%
12%
Fund Characteristics
Weighted Average Maturity (WAM)
51 Days
Weighted Average Maturity (WAM)
51 Days
Weighted Average Life (WAL)
80 Days
Weighted Average Life (WAL)
56 Days
7-Day Net Yield
0.07%
7-Day Net Yield
0.07 %
1-Year Return
0.06%
1-Year Return
0.07%
Portfolio diversification is presented to illustrate examples of the securities that each fund
has bought and may not be representative of a fund’s current or future investments.
Each fund’s investments may change at any time. Percentages may not add up to
100 due to rounding.
Source: FMR as of 12/31/12
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Foreign Bank Exposure
FOREIGN BANK HOLDINGS: NCCMT CASH PORTFOLIO
Source: FMR as of 12/31/12
11
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Maturity Distribution
> 7 Months
NCCMT CASH PORTFOLIO FOREIGN BANK MATURITY SCHEDULE
*
Source: FMR as of 12/31/12
12
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Fund Composition
NCCMT TERM PORTFOLIO
December 31, 2011
December 31, 2012
4%
4% 2%
4%
8%
North American Banks
13%
11%
Asian/Australian Banks
17%
4%
Euro Zone
12%
Nordic/Swiss Banks
UK Banks
13%
26%
22%
Asset Backed CP
Other Corp/VRDN
Government
6%
Finance Companies
25%
Fund Characteristics
Weighted Average Maturity (WAM)
1-Year Return
13
Fund Characteristics
65 Days
0.24%
Portfolio diversification is presented to illustrate examples of the securities that each fund
has bought and may not be representative of a fund’s current or future investments.
Each fund’s investments may change at any time. Percentages may not add up to
100 due to rounding.
Source: FMR as of 12/31/12
For Institutional Client Use Only
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29%
Weighted Average Maturity (WAM)
1-Year Return
73 Days
0.05%
Foreign Bank Exposure
FOREIGN BANK HOLDINGS: NCCMT TERM PORTFOLIO
Source: FMR as of 12/31/12
14
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Maturity Distribution
NCCMT TERM PORTFOLIO FOREIGN BANK MATURITY SCHEDULE
15
Source: FMR as of 12/31/12
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Fund Maturities
90
0.25
0.22
0.19
60
0.16
45
0.13
30
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12 Jun-12
Cash Portfolio WAM
16
Source: FMR as of 12/31/12
For Institutional Client Use Only
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Jul-12
Aug-12 Sep-12
Term Portfolio OAD
Oct-12
Nov-12
0.10
Dec-12
Term Portfolio OAD
Cash Portfolio WAM
75
1st Quarter Investment Strategy and Outlook
Investment Strategy
• Focus on highest quality issuers, maintaining high degree of liquidity
• Maintain flexibility within portfolios amid market volatility stemming from the Eurozone and debt
ceiling negotiations
– Limit eurozone exposure to national champions in core countries
– Limit issuer maturity tenors and credits to reflect fundamental and macro risks
Outlook
• Europe will remain a source of potential volatility
– Sovereign fiscal imbalances may lead to potential ECB actions
– Potential for additional ratings actions
• US outlook improved but will continue to be tested
– Federal Reserve’s open-ended bond purchases aimed to stimulate job market
– Potential volatility to arise from sequester and debt ceiling negotiations
• Federal Reserve and European Central Bank are expected to maintain interest rates at
extraordinarily low levels to encourage economic growth
– Supply dynamics could ease rates lower in the months ahead
• Additional regulatory reform remains under consideration
– FSOC
– SEC
17
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Regulatory Reform Update
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SEC Staff Recommendations Rejected, Now Revisited
Floating NAV
• Which funds will be covered – Treasury / Gov't / Muni vs. General Purpose?
• Could funds be allowed to use amortized cost accounting for some instruments?
Combination of Capital and Redemption Restrictions
• Capital – size, structure or source not clear
– Size – expected at less than 50 bps with some asset types excluded
– Structure – SEC likely to allow flexibility
– Source – Shareholders, fund sponsor or outside investors
• Redemption restriction could take several forms
– Holdback on all trades of 3% for 30 days
– Minimum balance requirement
Combination of Capital, Liquidity Fees and Redemption Restrictions
– Capital requirements
– Liquidity fees
– Temporary gates on redemption
19
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reserved
FSOC Recommendations
Comment Period Extended to February 15th
Alternative 1: Floating NAV
• Which funds will be covered – Treasury / Gov't / Muni vs. General Purpose?
• Could funds be allowed to use amortized cost accounting for some instruments?
Alternative 2: Stable NAV with capital and redemption restrictions
• Capital – NAV buffer of 1%
• Minimum balance at risk (​MBR)– Requirement to holdback 3% of a shareholder'​s highest account
value in excess of $​100,​000 during the previous 30 days
Alternative 3: Stable NAV with higher capital requirement and “other
measures”
– NAV buffer of 3%
– Other measures – higher diversification, increased liquidity, and/or more disclosure
20
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reserved
Important Information
Not NCUA or NCUSIF insured. May lose value. No credit union guarantee.
Lipper Analytical Services, Inc., is a nationally recognized organization that ranks the performance of mutual funds.
The views expressed in this statement reflect those of the portfolio manager only through the end of the period of the report as stated on
the cover and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are
subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These
views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors,
may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Past performance is no guarantee of future results. Investment return will fluctuate, therefore you may have a gain or loss when
you sell shares.
Diversification does not ensure a profit or guarantee against a loss.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the fund. Interest rate increases can cause the price of money market securities to decrease.
Before investing, have your client consider the funds’ investment objectives, risks, charges, and expenses. Contact Fidelity for
a prospectus or, if available, a summary prospectus containing this information. Have your client read it carefully.
For Institutional Investor Use only.
Fidelity Investments & Pyramid Design is a registered service mark of FMR LLC.
Fidelity Investments Institutional Services Company, Inc.,500 Salem Street, Smithfield, RI 02917
Not FDIC insured. May lose value. No bank guarantee.
641015.1.0
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