Fidelity Canadian Opportunities Class of the
Fidelity Capital Structure Corp.
Annual Report
November 30, 2015
Fidelity Canadian Opportunities Class of the Fidelity Capital Structure Corp.
Schedule of Investments November 30, 2015
Showing Percentage of Net Assets Attributable to Holders of Redeemable Shares (Net Assets)
Underlying Funds – 100.0%
Units
(000s)
Fidelity Canadian Opportunities
Fund ‑ Series O
TOTAL INVESTMENT
PORTFOLIO – 100.0%
Cost
(000s)
Market Value
(000s)
1,586 $31,359 $ 31,155
$31,359
31,155
NET OTHER ASSETS (LIABILITIES) – 0.0%
NET ASSETS – 100%
0
$ 31,155
See accompanying notes which are an integral part of the financial statements.
Annual Reportport
2
Investment Valuation
The following is a summary of the inputs used, as of November 30, 2015, November 30, 2014 and December 1, 2013, involving the Class’ assets and
liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those
securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Investment Valuation
section in the accompanying Notes to Financial Statements.
Valuation Inputs at November 30, 2015:
Description
(Amounts in thousands)
Investments in Securities:
Underlying Funds
Total Investments in Securities:
Total
Level 1
Level 2 Level 3
$31,155 $31,155 $— $—
$31,155 $31,155 $— $—
Valuation Inputs at November 30, 2014:
Description
(Amounts in thousands)
Investments in Securities:
Underlying Funds
Total Investments in Securities:
Total
Level 1
Level 2 Level 3
$41,609 $41,609 $— $—
$41,609 $41,609 $— $—
Valuation Inputs at December 1, 2013:
Description
(Amounts in thousands)
Investments in Securities:
Underlying Funds
Total Investments in Securities:
Total
Level 1
Level 2 Level 3
$45,349 $45,349 $— $—
$45,349 $45,349 $— $—
See accompanying notes which are an integral part of the financial statements.
3
Annual Report
Financial Statements
Statements of Financial Position
Amounts in thousands of Canadian Dollars /thousands of shares (except per share amounts)
As at
Assets (Note 3)
Current assets
Investments at fair value through profit or loss (Note 9)
Cash
Receivable for investments sold
Receivable on sale of shares
November 30,
2015
November 30, 2014 December 1, 2013
(Note 8)
(Note 8)
$31,155
–
76
1
31,232
$41,609
–
250
2
41,861
$45,349
212
34
102
45,697
–
18
4
44
7
4
77
$31,155
–
64
113
60
9
6
252
$41,609
3
47
–
67
10
10
137
$45,560
Series A:
($6,770 / 317 shares, $10,145 / 441 shares and $13,477 / 632 shares, respectively)
$21.3396
$23.0246
$21.3317
Series B:
($19,513 / 893 shares, $26,737 / 1,137 shares and $28,095 / 1,293 shares, respectively)
$21.8546
$23.5192
$21.7308
Series F:
($4,208 / 171 shares, $4,532 / 173 shares and $3,947 / 165 shares, respectively)
$24.5732
$26.1440
$23.8882
Series F5:
($1 / – shares, $1 / – shares and $1 / – shares, respectively)
$21.5930
$23.9552
$22.8457
Series F8:
($81 / 4 shares, $91 / 4 shares and $1 / – shares, respectively)
$20.1027
$22.9555
$22.4802
Series T5:
($114 / 5 shares, $1 / – shares and $1 / – shares, respectively)
$20.8164
$23.4339
$22.6708
Series T8:
($403 / 21 shares, $42 / 2 shares and $1 / – shares, respectively)
$19.3518
$22.4454
$22.3027
Series S5:
($16 / 1 shares, $1 / – shares and $1 / – shares, respectively)
$20.9481
$23.5369
$22.6878
$19.4688
$22.5258
$22.3305
Liabilities (Note 3)
Current liabilities
Payable for investments purchased
Payable on redemption of shares
Distributions payable (Note 5)
Management fee payable (Note 4)
Other payables to affiliates (Note 4)
Other payables and accrued expenses (Note 4)
Net assets attributable to holders of redeemable shares (Notes 3 and 6)
Net assets attributable to holders of redeemable shares per Series and per share (Note 6)
Series S8:
($49 / 3 shares, $59 / 3 shares and $36 / 2 shares, respectively)
See accompanying notes which are an integral part of the financial statements.
Annual Reportport
4
Statements of Comprehensive Income
Amounts in thousands of Canadian Dollars (except per share amounts)
For the periods ended November 30,
Investment income (Note 3)
2015
2014
(Note 8)
$436
2,335
$458
6,859
843
(4,326)
(3,483)
(712)
644
(2,935)
(2,291)
5,026
Operating expenses (Note 4)
Management fees
Administration fees
Independent Review Committee fees
Commissions and other portfolio costs
Sales tax
683
103
–
–
90
788
120
–
–
105
Total operating expenses
Expenses waived (Note 4)
876
(17)
1,013
(3)
859
$(1,571)
1,010
$4,016
Increase (decrease) in net assets attributable to holders of redeemable shares from operations per Series (Note 3)
Series A
$(340)
$1,071
Series B
$(1,003)
$2,508
Series F
$(167)
$427
Series F5
$–
$–
Series F8
$(4)
$4
Series T5
$(8)
$–
Series T8
$(46)
$1
Series S5
$(1)
$–
Series S8
$(2)
$5
Increase (decrease) in net assets attributable to holders of redeemable shares from operations per Series per share (Note 3)
Series A
$(.9381)
$2.0677
Series B
$(.9645)
$2.0701
Series F
$(1.0611)
$2.5289
Series F5
$(1.1091)
$2.3654
Series F8
$(.9676)
$1.5284
Series T5
$(2.0845)
$1.6545
Series T8
$(3.7760)
$1.3023
Series S5
$(2.6704)
$2.5893
Series S8
$(1.5217)
$1.9017
Income distributions from the underlying funds
Capital gain distributions from the underlying funds
Net gain (loss) on Investments
Net realized gain (loss) on investments
Change in net unrealized appreciation (depreciation) on investments
Total investment income (loss)
Net operating expenses
Net increase (decrease) in net assets attributable to holders of redeemable shares from operations
Other information:
See accompanying notes which are an integral part of the financial statements.
5
Annual Report
Financial Statements – continued
Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares
Amounts in thousands of Canadian Dollars
For the period ended November 30, 2015
Net assets attributable to holders of redeemable shares, beginning of
period
Class
Series A
Series B
Series F
Series F5
Series F8
$41,609
$10,145
$26,737
$4,532
$1
$91
(436)
(34)
(470)
(95)
–
(95)
(272)
–
(272)
(59)
–
(59)
–
–
–
(1)
(6)
(7)
6,793
346
(15,552)
(8,413)
712
85
(3,737)
(2,940)
3,359
209
(9,517)
(5,949)
1,949
42
(2,089)
(98)
–
–
–
–
–
1
–
1
(1,571)
(340)
(1,003)
(167)
–
(4)
(10,454)
$31,155
(3,375)
$6,770
(7,224)
$19,513
(324)
$4,208
–
$1
(10)
$81
Distributions to holders of redeemable shares (Note 5)
From net investment income
Return of capital
Redeemable share transactions (Note 6)
Proceeds from sale of redeemable shares
Reinvestment of distributions
Amounts paid upon redemption of redeemable shares
Increase (decrease) in net assets attributable to holders of redeemable
shares from operations
Net increase (decrease) in net assets attributable to holders of redeemable shares
Net assets attributable to holders of redeemable shares, end of period
Amounts in thousands of Canadian Dollars
For the period ended November 30, 2015
Series T5
Series T8
Series S5
Series S8
Net assets attributable to holders of redeemable shares, beginning of period
$1
$42
$1
$59
(2)
(5)
(7)
(6)
(19)
(25)
–
(1)
(1)
(1)
(3)
(4)
184
2
(58)
128
(8)
113
$114
530
6
(104)
432
(46)
361
$403
17
–
–
17
(1)
15
$16
42
1
(47)
(4)
(2)
(10)
$49
Distributions to holders of redeemable shares (Note 5)
From net investment income
Return of capital
Redeemable share transactions (Note 6)
Proceeds from sale of redeemable shares
Reinvestment of distributions
Amounts paid upon redemption of redeemable shares
Increase (decrease) in net assets attributable to holders of redeemable shares from operations
Net increase (decrease) in net assets attributable to holders of redeemable shares
Net assets attributable to holders of redeemable shares, end of period
See accompanying notes which are an integral part of the financial statements.
Annual Reportport
6
Statements of Changes in Net Assets Attributable to Holders of Redeemable Shares – continued
Amounts in thousands of Canadian Dollars
For the period ended November 30, 2014 (Note 8)
Net assets attributable to holders of redeemable shares, beginning of
period
Class
Series A
Series B
Series F
Series F5
Series F8
$45,560
$13,477
$28,095
$3,947
$1
$1
(462)
(11)
(473)
(113)
–
(113)
(297)
–
(297)
(50)
–
(50)
–
–
–
(1)
(4)
(5)
6,692
351
(14,537)
(7,494)
936
104
(5,330)
(4,290)
3,910
204
(7,683)
(3,569)
1,602
40
(1,434)
208
–
–
–
–
90
1
–
91
4,016
1,071
2,508
427
–
4
(3,951)
$41,609
(3,332)
$10,145
(1,358)
$26,737
585
$4,532
–
$1
90
$91
Distributions to holders of redeemable shares (Note 5)
From net investment income
Return of capital
Redeemable share transactions (Note 6)
Proceeds from sale of redeemable shares
Reinvestment of distributions
Amounts paid upon redemption of redeemable shares
Increase (decrease) in net assets attributable to holders of redeemable
shares from operations
Net increase (decrease) in net assets attributable to holders of redeemable shares
Net assets attributable to holders of redeemable shares, end of period
Amounts in thousands of Canadian Dollars
For the period ended November 30, 2014 (Note 8)
Series T5
Series T8
Series S5
Series S8
Net assets attributable to holders of redeemable shares, beginning of period
$1
$1
$1
$36
–
–
–
–
(2)
(2)
–
–
–
(1)
(5)
(6)
–
–
–
–
–
–
$1
41
1
–
42
1
41
$42
–
–
–
–
–
–
$1
113
1
(90)
24
5
23
$59
Distributions to holders of redeemable shares (Note 5)
From net investment income
Return of capital
Redeemable share transactions (Note 6)
Proceeds from sale of redeemable shares
Reinvestment of distributions
Amounts paid upon redemption of redeemable shares
Increase (decrease) in net assets attributable to holders of redeemable shares from operations
Net increase (decrease) in net assets attributable to holders of redeemable shares
Net assets attributable to holders of redeemable shares, end of period
See accompanying notes which are an integral part of the financial statements.
7
Annual Report
Financial Statements – continued
Statements of Cash Flows
Amounts in thousands of Canadian Dollars
For the periods ended November 30,
Cash, beginning of period
Cash flows from (used in) operating activities:
Purchases of investments
Proceeds from sale and maturity of investments
Cash receipts from other investment income
Cash paid for operating expenses
Net cash from (used in) operating activities
Cash flows from (used in) financing activities:
Distributions to holders of redeemable shares net of reinvestments
Proceeds from sales of shares
Amounts paid upon redemption of shares
Net cash from (used in) financing activities
Net change in cash
Cash, end of period
See accompanying notes which are an integral part of the financial statements.
Annual Reportport
8
2015
2014
$–
$212
(4,452)
11,595
2,771
(877)
9,037
(9,052)
10,284
7,317
(1,022)
7,527
(233)
6,794
(15,598)
(9,037)
–
$–
(10)
6,791
(14,520)
(7,739)
(212)
$–
Notes to Financial Statements
For the periods ended November 30, 2015 and 2014
(Amounts in thousands of Canadian dollars except per unit amounts)
1. Formation of the Corporation
Fidelity Capital Structure Corp. (Corporation) is a mutual fund corporation incorporated under the laws of Alberta on August 30, 2001. The
authorized capital of the Corporation consists of an unlimited number of Class A voting shares and 300 classes of redeemable mutual fund special
shares. Currently, 77 classes of the redeemable mutual fund special shares are available in Series A, Series B, Series F, Series F5, Series F8, Series
I, Series I5, Series I8, Series P1, Series P2, Series P3, Series P4, Series P5, Series P1T5, Series P2T5, Series S5, Series S8, Series T5 and Series T8.
Each of these 77 classes is a separate reporting entity. The registered office of the Corporation is located at 407 2nd Street S.W., Suite 820, Calgary,
Alberta, T2P 2Y3.
Fidelity Canadian Opportunities Class of the Fidelity Capital Structure Corp. (Class) is a class of the Corporation and invests substantially all of
its assets in Fidelity Canadian Opportunities Fund – Series O (Underlying Fund). The Class offers Series A, Series B, Series F, Series F5, Series
F8, Series T5, Series T8, Series S5 and Series S8 shares. Series A, Series T5 and Series T8 shares are available to all investors in a deferred
sales charge (DSC) option and will be converted to lower management fee Series B, Series S5 and Series S8 shares, respectively, one year after
completion of their redemption schedule. Series T5 and Series T8 shares have substantially all the same attributes as the Series A shares with the
exception that Series T5 and Series T8 shares distribute an amount comprised of net income and/or return of capital monthly, if available. Series
B, Series S5 and Series S8 shares are available to all investors in an initial sales charge (ISC) option. Series S5 and Series S8 shares have substantially all the same attributes as the Series B shares with the exception that Series S5 and Series S8 shares distribute an amount comprised of
net income and/or return of capital monthly, if available. Series F, Series F5 and Series F8 shares are usually only available to investors who have
fee–based accounts with dealers who have signed an eligibility agreement with Fidelity Investments Canada ULC (Fidelity). Series F5 and Series
F8 shares have substantially all the same attributes as the Series F shares with the exception that Series F5 and Series F8 shares distribute an
amount comprised of net income and/or return of capital monthly, if available.
The Class meets the definition of an investment entity and its purpose is to provide investment management services to its shareholders by
investing its net assets for capital growth and/or investment income and by measuring its investment performance on a fair value basis. Refer to
the Financial Instruments Risk note below for the Class’ investment objective.
Fidelity is the Class’ investment manager. FIAM LLC (FIAM) (formerly Pyramis Global Advisors, LLC), an affiliate of Fidelity, is the investment
adviser of the Underlying Fund.
Effective December 31, 2015, the investment adviser of the Underlying Fund was changed from FIAM to Fidelity. There were no changes to the
sub-advisers of the Underlying Fund.
2. Basis of Preparation
Statement of Compliance – These financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as published by the International Accounting Standards Board (IASB) including IFRS 1- First-time Adoption of International Financial
Reporting Standards. The Class adopted this basis of accounting in 2015 with an effective date of December 1, 2013 (transition date), as required
by Canadian securities legislation and the Canadian Accounting Standards Board. Previously, the Class prepared its financial statements in
accordance with Canadian Generally Accepted Accounting Principles (Canadian GAAP) as defined under Part V of the Chartered Professional
Accountants (CPA) Canada Handbook. Refer to the IFRS Transition note below for further discussion on the impact of adopting IFRS. The
accounting policies set out below have been applied consistently in the preparation of its opening IFRS statement of financial position and
throughout all periods presented as if these policies had always been in effect, unless otherwise stated.
The financial statements were authorized for issue by the Corporation’s board of directors on February 9, 2016.
Functional and Presentation Currency – These financial statements are presented in Canadian dollars, which is the Class’ functional
currency.
3. Summary of Significant Accounting Policies
Basis of Measurement – These financial statements have been prepared on the historical cost basis except for investments which are measured at fair value in the Statements of Financial Position.
Use of Estimates and Judgments – Under IFRS, management is required to make certain estimates and judgments at the date of the financial statements. The principal financial statement components subject to significant accounting estimates and judgments include:
Fair value measurements – The Class may invest in financial instruments that are not quoted in an active market. Where applicable, these
instruments are categorized in Level 2 and Level 3 of the fair value hierarchy explained below. When current market prices or quotations are
not readily available or reliable, valuation techniques will be applied in good faith and in accordance with procedures adopted by the manager.
Factors used in determining fair value may include, but are not limited to, broker quotes from reputable pricing sources, market or security specific events. Fair value models use observable data, to the extent practical; however, the manager is required from time to time to make estimates
and assumptions that are based on the best information available at that particular time. Changes in these estimates could impact the fair values
9
Annual Report
Notes to Financial Statements – continued
(Amounts in thousands of Canadian dollars except per unit amounts)
of the financial instruments, and the impact could be material. The aggregate fair value of investments measured by valuation techniques as at
November 30, 2015, November 30, 2014 and December 1, 2013, is included at the end of the Class’ Schedule of Investments.
Classification and measurement of financial instrument – The Class has made significant judgments when determining the classification
and measurement of its financial instruments under IAS 39, Financial Instruments – Recognition and Measurement (IAS 39). These judgments
centre upon the determination that certain investments are held-for-trading and that the fair value measurement option can be applied to those
that are not due to factors including performance evaluation and management of the Class on a fair value basis.
Presentation of financial instruments – The Class’ shares are classes in the Corporation. The classes will not participate pro rata in the
residual net assets of the Corporation in the event of the Corporation’s liquidation and they do not have identical features. Consequently, the
Class’ outstanding redeemable shares are classified as financial liabilities in accordance with the requirements of IAS 32 – Financial Instruments
– Presentation (IAS 32).
Determination of Relationship with Underlying Funds – The Class has made significant judgments when determining the nature of its
relationship with any Underlying Fund in accordance with IFRS 10 – Consolidated financial statements (IFRS 10) and IAS 28 – Investment
in associates and joint ventures (IAS 28). These judgments centre upon identifying the Class’ ability to control or significantly influence any
Underlying Fund. In both determinations, the Class looks at the relevant activities of any Underlying Fund such as voting rights, participation in
policy choices and material cash flows such as subscription and redemption proceeds. The Class has determined that it does not have the ability
to control nor exercise significant influence on any Underlying Fund due to the Class’ inability to exercise its voting rights and direct or participate in the financial and operating policy decisions of any Underlying Fund.
Investment Valuation – Investments are designated at their fair value through profit or loss in accordance with IAS 39 and are carried at their
fair value.
The Class categorizes the inputs to valuation techniques used to fair value its investments into a disclosure hierarchy consisting of three levels as
shown below:
Level 1 – quoted prices in active markets for identical investments
Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)
Level 3 – unobservable inputs (including the Class’ own assumptions based on the best information available)
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. There were no significant
transfers between Level 1 and Level 2 during the periods. The aggregate value of investments by input level, as at November 30, 2015, November
30, 2014 and December 1, 2013, as well as a roll forward of Level 3 securities, where applicable, is included at the end of the Class’ Schedule of
Investments.
Valuation techniques used to value the Class’ investments by major category are as follows:
Investment in any Underlying Fund is valued at its closing net asset value per unit (NAVPU) each business day and is categorized as Level 1 in
the hierarchy.
Cash – Cash is comprised of cash on deposit and may include cash equivalents which are short-term debt instruments with terms to maturity
of less than 90 days at acquisition which are held for the purpose of meeting short-term cash commitments. Foreign currencies are comprised
of cash amounts denominated in currencies other than Canadian dollars, which are on deposit with the custodian to facilitate the settlement of
foreign denominated security transactions. Cash is carried at amortized cost which approximates its fair value. The Class did not hold any cash
equivalents as at November 30, 2015, November 30, 2014 and December 1, 2013.
Impairment of Financial Assets – At each reporting date, the Class assesses whether there is objective evidence that a financial asset carried
at amortized cost is impaired. If such impairment exists, the Class recognizes the difference between the amortized cost of the financial assets
and the present value of the estimated future cash flows, discounted using the instrument’s original effective interest rate as an impairment loss
on the Statements of Comprehensive Income. Such impairment losses are reversed in subsequent periods in the Statements of Comprehensive
Income if the conditions that lead to the initial recognition of the loss diminish or cease to exist.
Other Assets and Liabilities – Other assets and liabilities may include amounts due to or from the custodian, affiliates or other counterparties for accrued income, investment transactions, share transactions, accrued expenses and other unsettled transactions at period end. These
amounts are classified as loans and receivables or financial liabilities and are carried at amortized cost, which approximates fair value due to
their short-term nature.
Classification of redeemable shares issued by the Class – The Class’ redeemable shares are equally subordinated to each other, but have
differing features as outlined in the notes below, and will not participate pro rata in the residual net assets of the Corporation in the event of the
Corporation’s liquidation. Therefore, in accordance with IAS 32, the Class’ redeemable shares do not meet the criteria for classification as equity
and have been classified as financial liabilities on the Statements of Financial Position. The Class’ obligation for net assets attributable to holders
of redeemable shares is recorded at the redemption amount. As at November 30, 2015, November 30, 2014 and December 1, 2013, the Class’ net
Annual Reportport
10
asset value per Series per share may differ by less than $0.01 from its net assets attributable to holders of redeemable shares per Series per share
calculated in accordance with IFRS as a result of normal reporting period end procedures to close off the books and records.
Investment Transactions, Income Recognition and Transaction Costs – Regular way purchases and sales of financial assets are recognized at their trade date. The cost of investments is determined on an average cost basis, excluding commissions and other portfolio transaction
costs. Income from investments is recognized on an accrual basis. Distributions from any Underlying Fund, if any, are recognized on the ex-dividend date by the Class in the same form that they were distributed. Net realized gains and losses from the sale of investments and change in net
unrealized appreciation (depreciation) on investments are calculated with reference to average cost of the related investment securities which
exclude transaction costs and may include proceeds received from litigation.
Transaction costs, such as brokerage commissions, incurred in the purchase and sale of securities by the Class are recognized as “Commissions
and other portfolio costs” in the Statements of Comprehensive Income.
Foreign Currency Translation – Securities and other assets and liabilities denominated in a foreign currency are translated into Canadian dollars at the period-end exchange rates. Purchases and sales of securities, income and expenses denominated in foreign currencies are translated
into Canadian dollars at the exchange rate on the date of the respective transaction. The effects of exchange rate fluctuations on investments are
included in the “Net realized gain (loss) and change in net unrealized appreciation (depreciation) on investments” and exchange rate fluctuations on other foreign currency transactions are included in the “Net realized gain (loss) on foreign currency transactions” and “Change in net
unrealized appreciation (depreciation) on other net assets in foreign currencies” in the Statements of Comprehensive Income.
Valuation of Series – Separate net assets attributable to holders of redeemable shares is calculated for each Series of shares in the Class. The
net assets attributable to holders of redeemable shares of a Series is computed by calculating the Series’ proportionate share of the assets and
liabilities of the Class common to all Series, adjusted for the assets and liabilities of the Class attributable only to that Series. Expenses directly
attributable to a Series are charged to that Series. Investment income and operating expenses are allocated proportionately to each Series based
upon the relative net assets attributable to holders of redeemable shares of each Series, except for items that can be specifically attributed to one
or more Series.
Per Share from Operations - The increase (decrease) in net assets attributable to holders of redeemable shares resulting from operations per
share in the Statements of Comprehensive Income represent the increase (decrease) in net assets attributable to holders of redeemable shares
resulting from operations for each Series of the Class, divided by the weighted average shares outstanding for each Series of the Class during the
period as follows:
Weighted
Average
Shares
Period ended November 30, 2015
Series A
Series B
Series F
Series F5
Series F8
Series T5
Series T8
Series S5
Series S8
Period ended November 30, 2014
Series A
Series B
Series F
Series F5
Series F8
Series T5
Series T8
Series S5
Series S8
362
1,039
157
—
4
5
12
1
2
518
1,211
169
—
3
—
1
—
3
Statements of Cash Flows – When preparing the Statements of Cash Flows, the Class nets the rollover activity of its short-term investments,
and includes only the net cash flow impact in “Purchases of investments” or “Proceeds from sale and maturity of investments”, as applicable.
11
Annual Report
Notes to Financial Statements – continued
(Amounts in thousands of Canadian dollars except per unit amounts)
Additionally, in accordance with IFRS, the Class’ Statements of Cash Flows excludes non-cash transactions from its operating and financing
activities.
Recent Accounting Pronouncements – The final version of IFRS 9, Financial Instruments, was issued by the IASB in July 2014 and will
replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 introduces a model for classification and measurement, a single,
forward-looking expected loss’ impairment model and a substantially reformed approach to hedge accounting. The new single, principle based
approach for determining the classification of financial assets is driven by cash flow characteristics and the business model in which an asset is
held. The new model also results in a single impairment model being applied to all financial instruments, which will require more timely recognition of expected credit losses. It also includes changes in respect of an entity’s own credit risk in measuring liabilities elected to be measured at
fair value, so that gains caused by the deterioration of an entity’s own credit risk on such liabilities are no longer recognised in profit or loss. IFRS
9 is effective for annual periods beginning on or after January 1, 2018, however is available for early adoption. In addition, the entity’s own credit
risk changes can be early applied in isolation without otherwise changing the accounting for financial instruments. The Class is in the process of
assessing the impact of IFRS 9 and has not yet determined when it will adopt the new standard.
4. Expenses and Other Related Party Transactions
Management Fee – Fidelity serves as manager of the Class. The Class pays Fidelity a monthly management fee for its services and the provision of key management personnel to the Class, based on the net asset value of each Series, calculated daily and payable monthly. To avoid
duplication of fees, Series O units of any Underlying Fund are not subject to a management fee. The annual management fee rates for each Series
were as follows:
Annual
Management
Fee Rate (%)
Series
Series
Series
Series
Series
Series
Series
Series
Series
A
B
F
F5
F8
T5
T8
S5
S8
2.00
1.85
0.85
0.85
0.85
2.00
2.00
1.85
1.85
Administration Fee - Fidelity charges the Class a fixed administration fee in place of certain variable expenses and the provision of key management personnel to the Class. Fidelity, in turn, pays all of the operating expenses of the Class, other than certain specified class costs, including
the fees and expenses of the Independent Review Committee (IRC), taxes, brokerage commissions and interest charges. The administration fee
is in addition to the management fee. To avoid duplication of fees, Series O units of any Underlying Fund are not subject to the Administration
fee. The annual rate of the administration fee will fall under one of three tiers, depending on the net asset value of the Class: Under $100 Million
(Tier 1), $100 Million to $1 Billion (Tier 2) and Over $1 Billion (Tier 3). The administration fee is calculated as a fixed annual percentage,
accrued daily and payable monthly, of the net asset value of each Series as follows:
Series A
Series B
Series F
Series F5
Series F8
Series T5
Series T8
Series S5
Series S8
Tier 1 (%)
Tier 2 (%)
Tier 3 (%)
0.310
0.260
0.230
0.230
0.230
0.310
0.310
0.260
0.260
0.300
0.250
0.220
0.220
0.220
0.300
0.300
0.250
0.250
0.290
0.240
0.210
0.210
0.210
0.290
0.290
0.240
0.240
Prior to March 27, 2015, the administration fee was calculated as a fixed annual percentage of the net asset value of each Series as follows:
Annual Reportport
12
Series A
Series B
Series F
Series F5
Series F8
Series T5
Series T8
Series S5
Series S8
Tier 1 (%)
Tier 2 (%)
Tier 3 (%)
0.312
0.262
0.234
0.234
0.234
0.311
0.311
0.261
0.261
0.302
0.252
0.234
0.234
0.234
0.301
0.301
0.251
0.251
0.292
0.242
0.234
0.234
0.234
0.291
0.291
0.241
0.241
Independent Review Committee Fees – The IRC, as required under National Instrument 81-107, reviews conflict of interest matters referred
to it by the manager and provides recommendations or approves actions, as appropriate, that are in the best interest of the funds. There are currently four members of the IRC who are independent of Fidelity and its affiliates. IRC members are compensated by way of an annual retainer fee
and a per meeting attendance fee, as well as reimbursed for expenses associated with IRC duties. These costs are allocated among the individual
classes proportionately by assets.
Sales Tax – Certain provinces have harmonized their Provincial Sales Tax (PST) with the federal Goods and Services Tax (GST).The
Harmonized Sales Tax (HST) combines the GST rate of 5% with the PST rate of certain provinces. The Provincial HST liability or refund is calculated using the residency of shareholders and the value of their interests in the Class as at specific times, rather than the physical location of the
Class. The effective GST/HST rate charged to each Series of the Class is based on the shareholders’ proportionate investments by province, using
each province’s HST rate or GST rate in the case of non-participating provinces. All amounts are included in the Statements of Comprehensive
Income as Sales tax.
Expenses Waived – Fidelity may absorb or waive certain expenses at its sole discretion. Fidelity can terminate the absorption or waiver at any
time. Effective November 1, 2014, the manager of the Class waived a portion of its administration fee. The expenses absorbed or waived during
the periods are disclosed as “Expenses waived” in the Statements of Comprehensive Income, if applicable.
5. Taxation and Dividends
The Corporation qualifies as a mutual fund corporation under the provisions of the Income Tax Act (Canada). The Corporation is a single
legal entity for tax purposes and is not taxed on a class by class basis. The Corporation has a taxation year–end of November 30 and will pay all
Canadian dividends, if any, earned in the year on or about November 30. In addition, the Corporation will pay, if necessary, capital gains dividends
within 60 days of year–end, to ensure the Corporation is not subject to income tax on its net realized capital gains and other income earned
during the year. As a result, the Corporation and each Class in substance is tax exempt and does not record income taxes under IAS 12 – Income
Taxes (IAS 12) and accordingly does not recognize the deferred tax benefit associated with tax loss carry forwards and other taxable temporary
differences.
Dividends, if any, are declared separately for each Series.
Capital losses of the Corporation may be applied against the capital gains attributable to the Corporation as a whole irrespective of the class from
which the gains or losses arise. Non-capital losses attributable to any particular series of a class may be applied against income or taxable income
attributable to any series of a class.
As at the last taxation year-end, the Corporation had no capital losses and no non-capital losses available to be carried forward for up to 20
tax years.
6. Capital Risk Management
Shares issued and outstanding are considered to be the capital of the Class. The capital of each series of the Class is divided into an unlimited
number of shares of equal value, with no par value. All shares in a series of the Class rank equally with respect to distributions. A shareholder of
the Class is entitled to one vote for each one dollar in value of shares owned. Fractional shares are proportionately entitled to these rights. The
Class generally has no restrictions or specific capital requirements on the subscriptions and redemptions of shares other than minimum subscription requirements; although, on rare occasions, Fidelity may temporarily suspend shareholders’ right to redeem shares and postpone paying sale
proceeds. The relevant movements attributable to shareholders are shown in the Statements of Changes in Net Assets Attributable to Holders of
Redeemable Shares. In accordance with the objectives and the risk management policies outlined in the Financial Instruments Risk notes, the
Class endeavors to invest the subscriptions received in appropriate investments while maintaining sufficient liquidity to meet redemptions. Such
liquidity is managed by investing the majority of assets in investments that can be readily disposed and via the Class’ ability to borrow up to 5% of
its net asset value.
13
Annual Report
Notes to Financial Statements – continued
(Amounts in thousands of Canadian dollars except per unit amounts)
Share Transactions - Share transactions for each Series were as follows:
Shares
Outstanding,
Beginning of
Period
Period ended November 30, 2015
Series A
Series B
Series F
Series F5
Series F8
Series T5
Series T8
Series S5
Series S8
Period ended November 30, 2014
Series A
Series B
Series F
Series F5
Series F8
Series T5
Series T8
Series S5
Series S8
Issued
Reinvested
Redeemed
Shares
Outstanding,
End of Period
441
1,137
173
–
4
–
2
–
3
29
139
72
–
–
7
24
1
2
4
10
2
–
–
–
–
–
–
(157)
(393)
(76)
–
–
(2)
(5)
–
(2)
317
893
171
–
4
5
21
1
3
632
1,293
165
–
–
–
–
–
2
42
171
62
–
4
–
2
–
5
4
9
2
–
–
–
–
–
–
(237)
(336)
(56)
–
–
–
–
–
(4)
441
1,137
173
–
4
–
2
–
3
Affiliated Ownership - As at November 30, 2015 and November 30, 2014, Fidelity and its affiliates held less than 1% of the Class.
7. Financial Instruments Risk
The Class’ activities expose it to a variety of financial instruments risks: credit risk, liquidity risk, other price risk, interest rate risk and currency
risk. FIAM seeks to minimize potential adverse effects of these performance risks by employing professional, experienced portfolio advisors, by
daily monitoring of positions and market events, and by diversifying the investment portfolio within the constraints of the investment mandate.
The Class and any Underlying Fund may use derivative financial instruments to moderate certain risk exposures.
Risk, as defined by FIAM, is the mismatch of certain risk factors, such as the market capitalization, beta, common factors such as size, priceearnings ratio, price-to-book ratio and industry exposures, between a portfolio and its benchmark. Such mismatches may result in divergence of
returns relative to the benchmark. Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as
a whole. A beta of 1 indicates that the security’s price will move with the market. A beta of less than 1 means that the security will be less volatile
than the market. A beta of greater than 1 indicates that the security’s price will be more volatile than the market. For example, if a stock’s beta is
1.2, it’s theoretically 20% more volatile than the market.
FIAM’s objective is to provide consistent value-added return over the benchmark. Unsystematic risk is mitigated primarily through investments
in a diverse portfolio of securities across many sectors, styles or regions of the market. FIAM’s qualitative fundamental security selection is also
well diversified across many analysts. Rather than relying on a single valuation process or quantitative model that implicitly assumes that past
value-added returns of some sectors or styles will persist into the future, FIAM’s analysts select securities based on their own unique valuation
processes.
The Class aims to achieve long-term capital growth and seeks a similar return to its Underlying Fund, Fidelity Canadian Opportunities Fund,
by investing substantially all of its assets in units of the Underlying Fund. The Class’ and the Underlying Fund’s benchmark is the S&P/TSX
Completion Index.
The Underlying Fund aims to achieve long-term capital growth by investing primarily in equity securities of Canadian companies.
Portfolio risk is monitored daily and reviewed monthly by an investment compliance group. In addition, there is a formal quarterly review of each
fund. The investment compliance group, portfolio managers and the senior analysts attend a quarterly portfolio review. Portfolios within each
strategy are reviewed relative to each other and to their benchmark. Active industry and security allocations are analyzed.
Credit Risk - Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has
entered into with the Class. The Class’ own credit risk in the case of financial liabilities and a counterparty’s credit risk in the case of financial
assets are considered, where applicable, in determining the fair value of financial assets and financial liabilities. The Class may be exposed
to indirect credit risk through its investments in any Underlying Fund. In addition, as part of its cash management, the Class limits its direct
Annual Reportport
14
exposure to credit loss by placing its cash with high credit quality financial institutions. The carrying amount of investments and other assets
represents the maximum credit risk exposure as at November 30, 2015, November 30, 2014 and December 1, 2013.
Other than outlined above, there were no significant concentrations of credit risk to counterparties as at November 30, 2015, November 30, 2014
and December 1, 2013.
Concentration Risk - FIAM analyzes credit concentration based on the counterparty, industry and/or geographical location of the financial
assets that the Class holds. The following tables summarize the investment concentration risks that are relevant for the Class based on its investment objective, which it is exposed to through its investment in any Underlying Fund.
Sector Mix
% of Class’
Net Assets as
at 11/30/15
Energy
Information Technology
Financials
Consumer Discretionary
Consumer Staples
Materials
Telecommunication Services
Industrials
Investment Companies
Others (Individually Less Than 1%)
Foreign Bonds
Canadian Bonds
Cash and Short-Term Investments
Net Other Assets (Liabilities)
24.0
13.3
10.9
10.4
10.2
5.6
3.9
2.4
1.9
0.0
1.8
0.8
15.2
(0.4)
% of Class’
Net Assets as
at 11/30/14
14.6
16.7
8.5
15.9
19.5
7.6
4.2
4.1
0.0
0.3
0.0
0.0
10.3
(1.7)
% of Class’
Net Assets as
at 12/1/13
11.5
13.3
7.5
9.5
21.3
9.0
3.1
3.2
0.0
6.9
0.0
0.0
14.9
(0.2)
Market Capitalization
% of Class’
Net Assets as
at 11/30/15
Large
Mid
Small
16.3
25.3
36.5
% of Class’
Net Assets as
at 11/30/14
19.0
29.6
38.0
% of Class’
Net Assets as
at 12/1/13
17.3
28.4
38.9
Market Capitalization is a measure of the size of a company. It is calculated by multiplying the current share price by the number of outstanding
common shares of the company. The Class defines small cap as less than $2 billion, mid cap as between $2 billion and $10 billion, and large cap as
over $10 billion in capitalization.
Geographic Mix
% of Class’
Net Assets as
at 11/30/15
Canada
United States of America
United Kingdom
Others (Individually Less Than 1%)
Cash and Short-Term Investments
Net Other Assets (Liabilities)
75.6
6.2
1.2
2.2
15.2
(0.4)
% of Class’
Net Assets as
at 11/30/14
81.6
5.8
1.4
2.6
10.3
(1.7)
% of Class’
Net Assets as
at 12/1/13
77.7
6.2
0.5
0.9
14.9
(0.2)
FIAM regularly monitors the relative weights of individual securities, sectors, countries, and also monitors the market capitalization and trading
liquidity of each holding.
Liquidity Risk - Liquidity risk is defined as the risk that the Class may not be able to settle or meet its obligations on time or at a reasonable
price. The Class is exposed to daily cash redemptions of redeemable shares. Redeemable shares are redeemed on demand at the shareholder’s
option based on the Class’ net asset value per share (NAVPS) at the time of redemption.
15
Annual Report
Notes to Financial Statements – continued
(Amounts in thousands of Canadian dollars except per unit amounts)
In accordance with securities regulations, investment funds must maintain at least 90% of assets in liquid investments; investments that are
traded in an active market and can be readily disposed of. In addition, the Class aims to retain sufficient cash and short-term investments to
maintain liquidity, and has the ability to borrow up to 5% of its net asset value from the custodian for the purpose of funding redemptions.
The Class and any Underlying Fund may, from time to time, invest in securities that are not traded in an active market and may be illiquid.
Private and/or restricted securities held, if any, are identified in the Fund’s and any Underlying Fund’s Schedule of Investments as at their respective period ends. The liquidity position of the Class and any Underlying Fund is monitored on a daily basis.
As at November 30, 2015, November 30, 2014 and December 1, 2013, the Class did not have financial liabilities with maturities greater than 3
months.
Other Price Risk - Other price risk is the risk that the value of financial instruments will fluctuate as a result of changes in market prices
(other than those arising from interest rate risk or currency risk on monetary instruments), whether caused by factors specific to an individual
investment, its issuer, or other factors affecting all instruments traded in a market or market segment. All securities present a risk of loss of
capital. The Class and any Underlying Fund moderate this risk through a careful selection of securities and other financial instruments within the
parameters of the investment strategy. The maximum risk resulting from financial instruments is equivalent to their fair value. The Class’ and any
Underlying Fund’s investments are susceptible to other price risk arising from uncertainties about future prices of the instruments.
If the benchmark had increased or decreased by 5% on November 30, 2015, November 30, 2014 and December 1, 2013, with all other variables
held constant, the net assets attributable to holders of redeemable shares of the Class would have increased or decreased by approximately $903
(November 30, 2014: $853 and December 1, 2013: $1,497). This change is estimated using the Class’ beta which is calculated based on the historical correlation between the return of the Class as compared to the return of the benchmark. In practice, the actual trading results may differ
from this sensitivity analysis and the difference could be material.
Interest Rate Risk - Interest rate risk arises on interest-bearing financial instruments held in the investment portfolio such as bonds. The Class
and any Underlying Fund are exposed to the risk that the fair value or the future cash flows of interest-bearing financial instruments will fluctuate due to changes in the prevailing levels of market interest rates. Any excess cash and cash equivalents are invested in short-term investments
at market interest rates. The majority of the Class’ and any Underlying Fund’s financial assets and liabilities are non-interest bearing. As a result,
the Class is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates.
Currency Risk - Currency risk arises from financial instruments that are denominated in a currency other than Canadian dollar, which is the
Class’ and any Underlying Fund’s functional currency.
The Class and any Underlying Fund are exposed to the risk that the value of financial instruments denominated in other currencies will fluctuate
due to changes in exchange rates. Currency risk is not considered to arise from financial instruments that are non-monetary items such as equity
investments, or forward foreign exchange contracts related to such non-monetary items. The Class considers the foreign exchange exposure relating to non-monetary assets and liabilities to be a component of other price risk, not foreign currency risk. As a result, the Class is not subject to
significant amounts of risk due to fluctuations in exchange rates.
8. Transition to IFRS
These financial statements are the Class’ first annual financial statements prepared under IFRS. For all accounting periods prior to this, the Class
prepared its financial statements under Canadian GAAP. In accordance with IFRS 1 – First time adoption of IFRS, certain disclosures relating to
the transition to IFRS are given in this note. The general principle under IFRS 1 is that an entity must prepare its IFRS compliant financial statements as if the entity had always been applying IFRS (i.e. retrospective application). IFRS 1 does however provide mandatory exceptions and
certain optional exemptions that requires or allows first time adopters to deviate from the retrospective application of IFRS.
IFRS 1 exemptions and exceptions applied - IFRS 1 allows first time adopters of IFRS certain exemptions from full retrospective application of IFRS. The Class has elected to apply the following optional exemptions from full retrospective application.
IAS 39 – Designation of previously recognised financial instruments - IFRS 1 allows adopters to designate, at the date of transition to
IFRS, a financial asset or financial liability as at fair value through profit or loss. All financial assets designated at fair value through profit or
loss upon the transition date, were previously carried at fair value under Canadian GAAP as required by Accounting Guideline 18, Investment
Companies.
IAS 32 Financial Instruments: Presentation - The Class’ shares are classes in the Corporation. The classes will not participate pro rata in
the residual net assets of the Corporation in the event of the Corporation’s liquidation and they do not have identical features. Consequently, the
Class’ outstanding redeemable shares are classified as financial liabilities in accordance with the requirements of IAS 32 – Financial Instruments
– Presentation (IAS 32).
IAS 7 – Statements of Cash Flows – IAS 7 – Statements of Cash Flows; under IFRS the Class is required to present a Statement of Cash
Flows, including comparative information.
Annual Reportport
16
Reconciliation of IFRS Transitional Adjustments to Previously Reported Canadian GAAP - As a result of the retrospective application
of IAS 32, the impact on the Class’ financial position, comprehensive income, and changes in net assets attributable to holders of redeemable
shares are as follows:
Statements of Financial Position
Net assets, representing shareholders’ equity
Revaluation of investments
Net assets attributable to holders of redeemable shares
As at
November 30,
2014 ($)
As at
December 1,
2013 ($)
41,609
—
41,609
45,560
—
45,560
For the
period ended
November 30,
2014 ($)
Statements of Comprehensive Income
Increase (decrease) in net assets from operations
Change in net unrealized appreciation (depreciation) upon revaluation of investments
Increase (decrease) in net assets attributable to holders of redeemable shares from operations
4,016
–
4,016
9. Investment in Structured Entities
The Class’ investment in any Underlying Fund represents an interest in a structured entity. A structured entity is an entity that has been designed
so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements such as those agreements executed by a Class
with its manager and portfolio advisor.
An Underlying Fund is financed through the issuance of its redeemable trust units. In addition, the purpose of any Underlying Fund is to provide
investment management services to its unitholders by investing its net assets for capital growth and/or investment income.
The Class has assessed its ability to control or significantly influence any Underlying Fund in accordance with IFRS 10 and IAS 28. The Class
has determined that it does not have the ability to control nor exercise significant influence on an Underlying Fund due to the Class’ inability to
exercise its voting rights and direct or participate in the financial and operating policy decisions of an Underlying Fund.
The maximum risk of loss in an investment in an Underlying Fund is equal to its fair value and carrying value which is outlined in the tables
below and included in “Investments” on the Statements of Financial Position. There is no difference between the maximum risk of loss and the
carrying amounts of the assets and liabilities of an Underlying Fund that relate to the Class’ interests. There are additional risks associated with
an investment in an Underlying Fund. Refer to the Financial Instruments Risk note for further discussion.
In the normal course of operations to fulfil its investment objective, the Class will, from time to time, subscribe for additional units issued by an
Underlying Fund or redeem in whole or in part its investment in an Underlying Fund. In addition, the Class may receive a distribution of income
from an Underlying Fund as described above in the Investment Transactions, Income Recognition and Transaction Costs note. The Class does not
have any obligation or intention to provide financial support to an Underlying Fund.
The following tables present additional information that is relevant to the Class’ investment in structured entities:
November 30, 2015
Fidelity Canadian Opportunities Fund Series O
November 30, 2014
Fidelity Canadian Opportunities Fund Series O
December 1, 2013
Fidelity Canadian Opportunities Fund Series O
17
Total Net
Assets ($)
Fair Value of
Investment ($)
702,838
31,155
766,129
41,609
811,760
45,349
Annual Report
Management Report and Independent Auditor’s Report
Management Responsibility for Financial Reporting
To the Shareholders of Fidelity Canadian Opportunities Class (Class) of the Fidelity Capital Structure Corp. (Corporation)
The accompanying financial statements have been prepared by management of the Corporation and approved by the Board of Directors of Fidelity
Capital Structure Corp. Management is responsible for the information and representations contained in these financial statements.
Fidelity maintains appropriate processes to ensure that relevant and reliable financial information is produced. The financial statements have
been prepared in accordance with International Financial Reporting Standards and include certain amounts and disclosures that are based on
estimates and judgments. The significant accounting policies, which management believes are appropriate for the Class, are described in Note 3
to the financial statements.
PricewaterhouseCoopers LLP is the external auditor of the Class. They have audited the financial statements in accordance with Canadian
generally accepted auditing standards to enable them to express to the shareholders their opinion on the financial statements. Their report is set
out below.
Gordon Thomson
Philippe Potvin
Chief Executive Officer
February 9, 2016
Chief Financial Officer
February 9, 2016
Independent Auditor’s Report
To the Shareholders of Fidelity Canadian Opportunities Class (Class) of the Fidelity Capital Structure Corp. (Corporation)
We have audited the accompanying financial statements of the Class, which comprise the statements of financial position as at November 30,
2015, November 30, 2014 and December 1, 2013 and the statements of comprehensive income, changes in net assets attributable to holders of
redeemable shares and cash flows for the years ended November 30, 2015 and 2014, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial
Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with Canadian
generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Class as at November 30, 2015,
November 30, 2014 and December 1, 2013 and its financial performance and its cash flows for the years ended November 30, 2015 and 2014 in
accordance with International Financial Reporting Standards.
PricewaterhouseCoopers LLP
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Ontario
February 9, 2016
Annual Reportport
18
19
Annual Report
Fidelity Capital Structure Corp.
407 2nd Street S.W., Suite 820
Calgary, Alberta T2P 2Y3
Manager and Registrar
Fidelity Investments Canada ULC
483 Bay Street, Suite 300
Toronto, Ontario M5G 2N7
Custodian
State Street Trust Company of Canada
Toronto, Ontario
Auditor
PricewaterhouseCoopers LLP
Toronto, Ontario
Visit us online at
www.fidelity.ca
or call Fidelity Client Services
at 1-800-263-4077
Fidelity’s mutual funds are sold by registered Investment Professionals. Each Fund has a simplified prospectus, which contains important
information on the Fund, including its investment objective, purchase options, and applicable charges. Please obtain a copy of the prospectus,
read it carefully, and consult your Investment Professional before investing. As with any investment, there are risks to investing in mutual
funds. There is no assurance that any Fund will achieve its investment objective, and its net asset value, yield, and investment return will
fluctuate from time to time with market conditions. Investors may experience a gain or loss when they sell their units in any Fidelity Fund.
Fidelity Global Funds may be more volatile than other Fidelity Funds as they concentrate investments in one sector and in fewer issuers; no
single Fund is intended to be a complete diversified investment program. Past performance is no assurance or indicator of future returns.
There is no assurance that either Fidelity Canadian Money Market Fund or Fidelity U.S. Money Market Fund will be able to maintain its net
asset value at a constant amount. The breakdown of Fund investments is presented to illustrate the way in which a Fund may invest, and may
not be representative of a Fund’s current or future investments. A Fund’s investments may change at any time.
®Fidelity
Investments is a registered trademark of FMR LLC.
62.107451E
1.810639.111
FICL-CO-CS-ANN-0216