Fidelity Funds Q2 2024 Review: Overseas and Multi-Asset Income Performance

Fidelity Overseas Fund Q2 2024 Review

While attempting to forecast the macroeconomic environment is not particularly helpful as it relates to picking stocks, we do believe it's beneficial to step back and understand where we are today. Investment Approach Fidelity® Overseas Fund is a diversified international equity strategy that seeks long-term capital growth. The fund's philosophy centers around owning high-quality companies purchased at attractive prices that can outperform the market over the long term, given their ability to compound value through the re-investment of earnings back into the business at attractive returns. By focusing on buying these companies at inexpensive valuations, we attempt to build in an inherent margin of safety in the investment. We particularly favor firms with unique business models that are able to generate sustainably high returns on capital through a full business cycle and are trading at a discount to their intrinsic (fair) value based on several conservative valuation frameworks. We strive to uncover these companies through in-depth fundamental analysis, working in concert with Fidelity's global research team, as well as by leveraging the fund manager's own independent analysis. 1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 12/04/1984. 2 This expense ratio is from the most recent prospectus and generally is based on amounts incurred during the most recent fiscal year, or estimated amounts for the current fiscal year in the case of a newly launched fund. It does not include any fee waivers or reimbursements, which would be reflected in the fund's net expense ratio. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. Performance shown is that of the fund's Retail Class shares (if multiclass). You may own another share class of the fund with a different expense structure and, thus, have different returns. To learn more or to obtain the most recent month-end or other share-class performance, visit Fidelity Funds | Mutual Funds from Fidelity Investments, Financial Professionals | Fidelity Institutional, or Fidelity NetBenefits | Employee Benefits. Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated. For definitions and other important information, please see the Definitions and Important Information section of this Fund Review. Click to enlarge Performance Review For the three months ending June 30, 2024, the fund's Retail Class shares gained 0.05%, modestly topping the -0.30% return of the benchmark MSCI EAFE Index. International developed-market stocks finished the second quarter with a moderate decline. Equities in Europe ex U.K., which comprised about 51% of the benchmark on average, registered a roughly -1% return. Specifically, gains in Denmark (+7%), the Netherlands (+5%) and Switzerland (+4%) led the way, whereas stock markets in France (-7%), Italy (-3%) and Germany (-1%), among others, experienced weakness. France's lagging performance was due in part to uncertainty caused by the lackluster showing of President Emmanuel Macron's governing coalition in European parliamentary elections, as well as his subsequent call for snap parliamentary elections in France. Positive factors aiding some markets included an expanding global economy, easing inflation and investor frenzy about generative artificial intelligence. In June, central banks in the European Union and Canada followed the lead of those in Switzerland, Sweden, Hungary, the Czech Republic and Brazil in lowering interest rates. While Canada, Hungary, the Czech Republic and Brazil are not part of the fund's benchmark, they reflect the broader trend in favor of central banks transitioning to more accommodative monetary policy. The U.K. (+4%) was one of the better-performing major components of the benchmark, with the bellwether FTSE 100 Index achieving fresh all-time highs. Performance of small and mid-sized stocks was notably helped by a flurry of buying, supported by market participants' expectations of a possible turning point for domestically-focused companies following a decade of underperformance. Meanwhile, Japanese equities (-4%) were relatively weak, mostly because of a down month in April, when the yen fell to fresh multiyear lows. This depreciation in Japan's currency was primarily driven by the strength of the U.S. dollar, which was supported by a stronger U.S. economy and the expectation of "higher for longer" interest rates. Compared with the benchmark, the fund benefited primarily from stock selection in Japan. Out-of-benchmark exposure to several emerging market economies, along with Canada, provided a bit of boost as well. By sector, investment choices in industrials added the most value, followed by consumer discretionary and information technology, to a lesser extent. At the individual stock level, an overweight in Tokio Marine Holdings (OTCPK:TKOMY)(OTCPK:TKOMF) (+20%) lifted the fund's relative performance most in Q2. The company is a property & casualty insurer with half of its business in Japan and half overseas. During the quarter, most of its businesses benefited from a positive pricing cycle in terms of insurance premiums. In addition, Tokio Marine has a significant amount of its balance sheet and market capitalization in cross shareholdings that it has committed to unwinding. The selling of these stakes should result in significant excess capital at the insurer, much of which will likely be returned to shareholders through dividends and stock buybacks. The position was a top-5 holding as of midyear. Avoiding benchmark component Toyota Motor also propelled the portfolio's relative result. Shares of the firm returned roughly -18% the past three months, slipping in early May after the automaker reported mixed financial results for the first quarter. Revenue surprised to the upside, while earnings were about in line with analysts' expectations, and the company's financial guidance for its next fiscal year was viewed as disappointing. Shares continued to slip in June, as Toyota and four other Japanese automakers were found to have provided incorrect or manipulated data when seeking government certifications on specific models, leading to the suspension of shipments for those models. On the other hand, picks in Europe ex U.K., plus an overweight allocation to France, worked against the fund's relative return this past quarter. Among sectors, investment choices among consumer staples and materials firms had the biggest negative impact on relative performance. Outsized exposure to IMCD Group (OTCPK:IMCDY) (-20%) was the foremost relative detractor in Q2. The company is a high-quality, Netherlands-based specialty chemicals distributor that the fund has owned for some time. The business encountered more challenging times since the world began to emerge from the pandemic, as many of its customers have been destocking. Still, we maintained the fund's overweight stake, given our positive long-term view. Elsewhere, a larger-than-benchmark position Shin-Etsu Chemical (OTCPK:SHECY)(OTCPK:SHECF) (-11%) also proved challenging the past three months. In late April, the Japan-based provider of materials and chemicals for semiconductor production and other manufacturing uses reported weaker-than-expected quarterly financial results amid slower business in its electronic materials and infrastructure materials units. That said, we added a bit to the position this period. Outlook and Positioning While attempting to forecast the macroeconomic environment is not particularly helpful as it relates to picking stocks, we do believe it's beneficial to step back and understand where we are today. Monetary policy is beginning to loosen after several years of unprecedented tightening. This is undoubtedly positive for businesses and markets alike, especially if we are easing into an improving economy, which would be rare but we believe is the current set-up. Fiscal policy also remains loose, which in many ways likely cushioned the impact of higher rates, and now with rates peaking, should at least be supportive of growth going forward. However, as we all know, too much of a good thing is a bad thing, and easing fiscal policy is what worries us most given that a return of inflation might cause markets to sell off. Equity valuations might be another headwind for investors. To that point, with the benchmark is trading slightly above its historical range, many of the positives mentioned above could already be priced in. On balance, though, we believe the positives outweigh the negatives as of midyear, and the path of least resistance for stocks is likely higher, albeit at a slower rate than earnings growth because we expect price-earnings ratios to compress as the cycle matures. The fund's top geographic overweights as of quarter end were the U.K., Ireland, France and the Netherlands. Outsized British positions of note include RELX (RELX), Linde (LIN), Compass Group (OTCPK:CMPGF)(OTCPK:CMPGY), London Stock Exchange Group (OTCPK:LDNXF) and Ferguson (FERG). Additionally, the fund had a roughly 4% out-of-benchmark stake in the U.S. on June 30. In contrast, the portfolio continued to maintain sizable underweights in Japan and Switzerland, while avoiding Australia altogether. In addition to not owning Toyota Motor at the midpoint of 2024, we also chose to avoid Mitsubishi UFJ Financial Group (MUFG), Keyence (OTCPK:KYCCF) and Sumitomo Mitsui Financial Group (SMFG), all Japanese stocks we thought were overvalued versus their earnings-growth prospects. Key underweights in Australia included BHP Group (BHP), Commonwealth Bank of Australia (OTCPK:CBAUF) and CSL (OTCQX:CSLLY). Turning to sectors, outsized exposure to information technology was noteworthy at the end of June, while the portfolio had much smaller overweights in industrials, financials, health care and materials. The remaining six sectors were underweights of varying degrees, the largest being consumer staples, communication services and consumer discretionary. As usual, these weightings were determined by where we were finding investment opportunities on a bottom-up, fundamental basis, not top-down decisions. Within tech specifically, software & services, as well as semiconductors & semiconductor equipment firms, represented meaningful areas of focus within the fund. On a stock-specific basis, these included ASML Holding (ASML), Constellation Software (OTCPK:CNSWF), Capgemini (OTCPK:CAPMF) and Taiwan Semiconductor Manufacturing (TSM). In industrials, we continued to emphasize commercial & professional services stocks. Overall, the fund's three largest overweights at quarter end were Tokio Marine Holdings, ASML Holding and Wolters Kluwer (OTCPK:WOLTF). Thank you for your confidence in us, and in Fidelity's investment-management capabilities. Net Other Assets can include fund receivables, fund payables, and offsets to other derivative positions, as well as certain assets that do not fall into any of the portfolio composition categories. Depending on the extent to which the fund invests in derivatives and the number of positions that are held for future settlement, Net Other Assets can be a negative number. "Tax-Advantaged Domiciles" represent countries whose tax policies may be favorable for company incorporation. Click to enlarge The 10 largest holdings are as of the end of the reporting period, and may not be representative of the fund's current or future investments. Holdings do not include money market investments. Click to enlarge Fund Information Manager(s): Vincent Montemaggiore Trading Symbol: FOSFX Start Date: December 04, 1984 Size (in millions): $10,934.25 Morningstar Category: Fund Foreign Large Growth 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, all of which are magnified in emerging markets. Definitions and Important Information Information provided in, and presentation of, this document are for informational and educational purposes only and are not a recommendation to take any particular action, or any action at all, nor an offer or solicitation to buy or sell any securities or services presented. It is not investment advice. Fidelity does not provide legal or tax advice. Before making any investment decisions, you should consult with your own professional advisers and take into account all of the particular facts and circumstances of your individual situation. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in these materials because they have a financial interest in them, and receive compensation, directly or indirectly, in connection with the management, distribution, and/or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services. Characteristics Earnings-Per-Share Growth Trailing measures the growth in reported earnings per share over trailing one- and five-year periods. Earnings-Per-Share Growth (IBES 1-Year Forecast) measures the growth in reported earnings per share as estimated by Wall Street analysts. Median Market Cap identifies the median market capitalization of the portfolio or benchmark as determined by the underlying security market caps. Price-to-Book (P/B) Ratio is the ratio of a company's current share price to reported accumulated profits and capital. Price/Cash Flow is the ratio of a company's current share price to its trailing 12-months cash flow per share. Price-to-Earnings (P/E) Ratio (IBES 1-Year Forecast) is the ratio of a company's current share price to Wall Street analysts' estimates of earnings. Price-to-Earnings (P/E) Ratio Trailing is the ratio of a company's current share price to its trailing 12-months earnings per share. Return on Equity (ROE) 5-Year Trailing is the ratio of a company's last five years historical profitability to its shareholders' equity. Preferred stock is included as part of each company's net worth. Sales-Per-Share Growth measures the growth in reported sales over the specified past time period. Weighted Average Market Cap identifies the market capitalization of the average equity holding as determined by the dollars invested in the portfolio or benchmark. Weighted Median Market Cap identifies the market capitalization of the median equity holding as determined by the dollars invested in the portfolio or benchmark. Important Fund Information Relative positioning data presented in this commentary is based on the fund's primary benchmark (index) unless a secondary benchmark is provided to assess performance. Indices It is not possible to invest directly in an index. All indices represented are unmanaged. All indices include reinvestment of dividends and interest income unless otherwise noted. MSCI EAFE Index (Net MA Tax) is a market-capitalization-weighted index that is designed to measure the investable equity market performance for global investors in developed markets, excluding the U.S. & Canada. Index returns are adjusted for tax withholding rates applicable to U.S. based mutual funds organized as Massachusetts business trusts (NR). Market-Segment Weights Market-segment weights illustrate examples of sectors or industries in which the fund may invest, and may not be representative of the fund's current or future investments. They should not be construed or used as a recommendation for any sector or industry. Ranking Information © 2024 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for mutual fund performance, you should check the fund's current prospectus for the most up-to-date information concerning applicable loads, fees and expenses. % Rank in Morningstar Category is the fund's total-return percentile rank relative to all funds that have the same Morningstar Category. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100. The top-performing fund in a category will always receive a rank of 1%. % Rank in Morningstar Category is based on total returns which include reinvested dividends and capital gains, if any, and exclude sales charges. Multiple share classes of a fund have a common portfolio but impose different expense structures. Relative Weights Relative weights represents the % of fund assets in a particular market segment, asset class or credit quality relative to the benchmark. A positive number represents an overweight, and a negative number is an underweight. The fund's benchmark is listed immediately under the fund name in the Performance Summary. 3-Year Risk/Return Statistics Beta is a measure of the volatility of a fund relative to its benchmark index. A beta greater (less) than 1 is more (less) volatile than the index. Information Ratio measures a fund's active return (fund's average monthly return minus the benchmark's average monthly return) in relation to the volatility of its active returns. R-Squared measures how a fund's performance correlates with a benchmark index's performance and shows what portion of it can be explained by the performance of the overall market/index. R-Squared ranges from 0, meaning no correlation, to 1, meaning perfect correlation. An R-Squared value of less than 0.5 indicates that annualized alpha and beta are not reliable performance statistics. Sharpe Ratio is a measure of historical risk-adjusted performance. It is calculated by dividing the fund's excess returns (the fund's average annual return for the period minus the 3-month "risk free" return rate) and dividing it by the standard deviation of the fund's returns. The higher the ratio, the better the fund's return per unit of risk. The three month "risk free" rate used is the 90-day Treasury Bill rate. Standard Deviation is a statistical measurement of the dispersion of a fund's return over a specified time period. Fidelity calculates standard deviations by comparing a fund's monthly returns to its average monthly return over a 36-month period, and then annualizes the number. Investors may examine historical standard deviation in conjunction with historical returns to decide whether a fund's volatility would have been acceptable given the returns it would have produced. A higher standard deviation indicates a wider dispersion of past returns and thus greater historical volatility. Standard deviation does not indicate how the fund actually performed, but merely indicates the volatility of its returns over time. Tracking Error is the divergence between the price behavior of a position or a portfolio and the price behavior of a benchmark, creating an unexpected profit or loss. Before investing in any mutual fund, please carefully consider the investment objectives, risks, charges, and expenses. For this and other information, call or write Fidelity for a free prospectus or, if available, a summary prospectus. Read it carefully before you invest. Past performance is no guarantee of future results. Views expressed are through the end of the period stated and do not necessarily represent the views of Fidelity. 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. The securities mentioned are not necessarily holdings invested in by the portfolio manager(s) or FMR LLC. References to specific company securities should not be construed as recommendations or investment advice. Diversification does not ensure a profit or guarantee against a loss. S&P 500 is a registered service mark of Standard & Poor's Financial Services LLC. Other third-party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917. Fidelity Distributors Company LLC, 500 Salem Street, Smithfield, RI 02917. © 2024 FMR LLC. All rights reserved. Not NCUA or NCUSIF insured. May lose value. No credit union guarantee. 655936.45.0 Click to enlarge Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. Fidelity's mission is to strengthen the financial well-being of our customers and deliver better outcomes for the clients and businesses we serve. Fidelity's strength comes from the scale of our diversified, market-leading financial services businesses that serve individuals, families, employers, wealth management firms, and institutions. With assets under administration of $12.6 trillion, including discretionary assets of $4.9 trillion as of December 31, 2023, we focus on meeting the unique needs of a broad and growing customer base. Privately held for 77 years, Fidelity employs more than 74,000 associates with its headquarters in Boston and a global presence spanning nine countries across North America, Europe, Asia and Australia.

Fidelity Multi-Asset Income Fund Q2 2024 Review

Security selection in the investment-grade bond sleeve modestly helped the past three months. Investment Approach Fidelity® Multi-Asset Income Fund is a flexible income-oriented strategy that invests tactically across a broad spectrum of income-producing securities, ranging from investment-grade bonds to dividend-paying equities. Unconstrained by target asset allocation profiles or benchmark weights, the fund dynamically pursues attractive income and value opportunities across asset classes, while closely monitoring interest rate, equity and credit risk. This flexibility helps the fund adapt to market conditions, with the goal of generating capital appreciation in rising markets and mitigating losses in declining markets. The fund brings Fidelity's specialists in income investing together in a single portfolio. The lead manager and co-managers work collaboratively to identify the optimal combination of securities, reflective of market conditions, in seeking to balance income potential versus risk. Each manager leverages specialized research teams to find the most compelling investment ideas within their respective areas of expertise. 1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 09/09/2015. 2 This expense ratio is from the most recent prospectus and generally is based on amounts incurred during the most recent fiscal year, or estimated amounts for the current fiscal year in the case of a newly launched fund. It does not include any fee waivers or reimbursements, which would be reflected in the fund's net expense ratio. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. Performance shown is that of the fund's Retail Class shares (if multiclass). You may own another share class of the fund with a different expense structure and, thus, have different returns. To learn more or to obtain the most recent month-end or other share-class performance, visit Fidelity Funds | Mutual Funds from Fidelity Investments, Financial Professionals | Fidelity Institutional, or Fidelity NetBenefits | Employee Benefits. Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated. For definitions and other important information, please see the Definitions and Important Information section of this Fund Review. Click to enlarge Market Review U.S. stocks gained 4.28% in the second quarter, according to the S&P 500® index, after shaking off a rough April and rising steadily due to resilient corporate profits, a frenzy over generative artificial intelligence and the Federal Reserve's likely pivot to cutting interest rates later this year. Amid this favorable backdrop for higher-risk assets, the index continued its late-2023 momentum and reached midyear just shy of its all-time closing high. Growth stocks led the narrow rally for the quarter, with only three of 11 sectors topping the broader market. In Q2, U.S. large-cap growth stocks once again topped the performance leaderboard, adding to a strong year-to-date gain in what was a relatively quiet three months for asset markets. In April, the S&P 500® returned -4.08%, as inflation remained stickier than expected, spurring doubts of a soft landing for the economy. Reversing course, the S&P 500® rose 4.96% in May. Tech stocks, particularly AI-related names, came back into focus, while the bull market finally began to reflect broader participation. At its June meeting, the Fed bumped up its inflation forecast and reduced its outlook from three cuts to one in 2024. The market followed suit, reducing its rate-cut expectations for the second straight quarter. Still, signs of inflation easing helped the index gain 3.59% for the month, boosting its year-to-date result to 15.29%. For the quarter, growth (+10%) shares within the index topped value (-2%), while large-caps handily bested smaller-caps. Meanwhile, U.S. taxable investment-grade bonds, as measured by the Bloomberg U.S. Aggregate Bond Index, gained 0.07% in the second quarter amid mixed economic data and the Fed's ongoing holding pattern. After returning -0.78% for the first three months of 2024, the index continued to reflect the market's downbeat sentiment into the start of Q2, returning -2.53% in April amid hotter-than-expected inflation and the Fed's "higher for longer" message on rates. With encouraging news on the inflation front in May and June, however, Chair Jerome Powell noted the progress but said the central bank needed further evidence that inflation was slowing to start cutting rates. In May and June, the index gained 1.70% and 0.95%, respectively. In Q2, returns were muted across major segments of the bond market. By quality rating, top-tier, AAA-rated investment-grade securities (+0.53%) fared best by a notable margin. Meanwhile, short-term maturities (1-3 Years) gained 0.95% and outpaced all longer-term issues. U.S. investment-grade corporate bonds (-0.09%) and agency mortgage-backed securities (+0.07%) trailed U.S. Treasurys (+0.10%) and government-related securities (+0.30%). Looking outside the Bloomberg index, preferred stocks returned -2.63%, while convertible securities returned -0.21%. U.S. corporate high-yield bonds (+1.09%), emerging-markets debt (+0.44%) and floating-rate loans (+1.90%) also advanced. Periods greater than one year are annualized. Source: FMR *Difference between best- and worst-performing asset classes over the given time period. You cannot invest directly in an index. Past performance is no guarantee of future results. Equities ex. Preferred Stock - S&P 500, Preferred Stock - ICE BofA Fixed Rate Preferred Securities Index, Convertibles - ICE BofA All U.S. Convertibles Index, High-Yield Bonds - ICE BofA U.S. High Yield Constrained Index, Bank Loans - S&P/LSTA Leveraged Performing Loan Index, Emerging-Markets Debt - J.P. Morgan Emerging Markets Bond Index Global, Investment-Grade Debt - Bloomberg U.S. Aggregate Bond Index Click to enlarge Performance Review For the quarter, the fund's Retail Class shares gained 1.33%, lagging the 2.18% advance of the Composite index, a 50/50 blend of the S&P 500® index and the Bloomberg U.S. Aggregate Bond Index. A non-Composite allocation to convertible securities (-9%) detracted from the fund's performance versus the Composite index the past three months. Also hampering our relative result was security selection and a large underweight in equities. The fund's stock holdings rose 3.68% for the quarter, trailing the broad-based S&P 500® index by 0.60 percentage points. Notable individual relative detractors included underweights in Nvidia (NVDA) (+37%), Apple (AAPL) (+23%) and Alphabet (GOOG) (+21%), as well as a non-Composite stake in Canadian Natural Resources (CNQ) (-6%). In contrast, non-Composite positions in Frontline (FRO) (+13%) and Agnico Eagle Mines (AEM) (+9%) contributed. Meanwhile, in terms of asset allocation, we increased our equity position by three percentage points the past three months but remained underweight the category throughout the quarter. This stance hampered our relative result, given the outperformance of stocks in Q2. Turning to notable relative contributors, it helped to underweight investment-grade bonds. Because this asset class trailed the Composite index by two percentage points, the fund's limited exposure to the category helped relative performance. Security selection in the investment-grade bond sleeve modestly helped the past three months. Outlook and Positioning In managing the fund, we seek opportunities in a wide variety of assets, caused by temporary mispricing of assets as investors overreact to fear or uncertainty. We want to "do more with less," meaning we're relying on Fidelity's skill and research capabilities to try to obtain total returns close to the historical average returns of stocks, but with much less downside risk. In Q2, changes to the portfolio were limited. We were finding increased opportunity in higher-quality, below-investment-grade floating-rate loans. We noted the high yields that these securities were offering - around 8% - as well as their limited interest rate risk. These provided what we saw as a desirable risk-reward trade-off. Meanwhile, the fund's equities grew, as we saw select opportunities in dividend-paying gold miners that, as the quarter progressed, had what we believed was too much bad news priced into their stocks and were offering a desirable yield. This shift also reflected our conviction that the AI trend is real and will continue to grow, and that demand for infrastructure such as data centers and utilities will increase to fuel the growth. In addition, we continued to see good opportunity among oil-tanker stocks, a theme in the portfolio for the past several quarters. Meanwhile, we continued to see some opportunity in convertibles. Coming into the year, we generally found the asset class richly valued, with low yield and equity sensitivity. However, we began to see some attractive deals come to market, specifically among those with high sensitivity to equities. Meanwhile, the fund's allocation to Treasurys went down a bit this quarter, reflecting our move away from longer-duration Treasurys and our view that more opportunity lay in the "belly" of the yield curve, referring to medium-duration Treasurys with a maturity of five to seven years. Net Other Assets can include fund receivables, fund payables, and offsets to other derivative positions, as well as certain assets that do not fall into any of the portfolio composition categories. Depending on the extent to which the fund invests in derivatives and the number of positions that are held for future settlement, Net Other Assets can be a negative number. Click to enlarge Net Other Assets can include fund receivables, fund payables, and offsets to other derivative positions, as well as certain assets that do not fall into any of the portfolio composition categories. Depending on the extent to which the fund invests in derivatives and the number of positions that are held for future settlement, Net Other Assets can be a negative number. Click to enlarge The 10 largest holdings are as of the end of the reporting period, and may not be representative of the fund's current or future investments. Holdings do not include money market investments. Click to enlarge Fund Information Manager(s): Adam Kramer Ford O'Neil Ramona Persaud Trading Symbol: FMSDX Start Date: September 09, 2015 Size (in millions): $2,590.22 Morningstar Category: Fund Moderately Conservative Allocation Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments all of which are magnified in emerging markets. Fixed income investments entail interest rate risk (as interest rates rise bond prices usually fall), the risk of issuer or counterparty default, issuer credit risk and inflation risk. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks all of which are magnified in emerging markets. Lower-quality bonds can be more volatile and have greater risk of default than higher-quality bonds. Floating rate loans may not be fully collateralized and therefore may decline significantly in value. Moreover, they may be subject to restrictions on resale and sometimes trade infrequently in the secondary market; as a result they may be more difficult to value, buy, or sell. If the fund's asset allocation strategy does not work as intended, the fund may not achieve its objective. Definitions and Important Information Information provided in, and presentation of, this document are for informational and educational purposes only and are not a recommendation to take any particular action, or any action at all, nor an offer or solicitation to buy or sell any securities or services presented. It is not investment advice. Fidelity does not provide legal or tax advice. Before making any investment decisions, you should consult with your own professional advisers and take into account all of the particular facts and circumstances of your individual situation. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in these materials because they have a financial interest in them, and receive compensation, directly or indirectly, in connection with the management, distribution, and/or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services. Broad Asset Class Returns A graphical representation of historical market performance and the variations in returns among asset classes, as represented by the following indexes: Bloomberg U.S. Aggregate Bond Index is a broad-based, market-value-weighted benchmark that measures the performance of the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. Sectors in the index include Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS. J.P. Morgan Emerging Markets Bond Index global tracks total returns for the U.S. dollar-denominated debt instruments issued by Emerging Market sovereign and quasi-sovereign entities, such as Brady bonds, loans, and Eurobonds. S&P 500 Index is a market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. S&P/LSTA Leveraged Performing Loan Index is a market value-weighted index designed to represent the performance of U.S. dollar-denominated institutional leveraged performing loan portfolios (excluding loans in payment default) using current market weightings, spreads and interest payments. ICE BofA All U.S. Convertibles Index is a market capitalization-weighted index of domestic U.S. corporate convertible securities, including mandatory convertible preferreds. ICE BofA Fixed Rate Preferred Securities Index is a market capitalization-weighted index of fixed rate US dollar denominated preferred securities issued in the US domestic market. Qualifying securities must have an investment grade rating (based on an average of Moody's, S&P and Fitch) and an investment grade rated country of risk. In addition, qualifying securities must be issued as public securities or through a 144a filing, must be issued. ICE BofA U.S. High Yield Constrained Index is a modified market capitalization-weighted index of US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody's, S&P and Fitch). The country of risk of qualifying issuers must be an FX-G10 member, a Western European nation, or a territory of the US or a Western European nation. The FX-G10 includes all Euro members, the US, Japan, the UK, Canada, Australia, New Zealand, Switzerland, Norway and Sweden. In addition, qualifying securities must have at least one year remaining to final maturity, a fixed coupon schedule and at least $100 million in outstanding face value. Defaulted securities are excluded. The index contains all securities of ICE BofA U.S. High Yield Index but caps issuer exposure at 2%. Characteristics Duration is a measure of a security's price sensitivity to changes in interest rates. Duration differs from maturity in that it considers a security's interest payments in addition to the amount of time until the security reaches maturity, and also takes into account certain maturity shortening features (e.g., demand features, interest rate resets, and call options) when applicable. Securities with longer durations generally tend to be more sensitive to interest rate changes than securities with shorter durations. A fund with a longer average duration generally can be expected to be more sensitive to interest rate changes than a fund with a shorter average duration. 30-day SEC Yield is a standard yield calculation developed by the Securities and Exchange Commission for bond funds. The yield is calculated by dividing the net investment income per share earned during the 30-day period by the maximum offering price per share on the last day of the period. The yield figure reflects the dividends and interest earned during the 30-day period, after the deduction of the fund's expenses. It is sometimes referred to as "SEC 30-Day Yield" or "standardized yield". 30-Day SEC Restated Yield is the fund's 30-day yield without applicable waivers or reimbursements, stated as of month-end. Net Asset Value is the dollar value of one share of a fund; determined by taking the total assets of a fund, subtracting the total liabilities, and dividing by the total number of shares outstanding. Important Fund Information Relative positioning data presented in this commentary is based on the fund's primary benchmark (index) unless a secondary benchmark is provided to assess % Rank in Morningstar Category from the Performance Summary: Morningstar Extended Performance rankings shown are based on adjusted historical returns for periods prior to the class' inception. These hypothetical calculated returns reflect the historical performance of the oldest share class of the fund, adjusted to reflect the fees and expenses of each respective class. Morningstar Ranking is for the indicated share class only; other classes may have different performance characteristics. Initial offering of the Fidelity Multi-Asset Income Retail Class took place on March 28, 2018. Returns prior to that date are those of the Fidelity Advisor Multi-Asset Income Fund Class I and reflect the Class I's expenses. Indices It is not possible to invest directly in an index. All indices represented are unmanaged. All indices include reinvestment of dividends and interest income unless otherwise noted. Bloomberg U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed-rate pass-throughs), asset-backed securities and collateralized mortgage-backed securities (agency and non-agency). S&P500/Bloomberg U.S. Aggregate Bond 50/50 Index is a customized blend of unmanaged indices, weighted as follows: S&P 500 Index - 50% and Bloomberg U.S. Aggregate Bond Index - 50%. Market-Segment Weights Market segment weights illustrate examples of sectors or industries in which the fund may invest, and may not be representative of the fund's current or future investments. They should not be construed or used as a recommendation for any sector or industry. Ranking Information © 2024 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for mutual fund performance, you should check the fund's current prospectus for the most up-to-date information concerning applicable loads, fees and expenses. % Rank in Morningstar Category is the fund's total-return percentile rank relative to all funds that have the same Morningstar Category. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100. The top-performing fund in a category will always receive a rank of 1%. % Rank in Morningstar Category is based on total returns which include reinvested dividends and capital gains, if any, and exclude sales charges. Multiple share classes of a fund have a common portfolio but impose different expense structures. Relative Weights Relative weights represents the % of fund assets in a particular market segment, asset class or credit quality relative to the benchmark. A positive number represents an overweight, and a negative number is an underweight. The fund's benchmark is listed immediately under the fund name in the Performance Summary. Before investing in any mutual fund, please carefully consider the investment objectives, risks, charges, and expenses. For this and other information, call or write Fidelity for a free prospectus or, if available, a summary prospectus. Read it carefully before you invest. Past performance is no guarantee of future results. Views expressed are through the end of the period stated and do not necessarily represent the views of Fidelity. 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. The securities mentioned are not necessarily holdings invested in by the portfolio manager(s) or FMR LLC. References to specific company securities should not be construed as recommendations or investment advice. Diversification does not ensure a profit or guarantee against a loss. S&P 500 is a registered service mark of Standard & Poor's Financial Services LLC. Other third-party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917. Fidelity Distributors Company LLC, 500 Salem Street, Smithfield, RI 02917. © 2024 FMR LLC. All rights reserved. Not NCUA or NCUSIF insured. May lose value. No credit union guarantee. 852328.25.0 Click to enlarge Original Post Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. Fidelity's mission is to strengthen the financial well-being of our customers and deliver better outcomes for the clients and businesses we serve. Fidelity's strength comes from the scale of our diversified, market-leading financial services businesses that serve individuals, families, employers, wealth management firms, and institutions. With assets under administration of $12.6 trillion, including discretionary assets of $4.9 trillion as of December 31, 2023, we focus on meeting the unique needs of a broad and growing customer base. Privately held for 77 years, Fidelity employs more than 74,000 associates with its headquarters in Boston and a global presence spanning nine countries across North America, Europe, Asia and Australia.