Annual Report and Financial Statements…alternative investment fund (AIF) under the AIFM Directive....

Annual Reportand Financial Statements

For the year ended 31 October 2019

Fidelity Investment Funds III

Fidelity Investment Funds III Annual Report and Financial Statements for the period ended 31 October 2019

Contents

Director’s Report* 2

Statement of Authorised Corporate Director’s responsibilities 3

Certification of the Annual Report and Financial Statements by Directors 3

Report of the Depositary 3

Independent Auditors’ report 4

Authorised Fund Manager’s Report* and Financial Statements

Market Performance Review 6

Accounting policies of Fidelity Investment Funds III and its sub-funds 7

Risk management policies of Fidelity Investment Funds III and its sub-funds 9

Fidelity Diversified Growth Fund 11

Fidelity Diversified Markets Fund 22

Fidelity Institutional Diversified Income Fund 32

Portfolio Statements (unaudited)* 43

Further Information* 53

*These collectively comprise the Authorised Corporate Director’s (ACD) report.

1


Director’s Report

We are pleased to present the annual report and financial statements for Fidelity Investment Funds III (the “Company”), covering the year to 31 October 2019.

Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities; but is included for illustration only. Investors should also note that the views expressed may no longer be current and may already have been acted upon by Fidelity.

Company and Status

The Company is an open-ended investment company with variable capital incorporated in England and Wales under registered number IC000537 and authorised by the Financial Conduct Authority (FCA) on 11 May 2007.

The Company is authorised as a non-UCITS retail scheme (NURS) and is an alternative investment fund (AIF) under the AIFM Directive. It is structured as an umbrella company, currently comprising of two funds, each of which is operated as a distinct fund, with their own portfolio of investments.

The funds in which shares are currently available are:

Fidelity Diversified Growth Fund

Fidelity Diversified Markets Fund

Fidelity Institutional Diversified Income Fund

In the future additional funds or new classes of shares within the existing funds may be launched by the ACD.

Each fund has the investment powers equivalent to those of a NURS as per the Prospectus.

Shareholders are not liable for the debts of the Company. A shareholder is not liable to make any further payment to the Company after they have paid the purchase price of the shares.

The Company is governed by the requirements of the Open-Ended Investment Companies Regulations 2001 (SI 2001/1228) (“OEIC Regulations”) and the FCA’s Handbook of rules and guidance, specifically the COLL. As permitted by the COLL, the Company does not hold Annual General Meetings.

The Company has segregated liability status between funds. This means that the assets of a fund belong exclusively to that fund and shall not be used to discharge directly or indirectly the liabilities of, or claims against, any other person or body, including the Company, or any other fund.

Alternative Investment Fund Managers Directive (AIFMD) (Unaudited)

In compliance with the AIFMD, Fidelity Investment Services (UK) Limited (“FISL”) has been appointed the Company’s Alternative Investment Fund Manager (“AIFM”).

The AIFM operates under the terms of Fidelity’s Global Remuneration Policy Statement. This ensures that the AIFM complies with the requirements of the FCA’s Remuneration Code (SYSC19A), the AIFM Remuneration Code (SYSC19B) and the BIPRU Remuneration Code (SYSC19C).

FISL does not employ staff directly so the total remuneration to be disclosed under AIFMD remuneration disclosure for the financial performance year to 30 June 2019 is £nil.

The total remuneration paid to code staff supporting the AIFM (FISL) is €8.88m (£7.97m).

Code staff includes the following individuals:

(a) senior management (Registered Directors);

(b) risk takers (Senior Management team);

(c) staff engaged in control functions (Risk, Compliance, Audit, HR, Finance).

The funds use leverage to increase their exposure to the stock markets in line with the investment objectives. The AIFM has set maximum levels of leverage that are reasonable. It has implemented systems to calculate and monitor compliance against these limits and has ensured that the limits have been complied with at all times. There have been no changes to the maximum level of leverage that the Company may employ during the year.

The maximum leverage limits are:

Gross Commitment Fund name Method Method

Fidelity Diversified Growth Fund 300% 250%

Fidelity Diversified Markets Fund 300% 200%

Fidelity International Diversified Income Fund 300% 200%

At 31 October 2019, actual leverage for both the Gross method and the Commitment method for the funds are as follows:

Gross Commitment Fund name Method Method

Fidelity Diversified Growth Fund 189.65% 124.38%

Fidelity Diversified Markets Fund 142.93% 100.24%

Fidelity International Diversified Income Fund 141.24% 102.63%

The Gross Method is a measure of overall total financial markets exposure and provides insight into the total amount at risk from market fluctuations.

The Commitment Method is a measure (after appropriate netting and hedging) of overall total financial markets exposure and provides insight into the total amount at risk from market fluctuations (after netting and hedging).

Holdings in other sub-funds within the same Company

No sub-fund held shares in any other sub-fund in the same Company throughout the year ended 31 October 2019.

Objectives

The broad aim of the Company is to provide access, both indirectly through investing in other collective investment schemes and directly, to the global research resources and stock picking skills of Fidelity’s investment management teams throughout the world.

Each fund provides the opportunity to benefit from investment in professionally managed pools of securities and other financial instruments in different geographic areas, currencies and markets as appropriate.

The investment objective and a review of the investment activities of each fund during the year under review are included within the Authorised Fund Manager Reviews.

Changes to the Prospectus

For the year ended 31 October 2019, there were no significant changes made to the Prospectus or Instrument of Incorporation.

2


Statement of Authorised Corporate Director’s (ACD) Responsibilities in relation to the Report and Financial Statements of the Company

The Open-Ended Investment Companies Regulations 2001 (SI 2001/1228) and Collective Investment Schemes sourcebook (COLL) require the ACD to prepare financial statements for each annual and half-yearly accounting period which give a true and fair view of the financial position of the Company and of its net revenue and net capital gains or losses on the property of the Company for the year. In preparing the financial statements the ACD is required to:

• select suitable accounting policies and then apply them consistently

• comply with the requirements of the UK Financial Reporting Standard 102 (FRS 102) and the Statement of Recommended Practice for UK Authorised Funds issued by The Investment Management Association (IMA) in May 2014, the COLL, the Prospectus and the Instrument of Incorporation

• follow generally accepted accounting principles and applicable accounting standards

• keep proper accounting records which enable it to demonstrate that the financial statements as prepared comply with the above requirements

• prepare the financial statements on the going concern basis unless it is inappropriate to presume the Company will continue in operation

• take reasonable steps for the prevention and detection of fraud or other irregularities.

Certification of the Annual Report and Financial Statements by Directors of the ACD

In accordance with the requirements of the COLL as issued and amended by the Financial Conduct Authority, the report and financial statements are approved on behalf of the Directors of FIL Investment Services (UK) Limited, the ACD.

John Clougherty Anthony LanserDirector Director

FIL Investment Services (UK) Limited 5 February 2020

Report of the Depositary to the Shareholders of the Fidelity Investment Funds III

The Depositary must ensure that the Company is managed in accordance with the Financial Conduct Authority’s Collective Investment Schemes sourcebook, and from 22 July 2014 the Investment Funds Sourcebook, the Open-Ended Investment Companies Regulations 2001 (S1 2001/1228), as amended, the Financial Services and Markets Act 2000, as amended, (together “the regulations”), the Company’s Instrument of Incorporation and Prospectus (together “the Scheme documents”) as detailed below.

The Depository must in the context of its role act honestly, fairly, professionally, independently and in the interests of the Company and its investors.

The Depository is responsible for the safekeeping of all custodial assets and maintaining a record of all other assets of the Company in accordance with the regulations.

The Depositary must ensure that:

• the Company’s cash flows are properly monitored, and that cash of the Company is booked into the cash accounts in accordance with the regulations;

• the sale, issue, repurchase, redemption and cancellation of shares are carried out in accordance with the regulations;

• the value of shares of the Company are calculated in accordance with regulations;

• any consideration relating to transactions in the Company’s assets is remitted to the Company within the usual time limits;

• the Company’s income is applied in accordance with the regulations; and

• the instructions of the Alternative Investment Fund Manager (“the AIFM” or “the Manager”) are carried out (unless they conflict with the regulations).

The Depositary also has a duty to take reasonable care to ensure that the Company is managed in accordance with the Scheme documents in relation to the investment and borrowing powers applicable to the Company.

Having carried out such procedures as we consider necessary to discharge our responsibilities as Depositary of the Company, it is our opinion, based on the Information available to us and the explanations provided, that in all material respects the Company, acting through the AIFM:

(i) has carried out the issue, sale, redemption and cancellation and calculation of the price of the Company’s shares and the application of the Company’s income in accordance with the Regulations and the Scheme documents of the Company; and

(ii) has observed the investment and borrowing powers and restrictions applicable to the Company in accordance with the Regulations and Scheme documents of the Company.

J.P. Morgan Europe LimitedLondon 5 February 2020

3


Independent Auditors’ report to the Shareholders of Fidelity Investment Funds III

Report on the audit of the financial statements

Opinion

In our opinion, the financial statements of Fidelity Investment Funds III (the “Company”):

• give a true and fair view of the financial position of the Company and each of the sub-funds as at 31 October 2019 and of the net revenue and the net capital gains on the scheme property of the Company and each of the sub-funds for the year then ended; and

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law), the Statement of Recommended Practice for UK Authorised Funds, the Collective Investment Schemes sourcebook and the Instrument of Incorporation.

Fidelity Investment Funds III is an Open Ended Investment Company (‘OEIC’) with 3 sub-funds. The financial statements of the Company comprise the financial statements of each of the sub-funds. We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual Report”), which comprise: the Balance Sheets as at 31 October 2019; the Statements of Total Return and the Statements of Change in Net Assets Attributable to Shareholders for the year then ended; the Distribution Statements; the Accounting Policies of Fidelity Investment Funds III and its sub-funds; and the Notes to the financial statements, which include a summary of the significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you when:

• the Authorised Corporate Directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

• the Authorised Corporate Director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company’s or any of the sub-funds’ ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s or any of the sub-funds’ ability to continue as a going concern. For example, the terms of the United Kingdom’s withdrawal from the European Union are not clear, and it is difficult to evaluate all of the potential implications on the company’s trade, customers, suppliers and the wider economy.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The Authorised Corporate Director is responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

Authorised Corporate Director’s Report

In our opinion, the information given in the Authorised Corporate Director’s Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

4


Responsibilities for the financial statements and the audit

Responsibilities of the Authorised Corporate Director for the financial statements

As explained more fully in the Statement of Authorised Corporate Director’s Responsibilities in relation to the Report and Financial Statements of the Company set out on page 3, the Authorised Corporate Director is responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The Authorised Corporate Director is also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Authorised Corporate Director is responsible for assessing the Company’s and each of the sub-funds ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Authorised Corporate Director either intends to wind up or terminate the Company or individual sub-fund, or has no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the Company’s shareholders as a body in accordance with paragraph 4.5.12 of the Collective Investment Schemes sourcebook as required by paragraph 67(2) of the Open-Ended Investment Companies Regulations 2001 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

OTHER REQUIRED REPORTING

Opinion on matter required by the Collective Investment Schemes sourcebook

In our opinion, we have obtained all the information and explanations we consider necessary for the purposes of the audit.

Collective Investment Schemes sourcebook exception reporting

Under the Collective Investment Schemes sourcebook we are also required to report to you if, in our opinion:

• proper accounting records have not been kept; or

• the financial statements are not in agreement with the accounting records.

We have no exceptions to report arising from this responsibility.

PricewaterhouseCoopers LLPChartered Accountants and Statutory Auditors London 5 February 2020

5

Fidelity Investment Funds III Annual Report and Financial Statements for the year ended 31 October 2019

Performance Overview - year ended 31 October 2019

Equity Markets

Global equities gained over the period, supported by the accommodative policy stance of major central banks and encouraging corporate results. However, global economic concerns, trade issues, uncertainty in Europe and tensions in the Middle East kept markets volatile. Notably, after raising interest rates nine times in the past four years, the US Federal Reserve changed course and implemented three rate cuts in 2019 amid concerns over slowing global growth. The European Central Bank unveiled a stimulus package in September to support growth and inflation, while the Bank of Japan indicated its readiness to introduce additional stimulus measures if needed. China also introduced measures to support its economy. Meanwhile, the UK’s exit from the European Union (EU) has been delayed until 31 January 2020, after UK politicians failed to agree on exit deals. Against this global backdrop, key equity markets generated positive performance, with Pacific ex Japan, US and Europe ex UK equities rising significantly. Emerging market equities also gained, but underperformed developed markets. Returns in sterling terms were undermined by its appreciation against the US dollar and euro, but supported by its depreciation against the yen.

Global property markets generated positive returns. In the US, low mortgage rates continued to drive demand for residential property. In the eurozone, residential equities in Germany were strong in the first half of the period, but came under pressure in the second half after the government proposed a five-year rent-freeze in Berlin. The property market in Spain remained healthy, supported by relatively low mortgage rates. UK property stocks grew at a modest pace. Within Asia, real estate stocks in Hong Kong fell in the second half, but ended the year in positive territory. Investors were concerned over weaker residential demand. The real estate market in Japan was buoyed by ultra-low interest rates and increased foreign investments ahead of the 2020 Tokyo Olympics.

Fixed income markets posted positive returns over a period that was characterised by a changing monetary policy regime as investors grew increasingly concerned over the health of the global economy. Government bond yields slumped to record lows, many of them below zero, as central banks across the world adopted a cautious monetary policy stance, reflecting a combination of weak economic data, continued uncertainty over US-China trade negotiations and weak domestic inflation. Consequently, the US Fed cut interest rates thrice in 2019. The European Central Bank (ECB) also lowered its deposit rate by 0.1 percentage points to a new all-time low of -0.5% and revamped its quantitative easing programme. Consequently, the 10-year US Treasury yield dropped to its lowest level since 2016. Ten-year German bonds also touched record lows of -0.7%, as global recession worries intensified. In the UK, 10-year government bond (Gilt) yields fell below 0.5%, dipping below its previous August 2016 trough, which came after the Bank of England slashed interest rates to an all-time low following the UK’s decision to leave the EU. In Japan, 10-year bond yields slipped to the lowest level since July 2016 and entered into negative territory. The Bank of Japan decided to keep its key short-term interest rate unchanged and shifted its focus on steepening its yield curve. In credit markets, corporate bond spreads tightened amid investors’ search for yields. Emerging markets also posted positive returns over the period, with local currency bonds outperforming hard currency bonds.

Market Performance Review

6

Source: Refinitiv DataStream, Total Returns, GBP, MSCI World, BofA ML Global Broad Market Index, FTSE EPRA/NAREIT Developed, 31.10.2018 - 31.10.2019

Source: Refinitiv DataStream, Total Returns in GBP rebased to 100, MSCI World, BofA ML Global Broad Market Index, FTSE EPRA/NAREIT Developed, 31.10.2018 - 31.10.2019

Market Review12-m to October 2019

Global equities gained over the period, supported by the accommodative policy stance of major central banks and encouraging corporate results. However, global economic concerns, trade issues, uncertainty in Europe and tensions in the Middle East kept markets volatile. Notably, after raising interest rates nine times in the past four years, the US Federal Reserve changed course and implemented three rate cuts in 2019 amid concerns over slowing global growth. The European Central Bank unveiled a stimulus package in September to support growth and inflation, while the Bank of Japan indicated its readiness to introduce additional stimulus measures if needed. China also introduced measures to support its economy. Meanwhile, the UK’s exit from the European Union (EU) has been delayed until 31 January 2020, after UK politicians failed to agree on exit deals. Against this global backdrop, key equity markets generated positive performance, with Pacific ex Japan, US and Europe ex UK equities rising significantly. Emerging market equities also gained, but underperformed developed markets. Returns in sterling terms were undermined by its appreciation against the US dollar and euro, but supported by its depreciation against the yen.

Source: Refinitiv DataStream, Total Returns in GBP rebased to 100, MSCI World, BofA ML Global Broad Market Index, FTSE EPRA/NAREIT Developed, 31.10.2018 - 31.10.2019

Source: Refinitiv DataStream, Total Returns, GBP, MSCI World, BofA ML Global Broad Market Index, FTSE EPRA/NAREIT Developed, 31.10.2018 - 31.10.2019

Global property markets generated positive returns. In the US, low mortgage rates continued to drive demand for residential property. In the eurozone, residential equities in Germany were strong in the first half of the period, but came under pressure in the second half after the government proposed a five-year rent-freeze in Berlin. The property market in Spain remained healthy, supported by relatively low mortgage rates. UK property stocks grew at a modest pace. Within Asia, real estate stocks in Hong Kong fell in the second half, but ended the year in positive territory. Investors were concerned over weaker residential demand. The real estate market in Japan was buoyed by ultra-low interest rates and increased foreign investments ahead of the 2020 Tokyo Olympics.

Fixed income markets posted positive returns over a period that was characterised by a changing monetary policy regime as investors grew increasingly concerned over the health of the global economy. Government bond yields slumped to record lows, many of them below zero, as central banks across the world adopted a cautious monetary policy stance, reflecting a combination of weak economic data, continued uncertainty over US-China trade negotiations and weak domestic inflation. Consequently, the US Fed cut interest rates thrice in 2019. The European Central Bank (ECB) also lowered its deposit rate by 0.1 percentage points to a new all-time low of -0.5% and revamped its quantitative easing programme. Consequently, the 10-year US Treasury yield dropped to its lowest level since 2016. Ten-year German bonds also touched record lows of -0.7%, as global recession worries intensified. In the UK, 10-year government bond (Gilt) yields fell below 0.5%, dipping below its previous August 2016 trough, which came after the Bank of England slashed interest rates to an all-time low following the UK’s decision to leave the EU. In Japan, 10-year bond yields slipped to the lowest level since July 2016 and entered into negative territory. The Bank of Japan decided to keep its key short-term interest rate unchanged and shifted its focus on steepening its yield curve. In credit markets, corporate bond spreads tightened amid investors’ search for yields. Emerging markets also posted positive returns over the period, with local currency bonds outperforming hard currency bonds.


Accounting Policies of Fidelity Investment Funds III and its sub-funds

Accounting policies

a) Basis of preparation - The financial statements of the sub-funds have been prepared on a going concern basis, under the historical cost convention as modified by the revaluation of certain financial assets and liabilities measured at fair value through profit or loss except as outlined below. The financial statements are also prepared in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice (UK GAAP) and the Statement of Recommended Practice (SORP) for UK Authorised Funds issued by the Investment Management Association (IMA) in May 2014.

b) Recognition of revenue - Dividends on quoted equities are recognised when the security is quoted ex-dividend. Interest from debt securities are accounted for on an effective yield basis. Effective yield recognises any discount or premium on the purchase of an investment as revenue over its remaining life. For some securities that are valued at significantly distressed levels or where the Authorised Corporate Director (ACD) expects future cash flows to be uncertain, the discount or premium is not recognised as revenue. Distributions on underlying funds are recognised when the shares/units are quoted ex-distribution. Other revenue is accounted for on an accruals basis. Underwriting commission is recognised when the issue takes place. Special dividends are treated as revenue or capital depending on the facts of each particular case.

c) Treatment of stock dividends - Where the fund manager has elected to receive a dividend in the form of shares rather than cash, the dividend is treated as revenue but does not form part of the distribution.

d) Treatment of expenses:

• All expenses are accounted for on an accruals basis.

• Annual charges - In accordance with the COLL and as agreed with the Depositary, charges and expenses for the fund may be treated as capital charges, which will enhance income returns but may constrain capital growth. Where the management fees are ultimately borne by the capital of an underlying fund, the rebates are credited to capital for the purpose of calculating the distribution.

• Other expenses - All other expenses are chargeable against revenue for distribution purposes other than those relating to purchases and sales of investments which are excluded for the purpose of calculating the distribution.

• Underlying fund charges - The sub-funds may invest in other collective investment schemes, various other charges and expenses may be incurred indirectly by the fund at the level of the underlying funds. Where any fund invests in other collective investment schemes managed by independent fund managers, the ACD will seek to negotiate a high level of rebate of the underlying funds management charges, so as to minimise the effect of charging at both the fund and underlying fund levels. Where any fund invests in other collective investment schemes managed by the ACD or an associate of the ACD, to avoid a double management charge in respect of the same portfolio, the full amounts of the charges which the ACD and/or any associated company of the ACD receives for managing the investments of the underlying fund, will be credited to the fund, to the extent that such charges are attributable to investment in the underlying funds by the fund.

e) Allocation to multiple share classes – All charges and expenses which are directly attributable to the fund will be allocated to the class or classes within the fund pro rata to the net asset value of the fund attributable to each class, where appropriate. Any charges and expenses not attributable to any one fund will normally be allocated by the ACD to all funds (and their classes) pro rata to the net asset values of the funds (and their classes), although the ACD has the discretion to allocate such charges and expenses in a different manner which it considers fair to shareholders generally.

f) Distribution policy - The distribution policy of the individual funds is to distribute or accumulate all available revenue after deduction of expenses properly chargeable against revenue. Interest from debt securities has been distributed on an accrual of coupon basis where this exceeds the amount determined on an effective yield basis.

g) Taxation - Provision is made for corporation tax at the current rate on the excess of taxable revenue over allowable expenses, with relief for overseas tax taken where appropriate. Deferred tax is provided using the liability method on all timing differences arising from the different treatment of items for taxation and accounting purposes. Deferred tax assets are recognised to the extent that they are considered recoverable.

h) Basis of valuation of investments - Investments in securities and underlying funds have been valued using the market price at the noon valuation point on the last business day of the accounting period. Market value is defined by the SORP as fair value which in an active market is the value of long positions at the quoted bid price and fair value of short positions is the quoted offer price. Holdings in other collective investment schemes are valued at bid price for dual priced funds and at single price for single priced funds. It is the responsibility of the Fair Value Committee (FVC) to ensure pricing sources and methodologies used to value securities are appropriate as delegated by the ACD. Where there is no price source from an active market for an investment, the FVC will assess information available from internal and external sources in order to arrive at a fair value. In seeking to value such securities, the FVC will gather valuation related information from multiple internal and external sources and may apply judgement in determining the fair value. These sources include historic trading and pricing information (including grey market trades), the views of internal security analysts, company specific news and fundamental data as well as information relating to comparable companies within related industries and sectors. The FVC policies and procedures remain under continuous review by the ACD. Fair value adjustments may be implemented to protect the interests of the Shareholder Funds against market timing practices. Accordingly, if a fund invests in markets that are closed for business at the time the fund is valued, the ACD may, by derogation from the provisions above, allow for the securities included in a particular portfolio to be adjusted to reflect more accurately the fair value of the fund’s investments at the point of valuation.

Fair value market adjustments were applied to investments with the following effect on the fund midday prices as at 31 October 2019:

• US Market -0.30% (2018:0.77%)

• Japan -0.78% (2018:nil)

• Hong Kong & China -0.66% (2018:nil)

The market value disclosed alongside each investment in the portfolio statement represents the fair value. Each derivative position is shown as a separate investment. The portfolio statement includes for each investment the percentage of the net assets. This may result in the geographical or sector allocations being different to the comparative index. The largest holdings disclosure is consistent with this basis, and therefore derivative positions may not appear in the list of largest holdings. A copy of the Fund Factsheet report disclosing the sector/industry exposure, country exposure and top holdings including derivatives exposures may be obtained upon request from the ACD alternatively, please go to http://www.fidelity.co.uk.

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Accounting Policies of Fidelity Investment Funds III and its sub-funds

i) Derivatives - Where appropriate, certain permitted transactions such as derivatives are used. Where such transactions are used to protect or enhance revenue, the revenue and expenses derived from them are included in Revenue or Expenses in the Statement of Total Return. Where such transactions are used to protect or enhance capital, the gains or losses are included in Net capital gains/(losses) in the Statement of Total Return. Any positions on such transactions open at the year end are reflected in the Balance Sheet at their market value. All gains and losses in the value of futures contracts, interest rates swaps, credit default swaps, equity forwards, contracts for difference, equity linked notes and options are disclosed in the Statement of Total Return under Net capital gains/(losses).

For futures, equity forwards and contracts for difference, the dividend element is included in revenue along with the associated finance costs of these contracts. Ongoing premia on credit default swaps are charged or credited to revenue/expenses on an accruals basis, depending on whether protection is bought or sold. Revenue receivable/payable on interest rate swaps is included in revenue on an accruals basis. The premium received on covered call options is taken to revenue over the life of the contract provided the strike price of the option is greater than the price of the underlying security at the time of trade.

Where forward foreign exchange contracts have been entered into to hedge the underlying funds and securities against currency exchange rate movements, any subsequent hedge gain or loss is taken to capital.

j) Exchange rates - Assets and liabilities denominated in foreign currencies have been translated into sterling at the rate of exchange ruling at the noon valuation point on the last business day of the accounting period. Revenue items denominated in foreign currency are translated into sterling at exchange rates ruling at the date of the transaction. Differences on exchange are dealt with in the Statement of Total Return.

k) Swing price adjustment policy - The Board of Directors of the Company implemented a swing price adjustment policy in order to protect the interests of the Company’s shareholders. The purpose of the swing price adjustment policy is to allocate the costs associated with large inflows and outflows to investors transacting that day, thereby protecting the long-term shareholder from the worst effects of dilution. It achieves this purpose by adjusting the share class price at which deals in a sub-fund are transacted. In other words, share class prices may be adjusted up or down depending on the level and type of investor transactions on a particular day within a sub-fund. In this way the existing and remaining shareholders do not suffer an inappropriate level of dilution. The Company will only trigger an adjustment in the price when there are significant net flows that are likely to have a material impact on existing and remaining shareholders. The adjustment will be based on the normal dealing costs for the particular assets in which a sub-fund is invested. Once an adjustment is made to the share class price, that price is the official price for that share class for all deals that day.

At 31 October 2019 there were no swing price adjustments made on the sub-funds as a result of this price adjustment policy (2018: none).

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9

Risk management policies of Fidelity Investment III Funds and its sub-funds

Risk framework

The Board of Directors of FIL Limited, the ultimate parent company of the ACD, has established a Risk Policy, a Risk Appetite statement and a number of other risk related policies for adoption throughout the Fidelity International group of companies, including the ACD. There is a clearly defined structure operating within a corporate governance and management framework that is designed to address the related business risks, including those arising from financial instruments. Risk management policies and procedures are established by the Board and updated according to market, industry and government initiatives and regulatory developments. The Board monitors that a robust system of internal control exists to ensure compliance with rules, regulations and policies. It is the Board of Directors of the ACD that is ultimately responsible for monitoring risk but day to day management of the risk process has been delegated to other areas as appropriate.

Fidelity operates a ‘multiple lines of defence’ approach to risk management; also, the risk control processes are comprehensive, multi-layered, both quantitative and qualitative and do not rely on any one risk measure or system. The primary responsibility for financial instrument risk management rests with the portfolio manager of each fund who is overseen by the relevant Chief Investment Officer (CIO). On a regular basis each fund is formally reviewed in a meeting involving the portfolio manager, the relevant CIO, Investment Management Portfolio Analytics and others; the review covers multiple aspects of the fund’s profile including trading activity, turnover, performance, structure, style profile, the use of derivatives and other relevant subjects such as yield curve exposure and sector and credit rating positioning in the case of Fixed Income funds. In addition to this review there is a formal Investment Risk Oversight Committee (IROC), chaired by the head of the Investment Management Risk function, whose remit includes review of various risk and performance measures, liquidity and other investment risks.

Furthermore, there is a Derivative Risk Committee that focuses on all aspects of risk arising from the use of derivative instruments. The global exposure relating to derivatives held in a fund may not exceed the net value of that fund. Global exposure calculations for all funds – unless otherwise indicated - use the commitment approach as part of their risk management process, measure and limits. The funds in this umbrella OEIC are governed by non-UCITS rules. The rules and prospectus limits are monitored and reported on by an independent Investment Compliance function. Fidelity Diversified Growth Fund employs the absolute Value-at-Risk (VaR) approach to measure global risk exposure. The expected level of leverage of the fund is 200%, this is not a limit and higher levels may occur. The expected levels of leverage may be higher when volatility decreases sustainably, when interest rates are expected to change or when credit spreads are expected to widen or tighten.

Risk factors

The main risks arising from financial instruments are market price, foreign currency, interest rate, liquidity, counterparty and credit risks. There are policies in place to ensure each of these risks are managed in an appropriate manner.

Market price risk

Market price risk arises from the uncertainty about future price movements on financial instruments held. It represents the potential loss each fund might suffer through holding market positions in the face of adverse price movements. The value of investments (including derivatives) is not fixed and may go down as well as up. This may be as a result of a specific factor affecting the value of an individual investment, or may be caused by general market factors. Some of the funds may invest in securities of countries experiencing rapid economic growth. Investors should appreciate that these securities may be more volatile than securities in more developed markets with the result that there may be greater risk of price fluctuation and the suspension of redemptions in such funds compared with funds in more mature markets. This volatility may stem from political and economic factors, and be exacerbated by legal, trading liquidity, settlement, currency and other factors. Some emerging market countries may have relatively prosperous economies but may be sensitive to world commodity prices or other factors. Where derivatives are used for either efficient management of the fund or for investment purposes, market price risk will exist as for any other non-derivative investments. The volatility of option prices could be greater than for other derivatives.

Foreign currency risk

The fund’s Total Return and Balance Sheet can be significantly affected by foreign exchange movements if the fund’s assets and revenue are denominated in currencies other than the fund’s base currency. Three principal areas where foreign currency risk could impact each fund have been identified as:

• Movements in rates affecting the value of investments

• Movements in rates affecting short term timing differences

• Movements in rates affecting the revenue received

The funds may hold forward foreign exchange contracts to hedge the fund’s base currency. The funds may be exposed to short term exchange rate movements, for example between the date when an investment is bought or sold and the date when settlement of the transaction occurs. The ACD may seek to manage exposure to currency movements by using forward and spot foreign exchange contracts. Revenue received in other currencies is converted into base currency on or near the date of receipt.

Interest rate risk

Debt securities have varying levels of sensitivity to changes in interest rates. In general, the price of a fixed rate debt security can fall when interest rates rise and can rise when interest rates fall. Securities with longer maturities can be more sensitive to interest rate changes. The fixed rate component of an interest rate swap will have a similar interest rate risk profile to that of a fixed rate debt security where the currency, fixed rate and maturity are the same.

Liquidity risk

The fund’s assets comprise mainly realisable securities which can be readily sold or redeemed in normal market conditions. The fund’s main liability is the redemption of any shares that investors wish to sell. In general, the ACD manages the cash to ensure it can meet its liabilities. Assets from a fund may need to be sold if insufficient cash is available to finance such redemptions. The fund’s holdings are reviewed on a regular basis, with particular emphasis on the market capitalisation of the issuer (securities issued by larger capitalised companies generally have greater liquidity) and the number of days it would take to trade out of a given security position or percentage of the fund as a whole (determined by reference to available market trading volumes). Where investments cannot be realised in time to meet any potential liability, the fund may borrow up to 10% of its value to ensure settlement.


Risk management policies of Fidelity Investment III Funds and its sub-funds

Counterparty risk

All security transactions and derivatives are transacted with brokers and carry the risk that the counterparty to a transaction may not meet their financial obligations. All counterparties for any type of trading are assessed by an independent Credit Research and Analysis function and approved for use by any Fidelity company, including the ACD. Exposures to counterparties are monitored and reported frequently. Margin on exchange-traded derivatives mitigates counterparty risk exposure and in the case of over-the-counter derivatives, collateral is transferred to reduce counterparty risk exposure in accordance with the terms outlined in market standard (ISDA) derivative legal contracts.

Credit risk

Investments may be adversely affected if any of the institutions with which money is deposited suffers insolvency or other financial difficulties. The process outlined above under ‘Counterparty risk’ is used to review, approve and report on exposures to institutions with which money is deposited.

Credit risk also arises from the uncertainty about the payment of interest and the repayment of principal bond investments. Default risk is based on the issuer’s ability to make interest payments and to repay the loan at maturity. Due to the higher possibility of default, an investment in corporate bonds is generally less secure than an investment in government bonds. Default risk may therefore vary between different government issuers as well as between different corporate issuers. In certain cases, government bonds may have higher probability of default than specific corporate issuers. The funds may hold credit default swaps to manage their credit risk profile. Credit default swaps are transacted to take advantage of expected movements in credit spreads on either individual securities or baskets of securities.

Fair values of financial assets and financial liabilities

There is no material difference between the value of the financial assets and liabilities, as shown in the Balance Sheet, and their fair value. The numerical information in respect of financial instruments disclosure is provided in the financial statements for the individual funds.

10


11

Fund Manager’s Review

Investment Objective and PolicyThe fund aims to increase the value of your investment over a period of 5 years or longer and to maintain volatility within the range of 6-8% p.a.

The fund invests globally, into a broad range of asset classes based on their risk profile. The fund is actively managed without reference to a benchmark.

The asset allocation is managed using a systematic volatility and risk management process. This typically involves increasing the fund’s allocation to lower risk assets e.g. government bonds when market volatility rises, and increasing the allocation to higher risk assets e.g. equities, when market volatility falls.

In addition, the Investment Manager will pursue other investment opportunities on a discretionary basis, which would be expected to enhance value regardless of market direction.

The fund can invest in funds (including funds managed by Fidelity), securities, money market instruments, cash, deposits and derivatives (which can be used for both efficient portfolio management and investment purposes).

Performance and Portfolio ActivityThe fund generated positive returns over the period. Holdings in equities, emerging market debt, inflation-linked bonds, high yield and corporate bonds contributed to performance as investor sentiment improved in 2019. However, equity sector trades within thematic and opportunistic positions weighed on returns.

The allocation to defensive assets such as government and corporate bonds was increased, while growth assets, i.e. regional equities, were reduced. Changes in the alpha component include a new holding in Assenagon Alpha Volatility Fund as a defensive position against market volatility. Meanwhile, the allocation to alternatives was lowered.

OutlookOur asset allocation is not impacted by the market outlook, but is determined systematically by our proprietary volatility management model, which targets a volatility range of 6–8%. The fund also holds positions that aim to generate alpha without taking additional market risk. These are selected on a discretionary basis.

Nick Peters, Eugene Philalithis & Rahul SrivatsaFund Managers

31 October 2019

Risk and Reward Indicator

XXX SRRI

Accumulation Shares 4

1 3 4 5 6 72

Lower risk Higher risk

Typically lower rewards Typically higher rewards

The risk category was calculated using historical volatility data, based upon the methods set by European Union rules. Volatility is influenced by changes in the stock market prices, currencies and interest rates which can be affected unpredictably by diverse factors including political and economic events.

• The risk category was calculated using historical performance data.

• The risk category may not be a reliable indication of the future risk profile of the fund, is not guaranteed and may change over time.

• The lowest category does not mean a "risk free" investment.

• The risk and reward profile is classified by the level of historical fluctuation of the Net Asset Values of the share class, and within this classification, categories 1-2 indicate a low level of historical fluctuations, 3-5 a medium level and 6-7 a high level.

• The value of your investment may fall as well as rise and you may get back less than you originally invested.

• The fund may invest in instruments denominated in currencies other than the fund base currency. Changes in currency exchange rates can therefore affect the value of your investment.

• Currency hedging may be used which aims to reduce the effect of such changes. However, the effects may not be completely eliminated to the degree expected.

• The use of derivatives may result in “leverage” by which we mean a level of exposure which could expose the fund to the potential of greater gains or losses than would otherwise be the case.

• There is a risk that the issuers of bonds may not be able to repay the money they have borrowed or make interest payments. While we seek to mitigate this, the fund may be exposed to the risk of financial loss if it invests into an instrument issued by an entity that subsequently defaults on its borrowings. Losses may also be realised if an entity that the fund is exposed to ceases to make interest payments over a period of time or indefinitely. Bond prices have an inverse relationship with interest rates such that when interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investment to fall.

• The fund may be exposed to the risk of financial loss if a counterparty used for derivative instruments subsequently defaults.


12

Comparative Performance Table

Accumulation Shares

Change in net assets (pence per share) 2019 2018 2017

Opening net asset value per share 144.10 145.98 137.18

Return before operating charges* 14.28 (0.87) 9.77

Operating charges (1.04) (1.01) (0.97)

Return after operating charges* 13.24 (1.88) 8.80

Distributions (3.24) (3.84) (2.84)

Retained distributions on accumulation shares 3.24 3.84 2.84

Closing net asset value per share 157.34 144.10 145.98

*after direct transaction costs of 0.04 0.06 0.05

Performance

Return after charges 9.2% (1.3%) 6.4%

Other information

Closing net asset value (£'000) 193,764 167,837 251,958

Closing number of shares 123,137,486 116,460,244 172,587,625

Operating charges 0.69% 0.69% 0.69%

Direct transaction costs 0.03% 0.04% 0.04%

Prices (pence per share)

Highest share price 160.40 151.40 146.50

Lowest share price 140.40 140.00 133.60


13

Statement of Total Return

for the year ended 31 October 201931/10/19 31/10/18

[BLANK] Note £'000 £'000 £'000 £'000

Income

Net capital gains/(losses) 4 11,959 (5,948)

Revenue 5 5,716 8,623

Expenses 6 (1,054) (1,449)

Interest payable and similar charges 8 (14) (2)

Net revenue/(expense) before taxation 4,648 7,172

Taxation 7 (723) (1,232)

Net revenue/(expense) after taxation 3,925 5,940

Total return before distributions 15,884 (8)

Distributions 8 (3,925) (5,940)

Change in net assets attributable to shareholders from investment activities 11,959 (5,948)

Statement of Change in Net Assets Attributable to Shareholders


[BLANK] Note £'000 £'000 £'000 £'000

Opening net assets attributable to shareholders 167,837 251,958

Movement due to sales and repurchases of shares

Amounts receivable on issue of shares 14,485 15,788

Amounts payable on cancellation of shares (4,512) (98,476)

9,973 (82,688)

Swing price adjustment - 38

Change in net assets attributable to shareholders from investment activities (see above) 11,959 (5,948)

Retained distribution on accumulation shares 8 3,995 4,477

Closing net assets attributable to shareholders 193,764 167,837

Balance Sheet

as at 31 October 201931/10/19 31/10/18

[BLANK] Note £'000 £'000 £'000 £'000

Assets

Investments 146,515 135,875

Current assets:

Debtors 9 249 731

Cash equivalents 24,153 27,126

Cash and bank balances 10 23,847 8,074

Total other assets 48,249 35,931

Total assets 194,764 171,806

Liabilities:

Investment liabilities (786) (3,274)

Creditors

Other creditors 11 (214) (695)

Total other liabilities (214) (695)

Total liabilities (1,000) (3,969)

Net assets attributable to shareholders 193,764 167,837


14

Notes to the Financial Statements

1 Accounting policies

The fund’s financial statements have been prepared in accordance with the Company Accounting Polices and Risk Management sections.

2 Equalisation

Equalisation applies only to shares purchased during the distribution year (Group 2 shares). It is the average amount of revenue included in the purchase price of all Group 2 shares and is credited to the holders of these shares as a return of capital. Being capital it is not liable to income tax but must be deducted from the cost of shares for Capital Gains Tax purposes.

3 Contingent liabilities

At the year end there are no contingent liabilities or commitments (2018: nil).

4 Net capital gains/(losses)

31/10/19 31/10/18£'000 £'000

Gains/(losses) on non-derivative securities+ 8,818 (123)

Gains/(losses) on derivative contracts+ 1,710 (4,766)

Gains/(losses) on forward currency contracts+ 1,475 (1,456)

Other currency gains/(losses) (34) 406

Transaction charges (11) (14)

Broker fee rebates - 5

Management fee rebate to capital 1 -

Net capital gains/(losses) 11,959 (5,948)

+ These comprise:

Realised gains/(losses)++ 2,744 9,153

Unrealised gains/(losses) 9,259 (15,498)

Total 12,003 (6,345)

++ Where realised gains/(losses) include gains/losses arising in previous periods, a corresponding loss/gain is included in unrealised gains/(losses).

5 Revenue

31/10/19 31/10/18£'000 £'000

UK dividend distributions 531 723

Unfranked UK dividend distributions 202 256

Overseas dividend distributions 565 465

Interest distributions 2,711 3,964

Derivative revenue 1,221 2,103

Management fee rebate to income 3 1

ACD fee rebate/waiver to income 216 821

Overseas dividends 5 11

Overseas property income distributions 2 6

Bank interest 260 273

Total revenue 5,716 8,623

6 Expenses

31/10/19 31/10/18£'000 £'000

Payable to the ACD, associates of the ACD, and agents of either of them:

Investment management fees 907 1,251

Service charges 91 125

Foreign exchange administration fees 7 9

1,005 1,385Payable to the Depositary, associates of the Depositary, and agents of either of them:

Depositary fees 22 30

Custody fees 3 5

25 35Other expenses:

Audit fee 10 10

Other operating expenses 14 19

24 29

Total expenses 1,054 1,449


15


7 Taxation

31/10/19 31/10/18£'000 £'000

a) Analysis of charge/(credit) for the year

UK corporation tax 711 1,197

Overseas taxation 30 67

Double taxation relief (18) (32)

Total current taxation 723 1,232

b) Factors affecting tax charge/(credit) for the year


Net revenue/(expense) multiplied by the standard rate of corporation tax of 20% (2018: 20%). 930 1,434Effects of:

Double taxation relief (18) (32)


Revenue not included for tax purposes (219) (237)

Current tax charge/(credit) 723 1,232

Open ended investment companies are exempt from UK tax on capital gains.

8 Finance costs

31/10/19 31/10/18£'000 £'000

DistributionsThe distribution takes account of revenue received on the issue of shares and revenue deducted on cancellation of shares.

Accumulation Shares

Final 3,995 4,477

Add: Revenue deducted on cancellation of shares 35 1,565

Deduct: Revenue received on issue of shares (105) (102)

Net distributions for the year 3,925 5,940

Interest/other

Interest 2 1

Derivative expense 1 1

Contract for difference finance costs 11 -

14 2

Total finance costs 3,939 5,942

Details of the distribution per share is set out in the Distribution Statement.

9 Debtors

31/10/19 31/10/18£'000 £'000

Amounts receivable for issue of shares 107 348

Accrued revenue 7 11

Management fee rebate recoverable 1 1

ACD fee rebate/waiver recoverable 95 328

UK income tax recoverable 22 24

Overseas tax recoverable 17 19

Total debtors 249 731

10 Cash and bank balances

31/10/19 31/10/18£'000 £'000

Amounts held at futures clearing houses and brokers 2,414 5,322

Cash and bank balances 21,433 2,752

Total cash and bank balances 23,847 8,074


16


11 Other creditors

31/10/19 31/10/18£'000 £'000

Accrued expenses 114 100

UK corporation tax payable 97 595

Amounts payable for cancellation of shares 3 -

Total other creditors 214 695

12 Financial instruments exposure

Currency exposure

A portion of the financial assets of the fund are denominated in currencies other than UK Pound, which is the fund's base currency, with the effect that the Balance Sheet and total return can be affected by currency movements.The currency exposure of the fund was:

Non-monetary exposures Monetary exposures Monetary exposures Total exposureCurrency Investments^ Cash balances Debtors/(Creditors)31/10/19 £'000 £'000 £'000 £'000

Australian Dollar 147 8 - 155

Canadian Dollar 284 1 - 285

Chilean Peso (23) - - (23)

Danish Krone - - 14 14

Euro 15,606 - 4 15,610

Hong Kong Dollar 149 8 - 157

Hungarian Forint 2 - - 2

Indonesian Rupiah 70 - - 70

Japanese Yen 1,486 - 3 1,489

Korean Won 88 7 - 95

New Zealand Dollar 2 - - 2

Norwegian Krone 3 8 - 11

Philippine Peso 21 - - 21

South African Rand 11 1 - 12

Swedish Krona 213 - - 213

Swiss Franc 205 15 - 220

Taiwan Dollar 55 57 - 112

Thai Baht 33 - - 33

UK Pound 96,961 23,693 10 120,664

US Dollar 54,569 49 4 54,622

Total 169,882 23,847 35 193,764

31/10/18 £'000 £'000 £'000 £'000

Australian Dollar 100 - - 100

Canadian Dollar 170 7 - 177


Euro 16,297 - 4 16,301

Hong Kong Dollar 252 - 1 253

Indonesian Rupiah 64 - - 64

Japanese Yen 415 - 5 420

Korean Won - 9 - 9

New Zealand Dollar 8 - - 8

Norwegian Krone (7) - - (7)

Philippine Peso 22 - - 22

South African Rand 47 - - 47

Swedish Krona 144 - - 144

Swiss Franc 141 - - 141

Taiwan Dollar - 32 - 32

Thai Baht 104 - - 104

UK Pound 95,227 8,017 8 103,252

US Dollar 46,743 9 5 46,757

Total 159,727 8,074 36 167,837


17


^ includes cash equivalents where appropriate.The currency disclosure provided is based on the trading currency of the investments and foreign currency contracts. For further information on risk disclosures refer to the Risk management policies section.

Interest rate risk profile of financial assets and financial liabilities

The interest rate risk profile of the fund's financial assets was:

Currency Floating rate financial assets Fixed rate financial assetsFinancial assets on which no

interest is paid Total assets31/10/19 £'000 £'000 £'000 £'000

Australian Dollar 8 - 150 158

Canadian Dollar 1 - 295 296


Euro 14,779 - 868 15,647

Hong Kong Dollar 8 - 149 157

Hungarian Forint - - 2 2

Indonesian Rupiah - - 70 70

Japanese Yen - - 1,562 1,562

Korean Won 7 - 88 95

New Zealand Dollar - - 2 2

Norwegian Krone 8 - 16 24

Philippine Peso - - 21 21

South African Rand 1 - 38 39

Swedish Krona - - 216 216

Swiss Franc 15 - 205 220

Taiwan Dollar 57 - 55 112

Thai Baht - - 33 33

UK Pound 73,961 - 47,028 120,989

US Dollar 20,366 - 31,879 55,107

Total 109,211 - 85,553 194,764

31/10/18 £'000 £'000 £'000 £'000

Australian Dollar - - 114 114

Canadian Dollar 7 - 170 177


Euro 16,295 - 574 16,869

Hong Kong Dollar - - 253 253

Indonesian Rupiah - - 64 64

Japanese Yen - - 657 657

Korean Won 9 - - 9


Philippine Peso - - 22 22

South African Rand - - 47 47


Swiss Franc - - 159 159

Taiwan Dollar 32 - - 32

Thai Baht - - 104 104

UK Pound 83,165 - 21,083 104,248

US Dollar 25,144 - 23,740 48,884

Total 124,652 - 47,154 171,806


18


The interest rate risk profile of the fund's financial liabilities was:

CurrencyFloating rate financial

liabilities Fixed rate financial liabilitiesFinancial liabilities on which

no interest is paid^ Total liabilities^31/10/19 £'000 £'000 £'000 £'000


Canadian Dollar - - 11 11

Chilean Peso - - 23 23

Euro - - 37 37


Norwegian Krone - - 13 13

South African Rand - - 27 27


UK Pound - - 194,089 194,089

US Dollar - - 485 485

Total - - 194,764 194,764

31/10/18 £'000 £'000 £'000 £'000


Euro - - 568 568



Norwegian Krone - - 7 7


UK Pound - - 168,833 168,833

US Dollar - - 2,127 2,127

Total - - 171,806 171,806

^ Includes £193,764,000 in respect of the fund's liability to redeem all shares (2018: £167,837,000).The fund invests in equity, fixed interest funds, cash/money market funds and has bank balances and/or amounts held at futures clearing houses and brokers.

Fair value of financial assets and financial liabilities

There is no material difference between the value of the financial assets and liabilities, as shown in the Balance Sheet, and their fair value.

Market value sensitivity analysis

Currency risk

A rise or fall of 1% in non UK Pound currencies is likely to result in a 0.57% rise or fall in the fund's market value (2018: 0.58%).

Interest rate risk

A rise or fall of 1% in global interest rates is likely to result in a 2.46% fall or rise in the fund's market value (2018: 2.18%).

Other price risk

Fluctuations in securities and underlying funds prices will directly be reflected in the fund's market value.

Analysis of derivatives exposure

Value-at-Risk (VaR) analysis assesses potential losses for a given statistical confidence level and a specified time horizon. The company uses a 99% confidence level and a 20 trading day (approx. 1 calendar month) time horizon for its analysis. The model employed is based on a Monte Carlo simulation of market risk factors to simulate the expected changes to the valuation of individual assets held in a fund. The sum of these simulations provides the basis for the estimation process at fund level. The reliability of VaR analysis can be negatively affected by significant changes to the volatility of market risk factors as well as the deviation of actual market prices from those derived in the simulation framework. For this fund the lowest, the highest and the average utilisation of the value-at-risk limit calculated during the financial year are 19.85% (2018: 20.90%), 28.30% (2018: 32.70%) and 24.16% (2018: 25.50%) respectively. The model and inputs used for the VaR calculation are the Monte Carlo Simulation model with 5,000 simulations, 99% confidence level and 20 days holding period, Additionally as this fund is an Absolute VaR fund the reference portfolio is not used as part of limit.


19


13 Portfolio transaction costs

31/10/19 Purchases Commissions TaxesAnalysis of total purchases costs

£'000 £'000 % £'000 %

Equity 13,890 7 0.05 - -

Mutual Fund 30,818 - - - -

Derivative - 16 - - -

Total 44,708 23 -

Total including transaction costs 44,731

Sales Commissions TaxesAnalysis of total sales costs

£'000 £'000 % £'000 %

Equity 12,232 6 0.05 - -

Mutual Fund 31,062 - - - -

Corporate actions 1 - - - -


Total 43,295 23 -


Total as a percentage of average net assets*

0.02 %

0.00 %


£'000 £'000 % £'000 %

Equity 41,817 15 0.03 3 0.01

Mutual Fund 69,302 - - - -



Total 111,198 49 3



£'000 £'000 % £'000 %

Equity 49,722 20 0.04 5 0.01

Mutual Fund 82,412 1 - - -



Total 132,271 53 5


Total as a percentage of average net assets

0.04 %

0.00 %

*During the year dealing spread costs may be applicable to purchases and sales (the difference between bid and offer prices of all investments expressed as a percentage of the offer price value), which are not separately identifiable and do not form part of the analysis above. Dealing spread costs suffered by the fund vary considerably for the different asset/instrument types depending on a number of factors including transaction value and market sentiment. At the Balance Sheet date the average portfolio dealing spread was 0.04% (2018: 0.00%).

14 Basis of valuation

31/10/19 31/10/19 31/10/18 31/10/18£'000 £'000 £'000 £'000

Assets Liabilities Assets Liabilities

Level 1: Quoted prices 42,470 (681) 37,778 (2,278)

Level 2: Observable market data 128,198 (105) 125,223 (996)

Level 3: Unobservable data - - - -

170,668 (786) 163,001 (3,274)


20


15 Shares in issue reconciliation

Shares in issue as at 31/10/18 Issued shares Cancelled shares

Shares in issue as at 31/10/19

Accumulation Shares 116,460,244 9,676,556 (2,999,314) 123,137,486

16 Related parties

The ACD, FIL Investment Services (UK) Limited, is regarded as a related party under FRS 102 because it provides key management personnel services to the authorised fund.The ACD acts as principal on all transactions of shares in the fund. The aggregate monies received through issues and paid through cancellations are disclosed in the Statement of Change in Net Assets Attributable to Shareholders, and the amounts due to, and from, the ACD in respect of share transactions at the year end are disclosed in Notes 9 and 11.Amounts paid to the ACD in respect of services provided are disclosed in Note 6. Amounts due at the year end of £92,000 (2018: £84,000) are included within accrued expenses in Note 11.Amounts rebated from the ACD in respect of the ACD fee rebate/waiver to income are included in note 5.Amounts recoverable at the year end in respect of ACD fee rebate/waiver are included within ACD fee rebate/waiver recoverable in Note 9.The fund invests in other Fidelity funds, all transactions in respect of which are transacted with FIL Investment Services (UK) Limited.Income received from Fidelity funds of £1,090,000 (2018: £136,000) is included in Note 5.During the year, the aggregate value of purchases and sales in Fidelity funds were £6,891,000 and £2,725,000 respectively (2018: £15,862,000 and £22,842,000).

17 Counterparty details of financial derivative transactions

31/10/19

BrokerCurrency Contracts CFDs Futures Swaps Options

Collateral - Cash Grand Total

£'000 £'000 £'000 £'000 £'000 £'000 £'000

Bank of America 16 - - - - - 16

BBH 231 - - - - - 231

CIBC 56 - - - - - 56

Citibank (32) - - - - - (32)

HSBC Global Markets 59 - - - - - 59

National Australia Bank (4) - - - - - (4)

Royal Bank of Canada (5) - - - - - (5)

State Street (28) - - - - - (28)

UBS - - 919 - - 2,413 3,332

Total 293 - 919 - - 2,413 3,625

31/10/18



£'000 £'000 £'000 £'000 £'000 £'000 £'000

Bank of America 1 - - - - - 1

BBH (9) - - - - - (9)

BNP Paribas (3) - - - - - (3)

CIBC 13 - - - - - 13

Deutsche Bank (2) - - - - - (2)

HSBC Global Markets 19 - - - - - 19

JP Morgan 6 - - - - - 6

National Australia Bank 159 - - - - - 159

Royal Bank of Canada (672) - - - - - (672)

UBS - - (1,281) - - 5,322 4,041

Total (488) - (1,281) - - 5,322 3,553

18 Shareholders' funds

The fund has one share class; Accumulation Shares. The annual management charge is as follows:Accumulation Shares : 0.50%The distributions per share class are given in the Distribution Statement.

19 Post balance sheet event

The net asset value in pence per share at the balance sheet date and the latest practicable date prior to the publication of this report have been recorded below. The percentage increase/(decrease) is a reflection of market fluctuation during this period.

NAV as at 31/10/19 NAV as at 03/02/20 Increase/(decrease)%

Accumulation Shares 157.34 159.30 1.25


21

Distribution Statement

for the year ended 31 October 2019Accumulation Shares - final distribution No. 12 in pence per shareGroup 1 - Shares purchased on or before 31 October 2018.Group 2 - Shares purchased from 1 November 2018 to 31 October 2019.

Net revenueEqualisation

(Note 2)

Amount accumulated

31/12/19

Amount accumulated

31/12/18

Group 1 3.2447 - 3.2447 3.8441

Group 2 2.1612 1.0835 3.2447 3.8441

xxx xxx xxx xxx xxx


22


Investment Objective and PolicyThe fund aims to increase the value of your investment over a period of 5 years or longer and to maintain volatility within the range of 6-8% p.a.

The fund invests globally, into a broad range of asset classes based on their risk profile. The fund is actively managed without reference to a benchmark.

The asset allocation is managed using a systematic volatility and risk management process. This typically involves increasing the fund’s allocation to lower risk assets e.g. government bonds when market volatility rises, and increasing the allocation to higher risk assets e.g. equities, when market volatility falls.

The fund can invest in funds (including funds managed by Fidelity), securities, money market instruments, cash, deposits and derivatives (which can be used for both efficient portfolio management and investment purposes).

Performance and Portfolio ActivityThe fund generated positive returns over the period. Equities contributed to performance, led by the exposure to the US and Pacific ex Japan markets, as investor sentiment improved in 2019. Holdings in emerging market debt, inflation-linked bonds, high yield and corporate bonds also supported returns.

The allocation to defensive assets such as corporate bonds, government bonds and inflation-linked bonds was increased, while growth assets, i.e. regional equities, were reduced. Within yield assets, the exposure to high yield was lowered, and that to dividend paying equities was raised.

OutlookThe fund is highly diversified across asset classes and regions. The allocation to asset classes is not impacted by the market outlook, but is determined by our volatility management model that targets a specific volatility range. The model allocates to asset classes on the basis of risk, taking into account the current market volatility level, and de-risks the portfolio when volatility rises.

Eugene Philalithis & Rahul SrivatsaFund Managers

31 October 2019


XXX SRRI

F Accumulation Shares 4

1 3 4 5 6 72















23


F Accumulation Shares

Change in net assets (pence per share) 2019 2018 2017

Opening net asset value per share 113.70 115.58 107.62

Return before operating charges* 11.31 (1.60) 8.24

Operating charges (0.30) (0.28) (0.28)

Return after operating charges* 11.01 (1.88) 7.96

Distributions (3.34) (2.70) (2.71)

Retained distributions on accumulation shares 3.34 2.70 2.71

Closing net asset value per share 124.71 113.70 115.58

*after direct transaction costs of 0.03 0.03 0.03

Performance

Return after charges 9.7% (1.6%) 7.4%

Other information

Closing net asset value (£'000) 1,375,766 1,331,612 949,753

Closing number of shares 1,103,144,825 1,171,123,373 821,693,855

Operating charges 0.25% 0.25% 0.25%

Direct transaction costs 0.03% 0.03% 0.03%


Highest share price 127.00 119.40 115.80

Lowest share price 99.32 110.80 104.30


24



[BLANK] Note £'000 £'000 £'000 £'000

Income


Revenue 5 39,819 31,128

Expenses 6 (3,154) (2,934)



Taxation 7 (87) (81)


Total return before distributions 117,159 (20,125)

Distributions 8 (36,577) (28,109)




[BLANK] Note £'000 £'000 £'000 £'000

Opening net assets attributable to shareholders 1,331,612 949,753



Amounts payable on cancellation of shares (625,888) (16,797)

(73,410) 398,362

Swing price adjustment 102 97


Retained distribution on accumulation shares 8 36,880 31,634

Closing net assets attributable to shareholders 1,375,766 1,331,612

Balance Sheet

as at 31 October 201931/10/19 31/10/18

[BLANK] Note £'000 £'000 £'000 £'000

Assets


Current assets:

Debtors 9 4,462 1,924

Cash equivalents 502,179 475,580



Total assets 1,377,907 1,363,112

Liabilities:

Investment liabilities (1,863) (31,216)

Creditors




Net assets attributable to shareholders 1,375,766 1,331,612


25




2 Equalisation





31/10/19 31/10/18£'000 £'000

Gains/(losses) on non-derivative securities+ 30,966 10,276

Gains/(losses) on derivative contracts+ 47,394 (50,713)

Gains/(losses) on forward currency contracts+ 2,666 (8,573)


Broker fee rebates - 9


+ These comprise:

Realised gains/(losses)++ 37,631 (9,531)

Unrealised gains/(losses) 43,395 (39,479)

Total 81,026 (49,010)


5 Revenue

31/10/19 31/10/18£'000 £'000


Unfranked UK dividend distributions 1,092 766

Overseas dividend distributions 2,314 715


Derivative revenue 9,384 10,423

Management fee rebate to income 18 4

ACD fee rebate/waiver to income 3,599 3,377

Bank interest 6,666 3,974

Taxable interest - 1


6 Expenses

31/10/19 31/10/18£'000 £'000


Investment management fees 3,154 2,934

3,154 2,934

Total expenses * 3,154 2,934

*The ACD is responsible for payment of all charges and expenses of the fund out of its investment management fees including audit fees amounting to £10,000 (including VAT) (2018: £10,000).


26


7 Taxation

31/10/19 31/10/18£'000 £'000



Total current taxation 87 81



Net revenue/(expense) multiplied by the standard rate of corporation tax of 20% (2018: 20%). 7,333 5,638Effects of:

Interest distributions (6,674) (5,382)

Overseas tax expensed (18) (16)



Current tax charge/(credit) 87 81


The fund is an interest distributing fund under Corporation Tax Act 2009 and as interest distributions are deductible when calculating the liability, the corporation tax charge will usually be reduced to nil, except where there are expenses which are not deductible.

8 Finance costs

31/10/19 31/10/18£'000 £'000


F Accumulation Shares

Final 36,880 31,634

Add: Revenue deducted on cancellation of shares 8,208 166

Deduct: Revenue received on issue of shares (8,511) (3,691)


Interest/other

Interest 1 3


Reconciliation of Net revenue after taxation to Net distribution for the year:

Net revenue after taxation for the year, per the Statement of Total Return 36,577 28,110

Add back (revenue)/expenses transferred to capital:

Revenue b/f 1 -

Revenue c/f (1) (1)

36,577 28,109

Details of the distribution per share is set out in the Distribution Statement.

9 Debtors

31/10/19 31/10/18£'000 £'000

Amounts receivable for issue of shares 3,931 1,478



UK income tax recoverable 203 107

Total debtors 4,462 1,924


31/10/19 31/10/18£'000 £'000

Amounts held at futures clearing houses and brokers 15,141 60,636




27


11 Other creditors

31/10/19 31/10/18£'000 £'000




Currency exposure



Canadian Dollar (19) - - (19)

Euro 89,146 - - 89,146

Japanese Yen 7,373 1 - 7,374

UK Pound 800,156 44,912 4,184 849,252

US Dollar 430,013 - - 430,013

Total 1,326,669 44,913 4,184 1,375,766

31/10/18 £'000 £'000 £'000 £'000

Canadian Dollar (8) - - (8)

Euro 91,176 - - 91,176

Japanese Yen 567 - - 567

UK Pound 756,035 85,767 1,640 843,442

US Dollar 396,435 - - 396,435

Total 1,244,205 85,767 1,640 1,331,612






Euro 86,831 - 2,536 89,367

Japanese Yen - - 7,739 7,739

UK Pound 293,755 - 556,530 850,285

US Dollar 115,362 - 315,154 430,516

Total 495,948 - 881,959 1,377,907

31/10/18 £'000 £'000 £'000 £'000

Euro 96,332 - 5 96,337

Japanese Yen - - 2,348 2,348

UK Pound 842,534 - 3,784 846,318

US Dollar 119,038 - 299,071 418,109

Total 1,057,904 - 305,208 1,363,112


28







Euro - - 221 221


UK Pound - - 1,376,799 1,376,799

US Dollar - - 503 503

Total - - 1,377,907 1,377,907

31/10/18 £'000 £'000 £'000 £'000


Euro - - 5,161 5,161

Japanese Yen - - 1,781 1,781

UK Pound - - 1,334,488 1,334,488

US Dollar - - 21,674 21,674

Total - - 1,363,112 1,363,112

^ Includes £1,375,766,000 in respect of the fund's liability to redeem all shares (2018: £1,331,612,000).The fund invests in equity, fixed interest funds, cash/money market funds and has bank balances and/or amounts held at futures clearing houses and brokers.




Currency risk


Interest rate risk


Other price risk


Bond futures

The fund invests into futures to gain exposure to the bond markets. A 1% change in interest rates would lead to a change representing 0.61% (2018: 0.50%) of the fund's market value.

Equity derivatives

The fund invests into futures to gain exposure to the equity markets. A 10% change in the price of the futures would result in a 3.82% (2018: 4.10%) change in the fund's market value.



£'000 £'000 % £'000 %

Equity 110,962 64 0.06 - -

Mutual Fund 304,756 - - - -


Total 415,718 159 -



£'000 £'000 % £'000 %

Equity 125,346 75 0.06 - -

Mutual Fund 307,638 - - - -


Total 432,984 171 -



0.03 %

0.00 %


29



£'000 £'000 % £'000 %

Equity 190,979 116 0.06 - -

Mutual Fund 413,663 - - - -


Total 604,642 215 -



£'000 £'000 % £'000 %

Equity 64,746 42 0.06 - -

Mutual Fund 385,153 - - - -


Total 449,899 136 -



0.03 %

0.00 %



31/10/19 31/10/19 31/10/18 31/10/18£'000 £'000 £'000 £'000


Level 1: Quoted prices 217,067 (1,687) 213,198 (25,655)

Level 2: Observable market data 1,111,465 (176) 1,062,223 (5,561)


1,328,532 (1,863) 1,275,421 (31,216)




F Accumulation Shares 1,171,123,373 457,492,552 (525,471,100) 1,103,144,825

16 Related parties

The ACD, FIL Investment Services (UK) Limited, is regarded as a related party under FRS 102 because it provides key management personnel services to the authorised fund.The ACD acts as principal on all transactions of shares in the fund. The aggregate monies received through issues and paid through cancellations are disclosed in the Statement of Change in Net Assets Attributable to Shareholders, and the amounts due to, and from, the ACD in respect of share transactions at the year end are disclosed in Notes 9 and 11.Amounts paid to the ACD in respect of services provided are disclosed in Note 6. Amounts due at the year end of £278,000 (2018: £284,000) are included within accrued expenses in Note 11.Amounts rebated from the ACD in respect of the ACD fee rebate/waiver to income are included in note 5.Amounts recoverable at the year end in respect of ACD fee rebate/waiver are included within ACD fee rebate/waiver recoverable in Note 9.The fund invests in other Fidelity funds, all transactions in respect of which are transacted with FIL Investment Services (UK) Limited.Income received from Fidelity funds of £6,179,000 (2018: £3,169,000) is included in Note 5.During the year, the aggregate value of purchases and sales in Fidelity funds were £90,752,000 and £95,834,000 respectively (2018: £217,531,000 and £311,376,000).


30



31/10/19



£'000 £'000 £'000 £'000 £'000 £'000 £'000

JP Morgan 1,045 - - - - - 1,045

State Street (133) - - - - - (133)

UBS - - 9,446 - - 15,141 24,587

Total 912 - 9,446 - - 15,141 25,499

31/10/18



£'000 £'000 £'000 £'000 £'000 £'000 £'000

BNP Paribas (49) - - - - - (49)

National Australia Bank 2,304 - - - - - 2,304

Royal Bank of Canada (5,513) - - - - - (5,513)

UBS - - (25,580) - - 60,326 34,746

Total (3,258) - (25,580) - - 60,326 31,488


The fund has one share class; F Accumulation Shares. The annual management charge is as follows:F Accumulation Shares : 0.25%The distributions per share class are given in the Distribution Statement.




F Accumulation Shares 124.71 126.50 1.44


31


for the year ended 31 October 2019F Accumulation Shares - final distribution No. 5 in pence per shareGroup 1 - Shares purchased on or before 31 October 2018.Group 2 - Shares purchased from 1 November 2018 to 31 October 2019.

Gross revenueEqualisation

(Note 2)

Amount accumulated

31/12/19

Amount accumulated

31/12/18

Group 1 3.3432 - 3.3432 2.7012

Group 2 1.5394 1.8038 3.3432 2.7012

xxx xxx xxx xxx xxx


32


Investment Objective and PolicyThe fund aims to achieve an income yield that is above 4% per annum over a typical market cycle (5-7 years). Any income you may receive will vary depending on the share class of the fund into which you are invested and is not guaranteed.

The fund is actively managed without reference to a benchmark and invests over 50% in funds (including funds managed by Fidelity) which provide global exposure to a mixture of asset classes such as transferable securities, money market instruments, cash and deposits. This allocation to funds will normally be higher but may vary depending on market conditions and market opportunities. The fund can also invest directly into transferable securities, money market instruments, cash and deposits, and is also able to use derivatives for efficient portfolio management and investment purposes.

Asset allocation exposure of the fund will be actively managed subject to it remaining within the following parameters: 20-100% income assets (such as bonds and cash) and 0-65% growth assets (such as equities, infrastructure securities and property securities). The fund’s asset allocation can be adjusted within the ranges in order to preserve capital or to take advantage of market opportunities.

Performance and Portfolio ActivityThe fund generated positive returns over the period. Equities, investment grade bonds and high yield bonds supported returns. The allocation to emerging market debt and alternative assets such as infrastructure also added value. A reinsurance strategy declined on news that it was setting up loss reserves to pay for claims from various natural disasters.

We sold our position in Australian government bonds following their strong performance and lowered the exposure to Fidelity Funds - US High Yield. A new position in Fidelity Funds - European High Yield was purchased in view of its attractive valuation. In the alternatives space, we purchased a position in Fidelity UK Real Estate Fund. We continue to hedge part of the fund’s equity market beta through short futures positions. This provides some protection to the portfolio against equity market volatility.

OutlookThe late-cycle environment and performance across asset classes continues to send mixed signals on the direction of markets. Our focus remains on balancing income with risk, but we are also allocating tactically to take advantage of opportunities arising from volatility and market dislocations.

Eugene Philalithis, George Efstathopoulos & Chris ForganFund Managers

31 October 2019


XXX SRRI

I Income Shares 4

1 3 4 5 6 72















33


I Income Shares

Change in net assets (pence per share) 2019 2018

Opening net asset value per share1 97.60 100.00

Return before operating charges* 7.55 1.19

Operating charges (0.63) (0.63)

Return after operating charges* 6.92 0.56

Distributions (4.53) (2.96)

Retained distributions on accumulation shares - -

Closing net asset value per share 99.99 97.60

*after direct transaction costs of 0.01 0.03

Performance

Return after charges 7.1% 0.6%

Other information

Closing net asset value (£'000) 91,838 78,082

Closing number of shares 91,850,425 80,006,000

Operating charges 0.64% 0.22%

Direct transaction costs 0.01% 0.03%


Highest share price 102.30 101.20

Lowest share price 93.69 97.651The fund launched on 21 February 2018.


34



[BLANK] Note £'000 £'000 £'000 £'000

Income


Revenue 5 3,911 2,395

Expenses 6 (493) (322)



Taxation 7 - -


Total return before distributions 5,907 441

Distributions 8 (3,871) (2,365)




[BLANK] £'000 £'000 £'000 £'000

Opening net assets attributable to shareholders 78,082 -



Amounts payable on cancellation of shares (1) (3)

11,706 80,006

Swing price adjustment 14 -


Closing net assets attributable to shareholders 91,838 78,082

Balance Sheet

as at 31 October 201931/10/19 31/10/18

[BLANK] Note £'000 £'000 £'000 £'000

Assets


Current assets:

Debtors 9 384 1,882

Cash equivalents 1,794 792



Total assets 93,252 79,315

Liabilities:

Investment liabilities (435) (284)

Creditors

Distribution payable (921) (899)




Net assets attributable to shareholders 91,838 78,082


35




2 Equalisation





31/10/19 31/10/18£'000 £'000

Gains/(losses) on non-derivative securities+ 1,938 (285)

Gains/(losses) on derivative contracts+ (65) 83

Gains/(losses) on forward currency contracts+ 365 (1,631)


Transaction charges (3) (3)

ACD fee rebate/waiver to capital 245 202

Management fee rebate to capital 20 1


+ These comprise:

Realised gains/(losses)++ (1,032) (1,684)

Unrealised gains/(losses) 3,270 (149)

Total 2,238 (1,833)


5 Revenue

31/10/19 31/10/18£'000 £'000


Overseas dividend distributions 719 464


ACD fee rebate/waiver to income 341 214

Bank interest 24 3

UK property income distributions 138 -


6 Expenses

31/10/19 31/10/18£'000 £'000


Investment management fees 421 274


Foreign exchange administration fees 4 1

467 302Payable to the Depositary, associates of the Depositary, and agents of either of them:

Depositary fees 10 7

10 7Other expenses:

Audit fee 10 10

Other operating expenses 6 3

16 13

Total expenses 493 322


36


7 Taxation

31/10/19 31/10/18£'000 £'000


Total current taxation - -



Net revenue/(expense) multiplied by the standard rate of corporation tax of 20% (2018: 20%). 682 413Effects of:

ACD fee waiver to capital 34 -

Interest distributions (470) (309)

Management fee rebate 19 41


Current tax charge/(credit) - -


The fund is an interest distributing fund under Corporation Tax Act 2009 and as interest distributions are deductible when calculating the liability, the corporation tax charge will usually be reduced to nil, except where there are expenses which are not deductible.

8 Finance costs

31/10/19 31/10/18£'000 £'000


I Income Shares

Final 498 555

Interim 3,439 1,810

3,937 2,365

Deduct: Revenue received on issue of shares (66) -


Interest/other

Interest 1 -

Derivative expense 9 9

10 9


Reconciliation of Net revenue after taxation to Net distribution for the year:

Net revenue after taxation for the year, per the Statement of Total Return 3,408 2,064

Add back (revenue)/expenses transferred to capital:


Investment management fees 421 274

3,871 2,365

Details of the distributions per share are set out in the Distribution Statement.

9 Debtors

31/10/19 31/10/18£'000 £'000

Sales awaiting settlement - 1,578

Accrued revenue 174 118



Total debtors 384 1,882


37



31/10/19 31/10/18£'000 £'000

Amounts held at futures clearing houses and brokers 215 26



11 Other creditors

31/10/19 31/10/18£'000 £'000




Currency exposure




Chinese Yuan Renminbi 62 - - 62

Euro 8,631 - 50 8,681

Hong Kong Dollar 17 - - 17

Japanese Yen (377) - - (377)


UK Pound 59,396 1,246 (645) 59,997

US Dollar 23,398 12 - 23,410

Total 91,175 1,258 (595) 91,838

31/10/18 £'000 £'000 £'000 £'000


Czech Koruna 4 - - 4

Euro 6,336 - 21 6,357

Hong Kong Dollar (3) - - (3)

Hungarian Forint 1 - - 1

Japanese Yen (29) - - (29)

Korean Won (3) - - (3)


Taiwan Dollar (1) - - (1)

Turkish Lira (4) - - (4)

UK Pound 46,204 1,572 911 48,687

US Dollar 23,043 12 - 23,055

Total 75,566 1,584 932 78,082



38







Chinese Yuan Renminbi - - 67 67

Euro 6,248 - 2,437 8,685




UK Pound 30,416 - 30,566 60,982

US Dollar 20,682 - 2,768 23,450

Total 57,346 - 35,906 93,252

31/10/18 £'000 £'000 £'000 £'000


Czech Koruna - - 4 4

Euro 4,124 - 2,244 6,368



Thai Baht - - 1 1

Turkish Lira - - 20 20

UK Pound 26,013 - 23,623 49,636

US Dollar 19,718 - 3,547 23,265

Total 49,855 - 29,460 79,315






Chinese Yuan Renminbi - - 5 5

Euro - - 4 4



UK Pound - - 92,823 92,823

US Dollar - - 40 40

Total - - 93,252 93,252

31/10/18 £'000 £'000 £'000 £'000


Euro - - 11 11




Korean Won - - 3 3

Taiwan Dollar - - 1 1

Thai Baht - - 1 1

Turkish Lira - - 24 24

UK Pound - - 79,031 79,031

US Dollar - - 210 210

Total - - 79,315 79,315

^ Includes £91,838,000 in respect of the fund's liability to redeem all shares (2018: £78,082,000).The fund invests in equity, fixed interest funds, cash/money market funds and has bank balances and/or amounts held at futures clearing houses and brokers.




39



Currency risk


Interest rate risk


Other price risk


Bond futures

At the year end the fund holds no derivatives that could impact it significantly (2018: same).

Equity derivatives

At the year end the fund holds no equity derivatives that could impact it significantly (2018: same).



£'000 £'000 % £'000 %

Equity 1,734 1 0.04 1 0.08

Mutual Fund 26,197 - - - -


Total 28,062 1 1



£'000 £'000 % £'000 %

Equity 2,051 1 0.06 - -

Mutual Fund 14,191 1 0.01 - -


Total 16,699 2 -



0.00 %

0.00 %


£'000 £'000 % £'000 %

Equity 9,973 6 0.06 - -

Mutual Fund 81,943 11 0.01 4 0.01


Total 91,992 17 4



£'000 £'000 % £'000 %

Equity 4,131 2 0.06 - -

Mutual Fund 12,687 - - - -


Total 16,890 2 -



0.02 %

0.01 %



40



31/10/19 31/10/19 31/10/18 31/10/18£'000 £'000 £'000 £'000


Level 1: Quoted prices 14,588 (46) 5,780 -

Level 2: Observable market data 77,022 (389) 70,070 (284)


91,610 (435) 75,850 (284)




I Income Shares 80,006,000 11,845,425 (1,000) 91,850,425

16 Related parties

The ACD, FIL Investment Services (UK) Limited, is regarded as a related party under FRS 102 because it provides key management personnel services to the authorised fund.The ACD acts as principal on all transactions of shares in the fund. The aggregate monies received through issues and paid through cancellations are disclosed in the Statement of Change in Net Assets Attributable to Shareholders, and the amounts due to, and from, the ACD in respect of share transactions at the year end are disclosed in Notes 9 and 11.Amounts rebated from the ACD in respect of the ACD fee rebate/waiver to capital are included in note 4.Amounts rebated from the ACD in respect of the ACD fee rebate/waiver to income are included in note 5 and amounts receivable at the year end are included within the ACD fee rebate/waiver recoverable in note 9.The fund invests in other Fidelity funds, all transactions in respect of which are transacted with FIL Investment Services (UK) Limited.Income received from Fidelity funds of £1,057,000 (2018: £11,000) is included in Note 5 and amounts receivable at the year end of nil (2018: £32,000) are included within accrued revenue in Note 9.During the year, the aggregate value of purchases and sales in Fidelity funds were £15,948,000 and £7,093,000 respectively (2018: £30,878,000 and £3,456,000).Amounts paid to the ACD in respect of services provided are disclosed in Note 6. Amounts due at the period end of £43,000 are included within accrued expenses in Note 11.


31/10/19



£'000 £'000 £'000 £'000 £'000 £'000 £'000

BBH (377) - - - - - (377)

BNP Paribas (1) - - - - - (1)

CIBC (4) - - - - - (4)

Citibank 47 - - - - - 47

JP Morgan 1,285 - - - - - 1,285

National Australia Bank 425 - - - - - 425

State Street 1 - - - - - 1

UBS - - (25) - - 215 190

Total 1,376 - (25) - - 215 1,566

31/10/18



£'000 £'000 £'000 £'000 £'000 £'000 £'000

BBH 17 - - - - - 17

HSBC Global Markets (33) - - - - - (33)

JP Morgan (4) - - - - - (4)

Morgan Stanley (216) - - - - - (216)

Royal Bank of Canada 139 - - - - - 139

State Street 3 - - - - - 3

UBS - - 126 - - 26 152

Total (94) - 126 - - 26 58


41



The fund has one share class; I Income Shares. The annual management charge is as follows:I Income Shares : 0.50%The distributions per share class are given in the Distribution Statement.




I Income Shares 99.99 101.20 1.21


42


for the year ended 31 October 2019I Income Shares - final distribution No. 21 in pence per shareGroup 1 - Shares purchased on or before 30 September 2019.Group 2 - Shares purchased from 1 October 2019 to 31 October 2019.


(Note 2)

Amount distributed

15/12/19

Amount distributed

15/12/18

Group 1 0.5417 - 0.5417 0.6940

Group 2 0.0000 0.5417 0.5417 0.6940

xxx xxx xxx xxx xxxI Income Shares - interim distributions in pence per shareFor the monthly distributing funds, shares purchased during the month prior to the ex-dividend date are classified as Group 2 shares.All other holdings are classified as Group 1 shares.


(Note 2)

Amount distributed 2018/2019

Amount distributed 2017/2018

Group 1

Distribution No. 10 0.2800 - 0.2800 -

Distribution No. 11 0.3000 - 0.3000 -

Distribution No. 12 0.3300 - 0.3300 -

Distribution No. 13 0.3300 - 0.3300 0.0059

Distribution No. 14 0.3300 - 0.3300 0.2763

Distribution No. 15 0.3400 - 0.3400 0.2800

Distribution No. 16 0.3800 - 0.3800 0.2800

Distribution No. 17 0.3800 - 0.3800 0.2900

Distribution No. 18 0.3800 - 0.3800 0.3500

Distribution No. 19 0.4800 - 0.4800 0.3500

Distribution No. 20 0.4600 - 0.4600 0.4300

Group 2

Distribution No. 10 - 0.2800 0.2800 -

Distribution No. 11 - 0.3000 0.3000 -

Distribution No. 12 - 0.3300 0.3300 -

Distribution No. 13 - 0.3300 0.3300 0.0059

Distribution No. 14 - 0.3300 0.3300 0.2763

Distribution No. 15 - 0.3400 0.3400 0.2800

Distribution No. 16 - 0.3800 0.3800 0.2800

Distribution No. 17 - 0.3800 0.3800 0.2900

Distribution No. 18 - 0.3800 0.3800 0.3500

Distribution No. 19 - 0.4800 0.4800 0.3500

Distribution No. 20 - 0.4600 0.4600 0.4300

xxx xxx xxx xxx xxx

Portfolio Statement


43

as at 31 October 2019

Percentage Holdings/ Market value/ of total Holdings Unrealised gain/(loss) net assets Equivalent Portfolio of investments £’000 %

Yield - (29.83%)

876,189 Fidelity Funds - Emerging Market Debt Fund Y Acc USD 16,369 8.45

651,520 Fidelity Global High Yield I Acc 9,857 5.09

833,299 Fidelity Funds - Global High Yield Fund I EUR (hedged) 7,155 3.69

3,033,156 Fidelity Global Enhanced Income Fund W Acc 5,854 3.02

440,448 Fidelity Funds - Global Equity Income Fund I Acc USD 5,194 2.68

1,894,912 iShares Global Property Securities Equity Index Fund (UK) 4,580 2.36

3,925 Assenagon Alpha Volatility (I) Inc EUR 3,605 1.86

52,614 27.15

Defensive - (24.77%)

2,102 Fidelity Institutional Liquidity Fund - Sterling C Acc 21,340 11.01

15,192,450 Fidelity Funds - Global Inflation-linked Bond Fund Y GBP (hedged) 19,072 9.84

346 Fidelity Institutional Liquidity Fund - USD C Acc 2,813 1.45

43,225 22.31

Financials - (19.48%)

184,141 iShares Global Corporate Bond UCITS ETF 14,343 7.40

53,189 iShares Core S&P 500 UCITS ETF 12,362 6.38

280,844 iShares Physical Gold ETC 6,390 3.30

80,895 SPDR S&P US Dividend Aristocrats UCITS ETF 3,606 1.86

1,397 JPMorgan Chase 135 0.07

1,706 Discover Financial Services 106 0.05

2,664 Morgan Stanley 95 0.05

745 PNC Financial Services Group 85 0.04

2,000 Tokio Marine Holdings 83 0.04

1,292 Citigroup 73 0.04

118,164 Lloyds Banking Group 67 0.03

272,600 Bank Rakyat Indonesia 63 0.03

2,194 AXA 45 0.02

23,694 Barclays 40 0.02

9,200 Kasikornbank (F) 33 0.02

2,868 Swedbank 31 0.02

4,021 IG Group Holdings 26 0.01

37,583 19.40

Growth - (13.00%)

462,220 Fidelity Index Pacific ex Japan Fund F Acc 7,729 3.99

441,534 Fidelity Index Europe ex UK Fund F Acc 6,742 3.48

406,217 Fidelity Funds - World Fund I Acc USD 4,452 2.30

247,720 Fidelity Index Emerging Markets F Acc 3,876 2.00

461,669 Fidelity Funds - Global Demographics Fund Y Acc GBP 1,225 0.63

65,845 Fidelity Funds - Emerging Asia Fund A Acc USD 951 0.49

3,362 Fast Global Fund Y Acc GBP 620 0.32

25,595 13.21

Property - (0.00%)

784 Fidelity International Eurozone Select Real Estate Fund 4,019 2.07

4,019 2.07

Opportunistic - (6.77%)

13,289 Leadenhall UCITS ILS Fund 1,134 0.59

1,134 0.59

Portfolio Statement


44



Information Technology - (0.53%)

1,155 Microsoft 128 0.07

554 Apple 104 0.05

891 SAP 91 0.05

2,078 Intel 90 0.05

2,628 Samsung Electronics 88 0.05

2,733 Genpact 82 0.04

1,054 Qualcomm 66 0.03

4,886 Nuance Communications 61 0.03

4,500 Sunny Optical Technology Group 56 0.03

23,000 Chicony Electronics 55 0.03

1,271 Oracle 54 0.03

3,416 Infineon Technologies 52 0.03

1,173 Cisco Systems 43 0.02

348 Salesforce.com 42 0.02

399 Splunk 37 0.02

2,468 HP 33 0.02

1,082 0.56

Futures - ((0.70)%)

111,200 NIKKEI 225 Mini Commodity Future 12/12/2019 1,212 0.63

(5,700,000) EURO-BUND Commodity Future 06/12/2019 154 0.08

1,040 EURO STOXX 50 Commodity Future 20/12/2019 82 0.04

10,650 Mini MSCI Emerging Markets Index Future 20/12/2019 71 0.04

(3,500,000) Canadian 10 Year Commodity Bond Future 18/12/2019 55 0.03

4,000 E-Mini S&P Financial Index Future 20/12/2019 15 0.01

1,950 E-Mini Russell 100 Index Future 20/12/2019 7 0.00

10 Swiss Market Index Future 20/12/2019 2 0.00

800 Amsterdam AEX Index Future 15/11/2019 1 0.00

10 CAC40 10 Euro Index Future 15/11/2019 1 0.00

(150) HANG SENG Index Future 28/11/2019 0 0.00

900 E-Mini S&P Industrial Select Sector Index Future 20/12/2019 0 0.00

350 Mini S&P/TSX 60 Index Future 19/12/2019 0 0.00

40 IBEX 35 Index Future 15/11/2019 (1) 0.00

100,000 Euro-BOBL Commodity Future 06/12/2019 (1) 0.00

600,000 Euro-BTP Commodity Future 06/12/2019 (2) 0.00

100 ASX SPI 200 Index Futures 19/12/2019 (2) 0.00

1,000 E-Mini S&P Consumer Staples Index Future 20/12/2019 (3) 0.00

700 E-Mini S&P Cons Dist Index Future 20/12/2019 (5) 0.00

(4,800) OBX Index Future 15/11/2019 (8) 0.00

1,600,000 Euro-Schatz Commodity Future 06/12/2019 (8) 0.00

800,000 Long Gilt Commodity Future 27/12/2019 (8) 0.00

(30,000) TOPIX Index Future 12/12/2019 (9) 0.00

3,400,000 US 2 Year Treasury Note (CBT) Commodity Future 31/12/2019 (10) (0.01)

300,000 US 20 Year Long Bond (CBT) Commodity Future 19/12/2019 (10) (0.01)

100,000 EURO BUXL 30 Year Commodity Future 06/12/2019 (12) (0.01)


400,000 Euro OAT Commodity Future 06/12/2019 (13) (0.01)

(2,900) E-Mini S&P Utilities Index Future 20/12/2019 (14) (0.01)

(1,300) E-Mini S&P Material Index Future 20/12/2019 (15) (0.01)

(1,100) E-Mini S&P Healthcare Index Future 20/12/2019 (18) (0.01)

1,500 MSCI Pacific Ex Japan Index Future 20/12/2019 (19) (0.01)

Portfolio Statement


45



(1,500) Russell 1000 E-Mini Future 20/12/2019 (29) (0.01)

400,000 US Ultra Bond Commodity Future 19/12/2019 (29) (0.01)

450,000,000 Japan 10 Year Bond (TSE) Commodity Future 12/12/2019 (30) (0.02)

(1,600) E-Mini S&P Technology Select Sector Index Future 20/12/2019 (30) (0.02)

2,400 E-Mini S&P Energy Select Sector Index Future 20/12/2019 (59) (0.03)

(3,700) E-Mini S&P 500 Index Future 20/12/2019 (86) (0.04)

1,870 FTSE 100 Index Future 20/12/2019 (103) (0.05)


919 0.47

Health Care - (0.47%)

541 Roche Holdings 125 0.06

7,800 Santen Pharmaceutical 106 0.05

3,150 Boston Scientific 102 0.05

1,406 Abbott Laboratories 91 0.05

462 CSL 63 0.03

881 AmerisourceBergen 58 0.03

500 Icon 58 0.03

2,933 Mylan 44 0.02

500 Nippon Shinyaku 35 0.02

994 Koninklijke Philips 33 0.02

283 Ascendis Pharma (ADR) 24 0.01

739 0.38

Industrials - (0.23%)

6,253 SKF 87 0.04

2,334 Allison Transmission Holdings 84 0.04

753 Airbus 84 0.04

894 Woodward 74 0.04

2,400 Recruit Holdings 61 0.03

2,851 Atlantia 54 0.03

5,607 General Electric 44 0.02

568 DCC 41 0.02

190,000 Pacific Basin Shipping 34 0.02

31,000 SITC International Holdings 26 0.01

103,400 LT Group 21 0.01

610 0.31

Communication Services - (0.22%)

1,768 T-Mobile US 113 0.06

100 Alphabet (A) 97 0.05

243 Charter Communications (A) 88 0.05

1,505 Activision Blizzard 65 0.03

3,640 Quebecor (B) 64 0.03

359 Facebook (A) 52 0.03

31,777 Nine Entertainment Company Holdings 31 0.02

7,053 TPG Telecom 25 0.01

535 0.28

Portfolio Statement


46



Consumer Staples - (0.15%)

1,262 Heineken 100 0.05

2,495 Swedish Match 90 0.05

839 Walmart 76 0.04

3,300 Japan Tobacco 57 0.03

665 Nestle 55 0.03

1,311 British American Tobacco 36 0.02

1,146 Kroger 22 0.01

436 0.23

Forward Foreign Exchange Contracts - ((0.29)%)

(54,631,400) Bought GBP sold USD @ 1.289925 for settlement 27/11/2019 227 0.12

(11,253,400) Bought GBP sold EUR @ 1.154748 for settlement 27/11/2019 57 0.03

1,247,595 Bought USD sold CLP @ 913.946520 for settlement 27/11/2019 40 0.02

(3,867,400) Bought GBP sold CHF @ 1.269111 for settlement 27/11/2019 22 0.01

(19,583,900) Bought GBP sold NOK @ 11.841963 for settlement 27/11/2019 16 0.01

(1,661,500) Bought GBP sold USD @ 1.289925 for settlement 27/11/2019 7 0.00

17,542,553,300 Bought IDR sold USD @ 1.291155 for settlement 27/11/2019 7 0.00

(20,712,100) Bought GBP sold SEK @ 12.459582 for settlement 27/11/2019 7 0.00

191,653,500 Bought JPY sold GBP @ 0.007114 for settlement 27/11/2019 4 0.00

13,054,400 Bought USD sold GBP @ 0.770957 for settlement 27/11/2019 2 0.00

1,246,708 Bought USD sold IDR @ 18158.120485 for settlement 27/11/2019 2 0.00

(442,752,000) Bought GBP sold HUF @ 382.237200 for settlement 27/11/2019 2 0.00

(679,200) Bought GBP sold CAD @ 1.697931 for settlement 27/11/2019 2 0.00

327,600 Bought AUD sold GBP @ 0.529326 for settlement 27/11/2019 1 0.00

(1,757,000) Bought GBP sold NZD @ 2.020046 for settlement 27/11/2019 1 0.00

1,561,900 Bought NZD sold GBP @ 0.494090 for settlement 27/11/2019 1 0.00

79,323,100 Bought RUB sold USD @ 1.291408 for settlement 27/11/2019 0 0.00

(757,800) Bought GBP sold USD @ 1.297090 for settlement 27/11/2019 0 0.00

(361,200) Bought GBP sold EUR @ 1.161552 for settlement 27/11/2019 0 0.00

(111,100) Bought GBP sold EUR @ 1.161552 for settlement 27/11/2019 0 0.00

1,308,500 Bought CHF sold GBP @ 0.781923 for settlement 27/11/2019 0 0.00

200,600 Bought EUR sold GBP @ 0.865990 for settlement 27/11/2019 (1) 0.00

(46,969,600) Bought GBP sold JPY @ 140.560951 for settlement 27/11/2019 (1) 0.00

(1,744,200) Bought GBP sold AUD @ 1.883453 for settlement 27/11/2019 (2) 0.00

8,705,500 Bought SEK sold GBP @ 0.080226 for settlement 27/11/2019 (3) 0.00

5,911,900 Bought NOK sold GBP @ 0.084416 for settlement 27/11/2019 (5) 0.00

715,812,300 Bought JPY sold GBP @ 0.007149 for settlement 27/11/2019 (8) 0.00

2,312,900 Bought CAD sold GBP @ 0.590091 for settlement 27/11/2019 (11) (0.01)

883,197,100 Bought CLP sold USD @ 1.299052 for settlement 27/11/2019 (23) (0.01)

2,066,706,200 Bought JPY sold GBP @ 0.007149 for settlement 27/11/2019 (24) (0.01)

18,348,500 Bought ZAR sold GBP @ 0.052133 for settlement 27/11/2019 (27) (0.01)

293 0.15

Utilities - (0.20%)

737 NextEra Energy 134 0.07

2,026 Edison International 97 0.05

1,381 Exelon 50 0.03

281 0.15

Portfolio Statement


47



Consumer Discretionary - (0.19%)

591 Lowes 51 0.03

207 adidas 50 0.03

459 Michelin (CGDE) (B) 43 0.02

344 Naspers (N) 38 0.02

2,639 TRI Pointe Group 32 0.02

1,050 eBay 29 0.01

344 Prosus (N) 18 0.01

261 0.13

Energy - (0.20%)

1,968 Marathon Petroleum 100 0.05

2,908 Suncor Energy 68 0.04

714 EOG Resources 38 0.02

76,000 China Petroleum & Chemical (H) 33 0.02

413 Concho Resources 21 0.01

260 0.13

Materials - (0.12%)

2,289 CCL Industries (B) 73 0.04

875 Scotts Miracle-Gro 66 0.03

16,400 Ivanhoe Mine (A) 33 0.02

23,462 Lynas 31 0.02

203 0.10

Real Estate - (0.05%)

212 Equinix 93 0.05

93 0.05

Portfolio of investments 169,882 87.67

Cash and other net assets/(liabilities) 23,882 12.33

Net assets 193,764 100.00

The figures in brackets represent the sector distributions at 31 October 2018. Where securities are reclassified in the current period comparative percentages have been restated.The percentage of net assets disclosed above is subject to rounding.Unless otherwise stated, all holdings are on an official stock exchange listing or are permitted collective investment schemes.Where the holdings/holdings equivalent value is reported to be nil this is due to a fractional share position.

Portfolio Statement


48



Defensive - (51.54%)

31,612 Fidelity Institutional Liquidity Fund - Sterling C Acc 320,946 23.33

22,303 Fidelity Institutional Liquidity Fund - USD C Acc 181,233 13.17

107,103,808 Fidelity Funds - Global Inflation-linked Bond Fund Y GBP (hedged) 134,458 9.77

11,135,471 Fidelity Funds - Euro Cash Fund A EUR 86,831 6.31

723,468 52.59

Yield - (28.06%)

10,528,543 Fidelity Global High Yield I Acc 159,297 11.58

6,174,806 Fidelity Funds - Emerging Market Debt Fund Y Acc USD 115,362 8.39

21,368,614 Fidelity Global Enhanced Income Fund W Acc 41,241 3.00

13,399,717 iShares Global Property Securities Equity Index Fund (UK) 32,387 2.35

2,622,512 Fidelity Funds - Global Equity Income Fund I Acc USD 30,926 2.25

379,213 27.56


1,297,225 iShares Global Corporate Bond UCITS ETF 101,049 7.34

375,205 iShares Core S&P 500 UCITS ETF 87,209 6.34

569,015 SPDR S&P US Dividend Aristocrats UCITS ETF 25,372 1.84

213,630 15.53

Futures - ((1.92)%)

742,700 NIKKEI 225 Mini Commodity Future 12/12/2019 7,696 0.56

30,560 EURO STOXX 50 Commodity Future 20/12/2019 2,536 0.18

105,650 Mini MSCI Emerging Markets Index Future 20/12/2019 901 0.07

900,000 Euro-BOBL Commodity Future 06/12/2019 (14) 0.00

3,900,000 Euro-BTP Commodity Future 06/12/2019 (15) 0.00

1,100,000 Canadian 10 Year Commodity Bond Future 18/12/2019 (19) 0.00

21,940 MSCI Pacific Ex Japan Index Future 20/12/2019 (34) 0.00

400,000 EURO BUXL 30 Year Commodity Future 06/12/2019 (44) 0.00

4,500,000 Long Gilt Commodity Future 27/12/2019 (45) 0.00

11,200,000 Euro-Schatz Commodity Future 06/12/2019 (51) 0.00

4,400,000 US 10 Year Treasury Note (CBT) Commodity Future 19/12/2019 (60) 0.00

24,600,000 US 2 Year Treasury Note (CBT) Commodity Future 31/12/2019 (64) 0.00

2,100,000 US 20 Year Long Bond (CBT) Commodity Future 19/12/2019 (69) (0.01)


3,200,000 Euro OAT Commodity Future 06/12/2019 (98) (0.01)

2,900,000 US Ultra Bond Commodity Future 19/12/2019 (186) (0.01)

2,790,000,000 Japan 10 Year Bond (TSE) Commodity Future 12/12/2019 (190) (0.01)

15,530 FTSE 100 Index Future 20/12/2019 (709) (0.05)

9,446 0.69

Portfolio Statement


49




(284,674,700) Bought GBP sold USD @ 1.290718 for settlement 27/11/2019 1,045 0.08

1,870,621,500 Bought JPY sold GBP @ 0.007114 for settlement 27/11/2019 43 0.00

14,934,528,600 Bought JPY sold GBP @ 0.007149 for settlement 27/11/2019 (176) (0.01)

912 0.07

Portfolio of investments 1,326,669 96.44

Cash and other net assets/(liabilities) 49,097 3.56

Net assets 1,375,766 100.00


Portfolio Statement


50



High Yield - (28.17%)

544,934 Fidelity Funds - Global Hybrids Bond Fund Y USD 4,569 4.98

725,761 Fidelity Funds - Asian High Yield Fund A MDist USD 4,481 4.88

27,922 M&G European Loan Fund 2,484 2.70

280,206 Fidelity Funds - US High Yield Fund A MDist USD 2,459 2.68

2,178,278 Fair Oaks Income 1,235 1.34

1,712,460 Toro Fund 1,179 1.28

114,538 Fidelity Funds - European High Yield Fund A MDist EUR 1,122 1.22

75,410 PIMCO Funds Capital Securities Fund 964 1.05

720,727 CVC Credit Partners European Opportunities 728 0.79

815,313 NB Global Floating Rate Income Fund 727 0.79

933,033 Blackstone/GSO Loan Financing 602 0.66

4,558 Leadenhall UCITS ILS B GBP 478 0.52

404,426 TwentyFour Income Fund 433 0.47

61,479 Neuberger Berman CLO Income USD I5 Dis Fund 425 0.46

2,509 Fidelity Funds - Institutional European High Yield Fund I Acc EUR 402 0.44

262,939 Starwood European Real Estate Finance 260 0.28

22,548 24.55

Investment Grade Bonds - (21.12%)

23,536,894 Fidelity MoneyBuilder Income Fund A Inc 8,888 9.68

2,225,969 Fidelity Institutional UK Aggregate Bond Fund Acc Gross 5,104 5.56

3,432,666 Fidelity Extra Income Fund Y Inc 4,459 4.86

10,011 Fidelity Enhanced Reserve Fund I Qnc USD 79 0.09

18,530 20.18

Global Equities - (13.85%)

5,970,986 Fidelity Global Dividend Fund W MDist 8,198 8.93

1,309,351 BlackRock Continental European Income Fund 1,938 2.11

1,068,113 Fidelity Funds - Global Financial Services Fund W Acc GBP 1,926 2.10

853,661 Invesco European Equity Income Fund 1,110 1.21

13,172 14.34

Emerging Debt - (8.76%)

690,536 Fidelity Funds - Emerging Market Local Currency Debt Fund A MDist EUR 4,724 5.14

316,008 Fidelity Funds - Emerging Market Debt Fund A MDist USD 2,810 3.06

198,797 Fidelity Funds - China RMB Bond Fund QDist USD 1,485 1.62

100 Finisterre Unconstrained Emerging Markets Fund 1 0.00

9,020 9.82

Global Bonds - (4.18%)

3,668,528 Fidelity Renaisance F Inc GBP 3,837 4.18

230,042 Fidelity Funds - US Dollar Bond Fund A MDist USD 2,161 2.35

82,306 Fidelity Funds - Asian Bond Fund Y Acc USD 967 1.05

6,965 7.58

UK Equities - (6.81%)

4,414,511 Fidelity Moneybuilder Dividend Y 4,371 4.76

736,259 JO Hambro UK Equity Income Fund 940 1.02

5,311 5.78

Portfolio Statement


51




513,919 Fidelity Global Quality Income UCITS ETF 2,444 2.66

28,975 Invesco Morningstar US Energy 1,006 1.10

440,219 HICL Infrastructure 757 0.82

346,127 Real Estate Credit Investments 578 0.63

13,784 DBX Trust II Harvest China UCITS ETF 223 0.24

780,863 Catco Reinsurance Opportunities Fund C 181 0.20

5,189 5.65

Infrastructure - (5.59%)

844,629 International Public Partnerships 1,338 1.46

821,441 Greencoat UK Wind 1,204 1.31

916,603 Sequoia Economic Infrastructure Income Fund 1,045 1.14

3,587 3.91

Property - (0.00%)

858 Fidelity UK Real Estate 3,081 3.35

3,081 3.35

Cash Funds/Money Market Funds - (1.01%)

177 Fidelity Institutional Liquidity Fund - Sterling C Acc 1,794 1.95

1,794 1.95


(27,851,600) Bought GBP sold USD @ 1.224220 for settlement 11/12/2019 1,285 1.40

(7,741,300) Bought GBP sold EUR @ 1.103558 for settlement 11/12/2019 346 0.38

(12,982,900) Bought GBP sold CNY @ 8.778100 for settlement 11/12/2019 61 0.07

(764,400) Bought GBP sold CHF @ 1.195790 for settlement 11/12/2019 41 0.04

(3,082,400) Bought GBP sold HKD @ 9.599846 for settlement 11/12/2019 18 0.02

(1,998,000) Bought GBP sold CNY @ 8.895572 for settlement 11/12/2019 6 0.01

(262,400) Bought GBP sold AUD @ 1.799007 for settlement 11/12/2019 6 0.01

(44,000) Bought GBP sold CHF @ 1.229982 for settlement 11/12/2019 1 0.00

(118,851,000) Bought GBP sold JPY @ 139.829050 for settlement 11/12/2019 1 0.00





158,000 Bought HKD sold GBP @ 0.102152 for settlement 11/12/2019 (1) 0.00

1,096,000 Bought EUR sold GBP @ 0.864855 for settlement 11/12/2019 (4) 0.00

1,760,000 Bought CNY sold GBP @ 0.112370 for settlement 11/12/2019 (6) (0.01)

624,934,200 Bought JPY sold GBP @ 0.007746 for settlement 11/12/2019 (378) (0.41)

1,376 1.50

Utilities - (0.19%)

235,453 Greencoat Renewables (GB) 245 0.27

96,000 US Solar Fund 73 0.08

318 0.35

Industrials - (0.48%)

372,509 Doric Nimrod Air Three 309 0.34

309 0.34

Portfolio Statement


52



Futures - (0.16%)

(400,000) EURO-BUND Commodity Future 06/12/2019 15 0.02

(60) FTSE 100 Index Future 20/12/2019 5 0.01

(22) FTSE 250 Y2 Index Future 20/12/2019 1 0.00

(300) E-Mini S&P 500 Index Future 20/12/2019 (7) (0.01)

900,000 Long Gilt Commodity Future 27/12/2019 (7) (0.01)


(900) E-Mini S&P Technology Select Sector Index Future 20/12/2019 (17) (0.02)

(25) (0.03)

Portfolio of investments 91,175 99.27

Cash and other net assets/(liabilities) 663 0.73

Net assets 91,838 100.00



53

Further Information

Fidelity Investment Funds III Registered Office

Oakhill House 130 Tonbridge Road Hildenborough Tonbridge Kent TN11 9DZ United Kingdom www.fidelity.co.uk Authorised and regulated in the UK by the Financial Conduct Authority.

Authorised Corporate Director (ACD), AIFM, General Distributor, Administrator and Registrar

FIL Investment Services (UK) Limited Oakhill House 130 Tonbridge Road Hildenborough Tonbridge Kent TN11 9DZ United Kingdom Authorised and regulated in the UK by the Financial Conduct Authority. Registered in England and Wales No 2016555.

Depositary

J.P. Morgan Europe Limited Registered Office: 25 Bank Street London E14 5JP United Kingdom

Head Office: Chaseside Bournemouth Dorset BH7 7DA United Kingdom Authorised and regulated in the UK by the Financial Conduct Authority.

Independent Auditors

PricewaterhouseCoopers LLP 7 More London Riverside London SE1 2RT United Kingdom


54

Further Information

• All Fidelity employees are subject to a Code of Ethics which, among other things, sets out procedures for personal account dealings in securities. These procedures, which are rigorously monitored, are designed to ensure that there is no conflict between personal account dealing by Fidelity staff and the interests of Fidelity’s customers.

The two basics of the Code of Ethics require that deals have to be pre-authorised before an individual may undertake them, and they must afterwards be reported to the Compliance Department. Individuals are required to use specified brokers which enables this process to be checked on a continual basis.

In addition, there are specific provisions to ensure that any investment idea is first acted upon by the funds Fidelity manages, and that fund managers may not deal within a defined period either side of a fund (for which they are responsible) dealing in that stock.

• The Report and Financial Statements of the Company and the Instrument of Incorporation may be inspected free of charge between 9.00 a.m. and 5.00 p.m. on every business day at the offices of the Authorised Corporate Director (ACD) at Oakhill House, 130 Tonbridge Road, Hildenborough, Tonbridge, Kent TN11 9DZ, United Kingdom.

Shareholders may obtain copies of the above documents free of charge from the same address or alternatively from our website www.fidelity.co.uk. It is possible to receive information about the full holdings of the funds in which you invest. This is available on request, and may, at our discretion, be subject to you entering into an agreement with us to keep the information confidential. If you wish to receive full holdings information in accordance with the policy, please put your request in writing to: Data Policy Fund Holdings, Oakhill House, 130 Tonbridge Road, Hildenborough, Tonbridge, Kent TN11 9DZ quoting your name, address and account number or client reference number.

• The Authorised Fund Manager (AFM) is required to conduct a detailed assessment of whether its funds provide value to investors and publish an annual statement summarising the outcome of the review. The AFM will publish the outcome of the review in a separate document available during the third quarter of 2020.

FIL Limited and its respective subsidiaries form the global investment management organisation that is commonly referred to as Fidelity International. Fidelity International only gives information on products and services and, with the exception of retirement advice, does not provide investment advice based on individual circumstances.

Any service, security, investment, fund or product outlined may not be available to or suitable for you and may not be available in your jurisdiction. It is your responsibility to ensure that any service, security, investment, fund or product outlined is available in your jurisdiction before any approach is made regarding that service, security, investment, fund or product. This document may not be reproduced or circulated without prior permission and must not be passed to private investors.

Past performance is not a reliable indicator of future results. The value of investments may go down as well as up and an investor may not get back the original amount invested. Unless otherwise stated all products are provided by Fidelity International, and all views expressed are those of Fidelity International.

In certain countries, and for certain types of investments, transaction costs are higher, and liquidity is lower than elsewhere. There may also be limited opportunities to find alternative ways of managing cash flows especially where the focus of investment is on small and medium sized firms. For funds specialising in such countries and investment types, transactions, particularly those large in size, are likely to have a greater impact on the costs of running a fund than similar transactions in larger funds. Prospective investors should bear this in mind in selecting funds.

Issued by FIL Investment Services (UK) Limited (FCA registered number 121939) a firm authorised and regulated by the Financial Conduct Authority.

FIL Investment Services (UK) Limited is a member of the Fidelity International group of companies and is registered in England and Wales under the company number 2016555. The registered office of the company is Oakhill House, 130 Tonbridge Road, Hildenborough, Tonbridge, Kent TN11 9DZ, United Kingdom. FIL Investment Management Limited VAT group identification number is 395 3090 35.

Fidelity, Fidelity International the Fidelity International logo and symbol are trademarks of FIL Limited

Annual Report and Financial Statements…alternative investment fund (AIF) under the AIFM Directive....

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Transcript of Annual Report and Financial Statements…alternative investment fund (AIF) under the AIFM Directive....