FIDELITY GLOBAL MONTHLY INCOME FUND...2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 ... In...

© 2020 FIDELITY INVESTMENTS CANADA ULC FOR ADVISOR USE ONLY 228339-v2020429

March 31, 2020

FIDELITY GLOBAL

MONTHLY INCOME FUND

QUARTERLY FUND REVIEW


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Fund overview

Investment objective

The Fund aims to achieve a combination of a steady flow of income and the potential for capital gains. It invests primarily in a mix of equity securities and fixed income securities located anywhere in the world.

Fund inception date April 18, 2007

Fund benchmark1 Blended index

1The blended benchmark is 40% MSCI AC World Index (Net), 31% Bloomberg Barclays Global Aggregate Bond Index, 12% ICE BofA Global High Yield Constrained Index, 7% FTSE EPRA/NAREIT Developed (N) Index, 5% JPM EMBI Global Diversified Index and 5% ICE BofA All U.S. Convertible Index. Before October 1, 2013, the blended benchmark was 40% MSCI AC World Index, 31% Bloomberg Barclays Global Aggregate Bond Index, 12% ICE BofAML U.S. High Yield Constrained Index, 7% FTSE EPRA/NAREIT Developed (N) Index, 5% JPM EMBI Global Diversified Index and 5% ICE BofAML All U.S. Convertible Index. Before March 1, 2013, the blended benchmark was 40% MSCI World High Dividend Yield Index, 10% FTSE EPRA/NAREIT Developed (N) Index, 35% Bloomberg Barclays Global Aggregate Bond Index – Hedged CAD and 15% ICE BofAML High Yield Constrained Index – Hedged CAD.

Source: Fidelity Investments Canada ULC.


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Fund performance (Series B)Annualized returns as at March 31, 2020

Calendar year returns

† Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Benchmark is 40% MSCI AC World Index (Net), 31% Bloomberg Barclays Global Aggregate Bond Index, 12% ICE BofA Global High Yield Constrained Index, 7% FTSE EPRA/NAREIT Developed (N) Index, 5% JPM EMBI Global Diversified Index and 5% ICE BofA All U.S. Convertible Index. Please read the prospectus, which contains detailed investment information, before investing. The indicated rates of return are historical annual compounded total returns for the period indicated including changes in unit value and reinvestment distributions. The indicated rates of return do not take into account sales, redemption, distribution or option charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer and are not guaranteed or insured. Their values change frequently. Past performance may not be repeated. Source: Fidelity Investments Canada.

YTD 3 MO 1 YR 2 YR 3 YR 4 YR 5 YR 7 YR 10 YRSINCE

INCEPTION

Fund Net† -7.47 -7.47 -1.94 1.60 2.23 3.51 3.18 6.93 6.99 3.87

Fund Gross† -6.95 -6.95 0.29 3.89 4.53 5.85 5.51 9.37 9.45 6.25

Benchmark -6.34 -6.34 -0.95 2.86 4.02 5.76 5.00 8.59 8.77 5.81

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

Fund Net† 11.89 0.26 5.49 0.66 17.06 12.31 14.45 9.66 2.29 5.53

Fund Gross† 14.40 2.52 7.86 2.94 19.75 14.90 17.12 12.21 4.67 7.93

Benchmark 11.95 3.30 7.44 3.65 16.55 13.34 16.63 11.49 5.56 6.13


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FUND MANAGERS

Geoff Stein, CFA David Wolf

EDUCATIONMBA – Stanford

BA – Yale UniversityBA – Princeton University

SUB-PORTFOLIO MANAGERS

Ramona Persaud Global equities

Steven Buller, CFA Global real estate

Michael Foggin Global bonds

Andrew Lewis, CFA Global bonds

Jeffrey Moore, CFA Global bonds

Michael Weaver Global high yield bonds

Alexandre Karam Global high yield bonds

Adam Kramer, CA U.S. convertible bonds

Jonathan Kelly Emerging markets debt

Timothy Gill, CFA Emerging markets debt

Management



5

Key market developments

▪ Global equities posted negative returns over the first quarter

as the COVID-19 outbreak in China and its spread to other

countries weighed on global economic prospects.

▪ Authorities across the world announced large-scale

quarantines, shutdowns and travel restrictions to curtail

spread of the virus and unveiled policy stimulus measures to

mitigate its economic impact.

▪ Against this global backdrop, all key markets ended lower in

Canadian dollar terms, with Australia, Spain and Italy among

the worst performers. Emerging markets also declined and

underperformed developed markets.

▪ Market losses were spread across sectors. Energy

companies came under particularly significant pressure as

crude oil prices fell in view of weakening global demand and

an oil price war between Saudi Arabia and Russia.



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Quarterly fund performance


▪ From an asset allocation perspective, holdings and lower-than-benchmark positioning in global bonds detracted from

relative performance, while investments in global equities contributed.

Equities and REITs

▪ In global equities, holdings in the consumer discretionary sector detracted from relative performance.

▪ In that sector, lack of exposure to a U.S.-based e-commerce company detracted, as did investments in Compass

Group and Elior Group.

▪ In other sectors, holdings in financial services company Wells Fargo and oil and gas exploration and production

company ConocoPhillips were notable detractors.

▪ Investments in, and overweight exposure to, the consumer staples sector contributed to relative returns.

▪ In that sector, an investment in Nestlé was the primary contributor.

▪ Elsewhere, holdings in software and services company Microsoft, pharmaceutical company Roche Holding and real

estate investment trust (REIT) American Tower boosted relative returns.

▪ Global REITs contributed to relative performance through underweight exposure to retail REITs.

Fixed income

▪ Certain investments in global bonds, primarily global investment-grade bonds, detracted from relative performance, as

did underweight exposure to the overall asset class.

Key drivers

Fidelity Global Monthly Income Fund (Series B) returned −7.5%, net of fees,

underperforming its blended benchmark, which returned −6.3% (all returns in

Canadian dollar terms).


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▪ From an asset allocation perspective, investments in global equities contributed to relative performance, while

holdings and lower-than-benchmark positioning in global bonds detracted.

Equities and REITs

▪ In global equities, holdings in the health care sector contributed to relative performance.

▪ In that sector, investments in Hoya and Roche Holding were notable contributors.

▪ Elsewhere, certain technology stocks, such as Microsoft and Apple, also contributed.

▪ Exposure to certain stocks in the consumer discretionary sector detracted from relative performance.

▪ In that sector, lack of exposure to a U.S.-based e-commerce company detracted, as did investments in Elior

Group and Compass Group.

▪ Other notable detractors included holdings in oil and gas exploration and production company ConocoPhillips and

financial services company Wells Fargo.

▪ Global REITs contributed to relative performance through underweight exposure to retail REITs.

Fixed income

▪ Certain investments in global high-yield bonds contributed, while investments and lower-than-benchmark positioning in

global investment-grade bonds detracted.

One-year fund performance


Key drivers

Fidelity Global Monthly Income Fund (Series B) returned −1.9%, net of fees,

underperforming its blended benchmark, which returned −1.0%. Gross of fees,

however, the Fund outperformed its benchmark.


8

Positioning and outlook


▪ Asset allocation portfolio managers Geoff Stein and David Wolf believe that the unprecedented demand shock from the

COVID-19 pandemic, paired equally with unprecedented fiscal and monetary actions, increases the range of potential

outcomes of the current downturn. They believe that earnings estimates have not fully adjusted to the magnitude of the

economic shock and that corporate fundamentals will be challenged, but not universally poor.

▪ The managers continue to be prudent and to keep the Fund diversified; they have generally kept the Fund’s asset allocation

tilts small. They continue to position the Fund for a wide range of outcomes rather than any particular outcome.

▪ Against this backdrop, the managers maintained tactical allocations in the Fund, including exposure to U.S. Treasury

inflation-protected securities as insurance against higher inflation expectations, and to high-yield commercial mortgage-

backed securities and floating-rate debt securities to manage duration risk. During the quarter, the portfolio managers also

initiated a tactical position in a gold exchange-traded fund.

Asset allocation

▪ Equity portfolio manager Ramona Persaud believes periods of heightened volatility result in indiscriminate selling, which in

turn creates some great investment opportunities. She aims to capitalize on periods of fear to upgrade the quality of the

portfolio. She has been buying what she believes to be high-quality companies that are trading at attractive valuations as a

result of negative sentiment, and selling companies where valuations appear extended.

▪ Ramona remains committed to maintaining a portfolio that has a more attractive risk profile than the broader market by

focusing on a combination of value, quality and capital allocation

Global equities

▪ Global bond portfolio managers Michael Foggin, Andrew Lewis and Jeff Moore note that corporate bonds offer the best

potential for active returns over time but recognize that select exposure to Treasuries and bonds issued by government

agencies is warranted to manage the overall portfolio’s exposure to interest rates and economic growth factors. The

managers are focused on maintaining a well-diversified and liquid portfolio that can adapt to changing market environments.

Global fixed income


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Fidelity Global Monthly Income FundCountry allocation, as at March 31, 2020


Fund (%)

United States 50.2

Japan 7.7

United Kingdom 6.1

Germany 3.8

Switzerland 3.2

Canada 2.7

France 2.5

China 1.5

Netherlands 1.5

Hong Kong 1.3

Ireland 1.3

Other Countries 18.2

Total 100.0


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Fidelity Global Monthly Income FundTop ten holdings, as at March 31, 2020


SECURITY INDUSTRY

Microsoft Software

Apple Technology Hardware, Storage & Peripherals

iShares MSCI ACWI Index ETF Multi Sector

iShares Comex Gold Trust ETF Metals & Mining

AstraZeneca Pharmaceuticals

Nestlé Food Products

Roche Holding Pharmaceuticals

American Tower Equity Real Estate Investment Trusts

Taiwan Semiconductor Semiconductors & Semiconductor Equipment

Amgen Biotechnology

% of Top 10 Holdings 9.8

Total Holdings 3105


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Fidelity Global Monthly Income FundGlobal dividend equity portfolio characteristics, as at March 31, 2020

FUND BENCHMARK*

P/E (1 year historical) 16.9 15.8

P/E (1 year forecast) 14.9 14.2

Price/Book 2.6 2.0

ROE (5 year average) 14.0 12.0

Earnings Growth Rate (5 year average) 11.4 11.0

Earnings Growth Rate (1 year forecast) 5.1 3.6

Dividend Yield 2.6 2.9

Weighted Average Market Cap (B) $260.6 $257.3

Source: Fidelity Investments Canada ULC. *Benchmark - MSCI AC World Index (Net)


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Fidelity Global Monthly Income FundHistorical risk measures1, 3-years ending March 31, 2020

Benchmark is 40% MSCI AC World Index (Net), 31% Bloomberg Barclays Global Aggregate Bond Index, 12% ICE BofA Global High Yield Constrained Index, 7% FTSE EPRA/NAREIT Developed (N) Index, 5% JPM EMBI Global Diversified Index and 5% ICE BofA All U.S. Convertible Index.Source: Fidelity Investments Canada ULC.1 Based on gross fund returns* Hurdle rate is zero or excess return, whichever is lower

FUND BENCHMARK

Annualized Standard Deviation 7.17% 6.91%

Sharpe Ratio 0.44 0.38

Downside Volatility* 0.78% -

Annualized Tracking Error 1.17 -

Annualized Information Ratio 0.44 -

Beta 1.02 -


APPENDIX


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Investment process

▪ The lead managers manage the Fund to achieve a neutral mix of 50% equity securities and

50% fixed-income securities

▪ The Fund’s exposure to equity and fixed-income securities may vary by up to +/- 20% from

the neutral mix

▪ The lead managers analyze the short- and long-term performance of equity and fixed-income

markets, with particular focus on deviations from historical averages

▪ These analyses are used to help gauge the relative attractiveness of asset classes and

identify opportunities to diversify to other regions and/or asset classes

▪ Particular emphasis is given to watching for inflection points where there is a high likelihood

of mean reversion

▪ The lead managers draw on the expertise of the Fidelity Global Asset Allocation group

▪ The sub-portfolio managers frequently communicate with the lead managers to share market

perspectives and to ensure a timely flow of information that may inform investment decisions

▪ The lead managers of the Fund determine the optimal magnitude and timing of any shifts in

asset allocation

▪ It is also the responsibility of the lead managers to work with the sub-portfolio managers and

traders to implement asset allocation changes and to manage day-to-day cash flows and

Fund operations

Geoff Stein & David Wolf – Asset allocation portfolio managers


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Investment process

▪ The portfolio aims to achieve capital appreciation by investing in equity securities of companies anywhere in the world that pay, or may be expected to pay, dividends

▪ The manager believes that a combination of value and income is a durable alpha generator, as it is generally under-owned, opaque and unrecognized

▪ The manager’s investment philosophy is based on three key principles:

▪ Value wins over time.

▪ Income is risk-aware value, which wins over time on a risk-adjusted basis.

▪ Income investing is a “get rich slow” strategy, as a large portion of total return is from income compounding

▪ The manager follows a bottom-up, fundamental investment approach, giving special attention to companies with consistent cash flows and dividends, high return on invested capital and strong balance sheets

▪ Selected investments should exhibit a balanced reward-to-risk ratio by assessing the securities’ upside potential and downside risk

▪ Ideas are generated through multiple sources, including input from Fidelity’s team of global research analysts, site visits, company meetings, industry conferences and third-party research

▪ The portfolio also employs a quantitative/statistical screening framework to generate ideas based on valuation, balance sheet attributes, cash flow, income and other quantitative factors

Ramona Persaud – Global equities


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Investment process

Steven Buller – Global real estate equities

1. The manager considers real estate securities markets to be inefficient due to short-term

technical dislocations that can offer attractive long-term investment opportunities.

2. REITs are a balance of real estate and stocks; recognizing the attributes of both is key to

maximizing performance.

3. A thorough and in-depth research process is followed, which involves frequent company

contact, on-site property visits (with and without management), detailed company financial

models and a suite of different valuation measures.

4. The manager does not have any particular investment style bias and may move from value to

growth-type characteristics depending on the market environment and the availability of

investment ideas.

5. Members of Fidelity’s global real estate securities research team are based in five countries

and focus narrowly on a respective sector and/or geography.


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Investment process

▪ The portfolio invests primarily in global government and corporate bonds offering the potential for income and capital appreciation.

▪ The manager’s investment philosophy is based on three key principles:

▪ Investment-grade fixed-income portfolios should be focused on capital preservation.

▪ Market segmentation can create anomalies between different segments of the bond market that can be researched and exploited.

▪ Investments are based on long-term strategic objectives, rather than depending on fluctuating short-term objectives that increase portfolio volatility.

▪ The manager follows a five-step investment process:

▪ Strategic views: Determine which countries in the global fixed income universe are appropriate jurisdictions for investing in credit, interest rate and currency exposure.

▪ Business cycle: Determine the progress of each country or region within its business cycle.

▪ Sector decisions: These are key to managing risks; employ valuation and positioning analysis tools to help finesse the portfolio’s sector section and beta rotation.

▪ Security selection: Fidelity’s research capabilities give a competitive advantage in evaluating issuers and choosing securities in the global investment universe.

▪ Portfolio construction: The portfolio construction process should effectively manage volatility risk in order to avoid forced selling in weak markets so that the manager can approach the market from a position of strength.

Michael Foggin, Andrew Lewis & Jeffrey Moore – Global bonds


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Investment process

Michael Weaver & Alexandre Karam – Global high-yield bonds

▪ The portfolio invests primarily in high-yield corporate bonds and focuses on areas of the market where Fidelity’s resources have the greatest competitive advantage and can add the most value.

▪ The managers emphasize sector valuation and individual security selection in constructing portfolios, and focuses on the less efficient, middle-tier section of the high-yield market, while selectively investing in lower-rated issuers.

▪ The portfolio is designed to be well-diversified across sectors, structure and issuers.

▪ Gauging default risk is critical to the investment process, given the asymmetric nature of high-yield investing.

▪ The managers employ a strict focus on controlling overall absolute and relative portfolio volatility, and on understanding all portfolio risk positions in order to minimize volatility.


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Investment process

▪ The portfolio aims to provide a high total investment return, a steady flow of income and the potential for capital gains.

▪ The portfolio invests primarily in convertible securities of U.S. issuers, including bonds, preferred stocks and other securities that pay interest or dividends and are convertible into common stock or its equivalent value.

▪ When buying and selling securities for the portfolio, the manager examines each company’s potential for success in light of its current financial condition, its industry position and economic and market conditions.

▪ Convertible securities are often lower-quality fixed-income securities.

▪ The majority of convertible issuance comes from small-cap companies, which tend to outperform large caps over the long term.

Adam Kramer – U.S. convertible securities


20

Investment process

Jonathan Kelly & Timothy Gill – Emerging markets debt

▪ The managers invest in fixed-income securities including government and corporate bonds in emerging markets countries.

▪ The portfolio holds a diversified exposure to debt issues of different industries and different maturities based on the manager’s view of relative value opportunities.

▪ When buying and selling emerging markets debt securities, the portfolio managers generally analyze the security’s structural features, its current price compared to its estimated long-term value and any short-term trading opportunities resulting from market inefficiencies.

▪ The portfolio managers may also consider the credit, currency and economic risks associated with the fixed-income security and the country of the issuer.


Important notice

For advisor use only. No recipient is authorized to pass this communication on to any other person whatsoever or reproduce it

by any means without the prior written consent of Fidelity.

Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated with investments in

mutual funds and ETFs. Please read the mutual fund or ETF’s prospectus, which contains detailed investment information,

before investing. The indicated rates of return are historical annual compounded total returns for the period indicated including

changes in unit value and reinvestment of distributions. The indicated rates of return do not take into account sales, redemption,

distribution or option charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds and

ETFs are not guaranteed. Their values change frequently, and investors may experience a gain or a loss. Past performance may

not be repeated.

Effective November 6, 2006 Fidelity introduced a 5% T-SWP and created Series T5 (“DSC,“ “LL,” “LL2”) and S5 (“ISC”). The

Series name for T-SWP 8% changed to T8 (“DSC,” “LL,” “LL2”) and S8 (“ISC”).

The table shown is used to illustrate the effects of the compound growth rate and is not intended to reflect future values of the

fund or returns on investment in any fund.

Any reference to a company is for illustrative purposes only; it is not a recommendation to buy or sell nor is it necessarily an

indication of how the portfolio of any Fidelity Fund is invested. The breakdown of fund investments is presented to illustrate the

way in which a fund may invest, and may not be representative of a fund’s current or future investments.

© 2020 Fidelity Investments Canada. All rights reserved. Fidelity Investments is a registered trademark of Fidelity Investments

Canada.

The presenter is not registered with any securities commission and therefore cannot provide advice regarding securities.


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FIDELITY GLOBAL MONTHLY INCOME FUND...2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 ... In...

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