Transcript No Slide Title

Global Asset
Allocation
November 2007
Jurrien Timmer
Director of Market Research
Fidelity Investments
The information presented reflects the opinions of Jurrien Timmer, Director of Market Research, for Fidelity Management & Research Company as
of November 14, 2007. These opinions do not necessarily represent the views of Fidelity or any other person in the Fidelity organization and are
subject to change at any time based upon market or other conditions. Fidelity disclaims any responsibility to update such views. These views
may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be
relied on as an indication of trading intent on behalf of any Fidelity fund.
As with all of your investments through Fidelity, you must make your own determination whether an investment in any particular security or
fund is consistent with your investment objectives, risk tolerance, financial situation, and your evaluation of the investment option. Fidelity is
not recommending or endorsing any particular investment option by mentioning it in this presentation or by making it available to its
customers. This information is provided for educational purposes only, and you should bear in mind that laws of a particular state and your
particular situation may affect this information.
FOR INVESTMENT PROFESSIONALS
ASSET ALLOCATION
TACTICAL
STRATEGIC
CORE
FUNDAMENTAL
GLOBALIZATION
STOCKS
Earnings & Valuation
Interest Rates & Inflation
U.S.
INT’L
Emerging Markets
EM
Commodities
Economic Cycle
LIQUIDITY
BONDS
TECHNICAL
Inv Grade
High Yield
TIPS
M&A
LBOs
Buybacks
Trend/Cycles
Sentiment
CLIMATE CHANGE
Breadth/Momentum
Alt Energy
CASH & ALTs
Commodities
QUANT
Back-testing
Abs Return
REITs
SCARCITY
Cash
Energy
Water
Agflation
Page 2
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Europe
($)
Japan
($)
Japan
($)
Emg
Mkts
Emg
Mkts
Commodities
Emg
Mkts
Small
Value
Emg
Mkts
Japan
($)
Large
Value
Real
Estate
Large
Value
Large
Growth
Emg
Mkts
Commodities
Real
Estate
Commodities
Emg
Mkts
Real
Estate
Emg
Mkts
Europe
($)
Emg
Mkts
+79.8
+100.3
+43.0
+40.4
+65.0
+29.1
+59.9
+29.1
+74.8
+21.8
+38.3
+35.7
+35.2
EAFE
EAFE
Japan
($)
Commodities
Bonds
Small
Growth
Small
Caps
+77.2
+69.4
+24.6
+35.2
+38.3
+8.9
+51.2
+18.4
+32.6
+7.8
+37.4
+33.9
+33.4
EAFE
Europe
($)
Gold
Small
Value
Large
Growth
Cash
High
Yield
High
Yield
Europe
($)
Commodities
Large
Growth
Large
Growth
Small
Value
+56.2
+44.5
+23.8
+29.5
+35.9
+7.8
+46.2
+15.8
+29.8
+5.3
+37.2
+23.1
+31.8
Japan
($)
Emg
Mkts
Commodities
S&P 500
Large
Growth
Small
Caps
Large
Value
Japan
($)
Cash
Small
Growth
S&P 500
Large
Growth
+43.5
+28.6
+23.8
+28.3
+31.5
-0.3
+46.1
+13.8
+25.7
+3.9
+31.0
+23.1
Large
Growth
Large
Value
Emg
Mkts
Commodities
Europe
($)
Gold
Small
Value
Real
Estate
Small
Value
Europe
($)
Small
Caps
Large
Value
+32.9
+20.0
+14.8
+27.9
+29.1
-1.9
+41.7
+12.2
+23.8
+2.7
+28.4
+21.6
+24.2
Cash
Small
Caps
Large
Value
Convert
Large
Growth
Convert
Small
Caps
Large
Growth
Small
Value
Europe
($)
Small
Caps
-2.5
+41.2
+12.0
+18.9
+2.7
+25.8
+21.6
+22.4
S&P 500
Real
Estate
Emg
Mkts
Real
Estate
S&P 500
Convert
Small
Value
Real
Estate
Emg
Mkts
EAFE
EAFE
EAFE
+38.7
+66.4
+49.7
+15.5
+32.1
+56.3
+31.6
+34.5
+34.4
+34.8
Europe
($)
Japan
($)
Real
Estate
Small
Value
Gold
Small
Growth
Emg
Mkts
Commodities
Emg
Mkts
Europe
($)
+28.9
+63.1
+25.9
+14.0
+26.1
+48.5
+26.0
+21.4
+32.6
+14.9
S&P 500
Small
Growth
Small
Value
Bonds
Bonds
Small
Caps
Small
Value
Japan
($)
Real
Estate
EAFE
+28.6
+43.1
+22.8
+8.4
+10.3
+47.3
+22.2
+25.6
+31.4
+13.6
EAFE
Commodities
Bonds
High
Yield
Real
Estate
Small
Value
Small
Caps
Gold
EAFE
Large
Growth
+30.5
+20.0
+40.9
+11.6
+5.3
+5.2
+46.0
+18.3
+17.8
+26.9
+12.7
Europe
($)
Large
Value
Convert
Large
Value
Cash
Cash
High
Yield
Europe
($)
EAFE
Gold
Gold
+15.6
+36.4
+7.0
+3.8
+1.6
+35.6
+21.4
+14.0
+23.9
+12.0
Convert
Large
Growth
Cash
Small
Caps
High
Yield
EAFE
Europe
($)
Small
Value
Commodities
+11.7
+33.2
+5.9
+2.5
-1.4
+35.3
+20.2
+9.9
+23.5
+12.0
EAFE
Small
Caps
Gold
Emg
Mkts
Europe
($)
Commodities
Real
Estate
Large
Value
Small
Growth
-3.0
+0.7
-6.0
+34.8
+9.1
+12.2
+22.2
+9.3
Gold
Emg
Mkts
Convert
Japan
($)
Large
Value
Large
Value
Small
Caps
S&P 500
CommoS&P 500
S&P 500
dities
S&P 500
Gold
+32.2
+19.6
+5.5
+24.9
+25.2
Large
Value
Real
Estate
Large
Growth
Large
Value
Small
Growth
+31.5
+19.2
+5.3
+23.2
+20.2
-3.2
+35.7
+11.4
+18.5
+1.3
+23.0
+21.4
+18.9
+8.7
+27.0
Small
Growth
Small
Caps
Europe
($)
S&P 500
Small
Growth
Large
Value
Real
Estate
Europe
($)
Small
Caps
Convert
Japan
($)
Small
Caps
+20.4
+16.2
-3.4
+30.5
+7.8
+18.1
+0.8
+22.1
+16.5
+14.4
+5.1
+21.3
-5.4
-2.4
-6.2
+34.6
+16.5
+7.1
+18.4
+9.1
S&P 500
Bonds
Large
Value
Convert
S&P 500
Gold
High
Yield
Commodities
Convert
Small
Growth
Cash
S&P 500
High
Yield
Large
Value
Japan
($)
Real
Estate
Japan
($)
Large
Growth
S&P 500
Convert
+7.7
+17.7
-1.0
+20.3
+11.6
+12.9
+4.9
+21.0
-5.9
-5.6
-9.8
+32.5
+16.2
+5.3
+15.8
Bonds
High
Yield
Small
Value
High
Yield
High
Yield
High
Yield
High
Yield
Europe
($)
Convert
Small
Value
Large
Value
Small
Growth
Small
Caps
+31.1
S&P 500 S&P 500
Bonds
EAFE
+18.5
+5.2
Small
Value
Convert
High
Yield
+31.0
+17.7
+5.0
+16.8
+14.5
-8.1
+26.9
Small
Growth
High
Yield
Europe
($)
Europe
($)
Convert
High
Yield
Large
Value
+31.0
+17.4
+4.1
+16.4
+13.8
-9.6
+24.6
+7.4
+17.1
-1.5
+19.2
+11.3
+12.8
+1.9
+16.2
-6.2
-5.9
-11.4
+30.0
+14.3
+4.9
+14.5
+6.0
High
Yield
Large
Growth
Bonds
Convert
Small
Value
Emg
Mkts
Bonds
Large
Growth
Convert
Small
Caps
Bonds
Small
Growth
Bonds
Small
Growth
Large
Value
Europe
($)
Small
Growth
Large
Value
Large
Growth
High
Yield
Small
Value
Small
Growth
Bonds
+28.7
+15.4
+2.7
+14.2
+12.4
-10.6
+16.0
+5.0
+14.8
-1.8
+18.5
+11.3
+9.7
+1.2
+7.3
-8.1
-9.2
-15.5
+29.7
+11.1
Convert
Bonds
Large
Value
High
Yield
EAFE
Real
Estate
Europe
($)
Commodities
Small
Growth
Large
Value
Real
Estate
Emg
Mkts
Cash
+27.3
+15.3
+0.5
+12.5
+10.5
-17.3
+13.7
+4.4
+13.4
-2.0
+18.3
+6.0
Bonds
Small
Value
Convert
Real
Estate
Cash
Small
Growth
EAFE
+22.1
+7.4
-2.4
+11.4
+8.4
-17.4
Cash
Small
Value
Large
Growth
Japan
($)
Small
Caps
Commodities
Convert
S&P 500 S&P 500
EAFE
+13.3
+3.9
Convert
Cash
+10.9
+4.6
+13.3
+3.8
High
Yield
Small
Caps
+5.3
-0.5
+4.7
-9.1
-11.9
-15.9
Small
Caps
High
Yield
EAFE
Europe
($)
Europe
($)
Convert
Convert
Small
Growth
S&P 500 S&P 500
+27.9
+7.5
+4.2
+11.9
+3.2
Gold
Cash
Large
Growth
High
Yield
+28.7
Gold
EAFE
EAFE
EAFE
+12.1
+3.5
+10.0
-2.2
+11.2
+6.0
+1.8
-2.5
+2.4
-14.2
-19.6
-18.1
Japan
($)
Europe
($)
Emg
Mkts
Small
Value
Gold
Large
Growth
Large
Growth
Small
Caps
Gold
+9.1
-4.2
-20.4
-20.5
+22.1
Convert
Cash
Cash
+9.8
-2.2
+5.6
+5.2
-11.6
-6.5
+0.9
-22.4
Small
Growth
Gold
Bonds
Commodities
Real
Estate
Bonds
Small
Growth
-2.4
+1.0
+3.6
-14.1
-18.8
-0.8
-22.4
-21.4
-22.1
Bonds
Japan
($)
Gold
Emg
Mkts
Small
Value
Japan
($)
Japan
($)
Large
Growth
Bonds
Bonds
+4.1
+4.3
+10.0
+6.2
-7.1
+11.3
+1.8
-19.5
Cash
Small
Caps
Small
Caps
Bonds
High
Yield
Small
Value
Cash
Gold
Large
Growth
+7.7
+5.7
-8.8
+7.9
+0.8
-21.8
+5.6
-5.1
+2.9
Real
Estate
Small
Growth
Small
Growth
Cash
Real
Estate
EAFE
Commodities
+5.9
+3.6
-10.5
+6.3
-1.8
-23.4
-6.1
-12.2
+2.9
-2.9
+0.4
-4.6
-21.7
-25.3
-1.5
-28.3
-29.5
-27.9
Gold
Commodities
Real
Estate
Gold
Japan
($)
Gold
Japan
($)
Commodities
Emg
Mkts
Emg
Mkts
Japan
($)
Japan
($)
Commodities
Real
Estate
Emg
Mkts
Commodities
Small
Growth
Gold
+4.7
Small
Caps
Cash
S&P 500
EAFE
Cash
Gold
+8.5
Large
Value
Gold
Cash
Bonds
CommoS&P 500
dities
EAFE
CommoS&P 500
dities
+20.7
Cash
+4.6
+3.0
+9.1
+3.2
Large
Growth
High
Yield
Japan
($)
Japan
($)
+6.3
+2.7
+6.3
+2.1
Bonds
Cash
Small
Value
+2.4
+4.8
-2.7
Bonds
Real
Estate
Cash
Convert
+5.8
+2.0
-10.7
-15.3
-2.8
-36.0
-10.3
-21.4
-12.3
-7.3
-5.2
-15.0
-24.0
-35.7
-6.5
-30.6
-31.9
-30.3
+1.0
+1.2
+2.0
+4.3
-6.6
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Index definitions listed on slide 23
Page 3
44
The Efficient Frontier
40
Compound Annual Return vs. Standard Deviation of Monthly Return.
PORT: 50/30/20 model portfolio (stocks/bonds/alternatives).
5 Year Horizon (As of Sep 2007)
EM
36
32
28
Annualized Returns
EUR
24
EAFE
20
EQTY
LV
ALT
PORT
16
HY
12
comm
SV
SPX
RUT
REITs
SG
Gold
Japan
LG
CNV
BAL
8
M/N
4
cash
FI
Agg
infl
PORT consists of 20 pct U.S. large cap, 15 pct U.S. small cap, 10 pct
developed international, 5 pct emerging markets, 20 pct U.S.
investment grade bonds, 10 pct U.S. high yield, 5 pct commodities, 5
pct REITs, and 10 pct in HF strategies.
0
-4
0
1
2
3
4
5
Volatility of Returns
Page 4
The Efficient Frontier
35
Compound Annual Return vs. Standard Deviation of Monthly Return.
30
A noticeable shift in
the efficient frontier.
Average 12 Month Return
25
20
5 YEARS
15
10 YEARS
10
5
0
-5
0
1
2
3
4
5
6
7
8
Standard Deviation of Monthly Returns
Page 5
Correlation of Returns (to the S&P 500)
100%
100%
S&P 500
97%
99%
50/40/10
EQTY
92%
Large Value
91%
PORT 50/30/20
91%
98%
98%
98%
96%
98%
Large Growth
67%
Europe
96%
53%
EAFE
95%
55%
Hedge Funds
93%
Small Growth
79%
Small Caps
79%
91%
91%
65%
Small Value
90%
27%
Emerging mkts
87%
45%
Hedge FoFs
83%
80%
80%
converts
49%
REITs
75%
48%
ALT
63%
31%
Japan
70%
61%
66%
High Yield
27%
Eqty Mkt neutral
43%
EMBI
12%
12%
Cash
-8%
Gold
FI
22%
-6%
-24%
Inflation
Commodities
-80%
37%
-2%
Cnv Arb
Inv Grade Bonds
0%
-6%
12mo Corelation of Annual Returns, 20yr average
-5%
-37%
12mo Corelation of Annual Returns, Sep 2007
22%
-53%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
Page 6
Investment Climate
STRATEGIC/SECULAR
• Globalization. A secular boom in emerging markets and commodities.
• Peak Oil. Will incremental flows be sufficient to keep up with incremental demand?
• Water Scarcity. The coming boom in water utilities and infrastructure.
• Global Infrastructure. Everything needs to be either built or upgraded.
• Climate Change. The green movement is here to stay.
• Inflation. On the rise. Global growth becomes inflationary.
• Liquidity Wave. Down but not out?
TACTICAL/CYCLICAL
• U.S. Market Cycle. Is a new four year cycle beginning?
• The Problem with Housing. Will the housing downturn lead to a recession?
• Financial Crisis. When will it end?
• Fed Reflation. The Fed reflated the financial system despite inflation worries.
Page 7
The Global S-Curve
Per Capita GDP (2005 US$)
100,000
Source:
Source: CIA
CIA World
World Factbook,
Factbook, Haver
Haver Analytics.
Analytics
Bubbles depict per capita
Bubbles
oildepict
consumption
population
(2005
as barrels
of 2005.per capita per year).
Norway
Norway
Norway
USA
USA
USA
Ireland
Ireland
Ireland
Hong Kong
Hong
HongKong
Kong
Japan
Japan
Belgium
Australia
Australia
Denmark
Belgium
Canada
Sweden
Sweden
Australia
Japan
Denmark
Denmark
Belgium
Canada
Germany
Sweden
Germany
Germany
Italy France
Singapore
Spain
France
Italy
Italy France
Singapore
Singapore Spain
South
South Korea
Korea
South Korea
Portugal
Portugal
UK
UK
Netherlands
Netherlands
Netherlands
Portugal
Chile
Chile
Chile
10,000
Tunesia
Tunesia
Mexico
Russia
Mexico
Mexico
Brazil
Brazil
China
China
China
Brazil
Philipines
Philipines
India
India
India
Philipines
Pakistan
Pakistan
Zimbabwe
Zimbabwe
Iraq
Iraq
Iraq
Zimbabwe
Nigeria
Nigeria
Nigeria
Mali
Mali
Mali
Years of Economic Development
1,000
-100
-50
0
50
100
150
Magazine: Time, January 22, 2007; The Economist, February 24, 2007; The Economist, April 19, 2007
200
250
300
350
Page 8
International Stocks & The Dollar
Source: Ibbotson Assoc, Haver Analytics
Quarterly Data.
9.0
Non-U.S. stocks have outperformed since 2000.
8.0
7.0
World Ex-US
6.0
S&P 500 Total Return
-3.0
-3.2
MSCI World ex-U.S.
(rel. to S&P 500)
5.0
-3.4
-3.6
-3.8
4.0
-4.0
0.4
-4.2
-4.4
0.6
10 years
10 years
-4.6
USD/Euro
0.8
10 years
1.0
5 years
1.2
5 years
1.4
1.6
'57
'59
'61
'63
'65
'67
'69
'71
'73
'75
'77
'79
'81
'83
'85
'87
'89
'91
'93
'95
'97
'99
'01
'03
'05
'07
'09
'11
Page 9
1400
The Global Liquidity Boom
1300
Source: FMRCo, Factset, Haver Analytics. Monthly data.
1200
Stock prices are benefiting
from a global liquidity boom.
1100
1000
900
12
800
700
10
600
MSCI Emerging Markets
8
500
400
6
300
4
200
Baltic Exchange Dry
Index (Jan-04-85=1000)
11%
2
10%
0
9%
8%
7%
Global Money Growth
6%
5%
'00
'00
'00
'00
'00
'00
'00
'00
'00
'00
'00
'00
Page 10
1989: Total = $1.13 trillion
Other,
4%
Equity leadership has
evolved over the years.
United
States,
23%
1999: Total = $5.21 trillion
Japan,
73%
Other,
12%
2007: Total = $5.65 trillion
Japan,
16%
United
States,
72%
Other,
21%
United
States,
38%
China,
41%
Concept from New York Times article (Floyd Norris) and The Leuthod Group.
Source: Bloomberg Financial markets (2007data); Standard & Poor's (1989 & 1999 data); MSCI (1989 & 1999 data).
Page 11
100
Oil Consumption & Globalization
Quarterly Data. Concept by Barry Bannister of Stifel Nicolaus
Data Source: Stifel Nicolaus, Haver Analytics.
Quarterly data from 1/00 through 12/06.
By 2050, there will be 3 billion
more energy consumers and
the world could be consuming
42% more oil than today.
10
35
Barry Bannister, Stifel Nicolaus
Crude Oil
30
1
25.49
25
20
Barrels/Capita: USA
17.40
Barrels/Capita: Japan
15.35
Barrels/Capita: Hong Kong
15.09
15
Barrels/Capita: S. Korea
0
Barrels/Capita: China
Barrels/Capita: India
10
5
1.95
0.84
'00
'05
'10
'15
'20
'25
'30
'35
'40
'45
'50
'55
'60
'65
'70
'75
'80
'85
'90
'95
'00
'05
'10
0
'15
Page 12
1000
Long Term Trends in Oil Prices
Quarterly Data. Source: Haver Analytics, ASPO, Gary Shilling & Co.
Oil is approaching
the $100 target.
$130
$100
trend
$70
upper
lower
target 1: $70
100
$40
target 3: $130
target 2: $100
Crude Oil
60
50
40
$10
Oil Discoveries (bil B/Y)
Projected Discoveries (bil B/Y)
Oil Production (bil B/Y)
ASPO Projected Production (bil B/Y)
Oil Consumption (bil B/Y)
10
1
30
20
0
10
0
1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Page 13
Water: the scarcest commodity?
Meat Consumption vs. Income
140
Source: Livestock's Long Shadow (FAO 2006)
Data as of 2002
USA
Needs per person:
Rural vs. Urban Population Trends
120
Spain
Source: Livestock's long Shadow:
FAO 2006
Hong Kong Denmark
Population expressed as billions of people.
6
Water needed for drinking:
2-3 liters per day
Australia
100
Argentina
5
4.94
Brazil
Rural
Water needed for cooking,
bathing, & sanitation:
50 liters per day
Netherlands
80
4
Billion people
Meat consumption per Capita (kg)
Austria
60
Urban
3.21
Switzerland
3.19
3
China
Korea 2.86
Japan
2
40
1
Russia
Water needed to grow our food:
3,000 liters per day
20
Source: 13D Research
0
India
0
0
1950
5,000
1960
1970
10,000
1980
1990
15,000
2000
20,000
2010
2020
25,000
2030
30,000
2040
2050
35,000
40,000
Income per Capita (US$ PPP)
Page 14
The Investment Clock
high inflation
Non-cyclicals
Pharma
Utilities
Bonds
Fed
eases
Financials
Consumer
Technology
New Bull Mkt
0
43
43
DOWN
CYCLE
Bull mkt
ends
disinflation
35
EARLY
CYCLE
11
36
12
LATE
CYCLE
Inflation
accelerates
13
MID
CYCLE
15
30
Energy
non-cyclicals
Pharma
Commodities
28
Earnings
growth peaks
26
24
20
Fed starts
to tighten
Energy
Industrials
Materials
Technology
Commodities
Page 15
7.5
A History of Financial Crises
Quarterly Data. Source: Haver Analytics.
7.0
2007 will be known as
the year of the subprime credit crisis.
6.5
6.0
5.5
S&P 500 Index (log)
5.0
1987
Black Monday
4.5
1984
Continental
Illinois
1970
Penn Central
1994
Mexico
`
1990
S&L Crisis
1982
Latin America
4.0
2001
9/11
Tech Bubble
Corp.
Scandals
2007
Sub-prime
1998
LTCM
Russia
Asian Contagion
18.0
16.0
14.0
1974
Franklin National
12.0
10.0
8.0
6.0
4.0
10yr Tsy Yield
Fed Funds Target Rate
2.0
0.0
'67
'69
'71
'73
'75
'77
'79
'81
'83
'85
'87
'89
'91
'93
'95
'97
'99
'01
'03
'05
'07
'09
Page 16
The Trouble with Housing
Monthly Data. Source: FMRCo, Haver Analytics.
230
207
Housing will likely
remain a problem for
some time to come.
210
190
198
170
S&P/Case-Shiller Home Price Index:
Composite 20 (NSA, Jan-00=100)
150
45,000
41,356
1,798
130
40,000
110
35,000
90
30,000
25,000
New Orders for Tech Equipment ($mil)
Housing Units Authorized (000's)
10.0
9.0
8.0
877
20,492
20,000
8.3
15,000
66,399
7.0
Tech orders
Tech
orders and
and inventories
inventories are
are from
from
the 1996-2003
1996-2003 cycle,
cycle, overlaid
overlaid against
against
the
the
the current
current housing
housing cycle.
cycle.
6.0
5.0
4.0
4.2
3.0
2.0
Tech Equipment Inventories ($mil)
1.0
Months Supply of Homes
40,236
0.0
'99
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
Page 17
Important Legal Information
•Not NCUA or NCUSIF insured. May lose value. No credit union guarantee.
•The information presented reflects the opinions of Jurrien Timmer, Director of Market Research, for Fidelity Management & Research Company as of November 14,
2007. These opinions do not necessarily represent the views of Fidelity or any other person in the Fidelity organization and are subject to change at any time based
upon market or other conditions. Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because
investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
•Past performance is no guarantee of future results.
•As with all of your investments through Fidelity, you must make your own determination whether an investment in any particular security or fund is consistent with your
investment objectives, risk tolerance, financial situation, and your evaluation of the investment option. Fidelity is not recommending or endorsing any particular
investment option by mentioning it in this conference call or by making it available to its customers. This information is provided for educational purposes only, and you
should bear in mind that laws of a particular state and your particular situation may affect this information.
•The S&P 500® and S&P are registered trademarks of The McGraw-Hill Companies, Inc., and are licensed for use by Fidelity Distributors Corp., and its affiliates. The
S&P 500 Index is an unmanaged market capitalization-weighted index of common stocks. All indexes are unmanaged and no investment may be made in any index.
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions.
•[Fidelity, Fidelity Investments, and Fidelity Investments & Pyramid Design] is a /are registered service mark(s) of FMR Corp.
•Small-cap stocks are generally more volatile than large-cap stocks.
•Lower-quality debt securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer.
•Foreign investments, especially those in emerging markets, involve greater risk and may offer greater potential returns than U.S. investments. This risk includes political
and economic uncertainties of foreign countries, as well as the risk of currency fluctuation.
•Value stocks can perform differently from the market as a whole. They can remain undervalued by the market for long periods of time.
•The Fed Funds rate is the rate of interest on overnight loans of excess reserves among commercial banks. Bonds are rated by agencies such as Standard & Poor’s
and Moody’s Investor Services with ratings that measure the risk of default. Bonds rated AAA are considered to be the safest while those rated below BBB are
considered to be “high yield” or below investment grade. Intermediate ratings of AA+ or BB- are often used to further differentiate bonds. Lower-quality debt securities
involve greater risk of default or price changes due to the credit quality of the issuer. 30-year treasury and 10 year treasury are a fixed income securities backed by the
full faith and credit of the U.S. government and are used as benchmarks for the pricing of various corporate fixed income instruments. The S&P Gold group is an index of
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•The Periodic Table of Investment Returns shows the returns of various asset classes over time, ranked from best to worst. The chart represents data through 9/30/07.
Source: FMRCo. Russell 2000: Russell 2000 Index. Small Growth: Russell 2000 Growth Index. Small Value: Russell 2000 Value Index. Large Growth: Russell 1000
Growth Index. Large Value: Russell 1000 Value Index. S&P 500: Standards & Poor’s 500 Stock Index. Bonds: Lehman Brothers Aggregate Bond Index. Cash: 3month
T-Bills (Ibbotson Assoc.). Commodities: Goldman Sachs Commodities Index. Real Estate: NAREIT Equity Index. Convertibles: CSFB Convertible Securities Index.
Japan: MCSI (in U.S. Dollars). Europe: MCSI (in U.S. Dollars). EAFE: MCSI (in U.S. Dollars). High Yield: Ibbotson Assoc. Domestic High Yield Index. Gold: Ibbotson
Associates.
Page 18
Important Legal Information
•Definitions of categories and indices on slide 3:
•Small Cap: Russell 2000 Index. The Russell 2000 Index is an unmanaged market cap-weighted index of 2,000 small company stocks.
•Small Growth: Russell 2000 Growth Index. The Russell 2000 Growth Index is an unmanaged index of 2,000 small company stocks, determined by Russell to be
growth stocks as measured by their price-to-book ratios and forecasted growth values.
•Small Value: Russell 2000 Value Index. The Russell 2000 Value Index is an unmanaged market cap-weighted index of 2,000 small company stocks, determined by
Russell to be value stocks as measured by their price-to book ratios and forecasted growth values.
•Large Growth: Russell 1000 Growth Index. The Russell 1000 Growth Index is an unmanaged market capitalization-weighted index of large company stocks
determined by Russell to be growth stocks as measured by their price-to-book ratios and forecasted growth values.
•Large Value: Russell 1000 Value Index. The Russell 1000 Value Index is an unmanaged market capitalization-weighted index of large company stocks determined by
Russell to be value stocks as measured by their price-to-book ratios and forecasted growth values.
•S&P 500: Standard & Poor’s 500 Stock Index. The S&P 500® and S&P, are registered trademarks of The McGraw-Hill Companies, Inc., and are licensed for use by
Fidelity Distributors Corp., and its affiliates. The S&P 500 Index is an unmanaged market capitalization-weighted index of common stocks.
•Bonds: Lehman Brothers Aggregate Bond Index. A Benchmark index made Up of the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed
Securities Index, and Asset-Backed Securities Index, including securities that are of investment-grade quality or better, have at least one year to maturity, and have an
outstanding Par value of at least $100 million.
•Cash: 3month T-Bills (Ibbotson Assoc.)
•Commodities: Goldman Sachs Commodities Index. The GSCI is a composite index of commodity sector returns, representing an un-leveraged, long-only investment
in commodity futures that is broadly diversified across the spectrum of commodities.
•Real Estate: NAREIT Equity Index. The unmanaged National Association of Real Estate Investment Trusts (NAREIT) Equity Index is a market-value weighted index
based upon the last closing price of the month for tax-qualified REITs listed on the NYSE.
•Convertibles: CSFB Convertible Securities Index. CSFB's U.S. Convertible Securities Index is a market-weighted benchmark of convertible performance.
•Japan: MCSI (in U.S. Dollars). The Morgan Stanley Capital International Japan Index is an unmanaged market capitalization-weighted index that is designed to
represent the performance of the Japanese stock market.
•Europe: MCSI (in U.S. Dollars). The MSCI AC World Ex-US Index, when including or excluding securities, takes into account any limitations that an international
investor would experience when investing directly in such securities. The index contains both developed and emerging market securities.
•EAFE: MCSI (in U.S. Dollars). Morgan Stanley Capital International Europe, Australasia, Far East Index (EAFE) is an unmanaged market capitalization-weighted index
that is designed to represent the performance of developed stock markets outside the United States and Canada. The EAFE Index is registered service mark of Morgan
Stanley and has been licensed for use by FMR Corp. The fund is neither sponsored by, nor affiliated with Morgan Stanley.
•High Yield: Ibbotson Assoc. Domestic High Yield Index. Ibbotson Domestic High Yield Index is a broad high yield index including high yield bonds across the maturity
spectrum, within the BB-B rated credit quality spectrum, included in the below-investment-grade universe.
•Gold: Ibbotson Associates. The Ibbotson Gold Index is an unmanaged market cap-weighted index of gold-related stocks.
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Page 19