Fidelity Advisor Canada Fund
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PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021
Fidelity Advisor® Canada Fund
Key Takeaways MARKET RECAP
• For the semiannual reporting period ending April 30, 2021, the fund's The MSCI ACWI (All Country World
Class I shares advanced 36.04%, outpacing the 34.87% gain of the Index) ex USA Index gained 27.51% for
benchmark, the S&P/TSX Composite Index of Canada-listed equities. the six months ending April 30, 2021,
with international equities rising amid
improved global economic growth,
• The Canadian market gained strongly the past six months, bolstered widespread COVID-19 vaccinations, fiscal
by the approval and early distribution of COVID-19 vaccines, stimulus in the U.S. and abroad, and
government stimulus, rising oil prices and the anticipation of a fresh government spending programs. In
quicker-than-expected return to normalcy. addition, foreign securities were
bolstered in part by general U.S.-dollar
• Portfolio Manager Ryan Oldham's stock choices added value versus weakness. The period began with a shift
the benchmark, especially in the materials sector. Stock and market in momentum. In November,
selections in energy and the software & services segment of international stocks shrugged off a two-
information technology also contributed. month retreat by gaining roughly 13%.
The momentum continued in December,
• Among individual stocks, avoiding weak-performing benchmark as positive news on the effectiveness of
component Barrick Gold (-20%) added the most value relative to the vaccines provided a notable boost to
benchmark, followed by Toronto-Dominion Bank (+59%). international equities. In late December,
as vaccines were approved by
government regulatory authorities,
• Conversely, an overweighting in consumer staples detracted, as did investors gained more confidence in the
stock selection in financials, most notably among banks. outlook for the global economy. As the
new year began, many economists raised
• Franco-Nevada (+3%) and Wheaton Precious Metals (-9%) – firms that their expectations for a powerful
collect royalties from gold mining – detracted the most on an economic recovery in the U.S. and
individual basis. elsewhere, as opposed to the sluggish
rebound they had been anticipating. By
• As of April 30, Ryan remains cautiously optimistic about Canadian region, the U.K. (+37%) and Canada
stocks, as the country and the world continues to recover from the (+35%) led the way. Europe ex U.K.
COVID-19 pandemic. He remains committed to his investment (+33%) and Asia Pacific ex Japan (+31%)
process of emphasizing what he thinks are good businesses that can also outperformed. Conversely, Japan
compound value over the longer term. (+17%) and emerging markets (+23%)
lagged. Looking at sectors, energy
(+45%) and financials (+40%) fared best,
followed by information technology and
materials (+39% each). In contrast,
notable "laggards" included health care
(+13%), consumer staples (+15%) and
utilities (+17%).
Not FDIC Insured • May Lose Value • No Bank GuaranteePORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021
Q&A
An interview with Portfolio Manager
Ryan Oldham
Ryan Oldham Q: Ryan, how did the fund perform for the six
Portfolio Manager months ending April 30, 2021
The fund's Class I shares advanced 36.04%, outpacing the
Fund Facts 34.87% gain of the benchmark, the S&P/TSX Composite
Trading Symbol: FICCX Index of Canada-listed equities, as well as the peer group
average.
Start Date: November 17, 1987
Looking slightly longer term, the fund rose 47.14%, for the
Size (in millions): $840.77 trailing 12 months, falling short of both the benchmark and
the peer average.
Q: How would you describe the environment
for Canadian stocks the past six months
Investment Approach
The Canadian market gained strongly for the period,
• Fidelity Advisor® Canada Fund is a country-focused
bolstered by the approval and early distribution of COVID-19
equity strategy that seeks long-term growth of capital by
vaccines, government stimulus, rising oil prices and the
investing primarily in the securities of Canadian issuers
anticipation of a quicker-than-expected return to normalcy.
and other investments that are tied economically to
Canada. In this environment, the energy and health care sectors
delivered the best results, helping the Canada index edge
• Our investment approach is rooted in the belief that the S&P 500 index of U.S.-listed stocks. A strong U.S. dollar
companies with high and more-stable returns and high also contributed to the fund's relative return.
payback to shareholders (through dividends and
buybacks) should outperform over the long term, if Canada fared better than the U.S. in slowing the spread of
purchased at attractive valuations. We also believe that the coronavirus during the six months, due to the country's
long-term value is often mispriced by a short-term- national response and its more-centralized health care
focused market. We seek to exploit these opportunities system. That said, Canada's vaccination effort lagged that of
through in-depth fundamental analysis, leveraging the U.S. because of supply constraints. As of April 30, less
Fidelity's global research capabilities. than 5% of Canada's population had been fully vaccinated,
• Overall, the fund focuses on good businesses at compared with about 40% of adults in the U.S.
attractive valuations. Typically, these are firms led by However, I believe Canada is on a steady track to recover
strong, shareholder-focused management teams with a from the pandemic, and like many developed nations,
history of delivering high investment returns and the
consumers are slowly returning to normal habits. Also, the
capacity to sustain or improve cash payouts to
U.S., Canada's most important trading partner, appears to be
shareholders.
emerging from the pandemic strongly, which will dictate how
• We target opportunities with potential for 10%-15% Canada's economy and that of the rest of the world fares
annual total shareholder return (capital appreciation plus over the longer haul.
dividends) trading at a market multiple or less.
Q: How did you manage the fund
I stuck with my investment process. Across sectors, I focused
on companies with a solid return on invested capital and low
debt, as well as firms I believed could add value in both up
and down markets. I also screened for companies that
appeared to be aligned with shareholders' best interests.
These firms returned capital to shareholders through
2 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021
dividends or buybacks. Their management teams often held PrairieSky Royalty acquires and manages land that collects
significant stakes in their companies or were beholden to key royalties from oil and gas investments. This company's
performance indicators that brought executive perpetual land rights date back to the 1800s, when it
compensation in line with the interests of stakeholders. received 25 million acres of land for completing the portion
of Canada's transcontinental railway from Winnipeg to British
Valuation is important to me, as well. I tended to buy shares
Columbia. PrairieSky continued to generate net cash.
of companies exhibiting the attractive qualities I seek when
they are out of favor and their valuation is below my
calculation of fair value. Q: What else had a noteworthy impact
I try to generate most of the fund's alpha – performance An overweighting in consumer staples, one of the weakest-
versus the benchmark – in down markets, while trying to performing sectors in the benchmark this period, hurt.
keep pace with the benchmark in rising markets. I'm Over the six months, the 10-year U.S. Treasury bond yield
especially pleased that the fund outpaced the benchmark in continued to rise from historic lows. This helped many banks,
a strong market environment this period, and as of April 30, I which generate revenue from interest rates on longer-term
believe the fund is set up well for the longer term. loans. Banks (+51%), therefore, posted some of the strongest
gains in the benchmark this period. Yet, my stock picks
Q: What factors notably impacted the fund's among banks detracted. It particularly hurt not to own
performance versus the benchmark enough of strong-performing index components Bank of
Nova Scotia (+57%) and Bank of Montreal (+62%).
My security choices, especially in the materials sector, added
value on a relative basis. Stock and market selections in That said, owning several high-quality stocks in this segment,
energy and the software & services segment of information including nearly double the benchmark's stake in Toronto-
technology also contributed. Dominion Bank (+59%), contributed. From my perspective,
TD Bank is one of the highest-quality retail banking
Overall, owning high-quality stocks in strong-performing franchises in Canada, and it is run by a conservative
sectors gave the fund its edge over the benchmark. management team. Throughout the period, TD maintained a
In materials, underweighting gold helped the fund's relative solid balance sheet and market share. I maintained the
return. The price of gold fell from the start of the six months fund's position in TD as of April 30.
through March. Gold miners with high costs of capital and
extraction, such as index component Barrick Gold (-20%) Q: Ryan, any closing thoughts for shareholders
suffered disproportionately.
At the end of April, I am cautiously optimistic. We have
That said, the fund gave up some of that advantage because witnessed a historic market rebound early in 2021. If the
I overweighted Franco-Nevada (+3%) and Wheaton Precious market is posting strong returns now, I'm looking forward to
Metals (-9%), two precious metals companies. Neither mines an environment in which the world's economies are back to
gold, which I found appealing because, unlike mining firms, firing on all cylinders.
they don't have the overhang of high capital expenses.
While I am watching what is happening on a macro level, I
Instead, Franco-Nevada collects royalties on gold and silver,
will continue remain true to my investment process. I believe
among other commodities, and Wheaton Precious Metals
the fund owns shares of great businesses that can compound
collects royalties on gold, silver and palladium.
value over the longer term and are less dependent on market
In energy, owning shares of Canadian Natural Resources fluctuations over time. ■
(+96%), Suncor Energy (+93%) and PrairieSky Royalty (+77%),
each based in Calgary, helped.
Canadian Natural Resources is one of the largest natural gas
producers in Western Canada, and the largest producer of
crude oil in Canada. After posting losses for several years,
the company is making progress toward profitability and
generating positive free cash flow.
I considered Suncor Energy one of the best integrated oil
producers with one of the strongest asset bases.
The company is well-funded, and tends to generate solid
cash flow from its diversified oil production, refining and
retail operations.
3 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021
LARGEST CONTRIBUTORS VS. BENCHMARK
Average Relative
Portfolio Manager Ryan Oldham on Holding Market Segment
Relative Contribution
Weight (basis points)*
compelling Canadian stocks: Barrick Gold Corp.
Materials -2.01% 157
(Canada)
"Canada is known for its great supply of natural The Toronto-Dominion
Financials 4.49% 92
resources, including precious metals, energy and Bank
lumber. However, there are many other high-quality Canadian Natural
Energy 1.60% 72
companies outside these segments that I find Resources Ltd.
compelling, especially among newer offerings. Suncor Energy, Inc. Energy 1.57% 69
PrairieSky Royalty Ltd. Energy 1.85% 67
"In industrials, GFL Environmental, a fund holding as
of April 30, provides solid-waste management * 1 basis point = 0.01%.
services across the U.S. and Canada. This company
launched its initial public offering (IPO) in March
2020, at the height of the pandemic. While LARGEST DETRACTORS VS. BENCHMARK
maintaining an increasing free-cash-flow yield, GFL
has invested heavily in increasing its footprint Average Relative
through accretive acquisitions, making 22 of them in Relative Contribution
2020 alone. Holding Market Segment Weight (basis points)*
Franco-Nevada Corp. Materials 3.53% -142
"Led by a strong, founder-led management team, I
Wheaton Precious
think GFL's longer-term outlook appears solid. Materials 2.03% -119
Metals Corp.
"Canada's Dye & Durham, another fund holding a of Alimentation Couche-
Tard, Inc. Class B (sub. Consumer Staples 3.50% -85
the end of April, is a founder-led company that
vtg.)
issued its IPO in July 2020. This company provides
Bank of Nova Scotia Financials -3.36% -68
software for legal and regulatory compliance
Metro, Inc. Class A
professionals. Dye & Durham's management team Consumer Staples 1.44% -63
(sub. vtg.)
has built a track record of acquiring and integrating
smaller companies inexpensively and successfully. * 1 basis point = 0.01%.
"I believe its prospects look healthy.
"Lastly, I'll mention GURU Organic, a Montreal-
based organic energy drink maker that launched its
IPO in November 2020. We held it in the fund as of
April 30.
"This founder-led company had been operating for
more than 20 years, but its products recently
experienced much more popularity as more
consumers focused on organic products. GURU is
one of the top-selling energy drinks in Canada and
can be purchased at more than 2,100 locations.
Revenue and margins continue to rise, and, in my
view, the company continues to capitalize on its
growth opportunities."
4 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021
ASSET ALLOCATION
Relative Change
From Six Months
Asset Class Portfolio Weight Index Weight Relative Weight Ago
International Equities 99.53% 98.33% 1.20% -0.16%
Developed Markets 99.53% 98.33% 1.20% -0.16%
Emerging Markets 0.00% 0.00% 0.00% 0.00%
Tax-Advantaged Domiciles 0.00% 0.00% 0.00% 0.00%
Domestic Equities 0.00% 1.67% -1.67% 0.18%
Bonds 0.36% 0.00% 0.36% 0.10%
Cash & Net Other Assets 0.11% 0.00% 0.11% -0.12%
Net Other Assets can include fund receivables, fund payables, and offsets to other derivative positions, as well as certain assets that do not fall into any of
the portfolio composition categories. Depending on the extent to which the fund invests in derivatives and the number of positions that are held for future
settlement, Net Other Assets can be a negative number.
"Tax-Advantaged Domiciles" represent countries whose tax policies may be favorable for company incorporation.
MARKET-SEGMENT DIVERSIFICATION
Relative Change
From Six Months
Market Segment Portfolio Weight Index Weight Relative Weight Ago
Financials 31.36% 31.57% -0.21% -0.56%
Materials 13.88% 12.30% 1.58% 1.94%
Industrials 12.73% 11.89% 0.84% -0.62%
Energy 12.31% 12.51% -0.20% 0.33%
Information Technology 9.18% 9.80% -0.62% 1.32%
Consumer Staples 8.66% 3.60% 5.06% -1.06%
Communication Services 5.39% 4.90% 0.49% -1.16%
Consumer Discretionary 4.83% 4.15% 0.68% -0.43%
Real Estate 1.06% 3.19% -2.13% 0.17%
Health Care 0.49% 1.35% -0.86% -0.47%
Utilities 0.00% 4.74% -4.74% 0.66%
Other 0.00% 0.00% 0.00% 0.00%
COUNTRY DIVERSIFICATION
Relative Change
From Six Months
Country Portfolio Weight Index Weight Relative Weight Ago
Canada 99.65% 98.33% 1.32% -0.41%
Other Countries 0.28% N/A N/A N/A
Cash & Net Other Assets 0.07% 0.00% 0.07% -0.05%
5 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021
10 LARGEST HOLDINGS
Portfolio Weight
Market Segment Portfolio Weight
Holding Six Months Ago
The Toronto-Dominion Bank Financials 10.15% 9.00%
Royal Bank of Canada Financials 9.90% 9.86%
Canadian Pacific Railway Ltd. Industrials 6.80% 7.15%
Alimentation Couche-Tard, Inc. Class B (sub. vtg.) Consumer Staples 4.84% 5.22%
Franco-Nevada Corp. Materials 4.83% 5.93%
Brookfield Asset Management, Inc. (Canada) Class A Financials 4.20% 3.59%
Sun Life Financial, Inc. Financials 3.41% 3.31%
Nutrien Ltd. Materials 3.31% 3.21%
Canadian Natural Resources Ltd. Energy 3.25% 2.33%
Suncor Energy, Inc. Energy 3.07% 2.22%
10 Largest Holdings as a % of Net Assets 53.75% 55.60%
Total Number of Holdings 47 49
The 10 largest holdings are as of the end of the reporting period, and may not be representative of the fund's current or future investments. Holdings
do not include money market investments.
FISCAL PERFORMANCE SUMMARY: Cumulative Annualized
Periods ending April 30, 2021 6 1 3 5 10 Year/
Month YTD Year Year Year LOF1
Fidelity Advisor Canada Fund - Class I
36.04% 14.38% 47.14% 10.46% 8.88% 3.47%
Gross Expense Ratio: 0.81%2
S&P/TSX Composite Index 34.87% 14.57% 50.51% 11.92% 10.17% 3.63%
1 Lifeof Fund (LOF) if performance is less than 10 years. Fund inception date: 11/17/1987.
2 This expense ratio is from the prospectus in effect as of the date shown above and generally is based on amounts incurred during that fiscal year. It
does not include any fee waivers or reimbursements, which would be reflected in the fund's net expense ratio.
Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a
gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. Performance shown is that of the
fund's Class I shares. Class I shares are sold to eligible investors without a sales charge or 12b-1 fee as defined in the fund's Class I prospectus.
Other share classes with these fees would have had lower performance. To learn more or to obtain the most recent month-end or other share-class
performance, visit institutional.fidelity.com or 401k.com. Total returns are historical and include change in share value and reinvestment of dividends
and capital gains, if any. Cumulative total returns are reported as of the period indicated. Please see the last page(s) of this document for most-recent
calendar-quarter performance.
6 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021 Definitions and Important Information Information provided in this document is for informational and educational purposes only. To the extent any investment information in this material is deemed to be a recommendation, it is not meant to be impartial investment advice or advice in a fiduciary capacity and is not intended to be used as a primary basis for you or your client's investment decisions. Fidelity, and its representatives may have a conflict of interest in the products or services mentioned in this material because they have a financial interest in, and receive compensation, directly or indirectly, in connection with the management, distribution and/or servicing of these products or services including Fidelity funds, certain third-party funds and products, and certain investment services. FUND RISKS Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks. The risks are particularly significant for funds that focus on a single country or region. IMPORTANT FUND INFORMATION Relative positioning data presented in this commentary is based on the fund's primary benchmark (index) unless a secondary benchmark is provided to assess performance. INDICES It is not possible to invest directly in an index. All indices represented are unmanaged. All indices include reinvestment of dividends and interest income unless otherwise noted. S&P/TSX Composite Index is a broad-based, market-capitalization- weighted index designed to measure the performance of the Canadian equity market. Eligible securities must be listed on the Toronto Stock Exchange and issued by companies incorporated in Canada. MSCI ACWI (All Country World Index) ex USA Index is a market capitalization-weighted index designed to measure the investable equity market performance for global investors of large and mid-cap stocks in developed and emerging markets, excluding the United States. MARKET-SEGMENT WEIGHTS Market-segment weights illustrate examples of sectors or industries in which the fund may invest, and may not be representative of the fund's current or future investments. They should not be construed or used as a recommendation for any sector or industry. RELATIVE WEIGHTS Relative weights represents the % of fund assets in a particular market segment, asset class or credit quality relative to the benchmark. A positive number represents an overweight, and a negative number is an underweight. The fund's benchmark is listed immediately under the fund name in the Performance Summary. 7 |
PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021 Manager Facts Ryan Oldham is a portfolio manager in the Equity division at Fidelity Investments. Fidelity Investments is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing, and other financial products and services to institutions, financial intermediaries, and individuals. In this role, Mr. Oldham is responsible for managing Fidelity Canada Fund and Fidelity Series Canada Fund. Prior to assuming his current position, Mr. Oldham was responsible for research that opportunistically searched for best ideas across the Canadian market. Previously, Mr. Oldham served as co-manager of Fidelity Select Natural Gas Portfolio from 2012 to 2013, and as manager of the fund from 2010 to 2012. He also covered research of large-cap domestic and Canadian/International exploration and production companies. Prior to joining Fidelity in 2007, Mr. Oldham served in various roles at Scotiabank. He has been in the financial industry since 2003. Mr. Oldham earned his bachelor of commerce degree from Concordia University's John Molson School of Business and his master of business administration degree from McGill University. He is also a CFA® charterholder. 8 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.
PERFORMANCE SUMMARY: Annualized
Quarter ending September 30, 2021 1 3 5 10 Year/
Year Year Year LOF1
Fidelity Advisor Canada Fund - Class I
32.65% 10.08% 8.85% 6.55%
Gross Expense Ratio: 0.81%2
1 Lifeof Fund (LOF) if performance is less than 10 years. Fund inception date: 11/17/1987.
2 This expense ratio is from the prospectus in effect as of the date shown above and generally is based on amounts incurred during that fiscal year. It
does not include any fee waivers or reimbursements, which would be reflected in the fund's net expense ratio.
Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a
gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. Performance shown is that of the
fund's Class I shares. Class I shares are sold to eligible investors without a sales charge or 12b-1 fee as defined in the fund's Class I prospectus.
Other share classes with these fees would have had lower performance. To learn more or to obtain the most recent month-end or other share-class
performance, visit institutional.fidelity.com or 401k.com. Total returns are historical and include change in share value and reinvestment of dividends
and capital gains, if any. Cumulative total returns are reported as of the period indicated.
Before investing in any mutual fund, please carefully consider Information included on this page is as of the most recent calendar
the investment objectives, risks, charges, and expenses. For quarter.
this and other information, call or write Fidelity for a free S&P 500 is a registered service mark of Standard & Poor's Financial
prospectus or, if available, a summary prospectus. Read it Services LLC.
carefully before you invest. Other third-party marks appearing herein are the property of their
respective owners.
Past performance is no guarantee of future results.
All other marks appearing herein are registered or unregistered
Views expressed are through the end of the period stated and do not trademarks or service marks of FMR LLC or an affiliated company.
necessarily represent the views of Fidelity. Views are subject to change at
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any time based upon market or other conditions and Fidelity disclaims any
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are based on numerous factors, may not be relied on as an indication of 02917.
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LLC. References to specific company securities should not be construed 725953.13.0
as recommendations or investment advice.
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