Fidelity Large Cap Stock Fund
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PORTFOLIO MANAGER Q&A | AS OF OCTOBER 31, 2021
Fidelity® Large Cap Stock Fund
Key Takeaways MARKET RECAP
• For the semiannual reporting period ending October 31, 2021, the The S&P 500® index gained 10.91% for
fund gained 6.57%, trailing the 10.91% advance of the benchmark the six months ending October 31, 2021,
S&P 500® index. with U.S. equities rising on the prospect
of a surge in economic growth amid
strong corporate earnings, widespread
• Portfolio Manager Matthew Fruhan notes that the fund's value- COVID-19 vaccination, fiscal stimulus and
inflected stance generally hampered performance versus the fresh spending programs. Investors were
benchmark the past six months, as concern about the spread of the optimistic, lifted by the rollout of three
delta variant of the coronavirus reignited investors' preference for COVID-19 vaccines, the U.S. Federal
growth-oriented stocks. Reserve's pledge to hold interest rates
near zero until the economy recovered,
• Versus the benchmark S&P 500® index, security selection was the and the federal government's plan to
primary detractor, with Matt's picks in the health care, information deploy trillions of dollars to boost
technology, communication services and consumer discretionary consumers and the economy. A flattish
sectors hurting most. May reflected concerns about inflation
and jobs, but the rally resumed through
• One of the fund's top individual detractors was industrial August amid strong earnings. In early
conglomerate General Electric, a large fund holding. GE's return was September, sentiment turned broadly
negative due to a host of factors. These
roughly flat the past six months, as the stock finished well behind the
included inflationary pressure from
benchmark in a sharply rising market.
surging energy/other commodity prices,
rising bond yields, supply constraints and
• In contrast, the fund's top individual relative contributor was a lack of disruption, valuation concerns, and the
exposure to large benchmark component Amazon.com (-3%), whose fast-spreading delta variant of the
weaker-than-anticipated revenue caused the shares to significantly coronavirus. In addition, the Fed signaled
underperform the market. For several years, Matt has avoided it could soon begin to taper the bond
investing in Amazon for what he sees as its excessively high valuation. purchases it has made since the onset of
the pandemic. The index returned -4.65%
• As of October 31, Matt was hopeful that the fund's value-oriented in September, its first monthly decline
stocks could continue to benefit from an economic recovery, and he since January, but sharply reversed
was beginning to seek opportunities to add back exposure to growth- course with a 7.01% gain in October,
oriented stocks at reasonable valuations. driven by strength among large-cap
growth stocks. By sector, energy gained
20% to lead the way, followed by
information technology (+16%) and real
estate (+13%). Notable "laggards"
included the defensive utilities (+2%) and
consumer staples (+5%) sectors, along
with industrials and materials (+3% each).
Not FDIC Insured • May Lose Value • No Bank GuaranteePORTFOLIO MANAGER Q&A | AS OF OCTOBER 31, 2021
Q&A
An interview with Portfolio Manager
Matthew Fruhan
Matt Fruhan Q: Matt, how did the fund perform for the six
Portfolio Manager months ending October 31, 2021
The fund gained 6.57%, trailing the 10.91% advance of the
Fund Facts benchmark S&P 500® index. The fund lagged the peer
Trading Symbol: FLCSX average by a narrower margin.
Security selection was the primary detractor versus the
Start Date: June 22, 1995
benchmark, with our picks in the health care, information
Size (in millions): $3,091.55 technology, communication services and consumer
discretionary sectors having the biggest negative impact.
Taking a slightly longer-term view, the fund rose 52.69% the
past 12 months, handily outpacing the S&P 500® and peer
group average.
Investment Approach
• Fidelity® Large Cap Stock Fund is a diversified domestic Q: How do you assess the fund's performance
equity strategy with a large-cap core orientation.
versus the benchmark for the past six months
• Our investment approach is to find companies that we
After a stretch of strong outperformance in late 2020 and
believe have attractive earnings and dividend yield
potential over the next two to three years, and where early 2021, the fund began to trail off in June and continued
our view is different from market consensus. to lag the S&P 500® through the end of October. Concern
about the spread of the delta variant of the coronavirus
• We believe securities can become mispriced relative to reignited investors' preference for growth-oriented stocks.
their true long-term value when investors become Given the fund's value-inflected stance, this backdrop was
increasingly focused on the short term, and our process generally unfavorable and, despite periods of strength for
seeks to exploit these discrepancies to drive
the fund, hampered our result for the full six months.
performance.
Throughout the market conditions we encountered this
• We strive to uncover these companies through in-depth
period, I maintained a consistent approach to managing the
bottom-up, fundamental analysis, working in concert
with Fidelity's global research team. fund. I recognize that investors sometimes overreact to
changes in short-term earnings estimates, leading securities
to become mispriced relative to their long-term intrinsic
(true) value. I believe that by combining deep investment
research with patience and discipline, an investor can take
advantage of this inefficiency.
At the same time, I will sell or avoid stocks when valuations
appear too high in relation to a company's future earnings
potential. Such close attention to what I consider
underappreciated long-term earnings power is, along with
valuation, critical to my investment philosophy.
Q: Which sectors did you prioritize this period
I continued to maintain three primary sector overweights:
industrials, financials and energy. In industrials, I have
become less attracted to early-cycle stocks that I expected to
peak early in an economic recovery. This segment now offers
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 OCTOBER 31, 2021
reduced upside, in my view. Instead, I remained more for the six months, slipping in late July after the company
interested in industrials stocks I thought could recover over a announced strong quarterly earnings but revenue that fell
longer time frame, including General Electric, the fund's short of the high end of its own projection for the first time in
second-largest holding and, because of its roughly flat return two years. Although I see Amazon as a very good business, I
in a rising market, a notable relative detractor this period. I believe its valuation is still much too high relative to its future
still see GE stock as undervalued as of October 31, given the earnings opportunity, so I continued to avoid the stock.
firm's strong financial results, valuable assets and
In financials, noteworthy relative contributors included large
opportunity to improve cash flow as the aerospace industry
banks Bank of America (+19%) and Wells Fargo (+14%), both
recovers.
among the fund's top holdings. Bank of America has done a
A sizable overweight in financials reflected some potential great job managing costs and prudently growing its loan
earnings drivers I think the market has overlooked. First, portfolio. As the most asset-sensitive of the country's large
large banks have a big competitive advantage in their ability banks, Bank of America particularly stands to gain if interest
to automate services. Second, these institutions have rates go up along with inflation. Meanwhile, given the quality
generated substantial capital, allowing them greater latitude of its deposit franchise and asset base, Wells Fargo offers
to buy back stock and return capital to shareholders. Third, exceptional growth potential, in my opinion, provided the
consumer credit held up throughout the pandemic better company's newer management team can effectively
than many analysts had feared. Last, I believe banks have the implement its strategy.
potential to generate higher net interest margin. This is the
In energy, Canadian energy producer Cenovus Energy
most important factor behind the fund's outsized position in
(+54%) benefited, like most other energy firms this period,
the financials sector. Should we enter an inflationary
from a rising oil price. Other factors lifting this out-of-
environment with rising interest rates, I think it'll be a
benchmark holding included improved access to the U.S.
particularly good financial environment for large bank
energy market and the company's productive steps toward
companies such as those I've prioritized in the fund. Should
improving its business quality by reducing debt.
the performance trends play out as I anticipate, I think it's
likely the fund's overweight in financials would decline as Exxon Mobil (+16%), one of the fund's largest positions, also
opportunities elsewhere start to look more attractive to me. meaningfully contributed. Unlike most competitors, this
leading integrated energy company heavily invested in new
Turning to energy, we've been overweight here for multiple
energy exploration projects throughout the downturn. By
years now. With the recent sharp rise in the oil price, I'm
expanding production while the oil price was rising and costs
hopeful we may now be seeing the consequence of several
were contained, Exxon had the potential to drive significant
years' worth of underinvestment in new supply, even as
future cash flow, in my opinion.
demand rebounds following the COVID-19 pandemic.
Q: Which individual stocks detracted most Q: Any closing thoughts for shareholders, Matt
As of October 31, I still see good opportunity in many of the
Electric-vehicle maker Tesla (+57%) and graphics-chip
fund's largest holdings in the industrials, energy and
manufacturer Nvidia (+70%) hurt our relative result. Both
financials sectors. If the economy continues to recover and
were strong-performing benchmark components I declined
these stocks appreciate as I expect, my focus may well shift
to hold. In my opinion, both Tesla and Nvidia are very good
to locking in gains from these cyclical sectors and looking to
companies with a significantly overvalued stock price. So, I
other areas of the marketplace.
was not tempted to own them at their current valuations.
If they meet my expectations and outperform for a sustained
Another notable relative detractor the past six months was a
period – so far, their gains have come in fits and starts – I'd
sizable investment in media company Comcast. The shares
anticipate these holdings to be a source of funds for future
returned about -8% this period because investors became
purchases of later-cycle stocks, as well as for any growth- or
increasingly concerned about the pace of subscriber losses
defensively oriented stocks that start to look more attractive
for the company's legacy cable-television business. Still, I
on a relative basis. ■
found Comcast very attractively valued, given the strength of
its core broadband operations, increasing importance of the
company's media and content properties, and the firm's
robust free cash flow and earnings.
Q: Which stocks notably helped
The fund's top individual relative contributor was our lack of
exposure to large benchmark component Amazon.com.
Shares of the dominant internet retailer returned roughly -3%
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 OCTOBER 31, 2021
LARGEST CONTRIBUTORS VS. BENCHMARK
Average Relative
Portfolio Manager Matt Fruhan Holding Market Segment
Relative Contribution
Weight (basis points)*
considers future investment Consumer
Amazon.com, Inc. -3.95% 56
opportunity for the fund: Discretionary
Cenovus Energy, Inc.
Energy 0.86% 33
(Canada)
"As of October 31, I'm still hoping to see even more
outperformance from the fund's sizable overweights Bank of America Corp. Financials 2.83% 24
in the industrials, financials and energy sectors. But, Communication
Facebook, Inc. Class A -2.00% 21
Services
after some recent, significant outperformance from
stocks in these groups, I've started to look ahead to Information
PayPal Holdings, Inc. -0.87% 19
Technology
evaluate their potential longer term. Namely, I'm
searching for opportunities to take advantage of the * 1 basis point = 0.01%.
next shift in market conditions and add back to
secular growers, if their valuations decline and reach
attractive entry points, or to more-stable companies LARGEST DETRACTORS VS. BENCHMARK
with quality-oriented business models.
Average Relative
"For several years, the portfolio has included a Relative Contribution
healthy allocation to value-oriented stocks because Holding Market Segment Weight (basis points)*
that's where I've perceived the best available Consumer
potential. But I don't consider myself a value Tesla, Inc. -1.49% -74
Discretionary
investor. Rather, I see myself as a core-focused, General Electric Co. Industrials 6.43% -71
growth-at-a-reasonable-price investor who assesses Information
investment opportunity through a valuation lens. NVIDIA Corp. -1.31% -62
Technology
Throughout much of the past several years, most Communication
growth stocks rose much faster than the overall Comcast Corp. Class A 2.61% -48
Services
market, especially as interest rates fell. In my view, Altria Group, Inc. Consumer Staples 2.40% -35
most investors began to abandon the valuation
* 1 basis point = 0.01%.
pillar of their investment philosophy, which I have
been unwilling to do. This resulted in painful
stretches of difficult performance versus the
benchmark for the fund in recent years. I believe in
the long-term value of paying the right price for
stocks, just as it's important to avoid overpaying in
other facets of life.
"As the fund's value-oriented, less economically
sensitive stocks have done well, I've been regularly
looking for opportunities to rebalance the portfolio
over time. This entails looking for opportunities to
rebuild investments in great, growth-oriented
companies with a reasonable valuation."
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 OCTOBER 31, 2021
ASSET ALLOCATION
Relative Change
From Six Months
Asset Class Portfolio Weight Index Weight Relative Weight Ago
Domestic Equities 90.29% 100.00% -9.71% -0.07%
International Equities 9.28% 0.00% 9.28% 0.33%
Developed Markets 9.01% 0.00% 9.01% 0.31%
Emerging Markets 0.27% 0.00% 0.27% 0.02%
Tax-Advantaged Domiciles 0.00% 0.00% 0.00% 0.00%
Bonds 0.00% 0.00% 0.00% 0.00%
Cash & Net Other Assets 0.43% 0.00% 0.43% -0.26%
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 19.70% 11.41% 8.29% 1.21%
Information Technology 19.38% 27.94% -8.56% -0.30%
Industrials 15.55% 8.03% 7.52% -0.05%
Health Care 13.43% 13.02% 0.41% -0.97%
Energy 8.85% 2.86% 5.99% 0.96%
Communication Services 8.30% 10.83% -2.53% -0.14%
Consumer Staples 5.42% 5.60% -0.18% -0.22%
Consumer Discretionary 5.27% 12.82% -7.55% -0.53%
Materials 2.42% 2.49% -0.07% -0.05%
Real Estate 0.89% 2.60% -1.71% 0.11%
Utilities 0.36% 2.41% -2.05% 0.24%
Other 0.00% 0.00% 0.00% 0.00%
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 OCTOBER 31, 2021
10 LARGEST HOLDINGS
Portfolio Weight
Market Segment Portfolio Weight
Holding Six Months Ago
Microsoft Corp. Information Technology 7.32% 6.01%
General Electric Co. Industrials 6.59% 6.79%
Wells Fargo & Co. Financials 5.15% 4.61%
Exxon Mobil Corp. Energy 4.58% 4.16%
Bank of America Corp. Financials 3.94% 3.70%
Apple, Inc. Information Technology 3.19% 3.01%
Comcast Corp. Class A Communication Services 2.83% 3.42%
Altria Group, Inc. Consumer Staples 2.31% 2.71%
United Parcel Service, Inc. Class B Industrials 1.94% 2.17%
Bristol-Myers Squibb Co. Health Care 1.65% 1.82%
10 Largest Holdings as a % of Net Assets 39.51% 38.53%
Total Number of Holdings 187 174
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 October 31, 2021 6 1 3 5 10 Year/
Month YTD Year Year Year LOF1
Fidelity Large Cap Stock Fund
6.57% 24.83% 52.69% 16.91% 15.74% 14.98%
Gross Expense Ratio: 0.48%2
S&P 500 Index 10.91% 24.04% 42.91% 21.48% 18.93% 16.21%
Morningstar Fund Large Blend 8.91% 22.25% 41.27% 19.58% 17.14% 14.63%
% Rank in Morningstar Category (1% = Best) -- -- 3% 85% 80% 50%
# of Funds in Morningstar Category -- -- 1,370 1,250 1,105 810
1 Lifeof Fund (LOF) if performance is less than 10 years. Fund inception date: 06/22/1995.
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 Retail Class shares (if multiclass). You may own another share class of the fund with a different expense structure and, thus, have different
returns. To learn more or to obtain the most recent month-end or other share-class performance, visit fidelity.com/performance, 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 Q&A 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 OCTOBER 31, 2021
Definitions and Important Information performing fund in a category will always receive a rank of 1%. %
Rank in Morningstar Category is based on total returns which
include reinvested dividends and capital gains, if any, and exclude
Information provided in this document is for informational and
sales charges. Multiple share classes of a fund have a common
educational purposes only. To the extent any investment information
portfolio but impose different expense structures.
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 RELATIVE WEIGHTS
investment decisions. Fidelity, and its representatives may have a
Relative weights represents the % of fund assets in a particular
conflict of interest in the products or services mentioned in this market segment, asset class or credit quality relative to the
material because they have a financial interest in, and receive benchmark. A positive number represents an overweight, and a
compensation, directly or indirectly, in connection with the negative number is an underweight. The fund's benchmark is listed
management, distribution and/or servicing of these products or immediately under the fund name in the Performance Summary.
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
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 500 is a market-capitalization-weighted index of 500 common
stocks chosen for market size, liquidity, and industry group
representation to represent U.S. equity performance.
MARKET-SEGMENT WEIGHTS
Market-segment weights illustrate examples of sectors or
industries in which the fund may invest, and may not be
representative of the fund's current or future investments. They
should not be construed or used as a recommendation for any
sector or industry.
RANKING INFORMATION
© 2021 Morningstar, Inc. All rights reserved. The Morningstar
information contained herein: (1) is proprietary to Morningstar
and/or its content providers; (2) may not be copied or
redistributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are
responsible for any damages or losses arising from any use of this
information. Fidelity does not review the Morningstar data and, for
mutual fund performance, you should check the fund's current
prospectus for the most up-to-date information concerning
applicable loads, fees and expenses.
% Rank in Morningstar Category is the fund's total-return
percentile rank relative to all funds that have the same Morningstar
Category. The highest (or most favorable) percentile rank is 1 and
the lowest (or least favorable) percentile rank is 100. The top-
7 |PORTFOLIO MANAGER Q&A | AS OF OCTOBER 31, 2021 Manager Facts Matthew Fruhan 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. Fruhan manages Fidelity Advisor Capital Development Fund, Fidelity Series Growth & Income Fund, Fidelity Advisor Series Growth & Income Fund, Fidelity Growth & Income Portfolio, Fidelity Advisor Growth & Income Fund, and Fidelity VIP Growth & Income Portfolio. Additionally, he manages Fidelity Mega Cap Stock Fund, Fidelity Advisor Mega Cap Stock Fund, Fidelity Large Cap Stock Fund, and Fidelity Advisor Large Cap Fund, as well as co- manages Fidelity Equity- Income Strategy, a separately managed account (SMA). Prior to assuming his current responsibilities, Mr. Fruhan managed Fidelity Advisor Financial Services Fund, VIP Financial Services Portfolio, and Select Financial Services Portfolio. Previously, he served as the industrials sector leader and managed Fidelity Advisor Industrials Fund, VIP Industrials Portfolio, and Select Industrials Portfolio. Prior to that, Mr. Fruhan managed Select Defense and Aerospace Portfolio, Select Air Transportation Portfolio, and Select Consumer Staples Portfolio. Additionally, Mr. Fruhan worked as an equity analyst following the food and supermarket industries, and in Fidelity's High Yield Research department following the specialty retail, automotive supply, and transportation industries. He has been in the financial industry since joining Fidelity in 1995. Mr. Fruhan earned his bachelor of arts degree, cum laude, in economics from Harvard College and his master of business administration degree from Harvard Business School. 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 December 31, 2021 1 3 5 10 Year/
Year Year Year LOF1
Fidelity Large Cap Stock Fund
25.83% 21.74% 14.13% 15.02%
Gross Expense Ratio: 0.48%2
1 Lifeof Fund (LOF) if performance is less than 10 years. Fund inception date: 06/22/1995.
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 Retail Class shares (if multiclass). You may own another share class of the fund with a different expense structure and, thus, have different
returns. To learn more or to obtain the most recent month-end or other share-class performance, visit fidelity.com/performance, 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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are based on numerous factors, may not be relied on as an indication of 02917.
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