Fidelity Managed Retirement Funds

[Pages:23]PORTFOLIO MANAGER Q&A | AS OF JANUARY 31, 2022

Fidelity? Managed Retirement Funds

Key Takeaways

? For the semiannual reporting period ending January 31, 2022, returns

for the Retail Class shares of Fidelity Managed Retirement Funds were modestly negative, ranging from -1.56% to -1.79%.

? Each Fund performed roughly in line with its composite index the past

12 months.

? Underlying investment performance among non-U.S. equity funds

detracted from the Funds' relative results this period, especially Fidelity? Series Emerging Markets Fund (-6.81%), which trailed its benchmark, the MSCI Emerging Markets Index (-4.58%). An investment in Fidelity? Series Small Cap Opportunities Fund (-0.49%) notably contributed, outperforming the -8.41% result of its benchmark, the Russell 2000? Index.

? In terms of active asset allocation, a non-composite allocation to

commodities and an underweighting investment-grade bonds boosted the Funds' relative results. Conversely, underweighting U.S. equities detracted.

? As of January 31, Co-Portfolio Managers Andrew Dierdorf and Brett

Sumsion believe the Funds continue to be positioned in segments of the market trading at a significant discount or premium relative to their view of fair value, including inflation-sensitive securities and non-U.S. equities. At the same time, the Funds are underweight U.S. equities and U.S. investment-grade bonds.

FUND NAMES

Fidelity Managed Retirement Income Fund Fidelity Managed Retirement 2010 Fund Fidelity Managed Retirement 2015 Fund Fidelity Managed Retirement 2020 Fund Fidelity Managed Retirement 2025 Fund Fidelity Managed Retirement 2030 Fund

Not FDIC Insured ? May Lose Value ? No Bank Guarantee

PORTFOLIO MANAGER Q&A | AS OF JANUARY 31, 2022

Market Recap

For the six months ending January 31, 2022, global financial markets were influenced by the broader reopening of businesses, an improved outlook for global economic growth, and fiscal and monetary stimulus. Strong corporate earnings growth amid ongoing mid-cycle economic expansion in several countries provided support for risk assets. However, investors grappled with rising inflation, increasing bond yields, supply constraint and disruption, valuation concerns, and highly transmissible variants of the coronavirus.

International equities returned -3.22% the past six months, according to the MSCI ACWI (All Country World Index) ex USA Index. By region, Asia Pacific ex Japan (-8%) lagged most, followed by Europe ex U.K. (-5%), emerging markets (-4%) and Japan (-3%). Conversely, the U.K. (+5%) and Canada (+4%) topped the broader index. By sector, energy (+21%) led, driven by elevated prices for crude oil and natural gas. Financials (+7%) also notably outperformed. In contrast, consumer discretionary (-11%) and health care (-10%) fared worst, while the information technology and materials (-7% each) sectors notably lagged.

U.S. stocks gained 0.73% for the six months, as measured by the Dow Jones U.S. Total Stock Market Index. Among sectors, energy (+35%) was the top performer. Financials and consumer staples (+8% each), along with utilities (+6%), also showed strength. In contrast, communication services (-10%) notably lagged. Small-cap stocks substantially trailed larger-caps, while value stocks outpaced growth. Commodities rose 12.07%, per the Bloomberg Commodity Index Total Return.

U.S. taxable investment-grade bonds returned -3.17%, according to the Bloomberg U.S. Aggregate Bond Index, amid rising market interest rates and inflation. In December, the U.S. Federal Reserve said it was time to retire the term "transitory" in describing U.S. inflation and raised prospects for three quarterpoint rate hikes in 2022. Corporate bonds (-4.26%) trailed U.S. Treasuries (-2.96%). Elsewhere, commercial mortgage-backed securities (-3.14%) and agencies (-2.43%) also lost ground. Outside the index, leveraged loans gained 2.32%, but other noncore categories declined, included emerging-markets debt (-3.91%), U.S. corporate high-yield bonds (-1.54%) and Treasury Inflation-Protected Securities (-0.60%).

BROAD ASSET CLASS RETURNS (%) PERIOD ENDING JANUARY 31, 2022

2012

Best

18.6

18.5

P

16.6

e

16.4

r f

12.9

o

12.7

r

m

9.8

a n

5.0

c

4.2

e 3.6

0.1

Worst

-1.1

--

Dispersion of Returns*

19.7

2013 33.5 21.2 14.7 5.4 0.1 -1.8 -2.0 -2.3 -5.6 -6.6 -9.5 -12.7

--

46.1

2014 25.1 16.9 12.5 12.1 7.0 6.0 5.5 1.8 0.9 0.1 -1.8 -4.2 -17.0

Calendar-Year Returns 2015 2016 2017 2018

13.6 4.1 1.2 0.5 0.4 0.2 0.1 0.1 -0.5 -1.2 -2.9 -14.6 -24.7

17.5 12.6 11.8 11.6 10.4 10.2 5.3 4.9 4.0 3.0 2.6 1.3 0.3

37.8 24.5 21.2 9.3 8.5 8.3 7.5 4.7 4.3 3.5 1.9 1.7 0.9

1.9 0.7 0.6 0.0 -0.3 -1.8 -2.3 -4.1 -4.6 -5.3 -11.2 -13.9 -14.2

42.1 38.3 17.1 36.9 16.1

2019 30.9 22.8 18.9 18.4 14.8 14.4 14.4 10.3 8.7 8.7 7.7 6.9 2.3

28.6

2020 20.8 18.7 17.7 8.4 7.8 7.5 6.4 6.1 5.9 3.5 3.4 0.7 -3.1

23.9

2021 27.1 25.7 12.9 9.9 5.7 5.4 5.3 0.0 -1.0 -1.5 -1.5 -2.2 -4.6

31.8

Average Annual

Cumulative

5 Year 16.0 8.7 8.2 6.0 5.6 5.4 5.2 4.4 4.1 3.7 3.6 3.1 1.1

3 Year 19.8 11.0 10.0 7.6 7.2 7.1 6.1 5.9 5.1 3.9 3.7 3.5 0.9

1 Year 34.7 18.5 9.0 6.2 4.5 3.8 2.1 0.0 -2.5 -3.0 -3.2 -5.2 -6.9

6 Mos 12.1 2.3 0.7 0.0 -0.3 -1.5 -2.0 -2.6 -2.9 -3.2 -3.9 -4.2 -4.5

3 Mos

U.S. Equities 4.4

Non-U.S. Developed0.9 Markets Equities

0.0

Emerging-Markets Equities

-0.5

Commodities

-1.7

High-Yield Debt

-1.9

Floating-Rate Debt

-2.1

International Debt

-2.4

Emerging-Markets Debt

-2.9

Real Estate Debt

-3.0

Investment-Grade Debt

-3.9

Inflation-Protected Debt

-4.1

Short-Term Debt

-4.2

Long-Term U.S. Treasury Debt

14.9 18.9 41.7 16.5 8.6

Periods greater than one year are annualized. Source: FMR *Difference between best- and worst-performing asset classes over the given time period You cannot invest directly in an index. Past performance is no guarantee of future results. U.S. Equities - Dow Jones U.S. Total Stock Market Index, Non-U.S. Developed-Markets Equities - MSCI World ex USA Net Mass, Emerging-Markets Equities MSCI Emerging Markets Index, Commodities - Bloomberg Commodity Index Total Return, High-Yield Debt - ICE BofA U.S. High Yield Constrained Index, Floating-Rate Debt - S&P/LSTA Leveraged Performing Loan Index, International Debt - Bloomberg Global Aggregate Credit Ex U.S. Index Hedged (USD), Emerging-Markets Debt - J.P. Morgan Emerging Markets Bond Index Global, Real Estate Debt - Fidelity Real Estate Income Composite Index, InvestmentGrade Debt - Bloomberg U.S. Aggregate Bond Index, Inflation-Protected Debt - Bloomberg U.S. 1-10 Year Treasury Inflation-Protected Securities (TIPS) Index (Series-L), Short-Term Debt - Bloomberg U.S. 3 Month Treasury Bellwether Index, Long-Term U.S. Treasury Debt - Bloomberg U.S. Long Treasury Index

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 JANUARY 31, 2022

Q&A

Andrew Dierdorf Co-Manager

Fund Facts

Income 2010 2015 2020 2025 2030

Trading Symbol FIRMX FIRQX FIRSX FIRVX FIXRX FMRAX

Brett Sumsion Co-Manager

Start Date

08/30/2007 08/30/2007 08/30/2007 12/31/2007 12/31/2007 08/16/2019

Size (in millions)

$21.7 $7.3 $8.5 $12.2 $63.8 $39.3

Investment Approach

? Fidelity Managed Retirement FundsSM (the Funds) are intended for investors seeking to use the value of their account as a source of income during retirement. The name of each Fund refers to its "horizon date," the year closest to the one during which an investor turns 70.

? The Funds are actively managed and diversified among a broad group of underlying Fidelity mutual funds according to an asset allocation strategy that gradually becomes more conservative over time. The Funds are not set to automatically liquidate; ultimately, the Funds are expected to merge with Managed Retirement Income Fund.

? The Funds with longer time horizons will generally invest in a greater percentage of equity funds, while the Funds with shorter time horizons will emphasize fixed-income and short-term funds.

? The Funds employ a robust investment process focused on helping investors achieve their objectives during retirement by leveraging the depth and strength of Fidelity's investment research and resources.

An interview with Co-Portfolio Managers Andrew Dierdorf and Brett Sumsion

Q: Andrew, how did Fidelity Managed Retirement Funds perform for the six months ending January 31, 2022

A.D. Returns for the Retail Class shares of Fidelity Managed Retirement Funds were modestly negative the past six months, ranging from -1.56% to -1.79%. Each Fund lagged its composite index by 10 basis points or less, with the exception of Fidelity Management Retirement Fund 2030, which topped its composite by two basis points.

Looking back a bit longer term, all the Funds generated a gain for the trailing 12 months, with returns ranging from 0.97% to 5.66%. The Funds had mixed results versus composites. (For specific Fund results, please refer to the Performance Summaries.)

Q: How would you characterize the market environment the past six months

A.D. The reporting period could be characterized as one of uncertainty that manifested in varied returns across asset classes. We believe portfolio diversification is the best way to manage uncertainty.

A few asset classes had positive returns. Commodities was the top-performing asset class, as evidenced by the 12.07% gain of the Bloomberg Commodity Index Total Return. Leveraged loans, according to the S&P/LSTA Leveraged Performing Loan Index, gained 2.32%, and U.S. equities advanced a modest 0.73%, as measured by the Dow Jones U.S. Total Stock Market Index.

Other benchmarks for various asset classes had negative results. For instance, non-U.S. equities returned -3.22% for the six months, according to the MSCI ACWI (All Country World Index) ex USA Index. Emerging-markets equities delivered a -2.64% return based on the MSCI Emerging Markets Index. High-yield bonds (-1.54%), international bonds (-2.93%), U.S. investment-grade bonds (-3.17%) and emerging-markets debt (-3.91%) also declined during the reporting period.

The fourth quarter of 2021 saw rising inflation and tighter monetary policy. During this period, short-term yields increased and longer-term yields decreased.

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 JANUARY 31, 2022

Q: Turning to you, Brett, what notably influenced results versus composite indexes

B.S. Underlying investment performance among non-U.S. equity funds detracted from the Funds' relative results this period, especially our stake in Fidelity? Series Emerging Markets Fund (-6.81%), which trailed its benchmark, the MSCI Emerging Markets Index (-4.58%). Among U.S. equities, an investment in Fidelity? Series Blue Chip Growth Fund (-5.57%) notably detracted. The fund underperformed the -0.06% result of its benchmark, the Russell 1000? Growth Index.

the Funds in segments of the market trading at a significant discount or premium relative to our view of fair value. Specifically, the Funds have a fairly neutral equity position compared with composite indexes, with overweight allocations to inflation-sensitive assets and non-U.S. equities.

Thank you for your confidence in us, and in Fidelity's investment management expertise.

[Editor's note: For more on the Funds' active positioning, please see the next portion of this shareholder update.]

Q: Which specific underlying investments notably outpaced their benchmarks

B.S. Overall, our investments in non-U.S. developed-markets equities contributed. Specifically, an investment in Fidelity? Series International Value gained 4.85%, topping the 1.58% rise of the MSCI EAFE Value Index. Fidelity? Series International Growth (-6.37%) outperformed the -8.33% return of its benchmark, the MSCI EAFE Growth Index.

Also contributing was Fidelity? Series Investment-Grade Bond Fund (-2.72%), which topped the Bloomberg U.S. Aggregate Bond Index (-3.17%).

Q: How did active asset allocation decisions influence the Funds' relative performance

B.S. Overall, our allocation of assets was moderately helpful. In particular, non-composite exposure to commodities, which gained 12.12%, contributed most.

Underweighting investment-grade bonds also added value versus composite indexes.

Conversely, overweighting emerging-markets equities held back the Funds' relative performance this period, as did an underweighting in U.S. equities.

Q: Back to you, Andrew, any final thoughts for shareholders as of January 31

A.D. We continue to focus on delivering compelling longterm outcomes, based on the various risk and return profiles for the time horizons for each Fund. Managed Retirement Funds are designed to help retirees invest with an asset allocation that supports a withdrawal strategy in retirement.

At the end of January, while economic conditions have improved, new challenges, including rising inflation and highly transmissible variants of the coronavirus, bear watching. Uncertainty and volatility are likely to remain elevated, in our view, thus reinforcing our commitment to diversification as the best way to manage that uncertainty.

We continue to believe there are opportunities to position

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 JANUARY 31, 2022

Co-Portfolio Manager Brett Sumsion on the Funds' active positioning:

"Our active asset allocation process seeks to identify mispriced assets, and we position Managed Retirement Funds accordingly. At the end of January, inflation-sensitive (i.e., real) assets, such as Treasury Inflation-Protected Securities and commodities, are overweight in the Funds, based on our view that market participants have mispriced the potential for inflation surprises to the upside. In our view, extraordinary monetary and fiscal policy, demand for goods and services, supply-chain disruption, and tightness of labor markets may lead to sustained inflationary pressure in ways that are not anticipated by many investors. That said, following a strong period of recent performance, we reduced our allocation to inflation-sensitive assets in the fourth quarter of 2021. Our favorable view of real assets is complemented by an underweight in nominal bonds. We believe investors are likely to earn returns for owning U.S. and other sovereign investment-grade bonds that are not commensurate with the embedded risk.

"Elsewhere, as of period end the Funds are overweight non-U.S. equities and underweight U.S. equities. Following an extended period of dominant U.S. growth, low inflation and U.S.-dollar strength, our view is that market participants are extrapolating the recent cycle into the future, resulting in U.S. equity valuations that may not be sustainable. In comparison, we view emerging-markets equities and non-U.S. developed-markets equities to be priced at a discount relative to our view of fair value. We believe that investors have extrapolated a decade of weaker fundamentals (e.g., lower profitability, overcapacity) into the future, such that the expectations embedded in prices as of January 31 are too low. In the last three months of the reporting period, we increased the Funds' allocation to non-U.S. developed-markets and emergingmarkets equities. We view these asset classes as undervalued, while offering broad exposure to the global recovery - particularly through reflationary exposure, such as energy, materials and industrials, which could lead to aggregate financial results that exceed investors' expectations. Within U.S. equities, the Funds hold a greater allocation to value strategies than growth strategies. We believe an increase in inflation expectations may cause investors to prefer companies with cash flow that will be realized over a shorter time horizon, such as value stocks."

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 JANUARY 31, 2022

Fidelity Managed Retirement Income Fund FUND HOLDINGS BY ASSET CLASS

Holding U.S. Equities

Equities Series Lg Cap Value Idx Series Blue Chip Growth Series Large Cap Stock Srs Lg Cap Growth Idx Fd Series Value Discovery Ser Small Cap Opps

Commodities Series Commodity Stgy

Non-U.S. Equities Developed-Markets Equities Series Intl Value Fid Series Overseas Fund Series Intl Growth Series Canada Series Intl Index Fund Series Intl Small Cap Emerging-Markets Equities Ser Emerging Markets Opps Series Emerg Markets Fund

Bonds U.S. Investment-Grade Bond Ser Invt Grade Bond Ser Govt Bond Index Fund Srs Inv Grade Securitized

Portfolio Weight 8.12% 6.01% 1.81% 1.27% 0.97% 0.83% 0.69% 0.44% 2.12% 2.12% 13.37% 7.19% 1.81% 1.65% 1.64% 0.80% 0.73% 0.56% 6.19% 5.58% 0.61% 61.85% 38.88% 11.65% 11.02% 8.12%

Portfolio Weight Six Months Ago

9.23% 6.44% 1.92% 1.42% 1.00% 0.91% 0.70% 0.48% 2.80% 2.80% 12.31% 6.48% 1.54% 1.56% 1.55% 0.65% 0.64% 0.54% 5.83% 5.26% 0.57% 55.83% 38.66% 11.61% 10.62% 8.01%

Holding Series Corp Bond Fund

Long-Term U.S. Treasury Bond Ser LT Treasury Bd Idx

U.S. Interm-Term Inflation-Protected Bond

Ser Infl-Prot Bd Idx U.S. Short-Term Inflation-Protected Bond

Series 0-5 YR TIPS Index U.S. Long-Term Inflation-Protected Bond

Series 5+ YR TIPS Index High-Yield Debt

Series High Income Floating-Rate Debt

Series Fltg Rate HI International Bond

Ser Int Dev Mkt Bond Indx Series Intl Credit Emerging-Markets Debt Series Emer Mkts Debt Series EM Debt Loc Curr Real Estate Debt Series Real Estate Inc Short-Term Debt & Net Other Assets Ser Treasury Bill Index Series ST Credit Series Government MM NET OTHER ASSETS

Portfolio Weight 8.09% 2.94% 2.94%

3.99%

3.99%

10.99%

10.99%

1.22%

1.22% 0.63% 0.63% 0.10% 0.10% 2.02% 1.98% 0.04% 0.70% 0.52% 0.18% 0.38% 0.38% 16.66% 9.95% 3.36% 3.32% 0.01%

Portfolio Weight Six Months Ago

8.42% 3.10% 3.10%

12.19%

12.19%

--

--

--

-0.63% 0.63% 0.11% 0.11% 0.04%

-0.04% 0.72% 0.55% 0.18% 0.38% 0.38% 22.63% 13.56% 4.08% 4.96% 0.02%

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 JANUARY 31, 2022

FISCAL PERFORMANCE SUMMARY: Periods ending January 31, 2022

Cumulative

6 Month

YTD

1 Year

Annualized

3 Year

5 Year

10 Year/ LOF1

Fidelity Managed Retirement Income Fund Gross Expense Ratio: 0.45%2

-1.79%

-1.82%

0.97%

5.76%

4.78%

5.24%

Bloomberg US Aggregate Bond Index

-3.17%

-2.15%

-2.97%

3.67%

3.08%

2.59%

Fidelity Managed Retirement Income Composite Index

-1.69%

-2.20%

1.22%

5.89%

5.05%

5.30%

Morningstar Fund Target-Date Retirement

-1.59%

-2.56%

3.17%

7.03%

5.76%

4.88%

% Rank in Morningstar Category (1% = Best)

--

--

95%

89%

89%

45%

# of Funds in Morningstar Category

--

--

169

150

125

77

1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 08/30/2007. 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, or estimated amounts for the current fiscal year in the case of a newly launched fund. 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 performance, institutional. , or . 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.

7 | 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 JANUARY 31, 2022

Fidelity Managed Retirement 2010 Fund FUND HOLDINGS BY ASSET CLASS

Holding U.S. Equities

Equities Series Lg Cap Value Idx Series Blue Chip Growth Series Large Cap Stock Srs Lg Cap Growth Idx Fd Series Value Discovery Ser Small Cap Opps

Commodities Series Commodity Stgy

Non-U.S. Equities Developed-Markets Equities Series Intl Value Fid Series Overseas Fund Series Intl Growth Series Canada Series Intl Index Fund Series Intl Small Cap Emerging-Markets Equities Ser Emerging Markets Opps Series Emerg Markets Fund

Bonds U.S. Investment-Grade Bond Ser Invt Grade Bond Ser Govt Bond Index Fund Srs Inv Grade Securitized

Portfolio Weight 11.02% 8.83% 2.68% 1.84% 1.45% 1.20% 1.02% 0.64% 2.19% 2.19% 15.35% 8.57% 2.14% 1.98% 1.98% 0.95% 0.86% 0.66% 6.78% 6.10% 0.68% 58.90% 37.25% 11.17% 10.55% 7.77%

Portfolio Weight Six Months Ago

12.69% 9.89% 2.95% 2.19% 1.53% 1.40% 1.09% 0.73% 2.79% 2.79% 14.54% 8.06% 1.91% 1.94% 1.92% 0.81% 0.80% 0.68% 6.49% 5.86% 0.63% 53.00% 36.82% 11.06% 10.11% 7.63%

Holding Series Corp Bond Fund

Long-Term U.S. Treasury Bond Ser LT Treasury Bd Idx

U.S. Interm-Term Inflation-Protected Bond

Ser Infl-Prot Bd Idx U.S. Short-Term Inflation-Protected Bond

Series 0-5 YR TIPS Index U.S. Long-Term Inflation-Protected Bond

Series 5+ YR TIPS Index High-Yield Debt

Series High Income Floating-Rate Debt

Series Fltg Rate HI International Bond

Ser Int Dev Mkt Bond Indx Series Intl Credit Emerging-Markets Debt Series Emer Mkts Debt Series EM Debt Loc Curr Real Estate Debt Series Real Estate Inc Short-Term Debt & Net Other Assets Ser Treasury Bill Index Series ST Credit Series Government MM NET OTHER ASSETS

Portfolio Weight 7.76% 2.97% 2.97%

3.66%

3.66%

9.46%

9.46%

1.80%

1.80% 0.59% 0.59% 0.10% 0.10% 1.99% 1.91% 0.08% 0.70% 0.52% 0.18% 0.38% 0.38% 14.73% 8.77% 2.99% 2.92% 0.05%

Portfolio Weight Six Months Ago

8.02% 3.10% 3.10%

11.17%

11.17%

--

--

--

-0.63% 0.63% 0.10% 0.10% 0.08%

-0.08% 0.72% 0.54% 0.18% 0.38% 0.38% 19.77% 11.84% 3.55% 4.35% 0.03%

8 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.

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