Fidelity Equity Dividend Income Fund

[Pages:9]PORTFOLIO MANAGER Q&A | AS OF NOVEMBER 30, 2021

Fidelity? Equity Dividend Income Fund

Key Takeaways

? For the fiscal year ending November 30, 2021, the fund's Retail Class

shares gained 18.40%, trailing the 22.92% advance of the benchmark, the Russell 3000? Value Index.

? Dividend-paying stocks ? and value/cyclical stocks in general ? led the

market higher during the period's first half. The advance was aided by investor expectations of an accelerating U.S. economic recovery driven by the distribution of three COVID-19 vaccines and massive government stimulus.

? However, these investments mostly lagged from mid-May onward, as

growth stocks regained market leadership. During this stretch, many of the lower-risk, income-paying equities in which the fund typically invests underperformed the portfolio's value-oriented benchmark.

? Versus the benchmark, positioning in the health care sector detracted

most from performance by far, mainly due to security selection, but also because of an overweighting. Picks in information technology, energy and real estate also worked against the fund's relative result, as did outsized exposure to the lagging consumer staples sector.

? On the positive side, security selection in financials added meaningful

value versus the benchmark, along with investment choices among consumer discretionary stocks.

? As of November 30, Portfolio Manager John Sheehy says he is

focused on identifying companies with resilient earnings streams, given the potential headwinds he sees for 2022 from a lessaccommodative Federal Reserve, high inflation and relatively elevated equity-market valuations.

Not FDIC Insured ? May Lose Value ? No Bank Guarantee

MARKET RECAP

The S&P 500? index gained 27.92% for the 12 months ending November 30, 2021, with U.S. equities rising on the prospect of a surge in economic growth amid strong corporate earnings, widespread COVID-19 vaccination, fiscal stimulus and fresh spending programs. After the index closed 2020 at an all-time high, investors were hopeful as the new year began. The rollout of three COVID19 vaccines was underway, the U.S. Federal Reserve pledged to hold interest rates near zero until the economy recovered, and the federal government planned to deploy trillions of dollars to boost consumers and the economy. A flattish May reflected concerns about inflation and jobs, but the rally resumed through August amid strong earnings. In early September, sentiment turned broadly negative due to a host of factors. These included inflationary pressure from surging energy/other commodity prices, rising bond yields, supply constraints and disruption, valuation concerns, and the fast-spreading delta variant of the coronavirus. In addition, the Fed signaled it could soon begin to taper the bond purchases it has made since the onset of the pandemic. The index returned -4.65% in September, its first monthly decline since January, but sharply reversed course with a 7.01% gain in October, driven by strength in earnings and notable improvement in the economy. By sector, energy gained about 57% to lead by a wide margin, followed by financials (+39%), whereas the defensive utilities (+8%) and consumer staples (+9%) groups notably lagged.

PORTFOLIO MANAGER Q&A | AS OF NOVEMBER 30, 2021

Q&A

John Sheehy Portfolio Manager

Fund Facts

Trading Symbol: Start Date: Size (in millions):

FEQTX August 21, 1990 $5,663.97

Investment Approach

? Fidelity? Equity Dividend Income Fund seeks to deliver yield in excess of the equity market with a value approach to capital appreciation.

? We believe that dividends provide a significant percentage of total return over time, and that a portfolio of stocks with above-market dividend yields/growth and below-average valuations can match or exceed the performance of the market over a full market cycle, but with a lower volatility of returns.

? We also believe that lower payout ratios provide safety for a dividend and can be supportive of future dividend growth. We look for companies committed to increasing their payout ratios, as demonstration of good capital management can lead to valuation expansion.

? We focus on high-quality firms with high or improving returns, as well as those with strong balance sheets, including cash on hand or cash the enterprise is reasonably expected to generate in the very near future.

An interview with Portfolio Manager John Sheehy

Q: John, how did the fund perform for the fiscal year ending November 30, 2021

The fund's Retail Class shares gained 18.40% the past 12 months, trailing the 22.92% advance of the benchmark, the Russell 3000? Value Index. The fund lagged the Morningstar peer group average by about the same margin, and finished behind the Lipper peer group average, which represents what we consider a more relevant group of similar funds, by almost as much.

Q: What was noteworthy about the market environment the past 12 months

Dividend-paying stocks ? and value/cyclical stocks in general ? led the market higher during the period's first half. The advance was aided by investor expectations of an accelerating U.S. economic recovery driven by the distribution of three COVID-19 vaccines and massive government stimulus.

The federal government poured trillions of dollars into supporting the economy, notably through the $1.9 trillion American Rescue Plan, which became law in March 2021. Additionally, in the final month of the period, Congress passed a $1.2 trillion infrastructure bill. The nation's central bank, the Federal Reserve, did its part by keeping financial conditions easy through supportive interest rate polices and quantitative easing. Since the early days of the pandemic, the Fed has been buying $80 billion per month in U.S. Treasury securities and $40 billion a month in mortgagebacked securities, with the goal of bolstering the economy and easing the flow of credit to U.S. households and businesses.

With that said, shares of dividend-paying equities lagged the widely followed S&P 500? index from mid-May onward, as growth stocks regained market leadership amid tempered optimism about U.S. economic prospects. During this stretch, many of the lower-risk, income-paying securities in which the fund typically invests underperformed even the portfolio's value-oriented benchmark. The spread of the delta variant of the coronavirus was one factor driving this shift, as were increasing concerns that the Fed might taper its bond-buying program and raise short-term interest rates sooner than expected, due to a resurgence in inflation.

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 NOVEMBER 30, 2021

Q: How did you respond to these developments from a positioning standpoint

The portfolio's sector weightings remained fairly stable the past 12 months, especially compared with the previous fiscal year, which was a period of extreme market volatility and higher fund turnover.

I did reconfigure the fund's holdings in consumer staples, which was our largest sector overweight at period end. Specifically, I added to our holdings in household & personal products through a larger out-of-benchmark stake in U.K.based Unilever and a new position in Procter & Gamble. At the same time, I reduced or exited positions in other parts of the staples sector. For example, I sold Kroger, J.M. Smucker, Coca-Cola Europacific Partners, British American Tobacco and Imperial Brands. These changes reflected my assessment of the pricing power of each of these companies in the face of accelerating inflation, relative to other investments.

Q: Which factors notably hurt the fund's performance versus the benchmark

Positioning in the health care sector detracted most by far, mainly due to security selection, but also because of an overweighting. Elsewhere, my picks in information technology, energy and real estate worked against the portfolio's relative result, as did outsized exposure to the lagging consumer staples sector.

On a stock-specific basis, the fund's largest relative detractor was an outsized stake in Bristol-Myers Squibb (-11%). Unfortunately, most drug companies, except for those supplying COVID-19 vaccines or treatments, saw their stocks disappoint this period. A slower approval process by the U.S. Food and Drug Administration and worries about potentially tighter regulation of drug pricing under the current administration weighed on the stock. Still, I continued to like Bristol's well-established franchise in cancer drugs, as well as a number of products in its pipeline. Consequently, this stock was the fund's second-largest holding as of November 30.

A non-benchmark stake in Unilever (-14%), one of the portfolio's core holdings, also hampered its relative return. The firm is a U.K.-based consumer goods company whose leading brands include Knorr, Dove, Axe and Lipton. One problem with this stock was that it was primarily viewed as defensive in nature because of its status as a supplier of necessities, such as soap and food. Early in the period, investors focused on the most cyclically sensitive stocks, and later the emphasis shifted to "growthier" names. Also, the company has considerable exposure to emerging markets, which have seen a slower recovery from COVID-19 due to weaker vaccination programs. Nevertheless, I expected Unilever to implement a number of price increases in 2022 and beyond, so I increased the fund's exposure here.

An overweighting in Verizon Communications (-13%) also hampered performance versus the benchmark. One concern investors had was how much the firm was spending to build out its 5G wireless network. In February 2021, the Federal Communications Commission revealed the results of a major 5G mid-band spectrum auction, with Verizon bidding a whopping $45 billion for 3,511 spectrum licenses. Later in 2021, the company participated in another, less-pricey auction for mid-band spectrum. Constructing the network will also require considerable expenditures beyond the licenses. Additionally, this period Verizon encountered moreintense competition for its existing wireless services business. Nevertheless, the stock was one of the fund's largest overweightings as of November 30, given my view that these were largely short-term challenges.

Q: What about noteworthy contributors

Security selection in the financials sector added meaningful value versus the benchmark, along with investment choices among consumer discretionary stocks.

The fund's top individual contributor was a larger-thanbenchmark position in Wells Fargo (+77%). Rising interest rates and modest loan growth helped fuel the stock's gain, along with huge government stimulus programs that helped ease the market's concerns that the pandemic could trigger a major increase in loan delinquency and default that would hurt lenders such as Wells Fargo. Additionally, investors became increasingly confident that the company's regulatory challenges stemming from unfortunate business decisions in past years were finally easing ? a view I shared. With that said, I reduced the fund's stake here, as the discount to other bank stocks narrowed considerably the past 12 months.

Out-of-benchmark exposure to France-based IT services provider Capgemini (+68%) also paid off. The pandemic has triggered a reassessment of technological capabilities across virtually every industry, and Capgemini is well-equipped to meet those needs. Moreover, the firm made some smart acquisitions before the COVID-19 crisis that enabled its growth to accelerate in recent months. I considerably reduced this position the past 12 months.

Q: What's your outlook as of November 30, John

I'm focused on identifying companies with resilient earnings streams, given the potential headwinds I see for 2022 from a less-accommodative Federal Reserve, high inflation and relatively elevated equity-market valuations.

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 NOVEMBER 30, 2021

John Sheehy on the importance of communications firms:

"As of November 30, we appear to be exiting a period characterized by massive government stimulus and strong wage growth, both of which put U.S. consumers in a good position. Going forward, I believe there will likely be less government stimulus, and inflation seems 'stickier' than many people expected. In this environment, I think consumers will have less to spend on discretionary items. Consequently, I have recently been buying shares of companies offering what I believe are must-have products and services.

"Although they are not consumer staples according to the conventional way of classifying stocks, things like wireless communication and broadband have become essential, in my opinion. If the past two pandemic-fraught years have taught us anything, it's that modern telecommunication services are a crucial stopgap in times of crisis, allowing people to flourish in the midst of immense societal disruption.

"Reflecting this point of view, the past 12 months I increased the portfolio's stake in Verizon Communications, making it the largest holding as of the end of November. The firm is a leader in 5G network development, having recently invested billions of dollars in 5G spectrum licenses, Furthermore, I believe we are close to a tipping point where capital spending for Verizon should begin to taper off, supporting the company's cash flow and roughly 5% dividend yield.

"I initiated an out-of-benchmark position in Germany-based Deutsche Telekom the past 12 months. This firm is the parent company of TMobile, the only U.S. wireless carrier that took significant market share during the period. Although I like T-Mobile, it pays no dividend, whereas shares of the parent company carry approximately a 4% dividend yield, so I used Deutsche Telekom as a proxy for T-Mobile."

LARGEST CONTRIBUTORS VS. BENCHMARK

Holding

Market Segment

Wells Fargo & Co.

Financials

Capgemini SA

Information Technology

AT&T, Inc.

Communication Services

Interpublic Group of Communication

Companies, Inc.

Services

Walmart, Inc.

Consumer Staples

* 1 basis point = 0.01%.

Average Relative Relative Contribution Weight (basis points)*

1.95%

99

1.10%

42

-0.99%

42

0.66%

36

-0.97%

35

LARGEST DETRACTORS VS. BENCHMARK

Holding

Market Segment

Bristol-Myers Squibb Co.

Health Care

Unilever PLC sponsored ADR

Consumer Staples

Verizon

Communication

Communications, Inc. Services

Allison Transmission Holdings, Inc.

Industrials

Sanofi SA sponsored ADR

Health Care

* 1 basis point = 0.01%.

Average Relative Relative Contribution Weight (basis points)*

2.50%

-92

1.97%

-75

1.49%

-61

1.15%

-50

1.66%

-47

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 NOVEMBER 30, 2021

ASSET ALLOCATION

Asset Class

Portfolio Weight Index Weight

Relative Weight

Relative Change From Six Months

Ago

Domestic Equities

83.39%

99.74%

-16.35%

-0.62%

International Equities

14.24%

0.26%

13.98%

0.47%

Developed Markets

13.18%

0.14%

13.04%

-0.12%

Emerging Markets

1.06%

0.11%

0.95%

0.59%

Tax-Advantaged Domiciles

0.00%

0.01%

-0.01%

0.00%

Bonds

0.00%

0.00%

0.00%

0.00%

Cash & Net Other Assets

2.37%

0.00%

2.37%

0.15%

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

Market Segment Health Care Financials Information Technology Industrials Consumer Staples Utilities Communication Services Consumer Discretionary Energy Materials Real Estate Other

Portfolio Weight 17.24% 16.39% 13.20% 11.88% 11.02% 7.21% 7.10% 3.96% 3.92% 3.15% 2.55% 0.00%

Index Weight 17.03% 21.79% 9.86% 11.91% 6.82% 4.96% 7.18% 5.92% 5.33% 3.83% 5.37% 0.00%

Relative Weight 0.21% -5.40% 3.34% -0.03% 4.20% 2.25% -0.08% -1.96% -1.41% -0.68% -2.82% 0.00%

Relative Change From Six Months

Ago -5.05% -0.22% 0.67% 0.63% 0.46% -0.12% 1.42% 2.11% -0.83% 1.06% -0.29% 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 NOVEMBER 30, 2021

10 LARGEST HOLDINGS

Holding

Market Segment

Portfolio Weight

Portfolio Weight Six Months Ago

Verizon Communications, Inc.

Communication Services

2.94%

2.43%

Bristol-Myers Squibb Co.

Health Care

2.75%

3.15%

Unilever PLC sponsored ADR

Consumer Staples

2.60%

1.89%

Wells Fargo & Co.

Financials

2.31%

2.98%

Cisco Systems, Inc.

Information Technology

2.18%

2.28%

Amdocs Ltd.

Information Technology

2.05%

2.04%

Philip Morris International, Inc.

Consumer Staples

2.02%

1.87%

Johnson & Johnson

Health Care

1.94%

1.72%

Merck & Co., Inc.

Health Care

1.90%

1.93%

State Street Corp.

Financials

1.88%

1.52%

10 Largest Holdings as a % of Net Assets

22.59%

22.11%

Total Number of Holdings

105

115

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: Periods ending November 30, 2021

Cumulative

6 Month

YTD

1 Year

Annualized

3 Year

5 Year

10 Year/ LOF1

Fidelity Equity Dividend Income Fund Gross Expense Ratio: 0.60%2

-3.39%

13.68%

18.40%

10.17%

9.19%

11.28%

MSCI US Investable Market High Dividend Yield Index

-0.05%

16.77%

20.93%

9.94%

10.69%

--

Russell 3000 Value Index

-0.75%

18.09%

22.92%

11.44%

10.25%

12.44%

Lipper Equity Income Funds

1.60%

17.88%

21.95%

12.14%

11.08%

11.43%

Morningstar Fund Large Value

-0.05%

18.57%

22.96%

11.68%

10.73%

11.85%

1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 08/21/1990. 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.

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 NOVEMBER 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. Fixed income investments entail interest rate risk (as interest rates rise bond prices usually fall), the risk of issuer default, issuer credit risk and inflation risk. Lower-quality bonds can be more volatile and have greater risk of default than higher-quality bonds. Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time.

IMPORTANT FUND INFORMATION Relative positioning data presented in this commentary is based on the fund's primary benchmark (index).

that ranks the performance of mutual funds.

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.

MORNINGSTAR INFORMATION ? 2022 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.

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.

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.

MSCI U.S. Investable Market High Dividend Yield Index is a market-capitalization-weighted index of stocks designed to measure the performance of the high dividend yielding segment of the U.S. large, mid, and small cap equity market. Real Estate Investment Trusts (REITs) are excluded. Eligible companies must have a persistent and sustainable dividend and a dividend yield that is meaningfully higher than average for the parent MSCI U.S. Investable Market 2500 Index.

Russell 3000 Value Index is a market-capitalization-weighted index designed to measure the performance of the broad value segment of the U.S. equity market. It includes those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth rates.

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.

LIPPER INFORMATION

Lipper Averages are averages of the performance of all mutual funds within their respective investment classification category. The number of funds in each category periodically changes. Lipper, a Refinitiv company, is a nationally recognized organization

7 |

PORTFOLIO MANAGER Q&A | AS OF NOVEMBER 30, 2021

Manager Facts

John Sheehy 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. Sheehy manages the Fidelity Advisor Equity Income Fund and Fidelity Equity Dividend Income Fund. Additionally, he co-manages the information technology and telecommunication services sleeves of Fidelity Stock Selector Large Cap Value Fund, Fidelity Series Stock Selector Large Cap Value Fund, and Fidelity Advisor Series Stock Selector Large Cap Value Fund. Prior to assuming his current responsibilities, Mr. Sheehy comanaged Fidelity Select Banking Portfolio until 2017. He also covered various sectors as an analyst at Fidelity, including banking, aerospace and defense, and paper and packaging. Before joining Fidelity in 2007, Mr. Sheehy worked as an audit manager at Deloitte. He has been in the financial industry since 2007. Mr. Sheehy earned his bachelor of arts degree in economics and accounting from the College of the Holy Cross and his master of business administration degree in finance from New York University's Stern School of Business. He is also a Certified Public Accountant (CPA).

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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