Fidelity Dividend Growth Fund - Fidelity Investments

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

Fidelity? Dividend Growth Fund

Key Takeaways

? For the fiscal year ending July 31, 2022, the fund's Retail Class shares

returned -2.83%, topping the -4.64% result of the benchmark, the S&P 500? index.

? After peaking in late 2021 and early 2022, most major U.S. equity

indexes declined through mid-June and reached bear-market territory, before recovering somewhat as the 12-month period came to a close.

? Notable market headwinds included Russia's invasion and ongoing

occupation of Ukraine, higher U.S. Treasury yields and the Federal Reserve's moves to tighten monetary policy in an effort to contain soaring inflation.

? Sector and industry positioning were responsible for the vast majority

of the fund's outperformance of the benchmark this period. However, favorable picks among health care stocks had the single biggest positive impact on the portfolio's relative result.

? In July 2021, the Board of Trustees approved modifying the fund's

investment policies to better reflect the focus on companies with current/historical dividends versus current/potential for dividends. On October 1, 2021, Fidelity added the Morningstar U.S. Dividend Growth Index as a supplemental benchmark to signal the fund's commitment to dividend-paying companies.

? On October 1, 2021, Fidelity increased dividend distribution

frequency for the fund because it includes income as a component of its investment strategy. Dividend distributions will be paid four times a year: April, July, October and December. Quarterly dividend distributions commenced in April 2022. Please note that there are no changes to the frequency of capital gains distributions.

Not FDIC Insured ? May Lose Value ? No Bank Guarantee

MARKET RECAP

The S&P 500? index returned -4.64% for the 12 months ending July 31, 2022, as a multitude of crosscurrents challenged the global economy and financial markets. Persistently high inflation, exacerbated by energy price shocks from the Russia? Ukraine conflict, spurred the U.S. Federal Reserve to hike interest rates more aggressively than anticipated, and concerns about the outlook for economic growth sent stocks into bear market territory. In early May, the Fed approved a rare half-percentage-point interest rate increase and announced plans to shrink its $9 trillion asset portfolio. June began with the Fed allowing up to billions in Treasuries and mortgage bonds to mature every month without investing the proceeds. Two weeks later, the central bank raised rates by 0.75 percentage points, its largest increase since 1994, and said it was becoming more difficult to achieve a soft landing, in which the economy slows enough to bring down inflation while avoiding a recession. Against this volatile backdrop, the S&P 500 posted its worst first-half result (-19.96%) to begin a year since 1970. Stocks sharply reversed course in July (+9.22%), as the Fed again raised its benchmark interest rate by 0.75% and signaled that, at some point, it will likely slow the pace of tightening to assess the impact on the economy. For the full 12 months, communication services (-29%) and consumer discretionary (-10%) lagged most. In contrast, energy (+67%) rode a surge in commodity prices and led by a wide margin, followed by the defensive utilities (+16%) sector.

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

Q&A

Zach Turner Portfolio Manager

Fund Facts

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

FDGFX April 27, 1993 $6,204.52

Investment Approach

? Fidelity? Dividend Growth Fund is a diversified domestic equity strategy with a large-cap core orientation. The fund seeks capital appreciation.

? The fund invests in a mix of large- and mid-cap stocks that have favorable prospects to sustainably pay and grow dividends over time.

? Our investment philosophy centers on comparing price and value. We believe price will converge with value over time in a competitive market. Quality is an integral part of our assessment of value.

? We also believe that companies with a history of growing dividends demonstrate superior risk-adjusted returns over the course of a market cycle.

? A disciplined approach combining fundamental analysis, quality, valuation and accelerating capital return can help lead to outperformance over time.

An interview with Portfolio Manager Zach Turner

Q: Zach, how did the fund perform for the fiscal year ending July 31, 2022

The fund's Retail Class shares returned -2.83% the past 12 months, topping the -4.64% result of the benchmark, the S&P 500? index. The fund trailed the roughly break-even result of the peer group average.

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

After peaking in late 2021 and early 2022, most major U.S. equity indexes declined through mid-June and reached bearmarket territory, before recovering somewhat as the period came to a close.

Notable market headwinds for stocks included Russia's invasion and ongoing occupation of Ukraine, higher U.S. Treasury yields and the Federal Reserve's moves to tighten monetary policy in an effort to contain soaring inflation.

Inflation had already been on the rise throughout 2021 due to the government's stimulative monetary and fiscal policy, as well as supply-chain congestion caused by the COVID-19 pandemic. However, the conflict in Ukraine made matters worse, driving up the prices of crude oil, natural gas and industrial metals, as well as a number of agricultural commodities.

Seeing the threat of more extreme and entrenched inflation, the Fed began to tighten monetary policy by boosting its key rate 0.25% in March ? the central bank's first rate hike since December 2018. A larger 0.50% increase followed in May, with 0.75% increases in June and July.

Growth stocks bore the brunt of the sell-off, as rising rates caused compression in the valuations of companies estimated to have meaningful future earnings and cash flow. On the other hand, investors favored dividend-paying stocks of high-quality companies as defensive investments during the "risk-off" part of the period. Broadly speaking, this benefited the fund's holdings to some extent.

In the final six weeks of the period, stocks were finally able to deliver a decent rally amid signs that inflation could be peaking, which fueled hope among market participants that the Fed might back away from its aggressive tightening measures.

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 JULY 31, 2022

Q: How did you respond to these developments

I boosted the fund's allocation to defensive stocks and reduced exposure to more-aggressive groups. Overweightings in utilities (+16%) and consumer staples (+7%) ? both of which I added to this period ? were quite helpful to performance versus the benchmark, along with an underweighting in communication services (-29%).

On the other hand, I considerably reduced the portfolio's positioning among information technology (-6%) and consumer discretionary (-10%) companies, as well as the media & entertainment (-32%) segment of the communication services sector. The latter decision added meaningful value on a relative basis, given that group's weakness the past 12 months.

Q: What contributed most to the fund's performance versus the benchmark

Sector and industry positioning were responsible for the vast majority of the fund's outperformance this period. However, favorable picks among health care stocks had the single biggest positive impact on the portfolio's relative result. I will discuss this sector in more detail in the callout portion of this review. Additionally, foreign holdings modestly contributed overall, despite continued U.S. dollar strength.

Turning to individual holdings, the top-two relative contributors were PayPal Holdings (-69%) and (-19%). The fund didn't own either of these weak-performing benchmark components because they paid no dividend, which worked in the portfolio's favor this period. Within the media & entertainment industry, underweighted exposure to Meta Platforms (-55%) and Alphabet (-14%) ? along with avoiding Netflix (-57%) ? helped as well.

An outsized position in insurance broker Arthur J. Gallagher also provided a relative performance boost. After hitting an all-time high in mid-April, the stock pulled back through midJune. However, it finished the period in strong fashion, rising 30% for the 12 months overall. Solid performance in the firm's brokerage and risk management segments, strategic buyouts to capitalize on growing market opportunities, and upbeat guidance drove the stock's performance. Gallaghar is the largest property?casualty third-party claims administrator and the fourth-largest insurance broker globally, based on revenues. I trimmed the position a bit the past 12 months, but it remained one of the fund's largest overweights as of July 31.

On a stock-specific basis, underweighting Apple detracted from relative performance more than any other holding. Shares of the personal electronics giant rose 12% the past 12 months. That included meaningfully outpacing the S&P 500? following the mid-June market bottom. Many investors no doubt saw the stock as a good place to take refuge during a difficult market environment, as well as an investment that had the potential to outperform in a market recovery. However, although the stock performed well this period, I thought Apple's valuation fairly reflected the 5G product cycle and other longer-term profit drivers for the company. With that said, although the portfolio maintained a smallerthan-benchmark stake, Apple was our fifth-largest holding in absolute terms at the end of the period.

Not owning Tesla this past year also weighed on the fund's relative return. Shares of the electric-vehicle (EV) maker were quite volatile but managed to post a gain of roughly 30% this period, aided by a 32% rise in July alone. That marked its best monthly showing since October 2021. In reporting financial results for the second quarter of 2022, the company reaffirmed its soft guidance for 50% average annual growth in vehicle deliveries "over a multiyear horizon." Investors also eyed a possible 3-for-1 stock split to be considered at a shareholder meeting in August. Though I like the company and EV industry more broadly, Tesla's elevated priceearnings ratio was unattractive, in my view.

Q: What's your outlook as of July 31, Zach

At the end of the fund's previous semiannual shareholder report six months ago, I stated that I thought there was reason for caution, given the potential for higher market volatility. That observation proved to be quite timely. Although I'm not in the habit of making market calls, I saw storm clouds on the horizon in the form of persistent inflation, a fiscal-spending drop-off and likely monetary tightening by the Fed.

As I look around at period's end, inflation appears "stickier" than ever, and the Fed seems to have little choice but to continue "removing the punch bowl" of easy monetary policy until inflation is brought under control. I believe this could keep stocks on the defensive. Given this backdrop, I suspect an emphasis on capital preservation at this point in the economic cycle will prove to be prudent.

Q: What about noteworthy detractors

Investment choices in the industrials, materials and energy sectors detracted the most compared with the benchmark the past 12 months.

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 JULY 31, 2022

Portfolio Manager Zach Turner on the fund's exposure to health care:

"As part of my effort to shift the fund's assets into companies with high earnings visibility in a period of economic upheaval, the past 12 months I added to several holdings in health care equipment & services firms. As the name implies, this group includes both services firms, such as health insurers, and providers of equipment and supplies. I think certain companies in the former group offer particularly promising prospects going forward.

"Health insurers typically have three-year contracts with hospitals and other service providers, which lock in their costs for that period of time. Meanwhile, they normally implement yearly premium increases, which I believe should help them boost cash flow and recoup some extraordinary pandemic-related expenses.

"Another key positive for these stocks pertains to the Medicare part of their business. In April, the Biden administration finalized an 8.5% increase in rates to Medicare Part D and Medicare Advantage plans, slightly above the rate proposed earlier in the year. That's the best rate increase the industry has seen in many years. Cigna (+22%), Humana (+14%) and UnitedHealth Group (+33%) all were fund holdings on July 31 that stand to benefit from this development. In particular, Humana has extensive exposure to Medicare Advantage plans.

"On the equipment and supplies side, I initiated positions in Becton Dickinson (-7%) and Baxter International (-26%) during the period, both of which ? as distributors of a broad range of health care equipment and supplies ? could benefit as the U.S. health care system continues to normalize in the latter stages of the COVID-19 pandemic and beyond."

LARGEST CONTRIBUTORS VS. BENCHMARK

Holding

Market Segment

PayPal Holdings, Inc.

Information Technology

, Inc.

Consumer Discretionary

Meta Platforms, Inc. Class A

Communication Services

NVIDIA Corp.

Information Technology

Netflix, Inc.

Communication Services

* 1 basis point = 0.01%.

Average Relative Relative Contribution Weight (basis points)*

-0.51%

56

-3.54%

55

-0.75%

50

-0.34%

33

-0.51%

32

LARGEST DETRACTORS VS. BENCHMARK

Holding

Market Segment

Apple, Inc.

Information Technology

Tesla, Inc.

Consumer Discretionary

Newmont Corp.

Materials

General Electric Co. Industrials

Chevron Corp.

Energy

* 1 basis point = 0.01%.

Average Relative Relative Contribution Weight (basis points)*

-4.03%

-63

-1.93%

-53

0.35%

-43

1.38%

-39

-0.71%

-38

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 JULY 31, 2022

ASSET ALLOCATION

Asset Class

Portfolio Weight Index Weight

Relative Weight

Relative Change From Six Months

Ago

Domestic Equities

85.32%

100.00%

-14.68%

1.78%

International Equities

11.93%

0.00%

11.93%

-3.50%

Developed Markets

10.61%

0.00%

10.61%

-2.81%

Emerging Markets

1.18%

0.00%

1.18%

-0.68%

Tax-Advantaged Domiciles

0.14%

0.00%

0.14%

-0.01%

Bonds

0.00%

0.00%

0.00%

0.00%

Cash & Net Other Assets

2.75%

0.00%

2.75%

1.72%

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

Portfolio Weight 21.15% 13.46% 9.40% 8.63% 8.41% 7.72% 7.61% 6.66% 6.55% 4.16% 3.50% 0.00%

Index Weight 27.91% 14.32% 6.60% 7.83% 3.00% 10.63% 11.49% 4.37% 8.41% 2.90% 2.52% 0.00%

Relative Weight -6.76% -0.86% 2.80% 0.80% 5.41% -2.91% -3.88% 2.29% -1.86% 1.26% 0.98% 0.00%

Relative Change From Six Months

Ago -4.63% -0.14% 1.09% -2.63% 2.26% 0.89% -2.62% 2.72% 0.05% -0.21% 1.52% 0.00%

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

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