Fidelity Dividend Growth Fund - Fidelity Investments

QUARTERLY FUND REVIEW | AS OF SEPTEMBER 30, 2020

Fidelity? Dividend Growth Fund

Investment Approach

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

? Our investment philosophy centers on comparing price and value. We believe price will converge with value over time in a competitive market.

? The concept of "quality" is closely linked with our assessment of value. Ultimately the value of a business is the present value of the future cash flow it can return to shareholders through dividends and buybacks.

? A disciplined approach combining quality and valuation can lead to outperformance over time.

? As a result, the fund tends to have higher-quality characteristics and lower risk metrics for equivalent or lower valuation than the market.

PERFORMANCE SUMMARY

Fidelity Dividend Growth Fund Gross Expense Ratio: 0.49%2

Cumulative

3 Month

YTD

1 Year

Annualized

3 Year

5 Year

10 Year/ LOF1

4.48% -13.32% -2.44% 3.64% 7.42% 9.39%

S&P 500 Index Morningstar Fund Large Value % Rank in Morningstar Category (1% = Best) # of Funds in Morningstar Category

8.93% 4.85%

---

5.57% -11.07%

---

15.15% -4.52%

35% 1,205

12.28% 2.55% 38% 1,129

14.15% 7.26% 47%

992

13.74% 9.17% 46%

716

1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 04/27/1993. 2 This expense ratio is from the most recent prospectus and generally is based on amounts incurred during the

most recent 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 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.

For definitions and other important information, please see the Definitions and Important Information section of this Fund Review.

FUND INFORMATION

Manager(s): Gordon Scott Zach Turner

Trading Symbol: FDGFX

Start Date: April 27, 1993

Size (in millions): $5,888.43

Morningstar Category: Fund Large Value 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.

Not FDIC Insured ? May Lose Value ? No Bank Guarantee

QUARTERLY FUND REVIEW: Fidelity? Dividend Growth Fund | AS OF SEPTEMBER 30, 2020

Performance Review

For the three months ending September 30, 2020, the fund's Retail Class shares gained 4.48%, trailing the 8.93% advance of the benchmark S&P 500? index.

During the quarter, the S&P 500? rose steadily in July and August, reaching an all-time high on September 2 before cooling off to end the third quarter. The abundant provision of liquidity from central banks and sustained progress on economic reopening underpinned a continued rally in riskier assets, extending a broad-based recovery from a steep, brief decline from late February through March 23. After a historically sharp and short-lived recession during the spring, most major economies are now in early-cycle recovery.

Value stocks considerably lagged growth shares this quarter, extending a multiyear trend. This hurt the fund's performance versus the benchmark, which contains a mix of growth and value stocks.

Against this backdrop, stock selection and a sizable underweighting in the outperforming information technology sector detracted the past three months, as did a large overweighting in energy, by far the weakest-performing sector. Positioning in financials and health care also weighed on our relative result.

On a stock-specific basis, the fund's largest detractor versus the benchmark was Exxon Mobil. Shares of the integrated global oil & gas company returned about -22% the past three months. In late July, the company reported weaker-than-expected second-quarter earnings, due in part to weakness in its upstream, refining and chemicals operations. Elevated debt in a challenging operating environment also pressured the stock, according to Wall Street analysts. In its quarterly report, Exxon management acknowledged a desire to defend its dividend and not increase debt. During the period, we considerably reduced this position, which was the fund's largest holding as of June 30.

Underweighting Apple also worked against the fund. These shares rose 27% the past three months, as the maker of personal electronics released favorable financial results for its fiscal third quarter, showing growth across all product categories.

Notably, sales of Apple's iPhone? device grew by 2% for the period, boosted by stronger demand in May and June, after having stalled in recent years. Apple also cited positive reception to the iPhone? SE, the $400 device it released in April, as a key driver behind its smartphone sales.

We'll also mention Cisco Systems, which returned about -8% in the portfolio while we held it. The stock, which was the fund's No. 4 holding at the end of June, was hampered by a slowdown in spending by large customers that delayed decisions to purchase networking equipment due to economic uncertainty caused by COVID-19. We exited this position.

On the positive side, stock picking in the consumer discretionary sector lifted the fund's relative result. An overweighting in the strong-performing industrials sector helped to a lesser extent.

Looking at individual holdings, an overweighted position in Whirlpool was the fund's top relative contributor, gaining about 44% the past three months. The shares were helped in July, when the appliance maker reported second-quarter earnings that topped Wall Street's estimates and upped its sales guidance for 2020 overall. Management noted an impressive recovery in demand across all regions in June, contributing to a year-over-year global margin expansion for the month.

Overweighting FedEx also paid off. The company's shares rose 80% for the third quarter, as a surge in online buying amid the coronavirus pandemic drove financial results for the deliveries and logistics firm. Management credited volume growth in U.S. domestic residential package services, as well as yield improvement at FedEx Ground and FedEx Freight. "The growth that we expected to see over a period of three to five years happened in a period of three to five months," according to president and COO Rajesh Subramaniam.

United Parcel Service, an overweighted position that returned roughly 51% this quarter, also contributed. The company competes with FedEx in most markets and benefited for similar reasons.

LARGEST CONTRIBUTORS VS. BENCHMARK

Holding

Market Segment

Relative Average Contribution Relative (basis Weight points)*

Whirlpool Corp.

Consumer Discretionary

2.03%

56

FedEx Corp.

Industrials

0.78%

41

United Parcel Service, Inc. Class B

Industrials

1.08%

36

PVH Corp.

Consumer Discretionary

1.09%

24

Comcast Corp. Class A

Communication Services

2.54%

23

* 1 basis point = 0.01%.

LARGEST DETRACTORS VS. BENCHMARK

Holding

Market Segment

Relative Average Contribution Relative (basis Weight points)*

Exxon Mobil Corp.

Energy

3.01%

-100

Apple, Inc.

Information Technology

-3.69%

-62

Cisco Systems, Inc.

Information Technology

1.39%

-51

General Electric Co.

Industrials

2.35%

-49

Wells Fargo & Co.

Financials

2.64%

-46

* 1 basis point = 0.01%.

2 | For definitions and other important information, please see Definitions and Important Information section of this Fund Review.

QUARTERLY FUND REVIEW: Fidelity? Dividend Growth Fund | AS OF SEPTEMBER 30, 2020

Outlook and Positioning

There's no shortage of potential market-moving developments as we look ahead to the fourth quarter of 2020 and beyond. We'll be closely monitoring the trajectory of the coronavirus pandemic, as we believe it will likely determine the shape of the economic recovery. After receding somewhat earlier in the summer, infections were on the rise again near the end of September ? a worrisome trend.

A number of other trends, such as corporate digitization, ecommerce and cloud adoption, have accelerated by several years in the span of only a few months, and we'll see how those play out. In addition, companies are re-evaluating their supply chains in the wake of COVID-19, with onshoring increasingly taking precedence over offshore supply sources. Lastly, we have a presidential election in November that could bring important changes on multiple fronts.

During the third quarter, we made some important changes in the fund's positioning. For one thing, we roughly doubled the fund's weighting in information technology stocks. This adjustment brought the portfolio up to roughly a benchmark weighting from a large underweighting at the end of June. Notable stock overweights in the tech sector as of September 30 were Visa, Microsoft, Cognizant Technology Solutions and SS&C Technologies Solutions, all dividend payers that we believe also offer promising growth prospects. Visa was also the fund's top overall overweight at quarter-end.

We also added to the fund's holdings in consumer discretionary, the fund's largest sector overweighting as of quarter-end. Most of the purchases here occurred in retailing, restaurants and hotels, groups that we believe might be poised for better performance after suffering greatly earlier in the pandemic. With that said, the portfolio's largest overweightings in the consumer discretionary sector, as of September 30, were appliance maker Whirlpool and homebuilder Lennar.

To fund these purchases, we meaningfully reduced our allocations to financials and energy. In particular, we sold most of the fund's holdings in banks, retaining only those we felt could best navigate a challenging environment that includes rock-bottom interest rates and a potential surge in nonperforming loans. Three of these remaining bank positions were among the portfolio's top overweights as of the end of September: JPMorgan Chase, Bank of America and Wells Fargo.

Meanwhile, we reduced the fund's energy allocation from a large overweighting to roughly a benchmark weighting. Given the changes we've seen in favor of working from home, which might be a semi-permanent arrangement for many people, and other factors driving weaker demand for coal, oil and natural gas, we believe this sector does not merit a meaningful overweighting. Our largest energy position at quarter-end was Exxon Mobil, which dropped to the fund's eighteenth-largest position overall as of September 30.

We continue to leverage our stability and vast resources ? especially our technology, our research expertise across asset classes and our relationships with corporations and other entities ? to closely monitor the pandemic, gain insight into market dynamics as they evolve, and choose securities we think have the potential to outperform over time.

Thank you for your confidence in us, and in Fidelity's investmentmanagement capabilities.

MARKET-SEGMENT DIVERSIFICATION

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

Portfolio Weight

Index Weight

Relative Weight

Relative Change From Prior Quarter

28.31% 28.15% 0.16% 13.18%

15.15% 11.97% 11.46% 11.35%

11.55% 9.67% 14.23% 8.29%

3.60% 2.30% -2.77% 3.06%

3.28% -10.94% 1.72% -2.12%

7.69% 4.18% 3.67% 2.97% 2.34% 0.08% 0.00%

10.80% 2.62% 7.02% 2.06% 2.64% 2.97% 0.00%

-3.11% 1.56% -3.35% 0.91% -0.30% -2.89% 0.00%

0.01% 0.81% -1.94% -6.03% 1.82% 0.18% 0.00%

CHARACTERISTICS

Valuation

Portfolio

Price/Earnings Trailing Price/Earnings (IBES 1-Year Forecast) Price/Book

21.4x 16.0x 2.6x

Price/Cash Flow

9.7x

Return on Equity (5-Year Trailing)

13.8%

Growth Sales/Share Growth 1-Year (Trailing) Earnings/Share Growth 1-Year (Trailing) Earnings/Share Growth 1-Year (IBES Forecast) Earnings/Share Growth 5-Year (Trailing) Size

7.5% -38.8% 14.5% 15.3%

Weighted Average Market Cap ($ Billions) Weighted Median Market Cap ($ Billions) Median Market Cap ($ Billions)

282.7 67.7 29.5

Index

26.0x 21.6x 3.9x 14.6x 15.6%

8.8% -21.6% 10.1% 15.0%

450.4 152.7 22.9

3 | For definitions and other important information, please see Definitions and Important Information section of this Fund Review.

QUARTERLY FUND REVIEW: Fidelity? Dividend Growth Fund | AS OF SEPTEMBER 30, 2020

LARGEST OVERWEIGHTS BY HOLDING

Holding Visa, Inc. Class A JPMorgan Chase & Co. Microsoft Corp. UnitedHealth Group, Inc. Comcast Corp. Class A

Market Segment Information Technology Financials Information Technology Health Care Communication Services

Relative Weight

2.05% 2.01% 1.97% 1.96% 1.86%

LARGEST UNDERWEIGHTS BY HOLDING

Holding

, Inc. Apple, Inc. Alphabet, Inc. Class A Berkshire Hathaway, Inc. Class B Johnson & Johnson

Market Segment Consumer Discretionary Information Technology Communication Services

Financials

Health Care

Relative Weight -4.81% -3.70% -3.13%

-1.51%

-1.41%

10 LARGEST HOLDINGS

Holding Microsoft Corp. Visa, Inc. Class A JPMorgan Chase & Co. UnitedHealth Group, Inc. Apple, Inc. Comcast Corp. Class A Bank of America Corp. Altria Group, Inc. Wells Fargo & Co. Anthem, Inc. 10 Largest Holdings as a % of Net Assets Total Number of Holdings

Market Segment Information Technology Information Technology Financials Health Care Information Technology Communication Services Financials Consumer Staples Financials Health Care

30.41%

109

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.

ASSET ALLOCATION

Asset Class

Portfolio Weight

Index Weight

Relative Weight

Relative Change From Prior Quarter

Domestic Equities

91.39% 100.00% -8.61% -5.22%

International Equities

7.77%

0.00%

7.77%

5.17%

Developed Markets

5.22%

0.00%

5.22%

2.62%

Emerging Markets

2.55%

0.00%

2.55%

2.55%

Tax-Advantaged Domiciles

0.00%

0.00%

0.00%

0.00%

Bonds

0.00%

0.00%

0.00%

0.00%

Cash & Net Other Assets 0.84%

0.00%

0.84%

0.05%

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.

3-YEAR RISK/RETURN STATISTICS

Beta Standard Deviation Sharpe Ratio Tracking Error Information Ratio R-Squared

Portfolio 1.07

19.90% 0.10 6.23% -1.39 0.91

Index 1.00 17.74% 0.60

----

4 | For definitions and other important information, please see Definitions and Important Information section of this Fund Review.

QUARTERLY FUND REVIEW: Fidelity? Dividend Growth Fund | AS OF SEPTEMBER 30, 2020

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.

CHARACTERISTICS Earnings-Per-Share Growth measures the growth in reported earnings per share over the specified past time period.

Median Market Cap identifies the median market capitalization of the portfolio or benchmark as determined by the underlying security market caps.

Price-to-Book (P/B) Ratio is the ratio of a company's current share price to reported accumulated profits and capital.

Price/Cash Flow is the ratio of a company's current share price to its trailing 12-months cash flow per share.

Price-to-Earnings (P/E) Ratio (IBES 1-Year Forecast) is the ratio of a company's current share price to Wall Street analysts' estimates of earnings.

Price-to-Earnings (P/E) Ratio Trailing is the ratio of a company's current share price to its trailing 12-months earnings per share.

Return on Equity (ROE) 5-Year Trailing is the ratio of a company's last five years historical profitability to its shareholders' equity. Preferred stock is included as part of each company's net worth.

Sales-Per-Share Growth measures the growth in reported sales over the specified past time period.

Weighted Average Market Cap identifies the market capitalization of the average equity holding as determined by the dollars invested in the portfolio or benchmark.

Weighted Median Market Cap identifies the market capitalization of the median equity holding as determined by the dollars invested in the portfolio or benchmark.

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.

On July 1, 2020, Zach Turner assumed co-management responsibilities for the fund, joining Gordon Scott.

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 ? 2020 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 topperforming 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 sales charges. Multiple share classes of a fund have a common portfolio but impose different expense structures.

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.

5 |

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download