Fidelity Select Technology Portfolio

[Pages:9]PORTFOLIO MANAGER Q&A | AS OF FEBRUARY 28, 2022

Fidelity? Select Technology Portfolio

Key Takeaways

? For the fiscal year ending February 28, 2022, the fund gained 1.91%,

considerably behind the 14.23% advance of the MSCI U.S. IMI Information Technology 25/50 Index, and also trailing the 16.39% rise in the broadly based S&P 500? index.

? U.S. stocks advanced fairly steadily for about the first 10 months of the

period, resulting in further new all-time highs for the broad-market indexes through early in the new year.

? With that said, the stock market sold off in the first two months of

2022. Persistent inflationary pressure, rising U.S. Treasury yields and expectations of the U.S. Federal Reserve reversing its accommodative monetary policy hampered share prices in January, while Russia's increasing deployment of troops along its border with Ukraine and subsequent invasion of that country kept investors on edge in February.

? Versus the MSCI sector index, non-index exposure to solar stocks in

the electrical components & equipment group detracted most, followed by stock selection in application software. To a lesser extent, out-of-index exposure to stocks in the internet & direct market retail and trucking segments hurt the fund's relative performance.

? On the other hand, investment choices in semiconductors notably

contributed to the fund's relative result. Avoiding the lagging electronic equipment & instruments group also added relative value.

? After more than 17 years of service, Brian Lempel retired from Fidelity

on January 18, 2022, at which time Adam Benjamin assumed sole management responsibilities for the fund.

? As of February 28, Adam is somewhat cautious about the first half of

2022, given the Fed's apparent intention to taper its bond-buying program and raise its benchmark interest rate. Looking longer term, he believes the technology sector could continue to play a primary role in disrupting various markets, setting the stage for attractive investment opportunities.

Not FDIC Insured ? May Lose Value ? No Bank Guarantee

MARKET RECAP

The S&P 500? index gained 16.39% for the 12 months ending February 28, 2022. U.S. large-cap equities retreated to begin the new year after posting a strong result in 2021 amid improved economic growth, strong corporate earnings, widespread COVID-19 vaccination, and accommodative fiscal and monetary stimulus. These tailwinds, among others, have supported the historic rebound for U.S. stocks since the early-2020 outbreak and spread of COVID-19. The uptrend was briefly interrupted in September, with the index returning -4.65% as sentiment turned broadly negative due to a host of factors. These included inflationary pressure from surging commodity prices, rising bond yields, supply constraint and disruption, and the delta variant of the coronavirus. Also, the U.S. Federal Reserve signaled it could soon begin to taper the bond purchases it has made since the onset of the pandemic. The S&P 500? reversed course in October, rising 7.01% on earnings strength, followed by a 4.48% advance in December, after studies suggested that the omicron variant resulted in fewer severe COVID-19 cases. Uncertainty then washed over the market as the calendar turned. Stocks slid as investors digested geopolitical unrest, with Russia invading and escalating its attack on Ukraine, and the Fed's accelerated plan to hike interest rates amid soaring inflation. The year-to-date pullback for the index was -8.01%. For the full 12 months, energy stocks rose 55%, driven by surging oil prices, whereas communications services (+1%) notably lagged.

PORTFOLIO MANAGER Q&A | AS OF FEBRUARY 28, 2022

Q&A

Adam Benjamin Portfolio Manager

Fund Facts

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

FSPTX July 14, 1981 $11,052.63

Investment Approach

? Fidelity? Select Technology Portfolio is a sector-based, equity-focused strategy that seeks to outperform its benchmark through active management.

? We believe the value of technology stocks is in large part determined by the companies' future potential to generate earnings and cash flow.

? Our investment framework also focuses on identifying themes that impact the largest end markets, determining potential winners/losers, and how certain companies that are technology disruptors can impact incumbents.

? The technology sector is a very specialized part of the market, and our experience allows for proficiency in specific domains, aiding in recognizing investment opportunities when they arise.

? Through bottom-up research and by leveraging Fidelity's vast expertise ? in addition to insights from industry experts, technologists, suppliers and competitors ? we develop a differentiated view on the fundamentals in seeking to identify companies with compelling risk/reward profiles.

? Sector strategies could be used by investors as alternatives to individual stocks for either tactical- or strategic-allocation purposes.

An interview with Portfolio Manager Adam Benjamin

Q: Adam, how did the fund perform for the fiscal year ending February 28, 2022

The fund gained 1.91% the past 12 months, considerably behind the 14.23% advance of the MSCI U.S. IMI Information Technology 25/50 Index, and also trailing the 16.39% rise in the broadly based S&P 500? index. The fund handily outpaced its peer group average.

Q: How was the investment environment for technology stocks the past 12 months

U.S. stocks advanced fairly steadily for about the first 10 months of the period, resulting in further new all-time highs for the broad-market indexes through early in the new year. Share prices were helped by accommodative monetary policy from the U.S. Federal Reserve, strong earnings growth overall, the continued rollout of COVID-19 vaccines and the passage of landmark legislation aimed at helping to stimulate the economy.

With that said, the stock market sold off in the first two months of 2022. Persistent inflationary pressure, rising U.S. Treasury yields and expectations of the Fed reversing its accommodative stance hampered share prices in January, while Russia's increasing deployment of troops along its border with Ukraine and subsequent invasion of that country kept investors on edge in February.

Against this backdrop, the fund's MSCI sector index was meaningfully ahead of the broader stock market at the end of 2021 but gave up its period-to-date advantage in the new year, amid lagging performance by growth stocks generally. For the 12 months overall, technology was the sixth-best performer among the 11 sectors in the S&P 500? index.

Q: What detracted most from performance versus the MSCI sector index

Non-index exposure to solar stocks in the electrical components & equipment category weighed most on the portfolio's performance. Stock selection in application software also detracted meaningfully. To a lesser extent, outof-index exposure to stocks in the internet & direct market retail and trucking segments worked against the portfolio.

My preference is to be very selective when I venture outside of the MSCI sector index, and I thought there were better

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 FEBRUARY 28, 2022

opportunities elsewhere, so I sold the portfolio's solar stocks, including Sunrun (-63%), by far the fund's largest individual relative detractor. In early November, the installer of residential solar energy systems reported revenue that more than doubled from a year earlier, including the acquisition of Vivint Solar, which closed in October 2020. However, Sunrun's operating loss also more than doubled amid a rise in expenses, and I worried about the potential for persistent inflationary headwinds for companies in this business.

On the other hand, I maintained non-index positions in ridehailing companies Uber Technologies (-31%) and Lyft (-30%), which accounted for most of the fund's trucking exposure and detracted this period. These stocks were among many that suffered as the reopening trade fizzled in the late spring of 2021. In addition to being hurt by lower ride traffic due to the surging delta and omicron variants, the companies were hampered by driver shortages across the country, and Uber's food-delivery operation saw more competition in some markets. Although I lightened up on them, I maintained both positions, believing they were attractively valued and their businesses could improve with further normalization and growth in the U.S. economy.

Q: What other changes of note did you make

Taking over sole portfolio management of the fund on January 18, 2022, I repositioned the fund's five key subsectors as follows. All weightings are approximate. Semiconductors went from 13% of the fund's net assets a year ago to 20% as of February 28. Technology hardware, storage & peripherals rose from 14% to 25% and systems software climbed from 15% to 21%, mainly driven by increased exposure to Apple and Microsoft, respectively. Broad market weakness in January and February provided me with what I thought were attractive opportunities to add to the portfolio's holdings in these two dominant technology companies, especially given valuations that were significantly lower than the expensive choices in application software (13% to 10% weight adjustment) and fintech stocks in the data processing & outsourced services segment (15% to 7%).

Chip stocks I increased exposure to included Marvell Technology, which changed its name from Marvell Technology Group with the company's April 2021 acquisition of Inphi, and NXP Semiconductors. Marvell has exposure to 5G infrastructure and cloud/data centers, as well as a burgeoning auto opportunity. Meanwhile, I liked NXP for the secular-content opportunities I saw in the automotive market, particularly due to electric vehicles and driverassistance systems. Marvell and NXP were the fund's two largest overweightings as of February 28.

I also initiated new positions in Microchip Technology and GlobalFoundries. Microchip has broad-based end market exposure and is expected to benefit from the repricing of microcontrollers via higher average selling prices that I

believe could be sustainable beyond the shortage environment. I thought GlobalFoundries, a semiconductor foundry with facilities in the U.S., Europe and Singapore, was well-positioned to benefit from the global push for domestic production.

Q: What about notable contributors

Investment choices in semiconductors notably contributed to the fund's relative result, as did avoiding the lagging electronic equipment & instruments group.

The fund's top individual relative contributor was Intel (-2%), which we mostly avoided the past 12 months. After a run-up in the first quarter of 2021 amid optimism about the arrival of new CEO Pat Gelsinger, the stock slumped in April following disappointing first-quarter financial results and weak full-year guidance for 2021. Intel has been hampered for some time with production delays and an inability to keep up with rivals in delivering the latest technology. The company also has plans to embark on an expensive, long-term campaign to reestablish the company as a major global chip foundry, and there are doubts that it can succeed in that arena. Then there is the matter of how long PC demand will hold up once the pandemic bump works its way through the system. The fund did not own Intel at period end.

I'll also mention success with an overweighting in onsemi, formerly ON Semiconductor. The stock rose 55% the past 12 months, much of it in the fourth quarter of 2021. Strong customer demand amid an industrywide chip shortage led to increased orders, especially among its automotive and industrial customers that sought the company's power and sensing solutions. In early October, onsemi reported betterthan-expected quarterly revenue and earnings. The company's gross margins continued to improve as well. This period we pared the fund's stake to lock in profits.

Q: What's your outlook as of February 28, Adam

It was admittedly a difficult period for the fund, and I look forward to bringing my years of experience managing technology portfolios to bear on trying to improve the portfolio's performance versus the MSCI sector index.

With that said, I'm somewhat cautious about the first half of 2022, given the Fed's apparent intention to taper its bondbuying program and raise its benchmark interest rate. Longer term, I believe the technology sector could continue to play a primary role in disrupting various markets, setting the stage for attractive investment opportunities.

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 FEBRUARY 28, 2022

Adam Benjamin on the impact of interest rates on tech stocks:

"Since the onset of the pandemic, the performance of many tech stocks has closely tracked the yield of the 10-year U.S. Treasury note. High-growth companies are worth less as interest rates rise, according to discounted cash flow.

"In 2020, we saw riskier, long-duration assets enjoy significant outperformance, as the pandemic pulled forward demand for many tech firms and the 10year yield plunged in the first half of the year. However, with emergency use authorizations for three COVID-19 vaccines in hand late in 2020, we saw a rising 10-year yield and the beginning of a stretch of underperformance for growth stocks that lasted until mid-May of 2021.

"Around this time, the 10-year yield stabilized, and doubt crept in about the economic reacceleration narrative, as the delta variant of the coronavirus began to spread more widely. Large-cap growth stocks took over market leadership once again and held it until late in 2021. At that point, worsening inflation caused the U.S. Federal Reserve to begin signaling its intent to taper its bond-buying program more rapidly than expected and even to raise its benchmark interest rate in 2022. In the first two months of the new year, we saw both long-term and short-term Treasury yields moving up, and that was an inhospitable environment for tech stocks.

"Interest rates aren't the only factor at work here, of course. The major trends we've discussed in past reports, such as 5G, artificial intelligence, cloud computing and others, could drive major opportunities for the better firms in this sector. But I think stock picking will matter more in 2022, and highly valued companies that disappoint will be severely punished, in my opinion, especially if interest rates continue to climb."

LARGEST CONTRIBUTORS VS. BENCHMARK

Holding

Market Segment

Average Relative Relative Contribution Weight (basis points)*

Intel Corp.

Semiconductors

-1.86%

75

onsemi

Semiconductors

1.69%

64

Jabil, Inc.

Electronic

Manufacturing

2.04%

38

Services

NVIDIA Corp.

Semiconductors

0.49%

31

Fidelity National Information Services, Inc.

Data Processing & Outsourced Services

-0.33%

28

* 1 basis point = 0.01%.

LARGEST DETRACTORS VS. BENCHMARK

Holding

Market Segment

Average Relative Relative Contribution Weight (basis points)*

Sunrun, Inc.

Electrical Components & Equipment

2.28%

-258

Array Technologies, Inc.

Electrical Components & Equipment

0.40%

-74

Yext, Inc.

Application Software 0.63%

-66

Cognyte Software Ltd. Application Software 0.54%

-59

Uber Technologies, Inc.

Trucking

1.23%

-57

* 1 basis point = 0.01%.

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 FEBRUARY 28, 2022

ASSET ALLOCATION

Asset Class

Portfolio Weight Index Weight

Relative Weight

Relative Change From Six Months

Ago

Domestic Equities

95.66%

100.00%

-4.34%

1.00%

International Equities

4.03%

0.00%

4.03%

-1.69%

Developed Markets

1.28%

0.00%

1.28%

-1.73%

Emerging Markets

2.75%

0.00%

2.75%

0.04%

Tax-Advantaged Domiciles

0.00%

0.00%

0.00%

0.00%

Bonds

0.03%

0.00%

0.03%

0.03%

Cash & Net Other Assets

0.28%

0.00%

0.28%

0.66%

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 Technology Hardware, Storage & Peripherals Systems Software Semiconductors Application Software Data Processing & Outsourced Services Communications Equipment Internet Services & Infrastructure Semiconductor Equipment Interactive Media & Services Trucking Other

Portfolio Weight 24.59% 20.90% 19.64% 9.92% 7.32% 4.52% 2.76% 1.93% 1.72% 1.45% 4.98%

Index Weight 23.98% 21.98% 17.59% 11.34% 10.60% 3.04% 1.83% 3.12% --4.11%

Relative Weight 0.61% -1.08% 2.05% -1.42% -3.28% 1.48% 0.93% -1.19% 1.72% 1.45% 0.87%

Relative Change From Six Months

Ago 6.43% -1.49% 6.30% -5.52% -1.67% 4.30% 0.68% 0.78% -3.06% 0.08% -5.57%

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 FEBRUARY 28, 2022

10 LARGEST HOLDINGS

Holding

Market Segment

Portfolio Weight

Portfolio Weight Six Months Ago

Apple, Inc.

Technology Hardware, Storage & Peripherals

24.38%

15.57%

Microsoft Corp.

Systems Software

19.02%

20.70%

NVIDIA Corp.

Semiconductors

6.53%

4.77%

Marvell Technology, Inc.

Semiconductors

4.43%

1.49%

Cisco Systems, Inc.

Communications Equipment

4.33%

--

MasterCard, Inc. Class A

Data Processing & Outsourced Services

3.51%

3.28%

, Inc.

Application Software

3.44%

3.31%

NXP Semiconductors NV

Semiconductors

2.89%

1.91%

Twilio, Inc. Class A

Internet Services & Infrastructure

1.87%

0.46%

onsemi

Semiconductors

1.84%

1.73%

10 Largest Holdings as a % of Net Assets

72.26%

59.82%

Total Number of Holdings

91

150

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 February 28, 2022

Cumulative

6 Month

YTD

1 Year

Annualized

3 Year

5 Year

10 Year/ LOF1

Select Technology Portfolio Gross Expense Ratio: 0.69%2

-10.37%

-14.39%

1.91%

30.90%

25.60%

19.96%

S&P 500 Index

-2.62%

-8.01%

16.39%

18.24%

15.17%

14.59%

MSCI US IMI Information Technology 25/50

-4.85%

-11.77%

14.23%

29.32%

25.67%

20.20%

Morningstar Fund Technology

-15.26%

-14.46%

-6.25%

21.59%

20.70%

17.55%

% Rank in Morningstar Category (1% = Best)

--

--

37%

14%

18%

19%

# of Funds in Morningstar Category

--

--

255

216

184

155

1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 07/14/1981. 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 FEBRUARY 28, 2022

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. The technology industries can be significantly affected by obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants, and general economic conditions. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks. The fund may have additional volatility because of its narrow concentration in a specific industry. Non-diversified funds that focus on a relatively small number of stocks tend to be more volatile than diversified funds and the market as a whole.

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.

After more than 17 years of service, Brian Lempel retired from Fidelity on January 18, 2022, at which time Adam Benjamin assumed sole management responsibilities for the fund.

RANKING 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.

% 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.

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. IMI Information Technology 25/50 Index is a modified market-capitalization-weighted index of stocks designed to measure the performance of Information Technology companies in the MSCI U.S. Investable Market 2500 Index. The MSCI U.S. Investable Market 2500 Index is the aggregation of the MSCI U.S. Large Cap 300, Mid Cap 450, and Small Cap 1750 Indices.

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.

7 |

PORTFOLIO MANAGER Q&A | AS OF FEBRUARY 28, 2022

Manager Facts

Adam Benjamin is a research analyst and 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. Mr. Benjamin manages Fidelity Advisor Technology Fund, Fidelity VIP Technology Portfolio, Fidelity Select Semiconductors Portfolio, Fidelity Advisor Semiconductors Fund and the Information Technology sleeves of the Fidelity Institutional Asset Management (FIAM) Large Cap Core and Global Core sector strategies. He also covers the large cap semiconductors industry. Prior to assuming his current roles, Mr. Benjamin was a research analyst responsible for the coverage of the semiconductor, semiconductor capital equipment, and solar end markets. Most recently he served as global technology sector leader within FIAM. Before joining Fidelity in 2011, Mr. Benjamin served as managing director and head of semiconductor equity research at Jefferies & Company, Inc. Previously, he held various roles at SG Cowen, including senior research associate focused on the semiconductor space and vice president in the Technology M&A group. Mr. Benjamin was also an associate in the Corporate Law department of Sullivan & Worcester. He has been following the technology sector for over 18 years. Mr. Benjamin earned his bachelor of arts degree from Cornell University and his juris doctor degree, cum laude, from Suffolk University Law School.

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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