Fidelity Select Consumer Finance Portfolio

[Pages:9]PORTFOLIO MANAGER Q&A | AS OF FEBRUARY 28, 2023

Fidelity? Select FinTech Portfolio

Key Takeaways

? For the fiscal year ending February 28, 2023, the fund returned

-14.51%, outpacing the -15.60% result of the FactSet Financial Technologies Linked Index, but trailing the -7.69% return of the broadbased S&P 500? index.

? Fintech stocks struggled the past 12 months, as investors navigated

several challenges in the global economy and financial markets. According to Portfolio Manager Ruth Nagle, record-high inflation and rapidly rising interest rates led to a broad sell-off of high-growth equities, including fintech stocks, stoking recession fears and sending stocks into bear market territory.

? Stock selection in the data processing & outsourced services and

consumer finance segments meaningfully contributed to the fund's performance versus the FactSet industry index.

? Larger-than-index stakes in digital payment processing firms

Mastercard (-1%) and Visa (+3%) - the fund's two largest holdings as of February 28 - bolstered performance relative to the industry index.

? Conversely, an overweight in application software detracted from the

fund's relative result, as did an out-of-index position in regional banks and an underweight in asset management & custody banks.

? An underweight in payment processor Fiserv (+18%) hurt the fund's

relative performance more than any other individual investment.

? As of February 28, Ruth believes fintech companies are poised to

continue growing at a steady pace because the industry's underlying fundamentals remain solid, especially for fintech companies that make it easier to move money around. She remains enthusiastic about the growth potential of many disruptive fintech companies that are changing how consumers and businesses manage their finances, while opening fast-growing markets and driving market-share shifts.

Not FDIC Insured ? May Lose Value ? No Bank Guarantee

MARKET RECAP

U.S. equities returned -7.69% for the 12 months ending February 28, 2023, according to the S&P 500? index. The new year began with an encouraging upturn in January (+6.28%), but stocks lost momentum in February (-2.44%) amid higher-than-expected inflation and strong jobs data. Investors took these as signs that the economy continued to run hot, even after a year of historic policy adjustment by the Federal Reserve aimed at cooling economic growth. Record inflation in 2022 prompted the Fed to aggressively tighten monetary policy, and market interest rates eclipsed their highest level in a decade, stoking recession fears and sending stocks into bear market territory. Since March 2022, the central bank has hiked its benchmark rate eight times, by 4.5 percentage points ? the fastest-ever pace of monetary tightening ? while also shrinking its massive asset portfolio. The latest bump came on February 2, along with a signal that the Fed plans to lift rates in March while it considers whether and when to pause increases. Against this dynamic backdrop, stocks struggled to gain traction until a strong rally ignited heading into the summer. But in September, the index returned -9.21%, one of its worst monthly results ever, before advancing 7.56% in Q4, as risky assets regained favor. For the full 12 months, value stocks handily outpaced growth. The headwind for the latter was most pronounced in the growth-oriented communication services (-25%) and consumer discretionary (-18%) sectors. In sharp contrast, energy gained 24%.

PORTFOLIO MANAGER Q&A | AS OF FEBRUARY 28, 2023

Q&A

Ruth Nagle Portfolio Manager

Fund Facts

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

FSVLX December 16, 1985 $107.60

Investment Approach

? Fidelity? Select FinTech Portfolio is an industry-based, equity-focused strategy that seeks to outperform its benchmark through active management.

? Our investment approach relies on in-depth company and industry research to identify stocks that we consider mispriced. We believe mispricing can occur because the market underappreciates the quality of a business, the duration of growth, or the way that a change in a business or industry can lead to a change in business fundamentals.

? The portfolio skews toward companies with strong secular tailwinds and deep competitive moats that we believe have the ability to compound earnings over time.

? We also look to take advantage of cyclical inflection points caused by economic cycles, as well as stockspecific situations in which the earnings power is misunderstood by the market.

? We leverage Fidelity's deep and experienced financials and technology teams to generate ideas and monitor risks and opportunities for the fund.

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

An interview with Portfolio Manager Ruth Nagle

Q: Ruth, how did the fund perform for the fiscal year ending February 28, 2023

The fund returned -14.51% for the 12 months, outperforming the -15.60% result of the FactSet Financial Technologies Linked Index, but trailing the -7.69% return of the broadbased S&P 500? index. The fund lagged its peer group average, which tracks the broader financials sector.

Q: What dynamics drove the market backdrop for fintech stocks the past 12 months

Fintech stocks struggled, as investors navigated several challenges in the global economy and financial markets. Record-high inflation in 2022 prompted the Fed to aggressively tighten monetary policy, and market interest rates eclipsed their highest level in a decade, stoking recession fears and sending stocks into bear market territory. Since March 2022, the central bank has hiked its benchmark rate eight times, by 4.5 percentage points ? the fastest-ever pace of monetary tightening ? while also shrinking its massive asset portfolio. The latest bump came on February 2, along with a signal that the Fed plans to lift rates in March while it considers whether and when to pause increases.

Coming into the 12-month period, valuations for fintech stocks were high, especially coming off the notable growth during the pandemic. Structural growth for many fintech companies continued this reporting period, but, due to high inflation and rising interest rates, many investors were less willing to pay those valuations for these stocks.

Q: In this environment, did the fund perform in line with your expectations

Yes, it did. I tend to emphasize companies that I call "compounders" - businesses that I think can augment their earnings for years to come - while selectively owning shares of other, more-opportunistic companies that may have highgrowth potential, but may not be currently profitable. I place particular importance on companies with competitive moats and growth tailwinds that can drive a solid, compounded return over a longer-term horizon. This period, I maintained a bigger emphasis on compounders over opportunistic companies, which aided the fund's relative performance.

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, 2023

Q: What specific factors helped the fund outperform the industry index

Stock selection in the data processing & outsourced services and consumer finance segments meaningfully contributed. In the former category, larger-than-index stakes in Mastercard (-1%) and Visa (+3%) - the fund's two largest holdings as of February 28 - bolstered our relative result. These companies are enablers of fintech companies, with most fintech start-up firms relying on the networks of Mastercard and Visa to process their payments. Although I trimmed our positions in both Mastercard and Visa the past 12 months to harvest gains for the portfolio, I consider them to be core holdings because they are not only compounders but innovators within the fintech investment arena. I believe that fintech enablers, including these companies, can continue to benefit from the long-term growth of digital finance across the globe.

Elsewhere, underweighting and ultimately selling the fund's position in Upstart Holdings (-85%) also helped. The company developed a new artificial-intelligence-based model for credit-risk assessment. While I liked the company's growth trajectory and potentially disruptive business, I believed it would take longer than anticipated for Upstart to become profitable, given its challenges to prove its value and overcome incumbents in this area. As a result, I chose to focus on investing in other companies that are on a path to deliver compelling returns.

Lastly, I'll mention payment processor Fidelity National Information Services (-43%). Our Fidelity analyst team was diligent in researching the details of the company and developed concerns, especially given its challenges integrating its 2019 acquisition of Worldpay. In February, FNIS said it would be spinning off this recently acquired business, which could potentially weaken sales and earnings across the board. Given our negative view of the firm's outlook, I sold down our position to invest in other ideas.

Q: Which investments notably hurt

The largest detractor from performance versus the industry index was an overweight in application software, though favorable stock selection countered that negative impact. A non-index position in regional banks and an underweight in asset management & custody banks modestly hurt the fund's relative performance.

Underweight exposure to payment processor Fiserv (+18%) detracted more than any other individual investment. Fiserv processes about 12,000 payments a second for roughly 1.4 billion customer accounts, making it a force in the fintech space. As I took profits from the fund's positions in Visa and Mastercard, I increased the fund's stake in Fiserv, and it was the fifth-largest holding at period end.

processor, also detracted on a relative basis. Much of Wex's revenue comes from processing fuel transactions for corporate fleets of vehicles. As such, strong gas prices stoked Wex's revenue and its stock price this period. I believed Wex's valuation was high and chose to own competitor Fleetcor Technologies, a position I inherited from the previous portfolio manager of the fund, and whose valuation appeared more reasonable in my opinion. Fleetcor was the fund's 12th-largest holding as of February 28.

Elsewhere, a non-index position in payment processor Nuvei (-45%) hurt. In November, cryptocurrency exchange FTX collapsed and filed for bankruptcy. This sudden failure shook the cryptocurrency market, causing billions of dollars in losses. Nuvei processes crypto transactions, and concerned investors sold off shares of Nuvei due to worries about the company's exposure to this volatile market. At period end, I maintained conviction in the company and its longer-term outlook, and the fund held a small position.

Q: Any final thoughts for shareholders, Ruth

It's been a tough year for fintech stocks, as the industry has had to contend with several headwinds, including high inflation and rising interest rates. Now that interest rates are higher and capital is more expensive, these stocks have largely de-rated, with many falling from expensive to morereasonable valuations. In this environment, many companies are taking a disciplined approach to growth and spending. For example, some of the market leaders, including digital payments platform Block, a fund holding formerly known as Square, are focused on reducing costs and delivering a profit. While these shifts may not immediately impact their balance sheet, over time I believe they will benefit. In addition, they are leading the way for other fintech firms.

Looking ahead, I believe fintech companies are poised to continue growing at a steady pace, as the industry's underlying fundamentals remain solid, especially for fintech companies that make it easier to move money. The integration of financial services with technology is changing how consumers and businesses manage their finances, opening fast-growing markets and driving market-share shifts. In that regard, I believe there are opportunities to invest in fintech firms that are disrupting the status quo in global financial services. I also plan to favor higher-quality fintech firms, meaning those with growing profitability and market leadership, the ability to compound returns or grow earnings faster than peers, and a reasonable valuation. I expect to focus on companies I think are reasonably valued relative to their revenue- and earnings-growth potential, and have the ability to take market share from competitors.

Avoiding index component Wex (+14%), a payment

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, 2023

Portfolio Manager Ruth Nagle on opportunities in B2B payments:

"Within the fintech investment universe, there are many quick-growing markets for companies to expand into. One area of focus is payments between businesses, also known as B2B payments.

"Today, there are many inefficiencies in how businesses pay their bills, which is most often with paper checks being mailed or personally delivered. However, in the past several years, we've seen the massive adoption of digital business-to-consumer payments, especially as e-commerce became ubiquitous during the pandemic. As businesses increasingly shift to providing their services and products online, B2B payments are now also steadily moving toward digital in the same manner, providing fintechs focusing on these transactions with a long runway for growth.

"The shift to digital payments between businesses is happening across nearly every industry, from manufacturing and professional services to finance and insurance, as well as rental and leasing, among many others. Each industry has specific needs for their transactions, which gives fintechs countless opportunities to develop products and services that can cater to these businesses and industries.

"For example, Bill Holdings, the parent of , provides a cloud-based software that simplifies, digitizes, and automates complex back-office financial operations for small and mid-sized businesses. 's services help its customers automatically and succinctly manage their accounts payable and receivable, as well as their corporate card spending, allowing the companies to manage their budgets and cash flow on a real-time basis. Both Visa and Mastercard are expanding into the B2B payments arena. Visa's B2B Connect and Mastercard's HubTM and TrackTM business payment systems are enabling businesses to securely exchange data and payments across businesses globally.

"The addressable market for B2B digital payments is estimated to be $23 trillion, and it is growing rapidly. Companies like Bill Holdings, Visa and Mastercard ? all fund holdings as of February 28 ? are just a few that I believe are poised to tap into that growth potential with their B2B payment solutions."

LARGEST CONTRIBUTORS VS. BENCHMARK

Holding

Market Segment

Average Relative Relative Contribution Weight (basis points)*

MasterCard, Inc. Class A

Transaction & Payment Processing Services

4.61%

65

Upstart Holdings, Inc. Consumer Finance -0.27%

62

Fidelity National

Transaction &

Information Services, Payment Processing -0.79%

43

Inc.

Services

Transaction &

Visa, Inc. Class A

Payment Processing 2.37%

23

Services

Black Knight, Inc.

Application Software 1.34%

22

* 1 basis point = 0.01%.

LARGEST DETRACTORS VS. BENCHMARK

Holding

Market Segment

Average Relative Relative Contribution Weight (basis points)*

Fiserv, Inc.

Transaction &

Payment Processing -0.67%

-34

Services

WEX, Inc.

Transaction &

Payment Processing -0.84%

-22

Services

Transaction &

Nuvei Corp. (Canada) Payment Processing 0.49%

-20

Services

Dlocal Ltd.

Transaction &

Payment Processing 0.21%

-18

Services

Avalara, Inc.

Application Software -0.07%

-17

* 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, 2023

ASSET ALLOCATION

Asset Class

Portfolio Weight Index Weight

Relative Weight

Relative Change From Six Months

Ago

Domestic Equities

90.01%

90.59%

-0.58%

-1.80%

International Equities

9.58%

9.41%

0.17%

1.74%

Developed Markets

8.66%

8.79%

-0.13%

2.02%

Emerging Markets

0.92%

0.62%

0.30%

-0.28%

Tax-Advantaged Domiciles

0.00%

0.00%

0.00%

0.00%

Bonds

0.00%

0.00%

0.00%

0.00%

Cash & Net Other Assets

0.41%

0.00%

0.41%

0.06%

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 Data Processing & Outsourced Services Consumer Finance Application Software Diversified Banks

Portfolio Weight 63.94% 18.59% 16.54% 0.52%

Index Weight 60.48% 21.71% 16.90% --

Relative Weight 3.46% -3.12% -0.36% 0.52%

Relative Change From Six Months

Ago

-0.93%

0.91%

0.27%

-0.01%

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, 2023

10 LARGEST HOLDINGS

Holding

Market Segment

Portfolio Weight

Portfolio Weight Six Months Ago

Visa, Inc. Class A

Transaction & Payment Processing Services

14.44%

12.26%

MasterCard, Inc. Class A

Transaction & Payment Processing Services

14.23%

13.65%

Intuit, Inc.

Application Software

10.81%

12.32%

American Express Co.

Consumer Finance

7.97%

5.31%

Fiserv, Inc.

Transaction & Payment Processing Services

5.02%

4.95%

Block, Inc. Class A

Transaction & Payment Processing Services

4.92%

3.44%

Discover Financial Services

Consumer Finance

4.86%

4.71%

Capital One Financial Corp.

Consumer Finance

4.68%

4.44%

Global Payments, Inc.

Transaction & Payment Processing Services

4.25%

4.94%

Adyen BV

Transaction & Payment Processing Services

4.24%

4.52%

10 Largest Holdings as a % of Net Assets

75.42%

72.97%

Total Number of Holdings

32

32

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, 2023

Cumulative

6 Month

YTD

1 Year

Annualized

3 Year

5 Year

10 Year/ LOF1

Select FinTech Portfolio Gross Expense Ratio: 0.81%2

0.15%

7.69%

-14.51%

1.14%

2.54%

7.49%

S&P 500 Index

1.26%

3.69%

-7.69%

12.15%

9.82%

12.25%

FactSet Financial Technologies Linked Index

0.81%

8.31%

-15.60%

0.09%

2.00%

6.33%

Morningstar Fund Financial

7.37%

6.48%

-6.95%

11.12%

5.24%

9.48%

% Rank in Morningstar Category (1% = Best)

--

--

86%

98%

82%

76%

# of Funds in Morningstar Category

--

--

99

93

88

74

1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 12/16/1985. 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, 2023

Definitions and Important Information

sector or industry.

Information provided in, and presentation of, this document are for informational and educational purposes only and are not a recommendation to take any particular action, or any action at all, nor an offer or solicitation to buy or sell any securities or services presented. It is not investment advice. Fidelity does not provide legal or tax advice.

Before making any investment decisions, you should consult with your own professional advisers and take into account all of the particular facts and circumstances of your individual situation. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in these materials because they have a financial interest in them, 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. Sector funds can be more volatile because of their narrow concentration in a specific industry. Foreign securities are subject to interest-rate, currencyexchange-rate, economic, and political risks. The home finance industry can be significantly affected by regulatory changes, interest rate movements, home mortgage demand, refinancing activity, and residential delinquency trends. The fund may have additional volatility because it can invest a significant portion of assets in securities of a small number of individual issuers.

RANKING INFORMATION

? 2023 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.

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.

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 Index 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.

FactSet Financial Technologies Linked Index is a float-adjusted, modified market capitalization weighted index rebalanced on a quarterly basis designed to provide an equity benchmark to track the performance of companies engaged in leveraging technology to deliver financial products and services, primarily in the areas of digital payment processing, enterprise data provider, enterprise financial management, insurance/real estate software, and trading solutions. Index returns shown for periods prior to October 23, 2021 are returns Of the S&P Consumer Finance Index.

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

7 |

PORTFOLIO MANAGER Q&A | AS OF FEBRUARY 28, 2023

Manager Facts

Ruth Nagle is a research analyst 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, Ms. Nagle is responsible for the research and analysis of the North American banks and payment companies. She also manages the Select FinTech Portfolio. Before joining Fidelity in 2019, Ms. Nagle was a managing director at BlackRock, where she was a financial analyst and portfolio manager from 2013 to 2019. Previously, she was a managing director at Wellington Management from 2006 to 2013, a managing director at Deutsche Bank from 2000 to 2005, and a vice president at Federated Investors from 1998 to 2000. She has been in the financial industry since 1998. Ms. Nagle earned her bachelor of arts degree in economics from Smith College, her master of business administration degree from Case Western Reserve University, and her master in management degree from Arizona State University Thunderbird School of Global Management. She is also a CFA? charterholder.

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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