PDF Fidelity Contrafund Commingled Pool

[Pages:7]QUARTERLY REVIEW | AS OF SEPTEMBER 30, 2023

Fidelity? Contrafund? Commingled Pool

Investment Approach

? Fidelity? Contrafund? Commingled Pool is an opportunistic, diversified equity strategy with a large-cap growth bias.

? Philosophically, we believe stock prices follow companies' earnings, and those companies that can deliver durable multiyear earnings growth provide attractive investment opportunities.

? As a result, our investment approach seeks companies we believe are poised for sustained, above-average earnings growth that is not accurately reflected in the stocks' current valuation.

? In particular, we emphasize companies with "best-of-breed" qualities, including those with a strong competitive position, high returns on capital, solid free cash flow generation and management teams that are stewards of shareholder capital.

? We strive to uncover these investment opportunities through in-depth bottom-up, fundamental analysis, working in concert with Fidelity's global research team.

PERFORMANCE SUMMARY

Cumulative

3 Month

YTD

1 Year

Annualized

3 Year

5 Year

10 Year/ LOP1

Fidelity Contrafund Commingled Pool - Class A Gross Expense Ratio: 0.43% 2

-0.30%

23.46% 29.16%

6.53%

10.06% 12.06%

S&P 500 Index

-3.27% 13.07% 21.62% 10.15% 9.92% 11.20%

1 Life of Pool (LOP) if performance is less than 10 years. Pool inception date: 01/17/2014. 2 This expense ratio is from the most recent annual report.

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 holdings. Current performance may be higher or lower than the performance stated. To learn more or to obtain the most recent month-end performance visit or call your plan's toll free number. Cumulative total returns are reported as of the period indicated.

The Fidelity Contrafund Commingled Pool is a collective investment trust under the Fidelity Group Trust for Employee Benefit Plans and is managed by Fidelity Management Trust Company (FMTC). It is not a mutual fund. This information is only intended to provide a brief overview of this investment option, which is available only to certain qualified plans and is not offered to the general public. Investments in the pool are not guaranteed by the manager, the plan sponsor or insured by the FDIC.

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

Manager: William Danoff

Start Date: January 17, 2014

Size (in millions): $41,563.72 The value of the fund's domestic and foreign investments will vary from day to day in response to many factors. Stock values may fluctuate in response to the activities of individual companies, and general market and economic conditions, and the value of an individual security or particular type of security can be more volatile than, or can perform differently from, the market as a whole. Investments in foreign securities involve greater risk than U.S. investments, including increased political and economic risk, as well as exposure to currency fluctuations. You may have a gain or loss when you sell your units.

Not FDIC Insured ? May Lose Value ? No Bank Guarantee

QUARTERLY REVIEW: Fidelity? Contrafund? Commingled Pool | AS OF SEPTEMBER 30, 2023

Performance Review

For the quarter, the pool returned -0.30%, topping the -3.27% result of the benchmark S&P 500? index. In Q3, the year-to-date rally sputtered amid a stalling pattern in disinflationary trends, soaring yields on longer-term government bonds and concern that the U.S. Federal Reserve will keep interest rates higher for longer than expected just months ago. Against this dynamic backdrop, the pool roughly broke even and our focus on fast-growing, "best of breed" firms contributed to performance versus the benchmark.

Aggressive monetary tightening by major central banks, including the Fed, continued amid signs of consistent pressure on core inflation, a closely watched measure that excludes food and energy. Since March 2022, the Fed has hiked its benchmark interest rate 11 times, by 5.25 percentage points while also shrinking its massive asset portfolio. The latest bump came in late July, a fourth consecutive raise of a stepped down 25 basis points.

The S&P 500? rose 3.21% in July, driven by the shares of a narrow set of mega-cap companies concentrated in the tech and communication services sectors, largely due to exuberance related to artificial intelligence. After the Fed's quarter-percentage-point increase brought interest rates to a 22-year high, the central bank said it was too soon to tell whether the hike would conclude its campaign to cool inflation. After the S&P 500? index achieved a year-to-date high on July 31, stocks began a downtrend in August (-1.59%) that continued through September (-4.77%), hampered by tech shares, which lost some of their appeal as yields on U.S. Treasuries and other bonds rose meaningfully. At its September 20 meeting, the Fed voted to hold interest rates steady but declined to say if it would lift rates again. Late in September, uncertainty about the debt ceiling and the potential for a government shutdown further pressured equities, which ended Q3 up 13.07% for the year ? with three months to go.

By sector for the quarter, three defensive-oriented groups lagged most amid inflation and higher interest rates: utilities (-9%), real estate (-9%) and consumer staples (-6%). Tech returned about -6% after leading the way (+46%) in the first half of the year. Industrials, consumer discretionary and materials each returned roughly -5%. In contrast, energy (+12%) rode a rally in oil prices, while communication services gained 3%. Financials (-1%) and health care (-3%) lost ground but topped the broader market.

Both security selection and industry positioning drove the pool's outperformance of the benchmark for the quarter. Our picks were most impactful in the health care and financials sectors, while a sizable overweight in the media & entertainment segment of communication services, led by Meta Platforms (+5%), also notably contributed. In late July, the parent of Facebook and Instagram reported its highest quarterly sales growth since 2021, driven by its digital advertising business. The stock fell in August, as investors considered the company's statement that losses from its metaverse unit would meaningfully increase in 2024. Although Meta is categorized within media & entertainment, we see it as a leading, founder-led tech firm that generates a healthy operating margin and free cash flow. We held steady our commitment to Meta, the pool's top holding and overweight as of September 30.

In financials, outsized exposure to Berkshire Hathaway (+3%) helped most. The insurance-focused conglomerate reported secondquarter financial results that were essentially in line with expectations. Shares rose for most of the quarter before falling in the last two weeks after an analyst downgrade. Founder-led Berkshire was the No. 2 holding and overweight as of quarter end.

Within health care, the pool benefited from an overweight in Regeneron Pharmaceuticals (+15%). The stock rallied after the firm reported revenue and earnings that topped consensus estimates, even though sales of Eylea?, a treatment for wet age-related macular degeneration, slid 7% due to increasing competitive pressure. An overweight in drugmaker Eli Lilly (+15%) was another standout in Q3.

In contrast, the largest individual relative detractor was a sizable commitment to video-streaming service provider Netflix (-14%), as the stock retrenched after hitting its highest mark since 2021 at the end of June. In July, the company reported strong subscriber growth but stagnant revenue for its fiscal second quarter. Net profit was up, aided by a lower expense line after the Hollywood writers' union went on strike on May 2, shutting down new production, and the actors' union followed suit on July 14.

Lastly, the pool's relative result was hampered by our avoidance of drugmakers and strong-performing benchmark components AbbVie (+12%) and Amgen (+22%). We preferred Eli Lilly, Regeneron and Vertex Pharmaceuticals in this space.

LARGEST CONTRIBUTORS VS. BENCHMARK

Holding

Market Segment

Average Relative Relative Contribution Weight (basis points)*

Meta Platforms, Inc. Class Communication

A

Services

8.69%

67

Berkshire Hathaway, Inc. Class A

Financials

6.76%

39

Regeneron Pharmaceuticals, Inc.

Health Care

1.77%

29

Eli Lilly & Co.

Health Care

1.63%

27

Apple, Inc.

Information Technology

-2.61%

23

* 1 basis point = 0.01%.

LARGEST DETRACTORS VS. BENCHMARK

Holding

Market Segment

Average Relative Relative Contribution Weight (basis points)*

Netflix, Inc.

Communication Services

1.21%

-14

AbbVie, Inc.

Health Care

-0.69%

-10

Amgen, Inc.

Health Care

-0.36%

-8

Chevron Corp.

Energy

-0.39%

-5

Comcast Corp. Class A

Communication Services

-0.49%

-5

* 1 basis point = 0.01%.

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

QUARTERLY REVIEW: Fidelity? Contrafund? Commingled Pool | AS OF SEPTEMBER 30, 2023

Outlook and Positioning

As of September 30, financial conditions remain easy, inflation is higher than the Fed's target and labor markets are tight. While the Fed is likely near the end of its rate-hiking cycle, a sharp pivot to easing may prove difficult, in our view.

Since June 2022, year-over-year inflation had been consistently falling, but accelerated in Q3. This tick higher has been consistent with our view that it will be difficult to return to an environment of stable, low core inflation, as seen the past two decades.

A big drop in energy prices helped reduce year-over-year total inflation, but we believe the recent rebound in commodity prices adds risk to the inflation outlook.

Nominal 10-year Treasury yields turned sharply higher the past three months, driven by a substantial rise in real yields ? the inflationadjusted cost of borrowing. Yields reached their highest level since 2007, supported by the Fed's monetary tightening and persistent inflation.

While coincident indicators of employment remain benign, there are some early signs of the labor market cooling as worker sentiment rolled over from peak levels. Tight labor markets amid disinflation have pushed real wage growth positive, supporting consumers.

Many major economies, including the U.S., remain in the late-cycle stage of expansion. Despite rising costs, companies have generally been able to pass along higher prices to maintain profit margins. The consensus outlook for earnings growth has stabilized, and investors expect profit growth to rebound and increase by double digits in 2024.

For many years, we have followed the investing tenet that a stock's price follows the actual and expected earnings per share of the underlying company over time. So, as the earnings outlook for the pool's holdings changed the past three months, we made only modest adjustments to the portfolio.

Entering the final quarter of 2023, the pool's position in communication services, which includes sizable commitments to Meta, Google parent Alphabet and Netflix, stood at 18% and was the top sector overweight by a wide margin.

The pool's allocation to the financials sector stood at 15%, the second-largest overweight and essentially unchanged from midyear. Noteworthy holdings from the sector include Berkshire Hathaway and credit-card processor Visa.

Tech represented roughly 24% of assets at the end of September, the largest sector allocation and a meaningful underweight. Management teams at the largest tech companies responded to slowing revenue growth in the second half of 2022 by reducing operating expenses this year. Demand was a bit better than feared, so the combination of slightly improved sales growth and good expense control produced better-than-expected earnings growth for most companies in the sector. In addition, the emergence of generative AI, especially ChatGPT, ignited investor enthusiasm for the sector and helped stock valuations so far this year.

As of September 30, the U.S. is in late-cycle expansion, supported by a solid consumer backdrop. This late-cycle environment is a mixed bag, with economic and corporate activity solid, but policy and inflation trends more uncertain. Against this backdrop, the pool is concentrated in what we consider "best of breed" companies with a trustworthy and proven management team, a high free-cash-flow margin, and a decent growth outlook.

MARKET-SEGMENT DIVERSIFICATION

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

Index Pool Weight Weight

Relative Weight

Relative Change From Prior Quarter

23.55% 27.46% -3.91% -0.58%

17.98% 14.90% 13.11%

8.87% 12.81% 13.36%

9.11% 2.09% -0.25%

-0.09% -0.42% -0.22%

9.33% 6.20% 4.68% 2.69% 2.58% 0.37% 0.00% 0.00%

10.67% 8.30% 4.72% 2.45% 6.57% 2.41% 2.37% 0.00%

-1.34% -2.10% -0.04% 0.24% -3.99% -2.04% -2.37% 0.00%

-0.21% 0.42% -0.21% -0.16% -0.02% 0.27% 0.09% 0.00%

CHARACTERISTICS

Valuation Price/Earnings Trailing Price/Earnings (IBES 1-Year Forecast) Price/Book Price/Cash Flow Return on Equity (5-Year Trailing) 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 Weighted Average Market Cap ($ Billions) Weighted Median Market Cap ($ Billions) Median Market Cap ($ Billions)

Pool

20.9x 20.4x 4.2x 16.7x 18.4%

12.5% 24.7% 21.2% 22.9%

695.9 302.5 40.0

Index

20.8x 18.1x 4.1x 15.3x 18.3%

12.2% -3.6% 12.6% 19.0%

625.0 183.2 30.0

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

QUARTERLY REVIEW: Fidelity? Contrafund? Commingled Pool | AS OF SEPTEMBER 30, 2023

LARGEST OVERWEIGHTS BY HOLDING

Holding

Market Segment

Meta Platforms, Inc. Class A Communication Services

Berkshire Hathaway, Inc. Class A

Financials

UnitedHealth Group, Inc.

Health Care

Regeneron Pharmaceuticals, Inc.

Health Care

Eli Lilly & Co.

Health Care

Relative Weight 8.76%

6.70% 2.37% 1.90% 1.71%

LARGEST UNDERWEIGHTS BY HOLDING

Holding Apple, Inc. Tesla, Inc. Procter & Gamble Co. Johnson & Johnson Broadcom, Inc.

Market Segment Information Technology Consumer Discretionary Consumer Staples Health Care Information Technology

Relative Weight

-2.64% -1.86% -0.96% -0.95% -0.74%

10 LARGEST HOLDINGS

Holding Meta Platforms, Inc. Class A Berkshire Hathaway, Inc. Class A Microsoft Corp. , Inc. Apple, Inc. NVIDIA Corp. UnitedHealth Group, Inc. Eli Lilly & Co. Alphabet, Inc. Class A Alphabet, Inc. Class C 10 Largest Holdings as a % of Net Assets Total Number of Holdings

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

50.38%

351

The 10 largest holdings are as of the end of the reporting period, and may not be representative of the pool's current or future investments. Holdings do not include money market investments.

ASSET ALLOCATION

Asset Class

Index Pool Weight Weight

Relative Weight

Relative Change From Prior Quarter

Domestic Equities

90.05% 100.00% -9.95% -1.24%

International Equities 5.33%

0.00%

5.33%

0.10%

Developed Markets

4.49%

0.00%

4.49%

0.12%

Emerging Markets 0.84%

0.00%

0.84%

-0.02%

Tax-Advantaged Domiciles

0.00%

0.00%

0.00%

0.00%

Bonds

0.01%

0.00%

0.01%

0.00%

Cash & Net Other Assets

4.61%

0.00%

4.61%

1.14%

Net Other Assets can include pool receivables, pool payables, and offsets to other derivative positions, as well as certain assets that do not fall into any of the pool composition categories. Depending on the extent to which the pool invests in derivatives and the number of positions that are held for future settlement, Net Other Assets can be a negative number.

3-YEAR RISK/RETURN STATISTICS

Beta Standard Deviation Sharpe Ratio Tracking Error Information Ratio R-Squared 3 years of data required.

Pool 0.98 18.27% 0.26 5.18% -0.70 0.92

Index 1.00 17.85% 0.47

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

QUARTERLY REVIEW: Fidelity? Contrafund? Commingled Pool | AS OF SEPTEMBER 30, 2023

Definitions and Important Information

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.

CHARACTERISTICS Earnings-Per-Share Growth Trailing measures the growth in reported earnings per share over trailing one- and five-year periods.

Earnings-Per-Share Growth (IBES 1-Year Forecast) measures the growth in reported earnings per share as estimated by Wall Street analysts.

Median Market Cap identifies the median market capitalization of the pool 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 pool or benchmark.

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

IMPORTANT POOL INFORMATION

Relative positioning data presented in this commentary is based on the pool'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.

MARKET-SEGMENT WEIGHTS Market-segment weights illustrate examples of sectors or industries in which the pool may invest, and may not be representative of the pool's current or future investments. They should not be construed or used as a recommendation for any sector or industry.

RELATIVE WEIGHTS Relative weights represents the % of pool 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 pool's benchmark is listed immediately under the pool name in the Performance Summary.

5 |

Fidelit y Invest ment s GIPS? Composit e Report

CONTRAFUND COM POSITE (USD) VERSUS S& P 500 INDEX

Period

Composite Return (Gross%) Composite Return (Net%) Benchmark Return (%) Number of Portfolios Total Composite Assets End of Period ($M ) Composite 3 Year Standard Deviat ion (Gross%) Benchmark 3 Year Standard Deviat ion (%) Asset Weighted Standard Deviation (Gross%) Total Firm Assets ($B)

YTD 2023

24.86 24.18 13.07

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