Fidelity Growth Strategies Fund
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PORTFOLIO MANAGER Q&A | AS OF MAY 31, 2021
Fidelity® Growth Strategies
Fund
Key Takeaways MARKET RECAP
• For the semiannual reporting period ending May 31, 2021, the fund's The S&P 500® index gained 16.95% for
Retail Class shares advanced 9.86%, outpacing the 8.38% gain of the the six months ending May 31, 2021, with
benchmark Russell Midcap® Growth Index. U.S. equities rising on the prospect of a
surge in economic growth amid
widespread COVID-19 vaccinations, fiscal
• Mid-cap growth stocks lagged their value counterparts the past six stimulus and fresh spending programs.
months, as investors shifted their focus to securities that had been the Post-election momentum bolstered
hardest hit amid the pandemic. stocks into mid-December, with the
authorization of two COVID-19 vaccines
• Versus the benchmark, Portfolio Manager Jean Park's security and prospects for additional government
selection added the most value, particularly in the information stimulus. As the calendar turned,
technology and health care sectors. investors saw reasons to be hopeful. The
rollout of two COVID-19 vaccines was
• On an individual basis, overweight stakes in the shares of IT- underway, the U.S. Federal Reserve
outsourcing firm EPAM Systems (+48%) and cybersecurity firm Fortinet pledged to hold interest rates near zero
(+77%) contributed most. until the economy recovered, and the
federal government would deploy
trillions of dollars in aid to boost
• Conversely, picks and sector positioning among real estate and
consumers and the economy. Many
energy stocks hampered the fund's relative result. Specifically, a
economists raised their expectations for a
larger-than-benchmark position in software-as-a-service company
powerful recovery, as opposed to a
Trade Desk (-35%) detracted the most on an individual basis. sluggish rebound. Choppy trading in a
flattish May reflected concerns about
• As of May 31, Jean still believes focusing on companies that can grow inflation and jobs. This backdrop fueled a
revenues with healthy margins, faster than the market, offer the best powerful market rotation, with small-cap
opportunities for investors, even if value stocks continue to dominate value stocks usurping long-standing
equity market performance in the short term. leadership from large growth shares. As
part of the "reopening" trade, investors
• As such, Jean remains focused on owning high-quality companies moved out of tech-driven mega-caps that
with solid free-cash-flow-yield characteristics and reasonable had thrived due to the work-from-home
valuations. trend in favor of cheap smaller
companies they believed stood to benefit
from a broad cyclical recovery. Reflecting
this shift, the energy sector gained about
45% for the six months, boosted by a
sharp rally in the price of oil. Financials
(+38%) rode strength among banks
(+48%). Conversely, notable "laggards"
included the defensive utilities (+5%) and
consumer staples (+7%) sectors.
Not FDIC Insured • May Lose Value • No Bank GuaranteePORTFOLIO MANAGER Q&A | AS OF MAY 31, 2021
Q&A
An interview with Portfolio Manager
Jean Park
Q: Jean, how did the fund perform for the six
Jean Park
Portfolio Manager months ending May 31, 2021
The fund's Retail Class shares gained 9.86%, outpacing the
Fund Facts 8.38% advance of the benchmark Russell Midcap® Growth
Index. However, the fund trailed its peer group average.
Trading Symbol: FDEGX
Looking slightly longer term, the fund gained 32.01% for the
Start Date: December 28, 1990 trailing 12 months, lagging both the benchmark and peer
group average.
Size (in millions): $3,240.74
Q: How would you describe the investment
environment the past six months
This period started with a swirl of excitement about COVID-
Investment Approach 19 vaccines. We started to see some promising data about
• Fidelity® Growth Strategies Fund is a diversified an effective vaccine against the virus in early November, and
domestic equity strategy with a mid-cap growth when one was approved for emergency use in December,
orientation. the markets were quick to price in an economic recovery.
• Our guiding philosophy is that stocks of high-quality As equities rallied, we then saw a mean reversion away from
companies that exhibit persistent growth and generate growth stocks to value-oriented securities. Until about mid-
positive free cash flow, when purchased at reasonable summer 2020, growth stocks had long outperformed their
prices, can outperform the market over time. value counterparts. Looking back to the brief March 2020
pandemic-related downturn, value stocks had been hit the
• We believe differences often exist between a stock's
hardest, so as the equity market continued its robust
price and its true value because the market incorrectly
recovery into the start of this reporting period, these were
forecasts the sustainability and/or magnitude of future
the stocks that garnered the most attention among investors.
growth.
Often perceived as riskier assets, many of these value plays
• We look to uncover these opportunities through in- were non-free-cash-flow (FCF) earners and high-flyers that
depth bottom-up, fundamental analysis, working in emerged as some the best performers for the six months.
concert with Fidelity's global research team.
Q: Given this environment, how did you
manage the fund
I stayed true to my investment strategy, with an emphasis on
higher-quality companies in an effort to generate
outperformance, while also managing downside risk. As
growthier stocks fell behind value-oriented areas of the
market, I was pleased to see the fund outpace its benchmark,
thanks mainly to my higher-quality focus.
When evaluating stocks within the portfolio's predominantly
mid-cap universe, I first screen for companies generating
positive FCF, because I believe such stocks, if purchased at a
reasonable price, have a good chance of outperforming the
broader market over time.
Next, I sort stocks by relative valuation based on their price-
to-earnings (P/E) multiples versus the market average.
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 MAY 31, 2021
Because investors sometimes incorrectly forecast the grown its revenue double-digits, as demand for its products
sustainability of a company's growth or the magnitude of and services continued to increase rapidly.
that growth, finding the difference between a stock's current
price and what I calculate to be its intrinsic, or real, value is Q: What detracted on a relative basis
what I see as the key to identifying opportunities.
Picks and sector positioning among real estate and energy
Lastly, I rely heavily on fundamental analysis to differentiate stocks proved to be a detractor this period.
between market expectations and my view of a company's
real underlying growth potential. It's this sweet spot, this In real estate specifically, avoiding benchmark component
price/value mismatch, where I find opportunities in search of Simon Property Group (+60%), a real-estate investment trust
greater-than-benchmark returns. (REIT) that owns malls, weighed on the portfolio's relative
return. When the pandemic hit last year, foot traffic at brick-
and-mortar stores ground to a halt, essentially shutting down
Q: What factors contributed to the fund's
malls, so as a result, Simon's revenue streams immediately
relative result suffered. The stock fell last March and did not begin to
Security selection helped most, particularly among recover until November, when we had the first glimmer of
information technology and health care stocks. Additionally, hope about a COVID-19 vaccine. This was one of those value
while the higher-quality firms that I emphasize generally stocks that was hit hard early in the pandemic, but then
were not the fund's best performers when compared to the raced to being one of the benchmark's best performers this
broader market the past six months, avoiding some of the period. That said, it did not fit my investment criteria.
worst-performing benchmark components proved to be Elsewhere, the fund's long-term and outsized position in
important. Trade Desk (-35%) was the largest detractor. This software-
For example, avoiding benchmark component Splunk (-41%), as-a-service company's data-driven services effectively help
a data-management software company, added notable companies buy digital advertising across the internet. With
relative value. The company posted a negative FCF yield and positive FCF yield, a strong stable of clients, including
didn't meet my investment criteria, so we didn't own it. Procter & Gamble and Colgate, and founder and CEO Jeff
Shares of Splunk declined because the company struggled to Green at the helm, Trade Desk met several of my investment
transition its business model to the cloud. criteria. That said, there was some investor concern about a
recent change in Apple's operating system that would make
Meanwhile, overweight stakes in the shares of IT companies it harder for application developers to access customer data,
EPAM Systems and Fortinet propelled the fund's relative which would impact Trade Desk's technology. Still, I
result this period. remained confident the firm would be able to develop
IT-outsourcing firm EPAM Systems gained 48%, bolstered by strategies to overcome this recent hurdle, and subsequently
its strong growth rate and positive net-cash balance sheet. held on to the position.
This founder-led business is U.S.-based and has a solid
foothold in employing workers in Eastern European countries Q: Any final thoughts for shareholders as of
such as the Czech Republic. With only a limited number of May 31, Jean
work visas available for highly educated workers to come to
the U.S., EPAM's global employee network proved to be an While value stocks may very well continue to dominate
asset, especially as the work environment shifted to remote equity market performance for the next 12 to 18 months, as
and demand for the company's services increased. well as show some relative earnings growth, I don't believe
that these are the types of investments that will outperform
Fortinet, which makes hardware to improve cybersecurity,
in the longer term.
rose 77% for the six months. Since I first established the
fund's position in 2018, the firm has doubled its FCF. I still believe that focusing on companies that can grow
Fortinet's revenue continued to increase, as the work-from- revenues with healthy margins, faster than the market, offer
trend took off and enterprises looked to bolster their security the best opportunities for investors.
infrastructure. The company also expanded into new growth As such, I remain focused on emphasizing high-quality
areas and improved its market share in its existing lines of companies with solid FCF yields and long-term growth
business. Though I remain confident in Fortinet's outlook, I potential, as well as reasonable valuations relative to other
did trim the fund's position to take profits. opportunities I see in the marketplace. ■
Turning to health care, Charles River Laboratories advanced
44% the past six months. The company specializes in
developing products that help pharmaceutical and
biotechnology firms research, develop and manufacture new
drug treatments. For the past five years, Charles River has
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 MAY 31, 2021
LARGEST CONTRIBUTORS VS. BENCHMARK
Average Relative
Jean Park on focusing on long-term Holding Market Segment
Relative Contribution
Weight (basis points)*
revenue growers: Information
EPAM Systems, Inc. 1.52% 55
Technology
"For the past year, I have spent time looking back Information
Fortinet, Inc. 0.99% 54
over the history of the equity market's performance Technology
to identify trends that could help me better position Information
Splunk, Inc. -0.70% 50
the fund today. Technology
Charles River
"One such example is the value of owning shares of Laboratories Health Care 1.50% 47
best-of-breed companies that are growing both International, Inc.
revenue and earnings-per-share (EPS) at rates Information
Lam Research Corp. 1.25% 41
higher than the benchmark. Since the inception of Technology
the stock market in 1927, these are the stocks that * 1 basis point = 0.01%.
have proven to outpace the benchmark, offering
great opportunities for long-term investors.
"Using this information as a lens to view the fund's LARGEST DETRACTORS VS. BENCHMARK
investment universe through, I have been taking a
closer look at existing and potential holdings Average Relative
beyond their 2021 and 2022 earnings estimates, to Relative Contribution
try to forecast their longer-term growth. Holding Market Segment Weight (basis points)*
Information
"One of the portfolio's newer positions that The Trade Desk, Inc. 1.15% -62
Technology
emerged from this screen is IDEXX Laboratories, Simon Property
Real Estate -0.79% -33
which specializes in diagnostic testing for animal Group, Inc.
health. ResMed, Inc. Health Care 1.88% -25
"Amid the pandemic, as people locked down to Information
Enphase Energy, Inc. -0.15% -24
Technology
contain the spread of the virus, more consumers
Information
adopted or purchased pets. In general, household RingCentral, Inc. 1.18% -22
Technology
spending on pets increased rapidly in recent years,
creating a $99 billion industry. * 1 basis point = 0.01%.
"Drilling down further and focusing on the millennial
generation, many of these young professionals are
opting to own pets over having children right now,
another boost for the pet industry.
"Needless to say, with pet ownership comes pet
care, and this is where I believe IDEXX stands to
benefit. As these newer pet owners spend more on
their pets' medical wellness visits, demand for
IDEXX's products – which allow veterinarians to run
diagnostics that immediately test for a variety of
known ailments – continues to rise. The firm
currently boasts high-double-digit revenue growth
and EPS growth.
"All these trends point toward long-term revenue
growth at a pace higher than the fund's benchmark,
equating to what I believe represents a solid
investment for the fund."
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 MAY 31, 2021
ASSET ALLOCATION
Relative Change
From Six Months
Asset Class Portfolio Weight Index Weight Relative Weight Ago
Domestic Equities 98.05% 99.33% -1.28% -0.90%
International Equities 0.56% 0.67% -0.11% 0.25%
Developed Markets 0.56% 0.00% 0.56% 0.44%
Emerging Markets 0.00% 0.67% -0.67% -0.19%
Tax-Advantaged Domiciles 0.00% 0.00% 0.00% 0.00%
Bonds 0.00% 0.00% 0.00% 0.00%
Cash & Net Other Assets 1.39% 0.00% 1.39% 0.65%
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
Relative Change
From Six Months
Market Segment Portfolio Weight Index Weight Relative Weight Ago
Information Technology 36.01% 36.70% -0.69% 1.19%
Health Care 20.31% 22.17% -1.86% 0.77%
Industrials 17.21% 12.61% 4.60% -0.40%
Consumer Discretionary 9.72% 10.92% -1.20% 1.20%
Financials 6.56% 3.50% 3.06% 0.73%
Consumer Staples 4.05% 3.48% 0.57% -2.27%
Communication Services 3.35% 6.14% -2.79% -1.01%
Materials 0.75% 2.02% -1.27% 0.45%
Energy 0.46% 0.57% -0.11% 0.31%
Real Estate 0.18% 1.82% -1.64% -1.64%
Utilities 0.00% 0.08% -0.08% 0.01%
Other 0.00% 0.00% 0.00% 0.00%
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 MAY 31, 2021
10 LARGEST HOLDINGS
Portfolio Weight
Market Segment Portfolio Weight
Holding Six Months Ago
KLA Corp. Information Technology 3.03% 2.26%
EPAM Systems, Inc. Information Technology 2.61% 1.69%
MSCI, Inc. Financials 2.56% 2.45%
Charles River Laboratories International, Inc. Health Care 2.30% 1.55%
Mettler-Toledo International, Inc. Health Care 2.29% 1.93%
Cadence Design Systems, Inc. Information Technology 2.23% 2.11%
ResMed, Inc. Health Care 2.15% 2.97%
Entegris, Inc. Information Technology 2.03% 1.57%
IDEXX Laboratories, Inc. Health Care 1.96% 0.68%
West Pharmaceutical Services, Inc. Health Care 1.94% 1.76%
10 Largest Holdings as a % of Net Assets 23.10% 21.99%
Total Number of Holdings 130 119
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: Cumulative Annualized
Periods ending May 31, 2021 6 1 3 5 10 Year/
Month YTD Year Year Year LOF1
Fidelity Growth Strategies Fund
9.86% 4.45% 32.01% 18.17% 16.40% 12.59%
Gross Expense Ratio: 0.63%2
Russell Midcap Growth Index 8.38% 3.42% 37.78% 19.89% 18.95% 14.20%
Morningstar Fund Mid-Cap Growth 13.41% 6.24% 46.40% 19.80% 19.05% 13.43%
% Rank in Morningstar Category (1% = Best) -- -- 93% 58% 79% 70%
# of Funds in Morningstar Category -- -- 579 547 490 380
1 Lifeof Fund (LOF) if performance is less than 10 years. Fund inception date: 12/28/1990.
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. 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 fidelity.com/performance,
institutional.fidelity.com, or 401k.com. 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 MAY 31, 2021
Definitions and Important Information 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
Information provided in this document is for informational and
mutual fund performance, you should check the fund's current
educational purposes only. To the extent any investment information
prospectus for the most up-to-date information concerning
in this material is deemed to be a recommendation, it is not meant to
applicable loads, fees and expenses.
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 % Rank in Morningstar Category is the fund's total-return
investment decisions. Fidelity, and its representatives may have a percentile rank relative to all funds that have the same Morningstar
conflict of interest in the products or services mentioned in this Category. The highest (or most favorable) percentile rank is 1 and
material because they have a financial interest in, and receive the lowest (or least favorable) percentile rank is 100. The top-
compensation, directly or indirectly, in connection with the performing fund in a category will always receive a rank of 1%. %
management, distribution and/or servicing of these products or Rank in Morningstar Category is based on total returns which
services including Fidelity funds, certain third-party funds and include reinvested dividends and capital gains, if any, and exclude
products, and certain investment services. sales charges. Multiple share classes of a fund have a common
portfolio but impose different expense structures.
FUND RISKS
The value of the fund's domestic and foreign investments will vary
RELATIVE WEIGHTS
from day to day in response to many factors. Stock values fluctuate
in response to the activities of individual companies, general market, Relative weights represents the % of fund assets in a particular
and economic conditions. You may have a gain or loss when you sell market segment, asset class or credit quality relative to the
your shares. The securities of smaller, less well-known companies benchmark. A positive number represents an overweight, and a
may be more volatile than those of larger companies. Foreign negative number is an underweight. The fund's benchmark is listed
investments involve greater risks than those of U.S. investments. immediately under the fund name in the Performance Summary.
"Growth" stocks can perform differently from the market as a whole
and other types of stocks and can be more volatile than other types
of stocks.
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.
Russell Midcap Growth Index is a market-capitalization-weighted
index designed to measure the performance of the mid-cap growth
segment of the U.S. equity market. It includes those Russell Midcap
Index companies with higher price-to-book ratios and higher
forecasted growth values.
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 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
© 2021 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
7 |PORTFOLIO MANAGER Q&A | AS OF MAY 31, 2021 Manager Facts Jean Park is a 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. In this role, Ms. Park manages Fidelity Growth Strategies Fund, Fidelity Fund, and Fidelity Export and Multinational Fund. She is also co-manager of VIP Contrafund. Prior to assuming her current responsibilities, Ms. Park managed Select Leisure Portfolio and served as an equity research analyst on the Consumer team and on the Financials team. Before joining Fidelity in 2006, Ms. Park was an associate and an analyst at Goldman Sachs Asset Management and an intern at JP Morgan. She has been in the financial industry since 2001. Ms. Park earned her bachelor of arts degree, magna cum laude, in economics from Harvard University and her master of business administration degree, with honors, in finance from The Wharton School of the University of Pennsylvania. She is also a CFA® charterholder and a member of CFA Society Boston. 8 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A.
PERFORMANCE SUMMARY: Annualized
Quarter ending June 30, 2021 1 3 5 10 Year/
Year Year Year LOF1
Fidelity Growth Strategies Fund
37.57% 20.65% 17.82% 13.56%
Gross Expense Ratio: 0.63%2
1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 12/28/1990.
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. 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 fidelity.com/performance,
institutional.fidelity.com, or 401k.com. 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.
Before investing in any mutual fund, please carefully consider Information included on this page is as of the most recent calendar
the investment objectives, risks, charges, and expenses. For quarter.
this and other information, call or write Fidelity for a free S&P 500 is a registered service mark of Standard & Poor's Financial
prospectus or, if available, a summary prospectus. Read it Services LLC.
carefully before you invest. Other third-party marks appearing herein are the property of their
respective owners.
Past performance is no guarantee of future results.
All other marks appearing herein are registered or unregistered
Views expressed are through the end of the period stated and do not trademarks or service marks of FMR LLC or an affiliated company.
necessarily represent the views of Fidelity. Views are subject to change at
Fidelity Brokerage Services LLC, Member NYSE, SIPC., 900 Salem Street,
any time based upon market or other conditions and Fidelity disclaims any
Smithfield, RI 02917.
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investment advice and, because investment decisions for a Fidelity fund Fidelity Distributors Company LLC, 500 Salem Street, Smithfield, RI
are based on numerous factors, may not be relied on as an indication of 02917.
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not necessarily holdings invested in by the portfolio manager(s) or FMR Not NCUA or NCUSIF insured. May lose value. No credit union guarantee.
LLC. References to specific company securities should not be construed
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as recommendations or investment advice.
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