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  • Semi-Annual Management Report of Fund Performance September 30, 2019

    Fidelity Frontier Emerging Markets Fund

  • Caution Regarding Forward-looking Statements

    Certain portions of this report, including, but not limited to, “Results of Operations” and “Recent Developments”, may contain forward-looking statements about the Fund, including its strategy, risks, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” and similar forward-looking expressions or negative versions thereof.

    In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Fund and economic factors. Accordingly, assumptions concerning future economic and other factors may prove to be incorrect at a future date.

    Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking state- ments made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events.

    It should be stressed that the above-mentioned list of important factors is not exhaustive. You are encouraged to consider these and other factors carefully before making any investment decisions and you are urged to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Fund has no specific intention of updating any forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Report of Fund Performance.

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    Semi-Annual Management Report of Fund Performance as at September 30, 2019 Fidelity Frontier Emerging Markets Fund This semi-annual management report of fund performance contains financial highlights but does not contain the complete semi-annual financial statements for the investment fund. You can get a copy of the semi-annual financial statements at your request, and at no cost, by calling 1-800-263-4077, by writing to us at Fidelity Investments, 483 Bay St. Suite 300, Toronto ON M5G 2N7 or by visiting our website at www.fidelity.ca or SEDAR at www.sedar.com.

    Securityholders may also contact us using one of these methods to request a copy of the investment fund’s proxy voting policies and procedures, proxy voting disclosure record or quarterly portfolio disclosure relating to the investment fund.

    Management Discussion of Fund Performance Results of Operations Fidelity Frontier Emerging Markets Fund, Series B, returned -6.7%, after fees and expenses, for the six-month period ended September 30, 2019. The net returns of the other series of this Fund are similar to those of Series B, except for differences attributable to expense structures. During the review period, global equities, as represented by the MSCI World Index, returned 3.6% (in Canadian dollar terms).

    Market overview

    Monetary policy easing and sustained U.S. economic expansion supported global equity markets. Lower interest rates and falling bond yields (interest income from bonds at a given price) resulted in a general preference for higher-quality companies, with sustainability of earnings and attractive dividend yields among the key drivers of gains. Furthermore, the falling cost of capital generally supported a sharp rise in share buybacks and lifted earnings per share (as fewer shares remain in issue for the same amount of earnings). However, the rise in global equi- ties was contained due to escalating trade tensions between the U.S. and its leading trade partners, which triggered fears of a global recession. Many analysts also expected that growth in the U.S. economy could be peaking after a ten-year long expansion. Investors also navigated several geopolitical risk events, such as rising tensions in the Middle East, developments related to Brexit and political turmoil in Italy. European and U.S. equities advanced. While economic indicators weakened, a supportive monetary and fiscal policy framework pushed stock prices higher.

    Factors affecting performance:

    The Fund’s benchmark, the MSCI Frontier Emerging Markets Index, returned -3.2% for the review period. The Fund underperformed its benchmark, primarily due to a higher-than-benchmark exposure to the consumer discretionary sector. In the sector, investments in Pakistan-based automobile manufacturer Indus Motor Company Limited and Philippines-based fast food restaurant company Jollibee Foods detracted from relative returns. In addition, in the financials sector, a lower-than-benchmark exposure to Egypt-based Commercial International Bank and a lack of exposure to Kuwait-based banking firm Kuwait Finance House detracted from relative returns.

    In contrast, positioning in the energy sector contributed to relative performance, with a lack of exposure to Argentina-based petroleum refining company YPF and an investment in Saudi Arabia-based petroleum retail firm ALDREES Petroleum & Transport Services Company contributing to relative returns. In addition, exposure to certain stocks in the communication services sector contributed to relative performance. At the end of the review period, the Fund had no exposure to ALDREES Petroleum & Transport Services Company.

    Portfolio changes:

    During the review period, the Fund’s exposures to the communication services and financials sectors were increased. In the communication services sector, the portfolio manager initiated a position in Kuwait-based telecommunication services firm Mobile Telecommunication Co and increased the allocation to Kenya-based telecommunication services firm Safaricom. In the financials sector, a position was initiated in Egypt-based Commercial International Bank and exposure was increased to Bahrain-based Ahli United Bank. The portfolio manager believes that these companies have potentially better future growth prospects.

    In contrast, exposures to the materials and consumer discretionary sectors were decreased. In the materials sector, the portfolio manager exited positions in Colombia-based conglomerate Grupo Argos and U.K.-based conglomerate Antofagasta plc. In the consumer discretionary sector, exposure was reduced to Philippines-based fast food restaurant company Jollibee Foods Corp, after the portfolio manager found better investment opportunities elsewhere.

    Recent Developments The portfolio manager of the Fund, Adam Kutas, believes that frontier emerging market countries are where emerging market countries were twenty-five to thirty years ago, with very low penetration of most products and services. These countries are now gaining share in global manufacturing, while equities remain cheap. He believes that fundamentals are mixed for frontier and emerging market countries.

    For some countries, such as those in Africa and the Middle East, recovering prices for commodities, especially oil, have had a positive impact on growth. However, this factor has proven to be a drag on South and Southeast Asia, given their minimal commodity exposure. Mr. Kutas favors the cheap, unknown Southeast and South Asian markets, such as Pakistan, Vietnam and Bangladesh. He also prefers markets such as Romania and Sri Lanka, where governments are opening opportunities to private enterprise.

    Related Party Transactions Manager and Portfolio Adviser

    The Fund is managed by Fidelity Investments Canada ULC (Fidelity). Fidelity is part of a broader collection of companies collectively known as Fidelity Investments.

    Fidelity provides or arranges for the provision of all general management and administrative services required by the Fund in its day–to–day operations, bookkeeping, record–keeping and other administrative services for the Fund.

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    Fidelity Frontier Emerging Markets Fund

    Management Discussion of Fund Performance – continued

    Fidelity is the portfolio adviser to the Fund and it provides investment advisory services to the Fund. Fidelity has entered into sub-advisory agreements with a number of entities, including FMR Investment Management (UK) Limited to provide investment advice with respect to all or a portion of the investments of the Fund. The sub-advisors arrange for acquisition and disposi- tion of portfolio investments, including all necessary brokerage arrangements.

    The Fund pays Fidelity a monthly management and advisory fee for their services, based on the net asset value of each Series, calculated daily and payable monthly. The Fund paid Fidelity management and advisory fees of $183,000 for the period ended September 30, 2019.

    Administration Fee

    Fidelity charges the Fund a fixed administration fee in place of certain variable expenses. Fidelity, in turn, pays all of the operating expenses of the Fund, other than certain specified fund costs (e.g. the fees and expenses of the Independent Review Committee, taxes, brokerage

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