FIDELITY CANADIAN OPPORTUNITIES FUND...The Fund aims to achieve long term capital growth by...

© 2020 FIDELITY INVESTMENTS CANADA ULC FOR ADVISOR USE ONLY 160679-v2020422

March 31, 2020

FIDELITY CANADIAN OPPORTUNITIES FUNDQUARTERLY FUND REVIEW


Fund overview

Investment objective

The Fund aims to achieve long term capital growth by investing primarily in the equity securities of Canadian companies. The Fund may at times Have significant exposure to relatively few companies and industries. It may also invest up to 10% of its assets at the time of purchase in the securities of private companies.

Management

PORTFOLIO MANAGER Hugo LavalléeEDUCATION BCom First Class in economics and finance

McGill UniversityJoined Fidelity in 2002

Fund inception date July 24, 2000

Fund benchmark1 S&P/TSX Completion Index

1Prior to February 1, 2009, the Fund’s benchmark was the S&P/TSX 60 Capped Index. Prior to September 30, 2004, the benchmark was a blend of the S&P/TSX Composite Index and the S&P/TSX Capped Composite Index. Prior to May 1, 2002, the benchmark was a blend of the TSE 300 Index and the TSE 300 Capped Index. Prior to May 1, 2000, the benchmark was the TSE 300 index.

Source: Fidelity Investments Canada ULC.


Fund performance (Series B)Annualized returns as at March 31, 2020

Calendar year returns (%)

† Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus, which contains detailed investment information, before investing. The indicated rates of return are historical annual compounded total returns for the period indicated including changes in unit value and reinvestment distributions. The indicated rates of return do not take into account sales, redemption, distribution or option charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer and are not guaranteed or insured. Their values change frequently. Past performance may not be repeated.

Source: Fidelity Investments Canada ULC. Benchmark: S&P/TSX Completion Index.

YTD 3 MO 1 YR 2 YR 3 YR 4 YR 5 YR 7 YR 10 YR SINCE INCEPTION

Fund Net† -14.94 -14.94 -6.72 2.64 1.39 5.89 3.46 5.96 6.03 7.14

Fund Gross† -14.46 -14.46 -4.56 5.02 3.73 8.34 5.86 8.42 8.48

Benchmark -29.70 -29.70 -23.43 -10.17 -6.85 -1.42 -2.75 0.39 2.44 3.74

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

Fund Net† 21.80 -0.98 2.86 24.61 -8.90 9.32 16.07 9.85 -10.11 25.00

Fund Gross† 24.59 1.32 5.23 27.50 -6.78 11.85 18.77 12.33 -8.06 27.75

Benchmark 26.12 -12.85 7.04 20.50 -10.01 5.74 12.22 4.75 -7.85 30.32


Key market developments

Markets have taken a drastic turn from where they stood at the beginning of the year.

2020 started off on a stable footing, with strong U.S. consumer data and low interest rates, but the unforeseen outbreak of COVID-19 negatively affected both the global economy and investor sentiment. Fears of a sharp recession caused by self-isolation measures intended to control spread of the virus led to significant volatility in equity markets, putting an end to the bull market.

Additionally, the unsuccessful OPEC+ talk resulted in lower oil prices, which put pressure on the share prices of energy companies.

Global central banks and governments quickly responded to provide coordinated support to the economy. The Bank of Canada cut interest rates by 150 basis points and the federal government also announced sizable support packages.

Against this backdrop, Canadian equities registered negative results, with all 11 sectors generating negative returns. Energy, health care and consumer discretionary had the lowest returns while information technology, utilities and communication services led the way during the quarter.



Quarterly fund performance


The Fund’s holdings in the consumer discretionary sector contributed, as did underweight exposure to energy. Additionally, overweight exposure to, and holdings in, consumer staples added value. In consumer discretionary, an investment in Dollarama made the primary contribution. Dollarama, a new top

holding, was under pressure early in the quarter because investors were concerned about its reliance on the Chinese supply chain during the initial COVID-19 outbreak in China. Portfolio manager Hugo Lavallée, however, believes that in the medium term, the company’s business model should remain intact and the disruption in consumer demand should be temporary because demand for discounted goods is stickier than demand for larger-ticket items.

In consumer staples, investments in several grocers, including Metro and George Weston, and an allocation to Alimentation Couche-Tard contributed the most to relative performance. Grocers in general have performed relatively well during the market downturn.

In other sectors, notable contributors included investments in Brookfield Renewable Partners, Constellation Software and Franco-Nevada.

Underweight exposure to, and holdings in, real estate detracted from relative returns. In real estate, a lack of exposure to a Canadian office real estate investment trust (REIT) made the primary

detraction. In other sectors, investments in Methanex and Precision Drilling hurt relative performance.

Key drivers

Fidelity Canadian Opportunities Fund (Series B) returned −14.9%, net of fees, during the quarter, significantly outperforming its benchmark, the S&P/TSX Completion Index, which returned −29.7%.


One-year fund performance


The Fund’s holdings in, and to a lesser extent overweight exposure to, consumer discretionary contributed to relative performance. Additionally, underweight exposure to health care contributed, as did holdings in, and overweight exposure to, consumer staples. In consumer discretionary, investments in Dollarama and Papa John’s International made the primary

contributions. In consumer staples, investments in several grocers, including Metro and George Weston, added the most value. In other sectors, investments in Brookfield Renewable Partners, Franco-Nevada and Constellation Software and a

lack of exposure to several cannabis companies contributed. The Fund’s holdings in, and underweight exposure to, real estate detracted from relative performance,

as did underweight exposure to financials. In real estate, an investment in Brookfield Property Partners and a lack of exposure to a Canadian office REIT

detracted. In other sectors, notable detractors included an investment in Precision Drilling and lower-than-benchmark

exposure to an insurance company and to Methanex.

Key drivers

Fidelity Canadian Opportunities Fund (Series B) returned −6.7%, net of fees, significantly outperforming its benchmark, the S&P/TSX Completion Index, which returned −23.4%.


Positioning and outlook

Portfolio manager Hugo Lavallée believes this is a great time to connect with companies and to be an active investor, despite significant volatility and correction in the market. It is imperative to understand how companies can weather market volatility. In Hugo’s view, companies with strong balance sheets that are good stewards of capital will likely recovery quickly.

Hugo is focusing on his favourite companies – many have come on sale. He continues to find interesting ideas in the consumer sectors, which resulted in overweight allocations, compared with the benchmark, to the consumer discretionary and consumer staples sectors. In consumer discretionary, he is focusing more on value retailers because their long-term outlooks are relatively less affected by changes in consumer purchasing power.

Hugo is using this opportunity to further differentiate the Fund from passive exchange-traded funds, displaying the merits of active management, particularly during market volatility. As a true contrarian investor, Hugo is more defensive when things look positive, but more aggressive when the outlook seems dire.

In Hugo’s opinion, having experienced previous downturns is helpful in navigating the current changing market dynamics. The companies the Fund owns do not have a lot of balance sheet risk (i.e., leverage concerns) and Hugo is assessing each position to ensure it can withstand the stresses of a downturn. He is working hard with the investment team to uncover all the opportunities he can.



Sector attribution 3-months ending March 31, 2020

Benchmark: S&P/TSX Completion Index.Source: Fidelity Investments Canada ULC. Returns are for Series B, net of fees, in Canadian dollars. Past performance is no guarantee of future results. Percentages may not sum to totals due to rounding.

Sector

Average Weight (%) Cumulative Return (%) Contribution to Relative Return (bps)

Fund Benchmark Relative Fund Benchmark Relative Security Selection

Sector Allocation

Total Relative Contribution

Consumer Discretionary 12.3 4.4 7.9 -16.5 -36.5 20.0 287 -2 286Energy 2.5 8.8 -6.4 -57.0 -60.4 3.4 -7 275 268Consumer Staples 14.4 3.0 11.4 -10.0 -13.7 3.7 54 191 246Information Technology 8.1 2.5 5.6 -5.2 -15.9 10.7 80 92 172Communication Services 6.4 2.3 4.1 -9.9 -22.9 13.0 87 38 125Industrials 5.1 14.9 -9.9 -26.6 -33.0 6.3 45 36 81Utilities 12.6 12.1 0.5 -4.2 -7.4 3.2 37 16 53Health Care 0.6 2.3 -1.6 4.8 -36.6 41.4 23 16 39Materials 6.5 15.4 -8.9 -32.8 -32.0 -0.9 -20 34 14Financials 8.7 18.6 -9.9 -22.4 -26.3 3.9 51 -39 13Real Estate 3.0 15.8 -12.8 -35.7 -25.3 -10.4 -37 -59 -95Total Primary Assets 80.1 100.0 -19.9 -15.9 -29.7 13.8 601 599 1200Cash 19.5 324

Expenses & Other 0.4 -48

Total Fund 100.0 100.0 -14.9 -29.7 1476Fund Return -1494Index -2970Value Added: 1476


Sector attribution 1-year ending March 31, 2020

Benchmark: S&P/TSX Completion Index.Source: Fidelity Investments Canada ULC. Returns are for Series B, net of fees, in Canadian dollars. Past performance is no guarantee of future results. Percentages may not sum to totals due to rounding.

Sector

Average Weight (%) Cumulative Return (%) Contribution to Relative Return (bps)

Fund Benchmark Relative Fund Benchmark Relative Security Selection

Sector Allocation

Total Relative Contribution

Consumer Discretionary 11.5 4.3 7.2 -4.1 -28.6 24.6 343 24 367Energy 5.2 10.5 -5.2 -58.8 -63.1 4.3 11 342 353Health Care 0.7 3.7 -3.0 24.5 -71.6 96.1 81 257 338Consumer Staples 14.5 2.9 11.7 1.5 -12.8 14.3 198 134 333Information Technology 8.1 2.0 6.1 12.4 -0.7 13.1 104 135 240Communication Services 7.2 2.0 5.2 4.4 -10.4 14.8 96 75 171Utilities 9.1 10.6 -1.5 16.6 12.5 4.1 52 -14 38Industrials 3.8 14.6 -10.8 -28.3 -19.6 -8.7 62 -58 4Materials 6.1 15.9 -9.8 -12.7 -17.2 4.5 -17 -43 -60Financials 9.2 17.7 -8.5 -10.0 -12.8 2.8 33 -94 -61Real Estate 2.5 15.9 -13.5 -40.5 -22.1 -18.4 -62 -17 -79Total Primary Assets 77.8 100.0 -22.2 -3.9 -23.4 19.6 902 741 1643Cash 21.4 230

Expenses & Other 0.8 -202

Total Fund 100.0 100.0 -6.7 -23.4 1671Fund Return -672Index -2343Value Added: 1671


Fidelity Canadian Opportunities Fund Top ten holdings, as at March 31, 2020


SECURITY INDUSTRYBrookfield Renewable Partners Independent Power And Renewable Electricity ProducersQuebecor MediaAlimentation Couche-Tard Food & Staples RetailingDollarama Multiline RetailRestaurant Brand Hotels, Restaurants & LeisureHydro One Electric UtilitiesIntact Financial InsuranceCGI IT ServicesConstellation Software SoftwareParkland Fuel Oil, Gas & Consumable Fuels% of Top 10 Holdings 43.2Total Holdings 89


Fidelity Canadian Opportunities Fund Portfolio characteristics, as at March 31, 2020

Source: Fidelity Investments Canada ULC. *Benchmark: S&P/TSX Completion Index. Weighted average market cap in Canadian dollars.

FUND BENCHMARK*

P/E (1 year historical) 15.8 13.2

P/E (1 year forecast) 15.2 13.2

Price/Book 1.9 1.2

ROE (5 year average) 4.6 6.5

Earnings Growth Rate (5 year average) 11.2 9.0

Earnings Growth Rate (1 year forecast) 2.2 -9.1

Dividend Yield 3.1 3.8

Weighted Average Market Cap (B) $11.4 $5.3


Fidelity Canadian Opportunities Fund Historical risk measures1, 3-years ending March 31, 2020

Source: Fidelity Investments Canada ULC. Benchmark: S&P/TSX Completion Index.1 Based on gross fund returns* Hurdle rate is zero or excess return, whichever is lower

FUND BENCHMARK

Annualized Standard Deviation 10.44% 18.12%

Sharpe Ratio 0.23 -0.45

Downside Volatility* 3.87% -

Annualized Tracking Error 9.23 -

Annualized Information Ratio 1.15 -

Beta 0.54 -


APPENDIX


Investment process

Notes from internal research (Team Canada & Global Sector Analysts), meetings with company management, conferences, broker research, Bloomberg, Newswire, trade publications, magazines, daily newspapers

Sources of information and investment ideas

Fundamental, bottom-up stock selection is the primary driver of portfolio construction and performance.

The Fund has a small-mid cap bias with a primary focus on Canadian stocks Employs a contrarian style, seeking value in out-of-favour stocks while also aiming to

mitigate downside risk and manage fund volatility Types of stocks targeted in the Fund: Companies where the operating margin is bottoming and has lots of potential to expand and drive

earnings higher Companies with high substantial ROIC, where the stocks are cheap on EV/EBIT

Other key company fundamentals include positive earnings growth, and strong balance sheets and cash flow/ sales ratio

Considers the quality of management and management track record Looks for companies with a competitive advantage in industry/sector

Investment style and portfolio construction


Investment process

Emphasis on companies with valuation metrics which support downside protection Key catalyst supporting future growth is not required Will also actively pursue new opportunities in major secular trends and turnaround stories (e.g.

secular growth stories with solid growth potential but also looks to take shorter term advantage of mispriced securities)

Employs a gradualist approach, tends to buy small positions and build as conviction in thesis increases

Sector weights result from bottom up stock selection An element of top down enters the construction equation when assessing the attractiveness of the

cyclical sectors Within these cyclical sectors, bottom-up analysis is a primary decision making tool Benchmark weights are a secondary consideration in the construction process Buy/sell decisions are purely a function of relative valuation and company fundamentals;

improvement/deterioration in fundamentals will trigger trading decisions Target portfolio turnover is expected to be moderate Comfortable being naked a sector or substantially overweight if conviction is high Foreign exposure will typically be 10% or less (will utilize Fidelity’s global research capabilities) Will own attractive private company investments deemed to be approaching IPO status Typical number of holdings: 75-100 stocks

Investment style and portfolio construction (cont.)


Investment process

Looks for stocks offering the best risk/reward profile (upside/downside potential) Thoroughness of analysis is the key risk control measure Manager runs a diversified portfolio but is willing to have significant

under/overweights at stock or sector level; position size is a function of conviction and is considered in relative terms Fund concentration is driven by market conditions and manager conviction Shifts portfolio beta based on market environment and whether market will pay

for taking on a higher level of stock or portfolio risk Potentially wide sector deviations which may be driven by macro/sector views Up to 10% of Fund assets may be invested in private placements When there is a complete lack of attractive investment opportunities, cash

position may build to a 30% maximum

Risk Control


Important notice

For advisor use only. No recipient is authorized to pass this communication on to any other person whatsoever or reproduce it by any means without the prior written consent of Fidelity.

Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated with investments in mutual funds and ETFs. Please read the mutual fund or ETF’s prospectus, which contains detailed investment information, before investing. The indicated rates of return are historical annual compounded total returns for the period indicated including changes in unit value and reinvestment of distributions. The indicated rates of return do not take into account sales, redemption, distribution or option charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds and ETFs are not guaranteed. Their values change frequently, and investors may experience a gain or a loss. Past performance may not be repeated.

Effective November 6, 2006 Fidelity introduced a 5% T-SWP and created Series T5 (“DSC,“ “LL,” “LL2”) and S5 (“ISC”). The Series name for T-SWP 8% changed to T8 (“DSC,” “LL,” “LL2”) and S8 (“ISC”).

The returns shown are used to illustrate the effects of the compound growth rate and are not intended to reflect future values of the fund or returns on investment in any fund.

Any reference to a company is for illustrative purposes only; it is not a recommendation to buy or sell nor is it necessarily anindication of how the portfolio of any Fidelity Fund is invested. The breakdown of fund investments is presented to illustrate the way in which a fund may invest, and may not be representative of a fund’s current or future investments.

© 2020 Fidelity Investments Canada. All rights reserved. Fidelity Investments is a registered trademark of Fidelity Investments Canada.

The presenter is not registered with any securities commission and therefore cannot provide advice regarding securities.


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