FIDELITYTARGET 2030 FUNDSTATEMENT OF TOTAL RETURNfor the six month period ended 30 April 2014(unaudited)30/04/14 30/04/13£’000 £’000 £’000 £’000IncomeNet capital gains/(losses) (50) 467Revenue 43 37Expenses (38) (29)Net revenue/(expense) before taxation 5 8Taxation - -Net revenue/(expense) after taxation 5 8Total return before distributions (45) 475Finance costs: Equalisation 1 1Change in net assets attributable to shareholders frominvestment activities (44) 476STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERSfor the six month period ended 30 April 2014(unaudited)30/04/14 30/04/13£’000 £’000 £’000 £’000Opening net assets attributable to shareholders 3,940 2,548Movement due to sales <strong>and</strong> repurchases of sharesAmounts receivable on issue of shares 475 451Amounts payable on cancellation of shares (142) (74)333 377Change in net assets attributable to shareholders frominvestment activities (see above) (44) 476Closing net assets attributable to shareholders 4,229 3,401BALANCE SHEETas at 30 April 2014(unaudited)30/04/14 31/10/13£’000 £’000 £’000 £’000Assets<strong>Investment</strong> assets 4,208 3,914Debtors 43 348Cash <strong>and</strong> bank balances 12 56Total other assets 55 404Total assets 4,263 4,318LiabilitiesCreditors (34) (341)Bank overdrafts - (37)Total liabilities (34) (378)Net assets attributable to shareholders 4,229 3,940The fund’s financial statements have been prepared on the same basis as the Company’s financial statements.87
FIDELITY UNDISCOVERED TALENT FUNDINVESTMENT OBJECTIVE AND POLICYThe fund’s investment objective is to achieve long term capital growth. TheFund’s policy is to invest primarily in collective investment schemes coveringmarkets throughout the world <strong>and</strong> providing exposure mainly to equities,including schemes managed by <strong>Fidelity</strong>. The Fund will seek to invest in new,emerging or undiscovered fund managers who offer the potential to outperformtheir peer group. This may include fund managers who are relatively new tomanaging money <strong>and</strong> so have a shorter track record; or those running a fundwhich has gone unnoticed by the market but has a solid track record but lowerassets under management; or those managers who are st<strong>and</strong> alone or with asmall team in a boutique structure. The Fund may also invest directly intransferable securities, money market instruments, cash <strong>and</strong> deposits.Derivatives <strong>and</strong> forward transactions may also be used for investmentpurposes.FUND MANAGER’S COMMENTARYMARKET REVIEWGlobal equities generated small but positive returns over the period. Improvingeconomic data in developed markets supported investor sentiment. However,worries about the impact of the reduction in money supply by the US FederalReserve (Fed), particularly on emerging market economies which remainsomewhat dependent on external financing, hampered markets. Concernsabout slower growth in China <strong>and</strong> geopolitical tensions in Ukraine further limitedgains. Against this backdrop, Europe ex UK, the US <strong>and</strong> the UK generatedpositive returns. In contrast, Pacific ex Japan <strong>and</strong> emerging markets declined. InJapan, equities slid due to concerns about the impact that an increase in thesales tax, which was scheduled for April, would have on consumption spending<strong>and</strong> the lack of near term policy action to counter that impact.PORTFOLIO ACTIVITYThe selection of underlying managers in the UK <strong>and</strong> Japanese segmentssupported performance. In the UK, a position in Heronbridge UK Equity Fundwas notably rewarding. Strong stock picking, particularly in economicallysensitive holdings, boosted Heronbridge’s performance; the exposure toeconomically sensitive securities was reduced <strong>and</strong> the allocation to stocks thatare less sensitive to economic conditions was increased. We maintain asignificant exposure to Heronbridge as we have very strong conviction in itsability to outperform UK equities. Elsewhere, the holding in Baring JapanGrowth Trust supported returns, largely due to its strong overweight stance infinancials. The sector did well due to an upturn in the economy <strong>and</strong> substantialpolicy support. We do not expect frequent purchases <strong>and</strong> sales in the <strong>Fidelity</strong>Undiscovered Talent Fund as the objective is to identify managers whoseinvestment process we feel confident about <strong>and</strong> to maintain long-terminvestments with them.OUTLOOKCentral banks in most developed countries continue to support theireconomies by maintaining adequate money supply, which should supportglobal growth <strong>and</strong> equities. However, slower growth in China <strong>and</strong> geopoliticaltensions in Ukraine make us cautious about the outlook. At a regional level,the US is favoured on the back of improving employment data <strong>and</strong> corporateearnings. Europe is seeing weak recovery <strong>and</strong> equities in Japan could bevolatile due to the impact of the sales tax increase. Meanwhile, Pacific exJapan <strong>and</strong> emerging markets could be hurt by weakening growth in China, themajor export market for both regions.PERFORMANCE RECORDA discrete 1 year performance table has not been included as the fundlaunched on 4 September 2013 <strong>and</strong> does not have a full twelve monthperformance record.RISK PROFILEIf you make regular withdrawals from your investment, this may reduce yourcapital over time if the fund’s growth does not compensate for the withdrawals.The value of investments <strong>and</strong> the income from it can go down as well as up soyou may not get back the amount you invested. Some funds are able to investsome or all of their assets in developing overseas markets which carry a higherrisk than investing in larger established markets. <strong>Investment</strong>s in emergingmarkets are likely to experience greater rises <strong>and</strong> falls in value <strong>and</strong> there maybe trading difficulties. Some funds invest in overseas markets. This means thatchanges in currency exchange rates will affect the value of your investment. Forsome funds, derivatives <strong>and</strong> forward transactions may be used for specificinvestment purposes, as well as for hedging <strong>and</strong> other efficient managementpurposes as permitted for all funds. Where this is the case, their use may leadto higher volatility in the fund’s share price. For funds that use derivativetransactions, there is a risk that the counterparty to the transaction will whollyor partially fail to honour its contractual obligations. This may result in financialloss to the fund. We assess the creditworthiness of counterparties as part of ourrisk management process. Each of our funds is operated as a separate entitywith its own assets <strong>and</strong> liabilities. However, if the liabilities of one fund were toexceed its assets, the other funds within the scheme might have to transferacross money to cover the liabilities. This means that the fund you invest in maybe worth less if it has to transfer money to another fund.Nick Peters & James BatemanFund Managers30 April 1488
Change language