MPR.en.xx.20210831.LU0605513752.pdf For Investment Professionals Only FIDELITY FUNDS MONTHLY PERFORMANCE REVIEW UK SPECIAL SITUATIONS FUND W-GBP 31 AUGUST 2021

Portfolio manager: Alex Wright, Jonathan Winton

Performance over month in GBP (%) Performance for 12 month periods in GBP (%)

Fund 6.2 Market index 2.7

FTSE All Share Index Market index is for comparative purposes only. Source of fund performance is Fidelity. Basis: nav-nav with income reinvested, in GBP, net of fees. Other share classes may be available. Please refer to the prospectus for details.

Fund Index Market Environment

UK equities continued to advance, recording a seventh straight monthly gain in August. Sentiment remained buoyant, propelled by a spate of merger and acquisition (M&A) activity, alongside expectations for continued earnings strength. The Bank of England kept its monetary policy unchanged, but warned of a more pronounced period of above-target inflation in the near term. Meanwhile, the pace of economic activity remains solid in the UK despite a modest deceleration over the month. While the flash PMI reading remained above the 50 mark that suggest growth, staffing shortages and supply bottlenecks kept a lid on activity levels. Authorities finally lifted the last of the domestic COVID-19 restrictions during the month. Almost all sectors posted positive returns, with technology, real estate, industrials and consumer discretionary the largest gainers. Conversely, materials and consumer staples lagged the market. Fund Performance

The fund (W-GBP) recorded a return of 6.2% in August, compared to the comparative index which returned 2.7%. Strong stock selection in industrials and in financials contributed to returns during the month. Merger & acquisition (M&A) activity continued to be a major contributing factor to performance. UK aerospace equipment supplier was the standout performer during the month as its shares rallied sharply following a bidding war. Early in the month, US company Parker Hannifin offered to buy Meggitt at 800 pence per share (around 71% premium to its previous day closing price). Despite both parties reaching a deal, Meggitt received another non-binding, unsolicited offer from peer Transdigm at 900 pence per share (which was subsequently withdrawn). Speculation of potential private equity bids also supported the holding in defence contractor . Investors also welcomed the sale of its consultancy business to engineering firm KBR for £293 million. The position in Irish lender AIB Group also rose. The company’s first-half results beat expectations with a positive surprise on strong commissions and a provision reversal. Outsourcing group was another notable contributor, as the company agreed to sell its document management business to Zurich-based Swiss Post Solutions for £40 million, in order to focus on its technology-led ‘Science of Service’ strategy in core divisions. The lack of exposure to mining group and consumer products major also added to relative performance. Outsourcing group was the leading detractor, despite reporting strong first-half profits. While there were no major surprises given the recent trading update in June, there were incremental positives including new contract wins. Educational publisher Pearson was another notable detractor. The company said it was on track to hit full-year targets despite lower first-half profits and launched a new direct-to-consumer app for US college students. While the results were solid and comfortably ahead of expectations, a somewhat cautious outlook signalled limited change to full-year consensus forecasts. Nevertheless, the new app is expected to be a key driver of future growth as it makes Pearson's products more easily available to college students and heralds a new subscription model. Fund Positioning

It is encouraging to see the underlying stock-picking coming through despite a recent underperformance of value stocks. This is partly down to the fund benefiting from a number of M&A bids, the latest being Meggitt, but also reflects the improving corporate fundamentals of our holdings. The pandemic and lockdowns have accelerated the pace of changes both at individual companies but also within industries where some competitors have exited. The lockdowns have allowed faster restructuring, as companies have used the downtime to accelerate changes e.g. refurbishing of premises, or digitalisation of their business. Companies have also realised cost savings from reduced travel, employees working from home, reduced office footprint, online sales, etc. Based on 2022 and 2023 earnings estimates, the fund trades on a 12-16% discount to the UK market, which as previously mentioned is itself attractively valued both in relative and absolute terms. We remain comfortable with how the portfolio looks from a valuations, returns on capital and risk perspective, and continue to see meaningful upside potential for our holdings. While we are still finding attractively valued companies of good quality, the fund’s gearing level has fallen towards more neutral levels, when taking into account the outstanding bids for a number of sizeable portfolio holdings. Given the strong performance of equity markets globally, I would not be surprised to see them consolidate or pull back a bit and would rather have the option of increasing the gearing should this happen (although you will probably always find me a little cautious when markets have had a strong run!).

Important Information Past performance is not a reliable indicator of future results. The fund's returns can be affected by fluctuations in currency exchange rates.

The value of investments and any income from them may go down as well as up and an investor may not get back the amount invested. The use of financial derivative instruments may result in increased gains or losses within the fund. This fund invests more heavily than others in smaller companies, which can carry a higher risk because their share prices may be more volatile than those of larger companies. MPR.en.xx.20210831.LU0605513752.pdf For Investment Professionals Only FIDELITY FUNDS MONTHLY PERFORMANCE REVIEW UK SPECIAL SITUATIONS FUND W-GBP 31 AUGUST 2021

Attribution

Performance attribution is produced in the currency shown below. For funds with multiple share classes, the attribution return reflects the aggregate performance across all the share classes. It may therefore deviate from the published return for a particular share class. When using the analysis for hedged share classes, please consider that the attribution is shown before the impact of hedging. The contributions shown in the tables are before the impact of charges. If charges are applied, their effect is captured in the “Other” category in the tables and will also be reflected in the fund return. All investments, including derivatives, linked to a particular issuing company have been combined to form a total percentage for each issuing company. The sector/industry and geographic contribution tables (where relevant) display a maximum of eleven individual entries. Where applicable, only top five and bottom five are listed, with the remaining contribution shown in the "Other Sectors" or “Others” category.

Currency of attribution UK Sterling (GBP) One month relative return (%) 3.56

Position Contribution (%) 1 month

Average Relative Average Relative Relative Performance Relative Performance TOP CONTRIBUTORS Weight Contribution TOP DETRACTORS Weight Contribution MEGGITT PLC 1.8 0.83 SERCO GROUP PLC 2.6 -0.23 AIB GROUP PLC 2.5 0.47 PEARSON PLC 1.1 -0.18 MITIE GROUP PLC 1.9 0.32 HOLDINGS PLC 1.9 -0.15 BABCOCK INTL GROUP PLC 0.9 0.28 -1.6 -0.14 RIO TINTO PLC -2.5 0.22 1.2 -0.12 3.3 0.20 RYANAIR HOLDINGS PLC 1.5 -0.11 UNILEVER PLC -4.4 0.20 1.3 -0.11 SBM OFFSHORE NV 0.8 0.19 PLC -0.9 -0.10 MARKS & SPENCER GROUP PLC 0.7 0.18 PLC 2.2 -0.07 HSBC HOLDINGS PLC -3.3 0.15 SSE PLC -0.7 -0.07

Positions in other funds - including ETFs (Exchange Traded Funds) - can appear in this table, but index derivatives form part of an "Index / Unclassified" category which will appear in the table(s) below when relevant.

Sector/Industry Contribution (%) 1 month

CONTRIBUTIONS TO RELATIVE RETURN

Average Sector/ Total Relative Security Industry Relative icb Industry Weight Selection Selection Contribution Industrials 12.2 1.15 0.29 1.44 Financials 3.4 0.11 0.38 0.49 Basic Materials -5.5 0.18 0.18 0.36 Energy -1.2 0.27 0.01 0.28 Consumer Staples -10.5 0.07 0.18 0.25 Telecommunications 3.7 0.01 0.18 0.19 Consumer Discretionary 8.6 -0.16 0.28 0.12 Health Care -2.3 0.03 0.09 0.11 Real Estate -1.6 0.10 -0.04 0.07 Technology -1.0 0.04 -0.02 0.02 Utilities -0.3 -0.25 0.16 -0.09

Index / Unclassified 2.0 0.05 0.00 0.05 Total Primary Assets 7.6 1.58 1.70 3.28 Other* -7.6 0.28 TOTAL 0.0 3.56

*Other includes portfolio components not already listed such as cash, expenses and other miscellaneous items. MPR.en.xx.20210831.LU0605513752.pdf For Investment Professionals Only FIDELITY FUNDS MONTHLY PERFORMANCE REVIEW UK SPECIAL SITUATIONS FUND W-GBP 31 AUGUST 2021

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