QPR.en.xx.20210630.GB00B7VNMB18.pdf For Investment Professionals Only FIDELITY INVESTMENT FUNDS QUARTERLY PERFORMANCE REVIEW UK SMALLER COMPANIES FUND W - ACC SHARES 30 JUNE 2021

Portfolio manager: Jonathan Winton

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

Fund 11.4 Market index 5.5

Numis UK Smaller Companies ex Inv Cos Index (Gross) Market index is for comparative purposes only. Source of fund performance is Fidelity. Basis: bid-bid with income reinvested, in GBP, net of fees. Other share classes may be available. Please refer to the prospectus for more details.

Fund Index

Market Environment

UK equities rose over the second quarter. Markets started on a strong note on increasing optimism around the prospects of a reopening given an acceleration in vaccination rollouts. A sharp pick-up in corporate earnings and continued strength in economic data boosted investor sentiment. However, a pick-up in inflation readings led to some concerns. While the Bank of England (BoE) continues to see the current inflation pressures as transitory, the US Federal Reserve’s (Fed) more aggressive tone temporarily unsettled markets. Meanwhile, worries about the spread of a more transmissible COVID-19 variant led to a more cautious stance. For the most part, vaccines appear to be keeping hospitalisation rates under control, but virus concerns remain a source of worry going forward. In this environment, most sectors reported flat to positive returns, with the decline in bond yields helping growth stocks and bond proxies outperform. Health care and utilities were among the biggest gainers, while more cyclical sectors such as financials and consumer discretionary underperformed. The UK economy appears to be on course for a strong rebound, supported by the easing of social distancing restrictions, as evidenced by the latest economic indicators. For instance, the latest GDP estimates suggest an expansion of 2.3% in April, the fastest monthly rise since July 2020, with strong retail spending and the resumption of schooling supporting growth. Similarly, business activity picked up momentum and saw record growth during the quarter, according to IHS Markit. As the economy recovered from the pandemic, inflation rose sharply over the quarter to 2.1% in May, marginally breaching the BoE’s 2% target.

Fund Performance

In the second quarter, the W-ACC share class of the fund returned 11.4% in GBP terms; while the Numis UK Smaller Companies ex Investment Companies Index (Gross) returned 5.5%. At a sector level, strong stock selection in the consumer discretionary, industrials, financials and technology sectors supported returns.

Merger & acquisition (M&A) activity drove gains M&A activity was a contributing factor to the fund’s outperformance with John Laing, an infrastructure investor bid for by KKR at a significant premium, in a deal valued at about £2 billion, and another holding Spire Healthcare bid for by Australian hospital operator Ramsay Health Care.

Notable contributors LSL Property Services was another notable contributor, as it announced robust first quarter earnings at the end of April on the back of strong trading momentum. Sanderson Design was another leading contributor. The company reported encouraging results for the year, underpinned by a strong performance in the second half of the year which saw trading recovering to pre-pandemic levels. Whilst Sanderson is seeing a considerable amount of positive internal change, the backdrop of a strong housing market is also helping the business.

Key detractors There was limited downside from portfolio holdings during the quarter. The position in agricultural services group Origin Enterprises fell owing to a weak outlook. Unfavourable weather has resulted in the business losing money in the first half, but rebased consensus expectations, favourable Spring weather and the potential for recovery in the UK next year are expected to improve its prospects. Just Group was another notable detractor.

Fund Positioning

The near-term UK economic outlook remains supportive with real time data suggesting a continued rebound in activity, back to pre-COVID levels in some instances and even ahead in certain areas. While the recent pick-up in the number of infections caused by the new now dominant Delta variant is a concern, it looks like two vaccine doses provide significant protection. Encouragingly, the vaccine rollout continues to progress at pace. We have not changed the fund’s positioning significantly in recent months, and continue to own names, which we feel are attractively valued with a positive outlook.

Attractively valued portfolio Despite the strong market returns seen over the past year, we continue to see good upside, with our holdings trading on average PE of less than 12x 22e. While a lot of global markets look expensive versus their 10-year historical range, the UK market continues to look attractive relative to its own history and global peers, trading at a significant discount to other major developed markets. This is enabling us to find attractively valued companies of better quality than would normally be the case.

Key transactions during the quarter During the quarter, we bought a new position in Midwich which should benefit from a fragmented AV market, as the company offers the biggest product range and is difficult to compete with. The exposure to Ten Entertainment, a leading UK operator of entertainment centres, was also increased as there are only two businesses that dominate the industry, which is seeing pent-up demand, and therefore are likely to take market share from smaller players.

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. Liquidity is a measure of how easily an investment can be converted into cash. Under certain market conditions assets may be difficult to sell. QPR.en.xx.20210630.GB00B7VNMB18.pdf For Investment Professionals Only FIDELITY INVESTMENT FUNDS QUARTERLY PERFORMANCE REVIEW UK SMALLER COMPANIES FUND W - ACC SHARES 30 JUNE 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) Three month relative return (%) 5.90

Position Contribution (%) 3 months

Average Relative Average Relative Relative Performance Relative Performance TOP CONTRIBUTORS Weight Contribution TOP DETRACTORS Weight Contribution LSL PROPERTY SERVICES PLC 1.6 0.55 INVESTEC PLC -1.2 -0.28 JOHN LAING GROUP PLC 2.2 0.53 WATCHES OF SWITZERLAND GROUP LTD -1.2 -0.23 KIN AND CARTA PLC OLD 1.1 0.46 JUST GROUP PLC 1.1 -0.20 SANDERSON DESIGN GROUP PLC 2.1 0.42 ST MODWEN PROPERTIES PLC -0.7 -0.20 ELECTRA PRIVATE 0.7 0.35 ORIGIN ENTERPRISES PLC 1.0 -0.19 SPIRE HEALTHCARE GROUP PLC 0.9 0.34 OXFORD BIOMEDICA PLC -0.6 -0.16 MIDWICH GROUP PLC 0.9 0.33 LIONTRUST ASSET MANAGEMENT PLC -0.6 -0.16 ARGO BLOCKCHAIN PLC -0.3 0.27 SANNE GROUP PLC -0.7 -0.15 TYMAN PLC 1.3 0.27 DISCOVERIE GROUP PLC -0.5 -0.15 TP ICAP GROUP PLC -0.9 0.26 H&T GROUP PLC 1.0 -0.15

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. Names of any positions being shorted at the reporting date have been withheld in line with Fidelity’s disclosure policy.

Sector/Industry Contribution (%) 3 months

CONTRIBUTIONS TO RELATIVE RETURN

Average Sector/ Total Relative Security Industry Relative GICS Sector Weight Selection Selection Contribution Industrials 2.5 1.08 0.55 1.63 Consumer Discretionary 5.2 -0.03 1.04 1.00 Information Technology -3.9 0.25 0.63 0.88 Communication Services 2.7 0.16 0.61 0.77 Financials -2.5 0.31 0.21 0.51 Materials -0.3 0.35 0.04 0.40 Real Estate -4.8 0.32 -0.05 0.27 Energy -0.7 0.27 -0.02 0.25 Health Care -1.0 0.14 0.09 0.23 Consumer Staples -0.8 0.01 0.17 0.17 Utilities -0.6 -0.02 0.10 0.08 Index / Unclassified 4.7 -0.05 0.00 -0.05 Total Primary Assets 0.5 2.80 3.36 6.16 Other* -0.5 -0.26 TOTAL 0.0 5.90

*Other includes portfolio components not already listed such as cash, expenses and other miscellaneous items. QPR.en.xx.20210630.GB00B7VNMB18.pdf For Investment Professionals Only FIDELITY INVESTMENT FUNDS QUARTERLY PERFORMANCE REVIEW UK SMALLER COMPANIES FUND W - ACC SHARES 30 JUNE 2021

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