PORTFOLIO MANAGER Q&A | AS OF FEBRUARY 28, 2021

Fidelity® Select Transportation Portfolio

Key Takeaways MARKET RECAP

® • For the fiscal year ending February 28, 2021, the fund gained 34.62%, The S&P 500 index gained 31.29% for considerably behind the 44.40% advance of the MSCI U.S. IMI the 12 months ending February 28, 2021, Transportation 25/50 Linked Index but topping the 31.29% rise in the a volatile but productive period for U.S. risk assets. The early-2020 outbreak and broadly based S&P 500® index. spread of COVID-19 resulted in stocks • suffering one of the quickest declines on After selling off sharply for most of March 2020, U.S. equity markets record, through March 23, followed by a bottomed late in the month and embarked on an extended rally to historic rebound that included the index new all-time highs, as market participants largely looked past near- closing 2020 at an all-time high and term concerns about the economy and ongoing COVID-19 pandemic. gaining modest ground in the first two months of the new year. The crisis and • According to Portfolio Manager Matthew Moulis, transportation stocks containment efforts caused broad participated in the rally to varying degrees. Among the four largest contraction in economic activity, along groups within the MSCI industry index, air freight & logistics (+67%) with extreme uncertainty and dislocation and trucking (+65%) stocks were especially strong, whereas railroads in financial markets. A rapid and (+33%) underperformed. Airlines (+14%) made a strong comeback expansive U.S. monetary/fiscal-policy later in the period but considerably trailed other transportation response partially offset the economic segments. disruption and fueled the market surge, as did resilient corporate earnings. The rally slowed in September, when stocks • Versus the MSCI index, the fund's positioning among air freight & began a two-month retreat amid logistics stocks was the largest drag on performance. In airlines, being Congress's inability to reach a deal on too cautious about the group from November through February hurt, additional fiscal stimulus, as well as as they were a key beneficiary of the expected normalization of the concerns about election uncertainty, U.S. economy. Non-index exposure to aerospace & defense indications the U.S. economic recovery companies also detracted. could be slowing and a new wave of COVID-19 cases. A shift in momentum • Conversely, the portfolio's relative return was aided by favorable picks began in October and accelerated and an underweighting in the marine segment. following the U.S. elections, with the approval of three breakthrough COVID- • As of February 28, Matt believes that U.S. consumers' ability to set 19 vaccines and prospects for additional aside extra savings during the pandemic could drive a continued government stimulus fueling the increase in purchases of a variety of goods, which may be beneficial "reflation trade" through February 28. By for transportation companies. He will be watching trends in e- sector for the full 12 months, information commerce and the impact of recent congestion in shipping channels technology (+50%) and consumer discretionary (+43%) led all gainers. for clues as to how to position the fund going forward. Materials (+42%) and communication services (+37%) also stood out. In contrast, the defensive utilities (-3%) and real estate sectors (+5%) notably lagged.

Not FDIC Insured • May Lose Value • No Bank Guarantee PORTFOLIO MANAGER Q&A | AS OF FEBRUARY 28, 2021

Q&A

An interview with Portfolio Manager Matthew Moulis

Matthew Moulis Q: Matt, how did the fund perform for the fiscal Portfolio Manager year ending February 28, 2021฀ The fund gained 34.62% the past 12 months, considerably Fund Facts behind the 44.40% advance of the MSCI U.S. IMI Trading Symbol: FSRFX Transportation 25/50 Linked Index but topping the 31.29% rise in the broadly based S&P 500® index. Additionally, the Start Date: September 29, 1986 fund edged its peer group average, which tracks the broader industrials sector. Size (in millions): $335.88 Q: How was the environment for transportation stocks the past 12 months฀ Investment Approach After selling off sharply for most of March 2020, U.S. equity markets bottomed late in the month and embarked on an • Fidelity® Select Transportation Portfolio is an industry- extended rally to new all-time highs, as market participants based, equity-focused strategy that seeks to outperform largely looked past near-term concerns about the economy its benchmark through active management. and ongoing COVID-19 pandemic. • We follow a fundamental, value-oriented investment A combination of aggressive monetary and fiscal stimulus by philosophy of buying stocks we believe are priced the federal government and progress toward reopening the cheaply, relative to peers, with respect to underlying economy fueled the advance in stock prices early on. company fundamentals. • We identify these stocks using Fidelity's in-depth Later in the period, stocks got a boost from improving company and industry research, focusing on good investor optimism over election results, good news on businesses in attractive spaces. Specifically, we look for vaccines and the passage of a $900 billion economic stimulus firms that are consistent profit generators and have bill in December. Additionally, it appeared that the new strong management teams that can produce returns Biden administration would have the votes to push through above their cost of capital, efficiently convert new another stimulus package roughly twice that size in 2021. income to free cash flow and/or capitalize on wide Transportation stocks participated in the rally to varying avenues for growth. Attractive industry groups are characterized by solid barriers to entry, differentiated degrees. Among the four largest groups within the MSCI products, disciplined pricing dynamics and inelastic industry index, air freight & logistics (+67%) and trucking demand. (+65%) stocks were especially strong, whereas railroads (+33%) underperformed. Airlines (+14%) made a strong • We seek to concentrate the portfolio in our best ideas, comeback later in the period but considerably trailed the but carefully manage risk through position sizing and other transportation segments, as air travel remained subindustry positioning. depressed throughout the period. • Sector and industry strategies could be used by investors as alternatives to individual stocks for either tactical- or Q: What hindered performance most versus the strategic-allocation purposes. MSCI transportation index฀ Broadly speaking, the fund was trailing the MSCI index at the period's halfway mark and fell further behind in the second half, as I underestimated the extent to which investors would embrace some "reopening winners," while other stocks lagged that I considered to have strong fundamentals.

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The portfolio's positioning among air freight & logistics On a stock-specific basis, an out-of-benchmark stake in TFI stocks was the largest drag on performance. In airlines, being International stood out as the top contributor compared with too cautious about the group from November through the MSCI index, gaining 129% during the period. This February hurt, as they were a key beneficiary of the expected company checked a lot of boxes for me. It offers a normalization of the U.S. economy. Non-index exposure to comprehensive suite of logistics and transportation services, aerospace & defense companies also detracted, as did a including truckload, LTL (less-than-truckload) and last-mile cash position averaging about 2%, which was a drawback in in the U.S., Canada and . It is founder-run a rising equity market. and has a great track record of successful M&A (mergers & acquisitions), with a proven ability to turn around previously Q: Which individual stocks detracted most฀ unprofitable companies. In January, the firm announced plans to acquire UPS's less-than-truckload business for about Versus the MSCI index, an overweight stake in Air Transport $800 million. This has been a roughly break-even business Services Group (+48%) hurt more than any other holding. for UPS, but I believe TFI can turn a decent profit with it. The company provides air leasing services throughout the world. During the mid-portion of 2020, I built this stock Underweighting three major air carriers also helped: Delta into a core position in the portfolio, and it ended the period Air Lines, and JetBlue Airways, with as our fourth-largest holding. As I'll explain in the callout returns of +1%, -37% and -23% in the portfolio, respectively. portion of this review, I thought Air Transport could help to The fund didn't own American at all at period end, and we alleviate some of the congestion that's built up in West Coast held only a token position in JetBlue. In retrospect, I wish I'd ports. shifted to an even smaller airline exposure early in the period and then bought more as prospects brightened for an I also considered it a positive that Amazon.com, which is one economic recovery. of the firm's largest customers, thought enough of it to take a part-ownership stake in the company. In retrospect, though, With that said, despite their strong performance in the the bulk of my purchases occurred after the stock had period's final few months, I still believe that, with all of the already registered most of its gain for the period, which hurt. debt they've taken on and the changes in people's behavior, many of these companies could face a long road to recovery. Two other holdings within the air freight & logistics category Additionally, I think leisure travel will be quicker to bounce that weighed on relative performance were lighter-than- back than business travel. It seems that the business benchmark positions in FedEx (+83%) and United Parcel community has quickly and successfully adapted to Service (UPS, +80%). I've been reluctant to overweight these videoconferencing and other remote working capabilities. two stocks mainly because of my concerns about the Consequently, I believe business air travel might suffer from profitability of business stemming from e-commerce. I've a more or less permanent shortfall in demand compared with since revised my thinking on this issue somewhat and the pre-pandemic environment. allowed FedEx, in particular, to move to an overweight by period end. I should also point out that UPS was the fund's Q: What's your outlook as of February 28, Matt฀ second-largest holding and top contributor in absolute terms the past 12 months. Overall, I believe that U.S. consumers' ability to set aside extra savings during the pandemic could drive a continued Also holding back the fund's relative result was an outsized increase in purchases of a variety of goods, which may be holding in SkyWest, which rose roughly 29% and therefore beneficial for transportation companies. I'll be watching underperformed our industry index. This well-run regional air trends in e-commerce and the impact of recent congestion in carrier, headquartered in Utah, runs daily flights, mainly shipping channels for clues as to how to position the fund through contracts with Alaska Airlines, American Airlines going forward. Group, and United Airlines. The company's contracts typically guarantee it a certain amount of revenue, The portfolio's biggest industry deviations from the MSCI regardless of how full the planes are, what discounts the index at period end are a large overweighting in air freight & major carrier has offered its customers and what happens to logistics and a sizable underweighting in airlines. ■ fuel prices. Even with these advantages, however, SkyWest's shares came under considerable pressure early in the pandemic. Consequently, I reduced the fund's exposure but maintained an overweighting in the stock, as I thought its business would rebound in a normalizing economy.

Q: How about notable contributors฀ The portfolio's relative return was aided by favorable picks and an underweighting in the marine segment this period.

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LARGEST CONTRIBUTORS VS. BENCHMARK

Average Relative Portfolio Manager Matt Moulis on Relative Contribution Holding Market Segment Weight (basis points)* investment opportunities created by TFI International, Inc. Trucking 2.34% 182 the COVID-19 pandemic: Delta Air Lines, Inc. Airlines -2.20% 72 Hertz Global Holdings, Trucking -0.05% 49 "The COVID-19 pandemic has resulted in Inc. considerable congestion in global shipping Kirby Corp. Marine -0.27% 48 channels. This congestion has been notably evident U.S. Xpress Trucking 0.21% 35 at the major West Coast ports of Los Angeles and Enterprises, Inc. Long Beach. Recently, more than 30 ships waited off * 1 basis point = 0.01%. the coast for a berth to open up, rivaling conditions during the 2015 dockworkers strike. "Moreover, the number of ships at anchor and LARGEST DETRACTORS VS. BENCHMARK waiting for a berth was north of 50, compared with about 20 for most of 2019 and early 2020. Average Relative Companies also faced a severe shortage of storage Relative Contribution Holding Market Segment Weight (basis points)* containers. Air Transport Services Air Freight & Logistics 2.66% -118 "Congestion such as this hinders getting goods to Group, Inc. market in a timely way, but it also offers In this SkyWest, Inc. Airlines 1.41% -115 regard, I particularly like Air Transport Services United Airlines Airlines -0.99% -101 Group, which is the biggest air-cargo leasing Holdings, Inc. company in the world, as well as a top-5 holding in FedEx Corp. Air Freight & Logistics -0.23% -86 the portfolio on February 28. Although air cargo isn't Old Dominion Freight Trucking -2.56% -84 a feasible way to ship certain types of goods, it can Lines, Inc. definitely help alleviate some of the pressure on * 1 basis point = 0.01%. congested ocean-cargo routes. "Atlas Air Worldwide Holdings – another fund holding – provides similar services and also stands to potentially benefit from easing the strain on clogged ports. "Lastly, I'll mention Hub Group, a position within the portfolio at the end of the period and provider of a suite of services, including intermodal, truck brokerage, trucking, managed transportation, freight consolidation, warehousing, last-mile delivery, international transportation and other logistics services in North America. With its comprehensive list of services, Hub Group is well- positioned to step in and solve logistical problems that might arise virtually anywhere in a supply chain."

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ASSET ALLOCATION

Relative Change From Six Months Asset Class Portfolio Weight Index Weight Relative Weight Ago Domestic Equities 91.43% 100.00% -8.57% -2.54% International Equities 6.29% 0.00% 6.29% 2.04% Developed Markets 5.40% 0.00% 5.40% 1.59% Emerging Markets 0.89% 0.00% 0.89% 0.45% Tax-Advantaged Domiciles 0.00% 0.00% 0.00% 0.00% Bonds 0.00% 0.00% 0.00% 0.00% Cash & Net Other Assets 2.28% 0.00% 2.28% 0.50% Net Other Assets can include fund receivables, fund payables, and offsets to other derivative positions, as well as certain assets that do not fall into any of the portfolio composition categories. Depending on the extent to which the fund invests in derivatives and the number of positions that are held for future settlement, Net Other Assets can be a negative number.

"Tax-Advantaged Domiciles" represent countries whose tax policies may be favorable for company incorporation.

MARKET-SEGMENT DIVERSIFICATION

Relative Change From Six Months Market Segment Portfolio Weight Index Weight Relative Weight Ago Air Freight & Logistics 35.29% 26.54% 8.75% 5.64% Railroads 29.86% 34.16% -4.30% -3.17% Trucking 21.14% 19.06% 2.08% 4.40% Airlines 5.57% 17.50% -11.93% -8.42% Marine 2.65% 2.20% 0.45% 0.90% Internet & Direct Marketing Retail 1.08% -- 1.08% 0.53% Airport Services 1.02% 0.53% 0.49% 0.22% Research & Consulting Services 0.54% -- 0.54% 0.07% Aerospace & Defense 0.47% -- 0.47% -0.30% Trading Companies & Distributors 0.05% -- 0.05% -0.03% Other 0.05% 0.00% 0.05% 0.05%

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10 LARGEST HOLDINGS

Portfolio Weight Market Segment Portfolio Weight Holding Six Months Ago Union Pacific Corp. Railroads 16.98% 20.99% , Inc. Class B Air Freight & Logistics 13.28% 15.01% CSX Corp. Railroads 7.89% 8.72% Air Transport Services Group, Inc. Air Freight & Logistics 6.00% 2.53% FedEx Corp. Air Freight & Logistics 4.32% 5.82% of Washington, Inc. Air Freight & Logistics 3.04% 3.92% Norfolk Southern Corp. Railroads 3.04% 2.82% Landstar System, Inc. Trucking 2.70% 2.78% C.H. Robinson Worldwide, Inc. Air Freight & Logistics 2.55% 3.06% Knight- Holdings, Inc. Class A Trucking 2.47% 1.43% 10 Largest Holdings as a % of Net Assets 62.27% 69.94% Total Number of Holdings 52 48 The 10 largest holdings are as of the end of the reporting period, and may not be representative of the fund's current or future investments. Holdings do not include money market investments.

FISCAL PERFORMANCE SUMMARY: Cumulative Annualized Periods ending February 28, 2021 6 1 3 5 10 Year/ Month YTD Year Year Year LOF1 Select Transportation Portfolio 14.96% 3.24% 34.62% 8.79% 13.39% 12.19% Gross Expense Ratio: 0.79%2 S&P 500 Index 9.74% 1.72% 31.29% 14.14% 16.82% 13.43% MSCI US IMI Transportation 25/50 Linked Index 20.53% 5.53% 44.40% 11.66% 15.78% 13.63% Morningstar Fund Industrials 23.68% 4.47% 34.26% 9.64% 14.92% 11.35% % Rank in Morningstar Category (1% = Best) -- -- 43% 66% 76% 48% # of Funds in Morningstar Category -- -- 44 39 33 29 1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 09/29/1986. 2 This expense ratio is from the prospectus in effect as of the date shown above and generally is based on amounts incurred during that fiscal year. It does not include any fee waivers or reimbursements, which would be reflected in the fund's net expense ratio. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. Performance shown is that of the fund's Retail Class shares (if multiclass). You may own another share class of the fund with a different expense structure and, thus, have different returns. To learn more or to obtain the most recent month-end or other share-class performance, visit fidelity.com/performance, institutional.fidelity.com, or 401k.com. Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated. Please see the last page(s) of this Q&A document for most-recent calendar- quarter performance.

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Definitions and Important Information Market-segment weights illustrate examples of sectors or industries in which the fund may invest, and may not be representative of the fund's current or future investments. They Information provided in this document is for informational and should not be construed or used as a recommendation for any educational purposes only. To the extent any investment information sector or industry. in this material is deemed to be a recommendation, it is not meant to be impartial investment advice or advice in a fiduciary capacity and is not intended to be used as a primary basis for you or your client's RANKING INFORMATION investment decisions. Fidelity, and its representatives may have a © 2021 Morningstar, Inc. All rights reserved. The Morningstar conflict of interest in the products or services mentioned in this information contained herein: (1) is proprietary to Morningstar material because they have a financial interest in, and receive and/or its content providers; (2) may not be copied or compensation, directly or indirectly, in connection with the redistributed; and (3) is not warranted to be accurate, complete or management, distribution and/or servicing of these products or timely. Neither Morningstar nor its content providers are services including Fidelity funds, certain third-party funds and responsible for any damages or losses arising from any use of this products, and certain investment services. information. Fidelity does not review the Morningstar data and, for mutual fund performance, you should check the fund's current FUND RISKS prospectus for the most up-to-date information concerning The value of the fund's domestic and foreign investments will vary applicable loads, fees and expenses. from day to day in response to many factors. Stock values fluctuate in response to issuer, political, regulatory, market, or economic % Rank in Morningstar Category is the fund's total-return developments. You may have a gain or loss when you sell your percentile rank relative to all funds that have the same Morningstar shares. Investments in foreign securities, especially those in Category. The highest (or most favorable) percentile rank is 1 and emerging markets, involve risks in addition to those of U.S. the lowest (or least favorable) percentile rank is 100. The top- investments, including increased political and economic risk, as well performing fund in a category will always receive a rank of 1%. % as exposure to currency fluctuations. Because FMR concentrates the Rank in Morningstar Category is based on total returns which fund's investments in a particular industry, the fund's performance include reinvested dividends and capital gains, if any, and exclude could depend heavily on the performance of that industry and could sales charges. Multiple share classes of a fund have a common be more volatile than the performance of less concentrated funds portfolio but impose different expense structures. and the market as a whole. The fund is considered non-diversified and can invest a greater portion of assets in securities of individual RELATIVE WEIGHTS issuers than a diversified fund; thus changes in the market value of a Relative weights represents the % of fund assets in a particular single investment could cause greater fluctuations in share price market segment, asset class or credit quality relative to the than would occur in a more diversified fund. The transportation benchmark. A positive number represents an overweight, and a industry can be significantly affected by changes in the economy, negative number is an underweight. The fund's benchmark is listed fuel prices, labor relations, insurance costs, and government immediately under the fund name in the Performance Summary. regulation.

IMPORTANT FUND INFORMATION Relative positioning data presented in this commentary is based on the fund's primary benchmark (index) unless a secondary benchmark is provided to assess performance.

INDICES It is not possible to invest directly in an index. All indices represented are unmanaged. All indices include reinvestment of dividends and interest income unless otherwise noted.

MSCI U.S. IMI Transportation 25/50 Index is a modified market- capitalization-weighted index of stocks designed to measure the performance of Transportation companies in the MSCI U.S. Investable Market 2500 Index. The MSCI U.S. Investable Market 2500 Index is the aggregation of the MSCI U.S. Large Cap 300, Mid Cap 450, and Small Cap 1750 Indices. Index returns shown for periods prior to January 1, 2010 are returns of the MSCI U.S. Investable Market Transportation Index.

S&P 500 is a market-capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.

MARKET-SEGMENT WEIGHTS

7 | PORTFOLIO MANAGER Q&A | AS OF FEBRUARY 28, 2021

Manager Facts

Matthew Moulis is a research analyst and portfolio manager in the Equity division at Fidelity Investments. Fidelity Investments is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing, and other financial products and services to institutions, financial intermediaries, and individuals.

In this role, Mr. Moulis is responsible for covering the transportation industry. Additionally, he manages Fidelity Select Air Transportation Portfolio and Fidelity Select Transportation Portfolio.

Prior to assuming his current responsibilities, Mr. Moulis covered the education services, alcoholic beverages, and alternative energy industries.

Before joining Fidelity in 2007, Mr. Moulis was an analyst at the Analysis Group. In this capacity, Mr. Moulis was responsible for working with a team to complete economic analyses and research, primarily for litigation purposes. He has been in the financial industry since 2007.

Mr. Moulis earned his bachelor of arts degree in economics and history from Bates College and his master of business administration degree from Massachusetts Institute of Technology (MIT) Sloan School of Management.

8 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A. PERFORMANCE SUMMARY: Annualized Quarter ending June 30, 2021 1 3 5 10 Year/ Year Year Year LOF1 Select Transportation Portfolio 54.50% 12.53% 15.99% 13.25% Gross Expense Ratio: 0.80%2 1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 09/29/1986. 2 This expense ratio is from the prospectus in effect as of the date shown above and generally is based on amounts incurred during that fiscal year. It does not include any fee waivers or reimbursements, which would be reflected in the fund's net expense ratio. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. Performance shown is that of the fund's Retail Class shares (if multiclass). You may own another share class of the fund with a different expense structure and, thus, have different returns. To learn more or to obtain the most recent month-end or other share-class performance, visit fidelity.com/performance, institutional.fidelity.com, or 401k.com. Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated.

Before investing in any mutual fund, please carefully consider Information included on this page is as of the most recent calendar the investment objectives, risks, charges, and expenses. For quarter. this and other information, call or write Fidelity for a free S&P 500 is a registered service mark of Standard & Poor's Financial prospectus or, if available, a summary prospectus. Read it Services LLC. carefully before you invest. Other third-party marks appearing herein are the property of their respective owners. Past performance is no guarantee of future results. All other marks appearing herein are registered or unregistered Views expressed are through the end of the period stated and do not trademarks or service marks of FMR LLC or an affiliated company. necessarily represent the views of Fidelity. Views are subject to change at any time based upon market or other conditions and Fidelity disclaims any Fidelity Brokerage Services LLC, Member NYSE, SIPC., 900 Salem Street, responsibility to update such views. These views may not be relied on as Smithfield, RI 02917. investment advice and, because investment decisions for a Fidelity fund Fidelity Distributors Company LLC, 500 Salem Street, Smithfield, RI are based on numerous factors, may not be relied on as an indication of 02917. trading intent on behalf of any Fidelity fund. The securities mentioned are © 2021 FMR LLC. All rights reserved. not necessarily holdings invested in by the portfolio manager(s) or FMR Not NCUA or NCUSIF insured. May lose value. No credit union guarantee. LLC. References to specific company securities should not be construed 739089.12.0 as recommendations or investment advice. Diversification does not ensure a profit or guarantee against a loss.