PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021 Fidelity® Capital Appreciation Fund Key Takeaways MARKET RECAP ® • For the semiannual reporting period ending April 30, 2021, the fund's The S&P 500 index gained 28.85% for Retail Class shares advanced 26.28%, trailing the 28.85% gain of the the six months ending April 30, 2021, benchmark, the S&P 500® index. with U.S. equities rising on the prospect of a surge in economic growth amid widespread COVID-19 vaccinations, fiscal • Co-Managers Jason Weiner and Asher Anolic made several stimulus that included a third round of idiosyncratic picks for the fund the past six months that offset relief payments and fresh spending investments in cyclical stocks that outperformed amid increasing programs. In November, stocks shrugged prospects for an economic recovery. off a two-month retreat by gaining 11%, as investors digested results of the U.S. • Non-benchmark investments in two China-based companies – e- elections. The momentum continued in commerce giant Alibaba Group Holding and tech media and December, with the approval of two entertainment conglomerate Tencent Holding – detracted notably. breakthrough COVID-19 vaccines and prospects for additional government • On the positive side, an overweighting in Capital One Financial stimulus. As the calendar turned, contributed significantly, as did a sizable stake in industrial investors saw reasons to be hopeful. The conglomerate General Electric. rollout of two COVID-19 vaccines was underway, the U.S. Federal Reserve pledged to hold interest rates near zero • As of April 30, Jason and Asher believe stock valuations already reflect until the economy recovered, and the the initial leg of an economic recovery, which is why they remain federal government would deploy focused on bottom-up security selection, as opposed to investing trillions of dollars in aid to boost broadly in cyclical industries. consumers and the economy. This backdrop fueled a powerful market • The managers see three main types of opportunities at period end: rotation, with small-cap value stocks Companies with increasing earnings with stocks that still trade at a usurping long-standing leadership from discount to the market; recovery plays in which a rebound is not large growth shares. As part of the reflected in the current stock price; and certain health care and "reopening" trade, investors moved out communications stocks. of tech-driven mega-caps that had thrived due to the work-from-home trend in favor of cheap smaller companies they believed stood to benefit from a broad cyclical recovery. Reflecting this shift, the energy sector gained 76% for the six months, boosted by a sharp rally in the price of oil. Financials (+54%) rode strength among banks (+69%). Conversely, notable "laggards" included the defensive utilities (+9%) and consumer staples (+13%) sectors. Not FDIC Insured • May Lose Value • No Bank Guarantee PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021 Q&A An interview with Co-Portfolio Managers Asher Anolic and Jason Weiner Asher Anolic Jason Weiner Q: Asher, how did the fund perform for the six Co-Manager Co-Manager months ending April 30, 2021฀ A.A. The fund's Retail Class shares advanced 26.28%, trailing Fund Facts the 28.85% gain of the benchmark, the S&P 500® index, and outpacing the peer group average of large-cap growth funds. Trading Symbol: FDCAX Looking a bit longer term, the fund gained 56.10% for the Start Date: November 26, 1986 trailing 12 months, significantly besting both the benchmark and peer average. Size (in millions): $6,619.62 Q: What did you find notable about the fund's performance the past six months฀ Investment Approach A.A. We made several idiosyncratic picks that did not work in the fund's favor. • Fidelity® Capital Appreciation Fund is a diversified domestic equity strategy that seeks capital appreciation. For instance, a record antitrust fine in April of about $3.6 billion by the Chinese government hurt our non-benchmark • Our core philosophy is that stock prices follow earnings stake in e-commerce giant Alibaba Group Holding (-25%). growth, and the fund skews toward the fastest quartile of Also, regulators forced Ant Group, the operator of the earnings growers, with an emphasis on quality. popular digital payment app Alipay that is a third-owned by • We employ a "go-anywhere" approach, favoring Alibaba, to make changes to its business, which delayed its companies with growth catalysts, such as new products, anticipated initial public stock offering. acquisitions or turnaround situations. It also hurt the fund to own Tencent Holding (+5%), a • We emphasize fundamental, bottom-up research, with a Chinese tech, media and entertainment conglomerate that focus on driving results through security selection. suffered guilt by association to Alibaba, as some investors feared additional antitrust actions against China-based retail technology and e-commerce companies. By period end, we reduced the fund's positions in Alibaba and Tencent, but continued to see long-term potential in fast-growing markets for each. Q: Jason, which other stocks detracted฀ J.W. Untimely ownership of social media leader Facebook (+23%) hurt the fund. We overweighted this stock, on average, but reduced our Facebook stake by period end and added to the fund's position in Google parent Alphabet, where we saw better potential for advertising growth. In hindsight, we should have added to Facebook as well. Owning Regeneron Pharmaceuticals (-12%) also detracted. This holding had been an early-pandemic beneficiary behind the strength of its COVID-fighting antibody treatment. Due to the broad distribution of vaccines, the antibody treatment became less exciting – though not less important. We still see Regeneron as a best-in-class innovator in biotech, with 2 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A. PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021 an exciting pipeline that includes its inflammatory disease but not owning it during the past six months was the right mediator Dupixent. We held a sizable position in Regeneron call, as the stock underperformed. on April 30. Lastly, in health care, it hurt to own Haemonetics (-32%), a Q: What's your outlook as of April 30, Asher฀ global supplier of blood and plasma supplies and services. A.A. We believe stock valuations already reflect the initial leg We thought Haemonetics would benefit from demand for of the recovery. the company's new plasma-collection platform as worldwide We don't have a clear view on where the market moves from shortages would drive increased demand for plasma. We here, but we're we think a bottom-up stock-picking mentality didn't anticipate that CSL Plasma, a Haemonetics customer, may yield more benefit in the next 12 to 24 months than would decline to renew an agreement this period and investing broadly in cyclical industries. instead move its plasma collection in-house. At period end, we're seeing three types of opportunities: Q: Which stocks contributed฀ Well-known companies with increasing earnings with stocks that still trade at a discount to the market; recovery plays in J.W. Selling shares of fund holdings that had become more which a rebound is not reflected in the current stock price; expensive the past six months to opportunistically purchase and certain health care and communications stocks, where shares of select industrials and financial services companies we believe an overreaction to U.S regulations could be where we saw value contributed. These names rallied when corrected in time. ■ the market realized the potential for a strong economic recovery due to the rollout of COVID-19 vaccines. Capital One Financial (+104%) added more value than any other individual stock. The company's consumer-focused credit portfolio held up amid the pandemic and the stock performed well due to economic recovery prospects. Even after shares more than doubled for the period, we still saw Capital One as one of the better-positioned financial companies that's focused on consumer credit, due to its solid liability portfolio and its high-yielding asset base. Elsewhere, a non-benchmark position in Uber (+63%) contributed, as the company experienced rising demand for its ride-sharing services as the economy improved. Q: Where else did you find positive results฀ J.W. Overweighting General Electric (+77%) benefited relative performance this period. GE is a turnaround story with a world-class CEO that we think could see improvement in its aerospace business later in the market cycle. This period, GE largely tabled questions about its solvency due to a well-timed sale of part of its health care business and its aircraft leasing portfolio. GE remains a large position in the fund at period end. I'll also point to Change Healthcare (+69%), a health care technology company we thought could benefit from fully realizing synergies from previous acquisitions. As it turns out, UnitedHealth Group liked this business as well and announced plans to buy the company in January. The deal was not completed by April 30. We sold the stock by period end to take profit. It also helped to avoid consumer goods giant Procter & Gamble (-1%). We think P&G is a great company with a richly priced stock. It remains on our radar screen at period end, 3 | For definitions, fund risks and other important information, please see the Definitions and Important Information section of this Q&A. PORTFOLIO MANAGER Q&A | AS OF APRIL 30, 2021 LARGEST CONTRIBUTORS VS. BENCHMARK Average Relative Jason Weiner on the importance of Relative Contribution Holding Market Segment Weight (basis points)* the semiconductor industry: Capital One Financial Financials 1.07% 58 Corp. "Semiconductors are powering autonomous driving, General Electric Co.