|
||||||||||||||||||||||||||
| SEC Info℠ | | | Home | | | Search | | | My Interests | | | Help | | | Sign In | | | Please Sign In | |||||||
|
||||||||||||||||||||||||||
As Of Filer Filing For·On·As Docs:Size Issuer Agent 3/15/07 Fidelity Advisor Series VIII DEFA14C 3/15/07 1:32K Fidelity Adv Series I → Fidelity Advisor Diversified International Fund ⇒ Class A (FDVAX) — Class B (FDIBX) — Class C (FADCX) — Class I (FDVIX) — Class M (FADIX) → Fidelity Advisor Global Capital Appreciation Fund ⇒ Class A (FGEAX) — Class B (FGEBX) — Class C (FEUCX) — Class I (FEUIX) — Class M (FGETX) → Fidelity Advisor International Capital Appreciation Fund ⇒ Class A (FCPAX) — Class B (FCPBX) — Class C (FCPCX) — Class I (FCPIX) — Class M (FIATX) → Fidelity Advisor Japan Fund ⇒ Class A (FJPAX) — Class B (FAJBX) — Class C (FAJCX) — Class T (FAJTX) — Institutional Class (FAJIX) → Fidelity Advisor Value Leaders Fund ⇒ Class A (FVLAX) — Class B (FVLBX) — Class C (FVLCX) — Class I (FVLIX) — Class M (FVLTX) |
Document/Exhibit Description Pages Size 1: DEFA14C Additional Definitive Proxy Information Statement HTML 31K
|
SCHEDULE 14A INFORMATION |
||||
|
|
||||
|
PROXY STATEMENT PURSUANT TO SECTION 14(a) |
||||
|
OF THE SECURITIES EXCHANGE ACT OF 1934 |
||||
|
|
||||
|
|
Filed by the Registrant |
[X] |
||
|
|
Filed by a Party other than the Registrant |
[ ] |
||
|
|
||||
|
Check the appropriate box: |
||||
|
|
||||
|
[ ] |
Preliminary Proxy Statement |
|||
|
[ ] |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
|||
|
[ ] |
Definitive Proxy Statement |
|||
|
[ ] |
Definitive Additional Materials |
|||
|
[X] |
Soliciting Material under Rule 14a-12 |
|||
|
|
||||
|
|
Fidelity Advisor Series VIII |
|||
|
|
(Name of Registrant as Specified In Its Charter) |
|||
|
|
||||
|
Payment of Filing Fee (Check the appropriate box): |
||||
|
|
||||
|
[X] |
No fee required. |
|||
|
[ ] |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|||
|
|
(1) |
Title of each class of securities to which transaction applies: |
||
|
|
(2) |
Aggregate number of securities to which transaction applies: |
||
|
|
(3) |
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: |
||
|
|
(4) |
Proposed maximum aggregate value of transaction: |
||
|
|
(5) |
Total Fee Paid: |
||
|
[ ] |
Fee paid previously with preliminary materials. |
|||
|
[ ] |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
|||
|
|
(1) |
Amount Previously Paid: |
||
|
|
(2) |
Form, Schedule or Registration Statement No.: |
||
|
|
(3) |
Filing Party: |
||
|
|
(4) |
Date Filed: |
||
FOR INVESTMENT PROFESSIONAL AND PLAN SPONSORS USE ON ADVISOR.FIDELITY.COM
Q&A Re: Proposal to add Performance Adjustments to Fidelity Advisor Funds
March 2007
Q1: I noticed an SEC filing indicating that Fidelity® is planning to add performance fees to a number of Advisor funds. What can you tell me about it?
A1. Yes. The funds' Board of Trustees has approved submitting a proposal to shareholders to add performance fees on several Advisor equity funds.
The funds are:
Domestic
FA Aggressive Growth
FA Dividend Growth
FA Dynamic Capital Appreciation
FA Equity Growth
FA Equity Value
FA Large Cap
FA Mid Cap
FA Mid Cap II
FA New Insights
FA Small Cap
FA Strategic Growth
FA Value
FA Value Leaders
FA Value Strategies
International
FA Diversified International
FA Global Capital Appreciation
FA International Capital Appreciation
FA Japan
Q2. How many Fidelity funds have a performance adjustment today?
A2. Forty-nine Fidelity funds currently have a performance adjustment. Please see the final 2 pages of this document for the current list of Fidelity funds with performance adjustments.
Q3. Why is Fidelity doing this?
A3. We believe this makes sense for shareholders because it helps to more closely align our economic interests with theirs.
Fidelity's performance adjustment is structured so that when a fund's performance beats its index's performance, we receive a higher management fee, and when a fund's performance lags its index's performance, the fund's management fee is reduced.
Q4. Have you used performance fees for a long time?
A4. We started the practice in the early 1970's and have found it to make sense for shareholders because it helps to more closely align our economic interests with theirs. As part of our ongoing process of reviewing and enhancing our mutual fund product lines, we are now asking shareholders to approve the addition of performance fees on certain Advisor equity funds.
Q5. Will you have performance adjustments on all the Advisor funds?
A5. No. We have generally limited performance adjustments to domestic and international equity funds that seek capital appreciation or long-term growth and that have appropriate benchmarks to use for comparison.
Q6. Will the performance fees result in higher fees?
A6. We don't know whether the management fees will be higher or lower with a performance fee. Going forward, that will depend solely on the funds' performance relative to their index following shareholder approval. It's important to remember that performance fees can work both ways - shareholders pay less when a fund underperforms its benchmark and more when a fund outperforms the index. No one can predict future returns for any fund or index. Said differently, the performance of the funds relative to their indexes that occurred prior to shareholder approval will not count in calculating the performance fees paid to Fidelity.
Q7. How will the performance fee be calculated?
A7. The upward or downward adjustments are made depending on whether, and to what extent, a fund's investment performance over the most recent 36-month period exceeds, or is exceeded by, the record of its benchmark index over the same period. The performance comparison and fee is assessed on a monthly basis. The maximum adjustment rate is +/- 0.20% or 20 basis points of a fund's average net assets over the performance period - which is 36 months. The exact details of the calculation can be found in the proxy statement, and if shareholders approve the proposal, will appear in each fund's Statement of Additional Information (SAI).
Q8. Which share class will you base the calculation of the performance on?
A8. We are recommending that the standard performance adjustment for most funds be based on the performance of the Institutional Class, which does not have any fund-paid 12b-1 fees. We believe this method, which eliminates the impact of 12b-1 fees on the performance fee calculation, most closely reflects our skill as an investment manager.
Q9. Please elaborate further on how the performance adjustment is calculated.
A9. Performance adjustments are calculated monthly based on trailing 36-month fund returns vs. a stated benchmark. The standard performance adjustment rate is +/- 2 basis points (annualized) for each percentage point of out-performance or underperformance, with a maximum adjustment of +/- 20 basis points.
For example, for a fund that outperformed its index by 8 percentage points over 36 months, the performance adjustment rate would be +16 basis points (2 basis points multiplied by 8).
The resulting basis points rate is applied to average net assets for the 36-month performance period to arrive at an annualized dollar amount.
Q10. When will the performance fee be effective?
A10. We expect the addition of the performance fee adjustments to take place throughout the year as shareholders vote on the different funds. Specifically, the performance period will begin the month following shareholder approval. The performance adjustment will take effect starting with the twelfth month of the performance period. Each month after that, another month's performance will be included in the calculation until the 36-month performance period is reached.
Q11. Does the maximum +/- 20 basis points performance fee range mean that a fund's expense ratio will never be impacted by more or less than 20 basis points due to a performance adjustment?
A11. No. Fidelity applies performance adjustments to 36-month average assets rather than current assets. As a result, performance fees can be more than 20 basis points or less than -20 basis points when measured against current assets.
For example, for a fund that outperformed its index by 8 percentage points, the performance adjustment rate would be +16 basis points (2 basis points multiplied by 8). If the fund's current assets were the same as its 36-month average assets, the performance adjustment would be 16 basis points based on current assets also. However, if the fund's current assets were double its 36-month average assets, the performance adjustment would be just 8 basis points based on current assets. Similarly, if the fund's current assets were half the 36-month average, the performance adjustment would be 32 basis points based on current assets.
Therefore, the performance adjustment is effectively capped at +/- 10% of over/under-performance versus the benchmark over the performance period.
Q12. Why is it over a 36-month period?
A12. We believe that a 36 month period is an appropriate measure because it rewards longer term performance rather than short term gains. Across the industry, several fund complexes use a 12 month fee period; however, we think a 36 month period is a more appropriate period to evaluate our skill as an investment manager.
Q13. Can you please walk me through an example of how the performance adjustment would increase the management fee?
A13. Yes, let's begin our example with the assumption we receive shareholder approval in December 2006.
The Performance Period would begin the month after shareholder approval, or January 1, 2007.
The Performance Adjustment would take effect in the 12th month of the Performance Period. In this case, the first adjustment would apply in December 2007.
The fund's performance relative to its performance adjustment index would be based on the 12 month period 1/1/07 through 12/31/07.
Let's assume our fund outperforms the benchmark by 5 percentage points, or 500 basis points, over that period.
The Annualized Performance Adjustment Rate will equal 10 basis points (2 basis points for every 100 basis points of out-performance, or 2*5 = 10 basis points).
We will make the assumption that the average assets over the same performance period (1/1/07 through 12/31/07) was $1 billion.
A Performance Fee Adjustment of $83,333 ((10 basis points * $1billion)/12) would be applied in Dec. ´07.
Let's assume the average assets for Dec. ´07 were also $1 billion with a base management fee rate of 57 basis points.
Basic Management Fee in Dollars for Dec. ´07 = ($1B * 57 basis points) / 12 = $475,000
Total Management Fee including Performance Adjustment in Dollars for Dec. ´07 = $558,333 ($475,000+$83,333)
Effective Total Management Fee Rate for Dec. ´07 = ($558,333 / $1B)*12 = 67 basis points (a basic management fee of 57 basis points and a positive performance fee of 10 basis points)
Note: Keep in mind that the management fee and performance fee are calculated monthly and the total management fee shown in the prospectus (basis points) and Annual Report ($) is the aggregation of 12 months of calculations.
Q14. Can you please walk me through an example of how the performance adjustment would decrease the management fee?
A14. Yes. Let's begin our example with the assumption we received shareholder approval in December 2006.
The Performance Period would begin the month after shareholder approval, or January 1, 2007.
The Performance Adjustment would take effect in the 12th month of the Performance Period. In this case, the first adjustment would apply in December 2007.
The fund performance relative to performance adjustment index would be based on the 12 month period 1/1/07 through 12/31/07.
Let's assume our fund underperforms the benchmark by 5% pts or 500 basis points over that period.
The Annualized Performance Adjustment Rate will equal -10 basis points (2 basis points for every 100 basis points of under-performance, or 2 * -5, = -10 basis points).
We will make the assumption that the average assets over the same performance period (1/1/07 through 12/31/07) was $1 billion.
A Performance Fee Adjustment of -$83,333 (-10 basis points * $1billion /12) would be applied December 07.
Let's assume the average assets for December ´07 were also $1 billion with a base management fee of 57 basis points.
Basic Management Fee in Dollars for Dec. ´07 = ($1B * 57 basis points) / 12 = $475,000.
Total Management Fee including Performance Adjustment in Dollars for Dec. ´07 = $391,667 ($475,000-$83,333).
Effective Total Management Fee Rate for Dec. ´07 = ($391,667 / $1B)*12 = 47 basis points (a basic management fee of 57 basis points and a negative performance fee of 10 basis points)
Note: Keep in mind that the management fee and performance fee are calculated monthly and the total management fee shown in the prospectus (basis points) and Annual Report ($) is the aggregation of 12 months of calculations.
Q15. Will a performance adjustment affect the expense ratio stated in the prospectus?
A15. Yes. Because the management fee, which is a component of the expense ratio, may be adjusted upward or downward with the performance adjustment, the expense ratio disclosed in a fund's prospectus will be impacted by the performance adjustment.
Note: The expense ratio shown in the prospectus reflects the fund's expenses in effect for the fund's prior fiscal period (12 months). As a result, the current management fee rate and total expense ratio may be higher or lower than the rate disclosed in the prospectus fee table, which reflects the performance adjustments for the most recent fiscal period.
Q16. Is Fidelity's maximum +/- 20 basis points performance fee range typical among fund competitors?
A16. Performance fee ranges vary widely among competitor funds with performance fees. However wide the range is, though, the law requires it to be symmetrical on the positive and negative sides.
Some characteristics are common between Fidelity and competitors. For example, like Fidelity, most competitor complexes use a securities index (vs. a peer group) for the performance adjustment index, and several complexes uses a 36-month performance period (although many use a 12-month performance period).
Q17. Are performance fees common in the mutual fund industry?
A17. Approximately 30-40 fund complexes use performance fees to some extent, with Fidelity being one of the largest users in terms of number of funds with performance fees. In addition, as of 12/31/06, Fidelity had more assets subject to performance adjustments than any other fund complex.
Fidelity funds that have management fees with a Performance Adjustment component
Advisor Growth Opportunities Russell 1000 Growth
Advisor Overseas MSCI EAFE
Advisor International Discovery* MSCI EAFE
Advisor International Small Cap* MSCI EAFE Small Cap
Advisor Intl Small Cap Opps* MSCI EAFE Small Cap
Advisor International Value* MSCI EAFE Value
Advisor Large Cap Growth* Russell 1000 Growth
Advisor Large Cap Value* Russell 1000 Value
Advisor Mid Cap Growth* Russell Mid Cap Growth
Advisor Mid Cap Value* Russell Mid Cap Value
Advisor Small Cap Growth* Russell 2000 Growth
Advisor Small Cap Value* Russell 2000 Value
Aggressive Growth Russell Mid-Cap Growth
Aggressive International MSCI AC World Free Ex US
Blue Chip Growth Russell 1000 Growth
Blue Chip Value Russell 1000 Value
Canada S&P/TSX Composite
Capital Appreciation S&P 500
Contrafund S&P 500
Convertible Securities ML All Convertible Securities
Disciplined Equity S&P 500
Diversified International MSCI EAFE
Dividend Growth S&P 500
Europe MSCI Europe
Europe Capital Appreciation MSCI Europe
Fidelity Fifty S&P 500
Focused Stock S&P 500
Growth Company Russell 3000 Growth
Growth Discovery Fund Russell 3000 Growth
Independence Fund S&P 500
Japan TOPIX
Large Cap Stock S&P 500
Low-Priced Stock Russell 2000
Magellan S&P 500
Mid-Cap Stock S&P Mid-Cap 400
New Millennium S&P 500
OTC Portfolio NASDAQ Composite
Overseas MSCI EAFE
Pacific Basin MSCI AC Pacific Free
Small Cap Independence Russell 2000
Advisor classes pending
* Fund also has a retail class
Small Cap Retirement Russell 2000
Small Cap Stock Fund Russell 2000
Southeast Asia MSCI AC Far East ex-Japan Free
Stock Selector S&P 500
Trend Russell 1000 Growth (2/1/07)
Utilities Russell 3000 Utilities
Value Russell Mid Cap Value
Value Discovery Russell 3000 Value
Worldwide MSCI World
Past performance is no guarantee of future results.
All indices are unmanaged and assume the reinvestment of all distributions. It is not possible to invest directly in an index.
Stock values fluctuate in response to the activities of individual companies and general market and economic conditions.
Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets.
Information contained herein is subject to completion or amendment. Please read the proxy statements when they become available because they contain important information. The preliminary and definitive proxy statements can be accessed free of charge on www.sec.gov.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Call or write to Fidelity or visit advisor.fidelity.com for a prospectus containing this information. Read it carefully.
Fidelity Investments Institutional Services Co., Inc.
82 Devonshire Street
457927.1.0
| This ‘DEFA14C’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| Filed on / Effective on: | 3/15/07 | None on these Dates | ||
| 1/1/07 | ||||
| List all Filings | ||||