Fidelity Management & Research

100%

Specialty U.S. stock fund, focusing on value-oriented small capitalization stocks

Russell 2500 Value Index

Actively Managed

Fidelity Management & Research

Fees and expenses are only one of several factors that should be considered when making investment decisions. More information on fees and expenses can be found in the FAQs on the MyFRS.com website.

On an annual basis, marketing companies estimate the fees that FRS Investment Plan participants will pay as a percentage of their mutual fund account assets; e.g., 0.50% per year. These figures reflect any rebates or reductions negotiated by the State Board of Administration and are published in the Fund Profiles and other plan materials.

However, the actual fees you would pay as an investor in a mutual fund are not guaranteed and will vary over time when expressed as a percent of asset values. Mutual fund boards of directors can change fees without the FRS's permission. Changes occur throughout the year in the day-to-day expenditures made by mutual funds to cover their operating expenses and these changes are passed through to shareholders. The amount of assets under management changes from period to period and so fees expressed as a ratio of assets will vary, even if the actual dollar expenditures do not. Also, some mutual funds have fees that can rise or fall depending on performance compared to a benchmark.

The actual expenses paid for mutual funds included in the FRS Investment Plan are detailed in their annual or semi-annual reports for previous periods. These reports are available free of charge by calling the MyFRS Financial Guidance Line (1-866-446-9377). Please note that these reports will not reflect any rebates or reductions negotiated by the State Board of Administration.

There are no specifically assigned reserach analysts on any of our funds, as they are a pooled resource. This fund is managed out of our Boston office. On a global basis, the Fidelity Research Analysts are broken out by 7 major industry sectors: Consumers, Cyclicals, Financials, Healthcare, Natural Resources, Technology, and Utilities. There are 4 Industry Sector Leaders for each sector, one based in Boston, one in London, one in Hong Kong, and one in Tokyo. These 28 senior sector analysts are responsible for all coverage of that particular sector on a global basis, and also typically run our sector funds (Select Portfolios).

The fund manager has a value orientation when conducting fundamental research, even though the fund is not specifically a "value fund." The fund manager utilizes a fundamental, bottom-up investment process to identify investment opportunities, specifically looking for stocks priced at $35 or less at time of purchase, with modest valuations, good return on capital, strong or improving cash flows, and improving business environments. Other factors that are closely considered is the strength of management, the sustainability of growth rates, whether or not the firm has a defendable market niche, and the stock's relative valuation.

The fund will typically invest at least 65% of the fund's total net assets in securities at or below $35 per share at the time of purchase. The fund cannot own more than 5% of the funds total assets in one security, nor can the fund own more than 10% of the outstanding voting securities of that issuer. In addition the fund cannot purchase a security of any issuer if, as a result, more than 25% of the funds total assets would be invested in securities of companies whose principle business activities are in the same industry. The fund's typical market capitalization distribution is a function of the security prices within the portfolio.

The fund doesn't have a strict sell discipline, however if the manager sees the stock's valuation is fully realized, that the business or industry outlook is deteriorating, or the firm's competitive position is declining, the manager may elect to sell the stock.