Morningstar® Investment Profile™   Morningstar®
Disclosure
  Format
for Print
Fidelity® Contrafund® K6  FLCNX
Release date as of 2022-05-31. Data on page is subject to change.
Snapshot Total Returns Ratings & Risk Portfolio Nuts & Bolts
  Morningstar Report
Overall Morningstar
Rating™
What is this?
As of 2022-05-31
Out of 1142
Large Growth Funds
Morningstar®
Style Box™
What is this?
As of 2022-04-30
Total Fund Assets ($ Mil)
21,154.14
View Historical Morningstar Star Ratings and Definitions
  Investment Objective & Strategy  
The investment seeks capital appreciation.
The fund normally invests primarily in common stocks. It invests in securities of companies whose value Fidelity Management & Research Company (FMR) believes is not fully recognized by the public. The fund invests in domestic and foreign issuers.
  Morningstar Category: Large Growth
Large-growth portfolios invest primarily in big U.S. companies that are projected to grow faster than other large-cap stocks. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Most of these portfolios focus on companies in rapidly expanding industries. 
  Performance
Growth of $10,000
(from 2017-05-25 to 2022-05-31)
Investment: Fidelity® Contrafund® K6
Benchmark 1: S&P 500 TR USD
Benchmark 2: Russell 1000 Growth TR USD
Category: Large Growth
This graph presents historical performance for the investment as well as an index and/or peer group. If the investment, index and/or peer group have performed similarly, the line representing the fund will overlay the index and/or peer group. Therefore, the line(s) representing the index and/or peer group history may be hidden.
Total Annualized Returns %
YTD 1 Year 3 Year 5 Year 10 Year Since Inception
Investment -21.05 -10.48 13.94 13.18 --- 13.29
S&P 500 TR USD -12.76 -0.30 16.44 13.38 --- 13.32
Russell 1000 Growth TR USD -21.88 -6.25 18.31 16.13 --- 16.11
Category -22.78 -13.03 13.67 12.96 --- 12.47
Morningstar Rating --- --- --- ---
# of compared Large Growth funds covered (3 yrs : out of 1142 funds) (5 yrs : out of 1054 funds) (10 yrs : out of 777 funds)
Ratings reflect risk-adjusted performance and are derived from a weighted average of the performance figures associated with its three, five and ten-year (if applicable) time periods.
Investment results shown represent historical performance and do not guarantee future results. Investment returns and principal values fluctuate with changes in interest rates and other market conditions so the value, when redeemed may be worth more or less than original costs. Current performance may be lower or higher than the performance data shown.
Fees and Expenses
Total Annual Operating Expense 0.45%
Prospectus Net Expense Ratio 0.45%
Maximum Sales Charge ---
The total annual operating expense shown is before management fee waivers or expense caps. For more information on waivers/reimbursements, please see the prospectus. The total annual operating expense is also referred to as the prospectus gross expense ratio.
Waiver Data
Type Date %
--- --- --- ---
  Portfolio Profile
Asset Allocation
% of Net Assets
Bullet U.S. Stocks U.S. Stocks 88.2
Bullet Non-U.S. Stocks Non-U.S. Stocks 6.5
Bullet Bonds Bonds 0.0
Bullet Cash Cash 4.5
Bullet Other Other 0.8
Asset Allocation Rescaled Graph
Data through 2022-04-30
Morningstar Equity Sectors
% of Stocks
Cyclical 33.24
Basic Materials 3.71
Consumer Cyclical 11.55
Financial Services 17.56
Real Estate 0.42
Sensitive 46.44
Communication Services 13.70
Energy 2.78
Industrials 3.78
Technology 26.18
Defensive 20.32
Consumer Defensive 3.96
Healthcare 16.08
Utilities 0.28
Data through 2022-04-30
Holding Status
Total Number of Stock Holdings 293
Total Number of Bond Holdings 0
% of Net Assets in Top 10 Holdings 46.94
Turnover % (as of 2021-12-31) 40.00
30 Day SEC Yield % ---
Top Holdings
Sector P/E % of Net
Assets
Berkshire Hathaway Inc Class A 8.54 7.01
Meta Platforms Inc Class A 14.68 6.47
Amazon.com Inc 57.99 5.87
Microsoft Corp 28.38 5.37
UnitedHealth Group Inc 27.19 5.16
Apple Inc 24.20 4.80
Fidelity Revere Str Tr --- --- 4.54
Alphabet Inc Class A 20.58 2.64
NVIDIA Corp 50.06 2.64
Alphabet Inc Class C 20.63 2.44
Data through 2022-04-30
  Principal Risks   
Foreign Securities, Loss of Money, Not FDIC Insured, Growth Investing, Value Investing, Issuer, Market/Market Volatility, Equity Securities
Show Risk Definitions
  Other Information
Inception Date: 2017-05-25
Portfolio Manager(s)
William Danoff   (2017-05-25)
Mr. Danoff has worked as a research analyst and portfolio manager since joining Fidelity Investments in 1986. Prior to joining the firm, he was a research analyst for Furman Selz in New York City, covering advertising stocks and special situations.
Investment Advisor(s)
Fidelity Management & Research Company LLC
Issuer
Fidelity Investments
Show Data Definitions

© Copyright 2022 Morningstar, Inc.
All rights reserved. Morningstar, the Morningstar logo, Morningstar.com, Morningstar Tools are either trademark or service marks of Morningstar, Inc. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or any losses arising from any use of information. Past performance is no guarantee of future performance.
Past performance is no guarantee of future results.
Returns will vary and shares may be worth more or less than their original cost when sold.
 Library
Morningstar® Investment Profile™   Morningstar®
Disclosure
  Format
for Print
Fidelity® Contrafund® K6  FLCNX
Release date as of 2022-05-31. Data on page is subject to change.
Snapshot Total Returns Ratings & Risk Portfolio Nuts & Bolts
  Growth of $10,000 from 2017-05-25 to 2022-05-31  
Investment: Fidelity® Contrafund® K6
Benchmark 1: S&P 500 TR USD
Benchmark 2: Russell 1000 Growth TR USD
Category: Large Growth
This graph presents historical performance for the investment as well as an index and/or peer group. If the investment, index and/or peer group have performed similarly, the line representing the fund will overlay the index and/or peer group. Therefore, the line(s) representing the index and/or peer group history may be hidden.
  Calendar Year Total Returns
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 05-22
Total return % --- --- --- --- --- --- -2.2 31.0 30.8 24.1 -21.1
S&P 500 TR USD --- --- --- --- --- --- -4.4 31.5 18.4 28.7 -12.8
Russell 1000 Growth TR USD --- --- --- --- --- --- -1.5 36.4 38.5 27.6 -21.9
Category --- --- --- --- --- --- -2.1 31.9 35.9 20.4 -22.8
% Rank in Cat --- --- --- --- --- --- 51 61 59 39 42
# of Funds --- --- --- --- --- --- 1405 1360 1289 1237 1282
Data through 2022-05-31
Investment results shown represent historical performance and do not guarantee future results. Investment returns and principal values fluctuate with changes in interest rates and other market conditions so the value, when redeemed may be worth more or less than original costs. Current performance may be lower or higher than the performance data shown.
  Total Annualized Returns
YTD 1 Year 3 Year 5 Year 10 Year Since Inception
Investment -21.05 -10.48 13.94 13.18 --- 13.29
S&P 500 TR USD -12.76 -0.30 16.44 13.38 --- 13.32
Russell 1000 Growth TR USD -21.88 -6.25 18.31 16.13 --- 16.11
Category -22.78 -13.03 13.67 12.96 --- 12.47
Morningstar Rating --- --- --- ---
# of compared Large Growth funds covered (3 yrs : out of 1142 funds) (5 yrs : out of 1054 funds) (10 yrs : out of 777 funds)
Ratings reflect risk-adjusted performance and are derived from a weighted average of the performance figures associated with its three, five and ten-year (if applicable) time periods.
  Quarterly Trailing Average Annualized Total Returns
YTD 1-Year 3-Year 5-Year 10-Year Since Inception
Total Avg. Ann. Return % -9.86 9.69 18.65 --- --- 16.93
Data through 2022-03-31
  Fees and Expenses
Total Annual Operating Expense 0.45%
Prospectus Net Expense Ratio 0.45%
Maximum Sales Charge ---
The total annual operating expense shown is before management fee waivers or expense caps. For more information on waivers/reimbursements, please see the prospectus. The total annual operating expense is also referred to as the prospectus gross expense ratio.
  Waiver Data
Type Date %
--- --- --- ---
Performance information may reflect historical or current expense waivers or reimbursements, without which, performance would have been lower.
Show Data Definitions

© Copyright 2022 Morningstar, Inc.
All rights reserved. Morningstar, the Morningstar logo, Morningstar.com, Morningstar Tools are either trademark or service marks of Morningstar, Inc. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or any losses arising from any use of information. Past performance is no guarantee of future performance.
Past performance is no guarantee of future results.
Returns will vary and shares may be worth more or less than their original cost when sold.
 Library
Morningstar® Investment Profile™   Morningstar®
Disclosure
  Format
for Print
Fidelity® Contrafund® K6  FLCNX
Release date as of 2022-05-31. Data on page is subject to change.
Snapshot Total Returns Ratings & Risk Portfolio Nuts & Bolts
  Morningstar Ratings
Morningstar
Return
Morningstar
Risk
Morningstar
Rating
Number of
Funds
3-Year Average Below Avg 1142
5-Year Average Average 1054
10-Year --- --- Not Rated 777
Overall Average Average 1142
Morningstar Category: Large Growth | Number of Funds in Category: 1142
Data through 2022-05-31
Ratings reflect risk-adjusted performance and are derived from a weighted average of the performance figures associated with its three, five and ten-year (if applicable) time periods.
  Volatility Measurements
Standard Deviation 19.30
Mean 13.94
Sharpe Ratio 0.74
Trailing 3-Yr as of 2022-05-31
  Modern Portfolio Theory Statistics
Best Fit Index
Russell 1000 Growth TR USD
R-Squared 98
Beta 0.93
Alpha -2.70
Trailing 3-Yr as of 2022-05-31
  Principal Risks   
Foreign Securities, Loss of Money, Not FDIC Insured, Growth Investing, Value Investing, Issuer, Market/Market Volatility, Equity Securities
Show Risk Definitions
Show Data Definitions

© Copyright 2022 Morningstar, Inc.
All rights reserved. Morningstar, the Morningstar logo, Morningstar.com, Morningstar Tools are either trademark or service marks of Morningstar, Inc. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or any losses arising from any use of information. Past performance is no guarantee of future performance.
Past performance is no guarantee of future results.
Returns will vary and shares may be worth more or less than their original cost when sold.
 Library
Morningstar® Investment Profile™   Morningstar®
Disclosure
  Format
for Print
Fidelity® Contrafund® K6  FLCNX
Release date as of 2022-05-31. Data on page is subject to change.
Snapshot Total Returns Ratings & Risk Portfolio Nuts & Bolts
  Style Box Details for Stock Holdings
Size
Average Mkt Cap $Mil 256,589
   
Market Capitalization % of Portfolio
Giant 63.76
Large 27.54
Medium 7.52
Small 1.10
Micro 0.08
   
Investment Valuation Stock
Portfolio
Forward P/E 18.5
Price/Book 3.4
Price/Sales 2.5
Price/Cash Flow 10.9
Dividend Yield 0.9
Long-Term Earnings 13.5
Historical Earnings 38.3
Sales Growth 13.4
Cash-Flow Growth 22.4
Book-Value Growth 13.5
As of 2022-04-30
Data as of 2022-04-30
  Asset Allocation
% of Net Assets
Bullet U.S. Stocks U.S. Stocks 88.2
Bullet Non-U.S. Stocks Non-U.S. Stocks 6.5
Bullet Bonds Bonds 0.0
Bullet Cash Cash 4.5
Bullet Other Other 0.8
Asset Allocation Rescaled Graph
Data through 2022-04-30
  Morningstar Equity Sectors
% of Stocks
Cyclical 33.24
Basic Materials 3.71
Consumer Cyclical 11.55
Financial Services 17.56
Real Estate 0.42
Sensitive 46.44
Communication Services 13.70
Energy 2.78
Industrials 3.78
Technology 26.18
Defensive 20.32
Consumer Defensive 3.96
Healthcare 16.08
Utilities 0.28
Data through 2022-04-30
  Top 25 Holdings
Total Number of Stock Holdings 293
Total Number of Bond Holdings 0
% of Net Assets in Top 10 Holdings 46.94
Turnover % (as of 2021-12-31) 40.00
30 Day SEC Yield % ---
Top 25 Holdings
Sector P/E % of Net
Assets
Berkshire Hathaway Inc Class A 8.54 7.01
Meta Platforms Inc Class A 14.68 6.47
Amazon.com Inc 57.99 5.87
Microsoft Corp 28.38 5.37
UnitedHealth Group Inc 27.19 5.16
Apple Inc 24.20 4.80
Fidelity Revere Str Tr --- --- 4.54
Alphabet Inc Class A 20.58 2.64
NVIDIA Corp 50.06 2.64
Alphabet Inc Class C 20.63 2.44
Eli Lilly and Co 46.57 1.90
Salesforce Inc 158.65 1.78
Costco Wholesale Corp 36.71 1.60
Visa Inc Class A 33.31 1.54
Regeneron Pharmaceuticals Inc 9.43 1.54
Amphenol Corp Class A 26.64 1.52
Qualcomm Inc 14.67 1.38
Bank of America Corp 10.60 1.23
Adobe Inc 41.36 1.20
Accenture PLC Class A 30.06 1.02
United Parcel Service Inc Class B 14.89 0.97
The Home Depot Inc 19.21 0.95
The Estee Lauder Companies Inc Class A 27.83 0.87
JPMorgan Chase & Co 9.80 0.82
Netflix Inc 17.92 0.76
Data through 2022-04-30
Show Data Definitions

© Copyright 2022 Morningstar, Inc.
All rights reserved. Morningstar, the Morningstar logo, Morningstar.com, Morningstar Tools are either trademark or service marks of Morningstar, Inc. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or any losses arising from any use of information. Past performance is no guarantee of future performance.
Past performance is no guarantee of future results.
Returns will vary and shares may be worth more or less than their original cost when sold.
 Library
Morningstar® Investment Profile™   Morningstar®
Disclosure
  Format
for Print
Fidelity® Contrafund® K6  FLCNX
Release date as of 2022-05-31. Data on page is subject to change.
Snapshot Total Returns Ratings & Risk Portfolio Nuts & Bolts
  Fees and Expenses Taken from prospectus dated 2022-03-01  
Maximum Sales Fees
Maximum Sales Charge ---
Maximum Fees
Administrative ---
Management 0.45%
12b-1 ---
Actual Fees
12b-1 ---
Management 0.45%
Prospectus Net Expense Ratio 0.45%
Total Annual Operating Expense 0.45%
Waiver Data
Type Date %
--- --- --- ---
  Management
Inception Date: 2017-05-25
Mngr Name William Danoff
Mngr Start Date 2017-05-25
Biography
Mr. Danoff has worked as a research analyst and portfolio manager since joining Fidelity Investments in 1986. Prior to joining the firm, he was a research analyst for Furman Selz in New York City, covering advertising stocks and special situations.
Investment Advisor(s)
Fidelity Management & Research Company LLC
Web Site
www.institutional.fidelity.com
Issuer
Fidelity Investments
Show Data Definitions

© Copyright 2022 Morningstar, Inc.
All rights reserved. Morningstar, the Morningstar logo, Morningstar.com, Morningstar Tools are either trademark or service marks of Morningstar, Inc. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or any losses arising from any use of information. Past performance is no guarantee of future performance.
Past performance is no guarantee of future results.
Returns will vary and shares may be worth more or less than their original cost when sold.

Morningstar Investment Profilessm: Disclosure Statement
Performance
Total return reflects performance without adjusting for sales charges or the effects of taxation, but is adjusted to reflect all actual ongoing investment expenses and assumes reinvestment of dividends and capital gains. If adjusted, sales charges would reduce the performance quoted. Due to market volatility, the investment's return may vary greatly over short periods of time.
For mutual funds, standardized total return is total return adjusted for sales charges. The sales charge utilized in the standard return calculation was obtained from the fund's most recent prospectus and/or shareholder report available to Morningstar. The investment option's performance is compared with that of an index. The index is an unmanaged portfolio of specified securities and the index does not reflect any initial or ongoing expenses. An index cannot be invested in directly. A fund's portfolio may differ significantly from the securities in the index.
For separate accounts and commingled funds, Net-of-Fee returns are collected on a monthly and quarterly basis. Morningstar calculates total returns using the raw data collected from the asset management firm or plan provider. The performance data reported by the separate account managers or plan provider represents actual performance net of trading expenses, management fees, brokerage commissions or other expenses. The investment option's performance is compared with that of an index. The index is an unmanaged portfolio of specified securities and the index does not reflect any initial or ongoing expenses. An index cannot be invested in directly. A fund's portfolio may differ significantly from the securities in the index. Clients should refer to the disclosure document of the separate account manager and their Summary Plan Description (SPD) for specific information regarding fees and expenses.
Growth of $10,000
Shows the growth of $10,000. The total returns are not adjusted to reflect sales charges or the effects of taxation, but are adjusted to reflect actual ongoing investment expenses, and assumes reinvestment of dividends and capital gains. If adjusted, sales charges would reduce the performance quoted.
Morningstar Rating, Risk and Return
The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
For private funds, the Morningstar Rating presented is hypothetical, because Morningstar does not independently analyze private funds. Rather, the rating is assigned as a means to compare these funds with the universe of mutual funds that Morningstar rates. The evaluation of this investment does not affect the retail mutual fund data published by Morningstar.
Overall ratings represent a weighted average of specific time period (3-, 5- and 10-year) ratings.
The Morningstar Return rates a fund's performance relative to other managed products in its Morningstar Category. It is an assessment of a product's excess return over a risk-free rate (the return of the 90-day Treasury Bill) in comparison with the products in its Morningstar category. In each Morningstar category, the top 10% of products earn a High Morningstar Return (High), the next 22.5% Above Average (+Avg), the middle 35% Average (Avg), the next 22.5% Below Average (-Avg), and the bottom 10% Low (Low). Morningstar Return is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the product. Products with less than three years of performance history are not rated.
Morningstar Risk evaluates a fund's downside volatility relative to that of other products in its Morningstar Category. It is an assessment of the variations in monthly returns, with an emphasis on downside variations, in comparison with the products in its Morningstar category. In each Morningstar category, the 10% of products with the lowest measured risk are described as Low Risk (Low), the next 22.5% Below Average (-Avg), the middle 35% Average (Avg), the next 22.5% Above Average (+Avg), and the top 10% High (High). Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the product. Products with less than three years of performance history are not rated.
Fidelity® Contrafund® K6
Morningstar Ratings (Relative to Category)
  Morningstar ReturnMorningstar RiskMorningstar Rating# of Funds
3-year AverageBelow Avg1142
5-year AverageAverage1054
10-year ------Not Rated777
Overall AverageAverage1142
Morningstar Category : Large Growth | Number of Funds in Category: 1142
Data through 2022-05-31
Risk Measures
R-squared reflects the percentage of an investment option's movements that are explained by movements in its benchmark index, showing the degree of correlation between the investment option and the benchmark.
Beta is a measure of an investment option's sensitivity to market movements. A portfolio with a beta greater than 1 is more volatile than the market, and a portfolio with a beta less than 1 is less volatile than the market. Alpha measures the difference between an investment option's actual returns and its expected performance, given its level of risk (as measured by beta).
The Sharpe ratio uses standard deviation and excess return to determine reward per unit of risk.
Standard deviation is a statistical measure of the volatility of the investment option's returns.
Mean represents the annualized three-year geometric return.
Morningstar Style BoxTM
The Morningstar Style Box reveals a fund's investment strategy as of the date noted on this report.
For equity funds, the vertical axis shows the market capitalization of the long stocks owned, and the horizontal axis shows the investment style (value, blend, or growth). A darkened cell in the style box matrix indicates the weighted average style of the portfolio.
For portfolios holding fixed-income investments, a Fixed Income Style Box is calculated. The vertical axis shows the credit quality based on credit ratings and the horizontal axis shows interest-rate sensitivity as measured by effective duration. There are three credit categories - "High", "Medium", and "Low"; and there are three interest rate sensitivity categories - "Limited", "Moderate", and "Extensive"; resulting in nine possible combinations. As in the Equity Style Box, the combination of credit and interest rate sensitivity for a portfolio is represented by a darkened square in the matrix. Morningstar uses credit rating information from credit rating agencies (CRAs) that have been designated Nationally Recognized Statistical Rating Organizations (NRSROs) by the Securities and Exchange Commission (SEC) in the United States. For a list of all NRSROs, please visit https://www.sec.gov/ocr/ocr-current-nrsros.html. Additionally, Morningstar will use credit ratings from CRAs which have been recognized by foreign regulatory institutions that are deemed the equivalent of the NRSRO designation. To determine the rating applicable to a holding and the subsequent holding weighted value of a portfolio two methods may be employed. First is a common methodology approach where if a case exists such that two CRAs have rated a holding, the lower rating of the two should be applied; if three or more CRAs have rated a holding, the median rating should be applied; and in cases where there are more than two ratings and a median rating cannot be determined, the lower of the two middle ratings should be applied. Alternatively, if there is more than one rating available an average can be calculated from all and applied. Please Note: Morningstar, Inc. is not an NRSRO nor does it issue a credit rating on the fund. Credit ratings for any security held in a portfolio can change over time.
Morningstar uses the credit rating information to calculate a weighted-average credit quality value for the portfolio. This value is based only upon those holdings which are considered to be classified as "fixed income", such a government, corporate, or securitized issues. Other types of holdings such as equities and many, though not all, types of derivatives are excluded. The weighted-average credit quality value is represented by a rating symbol which corresponds to the long-term rating symbol schemas employed by most CRAs. Note that this value is not explicitly published but instead serves as an input in the Style Box calculation. This symbol is then used to map to a Style Box credit quality category of "low," "medium," or "high". Funds with a "low" credit quality category are those whose weighted-average credit quality is determined to be equivalent to the commonly used High Yield classification, meaning a rating below "BBB", portfolios assigned to the "high" credit category have either a "AAA" or "AA+" average credit quality value, while "medium" are those with an average rating of "AA-" inclusive to "BBB-". It is expected and intended that the majority of portfolios will be assigned a credit category of "medium".
For assignment to an interest-rate sensitivity category, Morningstar uses the average effective duration of the portfolio. From this value there are three distinct methodologies employed to determine assignment to category. Portfolio which are assigned to Morningstar municipal-bond categories employ static breakpoints between categories. These breakpoints are: "Limited" equal to 4.5 years or less, "Moderate" equal to 4.5 years to less than 7 years; and "Extensive" equal to more than 7 years. For portfolios assigned to Morningstar categories other than U.S. Taxable, including all domiciled outside the United States, static duration breakpoints are also used: "Limited" equals less than or equal to 3.5 years, "Moderate" equals greater than 3.5 years but less than or equal to 6 years, and "Extensive" is assigned to portfolios with effective durations of more than 6 years.
Note: Interest-rate sensitivity for non-U.S. domiciled portfolios (excluding those in Morningstar convertible categories) may be assigned using average modified duration when average effective duration is not available.
For portfolios Morningstar classifies as U.S. Taxable Fixed-Income, interest-rate sensitivity category assignment is based on the effective duration of the Morningstar Core Bond Index (MCBI). The classification assignment is dynamically determined relative to the benchmark index value. A "Limited" category will be assigned to portfolios whose average effective duration is between 25% to 75% of MCBI average effective duration, where the average effective duration is between 75% to 125% of the MCBI the portfolio will be classified as "Moderate", and those portfolios with an average effective duration value 125% or greater of the average effective duration of the MCBI will be classified as "Extensive".
Investment Risk
Foreign Securities Investment Options:/Emerging Market Investment Options: The investor should note that investment options that invest in foreign securities involve special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.
Sector Investment Options: The investor should note that investment options that invest exclusively in one sector or industry involve additional risks. The lack of industry diversification subjects the investor to increased industry-specific risks.
Non-Diversified Investment Options: The investor should note that investment options that invest more of their assets in a single issuer involve additional risks, including share price fluctuations, because of the increased concentration of investments.
Small Cap Investment Options: The investor should note that investment options that invest in stocks of small companies involve additional risks. Smaller companies typically have a higher risk of failure, and are not as well established as larger blue-chip companies. Historically, smaller-company stocks have experienced a greater degree of market volatility than the overall market average.
Mid Cap Investment Options: The investor should note that investment options that invest in companies with market capitalizations below $10 billion involve additional risks. The securities of these companies may be more volatile and less liquid than the securities of larger companies.
High-Yield Bond Investment Options: The investor should note that investment options that invest in lower-rated debt securities (commonly referred to as junk bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. The investor should be aware of the possible higher level of volatility, and increased risk of default.
Yield
The yield of an investment option refers to the income generated by an investment in that investment option over an identified period of time. The SEC 30-day yield refers to the income generated by an investment over an identified 30-day period. The SEC 30-day yield is calculated by dividing: (I) the net investment income per share of the investment option earned over a 30-day period; by (II) the maximum offering price per share of the investment option on the last day of the period. This number is then annualized using semi-annual compounding. This means that the amount of income generated during the 30-day period is assumed to be generated each month over a 12-month period and is reinvested every six months. The yield does not necessarily reflect income actually earned by investing in the investment option because of certain adjustments required by the SEC and, therefore, may not correlate to the dividends or other distributions paid to shareholders.