Fidelity Income Allocation Fund

Investment Strategy

Tactical allocation among income-oriented asset classes

Fidelity Income Allocation Fund offers exposure to multiple fixed income asset classes and income-oriented equities and aims to provide investors with monthly yield and total return potential in a tactical asset allocation fund.

Performance

Annual compound performance – as at 31-Dec-2011

	Fund	Morningstar Quartile*	Benchmark
1 month	1.75%	1	1.92%
3 month	3.63%	1	3.45%
6 month	2.93%	1	4.79%
1 year	7.00%	1	8.60%
2 year	9.01%	1	10.15%
3 year	18.24%	1	18.34%
5 year	6.20%	1	6.68%
7 year	—	—	—
10 year	—	—	—
YTD	7.00%	1	8.60%
Since Inception	9.31%	—	7.66%

Calendar year performance – as at 31-Dec-2011

Growth of $10,000 since inception – as at 31-Jan-2012

Annual compound performance – as at 31-Dec-2011

	Fund	Morningstar Quartile*	Benchmark
1 month	1.77%	1	1.92%
3 month	3.69%	1	3.45%
6 month	3.03%	1	4.79%
1 year	7.22%	1	8.60%
2 year	9.24%	1	10.15%
3 year	18.49%	1	18.34%
5 year	6.42%	1	6.68%
7 year	—	—	—
10 year	—	—	—
YTD	7.22%	1	8.60%
Since Inception	9.52%	—	7.66%

Calendar year performance – as at 31-Dec-2011

Growth of $10,000 since inception – as at 31-Jan-2012

Annual compound performance – as at 31-Dec-2011

	Fund	Morningstar Quartile*	Benchmark
1 month	1.84%	—	1.92%
3 month	3.91%	—	3.45%
6 month	3.49%	—	4.79%
1 year	8.17%	—	8.60%
2 year	10.28%	—	10.15%
3 year	19.66%	—	18.34%
5 year	7.51%	—	6.68%
7 year	—	—	—
10 year	—	—	—
YTD	8.17%	—	8.60%
Since Inception	10.64%	—	7.66%

Calendar year performance – as at 31-Dec-2011

Growth of $10,000 since inception – as at 31-Jan-2012

Fund risk measures – as at 31-Dec-2011

	Fund	Benchmark
Annual Standard Deviation	7.85	8.57
Beta	0.84	—
R²	0.84	—

Risk measures are based on 3-year net returns (series B). (All returns are calculated in Canadian currency.)

Volatility meter

The volatility meter uses methodology recommended by the Fund Risk Classification Task Force of the Investment Funds Institute of Canada. The Task Force prescribes risk assessment based on historical volatility risk as measured by the standard deviation of fund performance. The Task Force also acknowledges that other types of measurable and nonmeasurable risk may exist. The Task Force reminds investors that historical performance may not be indicative of future returns and a fund’s historical volatility may not be indicative of future volatility.

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Fund facts

NAVPU – Series B

$13.08 – as at 07-Feb-2012

Fund inception date

25-May-2005

Fund benchmark

Blended index**

Fund aggregate assets (all series)

$709.0 million
as at 31-Jan-2012

Management expense ratio - Series B

1.79% – as at 30-Jun-2011

Quarterly Top Ten Holdings

Rogers Communication, Cl. B, Non Vtg
Shoppers Drug Mart
Toronto-Dominion Bank
Fairfax Financial Holdings, Sub Vtg
TransCanada Corp.
Telus
H&R REIT/H&R Financial Trust Stapled
Metro, Cl. A, Sub Vtg
BP PLC SPON ADR
Fortis
Total number of holdings	1,154
Total equity holdings	121
Total bond holdings	1,024
Top 10 holdings aggregate	9.0%

Full holdings

Shoppers Drug Mart
Rogers Communication, Cl. B, Non Vtg
Fairfax Financial Holdings, Sub Vtg
Toronto-Dominion Bank
Metro, Cl. A, Sub Vtg
H&R REIT/H&R Financial Trust Stapled
Groupe Aeroplan
TransCanada Corp.
BP PLC SPON ADR
Fortis
Total number of holdings	1,178
Total equity holdings	171
Total bond holdings	999
Top 10 holdings aggregate	8.8%

Full holdings

Rogers Communication, Cl. B, Non Vtg
Fairfax Financial Holdings, Sub Vtg
H&R REIT/H&R Financial Trust Stapled
Shoppers Drug Mart
Metro, Cl. A, Sub Vtg
Groupe Aeroplan
Toronto-Dominion Bank
BP PLC SPON ADR
Pfizer
Aetna
Total number of holdings	1,228
Total equity holdings	197
Total bond holdings	1,023
Top 10 holdings aggregate	8.5%

Full holdings

Rogers Communication, Cl. B, Non Vtg
H&R REIT/H&R Financial Trust Stapled
Metro, Cl. A, Sub Vtg
Fairfax Financial Holdings, Sub Vtg
Toronto-Dominion Bank
Medtronic
Groupe Aeroplan
UnitedHealth Group
Shoppers Drug Mart
Pfizer
Total number of holdings	1,228
Total equity holdings	197
Total bond holdings	1,024
Top 10 holdings aggregate	8.1%

Full holdings

Allocation to funds

Asset mix

Sector mix

Asset mix

Sector mix

Asset mix

Sector mix

Footnotes and disclosures

* ©2011 Morningstar Research Inc. All rights reserved. For greater detail see www.morningstar.ca. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any changes or losses arising from any use of this information.

¹Previously known as the Fidelity Monthly High Income Fund.

^**The blended index is 60% DEX Universe Bond Index, 15% MSCI Canada Value Index, 12% blend of four S&P/S&P/TSX industry groups: Telecommunication Services, Utilities, Oil & Gas Storage & Transportation, and REITs, 10% BofA ML U.S. High Yield Master II Index (Hedged CAD), 3% S&P BMI U.S. REIT Index (hedged CAD). Prior to August 1, 2010 the Fund’s benchmark was a blend of 60% S&P/TSX Capped Income Trust Index, 15% Merrill Lynch U.S. High Yield Master II Constrained Index, 15% DEX Universe Bond Index, and 10% MSCI Canada Value Capped Index. Prior to July 1, 2006 the bond portion of the blended index was the RBC CM Canadian Bond Market Index and the U.S. high-yield bond portion of the blended index was the Merrill Lynch U.S. High Yield Master II Index.

^‡The U.S. high-yield portion of the Fund will be affected by changes in the exchange rate between Canadian and U.S. dollars. We may use derivatives in order to seek to eliminate, or “hedge” against, the effects of such changes.

^†Percentage of equity holdings.

The indicated rates of return are the historical annual compounded total returns including changes in unit value and the reinvestment of all distributions and do not take into account sales, redemption, distribution, optional charges, or income taxes payable by any securityholder that would have reduced returns.