N-CSRS 1 Main.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-2737

Fidelity Summer Street Trust
 (Exact name of registrant as specified in charter)

245 Summer St., Boston, Massachusetts 02210
 (Address of principal executive offices)       (Zip code)

Scott C. Goebel, Secretary

245 Summer St.

Boston, Massachusetts 02210
(Name and address of agent for service)

Registrant's telephone number, including area code: 617-563-7000

Date of fiscal year end:

December 31

 

 

Date of reporting period:

June 30, 2014

Item 1. Reports to Stockholders

Fidelity®

New Markets Income

Fund

Semiannual Report

June 30, 2014

(Fidelity Cover Art)

Contents

Shareholder Expense Example

(Click Here)

An example of shareholder expenses.

Investment Changes

(Click Here)

A summary of major shifts in the fund's investments over the past six months.

Investments

(Click Here)

A complete list of the fund's investments with their market values.

Financial Statements

(Click Here)

Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.

Notes

(Click Here)

Notes to the financial statements.

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third-party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. © 2014 FMR LLC. All rights reserved.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2014 to June 30, 2014).

Actual Expenses

The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

 

Annualized
Expense RatioB

Beginning
Account Value
January 1, 2014

Ending
Account Value
June 30, 2014

Expenses Paid
During Period*
January 1, 2014
to June 30, 2014

Actual

.85%

$ 1,000.00

$ 1,104.10

$ 4.43

HypotheticalA

 

$ 1,000.00

$ 1,020.58

$ 4.26

A 5% return per year before expenses

B Annualized expense ratio reflects expenses net of applicable fee waivers.

* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Top Five Countries as of June 30, 2014

(excluding cash equivalents)

% of fund's
net assets

% of fund's net assets
6 months ago

Venezuela

12.5

7.9

Mexico

8.9

8.1

Russia

7.2

6.4

Indonesia

4.7

5.2

Turkey

4.6

3.3

Percentages are adjusted for the effect of open futures contracts, if applicable.

Top Five Holdings as of June 30, 2014

(by issuer, excluding cash equivalents)

% of fund's
net assets

% of fund's net assets
6 months ago

Venezuelan Republic

6.6

4.3

Russian Federation

6.5

6.1

Petroleos de Venezuela SA

5.9

3.6

Turkish Republic

3.5

2.7

United Mexican States

3.1

3.3

 

25.6

Asset Allocation (% of fund's net assets)

As of June 30, 2014

As of December 31, 2013

nmi1733337

Corporate Bonds 31.5%

 

nmi1733337

Corporate Bonds 35.8%

 

nmi1733340

Government
Obligations 52.8%

 

nmi1733340

Government
Obligations 53.4%

 

nmi1733343

Stocks 3.8%

 

nmi1733343

Stocks 1.2%

 

nmi1733346

Preferred Securities 0.2%

 

nmi1733346

Preferred Securities 0.4%

 

nmi1733349

Investment
Companies 9.2%

 

nmi1733349

Investment
Companies 2.6%

 

nmi1733352

Short-Term
Investments and
Net Other Assets
(Liabilities) 2.5%

 

nmi1733352

Short-Term
Investments and
Net Other Assets
(Liabilities) 6.6%

 

nmi1733355

Semiannual Report

Investments June 30, 2014 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 31.5%

 

Principal Amount (e)

Value

Bermuda - 0.1%

GeoPark Latin America Ltd. 7.5% 2/11/20 (Reg. S)

$ 4,025,000

$ 4,357,063

Brazil - 1.4%

Banco Bradesco SA (PN) sponsored ADR

393,500

5,713,620

Banco Nacional de Desenvolvimento Economico e Social:

5.5% 7/12/20 (h)

8,095,000

8,762,838

6.5% 6/10/19 (h)

8,355,000

9,399,375

Brasil Foods SA 7.75% 5/22/18 (h)

BRL

14,965,000

5,841,735

Caixa Economica Federal 3.5% 11/7/22 (h)

3,970,000

3,592,850

Centrais Eletricas Brasileiras SA (Electrobras):

5.75% 10/27/21 (h)

8,785,000

9,012,356

6.875% 7/30/19 (h)

6,445,000

7,153,950

Itau Unibanco Holding SA sponsored ADR

623,480

8,965,642

Vale SA (PN-A) sponsored ADR

837,500

9,966,250

TOTAL BRAZIL

68,408,616

British Virgin Islands - 0.5%

Arcos Dorados Holdings, Inc. 10.25% 7/13/16 (h)

BRL

28,545,000

12,208,656

Big Will Investments Ltd. 10.875% 4/29/16

1,870,000

2,026,613

FPC Finance Ltd. 6% 6/28/19

1,715,000

1,835,050

Poly Real Estate Finance Ltd. 4.5% 8/6/18 (Reg. S)

2,990,000

3,028,541

Road King Infrastructure Finance Ltd. 9.875% 9/18/17

1,875,000

2,025,000

Sinopec Group Overseas Development Ltd. 5.375% 10/17/43 (h)

3,715,000

4,042,682

TOTAL BRITISH VIRGIN ISLANDS

25,166,542

Canada - 0.3%

Pacific Rubiales Energy Corp. 7.25% 12/12/21 (h)

10,064,000

11,171,040

Uranium One Investments, Inc. 6.25% 12/13/18 (h)

5,655,000

5,527,763

TOTAL CANADA

16,698,803

Cayman Islands - 3.7%

AES Andres Dominicana Ltd./Itabo Dominicana Ltd. 9.5% 11/12/20 (h)

2,975,000

3,220,438

Agile Property Holdings Ltd. 9.875% 3/20/17 (Reg. S)

2,545,000

2,738,929

Alliance Global Group, Inc./Cayman 6.5% 8/18/17

2,050,000

2,234,500

Brazil Minas SPE 5.333% 2/15/28 (h)

11,200,000

11,300,800

China Overseas Finance Cayman III Ltd. 6.375% 10/29/43 (Reg. S)

1,365,000

1,317,173

Country Garden Holdings Co. Ltd. 11.125% 2/23/18 (Reg. S)

2,375,000

2,591,600

Nonconvertible Bonds - continued

 

Principal Amount (e)

Value

Cayman Islands - continued

Hutchison Whampoa International 10 Ltd. 6% (h)(i)(j)

$ 39,300,000

$ 41,215,875

KWG Property Holding Ltd.:

12.5% 8/18/17 (Reg. S)

3,410,000

3,648,700

13.25% 3/22/17 (Reg. S)

1,185,000

1,359,788

Maoye International Holdings Ltd. 7.75% 5/19/17 (h)

1,860,000

1,910,034

MBPS Finance Co. 11.25% 11/15/15

1,370,000

1,383,878

Petrobras International Finance Co. Ltd.:

5.375% 1/27/21

23,660,000

24,659,162

6.75% 1/27/41

43,330,000

44,629,900

8.375% 12/10/18

27,545,000

32,710,652

Shimao Property Holdings Ltd. 9.65% 8/3/17

1,870,000

1,964,435

SOHO China Ltd. 5.75% 11/7/17 (Reg. S)

2,545,000

2,595,900

TOTAL CAYMAN ISLANDS

179,481,764

Chile - 0.2%

AES Gener SA 8.375% 12/18/73 (h)(j)

9,735,000

10,927,538

Costa Rica - 0.3%

Banco de Costa Rica:

5.25% 8/12/18 (h)

3,555,000

3,643,875

6.25% 11/1/23 (h)

3,400,000

3,485,000

Instituto Costarricense de Electricidad:

6.375% 5/15/43 (h)

2,900,000

2,575,200

6.95% 11/10/21 (h)

7,001,000

7,596,085

TOTAL COSTA RICA

17,300,160

Georgia - 1.0%

Georgia Bank Joint Stock Co. 7.75% 7/5/17 (h)

11,250,000

12,037,500

Georgian Oil & Gas Corp. 6.875% 5/16/17 (h)

25,962,000

27,410,680

JSC Georgian Railway 7.75% 7/11/22 (h)

8,585,000

9,615,200

TOTAL GEORGIA

49,063,380

Hong Kong - 0.2%

MCC Holding Hong Kong Corp. Ltd. 4.875% 7/29/16 (Reg. S)

8,534,000

8,700,038

Hungary - 0.1%

Hungarian Development Bank Ltd. 6.25% 10/21/20 (h)

6,700,000

7,434,588

Indonesia - 1.8%

Perusahaan Listrik Negara PT 5.25% 10/24/42 (h)

7,605,000

6,502,275

PT Adaro Indonesia 7.625% 10/22/19 (h)

6,710,000

7,045,500

PT Pertamina Persero:

4.3% 5/20/23 (h)

7,210,000

6,818,137

Nonconvertible Bonds - continued

 

Principal Amount (e)

Value

Indonesia - continued

PT Pertamina Persero: - continued

4.875% 5/3/22 (h)

$ 8,390,000

$ 8,327,075

5.25% 5/23/21 (h)

9,610,000

9,898,300

5.625% 5/20/43 (h)

22,380,000

20,086,050

6% 5/3/42 (h)

10,885,000

10,177,475

6.45% 5/30/44 (h)

9,935,000

9,879,364

PT Perusahaan Listrik Negara 5.5% 11/22/21 (Reg. S)

7,380,000

7,749,000

TOTAL INDONESIA

86,483,176

Ireland - 1.2%

MTS International Funding Ltd. 8.625% 6/22/20 (h)

8,710,000

10,303,059

RZD Capital Ltd. 5.7% 4/5/22 (Reg. S)

10,150,000

10,559,492

SCF Capital Ltd. 5.375% 10/27/17 (h)

10,000,000

10,100,000

Vnesheconombank Via VEB Finance PLC:

6.025% 7/5/22 (h)

7,140,000

7,318,500

6.8% 11/22/25 (h)

11,115,000

11,850,813

6.902% 7/9/20 (h)

10,540,000

11,462,777

TOTAL IRELAND

61,594,641

Kazakhstan - 1.7%

Development Bank of Kazakhstan JSC 4.125% 12/10/22 (h)

8,850,000

8,397,765

Kazagro National Management Holding JSC 4.625% 5/24/23 (h)

9,940,000

9,615,956

KazMunaiGaz Finance Sub BV:

6.375% 4/9/21 (h)

8,300,000

9,242,050

7% 5/5/20 (h)

10,545,000

11,994,938

KazMunaiGaz National Co.:

4.4% 4/30/23 (h)

5,830,000

5,716,315

5.75% 4/30/43 (h)

14,680,000

14,092,800

Samruk-Energy JSC 3.75% 12/20/17 (Reg. S)

2,300,000

2,320,125

Zhaikmunai International BV 7.125% 11/13/19 (h)

20,130,000

21,891,375

TOTAL KAZAKHSTAN

83,271,324

Luxembourg - 1.9%

Aquarius Investments Luxemburg 8.25% 2/18/16

14,450,000

14,919,654

Cosan Luxembourg SA 9.5% 3/14/18 (h)

BRL

39,710,000

16,202,111

EVRAZ Group SA 6.5% 4/22/20 (h)

8,795,000

8,201,338

OJSC Russian Agricultural Bank 7.75% 5/29/18 (Issued by RSHB Capital SA for OJSC Russian Agricultural Bank) (h)

8,965,000

9,856,121

Nonconvertible Bonds - continued

 

Principal Amount (e)

Value

Luxembourg - continued

RSHB Capital SA:

5.1% 7/25/18 (h)

$ 10,715,000

$ 10,822,257

5.298% 12/27/17 (h)

17,615,000

18,053,614

6% 6/3/21 (Reg. S) (j)

7,700,000

7,738,500

6.299% 5/15/17 (Reg. S)

8,520,000

8,988,600

TOTAL LUXEMBOURG

94,782,195

Mexico - 5.1%

America Movil S.A.B. de CV 6.45% 12/5/22

MXN

499,640,000

38,189,927

Comision Federal de Electricid 4.875% 5/26/21 (h)

5,855,000

6,297,053

Pemex Project Funding Master Trust:

6.625% 6/15/35

33,565,000

39,522,788

8.625% 2/1/22

28,592,000

36,025,920

Petroleos Mexicanos:

4.875% 1/24/22

12,610,000

13,641,498

5.5% 1/21/21

16,220,000

18,206,950

5.5% 6/27/44

27,755,000

28,892,955

6% 3/5/20

7,305,000

8,356,920

6.375% 1/23/45 (h)

28,165,000

32,706,606

6.5% 6/2/41

23,820,000

27,690,750

TOTAL MEXICO

249,531,367

Morocco - 0.4%

OCP SA:

5.625% 4/25/24 (h)

6,560,000

6,879,800

6.875% 4/25/44 (h)

13,385,000

13,958,815

TOTAL MOROCCO

20,838,615

Netherlands - 2.7%

Bulgaria Steel Finance BV 12% 5/4/49 unit (d)

EUR

5,100,000

69,834

Indosat Palapa Co. BV 7.375% 7/29/20 (h)

19,835,000

21,497,173

Kazakhstan Temir Zholy Finance BV:

6.375% 10/6/20 (h)

5,385,000

5,936,963

6.95% 7/10/42 (h)

15,135,000

16,572,825

Majapahit Holding BV:

7.75% 1/20/20 (h)

12,750,000

14,917,500

7.875% 6/29/37 (Reg. S)

6,935,000

8,044,600

8% 8/7/19 (h)

11,230,000

13,251,400

Mozambique Ematum Finance 2020 6.305% 9/11/20 (Reg. S)

5,955,000

6,014,550

Nonconvertible Bonds - continued

 

Principal Amount (e)

Value

Netherlands - continued

Petrobras Global Finance BV:

6.25% 3/17/24

$ 27,930,000

$ 29,728,692

7.25% 3/17/44

13,910,000

15,335,775

TOTAL NETHERLANDS

131,369,312

Paraguay - 0.3%

Banco Regl Saeca 8.125% 1/24/19 (h)

2,575,000

2,832,500

Telefonica Celular del Paraguay SA 6.75% 12/13/22 (h)

9,305,000

10,014,506

TOTAL PARAGUAY

12,847,006

Philippines - 0.3%

Power Sector Assets and Liabilities Management Corp. 7.39% 12/2/24 (h)

10,645,000

13,678,825

SM Investments Corp. 4.25% 10/17/19

2,040,000

2,053,639

TOTAL PHILIPPINES

15,732,464

South Africa - 0.7%

Eskom Holdings Ltd.:

5.75% 1/26/21 (Reg. S)

18,720,000

19,164,600

6.75% 8/6/23 (h)

6,600,000

6,996,000

TransCanada PipeLines Ltd. 4% 7/26/22 (h)

8,625,000

8,098,875

TOTAL SOUTH AFRICA

34,259,475

Sri Lanka - 0.4%

Bank of Ceylon 6.875% 5/3/17 (h)

11,916,000

12,660,750

National Savings Bank 8.875% 9/18/18 (h)

5,625,000

6,370,313

TOTAL SRI LANKA

19,031,063

Trinidad & Tobago - 0.4%

Petroleum Co. of Trinidad & Tobago Ltd. 9.75% 8/14/19 (h)

17,068,000

21,612,355

Turkey - 0.5%

Arcelik A/S 5% 4/3/23 (h)

23,715,000

22,790,115

Ukraine - 0.2%

Naftogaz of Ukraine NJSC 9.5% 9/30/14

7,975,000

7,815,500

United Kingdom - 0.1%

Biz Finance PLC 8.375% 4/27/15 (Reg. S)

4,040,000

3,777,400

JSC Oschadbank 8.25% 3/10/16 (Issued by SSB #1 PLC for JSC Oschadbank)

4,045,000

3,661,534

TOTAL UNITED KINGDOM

7,438,934

Nonconvertible Bonds - continued

 

Principal Amount (e)

Value

United States of America - 0.1%

Brazil Loan Trust 1 5.477% 7/24/23 (h)

$ 5,840,000

$ 6,073,600

Venezuela - 5.9%

Petroleos de Venezuela SA:

4.9% 10/28/14

6,425,000

6,411,508

5.25% 4/12/17

21,575,000

18,220,088

5.375% 4/12/27

45,790,000

28,344,010

5.5% 4/12/37

61,250,000

36,688,750

6% 5/16/24 (h)

16,550,000

11,129,875

6% 11/15/26 (Reg. S)

80,410,000

51,864,450

8.5% 11/2/17 (h)

26,035,000

24,350,536

8.5% 11/2/17 (Reg. S)

17,700,000

16,554,810

9% 11/17/21 (Reg. S)

58,415,000

49,646,909

9.75% 5/17/35 (h)

23,075,000

18,898,425

9.75% 5/17/35

35,880,000

29,385,720

TOTAL VENEZUELA

291,495,081

TOTAL NONCONVERTIBLE BONDS

(Cost $1,490,969,321)


1,554,504,715

Government Obligations - 52.8%

 

Armenia - 1.0%

Republic of Armenia 6% 9/30/20 (h)

44,945,000

47,416,975

Azerbaijan - 0.5%

Azerbaijan Republic 4.75% 3/18/24 (h)

19,825,000

20,419,750

State Oil Co. of Azerbaijan Republic 4.75% 3/13/23 (Reg. S)

5,980,000

5,950,100

TOTAL AZERBAIJAN

26,369,850

Barbados - 0.5%

Barbados Government:

7% 8/4/22 (h)

16,276,000

14,770,470

7.25% 12/15/21 (h)

11,539,000

10,846,660

TOTAL BARBADOS

25,617,130

Belarus - 0.3%

Belarus Republic:

8.75% 8/3/15 (Reg. S)

9,525,000

9,799,320

8.95% 1/26/18

6,680,000

7,214,400

TOTAL BELARUS

17,013,720

Government Obligations - continued

 

Principal Amount (e)

Value

Belize - 0.1%

Belize Government 5% 2/20/38 (f)(h)

$ 4,473,800

$ 3,131,660

Bolivia - 0.2%

Plurinational State of Bolivia 5.95% 8/22/23 (h)

9,325,000

9,837,875

Brazil - 1.9%

Brazilian Federative Republic:

4.25% 1/7/25

24,710,000

25,043,585

5.625% 1/7/41

9,905,000

10,647,875

7.125% 1/20/37

6,905,000

8,734,825

8.25% 1/20/34

11,490,000

15,913,650

10.125% 5/15/27

9,232,000

14,678,880

12.25% 3/6/30

9,165,000

16,955,250

TOTAL BRAZIL

91,974,065

Colombia - 1.0%

Colombian Republic:

6.125% 1/18/41

17,110,000

20,489,225

7.375% 9/18/37

14,055,000

19,114,800

11.75% 2/25/20

5,306,000

7,680,435

TOTAL COLOMBIA

47,284,460

Congo - 0.9%

Congo Republic 3.5% 6/30/29 (f)

46,673,606

42,386,169

Costa Rica - 1.0%

Costa Rican Republic:

4.375% 4/30/25 (h)

24,375,000

22,766,250

5.625% 4/30/43 (h)

5,430,000

4,854,420

7% 4/4/44 (h)

20,680,000

21,507,200

TOTAL COSTA RICA

49,127,870

Croatia - 1.0%

Croatia Republic:

5.5% 4/4/23 (h)

9,570,000

9,940,838

6% 1/26/24 (h)

10,220,000

10,960,950

6.375% 3/24/21 (h)

8,835,000

9,707,456

6.625% 7/14/20 (h)

8,305,000

9,280,838

6.75% 11/5/19

9,265,000

10,388,381

TOTAL CROATIA

50,278,463

Dominican Republic - 0.8%

Dominican Republic:

5.875% 4/18/24 (h)

8,530,000

8,901,055

Government Obligations - continued

 

Principal Amount (e)

Value

Dominican Republic - continued

Dominican Republic: - continued

7.45% 4/30/44 (h)

$ 21,305,000

$ 22,811,227

7.5% 5/6/21 (h)

6,815,000

7,779,323

TOTAL DOMINICAN REPUBLIC

39,491,605

Ecuador - 0.1%

Ecuador Republic 9.375% 12/15/15 (h)

5,444,000

5,791,055

El Salvador - 0.6%

El Salvador Republic:

5.875% 1/30/25 (Reg.S)

10,330,000

10,113,070

7.625% 2/1/41 (h)

4,960,000

5,208,000

7.65% 6/15/35 (Reg. S)

7,580,000

8,197,770

7.75% 1/24/23 (Reg. S)

3,505,000

3,955,393

8.25% 4/10/32 (Reg. S)

3,570,000

4,060,875

TOTAL EL SALVADOR

31,535,108

Gabon - 0.2%

Gabonese Republic 6.375% 12/12/24 (h)

11,065,000

12,086,742

Georgia - 0.2%

Georgia Republic 6.875% 4/12/21 (h)

6,810,000

7,712,325

Ghana - 0.4%

Ghana Republic:

7.875% 8/7/23 (Reg.S)

12,640,000

12,229,200

8.5% 10/4/17

6,820,000

7,161,000

TOTAL GHANA

19,390,200

Guatemala - 0.1%

Guatemalan Republic 4.875% 2/13/28 (h)

3,075,000

3,016,575

Honduras - 0.2%

Republic of Honduras 7.5% 3/15/24 (h)

7,380,000

7,638,300

Hungary - 2.1%

Hungarian Republic:

5.375% 2/21/23

15,922,000

17,136,053

5.375% 3/25/24

20,078,000

21,483,460

5.75% 11/22/23

14,246,000

15,706,215

6.25% 1/29/20

13,451,000

15,204,741

6.375% 3/29/21

21,763,000

24,809,820

7.625% 3/29/41

9,144,000

11,709,989

TOTAL HUNGARY

106,050,278

Government Obligations - continued

 

Principal Amount (e)

Value

Indonesia - 2.9%

Indonesian Republic:

3.75% 4/25/22 (h)

$ 7,650,000

$ 7,430,063

4.625% 4/15/43 (h)

5,255,000

4,584,988

4.875% 5/5/21 (h)

12,085,000

12,689,250

5.25% 1/17/42

12,170,000

11,561,500

5.875% 3/13/20 (h)

15,415,000

17,110,650

5.875% 1/15/24 (h)

12,045,000

13,294,669

6.625% 2/17/37

23,425,000

26,001,750

7.75% 1/17/38 (h)

11,745,000

14,637,206

8.5% 10/12/35 (h)

15,955,000

21,140,375

11.625% 3/4/19 (h)

10,455,000

14,252,779

TOTAL INDONESIA

142,703,230

Iraq - 0.9%

Republic of Iraq 5.8% 1/15/28 (Reg. S)

48,220,000

43,398,000

Ivory Coast - 0.4%

Ivory Coast 7.7743% 12/31/32 (f)

21,775,000

21,094,531

Jamaica - 0.2%

Jamaican Government:

8% 6/24/19

6,325,000

6,783,563

8% 3/15/39

4,255,000

4,074,163

TOTAL JAMAICA

10,857,726

Jordan - 0.4%

Jordanian Kingdom 3.875% 11/12/15

20,113,000

20,213,565

Kenya - 0.5%

Republic of Kenya:

5.875% 6/24/19 (h)

9,925,000

10,128,463

6.875% 6/24/24 (h)

13,100,000

13,624,000

TOTAL KENYA

23,752,463

Lebanon - 0.1%

Lebanese Republic 4% 12/31/17

6,359,500

6,343,601

Mexico - 3.6%

Comision Federal de Electricid:

4.875% 1/15/24 (h)

14,260,000

15,222,550

5.75% 2/14/42 (Reg. S)

6,940,000

7,373,750

United Mexican States:

5.55% 1/21/45

10,230,000

11,636,625

5.75% 10/12/2110

20,369,000

21,611,509

6.05% 1/11/40

40,309,000

48,854,508

Government Obligations - continued

 

Principal
Amount (e)

Value

Mexico - continued

United Mexican States: - continued

6.75% 9/27/34

$ 21,530,000

$ 27,881,350

7.5% 4/8/33

8,325,000

11,488,500

8.3% 8/15/31

7,970,000

11,688,005

11.5% 5/15/26

13,860,000

23,961,168

TOTAL MEXICO

179,717,965

Mongolia - 0.3%

Development Bank of Mongolia 5.75% 3/21/17 (Reg.S)

5,415,000

5,198,400

Mongolian People's Republic:

4.125% 1/5/18 (Reg.S)

4,145,000

3,896,300

5.125% 12/5/22 (Reg. S)

8,550,000

7,438,500

TOTAL MONGOLIA

16,533,200

Morocco - 0.3%

Moroccan Kingdom:

4.25% 12/11/22 (h)

10,625,000

10,638,281

5.5% 12/11/42 (h)

5,670,000

5,572,930

TOTAL MOROCCO

16,211,211

Namibia - 0.1%

Republic of Namibia 5.5% 11/3/21 (h)

3,580,000

3,835,003

Netherlands - 0.2%

Republic of Angola 7% 8/16/19 (Issued by Northern Lights III BV for Republic of Angola) (Reg. S)

7,680,000

8,372,736

Nigeria - 0.5%

Republic of Nigeria:

5.125% 7/12/18 (h)

4,185,000

4,337,753

6.375% 7/12/23

4,000,000

4,315,000

6.75% 1/28/21 (h)

4,195,000

4,630,231

10.7902% to 10.9385% 10/9/14 to 11/20/14

NGN

2,329,520,000

13,837,032

TOTAL NIGERIA

27,120,016

Pakistan - 0.2%

Islamic Republic of Pakistan:

7.25% 4/15/19 (h)

3,995,000

4,084,888

8.25% 4/15/24 (h)

3,330,000

3,434,063

TOTAL PAKISTAN

7,518,951

Government Obligations - continued

 

Principal Amount (e)

Value

Panama - 1.3%

Panamanian Republic:

4.3% 4/29/53

$ 16,250,000

$ 14,170,000

6.7% 1/26/36

6,160,000

7,598,360

7.125% 1/29/26

6,975,000

8,858,250

8.875% 9/30/27

9,915,000

14,178,450

9.375% 4/1/29

11,645,000

17,327,760

TOTAL PANAMA

62,132,820

Peru - 0.6%

Peruvian Republic 8.75% 11/21/33

18,525,000

28,195,050

Philippines - 2.7%

Philippine Republic:

1.0139% 9/3/14

PHP

767,920,000

17,566,929

7.75% 1/14/31

22,620,000

31,243,875

9.5% 2/2/30

20,620,000

32,244,525

10.625% 3/16/25

33,370,000

52,349,188

TOTAL PHILIPPINES

133,404,517

Romania - 0.9%

Romanian Republic:

4.375% 8/22/23 (h)

6,665,000

6,830,292

4.875% 1/22/24 (h)

7,170,000

7,609,163

6.125% 1/22/44 (h)

7,072,000

8,036,267

6.75% 2/7/22 (h)

17,483,000

20,870,331

TOTAL ROMANIA

43,346,053

Russia - 6.5%

Russian Federation:

4.5% 4/4/22 (h)

16,685,000

17,060,413

4.875% 9/16/23 (h)

25,640,000

26,473,300

5.625% 4/4/42 (h)

67,730,000

70,608,525

5.875% 9/16/43 (h)

77,695,000

82,939,413

7% 1/25/23

RUB

425,440,000

11,683,165

7.5% 3/15/18

RUB

412,260,000

11,940,069

8.15% 2/3/27

RUB

269,570,000

7,805,827

12.75% 6/24/28 (Reg. S)

54,187,000

93,824,791

TOTAL RUSSIA

322,335,503

Senegal - 0.2%

Republic of Senegal 8.75% 5/13/21 (h)

7,885,000

9,107,806

Government Obligations - continued

 

Principal Amount (e)

Value

Serbia - 0.7%

Republic of Serbia:

4.875% 2/25/20 (h)

$ 11,520,000

$ 11,664,000

5.875% 12/3/18 (h)

7,080,000

7,531,350

7.25% 9/28/21 (h)

15,155,000

17,276,700

TOTAL SERBIA

36,472,050

Slovenia - 1.0%

Republic of Slovenia:

5.25% 2/18/24 (h)

22,955,000

24,676,625

5.5% 10/26/22 (h)

21,950,000

24,035,250

TOTAL SLOVENIA

48,711,875

Sri Lanka - 0.7%

Democratic Socialist Republic of Sri Lanka:

5.875% 7/25/22 (h)

7,405,000

7,617,894

6% 1/14/19 (h)

11,305,000

11,898,513

6.25% 10/4/20 (h)

7,380,000

7,848,261

6.25% 7/27/21 (h)

7,375,000

7,780,625

TOTAL SRI LANKA

35,145,293

Tanzania - 0.1%

United Republic of Tanzania 6.332% 3/9/20 (j)

4,555,000

4,851,075

Turkey - 3.5%

Turkish Republic:

4.875% 4/16/43

11,300,000

10,622,000

5.625% 3/30/21

8,275,000

9,019,750

6% 1/14/41

22,065,000

23,581,969

6.625% 2/17/45

10,010,000

11,586,575

6.75% 5/30/40

13,495,000

15,745,966

6.875% 3/17/36

22,445,000

26,428,988

7.25% 3/5/38

7,205,000

8,898,175

7.375% 2/5/25

25,265,000

30,696,975

8% 2/14/34

10,840,000

14,255,684

11.875% 1/15/30

11,520,000

19,708,416

TOTAL TURKEY

170,544,498

Ukraine - 1.9%

Ukraine Government:

6.25% 6/17/16 (h)

9,585,000

9,251,442

6.58% 11/21/16 (h)

7,315,000

7,058,975

6.75% 11/14/17 (h)

6,655,000

6,348,870

6.875% 9/23/15 (Reg. S)

3,985,000

3,886,172

Government Obligations - continued

 

Principal Amount (e)

Value

Ukraine - continued

Ukraine Government: - continued

7.5% 4/17/23 (Reg. S)

$ 9,000,000

$ 8,460,000

7.75% 9/23/20 (h)

12,735,000

12,149,190

7.8% 11/28/22 (h)

15,855,000

14,982,975

7.95% 2/23/21 (h)

11,385,000

10,872,675

9.25% 7/24/17 (h)

18,780,000

19,014,750

TOTAL UKRAINE

92,025,049

United States of America - 2.0%

U.S. Treasury Bonds 3.375% 5/15/44

99,261,000

99,726,336

Venezuela - 6.6%

Venezuelan Republic:

oil recovery rights 4/15/20 (k)

458,489

10,086,758

6% 12/9/20

20,060,000

15,396,050

7% 12/1/18 (Reg. S)

9,925,000

8,659,563

7% 3/31/38

20,535,000

14,425,838

7.65% 4/21/25

49,280,000

37,945,600

7.75% 10/13/19 (Reg. S)

35,670,000

30,854,550

8.25% 10/13/24

42,825,000

34,367,063

9% 5/7/23 (Reg. S)

42,560,000

36,388,800

9.25% 9/15/27

64,870,000

55,788,200

9.25% 5/7/28 (Reg. S)

52,470,000

44,074,800

9.375% 1/13/34

45,825,000

38,607,563

TOTAL VENEZUELA

326,594,785

Vietnam - 0.1%

Vietnamese Socialist Republic:

6.75% 1/29/20 (h)

5,755,000

6,503,150

6.75% 1/29/20

680,000

768,400

TOTAL VIETNAM

7,271,550

Zambia - 0.3%

Republic of Zambia:

5.375% 9/20/22 (h)

6,645,000

6,254,939

8.5% 4/14/24 (h)

6,665,000

7,381,821

TOTAL ZAMBIA

13,636,760

TOTAL GOVERNMENT OBLIGATIONS

(Cost $2,401,099,418)


2,604,323,643

Common Stocks - 3.3%

Shares

Value

British Virgin Islands - 0.1%

Mail.Ru Group Ltd. GDR (Reg. S) (a)

72,100

$ 2,541,525

Canada - 0.1%

Pacific Rubiales Energy Corp.

187,100

3,801,441

Cayman Islands - 0.4%

58.com, Inc. ADR

60,300

3,259,818

Baidu.com, Inc. sponsored ADR (a)

70,500

13,170,105

GCL-Poly Energy Holdings Ltd. (a)

7,287,000

2,435,143

TOTAL CAYMAN ISLANDS

18,865,066

China - 0.2%

China Construction Bank Corp. (H Shares)

6,823,000

5,158,802

Industrial & Commercial Bank of China Ltd. (H Shares)

7,557,000

4,778,557

TOTAL CHINA

9,937,359

Colombia - 0.2%

BanColombia SA sponsored ADR (g)

88,500

5,115,300

Ecopetrol SA ADR (g)

105,200

3,792,460

TOTAL COLOMBIA

8,907,760

Hong Kong - 0.2%

China Mobile Ltd.

455,000

4,419,297

CNOOC Ltd.

2,508,000

4,508,547

TOTAL HONG KONG

8,927,844

India - 0.2%

Housing Development Finance Corp. Ltd.

125,862

2,079,992

ICICI Bank Ltd.

132,487

3,129,546

Infosys Ltd.

47,033

2,540,901

Reliance Industries Ltd.

125,862

2,127,877

TOTAL INDIA

9,878,316

Korea (South) - 0.1%

Hyundai Motor Co.

20,265

4,595,668

KB Financial Group, Inc.

19,873

690,488

TOTAL KOREA (SOUTH)

5,286,156

Mexico - 0.2%

America Movil S.A.B. de CV Series L sponsored ADR

340,900

7,073,675

Grupo Televisa SA de CV (CPO) sponsored ADR

70,800

2,429,148

TOTAL MEXICO

9,502,823

Common Stocks - continued

Shares

Value

Netherlands - 0.1%

Yandex NV (a)

146,600

$ 5,224,824

Russia - 0.7%

Gazprom OAO sponsored ADR (Reg. S)

724,200

6,311,403

LUKOIL Oil Co. sponsored ADR (United Kingdom)

41,400

2,471,994

Magnit OJSC GDR (Reg. S)

57,800

3,410,200

Mobile TeleSystems OJSC sponsored ADR

256,400

5,061,336

Rosneft Oil Co. OJSC GDR (Reg. S)

500,400

3,660,426

Sberbank (Savings Bank of the Russian Federation) (a)

4,729,400

11,762,599

Uralkali OJSC GDR (Reg. S)

143,800

3,314,590

TOTAL RUSSIA

35,992,548

South Africa - 0.0%

Naspers Ltd. Class N

19,900

2,342,717

Turkey - 0.6%

Akbank T.A.S.

977,000

3,592,386

Haci Omer Sabanci Holding A/S

194,000

905,626

Koc Holding A/S

664,000

3,259,511

Tupras Turkiye Petrol Rafinelleri A/S

96,000

2,238,459

Turk Hava Yollari AO

1,328,000

4,068,120

Turkcell Iletisim Hizmet A/S (a)

541,000

3,386,167

Turkiye Garanti Bankasi A/S

686,000

2,686,504

Turkiye Halk Bankasi A/S

798,000

5,988,955

Turkiye Is Bankasi A/S Series C

1,144,000

3,094,081

TOTAL TURKEY

29,219,809

United Kingdom - 0.0%

Antofagasta PLC

178,900

2,336,073

United States of America - 0.2%

21Vianet Group, Inc. ADR (a)

36,700

1,099,899

Southern Copper Corp.

242,200

7,355,614

TOTAL UNITED STATES OF AMERICA

8,455,513

TOTAL COMMON STOCKS

(Cost $158,822,082)


161,219,774

Preferred Stocks - 0.5%

 

 

 

 

Convertible Preferred Stocks - 0.1%

Brazil - 0.1%

Ambev SA sponsored ADR

931,700

6,559,168

Preferred Stocks - continued

Shares

Value

Nonconvertible Preferred Stocks - 0.4%

Brazil - 0.4%

Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP) sponsored ADR (g)

962,800

$ 10,321,216

Petroleo Brasileiro SA - Petrobras sponsored ADR

585,600

8,567,328

TOTAL BRAZIL

18,888,544

TOTAL PREFERRED STOCKS

(Cost $24,731,804)


25,447,712

Investment Companies - 9.2%

 

 

 

 

United States of America - 9.2%

iShares China Large-Cap ETF (g)

2,364,700

87,588,488

iShares MSCI Brazil Index ETF (g)

2,724,100

130,157,477

iShares MSCI Emerging Markets Index ETF

2,785,200

120,404,196

iShares MSCI Mexico Index ETF

714,200

48,429,902

iShares MSCI Turkey Investable Market Index ETF (g)

259,200

14,401,152

Market Vectors Russia ETF (g)

1,733,300

45,637,789

WisdomTree India Earnings ETF (g)

312,800

7,028,616

TOTAL INVESTMENT COMPANIES

(Cost $442,640,950)


453,647,620

Preferred Securities - 0.2%

 

Principal Amount

 

Cayman Islands - 0.1%

Banco Do Brasil SA 9% (h)(i)(j)

$ 6,620,000

6,548,835

MAF Global Securities Ltd. 7.125% (Reg. S) (i)(j)

2,050,000

2,223,767

TOTAL CAYMAN ISLANDS

8,772,602

China - 0.1%

Sinochem Group 5% (f)(h)(i)

4,460,000

4,607,859

TOTAL PREFERRED SECURITIES

(Cost $12,749,152)


13,380,461

Money Market Funds - 4.4%

Shares

Value

Fidelity Cash Central Fund, 0.11% (b)

60,102,886

$ 60,102,886

Fidelity Securities Lending Cash Central Fund, 0.10% (b)(c)

157,090,425

157,090,425

TOTAL MONEY MARKET FUNDS

(Cost $217,193,311)


217,193,311

TOTAL INVESTMENT PORTFOLIO - 101.9%

(Cost $4,748,206,038)

5,029,717,236

NET OTHER ASSETS (LIABILITIES) - (1.9)%

(93,149,256)

NET ASSETS - 100%

$ 4,936,567,980

Currency Abbreviations

BRL

-

Brazilian real

EUR

-

European Monetary Unit

MXN

-

Mexican peso

NGN

-

Nigerian naira

PHP

-

Philippine peso

RUB

-

Russian ruble

Security Type Abbreviations

ETF

-

Exchange-Traded Fund

Legend

(a) Non-income producing

(b) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund's holdings as of its most recent quarter end is available upon request. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.

(c) Investment made with cash collateral received from securities on loan.

(d) Non-income producing - Security is in default.

(e) Amount is stated in United States dollars unless otherwise noted.

(f) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end.

(g) Security or a portion of the security is on loan at period end.

(h) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $1,728,341,128 or 35.0% of net assets.

(i) Security is perpetual in nature with no stated maturity date.

(j) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.

(k) Quantity represents share amount.

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund

Income earned

Fidelity Cash Central Fund

$ 49,579

Fidelity Securities Lending Cash Central Fund

229,167

Total

$ 278,746

Other Information

Categorizations in the Schedule of Investments are based on country or territory of incorporation.

The following is a summary of the inputs used, as of June 30, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:

Description

Total

Level 1

Level 2

Level 3

Investments in Securities:

Equities:

Consumer Discretionary

$ 9,367,533

$ 9,367,533

$ -

$ -

Consumer Staples

9,969,368

9,969,368

-

-

Energy

37,479,935

32,971,388

4,508,547

-

Financials

48,982,836

37,697,741

11,285,095

-

Industrials

7,327,631

7,327,631

-

-

Information Technology

30,272,215

27,731,314

2,540,901

-

Materials

13,006,277

13,006,277

-

-

Telecommunication Services

19,940,475

12,135,011

7,805,464

-

Utilities

10,321,216

10,321,216

-

-

Corporate Bonds

1,554,504,715

24,645,512

1,529,789,369

69,834

Government Obligations

2,604,323,643

-

2,604,323,643

-

Investment Companies

453,647,620

453,647,620

-

-

Preferred Securities

13,380,461

-

13,380,461

-

Money Market Funds

217,193,311

217,193,311

-

-

Total Investments in Securities:

$ 5,029,717,236

$ 856,013,922

$ 4,173,633,480

$ 69,834

Other Information

The composition of credit quality ratings as a percentage of net assets is as follows (Unaudited):

U.S. Government and U.S.
Government Agency Obligations

2.0%

AAA,AA,A

8.4%

BBB

36.3%

BB

11.4%

B

11.7%

CCC,CC,C

10.0%

Not Rated

4.5%

Other Investments

13.2%

Short-Term Investments and Net
Other Assets

2.5%

 

100.0%

We have used ratings from Moody's Investors Service, Inc. Where Moody's® ratings are not available, we have used S&P® ratings. All ratings are as of the date indicated and do not reflect subsequent changes.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

 

June 30, 2014 (Unaudited)

 

 

 

Assets

Investment in securities, at value (including securities loaned of $152,519,694) - See accompanying schedule:

Unaffiliated issuers (cost $4,531,012,727)

$ 4,812,523,925

 

Fidelity Central Funds (cost $217,193,311)

217,193,311

 

Total Investments (cost $4,748,206,038)

 

$ 5,029,717,236

Foreign currency held at value (cost $35,296)

35,506

Receivable for investments sold

1,663,785

Receivable for fund shares sold

7,493,978

Dividends receivable

6,008,615

Interest receivable

68,285,193

Distributions receivable from Fidelity Central Funds

83,614

Receivable from investment adviser for expense reductions

1,983

Other receivables

13,784

Total assets

5,113,303,694

 

 

 

Liabilities

Payable for investments purchased

$ 9,748,056

Payable for fund shares redeemed

4,052,822

Distributions payable

2,356,535

Accrued management fee

2,684,404

Other affiliated payables

668,326

Other payables and accrued expenses

135,146

Collateral on securities loaned, at value

157,090,425

Total liabilities

176,735,714

 

 

 

Net Assets

$ 4,936,567,980

Net Assets consist of:

 

Paid in capital

$ 4,604,300,153

Undistributed net investment income

50,586,054

Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions

623,471

Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies

281,058,302

Net Assets, for 293,664,047 shares outstanding

$ 4,936,567,980

Net Asset Value, offering price and redemption price per share ($4,936,567,980 ÷ 293,664,047 shares)

$ 16.81

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

Six months ended June 30, 2014 (Unaudited)

 

 

 

Investment Income

 

 

Dividends

 

$ 7,984,637

Interest

 

134,882,229

Income from Fidelity Central Funds

 

278,746

Total income

 

143,145,612

 

 

 

Expenses

Management fee

$ 14,904,986

Transfer agent fees

3,123,028

Accounting and security lending fees

783,098

Custodian fees and expenses

161,920

Independent trustees' compensation

8,985

Registration fees

73,757

Audit

52,534

Legal

4,627

Interest

47

Miscellaneous

24,593

Total expenses before reductions

19,137,575

Expense reductions

(57,330)

19,080,245

Net investment income (loss)

124,065,367

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities:

 

 

Unaffiliated issuers

22,842,813

Foreign currency transactions

515,363

Total net realized gain (loss)

 

23,358,176

Change in net unrealized appreciation (depreciation) on:

Investment securities

300,388,751

Assets and liabilities in foreign currencies

(179,893)

Total change in net unrealized appreciation (depreciation)

 

300,208,858

Net gain (loss)

323,567,034

Net increase (decrease) in net assets resulting from operations

$ 447,632,401

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

 

Six months ended
June 30, 2014
(Unaudited)

Year ended
December 31,
2013

Increase (Decrease) in Net Assets

 

 

Operations

 

 

Net investment income (loss)

$ 124,065,367

$ 297,490,838

Net realized gain (loss)

23,358,176

38,091,266

Change in net unrealized appreciation (depreciation)

300,208,858

(795,421,603)

Net increase (decrease) in net assets resulting
from operations

447,632,401

(459,839,499)

Distributions to shareholders from net investment income

(107,358,307)

(271,446,790)

Distributions to shareholders from net realized gain

-

(113,931,954)

Total distributions

(107,358,307)

(385,378,744)

Share transactions
Proceeds from sales of shares

655,371,347

1,579,486,479

Reinvestment of distributions

93,212,018

338,101,823

Cost of shares redeemed

(670,855,768)

(3,882,987,529)

Net increase (decrease) in net assets resulting from share transactions

77,727,597

(1,965,399,227)

Redemption fees

112,367

1,488,436

Total increase (decrease) in net assets

418,114,058

(2,809,129,034)

 

 

 

Net Assets

Beginning of period

4,518,453,922

7,327,582,956

End of period (including undistributed net investment income of $50,586,054 and undistributed net investment income of $33,878,994, respectively)

$ 4,936,567,980

$ 4,518,453,922

Other Information

Shares

Sold

40,520,390

92,389,906

Issued in reinvestment of distributions

5,794,325

20,491,000

Redeemed

(42,476,725)

(234,760,122)

Net increase (decrease)

3,837,990

(121,879,216)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

 

Six months ended
June 30, 2014

Years ended December 31,

 

(Unaudited)

2013

2012

2011

2010

2009

Selected Per-Share Data

 

 

 

 

 

Net asset value, beginning of period

$ 15.59

$ 17.80

$ 15.83

$ 15.65

$ 15.03

$ 11.24

Income from Investment
Operations

 

 

 

 

 

Net investment income (loss)D

  .441

  .828

  .857

  .929

  .930

  1.195

Net realized and unrealized gain (loss)

  1.160

  (1.952)

  2.235

  .276

  .676

  3.664

Total from investment operations

  1.601

  (1.124)

  3.092

  1.205

  1.606

  4.859

Distributions from net investment income

  (.381)

  (.754)

  (.778)

  (.909)

  (.862)

  (1.053)

Distributions from net realized gain

  -

  (.336)

  (.346)

  (.119)

  (.130)

  (.020)

Total distributions

  (.381)

  (1.090)

  (1.124)

  (1.028)

  (.992)

  (1.073)

Redemption fees added to paid in capitalD

  -H

  .004

  .002

  .003

  .006

  .004

Net asset value, end of period

$ 16.81

$ 15.59

$ 17.80

$ 15.83

$ 15.65

$ 15.03

Total ReturnB, C

  10.41%

  (6.41)%

  20.02%

  7.94%

  10.94%

  44.56%

Ratios to Average Net AssetsE, G

 

 

 

 

 

Expenses before reductions

  .86%A

  .84%

  .85%

  .86%

  .88%

  .91%

Expenses net of fee waivers, if any

  .85%A

  .84%

  .85%

  .86%

  .88%

  .91%

Expenses net of all reductions

  .85%A

  .84%

  .84%

  .86%

  .88%

  .90%

Net investment income (loss)

  5.55%A

  4.96%

  5.03%

  5.89%

  5.94%

  8.73%

Supplemental Data

 

 

 

 

 

Net assets, end of period (000 omitted)

$ 4,936,568

$ 4,518,454

$ 7,327,583

$ 4,268,442

$ 4,256,877

$ 2,963,768

Portfolio turnover rateF

  112%A

  131%

  88%

  132%

  98%

  126%

AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower if certain expenses had not been reduced during the applicable periods shown. DCalculated based on average shares outstanding during the period. EFees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. FAmount does not include the portfolio activity of any underlying Fidelity Central Funds. GExpense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund. HAmount represents less than $.001 per share.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended June 30, 2014 (Unaudited)

1. Organization.

Fidelity® New Markets Income Fund (the Fund) is a non-diversified fund of Fidelity Summer Street Trust (the Trust) and is authorized to issue an unlimited number of shares. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.

2. Investments in Fidelity Central Funds.

The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.

The Money Market Central Funds seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of the investment adviser. Annualized expenses of the Money Market Central Funds as of their most recent shareholder report date are less than .01%.

A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC website or upon request.

3. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:

Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity Management &

Semiannual Report

3. Significant Accounting Policies - continued

Investment Valuation - continued

Research Company (FMR) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.

The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:

Level 1 - quoted prices in active markets for identical investments

Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)

Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)

Valuation techniques used to value the Fund's investments by major category are as follows:

Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Corporate bonds, foreign government and government agency obligations, preferred securities, and U.S. government and government agency obligations are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances. The value of these securities can be more volatile due to changes in the credit quality of the issuer and is sensitive to changes in economic, market and regulatory conditions.

Equity securities, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the last quoted bid price or may be valued using the last available price and are generally categorized as

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

3. Significant Accounting Policies - continued

Investment Valuation - continued

Level 2 in the hierarchy. For foreign equity securities, when market or security specific events arise, comparisons to the valuation of American Depositary Receipts (ADRs), futures contracts, Exchange-Traded Funds (ETFs) and certain indexes as well as quoted prices for similar securities may be used and would be categorized as Level 2 in the hierarchy. Utilizing these techniques may result in transfers between Level 1 and Level 2. For equity securities, including restricted securities, where observable inputs are limited, assumptions about market activity and risk are used and these securities may be categorized as Level 3 in the hierarchy.

ETFs are valued at their last sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day but the exchange reports a closing bid level, ETFs are valued at the closing bid and would be categorized as Level 1 in the hierarchy. In the event there was no closing bid, ETFs may be valued by another method that the Board believes reflects fair value in accordance with the Board's fair value pricing policies and may be categorized as Level 2 in the hierarchy.

Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of June 30, 2014, is included at the end of the Fund's Schedule of Investments.

Foreign Currency. The Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Gains and losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rates at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

Semiannual Report

3. Significant Accounting Policies - continued

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Income and capital gain distributions from Fidelity Central Funds, if any, are recorded on the ex-dividend date. Interest income is accrued as earned and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.

Expenses. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.

Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.

Book-tax differences are primarily due to foreign currency transactions, market discount, deferred trustees compensation and losses deferred due to wash sales, and excise tax regulations.

The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:

Gross unrealized appreciation

$ 342,274,425

Gross unrealized depreciation

(43,658,160)

Net unrealized appreciation (depreciation) on securities and other investments

$ 298,616,265

 

 

Tax cost

$ 4,731,100,971

Short-Term Trading (Redemption) Fees. Shares held by investors in the Fund less than 90 days may have been subject to a redemption fee equal to 1.00% of the NAV of shares redeemed. All redemption fees, which reduce the proceeds of the shareholder redemption, are retained by the Fund and accounted for as an addition to paid in capital.

Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.

4. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $2,398,268,252 and $2,255,629,137, respectively.

5. Fees and Other Transactions with Affiliates.

Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .55% of the Fund's

Semiannual Report

5. Fees and Other Transactions with Affiliates - continued

Management Fee - continued

average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .66% of the Fund's average net assets.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of the investment adviser, is the Fund's transfer, dividend disbursing and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .14% of average net assets.

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of the investment adviser, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for each month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Brokerage Commissions. The Fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. Brokerage commissions are included in net realized gain (loss) and change in net unrealized appreciation (depreciation) in the Statement of Operations. The commissions paid to these affiliated firms were $3,538 for the period.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other registered investment companies having management contracts with Fidelity Management & Research Company (FMR) or other affiliated entities of FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, there were no interfund loans outstanding. The Fund's activity in this program during the period for which loans were outstanding was as follows:

Borrower or Lender

Average
Loan Balance

Weighted Average
Interest Rate

Interest Expense

Borrower

$ 5,582

.30%

$ 47

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

6. Committed Line of Credit.

The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $4,230 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, the Fund did not borrow on this line of credit.

7. Security Lending.

The Fund lends portfolio securities through a lending agent from time to time in order to earn additional income. For equity securities, a lending agent is used and may loan securities to certain qualified borrowers, including Fidelity Capital Markets (FCM), a broker-dealer affiliated with the Fund. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is invested in the Fidelity Securities Lending Cash Central Fund. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. At period end, there were no security loans outstanding with FCM. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of income from Fidelity Central Funds. Total security lending income during the period amounted to $229,167, including $30 from securities loaned to FCM.

Semiannual Report

8. Expense Reductions.

Commissions paid to certain brokers with whom the investment adviser, or its affiliates, places trades on behalf of the Fund include an amount in addition to trade execution, which may be rebated back to the Fund to offset certain expenses. This amount totaled $46,904 for the period. In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $567.

In addition, the investment adviser reimbursed a portion of the Fund's operating expenses during the period in the amount of $9,859.

9. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

10. Credit Risk.

The Fund's relatively large investment in countries with limited or developing capital markets may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the Fund's investments and the income they generate, as well as the Fund's ability to repatriate such amounts.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

FIL Investment Advisors

FIL Investment Advisors (UK) Limited

FIL Investments (Japan) Limited

Fidelity Management & Research
(Japan) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(U.K.) Inc.

General Distributor

Fidelity Distributors Corporation

Smithfield, RI

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

JPMorgan Chase Bank

New York, NY

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)

TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

Fidelity Automated Service
Telephone (FAST®) nmi1733357
1-800-544-5555

nmi1733357
Automated line for quickest service

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
245 Summer St., Boston, MA 02210
www.fidelity.com

NMI-USAN-0814
1.787782.111

Item 2. Code of Ethics

Not applicable.

Item 3. Audit Committee Financial Expert

Not applicable.

Item 4. Principal Accountant Fees and Services

Not applicable.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Investments

(a) Not applicable.

(b) Not applicable

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Not applicable.

Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders

There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Summer Street Trust's Board of Trustees.

Item 11. Controls and Procedures

(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Summer Street Trust's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.

Item 12. Exhibits

(a)

(1)

Not applicable.

(a)

(2)

Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

(a)

(3)

Not applicable.

(b)

 

Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Fidelity Summer Street Trust

By:

/s/Kenneth B. Robins

 

Kenneth B. Robins

 

President and Treasurer

 

 

Date:

August 26, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:

/s/Kenneth B. Robins

 

Kenneth B. Robins

 

President and Treasurer

 

 

Date:

August 26, 2014

By:

/s/Howard J. Galligan III

 

Howard J. Galligan III

 

Chief Financial Officer

 

 

Date:

August 26, 2014