Fidelity Investments: Cash Segmentation & An Active ... Cash...Fidelity Investments: Cash...

33
Not FDIC Insured May Lose Value No Bank Guarantee For institutional use only. l © 2017 FMR LLC. All rights reserved. December 2017 Fidelity Investments: Cash Segmentation & An Active Approach to Liquidity Management Not NCUA or NCUSIF insured. May lose value. No credit union guarantee.

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Not FDIC Insured May Lose Value No Bank Guarantee

For institutional use only. l © 2017 FMR LLC. All rights reserved.

December 2017

Fidelity Investments:Cash Segmentation & An Active Approach to Liquidity Management

Not NCUA or NCUSIF insured. May lose value. No credit union guarantee.

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Agenda

1. Trump Administration Policy Implications2. Federal Reserve Interest Rate Policy3. Investment Objectives and Cash Segmentation4. Understanding Conservative Ultrashort Bond Funds 5. Q&A6. Appendix

For institutional use only. l © 2017 FMR LLC. All rights reserved.

Unless otherwise disclosed to you, in providing this information, Fidelity is not undertaking to provide impartial investmentadvice, or to give advice in a fiduciary capacity, in connection with any investment or transaction described herein. Fiduciaries are solely responsible for exercising independent judgment in evaluating any transaction(s) and areassumed to be capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies. Fidelity has a financial interest in any transaction(s) that fiduciaries, and if applicable, their clients, may enter into involving Fidelity’s products or services.

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ObjectiveTo increase awareness of the importance of implementing a cash segmentation strategy to optimize liquidity through the effective utilization of a broad set of investment solutions.

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Trump Administration Policy Implications

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The Impact of Potential Public Policies Various policies are likely to have different implications for U.S. growth and inflation

For institutional use only. l © 2017 FMR LLC. All rights reserved.Source: Fidelity Investments as of 12/12/2016

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Updating the Trump Policy ContinuumBlue Dot = Current Market Expectation; Gray Dot=Market Expectation as of December 2016

Establishment Compromise Populist

Taxes

Corporate & Individual Tax Cuts Tax Reform Progressive Tax Cuts

Spending

Defense Spending, Fiscal Restraint Pub/Pvt Infra, Balanced Spending Plans Pub Infra Program, Protect Entitlements

Trade/ Immigration

Free Trade, Immigration Reform Targeted Trade Renegotiations Trade Wars, Deportations, Building Wall

Monetary Policy

Hawkish Fed Appointments Balanced Fed Appointments Dovish Fed Appointments

Regulation

Deregulation & Limited Government Deregulation + Bully Pulpit (Twitter) Outright State Intervention

Implications

Small Growth PickupStable InflationRates Higher Led by the 5yrNeutral for TIPSStrong DollarGlobal Risks Rise via FX

Moderate Growth PickupModerately Higher InflationRates Higher Across the CurveModestly Positive for TIPSSweet Spot for Risk Assets

Large Growth PickupSignificantly Higher InflationRates Higher Led by the 30yrVery Positive for TIPSWeak DollarGlobal Risks Rise via Trade

For institutional use only. l © 2017 FMR LLC. All rights reserved.Source: Fidelity Investments as of 10/2017 and 12/2016

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4% GDP Growth Not Likely over the Long Run

For institutional use only. l © 2017 FMR LLC. All rights reserved.Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, Haver Analytics, Fidelity Investments (AART), as of 12/31/16.

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

Labor Force Productivity Real GDP

Real GDP Components

Year-over-Year Growth (20-Year Average)

0.9%

1.4%

2.3%

Labor Force Peak (1962-1982): 2.3%

Productivity Peak (1949-1969): 3.0%

Scenariosfor 4% Growth

20-Year AART Projections

Labor Force Growth 2.3% 1.0% 0.5%Labor Market Productivity 1.7% 3.0% 1.1%Real GDP Growth 4.0% 4.0% 1.6%

48% of labor force growth since 2000 comes from immigration

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GDP and 10-Year U.S. TreasuryHighly correlated

Source: Bloomberg as of 9/30/2017. GDP as of 9/30/2017.GDP data represents annualized 20-quarter percent change.Past performance is no guarantee of future results.

0

2

4

6

8

10

12

14

16

Sep

-69

Sep

-71

Sep

-73

Sep

-75

Sep

-77

Sep

-79

Sep

-81

Sep

-83

Sep

-85

Sep

-87

Sep

-89

Sep

-91

Sep

-93

Sep

-95

Sep

-97

Sep

-99

Sep

-01

Sep

-03

Sep

-05

Sep

-07

Sep

-09

Sep

-11

Sep

-13

Sep

-15

Sep

-17

Yiel

d (%

)

10-year U.S. Treasury

GDP

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Federal Reserve Interest Rate Policy

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Market Rate Hike Expectations are Well Below the Fed’s Forecast

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0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

September 2017Federal Reserve

Fed Funds Projections

Median Fed Funds Projection

Market Pricing of Short Rates in 1 Year

(Constant-maturity Eurodollar Future)

Federal Funds Target Rate

Pre-ElectionMarket Expectations

As of Nov 8, 2016

Post-ElectionMarket Expectations

As of October 31, 2017

Source: Federal Reserve, and Bloomberg as of 10/31/2017.

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Fed Rate Hike Probabilities

Source: Bloomberg as of 10/31/2017.For institutional use only. l © 2017 FMR LLC. All rights reserved.

82.2%

49.9%

36.0%29.0%

22.2%

0.6%

40.0%

42.7%

40.9%

37.3%

1.4%14.4%

20.9%

26.3%

1.0% 4.3%9.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Dec-17 Mar-18 Jun-18 Sep-18 Dec-18Date of FOMC Meeting

1 Rate Hike 2 Rate Hikes 3 Rate Hikes 4 Rate Hikes

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4.1

3.8

4.0

4.2

4.4

4.6

4.8

5.0

5.2

Une

mpl

oym

ent R

ate

(%) Actual Unemployment Rate

Federal Reserve’s Economic Projections

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1.33

1.00

1.25

1.50

1.75

2.00

2.25

PC

E Y

oY (%

)

2.3

1.01.21.41.61.82.02.22.42.62.83.0

Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19

Rea

l GD

P Y

oY (

%)

Actual Inflation

Inflation Forecast

Unemployment Rate Forecast

Actual GDP

GDP Forecast

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-2

-1

0

1

2

3

4

5y R

eal Y

ield

(%)

Gradual Conventional Tightening After Years of Unconventional Tightening

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ConventionalTightening

ConventionalEasing

UnconventionalEasing

UnconventionalTightening

1.00%

5.25%

0.125%

QE3Sep ‘12

1.125%

QE1Jan ‘09

QE2Nov ‘10

“Mid-2013”Aug ‘11 Taper Talk

May ‘13

“Meeting by Meeting”Mar ‘15

TaperDec ‘13

“Considerable Time”

Mar ‘14

Fed Hikes 25 bpsDec ‘15

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Fed Hikes 25 bpsDec ‘16

Fed Hikes 25 bpsMar ‘17

ConventionalTightening

Fed Hikes 25 bpsJun ‘17

0

1

2

3

4

5

6

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Fed

Fund

s Ta

rget

Rat

e (%

)

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The Fed Gradually Un-Winds Their Balance Sheet

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$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

Mill

ions

Monthly Runoff Caps vs. Expected Maturities/Prepays

Treasury Cap MBS Cap Treasury Maturities MBS Prepayments

Source: Federal Reserve as of 9/22/2017.

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Investment Objectives and Cash Segmentation

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Operating Cash

Segmenting Liquidity is CriticalObjectives drive investment strategy

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Short-Term Strategic Liquidity Long-Term Strategic Liquidity

SAFETY LIQUIDITY RETURN SAFETY LIQUIDITY RETURN SAFETY LIQUIDITY RETURN

Balancing safety, liquidity and returns

Different Objectives—Different Investment Priorities

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Aligning Investment ParametersConsidering constraints (constraints differ with objectives, tolerance, and resources)

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Operating Cash

Zero-Loss Tolerance

Short-Term Strategic Liquidity

Minimal-Loss Tolerance

Long-Term Strategic Liquidity

Moderate-Loss Tolerance

• Safety: Credit Quality (High grade)-Durations (<3 m)/Ave. Maturities (<0 - 6 m)

• Liquidity: Same-day availability or maturity

• Return: Market based or bank administered

• Measurement: Yield

• Safety: Credit Quality (Upper medium grade) -Durations (<3–6 m)/Ave. Maturities (<3–12 m)

• Liquidity: Maturity or next day subject to market liquidity/volatility tolerance

• Return: Market based—typically higher than Operating Cash

• Measurement: Total return

• Safety: Credit Quality (Investment-grade)-Durations (>6 m)/Ave. Maturities (>12 m)

• Liquidity: Maturity or next day subject to market liquidity/volatility tolerance

• Return: Market based—typically higher than Short-Term Strategic Liquidity

• Measurement: Total return

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Liquidity Management SolutionsChanges to the Texas PFIA may allow for a more diverse suite of alternative products

OPERATING CASH STRATEGIC LIQUIDITY

For institutional use only.See last pages for more information including risks.

LGIP’s

Gov’t MMFs

Direct Investments

Prime MMFs

Ultrashort Funds

Pools/SMAs

Diversification does not ensure a profit or guarantee against a loss.

Prime MMFs

Deposits

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Investment Considerations for Liquidity Management

Government MMFs:

Government LGIPS:

Prime MMFs:

Prime LGIPS:

Conservative Ultrashort Bond Funds:

Ret

urn

Volatility

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Provide T+1 liquidity – no gates or feesNAV floats at $10 out two decimal places

Subject to gates and feesNAV floats out four decimal places

No gates and feesStable NAV

No gates and feesStable or floating NAV

No gates and feesStable or floating NAV

For Illustrative purposes only

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Historical Performance

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*Institutional share classNote: Vertical lines represent Fed rate hikes.Source: Fidelity Investments and TexPool as of 10/31/2017.

1.04

1.27

0.97

1.22

1.45

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17

Net

Yie

ld (%

)

TexPool TexPool Prime FIMM Government* FIMM Prime* Fidelity Conservative Income Bond*

Please see the last page for important information about money market funds including risks.

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Understanding Conservative Ultrashort Bond Funds

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Fidelity Conservative Income Bond Fund

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation, credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible. Foreign securities can be more volatile than U.S. markets due to increased risks of adverse issuer, political, regulatory, market or economic developments. Changes in government regulation, interest rates and economic downturns can have a significant effect on issuers in the financial services sector, including the price of their securities or their ability to meet their payment obligations. Prepayment of principal prior to a security's maturity can cause greater price volatility if interest rates change. The fund can invest in securities that may have a leveraging effect (such as derivatives and forward-settling securities) that may increase market exposure, magnify investment risks, and cause losses to be realized more quickly. Conservative Ultrashort Bond Funds are not money market funds and will have a fluctuating NAV.

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Conservative Ultra-Short Bond FundsStrategic liquidity consideration – offers spread without liquidity “gates & fees”

For institutional use only. l © 2017 FMR LLC. All rights reserved.

Transacts at a variable $10.00 NAV and are not subject to SEC liquidity “gates and fees

Conservative diversified investment containing upper to middle grade securities

Offers next day purchases and redemptions

Ultra-short bond assets exceed $100 billion with growth from the conservative segment

Conservative ultra-short bonds benefit from bank regulatory reform that encourages the issuance of longer-dated wholesale funding

Source: Morningstar Direct, Fidelity Investments and iMoneyNet as of 6/30/2017.Custom universe chosen based on similar duration length (less than 1-year) as Fidelity Conservative Income Bond Fund.

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Yield DifferentialConservative Income Bonds and Institutional Prime MMF Yields and Spread

For institutional use only. l © 2017 FMR LLC. All rights reserved.

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

%

Yield Spread Morningstar Ultrashort Bond Category Average Yield Institutional Prime MMF Yield

Source: iMoneyNet and Morningstar Direct as of 10/31/2017.

1.01%

1.35%

Past performance is no guarantee of future results. You can not invest directly in an average. Returns are not meant to represent that of any Fidelity fund.

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Considering Ultra-Short Bond FundsTotal return = income + price return (gain/loss)

For institutional use only. l © 2017 FMR LLC. All rights reserved.

This hypothetical illustration is based on $100,000,000 does not reflect actual investment results, and are not guarantees of future results. There is no direct correlation between a hypothetical investment and the anticipated performance of the fund.

HOLDING PERIOD BREAK-EVEN TO RECOVER PRINCIPAL LOSS ($100,000,000 INITIAL INVESTMENT)

Change in NAV (basis points)

Gain/(Loss)on $100M

Hypothetical Conservative Ultra-Short Bond Fund Yields # of Days to Earn Equivalent Dividend

Income in the Prime MMF1.25% 1.50% 1.75% 2.00%

# of Days Needed to Recover Principal Loss Assumes 30 bp Spread

-10 ($100,000) 30 30 30 20 120

-20 ($200,000) 60 50 50 40 240

-30 ($300,000) 90 80 70 60 360

-50 ($500,000) 150 120 110 90 600

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Fidelity Conservative Income Bond Fund Has Offered Attractive Risk-Adjusted Returns

Risk Profile Considerations • Low Volatility

– Low NAV standard deviation

– Limited duration and maturity exposure

• Low Credit Risk– High-quality securities

– Prohibits high-yield securities

• Low Liquidity Risk– Liquidity structured within fund

– Limits structured products/illiquidity securities

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

0.00 0.20 0.40 0.60 0.80 1.00 1.20

Ann

ualiz

ed T

otal

Ret

urn

(%)

Annualized Standard Deviation

MORNINGSTAR ULTRASHORT BOND FUNDS( > $1B AUM & 3-Year Risk/Return)

Fidelity Conservative Income Bond Institutional

Source: Morningstar Direct, Fidelity Investments as of 9/30/2017.Note: Gray bubbles represent funds that invest in mortgages (Agency MBS, Non-Agency RMBS, and CMBS) and/or below investment grade securities). Blue bubbles do not invest in mortgages.In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.Custom universe chosen based on similar duration length (less than 1 year) as Fidelity Conservative Income Bond Fund.Past performance is no guarantee of future results.For illustration purposes only. For institutional use only. l © 2017 FMR LLC. All rights reserved.12/4/17

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Charts represent the percentage of days for which the historical net asset value (NAV) changed from the prior day using four decimal rounding market value methodology for the Prime Fund compared to the NAV for the Conservative Income Bond Fund ("CIB"). Data is provided per request of client and should not be construed to be a complete comparison of the Prime Fund vs the CIB Fund. CIB is not a money market fund and therefore not able to amortize costs and provide investors a stable NAV. Both products provide certain benefits and risks that will differ and should be considered before investing. Conservative Income Bond Fund and Prime MMF have differing management fee and holdings. Please see the last page for important information about money market funds including risks.

Conservative Income Bond Fund/Prime MMF – NAV Stability Comparison

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Past performance is no guarantee of future results. See slides 29 & 30 for standardized returns.

93.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NAV-Up NAV-Down NAV-Unchanged

95.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NAV-Up NAV-Down NAV-Unchanged

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Fidelity® Investments Money Market Funds: Prime Money Market Portfolio (2011-2017)

CONSERVATIVE INCOME BOND FUND(2011-2017)

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Q&A

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Appendix

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Performance ReviewAs of October 31, 2017

For institutional use only. l © 2017 FMR LLC. All rights reserved.

FIMM GovernmentInstitutional Class (FRGXX)

7-Day SEC Yield

Annualized

7-Day SECYield

Without Reductions

Average Annual Returns as of 10/31/2017

1-Year 3-Year 5-Year 10-Year 15-Year 20-Year 25-Year

Net Yield 0.96% 0.93% 0.67% 0.31% 0.19% 0.45% 1.28% 2.12% 2.64%

Lipper Instl U.S. Govt MM Peer Group: Rank/Count 25/236 26/201 19/186 18/145 12/87 8/49 1/19

Percent Beaten 90% 88% 90% 88% 87% 85% 100%

FIMM PrimeInstitutional Class (FIPXX)

7-Day SEC Yield

Annualized

7-Day SECYield

Without Reductions

Average Annual Returns as of 10/31/2017

1-Year 3-Year 5-Year 10-Year 15-Year 20-Year 25-Year

Net Yield 1.22% 1.18% 1.00% 0.52% 0.34% 0.67% 1.45% 2.26% 2.76%

Lipper Instl MM Peer Group: Rank/Count 12/127 5/112 7/108 4/94 3/61 4/39 2/15

Percent Beaten 91% 96% 94% 97% 97% 92% 93%

Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit institutional.fidelity.com or fidelity.com. The performance data featured represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate; therefore you may have a gain or loss when you sell your shares. The yield quotation more closely reflects the current earnings of the money market fund than the total return quotation.

Lipper rankings are based on fund total returns for the periods shown. Rankings do not take into account sales charges but do include reinvestment of dividends and capital gains, if any. Each fund is ranked within a universe of funds similar in investment objective. The number of funds in each category periodically changes. Multiple share classes of a fund have a common portfolio but impose different expense structures.

Sources: Fidelity Investments and Lipper as of 10/31/2017

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CUMULATIVE ANNUALIZED

Fidelity Conservative Income Bond Fund (Institutional Class) as of 9/30/2017 1-Month 3-Month YTD 1-Year 3-Year 5-Year 10-Year LOF**

Gross Expense

Ratio*

Portfolio Returns 0.11% 0.34% 1.03% 1.31% 0.85% 0.74% N/A 0.78% 0.35%

Bloomberg Barclays 3–6 Month Treasury Index 0.08% 0.29% 0.60% 0.69% 0.40% 0.29% 0.64% 0.26%

Value Added 0.03% 0.05% 0.43% 0.62% 0.45% 0.45% N/A 0.52%

Yields as of 9/30/2017 30-Day SEC Yield 30-Day SEC Yield Without Reductions

Fidelity Conservative Income Bond Fund (Institutional Class)* 1.24% 1.13%

Performance Review September 30, 2017 Institutional Class

Source: Fidelity Investments as of 9/30/2017.*Contractually capped. After reimbursement the fund’s net expense ratio was 0.25%.It is not possible to invest directly in an index. All market indices are unmanaged.

Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. To learn more or to obtain the most recent month-end or other share-class performance, visit fidelity.com, institutional.fidelity.com, or 401k.com. Total returns are historical and include changes in share price and reinvestment of dividends and capital gains, if any. Institutional Class shares are sold to eligible investors without a sales load or 12b-1 fee. * *Fund inception: 03/03/2011.For institutional use only. l © 2017 FMR LLC. All rights reserved.12/4/17

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CUMULATIVE ANNUALIZED

Fidelity Conservative Income Bond Fund (Institutional Class) as of 10/31/2017 1-Month 3-Month YTD 1-Year 3-Year 5-Year 10-Year LOF**

Gross Expense

Ratio*

Portfolio Returns 0.12% 0.35% 1.15% 1.32% 0.87% 0.75% N/A 0.79% 0.35%

Bloomberg Barclays 3–6 Month Treasury Index 0.08% 0.28% 0.68% 0.73% 0.43% 0.30% 0.61% 0.27%

Value Added 0.04% 0.07% 0.47% 0.59% 0.44% 0.45% N/A 0.52%

Yields as of 10/31/2017 30-Day SEC Yield 30-Day SEC Yield Without Reductions

Fidelity Conservative Income Bond Fund (Institutional Class)* 1.24% 1.14%

Performance Review October 31, 2017 Institutional Class

Source: Fidelity Investments as of 10/31/2017.*Contractually capped. After reimbursement the fund’s net expense ratio was 0.25%.It is not possible to invest directly in an index. All market indices are unmanaged.

Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. To learn more or to obtain the most recent month-end or other share-class performance, visit fidelity.com, institutional.fidelity.com, or 401k.com. Total returns are historical and include changes in share price and reinvestment of dividends and capital gains, if any. Institutional Class shares are sold to eligible investors without a sales load or 12b-1 fee. * *Fund inception: 03/03/2011.For institutional use only. l © 2017 FMR LLC. All rights reserved.12/4/17

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Important InformationNot NCUA or NCUSIF insured. May lose value. No credit union guarantee.

The views expressed in this statement reflect those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.

Past performance is no guarantee of future results. Investment return will fluctuate, therefore you may have a gain or loss when you sell shares.

Diversification does not ensure a profit or guarantee against a loss.

Fidelity Conservative Income Bond Fund

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation, credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible. Foreign securities can be more volatile than U.S. markets due to increased risks of adverse issuer, political, regulatory, market or economic developments. Changes in government regulation, interest rates and economic downturns can have a significant effect on issuers in the financial services sector, including the price of their securities or their ability to meet their payment obligations. Prepayment of principal prior to a security's maturity can cause greater price volatility if interest rates change. The fund can invest in securities that may have a leveraging effect (such as derivatives and forward-settling securities) that may increase market exposure, magnify investment risks, and cause losses to be realized more quickly. Conservative Ultrashort Bond Funds are not money market funds and will have a fluctuating NAV.

Fidelity Government/Treasury Money Market Funds

You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund’s sponsor, have no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. Fidelity’s government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares, nor temporarily suspend your ability to sell shares if the fund's weekly liquid assets fall below 30% of its total assets because of market conditions or other factors.

Fidelity Institutional Prime Money Market Fund

You could lose money by investing in a money market fund. Because the share price of the fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund’s sponsor, have no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

For institutional use only. l © 2017 FMR LLC. All rights reserved.12/4/17

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Important Information

Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks. Interest rate increases can cause the price of a money market security to decrease. A decline in the credit quality of an issuer or a provider of credit support or a maturity-shortening structure for a security can cause the price of a money market security to decrease.

Before investing, consider the funds’ and/or accounts’ investment objectives, risks, charges, and expenses. Contact Fidelity or visit institutional.fidelity.com for a prospectus or, if available, a summary prospectus containing this information, if applicable. Read it carefully.

The third-party trademarks and service marks are the property of their respective owners. All other trademarks and service marks are the property of FMR LLC or an affiliated company.

Fidelity Investments Institutional Services Company, Inc., 500 Salem Street, Smithfield, RI 02917

For institutional use only.

Not FDIC insured. May lose value. No bank guarantee.821270.1.0

12/4/17For institutional use only. l © 2017 FMR LLC. All rights reserved.