Fidelity^® VIP Hedged Equity Portfolio: Investment Approach

• Fidelity^® VIP Hedged Equity Portfolio seeks to provide capital appreciation by offering equity exposure while aiming to enhance performance during periods of market volatility – such as during drawdowns, sell-offs and bear markets – by employing an options-based hedging strategy.
• The Hedged Equity strategy uses a disciplined approach to construct an equity portfolio with similar risk-return characteristics to the S&P 500^® index. It also employs a disciplined options-based strategy designed to minimize downside capture (offset or mitigate a decrease in the value of the portfolios's investments) during market fluctuation. The extent of this protection will vary and will be determined primarily based on the cost of the put options in the marketplace.
• This defensive equity strategy can serve as a core portfolio holding and may help reduce detrimental, emotional market-timing decisions.