Fidelity Advisor^® Utilities Portfolio: Investment Approach

• Fidelity Advisor^® Utilities Portfolio is a sector-based, equity-focused strategy that seeks to outperform the benchmark through active management.
• Within the utilities sector, we favor companies with durable earnings growth that are trading at reasonable valuations. We are looking for companies that operate in favorable regulatory jurisdictions, as we believe a constructive relationship between the regulator and the utilities is very important.
• Our investment approach focuses on finding companies that are mispriced given their underlying growth and return profile. These opportunities usually exist because investors underestimate the durability of long-term growth. Long-term growth in the sector comes from deploying capital at attractive rates of return.
• Given the high amount of capital needs in the sector, balance sheet management is extremely important. We look for utilities than run their balance sheet prudently and are judicious around issuing equity.