SEC Company Response from FIDELITY SUMMER STREET TRUST (CIK 0000225322) — Feb 10, 2020
FIDELITY SUMMER STREET TRUST (CIK 0000225322)
Date: Feb. 10, 2020 · CIK: 0000225322 · Accession: 0001379491-20-000394
AI Filing Summary & Sentiment
File numbers found in text: 811-02737
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CORRESP 1 filename1.htm COMMENTS RECEIVED ON 01/13/2020 FROM EDWARD BARTZ FIDELITY SUMMER STREET TRUST (File Nos. 002-58542 and 811-02737) Fidelity Agricultural Productivity Fund, Fidelity Disruptive Automation Fund, Fidelity Disruptive Communications Fund, Fidelity Disruptive Finance Fund, Fidelity Disruptive Medicine Fund, Fidelity Disruptive Technology Fund, Fidelity Global Disruptors Fund, Fidelity Water Sustainability Fund POST-EFFECTIVE AMENDMENT NO. 174 1) All funds “Fund Summary” (prospectus) “Principal Investment Strategies” C: The Staff requests we provide new legality opinions for all amendments adding new series. R: We will file the legality of shares opinions for the new series with an upcoming amendment. 2) All funds “Fund Summary” (prospectus) “Fee Table” C: The Staff requests we submit completed fee tables and hypothetical expense tables when the information becomes available. R: The requested information will be sent to you when it becomes available. 3) All funds “Fund Summary” (prospectus) “Fee Table” Example from Fidelity Disruptive Automation Fund: “[Fidelity Management & Research Company (FMR) has contractually agreed to reimburse the fund to the extent that total operating expenses (excluding interest, certain taxes, fees and expenses of the Independent Trustees, proxy and shareholder meeting expenses, extraordinary expenses, and acquired fund fees and expenses, if any, as well as non-operating expenses such as brokerage commissions and fees and expenses associated with the fund's securities lending program, if applicable), as a percentage of its average net assets, exceed [__]% (the Expense Cap). If at any time during the current fiscal year expenses for the fund fall below the Expense Cap, FMR reserves the right to recoup through the end of the fiscal year any expenses that were reimbursed during the current fiscal year up to, but not in excess of, the Expense Cap. This arrangement will remain in effect through [__________]. FMR may not terminate this arrangement before the expiration date without the approval of the Board of Trustees and may extend it in its discretion after that date.]” C: The Staff would like confirmation for each fund that the contractual arrangement discussed in the above footnote will remain in effect for one year or more from the effective date of the registration statement. The Staff also requests confirmation for each fund that the agreement will be filed as an exhibit to the registration statement. R: With respect to each of Fidelity Agricultural Productivity Fund and Fidelity Water Sustainability Fund, the arrangement will remain in effect for at least one year from the effective date of the registration statement for each fund. Disclosure will be updated to include the termination date of the arrangement in the (b) filing for each fund. There are no agreements to be filed under Item 28(h). Instead, these particular arrangements are an undertaking made by the adviser pursuant to which it is bound in accordance with the disclosure to reimburse certain expenses through the stated date (as compared with a voluntary arrangement, which could be discontinued by the adviser at any time). With respect to each other fund contained in the post-effective amendment, the disclosure regarding expense caps has been removed as a result of a change to each fund’s pricing arrangements. 4) Fidelity Agricultural Productivity Fund “Fund Summary” (prospectus) “Principal Investment Strategies” “Agricultural productivity companies include those contained in the MSCI ACWI Select Agriculture Producers IMI 25/50 Index or those that, in the Adviser’s opinion, help to increase crop yields and/or grow food production amid a backdrop of a growing global population and declining per capita supply of arable land.” C: The Staff requests we delete the MSCI ACWI Select Agriculture Producers IMI 25/50 Index since it includes non-agricultural companies, for example producers of packaged foods and meats. R: The funds are in the process of evaluating the Staff’s comment and will respond in connection with an upcoming filing. 5) Fidelity Agricultural Productivity Fund and Fidelity Water Sustainability Fund “Fund Summary” (prospectus) “Principal Investment Strategies” From Fidelity Agricultural Productivity Fund: “Agricultural productivity companies include those contained in the MSCI ACWI Select Agriculture Producers IMI 25/50 Index or those that, in the Adviser’s opinion, help to increase crop yields and/or grow food production amid a backdrop of a growing global population and declining per capita supply of arable land.” From Fidelity Water Sustainability Fund: “Water sustainability companies include those contained in the S&P Global Water Index or those that, in the Adviser’s opinion, develop efficiencies, extending the life cycle and/or identifying affordable new technologies to deliver safe, reliable or easily accessible water.” C: The Staff requests we remove “in the Adviser’s opinion” from the disclosures above and provide only objective criteria. R: The funds are in the process of evaluating the Staff’s comment and will respond in connection with an upcoming filing. 6) Fidelity Agricultural Productivity Fund “Fund Summary” (prospectus) “Principal Investment Strategies” “Such companies may include but are not limited to those involved in farm machinery, parts and equipment, irrigation, agricultural efficiency and services, agricultural science and biotechnology, fertilizers, pesticide and crop protection, seed manufacturers, crop chemicals, agricultural products and processors, processed food producers, aquatic farming, and livestock services.” C: The Staff requests we add “farm machinery” before “parts and equipment” and remove “processed food producers” from the list. R: The funds are in the process of evaluating the Staff’s comment and will respond in connection with an upcoming filing. 7) Fidelity Agricultural Productivity Fund “Investment Details” (prospectus) “Other Investment Strategies” “The Adviser may also use various techniques, such as buying and selling futures contracts and exchange traded funds, to increase or decrease the fund's exposure to changing security prices or other factors that affect security values.” C: The Staff requests we confirm that, if derivatives are included in the calculation of the fund’s compliance with its 80% policy, they are valued at their market values. R: Although we understand that in appropriate circumstances derivatives may qualify for the fund’s name test, the fund confirms that, at this time, the fund is not expected to count derivatives toward its 80% policy. The fund also confirms that, to the extent that it counts derivatives toward its 80% policy, the fund would value its derivatives positions using their mark to market values. 8) Fidelity Water Sustainability Fund “Fund Summary” (prospectus) “Principal Investment Strategies” “Water sustainability companies include those contained in the S&P Global Water Index or those that, in the Adviser’s opinion, develop efficiencies, extending the life cycle and/or identifying affordable new technologies to deliver safe, reliable or easily accessible water.” C: The Staff requests we delete the S&P Global Water Index because it does not use sustainability/ESG criteria in its index methodology. R: The funds are in the process of evaluating the Staff’s comment and will respond in connection with an upcoming filing. 9) Fidelity Water Sustainability Fund “Fund Summary” (prospectus) “Principal Investment Strategies” “Such companies may include but are not limited to those involved in water resources, water treatment, water distribution and utilities, desalinization or purification facilities, water technologies and analytics, environmental water services and water infrastructure (pumps, valves, meters, pipes), irrigation, water conservation services, and water supply or processing services.” C: The Staff requests we explain how “water distribution and utilities” and “water infrastructure (pumps, valves, meters, pipes)” companies are “water sustainability” companies. Also, explain how the fund screens out companies in these areas that are not involved in water sustainability. R: The funds are in the process of evaluating the Staff’s comment and will respond in connection with an upcoming filing. 10) Fidelity Disruptive Automation Fund, Fidelity Disruptive Communications Fund, Fidelity Disruptive Finance Fund, Fidelity Disruptive Medicine Fund, Fidelity Disruptive Technology Fund, Fidelity Global Disruptors Fund, and Fidelity Water Sustainability Fund “Fund Summary” (prospectus) “Principal Investment Risks” C: The Staff requests we add a portfolio selection risk stating that each fund’s selection criteria may not achieve the desired investment results or explain why adding that risk is not appropriate. R: The following disclosure will be added: Management Risk. The Adviser’s application of the fund’s strategy criteria may not achieve its intended results. The fund could underperform in comparison to other funds with a similar benchmark or similar objectives and investment strategies. 11) Fidelity Agricultural Productivity Fund, Fidelity Disruptive Automation Fund, Fidelity Disruptive Communications Fund, Fidelity Disruptive Finance Fund, Fidelity Disruptive Medicine Fund, Fidelity Disruptive Technology Fund, and Fidelity Water Sustainability Fund “Fund Summary” (prospectus) “Principal Investment Strategies” From Fidelity Agricultural Productivity Fund: “Normally investing at least 80% of assets in securities of companies that are relevant to the fund's investment theme of agricultural productivity.” From Fidelity Disruptive Automation Fund: “Normally investing at least 80% of assets in securities of companies that are relevant to the fund's investment theme of disruptive automation.” From Fidelity Disruptive Communications Fund: “Normally investing at least 80% of assets in securities of companies that are relevant to the fund's investment theme of disruptive communications.” From Fidelity Disruptive Finance Fund: “Normally investing at least 80% of assets in securities of companies that are relevant to the fund's investment theme of disruptive finance.” From Fidelity Disruptive Medicine Fund: “Normally investing at least 80% of assets in securities of companies that are relevant to the fund's investment theme of disruptive medicine.” From Fidelity Disruptive Technology Fund: “Normally investing at least 80% of assets in securities of companies that are relevant to the fund's investment theme of disruptive technology.” From Fidelity Water Sustainability Fund: “Normally investing at least 80% of assets in securities of companies that are relevant to the fund’s investment theme of water sustainability.” C: The Staff requests we revise the 80% policy for each fund to state that each fund invests at least 80% of its assets in appropriate companies (e.g., disruptive automation companies for Fidelity Disruptive Automation Fund). R: We will revise the disclosure as shown in the following example: “Normally investing at least 80% of assets in securities of companies that are relevant to the fund's investment theme of disruptive automation companies.” 12) Fidelity Disruptive Automation Fund “Fund Summary” (prospectus) “Principal Investment Strategies” “Fidelity’s disruptive strategies seek to identify innovative developments that could signal new directions for delivering products and services to customers. Generally, these companies have or are developing new or unconventional ways of doing business that could disrupt and displace incumbents over time. This may include creating, providing, or contributing to new or expanded business models, value networks, pricing, and delivery of products and services.” C: The Staff requests we add a reasonable definition of “automation” and a reasonable definition of “disruptive companies.” The Staff asserts that the current definition of “disruptive” permits too much discretion and requests we revise. R: We believe the current disclosure reasonably describes the fund’s investment strategy with regard to both “automation” and “disruptive companies.” We therefore decline to modify the disclosure. 13) Fidelity Disruptive Automation Fund, Fidelity Disruptive Communications Fund, Fidelity Disruptive Finance Fund, Fidelity Disruptive Medicine Fund, and Fidelity Disruptive Technology Fund “Fund Summary” (prospectus) “Principal Investment Strategies” Example from Fidelity Disruptive Automation Fund: “Companies within the disruptive automation theme include but are not limited to those companies that, in the Adviser’s opinion, are engaged in designing and manufacturing automation, enabling technology, tools, or processes including robotics, artificial intelligence, machine vision, process sensors, pneumatic systems, autonomous driving, and 3D printing. In pursuing this investment theme, the fund may invest in companies in any economic sector. Although the fund may invest across economic sectors, the fund concentrates its investments in the industrials and information technology sectors.” C: The Staff requests we confirm if each fund invests 25% or more in each named sector. For example, the Staff inquires if Fidelity Disruptive Automation Fund invests 25% or more in the industrials sector and 25% or more in the information technology sector. If so, the Staff requests we clarify that this is the case. Otherwise, the Staff asserts the concentration policy is too broad and allows freedom of action to concentrate in either sector at any time. R: The funds are in the process of evaluating the Staff’s comment and will respond in connection with an upcoming filing. 14) Fidelity Agricultural Productivity Fund, Fidelity Disruptive Automation Fund, and Fidelity Water Sustainability Fund “Fund Summary” (prospectus) “Principal Investment Strategies” C: The Staff requests we disclose the market capitalization policy for each fund and add small and midcap risks, if appropriate. R: Each fund does not have a principal investment policy of investing in securities with a particular market capitalization. Similarly, the risks associated with small and mid‐cap investing are not principal investment risks of each fund. Accordingly, we have not modified disclosure. Note, however, that while not a principal risk per se, the possibility for market developments to affect different parts of the market (for example, issuers with different market capitalizations) differently is one of the factors addressed under “Principal Investment Risks ” ‐ “Stock Market Volatility.” 15) Fidelity Agricultural Productivity Fund, Fidelity Disruptive Automation Fund, and Fidelity Water Sustainability Fund “Fund Summary” (prospectus) “Principal Investment Strategies” “Investing in securities of domestic and foreign issuers.” C: The Staff requests we disclose that the foreign issuers include emerging markets issuers per the emerging markets risk in the “Principal Investment Risks” section. R: Each fund does not have a principal investment strategy to invest in emerging markets. We have included a reference to emerging markets under “Foreign and Emerging Market Risk” to the extent that each fund may have exposure to certain markets that may be designated emerging markets. Accordingly, we have not modified disclosure. 16) Fidelity Disruptive Automation Fund, Fidelity Disruptive Communications Fund, Fidelity Disruptive Finance Fund, Fidelity Disruptive Medicine Fund, and Fidelity Disruptive Technology Fund “Fund Summary” (prospectus) “Principal Investment Risks” C: The Staff requests we add a concentration risk in the “Principal Investment Risks” section. R: The funds are in the process of evaluating the Staff’s comment and will respond in connection with an