(PUB) Investing 2016

5

November 2016

Morningstar FundInvestor

Data through October 31, 2016 FINRA members: For internal or institutional use only. Fidelity ® Mortgage Securities

Mstar Category Intermediate-Term Bond

Ticker FMSFX

Yield 2.4%

SEC Yield 1.97%

Total Assets $1,117 mil

Benchmark 1: BBgBarc US Agg Bond TR USD Benchmark 2: BBgBarc US Agg Bond TR USD Morningstar Analyst Rating 10-19-16 „

Investment Style Fixed Income

Historical Profile Return Risk Rating Average Low QQQ Neutral

1 5 2 2 5 2 5 2

16.0

Growth of $10,000

Investment Values of Fund Investment Values of Benchmark 1

14.0

Morningstar Pillars Process

12.0

∞ Positive ∞ Positive ∞ Positive ∞ Positive ∞ Positive

Performance

People Parent

10.0

Performance Quartile (within Category)

& ) * ( ( * ) ( & & ) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10-16 11.05 10.45 10.07 10.47 10.83 11.17 11.36 10.95 11.35 11.25 11.45 4.86 -0.42 1.29 9.57 7.26 6.52 4.23 -1.80 6.34 1.47 3.70 0.53 -7.38 -3.95 3.64 0.72 -1.32 0.02 0.22 0.38 0.92 -1.29 0.53 -7.38 -3.95 3.64 0.72 -1.32 0.02 0.22 0.38 0.92 -1.29 4.89 5.18 4.97 5.51 3.80 3.32 2.53 1.84 2.63 2.32 1.91 -0.03 -5.60 -3.68 4.06 3.45 3.19 1.71 -3.64 3.71 -0.85 1.78 0.53 0.56 0.51 0.54 0.39 0.35 0.28 0.21 0.28 0.26 0.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 4.73 5.10 4.91 4.99 3.74 3.33 2.84 1.85 2.51 2.33 2.26 17 97 28 72 55 42 82 55 17 6 89

Price

History

Morningstar Analyst Rating Morningstar evaluates mutual funds based on five key pillars, which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analyst Rating Spectrum Œ „ ´ ‰ Á

NAV

Total Return % +/- Bmark 1 +/- Bmark 2 Income Return % Capital Return % Capital Gains $ Expense Ratio % Income Ratio % Turnover Rate % Net Assets $mil Total Rtn % Rank Cat Income $

Pillar Spectrum ∞ Positive

§ Negative

¶ Neutral

Performance 10-31-16 1st Qtr 2nd Qtr

3rd Qtr

4th Qtr

Total

2012 2013 2014 2015 2016

1.09 1.32 1.74 0.03 4.23 0.08 -2.42 1.18 -0.61 -1.80 1.82 2.28 0.37 1.73 6.34 1.14 -0.68 1.33 -0.31 1.47

232

409

397 936

476 803

527 793

490

451

474 761

398 790

439 886

404 951

1,613 1,263

753 1,082

Rating and Risk Time Period Load-Adj Return %

Portfolio Analysis 09-30-16

1.89 1.28 0.60

— —

Date of Maturity

Value $000

% Assets

Morningstar Rtn vs Cat

Morningstar Risk vs Cat

Morningstar Risk-Adj Rating

Total Fixed Income: 469 Fannie Mae 4% 30 Year Fannie Mae 3.5% 30 Year

Amount 000

Trailing

Total Return%

+/- Bmark 1

+/- Bmark 2

%Rank Cat

Growth of $10,000

— 126,185 136,214 10.87 — 120,688 127,894 10.21 — 88,244 94,295 7.53 — 82,444 87,618 6.99 — 80,973 84,367 6.73 — 46,051 49,744 3.97 — 45,663 47,564 3.80 — 39,351 41,220 3.29 — 31,333 34,686 2.77 — 31,245 34,361 2.74 — 29,544 32,069 2.56 — 29,912 31,826 2.54 — 24,936 25,836 2.06 — 19,141 20,146 1.61 — 14,241 15,185 1.21 — 14,025 14,778 1.18

1 Yr 3 Yr 5 Yr

3.35 3.39 2.91 3.84 6.58

3 Mo 6 Mo

0.14 1.08 1.08 1.46 -0.05 -0.04 3.35 -1.02 -1.02 3.39 -0.09 -0.09 2.91 0.01 0.01 3.84 -0.80 -0.80 4.04 -0.56 -0.56

10 10,014 76 10,146 83 10,335 39 11,051 64 11,544 78 14,572 69 18,111

Low QQQ -Avg QQQ

Avg Avg

GNMA 3.5%

1 Yr

Freddie Mac 3.5% 30 Yea Fannie Mae 3% 30 Year

Low QQ

10 Yr Incept

-Avg

3 Yr Avg 5 Yr Avg 10 Yr Avg 15 Yr Avg

FHLB 4%

Freddie Mac 3% 30 Year Ginnie Mae 3% 30 Year

Other Measures

Standard Index

Best Fit Index

Alpha

1.1

0.1

GNMA 4.5%

Beta

0.65

1.02

Tax Analysis

Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

Fannie Mae 4.5% 30 Year

R-Squared

78

97

3 Yr (estimated) 5 Yr (estimated) 10 Yr (estimated)

2.32 1.93 2.53

23 43 74

1.03 0.95 1.26

32 20 31

GNMA 4%

Standard Deviation

1.98 3.39 1.64

Fannie Mae 3.5% 15 Year Fannie Mae 2.5% 15 Year Fannie Mae 3% 15 Year Freddie Mac 3.5% 20 Yea Freddie Mac 3% 15 Year

Mean

Sharpe Ratio

Potential Capital Gain Exposure: -5% of assets

Morningstar's Take by Sarah Bush 10-19-16 Fidelity Mortgage Securities benefits from an experienced team, a thoughtful, well-resourced strategy, and low fees. It thus earns a Morningstar Analyst Rating of Silver. Manager Bill Irving and comanager Franco Castagliuolo have distinguished themselves running pure government options, including Fidelity GNMA FGMNX, and take a similar approach here. This mortgage-focused fund is dominated by government-backed mortgages but has the flexibility to invest modestly in nongovernment fare. At 10% to 15% of the portfolio, the latter's mix of asset-backed and residential- and commercial- mortgage-backed securities is enough to push it into the intermediate-term bond Morningstar Category. The managers avoid significant interest-rate bets and instead focus on individual security selection. In recent years, for example, they have exploited regulatory changes and nuances in the performance of mortgage pools with different loan/value ratios to good effect in their effort to identify loansthatare less likelytoprepaythantheirprices imply. The pair has also shown a willingness to venture into less traveled and therefore higher-yielding corners of

GNMA CMO 2.5%

08-20-64

12,709 12,877 1.03 12,633 12,665 1.01

the market, such as floating-rate securities backed by reverse mortgages. Although it has the flexibility to invest up to 10% in junk-rated fare, the fund tends to maintain a high-quality focus and therefore has held limited exposure to precrisis nonagency mortgage originations. As a result, it has lagged some of its more aggressive mortgage-focused peers who invested more heavily in that market, which has been a strong performer for most of the postcrisis period. The fund looks better relative to other government-mortgage-focused competitors and its government-only Bloomberg Barclays U.S. Mortgage Backed Securities Index. Relative to its typically wider- ranging intermediate-term bond category, its returns are only middling over Irving's tenure through September 2016, but its volatility-adjusted returns, as measured by its Sharpe ratio, are impressive. This fund makes a strong choice for those in search of a high-quality mortgage fund with a little extra zip.

Gahr Coml Mtg Tr 2015-N 12-15-34

FHLB 5%

— 9,806 11,063 0.88 — 9,641 10,454 0.83

Fannie Mae 4% 20 Year

Current Investment Style

Sector Breakdown

% Assets

Government

0

Duration Ltd Mod Ext

Government Related

13 15

Quality High Med Low

Corporate

Agency MBS 57 Non-Agency Residential MBS 4 Commercial MBS 5 Covered Bond 0 Asset Backed 4 Municipal 0 Cash & Equivalents 2 Other 0

1 figure provided by fund

2.9 Yrs

Avg Eff Duration 1 Avg Eff Maturity Avg Credit Quality Avg Wtd Coupon

—

A

3.59%

Avg Wtd Price

104.70% of par

Composition - Net Cash

Coupon Range

% of Bonds

2.2 Bonds 0.0 Other

97.9

0% PIK

0.0

Stocks

0.0

0% to 4% 4% to 6% 6% to 8% 8% to 10%

81.7 15.8

Special Securities Restricted/Illiquid Secs Emerging-Markets Secs Options/Futures/Warrants

2.3 0.2 0.1

9 0 0

More than 10%

Address:

Fidelity Advisor Series II

Minimum Purchase: Min Auto Inv Plan:

$2500 Add: — IRA: $2500

Boston, MA 02109

— Add: —

Credit Analysis

% bonds 09-30-16

800-544-8544

Sales Fees:

No-load

AAA

92 BB

0 0 0

Web Address:

www.advisor.fidelity.com

Management Fee:

0.20%

AA

4 B

Inception:

12-31-84

Actual Fees:

Mgt:0.31% Dist:—

A

1 Below B

Advisor:

Fidelity Management & Research Company FMR Investment Management (U.K.) Limited

Expense Projections: 3Yr:$144 5Yr:$252 10Yr:$567

BBB

0 Not Rated 3

Subadvisor:

Income Distribution:

Monthly

D

Mutual Funds

ß ®

©2016Morningstar, Inc.All rights reserved. The information herein is not represented orwarranted to be accurate, complete or timely. Past performance is no guarantee of future results.Access updated reports at www.morningstar.com . To order reprints, email reprints@morningstar.com