FIDELITY COMMONWEALTH TRUST, N-30D, 1994-12-15

FIDELITY COMMONWEALTH TRUST
N-30D, 1994-12-15

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(2_FIDELITY_LOGOS)FIDELITY

SMALL CAP STOCK
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy, and outlook.

INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 10 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 27 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 31 Notes to the financial statements.

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR
GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE
FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NEITHER THE FUND NOR FIDELITY
DISTRIBUTORS
CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING
CHARGES
AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February has continued into the
fourth quarter of 1994. The Board raised the federal funds rate - the rate
banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. A sixth increase in November
lifted the rate to 5.50%. The Fed rate hikes were intended to forestall
inflation that could result from an improving U.S. economy, and they led to
below-average returns for many stocks and negative returns for many bond
investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different stock funds or
in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and it is important to remember
that money market funds are not insured by any agency of the U.S.
government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 6 LIFE OF
MONTHS FUND

Small Cap Stock 1.23% 8.01%

Small Cap Stock (incl. 3% sales charge) -1.81% 4.77%

Russell 2000 1.75% 13.00%

Average Small Company Growth 3.64% n/a
Fund

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months or since the fund started on
June 28, 1993. For example, if you invested $1,000 in a fund that had a 5%
return over the past year, you would end up with $1,050. You can compare
these figures to the performance of the Russell 2000 index - a broad
measure of small company stocks. You can also compare them to the average
small company growth fund, which reflects the performance of 248 small
company growth funds tracked by Lipper Analytical Services. Both benchmarks
include reinvested dividends and capital gains, if any, and exclude the
effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 1 LIFE OF
YEAR FUND

Small Cap Stock 0.57% 5.90%

Small Cap Stock (incl. 3% sales charge) -2.45% 3.53%

Russell 2000 -0.31% 9.51%

Average Small Company Growth 1.85% n/a
Fund

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity Small Cap Stock(336)Russell 2000 Index
06/28/93 9700.00 10000.00
06/30/93 9700.00 10062.00
07/31/93 9767.90 10200.86
08/31/93 10126.80 10641.53
09/30/93 10340.20 10941.62
10/31/93 10417.80 11223.92
11/30/93 10126.80 10858.02
12/31/93 10555.20 11229.36
01/31/94 10818.59 11580.84
02/28/94 10906.39 11539.15
03/31/94 10184.50 10931.04
04/30/94 10350.34 10995.53
05/31/94 10077.19 10871.28
06/30/94 9579.68 10504.92
07/31/94 9657.72 10677.20
08/31/94 10340.59 11271.92
09/30/94 10282.05 11233.59
10/31/94 10477.16 11188.21

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Small Cap Stock Fund on June 28, 1993, when the fund began, and paid a 3%
sales charge. As the chart shows, by October 31, 1994, the value of your
investment would have grown to $10,477 - a 4.77% increase on your initial
investment. For comparison, look at how the Russell 2000 did over the same
period. With dividends reinvested, the same $10,000 investment would have
grown to $11,300 - a 13.00% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and return
of a fund that invests in stocks
will vary. That means if you
sell your shares during a
market downturn, you might
lose money.
But if you can ride out the
market's ups and downs, you
may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW

An Interview with Brad Lewis,
Portfolio Manager of Fidelity Small Cap Stock Fund
Q. BRAD, HOW DID THE FUND DO?
A. Not as well as I would have liked. The fund returned 1.23% for the six
months ending October 31, 1994. That
is below both the Russell 2000 which returned 1.75% and the average small
company growth fund tracked by Lipper Analytical Services which increased
3.64% for the same six-month time frame.
Q. WHY DID THE FUND UNDERPERFORM BOTH ITS PEERS AND THE MARKET?
A. One reason is that many competitors are more liberal with their
definition
of "small cap" and own many mid-cap stocks, while this fund is heavily
invested in small caps. We define small cap stocks as those with a market
capitalization of $750 million or less. Unfortunately, market breadth has
been horrible. Stocks that have done relatively well have been limited to
more established or "blue chip" stocks. This is proven by the fact that the
Dow Jones Industrial Average, a weighted average made up of 30 of the
country's largest industrial companies, has outperformed the Russell 2000,
which measures a wider range of smaller- to medium-sized companies. For the
six months ending October 31, 1994, the DJIA has increased 7.61%, while the
Russell 2000 rose only 1.75%. In small cap stocks you see much larger price
swings than in "blue chips." For a couple of years, small caps have
outperformed the overall market; now it looks as if the tide may have
turned.
Q. OVER THE PERIOD, YOU HAVE INCREASED YOUR HOLDINGS IN FINANCIAL STOCKS
FROM 9.0% TO 12.2%. WHY?
A. Well, when I reduced my holdings in technology, I had to invest
somewhere and financial stocks looked more attractive because those stocks
had been battered by the market and looked inexpensive. The Federal Reserve
Board begain raising short-term interest rates and, though it's not clear
to what extent the higher rates will influence growth, it could have an
impact on stock performance of financial companies. Some financial stock
investors fear that continuing rate increases could hurt profits in the
long run. However, many banks, such as Dime Bancorp, Inc. in New York, are
showing improving balance sheets. There has also been some consolidation
among regional banks, making them stronger. Once rates level off, financial
companies could begin to show some earnings improvement. However, I should
point out that a 12% weighting in financial stocks is not out of line
compared to the Russell index.
Q. DO YOU HAVE ANY REGRETS ABOUT THE WAY YOU'VE MANAGED THE FUND OVER THE
SIX MONTHS?
A. Yes I do. I was overweighted in
the technology sector for too long. My technology position peaked in May
when it reached 31.8%, though by October, I had reduced it to about 20%.
Technology stocks are cyclical in nature; their prices rise and fall with
changes in the business cycle. After a very strong year or so, technology
stocks started to fall in the early spring. Though earnings had been good,
investors began worrying about the stocks getting too expensive and being
unable to maintain future earnings power. If I had a crystal ball I would
have sold more of my technology stocks in March or April before they
started to fall.
Q. WHAT RECENT ENHANCEMENTS HAVE YOU MADE TO THE COMPUTER MODEL FOR SMALL
CAP STOCK?
A. We're always trying to build a better mousetrap. I've implemented a new
valuation model that analyzes balance sheet, cash flow and historical price
movements to determine which stocks could be beneficial to buy and sell for
the portfolio. Previously, the model spent more time analyzing estimate
revisions and quarterly earnings growth to make those decisions. Also,
simply because of increased computer capacity, I can juggle six times more
data and use more than 100 variables in my universe of small cap stocks.
Because I can analyze data more quickly and efficiently, I can potentially
do a better job of forecasting returns. Additionally, I've had some luck
perfecting a relatively short-term model that forecasts market returns. I
will be using it to help manage the fund's cash.
Q. WHAT IS YOUR OUTLOOK FOR THIS FUND?
A. Small cap stocks move a few months ahead of the business cycle. When the
economy is strengthening, small caps outperform. If the business cycle is
at its zenith now, the stocks in this fund could hit a bad stretch and head
downward. I expect the market environment to continue to be tough for a
while. The consistency and discipline associated with this fund will help
to get it through. A neural network can be trained and a well-trained
neural network should find attractive stocks to help it beat the market in
most environments. We have stepped up our research of foreign markets and
securities. If the outlook for small cap stocks in the U.S. continues to
deteriorate, I will shift a small portion of the portfolio's assets into
attractive small cap stocks in
foreign markets.

FUND FACTS
GOAL: to increase the value
of the fund's shares by
investing in small company
stocks, chosen in part by
using computer-aided
quantitative analysis
START DATE: June 28, 1993
SIZE: as of October 31, 1994,
more than $687 million
MANAGER: Brad Lewis, since
June 1993; manager, Fidelity
Disciplined Equity, since
December 1988, and Fidelity
Stock Selector, since
September 1990; joined
Fidelity in 1985
(checkmark)

BRAD LEWIS ON SEGREGATING
DATA INDUSTRY ANALYSIS:
"As technology improves,
more data becomes available
for analysis. Whether that
information is used in a
traditional way or in more
formal, technical ways
depends on the portfolio
manager. The important thing
is to be able to use all of the
available data in a meaningful
way. Because of
technological strides made
only in the past several
months, I can develop and
use much more complex
models than I could before on
my personal computer. One
of the best new uses I've
found for technology is
segregating industry data.
What I mean is slicing and
dicing information to isolate
factors that affect different
kinds of stocks and to what
extent. For instance, interest
rates, unemployment figures
and earnings estimates
influence returns of the utility
sector much differently than
retail stocks. By putting this
kind of information to work,
we can potentially improve
returns for the fund."
(solid bullet) The fund's technology
position was reduced from
30.3% to 20.4% during the
period.
(solid bullet) Of the fund's top 10
holdings, two of these,
Cadence Design Systems,
Inc., and Antec Corp. are new
to the fund.
INVESTMENT CHANGES

TOP TEN STOCKS AS OF OCTOBER 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO

Novellus Systems, Inc. 3.2 2.4

Williams-Sonoma, Inc. 3.1 2.3

Atmel Corp. 2.2 3.3

KLA Instruments Corp. 2.0 0.5

Cadence Design Systems, Inc. 1.8 -

Integrated Device Technology, 1.7 2.0
Inc.

Integrated Health Services, Inc. 1.2 0.8

Dime Bancorp, Inc. 1.0 0.2

Filenet Corp. 1.0 1.2

Antec Corp. 0.9 -

TOP FIVE INDUSTRIES AS OF OCTOBER 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO

Technology 20.4 30.3

Finance 12.2 9.0

Retail & Wholesale 8.4 7.3

Durables 6.8 6.4

Health 5.4 11.4

ASSET ALLOCATION
AS OF OCTOBER 31, 1994 AS OF APRIL 30, 1994
Row: 1, Col: 1, Value: 18.7
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 41.3
Row: 1, Col: 1, Value: 19.8
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 40.2
Stocks 81.3%
Short-term
Investments 18.7%
Stocks 80.2%
Short-term
Investments 19.8%
INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 81.3%
SHARES VALUE (NOTE 1)

AEROSPACE & DEFENSE - 0.7%
AEROSPACE & DEFENSE - 0.6%
Alliant Techsystems, Inc. (a) 6,300 $ 216,563
Aviall, Inc. 48,900 489,000
Special Devices, Inc. 35,000 625,625
Thiokol Corp. 116,000 2,856,500
4,187,688
DEFENSE ELECTRONICS - 0.1%
Flir Systems, Inc. (a) 12,000 162,000
Whittaker Corp. (a) 28,000 518,000
680,000
TOTAL AEROSPACE & DEFENSE 4,867,688
BASIC INDUSTRIES - 5.3%
CHEMICALS & PLASTICS - 2.2%
Applied Extrusion Technologies, Inc. (a) 101,000 1,199,362
Arcadian Partners LP (Preference Unit) 49,800 1,195,200
Carlisle Plastics, Inc. Class A (a) 20,300 96,425
First Mississippi Corp. 49,000 1,029,000
Foamex International, Inc. (a) 157,000 1,413,000
Lamson & Sessions Co. (a) 64,800 437,400
McWhorter Technologies, Inc. (a) 30,200 562,475
OM Group, Inc. 81,000 1,620,000
Sterling Chemical, Inc. (a) 398,600 4,833,025
Sybron Chemical Industry Corp. (a) 11,000 222,750
Synalloy Corp. 15,000 292,500
Univar Corp. 23,000 319,125
Vigoro Corp. 68,000 2,091,000
15,311,262
IRON & STEEL - 2.1%
Acme Metals, Inc. (a) 45,000 908,438
Armco, Inc. (a) 483,500 3,444,938
Atchison Casting Corp. (a) 18,000 301,500
Cleveland Cliffs, Inc. 38,000 1,448,750
Material Sciences Corp. (a) 12,800 203,200
Mueller Industries, Inc. (a) 21,000 664,125
National Steel Corp. Class B (a) 38,000 674,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

BASIC INDUSTRIES - CONTINUED
IRON & STEEL - CONTINUED
Quanex Corp. 102,000 $ 2,537,250
WHX Corp. (a) 328,000 4,920,000
15,102,701
METALS & MINING - 0.3%
Brush Wellman, Inc. 65,400 1,095,450
Castech Aluminum Group (a) 5,000 73,750
Encore Wire Corp. (a) 22,000 368,500
Magma Copper Co. Class B (a) 47,200 843,700
2,381,400
PAPER & FOREST PRODUCTS - 0.7%
Chesapeake Corp. 21,000 651,000
Drypers Corp. (a) 15,000 195,000
Playtex Products, Inc. (a) 334,000 3,047,750
Rock-Tenn Co. Class A 32,000 552,000
Triangle Pacific Corp. (a) 15,000 204,375
4,650,125
TOTAL BASIC INDUSTRIES 37,445,488
CONGLOMERATES - 0.1%
Instrument Systems Corp. (a) 56,000 420,000
Quixote Corp. 29,000 467,625
887,625
CONSTRUCTION & REAL ESTATE - 2.3%
BUILDING MATERIALS - 1.2%
Grow Group, Inc. 44,000 632,500
Lilly Industrial Coatings, Inc. Class A 38,000 522,500
Medusa Corp. 160,000 3,640,000
Ply-Gem Industries, Inc. 90,500 1,945,750
Southdown, Inc. (a) 106,000 1,841,750
8,582,500
CONSTRUCTION - 1.1%
Blount, Inc. Class A 16,000 682,000
Butler Manufacturing Co. 700 24,150
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - CONTINUED
Granite Construction, Inc. 32,000 $ 700,000
Lennar Corp. 113,000 1,709,125
NCI Building Systems, Inc. (a) 21,000 393,750
Presley Companies (The) 3,900 11,700
Redman Industries, Inc. (a) 107,000 1,832,375
Ryland Group, Inc. 58,000 935,250
Schult Homes Corp. 2,000 26,000
U.S. Home Corp. (a) 89,000 1,412,875
7,727,225
TOTAL CONSTRUCTION & REAL ESTATE 16,309,725
DURABLES - 6.8%
AUTOS, TIRES, & ACCESSORIES - 1.7%
APS Holding Corp. Class A (a) 93,000 2,743,500
Borg Warner Automotive, Inc. 50,000 1,125,000
Excel Industries, Inc. 41,000 615,000
Hayes Wheels International, Inc. 21,000 493,500
Hi-Lo Automotive, Inc. (a) 51,000 573,750
Masland Corp. 118,000 1,902,750
NACCO Industries, Inc. Class A 31,000 1,829,000
Purolator Products Co. 31,000 767,250
Raymond Corp. (The) 30,000 577,500
SPX Corp. 17,100 297,113
Simpson Industries, Inc. 39,000 507,000
Smith (A.O.) Corp. Class B 21,000 511,875
Stant Corp. 28,500 324,188
12,267,426
CONSUMER DURABLES - 0.0%
Libbey, Inc. 2,000 31,750
Oneida Ltd. 7,000 98,000
129,750
CONSUMER ELECTRONICS - 1.1%
Duracraft Corp. (a) 117,400 4,373,150
Fossil, Inc. (a) 23,800 654,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

DURABLES - CONTINUED
CONSUMER ELECTRONICS - CONTINUED
Harman International Industries, Inc. 25,000 $ 893,750
Toro Co. 59,500 1,651,125
7,572,525
HOME FURNISHINGS - 1.8%
Bush Industries, Inc. Class A 67,500 1,763,438
Chromcraft Revington, Inc. (a) 12,000 256,500
Kinetic Concepts, Inc. 19,000 116,375
LADD Furniture, Inc. 78,000 487,500
Levitz Furniture, Inc. (a) 488,000 4,270,000
O'Sullivan Industries Holdings (a) 288,000 3,636,000
Rhodes, Inc. (a) 219,000 2,135,250
Welcome Home (a) 25,000 237,500
12,902,563
TEXTILES & APPAREL - 2.2%
Chic By H I S, Inc. (a) 38,300 411,725
Cygne Designs, Inc. (a) 100 1,288
Fieldcrest Cannon, Inc. (a) 72,000 1,836,000
Galey & Lord, Inc. (a) 47,800 743,888
Guilford Mills, Inc. 12,900 266,063
Haggar Corp. 104,100 2,498,400
L.A. Gear, Inc. (a) 245,000 1,715,000
St. John Knits (a) 163,000 4,971,500
Springs Industries, Inc. Class A 42,000 1,695,750
Tultex Corp. 86,000 440,750
Warnaco Group, Inc. Class A (a) 40,200 758,775
15,339,139
TOTAL DURABLES 48,211,403
ENERGY - 3.6%
COAL - 0.4%
Ashland Coal, Inc. 6,400 195,200
Eastern Enterprises Co. 98,000 2,548,000
2,743,200
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

ENERGY - CONTINUED
ENERGY SERVICES - 2.0%
Input/Output, Inc. (a) 247,200 $ 5,314,800
Newpark Resources, Inc. (a) 138,000 3,174,000
Smith International, Inc. (a) 338,200 5,664,850
14,153,650
OIL & GAS - 1.2%
American Exploration Co. (a) 274,000 325,375
Benton Oil & Gas Co. (a) 151,000 1,179,688
Camco International, Inc. 111,000 2,289,375
Cross Timbers Oil Co. 18,000 288,000
Enron Liquids Pipeline LP 1,500 39,750
Lakehead Pipe Line Partners LP 26,100 753,638
Plains Resources, Inc. (a) 63,000 417,375
Snyder Oil Corp. 46,000 793,500
Tesoro Petroleum Corp. (a) 206,000 1,931,250
Wainoco Oil Corp. (a) 187,000 958,375
8,976,326
TOTAL ENERGY 25,873,176
FINANCE - 12.2%
BANKS - 2.2%
CCB Financial Corp. 10,100 406,525
Centura Banks, Inc. 26,700 587,400
City National Corp. (a) 271,000 2,981,000
Colonial BancGroup, Inc. Class A 12,000 274,500
Commerce Bancorp, Inc. 43,000 806,250
Commerce Bank, Virginia Beach 9,000 333,000
Community First Bankshares, Inc. 20,000 290,000
Fidelity FSB (Garden City, NY) (a) 116,600 3,272,088
First Colonial Bankshares Corp. Class A 43,000 967,500
Fort Wayne National Corp. 15,000 410,625
Irwin Financial Corp. 10,000 272,500
Peoples Heritage Financial Group, Inc. 132,000 1,856,250
Riggs National Corp. (a) 119,000 1,071,000
Trustmark Corp. 18,000 321,750
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

FINANCE - CONTINUED
BANKS - CONTINUED
UST Corp. (a) 11,600 $ 131,950
Westamerica Bancorp 43,600 1,384,300
15,366,638
CREDIT & OTHER FINANCE - 1.4%
Autofinance Group, Inc. (a) 5,000 48,750
Equicredit Corp. (a) 15,600 451,425
Foothill Group, Inc., Class A 171,300 2,569,500
GFC Financial Corp. 5,000 168,750
Money Store, Inc. 157,450 3,208,044
TFC Enterprises, Inc. (a) 19,000 218,500
United Companies Financial Corp. 100,000 3,325,000
9,989,969
INSURANCE - 4.2%
Allied Group, Inc. 20,000 585,000
American Travellers Corp. (a) 111,000 1,928,625
CMAC Investments 181,300 4,985,750
Capital RE Corp. 152,100 3,346,200
Enhance Financial Services Group Corp. 29,400 529,200
Fremont General Corp. 174,750 4,303,219
HealthCare Compare Corp. (a) 4,400 122,650
Hilb, Rogal & Hamilton Co. 12,400 147,250
Home State Holdings, Inc. (a) 20,000 285,000
Mutual Assurance, Inc. 13,000 377,000
PXRE Corp. 51,000 1,255,875
Penncorp Financial Group, Inc. 354,000 5,575,500
Protective Life Corp. 22,000 990,000
RLI Corp. 6,600 139,425
Reliance Group Holdings, Inc. 407,000 2,492,875
Selective Insurance Group, Inc. 30,000 757,500
USLICO Corp. 57,000 1,140,000
Washington National Corp. 43,000 929,875
29,890,944
SAVINGS & LOANS - 3.8%
Albank Financial Corp. 54,000 1,208,250
American Federal Bank FSB 47,000 564,000
Andover Bancorp, Inc. 18,000 290,250
Bankers Corp. 20,000 292,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

FINANCE - CONTINUED
SAVINGS & LOANS - CONTINUED
Bay View Capital, Inc. 18,000 $ 409,500
CSF Holdings, Inc. Class B (a) 17,000 433,500
California Federal Bank Class A (a) 373,000 4,289,500
Charter One Financial Corp. 94,000 1,903,500
Coast Savings Financial, Inc. (a) 198,000 2,821,500
Columbia First Federal Savings & Loan Association (a) 7,000 276,500
Dime Bancorp, Inc. (a) 836,000 7,315,000
Great Lakes Bancorp FSB 84,300 2,170,725
Greater New York Savings Bank (a) 139,000 1,224,938
Loyola Capital Corp. 29,000 580,000
Medford Savings Bank 7,400 112,850
Provident Bancshares Corp. 13,500 330,750
TCF Financial Corp. 82,000 3,198,000
27,421,263
SECURITIES INDUSTRY - 0.6%
Alex. Brown, Inc. 86,000 2,375,750
Legg Mason, Inc. 64,000 1,344,000
Pioneer Group, Inc. 14,500 681,500
4,401,250
TOTAL FINANCE 87,070,064
HEALTH - 5.4%
DRUGS & PHARMACEUTICALS - 0.4%
Bio-Rad Laboratories, Inc. Class A (a) 32,000 832,000
Dura Pharmaceuticals, Inc. (a) 52,000 676,000
Ecogen, Inc. (a) 326,000 1,263,250
Quintiles Transnational Corp. (a) 7,000 180,250
XOMA Corp. (a) 1,000 3,000
2,954,500
MEDICAL EQUIPMENT & SUPPLIES - 0.9%
Acuson Corp. (a) 135,000 2,480,625
Bindley Western Industries, Inc. 16,000 208,000
Cabot Medical Corp. (a) 48,000 252,000
Chemtrak, Inc. (a) 53,000 208,688
Conmed Corp. (a) 53,000 1,146,125
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - CONTINUED
Fresenius USA, Inc. (a) 2,600 $ 22,100
Herbalife International, Inc. 31,800 532,650
Mentor Corp. 10,000 168,750
Spacelabs Medical, Inc. (a) 35,000 735,000
Sybron Corp. (a) 28,000 969,500
6,723,438
MEDICAL FACILITIES MANAGEMENT - 4.1%
American Homepatient, Inc. (a) 18,000 396,000
Careline, Inc. (a) 94,000 611,000
Charter Medical Corp. (a) 167,000 4,133,250
Community Psychiatric Centers 182,600 1,803,175
Coventry Corp. 63,700 1,592,500
Employee Benefit Plans, Inc. (a) 115,000 1,308,125
Gencare Health Systems, Inc. (a) 18,000 832,500
Healthwise America, Inc. (a) 30,000 1,050,000
Integrated Health Services, Inc. (a) 211,000 8,598,250
Lincare Holdings, Inc. (a) 10,500 286,125
Ren Corp. - USA 27,000 337,500
Sierra Health Services, Inc. (a) 53,000 1,722,500
United HealthCare Corp. 87,344 4,607,396
Universal Health Services, Inc. Class B (a) 68,600 1,826,475
29,104,796
TOTAL HEALTH 38,782,734
HOLDING COMPANIES - 0.3%
Triarc Companies, Inc. Class A (a) 153,000 1,778,625
INDUSTRIAL MACHINERY & EQUIPMENT - 5.4%
ELECTRICAL EQUIPMENT - 1.9%
AMETEK, Inc. 57,000 1,033,125
Amphenol Corp. Class A (a) 15,300 334,688
Antec Corp. (a) 228,000 6,498,000
BMC Industries, Inc. 62,000 1,007,500
Baldor Electric Co. 4,680 121,680
Catalina Lighting, Inc. (a) 27,000 293,625
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
ELECTRICAL EQUIPMENT - CONTINUED
ECC International Corp. (a) 213,000 $ 2,343,000
Holophane Corp. (a) 13,000 230,750
Juno Lighting, Inc. 30,000 562,500
Oak Industries, Inc. (a) 43,600 1,122,700
Ortel Corp. 1,000 27,250
Willcox & Gibbs, Inc. (a) 15,000 103,125
13,677,943
INDUSTRIAL MACHINERY & EQUIPMENT - 3.2%
Applied Power, Inc. Class A 34,000 837,250
Baldwin Technology, Inc. Class A (a) 2,000 12,250
Bearings, Inc. 14,000 456,750
Brenco, Inc. 10,000 118,750
Detroit Diesel Corp. (a) 30,000 742,500
FSI International, Inc. 45,000 1,243,125
Greenfield Industries, Inc. 84,000 1,995,000
Harnischfeger Industries, Inc. 20,000 500,000
IDEX Corp. (a) 32,000 1,392,000
Imo Industries, Inc. (a) 112,000 1,064,000
Indresco, Inc. (a) 169,000 2,112,500
JLG Industries, Inc. 43,900 1,668,200
Kaman Corp. Class A 3,100 30,225
Kennametal, Inc. 186,403 5,242,584
PRI Automation, Inc. (a) 3,000 45,750
Park-Ohio Industries, Inc. (a) 59,400 801,900
Ultratech Stepper, Inc. 61,000 2,394,250
Varlen Corp. 18,000 414,000
Watts Industries, Inc. Class A 21,000 504,000
Welbilt Corporation (a) 36,000 891,000
22,466,034
POLLUTION CONTROL - 0.3%
Flair Corp. 8,000 140,000
International Technology Corp. (a) 208,000 806,000
TETRA Technologies, Inc. 23,900 200,163
Western Waste Industries, Inc. (a) 59,000 1,032,500
2,178,663
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 38,322,640
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

MEDIA & LEISURE - 2.7%
BROADCASTING - 0.7%
Emmis Broadcasting Corp. Class A (a) 5,000 $ 78,750
Evergreen Media Corp. Class A (a) 30,000 532,500
Heritage Media Corp. Class A (a) 128,000 3,104,000
Lodgenet Entertainment Corp. (a) 58,000 420,500
SFX Broadcasting, Inc. (a) 23,000 391,000
United Video Satellite Group A (a) 5,000 113,750
4,640,500
ENTERTAINMENT - 0.2%
Carmike Cinemas, Inc. Class A (a) 38,000 826,500
GC Companies, Inc. (a) 12,700 358,775
1,185,275
LEISURE DURABLES & TOYS - 0.7%
ARCTCO, Inc. 94,000 1,903,500
Champion Enterprises, Inc. 22,000 781,000
Club Car, Inc. (a) 15,000 243,750
Coachmen Industries, Inc. 36,200 461,550
Leslie's Poolmart 27,000 371,250
Outboard Marine Corp. 73,600 1,518,000
5,279,050
LODGING & GAMING - 0.4%
Aztar Corp. (a) 173,000 1,038,000
Marine Harvest International, Inc. (a) 19,900 199,000
Prime Hospitality Corp. (a) 231,000 1,790,250
3,027,250
PUBLISHING - 0.4%
Banta Corp. 12,500 387,500
Central Newspapers, Inc. Class A 67,000 1,884,375
Houghton Mifflin Co. 18,000 828,000
3,099,875
RESTAURANTS - 0.3%
Hometown Buffet, Inc. (a) 114,000 1,311,000
Sbarro, Inc. 2,500 62,188
Uno Restaurant Corp. (a) 45,000 607,500
1,980,688
TOTAL MEDIA & LEISURE 19,212,638
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

NONDURABLES - 2.1%
AGRICULTURE - 0.0%
DEKALB Genetics Corp. Class B 8,000 $ 240,000
BEVERAGES - 0.0%
Coca-Cola Bottling Co. 8,000 214,000
FOODS - 1.2%
Brothers Gourmet Coffees, Inc. (a) 53,000 702,250
Hudson Foods, Inc. Class A 162,700 3,579,400
International Multifoods Corp. 63,000 1,134,000
Michael Foods, Inc. 89,000 878,875
Pilgrims Pride Corp. 30,000 300,000
RalCorp Holdings, Inc. (a) 96,300 1,998,225
8,592,750
HOUSEHOLD PRODUCTS - 0.9%
American Safety Razor Co. (a) 45,000 618,750
Guest Supply, Inc. (a) 49,000 882,000
Helen of Troy Corp. (a) 76,100 1,417,363
Helene Curtis Industries, Inc. 36,000 1,273,500
Inbrand Corp. 28,000 399,000
Stanhome, Inc. 48,000 1,614,000
6,204,613
TOTAL NONDURABLES 15,251,363
RETAIL & WHOLESALE - 8.4%
APPAREL STORES - 0.8%
BON-TON Stores, Inc. (a) 54,100 676,250
Genesco, Inc. (a) 128,000 288,000
United States Shoe Corp. 201,700 3,605,388
Urban Outfitters, Inc. (a) 39,000 1,179,750
5,749,388
DRUG STORES - 0.1%
Arbor Drugs, Inc. 27,000 573,750
GENERAL MERCHANDISE STORES - 1.2%
Bradlees, Inc. 70,000 1,076,250
Broadway Stores, Inc. (a) 249,000 2,801,250
Caldor Corp. (a) 32,000 916,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Gottschalks, Inc. 50,000 $ 412,500
Michaels Stores, Inc. (a) 42,100 1,707,681
Younkers, Inc. (a) 69,200 1,349,400
8,263,081
GROCERY STORES - 0.4%
Carr-Gottstein Foods Co. (a) 64,000 440,000
Penn Traffic Co. (a) 25,000 1,031,250
Smith's Food & Drug Center, Inc. 51,000 1,319,625
Super Food Services, Inc. 21,000 220,500
Super Rite Corp. 16,000 228,000
3,239,375
RETAIL & WHOLESALE, MISCELLANEOUS - 5.9%
CDW Computer Centers, Inc. (a) 54,000 1,620,000
Corporate Express (a) 3,000 67,500
Diagnostek, Inc. 213,400 3,361,050
Friedmans, Inc. Class A (a) 18,000 292,500
Grossman's, Inc. (a) 189,700 569,100
Intertan, Inc. (a) 55,700 445,600
Payless Cashways, Inc. (a) 62,000 581,250
Rex Stores Corp. (a) 38,000 722,000
Sotheby's Holdings, Inc. Class A 201,000 2,437,125
Tiffany & Company, Inc. 109,000 4,251,000
Waban, Inc. (a) 335,600 5,956,900
Williams-Sonoma, Inc. (a) 637,050 21,978,225
42,282,250
TOTAL RETAIL & WHOLESALE 60,107,844
SERVICES - 1.4%
ADVERTISING - 0.2%
ADVO-Systems, Inc. 81,000 1,437,750
PRINTING - 0.7%
Cadmus Communications Corp. 10,000 180,000
Cyrk, Inc. (a) 85,000 3,315,000
Devon Group, Inc. (a) 15,000 373,125
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

SERVICES - CONTINUED
PRINTING - CONTINUED
Merrill Corp. 48,000 $ 888,000
New England Business Service, Inc. 19,000 356,250
5,112,375
SERVICES - 0.5%
CDI Corp. (a) 24,000 408,000
CPI Corp. 49,000 1,065,750
Children's Discovery Center `A' 10,000 135,000
Comdata Holdings Corp. 2,500 29,375
Corrections Corp. of America (a) 32,000 544,000
G & K Services Inc. Class A 26,000 429,000
National Education Corp. (a) 96,000 468,000
3,079,125
TOTAL SERVICES 9,629,250
TECHNOLOGY - 20.4%
COMMUNICATIONS EQUIPMENT - 0.8%
Active Voice Corp. (a) 2,100 47,775
Inter-Tel, Inc. (a) 46,000 379,500
Keptel, Inc. (a) 70,000 1,233,750
Microcom, Inc. (a) 136,900 1,232,100
Perceptron, Inc. (a) 19,400 407,400
Plantronics, Inc. (a) 42,000 1,291,500
Porta Systems Corp. (a) 1,700 10,838
Telco Systems, Inc. (a) 89,000 1,557,500
6,160,363
COMPUTER SERVICES & SOFTWARE - 2.9%
Anacomp, Inc. (a) 136,000 357,000
Brandon Systems Corp. 23,000 431,250
Cadence Design Systems, Inc. (a) 640,000 12,800,000
Computer Horizons Corp. (a) 10,500 154,875
Epic Design Technology 1,500 33,188
Fair Issac & Company, Inc. 21,000 847,875
Frame Technology Corp. (a) 91,500 1,326,750
Government Technology Services, Inc. 5,000 65,000
MDL Information Systems, Inc. 19,700 169,913
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Softkey International, Inc. (a) 102,000 $ 1,906,125
Spectrum Holobyte, Inc. (a) 166,200 2,285,250
20,377,226
COMPUTERS & OFFICE EQUIPMENT - 3.7%
Convex Computer Corp. (a) 187,000 1,542,750
Data General Corp. (a) 296,000 2,886,000
Exabyte (a) 253,800 5,583,600
Exide Electronics Group, Inc. (a) 34,000 603,500
Filenet Corp. (a) 280,800 7,160,400
Metrologic Instruments (a) 1,100 14,025
Proxima Corp. (a) 75,000 2,287,500
QMS, Inc. (a) 81,900 819,000
Sigma Designs, Inc. (a) 95,000 665,000
Stratus Computer, Inc. (a) 92,000 3,427,000
Symbol Technologies, Inc. (a) 51,500 1,738,125
26,726,900
ELECTRONIC INSTRUMENTS - 6.1%
Andros, Inc. (a) 11,000 192,500
Electro Scientific Industries, Inc. (a) 87,000 1,468,125
Gelman Sciences Inc. (a) 1,600 21,200
Helix Technology Corp. 46,000 1,449,000
KLA Instruments Corp. (a) 272,100 14,353,275
Medar, Inc. (a) 10,200 138,975
Megatest Corp. (a) 3,400 51,000
Novellus System, Inc. (a) 418,000 22,781,000
Optical Coating Laboratory, Inc. 2,500 15,781
Silicon Valley Group, Inc. (a) 145,000 2,845,625
X-Rite, Inc. 6,000 218,250
43,534,731
ELECTRONICS - 6.9%
Altron Inc. (a) 65,000 1,397,500
Atmel Corp. (a) 433,200 15,974,250
Cypress Semiconductor Corp. (a) 295,000 6,158,125
Esterline Corp. (a) 31,900 394,763
Flextronics International (a) 7,000 99,750
Genus, Inc. (a) 36,000 238,500
Integrated Device Technology, Inc. (a) 419,900 11,914,663
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
International Rectifier Corp. (a) 83,000 $ 1,929,750
Microchip Technology, Inc. (a) 79,000 3,703,125
Photronics, Inc. (a) 44,000 1,188,000
Sierra Semiconductor Corp. (a) 178,000 2,736,750
Three-Five Systems, Inc. 55,000 1,711,875
Tower Semiconductor Ltd. 2,000 28,000
VLSI Technology, Inc. (a) 106,000 1,378,000
48,853,051
TOTAL TECHNOLOGY 145,652,271
TRANSPORTATION - 2.6%
AIR TRANSPORTATION - 0.9%
Alaska Air Group, Inc. (a) 258,000 4,515,000
Comair Holdings, Inc. 86,000 1,870,500
6,385,500
RAILROADS - 0.2%
ABC Rail Products Corp. (a) 35,000 778,750
Wisconsin Central Transportation Corp. (a) 18,000 828,000
1,606,750
SHIPPING - 0.4%
American President Companies Ltd. 106,200 2,575,350
International Shipholding Corp. 1,000 21,000
2,596,350
TRUCKING & FREIGHT - 1.1%
Air Express International Corp. 18,100 506,800
Airborne Freight Corp. 165,400 3,163,275
Allied Holdings, Inc. (a) 30,000 397,500
Landair Services, Inc. (a) 17,000 361,250
Landstar System, Inc. (a) 17,000 565,250
Swift Transportation Co., Inc. (a) 59,000 2,551,750
7,545,825
TOTAL TRANSPORTATION 18,134,425
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

UTILITIES - 1.6%
CELLULAR - 0.1%
A Plus Communications, Inc. (a) 5,000 $ 72,500
Cellular Communications Puerto Rico, Inc. (a) 24,000 870,000
942,500
ELECTRIC UTILITY - 0.9%
Central Louisiana Electric Co., Inc. 31,200 674,700
Eastern Utilities Associates 75,291 1,646,991
Public Service Co. of New Mexico (a) 330,000 4,083,750
6,405,441
GAS - 0.4%
Energen Corp. 3,000 68,250
Piedmont Natural Gas, Inc. 2,100 42,263
Transco Energy Co. 180,000 2,587,500
2,698,013
TELEPHONE SERVICES - 0.1%
Communications Central, Inc. (a) 5,000 75,000
US Long Distance Corp (a) 75,800 762,738
837,738
WATER - 0.1%
Aquarion Co. 17,000 399,500
TOTAL UTILITIES 11,283,192
TOTAL COMMON STOCKS
(Cost $522,797,724) 578,820,151
U.S. TREASURY OBLIGATIONS - 0.7%
PRINCIPAL
AMOUNT
U.S. Treasury Bills, yields at date of purchase
4.60% to 4.61%, 12/8/94
(Cost $4,976,613) $ 5,000,000 4,977,000
REPURCHASE AGREEMENTS - 18.0%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.78%
dated 10/31/94 due 11/1/94 $ 128,543,065 $ 128,526,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $656,300,337) $ 712,323,151
LEGEND
(a) Non-income producing.
INCOME TAX INFORMATION
At October 31, 1994, the aggregate cost of investment securities for income
tax purposes was $656,301,007. Net unrealized appreciation aggregated
$56,022,144, of which $80,952,118 related to appreciated investment
securities and $24,929,974 related to depreciated investment securities.
The fund has elected to defer to its fiscal year ending April 30, 1995
$17,068,854 of losses recognized during the period November 1, 1993 to
April 30, 1994.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1994 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 712,323,151
agreements of $128,526,000) (cost $656,300,337) -
See accompanying schedule

Cash 1,558,341

Receivable for investments sold 1,661,613

Receivable for fund shares sold 2,223,935

Dividends receivable 241,940

Receivable for daily variation on futures contracts 183,196

TOTAL ASSETS 718,192,176

LIABILITIES

Payable for investments purchased $ 23,976,104

Payable for fund shares redeemed 6,018,011

Accrued management fee 273,173

Other payables and accrued expenses 261,502

TOTAL LIABILITIES 30,528,790

NET ASSETS $ 687,663,386

Net Assets consist of:

Paid in capital $ 658,224,551

Undistributed net investment income 1,178,516

Accumulated undistributed net realized gain (loss) on (27,762,495)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 56,022,814
investments

NET ASSETS, for 64,018,411 shares outstanding $ 687,663,386

NET ASSET VALUE and redemption price per share $10.74
($687,663,386 (divided by) 64,018,411 shares)

Maximum offering price per share (100/97.00 of $10.74) $11.07

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)

INVESTMENT INCOME $ 1,447,588
Dividends

Interest 2,864,460

TOTAL INCOME 4,312,048

EXPENSES

Management fee $ 2,185,983
Basic fee

Performance adjustment (359,536)

Transfer agent fees 1,047,736

Accounting fees and expenses 173,273

Non-interested trustees' compensation 1,809

Custodian fees and expenses 30,308

Registration fees 54,552

Audit 19,146

Legal 588

Reports to shareholders 40,610

Miscellaneous 9,874

Total expenses before reductions 3,204,343

Expense reductions (67,347) 3,136,996

NET INVESTMENT INCOME 1,175,052

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (12,542,154)

Futures contracts 1,949,467 (10,592,687)

Change in net unrealized appreciation (depreciation) 17,982,364
on investment securities

NET GAIN (LOSS) 7,389,677

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 8,564,729
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS JUNE 28, 1993
ENDED OCTOBER (COMMENCEMENT
31, OF OPERATIONS) TO
1994 APRIL 30,
(UNAUDITED) 1994

INCREASE (DECREASE) IN NET ASSETS

Operations $ 1,175,052 $ 138,023
Net investment income

Net realized gain (loss) (10,592,687) (14,678,152)

Change in net unrealized appreciation (depreciation) 17,982,364 38,040,450

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 8,564,729 23,500,321
FROM OPERATIONS

Distributions to shareholders: - (138,023)
From net investment income

In excess of net investment income - (875,408)

In excess of net realized gain - (2,630,427)

TOTAL DISTRIBUTIONS - (3,643,858)

Share transactions 299,818,101 1,088,308,959
Net proceeds from sales of shares

Reinvestment of distributions - 3,618,979

Cost of shares redeemed (282,523,825) (449,980,020)

Net increase (decrease) in net assets resulting from 17,294,276 641,947,918
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS 25,859,005 661,804,381

NET ASSETS

Beginning of period 661,804,381 -

End of period (including undistributed net investment $ 687,663,386 $ 661,804,381
income of $1,178,516 and $3,464, respectively)

OTHER INFORMATION
Shares

Sold 28,934,524 103,952,169

Issued in reinvestment of distributions - 343,665

Redeemed (27,309,904) (41,902,043)

Net increase (decrease) 1,624,620 62,393,791

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS JUNE 28, 1993
ENDED OCTOBER (COMMENCEMEN
31, T OF OPERATIONS)
TO

1994 APRIL 30,

(UNAUDITED) 1994

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 10.61 $ 10.00

Income from Investment Operations

Net investment income .02 .02

Net realized and unrealized gain (loss) .11 .65

Total from investment operations .13 .67

Less Distributions - (.02)
In excess of net investment income

In excess of net realized gain - (.04)

Total distributions - (.06)

Net asset value, end of period $ 10.74 $ 10.61

TOTAL RETURNC, D 1.23% 6.70%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 687,663 $ 661,804

Ratio of expenses to average net assets B .95% 1.18%
A A

Ratio of expenses to average net assets before .97% 1.20%
expense reductions B A A

Ratio of net investment income to average net assets .35% .03%
A A

Portfolio turnover rate 173% 210%
A A

</TABLE>

A ANNUALIZED
B SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
C THE TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.

NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1994 (Unaudited)

1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Small Cap Stock Fund (the fund) is a fund of Fidelity Commonwealth
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION.
The accounting records of the fund are maintained in U.S. dollars.
Investment securities and other assets and liabilities denominated in a
foreign currency are translated into U.S. dollars at the prevailing rates
of exchange at period end. Purchases and sales of securities, income
receipts, and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Effective May 1, 1994, the fund adopted Statement of Position (SOP) 93-4:
Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. As permitted under the SOP, the effects of changes in
foreign currency exchange rates on investments in securities are not
segregated in the Statement of Operations from the effects of changes in
market prices of those securities, but are included with the net realized
and unrealized gain or loss on investment in securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
futures transactions, partnerships, non-taxable dividends, and losses
deferred due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY
CONTRACTS. The fund may enter into forward foreign currency contracts. The
U.S. dollar value of forward foreign currency contracts is determined using
forward currency exchange rates supplied by a quotation service. Losses may
arise due to changes in the value of the foreign currency or if the
counterparty does not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
FUTURES CONTRACTS AND OPTIONS.
The fund may invest in futures and options contracts, and may also write
options. Risks may be caused by an imperfect correlation between movements
in the price of the instruments and the price of the underlying securities
and interest rates. Risks also may arise if there is an
2. OPERATING POLICIES -
CONTINUED
FUTURES CONTRACTS AND OPTIONS - CONTINUED
illiquid secondary market for the instruments, or due to the inability of
counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
3. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities,
other than short-term securities,
aggregated $473,692,268 and
$474,111,310, respectively.
The market value of futures contracts opened and closed during the period
amounted to $323,030,378 and $324,979,845, respectively.
4. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2850% to .5200% for the period May 1, 1994 to July 31,
1994 and .2700% to .5200% for the period August 1, 1994 to October 31,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .35%. The basic fee is subject to a performance
adjustment (up to a maximum of (plus/minus) .20%) based on the fund's
investment performance as compared to the appropriate index over a
specified period of time. The fund's performance adjustment took effect in
June, 1994. For the period, the management fee was equivalent to an
annualized rate of .55% of average net assets after the performance
adjustment.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $810,018 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives fees based on the type, size, number of accounts and the
number of transactions made by shareholders. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $52,584 for the period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$67,347 under this arrangement.
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ARIZONA
7373 N. Scottsdale Road
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CALIFORNIA
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MARYLAND
1 West Pennsylvania Ave.
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NEW YORK
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UTAH
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Salt Lake City, UT
VERMONT
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WASHINGTON
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Boston, MA
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OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Bradford Lewis, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
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(2_FIDELITY_LOGOS)FIDELITY

MARKET INDEX
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy, and outlook.

INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 10 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 31 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 35 Notes to the financial statements.

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage of change in value, the average annual
percentage change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND

Market Index 6.15% 3.55% 60.08%

S&P 500(registered trademark) 6.33% 3.87% 61.24%

Average S&P 500 Index Fund 6.10% 3.42% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
began on March 6, 1990. For example, if you invested $1,000 in a fund that
had a 5% return over the past year, you would end up with $1,050. You can
compare the fund's returns to the performance of the Standard & Poor's
Composite Index of 500 Stocks - a common proxy for the U.S. stock market.
You can also compare them to the average S&P 500 index fund, which reflects
the performance of 40 funds with similar objectives tracked by Lipper
Analytical Services. Both benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 1 LIFE OF
YEAR FUND

Market Index 3.55% 10.63%

S&P 500(registered trademark) 3.87% 10.80%

Average S&P 500 Index Fund 3.42% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.

$10,000 OVER LIFE OF FUND
09/30/90 9278.84 9237.71
10/31/90 9246.33 9197.99
11/30/90 9843.78 9792.18
12/31/90 10104.77 10065.38
01/31/91 10552.32 10504.23
02/28/91 11307.81 11255.28
03/31/91 11576.41 11527.66
04/30/91 11605.36 11555.33
05/31/91 12101.67 12054.52
06/30/91 11541.34 11502.42
07/31/91 12083.38 12038.43
08/31/91 12362.75 12323.74
09/30/91 12158.51 12117.94
10/31/91 12318.05 12280.32
11/30/91 11818.44 11785.42
12/31/91 13169.30 13133.67
01/31/92 12923.46 12889.39
02/29/92 13084.53 13056.95
03/31/92 12824.50 12802.34
04/30/92 13199.93 13178.73
05/31/92 13259.66 13243.30
06/30/92 13062.41 13045.98
07/31/92 13590.57 13579.56
08/31/92 13311.46 13301.18
09/30/92 13465.08 13458.13
10/31/92 13503.97 13505.23
11/30/92 13957.70 13965.76
12/31/92 14131.46 14137.54
01/31/93 14240.20 14256.30
02/28/93 14431.57 14450.18
03/31/93 14731.94 14755.08
04/30/93 14368.78 14398.01
05/31/93 14749.44 14783.88
06/30/93 14784.83 14826.75
07/31/93 14718.45 14767.44
08/31/93 15267.18 15327.13
09/30/93 15147.30 15209.11
10/31/93 15458.88 15523.94
11/30/93 15307.54 15376.46
12/31/93 15490.49 15562.52
01/31/94 16009.82 16091.64
02/28/94 15571.08 15655.56
03/31/94 14886.65 14972.97
04/30/94 15080.28 15164.63
05/31/94 15323.44 15413.33
06/30/94 14942.23 15035.70
07/31/94 15431.39 15528.87
08/31/94 16056.44 16165.56
09/30/94 15661.47 15769.50
10/31/94 16007.68 16124.31

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Market Index Fund on March 6, 1990, when the fund started. As the chart
shows, by October 31, 1994, the value of your investment would have grown
to $16,008 - a 60.08% increase on your initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends
reinvested, the same $10,000 investment would have grown to $16,124 - a
61.24% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Jennifer Farrelly, Portfolio Manager of Fidelity Market
Index Fund
Q. JENNIFER, TELL US ABOUT THE FUND'S RECENT PERFORMANCE.
A. The fund had a total return of 6.15% for the six months ended October
31, 1994. Its benchmark index, Standard & Poor's Composite Index of 500
Stocks, returned 6.33% during the same period. The fund attempts to mimic
the stock investments of the index, so this slight difference in returns is
due mainly to management and other expenses. The fund did, however, top the
average S&P 500 index fund tracked by Lipper Analytical Services, which
returned 6.10% for the same six-month period. For the 12 months ended
October 31, the fund was up 3.55%. During that time, the index returned
3.87% while the average fund rose 3.42%.
Q. IT SOUNDS LIKE THE PERFORMANCE OF THE STOCK MARKET IMPROVED AFTER
STUMBLING EARLIER THIS YEAR. WHAT'S BEHIND THE GAINS?
A. In short: improving corporate earnings brought on by the strengthening
economy. Since February - when the Federal Reserve Board began raising
short-term interest rates for the first time in five years - there has been
a tug-of-war within the stock market. On one end you have rising interest
rates and inflation worries. They tend to drag down stocks because higher
rates make it more expensive for corporations to borrow money - which can
dampen their earnings down the line. On the other end,
however, are very strong CURRENT earnings reports. Throughout the year,
many U.S. companies have been logging record earnings growth. When interest
rate worries eased from time to time, investors focused on these strong
current earnings, which drove stock prices higher.
Q. WHICH SECTORS OF THE INDEX HAVE TURNED IN THE BEST PERFORMANCE OVER THE
PAST SIX MONTHS?
A. As a group, technology stocks - which make up nearly 15% of the index
according to Standard & Poor's sector classifications - are up more than 7%
since the end of April. The continued strong growth of personal computers
has fueled strong earnings for companies with a stake in that market. The
stocks of computer companies such as Apple Computer and Digital Equipment -
which rebounded after being beaten down to low levels - rose more than 35%
during the period. In addition, relational database management software
companies such as Oracle have benefited from the move away from the old
mainframe computer set-ups toward client-server architecture
- - personal computers linked through wide and local area networks.
Q. CONSUMER NONDURABLE STOCKS - THE LARGEST SECTOR IN THE INDEX AT MORE
THAN 21% ON OCTOBER 31 - LAGGED THE BROAD MARKET IN 1993. HAS THEIR
PERFORMANCE IMPROVED IN 1994?
A. Somewhat. Health care stocks - roughly 8% of the index at the end of
October - took off over the summer as it became apparent that major reform
legislation was dead for the time being. For example, drug stocks such as
Eli Lilly, Merck, Pfizer and Schering-Plough made strong gains during the
period. In addition, St. Jude Medical - a hospital supply company - was one
of the index's top performing stocks, up more than 44% over the past six
months. As for the rest of the consumer nondurable group, selected food,
beverage and tobacco stocks rose from depressed levels as investors sought
out companies whose earnings might remain steady in the face of higher
interest rates.
Q. SIX MONTHS AGO, YOU MENTIONED HOW WELL CYCLICAL STOCKS - THOSE THAT TEND
TO RISE AND FALL WITH THE ECONOMY - HAD DONE. DID THEY CONTINUE THAT STRONG
PERFORMANCE?
A. Only selected stocks that many refer to as "late cyclicals." These
included commodity companies in basic industries such as aluminum, copper
and paper. By definition, late cyclicals usually do well after the economic
recovery has been under way for a while. That's because it takes time for
the increased demand that these companies experience as a result of the
improving economy to translate into higher prices for their products in the
marketplace. And those price hikes help boost company earnings. The strong
returns of these stocks are in stark contrast with those of many "early
cyclicals," which fell after performing very well through last winter and
into spring.
Q. CAN YOU GIVE US SOME EXAMPLES OF EARLY CYCLICALS WHOSE STOCKS HAVE
LAGGED LATELY?
A. Auto-related stocks are a prime example. The Big Three auto makers -
Chrysler, Ford and General Motors - have fallen more than 17% as a group
over the past six months. Auto and truck parts manufacturers have suffered
as well. Add to that list transportation stocks such as those of airlines,
railroads and truckers. And perhaps the most dramatic example is the home
builders group, which fell roughly 29% during the period. In most of these
cases the problem is not disappointing earnings. For example, Ford recently
released news that its third-quarter earnings were the best in the
company's history. Instead, the dismal returns had to do with earnings
EXPECTATIONS. Many investors felt that earnings were peaking. They worried
that higher interest rates would slam the brakes on economic growth, which
could slow future earnings growth for many cyclical companies.
Q. WHICH OTHER STOCKS WERE HIT PARTICULARLY HARD BY RISING INTEREST RATES?
A. Utilities and financial stocks - which together made up nearly 20% of
the index - also suffered. Utilities traditionally do well when rates are
falling because investors like the income of their usually steady dividend
payments. However, the conventional wisdom says that when rates go up,
investors sell utilities in favor of the rising yields offered by
fixed-income instruments such as bonds. As for financial stocks, investors
feared that rising rates could hurt their profit margins over the long
term.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. I think we have yet to realize the extent to which higher interest rates
might dampen economic growth, and in turn, corporate profits. The direction
of interest rates over the next six months could have a big impact on stock
performance. If rates level out, and earnings drive the market, the stocks
of those companies showing the best earnings improvement could do well.
However, further rate hikes could be damaging to stocks. Market volatility
has increased in 1994 compared to 1993, and - in an uncertain interest rate
environment - I expect that could continue.
FUND FACTS
GOAL: to provide returns
consistent with those of the
Standard & Poor's 500 index
START DATE: March 6, 1990
SIZE: as of October 31, 1994,
more than $311 million
MANAGER: Jennifer Farrelly,
since January 1994; manager,
Fidelity U.S. Equity Index
Portfolio and VIP II: Index 500
Portfolio, since January 1994;
manager, institutional
enhanced index funds, since
1988; joined Fidelity in 1988
(checkmark)
JENNIFER FARRELLY ON CHANGES IN
THE S&P 500 INDEX:
"The S&P 500 index consists
of companies from dozens of
industry groups, and includes
a representative sample of
common stocks traded on the
New York Stock Exchange,
the American Stock
Exchange and NASDAQ.
Companies are chosen to join
the index mainly to maintain
consistency in the weightings
of the various industry
groups. They're often the
largest, most actively traded
stocks in their respective
industries.
"Changes are made to the
index several times each
year, often the result of
corporate mergers,
acquisitions and spin-offs. In
October 1994, for example,
PSI Resources - an S&P
500 electric utility serving
Indiana - merged with
Cincinnati Gas & Electric.
When that happened, PSI
had to be removed from the
index, while the new company
- - now known as CINergy -
was added."
(solid bullet) The index's best performing
industry groups over the past
six months included
aluminum (up 23.4%),
computer services (up
23.4%), miscellaneous metals
and mining (up 18.8%), and
hospital supplies (up 18.8%).
Among the worst performing
industries were home builders
(down 29.0%), truckers (down
21.7%) and miscellaneous
transportation companies
(down 20.6%).
INVESTMENT CHANGES

TOP TEN STOCKS AS OF OCTOBER 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO

AT & T Corp. 2.4 2.1

General Electric Co. 2.4 2.5

Exxon Corp. 2.2 2.4

Coca-Cola Company (The) 1.8 1.7

Royal Dutch Petroleum Co. 1.8 1.8

Wal-Mart Stores, Inc. 1.5 1.8

Philip Morris Companies, Inc. 1.5 1.5

Merck & Co., Inc. 1.3 1.2

International Business Machine 1.2 1.0
Corp.

Proctor & Gamble Co. 1.2 1.2

TOP TEN INDUSTRIES AS OF OCTOBER 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO

Utilities 12.8 14.0

Nondurables 11.4 11.4

Finance 10.8 11.6

Energy 10.0 10.1

Technology 9.1 7.1

Health 9.0 8.2

Basic Industries 7.6 7.5

Retail & Wholesale 6.0 6.5

Industrial Machinery & Equipment 5.3 5.7

Media & Leisure 4.8 4.7

ASSET ALLOCATION
TO MATCH THE STANDARD & POOR'S 500 INDEX, FIDELITY MARKET INDEX FUND HAS
100.0% INVESTMENT EXPOSURE TO STOCKS, AT ALL TIMES.
INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 97.3%
SHARES VALUE (NOTE 1)

AEROSPACE & DEFENSE - 1.6%
AEROSPACE & DEFENSE - 1.1%
Boeing Co. 29,980 $ 1,315,373
Lockheed Corp. 5,460 393,120
Martin Marietta Corp. 8,280 379,845
McDonnell Douglas Corp. 3,450 486,450
Northrop Corp. 4,400 193,050
Rockwell International Corp. 19,300 673,088
3,440,926
DEFENSE ELECTRONICS - 0.4%
E-Systems, Inc. 2,900 120,350
Loral Corp. 7,200 285,300
Raytheon Co. 11,820 753,525
1,159,175
SHIP BUILDING & REPAIR - 0.1%
General Dynamics Corp. 5,500 233,063
TOTAL AEROSPACE & DEFENSE 4,833,164
BASIC INDUSTRIES - 7.6%
CHEMICALS & PLASTICS - 4.3%
Air Products & Chemicals, Inc. 10,120 483,230
Avery Dennison Corp. 5,000 168,125
Dow Chemical Co. 24,070 1,769,145
du Pont (E.I.) de Nemours & Co. 59,630 3,555,439
Eastman Chemical Co. 7,342 396,468
Engelhard Corp. 8,325 195,638
FMC Corp. (a) 3,100 189,100
First Mississippi Corp. 1,700 35,700
Goodrich (B.F.) Company 2,310 103,661
Grace (W.R.) & Co. 8,300 328,888
Great Lakes Chemical Corp. 6,200 364,250
Hercules, Inc. 3,640 424,970
Minnesota Mining & Manufacturing Co. 37,320 2,066,595
Monsanto Co. 10,320 785,610
Morton International, Inc. 12,800 364,800
Nalco Chemical Co. 5,980 192,855
PPG Industries, Inc. 18,600 757,950
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

BASIC INDUSTRIES - CONTINUED
CHEMICALS & PLASTICS - CONTINUED
Praxair, Inc. 11,900 $ 275,188
Raychem Corp. 3,700 136,900
Rohm & Haas Co. 6,000 362,250
Union Carbide Corp. 13,200 437,250
13,394,012
IRON & STEEL - 0.4%
Armco, Inc. (a) 9,100 64,838
Bethlehem Steel Corp. (a) 9,300 176,700
Inland Steel Industries, Inc. (a) 3,700 132,275
Nucor Corp. 7,700 475,475
USX-U.S. Steel Group 6,560 246,000
Worthington Industries, Inc. 8,025 178,556
1,273,844
METALS & MINING - 0.8%
Alcan Aluminum Ltd. 19,610 525,261
Aluminum Co. of America 7,810 665,803
ASARCO, Inc. 3,600 112,950
Cyprus Amax Minerals Co. 8,050 214,331
Inco Ltd. 10,152 305,681
Phelps Dodge Corp. 6,140 376,843
Reynolds Metals Co. 5,240 290,165
2,491,034
PACKAGING & CONTAINERS - 0.4%
Ball Corp. 2,573 72,687
Bemis Co., Inc. 4,400 108,900
Corning, Inc. 18,240 620,160
Crown Cork & Seal Co., Inc. (a) 7,880 306,335
1,108,082
PAPER & FOREST PRODUCTS - 1.7%
Boise Cascade Corp. 3,400 90,100
Champion International Corp. 8,100 299,700
Federal Paper Board Co., Inc. 3,600 108,000
Georgia-Pacific Corp. 8,000 591,000
International Paper Co. 10,800 804,600
James River Corp. of Virginia 7,100 162,413
Kimberly-Clark Corp. 14,080 725,120
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Louisiana-Pacific Corp. 9,660 $ 295,838
Mead Corp. 5,300 263,013
Potlatch Corp. 2,640 100,980
Scott Paper Co. 6,410 423,861
Stone Container Corp. (a) 8,014 134,235
Temple-Inland, Inc. 4,800 226,800
Union Camp Corp. 6,200 294,500
Westvaco Corp. 5,800 203,000
Weyerhaeuser Co. 18,000 706,500
5,429,660
TOTAL BASIC INDUSTRIES 23,696,632
CONGLOMERATES - 1.2%
Allied-Signal, Inc. 24,900 862,163
Crane Co. 2,700 73,238
Dial Corp. (The) 8,200 169,125
Harris Corp. 3,500 150,063
ITT Corp. 10,270 906,328
Teledyne, Inc. 4,960 84,940
Textron, Inc. 7,700 392,700
Tyco Laboratories, Inc. 3,990 192,518
United Technologies Corp. 11,070 697,410
Whitman Corp. 9,300 153,450
3,681,935
CONSTRUCTION & REAL ESTATE - 0.5%
BUILDING MATERIALS - 0.2%
Armstrong World Industries, Inc. 3,210 133,215
Masco Corp. 13,800 327,750
Owens-Corning Fiberglass Corp. (a) 3,700 119,788
Sherwin-Williams Co. 7,640 249,255
830,008
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - 0.1%
Centex Corp. 2,860 $ 63,635
Kaufman & Broad Home Corp. 2,800 36,400
Morrison-Knudsen Corp. 2,700 42,188
Pulte Corp. 2,500 51,563
Skyline Corp. 1,000 19,750
213,536
ENGINEERING - 0.2%
EG & G, Inc. 4,920 79,335
Fluor Corp. 7,130 352,935
Foster Wheeler Corp. 3,200 115,200
547,470
TOTAL CONSTRUCTION & REAL ESTATE 1,591,014
DURABLES - 4.0%
AUTOS, TIRES, & ACCESSORIES - 3.2%
Chrysler Corp. 31,000 1,511,250
Cooper Tire & Rubber Co. 7,300 179,763
Cummins Engine Co., Inc. 3,700 157,250
Dana Corp. 8,600 220,375
Eaton Corp. 6,580 344,628
Echlin, Inc. 5,100 156,825
Ford Motor Co. 88,000 2,596,000
General Motors Corp. 65,678 2,594,281
Genuine Parts Company 11,025 398,278
Goodyear Tire & Rubber Co. 13,200 462,000
Johnson Controls, Inc. 3,500 174,125
NACCO Industries, Inc. Class A 800 47,200
Navistar International Corp. (a) 6,560 86,100
PACCAR, Inc. 3,338 149,376
Pep Boys-Manny, Moe & Jack 5,300 189,475
SPX Corp. 1,200 20,850
Snap-on Tools Corp. 3,800 120,650
TRW, Inc. 5,760 410,400
9,818,826
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

DURABLES - CONTINUED
CONSUMER ELECTRONICS - 0.4%
Black & Decker Corp. 7,300 $ 183,413
Maytag Co. 9,300 147,638
Newell Co. 13,800 289,800
Stanley Works 4,000 159,000
Whirlpool Corp. 6,600 343,200
1,123,051
HOME FURNISHINGS - 0.0%
Bassett Furniture Industries, Inc. 1,200 32,700
TEXTILES & APPAREL - 0.4%
Hartmarx Corp. (a) 2,800 16,100
Liz Claiborne, Inc. 7,000 161,875
NIKE, Inc. Class B 6,580 400,558
Oshkosh B'Gosh, Inc. Class A 1,200 18,000
Reebok International Ltd. 7,300 291,088
Russell Corp. 3,700 111,000
Springs Industries, Inc. Class A 1,500 60,563
Stride Rite Corp. 4,300 59,663
VF Corp. 5,600 283,500
1,402,347
TOTAL DURABLES 12,376,924
ENERGY - 10.0%
COAL - 0.0%
Eastern Enterprises Co. 2,000 52,000
ENERGY SERVICES - 0.8%
Baker Hughes, Inc. 12,400 254,200
Dresser Industries, Inc. 15,340 324,058
Halliburton Co. 9,980 369,260
Helmerich & Payne, Inc. 2,100 65,625
McDermott International, Inc. 4,600 117,875
Rowan Companies, Inc. (a) 7,300 55,663
Schlumberger Ltd. 21,480 1,261,950
2,448,631
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

ENERGY - CONTINUED
OIL & GAS - 9.2%
Amerada Hess Corp. 8,240 $ 409,940
Amoco Corp. 43,510 2,757,446
Ashland Oil, Inc. 5,230 203,316
Atlantic Richfield Co. 14,120 1,530,255
Burlington Resources, Inc. 11,300 477,425
Chevron Corp. 57,280 2,577,600
Coastal Corp. (The) 9,100 259,350
Exxon Corp. 109,060 6,857,148
Kerr-McGee Corp. 4,460 219,098
Louisiana Land & Exploration Co. 2,840 128,865
Maxus Energy Corp. (a) 11,700 55,575
Mobil Corp. 35,050 3,014,300
Occidental Petroleum Corp. 26,800 586,250
Oryx Energy Co. 8,460 122,670
Pennzoil Co. 4,130 212,695
Phillips Petroleum Co. 22,900 844,438
Royal Dutch Petroleum Co. 47,120 5,489,480
Santa Fe Energy Resources, Inc. 7,866 71,777
Sun Company, Inc. 9,280 298,120
Texaco, Inc. 22,640 1,480,090
USX-Marathon Group 25,100 470,625
Unocal Corp. 21,252 621,621
28,688,084
TOTAL ENERGY 31,188,715
FINANCE - 10.8%
BANKS - 5.5%
Banc One Corp. 35,622 1,028,585
Bank of Boston Corp. 9,190 264,213
BankAmerica Corp. 32,264 1,403,484
Bankers Trust New York Corp. 7,050 470,588
Barnett Banks, Inc. 8,500 352,750
Boatmen's Bancshares, Inc. 9,100 269,588
Chase Manhattan Corp. 16,336 588,096
Chemical Banking Corp. 22,067 838,546
Citicorp 34,006 1,623,787
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

FINANCE - CONTINUED
BANKS - CONTINUED
CoreStates Financial Corp. 12,700 $ 328,613
First Chicago Corp. 8,216 402,584
First Fidelity Bancorporation 7,147 321,615
First Interstate Bancorp 7,210 576,800
First Union Corp. 15,173 682,785
Fleet Financial Group, Inc. 12,318 421,728
Keycorp 21,355 611,287
Mellon Bank Corp. 8,342 464,024
Morgan (J.P.) & Co., Inc. 17,019 1,053,051
NBD Bancorp, Inc. 14,050 432,038
National City Corp. 13,600 368,900
NationsBank Corp. 24,020 1,188,990
Norwest Corp. 27,900 683,550
PNC Financial Corp. 20,560 483,160
Shawmut National Corp. 10,381 214,108
SunTrust Banks, Inc. 10,700 541,688
U.S. Bancorp 8,850 219,038
Wachovia Corp. 15,100 505,850
Wells Fargo & Co. 4,901 728,411
17,067,857
CREDIT & OTHER FINANCE - 1.0%
American Express Co. 43,359 1,333,289
Beneficial Corp. 4,500 176,063
Dean Witter Discover & Co. 14,918 576,208
Household International, Inc. 8,296 291,397
MBNA Corp. 13,000 347,750
Transamerica Corporation 6,222 305,656
3,030,363
FEDERAL SPONSORED CREDIT - 0.9%
Federal Home Loan Mortgage Corporation 15,900 866,550
Federal National Mortgage Association 24,070 1,829,320
2,695,870
INSURANCE - 2.9%
Aetna Life & Casualty Co. 9,930 458,021
Alexander & Alexander Services, Inc. 3,900 78,975
American General Corp. 18,720 514,800
American International Group, Inc. 27,875 2,609,797
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

FINANCE - CONTINUED
INSURANCE - CONTINUED
CIGNA Corp. 6,320 $ 416,330
Chubb Corp. (The) 7,780 543,628
Continental Corp. 4,800 72,600
General Re Corp. 7,440 833,280
Jefferson Pilot Corp. 4,415 239,514
Lincoln National Corp. 8,360 303,050
Marsh & McLennan Companies, Inc. 6,560 492,000
Providian Corp. 8,720 276,860
SAFECO Corp. 5,460 273,683
St. Paul Companies, Inc. (The) 7,500 327,188
Torchmark Corp. 6,420 236,738
Travelers, Inc. (The) 28,321 984,155
UNUM Corp. 6,700 307,363
USF&G Corp. 7,700 104,913
USLIFE Corp. 2,080 68,120
9,141,015
SAVINGS & LOANS - 0.2%
Ahmanson (H.F.) & Co. 10,200 195,075
Golden West Financial Corp. 5,700 222,300
Great Western Financial Corp. 11,839 211,622
628,997
SECURITIES INDUSTRY - 0.3%
Merrill Lynch & Co., Inc. 18,200 716,625
Salomon, Inc. 9,800 384,650
1,101,275
TOTAL FINANCE 33,665,377
HEALTH - 9.0%
DRUGS & PHARMACEUTICALS - 5.3%
Allergan, Inc. 5,700 150,338
ALZA Corp. Class A 7,100 126,025
American Cyanamid Co. 7,750 765,313
American Home Products Corp. 27,160 1,724,660
Amgen, Inc. (a) 11,700 652,275
Bristol-Myers Squibb Co. 44,790 2,614,616
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS - CONTINUED
Lilly (Eli) & Co. 25,760 $ 1,597,120
Merck & Co., Inc. 110,490 3,950,018
Pfizer, Inc. 28,240 2,093,290
Schering-Plough Corp. 16,870 1,201,988
Sigma Aldrich Corp. 4,600 159,850
Upjohn Co. 15,260 503,580
Warner-Lambert Co. 11,740 895,175
16,434,248
MEDICAL EQUIPMENT & SUPPLIES - 2.7%
Abbott Laboratories 72,020 2,232,620
Bard (C.R.), Inc. 4,500 110,250
Bausch & Lomb, Inc. 5,140 167,050
Baxter International, Inc. 24,200 629,200
Becton, Dickinson & Co. 6,500 307,125
Biomet, Inc. (a) 10,200 117,300
Foxmeyer Health Corp. 1,100 18,288
Johnson & Johnson 56,520 3,087,405
Mallinckrodt Group, Inc. 6,830 207,461
McKesson Corp. 3,500 372,750
Medtronic, Inc. 10,200 531,675
Millipore Corp. 2,250 115,594
Pall Corp. 10,066 182,446
St. Jude Medical, Inc. 4,000 149,000
U.S. Surgical Corp. 4,900 110,250
8,338,414
MEDICAL FACILITIES MANAGEMENT - 1.0%
Beverly Enterprises, Inc. (a) 7,200 108,900
Columbia/HCA Healthcare Corp. 31,420 1,307,858
Community Psychiatric Centers 3,900 38,513
Manor Care, Inc. 5,550 152,625
National Medical Enterprises, Inc. (a) 14,500 210,250
United HealthCare Corp. 14,800 780,700
U.S. Healthcare, Inc. 14,200 670,950
3,269,796
TOTAL HEALTH 28,042,458
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

HOLDING COMPANIES - 0.1%
CINergy 13,117 $ 303,331
INDUSTRIAL MACHINERY & EQUIPMENT - 5.3%
ELECTRICAL EQUIPMENT - 3.2%
Emerson Electric Co. 19,770 1,201,028
General Electric Co. 150,200 7,341,025
General Signal Corp. 4,060 146,160
Grainger (W.W.), Inc. 4,400 242,000
Honeywell, Inc. 11,580 373,455
Scientific-Atlanta, Inc. 6,700 144,888
Westinghouse Electric Corp. 31,130 439,711
Zenith Electronics Corp. (a) 3,400 47,600
9,935,867
INDUSTRIAL MACHINERY & EQUIPMENT - 1.5%
Briggs & Stratton Corp. 1,300 90,350
Caterpillar, Inc. 17,960 1,073,110
Cincinnati Milacron, Inc. 2,900 79,388
Clark Equipment Co. (a) 1,540 107,993
Cooper Industries, Inc. 10,110 377,861
Deere & Co. 7,590 544,583
Dover Corp. 4,960 275,280
Giddings & Lewis, Inc. 3,100 48,050
Harnischfeger Industries, Inc. 2,300 57,500
Illinois Tool Works, Inc. 9,860 442,468
Ingersoll-Rand Co. 9,340 332,738
Parker-Hannifin Corp. 4,200 196,350
Tenneco, Inc. 14,895 659,104
Timken Co. 2,799 97,615
TRINOVA Corp. 2,400 84,000
Varity Corp. (a) 3,790 144,968
4,611,358
POLLUTION CONTROL - 0.6%
Browning-Ferris Industries, Inc. 16,860 535,305
Ogden Corp. 3,900 83,850
Rollins Environmental Services, Inc. (a) 5,200 30,550
Safety Kleen Corp. 5,025 69,722
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
POLLUTION CONTROL - CONTINUED
WMX Technologies, Inc. 42,360 $ 1,244,325
Zurn Industries, Inc. 1,110 20,258
1,984,010
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 16,531,235
MEDIA & LEISURE - 4.8%
BROADCASTING - 1.7%
CBS, Inc. 5,780 346,078
Capital Cities/ABC, Inc. 13,410 1,114,706
Comcast Corp. Class A 20,850 341,419
Tele-Communications, Inc. Class A (a) 50,800 1,149,350
Time Warner, Inc. 33,225 1,179,488
Viacom, Inc. (a) 31,500 1,236,375
5,367,416
ENTERTAINMENT - 0.6%
Disney (Walt) Co. 47,220 1,859,288
King World Productions, Inc. (a) 3,200 113,600
1,972,888
LEISURE DURABLES & TOYS - 0.3%
Brunswick Corp. 8,300 170,150
Fleetwood Enterprises, Inc. 4,100 94,300
Hasbro, Inc. 7,650 252,450
Mattel, Inc. 15,565 455,276
Outboard Marine Corp. 1,800 37,125
1,009,301
LODGING & GAMING - 0.3%
Bally Entertainment Corp. (a) 4,100 28,700
Hilton Hotels Corp. 4,140 250,988
Marriott International, Inc. 11,100 324,675
Promus Companies, Inc. (a) 9,050 268,106
872,469
PUBLISHING - 1.2%
American Greetings Corp. Class A 6,460 176,843
Dow Jones & Co Inc. 8,700 259,913
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

MEDIA & LEISURE - CONTINUED
PUBLISHING - CONTINUED
Dun & Bradstreet Corp. 15,320 $ 898,135
Gannett Co., Inc. 12,850 616,800
Harcourt General, Inc. 6,776 250,712
Knight-Ridder, Inc. 4,780 246,170
McGraw-Hill, Inc. 4,250 317,688
Meredith Corp. 1,300 63,700
New York Times Co. (The) Class A 9,300 210,413
Times Mirror Co., Series A 11,100 362,138
Tribune Co. 5,990 315,224
3,717,736
RESTAURANTS - 0.7%
Luby's Cafeterias, Inc. 2,350 54,344
McDonald's Corp. 62,200 1,788,250
Ryan's Family Steak Houses, Inc. (a) 4,600 28,750
Shoney's, Inc. (a) 3,700 55,500
Wendy's International, Inc. 9,100 134,225
2,061,069
TOTAL MEDIA & LEISURE 15,000,879
NONDURABLES - 11.4%
AGRICULTURE - 0.1%
Pioneer Hi-Bred International, Inc. 7,800 261,300
BEVERAGES - 3.4%
Anheuser-Busch Companies, Inc. 23,270 1,180,953
Brown-Forman Corp. Class B 5,980 183,885
Coca-Cola Company (The) 113,440 5,700,360
Coors (Adolph) Co. Class B 3,300 56,925
PepsiCo, Inc. 70,060 2,452,100
Seagram Co. Ltd. 32,620 1,003,294
10,577,517
FOODS - 3.0%
Archer-Daniels-Midland Co. 30,266 866,364
Borden, Inc. 12,500 168,750
CPC International, Inc. 13,220 707,270
Campbell Soup Co. 22,080 910,800
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

NONDURABLES - CONTINUED
FOODS - CONTINUED
ConAgra, Inc. 21,850 $ 680,081
General Mills, Inc. 13,820 773,920
Heinz (H.J.) Co. 22,000 816,750
Hershey Foods Corp. 7,760 366,660
Kellogg Co. 19,840 1,165,600
Pet, Inc. 9,000 155,250
Quaker Oats Co. 5,900 441,763
Ralston Purina Co. 8,980 381,650
Sara Lee Corp. 42,000 1,034,250
SYSCO Corp. 16,240 403,970
Wrigley (Wm.) Jr. Company 10,280 463,885
9,336,963
HOUSEHOLD PRODUCTS - 3.0%
Alberto Culver Co. Class B 2,500 63,438
Avon Products, Inc. 6,410 405,433
Clorox Co. 4,660 251,640
Colgate-Palmolive Co. 13,360 814,960
Gillette Co. 19,480 1,448,825
International Flavors & Fragrances, Inc. 9,750 427,781
Premark International, Inc. 5,600 250,600
Proctor & Gamble Co. 59,960 3,747,500
Rubbermaid, Inc. 14,180 389,950
Unilever NV ADR 13,970 1,658,938
9,459,065
TOBACCO - 1.9%
American Brands, Inc. 17,660 613,685
Philip Morris Companies, Inc. 77,060 4,719,925
UST, Inc. 18,000 477,000
5,810,610
TOTAL NONDURABLES 35,445,455
PRECIOUS METALS - 0.6%
American Barrick Resources Corp. 30,800 733,957
Echo Bay Mines Ltd. 9,900 120,701
Homestake Mining Co. 12,000 225,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

PRECIOUS METALS - CONTINUED
Newmont Mining Corp. 7,438 $ 307,747
Placer Dome, Inc. 20,800 449,551
Santa Fe Pacific Gold Corp. 9,745 140,084
1,977,040
RETAIL & WHOLESALE - 6.0%
APPAREL STORES - 0.5%
Brown Group, Inc. 1,500 50,813
Charming Shoppes, Inc. 9,100 65,975
Gap, Inc. 12,680 427,950
Genesco, Inc. (a) 2,100 4,725
Limited, Inc. (The) 31,800 584,325
Melville Corp. 9,160 305,715
TJX Companies, Inc. 6,400 100,800
1,540,303
DRUG STORES - 0.2%
Long Drug Stores, Inc. 1,770 61,508
Rite Aid Corp. 7,700 184,800
Walgreen Co. 10,720 444,880
691,188
GENERAL MERCHANDISE STORES - 3.4%
Dayton Hudson Corp. 6,350 492,125
Dillard Department Stores, Inc. Class A 9,860 261,290
K mart Corp. 40,100 656,638
May Department Stores Co. (The) 21,880 823,235
Mercantile Stores Co., Inc. 3,310 150,605
Nordstrom, Inc. 7,300 359,525
Penney (J.C.) Co., Inc. 20,620 1,043,888
Price/Costco, Inc. 18,995 299,171
Sears, Roebuck & Co. 30,910 1,530,045
Wal-Mart Stores, Inc. 201,660 4,739,010
Woolworth Corp. 11,540 178,870
10,534,402
GROCERY STORES - 0.7%
Albertson's, Inc. 22,180 665,400
American Stores Co. 12,580 341,233
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - CONTINUED
Bruno's, Inc. 6,800 $ 65,450
Fleming Companies, Inc. 3,328 79,872
Giant Food, Inc. Class A 5,300 121,900
Great Atlantic & Pacific Tea Co., Inc. 3,450 90,131
Kroger Co. (The) (a) 9,400 245,575
Supervalu, Inc. 6,400 155,200
Winn-Dixie Stores, Inc. 6,620 350,033
2,114,794
RETAIL & WHOLESALE, MISCELLANEOUS - 1.2%
Circuit City Stores, Inc. 8,500 216,750
Handleman Co. (Del.) 2,900 32,625
Home Depot, Inc. (The) 39,282 1,787,331
Lowe's Companies, Inc. 13,860 550,935
Tandy Corp. 5,666 250,721
Toys "R" Us, Inc. (a) 25,425 978,863
3,817,225
TOTAL RETAIL & WHOLESALE 18,697,912
SERVICES - 0.9%
ADVERTISING - 0.1%
Interpublic Group of Companies, Inc. 6,700 221,100
LEASING & RENTAL - 0.0%
Ryder Systems, Inc. 6,700 157,450
PRINTING - 0.4%
Alco Standard Corp. 4,800 273,600
Deluxe Corp. 7,200 203,400
Donnelley (R.R.) & Sons Co. 13,820 433,603
Harland (John H.) Co. 2,700 57,713
Moore Corporation Ltd. 8,637 157,155
1,125,471
SERVICES - 0.4%
Block (H & R), Inc. 9,380 416,238
Ecolab, Inc. 5,500 117,563
Jostens, Inc. 3,900 67,275
National Education Corp. (a) 2,500 12,188
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

SERVICES - CONTINUED
SERVICES - CONTINUED
National Service Industries, Inc. 4,300 $ 115,025
Service Corp. International 7,350 195,694
Western Atlas, Inc. 4,040 185,840
1,109,823
TOTAL SERVICES 2,613,844
TECHNOLOGY - 9.1%
COMMUNICATIONS EQUIPMENT - 0.6%
Andrew Corp. (a) 2,300 119,025
Cisco Systems, Inc. (a) 22,400 674,800
DSC Communications Corp. (a) 9,900 304,425
M/A-Com, Inc. (a) 2,200 15,400
Northern Telecom Ltd. 22,000 792,478
1,906,128
COMPUTER SERVICES & SOFTWARE - 2.4%
Autodesk, Inc. 4,040 139,380
Automatic Data Processing, Inc. 12,360 721,515
Ceridian Corp. (a) 3,800 98,800
Computer Associates International, Inc. 14,500 719,563
Computer Sciences Corp. (a) 4,350 202,275
First Data Corp. 10,000 501,250
Harris Computer Systems Corp. (a) 175 2,450
Lotus Development Corp. (a) 3,800 145,350
Microsoft Corp. (a) 50,500 3,181,500
Novell, Inc. (a) 32,400 599,400
Oracle Systems Corp. (a) 25,400 1,168,400
Shared Medical Systems Corp. 2,000 59,000
7,538,883
COMPUTERS & OFFICE EQUIPMENT - 3.1%
Amdahl Corp. (a) 10,200 103,275
Apple Computer, Inc. 10,250 442,672
Compaq Computer Corp. (a) 22,180 889,973
Cray Research, Inc. (a) 2,360 45,135
Data General Corp. (a) 3,200 31,200
Digital Equipment Corp. (a) 12,020 368,113
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Hewlett-Packard Co. 22,280 $ 2,177,870
Intergraph Corp. (a) 4,000 34,500
International Business Machines Corp. 50,970 3,797,265
Pitney Bowes, Inc. 13,840 467,100
Sun Microsystems, Inc. (a) 8,300 271,825
Tandem Computers, Inc. (a) 10,100 178,013
Unisys Corp. (a) 14,900 158,313
Xerox Corp. 9,050 927,625
9,892,879
ELECTRONIC INSTRUMENTS - 0.1%
Perkin-Elmer Corp. 3,800 112,100
Tektronix, Inc. 2,600 98,800
210,900
ELECTRONICS - 2.4%
Advanced Micro Devices, Inc. (a) 8,100 213,638
AMP, Inc. 9,290 702,556
Intel Corp. 36,780 2,284,958
Micron Technology, Inc. 9,100 360,588
Motorola, Inc. 49,000 2,884,875
National Semiconductor Corp. (a) 10,600 186,825
Texas Instruments, Inc. 7,980 597,503
Thomas & Betts Corp. 1,660 118,275
7,349,218
PHOTOGRAPHIC EQUIPMENT - 0.5%
Eastman Kodak Co. 29,070 1,398,994
Polaroid Corp. 4,040 135,845
1,534,839
TOTAL TECHNOLOGY 28,432,847
TRANSPORTATION - 1.6%
AIR TRANSPORTATION - 0.3%
AMR Corp. (a) 6,570 362,171
Delta Air Lines, Inc. 4,480 233,520
Pittston Company Services Group 3,600 99,450
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

TRANSPORTATION - CONTINUED
AIR TRANSPORTATION - CONTINUED
Southwest Airlines Co. 12,900 $ 304,763
USAir Group, Inc. (a) 5,300 23,188
1,023,092
RAILROADS - 1.1%
Burlington Northern, Inc. 7,750 386,531
CSX Corp. 9,100 659,750
Conrail, Inc. 6,940 377,363
Norfolk Southern Corp. 12,240 771,120
Santa Fe Pacific Corp. 16,242 249,721
Union Pacific Corp. 17,940 876,818
3,321,303
TRUCKING & FREIGHT - 0.2%
Consolidated Freightways, Inc. (a) 3,100 69,363
Federal Express Corp. (a) 4,990 303,143
Roadway Services, Inc. 3,500 200,375
Yellow Corp. 2,400 46,800
619,681
TOTAL TRANSPORTATION 4,964,076
UTILITIES - 12.8%
CELLULAR - 0.4%
Airtouch Communications (a) 43,330 1,294,484
ELECTRIC UTILITY - 3.6%
American Electric Power Co., Inc. 16,100 515,200
Baltimore Gas & Electric Co. 12,750 296,438
Carolina Power & Light Co. 14,200 374,525
Central & South West Corp. 16,480 370,800
Consolidated Edison Co. of New York, Inc. 20,500 509,938
Detroit Edison Company 13,000 342,875
Dominion Resources, Inc. (Va.) 14,710 546,109
Duke Power Co. 18,060 715,628
Entergy Corp. 20,300 474,513
FPL Group, Inc. 16,600 549,875
Houston Industries, Inc. 11,400 397,575
Niagara Mohawk Power Corp. 12,500 171,875
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
Northern States Power Co. (Minn.) 5,960 $ 264,475
Ohio Edison Co. 13,300 256,025
Pacific Gas & Electric Co. 37,400 841,500
PacifiCorp. 24,700 435,338
Peco Energy Co. 19,400 497,125
Public Service Enterprise Group, Inc. 21,400 561,750
SCEcorp 39,200 543,900
Southern Co. 56,900 1,123,775
Texas Utilities Co. 19,886 648,781
Unicom Corp. 18,700 404,388
Union Electric Co. 8,900 319,288
11,161,696
GAS - 0.8%
Columbia Gas System, Inc. (The) (a) 4,520 125,995
Consolidated Natural Gas Co. 8,090 293,263
Enron Corp. 21,940 710,308
ENSERCH Corp. 5,800 82,650
NICOR, Inc. 4,740 115,538
Noram Energy Corp. 10,700 64,200
ONEOK, Inc. 2,300 40,538
Pacific Enterprises 7,480 160,820
Panhandle Eastern Corp. 10,500 246,750
Peoples Energy Corp. 3,000 84,750
Sonat, Inc. 7,560 245,700
Transco Energy Co. 3,500 50,313
Williams Companies, Inc. 9,100 263,900
2,484,725
TELEPHONE SERVICES - 8.0%
AT & T Corp. 137,362 7,555,047
Ameritech Corp. 47,900 1,933,963
Bell Atlantic Corp. 38,350 2,008,581
BellSouth Corp. 43,620 2,322,765
GTE Corp. 83,880 2,579,310
MCI Communications Corp. 56,660 1,303,180
NYNEX Corp. 36,320 1,425,560
Pacific Telesis Group 36,930 1,167,911
Southwestern Bell Corp. 52,620 2,203,463
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)

UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
Sprint Corp. 30,090 $ 981,686
U.S. West, Inc. 39,840 1,498,980
24,980,446
TOTAL UTILITIES 39,921,351
TOTAL COMMON STOCKS
(Cost $240,940,132) 302,964,189
U.S. TREASURY OBLIGATIONS - 0.3%
PRINCIPAL
AMOUNT
8 5/8%, 10/15/95 (b) $ 500,000 511,015
Bills, yields at date of purchase
4.53% to 4.70%, 12/8/94 (b) 300,000 298,589
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $851,870) 809,604
REPURCHASE AGREEMENTS - 2.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.78%
dated 10/31/94 due 11/1/94 7,484,994 7,484,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $249,276,002) $ 311,257,793
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
38 S&P 500 Index Contracts Dec. 94 $ 8,976,550 $ 25,696
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.9%
LEGEND
(b) Non-income producing
(c) A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $779,745.
INCOME TAX INFORMATION
At October 31, 1994, the aggregate cost of investment securities for income
tax purposes was $249,390,492. Net unrealized appreciation aggregated
$61,867,301, of which $73,071,853 related to appreciated investment
securities and $11,204,552 related to depreciated investment securities.
At April 30, 1994, the fund had a capital loss carryforward of
approximately $1,621,000 which will expire on April 30, 2002.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1994 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 311,257,793
agreements of $7,484,000) (cost $249,276,002) -
See accompanying schedule

Cash 246

Receivable for fund shares sold 944,710

Dividends receivable 603,995

Interest receivable 1,896

Other receivables 764

TOTAL ASSETS 312,809,404

LIABILITIES

Payable for investments purchased $ 181,084

Payable for fund shares redeemed 784,378

Accrued management fee 125,314

Payable for daily variation on futures contracts 67,820

Other payables and accrued expenses 947

TOTAL LIABILITIES 1,159,543

NET ASSETS $ 311,649,861

Net Assets consist of:

Paid in capital $ 249,924,211

Undistributed net investment income 676,050

Accumulated undistributed net realized gain (loss) on (958,360)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 62,007,960
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 8,869,901 shares outstanding $ 311,649,861

NET ASSET VALUE, offering price and redemption price per $35.14
share ($311,649,861 (divided by) 8,869,901 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)

INVESTMENT INCOME $ 4,251,501
Dividends

Interest 245,439

TOTAL INCOME 4,496,940

EXPENSES

Management fee $ 680,262

Non-interested trustees' compensation 822

TOTAL EXPENSES 681,084

NET INVESTMENT INCOME 3,815,856

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities 356,725

Futures contracts 454,793 811,518

Change in net unrealized appreciation (depreciation) on:

Investment securities 13,245,726

Futures contracts 55,746

Assets and liabilities in foreign currencies 473 13,301,945

NET GAIN (LOSS) 14,113,463

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 17,929,319
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED APRIL 30,
OCTOBER 31, 1994 1994
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 3,815,856 $ 7,170,518
Net investment income

Net realized gain (loss) 811,518 (1,846,869)

Change in net unrealized appreciation (depreciation) 13,301,945 10,049,460

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 17,929,319 15,373,109
FROM OPERATIONS

Distributions to shareholders: (3,471,792) (7,060,930)
From net investment income

From net realized gain - (1,588,864)

Distributions in excess of net realized gain - (70,859)

TOTAL DISTRIBUTIONS (3,471,792) (8,720,653)

Share transactions 32,834,617 71,828,516
Net proceeds from sales of shares

Reinvestment of distributions 3,260,883 8,306,752

Cost of shares redeemed (21,623,742) (109,030,499)

Redemption fees 18,249 46,171

Net increase (decrease) in net assets resulting from 14,490,007 (28,849,060)
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS 28,947,534 (22,196,604)

NET ASSETS

Beginning of period 282,702,327 304,898,931

End of period (including undistributed net investment $ 311,649,861 $ 282,702,327
income of $676,050 and $331,986, respectively)

OTHER INFORMATION
Shares

Sold 965,275 2,066,131

Issued in reinvestment of distributions 94,726 244,698

Redeemed (632,385) (3,152,524)

Net increase (decrease) 427,616 (841,695)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED APRIL 30, MARCH 6, 1990
ENDED (COMMENCEMENT
OCTOBER 31, OF
1994 OPERATIONS) TO
APRIL 30,

(UNAUDITED) 1994 1993 1992 1991 1990

SELECTED PER-SHARE DATA

Net asset value, $ 33.49 $ 32.84 $ 30.94 $ 28.06 $ 24.58 $ 25.00
beginning of period

Income from Investment
Operations

Net investment .44 .81 .81 .82 .76 .13
income

Net realized and 1.61 .81 1.89 2.94 3.49 (.57)
unrealized gain
(loss)

Total from investment 2.05 1.62 2.70 3.76 4.25 (.44)
operations

Less Distributions (.40) (.80) (.81) (.83) (.85) -
From net investment
income

From net realized - (.17) - (.07) - -
gain

In excess of net - (.01) - - - -
realized gain

Total distributions (.40) (.98) (.81) (.90) (.85) -

Redemption fees added .00 .01 .01 .02 .08 .02
to paid in capital

Net asset value, end of $ 35.14 $ 33.49 $ 32.84 $ 30.94 $ 28.06 $ 24.58
period

TOTAL RETURN B, C 6.15% 4.95 8.85 13.74 18.04 (1.68)%
% % % %

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 312 $ 283 $ 305 $ 230 $ 112 $ 15
period (in millions)

Ratio of expenses to .45%A .45 .44 .35 .28 .28%A
average net assets % % % %

Ratio of expenses to .45%A .45 .45 .45 .45 .45%A
average net assets % % % %
before expense
reductions

Ratio of net investment 2.52%A 2.38 2.54 2.84 3.52 3.41%A
income to average net % % % %
assets

Portfolio turnover rate 2%A 3 0 1 1 0%
% % % %

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1994 (Unaudited)

6. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Market Index Fund (the fund) is a fund of Fidelity Commonwealth
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Effective May 1, 1994, the fund adopted Statement of Position (SOP) 93-4:
Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. As permitted under the SOP, the effects of changes in
foreign currency exchange rates on investments in securities are not
segregated in the Statement of Operations from the effects of changes in
market prices of those securities, but are included with the net realized
and unrealized gain or loss on investment in securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions are recorded on the ex-dividend date.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
non-taxable dividends.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Undistributed net investment income
may include temporary book and tax basis differences which will reverse in
a subsequent period. Any taxable income or gain remaining at fiscal year
end is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 180 days are subject to
a redemption fee equal to .50% of the proceeds of the redeemed shares. The
fee, which is retained by the fund, is accounted for as an addition to paid
in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
7. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
FUTURES CONTRACTS AND OPTIONS. The fund may invest in futures and options
contracts, and may also write options. These investments involve, to
varying degrees, elements of market risk and risks in excess of the amount
recognized in the Statement of Assets and Liabilities. The face or contract
amounts, as reflected in the schedule of investments under the caption
"Futures Contracts," reflect the extent of the involvement the fund has in
the particular classes of instruments. Risks may be caused by an imperfect
correlation between movements in the price of the instruments and the price
of the underlying securities and interest rates. Risks also may arise if
there is an illiquid secondary market for the instruments, or due to the
inability of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on
2. OPERATING POLICIES -
CONTINUED
FUTURES CONTRACTS AND OPTIONS - CONTINUED
which they are traded. Options traded on an exchange are valued using the
last sale price or, in the absence of a sale, the last offering price.
Options traded over-the-counter are valued using dealer-supplied
valuations.
8. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $14,520,494 and $3,386,407, respectively.
The market value of futures contracts opened and closed during the period
amounted to $33,738,008 and $29,775,497, respectively.
9. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR pays all expenses,
except the compensation of the non-interested Trustees and certain
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.45% of the fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund. For
the period, FMR or its affiliates collected certain account fees from
shareholders which aggregated $60,556.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or
the fund's distributor, Fidelity Distributors Corporation, an affiliate of
FMR, may use their resources to pay administrative and promotional expenses
related to the sale of the fund's shares. Subject to the approval of the
Board of Trustees, the Plan also authorizes payments to third parties that
assist in the sale of the fund's shares or render shareholder support
services. No payments were made under the Plan during the period.
TO WRITE FIDELITY

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4.
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5.
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representative.
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YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
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MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
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TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
GROWTH AND INCOME FUNDS
Balanced Fund
Convertible Securities Fund
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Utilities Income Fund
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(8 a.m. - 9 p.m.)
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(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)FIDELITY

INTERMEDIATE BOND
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy, and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 22 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 26 Notes to the financial statements.

DEAR SHAREHOLDER:
The unsettling period that began for bond investors when the Federal
Reserve Board raised short-term interest rates in February has continued
into the fourth quarter of 1994. The Board raised the federal funds rate -
the rate banks charge each other for overnight loans - five times from
February through August, taking it from 3.00% to 4.75%. A sixth increase in
November lifted the rate to 5.50%. The Fed rate hikes were intended to
forestall inflation that could result from an improving U.S. economy, and
they led to negative returns for many bond investments and below-average
returns for many stocks.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
Keeping in mind that the negative effects of rising rates on your bond
investments will only be "paper" losses unless you sell your shares,
staying in your bond fund may be appropriate. The longer your investing
time frame, the more likely it is that you will retain your principal
investment through both up and down markets. For example, a 10-year time
frame, such as saving for a college education, enables you to weather these
ups and downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and money market funds are not
insured by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells bonds that have grown in value). You can also look at the fund's
income to measure performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST 6 PAST PAST 5 PAST 10
MONTHS YEAR YEARS YEARS

Intermediate Bond 0.64% -2.61% 44.09% 146.05%

Lehman Brothers Intermediate
Government-Corporate Bond Index 0.89% -1.93% 44.96% 146.50%

Average Intermediate Investment
Grade Bond Fund 0.04% -3.97% 42.31% 147.21%

Consumer Price Index 1.42% 2.61% 19.03% 41.98%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or ten
years. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, you would end up with $1,050. You can compare these
figures to the Lehman Brothers Intermediate Government-Corporate Bond Index
- - a broad measure of the performance of intermediate (one- to ten-year)
bonds. To measure how the fund stacked up against its peers, you can also
look at the average intermediate investment grade bond fund, which reflects
the performance of 128 funds tracked by Lipper Analytical Services. These
benchmarks include reinvested dividends and capital gains, if any.
Comparing the fund's performance to the Consumer Price Index helps show how
your fund did compared to inflation. (The CPI returns begin on the month
end closest to the fund's start date).
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1994 PAST PAST 5 PAST 10
YEAR YEARS YEARS

Intermediate Bond -2.61% 7.58% 9.42%

Lehman Brothers Intermediate
Government-Corporate Bond Index -1.93% 7.71% 9.44%

Average Intermediate Investment
Grade Bond Fund -3.97% 7.30% 9.46%

Consumer Price Index 2.61% 3.55% 3.57%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Intermediate Bond (032) Government/Corporate Bond Inde
10/31/84 10000.00 10000.00
11/30/84 10177.44 10189.00
12/31/84 10326.72 10335.72
01/31/85 10571.93 10515.56
02/28/85 10363.22 10400.94
03/31/85 10505.48 10573.60
04/30/85 10756.80 10776.61
05/31/85 11360.28 11188.28
06/30/85 11473.90 11301.28
07/31/85 11387.70 11300.15
08/31/85 11624.21 11464.00
09/30/85 11658.14 11549.98
10/31/85 11850.36 11724.39
11/30/85 12110.44 11927.22
12/31/85 12449.67 12203.93
01/31/86 12574.05 12282.04
02/28/86 13015.05 12570.66
03/31/86 13354.28 12901.27
04/30/86 13342.97 12987.71
05/31/86 13107.39 12837.05
06/30/86 13454.84 13134.87
07/31/86 13550.69 13267.54
08/31/86 13826.26 13566.05
09/30/86 13706.45 13454.81
10/31/86 13898.15 13629.73
11/30/86 14029.94 13759.21
12/31/86 14103.20 13805.99
01/31/87 14263.24 13945.43
02/28/87 14353.27 14016.55
03/31/87 14301.01 13987.12
04/30/87 13924.66 13731.15
05/31/87 13859.78 13699.57
06/30/87 14054.44 13865.34
07/31/87 14067.41 13897.23
08/31/87 14015.51 13861.09
09/30/87 13780.62 13680.90
10/31/87 14101.79 14072.17
11/30/87 14267.67 14162.23
12/31/87 14385.88 14310.94
01/31/88 14808.51 14677.30
02/29/88 14999.61 14840.22
03/31/88 14886.74 14783.82
04/30/88 14831.28 14758.69
05/31/88 14748.87 14693.75
06/30/88 15005.25 14927.38
07/31/88 14995.10 14896.04
08/31/88 15029.69 14918.38
09/30/88 15274.79 15177.96
10/31/88 15477.00 15384.38
11/30/88 15387.18 15253.61
12/31/88 15423.95 15267.34
01/31/89 15587.23 15427.65
02/28/89 15558.09 15364.39
03/31/89 15630.86 15430.46
04/30/89 15865.58 15739.07
05/31/89 16170.62 16050.70
06/30/89 16539.23 16455.18
07/31/89 16861.55 16792.51
08/31/89 16637.16 16575.89
09/30/89 16726.78 16653.80
10/31/89 17075.82 17006.86
11/30/89 17208.28 17168.42
12/31/89 17246.75 17216.49
01/31/90 17074.02 17106.31
02/28/90 17120.60 17169.60
03/31/90 17124.86 17191.92
04/30/90 17013.58 17131.75
05/31/90 17398.04 17508.65
06/30/90 17623.91 17743.26
07/31/90 17853.82 17989.90
08/31/90 17708.19 17916.14
09/30/90 17847.78 18054.09
10/31/90 18007.96 18263.52
11/30/90 18312.73 18541.12
12/31/90 18547.74 18795.14
01/31/91 18728.35 18986.85
02/28/91 18862.45 19138.74
03/31/91 18964.51 19268.89
04/30/91 19158.59 19478.92
05/31/91 19242.80 19597.74
06/30/91 19230.32 19611.46
07/31/91 19452.60 19831.11
08/31/91 19829.89 20209.88
09/30/91 20206.05 20557.49
10/31/91 20391.66 20791.84
11/30/91 20553.67 21030.95
12/31/91 21236.73 21544.11
01/31/92 20922.81 21348.06
02/29/92 21024.54 21431.31
03/31/92 20932.14 21347.73
04/30/92 21039.16 21535.59
05/31/92 21396.66 21869.39
06/30/92 21689.22 22193.06
07/31/92 22217.10 22634.70
08/31/92 22393.98 22861.05
09/30/92 22544.49 23171.96
10/31/92 22296.21 22870.72
11/30/92 22181.71 22783.81
12/31/92 22527.79 23089.12
01/31/93 23050.18 23537.05
02/28/93 23516.28 23908.93
03/31/93 23626.84 24004.57
04/30/93 23752.69 24196.60
05/31/93 23764.70 24143.37
06/30/93 24261.61 24522.42
07/31/93 24492.30 24581.28
08/31/93 25018.72 24972.12
09/30/93 25110.26 25074.50
10/31/93 25265.11 25142.20
11/30/93 25113.90 25001.41
12/31/93 25222.11 25116.41
01/31/94 25517.30 25395.21
02/28/94 25006.61 25019.36
03/31/94 24557.30 24606.54
04/30/94 24447.74 24439.21
05/31/94 24408.28 24456.32
06/30/94 24436.84 24458.77
07/31/94 24686.53 24810.97
08/31/94 24716.94 24887.89
09/30/94 24597.55 24658.92
10/31/94 24605.14 24650.00

$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Intermediate Bond
Fund on October 31, 1984. As the chart shows, by October 31, 1994, the
value of your investment would have grown to $24,605 - a 146.05% increase
on your initial investment. For comparison, look at how the Lehman Brothers
Intermediate Government-Corporate Bond Index did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to
$24,650 - a 146.50% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
SIX MONTHS
ENDED
OCTOBER 31, YEARS ENDED APRIL 30,

1994 1994 1993 1992 1991 1990

Dividend return 3.10% 6.49% 8.08% 7.83% 8.69% 8.86%

Capital appreciation -2.46% -3.56% 4.82% 1.99% 3.92% -1.62%

return

Total return 0.64% 2.93% 12.90% 9.82% 12.61% 7.24%

DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested.
DIVIDENDS AND YIELD

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED OCTOBER 31, 1994 PAST PAST 6 PAST
MONTH MONTHS YEAR

Dividends per share 5.31(cents) 31.51(cents) 64.89(cents)

Annualized dividend rate 6.31% 6.23% 6.28%

30-day annualized yield 6.96% - -

</TABLE>

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $9.91 over
the past month, $10.04 over the past six months and $10.34 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

An interview with Michael Gray, Portfolio Manager of Fidelity
Intermediate Bond Fund
Q. MICHAEL, HOW HAS THE FUND
PERFORMED?
A. The fund showed a positive return for the past six months, slightly
bettering the average intermediate investment grade bond fund. Its total
return was 0.64% for the six months ended October 31, 1994. According to
Lipper Analytical Services, the average intermediate investment grade bond
fund returned 0.04% for the same period. For the year ended October 31, the
fund returned -2.61%, compared to -3.97% for the Lipper average.
Q. CAN YOU GIVE US A RECAP OF WHAT THE MARKET ENVIRONMENT HAS BEEN LIKE?
A. Sure. The Federal Reserve Board raised the federal funds rate - the rate
banks charge each other for overnight loans - from 3.00% to 4.75% over the
first eight months of 1994. Rising interest rates and inflation concerns
caused yields to rise and prices to fall on virtually all types of
fixed-income investments. The Fed was hoping to head off future inflation
that might be triggered by the improving U.S. economy. The very threat of
inflation led investors to sell bonds heavily, because inflation dimishes
the value of fixed-rate income payments. At the end of the period, however,
even interest rate-sensitive sectors such as housing haven't been impacted
by the increase in rates. Housing starts and home sales remain at pretty
strong levels. The economy continues to grow at a more than 3%, a rate the
Fed considers inflationary. So I'm expecting even more Fed rate tightening
by the end of the year.
Q. WHAT KIND OF STRATEGY HAVE YOU ADOPTED TO DEAL WITH THIS ENVIRONMENT?
A. A pretty defensive one. I've continued to reduce the fund's duration -
its sensitivity to interest rate changes - a move I started in February and
March. I've done this by investing in a combination of cash instruments and
bonds, both corporate and government. I've increased the fund's short-term
cash investments by selling bonds and keeping any new assets in cash.
Corporate issues have been sell candidates because the yield differential
between corporate bonds and Treasury bonds has narrowed. That means that
corporate bonds offer a less attractive yield advantage, given the
potential risk. I've also maintained the fund's government bond investments
because they are easy to trade, and especially easy to sell if new
opportunities arise.
Q. WHERE DO YOU THINK YOU'LL FIND SUCH OPPORTUNITIES?
A. To be honest, with interest rates still on the rise, not many areas are
appealing right now. Some European government obligations are starting to
look attractive because their real yields - the difference between the
stated yields and the countries' expected inflation rate - are high, but
I'm not ready to jump in just yet. Interest rates will not rise forever,
and when they begin to turn, I anticipate some attractive opportunities.
I'm building cash because I want to take advantage of those opportunities
when I see an improved environment.
Q. WHAT ABOUT MORTGAGE-BACKED
SECURITIES?
A. The fund has been underweighted in mortgages - holding only 4.2% in them
as of October 31 - for two reasons. First, mortgages are unattractive
because the yield differential between mortgage securities and Treasuries
is very tight. Second, in an environment in which rates are rising, the
duration of mortgage securities tends to lengthen. That's because
prepayments - when mortgages are paid off early - slow down and extend the
average life of the mortgage. In a rising interest rate environment, the
investor wants instruments with short duration. In addition, esoteric
mortgage investments have hurt some other prominent non-Fidelity mortgage
investors. So, the mortgage market has not been attractive, although at
some point it will be again.
Q. WHAT SORT OF SIGNS DO YOU THINK WILL SIGNAL A MARKET TURNAROUND?
A. It's hard to be bullish when the Fed is still raising interest rates.
When economic indicators show the economy weakening and growth slowing, it
might be easier to conclude the Fed is finished and the market is on its
way back.
Q. THERE HAS BEEN A LOT OF TALK IN THE NEWS ABOUT DERIVATIVES LATELY. DOES
THE FUND USE THESE INVESTMENTS?
A. Yes, the fund invests in Treasury bond futures contracts and options on
these futures. I have used them mainly to shorten the duration of the fund,
acting as a balance against the fund's longer-term bond holdings. And while
they can track the performance of actual bonds because they are tied to the
movement of Treasuries, they are easier and often cheaper to buy and sell.
I have also been using foreign forward currency contracts during the
period, in an attempt to hedge currency risk on the fund's foreign
investments.
Q. LOOKING BACK, WHAT ARE YOUR REGRETS?
A. I'm pleased the fund generated a positive return in a rising interest
rate environment. My defensive strategy has fared relatively well. One
regret is that I hedged my non-dollar investments earlier in the period as
a way to reduce currency volatility. The fund would have been better off
not doing this, because the dollar weakened and the protective hedging made
the fund miss out on currency gains.
Q. WHAT'S YOUR OUTLOOK GOING FORWARD?
A. I remain bearish. Although I believe the bulk of interest rate increases

is behind us, it looks as if the Fed could continue to raise interest rates
because it is concerned that inflation could increase as a result of
sustained, strong economic growth. I'm going to remain defensive until I
see signs that the economy is slowing, that inflation is going to remain
under control and that the Fed
is done raising interest rates.

QUALITY DIVERSIFICATION AS OF OCTOBER 31, 1994
(MOODY'S RATINGS) % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
6 MONTHS AGO

Aaa 47.9 50.9

Aa 6.7 6.9

A 10.6 13.3

Baa 9.4 11.3

Ba 1.1 1.5

B - -

Not rated 0.6 0.5

TABLE EXCLUDES SHORT-TERM INVESTMENTS. SECURITIES RATED AS "BA" BY MOODY'S
WERE RATED INVESTMENT GRADE BY OTHER NATIONALLY RECOGNIZED RATING AGENCIES
OR ASSIGNED AN INVESTMENT GRADE RATING AT THE TIME OF ACQUISITION BY
FIDELITY.
AVERAGE YEARS TO MATURITY AS OF OCTOBER 31, 1994
6 MONTHS AGO

Years 6.8 8.3

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF OCTOBER 31, 1994
6 MONTHS AGO

Years 2.5 3.0

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE.
ASSET ALLOCATION
AS OF OCTOBER 31, 1994* AS OF APRIL 30, 1994**

Row: 1, Col: 1, Value: 23.3
Row: 1, Col: 2, Value: 4.6
Row: 1, Col: 3, Value: 9.9
Row: 1, Col: 4, Value: 39.7
Row: 1, Col: 5, Value: 22.5
Row: 1, Col: 1, Value: 12.7
Row: 1, Col: 2, Value: 4.3
Row: 1, Col: 3, Value: 15.2
Row: 1, Col: 4, Value: 41.6
Row: 1, Col: 5, Value: 26.2
Corporate bonds 22.5%
U.S. government
and agency
obligations 39.7%
Foreign government
obligations 9.9%
Other 4.6%
Short-term
investments 23.3%
Corporate bonds 26.2%
U.S. government
and agency
obligations 41.6%
Foreign government
obligations 15.2%
Other 4.3%
Short-term
investments 12.7%
* TOTAL FOREIGN
ISSUES 18.5%
** TOTAL FOREIGN
ISSUES 24.2%
INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)

Showing Percentage of Total Value of Investment in Securities

NONCONVERTIBLE BONDS - 22.5%
SHARES VALUE (NOTE 1)

BASIC INDUSTRIES - 0.3%
CHEMICALS & PLASTICS - 0.1%
Grace (W.R.) & Co. 7.40%, 2/1/00 $ 2,500 $ 2,394
PAPER & FOREST PRODUCTS - 0.2%
Boise Cascade Corp. 9 7/8%, 2/15/01 2,000 2,078
International Paper Co. 9.70%, 3/15/00 1,030 1,102
3,180
TOTAL BASIC INDUSTRIES 5,574
DURABLES - 0.3%
CONSUMER ELECTRONICS - 0.3%
Black & Decker Corp. 7 1/2%, 4/1/03 6,500 5,913
ENERGY - 1.2%
OIL & GAS - 1.2%
Societe Nationale Elf Aquitaine:
7 3/4%, 5/1/99 15,000 14,896
8%, 10/15/01 10,000 9,850
TOTAL ENERGY 24,746
FINANCE - 16.3%
ASSET-BACKED SECURITIES - 1.8%
Discover Card Trust, 6 1/8%, 5/15/98 2,550 2,501
Ford Credit Auto Loan Master Trust 7 3/8%, 4/15/99 12,000 12,044
Railcar Trust 7 3/4%, 6/1/04 14,110 13,987
SCFC Recreational Vehicle Loan Trust 7 1/4%, 9/15/06 3,043 3,025
United Federal Savings Bank Grantor Trust :
6 7/8%, 7/10/00 1,826 1,787
7.275%, 11/10/00 2,310 2,273
35,617
BANKS - 7.7%
Bank of Boston Corp. 6 5/8%, 2/1/04 10,000 8,705
Central Fidelity Banks, Inc. 8.15%, 11/15/02 5,000 4,910
Citicorp 8%, 2/1/03 2,000 1,938
Crestar Financial Corp. 8 1/4%, 7/15/02 10,750 10,642
Export-Import Bank Korea 7.85%, 11/1/96 9,000 9,045
NONCONVERTIBLE BONDS - CONTINUED
SHARES VALUE (NOTE 1)

FINANCE - CONTINUED
BANKS - CONTINUED
First Hawaiian, Inc. 6 1/4%, 8/15/00 $ 3,000 $ 2,715
First Interstate Bancorp:
8 5/8%, 4/1/99 9,000 9,178
9 3/8%, 1/23/02 1,835 1,921
First National Bank of Boston 8 3/8%, 12/15/02 5,000 4,962
First USA Bank Wilmington, DE 5 3/4%, 1/15/99 4,000 3,665
Fleet Financial Group, Inc.:
7 5/8%, 12/1/99 5,000 4,896
8 1/8%, 7/01/04 5,000 4,860
Florida National Banks, Inc. 9 7/8%, 5/15/99 5,000 5,324
HSBC Finance Nederland BV 7.40%, 4/15/03 (c) 5,000 4,642
Integra Financial Corp. 6 1/2%, 4/15/00 3,000 2,766
Korea Development Bank:
9.60%, 12/1/00 1,000 1,049
9 1/2%, 3/15/01 3,000 3,130
9.48%, 4/2/01 7,000 7,296
9.40%, 8/1/01 5,000 5,190
8.09%, 10/6/04 11,000 10,932
MBNA American Bank, N.A. 7 1/4%, 9/15/02 7,000 6,519
Mercantile Bancorporation, Inc. 7 5/8%, 10/15/02 5,000 4,760
Midland American Capital Corp. gtd. 12 3/4%, 11/15/03 7,825 9,028
Midlantic Corp. 9 1/4%, 9/1/99 5,000 5,141
Provident Bank 7 1/8%, 3/15/03 2,000 1,826
Signet Banking Corp. 9 5/8%, 6/1/99 2,000 2,099
Sovran Financial Corp. 9 3/4%, 6/15/99 5,000 5,259
UJB Financial Corp. 8 5/8%, 12/10/02 10,000 10,010
Zions Bancorporation 8 5/8%, 10/15/02 3,900 3,882
156,290
CREDIT & OTHER FINANCE - 4.9%
American General Financial Corporation 12 3/4%, 12/1/94 3,000 3,014
Aristar, Inc.:
7 3/8%, 2/15/97 10,000 9,962
8 7/8%, 8/15/98 390 399
NONCONVERTIBLE BONDS - CONTINUED
SHARES VALUE (NOTE 1)

FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Associates Corp. of North America:
6 7/8%, 1/15/97 $ 1,000 $ 989
8.80%, 8/1/98 90 93
Deere (John) Capital Corp. 9 5/8%, 11/1/98 6,000 6,346
Ford Motor Credit Corp.:
8.90%, 1/25/95 5,000 5,032
8 3/4%, 6/26/95 8,500 8,629
General Motors Acceptance Corp.:
7.05%, 4/13/95 10,000 10,034
7 3/4%, 2/25/97 20,000 20,059
Grand Metropolitan Investment Corp.:
8 1/8%, 8/15/96 7,000 7,113
8 5/8%, 7/15/96 10,000 10,194
Heller Financial, Inc. 9 3/8%, 3/15/98 750 784
Household Finance Corp.:
10 1/8%, 6/15/96 1,225 1,278
7 5/8%, 12/15/96 2,000 2,012
Secured Finance, Inc. Kroger gtd. secured 9.05%, 12/15/04 4,000 4,132
Society Corporation 8 7/8%, 5/15/96 7,500 7,659
Texaco Capital, Inc. gtd. 8 1/2%, 2/15/03 500 503
98,232
INSURANCE - 0.3%
Metropolitan Life Insurance Co. 6.30%, 11/1/03 (c) 4,500 3,860
Protective Life Corp. 7.95%, 7/1/04 1,000 956
St. Paul Companies, Inc. 9 3/8%, 6/15/97 440 459
5,275
SAVINGS & LOANS - 1.5%
Ahmanson (H.F.) & Co.:
9 7/8%, 11/15/99 9,500 10,073
8 1/4%, 10/01/02 3,000 2,963
Great Western Financial Corp.:
6 3/8%, 7/1/00 4,140 3,784
8.60%, 2/1/02 6,000 6,006
Home Savings of America 10 1/2%, 6/12/97 3,500 3,654
Household Bank FSB Newport Beach, CA 6 1/2%, 7/15/03 4,000 3,504
29,984
NONCONVERTIBLE BONDS - CONTINUED
SHARES VALUE (NOTE 1)

FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.1%
Morgan Stanley Group, Inc. 8 7/8%, 10/15/01 $ 1,000 $ 1,019
TOTAL FINANCE 326,417
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
Deere & Co. 9 1/8%, 7/1/96 3,000 3,089
MEDIA & LEISURE - 1.2%
BROADCASTING - 0.6%
Telecommunications, Inc. 6.58%, 2/15/05 (e) 2,500 2,305
Time Warner, Inc. 6.05%, 7/1/95 (c) 10,000 9,940
12,245
LEISURE DURABLES & TOYS - 0.2%
Brunswick Corp. 8 1/8%, 4/1/97 4,500 4,492
PUBLISHING - 0.4%
Knight Ridder, Inc. 8 1/2%, 9/1/01 3,000 3,033
News America Holdings, Inc. 8 5/8%, 2/1/03 5,000 4,910
7,943
TOTAL MEDIA & LEISURE 24,680
NONDURABLES - 0.3%
BEVERAGES - 0.0%
Coca-Cola Enterprises, Inc. 7 7/8%, 2/1/02 960 942
FOODS - 0.1%
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 1,000 980
HOUSEHOLD PRODUCTS - 0.2%
Clorox Co. 8.80%, 7/15/01 4,000 4,135
TOBACCO - 0.0%
Philip Morris Companies, Inc. 8 7/8%, 7/1/96 450 462
TOTAL NONDURABLES 6,519
NONCONVERTIBLE BONDS - CONTINUED
SHARES VALUE (NOTE 1)

RETAIL & WHOLESALE - 0.1%
GROCERY STORES - 0.1%
Great Atlantic & Pacific Tea Co. 9 1/8%, 1/15/98 $ 2,000 $ 2,006
SERVICES - 0.2%
LEASING & RENTAL - 0.2%
Hertz Corp. 7%, 7/15/03 5,000 4,502
TECHNOLOGY - 0.2%
COMPUTERS & OFFICE EQUIPMENT - 0.2%
Comdisco, Inc. 7 3/4%, 1/29/97 3,000 2,995
Xerox Corp. 9 1/4%, 2/15/00 2,000 2,016
TOTAL TECHNOLOGY 5,011
TRANSPORTATION - 0.6%
AIR TRANSPORTATION - 0.4%
Qantas Airways Ltd. 6 5/8%, 6/30/98 (c) 5,000 4,738
Southwest Airlines Co. 8 3/4%, 10/15/03 3,500 3,552
8,290
TRUCKING & FREIGHT - 0.2%
Airborne Freight Corp. 8 7/8%, 12/15/02 5,000 5,019
TOTAL TRANSPORTATION 13,309
UTILITIES - 1.6%
ELECTRIC UTILITY - 1.6%
British Columbia Hydro & Power Authority
15 1/2%, 11/15/11 10,000 12,062
Carolina Power & Light Co. 5.20%, 1/1/95 2,000 1,998
Hydro-Quebec 8.40%, 1/15/22 20,000 18,706
TOTAL UTILITIES 32,766
TOTAL NONCONVERTIBLE BONDS
(Cost $467,195) 454,532
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 36.6%
SHARES VALUE (NOTE 1)

U.S. TREASURY OBLIGATIONS - 36.1%
4 5/8%, 8/15/95 $ 61,000 $ 60,342
3 7/8%, 8/31/95 63,000 61,898
4 5/8%, 2/15/96 (d) 10,000 9,778
9 3/8%, 4/15/96 44,000 45,684
7 1/4%, 11/15/96 50,070 50,454
6 1/2%, 5/15/97 69,300 68,477
5 1/8%, 3/31/98 59,200 55,454
9 1/4%, 8/15/98 7,500 7,969
8 7/8%, 2/15/99 17,000 17,898
6 7/8%, 8/31/99 12,500 12,201
12 3/4%, 11/15/10 6,375 8,586
8 7/8%, 8/15/17 7,350 7,918
8 7/8%, 2/15/19 42,900 46,278
8 1/8%, 8/15/19 156,280 156,280
7 7/8%, 2/15/21 40,500 39,430
8 1/8%, 5/15/21 20,500 20,526
6 1/4%, 8/15/23 1,000 800
Stripped coupon:
2/15/96 2,450 2,258
2/15/98 65,000 51,414
8/15/06 9,715 3,804
2/15/08 10,000 3,437
TOTAL U.S. TREASURY OBLIGATIONS 730,886
U.S. GOVERNMENT AGENCY OBLIGATIONS - 0.5%
Financing Corporation:
10.70%, 10/6/17 250 308
9.80%, 11/30/17 10,000 1,465
9.80%, 4/6/18 8,000 1,136
principal strips 0%, 3/7/19 49,000 6,434
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 9,343
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS (Cost $780,136) 740,229
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 3.1%
SHARES VALUE (NOTE 1)

FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.0%
8 1/2%, 6/15/13 $ 181 $ 184
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.6%
6 1/2%, 5/1/23 to 4/1/24 9,837 8,679
8.92%, 6/15/97 (e) 44 43
12%, 3/1/17 2,021 2,261
12 1/2%, 9/1/11 to 8/1/15 588 666
11,649
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -2.5%
8%, 8/15/16 to 9/15/23 23,812 22,897
8 1/2%, 7/15/16 to 12/15/22 8,543 8,438
9%, 3/15/16 to 10/15/18 14,703 15,011
9 1/2%, 9/15/09 to 10/15/15 194 203
10%, 12/15/13 to 11/15/19 4,272 4,578
51,127
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $64,499) 62,960
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.0%
PRIVATE SPONSOR - 0.0%
Maryland National Bank pass thru Series 1990-1
Class A, 9 1/2%, 10/25/50 (Cost $445) 431 431
COMMERCIAL MORTGAGE SECURITIES - 1.1%
CS First Boston Mortgage Securities Corp. commercial Series
1994-CFB1 Class A-2, 7.90%, 1/25/28 7,772 7,608
Collateralized Mortgage Securities Corp. sequential
pay Class R-1, 7%, 7/1/05 324 316
FDIC commercial Series 1994-C1 Class II-A1,
6.30%, 9/25/25 2,220 2,207
Resolution Trust Corp. commercial:
Series 1991-M5 Class A, 9%, 3/25/07 4,696 4,742
Series 1994-C1 Class A-4, 7 1/4%, 6/25/26 5,894 5,845
COMMERCIAL MORTGAGE SECURITIES - CONTINUED
SHARES VALUE (NOTE 1)

Structured Asset Securities Corp. commercial
Series 1993-C1 Class A-1, 6.60%, 10/25/24 $ 2,201 $ 2,107
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $23,054) 22,825
FOREIGN GOVERNMENT OBLIGATIONS - 9.9%
Canadian Government 8 1/4%, 11/1/95 CAD 54,000 40,404
Danish Government:
euro 7 3/4%, 12/15/96 1,350 1,364
Bullet:
8%, 5/15/03 DKK 85,000 13,583
7%, 12/15/04 DKK 90,000 13,312
French Government OAT:
8 1/2%, 11/25/02 FRF 5,000 989
8 1/2%, 4/25/03 FRF 105,000 20,723
German Government:
8 5/8%, 2/20/96 DEM 1,500 1,030
8%, 9/22/97 DEM 30,000 20,587
Ireland Republic 8 5/8%, 4/15/01 10,500 10,772
Manitoba Province:
6 7/8%, 9/15/02 17,500 16,135
yankee 8.80%, 1/15/20 15,000 14,910
Ontario Province:
7 3/8%, 1/27/03 7,500 7,091
6 5/8%, 6/22/04 11,000 10,463
15 1/8%, 5/1/11 7,080 8,235
17%, 11/5/11 5,500 6,761
Kingdom of Sweden 10 3/4%, 1/23/97 SEK 5,000 707
Kingdom of Thailand 8 1/4%, 3/15/02 10,000 9,824
Malaysian Government:
euro 9 1/2%, 10/31/96 815 845
7/8%, 9/27/00 3,250 3,506
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $213,079) 201,241
SUPRANATIONAL OBLIGATIONS - 3.1%
SHARES VALUE (NOTE 1)

African Development Bank:
10 1/2%, 11/1/95 $ 4,000 $ 4,147
9 1/2%, 12/15/95 5,000 5,150
10%, 11/1/97 4,000 4,264
8.70%, 5/1/01 5,000 5,202
7 3/4%, 12/15/01 8,000 7,830
Asian Development Bank 9 3/8%, 6/8/95 5,000 5,086
Corporacion Andina De Fomento yankee
7 1/4%, 4/30/98 (c) 6,100 5,734
European Investment Bank 11 5/8%, 2/1/99 2,500 3,071
Inter-American Development Bank:
11 3/8%, 5/1/95 2,000 2,049
9.45%, 9/15/98 2,000 2,113
International Bank for Reconstruction & Development:
euro 11 1/8%, 1/13/98 2,000 2,197
4 1/2%, 3/20/03 (b) JPY 1,500 15,255
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost $61,454) 62,098
OTHER SECURITIES - 0.4%
COLLATERALIZED NOTES - 0.4%
Ridgefield Investments Ltd. sr. notes 0%, 2/2/95 (collateralized
by Mexican govt. securities) (c) (Cost $7,419) 7,537 7,093
REPURCHASE AGREEMENTS - 23.3%
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.78%
dated 10/31/94 due 11/1/94 472,175 472,175
PURCHASED OPTIONS - 0.0%
DOLLAR AMOUNTS IN THOUSANDS EXPIRATION DATE/ UNDERLYING FACE VALUE
STRIKE PRICE AMOUNT AT VALUE (NOTE 1)
298 Call Options on March U.S. Treasury
Bond Futures (Cost $782) Feb. 95/96 $ 29,120 $ 433
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,090,238) $ 2,024,017
FUTURES CONTRACTS
DOLLAR AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SOLD
2,248 U.S. Treasury Bond Futures Contracts Dec. 94 $ 221,077 $ 8,547
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 10.9%
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATES VALUE GAIN/(LOSS)
CONTRACTS TO SELL
18,917 CAD 1/17/95 $ 13,982 93
163,939 DKK 1/9/95 27,797 (983)
231,935 FRF 1/20/95 45,067 (44)
1,513,956 JPY 12/7/94 15,671 (418)
5,250 SEK 1/19/95 730 (8)
TOTAL CONTRACTS TO SELL-
(Receivable amount $101,887) $ 103,247 (1,360)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 5.1%
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
DKK - Danish krone
FRF - French franc
DEM - German deutsche mark
JPY - Japanese yen
SEK - Swedish krona
LEGEND
(d) Principal amount is stated in United States dollars unless otherwise
noted.
(e) Principal amount in millions.
(f) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $36,007,000 or 1.8% of net
assets.
(g) A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $6,647,000.
(h) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 65.2% AAA, AA, A 64.8%
Baa 9.4% BBB 10.5%
Ba 1.1% BB 0.5%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
Securities rated as "Ba" by Moody's and "BB" by S&P were rated investment
grade by other nationally recognized rating agencies or assigned an
investment grade rating at the time of acquisition by Fidelity. For some
foreign government obligations, FMR has assigned the ratings of the
sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 0.0%.
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 81.5%
Canada 6.7
Supranational 3.1
France 2.3
Korea 1.8
Denmark 1.4
Germany 1.1
Others (individually less
than 1%) 2.1
TOTAL 100.0%
INCOME TAX INFORMATION
At October 31, 1994, the aggregate cost of investment securities for income
tax purposes was $2,090,438,000. Net unrealized depreciation aggregated
$66,421,000, of which $7,650,000 related to appreciated investment
securities and $74,071,000 related to depreciated investment securities.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) OCTOBER 31, 1994 (UNAUDITED)

ASSETS

Investment in securities, at value (including repurchase $ 2,024,017
agreements of $472,175) (cost $2,090,238) -
See accompanying schedule

Cash 78

Receivable for investments sold 2

Receivable for fund shares sold 121

Interest receivable 30,105

TOTAL ASSETS 2,054,323

LIABILITIES

Payable for investments purchased $ 3,922

Unrealized depreciation on foreign currency contracts 1,360

Dividends payable 1,028

Accrued management fee 521

Other payables and accrued expenses 635

TOTAL LIABILITIES 7,466

NET ASSETS $ 2,046,857

Net Assets consist of:

Paid in capital $ 2,132,118

Distributions in excess of net investment income (3,590)

Accumulated undistributed net realized gain (loss) on (22,808)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on (58,863)
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 206,908 shares outstanding $ 2,046,857

NET ASSET VALUE, offering price and redemption price per $9.89
share ($2,046,857 (divided by) 206,908 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)

INVESTMENT INCOME $ 66,706
Interest (including security lending fees of $23)

EXPENSES

Management fee $ 2,931

Transfer agent fees 2,398

Accounting and security lending fees 245

Non-interested trustees' compensation 5

Custodian fees and expenses 206

Registration fees 64

Audit 19

Legal 3

Reports to shareholders 83

Miscellaneous 10

TOTAL EXPENSES 5,964

NET INVESTMENT INCOME 60,742

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (11,116)

Foreign currency transactions (9,509)

Futures contracts 21,536 911

Change in net unrealized appreciation (depreciation) on:

Investment securities (39,377)

Futures contracts (10,912)

Assets and liabilities in foreign currencies 1,171 (49,118)

NET GAIN (LOSS) (48,207)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 12,535
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED OCTOBER APRIL 30,
31, 1994 1994
(UNAUDITED)

INCREASE (DECREASE) IN NET ASSETS

Operations $ 60,742 $ 122,626
Net investment income

Net realized gain (loss) 911 (1,273)

Change in net unrealized appreciation (depreciation) (49,118) (74,372)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,535 46,981
FROM OPERATIONS

Distributions to shareholders: (59,810) (116,646)
From net investment income

From net realized gain (16,182) -

In excess of net realized gain - (14,842)

TOTAL DISTRIBUTIONS (75,992) (131,488)

Share transactions 601,420 1,008,481
Net proceeds from sales of shares

Reinvestment of distributions 71,495 122,132

Cost of shares redeemed (344,412) (902,833)

Net increase (decrease) in net assets resulting from 328,503 227,780
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS 265,046 143,273

NET ASSETS

Beginning of period 1,781,811 1,638,538

End of period (including distributions in excess of $ 2,046,857 $ 1,781,811
net investment income of $3,590 and $4,522,
respectively)

OTHER INFORMATION
Shares

Sold 59,901 94,032

Issued in reinvestment of distributions 7,120 11,378

Redeemed (34,322) (84,388)

Net increase (decrease) 32,699 21,022

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX YEARS ENDED APRIL 30,
MONTHS
ENDED
OCTOBER
31, 1994

(UNAUDITED 1994 1993 1992 1991 1990
)

SELECTED PER-SHARE
DATA

Net asset value, $ 10.230 $ 10.700 $ 10.270 $ 10.070 $ 9.690 $ 9.850
beginning of period

Income from .324 .705 .784 .764 .800 .866
Investment
Operations
Net investment
income

Net realized and (.259) (.381) .496 .197 .380 (.160)
unrealized gain
(loss)

Total from investment .065 .324 1.280 .961 1.180 .706
operations

Less Distributions (.315) (.704) (.790) (.761) (.800) (.866)
From net investment
income

From net realized (.090) - (.060) - - -
gain
on investments

In excess of net - (.090) - - - -
realized
gain on investments

Total distributions (.405) (.794) (.850) (.761) (.800) (.866)

Net asset value, end $ 9.890 $ 10.230 $ 10.700 $ 10.270 $ 10.070 $ 9.690
of period

TOTAL RETURNB, C .64% 2.93% 12.90% 9.82% 12.61% 7.24%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 2,047 $ 1,782 $ 1,639 $ 1,235 $ 878 $ 661
period (in millions)

Ratio of expenses to .62% .64% .61% .63% .66% .72%
average net assets A

Ratio of expenses to .62% .64% .66% .65% .66% .72%
average net assets A
before expense
reductions

Ratio of net investment 6.33% 6.88% 7.44% 7.45% 8.05% 8.57%
income to average A
net assets

Portfolio turnover rate 37% 81% 51% 80% 73% 82%
A

</TABLE>

10. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Intermediate Bond Fund (the fund) is a fund of Fidelity
Commonwealth Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days of their purchase date are valued either at
amortized cost or original cost plus accrued interest, both of which
approximate current value. Securities (including restricted securities) for
which market quotations are not readily available are valued at their fair
value as determined in good faith under consistently applied procedures
under the general supervision of the Board of Trustees.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Effective May 1, 1994, the fund adopted Statement of Position (SOP) 93-4:
Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts and foreign
currency options, disposition of foreign currencies, currency gains and
losses realized between the trade and settlement dates on securities
transactions, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. Further, as
permitted under the SOP, the effects of changes in foreign currency
exchange rates on investments in securities are not segregated in the
Statement of Operations from the effects of changes in market prices of
those securities, but are included with the net realized and unrealized
gain or loss on investment in securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
paydown gains/losses on certain securities, futures and options
transactions, foreign currency transactions, market discount and losses
deferred due to wash sales and futures and options. The fund also utilized
earnings and profits distributed to shareholders on redemption of shares as
a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Undistributed net investment income
may include temporary book and tax basis differences which will reverse in
a subsequent period. Distributions in excess of net investment income may
include temporary book and tax basis differences which will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year end
is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
11. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY
CONTRACTS. The fund may enter into forward foreign currency contracts.
These contracts involve market risk in excess of the amount reflected in
the fund's Statement of Assets and Liabilities. The face or contract amount
in U.S. dollars, as reflected in the schedule of investments under the
caption "Forward Foreign Currency Contracts," reflects the total exposure
the fund has in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
FUTURES CONTRACTS AND OPTIONS.
The fund may invest in futures and options contracts, and may also write
options. These investments involve, to varying degrees, elements of market
risk and risks in excess of the amount recognized in the Statement of
Assets and Liabilities. The face or contract amounts, as reflected in the
schedule of investments under the captions "Purchased Options" and "Futures
Contracts," reflect the extent of the involvement the fund has in the
particular classes of instruments. Risks may be caused by an imperfect
correlation between movements in the price of the instruments and the price
of the underlying securities and interest rates. Risks also may arise if
there is an illiquid secondary market for the instruments, or due to the
inability of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
12. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total investments
in repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The repurchase agreements were dated October 31,
1994 and due November 1, 1994. The maturity values of the joint trading
account investments were $472,175,000 at 4.78%. The investments in
repurchase agreements through the joint trading account are summarized as
follows:
SUMMARY OF JOINT TRADING
Number of dealers or banks 26
Maximum amount with one dealer or bank 10.3%
Aggregate principal amount of agreements $18,074,295,000
Aggregate maturity amount of agreements $18,076,694,000
Aggregate market value of collateral $18,470,938,000
Coupon rates of collateral 3.0% to 15.75%
11/3/94 to
Maturity dates of collateral 11/15/24
Number of dealers or banks 26
13. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $383,373,000 and $280,970,000, respectively, of which U.S.
government and government agency obligations aggregated $322,447,000 and
$203,825,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $586,558,000 and $524,613,000, respectively.
14. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1325% to .3700% for the period May 1, 1994 to July 31,
1994 and .1200% to .3700% for the period August 1, 1994 to October 31,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .15%. On November 16, 1994, shareholders of the
fund approved an increase in the individual fund fee rate from .15% to
.30%, effective December 1, 1994. For the period, the management fee was
equivalent to an annualized rate of .31% of average net assets.
DISTRIBUTION AND SERVICE PLAN.
Pursuant to the Distribution and Service Plan (the Plan), and in accordance
with Rule 12b-1 of the 1940 Act, FMR or the fund's distributor, Fidelity
Distributors Corporation (FDC), an affiliate of FMR, may use their
resources to pay administrative and promotional expenses related to the
sale of the fund's shares. Subject to the approval of the Board of
Trustees, the Plan also authorizes payments to third parties that assist in
the sale of the fund's shares or render shareholder support services. FMR
or FDC has informed the fund there were no payments made to third parties
under the Plan.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives fees based on the type, size, number of accounts and the
number of transactions made by shareholders. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
15. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, there were no
loans outstanding.
TO CALL FIDELITY

(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Michael Gray, Vice President
Thomas J. Steffanci, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
CUSTODIAN
The Bank of New York
New York, NY
FIDELITY'S TAXABLE BOND FUNDS
Capital & Income
Ginnie Mae
Global Bond
Government Securities
Intermediate Bond
Investment Grade Bond
Mortgage Securities
New Markets Income
Short-Intermediate Government
Short-Term Bond
Short-Term World Income
Spartan(registered trademark) Ginnie Mae
Spartan Government Income
Spartan High Income
Spartan Investment Grade Bond
Spartan Limited Maturity Government
Spartan Long-Term Government Bond
Spartan Short-Intermediate Government
Spartan Short-Term Income
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)