SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-52322)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 49 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No. [ ]
Fidelity Commonwealth Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: 617-570-7000
Arthur S. Loring, Esq., 82 Devonshire Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
( ) Immediately upon filing pursuant to paragraph (b)
( x ) On March 21, 1994 pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)
( ) On pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule before June 30, 1994.
FIDELITY COMMONWEALTH TRUST:
FIDELITY SMALL CAP STOCK FUND
CROSS REFERENCE SHEET
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Part A - Prospectus
Form N-1A Item Number: Prospectus Caption:
1 a,b...................................................................... Cover Page
2 a......................................................................... Summary of Fund Expenses
b,c...................................................................... *
3 a......................................................................... Per-Share Data and Ratios (by supplement)
b........................................................................ *
c......................................................................... Performance
4 a(i)..................................................................... The Fund and the Fidelity Organization
a(ii).................................................................... How the Fund Work; Investment Objectives and
Policies; International Investments: Special
Considerations; Investment Limitations; Portfolio
Transactions
b....................................................................... Other Investment Practices
c......................................................................... International Investments: Special Considerations;
Matching the Fund to Your Investment Needs;
Appendix
5 a......................................................................... The Fund and the Fidelity Organization
b........................................................................ The Fund and the Fidelity Organization;
Management and Service Fees
c......................................................................... *
d,e...................................................................... Management and Service Fees
f........................................................................ Portfolio Transactions
6 a(i)..................................................................... The Fund and the Fidelity Organization
a(ii).................................................................... Investment Requirements to Remember; Exchange
Privilege; How to Redeem Shares; Redemption
Requirements to Remember
a(iii),b,c,d.......................................................... *
e......................................................................... Cover Page; Shareholder's Manual; How to Buy
Shares; Opening an Account; Tax-Sheltered
Retirement Plans; How to Redeem Shares
f........................................................................ Distributions and Taxes; Distribution Options
g....................................................................... Distributions and Taxes; Statements and Reports
7 a......................................................................... The Fund and the Fidelity Organization
b(i-iii)................................................................ Share Price; Investment Requirements to
Remember
b(iv)................................................................... Share Price
b(v).................................................................... Investment Requirements to Remember
c......................................................................... Share Price; Exchange Privilege
d........................................................................ How to Buy Shares
e, f..................................................................... *
8 a......................................................................... Investment Requirements to Remember; Exchange
Privilege; How to Redeem Shares; Redemption
Requirements to Remember
b........................................................................ *
c......................................................................... Redemption Requirements to Remember
d........................................................................ Opening An Account; Investment Requirements to
Remember; How to Redeem Shares; Redemption
Requirements to Remember
9........................................................................... *
* Not Applicable
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Part B Statement of Additional Information
10, 11.................................................................... Cover Page
12......................................................................... *
13 a,b,c................................................................. Investment Policies and Limitations
d...................................................................... Portfolio Transactions
14 a,b.................................................................... Trustees and Officers
c....................................................................... *
15 a,b.................................................................... *
c....................................................................... Trustees and Officers
16 a(i)................................................................... Portfolio Transactions; FMR
a(ii).................................................................. Trustees and Officers
a(iii),b.............................................................. Management Contract
c....................................................................... *
d...................................................................... Contracts with Companies Affiliated with FMR
e, f, g............................................................... *
h...................................................................... Description of the Trust
i....................................................................... Contracts with Companies Affiliated with FMR
17 a....................................................................... Portfolio Transactions
b...................................................................... *
c....................................................................... Portfolio Transactions
d,e.................................................................... *
18 a....................................................................... Description of the Trust
b...................................................................... *
19 a....................................................................... Additional Purchase and Redemption Information
b...................................................................... Valuation of Portfolio Securities; Additional
Purchase and Redemption Information
c....................................................................... *
20......................................................................... Taxes
21 a....................................................................... Contracts with Companies Affiliated with FMR
b, c................................................................... *
22.a....................................................................... *
b...................................................................... Performance
23......................................................................... Financial Statements
______________________________________
* Not Applicable
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FIDELITY SMALL CAP STOCK FUND
SUPPLEMENT TO THE PROSPECTUS DATED JUNE 28, 1993
FINANCIAL HIGHLIGHTS. The following information supplements the information
set forth in the Prospectus. The table reports selected data for a share
outstanding throughout the period June 28, 1993 (commencement of
operations) to October 31, 1993:
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JUNE 28, 1993
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1993
(UNAUDITED)
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .01
Net realized and unrealized gain (loss) on investments .73
Total from investment operations .74
Net asset value, end of period $ 10.74
TOTAL RETURN (dagger)(double dagger) 7.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 651,007
Ratio of expenses to average net assets ** 1.40%*
Ratio of expenses to average net assets before expense reductions ** 1.41%*
Ratio of net investment income to average net assets .19%*
Portfolio turnover rate 161%*
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* ANNUALIZED
** SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
(dagger) THE TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(double dagger) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED CERTAIN EXPENSES DURING THE
PERIOD SHOWN.
The following information replaces the fifth paragraph under the heading
"Share Price" on page 9.
The fund's sales charge may be reduced if you invest directly with Fidelity
or through prototype or prototype-like retirement plans sponsored by FMR or
FMR Corp. Purchases made with assistance or intervention from a financial
intermediary are not eligible. The amount you invest, plus the value of
your account, must fall within the ranges shown below. Call Fidelity to see
if your purchase qualifies.
Ranges Sales charge Net amount
invested
$0 - 249,999 3% 3.09%
$250,000 - 499,999 2% 2.04%
$500,000 - 999,999 1% 1.01%
$1,000,000 or more none none
The sales charge will also be reduced by the percentage of any sales charge
you previously paid on investments in other Fidelity funds (not including
Fidelity's Foreign Currency Funds). Similarly, your shares carry credit for
any sales charge you would have paid if the reductions in the table above
had not been available. These sales charge credits only apply if you
continuously owned Fidelity fund shares or a Fidelity brokerage core
account, or participated in The CORPORATEplan for Retirement Program, and
only to purchases made in one of the following ways: (i) by exchange from
another Fidelity fund; (ii) with proceeds of a transaction within a
Fidelity brokerage core account, including any free credit balance, core
money market fund, or margin availability, to the extent such proceeds were
derived from redemption proceeds from another Fidelity fund; (iii) with
redemption proceeds from one of Fidelity's Foreign Currency Funds, if the
Foreign Currency Fund shares were originally purchased with redemption
proceeds from a Fidelity fund; (iv) through the Directed Dividends Option
(see page 13); or (v) by participants in The CORPORATEplan for Retirement
Program when shares are purchased through plan-qualified loan repayments,
and for exchanges into and out of the Managed Income Portfolio.
The following information supplements the ninth paragraph under the heading
"Share Price" on page 9.
Effective February 1, 1994, the sales charge paid to qualified recipients
will be 2.25% of the fund's offering price.
FIDELITY SMALL CAP
STOCK FUND
A Fund of Fidelity Commonwealth Trust
82 Devonshire Street
Boston, Massachusetts 02109
PROSPECTUS
June 28, 1993
(bullet) THE FUND page
(bullet) SHAREHOLDER'S MANUAL page
Fidelity Small Cap Stock Fund seeks capital appreciation by investing in
stocks of small capitalization companies.
Please read this Prospectus before investing. It is designed to provide you
with information and to help you decide if the fund's goals match your own.
Retain this document for future reference.
A Statement of Additional Information (dated June 28, 1993) for the fund
has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This free Statement is available upon
request from Fidelity Distributors Corporation at 1-800-544-8888.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Summary of Fund Expenses
Investment Objective and Policies
Distributions and Taxes
Small Cap Stock Fund and the Fidelity Organization
Management and Service Fees
How to Buy Shares
Distribution Options
Exchange Privilege
Fidelity Money Line(Registered trademark)
Fidelity Automatic Account Buildersm
Tax-Sheltered Retirement Plans
How to Redeem Shares
Appendix
SCS-pro-693
1.THE FUND
2.SUMMARY OF FUND EXPENSES
The expense summary format below was developed for use by all mutual funds
to help you make your investment decisions. Of course, you should consider
this expense information along with other important information, including
the fund's investment objective.
A. SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)
3.00 %
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load Imposed on Redemptions None
Redemption Fee None
Exchange Fee None
B. ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management Fee .68 %
12b-1 Fee None
Other Expenses .63 %
TOTAL FUND OPERATING EXPENSES 1.31 %
C. EXAMPLE
1 YEAR 3 YEARS
You would pay the following expenses on a $1,000
investment in the fund assuming (1) a 5% annual return
and (2) full redemption at the end of each time period: $ 43 $ 70
EXPLANATION OF TABLE. The purpose of the table is to assist you in
understanding the various costs and expenses that an investor in the fund
would bear directly or indirectly.
A. SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or
sell shares of the fund. A 3% sales charge is imposed on the purchase of
this fund. If you exchange shares of the fund or direct dividends into
another Fidelity fund, charges may be imposed by the other fund. Please
refer to the sections entitled "Share Price," on page 9 and "Distribution
Options," and "Exchange Privilege" on page for an explanation of how and
when these charges apply.
B. ANNUAL FUND OPERATING EXPENSES are based on the fund's estimated
expenses for its first year of operation. Management fees are paid by the
fund to Fidelity Management & Research Company (FMR) for managing its
investments and business affairs and will vary based on performance. The
fund incurs other expenses for maintaining shareholder records, furnishing
shareholder statements and reports, and for other services. Management fees
and other expenses are reflected in the fund's share price or dividends and
are not charged directly to individual accounts. Please refer to the
section entitled "Management and Service Fees" on page for further
information.
C. EXAMPLE OF EXPENSES. The hypothetical example illustrates the expenses
associated with a $1,000 investment in the fund over periods of one and
three years, based on the expenses in the table above and an assumed annual
rate of return of 5%. THE RETURN OF 5% AND EXPENSES SHOULD NOT BE
CONSIDERED INDICATIONS OF ACTUAL OR EXPECTED FUND PERFORMANCE OR EXPENSES,
BOTH OF WHICH MAY VARY.
3.HOW THE FUND WORKS
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of Fidelity Small Cap Stock Fund is to seek
capital appreciation. There is no assurance that the fund will achieve its
investment objective.
The fund seeks capital appreciation primarily from investing in companies
that have market capitalizations of $750 million or less, at the time of
purchase. Under normal conditions, at least 65% of the fund's total assets
will be invested in common or preferred stock of such companies.
The fund may invest in all types of equity securities, including common and
preferred stock and securities that are convertible into common or
preferred stock. Under normal conditions the fund's assets will be invested
in stock of companies with smaller market capitalizations, however the fund
may invest a portion of its assets in the stock of companies with larger
market capitalizations.
In selecting investments for the fund, FMR relies on computer-aided
quantitative analysis supported by fundamental research. FMR's proprietary
computer model systematically reviews thousands of stocks using such
valuation factors as historical earnings, dividend yield, earnings per
share, payout ratio, financial leverage, and many other evaluation
criteria. The data from this review is further analyzed in terms of a
company's growth potential, degree of trading by company officers and
directors, and current earnings estimates, among other factors.
OTHER INVESTMENT PRACTICES. The fund may invest a portion of its assets in
debt securities, including lower-quality high yielding debt securities
(commonly referred to as "junk bonds") although it intends to limit its
investments in these securities to 5% of assets. The fund may make
substantial temporary defensive investments in investment-grade debt
securities and money market instruments when market conditions warrant. The
fund may also invest in warrants and loans and other direct debt
instruments.
Please refer to the Appendix for more information on investments the fund
may make, including foreign investments, options and futures contracts,
swap agreements, indexed securities, illiquid investments, restricted
securities, repurchase agreements and securities loans, and the interfund
borrowing program.
MATCHING THE FUND TO YOUR INVESTMENT NEEDS
Small Cap Stock Fund is designed for long-term stock investors. The fund
may be appropriate for investors who are comfortable with assuming the
added risks associated with small capitalization stocks in return for the
possibility of long-term rewards. Smaller capitalization companies may have
limited product lines, markets, or financial resources. These conditions
may make them more susceptible to setbacks and reversals. Therefore their
securities may be subject to more abrupt or erratic movements than
securities of larger companies. Small capitalization stocks as a group may
not respond to general market rallies or downturns as much as other types
of equity securities.
By itself, the fund does not constitute a balanced investment plan; it
stresses capital appreciation from common stocks and other equity
securities, and should be considered a long-term investment for investors
who can afford to weather changes in the stock market. The fund's share
price and total return fluctuate, and your investment may be worth more or
less than your original cost when you redeem your shares.
INVESTMENT LIMITATIONS
The following summarizes the fund's principal investment limitations. A
complete listing is contained in the Statement of Additional Information.
1. With respect to 75% of its total assets, the fund will not purchase a
security if, as a result: (a) more than 5% of its total assets would be
invested in the securities of any single issuer; or (b) the fund would hold
more than 10% of the voting securities of any single issuer. (c) The fund
will not purchase a security if, as a result, more than 25% of its total
assets would be invested in a particular industry. These limitations do not
apply to U.S. government securities.
2. (a) The fund may borrow money solely for temporary or emergency
purposes, but not in an amount exceeding 33 1/3% of its total assets. (b)
The fund may borrow money from banks, from other funds advised by FMR or an
affiliate, or by engaging in reverse repurchase agreements. (c) The fund
will not purchase securities when borrowings exceed 5% of its total assets.
If the fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. To this extent, purchasing
securities when borrowings are outstanding may involve an element of
leverage.
3. (a) The fund may temporarily lend its portfolio securities to
broker-dealers and institutions, but only when the loans are fully
collateralized. (b) The fund may also make cash loans to other funds
advised by FMR in an amount not exceeding 5% of its assets. (c) Loans, in
the aggregate, will be limited to 33 1/3% of the fund's total assets.
4. The fund will not purchase a security if, as a result, more than 10% of
its assets would be invested in illiquid securities.
Except for the fund's investment objective and limitations 1(a), 1(b),
1(c), 2(a), and 3(c), the fund's policies and limitations described in this
Prospectus are not fundamental and may be changed without shareholder
approval.
These limitations and the policies discussed in "How the Fund Works" are
considered at the time of purchase; the sale of securities is not required
in the event of a subsequent change in circumstances.
PORTFOLIO TRANSACTIONS
FMR uses various brokerage firms to carry out the fund's portfolio
transactions. FMR chooses broker-dealers by judging professional ability
and quality of service. Since FMR places a large number of transactions,
including those of Fidelity's other funds, the fund pays commissions lower
than those paid by individual investors. Also, the fund incurs lower costs
than those incurred by individuals when purchasing debt securities.
The fund has authorized FMR to allocate transactions to some broker-dealers
who help distribute the fund's shares or shares of Fidelity's other funds,
and on an agency basis to Fidelity Brokerage Services, Inc. (FBSI) and
Fidelity Brokerage Services, Ltd. (FBSL), affiliates of FMR. FMR will make
such allocations if commissions are comparable to those charged by
non-affiliated, qualified broker-dealers for similar services.
FMR will also allocate brokerage transactions to the fund's custodian, so
long as transaction quality is comparable to that of other qualified
broker-dealers. The custodian may credit a portion of the commissions paid
toward payment of the fund's custodian charges.
Higher commissions may be paid to firms that provide research services to
the extent permitted by law. FMR also is authorized to allocate brokerage
transactions to FBSI in order to secure from FBSI research services
produced by third party, independent entities. FMR may use this research
information in managing the fund's assets, as well as the assets of other
clients.
The frequency of portfolio transactions - the fund's turnover rate - will
vary from year to year depending on market conditions. The fund's
annualized turnover rate for its first fiscal period ending April 30, 1994
is not expected to exceed 200%. Because a high turnover rate increases
transaction costs and may increase taxable capital gains, FMR carefully
weighs the anticipated benefits of short-term investing against these
consequences.
4.PERFORMANCE
The fund's performance may be quoted in advertising in terms of total
return. Total returns are based on historical results and are not intended
to indicate future performance.
TOTAL RETURNS are based on the overall dollar or percentage change in value
of a hypothetical investment in the fund, including changes in share price,
and assume all of the fund's dividends and capital gain distributions are
reinvested. A CUMULATIVE TOTAL RETURN reflects the fund's performance over
a stated period of time. An AVERAGE ANNUAL TOTAL RETURN reflects the
hypothetical annually compounded return that would have produced the same
cumulative total return if the fund's performance had been constant over
the entire period. Because average annual returns tend to smooth out
variations in the fund's returns, you should recognize that they are not
the same as actual year-by-year results. When the fund quotes an average
annual return covering a period of less than one year, the calculation
assumes that performance will remain constant for the rest of the year.
Since this may or may not occur, the average annual returns should be
viewed as hypothetical rather than actual performance figures. To
illustrate the components of overall performance, the fund may separate its
cumulative and average annual returns into income results and capital gain
or loss.
The fund may quote its total returns on a before-tax or after-tax basis.
Other illustrations of performance may show moving averages over specified
periods.
5.DISTRIBUTIONS AND TAXES
It is suggested that you keep all statements you receive to assist in your
personal recordkeeping.
DISTRIBUTIONS. The fund distributes substantially all of its net investment
income and capital gains to shareholders each year, normally in June and
December.
FEDERAL TAXES. Distributions from the fund's income and short-term capital
gains are taxed as dividends, and long-term capital gain distributions are
taxed as long-term capital gains. A portion of the fund's dividends may
qualify for the dividends-received deduction for corporations. The fund's
distributions are taxable when they are paid, whether you take them in cash
or reinvest them in additional shares, except that distributions declared
in December and paid in January are taxable as if paid on December 31. The
fund will send you a tax statement by January 31 showing the tax status of
the distributions you received in the past year, and will file a copy with
the Internal Revenue Service (IRS).
CAPITAL GAINS. You may realize a capital gain or loss when you redeem
(sell) or exchange shares of the fund. For most types of accounts, the fund
will report the proceeds of your redemptions to you and the IRS annually.
However, because the tax treatment also depends on your purchase price and
your personal tax position, you should keep your regular account statements
to use in determining your tax.
"BUYING A DIVIDEND." On the record date for a distribution, the fund's
share price is reduced by the amount of the distribution. If you buy shares
just before the record date ("buying a dividend"), you will pay the full
price for the shares, and then receive a portion of the price back as a
taxable distribution.
OTHER TAX INFORMATION. In addition to federal taxes, you may be subject to
state or local taxes on your investment, depending on the laws in your
area. When you sign your account application, you will be asked to certify
that your Social Security or taxpayer identification number is correct and
that you are not subject to 31% backup withholding for failing to report
income to the IRS. If you violate IRS regulations, the IRS can require the
fund to withhold 31% of your taxable distributions and redemptions.
6.SMALL CAP STOCK FUND AND THE FIDELITY ORGANIZATION
Small Cap Stock Fund is a diversified fund of Fidelity Commonwealth Trust
(the trust), an open-end management investment company organized as a
Massachusetts business trust on November 8, 1974. A Board of Trustees
supervises the fund's activities and reviews contractual arrangements with
companies that provide the fund with services. Currently, there are three
funds of the trust. As a Massachusetts business trust, the trust is not
required to hold annual shareholder meetings, although special meetings may
be called for a specific fund or the trust as a whole for purposes such as
electing or removing Trustees, changing fundamental policies, or approving
a management contract. Each fund votes separately on matters affecting only
that fund. As a shareholder, you receive one vote for each share you own.
Fidelity Investments is one of America's largest investment management
organizations and has its principal business address at 82 Devonshire
Street, Boston, Massachusetts. It includes a number of different companies
that provide a variety of financial services and products. The fund employs
various Fidelity companies to perform activities required for its
operation.
FMR, the fund's manager, is the original Fidelity company, founded in 1946.
It provides a number of mutual funds and other clients with investment
research and portfolio management services. It maintains a large staff of
experienced investment personnel and a full complement of related support
facilities. As of April 30, 1993, FMR advised funds having more than 11
million shareholder accounts with a total value of more than $175 billion.
Fidelity Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity
Management & Research (Far East) Inc. (FMR Far East), sub-advisers to
the fund, are wholly owned subsidiaries of FMR formed in 1986 to provide
research and investment advice with respect to foreign securities. FMR U.K.
and FMR Far East have their principal business offices in London and Tokyo,
respectively.
Fidelity Distributors Corporation (FDC) distributes shares for the Fidelity
funds. FMR Corp. is the parent company for the Fidelity companies. Through
ownership of voting common stock, Edward C. Johnson 3d (President and a
Trustee of the trust), Johnson family members, and various trusts for the
benefit of the Johnson family form a controlling group with respect to FMR
Corp.
7.MANAGEMENT AND SERVICE FEES
For managing its investments and business affairs, the fund pays a monthly
fee to FMR made up of a basic fee rate and a performance adjustment. The
annual basic fee rate is the sum of two components:
1. A group fee rate based on the monthly average net assets of all of the
mutual funds advised by FMR. This rate cannot rise above .52%, and it drops
(to as low as a marginal rate of .30%) as total assets in all of these
funds rise. The effective group fee rate for April 1993 was .3299%.
2. An individual fund fee rate of .35%.
One-twelfth of the annual basic fee rate is applied to the fund's net
assets averaged over the most recent month, giving a dollar amount, which
is the basic fee for that month.
The performance adjustment rate, also calculated monthly, is based on a
comparison of the fund's performance to that of the Russell 2000 Index
(Russell 2000), a broad index of small capitalization stocks, over the most
recent 36-month period. The difference is translated into a dollar amount
that is added to or subtracted from the basic fee. This adjustment rewards
FMR when the fund outperforms the Russell 2000 and reduces FMR's fee when
the fund underperforms the Russell 2000. The maximum annualized performance
adjustment rate is .20%. The fund's performance adjustment will not take
effect until the twelfth month of the performance period.
FMR has entered into sub-advisory agreements with FMR U.K. and FMR Far East
pursuant to which FMR U.K. and FMR Far East provide research and investment
recommendations with respect to companies based outside the United States.
FMR U.K. focuses primarily on companies based in Europe; FMR Far East
focuses primarily on companies based in Asia and the Pacific Basin. Under
the sub-advisory agreements, FMR pays FMR U.K. and FMR Far East fees equal
to 110% and 105%, respectively, of each sub-adviser's costs incurred in
connection with its sub-advisory agreement.
Fidelity Service Co. (FSC) acts as the fund's transfer and dividend-paying
agent and maintains the fund's shareholder records. The fund pays FSC
transfer agent fees based on the type, size, and number of accounts in the
fund, and the number of monetary transactions made by shareholders. The
fund also pays FSC to calculate its daily share price, to maintain its
general accounting records, and to administer its securities lending
program. The fees for pricing and bookkeeping services are based on the
fund's average net assets, but must fall within a range of $45,000 to
$750,000 per year. The fees for securities lending services are based on
the number and duration of individual securities loans.
FMR may, from time to time, agree to reimburse the fund for management fees
and other expenses above a specified percentage of average net assets. FMR
retains the ability to be repaid by the fund for expense reimbursements if
expenses fall below the limit prior to the end of the fiscal year.
8.SHAREHOLDER'S MANUAL
9.OPENING AN ACCOUNT
You can buy shares of the fund in several ways, which are described here
and in the chart below. You will find an application at the back of this
manual. Unless you already have a Fidelity mutual fund account, you must
complete and sign the application. Additional paperwork may be required
from corporations, associations, and certain fiduciaries. The fund does not
issue share certificates. If you have any questions or need extra forms,
call Fidelity at 1-800-544-8888, 24 hours a day, seven days a week. TDD
service, for the hearing impaired, is available daily from 9:00 a.m. to
9:00 p.m. Eastern time at 1-800-544-0118.
To invest in any of Fidelity's tax-sheltered retirement plans, please call
1-800-544-8888 to obtain information and the required separate application.
10.HOW TO BUY SHARES
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METHOD INITIAL (minimum) INVESTMENT ADDITIONAL (minimum)
INVESTMENT
BY MAIL $2,500 $250
Please make your check payable Please make your check payable
to the name of the fund and mail to the name of the fund. Indicate
it to THE ADDRESS INDICATED ON THE your account number on the
APPLICATION. check and mail it to THE ADDRESS
PRINTED ON YOUR ACCOUNT
STATEMENT.
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AT AN INVESTOR CENTER Visit the Investor Center nearest you to make investments by check.
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FOR ALL OPTIONS BELOW, PLEASE CALL 1-800-544-7777.
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BY EXCHANGE $2,500 $250
(from an account in one of
Fidelity's other funds)
When opening an account by exchange, your new account must be established with the same name(s),
address, and taxpayer identification number as your existing Fidelity account.
BY WIRE $2,500 $250
Federal funds should be wired to: Bankers Trust Company, Bank Routing No. 021001033, Account No.
00163053, together with the name of the fund, your account number, and your name(s).
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BY FIDELITY MONEY LINE Not available $250
You must have received prior notification by mail from FSC that your
Fidelity Money Line is active. The maximum transaction amount is $50,000.
SHARE PRICE
The term "net asset value," or NAV, refers to the worth of one share. The
fund's NAV is computed by adding the value of all of its investments, plus
cash, and other assets, deducting liabilities, and then dividing the result
by the number of shares outstanding. The price of one share (the offering
price) represents the share's NAV plus a sales charge (currently 3% of the
offering price or 3.09% of the net amount invested). The fund is open for
business each day the New York Stock Exchange is open. FSC calculates the
fund's NAV (and offering price) at the close of the fund's business day,
which coincides with the close of business of the New York Stock Exchange
(normally 4:00 p.m. Eastern time).
If you send $2,500 and the next offering price calculated after it is
accepted is $10, you will buy 250 shares. You will pay a sales charge of
$.30 per share and the value of your investment will be $2,425.
Portfolio securities and other assets are valued primarily on the basis of
market quotations or, if quotations are not readily available, by a method
that the Board of Trustees believes accurately reflects fair value. Foreign
securities are valued on the basis of quotations from the primary market in
which they are traded, and are translated from the local currency into U.S.
dollars using current exchange rates.
You may be eligible for a sales charge reduction if your purchase meets
certain conditions. The fund's 3% sales charge will not apply to shares
acquired through reinvestment of your dividends and capital gain
distributions, or in connection with the fund's merger with or acquisition
of any investment company or trust.
In certain cases, the fund's sales charge may be reduced to reflect sales
charges previously paid in connection with investments in other Fidelity
funds. The sales charge will be reduced in this manner for shares purchased
(i) by exchange from another Fidelity fund; (ii) with proceeds of a
transaction within a Fidelity brokerage core account, including any free
credit balance, core money market fund, or margin availability, to the
extent such proceeds were derived from redemption proceeds from another
Fidelity fund; (iii) with redemption proceeds from one of Fidelity's
Foreign Currency Portfolios, if the Foreign Currency Portfolio shares were
originally purchased with redemption proceeds from a Fidelity fund; (iv)
through the Directed Dividends Option (see page ); or (v) by participants
in The CORPORATEplan for Retirement Program when shares are purchased
through plan-qualified loan repayments and for exchanges into and out of
the Managed Income Portfolio. If your purchase meets these conditions, the
fund's sales charge will be reduced by the percentage sales charges (if
any) you previously paid for purchases and sales of other Fidelity funds
(excluding Fidelity's Foreign Currency Portfolios). For example, if you
purchase shares by exchange and have previously paid 2% in sales charges on
the shares you are exchanging, you will pay a 1% sales charge to purchase
shares of the fund. The availability of a sales charge reduction is
contingent upon the continuous ownership of Fidelity fund shares, Fidelity
brokerage core account, or participation in The CORPORATEplan for
Retirement Program, as noted above.
The fund's sales charge will not apply (1) if you buy shares as part of an
employee benefit plan having more than 200 eligible employees or a minimum
of $3,000,000 in plan assets invested in Fidelity mutual funds (plan
sponsors are encouraged to notify Fidelity when they first satisfy either
of these requirements); (2) to shares in a Fidelity IRA account purchased
with the proceeds of a distribution from an employee benefit plan, provided
that, at the time of the distribution, the employer or its affiliate
maintained a plan that both qualified for exemption (1) and had at least
some of its assets invested in Fidelity-managed products; (3) if you are a
charitable organization (as defined in Section 501(c)(3) of the Internal
Revenue Code) investing $100,000 or more; (4) if you purchase shares for a
charitable remainder trust or life income pool established for the benefit
of a charitable organization (as defined by Section 501(c)(3) of the
Internal Revenue Code); (5) if you are an investor participating in the
Fidelity Trust Portfolios program; (6) to shares purchased through
Portfolio Advisory Services; (7) if you are a current or former Trustee or
officer of a Fidelity fund or a current or retired officer, director, or
full-time employee of FMR Corp. or its direct or indirect subsidiaries (a
Fidelity Trustee or employee), the spouse of a Fidelity Trustee or
employee, a Fidelity Trustee or employee acting as custodian for a minor
child, or a person acting as trustee of a trust for the sole benefit of the
minor child of a Fidelity Trustee or employee; (8) if you are a bank trust
officer, registered representative, or other employee of a Qualified
Recipient, as defined below; (9) to contributions and exchanges to a
prototype or prototype-like retirement plan sponsored by FMR Corp. or FMR
and that is marketed and distributed directly to plan sponsors or
participants without any assistance or intervention from any intermediary
distribution channel; (10) if you are a registered investment adviser (RIA)
purchasing for your discretionary accounts, provided you execute a Fidelity
RIA load waiver agreement which specifies certain aggregate minimum and
operating provisions. This waiver is available only for shares purchased
directly from Fidelity, without a broker, and is unavailable if the RIA is
part of an organization principally engaged in the brokerage business; or
(11) if you are a trust institution or bank trust department purchasing for
your non-discretionary, non-retirement fiduciary accounts, provided you
execute a Fidelity Trust load waiver agreement which specifies certain
aggregate minimum and operating provisions. This waiver is available only
for shares purchased either directly from Fidelity or through a
bank-affiliated broker, and is unavailable if the trust department or
institution is part of an organization not principally engaged in banking
or trust activities.
Exemptions (1) through (11) must be qualified through FDC in advance. More
detailed information about exemptions (1), (2), (5), and (9) is contained
in the Statement of Additional Information. A representative of your plan
or organization should call Fidelity for more information.
FDC collects the proceeds from the fund's 3% sales charge and may pay a
portion of it to securities dealers who have sold the fund's shares, or to
others, including banks and other financial institutions, under special
arrangements in connection with FDC's sales activities (Qualified
Recipients). The sales charge paid to Qualified Recipients is 2.75% of the
fund's offering price. FDC may, at its own expense, provide promotional
incentives to Qualified Recipients who support the sale of shares of the
fund without reimbursement from the fund. In some instances, these
incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or expected
sale of significant amounts of shares.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been fully defined, in FDC's opinion it should
not prohibit banks from being paid for shareholder servicing and
recordkeeping. If, because of changes in law or regulation, or because of
new interpretations of existing law, a bank or the fund were prevented from
continuing these arrangements, it is expected that other arrangements would
be made for these services and that shareholders would not suffer adverse
financial consequences. In addition, state securities laws on this issue
may differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.
INVESTMENT REQUIREMENTS TO REMEMBER
Before you buy shares, please read the following information to make sure
your investment is accepted and credited properly. Your purchase will be
processed at the offering price based on the next NAV calculated after your
order is received and accepted by FSC. All of your purchases must be made
in U.S. dollars and checks must be drawn on U.S. banks. No cash will be
accepted. If you make a purchase with more than one check, each check must
have a value of at least $50, and the minimum investment requirement shown
on the chart still applies. The fund reserves the right to limit the number
of checks processed at one time. If your check does not clear, your
purchase will be canceled and you could be liable for any losses or fees
incurred. When you purchase by check or via Fidelity Money Line, the fund
can hold payment on redemptions until it is reasonably satisfied that the
investment has been collected (which can take up to seven days).
You can avoid this collection period by purchasing shares by bank wire or
Direct Deposit. Bank wire may be used to transfer funds on the Federal
Reserve wire system from your bank to your Fidelity account. Your bank may
charge you a fee for this service. Direct Deposit, established through your
employer, allows you to transfer all or a portion of your paycheck via the
Automated Clearing House network to your Fidelity account. Social Security
checks may also be transferred to your Fidelity account via Direct Deposit.
See page for further details on Direct Deposit.
You may initiate transactions by telephone. Note that Fidelity will not be
responsible for any losses resulting from unauthorized transactions if it
follows reasonable procedures designed to verify the identity of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want to be able to redeem and exchange by telephone, call Fidelity for
instructions.
You may buy shares of the fund (at the offering price) or sell them through
a broker, who may charge you a fee for this service. If you are purchasing
shares of the fund through a program of services offered or administered by
a securities dealer or financial institution, you should read the program
materials in conjunction with this Prospectus. Certain features of the
fund, such as the minimum initial or subsequent investment, may be modified
in these programs and administrative charges may be imposed for the
services rendered.
Certain financial institutions that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the fund's pricing on the following
business day. If payment is not received by such time, the financial
institution could be held liable for resulting fees or losses.
The fund reserves the right to suspend the offering of shares for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. (See the section entitled
"Exchange Privilege" below.) Purchase orders may be refused if, in FMR's
opinion, they are of a size that would disrupt management of the fund.
11.SHAREHOLDER SERVICES
FIDELITY TELEPHONE CONNECTION
Use your touch-tone phone for quick, confidential access to frequently
requested information. Call 1-800-544-8544 for Fidelity mutual fund quotes
and 1-800-544-7544 for account balances and last transaction information.
See the back of your quarterly statement for a complete list of Fidelity's
telephone numbers.
DISTRIBUTION OPTIONS
When you fill out your account application, you can choose from the
following distribution options:
A. The SHARE OPTION reinvests your income dividends and capital gain
distributions in additional shares. This option will be assigned
automatically if you make no choice on your account application.
B. The INCOME-EARNED OPTION reinvests your capital gain distributions and
pays your income dividends in cash. This option is not listed on your
account application; call or write Fidelity to learn more or to change your
distribution option.
C. With the CASH OPTION you receive both income dividends and capital gain
distributions in cash.
On the day the fund goes ex-dividend, the amount of the distribution is
deducted from its share price. Reinvestment of distributions will be made
at that day's NAV. Cash distribution checks will be mailed within seven
days.
D. You may choose the DIRECTED DIVIDENDS(Registered trademark) Option to
have distributions from this fund automatically invested in another
Fidelity fund. Note that distributions may only be directed to an existing
account with a registration identical to your account in the fund and that
sales charges and restrictions may apply. Distributions directed from this
fund to another fund will carry credit for the fund's 3% sales charge. If
you direct distributions to a fund with a 3% sales charge you will not pay
a sales charge on your directed dividends purchase. This option is not
listed on your account application; call or write Fidelity to learn more or
to change your distribution option.
EXCHANGE PRIVILEGE
You may exchange between Fidelity funds as your needs change. As a
shareholder, you have the privilege of exchanging your shares for shares of
other Fidelity funds registered in your state, as long as, in FMR's
opinion, the funds will not be adversely affected by your exchanges. To
make an exchange, follow the procedures indicated in the "How to Buy
Shares" and "How to Redeem Shares" charts. Before you make an exchange,
please note the following:
(bullet) Call Fidelity at 1-800-544-8888 to obtain a prospectus for the
fund into which you want to exchange. Read the prospectus for relevant
information.
(bullet) You may only exchange between accounts that are registered in the
same name, address, and taxpayer identification number.
(bullet) If you exchange into a fund with a sales charge, you pay the
percentage difference between that fund's sales charge and any sales charge
you have previously paid in connection with the shares you are exchanging.
For example, if you had already paid a sales charge of 2% on your shares
and you exchanged them into a fund with a 3% sales charge, you would pay an
additional 1% sales charge.
(bullet) TAXES. Each exchange represents the sale of shares of one fund
and the purchase of shares of another, which may produce a gain or loss for
tax purposes. FSC will send you written confirmation of each exchange
transaction.
(bullet) RESTRICTIONS. Although the exchange privilege is an important
benefit, fund performance and shareholders can be hurt by excessive
trading. To protect the interests of shareholders, the fund reserves the
right to temporarily or permanently terminate the exchange privilege for
any person who makes more than four exchanges out of the fund per calendar
year. Accounts under common ownership or control, including accounts with
the same taxpayer identification number, will be aggregated for purposes of
the four exchange limit. In addition, the fund reserves the right to refuse
exchange purchases by any person or group if, in FMR's judgment, the fund
would be unable to invest effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected. Your exchanges may be restricted or refused if the fund receives
or anticipates simultaneous orders affecting significant portions of the
fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the fund. Although the fund
will attempt to give you prior notice whenever it is reasonably able to do
so, it may impose these restrictions at any time. The fund reserves the
right to terminate or modify the exchange privilege in the future. Other
funds may have different exchange restrictions and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
(bullet) The exchange limit may be modified for accounts in certain
institutional retirement plans to conform to plan exchange limits and
Department of Labor regulations. See your plan materials for further
information.
FIDELITY AUTOMATIC EXCHANGE SERVICE
Fidelity Automatic Exchange Service is a convenient method of arranging
monthly, bi-monthly, quarterly, or yearly investments (minimum $100) in the
fund by exchange from an existing, identically registered money market fund
account. Call Fidelity to learn more or to change your Fidelity Automatic
Exchange Service option.
FIDELITY MONEY LINE(Registered trademark)
Fidelity Money Line lets you authorize electronic transfers of money to buy
or sell shares of the fund. You can use Fidelity Money Line to move money
between your bank account and your fund account with one phone call. Allow
two to three business days after the call for the transfer to take place.
For money recently invested, allow normal check-clearing time (up to seven
days) before redemption proceeds are sent to your bank.
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
Fidelity Automatic Account Builder offers a simple way to maintain a
regular investment program. You may arrange automatic transfers (minimum
$100 per transaction) from your bank account to your fund account on a
periodic basis. FSC will send you written confirmation of each transaction,
and a debit entry will appear on your bank statement. You may change the
amount of your investment, skip an investment, or stop Fidelity Automatic
Account Builder by calling Fidelity (1-800-544-6666) at least three
business days prior to your next scheduled investment date.
If you have purchased shares of the fund through a Fidelity retirement
plan, you may use Fidelity Money Line or Fidelity Automatic Account Builder
to make regular contributions to your retirement account. To arrange for
systematic redemptions from your regular or retirement account, call
Fidelity for further information.
DIRECT DEPOSIT
If your employer offers Direct Deposit, you may arrange to automatically
purchase shares of the fund (minimum $100) each pay period. Note that it
may not be appropriate to Direct Deposit your entire paycheck to a fund
(such as Fidelity Small Cap Stock Fund) with a fluctuating NAV. Call
Fidelity for more information or a Direct Deposit Authorization Form.
TAX-SHELTERED RETIREMENT PLANS
Retirement plans are among the best tax breaks available to individuals.
Call Fidelity at 1-800-544-8888 for complete information kits discussing
the plans and their benefits, provisions, and fees. Fidelity can set up
your new account in the fund under one of several tax-sheltered plans.
These plans let you invest for retirement and shelter your investment
income from current taxes. Minimums may differ from those listed in the
chart on page .
(bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): retirement plans that
allow anyone between 18 and 70 1/2 years of age with earned income to
contribute up to $2,000 per tax year. You may make contributions of up to
$250 per year in the name of your spouse, if your spouse has no earned
income.
(bullet) ROLLOVER IRAS: tax-deferred retirement plans that may retain the
special tax advantages of lump sum distributions from qualified retirement
plans.
(bullet) SEP-IRAS: Simplified Employee Pension Plans designed to provide
those with self-employed income (and any eligible employees) with many of
the same advantages as a Keogh, but with fewer administrative requirements.
(bullet) KEOGH OR CORPORATE PROFIT-SHARING AND MONEY-PURCHASE PLANS: open
to self-employed individuals and their partners, or to corporations, to
benefit themselves and their employees.
(bullet) 403(B) CUSTODIAL ACCOUNTS: available to employees of most
non-profit organizations and public schools.
(bullet) 401(K) PROGRAM: open to corporations of all sizes. The program
allows participants to contribute a percentage of their wages on a
tax-deferred basis (i.e., up to $8,994, adjusted annually to reflect
changes in the cost of living).
STATEMENTS AND REPORTS
FSC will send you a confirmation statement after every transaction (except
a reinvestment of dividends or capital gains) that affects your share
balance or your account registration. In addition, an account statement
will be mailed to you quarterly. At least twice a year you will receive the
fund's financial statements with a summary of its investments and
performance. To reduce expenses, only one copy of most shareholder reports
(such as the fund's Annual Report) may be mailed to your household. Please
call Fidelity if you need additional copies.
The fund pays for shareholder services, but not for special services such
as producing and mailing historical account documents. You may be required
to pay fees for special services.
12.HOW TO REDEEM SHARES
To ensure acceptance of your redemption request, please follow the
procedures described here and in the chart on page . You may redeem all or
a portion of your shares on any business day. Your shares will be redeemed
at the next NAV calculated after FSC has received and accepted your
redemption request. Provided that your account registration has not changed
within the last 30 days, you may redeem shares of the fund worth $100,000
or less by calling 1-800-544-7777. Redemption proceeds will be sent to the
record address. Requests for redemptions from a Fidelity IRA or Retirement
Plan account must be sent to Fidelity in writing. Remember that the fund
may hold payment on redemptions until it is reasonably satisfied that
investments made by check or via Fidelity Money Line have been collected
(which may take up to seven days.)
13.HOW TO REDEEM SHARES
<TABLE>
<CAPTION>
<S> <C>
BY MAIL TO: Send a "letter of instruction:" a letter specifying the
FIDELITY INVESTMENTS name of the fund, the number of shares to be
P.O. BOX 878 redeemed, your name, your account number, and the
BOSTON, MA 02103-0878 additional requirements listed below that apply to
your particular account.
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants, Sole Proprietorship, Letter of instruction signed by all persons authorized
Custodial (Uniform Gifts or Transfers To to sign for the account, exactly as it is registered,
Minors Act), General Partners accompanied by signature guarantee(s).*
Corporations, Associations Letter of instruction accompanied by a corporate
resolution. The letter must be signed by at least one
individual authorized (via corporate resolution) to act
on the account. The corporate resolution must include
a corporate seal or signature guarantee.*
Trusts Letter of instruction signed by the Trustee(s) (as
Trustee(s)), with signature guarantee(s).* (If the
Trustee's name is not registered on the account,
provide a copy of the trust document, certified within
the last 60 days.)
</TABLE>
If you do not fall into any of these registration categories (i.e.,
executors, administrators, conservators, or guardians), please call
Fidelity for further instructions.
* A signature guarantee is a widely accepted way to protect you and FSC by
verifying the signature on your request; it may not be provided by a notary
public. The following institutions should be able to provide you with a
signature guarantee: banks, brokers, dealers, credit unions (if authorized
under state law), securities exchanges and associations, clearing agencies,
and savings associations.
<TABLE>
<CAPTION>
<S> <C>
FOR ALL OPTIONS BELOW, PLEASE CALL 1-800-544-7777.
BY EXCHANGE You must meet the minimum investment requirement
of the other fund. You can only exchange between
accounts with identical names, addresses, and
taxpayer identification numbers.
BY FIDELITY MONEY LINE You must have received prior notification by mail
from FSC that your Fidelity Money Line is active.
The minimum redemption amount is $2,500; the
maximum redemption amount is $100,000.
(Accounts cannot be closed by this service.)
</TABLE>
BY WIRE You must have applied for the wire feature on your
account application. You will be notified that this
feature is active and you may then make wire
redemptions by calling before 4:00 p.m. Eastern time.
Your money will be wired to your bank on the next
business day. The minimum redemption amount is
$5,000.
REDEMPTION REQUIREMENTS TO REMEMBER
If you want to keep your account open, please leave shares with a value of
at least $1,000 in it. If your account balance falls below $1,000 due to
redemption, your account may be closed and the proceeds mailed to you at
the record address. You will be given 30 days' notice that your account
will be closed unless you make an additional investment to increase your
account balance to the $1,000 minimum. Your shares will be redeemed at the
NAV on the day your account is closed.
Once your shares are redeemed, the proceeds normally will be sent to you on
the next business day, but if making immediate payment could adversely
affect the fund, it may take up to seven days to pay you. Fidelity Money
Line redemptions generally will be credited to your bank account on the
second or third business day after your phone call. The fund may suspend
redemptions or postpone payment dates on days when the NYSE is closed
(other than weekends or holidays), when trading on the NYSE is restricted,
or as permitted by the SEC. If you are unable to execute your transaction
by telephone (for example, during periods of unusual market activity),
consider placing your order by mail or by visiting one of the Fidelity
Investor Centers. If you place a request to redeem shares at a Fidelity
Investor Center, provided that your request is in good order, Fidelity will
process your redemption at the next NAV calculated and will mail a check
for the proceeds to the record address.
14.APPENDIX
The following paragraphs provide a brief description of securities in which
the fund may invest and transactions it may make. The fund is not limited
by this discussion, however, and may purchase other types of securities and
enter into other types of transactions if they are consistent with the
fund's investment objective and policies.
FOREIGN INVESTMENTS. The fund may invest in foreign securities, which
involve additional risks. Foreign securities and securities denominated in
or indexed to foreign currencies may be affected by the strength of foreign
currencies relative to the U.S. dollar, or by political or economic
developments in foreign countries. Foreign companies may not be subject to
accounting standards or governmental supervision comparable to U.S.
companies, and there may be less public information about their operations.
In addition, foreign markets may be less liquid or more volatile than U.S.
markets, and may offer less protection to investors such as the fund. These
risks are typically greater for investments in less-developed countries
whose governments and financial markets may be more susceptible to adverse
political and economic developments. FMR considers these factors in making
investments for the fund. There is no limitation on the amount of the
fund's assets that may be invested in foreign securities or in any one
country or currency.
The fund may enter into currency forward contracts (agreements to exchange
one currency for another at a future date) to manage currency risks and to
facilitate transactions in foreign securities. Although currency forward
contracts can be used to protect the fund from adverse exchange rate
changes, they involve a risk of loss if FMR fails to predict foreign
currency values correctly.
OPTIONS AND FUTURES CONTRACTS. The fund may buy and sell options and
futures contracts to manage its exposure to changing interest rates,
security prices, and currency exchange rates. Some options and futures
strategies, including selling futures, buying puts, and writing calls, tend
to hedge the fund's investments against price fluctuations. Other
strategies, including buying futures, writing puts, and buying calls, tend
to increase market exposure. Options and futures may be combined with each
other or with forward contracts in order to adjust the risk and return
characteristics of the overall strategy. The fund may invest in options and
futures based on any type of security, index, or currency, including
options and futures traded on foreign exchanges and options not traded on
exchanges.
Options and futures can be volatile investments, and involve certain risks.
If FMR applies a hedge at an inappropriate time or judges market conditions
incorrectly, options and futures strategies may lower the fund's return.
The fund could also experience losses if the prices of its options and
futures positions were poorly correlated with its other investments, or if
it could not close out its positions because of an illiquid secondary
market.
The fund will not hedge more than 25% of its total assets by selling
futures, buying puts, and writing calls under normal conditions. In
addition, the fund will not buy futures or write puts whose underlying
value exceeds 25% of its total assets, and will not buy calls with a value
exceeding 5% of its total assets.
SWAP AGREEMENTS. As one way of managing its exposure to different types of
investments, the fund may enter into interest rate swaps, currency swaps,
and other types of swap agreements such as caps, collars, and floors. In a
typical interest rate swap, one party agrees to make regular payments equal
to a floating interest rate times a "notional principal amount," in return
for payments equal to a fixed rate times the same amount, for a specified
period of time. If a swap agreement provides for payments in different
currencies, the parties might agree to exchange the notional principal
amount as well. Swaps may also depend on other prices or rates, such as the
value of an index or mortgage prepayment rates.
Swap agreements are sophisticated hedging instruments that typically
involve a small investment of cash relative to the magnitude of risks
assumed. As a result, swaps can be highly volatile and may have a
considerable impact on the fund's performance. Swap agreements are subject
to risks related to the counterparty's ability to perform, and may decline
in value if the counterparty's creditworthiness deteriorates. The fund may
also suffer losses if it is unable to terminate outstanding swap agreements
or reduce its exposure through offsetting transactions.
INDEXED SECURITIES. The fund may invest in indexed securities whose value
is linked to currencies, interest rates, commodities, indices, or other
financial indicators. Most indexed securities are short to intermediate
term fixed-income securities whose values at maturity or interest rates
rise or fall according to the change in one or more specified underlying
instruments. Indexed securities may be positively or negatively indexed
(i.e., their value may increase or decrease if the underlying instrument
appreciates), and may have return characteristics similar to direct
investments in the underlying instrument or to one or more options on the
underlying instrument. Indexed securities may be more volatile than the
underlying instrument itself.
ILLIQUID INVESTMENTS. The fund may invest up to 10% of its assets in
illiquid investments. Under the supervision of the Board of Trustees, FMR
determines the liquidity of the fund's investments. The absence of a
trading market can make it difficult to ascertain a market value for
illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for the fund to sell them promptly at an acceptable price.
RESTRICTED SECURITIES. The fund may purchase securities which cannot be
sold to the public without registration under the Securities Act of 1933
(restricted securities). Unless registered for sale, these securities can
only be sold in privately negotiated transactions or pursuant to an
exemption from registration.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. In a repurchase agreement, the
fund buys a security at one price and simultaneously agrees to sell it back
at a higher price. The fund may also make securities loans to
broker-dealers and institutional investors, including FBSI. In the event of
the bankruptcy of the other party to either a repurchase agreement or a
securities loan, the fund could experience delays in recovering its cash or
the securities it lent. To the extent that, in the meantime, the value of
securities purchased had decreased, or the value of the securities lent had
increased, the fund could experience a loss. In all cases, FMR must find
the creditworthiness of the other party to the transaction satisfactory.
INTERFUND BORROWING PROGRAM. The fund has received permission from the SEC
to lend money to and borrow money from other funds advised by FMR or its
affiliates. Interfund loans and borrowings normally will extend overnight,
but can have a maximum duration of seven days. The fund will lend through
the program only when the returns are higher than those available at the
same time from other short-term instruments (such as repurchase
agreements), and will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. The fund will not lend more
than 5% of its assets to other funds, and will not borrow through the
program if, after doing so, total outstanding borrowings would exceed 15%
of total assets. Loans may be called on one day's notice, and the fund may
have to borrow from a bank at a higher interest rate if an interfund loan
is called or not renewed. Any delay in repayment to a lending fund could
result in a lost investment opportunity or additional borrowing costs.
FIDELITY SMALL CAP STOCK FUND
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION
DATED JUNE 28, 1993
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION. The fund's sales charge
may be reduced to reflect sales charges previously paid, or that would have
been paid absent a reduction as noted in the prospectus, in connection with
investments in other Fidelity funds. This includes reductions for
investments in prototype or prototype-like retirement plans sponsored by
FMR or FMR Corp., which are listed on page 13.
MANAGEMENT CONTRACT. Effective November 1, 1993, FMR agreed to voluntarily
adopt the revised group fee rate schedule shown below for purposes of
calculating the group fee component of the management fee. The revised
schedule provides for lower management fees as total assets under
management increase, and it will be presented to shareholders for approval
at the next shareholder meeting.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual Fee
Assets Rate Assets Rate
0 - $ 3 billion .520% $ 0.5 billion .5200%
3 - 6 .490 25 .4238
6 - 9 .460 50 .3823
9 - 12 .430 75 .3626
12 - 15 .400 100 .3512
15 - 18 .385 125 .3430
18 - 21 .370 150 .3371
21 - 24 .360 175 .3325
24 - 30 .350 200 .3284
30 - 36 .345 225 .3253
36 - 42 .340 250 .3223
42 - 48 .335 275 .3198
48 - 66 .325 300 .3175
66 - 84 .320 325 .3153
84 - 102 .315 350 .3133
102 - 138 .310
138 - 174 .305
174 - 228 .300
228 - 282 .295
282 - 336 .290
Over 336 .285
The unaudited Semi-Annual Report for the period June 28, 1993 (commencement
of operations) to October 31, 1993 is incorporated herein by reference.
SCSB-93-3
March 21, 1994
FIDELITY SMALL CAP STOCK FUND
A FUND FIDELITY COMMONWEALTH TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 28, 1993
This Statement is not a prospectus but should be read in conjunction with
the fund's current Prospectus (dated June 28, 1993). Please retain this
document for future reference. To obtain an additional copy of the
Prospectus, please call Fidelity Distributors Corporation at
1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations 2
Portfolio Transactions 9
Valuation of Portfolio Securities 11
Performance 11
Additional Purchase and Redemption Information 13
Distributions and Taxes 14
FMR 14
Trustees and Officers 15
Management Contract 16
Contracts With Companies Affiliated With FMR 18
Description of the Trust 18
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (Far East) Inc. (FMR Far East)
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
SCS-ptb-693
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in
values, net assets, or other circumstances will not be considered when
determining whether the investment complies with the fund's investment
policies and limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations set forth below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval. THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued
or guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than
33 1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to invest in securities of real
estate investment trusts that are not readily marketable, or to invest in
securities of real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and,
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 5% of the fund's net assets.
Included in that amount, but not to exceed 2% of the fund's net assets, may
be warrants that are not listed on the New York Stock Exchange or the
American Stock Exchange. Warrants acquired by the fund in units or
attached to securities are not subject to these restrictions.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page 7.
AFFILIATED BANK TRANSACTIONS. Pursuant to exemptive orders issued by the
Securities and Exchange Commission (SEC), the fund may engage in
transactions with banks that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. Such
transactions may be entered into only pursuant to procedures established
and periodically reviewed by the Board of Trustees. These transactions may
include repurchase agreements with custodian banks; purchases, as
principal, of short-term obligations of, and repurchase agreements with,
the 50 largest U.S. banks (measured by deposits); transactions in municipal
securities; and transactions in U.S. government securities with affiliated
banks that are primary dealers in these securities.
FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or
administer the day-to-day operations of any company. The fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that the fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
a company's direction or policies; seeking the sale or reorganization of
the company or a portion of its assets; or supporting or opposing third
party takeover efforts. This area of corporate activity is increasingly
prone to litigation and it is possible that the fund could be involved in
lawsuits related to such activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the risk of litigation
against the fund and the risk of actual liability if the fund is involved
in litigation. No guarantee can be made, however, that litigation against
the fund will not be undertaken or liabilities incurred.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed-upon price on an agreed-upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed-upon price, which obligation is
in effect secured by the value (at least equal to the amount of the
agreed-upon resale price and marked to market daily) of the underlying
security. The fund may engage in a repurchase agreement with respect to
any security in which it is authorized to invest. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delays and costs to the fund in
connection with bankruptcy proceedings), it is the fund's current policy to
limit repurchase agreement transactions to those parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.
SECURITIES LENDING. The fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows the fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may
be delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that the fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which the fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
LOWER-RATED DEBT SECURITIES. The fund may purchase lower-rated debt
securities (those rated Ba or lower by Moody's Investor Service, Inc. or BB
or lower by Standard and Poor's Corporation) that have poor protection with
respect to the payment of interest and repayment of principal, or may be in
default. These securities are often considered to be speculative and
involve greater risk of loss or price changes due to changes in the
issuer's capacity to pay. The market prices of lower-rated debt securities
may fluctuate more than those of higher-rated debt securities and may
decline significantly in periods of general economic difficulty, which may
follow periods of rising interest rates.
While the market for high-yield corporate debt securities has been in
existence for many years and has weathered previous economic downturns, the
1980s brought a dramatic increase in the use of such securities to fund
highly leveraged corporate acquisitions and restructurings. Past
experience may not provide an accurate indication of future performance of
the high yield bond market, especially during periods of economic
recession. In fact, from 1989 to 1991, the percentage of lower-rated debt
securities that defaulted rose significantly above prior levels, although
the default rate decreased in 1992.
The market for lower-rated securities may be thinner and less active than
that for higher-rated debt securities, which can adversely affect the
prices at which the former are sold. If market quotations are not
available, lower-rated debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing
high-yield corporate debt securities than is the case for securities for
which more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-rated debt
securities and the fund's ability to sell these securities.
Since the risk of default is higher for lower-rated debt securities, FMR's
research and credit analysis are an especially important part of managing
securities of this type held by the fund. In considering investments for
the fund, FMR will attempt to identify those issuers of high-yielding debt
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
The fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as security holder to
seek to protect the interests of security holders if it determines this to
be in the best interest of the fund's shareholders.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment). Investments currently considered
by the fund to be illiquid include repurchase agreements not entitling the
holder to payment of principal and interest within seven days,
over-the-counter options, non-government stripped fixed-rate
mortgage-backed securities, and restricted securities. Also, FMR may
determine some government-stripped fixed-rate mortgage backed securities,
loans and other direct debt instruments, and swap agreements to be
illiquid. However, with respect to over-the-counter options the fund
writes, all or a portion of the value of the underlying instrument may be
illiquid depending on the assets held to cover the option and the nature
and terms of any agreement the fund may have to close out the option before
expiration. In the absence of market quotations, illiquid investments are
priced at fair value as determined in good faith by a committee appointed
by the Board of Trustees. If through a change in values, net assets, or
other circumstances, the fund were in a position where more than 10% of its
net assets were invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, the fund may be obligated to pay all or part of
the registration expense and a considerable period may elapse between the
time it decides to seek registration and the time the fund may be permitted
to sell a security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, the fund might
obtain a less favorable price than prevailed when it decided to seek
registration of the security.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed by a
corporate, governmental, or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or other
receivables), or to other parties. Direct debt instruments involve a risk
of loss in case of default or insolvency of the borrower and may offer less
legal protection to the fund in the event of fraud or misrepresentation.
In addition, loan participations involve a risk of insolvency of the
lending bank or other financial intermediary. Direct debt instruments may
also include standby financing commitments that obligate the fund to supply
additional cash to the borrower on demand.
INDEXED SECURITIES. The fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
U.S. and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values
may decline substantially if the issuer's creditworthiness deteriorates.
Recent issuers of indexed securities have included banks, corporations, and
certain U.S. government agencies. Indexed securities may be more volatile
than their underlying instruments.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease the fund's exposure to long- or
short-term interest rates (in the U.S. or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such as
security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names. The fund is not
limited to any particular form of swap agreement if FMR determines it is
consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains
the right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines
elements of buying a cap and selling a floor.
Swap agreements will tend to shift the fund's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of the fund's investments and its share price and yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from the fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's
creditworthiness declined, the value of a swap agreement would be likely to
decline, potentially resulting in losses. The fund expects to be able to
eliminate its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
The fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If the
fund enters into a swap agreement on a net basis, it will segregate assets
with a daily value at least equal to the excess, if any, of the fund's
accrued obligations under the swap agreement over the accrued amount the
fund is entitled to receive under the agreement. If the fund enters into a
swap agreement on other than a net basis, it will segregate assets with a
value equal to the full amount of the fund's accrued obligations under the
agreement.
FOREIGN INVESTMENTS. Foreign investments can involve significant risks in
addition to the risks inherent in U.S. investments. The value of
securities denominated in or indexed to foreign currencies, and of
dividends and interest from such securities, can change significantly when
foreign currencies strengthen or weaken relative to the U.S. dollar.
Foreign securities markets generally have less trading volume and less
liquidity than U.S. markets, and prices on some foreign markets can be
highly volatile. Many foreign countries lack uniform accounting and
disclosure standards comparable to those applicable to U.S. companies, and
it may be more difficult to obtain reliable information regarding an
issuer's financial condition and operations. In addition, the costs of
foreign investing, including withholding taxes, brokerage commissions, and
custodial costs, are generally higher than for U.S. investments.
Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including
those involving the release of assets in advance of payment, may involve
increased risks in the event of a failed trade or the insolvency of a
broker-dealer, and may involve substantial delays. It may also be
difficult to enforce legal rights in foreign countries.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention.
There may be a greater possibility of default by foreign governments or
foreign government-sponsored enterprises. Investments in foreign countries
also involve a risk of local political, economic, or social instability,
military action or unrest, or adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate these potential events or
counter their effects.
The considerations noted above generally are intensified for investments in
developing countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities
markets that trade a small number of securities.
The fund may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject
to transfer restrictions may be marketable abroad, they may be less liquid
than foreign securities of the same class that are not subject to such
restrictions.
American Depositary Receipts and European Depositary Receipts (ADRs and
EDRs) are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed
for use in U.S. and European securities markets, respectively, ADRs and
EDRs are alternatives to the purchase of the underlying securities in their
national markets and currencies.
FOREIGN CURRENCY TRANSACTIONS. The fund may hold foreign currency deposits
from time to time, and may convert dollars and foreign currencies in the
foreign exchange markets. Currency conversion involves dealer spreads and
other costs, although commissions usually are not charged. Currencies may
be exchanged on a spot (i.e., cash) basis, or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. Forward contracts generally are traded in an inter bank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
The fund may use currency forward contracts to manage currency risks and to
facilitate transactions in foreign securities. The following discussion
summarizes the principal currency management strategies involving forward
contracts that could be used by the fund.
In connection with purchases and sales of securities denominated in foreign
currencies, the fund may enter into currency forward contracts to fix a
definite price for the purchase or sale in advance of the trade's
settlement date. This technique is sometimes referred to as a "settlement
hedge" or "transaction hedge." FMR expects to enter into settlement hedges
in the normal course of managing the fund's foreign investments. The fund
could also enter into forward contracts to purchase or sell a foreign
currency in anticipation of future purchases or sales of securities
denominated in foreign currency, even if the specific investments have not
yet been selected by FMR.
The fund may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For
example, if the fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return for
U.S. dollars to hedge against possible declines in the pound's value. Such
a hedge, sometimes referred to as a "position hedge," would tend to offset
both positive and negative currency fluctuations, but would not offset
changes in security values caused by other factors. The fund could also
hedge the position by selling another currency expected to perform
similarly to the pound sterling - for example, by entering into a forward
contract to sell Deutschemarks or European Currency Units in return for
U.S. dollars. This type of hedge, sometimes referred to as a "proxy
hedge," could offer advantages in terms of cost, yield, or efficiency, but
generally would not hedge currency exposure as effectively as a simple
hedge into U.S. dollars. Proxy hedges may result in losses if the currency
used to hedge does not perform similarly to the currency in which the
hedged securities are denominated.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the fund will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The fund will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of forward currency contracts will depend on FMR's skill in
analyzing and predicting currency values. Forward contracts may
substantially change the fund's investment exposure to changes in currency
exchange rates, and could result in losses to the fund if currencies do not
perform as FMR anticipates. For example, if a currency's value rose at a
time when FMR had hedged the fund by selling that currency in exchange for
dollars, the fund would be unable to participate in the currency's
appreciation. If FMR hedges currency exposure through proxy hedges, the
fund could realize currency losses from the hedge and the security position
at the same time if the two currencies do not move in tandem. Similarly,
if FMR increases the fund's exposure to a foreign currency, and that
currency's value declines, the fund will realize a loss. There is no
assurance that FMR's use of forward currency contracts will be advantageous
to the fund or that it will hedge at an appropriate time.
SHORT SALES "AGAINST THE BOX". If the fund enters into a short sale
against the box, it will be required to set aside securities equivalent in
kind and amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will incur
transaction costs, including interest expense, in connection with opening,
maintaining, and closing short sales against the box.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund intends to
file a notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets, before engaging in any purchases or sales of futures
contracts or options on futures contracts. The fund intends to comply with
Section 4.5 of the regulations under the Commodity Exchange Act, which
limits the extent to which the fund can commit assets to initial margin
deposits and option premiums.
In addition, the fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees
to purchase a specified underlying instrument at a specified future date.
When the fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's 500 Composite Stock
Price Index (S&P 500). Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the fund sells a
futures contract, by contrast, the value of its futures position will tend
to move in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of the fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of the fund, the fund may
be entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund
pays the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. The fund may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the fund assumes the obligation to pay
the strike price for the option's underlying instrument if the other party
to the option chooses to exercise it. When writing an option on a futures
contract the fund will be required to make margin payments to an FCM as
described above for futures contracts. The fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates the fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those
of writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
COMBINED POSITIONS. The fund may purchase and write options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the overall
position. For example, the fund may purchase a put option and write a call
option on the same underlying instrument, in order to construct a combined
position whose risk and return characteristics are similar to selling a
futures contract. Another possible combined position would involve writing
a call option at one strike price and buying a call option at a lower
price, in order to reduce the risk of the written call option in the event
of a substantial price increase. Because combined options positions
involve multiple trades, they result in higher transaction costs and may be
more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match the fund's current or
anticipated investments exactly. The fund may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which it typically invests
which involves a risk that the options or futures position will not track
the performance of the fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the fund's options or futures positions are poorly correlated
with its other investments, the positions may fail to produce anticipated
gains or result in losses that are not offset by gains in other
investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or futures
contract at any particular time. Options may have relatively low trading
volume and liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for the fund
to enter into new positions or close out existing positions. If the
secondary market for a contract is not liquid because of price fluctuation
limits or otherwise, it could prevent prompt liquidation of unfavorable
positions, and potentially could require the fund to continue to hold a
position until delivery or expiration regardless of changes in its value.
As a result, the fund's access to other assets held to cover its options or
futures positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter options (options not traded on
exchanges) generally are established through negotiation with the other
party to the option contract. While this type of arrangement allows the
fund greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
fund may purchase and sell currency futures and may purchase and write
currency options to increase or decrease its exposure to different foreign
currencies. The fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
the fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect
the fund against a price decline resulting from deterioration in the
issuer's creditworthiness. Because the value of the fund's
foreign-denominated investments changes in response to many factors other
than exchange rates, it may not be possible to match the amount of currency
options and futures to the value of the fund's investments exactly over
time.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply
with guidelines established by the SEC with respect to coverage of options
and futures strategies by mutual funds, and if the guidelines so require
will set aside appropriate liquid assets in a segregated custodial account
in the amount prescribed. Securities held in a segregated account cannot
be sold while the futures or option strategy is outstanding, unless they
are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the fund's assets
could impede portfolio management or the fund's ability to meet redemption
requests or other current obligations.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by FMR pursuant to authority contained in the management
contract. FMR is also responsible for the placement of transaction orders
for other investment companies and accounts for which it or its affiliates
act as investment adviser. In selecting broker-dealers, subject to
applicable limitations of the federal securities laws, FMR will consider
various relevant factors, including, but not limited to, the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions. Commissions for foreign investments
traded on foreign exchanges generally will be higher than for U.S.
investments and may not be subject to negotiation.
The fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or other accounts over which
FMR or its affiliates exercise investment discretion. Such services may
include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). The selection of such broker-dealers is
generally made by FMR (to the extent possible consistent with execution
considerations) in accordance with a ranking of broker-dealers determined
periodically by FMR's investment staff based upon the quality of such
research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the fund may be useful to FMR in rendering investment management
services to the fund or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the fund. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the fund and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the fund or shares of other Fidelity funds
to the extent permitted by law. FMR may use research services provided by
and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI)
and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries of FMR Corp., if
the commissions are fair, reasonable, and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, except in accordance with
regulations of the Securities and Exchange Commission. Pursuant to such
regulations, the Board of Trustees has approved a written agreement that
permits FBSI to effect portfolio transactions on national securities
exchanges and to retain compensation in connection with such transactions.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
fund and review the commissions paid by the fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund.
The fund's annualized turnover rate in its first fiscal period is not
expected to exceed 200%.
From time to time the Trustees will review whether the recapture for the
benefit of the fund of some portion of the brokerage commissions or similar
fees paid by the fund on portfolio transactions is legally permissible and
advisable. The fund seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review
whether recapture opportunities are available and are legally permissible
and, if so, to determine, in the exercise of their business judgment,
whether it would be advisable for the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to each fund. In some cases this system could have a detrimental
effect on the price or value of a security as far as the fund is concerned.
In other cases, however, the ability of the fund to participate in volume
transactions will produce better executions and prices for the fund. It is
the current opinion of the Trustees that the desirability of retaining FMR
as investment adviser to the fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Securities owned by the fund are appraised by various methods depending on
the market or exchange on which they trade. Securities traded on the New
York Stock Exchange or the American Stock Exchange are appraised at the
last sale price or, if no sale has occurred, at the closing bid price.
Securities traded on other exchanges are appraised as nearly as possible in
the same manner. Securities and other assets for which exchange quotations
are not readily available are valued on the basis of closing
over-the-counter bid prices, if available, 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 are
valued either at amortized cost or at original cost plus accrued interest,
both of which approximate current value.
Foreign securities are valued at the last sale price in the principal
market where they are traded or, if last sale prices are unavailable, at
the last bid price available prior to the time the fund's net asset value
is determined. Foreign security prices are furnished by quotation services
who express the value of securities in their local currency. FSC
translates the value of foreign securities from the local currency into
U.S. dollars at current exchange rates. Any changes in the value of
forward contracts due to exchange rate fluctuations are included in the
determination of net asset value.
PERFORMANCE
The fund may quote its performance in various ways. All performance
information supplied by the fund in advertising is historical and is not
intended to indicate future returns. The fund's share price and total
returns fluctuate in response to market conditions and other factors, and
the value of fund shares when redeemed may be more or less than their
original cost.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of the fund's returns, including the effect of reinvesting
dividends and capital gain distributions, and any change in the fund's net
asset value per share (NAV) over the period. Average annual returns are
calculated by determining the growth or decline in value of a hypothetical
historical investment in the fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period. For example, a cumulative return of 100% over
ten years would produce an average annual return of 7.18%, which is the
steady annual rate of return that would equal 100% growth on a compounded
basis in ten years. Average annual returns covering periods of less than
one year are calculated by determining the fund's total return for the
period, extending that return for a full year (assuming that performance
remains constant over the year), and quoting the result as an annual
return. While average annual returns are a convenient means of comparing
investment alternatives, investors should realize that the fund's
performance is not constant over time, but changes from year to year, and
that average annual returns represent averaged figures as opposed to the
actual year-to-year performance of the fund.
In addition to average annual returns, the fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. An example of this type of
illustration is given below. Total returns may be quoted on a before-tax
or after-tax basis, and may or may not take the fund's 3% sales charge into
account. Excluding the fund's sales charge from a total return calculation
produces a higher total return figure. Total returns and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using the fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by the fund
and reflects all elements of its return. Unless otherwise indicated, the
fund's adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. The fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving average
is the average of each day's adjusted closing NAV for a specified period.
Moving Average Activity Indicators combine adjusted closing NAVs from the
last business day of each week with moving averages for a specified period
to produce indicators showing when an NAV has crossed, stayed above, or
stayed below its moving average.
The fund may compare its performance to the record of the Russell 2000
Index (Russell 2000), Standard & Poor's 500 Composite Stock Price Index
(S&P 500), Dow Jones Industrial Average (DJIA), and the cost of living
(measured by the Consumer Price Index, or CPI) over the same period. The
S&P 500 and DJIA comparisons would show how the fund's total return
compared to the record of a broad average of common stock prices and a
narrower set of stocks of major industrial companies, respectively. Small
Cap Stock Fund's comparison to the Russell 2000 Index shows how the fund's
total returns compared to the record of a broad index of small
capitalization stocks. The fund has the ability to invest in securities
not included in either index, and its investment portfolio may or may not
be similar in composition to the indices. Figures for the Russell 2000,
S&P 500, and DJIA are based on the prices of unmanaged groups of stocks
and, unlike the fund's returns, their returns do not include the effect of
paying brokerage commissions and other costs of investing.
The fund's performance may be compared in advertising to the performance of
other mutual funds in general, or to the performance of particular types of
mutual funds, especially those with similar objectives. Such comparisons
may be expressed as mutual fund rankings prepared by Lipper Analytical
Services, Inc. ("Lipper," sometimes referred to as Lipper Analytical
Services), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. The Lipper performance analysis
ranks funds on the basis of total return, assuming reinvestment of
distributions, but does not take sales charges or redemption fees into
consideration, and is prepared without regard to tax consequences.
The Lipper General Equity Funds Average can be used to show how the fund's
performance compared to a broad-based set of equity mutual funds. The
Lipper General Equity Funds Average is an average of the total returns of
all equity mutual funds (excluding international funds and funds that
specialize in particular industries or types of investments) tracked by
Lipper. As of May 31, 1993, the average included 140 capital appreciation
funds, 424 growth funds, 181 small company growth funds, 314 growth and
income funds, and 90 equity-income funds.
Capital appreciation, growth, and small company growth funds generally have
objectives similar to the fund's; they usually invest principally in common
stocks with long-term growth as a primary goal. Growth and income and
equity-income funds tend to be more conservative in nature and usually
invest in a combination of common stocks, bonds, preferred stocks, and
other income-producing securities. Growth and income and equity-income
funds generally seek to provide their shareholders with current income as
well as growth of capital, unlike growth funds, which may or may not
produce income.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. For
example, Fidelity's FundMatchSM Program includes a workbook describing
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting; a questionnaire designed to help create a
personal financial profile; and an action plan offering investment
alternatives. Materials may also include discussions of Fidelity's three
asset allocation funds and Portfolio Advisory Services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
The fund may discuss its fund number, Quotron number, CUSIP number, and
current portfolio manager.
From time to time, the fund's performance also may be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. In addition, the
fund may quote financial or business publications and periodicals as they
relate to fund management, investment philosophy, and investment
techniques. Rankings that compare the performance of Fidelity funds to one
another in appropriate categories over specific periods of time may also be
quoted in advertising.
VOLATILITY. The fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may compare
these measures to those of other funds. Measures of volatility seek to
compare the fund's historical share price fluctuations or total returns to
those of a benchmark. Measures of benchmark correlation indicate how valid
a comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
MOMENTUM INDICATORS indicate the fund's price movements over specific
periods of time. Each point on the momentum indicator represents the
fund's percentage change in price movements over that period.
The fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at periodic
intervals, thereby purchasing fewer shares when prices are high and more
shares when prices are low. While such a strategy does not assure a profit
or guard against a loss in a declining market, the investor's average cost
per share can be lower than if fixed numbers of shares are purchased at the
same intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
The fund may be available for purchase through retirement plans or other
programs offering deferral of or exemption from income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $2,004 after ten years, assuming tax was deducted from the return
each year at a 28% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,147 after ten years, assuming tax was deducted at
a 28% rate from the deferred earnings at the end of the ten-year period.
As of April 30, 1993, FMR managed approximately $175 billion in equity fund
assets with over 11 million shareholders as defined and tracked by Lipper.
This figure represents the largest amount of equity fund assets under
management by a mutual fund investment adviser in the United States, making
FMR America's leading equity (stock) fund manager. From time to time, the
fund may use any of the above information in its advertising and sales
literature.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
As provided for in Rule 22d-1 under the Investment Company Act of 1940 (the
1940 Act), FDC exercises its right to waive the fund's 3% sales charge on
shares acquired through reinvestment of dividends and capital gain
distributions or in connection with a fund's merger with or acquisition of
any investment company or trust.
In addition, the fund's sales charges will not apply (1) if you buy shares
as part of an employee benefit plan (including the Fidelity-sponsored
403(b) and corporate IRA programs but otherwise as defined in the Employee
Retirement Income Security Act) maintained by a U.S. employer and having
more than 200 eligible employees, or a minimum of $3,000,000 in plan assets
invested in Fidelity mutual funds, or as part of an employee benefit plan
maintained by a U.S. employer that is a member of a parent-subsidiary group
of corporations (within the meaning of Section 1563(a)(1) of the Internal
Revenue Code, with "50%" substituted for "80%") any member of which
maintains an employee benefit plan having more than 200 eligible employees,
or a minimum of $3,000,000 in plan assets invested in Fidelity mutual
funds, or as part of an employee benefit plan maintained by a non-U.S.
employer having 200 or more eligible employees, or a minimum of $3,000,000
in plan assets invested in Fidelity mutual funds, the assets of which are
held in a bona fide trust for the exclusive benefit of employees
participating therein; (2) to shares purchased by an insurance company
separate account used to fund annuity contracts purchased by employee
benefit plans (including 403(b) programs, but otherwise as defined in the
Employee Retirement Income Security Act), which, in the aggregate, have
either more than 200 eligible employees or a minimum of $3,000,000 in
assets invested in Fidelity funds; (3) to shares in a Fidelity IRA account
purchased (including purchases by exchange) with the proceeds of a
distribution from an employee benefit plan provided that: (i) at the time
of distribution, the employer, or an affiliate (as described in exemption
(1) above) of such employer, maintained at least one employee benefit plan
that qualified for exemption (1) and that had at least some portion of its
assets invested in one or more mutual funds advised by FMR, or in one or
more accounts or pools advised by Fidelity Management Trust Company; and
(ii) the distribution is transferred from the plan to a Fidelity Rollover
IRA account within 60 days from the date of the distribution; (4) if you
are a charitable organization (as defined in Section 501(c)(3) of the
Internal Revenue Code) investing $100,000 or more; (5) if you purchase
shares for a charitable remainder trust or life income pool established for
the benefit of a charitable organization (as defined by Section 501(c)(3)
of the Internal Revenue Code); (6) if you are an investor participating in
the Fidelity Trust Portfolios program (these investors must make initial
investments of $100,000 or more in Trust Portfolios funds and must, during
the initial six month period, reach and maintain an aggregate balance of at
least $500,000 in all accounts and subaccounts purchased through the Trust
Portfolios program); (7) to shares purchased through Portfolio Advisory
Services; (8) if you are a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or full-time
employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity
Trustee or employee), the spouse of a Fidelity Trustee or employee, a
Fidelity Trustee or employee acting as custodian for a minor child, or a
person acting as trustee of a trust for the sole benefit of the minor child
of a Fidelity Trustee or employee; (9) if you are a bank trust officer,
registered representative, or other employee of a Qualified Recipient.
Qualified Recipients are securities dealers or other entities, including
banks and other financial institutions, who have sold the fund's shares
under special arrangements in connection with FDC's sales activities; or
(10) to shares purchased by contributions and exchanges to the following
prototype or prototype-like retirement plans sponsored by FMR Corp. or FMR
and that are marketed and distributed directly to plan sponsors or
participants, without any intervention or assistance from any intermediary
distribution channel: The Fidelity IRA, The Fidelity Rollover IRA, The
Fidelity SEP-IRA and SARSEP, The Fidelity Retirement Plan, Fidelity Defined
Benefit Plan, The Fidelity Group IRA, The Fidelity 403(b) Program, The
Fidelity Investments 401(a) Prototype Plan for Tax-Exempt Employers, and
The CORPORATEplan for Retirement (Profit Sharing and Money Purchase Plan).
FDC has chosen to waive the funds' sales charges in these instances because
of efficiencies involved in sales of shares to these investors.
The fund's sales charge may be reduced to reflect sales charges previously
paid in connection with investments in other Fidelity funds. (See the
fund's Prospectus for further information.)
The fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1993: New
Year's Day, Washington's Birthday (observed), Good Friday, Memorial Day
(observed), Independence Day (observed), Labor Day, Thanksgiving Day, and
Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the NYSE may modify its holiday schedule at any
time.
FSC normally determines the fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the SEC. To the
extent that portfolio securities are traded in other markets on days when
the NYSE is closed, the fund's NAV may be affected on days when investors
do not have access to the fund to purchase or redeem shares.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, a fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day notification requirement
may be waived if (i) the only effect of a modification would be to reduce
or eliminate an administration fee, redemption fee, or deferred sales
charge ordinarily payable at the time of an exchange, or (ii) the fund
suspends the redemption of the shares to be exchanged as permitted under
the 1940 Act or by the SEC, or the fund to be acquired suspends the sale of
its shares because it is unable to invest amounts effectively in accordance
with its investment objective and policies.
In the Prospectus, the fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of the fund's income may qualify for the
dividends-received deduction available to corporate shareholders to the
extent that the fund's income is derived from qualifying dividends.
Because the fund may earn other types of income, such as interest, income
from securities loans, non-qualifying dividends, and short-term capital
gains, the percentage of dividends from the fund that qualifies for the
deduction generally will be less than 100%. The fund will notify corporate
shareholders annually of the percentage of fund dividends that qualifies
for the dividends-received deduction. A portion of the fund's dividends
derived from certain U.S. government obligations may be exempt from state
and local taxation. Gains (losses) attributable to foreign currency
fluctuations are generally taxable as ordinary income, and therefore will
increase (decrease) dividend distributions. The fund will send each
shareholder a notice in January describing the tax status of dividends and
capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of the fund and such shares are held
six months or less and are sold at a loss, the portion of the loss equal to
the amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes.
Short-term capital gains distributed by the fund are taxable to
shareholders as dividends, not as capital gains. Distributions from
short-term capital gains do not qualify for the dividends-received
deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Because the fund does
not currently anticipate that securities of foreign issuers will constitute
more than 50% of its total assets at the end of its fiscal year,
shareholders should not expect to claim a foreign tax credit or deduction
on their federal income tax returns with respect to foreign taxes withheld.
TAX STATUS OF THE FUND. The fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
the fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. The fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some forward currency contracts, futures contracts, and options
are included in this 30% calculation, which may limit the fund's
investments in such instruments.
If the fund purchases shares in certain foreign investment entities,
defined as passive foreign investment companies (PFICs) in the Internal
Revenue Code, it may be subject to U.S. federal income tax on a portion of
any excess distribution or gain from the disposition of such shares.
Interest charges may also be imposed on the fund with respect to deferred
taxes arising from such distributions or gains.
The fund is treated as a separate entity from the other funds of Fidelity
Commonwealth Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on distributions received from the fund. Investors should
consult their tax advisers to determine whether the fund is suitable to
their particular tax situation.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: FSC, which is the
transfer and shareholder servicing agent for certain of the funds advised
by FMR; Fidelity Investments Institutional Operations Company, which
performs shareholder servicing functions for certain institutional
customers; and Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory, and administrative services to retirement plans and corporate
employee benefit accounts. FMR U.K. and FMR Far East, both wholly owned
subsidiaries of FMR formed in 1986, supply investment research, and may
supply portfolio management services, to FMR in connection with certain
funds advised by FMR. Analysts employed by FMR, FMR U.K., and FMR Far East
research and visit thousands of domestic and foreign companies each year.
FMR Texas Inc., a wholly owned subsidiary of FMR formed in 1989, supplies
portfolio management and research services in connection with certain money
market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. Unless
otherwise noted, the business address of each Trustee and officer is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. Those Trustees who are "interested persons" (as defined in the
Investment Company Act of 1940) by virtue of their affiliation with either
the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Prior to his retirement in March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Bonneville Pacific
Corporation (independent power, 1989) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, 340 E. 64th Street #22C, New York, NY, Trustee (1992).
Prior to her retirement in September of 1991, Mrs. Davis was the Senior
Vice President of Corporate Affairs of Avon Products, Inc. She is
currently a Director of BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail
stores, 1990), and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she serves as a Director
of the New York City Chapter of the National Multiple Sclerosis Society,
and is a member of the Advisory Council of the International Executive
Service Corps. and the President's Advisory Council of The University of
Vermont School of Business Administration (1988).
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 30195 Chagrin Blvd., Suite 104W, Pepper Pike, OH, Trustee
(1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief
Executive Officer of LTV Steel Company. Prior to May 1990, he was Director
of National City Corporation (a bank holding company) and National City
Bank of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation (1988), Hyster-Yale Materials Handling, Inc. (1989), and
RPM, Inc. (manufacturer of chemical products, 1990). In addition, he
serves as a Trustee of First Union Real Estate Investments; Chairman of the
Board of Trustees and a member of the Executive Committee of the Cleveland
Clinic Foundation, a Trustee and a member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Greenwich, CT, Trustee, is a Professor
at Columbia University Graduate School of Business and a financial
consultant. Prior to 1987, he was Chairman of the Financial Accounting
Standards Board. Mr. Kirk is a Director of General Re Corporation
(reinsurance), the National Arts Stabilization Fund, Greenwich Hospital
Association (1989), and Valuation Research Corp. (appraisals and
valuations, 1993).
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction, 1988). In addition, he serves as a Trustee
of Boston College, Massachusetts Eye & Ear Infirmary, Historic
Deerfield (1989) and Society for the Preservation of New England
Antiquities, and as an Overseer of the Museum of Fine Arts of Boston
(1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), and Commercial Intertech Corp. (water treatment equipment, 1992).
In addition, he serves as a Director for United Way Services of Greater
Cleveland, a member of the Executive Committee of the Weatherhead School of
Management, and as a Trustee of The Center for Economic Education.
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee (1988).
Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer).
He is also a Trustee of Rensselaer Polytechnic Institute and of Corporate
Property Investors and a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee (1988), is President of The Wales Group, Inc. (management and
financial advisory services). Prior to retiring in 1987, Mr. Williams
served as Chairman of the Board of First Wachovia Corporation (bank holding
company), and Chairman and Chief Executive Officer of The First National
Bank of Atlanta and First Atlanta Corporation (bank holding company). He
is currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software, 1988), Georgia Power Company (electric utility), Gerber
Alley & Associates, Inc. (computer software), National Life Insurance
Company of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
BERTRAM H. WITHAM, 89 Fox Hill Road, Stamford, CT, Trustee, is a consultant
(Treasurer until his retirement in 1978) to IBM Corp. He is also a
Director of Systems Control Technology, Inc. (computer software).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Vice President and General Counsel of FMR,
Vice President-Legal of FMR Corp., and Clerk of FDC.
ROBERT H. MORRISON, Manager, Security Transactions, is an employee of FMR.
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the fund based on their final year's basic trustee fees and
length of service. Currently, Messrs. Robert L. Johnson, William R.
Spaulding, and David L. Yunich participate in the program.
As of the date of this Statement of Additional Information, FMR owns the
majority of the outstanding shares of the fund.
MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments, and
compensates all officers of the trust, all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the trust or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of the fund. These services include providing facilities
for maintaining the fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
law; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Board of Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, the fund pays all of its expenses, without limitation, that are not
assumed by those parties. The fund pays for typesetting, printing, and
mailing proxy material to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Although the fund's
management contract provides that the fund will pay for typesetting,
printing, and mailing prospectuses, statements of additional information,
notices, and reports to existing shareholders, pursuant to the trust's
transfer agent agreement with FSC, FSC bears the cost of providing these
services to existing shareholders. Other expenses paid by the fund include
interest, taxes, brokerage commissions, the fund's proportionate share of
insurance premiums and Investment Company Institute dues, and the costs of
registering shares under federal and state securities laws. The fund is
also liable for such nonrecurring expenses as may arise, including costs of
any litigation to which the fund may be a party, and any obligation it may
have to indemnify the trust's officers and Trustees with respect to
litigation.
FMR is the fund's manager pursuant to a management contract dated June 17,
1993, which was approved by FMR, then the sole shareholder, on June 21,
1993 For the services of FMR under the contract, the fund pays FMR a
monthly management fee composed of the sum of two elements: a basic fee
and a performance adjustment based on a comparison of the fund's
performance to that of the Russell 2000 Index (Russell 2000).
COMPUTING THE BASIC FEE. The fund's basic fee rate is composed of two
elements: a group fee rate and an individual fund fee rate. The group fee
rate is based on the monthly average net assets of all of the registered
investment companies with which FMR has management contracts and is
calculated on a cumulative basis pursuant to the graduated schedule shown
below. Also shown is the effective annual fee rate at various levels of
group net assets. For example, the effective annual fee rate at $195
billion of group net assets - their approximate level for April 1993 - was
.3299%, which is the weighted average of the respective fee rates for each
level of group net assets up to that level.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Effective
Group Annualized Net Annual
Assets Rate Assets Fee Rate
Up to $3 billion .520% $ 0.5 billion .5200%
3 - 6 .490 10 .4840
6 - 9 .460 20 .4398
9 - 12 .430 30 .4115
12 - 15 .400 40 .3944
15 - 18 .385 50 .3823
18 - 21 .370 60 .3728
21 - 24 .360 70 .3656
24 - 30 .350 80 .3599
30 - 36 .345 90 .3552
36 - 42 .340 100 .3512
42 - 48 .335 110 .3475
48 - 66 .325 120 .3444
66 - 84 .320 130 .3417
84 - 102 .315 140 .3394
102 - 138 .310 150 .3371
138 - 174 .305 160 .3351
Over 174 .300 170 .3333
180 .3316
190 .3299
200 .3284
The individual fund fee rate is .35%. Based on the average net assets of
funds advised by FMR for April 30, 1993, the annual basic fee rate would be
calculated as follows:
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate
.3299% + .35% = .6799%
One twelfth (1/12) of this annual basic fee rate is then applied to the
fund's average net assets for the current month, giving a dollar amount
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward
or downward adjustment, depending upon whether, and to what extent, the
fund's investment performance for the performance period exceeds, or is
exceeded by, the record of the Russell 2000 over the same period. The
performance period will commence with the first day of the first full month
of operation following the fund's commencement of operations. Starting
with the twelfth month, the performance adjustment will take effect. Each
month subsequent to the twelfth month, a new month will be added to the
performance period until the performance period equals 36 months.
Thereafter, the performance period will consist of the most recent month
plus the previous 35 months. Each percentage point of difference (up to a
maximum difference of + 10) is multiplied by a performance adjustment rate
of .02%. Thus, the maximum annualized adjustment rate is + .20%. This
performance comparison is made at the end of each month. One twelfth
(1/12) of this rate is then applied to the fund's average net assets for
the entire performance period, giving a dollar amount which will be added
to (or subtracted from) the basic fee.
The fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if reinvested in
fund shares at the net asset value as of the record date for payment. The
record of the Russell 2000 is based on change in value and is adjusted for
any cash distributions from the companies whose securities compose the
Russell 2000.
Because the adjustment to the basic fee is based on the fund's performance
compared to the investment record of the Russell 2000, the controlling
factor is not whether the fund's performance is up or down per se, but
whether it is up or down more or less than the record of the Russell 2000.
Moreover, the comparative investment performance of the fund is based
solely on the relevant performance period without regard to the cumulative
performance over a longer or shorter period of time.
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating the fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISERS. On June 17, 1993, FMR entered into sub-advisory agreements
with FMR U.K. and FMR Far East, pursuant to which FMR U.K. and FMR Far East
supply FMR with investment research and recommendations concerning foreign
securities for the benefit of the fund. The sub-advisory agreements
provide that FMR will pay fees to FMR U.K. and FMR Far East equal to 110%
and 105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in
connection with each agreement, said costs to be determined in relation to
the assets of the fund that benefits from the services of the sub-advisers.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC is transfer, dividend disbursing, and shareholders' servicing agent for
the fund. Under the trust's contract with FSC, the fund pays an annual fee
of $25.50 per basic retail account with a balance of $5,000 or more, $15.00
per basic retail account with a balance of less than $5,000, and a
supplemental activity charge of $5.61 for monetary transactions. These
fees and charges are subject to annual cost escalation based on postal rate
changes and changes in wage and price levels as measured by the National
Consumer Price Index for Urban Areas. With respect to certain institutional
client master accounts, the fund pays FSC a per account fee of $95.00 and
monetary transaction charges of $20.00 or $17.50, depending on the nature
of services provided. Fees for certain institutional retirement plan
accounts are based on the net assets of all such accounts in the fund.
Under the contract, FSC pays out-of-pocket expenses associated with
providing transfer agent services. In addition, FSC bears the expense of
typesetting, printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
shareholders, except proxy statements.
The trust's contract with FSC also provides that FSC will perform the
calculations necessary to determine the fund's net asset value per share
and dividends and maintain the fund's accounting records. The fee rates
are based on the fund's average net assets, specifically, .06% for the
first $500 million of average net assets and .03% for average net assets in
excess of $500 million. The fee is limited to a minimum of $45,000 and a
maximum of $750,000 per year. FSC also receives fees for administering the
fund's securities lending program. Securities lending fees are based on
the number and duration of individual securities loans.
The fund has a distribution agreement with FDC, a Massachusetts corporation
organized on July 18, 1960. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The distribution agreement calls for FDC to
use all reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FDC.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Small Cap Stock Fund is a fund of Fidelity
Commonwealth Trust, an open-end management investment company organized as
a Massachusetts business trust on November 8, 1974. On September 1, 1987
the trust's name was changed from Fidelity Thrift Trust to Fidelity
Intermediate Bond Fund. On February 16, 1990, the trust's name was changed
from Fidelity Intermediate Bond Fund to Fidelity Commonwealth Trust.
Currently there are three funds of the trust: Fidelity Intermediate Bond
Fund, Fidelity Market Index Fund, and Fidelity Small Cap Stock Fund. The
Declaration of Trust permits the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to
be allocated in proportion to the asset value of the respective funds,
except where allocations of direct expense can otherwise be fairly made.
The officers of the trust, subject to the general supervision of the Board
of Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or the Trustees include a provision limiting the obligations created
thereby to the trust and its assets. The Declaration of Trust provides for
indemnification out of each fund's property of any shareholder held
personally liable for the obligations of the fund. The Declaration of
Trust also provides that each fund shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which a fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the trust or a fund may,
as set forth in the Declaration of Trust, call meetings of the trust or a
fund for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose of
voting on removal of one or more Trustees. The trust or any fund may be
terminated upon the sale of its assets to another open-end management
investment company, or upon liquidation and distribution of its assets, if
approved by vote of the holders of a majority of the outstanding shares of
the trust or the fund. If not so terminated, the trust and its funds will
continue indefinitely.
CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of the fund. The custodian is
responsible for the safekeeping of the fund's assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of the fund or in deciding which
securities are purchased or sold by the fund. The fund may, however,
invest in obligations of the custodian and may purchase securities from or
sell securities to the custodian.
FMR, its officers and directors, its affiliated companies and the trust's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. The Boston branch of the fund's custodian leases its office space
from an affiliate of FMR at a lease payment which, when entered into, was
consistent with prevailing market rates. Transactions that have occurred
to date include mortgages and personal and general business loans. In the
judgment of FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand, One Post Office Square, Boston,
Massachusetts serves as the trust's independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax,
and related services.
LG930770015
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) 1. The unaudited semi-annual financial statement for Fidelity Small
Cap Stock Fund for the fiscal period ended October 31, 1993 is incorporated
by reference into the fund's Statement of Addititonal Information and filed
herein as Exhibit 24 (a) (1).
(b) Exhibits
1 (a) Declaration of Trust, dated November 8, 1974, is incorporated
herein by reference to Exhibit 1 to the initial Registration Statement No.
2-52322.
(b) Amended and Restated Declaration of Trust, dated December 1, 1986, is
incorporated herein by reference to Exhibit 1(b) to Post-Effective
Amendment No. 30.
(c) Supplement to the Declaration of Trust, dated September 1, 1987, is
incorporated herein by reference to Exhibit 1(c) to Post-Effective
Amendment No. 39.
(d) Supplement to the Declaration of Trust, dated October 18, 1989, is
incorporated herein by reference to Exhibit 1(c) to Post-Effective
Amendment No. 38.
(e) Supplement to the Declaration of Trust, dated February 16, 1990, is
incorporated herein by reference to Exhibit 1(e) to Post-Effective
Amendment No. 39.
2. (a) Bylaws of Registrant, as currently in effect, dated November 8,
1974, are incorporated herein by reference to Exhibit 2 to the initial
Registration Statement No. 2-52322.
(b) Supplement to Bylaws of Registrant, dated October 18, 1989, is
incorporated herein by reference to Exhibit 2(b) to Post-Effective
Amendment No. 39.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract between Fidelity Commonwealth Trust, on behalf
of Fidelity Intermediate Bond Fund, and Fidelity Management & Research
Company, dated September 1, 1992, is incorporated herein by reference to
Exhibit 5(a) to Post-Effective Amendment 46.
(b) Management Contract between Fidelity Commonwealth Trust, on behalf of
Spartan Market Index Fund, and Fidelity Management & Research Company,
dated February 15, 1990, is incorporated herein by reference to Exhibit
5(b) to Post-Effective Amendment No. 39.
(c) Form of Management Contract between Fidelity Commonwealth Trust, on
behalf of Fidelity Small Cap Stock Fund, and Fidelity Management &
Research Company is incorporated herein by reference to Exhibit 5 (c) to
Post-Effective Amendment No. 47.
(d) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc., on behalf of
Fidelity Intermediate Bond Fund, dated November 1, 1989, is incorporated
herein by reference to Exhibit 5(c) to Post-Effective Amendment No. 39.
(e) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on behalf of
Fidelity Intermediate Bond Fund, dated November 1, 1989, is incorporated
herein by reference to Exhibit 5(d) to Post-Effective Amendment No. 39.
(f) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (U.K.) Inc., on
behalf of Fidelity Small Cap Stock Fund, is incorporated herein by
reference to Exhibit 5(f) to Post-Effective Amendment No. 47.
(g) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (Far East) Inc., on
behalf of Fidelity Small Cap Stock Fund, is incorporated herein by
reference Exhibit 5(g) to Post-Effective Amendment No. 47.
6. (a) General Distribution Agreement between Fidelity Intermediate Bond
Fund and Fidelity Distributors Corporation, dated April 1, 1987, is
incorporated herein by reference to Exhibit 6 to Post-Effective Amendment
No. 33.
(b) Amendment to General Distribution Agreement between Registrant and
Fidelity Distributors Corporation, dated January 1, 1988, is incorporated
herein by reference to Exhibit 6(b) to Post-Effective Amendment No. 34.
(c) General Distribution Agreement between Spartan Market Index Fund and
Fidelity Distributors Corporation, dated February 15, 1990, is incorporated
herein by reference to Exhibit 6(c) to Post-Effective Amendment No. 41.
(d) Form of General Distribution Agreement between Fidelity Small Cap
Stock Fund and Fidelity Distributors Corporation, is incorporated herein by
reference to Exhibit 6(d) to Post-Effective Amendment No. 47.
7. Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, is incorporated herein by
reference to Exhibit 7 to Post-Effective Amendment No. 43.
8. (a) Custodian Agreement between Fidelity Commonwealth Trust and Brown
Brothers & Co., on behalf of Spartan Market Index Fund, dated February
14, 1990, is incorporated herein by reference to Exhibit 8(c) to
Post-Effective Amendment No. 41.
(b) Custodian Agreement between Fidelity Commonwealth Trust and the Bank
of New York, on behalf of Fidelity Intermediate Bond Fund, dated July 18,
1991, is incorporated herein by reference to Exhibit 8(d) to Post-Effective
Amendment No. 43.
(c) Form of Appendix A to the Custodian Agreement between Fidelity
Commonwealth Trust and Brown Brothers Harriman & Co., on behalf of
Fidelity Small Cap Stock Fund, is incorporated herein by reference to
Exhibit 8(c) to Post-Effective Amendment No. 47.
9. (a) Amended Service Agreement between Registrant, FMR Corp., and
Fidelity Service Co., dated June 1, 1989, is incorporated herein by
reference to Exhibit 9(b) to Post-Effective Amendment No. 38.
(b) Schedules A (transfer, dividend disbursing and shareholders'
service); B (pricing and bookkeeping); and C (securities lending
transactions), dated June 1, 1989, pertaining to Fidelity Intermediate Bond
Fund are incorporated herein by reference to Exhibit 9(c) to Post-Effective
Amendment No. 38.
(c) Schedules A (transfer, dividend disbursing and shareholders'
service); B (pricing and bookkeeping); and C (securities lending
transactions, dated February 15, 1990, pertaining to Spartan Market Index
Fund are incorporated herein by reference to Exhibit 9(d) to Post-Effective
Amendment No. 40.
(d) Form of Schedules A (transfer, dividend disbursing and shareholders'
service); B (pricing and bookkeeping); and C (securities lending
transactions, pertaining to Fidelity Small Cap Stock Fund are incorporated
herein by reference to Exhibit 9(d) to Post-Effective Amendment No. 47.
10. Not applicable.
11. Not applicable.
12. Not applicable.
13. Not applicable.
14. (a) Individual Retirement Account Custodial Agreement and Disclosure
Statement, as currently in effect, is incorporated herein by reference to
Exhibit 14(a) to Post-Effective Amendment No. 41.
(b) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(b)
to Post-Effective Amendment No. 41.
(c) Defined Benefit Pension Plan and Trust, as currently in effect, is
incorporated herein by reference to Exhibit 14(c) to Post-Effective
Amendment No. 41.
(d) 403(b)(7) Custodial Account Agreement, as currently in effect, is
incorporated herein as Exhibit 14(d) to Post-Effective Amendment No. 42.
(e) Group IRA, the Custodial Agreement and Disclosure Statement, as
currently in effect, is incorporated herein by reference to Exhibit 14(e)
to Post-Effective Amendment No. 41.
(f) Fidelity Master Plan for Savings and Investments Adoption Agreement,
as currently in effect, is incorporated herein by reference to Exhibit
14(f) to Post-Effective Amendment No. 42.
(g) Fidelity Investment 401(a) Prototype Plan for Tax-Exempt Employers,
Basic Plan Document No. 3, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) to Post-Effective Amendment No. 41.
15. (a) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Thrift Trust is incorporated herein by reference to Exhibit 15 to
Post-Effective Amendment No. 30.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Market Index Fund is incorporated herein by reference to Exhibit 15(b) to
Post-Effective Amendment No. 39.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Small Cap Stock Fund is incorporated herein by reference to Exhibit 15(c)
to Post-Effective Amendment No. 47.
16 (a) A schedule for computation of performance quotations for Fidelity
Intermediate Bond Fund is incorporated herein by reference to Exhibit 16 to
Post-Effective Amendment No. 34.
(b) A schedule for computation of performance quotations for Spartan
Market Index Fund is incorporated herein by reference as Exhibit 16(b) to
Post-Effective Amendment No. 38.
(c) A schedule for computation of performance quotations for Fidelity
Small Cap Stock Fund is incorporated herein by reference to Exhibit 16(c)
to Post-Effective Amendment No. 47.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the boards of other
funds advised by FMR, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these
funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities
February 28, 1994
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Intermediate Bond Fund 365,291
Fidelity Market Index Fund 13,539
Fidelity Small Cap Stock Fund 58,798
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research (Far East) Inc.;
President and Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR;
Corporate Preferred Group Leader.
Will Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial Officer of
the Fidelity funds; Treasurer of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised
by FMR. Prior to assuming the position as Treasurer he
was Senior Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Income/Growth Group
Leader and International Group Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income
Group Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund advised by
FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income
Division Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of
FMR; Vice President, Legal of FMR Corp.; and Secretary
of funds advised by FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the
Executive Committee of FMR; Chief Executive Officer of FMR
Corp.; Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc., and Fidelity Management &
Research (Far East) Inc.; President and Trustee of funds advised
by FMR.
J. Gary Burkhead President and Director of FMR U.K.; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of
Fidelity Management & Research (Far East) Inc.; Director
of Worldwide Research of FMR.
Charles F. Dornbush Treasurer of FMR U.K.; Treasurer of Fidelity Management
& Research (Far East) Inc.; Treasurer of FMR Texas Inc.,
Senior Vice President and Chief Financial Officer of the Fidelity
funds.
David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management &
Research (Far East) Inc.; Secretary of FMR Texas Inc.
</TABLE>
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East)
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Far East; President of
FMR; Managing Director of FMR Corp.; President and a
Director of FMR Texas Inc. and Fidelity Management
& Research (U.K.) Inc.; Senior Vice President and
Trustee of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice
President of Fidelity Management & Research
(U.K.) Inc.; Director of Worldwide Research of FMR.
William R. Ebsworth Vice President of FMR Far East.
Bill Wilder Vice President of FMR Far East (1993).
Charles F. Dornbush Treasurer of FMR Far East; Treasurer of Fidelity
Management & Research (U.K.) Inc.; Treasurer of
FMR Texas Inc.; Senior Vice President and Chief
Financial Officer of the Fidelity funds.
David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management
& Research (U.K.) Inc.; Secretary of FMR Texas
Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109, or the funds'
custodians, The Bank of New York, 110 Washington Street, New York,
N.Y.(Fidelity Intermediate Bond Fund), and United Missouri Bank, N.A., 1010
Grand Avenue, Kansas City, MO (Fidelity Market Index Fund and Fidelity
Small Cap Stock Fund).
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant on behalf of Fidelity Intermediate Bond Fund, Fidelity
Market Index Fund, and Fidelity Small Cap Stock Fund undertake, provided
the information required by Item 5a is contained in the annual report, to
furnish each person to whom a prospectus has been delivered, upon their
request and without charge, a copy of the Registrant's latest annual report
to shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 49 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 11th day
of March 1994.
FIDELITY COMMONWEALTH TRUST
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee March 14, 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer March 14, 1994
Gary L. French
/s/J. Gary Burkhead Trustee March 14, 1994
J. Gary Burkhead
/s/Ralph F. Cox * Trustee March 14, 1994
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee March 14, 1994
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee March 14, 1994
Richard J. Flynn
/s/E. Bradley Jones * Trustee March 14, 1994
E. Bradley Jones
/s/Donald J. Kirk * Trustee March 14, 1994
Donald J. Kirk
/s/Peter S. Lynch * Trustee March 14, 1994
Peter S. Lynch
/s/Edward H. Malone * Trustee March 14, 1994
Edward H. Malone
/s/Gerald C. McDonough* Trustee March 14, 1994
Gerald C. McDonough
/s/Thomas R. Williams * Trustee March 14, 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/Edward H. Malone
J. Gary Burkhead Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity, all
Pre-Effective Amendments to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
Exhibit 24(a) 1
(2_FIDELITY_LOGOS)FIDELITY
SMALL CAP STOCK
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1993
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
cautions.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 5 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT SUMMARY 8 A summary of major investments.
INVESTMENTS 9 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 37 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 41 Footnotes 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. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
As 1993 draws to a close and the stock market continues to climb, many of
you may be wondering if this is the top and what you should do. Making a
sound decision requires some perspective on the market and an understanding
of its risks.
Those of us who invested in the stock market during the '80s benefited from
a period of unusually good performance. During that time, the Standard
& Poor's 500 index - a common proxy for the U.S. stock market -
returned 18% on average each year. This was far above the market's average
annual return since 1926 of 10%. Although the S&P 500 was up 7.62% for
1992, that was less than half of what we saw in the '80s and below the
market's long-term average. We believe this could be an example of the more
modest returns we might see in the '90s.
It's impossible to predict where the market will go from here. What we do
know is that historically the market has on average had a decline of 10% or
more every two years. We haven't seen a 10% drop in the market since
October 1990. Furthermore, stocks today are not cheap. Current valuations -
yardsticks like high price-to-earnings ratios and low dividend yields - are
at extremes. Low interest rates and the record amount of money that has
poured into stock funds in 1993 have helped push the market higher. As real
estate investments have become less attractive, many people have instead
put money in stocks, also helping to fuel the market's rise.
When there is this much uncertainty about what is next, a long-term,
disciplined approach to the stock market seems to make the most sense. A
good definition of long term is a minimum of five years. If you leave your
money invested that long, you should be able to ride out the market's
declines. A regular investment plan - investing a certain amount of money
each month or quarter - should also help you avoid buying exclusively at
the peak of the market. While this strategy can't protect you from a loss
in a declining market, and won't guarantee a profit, it should over time
help lower the average cost of your purchase. The key is that you follow
your plan during both market ups and downs.
No matter what happens in the market, we believe you can benefit from
practicing these investment principles. If we can help, please call us at
1-800-544-8888.
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
PERIOD ENDED OCTOBER 31, 1993 LIFE OF
FUND
Small Cap Stock 7.40%
CUMULATIVE TOTAL RETURNS reflect the fund's actual performance over a set
period - in this case, since the fund began 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. Once the fund has a longer record, you may
want to compare it to the Russell 2000 index - a broad measure of the
performance of small company stocks. You may also want to look at the
performance of the average small company growth fund, as tracked by Lipper
Analytical Services. Both benchmarks include reinvested dividends and
capital gains, if any. They will appear in the fund's next report six
months from now.
AVERAGE ANNUAL RETURNS and the growth of a hypothetical $10,000
INVESTMENT in the fund will also appear in the next report once the fund is
older.
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 PERFORM?
A. Because the record is so brief, the performance numbers don't tell us
very much. That said, the fund's total return from the day it opened on
June 28, 1993 through October 31, 1993 was 7.40%. The best available
comparison with its peers covers the period from the last day of June
through the end of October. During that time, Small Cap Stock's total
return was again 7.40%, compared to 10.08% for the average small company
growth fund, according to Lipper Analytical Services.
Q. GRANTED, THE FUND IS BARELY FOUR MONTHS OLD. STILL, WHY DID IT LAG ITS
COMPETITORS?
A. The fund's high cash position -
itself the result of the fund's popularity - was a factor. There were
periods last summer when the fund was taking in $30 million a day in new
investments. By the end of October, total assets had ballooned past $600
million. Some cash I invested temporarily in S&P 500 futures contracts.
They give the fund some exposure to broad movements in the market, since
their performance depends on where the index stands when the contracts
expire. But as time goes on, shareholders should expect the percentage of
cash and futures contracts in the fund - 19.8% and 10.4%, respectively, at
the end of October - to decline.
Q. HOW IS THE FUND DIFFERENT FROM OTHERS THAT INVEST IN SMALL COMPANIES?
A. The fund relies in part on a set of sophisticated quantitative models
called a "neural network" to identify attractive stocks. A neural network
is a little like the human brain. It "learns" by constantly building on its
store of knowledge, reexamining old patterns in light of new data and
searching for ever more reliable predictors of performance. One clear
advantage of a neural network is the sheer volume of data it can digest. It
can plow through data on 2,500 stocks and generate recommendations in a
matter of seconds. That's an especially big advantage in the small-cap
market, where so many stocks aren't closely watched by research analysts.
Q. WHAT STOCKS DO THE MODELS PREFER?
A. While the models look at many variables, most stocks they recommend
share certain qualities, including a low price-to-earnings ratio compared
to the broader market - in other words, the stocks are cheap; and offer
superior prospects for short-term earnings growth.
Q. FINANCE STOCKS ARE YOUR LARGEST SECTOR - MORE THAN 13% OF THE FUND.
AREN'T THEY AT RISK IF INTEREST RATES SHOULD RISE?
A. Not as much as some other stocks, in my view. The popular press views
them as interest-rate sensitive. The models suggest otherwise, that in fact
banks stocks may be driven more by changes in the level of industrial
production than changes in interest rates. Beyond that, most of my finance
stocks - nearly 6% - are insurance companies, which I consider defensive.
If rates rise, they may outperform the market.
Q. DOESN'T AN INVESTMENT STRATEGY THAT FOCUSES ON CHEAP STOCKS CAUSE YOU TO
MISS OPPORTUNITIES IN WHAT, AFTER ALL, IS A VERY VOLATILE MARKET?
A. Occasionally, it does. On the other hand, I think 70% of the battle is
avoiding disasters. The computer models help me do that by sidestepping
expensive stocks and unloading cheap stocks once they become expensive. In
fact, most of the trading I do starts with selling rather than buying. I'll
sell a stock when it begins to weaken, and then look for some place better
to invest the proceeds. So, spectacular gains are the exception in this
fund, not the rule.
Q. WERE THERE ANY HAPPY EXCEPTIONS DURING THE PERIOD?
A. The health-care technology stock HBO has done very well. The company
designs software for hospitals that helps them manage their business. As it
happens, there are several technology names in the top-10, including
Chipcom, a computer networker, whose performance has been flat so far; and
Dallas Semiconductor, a chip-maker. As a group, technology stocks make up
the second largest sector in the fund - after finance - at 13% of
investments. However, that's a little misleading. The fund's benchmark, the
Russell 2000 index of small company stocks, is close to 20% technology
stocks. I'm actually downplaying technology.
Q. WHY?
A. Because many of the stocks are expensive. That makes them unattractive
to the models. What the fund will not do is buy expensive stocks simply
because the market psychology favors them. Investment fads and other
aspects of market psychology aren't quantifiable. The model takes no notice
of them. Because of that, shareholders should understand that this fund is
unlikely to be the top performing fund in its peer group over a short
investment horizon. By the same token, it should always be competitive.
That's because by paying strict attention to basic measures of a company's
health, I think we can outperform more volatile funds over the long term,
no matter what shifts may occur in market psychology.
Q. WHAT'S YOUR OUTLOOK?
A. The point of using models is to try to reconcile as many factors as
possible, and learn which ones in combination are best for forecasting
stock-price moves. As I've said, more often than not that points me toward
cheap stocks, or at least cheaper stocks. That would suggest that the
fund's risk factor may be less than that of other like funds - an
advantage, perhaps, in today's expensive market. Beyond that, keep in mind
that small company stocks have outperformed the market by a wide margin
over the last year. The Russell 2000 index rose 32.41% during the year
ended in October, while the Dow Jones Industrial Average - which tracks
larger, blue-chip stocks - was up 17.46%. But markets move in cycles, and
common sense - not to mention the computer models - suggests we may be in
for a period when smaller stocks underperform the broader market. Now over
the long-term, that's irrelevant. Over time, I still think small companies
have the greatest potential for earnings growth, and therefore stock-price
gains. But for now, investors might want to lower their expectations and
prepare for some volatility.
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, 1993,
over $650 million
MANAGER: Brad Lewis, since
June 1993; manager, Fidelity
Disciplined Equity, since
December 1988, and Fidelity
Stock Selector, since
Septem-ber 1990
(checkmark)
BRAD LEWIS ON QUANTITATIVE
INVESTING:
"The models look at
valuations. That is, ratios like
book-to-
earnings, where book value is
a company's net assets per
share, and price-to-earnings.
Because stock prices follow
earnings, earnings growth
and earnings momentum are
very important, as are
earnings-estimate revisions.
And the models discourage
overpaying - I won't buy a
stock at 40 times earnings.
But really what the models do
is nothing new, it's just more
efficient. The point is to try to
reconcile as many factors as
possible and learn which ones
in combination are best for
forecasting stock-price
moves."
(bullet) The fund invests primarily
in stocks with a market
capitalization of $750 million
or less. Market capitalization
is defined as the total number
of shares outstanding times
the share price.
DISTRIBUTIONS
The Board of Trustees of
Fidelity Commonwealth Trust:
Fidelity Small Cap Stock
Fund voted to pay on
December 6, 1993, to
shareholders of record at the
opening of business on
December 3, 1993, a
distribution of $.04 derived
from capital gains realized
from sales of portfolio
securities and a dividend of
$.02 from net investment
income.
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF OCTOBER 31, 1993
% OF FUND'S INVESTMENTS
HBO & Co. 1.2
American President Companies, Ltd. 1.1
Chipcom Corp. 1.0
Dallas Semiconductor Corp. 0.9
Penncorp Financial Group, Inc. 0.9
Health Care & Retirement Corp. 0.9
Phoenix Re Corp. 0.9
Washington National Corp. 0.9
Thermedics, Inc. 0.8
Barefoot, Inc. 0.7
TOP FIVE INDUSTRIES AS OF OCTOBER 31, 1993
% OF FUND'S INVESTMENTS
Finance 13.6
Technology 13.0
Durables 6.9
Media & Leisure 6.6
Health 6.0
ASSET ALLOCATION AS OF OCTOBER 31, 1993
Stocks 80.2%
Short-term
instruments 19.8%
Row: 1, Col: 1, Value: 19.8
Row: 1, Col: 2, Value: 40.1
Row: 1, Col: 3, Value: 40.1
INVESTMENTS OCTOBER 31, 1993 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 80.2%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.8%
AEROSPACE & DEFENSE - 1.0%
GRC International, Inc. (a) 9,000 $ 66,341 36192210
Precision Standard, Inc. (a) 24,000 138,000 74032710
Sturm Ruger & Co., Inc. 64,600 2,042,975 86415910
Thiokol Corp. 145,700 3,842,838 88410310
Transtechnology Corp. 13,000 151,125 89388910
Wyman-Gordon Co. (a) 44,000 220,000 98308510
6,461,279
DEFENSE ELECTRONICS - 0.7%
AEL Industries, Inc. Class A (a) 23,000 184,000 00103010
Analysis & Technology, Inc. 1,000 18,000 03267210
Comarco, Inc. (a) 8,000 42,000 20008010
Cubic Corp. 13,740 288,540 22966910
ESCO Electronics Corp. (a) 9,300 91,838 26903020
Logicon, Inc. 20,700 592,538 54140910
Tech-Sym Corp. (a) 6,000 119,250 87830810
Watkins-Johnson Co. 173,400 3,728,100 94248610
5,064,266
SHIP BUILDING & REPAIR - 0.1%
Avondale Industries, Inc. 54,000 378,000 05435010
TOTAL AEROSPACE & DEFENSE 11,903,545
BASIC INDUSTRIES - 3.4%
CHEMICALS & PLASTICS - 1.5%
AEP Industries, Inc. 19,000 380,000 00103110
Airgas, Inc. (a) 14,000 577,500 00936310
American Biltrite, Inc. 16,000 536,000 02459110
American Filtrona Corp. 2,000 50,000 02604210
Atlantis Group, Inc. Class A (a) 12,000 69,000 04914710
Bailey Corp. (a) 41,000 517,625 05677130
Blessings Corp. 4,000 88,000 09353210
Cambrex Corp. 8,000 160,000 13201110
ESSEF Industries, Inc. (a) 4,000 46,000 26914510
Furon Co. 21,400 299,600 36110610
Guardsman Products, Inc. 8,000 116,000 40148910
LSB Industries, Inc. 91,600 984,700 50216010
LeaRonal, Inc. 16,000 236,000 52201610
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - CONTINUED
CHEMICALS & PLASTICS - CONTINUED
Lydall, Inc. (a) 22,600 $ 471,775 55081910
MacDermid, Inc. 2,000 54,000 55427310
Myers Industries, Inc. 78,900 1,834,425 62846410
O'Sullivan Corp. 18,200 168,350 68860510
Park Electrochemical Corp. 1,000 17,000 70041620
Pratt & Lambert, Inc. 1,000 19,625 73973210
Quaker State Corp. 115,900 1,608,113 74741010
Sealed Air Corp. (a) 15,000 448,125 81211510
Seda Specialty Packaging Corp. (a) 900 16,425 81517R10
Spartech Corporation (a) 18,000 67,500 84722020
Stepan Co. 11,000 325,875 85858610
Sun Coast Plastics, Inc. (a) 33,000 321,750 86667020
Synalloy Corp. 31,000 441,750 87156510
Versa Technologies, Inc. 1,000 13,875 92511610
Vigoro Corp. 10,000 260,000 92675410
10,129,013
IRON & STEEL - 1.3%
Acme Metals, Inc. (a) 21,000 325,500 00472410
Ampco-Pittsburg Corp. 16,000 112,000 03203710
Athlone Industries, Inc. 42,800 738,300 04748310
Carpenter Technology Corp. 21,900 1,199,025 14428510
Chaparral Steel Company 18,000 159,750 15942210
Commercial Metals Co. 22,000 822,250 20172310
Fansteel, Inc. 4,000 30,000 30726010
Health Mor, Inc. 8,000 149,000 42219110
Insteel Industries, Inc. 32,000 360,000 45774W10
Material Sciences Corp. (a) 57,000 1,382,250 57667410
Mueller Industries, Inc. (a) 12,000 396,000 62475610
NS Group, Inc. (a) 22,000 206,250 62891610
Roanoke Electric Steel Corp. 15,000 198,750 76984110
SPS Technologies, Inc. 8,000 225,000 78462610
Steel Technologies, Inc. 115,500 2,281,125 85814710
8,585,200
METALS & MINING - 0.2%
American Colloid Co. 23,000 546,250 02516810
Brush Wellman, Inc. 4,000 55,000 11742110
Castle (A.M.) & Co. 8,000 112,000 14841110
Handy & Harman 38,000 494,000 41030610
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - CONTINUED
METALS & MINING - CONTINUED
Oregon Metallurgical Corp. (a) 30,000 $ 138,750 68589910
Tremont Corporation (a) 50 313 89474520
Wolverine Tube, Inc. (a) 14,000 243,250 97809310
1,589,563
PACKAGING & CONTAINERS - 0.3%
Alltrista Corp. (a) 112,700 2,028,600 02004010
Kerr Glass Manufacturing Corp. (a) 14,500 125,063 49237610
2,153,663
PAPER & FOREST PRODUCTS - 0.1%
Fibreboard Corp. (a) 29,000 630,750 31571210
Gibraltar Packaging Group, Inc. (a) 13,500 126,563 37475810
757,313
TOTAL BASIC INDUSTRIES 23,214,752
CONGLOMERATES - 0.9%
Dynamics Corp. of America 10,000 170,000 26803910
Figgie International Holdings, Inc. Class A 31,000 472,750 31682850
GenCorp, Inc. 194,400 3,061,800 36868210
Instrument Systems Corp. (a) 4,600 41,400 45779430
Katy Industries, Inc. 25,000 703,125 48602610
Kysor Industrial Corp. (Del.) 11,000 181,500 50156610
PEC Israel Economic Corp. (a) 14,700 468,563 70509810
Quixote Corp. 21,700 347,200 74905610
Standex International Corp. 10,000 216,250 85423110
Talley Industries, Inc. (a) 40,000 310,000 87468710
5,972,588
CONSTRUCTION & REAL ESTATE - 3.8%
BUILDING MATERIALS - 1.8%
American Precision Industries, Inc. 3,000 22,500 02906910
Ameron, Inc. 24,900 918,188 03071010
Barnes Group, Inc. 2,000 65,000 06780610
Bird Corp. 2,000 25,000 09076310
Carlisle Companies, Inc. 18,500 617,438 14233910
Central Sprinkler Corp. 18,000 234,000 15518410
Dravo Corp. (a) 96,100 1,081,125 26147110
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE - CONTINUED
BUILDING MATERIALS - CONTINUED
Elcor Corp. (a) 39,300 $ 889,163 28444310
Fastenal Co. 10,000 307,500 31190010
Florida Rock Industries, Inc. 1,800 52,875 34114010
Green (A.P.) Industries, Inc. (a) 8,000 182,000 39305910
Grow Group, Inc. 255,600 3,578,400 39982010
Noland Company 4,000 69,000 65528610
Patrick Industries, Inc. (a) 27,000 560,250 70334310
Ply-Gem Industries, Inc. 20,000 317,500 72941610
Shelter Components Corp. 4,000 56,500 82283510
Southdown, Inc. (a) 13,800 336,375 84129710
T.J. International, Inc. 73,000 2,281,250 87253410
Texas Industries, Inc. 16,000 390,000 88249110
Thermo Power Corp. (a) 15,000 151,875 88358910
Thermo Process Systems, Inc. (a) 8,000 67,000 88359010
12,202,939
CONSTRUCTION - 1.2%
Blount, Inc. Class A 13,000 264,875 09517330
Butler Manufacturing Co. (Del.) (a) 6,000 171,750 12365510
Cavalier Homes, Inc. 26,000 380,250 14950710
Continental Homes Holding Corp. 31,400 682,950 21148C10
Engle Homes, Inc. 54,800 643,900 29289610
KIT Manufacturing Co. (a) 16,700 146,125 49801710
Liberty Homes, Inc. Class A 8,000 79,000 53058220
M.D.C. Holdings, Inc. (a) 28,500 185,250 55267610
NCI Building Systems, Inc. (a) 34,500 586,500 62885210
Oakwood Homes Corp. 31,000 837,000 67409810
Redman Industries 2,000 33,000 75764210
Schult Homes Corp. 1,000 14,125 80819510
Skyline Corp. 90,000 1,608,750 83083010
Starrett Housing Corp. (a) 3,600 24,750 85567710
Sundance Homes, Inc. (a) 1,000 12,250 86724Q10
Toll Brothers, Inc. (a) 130,000 2,047,500 88947810
Turner Corp. (a) 22,000 192,500 90027310
7,910,475
ENGINEERING - 0.1%
Greiner Engineering, Inc. 12,000 177,000 39762710
Stone & Webster, Inc. 25,000 740,625 86157210
917,625
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE - 0.4%
Alexander's, Inc. (a) 12,000 $ 703,500 01475210
Avatar Holdings, Inc. (a) 3,000 102,750 05349410
Chelsea GCA Realty, Inc. (a) 3,200 94,400 16326210
Communication Cable, Inc. (a) 13,000 172,250 20337810
Hovnanian Enterprises, Inc. Class A (a) 28,600 507,650 44248720
McArthur/Glen Realty Corp. (a) 3,100 78,275 57918810
Stewart Enterprises, Inc. Class A 24,000 960,000 86037010
United Capital Corp. (a) 8,500 87,125 90991210
2,705,950
REAL ESTATE INVESTMENT TRUSTS - 0.3%
American Industrial Properties REIT 23,500 73,438 02679110
Angeles Participating Mortgage Trust Class A (SBI) 4,000 58,000 03464210
BRT Realty Trust (SBI) (a) 17,000 76,500 05564530
Chicago Dock & Canal Trust (SBI) 2,000 20,000 16733910
CleveTrust Realty Investors (SBI) 19,000 73,625 18678010
Duke Realty Investors, Inc. 1,905 49,054 26441150
EastGroup Properties (SBI) 10,000 227,500 27727010
Health Care REIT, Inc. 8,000 198,000 42217K10
Koger Equity, Inc. (a) 11,000 100,375 50022810
National Income Realty Trust 20,900 271,700 63645C20
Post Properties, Inc. (a) 1,000 31,875 73746410
Public Storage Properties:
XVII, Inc. 10,000 146,250 74461710
XIX, Inc. 8,000 89,000 74462D10
Transcontinental Realty Investors (a) 10,000 143,750 89361720
Vanguard Real Estate Fund II (SBI) 10,000 73,750 92192010
1,632,817
TOTAL CONSTRUCTION & REAL ESTATE 25,369,806
DURABLES - 6.9%
AUTOS, TIRES, & ACCESSORIES - 2.9%
Allen Group, Inc. (The) 46,600 1,048,500 01763410
Armor All Products Corp. 130,100 2,227,963 04225610
Athey Products Corp. (a) 20,000 140,000 04746510
Automotive Industries Holding, Inc. (a) 115,000 3,191,250 05329E10
Big O Tires, Inc. (a) 8,000 129,000 08932420
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES - CONTINUED
CLARCOR, Inc. 26,300 $ 466,825 17989510
Custom Chrome, Inc. (a) 25,700 623,225 23190510
Defiance Industries, Inc. (a) 39,400 320,125 24466210
Douglas & Lomason Co. 6,000 105,000 25877710
Eagle-Picher Industries, Inc. (a) 29,000 65,250 26980310
Excel Industries, Inc. 53,000 980,500 30065710
Federal-Mogul Corp. 177,800 4,689,475 31354910
Larriza Industries, Inc. (a) 45,100 405,900 51723510
Lund International Holdings, Inc. (a) 11,000 189,750 55036810
Oshkosh Truck Corp. Class B 8,700 81,563 68823920
Standard Motor Products, Inc. 78,300 1,859,625 85366610
Stant Corp. (a) 2,000 34,000 85472710
TBC Corp. (a) 99,000 1,163,250 87218010
Uni Marts, Inc. 18,000 94,500 90457130
WD 40 Co. 12,000 534,000 92923610
Wabash National Corp. 14,000 378,000 92956610
Wynn's International, Inc. 27,400 534,300 98319510
19,262,001
CONSUMER DURABLES - 0.3%
Forschner Group, Inc. 62,800 1,036,200 34659010
General Housewares Corp. 12,000 160,500 37007310
Lifetime Hoan Corp. (a) 1,000 17,250 53192610
Starrett (L.S.) Co. Class A 26,300 647,638 85566810
1,861,588
CONSUMER ELECTRONICS - 0.3%
Koss Corp. (a) 26,200 373,350 50069210
Mr. Coffee, Inc. (a) 58,086 522,774 60646010
Rival Co. (The) 59,000 980,875 76802010
1,876,999
HOME FURNISHINGS - 0.4%
Ameriwood Industries International, Inc. (a) 22,000 346,500 03070M10
Bassett Furniture Industries, Inc. 22,000 665,500 07020310
Flexsteel Industries, Inc. 10,000 160,000 33938210
Haverty Furniture Companies, Inc. 75,000 1,265,625 41959610
Huffman Koos, Inc. (a) 15,500 116,250 44432210
River Oaks Furniture, Inc. 1,000 19,750 76828210
Rowe Furniture Corp. 42,000 477,750 77952810
Tab Products Co. 12,200 91,500 87319710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
HOME FURNISHINGS - CONTINUED
Virco Manufacturing Corp. 8,800 $ 67,100 92765110
Worth Corp. 7,400 14,800 98164510
3,224,775
TEXTILES & APPAREL - 3.0%
Barry (R.G.) Corp. (a) 8,000 83,000 06879810
Cine Mills Corp. 88,200 1,411,200 20681410
Culp, Inc. 142,000 1,988,000 23021510
Deckers Footwear Corp. 700 16,275 24353710
Delta Woodside Industries, Inc. 7,400 80,475 24790910
Dyersburg Corp. 34,100 255,750 26757510
Fab Industries, Inc. 4,600 162,725 30274710
Farah, Inc. (a) 43,000 360,125 30738710
Fieldcrest Cannon, Inc. (a) 127,400 3,423,875 31654910
Forstmann & Co., Inc. (a) 20,300 233,450 34659270
Galey & Lord, Inc. (a) 41,000 461,250 36352K10
Garan, Inc. 12,000 384,000 36480210
Hyde Athletic Industries, Inc. (a) 54,800 417,850 44863210
Interface, Inc. Class A 60,000 832,500 45866510
Johnston Industries, Inc. 16,000 296,000 47936810
K Swiss, Inc. Class A (a) 18,500 411,625 48268610
Kellwood Co. 31,500 1,228,500 48804410
Nautica Enterprises, Inc. (a) 5,000 163,125 63908910
Oxford Industries, Inc. 56,200 1,327,725 69149730
Quiksilver, Inc. (a) 203,000 2,334,500 74838C10
St. John Knits, Inc. (a) 97,000 1,636,875 79028910
Thomaston Mills, Inc. Class A 20,000 395,000 88456920
Timberland Co. Class A (a) 18,500 1,454,563 88710010
Vista Resources, Inc. (a) 9,000 238,500 92838410
Wolverine World Wide, Inc. 18,000 560,250 97809710
20,157,138
TOTAL DURABLES 46,382,501
ENERGY - 3.2%
COAL - 0.0%
Ashland Coal, Inc. 5,200 145,600 04390610
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
ENERGY SERVICES - 2.3%
BJ Services Co. 108,000 $ 2,443,500 05548210
Baroid Corp. 342,500 2,825,625 06827710
DI Industries, Inc. (a) 15,000 17,813 23290910
Daniel Industries, Inc. 2,000 29,000 23623510
Energy Service, Inc. 50,000 175,000 29271910
Global Marine, Inc. 355,400 1,777,000 37935240
Gulfmark International, Inc. (a) 13,000 230,750 40262810
H&H Oil Tool Co., Inc. 15,300 103,275 40404010
Hornbeck Offshore Services, Inc. (a) 177,000 3,296,625 44054210
Lone Star Technologies, Inc. (a) 178,400 1,605,600 54231210
Maverick Tube Corp. (a) 37,000 499,500 57791410
Offshore Pipelines, Inc. (a) 21,000 349,125 67626910
Petroleum Helicopters, Inc. (non-vtg.) (a) 4,000 64,000 71660420
Pool Energy Services Co. (a) 64,800 720,900 73278810
RPC Energy Services, Inc. (a) 8,000 64,000 74966010
Service Fracturing Co. (a) 11,000 53,625 81790810
Sundowner Offshore Services, Inc. (a) 12,000 177,000 86731410
Weatherford International, Inc. (a) 68,300 776,913 94707610
Zapata Corp. (a) 52,000 71,500 98907010
15,280,751
INDEPENDENT POWER - 0.0%
United Thermal Corp. (a) 21,500 88,688 91307210
OIL & GAS - 0.9%
Barrett Resources Corp. (a) 41,000 492,000 06848020
Basin Exploration, Inc. 4,000 59,000 07010710
Benton Oil & Gas Co. (a) 13,000 91,000 08328810
Berry Petroleum Co. Class A 16,700 152,388 08578910
Brown Tom, Inc. (a) 63,400 911,375 11566020
Crown Central Petroleum Corp. Class A (a) 8,900 140,175 22821910
Crystal Oil Company (a) 9,400 247,925 22938570
Equity Oil Co. 7,000 41,125 29474910
Evergreen Resources, Inc. (a) 9,000 87,750 29990030
Forest Oil Corp. (a) 312,600 1,250,400 34609110
Giant Industries, Inc. (a) 47,000 552,250 37450810
Holly Corp. 12,000 333,000 43575830
Howell Corp. 8,000 86,000 44305110
KCS Group, Inc. 28,000 815,500 48243420
Lomak Petroleum, Inc. (a) 5,000 45,000 54150930
Nuevo Energy Corporation (a) 14,800 340,400 67050910
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Swift Energy Co. 22,000 $ 280,500 87073810
Tesoro Petroleum Corp. (a) 39,700 267,975 88160910
Unit Corp. (a) 30,000 116,250 90921810
6,310,013
TOTAL ENERGY 21,825,052
FINANCE - 13.6%
BANKS - 3.2%
Bank South Corp. 34,400 503,100 06506810
CVB Financial Corp. 3,200 44,800 12660010
Centura Banks, Inc. 67,000 1,398,625 15640T10
Citizens Banking Corp Michigan 18,000 450,000 17442010
Citizens First Bancorp, Inc. (a) 130,100 975,750 17461910
Cullen Frost Bankers, Inc. (a) 15,500 523,125 22989910
Dauphin Deposit Corp. 44,400 1,087,800 23828210
Deposit Guaranty Corp. 81,900 2,385,338 24955510
First Bancorporation of Ohio, Inc. 43,300 1,288,175 31867710
First Midwest Bankcorp, Inc. 19,000 517,750 32086710
HUBCO, Inc. 53,600 1,232,800 40438210
Hibernia Corp. Class A (a) 23,700 186,638 42865610
Interchange Financial Services Corp. 7,000 116,375 45844710
Liberty Bancorporation, Inc. 23,000 684,250 53017510
Mid-America Bancorp. (Ky.) 5,000 96,250 59591510
North Fork Bancorporation, Inc. (a) 66,100 801,463 65942410
Pacific Western Bancshares, Inc. (a) 37,000 309,875 69507210
Premier Bancorp, Inc. (a) 110,400 1,987,200 74090010
SC Bancorp California 15,000 76,875 78388010
Sterling Bancorp (New York) 22,000 176,000 85915810
Summit Bancorp 11,800 255,175 86600810
Trustcompany Bancorporation (The) 2,000 30,500 89790210
Trustmark Corp. 51,000 918,000 89840210
U.S. Trust Corp. 21,200 1,144,800 91288310
Union Planters Corp. 39,000 1,009,125 90806810
United Carolina Bancshares Corp. 17,700 407,100 90979610
Westamerica Bancorp 43,600 1,204,450 95709010
Whitney Holding Corp. 27,400 979,550 96661210
Worthen Banking Corp. 9,500 230,375 98180110
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
Zions Bancorporation 7,000 $ 306,250 98970110
21,327,514
CREDIT & OTHER FINANCE - 1.2%
Aames Financial Corp. 54,000 553,500 00253A10
American Insured Marketing Investors, LP 3,000 14,250 02686210
American Residential Holdings Corp. (a) 16,200 372,600 02926R10
Autofinance Group, Inc. (a) 11,000 121,000 05277410
Bando McGlocklin Capital Corp. 1,000 16,000 06000310
Credit Acceptance Corp. (a) 17,000 637,500 22531010
Foothill Group, Inc. Class A 74,200 1,048,075 34510920
Margaretten Financial Corp. 112,000 1,624,000 56657610
Markel Corp. (a) 3,000 119,250 57053510
Money Store, Inc. 46,300 1,255,888 60934T10
Triad Guaranty, Inc. (a) 800 14,200 89592510
United Companies Financial Corp. 40,500 1,478,250 90987010
World Acceptance Corp. (a) 33,000 651,750 98141910
7,906,263
INSURANCE - 5.8%
Acceptance Insurance Co., Inc. (a) 10,000 145,000 00430810
American Bankers Insurance Group, Inc. 6,000 158,250 02445610
American Income Holding, Inc. 10,700 279,538 02672810
CII Financial, Inc. (a) 6,200 41,075 12551L10
CMAC Investments 46,800 1,585,350 12566210
Capital RE Corp. 117,400 3,081,750 14043210
Capitol American Financial Corp 100,000 1,850,000 14055J10
Delphi Financial Group, Inc. Class A (a) 24,400 567,300 24713110
Fidelity National Financial, Inc. 10,000 367,500 31632610
First American Financial Corp. California 25,700 873,800 31852230
First Central Financial Corp. 8,000 54,000 31890810
Fremont General Corp. 51,050 1,346,444 35728810
Frontier Insurance Group, Inc. 18,000 900,000 35908110
Gainsco, Inc. 23,100 233,888 36312710
Gallagher (Arthur J.) & Co. 4,000 148,000 36357610
Guaranty National Corp. 37,700 801,125 40119210
I.C.H. Corp. (a) 216,000 1,161,000 44926410
Independent Insurance Group, Inc. (non-vtg.) 14,900 238,400 45385820
Integon Corp. (Del.) 81,800 1,707,575 45810F10
JMC Group, Inc. 27,800 281,475 46621810
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Kansas City Life Insurance Co. 4,000 $ 218,000 48483610
Laurentian Capital Corp. (a) 4,000 33,000 51925630
Merchants Group, Inc. (a) 5,000 84,375 58853910
Meridian Insurance Group, Inc. 12,000 138,000 58964410
NY Magic, Inc. 2,000 53,750 62948410
Orion Capital Corp. 34,100 1,449,250 68626810
Penncorp Financial Group, Inc. 287,000 5,991,125 70809410
Phoenix Re Corp. 170,400 5,836,200 71912310
Protective Life Corp. 20,900 1,018,875 74367410
Seafield Capital Corp. 14,500 529,250 81190510
Stewart Information Services Corp. 11,000 319,000 86037210
UniCare Financial Corp. (a) 61,000 1,708,000 90459510
Washington National Corp. 244,000 5,734,000 93933910
38,934,295
SAVINGS & LOANS - 0.9%
American Bank of Connecticut Waterbury 4,000 99,500 02432710
BANCFIRST Corp. Alabama 7,000 136,500 05944910
Baltimore Bancorp (a) 130,200 1,660,050 05902910
BancFlorida Financial Corp. (a) 29,000 630,750 05945110
Cheshire Financial Corp. (Keene, New Hampshire) 14,000 253,750 16540210
Coast Savings Financial, Inc. (a) 25,000 365,625 19039M10
Downey Savings & Loan Association 13,000 342,875 26103910
Eagle Financial Corp. 18,700 385,688 26951310
First Republic Bancorp, Inc. 40,000 615,000 33615F10
FirstFed Financial Corp. 400 7,300 33790710
Metro Bancshares, Inc. 16,500 286,688 59160C10
Metropolitan Financial Corp. 17,700 300,900 59190810
NBB Bancorp, Inc. 19,000 752,875 62872P10
TCF Financial Corporation 9,000 322,875 87227510
Westcorp, Inc. 19,800 202,950 95790710
6,363,326
SECURITIES INDUSTRY - 2.5%
Advest Group, Inc. (The) (a) 14,000 105,000 00756610
Alex. Brown, Inc. 162,100 4,275,388 01390210
Atalanta/Sosnoff Capital Corp. 3,000 30,375 04649910
Colonial Group, Inc. Class A 32,000 1,008,000 19569910
Duff & Phelps Corp. 120,000 2,505,000 26432210
Eaton Vance Corp. 44,200 1,547,000 27826510
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
SECURITIES INDUSTRY - CONTINUED
Inter-Regional Financial Group, Inc. 16,200 $ 502,200 45835110
Interstate/Johnson Lane, Inc. (a) 10,000 98,750 46089210
Jefferies Group, Inc. 11,000 390,500 47231810
Legg Mason, Inc. 56,650 1,380,844 52490110
McDonald & Co. Investments, Inc. 28,800 417,600 58004710
Pioneer Group, Inc. 40,000 1,040,000 72368410
Piper Jaffray, Inc. 8,000 269,000 72408110
Quick & Reilly Group, Inc. (The) 39,000 1,399,125 74837610
Raymond James Financial, Inc. 17,100 461,700 75473010
Southwest Securities Group, Inc. 21,000 252,000 84522410
Stifel Financial Corp. 19,950 192,019 86063010
Value Line, Inc. 1,000 40,500 92043710
Waterhouse Investor Services, Inc. 17,800 841,050 94154710
Zeigler & Co., Inc. 8,000 138,000 98950610
16,894,051
TOTAL FINANCE 91,425,449
HEALTH - 6.0%
DRUGS & PHARMACEUTICALS - 0.7%
Collagen Corp. (a) 135,800 3,632,650 19419410
Enzo Biochem, Inc. (a) 30,000 502,500 29410010
IVAX Corp. 4,000 116,500 46582310
Jones Medical Industries, Inc. 10,000 167,500 48021210
Meridian Diagnostics, Inc. (a) 3,000 27,750 58960210
Natures Sunshine Products, Inc. 3,000 33,000 63902710
Pharmaceutical Resources, Inc. (a) 33,000 556,875 71712510
5,036,775
MEDICAL EQUIPMENT & SUPPLIES - 1.5%
Allied Healthcare Product, Inc. 3,000 36,000 01922210
Coherent, Inc. (a) 62,100 900,450 19247910
FoxMeyer Corp. 95,300 1,107,863 35165410
Fresenius USA, Inc. (a) 21,000 173,250 35803110
HPSC, Inc. (a) 18,000 65,250 40426410
Hanger Orthopedic Group, Inc. (a) 5,000 31,250 41043F20
Health O Meter Products, Inc. (a) 19,000 156,750 42194110
Health-Chem Corp. (a) 1,800 7,875 42217410
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - CONTINUED
Lumex, Inc. (a) 3,500 $ 37,188 55024510
MEDIQ, Inc. 7,000 32,813 58490610
MDT Corp. (a) 106,000 728,750 55268710
Mine Safety Appliances Co. 2,000 90,000 60272010
National Intergroup, Inc. (a) 7,000 107,625 63654010
Optical Radiation Corp. (a) 3,000 45,750 68383610
Owens & Minor, Inc. 43,000 924,500 69073010
Protocol Systems, Inc. (a) 25,000 256,250 74371R10
Techne Corp. 6,400 84,800 87837710
Thermedics, Inc. (a) 200,800 5,170,600 88390110
Thermo Cardiosystems, Inc. (a) 3,000 106,875 88355K20
10,063,839
MEDICAL FACILITIES MANAGEMENT - 3.8%
Abbey Healthcare Group, Inc. (a) 117,400 2,846,950 00278610
Coventry Corp. (a) 112,000 4,368,000 22285310
Employee Benefit Plans, Inc. (a) 25,600 252,800 29216210
Gencare Health Systems, Inc. (a) 42,100 1,189,325 36867410
Genesis Health Ventures, Inc. (a) 76,200 1,352,550 37191210
Health Care & Retirement Corp. (a) 315,000 5,866,875 42193710
Home Office Reference Laboratory, Inc. 3,000 57,000 43726710
Intergroup Healthcare Corp. (a) 19,000 655,500 45868J10
Lincare Holdings, Inc. 57,800 2,528,750 53279110
Living Centers of America, Inc. (a) 48,791 1,091,699 53838810
Mental Health Management, Inc. (a) 75 309 58715410
Preferred Health Care, Ltd. (a) 24,000 738,000 74037210
Ramsay Health Care, Inc. (a) 19,000 163,875 75158220
Rehabcare Corp. (a) 23,000 316,250 75914810
United HealthCare Corp. 30,272 2,115,256 91058110
Universal Health Services, Inc. Class B (a) 28,000 577,500 91390310
Vitalink Pharmacy Services, Inc. (a) 90,000 945,000 92846E10
Vivra, Inc. (a) 11,000 360,250 92855M10
25,425,889
TOTAL HEALTH 40,526,503
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - 3.1%
ELECTRICAL EQUIPMENT - 1.4%
Amphenol Corp. Class A (a) 60,100 $ 826,375 03209420
BMC Industries, Inc. (a) 12,000 195,000 05560710
Bairnco Corp. 2,300 9,200 05709710
Baldor Electric Co. 36,400 1,037,400 05774110
California Microwave Corp. (a) 79,400 1,826,200 13044210
Catalina Lighting, Inc. (a) 19,400 164,900 14886510
Detection Systems, Inc. (a) 21,000 147,000 25064410
Hughes Supply, Inc. 10,900 192,113 44448210
Joslyn Corp. 4,000 100,500 48107010
Juno Lighting, Inc. 3,100 62,000 48204710
Kuhlman Corp. 28,000 469,000 50120610
LSI Lighting Systems, Inc. 1,000 9,500 50216C10
Oak Industries, Inc. (a) 72,900 1,312,200 67140050
Pacific Scientific Company 22,000 412,500 69480610
Roper Industries, Inc. 41,000 1,435,000 77669610
Technitrol, Inc. 9,200 241,500 87855510
Thomas Industries, Inc. 22,200 274,725 88442510
Woodhead Industries, Inc. 29,500 457,250 97943810
9,172,363
INDUSTRIAL MACHINERY & EQUIPMENT - 1.3%
Acme-Cleveland Corp. 51,900 538,463 00462610
Astec Industries, Inc. (a) 77,700 1,068,375 04622410
Asyst Technologies, Inc. 500 5,813 04648X10
Bearings, Inc. 17,000 484,500 07400520
Brenco, Inc. 54,900 624,488 10706110
Cascade Corp. 7,000 133,875 14719510
Core Industries, Inc. 14,500 195,750 21867510
Detroit Diesel Corp. 900 31,500 25083710
Gorman Rupp Co. 3,000 80,250 38308210
IDEX Corp. (a) 28,000 920,500 45167R10
JLG Industries, Inc. (a) 10,300 185,400 46621010
Kaman Corp. Class A 43,000 413,875 48354810
Kaydon Corp. 28,000 591,500 48658710
Lancer Corp. (Texas) (a) 5,000 71,250 51461410
Lawson Products, Inc. 20,100 542,700 52077610
Lindsay Manufacturing Co. (a) 8,000 270,000 53555510
Newcor, Inc. 27,000 357,750 65118610
Park-Ohio Industries, Inc. (a) 15,000 198,750 70067710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
Phillips & Jacobs, Inc. 22,666 $ 271,992 71839510
Regal-Beloit Corp. 8,100 178,200 75875010
Scottsman Industries, Inc. 40,800 504,900 80934010
Stevens Graphics, Inc. Class A (a) 19,000 133,000 86024C20
Tasty Baking Co. 34,000 467,500 87655330
Tokheim Corporation (a) 28,300 360,825 88907310
Twin Disc, Inc. 6,000 117,000 90147610
Ultratech Stepper, Inc. 700 10,500 90403410
Valmont Industries, Inc. 4,100 61,500 92025310
8,820,156
POLLUTION CONTROL - 0.4%
Davis Water & Waste Industries, Inc. (a) 5,400 36,450 23913310
Ecology & Environment, Inc. Class A 8,000 115,000 27887810
International Recovery Corp. 19,000 266,000 46024210
Tetra Tech, Inc. (a) 7,200 144,900 88162G10
USA Waste Services, Inc. (a) 10,000 108,750 90291710
Zurn Industries, Inc. 71,700 1,935,900 98982410
2,607,000
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 20,599,519
MEDIA & LEISURE - 6.6%
BROADCASTING - 0.6%
Ackerley Communications, Inc. (a) 9,000 55,125 00452710
Broadcasting Partners, Inc. Class A 1,500 25,500 11131910
EZ Communications, Inc. (a) 2,000 39,000 26928810
Falcon Cable Systems Co. LP 16,000 212,000 30590210
Gray Communications Systems, Inc. 12,000 177,000 38919010
Heritage Media Corp. Class A (a) 52,300 895,638 42724120
Lodgenet Entertainment Corp. (a) 1,200 19,800 54021110
Preferred Entertainment, Inc. (a) 1,000 29,000 74036T10
SFX Broadcasting, Inc. 2,100 31,500 78417410
Starsight Telecast, Inc. (a) 1,000 22,750 85568E10
TCA Cable TV, Inc. 67,400 1,971,450 87224110
United Television, Inc. (a) 20,900 825,550 91306610
4,304,313
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - 0.9%
Carmike Cinemas, Inc. Class A (a) 12,000 $ 229,500 14343610
Iwerks Entertainment, Inc. (a) 600 20,550 46591610
Kushner Locke Co. (a) 122,000 137,250 50133710
New Line Cinema Corp. (a) 193,300 4,832,500 64646510
S-K-I Ltd. 5,000 67,500 78440610
Samuel Goldwyn Company (a) 9,000 113,625 38157530
Scientific Games Holdings Corp. (a) 1,000 22,250 80874710
Spelling Entertainment Group, Inc. 63,000 630,000 84780710
6,053,175
LEISURE DURABLES & TOYS - 1.1%
ARCTCO, Inc. 113,800 2,645,850 03966510
Allen Organ Co. Class B 2,000 62,250 01775310
Anthony Industries, Inc. 11,800 188,800 03679810
Authentic Fitness Corp. (a) 13,000 354,250 05266110
Club Car, Inc. (a) 1,500 25,875 18947B10
Coast Distribution System (a) 15,500 112,375 19034510
Cobra Golf, Inc. 1,000 30,000 19090710
Escalade, Inc. (a) 3,400 28,900 29605610
Royal Grip, Inc. 300 4,875 78028910
SLM International, Inc. (a) 73,500 3,234,000 78441410
Sport Supply Group, Inc. 24,000 468,000 84891510
Thor Industries, Inc. 6,000 121,500 88516010
Winnebago Industries, Inc. (a) 39,700 282,863 97463710
7,559,538
LODGING & GAMING - 2.1%
Autotote Corp. Class A (a) 3,600 94,950 05332310
Aztar Corp. (a) 155,100 1,085,700 05480210
Jackpot Enterprises, Inc. 258,900 4,012,950 46639210
La Quinta Motor Inns, Inc. 105,000 3,320,625 50419510
Marcus Corp. 19,000 498,750 56633010
Rio Hotel & Casino, Inc. (a) 214,100 3,479,125 76714710
Showboat, Inc. 84,000 1,669,500 82539010
Turf Paradise, Inc. 16,000 112,000 90008410
14,273,600
PUBLISHING - 1.4%
American City Business Journals, Inc. (a) 7,000 174,125 02514310
Banta Corp. 79,500 2,722,875 06682110
Gibson Greetings, Inc. 165,200 3,345,300 37482710
Lee Enterprises, Inc. 23,500 749,063 52376810
Meredith Corp. 32,000 1,284,000 58943310
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
PUBLISHING - CONTINUED
Nelson Thomas, Inc. 17,000 $ 352,750 64037610
Pulitzer Publishing Co. 6,900 232,013 74577110
Wiley (John) & Sons, Inc. Class A 3,000 187,500 96822320
9,047,626
RESTAURANTS - 0.5%
Apple South, Inc. 69,400 1,561,500 03785710
Applebee's International, Inc. 39,500 1,027,000 03789910
Chart House Enterprises, Inc. (a) 22,000 228,250 16090210
Frisch's Restaurants, Inc. 1,000 15,750 35874810
Hometown Buffet, Inc. 400 11,200 43786210
Panchos Mexican Buffet, Inc. 8,000 80,000 69830410
Pollo Tropical, Inc. (a) 500 9,250 73151310
TCBY Enterprises, Inc. 85,000 488,750 87224510
Volunteer Capital Corp. (a) 9,000 88,875 92875310
3,510,575
TOTAL MEDIA & LEISURE 44,748,827
NONDURABLES - 2.2%
BEVERAGES - 0.2%
Canadaigua Wine Co. Class B 2,000 45,500 13721910
Celestial Seasonings, Inc. (a) 100 2,850 15101610
Coca-Cola Bottling Co. Consolidated 31,000 1,147,000 19109810
Midwest Grain Products, Inc. 7,400 179,450 59832G10
1,374,800
FOODS - 1.4%
Cagle's, Inc. Class A 10,000 280,000 12770310
Curtice-Burns Foods, Inc. Class A 1,000 13,625 23138210
Farmer Brothers Co. 1,000 153,000 30767510
Golden Poultry Co., Inc. 10,000 82,500 38115110
GoodMark Foods, Inc. (a) 76,400 1,489,800 38238710
Hudson Foods, Inc. Class A 114,900 1,464,975 44378210
International Multifoods Corp. 20,000 467,500 46004310
J&J Snack Foods Corp. (a) 124,500 2,412,188 46603210
Michael Foods, Inc. 113,800 1,038,425 59407410
Morningstar Group, Inc. 46,000 333,500 61769810
Pilgrims Pride Corp. 24,000 192,000 72146710
Sanderson Farms, Inc. 67,000 1,038,500 80001310
Seaboard Corp. 200 37,600 81154310
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - CONTINUED
Seneca Foods Corp. 15,000 $ 277,500 81707010
9,281,113
HOUSEHOLD PRODUCTS - 0.6%
Alpine Group, Inc. 27,000 246,375 02082510
Del Laboratories, Inc. 6,000 183,750 24509110
Goody Products, Inc. 14,000 343,000 38248610
Guest Supply, Inc. 35,400 354,000 40163010
Helen of Troy Corp. (a 54,000 904,500 42308810
Inbrand Corp. 500 10,375 45323T10
Jean Philippe Fragrances, Inc. 10,900 163,500 47215430
Nutramax Products, Inc. (a) 14,000 210,000 67061A30
St. Ives Laboratories, Inc. 4,000 43,000 78989510
Vulcan International Corp. 11,000 254,375 92913610
West, Inc. 19,000 451,250 95334810
Windmere Corp. (a) 163,600 1,349,700 97341110
4,513,825
TOTAL NONDURABLES 15,169,738
PRECIOUS METALS - 0.0%
USMX, Inc. (a) 36,000 184,500 90336610
RETAIL & WHOLESALE - 4.0%
APPAREL STORES - 1.0%
Baker (J.), Inc. 65,000 1,129,375 05723210
Charter Golf, Inc. 62,000 720,750 16122P10
Clothestime, Inc. (The) 73,000 584,000 18909510
Evans, Inc. (a) 23,000 94,875 29915510
Men's Wearhouse, Inc. (a) 16,000 484,000 58711810
One Price Clothing Stores, Inc. (a) 5,000 85,000 68241110
S&K Famous Brands, Inc. (a) 8,900 182,450 78377410
United States Shoe Corp. 335,000 3,643,125 91260510
6,923,575
DRUG STORES - 0.6%
Arbor Drugs, Inc. 37,000 726,125 03876010
Big B, Inc. 144,300 1,875,900 08889110
Fay's Drug, Inc. 24,500 156,188 31303510
Genovese Drug Stores, Inc. Class A 4,000 42,500 37244220
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
DRUG STORES - CONTINUED
Perry Drug Stores, Inc. (a) 2,000 $ 13,000 71461110
Revco (D.S.), Inc. 74,000 1,137,750 76133910
3,951,463
GENERAL MERCHANDISE STORES - 0.5%
Casey's General Stores, Inc. 75,100 1,595,875 14752810
Freds, Inc. Class A 15,000 217,500 35610810
Mac Frugals Bargains C/O, Inc. (a) 43,000 688,000 55415210
Proffitts, Inc. 16,100 543,375 74292510
Strawbridge & Clothier, Class A 14,000 294,000 86320010
3,338,750
GROCERY STORES - 0.4%
Craig Corp. (a) 6,000 75,000 22417410
Delchamps, Inc. 14,200 337,250 24661510
Ingles Markets, Inc. Class A 19,500 170,625 45703010
Marsh Supermarkets, Inc. Class A 1,000 11,750 57178330
Nash Finch Co. 22,200 444,000 63115810
Penn Traffic Co. (a) 12,000 456,000 70783210
Richfood Holdings, Inc. Class A 30,800 485,100 76340810
Ruddick Corp. 7,000 151,375 78125810
Smart & Final, Inc. 45,000 534,375 83168310
Super Food Services, Inc. 23,000 264,500 86788410
2,929,975
RETAIL & WHOLESALE, MISCELLANEOUS - 1.5%
Advanced Marketing Services, Inc. (a) 29,000 199,375 00753T10
BMC West Corp. 54,000 1,363,500 05592610
Barnes & Noble, Inc. 2,000 58,000 06777410
Blair Co. 11,100 491,175 09282810
Crown Books Corp. 12,000 270,000 22821010
Damark International, Inc. Class A (a) 52,000 1,053,000 23569110
Lazare Kaplan International, Inc. (a) 11,500 71,875 52107810
Lillian Vernon Corp. 1,000 18,125 53243010
Luria (L.) & Son, Inc. (a) 6,000 74,250 55048410
Musicland Stores Corp. 5,000 112,500 62758B10
Sun Television & Appliances, Inc. 147,200 3,348,800 86688110
Tiffany & Company, Inc. 12,200 398,025 88654710
Williams-Sonoma, Inc. (a) 84,000 2,226,000 96990410
9,684,625
TOTAL RETAIL & WHOLESALE 26,828,388
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - 3.8%
ADVERTISING - 0.3%
American List Corp. 4,500 $ 78,750 02725810
Dimark, Inc. (a) 15,000 510,000 25429010
Foote Cone & Belding Communications, Inc. 35,000 1,334,375 34487210
Grey Advertising, Inc. 1,000 178,500 39783810
2,101,625
LEASING & RENTAL - 0.1%
Aaron Rents, Inc. Class A 3,500 37,625 00253530
COMCOA, Inc. (a) 2,000 30,000 20031410
McGrath Rent Corp. (a) 2,800 40,600 58058910
PLM International, Inc. (a) 11,800 26,550 69341L10
Winthrop Resources Corp. 18,000 180,000 97639610
314,775
PRINTING - 1.0%
Bowne & Co., Inc. 99,400 2,025,275 10304310
Cadmus Communications Corp. 7,000 77,000 12758710
Devon Group, Inc. (a) 15,000 271,875 25180110
Ennis Business Forms, Inc. 56,500 720,375 29338910
Graphic Industries, Inc. 51,000 363,375 38867810
Merrill Corp. 39,500 1,017,125 59017510
New England Business Service, Inc. 29,600 488,400 64387210
Standard Register Co. 2,600 51,350 85388710
United States Banknote Corp. (a) 145,000 888,125 91162310
United Stationers, Inc. 32,900 509,950 91300410
Varitronic Systems, Inc. (a) 17,000 233,750 92224710
6,646,600
SERVICES - 2.4%
Actava Group, Inc. 8,000 64,000 00493510
Adia Services, Inc. 9,000 193,500 00687410
American Building Maintenance Industries 14,900 243,988 02475310
American Holdings, Inc. (a) 19,000 33,250 02658710
Angelica Corp. 12,000 298,500 03466310
BEI Holdings Ltd. 14,000 89,250 05538310
Barefoot, Inc. (a) 162,000 5,042,250 06751210
CPI Corp. 29,600 518,000 12590210
Chemed Corp. 13,700 429,838 16359610
Comdata Holdings Corp. 21,000 68,250 20032110
Craig (Jenny), Inc. 40,000 590,000 22420610
Devry, Inc. (a) 20,000 560,000 25189310
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - CONTINUED
SERVICES - CONTINUED
G&K Services, Inc. Class A 7,000 $ 164,500 36126810
Gartner Group, Inc. Class A 1,300 34,125 36665110
Grow Biz International, Inc. 1,000 18,500 39981710
Landauer, Inc. 14,600 231,775 51476K10
Medaphis Corp. 39,000 1,170,000 58402810
Michael Anthony Jewelers, Inc. (a) 32,900 271,425 59406010
PCA International, Inc. 6,000 126,750 69318010
Pinkertons, Inc. (a) 44,100 882,000 72342910
Regis Corporation 23,000 258,750 75893210
Robert Half International, Inc. (a) 102,300 2,838,825 77032310
Roto-Rooter, Inc. 3,000 89,250 77878610
Supercuts, Inc. (a) 7,000 117,250 86805710
Unifirst Corp. Massachusetts 17,300 575,225 90470810
Uniforce Temporary Personnel, Inc. 8,000 50,000 90472410
Wackenhut Corp. 1,000 14,375 92979410
Warrantech Corp. (a) 5,000 35,000 93464830
Zebra Technologies Corp. Class A (a) 25,000 1,293,750 98920710
16,302,326
TOTAL SERVICES 25,365,326
TECHNOLOGY - 13.0%
COMMUNICATIONS EQUIPMENT - 1.4%
Aspect Telecommunications Corp. 69,400 2,723,950 04523710
Centigram Communications Corp. 35,000 1,128,750 15231710
Communications Systems, Inc. 48,000 732,000 20390010
Dynatech Corp. 35,200 800,800 26813810
General DataComm Industries, Inc. (a) 29,000 315,375 36948710
IFR Systems, Inc. 14,000 133,000 44950710
InterVoice, Inc. (a) 125,000 1,937,500 46114210
Level One Communications, Inc. 1,000 33,000 52729510
MB Communications, Inc. (a) 80,000 1,300,000 55262M10
Napco Security Systems, Inc. (a) 13,500 72,563 63040210
Pairgain Technologies, Inc. 1,000 17,250 69593410
Summa Four, Inc. 600 20,250 86562810
Superior Teletec, Inc. (a) 13,000 79,625 86836710
Tie Communications, Inc. 10,000 97,500 86836710
9,391,563
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - 4.8%
Acxiom Corp. (a) 29,000 $ 645,250 00512510
Aldus Corp. 29,000 645,250 01443210
Analysts International Corp. 16,500 288,750 03268110
Barra, Inc. (a) 22,000 148,500 06831310
Bisys Group, Inc. (The) (a) 37,000 897,250 05547210
Business Records Corp. Holding Co. 19,700 536,825 12329610
CACI International, Inc. Class A 8,000 46,500 12719030
Cerner Corp. (a) 56,400 2,016,300 15678210
Chipcom Corp. (a) 142,000 6,709,500 16961710
Computer Data Systems, Inc. 12,000 159,000 20501710
Computer Horizons Corp. (a) 8,000 94,000 20590810
Computer Task Group, Inc. 26,000 178,750 20547710
Crosscommunications Corp. (a) 8,300 261,450 22757K10
CyCare Systems, Inc. (a) 30,000 236,250 23290210
Data Transmission Network Corp. (a) 6,000 147,000 23801710
Dataware Technologies, Inc. (a) 500 11,000 23792010
Gerber Scientific, Inc. 25,000 350,000 37373010
Government Technology Services, Inc. (a) 25,500 325,125 38375010
HBO & Co. 201,900 7,899,338 40410010
Henry (Jack) & Associates, Inc. 9,000 148,500 42628110
Hogan Systems, Inc. 44,000 489,500 43460210
Inacom Corp. (a) 16,700 296,425 45323G10
Intelligent Electronics, Inc. 84,200 1,841,875 45815710
LEGENT Corp. (a) 21,000 509,250 52465R10
Landmark Graphics Corp. (a) 44,000 1,078,000 51491310
M/A/R/C, Inc. 5,000 42,500 55291410
MacNeal-Schwendler Corp. 16,000 224,000 55480610
Manugistics Group, Inc. (a) 5,000 78,750 56501110
Mercury Interactive Corp. 800 10,400 58940510
MicroAge, Inc. (a) 39,900 1,147,125 59492810
National Computer System, Inc. 15,000 180,000 63551910
National Data Corp. 122,300 2,216,688 63562110
National Techteam, Inc. 30,200 117,025 63810810
Netmanage, Inc. 1,000 31,750 64114410
Primark Corp. (a) 15,700 202,138 74190310
Quickresponse Services, Inc. 1,000 30,000 74837W10
Recognition Equipment, Inc. (a) 15,000 255,000 75623110
SEI Corp. 38,000 902,500 78411710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Software Spectrum, Inc. 47,500 $ 1,140,000 83396010
VMark Software, Inc. 15,200 250,800 92856110
32,788,264
COMPUTERS & OFFICE EQUIPMENT - 1.4%
ADAPTEC, Inc. (a) 38,500 1,386,000 00651F10
Amplicon, Inc. 6,000 115,500 03210110
Astro-Med, Inc. 1,000 12,000 04638F10
CSP, Inc. (a) 37,500 375,000 12638910
Checkmate Electronics, Inc. 600 6,750 16281420
Comdisco, Inc. 64,500 1,306,125 20033610
Concord Computing Corp. (a) 8,000 182,000 20618910
Future Now, Inc. 2,000 29,000 36091010
Gates/FA Distributing, Inc. (a) 98,100 1,729,013 36740830
Hunt Manufacturing Co. 16,000 252,000 44563610
Key Tronic Corp. 20,000 145,000 49314410
Netframe Systems, Inc. 109,500 1,724,625 64110610
Pitney Bowes, Inc. 1,333 47,697 72447910
Safeguard Scientifics, Inc. 55,000 1,196,250 78644910
Stratus Computer, Inc. 10,000 292,500 86315510
Tridex Corp. (a) 27,000 239,625 89590610
Vertex Industries, Inc. (a) 6,000 81,000 92532210
Xylogics, Inc. (a) 6,000 105,000 98415210
9,225,085
ELECTRONIC INSTRUMENTS - 1.2%
Analogic Corp. 43,300 654,913 03265720
Cognex Corp. (a) 100,000 1,550,000 19242210
Cohu, Inc. 26,800 549,400 19257610
Electro Scientific Industries, Inc. (a) 87,000 1,000,500 28522910
Fisher Scientific International, Inc. 500 16,813 33803210
Gelman Sciences, Inc. (a) 18,000 301,500 36851410
Isco, Inc. 2,000 24,500 46426810
Keithley Instruments, Inc. 4,000 48,000 48758410
Kulicke & Soffa Industries, Inc. (a) 36,200 809,975 50124210
LTX Corp. 140,200 683,475 50239210
Lam Research Corp. 1,800 47,700 51280710
Measurex Corp. 37,200 702,150 58343210
Micro Component Technology, Inc. 1,100 12,375 59479Q10
Modern Controls, Inc. 4,000 29,000 60755610
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - CONTINUED
Novellus System, Inc. (a) 52,000 $ 1,430,000 67000810
Tektronix, Inc. 26,800 619,750 87913110
8,480,051
ELECTRONICS - 4.1%
Advance Circuits, Inc. (a) 55,800 648,675 00738310
Altron, Inc. 23,250 401,063 02209210
Atmel Corp. 75,000 2,062,500 04951310
Audiovox Corp. Class A 39,700 699,713 05075710
Augat, Inc. 87,400 1,737,075 05104210
Bel Fuse, Inc. (a) 5,000 45,625 07734710
Bell Industries, Inc. 26,800 492,450 07810710
Burr-Brown Corp. (a) 42,000 294,000 12257410
Catalyst Semiconductor, Inc. (a) 22,700 244,025 14888110
Computer Products, Inc. 31,000 87,188 20530010
Dallas Semiconductor Corp. (a) 374,000 6,217,750 23520410
Exar Corp. (a) 38,000 1,130,500 30064510
GTI Corp. (a) 100,000 3,000,000 36236010
Integrated Device Technology, Inc. (a) 111,400 1,643,150 45811810
Kent Electronics Corp. 10,500 274,313 49055310
Lattice Semiconductor Corp. (a) 96,400 1,494,200 51841510
Marshall Industries (a) 51,900 2,458,763 57239310
Milgray Electronics, Inc. 21,000 556,500 59975110
NU Horizons Electronics Corp. (a) 57,000 655,500 66990810
Pioneer-Standard Electronics, Inc. 100,300 1,993,463 72387710
Robinson Nugent, Inc. (a) 14,000 112,000 77081010
Rogers Corp. 500 13,250 77513310
Siliconix, Inc. (a) 14,000 102,375 82707920
Unitrode Corp. (a) 32,300 452,200 91328310
Wyle Laboratories 6,000 102,000 98305110
Zero Corp. 31,000 465,000 98948410
27,383,278
PHOTOGRAPHIC EQUIPMENT - 0.1%
Innovex, Inc. 38,000 422,750 45764710
TOTAL TECHNOLOGY 87,690,991
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRANSPORTATION - 2.6%
AIR TRANSPORTATION - 0.2%
Comair Holdings, Inc. 17,500 $ 546,875 19978910
SkyWest, Inc. 43,000 1,230,875 83087910
1,777,750
RAILROADS - 0.3%
Florida East Coast Industries, Inc. 11,000 709,500 34063210
Portec, Inc. (a) 58,000 594,500 73620210
Wisconsin Central Transportation Corp. (a) 12,000 612,000 97659210
1,916,000
SHIPPING - 1.6%
American President Companies, Ltd. 128,500 7,131,750 02910310
International Shipholding Corp. 7,000 140,000 46032120
Kirby Corp. (a) 138,000 2,639,250 49726610
Maritrans, Inc. 43,000 172,000 57036310
OMI Corp. 12,000 76,500 67087410
Overseas Shipholding Group, Inc. 20,000 410,000 69036810
10,569,500
TRUCKING & FREIGHT - 0.5%
Arkansas Best Corp. 4,700 59,925 04079010
Builders Transport, Inc. (a) 19,600 276,850 12008410
Carolina Freight Corp. 19,900 256,213 14389810
Heartland Express, Inc. (a) 9,000 301,500 42234710
Intertrans Corp. 29,000 355,250 46113710
KLLM Transport Services, Inc. (a) 14,000 206,500 48249810
Lynch Corp. (a) 4,000 99,000 55113710
Matlack Systems, Inc. (a) 17,400 254,475 57690110
Swift Transportation Co., Inc. (a) 3,000 96,000 87075610
TNT Freightways Corp. 61,650 1,387,125 87259J10
XTRA Corp. 1,100 49,363 98413810
3,342,201
TOTAL TRANSPORTATION 17,605,451
UTILITIES - 5.3%
CELLULAR - 0.8%
A Plus Communications, Inc. (a) 1,000 17,500 00193410
American Mobile Systems, Inc. 4,000 100,500 02755950
Arch Communications Group, Inc. 6,000 96,000 03938110
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Cellular Communications Puerto Rico, Inc. (a) 6,000 $ 144,000 15091910
Cellular Communications, Inc. Series A (redeemable) 90,000 4,275,000
15091710
Cellular, Inc. (a) 6,000 121,500 15116310
Centennial Cellular Corp. Class A (a) 32,000 728,000 15133V10
Nationwide Cellular Service, Inc. (a) 14,000 208,250 63859510
5,690,750
ELECTRIC UTILITY - 1.5%
Bangor Hydro-Electric Co. 26,000 516,750 06007710
Black Hills Corp. 17,100 416,813 09211310
Central Vermont Public Service Corp. 45,100 1,042,938 15577110
Commonwealth Energy Systems (SBI) 53,100 2,548,800 20280010
Empire District Electric Co. 20,500 489,438 29164110
Florida Public Utilities Co. 5,000 101,875 34113510
Green Mountain Power Corp. 11,000 379,500 39315410
Madison Gas & Electric Co. 19,000 665,000 55749710
Maine Public Service Co. 12,000 355,500 56048310
Northwestern Public Service Co. 12,700 376,238 66823110
Public Service Co. of New Mexico (a) 217,000 2,414,125 74449910
St. Joseph Light & Power Co. 17,800 625,225 79065410
Upper Peninsula Energy Corp. 1,000 19,500 91630310
9,951,702
GAS - 1.9%
AlaTenn Resources, Inc. 16,000 360,000 01200510
Allegheny & Western Energy Corp. 40,600 314,650 01722710
Atmos Energy Corp. 38,700 1,204,538 04956010
Bay State Gas Co. 15,000 470,625 07261260
Cascade Natural Gas Corp. 23,000 629,625 14733910
Chesapeake Utilities Corp. 9,000 154,125 16530310
Connecticut Natural Gas Corp. 15,000 457,500 20765110
Delta Natural Gas Co., Inc. 4,000 93,000 24774810
Energen Corp. 22,000 577,500 29265N10
EnergyNorth, Inc. 6,000 132,000 29292510
Essex County Gas Co. 4,000 119,000 29677210
Indiana Energy, Inc. 61,300 1,402,238 45470710
KN Energy, Inc. 25,500 701,250 48262010
NUI Corp. 15,000 425,625 62943010
North Carolina Natural Gas Corp. 10,000 286,250 65822110
Northwest Natural Gas Co. 9,800 355,250 66765510
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
GAS - CONTINUED
Providence Energy Corp. 45,000 $ 905,625 74374310
Public Service Co. of North Carolina, Inc. 5,000 86,250 74451610
South Jersey Industries, Inc. 15,800 393,025 83851810
Southeastern Michigan Gas Enterprises, Inc. 3,400 86,700 84182510
Southern Union Company (a) 4,700 137,475 84403010
Southwestern Energy Co. 90,800 1,884,100 84546710
United Cities Gas Co. 19,000 365,750 90982310
Valley Resources, Inc. 3,000 48,000 92006210
WICOR, Inc. 27,500 876,563 92925310
Yankee Energy System, Inc. 25,700 738,875 98477910
13,205,539
TELEPHONE SERVICES - 0.8%
C-TEC Corp. 114,000 3,591,000 12650410
Davel Communications GRP, Inc. (a) 600 9,450 23833810
LDDS Communications, Inc. 19,300 969,825 50182L10
Lincoln Telecommunications Co. 16,000 644,000 53478010
5,214,275
WATER - 0.3%
Connecticut Water Service, Inc. 1,600 47,600 20779710
E Town Corp. 4,500 148,500 26924210
IWC Resources, Inc. 500 11,625 45071210
Pennsylvania Enterprises, Inc. 19,000 551,000 70872010
Philadelphia Suburban Corp. 10,400 205,400 71800960
Southern California Water Co. 34,600 787,150 84250210
United Water Resources, Inc. 20,000 307,500 91319010
2,058,775
TOTAL UTILITIES 36,121,041
TOTAL COMMON STOCKS
(Cost $510,109,158) 540,933,977
U.S. TREASURY OBLIGATIONS (B) - 0.4%
PRINCIPAL
AMOUNT
U.S. Treasury Bills, yields at date of purchase
3.05% to 3.11%, 11/18/93 to 2/10/94
(Cost $2,742,504) $ 2,750,000 2,742,545
REPURCHASE AGREEMENTS - 19.4%
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements,
(U.S. Treasury obligations), in a
joint trading account at 2.96%
dated 10/29/93 due 11/1/93 $ 130,600,207 $ 130,568,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $643,419,662) $ 674,244,522
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
300 S&P 500 Stock Index Contracts Dec. 1993 $ 70,207,500 $ 1,398,725
THE VALUE OF FUTURES CONTRACTS PURCHASED AS A PERCENTAGE OF TOTAL
INVESTMENT IN SECURITIES - 10.4%
LEGEND
1. Non-income producing
2. Securities were pledged to cover margin requirements for futures
contracts. At the period end, the value of securities pledged amounted to
$2,742,545.
INCOME TAX INFORMATION
At October 31, 1993, the aggregate cost of investment securities for income
tax purposes was $643,419,662. Net unrealized appreciation aggregated
$30,824,860, of which $47,537,574 related to appreciated investment
securities and $16,712,714 related to depreciated investment securities.
The fund hereby designates $<$$> as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 31, 1993 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 674,244,522
agreements of $130,568,000) (cost $643,419,662)
(Notes 1 and 2) - See accompanying schedule
Cash 746
Receivable for investments sold 37,956,768
Receivable for fund shares sold 8,414,450
Dividends receivable 315,480
TOTAL ASSETS 720,931,966
LIABILITIES
Payable for investments purchased $ 64,665,998
Payable for fund shares redeemed 4,468,729
Accrued management fee 357,377
Other payables and accrued expenses 433,092
TOTAL LIABILITIES 69,925,196
NET ASSETS $ 651,006,770
Net Assets consist of:
Paid in capital $ 617,565,054
Undistributed net investment income 306,926
Accumulated undistributed net realized gain (loss) on 911,205
investments
Net unrealized appreciation (depreciation) on:
Investment securities 30,824,860
Futures contracts 1,398,725
NET ASSETS, for 60,634,124 shares outstanding $ 651,006,770
NET ASSET VALUE and redemption price per share $10.74
($651,006,770 (divided by) 60,634,124 shares)
Maximum offering price per share (100/97 of $10.74) $11.07
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 28, 1993 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1993 (UNAUDITED)
INVESTMENT INCOME $ 1,264,960
Dividends
Interest 1,284,472
TOTAL INCOME 2,549,432
EXPENSES
Management fee (Note 4) $ 1,077,744
Transfer agent fees (Note 4) 703,832
Accounting fees and expenses (Note 4) 91,176
Custodian fees and expenses 44,883
Registration fees 347,572
Audit 4,000
Miscellaneous 1,157
Total expenses before reductions 2,270,364
Expense reductions (Note 5) (27,858) 2,242,506
NET INVESTMENT INCOME 306,926
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1, 2 AND 3)
Net realized gain (loss) on:
Investment securities (1,544,395)
Futures contracts 2,455,600 911,205
Change in net unrealized appreciation (depreciation) on:
Investment securities 30,824,860
Futures contracts 1,398,725 32,223,585
NET GAIN (LOSS) 33,134,790
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 33,441,716
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
JUNE 28, 1993
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1993
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 306,926
Net investment income
Net realized gain (loss) on investments 911,205
Change in net unrealized appreciation (depreciation) on investments 32,223,585
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 33,441,716
Share transactions 679,327,738
Net proceeds from sales of shares
Cost of shares redeemed (61,762,684)
Net increase (decrease) in net assets resulting from share transactions 617,565,054
TOTAL INCREASE (DECREASE) IN NET ASSETS 651,006,770
NET ASSETS
Beginning of period -
End of period (including undistributed net investment income of $ 651,006,770
$306,926)
OTHER INFORMATION
Shares
Sold 66,539,552
Redeemed (5,905,428)
Net increase (decrease) 60,634,124
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C>
JUNE 28, 1993
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1993
(UNAUDITED)
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .01
Net realized and unrealized gain (loss) on investments .73
Total from investment operations .74
Net asset value, end of period $ 10.74
TOTAL RETURN (dagger)(double dagger) 7.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 651,007
Ratio of expenses to average net assets ** 1.40%*
Ratio of expenses to average net assets before expense reductions ** 1.41%*
Ratio of net investment income to average net assets .19%*
Portfolio turnover rate 161%*
</TABLE>
* ANNUALIZED
** SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
(dagger) THE TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(double dagger) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED CERTAIN EXPENSES DURING THE
PERIOD SHOWN.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1993 (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 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, other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practical to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
INCOME TAXES. The fund intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code. By so qualifying, the fund
will not be 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, which includes accretion of original
issue discount, is accrued as earned. Dividend and interest income is
recorded net of foreign taxes where recovery of such taxes is not assured.
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.
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. 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 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 presented net on the Statement of
Assets and Liabilities. Gain (loss) on the purchase or sale of forward
foreign currency contracts having the same settlement date and broker 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 fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
FUTURES CONTRACTS AND OPTIONS. The fund may invest in futures contracts and
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 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.
2. OPERATING POLICIES -
CONTINUED
FUTURES CONTRACTS AND OPTIONS -
CONTINUED
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 $649,851,875 and $138,198,088, respectively.
The face value of futures contracts opened and closed amounted to
$142,501,600 and $73,692,825, 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 ranging from
.30% to .52% and is based on the monthly average net assets of all the
mutual funds advised by FMR. The annual individual fund fee rate is .35%.
The basic fee is subject to a performance adjustment (up to a maxi- mum of
+ or - .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 will not take effect until June 1994. For the period, the
management fee was equivalent to an annualized rate of .67% of average net
assets.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .2850% to .5200%. FMR has voluntarily agreed to implement this
new group fee rate schedule as it results in the same or a lower management
fee.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $331,094 on sales of shares of the fund.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
fund's transfer, dividend disbursing and share-
holder 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 FEE. 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
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 $42,691 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
$27,858 under this arrangement.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(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)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. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
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
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
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Growth Company Fund
Low-Priced Stock Fund
Magellan Fund
New Millennium Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
Trend Fund
Value Fund
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)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
