FIDELITY COMMONWEALTH TRUST, 485BPOS, 1998-06-18

FIDELITY COMMONWEALTH TRUST
485BPOS, 1998-06-18

Previous: TAX FREE INVESTMENTS CO, 497, 1998-06-18

Next: NEW ENGLAND BUSINESS SERVICE INC, 8-K, 1998-06-18

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-52322)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 66 [X]
and
REGISTRATION STATEMENT (No. 811-2546)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 66 [X]
Fidelity Commonwealth Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Eric D. Roiter, Secretary
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 June 19, 1998 pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on ( ) to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date
for a previously filed
post-effective amendment.
FIDELITY INTERMEDIATE BOND FUND
CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. COVER PAGE

2 A .............................. EXPENSES

B, C .............................. CONTENTS; THE FUND AT A GLANCE; WHO
MAY WANT TO INVEST

3 A .............................. FINANCIAL HIGHLIGHTS

B .............................. *

C, D .............................. PERFORMANCE

4 A I............................. CHARTER

II........................... THE FUND AT A GLANCE; INVESTMENT
PRINCIPLES AND RISKS

B .............................. INVESTMENT PRINCIPLES AND RISKS

C .............................. WHO MAY WANT TO INVEST; INVESTMENT
PRINCIPLES AND RISKS

5 A .............................. CHARTER

B I............................. COVER PAGE: THE FUND AT A GLANCE;
CHARTER; DOING BUSINESS WITH FIDELITY

II........................... CHARTER

III.......................... EXPENSES; BREAKDOWN OF EXPENSES

C .............................. CHARTER

D .............................. CHARTER; BREAKDOWN OF EXPENSES

E .............................. COVER PAGE; CHARTER

F .............................. EXPENSES

G I.............................. CHARTER

II.............................. *

5 A .............................. PERFORMANCE

6 A I............................. CHARTER

II........................... HOW TO BUY SHARES; HOW TO SELL
SHARES; TRANSACTION DETAILS;
EXCHANGE RESTRICTIONS

III.......................... CHARTER

B ............................. CHARTER

C .............................. TRANSACTION DETAILS; EXCHANGE
RESTRICTIONS

D .............................. *

E .............................. DOING BUSINESS WITH FIDELITY; HOW TO
BUY SHARES; HOW TO SELL SHARES;
INVESTOR SERVICES

F, G .............................. DIVIDENDS, CAPITAL GAINS, AND TAXES

H .............................. *

7 A .............................. COVER PAGE; CHARTER

B .............................. EXPENSES; HOW TO BUY SHARES;
TRANSACTION DETAILS

C .............................. *

D .............................. HOW TO BUY SHARES

E .............................. *

F .............................. BREAKDOWN OF EXPENSES

8 .............................. HOW TO SELL SHARES; INVESTOR
SERVICES; TRANSACTION DETAILS;
EXCHANGE RESTRICTIONS

9 .............................. *

* Not Applicable
</TABLE>

FIDELITY INTERMEDIATE BOND FUND
CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A

ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ COVER PAGE

12 ............................ DESCRIPTION OF THE TRUST

13 A-C ............................ INVESTMENT POLICIES AND LIMITATIONS

D ............................ PORTFOLIO TRANSACTIONS

14 A-C ............................ TRUSTEES AND OFFICERS

15 A ............................ *

B ............................ *

C ............................ TRUSTEES AND OFFICERS

16 A I ............................ FMR; PORTFOLIO TRANSACTIONS

II ............................ TRUSTEES AND OFFICERS

III ............................ MANAGEMENT CONTRACT

B ............................ MANAGEMENT CONTRACT

C, D ............................ CONTRACTS WITH FMR AFFILIATES

E ............................ *

F ............................ DISTRIBUTION AND SERVICE PLAN

G ............................ *

H ............................ DESCRIPTION OF THE TRUST

I ............................ CONTRACTS WITH FMR AFFILIATES

17 A-C ............................ PORTFOLIO TRANSACTIONS

D, E ............................ *

18 A ............................ DESCRIPTION OF THE TRUST

B ............................ *

19 A ............................ ADDITIONAL PURCHASE, EXCHANGE AND
REDEMPTION INFORMATION

B ............................ ADDITIONAL PURCHASE, EXCHANGE AND
REDEMPTION INFORMATION; VALUATION

C ............................ *

20 ............................ DISTRIBUTIONS AND TAXES

21 A, B ............................ CONTRACTS WITH FMR AFFILIATES

C ............................ *

22 A ............................ *

B ............................ PERFORMANCE

23 ............................ FINANCIAL STATEMENTS

</TABLE>

* Not Applicable

FIDELITY
INTERMEDIATE BOND
FUND
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the
fund invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a
copy of the fund's most recent financial report and portfolio listing,
or a copy of the Statement of Additional Information (SAI) dated June
19, 1998. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is available along with other related materials
on the SEC's Internet Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, call
Fidelity (registered trademark) at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
IBF-pro-0698
7 04234
(fund number 032, trading symbol FTHRX)
Intermediate Bond seeks high current income by investing normally in
investment-grade debt securities while maintaining an average maturity
of three to 10 years.
PROSPECTUS
JUNE 19, 1998(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS

KEY FACTS 4 THE FUND AT A GLANCE

4 WHO MAY WANT TO INVEST

6 EXPENSES THE FUND'S YEARLY OPERATING
EXPENSES.

7 FINANCIAL HIGHLIGHTS A SUMMARY OF
THE FUND'S FINANCIAL DATA.

8 PERFORMANCE HOW THE FUND HAS DONE
OVER TIME.

THE FUND IN DETAIL 9 CHARTER HOW THE FUND IS ORGANIZED.

9 INVESTMENT PRINCIPLES AND RISKS THE
FUND'S OVERALL APPROACH TO INVESTING.

11 BREAKDOWN OF EXPENSES HOW
OPERATING COSTS ARE CALCULATED AND WHAT
THEY INCLUDE.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS DIFFERENT WAYS TO
SET UP YOUR ACCOUNT, INCLUDING
TAX-ADVANTAGED RETIREMENT PLANS.

HOW TO BUY SHARES OPENING AN
ACCOUNT AND MAKING ADDITIONAL
INVESTMENTS.

HOW TO SELL SHARES TAKING MONEY OUT
AND CLOSING YOUR ACCOUNT.

INVESTOR SERVICES SERVICES TO HELP YOU
MANAGE YOUR ACCOUNT.

SHAREHOLDER AND 19 DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

20 TRANSACTION DETAILS SHARE PRICE
CALCULATIONS AND THE TIMING OF
PURCHASES AND REDEMPTIONS.

20 EXCHANGE RESTRICTIONS

KEY FACTS

THE FUND AT A GLANCE
GOAL: High current income. As with any mutual fund, there is no
assurance that the fund will achieve its goal.
STRATEGY: Normally invests in investment-grade debt securities while
maintaining an average maturity of three to 10 years. FMR uses the
Lehman Brothers Intermediate Government/Corporate Bond Index as a
guide in structuring the fund and selecting its investments.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments (registered trademark) ,
which was established in 1946 and is now America's largest mutual fund
manager. Foreign affiliates of FMR may help choose investments for the
fund.
Beginning January 1, 1999, Fidelity Investments Money Management,
Inc. (FIMM), a subsidiary of FMR, will choose investments for the
fund.
SIZE: As of April 30 , 1998, the fund had over $3.0
b illion in assets.
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who want high current income
from a portfolio of investment-grade debt securities. A fund's level
of risk and potential reward depend on the quality and maturity of its
investments. With its focus on medium- to high-quality investments and
intermediate maturity, the fund has a moderate risk level and yield
potential.
The value of the fund's investments and the income they generate will
vary from day to day, and generally reflect interest rates, market
conditions, and other economic and political news. When you sell your
shares, they may be worth more or less than what you paid for them. By
itself, the fund does not constitute a balanced investment plan.

THE SPECTRUM OF
FIDELITY FUNDS
BROAD CATEGORIES OF FIDELITY
FUNDS ARE PRESENTED HERE IN
ORDER OF ASCENDING RISK.
GENERALLY, INVESTORS SEEKING TO
MAXIMIZE RETURN MUST ASSUME
GREATER RISK. INTERMEDIATE BOND
IS IN THE INCOME CATEGORY.
(SOLID BULLET) MONEY MARKET SEEKS
INCOME AND STABILITY BY
INVESTING IN HIGH-QUALITY,
SHORT-TERM INVESTMENTS.
(RIGHT ARROW) INCOME SEEKS INCOME BY
INVESTING IN BONDS.
(SOLID BULLET) GROWTH AND INCOME SEEKS
LONG-TERM GROWTH AND INCOME
BY INVESTING IN STOCKS AND
BONDS.
(SOLID BULLET) GROWTH SEEKS LONG-TERM
GROWTH BY INVESTING MAINLY IN
STOCKS.
(CHECKMARK)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell shares of the fund. In addition, you may be charged an annual
account maintenance fee if your account balance falls below $2,500.
See "Transaction Details," page , for an explanation of how and
when these charges apply.
SALES CHARGE ON PURCHASES NONE
AND REINVESTED DISTRIBUTIONS

DEFERRED SALES CHARGE ON REDEMPTIONS NONE

ANNUAL ACCOUNT MAINTENANCE FEE $12.00
(FOR ACCOUNTS UNDER $2,500)

ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The
fund pays a management fee to FMR. It also incurs other expenses for
services such as maintaining shareholder records and furnishing
shareholder statements and financial reports. The fund's expenses are
factored into its share price or dividends and are not charged
directly to shareholder accounts (see "Breakdown of Expenses," page ).
The following figures are based on historical expenses of the fund and
are calculated as a percentage of average net assets of the fund. A
portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. In addition, the fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances are used to reduce
custodian and transfer agent expenses. Including these reductions, the
total fund operating expenses presented in the table would have been
0.65 %.

MANAGEMENT FEE 0.44%

12B-1 FEE NONE

OTHER EXPENSES 0.22%

TOTAL FUND OPERATING EXPENSES 0.66%

EXAMPLES: Let's say, hypothetically, that the fund's annual return is
5% and that your shareholder transaction expenses and the fund's
annual operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses
if you close your account after the number of years indicated:
UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of expenses
for portfolio management,
shareholder statements, tax
reporting, and other services.
These expenses are paid from
the fund's assets, and their
effect is already factored into
any quoted share price or
return. Also, as an investor,
you may pay certain expenses
directly.
(checkmark)
1 YEAR $ 7

3 YEARS $ 21

5 YEARS $ 37

10 YEARS $ 82

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expenses or returns, all of which may vary.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows has been audited by
Coopers & Lybrand L.L.P. , independent accountants. The fund's
financial highlights, financial statements, and report of the auditor
are included in the fund's Annual Report, and are incorporated by
reference into (are legally a part of) the fund's SAI. Contact
Fidelity for a free copy of the Annual Report or the SAI.
SELECTED PER-SHARE DATA

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEARS ENDED APRIL
30 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989B 1988A

NET ASSET
VALUE, $ 9.960 $ 10.050 $ 10.030 $ 10.230 $ 10.700 $ 10.270 $ 10.070 $ 9.690 $ 9.850 $ 9.870 $ 10.040
BEGINNING OF PERIOD

INCOME FROM INVESTMENT
OPERATIONS

NET INVESTMENT
INCOME .646D .647D .684 .591 .705 .784 .764 .800 .866 .299 .874

NET REALIZED
AND .200 (.060) (.004) (.074) (.381) .496 .197 .380 (.160) (.020) (.170)
UNREALIZED GAIN (LOSS)

TOTAL FROM
INVESTMENT .846 .587 .680 .517 .324 1.280 .961 1.180 .706 .279 .704
OPERATIONS

LESS DISTRIBUTIONS

FROM NET
INVESTMENT (.646) (.647) (.660) (.598) (.704) (.790) (.761) (.800) (.866) (.299) (.874)
INCOME

FROM NET REALIZED
GAIN -- (.030) -- -- -- (.060) -- -- -- -- --

IN EXCESS OF
NET -- -- -- (.100) (.090) -- -- -- -- -- --
REALIZED GAIN

RETURN OF
CAPITAL -- -- -- (.019) -- -- -- -- -- -- --

TOTAL
DISTRIBUTIONS (.646) (.677) (.660) (.717) (.794) (.850) (.761) (.800) (.866) (.299) (.874)

NET ASSET
VALUE, $ 10.160 $ 9.960 $ 10.050 $ 10.030 $ 10.230 $ 10.700 $ 10.270 $ 10.070 $ 9.690 $ 9.850 $ 9.870
END OF PERIOD

TOTAL RETURNF 8.70% 6.02% 6.85% 5.32% 2.93% 12.90% 9.82% 12.61% 7.24% 2.86% 7.22%

RATIOS AND SUPPLEMENTAL DATA

NET ASSETS, END
OF $ 3,092 $ 3,083 $ 2,881 $ 2,463 $ 1,782 $ 1,639 $ 1,235 $ 878 $ 661 $ 528 $ 504
PERIOD (IN MILLIONS)

RATIO OF EXPENSES
TO .66% .71% .73% .68% .64% .61%E .63%E .66% .72% .62%C,H .87%C
AVERAGE NET ASSETS

RATIO OF EXPENSES
TO .65%G .69%G .71%G .68% .64% .61% .63% .66% .72% .62%H .87%
AVERAGE NET ASSETS AFTER
EXPENSE REDUCTIONS

RATIO OF NET
INVESTMENT 6.37% 6.46% 6.48% 6.31% 6.88% 7.44% 7.45% 8.05% 8.57% 9.35%H 8.76%
INCOME TO AVERAGE NET
ASSETS

PORTFOLIO TURNOVER
RATE 90% 116% 169% 75% 81% 51% 80% 73% 82% 101%H 59%

</TABLE>

A YEAR ENDED DECEMBER 31, 1988
B ON APRIL 20, 1989, THE TRUSTEES APPROVED A CHANGE IN THE FUND'S
FISCAL YEAR END TO APRIL 30. THE FINANCIAL HIGHLIGHTS ARE FOR THE FOUR
MONTHS ENDED APRIL 30, 1989.
C DURING THE YEAR ENDED DECEMBER 31, 1988 AND DURING THE FOUR MONTH
PERIOD ENDED APRIL 30, 1989, THE FUND'S TRANSFER AGENT VOLUNTARILY
WAIVED FEES OF $.011 AND $.010, RESPECTIVELY, PER SHARE. IF THIS
REIMBUSEMENT WAS NOT IN EFFECT, THE RATIO OF EXPENSES TO AVERAGE NET
ASSETS FOR THE YEAR ENDED DECEMBER 31, 1988 AND THE FOUR MONTHS ENDED
APRIL 30, 1989 WOULD HAVE BEEN .98% AND .95% (ANNUALIZED),
RESPECTIVELY.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMET, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN AND FOR PERIODS OF LESS THAN ONE
YEAR ARE NOT ANNUALIZED.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGERMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES.
H ANNUALIZED
PERFORMANCE
Bond fund performance can be measured as TOTAL RETURN or YIELD. The
total returns that follow are based on historical fund results and do
not reflect the effect of taxes.
The fund's fiscal year runs from May 1 through April 30. The tables
below show the fund's performance over past fiscal years compared to
different measures, including a comparative index and a competitive
funds average. The chart on page presents calendar year
performance.
AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
FISCAL PERIODS ENDED PAST 1 PAST 5 PAST 10
APRIL 30, 1998 YEAR YEARS YEARS

INTERMEDIATE BOND 8.70% 5.95% 7.89%

LEHMAN BROS. INTERMED. GOV'T./CORP. BOND INDEX 8.94% 6.11% 8.23%

LIPPER SHT.-INT. INV. GR. DEBT FUNDS AVG. 7.65% 5.40% 7.51%

</TABLE>

CUMULATIVE TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
FISCAL PERIODS ENDED PAST 1 PAST 5 PAST 10
APRIL 30, 1998 YEAR YEARS YEARS

INTERMEDIATE BOND 8.70% 33.48% 113.77%

LEHMAN BROS. INTERMED. GOV'T./CORP. BOND INDEX 8.94% 34.50% 120.46%

LIPPER SHT.-INT. INV. GR. DEBT FUNDS AVG. 7.65% 30.12% 106.55%

</TABLE>

If FMR had not reimbursed certain fund expenses during these periods,
total returns would have been lower.
UNDERSTANDING
PERFORMANCE
BECAUSE THIS FUND INVESTS IN
FIXED-INCOME SECURITIES, ITS
PERFORMANCE IS RELATED TO
CHANGES IN INTEREST RATES.
FUNDS THAT HOLD SHORT-TERM
BONDS ARE USUALLY LESS AFFECTED
BY CHANGES IN INTEREST RATES
THAN LONG-TERM BOND FUNDS. FOR
THAT REASON, LONG-TERM BOND
FUNDS TYPICALLY OFFER HIGHER
YIELDS AND CARRY MORE RISK
THAN SHORT-TERM BOND FUNDS.
(CHECKMARK)
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
YIELD refers to the income generated by an investment in the fund over
a given period of time, expressed as an annual percentage rate. Yields
are calculated according to a standard that is required for all stock
and bond funds. Because this differs from other accounting methods,
the quoted yield may not equal the income actually paid to
shareholders.
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX is a
market value weighted performance benchmark for government and
corporate fixed-rate debt issues with maturities between one and 10
years.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
INTERMEDIATE BOND
7.22% 11.82 7.54 14.50 6.08% 11.96% -2.01% 12.81% 3.65% 7.57%
Lehman Bros. Intermed.
Gov't/Corp. Bond Index
6.67% 12.77% 9.16% 14.62% 7.17% 8.79% -1.93% 15.33% 4.05% 7.87%
Lipper Short-Intermed. Inv.
Gr. Debt Funds Average
7.06% 11.67% 7.22% 15.63% 6.88% 9.52% -3.25% 16.62% 3.12% 6.62%
Consumer Price Index
4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
Percentage (%)
Row: 1, Col: 1, Value: 7.22
Row: 2, Col: 1, Value: 11.82
Row: 3, Col: 1, Value: 7.54
Row: 4, Col: 1, Value: 14.5
Row: 5, Col: 1, Value: 6.08
Row: 6, Col: 1, Value: 11.96
Row: 7, Col: 1, Value: -2.01
Row: 8, Col: 1, Value: 12.81
Row: 9, Col: 1, Value: 3.65
Row: 10, Col: 1, Value: 7.57
(LARGE SOLID BOX) Intermediate Bond
Unlike the fund's returns, the total returns of the comparative index
do not include the effect of any brokerage commissions, transaction
fees, or other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Short- Intermediate
Investment Grade Debt Funds Average. As of April 30, 1998, the average
reflected the performance of 94 mutual funds with similar
investment objectives. This average, published by Lipper Analytical
Services, Inc., excludes the effect of sales loads.
The fund's recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
For current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUND IN DETAIL

CHARTER
INTERMEDIATE BOND IS A MUTUAL FUND: an investment that pools
shareholders' money and invests it toward a specified goal. The fund
is a diversified fund of Fidelity Commonwealth Trust, an open-end
management investment company organized as a Massachusetts business
trust on November 8, 1974.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
fund's activities, review contractual arrangements with companies that
provide services to the fund, and review the fund's performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. Fidelity will mail proxy materials in
advance, including a voting card and information about the proposals
to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
FMR AND ITS AFFILIATES
The fund is managed by FMR, which chooses the fund's investments and
handles its business affairs. Fidelity Management & Research (U.K.)
Inc. (FMR U.K.), in London, England, and Fidelity Management &
Research (Far East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR
with foreign investments.
Beginning January 1, 1999, FIMM, located in Merrimack, New Hampshire,
will have primary responsibility for providing investment management
services for the fund.
Christine Thompson is Vice President and manager of Intermediate Bond,
which she has managed since October 1995. She also manages other
Fidelity funds. Since joining Fidelity in 1985, Ms. Thompson has
worked as a senior analyst and manager.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
Fidelity Service Company, Inc. (FSC) performs transfer agent servicing
functions for the fund.
FMR Corp. is the ultimate parent company of FMR, FMR U.K., FMR Far
East and FIMM . Members of the Edward C. Johnson 3d family are
the predominant owners of a class of shares of common stock
representing approximately 49% of the voting power of FMR Corp. Under
the Investment Company Act of 1940 (the 1940 Act), control of a
company is presumed where one individual or group of individuals owns
more than 25% of the voting stock of that company; therefore, the
Johnson family may be deemed under the 1940 Act to form a controlling
group with respect to FMR Corp.
FMR may use its broker-dealer affiliates and other firms that sell
fund shares to carry out the fund's transactions, provided that the
fund receives brokerage services and commission rates comparable to
those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
BOND FUNDS IN GENERAL. The yield and share price of a bond fund change
daily based on changes in interest rates and market conditions, and in
response to other economic, political or financial events. The types
and maturities of the securities a bond fund purchases and the credit
quality of their issuers will impact a bond fund's reaction to these
events.
The total return from a bond includes both income and price gains or
losses. While income is the most important component of bond returns
over time, a bond fund's emphasis on income does not mean the fund
invests only in the highest-yielding bonds available, or that it can
avoid losses of principal.
INTEREST RATE RISK. In general, bond prices rise when interest rates
fall and fall when interest rates rise. Longer-term bonds are usually
more sensitive to interest rate changes. In other words, the longer
the maturity of a bond, the greater the impact a change in interest
rates is likely to have on the bond's price. In addition, short-term
interest rates and long-term interest rates do not necessarily move in
the same amount or in the same direction. A short-term bond tends to
react to changes in short-term interest rates and a long-term bond
tends to react to changes in long-term interest rates.
ISSUER RISK. The price of a bond is affected by the credit quality of
its issuer. Changes in the financial condition of an issuer, changes
in general economic conditions, and changes in specific economic
conditions that affect a particular type of issuer can impact the
credit quality of an issuer. Lower quality bonds generally tend to be
more sensitive to these changes than higher quality bonds.
PREPAYMENT RISK. Many types of debt securities, including mortgage
securities, are subject to prepayment risk. Prepayment risk occurs
when the issuer of a security can prepay principal prior to the
security's maturity. Securities subject to prepayment risk generally
offer less potential for gains during a declining interest rate
environment, and similar or greater potential for loss in a rising
interest rate environment. In addition, the potential impact of
prepayment features on the price of a debt security may be difficult
to predict and result in greater volatility.
FIDELITY'S APPROACH TO BOND FUNDS. In managing bond funds, FMR selects
a benchmark index that is representative of the universe of securities
in which the fund invests. FMR uses this benchmark as a guide in
structuring the fund and selecting its investments.
FMR allocates assets among different market sectors (for example,
corporate or government securities) and different maturities based on
its view of the relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the universe of securities in which the fund may invest. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
THE FUND seek s high current income by investing in U.S.
dollar-denominated investment-grade debt securities under normal
conditions. The benchmark index for the fund is the Lehman Brothers
Intermediate Government/Corporate Bond Index, a market value weighted
benchmark of government and investment-grade corporate fixed-rate debt
issues with maturities between one and 10 years. FMR manages the fund
to have similar overall interest rate risk to the i ndex. As of
April 30, 1998, the dollar-weighted average maturity of the fund and
the i ndex was approximately 5.1 and 4.28 years,
respectively. In addition, the fund normally maintains a
dollar-weighted average maturity between three and 10 years.
In determining a security's maturity for purposes of calculating a
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated final maturity.
FMR may use various investment techniques to hedge a portion of
the fund's risks, but there is no guarantee that these strategies will
work as FMR intends. When you sell your shares of the fund, they may
be worth more or less than what you paid for them.
FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without
limitation in investment-grade money market or short-term debt
instruments for temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of the fund's limitations and more
detailed information about the fund's investments are contained in the
fund's SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with the fund's
investment objective and policies and that doing so will help the fund
achieve its goal. Fund holdings and recent investment strategies are
detailed in the fund's financial reports, which are sent to
shareholders twice a year.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers
to borrow money from investors. The issuer generally pays the investor
a fixed, variable, or floating rate of interest, and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon
bonds, do not pay current interest, but are sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes.
In addition, bond prices are also affected by the credit quality of
the issuer. Investment-grade debt securities are medium- and
high-quality securities. Some, however, may possess speculative
characteristics, and may be more sensitive to economic changes and to
changes in the financial condition of issuers.
RESTRICTIONS: The fund normally invests in investment-grade
securities, but reserves the right to invest up to 5% of its assets in
below investment-grade securities (sometimes called "junk bonds"). A
security is considered to be investment-grade if it is rated
investment-grade by Moody's Investors Service, Standard & Poor's, Duff
& Phelps Credit Rating Co., or Fitch IBCA, Inc., or is unrated but
judged to be of equivalent quality by FMR.
U.S. GOVERNMENT SECURITIES are high-quality debt instruments issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of
the U.S. Government. Not all U.S. Government securities are backed by
the full faith and credit of the United States. For example, U.S.
Government securities such as those issued by Fannie Mae are supported
by the instrumentality's right to borrow money from the U.S. Treasury
under certain circumstances. Other U.S. Government securities, such as
those issued by the Federal Farm Credit Banks Funding Corporation, are
supported only by the credit of the entity that issued them.
FOREIGN EXPOSURE. Securities issued by foreign entities, including
foreign governments, corporations, and banks, and securities issued by
U.S. entities with substantial foreign operations may involve
additional risks and considerations. Extensive public information
about the foreign entity may not be available, and unfavorable
political, economic, or governmental developments in the foreign
country involved could affect the repayment of principal or payment of
interest.
ASSET-BACKED SECURITIES include interests in pools of debt securities,
commercial or consumer loans, or other receivables. The value of these
securities depends on many factors, including changes in interest
rates, the availability of information concerning the pool and its
structure, the credit quality of the underlying assets, the market's
perception of the servicer of the pool, and any credit enhancement
provided. In addition, these securities may be subject to prepayment
risk.
MORTGAGE SECURITIES include interests in pools of commercial or
residential mortgages, and may include complex instruments such as
collateralized mortgage obligations and stripped mortgage-backed
securities. Mortgage securities may be issued by agencies or
instrumentalities of the U.S. Government or by private entities.
The price of a mortgage security may be significantly affected by
changes in interest rates. Some mortgage securities may have a
structure that makes their reaction to interest rates and other
factors difficult to predict, making their price highly volatile.
Also, mortgage securities, especially stripped mortgage-backed
securities, are subject to prepayment risk. Securities subject to
prepayment risk generally offer less potential for gains during a
declining interest rate environment, and similar or greater potential
for loss in a rising interest rate environment.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other debt securities, although stripped
securities may be more volatile, and the value of certain types of
stripped securities may move in the same direction as interest rates.
U.S. Treasury securities that have been stripped by a Federal Reserve
Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices,
interest rates, or other factors that affect security values. These
techniques may involve derivative transactions such as buying and
selling options and futures contracts, entering into swap agreements
and purchasing indexed securities.
FMR can use these practices to adjust the risk and return
characteristics of the fund's portfolio of investments. If FMR judges
market conditions incorrectly or employs a strategy that does not
correlate well with the fund's investments, these techniques could
result in a loss, regardless of whether the intent was to reduce risk
or increase return. These techniques may increase the volatility of
the fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these techniques could
result in a loss if the counterparty to the transaction does not
perform as promised.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities, and some
other securities, may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to the fund.
RESTRICTIONS: The fund may not invest more than 10% of its assets
in illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The market
value of the security could change during this period.
OTHER INSTRUMENTS may include real estate-related instruments.
CASH MANAGEMENT. The fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income while maintaining a stable $1.00
share price. A major change in interest rates or a default on the
money market fund's investments could cause its share price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one
industry. Economic, business, or political changes can affect all
securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, the fund may
not invest more than 5% in the securities of any one issuer. This
limitation does not apply to U.S. Government securities.
The fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
BORROWING. The fund may borrow from banks or from other funds advised
by FMR or its affiliates , or through reverse repurchase
agreements. If the fund borrows money, its share price may be subject
to greater fluctuation until the borrowing is paid off. If the fund
makes additional investments while borrowings are outstanding, this
may be considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a
means of earning income. This practice could result in a loss or a
delay in recovering the fund's securities. The fund may also lend
money to other funds advised by FMR or its affiliates.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of the
fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
The fund seeks a high level of current income by investing primarily
in investment-grade, fixed-income obligations.
With respect to 75% of total assets, the fund may not invest more
than 5% in the securities of any one issuer. This limitation does
not apply to U.S. Government securities.
The fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
The fund may borrow only for temporary or emergency purposes, but not
in an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of the fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily
operations. Expenses paid out of the fund's assets are reflected in
its share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. The fund also pays OTHER EXPENSES,
which are explained on page .
FMR may, from time to time, agree to reimburse the fund for management
fees and other expenses above a specified limit. FMR retains the
ability to be repaid by the fund if expenses fall below the specified
limit prior to the end of the fiscal year. Reimbursement arrangements,
which may be terminated at any time without notice, can decrease the
fund's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee
is calculated by adding a group fee rate to an individual fund fee
rate, multiplying the result by the fund's monthly average net assets
and dividing by twelve.
UNDERSTANDING THE
MANAGEMENT FEE
The management fee FMR
receives is designed to be
responsive to changes in FMR's
total assets under
management. Building this
variable into the fee
calculation assures
shareholders that they will pay
a lower rate as FMR's assets
under management increase.
(checkmark)
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.37%, and it
drops as total assets under management increase.
For April 1998, the group fee rate was 0.1339 %. The individual
fund fee rate is 0.30%.
The total management fee for the fiscal year ended April 30, 1998 was
0.44 % of the fund's average net assets.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on
issuers based outside the United States. Under the sub-advisory
agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
management fee rate with respect to the fund's investments that the
sub-adviser manages on a discretionary basis.
Beginning January 1, 1999, FIMM will have primary responsibility for
managing the fund's investments. FMR will pay FIMM 50% of its
management fee (before expense reimbursements) for FIMM's services.
OTHER EXPENSES
While the management fee is a significant component of the fund's
annual operating costs, the fund has other expenses as well.
The fund contracts with FSC to perform transfer agency, dividend
disbursing, shareholder servicing, and accounting functions. These
services include processing shareholder transactions, valuing the
fund's investments, handling securities loans, and calculating the
fund's share price and dividends.
For the fiscal year ended April 1998, the fund paid transfer agency
and pricing and bookkeeping fees equal to 0. 22 % of its average
net assets. This amount is before expense reductions, if any.
The fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity. A
broker-dealer may use a portion of the commissions paid by the fund to
reduce the fund's custodian or transfer agent fees.
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. This plan
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with the distribution of fund
shares. FMR directly, or through FDC, may make payments to third
parties, such as banks or broker-dealers, that engage in the sale of,
or provide shareholder support services for, the fund's shares.
Currently, the Board of Trustees has authorized such payments.
The fund's portfolio turnover rate for the fiscal year ended April
1998 was 90 %. This rate varies from year to year.
YOUR ACCOUNT

(CHECKMARK)
Fidelity Facts
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 225
(solid bullet) Assets in Fidelity mutual
funds: over $595 billion
(solid bullet) Number of shareholder
accounts: over 37 million
(solid bullet) Number of investment ana
lysts and portfolio managers:
over 250
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the fund through a retirement program, you may be
subject to additional fees. For more information, please refer to your
program materials, contact your employer, call your retirement
benefits number , visit Fidelity's Web site at www.fidelity.com, or
contact Fidelity directly, as appropriate.

WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
Retirement plans provide individuals with tax-advantaged ways to save
for retirement, either with tax-deductible contributions or tax-free
growth. Retirement accounts require special applications and typically
have lower minimums.
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow
individuals under age 70 with compensation to contribute up to $2,000
per tax year. Married couples can contribute up to $4,000 per tax
year, provided no more than $2,000 is contributed on behalf of either
spouse. (These limits are aggregate for Traditional and Roth IRAs.)
Contributions may be tax-deductible, subject to certain income limits.
(solid bullet) ROTH IRAS allow individuals to make non-deductible
contributions of up to $2,000 per tax year. Married couples can
contribute up to $4,000 per tax year, provided no more than $2,000 is
contributed on behalf of either spouse. (These limits are aggregate
for Traditional and Roth IRAs.) Eligibility is subject to certain
income limits. Qualified distributions are tax-free.
(solid bullet) ROTH CONVERSION IRAS allow individuals with assets held
in a Traditional IRA or Rollover IRA to convert those assets to a Roth
Conversion IRA. Eligibility is subject to certain income limits.
Qualified distributions are tax-free.
(solid bullet) ROLLOVER IRAS help retain special tax advantages for
certain eligible rollover distributions from employer-sponsored
retirement plans.
(solid bullet) 401(K) PLANS, and certain other 401(a)-qualified
plans, are employer-sponsored retirement plans that allow employer
contributions and may allow employee after-tax contributions. In
addition, 401(k) plans allow employee pre-tax (tax-deferred)
contributions. Contributions to these plans may be tax-deductible to
the employer.
(solid bullet) KEOGH PLANS are generally profit sharing or money
purchase pension plans that allow self-employed individuals or
small business owners to make tax-deductible contributions for
themselves and any eligible employees.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employment income (and their eligible employees) with many
of the advantages of a 401(k) plan, but with fewer administrative
requirements.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employment income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS) allow employees of
businesses with 25 or fewer employees to contribute a percentage of
their wages on a tax-deferred basis. These plans must have been
established by the employer prior to January 1, 1997.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of
501(c)(3) tax-exempt institutions, including schools, hospitals, and
other charitable organizations.
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS) are available
to employees of most state and local governments and their agencies
and to employees of tax-exempt institutions.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Requires a special application.

HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of the fund is the fund's net asset value
per share (NAV). The fund's shares are sold without a sales charge.
Your shares will be purchased at the next NAV calculated after your
investment is received in proper form. The fund's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
The fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page 169 . Purchase orders may be refused if, in FMR's
opinion, they would disrupt management of the fund.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application
and mail it along with your check. You may also open your account in
person or by wire as described on page 160. If there is no application
accompanying this prospectus, call 1-800-544-8888 or visit
Fidelity's Web site at www.fidelity.com for an application.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(solid bullet) Mail in an application with a check, or
(solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-ADVANTAGED RETIREMENT PLAN, such as
an IRA, for the first time, you will need a special application.
Retirement investing also involves its own investment procedures. Call
1-800-544-8888 or visit Fidelity's Web site at www.fidelity.com
for more information and a retirement application.
If you buy shares by check or Fidelity Money LineR, and then sell
those shares by any method other than by exchange to another Fidelity
fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS

TO OPEN AN ACCOUNT $2,500
For certain Fidelity retirement accounts A $500
TO ADD TO AN ACCOUNT $250
For certain Fidelity retirement accounts A $250
Through regular investment plans B $100
MINIMUM BALANCE $2,000
For certain Fidelity retirement accounts A $500
A THESE LOWER MINIMUMS APPLY TO FIDELITY TRADITIONAL IRA, ROTH
IRA, ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.
B FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE
REFER TO "INVESTOR SERVICES," PAGE 163 .
There is no minimum account balance or initial or subsequent
investment minimum for investments through Fidelity Portfolio Advisory
ServicesSM, a qualified state tuition program, certain Fidelity
retirement accounts funded through salary deduction, or accounts
opened with the proceeds of distributions from such retirement
accounts. Refer to the program materials for details. In addition, the
fund reserves the right to waive or lower investment minimums in other
circumstances.

<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

Phone (solid bullet) Exchange from another (solid bullet) Exchange from another
1-800-544-7777 Fidelity fund account with Fidelity fund account
(Phone_graphic) the same registration, with the same
including name, address, registration, including
and taxpayer ID number. name, address, and
taxpayer ID number.
(solid bullet) Use Fidelity Money Line
to transfer from your
bank account. Call before
your first use to verify
that this service is in
place on your account.
Maximum Money Line:
up to $100,000.

Internet (solid bullet) Complete and sign the (solid bullet) Exchange from another
www.fidelity.com application. Make your Fidelity fund account
(Internet_graphic) check payable to the with the same
complete name of the registration, including
fund. Mail to the address name, address, and
indicated on the taxpayer ID number.
application. (solid bullet) Use Fidelity Money Line
to transfer from your
bank account. Visit
Fidelity's Web site before
your first use to verify
that this service is in
place on your account.
Maximum Money Line:
up to $100,000.

Mail (solid bullet) Complete and sign the (solid bullet) Make your check payable
(Mail_graphic) application. Make your to the complete name of
check payable to the the fund. Indicate your
complete name of the fund account number on
fund. Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
(solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.

In Person (solid bullet) Bring your application and (solid bullet) Bring your check to a
(Hand_graphic) check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center
nearest you.

Wire (solid bullet) Call 1-800-544-7777 to (solid bullet) Not available for
(Wire_graphic) set up your account and to retirement accounts.
arrange a wire transaction. (solid bullet) Wire to:
Not available for Bankers Trust Company,
retirement accounts. Bank Routing
(solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Company, Account #00163053.
Bank Routing Specify the complete
#021001033, Account name of the fund and
#00163053. Specify the include your account
complete name of the fund number and your name.
and include your new
account number and your
name.

Automatically (solid bullet) Not available. (solid bullet) Use Fidelity Automatic
(Automatic_graphic) Account Builder. Sign up
for this service when
opening your account,
visit Fidelity's Web site at
www.fidelity.com to
obtain the form to add the
service, or call
1-800-544-6666 to add
the service.

TDD - Service for the Deaf and Hearing-Impaired: 1-800-544-0118

</TABLE>

HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of the fund is the fund's NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form. The fund's NAV is normally calculated each
business day at 4:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to other Fidelity funds, which
can be requested by phone , in writing , or through Fidelity's
Web site . Call 1-800-544-6666 for a retirement distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$2,000 worth of shares in the account to keep it open ($500 for
retirement accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to
sign up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(solid bullet) You wish to redeem more than $100,000 worth of shares,
(solid bullet) Your account registration has changed within the last
30 days,
(solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(solid bullet) The check is being made payable to someone other than
the account owner, or
(solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(solid bullet) Your name,
(solid bullet) The fund's name,
(solid bullet) Your fund account number,
(solid bullet) The dollar amount or number of shares to be redeemed,
and
(solid bullet) Any other applicable requirements listed in the table
that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it
to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited
number of checks. Do not, however, try to close out your account by
check.

<TABLE>
<CAPTION>
<S> <C> <C>
ACCOUNT TYPE SPECIAL REQUIREMENTS

Mail or in Person Individual, Joint (solid bullet) The letter of instruction must
(Mail_graphic) Tenant, Sole be signed by all persons
(Hand_graphic) Proprietorship, required to sign for
UGMA, UTMA transactions, exactly as their
names appear on the account.
Retirement account (solid bullet) The account owner should
complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Trust (solid bullet) The trustee must sign the letter
indicating capacity as trustee.
If the trustee's name is not in
the account registration,
provide a copy of the trust
document certified within the
last 60 days.
Business or (solid bullet) At least one person authorized
Organization by corporate resolution to act
on the account must sign the
letter.
(solid bullet) Include a corporate resolution
with corporate seal or a
signature guarantee.
Executor, (solid bullet) Call 1-800-544-6666 for
Administrator, instructions.
Conservator,
Guardian

Wire All account types (solid bullet) You must sign up for the wire
(Wire_graphic) except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(solid bullet) Your wire redemption request
must be received in proper
form by Fidelity before 4:00
p.m. Eastern time for money to
be wired on the next business
day.

Check All account types (solid bullet) Minimum check: $500.
(Check_graphic) (solid bullet) All account owners must sign a
signature card to receive a
checkbook.

TDD - Service for the Deaf and Hearing-Impaired: 1-800-544-0118

</TABLE>

(CHECKMARK)
24-Hour Service
Account Assistance
1-800-544-6666
Account Transactions
1-800-544-7777
Product Information
1-800-544-8888
Retirement Account Assistance
1-800-544-4774
TouchTone Xpressr
1-800-544-5555
Web Site
www.fidelity.com
Automated service
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call 1-800-544-6666 if you need copies
of financial reports, prospectuses, or historical account information.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's Web site. To participate in our electronic
delivery program, call 1-800-544-6666 or visit Fidelity's Web site at
www.fidelity.com for more information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone , in writing , or through
Fidelity's Web site .
Note that exchanges out of the fund are limited to four per calendar
year, and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or
revoked, see page 169.
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from
your account.
FIDELITY MONEY LINE enables you to transfer money by phone between
your bank account and your fund account. Most transfers are complete
within three business days of your call.

REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money
regularly. Fidelity offers convenient services that let you transfer
money into your fund account, or between fund accounts, automatically.
While regular investment plans do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Certain restrictions apply for
retirement accounts. Call 1-800-544-6666 or visit Fidelity's Web
site at www.fidelity.com for more information.

<TABLE>
<CAPTION>
<S> <C> <C>
REGULAR INVESTMENT PLANS

FIDELITY AUTOMATIC ACCOUNT BUILDER (registered trademark)
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (solid bullet) For a new account, complete the appropriate
quarterly section on the fund application.
(solid bullet) For existing accounts, call 1-800-544-6666
or visit Fidelity's Web site at
www.fidelity.com for an application.
(solid bullet) To change the amount or frequency of your
investment, call 1-800-544-6666 at least
three business days prior to your next
scheduled investment date.

DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA

MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 or visit
Fidelity's Web site at www.fidelity.com for
an authorization form.
(solid bullet) Changes require a new authorization form.

FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND

MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (solid bullet) To change the amount or frequency of your
annually investment, call 1-800-544-6666.

A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE CHOICE
FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.

</TABLE>

SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment income
and capital gains to shareholders each year. Income dividends are
declared daily and paid monthly. Capital gains are normally
distributed in June and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on
the application, call 1-800-544-6666 for instructions. The fund offers
four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each
dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
If you select distribution option 2 or 3 and the U.S. Postal
Service does not deliver your checks, your election may be converted
to the Reinvestment Option. You will not receive interest on amounts
represented by uncashed distribution checks. To change your
distribution option, call Fidelity at 1-800-544-6666.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions will be reinvested at the NAV as of
the date the fund deducts the distribution from its NAV. The mailing
of distribution checks will begin within seven days.
TAXES
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you are
entitled to your share of the
fund's net income and gains
on its investments. The fund
passes its earnings along to its
investors as DISTRIBUTIONS.
The fund earns interest from its
investments. These are passed
along as DIVIDEND
DISTRIBUTIONS. The fund may
realize capital gains if it sells
securities for a higher price
than it paid for them. These
are passed along as CAPITAL
GAIN DISTRIBUTIONS.
(checkmark)
As with any investment, you should consider how your investment in the
fund will be taxed. If your account is not a tax-advantaged retirement
account, you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income
tax, and may also be subject to state or local taxes. If you live
outside the United States, your distributions could also be taxed by
the country in which you reside. Your distributions are taxable when
they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are
taxable as if they were paid on December 31.
For federal tax purposes, the fund's income and short-term capital
gains are distributed as dividends and taxed as ordinary income;
capital gain distributions are taxed as long-term capital gains. Every
January, Fidelity will send you and the IRS a statement showing the
tax characterization of distributions paid to you in the previous
year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price
you receive when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price. You will also receive a consolidated transaction statement
every January. However, it is up to you or your tax preparer to
determine whether this sale resulted in a capital gain and, if so, the
amount of tax to be paid. Be sure to keep your regular account
statements; the information they contain will be essential in
calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when the fund has realized but
not yet distributed capital gains, you will pay the full price for the
shares and then receive a portion of the price back in the form of a
taxable distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the
fund and its investments, and these taxes generally will reduce the
fund's distributions.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
the fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates the fund's NAV as of the close
of business of the NYSE, normally 4:00 p.m. Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the
number of shares outstanding.
The fund's assets are valued on the basis of information furnished by
a pricing service or market quotations, if available, or by another
method that the Board of Trustees believes accurately reflects fair
value. Short-term securities with remaining maturities of sixty days
or less for which quotations and information furnished by a pricing
service are not readily available are valued on the basis of amortized
cost. This method minimizes the effect of changes in a security's
market 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. If the values have been materially affected by events occurring
after the closing of a foreign market, assets may be valued by another
method that the Board of Trustees believes accurately reflects fair
value.
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.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to redeem and
exchange by telephone, call Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail or by visiting a Fidelity Investor Center.
THE FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your investment is received in proper
form. Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees the fund or
its transfer agent has incurred.
(small solid bullet) Shares begin to earn dividends on the first
business day following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money
order, U.S. Treasury check, Federal Reserve check, or direct deposit
instead.
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 time when the fund is
priced on the following business day. If payment is not received by
that time, the financial institution could be held liable for
resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper form.
Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed 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.
(small solid bullet) Shares earn dividends through the day of
redemption; however, shares redeemed on a Friday or prior to a holiday
continue to earn dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day
after your phone call.
(small solid bullet) The fund may hold payment on redemptions until it
is reasonably satisfied that investments made by check or Fidelity
Money Line have been collected, which can take up to seven business
days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) If you sell shares by writing a check and the
amount of the check is greater than the value of your account, your
check will be returned to you and you may be subject to additional
charges.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an
annual maximum charge of $24.00 per shareholder. It is expected that
accounts will be valued on the second Friday in November of each year.
Accounts opened after September 30 will not be subject to the fee for
that year. The fee, which is payable to the transfer agent, is
designed to offset in part the relatively higher costs of servicing
smaller accounts. This fee will not be deducted from Fidelity
brokerage accounts, retirement accounts (except non-prototype
retirement accounts), accounts using regular investment plans, or if
total assets with Fidelity exceed $30,000. Eligibility for the $30,000
waiver is determined by aggregating Fidelity accounts maintained by
FSC or FBSI which are registered under the same social security number
or which list the same social security number for the custodian of a
Uniform Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $2,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV on the
day your account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
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. Qualified recipients are
securities dealers who have sold fund shares or others, including
banks and other financial institutions, under special arrangements in
connection with FDC's sales activities. 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.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the
fund for shares of other Fidelity funds. However, you should note the
following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage-point 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 exchange them into a
fund with a 3% sales charge, you would pay an additional 1% sales
charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, the fund reserves the right to
temporarily or permanently terminate the exchange privilege of any
investor 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 counted
together for purposes of the four exchange limit.
(small solid 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.
(small solid bullet) 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 the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) 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 coincides 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 1.00% and trading fees of up to 3.00% of
the amount exchanged. Check each fund's prospectus for details.
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity
Investments, Fidelity Money Line, TouchTone Xpress, Fidelity Automatic
Account Builder, and Directed Dividends are registered trademarks of
FMR Corp.
Portfolio Advisory Services is a service mark of FMR Corp.

This prospectus is printed on recycled paper using soy-based inks.
FIDELITY INTERMEDIATE BOND FUND
A FUND OF FIDELITY COMMONWEALTH TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 19, 1998
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus
(dated June 19, 1998). Please retain this document for future
reference. The fund's Annual Report is a separate document supplied
with this SAI. To obtain a free additional copy of the Prospectus or
an Annual Report, please call Fidelity (registered trademark) at
1-800-544-8888.
TABLE OF CONTENTS PAGE

Investment Policies and Limitations 27

Portfolio Transactions 31

Valuation 32

Performance 32

Additional Purchase, Exchange and Redemption Information 35

Distributions and Taxes 35

FMR 36

Trustees and Officers 36

Management Contract 38

Distribution and Service Plan 40

Contracts with FMR Affiliates 40

Description of the Trust 41

Financial Statements 41

Appendix 41

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company, Inc. (FSC)
IBF-ptb-0698
475964
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 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI 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) act as underwriter (except as it may be deemed such in a sale 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);
(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; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
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 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 lend assets other than
securities to other parties, except by (a) lending money
(up to 7.5% 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.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), 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 was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page .
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help the fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
ASSET-BACKED SECURITIES represent interests in pools of mortgages,
loans, receivables or other assets. Payment of interest and repayment
of principal may be largely dependent upon the cash flows generated by
the assets backing the securities and, in certain cases, supported by
letters of credit, surety bonds, or other credit enhancements.
Asset-backed security values may also be affected by the
creditworthiness of the servicing agent for the pool, the originator
of the loans or receivables, or the entities providing the credit
enhancement. In addition, these securities may be subject to
prepayment risk.
DELAYED-DELIVERY TRANSACTIONS. Securities may be bought and sold on a
delayed-delivery or when-issued basis. These transactions involve a
commitment to purchase or sell specific securities at a predetermined
price or yield, with payment and delivery taking place after the
customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered. The
fund may receive fees or price concessions for entering into
delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, the purchaser
assumes the rights and risks of ownership, including the risks of
price and yield fluctuations and the risk that the security will not
be issued as anticipated. Because payment for the securities is not
required until the delivery date, these risks are in addition to the
risks associated with a fund's investments. If a fund remains
substantially fully invested at a time when delayed-delivery purchases
are outstanding, the delayed-delivery purchases may result in a form
of leverage. When delayed-delivery purchases are outstanding, a fund
will set aside appropriate liquid assets in a segregated custodial
account to cover the purchase obligations. When a fund has sold a
security on a delayed-delivery basis, the fund does not participate in
further gains or losses with respect to the security. If the other
party to a delayed-delivery transaction fails to deliver or pay for
the securities, a fund could miss a favorable price or yield
opportunity or suffer a loss.
A fund may renegotiate a delayed delivery transaction and may sell the
underlying securities before delivery, which may result in capital
gains or losses for the fund.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include 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 is no assurance that
FMR will be able to anticipate these potential events or counter their
effects. In addition, the value of securities denominated in foreign
currencies and of dividends and interest paid with respect to such
securities will fluctuate based on the relative strength of the U.S.
dollar.
The risks of foreign investing may be magnified for investments in
emerging markets, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that
trade a small number of securities.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market 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. A fund may use currency
forward contracts for any purpose consistent with its investment
objective.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or
administer the day-to-day operations of any company. A 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 in which a fund may engage, 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 a 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 a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures
Margin Payments, Limitations on Futures and Options Transactions,
Liquidity of Options and Futures Contracts, Options and Futures
Relating to Foreign Currencies, OTC Options, Purchasing Put and Call
Options, and Writing Put and Call Options.
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.
COMBINED POSITIONS involve purchasing and writing 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, purchasing a put option and writing a
call option on the same underlying instrument would 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, 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 a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund 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 a
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. A 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 a 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.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter 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.
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 a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a 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 a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a 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.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed 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. The fund intends to comply with Rule
4.5 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.
The above limitations on the fund's investments in futures contracts
and options, and the fund's policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
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 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 a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
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. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written 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 a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a 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.
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 (OTC) 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 purchaser or writer 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.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser 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 purchaser 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 purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser 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, 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. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer 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. The writer may seek
to terminate a position in a put option 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, however, the writer
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. When writing an option on a
futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
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 writer 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.
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 a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of a 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 FMR to be illiquid include
repurchase agreements not entitling the holder to repayment of
principal and payment of interest within seven days, non-government
stripped fixed-rate mortgage-backed securities, and over-the-counter
options. Also, FMR may determine some restricted securities,
government-stripped fixed-rate mortgage-backed securities, loans and
other direct debt instruments, emerging market securities, and swap
agreements to be illiquid. However, with respect to over-the-counter
options a 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.
INDEXED SECURITIES are instruments 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.
Mortgage-indexed securities, for example, could be structured to
replicate the performance of mortgage securities and the
characteristics of direct ownership.
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 United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
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.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A 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.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower 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 purchaser 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 purchaser to supply additional
cash to the borrower on demand.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities 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-quality debt securities may fluctuate more than those of
higher-quality 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 the future performance of the high-yield bond market, especially
during periods of economic recession.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. If market
quotations are not available, lower-quality 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 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 liquidity of lower-quality debt
securities and the ability of outside pricing services to value
lower-quality debt securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type. FMR will attempt to identify those
issuers of high-yielding 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.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a 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.
MORTGAGE-BACKED SECURITIES are issued by government and non-government
entities such as banks, mortgage lenders, or other institutions. A
mortgage-backed security is an obligation of the issuer backed by a
mortgage or pool of mortgages or a direct interest in an underlying
pool of mortgages. Some mortgage-backed securities, such as
collateralized mortgage obligations (or "CMOs"), make payments of both
principal and interest at a range of specified intervals; others make
semiannual interest payments at a predetermined rate and repay
principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages, including those
on commercial real estate or residential properties. Stripped
mortgage-backed securities are created when the interest and principal
components of a mortgage-backed security are separated and sold as
individual securities. In the case of a stripped mortgage-backed
security, the holder of the "principal-only" security (PO) receives
the principal payments made by the underlying mortgage, while the
holder of the "interest-only" security (IO) receives interest payments
from the same underlying mortgage.
The value of mortgage-backed securities may change due to shifts in
the market's perception of issuers and changes in interest rates. In
addition, regulatory or tax changes may adversely affect the
mortgage-backed securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued
by government entities, but also may be subject to greater price
changes than government issues. Mortgage-backed securities are subject
to prepayment risk, which is the risk that early principal payments
made on the underlying mortgages, usually in response to a reduction
in interest rates, will result in the return of principal to the
investor, causing it to be invested subsequently at a lower current
interest rate. Alternatively, in a rising interest rate environment,
mortgage-backed security values may be adversely affected when
prepayments on underlying mortgages do not occur as anticipated,
resulting in the extension of the security's effective maturity and
the related increase in interest rate sensitivity of a longer-term
instrument. The prices of stripped mortgage-backed securities tend to
be more volatile in response to changes in interest rates than
those of non-stripped mortgage-backed securities.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. 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. As
protection against the risk that the original seller will not fulfill
its obligation, the securities are held in a separate account at a
bank, marked-to-market daily, and maintained at a value at least equal
to the sale price plus the accrued incremental amount. While it does
not presently appear possible to eliminate all risks from these
transactions (particularly the possibility that the value of the
underlying security will be less than the resale price, as well as
delays and costs to a fund in connection with bankruptcy proceedings),
the fund will engage in repurchase agreement transactions with parties
whose creditworthiness has been reviewed and found satisfactory by
FMR.
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, a 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 it may
be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to
develop, a fund might obtain a less favorable price than prevailed
when it decided to seek registration of the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. While a reverse repurchase
agreement is outstanding, a 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
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR. Such transactions may increase fluctuations in
the market value of fund assets and may be viewed as a form of
leverage.
SECURITIES LENDING. A 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 a 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 a
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 other
eligible securities. Investing this cash subjects that investment, as
well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation
of the credit of a bank or other entity in determining whether to
purchase a security supported by a letter of credit guarantee, put or
demand feature, insurance or other source of credit or liquidity. In
evaluating the credit of a foreign bank or other foreign entities, FMR
will consider whether adequate public information about the entity is
available and whether the entity may be subject to unfavorable
political or economic developments, currency controls, or other
government restrictions that might affect its ability to honor its
commitment.
STRIPPED GOVERNMENT SECURITIES. Stripped government securities are
created by separating the income and principal components of a U.S.
Government security and selling them separately. STRIPS (Separate
Trading of Registered Interest and Principal of Securities) are
created when the coupon payments and the principal payment are
stripped from an outstanding U.S. Treasury security by a Federal
Reserve Bank.
Privately stripped government securities are created when a dealer
deposits a U.S. Treasury security or other U.S. Government security
with a custodian for safekeeping. The custodian issues separate
receipts for the coupon payments and the principal payment, which the
dealer then sells.
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 a fund's exposure to long- or short-term interest
rates (in the United States 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.
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 a 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 a 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 a 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.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
A fund will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap
agreements. If a 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 a 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.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
in the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities are structured with put features
that permit holders to demand payment of the unpaid principal balance
plus accrued interest from the issuers or certain financial
intermediaries.
ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.
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 considers 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; the reasonableness of any
commissions; and, if applicable, arrangements for payment of
fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contract"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges 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; and
the availability of securities or the purchasers or sellers of
securities. In addition, such broker-dealers may furnish analyses and
reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and
effect securities transactions and perform functions incidental
thereto (such as clearance and settlement).
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering
investment management services to th at 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 a fund. The receipt
of such research has not reduced FMR's normal independent research
activities; however, it enables FMR to avoid the additional expenses
that could be incurred if FMR tried to develop comparable information
through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws,
the fund may pay a broker-dealer 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
th at fund or 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
National Financial Services Corporation (NFSC) and Fidelity Brokerage
Services Japan LLC (FBSJ), indirect subsidiaries of FMR Corp.,
if the commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers
(including affiliates of FMR) who have entered into arrangements with
FMR under which the broker-dealer allocates a portion of the
commissions paid by a fund toward the reduction of that fund's
expenses. The transaction quality must, however, be comparable to
those of other qualified broker-dealers.
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, unless certain
requirements are satisfied. Pursuant to such requirements, the Board
of Trustees has authorized NFSC to execute portfolio transactions on
national securities exchanges in accordance with approved procedures
and applicable SEC rules.
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.
For the fiscal periods ended April 30, 1998 and 1997, the fund's
portfolio turnover rates were 90 % and 116%, respectively.
Because a high turnover rate increases transaction costs and may
increase taxable gains, FMR carefully weighs the anticipated benefits
of short-term investing against these consequences.
F or the fiscal years ended April 1998, 1997, and 1996, the fund
paid no brokerage commissions.
During the fiscal year ended April 1998, the fund paid no brokerage
commissions to firms that provided research services.
The Trustees of the fund have approved procedures in conformity
with Rule 10f-3 under the 1940 Act whereby a fund may purchase
securities that are offered in underwritings in which an affiliate of
FMR participates. These procedures prohibit the fund from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the fund could purchase in the underwriting.
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 or its affiliates ,
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 and accounts are managed by the same
investment adviser, particularly when the same security is suitable
for the investment objective of more than one fund or account.
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 procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the 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
FSC normally determines the fund's net asset value per share (NAV) as
of the close of the New York Stock Exchange (NYSE) (normally 4:00 p.m.
Eastern time). The valuation of portfolio securities is determined as
of this time for the purpose of computing the fund's NAV.
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Fixed-income
securities and other assets for which market quotations are readily
available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets.
Or, fixed-income securities and convertible securities may be valued
on the basis of information furnished by a pricing service that uses a
valuation matrix which incorporates both dealer-supplied valuations
and electronic data processing techniques. Use of pricing services has
been approved by the Board of Trustees. A number of pricing services
are available, and the fund may use various pricing services or
discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available. Securities of other open-end investment
companies are valued at their respective NAVs.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the
close of the NYSE using the last quoted price on the local currency
and then translates the value of foreign securities from their local
currencies into U.S. dollars. Any changes in the value of forward
contracts due to exchange rate fluctuations and days to maturity are
included in the calculation of NAV. If an extraordinary event that is
expected to materially affect the value of a portfolio security occurs
after the close of an exchange on which that security is traded, then
that security will be valued as determined in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value. In addition, securities and other assets for which
there is no readily available market value may be valued in good faith
by a committee appointed by the Board of Trustees. The procedures set
forth above need not be used to determine the value of the securities
owned by the fund if, in the opinion of a committee appointed by the
Board of Trustees, some other method would more accurately reflect the
fair market value of such securities.
PERFORMANCE
The fund may quote 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,
yield, and total return 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.
YIELD CALCULATIONS. Yields for the fund are computed by dividing
the fund's interest and income for a given 30-day or one-month period,
net of expenses, by the average number of shares entitled to receive
distributions during the period, dividing this figure by the fund's
NAV at the end of the period, and annualizing the result (assuming
compounding of income) in order to arrive at an annual percentage
rate. Income is calculated for purposes of yield quotations in
accordance with standardized methods applicable to all stock and bond
funds. In general, interest income is reduced with respect to bonds
trading at a premium over their par value by subtracting a portion of
the premium from income on a daily basis, and is increased with
respect to bonds trading at a discount by adding a portion of the
discount to daily income. For the fund's investments denominated in
foreign currencies, income and expenses are calculated first in their
respective currencies, and then are converted to U.S. dollars, either
when they are actually converted or at the end of the 30-day or one
month period, whichever is earlier. Income is adjusted to reflect
gains and losses from principal repayments received by a fund with
respect to mortgage-related securities and other asset-backed
securities. Other capital gains and losses generally are excluded from
the calculation as are gains and losses from currency exchange rate
fluctuations.
Income calculated for the purposes of calculating the fund's yield
differs from income as determined for other accounting purposes.
Because of the different accounting methods used, and because of the
compounding of income assumed in yield calculations, the fund's yield
may not equal its distribution rate, the income paid to your account,
or the income reported in the fund's financial statemen ts.
In calculating the fund's yield, a fund may from time to time use a
portfolio security's coupon rate instead of its yield to maturity in
order to reflect the risk premium on that security. This practice will
have the effect of reducing the fund's yield.
Yield information may be useful in reviewing the fund's performance
and in providing a basis for comparison with other investment
alternatives. However, the fund's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates
the fund's yield will tend to be somewhat higher than prevailing
market rates, and in periods of rising interest rates the fund's yield
will tend to be somewhat lower. Also, when interest rates are falling,
the inflow of net new money to the fund from the continuous sale of
its shares will likely be invested in instruments producing lower
yields than the balance of the fund's holdings, thereby reducing the
fund's current yield. In periods of rising interest rates, the
opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect
all aspects of the fund's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the fund's
NAV over a stated period. Average annual total 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 total return
of 100% over ten years would produce an average annual total return of
7.18%, which is the steady annual rate of return that would equal 100%
growth on a compounded basis in ten years. While average annual total
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
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total 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. Total returns may be quoted on a before-tax or
after-tax basis. Total returns, yields, 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.
CALCULATING HISTORICAL FUND RESULTS. The following table
shows performance for the fund calculated including certain fund
expenses.
HISTORICAL FUND RESULTS. The following table show s the fund's
yield and total return for periods ended April 30, 1998.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns

Thirty-Day One Five Ten One Five Ten
Yield Year Years Years Year Years Years

Intermediate
Bond 5.63 % 8.70 % 5.95 % 7.89 % 8.70 % 33.48 % 113.77 %

</TABLE>

Note: If FMR had not reimbursed certain fund expenses during these
periods, the fund's total returns would have been lower.
The following table shows the income and capital elements of the
fund's cumulative total return. The table compares the fund's return
to the record of the Standard & Poor's 500 Index (S&P 500), the Dow
Jones Industrial Average (DJIA), and the cost of living, as measured
by the Consumer Price Index (CPI), over the same period. The CPI
information is as of the month-end closest to the initial investment
date for the fund. The S&P 500 and DJIA comparisons are provided to
show how the fund's total return compared to the record of a broad
unmanaged index of common stocks and a narrower set of stocks of major
industrial companies, respectively, over the same period. Because the
fund invests in fixed-income securities, common stocks represent a
different type of investment from the fund. Common stocks generally
offer greater growth potential than the fund, but generally experience
greater price volatility, which means greater potential for loss. In
addition, common stocks generally provide lower income than a
fixed-income investment such as the fund. The S&P 500 and DJIA returns
are based on the prices of unmanaged groups of stocks and, unlike the
fund's returns, do not include the effect of brokerage commissions or
other costs of investing.
During the 10-year period ended April 30, 1998, a hypothetical $10,000
investment in Intermediate Bond would have grown to $ 21,377 ,
assuming all distributions were reinvested. Total returns are based
on past results and are not an indication of future performance.
Tax consequences of different investments have not been factored into
the figures below.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INTERMEDIATE BOND INDICES

Year
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions

1998 $ 10,099 $ 10,859 $ 419 $ 21,377 $ 56,624 $ 59,400 $13,877

1997 $ 9,901 $ 9,353 $ 411 $ 19,665 $ 40,140 $ 45,177 $ 13,681

1996 $ 9,990 $ 8,201 $ 358 $ 18,549 $ 32,078 $ 35,167 $ 13,348

1995 $ 9,970 $ 7,034 $ 357 $ 17,361 $ 24,635 $ 26,672 $ 12,972

1994 $ 10,169 $ 6,098 $ 217 $ 16,484 $ 20,973 $ 22,124 $ 12,588

1993 $ 10,636 $ 5,290 $ 89 $ 16,015 $ 19,913 $ 20,035 $ 12,297

1992 $ 10,209 $ 3,977 $ 0 $ 14,186 $ 18,227 $ 19,060 $ 11,913

1991 $ 10,010 $ 2,908 $ 0 $ 12,918 $ 15,981 $ 15,888 $ 11,546

1990 $ 9,632 $ 1,839 $ 0 $ 11,471 $ 13,589 $ 14,073 $ 11,008

1989 $ 9,791 $ 906 $ 0 $ 10,697 $ 12,291 $ 12,340 $ 10,512

</TABLE>

Explanatory Notes: With an initial investment of $10,000 in the fund
on May 1, 1988, the net amount invested in fund shares was $10,000.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $ 21,306 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $ 7,338 for dividends and $ 268 for capital
gain distributions.
PERFORMANCE COMPARISONS. The fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on total return, assume reinvestment of distributions, do
not take sales charges or trading fees into consideration, and are
prepared without regard to tax consequences. Lipper may also rank
based on yiel d. In addition to the mutual fund rankings, the
fund's performance may be compared to stock, bond, and money market
mutual fund performance indices prepared by Lipper or other
organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, the fund's performance may also 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. 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. The fund may advertise risk
ratings, including symbols or numbers, prepared by independent rating
agencies.
The fund's performance may also be compared to that of a benchmark
index representing the universe of securities in which the fund may
invest. The total return of a benchmark index reflects reinvestment of
all dividends and capital gains paid by securities included in the
index. Unlike the fund's returns, however, the index returns do not
reflect brokerage commissions, transaction fees, or other costs of
investing directly in the securities included in the index.
Intermediate Bond may compare its performance to that of the Lehman
Brothers Intermediate Government/Corporate Bond Index, a market value
weighted performance benchmark for government and corporate fixed-rate
debt issues. Issues included in the index have an outstanding par
value of at least $100 million and maturities between one and 10
years. Government and corporate issues include all public obligations
of the U.S. Treasury (excluding flower bonds and foreign-targeted
issues) and U.S. Government agencies, as well as nonconvertible
investment-grade, SEC-registered corporate debt.
The fund may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, the fund may offer greater liquidity or higher
potential returns than CDs, the fund does not guarantee your principal
or your return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
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.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
The fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
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. In advertising, the fund may also discuss or
illustrate examples of interest rate sensitivity.
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 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 $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of April 30, 1998, FMR advised over $30 billion in
municipal fund assets, $103 billion in money market fund
assets, $4 5 4 billion in equity fund assets, $73 billion
in international fund assets, and $29 billion in Spartan fund assets.
The fund may reference the growth and variety of money market mutual
funds and the adviser's innovation and participation in the industry.
The equity funds under management 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. FMR, its subsidiaries, and affiliates maintain a
worldwide information and communications network for the purpose of
researching and managing investments abroad.
In addition to performance rankings, the fund may compare its total
expense ratio to the average total expense ratio of similar funds
tracked by Lipper. The fund's total expense ratio is a significant
factor in comparing bond and money market investments because of its
effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION 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
1998: New Year's Day, Martin Luther King's Birthday, Presidents' Day,
Good Friday, Memorial Day, 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. In addition, on days when the Federal
Reserve Wire System is closed, federal funds wires cannot be sent.
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. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
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 the 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, the 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 administrative 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 the rules
and regulations thereunder, 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
DIVIDENDS. Because the fund's income is primarily derived from
interest, dividends from the fund generally will not quali fy for
the dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do
not qualify for the dividends-received deduction. A portion of the
fund's dividends derived from certain U.S. Government securities 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.
If the fund's distributions exceed its net investment company taxable
income during a taxable year, all or a portion of the distributions
made in the same taxable year would be recharacterized as a return of
capital to shareholders, thereby reducing each shareholder's cost
basis in the fund. Mortgage security paydown gains (losses) on
mortgage securities purchased by the fund on or prior to June 8, 1997
are generally taxable as ordinary income and, therefore, increase
(decrease) taxable dividend distributions. The fund will send each
shareholder a notice in January describing the tax status of dividend
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 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 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.
As of April 30, 1998, the fund had a capital loss carryforward
aggregating approximately $26,316,000. This loss carryforward, of
which $20,683,000 and $5,633,000 will expire on April 30, 2005 and
2006, respectively, is available to offset future capital gains.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments
may also impose taxes on other payments or gains 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, and intends to comply with
other tax rules applicable to regulated investment companies.
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 fund distributions, and shares may
be subject to state and local personal property taxes. Investors
should consult their tax advisers to determine whether a fund is
suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures
for personal investing and restricts certain transactions. For
example, all personal trades in most securities require pre-clearance,
and participation in initial public offerings is prohibited. In
addition, restrictions on the timing of personal investing in relation
to trades by Fidelity funds and on short-term trading have been
adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, 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 and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR. The business address of each Trustee, Member of the
Advisory Board, and officer who is an "interested person" (as defined
in the 1940 Act) is 82 Devonshire Street, Boston, Massachusetts 02109,
which is also the address of FMR. The business address of all the
other Trustees is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Those Trustees who are "interested persons"
by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (67), 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 Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
J. GARY BURKHEAD (56), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (65), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of USA Waste Services,
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
Rio Grande, Inc. (oil and gas production), and Daniel Industries
(petroleum measurement equipment manufacturer). In addition, he is a
member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (66), Trustee. Prior to her retirement in
September 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),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont School
of Business Administration.
ROBERT M. GATES (54), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of LucasVarity PLC
(automotive components and diesel engines), Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment and replacement
products). Mr. Gates also is a Trustee of the Forum for International
Policy and of the Endowment Association of the College of William and
Mary. In addition, he is a member of the National Executive Board of
the Boy Scouts of America.
E. BRADLEY JONES (70), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc. (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (65), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of the National Arts Stabilization Fund, Chairman
of the Board of Trustees of the Greenwich Hospital Association,
Director of the Yale-New Haven Health Services Corp. (1998), a
Member of the Public Oversight Board of the American Institute of
Certified Public Accountants' SEC Practice Section (1995), and as a
Public Governor of the National Association of Securities Dealers,
Inc. (1996).
*PETER S. LYNCH (55), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR 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). 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.
WILLIAM O. McCOY (64), Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (69), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal products, 1992), CUNO,
Inc. (liquid and gas filtration products, 1996), and Associated
Estates Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (65), Trustee (1993), is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997), and
Infomart (marketing services, 1991), a Trammell Crow Co. In addition,
he serves as the Campaign Vice Chairman of the Tri-State United Way
(1993) and is a member of the University of Alabama President's
Cabinet.
*ROBERT C. POZEN (51), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (69), Trustee, 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 ConAgra, Inc. (agricultural products), Georgia Power Company
(electric utility), National Life Insurance Company of Vermont,
American Software, Inc., and AppleSouth, Inc. (restaurants, 1992).
DWIGHT D. CHURCHILL (44), is Vice President of Bond Funds, Group
Leader of the Bond Group, Senior Vice President of FMR (1997), and
Vice President of FIMM (1998). Mr. Churchill joined Fidelity in 1993
as Vice President and Group Leader of Taxable Fixed-Income
Investments.
FRED L. HENNING, JR. (58), is Vice President of Fidelity's
Fixed-Income Group (1995), Senior Vice President of FMR (1995), and
Senior Vice President of FIMM (1998). Before assuming his current
responsibilities, Mr. Henning was head of Fidelity's Money Market
Division.
CHRISTINE JONES THOMPSON (39), is Vice President of Fidelity
Intermediate Bond Fund (1997), and other funds advised by FMR. Prior
to her current responsibilities, Ms. Thompson managed a variety of
Fidelity funds.
ERIC D. ROITER (49), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997). Prior
to joining Fidelity, Mr. Roiter was a partner at Debevoise & Plimpton
(1981-1997) and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981).
RICHARD A. SILVER (51), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
JOHN H. COSTELLO (51), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of the fund for his
or her services for the fiscal year ended April 30, 1998 , or
calendar year ended December 31, 1997, as applicable.
COMPENSATION TABLE

<TABLE>
<CAPTION>
<S> <C> <C>
Trustees Aggregate Total
and Compensation Compensation
Members of the Advisory Board from from the
Intermediate BondB,C ,D Fund Complex*,A

J. Gary Burkhead** $ 0 $ 0

Ralph F. Cox $ 1,222 $ 214,500

Phyllis Burke Davis $ 1,222 $ 210,000

Robert M. Gates*** $ 1,247 $ 176,000

Edward C. Johnson 3d** $ 0 $ 0

E. Bradley Jones $ 1,222 $ 211,500

Donald J. Kirk $ 1,222 $ 211,500

Peter S. Lynch** $ 0 $ 0

William O. McCoy**** $ 1,247 $ 214,500

Gerald C. McDonough $ 1,526 $ 264,500

Marvin L. Mann $ 1,206 $ 214,500

Robert C. Pozen** $ 0 $ 0

Thomas R. Williams $ 1,222 $ 214,500

</TABLE>

* Information is for the calendar year ended December 31, 1997 for 230
funds in the complex.
** Interested Trustees of the fund and Mr. Burkhead are compensated by
FMR.
*** Mr. Gates was appointed to the Board of Trustees effective March
1, 1997.
**** Mr. McCoy was appointed to the Board of Trustees effective
January 1, 1997.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $62,500; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,699; Marvin L. Mann, $53,699; and Thomas R.
Williams, $62,462.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $ 577 ; Phyllis Burke
Davis, $ 577 ; Robert M. Gates, $ 582 ; E. Bradley Jones,
$ 577 ; Donald J. Kirk, $ 577 ; William O. McCoy,
$ 582 ; Gerald C. McDonough, $ 673 ; Marvin L. Mann,
$ 577 ; and Thomas R. Williams, $ 577 .
D Certain of the non-interested Trustees' aggregate compensation from
the fund includes accrued voluntary deferred compensation as
follows: Marvin L Mann, $483; Ralph F. Cox, $483; Thomas R.
Williams, $483; William O. McCoy, $151.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of April 30, 1998, the Trustees, Members of the Advisory Board,
and officers of the fund owned, in the aggregate, less than 1% of the
fund's total outstanding shares.
MANAGEMENT CONTRACT
FMR is the fund's manager pursuant to a management contract dated
December 1, 1994, which was approved by shareholders on November 16,
1994.
MANAGEMENT SERVICES. The fund employs FMR to furnish investment
advisory and other services. Under the terms of 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,
compensates all officers of the fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of the
fund 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 securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for the fund; and furnishing
reports, evaluations, and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, pricing and bookkeeping agent, and
securities lending agent, the fund pays all of its expenses that are
not assumed by those parties. The fund pays for the typesetting,
printing, and mailing of its proxy materials to shareholders, legal
expenses, and the fees of the custodian, auditor and non-interested
Trustees. The fund's management contract further provides that the
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to
shareholders; however, under the terms of the fund's transfer agent
agreement, the transfer agent bears the costs 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
securities laws and making necessary filings under state securities
laws. The fund is also liable for such non-recurring 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 its officers and
Trustees with respect to litigation.
MANAGEMENT FEE. For the services of FMR under the management contract,
the fund pays FMR a monthly management fee which has two components: a
group fee rate and an individual fund fee rate.
On January 1, 1996, FMR voluntarily modified the breakpoints in the
group fee rate schedule. The revised group fee rate schedule, on the
following page, provides for lower management fee rates as FMR's
assets under management increase.
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.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Annualized Group Net Effective Annual Fee
Assets Rate Assets Rate

0 - $3 billion .3700% $ 0.5 billion .3700%

3 - 6 .3400 25 .2664

6 - 9 .3100 50 .2188

9 - 12 .2800 75 .1986

12 - 15 .2500 100 .1869

15 - 18 .2200 125 .1793

18 - 21 .2000 150 .1736

21 - 24 .1900 175 .1690

24 - 30 .1800 200 .1652

30 - 36 .1750 225 .1618

36 - 42 .1700 250 .1587

42 - 48 .1650 275 .1560

48 - 66 .1600 300 .1536

66 - 84 .1550 325 .1514

84 - 120 .1500 350 .1494

120 - 156 .1450 375 .1476

156 - 192 .1400 400 .1459

192 - 228 .1350 425 .1443

228 - 264 .1300 450 .1427

264 - 300 .1275 475 .1413

300 - 336 .1250 500 .1399

336 - 372 .1225 525 .1385

372 - 408 .1200 550 .1372

408 - 444 .1175

444 - 480 .1150

480 - 516 .1125

Over 516 .1100

The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ 626 billion of group net assets - the approximate
level for April 1998 - was 0.1339% , which is the weighted
average of the respective fee rates for each level of group net assets
up to $ 626 billion.
The fund's individual fund fee rate is 0.30%. Based on the average
group net assets of the funds advised by FMR for April 1998, the
fund's annual management fee rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee Rate

Intermediate Bond 0. 1339 % + 0.30% = 0. 4339 %

</TABLE>

One-twelfth of this annual management fee rate is applied to the
fund's net assets averaged for the most recent month, giving a dollar
amount, which is the fee for that month.
For the fiscal years ended April 30, 1998, 1997, and 1996, the fund
paid FMR management fees of $ 13,730,000 , $ 13,342,000 ,
and $ 12,219,000 , respectively.
FMR may, from time to time, voluntarily reimburse all or a portion of
the fund's operating expenses (exclusive of interest, taxes,
brokerage commissions and extraordinary expenses) , which is subject
to revision or termination . FMR retains the ability to be repaid
for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year.
Expense reimbursements by FMR will increase the fund's total returns
and yield, and repayment of the reimbursement by the fund will lower
its total returns and yield.
SUB-ADVISERS. On behalf of Intermediate Bond, FMR has entered into
sub-advisory agreements with FMR U.K. and FMR Far East. Pursuant to
the sub-advisory agreements, FMR may receive investment advice and
research services outside the United States from the sub-advisers.
On behalf of the fund, FMR may also grant the sub-advisers investment
management authority as well as the authority to buy and sell
securities if FMR believes it would be beneficial to the fund.
Currently, FMR U.K. and FMR Far East each focus on issuers in
countries other than the United States such as those in Europe, Asia,
and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly
owned subsidiaries of FMR. Under the sub-advisory agreements FMR pays
the fees of FMR U.K. and FMR Far East. For providing non-discretionary
investment advice and research services, FMR pays FMR U.K. and FMR Far
East fees equal to 110% and 105%, respectively, of FMR U.K.'s and FMR
Far East's costs incurred in connection with providing investment
advice and research services.
On behalf of the fund, for providing discretionary investment
management and executing portfolio transactions, FMR pays FMR U.K. and
FMR Far East a fee equal to 50 % of its monthly management fee
rate with respect to the fund's average net assets managed by the
sub-adviser on a discretionary basis.
No fees were paid to the sub-advisers by FMR on behalf of the fund for
the past three fiscal years.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on behalf
of the fund (the Plan) pursuant to Rule 12b-1 under the 1940 Act (the
Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plan, as approved by the Trustees, allows the fund and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the fund of distribution expenses.
Under the Plan, if the payment of management fees by the fund to FMR
is deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. The Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with the distribution of fund shares.
In addition, the Plan provides that FMR, directly or through FDC, may
make payments to third parties, such as banks or broker-dealers, that
engage in the sale of fund shares, or provide shareholder support
services. Currently, the Board of Trustees has authorized such
payments for Intermediate Bond shares.
FMR made no payments either directly or through FDC to third parties
for the fiscal year ended 1998.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that the Plan does not authorize payments by the fund other than
those made to FMR under its management contract with the fund. To the
extent that the Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares may result. Furthermore, certain shareholder support
services may be provided more effectively under the Plan by local
entities with whom shareholders have other relationships.
The Plan was approved by shareholders of Intermediate Bond on November
19, 1986.
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 clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the fund might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. 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.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
CONTRACTS WITH FMR AFFILIATES
The fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreement, FSC performs
transfer agency, dividend disbursing, and shareholder services for the
fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in the fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type (i.e., omnibus or non-omnibus) and, for
non-omnibus accounts, fund type. The account fees are subject to
increase based on postage rate changes.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in a qualified state
tuition program (QSTP), as defined under the Small Business Job
Protection Act of 1996, managed by FMR or an affiliate and each
Fidelity Freedom Fund, a fund of funds managed by an FMR affiliate,
according to the percentage of the QSTP's or Freedom Fund's
assets that is invested in the fund.
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
existing shareholders, with the exception of proxy statements.
The fund has entered into a service agent agreement with FSC. Under
the terms of the agreement, FSC calculates the NAV and dividends for
the fund, maintains the fund's portfolio and general accounting
records, and administers the fund's securities lending program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on the fund's average daily net assets throughout the month.
The annual fee rates for pricing and bookkeeping services are 0.0400%
of the first $500 million of average net assets and 0.0200% of average
net assets in excess of $500 million. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 and a maximum of $800,000 per year.
For the fiscal years ended April 30, 1998, 1997, and 1996, the fund
paid FSC pricing and bookkeeping fees, including reimbursement for
related out-of-pocket expenses, of $ 750,000 , $ 730,000 ,
and $ 649,000 , respectively.
For administering the fund's securities lending program, FSC receives
fees based on the number and duration of individual securities loans.
For the fiscal years ended April 1998, 1997, and 1996, the fund paid
securities lending fees of $ 0 , $ 0 , and $ 1,000 ,
respectively.
The fund has entered into a distribution agreement with FDC, an
affiliate of FMR organized as a Massachusetts corporation on July 18,
1960. FDC is a broker-dealer registered under the Securities Exchange
Act of 1934 and 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 at
NAV. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Intermediate Bond is a fund of Fidelity
Commonwealth Trust, an open-end management investment company
organized as a Massachusetts business trust on November 8, 1974. On
April 11, 1975, the trust's name was changed from Fidelity Investors
Trust to Fidelity Thrift Trust. 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 five funds of the trust: Fidelity Intermediate Bond Fund,
Fidelity Large Cap Stock Fund, Spartan Market Index Fund, Fidelity
Small Cap Selector, 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. As a shareholder, you receive one vote for each dollar value
of net asset value you own. 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
trust or the fund, as determined by the current value of each
shareholder's investment in the fund or trust. If not so terminated,
the trust and its funds will continue indefinitely. Each fund may
invest all of its assets in another investment company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New
York, is custodian of the assets of the fund. The custodian is
responsible for the safekeeping of a fund's assets and the appointment
of any subcustodian banks and clearing agencies. The custodian takes
no part in determining the investment policies of a fund or in
deciding which securities are purchased or sold by a fund. However, a
fund may invest in obligations of the custodian and may purchase
securities from or sell securities to the custodian. The Chase
Manhattan Bank headquartered in New York, also may serve as a
special purpose custodian of certain assets in connection with
repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the
Board of Trustees may, from time to time, conduct transactions with
various banks, including banks serving as custodians for certain funds
advised by FMR. 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 L.L.P. , 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.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the
fiscal year ended April 30, 1998, and report of the auditor, are
included in the fund's Annual Report, which is a separate report
supplied with this SAI. The fund's financial statements, including the
financial highlights, and report of the auditor are incorporated
herein by reference. For a free additional copy of the fund's Annual
Report, contact Fidelity at 1-800-544-8888, 82 Devonshire Street,
Boston, MA 02109.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value
of each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to
this rule.
For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call,
refunding, or redemption provision, the date on which the instrument
will probably be called, refunded, or redeemed may be considered to be
its maturity date. Also, the maturities of mortgage-backed securities,
including collateralized mortgage obligations, and some asset-backed
securities are determined on a weighted average life basis, which is
the average time for principal to be repaid. For a mortgage security,
this average time is calculated by estimating the timing of principal
payments, including unscheduled prepayments, during the life of the
mortgage. The weighted average life of these securities is likely to
be substantially shorter than their stated final maturity.
The descriptions that follow are examples of eligible ratings for the
fund. The fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations
when determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF CORPORATE BONDS
Moody's ratings for obligations with an original remaining maturity in
excess of one year fall within nine categories. They range from Aaa
(highest quality) to C (lowest quality). Moody applies numerical
modifiers of 1, 2, or 3 to each generic rating classification from Aa
through B. The modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks
on the lower end of its generic rating category.
AAA - Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than the Aaa securities.
A - Bonds that are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future.
BAA - Bonds that are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
BA - Bonds that are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B - Bonds that are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
CAA - Bonds that are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect
to principal or interest.
CA - Bonds that are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked short-comings.
C - Bonds that are rated C are the lowest-rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF CORPORATE BONDS
Debt issues may be designated by Standard & Poor's as either
investment grade ("AAA" through "BBB") or speculative grade ("BB"
through "D"). While speculative grade debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major exposures to adverse conditions. Ratings from
AA to CCC may be modified by the addition of a plus sign (+) or minus
sign (-) to show relative standing within the major rating categories.
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher-rated issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher-rated categories.
BB - Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments. The BB rating category is also used
for debt subordinated to senior debt that is assigned an actual or
implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal. The B
rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial, and
economic conditions to meet timely payment of interest and repayment
of principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or
B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC- debt rating. The C
rating may be used to cover a situation where a bankruptcy petition
has been filed but debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest
is being paid.
D - Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
D rating will also be used upon the filing of a bankruptcy petition if
debt service payments are jeopardized.
Fidelity and Fidelity Focus are registered trademarks of FMR
Corp.
The third party marks appearing above are the marks of their
respective owners.
FIDELITY COMMONWEALTH TRUST:
FIDELITY SMALL CAP STOCK FUND AND FIDELITY LARGE CAP STOCK FUND

CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. COVER PAGE

2 A .............................. EXPENSES

B, C .............................. CONTENTS; THE FUNDS AT A GLANCE; WHO MAY WANT
TO INVEST

3 A .............................. FINANCIAL HIGHLIGHTS

B .............................. *

C, D .............................. PERFORMANCE

4 A I............................. CHARTER

II........................... THE FUNDS AT A GLANCE; INVESTMENT PRINCIPLES AND
RISKS

B .............................. INVESTMENT PRINCIPLES AND RISKS

C .............................. WHO MAY WANT TO INVEST; INVESTMENT PRINCIPLES
AND RISKS

5 A .............................. CHARTER

B I............................. COVER PAGE; THE FUNDS AT A GLANCE; CHARTER; DOING
BUSINESS WITH FIDELITY

II........................... CHARTER

III.......................... EXPENSES; BREAKDOWN OF EXPENSES

C .............................. CHARTER

D .............................. CHARTER; BREAKDOWN OF EXPENSES

E .............................. COVER PAGE; CHARTER

F .............................. EXPENSES

G I.............................. CHARTER

II.............................. *

5A .............................. PERFORMANCE

6 A I............................. CHARTER

II........................... HOW TO BUY SHARES; HOW TO SELL SHARES;
TRANSACTION DETAILS; EXCHANGE RESTRICTIONS

III.......................... CHARTER

B .............................

C .............................. TRANSACTIONS DETAILS; EXCHANGE RESTRICTIONS

D .............................. *

E .............................. DOING BUSINESS WITH FIDELITY; HOW TO BUY SHARES;
HOW TO SELL SHARES; INVESTOR SERVICES

F, G .............................. DIVIDENDS, CAPITAL GAINS, AND TAXES

H .............................. *

7 A .............................. COVER PAGE; CHARTER

B .............................. EXPENSES; HOW TO BUY SHARES; TRANSACTION DETAILS

C .............................. *

D .............................. HOW TO BUY SHARES

E .............................. *

F .............................. BREAKDOWN OF EXPENSES

8 .............................. HOW TO SELL SHARES; INVESTOR SERVICES; TRANSACTION
DETAILS; EXCHANGE RESTRICTIONS

9 .............................. *

</TABLE>

* Not Applicable
FIDELITY DEVONSHIRE TRUST:
FIDELITY MID-CAP STOCK FUND

CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A

ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ COVER PAGE

12 ............................ DESCRIPTION OF THE TRUSTS

13 A - C ............................ INVESTMENT POLICIES AND LIMITATIONS

D ............................ PORTFOLIO TRANSACTIONS

14 A - C ............................ TRUSTEES AND OFFICERS

15 A, B ............................ *

C ............................ TRUSTEES AND OFFICERS

16 A I ............................ FMR, PORTFOLIO TRANSACTIONS

II ............................ TRUSTEES AND OFFICERS

III ............................ MANAGEMENT CONTRACTS

B ............................ MANAGEMENT CONTRACTS

C, D ............................ CONTRACTS WITH FMR AFFILIATES

E ............................ *

F ............................ DISTRIBUTION AND SERVICE PLANS

G ............................ *

H ............................ DESCRIPTION OF THE TRUSTS

I ............................ CONTRACTS WITH FMR AFFILIATES

17 A - C ............................ PORTFOLIO TRANSACTIONS

D, E ............................ *

18 A ............................ DESCRIPTION OF THE TRUSTS

B ............................ *

19 A ............................ ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION
INFORMATION

B ............................ ADDITIONAL PURCHASE , EXCHANGE AND REDEMPTION
INFORMATION; VALUATION

C ............................ *

20 ............................ DISTRIBUTIONS AND TAXES

21 A, B ............................ CONTRACTS WITH FMR AFFILIATES

C ............................ *

22 A, B ............................ *

22 B ............................ PERFORMANCE

23 ............................ FINANCIAL STATEMENTS

</TABLE>

* Not Applicable

Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
each fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a
copy of each fund's most recent financial report and portfolio
listing, or a copy of the Statement of Additional Information (SAI)
dated June 19, 1998 . The SAI has been filed with the Securities
and Exchange Commission (SEC) and is available along with other
related materials on the SEC's Internet Web Site (http://www.sec.gov).
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). For a free copy of any of these documents, call
Fidelity (registered trademark) at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
SML-pro-0698

704255
These funds are growth funds. They seek to increase the value of your
investment over the long term. SMALL CAP STOCK invests mainly in
equity securities of companies with small market capitalizations.
MID-CAP STOCK invests mainly in equity securities of companies with
medium market capitalizations. LARGE CAP STOCK invests mainly in
equity securities of companies with large market capitalizations.
FIDELITY
SMALL CAP
STOCK
FUND (CLOSED TO
NEW INVESTMENT)
(FUND NUMBER 340, TRADING SYMBOL FSLC X )
FIDELITY
MID-CAP
STOCK
FUND
(FUND NUMBER 337, TRADING SYMBOL FMCSX)
FIDELITY
LARGE CAP
STOCK
FUND
(FUND NUMBER 338, TRADING SYMBOL FLCSX)
PROSPECTUS
JUNE 19, 1998(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
CONTENTS

KEY FACTS 4 THE FUNDS AT A GLANCE

4 WHO MAY WANT TO INVEST

6 EXPENSES EACH FUND'S YEARLY OPERATING
EXPENSES.

8 FINANCIAL HIGHLIGHTS A SUMMARY OF
EACH FUND'S FINANCIAL DATA.

11 PERFORMANCE HOW EACH FUND HAS DONE
OVER TIME.

THE FUNDS IN DETAIL 14 CHARTER HOW EACH FUND IS ORGANIZED.

14 INVESTMENT PRINCIPLES AND RISKS EACH
FUND'S OVERALL APPROACH TO INVESTING.

16 BREAKDOWN OF EXPENSES HOW
OPERATING COSTS ARE CALCULATED AND
WHAT THEY INCLUDE.

YOUR ACCOUNT DOING BUSINESS WITH FIDELITY

TYPES OF ACCOUNTS DIFFERENT WAYS TO
SET UP YOUR ACCOUNT, INCLUDING
TAX-ADVANTAGED RETIREMENT PLANS.

HOW TO BUY SHARES OPENING AN
ACCOUNT AND MAKING ADDITIONAL
INVESTMENTS.

HOW TO SELL SHARES TAKING MONEY OUT
AND CLOSING YOUR ACCOUNT.

INVESTOR SERVICES SERVICES TO HELP YOU
MANAGE YOUR ACCOUNT.

SHAREHOLDER AND 26 DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

27 TRANSACTION DETAILS SHARE PRICE
CALCULATIONS AND THE TIMING OF PURCHASES
AND REDEMPTIONS.

28 EXCHANGE RESTRICTIONS

KEY FACTS

THE FUNDS AT A GLANCE
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments (registered trademark) ,
which was established in 1946 and is now America's largest mutual fund
manager. Foreign affiliates of FMR may help choose investments for the
funds.
SMALL CAP STOCK
GOAL: Long-term growth of capital (increase in the value of the fund's
shares).
STRATEGY: Invests primarily in equity securities of companies with
small market capitalizations.
SIZE: As of April 30, 1998, the fund had over $737 million in
assets.
MID-CAP STOCK
GOAL: Long-term growth of capital (increase in the value of the fund's
shares).
STRATEGY: Invests mainly in equity securities of companies with medium
market capitalizations.
SIZE: As of April 30, 1998, the fund had over $1.8 billion in
assets.
LARGE CAP STOCK
GOAL: Long-term growth of capital (increase in the value of the fund's
shares).
STRATEGY: Invests mainly in equity securities of companies with large
market capitalizations.
SIZE: As of April 30, 1998, the fund had over $154 million in
assets.
As with any mutual fund, there is no assurance that a fund will
achieve its goal.
WHO MAY WANT TO
INVEST
Effective the close of business on May 14, 1998, Small Cap Stock
shares are no longer available for purchase except through the
reinvestment of dividends and other distributions by shareholders of
Small Cap Stock on May 14, 1998.
These funds may be appropriate for investors who are willing to ride
out stock market fluctuations in pursuit of potentially high long-term
returns. The funds are designed for those who want to focus on small,
medium, or large capitalization stocks in search of above average
returns. A company's market capitalization is the total market value
of its outstanding common stock.
The value of the funds' investments will vary from day to day, and
generally reflect market conditions, interest rates, and other
company, political, or economic news both here and abroad . In
the short-term, stock prices can fluctuate dramatically in response to
these factors. The securities of small, less well-known companies may
be more volatile than those of larger companies. Over time, however,
stocks have shown greater growth potential than other types of
securities. Investments in foreign securities may involve risks in
addition to those of U.S. investments, including increased political
and economic risk, as well as exposure to currency fluctuations.
When you sell your shares, they may be worth more or less than
what you paid for them. By themselves, the funds do not constitute a
balanced investment plan.

THE SPECTRUM OF
FIDELITY FUNDS
BROAD CATEGORIES OF FIDELITY
FUNDS ARE PRESENTED HERE IN
ORDER OF ASCENDING RISK.
GENERALLY, INVESTORS SEEKING TO
MAXIMIZE RETURN MUST ASSUME
GREATER RISK. THE FUNDS IN THIS
PROSPECTUS ARE IN THE GROWTH
CATEGORY.
(SOLID BULLET) MONEY MARKET SEEKS
INCOME AND STABILITY BY
INVESTING IN HIGH-QUALITY,
SHORT-TERM INVESTMENTS.
(SOLID BULLET) INCOME SEEKS INCOME BY
INVESTING IN BONDS.
(SOLID BULLET) GROWTH AND INCOME SEEKS
LONG-TERM GROWTH AND INCOME
BY INVESTING IN STOCKS AND
BONDS.
(RIGHT ARROW) GROWTH SEEKS LONG-TERM
GROWTH BY INVESTING MAINLY IN
STOCKS.
(CHECKMARK)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell shares of a fund. In addition, you may be charged an annual
account maintenance fee if your account balance falls below $2,500.
See "Transaction Details," page , for an explanation of how and when
these charges apply.
SALES CHARGE ON PURCHASES NONE
AND REINVESTED DISTRIBUTIONS

DEFERRED SALES CHARGE ON REDEMPTIONS NONE

REDEMPTION FEE (TRADING FEE) 3.00%
ON SHARES HELD LESS THAN 3 YEARS
(AS A % OF AMOUNT REDEEMED)
FOR SMALL CAP STOCK ONLY

ANNUAL ACCOUNT MAINTENANCE FEE $12.00
(FOR ACCOUNTS UNDER $2,500)

ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets.
Each fund pays a management fee to FMR that varies based on its
performance. It also incurs other expenses for services such as
maintaining shareholder records and furnishing shareholder statements
and financial reports. A fund's expenses are factored into its share
price or dividends and are not charged directly to shareholder
accounts (see "Breakdown of Expenses," page ).
The following figures are based on estimated or historical expenses of
each fund and are calculated as a percentage of average net assets of
each fund. A portion of the brokerage commissions that a fund pays is
used to reduce that fund's expenses. In addition, each fund has
entered into arrangements with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances are
used to reduce custodian and transfer agent expenses. Including these
reductions, the total fund operating expenses presented in the table
would have been 0.86 % for Mid-Cap Stock and 0.84 % for
Large Cap Stock.
SMALL CAP STOCK *
MANAGEMENT FEE (AFTER REIMBURSEMENT) 0.69%

12B-1 FEE NONE

OTHER EXPENSES (AFTER REIMBURSEMENT) 0.81%

TOTAL FUND OPERATING EXPENSES 1.50%

* FIGURES ARE BASED ON ESTIMATED EXPENSES.
MID-CAP STOCK
MANAGEMENT FEE 0.60%

12B-1 FEE NONE

OTHER EXPENSES 0.30%

TOTAL FUND OPERATING EXPENSES 0.90%

UNDERSTANDING
EXPENSES
OPERATING A MUTUAL FUND
INVOLVES A VARIETY OF EXPENSES
FOR PORTFOLIO MANAGEMENT,
SHAREHOLDER STATEMENTS, TAX
REPORTING, AND OTHER SERVICES.
THESE EXPENSES ARE PAID FROM
EACH FUND'S ASSETS, AND THEIR
EFFECT IS ALREADY FACTORED INTO
ANY QUOTED SHARE PRICE OR
RETURN. ALSO, AS AN INVESTOR,
YOU MAY PAY CERTAIN EXPENSES
DIRECTLY.
(CHECKMARK)
LARGE CAP STOCK
MANAGEMENT FEE 0.45 %

12B-1 FEE NONE

OTHER EXPENSES 0.41 %

TOTAL FUND OPERATING EXPENSES 0.86 %

EXAMPLES: Let's say, hypothetically, that each fund's annual return
is 5% and that your shareholder transaction expenses and each fund's
annual operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses
if you close your account after the number of years indicated and, for
Small Cap Stock, if you leave your account open:
SMALL CAP STOCK
ACCOUNT ACCOUNT
OPEN CLOSED

1 YEAR $ 15 $ 4 5

3 YEARS $ 47 $ 47

MID-CAP STOCK
1 YEAR $ 9

3 YEARS $ 29

5 YEARS $ 50

10 YEARS $ 111

LARGE CAP STOCK
1 YEAR $ 9

3 YEARS $ 27

5 YEARS $ 48

10 YEARS $ 106

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expenses or returns, all of which may vary.
FMR has voluntarily agreed to reimburse Small Cap Stock to the
extent that total operating expenses (excluding interest, taxes,
brokerage commissions and extraordinary expenses) exceed 1.50% of its
average net assets. If this agreement were not in effect, the
management fee and total operating expenses, as a percentage of
average net assets, of the fund are expected to be 0.74% and 1.55%,
respectively.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Small Cap Stock,
Mid-Cap Stock and Large Cap Stock have been audited by Coopers &
Lybrand L.L.P., independent accountants. The funds' financial
highlights, financial statements, and reports of the auditor are
included in each fund's Annual Report, and are incorporated by
reference into (are legally a part of) the funds' SAI. Contact
Fidelity for a free copy of an Annual Report or the SAI.
SMALL CAP STOCK FUND

<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA AND RATIOS

YEAR ENDED APRIL 30 1998H

NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00

INCOME FROM INVESTMENT OPERATIONS

NET INVESTMENT INCOMED .01

NET REALIZED AND UNREALIZED GAIN (LOSS) .54

TOTAL FROM INVESTMENT OPERATIONS .55

REDEMPTION FEES ADDED TO PAID IN CAPITAL --

NET ASSET VALUE, END OF PERIOD $ 10.55

TOTAL RETURNB,C 5.50%

NET ASSETS, END OF PERIOD (000 OMITTED) $ 737,997

RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50%A,E

RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.48%A,F

RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .67%A

PORTFOLIO TURNOVER RATE 75%A

AVERAGE COMMISSION RATEG $ .0222

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
G A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
H FOR THE PERIOD MARCH 12, 1998 (COMMENCEMENT OF OPERATIONS) TO APRIL
30, 1998
MID-CAP STOCK FUND

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS

YEARS ENDED APRIL 30 1998 1997 1996 1995H 1995I

NET ASSET VALUE, BEGINNING OF PERIOD $ 14.30 $ 14.83 $ 12.01 $ 10.78 $ 10.00

INCOME FROM INVESTMENT OPERATIONS

NET INVESTMENT INCOME (LOSS) (.02)F .03F .11E .02 --

NET REALIZED AND UNREALIZED GAIN (LOSS) 6.30 .73 3.49 1.23 .92

TOTAL FROM INVESTMENT OPERATIONS 6.28 .76 3.60 1.25 .92

LESS DISTRIBUTIONS

FROM NET INVESTMENT INCOME (.01) (.03) (.06) -- --

FROM NET REALIZED GAIN (1.77) (1.26) (.72) (.02) (.14)

TOTAL DISTRIBUTIONS (1.78) (1.29) (.78) (.02) (.14)

NET ASSET VALUE, END OF PERIOD $ 18.80 $ 14.30 $ 14.83 $ 12.01 $ 10.78

TOTAL RETURNB,C 46.55% 5.03% 30.84% 11.61% 9.27%

NET ASSETS, END OF PERIOD (IN MILLIONS) $ 1,898 $ 1,101 $ 1,461 $ 459 $ 138

RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% 1.00% 1.02% 1.27%A 1.63%A

RATIO OF EXPENSES TO AVERAGE NET .86%D .96%D 1.00%D 1.22%A,D 1.61%A,D
ASSETS AFTER EXPENSE REDUCTIONS

RATIO OF NET INVESTMENT INCOME (LOSS) TO (.10)% .17% 1.01% .95%A (.03)%A
AVERAGE NET ASSETS

PORTFOLIO TURNOVER RATE 132% 155% 179% 163%A 190%A

AVERAGE COMMISSION RATEG $ .0428 $ .0411

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA AND RATIOS

YEARS ENDED APRIL 30 1998 1997 1996G

NET ASSET VALUE, BEGINNING OF PERIOD $ 12.81 $ 11.72 $ 10.00

INCOME FROM INVESTMENT OPERATIONS

NET INVESTMENT INCOME .06E .09E .05

NET REALIZED AND UNREALIZED GAIN (LOSS) 4.71 1.85 1.70

TOTAL FROM INVESTMENT OPERATIONS 4.77 1.94 1.75

LESS DISTRIBUTIONS

FROM NET INVESTMENT INCOME (.06) (.05) (.03)

FROM NET REALIZED GAIN (1.07) (.80) --

TOTAL DISTRIBUTIONS (1.13) (.85) (.03)

NET ASSET VALUE, END OF PERIOD $ 16.45 $ 12.81 $ 11.72

TOTAL RETURNB,C 39.03% 17.35% 17.52%

NET ASSETS, END OF PERIOD (000 OMITTED) $ 154,236 $ 117,413 $ 88,166

RATIO OF EXPENSES TO AVERAGE NET ASSETS .86% 1.01% 1.31%A

RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS .84%D .99%D 1.30%A,D

RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .39% .68% .70%A

PORTFOLIO TURNOVER RATE 159% 110% 155%A

AVERAGE COMMISSION RATEF $ .0419 $ .0336

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND
IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
G FOR THE PERIOD JUNE 22, 1995 (COMMENCEMENT OF OPERATIONS) TO
APRIL 30, 1996
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The
total returns that follow are based on historical fund results and do
not reflect the effect of taxes.
Each fund's fiscal year runs from May 1 through April 30. The tables
below show Mid-Cap Stock's and Large Cap Stock's performance over past
fiscal years compared to different measures, including a comparative
index and a competitive funds average. The charts on page present
calendar year performance.
Performance history will be available for Small Cap Stock after the
fund has been in operation for six months.
AVERAGE ANNUAL TOTAL RETURNS
FISCAL PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1998 YEAR FUNDA

MID-CAP STOCK 46.55% 24.57%

S&P MIDCAP 400(REGISTERED TRADEMARK) 47.92% 22.56%

LIPPER MID-CAP FUNDS AVERAGE 42.28% N/A

LARGE CAP STOCK 39.03% 25.58%

S&P 500(REGISTERED TRADEMARK) 41.07% 30.42%

LIPPER GROWTH FUNDS AVERAGE 39.11% N/A

CUMULATIVE TOTAL RETURNS
FISCAL PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1998 YEAR FUNDA

MID-CAP STOCK 46.55% 145.61 %

S&P MIDCAP 400(REGISTERED TRADEMARK) 47.92% 129.82%

LIPPER MID-CAP FUNDS AVERAGE 42.28% N/A

LARGE CAP STOCK 39.03% 91.72%

S&P 500(REGISTERED TRADEMARK) 41.07% 113.63%

LIPPER GROWTH FUNDS AVERAGE 39.11% N/A

A FROM COMMENCEMENT OF OPERATIONS: MARCH 29, 1994 (MID-CAP STOCK);
JUNE 22, 1995 (LARGE CAP STOCK)

UNDERSTANDING
PERFORMANCE
Because these funds invest in
stocks, their performance is
related to that of the overall
stock market. Historically, stock
market performance has been
characterized by volatility in
the short run and growth in the
long run. You can see these
two characteristics reflected in
a fund's performance; the
year-by-year total returns on
page 14 show that short-term
returns can vary widely, while
the returns in the mountain
chart show long-term growth.
(checkmark)
EXAMPLE: Let's say, hypothetically, that you had $10,000 invested
in Mid-Cap Stock or Large Cap Stock on each fund's start date. The
charts below show the growth in value of your $10,000 investment in
each fund through April 30, 1998. A chart for Small Cap Stock
will be included when the fund has more performance history.
MID-CAP STOCK
FISCAL YEARS 1994 1996 1998
ROW: 1, COL: 1, VALUE: 10000.0
ROW: 2, COL: 1, VALUE: 9780.0
ROW: 3, COL: 1, VALUE: 9840.0
ROW: 4, COL: 1, VALUE: 9890.0
ROW: 5, COL: 1, VALUE: 9690.0
ROW: 6, COL: 1, VALUE: 9930.0
ROW: 7, COL: 1, VALUE: 10740.0
ROW: 8, COL: 1, VALUE: 10990.0
ROW: 9, COL: 1, VALUE: 11180.0
ROW: 10, COL: 1, VALUE: 10720.0
ROW: 11, COL: 1, VALUE: 10846.15
ROW: 12, COL: 1, VALUE: 10927.24
ROW: 13, COL: 1, VALUE: 11464.48
ROW: 14, COL: 1, VALUE: 11860.51
ROW: 15, COL: 1, VALUE: 12195.61
ROW: 16, COL: 1, VALUE: 12378.39
ROW: 17, COL: 1, VALUE: 12984.78
ROW: 18, COL: 1, VALUE: 13715.88
ROW: 19, COL: 1, VALUE: 14004.2
ROW: 20, COL: 1, VALUE: 14302.82
ROW: 21, COL: 1, VALUE: 14014.5
ROW: 22, COL: 1, VALUE: 14539.66
ROW: 23, COL: 1, VALUE: 14525.66
ROW: 24, COL: 1, VALUE: 14977.57
ROW: 25, COL: 1, VALUE: 15397.2
ROW: 26, COL: 1, VALUE: 15386.44
ROW: 27, COL: 1, VALUE: 15956.71
ROW: 28, COL: 1, VALUE: 16666.85
ROW: 29, COL: 1, VALUE: 16158.58
ROW: 30, COL: 1, VALUE: 15221.85
ROW: 31, COL: 1, VALUE: 16080.52
ROW: 32, COL: 1, VALUE: 17073.01
ROW: 33, COL: 1, VALUE: 16638.1
ROW: 34, COL: 1, VALUE: 17429.86
ROW: 35, COL: 1, VALUE: 17157.68
ROW: 36, COL: 1, VALUE: 17731.94
ROW: 37, COL: 1, VALUE: 17274.87
ROW: 38, COL: 1, VALUE: 16325.58
ROW: 39, COL: 1, VALUE: 16759.21
ROW: 40, COL: 1, VALUE: 18165.57
ROW: 41, COL: 1, VALUE: 19160.83
ROW: 42, COL: 1, VALUE: 20672.56
ROW: 43, COL: 1, VALUE: 20635.69
ROW: 44, COL: 1, VALUE: 21704.96
ROW: 45, COL: 1, VALUE: 20820.05
ROW: 46, COL: 1, VALUE: 21164.18
ROW: 47, COL: 1, VALUE: 21804.06
ROW: 48, COL: 1, VALUE: 21673.42
ROW: 49, COL: 1, VALUE: 23463.2
ROW: 50, COL: 1, VALUE: 24665.11
ROW: 51, COL: 1, VALUE: 24560.59
$
$24,561
LARGE CAP STOCK
FISCAL YEARS 1995 1996 1998
ROW: 1, COL: 1, VALUE: 10000.0
ROW: 2, COL: 1, VALUE: 9870.0
ROW: 3, COL: 1, VALUE: 10260.0
ROW: 4, COL: 1, VALUE: 10330.0
ROW: 5, COL: 1, VALUE: 10720.0
ROW: 6, COL: 1, VALUE: 10590.0
ROW: 7, COL: 1, VALUE: 10990.0
ROW: 8, COL: 1, VALUE: 11079.92
ROW: 9, COL: 1, VALUE: 11420.84
ROW: 10, COL: 1, VALUE: 11621.38
ROW: 11, COL: 1, VALUE: 11661.49
ROW: 12, COL: 1, VALUE: 11751.73
ROW: 13, COL: 1, VALUE: 12022.46
ROW: 14, COL: 1, VALUE: 12092.09
ROW: 15, COL: 1, VALUE: 11488.55
ROW: 16, COL: 1, VALUE: 11859.14
ROW: 17, COL: 1, VALUE: 12653.28
ROW: 18, COL: 1, VALUE: 12843.88
ROW: 19, COL: 1, VALUE: 13786.26
ROW: 20, COL: 1, VALUE: 13467.54
ROW: 21, COL: 1, VALUE: 14145.76
ROW: 22, COL: 1, VALUE: 13919.69
ROW: 23, COL: 1, VALUE: 13219.93
ROW: 24, COL: 1, VALUE: 13790.5
ROW: 25, COL: 1, VALUE: 14727.09
ROW: 26, COL: 1, VALUE: 15282.77
ROW: 27, COL: 1, VALUE: 16456.64
ROW: 28, COL: 1, VALUE: 15875.3
ROW: 29, COL: 1, VALUE: 16736.14
ROW: 30, COL: 1, VALUE: 16110.07
ROW: 31, COL: 1, VALUE: 16523.72
ROW: 32, COL: 1, VALUE: 16794.67
ROW: 33, COL: 1, VALUE: 16841.29
ROW: 34, COL: 1, VALUE: 18158.29
ROW: 35, COL: 1, VALUE: 19044.06
ROW: 36, COL: 1, VALUE: 19172.26
$
$19,172
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
Average annual total returns covering periods of less than one year
assume that performance will remain constant for the rest of the year.
STANDARD & POOR'S 500 INDEX (S&P 500(registered trademark)) is a
widely recognized, unmanaged index of common stocks.
RUSSELL 2000 INDEX is an unmanaged index of 2,000 small company
stocks.
STANDARD & POOR'S MIDCAP 400 INDEX is a widely recognized, unmanaged
index of 400 medium-capitalization stocks.
Unlike each fund's returns, the total returns of each comparative
index do not include the effect of any brokerage commissions,
transaction fees, or other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
THE COMPETITIVE FUNDS AVERAGES are the Lipper Mid-Cap Funds Average
and the Lipper Growth Funds Average for Mid-Cap Stock and Large Cap
Stock, respectively. As of April 30, 1998, the averages reflected the
performance of 276 and 864 mutual funds with similar
investment objectives , respectively. These averages, published by
Lipper Analytical Services, Inc., exclude the effect of sales loads.
Other illustrations of fund performance may show moving averages over
specified periods.

YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1995 1996 1997
MID-CAP STOCK 33.92% 18.12% 27.08%
S&P MidCap 400 30.95% 19.20% 32.25%
Lipper Mid-Cap Funds Average 32.17% 17.92% 19.63%
Consumer Price Index 2.54% 3.32% 1.70 %

YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1996 1997
LARGE CAP STOCK 21.55% 24.70%
S&P 500 22.96% 33.36%
Lipper Growth Funds Average 19.24% 25.30%
Consumer Price Index 3.32% 1.70 %

Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 6, Col: 1, Value: 0.0
Row: 7, Col: 1, Value: 0.0
Row: 8, Col: 1, Value: 33.92
Row: 9, Col: 1, Value: 18.12
Row: 10, Col: 1, Value: 27.08
(LARGE SOLID BOX) Mid-Cap Stock
The funds' recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
For current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF
FUTURE PERFORMANCE.
THE FUNDS IN DETAIL

CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Fidelity Small Cap Stock
Fund and Fidelity Large Cap Stock Fund are diversified funds of
Fidelity Commonwealth Trust, and Fidelity Mid-Cap Stock Fund is a
diversified fund of Fidelity Devonshire Trust. Both trusts are
open-end management investment companies. Fidelity Commonwealth Trust
was organized as a Massachusetts business trust on November 8, 1974.
Fidelity Devonshire Trust was organized as a Massachusetts business
trust on March 4, 1985. There is a remote possibility that one fund
might become liable for a misstatement in the prospectus about another
fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies that
provide services to the funds, and review the funds' performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. Fidelity will mail proxy materials in
advance, including a voting card and information about the proposals
to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses their investments and
handles their business affairs. Fidelity Management & Research (U.K.)
Inc. (FMR U.K.), in London, England, and Fidelity Management &
Research (Far East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR
with foreign investments.
Paul Antico is manager of Small Cap Stock, which he has managed since
inception. Previously, he managed other Fidelity funds. Since joining
Fidelity in 1991, Mr. Antico has worked as an analyst and manager.
Katherine Collins is manager of Mid-Cap Stock, which she has managed
since January 1997. She also manages another Fidelity fund. Since
j oining Fidelity in 1990, Ms. Collins has worked as an analyst
and manager.
Karen Firestone is manager of Large Cap Stock, which she has
managed since April 1998. She also manages other Fidelity funds. Since
joining Fidelity in 1983, Ms. Firestone has worked as an analyst and
manager.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
Fidelity Service Company, Inc. (FSC) performs transfer agent servicing
functions for each fund.
FMR Corp. is the ultimate parent company of FMR, FMR U.K., and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant
owners of a class of shares of common stock representing approximately
49% of the voting power of FMR Corp. Under the Investment Company Act
of 1940 (the 1940 Act), control of a company is presumed where one
individual or group of individuals owns more than 25% of the voting
stock of that company; therefore, the Johnson family may be deemed
under the 1940 Act to form a controlling group with respect to FMR
Corp.
FMR may use its broker-dealer affiliates and other firms that sell
fund shares to carry out a fund's transactions, provided that the fund
receives brokerage services and commission rates comparable to those
of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
SMALL CAP STOCK seeks long-term growth of capital by investing
primarily in equity securities of companies with small market
capitalizations. FMR normally invests at least 65% of the fund's total
assets in these securities. The fund has the flexibility, however, to
invest in other market capitalizations and security types.
Small market capitalization companies are those whose market
capitalization is similar to the market capitalization of companies in
the Russell 2000 at the time of the fund's investment. Companies whose
capitalization no longer meets this definition after purchase continue
to be considered small-capitalized for purposes of the 65% policy.
As of April 30, 1998, the Russell 2000 included companies with
capitalizations between $12.5 million and $3.5 billion. The size
of companies in the Russell 2000 changes with market conditions and
the composition of the index.
Investing in small capitalization stocks may involve greater risk than
investing in medium and large capitalization stocks, because
they can be subject to more abrupt or erratic movements. Small
capitalization companies may have more limited product lines, markets
or financial resources.
MID-CAP STOCK seeks long-term growth of capital by investing primarily
in equity securities of companies with medium market capitalizations.
FMR normally invests at least 65% of the fund's total assets in these
securities. The fund has the flexibility, however, to invest in other
market capitalizations and security types.
Medium market capitalization companies are those whose market
capitalization is similar to the market capitalization of companies
in the S&P MidCap 400 at the time of the fund's investment.
Companies whose capitalization no longer meets this definition
a fter purchase continue to be considered medium-capitalized for
purposes of the 65% policy. As of April 30, 1998, the S&P MidCap
400 included companies with capitalizations between $314 million and
$17.6 billion. The size of companies in the S&P MidCap 400 changes
with market conditions and the composition of the index.
Investing in medium capitalization stocks may involve greater risk
than investing in large capitalization stocks, be cause t hey can
be subject to more abrupt or erratic movements. However, they tend to
involve less risk than stocks of small capitalization companies.
LARGE CAP STOCK seeks long-term growth of capital by investing
primarily in equity securities of companies with large market
capitalizations. FMR normally invests at least 65% of the fund's total
assets in these securities. The fund has the flexibility, however, to
invest in other market capitalizations and security types.
FMR defines large market capitalization companies as those with market
capitalizations of $1 billion or more at the time of the fund's
investment. Companies whose capitalization falls below this level
after purchase continue to be considered large-capitalized for
purposes of the 65% policy.
Companies with large market capitalizations typically have a large
number of publicly held shares and a high trading volume, resulting in
a high degree of liquidity. These tend to be quality companies with
strong management organizations. However, large capitalization
companies may have less growth potential than smaller companies and
may be able to react less quickly to changes in the marketplace.
The value of the funds' investments varies in response to many
factors. Stock values fluctuate in response to the activities of
individual companies and general market and economic conditions.
Investments in foreign securities may involve risks in addition to
those of U.S. investments, including increased political and economic
risk, as well as exposure to currency fluctuations.
FMR may use various investment techniques to hedge a portion of a
fund 's risks, but there is no guarantee that these
strategies will work as FMR intends. As a mutual fund, each fund seeks
to spread investment risk by diversifying its holdings among many
companies and industries. When you sell your shares of a fund, they
may be worth more or less than what you paid for them.
FMR normally invests each fund's assets according to its investment
strategy. Each fund also reserves the right to invest without
limitation in preferred stocks and investment-grade debt instruments
for temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of each fund's limitations and more
detailed information about each fund's investments are contained in
the funds' SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a fund's
investment objective and policies and that doing so will help a fund
achieve its goal. Fund holdings and recent investment strategies are
detailed in each fund's financial reports, which are sent to
shareholders twice a year. For a free SAI or financial report, call
1-800-544-8888.
DEBT RATINGS
MOODY'S
INVESTORS SERVICE STANDARD & POOR'S
Rating Rating
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa AA
Upper-medium grade A A
Medium grade Baa BBB
LOWER QUALITY
Moderately speculative Ba BB
Speculative B B
Highly speculative Caa CCC
Poor quality Ca CC
Lowest quality, no interest C C
In default, in arrears -- D
REFER TO THE FUNDS' SAI FOR A MORE COMPLETE DISCUSSION OF THESE
RATINGS.
THE FUNDS DO NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P
TO DETERMINE COMPLIANCE WITH THEIR DEBT QUALITY
POLICY.

EQUITY SECURITIES may include common stocks, preferred stocks,
convertible securities, and warrants. Common stocks, the most familiar
type, represent an equity (ownership) interest in a corporation.
Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's
financial condition and on overall market and economic conditions.
Smaller companies are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of total assets, each fund may not
purchase more than 10% of the outstanding voting securities of a
single issuer. For Small Cap Stock, this limitation does not apply to
securities of other investment companies.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers
to borrow money from investors. The issuer generally pays the investor
a fixed, variable, or floating rate of interest, and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon
bonds, do not pay current interest, but are sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes.
Lower-quality debt securities are considered to have speculative
characteristics, and involve greater risk of default or price changes
due to changes in the issuer's creditworthiness, or they may already
be in default. The market prices of these securities may fluctuate
more than higher-quality securities and may decline significantly in
periods of general or regional economic difficulty.
RESTRICTIONS: Purchase of a debt security is consistent with a fund's
debt quality policy if it is rated at or above the stated level by
Moody's Investors Service or rated in the equivalent categories by
Standard & Poor's, or is unrated but judged to be of equivalent
quality by FMR. Each fund currently intends to limit its investments
in lower than Baa-quality debt securities (sometimes called "junk
bonds") to less than 35% of its assets.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve additional risks and considerations. These
include risks relating to political, economic, or regulatory
conditions in foreign countries; fluctuations in foreign currencies;
withholding or other taxes; trading, settlement, custodial, and other
operational risks; and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign debt securities may be unwilling to
pay interest and repay principal when due and may require that the
conditions for payment be renegotiated. All of these factors can make
foreign investments, especially those in emerging markets, more
volatile and potentially less liquid than U.S. investments.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices,
interest rates, currency exchange rates, commodity prices, or other
factors that affect security values. These techniques may involve
derivative transactions such as buying and selling options and futures
contracts, entering into currency exchange contracts or swap
agreements, and purchasing indexed securities.
FMR can use these practices to adjust the risk and return
characteristics of a fund's portfolio of investments. If FMR judges
market conditions incorrectly or employs a strategy that does not
correlate well with a fund's investments, these techniques could
result in a loss, regardless of whether the intent was to reduce risk
or increase return. These techniques may increase the volatility of a
fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these techniques could
result in a loss if the counterparty to the transaction does not
perform as promised.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities, and some
other securities, may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include real estate-related instruments.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income while maintaining a stable $1.00
share price. A major change in interest rates or a default on the
money market fund's investments could cause its share price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one
industry. Economic, business, or political changes can affect all
securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, each fund
may not invest more than 5% in the securities of any one issuer.
This limitation does not apply to U.S. Government securities or, for
Small Cap Stock, to securities of other investment companies.
Each fund may not invest more than 25% of its total assets in
any one industry. This limitation does not apply to U.S. Government
securities.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase
agreements. If a fund borrows money, its share price may be subject to
greater fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a
means of earning income. This practice could result in a loss or a
delay in recovering a fund's securities. A fund may also lend money to
other funds advised by FMR or its affiliates.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
SMALL CAP STOCK seeks long-term growth of capital.
MID-CAP STOCK seeks long-term growth of capital.
LARGE CAP STOCK seeks long-term growth of capital.
With respect to 75% of its total assets, each fund may not invest
more than 5% in the securities of any one issuer and may not
invest in more than 10% of the outstanding voting securities of
a single issuer. These limitations do not apply to U.S. Government
securities or, for Small Cap Stock, to securities of other investment
companies.
Each fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
Each fund may borrow only for temporary or emergency purposes, but not
in an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of each fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its
share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments
and business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. Each fund also pays OTHER EXPENSES,
which are explained on page .
FMR may, from time to time, agree to reimburse the funds for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated at any time without notice, can
decrease a fund's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The
amount of the fee is determined by taking a BASIC FEE and then
applying a PERFORMANCE ADJUSTMENT. The performance adjustment either
increases or decreases the management fee, depending on how well a
fund has performed relative to its comparative index.
MANAGEMENT = BASIC +/- PERFORMANCE
FEE FEE ADJUSTMENT

THE BASIC FEE is calculated by adding a group fee rate to an
individual fund fee rate , multiplying the result by a fund 's
monthly average net assets and dividing by twelve.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.
For April 1998, the group fee rate was 0.2888 %. The individual
fund fee rate is 0.45% for Small Cap Stock, 0.30% for Mid-Cap Stock,
and 0.30% for Large Cap Stock.
The basic fee rate for Mid-Cap Stock and Large Cap Stock for the
fiscal year ended April 30, 1998 was 0.59% and 0.59%, respectively.
The annualized basic fee rate for Small Cap Stock for the fiscal year
ended April 30, 1998 is 0.74%.
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing
Small Cap Stock's performance to that of the Russell 2000, Mid-Cap
Stock's performance to that of the S&P MidCap 400, and Large Cap
Stock's performance to that of the S&P 500, over the performance
period.
UNDERSTANDING THE

MANAGEMENT FEE
The basic fee FMR receives is
designed to be responsive to
changes in FMR's total assets
under management. Building
this variable into the fee
calculation assures
shareholders that they will pay
a lower rate as FMR's assets
under management increase.
Another variable, the
performance adjustment,
rewards FMR when a fund
outperforms its comparative
index and reduces FMR's fee
when a fund underperforms its
comparative index.
(checkmark)
For Small Cap Stock, the performance period began on April 1, 1998 and
will eventually include 36 months. The performance adjustment will not
take effect until March 1, 1999.
For Large Cap Stock, the performance period began on July 1, 1995 and
will eventually include 36 months. The performance adjustment took
effect on June 1, 1996.
For Mid-Cap Stock, the performance period is the most recent 36-month
period.
The difference is translated into a dollar amount that is added to or
subtracted from the basic fee. The maximum annualized performance
adjustment rate is (plus/minus)0.20% of a fund's average net assets
over the performance period.
The total management fee rate for the fiscal year ended April 30, 1998
was 0.69 %, after reimbursement, for Small Cap Stock,
0.60 % for Mid-Cap Stock and 0.45 % for Large Cap Stock.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on
issuers based outside the United States. Under the sub-advisory
agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
management fee rate with respect to a fund's investments that the
sub-adviser manages on a discretionary basis.
OTHER EXPENSES
While the management fee is a significant component of the funds'
annual operating costs, the funds have other expenses as well.
The funds contract with FSC to perform transfer agency, dividend
disbursing, shareholder servicing, and accounting functions. These
services include processing shareholder transactions, valuing each
fund's investments, handling securities loans for each fund, and
calculating each fund's share price and dividends.
For the fiscal year ended April 1998, transfer agency and pricing and
bookkeeping fees paid (as a percentage of average net assets) amounted
to the following. These amounts are before expense reductions, if any.
TRANSFER AGENCY AND
PRICING AND BOOKKEEPING FEES
PAID BY FUND

MID-CAP STOCK 0.28%

LARGE CAP STOCK 0.32%

Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity. A
broker-dealer may use a portion of the commissions paid by a fund to
reduce that fund's custodian or transfer agent fees.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each plan
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with the distribution of fund
shares. FMR directly, or through FDC, may make payments to third
parties, such as banks or broker-dealers, that engage in the sale of,
or provide shareholder support services for, the fund's shares.
Currently, the Board of Trustees of each fund has authorized such
payments.
For the fiscal year ended April 1998, the portfolio turnover rates for
Mid-Cap Stock and Large Cap Stock were 132 % and 159 %,
respectively. P ortfolio turnover rate s will vary from
year to year. High turnover rates increase transaction costs and may
increase taxable capital gains. FMR considers these effects when
evaluating the anticipated benefits of short-term investing.
YOUR ACCOUNT

(CHECKMARK)
Fidelity Facts
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 225
(solid bullet) Assets in Fidelity mutual
funds: over $595 billion
(solid bullet) Number of shareholder
accounts: over 37 million
(solid bullet) Number of investment ana
lysts and portfolio managers:
over 250
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the funds through a retirement program, you may be
subject to additional fees. For more information, please refer to your
program materials, contact your employer, call your retirement
benefits number, visit Fidelity's Web site at www.fidelity.com, or
contact Fidelity directly, as appropriate.

WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
Retirement plans provide individuals with tax-advantaged ways to save
for retirement, either with tax-deductible contributions or tax-free
growth. Retirement accounts require special applications and typically
have lower minimums.
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS
(IRAS) allow individuals under age 70 with compensation to
contribute up to $2,000 per tax year. Married couples can contribute
up to $4,000 per tax year, provided no more than $2,000 is contributed
on behalf of either spouse. (These limits are aggregate for
Traditional and Roth IRAs.) Contributions may be tax-deductible,
subject to certain income limits.
(solid bullet) ROTH IRAS allow individuals to make
non-deductible contributions of up to $2,000 per tax year. Married
couples can contribute up to $4,000 per tax year, provided no more
than $2,000 is contributed on behalf of either spouse. (These limits
are aggregate for Traditional and Roth IRAs.) Eligibility is subject
to certain income limits. Qualified distributions are tax-free.
(solid bullet) ROTH CONVERSION IRAS allow individuals with
assets held in a Traditional IRA or Rollover IRA to convert those
assets to a Roth Conversion IRA. Eligibility is subject to certain
income limits. Qualified distributions are tax-free.
(solid bullet) ROLLOVER IRAS help retain special tax
advantages for certain eligible rollover distributions from
employer-sponsored retirement plans.
(solid bullet) 401(K) PLANS, and certain other
401(a)-qualified plans, are employer-sponsored retirement plans that
allow employer contributions and may allow employee after-tax
contributions. In addition, 401(k) plans allow employer pre-tax
(tax-deferred) contributions. Contributions to these plans may be
tax-deductible to the employer.
(solid bullet) KEOGHS PLANS are generally profit sharing or
money purchase pension plans that allow self-employed individuals or
small business owners to make tax-deductible contributions for
themselves and any eligible employees.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employment income (and their eligible employees) with many
of the advantages of a 401(k) plan, but with fewer administrative
requirements.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS)
provide small business owners or those with self-employment income
(and their eligible employees) with many of the same advantages as a
Keogh, but with fewer administrative requirements.
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS) allow
employees of businesses with 25 or fewer employees to contribute a
percentage of their wages on a tax-deferred basis. These plans must
have been established by the employer prior to January 1, 1997.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to
employees of 501(c)(3) tax-exempt institutions, including schools,
hospitals, and other charitable organizations.
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS) are
available to employees of most state and local governments and their
agencies and to employees of tax-exempt institutions.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Requires a special application.

HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of each fund is the fund's net asset
value per share (NAV). Each fund's shares are sold without a sales
charge.
Your shares will be purchased at the next NAV calculated after your
investment is received in proper form. Each fund's NAV is normally
calculated each business day at 4:00 p.m. Eastern time. Shares of
Small Cap Stock are offered to current shareholders of Small Cap Stock
for reinvestment of dividends and other distributions only.
Each fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page 99. Purchase orders may be refused if, in FMR's opinion, they
would disrupt management of a fund.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application
and mail it along with your check. You may also open your account in
person or by wire as described on page 90. If there is no application
accompanying this prospectus, call 1-800-544-8888 or visit
Fidelity's Web site at www.fidelity.com for an application.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(solid bullet) Mail in an application with a check, or
(solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX- ADVANTAGED RETIREMENT PLAN,
such as an IRA, for the first time, you will need a special
application. Retirement investing also involves its own investment
procedures. Call 1-800-544-8888 or visit Fidelity's Web site at
www.fideli ty.com for more information and a retirement
application.
If you buy shares by check or Fidelity Money LineR, and then sell
those shares by any method other than by exchange to another Fidelity
fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS

TO OPEN AN ACCOUNT $2,500
For certain Fidelity retirement accountsA $500
TO ADD TO AN ACCOUNT $250
For certain Fidelity retirement accountsA $250
Through regular investment plans B $100
MINIMUM BALANCE $2,000
For certain Fidelity retirement accountsA $500
A THESE LOWER MINIMUMS APPLY TO FIDELITY TRADITIONAL IRA, ROTH IRA,
ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.
B FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE
REFER TO "INVESTOR SERVICES," PAGE 93.
There is no minimum account balance or initial or subsequent
investment minimum for investments through Fidelity Portfolio Advisory
ServicesSM, a qualified state tuition program, certain Fidelity
retirement accounts funded through salary deduction, or accounts
opened with the proceeds of distributions from such retirement
accounts.
Refer to the program materials for details. In addition, each fund
reserves the right to waive or lower investment minimums in other
circumstances.

<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

Phone (solid bullet) Exchange from another
1-800-544-7777 Fidelity fund account with
(Phone_graphic) the same registration,
including name, address,
and taxpayer ID number. (solid bullet)
Exchange from another
Fidelity fund account with
the same registration,
including name, address,
and taxpayer ID number.
(solid bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service is
in place on your
account. Maximum
Money Line: up to
$100,000.

Internet (solid bullet) Complete and sign the
www.fidelity.com application. Make your
(Internet_graphic) check payable to the
complete name of the
fund. Mail to the address
indicated on the
application. (solid bullet) Exchange
from another Fidelity fund
account with the same
registration, including
name, address, and
taxpayer ID number.
(solid bullet) Use Fidelity Money
Line to transfer from
your bank account. Visit
Fidelity's Web site
before your first use to
verify that this service is
in place on your
account. Maximum
Money Line: up to
$100,000.

Mail (solid bullet) Complete and sign the
(Mail_graphic) application. Make your
check payable to the
complete name of the
fund. Mail to the address
indicated on the
application. (solid bullet) Make your
check payable to the
complete name of the
fund. Indicate your fund
account number on your
check and mail to the
address printed on your
account statement.
(solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.

In Person (solid bullet) Bring your application
(Hand_graphic) and check to a Fidelity
Investor Center. Call
1-800-544-9797 for the
center nearest you. (solid bullet) Bring
your check to a Fidelity
Investor Center. Call
1-800-544-9797 for the
center nearest you.

Wire (solid bullet) Call 1-800-544-7777 to
(Wire_graphic) set up your account and to
arrange a wire
transaction. Not available
for retirement accounts.
(solid bullet) Wire within 24 hours to:
Bankers Trust
Company,Bank Routing
#021001033,
Account #00163053.
Specify the complete
name of the fund and
include your new account
number and your name. (solid bullet)
Not available for
retirement accounts.
(solid bullet) Wire to:
Bankers Trust Company,
Bank Routing
#021001033,
Account #00163053.
Specify the complete
name of the fund and
include your account
number and your name.

Automatically (solid bullet) Not available. (solid bullet) Use
(Automatic_graphic) Fidelity Automatic
Account Builder. Sign up
for this service when
opening your account,
visit Fidelity's Web site at
www.fidelity.com to
obtain the form to add this
service, or call
1-800-544-6666 to add
this service.

TDD - Service for the Deaf and Hearing-Impaired: 1-800-544-0118

</TABLE>

HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time
by selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of Mid-Cap Stock or Large Cap Stock is
the fund's NAV. The PRICE TO SELL ONE SHARE of Small Cap Stock is the
fund's NAV minus the trading fee, if applicable. If you sell shares of
Small Cap Stock after holding them less than three years, the fund
will deduct a trading fee equal to 3.00% of the value of those
shares.
Your shares will be sold at the next NAV calculated after your
order is received in proper form, minus the trading fee, if
applicable. Each fund's NAV is normally calculated each business day
at 4:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to other Fidelity funds, which
can be requested by phone, in writing , or through Fidelity's Web
site. Call 1-800-544-6666 for a retirement distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$2,000 worth of shares in the account to keep it open ($500 for
retirement accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to
sign up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(solid bullet) You wish to redeem more than $100,000 worth of shares,
(solid bullet) Your account registration has changed within the last
30 days,
(solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(solid bullet) The check is being made payable to someone other
than the account owner, or
(solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(solid bullet) Your name,
(solid bullet) The fund's name,
(solid bullet) Your fund account number,
(solid bullet) The dollar amount or number of shares to be redeemed,
and
(solid bullet) Any other applicable requirements listed in the table
that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it
to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602

<TABLE>
<CAPTION>
<S> <C> <C>
ACCOUNT TYPE SPECIAL REQUIREMENTS

IF YOU SELL SHARES OF SMALL CAP STOCK AFTER HOLDING THEM LESS THAN THREE YEARS, THE FUND WILL
DEDUCT A TRADING FEE EQUAL TO 3.00% OF THE VALUE OF THOSE SHARES.

Phone All account types (solid bullet) Maximum check request:
1-800-544-7777 except retirement $100,000.
(Phone_graphic) (solid bullet) For Money Line transfers to
your bank account; minimum:
$10; maximum: up to
$100,000.
All account types (solid bullet) You may exchange to other
Fidelity funds if both accounts
are registered with the same
name(s), address, and taxpayer
ID number.
Mail or in Person Individual, Joint (solid bullet) The letter of instruction must
(Mail_graphic) Tenant, Sole be signed by all persons
Proprietorship, required to sign for
UGMA, UTMA transactions, exactly as their
names appear on the account.
Retirement account (solid bullet) The account owner should
complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Trust (solid bullet) The trustee must sign the letter
indicating capacity as trustee.
If the trustee's name is not in
the account registration,
provide a copy of the trust
document certified within the
last 60 days.
Business or (solid bullet) At least one person authorized
Organization by corporate resolution to act
on the account must sign the
letter.
(solid bullet) Include a corporate resolution
with corporate seal or a
signature guarantee.
Executor, (solid bullet) Call 1-800-544-6666 for
Administrator, instructions.
Conservator,
Guardian

TDD - Service for the Deaf and Hearing-Impaired: 1-800-544-0118

</TABLE>

(CHECKMARK)
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSR
1-800-544-5555
WEB SITE
WWW.FIDELITY.COM
AUTOMATED SERVICE
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your
account registration)
(solid bullet) Account statements (quarterly)
(solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call 1-800-544-6666 if you need copies
of financial reports, prospectuses, or historical account information.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's Web site. To participate in our electronic
delivery program, call 1-800-544-6666 or visit Fidelity's Web site at
www .fidelity.com for more information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone, in writing, or through
Fidelity's Web site.
Note that exchanges out of a fund are limited to four per calendar
year, and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or
revoked, see page 99.
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from
your account.
FIDELITY MONEY LINE enables you to transfer money by phone between
your bank account and your fund account. Most transfers are complete
within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money
regularly. Fidelity offers convenient services that let you transfer
money into your fund account, or between fund accounts, automatically.
While regular investment plans do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Certain restrictions apply for
retirement accounts. Call 1-800-544-6666 or visit Fidelity's Web
site at www.fidelity.com for more information.

REGULAR INVESTMENT PLANS

FIDELITY AUTOMATIC ACCOUNT BUILDERr

TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

MINIMUM FREQUENCY SETTING UP OR CHANGING

$100 Monthly or (solid bullet) For a new
account, complete the appropriate
quarterly section on the fund
application.
(solid bullet) For
existing accounts, call 1-800-544-6666
or visit Fidelity's
Web site at
www.fidelity.com
for an application.
(solid bullet) To change
the amount or frequency of your
investment, call
1-800-544-6666 at least
three business days prior
to your next
scheduled investment
date.

DIRECT DEPOSIT

TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA

MINIMUM FREQUENCY SETTING UP OR CHANGING

$100 Every pay (solid bullet) Check the
appropriate box on the fund
period application, or call
1-800-544-6666 or visit
Fidelity's Web site at
www.fidelity.com for
an authorization form.

(solid bullet) Changes
require a new authorization form.

FIDELITY AUTOMATIC EXCHANGE SERVICE

TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND

MINIMUM FREQUENCY SETTING UP OR CHANGING

$100 Monthly, (solid bullet) To
establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.

quarterly, or (solid bullet) To change
the amount or frequency of your
annually investment, call
1-800-544-6666.

A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE

CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.

</TABLE>

SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment
income and capital gains to shareholders each year. Normally,
dividends and capital gains are distributed in June and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on
the application, call 1-800-544-6666 for instructions. Each fund
offers four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each
dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
If you select distribution option 2 or 3 and the U.S. Postal
Service does not deliver your checks, your election may be converted
to the Reinvestment Option. You will not receive interest on amounts
represented by uncashed distribution checks. To change your
distribution option, call Fidelity at 1-800-544-6666.
When a fund deducts a distribution from its NAV, the reinvestment
price is the fund's NAV at the close of business that day. Cash
distribution checks will be mailed within seven days.
UNDERSTANDING
DISTRIBUTIONS
AS A FUND SHAREHOLDER, YOU ARE
ENTITLED TO YOUR SHARE OF THE
FUND'S NET INCOME AND GAINS
ON ITS INVESTMENTS. THE FUND
PASSES ITS EARNINGS ALONG TO ITS
INVESTORS AS DISTRIBUTIONS.
EACH FUND EARNS DIVIDENDS
FROM STOCKS AND INTEREST FROM
BOND, MONEY MARKET, AND
OTHER INVESTMENTS. THESE ARE
PASSED ALONG AS DIVIDEND
DISTRIBUTIONS. THE FUND REALIZES
CAPITAL GAINS WHENEVER IT SELLS
SECURITIES FOR A HIGHER PRICE
THAN IT PAID FOR THEM. THESE
ARE PASSED ALONG AS CAPITAL
GAIN DISTRIBUTIONS.
(CHECKMARK)
TAXES
As with any investment, you should consider how your investment in a
fund will be taxed. If your account is not a tax-advantaged retirement
account, you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income
tax, and may also be subject to state or local taxes. If you live
outside the United States, your distributions could also be taxed by
the country in which you reside. Your distributions are taxable when
they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are
taxable as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital
gains are distributed as dividends and taxed as ordinary income;
capital gain distributions are taxed as long-term capital gains. Every
January, Fidelity will send you and the IRS a statement showing the
tax characterization of distributions paid to you in the previous
year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price
you receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price. You will also receive a consolidated transaction statement
every January. However, it is up to you or your tax preparer to
determine whether this sale resulted in a capital gain and, if so, the
amount of tax to be paid. Be sure to keep your regular account
statements; the information they contain will be essential in
calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a fund has realized but
not yet distributed income or capital gains, you will pay the full
price for the shares and then receive a portion of the price back in
the form of a taxable distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a
fund and its investments, and these taxes generally will reduce a
fund's distributions. However, if you meet certain holding period
requirements with respect to your fund shares, an offsetting tax
credit may be available to you. If you do not meet such holding period
requirements, you may still be entitled to a deduction for certain
foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the
fund, but will also show the amount of the available offsetting credit
or deduction.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
a fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates each fund's NAV as of the
close of business of the NYSE, normally 4:00 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the
number of shares outstanding.
Each fund's assets are valued primarily on the basis of market
quotations. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
on the basis of amortized cost. This method minimizes the effect of
changes in a security's market 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. In addition, if quotations are not
readily available, or if the values have been materially affected by
events occurring after the closing of a foreign market, assets may be
valued by another method that the Board of Trustees believes
accurately reflects fair value.
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 a fund to withhold 31% of your taxable distributions and
redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR
ELECTRONICALLY . Fidelity will not be responsible for any losses
resulting from unauthorized transactions if it follows reasonable
security procedures designed to verify the identity of the investor.
Fidelity will request personalized security codes or other
information, and may also record calls. For transactions conducted
through the Internet, Fidelity recommends the use of an Internet
browser with 128-bit encryption. You should verify the accuracy of
your confirmation statements immediately after you receive them. If
you do not want the ability to redeem and exchange by telephone, call
Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail or by visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time. Each fund also reserves the right to offer shares
on a limited basis, and to resume the offering of shares at any
time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your investment is received in
proper form. Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase
will be canceled and you could be liable for any losses or fees a fund
or its transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money
order, U.S. Treasury check, Federal Reserve check, or direct deposit
instead.
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 time when a fund is
priced on the following business day. If payment is not received by
that time, the financial institution could be held liable for
resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper
form, minus the trading fee, if applicable. Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect a fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day
after your phone call.
(small solid bullet) Each fund may hold payment on redemptions until
it is reasonably satisfied that investments made by check or Fidelity
Money Line have been collected, which can take up to seven business
days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
A TRADING FEE of 3.00% will be deducted from the redemption amount if
you sell your shares of Small Cap Stock after holding them less than
three years (1095 days). This fee is paid to the fund rather than
Fidelity, and is designed to offset the brokerage commissions, market
impact, and other costs associated with fluctuations in fund asset
levels and cash flow caused by shareholder trading.
The trading fee, if applicable, is charged on exchanges out of Small
Cap Stock. If you bought shares on different days, the shares you held
longest will be redeemed first for purposes of determining whether the
trading fee applies. The trading fee does not apply to shares that
were acquired through reinvestment of distributions. Small Cap Stock
reserves the right to reduce the 3.00% level of the trading fee or the
holding period.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an
annual maximum charge of $24.00 per shareholder. It is expected that
accounts will be valued on the second Friday in November of each year.
Accounts opened after September 30 will not be subject to the fee for
that year. The fee, which is payable to the transfer agent, is
designed to offset in part the relatively higher costs of servicing
smaller accounts. This fee will not be deducted from Fidelity
brokerage accounts, retirement accounts (except non-prototype
retirement accounts), accounts using regular investment plans, or if
total assets with Fidelity exceed $30,000. Eligibility for the $30,000
waiver is determined by aggregating Fidelity accounts maintained by
FSC or FBSI which are registered under the same social security number
or which list the same social security number for the custodian of a
Uniform Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $2,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV, minus
the trading fee, if applicable, on the day your account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to
qualified recipients who support the sale of shares of the funds
without reimbursement from the funds. Qualified recipients are
securities dealers who have sold fund shares or others, including
banks and other financial institutions, under special arrangements in
connection with FDC's sales activities. 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.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds. However, you should note the
following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage-point 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 exchange them into a
fund with a 3% sales charge, you would pay an additional 1% sales
charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, each fund reserves the right to
temporarily or permanently terminate the exchange privilege of any
investor 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 counted
together for purposes of the four exchange limit.
(small solid 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.
(small solid bullet) Each 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 the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if a
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges
that coincides with a "market timing" strategy may be disruptive to a
fund.
Although the funds will attempt to give you prior notice whenever they
are reasonably able to do so, they may impose these restrictions at
any time. The funds reserve 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 1.00% and trading fees of up to 3.00%
of the amount exchanged . Check each fund's prospectus for details.
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity
Investments, Fidelity Money Line, TouchTone Xpress, Fidelity Automatic
Account Builder, and Directed Dividends are registered trademarks of
FMR Corp.
Portfolio Advisory Services is a service mark of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.

This prospectus is printed on recycled paper using soy-based inks.
FIDELITY SMALL CAP STOCK FUND AND FIDELITY LARGE CAP STOCK FUND
FUNDS OF FIDELITY COMMONWEALTH TRUST
FIDELITY MID-CAP STOCK FUND
A FUND OF FIDELITY DEVONSHIRE TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 19, 1998
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus
(dated June 19, 1998 ). Please retain this document for future
reference. The funds' Annual Reports are separate documents supplied
with this SAI. To obtain a free additional copy of the Prospectus or
an Annual Report, please call Fidelity (registered trademark) at
1-800-544-8888.
TABLE OF CONTENTS PAGE

Investment Policies and Limitations 33

Portfolio Transactions 39

Valuation 42

Performance 42

Additional Purchase, Exchange and Redemption Information 47

Distributions and Taxes 47

FMR 47

Trustees and Officers 48

Management Contracts 50

Distribution and Service Plans 54

Contracts with FMR Affiliates 54

Description of the Trusts 55

Financial Statements 56

Appendix 56

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company, Inc. (FSC)
SML-ptb-0698
475973
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 a 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.
A 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 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF SMALL CAP STOCK
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, or
securities of other investment companies) 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.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
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 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 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.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), 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 was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page .
INVESTMENT LIMITATIONS OF MID-CAP STOCK
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.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same investment objectives, policies, and limitations as the fund.
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 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 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.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), 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 was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page .
INVESTMENT LIMITATIONS OF LARGE CAP STOCK
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.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same investment objective, policies, and limitations
as the fund.
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 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 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.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), 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 was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page .
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help a fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
CLOSED-END INVESTMENT COMPANIES are investment companies
that issue a fixed number of shares which trade on a stock exchange or
over-the-counter. Closed-end investment companies are professionally
managed and may invest in any type of security. Shares of closed-end
investment companies may trade at a premium or a discount to their net
asset value. A fund may purchase shares of closed-end investment
companies to facilitate investment in certain foreign countries.
CONVERTIBLE SECURITIES are bonds, debentures, notes,
preferred stocks or other securities that may be converted or
exchanged (by the holder or by the issuer) into shares of the
underlying common stock (or cash or securities of equivalent value) at
a stated exchange ratio. A convertible security may also be called for
redemption or conversion by the issuer after a particular date and
under certain circumstances (including a specified price) established
upon issue. If a convertible security held by a fund is called for
redemption or conversion, the fund could be required to tender it for
redemption, convert it into the underlying common stock, or sell it to
a third party.
Convertible securities generally have less potential for gain or
loss than common stocks. Convertible securities generally provide
yields higher than the underlying common stocks, but generally lower
than comparable non-convertible securities. Because of this higher
yield, convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory , or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include 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 is no assurance that
FMR will be able to anticipate these potential events or counter their
effects. In addition, the value of securities denominated in
foreign currencies and of dividends and interest paid with respect to
such securities will fluctuate based on the relative strength of the
U.S. dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. In addition, the costs
associated with foreign investments, including withholding taxes,
brokerage commissions and custodial costs, are generally higher than
with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
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 (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market 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. A fund may use currency
forward contracts for any purpose consistent with its investment
objective.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund 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.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a 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. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. 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 direct 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.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
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, a
fund will segregate assets to cover currency forward contracts, if
any, whose purpose is essentially speculative. A 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 currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not intend to direct or
administer the day-to-day operations of any company. A 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 in which a fund may engage, 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 a 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 a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to
futures and options: Asset Coverage for Futures and Options Positions,
Combined Positions, Correlation of Price Changes, Futures Contracts,
Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, Options and
Futures Relating to Foreign Currencies, OTC Options, Purchasing Put
and Call Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds 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 a fund's assets could impede portfolio management
or the fund's ability to meet redemption requests or other current
obligations.
COMBINED POSITIONS involve purchasing and writing 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, purchasing a put option and writing a
call option on the same underlying instrument would 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, 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 a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund 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 a
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. A 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 a 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.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer
agrees to purchase a specified underlying instrument at a
specified future date. In selling a futures contract, the seller
agrees to sell a specified underlying instrument at a specified
future date. The price at which the purchase and sale will take place
is fixed when the buyer and seller enter 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
Index (S&P 500 (registered trademark) ). 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 a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a 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 a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a 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.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed 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. The funds intend to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option
premiums.
In addition, each 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 assets under normal conditions ; 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.
The above limitations on the funds' investments in futures contracts
and options, and the funds' policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
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 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 a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
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. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written 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 a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a 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.
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 (OTC) 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 purchaser or writer 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.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser 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 purchaser 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 purchaser may
terminate its position in a put option by allowing it to expire or by
exercising the option. If the option is allowed to expire, the
purchaser will lose the entire premium. If the option is
exercised, the purchaser completes the sale of the underlying
instrument at the strike price. A purchaser 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, 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. The writer of a put or call option
takes the opposite side of the transaction from the option's
purchaser. In return for receipt of the premium, the writer 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.
The writer may seek to terminate a position in a put option 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,
however, the writer 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. When
writing an option on a futures contract, a fund will be required to
make margin payments to an FCM as described above for futures
contracts.
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 writer 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.
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 a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of a 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 FMR to be illiquid include
repurchase agreements not entitling the holder to repayment of
principal and payment of interest within seven days, over-the-counter
options, and non-government stripped fixed-rate mortgage-backed
securities. Also, FMR may determine some restricted securities,
government-stripped fixed-rate mortgage-backed securities, loans and
other direct debt instruments, emerging market securities, and swap
agreements to be illiquid. However, with respect to over-the-counter
options a 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.
INDEXED SECURITIES are instruments 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 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.
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 United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are
also 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.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A 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.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower 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 are
subject to a fund's policies regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment of
interest and repayment of principal. Direct debt instruments may not
be rated by any nationally recognized statistical rating service. If
scheduled interest or principal payments are not made, the value of
the instrument may be adversely affected. Loans that are fully secured
provide more protections than an unsecured loan in the event of
failure to make scheduled interest or principal payments. However,
there is no assurance that the liquidation of collateral from a
secured loan would satisfy the borrower's obligation, or that the
collateral could be liquidated. Indebtedness of borrowers whose
creditworthiness is poor involves substantially greater risks and may
be highly speculative. Borrowers that are in bankruptcy or
restructuring may never pay off their indebtedness, or may pay only a
small fraction of the amount owed. Direct indebtedness of developing
countries also involves a risk that the governmental entities
responsible for the repayment of the debt may be unable, or unwilling,
to pay interest and repay principal when due.
Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve additional
risks. For example, if a loan is foreclosed, the purchaser could
become part owner of any collateral, and would bear the costs and
liabilities associated with owning and disposing of the collateral. In
addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender.
Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary. Direct debt instruments that are
not in the form of securities may offer less legal protection to the
purchaser in the event of fraud or misrepresentation. In the absence
of definitive regulatory guidance, FMR uses its research to attempt to
avoid situations where fraud or misrepresentation could adversely
affect a fund.
A loan is often administered by a bank or other financial institution
that acts as agent for all holders. The agent administers the terms of
the loan, as specified in the loan agreement. Unless, under the terms
of the loan or other indebtedness, the purchaser has direct recourse
against the borrower, the purchaser may have to rely on the agent to
apply appropriate credit remedies against a borrower. If assets held
by the agent for the benefit of a purchaser were determined to be
subject to the claims of the agent's general creditors, the purchaser
might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate
purchasers to make additional cash payments on demand. These
commitments may have the effect of requiring a purchaser to increase
its investment in a borrower at a time when it would not otherwise
have done so, even if the borrower's condition makes it unlikely that
the amount will ever be repaid. A fund will set aside appropriate
liquid assets in a segregated custodial account to cover its potential
obligations under standby financing commitments.
Each fund limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry (see each fund's
investment limitations). For purposes of these limitations, a fund
generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between a fund
and the borrower, if the participation does not shift to the fund the
direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an
issuer of indebtedness may restrict a fund's ability to invest in
indebtedness related to a single financial intermediary, or a group of
intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities 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-quality debt securities may fluctuate more than those
of higher-quality 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 the future performance of the high-yield bond market, especially
during periods of economic recession.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. If market
quotations are not available, lower-quality 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 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 liquidity of lower-quality debt
securities and the ability of outside pricing services to value
lower-quality debt securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type. FMR will attempt to identify those
issuers of high-yielding 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.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a 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.
REAL ESTATE INVESTMENT TRUSTS. Equity real estate investment
trusts own real estate properties, while mortgage real estate
investment trusts make construction, development, and long-term
mortgage loans. Their value may be affected by changes in the value of
the underlying property of the trusts, the creditworthiness of the
issuer, property taxes, interest rates, and tax and regulatory
requirements, such as those relating to the environment. Both types of
trusts are dependent upon management skill, are not diversified, and
are subject to heavy cash flow dependency, defaults by borrowers,
self-liquidation, and the possibility of failing to qualify for
tax-free status of income under the Internal Revenue Code and failing
to maintain exemption from the 1940 Act.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. 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. As
protection against the risk that the original seller will not fulfill
its obligation, the securities are held in a separate account at a
bank, marked-to-market daily, and maintained at a value at least equal
to the sale price plus the accrued incremental amount. While it does
not presently appear possible to eliminate all risks from these
transactions (particularly the possibility that the value of the
underlying security will be less than the resale price, as well as
delays and costs to a fund in connection with bankruptcy proceedings),
the funds will engage in repurchase agreement transactions with
parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
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, a 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 it may
be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to
develop, a fund might obtain a less favorable price than prevailed
when it decided to seek registration of the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. While a reverse repurchase
agreement is outstanding, a fund will maintain appropriate liquid
assets in a segregated custodial account to cover its obligation under
the agreement. The funds will enter into reverse repurchase agreements
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR. Such transactions may increase fluctuations in
the market value of fund assets and may be viewed as a form of
leverage.
SECURITIES LENDING. A 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 a 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 a
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 other
eligible securities. Investing this cash subjects that investment, as
well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when
it owns or has the right to obtain securities equivalent in kind or
amount to the securities sold short. Such short sales are known as
short sales "against the box." If a 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
expenses, in connection with opening, maintaining, and closing short
sales against the box.
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 a fund's exposure to long- or short-term interest
rates (in the United States 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.
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 a 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 a fund's investments
and its share price.
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 a 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.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
A fund will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap
agreements. If a 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 a 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.
WARRANTS. Warrants are instruments which entitle the holder
to buy an equity security at a specific price for a specific period of
time. Changes in the value of a warrant do not necessarily correspond
to changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each 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 considers 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; the reasonableness of any
commissions; and , if applicable, arrangements for payment of
fund expenses.
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above .
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.
Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds 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; and
the availability of securities or the purchasers or sellers of
securities. In addition, such broker-dealers may furnish analyses and
reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts;
and effect securities transactions and perform functions
incidental thereto (such as clearance and settlement).
The selection of such broker-dealers for transactions in equity
securities 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 research and execution services provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that 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 a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer 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 a 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 that fund or
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 funds or shares of
other Fidelity funds to the extent permitted by law. FMR may use
research services provided by and place agency transactions with
National Financial Services Corporation (NFSC) and Fidelity
Brokerage Services Japan LLC (FBSJ), indirect subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. Prior to December 9, 1997, FMR used research
services provided by and placed agency transactions with Fidelity
Brokerage Services (FBS), an indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers
(including affiliates of FMR) who have entered into
arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by a fund toward the reduction
of that fund's expenses. The transaction quality must, however, be
comparable to those of other qualified broker-dealers.
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, unless certain
requirements are satisfied. Pursuant to such requirements, the Board
of Trustees has authorized NFSC to execute portfolio transactions on
national securities exchanges in accordance with approved procedures
and applicable SEC rules.
The Trustees of each fund 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.
For the fiscal periods ended April 30, 1998 and 1997, the portfolio
turnover rates were 132% and 155%, respectively, for Mid-Cap Stock and
159% and 110%, respectively, for Large Cap Stock. For the fiscal
period ended April 30, 1998, the portfolio turnover rate was 75%
(annualized) for Small Cap Stock. Because a high turnover rate
increases transaction costs and may increase taxable gains, FMR
carefully weighs the anticipated benefits of short-term investing
against these consequences.
The following tables show the brokerage commissions paid by the
funds. Significant changes in brokerage commissions paid by a fund
from year to year may result from changing asset levels throughout the
year. A fund may pay both commissions and spreads in connection with
the placement of portfolio transactions.
The following table shows the total amount of brokerage commissions
paid by each fund.
Fiscal Total
Year Ended Amount Paid

Small Cap Stock April 30

1998* $ 395,608

Mid-Cap Stock April 30

1998 $ 3,508,794

1997 $ 3,645,148

1996 $ 2,788,301

Large Cap Stock April 30

1998 $ 232,239

1997 $ 161,118

1996** $ 117,355

* From March 12, 1998 (commencement of operations) to April 30,
1998.
** From June 22, 1995 (commencement of operations) to April 30, 1996.
Of the following tables, the first shows the total amount of
brokerage commissions paid by each fund to NFSC for the past three
fiscal years. The second table shows the approximate percentage of
aggregate brokerage commissions paid by a fund to NFSC for
transactions involving the approximate percentage of the aggregate
dollar amount of transactions for which the fund paid brokerage
commissions for the fiscal year ended 1998. NFSC is paid on a
commission basis.
Total Amount Paid

Fiscal To NFSC
Year Ended

Small Cap Stock April 30

1998* $ 29,840

Mid-Cap Stock April 30

1998 $ 480,712

1997 $ 796,672

1996 $ 1,000,145

Large Cap Stock April 30

1998 $ 29,163

1997 $ 19,720

1996** $ 44,036

* From March 12, 1998 (commencement of operations) to April 30,
1998.
* * From June 22, 1995 (commencement of operations) to April 30,
1996.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year % of % of
Ended 1998 Aggregate Commissions Aggregate Dollar
Paid to NFSC Amount of
Transactions Effected
through NFSC

Small Cap Stock *(dagger) April 30 7.54% 10.77%

Mid-Cap Stock (dagger) April 30 13.70% 19.89%

Large Cap Stock (dagger) April 30 12.56% 18.03%

</TABLE>

* From March 12, 1998 (commencement of operations) to April 30, 1998.
(dagger) The difference between the percentage of aggregate
brokerage commissions paid to, and the percentage of the aggregate
dollar amount of transactions effected through NFSC is a result of the
low commission rates charged by NFSC.
The following table shows the dollar amount of brokerage commissions
paid to firms that provided research services and the approximate
dollar amount of the transactions involved for the fiscal year ended
April 30, 1998.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year $ Amount of $ Amount of
Ended 1998 Commissions Paid to Brokerage
Firms Transactions
that Provided Involved*
Research Services*

Small Cap Stock ** April 30 $ 357,839 $ 201,625,471

Mid-Cap Stock April 30 $ 3,262,381 $ 2,885,521,822

Large Cap Stock April 30 $ 205,754 $ 216,617,140

</TABLE>

* The provision of research services was not necessarily a factor
in the placement of all this business with such firms.
** From March 12, 1998 (commencement of operations) to April 30, 1998.
The Trustees of each fund have approved procedures in conformity
with Rule 10f-3 under the 1940 Act whereby a fund may purchase
securities that are offered in underwritings in which an affiliate of
FMR participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each 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
each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR or its affiliates ,
investment decisions for each 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 and accounts are managed by the same
investment adviser, particularly when the same security is suitable
for the investment objective of more than one fund or account.
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 procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
FSC normally determines each fund's net asset value per share (NAV) as
of the close of the New York Stock Exchange (NYSE) (normally 4:00 p.m.
Eastern time). The valuation of portfolio securities is determined as
of this time for the purpose of computing each fund's NAV.
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most equity securities
for which the primary market is the United States are valued at last
sale price or, if no sale has occurred, at the closing bid price. Most
equity securities for which the primary market is outside the United
States are valued using the official closing price or the last sale
price in the principal market in which they are traded. If the last
sale price (on the local exchange) is unavailable, the last evaluated
quote or last bid price normally is used. Securities of other open-end
investment companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the
close of the NYSE using the last quoted price on the local currency
and then translates the value of foreign securities from their local
currencies into U.S. dollars. Any changes in the value of forward
contracts due to exchange rate fluctuations and days to maturity are
included in the calculation of NAV. If an extraordinary event that is
expected to materially affect the value of a portfolio security occurs
after the close of an exchange on which that security is traded, then
that security will be valued as determined in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value. In addition, securities and other assets for which
there is no readily available market value may be valued in good faith
by a committee appointed by the Board of Trustees. The procedures set
forth above need not be used to determine the value of the securities
owned by a fund if, in the opinion of a committee appointed by the
Board of Trustees, some other method would more accurately reflect the
fair market value of such securities.
PERFORMANCE
A fund may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. Each fund's share price and
total return 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 a fund's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in a fund's
NAV over a stated period. Average annual total returns are calculated
by determining the growth or decline in value of a hypothetical
historical investment in a 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 total return
of 100% over ten years would produce an average annual total 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 total
returns covering periods of less than one year are calculated by
determining a fund's total return for the period, extending that
return for a full year (assuming that return remains constant over the
year), and quoting the result as an annual return. While average
annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is
not constant over time, but changes from year to year, and that
average annual total returns represent averaged figures as opposed to
the actual year-to-year performance of a fund.
In addition to average annual total returns, a 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. Total returns may be quoted on a before-tax or
after-tax basis and may or may not include the effect of Small Cap
Stock's 3.00% trading fee on shares held less than three years.
Excluding a fund's trading fee from a total return calculation
produces a higher total return figure. Total returns, yields, and
other performance information may be quoted numerically or in a table,
graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a 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 a fund and reflects all elements of its return. Unless otherwise
indicated, a fund's adjusted NAVs are not adjusted for sales charges,
if any.
MOVING AVERAGES. A 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.
On April 24, 1998, the 13-week and 39-week long-term moving averages
were $18.22 and $16.87, respectively, for Mid-Cap Stock, and $15.81
and $14.66, respectively, for Large Cap Stock.
CALCULATING HISTORICAL FUND RESULTS. The following table shows the
performance of Mid-Cap Stock and Large Cap Stock calculated including
certain fund expenses.
HISTORICAL FUND RESULTS. The following table shows Mid-Cap Stock's
and Large Cap Stock's total return for the period ended April 30,
1998.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Average Annual Cumulative
Total Returns Total Returns

One Life of One Life of
Year Fund Year Fund

Mid-Cap Stock 46.55% 24.57%* 46.55% 145.61%*

Large Cap Stock 39. 03 % 25. 58 %** 39. 03 % 91. 72 %**

</TABLE>

* From March 29, 1994 (commencement of operations).
** From June 22, 1995 (commencement of operations).
The following tables show the income and capital elements of Mid-Cap
Stock's and Large Cap Stock's cumulative total return. The tables
compare each fund's return to the record of the S&P 500, the Dow Jones
Industrial Average (DJIA), and the cost of living, as measured by the
Consumer Price Index (CPI), over the same period. The CPI information
is as of the month-end closest to the initial investment date for each
fund. The S&P 500 and DJIA comparisons are provided to show how each
fund's total return compared to the record of a broad unmanaged index
of common stocks and a narrower set of stocks of major industrial
companies, respectively, over the same period. Each 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
indexes. The S&P 500 and DJIA returns are based on the prices of
unmanaged groups of stocks and, unlike each fund's returns, do not
include the effect of brokerage commissions or other costs of
investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in Mid-Cap Stock and Large Cap Stock during the
life of each fund , assuming all distributions were reinvested.
Total returns are based on past results and are not an indication
of future performance. Tax consequences of different investments
have not been factored into the figures below.
During the period from March 29, 1994 (commencement of operations)
to April 30, 1998, a hypothetical $10,000 investment in Mid-Cap Stock
would have grown to $24,561.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
MID-CAP STOCK INDICES

Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
April 30 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions

1998 $ 18,800 $ 145 $ 5,616 $ 24,561 $ 26,942 $ 26,788 $ 11,039

1997 $ 14,300 $ 99 $ 2,360 $ 16,759 $ 1 9,099 $ 20, 373 $ 10,883

1996 $ 14,830 $ 69 $ 1,058 $ 15,957 $ 15, 263 $ 15, 859 $ 10,618

1995 $ 12,010 $ 0 $ 186 $ 12,196 $ 11, 722 $ 1 2,029 $ 10,319

1994* $ 9,840 $ 0 $ 0 $ 9,840 $ 9, 979 $ 9, 977 $ 10,014

</TABLE>

* From March 29, 1994 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Mid-Cap
Stock on March 29, 1994, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $14,524. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $100 for dividends and $3,910 for capital gain
distributions.
During the period from June 22, 1995 (commencement of operations)
to April 30, 1998, a hypothetical $10,000 investment in Large Cap
Stock would have grown to $19,172.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
LARGE CAP STOCK INDICES

Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
April
30 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions

1998 $ 16,4 50 $ 193 $ 2,5 29 $ 19,1 72 $ 21,363 $ 20,895 $ 10,656

1997 $ 12,810 $ 90 $ 891 $ 13,791 $ 15, 144 $ 1 5,892 $ 10,505

1996* $ 11,720 $ 32 $ 0 $ 11,752 $ 12, 102 $ 12, 371 $ 10,249

</TABLE>

* From June 22, 1995 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Large
Cap Stock on June 22, 1995, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $12,136. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $140 for dividends and $1,870 for capital gain
distributions.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on total return, assume reinvestment of distributions, do
not take sales charges or trading fees into consideration, and are
prepared without regard to tax consequences. In addition to the mutual
fund rankings, a fund's performance may be compared to stock, bond,
and money market mutual fund performance indices prepared by Lipper or
other organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a 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. 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.
A fund's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest.
The total return of a benchmark index reflects reinvestment of all
dividends and capital gains paid by securities included in the index.
Unlike a fund's returns, however, the index returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.
Small Cap Stock may compare its performance to that of the Russell
2000 Index, an unmanaged index of 2,000 small company stocks.
Mid-Cap Stock may compare its performance to that of the Standard &
Poor's MidCap 400 Index, a widely recognized, unmanaged index of 400
medium-capitalization stocks.
Large Cap Stock may compare its performance to that of the Standard &
Poor's 500 Index, a widely recognized, unmanaged index of common
stocks.
A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee your principal or your
return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
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.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. A 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 a 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 a fund's price movements over specific
periods of time. Each point on the momentum indicator represents a
fund's percentage change in price movements over that period.
A 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 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.
A 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 $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of April 30, 1998, FMR advised over $30 billion in municipal
fund assets, $103 billion in money market fund assets, $454 billion in
equity fund assets, $73 billion in international fund assets, and $29
billion in Spartan fund assets. The funds may reference the growth
and variety of money market mutual funds and the adviser's innovation
and participation in the industry. The equity funds under management
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. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Each 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
1998 : New Year's Day, Martin Luther King's Birthday,
Presidents' Day, Good Friday, Memorial Day, 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. In addition, on
days when the Federal Reserve Wire System is closed, federal funds
wires cannot be sent.
FSC normally determines each 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, a fund's NAV may be affected
on days when investors do not have access to the fund to purchase or
redeem shares. In addition, trading in some of a fund's portfolio
securities may not occur on days when the fund is open for business.
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 each 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, each 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 administrative 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 the rules
and regulations thereunder, 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, each 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
DIVIDENDS. A portion of each 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 each 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%.
Each fund will notify corporate shareholders annually of the
percentage of fund dividends that qualifies for the dividends-received
deduction. A portion of each fund's dividends derived from certain
U.S. Government securities 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. If a fund's distributions exceed
its net investment company taxable income during a taxable year, all
or a portion of the distributions made in the same taxable year would
be recharacterized as a return of capital to shareholders, thereby
reducing each shareholder's cost basis in the fund. Short-term capital
gains are distributed as dividend income. Each 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 each
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 capital gain distribution on shares of a 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 capital gain distribution will be
considered a long-term loss for tax purposes. Short-term capital gains
distributed by each fund are taxable to shareholders as dividends, not
as capital gains.
As of April 30, 1998, Mid-Cap Stock hereby designates approximately
$73,541,000 as a capital gain dividend for the purpose of the
dividend-paid deduction.
As of April 30, 1998, Large Cap Stock hereby designates
approximately $6,232,000 as a capital gain dividend for the purpose of
the dividend-paid deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments
may also impose taxes on other payments or gains with respect to
foreign securities. Because each 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 FUNDS. Each 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, each 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, and intends to comply with
other tax rules applicable to regulated investment companies.
Each fund is treated as a separate entity from the other funds, if
any, of its trust for tax purposes.
If a 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 a fund with
respect to deferred taxes arising from such distributions or gains.
Generally, a fund will elect to mark-to-market any PFIC shares.
Unrealized gains will be recognized as income for tax purposes and
must be distributed to shareholders as dividends.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each 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 fund distributions, and shares may
be subject to state and local personal property taxes. Investors
should consult their tax advisers to determine whether a fund is
suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures
for personal investing and restricts certain transactions. For
example, all personal trades in most securities require pre-clearance,
and participation in initial public offerings is prohibited. In
addition, restrictions on the timing of personal investing in relation
to trades by Fidelity funds and on short-term trading have been
adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, 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 and
Members of the Advisory Board also serve in similar capacities
for other funds advised by FMR. The business address of each
Trustee, Member of the Advisory Board , and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR.
The business address of all the other Trustees is Fidelity
Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation
with either the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (67), 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 Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc. Abigail Johnson, Vice President of certain
Equity Funds, is Mr. Johnson's daughter.
J. GARY BURKHEAD (56), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (65), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of USA Waste
Services, Inc. (non-hazardous waste, 1993), CH2M Hill Companies
(engineering), Rio Grande, Inc. (oil and gas production), and Daniel
Industries (petroleum measurement equipment manufacturer). In
addition, he is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (66), Trustee. Prior to her retirement in
September 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),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont School
of Business Administration.
ROBERT M. GATES (54), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of LucasVarity PLC
(automotive components and diesel engines), Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment and replacement
products). Mr. Gates also is a Trustee of the Forum for
International Policy and of the Endowment Association of the College
of William and Mary. In addition, he is a member of the National
Executive Board of the Boy Scouts of America.
E. BRADLEY JONES (70), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc. (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (65), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of the National Arts Stabilization Fund,
Chairman of the Board of Trustees of the Greenwich Hospital
Association, Director of the Yale-New Haven Health Services Corp.
(1998), a Member of the Public Oversight Board of the American
Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of
Securities Dealers, Inc. (1996).
*PETER S. LYNCH (55), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR 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). 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.
WILLIAM O. McCOY (64), Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (69), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal products, 1992), CUNO,
Inc. (liquid and gas filtration products, 1996), and Associated
Estates Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (65), Trustee (1993), is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997), and
Infomart (marketing services, 1991), a Trammell Crow Co. In addition,
he serves as the Campaign Vice Chairman of the Tri-State United Way
(1993) and is a member of the University of Alabama President's
Cabinet.
*ROBERT C. POZEN (51), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (69), Trustee, 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 ConAgra, Inc. (agricultural products), Georgia Power Company
(electric utility), National Life Insurance Company of Vermont,
American Software, Inc., and AppleSouth, Inc. (restaurants, 1992).
ABIGAIL P. JOHNSON (36), is Vice President of certain Equity Funds
(1997), and is a Director of FMR Corp. (1994). Before assuming her
current responsibilities, Ms. Johnson managed a number of Fidelity
funds. Edward C. Johnson 3d, Trustee and President of the Funds, is
Ms. Johnson's father.
ERIC D. ROITER (49), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997). Prior
to joining Fidelity, Mr. Roiter was a partner at Debevoise & Plimpton
(1981-1997) and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981).
RICHARD A. SILVER (51), Treasurer (1997), is Treasurer of the
Fidelity funds and is an employee of FMR (1997). Before joining FMR,
Mr. Silver served as Executive Vice President, Fund Accounting &
Administration at First Data Investor Services Group, Inc.
(1996-1997). Prior to 1996, Mr. Silver was Senior Vice President and
Chief Financial Officer at The Colonial Group, Inc. Mr. Silver also
served as Chairman of the Accounting/Treasurer's Committee of the
Investment Company Institute (1987-1993).
JOHN H. COSTELLO (51), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993)
The following table sets forth information describing the
compensation of each Trustee and Member of the Advisory Board of each
fund for his or her services for the fiscal year ended April 30, 1998,
or calendar year ended December 31, 1997, as applicable.
COMPENSATION TABLE

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Aggregate Aggregate Total
and Compensation Compensation from Compensation from Compensation
Members of the Advisory Board from Mid-Cap StockB Large Cap Stock B from the
Small Cap StockB,+ Fund Complex*,A

J. Gary Burkhead** $ 0 $ 0 $ 0 $ 0

Ralph F. Cox $ 35 $ 583 $ 51 $ 214,500

Phyllis Burke Davis $ 35 $ 583 $ 51 $ 210,000

Robert M. Gates $ 35 $ 593 $ 52 $ 176,000

Edward C. Johnson 3d** $ 0 $ 0 $ 0 $ 0

E. Bradley Jones $ 35 $ 583 $ 51 $ 211,500

Donald J. Kirk $ 35 $ 583 $ 51 $ 211,500

Peter S. Lynch** $ 0 $ 0 $ 0 $ 0

William O. McCoy $ 35 $ 593 $ 52 $ 214,500

Gerald C. McDonough $ 43 $ 727 $ 63 $ 264,500

Marvin L. Mann $ 35 $ 575 $ 50 $ 214,500

Robert C. Pozen** $ 0 $ 0 $ 0 $ 0

Thomas R. Williams $ 35 $ 583 $ 51 $ 214,500

</TABLE>

* Information is for the calendar year ended December 31, 1997 for
230 funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are
compensated by FMR.
+ Figures presented are estimates for the fund's first fiscal year
ended April 30, 1998.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $62,500; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,699; Marvin L. Mann, $53,699; and Thomas R.
Williams, $62,462.
B Compensation figures include cash.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of April 30, 1998 , the Trustees, Members of the Advisory
Board, and officers of each fund owned, in the aggregate, less than
1 % of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
FMR is manager of Small Cap Stock, Mid-Cap Stock and Large Cap Stock
pursuant to management contracts dated February 19, 1998, February 17,
1994 and May 18, 1995, respectively, which were approved by FMR, as
the then sole shareholder, on March 3, 1998, February 24, 1994 and
June 5, 1995, respectively.
MANAGEMENT SERVICES. Each fund employs FMR to furnish investment
advisory and other services. Under the terms of its management
contract with each 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 each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the trusts or of FMR, and all personnel of
each fund 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 each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations, and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, pricing and bookkeeping agent, and
securities lending agent, each fund pays all of its expenses that are
not assumed by those parties. Each fund pays for the typesetting,
printing, and mailing of its proxy materials to shareholders, legal
expenses, and the fees of the custodian, auditor and non-interested
Trustees. Each fund's management contract further provides that the
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to
shareholders; however, under the terms of each fund's transfer agent
agreement, the transfer agent bears the costs of providing these
services to existing shareholders. Other expenses paid by each 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
securities laws and making necessary filings under state securities
laws. Each fund is also liable for such non-recurring 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 its officers and
Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under the management
contract, each fund pays FMR a monthly management fee which has two
components: a basic fee, which is the sum of a group fee rate and an
individual fund fee rate, and a performance adjustment based on a
comparison of each fund's performance to that of the Russell 2000
(Small Cap Stock), the S&P MidCap 400 (Mid-Cap Stock) or the S&P 500
(Large Cap Stock).
For Mid-Cap Stock and Large Cap Stock, on January 1, 1996, and for
Mid-Cap Stock on August 1, 1994, FMR voluntarily modified the
breakpoints in the group fee rate schedules. The revised group fee
rate schedules, depicted below, provide for lower management fee rates
as FMR's assets under management increase. Small Cap Stock's current
management contract reflects the revised group fee rate schedule
below.
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.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Annualized Group Net Effective Annual Fee
Assets Rate Assets Rate

0 - $3 billion .5200% $ 0.5 billion .5200%

3 - 6 .4900 25 .4238

6 - 9 .4600 50 .3823

9 - 12 .4300 75 .3626

12 - 15 .4000 100 .3512

15 - 18 .3850 125 .3430

18 - 21 .3700 150 .3371

21 - 24 .3600 175 .3325

24 - 30 .3500 200 .3284

30 - 36 .3450 225 .3249

36 - 42 .3400 250 .3219

42 - 48 .3350 275 .3190

48 - 66 .3250 300 .3163

66 - 84 .3200 325 .3137

84 - 102 .3150 350 .3113

102 - 138 .3100 375 .3090

138 - 174 .3050 400 .3067

174 - 210 .3000 425 .3046

210 - 246 .2950 450 .3024

246 - 282 .2900 475 .3003

282 - 318 .2850 500 .2982

318 - 354 .2800 525 .2962

354 - 390 .2750 550 .2942

390 - 426 .2700

426 - 462 .2650

462 - 498 .2600

498 - 534 .2550

Over 534 .2500

The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ 626 billion of group net assets - the approximate
level for April 1998 - was 0.2888 %, which is the weighted
average of the respective fee rates for each level of group net assets
up to $ 626 billion.
Small Cap Stock's, Mid-Cap Stock's and Large Cap Stock's individual
fund fee rates are 0.45%, 0.30%, and 0.30%, respectively. Based on the
average group net assets of the funds advised by FMR for April 1998,
each fund's annual basic fee rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate

Small Cap Stock 0. 2888 % + 0.45% = 0. 7388 %

Mid-Cap Stock 0. 2888 % + 0.30% = 0. 5888 %

Large Cap Stock 0. 2888 % + 0.30% = 0. 5888 %

</TABLE>

One-twelfth of this annual basic fee rate is applied to each fund's
net assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for each of Small
Cap Stock, Mid-Cap Stock and Large Cap Stock 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, the S&P MidCap 400 and
the S&P 500, respectively, (the Index) over the same period. The
performance period for Small Cap Stock and Large Cap Stock commenced
on April 1, 1998 and July 1, 1995, respectively. Starting with the
twelfth month, the performance adjustment takes effect. Each month
subsequent to the twelfth month, a new month is added to the
performance period until the performance period includes 36 months.
Thereafter, the performance period consists of the most recent month
plus the previous 35 months.
Each percentage point of difference, calculated to the nearest 0.01%
(for Small Cap Stock) and 1.00% (for Mid-Cap Stock and Large Cap
Stock) (up to a maximum difference of (plus/minus)10.00) is multiplied
by a performance adjustment rate of 0.02%.
The performance comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to each 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 maximum annualized adjustment rate is (plus/minus)0.20% of a
fund's average net assets over the performance period.
A fund's performance is calculated based on change in NAV. For
purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if
reinvested in that fund 's shares at the NAV as of the
record date for payment. The record of the Index is based on change in
value and is adjusted for any cash distributions from the companies
whose securities compose the Index.
Because the adjustment to the basic fee is based on a fund's
performance compared to the investment record of the applicable
Index, 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 Index. Moreover, the comparative
investment performance of each fund is based solely on the
relevant performance period without regard to the cumulative
performance over a longer or shorter period of time.
The following table shows the amount of management fees paid by each
fund to FMR for the past three fiscal years, and the amount of
negative or positive performance adjustments to the management fees
paid by each fund.
Fund Fiscal Years Ended Performance Management Fees
April 30 Adjustment Paid to FMR

Small Cap Stock 1998** N/A $ 380,263

Mid-Cap Stock 1998 $ 23,736 $ 9,412,300*

1997 $ 1,538,949 $ 10,757,959*

1996 $ 725,221 $ 7,129,455*

Large Cap Stock 1998 $ (188,609) $ 606,874 *

1997 $ (73,325) $ 533,745*

1996*** N/A $ 334,620

* Including the amount of the performance adjustment.
** From March 12, 1998 (commencement of operations) .
*** From June 22, 1995 (commencement of operations) .
FMR may, from time to time, voluntarily reimburse all or a portion of
a fund's operating expenses (exclusive of interest, taxes,
brokerage commissions and extraordinary expenses) which is subject
to revision or termination . FMR retains the ability to be repaid
for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year.
Expense reimbursements by FMR will increase a fund's total returns,
and repayment of the reimbursement by a fund will lower its total
returns.
FMR voluntarily agreed to reimburse Small Cap Stock if and to the
extent that its aggregate operating expenses, including management
fees, were in excess of an annual rate of 1.50% of its average net
assets. For the fiscal period ended April 30, 1998, management fees
incurred under the fund's contract prior to reimbursement amounted to
$380,263, and management fees reimbursed by FMR amounted to
$197,166.
SUB-ADVISERS. On behalf of each fund, FMR has entered into
sub-advisory agreements with FMR U.K. and FMR Far East. Pursuant to
the sub-advisory agreements, FMR may receive investment advice and
research services outside the United States from the sub-advisers.
On behalf of each fund, FMR may also grant the sub-advisers investment
management authority as well as the authority to buy and sell
securities if FMR believes it would be beneficial to the funds.
Currently, FMR U.K. and FMR Far East each focus on issuers in
countries other than the United States such as those in Europe, Asia,
and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly
owned subsidiaries of FMR. Under the sub-advisory agreements FMR pays
the fees of FMR U.K. and FMR Far East. For providing non-discretionary
investment advice and research services, FMR pays FMR U.K. and FMR Far
East fees equal to 110% and 105%, respectively, of FMR U.K.'s and FMR
Far East's costs incurred in connection with providing investment
advice and research services.
On behalf of each fund, for providing discretionary investment
management and executing portfolio transactions, FMR pays FMR U.K. and
FMR Far East a fee equal to 50% of its monthly management fee rate
(including any performance adjustment) with respect to each fund's
average net assets managed by the sub-adviser on a discretionary
basis.
For providing investment advice and research services, fees paid to
the sub-advisers by FMR for the past three fiscal years are shown in
the table below.
Fiscal Year Ended FMR U.K. FMR Far East
April 30

Small Cap Stock

1998* $ 5,055 $ 5,380

Mid-Cap Stock

1998 $ 4,062 $ 4,048

1997 $ 13,000 $ 11,960

1996 $ 22,041 $ 25,351

Large Cap Stock

1998 $ 3,078 $ 3,093

1997 $ 2,313 $ 2,022

1996** $ 1,017 $ 1,135

* From March 12, 1998 (commencement of operations) .
** From June 22, 1995 (commencement of operations) .
For discretionary investment management and execution of portfolio
transactions, no fees were paid to the sub-advisers by FMR on behalf
of the funds for the past three fiscal years.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of
each fund (the Plans) pursuant to Rule 12b-1 under the 1940 Act (the
Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the funds of distribution expenses.
Under each Plan, if the payment of management fees by the fund to FMR
is deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. Each Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with the distribution of Small Cap
Stock, Mid-Cap Stock and Large Cap Stock shares. In addition, each
Plan provides that FMR, directly or through FDC, may make payments to
third parties, such as banks or broker-dealers, that engage in the
sale of Small Cap Stock, Mid-Cap Stock and Large Cap Stock shares, or
provide shareholder support services. Currently, the Board of Trustees
has authorized such payments for Small Cap Stock, Mid-Cap Stock
and Large Cap Stock shares.
FMR made no payments either directly or through FDC to third parties
for the fiscal year ended 1998.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that each Plan does not authorize payments by the fund other
than those made to FMR under its management contract with the fund. To
the extent that each Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares may result. Furthermore, certain shareholder support
services may be provided more effectively under the Plans by local
entities with whom shareholders have other relationships.
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 clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the funds might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. 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.
Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
CONTRACTS WITH FMR AFFILIATES
Each fund has entered into a transfer agent agreement with FSC,
an affiliate of FMR. Under the terms of the agreements, FSC
performs transfer agency, dividend disbursing, and shareholder
services for each fund.
For providing transfer agency services, FSC receives an
account fee and an asset-based fee each paid monthly with respect to
each account in a fund. For retail accounts and certain institutional
accounts, these fees are based on account size and fund type. For
certain institutional retirement accounts, these fees are based on
fund type. For certain other institutional retirement accounts, these
fees are based on account type (i.e., omnibus or non-omnibus) and, for
non-omnibus accounts, fund type. The account fees are subject to
increase based on postage rate changes.
The asset-based fees are subject to adjustment if the year-to-date
total return of the S&P 500 exceeds a positive or negative 15%.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the
transfer agency fees applicable to shareholder accounts in a qualified
state tuition program (QSTP), as defined under the Small Business Job
Protection Act of 1996, managed by FMR or an affiliate and each
Fidelity Freedom Fund, a fund of funds managed by an FMR affiliate,
according to the percentage of the QSTP's or Freedom Fund's assets
that is invested in a fund.
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
existing shareholders, with the exception of proxy statements.
Each fund has also entered into a service agent agreement with FSC.
Under the terms of the agreements, FSC calculates the NAV and
dividends for each fund, maintains each fund's portfolio and general
accounting records, and administers each fund's securities lending
program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month. The annual fee rates for pricing and bookkeeping services are
0 .0600% of the first $500 million of average net assets and
0 .0300% of average net assets in excess of $500 million. The
fee, not including reimbursement for out-of-pocket expenses, is
limited to a minimum of $60,000 and a maximum of $800,000 per year.
Pricing and bookkeeping fees, including reimbursement for
out-of-pocket expenses, paid by the funds to FSC for the past three
fiscal years are shown in the table below.
Fund 1998 1997 1996

Small Cap Stock $ 29,422 * N/A N/A

Mid-Cap Stock $ 627,926 $ 615,608 $ 465,101

Large Cap Stock $ 80,621 $ 65,987 $ 44,023**

* From March 12, 1998 (commencement of operations) .
** From June 22, 1995 (commencement of operations) .
For administering each fund's securities lending program, FSC receives
fees based on the number and duration of individual securities loans.
For the fiscal years ended April 30, 1998, 1997, 1996, the funds paid
no securities lending fees.
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR organized as a Massachusetts corporation on July 18,
1960. FDC is a broker-dealer registered under the Securities Exchange
Act of 1934 and a member of the National Association of Securities
Dealers, Inc. The distribution agreements call for FDC to use all
reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered at
NAV. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUSTS
TRUST ORGANIZATION. Fidelity Small Cap Stock Fund and Fidelity Large
Cap Stock Fund are funds of Fidelity Commonwealth Trust, an open-end
management investment company organized as a Massachusetts business
trust on November 8, 1974. On April 11, 1975, the trust's name was
changed from Fidelity Investors Trust to Fidelity Thrift Trust. 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 five funds of the
trust: Fidelity Intermediate Bond Fund, Fidelity Large Cap Stock Fund,
Spartan Market Index Fund, Fidelity Small Cap Selector and Fidelity
Small Cap Stock Fund.
Fidelity Mid-Cap Stock Fund is a fund of Fidelity Devonshire Trust, an
open-end management investment company originally organized as a
Massachusetts corporation on December 16, 1965. On March 4, 1985, the
trust was reorganized as a Massachusetts business trust, at which time
its name was changed from Fidelity Equity-Income Fund, Inc. to
Fidelity Equity-Income Fund. On December 19, 1986, the Board of
Trustees voted to change the name of the trust from Fidelity
Equity-Income Fund to Fidelity Devonshire Trust. Currently, there are
four funds of the trust: Fidelity Equity-Income Fund, Fidelity Mid-Cap
Stock Fund, Fidelity Real Estate Investment Portfolio and Fidelity
Utilities Fund.
The Declarations of trust permit the Trustees to create additional
funds.
In the event that FMR ceases to be the investment adviser to a trust
or a fund, the right of the trust or fund to use the identifying names
"Fidelity" and "Spartan" may be withdrawn. There is a remote
possibility that one fund might become liable for any misstatement in
its prospectus or statement of additional information about another
fund.
The assets of each trust received for the issue or sale of shares of
each of its funds 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 liabilities of their
respective trusts. Expenses with respect to each trust are to be
allocated in proportion to the asset value of their respective funds,
except where allocations of direct expense can otherwise be fairly
made. The officers of each trust, subject to the general supervision
of the Boards 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 of a certain trust. In the event of the dissolution
or liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
commonly known as "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. Each
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 its Trustees shall include a
provision limiting the obligations created thereby to the trust and
its assets. Each Declaration of Trust provides for indemnification out
of each fund's property of any shareholder held personally liable for
the obligations of the fund. Each Declaration of Trust also provides
that its funds 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 the 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.
Each 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 Declarations 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. As a shareholder, you receive one vote for each dollar value
of net asset value you own. 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 a trust or fund may, as set
forth in the Declarations of Trust, call meetings of a trust or fund
for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of an entire trust, the purpose of
voting on removal of one or more Trustees. Each trust or 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 trust
or the fund, as determined by the current value of each shareholder's
investment in the fund or trust. If not so terminated, each trust or
fund will continue indefinitely. Each fund may invest all of its
assets in another investment company.
CUSTODIAN. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts is custodian of the assets of Small Cap Stock and Large
Cap Stock. The Chase Manhattan Bank, 1 Chase Manhattan Plaza, New
York, New York is custodian of the assets of Mid-Cap Stock. Each
custodian is responsible for the safekeeping of a fund's assets and
the appointment of any subcustodian banks and clearing agencies. A
custodian takes no part in determining the investment policies of a
fund or in deciding which securities are purchased or sold by a fund.
However, a fund may invest in obligations of its custodian and may
purchase securities from or sell securities to the custodian. The Bank
of New York, headquartered in New York, also may serve as a special
purpose custodian of certain assets in connection with repurchase
agreement transactions.
FMR, its officers and directors, its affiliated companies, and the
Board of Trustees may, from time to time, conduct transactions with
various banks, including banks serving as custodians for certain funds
advised by FMR. The Boston branch of Small Cap Stock's and Large Cap
Stock'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 L.L.P., One Post Office Square, Boston,
Massachusetts serves as each trust's independent accountant. The
auditor examines financial statements for the funds and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for
the fiscal year ended April 30, 1998, and reports of the auditor, are
included in each fund's Annual Report, which are separate reports
supplied with this SAI. The funds' financial statements,
including the financial highlights, and reports of the auditor are
incorporated herein by reference. For a free additional copy of a
fund's Annual Report, contact Fidelity at 1-800-544-8888.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF CORPORATE BONDS
Moody's ratings for obligations with an original remaining maturity in
excess of one year fall within nine categories. They range from Aaa
(highest quality) to C (lowest quality). Moody applies numerical
modifiers of 1, 2, or 3 to each generic rating classification from Aa
through B. The modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks
on the lower end of its generic rating category.
AAA - Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than the Aaa securities.
A - Bonds that are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future.
BAA - Bonds that are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
BA - Bonds that are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B - Bonds that are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
CAA - Bonds that are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect
to principal or interest.
CA - Bonds that are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked short-comings.
C - Bonds that are rated C are the lowest-rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF CORPORATE BONDS
Debt issues may be designated by Standard & Poor's as either
investment grade ("AAA" through "BBB") or speculative grade ("BB"
through "D"). While speculative grade debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major exposures to adverse conditions. Ratings from
AA to CCC may be modified by the addition of a plus sign (+) or minus
sign (-) to show relative standing within the major rating categories.
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher-rated issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher-rated categories.
BB - Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments. The BB rating category is also used
for debt subordinated to senior debt that is assigned an actual or
implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal. The B
rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial, and
economic conditions to meet timely payment of interest and repayment
of principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or
B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC- debt rating. The C
rating may be used to cover a situation where a bankruptcy petition
has been filed but debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest
is being paid.
D - Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
D rating will also be used upon the filing of a bankruptcy petition if
debt service payments are jeopardized.
Fidelity and Fidelity Focus are registered trademarks of FMR
Corp.
The third party marks appearing above are the marks of their
respective owners.
SPARTAN MARKET INDEX FUND
CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C>
1............................................... Cover Page

2 a............................................ Expenses

b,c.......................................... Contents; The Fund at a Glance; Who May Want To Invest

3 a........................................... Financial Highlights

b............................................ *

c,d........................................... Performance

4 a(i)......................................... Charter

a(ii)....................................... The Fund at a Glance; Investment Principles and Risks

b............................................ Investment Principles and Risks

c............................................. Who May Want to Invest; Investment Principles and Risks

5 a............................................ Charter

b(i)........................................ Cover Page; The Fund at a Glance; Charter; Doing Business
with Fidelity

b(ii)....................................... Charter

b(iii)...................................... Expenses; Breakdown of Expenses

c........................................ *

d............................................ Charter; Breakdown of Expenses

e............................................ Cover Page; Charter

f............................................. Expenses

g(i)............................................ Charter

g(ii)......................................... *

5 A............................................ Performance

6 a(i)........................................ Charter

a(ii)....................................... How to Buy Shares; How to Sell Shares; Transaction
Details; Exchange Restrictions

a(iii)..................................... Charter

b............................................ *

c........................................... Transaction Details; Exchange Restrictions

d........................................... *

e........................................... Doing Business with Fidelity; How to Buy Shares; How to
Sell Shares; Investor Services

f,g......................................... Dividends, Capital Gains, and Taxes

h......................................... *

7 a........................................... Cover Page; Charter

b........................................... Expenses; How to Buy Shares; Transaction Details

c........................................... *

d........................................... How to Buy Shares

e........................................... *

f............................................ Breakdown of Expenses

8 .............................................. How to Sell Shares; Investor Services; Transaction Details;
Exchange Restrictions

9 .............................................. *

* Not Applicable

</TABLE>

SPARTAN MARKET INDEX FUND
CROSS REFERENCE SHEET
(CONTINUED)

<TABLE>
<CAPTION>
<S> <C>
Part B: Statement of Additional Information

Form N-1A Item Number SAI Caption

10,11......................................... Cover Page

12.............................................. Description of the Trust

13 a,b,c.................................... Investment Policies and Limitations

d........................................... *

14 a,b, c........................................ Trustees and Officers

15 a,b..................................... *

c.............................................. Trustees and Officers

16 a(i)....................................... FMR; Portfolio Transactions

a(ii)....................................... Trustees and Officers

a(iii),b................................... Management Contract

c,d...................................... Contracts with FMR Affiliates

e........................................... *

f............................................ Distribution and Service Plan

g........................................... *

h........................................... Description of the Trust

i............................................ Contracts with FMR Affiliates

17 a,b,c....................................... Portfolio Transactions

d,e..................................... *

18 a........................................ Description of the Trust

b........................................... *

19 a....................................... Additional Purchase and Redemption Information

b........................................... Valuation; Additional Purchase and Redemption Information

c........................................... *

20.............................................. Distributions and Taxes

21 a,b................................. Contracts with FMR Affiliates

c................................ *

22 a.............................................. *

b ............................................. Performance

23.............................................. Financial Statements

</TABLE>

SPARTAN(REGISTERED TRADEMARK)
MARKET
INDEX
FUND
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the
fund invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a
copy of the fund's most recent financial report and portfolio listing,
or a copy of the Statement of Additional Information (SAI)
dated June 19, 1998. The SAI has been filed with the Securities
and Exchange Commission (SEC) and is available along with other
related materials on the SEC's Internet Web site (http://www.sec.gov).
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). For a free copy of either document, call Fidelity at
1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.

LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
SMI-pro-069 8

704821
(fund number 317, trading symbol FSMKX)
Spartan Market Index seeks a total return which corresponds to that of
the Standard & Poor's 500 Index.
PROSPECTUS
JUNE 19, 1998(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109

CONTENTS

KEY FACTS 2 THE FUND AT A GLANCE

2 WHO MAY WANT TO INVEST

4 EXPENSES The fund's yearly operating
expenses.

5 FINANCIAL HIGHLIGHTS A summary of the
fund's financial data.

6 PERFORMANCE How the fund has done
over time.

THE FUND IN DETAIL 9 CHARTER How the fund is organized.

10 INVESTMENT PRINCIPLES AND RISKS The
fund's overall approach to investing.

11 BREAKDOWN OF EXPENSES How
operating costs are calculated and what
they include.

YOUR ACCOUNT 11 DOING BUSINESS WITH FIDELITY

12 TYPES OF ACCOUNTS Different ways to
set up your account, including
tax-advantaged retirement plans.

13 HOW TO BUY SHARES Opening an
account and making additional
investments.

16 HOW TO SELL SHARES Taking money out
and closing your account.

18 INVESTOR SERVICES Services to help you
manage your account.

SHAREHOLDER AND 19 DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

19 TRANSACTION DETAILS Share price
calculations and the timing of purchases
and redemptions.

20 EXCHANGE RESTRICTIONS

20 APPENDIX

KEY FACTS

THE FUND AT A GLANCE
GOAL: Total return that corresponds to that of the Standard & Poor's
500 Index (S&P 500(registered trademark)). As with any mutual fund,
there is no assurance that the fund will achieve its goal.
STRATEGY: Invests in equity securities of companies that compose the
S&P 500 and in other instruments that are based on the value of the
index.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946
and is now America's largest mutual fund manager. Bankers Trust
Company (BT) is a wholly-owned subsidiary of Bankers Trust
Corporation (formerly Bankers Trust New York Corporation) , the
seventh largest bank holding company in the United States. BT
currently serves as sub-adviser to the fund and manages the fund's
portfolio.
SIZE: As of April 30, 1998, the fun d had over $ 5.4
billion in assets.
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who are willing to ride out
stock market fluctuations in pursuit of potentially high long-term
returns. The fund is designed for those who want to keep expenses low
while pursuing growth of capital and income through a portfolio of
securities that includes common stocks of companies representing a
significant portion of the market value of all common stocks publicly
traded in the United States, as measured by the S&P 500.
Because the fund seeks to track, rather than beat, the performance of
the S&P 500, the fund is not managed in the same way as other mutual
funds. BT generally does not judge the merits of any particular stock
as an investment. Therefore, you should not expect to achieve the
potentially greater results that could be obtained by a fund that
aggressively seeks growth.
The value of the fund's investments will vary from day to day, and
generally reflect market conditions, interest rates, and other
company, political, or economic news. In the short-term, stock prices
can fluctuate dramatically in response to these factors. Over time,
however, stocks have shown greater growth potential than other types
of securities. When you sell your shares, they may be worth
more or less than what you paid for them. By itself, the fund does not
constitute a balanced investment plan.

THE SPECTRUM OF
FIDELITY FUNDS
BROAD CATEGORIES OF FIDELITY
FUNDS ARE PRESENTED HERE IN
ORDER OF ASCENDING RISK.
GENERALLY, INVESTORS SEEKING TO
MAXIMIZE RETURN MUST ASSUME
GREATER RISK. SPARTAN MARKET
INDEX IS IN THE GROWTH
CATEGORY.
(SOLID BULLET) MONEY MARKET SEEKS
INCOME AND STABILITY BY
INVESTING IN HIGH-QUALITY,
SHORT-TERM INVESTMENTS.
(SOLID BULLET) INCOME SEEKS INCOME BY
INVESTING IN BONDS.
(SOLID BULLET) GROWTH AND INCOME SEEKS
LONG-TERM GROWTH AND INCOME
BY INVESTING IN STOCKS AND
BONDS.
(RIGHT ARROW) GROWTH SEEKS LONG-TERM
GROWTH BY INVESTING MAINLY IN
STOCKS.
(CHECKMARK)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell shares of the fund. In addition, you may be charged an annual
index account fee if your account balance falls below $10,000. See
"Transaction Details," page , for an explanation of how and when these
charges apply.
Sales charge on purchases None
and reinvested distributions

Deferred sales charge on redemptions None

Redemption fee (Short-term trading fee) 0.50%
on shares held less than 90 days
(as a % of amount redeemed)

Annual index account fee $10.00
(for accounts under $10,000)

ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The
fund pays a management fee to FMR and BT. It also incurs other
expenses for services such as maintaining shareholder records and
furnishing shareholder statements and financial reports. A
fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of
Expenses" page ).
The following figures are based on historical expenses of the fund and
are calculated as a percentage of average net assets of the fund.
T he fund has entered into arrangements with its custodian and
transfer agent whereby credits realized as a result of uninvested cash
balances are used to reduce custodian and transfer agent expenses.
Management fee (after reimbursement) 0.19 %

12b-1 fee None

Other expenses (after reimbursement) 0.00 %

Total fund operating expenses 0.19 %
(after reimbursement)

3 years $ 6

5 years $ 11

10 years $ 24

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expenses or returns, all of which may vary.
FMR has voluntarily agreed to reimburse the fund to the extent that
total operating expenses (with the exceptions noted below) exceed
0.19% of its average net assets. If this agreement were not in
effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets of the fund, would
have been 0.35 %, 0.10 % , and 0.45 %,
respectively. Expenses eligible for reimbursement do not include
interest, taxes, brokerage commissions , or extraordinary
expenses. In addition, sub-advisory fees paid by the fund associated
with securities lending are not eligible for reimbursement. The
reimbursement agreement for the fund will continue through December
31, 1999.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows has been audited by
Coopers & Lybrand L.L.P. , independent accountants. The fund's
financial highlights, financial statements, and report of the auditor
are included in the fund's Annual Report, and are incorporated by
reference into (are legally a part of) the fund's SAI. Contact
Fidelity for a free copy of the Annual Report or the SAI.
SELECTED PER-SHARE DATA

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Years ended April 30 1998 1997 1996 1995 1994 1993 1992 1991 1990D

Net asset value, $ 57.82 $ 48.22 $ 38.32 $ 33.49 $ 32.84 $ 30.94 $ 28.06 $ 24.58 $ 25.00
beginning of period

Income from Investment
Operations

Net investment income 1.11E .95E .92 .85 .81 .81 .82 .76 .13

Net realized and unrealized 21.92 10.58 10.32 4.77 .81 1.89 2.94 3.49 (.57)
gain (loss)

Total from investment operations 23.03 11.53 11.24 5.62 1.62 2.70 3.76 4.25 (.44)

Less Distributions

From net investment income (.75) (.90) (.99) (.80) (.80) (.81) (.83) (.85) --

From net realized gain (1.38) (1.05) (.37) -- (.17) -- (.07) -- --

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

Total distributions (2.13) (1.95) (1.36) (.80) (.98) (.81) (.90) (.85) --

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

Net asset value, end of period $ 78.74 $ 57.82 $ 48.22 $ 38.32 $ 33.49 $ 32.84 $ 30.94 $ 28.06 $ 24.58

Total returnB,C 40.74% 24.58% 29.83% 17.08% 4.95% 8.85% 13.74% 18.04% (1.68)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 5,437 $ 2,300 $ 1,011 $ 391 $ 283 $ 305 $ 230 $ 112 $ 15
(In millions)

Ratio of expenses to average .19%F .44%F .45% .45% .45% .44%F .35%F .28%F .28%A,F
net assets

Ratio of net investment income to 1.61% 1.82% 2.11% 2.49% 2.38% 2.54% 2.84% 3.52% 3.41%A
average net assets

Portfolio turnover rate 6% 6% 5% 2% 3% 0% 1% 1% 0%

Average commissions rateG $ .0244 .0271

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FOR THE PERIOD MARCH 6, 1990 (COMMENCEMENT OF SALE OF SHARES) TO
APRIL 30, 1990.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUNDS EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND
IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The
total returns that follow are based on historical fund results and do
not reflect the effect of taxes.
The fund's fiscal year runs from May 1 through April 30. The tables
below show the fund's performance over past fiscal years compared to
different measures, including a comparative index and a competitive
funds average. The chart on page presents calendar year performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Life of
April 30, 1998 year years fundA

Spartan Market Index 40.74% 22.84% 18.60%

S&P 500 41.07% 23.25% 18.87%

S&P 500 Index Objective
Funds Average 40.22% 22.72% n/a

CUMULATIVE TOTAL RETURNS

Fiscal periods ended Past 1 Past 5 Life of
April 30, 1998 year years fundA

Spartan Market Index 40.74% 179.71% 301.91%

S&P 500 41.07% 184.36% 309.42%

S&P 500 Index Objective
Funds Average 40.22% 178.33% n/a

A FROM MARCH 6, 1990 (COMMENCEMENT OF OPERATIONS)
If FMR had not reimbursed certain fund expenses during these periods,
total returns would have been lower.
EXAMPLE: Let's say, hypothetically, that you put $10,000 in the fund
on March 6, 1990. From that date through April 30, 1998, the fund's
total return was 301.9 1 %. Your $10,000 would have grown to
$ 40,191 (the initial investment plus 301.91 % of
$10,000).
UNDERSTANDING
PERFORMANCE
BECAUSE THIS FUND INVESTS IN
STOCKS, ITS PERFORMANCE IS
RELATED TO THAT OF THE OVERALL
STOCK MARKET. HISTORICALLY, STOCK
MARKET PERFORMANCE HAS BEEN
CHARACTERIZED BY VOLATILITY IN
THE SHORT RUN AND GROWTH IN THE
LONG RUN. YOU CAN SEE THESE
TWO CHARACTERISTICS REFLECTED IN
THE FUND'S PERFORMANCE; THE
YEAR-BY-YEAR TOTAL RETURNS ON
PAGE 9 SHOW THAT SHORT-TERM
RETURNS CAN VARY WIDELY, WHILE
THE RETURNS IN THE MOUNTAIN
CHART SHOW LONG-TERM GROWTH.
(CHECKMARK)
$10,000 OVER LIFE OF FUND
EXPLANA
FISCAL YEARS 1990 1993 1998
ROW: 1, COL: 1, VALUE: 10000.0
ROW: 2, COL: 1, VALUE: 10080.0
ROW: 3, COL: 1, VALUE: 9832.0
ROW: 4, COL: 1, VALUE: 10828.0
ROW: 5, COL: 1, VALUE: 10759.05
ROW: 6, COL: 1, VALUE: 10726.82
ROW: 7, COL: 1, VALUE: 9755.68
ROW: 8, COL: 1, VALUE: 9278.83
ROW: 9, COL: 1, VALUE: 9246.32
ROW: 10, COL: 1, VALUE: 9843.77
ROW: 11, COL: 1, VALUE: 10104.76
ROW: 12, COL: 1, VALUE: 10552.31
ROW: 13, COL: 1, VALUE: 11307.81
ROW: 14, COL: 1, VALUE: 11576.4
ROW: 15, COL: 1, VALUE: 11605.36
ROW: 16, COL: 1, VALUE: 12101.66
ROW: 17, COL: 1, VALUE: 11541.33
ROW: 18, COL: 1, VALUE: 12083.37
ROW: 19, COL: 1, VALUE: 12362.73
ROW: 20, COL: 1, VALUE: 12158.48
ROW: 21, COL: 1, VALUE: 12318.02
ROW: 22, COL: 1, VALUE: 11818.41
ROW: 23, COL: 1, VALUE: 13169.28
ROW: 24, COL: 1, VALUE: 12923.44
ROW: 25, COL: 1, VALUE: 13084.5
ROW: 26, COL: 1, VALUE: 12824.48
ROW: 27, COL: 1, VALUE: 13199.92
ROW: 28, COL: 1, VALUE: 13259.64
ROW: 29, COL: 1, VALUE: 13062.4
ROW: 30, COL: 1, VALUE: 13590.56
ROW: 31, COL: 1, VALUE: 13311.45
ROW: 32, COL: 1, VALUE: 13465.08
ROW: 33, COL: 1, VALUE: 13503.97
ROW: 34, COL: 1, VALUE: 13957.71
ROW: 35, COL: 1, VALUE: 14131.46
ROW: 36, COL: 1, VALUE: 14240.2
ROW: 37, COL: 1, VALUE: 14431.57
ROW: 38, COL: 1, VALUE: 14731.95
ROW: 39, COL: 1, VALUE: 14368.79
ROW: 40, COL: 1, VALUE: 14749.45
ROW: 41, COL: 1, VALUE: 14784.85
ROW: 42, COL: 1, VALUE: 14718.47
ROW: 43, COL: 1, VALUE: 15267.21
ROW: 44, COL: 1, VALUE: 15147.31
ROW: 45, COL: 1, VALUE: 15458.89
ROW: 46, COL: 1, VALUE: 15307.55
ROW: 47, COL: 1, VALUE: 15490.51
ROW: 48, COL: 1, VALUE: 16009.85
ROW: 49, COL: 1, VALUE: 15571.1
ROW: 50, COL: 1, VALUE: 14886.68
ROW: 51, COL: 1, VALUE: 15080.31
ROW: 52, COL: 1, VALUE: 15323.46
ROW: 53, COL: 1, VALUE: 14942.26
ROW: 54, COL: 1, VALUE: 15431.43
ROW: 55, COL: 1, VALUE: 16056.48
ROW: 56, COL: 1, VALUE: 15661.49
ROW: 57, COL: 1, VALUE: 16007.7
ROW: 58, COL: 1, VALUE: 15420.05
ROW: 59, COL: 1, VALUE: 15649.2
ROW: 60, COL: 1, VALUE: 16052.46
ROW: 61, COL: 1, VALUE: 16671.1
ROW: 62, COL: 1, VALUE: 17154.37
ROW: 63, COL: 1, VALUE: 17656.61
ROW: 64, COL: 1, VALUE: 18352.37
ROW: 65, COL: 1, VALUE: 18766.45
ROW: 66, COL: 1, VALUE: 19389.52
ROW: 67, COL: 1, VALUE: 19436.02
ROW: 68, COL: 1, VALUE: 20247.4
ROW: 69, COL: 1, VALUE: 20172.6
ROW: 70, COL: 1, VALUE: 21046.82
ROW: 71, COL: 1, VALUE: 21439.08
ROW: 72, COL: 1, VALUE: 22172.32
ROW: 73, COL: 1, VALUE: 22371.0
ROW: 74, COL: 1, VALUE: 22600.27
ROW: 75, COL: 1, VALUE: 22923.54
ROW: 76, COL: 1, VALUE: 23503.52
ROW: 77, COL: 1, VALUE: 23597.08
ROW: 78, COL: 1, VALUE: 22548.32
ROW: 79, COL: 1, VALUE: 23009.58
ROW: 80, COL: 1, VALUE: 24292.52
ROW: 81, COL: 1, VALUE: 24960.81
ROW: 82, COL: 1, VALUE: 26833.97
ROW: 83, COL: 1, VALUE: 26283.26
ROW: 84, COL: 1, VALUE: 27916.74
ROW: 85, COL: 1, VALUE: 28123.38
ROW: 86, COL: 1, VALUE: 26952.39
ROW: 87, COL: 1, VALUE: 28557.59
ROW: 88, COL: 1, VALUE: 30296.13
ROW: 89, COL: 1, VALUE: 31634.23
ROW: 90, COL: 1, VALUE: 34158.71999999999
ROW: 91, COL: 1, VALUE: 32248.97
ROW: 92, COL: 1, VALUE: 34002.51
ROW: 93, COL: 1, VALUE: 32878.84
ROW: 94, COL: 1, VALUE: 34375.39
ROW: 95, COL: 1, VALUE: 34964.1
ROW: 96, COL: 1, VALUE: 35357.13
ROW: 97, COL: 1, VALUE: 37873.52
ROW: 98, COL: 1, VALUE: 39792.71999999999
ROW: 99, COL: 1, VALUE: 40190.85000000001
$
$40,191
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
S&P 500 is a widely recognized, unmanaged index of common stocks.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1991 1992 1993 1994 1995 1996 1997
SPARTAN
MARKET
INDEX 30.33% 7.31% 9.62% 1.02% 37.00% 22.60% 33.03%
S&P 500 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
S&P 500
Index
Objective Funds
Average 29.64% 7.12% 9.53% 0.91% 36.84% 22.30% 32.60%
Consumer
Price Index 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 30.33
Row: 5, Col: 1, Value: 7.31
Row: 6, Col: 1, Value: 9.619999999999999
Row: 7, Col: 1, Value: 1.02
Row: 8, Col: 1, Value: 37.0
Row: 9, Col: 1, Value: 22.6
Row: 10, Col: 1, Value: 33.03
(LARGE SOLID BOX) Spartan
Market Index
Unlike the fund's returns, the total returns of the comparative index
do not include the effect of any brokerage commissions, transaction
fees, or other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper S&P 500 Index Objective
Funds Average. As of April 30, 1998, the average reflected the
performance of 73 mutual funds with similar investment
objectives. This average, published by Lipper Analytical Services,
Inc., excludes the effect of sales loads.
Other illustrations of fund performance may show moving averages over
specified periods.
The fund's recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
For current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF
FUTURE PERFORMANCE.
THE FUND IN DETAIL

CHARTER
SPARTAN MARKET INDEX IS A MUTUAL FUND: an investment
that pools shareholders' money and invests it toward a specified goal.
The fund is a diversified fund of Fidelity Commonwealth Trust, an
open-end management investment company organized as a Massachusetts
business trust on November 8, 1974.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
fund's activities, review contractual arrangements with companies that
provide services to the fund, and review the fund's performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity or BT.
THE FUND MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. Fidelity will mail proxy materials in
advance, including a voting card and information about the proposals
to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
FMR AND ITS AFFILIATES
The fund is managed by FMR, which handles its business affairs. BT,
the fund's sub-adviser, chooses the fund's investments. FMR supervises
the sub-adviser and, in conjunction with the Board of Trustees,
reviews the performance of its duties.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
Fidelity Service Company, Inc. (FSC) performs transfer agent
servicing functions for the fund.
FMR Corp. is the ultimate parent company of FMR. Members of the Edward
C. Johnson 3d family are the predominant owners of a class of shares
of common stock representing approximately 49% of the voting power of
FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form
a controlling group with respect to FMR Corp.
BT AND ITS AFFILIATES
BT is the sub-adviser of the fund, and acts as the fund's custodian.
BT, a New York banking corporation with principal offices at 130
Liberty Street, New York, New York 10006, is a wholly-owned subsidiary
of Bankers Trust Corporation (formerly Bankers Trust New York
Corportation).
BT, subject to the supervision and direction of the Board of Trustees
and FMR, makes investment decisions for the fund, places orders to
buy, sell and lend the fund's investments and manages the fund in
accordance with its investment objectives and policies. BT may utilize
the expertise of any of its worldwide subsidiaries and affiliates to
assist in its role as sub-adviser. BT places orders for portfolio
transactions with broker-dealers and other firms of its choosing,
which may include affiliates of BT or FMR.
BT investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
BT may use FMR and BT broker-dealer affiliates and other firms that
sell fund shares to carry out a fund's transactions, provided that the
fund receives brokerage services and commission rates comparable to
those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
SPARTAN MARKET INDEX seeks to provide investment results that
correspond to the total return of a broad range of common stocks
publicly traded in the United States.
To achieve this objective, the fund attempts to duplicate the
composition and total return of the S&P 500. The S&P 500 is made up of
500 common stocks, most of which trade on the New York Stock Exchange
(NYSE). Standard & Poor's (S&P) is neither an affiliate nor a sponsor
of the fund, and inclusion of a stock in the index does not imply that
it is a good investment. The S&P 500 is a widely recognized, unmanaged
index of common stock prices. It is generally acknowledged that the
S&P 500 broadly represents the performance of publicly traded common
stocks in the United States. Total returns for the S&P 500 assume
reinvestment of dividends but do not include the effect of brokerage
commissions or other fees. At some time in the future FMR may, subject
to shareholders' approval and 30 days' notice, select another index if
such a standard of comparison is deemed to be more representative of
the performance of U.S. common stocks.
BT normally seeks to invest at least 80% of the fund's assets in
equity securities of companies that compose the S&P 500.
The fund may not always hold all of the same securities as the S&P
500. BT may choose, if extraordinary circumstances warrant, to exclude
an index stock from the fund and substitute a similar stock if doing
so will help the fund achieve its objective.
The fund may not track the S&P 500 perfectly. Differences between the
S&P 500 and the fund's portfolio may cause differences in performance.
Even if the fund's investments match the S&P 500 exactly, its returns
could differ on a day-to-day basis because of differences in how the
fund and the S&P 500 are valued. The fund normally values all of its
investments at 4:00 p.m. Eastern time. The S&P 500 is valued by its
sponsor, who may use different closing prices than the fund does. In
addition, the fund's ability to replicate the S&P 500's returns will
depend to some extent on transaction costs and the size and frequency
of cash flows into and out of the fund.
The fund seeks to achieve a 98% or better correlation between its
total return and the total return of the S&P 500. FMR monitors
correlation between the performance of the fund and that of the S&P
500 on a monthly basis. Correlation is measured by comparing the
fund's monthly total returns to those of the S&P 500 over the most
recent 36-month period. In the unlikely event that the fund cannot
achieve a correlation of 98% or better, the trustees will consider
alternative arrangements.
The value of the fund's investments varies in response to many
factors. Stock values fluctuate in response to the activities of
individual companies and general market and economic conditions.
BT may use various investment techniques to hedge a portion of the
fund's risks, but there is no guarantee that these strategies will
work as BT intends. As a mutual fund, the fund seeks to spread
investment risk by diversifying its holdings among many companies and
industries. When you sell your shares of the fund, they may be worth
more or less than what you paid for them.
The fund may purchase short-term debt securities for cash management
purposes and may use various techniques, such as stock index futures,
to adjust its exposure to the S&P 500.
BT normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without
limitation in preferred stocks and investment-grade debt instruments
for temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies BT may employ in
pursuit of the fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of the fund's limitations and more
detailed information about the fund's investments are contained in the
fund's SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
BT may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with the fund's investment
objective and policies and that doing so will help the fund achieve
its goal. Fund holdings and recent investment strategies are detailed
in the fund's financial reports, which are sent to shareholders twice
a year. For a free SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks, preferred stocks,
convertible securities, and warrants. Common stocks, the most familiar
type, represent an equity (ownership) interest in a corporation.
Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's
financial condition and on overall market and economic conditions.
Smaller companies are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of its total assets, the fund may
not invest in more than 10% of the outstanding voting
securities of a single issuer. This limitation does not apply to
securities of other investment companies.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve additional risks and considerations. These
include risks relating to political, economic, or regulatory
conditions in foreign countries; fluctuations in foreign currencies;
withholding or other taxes; trading, settlement, custodial, and other
operational risks; and the potentially less stringent investor
protection and disclosure standards of foreign markets. All of these
factors can make foreign investments, especially those in emerging
markets, more volatile and potentially less liquid than U.S.
investments.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices or other
factors that affect security values. These techniques may involve
derivative transactions such as buying and selling options and futures
contracts, entering into swap agreements, and purchasing indexed
securities.
BT can use these practices in its efforts to track the returns of the
S&P 500. If BT judges market conditions incorrectly or employs a
strategy that does not correlate well with the fund's investments,
these techniques could result in a loss, regardless of whether the
intent was to reduce risk or increase return. These techniques may
increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition,
these techniques could result in a loss if the counterparty to the
transaction does not perform as promised.
ILLIQUID SECURITIES. Some investments may be determined by BT, under
the supervision of the Board of Trustees and FMR, to be illiquid,
which means that they may be difficult to sell promptly at an
acceptable price. Difficulty in selling securities may result in a
loss or may be costly to the fund.
RESTRICTIONS: The fund may not invest more than 10% of its assets in
illiquid securities.
OTHER INSTRUMENTS may include securities of other investment
companies.
CASH MANAGEMENT. The fund may invest in money market securities, in
repurchase agreements, and in money market funds, including those
available only to funds and accounts managed by FMR or its
affiliates, whose goal is to seek a high level of current income while
maintaining a stable $1.00 share price. A major change in
interest rates or a default on a money market fund's investments could
cause its share price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one
industry. Economic, business, or political changes can affect all
securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, the fund
may not invest more than 5% in the securities of any one issuer. This
limitation does not apply to U.S. Government securities or to
securities of other investment companies.
The fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
BORROWING. The fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
the fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If the fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a
means of earning income. BT receives a portion of securities lending
income as a sub-advisory fee. Securities lending could result in a
loss or a delay in recovering the fund's securities. The fund may also
lend money to other funds advised by FMR or its affiliates.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of the
fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
The fund seeks investment results that correspond to the total return
(i.e., the combination of capital changes and income) of common stocks
publicly traded in the United States, as represented by the S&P 500,
while keeping transaction costs and other expenses low.
With respect to 75% of total assets, the fund may not invest
more than 5% in the securities of any one issuer and may not invest
in more than 10% of the outstanding voting securities of a single
issuer. These limitations do not apply to U.S. Government securities
or to securities of other investment companies.
The fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
The fund may borrow only for temporary or emergency purposes, but not
in an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of the fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily
operations. Expenses paid out of the fund's assets are reflected in
its share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs.
FMR and the fund pay sub-advisory fees to BT for managing the fund's
investments, administering its securities lending program, and for
custodial services. The fund also pays OTHER EXPENSES, which are
explained below .
FMR may, from time to time, agree to reimburse the fund for management
fees and other expenses above a specified limit. FMR retains the
ability to be repaid by the fund if expenses fall below the specified
limit prior to the end of the fiscal year. Reimbursement arrangements
can decrease the fund's expenses and boost its performance.
MANAGEMENT AND
SUB-ADVISORY FEES
Management and sub-advisory fees are calculated and paid every month
to FMR and BT, respectively. The fund pays the fees at the annual rate
of 0 .24% of its average net assets. These fees include a
management fee of 0.24 % payable to FMR, and an estimated
sub-advisory fee of less than 0.01 % payable to BT (representing
40% of net income from securities lending).
For the fiscal year ended April 30, 1998, the fund paid a
management fee of 0.19%, after reimbursement.
BT IS THE FUND'S SUB-ADVISER under an agreement with FMR and the
fund. BT is paid a sub-advisory fee for providing investment
management, securities lending and custodial services to the fund.
For investment management, securities lending and custodial services
to the fund, FMR pays BT fees at an annual rate of 0.006% of the
average net assets of the fund. In addition, the fund pays BT fees
equal to 40% of net income from the fund's securities lending program.
The remaining 60% of net income from the fund's securities lending
program goes to the fund.
OTHER EXPENSES
While the management and sub-advisory fees are significant components
of the fund's annual operating costs, the fund has other expenses as
well.
For the fiscal year ended April 1998, the fund paid transfer agency
and pricing and bookkeeping fees equal to 0. 08 % of its average
net assets. This amount is before expense reductions, if any.
The fund contracts with FSC to perform transfer agency, dividend
disbursing, shareholder servicing, and accounting functions. These
services include processing shareholder transactions, valuing the
fund's investments, and calculating the fund's share price and
dividends.
The fund also pays other expenses, such as legal and audit fees; in
some instances, proxy solicitation costs; and the compensation of
trustees who are not affiliated with Fidelity.
To offset shareholder service costs, FSC also collects the fund's
annual index account fee of $10.00 per account on accounts under
$10,000.
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. This plan
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with the distribution of fund
shares. FMR directly, or through FDC, may make payments to third
parties, such as banks or broker-dealers, that engage in the sale of,
or provide shareholder support services for, the fund's shares.
Currently, the Board of Trustees has authorized such payments.
The fund's portfolio turnover rate for the fiscal year ended April
1998 was 6 %. This rate varies from year to year.
YOUR ACCOUNT

DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of
America's first mutual funds. Today, Fidelity is the largest mutual
fund company in the country, and is known as an innovative provider of
high-quality financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a
leader in providing tax-advantaged retirement plans for individuals
investing on their own or through their employer.
Fidelity is committed to providing investors with practical
information to make investment decisions. Based in Boston, Fidelity
provides customers with complete service 24 hours a day, 365 days a
year, through a network of telephone service centers around the
country and Fidelity's Web site .
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity
has over 80 walk-in Investor Centers across the country. If
you would prefer to access information on-line, you can visit
Fidelity's Web site at www.fidelity.com.
TYPES OF ACCOUNTS
You may set up an account directly in the fund or, if you own or
intend to purchase individual securities as part of your total
investment portfolio, you may consider investing in the fund through a
brokerage account.
You may purchase or sell shares of the fund through an investment
professional, including a broker, who may charge you a transaction fee
for this service. If you invest through FBSI, another financial
institution, or an investment professional, read their program
materials for any special provisions, additional service features or
fees that may apply to your investment in the fund. Certain features
of the fund, such as the minimum initial or subsequent investment
amounts, may be modified.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 225
(solid bullet) Assets in Fidelity mutual
funds: over $ 595 billion
(solid bullet) Number of shareholder
accounts: over 37 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 250
(checkmark)
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the fund through a retirement program, you may be
subject to additional fees. For more information, please refer to your
program materials, contact your employer, call your retirement
benefits number, visit Fidelity's Web site at www.fidelity.com ,
or contact Fidelity directly, as appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
Retirement plans provide individuals with tax-advantaged ways to save
for retirement, either with tax-deductible contributions or tax-free
growth. Retirement accounts require special applications and typically
have lower minimums.
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow
individuals under age 70 with compensation to contribute up to $2,000
per tax year. Married couples can contribute up to $4,000 per tax
year, provided no more than $2,000 is contributed on behalf of either
spouse. (These limits are aggregate for Traditional and Roth IRAs.)
Contributions may be tax-deductible, subject to certain income limits.
(solid bullet) ROTH IRAS allow individuals to make non-deductible
contributions of up to $2,000 per tax year. Married couples can
contribute up to $4,000 per tax year, provided no more than $2,000 is
contributed on behalf of either spouse. (These limits are aggregate
for Traditional and Roth IRAs.) Eligibility is subject to certain
income limits. Qualified distributions are tax-free.
(solid bullet) ROTH CONVERSION IRAS allow individuals with assets held
in a Traditional IRA or Rollover IRA to convert those assets to a Roth
Conversion IRA. Eligibility is subject to certain income limits.
Qualified distributions are tax-free.
(solid bullet) ROLLOVER IRAS help retain special tax advantages for
certain eligible rollover distributions from employer-sponsored
retirement plans.
(solid bullet) 401(K) PLANS , and certain other 401(a)-qualified
plans, are employer-sponsored retirement plans that allow employer
contributions and may allow employee after-tax contributions. In
addition, 401(k) plans allow employee pre-tax (tax-deferred)
contributions. Contributions to these plans may be tax-deductible to
the employer.
(solid bullet) KEO GH P LANS are generally profit sharing or
money purchase pension plans that allow self-employed individuals or
small business owners to make tax-deductible contributions for
themselves and any eligible employees.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employment income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS) allow employees of
businesses with 25 or fewer employees to contribute a percentage of
their wages on a tax-deferred basis. These plans must have been
established by the employer prior to January 1, 1997.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employment income (and their eligible employees) with many
of the advantages of a 401(k) plan, but with fewer administrative
requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of
501(c)(3) tax-exempt institutions, including schools, hospitals, and
other charitable organizations.
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS) are available
to employees of most state and local governments and their agencies
and to employees of tax-exempt institutions.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of the fund is the fund's net asset value
per share (NAV). The fund's shares are sold without a sales charge.
Your shares will be purchased at the next NAV calculated after your
investment is received in proper form. The fund's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
The fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they
would disrupt management of the fund.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application
and mail it along with your check. You may also open your account in
person or by wire as described on page . If there is no application
accompanying this prospectus, call 1-800-544-8888 or visit
Fidelity's Web site at www.fidelity.com for an application.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another
Fidelity fund.
IF YOU ARE INVESTING THROUGH A
TAX-ADVANTAGED RETIREMENT PLAN, such as an IRA, for the first time,
you will need a special application. Retirement investing also
involves its own investment procedures. Call 1-800-544-8888 or
visit Fidelity's Web site at www.fidelity.com for more
information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered
trademark), and then sell those shares by any method other than by
exchange to another Fidelity fund, the payment may be delayed for up
to seven business days to ensure that your previous investment has
cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $10,000
For certain Fidelity retirement accounts(double dagger) $500
TO ADD TO AN ACCOUNT $1,000
For certain Fidelity retirement accounts(double dagger) $250
Through regular investment plans* $500
MINIMUM BALANCE $5,000
For certain Fidelity retirement accounts(double dagger) $500
(double dagger)THESE LOWER MINIMUMS APPLY TO FIDELITY TRADITIONAL IRA,
ROTH IRA, ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH
ACCOUNTS.
*FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PAGE .
There is no minimum account balance or initial or subsequent
investment minimum for investments through Fidelity Portfolio Advisory
Services, a qualified state tuition program, certain Fidelity
retirement accounts funded through salary deduction, or accounts
opened with the proceeds of distributions from such retirement
accounts. Refer to the program materials for details. In addition, the
fund reserves the right to waive or lower investment minimums in other
circ umstances.

<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

PHONE 1-800-544-7777
(PHONE_GRAPHIC) (SMALL SOLID BULLET) EXCHANGE FROM
ANOTHER FIDELITY FUND (SMALL SOLID BULLET) EXCHANGE FROM ANOTHER FIDELITY FUND
ACCOUNT WITH THE SAME REGISTRATION, ACCOUNT WITH THE SAME REGISTRATION,
INCLUDING NAME, ADDRESS, AND TAXPAYER INCLUDING NAME, ADDRESS, AND TAXPAYER ID
ID NUMBER. NUMBER.
(SMALL SOLID BULLET) USE FIDELITY MONEY LINE TO TRANSFER FROM
YOUR BANK ACCOUNT. CALL BEFORE YOUR FIRST
USE TO VERIFY THAT THIS SERVICE IS IN PLACE ON
YOUR ACCOUNT. MAXIMUM MONEY LINE: UP
TO $100,000.

THE INTERNET
WWW.FIDELITY.COM
(COMPUTER GRAPHIC) (SMALL SOLID BULLET) COMPLETE AND
SIGN THE APPLICATION. (SMALL SOLID BULLET) EXCHANGE FROM ANOTHER FIDELITY FUND
MAKE YOUR CHECK PAYABLE TO THE ACCOUNT WITH THE SAME REGISTRATION,
COMPLETE NAME OF THE FUND. MAIL TO
THE INCLUDING NAME, ADDRESS, AND TAXPAYER ID
ADDRESS INDICATED ON THE
APPLICATION. NUMBER.
(SMALL SOLID BULLET) USE FIDELITY MONEY LINE TO TRANSFER
FROM
YOUR BANK ACCOUNT. VISIT FIDELITY'S WEB
SITE BEFORE YOUR FIRST USE TO VERIFY THAT THIS
SERVICE IS IN PLACE ON YOUR ACCOUNT.
MAXIMUM MONEY LINE: UP TO $100,000.

MAIL (MAIL_GRAPHIC) (SMALL SOLID BULLET) COMPLETE AND SIGN
THE APPLICATION. MAKE (SMALL SOLID BULLET) MAKE YOUR CHECK PAYABLE TO THE COMPLETE
YOUR CHECK PAYABLE TO THE COMPLETE NAME OF THE FUND. INDICATE YOUR FUND
NAME OF THE FUND. MAIL TO THE ADDRESS ACCOUNT NUMBER ON YOUR CHECK AND MAIL TO
INDICATED ON THE APPLICATION. THE ADDRESS PRINTED ON YOUR ACCOUNT
STATEMENT.
(SMALL SOLID BULLET) EXCHANGE BY MAIL: CALL 1-800-544-6666 FOR
INSTRUCTIONS.

IN PERSON
(HAND_GRAPHIC) (SMALL SOLID BULLET) BRING YOUR
APPLICATION AND CHECK TO A (SMALL SOLID BULLET) BRING YOUR CHECK TO A FIDELITY INVESTOR
FIDELITY INVESTOR CENTER. CALL CENTER. CALL 1-800-544-9797 FOR THE
1-800-544-9797 FOR THE CENTER CENTER NEAREST YOU.
NEAREST YOU.

WIRE (WIRE_GRAPHIC) (SMALL SOLID BULLET) CALL
1-800-544-7777 TO SET UP YOUR (SMALL SOLID BULLET) NOT AVAILABLE FOR RETIREMENT ACCOUNTS.
ACCOUNT AND TO ARRANGE A WIRE (SMALL SOLID BULLET) WIRE TO:
TRANSACTION. NOT AVAILABLE FOR BANKERS TRUST COMPANY,
RETIREMENT ACCOUNTS. BANK ROUTING #021001033,
(SMALL SOLID BULLET) WIRE WITHIN 24
HOURS TO: BANKERS TRUST ACCOUNT #00163053.
COMPANY,BANK ROUTING #021001033, SPECIFY THE COMPLETE NAME OF THE FUND
ACCOUNT #00163053. SPECIFY THE AND INCLUDE YOUR ACCOUNT NUMBER AND YOUR
COMPLETE NAME OF THE FUND AND INCLUDE NAME.
YOUR NEW ACCOUNT NUMBER AND YOUR
NAME.

AUTOMATICALLY
(AUTOMATIC_GRAPHIC) (SMALL SOLID BULLET) NOT AVAILABLE. (SMALL SOLID BULLET) USE FIDELITY AUTOMATIC ACCOUNT BUILDER.
SIGN UP FOR THIS SERVICE WHEN OPENING YOUR
ACCOUNT, VISIT FIDELITY'S WEB SITE AT
WWW.FIDELITY.COM TO OBTAIN THE FORM TO
ADD THE SERVICE, OR CALL 1-800-544-6666
TO ADD THE SERVICE.

(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING IMPAIRED: 1-800-544-0118

</TABLE>

HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of the fund is the fund's NAV minus the
short-term trading fee, if applicable. If you sell shares of the fund
after holding them less than 90 days, the fund will deduct a
short-term trading fee equal to 0.50% of the value of those shares.
Your shares will be sold at the next NAV calculated after your order
is received in proper form, minus the short-term trading fee, if
applicable. The fund's NAV is normally calculated each business day at
4:00 p.m. Eastern time.
To enhance the fund's ability to track the S&P 500, shareholders are
urged to submit redemption requests before 2:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to other Fidelity funds, which
can be requested by phone, in writing, or through Fidelity's Web
site . Call 1-800-544-6666 for a retirement distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$5,000 worth of shares in the account to keep it open ($500 for
retirement accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to
sign up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner, or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be
redeemed, and
(small solid bullet) Any other applicable requirements listed in the
table that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it
to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602

<TABLE>
<CAPTION>
<S> <C> <C>
ACCOUNT TYPE SPECIAL REQUIREMENTS

IF YOU SELL SHARES OF THE FUND AFTER HOLDING THEM LESS THAN 90 DAYS, THE FUND WILL DEDUCT A
SHORT-TERM TRADING FEE EQUAL TO 0.50% OF THE VALUE OF THOSE SHARES.

PHONE 1-800-544-7777
(PHONE_GRAPHIC) ALL ACCOUNT TYPES EXCEPT (SMALL SOLID BULLET) MAXIMUM CHECK REQUEST: $100,000.
RETIREMENT (SMALL SOLID BULLET) FOR MONEY LINE TRANSFERS TO YOUR BANK ACCOUNT;
MINIMUM: $10; MAXIMUM: UP TO $100,000.
ALL ACCOUNT TYPES (SMALL SOLID BULLET) YOU MAY EXCHANGE TO OTHER FIDELITY FUNDS IF
BOTH ACCOUNTS ARE REGISTERED WITH THE SAME
NAME(S), ADDRESS, AND TAXPAYER ID NUMBER.

MAIL OR IN PERSON
(MAIL_GRAPHIC)
(HAND_GRAPHIC) INDIVIDUAL, JOINT TENANT, (SMALL SOLID BULLET) THE LETTER OF INSTRUCTION MUST BE SIGNED BY ALL
SOLE PROPRIETORSHIP, PERSONS REQUIRED TO SIGN FOR TRANSACTIONS,
UGMA, UTMA EXACTLY AS THEIR NAMES APPEAR ON THE ACCOUNT.
RETIREMENT ACCOUNT (SMALL SOLID BULLET) THE ACCOUNT OWNER SHOULD COMPLETE A
RETIREMENT DISTRIBUTION FORM. CALL
1-800-544-6666 TO REQUEST ONE.
TRUST (SMALL SOLID BULLET) THE TRUSTEE MUST SIGN THE LETTER INDICATING
CAPACITY AS TRUSTEE. IF THE TRUSTEE'S NAME IS NOT
IN THE ACCOUNT REGISTRATION, PROVIDE A COPY OF THE
TRUST DOCUMENT CERTIFIED WITHIN THE LAST 60 DAYS.
BUSINESS OR ORGANIZATION (SMALL SOLID BULLET) AT LEAST ONE PERSON AUTHORIZED BY CORPORATE
RESOLUTION TO ACT ON THE ACCOUNT MUST SIGN THE
LETTER.
(SMALL SOLID BULLET) INCLUDE A CORPORATE RESOLUTION WITH CORPORATE
SEAL OR A SIGNATURE GUARANTEE.
EXECUTOR, ADMINISTRATOR, (SMALL SOLID BULLET) CALL 1-800-544-6666 FOR INSTRUCTIONS.
CONSERVATOR, GUARDIAN

WIRE (WIRE_GRAPHIC) ALL ACCOUNT TYPES EXCEPT (SMALL SOLID BULLET) YOU MUST SIGN UP FOR THE WIRE FEATURE BEFORE
RETIREMENT USING IT. TO VERIFY THAT IT IS IN PLACE, CALL
1-800-544-6666. MINIMUM WIRE: $5,000.
(SMALL SOLID BULLET) YOUR WIRE REDEMPTION REQUEST MUST BE RECEIVED
IN PROPER FORM BY FIDELITY BEFORE 4:00 P.M.
EASTERN TIME FOR MONEY TO BE WIRED ON THE
NEXT BUSINESS DAY.

(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING IMPAIRED: 1-800-544-0118

</TABLE>

INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365
days a year. Whenever you call, you can speak with someone equipped to
provide the information or service you need.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSSM
1-800-544-5555
WEB SITE
www.fidelity.com
AUTOMATED SERVICE
(checkmark)
FIDELITY'S WEB SITE at www.fidelity.com offers product and
servicing information, customer education, planning tools, and the
ability to make certain transactions in your account.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call 1-800-544-6666 if you need copies
of financial reports, prospectuses, or historical account information.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's Web site. To participate in our electronic
delivery program, call 1-800-544-6666 or visit Fidelity's Web site at
www.fidelity.com for more information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone, in writing, or through
Fidelity's Web site .
Note that exchanges out of the fund are limited to four per calendar
year, and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or
revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from
your account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer
money by phone between your bank account and your fund account. Most
transfers are complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money
regularly. Fidelity offers convenient services that let you transfer
money into your fund account, or between fund accounts, automatically.
While regular investment plans do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Certain restrictions apply for
retirement accounts. Call 1-800-544-6666 or visit Fidelity's Web
site at www.fidelity.com for more information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 MONTHLY OR QUARTERLY (SMALL SOLID BULLET) FOR A NEW ACCOUNT, COMPLETE THE APPROPRIATE SECTION ON THE FUND
APPLICATION.
(SMALL SOLID BULLET) FOR EXISTING ACCOUNTS, CALL 1-800-544-6666 OR VISIT FIDELITY'S
WEB SITE AT WWW.FIDELITY.COM FOR AN APPLICATION.
(SMALL SOLID BULLET) TO CHANGE THE AMOUNT OR FREQUENCY OF YOUR INVESTMENT, CALL
1-800-544-6666 AT LEAST THREE BUSINESS DAYS PRIOR TO YOUR NEXT
SCHEDULED INVESTMENT DATE.

DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A
FIDELITY FUNDA

MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 EVERY PAY PERIOD (SMALL SOLID BULLET) CHECK THE APPROPRIATE BOX ON THE FUND APPLICATION, OR CALL
1-800-544-6666 OR VISIT FIDELITY'S WEB SITE AT WWW.FIDELITY.COM
FOR AN AUTHORIZATION FORM.
(SMALL SOLID BULLET) CHANGES REQUIRE A NEW AUTHORIZATION FORM.

FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY
FUND

MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly, bimonthly, (small solid bullet) To establish, call 1-800-544-6666 after both accounts are
quarterly, or annually opened.
(small solid bullet) To change the amount or frequency of your investment, call
1-800-544-6666.

</TABLE>

A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN
APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment income
and capital gains to shareholders each year. Normally, dividends and
capital gains are distributed in June and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on
the application, call 1-800-544-6666 for instructions. The fund offers
three options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each
dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
If you select distribution option 2 or 3 and the U.S. Postal
Service does not deliver your checks, your election may be converted
to the Reinvestment Option. You will not receive interest on amounts
represented by uncashed distribution checks. To change your
distribution option, call Fidelity at 1-800-544-6666.
When the fund deducts a distribution from its NAV, the reinvestment
price is the fund's NAV at the close of business that day. Cash
distribution checks will be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in the
fund will be taxed. If your account is not a tax-advantaged retirement
account, you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income
tax, and may also be subject to state or local taxes. If you live
outside the United States, your distributions could also be taxed by
the country in which you reside. Your distributions are taxable when
they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are
taxable as if they were paid on December 31.
For federal tax purposes, the fund's income and short-term capital
gains are distributed as dividends and taxed as ordinary income;
capital gain distributions are taxed as long-term capital gains. Every
January, Fidelity will send you and the IRS a statement showing the
tax characterization of distributions paid to you in the previous
year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price
you receive when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price. You will also receive a consolidated transaction statement
every January. However, it is up to you or your tax preparer to
determine whether this sale resulted in a capital gain and, if so, the
amount of tax to be paid. Be sure to keep your regular account
statements; the information they contain will be essential in
calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when the fund has realized but
not yet distributed income or capital gains, you will pay the full
price for the shares and then receive a portion of the price back in
the form of a taxable distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the
fund and its investments, and these taxes generally will reduce the
fund's distributions.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
the fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates the fund's NAV as of the close
of business of the NYSE, normally 4:00 p.m. Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the
number of shares outstanding.
The fund's assets are valued primarily on the basis of market
quotations. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
on the basis of amortized cost. This method minimizes the effect of
changes in a security's market 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. In addition, if quotations are not
readily available, or if the values have been materially affected by
events occurring after the closing of a foreign market, assets may be
valued by another method that the Board of Trustees believes
accurately reflects fair value.
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.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to redeem and
exchange by telephone, call Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail or by visiting a Fidelity Investor Center.
THE FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your investment is received in proper
form. Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees the fund or
its transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money
order, U.S. Treasury check, Federal Reserve check, or direct deposit
instead.
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 time when the fund is
priced on the following business day. If payment is not received by
that time, the financial institution could be held liable for
resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper form,
minus the short-term trading fee, if applicable. Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed 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.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day
after your phone call.
(small solid bullet) The fund may hold payment on redemptions until it
is reasonably satisfied that investments made by check or Fidelity
Money Line have been collected, which can take up to seven business
days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
A SHORT-TERM TRADING FEE of 0.50% will be deducted from the redemption
amount if you sell your shares after holding them less than 90 days.
This fee is paid to the fund rather than Fidelity, and is designed to
offset the brokerage commissions, market impact, and other costs
associated with fluctuations in fund asset levels and cash flow caused
by short-term shareholder trading.
The short-term trading fee, if applicable, is charged on exchanges out
of the fund. If you bought shares on different days, the shares you
held longest will be redeemed first for purposes of determining
whether the short-term trading fee applies. The short-term trading fee
does not apply to shares that were acquired through reinvestment of
distributions.
THE FUND CHARGES AN ANNUAL INDEX ACCOUNT FEE of $10.00 per account to
offset shareholder service costs if your account balance falls below
$10,000 at the time of the December distribution. The index account
fee does not apply to assets held in employee benefit plans (including
Fidelity-sponsored 403(b) arrangements but otherwise as defined in the
Employee Retirement Income Security Act of 1974, excluding SIMPLE
IRAs, SEP IRAs and the Fidelity Retirement Plan) having more than 50
eligible employees or a minimum of $1,000,000 in plan assets that have
at least some portion of their assets invested in mutual funds advised
by FMR and which are marketed and distributed directly to plan
sponsors and participants without any assistance or intervention from
any intermediary distribution channel. In addition, this fee does not
apply to assets held in a Fidelity Traditional IRA or Fidelity
Rollover IRA purchased with proceeds of a distribution or transfer
from an employee benefit plan as described above, provided that at the
time of the distribution or transfer the employee benefit plan
satisfies the requirements described above.
FSC deducts $10.00 from each account at the time the December
distribution is credited to each account. If the amount of the
distribution is not sufficient to pay the fee, the index account fee
may be deducted directly from your account balance.
IF YOUR ACCOUNT BALANCE FALLS BELOW $5,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV, minus
the short-term trading fee, if applicable, on the day your account is
closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
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. Qualified recipients are
securities dealers who have sold fund shares or others, including
banks and other financial institutions, under special arrangements in
connection with FDC's sales activities. 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.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the
fund for shares of other Fidelity funds. However, you should note the
following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage-point 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 exchange them into a
fund with a 3% sales charge, you would pay an additional 1% sales
charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, the fund reserves the right to
temporarily or permanently terminate the exchange privilege of any
investor 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 counted
together for purposes of the four exchange limit.
(small solid 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.
(small solid bullet) 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 the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) 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 coincides 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 1.00% and trading fees of up to 3.00% of
the amount exchanged. Check each fund's prospectus for details.
APPENDIX
S&P does not guarantee the accuracy and/or the completeness of the S&P
500 Index or any data included therein and S&P shall have no liability
for any errors, omissions, or interruptions therein. S&P makes no
warranty, express or implied, as to results to be obtained by
licensee, owners of the product, or any other person or entity from
the use of the S&P 500 Index or any data included therein. S&P makes
no express or implied warranties, and expressly disclaims all
warranties of merchantability or fitness for a particular
purpose or use with respect to the S&P 500 Index or any data included
therein. Without limiting any of the foregoing, in no event shall S&P
have any liability for any special, punitive, indirect, or
consequential damages (including lost profits), even if notified of
the possibility of such damages.
The product is not sponsored, endorsed, sold or promoted by Standard &
Poor's ("S&P"). S&P makes no representation or warranty, express or
implied, to the owners of the Product or any member of the public
regarding the advisability of investing in securities generally or in
the product particularly or the ability of the S&P 500 Index to track
general stock market performance. S&P's only relationship to the
licensee is the licensing of certain trademarks and trade names of S&P
and of the S&P 500 Index which is determined, composed, and calculated
by S&P without regard to the licensee or the product. S&P has no
obligation to take the needs of the licensee or the owners of the
product into consideration in determining, composing, or calculating
the S&P 500 Index. S&P is not responsible for and has not participated
in the determination of the timing of, prices at, or quantities of the
product to be issued or in the determination or calculation of the
equation by which the product is to be converted into cash. S&P has no
obligation or liability in connection with the administration,
marketing or trading of the product.
"Standard & Poor's," "S&P," "S&P 500," "Standard & Poor's 500," and
"500" are trademarks of The McGraw-Hill, Companies, Inc. and have been
licensed for use by Fidelity Distributors Corporation.

This prospectus is printed on recycled paper using soy-based inks.
SPARTAN MARKET INDEX FUND
A FUND OF FIDELITY COMMONWEALTH TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 19, 1998
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus
(dated June 19, 1998). Please retain this document for future
reference. The fund's Annual Report is a separate document supplied
with this SAI. To obtain a free additional copy of the Prospectus or
an Annual Report, please call Fidelity at 1-800-544-8888.
TABLE OF CONTENTS PAGE

Investment Policies and Limitations 23

Portfolio Transactions 27

Valuation 28

Performance 28

Additional Purchase, Exchange and Redemption Information 30

Distributions and Taxes 30

FMR 31

BT 31

Trustees and Officers 31

Management Contract 33

Distribution and Service Plan 35

Contracts with FMR Affiliates 35

Contracts with BT Affiliates 35

Description of the Trust 35

Financial Statements 36

Appendix

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER
Bankers Trust Company (BT)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company, Inc. (FSC)
SMI-ptb-0698
475976
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 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI 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, or
securities of other investment companies) 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 deemed to be 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.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
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 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 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.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same investment objective, policies, and limitations
as the fund.
With respect to limitation (iv), 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 was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page .
For purposes of the fund's limitation on concentration in a single
industry, the fund may use the industry categorizations as defined by
BARRA, Inc.
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies BT may employ in
pursuit of the fund's investment objective, and a summary of related
risks. BT may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help the fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks
or other securities that may be converted or exchanged (by the holder
or by the issuer) into shares of the underlying common stock (or cash
or securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion
by the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue. If a convertible
security held by a fund is called for redemption or conversion, the
fund could be required to tender it for redemption, convert it into
the underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss
than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than
comparable non-convertible securities. Because of this higher yield,
convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include 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 is no assurance that
BT will be able to anticipate these potential events or counter their
effects. In addition, the value of securities denominated in foreign
currencies and of dividends and interest paid with respect to such
securities will fluctuate based on the relative strength of the U.S.
dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. In addition, the costs
associated with foreign investments, including withholding taxes,
brokerage commissions and custodial costs, are generally higher than
with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
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 (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market 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. A fund may use currency
forward contracts for any purpose consistent with its investment
objective.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by BT.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a 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. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. 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 direct 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.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
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, a
fund will segregate assets to cover currency forward contracts, if
any, whose purpose is essentially speculative. A 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 currency management strategies will depend on BT's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as BT anticipates. For example, if a
currency's value rose at a time when BT had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If BT hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if BT increases a fund's exposure to a foreign currency and
that currency's value declines, a fund will realize a loss. There is
no assurance that BT's use of currency management strategies will be
advantageous to a fund or that it will hedge at appropriate times.
FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or
administer the day-to-day operations of any company. A 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 BT determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, 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 a fund could be involved in
lawsuits related to such activities. BT will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures
Margin Payments, Limitations on Futures and Options Transactions,
Liquidity of Options and Futures Contracts, OTC Options, Purchasing
Put and Call Options, and Writing Put and Call Options.
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.
COMBINED POSITIONS involve purchasing and writing 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, purchasing a put option and writing a
call option on the same underlying instrument would 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, 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 a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund 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 a
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. A 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 a 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.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter 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 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 a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a 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 a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a 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.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed 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. The fund intends to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the fund can commit assets to initial margin deposits and option
premiums.
BT also intends to follow certain other limitations on the fund's
futures and option activities. The fund will not purchase any option
if, as a result, more than 5% of its total assets would be invested in
option premiums. Under normal conditions, the fund will not enter into
any futures contract or option if, as a result, the sum of (i) the
current value of assets hedged in the case of strategies involving the
sale of securities, and (ii) the current value of the indices or other
instruments underlying the fund's other futures or options positions,
would exceed 35% 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.
The above limitations on the fund's investments in futures contracts
and options, and the fund's policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
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 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 a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a 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 (OTC) 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 purchaser or writer 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.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser 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 purchaser 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 purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser 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, 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. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer 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. The writer may seek
to terminate a position in a put option 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, however, the writer
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. When writing an option on a
futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
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 writer 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.
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
and FMR, BT determines the liquidity of a fund's investments and,
through reports from FMR and/or BT, the Board monitors investments in
illiquid instruments. In determining the liquidity of a fund's
investments, BT 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 BT to be illiquid include
repurchase agreements not entitling the holder to repayment of
principal and payment of interest within seven days and
over-the-counter options. Also, BT may determine some restricted
securities, emerging market securities, and swap agreements to be
illiquid. However, with respect to over-the-counter options a 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.
INDEXED SECURITIES. Indexed securities include commercial paper,
certificates of deposit, and other fixed-income securities whose
values at maturity or coupon interest rates are determined by
reference to the returns of the S&P 500 or comparable stock indices.
Indexed securities can be affected by stock prices as well as changes
in interest rates and the creditworthiness of their issuers and may
not track the S&P 500 as accurately as direct investments in the S&P
500.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A 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.
OTHER INVESTMENT COMPANIES. A fund may purchase the shares of other
investment companies.
REAL ESTATE INVESTMENT TRUSTS. Equity real estate investment trusts
own real estate properties, while mortgage reals estate investment
trusts make construction, development, and long-term mortgage loans,
Their value may be affected by changes in the value of the underlying
property of the trusts, the creditworthiness of the issuer, property
taxes, interest rates, and tax and regulatory requirements, such as
those relating to the environment. Both types of trusts are dependent
upon management skill, are not diversified, and are subject to heavy
cash flow dependency, defaults by borrowers, self-liquidation, and the
possibility of failing to qualify for tax-free status of income under
the Internal Revenue Code and failing to maintain exemption from the
1940 Act.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. 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. As
protection against the risk that the original seller will not fulfill
its obligation, the securities are held in a separate account at a
bank, marked-to-market daily, and maintained at a value at least equal
to the sale price plus the accrued incremental amount. While it does
not presently appear possible to eliminate all risks from these
transactions (particularly the possibility that the value of the
underlying security will be less than the resale price, as well as
delays and costs to a fund in connection with bankruptcy proceedings),
the fund will engage in repurchase agreement transactions with parties
whose creditworthiness has been reviewed and found satisfactory by BT
or, under certain circumstances, by FMR or an FMR-affiliate.
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, a 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 it may
be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to
develop, a fund might obtain a less favorable price than prevailed
when it decided to seek registration of the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. While a reverse repurchase
agreement is outstanding, a 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
with parties whose creditworthiness has been reviewed and found
satisfactory by BT or, under certain circumstances, by FMR or an
FMR-affiliate. Such transactions may increase fluctuations in the
market value of fund assets and may be viewed as a form of leverage.
SECURITIES LENDING. A 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. The fund will not lend
securities to BT or its affiliates. BT receives a portion of
securities lending income earned by the fund.
Securities lending allows a 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 BT, or, under certain
circumstances, FMR or an FMR-affiliate, to be of good standing.
Furthermore, they will only be made if, in BT's judgment, the
consideration to be earned from such loans would justify the risk.
BT understands that it is the current view of the SEC Staff that a
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 other
eligible securities. Investing this cash subjects that investment, as
well as the security loaned, to market forces (i.e., capital
appreciation or depreciation). If a fund cannot recover the loaned
securities on termination, a fund may sell the collateral and purchase
a replacement investment in the market.
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when
it owns or has the right to obtain securities equivalent in kind or
amount to the securities sold short. Such short sales are known as
short sales "against the box." If a 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
expenses, in connection with opening, maintaining, and closing short
sales against the box.
SWAP AGREEMENTS. Under a typical equity swap agreement, a counterparty
such as a bank or broker-dealer agrees to pay the fund a return equal
to the dividend payments and increase in value, if any, of an index or
group of stocks, and the fund agrees in return to pay a fixed or
floating rate of interest, plus any declines in value of the index.
Swap agreements can also have features providing for maximum or
minimum exposure to a designated index. In order to track the return
of its designated index effectively, the fund would generally have to
own other assets returning approximately the same amount as the
interest rate payable by the fund under the swap agreement.
The most significant factor in the performance of swap agreements is
the change in value of the specific index or currency or other factors
that determine the amounts of payments due to and from a 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
and impairing the fund's correlation with the S&P 500. A fund may be
able to eliminate its exposure under a swap agreement either by
assignment or other disposition, or by entering into an offsetting
swap agreement with the same party or a similarly creditworthy party.
A fund will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap
agreements. If a 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 a 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.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of the fund by BT pursuant to authority contained in the
management contract and sub-advisory agreement. BT 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, BT considers 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.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges 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 BT or their affiliates exercise investment
discretion. Such services may include advice concerning the value of
securities; the advisability of investing in, purchasing, or selling
securities; and the availability of securities or the purchasers or
sellers of securities. In addition, such broker-dealers may furnish
analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and performance of
accounts; and effect securities transactions and perform
functions incidental thereto (such as clearance and settlement).
The selection of such broker-dealers for transactions in equity
securities is generally made by BT (to the extent possible consistent
with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by BT's investment staff based
primarily upon the quality of execution services provided.
For transactions in fixed-income securities, BT's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of the fund may be useful to BT 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 BT clients may be useful to BT in carrying
out its obligations to the fund. The receipt of such research has not
reduced BT's normal independent research activities; however, it
enables BT to avoid the additional expenses that could be incurred if
BT tried to develop comparable information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
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,
BT 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 BT's overall responsibilities to the fund
and its other clients. In reaching this determination, BT 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.
BT 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. BT may use
research services provided by and place agency transactions with
National Financial Services Corporation (NFSC) and Fidelity Brokerage
Services Japan LLC (FBSJ), indirect subsidiaries of FM R
Corp., and BT Brokerage Corporation and BT Futures Corp., indirect
subsidiaries of Bankers Trust New York Corporation, if the commissions
are fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services. Prior
to December 9, 1997, FMR used research services provided by and placed
agency transactions with Fidelity Brokerage Services (FBS), an
indirect subsidiary of FMR Corp.
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, unless certain
requirements are satisfied. Pursuant to such requirements, the Board
of Trustees has authorized NFSC to execute portfolio transactions on
national securities exchanges in accordance with approved procedures
and applicable SEC rules.
The Trustee's of the fund periodically review BT'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.
For the fiscal periods ended April 30, 1998 and 1997, the fund's
portfolio turnover rates were 6 % and 6 %, respectively.
For the fiscal years ended April 1998, 1997, and 1996, the fund
paid brokerage commissions of $430,000, $51,000, and $432,000,
respectively. Significant changes in brokerage commissions paid by the
fund from year to year may result from changing asset levels
throughout the year. The fund may pay both commissions and spreads in
connection with the placement of portfolio transactions.
For the fiscal years ended April 1998, 1997, and 1996, the fund paid
brokerage commissions of $ 1,000 , $ 1,000 , and
$ 1,000 , respectively , to NFSC. NFSC is paid on a commission
basis. During the fiscal year ended April 1998, this amounted to
approximately 0.16 % of the aggregate brokerage commissions paid
by the fund for transactions involving approximately 0.18 % of
the aggregate dollar amount of transactions for which the fund paid
brokerage commissions. The difference between the percentage of
brokerage commissions paid to, and the percentage of the
aggregate dollar amount of transactions effected through, NFSC is
a result of the low commission rates charged by NFSC.
During the fiscal year ended April 1998, the fund paid $ 153,000
in brokerage commissions to firms that provided research
services involving approximately $ 332,066,000 of transactions.
The provision of research services was not necessarily a factor in the
placement of all this business with such firms.
The Trustees of the fund have approved procedures in conformity
with Rule 10f-3 under the 1940 Act whereby a fund may purchase
securities that are offered in underwritings in which an affiliate of
FMR participates. These procedures prohibit the fund from directly or
indirectly benefitting an FMR affiliate in connection with such
underwritings. In addition, for underwriting where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the fund could purchase in the underwriting.
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 or its affiliates ,
investment decisions for the fund are made by BT and are independent
from those of other funds managed by FMR or BT or accounts managed by
FMR or BT 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 and
accounts are managed by the same investment adviser, particularly when
the same security is suitable for the investment objective of more
than one fund or account.
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 procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the 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 manager and BT as
sub-adviser to the fund outweighs any disadvantages that may be said
to exist from exposure to simultaneous transactions.
VALUATION
FSC normally determines the fund's net asset value per share (NAV) as
of the close of the New York Stock Exchange (NYSE) (normally 4:00 p.m.
Eastern time). The valuation of portfolio securities is determined as
of this time for the purpose of computing the fund's NAV.
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most equity securities
for which the primary market is the United States are valued at last
sale price or, if no sale has occurred, at the closing bid price. Most
equity securities for which the primary market is outside the United
States are valued using the official closing price or the last sale
price in the principal market in which they are traded. If the last
sale price (on the local exchange) is unavailable, the last evaluated
quote or last bid price normally is used. Securities of other open-end
investment companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the fund may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the
close of the NYSE using the last quoted price on the local currency
and then translates the value of foreign securities from their local
currencies into U.S. dollars. Any changes in the value of forward
contracts due to exchange rate fluctuations and days to maturity are
included in the calculation of NAV. If an extraordinary event that is
expected to materially affect the value of a portfolio security occurs
after the close of an exchange on which that security is traded, then
that security will be valued as determined in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value. In addition, securities and other assets for which
there is no readily available market value may be valued in good faith
by a committee appointed by the Board of Trustees. The procedures set
forth above need not be used to determine the value of the securities
owned by the fund if, in the opinion of a committee appointed by the
Board of Trustees, some other method would more accurately reflect the
fair market value of such securities.
PERFORMANCE
The fund may quote 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
to tal return 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 return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the fund's
NAV over a stated period but do not include the effect of the
fund's $10.00 annual index account fee. Average annual total
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 total return of 100% over ten years would produce an
average annual total return of 7.18%, which is the steady annual rate
of return that would equal 100% growth on a compounded basis in ten
years. While average annual total 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 total returns represent averaged figures
as opposed to the actual year-to-year performance of the fund.
In addition to average annual total 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. Total returns may be quoted on a before-tax or
after-tax basis and may or may not include the effect of the fund's
0.50% short-term trading fee on shares held less than 90 days or the
$10.00 annual index account fee. Excluding the fund's short-term
trading fee and annual index account fee from a total return
calculation produces a higher total return figure. Total returns,
yields, 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. On
April 24, 1998, the 13-week and 39-week long-term moving averages were
$75.54 and $69.41 , respectively.
CALCULATING HISTORICAL FUND RESULTS . The following table
shows performance for the fund calculated including certain fund
expenses. Total returns do not include the effect of the fund's 0.50%
short-term trading fee, applicable to shares held less than 90
days.
HISTORICAL FUND RESULTS. The following table shows the fund's total
return for the periods ended April 30, 1998.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns

One Five Life of One Five Life of
Year Years Fund* Year Years Fund*

Spartan Market Index 40.7 4 % 22.84% 18.60% 40.7 4 % 179.7 1 % 301.9 1 %

</TABLE>

* From March 6, 1990 (commencement of operations).
Note: If FMR had not reimbursed certain fund expenses during these
periods, the fund's total returns would have been lower.
The following table shows the income and capital elements of the
fund's cumulative total return. The table compares the fund's return
to the record of the S&P 500, the Dow Jones Industrial Average (DJIA),
and the cost of living, as measured by the Consumer Price Index (CPI),
over the same period. The CPI information is as of the month-end
closest to the initial investment date for the fund. The S&P 500 and
DJIA comparisons are provided to show how the fund's total return
compared to the record of a broad unmanaged index of common stocks and
a narrower set of stocks of major industrial companies, respectively,
over the same period. 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 indexes. The S&P 500 and DJIA
returns are based on the prices of unmanaged groups of stocks and,
unlike the fund's returns, do not include the effect of brokerage
commissions or other costs of investing.
During the period from March 6, 1990 (commencement of operations) to
April 30, 1998, a hypothetical $10,000 investment in Spartan Market
Index would have grown to $40,191 , assuming all distributions
were reinvested. Total returns are based on past results and are
not an indication of future performance. Tax consequences of different
investments have not been factored into the figures below.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SPARTAN MARKET INDEX INDICES

Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
April 30 $10,000 Dividend Capital Gain
Investment Distributions Distributions

1998 $ 31, 496 $ 6,46 5 $ 2,230 $ 40,19 1 $ 40,942 $ 42,127 $ 12,695

1997 $ 23,128 $ 4,419 $ 1,011 $ 28,558 $ 29,023 $ 32,040 $ 12,516

1996 $ 19,288 $ 3,280 $ 356 $ 22,924 $ 23,194 $ 24,941 $ 12,211

1995 $ 15,328 $ 2,199 $ 130 $ 17,657 $ 17,812 $ 18,916 $ 11,867

1994 $ 13,396 $ 1,570 $ 114 $ 15,080 $ 15,165 $ 15,691 $ 11,516

1993 $ 13,136 $ 1,199 $ 34 $ 14,369 $ 14,398 $ 14,209 $ 11,250

1992 $ 12,376 $ 792 $ 32 $ 13,200 $ 13,179 $ 13,517 $ 10,898

1991 $ 11,224 $ 381 $ 0 $ 11,605 $ 11,555 $ 11,268 $ 10,563

1990* $ 9,832 $ 0 $ 0 $ 9,832 $ 9,825 $ 9,981 $ 10,070

</TABLE>

* From March 6, 1990 (commencement of operations)
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in the fund
on March 6, 1990, the net amount invested in fund shares was $10,000.
The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their cash value at the time they were
reinvested) amounted to $14,500 . If distributions had not been
reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments for the period would have
amounted to $2,692 for dividends and $1,220 for capital gain
distributions. The figures in the table do not include the effect
of the fund's 0.50% short-term trading fee applicable to shares held
less than 90 days.
PERFORMANCE COMPARISONS. The fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on total return, assume reinvestment of distributions, do
not take sales charges or trading fees into consideration, and are
prepared without regard to tax consequences. In addition to the mutual
fund rankings, the fund's performance may be compared to stock, bond,
and money market mutual fund performance indices prepared by Lipper or
other organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, the fund's performance may also 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. 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.
The fund's performance may also be compared to that of a benchmark
index representing the universe of securities in which the fund may
invest. The total return of a benchmark index reflects reinvestment of
all dividends and capital gains paid by securities included in the
index. Unlike the fund's returns, however, the index returns do not
reflect brokerage commissions, transaction fees, or other costs of
investing directly in the securities included in the index.
The fund may compare its performance to that of the Standard & Poor's
500 Index, a widely recognized, unmanaged index of common stocks.
The fund may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, the fund may offer greater liquidity or higher
potential returns than CDs, the fund does not guarantee your principal
or your return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
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.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
The fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
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 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 $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of April 30, 1998, FMR advised over $ 30 billion in
municipal fund assets, $ 103 billion in money market fund
assets, $ 454 billion in equity fund assets, $ 73 billion
in international fund assets, and $ 29 billion in Spartan fund
assets. The fund may reference the growth and variety of money market
mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management 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. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the
purpose of researching and managing investments abroad.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION 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
1998: New Year's Day, Martin Luther King's Birthday, Presidents' Day,
Good Friday, Memorial Day, 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. In addition, on days when the Federal
Reserve Wire System is closed, federal funds wires cannot be sent.
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. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
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 the 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, the 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 administrative 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 the rules
and regulations thereunder, 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
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
securities 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. If the fund's distributions exceed its net investment
company taxable income during a taxable year, all or a portion of the
distributions made in the same taxable year would be recharacterized
as a return of capital to shareholders, thereby reducing each
shareholder's cost basis in the fund. Short-term capital gains are
distributed as dividend income. 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 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 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.
As of April 30, 1998, the fund hereby designates approximately
$ 60,306,000 as a capital gain dividend for the purpose of the
dividend-paid deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments
may also impose taxes on other payments or gains 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, and intends to comply with
other tax rules applicable to regulated investment companies.
The fund is treated as a separate entity from the other funds of
Fidelity Commonwealth Trust for tax purposes.
If a 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 a fund with
respect to deferred taxes arising from such distributions or gains.
Generally, the fund will elect to mark-to-market any PFIC shares.
Unrealized gains will be recognized as income for tax purposes and
must be distributed to shareholders as dividends.
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 fund distributions, and shares may
be subject to state and local personal property taxes. Investors
should consult their tax advisers to determine whether a fund is
suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the Investment Company Act of 1940 (1940 Act), control of a company is
presumed where one individual or group of individuals owns more than
25% of the voting stock of that company. Therefore, through their
ownership of voting common stock and the execution of the
shareholders' voting agreement, members of the Johnson family may be
deemed, under the 1940 Act, to form a controlling group with respect
to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures
for personal investing and restricts certain transactions. For
example, all personal trades in most securities require pre-clearance,
and participation in initial public offerings is prohibited. In
addition, restrictions on the timing of personal investing in relation
to trades by Fidelity funds and on short-term trading have been
adopted.
BT
BT, a New York banking corporation with principal offices at 130
Liberty Street, New York, New York 10006, is a wholly owned subsidiary
of Bankers Trust Corporation (formerly Bankers Trust New York
Corporation) , whose principal offices are also at 130 Liberty
Street, New York, New York 10006. BT was founded in 1903. As of
December 31, 1997 , Bankers Trust Corporation (formerly
Bankers Trust New York Corportation) was the seventh largest bank
holding company in the United States with total assets of
approximately $140 billion. BT is a worldwide merchant bank that
conducts a variety of general banking and trust activities and is a
major wholesale supplier of financial services to the international
and domestic institutional markets. Investment management is a core
business of BT with over $250 billion in assets under management
globally. Of that total, over $100 billion are in U.S. equity index
assets. This makes BT one of the nation's leading managers in index
funds.
BT has been advised by counsel that BT currently may perform the
services for each fund described herein without violation of the
Glass-Steagall Act or other applicable banking laws or regulations.
State laws on this issue may differ from the interpretation of
relevant federal law and banks and financial institutions may be
required to register as dealers pursuant to state securities law.
BT investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, 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 and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR. The business address of each Trustee, Member of the
Advisory Board, and officer who is an "interested person" (as defined
in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The
business address of all the other Trustees is Fidelity Investments,
P.O. Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who
are "interested persons" by virtue of their affiliation with either
the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (68), 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 Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
J. GARY BURKHEAD (57), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (66), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of USA Waste Services,
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
Rio Grande, Inc. (oil and gas production), and Daniel Industries
(petroleum measurement equipment manufacturer). In addition, he is a
member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (66), Trustee. Prior to her retirement in
September 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),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont School
of Business Administration.
ROBERT M. GATES (55), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of LucasVarity PLC
(automotive components and diesel engines), Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment and replacement
products). Mr. Gates also is a Trustee of the Forum for International
Policy and of the Endowment Association of the College of William and
Mary. In addition, he is a member of the National Executive Board of
the Boy Scouts of America.
E. BRADLEY JONES (70), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc. (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (65), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of the National Arts Stabilization Fund, Chairman
of the Board of Trustees of the Greenwich Hospital Association,
Director of the Yale-New Haven Health Services Corp. (1998), a Member
of the Public Oversight Board of the American Inst itute of
Certified Public Accountants' SEC Practice Section (1995), and as a
Public Governor of the National Association of Securities Dealers,
Inc. (1996).
*PETER S. LYNCH (55), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR 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). 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.
WILLIAM O. McCOY (64), Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (69), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal products, 1992), CUNO,
Inc. (liquid and gas filtration products, 1996), and Associated
Estates Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (65), Trustee (1993), is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997), and
Infomart (marketing services, 1991), a Trammell Crow Co. In addition,
he serves as the Campaign Vice Chairman of the Tri-State United Way
(1993) and is a member of the University of Alabama President's
Cabinet.
*ROBERT C. POZEN (57), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (69), Trustee, 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 ConAgra, Inc. (agricultural products), Georgia Power Company
(electric utility), National Life Insurance Company of Vermont,
American Software, Inc., and AppleSouth, Inc. (restaurants, 1992).
ROBERT A. LAWRENCE (45), is Vice President of certain Equity Funds
(1997), Vice President of Fidelity Real Estate High Income Fund (1995)
and Fidelity Real Estate High Income Fund II (1996), and Senior Vice
President of FMR (1993).
ERIC D. ROITER (49), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997). Prior
to joining Fidelity, Mr. Roiter was a partner at Debevoise & Plimpton
(1981-1997) and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981).
RICHARD A. SILVER (51), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
JOHN H. COSTELLO (51), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of the fund for his
or her services for the fiscal year ended April 30, 1998 or calendar
year ended December 31, 1997, as applicable.
COMPENSATION TABLE

Trustees Aggregate Total
and Compensation Compensation
Members of the Advisory Board from from the
Spartan Market Fund Complex*,A
Index B

J. Gary Burkhead** $ 0 $ 0

Ralph F. Cox $ 1,335 $ 214,500

Phyllis Burke Davis $ 1,335 $ 210,000

Robert M. Gates*** $ 1,357 $ 176,000

Edward C. Johnson 3d** $ 0 $ 0

E. Bradley Jones $ 1,335 $ 211,500

Donald J. Kirk $ 1,335 $ 211,500

Peter S. Lynch** $ 0 $ 0

William O. McCoy $ 1,357 $ 214,500

Gerald C. McDonough $ 1,662 $ 264,500

Marvin L. Mann $ 1,316 $ 214,500

Robert C. Pozen** $ 0 $ 0

Thomas R. Williams $ 1,335 $ 214,500

* Information is for the calendar year ended December 31, 199 7
for 230 funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are compensated
by FMR.
*** Mr. Gates was appointed to the Board of Trustees effective March
1, 1997.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $62,500; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,699; Marvin L. Mann, $53,699; and Thomas R.
Williams, $62,462.
B Compensation figures include cash .
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of April 30, 1998, the Trustees, Members of the Advisory Board, and
officers of the fund owned, in the aggregate, less than 1 % of
the fund's total outstanding shares.
MANAGEMENT CONTRACT
FMR is the fund's manager pursuant to a management contract dated
December 1, 1997, which was approved by shareholders on November 19,
1997. Prior to December 1, 1997, FMR was the fund's manager
pursuant to a management contract dated February 15, 1990, which was
approved by shareholders on September 19, 1990.
MANAGEMENT AND SUB-ADVISORY SERVICES. The fund employs FMR to furnish
investment advisory and other services. FMR provides the fund with all
necessary office facilities and personnel for servicing the fund's
investments, compensates all officers of the fund and all Trustees who
are "interested persons" of the trust or of FMR, and all personnel of
the fund 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 securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for the fund; and furnishing
reports, evaluations, and analyses on a variety of subjects to the
Trustees.
BT is the sub-adviser of the fund and acts as the fund's custodian.
Under its management contract with the fund, FMR acts as investment
adviser. Under the sub-advisory agreement, and, subject to the
supervision of the Board of Trustees, BT directs the investments of
the fund in accordance with its investment objective, policies, and
limitations, administers the securities lending program of the fund
and provides custodial services to the fund.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR, the sub-advisory fee payable to BT, and the fees payable to
the transfer, dividend disbursing, and shareholder servicing agent and
pricing and bookkeeping agent, the fund pays all of its expenses that
are not assumed by those parties. The fund pays for the typesetting,
printing, and mailing of its proxy materials to shareholders, legal
expenses, and the fees of the auditor and non-interested Trustees. The
fund's management contract further provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders; however,
under the terms of the fund's transfer agent agreement, the transfer
agent bears the costs 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 securities laws and making necessary
filings under state securities laws. The fund is also liable for such
non-recurring 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 its officers and Trustees with respect to litigation.
MANAGEMENT AND SUB-ADVISORY FEES. For the services of FMR under the
contract, the fund pays FMR and BT monthly management and sub-advisory
fees at the annual rate of 0.24 % of its average net assets
throughout the month. These fees include management fees of 0.24%
payable to FMR, and sub-advisory fees of less than 0.01% payable to BT
(representing 40% of net income from securities lending). FMR has
voluntarily agreed to reimburse the fund if and to the extent that the
fund's expenses, including management fees (but excluding sub-advisory
fees associated with securities lending, interest, taxes, brokerage
commissions, and extraordinary expenses), are in excess of the annual
rate of 0.19% of average net assets of the fund. This agreement will
continue through December 31, 1999. FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses
fall below the limit prior to the end of the fiscal year. Expense
reimbursements by FMR will increase the fund's total returns and
repayment of reimbursement by the fund will lower its total returns.
SUB-ADVISER. The fund and FMR have entered into a sub-advisory
agreement with BT. Pursuant to the sub-advisory agreement, FMR has
granted BT investment management authority as well as the authority to
buy and sell securities.
Under the sub-advisory agreement, for providing investment management,
securities lending and custodial services to the fund, FMR pays BT
fees at an annual rate of 0.006% of the average net assets of the
fund. In addition, as described above, under the sub-advisory
agreement, for such services the fund pays BT fees equal to 40% of net
income from the fund's securities lending program. The remaining 60%
of net income from the fund's securities lending program goes to the
fund.
For the fiscal years ended April 30, 1998, 1997, and 1996, the fund
paid FMR management fees of $ 12,905,000, $ 6,713,000 , and
$ 2,872,000 , respectively , and for the period from December
1, 1997 to April 30, 1998, paid BT sub-advisory fees of $ 3,000.
For the fiscal year ended April 30, 1998, FMR paid BT fees of
$112,000.
The table below shows the periods of reimbursement and levels of
expense limitations; the dollar amount of management fees incurred
under the fund's contract before reimbursement; and the dollar amount
of management fees reimbursed by FMR under the expense reimbursement
for each period.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Periods of Aggregate Fiscal Years Management Amount of
Expense Limitation Operating Ended Fee Management
From To Expense April 30 Before Fee
Limitation Reimbursement Reimbursement
Spartan
Market
Index
Fund

May 1, April 30, 0.19% 1998 $ 12,905,000 $ 9,595,000
1997 1998

April 18, April 30, 0.19% 1997 $ 6,713,000 $ 169,000
1997 1997

</TABLE>

DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on behalf
of the fund (the Plan) pursuant to Rule 12b-1 under the 1940 Act (the
Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plan, as approved by the Trustees, allows the fund and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the fund of distribution expenses.
Under the Plan, if the payment of management fees by the fund to FMR
is deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. The Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with the distribution of fund shares.
In addition, the Plan provides that FMR, directly or through FDC, may
make payments to third parties, such as banks or broker-dealers, that
engage in the sale of fund shares, or provide shareholder support
services. Currently, the Board of Trustees has authorized such
payments for fund shares.
FMR made no payments either directly or through FDC to third parties
for the fiscal year ended 19 98 .
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that the Plan does not authorize payments by the fund other than
those made to FMR under its management contract with the fund. To the
extent that the Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares may result. Furthermore, certain shareholder support
services may be provided more effectively under the Plan by local
entities with whom shareholders have other relationships.
The Plan was approved by shareholders of Spartan Market Index on
September 19, 1990.
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 clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the fund might occur, including possible termination of
any automatic investment or redemption or other services then provided
by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these
occurrences. 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.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
CONTRACTS WITH FMR AFFILIATES
The fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreement, FSC performs
transfer agency, dividend disbursing, and shareholder services for the
fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in the fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type (i.e., omnibus or non-omnibus) and, for
non-omnibus accounts, fund type. The account fees are subject to
increase based on postage rate changes.
The asset-based fees are subject to adjustment if the year-to-date
total return of the S&P 500 exceeds a positive or negative 15%.
FSC also collects the fund's $10.00 index account fee from certain
accounts with balances of less than $10,000 at the time of the
December distribution.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in a qualified state
tuition program (QSTP), as defined under the Small Business Job
Protection Act of 1996, managed by FMR or an affiliate and each
Fidelity Freedom Fund, a fund of funds managed by an FMR affiliate,
according to the percentage of the QSTP's or Freedom Fund's
assets that is invested in the fund.
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
existing shareholders, with the exception of proxy statements.
The fund has also entered into a service agent agreement with FSC.
Under the terms of the agreements, FSC calculates the NAV and
dividends for the fund and maintains the fund's portfolio and general
accounting records.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on the fund's average daily net assets throughout the month.
The annual fee rates for pricing and bookkeeping services are 0.0600%
of the first $500 million of average net assets and 0.0300% of average
net assets in excess of $500 million. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of
$60,000 and a maximum of $800,000 per year.
For the fiscal year ended April 30, 1998, the fund paid FSC
pricing and bookkeeping fees, including reimbursement for related
out-of-pocket expenses, of $ 337,000 .
The fund has entered into a distribution agreement with FDC, an
affiliate of FMR organized as a Massachusetts corporation on July 18,
1960. FDC is a broker-dealer registered under the Securities Exchange
Act of 1934 and 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 at
NAV. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FMR.
CONTRACTS WITH BT AFFILIATES
BT is custodian of the assets of the fund. The custodian is
responsible for the safekeeping of a fund's assets and the appointment
of any subcustodian banks and clearing agencies. However, a fund may
invest in obligations of its custodian. Bankers Trust New York
Corporation is included in the S&P 500. The Chase Manhattan Bank and
The Bank of New York, each headquartered in New York, also may serve
as special purpose custodians of certain assets in connection with
repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the
Board of Trustees may, from time to time, conduct transactions with
various banks, including banks serving as custodians for certain funds
advised by FMR. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential
custodial or other fund relationships.
BT's fees for custodial services to the fund are included in the fees
payable under the sub-advisory agreements.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Spartan Market Index Fund is a fund of Fidelity
Commonwealth Trust, an open-end management investment company
organized as a Massachusetts business trust on November 8, 1974.
Currently, there are five funds of the trust: Spartan Market Index
Fund, Fidelity Intermediate Bond Fund, Fidelity Small Cap Selector,
Fidelity Small Cap Stock Fund, and Fidelity Large 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 names
"Fidelity" and "Spartan" 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. As a shareholder, you receive one vote for each dollar value
of net asset value you own. 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
trust or the fund, as determined by the current value of each
shareholder's investment in the fund or trust. If not so terminated,
the trust and its funds will continue indefinitely. Each fund may
invest all of its assets in another investment company.
AUDITOR. Coopers & Lybrand L.L.P , One Post Office Square,
Boston, Massachusetts serves as the fund's independent accountant. The
auditor examines financial statements for the fund and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the
fiscal year ended April 30, 1998, and report of the auditor, are
included in the fund's Annual Report, which is a separate report
supplied with this SAI. The fund's financial statements, including the
financial highlights, and report of the auditor are incorporated
herein by reference. For a free additional copy of the fund's Annual
Report, contact Fidelity at 1-800-544-8888, 82 Devonshire Street,
Boston, MA 02109.
APPENDIX
ABOUT THE S&P 500. The S&P 500 is a well-known stock market index that
includes common stocks of companies representing a significant portion
of the market value of all common stocks publicly traded in the United
States. Stocks in the S&P 500 are weighted according to their market
capitalization (i.e., the number of shares outstanding multiplied by
the stock's current price), with the 51 largest stocks
currently comprising approximately 50 % of the index's value.
The composition of the S&P 500 is determined by Standard & Poor's and
is based on such factors as the market capitalization and trading
activity of each stock and its adequacy as a representation of stocks
in a particular industry group. Standard & Poor's may change the
index's composition from time to time.
The performance of the S&P 500 is a hypothetical number that does not
take into account brokerage commissions and other costs of investing,
which the fund bears.
Although Standard & Poor's obtains information for inclusion in or for
use in the calculation of the S&P 500 from sources which it considers
reliable, Standard & Poor's does not guarantee the accuracy or the
completeness of the S&P 500 or any data included therein. Standard &
Poor's makes no warranty, express or implied, as to results to be
obtained by the licensee, owners of the fund, or any other person or
entity from the use of the S&P 500 or any data included therein in
connection with the rights licensed hereunder or for any other use.
Standard & Poor's makes no express or implied warranties, and hereby
expressly disclaims all warranties of merchantability or fitness for a
particular purpose with respect to the S&P 500 and any data included
therein.
The following is a list of the 500 stocks comprising the S&P 500 as of
April 30, 1998.
3 Com Corp.
Abbott Labs
Adobe Systems
Advanced Micro Devices Inc.
Aeroquip-Vickers Inc.
Aetna Inc.
Ahmanson (H.F.) & Co.
Air Products & Chemicals Inc.
Airtouch Communications
Alberto-Culver Co.
Albertson's Inc.
Alcan Aluminum Ltd.
Allegheny Teledyne Inc.
Allergan, Inc.
AlliedSignal Inc.
Allstate Corp.
ALLTEL Corp.
Aluminum Co. of America
ALZA Corp. Cl. A
Amerada Hess Corp.
Ameren Corp.
American Electric Power Inc.
American Express Co.
American General
American Greetings Cl. A
American Home Products Corp.
American Int'l. Group Inc.
American Stores Co.
Ameritech Corp.
Amgen Inc.
Amoco Corp.
AMP Inc.
AMR Corp.
Anadarko Petroleum
Andrew Corp.
Anheuser-Busch Cos. Inc.
Aon Corp.
Apache Corp.
Apple Computer Inc.
Applied Materials Inc.
Archer-Daniels-Midland Co.
Armco Inc.
Armstrong World Industries Inc.
ASARCO Inc.
Ashland Inc.
Associates First Capital
AT&T Corp.
Atlantic Richfield Co.
Autodesk, Inc.
Automatic Data Processing Inc.
AutoZone Inc.
Avery Dennison Corp.
Avon Products Inc.
Baker Hughes Inc.
Ball Corp.
Baltimore Gas & Electric Co.
Banc One Corp.
Bank of New York Inc.
BankAmerica Corp.
Bankboston Corp.
Bankers Trust N.Y. Corp.
Bard (C.R.) Inc.
Barrick Gold Corp.
Battle Mountain Gold
Bausch & Lomb Inc.
Baxter International Inc.
Bay Networks Inc.
BB & T Corp.
Becton, Dickinson & Co.
Bell Atlantic Corp.
BellSouth Corp.
Bemis Company
Beneficial Corp.
Best Foods Inc.
Bethlehem Steel Corp.
Biomet, Inc.
Black & Decker Corp.
Block H&R Inc.
Boeing Company
Boise Cascade Corp.
Boston Scientific Corp.
Briggs & Stratton Corp.
Bristol-Myers Squibb Co.
Brown-Forman Corp.
Browning-Ferris Industries Inc.
Brunswick Corp.
Burlington Northern Santa Fe Corp.
Burlington Resources Inc.
Cabletron Systems Inc.
Campbell Soup Co.
Cardinal Health, Inc.
Carolina Power & Light Co.
Case Corp.
Caterpillar Inc.
CBS Corp.
Cendant Corporation
Centex Corp.
Central & South West Corp.
Ceridian Corp.
Champion International Corp.
Charles Schwab
Chase Manhattan Corp.
Chevron Corp.
Chrysler Corp.
Chubb Corp.
CIGNA Corp.
Cincinnati Financial
Cincinnati Milacron Inc.
CINergy Corp.
Circuit City Group
Cisco Systems Inc.
Citicorp
Clear Channel Communications
Clorox Co.
Coastal Corp.
Coca Cola Co.
Cognizant Corp.
Colgate-Palmolive Co.
Columbia Energy Group
Columbia/HCA Healthcare Corp.
Comcast Class A Special
Comerica Inc.
COMPAQ Computer Corp.
Computer Associates Intl. Inc.
Computer Sciences Corp.
ConAgra Inc.
Conseco Inc.
Consolidated Edison Hldgs.
Consolidated Natural Gas Co.
Consolidated Stores
Cooper Industries Inc.
Cooper Tire & Rubber Co.
Coors (Adolph) Co.
Corning Inc.
Costco Co.
Countrywide Credit Indus. Inc.
Crane Company
Crown Cork & Seal Inc.
CSX Corp.
Cummins Engine Co. Inc.
CVS Corp.
Cyprus Amax Minerals Co.
Dana Corp.
Darden Restaurants Inc.
Data General Corp.
Dayton Hudson Corp.
Deere & Co.
Dell Computer
Delta Air Lines Inc.
Deluxe Corp.
Digital Equipment Corp.
Dillard Inc.
Dominion Resources Inc.
Donnelley (R.R.) & Sons Co.
Dover Corp.
Dow Chemical Co.
Dow Jones & Co. Inc.
Dresser Industries Inc.
DSC Communications Corp.
DTE Energy Co.
Du Pont (E.I.) de Nemours &Co.
Duke Energy
Dun & Bradstreet
E G & G Inc.
Eastern Enterprises
Eastman Chemical Co.
Eastman Kodak Co.
Eaton Corp.
Echlin Inc.
Ecolab Inc.
Edison Int'l.
EMC Corp.
Emerson Electric Co.
Engelhard Corp.
Enron Corp.
Entergy Corp.
Equifax Inc.
Exxon Corp.
Fannie Mae
FDX Holding Corp.
Federal Home Loan Mtg. Corp.
Federated Dept. Stores Inc.
Fifth Third Bancorp
First Chicago NBD Corp.
First Data Corp.
First Union Corp.
First Energy Corp.
Fleet Financial Group Inc.
Fleetwood Enterprises Inc.
Fluor Corp.
FMC Corp.
Ford Motor Co.
Fort James Corp.
Fortune Brands, Inc.
Foster Wheeler
FPL Group Inc.
Franklin Resources Inc.
Freeport-McMoran Copper&Gold
Frontier Corp.
Fruit of the Loom Inc.
Gannett Co.
Gap (The)
Gateway 2000 Inc.
General Dynamics Corp.
General Electric Co.
General Instrument Corp.
General Mills Inc.
General Motors Corp.
General Re Corp.
General Signal Corp.
Genuine Parts Co.
Georgia-Pacific Corp.
Giant Food Cl. A
Gillette Co.
Golden West Financial Corp.
Goodrich (B.F.) Co.
Goodyear Tire & Rubber Co.
GPU Inc.
Grace (W.R.) & Co.
Grainger (W.W.) Inc.
Great A&P TEA Inc.
Great Lakes Chemical Corp.
Green Tree Financial
GTE Corp.
Guidant Corp.
Halliburton Co.
Harcourt General Inc.
Harnischfeger Indus. Inc.
Harrah's Entertainment Inc.
Harris Corp.
Hartford Financial Svc. Gp.
Hasbro Inc.
HBO & Company
HEALTHSOUTH Corp.
Heinz (H.J.) Co.
Helmerich & Payne Inc.
Hercules, Inc.
Hershey Foods Corp.
Hewlett-Packard Co.
Hilton Hotels Corp.
Home Depot Inc.
Homestake Mining Co.
Honeywell Inc.
Household International Inc.
Houston Industries Inc.
Humana Inc.
Huntington Bancshares
IKON Office Solutions
Illinois Tool Works Inc.
Inco, Ltd.
Ingersoll-Rand Co.
Inland Steel Ind. Inc.
Intel Corp.
International Bus. Machines
International Flav/Frag
International Paper Co.
Interpublic Group Cos. Inc.
ITT Industries Inc.
Jefferson-Pilot Corp.
Johnson & Johnson
Johnson Controls Inc.
Jostens Inc.
K Mart
Kaufman & Broad Home Corp.
Kellogg Co.
Kerr-McGee Corp.
KeyCorp
Kimberly-Clark Corp.
King World Productions Inc.
KLA-Tencor Corp.
Knight-Ridder Inc.
Kroger Co.
Laidlaw Inc.
Lehman Bros. Hldgs.
Lilly (Eli) & Co.
Limited, The
Lincoln National Corp.
Liz Claiborne, Inc.
Lockheed Martin Corp.
Loews Corp.
Longs Drug Stores Corp.
Louisiana Pacific Corp.
Lowe's Cos. Inc.
LSI Logic Corp.
Lucent Technologies
Mallinckrodt Inc.
Manor Care Inc.
Marriott Int'l Inc.
Marsh & McLennan Cos. Inc.
Masco Corp.
Mattel, Inc.
May Dept. Stores Co.
Maytag Corp.
MBIA Inc.
MBNA Corp.
McDermott International Inc.
McDonald's Corp.
McGraw-Hill Inc.
MCI Communications Corp.
Mead Corp.
Medtronic Inc.
Mellon Bank Corp.
Mercantile Bancorp
Mercantile Stores Inc.
Merck & Co. Inc.
Meredith Corp.
Merrill Lynch & Co. Inc.
MGIC Investments
Micron Technology Inc.
Microsoft Corp.
Millipore Corp.
Minn. Mining & Mfg. Co.
Mirage Resorts
Mobil Corp.
Monsanto Company
Moore Corp. Ltd.
Morgan (J.P.) & Co. Inc.
Morgan Stanley, Dean Witter, Discover and Co.
Morton International Inc.
Motorola Inc.
NACCO Ind. Class A
Nalco Chemical Co.
National City Corp.
National Semiconductor Corp.
National Service Ind. Inc.
NationsBank Corp.
Navistar International Corp.
New York Times Cl. A
Newell Co.
Newmont Mining Corp.
NEXTEL Communications
Niagara Mohawk Power Corp.
NICOR Inc.
NIKE Inc.
Nordstrom Inc.
Norfolk Southern Corp.
Northern States Power Co.
Northern Telecom Ltd.
Northern Trust Corp.
Northrop Grumman Corp.
Norwest Corp.
Novell Inc.
Nucor Corp.
Occidental Petroleum Corp.
Omnicom Group
ONEOK Inc.
Oracle Corp.
Oryx Energy Co.
Owens Corning
Owens-Illinois
PACCAR Inc.
Pacific Enterprises
PacifiCorp
Pall Corp.
Parametric Technology
Parker-Hannifin Corp.
PECO Energy Co.
Penney (J.C.) Inc.
Pennzoil Co.
Peoples Energy Corp.
Pep Boys
PepsiCo Inc.
Perkin-Elmer Corp.
Pfizer Inc.
PG&E Corp.
Pharmacia & UpJohn, Inc.
Phelps Dodge Corp.
Philip Morris Cos. Inc.
Phillips Petroleum Co.
Pioneer Hi-Bred Int'l Inc.
Pitney-Bowes Inc.
Placer Dome Inc.
PNC Bank Corp.
Polaroid Corp.
Potlatch Corp.
PP & L Resources Inc.
PPG Industries Inc.
Praxair Inc.
Procter & Gamble Co.
Progressive Corp.
Providian Financial Corp.
Public Service Enterprises
Pulte Corp.
Quaker Oats Co.
Ralston-Ralston Purina Gp.
Raychem Corp.
Raytheon Co.
Reebok International Ltd.
Republic NY Corp.
Reynolds Metals Co.
Rite Aid Corp.
Rockwell International Corp.
Rohm & Haas Co.
Rowan Cos. Inc.
Royal Dutch Petroleum Co.
Rubbermaid Inc.
Russell Corp.
Ryder System Inc.
SAFECO Corp.
Sara Lee Corp.
SBC Communications Inc.
Schering-Plough Corp.
Schlumberger Ltd.
Scientific-Atlanta Inc.
Seagate Technology
Seagram Co. Ltd.
Sealed Air Corp. (New)
Sears, Roebuck & Co.
Service Corp. International
Shared Medical Systems Corp.
Sherwin-Williams Co.
Sigma-Aldrich Corp.
Silicon Graphics Inc.
Snap-On Inc.
Sonat Inc.
Southern Co.
Southwest Airlines Co.
Springs Industries Inc.
Sprint Corp.
St. Jude Medical Inc.
St. Paul Cos. Inc.
Stanley Works
State Street Corp.
Stone Container Corp.
Summit Bancorp
Sun Co, Inc.
Sun Microsystems Inc.
SunAmerica Inc.
SunTrust Banks Inc.
Supervalu Inc.
Synovus Financial
Sysco Corp.
Tandy Corp.
Tektronix Inc.
Tele-Communications Inc.
Tellabs Inc.
Temple-Inland Inc.
Tenet Healthcare Corp.
Tenneco Inc.
Texaco Inc.
Texas Instruments Inc.
Texas Utilities Hldg. Cos.
Textron Inc.
Thermo Electron
Thomas & Betts Corp.
Time Warner Inc.
Times Mirror Co.
Timken Co.
TJX Companies Inc.
Torchmark Corp.
Toys R Us Hldg. Cos.
Transamerica Corp.
Travelers Group Inc.
Tribune Co.
TRICON Global Restaurant
TRW Inc.
Tupperware Corp.
Tyco Int'l Limited
U.S. Bancorp
U.S. Surgical Corp.
Unicom Corp.
Unilever N.V.
Union Camp Corp.
Union Carbide Corp.
Union Pacific
Union Pacific Resources Group
Unisys Corp.
United Healthcare Corp.
United Technologies Corp.
Unocal Corp.
UNUM Corp.
US West Communications Group
US West Media Group
USAirways Group Inc.
UST Inc.
USX-Marathon Group
USX-U.S. Steel Group
V.F. Corp.
Viacom Inc.
Wachovia Corp.
Wal-Mart Stores Inc.
Walgreen Co.
Walt Disney Co.
Warner-Lambert Co.
Washington Mutual, Inc.
Waste Management Inc.
Wells Fargo & Co.
Wendy's International Inc.
Western Atlas Inc.
Westvaco Corp.
Weyerhaeuser Corp.
Whirlpool Corp.
Williamette Industries Inc.
Williams Cos. Inc.
Winn-Dixie Stores Inc.
Woolworth Corp.
WorldCom Inc.
Worthington Ind. Inc.
Wrigley (Wm.) Jr. Co.
Xerox Corp.
FIDELITY COMMONWEALTH TRUST:
FIDELITY SMALL CAP SELECTOR
(FORMERLY FIDELITY SMALL CAP STOCK FUND)

CROSS REFERENCE SHEET
FORM N-1A

ITEM NUMBER PROSPECTUS SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page

2 a .............................. Expenses

b, c .............................. Contents; The Fund at a Glance; Who May Want to
Invest

3 a .............................. Financial Highlights

b .............................. *

c, d .............................. Performance

4 a i............................. Charter

ii........................... The Fund at a Glance; Investment Principles and
Risks; Fundamental Investment Policies & Risks

b .............................. Investment Principles and Risks

c .............................. Who May Want to Invest; Investment Principles
and Risks

5 a .............................. Charter

b i............................. Cover Page; The Fund at a Glance; Charter; Doing
Business with Fidelity

ii........................... Charter

iii.......................... Expenses; Breakdown of Expenses

c .............................. Charter

d .............................. Charter; Breakdown of Expenses

e .............................. Cover Page; Charter

f .............................. Expenses

g i.............................. Charter

ii.............................. *

5A .............................. Performance

6 a i............................. Charter

ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions

iii.......................... Charter

b ............................. Charter

c .............................. Transactions Details; Exchange Restrictions

d .............................. *

e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services

f, g .............................. Dividends, Capital Gains, and Taxes

h .............................. *

7 a .............................. Cover Page; Charter

b .............................. How to Buy Shares; Transaction Details

c .............................. *

d .............................. How to Buy Shares

e .............................. *

f .............................. Breakdown of Expenses

8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions

9 .............................. *

</TABLE>

* Not Applicable
FIDELITY COMMONWEALTH TRUST:
FIDELITY SMALL CAP SELECTOR
(FORMERLY FIDELITY SMALL CAP STOCK FUND)

CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A

ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION

<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page

12 ............................ Description of the Trust

13 a - c ............................ Investment Policies and Limitations

d ............................ Portfolio Transactions

14 a - c ............................ Trustees and Officers

15 a, b ............................ *

c ............................ Trustees and Officers

16 a i ............................ FMR, Portfolio Transactions

ii ............................ Trustees and Officers

iii ............................ Management Contract

b ............................ Management Contract

c, d ............................ Contracts with FMR Affiliates

e ............................ *

f ............................ Distribution and Service Plan

g ............................ *

h ............................ Description of the Trust

i ............................ Contracts with FMR Affiliates

17 a - c ............................ Portfolio Transactions

d, e ............................ *

18 a ............................ Description of the Trust

b ............................ *

19 a ............................ Additional Purchase and Redemption Information

b ............................ Additional Purchase and Redemption Information;
Valuation of Portfolio Securities

c ............................ *

20 ............................ Distributions and Taxes

21 a, b ............................ Contracts with FMR Affiliates

c ............................ *

22 a, b ............................ *

22 b ............................ Performance

23 ............................ Financial Statements

</TABLE>

* Not Applicable

FIDELITY
SMALL CAP SELECTOR
(FORMERLY FIDELITY
SMALL CAP STOCK FUND)
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the
fund invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a
copy of the fund's most recent financial report and portfolio listing,
or a copy of the Statement of Additional Information (SAI) dated June
19, 1998. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is available along with other related materials
on the SEC's Internet Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, call
Fidelity (registered trademark) at 1-800-544-8888.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
SCS-pro-0698
702765
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
(fund number 336, trading symbol FDSCX)
Small Cap Selector is a growth fund. It seeks to increase the value of
your investment over the long term. Using a computer-aided
quantitative approach, the fund invests mainly in equity securities of
companies with small market capitalizations.
PROSPECTUS
JUNE 19, 1998(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS

KEY FACTS 2 THE FUND AT A GLANCE

2 WHO MAY WANT TO INVEST

4 EXPENSES The fund's sales charge
(load) and its yearly operating
expenses.

6 FINANCIAL HIGHLIGHTS A summary of the
fund's financial data.

8 PERFORMANCE How the fund has done
over time.

THE FUND IN DETAIL 10 CHARTER How the fund is organized.

10 INVESTMENT PRINCIPLES AND RISKS The
fund's overall approach to investing.

12 BREAKDOWN OF EXPENSES How
operating costs are calculated and what
they include.

YOUR ACCOUNT 13 DOING BUSINESS WITH FIDELITY

13 TYPES OF ACCOUNTS Different ways to
set up your account, including
tax-advantaged retirement plans.

15 HOW TO BUY SHARES Opening an
account and making additional
investments.

18 HOW TO SELL SHARES Taking money out
and closing your account.

20 INVESTOR SERVICES Services to help you
manage your account.

SHAREHOLDER AND 21 DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES

22 TRANSACTION DETAILS Share price
calculations and the timing of purchases
and redemptions.

23 EXCHANGE RESTRICTIONS

23 SALES CHARGE REDUCTIONS AND
WAIVERS

KEY FACTS

THE FUND AT A GLANCE
GOAL: Capital appreciation (increase in the value of the fund's
shares). As with any mutual fund, there is no assurance that the fund
will achieve its goal.
STRATEGY: Invests mainly in equity securities of companies with small
market capitalizations that the manager determines, through both
fundamental and quantitative analysis, to be undervalued compared to
others in their industries.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments (registered trademark) ,
which was established in 1946 and is now America's largest mutual fund
manager. Foreign affiliates of FMR may help choose investments for the
fund.
SIZE: As of April 30, 1998, the fund had over $ 918 million in
assets.
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who are willing to ride out
stock market fluctuations in pursuit of potentially high long-term
returns. The fund is designed for those who want to focus on small
capitalization stocks in search of above average returns. A company's
market capitalization is the total market value of its outstanding
common stock. Small Cap Selector uses a disciplined investment
approach that combines computer-aided, quantitative analysis with
fundamental research.
The value of the fund's investments will vary from day to day, and
generally reflect market conditions, interest rates, and other
company, political, or economic news. In the short-term, stock prices
can fluctuate dramatically in response to these factors. The
securities of small, less well-known companies may be more volatile
than those of larger companies. Over time, however, stocks have shown
greater growth potential than other types of securities. When you sell
your shares, they may be worth more or less than what you paid for
them. By itself, the fund does not constitute a balanced investment
plan.

THE SPECTRUM OF
FIDELITY FUNDS
BROAD CATEGORIES OF FIDELITY
FUNDS ARE PRESENTED HERE IN
ORDER OF ASCENDING RISK.
GENERALLY, INVESTORS SEEKING TO
MAXIMIZE RETURN MUST ASSUME
GREATER RISK. SMALL CAP
SELECTOR IS IN THE GROWTH
CATEGORY.
(SOLID BULLET) MONEY MARKET SEEKS
INCOME AND STABILITY BY
INVESTING IN HIGH-QUALITY,
SHORT-TERM INVESTMENTS.
(SOLID BULLET) INCOME SEEKS INCOME BY
INVESTING IN BONDS.
(SOLID BULLET) GROWTH AND INCOME SEEKS
LONG-TERM GROWTH AND INCOME
BY INVESTING IN STOCKS AND
BONDS.
(RIGHT ARROW) GROWTH SEEKS LONG-TERM
GROWTH BY INVESTING MAINLY IN
STOCKS.
(CHECKMARK)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell shares of the fund. In addition, you may be charged an annual
account maintenance fee if your account balance falls below $2,500.
Lower sales charges may be available for accounts over $250,000. See
"Transaction Details," page , and "Sales Charge Reductions and
Waivers," page , for an explanation of how and when these
charges apply.
Maximum sales charge on purchases 3.00%
(as a % of offering price)

Sales charge on None
reinvested distributions

Deferred sales charge on redemptions None

Redemption fee (Short-term trading fee) 1.50%
on shares held less than 90 days
(as a % of amount redeemed)

Annual account maintenance fee $12.00
(for accounts under $2,500)

ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The
fund pays a management fee to FMR that varies based on its
performance. It also incurs other expenses for services such as
maintaining shareholder records and furnishing shareholder statements
and financial reports. The fund's expenses are factored into its share
price or dividends and are not charged directly to shareholder
accounts (see "Breakdown of Expenses" page ).
The following figures are based on historical expenses of the fund and
are calculated as a percentage of average net assets of the fund. A
portion of the brokerage commissions that the fund pays is used to
reduce the fund's expenses. In addition, the fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances are used to reduce
custodian and transfer agent expenses. Including these reductions, the
total fund operating expenses presented in the table would have been
0.97 %.
UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of expenses
for portfolio management,
shareholder statements, tax
reporting, and other services.
These expenses are paid from
the fund's assets, and their
effect is already factored into
any quoted share price or
return. Also, as an investor,
you may pay certain expenses
directly (for example, the
fund's 3 .00 % sales charge).
(checkmark)
Management fee 0.67%

12b-1 fee None

Other expenses 0.34%

Total fund operating expenses 1.01%

3 years $ 61

5 years $ 84

10 years $ 150

These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expenses or returns, all of which may vary.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows has been audited by
Coopers & Lybrand L.L.P ., independent accountants. The fund's
financial highlights, financial statements, and report of the auditor
are included in the fund's Annual Report, and are incorporated by
reference into (are legally a part of) the fund's SAI. Contact
Fidelity for a free copy of the Annual Report or the SAI.
SELECTED PER-SHARE DATA

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Years ended April 30 1998 1997 1996 1995 1994G

Net asset value, beginning of period $ 13.06 $ 13.89 $ 10.93 $ 10.61 $ 10.00

Income from Investment Operations

Net investment income .10E .06E .07 .05 .02

Net realized and unrealized gain
(loss) 6.20 (.39) 3.74 .28 .65

Total from investment operations 6.30 (.33) 3.81 .33 .67

Less Distributions

From net investment income (.13) (.01) (.08) (.01) --

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

From net realized gain (1.14) (.51) (.77) -- --

In excess of net realized gain -- -- -- -- (.04)

Total distributions (1.27) (.52) (.85) (.01) (.06)

Redemption fees added to paid in
capital .02 .02 -- -- --

Net asset value, end of period $ 18.11 $ 13.06 $ 13.89 $ 10.93 $ 10.61

Total returnB,C 50.21% (2.38)% 35.72% 3.12% 6.70%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000
omitted) $ 918,572 $ 450,666 $ 554,573 $ 562,736 $ 661,804

Ratio of expenses to average net
assets 1.01% .95% 1.01% .97% 1.20%A

Ratio of expenses to average net
assets after expense reductions .97%D .90%D .99%D .90%D 1.18%A,D

Ratio of net investment income
to average net assets .63% .41% .39% .40% .03%A

Portfolio turnover rate 88% 176% 192% 182% 210%A

Average commissions rateF $ .0372 .0365

</TABLE>

A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND
IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
G FOR THE PERIOD JUNE 28, 1993 (COMMENCEMENT OF OPERATIONS) TO
APRIL 30, 1994
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The
total returns that follow are based on historical fund results and do
not reflect the effect of taxes.
The fund's fiscal year runs from May 1 through April 30. The tables
below show the fund's performance over past fiscal years compared to
different measures, including a comparative index and a competitive
funds average. The chart on page presents calendar year
performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended Past 1 Life of
April 30, 1998 year fundA

Small Cap Selector 50.21% 17.58%

Small Cap Selector 45.70% 16.84%
(load adj.B)

Russell 2000(registered trademark) 42.40% 18.12%

Lipper Small Cap Funds Average 45.62% n/a

CUMULATIVE TOTAL RETURNS
Fiscal periods ended Past 1 Life of
April 30, 1998 year fundA

Small Cap Selector 50.21% 118.99%

Small Cap Selector 45.70% 112.42%
(load adj.B)

Russell 2000 42.40% 123.93%

Lipper Small Cap Funds Average 45.62% n/a

A FROM JUNE 28, 1993 (COMMENCEMENT OF OPERATIONS )
B LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF THE FUND'S 3.00% SALES
CHARGE.
EXAMPLE: Let's say, hypothetically, that you put $10,000 in the fund
on June 28, 1993. From that date through April 30, 1998, the fund's
total return, including the effect of the 3.00 % sales charge,
was 112.42%. Your $10,000 would have grown to $21,242 (the initial
investment plus 112.42% of $10,000).
$10,000 OVER LIFE OF FUND
Fiscal years 1994 1996 1998
Row: 1, Col: 1, Value: 9700.0
Row: 2, Col: 1, Value: 9700.0
Row: 3, Col: 1, Value: 9767.9
Row: 4, Col: 1, Value: 10126.8
Row: 5, Col: 1, Value: 10340.2
Row: 6, Col: 1, Value: 10417.8
Row: 7, Col: 1, Value: 10126.8
Row: 8, Col: 1, Value: 10555.2
Row: 9, Col: 1, Value: 10818.6
Row: 10, Col: 1, Value: 10906.39
Row: 11, Col: 1, Value: 10184.5
Row: 12, Col: 1, Value: 10350.34
Row: 13, Col: 1, Value: 10077.19
Row: 14, Col: 1, Value: 9579.68
Row: 15, Col: 1, Value: 9657.720000000001
Row: 16, Col: 1, Value: 10340.59
Row: 17, Col: 1, Value: 10282.06
Row: 18, Col: 1, Value: 10477.16
Row: 19, Col: 1, Value: 9979.640000000001
Row: 20, Col: 1, Value: 10204.29
Row: 21, Col: 1, Value: 9823.459999999999
Row: 22, Col: 1, Value: 10165.23
Row: 23, Col: 1, Value: 10438.65
Row: 24, Col: 1, Value: 10673.01
Row: 25, Col: 1, Value: 10878.07
Row: 26, Col: 1, Value: 12085.13
Row: 27, Col: 1, Value: 13331.93
Row: 28, Col: 1, Value: 13518.46
Row: 29, Col: 1, Value: 13862.06
Row: 30, Col: 1, Value: 13145.4
Row: 31, Col: 1, Value: 13322.11
Row: 32, Col: 1, Value: 12921.5
Row: 33, Col: 1, Value: 12702.49
Row: 34, Col: 1, Value: 13004.93
Row: 35, Col: 1, Value: 13244.79
Row: 36, Col: 1, Value: 14485.84
Row: 37, Col: 1, Value: 14976.0
Row: 38, Col: 1, Value: 14130.95
Row: 39, Col: 1, Value: 13091.43
Row: 40, Col: 1, Value: 13708.65
Row: 41, Col: 1, Value: 14293.37
Row: 42, Col: 1, Value: 13860.24
Row: 43, Col: 1, Value: 14434.14
Row: 44, Col: 1, Value: 14683.19
Row: 45, Col: 1, Value: 14748.16
Row: 46, Col: 1, Value: 14542.43
Row: 47, Col: 1, Value: 14001.01
Row: 48, Col: 1, Value: 14141.78
Row: 49, Col: 1, Value: 15387.03
Row: 50, Col: 1, Value: 16431.06
Row: 51, Col: 1, Value: 17525.73
Row: 52, Col: 1, Value: 17647.36
Row: 53, Col: 1, Value: 18841.54
Row: 54, Col: 1, Value: 18377.14
Row: 55, Col: 1, Value: 18299.74
Row: 56, Col: 1, Value: 18684.72
Row: 57, Col: 1, Value: 18485.33
Row: 58, Col: 1, Value: 20010.13
Row: 59, Col: 1, Value: 20901.55
Row: 60, Col: 1, Value: 21241.7
$
$21,242

UNDERSTANDING
PERFORMANCE
BECAUSE THIS FUND INVESTS IN
STOCKS, ITS PERFORMANCE IS
RELATED TO THAT OF THE OVERALL
STOCK MARKET. HISTORICALLY, STOCK
MARKET PERFORMANCE HAS BEEN
CHARACTERIZED BY VOLATILITY IN
THE SHORT RUN AND GROWTH IN THE
LONG RUN. YOU CAN SEE THESE
TWO CHARACTERISTICS REFLECTED IN
THE FUND'S PERFORMANCE; THE
YEAR-BY-YEAR TOTAL RETURNS ON
PAGE 7 SHOW THAT SHORT-TERM
RETURNS CAN VARY WIDELY, WHILE
THE RETURNS IN THE MOUNTAIN
CHART SHOW LONG-TERM GROWTH.
(CHECKMARK)
EXPLANATION OF TERMS
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1994 1995 1996 1997
SMALL CAP SELECTOR --3.32% 26.63% 13.63% 27.25%
Russell 2000 --1.82% 28.44% 16.49% 22.36%
Lipper Small Cap Funds Average --0.72% 31.54% 22.20% 20.75%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 0.0
Row: 5, Col: 1, Value: 0.0
Row: 6, Col: 1, Value: 0.0
Row: 7, Col: 1, Value: -3.32
Row: 8, Col: 1, Value: 26.63
Row: 9, Col: 1, Value: 13.63
Row: 10, Col: 1, Value: 27.25
(LARGE SOLID BOX) Small Cap Selector
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
RUSSELL 2000 INDEX is an unmanaged index of 2,000 small company
stocks.
Unlike the fund's returns, the total returns of the comparative index
do not include the effect of any brokerage commissions, transaction
fees, or other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Small Cap Funds Average.
As of April 30, 1998, the average reflected the performance of
507 mutual funds with similar investment objectives. This
average, published by Lipper Analytical Services, Inc., excludes the
effect of sales loads.
Other illustrations of fund performance may show moving averages over
specified periods.
The fund's recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
For current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF
FUTURE PERFORMANCE.
THE FUND IN DETAIL

CHARTER
SMALL CAP SELECTOR IS A MUTUAL FUND: an investment that pools
shareholders' money and invests it toward a specified goal. The fund
is a diversified fund of Fidelity Commonwealth Trust, an open-end
management investment company organized as a Massachusetts business
trust on November 8, 1974.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
fund's activities, review contractual arrangements with companies that
provide services to the fund, and review the fund's performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. Fidelity will mail proxy materials in
advance, including a voting card and information about the proposals
to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
FMR AND ITS AFFILIATES
The fund is managed by FMR, which chooses the fund's investments and
handles its business affairs. Fidelity Management & Research (U.K.)
Inc. (FMR U.K.), in London, England, and Fidelity Management &
Research (Far East) Inc. (FMR Far East), in Tokyo, Japan, assist FMR
with foreign investments.
Brad Lewis is Vice President and manager of Small Cap Selector, which
he has managed since June 1993. He also manages other Fidelity funds.
Since joining Fidelity in 1985, Mr. Lewis has worked as an analyst and
manager.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
Fidelity Service Company, Inc. (FSC) performs transfer agent servicing
functions for the fund.
FMR Corp. is the ultimate parent company of FMR, FMR U. K. an d
FMR Far East. Members of the Edward C. Johnson 3d family are the
predominant owners of a class of shares of common stock representing
approximately 49% of the voting power of FMR Corp. Under the
Investment Company Act of 1940 (the 1940 Act), control of a company is
presumed where one individual or group of individuals owns more than
25% of the voting stock of that company; therefore, the Johnson family
may be deemed under the 1940 Act to form a controlling group with
respect to FMR Corp.
FMR may use its broker-dealer affiliates and other firms that sell
fund shares to carry out the fund's transactions, provided that the
fund receives brokerage services and commission rates comparable to
those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
THE FUND seeks capital appreciation by investing primarily in
equity securities of companies with small market capitalizations. FMR
normally invests at least 65% of the fund's total assets in these
securities. The fund has the flexibility, however, to invest in
other market capitalizations and security types.
Small market capitalization companies are those whose market
capitalization is similar to the market capitalization of companies in
the Russell 2000 at the time of the fund's investment. Companies
whos e c apitalization no longer meets this definition after
purchase continue to be considered small-capitalized for purposes of
the 65% policy. As of April 30, 1998, the Russell 2000 included
companies with capitalizations between $12.5 million and $3.5 billion.
The size of companies in the Russell 2000 changes with market
conditions and the composition of the index.
In selecting the fund's investments, FMR uses a disciplined approach
which involves computer-aided quantitative analysis supported by
fundamental research. FMR's computer model systematically reviews
thousands of stocks, using historical earnings, dividend yield,
earnings per share, and many other factors. Then, potential
investments are analyzed further using fundamental criteria, such as a
company's growth potential and estimates of current earnings.
Investing in small capitalization stocks may involve greater risk than
investing in medium and large capitalization stocks, because
they can be subject to more abrupt or erratic movements. Small
capitalization companies may have more limited product lines, markets,
or financial resources.
The value of the fund's investments varies in response to many
factors. Stock values fluctuate in response to the activities of
individual companies and general market and economic conditions.

FMR may use various investment techniques to hedge a portion of the
fund's risks, but there is no guarantee that these strategies will
work as FMR intends. As a mutual fund, the fund seeks to spread
investment risk by diversifying its holdings among many companies and
industries. When you sell your shares of the fund, they may be
worth more or less than what you paid for them.
FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without
limitation in preferred stocks and investment-grade debt instruments
for temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of the fund's limitations and more
detailed information about the fund's investments are contained in the
fund's SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with the fund's
investment objective and policies and that doing so will help the fund
achieve its goal. Fund holdings and recent investment strategies are
detailed in the fund's financial reports, which are sent to
shareholders twice a year. For a free SAI or financial report, call
1-800-544-8888.
EQUITY SECURITIES may include common stocks, preferred stocks,
convertible securities, and warrants. Common stocks, the most familiar
type, represent an equity (ownership) interest in a corporation.
Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's
financial condition and on overall market and economic conditions.
Smaller companies are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of its total assets, the fund
may not invest in more than 10% of the outstanding voting
securities of a single issuer.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers
to borrow money from investors. The issuer generally pays the investor
a fixed, variable, or floating rate of interest, and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon
bonds, do not pay current interest, but are sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes.
In addition, bond prices are also affected by the credit quality of
the issuer. Investment-grade debt securities are medium- and
high-quality securities. Some, however, may possess speculative
characteristics, and may be more sensitive to economic changes and to
changes in the financial condition of issuers.
RESTRICTIONS: Purchase of a debt security is consistent with the
fund's debt quality policy if it is rated at or above the stated level
by Moody's Investors Service or rated in the equivalent categories by
Standard & Poor's, or is unrated but judged to be of equivalent
quality by FMR. The fund currently intends to limit its investments in
lower than Baa-quality debt securities (sometimes called "junk bonds")
to 5% of its assets.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve additional risks and considerations. These
include risks relating to political, economic, or regulatory
conditions in foreign countries; fluctuations in foreign currencies;
withholding or other taxes; trading, settlement, custodial, and other
operational risks; and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign debt securities may be unwilling to
pay interest and repay principal when due and may require that the
conditions for payment be renegotiated. All of these factors can make
foreign investments, especially those in emerging markets, more
volatile and potentially less liquid than U.S. investments.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices,
interest rates, currency exchange rates, commodity prices, or other
factors that affect security values. These techniques may involve
derivative transactions such as buying and selling options and futures
contracts, entering into currency exchange contracts or swap
agreements, and purchasing indexed securities.
FMR can use these practices to adjust the risk and return
characteristics of the fund's portfolio of investments. If FMR judges
market conditions incorrectly or employs a strategy that does not
correlate well with the fund's investments, these techniques could
result in a loss, regardless of whether the intent was to reduce risk
or increase return. These techniques may increase the volatility of
the fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these techniques could
result in a loss if the counterparty to the transaction does not
perform as promised.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities, and some
other securities, may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to the fund.
RESTRICTIONS: The fund may not invest more than 10% of its assets
in illiquid securities.
OTHER INSTRUMENTS may include real estate-related instruments .
CASH MANAGEMENT. The fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income while maintaining a stable $1.00
share price. A major change in interest rates or a default on the
money market fund's investments could cause its share price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one
industry. Economic, business, or political changes can affect all
securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, the fund may
not invest more than 5% in the securities of any one
issuer. This limitation does not apply to U.S. Government securities.
The fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
BORROWING. The fund may borrow from banks or from other funds advised
by FMR or its affiliates , or through reverse repurchase
agreements. If the fund borrows money, its share price may be subject
to greater fluctuation until the borrowing is paid off. If the fund
makes additional investments while borrowings are outstanding, this
may be considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a
means of earning income. This practice could result in a loss or a
delay in recovering the fund's securities. The fund may also lend
money to other funds advised by FMR or its affiliates.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of the
fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
THE FUND seeks capital appreciation.
With respect to 75% of its total assets, the fund may not
invest more than 5% in the securities of any one issuer and may
not invest in more than 10% of the outstanding voting
securities of a single issuer. These limitations do not apply to U.S.
Government securities.
The fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
The fund may borrow only for temporary or emergency purposes, but not
in an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of the fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily
operations. Expenses paid out of the fund's assets are reflected in
its share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. The fund also pays OTHER EXPENSES,
which are explained on page .
FMR may, from time to time, agree to reimburse the fund for management
fees and other expenses above a specified limit. FMR retains the
ability to be repaid by the fund if expenses fall below the specified
limit prior to the end of the fiscal year. Reimbursement arrangements,
which may be terminated at any time without notice, can decrease the
fund's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The
amount of the fee is determined by taking a BASIC FEE and then
applying a PERFORMANCE ADJUSTMENT. The performance adjustment either
increases or decreases the management fee, depending on how well the
fund has performed relative to the Russell 2000.
UNDERSTANDING THE
MANAGEMENT FEE
The basic fee FMR receives is
designed to be responsive to
changes in FMR's total assets
under management. Building
this variable into the fee
calculation assures
shareholders that they will pay
a lower rate as FMR's assets
under management increase.
Another variable, the
performance adjustment,
rewards FMR when the fund
outperforms the Russell 2000
(an established index of stock
market performance) and
reduces FMR's fee when the
fund underperforms this index.
(checkmark)
Management = Basic +/- Performance
fee fee adjustment

THE BASIC FEE is calculated by adding a group fee rate to an
individual fund fee rate, multiplying the result by the fund's monthly
average net assets and dividing by twelve.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.
For April 1998, the group fee rate was 0.2888 %. The individual
fund fee rate is 0.35%. The basic fe e f or the fiscal year ended
April 30, 1998 was 0.64 % of the fund's average net
assets.
THE PERFORMANCE ADJUSTMENT rate is calculated monthly by comparing the
fund's performance to that of the Russell 2000 over the performance
period.
The performance period is the most recent 36-month period.
The difference is translated into a dollar amount that is added to or
subtracted from the basic fee. The maximum annualized performance
adjustment rate is (plus/minus)0.20% of the fund's average net assets
over the performance period.
The total management fee rate for the fiscal year ended April 30,
1998 was 0.67 % of the fund's average net assets.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on
issuers based outside the United States. Under the sub-advisory
agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of the costs of providing these services.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 50% of its
management fee rate with respect to the fund's investments that the
sub-adviser manages on a discretionary basis.
OTHER EXPENSES
While the management fee is a significant component of the fund's
annual operating costs, the fund has other expenses as well.
The fund contracts with FSC to perform transfer agency, dividend
disbursing, shareholder servicing, and accounting functions. These
services include processing shareholder transactions, valuing the
fund's investments, handling securities loans, and calculating the
fund's share price and dividends.
For the fiscal year ended April 1998, the fund paid transfer agency
and pricing and bookkeeping fees equal to 0.32% of its average
net assets. This amount is before expense reductions, if any.
The fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity. A
broker-dealer may use a portion of the commissions paid by the fund to
reduce the fund's custodian or transfer agent fees.
The fund's portfolio turnover rate for the fiscal year ended April
1998 was 88 %. This rate varies from year to year.
YOUR ACCOUNT

DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of
America's first mutual funds. Today, Fidelity is the largest mutual
fund company in the country, and is known as an innovative provider of
high-quality financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a
leader in providing tax-advantaged retirement plans for individuals
investing on their own or through their employer.
Fidelity is committed to providing investors with practical
information to make investment decisions. Based in Boston, Fidelity
provides customers with complete service 24 hours a day, 365 days a
year, through a network of telephone service centers around the
country and Fidelity's Web site.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity
has over 80 walk-in Investor Centers across the country.
If you would prefer to access information on-line, you can visit
Fidelity's Web site at www.fidelity.com.
TYPES OF ACCOUNTS
You may set up an account directly in the fund or, if you own or
intend to purchase individual securities as part of your total
investment portfolio, you may consider investing in the fund through a
brokerage account.
You may purchase or sell shares of the fund through an investment
professional, including a broker, who may charge you a transaction fee
for this service. If you invest through FBSI, another financial
institution, or an investment professional, read their program
materials for any special provisions, additional service features or
fees that may apply to your investment in the fund. Certain features
of the fund, such as the minimum initial or subsequent investment
amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 225
(solid bullet) Assets in Fidelity mutual
funds: over $ 595 billion
(solid bullet) Number of shareholder
accounts: over 37 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 250
(checkmark)
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the fund through a retirement program, you may be
subject to additional fees. For more information, please refer to your
program materials, cont act your employer, call your retirement
benefits number, visit Fidelity's Web site at www.fidelity.com,
or contact Fidelity directly, as appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
Retirement plans provide individuals with tax-advantaged ways to save
for retirement, either with tax-deductible contributions or tax-free
growth. Retirement accounts require special applications and typically
have lower minimums.
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow
individuals under age 70 with compensation to contribute up to $2,000
per tax year. Married couples can contribute up to $4,000 per tax
year, provided no more than $2,000 is contributed on behalf of either
spouse. (These limits are aggregate for Traditional and Roth IRAs.)
Contributions may be tax-deductible, subject to certain income limits.
(solid bullet) ROTH IRAS allow individuals to make non-deductible
contributions of up to $2,000 per tax year. Married couples can
contribute up to $4,000 per tax year, provided no more than $2,000 is
contributed on behalf of either spouse. (These limits are aggregate
for Traditional and Roth IRAs.) Eligibility is subject to certain
income limits. Qualified distributions are tax-free.
(solid bullet) ROTH CONVERSION IRAS allow individuals with assets held
in a Traditional IRA or Rollover IRA to convert those assets to a Roth
Conversion IRA. Eligibility is subject to certain income limits.
Qualified distributions are tax-free.
(solid bullet) ROLLOVER IRAS help retain special tax advantages for
certain eligible rollover distributions from employer-sponsored
retirement plans.
(solid bullet) 401(K) PLANS, and certain other 401(a)-qualified
plans, are employer-sponsored retirement plans that allow employer
contributions and may allow employee after-tax contributions. In
addition, 401(k) plans allow employee pre-tax (tax-deferred)
contributions. Contributions to these plans may be tax-deductible to
the employer .
(solid bullet) KEOGH PLANS are generally profit sharing or money
purchase pension plans that allow self-employed individuals or small
business owners to make tax-deductible contributions for themselves
and any eligible employees.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employment income (and their eligible employees) with many
of the advantages of a 401(k) plan, but with fewer administrative
requirements.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employment income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS) allow employees of
businesses with 25 or fewer employees to contribute a percentage of
their wages on a tax-deferred basis. These plans must have been
established by the employer prior to January 1, 1997.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of
501(c)(3) tax-exempt institutions, including schools, hospitals, and
other charitable organizations.
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS) are available
to employees of most state and local governments and their agencies
and to employees of tax-exempt institutions.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of the fund is the fund's offering price or
the fund's net asset value per share (NAV), depending on whether you
pay a sales charge. If you pay a sales charge, your price will be the
fund's offering price. When you buy shares of the fund at the offering
price, Fidelity deducts the appropriate sales charge and invests the
rest in the fund. If you qualify for a sales charge waiver, your price
will be the fund's NAV. See "Sales Charge Reductions and Waivers,"
page , for an explanation of how and when the sales charge and
waivers apply.
Your shares will be purchased at the next offering price or NAV, as
applicable, calculated after your investment is received in proper
form. The fund's offering price and NAV are normally calculated each
business day at 4:00 p.m. Eastern time.
The fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion,
they would disrupt management of the fund.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application
and mail it along with your check. You may also open your account in
person or by wire as described on page . If there is no application
accompanying this prospectus, call 1-800-544-8888 or visit
Fidelity's Web site at www.fidelity.com for an application.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another
Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-ADVANTAGED RETIREMENT PLAN, such as
an IRA, for the first time, you will need a special application.
Retirement investing also involves its own investment procedures. Call
1-800-544-8888 or visit Fidelity's Web site at www.fidelity.com
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered
trademark), and then sell those shares by any method other than by
exchange to another Fidelity fund, the payment may be delayed for up
to seven business days to ensure that your previous investment has
cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity retirement a ccountsA $500
TO ADD TO AN ACCOUNT $250
For certain Fidelity retirement account sA $250
Through regular investment pla nsB $100
MINIMUM BALANCE $2,000
For certain Fidelity retirement a ccountsA $500
AT HESE LOWER MINIMUMS APPLY TO FIDELITY TRADITIONAL IRA, ROTH
IRA, ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.
BF OR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE
REFER TO "INVESTOR SERVICES," PAGE .
There is no minimum account balance or initial or subsequent
investment minimum for investments through Fidelity Portfolio
Advisory Services SM , a qualified state tuition program,
certain Fidelity retirement accounts funded through salary
deduction, or accounts opened with the proceeds of distributions from
suc h retirement accounts. Refer to the program materials for
details. In addition, the fund reserves the right to waive or lower
investment minimums in other circumstances.

UNDERSTANDING
OFFERING PRICE
Let's say you invest $2,500 at
an offering price of $10. Of
the $10 offering price, 3%
($.30) is the sales charge, and
97% ($9.70) represents the
NAV. The value of your initial
investment will be $2,425
(250 shares worth $9.70
each), and you will have paid
a sales charge of $75.
(checkmark)
Row: 1, Col: 1, Value: 25.0
Row: 1, Col: 2, Value: 75.0
Row: 1, Col: 3, Value: 75.0
Row: 1, Col: 4, Value: 75.0
Row: 1, Col: 5, Value: 75.0
Row: 1, Col: 6, Value: 75.0
Row: 1, Col: 7, Value: 75.0
Row: 1, Col: 8, Value: 75.0
Row: 1, Col: 9, Value: 75.0
Row: 1, Col: 10, Value: 75.0
Row: 1, Col: 11, Value: 75.0
Row: 1, Col: 12, Value: 75.0
Row: 1, Col: 13, Value: 75.0
Row: 1, Col: 14, Value: 75.0
Row: 1, Col: 15, Value: 75.0
Row: 1, Col: 16, Value: 75.0
Row: 1, Col: 17, Value: 75.0
Row: 1, Col: 18, Value: 75.0
Row: 1, Col: 19, Value: 75.0
Row: 1, Col: 20, Value: 75.0
Row: 1, Col: 21, Value: 75.0
Row: 1, Col: 22, Value: 75.0
Row: 1, Col: 23, Value: 75.0
Row: 1, Col: 24, Value: 75.0
Row: 1, Col: 25, Value: 75.0
Row: 1, Col: 26, Value: 75.0
Row: 1, Col: 27, Value: 75.0
Row: 1, Col: 28, Value: 75.0
Row: 1, Col: 29, Value: 75.0
Row: 1, Col: 30, Value: 75.0
Row: 1, Col: 31, Value: 75.0
Row: 1, Col: 32, Value: 75.0
Row: 1, Col: 33, Value: 75.0
Row: 1, Col: 34, Value: 75.0
$2,500 Investment
3% sales charge = $75
Value of Investment = $2,425

<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT

PHONE 1-800-544-7777
(PHONE_GRAPHIC) (SMALL SOLID BULLET) EXCHANGE
FROM ANOTHER FIDELITY FUND (SMALL SOLID BULLET) EXCHANGE FROM ANOTHER FIDELITY FUND ACCOUNT
ACCOUNT WITH THE SAME
REGISTRATION, WITH THE SAME REGISTRATION, INCLUDING NAME,
INCLUDING NAME, ADDRESS, AND
TAXPAYER ADDRESS, AND TAXPAYER ID NUMBER.
ID NUMBER. (SMALL SOLID BULLET) USE FIDELITY MONEY LINE TO TRANSFER FROM
YOUR BANK ACCOUNT. CALL BEFORE YOUR FIRST
USE TO VERIFY THAT THIS SERVICE IS IN PLACE
ON YOUR ACCOUNT. MAXIMUM MONEY LINE:
UP TO $100,000.

THE INTERNET
WWW.FIDELITY.COM
(COMPUTER GRAPHIC) (SMALL SOLID BULLET)
COMPLETE AND SIGN THE
APPLICATION. MAKE (SMALL SOLID BULLET) E XCHANGE FROM ANOTHER FIDELITY FUND ACCOUNT
YOUR CHECK PAYABLE TO THE
COMPLETE WITH THE SAME REGISTRATION, INCLUDING NAME,
NAME OF THE FUND. MAIL TO
THE ADDRESS ADDRESS, AND TAXPAYER ID NUMBER.
INDICATED ON THE
APPLICATION. (SMALL SOLID BULLET) USE FIDELITY MONEY LINE TO TRANSFER FROM
YOUR BANK ACCOUNT. VISIT FIDELITY'S WEB
SITE BEFORE YOUR FIRST USE TO VERIFY THAT THIS
SERVICE IS IN PLACE ON YOUR ACCOUNT.
MAXIMUM MONEY LINE: UP TO $100,000.

MAIL (MAIL_GRAPHIC) (SMALL SOLID BULLET)
COMPLETE AND SIGN THE
APPLICATION. MAKE (SMALL SOLID BULLET) MAKE YOUR CHECK PAYABLE TO THE COMPLETE
YOUR CHECK PAYABLE TO THE
COMPLETE NAME OF THE FUND. INDICATE YOUR FUND
NAME OF THE FUND. MAIL TO
THE ADDRESS ACCOUNT NUMBER ON YOUR CHECK AND MAIL
INDICATED ON THE
APPLICATION. TO THE ADDRESS PRINTED ON YOUR ACCOUNT
STATEMENT.
(SMALL SOLID BULLET) EXCHANGE BY MAIL: CALL 1-800-544-6666 FOR
INSTRUCTIONS.

IN PERSON
(HAND_GRAPHIC) (SMALL SOLID BULLET) BRING
YOUR APPLICATION AND CHECK
TO A (SMALL SOLID BULLET) BRING YOUR CHECK TO A FIDELITY INVESTOR
FIDELITY INVESTOR CENTER.
CALL CENTER. CALL 1-800-544-9797 FOR THE
1-800-544-9797 FOR THE CENTER
NEAREST CENTER NEAREST YOU.
YOU.

WIRE (WIRE_GRAPHIC) (SMALL SOLID BULLET) CALL
1-800-544-7777 TO SET UP
YOUR (SMALL SOLID BULLET) NOT AVAILABLE FOR RETIREMENT ACCOUNTS.
ACCOUNT AND TO ARRANGE A
WIRE (SMALL SOLID BULLET) WIRE TO:
TRANSACTION. NOT AVAILABLE
FOR BANKERS TRUST COMPANY,
RETIREMENT ACCOUNTS. BANK ROUTING #021001033,
(SMALL SOLID BULLET) WIRE
WITHIN 24 HOURS TO: BANKERS
TRUST ACCOUNT #00163053.
COMPANY,BANK ROUTING
#021001033, SPECIFY THE COMPLETE NAME OF THE FUND
ACCOUNT #00163053.SPECIFY
THE AND INCLUDE YOUR ACCOUNT NUMBER AND
COMPLETE NAME OF THE FUND
AND INCLUDE YOUR NAME.
YOUR NEW ACCOUNT NUMBER AND
YOUR
NAME.

AUTOMATICALLY
(AUTOMATIC_GRAPHIC) (SMALL SOLID BULLET) NOT
AVAILABLE. (SMALL SOLID BULLET) USE FIDELITY AUTOMATIC ACCOUNT BUILDER.
SIGN UP FOR THIS SERVICE WHEN OPENING
YOUR ACCOUNT, VISIT FIDELITY'S WEB SITE AT
WWW.FIDELITY.COM TO OBTAIN THE FORM TO
ADD THE SERVICE, OR CALL 1-800-544-6666
TO ADD THE SERVICE .

(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING IMPAIRED: 1-800-544-0118

</TABLE>

HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of the fund is the fund's NAV minus the
short-term trading fee, if applicable. If you sell shares of the fund
after holding them less than 90 days, the fund will deduct a
short-term trading fee equal to 1.50% of the value of those shares.
Your shares will be sold at the next NAV calculated after your order
is received in proper form, minus the short-term trading fee, if
applicable. The fund's NAV is normally calculated each business day at
4:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to other Fidelity funds, which
can be requested by phone, in writing, or through Fidelity's Web
site . Call 1-800-544-6666 for a retirement distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$2,000 worth of shares in the account to keep it open ($500 for
retirement accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to
sign up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner, or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be
redeemed, and
(small solid bullet) Any other applicable requirements listed in the
table that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it
to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
ACCOUNT TYPE SPECIAL REQUIREMENTS

<TABLE>
<CAPTION>
<S> <C> <C>
IF YOU SELL SHARES OF THE FUND AFTER HOLDING THEM LESS THAN 90 DAYS, THE FUND WILL DEDUCT A
SHORT-TERM TRADING FEE EQUAL TO 1.50% OF THE VALUE OF THOSE SHARES.

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
PHONE 1-800-544-7777
(PHONE_GRAPHIC) ALL ACCOUNT TYPES EXCEPT (SMALL SOLID BULLET) MAXIMUM CHECK REQUEST: $100,000.
RETIREMENT (SMALL SOLID BULLET) FOR MONEY LINE TRANSFERS TO YOUR BANK ACCOUNT;
MINIMUM: $10; MAXIMUM: UP TO $100,000.
ALL ACCOUNT TYPES (SMALL SOLID BULLET) YOU MAY EXCHANGE TO OTHER FIDELITY FUNDS IF
BOTH ACCOUNTS ARE REGISTERED WITH THE SAME
NAME(S), ADDRESS, AND TAXPAYER ID NUMBER.

(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING IMPAIRED: 1-800-544-0118

</TABLE>

INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365
days a year. Whenever you call, you can speak with someone equipped to
provide the information or service you need.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESS (REGISTERED TRADEMARK)
1-800-544-5555
WEB SITE
WWW.FIDELITY.COM
AUTOMATED SERVICE
(CHECKMARK)
FIDELITY'S WEB SITE at www.fidelity.com offers product and
servicing information, customer education, planning tools, and the
ability to make certain transactions in your account.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call 1-800-544-6666 if you need copies
of financial reports, prospectuses, or historical account information.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's Web site. To participate in our electronic
delivery program, call 1-800-544-6666 or visit Fidelity's Web site at
www.fidelity.com for more information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone, in writing, or through
Fidelity's Web site. The shares you exchange will carry credit for
any sales charge you previously paid in connection with their
purchase.
Note that exchanges out of the fund are limited to four per calendar
year, and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or
revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from
your account. Because of the fund's sales charge, you may not want to
set up a systematic withdrawal plan during a period when you are
buying shares on a regular basis.
FIDELITY MONEY LINE enables you to transfer money by phone between
your bank account and your fund account. Most transfers are complete
within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money
regularly. Fidelity offers convenient services that let you transfer
money into your fund account, or between fund accounts, automatically.
While regular investment plans do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Certain restrictions apply for
retirement accounts. Call 1-800-544-6666 or visit Fidelity's Web
site at www.fidelity.com for more information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDER (registered trademark)
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND

<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 MONTHLY OR QUARTERLY (SMALL SOLID BULLET) FOR A NEW ACCOUNT, COMPLETE THE APPROPRIATE SECTION ON THE FUND
APPLICATION.
(SMALL SOLID BULLET) FOR EXISTING ACCOUNTS, CALL 1-800-544-6666 OR VISIT FIDELITY'S
WEB SITE AT WWW.FIDELITY.COM FOR AN APPLICATION .
(SMALL SOLID BULLET) TO CHANGE THE AMOUNT OR FREQUENCY OF YOUR INVESTMENT, CALL
1-800-544-6666 AT LEAST THREE BUSINESS DAYS PRIOR TO YOUR NEXT
SCHEDULED INVESTMENT DATE.

DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A
FIDELITY FUNDA

MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 EVERY PAY PERIOD (SMALL SOLID BULLET) CHECK THE APPROPRIATE BOX ON THE FUND APPLICATION, OR CALL
1-800-544-6666 OR VISIT FIDELITY'S WEB SITE AT WWW.FIDELITY.COM
FOR AN AUTHORIZATION FORM.
(SMALL SOLID BULLET) CHANGES REQUIRE A NEW AUTHORIZATION FORM.

FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY
FUND

MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, bimonthly, (small solid bullet) To establish, call 1-800-544-6666 after both accounts are
quarterly, or annually opened.
(small solid bullet) To change the amount or frequency of your investment, call
1-800-544-6666.

</TABLE>

A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN
APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES

DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment
income and capital gains to shareholders each year. Normally,
dividends and capital gains are distributed in June and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on
the application, call 1-800-544-6666 for instructions. The fund offers
four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each
dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
If you select distribution option 2 or 3 and the U.S. Postal
Service does not deliver your checks, your election may be converted
to the Reinvestment Option. You will not receive interest on amounts
represented by uncashed distribution checks. To change your
distribution option, call Fidelity at 1-800-544-6666.
SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain
distributions are not subject to a sales charge. If you direct
distributions to a fund with a 3.00 % sales charge, you will not
pay a sales charge on those purchases.
When the fund deducts a distribution from its NAV, the reinvestment
price is the fund's NAV at the close of business that day. Cash
distribution checks will be mailed within seven days.
UNDERSTANDING
DISTRIBUTIONS
AS A FUND SHAREHOLDER, YOU ARE
ENTITLED TO YOUR SHARE OF THE
FUND'S NET INCOME AND GAINS
ON ITS INVESTMENTS. THE FUND
PASSES ITS EARNINGS ALONG TO ITS
INVESTORS AS DISTRIBUTIONS.
THE FUND EARNS DIVIDENDS FROM
STOCKS AND INTEREST FROM BOND,
MONEY MARKET, AND OTHER
INVESTMENTS. THESE ARE PASSED
ALONG AS DIVIDEND
DISTRIBUTIONS. THE FUND REALIZES
CAPITAL GAINS WHENEVER IT SELLS
SECURITIES FOR A HIGHER PRICE
THAN IT PAID FOR THEM. THESE
ARE PASSED ALONG AS CAPITAL
GAIN DISTRIBUTIONS.
(CHECKMARK)
TAXES
As with any investment, you should consider how your investment in
the fund will be taxed. If your account is not a tax-advantaged
retirement account, you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income
tax, and may also be subject to state or local taxes. If you live
outside the United States, your distributions could also be taxed by
the country in which you reside. Your distributions are taxable when
they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are
taxable as if they were paid on December 31.
For federal tax purposes, the fund's income and short-term capital
gains are distributed as dividends and taxed as ordinary income;
capital gain distributions are taxed as long-term capital gains. Every
January, Fidelity will send you and the IRS a statement showing the
tax characterization of distributions paid to you in the previous
year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price
you receive when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price. You will also receive a consolidated transaction statement
every January. However, it is up to you or your tax preparer to
determine whether this sale resulted in a capital gain and, if so, the
amount of tax to be paid. Be sure to keep your regular account
statements; the information they contain will be essential in
calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when the fund has realized but
not yet distributed income or capital gains, you will pay the full
price for the shares and then receive a portion of the price back in
the form of a taxable distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the
fund and its investments, and these taxes generally will reduce the
fund's distributions. However, if you meet certain holding period
requirements with respect to your fund shares, an offsetting tax
credit may be available to you. If you do not meet such holding period
requirements, you may still be entitled to a deduction for certain
foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the
fund, but will also show the amount of the available offsetting credit
or deduction.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
the fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates the fund's NAV and offering
price as of the close of business of the NYSE, normally 4:00 p.m.
Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the
number of shares outstanding.
The fund's assets are valued primarily on the basis of market
quotations. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
on the basis of amortized cost. This method minimizes the effect of
changes in a security's market 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. In addition, if quotations are not
readily available, or if the values have been materially affected by
events occurring after the closing of a foreign market, assets may be
valued by another method that the Board of Trustees believes
accurately reflects fair value.
THE OFFERING PRICE of the fund is its NAV divided by the difference
between one and the applicable sales charge percentage. The maximum
sales charge is 3.00 % of the offering price.
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.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to redeem and
exchange by telephone, call Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail or by visiting a Fidelity Investor Center.
THE FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next offering price or NAV, as applicable, calculated after
your investment is received in proper form. Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees the fund or
its transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money
order, U.S. Treasury check, Federal Reserve check, or direct deposit
instead.
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 time when the fund is
priced on the following business day. If payment is not received by
that time, the financial institution could be held liable for
resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper form,
minus the short-term trading fee, if applicable. Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed 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.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day
after your phone call.
(small solid bullet) The fund may hold payment on redemptions until it
is reasonably satisfied that investments made by check or Fidelity
Money Line have been collected, which can take up to seven business
days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
A SHORT-TERM TRADING FEE of 1.50% will be deducted from the redemption
amount if you sell your shares after holding them less than 90 days.
This fee is paid to the fund rather than Fidelity, and is designed to
offset the brokerage commissions, market impact, and other costs
associated with fluctuations in fund asset levels and cash flow caused
by short-term shareholder trading.
The short-term trading fee, if applicable, is charged on exchanges out
of the fund. If you bought shares on different days, the shares you
held longest will be redeemed first for purposes of determining
whether the short-term trading fee applies. The short-term trading fee
does not apply to shares that were acquired through reinvestment of
distributions.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500 (including any
amount paid as a sales charge), subject to an annual maximum charge of
$24.00 per shareholder. It is expected that accounts will be valued on
the second Friday in November of each year. Accounts opened after
September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part
the relatively higher costs of servicing smaller accounts. This fee
will not be deducted from Fidelity brokerage accounts, retirement
accounts (except non-prototype retirement accounts), accounts using
regular investment plans, or if total assets with Fidelity exceed
$30,000. Eligibility for the $30,000 waiver is determined by
aggregating Fidelity accounts maintained by FSC or FBSI which are
registered under the same social security number or which list the
same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $2,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV, minus
the short-term trading fee, if applicable, on the day your account is
closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC collects the proceeds from the fund's 3.00 % sales charge
and may pay a portion of them to securities dealers who have sold the
fund's shares, or to others, including banks and other financial
institutions (qualified recipients), under special arrangements in
connection with FDC's sales activities. The sales charge paid to
qualified recipients is 1.50% 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.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the
fund for shares of other Fidelity funds. However, you should note the
following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage-point 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 .00 % on your shares and you exchange
them into a fund with a 3 .00 % sales charge, you would pay an
additional 1 .00 % sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, the fund reserves the right to
temporarily or permanently terminate the exchange privilege of any
investor 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 counted
together for purposes of the four exchange limit.
(small solid 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.
(small solid bullet) 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 the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) 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 coincides 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 1.00% and trading fees of up to 3.00% of
the amount exchanged. Check each fund's prospectus for details.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. 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. The amount you invest,
plus the value of your account, must fall within the ranges shown
below. Purchases made with assistance or intervention from a financial
intermediary are not eligible for a sales charge reduction. Call
Fidelity to see if your purchase qualifies.
Sales Charge

Ranges As a % of As an
Offering Price approximate % of net amount invested

$0 - 249,999 3.00% 3.09%

$250,000 - 499,999 2.00% 2.04%

$500,000 - 999,999 1.00% 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 or
by the percentage of any sales charge you would have paid if the
reductions in the table above had not existed. These sales charge
credits only apply to purchases made in one of the ways listed on
the next page , and only if you continuously owned Fidelity fund
shares, maintained a Fidelity brokerage core account, or participated
in The CORPORATEplan for Retirement Program.
1. By exchange from another Fidelity fund.
2. With proceeds from a transaction in 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.
3. As a participant 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.
WAIVERS. 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 million in plan assets
invested in Fidelity mutual funds.
2. To shares in a Fidelity 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 waiver (1) above and had at least some of its
assets invested in Fidelity-managed products. (Distributions
transferred to an IRA account must be transferred within 60 days from
the date of the distribution. All other distributions must be
transferred directly into a Fidelity account).
3. If you are a charitable organization (as defined for purposes of
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 for purposes of 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 by a mutual fund or a qualified state
tuition program for which FMR or an affiliate serves as investment
manager.
7. To shares purchased through Portfolio Advisory Services or Fidelity
Charitable 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 regular employee of
FMR Corp. or Fidelity International Limited or their 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, as defined on page 23.
10. To contributions and exchanges to a prototype or prototype-like
retirement plan sponsored by FMR Corp. or FMR and which is marketed
and distributed directly to plan sponsors or participants without any
assistance or intervention from any intermediary distribution channel.
11. If you invest through a non-prototype pension or profit-sharing
plan that maintains all of its mutual fund assets in Fidelity mutual
funds, provided the plan executes a Fidelity non-prototype sales
charge waiver agreement confirming its qualification.
12. 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. Except for correspondents of National Financial
Services Corporation, this waiver is available only for shares
purchased directly from Fidelity, and is unavailable if the RIA is
part of an organization principally engaged in the brokerage business.
13. 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.
These waivers must be qualified through FDC in advance. More detailed
information about waivers (1), (2), (5), (9), (10), and (12) is
contained in the SAI. A representative of your plan or organization
should call Fidelity for more information.
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity
Investments, Fidelity Money Line, TouchTone Xpress, Fidelity Automatic
Account Builder, and Directed Dividends are registered trademarks of
FMR Corp.
Portfolio Advisory Services is a service mark of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.
This prospectus is printed on recycled paper using soy-based inks.
FIDELITY SMALL CAP SELECTOR
(FORMERLY FIDELITY SMALL CAP STOCK FUND)
A FUND OF FIDELITY COMMONWEALTH TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 19, 1998
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus dated
June 19, 1998. Please retain this document for future reference. The
fund's Annual Report is a separate document supplied with this SAI. To
obtain a free additional copy of the Prospectus or an Annual Report,
please call Fidelity(registered trademark) at 1-800-544-8888.
TABLE OF CONTENTS PAGE

Investment Policies and Limitations 24

Portfolio Transactions 28

Valuation 29

Performance 31

Additional Purchase, Exchange and Redemption Information 33

Distributions and Taxes 34

FMR 34

Trustees and Officers 34

Management Contract 37

Contracts with FMR Affiliates 39

Description of the Trust 40

Financial Statements 40

Appendix 40

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company, Inc. (FSC)
SCS-ptb-0698
475972
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 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI 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.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
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 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 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.)
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), 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 was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page .
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help the fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
CLOSED-END INVESTMENT COMPANIES are investment companies that issue a
fixed number of shares which trade on a stock exchange or
over-the-counter. Closed-end investment companies are professionally
managed and may invest in any type of security. Shares of closed-end
investment companies may trade at a premium or a discount to their net
asset value. A fund may purchase shares of closed-end investment
companies to facilitate investment in certain foreign countries.
CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks
or other securities that may be converted or exchanged (by the holder
or by the issuer) into shares of the underlying common stock (or cash
or securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion
by the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue. If a convertible
security held by a fund is called for redemption or conversion, the
fund could be required to tender it for redemption, convert it into
the underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss
than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than
comparable non-convertible securities. Because of this higher yield,
convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include 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 is no assurance that
FMR will be able to anticipate these potential events or counter their
effects. In addition, the value of securities denominated in foreign
currencies and of dividends and interest paid with respect to such
securities will fluctuate based on the relative strength of the U.S.
dollar.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. In addition, the costs
associated with foreign investments, including withholding taxes,
brokerage commissions and custodial costs, are generally higher than
with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
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 (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market 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. A fund may use currency
forward contracts for any purpose consistent with its investment
objective.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund 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.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a 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. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. 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 direct 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.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
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, a
fund will segregate assets to cover currency forward contracts, if
any, whose purpose is essentially speculative. A 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 currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or
administer the day-to-day operations of any company. A 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 in which a fund may engage, 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 a 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 a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures
Margin Payments, Limitations on Futures and Options Transactions,
Liquidity of Options and Futures Contracts, Options and Futures
Relating to Foreign Currencies, OTC Options, Purchasing Put and Call
Options, and Writing Put and Call Options.
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.
COMBINED POSITIONS involve purchasing and writing 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, purchasing a put option and writing a
call option on the same underlying instrument would 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, 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 a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund 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 a
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. A 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 a 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.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter 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 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 a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a 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 a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a 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.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed 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. The fund intends to comply with Rule
4.5 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 under normal conditions ; 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.
The above limitations on the fund's investments in futures contracts
and options, and the fund's policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
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 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 a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
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. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written 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 a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a 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.
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 (OTC) 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 purchaser or writer 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.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser 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 purchaser 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 purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser 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, 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. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer 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. The writer may seek
to terminate a position in a put option 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, however, the writer
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. When writing an option on a
futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
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 writer 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.
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 a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of a 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 FMR to be illiquid include
repurchase agreements not entitling the holder to repayment of
principal and payment of interest within seven days, over-the-counter
options, and non-government stripped fixed-rate mortgage-backed
securities. Also, FMR may determine some restricted securities,
government-stripped fixed-rate mortgage-backed securities, loans and
other direct debt instruments, emerging market securities, and swap
agreements to be illiquid. However, with respect to over-the-counter
options a 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.
INDEXED SECURITIES are instruments 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 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.
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 United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
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.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A 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.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower 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 purchaser 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 purchaser to supply additional
cash to the borrower on demand.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities 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-quality debt securities may fluctuate more than those of
higher-quality 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 the future performance of the high-yield bond market, especially
during periods of economic recession.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. If market
quotations are not available, lower-quality 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 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 liquidity of lower-quality debt
securities and the ability of outside pricing services to value
lower-quality debt securities.
Since the risk of default is higher for lower-quality debt securities,
FMR's research and credit analysis are an especially important part of
managing securities of this type. FMR will attempt to identify those
issuers of high-yielding 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.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a 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.
REAL ESTATE INVESTMENT TRUSTS. Equity real estate investment trusts
own real estate properties, while mortgage real estate investment
trusts make construction, development, and long-term mortgage loans.
Their value may be affected by changes in the value of the underlying
property of the trusts, the creditworthiness of the issuer, property
taxes, interest rates, and tax and regulatory requirements, such as
those relating to the environment. Both types of trusts are dependent
upon management skill, are not diversified, and are subject to heavy
cash flow dependency, defaults by borrowers, self-liquidation, and the
possibility of failing to qualify for tax-free status of income under
the Internal Revenue Code and failing to maintain exemption from the
1940 Act.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. 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. As
protection against the risk that the original seller will not fulfill
its obligation, the securities are held in a separate account at a
bank, marked-to-market daily, and maintained at a value at least equal
to the sale price plus the accrued incremental amount. While it does
not presently appear possible to eliminate all risks from these
transactions (particularly the possibility that the value of the
underlying security will be less than the resale price, as well as
delays and costs to a fund in connection with bankruptcy proceedings),
the fund will engage in repurchase agreement transactions with parties
whose creditworthiness has been reviewed and found satisfactory by
FMR.
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, a 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 it may
be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to
develop, a fund might obtain a less favorable price than prevailed
when it decided to seek registration of the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. While a reverse repurchase
agreement is outstanding, a 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
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR. Such transactions may increase fluctuations in
the market value of fund assets and may be viewed as a form of
leverage.
SECURITIES LENDING. A 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 a 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 a
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 other
eligible securities. Investing this cash subjects that investment, as
well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when
it owns or has the right to obtain securities equivalent in kind or
amount to the securities sold short. Such short sales are known as
short sales "against the box." If a 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
expenses, in connection with opening, maintaining, and closing short
sales against the box.
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 a fund's exposure to long- or short-term interest
rates (in the United States 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.
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 a 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 a fund's investments
and its share price.
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 a 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.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
A fund will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap
agreements. If a 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 a 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.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
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 considers 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; the reasonableness of any
commissions; and , if applicable , arrangements for payment of
fund expenses .
If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contract"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges 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; and
the availability of securities or the purchasers or sellers of
securities. In addition, such broker-dealers may furnish analyses and
reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts;
and effect securities transactions and perform functions
incidental thereto (such as clearance and settlement) .
The selection of such broker-dealers for transactions in equity
securities 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 research and execution services provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering
investment management services to that 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 a fund. The
receipt of such research has not reduced FMR's normal independent
research activities; however, it enables FMR to avoid the additional
expenses that could be incurred if FMR tried to develop comparable
information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws,
the fund may pay a broker-dealer 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 that
fund or 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
National Financial Services Corporation (NFSC) and Fidelity Brokerage
Services Japan LLC (FBSJ), indirect subsidiaries of FMR Corp.,
if the commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers
(including affiliates of FMR) who have entered into
arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by a fund toward the
reduction of that fund's expenses . The transaction quality must,
however, be comparable to those of other qualified broker-dealers.
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, unless certain
requirements are satisfied. Pursuant to such requirements, the Board
of Trustees has authorized NFSC to execute portfolio transactions on
national securities exchanges in accordance with approved procedures
and applicable SEC rules.
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.
For the fiscal periods ended April 30, 1998 and 1997, the fund's
portfolio turnover rates were 88 % and 176 %,
respectively. Because a high turnover rate increases transaction costs
and may increase taxable gains, FMR carefully weighs the anticipated
benefits of short-term investing against these consequences.
Variations in turnover rate may be due to a
fluctuating volume of shareholder purchase and redemption
orders, market conditions , or changes in FMR's investment
outlook .
For the fiscal years ended April 1998, 1997, and 1996, the fund
paid brokerage commissions of $1,376,827, $1,684,536, and $821,475,
respectively. Significant changes in brokerage commissions paid by the
fund from year to year may result from changing asset levels
throughout the year. The fund may pay both commissions and spreads in
connection with the placement of portfolio transactions.
During the fiscal years ended April 1998, 1997, and 1996, the fund
paid brokerage commissions of $138,819, $101,852, and $55,409,
respectively, to NFSC. NFSC is paid on a commission basis. During the
fiscal year ended April 1998, this amounted to approximately 10.08% of
the aggregate brokerage commissions paid by the fund for transactions
involving approximately 12.55% of the aggregate dollar amount of
transactions for which the fund paid brokerage commissions. The
difference between the percentage of aggregate brokerage commissions
paid to, and the percentage of the aggregate dollar amount of
transactions effected through, NFSC is a result of the low commission
rates charged by NFSC.
During the fiscal year ended April, 1998, the fund paid $1,123,166
in brokerage commissions to firms that provided research services
involving approximately $605,018,402 of transactions. The provision of
research services was not necessarily a factor in the placement of all
this business with such firms.
The Trustees of the fund have approved procedures in conformity
with Rule 10f-3 under the 1940 Act whereby a fund may purchase
securities that are offered in underwritings in which an affiliate of
FMR participates. These procedures prohibit the fund from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the fund could purchase in the underwriting.
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 or its affiliates ,
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 and accounts are managed by the same
investment adviser, particularly when the same security is suitable
for the investment objective of more than one fund or account.
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 procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the 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
FSC normally determines the fund's net asset value per share
(NAV) as of the close of the New York Stock Exchange (NYSE)
(normally 4:00 p.m. Eastern time). The valuation of portfolio
securities is determined as of this time for the purpose of computing
the fund's NAV.
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most equity securities
for which the primary market is the United States are valued at last
sale price or, if no sale has occurred, at the closing bid price. Most
equity securities for which the primary market is outside the United
States are valued using the official closing price or the last sale
price in the principal market in which they are traded. If the last
sale price (on the local exchange) is unavailable, the last evaluated
quote or last bid price normally is used. Securities of other open-end
investment companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the fund may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the
close of the NYSE using the last quoted price on the local currency
and then translates the value of foreign securities from their local
currencies into U.S. dollars. Any changes in the value of forward
contracts due to exchange rate fluctuations and days to maturity are
included in the calculation of NAV. If an extraordinary event that is
expected to materially affect the value of a portfolio security occurs
after the close of an exchange on which that security is traded, then
that security will be valued as determined in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value. In addition, securities and other assets for which
there is no readily available market value may be valued in good faith
by a committee appointed by the Board of Trustees. The procedures set
forth above need not be used to determine the value of the securities
owned by the fund if, in the opinion of a committee appointed by the
Board of Trustees, some other method would more accurately reflect the
fair market value of such securities.
PERFORMANCE
The fund may quote 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 return 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 return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the fund's
NAV over a stated period. Average annual total 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 total return
of 100% over ten years would produce an average annual total return of
7.18%, which is the steady annual rate of return that would equal 100%
growth on a compounded basis in ten years. While average annual total
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
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total 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. Total returns may be quoted on a before-tax or
after-tax basis and may be quoted with or without taking the fund's
3.00% maximum sales charge into account and may or may not include the
effect of the fund's 1.50% short-term trading fee on shares held less
than 90 days. Excluding the fund's sales charge and short-term trading
fee from a total return calculation produces a higher total return
figure. Total returns, yields, 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. A 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. On
April 24, 1998, the 13-week and 39-week long-term moving averages were
$ 17.31 and $16.14 , respectively.
CALCULATING HISTORICAL FUND RESULTS. The following table shows
performance for the fund calculated including certain fund expenses.
The fund has a maximum front-end sales charge of 3.00% which is
included in the average annual and cumulative total returns.
Total returns do not include the effect of the fund's 1.50%
short-term trading fee, applicable to shares held less than 90
days.
HISTORICAL FUND RESULTS. The following table shows the
fund's total return for the periods ended April 30, 1998.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns

One Life of One Life of
Year Fund* Year Fund*

Small Cap Selector 45.70% 16.84% 45.70% 112.42%

</TABLE>

* From June 28, 1993 (commencement of operations).
The following table shows the income and capital elements of the
fund's cumulative total return. The table compares the fund's return
to the record of the Standard & Poor's 500 Index (S&P 500), the Dow
Jones Industrial Average (DJIA), and the cost of living, as measured
by the Consumer Price Index (CPI), over the same period. The CPI
information is as of the month-end closest to the initial investment
date for the fund. The S&P 500 and DJIA comparisons are provided to
show how the fund's total return compared to the record of a broad
unmanaged index of common stocks and a narrower set of stocks of major
industrial companies, respectively, over the same period. 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 indexes. The S&P 500 and DJIA returns are based on the prices of
unmanaged groups of stocks and, unlike the fund's returns, do not
include the effect of brokerage commissions or other costs of
investing.
During the period from June 28, 1993 (commencement of operations) to
April 30, 1998, a hypothetical $10,000 investment in Small Cap
Selector would have grown to $21,242, including the effect of the
fund's 3.00% sales charge and assuming all distributions were
reinvested. Total returns are based on past results and are not an
indication of future performance. Tax consequences of different
investments have not been factored into the figures below .

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SMALL CAP SELECTOR INDICES

Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
April 30 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions

1998 $ 17,567 $ 357 $ 3,318 $ 21,242 $ 27,537 $ 28,652 $ 11,253

1997 $ 12,668 $ 136 $ 1,338 $ 14,142 $ 19, 521 $ 2 1,791 $ 11,094

1996 $ 13,473 $ 134 $ 879 $ 14,486 $ 15, 600 $ 1 6,963 $ 10,824

1995 $ 10,602 $ 31 $ 40 $ 10,673 $ 1 1,980 $ 1 2,866 $ 10,519

1994* $ 10,292 $ 19 $ 39 $ 10,350 $ 10, 199 $ 10, 672 $ 10,208

</TABLE>

* From June 28, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in the fund
on June 28, 1993, assuming the 3.00% sales charge had been in effect,
the net amount invested in fund shares was $ 10,000 . The cost of
the initial investment ($10,000) together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested) amounted
to $12,842. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller,
and cash payments for the period would have amounted to $243 for
dividends and $2,386 for capital gain distributions. The figures in
the table do not include the effect of the fund's 1.50% short-term
trading fee applicable to shares held less than 90 days.
PERFORMANCE COMPARISONS. The fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Generally, Lipper rankings
are based on total return, assume reinvestment of distributions, do
not take sales charges or trading fees into consideration, and are
prepared without regard to tax consequences. In addition to the mutual
fund rankings, the fund's performance may be compared to stock, bond,
and money market mutual fund performance indices prepared by Lipper or
other organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, the fund's performance may also 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. 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.
The fund's performance may also be compared to that of a benchmark
index representing the universe of securities in which the fund may
invest. The total return of a benchmark index reflects reinvestment of
all dividends and capital gains paid by securities included in the
index. Unlike the fund's returns, however, the index returns do not
reflect brokerage commissions, transaction fees, or other costs of
investing directly in the securities included in the index.
The fund may compare its performance to that of the Russell
2000(registered trademark) Index, an unmanaged index of 2,000 small
company stocks.
The fund may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, the fund may offer greater liquidity or higher
potential returns than CDs, the fund does not guarantee your principal
or your return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
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.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
The fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
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 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 $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of April 30, 1998, FMR advised over $ 30 billion in
municipal fund assets, $ 103 billion in money market fund
assets, $ 454 billion in equity fund assets, $ 73 billion
in international fund assets, and $ 29 billion in Spartan fund
assets. The fund may reference the growth and variety of money market
mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management 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. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the
purpose of researching and managing investments abroad.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to
waive the fund's front-end 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, FDC has chosen to waive the fund's
front-end sales charge in certain instances due to sales efficiencies
and competitive considerations. The sales charge will not apply:
1. to shares purchased in connection with 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 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 account purchased (including purchases by
exchange) with the proceeds of a distribution from an employee benefit
plan provided that: (i) at the time of the 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) either
(a) the distribution is transferred from the plan to a Fidelity IRA
account within 60 days from the date of the distribution or (b) the
distribution is transferred directly from the plan into another
Fidelity account;
4. to shares purchased by a charitable organization (as defined for
purposes of Section 501(c)(3) of the Internal Revenue Code) investing
$100,000 or more;
5. to shares purchased for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as
defined for purposes of Section 501(c)(3) of the Internal Revenue
Code);
6. to shares purchased by an investor participating in the Fidelity
Trust Portfolios program (these investors must make initial
investments of $100,000 or more in the 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 by a mutual fund or a qualified state
tuition program for which FMR or an affiliate serves as investment
manager;
8. to shares purchased through Portfolio Advisory Services SM or
Fidelity Charitable Advisory Services;
9. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular
employee of FMR Corp. or Fidelity International Limited or their
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; or
10. to shares purchased by 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
11. 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 Traditional
IRA, The Fidelity Roth IRA, The Fidelity Roth Conversion IRA, The
Fidelity Rollover IRA, The Fidelity SEP-IRA and SARSEP, The Fidelity
SIMPLE IRA, 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);
12. to shares purchased as part of a pension or profit-sharing plan as
defined in Section 401(a) of the Internal Revenue Code that maintains
all of its mutual fund assets in Fidelity mutual funds, provided the
plan executes a Fidelity non-prototype sales charge waiver request
form confirming its qualification;
13. to shares purchased by a registered investment adviser (RIA) for
his or her discretionary accounts, provided he or she executes 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, unless
purchased through a brokerage firm which is a correspondent of
National Financial Services Corporation (NFSC). The waiver is
unavailable, however, if the RIA is part of an organization
principally engaged in the brokerage business, unless the brokerage
firm in the organization is an NFSC correspondent; or
14. to shares purchased by a trust institution or bank trust
department for its non-discretionary, non-retirement fiduciary
accounts, provided it executes 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.
The fund's sales charge may be reduced to reflect sales charges
previously paid, or that would have been paid absent a reduction for
some purchases made directly with Fidelity as noted in the prospectus,
in connection with investments in other Fidelity funds. This includes
reductions for investments in prototype-like retirement plans
sponsored by FMR or FMR Corp., which are listed above.
The fund is open for business and its NAV is calculated each day the
New York Stock Exchange (NYSE) is open for trading. The NYSE has
designated the following holiday closings for 1998: New Year's Day,
Martin Luther King's Birthday, Presidents' Day, Good Friday, Memorial
Day, 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. In addition, on days when the Federal Reserve Wire System is
closed, federal funds wires cannot be sent.
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. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
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 the 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, the 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 administrative 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 the rules
and regulations thereunder, 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
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
securities 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. If the fund's distributions exceed its net investment
company taxable income during a taxable year, all or a portion of the
distributions made in the same taxable year would be recharacterized
as a return of capital to shareholders, thereby reducing each
shareholder's cost basis in the fund. Short-term capital gains are
distributed as dividend income. 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 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 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.
As of April 30, 1998, the fund hereby designates approximately
$ 35,318,000 as a capital gain dividend for the purpose of the
dividend-paid deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments
may also impose taxes on other payments or gains 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, and intends to comply with
other tax rules applicable to regulated investment companies.
The fund is treated as a separate entity from the other funds of
Fidelity Commonwealth Trust for tax purposes.
If a 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 a fund with
respect to deferred taxes arising from such distributions or gains.
Generally, the fund will elect to mark-to-market any PFIC shares.
Unrealized gains will be recognized as income for tax purposes and
must be distributed to shareholders as dividends.
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 fund distributions, and shares may
be subject to state and local personal property taxes. Investors
should consult their tax advisers to determine whether a fund is
suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures
for personal investing and restricts certain transactions. For
example, all personal trades in most securities require pre-clearance,
and participation in initial public offerings is prohibited. In
addition, restrictions on the timing of personal investing in relation
to trades by Fidelity funds and on short-term trading have been
adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, 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 and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR. The business address of each Trustee, Member of the
Advisory Board, and officer who is an "interested person" (as defined
in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The
business address of all the other Trustees is Fidelity Investments,
P.O. Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who
are "interested persons" by virtue of their affiliation with either
the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (67), 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 Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
*J. GARY BURKHEAD (56), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
RALPH F. COX (65), Trustee, is President of RABAR Enterprises
(management consulting - engineering industry, 1994). Prior to
February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources
Company (exploration and production). He is a Director of USA Waste
Services, Inc. (non-hazardous waste, 1993), CH2M Hill Companies
(engineering), Rio Grande, Inc. (oil and gas production), and Daniel
Industries (petroleum measurement equipment manufacturer). In
addition, he is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (66), Trustee. Prior to her retirement in
September 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),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont School
of Business Administration.
ROBERT M. GATES (54), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is Director of LucasVarity PLC (automotive
components and diesel engines), Charles Stark Draper Laboratory
(non-profit), NACCO Industries, Inc. (mining and manufacturing), and
TRW Inc. (original equipment and replacement products). Mr. Gates also
is a Trustee of the Forum for International Policy and of the
Endowment Association of the College of William and Mary. In addition,
he is a member of the National Executive Board of the Boy Scouts of
America.
E. BRADLEY JONES (70), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a
Trustee of First Union Real Estate Investments. In addition, he serves
as a Trustee of the Cleveland Clinic Foundation, where he has also
been a member of the Executive Committee as well as Chairman of the
Board and President, a Trustee and member of the Executive Committee
of University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (65), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of the National Arts Stabilization Fund, Chairman
of the Board of Trustees of the Greenwich Hospital Association,
Director of the Yale-New Haven Health Services Corp. (1998 ), a
Member of the Public Oversight Board of the American Institute of
Certified Public Accountants' SEC Practice Section (1995), and as a
Public Governor of the National Association of Securities Dealers,
Inc. (1996).
*PETER S. LYNCH (55), Trustee, is Vice Chairman and Director of FMR.
Prior to May 31, 1990, he was a Director of FMR 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). 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.
WILLIAM O. McCOY (64), Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (69), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal products, 1992), CUNO,
Inc. (liquid and gas filtration products, 1996), and Associated
Estates Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (65), Trustee (1993), is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997), and
Infomart (marketing services, 1991), a Trammell Crow Co. In addition,
he serves as the Campaign Vice Chairman of the Tri-State United Way
(1993) and is a member of the University of Alabama President's
Cabinet.
*ROBERT C. POZEN (51), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (69), Trustee, 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 ConAgra, Inc. (agricultural products), Georgia Power Company
(electric utility), National Life Insurance Company of Vermont,
American Software, Inc., and AppleSouth, Inc. (restaurants, 1992).
ROBERT A. LAWRENCE (45), is Vice President of certain Equity Funds
(1997), Vice President of Fidelity Real Estate High Income Fund (1995)
and Fidelity Real Estate High Income Fund II (1996), and Senior Vice
President of FMR (1993).
BRADFORD F. LEWIS (42), is Vice President of Fidelity Small Cap
Selector (1994) and other funds advised by FMR. Prior to his current
responsibilities, Mr. Lewis managed a variety of Fidelity funds.
ERIC D. ROITER (49), Secretary (1998), is Vice President (1998) and
General Counsel of FMR (1998). Mr. Roiter was an Adjunct Member,
Faculty of Law, at Columbia University Law School (1996-1997). Prior
to joining Fidelity, Mr. Roiter was a partner at Debevoise & Plimpton
(1981-1997) and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981).
RICHARD A. SILVER (51), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration
at First Data Investor Services Group, Inc. (1996-1997). Prior to
1996, Mr. Silver was Senior Vice President and Chief Financial Officer
at The Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
JOHN H. COSTELLO (51), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of the fund for his
or her services for the fiscal year ended April 30, 1998, or calendar
year ended December 31, 1997, as applicable.
COMPENSATION TABLE

<TABLE>
<CAPTION>
<S> <C> <C>
Trustees and Aggregate Total Compensation
Members of the Advisory Board Compensation from from the
Small Cap Selector B Fund Complex*,A

J. Gary Burkhead** $ 0 $ 0

Ralph F. Cox 266 214,500

Phyllis Burke Davis 266 210,000

Robert M. Gates*** 270 176,000

Edward C. Johnson 3d** 0 0

E. Bradley Jones 266 211,500

Donald J. Kirk 266 211,500

Peter S. Lynch** 0 0

William O. McCoy**** 270 214,500

Gerald C. McDonough 331 264,500

Marvin L. Mann 261 214,500

Robert C. Pozen** 0 0

Thomas R. Williams 266 214,500

</TABLE>

* Information is for the calendar year ended December 31, 1997 for 230
funds in the complex.
** Interested Trustees of the fund and Mr. Burkhead are compensated by
FMR.
*** Mr. Gates was appointed to the Board of Trustees of Fidelity
Commonwealth Trust effective March 1, 1997.
**** Mr. McCoy was appointed to the Board of Trustees of Fidelity
Commonwealth Trust effective January 1, 1997.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $62,500; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,699; Marvin L. Mann, $53,699; and Thomas R.
Williams, $62,462.
B Compensation figures include cash.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
As of April 30, 1998 , the Trustees, Members of the Advisory
Board, and officers of the fund owned, in the aggregate, less than
1 % of the fund's total outstanding shares.
MANAGEMENT CONTRACT
FMR is the fund's manager pursuant to a management contract dated
November 1, 1994, which was approved by shareholders on October 26,
1994.
MANAGEMENT SERVICES. The fund employs FMR to furnish investment
advisory and other services. Under the terms of 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,
compensates all officers of the fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of the
fund 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 securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for the fund; and furnishing
reports, evaluations, and analyses on a variety of subjects to the
Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, pricing and bookkeeping agent, and
securities lending agent, as applicable, the fund pays all of its
expenses that are not assumed by those parties. The fund pays for the
typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the custodian, auditor
and non-interested Trustees. The fund's management contract further
provides that the fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices, and
reports to shareholders; however, under the terms of the fund's
transfer agent agreement, the transfer agent bears the costs 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
securities laws and making necessary filings under state securities
laws. The fund is also liable for such non-recurring 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 its officers and
Trustees with respect to litigation.
MANAGEMENT FEE. For the services of FMR under the management contract,
the fund pays FMR a monthly management fee which has two components: a
basic fee, which is the sum of a group fee rate and an individual fund
fee rate, and a performance adjustment based on a comparison of the
fund's performance to that of the Russell 2000.
On January 1, 1996, FMR voluntarily modified the breakpoints in the
group fee rate schedule. The revised group fee rate schedule, depicted
below, provides for lower management fee rates as FMR's assets under
management increase.
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.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Annualized Group Net Effective Annual Fee
Assets Rate Assets Rate

0 - $3 billion .5200% $ 0.5 billion .5200%

3 - 6 .4900 25 .4238

6 - 9 .4600 50 .3823

9 - 12 .4300 75 .3626

12 - 15 .4000 100 .3512

15 - 18 .3850 125 .3430

18 - 21 .3700 150 .3371

21 - 24 .3600 175 .3325

24 - 30 .3500 200 .3284

30 - 36 .3450 225 .3249

36 - 42 .3400 250 .3219

42 - 48 .3350 275 .3190

48 - 66 .3250 300 .3163

66 - 84 .3200 325 .3137

84 - 102 .3150 350 .3113

102 - 138 .3100 375 .3090

138 - 174 .3050 400 .3067

174 - 210 .3000 425 .3046

210 - 246 .2950 450 .3024

246 - 282 .2900 475 .3003

282 - 318 .2850 500 .2982

318 - 354 .2800 525 .2962

354 - 390 .2750 550 .2942

390 - 426 .2700

426 - 462 .2650

462 - 498 .2600

498 - 534 .2550

Over 534 .2500

The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $ 626 billion of group net assets - the approximate
level for April 1998 - was .2888 %, which is the weighted
average of the respective fee rates for each level of group net assets
up to $ 626 billion.
The fund's individual fund fee rate is 0.35%. Based on the average
group net assets of the funds advised by FMR for April 1998, the
fund's annual basic fee rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate

Small Cap Selector 0. 2888 % + 0.35% = 0. 6388 %

</TABLE>

One-twelfth of this annual basic fee rate is applied to the fund's net
assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee for the fund 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 (the
Index) over the same period. The performance period consists of the
most recent month plus the previous 35 months.
Each percentage point of difference, calculated to the nearest 1.00%
(up to a maximum difference of (plus/minus)10.00) is multiplied by a
performance adjustment rate of 0.02%.
The 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 maximum annualized adjustment rate is (plus/minus)0.20% of the
fund's average net assets over the performance period.
The fund's performance is calculated based on change in NAV. 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 NAV as of the record date for
payment. The record of the Index is based on change in value and is
adjusted for any cash distributions from the companies whose
securities compose the Index.
Because the adjustment to the basic fee is based on the fund's
performance compared to the investment record of the Index, 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 Index. 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.
For the fiscal years ended April 30, 1998, 1997, and 1996, the fund
paid FMR management fees of $4,884,701, $2,993,150, and $2,894,286,
respectively. The amount of these management fees include both the
basic fee and the amount of the performance adjustment, if any. For
the fiscal year ended April 30, 1998, the upward performance
adjustment amounted to $198,079. For the fiscal years ended April 30,
1997, and 1996, the downward performance adjustments amounted to
$589,830 and $396,361, respectively.
FMR may, from time to time, voluntarily reimburse all or a portion of
the fund's operating expenses (exclusive of interest, taxes,
brokerage commissions , and extraordinary expenses), which is
subject to revision or termination . FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses
fall below the limit prior to the end of the fiscal year.
Expense reimbursements by FMR will increase the fund's total returns,
and repayment of the reimbursement by the fund will lower its total
returns.
SUB-ADVISERS. On behalf of the fund, FMR has entered into sub-advisory
agreements with FMR U.K. and FMR Far East. Pursuant to the
sub-advisory agreements, FMR may receive investment advice and
research services outside the United States from the sub-advisers.
On behalf of the fund, FMR may also grant the sub-advisers investment
management authority as well as the authority to buy and sell
securities if FMR believes it would be beneficial to the fund.
Currently, FMR U.K. and FMR Far East each focus on issuers in
countries other than the United States such as those in Europe, Asia,
and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly
owned subsidiaries of FMR. Under the sub-advisory agreements FMR pays
the fees of FMR U.K. and FMR Far East. For providing non-discretionary
investment advice and research services, FMR pays FMR U.K. and FMR Far
East fees equal to 110% and 105%, respectively, of FMR U.K.'s and FMR
Far East's costs incurred in connection with providing investment
advice and research services.
On behalf of the fund, for providing discretionary investment
management and executing portfolio transactions, FMR pays FMR U.K. and
FMR Far East a fee equal to 50% of its monthly management fee rate
(including any performance adjustment) with respect to the fund's
average net assets managed by the sub-adviser on a discretionary
basis.
For providing investment advice and research services, fees paid to
the sub-advisers by FMR for the past three fiscal years are shown in
the table below.
Fiscal Year Ended FMR U.K. FMR Far East
April 30

1998 $ 13,937 $ 13,868

1997 $ 4,107 $ 3,645

1996 $ 2,057 $ 2,327

For discretionary investment management and execution of portfolio
transactions, no fees were paid to the sub-advisers by FMR on behalf
of the fund for the past three fiscal years.
CONTRACTS WITH FMR AFFILIATES
The fund has entered into a transfer agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreement, FSC performs
transfer agency, dividend disbursing, and shareholder services for the
fund.
For providing transfer agency services, FSC receives an account fee
and an asset-based fee each paid monthly with respect to each account
in the fund. For retail accounts and certain institutional accounts,
these fees are based on account size and fund type. For certain
institutional retirement accounts, these fees are based on fund type.
For certain other institutional retirement accounts, these fees are
based on account type (i.e., omnibus or non-omnibus) and, for
non-omnibus accounts, fund type. The account fees are subject to
increase based on postage rate changes.
The asset-based fees are subject to adjustment if the year-to-date
total return of the S&P 500 exceeds a positive or negative 15%.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in a qualified state
tuition program (QSTP), as defined under the Small Business Job
Protection Act of 1996, managed by FMR or an affiliate and each
Fidelity Freedom Fund, a fund of funds managed by an FMR affiliate,
according to the percentage of the QSTP's or Freedom Fund's
assets that is invested in the fund.
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
existing shareholders, with the exception of proxy statements.
The fund has also entered into a service agent agreement with FSC.
Under the terms of the agreement, FSC calculates the NAV and dividends
for the fund, maintains the fund's portfolio and general accounting
records, and administers the fund's securities lending program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on the fund's average daily net assets throughout the month.
The annual fee rates for pricing and bookkeeping services are
.0600% of the first $500 million of average net assets and .0300%
of the average net assets in excess of $500 million. The fee, not
including reimbursement for out-of-pocket expenses, is limited to a
minimum of $60,000 and a maximum of $800,000 per year.
For the fiscal years ended April 30, 1998, 1997, and 1996, the fund
paid FSC pricing and bookkeeping fees, including reimbursement for
related out-of-pocket expenses, of $ 369,607 , $ 316,067, and
$290,735 , respectively.
For administering the fund's securities lending program, FSC receives
fees based on the number and duration of individual securities loans.
For the fiscal years ended April 30, 1998, 1997, and 1996, the fund
paid no securities lending fees.
The fund has entered into a distribution agreement with FDC, an
affiliate of FMR organized as a Massachusetts corporation on July 18,
1960. FDC is a broker-dealer registered under the Securities Exchange
Act of 1934 and 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 FMR.
During the fiscal years ended April 30, 1998, 1997, and 1996, FDC
collected sales charge revenue of $ 927,979 (of which $926,980 was
retained) , $517,712, and $846,604 , respectively, on
purchases of fund shares .
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Small Cap Selector is a fund of Fidelity
Commonwealth Trust, an open-end management investment company
organized as a Massachusetts business trust on November 8, 1974, under
the name Fidelity Investors Trust. On April 11, 1975, the trust's name
was changed from Fidelity Investors Trust to Fidelity Thrift Trust. 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 five funds of the
trust: Fidelity Intermediate Bond Fund, Fidelity Market Index Fund,
Fidelity Small Cap Selector, Fidelity Small Cap Stock Fund, and
Fidelity Large 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. As a shareholder, you receive one vote for each dollar value
of net asset value you own. 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
trust or the fund, as determined by the current value of each
shareholder's investment in the fund or trust. If not so terminated,
the trust and its funds will continue indefinitely. Each fund may
invest all of its assets in another investment company.
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 a fund's assets and the appointment
of any subcustodian banks and clearing agencies. The custodian takes
no part in determining the investment policies of a fund or in
deciding which securities are purchased or sold by a fund. However, a
fund may invest in obligations of the custodian and may purchase
securities from or sell securities to the custodian. The Bank of New
York and The Chase Manhattan Bank, each headquartered in New York,
also may serve as special purpose custodians of certain assets in
connection with repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the
Board of Trustees may, from time to time, conduct transactions with
various banks, including banks serving as custodians for certain 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 L.L.P ., One Post Office Square,
Boston, Massachusetts serves as the fund's independent accountant. The
auditor examines financial statements for the fund and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the
fiscal year ended April 30, 1998, and report of the auditor, are
included in the fund's Annual Report, which is a separate report
supplied with this SAI. The fund's financial statements, including the
financial highlights, and report of the auditor are incorporated
herein by reference. For a free additional copy of the fund's Annual
Report, contact Fidelity at 1-800-544-8888.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF CORPORATE BONDS
Moody's ratings for obligations with an original remaining maturity in
excess of one year fall within nine categories. They range from Aaa
(highest quality) to C (lowest quality). Moody's applies numerical
modifiers of 1, 2, or 3 to each generic rating classification from Aa
through B. The modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks
on the lower end of its generic rating category.
AAA - Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than the Aaa securities.
A - Bonds that are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future.
BAA - Bonds that are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
BA - Bonds that are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B - Bonds that are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
CAA - Bonds that are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect
to principal or interest.
CA - Bonds that are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked short-comings.
C - Bonds that are rated C are the lowest-rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF CORPORATE BONDS
Debt issues may be designated by Standard & Poor's as either
investment grade ("AAA" through "BBB") or speculative grade ("BB"
through "D"). While speculative grade debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major exposures to adverse conditions. Ratings from
AA to CCC may be modified by the addition of a plus sign (+) or minus
sign (-) to show relative standing within the major rating categories.
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher-rated issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher-rated categories.
BB - Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments. The BB rating category is also used
for debt subordinated to senior debt that is assigned an actual or
implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal. The B
rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial, and
economic conditions to meet timely payment of interest and repayment
of principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or
B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC- debt rating. The C
rating may be used to cover a situation where a bankruptcy petition
has been filed but debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest
is being paid.
D - Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
D rating will also be used upon the filing of a bankruptcy petition if
debt service payments are jeopardized.
FIDELITY AND FIDELITY FOCUS ARE REGISTERED TRADEMARKS OF FMR
CORP.
PORTFOLIO ADVISORY SERVICES IS A REGISTERED SERVICE MARK OF FMR
CORP.
THE THIRD PARTY MARKS APPEARING ABOVE ARE THE MARKS OF THEIR
RESPECTIVE OWNERS.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) 1. Financial Statements and Financial Highlights, included in
Fidelity Intermediate Bond Fund's Annual Report for the fiscal year
ended April 30, 1998 are incorporated by reference in the fund's
Statement of Additional Information and were filed on June 15, 1998
for Fidelity Commonwealth Trust (File No. 811-2546) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated
herein by reference.
2. Financial Statements and Financial Highlights, included in
Spartan Market Index Fund's Annual Report for the fiscal year ended
April 30, 1998 are incorporated by reference in the fund's Statement
of Additional Information and were filed on June 15, 1998 for Fidelity
Commonwealth Trust (File No. 811-2546) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
3. Financial Statements and Financial Highlights, included in
Fidelity Small Cap Selector's Annual Report for the fiscal year ended
April 30, 1998 are incorporated by reference in the fund's Statement
of Additional Information and were filed on June 15, 1998 for Fidelity
Commonwealth Trust (File No. 811-2546) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
4. Financial Statements and Financial Highlights, included in
Fidelity Large Cap Stock Fund's Annual Report for the fiscal year
ended April 30, 1998 are incorporated by reference in the fund's
Statement of Additional Information and were filed on June 15, 1998
for Fidelity Commonwealth Trust (File No. 811-2546) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated
herein by reference.
5. Financial Statements and Financial Highlights, included in
Fidelity Small Cap Stock Fund's Annual Report for the fiscal year
ended April 30, 1998 are incorporated by reference in the fund's
Statement of Additional Information and were filed on June 15, 1998
for Fidelity Commonwealth Trust (File No. 811-2546) pursuant to Rule
30d-1 under the Investment Company Act of 1940 and are incorporated
herein by reference.
(b) Exhibits
1. (a) Amended and Restated Declaration of Trust, dated June 16,
1994, is incorporated herein by reference to Exhibit 1(a) of
Post-Effective Amendment No. 53.
(b) Supplement to the Declaration of Trust, dated June 6, 1997, is
incorporated herein by reference to Exhibit 1(b) of Post-Effective
Amendment No. 62.
2. Bylaws of Trust, as amended, are incorporated herein by reference
to Exhibit 2(a) to Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
3. Not Applicable.
4. Not Applicable.
5. (a) Management Contract, dated December 1, 1994, between Fidelity
Commonwealth Trust, on behalf of Fidelity Intermediate Bond Fund, and
Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 5(a) of Post-Effective Amendment No. 56.
(b) Management Contract, dated December 1, 1997, between Fidelity
Commonwealth Trust, on behalf of Spartan Market Index Fund, and
Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 5(b) of Post-Effective Amendment No. 65.
(c) Management Contract, dated November 1, 1994, between Fidelity
Commonwealth Trust, on behalf of Fidelity Small Cap Stock Fund
(currently known as Fidelity Small Cap Selector), and Fidelity
Management & Research Company is incorporated herein by reference to
Exhibit 5(c) of Post-Effective Amendment No. 56.
(d) Management Contract, dated May 18, 1995, between Fidelity
Commonwealth Trust, on behalf of Fidelity Large Cap Stock Fund, and
Fidelity Management & Research Company, is incorporated herein by
reference to Exhibit 5(d) of Post-Effective Amendment No. 57.
(e) Management Contract, dated February 19, 1998, 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(e) of Post-Effective Amendment No. 65.
(f) Sub-Advisory Agreement, dated December 1, 1994, between Fidelity
Management & Research Company, Fidelity Management & Research (U.K.)
Inc. and Fidelity Commonwealth Trust on behalf of Fidelity
Intermediate Bond Fund is incorporated herein by reference to Exhibit
5(e) of Post-Effective Amendment No. 56.
(g) Sub-Advisory Agreement, dated December 1, 1994, between Fidelity
Management & Research Company, Fidelity Management & Research (Far
East) Inc. and Fidelity Commonwealth Trust on behalf of Fidelity
Intermediate Bond Fund is incorporated herein by reference to Exhibit
5(f) of Post-Effective Amendment No. 56.
(h) Sub-Advisory Agreement, dated June 17, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc. on behalf of Fidelity Small Cap Stock Fund (currently
known as Fidelity Small Cap Selector) is incorporated herein by
reference to Exhibit 5(f) of Post-Effective Amendment No. 50.
(i) Sub-Advisory Agreement, dated June 17, 1993, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Small Cap Stock Fund (currently known
as Fidelity Small Cap Selector) is incorporated herein by reference to
Exhibit 5(g) of Post-Effective Amendment No. 50.
(j) Sub-Advisory Agreement, dated May 18, 1995, between Fidelity
Management & Research Company, Fidelity Management & Research (U.K.)
Inc. and Fidelity Commonwealth Trust on behalf of Fidelity Large Cap
Stock Fund is incorporated herein by reference to Exhibit 5(i) of
Post-Effective Amendment No. 57.
(k) Sub-Advisory Agreement, dated May 18, 1995, between Fidelity
Management & Research Company, Fidelity Management & Research (Far
East) Inc. and Fidelity Commonwealth Trust on behalf of Fidelity Large
Cap Stock Fund is incorporated herein by reference to Exhibit 5(j) of
Post-Effective Amendment No. 57.
(l) Sub-Advisory Agreement, dated February 19, 1998, between
Fidelity Management & Research Company, Fidelity Management & Research
(U.K.) Inc. and Fidelity Commonwealth Trust on behalf of Fidelity
Small Cap Stock Fund is incorporated herein by reference to Exhibit
5(l) of Post-Effective Amendment No. 65.
(m) Sub-Advisory Agreement, dated February 19, 1998, between
Fidelity Management & Research Company, Fidelity Management & Research
(Far East) Inc. and Fidelity Commonwealth Trust on behalf of Fidelity
Small Cap Stock Fund is incorporated herein by reference to Exhibit
5(m) of Post-Effective Amendment No. 65.
(n) Sub-Advisory Agreement and Appendix A between Fidelity
Management & Research Company, Bankers Trust Company, and Fidelity
Commonwealth Trust, on behalf of Spartan Market Index Fund, dated
December 1, 1997, is incorporated herein by reference to Exhibit 5(n)
of Post-Effective Amendment No. 65.
6. (a) General Distribution Agreement, dated April 1, 1987, between
Fidelity Intermediate Bond Fund and Fidelity Distributors Corporation
is incorporated herein by reference to Exhibit 6(a) of Post-Effective
Amendment No. 57.
(b) Amendment to General Distribution Agreement, dated January 1,
1988, between Fidelity Intermediate Bond Fund and Fidelity
Distributors Corporation is incorporated herein by reference to
Exhibit 6(b) of Post-Effective Amendment No. 57.
(c) General Distribution Agreement, dated February 15, 1990, between
Spartan Market Index Fund and Fidelity Distributors Corporation is
incorporated herein by reference to Exhibit 6(c) of Post-Effective
Amendment No. 57.
(d) General Distribution Agreement, dated June 17, 1993, between
Fidelity Commonwealth Trust with respect to Fidelity Small Cap Stock
Fund (currently known as Fidelity Small Cap Selector) and Fidelity
Distributors Corporation is incorporated herein by reference to
Exhibit 6(d) of Post-Effective Amendment No. 50.
(e) General Distribution Agreement, dated May 18, 1995, between
Fidelity Commonwealth Trust with respect to Fidelity Large Cap Stock
Fund and Fidelity Distributors Corporation is incorporated herein by
reference to Exhibit 6(e) of Post-Effective Amendment No. 57.
(f) General Distribution Agreement, dated February 19, 1998, between
Fidelity Commonwealth Trust with respect to Fidelity Small Cap Stock
Fund and Fidelity Distributors Corporation is incorporated herein by
reference to Exhibit 6(f) of Post-Effective Amendment No. 65.
(g) Amendments to General Distribution Agreement between Fidelity
Commonwealth Trust on behalf of Fidelity Intermediate Bond Fund,
Spartan Market Index Fund and Fidelity Large Cap Stock Fund, and
Fidelity Distributors Corporation, dated March 14, 1996 and July 15,
1996, are incorporated herein by reference to Exhibit 6(a) of Fidelity
Court Street Trust's (File No. 2-58774) Post Effective Amendment No.
61.
(h) Amendments to General Distribution Agreement between Fidelity
Commonwealth Trust on behalf of Fidelity Small Cap Stock Fund
(currently known as Fidelity Small Cap Selector) and Fidelity
Distributors Corporation, dated March 14, 1996, and July 15, 1996, are
incorporated herein by reference to Exhibit 6(l) of Fidelity Select
Portfolios' (File No. 2-69972) Post-Effective Amendment No. 57.
(i) Form of Bank Agency Agreement (most recently revised January,
1997) is filed herein as Exhibit 6(i).
(j) Form of Selling Dealer Agreement for Bank-Related Transactions
(most recently revised January, 1997) is filed herein as Exhibit 6(j).
7. (a) Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners, as amended on November 16, 1995, is
incorporated herein by reference to Exhibit 7(a) of Fidelity Select
Portfolio's (File No. 2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, ef- fective as of September 14, 1995
and amended through November 14, 1996, is incorporated herein by
reference to Exhibit 7(b) of Fidelity Aberdeen Street Trust's (File
No. 33-43529) Post-Effective Amendment No. 19.
8. (a) Custodian Agreement and Appendix C, dated September 1, 1994,
between Brown Brothers Harri- man & Company and Fidelity
Commonwealth Trust on behalf of Fidelity Small Cap Stock Fund
(currently known as Fidelity Small Cap Selector), and Fidelity Large
Cap Stock Fund is incorpo- rated herein by reference to Exhibit 8(a)
of Post-Effective Amendment No. 56.
(b) Appendix A, dated October 16, 1997, to the Custodian Agreement,
dated September 1, 1994, be- tween Brown Brothers Harriman & Company
and Fidelity Commonwealth Trust on behalf of Fi- delity Small Cap
Stock Fund (currently known as Fidelity Small Cap Selector), and
Fidelity Large Cap Stock Fund is incorporated herein by reference
to Exhibit 8(b) of Fidelity Contrafund's (File No. 2-25235)
Post-Effective Amendment No. 50.
(c) Appendix B, dated September 18, 1997, to the Custodian
Agreement, dated September 1, 1994, between Brown
Brothers Harriman & Company and Fidelity Commonwealth Trust on behalf
of Fidelity Small Cap Stock Fund (currently known as Fidelity Small
Cap Selector), and Fidelity Large Cap Stock Fund is incorporated
herein by reference to Exhibit 8(c) of Fidelity Contrafund's (File
No. 2-25235) Post-Effective Amendment No. 50.
(d) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and Fidelity Commonwealth Trust
on behalf of Fidelity Intermediate Bond Fund is incorporated
herein by reference to Exhibit 8(a) of Fidelity Hereford Street
Trust's (File No. 33-52577) Post-Ef- fective Amendment No. 4.
(e) Appendix A, dated September 18, 1997, to the Custodian
Agreement, dated December 1, 1994, be- tween The Bank of New York
and Fidelity Commonwealth Trust on behalf of Fidelity Intermedi- ate
Bond Fund is incorporated herein by reference to Exhibit 8(e) of
Fidelity Charles Street Trust's (File No. 2-73133) Post-Effective
Amendment No. 62.
(f) Appendix B, dated September 18, 1997, to the Custodian
Agreement, dated December 1, 1994, between The Bank of
New York and Fidelity Commonwealth Trust on behalf of Fidelity Inter-
mediate Bond Fund is incorporated herein by reference to Exhibit 8(f)
of Fidelity Charles Street Trust's (File No. 2-73133)
Post-Effective Amendment No. 62.
(g) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securi- ties, Inc., and the Registrant, dated
February 12, 1996, is incorporated herein by reference to Ex- hibit
8(d) of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(h) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and the Registrant, dated February 12,
1996, is incorporated herein by reference to Exhibit 8(e) of Fi-
delity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(i) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and the Registrant, dated November
13, 1995, is incorporated herein by reference to Exhibit 8(f) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(j) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and the Registrant, dated November 13, 1995,
is incorporated herein by reference to Exhibit 8(g) of Fidel- ity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(k) Joint Trading Account Custody Agreement between The Bank of New
York and the Registrant, dated May 11, 1995, is incorporated herein
by reference to Exhibit 8(h) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(l) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and the Registrant, dated July 14,
1995, is incorporated herein by reference to Exhibit 8(i) of Fi-
delity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(m) Forms of Fidelity Group Repo Custodian Agreement and Schedule 1
among The Bank of New York, J. P. Morgan Securities, Inc., and
Fidelity Commonwealth Trust on behalf of Fidelity Small Cap Stock
Fund are filed herein as Exhibit 8(m).
(n) Forms of Fidelity Group Repo Custodian Agreement and Schedule 1
among Chemical Bank, Greenwich Capital Markets, Inc., and Fidelity
Commonwealth Trust on behalf of Fidelity Small Cap Stock Fund are
filed herein as Exhibit 8(n).
(o) Forms of Joint Trading Account Custody Agreement and First
Amendment to Joint Trading Ac- count Custody Agreement between The
Bank of New York and Fidelity Commonwealth Trust on behalf of
Fidelity Small Cap Stock Fund are filed herein as Exhibit 8(o).
(p) Form of Custodian Agreement and Appendix B and C, between Brown
Brothers Harriman & Company and Fidelity Commonwealth Trust on
behalf of Fidelity Small Cap Stock Fund is filed herein as Exhibit
8(p).
(q) Custodian Agreement, Appendix A and Appendix C, dated November
5, 1997, between Bankers Trust Company and the Registrant, on
behalf of Spartan Market Index Fund, is incorporated herein by
reference to Exhibit 8(q) of Post-Effective Amendment No. 65.
(r) Appendix B, dated December 17, 1997, between Bankers Trust
Company and the Registrant, on behalf of Spartan Market Index Fund,
is incorporated herein by reference to Exhibit 8(r) of Post-
Effective Amendment No. 65.
9. Not applicable.
10. Not applicable.
11. Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit
11.
12. Not applicable.
13. Not applicable.
14. (a) Fidelity Individual Retirement Account Custodial Agreement
and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(a) of Fidelity Union Street Trust's
(File No. 2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity Union
Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(h) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(i) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) of Fidelity Union
Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit
14(l) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit
14(m) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial
Account Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post Effective Amendment No.
57.
(j) Plymouth Investments Defined Contribution Retirement Plan and
Trust Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(o) of Fidelity Commonwealth Trust's (File No.
2-52322) Post Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust
Basic Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity
Securities Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document,
Standardized Adoption Agreement, and Non-Standardized Adoption
Agreement, as currently in effect, is incorporated herein by reference
to Exhibit 14(o) of Fidelity Securities Fund's (File No. 2-93601) Post
Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k)
Basic Plan Document, Standardized Adoption Agreement, and
Non-Standardized Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity
Securities Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan
Adoption Agreement, Non-Standardized Discretionary Contribution Plan
No. 002 Adoption Agreement, and Non-Standardized Discretionary
Contribution Plan No. 003 Adoption Agreement, as currently in effect,
is incorporated herein by reference to Exhibit 14(g) of Fidelity
Securities Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) of Fidelity Securities Fund's (File No.
2-93601) Post Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference
to Exhibit 14(c) of Fidelity Securities Fund's (File No. 2-93601) Post
Effective Amendment No. 33.
(q) Fidelity SIMPLE-IRAPlan Adoption Agreement, Company Profile
Form, and Plan Document, as currently in effect, is incorporated
herein by reference to Exhibit 14(q) of Fidelity Aberdeen Street
Trust's (File No. 33-43529) Post-Effective Amendment No. 19.
15. (a) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Intermediate Bond Fund is incorporated herein by reference to
Exhibit 15(a) of Post-Effective Amendment No. 62.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Market Index Fund is incorporated herein by reference to Exhibit 15(b)
of Post-Effective Amendment No. 62.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Large Cap Stock Fund is incorporated herein by reference to
Exhibit 15(c) of Post-Effective Amendment No. 62.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Small Cap Stock Fund is incorporated herein by reference to
Exhibit 15(d) of Post-Effective Amendment No. 65.
16. (a) A schedule for computation of moving averages for Fidelity
Small Cap Stock Fund (currently known as Fidelity Small Cap Selector)
is incorporated herein by reference to Exhibit 16(a) of Post-effective
Amendment No. 60.
(b) A schedule for computation of 30 day yield calculations on
behalf of Fidelity Intermediate Bond Fund is Incorporated herein by
reference to Exhibit 16(b) of Post-effective Amendment No. 60.
(c) A schedule for computation of total return calculations on
behalf of Fidelity Intermediate Bond Fund is incorporated herein by
reference to Exhibit 16(c) of Post-Effective No. 60.
17. Financial Data Schedules for the funds are filed herein as
Exhibit 27.
18. Not applicable.
Item 25. Persons Controlled by or Under Common Control With
Registrant
The Board of Trustees of the Registrant is the same as the board 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, the
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

Title of Class: Shares of Beneficial Interest as of April 30, 1998
Name of Series Number of Record Holders
Fidelity Intermediate Bond Fund 588,051
Spartan Market Index Fund 164,247
Fidelity Small Cap Selector 111,646
Fidelity Large Cap Stock Fund 12,418
Fidelity Small Cap Stock Fund 40,712
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.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense arising by reason of
any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made
public by the Registrant included a materially misleading statement or
omission. However, the Registrant does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with,
information furnished to the Registrant by or on behalf of the
Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of
willful misfeasance, bad faith, gross negligence, and reckless
disregard of the obligations and duties under the Distribution
Agreement.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed transfer agent, the Registrant agrees to
indemnify and hold Service harmless against any losses, claims,
damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder, which names the
Service and/or the Registrant as a party and is not based on and does
not result from Service's willful misfeasance, bad faith or negligence
or reckless disregard of duties, and arises out of or in connection
with Service's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by Service's willful misfeasance, bad faith or
negligence or reckless disregard of duties) which results from the
negligence of the Registrant, or from Service's acting upon any
instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Registrant, or as a
result of Service's acting in reliance upon advice reasonably believed
by Service to have been given by counsel for the Registrant, or as a
result of Service's acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
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 Board and Director of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman
of the Board and Director of FMR Corp., FIMM, FMR
U.K., and FMR FAR EAST; Chairman of the Executive
Committee of FMR; Director of Fidelity Investments
Japan Limited; President and Trustee of funds advised
by FMR.

Robert C. Pozen President and Director of FMR; Senior Vice President
and Trustee of funds advised by FMR; President and
Director of FIMM, FMR U.K., and FMR FAR EAST;
Previously, General Counsel, Managing Director, and
Senior Vice President of FMR Corp.

Peter S. Lynch Vice Chairman of the Board and Director of FMR.

Marta Amieva Vice President of FMR.

John H. Carlson Vice President of FMR and of funds advised by FMR.

Dwight D. Churchill Senior Vice President of FMR and Vice President of
Bond Funds advised by FMR; Vice President of FIMM.

Brian Clancy Vice President of FMR and Treasurer of FMR, FIMM,
FMR U.K., and FMR FAR EAST.

Barry Coffman Vice President of FMR.

Arieh Coll Vice President of FMR.

Stephen G. Manning Assistant Treasurer of FMR, FIMM, FMR U.K., FMR
FAR EAST; Treasurer of FMR Corp.

William Danoff Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Scott E. DeSano Vice President of FMR.

Penelope Dobkin Vice President of FMR and of a fund advised by FMR.

Walter C. Donovan Vice President of FMR.

Bettina Doulton Vice President of FMR and of funds advised by FMR.

Margaret L. Eagle Vice President of FMR and of funds advised by FMR.

William R. Ebsworth Vice President of FMR.

Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Gregory Fraser Vice President of FMR and of a fund advised by FMR.

Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
U.K., and FMR FAR EAST; Secretary of FIMM.

Robert Gervis Vice President of FMR.

David L. Glancy Vice President of FMR and of a fund advised by FMR.

Kevin E. Grant Vice President of FMR and of funds advised by FMR.

Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.

Boyce I. Greer Senior Vice President of FMR and Vice President of
Money Market Funds advised by FMR.

Bart A. Grenier Vice President of High-Income Funds advised by
FMR;Vice President of FMR.

Robert Haber Vice President of FMR.

Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.

Richard Hazelwood Vice President of FMR.

Fred L. Henning Jr. Senior Vice President of FMR and Vice President of
Fixed-Income funds advised by FMR.

Bruce T. Herring Vice President of FMR.

John R. Hickling Vice President of FMR and of a fund advised by FMR.

Robert F. Hill Vice President of FMR; Director of Technical Research.

Curt Hollingsworth Vice President of FMR and of funds advised by FMR.

Abigail P. Johnson Senior Vice President of FMR and Vice President of
funds advised by FMR; Director of FMR Corp.;
Associate Director and Senior Vice President of Equity
funds advised by FMR.

David B. Jones Vice President of FMR.

Steven Kaye Vice President of FMR and of a fund advised by FMR.

Francis V. Knox Vice President of FMR; Compliance Officer of FMR
U.K.

Robert A. Lawrence Senior Vice President of FMR and Vice President of
Fidelity Real Estate High Income and Fidelity Real
Estate High income II funds advised by FMR; Associate
Director and Senior Vice President of Equity funds
advised by FMR; Previously, Vice President of High
Income funds advised by FMR.

Harris Leviton Vice President of FMR and of a fund advised by FMR.

Bradford E. Lewis Vice President of FMR and of funds advised by FMR.

Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.

Charles A. Mangum Vice President of FMR and of a fund advised by FMR.

Kevin McCarey Vice President of FMR and of a fund advised by FMR.

Diane M. McLaughlin Vice President of FMR.

Neal P. Miller Vice President of FMR.

David L. Murphy Vice President of FMR and of funds advised by FMR.

Scott A. Orr Vice President of FMR and of funds advised by FMR.

Jacques Perold Vice President of FMR.

Anne Punzak Vice President of FMR.

Kevin A. Richardson Vice President of FMR.

Eric D. Roiter Senior Vice President and General Counsel of FMR and
Secretary of funds advised by FMR.

Mark S. Rzepczynski Vice President of FMR.

Lee H. Sandwen Vice President of FMR.

Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.

Fergus Shiel Vice President of FMR.

Richard A. Silver Vice President of FMR.

Carol A. Smith-Fachetti Vice President of FMR.

Steven J. Snider Vice President of FMR.

Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.

Richard Spillane Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by FMR;
Previously, Senior Vice President and Director of
Operations and Compliance of FMR U.K.

Thomas M. Sprague Vice President of FMR and of funds advised by FMR.

Robert E. Stansky Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Scott D. Stewart Vice President of FMR.

Cynthia L. Strauss Vice President of FMR.

Thomas Sweeney Vice President of FMR and of a fund advised by FMR.

Beth F. Terrana Senior Vice President of FMR and Vice President of a
fund advised by FMR.

Yoko Tilley Vice President of FMR.

Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.

Robert Tuckett Vice President of FMR.

Jennifer Uhrig Vice President of FMR and of funds advised by FMR.

George A. Vanderheiden Senior Vice President of FMR and Vice President of
funds advised by FMR; Director of FMR Corp.

Steven S. Wymer Vice President of FMR and of a fund advised by FMR.

</TABLE>

(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
25 Lovat Lane, London, EC3R 8LL, England
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.
Edward C. Johnson 3d Chairman of the Board and Director of FMR U.K.,
FMR, FMR Corp., FIMM, and FMR FAR EAST;
President and Chief Executive Officer of FMR Corp.;
Chairman of the Executive Committee of FMR;
Director of Fidelity Investments Japan Limited;
President and Trustee of funds advised by FMR.

Brian Clancy Treasurer of FMR U.K., FMR FAR EAST, FMR, and
FIMM and Vice President of FMR.

Stephen G. Manning Assistant Treasurer of FMR U.K., FMR, FMR FAR
EAST, and FIMM; Treasurer of FMR Corp.

Francis V. Knox Compliance Officer of FMR U.K.; Previously, Vice
President of FMR.

Jay Freedman Clerk of FMR U.K., FMR FAR EAST, and FMR Corp.;
Assistant Clerk of FMR; Secretary of FIMM.

Sarah H. Zenoble Senior Vice President and Director of Operations
andCompliance.

(3) FIDELITY MANAGEMENT & RESEARCH COMPANY (FAR EAST) INC. (FMR FAR
EAST)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan
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.
Edward C. Johnson 3d Chairman of the Board and Director of FMR
FAR EAST, FMR, FMR Corp., FIMM, and FMR
U.K.; Chairman of the Executive Committee of
FMR; President and Chief Executive Officer of
FMR Corp.; Director of Fidelity Investments
Japan Limited; President and Trustee of funds
advised by FMR.

Robert C. Pozen President and Director of FMR; Senior Vice
President and Trustee of funds advised by FMR;
President and Director of FIMM, FMR U.K., and
FMR FAR EAST; Previously, General Counsel,
Managing Director, and Senior Vice President of
FMR Corp.

Robert H. Auld Senior Vice President of FMR FAR EAST.

Brian Clancy Treasurer of FMR FAR EAST, FMR U.K., FMR,
and FIMM and Vice President of FMR.

Jay Freedman Clerk of FMR FAR EAST, FMR U.K., and FMR
Corp.; Assistant Clerk of FMR; Secretary of
FIMM.

Stephen G. Manning Assistant Treasurer of FMR FAR EAST, FMR,
FMR U.K., and FIMM; Treasurer of FMR Corp.

Billy Wilder Vice President of FMR FAR EAST; President
and Representative Director of Fidelity
Investments Japan Limited.

(4) BANKERS TRUST COMPANY (BT)
One Bankers Trust Plaza, New York, NY 10006
BT provides investment advisory services to Spartan Market Index and
Fidelity Management and Research Company. The directors and officers
of BT have held, during the past two fiscal years, the following
positions of a substantial nature.
Frank N. Newman President, Chief Executive Officer, and Chair
man of the Board of BT and Bankers Trust New
York Corporation; Director of BT.

Richard H. Daniel Vice Chairman and Chief Financial Officer of
BT and Bankers Trust New York Corporation;
Director of BT.

George J. Vojta Vice Chairman of BT and Bankers Trust New
York Corporation; Director of BT.

Melvin A. Yellin Senior Managing Director and General Counsel
of BT and Bankers Trust New York
Corporation.

David Marshall Senior Managing Director; Chief Information
Officer and Executive Vice President of
Bankers Trust New York Corporation.

Lee A. Ault III Director of BT.

Neil R. Austrian Director of BT.

George B. Beitzel Director of BT.

Philip A. Griffiths Director of BT.

William R. Howell Director of BT.

Vernon E. Jordan, Jr. Director of BT.

Hamish Maxwell Director of BT.

N. J. Nicholas Jr. Director of BT.

Russell E Palmer Director of BT.

Donald L. Staheli Director of BT.

Patricia Carry Stewart Director of BT.

G. Richard Thoman Director of BT.

Paul A. Volcker Director of BT.

Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for
most funds advised by FMR.
(b)

Name and Principal Positions and Offices Positions and Offices

Business Address* With Underwriter With Registrant

Edward C. Johnson 3d Director Trustee and President

Michael Mlinac Director None

James Curvey Director None

Martha B. Willis President None

Eric D. Roiter Senior Vice President Secretary

Caron Ketchum Treasurer and Controller None

Gary Greenstein Assistant Treasurer None

Jay Freedman Assistant Clerk None

Linda Holland Compliance Officer None

* 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 Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the
funds' respective custodians, the Bank of New York, 110 Washington
Street, New York, N.Y. (Fidelity Intermediate Bond Fund), Bankers
Trust Company, 130 Liberty Street, New York, N.Y. 10006 (Spartan
Market Index Fund), and Brown Brothers Harriman & Company, 40 Water
Street, Boston, MA 02109 (Fidelity Small Cap Selector, Fidelity Large
Cap Stock Fund, and Fidelity Small Cap Stock Fund).
Item 31. Management Services
Not applicable.
Item 32. Undertaking

(a) The Registrant undertakes for Fidelity Intermediate Bond Fund,
Spartan Market Index Fund, Fidelity Small Cap Selector (formerly known
as Fidelity Small Cap Stock Fund), Fidelity Large Cap Stock Fund, and
Fidelity Small Cap Stock Fund: (1) to call a meeting of shareholders
for the purpose of voting upon the questions of removal of a trustee
or trustees, when requested to do so by record holders of not less
than 10% of its outstanding shares; and (2) to assist in
communications with other shareholders pursuant to Section 16(c)(1)
and (2), whenever shareholders meeting the qualifications set forth in
Section 16(c) seek the opportunity to communicate with other
shareholders with a view toward requesting a meeting.

(b) The Registrant, on behalf of Fidelity Intermediate Bond Fund,
Spartan Market Index Fund, Fidelity Small Cap Selector (formerly known
as Fidelity Small Cap Stock Fund), Fidelity Large Cap Stock Fund, and
Fidelity Small Cap Stock Fund, provided the information required by
Item 5A is contained in the annual report, undertakes to furnish to
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.

(c) The Registrant undertakes to file a Post-Effective Amendment,
using financial statements for Fidelity Small Cap Stock Fund, which
need not be certified, within six months of the effectiveness of the
fund's initial registration statement, provided such filing is then
required by regulations of the Securities and Exchange Commission.

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. 66 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 18th day of June 1998.
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 June 18, 1998

Edward C. Johnson 3d (Principal Executive Officer)

/s/Richard A. Silver Treasurer June 18, 1998

Richard A. Silver

/s/Robert C. Pozen Trustee June 18, 1998

Robert C. Pozen

/s/Ralph F. Cox * Trustee June 18, 1998

Ralph F. Cox

/s/Phyllis Burke Davis * Trustee June 18, 1998

Phyllis Burke Davis

/s/Robert M. Gates ** Trustee June 18, 1998

Robert M. Gates

/s/E. Bradley Jones * Trustee June 18, 1998

E. Bradley Jones

/s/Donald J. Kirk * Trustee June 18, 1998

Donald J. Kirk

/s/Peter S. Lynch * Trustee June 18, 1998

Peter S. Lynch

/s/Marvin L. Mann * Trustee June 18, 1998

Marvin L. Mann

/s/William O. McCoy * Trustee June 18, 1998

William O. McCoy

/s/Gerald C. McDonough * Trustee June 18, 1998

Gerald C. McDonough

/s/Thomas R. Williams * Trustee June 18, 1998

Thomas R. Williams

</TABLE>

(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated March 6, 1997 and filed herewith.
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 Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust

</TABLE>

in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, 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 on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d July 17, 1997

Edward C. Johnson 3d

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 Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II

</TABLE>

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, 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
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, 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 deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the 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. This power
of attorney is effective for all documents filed on or after January
1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.

/s/Edward C. Johnson 3d /s/Peter S. Lynch

Edward C. Johnson 3d Peter S. Lynch

/s/J. Gary Burkhead /s/William O. McCoy

J. Gary Burkhead William O. McCoy

/s/Ralph F. Cox /s/Gerald C. McDonough

Ralph F. Cox Gerald C. McDonough

/s/Phyllis Burke Davis /s/Marvin L. Mann

Phyllis Burke Davis Marvin L. Mann

/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 Director, Trustee, or General Partner, as the case
may be, of the following investment companies:

</TABLE>

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, 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 capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, 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 the 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. This power
of attorney is effective for all documents filed on or after March 1,
1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997

Robert M. Gates

Exhibit 6(i)
FORM OF
BANK AGENCY AGREEMENT
We at Fidelity Distributors Corporation offer to make available to
your customers shares of the mutual funds, or the separate series or
classes of the mutual funds, listed on Schedules A and B attached to
this Agreement (the "Portfolios"). We may periodically change the
list of Portfolios by giving you written notice of the change. We are
the Portfolios' principal underwriter and act as agent for the
Portfolios. You (____________________________________) are a division
or affiliate of a bank (____________________________________) and
desire to make Portfolio shares available to your customers on the
following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or
electronic format, included in the Portfolio's then currently
effective registration statement (or post-effective amendment
thereto), and any information that we or the Portfolio may issue to
you as a supplement to such prospectus or statement of additional
information (a "sticker"), all as filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of
1933.
2. Making Portfolio Shares Available to Your Customers: (a) In all
transactions covered by this Agreement: (i) you will act as agent for
your customers; in no transaction are you authorized to act as agent
for us or for any Portfolio; (ii) you will initiate transactions only
upon your customers' orders; (iii) we will execute transactions only
upon receiving instructions from you acting as agent for your
customers; and (iv) each transaction will be for your customer's
account and not for your own account. Each transaction will be
without recourse to you, provided that you act in accordance with the
terms of this Agreement.
(b) You agree to make Portfolio shares available to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to make Portfolio shares available to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to order Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You will not withhold placing customers'
orders so as to profit yourself as a result of such withholding (for
example, by a change in a Portfolio's net asset value from that used
in determining the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the Securities Exchange Act of 1934 (the "1934 Act").
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to make Portfolio shares available to your
customers only in states where you may legally make such Portfolio's
shares available. You will not make available shares of any Portfolio
unless such shares are registered under the applicable state and
federal laws and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company, Inc. ("FIIOC"). A confirmation
statement evidencing transactions in Portfolio shares will be
transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your fee, if any, for acting as agent
with respect to sales of Portfolio shares will be as provided in the
Prospectus or in the applicable schedule of agency fees issued by us
and in effect at the time of the sale. Upon written notice to you, we
or any Portfolio may change or discontinue any schedule of agency
fees, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of
any schedule of agency fees, distribution payments, or service
payments, or the termination of a Plan, any agency fees, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any agency fee, distribution
payment, or service payment, you will remit such overpayment.
(d) If, within seven (7) business days after our confirmation of
the original purchase order for shares of a Portfolio, such shares are
redeemed by the issuing Portfolio or tendered for redemption by the
customer, you agree (i) to refund promptly to us the full amount of
any agency fee, distribution payment, or service payment paid to you
on such shares, and (ii) if not yet paid to you, to forfeit the right
to receive any agency fee, distribution payment, or service payment
payable to you on such shares. We will notify you of any such
redemption within ten (10) days after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer or "Bank": (a) Each party to
this Agreement represents to the other party that it is either (i) a
registered broker/dealer under the 1934 Act, or (ii) a "bank" as
defined in Section 3(a)(6) of the 1934 Act.
(b) If a party is a registered broker/dealer, such party represents
that it is qualified to act as a broker/dealer in the states where it
transacts business, and it is a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD"). It agrees
to maintain its broker/dealer registration and qualifications and its
NASD membership in good standing throughout the term of this
Agreement. It agrees to abide by all of the NASD's rules and
regulations, including the NASD's Conduct Rules -- in particular,
Section 2830 of such Rules, which section is deemed a part of and is
incorporated by reference in this Agreement. This Agreement will
terminate automatically without notice in the event that a party's
NASD membership is terminated.
(c) If you are a "bank", you represent that you are duly authorized
to engage in the transactions to be performed under this Agreement,
and you agree to comply with all applicable federal and state laws,
including the rules and regulations of all applicable federal and
state bank regulatory agencies and authorities. This Agreement will
terminate automatically without notice in the event that you cease to
be a "bank" as defined in Section 3(a)(6) of the 1934 Act.
(d) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In ordering Portfolio shares from us under this Agreement, you will
rely only on the representations contained in the Prospectus. Upon
your request, we will furnish you with a reasonable number of copies
of the Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with making Portfolio shares available to your customers
without obtaining our prior written approval. You may not distribute
or make available to investors any information that we furnish you
marked "FOR DEALER USE ONLY" or that otherwise indicates that it is
confidential or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is file against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend making Portfolio shares available
to your customers in the event of any such filing or violation, or in
the event that you cease to be a member in good standing of the NASD
or you cease to be a "bank" as defined in Section 3(a)(6) of the 1934
Act.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 12.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION

By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________

** DISCARD THIS PAGE AND ATTACH REVISED SCHEDULES A AND B **

Exhibit 6(j)
FORM OF
SELLING DEALER AGREEMENT
(FOR BANK-RELATED TRANSACTIONS)
We at Fidelity Distributors Corporation invite you to distribute
shares of the mutual funds, or the separate series or classes of the
mutual funds, listed on Schedules A and B attached to this Agreement
(the "Portfolios"). We may periodically change the list of Portfolios
by giving you written notice of the change. We are the Portfolios'
principal underwriter and, as agent for the Portfolios, we offer to
sell Portfolio shares to you on the following terms:
1. Certain Defined Terms: (a) You
(_____________________________________) are registered as a
broker/dealer under the Securities Exchange Act of 1934 (the "1934
Act") and have executed a written agreement with a bank or bank
affiliate to provide brokerage services to that bank, bank affiliate
and/or their customers. As used in this Agreement, the term "Bank"
means a bank as defined in Section 3(a)(6) of the 1934 Act, or an
affiliate of such a bank, with which you have entered into a written
agreement to provide brokerage services; and the term "Bank Client"
means a customer of such a Bank.
(b) As used in this Agreement, the term "Prospectus" means the
applicable Portfolio's prospectus and related statement of additional
information, whether in paper format or electronic format, included in
the Portfolio's then currently effective registration statement (or
post-effective amendment thereto), and any information that we or the
Portfolio may issue to you as a supplement to such prospectus or
statement of additional information (a "sticker"), all as filed with
the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Act of 1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In
offering and selling Portfolio shares to your customers, you agree to
act as dealer for your own account; you are not authorized to act as
agent for us or for any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to offer and sell Portfolio shares to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You also agree not to purchase any Portfolio
shares from your customers at a price lower than the applicable
redemption price, determined in the manner described in the
Prospectus. You will not withhold placing customers' orders so as to
profit yourself as a result of such withholding (for example, by a
change in a Portfolio's net asset value from that used in determining
the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the 1934 Act. If we do not receive your payment on or
before such settlement date, we may, without notice, cancel the sale,
or, at our option, sell the shares that you ordered back to the
issuing Portfolio, and we may hold you responsible for any loss
suffered by us or the issuing Portfolio as a result of your failure to
make payment as required.
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in
states where you may legally offer and sell such Portfolio's shares.
You will not offer shares of any Portfolio for sale unless such shares
are registered for sale under the applicable state and federal laws
and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company, Inc. ("FIIOC"). A confirmation
statement evidencing transactions in Portfolio shares will be
transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the
applicable schedule of concessions issued by us and in effect at the
time of our sale to you. Upon written notice to you, we or any
Portfolio may change or discontinue any schedule of concessions, or
issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) Concessions, distribution payments, and service payments apply
only with respect to (i) shares of the "Fidelity Funds" (as designated
on Schedule A attached to this Agreement) purchased or maintained for
the account of Bank Clients, and (ii) shares of the "Fidelity Advisor
Funds" (as designated on Schedule B attached to this Agreement).
Anything to the contrary notwithstanding, neither we nor any Portfolio
will provide to you, nor may you retain, concessions on your sales of
shares of, or distribution payments or service payments with respect
to assets of, the Fidelity Funds attributable to you or any of your
clients, other than Bank Clients. When you place an order in shares
of the Fidelity Funds with us, you will identify the Bank on behalf of
whose Clients you are placing the order; and you will identify as a
non-Bank Client Order, any order in shares of the Fidelity Funds
placed for the account of a non-Bank Client.
(d) After the effective date of any change in or discontinuance of
any schedule of concessions, distribution payments, or service
payments, or the termination of a Plan, any concessions, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any concession, distribution
payment, or service payment, you will remit such overpayment.
(e) If any Portfolio shares sold to you by us under the terms of
this Agreement are redeemed by the issuing Portfolio or tendered for
redemption by the customer within seven (7) business days after the
date of our confirmation of your original purchase order for such
shares, you agree (i) to refund promptly to us the full amount of any
concession, distribution payment, or service payment allowed or paid
to you on such shares, and (ii) if not yet allowed or paid to you, to
forfeit the right to receive any concession, distribution payment, or
service payment allowable or payable to you on such shares. We will
notify you of any such redemption within ten (10) days after the date
of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this
Agreement represents to the other party that (i) it is registered as a
broker/dealer under the 1934 Act, (ii) it is qualified to act as a
broker/dealer in the states where it transacts business, and (iii) it
is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"). Each party agrees to maintain its
broker/dealer registration and qualifications and its NASD membership
in good standing throughout the term of this Agreement. Each party
agrees to abide by all of the NASD's rules and regulations, including
the NASD's Conduct Rules -- in particular, Section 2830 of such Rules,
which section is deemed a part of and is incorporated by reference in
this Agreement. This Agreement will terminate automatically without
notice in the event that either
party's NASD membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In buying Portfolio shares from us under this Agreement, you will rely
only on the representations contained in the Prospectus. Upon your
request, we will furnish you with a reasonable number of copies of the
Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with the offer or sale of Portfolio shares without
obtaining our prior written approval. You may not distribute or make
available to investors any information that we furnish you marked "FOR
DEALER USE ONLY" or that otherwise indicates that it is confidential
or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is filed against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend sales of Portfolio shares in the
event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 11.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION

Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________

** DISCARD THIS PAGE AND ATTACH REVISED SCHEDULES A AND B **

Exhibit 8(m)
Form of
FIDELITY GROUP
REPO CUSTODIAN AGREEMENT
FOR JOINT TRADING ACCOUNT
AGREEMENT dated as of ______, among THE BANK OF NEW YORK, a banking
corporation organized under the laws of the State of New York ("Repo
Custodian"), J.P. MORGAN SECURITIES INC. ("Seller") and each of the
entities listed on Schedule A-1, A-2, A-3 and A-4 (collectively, the
"Funds" and each a "Fund") hereto, acting on behalf of itself or (i)
in the case of the Funds listed on Schedule A-1 or A-2 hereto which
are portfolios or series, acting through the series company listed on
Schedule A-1 or A-2 hereto, (ii) in the case of the accounts listed on
Schedule A-3 hereto, acting through Fidelity Management & Research
Company, and (iii) in the case of the commingled or individual
accounts listed on Schedule A-4 hereto, acting through Fidelity
Management Trust Company (collectively, the "Funds" and each, a
"Fund").
WITNESSETH
WHEREAS, each of the Funds has entered into a master repurchase
agreement dated as of ___________, (the "Master Agreement") with
Seller pursuant to which from time to time one or more of the Funds,
as buyers, and Seller, as seller, may enter into repurchase
transactions effected through one or more joint trading accounts
(collectively, the "Joint Trading Account") established and
administered by one or more custodians of the Funds identified on
Schedule C hereto (each a "Custodian"); and,
WHEREAS, in each such repurchase transaction Seller will sell to such
Funds certain Securities (as hereinafter defined) selected from
Eligible Securities (as hereinafter defined) held by Repo Custodian,
subject to an agreement by Seller to repurchase such Securities; and
WHEREAS, Repo Custodian currently maintains a cash and securities
account (the "Seller Account") for Seller for the purpose of, among
other things, effecting repurchase transactions hereunder; and
WHEREAS, the Funds desire that the Repo Custodian serve as the
custodian for the Funds in connection with the repurchase transactions
effected hereunder, and that the Repo Custodian hold cash, Cash
Collateral (as hereinafter defined) and Securities for the Funds for
the purpose of effecting repurchase transactions hereunder.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Banking Day" shall mean any day on which the Funds, Seller
Custodian, Repo Custodian, and the Federal Reserve Banks where the
Custodian and the Repo Custodian are located, are each open for
business.
(b) "Cash Collateral" shall mean all cash, denominated in U.S.
Dollars, credited by Repo Custodian to a Transaction Account pursuant
to Paragraphs 3, 6, 8 or 9 of the Master Agreement.
(c) "Custodian" shall have the meaning set forth in the preamble of
this Agreement.
(d) "Eligible Securities" shall mean those securities which are
identified as permissible securities for a particular Transaction
Category.
(e) "FICASH I Transaction" and "FICASH III Transaction " shall mean a
repurchase transaction in which the Repurchase Date is the Banking Day
next following the Sale Date and for which securities issued by the
government of the United States of America that are direct obligations
of the government of the United States of America shall constitute
Eligible Securities.
(f) "FICASH II Transaction" shall mean a repurchase transaction in
which the Repurchase Date is the Banking Day next following the Sale
Date and for which one or more of the following two categories of
securities, as specified by the Funds, shall constitute Eligible
Securities: (x) securities issued by the government of the United
States of America that are direct obligations of the government of the
United States of America, or (y) securities issued by or guaranteed as
to principal and interest by the government of the United States of
America, or by its agencies and/or instrumentalities, including, but
not limited to, the Federal Home Loan Bank, Federal Home Loan Mortgage
Corp., Government National Mortgage Association, Federal National
Mortgage Association, Federal Farm Credit Bank, Federal Intermediate
Credit Bank, Banks for Cooperatives, and Federal Land Banks.
(g) "FITERM I Transaction" and "FITERM III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is a date fixed by
agreement between Seller and the Participating Funds which is not the
Banking Day next following the Sale Date and for which securities
issued by the government of the United States of America that are
direct obligations of the government of the United States of America
shall constitute Eligible Securities.
(h) "FITERM II Transaction" shall mean a repurchase transaction in
which the Repurchase Date is a date fixed by agreement between Seller
and the Participating Funds which is not the Banking Day next
following the Sale Date and for which one or more of the following two
categories of securities, as specified by the Funds, shall constitute
Eligible Securities: (x) securities issued by the government of the
United States of America that are direct obligations of the government
of the United States of America, or (y) securities issued by or
guaranteed as to principal and interest by the government of the
United States of America, or by its agencies and/or instrumentalities,
including, but not limited to, the Federal Home Loan Bank, Federal
Home Loan Mortgage Corp., Government National Mortgage Association,
Federal National Mortgage Association, Federal Farm Credit Bank,
Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(i) "Fund" shall have the meaning set forth in the preamble of this
Agreement.
(j) "Fund Agent" shall mean the agent for the Participating Funds
designated in Paragraph 18 of the Master Agreement.
(k) "Joint Trading Account" shall have the meaning set forth in the
preamble of this Agreement.
(l) "Margin Percentage" with respect to any repurchase transaction
shall be 102% or such other percentage as is agreed to by Seller and
the Participating Funds (except that in no event shall the Margin
Percentage be less than 100%).
(m) "Market Value" shall have the meaning set forth in Paragraph 4 of
the Master Agreement.
(n) "Master Agreement" shall have the meaning set forth in the
preamble of this Agreement.
(o) "1940 Act" shall mean have the meaning set forth in Paragraph
3(c) of this Agreement.
(p) "Partial Payment" shall have the meaning set forth in Section
4(g) of this Agreement.
(q) "Participating Funds" shall mean those Funds that are parties to
a particular repurchase transaction effected through the Joint Trading
Account.
(r) "Pricing Rate" shall mean the per annum percentage rate agreed to
by Seller and the Participating Funds for a repurchase transaction.
(s) "Pricing Services" shall have the meaning set forth in Paragraph
7 of this Agreement.
(t) "Repo Custodian" shall have the meaning set forth in the preamble
of this Agreement.
(u) "Repurchase Date" shall mean the date fixed by agreement between
Seller and the Participating Funds on which the Seller is to
repurchase Securities and Cash Collateral, if any, from the
Participating Funds and the Participating Funds are to resell the
Securities and Cash Collateral, if any, including any date determined
by application of the provisions of Paragraphs 7 and 15 of the Master
Agreement.
(v) "Repurchase Price" for each repurchase transaction shall mean the
Sale Price, plus an incremental amount determined by applying the
Pricing Rate to the Sale Price, calculated on the basis of a 360-day
year and the number of actual days elapsed from (and including) the
Sale Date to (but excluding) the Repurchase Date.
(w) "Sale Date" shall mean the Banking Day on which Securities and
Cash Collateral, if any, are to be sold to the Participating Funds by
Seller pursuant to a repurchase transaction hereunder.
(x) "Sale Price" shall mean the price agreed upon by the
Participating Funds and Seller at which the Securities and Cash
Collateral, if any, are to be sold to the Participating Funds by
Seller.
(y) "Securities" shall mean all Eligible Securities delivered by
Seller or to be delivered by Seller to the Participating Funds
pursuant to a particular repurchase transaction and not yet
repurchased hereunder, together with all rights related thereto and
all proceeds thereof.
(z) "Securities System" shall have the meaning set forth in Paragraph
3(c) of this Agreement.
(aa) "Seller" shall have the meaning set forth in the preamble to
this Agreement.
(bb) "Seller Account" shall have the meaning set forth in the
preamble of this Agreement.
(cc) "Transaction Account" shall mean a cash account established and
maintained by Repo Custodian for the Funds to effect repurchase
transactions pursuant to the Master Agreement.
(dd) "Transaction Category" shall mean the particular type of
repurchase transaction effected hereunder, as determined with
reference to the term of the transaction and the categories of
Securities that constitute Eligible Securities therefor, which term
shall include FICASH I Transactions, FICASH II Transactions, FICASH
III Transactions, FITERM I Transactions, FITERM II Transactions,
FITERM III Transactions, and such other transaction categories as may
from time to time be designated by the Funds by notice to Seller,
Custodian and Repo Custodian.
2. Appointment of Repo Custodian. Upon the terms and conditions set
forth in this Agreement, Repo Custodian is hereby appointed by the
Funds to act as the custodian for the Participating Funds to hold
cash, Cash Collateral and Securities for the purpose of effecting
repurchase transactions for the Participating Funds through the Joint
Trading Account pursuant to the Master Agreement. Repo Custodian
hereby acknowledges the terms of the Master Agreement between the
Funds and Seller (attached as an Exhibit hereto), as amended from time
to time, and agrees to abide by the provisions thereof to the extent
such provisions relate to the responsibilities and operations of Repo
Custodian hereunder.
3. Maintenance of Transaction Accounts.
(a) Repo Custodian shall establish and maintain one or more
Transaction Accounts for the purpose of effecting repurchase
transactions hereunder for the Funds, in each case pursuant to the
Master Agreement. From time to time the Funds may cause Custodian, on
behalf of the Funds, to deposit Securities and cash with Repo
Custodian in the designated Transaction Account, in each case in
accordance with Paragraph 3 of the Master Agreement.
(b) Repo Custodian shall keep all Securities, cash and Cash
Collateral received for the Participating Funds segregated at all
times from those of any other person, firm or corporation in its
possession and shall identify all such Securities, cash and Cash
Collateral as subject to this Agreement and the Master Agreement.
Segregation may be accomplished by physical segregation with respect
to certificated securities held by the Repo Custodian and, in
addition, by appropriate identification on the books and records of
Repo Custodian in the case of all other Securities, cash and Cash
Collateral. Title to all Securities and Cash Collateral under a
repurchase transaction shall pass to the Participating Funds that are
parties to such repurchase transaction. All such Securities and Cash
Collateral shall be held by Repo Custodian for the Participating
Funds, and shall be subject at all times to the proper instructions of
the Participating Funds, or the Custodian on behalf of the
Participating Funds, with respect to the holding, transfer or
disposition of such Securities and Cash Collateral. Repo Custodian
shall include in its records for each Transaction Account all
instructions received by it which evidence an interest of the
Participating Funds in the Securities and Cash Collateral and shall
hold physically segregated any written agreement, receipt or other
writing received by it which evidences an interest of the
Participating Funds in the Securities and Cash Collateral.
(c) Any requirement to "deliver" or "transfer" cash or Cash
Collateral to the Participating Funds or to "credit" a Transaction
Account under this or any other paragraph of this Agreement shall be
made in immediately available funds. If Repo Custodian is required to
"deliver" or "transfer" Securities to the Participating Funds under
this or any other paragraph of this Agreement, Repo Custodian shall
take, or cause to be taken, the following actions to perfect the
Participating Funds' interest in such Securities as an outright
purchaser: (i) in the case of certificated securities and instruments
held by Seller, by physical delivery of the share certificates or
other instruments representing the Securities and by physical
segregation of such certificates or instruments from the Repo
Custodian's other assets in a manner indicating that the Securities
are being held for the Participating Funds (such securities and
instruments to be delivered in form suitable for transfer or
accompanied by duly executed instruments of transfer or assignment in
blank and accompanied by such other documentation as the Participating
Funds may request), (ii) in the case of Securities held in a customer
only account in a clearing agency or federal book-entry system
authorized for use by the Funds and meeting the requirements of Rule
17f-4 under the Investment Company Act of 1940, as amended (the "1940
Act") (such authorized agency or system being referred to herein as a
"Securities System"), by appropriate entry on the books and records of
Repo Custodian identifying the Securities as belonging to the
Participating Funds, or (iii) in the case of Securities held in Repo
Custodian's own account in a Securities System, by transfer to a
customer only account in the Securities System and by appropriate
entry on the books and records of Repo Custodian identifying such
Securities as belonging to the Participating Funds; provided, further,
that Repo Custodian shall confirm to the Participating Funds the
identity of the Securities transferred or delivered. Acceptance of a
"due bill", "trust receipt" or similar receipt or notification of
segregation issued by a third party with respect to Securities held by
such third party shall not constitute good delivery of Securities to
Repo Custodian for purposes of this Agreement or the Master Agreement
and shall expressly violate the terms of this Agreement and the Master
Agreement. The Funds shall identify by notice to Repo Custodian and
Seller those agencies or systems which have been approved by the Funds
for use under this Agreement and the Master Agreement. The Funds
hereby notify Repo Custodian and Seller that the following agencies
and systems have been approved by the Funds for use under this
Agreement and the Master Agreement, until such time as Repo Custodian
and Seller shall have been notified by the Funds to the contrary: (i)
Participants Trust Company; (ii) The Depository Trust Company; and
(iii) any book-entry system as provided in (A) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (B) Subpart B of Treasury Circular
Public Debt Series No. 27-76, 31 CFR 350.2, or (C) the book-entry
regulations of federal agencies substantially in the form of 31 CFR
306.115.
4. Repurchase Transactions.
(a) Repo Custodian shall make all credits and debits to the
Transaction Account and effect the transfer of Securities to or from
the Participating Funds upon proper instructions received from the
Participating Funds, or the Custodian on behalf of the Participating
Funds, and shall make all credits and debits to the Seller Account and
effect the transfer of Securities to or from the Seller upon proper
instructions received from Seller. In the event that Repo Custodian
receives conflicting proper instructions from Seller and the
Participating Funds, or the Custodian on behalf of the Participating
Funds, Repo Custodian shall follow the Participating Funds' or the
Custodian's proper instructions. The Participating Funds shall give
Repo Custodian only such instructions as shall be permitted by the
Master Agreement. Notwithstanding the preceding sentence, the
Participating Funds, or the Custodian on behalf of the Participating
Funds, may from time to time instruct Repo Custodian to transfer cash
from the Transaction Account to Custodian.
(b) (i) Whenever on any Banking Day one or more Funds and Seller agree
to enter into a repurchase transaction, Seller and the Participating
Funds, or the Custodian on behalf of the Participating Funds, will
give Repo Custodian proper instructions by telephone or otherwise on
the Sale Date, specifying the Transaction Category, Repurchase Date,
Sale Price, Repurchase Price or the applicable Pricing Rate and the
Margin Percentage for each such repurchase transaction.
(ii) In the case of repurchase transactions in which the Repurchase
Date is the Banking Day next following the Sale Date (x) the
Participating Funds may increase or decrease the Sale Price for any
such repurchase transaction by no more than 10% of the initial Sale
Price by causing to be delivered further proper instructions by
telephone or otherwise to Repo Custodian prior to the close of
business on the Sale Date and (y) Seller and the Participating Funds
may by mutual consent agree to increase or decrease the Sale Price by
more than 10% of the initial Sale Price by causing to be provided
further proper instructions to Repo Custodian by the close of business
on the Sale Date. In any event, Repo Custodian shall not be
responsible for determining whether any such increase or decrease of
the Sale Price exceeds the 10% limitation.
(c) Seller will take such actions as are necessary to ensure that on
the Sale Date the aggregate Market Value of all Securities held by
Repo Custodian for Seller and cash in the Seller Account equals or
exceeds the Margin Percentage of the Sale Price. Seller shall give
Repo Custodian proper instructions specifying with respect to each of
the Securities which is to be the subject of a repurchase transaction
(a) the name of the issuer and the title of the Securities, and (b)
the Market Value of such Securities. Such instructions shall
constitute Seller's instructions to Repo Custodian to transfer the
Securities to the Participating Funds and/or Cash Collateral from the
Seller Account to the Transaction Account.
(d) Prior to the close of business on the Sale Date, the
Participating Funds shall transfer to, or maintain on deposit with,
Repo Custodian in the Transaction Account immediately available funds
in an amount equal to the Sale Price with respect to a particular
repurchase transaction.
(e) Prior to the close of business on the Sale Date, Repo Custodian
shall transfer Securities from Seller to the Participating Funds
and/or cash held in the Seller Account to the Transaction Account and
shall transfer to the Seller Account immediately available funds from
the Transaction Account in accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be
transferred by Seller to the Participating Funds are Eligible
Securities. Any securities which are not Eligible Securities for a
particular repurchase transaction hereunder shall not be included in
the calculations set forth below and shall not be transferred to the
Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value
of the Securities and cash, if any, to be so transferred.
(iii) Repo Custodian shall notify Seller in the event that the
aggregate Market Value of Securities and cash, if any, applicable to
the repurchase transaction is less than the Margin Percentage of the
Sale Price and Seller shall transfer, by the close of business on the
Sale Date, to Repo Custodian additional Securities and/or cash in the
amount of such deficiency. If Seller does not, by the close of
business on the Sale Date, transfer additional Securities and/or cash,
the Market Value of which equals or exceeds such deficiency, Repo
Custodian may, at its option, without notice to Seller, advance the
amount of such deficiency to Seller in order to effectuate the
repurchase transaction. It is expressly agreed that Repo Custodian is
not obligated to make an advance to Seller to enable it to complete
any repurchase transaction.
(iv) Subject to the provisions of Subparagraph (v) below, Repo
Custodian shall cause the Securities applicable to the repurchase
transaction received from Seller to be transferred to the
Participating Funds and shall cause any cash received from Seller to
be transferred to the Transaction Account, against transfer of the
Sale Price from the Transaction Account to the Seller Account, such
transfers of Securities and/or cash and funds to occur simultaneously
on a delivery versus payment basis.
(v) Notwithstanding anything to the contrary, if, for any repurchase
transaction, the amount of immediately available funds in the
Transaction Account is less than the agreed upon Sale Price in
connection with the repurchase transaction immediately prior to
effectuating such repurchase transaction, or if the aggregate Market
Value of the Securities and cash, if any, applicable to such
repurchase transaction is less than the Sale Price multiplied by the
Margin Percentage immediately prior to effectuating such repurchase
transaction, Repo Custodian shall effect the repurchase transaction to
the best of its ability by transferring Securities from Seller to the
Participating Funds and/or cash from the Seller Account to the
Transaction Account with an aggregate Market Value equal to the lesser
of (x) the amount of immediately available funds in the Transaction
Account multiplied by the Margin Percentage and (y) the aggregate
Market Value of the Securities available for transfer from Seller to
the Participating Funds and cash, if any, in the Seller Account,
against the transfer of immediately available funds from the
Transaction Account to the Seller Account in an amount equal to the
aggregate Market Value of the Securities and/or cash to be transferred
divided by the Margin Percentage; provided, however, that in either
such event Repo Custodian shall have the right not to transfer to the
Participating Funds such Securities and not to transfer such cash, if
any, to the Transaction Account and not to transfer from the
designated Transaction Account such funds as Repo Custodian
determines, in its sole discretion, will not be the subject of a
repurchase transaction. The actions of Repo Custodian pursuant to
this subparagraph (e)(v) shall not affect the obligations and
liabilities of the parties to each other pursuant to the Master
Agreement with regard to such repurchase transaction.
(f) In the event that on a Banking Day Seller desires to substitute
Securities applicable to such repurchase transaction with Eligible
Securities and/or Cash Collateral (to the extent provided in the
Master Agreement), Repo Custodian shall perform such substitution in
accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be
transferred to the Participating Funds are Eligible Securities. Any
securities which are not eligible for repurchase transactions
hereunder shall not be included in the calculations set forth below
and shall not be transferred to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value
of the Eligible Securities and/or Cash Collateral to be transferred.
Repo Custodian shall not make any substitution if, at the time of
substitution, the aggregate Market Value of all Securities and any
Cash Collateral applicable to such repurchase transaction immediately
after such substitution would be less than the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were the
date of substitution).
(iii) Repo Custodian shall then deliver to the Seller, subject to the
qualifications set forth above, the Securities to be substituted
against the delivery by Repo Custodian of substitute Eligible
Securities to the Participating Funds and/or the crediting of the
Transaction Account with Cash Collateral.
(iv) In the event Seller has caused Repo Custodian to credit the
Transaction Account with Cash Collateral in lieu of substitute
Eligible Securities, and has failed to deliver Eligible Securities
against such Cash Collateral not later than the close of business on
such Banking Day in accordance with the terms of the Master Agreement,
Repo Custodian shall promptly, but in no event later than 10:00 a.m.
the following Banking Day, notify the Participating Funds and Seller
of such failure.
(g) With respect to each repurchase transaction, at 10:00 a.m. New
York time, or at such other time as specified in proper instructions
of the Participating Funds (or the Custodian on behalf of the
Participating Funds) on the Repurchase Date, Repo Custodian shall
debit the Seller Account and credit the Transaction Account in the
amount of the Repurchase Price and shall transfer Securities from the
Participating Funds to the Seller and Cash Collateral, if any, from
the Transaction Account to the Seller Account in accordance with the
following provisions:
(i) If the amount of available funds in the Seller Account equals or
exceeds the Repurchase Price, Repo Custodian shall debit the Seller
Account and credit the Transaction Account in the amount of the
Repurchase Price and shall transfer all Securities applicable to such
repurchase transaction from the Participating Funds to the Seller and
debit the Transaction Account and credit the Seller Account in the
amount of any Cash Collateral applicable to such repurchase
transaction.
(ii) If the amount of available funds in the Seller Account is less
than the Repurchase Price, then Repo Custodian shall notify the Seller
of the amount of the deficiency and Seller shall promptly cause such
amount to be transferred to the Seller Account. If Seller fails to
cause the transfer of the entire amount of the deficiency to the
Seller Account, then Repo Custodian may, at its option and without
notice to Seller, advance to Seller the amount of such remaining
deficiency. It is expressly agreed that Repo Custodian is not
obligated to make any advance to Seller. If, following such transfer
and/or advance, the amount of available funds in the Seller Account
equals or exceeds the Repurchase Price then Repo Custodian shall debit
the Seller Account and credit the Transaction Account in the amount of
the Repurchase Price and shall transfer from the Participating Funds
to the Seller all Securities applicable to such repurchase transaction
and debit the Transaction Account and credit the Seller Account in the
amount of any Cash Collateral applicable to such repurchase
transaction.
(iii) If the Seller fails to cause the transfer of the entire amount
of the deficiency, as required by (ii) above, and Repo Custodian fails
to advance to Seller an amount sufficient to eliminate the entire
deficiency, then Repo Custodian shall debit the Seller Account in the
amount of all immediately available funds designated by Seller as
applicable to the repurchase transaction and credit the Transaction
Account in such amount (such amount being referred to as the "Partial
Payment") and shall transfer Securities from the Participating Funds
to the Seller such that the aggregate Market Value of all remaining
Securities and Cash Collateral in the Transaction Account with respect
to such repurchase transaction shall at least equal the difference
between Margin Percentage of the Repurchase Price and the Partial
Payment.
5. Payments on Securities. Repo Custodian shall credit to the Seller
Account as soon as received, all principal, interest and other sums
paid by or on behalf of the issuer in respect of the Securities and
collected by Repo Custodian, except as otherwise provided in Paragraph
8 of the Master Agreement.
6. Daily Statement. On each Banking Day on which any Participating
Funds have an outstanding repurchase transaction, Repo Custodian shall
deliver by facsimile to Custodian and to the Participating Funds a
statement identifying the Securities held by Repo Custodian with
respect to such repurchase transaction and the cash and Cash
Collateral, if any, held by Repo Custodian in the Transaction Account,
including a statement of the then current Market Value of such
Securities and the amounts, if any, credited to the Transaction
Account as of the close of trading on the previous Banking Day. Repo
Custodian shall also deliver to Custodian and the Participating Funds
such additional statements as the Participating Funds may reasonably
request.
7. Valuation.
(a) Repo Custodian shall confirm the Market Value of Securities and
the amount of Cash Collateral, if any (i) on the Sale Date prior to
transferring the Sale Price out of the Transaction Account to the
Seller Account against the receipt from Seller of the Securities and
Cash Collateral, if any, and (ii) on each Banking Day on which such
repurchase transaction is outstanding. If on any Banking Day the
aggregate Market Value of the Securities and Cash Collateral with
respect to any repurchase transaction is less than the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Banking Day) for such transaction, Repo Custodian shall
promptly, but in any case no later than 10:00 a.m. the following
Banking Day, notify Seller. If on any Banking Day the aggregate
market value of the Securities and Cash Collateral with respect to any
repurchase transaction is less than the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such
Banking Day) for such transaction, and Seller fails to deliver
additional Eligible Securities applicable to such repurchase
transaction or an additional amount of Cash Collateral by the close of
business on such Banking Day such that the aggregate market value of
the Securities and Cash Collateral at least equals the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Banking Day), Repo Custodian shall promptly, but in any
event no later than 10:00 a.m. the following Banking Day, notify the
Participating Funds of such failure. For purposes of determining
Seller's margin maintenance requirements on the Sale Date for
repurchase transactions in which the Repurchase Date is the Banking
Day immediately following the Sale Date, such aggregate market value
shall equal at least the Margin Percentage of the Sale Price.
(b) Repo Custodian shall determine the bid side portion of the Market
Value of the Securities by reference to the independent pricing
services ("Pricing Services") set forth on Schedule B. It is
understood and agreed that Repo Custodian shall use the prices made
available by the Pricing Services on the Banking Day of such
determination unless Seller and the Participating Funds mutually agree
that some other prices shall be used and so notify Repo Custodian by
proper instructions of the sum of the prices of all such Securities
priced in such different manner. In the event that Repo Custodian is
unable to obtain a valuation of any Securities from the Pricing
Services, Repo Custodian shall request a bid quotation from a broker's
broker or a broker dealer, set forth in Schedule B, other than Seller.
In the event Repo Custodian is unable to obtain a bid quotation for
any Securities from such a broker's broker or a broker dealer, Repo
Custodian (i) shall not include any such Securities in the
determination of whether the aggregate Market Value of the Securities
and any Cash Collateral equals at least the Margin Percentage of the
Repurchase Price and (ii) shall redeliver such Securities to Seller if
the Market Value of all other Securities and any Cash Collateral with
respect to such repurchase transaction equals at least the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Banking Day). The Repo Custodian may rely on prices
quoted by Pricing Services, broker's brokers or broker dealers, except
Seller, as set forth in Schedule B.
(c) (i) If, on any Banking Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase
transaction is less than the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day)
applicable to such repurchase transaction, Repo Custodian shall
deliver to the Participating Funds an amount of additional Eligible
Securities applicable to such repurchase transaction and/or debit the
Seller Account and credit the Transaction Account with an additional
amount of Cash Collateral, such that the aggregate Market Value of all
Securities and any Cash Collateral with respect to such repurchase
transaction shall equal at least the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such
Banking Day) applicable to such repurchase transaction; except that,
for purposes of determining Seller's margin maintenance requirements
on the Sale Date for repurchase transactions in which the Repurchase
Date is the Banking Day immediately following the Sale Date, such
aggregate market value shall equal at least the Margin Percentage of
the Sale Price.
(ii) If, on any Banking Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase
transaction exceeds the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day)
applicable to such repurchase transaction, Repo Custodian shall return
to the Seller all or a portion of such Securities or Cash Collateral,
if any; provided that the Market Value of the remaining Securities and
any Cash Collateral with respect to the repurchase transaction shall
be at least equal to the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Banking Day)
applicable to such repurchase transaction. At any time and from time
to time with respect to any repurchase transaction, if authorized by
the Participating Funds, or the Custodian on behalf of the
Participating Funds, the Repo Custodian shall debit the Transaction
Account by an amount of Cash Collateral and credit the Seller Account
by the same amount of Cash Collateral against simultaneous delivery
from Seller to the Participating Funds of Eligible Securities
applicable to such repurchase transaction with a Market Value at least
equal to the amount of Cash Collateral credited and debited.
8. Authorized Persons. Schedule C hereto sets forth those persons
who are authorized to act for Repo Custodian, Custodian, Seller and
the Funds, respectively, under this Agreement.
9. Proper Instructions. Proper instructions shall mean a tested
telex, facsimile, a written request, direction, instruction or
certification signed or initialed by or on behalf of the party giving
the instructions by one or more authorized persons (as provided in
Paragraph 8); provided, however, that no instructions directing the
delivery of Securities or the payment of funds to any individual who
is an authorized signatory of Custodian or Repo Custodian shall be
signed by that individual. Telephonic, other oral or
electro-mechanical or electronic instructions (including the code
which may be assigned by Repo Custodian to Custodian from time to
time) given by one of the above authorized persons shall also be
considered proper instructions if the party receiving such
instructions reasonably believes them to have been given by an
authorized person with respect to the transaction involved. Oral
instructions will be confirmed by tested telex, facsimile or in
writing in the manner set forth above. The Funds authorize Repo
Custodian to tape record any and all telephonic or other oral
instructions given to Repo Custodian. Proper instructions may relate
to specific transactions or to types or classes of transactions, and
may be in the form of standing instructions.
10. Standard of Care.
(a) Repo Custodian shall be obligated to exercise reasonable care and
diligence in carrying out the provisions of this Agreement and the
Master Agreement and shall be liable to each of the Funds and Seller
for any expenses or damages to the Funds or Seller for breach of Repo
Custodian's standard of care in this Agreement, as further provided in
this Paragraph. Repo Custodian assumes responsibility for loss to any
property held by it pursuant to the provisions of this Agreement which
is occasioned by the negligence of, or conversion, misappropriation or
theft by, Repo Custodian's officers, employees and agents. Repo
Custodian, at its option, may insure itself against loss from any
cause but shall be under no obligation to obtain insurance directly
for the benefit of the Funds. So long as and to the extent that Repo
Custodian exercises reasonable care and diligence and acts without
negligence, misfeasance or misconduct, Repo Custodian shall not be
liable to Seller or the Funds for (i) any action taken or omitted in
good faith in reliance upon proper instructions, (ii) any action taken
or omitted in good faith upon any notice, request, certificate or
other instrument reasonably believed by it to be genuine and to be
signed by the proper party or parties, (iii) any delay or failure to
act as may be required under this Agreement or under the Master
Agreement when such delay or failure is due to any act of God or war,
(iv) the actions or omissions of a Securities System, (v) the title,
validity or genuineness of any security received, delivered or held by
it pursuant to this Agreement or the Master Agreement, (vi) the
legality of the purchase or sale of any Securities by or to the
Participating Funds or Seller or the propriety of the amount for which
the same are purchased or sold (except to the extent of Repo
Custodian's obligations hereunder to determine whether securities are
Eligible Securities and to calculate the Market Value of Securities
and any Cash Collateral), (vii) the due authority of any person listed
on Schedule C to act on behalf of Custodian, Seller or the Funds, as
the case may be, with respect to this Agreement or (viii) the errors
of the Pricing Services, broker's brokers or broker dealers set forth
in Schedule B.
(b) Repo Custodian shall not be liable to Seller or the Funds for, or
considered to be the custodian of, any Eligible Securities or any
money to be used in a repurchase transaction, whether or not such
money is represented by any check, draft, or other instrument for the
payment of money, until the Eligible Securities have been delivered in
accordance with Paragraph 3 or until Repo Custodian actually receives
and collects such money on behalf of Seller or the Funds directly or
by the final crediting of the Seller Account or a Transaction Account
through the Securities System, except that this Paragraph 10(b) shall
not be deemed to limit the liability of Repo Custodian to Seller or
the Funds if the non-delivery of such Eligible Securities or the
failure to receive and collect such money results from the breach by
Repo Custodian of its obligations under this Agreement or the Master
Agreement.
(c) Repo Custodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by
it are such as properly may be held by the Participating Funds;
provided that notwithstanding anything to the contrary herein, Repo
Custodian shall be obligated to act in accordance with the guidelines
and proper instructions of the Participating Funds, or the Custodian
on behalf of the Participating Funds, with respect to the types of
Eligible Securities and the issuers of such Eligible Securities that
may be used in specific repurchase transactions.
(d) Repo Custodian promptly shall notify the Fund Agent and the
Custodian if Securities held by Repo Custodian are in default or if
payment on any Securities has been refused after due demand and
presentation and Repo Custodian shall take action to effect collection
of any such amounts upon the proper instructions of the Participating
Funds, or the Custodian on behalf of the Participating Funds, and
assurances satisfactory to it that it will be reimbursed for its costs
and expenses in connection with any such action.
(e) Repo Custodian shall have no duties, other than such duties as
are necessary to effectuate repurchase transactions in accordance with
this Agreement and the Master Agreement within the standard of care
set forth in Paragraph 10(a) above and in a commercially reasonable
manner.
11. Representations and Additional Covenants of Repo Custodian.
(a) Repo Custodian represents and warrants that (i) it is duly
authorized to execute and deliver this Agreement and to perform its
obligations hereunder and has taken all necessary action to authorize
such execution, delivery and performance, (ii) the execution, delivery
and performance of this Agreement do not and will not violate any
ordinance, declaration of trust, partnership agreement, articles of
incorporation, charter, rule or statute applicable to it or any
agreement by which it is bound or by which any of its assets are
affected, (iii) the person executing this Agreement on its behalf is
duly and properly authorized to do so, (iv) it has (and will maintain)
a copy of this Agreement and evidence of its authorization in its
official books and records, and (v) this Agreement has been executed
by one of its duly authorized officers at the level of Vice President
or higher.
(b) Repo Custodian further represents and warrants that (i) it has
not pledged, encumbered, hypothecated, transferred, disposed of, or
otherwise granted, any third party an interest in any Securities, (ii)
it does not have any security interest, lien or right of setoff in the
Securities, and (iii) it has not been notified by any third party, in
its capacity as Repo Custodian, custodian bank or clearing bank, of
the existence of any lien, claim, charge or encumbrance with respect
to any Securities that are the subject of such repurchase transaction.
Repo Custodian agrees that (i) it will not pledge, encumber,
hypothecate, transfer, dispose of, or otherwise grant, any third party
an interest in any Securities, (ii) it will not acquire any security
interest, lien or right of setoff in the Securities, and (iii) it will
promptly notify the Fund Agent, if, during the term of any outstanding
repurchase transaction, it is notified by any third party, in its
capacity as Repo Custodian, custodian bank or clearing bank, of the
Participating Funds or Seller, of the existence of any lien, claim,
charge or encumbrance with respect to any Securities that are the
subject of such repurchase transaction.
12. Indemnification.
(a) Notwithstanding the Participating Fund's obligation to the Repo
Custodian under Paragraph 12(b) below, so long as and to the extent
that Repo Custodian is in the exercise of reasonable care and
diligence and acts without negligence, misfeasance or misconduct,
Seller will indemnify Repo Custodian and hold it harmless against any
and all losses, claims, damages, liabilities or actions to which it
may become subject, and reimburse it for any expenses (including
attorneys' fees and expenses) incurred by it in connection therewith,
insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon or in any way related to this Agreement, the
Master Agreement or those arrangements. Without limiting the
generality of the foregoing indemnification, Repo Custodian shall be
indemnified by Seller for all costs and expenses, including attorneys'
fees, for its successful defense against claims that Repo Custodian
breached its standard of care and was negligent or engaged in
misfeasance or misconduct.
(b) So long as and to the extent that Repo Custodian is in the
exercise of reasonable care and diligence and acts without negligence,
misconduct or misfeasance, the Participating Funds will indemnify Repo
Custodian and hold it harmless against any and all losses, claims,
damages, liabilities or actions to which it may become subject, and
reimburse it for any expenses (including attorneys' fees and expenses)
incurred by it in connection therewith, insofar as such losses,
claims, damages, liabilities or actions result from the negligence,
misconduct or misfeasance of the Participating Funds under this
Agreement.
13. Rights and Remedies. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any
thereof shall not preclude or inhibit the exercise of any additional
rights and remedies.
14. Modification or Amendment. Except as otherwise provided in this
Paragraph 14, no modification, waiver or amendment of this Agreement
shall be binding unless in writing and executed by the parties hereto.
Schedule A, listing the Funds, may be amended from time to time to add
or delete Funds by the Funds (i) delivering an executed copy of an
addendum to Schedule A to Seller and Repo Custodian, and (ii)
amending Schedule A to the Master Agreement in accordance with the
provisions therein. The amendment of Schedule A as provided above
shall constitute appointment of Repo Custodian as a custodian for such
Fund. Schedule B may be amended from time to time by an instrument in
writing, or counterpart thereof, executed by Repo Custodian, Seller
and the Funds. Schedule C may be amended from time to time to change
an authorized person of: (i) the Funds, by written notice to Repo
Custodian and Seller by Ms. Sarah Zenoble or the Treasurer of the
Funds (or such persons who may be authorized from time to time in
writing by Ms. Zenoble or the President or Treasurer of Fidelity
Management and Research Company to trade on behalf of Fidelity's
taxable money market funds); (ii) Seller, by written notice to Repo
Custodian and the Funds by any Vice President of Seller; (iii) Repo
Custodian, by written notice to Seller, Custodian and the Funds by any
Vice President of Repo Custodian; and (iv) Custodian, by written
notice to Repo Custodian by any Vice President of Custodian. Schedule
D may be amended from time to time by any party hereto by delivery of
written notice to the other parties hereto. Repo Custodian shall
receive notice of any amendment to the Master Agreement at the address
set forth in Schedule D hereto; and, if such amendment would have a
material adverse effect on the rights of, or would materially increase
the obligations of Repo Custodian under this Agreement, any such
amendment shall also require the consent of Repo Custodian. Any such
amendment shall be deemed not to be material if Repo Custodian fails
to object in writing within 21 days after receipt of notice thereof.
No amendment to this Agreement shall affect the rights or obligations
of any Fund with respect to any outstanding repurchase transaction
entered into under this Agreement and the Master Agreement prior to
such amendment or with respect to any actions or omissions by any
party hereto prior to such amendment. In the event of conflict
between this Agreement and the Master Agreement, the Master Agreement
shall control.
15. Termination. This Agreement shall terminate forthwith upon
termination of the Master Agreement or may be terminated by any party
hereto on ten Banking Days' written notice to the other parties;
provided, however, that any such termination shall not affect any
repurchase transaction then outstanding or any rights or obligations
under this Agreement or the Master Agreement with respect to any
actions or omissions of any party hereto prior to termination. In the
event of termination, Repo Custodian will deliver any Securities, Cash
Collateral or cash held by it or any agent to Custodian or to such
successor custodian or custodian or subcustodian as the Participating
Funds shall instruct.
16. Compensation. Seller agrees to pay Repo Custodian compensation
for the services to be rendered hereunder, based upon rates which
shall be agreed upon from time to time.
17. Notices. Except with respect to communications between Custodian
and the Funds which shall be governed by the custodian agreement or
subcustodian agreement between such parties, as the case may be, and
except as otherwise provided herein or as the parties to the Agreement
shall from time to time otherwise agree, all instructions, notices,
reports and other communications contemplated by this Agreement shall
be given to the party entitled to receive such notice at the telephone
number and address listed on Schedule D hereto.
18. Severability. If any provision of this Agreement is held to be
unenforceable as a matter of law, the other terms and provisions
hereof shall not be affected thereby and shall remain in full force
and effect.
19. Binding Nature. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their successors and
assignees; provided that, no party hereto may assign this Agreement or
any of the rights or obligations hereunder without the prior written
consent of the other parties.
20. Headings. Section headings are for reference purposes only and
shall not be construed as a part of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one
instrument.
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
23. Limitation of Liability. Seller is hereby expressly put on
notice that the Declarations of Trust or the Certificates and
Agreements of Limited Partnership, as the case may be, of each
Participating Fund contain a limitation of liability provision
pursuant to which the obligations assumed by such Participating Fund
hereunder shall be limited in all cases to such Participating Fund and
its assets or, in the case of a series Fund, to the assets of that
series only, and neither Seller nor its respective agents or assigns
shall seek satisfaction of any such obligation from the officers,
employees, agents, directors, trustees, shareholders or partners of
any such Participating Fund or series.
24. Rights and Obligations of Each Fund. The rights and obligations
set forth in this Agreement with respect to each repurchase
transaction shall accrue only to the Participating Funds in accordance
with their respective interests therein. No other Fund shall receive
any rights or have any liabilities arising from any action or inaction
of any Participating Fund under this Agreement with respect to such
repurchase transaction.
25. General Provisions. This Agreement supersedes any other
custodian agreement by and among Seller, the Funds, and Repo Custodian
concerning repurchase transactions effected through the Joint Trading
Account. It is understood and agreed that time is of the essence with
respect to the performance of each party's respective obligations
hereunder.
26. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a) In the case of transactions in which one of the parties is a
broker or dealer registered with the SEC under Section 15 of the
Exchange Act, the Securities Investor Protection Corporation has taken
the position that the provisions of the Securities Investor Protection
Act of 1970 (the "SIPA") do not protect the other party with respect
to any transaction hereunder; and
(b) In the case of transactions in which one of the parties is a
government securities broker or a government securities dealer
registered with the SEC under Section 15C of the Exchange Act, SIPA
will not provide protection to the other party with respect to any
transaction hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
PRICING SOURCES
PRICING SERVICES
U.S. Government Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller
and the Funds)
GNMA - The Bond Buyer
FHLMC - The Bond Buyer
All other U.S. Government
and Agency Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller
and the Funds)
BROKERS' BROKERS AND BROKER DEALERS
U.S. Government Securities - Any Primary Dealer
GNMA - Any Primary Broker-Dealer's bid rate for such security
FHLMC - Any Primary Broker-Dealer's bid rate for such security
All other U.S. Government and Agency Securities - Any Primary
Broker-Dealer's bid rate for such security
Prices shall be as of the business day of the date of determination
or the last quote available. The pricing services, Brokers' Brokers
and Broker Dealers may be changed from time to time by agreement of
all the parties.

SCHEDULE C
AUTHORIZED PERSONS
Repo Custodian
Ken Rindos
Kurt Woetzel
Custodian
Ken Rindos
Kurt Woetzel
Seller
Joseph P. Blauvelt
Michael B. Boyer
Robert E. Curry
Patrick Doyle
Frank Forgione
Edward J. Frederick
Christopher Juliano
Joseph Marrone
Thomas T. McGee
John S. Mehrtens
John A. Michielini
Allen Smith, II
The Funds
Barron, Leland C. Harlow, Katharyn M. Stehman, Burnell R.
Carbone, John M. Henning, Frederick L. Jr. Todd, Deborah
Curtis, Fritz Huyck, Timothy Todd, John J.
Duby, Robert K. Jamen, Jon Torres, Joseph E.
Egan, Dorothy T. Litterst, Robert Williams, Richard
Glocke, David Silver, Samuel Zenoble, Sarah

SCHEDULE D
NOTICES
If to Custodian: The Bank of New York
One Wall Street, 4th Floor
New York, NY 10286
Telephone: (212) 635-7947
Attention: Sherman Yu, Esq.
With a copy to the Fund Agent
If to Repo Custodian: The Bank of New York
One Wall Street, 4th Floor
New York, New York 10286
Telephone: (212) 635-4809
Attention: Ms. Kristin Smith
If to Seller: J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Telephone: (212) 483-2323
Attention: Middle Office Traders Support
If to any of the Funds: FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah R. Todd or
Mr. Samuel Silver
If to the Fund Agent: Fidelity Investments
[Name of Fund]
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 584-4071
Attention: Mr. Mark Mufler
277282.c1
Exhibit 8(m)
FORM OF
SCHEDULE 1

The following lists the additional counterparties to the Repo
Custodian Agreement for Joint Trading Account between The Bank of New
York and the Fidelity Funds:

BZW Government Securities, Inc.
CS First Boston Corp.
Daiwa Securities America, Inc.
Deutsche Bank Securities Corp.
Donaldson, Lufkin & Jenerette Securities Corp.
Fuji Securities, Inc.
Goldman Sachs & Co
Morgan Stanley & Co., Inc.
NationsBanc Capital Markets
Nikko Securities Co. International, Inc.
Nomura Securities International, Inc.
Prudential Securities, Inc.
Salomon Brothers, Inc.
Sanwa BJK Securities Co., LP
SBC Capital Markets, Inc.
Smith Barney, Inc.

Exhibit 8(n)
Form of
FIDELITY GROUP
REPO CUSTODIAN AGREEMENT
FOR JOINT TRADING ACCOUNT
AGREEMENT dated as of ________, among CHEMICAL BANK, a banking
corporation organized under the laws of the State of New York ("Repo
Custodian"), GREENWICH CAPITAL MARKETS, INC. ("Seller") and each of
the entities listed on Schedule A-1, A-2, A-3 and A-4 hereto acting on
behalf of itself or (i) in the case of a series company, on behalf of
one or more of its portfolios or series listed on Schedule A-1 or A-2
hereto, (ii) in the case of the accounts listed on Schedule A-3
hereto, acting through Fidelity Management & Research Company, and
(iii) in the case of the commingled or individual accounts listed on
Schedule A-4 hereto, acting through Fidelity Management Trust Company
(collectively, the "Funds" and each, a "Fund").
WITNESSETH
WHEREAS, each of the Funds has entered into a master repurchase
agreement dated as of _____________, (the "Master Agreement") with
Seller pursuant to which from time to time one or more of the Funds,
as buyers, and Seller, as seller, may enter into repurchase
transactions effected through one or more joint trading accounts
(collectively, the "Joint Trading Account") established and
administered by one or more custodians of the Funds identified on
Schedule C hereto (each a "Custodian"); and,
WHEREAS, in each such repurchase transaction Seller will sell to such
Funds certain Securities (as hereinafter defined) selected from
Eligible Securities (as hereinafter defined) held by Repo Custodian ,
subject to an agreement by Seller to repurchase such Securities; and
WHEREAS, Repo Custodian currently maintains a cash and securities
account (the "Seller Account") for Seller for the purpose of, among
other things, effecting repurchase transactions hereunder; and
WHEREAS, the Funds desire that the Repo Custodian serve as the
custodian for each of the Funds in connection with the repurchase
transactions effected hereunder, and that the Repo Custodian hold
cash, Cash Collateral (as hereinafter defined) and Securities for each
of the Funds for the purpose of effecting repurchase transactions
hereunder.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Banking Day" shall mean any day on which the Funds, Seller
Custodian, Repo Custodian, and the Federal Reserve Banks where the
Custodian and the Repo Custodian are located, are each open for
business.
(b) "Cash Collateral" shall mean all cash, denominated in U.S.
Dollars, credited by Repo Custodian to a Transaction Account pursuant
to Paragraphs 3, 6, 8 or 9 of the Master Agreement.
(c) "Custodian" shall have the meaning set forth in the preamble of
this Agreement.
(d) "Eligible Securities" shall mean those securities which are
identified as permissible securities for a particular Transaction
Category.
(e) "FICASH I Transaction" and "FICASH III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is the Banking Day
next following the Sale Date and for which securities issued by the
government of the United States of America that are direct obligations
of the government of the United States of America shall constitute
Eligible Securities.
(f) "FICASH II Transaction" shall mean a repurchase transaction in
which the Repurchase Date is the Banking Day next following the Sale
Date and for which one or more of the following two categories of
securities, as specified by the Funds, shall constitute Eligible
Securities: (x) securities issued by the government of the United
States of America that are direct obligations of the government of the
United States of America, or (y) securities issued by or guaranteed as
to principal and interest by the government of the United States of
America, or by its agencies and/or instrumentalities, including, but
not limited to, the Federal Home Loan Bank, Federal Home Loan Mortgage
Corp., Government National Mortgage Association, Federal National
Mortgage Association, Federal Farm Credit Bank, Federal Intermediate
Credit Bank, Banks for Cooperatives, and Federal Land Banks.
(g) "FITERM I Transaction" and "FITERM III Transaction" shall mean a
repurchase transaction in which the Repurchase Date is a date fixed by
agreement between Seller and the Participating Funds which is not the
Banking Day next following the Sale Date, or if applicable, the date
fixed upon exercise of an Unconditional Resale Right (as hereinafter
defined) by the Participating Funds and for which securities issued by
the government of the United States of America that are direct
obligations of the government of the United States of America shall
constitute Eligible Securities.
(h) "FITERM II Transaction" shall mean a repurchase transaction in
which the Repurchase Date is a date fixed by agreement between Seller
and the Participating Funds which is not the Banking Day next
following the Sale Date, or, if applicable, the date fixed upon
exercise of an Unconditional Resale Right (as hereinafter defined) by
the Participating Funds and for which one or more of the following two
categories of securities, as specified by the Funds, shall constitute
Eligible Securities: (x) securities issued by the government of the
United States of America that are direct obligations of the government
of the United States of America, or (y) securities issued by or
guaranteed as to principal and interest by the government of the
United States of America, or by its agencies and/or instrumentalities,
including, but not limited to, the Federal Home Loan Bank, Federal
Home Loan Mortgage Corp., Government National Mortgage Association,
Federal National Mortgage Association, Federal Farm Credit Bank,
Federal Intermediate Credit Bank, Banks for Cooperatives, and Federal
Land Banks.
(i) "Fund" shall have the meaning set forth in the preamble of this
Agreement.
(j) "Fund Agent" shall mean the agent for the Participating Funds
designated in Paragraph 18 of the Master Agreement.
(k) "Joint Trading Account" shall have the meaning set forth in the
preamble of this Agreement.
(l) "Margin Percentage" with respect to any repurchase transaction
shall be 102% or such other percentage as is agreed to by Seller and
the Participating Funds (except that in no event shall the Margin
Percentage be less than 100%).
(m) "Market Value" shall have the meaning set forth in Paragraph 4 of
the Master Agreement.
(n) "Master Agreement" shall have the meaning set forth in the
preamble of this Agreement.
(o) "1940 Act" shall mean have the meaning set forth in Paragraph
3(c) of this Agreement.
(p) "Partial Payment" shall have the meaning set forth in Section
4(g) of this Agreement.
(q) "Participating Funds" shall mean those Funds that are parties to
a particular repurchase transaction effected through the Joint Trading
Account.
(r) "Pricing Rate" shall mean the per annum percentage rate agreed to
by Seller and the Participating Funds for a particular repurchase
transaction.
(s) "Pricing Services" shall have the meaning set forth in Paragraph
7 of this Agreement.
(t) "Repo Custodian" shall have the meaning set forth in the preamble
of this Agreement.
(u) "Repurchase Date" shall mean the date fixed by agreement between
Seller and the Participating Funds on which the Seller is to
repurchase Securities and Cash Collateral, if any, from the
Participating Funds and the Participating Funds are to resell the
Securities and Cash Collateral, if any, including any date determined
by application of the provisions of Paragraphs 7(a) and 15 of the
Master Agreement.
(v) "Repurchase Price" for each repurchase transaction shall mean the
Sale Price, plus an incremental amount determined by applying the
Pricing Rate to the Sale Price, calculated on the basis of a 360-day
year and the number of actual days elapsed from (and including) the
Sale Date to (but excluding) the Repurchase Date.
(w) "Sale Date" shall mean the Banking Day on which Securities and
Cash Collateral, if any, are to be sold to the Participating Funds by
Seller pursuant to a repurchase transaction hereunder.
(x) "Sale Price" shall mean the price agreed upon by the
Participating Funds and Seller at which the Securities and Cash
Collateral, if any, are to be sold to the Participating Funds by
Seller.
(y) "Securities" shall mean all Eligible Securities delivered by
Seller or to be delivered by Seller to the Participating Funds
pursuant to a particular repurchase transaction and not yet
repurchased hereunder, together with all rights related thereto and
all proceeds thereof.
(z) "Securities System" shall have the meaning set forth in Paragraph
3(c) of this Agreement.
(aa) "Seller" shall have the meaning set forth in the preamble to
this Agreement.
(bb) "Seller Account" shall have the meaning set forth in the
preamble of this Agreement.
(cc) "Transaction Account" shall mean a cash account established and
maintained by Repo Custodian for the Funds to effect repurchase
transactions pursuant to the Master Agreement.
(dd) "Transaction Category" shall mean the particular type of
repurchase transaction effected hereunder, as determined with
reference to the term of the transaction and the categories of
Securities that constitute Eligible Securities therefor, which term
shall include FICASH I Transactions, FICASH II Transactions, FICASH
III Transactions, FITERM I Transactions, FITERM II Transactions,
FITERM III Transactions, and such other transaction categories as may
from time to time be designated by the Funds by notice to Seller,
Custodian and Repo Custodian.
(ee) "Unconditional Resale Right" shall have the meaning set forth
in Paragraph 7(b) of the Master Agreement.
(ff) "Valuation Day" shall mean any day on which Repo Custodian is
open for business.
2. Appointment of Repo Custodian. Upon the terms and conditions set
forth in this Agreement, Repo Custodian is hereby appointed by the
Funds to act as the custodian for the Participating Funds to hold
cash, Cash Collateral and Securities for the purpose of effecting
repurchase transactions for the Participating Funds through the Joint
Trading Account pursuant to the Master Agreement. Repo Custodian
hereby acknowledges the terms of the Master Agreement between the
Funds and Seller (attached as an Exhibit hereto), as amended from time
to time, and agrees to abide by the provisions thereof to the extent
such provisions relate to the responsibilities and operations of Repo
Custodian hereunder.
3. Maintenance of Transaction Accounts.
(a) Repo Custodian shall establish and maintain one or more
Transaction Accounts for the purpose of effecting repurchase
transactions hereunder for the Funds, in each case pursuant to the
Master Agreement. From time to time the Funds may cause Custodian, on
behalf of the Funds, to deposit Securities and cash with Repo
Custodian in the designated Transaction Account, in each case in
accordance with Paragraph 3 of the Master Agreement.
(b) Repo Custodian shall keep all Securities, cash and Cash
Collateral received for the Participating Funds segregated at all
times from those of any other person, firm or corporation in its
possession and shall identify all such Securities, cash and Cash
Collateral as subject to this Agreement and the Master Agreement.
Segregation may be accomplished by physical segregation with respect
to certificated securities held by the Repo Custodian and, in
addition, by appropriate identification on the books and records of
Repo Custodian in the case of all other Securities, cash and Cash
Collateral. Title to all Securities and Cash Collateral under a
repurchase transaction shall pass to the Participating Funds that are
parties to such repurchase transaction. All such Securities and Cash
Collateral shall be held by Repo Custodian for the Participating
Funds, and shall be subject at all times to the proper instructions of
the Participating Funds, or the Custodian on behalf of the
Participating Funds, with respect to the holding, transfer or
disposition of such Securities and Cash Collateral. Repo Custodian
shall include in its records for each Transaction Account all
instructions received by it which evidence an interest of the
Participating Funds in the Securities and Cash Collateral and shall
hold physically segregated any written agreement, receipt or other
writing received by it which evidences an interest of the
Participating Funds in the Securities and Cash Collateral.
(c) Any requirement to "deliver" or "transfer" cash or Cash
Collateral to the Participating Funds or to "credit" a Transaction
Account under this or any other paragraph of this Agreement shall be
made in immediately available funds. If Repo Custodian is required to
"deliver" or "transfer" Securities to the Participating Funds under
this or any other paragraph of this Agreement, Repo Custodian shall
take, or cause to be taken, the following actions to perfect the
Participating Funds' interest in such Securities as an outright
purchaser: (i) in the case of certificated securities and instruments
held by Seller, by physical delivery of the share certificates or
other instruments representing the Securities and by physical
segregation of such certificates or instruments from the Repo
Custodian's other assets in a manner indicating that the Securities
are being held for the Participating Funds (such securities and
instruments to be delivered in form suitable for transfer or
accompanied by duly executed instruments of transfer or assignment in
blank and accompanied by such other documentation as the Participating
Funds may request), (ii) in the case of Securities held in a customer
only account in a clearing agency or federal book-entry system
authorized for use by the Funds and meeting the requirements of Rule
17f-4 under the Investment Company Act of 1940, as amended (the "1940
Act") (such authorized agency or system being referred to herein as a
"Securities System"), by appropriate entry on the books and records of
Repo Custodian identifying the Securities as belonging to the
Participating Funds, or (iii) in the case of Securities held in Repo
Custodian's own account in a Securities System, by transfer to a
customer only account in the Securities System and by appropriate
entry on the books and records of Repo Custodian identifying such
Securities as belonging to the Participating Funds; provided, further,
that Repo Custodian shall confirm to the Participating Funds the
identity of the Securities transferred or delivered. Acceptance of a
"due bill", "trust receipt" or similar receipt or notification of
segregation issued by a third party with respect to Securities held by
such third party shall not constitute good delivery of Securities to
Repo Custodian for purposes of this Agreement or the Master Agreement
and shall expressly violate the terms of this Agreement and the Master
Agreement. The Funds shall identify by notice to Repo Custodian and
Seller those agencies or systems which have been approved by the Funds
for use under this Agreement and the Master Agreement. The Funds
hereby notify Repo Custodian and Seller that the following agencies
and systems have been approved by the Funds for use under this
Agreement and the Master Agreement, until such time as Repo Custodian
and Seller shall have been notified by the Funds to the contrary: (i)
Participants Trust Company; (ii) The Depository Trust Company; and
(iii) any book-entry system as provided in (A) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (B) Subpart B of Treasury Circular
Public Debt Series No. 27-76, 31 CFR 350.2, or (C) the book-entry
regulations of federal agencies substantially in the form of 31 CFR
306.115.
4. Repurchase Transactions.
(a) Repo Custodian shall make all credits and debits to the
Transaction Account and effect the transfer of Securities to or from
the Participating Funds upon proper instructions received from the
Participating Funds, or the Custodian on behalf of the Participating
Funds, and shall make all credits and debits to the Seller Account and
effect the transfer of Securities to or from the Seller upon proper
instructions received from Seller. In the event that Repo Custodian
receives conflicting proper instructions from Seller and the
Participating Funds, or the Custodian on behalf of the Participating
Funds, Repo Custodian shall follow the Participating Funds' or the
Custodian's proper instructions. The Participating Funds shall give
Repo Custodian only such instructions as shall be permitted by the
Master Agreement. Notwithstanding the preceding sentence, the
Participating Funds, or the Custodian on behalf of the Participating
Funds, may from time to time instruct Repo Custodian to transfer cash
from the Transaction Account to Custodian so long as such transfer is
not in contravention of the Master Agreement.
(b) (i) Whenever on any Banking Day one or more Funds and Seller agree
to enter into a repurchase transaction, Seller and the Participating
Funds, or the Custodian on behalf of the Participating Funds, will
give Repo Custodian proper instructions by telephone or otherwise by
5:00 p.m. New York time on the Sale Date, specifying the Transaction
Category, Repurchase Date, Sale Price, Repurchase Price or the
applicable Pricing Rate and the Margin Percentage for each such
repurchase transaction.
(ii) In the case of repurchase transactions in which the Repurchase
Date is the Banking Day next following the Sale Date (x) the
Participating Funds may increase or decrease the Sale Price for any
such repurchase transaction by no more than 10% of the initial Sale
Price by causing to be delivered further proper instructions by
telephone or otherwise to Repo Custodian by 5:15 p.m. New York time
(or at such later time as may be agreed upon by the parties) on the
Sale Date and (y) Seller and the Participating Funds may by mutual
consent agree to increase or decrease the Sale Price by more than 10%
of the initial Sale Price by causing to be provided further proper
instructions to Repo Custodian by the close of business on the Sale
Date. In any event, Repo Custodian shall not be responsible for
determining whether any such increase or decrease of the Sale Price
exceeds the 10% limitation.
(c) Seller will take such actions as are necessary to ensure that on
the Sale Date the aggregate Market Value of all Securities held by
Repo Custodian for Seller and cash in the Seller Account equals or
exceeds the Margin Percentage of the Sale Price. Seller shall give
Repo Custodian proper instructions specifying with respect to each of
the Securities which is to be the subject of a repurchase transaction
(a) the name of the issuer and the title of the Securities, and (b)
the Market Value of such Securities. Such instructions shall
constitute Seller's instructions to Repo Custodian to transfer the
Securities to the Participating Funds and/or Cash Collateral from the
Seller Account to the Transaction Account.
(d) By 5:00 p.m. New York Time on the Sale Date, the Participating
Funds shall transfer to, or maintain on deposit with, Repo Custodian
in the Transaction Account immediately available funds in an amount
equal to the Sale Price with respect to a particular repurchase
transaction.
(e) Prior to the close of business on the Sale Date, Repo Custodian
shall transfer Securities from Seller to the Participating Funds
and/or cash held in the Seller Account to the Transaction Account and
shall transfer to the Seller Account immediately available funds from
the Transaction Account in accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be
transferred by Seller to the Participating Funds are Eligible
Securities. Any securities which are not Eligible Securities for a
particular repurchase transaction hereunder shall not be included in
the calculations set forth below and shall not be transferred to the
Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value
of the Securities and cash, if any, to be so transferred.
(iii) Repo Custodian shall notify Seller in the event that the
aggregate Market Value of Securities and cash, if any, applicable to
the repurchase transaction is less than the Margin Percentage of the
Sale Price and Seller shall transfer, by the close of business on the
Sale Date, to Repo Custodian additional Securities and/or cash in the
amount of such deficiency. If Seller does not, by the close of
business on the Sale Date, transfer additional Securities and/or cash,
the Market Value of which equals or exceeds such deficiency, Repo
Custodian may, at its option, without notice to Seller, advance the
amount of such deficiency to Seller in order to effectuate the
repurchase transaction. It is expressly agreed that Repo Custodian is
not obligated to make an advance to Seller to enable it to complete
any repurchase transaction.
(iv) Subject to the provisions of Subparagraph (v) below, Repo
Custodian shall cause the Securities applicable to the repurchase
transaction received from Seller to be transferred to the
Participating Funds and shall cause any cash received from Seller to
be transferred to the Transaction Account, against transfer of the
Sale Price from the Transaction Account to the Seller Account, such
transfers of Securities and/or cash and funds to be deemed to occur
simultaneously.
(v) Notwithstanding anything to the contrary, if, for any repurchase
transaction, the amount of immediately available funds in the
Transaction Account is less than the agreed upon Sale Price in
connection with the repurchase transaction immediately prior to
effectuating such repurchase transaction, or if the aggregate Market
Value of the Securities and cash, if any, applicable to such
repurchase transaction is less than the Sale Price multiplied by the
Margin Percentage immediately prior to effectuating such repurchase
transaction, Repo Custodian shall effect the repurchase transaction to
the best of its ability by transferring Securities from Seller to the
Participating Funds and/or cash from the Seller Account to the
Transaction Account with an aggregate Market Value equal to the lesser
of (x) the amount of immediately available funds in the Transaction
Account multiplied by the Margin Percentage and (y) the aggregate
Market Value of the Securities available for transfer from Seller to
the Participating Funds and cash, if any, in the Seller Account,
against the transfer of immediately available funds from the
Transaction Account to the Seller Account in an amount equal to the
aggregate Market Value of the Securities and/or cash to be transferred
divided by the Margin Percentage; provided, however, that in either
such event Repo Custodian shall have the right not to transfer to the
Participating Funds such Securities and not to transfer such cash, if
any, to the Transaction Account and not to transfer from the
designated Transaction Account such funds as Repo Custodian
determines, in its sole discretion, will not be the subject of a
repurchase transaction. The actions of Repo Custodian pursuant to
this subparagraph (e)(v) shall not affect the obligations and
liabilities of the parties to each other pursuant to the Master
Agreement with regard to such repurchase transaction.
(f) In the event that on a Banking Day Seller desires to substitute
Securities applicable to such repurchase transaction with Eligible
Securities and/or Cash Collateral (to the extent provided in the
Master Agreement), Repo Custodian shall perform such substitution in
accordance with the following provisions:
(i) Repo Custodian shall determine that all securities to be
transferred to the Participating Funds are Eligible Securities. Any
securities which are not eligible for repurchase transactions
hereunder shall not be included in the calculations set forth below
and shall not be transferred to the Participating Funds.
(ii) Repo Custodian shall then calculate the aggregate Market Value
of the Eligible Securities and/or Cash Collateral to be transferred.
Repo Custodian shall not make any substitution if, at the time of
substitution, the aggregate Market Value of all Securities and any
Cash Collateral applicable to such repurchase transaction immediately
after such substitution would be less than the Margin Percentage of
the Repurchase Price (calculated as if the Repurchase Date were the
date of substitution).
(iii) Repo Custodian shall then deliver to the Seller, subject to the
qualifications set forth above, the Securities to be substituted
against the delivery by Repo Custodian of substitute Eligible
Securities to the Participating Funds and/or the crediting of the
Transaction Account with Cash Collateral.
(iv) In the event Seller has caused Repo Custodian to credit the
Transaction Account with Cash Collateral in lieu of substitute
Eligible Securities, and has failed to deliver Eligible Securities
against such Cash Collateral not later than the close of business on
such Banking Day in accordance with the terms of the Master Agreement,
Repo Custodian shall promptly, but in no event later than 10:00 a.m.
the following Banking Day, notify the Participating Funds and Seller
of such failure.
(g) With respect to each repurchase transaction, at 9:00 a.m. New
York time, or at such other time as specified in proper instructions
of the Participating Funds (or the Custodian on behalf of the
Participating Funds) on the Repurchase Date, Repo Custodian shall
debit the Seller Account and credit the Transaction Account in the
amount of the Repurchase Price and shall transfer Securities from the
Participating Funds to the Seller and Cash Collateral, if any, from
the Transaction Account to the Seller Account in accordance with the
following provisions:
(i) If the amount of available funds in the Seller Account equals or
exceeds the Repurchase Price, Repo Custodian shall debit the Seller
Account and credit the Transaction Account in the amount of the
Repurchase Price and shall transfer all Securities applicable to such
repurchase transaction from the Participating Funds to the Seller and
debit the Transaction Account and credit the Seller Account in the
amount of any Cash Collateral applicable to such repurchase
transaction.
(ii) If the amount of available funds in the Seller Account is less
than the Repurchase Price, then Repo Custodian shall notify the Seller
of the amount of the deficiency and Seller shall promptly cause such
amount to be transferred to the Seller Account. If Seller fails to
cause the transfer of the entire amount of the deficiency to the
Seller Account, then Repo Custodian may, at its option and without
notice to Seller, advance to Seller the amount of such remaining
deficiency. It is expressly agreed that Repo Custodian is not
obligated to make any advance to Seller. If, following such transfer
and/or advance, the amount of available funds in the Seller Account
equals or exceeds the Repurchase Price then Repo Custodian shall debit
the Seller Account and credit the Transaction Account in the amount of
the Repurchase Price and shall transfer from the Participating Funds
to the Seller all Securities applicable to such repurchase transaction
and debit the Transaction Account and credit the Seller Account in the
amount of any Cash Collateral applicable to such repurchase
transaction.
(iii) If the Seller fails to cause the transfer of the entire amount
of the deficiency, as required by (ii) above, and Repo Custodian fails
to advance to Seller an amount sufficient to eliminate the entire
deficiency, then Repo Custodian shall debit the Seller Account in the
amount of all immediately available funds designated by Seller as
applicable to the repurchase transaction and credit the Transaction
Account in such amount (such amount being referred to as the "Partial
Payment") and shall transfer Securities from the Participating Funds
to the Seller such that the aggregate Market Value of all remaining
Securities and Cash Collateral in the Transaction Account with respect
to such repurchase transaction shall at least equal the difference
between Margin Percentage of the Repurchase Price and the Partial
Payment.
5. Payments on Securities. Repo Custodian shall credit to the Seller
Account as soon as received, all principal, interest and other sums
paid by or on behalf of the issuer in respect of the Securities and
collected by Repo Custodian, except as otherwise provided in Paragraph
8 of the Master Agreement.
6. Daily Statement. On each Banking Day on which any Participating
Funds have an outstanding repurchase transaction, Repo Custodian shall
deliver by facsimile, or other electronic means acceptable to the
Participating Funds, the Custodian and the Repo Custodian, to
Custodian and to the Participating Funds a statement identifying the
Securities held by Repo Custodian with respect to such repurchase
transaction and the cash and Cash Collateral, if any, held by Repo
Custodian in the Transaction Account, including a statement of the
then current Market Value of such Securities and the amounts, if any,
credited to the Transaction Account as of the close of trading on the
previous Banking Day. Repo Custodian shall also deliver to Custodian
and the Participating Funds such additional statements as the Repo
Custodian and the Participating Funds may agree upon from time to
time.
7. Valuation.
(a) Repo Custodian shall confirm the Market Value of Securities and
the amount of Cash Collateral, if any (i) on the Sale Date prior to
transferring the Sale Price out of the Transaction Account to the
Seller Account against the receipt from Seller of the Securities and
Cash Collateral, if any, and (ii) on each Valuation Day on which such
repurchase transaction is outstanding. If on any Valuation Day the
aggregate Market Value of the Securities and Cash Collateral with
respect to any repurchase transaction is less than the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Valuation Day) for such transaction, Repo Custodian
shall promptly, but in any case no later than 10:00 a.m. the following
Valuation Day, notify Seller. If on any Valuation Day the aggregate
market value of the Securities and Cash Collateral with respect to any
repurchase transaction is less than the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such
Valuation Day) for such transaction, and Seller fails to deliver
additional Eligible Securities applicable to such repurchase
transaction or an additional amount of Cash Collateral by the close of
business on such Valuation Day such that the aggregate market value of
the Securities and Cash Collateral at least equals the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Valuation Day), Repo Custodian shall promptly, but in
any event no later than 10:00 a.m. the following Valuation Day, notify
the Participating Funds of such failure.
(b) Repo Custodian shall determine the bid side portion of the Market
Value of the Securities by reference to the independent pricing
services ("Pricing Services") set forth on Schedule B. It is
understood and agreed that Repo Custodian shall use the prices made
available by the Pricing Services at the close of business of the
preceding Valuation Day. In the event that Repo Custodian is unable
to obtain a valuation of any Securities from the Pricing Services,
Repo Custodian shall request a bid quotation from a broker's broker or
a broker dealer, set forth in Schedule B, other than Seller. In the
event Repo Custodian is unable to obtain a bid quotation for any
Securities from such a broker's broker or a broker dealer, Repo
Custodian (i) shall not include any such Securities in the
determination of whether the aggregate Market Value of the Securities
and any Cash Collateral equals at least the Margin Percentage of the
Repurchase Price and (ii) shall redeliver such Securities to Seller if
the Market Value of all other Securities and any Cash Collateral with
respect to such repurchase transaction equals at least the Margin
Percentage of the Repurchase Price (calculated as if the Repurchase
Date were such Valuation Day). The Repo Custodian may rely on prices
quoted by Pricing Services, broker's brokers or broker dealers, except
Seller, as set forth in Schedule B.
(c) (i) If, on any Valuation Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase
transaction is less than the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Valuation Day)
applicable to such repurchase transaction, Repo Custodian shall
deliver to the Participating Funds an amount of additional Eligible
Securities applicable to such repurchase transaction and/or debit the
Seller Account and credit the Transaction Account with an additional
amount of Cash Collateral, such that the aggregate Market Value of all
Securities and any Cash Collateral with respect to such repurchase
transaction shall equal at least the Margin Percentage of the
Repurchase Price (calculated as if the Repurchase Date were such
Valuation Day) applicable to such repurchase transaction.
(ii) If, on any Valuation Day, the aggregate Market Value of the
Securities and any Cash Collateral with respect to a repurchase
transaction exceeds the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Valuation Day)
applicable to such repurchase transaction, Repo Custodian shall return
to the Seller all or a portion of such Securities or Cash Collateral,
if any; provided that the Market Value of the remaining Securities and
any Cash Collateral with respect to the repurchase transaction shall
be at least equal to the Margin Percentage of the Repurchase Price
(calculated as if the Repurchase Date were such Valuation Day)
applicable to such repurchase transaction. At any time and from time
to time with respect to any repurchase transaction, if authorized by
the Participating Funds, or the Custodian on behalf of the
Participating Funds, the Repo Custodian shall debit the Transaction
Account by an amount of Cash Collateral and credit the Seller Account
by the same amount of Cash Collateral against simultaneous delivery
from Seller to the Participating Funds of Eligible Securities
applicable to such repurchase transaction with a Market Value at least
equal to the amount of Cash Collateral credited and debited.
8. Authorized Persons. Schedule C hereto sets forth those persons
who are authorized to act for Repo Custodian, Custodian, Seller and
the Funds, respectively, under this Agreement.
9. Proper Instructions. Proper instructions shall mean a tested
telex, facsimile, a written request, direction, instruction or
certification signed or initialed by or on behalf of the party giving
the instructions by one or more authorized persons (as provided in
Paragraph 8); provided, however, that no instructions directing the
delivery of Securities or the payment of funds to any individual who
is an authorized signatory of Custodian or Repo Custodian shall be
signed by that individual. Telephonic, other oral or
electro-mechanical or electronic instructions (including the code
which may be assigned by Repo Custodian to Custodian from time to
time) given by one of the above authorized persons shall also be
considered proper instructions if the party receiving such
instructions reasonably believes them to have been given by an
authorized person with respect to the transaction involved. Oral
instructions will be confirmed by tested telex, facsimile or in
writing in the manner set forth above. The Funds and Seller authorize
Repo Custodian to tape record any and all telephonic or other oral
instructions given to Repo Custodian. Proper instructions may relate
to specific transactions or to types or classes of transactions, and
may be in the form of standing instructions.
10. Standard of Care.
(a) Repo Custodian shall be obligated to use reasonable care and
diligence in carrying out the provisions of this Agreement and the
Master Agreement and shall be liable to the Funds and/or Seller only
for direct damages resulting from the negligence or willful misconduct
of the Repo Custodian or its officers, employees or agents. The
parties hereby agree that Repo Custodian shall not be liable for
consequential, special or indirect damages, even if Repo Custodians
has been advised as to the possibility thereof. So long as and to the
extent that Repo Custodian exercises reasonable care and diligence and
acts without negligence, misfeasance or misconduct, Repo Custodian
shall not be liable to Seller or the Funds for (i) any action taken or
omitted in good faith in reliance upon proper instructions, (ii) any
action taken or omitted in good faith upon any notice, request,
certificate or other instrument reasonably believed by it to be
genuine and to be signed by the proper party or parties, (iii) any
delay or failure to act as may be required under this Agreement or
under the Master Agreement when such delay or failure is due to any
act of God or war, (iv) the actions or omissions of a Securities
System, (v) the title, validity or genuineness of any security
received, delivered or held by it pursuant to this Agreement or the
Master Agreement, (vi) the legality of the purchase or sale of any
Securities by or to the Participating Funds or Seller or the propriety
of the amount for which the same are purchased or sold (except to the
extent of Repo Custodian's obligations hereunder to determine whether
securities are Eligible Securities and to calculate the Market Value
of Securities and any Cash Collateral), (vii) the due authority of any
person listed on Schedule C to act on behalf of Custodian, Seller or
the Funds, as the case may be, with respect to this Agreement or
(viii) the errors of the Pricing Services, broker's brokers or broker
dealers set forth in Schedule B.
(b) Repo Custodian shall not be liable to Seller or the Funds for, or
considered to be the custodian of, any Eligible Securities or any
money to be used in a repurchase transaction, whether or not such
money is represented by any check, draft, or other instrument for the
payment of money, until the Eligible Securities have been delivered in
accordance with Paragraph 3 or until Repo Custodian actually receives
and collects such money on behalf of Seller or the Funds directly or
by the final crediting of the Seller Account or a Transaction Account
through the Securities System, except that this Paragraph 10(b) shall
not be deemed to limit the liability of Repo Custodian to Seller or
the Funds if the non-delivery of such Eligible Securities or the
failure to receive and collect such money results from the breach by
Repo Custodian of its obligations under this Agreement or the Master
Agreement.
(c) Repo Custodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by
it are such as properly may be held by the Participating Funds;
provided that notwithstanding anything to the contrary herein, Repo
Custodian shall be obligated to act in accordance with the guidelines
and proper instructions of the Participating Funds, or the Custodian
on behalf of the Participating Funds, with respect to the types of
Eligible Securities and the issuers of such Eligible Securities that
may be used in specific repurchase transactions.
(d) Repo Custodian promptly shall notify the Fund Agent and the
Custodian if Securities held by Repo Custodian are in default or if
payment on any Securities has been refused after due demand and
presentation and Repo Custodian shall take action to effect collection
of any such amounts upon the proper instructions of the Participating
Funds, or the Custodian on behalf of the Participating Funds, and
assurances satisfactory to it that it will be reimbursed for its costs
and expenses in connection with any such action.
(e) Repo Custodian shall have no duties, other than such duties as
are necessary to effectuate repurchase transactions in accordance with
this Agreement and the Master Agreement within the standard of care
set forth in Paragraph 10(a) above and in a commercially reasonable
manner.
11. Representations and Additional Covenants of Repo Custodian.
(a) Repo Custodian represents and warrants that (i) it is duly
authorized to execute and deliver this Agreement and to perform its
obligations hereunder and has taken all necessary action to authorize
such execution, delivery and performance, (ii) the execution, delivery
and performance of this Agreement do not and will not violate any
ordinance, declaration of trust, partnership agreement, articles of
incorporation, charter, rule or statute applicable to it or any
agreement by which it is bound or by which any of its assets are
affected, (iii) the person executing this Agreement on its behalf is
duly and properly authorized to do so, (iv) it has (and will maintain)
a copy of this Agreement and evidence of its authorization in its
official books and records, and (v) this Agreement has been executed
by one of its duly authorized officers at the level of Vice President
or higher.
(b) Repo Custodian further represents and warrants that (i) it has
not pledged, encumbered, hypothecated, transferred, disposed of, or
otherwise granted, any third party an interest in any Securities, (ii)
it does not have any security interest, lien or right of setoff in the
Securities, and (iii) it has not received notification from any third
party, in its capacity as Repo Custodian, custodian bank or clearing
bank, of any lien, claim, charge or encumbrance with respect to any
Securities that are the subject of such repurchase transaction. Repo
Custodian agrees that (i) it will not pledge, encumber, hypothecate,
transfer, dispose of, or otherwise grant, any third party an interest
in any Securities, (ii) it will not acquire any security interest,
lien or right of setoff in the Securities, and (iii) it will promptly
notify the Fund Agent, if, during the term of any outstanding
repurchase transaction, it is notified by any third party, in its
capacity as Repo Custodian, custodian bank or clearing bank, of the
Participating Funds or Seller, of the existence of any lien, claim,
charge or encumbrance with respect to any Securities that are the
subject of such repurchase transaction.
12. Indemnification.
(a) Notwithstanding the Participating Fund's obligation to the Repo
Custodian under Paragraph 12(b) below, so long as and to the extent
that Repo Custodian is in the exercise of reasonable care and
diligence and acts without negligence, misfeasance or misconduct,
Seller will indemnify Repo Custodian and hold it harmless against any
and all losses, claims, damages, liabilities or actions to which it
may become subject, and reimburse it for any expenses (including
attorneys' fees and expenses) incurred by it in connection therewith,
insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon or in any way related to this Agreement, the
Master Agreement or any transactions contemplated hereby or thereby or
effected hereunder or thereunder. Without limiting the generality of
the foregoing indemnification, Repo Custodian shall be indemnified by
Seller for all costs and expenses, including attorneys' fees, for its
successful defense against claims that Repo Custodian breached its
standard of care and was negligent or engaged in misfeasance or
misconduct.
(b) So long as and to the extent that Repo Custodian is in the
exercise of reasonable care and diligence and acts without negligence,
misconduct or misfeasance, the Participating Funds will indemnify Repo
Custodian and hold it harmless against any and all losses, claims,
damages, liabilities or actions to which it may become subject, and
reimburse it for any expenses (including attorneys' fees and expenses)
incurred by it in connection therewith, insofar as such losses,
claims, damages, liabilities or actions result from the negligence,
misconduct or misfeasance of the Participating Funds under this
Agreement.
13. Rights and Remedies. The rights and remedies conferred upon the
parties hereto shall be cumulative, and the exercise or waiver of any
thereof shall not preclude or inhibit the exercise of any additional
rights and remedies.
14. Modification or Amendment. Except as otherwise provided in this
Paragraph 14, no modification, waiver or amendment of this Agreement
shall be binding unless in writing and executed by the parties hereto.
Schedule A, listing the Funds, may be amended from time to time to add
or delete Funds by the Funds (i) delivering an executed copy of an
addendum to Schedule A to Seller and Repo Custodian, and (ii)
amending Schedule A to the Master Agreement in accordance with the
provisions therein. The amendment of Schedule A as provided above
shall constitute appointment of Repo Custodian as a custodian for such
Fund. Schedule B may be amended from time to time by an instrument in
writing, or counterpart thereof, executed by Repo Custodian, Seller
and the Funds. Schedule C may be amended from time to time to change
an authorized person of: (i) the Funds, by written notice to Repo
Custodian and Seller by Ms. Sarah Zenoble or the Treasurer of the
Funds (or such persons who may be authorized from time to time in
writing by Ms. Zenoble or the President or Treasurer of Fidelity
Management and Research Company to trade on behalf of Fidelity's
taxable money market funds); (ii) Seller, by written notice to Repo
Custodian and the Funds by any Vice President of Seller; (iii) Repo
Custodian, by written notice to Seller, Custodian and the Funds by any
Vice President of Repo Custodian; and (iv) Custodian, by written
notice to Repo Custodian by any Vice President of Custodian. Schedule
D may be amended from time to time by any party hereto by delivery of
written notice to the other parties hereto. Repo Custodian shall
receive notice of any amendment to the Master Agreement at the address
set forth in Schedule D hereto; and, if such amendment would have a
material adverse effect on the rights of, or would materially increase
the obligations of Repo Custodian under this Agreement, any such
amendment shall also require the consent of Repo Custodian. Any such
amendment shall be deemed not to be material if Repo Custodian fails
to object in writing within 21 days after receipt of notice thereof.
No amendment to this Agreement shall affect the rights or obligations
of any Fund with respect to any outstanding repurchase transaction
entered into under this Agreement and the Master Agreement prior to
such amendment or with respect to any actions or omissions by any
party hereto prior to such amendment. In the event of conflict
between this Agreement and the Master Agreement, the Master Agreement
shall control.
15. Termination. This Agreement shall terminate forthwith upon
termination of the Master Agreement or may be terminated by any party
hereto on ten Valuation Days' written notice to the other parties;
provided, however, that any such termination shall not affect any
repurchase transaction then outstanding or any rights or obligations
under this Agreement or the Master Agreement with respect to any
actions or omissions of any party hereto prior to termination. In the
event of termination, Repo Custodian will deliver any Securities, Cash
Collateral or cash held by it or any agent to Custodian or to such
successor custodian or custodian or subcustodian as the Participating
Funds shall instruct.
16. Compensation. Seller agrees to pay Repo Custodian compensation
for the services to be rendered hereunder, based upon rates which
shall be agreed upon from time to time.
17. Notices. Except with respect to communications between Custodian
and the Funds which shall be governed by the custodian agreement or
subcustodian agreement between such parties, as the case may be, and
except as otherwise provided herein or as the parties to the Agreement
shall from time to time otherwise agree, all instructions, notices,
reports and other communications contemplated by this Agreement shall
be given to the party entitled to receive such notice at the telephone
number and address listed on Schedule D hereto.
18. Severability. If any provision of this Agreement is held to be
unenforceable as a matter of law, the other terms and provisions
hereof shall not be affected thereby and shall remain in full force
and effect.
19. Binding Nature. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their successors and
assignees; provided that, no party hereto may assign this Agreement or
any of the rights or obligations hereunder without the prior written
consent of the other parties.
20. Headings. Section headings are for reference purposes only and
shall not be construed as a part of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one
instrument.
22. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
23. Limitation of Liability. Repo Custodian and Seller are hereby
expressly put on notice of the limitation of liability set forth in
the Declarations of Trust and in the Certificates and Agreements of
Limited Partnership of the Funds and agree that the obligations
assumed by any Fund hereunder shall be limited in all cases to a Fund
and its assets or, in the case of a series Fund, to the assets of that
series only, and neither Seller, Repo Custodian nor their respective
agents or assigns shall seek satisfaction of any such obligation from
the officers, agents, employees, directors, trustees, shareholders or
partners of any such Fund or series.
24. Rights and Obligations of Each Fund. The rights and obligations
set forth in this Agreement with respect to each repurchase
transaction shall accrue only to the Participating Funds in accordance
with their respective interests therein. No other Fund shall receive
any rights or have any liabilities arising from any action or inaction
of any Participating Fund under this Agreement with respect to such
repurchase transaction.
25. General Provisions. This Agreement supersedes any other
custodian agreement by and among Seller, the Funds, and Repo Custodian
concerning repurchase transactions effected through the Joint Trading
Account. It is understood and agreed that time is of the essence with
respect to the performance of each party's respective obligations
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
[Signature Lines Omitted]
SCHEDULE B
PRICING SOURCES
PRICING SERVICES
U.S. Government Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller
and the Funds)
GNMA - The Bond Buyer
FHLMC - The Bond Buyer
All other U.S. Government
and Agency Securities Interactive Data Services or Mellon Data
Services (or any other pricing service mutually agreed upon by Seller
and the Funds)
BROKERS' BROKERS AND BROKER DEALERS
U.S. Government Securities - Any Primary Dealer
GNMA - Any Primary Broker-Dealer's bid rate for such security
FHLMC - Any Primary Broker-Dealer's bid rate for such security
All other U.S. Government and Agency Securities - Any Primary
Broker-Dealer's bid rate for such security
Prices shall be as of the business day immediately preceding the date
of determination or the last quote available. The pricing services,
Brokers' Brokers and Broker Dealers may be changed from time to time
by agreement of all the parties.

SCHEDULE C
AUTHORIZED PERSONS
Repo Custodian
Anthony Isola
Raymond Stancil
William Mosca
Leonardo Nichols
Alan Mann
Allen B. Clark
Custodian
Ken Rindos
Kurt Woetzel
Seller
Gary F. Holloway
Konrad R. Kruger
Stephen M. Peet
Raymond E. Humiston
P. Michael Florio
Ben Carpenter
Blake S. Drexler
Derick B. Burgher
Lyn Kratovil
The Funds
Leland Barron
Wickliffe Curtis
Dorothy Egan
David Glocke
Katharyn Harlow
Timothy Huyck
Jon Jamen
Robert Litterst
Sam Silver
Burnell Stehman
Jeffrey St. Peters
Deborah Todd
John Todd
Joseph Torres
Richard Williams
SCHEDULE D
NOTICES
If to Custodian: Morgan Guaranty Trust Co. of New York
15 Broad Street, 16th Floor
New York, New York 10015
Telephone: (212) 483-4150
Attention: Ms. Kimberly Smith
or
The Bank of New York
One Wall Street, 4th Floor
New York, NY 10286
Telephone: (312) 635-4808
Attention: Claire Meskovic
With a copy to the Fund Agent
If to Repo Custodian: Chemical Bank
4 New York Plaza
21st Floor
New York, NY 10004-2477
Telephone: (212) 623-6446
Attention: Anthony Isola
If to Seller: Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Telephone: (203) 625-7909
Attention: Peter Sanchez
If to any of the Funds: FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah R. Todd or
Mr. Samuel Silver
If to the Fund Agent: Fidelity Investments
[Name of Fund]
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 584-4071
Attention: Mr. Mark Mufler
277262.c1
Exhibit 8(n)
FORM OF
SCHEDULE 1

The following lists the additional counterparties to the Repo
Custodian Agreement for Joint Trading Account between Chemical Bank
and the Fidelity Funds:

Chase Securities, Inc.
CS First Boston Corp.
Dresdner Securities (U.S.A.), Inc.
HSBC Securities, Inc.
Lehman Government Securities, Inc.
Merrill Lynch Government Securities, Inc.
Paine Webber, Inc.
Salomon Brothers, Inc.
UBS Securities, Inc.

Exhibit 8(o)
Form of
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
Between
THE BANK OF NEW YORK
and
FIDELITY FUNDS
Dated as of: _________

Exhibit 8(o)
TABLE OF CONTENTS
Page
ARTICLE I - APPOINTMENT OF CUSTODIAN 2
ARTICLE II - POWERS AND DUTIES OF CUSTODIAN 2
Section 2.01. Establishment of Accounts 2
Section 2.02. Receipt of Funds 2
Section 2.03. Repurchase Transactions 2
Section 2.04. Other Transfers 4
Section 2.05. Custodian's Books and Records 5
Section 2.06. Reports by Independent Certified Public Accountants 5
Section 2.07. Securities System 6
Section 2.08. Collections 6
Section 2.09. Notices, Consents, Etc. 6
Section 2.10. Notice of Custodian's Inability to Perform 7
ARTICLE III - PROPER INSTRUCTIONS AND RELATED MATTERS 7
Section 3.01. Proper Instructions; Special Instruction 7
Section 3.02. Authorized Persons 8
Section 3.03. Investment Limitations 8
Section 3.04. Persons Having Access to Assets of the Funds 8
Section 3.05. Actions of Custodian Based on Proper Instructions and
Special
Instructions 9
ARTICLE IV - STANDARD OF CARE; INDEMNIFICATION 9
Section 4.02. Liability of Custodian for Actions of Securities Systems
9
Section 4.03. Indemnification 9
Section 4.04. Funds, Right to Proceed 10
ARTICLE V - COMPENSATION 11
Section 5.01. Compensation 11
Section 5.02. Waiver of Right of Set-Off 11
ARTICLE VI - TERMINATION 11
Section 6.01. Events of Termination 11
Section 6.02. Successor Custodian; Payment of Compensation 11
ARTICLE VII - MISCELLANEOUS 12
Section 7.01. Representative Capacity and Binding Obligation 12
Section 7.02. Entire Agreement 12
Section 7.03. Amendments 12
Section 7.04. Interpretation 12
Section 7.05. Captions 13
Section 7.06. Governing Law 13
Section 7.07. Notice and Confirmations 13
Section 7.08. Assignment 14
Section 7.09. Counterparts 14
Section 7.10. Confidentiality; Survival of Obligations 14
Exhibit 8(o)
Form of
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
AGREEMENT dated as of ___________ by and between The Bank of New York
(hereinafter referred to as the "Custodian") and each of the entities
listed on Schedules A-1, A-2, A-3 and A-4 hereto, acting on behalf of
itself or, (i) in the case of a series company, on behalf of one or
more of its portfolios or series listed on Schedule A-1 or A-2 hereto,
(ii) in the case of the accounts listed on Schedule A-3 hereto, acting
through Fidelity Management & Research Company, and (iii) in the case
of the commingled or individual accounts listed on Schedule A-4
hereto, acting through Fidelity Management Trust Company
(collectively, the "Funds" and each, a "Fund").
W I T N E S S E T H
WHEREAS, each of the Funds desire to appoint the Custodian as its
custodian for the purpose of establishing and administering one or
more joint trading accounts or subaccounts thereof (individually, an
"Account" and collectively, the "Accounts") and holding cash and
securities for the Funds in connection with repurchase transactions
effected through the Accounts; and
WHEREAS, one or more of the Funds may, from time to time, enter into
one or more written repurchase agreements pursuant to which one or
more of the Funds agrees to purchase and resell, and the sellers named
in such agreements agree to sell and repurchase through the Accounts,
certain securities (collectively, the "Securities") (such repurchase
agreements being hereinafter referred to, collectively, as the
"Repurchase Agreements"); and
WHEREAS, each of the custodians identified in ScheduleB hereto (each,
a "Fund Custodian") serves as the primary custodian for one or more of
the Funds; and
WHEREAS, from time to time one or more of the Funds may arrange to
transfer cash or Securities from one or more Fund Custodians to the
Custodian or transfer cash or Securities from the Custodian to one or
more Fund Custodians, or in the case of Funds in which Custodian is
also Fund Custodian, such Fund may arrange for transfer of cash or
Securities between an Account and an account maintained by Custodian
in its capacity as Fund Custodian for such Fund, in each event in
connection with Repurchase Agreement transactions; and
WHEREAS, from time to time, such Funds may arrange to transfer cash
or securities from the Custodian to the seller in such Repurchase
Agreement transactions, or in the case in which Custodian is also the
clearing bank for such seller, such Funds may arrange for transfer of
cash or securities between an Account and an account maintained by
Custodian for such seller in its capacity as clearing bank, in each
event in connection with two-party Repurchase Agreement transactions;
and
WHEREAS, each of the custodians identified in Schedule C hereto
(each, a "Repo Custodian") serves as a third-party custodian of the
Funds for purposes of effecting third-party Repurchase Agreement
transactions; and
WHEREAS, from time to time one or more of the Funds may arrange to
transfer cash or Securities from the Custodian to one or more Repo
Custodians or transfer cash or Securities from one or more Repo
Custodians to the Custodian, or in the case in which Custodian is also
Repo Custodian, such Funds may arrange for transfer of cash or
securities between an Account and an account maintained for such Funds
in its capacity as Repo Custodian, in each event in connection with
third-party Repurchase Agreement transactions;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I - APPOINTMENT OF CUSTODIAN
Each of the Funds hereby employs and appoints the Custodian as its
custodian, subject to the terms and provisions of this Agreement.
ARTICLE II - POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and
duties, and only such powers and duties, as are set forth in this
Agreement.
Section 2.01. Establishment of Accounts. The Custodian shall
establish one or more Accounts as segregated joint trading accounts
for the Funds through which the Funds shall, from time to time, effect
Repurchase Agreement transactions.
Section 2.02. Receipt of Funds. The Custodian shall, from time to
time, receive funds for or on behalf of the Funds and shall hold such
funds in safekeeping. Upon receipt of Proper Instructions, the
Custodian shall credit funds so received to one or more Accounts
designated in such Proper Instructions. Promptly after receipt of
such funds from the Fund Custodian or a Repo Custodian or promptly
following the transfer to an Account from any account maintained by
Custodian in its capacity as Fund Custodian, or as Repo Custodian, the
Custodian shall provide written confirmation of such receipt to the
Fund Custodian or Repo Custodian, when and as applicable, and of such
receipt or transfer to the Fund Agent designated in Section 7.07(b)
hereof (the "Fund Agent"). The Custodian shall designate on its books
and records the funds allocable to each Account and the identity of
each Fund participating in such Account.
Section 2.03. Repurchase Transactions. The Funds may, from time to
time, enter into Repurchase Agreement transactions. In connection
with each such Repurchase Agreement transaction, unless otherwise
specifically directed by Special Instructions, the Custodian shall
take the following actions:
(a) Purchase of Securities. Upon receipt of Proper Instructions, the
Custodian shall pay for and receive Securities and any cash
denominated in U.S. Dollars which is serving as collateral ("Cash
Collateral"), provided that payment therefor shall be made by the
Custodian only against prior or simultaneous receipt of the Securities
and any Cash Collateral in the manner prescribed in subsection 2.03(b)
below. Except as provided in Section2.04 hereof, in no event shall
the Custodian deliver funds from an Account for the purchase of
Securities and any Cash Collateral prior to receipt of the Securities
and any Cash Collateral by the Custodian or a Securities System (as
hereinafter defined). The Custodian is not under any obligation to
make credit available to the Funds to complete transactions hereunder.
Promptly after the transfer of funds and receipt of Securities and any
Cash Collateral, the Custodian shall provide a confirmation to the
Fund Agent, setting forth (i) the Securities and any Cash Collateral
which the Custodian has received pursuant to the Repurchase Agreement
transaction, (ii) the amount of funds transferred from the applicable
Account, and (iii) any security or transaction identification numbers
reasonably requested by the Fund Agent.
(b) Receipt and Holding of Securities. In connection with each
Repurchase Agreement transaction, the Custodian shall receive and hold
the Securities as follows: (i) in the case of certificated securities,
by physical receipt of the certificates or other instruments
representing such Securities and by physical segregation of such
certificates or instruments from other assets of the Custodian in a
manner indicating that such Securities belong to specified Funds; and
(ii) in the case of Securities held in book-entry form by a Securities
System (as hereinafter defined), by appropriate transfer and
registration of such Securities to a customer only account of the
Custodian on the book-entry records of the Securities System, and by
appropriate entry on the books and records of the Custodian
identifying such Securities as belonging to specified Funds.
(c) Sale of Securities. Upon receipt of Proper Instructions, the
Custodian shall make delivery of Securities and any Cash Collateral
held in or credited to an Account against prior or simultaneous
payment for such Securities in immediately available funds in the form
of: (i) cash, bank credit, or bank wire transfer received by the
Custodian; or (ii) credit to the customer only account of the
Custodian with a Securities System. Notwithstanding the foregoing,
the Custodian shall make delivery of Securities held in physical form
in accordance with "street delivery custom" to a broker or its
clearing agent, against delivery to the Custodian of a receipt for
such Securities; provided that the Custodian shall have taken all
actions possible to ensure prompt collection of the payment for, or
the return of such Securities by the broker or its clearing agent.
Promptly after the transfer of Securities and any Cash Collateral and
the receipt of funds, the Custodian shall provide a confirmation to
the Fund Agent, setting forth the amount of funds received by the
Custodian or a Securities System for credit to the applicable Account.
(d) Additional Functions. Upon receipt of Proper Instructions, the
Custodian shall take all such other actions as specified in such
Proper Instructions and as shall be reasonable or necessary with
respect to Repurchase Agreement transactions and the Securities and
funds transferred and received pursuant to such transactions,
including, without limitation, all such actions as shall be prescribed
in the event of a default under a Repurchase Agreement.
(e) Nondiscretionary Functions. The Custodian shall attend to all
non-discretionary details in connection with the purchase, sale,
transfer or other dealings with Securities or other assets of the
Funds held by the Custodian.
(f) In the event that the Custodian is directed by Proper
Instructions to make any payment or transfer of funds on behalf of a
Fund for which there would be, at the close of business on the date of
such payment or transfer, insufficient funds held by the Custodian on
behalf of such Fund, the Custodian may, in its discretion, provide an
overdraft ("Overdraft") to the Fund, in an amount sufficient to allow
the completion of such payment or transfer. Any Overdraft provided
hereunder: (a) shall be payable on the next Business Day, unless
otherwise agreed by the Fund and the Custodian; and (b) shall accrue
interest form the date of the Overdraft to the date of payment in full
by the Fund at a rate agreed upon in writing, from time to time, by
the Custodian and the Fund. The Custodian and the Funds acknowledge
that the purpose of such Overdrafts is to temporarily finance the
purchase or sale of securities for prompt delivery in accordance with
the terms hereof, or to meet emergency expenses not reasonably
foreseeable by a particular Fund. The Funds hereby agree that the
Custodian shall have a continuing lien and security interest in and to
all Securities whose purchase is financed by Custodian and which are
in Custodian's possession or in the possession or control of any third
party acting on Custodian's behalf and the proceeds thereof. In this
regard, Custodian shall be entitled to all the rights and remedies of
a pledgee under common law and a secured party under the New York
Uniform Commercial Code and any other applicable laws or regulations
as then in effect.
Section 2.04. Other Transfers.
(a) In addition to transfers of funds and Securities referred to in
Section 2.03, the Custodian shall transfer funds and Securities held
in an Account: (a) upon receipt of Proper Instructions, to (i)any
Fund Custodian, or (ii)any other account maintained for any Fund by
the Custodian in its capacity as a Fund Custodian, (iii)any Repo
Custodian or (iv) any other account maintained for any Fund by the
Custodian in its capacity as a Repo Custodian; or (b) upon receipt of
Special Instructions, and subject to Section 3.04 hereof, to any other
person or entity designated in such Special Instructions.
(b) Determination of Fund Custodian Daily Net Amount. On each
banking day, based upon daily transaction information provided to the
Custodian by the Funds, Custodian shall determine: (i) the amount of
cash due to be transferred on such day by each Fund Custodian to the
Custodian in connection with all Repurchase Agreement transactions in
which the date fixed for the repurchase and resale of Securities is
the banking day next following the date on which the sale and purchase
of such Securities takes place (each, an "Overnight Repo Transaction")
to be effected through the Accounts in such day; and (ii) the amount
of cash due to be transferred on such day by Custodian to such Fund
Custodian in connection with all outstanding Overnight Repo
Transactions previously effected through the Accounts (the difference
between (i) and (ii) with respect to each Fund Custodian being
referred to as the "Fund Custodian Daily Net Amount"). On each
banking day, Custodian shall notify each Fund Custodian of the
foregoing determination and, unless otherwise directed in accordance
with Proper Instructions, Custodian shall (i) instruct such Fund
Custodian to transfer cash to the Custodian equal to the Fund
Custodian Daily Net Amount (if the Fund Custodian Daily Net Amount is
positive) or (ii) transfer to such Fund Custodian cash equal to the
Fund Custodian Daily Net Amount (if the Fund Custodian Daily Net
Amount is negative).
(c) Determination of Repo Custodian Daily Net Amount. On each
banking day, based upon daily transaction information provided to the
Custodian by the Funds and each Repo Custodian, Custodian shall
determine: (i) the amount of cash due to be transferred on such day
by each Repo Custodian on behalf of the Funds to all counterparties in
connection with all third-party Overnight Repo Transactions to be
effected through the Accounts on such day; and (ii) the amount of cash
due to be transferred on such day by each Repo Custodian on behalf of
all counterparties to the Funds in connection with all outstanding
third-party Overnight Repo Transactions previously effected through
the Accounts (the difference between (i) and (ii) with respect to each
Repo Custodian being referred to as the "Repo Custodian Daily Net
Amount"). On each banking day, Custodian shall notify the Funds of
the foregoing determinations and, unless otherwise directed in
accordance with Proper Instructions, Custodian shall (i) transfer to
each Repo Custodian cash equal to the Repo Custodian Daily Net Amount
(if the Repo Custodian Daily Net Amount is positive) or (ii) instruct
each Repo Custodian to transfer to the Custodian cash equal to the
Repo Custodian Daily Net Amount (if the Repo Custodian Daily Net
Amount is negative).
Section 2.05. Custodian's Books and Records. The Custodian shall
provide any assistance reasonably requested by the Funds in the
preparation of reports to shareholders of the Funds and others, audits
of accounts, and other ministerial matters of like nature. The
Custodian shall maintain complete and accurate records with respect to
cash and Securities held for the benefit of the Funds as required by
the rules and regulations of the Securities and Exchange Commission
applicable to investment companies registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"),
including: (a) journals or other records of original entry containing
a detailed and itemized daily record of all receipts and deliveries of
securities (including certificate and transaction identification
numbers, if any), and all receipts and disbursements of cash; (b)
ledgers or other records reflecting Securities in transfer, and
Securities in physical possession; and (c) cancelled checks and bank
records related thereto. The Custodian shall keep such other books
and records of the Funds relating to repurchase transactions effected
through the Accounts as the Funds shall reasonably request. Such
books and records maintained by the Custodian shall reflect at all
times the identity of each Fund participating in each Account and the
aggregate amount of the Securities and any Cash Collateral held by the
Custodian on behalf of the Funds in such Account pursuant to this
Agreement. All such books and records maintained by the Custodian
shall be maintained in a form acceptable to the Funds and in
compliance with the rules and regulations of the Securities and
Exchange Commission, including, but not limited to, books and records
required to be maintained by Section 31(a) of the Investment Company
Act and the rules from time to time adopted thereunder. All books and
records maintained by the Custodian relating to the Accounts shall at
all times be the property of the Funds and shall be available during
normal business hours for inspection and use by the Funds and their
agents, including, without limitation, their independent certified
public accountants. Notwithstanding the preceding sentence, the Funds
shall not take any actions or cause Custodian to take any actions
which would cause, either directly or indirectly, the Custodian to
violate any applicable laws, regulations, rules or orders.
Section 2.06. Reports by Independent Certified Public Accountants.
At the request of the Funds, the Custodian shall deliver to the Funds
such annual reports and other interim reports prepared by the
independent certified public accountants of the Custodian with respect
to the services provided by the Custodian under this Agreement,
including, without limitation, the Custodian's accounting system,
internal accounting control and procedures for safeguarding
Securities, including Securities deposited and/or maintained in a
Securities System. Such reports, which shall be of sufficient scope
and in sufficient detail as may reasonably be required by the Funds
and as may reasonably by obtained by the Custodian, shall provide
reasonable assurance to the Funds that the procedures employed by the
independent certified public accountants are reasonably designed to
detect any material inadequacies with respect to the matters discussed
in the report, shall state in detail the material inadequacies
disclosed by such examination, and, if no such inadequacies exist,
shall so state.
Section 2.07. Securities System. As used herein the term "Securities
System" shall mean each of the following: (a) the Depository Trust
Company; (b) the Participants Trust Company; (c) any book-entry system
as provided in (i) Subpart0 of Treasury Circular No. 300, 31CFR
306.115, (ii) SubpartB of Treasury Circular Public Debt Series No.
27-76, 31CFR 350.2, or (iii) the book-entry regulations of federal
agencies substantially in the form of 31CFR 306.115; or (d) any
domestic clearing agency registered with the Securities and Exchange
Commission under Section17A of the Securities Exchange Act of 1934, as
amended (or as may otherwise be authorized by the Securities and
Exchange Commission to serve in the capacity of depository or clearing
agent for the securities or other assets of investment companies)
which acts as a securities depository and the use of which has been
approved in Special Instructions. Use of a Securities System by the
Custodian shall be in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and regulations, if any,
and subject to the following provisions:
(A) The Custodian may deposit and/or maintain Securities held
hereunder in a Securities System, provided that such Securities are
represented in an account of the Custodian in the Securities System
which account shall not contain any assets of the Custodian other than
assets held as a fiduciary, custodian, or otherwise for customers.
(B) The Custodian shall, if requested by the Funds, provide the Funds
with all reports obtained by the Custodian with respect to the
Securities System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the Securities
System.
(C) Upon receipt of Special Instructions, the Custodian shall
terminate the use hereunder of any Securities System (except for the
federal book-entry system) as promptly as practicable and shall take
all actions reasonably practicable to safeguard the Securities and
other assets of the Funds maintained with such Securities System.
Section 2.08. Collections. The Custodian shall (a) collect, receive
and deposit in the applicable Account all income and other payments
with respect to Securities held by the Custodian hereunder; (b)
endorse and deliver any instruments required to effect such
collection; and (c) execute ownership and other certificates and
affidavits for all federal, state and foreign tax purposes in
connection with receipt of income or other payments with respect to
Securities, or in connection with the transfer of Securities.
Section 2.09. Notices, Consents, Etc. The Custodian shall deliver to
the Funds, in the most expeditious manner practicable, all notices,
consents or announcements affecting or relating to Securities held by
the Custodian on behalf of the Funds that are received by the
Custodian, and, upon receipt of Proper Instructions, the Custodian
shall execute and deliver such consents or other authorizations as may
be required.
Section 2.10. Notice of Custodian's Inability to Perform. The
Custodian shall promptly notify the Funds in writing by facsimile
transmission or such other manner as the Funds may designate, if, for
any reason: (a) the Custodian determines that it is unable to perform
any of its duties or obligations hereunder or its duties or
obligations with respect to any repurchase transaction; or (b) the
Custodian reasonably foresees that it will be unable to perform any
such duties or obligations.

ARTICLE III - PROPER INSTRUCTIONS AND RELATED MATTERS
Section 3.01. Proper Instructions; Special Instruction.
(a) Proper Instructions. As used herein, the term "Proper
Instructions" shall mean: (i) a tested telex, a written (including,
without limitation, facsimile transmission) request, direction,
instruction or certification signed or initialed by one or more
Authorized Persons (as hereinafter defined); (ii) a telephonic or
other oral communication by one or more Authorized Persons; or (iii) a
communication effected directly between electromechanical or
electronic devices or systems (including, without limitation,
computers) by one or more Authorized Persons; provided, however, that
communications of the types described in clauses (ii) and (iii) above
purporting to be given by an Authorized Person shall be considered
Proper Instructions only if the Custodian reasonably believes such
communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the Funds by tested telex or in
writing in the manner set forth in clause(i) above, but the lack of
such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions prior to the
Custodian's receipt of such confirmation. Each of the Funds and the
Custodian is hereby authorized to record any and all telephonic or
other oral instructions communicated to the Custodian. Proper
Instructions may relate to specific transactions or to types or
classes of transactions, and may be in the form of standing
instructions.
(b) Special Instructions. As used herein, the term "Special
Instructions" shall mean Proper Instructions countersigned or
confirmed in writing by, in the case of the entities listed in
Schedules A-1 or A-2 hereto, the Treasurer or any Assistant Treasurer
of the Funds or any other person designated in writing by the
Treasurer of the Funds, and in the case of each of the entities listed
on Schedules A-3 or A-4, by the officer who is a signatory to this
Agreement on behalf of such entity or any other person designated in
writing by such officer or an officer of such entity of higher
authority, which countersignature or written confirmation shall be (i)
included on the same instrument containing the Proper Instructions or
on a separate instrument relating thereto, and (ii) delivered by hand,
by facsimile transmission, or in such other manner as the parties
hereto may agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the
Custodian at the address and/or telephone, telecopy or telex number
agreed upon from time to time by the Custodian and the Funds.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, the
Funds shall deliver to the Custodian, duly certified as appropriate by
the Treasurer or any Assistant Treasurer of the Funds or by a
Secretary or Assistant Secretary of the Funds, and in the case of each
of the entities listed on Schedules A-3 or A-4, by the officer who is
a signatory to this Agreement on behalf of such entity or any other
person designated in writing by such officer or an officer of higher
authority, a certificate setting forth (a) the names, signatures and
scope of authority of all persons authorized to give Proper
Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of the Funds (collectively, the
"Authorized Persons," and individually, an "Authorized Person"), and
(b) the names and signatures of those persons authorized to issue
Special Instructions. Such certificate may be accepted and relied
upon by the Custodian as conclusive evidence of the facts set forth
therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar certificate to the contrary.
Upon delivery of a certificate which deletes the name of a person
previously authorized to give Proper Instructions or to issue Special
Instructions, such person shall no longer be considered an Authorized
Person or authorized to issue Special Instructions, as applicable.
Section 3.03. Investment Limitations. In performing its duties
hereunder the Custodian may assume, unless and until it receives
special Instructions to the contrary (a "Contrary Notice"), that
Proper Instructions received by it are not in conflict with or in any
way contrary to any investment or other limitation applicable to any
of the Funds. The Custodian shall in no event be liable to the Funds
and shall be indemnified by the Funds for any loss, damage or expense
to the Custodian arising out of any violation of any investment or
other limitation to which any Fund is subject, except to the extent
that such loss, damage or expense: (i) relates to a violation of any
investment or other limitation of a Fund occurring after receipt by
the Custodian of a Contrary Notice; or (ii) arises from a breach of
this Agreement by the Custodian.
Section 3.04. Persons Having Access to Assets of the Funds. No
Authorized Person, Trustee, officer, employee or agent of the Funds
(other than the Custodian) shall have physical access to the assets of
the Funds held by the Custodian, or shall be authorized or permitted
to withdraw any such assets for delivery to an account of such person,
nor shall the Custodian deliver any such assets to any such person;
provided, however, that nothing in this Section 3.04 shall prohibit:
(a) any Authorized Person from giving Proper Instructions, or the
persons described in Section 3.01(b) from issuing Special
Instructions, so long as such action does not result in delivery of or
access to assets of the Funds prohibited by this Section 3.04; or (b)
the Funds' independent certified public accountants from examining or
reviewing the assets of the Funds held by the Custodian.
Section 3.05. Actions of Custodian Based on Proper Instructions and
Special Instructions. Subject to the provisions of Section 4.01
hereof, the Custodian shall not be responsible for the title, validity
or genuineness of any property, or evidence of title thereof, received
by it or delivered by it pursuant to this Agreement.
ARTICLE IV - STANDARD OF CARE; INDEMNIFICATION
Section 4.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise
reasonable care and diligence in carrying out all of its duties and
obligations under this Agreement, and shall be liable to the Funds for
all loss, damage and expense incurred or suffered by the Funds,
resulting from the failure of the Custodian to exercise such
reasonable care and diligence or from any other breach by the
Custodian of the terms of this Agreement.
(b) Acts of God, Etc. In no event shall the Custodian incur
liability hereunder if the Custodian is prevented, forbidden or
delayed from performing, or omits to perform, any act or thing which
this Agreement provides shall be performed or omitted to be performed
by reason of: (i) any provision of any present or future law or
regulation or order of the United States of America, or any state
thereof, or of any foreign country, or political subdivision thereof
or of any court of competent jurisdiction; or (ii) any act of God or
war; unless, in each case, such delay or nonperformance is caused by
(A) the negligence, misfeasance or misconduct of the Custodian, or (B)
a malfunction or failure of equipment maintained or operated by the
Custodian other than a malfunction or failure caused by events beyond
the Custodian's control and which could not reasonably be anticipated
and/or prevented by the Custodian.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Funds, the
Custodian shall use all commercially reasonable efforts and shall take
all reasonable steps under the circumstances to mitigate the effects
of such event and to avoid continuing harm to the Funds.
Section 4.02. Liability of Custodian for Actions of Securities
Systems. Notwithstanding the provisions of Section4.01 to the
contrary, the Custodian shall not be liable to the Funds for any loss,
damage or expense resulting from the use by the Custodian of a
Securities System, unless such loss, damage or expense is caused by,
or results from, negligence, misfeasance or misconduct of the
Custodian. In the case of loss, damage or expense resulting from use
of a Securities System by the Custodian, the Custodian shall take all
reasonable steps to enforce such rights as it may have against the
Securities System to protect the interest of the Funds.
Section 4.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set
forth in this Agreement, the Funds severally agree to indemnify and
hold harmless the Custodian from all claims and liabilities (including
reasonable attorneys' fees) incurred or assessed against the Custodian
for actions taken in reliance upon Proper Instructions or Special
Instructions; provided, however, that such indemnity shall not apply
to claims and liabilities occasioned by or resulting from the
negligence, misfeasance or misconduct of the Custodian, or any other
breach of this Agreement by the Custodian. In addition, the Funds
severally agree to indemnify the Custodian against any liability
incurred by the Custodian by reason of taxes assessed to the
Custodian, or other costs, liability or expenses incurred by the
Custodian, resulting directly or indirectly solely from the fact that
securities and other property of the Funds is registered in the name
of the Custodian; provided, however, in no event shall such
indemnification be applicable to income, franchise or similar taxes
which may be imposed or applied against the Custodian or charges
imposed by a Federal Reserve Bank with respect to intra-day overdrafts
unless separately agreed to by the Funds.
(b) Extent of Liability. Notwithstanding anything to the contrary
contained herein, with respect to the indemnification obligations of
the Funds provided in this Section4.03, each Fund shall be: (i)
severally, and not jointly and severally, liable with each of the
other Funds; and (ii) liable only for its pro rata share of such
liabilities, determined with reference to such Fund's proportionate
interest in the aggregate of assets held by the Custodian in the
Account with respect to which such liability relates at the time such
liability was incurred, as reflected on the books and records of the
Funds.
(c) Notice of Litigation, Right to Prosecute, Etc. The Custodian
shall promptly notify the Funds in writing of the commencement of any
litigation or proceeding brought against the Custodian in respect of
which indemnity may be sought against the Funds pursuant to this
Section4.03. The Funds shall be entitled to participate in any such
litigation or proceeding and, after written notice from the Funds to
the Custodian, the Funds may assume the defense of such litigation or
proceeding with counsel of their choice at their own expense. The
Custodian shall not consent to the entry of any judgment or enter into
any settlement in any such litigation or proceeding without providing
the Funds with adequate notice of any such settlement or judgment, and
without the Funds' prior written consent. The Custodian shall submit
written evidence to the Funds with respect to any cost or expense for
which it seeks indemnification in such form and detail as the Funds
may reasonably request.
Section 4.04. Funds, Right to Proceed. Notwithstanding anything to
the contrary contained herein, the Funds shall have, at their election
upon reasonable notice to the Custodian, the right to enforce, to the
extent permitted by any applicable agreement and applicable law, the
Custodian's rights against any Securities System or other person for
loss, damage or expense caused the Custodian or the Funds by such
Securities System or other person, and shall be entitled to enforce
the rights of the Custodian with respect to.any claim against such
Securities System or other person which the Custodian may have as a
consequence of any such loss, damage or expense if and to the extent
that the Custodian or any Fund has not been made whole for any such
loss, damage or expense.
ARTICLE V - COMPENSATION
Section 5.01. Compensation. The Custodian shall be compensated for
its services hereunder in an amount, and at such times, as may be
agreed upon, from time to time, by the Custodian and the Funds. Each
Fund shall be severally, and not jointly, liable with the other Funds
only for its pro rata share of such compensation, determined with
reference to such Fund's proportionate interest in each Repurchase
Agreement transaction to which such compensation relates.
Section 5.02. Waiver of Right of Set-Off. The Custodian hereby
waives and relinquishes all contractual and common law rights of
set-off to which it may now or hereafter be or become entitled with
respect to any obligations of the Funds to the Custodian arising under
this Agreement.
ARTICLE VI - TERMINATION
Section 6.01. Events of Termination. This Agreement shall continue
in full force and effect until the first to occur of: (a) termination
by the Custodian or the Funds by an instrument in writing delivered to
the other party, such termination to take effect not sooner than
ninety (90) days after the date of such delivery; or (b) termination
by the Funds by written notice delivered to the Custodian, based upon
the Funds' determination that there is a reasonable basis to conclude
that the Custodian is insolvent or that the financial condition of the
Custodian is deteriorating in any material respect, in which case
termination shall take effect upon the Custodians receipt of such
notice or at such later time as the Funds shall designate; provided,
however, that this Agreement may be terminated as to one or more Funds
(but less than all Funds) by delivery of an amended Schedule A-1, A-2,
A-3 or A-4 pursuant to Section7.03 hereof. The execution and delivery
of an amended Schedule A-1, A-2, A-3 or A-4 which deletes one or more
Funds shall constitute a termination of this Agreement only with
respect to such deleted Fund(s).
Section 6.02. Successor Custodian; Payment of Compensation. Each of
the Funds may identify a successor custodian to which the cash,
Securities and other assets of such Fund shall, upon termination of
this Agreement, be delivered; provided that in the case of the
termination of this Agreement with respect to any of the Funds, such
Fund or Funds shall direct the Custodian to transfer the assets of
such Fund or Funds held by the Custodian pursuant to Proper
Instructions. The Custodian agrees to cooperate with the Funds in the
execution of documents and performance or all other actions necessary
or desirable in order to substitute the successor custodian for the
Custodian under this Agreement. In the event of termination, each
Fund shall make payment of such Fund's applicable share of unpaid
compensation within a reasonable time following termination and
delivery of a statement to the Funds setting forth such fees. The
termination of this Agreement with respect to any of the Funds shall
be governed by the provisions of this ArticleVI as to notice, payments
and delivery of securities and other assets, and shall not affect the
obligations of the parties hereunder with respect to the other Funds
set forth in Schedule A-1, A-2, A-3 or A-4 as amended from time to
time.
ARTICLE VII - MISCELLANEOUS
Section 7.01. Representative Capacity and Binding Obligation. A COPY
OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENTS OF EACH
FUND IS ON FILE WITH THE SECRETARY OF THE STATE OF EACH FUND'S
FORMATION, AND NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT
EXECUTED ON BEHALF OF THE TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE
OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY OF THE
SHAREHOLDERS, TRUSTEES, DIRECTORS, PARTNERS, OFFICERS, EMPLOYEES OR
AGENTS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS
AND PROPERTY OF THE FUNDS, AND IN THE CASE OF SERIES COMPANIES, SUCH
FUNDS' RESPECTIVE PORTFOLIOS OR SERIES.
THE CUSTODIAN AGREES THAT NO SHAREHOLDER, TRUSTEE, DIRECTOR, PARTNER,
OFFICER, EMPLOYEE OR AGENT OF ANY FUND MAY BE HELD PERSONALLY LIABLE
OR RESPONSIBLE FOR ANY OBLIGATIONS OF THE FUNDS ARISING OUT OF THIS
AGREEMENT. WITH RESPECT TO OBLIGATIONS OF EACH FUND ARISING OUT OF
THIS AGREEMENT, THE CUSTODIAN SHALL LOOK FOR PAYMENT OR SATISFACTION
OF ANY CLAIM SOLELY TO THE ASSETS AND PROPERTY OF THE FUND TO WHICH
SUCH OBLIGATION RELATES AS THOUGH EACH FUND HAD SEPARATELY CONTRACTED
WITH THE CUSTODIAN BY SEPARATE WRITTEN INSTRUMENT."
Section 7.02. Entire Agreement. This Agreement constitutes the
entire understanding and agreement of the parties hereto with respect
to the subject matter hereof.
Section 7.03. Amendments. No provision of this Agreement may be
amended except by a statement in writing signed by the party against
which enforcement of the amendment is sought; provided, however,
Schedule A-1, A-2, A-3 or A-4 listing the Funds which are parties
hereto, Schedule B listing the Fund Custodians and Schedule C listing
the Repo Custodians may be amended from time to time to add or delete
one or more Funds, Fund Custodians or Repo Custodians, as the case may
be, by the Funds' delivery of an amended Schedule A-1, A-2, A-3 or
A-4, Schedule B or Schedule C to the Custodian. The deletion of one
or more Funds from Schedule A-1, A-2, A-3 or A-4 shall have the effect
of terminating this Agreement as to such Fund(s), but shall not affect
this Agreement with respect to any other Fund.
Section 7.04. Interpretation. In connection with the operation of
this Agreement, the Custodian, and the Funds may agree in writing from
time to time on such provisions interpretative of or in addition to
the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this
Agreement.
Section 7.05. Captions. Headings contained in this Agreement, which
are included as convenient references only, shall have no bearing upon
the interpretation of the terms of the Agreement or the obligations of
the parties hereto.
Section 7.06. Governing Law. THE PROVISIONS OF THIS AGREEMENT SHALL
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 7.07. Notice and Confirmations.
(a) Except as provided in Section 7.07(b) below and except in the
case of Proper Instructions or Special Instructions, notices and other
writings contemplated by this Agreement shall be delivered by hand or
by facsimile transmission (provided that in the case of delivery by
facsimile transmission, notice shall also be mailed postage prepaid)
to the parties at the following addresses:
(i) If to the Funds:
FMR Texas Inc.
400 East Las Colinas Blvd., CP9M
Irving, Texas 75039
Telephone: (214) 584-7800
Attention: Ms. Deborah Todd or
Mr. Samuel Silver
(ii) If to the Custodian:
The Bank of New York
One Wall Street
Fourth Floor
New York, NY 10286
Attn: Claire Meskovic
Telephone: (212) 635-4808
Telefax: (212) 635-4828
(b) The Custodian may provide the confirmations required by Sections
2.02 and 2.03 of this Agreement by making the information available in
the form of a communication directly between electromechanical or
electrical devices or systems (including, without limitation,
computers) (or in such other manner as the parties hereto may agree in
writing) to the following Fund Agent:
Fidelity Accounting and Custody
Domestic Securities Operations
400 East Las Colinas Blvd., CP9E
Irving, Texas 75039
Telephone: (214) 506-4071
Attention: Mr. Mark Mufler
The address and telephone number of the Funds, the Fund Agent and the
Custodian and the identity of the Fund Agent specified in this Section
7.07 may be changed by written notice of the Funds to Custodian or
Custodian to the Funds, as the case may be. All written notices which
are required or provided to be given hereunder shall be effective upon
actual receipt by the entity to which such notice is given.
Section 7.08. Assignment. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective
successors and assigns, provided that, no party hereto may assign this
Agreement or any of its rights or obligations hereunder without the
prior written consent of each of the other parties.
Section 7.09. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
This Agreement shall become effective when one or more counterparts
have been signed and delivered by each of the parties.
Section 7.10. Confidentiality; Survival of Obligations. The parties
hereto agree that they shall each shall treat confidentially the terms
and conditions of this Agreement and all information provided by each
party to the others regarding its business and operations. All
confidential information provided by a party hereto shall be used by
any other party hereto solely for the purpose of rendering services
pursuant to this Agreement and, except as may be required in carrying
out this Agreement, shall not be disclosed to any third party without
the prior consent of such providing party. The foregoing shall not be
applicable to any information that is publicly available when provided
or thereafter becomes publicly available other than through a breach
of this Agreement, or that is required to be disclosed by any bank
examiner of the Custodian, any auditor of the parties hereto or by
judicial or administrative process or otherwise by applicable law or
regulation. The provisions of this Section 7.10 and Sections3.03,
4.01, 4.02, 4.03, 4.04, 4.05, 7.01 and 7.06 shall survive any
termination of this Agreement, provided that in the event of
termination the Custodian agrees that it shall transfer and return
Securities and other assets held by the Custodian for the benefit of
the Funds as the Funds direct pursuant to Proper Instructions.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed in its name and behalf on the day and year first above
written.
[Signature Lines Omitted]
SCHEDULES A-1, A-2, A-3 AND A-4
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT BETWEEN
THE BANK OF NEW YORK AND FIDELITY FUNDS DATED AS OF __________
The following is a list of the Funds to which this Agreement applies:
SCHEDULE B
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN THE BANK OF NEW YORK AND
FIDELITY FUNDS DATED AS OF MAY 11, 1995

The following is a list of the Fund Custodians of the Funds:
The Bank of New York
Morgan Guaranty Trust Company
Brown Brothers Harriman & Co.
First Union National Bank Charlotte
Chase Manhattan Bank, N.A.
State Street Bank and Trust Company

SCHEDULE C
TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN THE BANK OF NEW YORK AND
FIDELITY FUNDS DATED AS OF MAY 11, 1995
The following is a list of Repo Custodians of the Funds:
The Bank of New York
Chemical Bank
Morgan Guaranty Trust Company
Exhibit 8(o)
Form of
FIRST AMENDMENT TO
JOINT TRADING ACCOUNT CUSTODY AGREEMENT
BETWEEN
THE BANK OF NEW YORK
AND
FIDELITY FUNDS
FIRST AMENDMENT TO JOINT TRADING ACCOUNT CUSTODY AGREEMENT BETWEEN
THE BANK OF NEW YORK AND FIDELITY FUNDS, dated as of _______, by and
between THE BANK OF NEW YORK ("Custodian") and each of the entities
listed on SchedulesA-1, A-2, A-3 and A-4 hereto on behalf of itself
or, (i) in the case of a series company, on behalf of one or more of
its portfolios or series listed on SchedulesA-1 or A-2 hereto, (ii) in
the case of the accounts listed on Schedule A-3 hereto, acting through
Fidelity Management & Research Company, and (iii)in the case of the
commingled or individual accounts listed on Schedule A-4 hereto,
acting through Fidelity Management Trust Company (collectively, the
"Funds" and each, a "Fund").
WITNESSETH
WHEREAS, Custodian and certain of the Funds have entered into that
certain Joint Trading Account Custody Agreement between The Bank of
New York and Fidelity Funds, dated as of ______ (the "Agreement"),
pursuant to which the Funds have appointed the Custodian as its
custodian for the purpose of establishing and administering one or
more joint trading accounts or subaccounts thereof (individually, an
"Account" and collectively, the "Accounts") and holding cash and
securities for the Funds in connection with repurchase transactions
effected through the Accounts; and
WHEREAS, Seller and the Funds desire to amend the Agreement as set
forth below.
NOW, THEREFORE, in consideration of the premises and mutual promises
and covenants contained herein, the parties hereto agree as follows.
Unless otherwise defined herein or the context otherwise requires,
terms used in this Amendment, including the preamble and recitals,
have the meanings provided in the Agreement.
The Agreement is hereby amended by deleting Paragraph2.03(f) in its
entirety and substituting the following in lieu thereof:
Exhibit 8(o)
"(f) Overdraft. In the event that the Custodian is directed by
Proper Instructions to make any payment or transfer of funds on behalf
of a Fund for which there would be, at the close of business on the
date of such payment or transfer, insufficient funds held by the
Custodian on behalf of such Fund, the Custodian may, in its
discretion, provide an overdraft ("Overdraft") to the Fund (such Fund
being referred to herein as an "Overdraft Fund"), in an amount
sufficient to allow the completion of such payment or transfer. Any
Overdraft provided hereunder: (a) shall be payable on the next
Business Day, unless otherwise agreed by the Overdraft Fund and the
Custodian; and (b) shall accrue interest from the date of the
Overdraft to the date of payment in full by the Overdraft Fund at a
rate agreed upon in writing, from time to time, by the Custodian and
the Overdraft Fund. The Custodian and the Funds acknowledge that the
purpose of such Overdrafts is to temporarily finance the purchase or
sale of securities for prompt delivery in accordance with the terms
hereof. The Custodian hereby agrees to notify each Overdraft Fund by
3:00 p.m., New York time, of the amount of any Overdraft. Provided
that Custodian has given the notice required by this subparagraph (f),
the Funds hereby agree that, as security for the Overdraft of an
Overdraft Fund, the Custodian shall have a continuing lien and
security interest in and to all interest of such Overdraft Fund in
Securities whose purchase is financed by Custodian and which are in
Custodian's possession or in the possession or control of any third
party acting on Custodian's behalf and the proceeds thereof. In this
regard, Custodian shall be entitled to all the rights and remedies of
a pledgee under common law and a secured party under the New York
Uniform Commercial Code and any other applicable laws or regulations
as then in effect."

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed and delivered under seal by their duly authorized officers.
BANK OF NEW YORK
[Signature Lines Omitted]

Title: Senior Vice President
FIDELITY INVESTMENT COMPANIES LISTED
ON SCHEDULE A-1 HERETO AND ACCOUNTS
LISTED ON SCHEDULE A-3 HERETO
Dated:
[Signature Lines Omitted]

Title: Treasurer of the Fidelity Investment Companies
listed on ScheduleA-1 and Vice President of
Fidelity Management& Research Company
FIDELITY INVESTMENT COMPANIES LISTED
ON SCHEDULE A-2 HERETO
Dated:
[Signature Lines Omitted]

Title: Director of the Fidelity International (Bermuda)
Funds Limited, on behalf of the Funds listed on
Schedule A-2
ACCOUNTS LISTED ON SCHEDULE A-4 HERETO
By: FIDELITY MANAGEMENT TRUST COMPANY
Dated:
[Signature Lines Omitted]

Title: Executive Vice President

Exhibit 8(p)

Form of

CUSTODIAN AGREEMENT

Between
Each of the Investment Companies
Listed on Appendix "A" Attached Hereto
and
Brown Brothers Harriman & Company

TABLE OF CONTENTS
ARTICLE
Page
I. APPOINTMENT OF CUSTODIAN 1
II. POWERS AND DUTIES OF CUSTODIAN 1
2.01 Safekeeping 1
2.02 Manner of Holding Securities 1
2.03 Security Purchases 2
2.04 Exchanges of Securities 2
2.05 Sales of Securities 3
2.06 Depositary Receipts 3
2.07 Exercise of Rights; Tender Offers 3
2.08 Stock Dividends, Rights, Etc. 3
2.09 Options 4
2.10 Futures Contracts 4
2.11 Borrowing 4
2.12 Interest Bearing Deposits 5
2.13 Foreign Exchange Transactions 5
2.14 Securities Loans 5
2.15 Collections 6
2.16 Dividends, Distributions and Redemptions 6
2.17 Proceeds from Shares Sold 6
2.18 Proxies, Notices, Etc. 6
2.19 Bills and Other Disbursements 7
2.20 Nondiscretionary Functions 7
2.21 Bank Accounts 7
2.22 Deposit of Fund Assets in Securities Systems 7
2.23 Other Transfers 8
2.24 Establishment of Segregated Account 9
2.25 Custodian's Books and Records . 9
2.26 Opinion of Fund's Independent Certified Public
Accountants 9
2.27 Reports of Independent Certified Public Accountants 10
2.28 Overdraft Facility 10

III. PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS 10
3.01 Proper Instructions and Special Instructions 10
3.02 Authorized Persons 11
3.03 Persons Having Access to Assets of the Portfolios 11
3.04 Actions of the Custodian Based on Proper Instructions and
Special Instructions 11

i
IV. SUBCUSTODIANS 11
4.01 Domestic Subcustodians 12
4.02 Foreign Subcustodians and Interim Subcustodians 12
4.03 Special Subcustodians 13
4.04 Termination of a Subcustodian 13
4.05 Certification Regarding Foreign Subcustodians 13

V. STANDARD OF CARE; INDEMNIFICATION 14
5.01 Standard of Care 14
5.02 Liability of Custodian for Actions of Other Persons 15
5.03 Indemnification 15
5.04 Investment Limitations 16
5.05 Fund's Right to Proceed 16
VI. COMPENSATION 17
VII. TERMINATION 17
7.01 Termination of Agreement as to One or More Funds 17
7.02 Termination as to One or More Portfolios 18
VIII. DEFINED TERMS 18
IX. MISCELLANEOUS 19
9.01 Execution of Documents, Etc 19
9.02 Representative Capacity; Nonrecourse Obligations 19
9.03 Several Obligations of the Funds and the Portfolios 19
9.04 Representations and Warranties 19
9.05 Entire Agreement 20
9.06 Waivers and Amendments 20
9.07 Interpretation 20
9.08 Captions 20
9.09 Governing Law 20
9.10 Notices 21
IX. MISCELLANEOUS 21
9.11 Assignment 21
9.12 Counterparts 21
9.13 Confidentiality; Survival of Obligations 21

ii
APPENDICES
Appendix "A" - List of Funds and Portfolios
Appendix "B" - List of Additional Custodians,
Special Subcustodians and Foreign Subcustodians
Appendix "C" - Procedures Relating to
Custodian's Security Interest

iii

Exhibit 8(p)
FORM OF
CUSTODIAN AGREEMENT
AGREEMENT made as of the 1st day of September, 1994 between each of
the Investment Companies Listed on Appendix "A" hereto, as the same
may be amended from time to time (each a "Fund" and collectively the
"Funds") and Brown Brothers Harriman & Company (the "Custodian").
W I T N E S S E T H
WHEREAS, each Fund is or may be organized with one or more series of
shares, each of which shall represent an interest in a separate
portfolio of cash, securities and other assets (all such existing and
additional series now or hereafter listed on Appendix "A" being
hereinafter referred to individually, as a "Portfolio," and
collectively, as the "Portfolios"); and
WHEREAS, each Fund desires to appoint the Custodian as custodian on
behalf of each of its Portfolios in accordance with the provisions of
the Investment Company Act of 1940, as amended (the "1940 Act"), and
the rules and regulations thereunder, under the terms and conditions
set forth in this Agreement, and the Custodian has agreed so to act as
custodian.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of each of its Portfolios, each Fund hereby employs and
appoints the Custodian as a custodian, subject to the terms and
provisions of this Agreement. Each Fund shall deliver to the
Custodian, or shall cause to be delivered to the Custodian, cash,
securities and other assets owned by each of its Portfolios from time
to time during the term of this Agreement and shall specify to which
of its Portfolios such cash, securities and other assets are to be
specifically allocated.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and
duties set forth in this Article II. Pursuant to and in accordance
with Article IV hereof, the Custodian may appoint one or more
Subcustodians (as hereinafter defined) to exercise the powers and
perform the duties of the Custodian set forth in this Article II and
references to the Custodian in this Article II shall include any
Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall keep safely all
cash, securities and other assets of each Fund's Portfolios delivered
to the Custodian and, on behalf of such Portfolios, the Custodian
shall, from time to time, accept delivery of cash, securities and
other assets for safekeeping.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of each Fund's
Portfolios either: (i) by physical possession of the share
certificates or other instruments representing such securities in
registered or bearer form; or (ii) in book-entry form by a Securities
System (as hereinafter defined) in accordance with the provisions of
Section 2.22 below.
(b) The Custodian shall at all times hold registered securities of
each Portfolio in the name of the Custodian, the Portfolio or a
nominee of either of them, unless specifically directed by Proper
Instructions to hold such registered securities in so-called street
name; provided that, in any event, all such securities and other
assets shall be held in an account of the Custodian containing only
assets of a Portfolio, or only assets held by the Custodian as a
fiduciary or custodian for customers; and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or
other customer for which such securities and other assets are held in
such account and the respective interests therein.
Section 2.03. Security Purchases. Upon receipt of Proper
Instructions (as hereinafter defined), the Custodian shall pay for and
receive securities purchased for the account of a Portfolio, provided
that payment shall be made by the Custodian only upon receipt of the
securities: (a) by the Custodian; (b) by a clearing corporation of a
national securities exchange of which the Custodian is a member; or
(c) by a Securities System. Notwithstanding the foregoing, upon
receipt of Proper Instructions: (i) in the case of a repurchase
agreement, the Custodian may release funds to a Securities System
prior to the receipt of advice from the Securities System that the
securities underlying such repurchase agreement have been transferred
by book-entry into the Account (as hereinafter defined) maintained
with such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities System require that the
Securities System may make payment of such funds to the other party to
the repurchase agreement only upon transfer by book-entry of the
securities underlying the repurchase agreement into the Account; (ii)
in the case of time deposits, call account deposits, currency
deposits, and other deposits, foreign exchange transactions, futures
contracts or options, pursuant to Sections 2.09, 2.10, 2.12 and 2.13
hereof, the Custodian may make payment therefor before receipt of an
advice or confirmation evidencing said deposit or entry into such
transaction; (iii) in the case of the purchase of securities, the
settlement of which occurs outside of the United States of America,
the Custodian may make payment therefor and receive delivery of such
securities in accordance with local custom and practice generally
accepted by Institutional Clients (as hereinafter defined) in the
country in which the settlement occurs, but in all events subject to
the standard of care set forth in Article V hereof; and (iv) in the
case of the purchase of securities in which, in accordance with
standard industry custom and practice generally accepted by
Institutional Clients with respect to such securities, the receipt of
such securities and the payment therefor take place in different
countries, the Custodian may receive delivery of such securities and
make payment therefor in accordance with standard industry custom and
practice for such securities generally accepted by Institutional
Clients, but in all events subject to the standard of care set forth
in Article V hereof. For purposes of this Agreement, an
"Institutional Client" shall mean a major commercial bank,
corporation, insurance company, or substantially similar institution,
which, as a substantial part of its business operations, purchases or
sells securities and makes use of custodial services.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for
the account of a Portfolio for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par
value, conversion or other event relating to the securities or the
issuer of such securities, and shall deposit any such securities in
accordance with the terms of any reorganization or protective plan.
The Custodian shall, without receiving Proper Instructions: surrender
securities in temporary form for definitive securities; surrender
securities for transfer into the name of the Custodian, a Portfolio or
a nominee of either of them, as permitted by Section 2.02(b); and
surrender securities for a different number of certificates or
instruments representing the same number of shares or same principal
amount of indebtedness, provided that the securities to be issued will
be delivered to the Custodian or a nominee of the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper
Instructions, the Custodian shall make delivery of securities which
have been sold for the account of a Portfolio, but only against
payment therefor in the form of: (a) cash, certified check, bank
cashier's check, bank credit, or bank wire transfer; (b) credit to the
account of the Custodian with a clearing corporation of a national
securities exchange of which the Custodian is a member; or (c) credit
to the Account of the Custodian with a Securities System, in
accordance with the provisions of Section 2.22 hereof.
Notwithstanding the foregoing: (i) in the case of the sale of
securities, the settlement of which occurs outside of the United
States of America, such securities shall be delivered and paid for in
accordance with local custom and practice generally accepted by
Institutional Clients in the country in which the settlement occurs,
but in all events subject to the standard of care set forth in Article
V hereof; (ii) in the case of the sale of securities in which, in
accordance with standard industry custom and practice generally
accepted by Institutional Clients with respect to such securities, the
delivery of such securities and receipt of payment therefor take place
in different countries, the Custodian may deliver such securities and
receive payment therefor in accordance with standard industry custom
and practice for such securities generally accepted by Institutional
Clients, but in all events subject to the standard of care set forth
in Article V hereof; and (iii) in the case of securities held in
physical form, such securities shall be delivered and paid for in
accordance with "street delivery custom" to a broker or its clearing
agent, against delivery to the Custodian of a receipt for such
securities, provided that the Custodian shall have taken reasonable
steps to ensure prompt collection of the payment for, or the return
of, such securities by the broker or its clearing agent, and provided
further that the Custodian shall not be responsible for the selection
of or the failure or inability to perform of such broker or its
clearing agent.
Section 2.06. Depositary Receipts. Upon receipt of Proper
Instructions, the Custodian shall surrender securities to the
depositary used for such securities by an issuer of American
Depositary Receipts or International Depositary Receipts (hereinafter
referred to, collectively, as "ADRs"), against a written receipt
therefor adequately describing such securities and written evidence
satisfactory to the Custodian that the depositary has acknowledged
receipt of instructions to issue ADRs with respect to such securities
in the name of the Custodian or a nominee of the Custodian, for
delivery to the Custodian at such place as the Custodian may from time
to time designate. Upon receipt of Proper Instructions, the Custodian
shall surrender ADRs to the issuer thereof, against a written receipt
therefor adequately describing the ADRs surrendered and written
evidence satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to
deliver the securities underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights; Tender Offers. Upon receipt of
Proper Instructions, the Custodian shall: (a) deliver warrants, puts,
calls, rights or similar securities to the issuer or trustee thereof,
or to the agent of such issuer or trustee, for the purpose of exercise
or sale, provided that the new securities, cash or other assets, if
any, acquired as a result of such actions are to be delivered to the
Custodian; and (b) deposit securities upon invitations for tenders
thereof, provided that the consideration for such securities is to be
paid or delivered to the Custodian, or the tendered securities are to
be returned to the Custodian. Notwithstanding any provision of this
Agreement to the contrary, the Custodian shall take all necessary
action, unless otherwise directed to the contrary in Proper
Instructions, to comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions, or similar rights of security
ownership, and shall promptly notify each applicable Fund of such
action in writing by facsimile transmission or in such other manner as
such Fund and the Custodian may agree in writing.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall
receive and collect all stock dividends, rights and other items of
like nature and, upon receipt of Proper Instructions, take action with
respect to the same as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian,
any registered broker-dealer and, if necessary, a Fund on behalf of
any applicable Portfolio relating to compliance with the rules of the
Options Clearing Corporation or of any registered national securities
exchange or similar organization(s), the Custodian shall: (a) receive
and retain confirmations or other documents, if any, evidencing the
purchase or writing of an option on a security or securities index by
the applicable Portfolio; (b) deposit and maintain in a segregated
account, securities (either physically or by book-entry in a
Securities System), cash or other assets; and (c) pay, release and/or
transfer such securities, cash or other assets in accordance with
notices or other communications evidencing the expiration, termination
or exercise of such options furnished by the Options Clearing
Corporation, the securities or options exchange on which such options
are traded, or such other organization as may be responsible for
handling such option transactions. Each Fund, on behalf of its
applicable Portfolios, and the broker-dealer shall be responsible for
the sufficiency of assets held in any segregated account established
in compliance with applicable margin maintenance requirements and the
performance of other terms of any option contract.
Section 2.10. Futures Contracts. Upon receipt of Proper
Instructions, or pursuant to the provisions of any futures margin
procedural agreement among a Fund, on behalf of any applicable
Portfolio, the Custodian and any futures commission merchant (a
"Procedural Agreement"), the Custodian shall: (a) receive and retain
confirmations, if any, evidencing the purchase or sale of a futures
contract or an option on a futures contract by the applicable
Portfolio; (b) deposit and maintain in a segregated account, cash,
securities and other assets designated as initial, maintenance or
variation "margin" deposits intended to secure the applicable
Portfolio's performance of its obligations under any futures contracts
purchased or sold or any options on futures contracts written by the
Portfolio, in accordance with the provisions of any Procedural
Agreement designed to comply with the rules of the Commodity Futures
Trading Commission and/or any commodity exchange or contract market
(such as the Chicago Board of Trade), or any similar organization(s),
regarding such margin deposits; and (c) release assets from and/or
transfer assets into such margin accounts only in accordance with any
such Procedural Agreements. Each Fund, on behalf of its applicable
Portfolios, and such futures commission merchant shall be responsible
for the sufficiency of assets held in the segregated account in
compliance with applicable margin maintenance requirements and the
performance of any futures contract or option on a futures contract in
accordance with its terms.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of a Portfolio to lenders or their
agents, or otherwise establish a segregated account as agreed to by
the applicable Fund on behalf of such Portfolio and the Custodian, as
collateral for borrowings effected by such Portfolio, provided that
such borrowed money is payable by the lender (a) to or upon the
Custodian's order, as Custodian for such Portfolio, and (b)
concurrently with delivery of such securities.
Section 2.12. Interest Bearing Deposits.
Upon receipt of Proper Instructions directing the Custodian to
purchase interest bearing fixed term and call deposits (hereinafter
referred to collectively, as "Interest Bearing Deposits") for the
account of a Portfolio, the Custodian shall purchase such Interest
Bearing Deposits in the name of the Portfolio with such banks or trust
companies (including the Custodian, any Subcustodian or any subsidiary
or affiliate of the Custodian) (hereinafter referred to as "Banking
Institutions") and in such amounts as the applicable Fund may direct
pursuant to Proper Instructions. Such Interest Bearing Deposits may
be denominated in U.S. Dollars or other currencies, as the applicable
Fund on behalf of its Portfolio may determine and direct pursuant to
Proper Instructions. The Custodian shall include in its records with
respect to the assets of each Portfolio appropriate notation as to the
amount and currency of each such Interest Bearing Bank Deposit, the
accepting Banking Institution and all other appropriate details, and
shall retain such forms of advice or receipt evidencing such account,
if any, as may be forwarded to the Custodian by the Banking
Institution. The responsibilities of the Custodian to each Fund for
Interest Bearing Deposits accepted on the Custodian's books in the
United States on behalf of the Fund's Portfolios shall be that of a
U.S. bank for a similar deposit. With respect to Interest Bearing
Deposits other than those accepted on the Custodian's books, (a) the
Custodian shall be responsible for the collection of income as set
forth in Section 2.15 and the transmission of cash and instructions to
and from such accounts; and (b) the Custodian shall have no duty with
respect to the selection of the Banking Institution or, so long as the
Custodian acts in accordance with Proper Instructions, for the failure
of such Banking Institution to pay upon demand. Upon receipt of
Proper Instructions, the Custodian shall take such reasonable actions
as the applicable Fund deems necessary or appropriate to cause each
such Interest Bearing Deposit Account to be insured to the maximum
extent possible by all applicable deposit insurers including, without
limitation, the Federal Deposit Insurance Corporation.
Section 2.13. Foreign Exchange Transactions
(a) Foreign Exchange Transactions Other Than as Principal. Upon
receipt of Proper Instructions, the Custodian shall settle foreign
exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery on behalf of and for the account of a
Portfolio with such currency brokers or Banking Institutions as the
applicable Fund may determine and direct pursuant to Proper
Instructions. The Custodian shall be responsible for the transmission
of cash and instructions to and from the currency broker or Banking
Institution with which the contract or option is made, the safekeeping
of all certificates and other documents and agreements evidencing or
relating to such foreign exchange transactions and the maintenance of
proper records as set forth in Section 2.25. The Custodian shall have
no duty with respect to the selection of the currency brokers or
Banking Institutions with which a Fund deals on behalf of its
Portfolios or, so long as the Custodian acts in accordance with Proper
Instructions, for the failure of such brokers or Banking Institutions
to comply with the terms of any contract or option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall
not be obligated to enter into foreign exchange transactions as
principal. However, if the Custodian has made available to a Fund its
services as a principal in foreign exchange transactions, upon receipt
of Proper Instructions, the Custodian shall enter into foreign
exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery on behalf of and for the account of a
Portfolio of such Fund with the Custodian as principal. The Custodian
shall be responsible for the selection of the currency brokers or
Banking Institutions and the failure of such currency brokers or
Banking Institutions to comply with the terms of any contract or
option.
(c) Payments. Notwithstanding anything to the contrary contained
herein, upon receipt of Proper Instructions the Custodian may, in
connection with a foreign exchange contract, make free outgoing
payments of cash in the form of U.S. Dollars or foreign currency prior
to receipt of confirmation of such foreign exchange contract or
confirmation that the countervalue currency completing such contract
has been delivered or received.
Section 2.14. Securities Loans. Upon receipt of Proper
Instructions, the Custodian shall, in connection with loans of
securities by a Portfolio, deliver securities of such Portfolio to the
borrower thereof prior to receipt of the collateral, if any, for such
borrowing; provided that, in cases of loans of securities secured by
cash collateral, the Custodian's instructions to the Securities System
shall require that the Securities System deliver the securities of the
Portfolio to the borrower thereof only upon receipt of the collateral
for such borrowing.
Section 2.15. Collections. The Custodian shall, and shall cause any
Subcustodian to: (a) collect amounts due and payable to each Fund
with respect to portfolio securities and other assets of each of such
Fund's Portfolios; (b) promptly credit to the account of each
applicable Portfolio all income and other payments relating to
portfolio securities and other assets held by the Custodian hereunder
upon Custodian's receipt of such income or payments or as otherwise
agreed in writing by the Custodian and the applicable Fund; (c)
promptly endorse and deliver any instruments required to effect such
collections; (d) promptly execute ownership and other certificates and
affidavits for all federal, state and foreign tax purposes in
connection with receipt of income, capital gains or other payments
with respect to portfolio securities and other assets of each
applicable Portfolio, or in connection with the purchase, sale or
transfer of such securities or other assets; and (e) promptly file any
certificates or other affidavits for the refund or reclaim of foreign
taxes paid, and promptly notify each applicable Fund of any changes to
law, interpretative rulings or procedures regarding such reclaims, and
otherwise use all available measures customarily used to minimize the
imposition of foreign taxes at source, and promptly inform each
applicable Fund of alternative means of minimizing such taxes of which
the Custodian shall become aware (or with the exercise of reasonable
care should have become aware); provided, however, that with respect
to portfolio securities registered in so-called street name, the
Custodian shall use its best efforts to collect amounts due and
payable to each Fund with respect to its Portfolios. The Custodian
shall promptly notify each applicable Fund in writing by facsimile
transmission or in such other manner as each such Fund and the
Custodian may agree in writing if any amount payable with respect to
portfolio securities or other assets of the Portfolios of such Fund(s)
is not received by the Custodian when due. The Custodian shall not be
responsible for the collection of amounts due and payable with respect
to portfolio securities or other assets that are in default.
Section 2.16. Dividends, Distributions and Redemptions. The
Custodian shall promptly release funds or securities: (a) upon
receipt of Proper Instructions, to one or more Distribution Accounts
designated by the applicable Fund or Funds in such Proper
Instructions; or (b) upon receipt of Special Instructions, as
otherwise directed by the applicable Fund or Funds, for the purpose of
the payment of dividends or other distributions to shareholders of
each applicable Portfolio, and payment to shareholders who have
requested repurchase or redemption of their shares of the Portfolio(s)
(collectively, the "Shares"). For purposes of this Agreement, a
"Distribution Account" shall mean an account established at a Banking
Institution designated by the applicable Fund on behalf of one or more
of its Portfolios in Special Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall
receive funds representing cash payments received for Shares issued or
sold from time to time by the Funds, and shall promptly credit such
funds to the account(s) of the applicable Portfolio(s). The Custodian
shall promptly notify each applicable Fund of Custodian's receipt of
cash in payment for Shares issued by such Fund by facsimile
transmission or in such other manner as the Fund and Custodian may
agree in writing. Upon receipt of Proper Instructions, the Custodian
shall: (a) deliver all federal funds received by the Custodian in
payment for Shares in payment for such investments as may be set forth
in such Proper Instructions and at a time agreed upon between the
Custodian and the applicable Fund; and (b) make federal funds
available to the applicable Fund as of specified times agreed upon
from time to time by the applicable Fund and the Custodian, in the
amount of checks received in payment for Shares which are deposited to
the accounts of each applicable Portfolio.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver to
each applicable Fund, in the most expeditious manner practicable, all
forms of proxies, all notices of meetings, and any other notices or
announcements affecting or relating to securities owned by one or more
of the applicable Fund's Portfolios that are received by the
Custodian, any Subcustodian, or any nominee of either of them, and,
upon receipt of Proper Instructions, the Custodian shall execute and
deliver, or cause such Subcustodian or nominee to execute and deliver,
such proxies or other authorizations as may be required. Except as
directed pursuant to Proper Instructions, neither the Custodian nor
any Subcustodian or nominee shall vote upon any such securities, or
execute any proxy to vote thereon, or give any consent or take any
other action with respect thereto.
Section 2.19. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of each Portfolio.
Section 2.20. Nondiscretionary Functions. The Custodian shall
attend to all nondiscretionary details in connection with the sale,
exchange, substitution, purchase, transfer or other dealings with
securities or other assets of each Portfolio held by the Custodian,
except as otherwise directed from time to time pursuant to Proper
Instructions.
Section 2.21. Bank Accounts
(a) Accounts with the Custodian and any Subcustodians. The Custodian
shall open and operate a bank account or accounts (hereinafter
referred to collectively, as "Bank Accounts") on the books of the
Custodian or any Subcustodian provided that such account(s) shall be
in the name of the Custodian or a nominee of the Custodian, for the
account of a Portfolio, and shall be subject only to the draft or
order of the Custodian; provided however, that such Bank Accounts in
countries other than the United States may be held in an account of
the Custodian containing only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or
other customer for which such securities and other assets are held in
such account and the respective interests therein. Such Bank Accounts
may be denominated in either U.S. Dollars or other currencies. The
responsibilities of the Custodian to each applicable Fund for deposits
accepted on the Custodian's books in the United States shall be that
of a U.S. bank for a similar deposit. The responsibilities of the
Custodian to each applicable Fund for deposits accepted on any
Subcustodian's books shall be governed by the provisions of Section
5.02.
(b) Accounts With Other Banking Institutions. The Custodian may open
and operate Bank Accounts on behalf of a Portfolio, in the name of the
Custodian or a nominee of the Custodian, at a Banking Institution
other than the Custodian or any Subcustodian, provided that such
account(s) shall be in the name of the Custodian or a nominee of the
Custodian, for the account of a Portfolio, and shall be subject only
to the draft or order of the Custodian; provided however, that such
Bank Accounts may be held in an account of the Custodian containing
only assets held by the Custodian as a fiduciary or custodian for
customers, and provided further, that the records of the Custodian
shall indicate at all times the Portfolio or other customer for which
such securities and other assets are held in such account and the
respective interests therein. Such Bank Accounts may be denominated
in either U.S. Dollars or other currencies. Subject to the provisions
of Section 5.01(a), the Custodian shall be responsible for the
selection of the Banking Institution and for the failure of such
Banking Institution to pay according to the terms of the deposit.
(c) Deposit Insurance. Upon receipt of Proper Instructions, the
Custodian shall take such reasonable actions as the applicable Fund
deems necessary or appropriate to cause each deposit account
established by the Custodian pursuant to this Section 2.21 to be
insured to the maximum extent possible by all applicable deposit
insurers including, without limitation, the Federal Deposit Insurance
Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by a
Portfolio in: (a) The Depository Trust Company; (b) the Participants
Trust Company; (c) any book-entry system as provided in (i) Subpart O
of Treasury Circular No. 300, 31 CFR 306.115, (ii) Subpart B of
Treasury Circular Public Debt Series No. 27-76, 31 CFR 350.2, or (iii)
the book-entry regulations of federal agencies substantially in the
form of 31 CFR 306.115; or (d) any other domestic clearing agency
registered with the Securities and Exchange Commission ("SEC") under
Section 17A of the Securities Exchange Act of 1934 (or as may
otherwise be authorized by the Securities and Exchange Commission to
serve in the capacity of depository or clearing agent for the
securities or other assets of investment companies) which acts as a
securities depository and the use of which each applicable Fund has
previously approved by Special Instructions (as hereinafter defined)
(each of the foregoing being referred to in this Agreement as a
"Securities System"). Use of a Securities System shall be in
accordance with applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
(A) The Custodian may deposit and/or maintain securities held
hereunder in a Securities System, provided that such securities are
represented in an account ("Account") of the Custodian in the
Securities System which Account shall not contain any assets of the
Custodian other than assets held as a fiduciary, custodian, or
otherwise for customers and shall be so designated on the books and
records of the Securities System.
(B) The Securities System shall be obligated to comply with the
Custodian's directions with respect to the securities held in such
Account and shall not be entitled to a lien against the assets in such
Account for extensions of credit to the Custodian other than for
payment of the purchase price of such assets.
(C) Each Fund hereby designates the Custodian as the party in whose
name any securities deposited by the Custodian in the Account are to
be registered.
(D) The books and records of the Custodian shall at all times
identify those securities belonging to each Portfolio which are
maintained in a Securities System.
(E) The Custodian shall pay for securities purchased for the account
of a Portfolio only upon (w) receipt of advice from the Securities
System that such securities have been transferred to the Account of
the Custodian, and (x) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of such
Portfolio. The Custodian shall transfer securities sold for the
account of a Portfolio only upon (y) receipt of advice from the
Securities System that payment for such securities has been
transferred to the Account of the Custodian, and (z) the making of an
entry on the records of the Custodian to reflect such transfer and
payment for the account of such Portfolio. Copies of all advices from
the Securities System relating to transfers of securities for the
account of a Portfolio shall identify such Portfolio and shall be
maintained for such Portfolio by the Custodian. The Custodian shall
deliver to each applicable Fund on the next succeeding business day
daily transaction reports which shall include each day's transactions
in the Securities System for the account of each applicable Portfolio.
Such transaction reports shall be delivered to each applicable Fund or
any agent designated by such Fund pursuant to Proper Instructions, by
computer or in such other manner as such Fund and the Custodian may
agree in writing.
(F) The Custodian shall, if requested by a Fund pursuant to Proper
Instructions, provide such Fund with all reports obtained by the
Custodian or any Subcustodian with respect to a Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System.
(G) Upon receipt of Special Instructions, the Custodian shall
terminate the use of any Securities System (except the federal
book-entry system) on behalf of any Portfolio as promptly as
practicable and shall take all actions reasonably practicable to
safeguard the securities of any Portfolio maintained with such
Securities System.
Section 2.23. Other Transfers.
(a) Upon receipt of Proper Instructions, the Custodian shall transfer
to or receive from a third party that has been appointed to serve as
an additional custodian of one or more Portfolios (an "Additional
Custodian") securities, cash and other assets of such Portfolio(s) in
accordance with such Proper Instructions. Each Additional Custodian
shall be identified as such on Appendix B, as the same may be amended
from time to time in accordance with the provisions of Section
9.06(c).
(b) Upon receipt of Special Instructions, the Custodian shall make
such other dispositions of securities, funds or other property of a
Portfolio in a manner or for purposes other than as expressly set
forth in this Agreement, provided that the Special Instructions
relating to such disposition shall include a statement of the purpose
for which the delivery is to be made, the amount of funds and/or
securities to be delivered, and the name of the person or persons to
whom delivery is to be made, and shall otherwise comply with the
provisions of Sections 3.01 and 3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its
books a segregated account or accounts for and on behalf of a
Portfolio, into which account or accounts may be transferred cash
and/or securities or other assets of such Portfolio, including
securities maintained by the Custodian in a Securities System pursuant
to Section 2.22 hereof, said account or accounts to be maintained:
(a) for the purposes set forth in Sections 2.09, 2.10 and 2.11 hereof;
(b) for the purposes of compliance by the Portfolio with the
procedures required by Investment Company Act Release No. 10666, or
any subsequent release or releases of the SEC relating to the
maintenance of segregated accounts by registered investment companies;
or (c) for such other purposes as set forth, from time to time, in
Special Instructions.
Section 2.25. Custodian's Books and Records. The Custodian shall
provide any assistance reasonably requested by a Fund in the
preparation of reports to such Fund's shareholders and others, audits
of accounts, and other ministerial matters of like nature. The
Custodian shall maintain complete and accurate records with respect to
securities and other assets held for the accounts of each Portfolio as
required by the rules and regulations of the SEC applicable to
investment companies registered under the 1940 Act, including: (a)
journals or other records of original entry containing a detailed and
itemized daily record of all receipts and deliveries of securities
(including certificate and transaction identification numbers, if
any), and all receipts and disbursements of cash; (b) ledgers or other
records reflecting (i) securities in transfer, (ii) securities in
physical possession, (iii) securities borrowed, loaned or
collateralizing obligations of each Portfolio, (iv) monies borrowed
and monies loaned (together with a record of the collateral therefor
and substitutions of such collateral), (v) dividends and interest
received, (vi) the amount of tax withheld by any person in respect of
any collection made by the Custodian or any Subcustodian, and (vii)
the amount of reclaims or refunds for foreign taxes paid; and (c)
cancelled checks and bank records related thereto. The Custodian
shall keep such other books and records of each Fund as such Fund
shall reasonably request. All such books and records maintained by
the Custodian shall be maintained in a form acceptable to the
applicable Fund and in compliance with the rules and regulations of
the SEC, including, but not limited to, books and records required to
be maintained by Section 31(a) of the 1940 Act and the rules and
regulations from time to time adopted thereunder. All books and
records maintained by the Custodian pursuant to this Agreement shall
at all times be the property of each applicable Fund and shall be
available during normal business hours for inspection and use by such
Fund and its agents, including, without limitation, its independent
certified public accountants. Notwithstanding the preceding sentence,
no Fund shall take any actions or cause the Custodian to take any
actions which would cause, either directly or indirectly, the
Custodian to violate any applicable laws, regulations or orders.
Section 2.26. Opinion of Fund's Independent Certified Public
Accountants. The Custodian shall take all reasonable action as a Fund
may request to obtain from year to year favorable opinions from such
Fund's independent certified public accountants with respect to the
Custodian's activities hereunder in connection with the preparation of
the Fund's Form N-1A and the Fund's Form N-SAR or other periodic
reports to the SEC and with respect to any other requirements of the
SEC.
Section 2.27. Reports by Independent Certified Public Accountants.
At the request of a Fund, the Custodian shall deliver to such Fund a
written report prepared by the Custodian's independent certified
public accountants with respect to the services provided by the
Custodian under this Agreement, including, without limitation, the
Custodian's accounting system, internal accounting control and
procedures for safeguarding cash, securities and other assets,
including cash, securities and other assets deposited and/or
maintained in a Securities System or with a Subcustodian. Such report
shall be of sufficient scope and in sufficient detail as may
reasonably be required by any Fund and as may reasonably be obtained
by the Custodian.
Section 2.28. Overdraft Facility. In the event that the Custodian
is directed by Proper Instructions to make any payment or transfer of
funds on behalf of a Portfolio for which there would be, at the close
of business on the date of such payment or transfer, insufficient
funds held by the Custodian on behalf of such Portfolio, the Custodian
may, in its discretion, provide an overdraft (an "Overdraft") to the
applicable Fund on behalf of such Portfolio, in an amount sufficient
to allow the completion of such payment. Any Overdraft provided
hereunder: (a) shall be payable on the next Business Day, unless
otherwise agreed by the applicable Fund and the Custodian; and (b)
shall accrue interest from the date of the Overdraft to the date of
payment in full by the applicable Fund on behalf of the applicable
Portfolio at a rate agreed upon in writing, from time to time, by the
Custodian and the applicable Fund. The Custodian and each Fund
acknowledge that the purpose of such Overdrafts is to temporarily
finance the purchase or sale of securities for prompt delivery in
accordance with the terms hereof, or to meet emergency expenses not
reasonably foreseeable by such Fund. The Custodian shall promptly
notify each applicable Fund in writing (an "Overdraft Notice") of any
Overdraft by facsimile transmission or in such other manner as such
Fund and the Custodian may agree in writing. At the request of the
Custodian, each applicable Fund, on behalf of one or more of its
Portfolios, shall pledge, assign and grant to the Custodian a security
interest in certain specified securities of the applicable Portfolio,
as security for Overdrafts provided to such Portfolio, under the terms
and conditions set forth in Appendix "C" attached hereto.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.

(a) Proper Instructions. As used herein, the term "Proper
Instructions" shall mean: (i) a tested telex, a written (including,
without limitation, facsimile transmission) request, direction,
instruction or certification signed or initialed by or on behalf of
the applicable Fund by one or more Authorized Persons (as hereinafter
defined); (ii) a telephonic or other oral communication by one or more
Authorized Persons; or (iii) a communication effected directly between
an electro-mechanical or electronic device or system (including,
without limitation, computers) by or on behalf of the applicable Fund
by one or more Authorized Persons; provided, however, that
communications of the types described in clauses (ii) and (iii) above
purporting to be given by an Authorized Person shall be considered
Proper Instructions only if the Custodian reasonably believes such
communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the applicable Fund by tested
telex or in writing in the manner set forth in clause (i) above, but
the lack of such confirmation shall in no way affect any action taken
by the Custodian in reliance upon such oral instructions prior to the
Custodian's receipt of such confirmation. Each Fund and the Custodian
are hereby authorized to record any and all telephonic or other oral
instructions communicated to the Custodian. Proper Instructions may
relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions.
(b) Special Instructions. As used herein, the term "Special
Instructions" shall mean Proper Instructions countersigned or
confirmed in writing by the Treasurer or any Assistant Treasurer of
the applicable Fund or any other person designated by the Treasurer of
such Fund in writing, which countersignature or confirmation shall be
(i) included on the same instrument containing the Proper Instructions
or on a separate instrument relating thereto, and (ii) delivered by
hand, by facsimile transmission, or in such other manner as the
applicable Fund and the Custodian agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the
Custodian at the address and/or telephone, telecopy or telex number
agreed upon from time to time by the Custodian and the applicable
Fund.
Section 3.02. Authorized Persons. Concurrently with the execution
of this Agreement and from time to time thereafter, as appropriate,
each Fund shall deliver to the Custodian, duly certified as
appropriate by a Treasurer or Assistant Treasurer of such Fund, a
certificate setting forth: (a) the names, titles, signatures and
scope of authority of all persons authorized to give Proper
Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of such Fund (collectively, the
"Authorized Persons" and individually, an "Authorized Person"); and
(b) the names, titles and signatures of those persons authorized to
issue Special Instructions. Such certificate may be accepted and
relied upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and effect
until delivery to the Custodian of a similar certificate to the
contrary. Upon delivery of a certificate which deletes the name(s) of
a person previously authorized by a Fund to give Proper Instructions
or to issue Special Instructions, such persons shall no longer be
considered an Authorized Person or authorized to issue Special
Instructions for that Fund.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement,
no Authorized Person, Trustee, officer, employee or agent of any Fund
shall have physical access to the assets of any Portfolio of that Fund
held by the Custodian nor shall the Custodian deliver any assets of a
Portfolio for delivery to an account of such person; provided,
however, that nothing in this Section 3.03 shall prohibit (a) any
Authorized Person from giving Proper Instructions, or any person
authorized to issue Special Instructions from issuing Special
Instructions, so long as such action does not result in delivery of or
access to assets of any Portfolio prohibited by this Section 3.03; or
(b) each Fund's independent certified public accountants from
examining or reviewing the assets of the Portfolios of the Fund held
by the Custodian. Each Fund shall deliver to the Custodian a written
certificate identifying such Authorized Persons, Trustees, officers,
employees and agents of such Fund.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian
acts in accordance with (a) Proper Instructions or Special
Instructions, as the case may be, and (b) the terms of this Agreement,
the Custodian shall not be responsible for the title, validity or
genuineness of any property, or evidence of title thereof, received by
it or delivered by it pursuant to this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic
Subcustodians, Foreign Subcustodians, Interim Subcustodians and
Special Subcustodians to act on behalf of a Portfolio. (For purposes
of this Agreement, all duly appointed Domestic Subcustodians, Foreign
Subcustodians, Interim Subcustodians, and Special Subcustodians are
hereinafter referred to collectively, as "Subcustodians.")
Section 4.01. Domestic Subcustodians. The Custodian may, at any
time and from time to time, appoint any bank as defined in Section
2(a)(5) of the 1940 Act meeting the requirements of a custodian under
Section 17(f) of the 1940 Act and the rules and regulations
thereunder, to act on behalf of one or more Portfolios as a
subcustodian for purposes of holding cash, securities and other assets
of such Portfolios and performing other functions of the Custodian
within the United States (a "Domestic Subcustodian"); provided, that,
the Custodian shall notify each applicable Fund in writing of the
identity and qualifications of any proposed Domestic Subcustodian at
least thirty (30) days prior to appointment of such Domestic
Subcustodian, and such Fund may, in its sole discretion, by written
notice to the Custodian executed by an Authorized Person disapprove of
the appointment of such Domestic Subcustodian. If, following notice
by the Custodian to each applicable Fund regarding appointment of a
Domestic Subcustodian and the expiration of thirty (30) days after the
date of such notice, such Fund shall have failed to notify the
Custodian of its disapproval thereof, the Custodian may, in its
discretion, appoint such proposed Domestic Subcustodian as its
subcustodian.
Section 4.02. Foreign Subcustodians and Interim Subcustodians.
(a) Foreign Subcustodians. The Custodian may, at any time and from
time to time, appoint: (i) any bank, trust company or other entity
meeting the requirements of an "eligible foreign custodian" under
Section 17(f) of the 1940 Act and the rules and regulations thereunder
or by order of the Securities and Exchange Commission exempted
therefrom, or (ii) any bank as defined in Section 2(a)(5) of the 1940
Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder to act on behalf of
one or more Portfolios as a subcustodian for purposes of holding cash,
securities and other assets of such Portfolios and performing other
functions of the Custodian in countries other than the United States
of America (a "Foreign Subcustodian"); provided, that, prior to the
appointment of any Foreign Subcustodian, the Custodian shall have
obtained written confirmation of the approval of the Board of Trustees
or other governing body or entity of each applicable Fund on behalf of
its applicable Portfolio(s) (which approval may be withheld in the
sole discretion of such Board of Trustees or other governing body or
entity) with respect to (i) the identity and qualifications of any
proposed Foreign Subcustodian, (ii) the country or countries in which,
and the securities depositories or clearing agencies, if any, through
which, any proposed Foreign Subcustodian is authorized to hold
securities and other assets of the applicable Portfolio(s), and (iii)
the form and terms of the subcustodian agreement to be entered into
between such proposed Foreign Subcustodian and the Custodian. Each
such duly approved Foreign Subcustodian and the countries where and
the securities depositories and clearing agencies through which they
may hold securities and other assets of the applicable Portfolios
shall be listed on Appendix "B" attached hereto, as it may be amended,
from time to time, in accordance with the provisions of Section
9.05(c) hereof. Each Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed investment by one of
its Portfolios which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be
sufficient time for the Custodian to effect the appropriate
arrangements with a proposed foreign subcustodian, including obtaining
approval as provided in this Section 4.02(a). The Custodian shall not
amend any subcustodian agreement entered into with a Foreign
Subcustodian, or agree to change or permit any changes thereunder, or
waive any rights under such agreement, which materially affect a
Fund's rights or the Foreign Subcustodian's obligations or duties to
a Fund under such agreement, except upon prior approval pursuant to
Special Instructions.
(b) Interim Subcustodians. Notwithstanding the foregoing, in the
event that a Portfolio shall invest in a security or other asset to be
held in a country in which no Foreign Subcustodian is authorized to
act, the Custodian shall promptly notify the applicable Fund in
writing by facsimile transmission or in such other manner as such Fund
and Custodian shall agree in writing of the unavailability of an
approved Foreign Subcustodian in such country; and the Custodian
shall, upon receipt of Special Instructions, appoint any Person
designated by the applicable Fund in such Special Instructions to hold
such security or other asset. (Any Person appointed as a subcustodian
pursuant to this Section 4.02(b) is hereinafter referred to as an
"Interim Subcustodian.")
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of one or more
Portfolios, appoint one or more banks, trust companies or other
entities designated in such Special Instructions to act as a
subcustodian for purposes of: (i) effecting third-party repurchase
transactions with banks, brokers, dealers or other entities through
the use of a common custodian or subcustodian; (ii) establishing a
joint trading account for the applicable Portfolio(s) and other
registered open-end management investment companies for which Fidelity
Management & Research Company serves as investment adviser, through
which such Portfolios and such other investment companies shall
collectively participate in certain repurchase transactions; (iii)
providing depository and clearing agency services with respect to
certain variable rate demand note securities; and (iv) effecting any
other transactions designated by each applicable Fund in Special
Instructions. (Each such designated subcustodian is hereinafter
referred to as a "Special Subcustodian.") Each such duly appointed
Special Subcustodian shall be listed on Appendix "B" attached hereto,
as it may be amended from time to time in accordance with the
provisions of Section 9.05(c) hereof. In connection with the
appointment of any Special Subcustodian, the Custodian shall enter
into a subcustodian agreement with the Special Subcustodian in form
and substance approved by each applicable Fund, provided that such
agreement shall in all events comply with the provisions of the 1940
Act and the rules and regulations thereunder and the terms and
provisions of this Agreement. The Custodian shall not amend any
subcustodian agreement entered into with a Special Subcustodian, or
agree to change or permit any changes thereunder, or waive any rights
under such agreement, except upon prior approval pursuant to Special
Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall
(i) cause each Domestic Subcustodian and Foreign Subcustodian to, and
(ii) use its best efforts to cause each Interim Subcustodian and
Special Subcustodian to, perform all of its obligations in accordance
with the terms and conditions of the subcustodian agreement between
the Custodian and such Subcustodian. In the event that the Custodian
is unable to cause such Subcustodian to fully perform its obligations
thereunder, the Custodian shall forthwith, upon the receipt of Special
Instructions, terminate such Subcustodian with respect to each
applicable Fund and, if necessary or desirable, appoint a replacement
Subcustodian in accordance with the provisions of Section 4.01 or
Section 4.02, as the case may be. In addition to the foregoing, the
Custodian (A) may, at any time in its discretion, upon written
notification to each applicable Fund, terminate any Domestic
Subcustodian, Foreign Subcustodian or Interim Subcustodian, and (B)
shall, upon receipt of Special Instructions, terminate any
Subcustodian with respect to each applicable Fund, in accordance with
the termination provisions under the applicable subcustodian
agreement.
Section 4.05. Certification Regarding Foreign Subcustodians. Upon
request of a Fund, the Custodian shall deliver to such Fund a
certificate stating: (i) the identity of each Foreign Subcustodian
then acting on behalf of the Custodian for such Fund and its
Portfolios; (ii) the countries in which and the securities
depositories and clearing agents through which each such Foreign
Subcustodian is then holding cash, securities and other assets of any
Portfolio of such Fund; and (iii) such other information as may be
requested by such Fund to ensure compliance with Rule 17(f)-5 under
the 1940 Act.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise
reasonable care and diligence in carrying out all of its duties and
obligations under this Agreement, and shall be liable to each Fund for
all loss, damage and expense suffered or incurred by such Fund or its
Portfolios resulting from the failure of the Custodian to exercise
such reasonable care and diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any
Subcustodian or Securities System, or any subcustodian, securities
depository or securities system utilized by any such Subcustodian, or
any nominee of the Custodian or any Subcustodian (individually, a
"Person") is prevented, forbidden or delayed from performing, or omits
to perform, any act or thing which this Agreement provides shall be
performed or omitted to be performed, by reason of: (i) any provision
of any present or future law or regulation or order of the United
States of America, or any state thereof, or of any foreign country, or
political subdivision thereof or of any court of competent
jurisdiction; or (ii) any act of God or war or other similar
circumstance beyond the control of the Custodian, unless, in each
case, such delay or nonperformance is caused by (A) the negligence,
misfeasance or misconduct of the applicable Person, or (B) a
malfunction or failure of equipment operated or utilized by the
applicable Person other than a malfunction or failure beyond such
Person's control and which could not reasonably be anticipated and/or
prevented by such Person.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to any Fund or
Portfolio, (i) the Custodian shall, (ii) the Custodian shall cause any
applicable Domestic Subcustodian or Foreign Subcustodian to, and (iii)
the Custodian shall use its best efforts to cause any applicable
Interim Subcustodian or Special Subcustodian to, use all commercially
reasonable efforts and take all reasonable steps under the
circumstances to mitigate the effects of such event and to avoid
continuing harm to the Funds and the Portfolios.
(d) Advice of Counsel. The Custodian shall be entitled to receive
and act upon advice of counsel on all matters. The Custodian shall be
without liability for any action reasonably taken or omitted in good
faith pursuant to the advice of (i) counsel for the applicable Fund or
Funds, or (ii) at the expense of the Custodian, such other counsel as
the applicable Fund(s) and the Custodian may agree upon; provided,
however, with respect to the performance of any action or omission of
any action upon such advice, the Custodian shall be required to
conform to the standard of care set forth in Section 5.01(a).
(e) Expenses of the Funds. In addition to the liability of the
Custodian under this Article V, the Custodian shall be liable to each
applicable Fund for all reasonable costs and expenses incurred by such
Fund in connection with any claim by such Fund against the Custodian
arising from the obligations of the Custodian hereunder, including,
without limitation, all reasonable attorneys' fees and expenses
incurred by such Fund in asserting any such claim, and all expenses
incurred by such Fund in connection with any investigations, lawsuits
or proceedings relating to such claim; provided, that such Fund has
recovered from the Custodian for such claim.
(f) Liability for Past Records. The Custodian shall have no
liability in respect of any loss, damage or expense suffered by a
Fund, insofar as such loss, damage or expense arises from the
performance of the Custodian's duties hereunder by reason of the
Custodian's reliance upon records that were maintained for such Fund
by entities other than the Custodian prior to the Custodian's
appointment as custodian for such Fund.
Section 5.02. Liability of Custodian for Actions of Other Persons.
(a) Domestic Subcustodians and Foreign Subcustodians. The Custodian
shall be liable for the actions or omissions of any Domestic
Subcustodian or any Foreign Subcustodian to the same extent as if such
action or omission were performed by the Custodian itself. In the
event of any loss, damage or expense suffered or incurred by a Fund
caused by or resulting from the actions or omissions of any Domestic
Subcustodian or Foreign Subcustodian for which the Custodian would
otherwise be liable, the Custodian shall promptly reimburse such Fund
in the amount of any such loss, damage or expense.
(b) Interim Subcustodians. Notwithstanding the provisions of Section
5.01 to the contrary, the Custodian shall not be liable to a Fund for
any loss, damage or expense suffered or incurred by such Fund or any
of its Portfolios resulting from the actions or omissions of an
Interim Subcustodian unless such loss, damage or expense is caused by,
or results from, the negligence, misfeasance or misconduct of the
Custodian; provided, however, in the event of any such loss, damage or
expense, the Custodian shall take all reasonable steps to enforce such
rights as it may have against such Interim Subcustodian to protect the
interests of the Funds and the Portfolios.
(c) Special Subcustodians and Additional Custodians. Notwithstanding
the provisions of Section 5.01 to the contrary and except as otherwise
provided in any subcustodian agreement to which the Custodian, a Fund
and any Special Subcustodian or Additional Custodian are parties, the
Custodian shall not be liable to a Fund for any loss, damage or
expense suffered or incurred by such Fund or any of its Portfolios
resulting from the actions or omissions of a Special Subcustodian or
Additional Subcustodian, unless such loss, damage or expense is caused
by, or results from, the negligence, misfeasance or misconduct of the
Custodian; provided, however, that in the event of any such loss,
damage or expense, the Custodian shall take all reasonable steps to
enforce such rights as it may have against any Special Subcustodian or
Additional Custodian to protect the interests of the Funds and the
Portfolios.
(d) Securities Systems. Notwithstanding the provisions of Section
5.01 to the contrary, the Custodian shall not be liable to a Fund for
any loss, damage or expense suffered or incurred by such Fund or any
of its Portfolios resulting from the use by the Custodian of a
Securities System, unless such loss, damage or expense is caused by,
or results from, the negligence, misfeasance or misconduct of the
Custodian; provided, however, that in the event of any such loss,
damage or expense, the Custodian shall take all reasonable steps to
enforce such rights as it may have against the Securities System to
protect the interests of the Funds and the Portfolios.
(e) Reimbursement of Expenses. Each Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian on behalf of such Fund in connection with the fulfillment of
its obligations under this Section 5.02; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting
from the negligence, misfeasance or misconduct of the Custodian.
Section 5.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set
forth in this Agreement, each Fund severally and not jointly agrees to
indemnify and hold harmless the Custodian and its nominees from all
loss, damage and expense (including reasonable attorneys' fees)
suffered or incurred by the Custodian or its nominee caused by or
arising from actions taken by the Custodian on behalf of such Fund in
the performance of its duties and obligations under this Agreement;
provided, however, that such indemnity shall not apply to loss, damage
and expense occasioned by or resulting from the negligence,
misfeasance or misconduct of the Custodian or its nominee. In
addition, each Fund agrees severally and not jointly to indemnify any
Person against any liability incurred by reason of taxes assessed to
such Person, or other loss, damage or expenses incurred by such
Person, resulting from the fact that securities and other property of
such Fund's Portfolios are registered in the name of such Person;
provided, however, that in no event shall such indemnification be
applicable to income, franchise or similar taxes which may be imposed
or assessed against any Person.
(b) Notice of Litigation, Right to Prosecute, Etc. No Fund shall be
liable for indemnification under this Section 5.03 unless a Person
shall have promptly notified such Fund in writing of the commencement
of any litigation or proceeding brought against such Person in respect
of which indemnity may be sought under this Section 5.03. With
respect to claims in such litigation or proceedings for which
indemnity by a Fund may be sought and subject to applicable law and
the ruling of any court of competent jurisdiction, such Fund shall be
entitled to participate in any such litigation or proceeding and,
after written notice from such Fund to any Person, such Fund may
assume the defense of such litigation or proceeding with counsel of
its choice at its own expense in respect of that portion of the
litigation for which such Fund may be subject to an indemnification
obligation; provided, however, a Person shall be entitled to
participate in (but not control) at its own cost and expense, the
defense of any such litigation or proceeding if such Fund has not
acknowledged in writing its obligation to indemnify the Person with
respect to such litigation or proceeding. If such Fund is not
permitted to participate or control such litigation or proceeding
under applicable law or by a ruling of a court of competent
jurisdiction, such Person shall reasonably prosecute such litigation
or proceeding. A Person shall not consent to the entry of any
judgment or enter into any settlement in any such litigation or
proceeding without providing each applicable Fund with adequate notice
of any such settlement or judgment, and without each such Fund's prior
written consent. All Persons shall submit written evidence to each
applicable Fund with respect to any cost or expense for which they are
seeking indemnification in such form and detail as such Fund may
reasonably request.
Section 5.04. Investment Limitations. If the Custodian has
otherwise complied with the terms and conditions of this Agreement in
performing its duties generally, and more particularly in connection
with the purchase, sale or exchange of securities made by or for a
Portfolio, the Custodian shall not be liable to the applicable Fund
and such Fund agrees to indemnify the Custodian and its nominees, for
any loss, damage or expense suffered or incurred by the Custodian and
its nominees arising out of any violation of any investment or other
limitation to which such Fund is subject.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to
the contrary contained herein, each Fund shall have, at its election
upon reasonable notice to the Custodian, the right to enforce, to the
extent permitted by any applicable agreement and applicable law, the
Custodian's rights against any Subcustodian, Securities System, or
other Person for loss, damage or expense caused such Fund by such
Subcustodian, Securities System, or other Person, and shall be
entitled to enforce the rights of the Custodian with respect to any
claim against such Subcustodian, Securities System or other Person,
which the Custodian may have as a consequence of any such loss, damage
or expense, if and to the extent that such Fund has not been made
whole for any such loss or damage. If the Custodian makes such Fund
whole for any such loss or damage, the Custodian shall retain the
ability to enforce its rights directly against such Subcustodian,
Securities System or other Person. Upon such Fund's election to
enforce any rights of the Custodian under this Section 5.05, such Fund
shall reasonably prosecute all actions and proceedings directly
relating to the rights of the Custodian in respect of the loss, damage
or expense incurred by such Fund; provided that, so long as such Fund
has acknowledged in writing its obligation to indemnify the Custodian
under Section 5.03 hereof with respect to such claim, such Fund shall
retain the right to settle, compromise and/or terminate any action or
proceeding in respect of the loss, damage or expense incurred by such
Fund without the Custodian's consent and provided further, that if
such Fund has not made an acknowledgement of its obligation to
indemnify, such Fund shall not settle, compromise or terminate any
such action or proceeding without the written consent of the
Custodian, which consent shall not be unreasonably withheld or
delayed. The Custodian agrees to cooperate with each Fund and take
all actions reasonably requested by such Fund in connection with such
Fund's enforcement of any rights of the Custodian. Each Fund agrees
to reimburse the Custodian for all reasonable out-of-pocket expenses
incurred by the Custodian on behalf of such Fund in connection with
the fulfillment of its obligations under this Section 5.05; provided,
however, that such reimbursement shall not apply to expenses
occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian.
ARTICLE VI
COMPENSATION
On behalf of each of its Portfolios, each Fund shall compensate the
Custodian in an amount, and at such times, as may be agreed upon in
writing, from time to time, by the Custodian and such Fund.
ARTICLE VII
TERMINATION
Section 7.01. Termination of Agreement as to One or More Funds.
With respect to each Fund, this Agreement shall continue in full force
and effect until the first to occur of: (a) termination by the
Custodian by an instrument in writing delivered or mailed to such
Fund, such termination to take effect not sooner than ninety (90) days
after the date of such delivery; (b) termination by such Fund by an
instrument in writing delivered or mailed to the Custodian, such
termination to take effect not sooner than thirty (30) days after the
date of such delivery; or (c) termination by such Fund by written
notice delivered to the Custodian, based upon such Fund's
determination that there is a reasonable basis to conclude that the
Custodian is insolvent or that the financial condition of the
Custodian is deteriorating in any material respect, in which case
termination shall take effect upon the Custodian's receipt of such
notice or at such later time as such Fund shall designate. In the
event of termination pursuant to this Section 7.01 by any Fund (a
"Terminating Fund"), each Terminating Fund shall make payment of all
accrued fees and unreimbursed expenses with respect to such
Terminating Fund within a reasonable time following termination and
delivery of a statement to the Terminating Fund setting forth such
fees and expenses. Each Terminating Fund shall identify in any notice
of termination a successor custodian or custodians to which the cash,
securities and other assets of its Portfolios shall, upon termination
of this Agreement with respect to such Terminating Fund, be delivered.
In the event that no written notice designating a successor custodian
shall have been delivered to the Custodian on or before the date when
termination of this Agreement as to a Terminating Fund shall become
effective, the Custodian may deliver to a bank or trust company doing
business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $25,000,000, all securities
and other assets of such Terminating Fund's Portfolios held by the
Custodian and all instruments held by the Custodian relative thereto
and all other property of the Terminating Fund's Portfolios held by
the Custodian under this Agreement. Thereafter, such bank or trust
company shall be the successor of the Custodian with respect to such
Terminating Fund under this Agreement. In the event that securities
and other assets of such Terminating Fund's Portfolios remain in the
possession of the Custodian after the date of termination hereof with
respect to such Terminating Fund owing to failure of the Terminating
Fund to appoint a successor custodian, the Custodian shall be entitled
to compensation for its services in accordance with the fee schedule
most recently in effect, for such period as the Custodian retains
possession of such securities and other assets, and the provisions of
this Agreement relating to the duties and obligations of the Custodian
and the Terminating Fund shall remain in full force and effect. In
the event of the appointment of a successor custodian, it is agreed
that the cash, securities and other property owned by a Terminating
Fund and held by the Custodian, any Subcustodian or nominee shall be
delivered to the successor custodian; and the Custodian agrees to
cooperate with such Terminating Fund in the execution of documents and
performance of other actions necessary or desirable in order to
substitute the successor custodian for the Custodian under this
Agreement.
Section 7.02. Termination as to One or More Portfolios. This
Agreement may be terminated as to one or more of a Fund's Portfolios
(but less than all of its Portfolios) by delivery of an amended
Appendix "A" deleting such Portfolios pursuant to Section 9.05(b)
hereof, in which case termination as to such deleted Portfolios shall
take effect thirty (30) days after the date of such delivery. The
execution and delivery of an amended Appendix "A" which deletes one or
more Portfolios shall constitute a termination of this Agreement only
with respect to such deleted Portfolio(s), shall be governed by the
preceding provisions of Section 7.01 as to the identification of a
successor custodian and the delivery of cash, securities and other
assets of the Portfolio(s) so deleted, and shall not affect the
obligations of the Custodian and any Fund hereunder with respect to
the other Portfolios set forth in Appendix "A," as amended from time
to time.

ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:

Term Section
Account 2.22
ADRs 2.06
Additional Custodian 2.23(a)
Authorized Person(s) 3.02
Banking Institution 2.12(a)
Business Day Appendix "C"
Bank Accounts 2.21
Distribution Account 2.16
Domestic Subcustodian 4.01
Foreign Subcustodian 4.02(a)
Fund Preamble
Institutional Client 2.03
Interim Subcustodian 4.02(b)
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Portfolio Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
SEC 2.22
Securities System 2.22
Shares 2.16
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
Terminating Fund 7.01
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by each Fund. Upon request, each Fund shall execute and
deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in
connection with the performance by the Custodian or any Subcustodian
of their respective obligations to such Fund under this Agreement or
any applicable subcustodian agreement with respect to such Fund,
provided that the exercise by the Custodian or any Subcustodian of any
such rights shall in all events be in compliance with the terms of
this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to each applicable Fund or to such
other parties as such Fund(s) may designate in such Proper
Instructions, all such documents, instruments or agreements as may be
reasonable and necessary or desirable in order to effectuate any of
the transactions contemplated hereby.
Section 9.02. Representative Capacity; Nonrecourse Obligations. A
COPY OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF
EACH FUND IS ON FILE WITH THE SECRETARY OF THE STATE OF THE FUND'S
FORMATION, AND NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT
EXECUTED ON BEHALF OF THE TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE
OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY OF THE
TRUSTEES, OFFICERS, SHAREHOLDERS OR PARTNERS OF ANY FUND INDIVIDUALLY,
BUT ARE BINDING ONLY UPON THE ASSETS AND PROPERTY OF EACH FUND'S
RESPECTIVE PORTFOLIOS. THE CUSTODIAN AGREES THAT NO SHAREHOLDER,
TRUSTEE, OFFICER OR PARTNER OF ANY FUND MAY BE HELD PERSONALLY LIABLE
OR RESPONSIBLE FOR ANY OBLIGATIONS OF ANY FUND ARISING OUT OF THIS
AGREEMENT.
Section 9.03. Several Obligations of the Funds and the Portfolios.
WITH RESPECT TO ANY OBLIGATIONS OF A FUND ON BEHALF OF ANY OF ITS
PORTFOLIOS ARISING OUT OF THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, THE OBLIGATIONS ARISING UNDER SECTIONS 2.28, 5.03, 5.05
and ARTICLE VI HEREOF, THE CUSTODIAN SHALL LOOK FOR PAYMENT OR
SATISFACTION OF ANY OBLIGATION SOLELY TO THE ASSETS AND PROPERTY OF
THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH EACH FUND HAD
SEPARATELY CONTRACTED WITH THE CUSTODIAN BY SEPARATE WRITTEN
INSTRUMENT WITH RESPECT TO EACH OF ITS PORTFOLIOS.
Section 9.04. Representations and Warranties.
(a) Representations and Warranties of Each Fund. Each Fund hereby
severally and not jointly represents and warrants that each of the
following shall be true, correct and complete with respect to each
Fund at all times during the term of this Agreement: (i) the Fund is
duly organized under the laws of its jurisdiction of organization and
is registered as an open-end management investment company under the
1940 Act; and (ii) the execution, delivery and performance by the Fund
of this Agreement are (w) within its power, (x) have been duly
authorized by all necessary action, and (y) will not (A) contribute to
or result in a breach of or default under or conflict with any
existing law, order, regulation or ruling of any governmental or
regulatory agency or authority, or (B) violate any provision of the
Fund's corporate charter, Declaration of Trust or other organizational
document, or bylaws, or any amendment thereof or any provision of its
most recent Prospectus or Statement of Additional Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants to each Fund that each of the following
shall be true, correct and complete at all times during the term of
this Agreement: (i) the Custodian is duly organized under the laws of
its jurisdiction of organization and qualifies to act as a custodian
to open-end management investment companies under the provisions of
the 1940 Act; and (ii) the execution, delivery and performance by the
Custodian of this Agreement are (w) within its power, (x) have been
duly authorized by all necessary action, and (y) will not (A)
contribute to or result in a breach of or default under or conflict
with any existing law, order, regulation or ruling of any governmental
or regulatory agency or authority, or (B) violate any provision of the
Custodian's corporate charter, or other organizational document, or
bylaws, or any amendment thereof.
Section 9.05. Entire Agreement. This Agreement constitutes the
entire understanding and agreement of the Fund, on the one hand, and
the Custodian, on the other, with respect to the subject matter hereof
and accordingly, supersedes as of the effective date of this Agreement
any custodian agreement heretofore in effect between each Fund and the
Custodian.
Section 9.06. Waivers and Amendments. No provision of this
Agreement may be waived, amended or terminated except by a statement
in writing signed by the party against which enforcement of such
waiver, amendment or termination is sought; provided, however: (a)
Appendix "A" listing the Portfolios of each Fund for which the
Custodian serves as custodian may be amended from time to time to add
one or more Portfolios for one or more Funds, by each applicable
Fund's execution and delivery to the Custodian of an amended Appendix
"A", and the execution of such amended Appendix by the Custodian, in
which case such amendment shall take effect immediately upon execution
by the Custodian; (b) Appendix "A" may be amended from time to time to
delete one or more Portfolios (but less than all of the Portfolios) of
one or more of the Funds, by each applicable Fund's execution and
delivery to the Custodian of an amended Appendix "A", in which case
such amendment shall take effect thirty (30) days after such delivery,
unless otherwise agreed by the Custodian and each applicable Fund in
writing; (c) Appendix "B" listing Foreign Subcustodians, Special
Subcustodians and Additional Custodians approved by any Fund may be
amended from time to time to add or delete one or more Foreign
Subcustodians, Special Subcustodians or Additional Custodians for a
Fund or Funds by each applicable Fund's execution and delivery to the
Custodian of an amended Appendix "B", in which case such amendment
shall take effect immediately upon execution by the Custodian; and (d)
Appendix "C" setting forth the procedures relating to the Custodian's
security interest with respect to each Fund may be amended only by an
instrument in writing executed by each applicable Fund and the
Custodian.
Section 9.07. Interpretation. In connection with the operation of
this Agreement, the Custodian and any Fund may agree in writing from
time to time on such provisions interpretative of or in addition to
the provisions of this Agreement with respect to such Fund as may in
their joint opinion be consistent with the general tenor of this
Agreement. No interpretative or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment
of this Agreement or affect any other Fund.
Section 9.08. Captions. Headings contained in this Agreement, which
are included as convenient references only, shall have no bearing upon
the interpretation of the terms of the Agreement or the obligations of
the parties hereto.
Section 9.09. Governing Law. Insofar as any question or dispute may
arise in connection with the custodianship of foreign securities
pursuant to an agreement with a Foreign Subcustodian that is governed
by the laws of the State of New York, the provisions of this Agreement
shall be construed in accordance with and governed by the laws of the
State of New York, provided that in all other instances this Agreement
shall be construed in accordance with and governed by the laws of the
Commonwealth of Massachusetts, in each case without giving effect to
principles of conflicts of law.
Section 9.10. Notices. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission
(provided that in the case of delivery by facsimile transmission,
notice shall also be mailed postage prepaid to the parties at the
following addresses:
(a) If to any Fund:

c/o Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attn: Treasurer of the Fidelity Funds
Telephone: (617) 563-7000
Telefax: (617) 476-4195
(b) If to the Custodian:
Brown Brothers Harriman & Company
40 Water Street
Boston, Massachusetts 02109
Attn: W. Casey Gildea, Assistant Manager
Telephone: (617) 772-1330
Telefax: (617) 772-2263
or to such other address as a Fund or the Custodian may have
designated in writing to the other.
Section 9.11. Assignment. This Agreement shall be binding on and
shall inure to the benefit of each Fund severally and the Custodian
and their respective successors and assigns, provided that, subject to
the provisions of Section 7.01 hereof, neither the Custodian nor any
Fund may assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of the other party.
Section 9.12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
With respect to each Fund, this Agreement shall become effective when
one or more counterparts have been signed and delivered by such Fund
and the Custodian.
Section 9.13. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and
conditions of this Agreement and all information provided by each
party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by
any other party hereto solely for the purpose of rendering services
pursuant to this Agreement and, except as may be required in carrying
out this Agreement, shall not be disclosed to any third party without
the prior consent of such providing party. The foregoing shall not be
applicable to any information that is publicly available when provided
or thereafter becomes publicly available other than through a breach
of this Agreement, or that is required to be disclosed by any bank
examiner of the Custodian or any Subcustodian, any auditor of the
parties hereto, by judicial or administrative process or otherwise by
applicable law or regulation. The provisions of this Section 9.13 and
Sections 9.01, 9.02, 9.03, 9.09, Section 2.28, Section 3.04, Section
7.01, Article V and Article VI hereof and any other rights or
obligations incurred or accrued by any party hereto prior to
termination of this Agreement shall survive any termination of this
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed in its name and behalf on the day and year first above
written.
Each of the Investment Companies Listed on Brown Brothers Harriman &
Company
Appendix "A" Attached Hereto, on Behalf
of each of Their Respective Portfolios
[Signature Lines Omitted]

Exhibit 8(p)
Form of
Appendix "B"
To
Custodian Agreement
Between
Brown Brothers Harriman & Co. and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of
The following is a list of Additional Custodians, Special
Subcustodians and Foreign Subcustodians under the Custodian Agreement
dated as of September 1, 1994 (the "Custodian Agreement"):
A. Additional Custodians
CUSTODIAN PURPOSE
Bank of New York FICASH
FITERM
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Bank of New York FICASH
C. Foreign Subcustodians:
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina Citibank, N.A., Buenos Aires Caja de Valores, S.A.;
(Citibank, N.A., New York Agt. 7/16/81 Central de Registracion y
New York Agreement Amendment 8/31/90) Liquidacion de Instrumentos
de Endeudamiento Publico (CRYL)

First National Bank of Boston, Buenos Aires
(First Nat. Bank of Boston Agreement 1/15/88
Omnibus Amendment 2/22/94)
Australia National Australia Bank Ltd., Melbourne Austraclear
Limited;
(National Australia Bank Agt. 5/1/85 Reserve Bank Information and
Agreement Amendment 2/13/92 Transfer System (RITS)
Omnibus Amendment 11/22/93)
Austria Creditanstalt-Bankverein, Vienna Oesterreichische
Kontrollbank
(Creditanstalt Bankverein Agreement 12/18/89 Aktiengesellschaft
(OEKB)
Omnibus Amendment 1/17/94)
Bahrain British Bank of the Middle East, Manama None
Bangladesh Standard Chartered Bank, Dhaka None
(Standard Chartered Bank Agreement 2/18/92)

Belgium Banque Bruxelles Lambert, Brussels Caisse
Interprofessionnelle de Depot
(Banque Bruxelles Lambert Agreement 11/15/90 et Virements de Titres
(CIK)
Omnibus Amendment 3/1/94)
Banque Nationale de Belgique (BNB)
Bostwana Barclays Bank of Bostwana Ltd., Gaborone None
(Barclays Bank Agreement 10/5/94)

Brazil First National Bank of Boston, Sao Paulo Sao Paulo Stock
Exchange
(First National Bank of Boston Agreement 1/5/88 (BOVESPA), Sistema
Especial de
Omnibus Amendment 2/22/94) Liquidacao e Custodia (SELIC);
Rio de Janeiro Exchange (BVRJ)
Canada Canadian Imperial Bank of Commerce, Toronto Canadian
Depository for Securities,
(Canadian Imperial Bank of Commerce Ltd., (CDS)
Agreement 9/9/88
Omnibus Amendment 12/1/93)

Royal Bank of Canada, Toronto Bank of Canada
Proposed Agreement
Chile Citibank, N.A., Santiago None
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)

China-Shanghai Standard Chartered Bank, Shanghai Shanghai Securities
Central Clearing (Standard Chartered Bank Agreement 2/18/92) &
Registration Corporation (SSCCRC)
China-Shenzhen Standard Chartered Bank, Shenzhen Shenzhen Securities
Registration (Standard Chartered Bank Agreement 2/18/92) Corp.
Ltd., (SSRC)

Colombia Cititrust Colombia , S.A., Sociedad Fiduciaria, Bogota None
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank N.A. Subsidiary Amendment 10/19/95
Citibank N.A./Cititrust Colombia Agreement 12/2/91)

Czech Republic Ceskoslovenska Obchodni Banka, S.A., Prague Stredisko
Cennych Papiru (SCP)
(Ceskoslovenska Obchodni Banka Agreement 2/28/94)
Czech National Bank
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen - VP Center
(Den Danske Bank Agreement 1/1/89
Omnibus Amendment 12/1/93)
Ecuador Citibank, N.A., Quito None
(Citibank, N.A. New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank, Quito Side Letter 7/3/95)
Egypt Citibank, N.A., Cairo Misr for Clearing, Settlement
(Citibank, N.A. New York Agreement 7/16/81 and Depository
New York Agreement Amendment 8/31/90)

Finland Merita Bank Ltd., Helsinki Central Share Register of
Finland Cooperative (CSR)

Helsinki Money Market Center, Ltd.
(HMMC)

Finnish Central Securities
Depository Ltd.

France Banque Paribas, Paris SICOVAM
Agreement 4/2/93) Banque de France
Germany Dresdner Bank AG, Frankfurt Deutscher Kassenverein AG (DKV)
(Dresdner Bank Agreement 10/6/95)

Ghana Barclays Bank of Ghana Ltd., Accra None
(Barclays Bank Agreement 10/5/94)

Greece Citibank, N.A., Athens Apothetirion Titlon A.E.
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)

Hong Kong The Hongkong & Shanghai Banking Hong Kong Securities
Clearing Co. Corp., Ltd., Hong Kong Ltd. (HKSCC);
(Hongkong & Shanghai Banking Corp. Agt. 4/19/91 Central Clearing and
Omnibus Supplement 12/29/93) Settlement System (CCASS)

Hungary Citibank Budapest, Rt. Central Depository and Clearing
(Citibank N.A., New York Agreement 7/16/81 House (Budapest) Ltd.,
New York Agreement Amendment 8/31/90 (KELER Ltd.)
Citibank N.A. Subsidiary Amendment 10/19/95
Citibank N.A./Citibank Budapest Agmt. 1/24/92
(amended 6/23/92 and 9/29/92))
India Citibank, N.A., Mumbai National Securities Depository Limted
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank, Mumbai Amendment 11/17/93)

Standard Chartered Bank, Mumbai
(Standard Chartered Bank Agreement 2/18/92
SCB, Mumbai Annexure and Side Letter 7/18/94)
Indonesia Citibank, N.A., Jakarta None
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)
Ireland Allied Irish Banks, plc., Dublin Gilt Settlement Office (GSO)
(Allied Irish Banks Agreement 1/10/89
Omnibus Amendment 4/8/94) CREST
Israel Bank Hapoalim, B.M. Tel-Aviv Stock Exchange
(Bank Hapoalim Agreement 8/27/92) (TASE) Clearinghouse Ltd.
Italy Banca Commerciale Italiana, Milan Monte Titoli S.p.A.
(Banca Commerciale Italiana Agreement 5/8/89
Agreement Amendment 10/8/93 Banca D'Italia
Omnibus Amendment 12/14/93)
Japan Sumitomo Trust & Banking Co., Tokyo Japan Securities Depository
Center
(Sumitomo Trust & Banking Agreement 7/17/92 (JASDEC)
Omnibus Amendment 1/13/94); Bank of Japan
Jordan Arab Bank, plc, Amman None
(Arab Bank Agreement 4/5/95

Kenya Barclays Bank of Kenya Ltd., Nairobi None
(Barclays Bank Agreement 10/5/94)
Lebanon British Bank of the Middle East, Beirut Midclear
Malaysia Hongkong Bank Malaysia Berhad Malaysian Central Depository
Sdn. (Hongkong & Shanghai Banking Corp. Agt. 4/19/91 Bhd. (MCD)
Omnibus Supplement 12/29/93
Malaysia Subsidiary Supplement 5/23/94) Bank Negara Malaysia

Mauritius Hongkong & Shanghai Banking Corp., Ltd., Central Depository
& Settlement Co., Port Louis Ltd.
Mexico Citibank Mexico, S.A., Mexico City Institucion para el
Deposito de
(Citibank N.A., New York Agreement 7/16/81 Valores- S.D. INDEVAL,
S.A. de New York Agreement Amendment 8/31/90 C.V.
Citibank, Mexico, S.A. Amendment 2/7/95)
Banco de Mexico
Morocco Banque Marocaine du Commerce Exterieur, None
Casablanca
(BMCE Agreement 7/6/94)

Namibia Standard Bank Namibia Ltd., Windhoek None
Netherlands ABN-AMRO, Bank N. V., Amsterdam Nederlands Centraal
Instituut voor Giraal Effektenverkeer BV (NECIGEF)/KAS
Associatie N.V. (ABN-AMRO Agreement 12/19/88) (KAS)

De Nederlandsche Bank (DNB)New New Zealand National Australia Bank
Ltd., Melbourne Reserve Bank of New Zealand
(RBNZ)
(National Australia Bank Agreement 5/1/85
Agreement Amendment 2/13/92 New Zealand Securities
Omnibus Amendment 11/22/93 Depository Limited (NZCDS)
New Zealand Addendum 3/7/89)

Norway Den norske Bank ASA, Oslo Verdipapirsentralen (VPS)
(Den norske Bank Agreement 11/16/94)

Oman British Bank of the Middle East, Muscat Muscat Securities Market

Pakistan Standard Chartered Bank, Karachi None
(Standard Chartered Bank Agreement 2/18/92)

Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)

Philippines Citibank, N.A., Manila The Philippines Central
Depository, (Citibank N.A., New York Agreement 7/16/81 Inc.
New York Agreement Amendment 8/31/90)
Poland Citibank Poland, S.A. National Depository of Securities
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90 National Bank of Poland
Citibank Subsidiary Amendment 10/19/95
Citibank, N.A./Citibank Poland S.A. Agt. 11/6/92)
Bank Polska Kasa Opieki S.A., Warsaw

Portugal Banco Espirito Santo e Comercial Central de Valores
Mobiliaros
de Lisboa, S.A., Lisbon (Interbolsa)
(BESCL Agreement 4/26/89
Omnibus Amendment 2/23/94)
Singapore Hongkong & Shanghai Banking Central Depository Pte Ltd.
(CDP)
Corp., Ltd., Singapore
(Hongkong & Shanghai Banking Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93)
Slovak Republic Ceskoslovenska Obchodna Banka, S.A., Bratislava
Stredisko Cennych Papeirov (SCP)
(Ceskoslovenska Obchodna Banka Agmt. 10/12/94)
National Bank of Slovakia
South Africa First National Bank of Southern Africa Ltd., The Central
Depository (Pty) Ltd. Johannesburg (CD)
(First National Bank of Southern Africa Agmt. 8/7/91)
South Korea Citibank, N.A., Seoul Korean Securities Depository (KSD)
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90
Citibank, Seoul Agreement Supplement 10/28/94)

Spain Banco Santander S.A., Madrid Servicio de Compensacion y
(Banco Santander Agreement 12/14/88) Liquidacion de Valores (SCLV)

Banco de Espana
Sri Lanka Hongkong & Shanghai Banking Corp. Ltd., Central Depository
System (Pvt) Colombo Limited (CDS)
(Hongkong & Shanghai Banking Corp. Agt. 4/19/91
Omnibus Supplement 12/29/93)
Swaziland Barclays Bank of Swaziland Ltd., Mbabne None
(Barclays Bank Agreement 10/5/94)
Sweden Skandinaviska Enskilda Banken, Stockholm Vardepappercentralen
VPC AB
(Skandinaviska Enskilda Banken Agreement 2/20/89
Omnibus Amendment 12/3/93)
Switzerland Swiss Bank Corporation, Basel Schweizerische Effekten -
Giro A.G.
(Swiss Bank Corporation Agreement 3/1/94) (SEGA)
Taiwan Standard Chartered Bank, Taipei Taiwan Securities Central
Depository (Standard Chartered Bank Agmt. 2/18/92) Co. Ltd. (TSCD)
Thailand Hongkong & Shanghai Banking Corp. Ltd., Thailand Securities
Depository
Bangkok Company (TSD)
(Hongkong & Shanghai Banking Corp. Agmt. 4/19/91
Omnibus Amendment 12/29/93)
Transnational Cedel Bank Societe
Anonyme, Luxembourg

Euroclear Clearance System
Societe Cooperative, Belgium
Turkey Citibank, N.A., Istanbul Takas ve Saklama Bankasi A.S. (TvS)
(Citibank N.A., New York Agmt. 7/16/81
New York Agmt. Amendment 8/31/90) Central Bank of Turkey (CBT)
United Kingdom Lloyds Bank PLC, London Central Gilts Office (CGO);
CREST;
Central Money Markets Office
(CMO)

Uruguay First National Bank of Boston, Montevideo None

Venezuela Citibank, N.A., Caracas None
(Citibank N.A., New York Agreement 7/16/81
New York Agreement Amendment 8/31/90)
Zambia Stanbic Bank Zambia Ltd., Lusaka Lusaka Central Depository
Zimbabwe Stanbic Bank Zimbabwe Ltd., Harare None

Each of the Investment Companies Listed on Appendix "A" to the
Custodian Agreement,
on Behalf of Each of Their Respective Portfolios
[Signature Lines Omitted]
Exhibit 8(p)
Form of
Appendix "C" to the
Custodian Agreement
Between
Each of the Investment Companies
Listed on Appendix "A" Thereto
And
BROWN BROTHERS HARRIMAN & COMPANY
Dated as of _______
PROCEDURES RELATING TO CUSTODIAN'S SECURITY INTEREST
As security for any Overdrafts (as defined in the Custodian
Agreement) of any Portfolio, the applicable Fund, on behalf of such
Portfolio, shall pledge, assign and grant to the Custodian a security
interest in Collateral (as hereinafter defined), under the terms,
circumstances and conditions set forth in this Appendix "C".
Section 1. Defined Terms. As used in this Appendix "C" the
following terms shall have the following respective meanings:
(a) "Business Day" shall mean any day that is not a Saturday, a
Sunday or a day on which the Custodian is closed for business.
(b) "Collateral" shall mean, with respect to any Portfolio,
securities held by the Custodian on behalf of the Portfolio having a
fair market value (as determined in accordance with the procedures set
forth in the prospectus for the Portfolio) equal to the aggregate of
all Overdraft Obligations of such Portfolio: (i) identified in any
Pledge Certificate executed on behalf of such Portfolio; or (ii)
designated by the Custodian for such Portfolio pursuant to Section 3
of this Appendix C. Such securities shall consist of marketable
securities held by the Custodian on behalf of such Portfolio or, if no
such marketable securities are held by the Custodian on behalf of such
Portfolio, such other securities designated by the applicable Fund in
the applicable Pledge Certificate or by the Custodian pursuant to
Section 3 of this Appendix C.
(c) "Overdraft Obligations" shall mean, with respect to any
Portfolio, the amount of any outstanding Overdraft(s) provided by the
Custodian to such Portfolio together with all accrued interest
thereon.
(d) "Pledge Certificate" shall mean a Pledge Certificate in the form
attached to this Appendix "C" as Schedule 1 executed by a duly
authorized officer of the applicable Fund and delivered by such Fund
to the Custodian by facsimile transmission or in such other manner as
the applicable Fund and the Custodian may agree in writing.
(e) "Release Certificate" shall mean a Release Certificate in the
form attached to this Appendix "C" as Schedule 2 executed by a duly
authorized officer of the Custodian and delivered by the Custodian to
the applicable Fund by facsimile transmission or in such other manner
as such Fund and the Custodian may agree in writing.
(f) "Written Notice" shall mean a written notice executed by a duly
authorized officer of the party delivering the notice and delivered by
facsimile transmission or in such other manner as the applicable Fund
and the Custodian shall agree in writing.
Section 2. Pledge of Collateral. To the extent that any Overdraft
Obligations of a Portfolio are not satisfied by the close of business
on the first Business Day following the Business Day on which the
applicable Fund receives Written Notice requesting security for such
Overdraft Obligation and stating the amount of such Overdraft
Obligation, the applicable Fund, on behalf of such Portfolio, shall
pledge, assign and grant to the Custodian a first priority security
interest, by delivering to the Custodian, a Pledge Certificate
executed by such Fund on behalf of such Portfolio describing the
applicable Collateral. Such Written Notice may, in the discretion of
the Custodian, be included within or accompany the Overdraft Notice
relating to the applicable Overdraft Obligations.
Section 3. Failure to Pledge Collateral. In the event that the
applicable Fund shall fail: (a) to pay, on behalf of the applicable
Portfolio, the Overdraft Obligation described in such Written Notice;
(b) to deliver to the Custodian a Pledge Certificate pursuant to
Section 2; or (c) to identify substitute securities pursuant to
Section 6 upon the sale or maturity of any securities identified as
Collateral, the Custodian may, by Written Notice to the applicable
Fund specify Collateral which shall secure the applicable Overdraft
Obligation. Such Fund, on behalf of any applicable Portfolio, hereby
pledges, assigns and grants to the Custodian a first priority security
interest in any and all Collateral specified in such Written Notice;
provided that such pledge, assignment and grant of security shall be
deemed to be effective only upon receipt by the applicable Fund of
such Written Notice.
Section 4. Delivery of Additional Collateral. If at any time the
Custodian shall notify a Fund by Written Notice that the fair market
value of the Collateral securing any Overdraft Obligation of one of
such Fund's Portfolios is less than the amount of such Overdraft
Obligation, such Fund, on behalf of the applicable Portfolio, shall
deliver to the Custodian, within one (1) Business Day following the
Fund's receipt of such Written Notice, an additional Pledge
Certificate describing additional Collateral. If such Fund shall fail
to deliver such additional Pledge Certificate, the Custodian may
specify Collateral which shall secure the unsecured amount of the
applicable Overdraft Obligation in accordance with Section 3 of this
Appendix C.
Section 5. Release of Collateral. Upon payment by a Fund, on behalf
of one of its Portfolios, of any Overdraft Obligation secured by the
pledge of Collateral, the Custodian shall promptly deliver to such
Fund a Release Certificate pursuant to which the Custodian shall
release Collateral from the lien under the applicable Pledge
Certificate or Written Notice pursuant to Section 3 having a fair
market value equal to the amount paid by such Fund on account of such
Overdraft Obligation. In addition, if at any time a Fund shall notify
the Custodian by Written Notice that such Fund desires that specified
Collateral be released and: (a) that the fair market value of the
Collateral securing any Overdraft Obligation shall exceed the amount
of such Overdraft Obligation; or (b) that the Fund has delivered a
Pledge Certificate substituting Collateral for such Overdraft
Obligation, the Custodian shall deliver to such Fund, within one (1)
Business Day following the Custodian's receipt of such Written Notice,
a Release Certificate relating to the Collateral specified in such
Written Notice.
Section 6. Substitution of Collateral. A Fund may substitute
securities for any securities identified as Collateral by delivery to
the Custodian of a Pledge Certificate executed by such Fund on behalf
of the applicable Portfolio, indicating the securities pledged as
Collateral.
Section 7. Security for Individual Portfolios' Overdraft
Obligations. The pledge of Collateral by a Fund on behalf of any of
its individual Portfolios shall secure only the Overdraft Obligations
of such Portfolio. In no event shall the pledge of Collateral by one
of a Fund's Portfolios be deemed or considered to be security for the
Overdraft Obligations of any other Portfolio of such Fund or of any
other Fund.
Section 8. Custodian's Remedies. Upon (a) a Fund's failure to pay
any Overdraft Obligation of an applicable Portfolio within thirty (30)
days after receipt by such Fund of a Written Notice demanding security
therefore, and (b) one (1) Business Day's prior Written Notice to such
Fund, the Custodian may elect to enforce its security interest in the
Collateral securing such Overdraft Obligation, by taking title to (at
the then prevailing fair market value), or selling in a commercially
reasonable manner, so much of the Collateral as shall be required to
pay such Overdraft Obligation in full. Notwithstanding the provisions
of any applicable law, including, without limitation, the Uniform
Commercial Code, the remedy set forth in the preceding sentence shall
be the only right or remedy to which the Custodian is entitled with
respect to the pledge and security interest granted pursuant to any
Pledge Certificate or Section 3. Without limiting the foregoing, the
Custodian hereby waives and relinquishes all contractual and common
law rights of set off to which it may now or hereafter be or become
entitled with respect to any obligations of any Fund to the Custodian
arising under this Appendix "C" to the Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Appendix to
be executed in its name and behalf on the day and year first above
written.
Each of the Investment Companies Listed on BROWN BROTHERS HARRIMAN &
Schedule "A" to the Custodian Agreement, on COMPANY
Behalf of Each of Their Respective Portfolios
[Signature lines omitted]
SCHEDULE 1
TO
APPENDIX "C"
PLEDGE CERTIFICATE
This Pledge Certificate is delivered pursuant to the Custodian
Agreement dated as of [ ] (the "Agreement"), between [
] (the "Fund") and [ ] (the "Custodian"). Capitalized terms
used herein without definition shall have the respective meanings
ascribed to them in the Agreement. Pursuant to [Section 2 or Section
4] of Appendix "C" attached to the Agreement, the Fund, on behalf of [
] (the "Portfolio"), hereby pledges, assigns and grants to the
Custodian a first priority security interest in the securities listed
on Exhibit "A" attached to this Pledge Certificate (collectively, the
"Pledged Securities"). Upon delivery of this Pledge Certificate, the
Pledged Securities shall constitute Collateral, and shall secure all
Overdraft Obligations of the Portfolio described in that certain
Written Notice dated , 19 , delivered by the Custodian to
the Fund. The pledge, assignment and grant of security in the Pledged
Securities hereunder shall be subject in all respect to the terms and
conditions of the Agreement, including, without limitation, Sections 7
and 8 of Appendix "C" attached thereto.
IN WITNESS WHEREOF, the Fund has caused this Pledge Certificate to be
executed in its name, on behalf of the Portfolio this day of
19 .
[FUND], on Behalf of [Portfolio]
By: ___________________
Name: ___________________
Title: ___________________

EXHIBIT "A"
TO
PLEDGE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
SCHEDULE 2
TO
APPENDIX "C"
RELEASE CERTIFICATE
This Release Certificate is delivered pursuant to the Custodian
Agreement dated as of [ ] (the "Agreement"), between [
] (the "Fund") and [ ] (the "Custodian"). Capitalized terms
used herein without definition shall have the respective meanings
ascribed to them in the Agreement. Pursuant to Section 5 of Appendix
"C" attached to the Agreement, the Custodian hereby releases the
securities listed on Exhibit "A" attached to this Release Certificate
from the lien under the [Pledge Certificate dated ___________, 19 or
the Written Notice delivered pursuant to Section 3 of Appendix "C"
dated _________, 19 ].
IN WITNESS WHEREOF, the Custodian has caused this Release Certificate
to be executed in its name and on its behalf this day of 19 .

BROWN BROTHERS HARRIMAN & COMPANY
By: _____________________
Name: _____________________
Title: _____________________
EXHIBIT "A"
TO
RELEASE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares

CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the
Prospectuses and Statements of Additional Information in
Post-Effective Amendment No. 66 to the Registration Statement on Form
N-1A of Fidelity Commonwealth Trust: Fidelity Intermediate Bond Fund,
Fidelity Large Cap Stock Fund, Spartan Market Index Fund, Fidelity
Small Cap Selector, and Fidelity Small Cap Stock Fund, of our reports
dated June 5, 1998 on the financial statements and financial
highlights included in the April 30, 1998 Annual Reports to
Shareholders of the aforementioned funds.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectuses and "Auditor" in the
Statements of Additional Information.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 18, 1998

<ARTICLE> 6
<CIK> 0000205323
<NAME> Fidelity Commonwealth Trust
<SERIES>
<NUMBER> 11
<NAME> Fidelity Intermediate Bond Fund
<MULTIPLIER> 1,000

<S>
<C>
<PERIOD-TYPE> YEAR

<FISCAL-YEAR-END> APR-30-1998

<PERIOD-END> APR-30-1998

<INVESTMENTS-AT-COST> 3,057,478

<INVESTMENTS-AT-VALUE> 3,078,261

<RECEIVABLES> 55,974

<ASSETS-OTHER> 0

<OTHER-ITEMS-ASSETS> 0

<TOTAL-ASSETS> 3,134,235

<PAYABLE-FOR-SECURITIES> 20,230

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 21,601

<TOTAL-LIABILITIES> 41,831

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 3,107,325

<SHARES-COMMON-STOCK> 304,306

<SHARES-COMMON-PRIOR> 309,613

<ACCUMULATED-NII-CURRENT> 0

<OVERDISTRIBUTION-NII> 7,383

<ACCUMULATED-NET-GAINS> (28,321)

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 20,783

<NET-ASSETS> 3,092,404

<DIVIDEND-INCOME> 0

<INTEREST-INCOME> 220,338

<OTHER-INCOME> 0

<EXPENSES-NET> 20,254

<NET-INVESTMENT-INCOME> 200,084

<REALIZED-GAINS-CURRENT> 6,093

<APPREC-INCREASE-CURRENT> 57,252

<NET-CHANGE-FROM-OPS> 263,429

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 200,163

<DISTRIBUTIONS-OF-GAINS> 0

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 208,417

<NUMBER-OF-SHARES-REDEEMED> 232,678

<SHARES-REINVESTED> 18,954

<NET-CHANGE-IN-ASSETS> 9,019

<ACCUMULATED-NII-PRIOR> 0

<ACCUMULATED-GAINS-PRIOR> (33,044)

<OVERDISTRIB-NII-PRIOR> 8,674

<OVERDIST-NET-GAINS-PRIOR> 0

<GROSS-ADVISORY-FEES> 13,730

<INTEREST-EXPENSE> 0

<GROSS-EXPENSE> 20,814

<AVERAGE-NET-ASSETS> 3,139,102

<PER-SHARE-NAV-BEGIN> 9.960

<PER-SHARE-NII> .646

<PER-SHARE-GAIN-APPREC> .200

<PER-SHARE-DIVIDEND> .646

<PER-SHARE-DISTRIBUTIONS> 0

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 10.160

<EXPENSE-RATIO> 66

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0

<ARTICLE> 6
<CIK> 0000205323
<NAME> Fidelity Commonwealth Trust
<SERIES>
<NUMBER> 21
<NAME> Spartan Market Index Fund
<MULTIPLIER> 1,000

<S>
<C>
<PERIOD-TYPE> YEAR

<FISCAL-YEAR-END> APR-30-1998

<PERIOD-END> APR-30-1998

<INVESTMENTS-AT-COST> 3,944,328

<INVESTMENTS-AT-VALUE> 5,427,590

<RECEIVABLES> 28,272

<ASSETS-OTHER> 167

<OTHER-ITEMS-ASSETS> 0

<TOTAL-ASSETS> 5,456,029

<PAYABLE-FOR-SECURITIES> 5,617

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 13,678

<TOTAL-LIABILITIES> 19,295

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 3,797,230

<SHARES-COMMON-STOCK> 69,043

<SHARES-COMMON-PRIOR> 39,782

<ACCUMULATED-NII-CURRENT> 26,003

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> 126,232

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 1,487,269

<NET-ASSETS> 5,436,734

<DIVIDEND-INCOME> 56,725

<INTEREST-INCOME> 10,559

<OTHER-INCOME> 0

<EXPENSES-NET> 7,088

<NET-INVESTMENT-INCOME> 60,196

<REALIZED-GAINS-CURRENT> 156,237

<APPREC-INCREASE-CURRENT> 1,021,025

<NET-CHANGE-FROM-OPS> 1,237,458

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 37,882

<DISTRIBUTIONS-OF-GAINS> 64,969

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 41,491

<NUMBER-OF-SHARES-REDEEMED> 13,784

<SHARES-REINVESTED> 1,554

<NET-CHANGE-IN-ASSETS> 3,136,614

<ACCUMULATED-NII-PRIOR> 2,350

<ACCUMULATED-GAINS-PRIOR> 38,063

<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0

<GROSS-ADVISORY-FEES> 12,908

<INTEREST-EXPENSE> 0

<GROSS-EXPENSE> 16,689

<AVERAGE-NET-ASSETS> 3,734,131

<PER-SHARE-NAV-BEGIN> 57.820

<PER-SHARE-NII> 1.110

<PER-SHARE-GAIN-APPREC> 21.920

<PER-SHARE-DIVIDEND> .750

<PER-SHARE-DISTRIBUTIONS> 1.380

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 78.740

<EXPENSE-RATIO> 19

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0

<ARTICLE> 6
<CIK> 0000205323
<NAME> Fidelity Commonwealth Trust
<SERIES>
<NUMBER> 31
<NAME> Fidelity Small Cap Selector
<MULTIPLIER> 1,000

<S>
<C>
<PERIOD-TYPE> YEAR

<FISCAL-YEAR-END> APR-30-1998

<PERIOD-END> APR-30-1998

<INVESTMENTS-AT-COST> 694,150

<INVESTMENTS-AT-VALUE> 915,099

<RECEIVABLES> 5,771

<ASSETS-OTHER> 0

<OTHER-ITEMS-ASSETS> 0

<TOTAL-ASSETS> 920,870

<PAYABLE-FOR-SECURITIES> 501

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 1,797

<TOTAL-LIABILITIES> 2,298

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 654,831

<SHARES-COMMON-STOCK> 50,723

<SHARES-COMMON-PRIOR> 34,515

<ACCUMULATED-NII-CURRENT> 2,114

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> 39,794

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 221,833

<NET-ASSETS> 918,572

<DIVIDEND-INCOME> 7,639

<INTEREST-INCOME> 3,963

<OTHER-INCOME> 0

<EXPENSES-NET> 7,052

<NET-INVESTMENT-INCOME> 4,550

<REALIZED-GAINS-CURRENT> 86,477

<APPREC-INCREASE-CURRENT> 167,148

<NET-CHANGE-FROM-OPS> 258,175

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 5,801

<DISTRIBUTIONS-OF-GAINS> 53,691

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 37,017

<NUMBER-OF-SHARES-REDEEMED> 24,590

<SHARES-REINVESTED> 3,782

<NET-CHANGE-IN-ASSETS> 467,906

<ACCUMULATED-NII-PRIOR> 2,280

<ACCUMULATED-GAINS-PRIOR> 11,000

<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0

<GROSS-ADVISORY-FEES> 4,885

<INTEREST-EXPENSE> 0

<GROSS-EXPENSE> 7,379

<AVERAGE-NET-ASSETS> 727,334

<PER-SHARE-NAV-BEGIN> 13.060

<PER-SHARE-NII> .100

<PER-SHARE-GAIN-APPREC> 6.200

<PER-SHARE-DIVIDEND> .130

<PER-SHARE-DISTRIBUTIONS> 1.140

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 18.110

<EXPENSE-RATIO> 101

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0

<ARTICLE> 6
<CIK> 0000205323
<NAME> Fidelity Commonwealth Trust
<SERIES>
<NUMBER> 41
<NAME> Fidelity Large Cap Stock Fund
<MULTIPLIER> 1,000

<S>
<C>
<PERIOD-TYPE> YEAR

<FISCAL-YEAR-END> APR-30-1998

<PERIOD-END> APR-30-1998

<INVESTMENTS-AT-COST> 125,163

<INVESTMENTS-AT-VALUE> 148,966

<RECEIVABLES> 8,369

<ASSETS-OTHER> 0

<OTHER-ITEMS-ASSETS> 0

<TOTAL-ASSETS> 157,335

<PAYABLE-FOR-SECURITIES> 2,081

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 1,018

<TOTAL-LIABILITIES> 3,099

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 106,805

<SHARES-COMMON-STOCK> 9,374

<SHARES-COMMON-PRIOR> 9,166

<ACCUMULATED-NII-CURRENT> 225

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> 23,403

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 23,803

<NET-ASSETS> 154,236

<DIVIDEND-INCOME> 1,341

<INTEREST-INCOME> 302

<OTHER-INCOME> 0

<EXPENSES-NET> 1,119

<NET-INVESTMENT-INCOME> 524

<REALIZED-GAINS-CURRENT> 28,857

<APPREC-INCREASE-CURRENT> 14,222

<NET-CHANGE-FROM-OPS> 43,603

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 531

<DISTRIBUTIONS-OF-GAINS> 9,466

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 9,703

<NUMBER-OF-SHARES-REDEEMED> 10,198

<SHARES-REINVESTED> 704

<NET-CHANGE-IN-ASSETS> 36,824

<ACCUMULATED-NII-PRIOR> 401

<ACCUMULATED-GAINS-PRIOR> 7,125

<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0

<GROSS-ADVISORY-FEES> 607

<INTEREST-EXPENSE> 0

<GROSS-EXPENSE> 1,145

<AVERAGE-NET-ASSETS> 133,857

<PER-SHARE-NAV-BEGIN> 12.810

<PER-SHARE-NII> .060

<PER-SHARE-GAIN-APPREC> 4.710

<PER-SHARE-DIVIDEND> .060

<PER-SHARE-DISTRIBUTIONS> 1.070

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 16.450

<EXPENSE-RATIO> 86

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0

<ARTICLE> 6
<CIK> 0000205323
<NAME> Fidelity Commonwealth Trust
<SERIES>
<NUMBER> 51
<NAME> Fidelity Small Cap Stock Fund
<MULTIPLIER> 1,000

<S>
<C>
<PERIOD-TYPE> YEAR

<FISCAL-YEAR-END> APR-30-1998

<PERIOD-END> APR-30-1998

<INVESTMENTS-AT-COST> 754,228

<INVESTMENTS-AT-VALUE> 758,237

<RECEIVABLES> 18,269

<ASSETS-OTHER> 1,751

<OTHER-ITEMS-ASSETS> 0

<TOTAL-ASSETS> 778,257

<PAYABLE-FOR-SECURITIES> 39,222

<SENIOR-LONG-TERM-DEBT> 0

<OTHER-ITEMS-LIABILITIES> 1,038

<TOTAL-LIABILITIES> 40,260

<SENIOR-EQUITY> 0

<PAID-IN-CAPITAL-COMMON> 735,265

<SHARES-COMMON-STOCK> 69,970

<SHARES-COMMON-PRIOR> 0

<ACCUMULATED-NII-CURRENT> 344

<OVERDISTRIBUTION-NII> 0

<ACCUMULATED-NET-GAINS> (2,402)

<OVERDISTRIBUTION-GAINS> 0

<ACCUM-APPREC-OR-DEPREC> 4,790

<NET-ASSETS> 737,997

<DIVIDEND-INCOME> 239

<INTEREST-INCOME> 869

<OTHER-INCOME> 0

<EXPENSES-NET> 763

<NET-INVESTMENT-INCOME> 345

<REALIZED-GAINS-CURRENT> (2,403)

<APPREC-INCREASE-CURRENT> 4,790

<NET-CHANGE-FROM-OPS> 2,732

<EQUALIZATION> 0

<DISTRIBUTIONS-OF-INCOME> 0

<DISTRIBUTIONS-OF-GAINS> 0

<DISTRIBUTIONS-OTHER> 0

<NUMBER-OF-SHARES-SOLD> 70,123

<NUMBER-OF-SHARES-REDEEMED> 153

<SHARES-REINVESTED> 0

<NET-CHANGE-IN-ASSETS> 737,997

<ACCUMULATED-NII-PRIOR> 0

<ACCUMULATED-GAINS-PRIOR> 0

<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0

<GROSS-ADVISORY-FEES> 380

<INTEREST-EXPENSE> 0

<GROSS-EXPENSE> 973

<AVERAGE-NET-ASSETS> 383,159

<PER-SHARE-NAV-BEGIN> 10.000

<PER-SHARE-NII> .010

<PER-SHARE-GAIN-APPREC> .540

<PER-SHARE-DIVIDEND> 0

<PER-SHARE-DISTRIBUTIONS> 0

<RETURNS-OF-CAPITAL> 0

<PER-SHARE-NAV-END> 10.550

<EXPENSE-RATIO> 150

<AVG-DEBT-OUTSTANDING> 0

<AVG-DEBT-PER-SHARE> 0