SUPPLEMENT TO THE SPARTAN(registered trademark) MARKET INDEX FUND JUNE
20, 1997 PROSPECTUS
The following information replaces similar information found in the
"Breakdown of Expenses" section on page 13.
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. The Board of
Trustees has authorized such payments.
Pursuant to approval of shareholders of Spartan Market Index Fund at a
shareholder meeting held on November 19, 1997, effective December 1,
1997 Bankers Trust Company (BT) has been appointed as the fund's
sub-adviser.
The following information replaces similar information found in the
"The Fund at a Glance" section on page 3.
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 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.
The following information replaces similar information found in the
"Who May Want to Invest" section on page 3.
Because the fund seeks to track, rather than beat, the performance of
the S&P 500, the fund is not managed in the same manner 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 following information replaces similar information found in the
"Expenses" section on page 4.
ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The
fund pays management fees to FMR and BT. 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 the fund's share price or dividends and are not charged
directly to shareholder accounts (see "Breakdown of Expenses" page
12).
The following figures are projections based on historical expenses,
adjusted to reflect current fees, and are calculated as a percentage
of average net assets of the fund.
Management fee (after reimbursement) 0.19%
12b-1 fee None
Other expenses (after reimbursement) 0.00%
Total fund operating expenses 0.19%
(after reimbursement)
FMR has voluntarily agreed to reimburse the fund to the extent that
total operating expenses exceed 0.19% of its average net assets. This
agreement will continue through December 31, 1999. If this agreement
were not in effect, the management fee, other expenses, and total
operating expenses, as a percentage of average net assets, would have
been 0.24%, 0.23%, and 0.47%, 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 following information replaces similar information found in the
"Charter" section on page 8.
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 following information replaces similar information found under the
heading "FMR and Its Affiliates" in the "Charter" section on page 8.
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.
The following information supplements information found in the
"Charter" section on page 8.
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 New York Corporation.
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 objective 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.
The following information replaces similar information found in the
final paragraph under the heading "FMR and Its Affiliates" in the
"Charter" section on page 8.
BT may use FMR and BT 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.
Each use of the term "FMR" under the heading "Investment Principals
and Risks" beginning on page 8 is replaced with the term "BT," except
for the two uses in the following sentences which are unchanged.
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.
FMR monitors correlation between the performance of the fund and that
of the S&P 500 on a monthly basis.
The following information replaces similar information found in the
"Securities and Investment Practices" section beginning on page 10.
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.
The following information replaces similar information found in the
"Securities and Investment Practices" section beginning on page 10.
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, the fund may not
purchase more than 10% of the outstanding voting securities of a
single issuer. This limitation does not apply to securities of other
investment companies.
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 effort to track the return 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.
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. The fund may also invest in similar money market funds
managed by BT or other investment managers. 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.
RESTRICTIONS: With respect to 75% of its total assets, the fund may
not purchase a security if, as a result, more than 5% would be
invested in the securities of any issuer. This limitation does not
apply to U.S. Government securities or to securities of other
investment companies.
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 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.
The following information replaces similar information found in the
"Fundamental Investment Policies and Restrictions" section on page 12.
With respect to 75% of its total assets, the fund may not purchase a
security if, as a result, more than 5% would be invested in the
securities of any issuer and may not purchase 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 following information replaces similar information found in the
"Breakdown of Expenses" section beginning on page 12.
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 on page 13.
FMR may, from time to time, agree to reimburse the fund for management
fees 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 fee 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 estimated sub-advisory fees of less
than 0.01% payable to BT (representing 40% of net income from
securities lending).
FMR has voluntarily agreed to limit the fund's total operating
expenses (excluding sub-advisory fees associated with securities
lending, interest, taxes, brokerage commissions or extraordinary
expenses) to an annual rate of 0.19% of average net assets. This
agreement will continue until December 31, 1999.
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 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, 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's portfolio turnover rate for the fiscal year ended April
1997 was 6%. This rate varies from year to year.
The following information replaces similar information found in the
"Dividends, Capital Gains, and Taxes" section beginning on page 22.
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.
SUPPLEMENT TO THE SPARTAN(registered trademark) MARKET INDEX FUND
JUNE 20, 1997
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 2.
(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.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
THE "DISTRIBUTION AND SERVICE PLAN" SECTION ON PAGE 19.
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 Spartan Market Index .
Pursuant to approval of shareholders of Spartan Market Index Fund at a
shareholder meeting held on November 19, 1997, effective December 1,
1997 Bankers Trust Company (BT) has been appointed as the fund's
sub-adviser.
THE FOLLOWING NEW HEADINGS SUPPLEMENT INFORMATION FOUND IN THE "TABLE
OF CONTENTS" ON THE COVER PAGE.
BT 15
Contracts with BT Affiliates 20
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION FOUND ON THE COVER
PAGE.
INVESTMENT SUB-ADVISER
Bankers Trust Company (BT)
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
"INVESTMENT POLICIES AND LIMITATIONS" BEGINNING ON PAGE 2.
(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;
For the fund's limitation on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page 5. 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 INFORMATION HAS BEEN ELIMINATED FROM THE "INVESTMENT
POLICIES AND LIMITATIONS" SECTION ON PAGES 3 AND 7.
Closed-end Investment Companies. The fund may purchase the shares of
closed-end investment companies to facilitate investment in certain
countries. Shares of closed-end companies may trade at a premium or a
discount to their net asset value.
INVESTMENT DETAILS. The fund is not managed according to traditional
methods of "active" investment management, which involve the buying
and selling of securities based upon economic, financial, and market
analyses and investment judgment. Instead, the fund, utilizing a
"passive" or "indexing" investment approach, attempts to duplicate the
performance of the S&P 500. The fund may omit or remove an S&P 500
stock from its portfolio if, following objective criteria, FMR judges
the stock to be insufficiently liquid or believes the merit of the
investment has been substantially impaired by extraordinary events or
financial conditions. FMR may purchase stocks that are not included in
the S&P 500 to compensate for these differences if it believes that
their prices will move together with the prices of S&P 500 stocks
omitted from the portfolio.
The ability of the fund to meet its objective depends in part on its
cash flow because investments and redemptions by shareholders
generally will require the fund to purchase or sell portfolio
securities. A low level of shareholder transactions will keep cash
flow manageable and enhance the fund's ability to track the S&P 500.
FMR will make investment changes to accommodate cash flow in an
attempt to maintain the similarity of the fund's portfolio to the
composition of the S&P 500. In addition, the fund will maintain a
reasonable position in high-quality, short-term debt securities and
money market instruments to meet redemption requests.
EACH USE OF THE TERM "FMR" UNDER THE HEADINGS "EXPOSURE TO FOREIGN
MARKETS," "FOREIGN CURRENCY TRANSACTIONS," "FUND'S RIGHTS AS A
SHAREHOLDER," AND "LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS" IN
THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2
IS REPLACED WITH THE TERM "BT."
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 6.
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 the fund's investments and,
through reports from FMR and/or BT, the Board monitors investments in
illiquid instruments. In determining the liquidity of the 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 investments).
Investments currently considered by the fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal
and interest within seven days, OTC options, and non-government
stripped fixed-rate mortgage-backed securities. Also, BT 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 OTC options the fund writes, all or a portion
of the value of the underlying instrument may be illiquid depending on
the assets held to cover the option and the nature and terms of any
agreement the fund may have to close out the option before expiration.
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 7.
Other Investment Companies. The fund may purchase the shares of other
investment companies.
EACH USE OF THE TERM "FMR" UNDER THE HEADINGS "REPURCHASE AGREEMENTS"
AND "REVERSE REPURCHASE AGREEMENTS" IN THE "INVESTMENT POLICIES AND
LIMITATIONS" SECTION BEGINNING ON PAGE 7 IS REPLACED WITH THE PHRASE
"BT OR, UNDER CERTAIN CIRCUMSTANCES, BY FMR OR AN FMR AFFILIATE."
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 8.
Securities Lending. The fund may lend securities to parties such as
broker-dealer or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) 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 the fund to retain ownership of the
securities loaned and, at the same time, to earn additional income.
Since there may be delays in 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 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 any
security in which the fund is authorized to invest. Investing this
cash subjects that investment, as well as the security loaned, to
market forces (i.e., capital appreciation or depreciation). If the
fund cannot recover the loaned securities on termination, the fund may
sell the collateral and purchase a replacement investment in the
market.
THE USE OF THE TERM "FMR" UNDER THE HEADING "SWAP AGREEMENTS" IN THE
SECTION "INVESTMENT POLICIES AND LIMITATIONS" ON PAGE 8 IS REPLACED
WITH THE TERM "BT."
THE FOLLOWING INFORMATION REPLACES THE "PORTFOLIO TRANSACTIONS"
SECTION IN ITS ENTIRETY BEGINNING ON PAGE 8.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are place
on behalf of the fund by BT pursuant to authority contained in the
management contract and the 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.
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; 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; effect
securities transactions, and perform functions incidental thereto
(such as clearance and settlement). The selection of such
broker-dealers generally is made by BT (to the extent possible
consistent with execution considerations) in accordance with the
ranking of broker-dealers determined periodically by BT's investment
staff based primarily upon the quality of execution services provided.
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
transactions ordered 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.
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 broker and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or BT's overall responsibilities of 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 extend permitted by law. BT may use
research services provided by and place agency transactions with
National Financial Services Corporation (NFSC) and Fidelity Brokerage
Services (FBS), indirect subsidiaries of FMR Corp., and BT Brokerage
Corporation, BT Alex Brown Incorporated or BT Futures Corporation,
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.
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 have authorized NFSC to execute portfolio transactions on
national securities exchanges in accordance with approved procedures
and applicable SEC rules.
The Trustees 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, 1997 and 1996, the fund's
portfolio turnover rates were 6% and 5% respectively.
For the fiscal years ended April 1997, 1996, and 1995, the fund paid
brokerage commissions of $51,000, $432,000, and $31,000, respectively.
The fund pays both commissions and spreads in connection with the
placement of portfolio transactions. NFSC is paid on a commission
basis. During the fiscal years ended April 1997, 1996 and 1995, the
fund paid brokerage commissions of $1,000, $1,000 and $0,
respectively, to NFSC. During the fiscal year ended April 1997, this
amounted to approximately 0.96% of the aggregate broker commissions
paid by the fund for transactions involving approximately 0.36% 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 dollar amount
of transactions effected through NFSC is a result of the low
commission rates charged by NFSC.
During the fiscal year ended April 1997, the fund paid $43,000 in
commissions to brokerage firms that provided research services
involving approximately $112,911,000 of transactions. The provision of
research services was not necessarily a factor in the placement of all
this business with such firms.
From time to time the Trustees will review whether the recapture for
the benefit of the fund of some portion of the brokerage commissions
or similar fees paid by the fund on portfolio transactions is legally
permissible and advisable. The fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the
same as those of other funds managed by FMR, investment decisions for
the fund are made 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 BT-managed 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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"DISTRIBUTIONS AND TAXES" SECTION ON PAGE 14.
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.
THE FOLLOWING NEW SECTION SUPPLEMENTS INFORMATION FOUND ON PAGE 15.
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 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, 1996 Bankers Trust New York Corporation
was the seventh largest bank holding company in the United States with
total assets of approximately $120 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 approximately $227 billion in
assets under management globally. Of that total, approximately $82
billion are in U.S. equity index assets. When bond and international
funds are included, BT manages over $94 billion in total 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 the fund described herein without violation of the
Glass-Steagall Act or other applicable banking laws of relations.
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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 15.
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 FMR Texas Inc., 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.
E. BRADLEY JONES (69), 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.
*PETER S. LYNCH (54), Trustee, is Vice Chairman and Director of FMR
(1992). 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 Corporation 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.
GERALD C. McDONOUGH (68), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of New York International Corp.
(air conditioning and refrigeration), Commercial Iterteck 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 (64), 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
Informart (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.
THOMAS R. WILLIAMS (68), 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).
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 16.
*ROBERT C. POZEN (5l), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of FMR Texas Inc. (1997), 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.
THE FOLLOWING INFORMATION HAS BEEN ELIMINATED FROM THE "TRUSTEES AND
OFFICERS" SECTION ON PAGE 16.
JENNIFER FARRELLY (33), is Vice President and manager of Spartan
Market Index, which she has managed since January 1994. She also
manages other Fidelity funds. Ms. Farrelly joined Fidelity as a
portfolio manager in 1985.
THE FOLLOWING INFORMATION REPLACES THE BIOGRAPHICAL INFORMATION FOR
KENNETH A. RATHGEBER IN THE "TRUSTEES AND OFFICERS" SECTION ON PAGE
17.
RICHARD A. SILVER (50), 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).
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"COMPENSATION TABLE" IN THE "TRUSTEES AND OFFICERS" SECTION ON PAGE
17.
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, 1997, or calendar
year ended December 31, 1996, as applicable.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 17.
** Interested Trustees of the fund and Mr. Burkhead are compensated by
FMR.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 17.
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 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 December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In
connection with the termination of the retirement program, each
then-existing non-interested Trustee received a credit to his or her
Plan account equal to the present value of the estimated benefits that
would have been payable under the retirement program. The amounts
credited to the non-interested Trustees' Plan accounts are subject to
vesting and are treated as though equivalent dollar amounts had been
invested in shares of the Reference Funds. The amounts ultimately
received by the Trustees in connection with the credits to their Plan
accounts will be directly linked to the investment performance of the
Reference Funds. The termination of the retirement program and related
crediting to the Trustees' Plan accounts did not result in a material
cost to the funds.
THE FOLLOWING INFORMATION REPLACES THE "MANAGEMENT CONTRACT" SECTION
IN ITS ENTIRETY ON PAGE 18.
MANAGEMENT CONTRACT
FMR is the fund's manager pursuant to a management contact 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, provides 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
records, 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 investment 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 fees
payable to FMR, the sub-advisory fees payable to BT and the fees
payable to FSC, the fund pays all its expenses, without limitations,
that are not assumed by those parties.
The fund pays for the typesetting, printing, and mailing of proxy
materials to shareholders, legal expenses, and the fees of the
auditor, and non-interested Trustees. Although the fund's current
management contract provides that the fund will pay for typesetting,
printing, and mailing prospectuses, statement of additional
information notices, and reports to shareholders, the trust, on behalf
of the fund, has entered into a revised transfer agent agreement with
FSC pursuant to which FSC bears the cost of providing these services
to existing shareholders. Other expenses paid by the fund include
interest, taxes, brokerage commissions, and the fund's proportionate
share of insurance premiums and Investment Company Institute dues. The
fund is also liable for such non-recurring expenses as may arise,
including costs of any litigation of 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 average net assets throughout the
month. These fees include management fees of 0.24% payable to FMR, and
estimated 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 its
aggregate operating 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 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.
For the fiscal years ended April 30, 1997, 1996, and 1995, the fund
paid FMR management fees of $6,713,000, $2,872,000, and $1,408,000,
respectively, after reduction of fees and expenses paid by the fund to
the non-interested Trustees.
FMR may, from time to time, voluntarily reimburse all or a portion of
the fund's operating expenses (exclusive of sub-advisory fees
associated with securities lending, interest, taxes, brokerage
commissions, and extraordinary expenses). 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.
For the fiscal year ended April 30, 1997, management fees incurred
under the fund's contract prior to reimbursement amounted to
$6,713,000, and management fees reimbursed by FMR amounted to $169,000
(after reduction for compensation to the non-interested Trustees).
To defray shareholder service costs, FMR or its affiliates also
collect the fund's $10.00 index account fee for balances under
$10,000. For the fiscal years ended April 30, 1997, 1996, and 1995,
FMR collected $89,000, $165,000, and $123,000, respectively, in index
account fees.
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, in the sub-advisory agreements,
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.
THE FOLLOWING INFORMATION REPLACES THE "CONTRACTS WITH FMR AFFILIATES"
SECTION BEGINNING ON PAGE 19 IN ITS ENTIRETY.
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 annual account
fee and an asset-based fee each based on account size and fund type
for each retail account and certain institutional accounts. With
respect to certain institutional retirement accounts, FSC receives an
annual account fee and an asset-based fee based on account type or
fund type. These annual account fees are subject to increase based on
postal 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 Spartan Market Index'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 each Fidelity Freedom Fund,
a fund of funds managed by an FMR affiliate, according to the
percentage of the 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 agreement with FSC. Under the
terms of the agreement, 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 these 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.
The fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. The
distribution agreement calls for FDC to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the fund, which are continuously offered at net asset value.
Promotional and administrative expenses in connection with the offer
and sale of shares are paid by FMR.
Effective December 1, 1997, FSC no longer administers the fund's
securities lending program.
THE FOLLOWING NEW SECTION SUPPLEMENTS INFORMATION FOUND ON PAGE 20.
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. 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.
BT's fees for custodial services to the fund are included in the fees
payable under the sub-advisory agreement.
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION FOUND UNDER THE
HEADING "CUSTODIAN" IN THE "DESCRIPTION OF THE TRUST" SECTION
BEGINNING ON PAGE 20.
Effective December 1, 1997, BT replaced Brown Brothers Harriman & Co.
as custodian of the assets of the fund.
SUPPLEMENT TO THE FIDELITY SMALL CAP
SELECTOR (FORMERLY
FIDELITY SMALL CAP STOCK FUND), FIDELITY MID-CAP STOCK FUND AND
FIDELITY LARGE CAP STOCK FUND JUNE 20, 1997 PROSPECTUS
The following information replaces the similar information found in
"Other Expenses" on page 21:
Mid-Cap Stock and Large Cap Stock have each 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.
Effective January 2, 1998, Fidelity Small Cap Stock Fund changed its
name to Fidelity Small Cap Selector.
Effective January 2, 1998, the following information replaces the
similar information found in "Investment Principles and Risks" on page
15:
SMALL CAP SELECTOR 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 the
balance 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 October 31, 1997, the Russell 2000 included companies with
capitalizations between $22.9 million and $2.5 billion.
The following information supplements the "Management Fee" section
beginning on page 20:
The total management fee rate for the fiscal year ended April 30, 1997
was 0.55% for Small Cap Stock, 0.70% for Mid-Cap Stock and 0.53% for
Large Cap Stock.
The Board of Trustees of Fidelity Small Cap Stock Fund has authorized
an increase in the redemption fee (payable to the fund) from 0.75% to
1.50% of the amount redeemed on shares of Small Cap Stock Fund
redeemed on or after November 15, 1997 and held less than 90 days.
The following information replaces the similar information found in
the "Expenses" section on page 5:
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.
Lower sales charges may be available for accounts over $250,000. See
"Transaction Details," page 31 for an explanation of how and when
these charges apply.
Maximum sales charge on purchases
(as a % of offering price)
for Small Cap Stock 3.00%
for Mid-Cap Stock None
for Large Cap Stock None
Maximum sales charge on reinvested
distributions None
Deferred sales charge on redemptions None
Exchange fee None
Redemption fee (as a % of amount redeemed
on shares redeemed before November 15,
1997 and held less than 90 days)
for Small Cap Stock only 0.75%
Redemption fee (as a % of amount redeemed
on shares redeemed on or after November 15,
1997 and held less than 90 days)
for Small Cap Stock only 1.50%
Annual account maintenance fee
(for accounts under $2,500) $12.00
The following information replaces the similar information found in
the chart on page 27:
If you sell shares of Small Cap Stock before November 15, 1997 after
holding them less than 90 days, the fund will deduct a redemption fee
equal to 0.75% of the value of those shares.
If you sell shares of Small Cap Stock on or after November 15, 1997
after holding them less than 90 days, the fund will deduct a
redemption fee equal to 1.50% of the value of those shares.
The following information supplements the information found in
"Shareholder and Account Policies" on page 33:
A REDEMPTION FEE if applicable, of 0.75% for shares redeemed before
November 15, 1997 and held less than 90 days or 1.50% for shares
redeemed on or after November 15, 1997 and held less than 90 days for
Small Cap Stock, will be deducted from the amount of your redemption.
This fee is paid to the fund rather than FMR, and it does not apply to
shares that were acquired through reinvestment of distributions. If
you bought shares on different days the shares you held longest will
be redeemed first for purposes of determining whether the fee applies.
SUPPLEMENT TO THE FIDELITY SMALL CAP SELECTOR (FORMERLY FIDELITY SMALL
CAP STOCK FUND),
FIDELITY MID-CAP STOCK FUND AND
FIDELITY LARGE CAP STOCK FUND
JUNE 20, 1997
STATEMENT OF ADDITIONAL INFORMATION
Effective January 2, 1998, Fidelity Small Cap Stock Fund changed its
name to Fidelity Small Cap Selector.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
"INVESTMENT POLICIES AND LIMITATIONS"ON PAGE 2 FOR SMALL CAP SELECTOR:
(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.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
"INVESTMENT POLICIES AND LIMITATIONS"ON PAGE 3 FOR MID-CAP STOCK FUND:
(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.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
"INVESTMENT POLICIES AND LIMITATIONS" ON PAGE 4 FOR LARGE CAP STOCK
FUND:
(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.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
"DISTRIBUTION AND SERVICE PLANS" ON PAGE 30:
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 Mid-Cap
Stock's and Large Cap Stock's fund 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
Mid-Cap Stock's and Large Cap Stock's fund shares, or provide
shareholder support services. Currently the Board of Trustees has
authorized such payments for Mid-Cap Stock's and Large-Cap Stock's
shares.
