SUPPLEMENT TO THE SPARTAN(registered trademark) BOND STRATEGIST(trademark)
PROSPECTUS
DATED FEBRUARY 20, 1996
PROPOSED REORGANIZATION. The Board of Trustees of Spartan Bond Strategist
has unanimously approved an Agreement and Plan of Reorganization
("Agreement") between Spartan Bond Strategist and Spartan Municipal Income
Fund, a fund of Fidelity Union Street Trust.
The Agreement provides for transfer of substantially all of the assets and
the assumption of all of the liabilities of Spartan Bond Strategist solely
in exchange for the number of shares of Spartan Municipal Income Fund equal
in value to the relative net asset value of the outstanding shares of
Spartan Bond Strategist. Following such exchange, Spartan Bond Strategist
will distribute the Spartan Municipal Income Fund shares to its
shareholders pro rata, in liquidation of Spartan Bond Strategist as
provided in the Agreement (the transactions contemplated by the Agreement
referred to as the "Reorganization").
The Reorganization can be consummated only if, among other things, it is
approved by a majority vote of shareholders. A Special Meeting (the
"Meeting") of the Shareholders of Spartan Bond Strategist will be held on
December 18, 1996, and approval of the Agreement will be voted on at that
time. In connection with the Meeting, Spartan Bond Strategist will be
filing with the Securities and Exchange Commission and delivering to its
shareholders of record a Proxy Statement describing the Reorganization and
a Prospectus for Spartan Municipal Income Fund.
If the Agreement is approved at the Meeting and certain conditions required
by the Agreement are satisfied, the Reorganization is expected to become
effective on or about December 30, 1996. If shareholder approval of the
Agreement is delayed due to failure to meet a quorum or otherwise, the
Reorganization will become effective, if approved, as soon as practicable
thereafter.
In the event Spartan Bond Strategist shareholders fail to approve the
Agreement, Spartan Bond Strategist will continue to engage in business as a
registered investment company and the Board of Trustees will consider other
proposals for the reorganization or liquidation of Spartan Bond Strategist.
Effective on or about September 16, 1996, the fund will be closed to all
new and subsequent purchases except for reinvestment of dividends or other
distributions pending the Reorganization.
The following information replaces in its entirety the fourth paragraph of
the "Investment Principles and Risks" section beginning on page 9.
The fund's level of risk and potential reward depend on the quality and
maturity of its investments. The fund invests in investment-grade
securities under normal conditions. Although the fund can invest in
securities of any maturity, FMR seeks to manage the fund so that it
generally reacts to changes in interest rates similarly to bonds with
maturities between 8 and 18 years. As of December 31, 1995, the fund's
dollar-weighted average maturity was approximately 11.4 years.
The following information replaces the similar information found under
"Debt Securities" in the "Securities and Investment Practices" section
beginning on page 10.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable 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 purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
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 Investors Service, L.P., or is unrated but judged by FMR to
be of equivalent quality.
