SUPPLEMENT TO THE
FIDELITY STRATEGIC INCOME FUND
A FUND OF FIDELITY SCHOOL STREET TRUST
FEBRUARY 28, 2000
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 24.
J. MICHAEL COOK (57), Member of the Advisory Board (2000). Prior to
Mr. Cook's retirement in May 1999, he served as Chairman and Chief
Executive Officer of Deloitte & Touche LLP, Chairman of the Deloitte &
Touche Foundation, and a member of the Board of Deloitte Touche
Tohmatsu. He currently serves as an Executive in Residence of the
Columbia Business School and as a Director of Dow Chemical Company
(2000), HCA - The Healthcare Company (1999), and Children First
(1999). He is a member of the Executive Committee of the Securities
Regulation Institute, a member of the Advisory Board of Boardroom
Consultants, past chairman and a member of the Board of Catalyst (a
leading organization for the advancement of women in business), and a
Director of the STAR Foundation (Society to Advance the Retarded and
Handicapped). He also serves as a member of the Board and Executive
Committee and as Co-Chairman of the Audit and Finance Committee of the
Center for Strategic & International Studies, a member of the Board of
Overseers of the Columbia Business School, and a Member of the
Advisory Board of the Graduate School of Business of the University of
Florida.
MARIE L. KNOWLES (53), Member of the Advisory Board (2000). Beginning
in 1972, Ms. Knowles served in various positions with Atlantic
Richfield Company (ARCO) (diversified energy) including Executive Vice
President and Chief Financial Officer (1996-2000); Director
(1996-1998); and Senior Vice President (1993-1996). In addition, Ms.
Knowles served as President of ARCO Transportation Company
(1993-1996). She currently serves as a Director of Phelps Dodge
Corporation (copper mining and manufacturing), URS Corporation
(multidisciplinary engineering, 1999), and America West Holdings
Corporation (aviation and travel services, 1999). Ms. Knowles also
serves as a member of the National Board of the Smithsonian
Institution and she is a trustee of the Brookings Institution.
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 24.
BART A. GRENIER (40), is Vice President of certain High Income Bond
Funds (1997 through February 29, 2000). Mr. Grenier rejoined Fidelity
in August 1997 from DDJ Capital Management, LLC, where he had served
as Managing Director since April 1997. Mr. Grenier originally joined
Fidelity in 1991 as a senior analyst. Mr. Grenier served as a Director
of High-Income Group Research and as Director of U.S. Equity Research
from 1994 to March 1996. He later became Group Leader of the
Income-Growth and Asset Allocation-Income Groups in 1996 and Assistant
Equity Division Head in 1997.
MATTHEW N. KARSTETTER (38), Deputy Treasurer (1998), is Deputy
Treasurer of the Fidelity funds and is an employee of FMR (1998).
Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 24.
ROBERT A. LAWRENCE (47), is Vice President of Fidelity Strategic
Income Fund (2000). Mr. Lawrence serves as Vice President of certain
High Income Bond Funds (2000), Vice President of Fidelity Real Estate
High Income Fund (1995) and Fidelity Real Estate High Income Fund II
(1996), Vice President of certain Equity Funds (1997), and Senior Vice
President of FMR (1993).
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACT" SECTION ON PAGE 28.
On behalf of Strategic Income, FMR has entered into sub-advisory
agreements with FMR U.K., FMR Far East, and FIIA. FIIA, in turn, has
entered into a sub-advisory agreement with FIIA(U.K.)L and FIJ.
Pursuant to the sub-advisory agreements, FMR may receive from the
sub-advisers investment research and advice on issuers outside the
United States and on behalf of the fund, FMR may 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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACT" SECTION BEGINNING ON PAGE 28.
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) 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.
(small solid bullet) FMR pays FIIA a fee equal to 30% of FMR's monthly
management fee with respect to the average net assets held by the fund
for which the sub-adviser has provided FMR with investment advice and
research services.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.
(small solid bullet) FIIA pays FIJ a fee equal to 105% of FIJ's costs
incurred in connection with providing investment advice and research
services.
(small solid bullet) FMR Far East pays FIJ a fee equal to 100% of
FIJ's costs incurred in connection with providing investment advice
and research services for a fund to FMR Far East.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East a fee equal to
50% of its monthly management fee with respect to the fund's average
net assets managed by the sub-adviser on a discretionary basis.
(small solid bullet) FMR pays FIIA a fee equal to 57% of its monthly
management fee with respect to the fund's average net assets managed
by the sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to a percentage
of the fund's monthly average net assets managed by FIIA(U.K.)L on a
discretionary basis. The fee rate is based on the monthly average net
assets managed by FIIA(U.K.)L on behalf of FIIA pursuant to
sub-advisory arrangements less any assets managed by FIIA(U.K.)L on
behalf of FIIA on which a reduction is applicable to the sub-advisory
fee paid to FIIA(U.K.)L (Average Group Assets). The fee rate is
calculated on a cumulative basis pursuant to the graduated fee rate
schedule below.
Average Group Assets Annualized Fee Rate
from $0 - $500 million 0.23%
$500 million - $1 billion 0.20%
over $1 billion 0.17%
FIIA(U.K.)L's fee will not exceed 50% of the fee that FIIA receives
from FMR for services provided on behalf of the fund.
(small solid bullet) FIIA pays FIJ a fee equal to a percentage of the
fund's monthly average net assets managed by FIJ on a discretionary
basis. The fee rate is based on the monthly average net assets managed
by FIJ on behalf of FIIA pursuant to sub-advisory arrangements less
any assets managed by FIJ on behalf of FIIA on which a reduction is
applicable to the sub-advisory fee paid to FIJ (Average Group Assets).
The fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule below.
Average Group Assets Annualized Fee Rate
from $0 - $200 million 0.20%
$200 million - $500 million 0.17%
over $500 million 0.15%
FIJ's fee will not exceed 50% of the fee that FIIA receives from FMR
for services provided on behalf of the fund.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACT" SECTION BEGINNING ON PAGE 28.
For discretionary investment management and execution of portfolio
transactions, fees paid to FIIA and FIIA (U.K.)L for the past two
fiscal years are shown in the table below.
Fiscal Year Ended December 31 FIIAA FIIA(U.K.)LB
1999 $ 9,813 $ 3,112
1998 $ 0 $ 0
A Prior to August 1, 1999, FMR paid FIIA a fee equal to 50% of its
monthly management fee with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
B Prior to July 1, 2000, FIIA paid FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing
discretionary investment management services.
SUPPLEMENT TO THE FIDELITY(registered trademark) STRATEGIC INCOME FUND
FEBRUARY 28, 2000
PROSPECTUS
The following information replaces similar information found under the
heading "Principal Investment Risks" in the "Investment Details"
section on page 8.
Many factors affect the fund's performance. The fund's yield and share
price change daily based on changes in interest rates and market
conditions and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types and maturities of securities in which the fund
invests, the financial condition, industry and economic sector, and
geographic location of an issuer, and the fund's level of investment
in the securities of that issuer. Because FMR may invest a significant
percentage of the fund's assets in a single issuer, the fund's
performance could be closely tied to the market value of that one
issuer and could be more volatile than the performance of more
diversified funds. When you sell your shares of the fund, they could
be worth more or less than what you paid for them.
The following information replaces similar information found in the
"Fund Management" section on page 24.
FMR pays FIMM, FMR U.K., FMR Far East and FIIA for providing
sub-advisory services, and FIIA in turn pays FIIA(U.K.)L. FIIA or FMR
Far East in turn pays FIJ for providing sub-advisory services.
SUPPLEMENT TO
FIDELITY'S INTERNATIONAL BOND FUNDS
FEBRUARY 28, 2000
PROSPECTUS
The following information replaces similar information found in the
"Fund Management" section on page 25.
FMR pays FMR U.K, FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FIIA or FMR Far East in
turn pays FIJ for providing sub-advisory services.
SUPPLEMENT TO THE
FIDELITY INTERNATIONAL BOND FUND AND FIDELITY NEW MARKETS INCOME FUND
FEBRUARY 28, 2000
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 27.
J. MICHAEL COOK (57), Member of the Advisory Board (2000). Prior to
Mr. Cook's retirement in May 1999, he served as Chairman and Chief
Executive Officer of Deloitte & Touche LLP, Chairman of the Deloitte &
Touche Foundation, and a member of the Board of Deloitte Touche
Tohmatsu. He currently serves as an Executive in Residence of the
Columbia Business School and as a Director of Dow Chemical Company
(2000), HCA - The Healthcare Company (1999), and Children First
(1999). He is a member of the Executive Committee of the Securities
Regulation Institute, a member of the Advisory Board of Boardroom
Consultants, past chairman and a member of the Board of Catalyst (a
leading organization for the advancement of women in business), and a
Director of the STAR Foundation (Society to Advance the Retarded and
Handicapped). He also serves as a member of the Board and Executive
Committee and as Co-Chairman of the Audit and Finance Committee of the
Center for Strategic & International Studies, a member of the Board of
Overseers of the Columbia Business School, and a Member of the
Advisory Board of the Graduate School of Business of the University of
Florida.
MARIE L. KNOWLES (53), Member of the Advisory Board (2000).
Beginning in 1972, Ms. Knowles served in various positions with
Atlantic Richfield Company (ARCO) (diversified energy) including
Executive Vice President and Chief Financial Officer (1996-2000);
Director (1996-1998); and Senior Vice President (1993-1996). In
addition, Ms. Knowles served as President of ARCO Transportation
Company (1993-1996). She currently serves as a Director of Phelps
Dodge Corporation (copper mining and manufacturing), URS Corporation
(multidisciplinary engineering, 1999), and America West Holdings
Corporation (aviation and travel services, 1999). Ms. Knowles also
serves as a member of the National Board of the Smithsonian
Institution and she is a trustee of the Brookings Institution.
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 27.
BART A. GRENIER (40), is Vice President of certain High Income Bond
Funds (1997 through February 29, 2000). Mr. Grenier rejoined Fidelity
in August 1997 from DDJ Capital Management, LLC, where he had served
as Managing Director since April 1997. Mr. Grenier originally joined
Fidelity in 1991 as a senior analyst. Mr. Grenier served as a Director
of High-Income Group Research and as Director of U.S. Equity Research
from 1994 to March 1996. He later became Group Leader of the
Income-Growth and Asset Allocation-Income Groups in 1996 and Assistant
Equity Division Head in 1997.
MATTHEW N. KARSTETTER (38), Deputy Treasurer (1998), is Deputy
Treasurer of the Fidelity funds and is an employee of FMR (1998).
Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 32.
On behalf of International Bond and New Markets Income, FMR has
entered into sub-advisory agreements with FMR U.K., FMR Far East, and
FIIA. FIIA, in turn, has entered into a sub-advisory agreement with
FIIA(U.K.)L and FIJ. Pursuant to the sub-advisory agreements, FMR may
receive from the sub-advisers investment research and advice on
issuers outside the United States and FMR may 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.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 32.
For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:
(small solid bullet) 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.
(small solid bullet) FMR pays FIIA a fee equal to 30% of FMR's
monthly management fee with respect to the average net assets held by
the fund for which the sub-adviser has provided FMR with investment
advice and research services.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.
(small solid bullet) FIIA pays FIJ a fee equal to 105% of FIJ's
costs incurred in connection with providing investment advice and
research services.
(small solid bullet) FMR Far East pays FIJ a fee equal to 100% of
FIJ's costs incurred in connection with providing investment advice
and research services for a fund to FMR Far East.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 32.
For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as
follows:
(small solid bullet) FMR pays FMR U.K. and FMR Far East a fee equal
to 50% of its monthly management fee with respect to the fund's
average net assets managed by the sub-adviser on a discretionary
basis.
(small solid bullet) FMR pays FIIA a fee equal to 57% of its
monthly management fee with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to a
percentage of the fund's monthly average net assets managed by
FIIA(U.K.)L on a discretionary basis. The fee rate is based on the
monthly average net assets managed by FIIA(U.K.)L on behalf of FIIA
pursuant to sub-advisory arrangements less any assets managed by
FIIA(U.K.)L on behalf of FIIA on which a reduction is applicable to
the sub-advisory fee paid to FIIA(U.K.)L (Average Group Assets). The
fee rate is calculated on a cumulative basis pursuant to the graduated
fee rate schedule below.
Average Group Assets Annualized Fee Rate
from $0 - $500 million 0.23%
$500 million - $1 billion 0.20%
over $1 billion 0.17%
FIIA(U.K.)L's fee will not exceed 50% of the fee that FIIA receives
from FMR for services provided on behalf of the fund.
(small solid bullet) FIIA pays FIJ a fee equal to a percentage of
the fund's monthly average net assets managed by FIJ on a
discretionary basis. The fee rate is based on the monthly average net
assets managed by FIJ on behalf of FIIA pursuant to sub-advisory
arrangements less any assets managed by FIJ on behalf of FIIA on which
a reduction is applicable to the sub-advisory fee paid to FIJ (Average
Group Assets). The fee rate is calculated on a cumulative basis
pursuant to the graduated fee rate schedule below.
Average Group Assets Annualized Fee Rate
from $0 - $200 million 0.20%
$200 million - $500 million 0.17%
over $500 million 0.15%
FIJ's fee will not exceed 50% of the fee that FIIA receives from
FMR for services provided on behalf of the fund.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 33.
For discretionary investment management and execution of portfolio
transactions, fees paid to FMR U.K., FMR Far East, FIIA, FIIA(U.K.)L,
and FIJ on behalf of International Bond for the past three fiscal
years are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Fiscal Year Ended December 31 FMR U.K. FMR Far East FIIA FIIA(U.K.)L FIJ
International Bond
1999 $ 0 $ 0 $ 149,749A $ 42,598B $ 0
1998 $ 0 $ 0 $ 121,889A $ 75,948B $ 0
1997 $ 0 $ 0 $ 221,132A $ 122,400B $ 0
</TABLE>
A Prior to August 1, 1999, FMR paid FIIA a fee equal to 50% of its
monthly management fee with respect to the fund's average net assets
managed by the sub-adviser on a discretionary basis.
B Prior to July 1, 2000, FIIA paid FIIA(U.K.)L a fee equal to 110%
of FIIA(U.K.)L's costs incurred in connection with providing
discretionary investment management services.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND UNDER
THE HEADING "SUB-ADVISERS" IN THE "MANAGEMENT CONTRACTS" SECTION
BEGINNING ON PAGE 32.
Under the terms of the sub-advisory agreement for New Markets
Income, FMR will pay FMRC fees equal to 50% of the management fee
payable to FMR under its management contract with the fund. Under the
terms of the sub-advisory agreement for International Bond, FMR will
pay FMRC fees equal to 50% of the management fee payable to FMR with
respect to that portion of the fund's assets that will be managed by
FMRC. The fees paid to FMRC will not be reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to
time.
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "DISTRIBUTION
SERVICES" SECTION BEGINNING ON PAGE 33.
Under the terms of the sub-advisory agreement for New Markets
Income, FMR will pay FMRC fees equal to 50% of the management fee
payable to FMR under its management contract with the fund. Under the
terms of the sub-advisory agreement for International Bond, FMR will
pay FMRC fees equal to 50% of the management payable to FMR with
respect to that portion of the fund's assets that will be managed by
FMRC. The fees paid to FMRC will not be reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to
time.
