SPARTAN(Registered trademark)
(registered trademark)
CONNECTICUT
MUNICIPAL
PORTFOLIOS
SEMIANNUAL REPORT
MAY 31, 1994
CONTENTS
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PRESIDENT'S MESSAGE 3 Ned Johnson on bond market
strategies.
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 19 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE 23 How the fund has done over time.
FUND TALK 25 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 27 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 28 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 32 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 36 Notes to the financial statements.
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THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The past few months have been an unsettling time for bond investors. The
bond market declined after the Federal Reserve Board raised short-term
interest rates in February and March. These rate hikes caused bond yields
to rise and bond prices to fall. While nobody knows whether rates will
continue to go up, this may be a good time to review the effect rising
rates have on your bond fund investment, and consider how well your current
bond fund holdings match your original investment goals.
Most investors choose bond funds to generate income and to help diversify
their investment portfolios. Despite the recent market downturn, bond
mutual funds still satisfy these needs. Where investors have felt the
negative effect of rising rates is in the market value of their investment,
which has eroded as bond prices have fallen. It's important to remember,
however, that this loss in principal is only "on paper" until you choose to
sell your shares. That's why your investing time horizon is key.
If your time horizon is short - one year or less - you may want to consider
shifting all or part of your bond fund investment into short-term
investments. If you can't keep your investment in the bond fund until
yields start falling again and bond prices rise, you increase your risk of
not recouping the full value of the shares. A money market fund provides a
stable $1 share price and a yield that becomes more attractive as rates go
up.
If you don't need your money within the next year, staying in your bond
fund may be the appropriate strategy for you. The longer your investing
time frame, the better your chances of retaining your principal investment
through periods of rising AND falling rates. For example, if you plan to
use your money in one to two years, a short-term bond fund may be the right
choice. If your time frame is two to four years, a fund with an
intermediate length average maturity may be best. If you have a longer-term
goal - say a child's college education that's ten years away - you may be
willing to ride out the bond market's peaks and valleys in exchange for the
higher potential returns of a longer-term fund.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of the $5 account closeout fee.
You can also look at the fund's income. If Fidelity had not reimbursed
certain fund expenses during the periods shown, the total returns and
dividends would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1994 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Spartan Connecticut Municipal
High Yield Portfolio -2.73% 1.77% 43.98% 70.73%
Lehman Brothers Municipal Bond Index -1.83% 2.47% 48.85% n/a
Average Connecticut Tax-exempt
Municipal Bond Fund -2.93% 1.47% 43.38% n/a
Consumer Price Index 1.17% 2.29% 19.14% 27.93%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, six months, one year, five years, or since the fund started on
October 29, 1987. For example, if you invested $1,000 in a fund that had a
5% return over the past year, you would end up with $1,050. You can compare
these figures to the performance of the Lehman Brothers Municipal Bond
index - a broad gauge of the municipal bond market. To measure how the fund
stacked up against its peers, you can look at the average Connecticut
tax-exempt municipal bond fund, which reflects the performance of 13
Connecticut municipal bond funds tracked by Lipper Analytical Services.
Both benchmarks include reinvested dividends and capital gains, if any.
Comparing the fund's performance to the consumer price index helps show how
your fund did compared to inflation.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Connecticut Municipal
High Yield Portfolio 1.77% 7.56% 8.45%
Lehman Brothers Municipal Bond Index 2.47% 8.28% n/a
Average Connecticut Tax-exempt
Municipal Bond Fund 1.47% 7.47% n/a
Consumer Price Index 2.29% 3.57% 3.81%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
10/31/87 10000.00 10000.00
11/30/87 10121.14 10261.10
12/31/87 10253.38 10409.99
01/31/88 10621.32 10780.79
02/29/88 10727.51 10894.75
03/31/88 10415.77 10767.82
04/30/88 10463.24 10849.66
05/31/88 10515.59 10818.30
06/30/88 10713.45 10976.57
07/31/88 10766.94 11048.14
08/31/88 10821.12 11057.86
09/30/88 11033.66 11258.01
10/31/88 11228.48 11456.71
11/30/88 11123.75 11351.77
12/31/88 11289.83 11467.90
01/31/89 11442.62 11705.06
02/28/89 11333.30 11571.50
03/31/89 11345.51 11543.84
04/30/89 11654.63 11817.90
05/31/89 11899.34 12063.35
06/30/89 12098.25 12227.17
07/31/89 12229.61 12393.59
08/31/89 12100.69 12272.25
09/30/89 12064.54 12235.44
10/31/89 12207.62 12384.71
11/30/89 12387.76 12601.44
12/31/89 12467.79 12704.77
01/31/90 12357.27 12645.06
02/28/90 12469.60 12757.60
03/31/90 12491.35 12761.43
04/30/90 12296.36 12669.55
05/31/90 12602.21 12945.74
06/30/90 12730.25 13059.66
07/31/90 12919.65 13251.64
08/31/90 12687.36 13059.49
09/30/90 12769.38 13067.33
10/31/90 12962.06 13303.85
11/30/90 13241.66 13571.25
12/31/90 13302.08 13630.97
01/31/91 13449.70 13813.62
02/28/91 13534.39 13933.80
03/31/91 13556.04 13939.37
04/30/91 13728.33 14124.77
05/31/91 13850.06 14250.48
06/30/91 13743.00 14236.23
07/31/91 13906.13 14409.91
08/31/91 14057.21 14600.12
09/30/91 14183.28 14789.92
10/31/91 14323.10 14923.03
11/30/91 14357.59 14964.82
12/31/91 14709.44 15286.56
01/31/92 14731.79 15321.72
02/29/92 14739.08 15326.32
03/31/92 14671.72 15332.45
04/30/92 14749.26 15468.90
05/31/92 14951.26 15651.44
06/30/92 15245.81 15914.38
07/31/92 15720.88 16391.81
08/31/92 15498.37 16231.17
09/30/92 15604.48 16336.68
10/31/92 15338.53 16176.58
11/30/92 15752.70 16466.14
12/31/92 15918.26 16634.09
01/31/93 16155.62 16827.05
02/28/93 16812.50 17436.19
03/31/93 16583.73 17251.36
04/30/93 16736.58 17425.60
05/31/93 16834.45 17523.19
06/30/93 17132.67 17815.82
07/31/93 17158.03 17838.98
08/31/93 17547.21 18210.03
09/30/93 17760.00 18417.63
10/31/93 17769.50 18452.62
11/30/93 17613.40 18290.24
12/31/93 17984.07 18676.16
01/31/94 18192.19 18889.07
02/28/94 17691.70 18399.84
03/31/94 16886.78 17650.97
04/30/94 17031.86 17801.00
05/31/94 17133.34 17955.87
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Connecticut Municipal High Yield Portfolio on October 31, 1987, shortly
after the fund started. As the chart shows, by May 31, 1994, the value of
your investment would have grown to $17,133 - a 71.33% increase on your
initial investment. This assumes you still own the fund on May 31, and
therefore does not include the effect of the $5 account closeout fee. For
comparison, look at how the Lehman Brothers Municipal Bond index did over
the same period. With dividends reinvested, the same $10,000 would have
grown to $17,956 - a 79.56% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
SIX MONT
HS
ENDED YEARS ENDED NOVEMBER 30,
MAY 30,
1994 1993 1992 1991 1990
Dividend return 2.73% 6.29% 6.59% 6.65% 6.71%
Capital appreciation returns -5.46% 5.52% 3.12% 1.77% 0.17%
Total return -2.73% 11.81% 9.71% 8.42% 6.88%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee.
DIVIDENDS AND YIELD
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PERIODS ENDED MAY 31, 1994 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 5.44(cents) 31.92(cents) 65.55(cents)
Annualized dividend rate 5.95% 5.68% 5.66%
30-day annualized yield 5.83% - -
30-day annualized tax-equivalent yield 9.54% - -
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DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.76 over
the past month, $11.27 over the past six months and $11.58 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. It does not reflect the cost of hedging and other
currency gains and losses. The tax-equivalent yield shows what you would
have to earn on a taxable investment to equal the fund's tax-free yield, if
you're in the 38.88% combined federal and state tax bracket.
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Peter Allegrini,
Portfolio Manager of Spartan
Connecticut Municipal High Yield
Portfolio
Q. PETER, HOW HAS THE FUND PERFORMED?
A. It has been a difficult period for both the municipal bond market and
the fund. For the six months ended May 31, 1994, the fund had a total
return of -2.73%. That slightly beat the average Connecticut municipal
fund, which returned -2.93% for the same period, according to Lipper
Analytical Services. For the 12 months ended May 31, 1994, the fund
returned 1.77%, compared to the average return of 1.47%, again according to
Lipper.
Q. LET'S START WITH THE MUNICIPAL BOND MARKET - WHAT CAUSED IT TO FALL OVER
THE PAST SIX MONTHS?
A. Simply put, higher interest rates. Most municipal bond investors greeted
the start of 1994 with enthusiasm, based partly on expectations that strong
supply and demand factors would work in municipal bonds' favor. The supply
of new bonds issued was estimated to be half as much in 1994 as in 1993,
and higher federal income taxes were expected to ignite demand. Investors
entered the new year fully invested and the technical factors for the
municipal bond market were positive. But, in February, the Federal Reserve
made its first of several interest rate hikes, causing long-term bond
investors to react negatively. The Federal Reserve raised the federal funds
rate - the rate banks charge each other for overnight loans - to 3.25%. And
through May, the Fed moved three more times, raising the fed funds rate to
4.25%. The Fed rate hikes were allegedly a preemptive strike against
inflation. The economy appeared to be heating up and the Fed seemed
determined to keep inflation in check. The Fed's action was met with a good
deal of skepticism resulting in the quick, abrupt bond market sell-off from
February to May.
Q. WHAT STRATEGIES DID YOU USE TO HELP OFFSET SOME OF THE MARKET'S DECLINE?
A. Hedging with futures was one strategy I used. When the market fell, the
futures rose. There's been a lot of talk lately about derivatives, and
futures are one type of financial arrangements known as a derivative -
meaning its market value is derived from an underlying security or market
index. We have used futures and options in our mutual funds for years.
However, a futures contract is not the type of derivative that's been
getting most of the publicity lately. More recently, I've also started
using a derivative known as an inverse floater - whose yield rises as
short-term rates fall, and vice versa. Throughout the past six months,
inverse floaters made up less than 5% of the fund's total investments. By
using these various derivatives, I can achieve higher levels of tax-exempt
income and increased flexibility in managing the fund's overall sensitivity
to changes in interest rates. Keep in mind that these strategies involve
risk and don't always work as intended.
Q. IN 1993, YOU POSITIONED THE FUND TO TAKE ADVANTAGE OF FALLING INTEREST
RATES. NOW THAT INTEREST RATES HAVE RISEN, WHAT'S YOUR STRATEGY?
A. My strategy is basically the same. I try to find the best value for the
money, across a variety of credit qualities. In my view, the best way to
achieve a consistently high rate of return is to generate a substantial
amount of income and take advantage of changes in interest rates, which can
sometimes create inefficient prices. One way I'm trying to generate more
income is through increasing the fund's stake in high-yielding, lower
quality Ba- and B-rated bonds. As the economy improves, so should the
credit quality of many of these bonds.
Q. YOU ALSO HAVE 9.7% OF THE FUND INVESTED IN NON-RATED BONDS - AREN'T
THESE MORE RISKY THAN RATED BONDS?
A. They can be. But we feel that our research staff - which is one of the
largest in the industry - gives us a real advantage in evaluating the
creditworthiness and strength of non-rated bonds. Most of the fund's
non-rated bonds are lower-quality nursing homes, a sector that can be
difficult to understand without intensive research, given the uncertainty
surrounding health care reform. These bonds are attractive because they
offer relatively high yields. What's more, a recent legislative change now
allows Connecticut nursing homes to refund, or buy back, their older,
non-rated bonds, and issue new bonds through the state, which carries a
higher rating. When these bonds were refunded, their credit quality
improved and so did their prices. In addition, the new legislation
indicates that the state is committed to reducing the interest costs for
nursing homes.
Q. YOU MENTIONED THE SUPPLY AND DEMAND FACTORS THAT WERE EXPECTED TO BOOST
MUNICIPAL PRICES THIS YEAR. DID RISING INTEREST RATES DERAIL ANY POSITIVE
EFFECT OF THOSE FACTORS?
A. Higher rates didn't derail the positive effects, they just delayed their
impact. As expected, there has been a slowdown in the supply of new bonds
issued in 1994, and higher interest rates should effectively remove the
incentive for any issuer to refinance most older debt. And despite the
market sell-off, demand for municipals has started to increase. Many
high-income Americans now realize that municipal bonds and municipal bond
funds are among the few remaining ways to generate tax-free income. I think
a lower supply and even a constant demand will bode well for municipal
bonds, once the dust settles and the market calms down.
Q. IN YOUR OPINION, WHEN WILL THAT BE?
A. It's pretty tough to say for sure at this point. However, there is some
evidence that the municipal market is basing, meaning it looks like it may
have reached a bottom. My long-term outlook is for interest rates not to
rise too much from here, maybe another quarter to a half percent. But if
interest rates do rise higher than I expect, I'll take steps to make the
fund less sensitive to interest rate changes. If not, I'll continue to
maintain the fund's current structure. Whatever happens, it will be nearly
impossible to produce the same strong returns in 1994 that we enjoyed in
1993. So investors would be wise to expect more modest returns. In my view,
the municipal market is as attractive as it will get this year, and munis
are a good value compared to U.S. Treasury securities. In the past, when
municipal yields are two times the inflation rate - which they are now - it
has been a good time to invest in municipal bonds.
FUND FACTS
GOAL: to provide a high level
of current income exempt from
Connecticut state and federal
income taxes by investing
primarily in bonds rated Baa or
better
START DATE: October 29, 1987
SIZE: as of May 31, 1994,
more than $385 million
MANAGER: Peter Allegrini,
since October 1987; manager,
Fidelity Advisor High Income
Municipal Fund, since
November 1985;
Fidelity Michigan Tax-Free and
Ohio Tax-Free Funds, since
November 1985; formerly,
manager Fidelity Minnesota
Tax-Free Fund from November
1985 to September 1993 and
Spartan Pennsylvania
Municipal Fund, August 1986
to September 1993; joined
Fidelity in 1989
(checkmark)
PETER ALLEGRINI ON THE
CONNECTICUT ECONOMY:
"Connecticut's economy
appears to be on the mend,
although the state is
continuing to experience the
effects of cutbacks in the
defense and insurance
industries. Changes to those
industries are not temporary,
they're permanent and it may
take some time for all the
effects of massive
restructuring to work
themselves out. On the other
hand, the state's fiscal
situation is improving. New
tax laws have brought stability
to the amount of revenues
collected and the state
appears to be on track in
balancing its budget for the
third straight year."
(bullet) Because of recent tax hikes
at the federal level, some
Connecticut residents could
be subject to a tax-rate as
high as 42.32% in 1994.
(bullet) Of the fund's total
investments, 9.7% were in
bonds that are non-rated, as
of May 31, 1994. These
bonds are attractive because
of their relatively high yields.
(bullet) Health-care bonds continue
to make up the fund's largest
investments - 28.7% as of
May 31, 1994. These bonds
are also attractive, in part,
because of their high yields.
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF MAY 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO
Health Care 28.7 28.9
General Obligation 23.7 24.1
Special Tax 12.0 6.1
Education 6.9 9.4
Transportation 6.8 6.0
AVERAGE YEARS TO MATURITY AS OF MAY 31, 1994
6 MONTHS AGO
Years 19.8 20.7
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF MAY 31, 1994
6 MONTHS AGO
Years 8.5 8.3
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF MAY 31, 1994
(MOODY'S RATINGS)
Aaa 21.9%
Aa, A 36.1%
Baa 27.8%
Ba or B 2.0%
Non-rated 9.7%
Row: 1, Col: 1, Value: 21.9
Row: 1, Col: 2, Value: 36.1
Row: 1, Col: 3, Value: 27.8
Row: 1, Col: 4, Value: 2.0
Row: 1, Col: 5, Value: 9.699999999999999
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
INVESTMENTS MAY 31, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 97.5%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (E) AMOUNT (NOTE 1)
CONNECTICUT - 84.5%
Berlin Unltd. Tax:
7.10% 6/15/04 A1 $ 100,000 $ 111,500
7.20% 6/15/06 A1 135,000 151,538
Branford Gen. Oblig. Unltd. Tax:
7% 6/15/08, (FGIC Insured) Aaa 500,000 555,625
7% 6/15/09, (FGIC Insured) Aaa 500,000 550,625
Bridgeport Gen. Oblig.
Series B, 7.75% 11/15/10 Ba 3,235,000 3,437,188
Bridgeport Unltd. Tax Series A:
7.20% 3/1/98 Ba 930,000 964,875
7.40% 3/1/00 Ba 1,080,000 1,134,000
7.25% 6/1/02 Ba 565,000 590,425
7.625% 1/15/09 Ba 1,500,000 1,576,875
Brookfield Gen. Oblig.:
5.25% 7/15/10 Aa 200,000 188,000
5.25% 7/15/11 Aa 200,000 186,750
5.25% 7/15/12 Aa 200,000 186,250
5.25% 7/15/13 Aa 190,000 176,463
Canterbury Unltd. Tax:
7.20% 5/1/05 A 350,000 391,125
7.20% 5/1/06 A 195,000 217,669
Cheshire Unltd. Tax:
6.90% 2/15/06 Aa 100,000 110,625
6.90% 2/15/07 Aa 100,000 110,750
6.90% 2/15/08 Aa 100,000 110,375
Colchester Unltd. Tax 7.10% 12/15/04,
(MBIA Insured) Aaa 210,000 239,663
Connecticut Clean Wtr. Fund Rev.:
Series 1991, 7% 1/1/11 Aa 2,500,000 2,693,750
5.875% 4/1/08 Aa 1,000,000 1,025,000
6% 10/1/12 Aa 5,800,000 5,908,750
Connecticut Dev. Auth. 1st. Mtg. Gross Rev.:
(Health Care Proj.):
(Baptist Homes, Inc.):
8.75% 9/1/12 - 2,415,000 2,578,013
9% 9/1/22 - 4,240,000 4,595,100
(Inter-Church Residences, Inc.):
9.50% 5/1/13 - 1,200,000 1,327,500
9.625% 4/1/21 - 3,500,000 3,893,750
(Mary Wade Home, Inc. Proj.)
8.875%, 12/1/18 - 1,670,000 1,745,150
Connecticut Dev. Auth. Health Care Rev.:
Rfdg. (Duncaster, Inc. Proj.) 6.75%
9/1/15 Aa3 3,000,000 3,048,750
(Jerome Home Proj.) 8% 11/1/19 - 2,000,000 2,070,000
(Masonic Charity Foundation) 6.50%
8/1/20, (AMBAC Insured) Aaa 5,800,000 6,068,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (E) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Dev. Auth. Poll. Cont. Rev.:
(Pfizer, Inc. Proj.) 6.55% 2/15/13 Aaa $ 4,000,000 $ 4,275,000
(United Illuminating Co. Proj.)
9.50% 6/1/16 BBB- 2,625,000 2,854,688
Connecticut Dev. Auth. Rev. (Hartford Civic Ctr.):
Series A:
6% 11/15/07 A1 1,525,000 1,551,688
6% 11/15/08 A1 3,050,000 3,074,782
4.75% 11/15/13 A1 1,525,000 1,267,656
Connecticut Dev. Auth. Wtr. Facs. Rev. Rfdg.:
(Bridgeport Hydraulic Co. Proj.):
Series A, 6.05% 3/1/29,
(MBIA Insured) (f) Aaa 2,000,000 1,957,500
7.25% 6/1/20 A 1,000,000 1,048,750
Connecticut Gen. Oblig.:
Rfdg. Unltd. Tax Series B, 5.50% 3/15/10 Aa 3,000,000 2,893,750
(Cap. Appreciation) Series B, 0% 11/1/09 Aa 11,390,000 4,584,475
(Cap. Appreciation-College Savings Plan):
Series A:
0% 12/1/07 Aa 4,000,000 1,830,000
0% 12/1/08 Aa 558,000 237,150
Series B:
0% 11/15/10 Aa 4,460,000 1,672,500
(College Savings Plan):
Series 1991 A, 0% 5/15/10 Aa 1,025,000 395,906
Series A:
0% 5/15/11 Aa 3,350,000 1,210,188
0% 5/15/10 Aa 7,980,000 3,082,275
0% 11/1/06 Aa 2,800,000 1,379,000
Unltd. Tax:
Series A, 0% 6/15/10 Aa 2,188,000 847,850
Series B:
0% 12/15/10 Aa 2,428,000 907,465
0% 12/1/11 Aa 1,540,000 539,000
0% 12/15/11 Aa 1,496,000 521,730
Series A:
0% 7/1/98 Aa 780,000 640,575
0% 7/1/03 Aa 4,000,000 2,435,000
0% 7/1/04 Aa 4,514,000 2,589,908
0% 7/1/05 Aa 750,000 403,125
0% 5/15/07 Aa 2,250,000 1,060,313
0% 7/1/07 Aa 2,430,000 1,139,063
0% 7/1/08 Aa 4,690,000 2,046,013
Connecticut Health & Ed. Facs. Auth. Rev.:
Rfdg. (Hartford Univ.)
Series D, 6.80% 7/1/22 Baa 6,320,000 6,225,200
(Bristol Hosp.) Issue A:
7% 7/1/09 (MBIA Insured) Aaa 1,750,000 1,885,625
7% 7/1/20 (MBIA Insured) Aaa 4,180,000 4,503,950
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (E) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Ed. Facs. Auth. Rev. - continued
(Cap. Asset Issue) Series C:
6.875% 1/1/10, (MBIA Insured) Aaa $ 1,000,000 $ 1,065,000
7% 1/1/20, (MBIA Insured) Aaa 3,730,000 4,023,738
(Lutheran Gen. Health Care Sys.)
7.375% 7/1/19 Aaa 3,195,000 3,598,369
(New Britain Mem. Hosp.)
Series A, 7.75% 7/1/22 BBB- 16,900,000 18,209,750
(Norwalk Health Care, Inc.)
Series A, 8.70% 7/1/22 - 6,600,000 6,996,000
(Quinnipiac Coll.):
Rfdg.:
Series D:
6%, 7/1/13 BBB- 3,750,000 3,520,313
6% 7/1/23 BBB- 3,975,000 3,681,844
Series C, 7.75% 7/1/20 (Pre-Refunded
to 7/1/00 @ 102) (c) BBB- 1,000,000 1,148,750
(St. Joseph Living Ctr. Proj.)
4.75% 11/1/14 A1 3,250,000 2,705,625
(St. Mary's Hosp.):
Issue B:
7.60% 7/1/03 Baa 900,000 959,625
7.80% 7/1/09 (AMBAC Insured) Baa 7,985,000 8,294,419
Series C, 7.375% 7/1/20 Baa 7,420,000 7,503,475
(St. Raphael's Hosp.) Series H:
6.50% 7/1/11, (AMBAC Insured) Aaa 2,780,000 2,898,150
6.50% 7/1/13, (AMBAC Insured) Aaa 3,125,000 3,265,625
5.25% 7/1/14, (AMBAC Insured) Aaa 4,400,000 3,998,500
(Sacred Heart Univ.)
Series A, 6.85% 7/1/22 A 1,000,000 987,500
(Sharon Healthcare, Inc.) Series A:
8.75% 7/1/06 - 450,000 550,688
9% 7/1/13 - 1,300,000 1,608,750
9.20% 7/1/21 - 1,500,000 1,875,000
(Taft School):
Series A:
7.40% 7/1/10 - 2,190,000 2,474,700
7.375% 7/1/20 (Pre-Refunded
to 7/1/00 @ 102) (c) - 1,700,000 1,918,875
Series B, 5.40% 7/1/20 - 1,250,000 1,096,875
(The Griffin Hosp.) Series A, 6% 7/1/13 Baa1 3,000,000 2,715,000
(Tolland County Health Care, Inc.) Series A:
8.75% 7/1/08 - 350,000 379,313
9% 7/1/13 - 1,000,000 1,097,500
9.20% 7/1/21 - 3,600,000 3,991,500
(Waterbury Hosp.) Issue B, 7% 7/1/20,
(FSA Insured) Aaa 2,300,000 2,472,500
(Yale-New Haven Hosp.) Series F, 7.10%
7/1/25, (MBIA Insured) Aaa 12,000,000 12,990,000
(Yale Univ.) 8.445% 6/10/30 RIB, INFL (d) Aaa 7,000,000 6,273,750
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (E) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Higher Ed. Supplemental Loan
Auth. Rev. (b):
(Family Ed. Loan Prog.) Series A:
6.80% 11/15/02 A $ 465,000 $ 477,788
7.20% 11/15/10 A 945,000 963,900
Series A:
7.375% 11/15/05 A 570,000 571,425
7.50% 11/15/10 A 1,970,000 1,977,388
Connecticut Hsg. Fin. Auth. (Mtg. Fin. Prog.):
Series A, 7.50% 11/15/09 (b) Aa 2,645,000 2,803,700
Series B, 8.80% 11/15/02 Aa 425,000 454,219
Series C, 7.625% 11/15/17 Aa 545,000 555,900
Series E, 8.75% 11/15/18 Aa 4,455,000 4,655,475
Sub-Series B1, 7.55% 11/15/08 Aa 2,000,000 2,097,500
Sub-Series B3:
7.70% 11/15/09 (b) Aa 110,000 116,050
7.755% 11/15/22 (b) Aa 1,190,000 1,255,450
Connecticut Muni. Elec. Energy Coop. Pwr.
Supply Sys. Rev. Series A, 5% 1/1/18,
(MBIA Insured) Aaa 5,000,000 4,325,000
Connecticut Resource Recovery Auth. Rev.
(American Refuse Fuel Co.) 8.10%
11/15/15 (b) A2 4,500,000 5,006,250
Connecticut Spl. Tax. Oblig. Rev.
Rfdg. Rites 5.026% 10/1/03 INFL (d) A1 5,000,000 3,550,000
(Trans. Infrastructure):
Series A:
Rfdg. 5.25% 9/1/07 A1 6,665,000 6,315,088
7.125% 6/1/10 A1 3,550,000 3,967,125
Series B:
0% 6/1/08 A1 3,500,000 1,513,750
6.10% 9/1/08 A1 2,500,000 2,550,000
6.15% 9/1/09 A1 3,500,000 3,561,250
6.50% 10/1/10 A1 3,250,000 3,420,625
6.125% 9/1/12 A1 5,000,000 5,018,750
6.50% 10/1/12 A1 2,500,000 2,612,500
Series 1993 A, 5.375% 9/1/08 A1 6,705,000 6,352,988
Eastern Resource Recovery Auth. Solid
Waste Rev. (Wheelabrator Lisbon Proj.)
Series A, 5.50% 1/1/15 (b) A 8,000,000 6,880,000
Franklin Unltd. Tax:
7.30% 3/15/04 A 225,000 252,000
7.30% 3/15/05 A 225,000 253,125
7.30% 3/15/06 A 225,000 255,094
Hartford County Metropolitan Dist.:
Unltd. Tax (School Boards)
9.50% 6/1/03 Aa1 100,000 128,875
6.20% 11/15/09 Aa1 250,000 259,375
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (E) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Manchester Hsg. Dev. Agcy.
(Multi-Family Hsg.) 7.20% 12/1/18 - $ 1,565,000 $ 1,543,481
Mansfield Gen. Oblig. Unltd. Tax:
6.80% 6/15/03 A1 300,000 328,875
6.80% 6/15/04 A1 300,000 330,375
6.80% 6/15/08 A1 150,000 163,875
Meriden Unltd. Tax 7% 10/1/07,
(MBIA Insured) Aaa 500,000 561,250
Milford Gen. Oblig.:
Unltd. Tax:
6.70% 2/1/05 Aa 400,000 438,500
6.70% 2/1/08 Aa 315,000 341,775
5.20% 1/15/11 Aa 550,000 509,438
5.20% 1/15/13 Aa 500,000 458,125
Monteville Gen. Oblig.:
Unltd. Tax:
7% 3/15/13 Aa 220,000 248,600
7% 3/15/14 Aa 220,000 249,425
7% 3/15/15 Aa 210,000 238,875
6.30% 3/1/10 Aa 405,000 427,781
Naugatuck Unltd. Tax:
7.25% 9/1/04, (MBIA Insured) Aaa 215,000 246,444
6.90% 6/15/07, (FGIC Insured) Aaa 485,000 539,563
7.40% 9/1/07, (MBIA Insured) Aaa 370,000 428,738
7.40% 9/1/08, (MBIA Insured) Aaa 370,000 427,813
New Britain
Unltd. Tax:
Rfdg. 6% 2/1/12, (MBIA Insured) Aaa 400,000 404,000
7% 4/1/07, (MBIA Insured) Aaa 580,000 646,700
7% 4/1/08, (MBIA Insured) Aaa 580,000 647,425
Series B, 6% 3/1/12, (MBIA Insured) Aaa 2,000,000 2,020,000
New Britain Gen. Oblig.:
5% 2/1/12, (MBIA Insured) Aaa 885,000 797,606
5% 2/1/13, (MBIA Insured) Aaa 885,000 794,288
New Haven Facs. Rev. (Easter Seal
Goodwill Rehabilitation Proj.)
8.875% 4/1/16 - 1,600,000 1,632,000
New Haven Gen. Oblig.:
8.25% 8/15/01 Baa 3,280,000 3,702,300
Series A, 7.40% 3/1/12 Baa 1,000,000 1,051,250
Newington Unltd. Tax:
6.50% 2/1/06 A1 320,000 342,000
6.60% 2/1/07 A1 200,000 214,500
North Haven Unltd. Tax 7% 10/1/08 Aa 375,000 424,688
North Thompsonville Fire Dist.:
6.75% 6/1/07, (MBIA Insured) Aaa 180,000 197,775
6.75% 6/1/08, (MBIA Insured) Aaa 190,000 207,813
6.75% 6/1/09, (MBIA Insured) Aaa 200,000 219,750
6.75% 6/1/10, (MBIA Insured) Aaa 215,000 237,306
6.75% 6/1/11, (MBIA Insured) Aaa 230,000 254,725
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (E) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Norwalk Hsg. Auth. Mtg. Rev.
(Monterey Village) Series 1985 B,
Section 8, 9% 11/1/99 -BBB $ 180,000 $ 186,525
Plainville Gen. Oblig.:
Unltd. Tax:
6.60% 8/15/09 A1 250,000 270,625
6.60% 8/15/10 A1 250,000 270,313
6.60% 8/15/11 A1 250,000 270,938
6.60% 8/15/08 A1 250,000 267,188
Stamford Gen. Oblig. Unltd. Tax:
6.60% 1/15/07 Aaa 295,000 324,131
6.60% 1/15/08 Aaa 1,480,000 1,635,400
6.60% 1/15/09 Aaa 1,000,000 1,091,250
Stratford Unltd. Tax 7%
6/15/08, (FGIC Insured) Aaa 500,000 555,625
Thomaston Unltd. Tax:
6.50% 8/1/08 A 210,000 221,550
6.50% 8/1/09 A 210,000 223,125
Vernon Unltd. Tax:
7.10% 10/15/07 A1 250,000 285,625
7.10% 10/15/08 A1 250,000 284,688
Voluntown Gen. Oblig. Unltd. Tax:
6.75% 10/1/03 A 210,000 228,375
6.75% 10/1/04 A 210,000 228,113
6.80% 10/1/06 A 210,000 230,738
6.80% 10/1/07 A 210,000 227,850
6.80% 10/1/08 A 210,000 231,788
6.80% 10/1/09 A 185,000 203,269
West Haven Impt. Unltd. Tax 6.70% 2/15/04,
(MBIA Insured) Aaa 710,000 782,775
Winchester Gen. Oblig. Unltd. Tax:
7.10% 11/15/06 A1 125,000 138,750
7.10% 11/15/08 A1 110,000 121,825
Wolcott Gen. Oblig. Unltd. Tax:
7% 6/15/09, (FGIC Insured) Aaa 445,000 490,056
7% 6/15/10, (FGIC Insured) Aaa 440,000 484,000
Woodstock Spl. Oblig. Rev.
(Woodstock Academy):
7% 3/1/07, (AMBAC Insured) Aaa 725,000 791,156
7% 3/1/08, (AMBAC Insured) Aaa 725,000 791,156
321,570,076
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (E) AMOUNT (NOTE 1)
PUERTO RICO - 12.7%
Puerto Rico Commonwealth Gen. Oblig. Rfdg.
Unltd. Tax 5% 7/1/21 Baa1 $ 6,000,000 $ 5,017,500
Puerto Rico Commonwealth Hwy. & Trans. Auth. Rev.:
Rfdg:
Series W:
5.50% 7/1/13 Baa1 14,250,000 13,127,813
5.50% 7/1/15 Baa1 3,500,000 3,189,375
Series X:
5.50% 7/1/13 Baa1 2,500,000 2,303,125
5.50% 7/1/15 Baa1 8,000,000 7,290,000
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.:
Series P, 7% 7/1/21 Baa1 1,750,000 1,855,000
Series T, 5.50% 7/1/20 Baa1 1,500,000 1,351,857
Puerto Rico Pub. Bldgs. Auth. Pub. Ed. & Health.
Facs. Rfdg. Series M, 5.75% 7/1/15 Baa1 1,000,000 937,500
Puerto Rico Pub. Bldgs. Auth. Rev. Rfdg.
Series L, 5.50% 7/1/21 Baa1 12,000,000 10,770,000
Puerto Rico Tel. Auth. Rev.:
5.66% 1/1/03, (AMBAC Insured) INFL (d) Aaa 1,000,000 877,500
5.76% 1/1/04, (AMBAC Insured) INFL (d) Aaa 2,000,000 1,755,000
48,474,670
U.S. VIRGIN ISLANDS - 0.3%
Virgin Islands Wtr. & Pwr. Auth. Elec. Sys.
Series A, 7.40% 7/1/11 - 1,000,000 1,056,250
TOTAL MUNICIPAL BONDS
(Cost $364,709,097) 371,100,996
MUNICIPAL NOTES (A) - 2.5%
CONNECTICUT - 2.5%
Connecticut Dev. Auth. Poll. Cont. Rev.
(Western Massachusetts Elec. Co. Proj.)
Series 1993 A, 3.10%, LOC Union Bank
of Switzerland, VRDN VMIG 1 3,000,000 3,000,000
Connecticut Spl. Assessment Unemployment
Rev. Series 1993 B, 2.80%,
LOC Mitsubishi Bank Ltd. Japan, VRDN VMIG 1 6,650,000 6,650,000
TOTAL MUNICIPAL NOTES
(Cost $9,650,000) 9,650,000
TOTAL INVESTMENTS - 100%
(Cost $374,359,097) $ 380,750,996
,1
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Security collateralized by an amount sufficient to pay interest and
principal.
(d) Coupon is inversely indexed to a floating interest rate. The price will
be more volatile than the price of a comparable fixed rate security. The
rate shown is the rate at period end.
(e) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(f) Security purchased on a delayed delivery basis. (see Note 2 of Notes to
Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 54.1% AAA, AA, A 66.2%
Baa 20.0% BBB 10.7%
Ba 2.0% BB 2.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 9.7%. FMR
has determined that unrated debt securities that are lower quality account
for 9.7% of the total value of investment in securities.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Health Care 28.7%
General Obligation 23.7
Special Tax 12.0
Others
(individually less than 10%) 35.6
TOTAL 100.0%
INCOME TAX INFORMATION
At May 31, 1994, the aggregate cost of investment securities for income tax
purposes was $374,362,323. Net unrealized appreciation (depreciation)
aggregated $6,388,673, of which $18,673,165 related to appreciated
investment securities and $12,284,492 related to depreciated investment
securities.
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MAY 31, 1994 (UNAUDITED)
1.ASSETS 2. 3.
4.Investment in securities, at value (cost $374,359,097) 5. $ 380,750,996
(Notes 1 and 2) - See accompanying schedule
6.Interest receivable 7. 7,271,067
8. 9.TOTAL ASSETS 10. 388,022,063
11.LIABILITIES 12. 13.
14.Payable to custodian bank $ 39,928 15.
16.Payable for investments purchased 17. 18.
19. Delayed delivery (Note 2) 1,978,480 20.
21.Payable for fund shares redeemed 86,073 22.
23.Dividends payable 395,643 24.
25.Accrued management fee 179,723 26.
27. 28.TOTAL LIABILITIES 29. 2,679,847
30.31.NET ASSETS 32. $ 385,342,216
33.Net Assets consist of (Note 1): 34. 35.
36.Paid in capital 37. $ 380,158,952
38.Accumulated undistributed net realized gain (loss) on 39. (1,208,635)
investments
40.Net unrealized appreciation (depreciation) on 41. 6,391,899
investment securities
42.43.NET ASSETS, for 35,659,719 shares outstanding 44. $ 385,342,216
45.46.NET ASSET VALUE, offering price and redemption 47. $10.81
price per share ($385,342,216 (divided by) 35,659,719 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1994 (UNAUDITED)
48.49.INTEREST INCOME 50. $ 13,166,302
51.EXPENSES 52. 53.
54.Management fee (Note 4) $ 1,161,277 55.
56.Non-interested trustees' compensation 1,422 57.
58. 59.TOTAL EXPENSES 60. 1,162,699
61.62.NET INTEREST INCOME 63. 12,003,603
64.REALIZED AND UNREALIZED GAIN (LOSS) ON 66. 67.
INVESTMENTS
(NOTES 1 AND 3)
65.Net realized gain (loss) on:
68. Investment securities 1,652,443 69.
70. Futures contracts 894,965 2,547,408
71.Change in net unrealized appreciation (depreciation) 72. (26,543,760)
on investment securities
73.74.NET GAIN (LOSS) 75. (23,996,352)
76.77.NET INCREASE (DECREASE) IN NET ASSETS 78. $ (11,992,749)
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
MAY 31, 1994 NOVEMBER 30,
(UNAUDITED) 1993
79.INCREASE (DECREASE) IN NET ASSETS
80.Operations $ 12,003,603 $ 26,176,581
Net interest income
81. Net realized gain (loss) on investments 2,547,408 14,894,691
82. Change in net unrealized appreciation (depreciation) (26,543,760) 8,978,171
on
investments
83. 84.NET INCREASE (DECREASE) IN NET ASSETS (11,992,749) 50,049,443
RESULTING FROM OPERATIONS
85.Distributions to shareholders (12,003,603) (26,176,581)
From net interest income
86. From net realized gain (15,541,185) -
87. 88.TOTAL DISTRIBUTIONS (27,544,788) (26,176,581)
89.Share transactions 44,507,435 109,111,103
Net proceeds from sales of shares
90. Reinvestment of distributions 22,663,319 21,413,874
91. Cost of shares redeemed (92,436,731) (118,085,422)
92. Redemption fees (Notes 1 and 3) 33,106 52,698
93. Net increase (decrease) in net assets resulting (25,232,871) 12,492,253
from share transactions
94. 95.TOTAL INCREASE (DECREASE) IN NET ASSETS (64,770,408) 36,365,115
96.NET ASSETS 97. 98.
99. Beginning of period 450,112,624 413,747,509
100. End of period $ 385,342,216 $ 450,112,624
101.OTHER INFORMATION 103. 104.
102.Shares
105. Sold 3,930,948 9,381,355
106. Issued in reinvestment of distributions 1,982,918 1,827,287
107. Redeemed (8,262,580) (10,079,212)
108. Net increase (decrease) (2,348,714) 1,129,430
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
109. SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31, 1994
110. (UNAUDITED) 1993 1992 1991 1990 1989
111.SELECTED PER-SHARE DATA
112.Net asset value, beginning of period $ 11.840 $ 11.220 $ 10.880 $ 10.730 $ 10.730 $ 10.300
113.Income from Investment Operations .319 .680 .689 .684 .687 .706
Net interest income
114. Net realized and unrealized gain
(loss) on investments (.621) .619 .338 .188 .020 .430
115. Total from investment operations (.302) 1.299 1.027 .872 .707 1.136
116.Less Distributions (.319) (.680) (.689) (.684) (.687) (.706)
From net interest income
117. From net realized gain on investments (.410) - - (.040) (.020) -
118. Total distributions (.729) (.680) (.689) (.724) (.707) (.706)
119.Redemption fees added to paid in
capital .001 .001 .002 .002 - -
120.Net asset value, end of period $ 10.810 $ 11.840 $ 11.220 $ 10.880 $ 10.730 $ 10.730
121.TOTAL RETURN (dagger) -2.73% 11.81% 9.72% 8.43% 6.89% 11.36%
122.RATIOS AND SUPPLEMENTAL DATA
123.Net assets, end of period (000 omitted)$ 385,342 $ 450,113 $ 413,748 $ 346,781 $ 251,855 $ 180,385
124.Ratio of expenses to average net assets .55%* .55% .55% .55% .62% .54%
125.Ratio of expenses to average net
assets before expense .55%* .55% .55% .60% .62% .73%
reductions
126.Ratio of net interest income to
average net assets 5.68%* 5.81% 6.21% 6.34% 6.51% 6.62%
127.Portfolio turnover rate 15%* 45% 11% 6% 18% 8%
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS
SHOWN.
FINANCIAL HIGHLIGHTS
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income), and the
effect of the fund's $5 account closeout fee. Yield measures the income
paid by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. If Fidelity had not
voluntarily reimbursed the fund for expenses during the periods shown, the
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1994 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
Spartan Connecticut Municipal
Money Market Portfolio 0.99% 2.04% 9.56%
Consumer Price Index 1.17% 2.29% 9.42%
Average Connecticut Tax-Free
Money Market Fund 0.91% 1.83% 8.38%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, six months, one year, or since the fund started on March 4,
1991. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, you would end up with $1,050. Comparing the fund's
performance to the consumer price index (CPI) helps show how your
investment did compared to inflation. To measure how the fund stacked up
against its peers, you can compare its return to the average Connecticut
tax-free money market fund's total return. This average currently reflects
the performance of 12 Connecticut tax-free money market funds tracked by
IBC/Donoghue. (The periods covered by the CPI and IBC/Donoghue numbers are
the closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1994 PAST 1 LIFE OF
YEAR FUND
Spartan Connecticut Municipal
Money Market Portfolio 2.04% 2.85%
Consumer Price Index 2.29% 2.80%
Average Connecticut Tax-Free
Money Market Fund 1.83% 2.50%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
5/31/93 8/31/93 11/30/93 2/28/94 5/31/94
Spartan Connecticut Municip 2.56% 2.14% 1.96% 2.03% 2.32%
al
Money Market Fund
Average Connecticut 2.11% 1.87% 1.81% 1.86% 2.19%
Tax-Free
Money Market Fund
Spartan Connecticut Municip 4.16% 3.49% 3.19% 3.31% 3.78%
al
Money Market Fund -
Tax-equivalent
Portion of fund's income 15.9% 5.2% 10.1% 9.4% 6.8%
subject to state taxes on last
day of period
Average All Taxable 2.62% 2.64% 2.69% 2.79% 3.51%
Money Market Fund
</TABLE>
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the average tax-free money market fund. Or you can
look at the fund's tax-equivalent yield, which is based on a combined
effective 1994 federal and Connecticut state income tax rate of 38.88% and
reflects that a portion of the fund's income was subject to state taxes. If
the adviser had not reimbursed certain portfolio expenses during the
periods shown, the yields and tax-equivalent yields would have been 2.21%,
3.59% and 1.94%, 3.17% for the periods ended May 31, 1993 and August 31
1993, respectively. The tax-equivalent figures are useful in seeing how the
fund stacked up against the average taxable money market fund as tracked by
IBC/Donoghue.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free
investments are usually lower
than yields on taxable
investments. However, a
straight comparison between
the two may be misleading
because it ignores the way
taxes reduce taxable returns.
Tax-equivalent yield - the
yield you'd have to earn on a
similar taxable investment to
match the tax-free yield -
makes the comparison more
meaningful. Keep in mind that
the U.S. government neither
insures nor guarantees a
money market fund. In fact,
there is no assurance that a
money market fund will
maintain a $1 share price.
(checkmark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr,
Portfolio Manager of Spartan
Connecticut Municipal Money
Market Portfolio
Q. SCOTT, THERE'S BEEN SOME TURMOIL IN THE MONEY MARKETS THESE PAST FEW
MONTHS. CAN YOU BRING US UP TO DATE?
A. Well, interest rates were actually pretty stable through January. Then
on February 4, 1994, the Federal Reserve raised the federal funds rate
one-quarter percent, reversing three years of actions designed to stimulate
economic growth. The Fed's move took many market participants by surprise.
At the time, the economy was improving and inflation seemed under control.
The Fed, however, was intent on controlling any inflationary trends before
they became a problem. After the initial increase, two more quarter-point
increases followed over the next two months, and finally a half-point
increase in May to 4.25%.
Q. HOW DID THAT AFFECT TAX-FREE MONEY MARKET INSTRUMENTS?
A. Initially, very little. Demand typically outpaces supply at the
beginning of the year, and that kept tax-free interest rates from rising as
fast as taxable rates. In April, the gap began to narrow, and by the end of
May the relationship between taxable and tax-free interest rates more
closely reflected the maximum tax rate.
Q. STRATEGICALLY, HOW DID YOU COPE WITH CHANGING CONDITIONS?
A. Although I, too, was surprised by the timing of the Fed's move, I had
been preparing for rising interest rates for several months. The fund's
average maturity, an aggressive 72 days at the start of the period last
November, had fallen into the mid 50s by February as the fund added
short-term variable-rate instruments. Those performed well as rates rose. I
was also helped, by all the new money that flowed into the fund during the
first quarter of the calendar year. Most of this money was invested in
shorter-term securities which further reduced the fund's average maturity.
Q. HOW DID THE FUND PERFORM?
A. On May 31, 1994, the fund's seven-day yield was 2.32%, up from 1.96% six
months ago. The latest yield is the equivalent of a 3.78% yield on a
taxable investment for Connecticut investors in the 36% federal tax
bracket. The fund's total return for the six months ended May 31 was .99%.
That beat the average total return during the same period for all
Connecticut tax-free money market funds of .91%, according to IBC/Donoghue.
Q. WHAT'S AHEAD FOR THE FUND?
A. I expect that rates will remain stable for at least the next few months.
That's because I don't believe the Fed has been trying to put the brakes on
economic growth so much as remove the stimulus of artificially low rates.
And with the half-point increase in May, that goal, for now possibly, has
now been achieved. However, if the economy keeps growing, the Fed could
decide to act again as early as this fall. With that in mind, I'll probably
aim for an average maturity within the 45-55 day range.
FUND FACTS
GOAL: tax-free income and
stability by investing in
high-quality, short-term,
Connecticut municipal securities
START DATE: March 4, 1991
SIZE: as of May 31, 1994,
more than $165 million
MANAGER: Scott Orr, since
October 1993; manager,
Fidelity
Connecticut Municipal Money
Market, since October 1993;
Fidelity Michigan Municipal
Money Market, Fidelity New
Jersey Tax-Free Money Market
and Spartan New Jersey
Money Market, since January
1992;
joined Fidelity in 1989
(checkmark)
MONEY MARKETS AND
DERIVATIVES:
The word "derivatives" covers
a wide range of financial
agreements, of varying
degrees of complexity, that
have market values based on
security or market indices. All
"derivative" securities in
Fidelity's money market funds
are designed to have the price
characteristics of typical
money market securities.
During the recent Federal
Reserve Board interest rate
increases, all Fidelity money
market holdings performed as
designed and the funds
maintained a stable share
price of $1.00.
The more complex of these
instruments, such as floating
rate notes with unusual and
complex floating rate
formulas, frequently have too
much price volatility to be
appropriate investments for
money market funds. Many of
them do not offer the degree
of price stability Fidelity
believes is required in order
for its funds to maintain a
stable $1.00 share price.
Therefore, despite their
frequent higher yields at the
time they are sold, Fidelity
has not purchased these
volatile securities. While this
may sometimes have caused
Fidelity money market funds
to have lower gross yields
than certain other funds,
Fidelity believes its investors
value prudence as well as
performance.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
5/31/94 11/30/93 5/31/93
0 - 30 61 66 71
31 - 90 26 10 19
91 - 180 12 5 5
181 - 397 1 19 5
WEIGHTED AVERAGE MATURITY
5/31/94 11/30/93 5/31/93
Spartan Connecticut
Municipal Money Market
Portfolio 41 days 72 days 38 days
Average Connecticut
Tax-Free Money Market Fun 60 days 76 days 44 days
d*
ASSET ALLOCATION
AS OF MAY 31, 1994 AS OF NOVEMBER 30, 1993
Row: 1, Col: 1, Value: 47.0
Row: 1, Col: 2, Value: 20.0
Row: 1, Col: 3, Value: 21.0
Row: 1, Col: 4, Value: 11.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 54.0
Row: 1, Col: 2, Value: 19.0
Row: 1, Col: 3, Value: 21.0
Row: 1, Col: 4, Value: 5.0
Row: 1, Col: 5, Value: 2.0
Variable rate
demand notes
(VRDNs) 47%
Commercial
paper 20%
Tender bonds 21%
Municipal
notes 11%
Other 1%
Variable rate
demand notes
(VRDNs) 54%
Commercial
paper 19%
Tender bonds 21%
Municipal
notes 5%
Other 1%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENTS MAY 31, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - 0.2%
Orange County Apt. Dev. Rfdg. Bonds
Series 1990 A, 3.50% 6/1/94, CP mode $ 341,000 $ 341,000
CONNECTICUT - 77.6%
Clipper Participating VRDN,
Series 1994-1, 2.97%, (Liquidity Enhancement
State Street Bank & Trust Co.) (c) 5,000,000 5,000,000
Connecticut Dev. Auth. (Shelton Inn Proj.)
Series 1986, 2.60%, LOC Bank of Tokyo, VRDN (b) 200,000 200,000
Connecticut Dev. Auth. Arpt. Facs. Rev.
(Arpt. Hotel Bradley Assoc. Ltd. Partnership Proj.)
2.70%, LOC Daiwa Bank, VRDN 6,500,000 6,500,000
Connecticut Dev. Auth. Health. Care Rev.:
(Corp. for Independent Living Proj.), VRDN:
Series 1990, 2.70%, LOC Cr. Commercial de France 4,800,000 4,800,000
Series 1993 A, 2.70%, LOC Daiwa Bank 2,400,000 2,400,000
Connecticut Dev. Auth. Poll. Cont. Rev.
(Light & Pwr. Co. Proj.) Series B, 3.20%,
LOC Union Bank of Switzerland, VRDN (b) 7,800,000 7,800,000
Connecticut Dev. Auth. Rev. Gen. Oblig. Bonds
Series 1993 A, 5% 11/15/94 750,000 757,729
Connecticut Dev. Auth. Solid Waste Disp. Facs. Rev., VRDN (b):
(Exeter Energy Proj.):
Series 1989 A, 2.85%, LOC Sanwa Bank 1,500,000 1,500,000
Series 1989 B, 2.85%, LOC Sanwa Bank 4,900,000 4,900,000
(Rand-Whitney Containerboard), 2.70%,
LOC Chase Manhattan Bank 3,300,000 3,300,000
Connecticut Econ. Recovery Gen. Oblig. Notes,
Series 1991 B, 2.85%,
BPA Canadian Imperial Bank, VRDN 600,000 600,000
Connecticut Econ. Recovery Notes,
Series A, 5.25% 6/15/94 1,400,000 1,401,416
Connecticut Gen. Oblig., (c):
Participating VRDN, Series PA1, 3%,
(Liquidity Enhancement Merrill Lynch & Co. Inc.) 2,000,000
2,000,000
Tender Option Bonds:
Series BT-89, 2.70%, 8/15/94 (Liquidity Enhancement
Banker's Trust Co.), MT 1,600,000 1,600,000
Series BT-130, 2.70% 8/15/94, (Liquidity
Enhancement Bankers Trust), MT 3,200,000 3,200,000
Series MGT 17A, 2.95%, (Liquidity Enhancement
Morgan Guaranty), VRDN 500,000 500,000
Connecticut Health & Ed. Facs. Auth.:
VRDN:.
(Charlotte Hungerford Hosp.) Series B, 2.70%,
LOC Mitsubishi Bank Ltd 1,800,000 1,800,000
(Kent School) Series A, 2.60%,
LOC Barclays Bank PLC 5,900,000 5,900,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Ed. Facs. Auth. - continued
CP mode:
(Windham Commty. Memorial Hosp.) Series B, 3%
6/17/94, LOC Banque Paribas $ 4,000,000 $ 4,000,000
(Yale University):
Series L, 2.65% 6/16/94 1,550,000 1,550,000
Series M:
2.70% 6/20/94 3,900,000 3,900,000
2.95% 7/12/94 2,000,000 2,000,000
Series N:
2.70% 6/20/94 1,350,000 1,350,000
2.95% 7/8/94 1,000,000 1,000,000
2.95% 7/18/94 1,100,000 1,100,000
3.05% 7/22/94 2,000,000 2,000,000
Series O:
2.70% 6/20/94 2,050,000 2,050,000
2.95% 7/12/94 1,150,000 1,150,000
Connecticut Hsg. Fin. Auth. (Hsg. Mtg. Fin. Prog.),
CP mode (b):
Series 1989 D:
2.60% 6/10/94 1,165,000 1,165,000
2.75% 6/14/94 255,000 255,000
2.80% 6/14/94 1,000,000 1,000,000
2.70% 6/15/94 2,500,000 2,500,000
3.05% 7/12/94 500,000 500,000
Series 1990 C:
2.45% 6/10/94 800,000 800,000
3.35% 8/10/94 1,000,000 1,000,000
Series 1992 D-2, 3.65% 5/15/95 2,000,000 2,000,000
Series 1993 H-1, 2.80% 11/15/94 9,800,000 9,800,000
Series 1993 H-2, 2.90% 11/15/94 4,500,000 4,500,000
Connecticut Second Lien Special Tax Oblig. Bonds
(Transport Infrastructure) Series 1, 2.95%,
LOC Industrial Bank of Japan, VRDN 5,785,000 5,785,000
Connecticut Special Assessment Unemployment Rev.
Series 1993 C, 3% 7/1/94,(FGIC Insured), MT 13,500,000 13,502,228
Connecticut Special Tax Oblig. Trans. Infrastructure
Participating VRDN, Series PA69, 3%,
(Liquidity Enhancement Merrill Lynch & Co. Inc.) (c) 2,000,000
2,000,000
Glastonbury BAN 2.30% 10/14/94 750,000 750,053
Hartford Redev. Auth. (Underwood Towers Proj.)
(FSA Insured) (Liquidity Enhancement Sumitomo
Trust & Banking Ltd.), 2.95%, VRDN 1,700,000 1,700,000
New Haven Air Right Pkg. Facs. Rev. Bonds 5.30%
12/1/94 (MBIA Insured) 435,000 440,881
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
South Central Reg. Wtr. Auth. Participating
VRDN, Series MGT-6A, 2.90%, (FGIC Insured)
(Liquidity Enhancement Morgan Guaranty) (c) $ 2,500,000 $ 2,500,000
Wethersfield BAN 2.67% 8/31/94 2,500,000 2,500,120
126,957,427
FLORIDA - 1.9%
Indian Trace Cmmty. Dev. Dist., CP mode:
(Broward County Basin I Wtr. Mgmt.):
3.50% 6/1/94, LOC Tokai Bank Ltd 1,600,000 1,600,000
3.50% 6/3/94, LOC Tokai Bank Ltd 1,500,000 1,500,000
3,100,000
PUERTO RICO - 16.8%
Puerto Rico Hwy. And Trans. Rev. Series 1993 X, 2.55%,
LOC Bank of Switzerland, VRDN 7,500,000 7,500,000
Puerto Ind. Med. Higher Ed. & Envir. Cont. Fac. Fin. Auth.
(AFICA 1988), 3% 8/16/94, CP mode 1,500,000 1,500,000
Puerto Rico Elec. Pwr. Auth. Participating VRDN, 2.625%,
(Liquidity Enhancement Bankers Trust Co.) (c) 4,060,000 4,060,000
Puerto Rico TRAN, Series A, 3% 7/29/94 14,430,000 14,438,270
27,498,270
VIRGINIA - 3.5%
Richmond Ind. Dev. Auth. (I) Rev.
(Cogentrix of Richmond Inc. Proj.) Series 1990 A, 3.40%,
LOC Banque Paribas, VRDN (b) 3,000,000 3,000,000
Richmond Ind. Dev. Auth. (II) Rev.
(Cogentrix of Richmond Inc. Proj.) Series 1991 A, 3.40%,
LOC Banque Paribas, VRDN (b) 1,700,000 1,700,000
Richmond Ind. Dev. Auth. (III) Rev.
(Cogentrix Richmond Inc. Proj.) Series 1991 B, 3.40%,
LOC Banque Paribas, VRDN (b) 1,000,000 1,000,000
5,700,000
TOTAL INVESTMENTS - 100% $ 163,596,697
Total Cost for Income Tax Purposes $ 163,596,697
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At November 30, 1993, the fund had a capital loss carryforward of
approximately $7,460 of which $40, $2,090, and $5,330 will expire on
November 30, 1999, 2000, and 2001, respectively.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MAY 31, 1994 (UNAUDITED)
128.ASSETS 129. 130.
131.Investment in securities, at value (Note 1) - See 132. $ 163,596,697
accompanying schedule
133.Cash 134. 880,359
135.Interest receivable 136. 1,165,922
137. 138.TOTAL ASSETS 139. 165,642,978
140.LIABILITIES 141. 142.
143.Payable to custodian Bank $ 230,579 144.
145.Dividends payable 3,667 146.
147.Accrued management fee 69,586 148.
149. 150.TOTAL LIABILITIES 151. 303,832
152.153.NET ASSETS 154. $ 165,339,146
155.Net Assets consist of (Note 1): 156. 157.
158.Paid in capital 159. $ 165,354,883
160.Accumulated net realized gain (loss) on 161. (15,737)
investments
162.163.NET ASSETS, for 165,354,883 shares 164. $ 165,339,146
outstanding
165.166.NET ASSET VALUE, offering price and 167. $1.00
redemption price per share ($165,339,146 (divided by)
165,354,883 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1994 (UNAUDITED)
168.169.INTEREST INCOME 170. $ 2,007,077
171.EXPENSES 172. 173.
174.Management fee (Note 4) $ 401,720 175.
176.Non-interested trustees' compensation 513 177.
178. 179.TOTAL EXPENSES 180. 402,233
181.182.NET INTEREST INCOME 183. 1,604,844
184.185.NET REALIZED GAIN (LOSS) ON INVESTMENTS 186. (8,280)
(NOTE 1)
187.188.NET INCREASE IN NET ASSETS RESULTING FROM 189. $ 1,596,564
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
MAY 31, 1994 NOVEMBER 30,
(UNAUDITED) 1993
190.INCREASE (DECREASE) IN NET ASSETS
191.Operations $ 1,604,844 $ 2,789,066
Net interest income
192. Net realized gain (loss) on investments (8,280) (5,334)
193. 1,596,564 2,783,732
194.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
195.Dividends to shareholders from net interest income (1,604,844) (2,789,066)
196.Share transactions at net asset value of $1.00 per 121,763,721 224,246,405
share
Proceeds from sales of shares
197. Reinvestment of dividends from net interest 1,551,760 2,693,169
income
198. Cost of shares redeemed (121,069,678) (150,504,642)
199. 2,245,803 76,434,932
Net increase (decrease) in net assets and shares
resulting from share transactions
200. 2,237,523 76,429,598
201.TOTAL INCREASE (DECREASE) IN NET ASSETS
202.NET ASSETS 203. 204.
205. Beginning of period 163,101,623 86,672,025
206. End of period $ 165,339,146 $ 163,101,623
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
207. SIX MONTHS YEARS ENDED NOVEMBER 30, MARCH 4, 1991
ENDED (COMMENCEME
MAY 31, 1994 NT
OF OPERATIONS) T
O
NOVEMBER 30,
208. (UNAUDITED) 1993 1992 1991
209.SELECTED PER-SHARE DATA
210.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
211.Income from Investment .010 .022 .030 .029
Operations
Net interest income
212.Less Distributions (.010) (.022) (.030) (.029)
From net interest income
213.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
214.TOTAL RETURN (dagger) 1.00% 2.21% 3.08% 2.97%
215.RATIOS AND SUPPLEMENTAL
DATA
216.Net assets, end of period $ 165,339 $ 163,102 $ 86,672 $ 22,247
(000 omitted)
217.Ratio of expenses to avera .50%* .24% .02% -
ge
net assets
218.Ratio of expenses to avera .50%* .50% .50% .50%*
ge
net assets before expense
reductions
219.Ratio of net interest incom 1.99%* 2.17% 2.90% 4.05%*
e to
average net assets
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS
SHOWN.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1994 (Unaudited)
1. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan Connecticut Municipal High Yield Portfolio (the high yield fund) is
a fund of Fidelity Court Street Trust. Spartan Connecticut Municipal Money
Market Portfolio (the money market fund) is a fund of Fidelity Court Street
Trust II. Each trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company. Fidelity Court Street Trust and Fidelity Court Street Trust II
(the trusts) are organized as a Massachusetts business trust and a Delaware
business trust, respectively. Each fund is authorized to issue an unlimited
number of shares. The following summarizes the significant accounting
policies of the money market fund and the high yield fund:
SECURITY VALUATION.
HIGH YIELD FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities for which quotations are not readily available through the
pricing service are valued at their fair value as determined in good faith
under consistently applied procedures under the general supervision of the
Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes all of its taxable income for the fiscal
year. The schedules of investments include information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to futures and options
transactions.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
The fund also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for income
tax purposes.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective December
1, 1993, the funds adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the funds changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of November 30, 1993 have been restated to reflect
an increase in paid in capital and a decrease in accumulated net realized
gain on investments of $94,330 for the high yield fund. No adjustments were
necessary for the money market fund.
REDEMPTION FEES. Shares held in the fund less than 180 days are subject to
a redemption fee equal to .50% of the proceeds of the redeemed shares. The
fee, which is retained by the fund, is accounted for as an addition to paid
in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. Each fund
may receive compensation for interest forgone in a delayed delivery
transaction. Each fund identifies securities as segregated in its custodial
records with a value at least equal to the amount of the purchase
commitment.
FUTURES CONTRACTS AND OPTIONS. The high yield fund may invest in futures
contracts and write options. These investments involve, to varying degrees,
elements of market risk and risks in excess of the amount recognized in the
Statement of Assets and Liabilities. The face or contract amounts reflect
the extent of the involvement the high yield fund has in the particular
classes of instruments. Risks may be caused by an imperfect correlation
between movements in the price of the instruments and the price of the
underlying securities and interest rates. Risks also may arise if there is
an illiquid secondary market for the instruments, or due to the inability
of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
3. PURCHASES AND SALES OF
INVESTMENTS.
HIGH YIELD FUND. Purchases and sales of securities, other than short-term
securities, aggregated $30,244,687 and $73,072,974, respectively.
The market value of futures contracts opened and closed amounted to
$171,240,500 and $169,770,543,
respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR pays all expenses
except the compensation of the non-interested Trustees and certain
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.55% and .50% of average net assets for the high yield and money market
funds, respectively.
FMR also bears the cost of providing shareholder services to each fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $4,680 and $2,187 for the high yield and
money market funds, respectively.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect, and after reducing
the fee for any payments by FMR pursuant to the fund's Distribution and
Service Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the Act, FMR or the
funds' distributor, Fidelity Distributors Corporation (FDC), an affiliate
of FMR, may use their resources to pay administrative and promotional
expenses related to the sale of each fund's shares. Subject to the approval
of each Board of Trustees, the Plans also authorize payments to third
parties that assist in the sale of each fund's shares or render shareholder
support services. FMR or FDC has informed the funds that payments made to
third parties under the Plans amounted to $1,271 for the high yield fund
and no payments were made for the money market fund for the period.
TO WRITE FIDELITY
Please locate the address that is closest to you. We'll give your
correspondence immediate attention and send you written confirmation upon
completion of your request. Please send ALL correspondence about retirement
accounts to Dallas.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 2269
Boston, MA 02107-2269
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30280
Salt Lake City, UT 84130-0280
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
Additional Payments
P.O. Box 2656
Boston, MA 02293-0656
Fidelity Investments
Additional Payments
P.O. Box 620024
Dallas, TX 75262-0024
Fidelity Investments
Additional Payments
P.O. Box 31455
Salt Lake City, UT 84131-0455
OVERNIGHT EXPRESS
Fidelity Investments
Additional Payments
World Trade Center
164 Northern Avenue
Boston, MA 02210
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02103-0878
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02101-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 620024
Dallas, TX 75262-0024
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Peter Allegrini, Vice President,
HIGH YIELD FUND
Thomas D. Maher, Assistant
Vice President, MONEY MARKET FUND
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*, MONEY MARKET FUND
Phyllis Burke Davis*, MONEY MARKET FUND
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*, MONEY MARKET FUND
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
