SPARTAN(registered trademark)
(registered trademark)
FLORIDA
MUNICIPAL
FUNDS
ANNUAL REPORT
NOVEMBER 30, 1995
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL INCOME 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 FLORIDA MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN FLORIDA 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.
REPORT OF INDEPENDENT
ACCOUNTANTS 38 The auditors' opinion.
</TABLE>
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.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was generally very
positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving
for a college education, enables you to weather these ups and downs in a
long-term fund, which has higher potential returns. An intermediate-length
fund could be appropriate if your investment horizon is two to four years,
and a short-term bond fund could be the right choice if you need your money
in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
SPARTAN FLORIDA MUNICIPAL INCOME FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL INCOME 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
securities 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, the life of fund total returns, dividends
and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal Income Fund 21.08% 40.24%
Lehman Brothers Municipal Bond 18.90% n/a
Index
Average Florida Tax-exempt
Municipal Bond Fund 20.21% n/a
Consumer Price Index 2.47% 10.27%
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period - in
this case, one year or since the fund started on March 16, 1992. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Lehman Brothers Municipal Bond
index - a broad gauge of the municipal bond market. To measure how the
fund's performance stacked up against its peers, you can compare it to the
average Florida municipal bond fund, which reflects the performance of 76
Florida tax-exempt municipal bond funds with similar objectives tracked by
Lipper Analytical Services over the past twelve-months. Both benchmarks
include reinvested dividends and capital gains, if any. Comparing the
fund's performance to the consumer price index (CPI) helps show how your
fund did compared to inflation.(The CPI returns begin on the month end
closest to the fund's start date.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal Income Fund 21.08% 9.54%
Lehman Brothers Municipal Bond 18.90% n/a
Index
Average Florida Tax-exempt
Municipal Bond Fund 20.21% n/a
Consumer Price Index 2.47% 2.70%
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
$13,962
$13,439
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Florida Municipal Income Fund on March 31, 1992, shortly after the fund
started. As the chart shows, by November 30, 1995, the value of your
investment would have grown to $13,962 - a 39.62% increase on your initial
investment. This assumes you still own the fund on November 30, 1995, 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 $13,439 - a 34.39% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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
MARCH 16, 1992
(COMMENCEME
NT
YEARS ENDED NOVEMBER 30, OF OPERATIONS)
TO
NOVEMBER 30,
1995 1994 1993 1992
Dividend returns 6.30% 5.01% 6.10% 4.74%
Capital appreciation
returns 14.78% -12.21% 7.41% 5.19%
Total returns 21.08% -7.20% 13.51% 9.93%
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
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.53(cents) 27.92(cents) 57.26(cents)
Annualized dividend rate 4.97% 5.11% 5.37%
30-day annualized yield 4.81% - -
30-day annualized tax-equivalent yield 7.52% - -
</TABLE>
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 $11.08 over
the past month, $10.90 over the past six months and $10.67 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. 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 36% 1995 federal tax bracket, but does not reflect payment of the
federal alternative minimum tax, if applicable.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
In sharp contrast to much of
1994, the municipal bond market
posted strong returns for the 12
months ended November 30,
1995. For the period, the
Lehman Brothers Municipal
Bond Index - a broad measure
of the tax-free market - had a
total return of 18.90%. By
comparison, the Lehman
Brothers Aggregate Bond Index
- - a proxy for investment-grade
taxable bonds - had a total
return of 17.64%. While the
bankruptcy of Orange County,
California, in December 1994
caused some concern among
investors, tax-free bonds
managed to surge ahead of
their taxable counterparts in the
first quarter of 1995 on signs of
a slowing economy and tamer
inflation expectations. By spring,
however, the muni bond market
began to underperform U.S.
Treasury securities when
Congress began consideration
of tax-code changes, some of
which threatened the tax-exempt
status of municipal securities. This
threat of tax reform dampened
enthusiasm in the municipal
bond market, stalling the rally and
helping shorter maturity bonds
to outperform their longer
counterparts throughout the
spring and summer months. By
early fall, historically attractive
valuations relative to
Treasuries, weakening new
issuance, and stronger demand
from insurance companies and
retail buyers helped tax-free
bonds rebound.
An interview with Maureen Newman, Portfolio Manager of Spartan
Florida Municipal Income Fund
Q. HOW DID THE FUND PERFORM, MAUREEN?
A. For the 12-month period ended November 30, 1995, the fund returned
21.08%. This beat the average Florida municipal bond fund which returned
20.21% for the same period, as tracked by Lipper Analytical Services.
Q. WHAT ARE SOME MAJOR CHANGES YOU HAVE MADE SINCE TAKING OVER THE FUND IN
OCTOBER?
A. I made some changes to the portfolio's maturity structure. First, I
swapped some long maturity bonds for shorter maturity bonds in order to
take advantage of the flatter yield curve, or the graphical representation
of the yields of various bond maturities. In other words, I was not giving
up a great amount of yield to acquire the less volatile shorter-term bonds.
I have also taken advantage of some inefficiencies in the market valuation
of bonds with different coupons and call dates to improve the portfolio's
performance.
Q. BECAUSE OF ITS LARGE ELDERLY POPULATION, FLORIDA HAS A LARGE NUMBER OF
MEDICARE RECIPIENTS RELATIVE TO THE REST OF THE COUNTRY. DO YOU THINK THIS
WILL HAVE AN IMPACT ON THE STATE'S HOSPITALS GIVEN THE MEDICARE/MEDICAID
REFORM DEBATE IN WASHINGTON?
A. Absolutely. There is a great amount of long-term uncertainty with
Florida hospitals because they depend so heavily on Medicare. In addition
to Medicare cutbacks, Florida hospitals are contending with an increasingly
competitive HMO environment which is putting pressure on hospital revenues.
I believe that because Florida hospitals have been able to adapt to
significant Medicare changes in the past, they may adapt well to the
changes that are ahead. We carefully assess cost-cutting efforts,
competitive position and management expertise for each of our health care
holdings to determine their ability to thrive in the changing health care
environment.
Q. SO THE FUND'S HEALTH CARE ALLOCATION IS BASICALLY THE SAME AS SIX MONTHS
AGO?
A. Not really. Since I took over as manager, I have taken advantage of some
profitable situations. For example, I sold some tax-exempt bonds issued for
Beverly Enterprises - a corporate entity that operates nursing homes - at a
profit for the fund. However, the fund still has about 17% of its assets in
health care, about half of which is insured by a municipal bond insurance
company.
Q. WERE THERE ANY DISAPPOINTING AREAS THIS YEAR IN THE FLORIDA MUNICIPAL
BOND MARKET?
A. Florida's housing bonds did not perform very well. Historically, these
bonds have lagged in declining interest-rate environments because of
prepayment fears. Like mortgage-backed securities in the taxable bond
market, investors fear that the mortgages underlying housing bonds will be
refinanced - resulting in early calls of the bond and thus forcing the
housing bond investors to reinvest at lower rates. At the end of the
period, the fund had 3% of its assets in housing bonds.
Q. DO YOU THINK THE POSSIBLE DEREGULATION OF UTILITIES ACROSS THE COUNTRY
WILL AFFECT FLORIDA'S UTILITIES?
A. The competition caused by possible deregulation of utility monopolies
nationwide obviously has a negative side because of their loss of pricing
power. On the other hand, it creates many opportunities for those companies
that are prepared to compete. I believe tax-exempt electric utilities in
Florida will be competitive. I intend to target organizations with low
costs, efficient operations and strong managements such as Jacksonville
Electric and Orlando Utilities Commission. I believe their strong utilities
are likely to provide good return opportunities for the fund.
Q. THE FUND HAS A 46% POSITION IN BONDS BACKED BY MUNICIPAL INSURANCE
ORGANIZATIONS. WHY DOES THE FUND HAVE SO MANY INSURED BONDS?
A. Bond insurance involves the promise of an insurer such as AMBAC or MBIA
to pay interest and principal on a block of bonds should the issuer
experience payment problems. While bond insurance affords a bond a AAA
rating from the municipal rating agencies, it does not protect against
declines in their market value. That said, the large presence of insured
bonds in the Florida market has to do with supply and demand. On the supply
side, there are many high-quality issuers in Florida that qualify for bond
insurance. Also, many individuals in Florida buy bonds directly and prefer
bond insurance. Issuers, therefore, have been insuring their bonds to meet
that demand.
Q. WHAT'S YOUR OUTLOOK?
A. I expect tax-reform discussions to cause further volatility in the
market as we head into the presidential election year. I also expect the
supply of municipal bonds to continue to be light. With the budget
situation in Washington still a question mark and yields at historically
low levels, I don't think investors can expect the same price appreciation
municipal bonds enjoyed in 1995.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER,
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to provide high current
tax-free income and
exemption from the Florida
intangible tax by investing
mainly in longer-term,
investment-grade municipal
securities whose interest is
free from federal income tax
START DATE: March 16, 1992
SIZE: as of November 30,
1995, more than $395 million
MANAGER: Maureen Newman,
since October 1, 1995;
manager, Spartan New
Jersey Municipal Income
Fund, since October 1995;
manager, Michigan Tax-Free
High Yield Portfolio, Spartan
Connecticut Municipal
Income Fund, since 1994;
Spartan Aggressive Municipal
Income Portfolio, Spartan
Arizona Municipal Fund,
1994 to 1995; bond analyst,
1985 to 1994; joined Fidelity
in 1985
(checkmark)
MAUREEN NEWMAN ON HER
INVESTMENT STYLE:
"I have a bottom-up approach
to investing. I start with
fundamental research to
understand each issuer in the
portfolio and to gauge the
likelihood of outperformance.
I then work with our
quantitative research analysts
and bond traders to uncover
bonds that offer strong
relative value. Our
quantitative research group
has developed a variety of
computer models that assist
in evaluating trading
opportunities and in achieving
a better understanding of the
total return characteristics of
the portfolios. I plan to keep
the fund's duration - or its
price sensitivity to changes in
interest rates - similar to that
of the Florida municipal bond
market as represented by the
Lehman Brothers Florida
index. Therefore, I will be able
to focus on adding value on a
issuer-by-issuer basis."
(solid bullet) On October 1, 1995,
Maureen Newman took over
management of the fund from
Anne Punzak.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO)
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF NOVEMBER 30, 1995
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
Health Care 17.8 18.3
Transporation 16.3 13.1
Electric Revenue 14.4 15.6
Water & Sewer 10.5 9.5
Escrowed/Prerefunded 10.0 6.1
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1995
6 MONTHS AGO
Years 15.3 17.0
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF NOVEMBER 30, 1995
6 MONTHS AGO
Years 7.9 8.2
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THE ABOVE EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1995 AS OF MAY 31, 1995
Aaa 55.6%
Aa, A 17.1%
Baa 18.9%
Ba, B 0.0%
Non-rated 3.6%
Short-term
investments 4.8%
Aaa 43.3%
Aa, A 21.1%
Baa 23.4%
Ba, B 0.0%
Non-rated 6.9%
Short-term
investments 5.3%
Row: 1, Col: 1, Value: 55.6
Row: 1, Col: 2, Value: 17.1
Row: 1, Col: 3, Value: 18.9
Row: 1, Col: 4, Value: 3.6
Row: 1, Col: 5, Value: 4.8
Row: 1, Col: 6, Value: 1.0
Row: 1, Col: 1, Value: 43.3
Row: 1, Col: 2, Value: 21.1
Row: 1, Col: 3, Value: 23.4
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 6.9
Row: 1, Col: 6, Value: 5.3
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW ACCOUNT FOR 0.0% AND 3.1% OF THE FUND'S
INVESTMENTS AT NOVEMBER 30, 1995 AND MAY 31, 1995, RESPECTIVELY.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO)
INVESTMENTS NOVEMBER 30, 1995
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 95.2%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - 90.0%
Alachua County Health Facs. Auth. Health Facs.
Rev. (Santa Fe Health Care Facs. Proj.):
Rfdg. 6% 11/15/09 Baa1 $ 2,950,000 $ 2,972,125
Rfdg. 6.05% 11/15/16 Baa1 5,590,000 5,583,013
7.60% 11/15/13 Baa1 1,000,000 1,090,000
Bay County Ind. Dev. Correctional Facs. Rev.
(Corrections Corp. America Proj.)
Series A, 8.875% 11/1/05 (b) - 2,385,000 2,493,756
Brevard County Sales Tax Rev. Rfdg. & Impt.
5.25% 12/1/13 (FGIC Insured) Aaa 1,100,000 1,083,500
Brevard County Util. Rev. Rfdg. 5.25% 3/1/14
(AMBAC Insured) Aaa 2,500,000 2,450,000
Broward County Hsg. & Fin. Auth. Single-Family
Mtg. Rev. 6.65% 8/1/21
(GNMA/FNMA Coll.) Aaa 2,000,000 2,062,500
Broward County Resources Recovery Rev. (SES
Broward Co. LP South Proj.) 7.95% 12/1/08 A 11,080,000 12,409,600
Broward County Special Oblig.:
5.50% 1/1/04 (AMBAC Insured) Aaa 2,320,000 2,444,700
5.50% 1/1/05 (AMBAC Insured) Aaa 2,585,000 2,727,174
5% 1/1/10 (AMBAC Insured) Aaa 1,500,000 1,470,000
Broward County Wtr. & Swr. Util. Rev. Rfdg.
5.125% 10/1/15 (AMBAC Insured) Aaa 2,500,000 2,409,375
Cocoa Wtr. & Swr. Rev. Impt. Series B, 5.125%
10/1/13 (AMBAC Insured) Aaa 1,245,000 1,209,205
Dade County Aviation Rev. Rfdg. Series E, 6%
10/1/09 (AMBAC Insured) Aaa 3,000,000 3,288,750
Dade County Gtd. Entitlement Rev. Rfdg.
Series B, 0% 2/1/02 (MBIA Insured) Aaa 1,810,000 1,357,500
Dade County Pub. Facs. Rev. Rfdg.
(Jackson Mem. Hosp.) Series A, 4.75%
6/1/10 (MBIA Insured) Aaa 3,540,000 3,327,600
Dade County Rev. 5.125% 4/1/09
(MBIA Insured) Aaa 1,475,000 1,476,843
Dade County Seaport Rev.:
6.20% 10/1/09 (MBIA Insured) Aaa 1,845,000 2,020,275
6.20% 10/1/10 (MBIA Insured) Aaa 1,325,000 1,450,875
5.75% 10/1/15 (MBIA Insured) Aaa 5,100,000 5,221,124
Dade County Wtr. & Swr. Sys. Rev.:
6.25% 10/1/06 (FGIC Insured) Aaa 1,500,000 1,676,250
6.25% 10/1/08 (FGIC Insured) Aaa 1,100,000 1,225,124
5.50% 10/1/18 (FGIC Insured) Aaa 1,000,000 998,750
5.50% 10/1/25 (FGIC Insured) Aaa 5,000,000 4,962,500
Dunedin Hosp. Rev. (Mease Health Care)
5.25% 11/15/06 (MBIA Insured) Aaa 1,400,000 1,445,500
Dunedin Util Sys. Rev. Rfdg. 6.25% 10/1/11
(FGIC Insured) Aaa 1,360,000 1,513,000
Duval County Hsg. Fin. Auth. Single Family Mtg. Rev.:
Series C, 7.70% 9/1/24 (FGIC Insured)
(GNMA Coll.) Aaa 725,000 779,375
5.80% 12/1/19 (GNMA Coll.) (b) Aaa 1,000,000 988,750
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Escambia County Health Facs. Auth. Rev.:
Rfdg. (Baptist Hosp. Inc.) Series B, 6% 10/1/1 BBB+ $ 2,825,000 $
2,775,563
(Baptist Hosp. & Baptist Manor) 6.75%
10/1/14 BBB+ 3,250,000 3,408,438
Escambia County Poll. Cont. Rev.:
Rfdg. (Gulf Pwr. Co. Proj.) 6.75% 3/1/22 A1 2,000,000 2,067,500
(Champion Int'l. Corp. Proj.) 6.90%
8/1/22 (b) Baa1 5,000,000 5,350,000
Escambia County Utils. Auth. Util. Sys. Rev.
Series B, 6.25% (FGIC Insured) Aaa 1,500,000 1,655,625
Florida Board of Ed. Admin. Cap. 5.40%
6/1/06 Aa 2,500,000 2,609,375
Florida Board Ed. Admin. Cap. Outlay
Rfdg. (Pub. Ed.):
Series A:
5% 6/1/24 Aa 5,000,000 4,637,500
5% 6/1/09 Aa 1,000,000 982,500
Unltd. Tax (Pub. Ed.) Series D, 5% 6/1/15 Aa 1,250,000 1,189,063
Florida Div. Board Fin Dept. Gen. Svcs. Rev.
(Dept. of Natural Resources):
Series 2000 A:
6.75% 7/1/08 (AMBAC Insured) Aaa 1,350,000 1,517,063
5.70% 7/1/09 (AMBAC Insured) Aaa 3,000,000 3,150,000
Florida Gen. Oblig. (Jacksonville Trans.)
6.40% 7/1/22 Aa 1,100,000 1,175,625
Florida Hsg. Fin. Agcy. Single-Family Mtg. Rfdg.:
Series A:
6.35% 7/1/14 Aa1 1,450,000 1,518,875
6.55% 7/1/14 Aa1 2,000,000 2,110,000
Series B, 6.55% 7/1/17 (b) Aa1 1,455,000 1,525,931
5.10% 4/1/13 A+ 2,500,000 2,500,000
Florida Mid-Bay Bridge Auth. Rev.:
Series A:
7.50% 10/1/17 (f) - 1,700,000 1,893,375
6.875% 10/1/22 (e) - 3,000,000 3,525,000
Florida Muni. Pwr. Agcy. Rev.:
Rfdg. (All Requirement Pwr. Supply) 6.25%
10/1/19 (AMBAC Insured) (e) Aaa 2,340,000 2,609,100
(Stanton II Proj.) 6.50% 10/1/20
(AMBAC Insured) (Pre-Refunded
to 10/1/02 @ 102) (e) Aaa 1,000,000 1,137,500
Florida State Tpk. Auth. Rev. (Dept. Transn.)
Series A, 5.50% 7/1/06 (AMBAC Insured) Aaa 3,000,000 3,142,500
Florida State Tpk. Auth. Tpk. Rev.:
Series A:
5.50% 7/1/05 (AMBAC Insured) Aaa 3,250,000 3,428,750
6.25% 7/1/09 (FGIC Insured) Aaa 2,325,000 2,490,656
7.20% 7/1/11 (AMBAC Insured)
(Pre-Refunded to 7/1/01 @ 102) (e) Aaa 1,500,000 1,736,250
6.35% 7/1/22 (FGIC Insured) (e) Aaa 4,255,000 4,754,963
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida State Tpk. Auth. Tpk. Rev. - continued
Rfdg. Series A:
5.25% 7/1/11 (FGIC Insured) Aaa $ 4,750,000 $ 4,744,063
5% 7/1/16 (FGIC Insured) Aaa 4,000,000 3,795,000
5% 7/1/19 (FGIC Insured) Aaa 4,000,000 3,780,000
Greater Orlando Aviation Auth. Aprt. Facs. Rev.
Series A, 6.50% 10/1/05 (FGIC Insured) (b) Aaa 3,550,000 3,944,938
Hillsborough County Aviation Auth. Rev. Rfdg.
(Tampa Int'l. Aprt.) Series A, 6.90%
10/1/11 (FGIC Insured) Aaa 4,250,000 4,616,563
Hillsborough County Port. Auth. Dist. Rev. Spl.
Rfdg. Rev. (Tampa Port Auth.):
6.50% 6/1/03 (FSA Insured) Aaa 2,000,000 2,227,500
6.50% 6/1/05 (FSA Insured) Aaa 2,000,000 2,242,500
Hillsborough County Util. Rev. Rfdg.
(Cap. Appreciation) Series A:
0% 8/1/05 (MBIA Insured) Aaa 8,000,000 5,000,000
0% 8/1/06 Aaa 10,000,000 5,887,500
0% 8/1/07 Aaa 7,000,000 3,885,000
Indian River County Wtr. & Swr. Rev. Rfdg.
Series A, 5.50% 9/1/11 (FGIC Insured) Aaa 2,000,000 2,055,000
Jacksonville Cap. Impt. Rev. Ctfs. (Gator Bowl Proj.):
5.50% 10/1/14 (AMBAC Insured) Aaa 2,000,000 2,015,000
5.50% 10/1/19 (AMBAC Insured) Aaa 2,000,000 2,000,000
Jacksonville Elec. Auth. Rev.:
Rfdg. (Bulk Pwr.-Scherer 4 Proj. A)
5.20% 10/1/11 Aa1 4,000,000 3,920,000
(Bulk Pwr. Supply-Scherer) 6.75% 10/1/21
(Pre-Refunded to 10/1/00 @ 101.5) (e) Aaa 1,000,000 1,122,500
(St. Johns River Pwr.) Series 5, 7%
10/1/09 Aa1 2,490,000 2,751,450
Jacksonville Excise Tax Rev.:
Rfdg. 6.25% 10/1/05 (AMBAC Insured) Aaa 2,000,000 2,205,000
Series A, 6.50% 10/1/11 (AMBAC Insured) Aaa 1,200,000 1,284,000
Jacksonville Health Facs. Auth. Hosp. Rev.
(Baptist Med. Ctr.) Series A, 7.30%
6/1/19 (MBIA Insured) Aaa 500,000 547,500
Jacksonville Health Facs. Auth. Indl. Dev. Rev.:
(Cypress Village Proj.) (Nat'l. Benevolent Assoc.):
Rfdg. 7% 12/1/22 Baa1 2,000,000 2,075,000
7% 12/1/14 Baa1 1,000,000 1,046,250
6.25% 12/1/23 Baa1 2,710,000 2,584,663
8% 12/1/24 Baa1 2,740,000 3,061,950
Jacksonville Ind. Dev. Rev. Rfdg.
(Cargill, Inc. Proj.) 6.40% 3/1/11 AA- 1,250,000 1,337,500
Jacksonville Sales Tax Rev.
(River City Rennaissance Proj.):
6% 10/1/04 (FGIC Insured) Aaa 3,430,000 3,794,438
6.50% 10/1/14 (FGIC Insured) Aaa 1,900,000 1,935,625
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Jacksonville Wtr. & Swr. Gen. Waterwks Dev. Rev.
(Jacksonville Suburban Utils.) 6.75%
6/1/22 (b) A2 $ 1,915,000 $ 2,075,381
Key West Util. Board Elec. Rev. Rfdg. 0%
10/1/14 (AMBAC Insured) Aaa 6,755,000 2,414,913
Lakeland Elec. & Wtr. Rev.:
0% 10/1/09 (FGIC Insured) Aaa 2,840,000 1,352,550
Rfdg. (Jr. Sub. Lien) (d):
6.25% 10/1/02 (FGIC Insured) Aaa 5,180,000 5,626,775
6.50% 10/1/06 (FGIC Insured) Aaa 1,000,000 1,111,250
6.50% 10/1/07 (FGIC Insured) Aaa 4,095,000 4,545,450
Leesburg Hosp. Rev. Rfdg.
(Leesburg Regl. Med. Ctr. Proj.):
Series B:
5.625% 7/1/13 Baa1 2,795,000 2,658,744
5.70% 7/1/18 Baa1 3,140,000 2,979,075
Leon County Rev. Rfdg.
5.50% 10/1/07 (MBIA Insured) Aaa 1,000,000 1,065,000
Martin County Ind. Dev. Auth. Rev. Rfdg.
(Indiantown Cogeneration Proj.):
Series A, 7.875% 12/15/25 Baa3 8,000,000 9,140,000
Series B, 8.05% 12/15/25 (b) Baa3 2,500,000 2,884,375
Melbourne Arpt. Rev. Rfdg. (d):
5.75% 10/1/97 (MBIA Insured) Aaa 190,000 194,275
5.75% 10/1/98 (MBIA Insured) Aaa 205,000 211,663
5.75% 10/1/99 (MBIA Insured) Aaa 215,000 223,869
6.25% 10/1/00 (MBIA Insured) Aaa 230,000 246,100
6.25% 10/1/01 (MBIA Insured) Aaa 240,000 258,600
6.255 10/1/02 (MBIA Insured) Aaa 260,000 281,775
6.25% 10/1/03 (MBIA Insured) Aaa 270,000 293,625
6.50% 10/1/04 (MBIA Insured) Aaa 290,000 320,813
6.50% 10/1/05 (MBIA Insured) Aaa 310,000 343,325
6.50% 10/1/06 (MBIA Insured) Aaa 325,000 359,938
6.75% 10/1/07 (MBIA Insured) Aaa 350,000 394,625
6.75% 10/1/08 (MBIA Insured) Aaa 375,000 421,875
6.75% 10/1/09 (MBIA Insured) Aaa 400,000 448,500
6.75% 10/1/10 (MBIA Insured) Aaa 425,000 477,063
Naples Hosp. Rev. Rfdg. (Community Hosp. Proj. Inc.):
5.10% 10/1/07 (MBIA Insured) Aaa 1,500,000 1,513,125
5% 10/1/19 (MBIA Insured) Aaa 1,000,000 935,000
Nassau County Poll. Cont. Rev. Rfdg.
(ITT Rayonier Proj.):
7.65% 6/1/06 Baa2 1,415,000 1,540,581
6.25% 6/1/10 Baa2 2,500,000 2,581,250
North Broward Hosp. Dist. Rev. Rfdg. 6.40%
1/1/06 (MBIA Insured) Aaa 950,000 1,046,188
North Miami Edl. Facs. Rev. (Johnson & Wales
Univ. Proj.) Series A, 6.125% 4/1/20 - 6,605,000 6,596,744
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Orange County Health Facs. Auth. Hosp. Rev.
(Adventist Health Sys.) 5.75% 11/15/05
(AMBAC Insured) Aaa $ 2,000,000 $ 2,167,500
Orange County Hsg. Fin. Auth. Mtg. Rev.
Series A, 7.875% 9/1/10 (GNMA Coll.) (b) AAA 145,000 151,887
Orange County Hsg. Fin. Auth. Single-Family
Mtg. Rev. (Mtg. Bkd. Secs. Proj.) 6.40%
10/1/14 (GNMA/FNMA Coll.) AAA 2,000,000 2,062,500
Orange County Sales Tax Rev. Series B,
5.375% 1/1/24 A1 1,000,000 978,750
Orange County Tourist Dev. Tax Rev. Rfdg.:
Series A:
5.75% 10/1/07 (MBIA Insured) Aaa 3,620,000 3,923,174
5.85% 10/1/08 (MBIA Insured) Aaa 1,795,000 1,952,062
5.90% 10/1/09 (MBIA Insured) Aaa 1,250,000 1,359,374
5.90% 10/1/10 (MBIA Insured) Aaa 1,000,000 1,081,249
Orlando & Orange County Expwy. Auth.
Expwy. Rev.:
Rfdg. Sr. Lien 5.25% 7/1/14
(AMBAC Insured) Aaa 4,000,000 3,915,000
7.50% 7/1/16 (e) Aaa 2,155,000 2,244,950
7.25% 7/1/14 (e) Aaa 13,250,000 13,784,372
Orlando Util. Commission Wtr. & Elec. Rev.:
Rfdg. 6% 10/1/10 Aa1 1,405,000 1,526,180
Rfdg. Sub-Series D, 6.75% 10/1/17 Aa 7,000,000 8,242,500
Sub-Series A, 6.50% 10/1/20 (Pre-Refunded to
10/1/10 @ 102) (e) Aaa 6,055,000 6,827,012
5% 10/1/23 Aa1 2,000,000 1,855,000
Orlando Wtr. & Elec. Rev. 5.538% 10/31/13 Aa 9,400,000 9,447,000
Osceola County School Board Ctfs. of Partnership
Series A, 5.25% 6/1/15 (AMBAC Insured) Aaa 3,750,000 3,684,374
Palm Beach County Solid Waste Auth. Rev.
8.625% 7/1/04 A 1,500,000 1,635,000
Palm Beach County Wtr. & Swr. Rev. 5.50%
10/1/06 (MBIA Insured) Aaa 1,500,000 1,580,625
Pinellas Park Pub. Impt. Rev. Rfdg. Series A,
5% 10/1/13 (FGIC Insured) Aaa 1,000,000 960,000
Plantation Health Facs. Auth. Rev.
(Covenant Retirement Communities Inc.),
7.75% 12/1/22 BBB+ 2,500,000 2,706,250
Polk County Ind. Dev. Auth. Ind. Dev. Rev.
(Winter Haven Hosp.) Series 2, 6.25%
9/1/15, (MBIA Insured) Aaa 1,500,000 1,591,875
Reedy Creek Util. Rev. 6.50% 10/1/16
(Pre-Refunded to 10/1/01 @101)
(MBIA Insured) (e) Aaa 1,350,000 1,512,000
St. Johns County Ind. Dev. Auth. Hosp. Rev.
(Flagler Hosp. Proj.) 6% 8/1/22 A 2,000,000 1,995,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
St. Lucie County Solid Waste Disp. Rev.
(Florida Pwr. & Lt. Co. Proj.) 6.70%
5/1/27 (b) A1 $ 1,050,000 $ 1,124,813
Sarasota Wtr. & Swr. Util. Rev. Rfdg. (d):
5.25% 10/1/00 (FGIC Insured) Aaa 1,150,000 1,183,063
6.25% 10/1/04 (FGIC Insured) Aaa 1,450,000 1,585,938
6.25% 10/1/07 (FGIC Insured) Aaa 1,735,000 1,895,488
Seminole County Wtr. & Swr. Rev. Rfdg. & Impt.:
6% 10/1/12 (MBIA Insured) Aaa 1,500,000 1,623,750
6% 10/1/09 (MBIA Insured) Aaa 1,500,000 1,636,875
South Miami Health Facs. Auth. Hosp. Rev.
5.50% 10/1/05 (MBIA Insured) Aaa 1,980,000 2,054,250
Sumter County School Dist. Rev.
(Multi-Dist. Loan Prog.) 7.15% 11/1/15,
(Cap. Guaranty Insured) Aaa 1,000,000 1,221,250
Sunshine St. Governmental Fing. Commn. Rev.
Series A, 5.50% 10/1/05
(FGIC Insured) Aaa 1,000,000 1,056,250
Tampa Rev. (Allegheny Health Sys. - St. Joseph):
6.70% 12/1/07 (MBIA Insured) Aaa 2,535,000 2,820,188
6.75% 12/1/17 (MBIA Insured) Aaa 150,000 165,375
Tampa Wtr. & Swr. Rev. Rfdg:
Series A, 5% 10/1/14 (FGIC Insured) Aaa 1,830,000 1,738,500
Series B, 5% 10/1/14 (FGIC Insured) Aaa 1,000,000 950,000
Tarpon Springs Health Facs. Auth. Hosp. Rev.
(Helen Ellis Mem. Hosp. Proj.):
7.50% 5/1/11 BBB- 1,225,000 1,284,719
7.625% 5/1/21 BBB- 4,245,000 4,457,250
365,411,046
PUERTO RICO - 3.1%
Puerto Rico Commonwealth Aqueduct & Swr.
Auth. Rev. Series A, 7.875% 7/1/17 Baa 2,500,000 2,771,875
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Rev. Series T, 6.625% 7/1/18 Baa1 4,000,000 4,280,000
Puerto Rico Commonwealth Infrastructuring Fing.
Auth. Spl. Series A, 7.50% 7/1/09 Baa1 1,000,000 1,090,000
Puerto Rico Elec. Pwr. Auth. Rev. Rfdg. Series W,
6.50% 7/1/05 (MBIA Insured) Aaa 3,000,000 3,390,000
Puerto Rico Pub. Bldgs. Auth. Guaranteed Pub.
Ed. & Health Facs. Series L, 6.875%
7/1/21 (Pre-Refunded to 7/1/02 @
101.5) (e) Aaa 1,000,000 1,157,500
12,689,375
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
GUAM - 2.1%
Guam Arpt. Auth. Gen. Rev.:
Series A, 6.60% 10/1/10 (b) BBB $ 1,500,000 $ 1,518,750
Series B, 6.40% 10/1/05 (b) BBB 3,750,000 3,810,938
Guam Pwr. Auth. Rev. Series A:
5.25% 10/1/13 BBB 1,250,000 1,134,375
6.30% 10/1/22 BBB 1,900,000 1,916,625
8,380,688
TOTAL MUNICIPAL BONDS
(Cost $368,400,750) 386,481,109
MUNICIPAL NOTES (A) - 4.8%
FLORIDA - 4.8%
Dade County Health Facs. Auth. Hosp. Rev.
(Miami Children's Hosp. Proj.) Series 1990,
4%, LOC Barnett Bank, VRDN VMIG 1 7,900,000 7,900,000
Dade County Ind. Dev. Auth. Ind. Dev. Rev.
(Dolphins Stadium Proj.) Series 1985 B, 4%,
LOC Hong Kong & Shanghai Banking Corp.,
VRDN VMIG 1 3,700,000 3,700,000
Hialeah Hosp. Rev. Rfdg. Class B,
(Hialeah Hosp. Inc. Proj.) 3.90% 2/1/14,
LOC Bank Of Montreal,
VRDN VMIG 1 3,790,000 3,790,000
Miami TAN 4.50% MIG 1 2,000,000 2,016,840
Pinellas County Health Facs. Auth.
(Pooled Hosp. Loan Prog.)) 3.80%,
LOC Chemical Bank, VRDN VMIG 1 2,200,000 2,200,000
TOTAL MUNICIPAL NOTES
(Cost $19,606,840) 19,606,840
TOTAL INVESTMENTS - 100%
(Cost $388,007,590) $ 406,087,949
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASE
25 U.S. Treasury Bond Futures December 1995 $ 2,985,156 $ 32,586
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.7%
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.
(c) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(d) Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
(e) Security collateralized by an amount sufficient to pay interest and
principal.
(f) A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $556,875.
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 71.2% AAA, AA, A 69.8%
Baa 13.2% BBB 15.5%
Ba 0.0% BB 0.0%
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 3.6%. FMR has
determined that unrated debt securities that are lower quality account for
0.0% 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 17.8%
Transporation 16.3
Electric Revenue 14.4
Water and Sewer 10.5
Escrowed/Prerefunded 10.0
Others
(individually less than 10%) 31.0
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1995, the aggregate cost of investment securities for
income tax purposes was $388,007,590. Net unrealized appreciation
aggregated $18,080,359, of which $18,543,813 related to appreciated
investment securities and $463,454 related to depreciated investment
securities.
At November 30, 1995, the fund had a capital loss carryforward of
approximately $3,910,000 of which $1,972,000 and $1,938,000 will expire on
November 30, 2002 and 2003, respectively.
At November 30, 1995, the fund was required to defer $310,225 of losses on
futures contracts.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO)
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
1.ASSETS 2. 3.
4.Invest 5. $ 406,087,949
ment in
securiti
es, at
value
(cost
$388,0
07,590)
- -
See
accom
panyin
g
schedu
le
6.Receiv 7. 5,580,474
able for
invest
ments
sold
8.Interes 9. 6,049,551
t
receiva
ble
10.Recei 11. 22,656
vable
for
daily
variatio
n on
futures
contrac
ts
12. 13.T 14. 417,740,630
OTAL
ASSETS
15.LIABIL 16. 17.
ITIES
18.Paya $ 11,043 19.
ble to
custodi
an
bank
Payable for 1,457,367
investme
nts
purchas
ed
Regular
delivery
Delayed 19,501,104
delivery
20.Paya 27,629 21.
ble for
fund
shares
redeem
ed
22.Distri 576,916 23.
butions
payabl
e
24.Accru 175,960 25.
ed
manag
ement
fee
26. 27.T 28. 21,750,019
OTAL
LIABILITI
ES
29.30.N 31. $ 395,990,611
ET
ASSETS
32.Net 33. 34.
Assets
consist
of:
35.Paid 36. $ 382,138,489
in
capital
37.Accu 38. (4,260,823)
mulate
d
undistri
buted
net
realize
d gain
(loss)
on
invest
ments
39.Net 40. 18,112,945
unreali
zed
appreci
ation
(depre
ciation)
on
invest
ments
41.42.N 43. $ 395,990,611
ET
ASSETS
, for
35,423,
977
shares
outstan
ding
44.45.N 46. $11.18
ET
ASSET
VALUE,
offering
price
and
redemp
tion
price
per
share
($395,9
90,611
(divided by)
35,423,
977
shares)
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1995
47.48.IN 49. $ 21,748,264
TEREST
INCOME
50.EXPE 51. 52.
NSES
53.Mana $ 2,019,366 54.
gement
fee
55.Non-i 1,608 56.
nterest
ed
trustee
s'
compe
nsation
57. 58.T 59. 2,020,974
OTAL
EXPEN
SES
60.61.N 62. 19,727,290
ET
INTERES
T
INCOM
E
63.REALI 65. 66.
ZED AND
UNREALIZ
ED GAIN
(LOSS)
64.Net
realize
d gain
(loss)
on:
67. Inves (1,119,436) 68.
tment
securiti
es
69. Futur (1,023,381) (2,142,817)
es
contrac
ts
70.Chan 71. 72.
ge in
net
unreali
zed
appreci
ation
(depre
ciation)
on:
73. Inves 51,347,687 74.
tment
securiti
es
75. Futur 71,397 51,419,084
es
contrac
ts
76.77.N 78. 49,276,267
ET GAIN
(LOSS)
79.80.N 81. $ 69,003,557
ET
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
RESULTI
NG
FROM
OPERATI
ONS
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED NOVEMBER 30,
1995 1994
82.INCRE
ASE
(DECREAS
E) IN NET
ASSETS
83.Oper $ 19,727,290 $ 22,142,396
ations
Net
interest
income
84. Net (2,142,817) (1,846,988)
realize
d gain
(loss)
85. Chan 51,419,084 (49,908,428)
ge in
net
unrealiz
ed
appreci
ation
(deprec
iation)
86. 69,003,557 (29,613,020)
87.N
ET
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
OPER
ATION
S
88.Distri (19,727,290) (22,142,396)
butions
to
shareh
olders
From
net
interest
income
89. From - (7,685,399)
net
realize
d gain
90. 91.T (19,727,290) (29,827,795)
OTAL
DISTRIB
UTIONS
92.Share 78,744,845 113,687,492
transac
tions
Net
procee
ds from
sales
of
shares
93. Rein 12,331,494 19,685,122
vestme
nt of
distribu
tions
94. Cost (79,953,207) (166,831,473)
of
shares
redeem
ed
95. Rede 40,228 83,694
mption
fees
96.97. 11,163,360 (33,375,165)
NET
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
SHAR
E
TRANS
ACTIO
NS
98. 60,439,627 (92,815,980)
99.TOT
AL
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
100.NET 101. 102.
ASSETS
103. Be 335,550,984 428,366,964
ginning
of
period
104. En $ 395,990,611 $ 335,550,984
d of
period
105.OTH 107. 108.
ER
INFORMATI
ON
106.Sha
res
109. Sol 7,475,522 10,546,906
d
110. Iss 1,152,868 1,829,088
ued in
reinves
tment
of
distribu
tions
111. Re (7,660,480) (15,871,258)
deeme
d
112. Ne 967,910 (3,495,264)
t
increas
e
(decre
ase)
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30, MARCH 16, 1992
(COMMENCEME
NT
OF OPERATIONS) T
O
NOVEMBER 30,
1995 1994 D 1993 1992
113.SELE
CTED
PER-SH
ARE
DATA
114.Net $ 9.740 $ 11.290 $ 10.520 $ 10.000
asset
value,
beginni
ng of
period
115.Inco .573 .587 .615 .459
me
from
Invest
ment
Operati
ons
Net
interest
income
116. Ne 1.439 (1.352) .777 .514
t
realize
d and
unreali
zed
gain
(loss)
117. Tot 2.012 (.765) 1.392 .973
al from
invest
ment
operati
ons
118.Les (.573) (.587) (.615) (.459)
s
Distrib
utions
From
net
interest
income
119. Fro - (.200) (.010) -
m net
realize
d gain
120. Tot (.573) (.787) (.625) (.459)
al
distribu
tions
121.Red .001 .002 .003 .006
emptio
n fees
added
to paid
in
capital
122.Net $ 11.180 $ 9.740 $ 11.290 $ 10.520
asset
value,
end of
period
123.TOT 21.09 (7.19) 13.52% 9.94%
AL % %
RETURN
B
124.RATI
OS AND
SUPPLE
MENTAL
DATA
125.Net $ 395,991 $ 335,551 $ 428,367 $ 237,109
assets,
end of
period
(000
omitted
)
126.Rati .55 .54% .25% .03%A
o of % C C C
expens
es to
averag
e
net
assets
127.Rati 5.37 5.49% 5.52% 6.25%A
o of net %
interest
income
to
averag
e net
assets
128.Port 65 49% 50% 38%A
folio %
turnove
r rate
A ANNUALIZED
B 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.
C FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
D EFFECTIVE DECEMBER 1, 1993, THE FUND 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, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN FLORIDA 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
reimbursed the fund for certain expenses, the life of fund total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal
Money Market Fund 3.57% 9.64%
Average All Tax-Free
Money Market Fund 3.38% 8.43%
Consumer Price Index 2.47% 9.01%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
August 24,1992. For example, if you invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be $1,050. To
measure how the fund's performance stacked up against its peers, you can
compare it to the average all tax-free money market fund, which reflects
the performance of 396 average all tax-free money market funds with similar
objectives tracked by IBC/Donoghue over the past twelve months. Comparing
the fund's performance to the consumer price index (CPI) helps show how
your fund did compared to inflation. (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 NOVEMBER 30, 1995 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal
Money Market Fund 3.57% 2.85%
Average All Tax-Free
Money Market Fund 3.38% 2.52%
Consumer Price Index 2.47% 2.69%
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.
YIELDS
11/28/94 2/27/95 5/29/95 8/28/95 11/27/95
Spartan Florida Municipal 3.30% 3.80% 3.78% 3.38% 3.39%
Money Market Fund
Average All Tax-Free 3.10% 3.48% 3.61% 3.21% 3.30%
Money Market Fund
Spartan Florida Municipal 5.16% 5.94% 5.91% 5.28% 5.30%
Money Market Fund -
Tax-equivalent
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 all tax-free money market fund as
tracked by IBC/Donoghue. Or you can look at the fund's tax-equivalent
yield, which is based on an effective 1995 federal tax rate of 36%. A
portion of the fund's income may be subject to the alternative minimum tax.
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 fund
will maintain a $1 share price.
(checkmark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jan Bradburn, Portfolio Manager of Spartan Florida
Municipal Money Market Fund
Q. JAN, WHAT KIND OF INVESTMENT CLIMATE HAVE YOU BEEN OPERATING IN FOR THE
PAST YEAR?
A. Slower growth and declining interest rates defined the investment
climate in 1995. When the period began, the Federal Reserve was still doing
its best to temper the economic growth rate and prevent an outbreak of
inflation. Since the beginning of 1995, growth has slowed dramatically and
inflationary pressures have been dormant. In July 1995, fearful that the
economy might be in danger of slipping into a recession, the Fed offered a
dose of fiscal stimulus with a one-quarter percentage point cut in the
federal funds rate. Most market participants have assumed since then that
another rate cut was imminent, and the price of most short-term securities
reflect that assumption.
Q. WHAT WAS YOUR STRATEGY DURING THE YEAR?
A. Normally it makes sense to shorten the fund's average maturity when
rates are rising and lengthen when rates are falling. In Florida, however,
technical factors play a determinant role, especially the state's
intangible tax, levied annually on January 1. The fund's average maturity
when the period began was 27 days. Being so short then made sense for two
reasons: because rates were rising and because, knowing that many of the
new assets flooding the fund in December would disappear in January, it was
important to preserve liquidity. As the economy slowed during the spring
and interest rates fell, lack of supply made extending the fund's average
maturity difficult. As supply entered the market, I was able to extend,
reaching 55 days at the end of June, and staying close to that through the
fall and early winter. On the last day of the period, the fund's average
maturity was 52 days.
Q. HOW DID THE FUND PERFORM?
A. Better than most other tax-free money market funds. The fund's seven-day
yield on November 30, 1995 was 3.36%, up from 3.31% a year ago. That
equaled a 5.25% taxable rate for investors in the 36% federal tax bracket.
Through November 30, 1995, the fund's one-year total return was 3.57%,
compared to 3.38% for the average all tax-free money market fund, according
to IBC/Donoghue.
Q. WHAT'S THE OUTLOOK?
A. Even if the Fed chooses not to act at its next meeting in December,
rates seem likely to head lower before too long, probably before the end of
the first quarter of 1996. A key variable is the budget debate. If and when
Congress and the President reach an agreement on a balanced budget, the Fed
may choose to offset the restrictive effect of lower government spending
with a rate cut that would stimulate the economy. Of course, technical
factors will dominate my strategy over the next couple of months, as the
fund's assets swell and contract during tax season. But all that aside,
I'll probably target an average maturity of between 50 and 60 days in the
months ahead. That's long enough to capitalize on a rate cut should the Fed
decide to act, while still preserving some flexibility in case the Fed
stands pat.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER,
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income and exemption from
the Florida intangible tax, while
maintaining a stable $1.00
share price by investing in
high-quality, short-term
municipal money market
securities
START DATE: August 24, 1992
SIZE: as of November 30,
1995, more than $363 million
MANAGER: Jan Bradburn,
starting June 1995; also
manager, Fidelity Ohio
Municipal Money Market
Portfolio, since 1993;
Fidelity Massachusetts
Tax-Free Money Market
Portfolio and Spartan
Massachusetts Municipal
Money Market Portfolio, since
1992; Spartan New York
Municipal Money Market
Portfolio, since 1990; Fidelity
New York Tax-Free Money
Market Portfolio, since 1989;
joined Fidelity in 1989
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
usually long-term security that
gives the bond holder the
option to redeem the bond at
face value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO)
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/95 5/31/95 11/30/94
0 - 30 71 78 82
31 - 90 12 12 12
91 - 180 4 9 0
181 - 397 13 1 6
WEIGHTED AVERAGE MATURITY
11/30/95 5/31/95 11/30/94
Spartan Florida Municipal
Money Market Fund 52 days 29 days 27 days
Average All Tax-Free
Money Market Fund* 49 days 38 days 46 days
ASSET ALLOCATION
AS OF NOVEMBER 30, 1995 AS OF MAY 31, 1995
Row: 1, Col: 1, Value: 60.0
Row: 1, Col: 2, Value: 18.0
Row: 1, Col: 3, Value: 6.0
Row: 1, Col: 4, Value: 13.0
Row: 1, Col: 5, Value: 3.0
Row: 1, Col: 1, Value: 56.0
Row: 1, Col: 2, Value: 24.0
Row: 1, Col: 3, Value: 10.0
Row: 1, Col: 4, Value: 9.0
Row: 1, Col: 5, Value: 2.0
Variable rate
demand notes
(VRDNs) 60%
Commercial
paper 18%
Tender bonds 6%
Municipal
notes 13%
Other 3%
Variable rate
demand notes
(VRDNs) 56%
Commercial
paper 24%
Tender bonds 10%
Municipal
notes 9%
Other 1%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(registered trademark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO)
INVESTMENTS NOVEMBER 30, 1995
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - 100.0%
Alachua County Health Facs. Rev. Bonds (Academic Research
Bldg. Proj.) Series 1989, 3.90%, tender 1/18/96,
LOC Barnett Bank $ 6,250,000 $ 6,250,000
Arcadia Hosp. Rev. (Desoto Memorial Hosp.) Series 1994,
3.80%, LOC First Union Bank of Florida 5,000,000 5,000,000
Broward County Hsg. Fin. Auth. Multi-Family Hsg. Rev., VRDN:
(Lake Park Assoc. Ltd. Partnership) Series 1985, 3.70%,
LOC Society Bank 10,070,000 10,070,000
(Palm Aire-Oxford Proj.) Series 1990, 3.95%
(Continental Casualty Insurance Guaranteed) 1,800,000 1,800,000
(Town of Jacaranda) 3.85%, LOC Southtrust Bank 3,000,000 3,000,000
Broward County School Dist. RAN 4.50% 4/29/96 7,785,000 7,811,313
Clay County Hsg. Fin. Auth. Participating VRDN,
Series PT-61, 4.10%, LOC Bayerische Hypotheken
(b) (c) (d) 4,950,000 4,950,000
Collier County Wtr. & Swr. Ind. Dev. Rev., VRDN (b):
(Marco Island Util. Proj.):
Series 1990, 4%, LOC SunTrust Bank 4,300,000 4,300,000
Series 1992, 3.90%, LOC SunTrust Bank 1,200,000 1,200,000
Dade County Health Facs. Auth. Hosp. Rev.
(Miami Children's Hosp. Proj.) 3.65% (AMBAC Insured)
(Liquidity Facility SunTrust Bank) VRDN 12,000,000 12,000,000
Dade County Ind. Dev. Auth. Ind. Dev. Rev. (Royal Store
Fixtures Corp. Proj.) 3.90%, LOC SunTrust Bank,
VRDN (b) 2,500,000 2,500,000
Dade County Ind. Dev. Rev.:
(Dolphins Stadium Proj.) Series 1985 D, 4%,
LOC Hong Kong & Shanghai Banking Corp., VRDN 6,500,000 6,500,000
(Guastafeste Proj.):
Series 1987, 4%, LOC SunTrust Bank, VRDN (b) 1,010,000 1,010,000
Series 1991, 4%, LOC SunTrust Bank, VRDN (b) 625,000 625,000
(Montenay-Dade Ltd. Proj.) Series 1990 A, 3.85%,
LOC Banque Paribas, VRDN (b) 8,970,000 8,970,000
Dade County Multi-Family Hsg. (Biscayne View Apts. Proj.)
Series 1993, 4.20% (Commonwealth Life Ins. Co.
Guaranteed) VRDN (b) 15,000,000 15,000,000
Duval County Multi-Family Hsg. Fin. Auth. Rev.
(Lakes of Mayport Apts.) Series 1985 F, 3.80%,
LOC Bank of Boston, VRDN 4,300,000 4,300,000
Eustis Health Fac. Auth. Hosp. (Waterman Proj.) Series 1992,
3.65%, LOC Banque Paribas, VRDN 2,500,000 2,500,000
Florida Hsg. Fin. Agcy. Multi-Family Hsg. Rev. Rfdg.
(Hillsborough-Oxford Proj.) Series D, 3.95%
(Continental Casualty Insurance Guaranteed) VRDN 5,590,000 5,590,000
Florida Hsg. Fin. Agcy. (Oak Mill Creek Proj.) Series 1985,
3.75%, LOC Chemical Bank, VRDN 6,600,000 6,600,000
Florida State Board of Ed. Bonds Series B, 6.80%
6/1/96 1,000,000 1,012,551
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida State Board of Ed. Participating VRDN (c):
Series CR-163, 3.82% (Liquidity Facility Citibank) $ 10,000,000 $
10,000,000
Series CR-164, 3.82% (Liquidity Facility Citibank) 10,000,000
10,000,000
Series PA-103, 3.75%
(Liquidity Facility Merrill Lynch & Co.) 5,000,000 5,000,000
Florida State Dept. Gen. Svcs. Rev. Bonds (Environmental
Protection Agency) 4.50% 7/1/96 (FSA Insured) 1,160,000 1,163,920
Florida State Muni. Pwr. Agcy. (Stanton II Proj.)
Participating VRDN, Series PA-1018, 3.75%
(Liquidity Facility Merrill Lynch & Co.) (c) 2,520,000 2,520,000
Florida Turnpike Auth. Participating VRDN, Series PA-111,
3.75% (Liquidity Facility Merrill Lynch & Co.) (c) 1,100,000 1,100,000
Greater Orlando Aviation Auth. Bonds Series B, 3.80%
2/26/96 (Liquidity Facility Morgan Guaranty Trust Co.)
CP (b) 1,000,000 1,000,000
Hialeah Hosp. Rev. Rfdg. (Hialeah Hosp. Inc. Proj.) Series B,
3.90%, LOC Bank of Montreal Canada, VRDN 4,000,000 4,000,000
Hillsborough County Aviation Auth. (Tampa Intl. Arpt.) CP (b):
3.80% 2/13/96, LOC Nat'l. Westminster Bank 5,000,000 5,000,000
3.80% 2/14/96, LOC Nat'l. Westminster Bank 2,500,000 2,500,000
Indian River County Hosp. Dist. Hosp. Rev. Bonds:
Series 1988:
3.90%, tender 12/12/95, LOC Kredietbank 2,600,000 2,600,000
3.85%, tender 1/24/96, LOC Kredietbank 4,350,000 4,350,000
3.90%, tender 2/12/96, LOC Kredietbank 2,000,000 2,000,000
Series 1989:
3.85%, tender 12/7/95, LOC Kredietbank 1,200,000 1,200,000
3.90%, tender 12/12/95, LOC Kredietbank 4,300,000 4,300,000
Series 1990:
3.85%, tender 12/7/95, LOC Kredietbank 4,800,000 4,800,000
3.90%, tender 12/12/95, LOC Kredietbank 2,000,000 2,000,000
Indian River County Hosp. Dist. Rev. Rfdg. Series 1985,
3.70%, LOC Kredietbank, VRDN 900,000 900,000
Indian Trace Commty. Dev. Dist. Rev. (Broward County
Basin I Wtr. Mgmt. Spl. Benefit) 3.65% (MBIA Insured)
(BPA Swiss Bank Corp.) VRDN 3,100,000 3,100,000
Jacksonville Elec. Auth. Participating, Series PA-100, 3.80%
(Liquidity Facility Merrill Lynch & Co.) VRDN 3,460,000 3,460,000
Jacksonville Hosp. Rev. (Baptist Med. Ctr. Proj.) Series 1984,
3.60%, LOC First Union Nat'l. Bank, VRDN 5,700,000 5,700,000
Jacksonville Ind. Dev. Rev. (Samuel C. Taylor Foundation
1987 Proj.) 3.75%, LOC Barnett Bank, VRDN 5,200,000 5,200,000
Liberty County Ind. Dev. Rev. (Timber Energy Resources Inc.
Proj.) Series 1994, 3.85%, LOC Bank of Montreal,
VRDN 7,900,000 7,900,000
Manatee County Hsg. Fin. Auth. (Harbor Pointe Proj.)
Series 1990 A, 4.10%, LOC Marine Midland Bank,
VRDN 1,000,000 1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Miami TAN 4.50% 9/27/96 $ 10,000,000 $ 10,055,425
Monroe County School Dist. RAN 5.25% 12/14/95 3,000,000 3,000,000
Ocean Hwy. & Port Auth. Rev. Series 1990 3.80%,
LOC ABN-AMRO Bank (b) 9,100,000 9,100,000
Okeechobee County Solid Wst. Rev. (Chambers Waste Sys.)
Series 1992, 3.95%, LOC NationsBank,
VRDN (b) 10,900,000 10,900,000
Orange County Health Facs. Auth.
(Adventist Sys./Sunbelt Inc.)
Participating VRDN, 3.85%
(Liquidity Facility Merrill Lynch & Co.) (c) 3,985,000 3,985,000
Orange County Health Facs. (Adventist Sys./Sunbelt Inc.)
Series 1992, 3.65%, LOC Banque Paribas, VRDN 5,900,000 5,900,000
Orange County School Dist.:
RAN 4.50% 6/25/96 17,500,000 17,576,277
TAN 4.50% 10/16/96 10,000,000 10,059,717
Orange County Health Facs. Auth. Rfdg. Rev. Bonds
(Pooled Hosp. Loan Program):
Series 1985, 3.80%, tender 1/3/96 (MBIA Insured)
(BPA Banque Paribas) 2,400,000 2,400,000
Series 1985, 3.75%, tender 1/3/96 (MBIA Insured)
(BPA Banque Paribas) 4,000,000 4,000,000
Series 1985, 3.75%, tender 1/9/96 (MBIA Insured)
(BPA Banque Paribas) 10,300,000 10,300,000
Orlando Util. Commission Wtr. & Elec. Participating,
Series 1989 D, 3.75% (Liquidity Facility
Merrill Lynch & Co.) (c) 5,175,000 5,175,000
Orlando & Orange County Expressway Rev. Bonds:
7% 7/1/96 1,900,000 1,971,113
7.25% 7/1/96 1,000,000 1,041,021
Palm Beach County Health Facs. Auth. Bonds,
3.80%, tender 1/23/96 (MBIA Insured)
(Liquidity Facility Credit Suisse) 4,500,000 4,500,000
Palm Beach County Hsg. Fin. Auth. Rev. (Lake Crystal Apts.
Proj. Phase III) Series 1988 A, 3.92%, LOC Citibank,
VRDN (b) 7,340,000 7,340,000
Pensacola Rev. Bonds (Harborview Corp. Proj.) 3.95%
LOC Amsouth Bank, VRDN 2,975,000 2,975,000
Pinellas County Health Facs. Auth. Rev.:
(Bayfront Med.) 3.60% (FGIC Insured)
(BPA Barnett Bank) VRDN 1,100,000 1,100,000
(Pooled Hosp. Loan Program) 3.80%,
LOC Chemical Bank, VRDN 1,600,000 1,600,000
Pinellas County Wtr. Rev. Rfdg. Bonds 4.50% 10/1/96
(AMBAC Insured) 5,150,000 5,181,224
Plant City (South Baptist Hosp. Proj.) Series 1993, 3.90%,
LOC Barnett Bank, VRDN (b) 4,800,000 4,800,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Putnam County Dev. Auth. Poll. Cont. Rev. Bonds
(Seminole Elec. Coop.):
Series 1984 D, 3.40%, tender 12/15/95
(Nat'l. Rural Utils. Coop-CFC Guaranteed) $ 10,000,000 $ 10,000,000
Series 1984 H4, 3.75%, tender 3/15/96
(Nat'l. Rural Utils. Coop.-CFC Guaranteed) 6,000,000 6,000,000
Sunshine State Govt. Fing. Commission, CP:
3.65% 12/8/95 1,425,000 1,425,000
3.65% 12/11/95 5,000,000 5,000,000
Sunshine State Govt. Fing. Commission Rev. Bonds
Series 1986, 3.65%, tender 12/8/95 1,575,000 1,575,000
Volusia County Health Facs. Auth. Rev. (Southwest Volusia
Healthcare Corp.) Series 1994 A, 3.70%,
LOC First Union Nat'l. Bank, VRDN 9,900,000 9,900,000
TOTAL INVESTMENTS - 100% $ 358,642,561
Total Cost for Income Tax Purposes $ 358,642,748
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax and 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.
(d) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Clay County Hsg. Fin.
Auth. Participating VRDN,
Series PT-61 4/21/95 $ 4,951,207
INCOME TAX INFORMATION
At November 30, 1995, the fund had a capital loss carryforward of
approximately $27,100 of which $100, $1,000, $22,000 and $4,000 will expire
on November 30, 2000, 2001, 2002 and 2003, respectively.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO)
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
129.ASS 130. 131.
ETS
132.Inve 133. $ 358,642,561
stment
in
securiti
es, at
value -
See
accom
panyin
g
schedu
le
134.Rec 135. 4,012,619
eivable
for
invest
ments
sold on
a
delaye
d
deliver
y basis
136.Inter 137. 2,616,135
est
receiva
ble
138. 140. 365,271,315
139.T
OTAL
ASSETS
141.LIA 142. 143.
BILITIES
144.Pay $ 599,455 145.
able to
custodi
an
bank
146.Pay 1,071,127 147.
able for
invest
ments
purcha
sed
148.Dist 58,725 149.
ribution
s
payabl
e
150.Acc 145,744 151.
rued
manag
ement
fee
152. 154. 1,875,051
153.T
OTAL
LIABILITI
ES
155. 157. $ 363,396,264
156.N
ET
ASSETS
158.Net 159. 160.
Assets
consist
of:
161.Paid 162. $ 363,423,660
in
capital
163.Acc 164. (27,396)
umulat
ed net
realize
d gain
(loss)
on
invest
ments
165. 167. $ 363,396,264
166.N
ET
ASSETS
, for
363,42
3,660
shares
outstan
ding
168. 170. $1.00
169.N
ET
ASSET
VALUE,
offering
price
and
redemp
tion
price
per
share
($363,3
96,264
(divided by)
363,42
3,660
shares)
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1995
171. 173. $ 15,436,952
172.INTE
REST
INCOME
174.EXP 175. 176.
ENSES
177.Man $ 1,916,452 178.
ageme
nt fee
179.Non 2,196 180.
- -interes
ted
trustee
s'
compe
nsation
181. 183. 1,918,648
182.T
OTAL
EXPEN
SES
184. 186. 13,518,304
185.N
ET
INTERES
T
INCOM
E
187. 189. (4,277)
188.NET
REALIZED
GAIN
(LOSS)
ON
INVESTM
ENTS
190. 192. $ 13,514,027
191.N
ET
INCREA
SE IN
NET
ASSETS
RESULTI
NG
FROM
OPERATI
ONS
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED NOVEMBER 30,
1995 1994
193.INCR
EASE
(DECREAS
E) IN NET
ASSETS
194.Ope $ 13,518,304 $ 8,842,690
rations
Net
interest
income
195. Ne (4,277) (21,862)
t
realize
d gain
(loss)
196. Inc - (17)
rease
(decre
ase) in
net
unreali
zed
gain
from
accr
etion of
market
discou
nt
197. 13,514,027 8,820,811
198.
NET
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
OPER
ATION
S
199.Dist (13,518,304) (8,842,690)
ribution
s to
shareh
olders
from
net
interest
income
200.Sha 629,995,039 587,117,506
re
transac
tions at
net
asset
value
of
$1.00
per
share
Procee
ds from
sales
of
shares
201. Rei 12,616,815 8,273,320
nvestm
ent of
distribu
tions
from
net
interest
income
202. Co (616,740,964) (564,580,189)
st of
shares
redeem
ed
203. 25,870,890 30,810,637
204.
NET
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
AND
SHAR
ES
RESUL
TING
FROM
SHAR
E
TRANS
ACTIO
NS
205. 25,866,613 30,788,758
206.T
OTAL
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
207.NET 208. 209.
ASSETS
210. Be 337,529,651 306,740,893
ginning
of
period
211. En $ 363,396,264 $ 337,529,651
d of
period
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30, AUGUST 24, 1992
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1995 1994 1993 1992
212.SEL
ECTED
PER-SH
ARE
DATA
213.Net $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
beginni
ng of
period
214.Inco .035 .024 .025 .008
me
from
Invest
ment
Operati
ons
Net
interest
income
215.Les (.035) (.024) (.025) (.008)
s
Distrib
utions
From
net
interest
income
216.Net $ 1.000 $ 1.000 $ 1.000 $ 1.000
asset
value,
end of
period
217.TOT 3.57% 2.47% 2.51% .78%
AL
RETURN
B
218.RATIOS AND
SUPPLEMENTAL DATA
219.Net $ 363,396 $ 337,530 $ 306,741 $ 49,467
assets,
end of
period
(000
omitted
)
220.Rati .50% .46% .18% 0.00%
o of C C C
expens
es to
averag
e
net
assets
221.Rati 3.52% 2.43% 2.48% 2.91%
o of net A
interest
income
to
averag
e net
assets
A ANNUALIZED
B 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.
C FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1995
1. SIGNIFICANT ACCOUNTING POLICIES.
On December 14, 1995, the Board of Trustees gave approval to change the
names of Spartan Florida Municipal Income Portfolio and Spartan Florida
Municipal Money Market Portfolio to Spartan Florida Municipal Income Fund
and Spartan Florida Municipal Money Market Fund, respectively. Spartan
Florida Municipal Income Fund (the income fund) is a fund of Fidelity Court
Street Trust. Spartan Florida Municipal Money Market Fund (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 income fund
and the money market fund:
SECURITY VALUATION.
INCOME 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 of their purchase date 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 substantially 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, which may result in distribution
reclassifications, are primarily due to differing treatments for market
discount, capital loss carryforwards and losses deferred due to wash sales,
and futures and options.
REDEMPTION FEES. Shares held in the income 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.
RESTRICTED SECURITIES. The funds are permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $4,950,000 or
1.4% of net assets for the money market fund. The income fund had no
investments in restricted securities.
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. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. Each fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
FUTURES CONTRACTS AND OPTIONS. The income fund may invest in futures and
options contracts, and may also 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, as reflected in the schedule of investments under the
caption "Futures Contracts", reflect the extent of the involvement the
income 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.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $241,479,864 and $228,173,637, respectively. The
market value of futures contracts opened and closed during the period
amounted to $50,198,222 and $58,695,441, 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 income and money market funds,
respectively.
FMR also bears the cost of providing shareholder services to each fund. To
offset the cost of providing these services, FMR or its affiliates
collected certain transaction fees from shareholders which amounted to
$3,515 and $5,202 for the income 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.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and Fidelity Court Street
Trust II and the Shareholders of Spartan Florida Municipal Income Portfolio
and Spartan Florida Municipal Money Market Portfolio:
We have audited the accompanying statements of assets and liabilities of
Fidelity Court Street Trust: Spartan Florida Municipal Income Portfolio and
Fidelity Court Street Trust II: Spartan Florida Municipal Money Market
Portfolio, including the schedules of portfolio investments, as of November
30, 1995 and the related statements of operations for the year then ended,
the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the three years
in the period then ended and the period from March 16, 1992 (commencement
of operations) to November 30, 1992 for the Spartan Florida Municipal
Income Portfolio, and for each of the three years in the period then ended
and the period from August 24, 1992 (commencement of operations) to
November 30, 1992 for the Spartan Florida Municipal Money Market Portfolio.
These financial statements and financial highlights are the responsibility
of the Funds' management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Spartan Florida Municipal Income Portfolio and Spartan Florida Municipal
Money Market Portfolio, as of November 30, 1995, the results of their
operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the financial
highlights for each of the three years in the period then ended and the
period from March 16, 1992 (commencement of operations) to November 30,
1992 for the Spartan Florida Municipal Income Portfolio, and for each of
the three years in the period then ended and the period from August 24,
1992 (commencement of operations) to November 30, 1992 for the Spartan
Florida Municipal Money Market Portfolio, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 4, 1996
DISTRIBUTIONS
The Board of Trustees of Spartan Florida Municipal Income Fund voted to
pay on December 26, 1995 to shareholders of record at the opening of
business on December 22, 1995, a distribution of $.005 derived from capital
gains realized from sales of portfolio securities.
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER, MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr. , Vice President
Janice S. Bradburn, Vice President -
MONEY MARKET FUND
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB 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
(2_FIDELITY_LOGOS)FIDELITY
HIGH YIELD TAX-FREE
PORTFOLIO
ANNUAL REPORT
NOVEMBER 30, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
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.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 35 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 39 Notes to the financial statements.
REPORT OF INDEPENDENT 42 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was generally very
positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving
for a college education, enables you to weather these ups and downs in a
long-term fund, which has higher potential returns. An intermediate-length
fund could be appropriate if your investment horizon is two to four years,
and a short-term bond fund could be the right choice if you need your money
in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
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. A fund's total
return includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells securities that have grown in value). You can also look at the fund's
income to measure performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
High Yield Tax-Free 17.95% 44.45% 129.65%
Lehman Brothers Municipal Bond Index 18.90% 51.82% 139.41%
Average High Yield Municipal Bond Fund 17.15% 48.37% 129.18%
Consumer Price Index 2.47% 14.80% 40.92%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one, five, or 10 years. For example, if
you invested $1,000 in a fund that had a 5% return over the past year, the
value of your investment would be $1,050. You can compare the fund's
returns to the performance of the Lehman Brothers Municipal Bond Index - a
broad gauge of the municipal bond market. To measure how the fund's
performance stacked up against its peers, you can compare it to the average
high yield municipal bond fund, which reflects the performance of 36 high
yield municipal bond funds with similar objectives tracked by Lipper
Analytical Services over the past 12 months. Both benchmarks include
reinvested dividends and capital gains, if any. Comparing the fund's
performance to the consumer price index (CPI) helps show how your fund did
compared to inflation. (The CPI returns begin on the month end closest to
the fund's start date.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
High Yield Tax-Free 17.95% 7.63% 8.67%
Lehman Brothers Municipal Bond Index 18.90% 8.71% 9.12%
Average High Yield Municipal Bond Fund 17.15% 8.19% 8.63%
Consumer Price Index 2.47% 2.80% 3.49%
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 10 YEARS
High Yield (LB Munici
11/30/85 10000.00 10000
12/31/85 10192.08 10087.9
01/31/86 10682.01 10682.08
02/28/86 11065.89 11105.73
03/31/86 11151.81 11109.28
04/30/86 11112.50 11117.73
05/31/86 10973.62 10936.73
06/30/86 11089.01 11041.07
07/31/86 11168.23 11108.08
08/31/86 11712.80 11605.39
09/30/86 11698.70 11634.52
10/31/86 11942.16 11835.45
11/30/86 12121.27 12069.91
12/31/86 12118.31 12036.6
01/31/87 12417.95 12399.02
02/28/87 12563.63 12460.02
03/31/87 12468.14 12327.95
04/30/87 11626.78 11709.33
05/31/87 11541.26 11651.25
06/30/87 11736.30 11993.33
07/31/87 11885.91 12115.67
08/31/87 11941.32 12142.93
09/30/87 11380.56 11695.22
10/31/87 11342.46 11736.62
11/30/87 11581.96 12043.06
12/31/87 11774.58 12217.81
01/31/88 12184.35 12653
02/29/88 12337.50 12786.75
03/31/88 12043.61 12637.78
04/30/88 12131.76 12733.83
05/31/88 12219.73 12697.03
06/30/88 12365.94 12882.78
07/31/88 12494.00 12966.78
08/31/88 12551.61 12978.19
09/30/88 12827.75 13213.1
10/31/88 13074.28 13446.31
11/30/88 12963.96 13323.14
12/31/88 13213.80 13459.43
01/31/89 13400.21 13737.78
02/28/89 13319.14 13581.03
03/31/89 13346.59 13548.57
04/30/89 13777.25 13870.21
05/31/89 14068.69 14158.3
06/30/89 14205.40 14350.57
07/31/89 14308.93 14545.88
08/31/89 14245.45 14403.47
09/30/89 14184.65 14360.55
10/31/89 14333.17 14536.18
11/30/89 14597.89 14790.56
12/31/89 14719.27 14911.55
01/31/90 14564.17 14841.02
02/28/90 14754.87 14973.85
03/31/90 14771.56 14978.34
04/30/90 14505.85 14869.89
05/31/90 14906.09 15194.5
06/30/90 15065.29 15328.06
07/31/90 15298.51 15554.15
08/31/90 15139.37 15328.31
09/30/90 15253.58 15337.04
10/31/90 15456.33 15615.26
11/30/90 15898.20 15929.28
12/31/90 15966.59 15998.57
01/31/91 16174.55 16213.27
02/28/91 16275.79 16354.33
03/31/91 16328.15 16360.22
04/30/91 16551.55 16578.63
05/31/91 16697.32 16726.01
06/30/91 16698.21 16709.45
07/31/91 16940.79 16912.97
08/31/91 17090.44 17135.72
09/30/91 17227.04 17358.82
10/31/91 17389.01 17515.05
11/30/91 17426.97 17563.92
12/31/91 17591.45 17940.84
01/31/92 17772.03 17981.75
02/29/92 17808.40 17987.5
03/31/92 17825.85 17994.16
04/30/92 17996.30 18154.3
05/31/92 18169.02 18367.98
06/30/92 18420.96 18676.19
07/31/92 18893.56 19236.11
08/31/92 18642.09 19048.55
09/30/92 18692.14 19173.13
10/31/92 18380.91 18984.66
11/30/92 18857.91 19324.68
12/31/92 19062.11 19521.98
01/31/93 19328.88 19749.02
02/28/93 20040.24 20463.34
03/31/93 19895.05 20247.05
04/30/93 20084.30 20451.34
05/31/93 20200.87 20566.27
06/30/93 20498.13 20909.53
07/31/93 20505.25 20936.92
08/31/93 20950.82 21372.82
09/30/93 21253.82 21616.26
10/31/93 21276.20 21657.98
11/30/93 21104.94 21467.17
12/31/93 21561.21 21920.35
01/31/94 21798.34 22170.68
02/28/94 21243.06 21596.45
03/31/94 20260.17 20717.05
04/30/94 20365.43 20892.73
05/31/94 20492.35 21073.87
06/30/94 20376.37 20945.11
07/31/94 20760.92 21329.03
08/31/94 20836.33 21402.83
09/30/94 20526.79 21088.64
10/31/94 20098.02 20714.1
11/30/94 19470.97 20339.59
12/31/94 19955.06 20787.26
01/31/95 20635.32 21381.36
02/28/95 21232.51 22003.13
03/31/95 21288.14 22255.95
04/30/95 21298.79 22282.21
05/31/95 21963.09 22993.24
06/30/95 21625.08 22792.05
07/31/95 21781.61 23008.12
08/31/95 22048.34 23299.86
09/30/95 22218.46 23447.35
10/31/95 22537.97 23788.27
11/30/95 22965.09 23941
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity High
Yield Tax-Free Portfolio on November 30, 1985. As the chart shows, by
November 30, 1995, the value of your investment would have grown to $22,965
- - a 129.65% increase on your initial investment. 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 $23,941 - a
139.41% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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
YEARS ENDED NOVEMBER 30,
1995 1994 1993 1992 1991
Dividend return 6.54% 7.54% 6.33% 6.70% 7.11%
Capital appreciation return 11.41% -15.28% 5.59% 1.51% 2.51%
Total return 17.95% -7.74% 11.92% 8.21% 9.62%
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.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.97(cents) 31.97(cents) 67.66(cents)
Annualized dividend rate 4.96% 5.31% 5.71%
30-day annualized yield 4.91% - -
30-day annualized tax-equivalent yield 7.67% - -
</TABLE>
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 $12.19 over
the past month, $12.00 over the past six months and $11.84 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. 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 36% federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
In sharp contrast to much of
1994, the municipal bond market
posted strong returns for the 12
months ended November 30,
1995. For the period, the Lehman
Brothers Municipal Bond Index -
a broad measure of the tax-free
market - had a total return of
18.90%. By comparison, the
Lehman Brothers Aggregate
Bond Index - a proxy for
investment-grade taxable bonds
- - had a total return of
17.64%. While the bankruptcy of
Orange County, California, in
December 1994 caused some
concern among investors,
tax-free bonds managed to
surge ahead of their taxable
counterparts in the first quarter of
1995 on signs of a slowing
economy and tamer inflation
expectations. By spring,
however, the muni bond market
began to underperform U.S.
Treasury securities when
Congress began consideration of
tax-code changes, some of which
threatened the tax-exempt status
of municipal securities. This
threat of tax reform dampened
enthusiasm in the municipal bond
market, stalling the rally and
helping shorter maturity bonds to
outperform their longer
counterparts throughout the
spring and summer months. By
early fall, historically attractive
valuations relative to Treasuries,
weakening new issuance, and
stronger demand from insurance
companies and retail buyers
helped tax-free bonds rebound.
An interview with David Murphy, Portfolio Manager of Fidelity High Yield
Tax-Free Portfolio
Q. HOW DID THE FUND PERFORM, DAVID?
A. For the 12-month period ended November 30, 1995, the fund returned
17.95%. That beat the 17.15% return of the average high yield municipal
bond fund, as tracked by Lipper Analytical Services for the same period.
Also, for comparison purposes, the Lehman Brothers Municipal Bond Index
returned 18.90%.
Q. WHAT IS THE MOST IMPORTANT CHANGE YOU HAVE MADE TO THE PORTFOLIO SINCE
TAKING OVER THE FUND IN OCTOBER?
A. The most important strategic change I made was to reduce the fund's
holdings in securities, rated below investment grade. The term "investment
grade" refers to ratings given by Moody's and other rating agencies of an
issuer's ability to pay a bond's principal and interest in a timely
fashion. Bonds below the Moody's rating "Baa" are considered speculative,
or non-investment grade.
Q. WHY DID YOU MAKE THIS DECISION?
A. There were two reasons. First, credit spreads - or the difference in
yield between non-investment grade and investment grade bonds - have been
fairly tight recently and, I believe, may widen over time. So it didn't pay
to take on the additional risk of the non-investment grade bonds. Second,
in a bond rally, the non-investment grade bonds usually lag. Therefore, I
wanted to reduce the fund's exposure to that potential source of
underperformance.
Q. WHAT SECTORS OF THE MUNICIPAL BOND MARKET CONTRIBUTED THE MOST TO THE
FUND'S PERFORMANCE?
A. Over the last year, the investment-grade health care bonds in the
portfolio did quite well. One particular example stands out in my mind.
HealthOne, a Denver-based hospital system whose tax-exempt bonds were held
by the fund, was recently bought by the corporate health-care provider
Columbia HCA. Most of our HealthOne holdings were bought by Columbia at a
substantial profit for the fund.
Q. TRANSPORTATION BONDS WEREN'T PART OF THE PORTFOLIO'S TOP FIVE HOLDINGS
SIX MONTHS AGO, YET NOW THEY MAKE UP 11.9% OF THE FUND. WHAT'S THE STORY
THERE?
A. The fund's transportation holdings, which largely included airport and
toll road bonds, have recently made a positive contribution. During the
period, I added bonds issued by Chicago's O'Hare Airport, which I viewed as
having attractive investment characteristics. Airport bonds are backed by
the revenue generated by the airport, such as the fees paid by airlines to
airports for landing rights and gates. In my opinion, O'Hare bonds are a
good investment because of its central position in the nation's air traffic
system and its status as the world's busiest airport. For toll roads, one
good performer was the bonds issued by San Joaquin Hills Transportation
Corridor Agency in California. Anybody who has spent five minutes in a car
in Southern California understands the traffic problem on the state's
toll-free expressways. Toll roads, on the other hand, offer a more
time-efficient alternative for drivers.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. The NASA Space Center in Houston - whose tax-exempt bonds are issued
under the authority of the Harris County Cultural and Educational
Facilities Corporation and represent less than 1% of the fund's portfolio -
announced it was having trouble making complete debt service coverage. Debt
service is the yearly amount of interest and principal payable on a bond
issue. As a result, the holding detracted from the fund's performance. The
issuer is currently evaluating ways to address its problems and Fidelity is
closely following the situation.
Q. HAVE YOU MADE ANY STRUCTURAL CHANGES TO THE FUND?
A. I've tried to retain bonds that have long call protection relative to
other bonds available in the market. I often prefer bonds with call
protection so I won't have to reinvest at lower rates if a bond is called -
or paid back earlier than expected. Recently, however, fewer bargains have
turned up as building call protection has become a common strategy over the
last few months. Thus, I've started to buy some callable bonds that are
trading at bargain prices. I've also tried to shift out of bonds that are
trading at a slight discount in price to their face value and into
premium-coupon bonds. In many cases, premium bonds - which carry stated
interest rates higher than newly issued bonds - have become undervalued
because their performance has lagged other bonds. These bonds offer price
appreciation potential should the municipal market continue to rally, as
well as downside protection should the market fall.
Q. SO WHAT'S YOUR OUTLOOK?
A. It's likely that, as the presidential election approaches, tax-reform
talk could re-emerge. Should tax reform move to the forefront of political
debate, it could be a source of future volatility in the municipal bond
market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER,
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to provide high current
income exempt from federal
income taxes
START DATE: December 1,
1977
SIZE: as of November 30, 1995,
more than $1.8 billion
MANAGER: David Murphy,
since October 1, 1995;
manager, Fidelity Limited Term
Municipals, since 1989; Spartan
Intermediate Municipal Fund,
1993 to 1995; manager
Spartan New York
Intermediate Municipal
Portfolio, 1993 to 1995;
Spartan Short-Intermediate
Municipal Fund, 1989 to 1995
and Spartan Municipal Income
Portfolio, since October 1,
1995; manager, Fidelity
Advisor Intermediate Municipal
Income Fund, since March
27, 1995; joined Fidelity in
1989
(checkmark)
DAVID MURPHY ON HIS
INVESTMENT STYLE:
"I describe myself as a total
return investor. That said,
however, I choose my
investments knowing that
income is extremely important
both as a component of total
return and for its tax
advantages to municipal bond
investors. I only go after bonds
whose return justifies the
risks taken. My goal is to
provide returns above the
overall market.
"In determining the risks and
rewards available in the
market, I use the Lehman
Brothers Municipal Bond Index
as a proxy for the overall
market. I believe this index is
the best available benchmark
for managing a national
municipal bond fund."
(solid bullet) On October 1, 1995, David
Murphy took over as portfolio
manager of the fund,
replacing Anne Punzak.
DISTRIBUTIONS
The Board of Trustees of
Fidelity High Yield Tax-Free
Portfolio voted to pay on
December 26, 1995, to
shareholders of record at the
opening of business on
December 22, 1995, a
distribution of $.004 derived
from capital gains realized
from sales of portfolio
securities.
INVESTMENT CHANGES
TOP FIVE STATES AS OF NOVEMBER 30, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
California 10.8 7.6
New York 9.7 8.6
Texas 9.2 6.7
Massachusetts 8.3 7.9
Pennsylvania 5.6 6.2
TOP FIVE SECTORS AS OF NOVEMBER 30, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Electric Revenue 16.8 16.3
General Obligation 15.5 15.2
Health Care 13.1 18.9
Transportation 11.9 7.3
Special Tax 9.2 9.4
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1995
6 MONTHS AGO
Years 14.6 16.1
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF NOVEMBER 30, 1995
6 MONTHS AGO
Years 7.5 7.9
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1995 AS OF MAY 31, 1995
Row: 1, Col: 1, Value: 6.7
Row: 1, Col: 2, Value: 9.4
Row: 1, Col: 3, Value: 1.6
Row: 1, Col: 4, Value: 7.0
Row: 1, Col: 5, Value: 15.7
Row: 1, Col: 6, Value: 33.6
Row: 1, Col: 7, Value: 26.0
Row: 1, Col: 1, Value: 7.9
Row: 1, Col: 2, Value: 4.9
Row: 1, Col: 3, Value: 1.9
Row: 1, Col: 4, Value: 3.9
Row: 1, Col: 5, Value: 14.4
Row: 1, Col: 6, Value: 33.0
Row: 1, Col: 7, Value: 34.0
Aaa 34.0%
Aa, A 34.0%
Baa 14.4%
Ba, B 3.9%
Caa 0.9%
Nonrated 4.9%
Short-term investments 7.9%
Aaa 26.5%
Aa, A 34.6%
Baa 15.7%%
Ba, B 7.0%%
Caa 0.1%
Nonrated 9.4%
Short-term investments 6.7%
Row: 1, Col: 1, Value: 2.6
Row: 1, Col: 2, Value: 11.6
Row: 1, Col: 3, Value: 8.9
Row: 1, Col: 4, Value: 21.0
Row: 1, Col: 5, Value: 33.3
Row: 1, Col: 6, Value: 22.6
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED
S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE EQUIVALENT TO BA AND BELOW
ACCOUNT FOR 4.4% AND 8.1%,
RESPECTIVELY, OF THE FUND'S INVESTMENTS AT NOVEMBER 30, 1995 AND MAY 31,
1995, RESPECTIVELY.
INVESTMENTS NOVEMBER 30, 1995
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL BONDS - 92.1%
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
ALABAMA - 1.8%
Alabama Bldg. Renovation Fin. Auth. Rev.
7.45% 9/1/11 A $ 3,000 $ 3,375
Alabama Mental Health Fin. Auth. Spl. Tax
7.375% 5/1/09 (Pre-Refunded to
5/1/99 @ 102)(g) A 3,000 3,341
Birmingham Baptist Med. Ctr. Spl. Care Facs.
Fin. Auth. Rev. (Baptist Med. Ctr.) Series A,
5.50% 8/15/13, (MBIA Insured) Aaa 3,500 3,487
Birmingham Jefferson Civic Ctr. Auth. Spl. Tax
(Cap. Outlay) 7.25% 1/1/12 A 5,875 6,279
Cullman Med. Park South Med. Clinic Board Rev.
(Cullman Reg'l. Med. Ctr.) Series A:
6.50% 2/15/13 Baa 6,500 6,508
6.50% 2/15/23 Baa 4,250 4,213
McIntosh Ind. Dev. Board Poll. Cont. Rev.
(Ciba-Geigy Corp.) 6% 8/1/07 - 505 505
Mobile Wtr. & Swr. Commissioners Wtr. & Swr.
Rfdg. 6.50% 1/1/09 A 4,600 4,997
32,705
ALASKA - 0.6%
Alaska Student Loan Corp.:
7.20% 7/1/99, (AMBAC Insured) Aaa 1,000 1,080
7.30% 7/1/00, (AMBAC Insured) Aaa 3,100 3,387
North Slope Borough Series B, 0% 1/1/03,
(MBIA Insured) Aaa 9,000 6,401
10,868
ARIZONA - 1.5%
Chandler Cap. Appreciation Rfdg.:
0% 7/1/05, (FGIC Insured) Aaa 5,700 3,563
0% 7/1/06, (FGIC Insured) Aaa 5,700 3,356
0% 7/1/07, (FGIC Insured) Aaa 5,700 3,156
0% 7/1/08, (FGIC Insured) Aaa 1,700 884
Maricopa County Ind. Dev. Auth. Hosp. Facs. Rev.
Rfdg. (Samaritan Health Svcs.) Series A,
7% 12/1/16, (MBIA Insured) Aaa 2,000 2,410
Maricopa County Poll. Cont. Corp. Poll. Cont. Rev.
(Pub. Svc. Co. New Mexico - Palo Verde)
7.75% 11/1/09 Ba2 7,165 7,463
Maricopa Union School Dist. #69 (Paradise
Valley Board) 5% 7/1/08, (AMBAC Insured) Aaa 1,700 1,681
Phoenix Gen. Oblig. Rfdg. 6% 7/1/02 Aa1 1,840 2,017
Salt River Proj. Agric. Impt. & Pwr.
Dist. Elec. Sys. 5.05% 1/1/11 Aa 2,400 2,283
26,813
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
ARKANSAS - 0.7%
Arkansas Dev. Fin. Auth. Rev. (Cap. Asset)
Series B, 7.10% 3/1/08 A $ 4,500 $ 4,989
North Little Rock Elec. Rev. Rfdg. Series A:
6.50% 7/1/10, (MBIA Insured) Aaa 3,840 4,301
6.50% 7/1/15, (MBIA Insured) Aaa 1,000 1,146
Pulaski County Health Facs. Board Rev. Rfdg.
(Sisters Charity Nazareth Corp.) 6.05%
11/1/09, (MBIA Insured) Aaa 1,750 1,910
12,346
CALIFORNIA - 9.8%
California Gen. Oblig.:
6.50% 3/1/02, (AMBAC Insured) Aaa 2,000 2,230
6.80% 4/1/03 A1 2,500 2,828
8% 5/1/03, (AMBAC Insured) Aaa 8,000 9,740
4.60% 9/1/06, (AMBAC Insured) Aaa 20,000 19,375
5.25% 10/1/16 A1 12,000 11,505
California Hsg. Fin. Agcy. Rev. (Home Mtg.):
Series G, 5.90% 2/1/09, (MBIA Insured) Aaa 1,000 1,031
Series G, 5.90% 8/1/09, (MBIA Insured) Aaa 2,000 2,062
California Pub. Wks. Board Lease Rev.:
(California University Proj.) Series A:
5% 6/1/23 A1 5,175 4,612
5.50% 6/1/10 A1 18,250 18,250
5.25% 12/1/13 A 3,750 3,539
(Dept. Correction State Prison D-Susanville)
5.375% 6/1/18 A 1,500 1,429
California State Dept. Wtr. Resources Central
Valley Proj. Rev. Rfdg. Wtr. Sys. Series L,
8% 12/1/01 Aa 7,400 8,787
California Univ. Rev. Rfdg. (Multiple Purp. Proj.)
Series C, 5% 9/1/14, (AMBAC Insured) Aaa 4,000 3,795
Castaic Lake Wtr. Agcy. Ctfs. of Prtn. Rfdg.
(Wtr. Sys. Impt. Proj.) Series A, 7.25%
8/1/09, (MBIA Insured) Aaa 1,800 2,169
Contra Costa Trans. Auth. (Sales Tax Rev.)
Series A, 6% 3/1/05, (FGIC Insured) Aaa 4,000 4,385
Del Norte County Pub. Wks. Rev. Rfdg.
(Dept. of Corrections) 5.125% 12/1/08 A 2,500 2,434
Foothill/Eastern Trans. Corridor Agcy. Toll Rd.
Rev. (Sr. Lien) Series A:
6% 1/1/16 BBB- 17,000 16,958
6% 1/1/34 BBB- 3,725 3,641
Industry Urban Ind. Dev. Agcy. Rfdg.
(Civic Recreational Proj. #1) Series A,
7.375% 5/1/12 BBB- 1,000 1,038
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
Long Beach Harbor Rev. 9% 5/15/02,
(MBIA Insured) Aaa $ 3,835 $ 4,741
Los Angeles Cnty. Metropolitan Tran. Auth.
Sales Tax Rev. (Prop. C) 2nd Series A:
5.90% 7/1/05, (AMBAC Insured) Aaa 2,140 2,327
5.90% 7/1/06, (AMBAC Insured) Aaa 1,610 1,743
Metropolitan Wtr. Dist. Southern California
Wtrwks. Rev. 5.75% 7/1/21 Aaa 2,000 2,026
Northern California Pwr. Agcy. Pub. Pwr.
Rev. Rfdg. (Geothermal Proj.) Series A,
5.80% 7/1/09, (AMBAC Insured) Aaa 9,500 10,106
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 6% 9/1/15 Caa 2,800 2,646
Sacramento City Fin. Auth. (Cap. Appreciation
Tax Allocation Comb. Proj.) Series B,
0% 11/1/06, (MBIA Insured) Aaa 2,810 1,630
San Diego County Regulation Trans. Commission
(Sales Tax Rev.) Second SR-Series A:
6.25% 4/1/02, (FGIC Insured) Aaa 1,100 1,211
6.25% 4/1/03, (FGIC Insured) Aaa 5,000 5,544
San Francisco Bldg. Auth. Lease Rev.
(Dept. Gen. Svcs. Lease) Series A,
5% 10/1/13 A1 5,500 5,026
San Joaquin Hills Trans. Corridor Agcy.
Toll Road Rev. (Sr. Lien):
0% 1/1/17 - 3,500 914
0% 1/1/19 - 20,000 4,600
San Mateo County Trans. Dist. Sales Tax Rev.
Crossover Rfdg. Series A, 5% 6/1/09,
(MBIA Insured) Aaa 2,635 2,585
Santa Margarita/Dana Point Auth. Rev.
(Impt. Dist. 3&3A,4&4A) Series B,
7.25% 8/1/08, (MBIA Insured) Aaa 1,770 2,133
Sequoia Hosp. Dist. Rev. 5.375% 8/15/23 Baa1 3,285 2,759
South Orange County Pub. Fin. Auth. Spl.
Tax Rev.:
(Sr. Lien) Series A, 7% 9/1/11,
(MBIA Insured) Aaa 3,490 4,079
(Foothill Area) Series C, 8% 8/15/08,
(FGIC Insured) Aaa 2,500 3,159
Upland Ctfs. of Prtn. (San Antonio
Commty. Hosp.) 5% 1/1/18 A 3,000 2,554
179,591
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
COLORADO - 3.6%
Aurora Wtr. Rfdg. 4.75% 11/1/14 A1 $ 3,040 $ 2,747
Colorado Health Facs. Auth. Rev.:
(Hosp.-Swedish Med. Ctr.)
Series A, 7.25% 10/1/08 (Pre-Refunded
to 10/1/00 @ 102)(g) Baa1 1,000 1,128
(Rocky Mountain Adventist):
6.625% 2/1/13 Baa 16,300 16,504
6.625% 2/1/22 Baa 4,700 4,729
(Sisters of Charity Health Care Sys.)
Series A, 6.25% 5/15/12,
(AMBAC Insured) Aaa 2,000 2,212
Colorado Springs Arpt. Rev. (Cap. Appreciation)
Series C:
0% 1/1/02 BBB+ 1,550 1,139
0% 1/1/04 BBB+ 1,530 1,000
0% 1/1/09 BBB+ 1,655 747
0% 1/1/10 BBB+ 1,500 628
Colorado Univ. Rev. (Biomedical Research
Bldg. Proj.) 7% 6/1/09 A 5,725 6,390
Denver City & County Arpt. Rev.:
Series A:
6.60% 11/15/97 (f) Baa 1,200 1,240
6.90% 11/15/98 (f) Baa 6,250 6,594
7% 11/15/99 (f) Baa 2,750 2,939
7.50% 11/15/06 Baa 6,500 7,337
Series D, 0% 11/15/05, (MBIA Insured) (f) Aaa 3,000 1,815
0%,10/15/03, (MBIA Insured) Aaa 5,000 3,375
Jefferson County Ctfs. of Prtn. (MBIA Insured):
Rfdg. 6.65% 12/1/08 Aaa 3,000 3,319
7.125% 12/1/10 (Pre-Refunded to 12/1/01
@ 101)(g) Aaa 250 288
Jefferson County Single Family Mtg. Rev.
Series 1991 A, 8.875% 10/1/13,
(MBIA Insured) Aaa 365 395
Mountain Village Metropolitan Dist. San
Miguel County Rfdg. 8.10% 12/1/11 - 2,000 2,200
66,726
CONNECTICUT - 0.4%
Connecticut Health & Edl. Facs. Auth. Rev.
(New Britain Mem. Hosp.) Series A,
7.50% 7/1/06 BBB- 5,000 5,419
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
CONNECTICUT - CONTINUED
Norwalk Hsg. Auth. Mtg. Rev. (Monterey Village)
Series 1985 B, Section 8, 9% 11/1/99 BBB $ 1,790 $ 1,859
7,278
DISTRICT OF COLUMBIA - 0.3%
District of Columbia Hosp. Rev. (Hosp. for
Sick Children) Series A, 8.875% 1/1/21 - 5,890 6,383
FLORIDA - 4.3%
Brevard Cnty. Util. Rev. Rfdg. 5.25% 3/1/14,
(AMBAC Insured) Aaa 2,500 2,450
Dade County Health Facs. Auth. Hosp. Rev.
(South Shore Hosp. & Med. Ctr.) Series A,
7.60% 8/1/24, (FHA Guaranteed) A+ 830 900
Dade County Wtr. & Swr. Sys. Rev. Rfdg.
5% 10/1/13, (FGIC Insured) Aaa 6,525 6,256
Florida Board of Ed. Cap. Outlay (Pub. Ed.)
Series C, 5.40% 6/1/10, (MBIA Insured) Aaa 5,000 5,019
Florida Muni. Pwr. Agcy. Rev. Rfdg.
(All Requirement Pwr. Supply) 6.25% 10/1/19,
(AMBAC Insured) (Pre-Refunded to
10/1/01 @ 102)(g) Aaa 2,000 2,230
Florida State Division Bond Fin. Dept. Gen. Svcs.
Rev. (Dept. Natural Resources-Preservation 2000)
Series A, 6.25% 7/1/10, (MBIA Insured) Aaa 4,750 5,106
Florida Tpk. Auth. Tpk. Rev. Rfdg. Series A,
5% 7/1/13, (FGIC Insured) Aaa 3,750 3,581
Jacksonville Health Facs. Auth. Ind. Dev.
Rev. Rfdg. (Cypress Village Proj.)
(Nat'l. Benevolent Assoc.) 7% 12/1/22 Baa1 2,000 2,075
Jacksonville Port Auth. Rev. (i):
5.625% 11/1/12 (f) Aaa 4,000 3,880
5.625% 11/1/18 (f) Aaa 5,700 5,465
Lakeland Elec. & Wtr. Rev. Rfdg. 6.50%
10/1/05, (FGIC Insured)(i) Aaa 5,000 5,562
Orange County Tourist Dev. Tax Rfdg. Series A,
6.50% 10/1/10, (AMBAC Insured) Aaa 5,000 5,494
Orlando & Orange County Expressway
Auth. Rev. Rfdg.:
(Sr. Lien) 5.25% 7/1/12, (AMBAC Insured) Aaa 3,100 3,065
(Jr. Lien) Series A, 5% 7/1/17, (FGIC Insured) Aaa 4,450 4,183
Palm Bay Util. Rev. Rfdg. (Palm Bay Util. Proj.)
5% 10/1/19, (MBIA Insured) Aaa 3,450 3,213
Palm Beach Cnty. Criminal Justice Facs.
Rev. Rfdg. 5.375% 6/1/10, (FGIC Insured) Aaa 1,825 1,873
Palm Beach Cnty. Wtr. & Swr. Rev.
5% 10/1/10, (MBIA Insured) Aaa 3,000 2,921
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
FLORIDA - CONTINUED
Reedy Creek Impt. Dist. Util. Rev. Rfdg.
Series 1, 5% 10/1/14, (MBIA Insured) Aaa $ 4,350 $ 4,160
Tampa Cap. Impt. Prog. Rev. Series A,
8.25% 10/1/18 AA 10,000 10,863
78,296
GEORGIA - 1.3%
Cobb County School Dist.
Unltd. Tax 5% 2/1/97 AA1 2,700 2,734
Georgia Gen. Oblig.:
Impt. Series B, 7.20% 3/1/05 Aaa 3,000 3,589
6.50% 12/1/01 Aaa 8,410 9,409
7.25% 7/1/05 Aaa 3,100 3,739
Series B:
6.10% 3/1/05 Aaa 2,000 2,220
7.50% 4/1/97 Aaa 2,000 2,092
23,783
HAWAII - 0.8%
Hawaii Gen. Oblig.:
5.125% 2/1/08 Aa 8,250 8,281
Rfdg. Series CI, 4.75% 11/1/09 Aa 7,000 6,589
14,870
IDAHO - 0.4%
Boise Urban Renewal Parking Agcy. Rev.
(Tax Increment) Series A, B, C, 8.125% 9/1/15 A 2,600 2,818
Idaho Falls Rfdg. Elec. (FGIC Insured):
0% 4/1/06 Aaa 2,000 1,227
0% 4/1/13 Aaa 2,850 1,147
Idaho Health Facs. Auth. Rev. 5.50%
12/1/07, (AMBAC Insured) Aaa 2,000 2,143
7,335
ILLINOIS - 5.0%
Chicago Ill Motor Fuel Tax Rev. Rfdg.
Series A, 5.375% 1/1/14, (AMBAC Insured) Aaa 4,000 3,940
Chicago Ill Rfdg. Series B,
5% 1/1/11, (AMBAC Insured) Aaa 7,200 6,858
Chicago O'Hare Int'l. Arpt. Spl. Facs. Rev. Rfdg.:
(Int'l. Terminal) Series A:
7.50% 1/1/17 (f) A 4,500 4,888
Rev. Rfdg. 5% 1/1/12 A1 16,840 16,019
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
ILLINOIS - CONTINUED
Chicago O'Hare Int'l. Arpt. Rev. Rfdg. (2nd Lien)
(Gen. Arpt. Proj.) Series A, 6.375% 1/1/15,
MBIA Insured) Aaa $ 4,500 $ 4,804
Illinois Edl. Facs. Auth. Rev. (Lewis University)
6% 10/1/24 Baa 5,000 4,981
Illinois Health Facs. Auth. Rev.:
(Memorial Hosp.):
6.875% 5/1/00 BBB 1,500 1,592
7.125% 5/1/10 BBB 4,000 4,035
(OSF Healthcare Sys.) 6% 11/15/13 A1 5,000 5,019
Illinois Health Facs. Auth. Rev. Rfdg.:
(Lutheran Gen. Health Sys.) Series C:
7% 4/1/14 A 1,500 1,691
6% 4/1/18 A 3,000 3,026
Lake County Forest Preserve Dist. Unltd.
Tax (Cap. Appreciation):
0% 12/1/07 Aa 10,440 5,598
0% 12/1/08 Aa 12,505 6,284
Metropolitan Pier & Exposition Auth. Dedicated
State Tax Rev. (McCormick Place Expansion Proj.)
Series A:
0% 6/15/07, (FGIC Insured) (c) Aaa 4,800 4,698
0% 6/15/09, (FGIC Insured) Aaa 10,000 4,813
0% 6/15/16, (FGIC Insured) (c) Aaa 11,820 8,422
Round Lake Beach Tax Increment Rev. Rfdg.
7.50% 12/1/13 - 5,000 5,144
91,812
INDIANA - 0.4%
Indianapolis Econ. Dev. Rev. Rfdg. & Impt.
(Nat'l. Benevolent Assoc.) 7.625% 10/1/22 Baa1 3,000 3,158
Indianapolis Resource Recovery Rev. Rfdg.
(Ogden Martin Sys. Inc. Proj.) 6.75% 12/1/07,
(AMBAC Insured)(i) Aaa 3,080 3,334
6,492
IOWA - 0.1%
Iowa Fin. Auth. Rev. 5.25% 5/1/15 A 1,500 1,481
KANSAS - 0.5%
Kansas City Util. Sys. Rev. (AMBAC Insured):
0% 9/1/10 (Escrowed to Maturity) (g) Aaa 3,825 1,779
0% 9/1/10 Aaa 2,865 1,293
Kansas Dept. Trans. Hwy. Rev. 7.25% 3/1/05 Aa 4,750 5,741
8,813
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
KENTUCKY - 1.7%
Jefferson County Cap. Projs. Corp. Rev.
(Muni. Multiple Rfdg. Lease) Series A,
0% 8/15/11 A1 $ 5,365 $ 2,307
Kenton County Arpt. Board Arpt. Rev.
(Spl. Facs. Delta Proj. A) 7.125% 2/1/21 (f) Ba1 17,500 18,441
Kentucky Tpk. Auth. Econ. Dev. Rd. Rev. Rfdg.
(Revitalization Proj.) 5.50% 7/1/08,
(AMBAC Insured) Aaa 1,500 1,558
Owensboro Elec. Lt. & Pwr. Rev. Series B,
0% 1/1/07, (AMBAC Insured) Aaa 10,000 5,612
Peery County Econ. Dev. Rev. Rfdg.
(The Kroger Co. Proj.) 6.60% 5/1/02 Ba2 2,435 2,578
Univ. Louisville Rev. Rfdg. (Consolidated
Edl. Bldgs.) Series I, 5.40% 5/1/10 A1 1,565 1,602
32,098
LOUISIANA - 2.1%
Lake Charles Hbr. & Term. Dist. Port Facs. Rev. Rfdg.
(Trunkline LNG Co. Proj.) Series 1992,
7.75% 8/15/22 Baa3 21,000 23,730
Louisiana Gen. Oblig. Series A, 6.75%
5/15/03, (MBIA Insured) Aaa 4,320 4,919
Louisiana Offshore Term. Auth. Deepwtr. Port Rev.
Rfdg. (1st Stage) (Loop, Inc. Proj.) Series E,
7.60% 9/1/10 A3 2,300 2,564
Monroe-West Monroe Pub. Trust Fin. Auth. Mtg.
Rev. Rfdg. (Cap. Appreciation)
Series C, 0% 8/20/14 - 9,000 2,824
St. James Parish Poll. Cont. Rev.
(B.F. Goodrich Proj.) 14.50% 12/1/11 Baa1 500 557
St. John Baptist Parish Sales Tax Dist. Rfdg.
Series 1989, 7.80% 12/1/14 Baa 2,700 3,031
St. Tammany Pub. Trust Fin. Auth. Rev. Rfdg.
(Cap. Appreciation) Series C, 0% 7/20/14 Aaa 4,650 1,436
39,061
MAINE - 0.5%
State Str. Hsg. Preservation Corp. Hsg. Rev.
(Multi-Family Proj.) Series A:
7.20% 1/1/02 A 620 650
7.375% 1/1/12 A 3,505 3,707
7.50% 1/1/19 A 4,700 4,976
9,333
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
MARYLAND - 0.3%
Howard County Mtg. Rev. (Heartlands Elderly
Apts. Proj.) 8.875% 12/1/10, (MBIA Insured)
(FHA Guaranteed) Aaa $ 250 $ 266
Maryland Gen. Oblig. 1st Series A-M,
6.50% 7/1/00 Aaa 3,000 3,281
Montgomery County Hsg. Opportunities
Commission Hsg. Rev. (Multi-Family)
Series B, 9.375% 7/1/15 Aa 445 455
Prince George's County Solid Waste Mgmt. Sys.
5.25% 6/15/13, (FSA Insured) Aaa 1,500 1,457
5,459
MASSACHUSETTS - 8.3%
Boston MA Wtr. & Swr. Commission Rev. Gen.
Sr. Series, Series A, 5.40% 11/01/08 A 2,000 2,027
Massachusetts Ed. Loan Auth. Rev. Issue E
Series B, (AMBAC Insured) (f):
6.05% 7/1/08 Aaa 4,115 4,352
6.15% 7/1/10 Aaa 1,650 1,730
6.25% 7/1/11 Aaa 1,000 1,049
6.30% 7/1/12 Aaa 1,000 1,045
Massachusetts Gen. Oblig.:
5% 8/1/06 A1 4,355 4,350
Series A:
Consolidated Loan 5% 1/1/12 A1 4,000 3,820
Rfdg. 6.25% 7/1/03 A1 8,200 9,071
Rfdg. 6.25% 7/1/04 A1 6,000 6,660
Series B, 5.40% 11/1/07, (MBIA Insured) Aaa 6,000 6,247
Massachusetts Health & Edl. Facs. Auth. Rev.:
(Baystate Medical Center) Series D,
5% 7/1/12, (FGIC Insured) Aaa 5,820 5,594
(1st Mtg.) (Fairview Extended Care) Series A:
10.125% 1/1/11 - 2,945 3,346
10.25% 1/1/21 - 6,400 7,272
(Harvard Univ.) Series P, 6.50% 11/1/03 Aaa 1,100 1,262
Massachusetts Hsg. Fin. Agcy. Rev. Rfdg.
(Rental) Series A, 6.65% 7/1/19,
(AMBAC Insured) Aaa 2,000 2,098
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Rev.:
(Atlanticare Med. Ctr.) Series A,
10.125% 11/1/14 - $ 7,000 $ 6,440
(Cap. Appreciation) (Massachusetts Biomedical)
Series A-1, 0% 8/1/03 A1 23,300 15,640
Series A-2:
0% 8/1/04 A1 5,000 3,163
0% 8/1/06 A- 26,800 14,874
0% 8/1/09 A- 15,800 7,071
0% 8/1/10 A- 11,000 4,648
(1st Mortgage Reeds Landing):
7.75% 10/1/20 - 1,300 1,337
8.625% 10/1/23 - 3,000 3,135
Massachusetts Muni. Wholesale Elec. Co. Pwr.
Supply Rev.:
Rfdg. Series A, 5.10% 7/1/08,
(AMBAC Insured) Aaa 3,575 3,588
5% 7/1/10, (AMBAC Insured) Aaa 3,680 3,597
5.45% 7/1/18, (AMBAC Insured) Aaa 10,000 9,750
Massachusetts Wtr. Poll. Abatement Trust Rev.
(Massachusetts Wtr. Recources Auth. Loan Prog.)
Series A, 5.45% 2/1/13 Aa 10,890 10,904
Massachusetts Univ. Ctfs. of Prtn.
(Telecommunications Sys.) Series A:
7.45% 11/1/97 BBB- 810 836
7.70% 5/1/99 BBB- 1,190 1,228
7.70% 11/1/99 BBB- 1,240 1,280
7.80% 5/1/00 BBB- 1,285 1,327
New England Ed. Loan Marketing Corp.
Rfdg. (Student Loan) Series A,
5.70% 7/1/05 (f) A1 4,000 4,110
152,851
MICHIGAN - 1.6%
Detroit Convention Facs. Rev. Rfdg.
(Cobo Hall Expansion Proj.) 5.25% 9/30/12 A 3,000 2,794
Detroit Hosp. Fin. Auth. Facs. Rev. (Michigan
Healthcare Corp. Proj.) 10% 12/1/20 (a) Caa 36,910 14,026
Michigan Hosp. Fin. Auth. Rev. Rfdg.
(Bay Med. Ctr.) Series A, 8.25% 7/1/12 Baa1 1,000 1,102
Michigan Hsg. Dev. Auth. Single Family Mtg.
Rev. Series A:
7.50% 6/1/15 AA+ 470 494
7.70% 12/1/16 AA+ 1,475 1,554
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
MICHIGAN - CONTINUED
Michigan South Central Pwr. Agcy. Series 1991,
6.75% 11/1/10 Baa1 $ 2,000 $ 2,128
Michigan Strategic Fund Ltd. Oblig. Rev.
(Mercy Svcs. for Aging Proj.) 9.40% 5/15/20 - 3,000 3,353
Western Townships Util. Auth. Swr. Disp. Sys.:
Ltd. Tax 8.20% 1/1/18 Aaa 2,000 2,220
Rfdg. 0% 1/1/05, (Cap. Guaranty Insured) Aaa 2,810 1,798
29,469
MINNESOTA - 0.9%
Centennial Independant School Dist. #12 Rfdg.
Series B, 4.875% 2/1/12, (FGIC Insured) Aaa 2,610 2,505
Minnesota Univ. Rfdg.
4.80% 8/15/03 Aa 10,000 10,050
Rochester Health Care Facs. Rev.
(Mayo Foundation/Mayo Med. Ctr.) Series I:
5.90% 11/15/09 AA+ 2,000 2,153
5.90% 11/15/10 AA+ 2,250 2,419
17,127
MISSISSIPPI - 0.5%
Hinds County Ctfs. of Prtn. (Welfare Dept. Proj.)
7.75% 3/1/09 (Pre-Refunded to
3/1/99 @ 102)(g) A 1,095 1,232
Hinds County Mtg. Rev. Rfdg. (Methodist Hosp. &
Rehabilitation) 5.60% 5/1/12,
(AMBAC Insured) Aaa 4,000 4,105
Mississippi Home Corp. Single Family Sr. Rev.
Rfdg. Series 1990 A, 9.25% 3/1/12,
(FGIC Insured) Aaa 450 491
Panola County Ind. Dev. Rev. Rfdg. (Kroger Co.)
7.125% 11/1/12 Ba2 3,250 3,372
9,200
MISSOURI - 0.8%
Kansas City School Dist. Bldg. Corp. Rev.
(Cap. Impt. Project) 5% 2/1/14,
(FGIC Insured) Aaa 2,330 2,216
Missouri Regional Convention & Sports Complex
Auth. (Convention & Sports Proj. Rfdg. A)
5.50% 8/15/13 A1 3,375 3,345
St. Louis Reg'l. Convention & Sports Complex
Auth. Series C, 7.90% 8/15/21 - 3,000 3,229
Sikeston Elec. Rev. Rfdg. 6.10% 6/1/06,
(MBIA Insured) Aaa 6,030 6,671
15,461
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
MONTANA - 0.4%
Montana Board of Investment Payroll Tax
(Workers Compensation) Series 1991,
6.875% 6/1/11, (MBIA Insured) Aaa $ 6,200 $ 6,766
NEBRASKA - 1.0%
Douglas County Hosp. Auth. #1 Rev.
(Immanuel Med. Ctr., Inc.) 6.90% 9/1/11,
(AMBAC Insured) Aaa 3,250 3,587
Nebraska Pub. Pwr. Dist. Rev. Rfdg.
(Pwr. Supply Sys.):
Series B, 5.25% 1/1/13, (MBIA Insured) Aaa 3,650 3,568
Series C, 5% 1/1/10, (MBIA Insured) Aaa 6,380 6,221
Omaha Rfdg. Unltd. Tax 6% 9/15/99 Aaa 1,100 1,172
Scotts Bluff County Hosp. Auth. #1 Hosp. Rev.
(Reg'l. West Med. Ctr. Proj.)
6.45% 12/15/04 A 3,000 3,263
17,811
NEVADA - 1.1%
Clark County Ind. Dev. Rev.
(Southwest Gas Corp.) Series A,
6.50% 12/1/33 (f) Baa3 19,500 19,695
NEW HAMPSHIRE - 0.2%
New Hampshire Tpk. Sys. Rev. Rfdg. Series A,
7% 11/1/06, (FGIC Insured) Aaa 2,500 2,950
NEW JERSEY - 2.0%
New Jersey Econ. Dev. Rev.:
Series A, 11% 12/15/17 - 14,445 14,445
Series B, 11% 12/15/17 (a) - 9,370 12
New Jersey Trans. Trust Fund Auth. (Trans. Sys.)
Series A, 6% 6/15/04, (AMBAC Insured) Aaa 17,800 19,447
Ocean County Gen. Impt. 5.15% 7/1/11 Aa 2,500 2,434
36,338
NEW MEXICO - 1.6%
Albuquerque Arpt. Rev. Rfdg. (AMBAC Insured)(i):
6.25% 7/1/03 Aaa 1,100 1,181
6.75% 7/1/10 Aaa 1,700 1,851
6.75% 7/1/12 Aaa 1,935 2,044
Farmington Poll. Cont. Rev. Rfdg. (Pub. Svc. Co.
of New Mexico San Juan Proj.) Series X,
5.90% 4/1/07 Ba2 12,640 12,450
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NEW MEXICO - CONTINUED
New Mexico Edl. Assistance Foundation Student
Loan Rev. 5.25% 4/1/05, (AMBAC Insured)(f) Aaa $ 4,900 $ 4,924
New Mexico Univ. Rev. Rfdg. Series A:
6.25% 6/1/12 A1 2,100 2,326
6% 6/1/21 A1 4,050 4,334
29,110
NEW YORK - 9.3%
Metropolitan Tran. Auth. Svc. Contract
(Commuter Facs.):
Series O, 5.75% 7/1/08 Baa1 1,000 1,021
Series O, 5.75% 7/1/13 Baa1 7,650 7,679
Metropolitan Trans. Auth. Trans. Facs. Rev. Rfdg.
Series K, (MBIA Insured):
6.30% 7/1/06 Aaa 3,500 3,951
6.30% 7/1/07 Aaa 5,000 5,612
New York City Ctfs. of Prtn. 4.90% 3/1/99 Baa1 2,965 2,958
New York City Ind. Dev. Agcy. (Spl. Facs.)
6.125% 1/1/24 A 5,000 5,031
New York City Rfdg. Series A,
6.375% 8/1/05 Baa1 5,000 5,237
New York State Dorm. Auth. Rev. Rfdg.
(State Univ. Edl. Facs.):
Series A:
6.50% 5/15/04 Baa1 3,000 3,255
5.50% 5/15/08 Baa1 2,000 2,000
5.50% 5/15/09 Baa1 4,000 3,980
5.875% 5/15/11 Baa1 7,000 7,201
5.50% 5/15/13 Baa1 6,000 5,865
Series B:
5.25% 5/15/05 Baa1 4,000 4,015
5.25% 5/15/10 Baa1 5,600 5,418
5.25% 5/15/11 Baa1 5,000 4,806
5% 5/15/18 Baa1 6,000 5,393
New York State Environmental Facs. Corp. Poll.
Cont. Rev. Rfdg. (State Wtr. Revolving Fund)
(New York City Muni. Wtr.) 5.75% 6/15/12 Aa 2,000 2,077
New York State Local Govt. Assistance Corp.:
Rfdg.:
Series C, 5.50% 4/1/17 A 26,600 26,567
Series E:
6% 4/1/14 A 9,300 9,928
5.25 4/1/16 A 11,500 11,198
Series A, 0% 4/1/08 A 2,000 1,047
Series B:
0% 4/1/08 A 5,000 2,619
6% 4/1/18 A 4,425 4,508
Series C, 6.50% 4/1/15 A 4,600 4,813
Series D, 5.375% 4/1/14 A 5,000 4,900
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NEW YORK - CONTINUED
New York State Mtg. Agcy. Rev.
(Homeowner Mtg.):
Series 39, 6% 10/1/17 Aa $ 5,200 $ 5,220
Series 48, 6.05% 4/1/17 (f) Aa 5,570 5,542
New York State Thruway Auth. Hwy. & Bridge
Trust Fund Series A, 6.25% 4/1/04,
(MBIA Insured) Aaa 2,345 2,609
New York State Tollway Auth. Gen. Rev.
(Spl. Oblig.) Series A, 0% 1/1/05 BBB 8,500 5,302
Suffolk County Wtr. Auth. Wtrwks. Rev. Rfdg.
(Sr. Lien) 5.10% 6/1/09, (MBIA Insured) Aaa 3,000 2,966
Triborough Bridge & Tunnel Auth. Rev. (Gen. Purp.):
Rfdg. Series A, 5% 1/1/12, (MBIA Insured) Aaa 2,475 2,357
Series X, 6% 1/1/14 Aa 4,750 4,851
169,926
NEW YORK & NEW JERSEY - 1.0%
New York & New Jersey Port (Delta Airlines, Inc.
Proj.) Series 1R, 6.95% 6/1/08 Ba1 17,000 18,403
NORTH CAROLINA - 0.9%
North Carolina Eastern Muni. Pwr. Sys. Rev.:
Rfdg.:
Series A, 6.25% 1/1/03 A 2,000 2,103
Series B, 7% 1/1/08 A 6,815 7,556
4.25% 1/1/00 (AMBAC Insured) Aaa 6,035 6,012
15,671
NORTH DAKOTA - 0.3%
Mercer County Poll. Cont. Rev. Rfdg.:
(Montana Dakota Utils. Co. Proj.)
6.65% 6/1/22, (FGIC Insured) Aaa 3,750 4,036
(Basin Elec. Pwr.) 2nd Series, 6.05% 1/1/19,
(AMBAC Insured) Aaa 1,900 1,966
6,002
OHIO - 1.2%
Eaton Ind. Dev. Rev. Rfdg. (Baxter Int'l., Inc.
Proj.) 6.50% 12/1/12 A3 2,605 2,787
Hamilton County Swr. Sys. Rev. Rfdg. & Impt.
Metropolitan Swr. Dist. Series A,
5.35% 12/1/07, (FGIC Insured) Aaa 2,475 2,577
Loveland City School Dist. Unltd. Tax
6.65% 12/1/15 A 3,500 3,824
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
OHIO - CONTINUED
Montgomery County Ind. Dev. Rev. Rfdg.
(The Kroger Co.) 7.45% 9/1/07 Ba2 $ 4,700 $ 5,006
Ohio Muni. Elec. Gen. Agcy. (Joint Venture 5)
5.375% 2/15/24, (AMBAC Insured) Aaa 3,750 3,698
Ohio State Bldg. Auth. (Workers Composition
Bldg. A) 4.75% 4/1/14 A 3,500 3,168
Warren County Hosp. Facs. Rev. Rfdg. & Impt.
(Otterbein Home Proj.) 7.20% 7/1/11,
LOC Fifth Third Bancorp Aa2 1,000 1,116
22,176
OKLAHOMA - 0.6%
Grand River Auth. Rev. Rfdg. 5.50% 6/1/09 (d) A 10,250 10,557
Valley View Hosp. Auth. Rev. 10% 10/1/14,
(HIB Insured) A 1,140 1,157
11,714
OREGON - 0.4%
Oregon Health Hsg. Ed. Cultural Auth. Rev.
(Lewis & Clark College):
Series A, 6.125% 10/1/24, (MBIA Insured) Aaa 1,000 1,054
6% 10/1/13, (MBIA Insured) Aaa 1,750 1,848
Portland Hosp. Facs. Auth. Hosp. Rev.
(Legacy Health Sys.) Series B, 6.625% 5/1/11,
(AMBAC Insured) Aaa 2,000 2,180
Portland Swr. Sys. Rev. Rfdg. Series A,
5.25% 3/1/10 A1 2,000 2,010
7,092
PENNSYLVANIA - 5.2%
Allegheny County Ind. Dev. Auth. Rev.
(Kmart Corp.) (Commercial Dev.) Series A,
11% 1/1/07 Baa1 2,430 2,424
Butler County Hosp. Auth. Rev. (North Hills
Passavant Hosp.) Series A, 6.80% 6/1/06,
(Cap. Guaranty Insured) Aaa 5,000 5,519
Cumberland County Muni. Auth. Rev.
(Carlisle Hosp.) 6.80% 11/15/23 Baa 4,600 4,588
Delaware County Auth. Rev.:
(First Mtg. Riddle Village Proj.):
7% 6/1/00 - 1,500 1,524
8.25% 6/1/22 - 3,000 3,221
9.25% 6/1/22 - 4,000 4,470
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
PENNSYLVANIA - CONTINUED
Harrisburg Auth. Wtr. Rev. 5.875%
6/18/15, (FGIC Insured) Aaa $ 8,000 $ 8,140
Northumberland County Auth. Commonwealth
Lease Rev. 0% 10/15/13, (MBIA Insured) Aaa 11,830 4,451
Pennsylvania Convention Ctr. Auth. Rev Rfdg.:
Series A:
6.60% 9/1/09 Baa 3,000 3,203
6.70% 9/1/14 Baa 5,750 6,109
6.75% 9/1/19 Baa 2,000 2,118
Pennsylvania Intergovernmental Coop. Auth. Spl.
Tax Rev. Rfdg. Series A, 5% 6/15/15 A 5,210 4,936
Philadelphia Wtr. & Wastewtr. Rev.:
Rfdg.:
Series D, 6.125% 7/15/08 Baa 4,000 4,100
5% 6/15/12, (FGIC Insured) Aaa 3,000 2,846
6.75% 8/1/04, (MBIA Insured) Aaa 2,000 2,303
6.75% 8/1/05, (MBIA Insured) Aaa 1,500 1,734
5.65% 6/15/12, (FGIC Insured) Aaa 20,000 20,150
Pittsburgh Wtr. & Swr. Auth. Wtr. & Swr. Sys.
Rev. Rfdg. Series A, 4.75% 9/1/16,
(FGIC Insured) Aaa 10,000 9,013
Wyoming Ind. Dev. Auth. Poll. Rfdg.
(Procter & Gamble Paper Proj.)
5.55% 5/1/10 Aa2 4,300 4,467
95,316
RHODE ISLAND - 0.5%
Rhode Island Depositors Econ. Protection Spl.
Oblig. Rfdg. Series A, 5.75% 8/1/12,
(MBIA Insured) Aaa 3,495 3,630
Rhode Island Health & Edl. Bldg. Corp. Rev. Rfdg.
(Higher Ed. Facs. Johnson & Wales Univ.)
Series A, 5.25% 4/1/16,
(Connie Lee Insured) Aaa 4,000 3,780
Rhode Island Hsg. & Mtg. Fin. Corp.
(Homeownership Opportunity) Series 3-A,
7.80% 10/1/10 Aa 1,000 1,060
8,470
SOUTH CAROLINA - 1.0%
Piedmont Muni. Pwr. Agcy. Elec. Rev. Rfdg.:
5.60% 1/1/09, (MBIA Insured) Aaa 5,240 5,489
5.50% 1/1/10, (MBIA Insured) Aaa 2,590 2,668
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
SOUTH CAROLINA - CONTINUED
South Carolina Gen. Oblig. Cap. Impt. Series A,
6.50% 3/1/00 Aaa $ 2,635 $ 2,866
South Carolina Pub. Svc. Auth. Rev.:
Rfdg. Series A, 6.25% 2/1/06,
(MBIA Insured)(i) Aaa 3,665 3,880
6.375% 7/1/21, (AMBAC Insured) Aaa 3,750 3,942
18,845
SOUTH DAKOTA - 0.5%
South Dakota Hsg. Dev. Auth. Series G,
4.25% 5/1/97 AA1 8,000 8,010
Spearfish School Dist. #40-2 Unltd. Tax
(Lawrence County) 7.30% 7/1/11
(Pre-Refunded to 7/1/01 @ 102)(g) A 1,500 1,729
9,739
TENNESSEE - 0.6%
Bradley County Ind. Dev. Board Ind. Dev. Rev.
Rfdg. (Kroger Co. - Peytons SE Proj.)
8.10% 5/1/12 Ba2 4,000 4,360
Shelby County Rfdg. Series A,
6.75% 4/1/04 Aa 3,000 3,405
Tennessee Gen. Oblig. Series A,
7% 3/1/03 Aaa 2,555 2,980
10,745
TEXAS - 6.7%
Austin Arpt. Sys. Rev. 6.20% 11/15/15,
(MBIA Insured)(f) Aaa 10,000 10,412
Corpus Christi Hsg. Fin. Corp. Single Family Mtg.
Rev. (Lomas & Nettleton Co.) Series A,
13.375% 6/1/13 AA- 15 16
Cypress-Fairbanks Independent Sch. Dist. Unltd.
Tax Rfdg. 0% 2/1/04 (PSF Guaranteed) Aaa 3,000 2,025
Dallas-Fort Worth Int'l. Arpt. Facs. Impt. Corp. Rev.
(AMR Corp.) 7.50% 11/1/25 Baa2 10,500 11,235
Dallas-Fort Worth Regl. Arpt. Rev. Rfdg.
(Joint Dallas/Fort Worth Intl. Arpt.) 6.50%
11/1/05, (FGIC Insured) Aaa 2,295 2,608
Dallas Hsg. Corp. Cap. Proj. Rev. Rfdg.
(Section 8 Assisted Projs.):
7.70% 8/1/05 A 1,100 1,163
7.85% 8/1/13 A 1,000 1,064
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
TEXAS - CONTINUED
Dallas Independent Sch. Dist. Rfdg. 0%
8/15/07, (PSF Guaranteed) Aaa $ 2,300 $ 1,262
East Texas Health Facs. Dev. Corp.
(Memorial Hosp. - Palestine):
7.25% 8/15/03 - 2,970 2,673
7.80% 8/15/18 - 2,440 2,153
Harris Cnty. Cultural & Ed. Facs. Fin. Corp. Rev.
(Space Ctr. Houston Proj.):
9% 8/15/00 - 6,200 1,550
9.25% 8/15/15 - 18,720 4,680
Harris Cnty. Health Facs. Dev. Hosp. Rev. Rfdg.
(Texas Children's Hosp. Proj.) 5.50% 10/1/16,
(MBIA Insured) Aaa 5,000 4,925
Houston Hsg. Auth. Rev. (Low Income Elderly Hsg.)
(1st Lien):
7.50% 7/1/16 - 420 436
7.50% 7/1/18 - 405 421
Lower Colorado River Auth. Rev.
(Escrowed to Maturity)(g):
Rfdg. (Priority) 0% 1/1/09, (MBIA Insured) Aaa 2,000 1,028
5.25% 1/1/15 Aaa 6,000 5,918
Lower Neches Valley Ind. Dev. Rev.
6.40% 3/1/30 Aa2 10,000 10,475
Port Arthur Hsg. Fin. Corp. Multi-Family Mtg. Rev.
(Port Arthur Udal Proj.) Series E, 9.625%
1/1/28, (FHA Guaranteed) AAA 475 489
Port Arthur Hsg. Fin. Corp. Single Family
Mtg. Rev. Rfdg. 8.70% 3/1/12 A 985 1,076
Port Dev. Corp. Ind. Rev. (Cargill, Inc. Proj.)
7.70% 3/1/07 Aa2 1,000 1,095
Round Rock Independent Sch. Dist. Series A,
7.50% 8/1/03, (PSF Guaranteed) Aaa 1,300 1,558
San Antonio Elec. & Gas Rev.:
Rfdg. 5% 2/1/09 Aaa 7,010 6,940
6% 2/1/14 AA1 2,500 2,562
5% 2/1/14 AA1 3,680 3,496
Tarrant County Wtr. Cont. & Impt. Rev. Rfdg.
(Dist. 1) 5% 3/1/09, (AMBAC Insured) Aaa 2,750 2,698
Texarkana Health Facs. Dev. Corp. Hosp. Rev.
(Wadley Regional Med. Ctr. Proj.) 7%
10/1/05, (MBIA Insured) Aaa 1,750 1,934
Texas A&M Univ. Permament Univ. Fund
5.50% 7/1/04 (i) Aaa 3,850 4,057
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
TEXAS - CONTINUED
Texas Gen. Oblig.:
Rfdg. (Pub. Fin. Auth.) Series A, 5.70% 10/1/03 Aa $ 5,620 $ 6,098
Rfdg. (Veterans Land) 7.40% 12/1/20 Aa 2,500 2,803
Series B, 5.25% 10/1/13 Aa 3,000 2,966
Texas Muni. Pwr. Agcy. Rev. Rfdg.
(Cap. Appreciation) 0% 9/1/05,
(AMBAC Insured) Aaa 13,000 8,044
Texas Wtr. Dev. Board Rev.
(Revolving Fund Sr. Lien):
5.25% 7/15/11 Aa 8,075 8,004
5.25% 7/15/15 Aa 6,000 5,887
123,751
UTAH - 2.8%
Intermountain Pwr. Agcy. Pwr. Supply Sys.
Rev. Rfdg.:
Series A:
5.60% 7/1/21, (AMBAC Insured) Aaa 5,000 4,956
Series B:
6.50% 7/1/04, (MBIA Insured)(i) Aaa 7,000 7,700
6.50% 7/1/05, (MBIA Insured)(i) Aaa 13,000 14,317
5.55% 7/1/11 Aa 20,000 19,975
6% 7/1/16, (MBIA Insured)(i) Aaa 5,000 5,081
52,029
VERMONT - 0.5%
Vermont Edl. & Health Bldgs. Fin. Agcy. Rev.
Rfdg. (Central Vermont Hosp. Proj.) Series A,
8% 10/1/09 Baa1 2,500 2,595
Vermont Muni. Bond Bank:
Series B, 7.20% 12/1/20 (Pre-Refunded
to 12/1/99 @ 102)(g) A 3,000 3,371
Series 1991-1, 6.875% 12/1/22 (Pre-Refunded
to 12/1/01 @ 102)(g) A 2,385 2,722
8,688
VIRGINIA - 0.9%
Fairfax Cnty. Univ. Rfdg. Series C,
5.40% 5/1/11 Aaa 2,750 2,781
Hopewell Ind. Dev. Auth. Resources Recovery
Rev. (Stone Container Corp.)
8.25% 6/1/16 - 4,350 4,796
Lynchburg Ind. Dev. Auth. Facs. 1st Mtg.
Rev. Rfdg. (Central Health, Inc.)
8.125% 1/1/16 A1 3,000 3,266
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
VIRGINIA - CONTINUED
Peninsula Ports Auth. Hosp. Facs. Auth. Rev.
Rfdg. (Whittaker Mem. Proj.) 8.70% 8/1/23,
(FHA Guaranteed) Aa $ 1,500 $ 1,616
Richmond Redev. & Hsg. Auth. Mtg. Rev.
(Multi-Family Hsg. Pinebrook Proj.) 9.25%
10/1/20, (GNMA Coll.) AAA 750 779
Virginia Beach Dev. Auth. Hosp. Facs. Rev.
(Virginia Beach Gen. Hosp. Proj.) 5.125%
2/15/18, (AMBAC Insured) Aaa 2,800 2,688
Virginia Hsg. Dev. Auth. Commonwealth Mtg.
Series B, Sub-series B-2, 7.625% 7/1/17 AA1 1,040 1,089
Virginia Resources Auth. Wtr. & Swr. Sys. Rev.
Series A, 7.70% 11/1/10 AA 180 199
17,214
WASHINGTON - 4.4%
Clark County Pub. Util. (Multi Purp. Proj. No. 1)
6% 1/1/08, (FGIC Insured) Aaa 2,825 3,058
Snohomish County (School Dist. 201) 6.75%
12/1/06, (AMBAC Insured) Aaa 2,405 2,793
Washington Gen. Oblig.:
Series A, 6.50% 7/1/03 Aa 3,595 4,040
Series B, 7% 9/1/05 (Motor Vehicle Fuel Tax) Aa 2,655 3,083
Washington Pub. Pwr. Supply Sys. Rev. Nuclear:
Proj. #1:
5.40% 7/1/12 Aa 10,000 9,450
Proj. #2:
Rfdg.: Series C:
0% 7/1/05 Aa 16,080 9,648
6.77% 7/1/10, (FGIC Insured) INFL (h) Aaa 7,500 7,463
5.40% 7/1/12 Aa 13,000 12,431
Proj. #3:
5.40% 7/1/12 Aa 31,000 29,295
81,261
WEST VIRGINIA - 0.1%
West Virginia School Bldg. Auth. Rev. (Cap. Impt.)
Series A, 6.75% 7/1/15 A 2,000 2,168
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
WYOMING - 0.7%
Natrona County Hosp. Rev. (Wyoming Med.
Ctr. Proj.) 8.125% 9/15/10 Baa1 $ 4,500 $ 4,950
Wyoming Farm Loan Board Cap. Facs.
Rev. (Escrowed to Maturity)(g):
0% 10/1/04 AA- 3,995 2,622
0% 10/1/05 AA- 3,995 2,467
0% 10/1/06 AA- 3,695 2,184
12,223
TOTAL MUNICIPAL BONDS
(Cost $1,643,221) 1,689,754
MUNICIPAL NOTES (E) - 7.9%
CALIFORNIA - 1.0%
California School Cash Reserve Program
(Authority Pool Bonds) TRAN Series 1995 A,
4.75% 7/3/96, LOC Industrial Bank of
Japan Ltd. (MBIA Insured) MIG 1 12,000 12,065
Ventura County TRAN 4.50% 7/2/96 MIG 1 6,700 6,738
18,803
COLORADO - 0.7%
Colorado Gen Oblig. TRAN 4.50% 6/27/96 - 12,000 12,076
FLORIDA - 0.4%
Florida Local Govt. Fin. Auth. Rev. (Pooled Loan)
Series A, 3.60% 3/1/96, LOC First Union
Natl. Bank of Florida, CP P-1 8,000 8,001
MARYLAND - 0.2%
Montgomery County Hsg. Opportunity
Commission Hsg. Rev. (Draper Lane Apts.)
4%, BPA Sumitomo Bank Ltd., (FGIC Insured)
VRDN (f) VMIG 1 4,200 4,200
MICHIGAN - 0.1%
Michigan Strategic Fund Poll. Cont. Rev. Rfdg.
(Consumers Pwr. Co. Proj.) Series 1988 A,
3.70%, LOC Union Bank of Switzerland, VRDN P-1 1,200 1,200
MINNESOTA - 0.1%
Minneapolis Hsg. Dev. Rev. Rfdg. Series 1989
LOC First Bank NA VRDN VMIG 1 1,000 1,000
MUNICIPAL NOTES (E) - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NEW YORK - 0.4%
Erie County Ind. Dev. Auth. Ind. Dev. Rev.
(The Holling Press, Inc.) Series 1989 F, 4%,
LOC Marine Midland Bank, VRDN (f) - $ 1,240 $ 1,240
New York City Gen. Oblig.
TRAN 4.50% 2/15/96 MIG 1 5,000 5,011
New York Envir. Facs. Corp. Research Recovery
Rev. (Hunting, Inc. Proj.) Series 1989,
3.90%, LOC Union Bank of Switzerland,
VRDN (f) - 1,300 1,300
7,551
NORTH CAROLINA - 0.8%
Craven Co. Ind. Facs. Res. Recovery Rev.
Bond Series 1989B Wood Energy LP LOC ABN
AMRO 3.85%, VRDN (f) - 1,600 1,600
Halifax County Ind. Facs. Poll. Cont. Facs.
Auth. (Westmoreland Hadson Proj.)
(Roanoke Valley Proj.) Series 1991, 4%,
LOC Cr. Suisse, VRDN (f) - 2,300 2,300
Wake County Ind. Facs. & Poll. Cont. Fing. Auth.
Rev. (Carolina Pwr. & Lt. Co.) Series B, 4.75%,
LOC Sumitimo Bank Ltd., VRDN - 11,000 11,000
14,900
PENNSYLVANIA - 0.4%
Pennsylvania Energy Dev. Auth. Rev.
(B&W Edensburg Proj.) Series 1986, 3.75%,
LOC Swiss Bank Corp., VRDN (f) VMIG 1 3,300 3,300
Pennsylvania Higher Ed. Assistance Agcy. Rev.
(Student Loan) VRDN (f):
Series 1988 A, 3.80%, LOC Fuji Bank VMIG 1 1,400 1,400
Series 1994 A, 3.80%, LOC Student Loan
Marketing Assoc. VMIG 1 2,400 2,400
Schuylkill Cnty. Ind. Dev. Auth. Rev. (Pine Grove
Landfill, Inc.) Series 1995, 4%,
LOC Meridian Bank NA, VRDN (f) - 1,000 1,000
8,100
SOUTH CAROLINA - 0.6%
South Carolina Jobs Econ. Dev. Auth. Rev.
(Wellman, Inc. Proj.) VRDN (f):
Series 1990, 4.05%, LOC Wachovia
Bank & Trust NA - 1,800 1,800
Series 1992, 4.05%, LOC Wachovia
Bank & Trust NA - 10,300 10,300
12,100
MUNICIPAL NOTES (E) - CONTINUED
MOODY'S RATINGS (B) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
TEXAS - 2.5%
Brazos River Auth. Poll. Cont. Rev. Rfdg.
(Texas Util Elec. Co.) Series 1995 C, 3.80%,
LOC Swiss Bank, VRDN (f) VMIG 1 $ 11,600 $ 11,600
Brazos River Hbr. Navigation Dist. of Brazoria
(Dow Chemical Co. Proj.) Series 1993,
3.90 5/1/23, VRDN (f) P-1 8,600 8,600
South Texas Higher Ed. Auth. Student Loan Rev.
Series 1995, 3.75%, LOC Student Loan
Marketing Assoc., VRDN (f) VMIG 1 17,000 17,000
Texas Gen. Oblig. TRAN Series 1995A,
4.75% 8/30/96 MIG 1 7,850 7,926
45,126
VIRGINIA - 0.7%
Richmond Ind. Dev. Auth. Rev. (Cogentrix
Richmond, Inc. Proj.) VRDN (f):
Series 1990 A, 4.10%, LOC Banque
Paribas - 7,900 7,900
Series 1991 A, 4.10%, LOC Banque
Paribas - 4,900 4,900
12,800
TOTAL MUNICIPAL NOTES
(Cost $145,856) 145,857
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,789,077) $ 1,835,611
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
(000S) (000S)
SOLD
350 U.S. Treasury Bond Futures Contracts December, 1995 $ 41,792 $
(1,460)
125 Municipal Bond Futures Contracts December, 1995 15,031 (669)
$ (2,129)
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 3.1%
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
INFL - Inverse Floating Rate Security
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
2. Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
3. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
4. Security was pledged to cover margin requirements for futures contracts.
At the period end, the value of securities pledged amounted to $10,557,000.
5. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
6. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
7. Security collateralized by an amount sufficient to pay interest and
principal.
8. 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.
9. 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 63.5% AAA, AA, A 66.1%
Baa 11.7% BBB 11.5%
Ba 3.9% BB 3.7%
B 0.0% B 0.0%
Caa 0.9% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.8%
The percentage not rated by either S&P or Moody's amounted to 4.9%. FMR has
determined that unrated debt securities that are lower quality account for
4.4% 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:
Electric Revenue 16.8%
General Obligation 15.5
Health Care 13.1
Transportation 11.9
Others (individually less than 10%) 42.7
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1995, the aggregate cost of investment securities for
income tax purposes was $1,789,330,000. Net unrealized appreciation
aggregated $46,281,000, of which $104,928,000 related to appreciated
investment securities and $58,647,000 related to depreciated investment
securities.
At November 30, 1995, the fund had a capital loss carryforward of
approximately $815,000 all of which will expire on November 30, 2002.
At November 30, 1995, the fund was required to defer approximately
$12,659,000 of losses on futures contracts.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) NOVEMBER 30, 1995
ASSETS
Investme $ 1,835,611
nt in
securiti
es, at
value
(cost
$1,789,
077) -
See
accom
panyin
g
schedu
le
Cash 1,044
Receivab 24,135
le for
invest
ments
sold
Interest 27,602
receiva
ble
TOTAL 1,888,392
ASSETS
LIABILITIE
S
Payable $ 27,890
for
invest
ments
purcha
sed
Regula
r
deliver
y
Delaye 55,997
d
deliver
y
Distributi 2,029
ons
payabl
e
Accrued 593
manag
ement
fee
Payable 411
for
daily
variatio
n on
futures
contrac
ts
Other 330
payabl
es and
accrue
d
expens
es
TOTAL 87,250
LIABILITI
ES
NET $ 1,801,142
ASSETS
Net
Assets
consist
of:
Paid in $ 1,768,342
capital
Accumul (11,605)
ated
undistri
buted
net
realize
d gain
(loss)
on
invest
ments
Net 44,405
unreali
zed
appreci
ation
(depre
ciation)
on
invest
ments
NET $ 1,801,142
ASSETS
, for
146,45
8
shares
outstan
ding
NET $12.30
ASSET
VALUE,
offering
price
and
redemp
tion
price
per
share
($1,801
,142 (divided by)
146,45
8
shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1995
INTEREST $ 110,887
INCOME
EXPENSE
S
Manage $ 7,127
ment
fee
Transfer 2,685
agent,
accoun
ting
and
custodi
an fees
and
expens
es .
Non-inter 13
ested
trustee
s'
compe
nsation
Registrati 103
on fees
Audit 63
Legal 36
Miscellan 11
eous
TOTAL 10,038
EXPEN
SES
NET 100,849
INTERES
T
INCOM
E
REALIZED
AND
UNREALIZ
ED GAIN
(LOSS)
Net
realize
d gain
(loss)
on:
Invest 14,257
ment
securiti
es
Future (6,692 7,565
s )
contrac
ts
Change
in net
unreali
zed
appreci
ation
(depre
ciation)
on:
Invest 183,807
ment
securiti
es
Future (1,988 181,819
s )
contrac
ts
NET GAIN 189,384
(LOSS)
NET $ 290,233
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
RESULTI
NG
FROM
OPERATI
ONS
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS YEAR ENDED YEAR ENDED
IN NOVEMBER 30, NOVEMBER 30,
THOUSAND 1995 1994
S
INCREASE
(DECREAS
E) IN NET
ASSETS
Operatio $ 100,849 $ 121,064
ns
Net
interest
income
Net 7,565 19,396
realize
d gain
(loss)
Chang 181,819 (287,600)
e in net
unreali
zed
appreci
ation
(depre
ciation)
NET 290,233 (147,140)
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
OPER
ATION
S
Distributi (100,849) (121,064)
ons to
shareh
olders
From
net
interest
income
From - (80,779)
net
realize
d gain
TOTAL (100,849) (201,843)
DISTRIB
UTIONS
Share 712,326 820,839
transac
tions
Net
procee
ds from
sales
of
shares
Reinve 72,092 150,837
stment
of
distribu
tions
Cost of (865,693) (1,057,850)
shares
redeem
ed
NET (81,275) (86,174)
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
SHAR
E
TRANS
ACTIO
NS
TOTAL 108,109 (435,157)
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
NET
ASSETS
Beginni 1,693,033 2,128,190
ng of
period
End of $ 1,801,142 $ 1,693,033
period
OTHER
INFORMATI
ON
Shares
Sold 60,596 67,736
Issued 6,087 12,114
in
reinves
tment
of
distribu
tions
Redee (73,582) (87,412)
med
Net (6,899) (7,562)
increas
e
(decre
ase)
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1995 1994 A 1993 1992 1991
SELECTED
PER-SH
ARE
DATA
Net asset $ 11.040 $ 13.230 $ 12.720 $ 12.690 $ 12.610
value,
beginni
ng
of
period
Income .677 .755 .764 .811 .845
from
Invest
ment
Operati
ons
Net
interest
income
Net 1.260 (1.690) .700 .190 .310
realize
d and
unreali
zed
gain
(loss)
Total 1.937 (.935) 1.464 1.001 1.155
from
invest
ment
oper
ations
Less (.677) (.755) (.764) (.811) (.845)
Distrib
utions
From
net
interest
income
From - (.500) (.190) (.160) (.230)
net
realize
d gain
Total (.677) (1.255) (.954) (.971) (1.075)
distribu
tions
Net asset $ 12.300 $ 11.040 $ 13.230 $ 12.720 $ 12.690
value,
end of
period
TOTAL 17.95% (7.74) 11.92% 8.21% 9.62%
RETURN %
RATIOS
AND
SUPPLE
MENTAL
DATA
Net $ 1,801 $ 1,693 $ 2,128 $ 2,075 $ 1,997
assets,
end of
period
(in
millions
)
Ratio of .57% .56% .56% .57% .56%
expens
es to
averag
e
net
assets
Ratio of 5.69% 6.21% 5.85% 6.40% 6.72%
net
interest
income
to
averag
e net
assets
Portfolio 50% 48% 53% 47% 44%
turnove
r rate
A EFFECTIVE DECEMBER 1, 1993, THE FUND 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, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
Fidelity High Yield Tax Free Portfolio (the fund) is a fund of Fidelity
Court Street Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. On December 14, 1995,
the Board of Trustees approved a change in the fund's name from Fidelity
High Yield Tax-Free Portfolio to Fidelity High Yield Tax-Free Fund. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. 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 of their purchase date 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.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes 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.
EXPENSES. Most expenses of the 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.
Distributions are declared daily and paid monthly from net interest income.
Distributions from realized gains, 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, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, market discount, capital loss carryforwards and
losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net interest income and realized
and unrealized gain (loss). Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
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. The 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. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the bond market and to fluctuations in
interest rates. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. Futures contracts
involve, to varying degrees, risk of loss in excess of the futures
variation margin reflected in the Statement of Assets and Liabilities. The
underlying face amount at value is shown in the schedule of investments
under the caption "Futures Contracts." This amount reflects each contract's
exposure to the underlying instrument at period end. Losses may arise from
changes in the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparties do not perform
under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options 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.
Purchases and sales of securities, other than short-term securities,
aggregated $843,409,000 and $965,227,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $380,735,000 and $371,717,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) receives a monthly fee that is calculated on the
basis of a group fee rate plus a fixed individual fund fee rate applied to
the average net assets of the fund. The group fee rate is the weighted
average of a series of rates and is based on the monthly average net assets
of all the mutual funds advised by FMR. The rates ranged from .1200% to
.3700% for the period. In the event that
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEES - CONTINUED
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted in
the same or a lower management fee. The annual individual fund fee rate is
.25%. For the period, the management fee was equivalent to an annual rate
of .40% of average net assets.
The Board of Trustees has approved a new group fee rate schedule with rates
ranging from .1100% to .3700%. Effective January 1, 1996, FMR voluntarily
agreed to implement this new group fee rate schedule as it results in the
same or a lower management fee.
DISTRIBUTION AND SERVICE PLAN.
Pursuant to the Distribution and Service Plan (the Plan), and in accordance
with Rule 12b-1 of the 1940 Act, FMR or the fund's distributor, Fidelity
Distributors Corporation (FDC), an affiliate of FMR, may use their
resources to pay administrative and promotional expenses related to the
sale of the fund's shares. Subject to the approval of the Board of
Trustees, the Plan also authorizes payments to third parties that assist in
the sale of the fund's shares or render shareholder support services. FMR
or FDC has informed the fund that payments made to third parties under the
Plan amounted to $16,000 for the period.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the custodian
and transfer and shareholder servicing agent for the fund. The Bank has
entered into a sub-contract with Fidelity Service Co. (FSC), an affiliate
of FMR, under which FSC performs the activities associated with the fund's
transfer and shareholder servicing agent and accounting functions. During
the period December 1, 1994 to December 31, 1994, the fund paid fees based
on the type, size, number of accounts and the number of transactions made
by shareholders. Effective January 1, 1995, the Board of Trustees approved
a revised transfer agent contract pursuant to which the fund pays account
fees and asset-based fees that vary according to account size and type of
account. FSC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. The accounting fee is based on the level
of average net assets for the month plus out-of-pocket expenses. For the
period, FSC received transfer agent and accounting fees amounting to
$2,119,000 and $460,000, respectively. The transfer agent fees were
equivalent to an annual rate of .12% of average net assets.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and the Shareholders of
Fidelity High Yield Tax-Free Portfolio:
We have audited the accompanying statement of assets and liabilities of
Fidelity Court Street Trust: Fidelity High Yield Tax-Free Portfolio,
including the schedule of portfolio investments, as of November 30, 1995,
and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are
the responsibility of the fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Court Street Trust: Fidelity High Yield Tax-Free Portfolio as
of November 30, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years
in the period then ended in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 4, 1996
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
TO WRITE FIDELITY
If more than one address is listed, 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.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
David Murphy, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY'S TAX-FREE BOND FUNDS
Aggressive Tax-Free
California Tax-Free High Yield
California Tax-Free Insured
High Yield Tax-Free
Insured Tax-Free
Limited Term Municipals
Massachusetts Tax-Free High Yield
Michigan Tax-Free High Yield
Minnesota Tax-Free
Municipal Bond
New York Tax-Free High Yield
New York Tax-Free Insured
Ohio Tax-Free High Yield
Spartan(registered trademark) Aggressive Municipal
Spartan California Intermediate Municipal
Spartan California Municipal High Yield
Spartan Connecticut Municipal High Yield
Spartan Florida Municipal Income
Spartan Intermediate Municipal
Spartan Maryland Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal High Yield
Spartan New York Intermediate Municipal
Spartan New York Municipal High Yield
Spartan Pennsylvania Municipal High Yield
Spartan Short-Intermediate Municipal
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)
SPARTAN(registered trademark)
(registered trademark)
CONNECTICUT
MUNICIPAL
FUNDS
ANNUAL REPORT
NOVEMBER 30, 1995
CONTENTS
CHECK PAGE NUMBERS !!!
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
(FORMERLY 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 FUND
(FORMERLY 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.
REPORT OF INDEPENDENT
ACCOUNTANTS 39 The auditors' opinion.
</TABLE>
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.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was generally very
positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving
for a college education, enables you to weather these ups and downs in a
long-term fund, which has higher potential returns. An intermediate-length
fund could be appropriate if your investment horizon is two to four years,
and a short-term bond fund could be the right choice if you need your money
in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
(FORMERLY 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
securities that have grown in value), and the effect of the $5 account
closeout fee on an average sized account. You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain fund
expenses, the past five years and life of fund total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Connecticut Municipal
Income Fund 19.40% 46.74% 93.64%
Lehman Brothers Municipal Bond Index 18.90% 51.82% n/a
Average Connecticut Tax-exempt
Municipal Bond Fund 18.66% 46.67% n/a
Consumer Price Index 2.47% 14.80% 33.22%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, 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, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Lehman Brothers Municipal Bond index - a broad gauge of the municipal bond
market. To measure how the fund's performance stacked up against its peers,
you can compare it to the average Connecticut tax-exempt municipal bond
fund, which reflects the performance of 23 Connecticut municipal bond funds
with similar objectives tracked by Lipper Analytical Services over the past
year. Both benchmarks include reinvested dividends and capital gains, if
any. Comparing the fund's performance to the consumer price index (CPI)
helps show how your fund did compared to inflation. (The CPI returns begin
on the month end closest to the fund's start date.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Connecticut Municipal
Income Fund 19.40% 7.97% 8.50%
Lehman Brothers Municipal Bond Index 18.90% 8.71% n/a
Average Connecticut Tax-exempt
Municipal Bond Fund 18.66% 7.96% n/a
Consumer Price Index 2.47% 2.80% 3.61%
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
Spartan CT Municipal Income
Lehman Bros. Muni. Bond
$20,605
$19,432
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Connecticut Municipal Income Fund on October 31, 1987, shortly after the
fund started. As the chart shows, by November 30, 1995, the value of your
investment would have grown to $19,432 - a 94.32% increase on your initial
investment. This assumes you still own the fund on November 30, 1995, 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 $20,605 - a 106.05% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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
YEARS ENDED NOVEMBER 30,
1995 1994 1993 1992 1991
Dividend return 6.62% 5.27% 6.29% 6.59% 6.65%
Capital appreciation
returns 12.78% -12.89% 5.52% 3.12% 1.77%
Total return 19.40% -7.62% 11.81% 9.71% 8.42%
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
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.74(cents) 29.96(cents) 61.70(cents)
Annualized dividend rate 5.19% 5.45% 5.73%
30-day annualized yield 4.83% - -
30-day annualized tax-equivalent yield 7.90% - -
</TABLE>
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 $11.12 over
the past month, $10.97 over the past six months and $10.77 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. 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% 1995 combined federal and state tax bracket but does not
reflect payment of the alternative minimum tax if applicable.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
(FORMERLY SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
In sharp contrast to much of
1994, the municipal bond market
posted strong returns for the 12
months ended November 30,
1995. For the period, the
Lehman Brothers Municipal
Bond Index - a broad measure
of the tax-free market - had a
total return of 18.90%. By
comparison, the Lehman
Brothers Aggregate Bond
Index - a proxy for
investment-grade taxable
bonds - had a total return of
17.64%. While the bankruptcy
of Orange County, California, in
December 1994 caused some
concern among investors,
tax-free bonds managed to
surge ahead of their taxable
counterparts in the first quarter of
1995 on signs of a slowing
economy and tamer inflation
expectations. By spring,
however, the muni bond market
began to underperform U.S.
Treasury securities when
Congress began consideration
of tax-code changes, some of
which threatened the
tax-exempt status of municipal
securities. This threat of tax
reform dampened enthusiasm in
the municipal bond market,
stalling the rally and helping
shorter maturity bonds to
outperform their longer
counterparts throughout the
spring and summer months. By
early fall, historically attractive
valuations relative to
Treasuries, weakening new
issuance, and stronger demand
from insurance companies and
retail buyers helped tax-free
bonds rebound.
An interview with Maureen Newman, Portfolio Manager of Spartan
Connecticut Municipal Income Fund
Q. HOW DID THE FUND PERFORM, MAUREEN?
A. Pretty well. For the 12-month period ended November 30, 1995, the fund
had a total return of 19.40%. For the same period, the average Connecticut
municipal fund, as tracked by Lipper Analytical Services, returned 18.66%.
Q. MUNICIPAL BONDS, LIKE OTHER TYPES OF BONDS, HAVE PERFORMED WELL THIS
YEAR COMPARED TO 1994. WAS THE FUND ABLE TO BENEFIT FROM THE COMEBACK IN
MUNIS?
A. To some extent, yes. The municipal bond market had a very strong first
quarter of 1995 despite problems such as the bankruptcy of Orange County,
California, in December of 1994. On the other hand, in the spring, the
market underperformed taxable bonds as the various tax reform proposals in
Washington - including the flat tax - posed a threat to the value of the
tax-exemption for municipal bonds. This slowed the flow of cash into
municipal bond mutual funds - a major player in the $1.2 trillion municipal
bond market. Now, munis seem to be moving back up again, helped in part by
an almost 12% decrease in issuance from 1994 levels. Also, in the third
quarter of 1995, we saw a lot of interest from large institutional
investors such as insurance companies because of attractive yields relative
to taxable bonds.
Q. DID THE TAX-REFORM DEBATE IN WASHINGTON AFFECT THE WAY YOU DISTRIBUTED
THE FUND'S ASSETS AMONG BONDS WITH VARIOUS MATURITIES?
A. During the spring, the threat of a flat tax caused the yield curve (the
graphical representation of the yields of various bond maturities) to
steepen. In other words, investors, fearing major tax-reform was on the
horizon, sought the relative safety of shorter maturity bonds. Because bond
prices move in the opposite direction of their yields, investors' buying of
short-term securities caused yields on short bonds to fall more than yields
on long bonds which, in turn, created a steep yield curve. We took
advantage of this by buying some bonds further out on the yield curve.
Q. DID THIS STRATEGY PAY OFF?
A. Yes, it did. First, when the yield curve steepens, it "pays" to extend
the fund's holdings to longer maturities. This means that on a risk/reward
basis, I am being compensated in yield for the extra risk of longer
maturity bonds. Secondly, in the last three months as tax-reform talk has
faded somewhat, the longer end of the curve has flattened tremendously,
resulting in more price appreciation for these bonds. We are now selling
these longer maturity bonds in order to move down the yield curve.
Q. SIX MONTHS AGO, YOU DISCUSSED HOW THE FUND'S 7.9% STAKE IN PUERTO RICO
BONDS HELPED THE FUND. HAS THERE BEEN ANY CHANGE IN THE PUERTO RICO BOND
POSITION?
A. Yes, I have reduced it. First, however, let me give some background on
part of my strategy this past year. About a year ago, I anticipated
potential problems arising from Connecticut's biennial budget process. I
knew this could cause the state's general obligation bonds to underperform.
Therefore, I purchased Puerto Rico bonds - which are tax-exempt in
Connecticut - and, at the time, represented good value. Over the next
couple of months, the Connecticut general obligation bonds underperformed
the market and the Puerto Rico bonds did well. Subsequently, I sold many of
the Puerto Rico bonds as they reached full value and, in turn, I bought
Connecticut bonds.
Q. HAS THE FUND'S POSITION IN HEALTH-CARE BONDS HELPED OR HURT THE FUND?
A. Our exposure to tax-exempt hospital bonds hurt the fund during the year
due to a couple of factors. First, the Medicare and Medicaid reductions
being considered in the current budget proposals in Washington have caused
a lot of uncertainty in the health care industry. Secondly, hospital bonds
historically tend to lag the municipal bond market when bond prices are
going up. On the other hand, the fund's investment in nursing home bonds
paid off nicely. I was able to sell them at very high prices, thus locking
in the strong performance these bonds have had this year.
Q. WHAT'S YOUR OUTLOOK FOR THE GENERAL MUNICIPAL BOND MARKET?
A. I expect tax-reform discussions to cause further volatility in the
market as we head into the presidential election year. I also expect the
supply of municipal bonds to continue to be light. With the budget
situation in Washington still a question mark and yields at historically
low levels, I don't think investors can expect the same price appreciation
municipal bonds enjoyed in 1995.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER,
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to provide high current
tax-free income for
Connecticut residents
START DATE: October 29, 1987
SIZE: as of November 30,
1995, more than $358 million
MANAGER: Maureen Newman,
since 1994; manager, Spartan
Florida Municipal Income
Fund, Spartan New Jersey
Municipal Income Fund, since
October 1995; manager,
Fidelity Michigan Tax-Free
High Yield Portfolio, since
1994, Fidelity Aggressive
Municipal Fund and Spartan
Arizona Municipal Income
Portfolio, 1994 to 1995; bond
analyst, 1985 to 1994; joined
Fidelity in 1985
(checkmark)
MAUREEN NEWMAN ON
THE CONNECTICUT ECONOMY:
"Let me first say that despite
Connecticut's problems over
the past few years, the state
still has the highest per capita
income in the country.
Additionally, the southwestern
part of the state continues to
enjoy the positive spillover
effects of its proximity to New
York City. That said, I
continue to have some
concerns about the state's
economy. In the short-term,
Bridgeport's already
depressed economy was hurt
by the defeat of a bill that
would have established a
casino in that city.
Additionally, the state's
economy continues to endure
the brunt of consolidation in
the insurance and defense
industries. For example, the
Travelers Group's recently
proposed acquisition of
Aetna's property and casualty
unit threatens to cut 1,500
jobs in Hartford. Job growth
through economic
development still does not
appear to be on the horizon.
"Due to this economic
uncertainty, I am focusing on
high-quality bonds with
dedicated revenue streams.
Therefore, the portfolio is
underweighted in Connecticut
general obligation bonds
relative to the overall
Connecticut bond market as
represented by the Lehman
Brothers Connecticut Index."
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
(FORMERLY SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO)
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF NOVEMBER 30, 1995
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
General Obligation 28.1 23.5
Health Care 15.0 26.4
Education 11.3 7.6
Special Tax 10.5 11.0
Housing 8.5 4.5
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1995
6 MONTHS AGO
Years 15.9 17.8
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF NOVEMBER 30, 1995
6 MONTHS AGO
Years 7.3 8.0
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
CAN ALSO INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THE ABOVE EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1995 AS OF MAY 31, 1995
Aaa 33.7%
Aa, A 44.6%
Baa 14.2%
Ba, B 2.2%
Non-rated 0.9%
Short-term
investments 4.4%
Aaa 19.7%
Aa, A 39.6%
Baa 24.1%
Ba, B 2.3%
Non-rated 9.7%
Short-term
investments 4.6%
Row: 1, Col: 1, Value: 33.7
Row: 1, Col: 2, Value: 44.6
Row: 1, Col: 3, Value: 14.2
Row: 1, Col: 4, Value: 3.2
Row: 1, Col: 5, Value: 1.9
Row: 1, Col: 6, Value: 4.4
Row: 1, Col: 1, Value: 19.7
Row: 1, Col: 2, Value: 39.6
Row: 1, Col: 3, Value: 24.1
Row: 1, Col: 4, Value: 2.3
Row: 1, Col: 5, Value: 9.699999999999999
Row: 1, Col: 6, Value: 4.6
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW ACCOUNT FOR 0.9% AND 9.7% OF THE FUND'S
INVESTMENTS AT NOVEMBER 30, 1995 AND MAY 31, 1995, RESPECTIVELY.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
(FORMERLY SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO)
INVESTMENTS NOVEMBER 30, 1995
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 95.6%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED)(C) AMOUNT (NOTE 1)
CONNECTICUT - 89.2%
Branford Gen. Oblig. Unltd. Tax:
7% 6/15/08 (FGIC Insured) Aaa $ 500,000 $ 591,875
7% 6/15/09 (FGIC Insured) Aaa 500,000 591,875
Bridgeport Gen. Oblig.:
Series A:
5.40% 9/1/08 (AMBAC Insured) Aaa 550,000 554,125
5.50% 9/1/09 (AMBAC Insured) Aaa 550,000 554,125
5.60% 9/1/10 (AMBAC Insured) Aaa 550,000 556,188
5.70% 9/1/11 (AMBAC Insured) Aaa 550,000 556,188
Series B, 7.75% 11/15/10 Ba1 3,235,000 3,534,238
8.75% 8/15/05 (FGIC Insured) Aaa 570,000 737,438
Bridgeport Gen. Oblig. Unltd. Tax Series A:
7.20% 3/1/98 Ba1 930,000 971,850
7.40% 3/1/00 Ba1 1,080,000 1,163,700
7.25% 6/1/02 Ba1 565,000 607,375
7.625% 1/15/09 Ba1 1,500,000 1,605,000
Brookfield Gen. Oblig.:
5.25% 7/15/10 Aa 200,000 201,750
5.25% 7/15/11 Aa 200,000 200,000
5.25% 7/15/12 Aa 200,000 198,500
5.25% 7/15/13 Aa 190,000 188,575
Canterbury Gen. Oblig. Unltd. Tax:
7.20% 5/1/05 A 350,000 405,125
7.20% 5/1/06 A 195,000 226,444
Cheshire Gen. Oblig. Unltd. Tax:
6.90% 2/15/06 Aa 100,000 118,250
6.90% 2/15/07 Aa 100,000 118,625
6.90% 2/15/08 Aa 100,000 119,000
Connecticut Clean Wtr. Fund Rev.:
Series 1991, 7% 1/1/11 Aa 2,500,000 2,787,500
6.80% 7/1/05 Aa 1,000,000 1,108,750
5.875% 4/1/08 Aa 1,000,000 1,080,000
6% 10/1/12 (d) Aa 6,000,000 6,532,500
Connecticut Dev. Auth. Health Care Rfdg.
(Duncaster, Inc. Proj.) 6.75% 9/1/15 Aa3 3,000,000 3,210,000
Connecticut Dev. Auth. Poll. Cont. Rev.:
(New England Pwr. Co. Proj.)
7.25% 10/15/15 A1 3,000,000 3,258,750
(United Illuminating Co. Proj.) 9.50% 6/1/16 BBB- 2,625,000 2,753,441
Connecticut Dev. Auth. Rev. (Hartford Civic Ctr.)
Series A:
6% 11/15/07 A1 1,525,000 1,662,250
6% 11/15/08 A1 1,525,000 1,652,719
6% 11/15/08 A1 1,525,000 1,658,438
4.75% 11/15/13 A1 1,525,000 1,391,563
Connecticut Dev. Auth. Wtr. Facs. Rev. Rfdg.
(Bridgeport Hydraulic Co. Proj.)
7.25% 6/1/20 A+ 1,000,000 1,101,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED)(C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Gen. Oblig.:
Rfdg. Series B, 5.30% 3/15/07 Aa $ 1,500,000 $ 1,543,125
(Cap. Appreciation College Savings Plan):
Series A, 0% 12/1/07 Aa 4,000,000 2,195,000
Series B:
0% 11/1/06 Aa 2,800,000 1,638,000
Unltd. Tax:
0%, 12/15/10 Aa 2,428,000 1,101,705
0% 11/1/09 Aa 7,390,000 3,584,150
(College Savings Plan):
Series 1991 A, 0% 5/15/10 Aa 1,025,000 480,469
Series A:
0% 5/15/07 Aa 2,250,000 1,268,438
0% 5/15/10 Aa 7,980,000 3,740,625
0% 11/15/10 Aa 4,460,000 2,034,875
0% 5/15/11 Aa 3,350,000 1,478,188
Series A:
6.10% 3/15/02 Aa 3,000,000 3,262,500
7% 3/15/03 Aa 5,000,000 5,743,750
Series B:
6% 10/1/05 Aa 5,000,000 5,481,250
5.50% 10/1/20 Aa 1,525,000 1,595,531
5% 6/15/98 Aa 1,000,000 1,020,000
5% 12/15/98 Aa 4,000,000 4,090,000
Connecticut Health & Edl. Facs. Auth. Rev.:
Rfdg. (Lawrence & Memorial Hosp.) Series D,
5% 7/1/13 (MBIA Insured) Aaa 2,000,000 1,882,500
Rfdg. (Quinnipiac College) Series D:
6% 7/1/13 BBB- 3,750,000 3,600,000
6% 7/1/23 BBB- 3,975,000 3,731,531
(Bristol Hosp.) Issue A:
7% 7/1/09 (MBIA Insured) Aaa 1,750,000 1,942,500
7% 7/1/20 (MBIA Insured) Aaa 4,180,000 4,660,700
(Connecticut College) Issue B, 6.625%
7/1/11 (MBIA Insured) Aaa 1,200,000 1,297,500
(Kent School) Series B:
3.70% 7/1/96 (MBIA Insured) Aaa 200,000 200,028
3.90% 7/1/97 (MBIA Insured) Aaa 250,000 250,000
4% 7/1/98 (MBIA Insured) Aaa 200,000 199,750
4.125% 7/1/99 (MBIA Insured) Aaa 325,000 324,594
4.30% 7/1/00 (MBIA Insured) Aaa 300,000 299,625
4.40% 7/1/01 (MBIA Insured) Aaa 250,000 249,688
4.50% 7/1/02 (MBIA Insured) Aaa 305,000 304,619
4.60% 7/1/03 (MBIA Insured) Aaa 150,000 149,813
4.70% 7/1/04 (MBIA Insured) Aaa 500,000 500,000
4.875% 7/1/05 (MBIA Insured) Aaa 400,000 402,000
5% 7/1/06 (MBIA Insured) Aaa 500,000 503,750
5.10% 7/1/07 (MBIA Insured) Aaa 265,000 266,325
5.25% 7/1/08 (MBIA Insured) Aaa 305,000 307,669
5.375% 7/1/09 (MBIA Insured) Aaa 845,000 854,506
5.40% 7/1/10 (MBIA Insured) Aaa 865,000 868,244
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED)(C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Edl. Facs. Auth. Rev. - continued
(Kent School) Series B - continued
5.50% 7/1/15 (MBIA Insured) Aaa $ 4,575,000 $ 4,580,719
5.40% 7/1/23 (MBIA Insured) Aaa 3,000,000 2,925,000
(Lutheran Gen. Health Care Sys.)
7.375% 7/1/19 Aaa 3,195,000 3,977,775
(New Britain Mem. Hosp.) Series A, 7.75%
7/1/22 BBB- 16,900,000 18,188,625
(Quinnipiac College) Series C, 7.75% 7/1/20
(Pre-Refunded to 7/1/00 @102)(e) BBB- 1,000,000 1,158,750
(Sacred Heart Univ.) Series A, 6.85% 7/1/22,
LOC Fleet Nat'l. Bank A 1,000,000 1,047,500
(Sharon Healthcare, Inc.) Series A:
8.75% 7/1/06
(Pre-Refunded to 7/1/01 @103)(e) AAA 450,000 555,750
9% 7/1/13
(Pre-Refunded to 7/1/01 @103)(e) AAA 1,300,000 1,621,750
9.20% 7/1/21
(Pre-Refunded to 7/1/01 @103)(e) AAA 1,500,000 1,884,375
(St. Francis Hosp. & Medical Ctr.) Series C,
5% 7/1/23 (FGIC Insured) Aaa 1,000,000 925,000
(St. Mary's Hosp.) Issue B:
7.60% 7/1/03 Baa 900,000 960,750
7.80% 7/1/09 (AMBAC Insured) Baa 4,525,000 4,756,906
(St. Raphael Hosp.) Series H:
6.50% 7/1/11 (AMBAC Insured) Aaa 2,780,000 3,169,200
6.50% 7/1/13 (AMBAC Insured) Aaa 3,125,000 3,609,375
5.25% 7/1/14 (AMBAC Insured) Aaa 4,400,000 4,290,000
(The Griffin Hosp.) Series A, 6% 7/1/13 Baa1 850,000 819,188
(Yale Univ.) 5.929% 6/10/30 Aaa 14,000,000 14,332,500
(Yale-New Haven Hosp.) Series F, 7.10%
7/1/25 (MBIA Insured) Aaa 5,000,000 5,581,250
Connecticut Higher Ed. Supplemental Loan
Auth. Rev.:
Series A:
7.375% 11/15/05 (b) A1 535,000 568,438
7.50% 11/15/10 (b) A1 1,855,000 1,977,894
(Family Ed. Loan Prog.) Series A, 7.20%
11/15/10 (b) A 910,000 978,250
Connecticut Hsg. Fin Auth.:
Series E, Subseries E-1, 6.30% 5/15/17 Aa 1,950,000 2,003,625
(Hsg. Mtg. Fin. Prog.):
Series A, Subseries A-2, 6.45% 5/15/22 Aa 5,500,000 5,671,875
Series B:
Sub-Series B1:
7.55% 11/15/08 Aa 510,000 552,075
6.125% 5/15/18 Aa 4,650,000 4,748,813
6.20% 5/15/12 Aa 3,000,000 3,082,500
Series C, 7.625% 11/15/17 Aa 530,000 544,575
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED)(C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Hsg. Fin Auth. - continued
(Hsg. Mtg. Fin. Prog.) - continued
Series E - continued
6.20% 5/15/14 Aa $ 1,000,000 $ 1,027,500
8.75% 11/15/18 Aa 4,455,000 4,656,678
Series F, Subseries F-1, 6% 5/15/17 Aa 1,500,000 1,518,750
6.05% 5/15/17 Aa 3,600,000 3,654,000
5.45% 11/15/08 Aa 1,635,000 1,643,175
Connecticut Muni. Elec. Energy Coop. Pwr.
Supply Sys. Rev. Series A, 5% 1/1/18,
(MBIA Insured) Aaa 5,555,000 5,263,363
Connecticut Resource Recovery Rev.:
(American Refuse Fuel Co.)
8.10% 11/15/15 (b) A2 4,500,000 5,006,250
5.25% 11/15/08 (MBIA Insured)(f) Aaa 8,000,000 7,770,000
5.375% 11/15/10 (MBIA Insured)(f) Aaa 1,000,000 962,500
Connecticut Spl. Tax Oblig. Rev.:
Rfdg. (Trans. Infrastructure):
Series 1993 A, 5.375% 9/1/08 A1 6,705,000 6,881,006
Series A, 5.25% 9/1/07 A1 2,165,000 2,213,713
(Trans. Infrastructure ):
Series A:
6.50% 6/1/03 A1 2,800,000 3,125,500
7.125% 6/1/10 A1 3,550,000 4,242,250
Series B:
0% 6/1/08 A1 3,500,000 1,833,125
6.15% 9/1/09 A1 1,500,000 1,648,125
6.50% 10/1/10 A1 3,250,000 3,684,688
6.50% 10/1/12 A1 3,500,000 3,968,125
6.125% 9/1/12 A1 5,000,000 5,456,250
Eastern Connecticut Resource Recovery Auth.
Solid Waste Rev.
(Wheelabrator Lisbon Proj.) Series A :
5.50% 1/1/15 (b) A 8,000,000 7,530,000
5.50% 1/1/20 (b) A 3,000,000 2,782,500
5% 1/1/04 (b) A 1,000,000 977,500
Franklin Gen. Oblig. Unltd. Tax:
7.30% 3/15/04 A 225,000 256,781
7.30% 3/15/05 A 225,000 259,313
7.30% 3/15/06 A 225,000 262,125
Hartford County Metropolitan Dist. Gen. Oblig.
6.20% 11/15/09 Aa1 250,000 277,813
Hartford County Metropolitan Dist. Gen. Oblig.
School Boards Unltd. Tax 9.50% 6/1/03 Aa1 100,000 130,125
Manchester Redev. Agcy. Multi-Family Hsg.
Dev. Rfdg. (Bennet Hsg. Dev.)
7.20% 12/1/18 - 1,545,000 1,589,419
Meriden Gen. Oblig. Unltd. Tax
7% 10/1/07(MBIA Insured) Aaa 500,000 593,125
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED)(C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Milford Gen. Oblig.:
5.20% 1/15/11 Aa $ 550,000 $ 545,188
5.20% 1/15/13 Aa 500,000 491,875
Unltd. Tax:
6.70% 2/1/05 Aa 400,000 462,500
6.70% 2/1/08 Aa 315,000 367,369
Monteville Gen. Oblig.:
7% 3/15/13 Aa 220,000 265,100
7% 3/15/14 Aa 220,000 266,750
7% 3/15/15 Aa 210,000 255,938
Unltd. Tax 6.30% 3/1/10 Aa 405,000 456,131
Naugatuck Gen. Oblig. Unltd. Tax:
7.25% 9/1/04 (MBIA Insured) Aaa 215,000 255,313
6.90% 6/15/07 (FGIC Insured) Aaa 485,000 566,844
7.40% 9/1/07 (MBIA Insured) Aaa 370,000 449,550
7.40% 9/1/08 (MBIA Insured) Aaa 370,000 450,938
New Britain Gen. Oblig.:
Series B, 6% 3/1/12 (MBIA Insured) Aaa 2,000,000 2,167,500
5% 2/1/12 (MBIA Insured) Aaa 885,000 865,088
5% 2/1/13 (MBIA Insured) Aaa 885,000 855,131
7% 4/1/07 (MBIA Insured) Aaa 580,000 678,600
Unltd. Tax:
Rfdg. 6% 2/1/12 (MBIA Insured) Aaa 400,000 433,000
7% 4/1/08 (MBIA Insured) Aaa 580,000 682,225
New Haven Facs. Rev. (Easter Seal Goodwill
Rehabilitation Proj.) 8.875% 4/1/16 - 1,565,000 1,647,163
New Haven Gen. Oblig.:
Rfdg. Series A:
5% 8/1/07 (FGIC Insured) Aaa 1,000,000 1,002,500
5% 8/1/08 (FGIC Insured) Aaa 2,720,000 2,703,000
5% 8/1/09 (FGIC Insured) Aaa 1,775,000 1,746,156
Series A, 7.40% 3/1/12 Baa 1,000,000 1,083,750
7% 2/15/03 (FGIC Insured) Aaa 1,000,000 1,153,750
7% 2/15/04 (FGIC Insured) Aaa 1,150,000 1,338,313
7% 2/15/05 (FGIC Insured) Aaa 1,250,000 1,465,625
8.25% 8/15/01 Baa 3,280,000 3,813,000
Newington Gen. Oblig. Unltd. Tax:
6.50% 2/1/06 A1 320,000 358,800
6.60% 2/1/07 A1 200,000 226,750
North Haven Gen. Oblig. Unltd. Tax 7%
10/1/08 Aa 375,000 445,313
North Thompsonville Fire Dist. #10:
6.75% 6/1/07 (MBIA Insured) Aaa 180,000 209,475
6.75% 6/1/08 (MBIA Insured) Aaa 190,000 221,350
6.75% 6/1/09 (MBIA Insured) Aaa 200,000 236,250
6.75% 6/1/10 (MBIA Insured) Aaa 215,000 253,431
6.75% 6/1/11 (MBIA Insured) Aaa 230,000 270,250
Norwalk Hsg. Auth. Mtg. Rev. (Monterey Village)
Series 1985 B, Section 8, 9% 11/1/99 BBB 145,000 150,619
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED)(C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Plainville Gen. Oblig.:
6.60% 8/15/08 A1 $ 250,000 $ 284,375
Unltd. Tax:
6.60% 8/15/09 A1 250,000 285,938
6.60% 8/15/10 A1 250,000 286,250
6.60% 8/15/11 A1 250,000 287,188
South Central Connecticut Reg. Wtr. Sys. Auth. Rev.
11th Series, 5.625% 8/1/05 (FGIC Insured) Aaa 4,000,000 4,285,000
Stamford Gen. Oblig. Unltd. Tax:
6.60% 1/15/07 Aaa 295,000 343,306
6.60% 1/15/08 Aaa 1,480,000 1,724,200
6.60% 1/15/09 Aaa 1,000,000 1,165,000
7% 6/15/08 (FGIC Insured) Aaa 500,000 589,375
Thomaston Gen. Oblig. Unltd. Tax
6.50% 8/1/09 A 210,000 234,937
Vernon Gen. Oblig. Unltd. Tax:
7.10% 10/15/07 A1 250,000 301,249
7.10% 10/15/08 A1 250,000 301,562
Voluntown Gen. Oblig. Unltd. Tax:
6.75% 10/1/03 A 210,000 234,412
6.75% 10/1/04 A 210,000 235,987
6.80% 10/1/06 A 210,000 240,974
6.80% 10/1/07 A 210,000 239,924
6.80% 10/1/08 A 210,000 245,174
6.80% 10/1/09 A 185,000 215,524
West Haven Gen. Oblig. Impt. Unltd. Tax
6.70% 2/15/04 (MBIA Insured) Aaa 710,000 812,949
Winchester Gen. Oblig. Unltd. Tax:
7.10% 11/15/06 A1 125,000 146,562
7.10% 11/15/08 A1 110,000 130,487
Wolcott Gen. Oblig. Unltd. Tax:
7% 6/15/09 (FGIC Insured) Aaa 445,000 517,868
7% 6/15/10 (FGIC Insured) Aaa 440,000 513,149
Woodstock Spl. Oblig. Rev. (Woodstock Academy)
7% 3/1/08 (AMBAC Insured) Aaa 725,000 807,468
322,045,905
PUERTO RICO - 6.1%
Puerto Rico Commonwealth Gen. Oblig.:
Unltd. Tax 6.40% 7/1/11 Baa1 2,000,000 2,152,500
Unltd. Tax Series 1991, 7.30% 7/1/20 Baa1 2,500,000 2,865,624
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Rev. Rfdg. Series V, 6.625% 7/1/12 Baa1 1,750,000 1,881,249
Puerto Rico Elec. Pwr. Auth. Rev:
Rfdg. Series W:
6.50% 7/1/05 (MBIA Insured) Aaa 6,000,000 6,780,000
7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,350,000
7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,350,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED)(C) AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Ind. Med. & Environmental Poll. Ctl.
Facs. Fing. Auth. Rev. (Motorola,Inc.)
Series A, 6.75% 1/1/14 Aa3 $ 1,285,000 $ 1,394,224
Puerto Rico Elec. Pwr. Auth. Pwr. Resources Auth. Pwr.
Rev. Rfdg. Series N, 7.125% 7/1/14
(Escrowed to Maturity)(e) Baa1 1,965,000 2,188,518
21,962,115
GUAM - 0.3%
Guam Arpt. Auth. Gen. Rev. Series B, 6.40%
10/1/05 (b) BBB 1,250,000 1,270,313
TOTAL MUNICIPAL BONDS
(Cost $324,316,755) 345,278,333
MUNICIPAL NOTES (A) - 4.4%
CONNECTICUT - 4.4%
Connecticut Dev. Auth. (Light & Pwr. Co.
Proj. 1993) Series A, 4.10%,
LOC Deutsche Bank, VRDN VMIG 1 10,900,000 10,900,000
Connecticut Spl. Assessment Unemployment Rev.
Series 1993B, 3.65%,
LOC Mitsubishi Bank Ltd., VRDN VMIG 1 4,850,000 4,850,000
TOTAL MUNICIPAL NOTES
(Cost $15,750,000) 15,750,000
TOTAL INVESTMENTS - 100%
(Cost $340,066,755) $ 361,028,333
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SOLD
50 Municipal Bond Contracts Mar. 1996 $ 5,962,500 $ (32,891)
125 30 Year U.S. Treasury Bond Contracts Dec. 1995 14,925,781 (528,165)
$ (561,056)
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 5.8%
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.
(c) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(d) A portion of the Security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $3,571,100.
(e) Security collateralized by an amount sufficient to pay interest and
principal.
(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 73.5% AAA, AA, A 77.2%
Baa 5.7% BBB 9.9%
Ba 2.2% BB 2.2%
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 0.9%. FMR has
determined that unrated debt securities that are lower quality account for
0.9% 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:
General Obligation 28.1%
Health Care 15.0
Education 11.3
Special Tax 10.5
Others
(individually less than 10%) 35.1
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1995, the aggregate cost of investment securities for
income tax purposes was $340,072,735. Net unrealized appreciation
aggregated $20,955,598 of which $21,884,619 related to appreciated
investment securities and $929,021 related to depreciated investment
securities.
At November 30, 1995, the fund was required to defer $2,575,125 of losses
on futures contracts.
At November 30, 1995, the fund had a capital loss carryforward of
approximately $2,543,885 all of which will expire on November 30, 2003.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
(FORMERLY SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO)
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
1.ASSETS
Investme $ 361,028,333
nt in
securiti
es, at
value
(cost
$340,0
66,755)
- -
See
accom
panyin
g
schedu
le
Receivab 3,044,955
le for
invest
ments
sold
Interest 5,432,065
receiva
ble
2.TOTAL 369,505,353
ASSETS
3.LIABILIT
IES
Payable $ 270,254
to
custodi
an
bank
Payable
for
invest
ments
purcha
sed:
Delaye 8,673,710
d
deliver
y
Regula 765,771
r
deliver
y
Payable 309,447
for fund
shares
redeem
ed
Distributi 330,326
ons
payabl
e
Accrued 160,809
manag
ement
fee
Payable 146,094
for
daily
variatio
n on
futures
contrac
ts
4.TOTAL 10,656,411
LIABILITI
ES
5.NET $ 358,848,942
ASSETS
Net
Assets
consist
of:
Paid in $ 343,012,354
capital
Accumul
ated (4,563,934)
undistri
buted
net
realize
d gain
(loss)
on
invest
ments
Net 20,400,522
unreali
zed
appreci
ation
(depre
ciation)
on
invest
ments
6.NET $ 358,848,942
ASSETS
, for
32,042,
676
shares
outstan
ding
7.NET $11.20
ASSET
VALUE,
offering
price
and
redemp
tion
price
per
share
($358,8
48,942
(divided by)
32,042,
676
shares)
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1995
8.INTERES $ 21,430,286
T INCOME
9.EXPEN
SES
Manage $ 1,875,183
ment
fee
Non-inter 1,537
ested
trustee
s'
compe
nsation
10.TOT 1,876,720
AL
EXPEN
SES
11.NET 19,553,566
INVEST
MENT
INCOM
E
12.REALI
ZED AND
UNREALIZ
ED GAIN
(LOSS)
Net
realize
d gain
(loss)
on:
Invest 304,500
ment
securiti
es
Future (1,895,427) (1,590,927)
s
contrac
ts
Change
in net
unreali
zed
appreci
ation
(depre
ciation)
on:
Invest 42,188,429
ment
securiti
es
Future (525,329) 41,663,100
s
contrac
ts
13.NET 40,072,173
GAIN
(LOSS)
14.NET $ 59,625,739
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
RESULTI
NG
FROM
OPERATI
ONS
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED NOVEMBER 30,
1995 1994
15.INCRE
ASE
(DECREAS
E) IN NET
ASSETS
Operatio $ 19,553,566 $ 23,071,250
ns
Net
invest
ment
income
Net (1,590,927) 1,495,858
realize
d gain
(loss)
Chang 41,663,100 (54,198,237)
e in net
unreali
zed
appreci
ation
(depre
ciation)
16.NET 59,625,739 (29,631,129)
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
OPER
ATION
S
Distributi (19,553,566) (23,071,250)
ons to
shareh
olders
From
net
invest
ment
income
From (699,611) (15,541,191)
net
realize
d gain
In (243,807) -
excess
of net
realize
d gain
17.TOT (20,496,984) (38,612,441)
AL
DISTRIB
UTIONS
Share 49,373,918 72,572,004
transac
tions
Net
procee
ds from
sales
of
shares
Reinve 16,090,044 31,414,952
stment
of
distribu
tions
Cost of (61,340,934) (170,335,951)
shares
redeem
ed
Redem 14,848 62,252
ption
fees
18. NE 4,137,876 (66,286,743)
T
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
SHAR
E
TRANS
ACTIO
NS
19.T 43,266,631 (134,530,313)
OTAL
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
20.NET
ASSETS
Beginni 315,582,311 450,112,624
ng of
period
End of $ 358,848,942 $ 315,582,311
period
21.OTHE
R
INFORMATI
ON
Shares
Sold 4,630,644 6,627,548
Issued 1,496,456 2,812,853
in
reinves
tment
of
distribu
tions
Redee (5,779,595) (15,753,663)
med
Net 347,505 (6,313,262)
increas
e
(decre
ase)
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1995 1994C 1993 1992 1991
SELECTED
PER-SH
ARE
DATA
Net asset $ 9.960 $ 11.840 $ 11.220 $ 10.880 $ 10.730
value,
beginni
ng of
period
Income .617 .640 .680 .689 .684
from
Invest
ment
Operati
ons
Net
investm
ent
income
Net 1.270 (1.472) .619 .338 .188
realize
d and
unreali
zed
gain
(loss)
Total 1.887 (.832) 1.299 1.027 .872
from
invest
ment
operati
ons
Less (.617) (.640) (.680) (.689) (.684)
Distrib
utions
From
net
invest
ment
income
From (.020) (.410) - - (.040)
net
realized
gain
In (.010) - - - -
excess
of net
realized
gain
Total (.647) (1.050) (.680) (.689) (.724)
distribu
tions
Redempti .000 .002 .001 .002 .002
on fees
added
to paid
in
capital
Net asset $ 11.200 $ 9.960 $ 11.840 $ 11.220 $ 10.880
value,
end of
period
TOTAL 19.41 -7.61% 11.81 9.72 8.43%
RETURN % % %
A
RATIOS AND
SUPPLEMENTAL DATA
Net $ 358,849 $ 315,582 $ 450,113 $ 413,748 $ 346,781
assets,
end of
period
(000
omitted
)
Ratio of .55 .55% .55 .55 .55%
expens % % % B
es to
averag
e net
assets
Ratio of 5.73 5.83% 5.81 6.21 6.34%
net % % %
invest
ment
income
to
averag
e
net
assets
Portfolio 39 11% 45 11 6%
turnove % % %
r rate
A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE. THE TOTAL RETURN
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIOD SHOWN.
B FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
C EFFECTIVE DECEMBER 1, 1993, THE FUND 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, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
(FORMERLY 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 on an average size account.
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 reimbursed certain fund expenses, the life of fund
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 LIFE OF
YEAR FUND
Spartan Connecticut Municipal
Money Market Fund 3.41% 14.74%
Average Connecticut Tax-Free
Money Market Fund 3.16% n/a
Consumer Price Index 2.47% 13.95%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, 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, the value of your investment would be $1,050. To
measure how the fund's performance stacked up against its peers, you can
compare it to the average Connecticut tax-free money market fund, which
reflects the performance of 12 Connecticut tax-free money market funds with
similar objectives tracked by IBC/Donoghue over the past year. Comparing
the fund's performance to the consumer price index (CPI) helps show how
your investment did compared to inflation. (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 NOVEMBER 30, 1995 PAST 1 LIFE OF
YEAR FUND
Spartan Connecticut Municipal
Money Market Fund 3.41% 2.94%
Average Connecticut Tax-Free
Money Market Fund 3.16% n/a
Consumer Price Index 2.47% 2.79%
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
11/28/94 2/27/95 5/29/95 8/28/95 11/27/95
Spartan Connecticut 3.24% 3.48% 3.64% 3.22% 3.32%
Municipal
Money Market Fund
Average Connecticut 3.01% 3.27% 3.37% 3.01% 3.09%
Tax-Free
Money Market Fund
Spartan Connecticut 5.27% 5.68% 5.92% 5.24% 5.38%
Municipal
Money Market Fund -
Tax-equivalent
Portion of fund's income 12.75% 4.64% 11.16% 9.50% 19.03%
subject to state taxes
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 Connecticut tax-free money market fund.
Or you can look at the fund's tax-equivalent yield, which is based on a
combined effective 1995 federal and state income tax rate of 38.88% and
reflects that a portion of the fund's income was subject to state taxes. A
portion of the fund's income may be subject to the alternative minimum tax.
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 FUND
(FORMERLY SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jeffrey Parker, Portfolio Manager of Spartan
Connecticut Municipal Money
Market Fund
Q. JEFF, HOW HAVE INVESTMENT CONDITIONS CHANGED DURING THE PAST YEAR?
A. A year ago, the economy was still expanding rapidly and the Federal
Reserve was doing its best to temper growth and stave off inflation. In
November 1994 and again in February 1995, the Fed raised the federal funds
rate, completing a string of seven rate increases dating back to February
1994. Then, early in 1995, signs began appearing that growth was slowing.
In response, the Fed eased in July, cutting the federal funds rate
one-quarter percentage point. Since then, the economy has been hard to
read, and the Fed has remained on the sidelines. The growth rate in the
gross domestic product (GDP) rebounded sharply during the third quarter of
1995 after an essentially flat second quarter. However, inflation has
remained quite low and there have been persistent, albeit irregular signs
of weakness. By the end of the period, most market participants were
anticipating another rate cut by the Fed.
Q. HOW DID YOU COPE WITH CHANGING CONDITIONS?
A. When the period began, the fund's average maturity was 68 days. Scott
Orr, who managed the fund until I took over in June, lengthened
aggressively beginning late in 1994 and was able to lock in attractive
yields while short-term rates were declining. Halfway through the period,
at the beginning of the annual summer borrowing season, the fund's average
maturity was down to 30 days. As soon as supply entered the market, I
lengthened the fund aggressively, reaching 54 days in time for the Fed rate
cut in July. Since then, I've taken advantage of opportunities to extend
the fund's average maturity even further, ending the period at 62 days.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1995, was 3.31%, compared to
3.24% a year ago. The latest yield was the equivalent of a 5.37% taxable
yield for Connecticut investors in the 38.88% combined state and federal
tax bracket. The fund had a total return for the year of 3.41%, which beat
the average total return of 3.16% for all Connecticut tax-free money market
funds, according to IBC/Donoghue.
Q. WHAT CAN WE EXPECT GOING FORWARD?
A. Despite relatively robust economic growth in the third quarter of 1995,
many market participants believe the Fed's next move will be to lower rates
again, possibly before year end. A key variable may be the budget debate in
Congress. A balanced budget agreement would necessitate steep cuts in
federal spending. The Fed, in turn, might seek to offset the impact of
those spending cuts with a rate cut. The chance that the Fed will cut rates
is that much greater given the lack of inflationary pressures and
continuing signs of weakness in the economy. While my strategy has been to
maintain flexibility, my bias as I look toward 1996 is to buy into the
market as opportunities arise and perhaps take the fund slightly longer.
That desire is tempered somewhat by a continuing lack of supply.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER,
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: tax-free income and
stability by investing in
high-quality, short-term,
Connecticut municipal money
market securities
START DATE: March 4, 1991
SIZE: as of November 30,
1995, more than $175 million
MANAGER: Jeff Parker, since
June, 1995; manager, Fidelity
Connecticut Municipal Money
Market, Fidelity Michigan
Municipal Money Market,
Fidelity New Jersey Tax-Free
Money Market, and Spartan
New Jersey Municipal Money
Market, since June 1995;
joined Fidelity in 1991
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
usually long-term security that
gives the bond holder the
option to redeem the bond at
face value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO)
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/95 5/31/95 11/30/94
0 - 30 65 61 62
31 - 90 11 26 8
91 - 180 3 12 12
181 - 397 21 1 18
WEIGHTED AVERAGE MATURITY
11/30/95 5/31/95 11/30/94
Spartan Connecticut
Municipal Money Market
Fund 62 days 30 days 68 days
Average Connecticut
Tax-Free Money Market Fun 58 days 38 days 61 days
d*
ASSET ALLOCATION
AS OF NOVEMBER 30, 1995 AS OF MAY 31, 1995
Row: 1, Col: 1, Value: 53.0
Row: 1, Col: 2, Value: 22.0
Row: 1, Col: 3, Value: 16.0
Row: 1, Col: 4, Value: 4.0
Row: 1, Col: 5, Value: 5.0
Row: 1, Col: 1, Value: 55.0
Row: 1, Col: 2, Value: 21.0
Row: 1, Col: 3, Value: 18.0
Row: 1, Col: 4, Value: 4.0
Row: 1, Col: 5, Value: 2.0
Variable rate
demand notes
(VRDNs) 53%
Commercial
paper 22%
Tender bonds 16%
Municipal
notes 4%
Other 5%
Variable rate
demand notes
(VRDNs) 55%
Commercial
paper 21%
Tender bonds 18%
Municipal
notes 4%
Other 2%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(registered trademark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO)
INVESTMENTS NOVEMBER 30, 1995
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ARIZONA - 2.9%
Coconino County Poll. Cont. Corp. Poll. Cont. Rev.
(Arizona Pub. Svc. Co.-Navajo Proj.) Series 1994 A,
3.85%, LOC Bank of America, VRDN (b) $ 5,100,000 $ 5,100,000
CONNECTICUT - 68.0%
Bethel BAN 4.25% 7/12/96 600,000 601,767
Clipper Participating VRDN, Series 1994-1, 3.92%
(Liquidity Facility State Street Bank & Trust Co.)(c) 4,934,800
4,934,800
Connecticut Dev. Auth. Health. Care Rev.
(Corp. for Independent Living Proj.) Series 1990, 3.60%,
LOC Cr. Commercial de France, VRDN 8,000,000 8,000,000
Connecticut Dev. Auth. Ind. Dev. Rev. (W.E. Bassett Co. Proj.)
Series 1986, 4%, LOC First Nat'l. Bank of Boston,
VRDN (b) 1,000,000 1,000,000
Connecticut Dev. Auth. Poll. Cont. Rev. (Light & Pwr. Co. Proj.)
Series B, 3.80%, LOC Union Bank of Switzerland,
VRDN (b) 8,000,000 8,000,000
Connecticut Dev. Auth. Solid Waste Disp. Facs. Rev.
(Rand-Whitney Containerboard)3.45%,
LOC Chase Manhattan Bank, VRDN (b) 3,300,000 3,300,000
Connecticut Dev. Auth. Water Facs. Rev.
(Bridgeport Hydraulic Co.) Series 1995, 3.40%,
LOC Society Generale, VRDN 4,600,000 4,600,000
Connecticut Econ. Recovery Notes Series A, 5.40%
12/15/95 400,000 400,185
Connecticut Gen. Oblig. Bonds Series 1995 B, 4.50%
10/1/96 2,000,000 2,010,483
Connecticut Gen. Oblig. Participating VRDN (c):
Series BT-103, 3.85% (Liquidity Facility Bankers Trust) 1,600,000
1,600,000
Series MGT-27, 3.80%
(Liquidity Facility Morgan Guaranty Trust Co.) 2,325,000 2,325,000
Connecticut Health & Ed. Facs. Auth. Rev. Bonds
4.50% 11/1/96 (MBIA Insured) 1,000,000 1,007,130
Connecticut Health & Ed. Facs. Auth. Rev. Bonds:
(Windham Commty. Hosp.) Series B, 3.65%
tender 1/16/96, LOC Banque Paribas 4,000,000 4,000,000
(Yale University):
Series L, 3.75% tender 12/13/95 1,800,000 1,800,000
Series M, 3.65% tender 2/13/96 6,000,000 6,000,000
Series N:
3.65%, tender 1/12/96 3,100,000 3,100,000
3.65%, tender 2/13/96 1,000,000 1,000,000
Series O, 3.70% tender 12/14/95 3,200,000 3,200,000
Connecticut Health & Edl. Facs. Rev. (Charlotte Hungerford
Hosp.) Series B, 3.40%, LOC Bank of Boston,
VRDN 3,000,000 3,000,000
Connecticut Hsg. Fin. Auth. Rev. Bonds (Hsg. Mtg. Fin. Prog.)
Series 1993 H-2, 3.75%, tender 4/15/96 (b) 6,000,000 6,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Hsg. Fin. Auth. Rev. Bonds
(Hsg. Mtg. Fin. Prog.) continued:
Series 1989 D (b):
3.85% tender 12/14/95 $ 1,800,000 $ 1,800,000
3.80%, tender 12/8/95 800,000 800,000
Series 1990 C, 3.85% 12/14/95 1,600,000 1,600,000
Series 1993 E-1, 3.75%, tender 6/10/96 3,200,000 3,200,000
Series 1993 E-2, 3.85%, tender 6/10/96 (b) 3,600,000 3,600,000
Connecticut Muni. Elec. Energy Coop Pwr. Supply Sys. Rev.
Bonds Series 1995 A, 3.55%, tender 1/25/96,
LOC Fleet Bank 1,400,000 1,400,000
Connecticut Second Lien Spl. Tax Oblig. Bonds
(Transport Infrastructure) Series 1, 3.55%,
LOC Commerzbank AG, VRDN 15,580,000 15,580,000
Connecticut Special Assessment Unemployment Rev.
Series 1993 C, 3.85%, tender 7/1/96 (FGIC Insured) 14,600,000 14,600,000
East Haven BAN 4.25% 9/4/96 500,000 501,656
Fairfield BAN 5.25% 1/16/96 500,000 500,241
Hartford Gen. Oblig. Bonds 6.75% 10/1/96 (FGIC Insured) 400,000 409,128
New Haven BAN 4.25% 8/22/96, LOC State Street Bank 3,500,000 3,511,012
New Haven Gen. Oblig. Rfdg. Bonds Series A, 4.50% 8/1/96 1,000,000
1,003,868
New Milford BAN 3.77% 8/16/96 1,000,000 1,000,135
Stamford Hsg. Auth. Mutimodal Rev. (Morgan Street Proj.)
Series 1994, 3.65%, LOC Deutsche Bank, VRDN (b) 2,500,000 2,500,000
117,885,405
KENTUCKY - 2.6%
Daviess County Solid Wst. Disp. Facs. Rev. (Scott Paper Co.):
Series 1993 B, 3.85%, LOC ABN-AMRO Bank, VRDN 3,600,000 3,600,000
3.85%, LOC ABN-AMRO Bank, VRDN (b) 1,000,000 1,000,000
4,600,000
LOUISIANA - 3.2%
Plaquemines Parish Envir. Rev. Rfdg.
(BP Exploration & Oil, Inc.), VRDN (b):
Series 1994, 3.85% 800,000 800,000
Series 1995, 3.85% 4,700,000 4,700,000
5,500,000
PUERTO RICO - 15.9%
Puerto Rico Commonwealth Participating VRDN (c):
Series BT-165, 3.76%
(Liquidity Facility Bankers Trust Co.) 2,142,000 2,142,000
Series PA-97, 3.55%
(Liquidity Facility Merrill Lynch & Co.) 2,145,000 2,145,000
Series PT-63, 3.55%,
(Liquidity Facility Bayerische Hypotheken) 1,155,000 1,155,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Elec. Pwr. Auth. Participating VRDN,
Series BT-105, 3.525%,
(Liquidity Facility Bankers Trust Co.)(c) $ 3,978,000 $ 3,978,000
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Rfdg. Bonds Series W,
4.25% 7/1/96 4,365,000 4,373,505
Puerto Rico Gov't. Dev. Bank CP:
3.70% 12/1/95 3,000,000 3,000,000
3.75% 12/1/95 3,500,000 3,500,000
3.75% 12/14/95 2,800,000 2,800,000
3.65% 12/15/95 2,000,000 2,000,000
3.70% 1/18/96 1,000,000 1,000,000
3.70% 1/23/96 1,500,000 1,500,000
27,593,505
TEXAS - 7.3%
Brazos River Auth. Poll. Cont. Rev. Rfdg.
(TU Electric Co. Proj.) 4.10%,
LOC Union Bank of Switzerland, VRDN (b) 300,000 300,000
Brazos River Harbor Navigation Dist. of Brazoria County Rev.
(Dow Chemical) Series1993, 3.90%, VRDN (b) 3,900,000 3,900,000
Gulf Coast Ind. Dev. Auth. Solid Waste Disp. Rev.
(Citgo Petroleum) 3.90%, LOC Wachovia Bank,
VRDN (b) 6,500,000 6,500,000
Gulf Coast Waste Disp. Auth. (Amoco Oil Co. Proj.)
3.80%, VRDN (b) 200,000 200,000
Gulf Coast Waste Disp. Auth. Poll. Cont. Rev.
(Amoco Oil Co.) 3.80%, VRDN (b) 1,800,000 1,800,000
12,700,000
VIRGINIA - 0.1%
Richmond Ind. Dev. Auth. (I) Rev. (Cogentrix Inc. Proj.)
Series 1990 A, 4.10%, LOC Banque Paribas,
VRDN (b) 100,000 100,000
TOTAL INVESTMENTS - 100% $ 173,478,910
Total Cost for Income Tax Purposes $ 173,478,910
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
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, 1995, the fund had a capital loss carryforward of
approximately $13,000 of which $3,000 and $10,000 will expire on November
30, 2001 and 2002, respectively.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
(FORMERLY SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO)
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
22.ASSE
TS
Investme $ 173,478,910
nt in
securiti
es, at
value -
See
accom
panyin
g
schedu
le
Cash 1,136,729
Interest 1,090,000
receiva
ble
23.TOT 175,705,639
AL
ASSETS
24.LIABIL
ITIES
Distributi $ 11,245
ons
payabl
e
Accrued 72,028
manag
ement
fee
25.TOT 83,273
AL
LIABILITI
ES
26.NET $ 175,622,366
ASSETS
Net
Assets
consist
of:
Paid in $ 175,635,799
capital
Accumul (13,433)
ated
net
realize
d gain
(loss)
on
invest
ments
27.NET $ 175,622,366
ASSETS
, for
175,63
5,799
shares
outstan
ding
28.NET $1.00
ASSET
VALUE,
offering
price
and
redemp
tion
price
per
share
($175,6
22,366
(divided by)
175,63
5,799
shares)
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1995
29.30.IN $ 6,277,756
TEREST
INCOME
31.EXPE
NSES
Manage $ 812,383
ment
fee
Non-inter 813
ested
trustee
s'
compe
nsation
32.TOT 813,196
AL
EXPEN
SES
33.NET 5,464,560
INTERES
T
INCOM
E
34.REALI 4,063
ZED AND
UNREALIZ
ED GAIN
(LOSS)
Net
realize
d gain
(loss)
on
invest
ment
securiti
es
Increase (416)
(decre
ase) in
net
unreali
zed
gain
from
accreti
on of
market
discou
nt
35.NET 3,647
GAIN
(LOSS)
36.NET $ 5,468,207
INCREA
SE IN
NET
ASSETS
RESULTI
NG
FROM
OPERATI
ONS
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED NOVEMBER 30,
1995 1994
37.INCRE
ASE
(DECREAS
E) IN NET
ASSETS
Operatio $ 5,464,560 $ 3,624,901
ns
Net
interest
income
Net 4,063 (10,039)
realize
d gain
(loss)
Increas (416) 416
e
(decre
ase) in
net
unreali
zed
gain
from
accr
etion of
market
discou
nt
38.NET 5,468,207 3,615,278
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
OPER
ATION
S
Distributi (5,464,560) (3,624,901)
ons to
shareh
olders
from
net
interest
income
Share 190,588,598 225,193,655
transac
tions at
net
asset
value
of
$1.00
per
share
Procee
ds from
sales
of
shares
Reinve 5,248,200 3,499,344
stment
of
distribu
tions
from
net
interest
income
Cost of (187,273,625) (224,729,453)
shares
redeem
ed
39. NE 8,563,173 3,963,546
T
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
AND
SHAR
ES
RESUL
TING
FROM
SHAR
E
TRANS
ACTIO
NS
40.T 8,566,820 3,953,923
OTAL
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
41.NET
ASSETS
Beginni 167,055,546 163,101,623
ng of
period
End of $ 175,622,366 $ 167,055,546
period
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30, MARCH 4, 1991
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1995 1994 1993 1992 1991
SELECTED PER-SHARE DATA
Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value,
beginni
ng of
period
Income .034 .023 .022 .030 .029
from
Invest
ment
Operati
ons
Net
interest
income
Less (.034) (.023) (.022) (.030) (.029)
Distrib
utions
From
net
interest
income
Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value,
end of
period
TOTAL 3.41 2.28 2.21% 3.08% 2.97%
RETURN % %
B
RATIOS AND
SUPPLEMENTAL DATA
Net $ 175,622 $ 167,056 $ 163,102 $ 86,672 $ 22,247
assets,
end of
period
(000
omitted
)
Ratio of .50 .50 .24% .02% .00%
expens % % C C C
es to
averag
e net
assets
Ratio of 3.36 2.25 2.17% 2.90% 4.05%
net % % A
interest
income
to
averag
e
net
assets
A ANNUALIZED
B 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.
C FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1995
1. SIGNIFICANT ACCOUNTING
POLICIES.
On December 14, 1995, the Board of Trustees gave approval to change the
names of Spartan Connecticut Municipal High Yield Portfolio and Spartan
Connecticut Municipal Money Market Portfolio to Spartan Connecticut
Municipal Income Fund and Spartan Connecticut Municipal Money Market Fund,
respectively. Spartan Connecticut Municipal Income Fund (the income fund )
is a fund of Fidelity Court Street Trust. Spartan Connecticut Municipal
Money Market Fund (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 income fund and the money market fund:
SECURITY VALUATION.
INCOME 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 of their purchase date 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 substantially 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.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions,capital loss carryforwards and losses deferred due
to wash sales, futures and options and excise tax regulations.
REDEMPTION FEES. Shares held in the income 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. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. Each fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
FUTURES CONTRACTS AND OPTIONS. The income fund may use futures and options
contracts to manage its exposure to the bond market and to fluctuations in
interest rates. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. Futures contracts
involve, to varying degrees, risk of loss in excess of the futures
variation margin reflected in the Statement of Assets and Liabilities. The
underlying face amount at value is shown in the schedule of investments
under the caption "Futures Contracts". This amount reflects each contract's
exposure to the underlying instrument at period end. Losses may arise from
changes in the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparties do not perform
under the contracts' terms. Futures contracts are valued at the settlement
price established each day by the board of trade or exchange on which they
are traded. Exchange traded options 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.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $127,962,934 and $130,961,201, respectively.
The market value of futures contracts opened and closed during the period
amounted to $63,194,938 and $53,409,510, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management &
Research Company (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 income and money market funds, respectively.
FMR also bears the cost of providing shareholder services to each fund. To
offset the cost of providing these services, FMR or its affiliates
collected certain transaction fees from shareholders which amounted to
$4,020 and $3,225 for the income 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 1940 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 $2,710 for the
income fund and no payments were made for the money market fund for the
period.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and Fidelity Court Street
Trust II and the Shareholders of Spartan Connecticut Municipal High Yield
Portfolio and Spartan Connecticut
Municipal Money Market Portfolio:
We have audited the accompanying statements of assets and liabilities of
Spartan Connecticut Municipal High Yield Portfolio, a fund of Fidelity
Court Street Trust, and Spartan Connecticut Municipal Money Market
Portfolio, a fund of Fidelity Court Street Trust II including the schedules
of fund investments, as of November 30, 1995, the related statements of
operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended for the
Spartan Connecticut Municipal High Yield Portfolio, and the financial
highlights for each of the four years in the period then ended and for the
period March 4, 1991 (commencement of operations) to November 30, 1991 for
the Spartan Connecticut Municipal Money Market Portfolio. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Spartan Connecticut Municipal High Yield Portfolio and Spartan
Connecticut Municipal Money Market Portfolio as of November 30, 1995, the
results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended
for the Spartan Connecticut Municipal High Yield Portfolio, and the
financial highlights for each of the four years in the period then ended
and for the period March 4, 1991 (commencement of operations) to November
30, 1991 for the Spartan Connecticut Municipal Money Market Portfolio, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 4, 1996
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President, MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB 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
SPARTAN(registered trademark)
NEW JERSEY
MUNICIPAL INCOME
FUND
(registered trademark)
(FORMERLY SPARTAN NEW JERSEY
MUNICIPAL HIGH YIELD PORTFOLIO)
ANNUAL REPORT
NOVEMBER 30, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
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 16 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 20 Notes to the financial statements.
REPORT OF INDEPENDENT
ACCOUNTANTS 22 The auditor's opinion.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was generally very
positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving
for a college education, enables you to weather these ups and downs in a
long-term fund, which has higher potential returns. An intermediate-length
fund could be appropriate if your investment horizon is two to four years,
and a short-term bond fund could be the right choice if you need your money
in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
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
securities that have grown in value), and the effect of the $5 account
closeout fee on an average sized account. You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain fund
expenses, the past five years and life of fund total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan New Jersey Municipal
Income Fund 17.05% 49.44% 95.06%
Lehman Brothers Municipal Bond Index 18.90% 51.82% 97.93%
Average New Jersey
Municipal Bond Fund 18.03% 48.43% n/a
Consumer Price Index 2.47% 14.80% 33.10%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on January 1, 1988. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Lehman Brothers Municipal Bond Index - a broad gauge of the municipal bond
market. To measure how the fund's performance stacked up against its peers,
you can compare it to the average New Jersey municipal bond fund, which
reflects the performance of 48 New Jersey municipal bond funds with similar
objectives tracked by Lipper Analytical Services over the past year. Both
benchmarks include reinvested dividends and capital gains, if any.
Comparing the fund's performance to the consumer price index (CPI) helps
show how your fund did compared to inflation. (The CPI returns begin on the
month end closest to the fund's start date.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan New Jersey Municipal
Income Fund 17.05% 8.37% 8.80%
Lehman Brothers Municipal Bond Index 18.90% 8.71% 9.01%
Average New Jersey
Municipal Bond Fund 18.03% 8.22% n/a
Consumer Price Index 2.47% 2.80% 3.68%
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
Spartan NJ Municipal Income
Lehman Bros. Muni. Bond
$19,793
$19,507
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan New
Jersey Municipal Income Fund on January 1, 1988, when the fund started. As
the chart shows, by November 30, 1995, the value of your investment would
have grown to $19,507 - a 95.07% increase on your initial investment. This
assumes you still own the fund on November 30, 1995, 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 $19,793 - a
97.93% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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
YEARS ENDED NOVEMBER 30,
1995 1994 1993 1992 1991
Dividend returns 6.40% 5.28% 5.99% 6.59% 6.87%
Capital appreciation
returns 10.65% -11.14% 6.12% 2.73% 3.75%
Total return 17.05% -5.86% 12.11% 9.32% 10.62%
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
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.95(cents) 30.47(cents) 62.28(cents)
Annualized dividend rate 5.31% 5.43% 5.64%
30-day annualized yield 4.89% - -
30-day annualized tax-equivalent yield 8.18% - -
</TABLE>
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 $11.35 over
the past month, $11.20 over the past six months and $11.04 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. 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 40.21% combined effective 1995 federal and state tax bracket.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
In sharp contrast to much of
1994, the municipal bond market
posted strong returns for the 12
months ended November 30,
1995. For the period, the
Lehman Brothers Municipal
Bond Index - a broad measure
of the tax-free market - had a
total return of 18.90%. By
comparison, the Lehman
Brothers Aggregate Bond Index
- - a proxy for investment-grade
taxable bonds - had a total
return of 17.64%. While the
bankruptcy of Orange County,
California, in December 1994
caused some concern among
investors, tax-free bonds
managed to surge ahead of
their taxable counterparts in the
first quarter of 1995 on signs of
a slowing economy and tamer
inflation expectations. By spring,
however, the muni bond market
began to underperform U.S.
Treasury securities when
Congress began consideration
of tax-code changes, some of
which threatened the tax-exempt
status of municipal securities. This
threat of tax reform dampened
enthusiasm in the municipal
bond market, stalling the rally and
helping shorter maturity bonds
to outperform their longer
counterparts throughout the
spring and summer months. By
early fall, historically attractive
valuations relative to
Treasuries, weakening new
issuance, and stronger demand
from insurance companies and
retail buyers helped tax-free
bonds rebound.
An interview with Maureen Newman, Portfolio Manager of Spartan New Jersey
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, MAUREEN?
A. For the 12 months ended November 30, 1995, the fund returned 17.05%. For
the same period, the average New Jersey municipal bond fund returned
18.03%, as tracked by Lipper Analytical Services. Also, the Lehman Brothers
Municipal Bond Index returned 18.90%.
Q. WHAT ARE SOME MAJOR CHANGES YOU HAVE MADE SINCE TAKING OVER THE FUND IN
OCTOBER?
A. I improved the liquidity of the portfolio by buying the bonds of some of
the better known issuers in New Jersey. Because these issuers are so
recognizable, their bonds tend to be more actively traded in the market.
Additionally, I've been adding short maturity bonds in place of longer
maturity bonds that have short-term call dates. If a long-maturity bond has
a short-term call, it will trade under the assumption the issuer will call
the bond - or pay it off - on the call date. As the call date approaches,
these bonds are less likely to participate in a bond rally.
Q. HAVE YOU MADE ANY CHANGES
TO THE PORTFOLIO'S MARKET-SECTOR
ALLOCATION?
A. During the last two months, I reduced the fund's exposure to the
resource recovery sector - or revenue bonds issued for solid waste
treatment facilities. Under a system known as flow control, municipalities
directed trash haulers to deliver garbage to a designated resource recovery
site. This practice was struck down by the U.S. Supreme Court in May 1994
because it was viewed as restraining interstate commerce. In New Jersey,
the fees that haulers pay resource recovery plants to take trash, known as
tip fees, are often higher than those in neighboring states. What's
important to municipal bond investors is that the plants rely on these fees
to pay principal and interest on their tax-exempt bonds. Although Congress
is considering a bill that would allow existing plants to exert control
over the delivery of waste, the uncertainty of the resource recovery sector
is causing me to carefully examine each bond I buy.
Q. SO WHAT AREAS OF THE NEW JERSEY MUNICIPAL BOND MARKET ARE YOU LOOKING AT
NOW?
A. I'm currently focusing on other types of revenue bonds. For example, I
bought bonds issued by the Port Authority of New York and New Jersey, the
Delaware Port Authority - which is tax-exempt in New Jersey and
Pennsylvania - and the Garden State Parkway. All of these bonds were
purchased at attractive prices and are backed by the revenue produced by
these projects.
Q. IS THERE AN AREA OF THE MARKET YOU ARE AVOIDING?
A. I've substantially reduced the fund's holdings in New Jersey Turnpike
bonds because of the issuer's high amount of debt and their failure to
raise tolls. I believe the Turnpike bonds could decline in credit quality -
which is defined as their ability to pay principal and interest - which
could cause the bonds to underperform the rest of the market. The remaining
Turnpike bonds held by the fund are either insured - that is, their payment
of principal and interest is guaranteed by a AAA-rated municipal insurance
company - or they've been refunded.
Q. WHAT'S HAPPENING IN NEW JERSEY'S HEALTH CARE SECTOR - PARTICULARLY
HOSPITALS - RIGHT NOW?
A. There are great changes underway in the way the state's hospitals do
business. The system by which the state set rates for hospitals was
abolished in 1992. New Jersey hospitals were then free to compete with each
other for health care business. However, subsidies established by the state
in 1992 to ease this transition are slated to expire at the end of December
and no funding source has been identified to continue the payments.
Therefore, in this newly competitive environment, management expertise and
cost cutting are even more important than before. I'm focusing on hospitals
that appear well positioned to compete in this deregulated market.
Q. WHAT'S YOUR OUTLOOK?
A. I expect tax-reform discussions may cause further volatility in the
market as we head into the presidential election
year. I also expect the supply of municipal bonds to continue to be light.
With the budget situation in Washington still a question mark and yields at
historically low levels, it's difficult to determine what type of return
the municipal bond market will enjoy in 1996.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER,
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to provide high
current income exempt from
New Jersey state and federal
income taxes
START DATE: January 1, 1988
SIZE: as of November 30,
1995, more than $366 million
MANAGER: Maureen Newman,
since October 1, 1995;
manager, Spartan Florida
Municipal Income Fund, since
October 1995; manager,
Fidelity Michigan Tax-Free
High Yield Portfolio and
Spartan Connecticut Municipal
Income Fund, since 1994;
Spartan Aggressive Municipal
Fund and Spartan Arizona
Municipal Income Portfolio,
1994 to 1995; bond analyst,
1985 to 1994; joined Fidelity in
1985
(checkmark)
MAUREEN NEWMAN ON HER INVESTMENT STYLE:
"I have a bottom-up approach to investing. I start with fundamental
research to understand each issuer in the portfolio and to gauge the
likelihood of outperformance. I then work with our quantitative research
analysts and bond traders to uncover bonds that offer strong relative
value. Our quantitative research group has developed a variety of computer
models that assist in evaluating trading opportunities and in achieving a
better understanding of the total return characteristics of the portfolios.
I plan to keep the fund's duration - or its price sensitivity to changes in
interest rates - within a range similar to a Lehman Brothers New Jersey
index. Therefore, I will be able to focus on adding value on a
issuer-by-issuer basis."
(solid bullet) On October 1, 1995, Maureen Newman took over management of
the fund from David Murphy.
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF NOVEMBER 30, 1995
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
Transportation 21.5 20.4
General Obligation 16.6 9.7
Health Care 10.9 12.6
Escrowed/Prerefunded 10.7 9.3
Housing 8.2 9.6
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1995
6 MONTHS AGO
Years 16.2 15.5
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF NOVEMBER 30, 1995
6 MONTHS AGO
Years 7.3 7.0
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
WILL ALSO INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. THE ACTUAL
PERFORMANCE OF THE FUND MAY DIFFER FROM THE ABOVE EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1995 AS OF MAY 31, 1995
Aaa 40.0%
Aa, A 43.1%
Baa 9.5%
Ba, B 0%
Non-rated 4.3%
Short-term
investments 3.1%
Aaa 22.6%
Aa, A 45.5%
Baa 9.0%
Ba, B 0.2%
Non-rated 11.4%
Short-term
investments 11.3%
Row: 1, Col: 1, Value: 40.0
Row: 1, Col: 2, Value: 43.1
Row: 1, Col: 3, Value: 9.5
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 4.3
Row: 1, Col: 6, Value: 3.1
Row: 1, Col: 1, Value: 22.6
Row: 1, Col: 2, Value: 45.5
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 1.5
Row: 1, Col: 5, Value: 11.4
Row: 1, Col: 6, Value: 11.3
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW ACCOUNT FOR 0% AND 6.3% OF THE FUND'S
INVESTMENTS AT NOVEMBER 30, 1995 AND MAY 31, 1995, RESPECTIVELY.
INVESTMENTS NOVEMBER 30, 1995
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 96.9%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
NEW JERSEY - 84.3%
Atlantic County Ctfs. of Prtn.
(Pub. Facs. Lease Agreement):
7.40% 3/1/07 (FGIC Insured) Aaa $ 3,035,000 $ 3,706,490
7.40% 3/1/08 (FGIC Insured) Aaa 3,260,000 3,993,500
Atlantic County Impt. Auth. Luxury Tax Rev.
(Convention Ctr.):
7.375% 7/1/10 (MBIA Insured)
(Escrowed to Maturity) (e) Aaa 1,000,000 1,213,750
7.40% 7/1/16 (MBIA Insured)
(Escrowed to Maturity) (e) Aaa 3,510,000 4,369,950
Atlantic County Util. Auth. Swr. Rev. Rfdg.
Series A, 5.85% 1/15/15 (AMBAC Insured) Aaa 2,620,000 2,734,625
Bergen County Util. Auth. Solid Waste Sys. Rev. Rfdg.
Series A, 6.25% 6/15/07 (FGIC Insured) Aaa 2,000,000 2,200,000
Burlington County Bridge Commission Bridge
System Rev., 5.30% 10/1/13 Aa 1,500,000 1,490,625
Cape May County Ind. Poll. Cont. Fing. Auth.
Rev. Rfdg. (Atlantic City Elec. Co.) Series A,
6.80% 3/1/21, (MBIA Insured) Aaa 1,350,000 1,630,125
Delaware River Port Auth. Pennsylvania and New
Jersey Rev. 5.40% 1/1/11 (FGIC Insured) Aaa 2,650,000 2,650,000
Edison Township School Unltd. Tax 6.50%
6/1/11 A1 1,000,000 1,137,500
Essex County Gen. Oblig.:
Rfdg. Series A2, 6.25% 9/1/10
(AMBAC Insured) Aaa 4,735,000 5,137,475
Series A:
5.75% 9/1/07 (AMBAC Insured) Aaa 1,385,000 1,480,219
5.75% 9/1/08 (AMBAC Insured) Aaa 1,465,000 1,558,394
5.75% 9/1/09 (AMBAC Insured) Aaa 1,550,000 1,639,125
Essex County Impt. Auth. Gen. Oblig. 7%
12/1/20, (AMBAC Insured)
(Escrowed to Maturity) (e) Aaa 1,000,000 1,138,750
Hudson County Gen. Oblig. 5.125% 8/1/08 A+ 3,000,000 2,951,250
Hudson County Impt. Auth.
(Essential Purp. Pooled Gov't. Loan Prog.):
6.625% 8/1/25 A+ 4,000,000 4,250,000
7.60% 8/1/25 A 5,210,000 5,757,050
Jersey City Swr. Auth. Swr. Rev. Rfdg.:
6% 1/1/07 (AMBAC Insured) Aaa 2,175,000 2,378,906
6% 1/1/09 (AMBAC Insured) Aaa 1,000,000 1,090,000
Lenape Regional High School Dist. Unltd. Tax:
7.625% 1/1/13, (MBIA Insured) Aaa 675,000 850,500
7.625% 1/1/14, (MBIA Insured) Aaa 1,000,000 1,262,500
Mercer County Impt. Auth. Rev. Rfdg.:
(Cap. Appreciation Solid Waste County Guaranteed):
0% 4/1/08 Aa1 6,000,000 3,195,000
0% 4/1/09 Aa1 6,500,000 3,241,875
0% 4/1/10 Aa1 3,000,000 1,402,500
(Site & Disposal Facs. Proj.) 0% 4/1/09 Aa1 5,155,000 2,609,719
Middlesex County Poll. Cont. Auth. Rev. Rfdg.
(Fing. Poll.) (Amerada Hess Corp.):
7.875% 6/1/22 - 7,750,000 8,776,875
6.875% 12/1/22 - 5,000,000 5,287,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Monmouth County Impt. Auth. Wastewtr.
Treatment Facs. Rev. (Asbury Park Proj.)
7.375% 12/1/09 Baa $ 1,000,000 $ 1,085,000
New Jersey Bldg. Auth. Bldg. Rev.:
Rfdg. 5% 6/15/13 Aa 2,000,000 1,915,000
7.50% 6/15/09 (Prerefunded
to 6/15/99 @ 102) (e) Aa 1,700,000 1,912,500
New Jersey Econ. Dev. Auth. Rev.: (Edl. Testing Svc.):
Series A:
6.50% 5/15/05 (MBIA Insured) Aaa 2,500,000 2,809,375
6% 5/15/25 (MBIA Insured) Aaa 9,245,000 9,464,569
Series B:
6.125% 5/15/15 (MBIA Insured) (f) Aaa 2,000,000 2,085,000
6.25% 5/15/25 (MBIA Insured) (f) Aaa 7,700,000 8,036,875
(Weyerhauser Co. Proj.) 9% 11/1/04 A2 2,000,000 2,582,500
New Jersey Econ. Dev. Auth. Poll. Cont. Rev.
(Central Pwr. & Lt.) 7.10% 7/1/15 A2 1,415,000 1,545,888
New Jersey Econ. Dev. Auth. Wtr. Facs. Rev.
(American Wtr. Co. Inc. Proj.) 5.95%
11/1/29, (FGIC Insured) Aaa 5,000,000 5,087,500
New Jersey Edl. Facs. Fing. Auth. Rev.:
(Princeton University) Series A,
5.875% 7/1/20 Aaa 1,000,000 1,041,250
(Ramapo College) Series B, 7.70% 7/1/13
(Prerefunded to 7/1/98 @102) (e) A 1,000,000 1,106,250
5.125% 9/1/10 (AMBAC Insured) Aaa 5,000,000 4,906,250
New Jersey Gen. Oblig.:
Rfdg.:
Series B, 6.20%, 1/15/00 Aa1 1,000,000 1,070,000
Series D, 6% 2/15/11 Aa1 3,000,000 3,243,750
6.25% 1/15/01 Aa1 2,000,000 2,175,000
New Jersey Health Care Facs. Fing. Auth. Rev.:
Rfdg. (Atlantic City Med. Ctr.)
Series C, 6.80% 7/1/11 A 4,200,000 4,525,500
(Burdette Tomlin Mem. Hosp.) Series D,
6.25% 7/1/06 (FGIC Insured) Aaa 1,710,000 1,855,350
(East Orange Gen. Hosp.) Series B,
7.75% 7/1/20 BBB+ 2,450,000 2,621,500
(Elizabeth Gen. Med. Ctr.) Series C:
7.10% 7/1/99 Baa1 1,125,000 1,186,875
7.25% 7/1/06 Baa1 1,975,000 2,095,969
(Helene Fuld Med. Ctr.) Series C,
8.125% 7/1/13 A 1,000,000 1,082,500
(Holy Name Hosp.) Series A,
6.875% 7/1/04 Aaa 1,765,000 1,888,550
(Jersey Shore Med. Ctr.) Series B,
8% 7/1/18, (AMBAC Insured)
(Prerefunded to 7/1/98 @ 102) (e) Aaa 1,905,000 2,121,694
(Kennedy Mem. Hosp.-Univ. Med. Ctr.)
Series D, 7.875% 7/1/09 A1 3,000,000 3,217,500
(Muhlenberg Regional Med. Ctr.) Series B,
8% 7/1/18 (AMBAC Insured) Aaa 2,000,000 2,215,000
(Newcombe Med. Ctr.) Series A, 7.875%
7/1/03 Baa 3,950,000 4,335,125
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Health Care Facs. Fing. Auth. Rev. - continued
(Pascack Valley Hosp.) Series 1991, 6.70%
7/1/11 BBB+ $ 5,200,000 $ 5,369,000
(St. Elizabeth Hosp.) Series B, 8.25%
7/1/20 Baa 8,500,000 9,233,125
New Jersey Hsg. Fin. Agcy. (Gen. Resolution Section 8) Series A:
6.90% 11/1/07 AA+ 2,670,000 2,863,575
6.95% 11/1/08 AA+ 2,265,000 2,423,550
7% 11/1/09 AA+ 2,855,000 3,044,144
7.05% 11/1/10 AA+ 3,500,000 3,723,125
New Jersey Hsg. & Mtg. Fin. Agcy.:
6% 11/1/02 A+ 1,810,000 1,905,025
6.20% 11/1/04 A+ 3,100,000 3,297,625
6.45% 11/1/07 A+ 5,090,000 5,414,488
(Home Buyer) Series B, 7.90% 10/1/22,
(MBIA Insured) (b) Aaa 1,580,000 1,674,800
New Jersey Hwy. Auth. Garden State Parkway
Gen. Rev. (Senior Parkway):
6.10% 1/1/06 A1 1,750,000 1,905,313
6.20% 1/1/10 (d) A1 21,000,000 22,968,750
5.75% 1/1/19 A1 3,000,000 3,033,750
6% 1/1/19 (Escrowed to Maturity) (e) Aaa 4,485,000 4,860,619
New Jersey Tpk. Auth. Rev. Rfdg. 10.375%
1/1/03 (Escrowed to Maturity) (e) AAA 9,705,000 11,779,444
New Jersey Trans. Trust Fund Auth. Sys. Rev. (Trans. Sys.):
Series A:
6% 6/15/02, (AMBAC Insured) Aaa 2,000,000 2,170,000
6.25% 12/15/03 (AMBAC Insured) Aaa 2,600,000 2,886,000
6.50% 6/15/05 (AMBAC Insured) Aaa 10,000,000 11,312,500
5.25% 6/15/14 (AMBAC Insured) Aaa 3,000,000 2,921,250
Series B, 6.50% 6/15/10 (MBIA Insured) Aaa 3,000,000 3,465,000
New Jersey Wastewtr. Treatment Trust Loan Rev.:
6.875% 6/15/06 Aa 1,320,000 1,465,200
6.875% 6/15/09 Aa 1,000,000 1,110,000
7% 6/15/10 Aa 1,750,000 1,946,875
Parsippany-Troy Hills Township Unltd. Tax Rfdg.
6% 4/1/04 Aa 1,235,000 1,352,325
Passaic Valley Swr. Commissioner. Rfdg. (Swr. Sys.)
Series D, 5.75% 12/1/13 (AMBAC Insured) Aaa 1,000,000 1,021,250
Rutgers State Univ. Rev. Rfdg.:
Series A, 5% 5/1/14 A1 1,000,000 961,250
Series R, 5.75% 5/1/18 A1 3,000,000 3,048,750
Sayreville Hsg. Dev. Corp. Mtg. Rev. Rfdg. (Lakeview)
Section 8, 7.75% 8/1/24 (FHA Guaranteed) AAA 2,465,000 2,563,600
Stony Brook Regional Swr. Auth. Rev. Series A, 7.40%
12/1/09 (Prerefunded to 12/1/99 @ 102) (e) Aa 1,000,000 1,133,750
Union County Gen. Oblig. Unltd. Tax Rfdg.
5% 2/1/10 Aaa 2,000,000 1,975,000
Union County Util. Auth. Solid Waste Rev. Series A (b):
6.95% 6/15/03 A- 9,000,000 9,607,500
7% 6/15/04 A- 7,200,000 7,713,000
7.15% 6/15/09 A- 2,840,000 3,031,700
University of Medicine & Dentistry
Series C, 7.20% 12/1/19 A 3,000,000 3,318,750
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Wanaque Valley Reg'l. Swr. Auth. Rfdg. Series B,
5.75% 9/1/18, (AMBAC Insured) Aaa $ 3,250,000 $ 3,424,688
306,271,194
NEW YORK & NEW JERSEY - 7.0%
New York & New Jersey Port Auth. Consolidated:
Rfdg. 87th Series, 5.25% 7/15/17 A1 2,000,000 1,947,500
65th Series, 7% 9/1/24 (FGIC insured) Aaa 3,500,000 3,649,870
76th Series, 6.50% 11/1/26 (b) A1 2,000,000 2,092,500
77th Series, 6.25% 1/15/27 (b) A1 5,000,000 5,168,750
85th Series, 5.375% 3/1/28 A1 9,000,000 8,887,500
Series SS, 4.90% 9/1/97 (b) - 1,600,000 1,603,600
West New York & New Jersey Muni. Util. Rev.
5.125% 12/15/17 (FGIC Insured) Aaa 2,000,000 1,905,000
25,254,720
PUERTO RICO - 5.6%
Puerto Rico Commonwealth Pub. Impt. 6.80%
7/1/21 (Prerefunded to 7/1/02 @ 101.50) (e) AAA 8,000,000 9,200,000
Puerto Rico Commonwealth Urban Renewal & Hsg.
Corp. Rfdg. 7.875% 10/1/04 Baa1 5,235,000 5,961,356
Puerto Rico Hsg. Fin. Corp. Rev. (Multi-Family
Mtg. Portfolio A) Series I, 7.50% 4/1/22,
LOC Puerto Rico Gov't. Dev. Bank AA 2,705,000 2,870,681
Puerto Rico Infrastructure Fing. Auth. Spl. Tax
Series 1988 A, 7.75% 7/1/08 Baa1 2,255,000 2,472,044
20,504,081
TOTAL MUNICIPAL BONDS
(Cost $329,911,337) 352,029,995
MUNICIPAL NOTES (A) - 3.1%
NEW JERSEY - 3.1%
New Jersey Econ. Dev. Auth. Econ. Dev. Rev., VRDN:
(Danic Urban Renewal Co. Proj.) Series 1985,
3.55%, LOC Marine Midland Bank P-2 2,000,000 2,000,000
(Dow Chemical Co./Eldorado Terminals Co.
Proj.) Series 1984 A, 3.80% P-1 1,700,000 1,700,000
New Jersey Econ. Dev. Auth. Ind. & Econ Dev. (Casa
DiBertacchi Corp. Facs.) Series 1988, 3.85%,
LOC Marine Midland Bank, VRDN (b) A-2 2,500,000 2,500,000
New Jersey Sports & Exposition Auth. Rev.
(Contract Bonds) Series 1992 C, 3.90%
(MBIA Insured) (BPA Industrial Bank
of Japan), VRDN VMIG 1 5,100,000 5,100,000
TOTAL MUNICIPAL NOTES
(Cost $11,300,000) 11,300,000
TOTAL INVESTMENTS - 100%
(Cost $341,211,337) $ 363,329,995
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SOLD
50 Municipal Bond Contracts Mar. 1996 $ 5,962,500 $ (32,860)
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.6%
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.
(c) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(d) A portion of the Security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $4,375,000.
(e) Security collateralized by an amount sufficient to pay interest and
principal.
(f) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
New Jersey Econ. Dev.
Auth. Rev. ( Edl. Testing Svc.)
Series B, 6.125% 5/15/15
(MBIA Insured) 8/23/95 $ 1,953,920
New Jersey Econ. Dev.
Auth. Rev. (Edl. Testing Svc.)
Series B, 6.25% 5/15/25
(MBIA Insured) 8/23/95 $ 7,516,355
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 63.4% AAA, AA, A 80.3%
Baa 7.3% BBB 9.5%
Ba 0.0% BB 0.0%
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 4.3%. FMR has
determined that unrated debt securities that are lower quality account for
0% 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:
Transportation 21.5%
General Obligation 16.6
Health Care 10.9
Escrowed/Prerefunded 10.7
Others
(individually less than 10%) 40.3
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1995, the aggregate cost of investment securities for
income tax purposes was $341,211,337. Net unrealized appreciation
aggregated $22,118,658, of which $22,250,897 related to appreciated
investment securities and $132,239 related to depreciated investment
securities.
The fund hereby designates $1,060,272 as a capital gain dividend for the
purpose of the dividend paid deduction.
At November 30, 1995, the fund was required to defer $852,406 of losses on
futures contracts.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
1.ASSETS 2. 3.
4.Invest 5. $ 363,329,995
ment in
securiti
es, at
value
(cost
$341,2
11,337)
- -
See
accom
panyin
g
schedu
le
6.Cash 7. 109,629
8.Receiv 9. 4,450,918
able for
invest
ments
sold
10.Intere 11. 6,946,982
st
receiva
ble
12. 13.T 14. 374,837,524
OTAL
ASSETS
15.LIABIL 16. 17.
ITIES
18.Paya $ 7,541,563 19.
ble for
invest
ments
purcha
sed
20.Paya 183,454 21.
ble for
fund
shares
redeem
ed
22.Distri 346,634 23.
butions
payabl
e
24.Accru 164,092 25.
ed
manag
ement
fee
26.Paya 32,860 27.
ble for
daily
variatio
n on
futures
contrac
ts
28. 29.T 30. 8,268,603
OTAL
LIABILITI
ES
31.32.N 33. $ 366,568,921
ET
ASSETS
34.Net 35. 36.
Assets
consist
of:
37.Paid 38. $ 344,242,397
in
capital
39.Accu 40. 240,726
mulate
d
undistri
buted
net
realize
d gain
(loss)
on
invest
ments
41.Net 42. 22,085,798
unreali
zed
appreci
ation
(depre
ciation)
on
invest
ments
43.44.N 45. $ 366,568,921
ET
ASSETS
, for
32,107,
873
shares
outstan
ding
46.47.N 48. $11.42
ET
ASSET
VALUE,
offering
price
and
redemp
tion
price
per
share
($366,5
68,921
(divided by)
32,107,
873
shares)
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1995
49.50.IN 51. $ 21,749,612
TEREST
INCOME
52.EXPE 53. 54.
NSES
55.Mana $ 1,930,146 56.
gement
fee
57.Non-i 1,696 58.
nterest
ed
trustee
s'
compe
nsation
59. 60.T 61. 1,931,842
OTAL
EXPEN
SES
62.63.N 64. 19,817,770
ET
INTERES
T
INCOM
E
65.REALI 67. 68.
ZED AND
UNREALIZ
ED GAIN
(LOSS)
66.Net
realize
d gain
(loss)
on:
69. Inves 2,771,634 70.
tment
securiti
es
71. Futur (532,341) 2,239,293
es
contrac
ts
72.Chan 73. 74.
ge in
net
unreali
zed
appreci
ation
(depre
ciation)
on:
75. Inves 32,347,208 76.
tment
securiti
es
77. Futur (32,860) 32,314,348
es
contrac
ts
78.79.N 80. 34,553,641
ET GAIN
(LOSS)
81.82.N 83. $ 54,371,411
ET
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
RESULTI
NG
FROM
OPERATI
ONS
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED NOVEMBER 30,
1995 1994
84.INCRE
ASE
(DECREAS
E) IN NET
ASSETS
85.Oper $ 19,817,770 $ 21,733,801
ations
Net
interest
income
86. Net 2,239,293 (1,872,012)
realize
d gain
(loss)
87. Chan 32,314,348 (42,678,448)
ge in
net
unrealiz
ed
appreci
ation
(deprec
iation)
88. 54,371,411 (22,816,659)
89.N
ET
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
OPER
ATION
S
90.Distri (19,817,770) (21,733,801)
butions
to
shareh
olders
From
net
interest
income
91. From - (5,384,226)
net
realize
d gain
92. 93.T (19,817,770) (27,118,027)
OTAL
DISTRIB
UTIONS
94.Share 44,889,052 52,850,946
transac
tions
Net
procee
ds from
sales
of
shares
95. Rein 15,486,788 22,039,374
vestme
nt of
distribu
tions
96. Cost (55,439,570) (120,455,997)
of
shares
redeem
ed
97. Rede 18,651 41,637
mption
fees
98.99. 4,954,921 (45,524,040)
NET
INCRE
ASE
(DECR
EASE
) IN
NET
ASSE
TS
RESUL
TING
FROM
SHAR
E
TRANS
ACTIO
NS
100. 39,508,562 (95,458,726)
101.T
OTAL
INCREA
SE
(DECRE
ASE) IN
NET
ASSETS
102.NET 103. 104.
ASSETS
105. Be 327,060,359 422,519,085
ginning
of
period
106. En $ 366,568,921 $ 327,060,359
d of
period
107.OTH 109. 110.
ER
INFORMATI
ON
108.Sha
res
111. Sol 4,079,575 4,712,112
d
112. Iss 1,400,485 1,969,361
ued in
reinves
tment
of
distribu
tions
113. Re (5,062,399) (10,919,165)
deeme
d
114. Ne 417,661 (4,237,692)
t
increas
e
(decre
ase)
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1995 1994C 1993 1992 1991
115.SELE
CTED
PER-SH
ARE
DATA
116.Net $ 10.320 $ 11.760 $ 11.240 $ 11.020 $ 10.620
asset
value,
beginni
ng of
period
117.Inco .623 .637 .640 .694 .694
me
from
Invest
ment
Operati
ons
Net
interest
income
118. Ne 1.099 (1.291) .678 .298 .398
t
realize
d and
unreali
zed
gain
(loss)
119. Tot 1.722 (.654) 1.318 .992 1.092
al from
invest
ment
operati
ons
120.Les
s (.623) (.637) (.640) (.694)
Distrib (.694)
utions
From
net
interest
inco
me
121. Fro - (.150) (.160) (.080) -
m net
realize
d
gain
122. Tot (.623) (.787) (.800) (.774) (.694)
al
distribu
tions
123.Red .001 .001 .002 .002 .002
emptio
n fees
added
to paid
in
capital
124.Net $ 11.420 $ 10.320 $ 11.760 $ 11.240 $ 11.020
asset
value,
end of
period
125.TOT 17.06 (5.86) 12.12 9.33% 10.63%
AL % % %
RETURN
A
126.RATIOS AND
SUPPLEMENTAL DATA
127.Net $ 366,569 $ 327,060 $ 422,519 $ 342,734 $ 289,792
assets,
end of
period
(000
omitted
)
128.Rati .55 .55% .55 .51% .52%
o of % % B B
expens
es to
averag
e net
assets
129.Rati 5.64 5.70% 5.52 6.22% 6.44%
o of net % %
interest
income
to
averag
e
net
assets
130.Port 36 8% 25 33% 42%
folio % %
turnove
r rate
A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
C EFFECTIVE DECEMBER 1, 1993, THE FUND 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, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1995
1. SIGNIFICANT ACCOUNTING
POLICIES.
On December 14, 1995, the Board of Trustees gave approval to change the
name of Spartan New Jersey Municipal High Yield Portfolio to Spartan New
Jersey Municipal Income Fund. Spartan New Jersey Municipal Income Fund (the
fund) is a fund of Fidelity Court Street Trust (the trust) and is
authorized to issue an unlimited number of shares. The trust is registered
under the Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. 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 of their purchase date 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.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes 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.
EXPENSES. Most expenses of the 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. Distributions are declared daily and paid
monthly from net interest income. Distributions from realized gains, 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, which may result in distribution
reclassifications, are primarily due to differing treatments for
gains/losses on futures and options transactions, capital loss
carryforwards, and losses deferred due to futures and options and excise
tax regulations.
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.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the bond market and to fluctuations in
interest rates. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. Futures contracts
involve, to varying degrees, risk of loss in excess of the futures
variation margin reflected in the Statement of Assets and Liabilities. The
underlying face amount at value is shown in the schedule of investments
under the caption "Futures Contracts." This amount reflects each contract's
exposure to the underlying instrument at period end. Losses may arise from
changes in the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparties do not perform
under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options 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.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $10,121,875 or
2.8% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $117,172,540 and $118,821,508, respectively.
The market value of futures contracts opened and closed during the period
amounted to $129,916,194 and $125,028,927, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (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% of the fund's average net
assets.
FMR also bears the cost of providing shareholder services to the fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the fund's shareholders which amounted to
$5,310 for the period.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and the Shareholders of
Spartan New Jersey Municipal
High Yield Portfolio:
We have audited the accompanying statement of assets and liabilities of
Fidelity Court Street Trust: Spartan New Jersey Municipal High Yield
Portfolio, including the schedule of portfolio investments, as of November
30, 1995, and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years
in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30,1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Court Street Trust: Spartan New Jersey Municipal High Yield
Portfolio as of November 30, 1995, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five
years in the period then ended in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 4, 1996
DISTRIBUTIONS
The Board of Trustees of Spartan New Jersey Municipal Income Fund voted to
pay to shareholders of record at the opening of business on record date,
the following distributions derived from capital gains realized from sales
of portfolio securities:
PAY DATE RECORD DATE CAPITAL GAINS
12/26/95 12/22/95 $0.01
1/8/96 1/5/96 $0.03
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FIDELITY'S TAX-FREE BOND FUNDS
Aggressive Tax-Free
California Tax-Free High Yield
California Tax-Free Insured
High Yield Tax-Free
Insured Tax-Free
Limited Term Municipals
Massachusetts Tax-Free High Yield
Michigan Tax-Free High Yield
Minnesota Tax-Free
Municipal Bond
New York Tax-Free High Yield
New York Tax-Free Insured
Ohio Tax-Free High Yield
Spartan Aggressive Municipal
Spartan Arizona Municipal Income
Spartan California Intermediate Municipal
Spartan California Municipal High Yield
Spartan Connecticut Municipal Income
Spartan Florida Municipal Income
Spartan Intermediate Municipal
Spartan Maryland Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal Income
Spartan New York Intermediate Municipal
Spartan New York Municipal High Yield
Spartan Pennsylvania Municipal High Yield
Spartan Short-Intermediate Municipal
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