SPARTAN(registered trademark)
(REGISTERED TRADEMARK)
CONNECTICUT
MUNICIPAL
FUNDS
ANNUAL REPORT
NOVEMBER 30, 1997
CONTENTS
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PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
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 19 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
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.
FINANCIAL STATEMENTS 31 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 35 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 39 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 40
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To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
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
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets in late October and into
November, the Standard & Poor's 500 Index has risen more than 31%
year-to-date, almost three times its historical annual average.
Meanwhile, bond markets - primarily influenced by a relatively steady
flow of positive news on the inflation front - continued to post solid
returns through the first 11 months of 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while 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. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you the
information you need to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
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. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). You can also look at the fund's income, as
reflected in the fund's yield, to measure performance. If Fidelity had
not reimbursed certain fund expenses, the past 10 years total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
SPARTAN CONNECTICUT MUNICIPAL 6.88% 39.28% 116.78%
INCOME FUND
LEHMAN BROTHERS CONNECTICUT 4 PLUS YEAR 7.31% N/A N/A
ENHANCED MUNICIPAL BOND INDEX
CONNECTICUT MUNICIPAL 6.63% 37.48% 119.84%
DEBT FUNDS AVERAGE
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had 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 Connecticut 4 Plus Year Enhanced Municipal Bond Index
- - a total return performance benchmark for Connecticut
investment-grade municipal bonds with maturities of at least four
years. To measure how the fund's performance stacked up against its
peers, you can compare it to the Connecticut municipal debt funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. The past one
year average represents a peer group of 22 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
SPARTAN CONNECTICUT MUNICIPAL 6.88% 6.85% 8.04%
INCOME FUND
LEHMAN BROTHERS CONNECTICUT 4 PLUS YEAR 7.31% N/A N/A
ENHANCED MUNICIPAL BOND INDEX
CONNECTICUT MUNICIPAL 6.63% 6.57% 8.19%
DEBT FUNDS AVERAGE
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971209 101226 S00000000000001
Spartan CT: Muni Income LB Municipal Bond
00407 LB015
1987/11/30 10000.00 10000.00
1987/12/31 10130.66 10145.10
1988/01/31 10494.20 10506.47
1988/02/29 10599.11 10617.52
1988/03/31 10291.10 10494.36
1988/04/30 10338.00 10574.12
1988/05/31 10389.72 10543.56
1988/06/30 10585.22 10697.81
1988/07/31 10638.06 10767.56
1988/08/31 10691.60 10777.03
1988/09/30 10901.59 10972.10
1988/10/31 11094.08 11165.21
1988/11/30 10990.60 11062.93
1988/12/31 11154.69 11176.11
1989/01/31 11305.66 11407.23
1989/02/28 11197.65 11277.07
1989/03/31 11209.71 11250.12
1989/04/30 11515.13 11517.20
1989/05/31 11756.91 11756.41
1989/06/30 11953.44 11916.06
1989/07/31 12083.22 12078.24
1989/08/31 11955.85 11959.99
1989/09/30 11920.13 11924.35
1989/10/31 12061.50 12070.19
1989/11/30 12239.49 12281.42
1989/12/31 12318.55 12381.88
1990/01/31 12209.36 12323.31
1990/02/28 12320.35 12432.99
1990/03/31 12341.83 12436.72
1990/04/30 12149.17 12346.68
1990/05/31 12451.36 12616.21
1990/06/30 12577.87 12727.10
1990/07/31 12765.00 12914.19
1990/08/31 12535.48 12726.68
1990/09/30 12616.53 12733.93
1990/10/31 12806.91 12964.92
1990/11/30 13083.16 13225.65
1990/12/31 13142.87 13283.18
1991/01/31 13288.72 13461.44
1991/02/28 13372.39 13578.56
1991/03/31 13393.78 13583.44
1991/04/30 13564.01 13764.10
1991/05/31 13684.29 13886.47
1991/06/30 13578.51 13872.72
1991/07/31 13739.68 14041.69
1991/08/31 13888.96 14226.62
1991/09/30 14013.52 14411.85
1991/10/31 14151.66 14541.56
1991/11/30 14185.74 14582.13
1991/12/31 14533.39 14895.06
1992/01/31 14555.47 14929.02
1992/02/29 14562.66 14933.80
1992/03/31 14496.11 14939.32
1992/04/30 14572.72 15072.28
1992/05/31 14772.30 15249.68
1992/06/30 15063.33 15505.57
1992/07/31 15532.71 15970.43
1992/08/31 15312.87 15814.72
1992/09/30 15417.70 15918.15
1992/10/31 15154.94 15761.67
1992/11/30 15564.16 16043.96
1992/12/31 15727.73 16207.77
1993/01/31 15962.26 16396.27
1993/02/28 16611.27 16989.32
1993/03/31 16385.23 16809.74
1993/04/30 16536.26 16979.35
1993/05/31 16632.96 17074.78
1993/06/30 16927.61 17359.76
1993/07/31 16952.67 17382.50
1993/08/31 17337.19 17744.40
1993/09/30 17547.44 17946.51
1993/10/31 17556.83 17981.15
1993/11/30 17402.59 17822.73
1993/12/31 17768.83 18198.97
1994/01/31 17974.46 18406.80
1994/02/28 17479.96 17930.07
1994/03/31 16684.66 17199.95
1994/04/30 16828.01 17345.81
1994/05/31 16928.28 17496.20
1994/06/30 16823.15 17389.30
1994/07/31 17160.82 17708.04
1994/08/31 17199.43 17769.31
1994/09/30 16916.82 17508.46
1994/10/31 16540.02 17197.51
1994/11/30 16078.60 16886.58
1994/12/31 16522.21 17258.25
1995/01/31 17050.93 17751.49
1995/02/28 17572.25 18267.70
1995/03/31 17759.87 18477.60
1995/04/30 17780.17 18499.40
1995/05/31 18333.30 19089.72
1995/06/30 18168.33 18923.64
1995/07/31 18272.47 19103.04
1995/08/31 18526.76 19345.26
1995/09/30 18676.10 19467.72
1995/10/31 18913.38 19750.78
1995/11/30 19199.19 20078.44
1995/12/31 19350.90 20271.40
1996/01/31 19519.65 20424.45
1996/02/29 19424.26 20286.58
1996/03/31 19161.57 20027.32
1996/04/30 19121.38 19970.64
1996/05/31 19084.60 19962.65
1996/06/30 19325.43 20180.05
1996/07/31 19480.12 20363.68
1996/08/31 19458.32 20358.80
1996/09/30 19701.92 20643.82
1996/10/31 19930.18 20877.30
1996/11/30 20283.01 21259.36
1996/12/31 20170.83 21170.07
1997/01/31 20240.74 21210.08
1997/02/28 20411.31 21404.79
1997/03/31 20133.38 21119.46
1997/04/30 20291.96 21296.23
1997/05/31 20564.33 21616.53
1997/06/30 20778.63 21846.74
1997/07/31 21386.64 22451.90
1997/08/31 21156.32 22241.52
1997/09/30 21428.97 22505.53
1997/10/31 21555.32 22650.24
1997/11/28 21677.98 22783.42
IMATRL PRASUN SHR__CHT 19971130 19971209 101230 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Connecticut Municipal Income Fund on November 30,
1987. As the chart shows, by November 30, 1997, the value of the
investment would have grown to $21,678 - a 116.78% increase on the
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond Index - which reflects the performance of the
investment-grade municipal bond market - did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
would have grown to $22,783 a 127.83% 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,
1997 1996 1995 1994 1993
DIVIDEND RETURN 5.19% 5.29% 6.62% 5.28% 6.29%
CAPITAL APPRECIATION RETURN 1.69% 0.36% 12.79% -12.89 5.52%
%
TOTAL RETURN 6.88% 5.65% 19.41% -7.61% 11.81%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. 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 capital gains, if any, paid by the fund are reinvested.
DIVIDENDS AND YIELD
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PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 4.49(CENTS) 27.66(CENTS) 55.86(CENTS)
ANNUALIZED DIVIDEND RATE 4.80% 4.87% 4.99%
30-DAY ANNUALIZED YIELD 4.23% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 6.92% - -
</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
$11.39 over the past one month, $11.32 over the past six months and
$11.20 over the past one 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%
1997 combined federal and state tax bracket but does not reflect
payment of the alternative minimum tax, if applicable.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
With investor sentiment, shifting
supply/demand conditions and
Federal Reserve Board
policymaking playing key roles,
municipal bonds performed more
or less in line with their taxable
counterparts for the 12 months that
ended November 30, 1997. The
Lehman Brothers Municipal Bond
Index - a broad measure of the
municipal bond market - returned
7.17%, while the Lehman Brothers
Aggregate Bond Index - a
barometer of the taxable bond
market - returned 7.55%. Through
much of the first half of the
period, the supply/demand
scenario within the muni market
was favorable: low supply and high
demand that led to rising municipal
bond prices. The second half,
however, saw a large amount of
new issuance come to market, and
while demand remained strong, it
took time for investors to become
acclimated to this new supply. In the
interim, muni bond prices fell. The
cold months of winter contrasted
with what many felt was an
overheating economy ripe for an
inflation appearance. In late
March, the Federal Reserve Board
raised a key short-term interest
rate by 0.25%. While this move
was anticipated by investors, the
market nonetheless reacted
negatively. From April through
mid-September, market conditions
were more friendly. Favorable
economic data soothed
inflationary concerns, while the
Fed's reluctance to raise rates
further was another positive
influence. High supply and low
demand resulted in a sub-par
performance for muni bonds in
September and October, but Asian
volatility toward the end of the
period changed momentum.
Currency devaluations meant
prices of Asian goods would
become cheaper, further
decreasing the likelihood of
inflation.
An interview with George Fischer, Portfolio Manager of Spartan
Connecticut Municipal Income Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the 12-month period that ended November 30, 1997, the fund had
a total return of 6.88%. To get a sense of how the fund did relative
to its competitors, the Connecticut municipal debt funds average
tracked by Lipper Analytical Services returned 6.63%. To gauge how the
fund did relative to the overall Connecticut municipal market, the
Lehman Brothers Connecticut 4 Plus Year Enhanced Municipal Bond Index
returned 7.31% for the same one-year period.
Q. WHAT WERE SOME OF THE FUND'S BEST PERFORMERS DURING THE YEAR?
A. It was a fairly strong period for all municipal bonds, but bonds
with credit ratings of Baa, as judged by Moody's Investors Service,
performed particularly well. As a quick review, most municipal bonds
are assigned a credit rating by the municipal bond credit rating
agencies - including Moody's, Standard & Poor's and others. That
rating serves as an indication of a municipal bond issuer's ability to
repay its debt. Generally speaking, the lower a bond's credit rating,
the higher its yield. That's because a higher yield compensates
investors for a greater amount of credit risk - that is, the risk that
an issuer will default on its debt. Bonds with a Baa-rating are deemed
investment-grade, but are in the lowest tier of the investment-grade
category. Their attractive yields relative to higher-rated bonds,
coupled with their investment-grade status, kept demand for Baa-rated
bonds strong during the year. Moreover, the supply of Baa-rated bonds
was rather tight during the period. It was a classic situation where
strong demand pushed up against limited supply, forcing Baa-rated bond
prices higher.
Q. AS THE FEAR OF INFLATION DIMINISHED DURING THE PAST SIX MONTHS,
BOND YIELDS FELL AND BOND PRICES ROSE. DID YOU ALTER THE FUND'S
HOLDINGS IN ORDER TO TAKE ADVANTAGE OF THAT RALLY?
A. No. I continued to keep the fund's duration - or sensitivity to
changes in interest rates - neutral. By that I mean that I didn't buy
or sell bonds based on where I thought interest rates were headed.
Rather, I structured the fund to match the interest-rate sensitivity
of the market for Connecticut municipal bonds. In my view, the last
several weeks of the period served as a useful reminder that it isn't
easy to predict the direction of interest rates - and ultimately bond
yields and bond prices - with consistency over a long period of time.
Few investors - including many professionals - anticipated that
currency problems in Southeast Asia would take their toll on U.S. bond
markets. Rather than spend time trying to anticipate such unforeseen
events, I invested in those securities that I thought would perform
well given any market environment.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. I can't really single out any specific holdings or market sector
that proved to be disappointing. However, I would say it was a
difficult period in which to find what I believed to be attractively
priced bonds. I like to buy bonds when I think they're priced below
what I believe to be their true value. A bond can become cheap
relative to what I think is its fair value when certain of its
characteristics - including credit quality, maturity and others - fall
out of investors' favor. But particularly over the past six months,
the supply of municipals was limited and demand for them was strong,
keeping Connecticut bonds priced at fair value. That's why the fund's
holdings at the end of the period were very similar to its holdings
six months ago.
Q. WHAT'S YOUR OUTLOOK?
A. Toward the end of the period, the bond markets became volatile in
response to uncertainty created by currency and market instability in
Southeast Asia. In my view, we're likely to see volatility hanging
around until those problems are sorted through. That said, my outlook
for the municipal market is reasonably favorable. At the end of the
period, municipals were attractively priced compared to Treasury
bonds, which suggests that they offer good value and may have room to
appreciate further.
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.
GEORGE FISCHER ON THE
CONNECTICUT ECONOMY:
"The fund's largest sector
concentration at the end of the
period was general obligation
bonds (GOs). GOs are municipal
bonds backed by the taxing power
of a city, county or state and are
repaid by general revenues, such
as taxes. That's in contrast to
revenue generated from a specific
facility, such as a tunnel. Generally
speaking, GOs tend to do well
when the local economy is strong
- - as it has been over the past year
in Connecticut - because tax
revenues rise as a function of
increased personal income,
corporate profits and other
sources. I liked GOs because the
state's economy continued to show
broad-based strength. With the
economy continuing to grow at
a steady pace, and tax revenues
rising, GOs generally performed
well during the period."
FUND FACTS
GOAL: to provide high current
tax-free income for
Connecticut residents
FUND NUMBER: 407
TRADING SYMBOL: FICNX
START DATE: October 29, 1987
SIZE: as of November 30,
1997, more than $341 million
MANAGER: George Fischer,
since 1996; manager,
various Fidelity and Spartan
municipal income funds;
joined Fidelity in 1989
(checkmark)
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
GENERAL OBLIGATION 34.8 33.8
HEALTH CARE 11.8 13.2
EDUCATION 10.5 9.1
ESCROWED/PRE-REFUNDED 9.8 10.9
SPECIAL TAX 8.5 9.0
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 11.6 12.4
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, 1997
6 MONTHS AGO
YEARS 6.8 6.7
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, 1997 AS OF MAY 31, 1997
AAA 57.0%
AA, A 24.7%
BAA 10.7%
NON-RATED 2.2%
SHORT-TERM
INVESTMENTS 5.4%
AAA 52.7%
AA, A 33.1%
BAA 11.2%
NON-RATED 0.0%
SHORT-TERM
INVESTMENTS 3.0%
ROW: 1, COL: 1, VALUE: 57.0
ROW: 1, COL: 2, VALUE: 24.7
ROW: 1, COL: 3, VALUE: 10.7
ROW: 1, COL: 4, VALUE: 2.2
ROW: 1, COL: 5, VALUE: 5.4
ROW: 1, COL: 1, VALUE: 52.7
ROW: 1, COL: 2, VALUE: 33.1
ROW: 1, COL: 3, VALUE: 11.2
ROW: 1, COL: 4, VALUE: 3.0
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENTS NOVEMBER 30, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL BONDS - 94.6%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - 88.9%
Branford Gen. Oblig. Unltd. Tax:
7% 6/15/08 (FGIC Insured) Aaa $ 500,000 $ 596,875
7% 6/15/09 (FGIC Insured) Aaa 500,000 598,750
Bridgeport Gen. Oblig.:
Rfdg. Series A:
6% 9/1/03 (AMBAC Insured) Aaa 4,475,000 4,844,188
6% 9/1/05 (AMBAC Insured) Aaa 4,000,000 4,375,000
6.50% 9/1/07 (AMBAC Insured) Aaa 2,290,000 2,624,913
Series A:
5.40% 9/1/08 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 587,813
5.50% 9/1/09 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 591,250
5.60% 9/1/10 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 594,688
5.70% 9/1/11 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 598,813
5.70% 9/1/15 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 2,000,000 2,170,000
Unltd. Tax Series A:
7.20% 3/1/98 (Escrowed to Maturity) (d) Baa 930,000 937,496
7.40% 3/1/00
(Pre-Refunded to 3/1/99 @ 102) (d) Baa 1,080,000 1,144,800
7.625% 1/15/09
(Pre-Refunded to 3/1/99 @ 102) (d) Baa 1,500,000 1,595,625
8.75% 8/15/05 (FGIC Insured) Aaa 670,000 848,388
Connecticut Clean Wtr. Fund Rev.:
Series 1991, 7% 1/1/11 Aaa 2,500,000 2,743,750
5.875% 11/1/03 Aaa 1,000,000 1,083,750
5.875% 5/1/04 Aaa 1,000,000 1,085,000
6.80% 7/1/05 Aaa 1,000,000 1,092,500
5.75% 3/1/07 Aaa 2,615,000 2,853,618
6% 10/1/12 (e) Aaa 6,000,000 6,682,500
Connecticut College Savings Plan
(Cap. Appreciation):
Unltd. Tax Series B, 0% 11/1/09 Aa3 7,000,000 3,911,250
Series A, 0% 5/15/07 Aa3 2,250,000 1,442,813
Series A, 0% 12/1/07 Aa3 4,000,000 2,500,000
Series B, 0% 11/1/06 Aa3 2,800,000 1,855,000
Connecticut Dev. Auth. Health Care Proj.
Rfdg. (Duncaster, Inc. Proj.) 6.75% 9/1/15 A2 3,000,000 3,228,750
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Dev. Auth. Poll. Cont. Rev. (New
England Pwr. Co. Proj.) 7.25% 10/15/15 A2 $ 3,000,000 $ 3,210,000
Connecticut Dev. Auth. Rev. Series A:
6% 11/15/07 A1 1,525,000 1,683,218
6% 11/15/08 A1 1,525,000 1,688,937
6% 11/15/09 A1 1,525,000 1,685,125
4.75% 11/15/13 A1 1,525,000 1,464,000
Connecticut Econ. Recovery Rfdg. Notes
5% 6/15/98 Aa3 1,000,000 1,006,570
Connecticut Gen. Oblig.:
Series A:
6% 3/15/01 Aa3 2,405,000 2,537,275
6.10% 3/15/02 Aa3 3,000,000 3,213,750
7% 3/15/03 Aa3 3,000,000 3,360,000
Series B, 6% 10/1/05 Aa3 6,430,000 7,056,925
Connecticut Health & Edl. Facs. Auth. Rev.:
(Bristol Hosp.) Series A:
7% 7/1/09 (MBIA Insured) Aaa 1,750,000 1,885,625
7% 7/1/20 (MBIA Insured) Aaa 4,180,000 4,493,500
(Choate Rosemary Hall) Series B, 5%
7/1/27 (MBIA Insured) Aaa 3,500,000 3,355,625
(Connecticut College Issue) Series B,
6.625% 7/1/11 (MBIA Insured)
(Pre-Refunded to 7/1/01 @ 102) (d) Aaa 1,200,000 1,317,000
(Greenwich Hosp.) Series A,
5.80% 7/1/26 (MBIA Insured) Aaa 5,400,000 5,582,250
(The Griffin Hosp.) Series A, 6% 7/1/13 Baa2 1,350,000 1,383,750
(Kent School) Series B:
5.10% 7/1/07 (MBIA Insured) Aaa 265,000 274,606
5.25% 7/1/08 (MBIA Insured) Aaa 305,000 317,200
5.375% 7/1/09 (MBIA Insured) Aaa 345,000 359,231
5.40% 7/1/10 (MBIA Insured) Aaa 685,000 709,831
(Loomis Chaffee School) Series C,
5.50% 7/1/26 (MBIA Insured) Aaa 1,430,000 1,453,237
(Lutheran Gen. Health Care Sys./
Parkside Lodges) 7.375% 7/1/19
(Escrowed to Maturity) (d) Aaa 3,195,000 3,885,919
(New Britain Mem. Hosp.)
Series A, 7.75% 7/1/22 - 6,500,000 7,499,375
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Edl. Facs. Auth. Rev.: - continued
(Quinnipiac College):
Series C, 7.75% 7/1/20
(Pre-Refunded to 7/1/00 @ 102) (d) BBB- $ 1,940,000 $ 2,141,275
Rfdg. Series D:
6% 7/1/13 BBB- 3,500,000 3,574,375
6% 7/1/23 BBB- 1,975,000 2,002,156
(Sacred Heart Univ.):
Series A, 6.85% 7/1/22
(Pre-Refunded to 7/1/02 @ 102) (d) Baa3 1,000,000 1,118,750
Series B, 5.50% 7/1/09 BBB- 1,500,000 1,498,125
Series C, 6% 7/1/06 Baa3 250,000 260,938
Series C, 6.50% 7/1/16 Baa3 4,000,000 4,325,000
(St. Mary's Hosp.) Series B:
7.60% 7/1/03 (Pre-Refunded
to 7/1/98 @ 102) (d) Aaa 900,000 937,458
7.80% 7/1/09 (Pre-Refunded
to 7/1/98 @ 102) (d) Aaa 1,225,000 1,277,369
(St. Raphael Hosp.) Rfdg. Series H:
6.50% 7/1/11 (AMBAC Insured) Aaa 2,780,000 3,242,175
6.50% 7/1/13 (AMBAC Insured) Aaa 3,125,000 3,675,781
5.25% 7/1/14 (AMBAC Insured) Aaa 4,400,000 4,620,000
(Sharon Healthcare Inc.) Series A:
8.75% 7/1/06 (Pre-Refunded
to 7/1/01 @ 103) (d) AAA 450,000 528,750
9% 7/1/13 (Pre-Refunded
to 7/1/01 @ 103) (d) AAA 1,300,000 1,535,625
9.20% 7/1/21 (Pre-Refunded
to 7/1/01 @ 103) (d) AAA 1,500,000 1,783,125
(Veterans Mem. Med. Ctr.) Series A,
6.25% 7/1/05 (MBIA Insured)
(Hartford Hosp. Guaranteed) Aaa 2,265,000 2,511,318
(Yale-New Haven Hosp.):
Series F, 7.10% 7/1/25 (MBIA Insured)
(Pre-Refunded to 7/1/00 @ 102) (d) Aaa 5,000,000 5,443,750
Series H, 6% 7/1/03 (MBIA Insured) Aaa 1,000,000 1,081,250
5.929% 6/10/30 Aaa 10,000,000 10,337,500
Connecticut Higher Ed. Supplemental
Loan Auth. Rev. Series A:
7.375% 11/15/05 (b) A1 490,000 508,414
7.50% 11/15/10 (b) A1 1,685,000 1,749,451
(Family Ed. Loan Prog.)
7.20% 11/15/10 (b) A 835,000 892,406
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Hsg. Fin. Auth. Mtg. Fin. Prog.:
Series A, Subseries A-2,
6.45% 5/15/22 (b) Aa2 $ 5,500,000 $ 5,905,625
Series B, 6.20% 5/15/12 Aa2 2,500,000 2,634,375
Series E, Subseries E-1, 6.30% 5/15/17 Aa2 1,950,000 2,093,813
Series E, 6.20% 5/15/14 Aa2 1,000,000 1,063,750
Connecticut Muni. Elec. Energy Coop. Pwr.
Supply Sys. Rev. Rfdg. Series A:
6% 1/1/04 (MBIA Insured) Aaa 3,190,000 3,453,175
6% 1/1/05 (MBIA Insured) Aaa 3,380,000 3,679,975
6% 1/1/06 (MBIA Insured) Aaa 2,000,000 2,187,500
Connecticut Resource Recovery Auth. Corp.
Credit (American Refuse Fuel Co.) Series A,
8.10% 11/15/15 (b) Baa1 4,500,000 4,780,845
Connecticut Resource Recovery Auth. Rfdg.
(Mid-Connecticut Sys.) Series A:
5.25% 11/15/08 (MBIA Insured) Aaa 4,000,000 4,165,000
5.375% 11/15/10 (MBIA Insured) Aaa 1,000,000 1,036,250
5.50% 11/15/11 (MBIA Insured) Aaa 2,500,000 2,606,250
Connecticut Spl. Assignment Unemployment
Compensation Advisor Fund Rev. Rfdg.
(Connecticut Unemployment) Series A,
5.50% 11/15/00 (AMBAC Insured) Aaa 2,000,000 2,077,500
Connecticut Spl. Tax. Oblig. Rev.
(Trans. Infrastructure):
Series A:
6.50% 6/1/03 A1 2,800,000 3,083,500
5.50% 11/1/06 (FSA Insured) Aaa 3,425,000 3,621,937
7.125% 6/1/10 A1 3,550,000 4,228,937
6.75% 6/1/11 (Pre-Refunded to
6/1/03 @ 100) (d) AAA 2,395,000 2,673,418
Series B:
(Cap. Appreciation) 0% 6/1/08 A1 3,500,000 2,117,500
6.50% 10/1/07 A1 2,250,000 2,567,812
6.15% 9/1/09 A1 1,500,000 1,674,375
6.50% 10/1/10 A1 3,250,000 3,753,750
6.125% 9/1/12 A1 5,000,000 5,637,500
6.50% 10/1/12 A1 4,000,000 4,670,000
Eastern Connecticut Resource Recovery Auth.
Solid Waste Rev. (Wheelabrator Lisbon Proj.)
Series A, 5% 1/1/04 (b) A- 1,000,000 1,002,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Meriden Gen. Oblig. Unltd. Tax:
6.25% 8/1/05 (FGIC Insured) Aaa $ 2,000,000 $ 2,225,000
6.25% 8/1/06 (FGIC Insured) Aaa 2,000,000 2,245,000
7% 10/1/07 (MBIA Insured) Aaa 500,000 595,625
Naugatuck Gen. Oblig. Unltd. Tax:
7.25% 9/1/04 (MBIA Insured) Aaa 215,000 251,280
6.90% 6/15/07 (FGIC Insured) Aaa 485,000 569,875
7.40% 9/1/07 (MBIA Insured) Aaa 370,000 450,012
7.40% 9/1/08 (MBIA Insured) Aaa 370,000 455,100
New Britain Gen. Oblig. Unltd. Tax:
Rfdg. 6% 2/1/12 (MBIA Insured) Aaa 400,000 444,500
Series B, 6% 3/1/12 (MBIA Insured) Aaa 2,000,000 2,222,500
8.25% 8/15/01 Baa1 3,280,000 3,521,900
6% 4/15/06 (AMBAC Insured) Aaa 1,615,000 1,780,537
7% 4/1/07 (MBIA Insured) Aaa 580,000 683,675
6% 4/15/07 (AMBAC Insured) Aaa 1,615,000 1,782,556
7% 4/1/08 (MBIA Insured) Aaa 580,000 690,200
5% 2/1/12 (MBIA Insured) Aaa 885,000 893,850
5% 2/1/13 (MBIA Insured) Aaa 885,000 889,425
New Haven Gen. Oblig.:
Rfdg. Series A, 5% 8/1/09 (FGIC Insured) Aaa 1,775,000 1,801,625
Series A, 7.40% 3/1/12
(Pre-Refunded to 3/1/02 @ 102) (d) Baa1 1,000,000 1,136,250
7% 2/15/03 (FGIC Insured) Aaa 1,000,000 1,122,500
7% 2/15/04 (FGIC Insured) Aaa 1,150,000 1,311,000
6% 2/15/05 (FGIC Insured) Aaa 1,650,000 1,796,438
7% 2/15/05 (FGIC Insured) Aaa 1,250,000 1,437,500
6% 8/1/05 (FGIC Insured) Aaa 3,410,000 3,729,688
Newtown Gen. Oblig. Unltd. Tax:
6% 6/15/05 (MBIA Insured) Aaa 1,700,000 1,872,125
6% 6/15/06 (MBIA Insured) Aaa 1,700,000 1,887,000
North Thompsonville Fire Dist. #10 Unltd. Tax:
6.75% 6/1/07 (MBIA Insured) Aaa 180,000 210,375
6.75% 6/1/08 (MBIA Insured) Aaa 190,000 223,013
6.75% 6/1/09 (MBIA Insured) Aaa 200,000 235,500
6.75% 6/1/10 (MBIA Insured) Aaa 215,000 254,775
6.75% 6/1/11 (MBIA Insured) Aaa 230,000 273,700
South Central Connecticut Reg'l. Wtr. Auth.
Wtr. Sys. Rev. 11th Series:
5.625% 8/1/05 (FGIC Insured) Aaa 5,000,000 5,350,000
5.75% 8/1/12 (FGIC Insured) Aaa 5,000,000 5,262,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Stamford Gen. Oblig. Unltd. Tax:
6.25% 2/15/03 Aaa $ 1,725,000 $ 1,884,563
6.25% 2/15/04 Aaa 1,725,000 1,901,813
6.25% 2/15/05 Aaa 1,725,000 1,919,063
6.60% 1/15/07 Aaa 295,000 340,725
6.60% 1/15/08 Aaa 1,480,000 1,739,000
6.60% 1/15/09 Aaa 1,000,000 1,178,750
Stratford Gen. Oblig. Unltd. Tax
7% 6/15/08 (FGIC Insured) Aaa 500,000 595,000
Univ. of Connecticut Series A,
5.50% 2/1/06 (FGIC Insured) Aaa 3,070,000 3,277,225
West Hartford Gen. Oblig. Unltd. Tax:
6.50% 7/15/05 Aaa 2,000,000 2,267,500
6.50% 7/15/06 Aaa 2,000,000 2,287,500
5% 7/15/11 Aaa 2,000,000 2,015,000
West Haven Gen. Oblig. Impt. Unltd. Tax
6.70% 2/15/04 (MBIA Insured) Aaa 710,000 797,863
Wolcott Gen. Oblig. Unltd. Tax:
7% 6/15/09 (FGIC Insured) Aaa 445,000 533,444
7% 6/15/10 (FGIC Insured) Aaa 440,000 528,550
Woodstock Spl. Oblig. Rev. (Woodstock
Academy) 7% 3/1/08 (AMBAC Insured) Aaa 725,000 784,813
305,426,590
PUERTO RICO - 5.7%
Puerto Rico Commonwealth Gen. Oblig. Unltd.
Tax 6.40% 7/1/11 Baa1 1,500,000 1,636,875
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Hwy. Rev. Rfdg. Series V, 6.625% 7/1/12 Baa1 1,750,000 1,918,438
Puerto Rico Commonwealth Infrastructure
Fing. Auth. Spl. Rfdg. Rev.
Series A, 5.25% 7/1/10 Aaa 6,065,000 6,216,625
Puerto Rico Commonwealth Urban Renewal
& Hsg. Corp. Commonwealth Appropriation
Rfdg. (Capital Appreciation) 0% 10/1/98 Baa 3,800,000 3,677,488
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.:
Rfdg. Series W, 7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,377,500
Rfdg. Series Y, 7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,377,500
Puerto Rico Ind. Med. & Envir. Poll. Cont. Facs.
Fing. Auth. Rev. (Motorola, Inc. Proj.)
Series A, 6.75% 1/1/14 (f) Aa3 1,285,000 1,416,713
19,621,139
TOTAL MUNICIPAL BONDS
(Cost $304,728,057) 325,047,729
MUNICIPAL NOTES (A) - 5.4%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - 5.4%
Connecticut Dev. Auth. Health Care Rev. (Corp.
for Independent Living Proj.) Series 1990,
3.70%, LOC Chase Manhattan Bank, VRDN VMIG 1 $ 1,200,000 $ 1,200,000
Connecticut Dev. Auth. Poll. Cont. Rev. Rfdg.:
(Connecticut Lt. & Pwr. Co. Proj.):
Series 1993 A, 3.85%, LOC Deutsche
Bank AG, VRDN VMIG 1 4,600,000 4,600,000
Series 1993 B, 3.80%, LOC Union Bank
of Switzerland, VRDN (b) VMIG 1 3,700,000 3,700,000
Series 1996 A, 3.10% (AMBAC Insured)
LOC Societe Generale, France, VRDN (b) VMIG 1 3,300,000 3,300,000
(Western Massachusetts Elec. Co. Proj.)
Series 1993 A, 3.70%, LOC Union
Bank of Switzerland, VRDN VMIG 1 1,000,000 1,000,000
Connecticut Gen. Oblig. Series B, 3.75%
(BPA Bayerische Landesbank Girozentrale) VRDN VMIG 1 1,000,000
1,000,000
Connecticut Health & Edl. Facs. Auth. Rev.
(Yale Univ.) Series T, 4%, VRDN VMIG 1 3,000,000 3,000,000
Connecticut Spl. Tax Oblig. Rev.
(Trans. Infrastructure) Series 1, 3.80%, LOC
Commerzbank AG, VRDN VMIG 1 900,000 900,000
TOTAL MUNICIPAL NOTES
(Cost $18,700,000) 18,700,000
TOTAL INVESTMENTS - 100%
(Cost $323,428,057) $343,747,729
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
143 Municipal Bond Contracts Dec. 97 $ 17,250,243 $ 235,976
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL
INVESTMENT IN SECURITIES - 5.0%
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
3. Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
4. Security collateralized by an amount sufficient to pay interest and
principal.
5. 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 $506,756.
6. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $1,416,713 or
0.4% of net assets.
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 79.5% AAA, AA, A 81.0%
Baa 8.0% BBB 7.2%
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 Moody's or S&P amounted to 2.2%. 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:
General Obligation 34.8%
Health Care 11.8
Education 10.5
Escrowed/Pre-Refunded 9.8
Special Tax 8.5
Electric Revenue 8.4
Water & Sewer 7.6
Others (individually less than 5%) 8.6
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1997, the aggregate cost of investment securities for
income tax purposes was $323,428,057. Net unrealized appreciation
aggregated $20,319,672, of which $20,320,650 related to appreciated
investment securities and $978 related to depreciated investment
securities.
The fund hereby designates approximately $138,851 as a capital gain
dividend for the purpose of the dividend paid deduction.
At November 30, 1997, the fund was required to defer approximately
$1,724,264 of losses on futures contracts.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $323,428,057) - $ 343,747,729
SEE ACCOMPANYING SCHEDULE
INTEREST RECEIVABLE 5,106,431
RECEIVABLE FOR DAILY VARIATION ON FUTURES CONTRACTS 4,469
TOTAL ASSETS 348,858,629
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 137,500
PAYABLE FOR INVESTMENTS PURCHASED ON A 6,202,130
DELAYED DELIVERY BASIS
PAYABLE FOR FUND SHARES REDEEMED 431,037
DISTRIBUTIONS PAYABLE 295,662
ACCRUED MANAGEMENT FEE 153,722
OTHER PAYABLES AND ACCRUED EXPENSES 5,750
TOTAL LIABILITIES 7,225,801
NET ASSETS $ 341,632,828
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 319,968,176
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 1,109,004
INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 20,555,648
NET ASSETS, FOR 29,907,664 SHARES OUTSTANDING $ 341,632,828
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $11.42
SHARE ($341,632,828 (DIVIDED BY) 29,907,664 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1997
INTEREST INCOME $ 18,357,794
EXPENSES
MANAGEMENT FEE $ 1,819,468
NON-INTERESTED TRUSTEES' COMPENSATION 8,117
TOTAL EXPENSES BEFORE REDUCTIONS 1,827,585
EXPENSE REDUCTIONS (15,466) 1,812,119
NET INTEREST INCOME 16,545,675
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 2,066,908
FUTURES CONTRACTS 1,049,838 3,116,746
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 2,232,936
FUTURES CONTRACTS 235,976 2,468,912
NET GAIN (LOSS) 5,585,658
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 22,131,333
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 16,545,675 $ 17,455,439
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 3,116,746 3,260,268
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 2,468,912 (2,313,786)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 22,131,333 18,401,921
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (16,545,675) (17,455,439)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN (296,996) -
TOTAL DISTRIBUTIONS (16,842,671) (17,455,439)
SHARE TRANSACTIONS 36,769,472 29,600,748
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 13,074,818 13,513,939
COST OF SHARES REDEEMED (48,132,709) (68,305,755)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,711,581 (25,191,068)
FROM SHARE TRANSACTIONS
REDEMPTION FEES 12,580 15,649
TOTAL INCREASE (DECREASE) IN NET ASSETS 7,012,823 (24,228,937)
NET ASSETS
BEGINNING OF PERIOD 334,620,005 358,848,942
END OF PERIOD $ 341,632,828 $ 334,620,005
OTHER INFORMATION
SHARES
SOLD 3,288,068 2,674,315
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 1,166,635 1,222,501
REDEEMED (4,311,130) (6,175,401)
NET INCREASE (DECREASE) 143,573 (2,278,585)
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 D 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 11.240 $ 11.200 $ 9.960 $ 11.840 $ 11.220
OF PERIOD
INCOME FROM INVESTMENT .559 .569 .617 .640 .680
OPERATIONS
NET INTEREST INCOME
NET REALIZED AND UNREALIZED .190 .039 1.270 (1.472) .619
GAIN (LOSS)
TOTAL FROM INVESTMENT .749 .608 1.887 (.832) 1.299
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.559) (.569) (.617) (.640) (.680)
FROM NET REALIZED GAIN (.010) - (.020) (.410) -
IN EXCESS OF NET REALIZED GAIN - - (.010) - -
TOTAL DISTRIBUTIONS (.569) (.569) (.647) (1.050) (.680)
REDEMPTION FEES ADDED TO .000 .001 .000 .002 .001
PAID IN CAPITAL
NET ASSET VALUE, END OF PERIOD $ 11.420 $ 11.240 $ 11.200 $ 9.960 $ 11.840
TOTAL RETURN A, B 6.88% 5.65% 19.41% (7.61)% 11.81%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 341,633 $ 334,620 $ 358,849 $ 315,582 $ 450,113
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE NET .55% .55% .55% .55% .55%
ASSETS
RATIO OF EXPENSES TO AVERAGE NET .55% .52% .55% .55% .55%
ASSETS AFTER EXPENSE C
REDUCTIONS
RATIO OF NET INTEREST INCOME TO 4.98% 5.15% 5.73% 5.83% 5.81%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 12% 30% 39% 11% 45%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE FORMER ACCOUNT CLOSEOUT FEE.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
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 CONNECTICUT MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can
look at either total return or yield. Total return reflects the change
in the value of an investment, assuming reinvestment of the fund's
dividend income, and the effect of the fund's $5 account closeout fee
on an average-sized 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 past five years and life of fund total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN CONNECTICUT MUNICIPAL 3.12% 14.91% 21.97%
MONEY MARKET FUND
CONNECTICUT TAX-FREE 2.93% 13.76% 19.52%
MONEY MARKET FUNDS AVERAGE
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 March 4, 1991. For example, if you had 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 Connecticut
tax-free money market funds average, which reflects the performance of
mutual funds with similar objectives tracked by IBC Financial Data,
Inc. The past one year average represents a peer group of 11 money
market funds. (The periods covered by IBC Financial Data, Inc. numbers
are the closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN CONNECTICUT MUNICIPAL 3.12% 2.82% 2.98%
MONEY MARKET FUND
CONNECTICUT TAX-FREE 2.93% 2.61% 2.71%
MONEY MARKET FUNDS AVERAGE
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
12/1/97 9/1/97 6/2/97 3/3/97 12/2/96
SPARTAN CONNECTICUT 3.25% 2.90% 3.26% 2.89% 3.06%
MUNICIPAL MONEY
MARKET FUND
CONNECTICUT TAX-FREE 3.04% 2.77% 2.91% 2.72% 2.78%
MONEY MARKET FUNDS
AVERAGE
SPARTAN CONNECTICUT 5.32% 4.73% 5.31% 4.68% 4.97%
MUNICIPAL MONEY
MARKET FUND -
TAX-EQUIVALENT
PORTION OF FUND'S INCOME 0.00% 5.32% 9.73% 20.77% 17.51%
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
Connecticut tax-free money market funds average as tracked by IBC
Financial Data, Inc. Or you can look at the fund's tax-equivalent
yield, which is based on a combined effective 1997 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
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Scott Orr became Portfolio Manager of Spartan
Connecticut Municipal Money Market Fund on July 1, 1997.
Q. SCOTT, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST 12
MONTHS?
A. During the first several months of the period, investors tried to
figure out when the Federal Reserve Board might raise the fed funds
rate, which is the rate banks charge each other for overnight loans.
Over that period, data showed growth in the economy, but the pace of
that growth was inconsistent, and there were no signs of inflation. As
a result, the Fed kept the fed funds rate steady at 5.25%. In February
and March, however, signs that the economy was growing at a stronger
clip changed market sentiment. Expectations of a rate increase
culminated in the Fed's announcement at its March 25 meeting that it
had increased the fed funds rate from 5.25% to 5.50%. For the next
month or so, the market expected the Fed to continue to raise rates.
However, at its May meeting, the Fed decided to hold off because
economic growth had moderated and inflation was still benign.
Q. WHAT'S HAPPENED SINCE THEN?
A. Economic activity has been moderate to fairly strong, but inflation
has remained in check. The Fed has opted to keep rates unchanged, but
remains biased toward raising rates if signs of stronger inflation
emerge. In fact, in mid-October, several Fed officials made comments
indicating that they were thinking of raising rates in order to slow
the economy. However, that was before economic and market turmoil hit
Southeast Asia in late October and continued through November. Because
of this instability in the global financial markets, it now appears
that the Fed will hold off raising rates in order to avoid roiling the
markets and causing more anxiety. As a result, most market
participants feel the Fed will wait until the market disruption in
Asia moderates before deciding if a strong U.S. domestic economy still
warrants a rate increase.
Q. WHAT WAS THE FUND'S STRATEGY DURING THIS PERIOD?
A. For most of the period, the environment was one in which we
expected rates to be higher in the ensuing months. As a result, the
fund was managed during the first half of the year to have an average
maturity of 45 to 50 days. The fund's average maturity during this
time was neutral to slightly shorter than its peers, giving it
flexibility in case rates started to increase. At the end of June,
however, a large issuance of fixed-rate one-year notes exempt from
Connecticut state income tax came to market. The sheer size of the
issuance made the notes attractive because supply in the Connecticut
market usually is constrained, while demand is high for such
short-term securities issued by the state. The fund participated
heavily in this issuance, locking in rates that I felt were attractive
because they priced in future Fed rate increases and looked as if they
would outperform other Connecticut securities even in a period of
rising rates. Buying these securities pushed the fund's average
maturity out to the high 70-day range. In addition, because of supply
constraints in Connecticut, the fund was about 15% invested out of
state in July. However, I eliminated the fund's investments in
out-of-state securities that were subject to Connecticut state taxes
by the end of the period.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1997, was 3.26%,
compared to 3.27% six months ago. The more recent seven-day yield was
the equivalent of a 5.33% taxable rate of return for Connecticut
investors in the 38.88% combined state and federal income tax bracket.
Through November 30, 1997, the fund's 12-month total return was 3.12%,
compared to 2.93% for the Connecticut tax-free money market funds
average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. For the next six months, I believe the Fed will still be biased
toward raising rates, and that it is looking for reasons to do so. At
this point, the Fed has held off raising rates in spite of the
strength of the economy, because inflation has remained under control
and the uncertainty created in global financial markets from the
fallout in Asia has continued. With any inkling of inflationary
pressures, however, I believe the Fed would pull the trigger and raise
the fed funds rate at least one more time. As a result, I'm managing
the fund with the expectation that that will happen, although the
timing of a rate increase is unclear. A rate increase in the next few
months may help the U.S. economy, but it might send the worldwide
financial markets into an uproar. Therefore, I think the Fed would
like Asian markets to stabilize before it takes action.
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.
GEORGE FISCHER ON THE
CONNECTICUT ECONOMY:
"The fund's largest sector
concentration at the end of the
period was general obligation
bonds (GOs). GOs are municipal
bonds backed by the taxing power
of a city, county or state and are
repaid by general revenues, such
as taxes. That's in contrast to
revenue generated from a specific
facility, such as a tunnel. Generally
speaking, GOs tend to do well
when the local economy is strong
- - as it has been over the past year
in Connecticut - because tax
revenues rise as a function of
increased personal income,
corporate profits and other
sources. I liked GOs because the
state's economy continued to show
broad-based strength. With the
economy continuing to grow at
a steady pace, and tax revenues
rising, GOs generally performed
well during the period."
FUND FACTS
GOAL: to provide high current
tax-free income for
Connecticut residents
FUND NUMBER: 407
TRADING SYMBOL: FICNX
START DATE: October 29, 1987
SIZE: as of November 30,
1997, more than $341 million
MANAGER: George Fischer,
since 1996; manager,
various Fidelity and Spartan
municipal income funds;
joined Fidelity in 1989
(checkmark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/97 5/31/97 11/30/96
0 - 30 58 62 73
31 - 90 12 24 3
91 - 180 11 3 12
181 - 397 19 11 12
WEIGHTED AVERAGE MATURITY
11/30/97 5/31/97 11/30/96
SPARTAN CONNECTICUT MUNICIPAL
MONEY MARKET FUND 67 DAYS 48 DAYS 52 DAYS
CONNECTICUT TAX-FREE
MONEY MARKET FUNDS AVERAGE * 58 DAYS 46 DAYS 57 DAYS
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1997 AS OF MAY 31, 1997
Row: 1, Col: 1, Value: 57.0
Row: 1, Col: 2, Value: 12.0
Row: 1, Col: 3, Value: 10.0
Row: 1, Col: 4, Value: 16.0
Row: 1, Col: 5, Value: 5.0
Variable rate demand
notes (VRDNs) 51%
Commercial paper
(including CP mode) 12%
Tender bonds 9%
Municipal notes 12%
Other 16%
Variable rate demand
notes (VRDNs) 57%
Commercial paper
(including CP mode) 12%
Tender bonds 10%
Municipal notes 16%
Other 5%
Row: 1, Col: 1, Value: 51.0
Row: 1, Col: 2, Value: 12.0
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 12.0
Row: 1, Col: 5, Value: 16.0
*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENTS NOVEMBER 30, 1997
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - 89.9%
Cheshire Gen. Oblig. BAN 4.25% 8/7/98 $ 3,400,000 $ 3,411,606
Clipper Tax Exempt Trust Participating VRDN, Series 94-1,
3.89% (Liquidity Facility State Street Bank & Trust Co.) (c)
4,858,190 4,858,191
Connecticut Dev. Auth. Arpt. Facs. Rev. (Bradley Arpt. Hotel Proj.):
Series 1997 A, 3.80%, LOC Kredietbank N.V., VRDN 1,200,000 1,200,000
Series 1997 B, 3.80%, LOC Royal Bank of Canada, VRDN 1,000,000
1,000,000
Series 1997 C, 3.80%, LOC Fleet Nat'l. Bank, VRDN 470,000 470,000
Connecticut Dev. Auth. Health Care Rev. (Corp. for
Independent Living Proj.) Series 1990, 3.70%,
LOC Chase Manhattan Bank, VRDN 7,200,000 7,200,000
Connecticut Dev. Auth. Ind. Dev. Rev., VRDN:
(Rojo Enterprises LLC) 4.10%, LOC Fleet Bank NA 1,000,000 1,000,000
(W.E. Bassett Co. Proj.) Series 1986,
3.80%, LOC BankBoston (b) 1,000,000 1,000,000
Connecticut Dev. Auth. Poll. Cont. Rev., VRDN:
(Connecticut Lt. & Pwr. Co. Proj.):
Series 1993 A, 3.85%, LOC Deutsche Bank 3,400,000 3,400,000
Series 1993 B, 3.80%, LOC Union Bank of Switzerland (b) 3,700,000
3,700,000
Series 1996 A, 3.75% (AMBAC Insured)
(BPA Societe Generale, France) (b) 4,700,000 4,700,000
(United Illuminating Co.) Series 1996 A, 3.85%,
LOC Union Bank of Switzerland 1,300,000 1,300,000
Connecticut Dev. Auth. Solid Waste Disp. Facs. Rev., VRDN: (Exeter
Energy Proj.):
Series 1989 A, 3.95%, LOC Sanwa Bank (b) 3,500,000 3,500,000
Series 1989 B, 3.95%, LOC Sanwa Bank (b) 2,800,000 2,800,000
Series 1989 C, 3.95%, LOC Sanwa Bank (b) 400,000 400,000
(Rand-Whitney Containerboard) 3.55%, LOC Chase Manhattan Bank (b)
3,300,000 3,300,000
Connecticut Gen. Oblig.:
Bonds:
Rfdg. Econ. Recovery 5% 6/15/98 1,000,000 1,006,500
Series 1997 A, 6% 3/1/98 3,000,000 3,017,629
Series 1997 C, 5% 8/1/98 4,100,000 4,132,028
Participating VRDN, Series MGT-27, 4% (Liquidity Facility Morgan
Guaranty Trust Co.) (c) 775,000 775,000
Connecticut Health & Edl. Facs. Auth. Rev.:
Bonds (Yale Univ.) Series S:
3.70% 1/21/98, CP mode 1,000,000 1,000,000
3.65% 2/11/98, CP mode 9,000,000 9,000,000
3.65% 2/13/98, CP mode 2,000,000 2,000,000
Participating VRDN, Series BT-203,
4% (Liquidity Facility Bankers Trust Co.) (c) 3,000,000 3,000,000
(Charlotte Hungerford Hosp.) Series B,
3.65%, LOC Bank of Boston, Connecticut, VRDN 2,800,000 2,800,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Hsg. Fin. Auth. (Hsg. Mtg. Fin. Prog.):
Bonds Series 1989 D, 3.70% 1/13/98, CP mode (b) $ 2,475,000 $
2,475,000
Bonds Series 1990 C, 3.85% 2/9/98, CP mode (b) 1,490,000 1,490,000
Series 1995 G, 3.85% (AMBAC Insured)
(BPA Morgan Guaranty Trust Co.) VRDN 7,200,000 7,200,000
Connecticut Hsg. Fin. Auth. Participating VRDN (c):
Series PT-81, 4.05% (Liquidity Facility
Rabobank Nederland, N.V.) (b) 1,480,000 1,480,000
Series PT-148, 4% (Liquidity Facility
Bayerische Hypotheken-und Wechsel) 1,000,000 1,000,000
Series 1997 L, 4.15% (Liquidity Facility CoreStates Bank) (b)
1,800,000 1,800,000
Connecticut Muni. Elec. Energy Coop. Rev. Bonds
(Pwr. Supply Sys.) Series 1995 A:
3.50% 12/2/97, LOC Fleet Nat'l. Bank, CP mode 500,000 500,000
3.60% 12/4/97, LOC Fleet Nat'l. Bank, CP mode 1,100,000 1,100,000
Connecticut Reg. School Dist. #14 BAN 4% 6/4/98 1,700,000 1,703,326
Connecticut Spl. Assessment Unemployment Rev. Bonds
Series 1993 C, 3.90%, tender 7/1/98 (FGIC Insured) (Liquidity Facility
FGIC Security Purchase Inc.) 15,600,000 15,600,000
Connecticut Spl. Tax Oblig.:
(Transport Infrastructure Purpose)
Series1, 3.80%, LOC Commerzbank, VRDN 8,580,000 8,580,000
Participating VRDN, Series BT-262, 3.90% (Liquidity Facility Bankers
Trust Co.) (c) 5,100,000 5,100,000
Darien Gen. Oblig. BAN 4% 4/15/98 1,000,000 1,001,453
East Haven Gen. Oblig. BAN 4.25% 9/1/98 1,000,000 1,002,891
Fairfield Gen. Oblig. BAN 4% 1/14/98 1,534,000 1,534,550
Hartford Redev. Auth. (Underwood Towers Proj.) 3.75% (FSA Insured)
(BPA Barclays Bank) VRDN 2,400,000 2,400,000
New Canaan Gen. Oblig. BAN 3.75% 3/10/98 5,200,000 5,204,354
Stamford Gen. Oblig. BAN 4% 4/1/98 7,700,000 7,709,917
Stamford Hsg. Auth. Mutimodal Rev. (Morgan Street Proj.) Series 1994,
3.90%, LOC Deutsche Bank, VRDN (b) 2,500,000 2,500,000
Westport Gen. Oblig. BAN 4% 6/26/98 3,710,000 3,718,245
143,070,690
PUERTO RICO - 10.1%
Puerto Rico Commonwealth Gov't. Dev. Bank Rev. 3.55% (MBIA Insured)
(BPA Credit Suisse First Boston (BK)) VRDN 2,400,000 2,400,000
Puerto Rico Elec. Pwr. Auth. Rev. Participating VRDN, Series PA-150,
3.75% (Liquidity Facility Merrill Lynch & Co., Inc.) (c) 1,900,000
1,900,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Hwy. & Trans. Auth. Participating VRDN (c):
Series PA-114, 3.75%
(Liquidity Facility Merrill Lynch & Co., Inc.) $ 4,235,000 $
4,235,000
Series PA-125, 3.75%
(Liquidity Facility Merrill Lynch & Co., Inc.) 1,610,000 1,610,000
Puerto Rico Ind. Med. Higher Ed. & Envir. Cont. Facs. Fin.
Auth. Bonds Series 1988, 3.70% 1/15/98, LOC Bank of Tokyo-Mitsuishi
Ltd., CP mode 1,000,000 1,000,000
Puerto Rico Pwr. Auth. Participating VRDN (c):
Series PA-205, 3.75% (Liquidity Facility
Merrill Lynch & Co., Inc.) 3,700,000 3,700,000
Series SGA-44, 3.80% (Liquidity Facility
Societe Generale, France) 1,235,000 1,235,000
16,080,000
TOTAL INVESTMENTS - 100% $ 159,150,690
Total Cost for Income Tax Purposes $ 159,150,773
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At November 30, 1997, the fund had a capital loss carryforward of
approximately $8,272 of which $3,953 and $4,319 will expire on
November 30, 2002 and 2005, respectively.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 159,150,690
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 2,601,519
SHARE TRANSACTIONS IN PROCESS 843,708
INTEREST RECEIVABLE 1,305,751
TOTAL ASSETS 163,901,668
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 167,882
DISTRIBUTIONS PAYABLE 13,953
ACCRUED MANAGEMENT FEE 71,491
OTHER PAYABLES AND ACCRUED EXPENSES 1,129
TOTAL LIABILITIES 254,455
NET ASSETS $ 163,647,213
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 163,655,485
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (8,272)
NET ASSETS, FOR 163,655,483 SHARES OUTSTANDING $ 163,647,213
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE $1.00
PER SHARE ($163,647,213 (DIVIDED BY) 163,655,483 SHARES)
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
INTEREST INCOME $ 6,529,160
EXPENSES
MANAGEMENT FEE $ 910,157
NON-INTERESTED TRUSTEES' COMPENSATION 2,022
TOTAL EXPENSES BEFORE REDUCTIONS 912,179
EXPENSE REDUCTIONS (2,818) 909,361
NET INTEREST INCOME 5,619,799
REALIZED AND UNREALIZED GAIN (LOSS) (4,319)
NET REALIZED GAIN (LOSS) ON INVESTMENT SECURITIES
INCREASE (DECREASE) IN NET UNREALIZED GAIN FROM (353)
ACCRETION OF DISCOUNT
NET GAIN (LOSS) (4,672)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,615,127
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 5,619,799 $ 5,492,417
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) (4,319) 9,482
INCREASE (DECREASE) IN NET UNREALIZED GAIN FROM (353) 353
ACCRETION OF DISCOUNT
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 5,615,127 5,502,252
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (5,619,799) (5,492,417)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 156,608,247 204,280,325
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 5,491,051 5,308,500
COST OF SHARES REDEEMED (185,421,716) (198,246,723)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES (23,322,418) 11,342,102
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (23,327,090) 11,351,937
NET ASSETS
BEGINNING OF PERIOD 186,974,303 175,622,366
END OF PERIOD $ 163,647,213 $ 186,974,303
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
OF PERIOD
INCOME FROM INVESTMENT .031 .030 .034 .023 .022
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.031) (.030) (.034) (.023) (.022)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A, B 3.12% 3.08% 3.41% 2.28% 2.21%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 163,647 $ 186,974 $ 175,622 $ 167,056 $ 163,102
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE NET .50% .50% .50% .50% .24%
ASSETS C
RATIO OF NET INTEREST INCOME TO 3.08% 3.04% 3.36% 2.25% 2.17%
AVERAGE NET ASSETS
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR 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, 1997
1. SIGNIFICANT ACCOUNTING POLICIES.
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 financial statements have
been prepared in conformity with generally accepted accounting
principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the money market
fund and the income 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. Securities,
including restricted securities, for which quotations are not readily
available are valued at their fair value as determined in good faith
under consistently applied procedures under the general supervision of
the Board of Trustees. Short-term securities with remaining maturities
of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
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 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, market discount,
capital loss carryforwards and losses deferred due to futures and
options. The income fund also utilized earnings and profits
distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes.
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). Accumulated undistributed net
realized gain (loss) on investments may include temporary book and
tax basis differences that will reverse in a subsequent period. Any
taxable gain remaining at fiscal year end is distributed in the
following year.
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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the funds may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by FMR Texas Inc.,
an affiliate of Fidelity Management & Research Company (FMR). The Cash
Fund is an open-end money market fund available only to investment
companies and other accounts managed by FMR and its affiliates. The
Cash Fund seeks preservation of capital, liquidity, and current income
by investing in high-quality, short-term municipal securities of
various states and municipalities. Income distributions from the Cash
Fund are declared daily and paid monthly from net interest income.
Income distributions received by the funds are recorded as interest
income in the accompanying financial statements.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell
securities on a delayed delivery 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 values of the securities purchased or sold on a
delayed delivery basis are identified as such in the income fund's
schedule of investments.
2. OPERATING POLICIES -
CONTINUED
DELAYED DELIVERY TRANSACTIONS - CONTINUED
The funds may receive compensation for interest forgone in the
purchase of a delayed delivery security. With respect to purchase
commitments, each fund identifies securities as segregated in its
custodial records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under
the contract, or if the issuer does not issue the securities due to
political, economic, or other factors.
FUTURES CONTRACTS. The income fund may use futures contracts to manage
its exposure to the bond market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends 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 of any open
futures contracts at period end 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 or if the counterparties do not perform under
the contracts' terms. Gains (losses) are realized upon the expiration
or closing of the futures contracts. Futures contracts are valued at
the settlement price established each day by the board of trade or
exchange on which they are traded.
RESTRICTED SECURITIES. Certain 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. Information regarding restricted securities is included
under the caption "Other Information" at the end of each applicable
fund's schedule of investments.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $36,982,076 and $40,697,377, respectively.
The market value of futures contracts opened and closed during the
period amounted to $66,324,666 and $50,124,262, 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
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 $790 and $2,188 for the income and money market funds,
respectively. Effective April 1, 1997, the transaction fees were
eliminated for the income fund.
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.
5. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of certain funds with the
funds' custodian and transfer agent whereby credits realized as a
result of uninvested cash balances were used to reduce a
portion of each applicable fund's expenses. During the period, the
income and money market funds' expenses were reduced by $15,466 and
$2,818, respectively, under these arrangements.
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
Income Fund and Spartan Connecticut Municipal Money Market Fund:
We have audited the accompanying statements of assets and liabilities
of Fidelity Court Street Trust: Spartan Connecticut Municipal Income
Fund and Fidelity Court Street Trust II: Spartan Connecticut Municipal
Money Market Fund, including the schedules of portfolio investments,
as of November 30, 1997, 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 periods indicated. 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, 1997 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 Connecticut
Municipal Income Fund and Fidelity Court Street Trust II: Spartan
Connecticut Municipal Money Market Fund, including the schedules of
portfolio investments, as of November 30, 1997, 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 periods indicated, in conformity with
generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 9, 1998
DISTRIBUTIONS
The Board of Trustees of Spartan Connecticut 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
12/29/97 12/26/97 $0.10
During fiscal year ended 1997, 100% of each fund's income dividends
were free from federal income tax, and 8.93% and 24.98% of the Spartan
Connecticut Municipal Income Fund's and the Spartan Connecticut
Municipal Money Market Fund's income dividends were subject to the
federal alternative minimum tax.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate
the service, and on your first call, the system will help you create a
personal identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* 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.
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If more than one address is listed, please locate the address that is
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send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
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ACCOUNTS
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Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
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
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President -
INCOME FUND
Boyce I. Greer, Vice President -
MONEY MARKET FUND
George A. Fischer, Vice President -
INCOME FUND
Scott A. Orr, Vice President -
MONEY MARKET FUND
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
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for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
SPARTAN(registered trademark)
(REGISTERED TRADEMARK)
FLORIDA
MUNICIPAL
FUNDS
ANNUAL REPORT
NOVEMBER 30, 1997
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
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 21 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
PERFORMANCE 25 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 27 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 29 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS
AND ONE YEAR.
INVESTMENTS 30 A COMPLETE LIST OF THE FUND'S INVESTMENTS.
FINANCIAL STATEMENTS 36 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 40 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 44 THE AUDITORS' OPINION
ACCOUNTANTS
DISTRIBUTIONS 45
</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.
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets in late October and into
November, the Standard & Poor's 500 Index has risen more than 31%
year-to-date, almost three times its historical annual average.
Meanwhile, bond markets - primarily influenced by a relatively steady
flow of positive news on the inflation front - continued to post solid
returns through the first 11 months of 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while 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. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you the
information you need to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
SPARTAN FLORIDA MUNICIPAL INCOME FUND
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. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). You can also look at the fund's income, as
reflected in the fund's yield, to measure performance. If Fidelity had
not reimbursed certain fund expenses, the past five year and life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FLORIDA MUNICIPAL INCOME FUND 6.69% 43.71% 57.99%
LEHMAN BROTHERS FLORIDA 7.10% N/A N/A
MUNICIPAL BOND INDEX
FLORIDA MUNICIPAL DEBT FUNDS AVERAGE 6.47% 39.02% N/A
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period
- - in this case, one year, five years or since the fund started on
March 16, 1992. For example, if you had 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 Florida Municipal Bond Index - a total return
performance benchmark for Florida investment-grade municipal bonds
with maturities of at least one year. To measure how the fund's
performance stacked up against its peers, you can compare it to the
Florida municipal debt funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of 63
mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FLORIDA MUNICIPAL INCOME FUND 6.69% 7.52% 8.34%
LEHMAN BROTHERS FLORIDA 7.10% N/A N/A
MUNICIPAL BOND INDEX
FLORIDA MUNICIPAL DEBT FUNDS AVERAGE 6.47% 6.80% N/A
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual cumulative return
and show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns by annualizing
the result.)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19971130 19971210 120433 S00000000000001
Spartan FL: Muni Income LB Municipal Bond
00427 LB015
1992/03/31 10000.00 10000.00
1992/04/30 10172.61 10089.00
1992/05/31 10350.03 10207.75
1992/06/30 10575.20 10379.03
1992/07/31 11028.26 10690.20
1992/08/31 10779.40 10585.97
1992/09/30 10823.45 10655.20
1992/10/31 10580.52 10550.46
1992/11/30 10944.39 10739.42
1992/12/31 11095.24 10849.07
1993/01/31 11245.75 10975.24
1993/02/28 11812.46 11372.22
1993/03/31 11626.24 11252.01
1993/04/30 11765.70 11365.54
1993/05/31 11841.80 11429.42
1993/06/30 12066.54 11620.18
1993/07/31 12101.29 11635.40
1993/08/31 12393.62 11877.65
1993/09/30 12566.59 12012.93
1993/10/31 12600.06 12036.12
1993/11/30 12423.65 11930.08
1993/12/31 12745.45 12181.92
1994/01/31 12914.00 12321.04
1994/02/28 12524.91 12001.93
1994/03/31 11935.22 11513.21
1994/04/30 12024.45 11610.84
1994/05/31 12139.04 11711.51
1994/06/30 12056.43 11639.95
1994/07/31 12310.26 11853.31
1994/08/31 12320.58 11894.32
1994/09/30 12130.96 11719.71
1994/10/31 11814.13 11511.57
1994/11/30 11530.36 11303.44
1994/12/31 11886.42 11552.23
1995/01/31 12279.67 11882.39
1995/02/28 12704.70 12227.93
1995/03/31 12848.58 12368.43
1995/04/30 12858.11 12383.03
1995/05/31 13293.09 12778.17
1995/06/30 13130.49 12667.00
1995/07/31 13237.10 12787.08
1995/08/31 13405.68 12949.22
1995/09/30 13499.13 13031.19
1995/10/31 13706.26 13220.67
1995/11/30 13961.59 13440.00
1995/12/31 14100.58 13569.15
1996/01/31 14182.96 13671.60
1996/02/29 14061.09 13579.32
1996/03/31 13892.16 13405.77
1996/04/30 13847.66 13367.84
1996/05/31 13843.25 13362.49
1996/06/30 14002.86 13508.01
1996/07/31 14127.09 13630.93
1996/08/31 14122.39 13627.66
1996/09/30 14310.34 13818.45
1996/10/31 14461.71 13974.73
1996/11/30 14742.11 14230.47
1996/12/31 14658.38 14170.70
1997/01/31 14692.85 14197.48
1997/02/28 14827.51 14327.82
1997/03/31 14596.62 14136.83
1997/04/30 14723.54 14255.15
1997/05/31 14946.39 14469.55
1997/06/30 15099.85 14623.65
1997/07/31 15539.17 15028.73
1997/08/31 15369.96 14887.91
1997/09/30 15538.41 15064.63
1997/10/31 15627.27 15161.49
1997/11/28 15728.03 15250.64
IMATRL PRASUN SHR__CHT 19971130 19971210 120435 R00000000000071
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Florida Municipal Income Fund on March 31, 1992,
shortly after the fund started. As the chart shows, by November 30,
1997, the value of the investment would have grown to $15,728 - a
57.28% increase on the initial investment. For comparison, look at how
the Lehman Brothers Municipal Bond Index - a total return performance
benchmark for investment-grade municipal bonds with maturities of at
least one year - did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 would have grown to
$15,251 - a 52.51% 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,
1997 1996 1995 1994 1993
DIVIDEND RETURN 5.00% 5.10% 6.31% 5.01% 6.10%
CAPITAL APPRECIATION RETURN 1.69% 0.49% 14.78% -12.20% 7.42%
TOTAL RETURN 6.69% 5.59% 21.09% -7.19% 13.52%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. 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 capital gains, if any, paid by the fund are reinvested.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 4.34(CENTS) 26.67(CENTS) 53.85(CENTS)
ANNUALIZED DIVIDEND RATE 4.64% 4.69% 4.81%
30-DAY ANNUALIZED YIELD 4.30% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 6.72% - -
</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
$11.37 over the past one month, $11.33 over the past six months and
$11.20 over the past one 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%
1997 federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
With investor sentiment, shifting
supply/demand conditions and
Federal Reserve Board
policymaking playing key roles,
municipal bonds performed more
or less in line with their taxable
counterparts for the 12 months that
ended November 30, 1997. The
Lehman Brothers Municipal Bond
Index - a broad measure of the
municipal bond market - returned
7.17%, while the Lehman Brothers
Aggregate Bond Index - a
barometer of the taxable bond
market - returned 7.55%. Through
much of the first half of the
period, the supply/demand
scenario within the muni market
was favorable: low supply and high
demand that led to rising municipal
bond prices. The second half,
however, saw a large amount of
new issuance come to market, and
while demand remained strong, it
took time for investors to become
acclimated to this new supply. In the
interim, muni bond prices fell. The
cold months of winter contrasted
with what many felt was an
overheating economy ripe for an
inflation appearance. In late
March, the Federal Reserve Board
raised a key short-term interest rate
by 0.25%. While this move was
anticipated by investors, the market
nonetheless reacted negatively.
From April through mid-September,
market conditions were more
friendly. Favorable economic data
soothed inflationary concerns,
while the Fed's reluctance to cut
rates further was another positive
influence. High supply and low
demand resulted in a sub-par
performance for muni bonds in
September and October, but Asian
volatility toward the end of the
period changed momentum.
Currency devaluations meant prices
of Asian goods would become
cheaper, further decreasing the
likelihood of inflation.
An interview with Jonathan Short, Portfolio Manager of Spartan Florida
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, JON?
A. For the 12-month period that ended November 30, 1997, the fund had
a total return of 6.69%. To get a sense of how the fund did relative
to its competitors, the Florida municipal debt funds average returned
6.47% for the same 12-month period, according to Lipper Analytical
Services. Additionally, the Lehman Brothers Florida Municipal Bond
Index - which is a broad measure of the performance of the Florida
municipal bond market - returned 7.10% for the same one-year period.
Q. WHAT WERE SOME OF THE FUND'S BEST PERFORMERS DURING THE PERIOD?
A. Bonds with credit ratings of Baa - as judged by Moody's Investors
Service - were some of the fund's and the Florida municipal market's
best performers. There was a strong demand for these bonds - which are
the lowest-rated bonds that Moody's deems "investment- grade" -
because they offered more yield than higher-rated bonds. Additionally,
the supply of these bonds was limited so investors searching for
higher yields among investment-grade bonds were forced to vie for a
limited number of Baa-rated securities. As a result of strong demand
butting up against limited supply, Baa-rated bonds generally performed
better than higher-quality bonds throughout the period. However, I
gradually reduced the fund's stake in Baa-rated bonds throughout the
year. I did that because I wanted to lock in their gains given that I
didn't feel that the bonds I sold offered much potential for
additional appreciation.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. I can't single out any particular holdings or sector of the
municipal market that proved to be disappointing during the year.
However, the fund had limited holdings in long-maturity bonds - those
maturing in 20 years or more - which performed fairly well during the
second half of the period. Long-maturity bond prices typically are
more sensitive to rising and falling interest rates than
intermediate-term bonds with maturities of between 10 and 20 years -
which were the fund's primary focus throughout the year. When interest
rates rise, long-term bond prices fall more than intermediate-maturity
bonds and vice versa. My reason for keeping a fairly heavy weighting
in intermediate-maturity bonds was that I thought they offered better
value - considering their interest-rate sensitivity and their yields -
than longer-term bonds. Emphasizing intermediate-maturity bonds helped
the fund's performance in the first half of the period when interest
rates rose, but detracted from its performance in the second half of
the period when interest rates fell. That's because
intermediate-maturity bonds didn't fall as much as long-term bonds
when rates rose, and didn't rise as much as long-term bonds when
interest rates fell.
Q. THERE ARE DRAMATIC CHANGES OCCURRING IN THE ELECTRIC AND HEALTH
CARE INDUSTRIES - WHICH MADE UP TWO OF THE FUND'S LARGEST SECTOR
CONCENTRATIONS AT THE END OF THE PERIOD. HOW DID THOSE CHANGES AFFECT
YOUR CHOICES OF BONDS WITHIN THOSE SECTORS?
A. As far as the electric revenue sector was concerned, I continued to
focus on electric providers that I felt had reasonable cost structures
that would allow them to do well if electric rates fall as a result of
out-of-state competition. While increased competition hasn't yet been
legislated in Florida, the state presently is considering a number of
alternatives designed to allow more competition in the future.
Likewise, increased competition - as well as cost-cutting and
consolidation among health care providers - was an important factor in
selecting the fund's health care holdings. I look for facilities with
a strong market share, sensible balance sheets and effective
management teams, advantages that I think will be important in a more
competitive health care environment.
Q. WHAT'S YOUR OUTLOOK?
A. Over the past year, the municipal bond market has reacted strongly
to news about the economy's strength, pushing bond prices higher when
economic growth appeared moderate and forcing prices lower when growth
appeared strong enough to rekindle fears of inflation. I believe that
we're likely to see a continuation of the pattern - perhaps even more
volatile reactions - until economic growth trends become more defined
and sustainable. The market became increasingly volatile toward the
end of the period, when investors struggled with what effect Southeast
Asia's currency and economic problems might have on U.S. economic
growth. On the other hand, there are some factors related to municipal
bond supply and demand that I view as positive. Specifically, I expect
the supply of municipals to remain relatively low going into 1998.
And, if history is any guide, demand for municipals could increase in
the first part of the year. If that's the case, they could benefit
from a supply and demand imbalance.
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.
GEORGE FISCHER ON THE
CONNECTICUT ECONOMY:
"The fund's largest sector
concentration at the end of the
period was general obligation
bonds (GOs). GOs are municipal
bonds backed by the taxing power
of a city, county or state and are
repaid by general revenues, such
as taxes. That's in contrast to
revenue generated from a specific
facility, such as a tunnel. Generally
speaking, GOs tend to do well
when the local economy is strong
- - as it has been over the past year
in Connecticut - because tax
revenues rise as a function of
increased personal income,
corporate profits and other
sources. I liked GOs because the
state's economy continued to show
broad-based strength. With the
economy continuing to grow at
a steady pace, and tax revenues
rising, GOs generally performed
well during the period."
FUND FACTS
GOAL: to provide high current
tax-free income for
Connecticut residents
FUND NUMBER: 407
TRADING SYMBOL: FICNX
START DATE: October 29, 1987
SIZE: as of November 30,
1997, more than $341 million
MANAGER: George Fischer,
since 1996; manager,
various Fidelity and Spartan
municipal income funds;
joined Fidelity in 1989
(checkmark)
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
HEALTH CARE 17.2 13.9
TRANSPORTATION 15.6 13.5
ELECTRIC REVENUE 15.1 16.9
SPECIAL TAX 10.2 10.0
GENERAL OBLIGATION 9.6 11.3
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 12.2 13.6
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, 1997
6 MONTHS AGO
YEARS 6.9 7.3
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, 1997 AS OF MAY 31, 1997
AAA 58.5%
AA, A 20.0%
BAA 10.4%
BA, B 0.0%
NON-RATED 3.8%
SHORT-TERM
INVESTMENTS 7.3%
AAA 60.5%
AA, A 22.6%
BAA 11.2%
BA, B 0.0%
NON-RATED 3.0%
SHORT-TERM
INVESTMENTS 2.7%
ROW: 1, COL: 1, VALUE: 58.5
ROW: 1, COL: 2, VALUE: 20.0
ROW: 1, COL: 3, VALUE: 10.4
ROW: 1, COL: 4, VALUE: 0.0
ROW: 1, COL: 5, VALUE: 3.8
ROW: 1, COL: 6, VALUE: 7.3
ROW: 1, COL: 1, VALUE: 2.7
ROW: 1, COL: 2, VALUE: 3.0
ROW: 1, COL: 3, VALUE: 0.0
ROW: 1, COL: 4, VALUE: 11.2
ROW: 1, COL: 5, VALUE: 22.6
ROW: 1, COL: 6, VALUE: 60.5
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS
ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENTS NOVEMBER 30, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS IN SECURITIES
MUNICIPAL BONDS - 92.7%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - 91.3%
Alachua County Health Facs. Auth. Health Facs.
Rev. Rfdg. (Santa Fe Health Care Facs. Proj.):
6% 11/15/09 (Escrowed to Maturity) (d) Baa1 $ 2,950,000 $ 3,182,313
6.05% 11/15/16 (Escrowed to Maturity) (d) Baa1 6,230,000
6,798,488
Broward County Hsg. Fin. Auth. Single-Family
Mtg. Rev. 6.65% 8/1/21 (c) Aaa 1,225,000 1,318,406
Broward County Resource Recovery Rev. (SES
Broward Co. LP South Proj.) 7.95% 12/1/08 A 11,250,000 12,234,375
Broward County Spl. Oblig. Rfdg.:
5.50% 1/1/02 (AMBAC Insured) Aaa 1,365,000 1,426,425
5.50% 1/1/04 (AMBAC Insured) Aaa 2,320,000 2,450,500
5.50% 1/1/05 (AMBAC Insured) Aaa 2,585,000 2,743,331
Dade County Aviation Rev. Rfdg:
(Miami Int'l Arpt.):
Series A, 5.75% 10/1/03 (FSA Insured) (c) Aaa 1,800,000 1,917,000
Series A, 5.75% 10/1/04 (FSA Insured) (c) Aaa 5,000,000 5,343,750
Series B, 5% 10/1/07 (FSA Insured) (c) Aaa 3,380,000 3,434,925
Series B, 6.30% 10/1/05 (AMBAC Insured) Aaa 1,200,000 1,344,000
Series C, 5.50% 10/1/11 (MBIA Insured) Aaa 5,200,000 5,414,500
Series Y, 5.30% 10/1/05 Aa3 3,460,000 3,624,350
Dade County Gen. Oblig.:
Series DD, 7.70% 10/1/07 (AMBAC Insured) Aaa 1,820,000 2,259,075
Dade County Gtd. Entitlement Rev. (Cap.
Appreciation) Series B:
Rfdg. 0% 2/1/02 (MBIA Insured) Aaa 1,810,000 1,506,825
0% 8/1/18 (AMBAC Insured) (Pre-Refunded
to 2/1/06 @ 40.446) (d) Aaa 14,835,000 4,098,169
Dade County Resource Recovery Facs. Rev. Rfdg.
5.50% 10/1/09 (AMBAC Insured) (c) Aaa 4,000,000 4,155,000
Dade County Seaport Rev. Rfdg.:
Series 95:
6.20% 10/1/09 (MBIA Insured) Aaa 1,845,000 2,075,625
5.75% 10/1/15 (MBIA Insured) Aaa 5,100,000 5,355,000
6.25% 10/1/05 (MBIA Insured) Aaa 2,995,000 3,365,631
6.25% 10/1/06 (MBIA Insured) Aaa 1,575,000 1,783,688
Dade County Spl. Oblig. Rev. Rfdg. (Cap.
Appreciation) Series B:
0% 10/1/03 (AMBAC Insured) Aaa 4,160,000 3,203,200
0% 10/1/04 (AMBAC Insured) Aaa 5,045,000 3,689,156
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County Wtr. & Swr. Sys. Rev.:
6.25% 10/1/06 (FGIC Insured) Aaa $ 1,500,000 $ 1,695,000
6.25% 10/1/08 (FGIC Insured) Aaa 1,100,000 1,252,625
6.25% 10/1/10 (FGIC Insured) Aaa 1,000,000 1,147,500
5.50% 10/1/25 (FGIC Insured) Aaa 1,930,000 1,951,713
Dunedin Hosp. Rev. Rfdg. (Mease Health
Care Sys.) 5.25% 11/15/06 (MBIA Insured) Aaa 1,400,000 1,463,000
Dunedin Util Sys. Rev. Rfdg. 6.25% 10/1/11 Aaa 1,360,000 1,550,400
Duval County Hsg. Fin. Auth. Single Family Mtg.
Rev. Series C, 7.70% 9/1/24 (FGIC Insured)
(GNMA Collateralized) Aaa 610,000 651,175
Duval County School Dist. Rfdg.
6.30% 8/1/06 (AMBAC Insured) Aaa 5,000,000 5,456,250
Escambia County Health Facs. Auth. Health Facs.
Rev. Rfdg. (Baptist Hosp. & Baptist Manor):
Series B, 6% 10/1/14 BBB+ 2,825,000 2,938,000
Series B, 6.75% 10/1/14 BBB+ 3,250,000 3,546,563
Escambia County Poll. Cont. Rev.
(Champion Int'l. Corp. Proj.):
6.90% 8/1/22 (c) Baa1 5,000,000 5,556,250
6.40% 9/1/30 (c) Baa1 3,000,000 3,210,000
Escambia County Sales Tax Rev. Rfdg.
5.50% 1/1/07 (FGIC Insured) Aaa 2,000,000 2,117,500
Escambia County Util. Auth. Util. Sys. Rev.
Series B, 6.25% 1/1/15 (FGIC Insured) Aaa 1,500,000 1,717,500
Florida Board of Ed. Cap. Outlay Rfdg. (Pub. Ed.)
Series A, 5% 6/1/24 Aa2 5,000,000 4,793,750
Florida Board of Ed. Cap. Outlay (Pub. Ed.):
Series 1994-C, 5.40% 6/1/03 Aa 1,060,000 1,114,325
Series 1994-C, 5.40% 6/1/06 Aa 1,500,000 1,588,125
Series F, 5.50% 6/1/17 Aa2 3,000,000 3,060,000
Florida Division Board Fin. Dept. Gen. Svcs. Rev.
(Dept. of Natural Resources Preservation 2000):
Series A, 6.75% 7/1/08 (AMBAC Insured) Aaa 1,350,000 1,486,688
Series A, 5.70% 7/1/09 (AMBAC Insured) Aaa 3,000,000 3,172,500
Series A, 5.75% 7/1/11 (AMBAC Insured) Aaa 3,000,000 3,165,000
Florida Gen. Oblig. Rev. Rfdg. (Dept. of Trans.):
5% 7/1/03 Aa2 1,435,000 1,481,638
Series A, 5.75% 7/1/04 Aa2 1,955,000 2,101,625
(Right of Way) Series B, 5.50% 7/1/09 Aa2 3,810,000 4,029,075
Florida Hsg. Fin. Agcy. Rfdg. Multi-Family Mtg.
Rev. (Park Colony Proj.) Series D, 5.10%
4/1/13, LOC Mellon Bank, NA A+ 2,500,000 2,531,250
MUNICIPAL BONDS - CONTINUED
FLORIDA - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
Florida Hsg. Fin. Agcy. Rfdg.:
Single-Family Mtg. Rev.:
Series A, 6.35% 7/1/14 Aaa $ 1,265,000 $ 1,347,225
Series A, 6.55% 7/1/14 (GNMA Coll.) (c) Aaa 1,405,000 1,512,131
Series B, 6.55% 7/1/17 (GNMA Coll.) (c) Aaa 1,265,000 1,355,131
Florida Mid-Bay Bridge Auth. Rev. Series A:
7.50% 10/1/17 (e) - 1,700,000 1,865,750
6.875% 10/1/22 (Escrowed to Maturity) (d) - 3,000,000 3,618,750
Florida Muni. Pwr. Agcy. Rev. Rfdg. (Stanton II Proj.):
4.50% 10/1/16 (AMBAC Insured) Aaa 4,400,000 4,015,000
4.50% 10/1/27 (AMBAC Insured) Aaa 3,700,000 3,256,000
Florida Tpk. Auth. Tpk. Rev. (Dept. of Trans.) Series A:
5.50% 7/1/05 (AMBAC Insured) Aaa 3,250,000 3,461,250
5.50% 7/1/06 (AMBAC Insured) Aaa 3,000,000 3,206,250
6.25% 7/1/09 (FGIC Insured) Aaa 1,825,000 1,961,875
5.50% 7/1/14 (FGIC Insured) Aaa 1,500,000 1,550,625
5% 7/1/19 (FGIC Insured) Aaa 2,000,000 1,937,500
Gainesville Util. Sys. Rev.:
Series B, 6.50% 10/1/10 Aa 1,600,000 1,844,000
Rfdg. Series A, 5.75% 10/1/04 Aa 1,000,000 1,080,000
Rfdg. Series B, 5.50% 10/1/13 Aa 1,500,000 1,535,625
Greater Orlando Aviation Auth. Aprt. Facs. Rev.
Series A, 6.50% 10/1/05 (FGIC Insured) (c) Aaa 3,550,000 3,922,750
Hillsborough County Aviation Auth. Rev. Rfdg.
(Tampa Int'l. Aprt.) Series A,
6.90% 10/1/11 (FGIC Insured) Aaa 4,250,000 4,531,563
Hillsborough County Cap. Impt. Prog. Rev.
6% 8/1/06 (FGIC Insured) Aaa 1,000,000 1,110,000
Hillsborough County Gen. Oblig. Rfdg.
(Envir. Sensitive Lands Acquisition & Protection)
6% 7/1/02 (AMBAC Insured) Aaa 2,080,000 2,233,400
Hillsborough County Port Dist. Spl. Rev. Rfdg.
(Tampa Port Auth.):
6.50% 6/1/03 (FSA Insured) (c) Aaa 2,000,000 2,192,500
6.50% 6/1/05 (FSA Insured) (c) Aaa 2,000,000 2,225,000
Hillsborough County Util. Rev. Rfdg.
(Cap. Appreciation) Series A:
0% 8/1/05 (MBIA Insured) Aaa 6,500,000 4,566,250
0% 8/1/06 (MBIA Insured) Aaa 10,000,000 6,675,000
0% 8/1/07 (MBIA Insured) Aaa 7,000,000 4,462,500
Indian River County Wtr. & Swr. Rev. Rfdg.
Series A, 5.50% 9/1/11 (FGIC Insured) Aaa 2,000,000 2,107,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Jacksonville Dist. Wtr. & Swr. Rev. 6% 10/1/06
(MBIA Insured) Escrowed to Maturity (d) Aaa $ 2,075,000 $ 2,290,281
Jacksonville Elec. Auth. Rev. Rfdg.
(St. Johns River Issue 2):
Series 5, 7% 10/1/09 Aa1 2,490,000 2,642,513
Series 10, 6.50% 10/1/03 Aa1 1,500,000 1,665,000
Jacksonville Excise Taxes Rev.:
Series A, 6.50% 10/1/11 (AMBAC Insured)
(Pre-refunded to 10/1/99 @ 102 (d) Aaa 1,200,000 1,275,000
Series B, 5.60% 10/1/08 (FGIC Insured) (c) Aaa 2,300,000 2,371,875
Rfdg. 6.25% 10/1/05 (AMBAC Insured) Aaa 1,000,000 1,088,750
Rfdg. Series A, 5% 10/1/09 (FGIC Insured) Aaa 1,335,000 1,373,381
Jacksonville Health Facs. Auth. Hosp. Rev. Rfdg.
(Baptist Med. Ctr. Proj.) Series A,
7.30 6/1/19 (MBIA Insured) Aaa 500,000 531,250
Jacksonville Health Facs. Auth. Hosp. Rev.
(Charity Obligated Group) Series A:
5.50% 8/15/05 (MBIA Insured) Aaa 1,600,000 1,702,000
5.25% 8/15/08 (MBIA Insured) Aaa 3,720,000 3,845,550
Jacksonville Health Facs. Auth. Ind. Dev. Rev. Rfdg.
(Cypress Village Proj.) (Nat'l. Benevolent Assoc.):
7% 12/1/14 Baa 1,000,000 1,100,000
7% 12/1/22 Baa 2,000,000 2,200,000
6.25% 12/1/23 Baa 2,710,000 2,845,500
8% 12/1/24 Baa 2,740,000 3,198,950
Jacksonville Ind. Dev. Rev. Rfdg. (Cargill, Inc. Proj.)
6.40% 3/1/11 (g) AA- 1,250,000 1,340,625
Jacksonville Sales Tax Rev. (River City
Renaissance Proj.):
6% 10/1/02 (FGIC Insured) Aaa 1,500,000 1,618,125
6% 10/1/04 (FGIC Insured) Aaa 3,430,000 3,764,425
5.65% 10/1/14 (FGIC Insured) Aaa 1,900,000 1,971,250
Jacksonville Wtr. & Swr. Dev. Rev. (Jacksonville
Suburban Utils. Corp. Proj.) 6.75% 6/1/22 (c) A3 1,915,000
2,075,381
Key West Util. Board Elec. Rev. Rfdg. (Cap.
Appreciation) 0% 10/1/14 (AMBAC Insured) Aaa 6,755,000 2,828,656
Lakeland Elec. & Wtr. Rev.:
(Cap. Appreciation) 0% 10/1/09 (FGIC Insured) Aaa 2,840,000
1,579,750
Rfdg. (Jr. Sub-Lien):
6.25% 10/1/02 (FGIC Insured) Aaa 5,180,000 5,633,250
6.50% 10/1/06 (FGIC Insured) Aaa 2,200,000 2,513,500
6.50% 10/1/07 (FGIC Insured) Aaa 1,095,000 1,260,619
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Leesburg Hosp. Rev. Rfdg. (Leesburg Reg'l. Med.
Ctr. Proj.):
Series A, 5.60% 7/1/08 A3 $ 5,000,000 $ 5,243,750
Series B, 5.625% 7/1/13 A3 2,795,000 2,854,394
Leon County Spl. Tax Rev. Rfdg. 5.50% 10/1/07
(MBIA Insured) Aaa 1,000,000 1,066,250
Melbourne Arpt. Rev. Rfdg.:
5.75% 10/1/98 (MBIA Insured) (c) Aaa 205,000 208,298
5.75% 10/1/99 (MBIA Insured) (c) Aaa 215,000 221,719
6.25% 10/1/00 (MBIA Insured) (c) Aaa 230,000 242,938
6.25% 10/1/01 (MBIA Insured) (c) Aaa 240,000 257,100
6.25% 10/1/02 (MBIA Insured) (c) Aaa 260,000 282,425
6.25% 10/1/03 (MBIA Insured) (c) Aaa 270,000 296,325
6.50% 10/1/04 (MBIA Insured) (c) Aaa 290,000 324,800
6.50% 10/1/05 (MBIA Insured) (c) Aaa 310,000 350,688
6.50% 10/1/06 (MBIA Insured) (c) Aaa 325,000 370,906
6.75% 10/1/07 (MBIA Insured) (c) Aaa 350,000 409,500
6.75% 10/1/08 (MBIA Insured) (c) Aaa 375,000 439,688
6.75% 10/1/09 (MBIA Insured) (c) Aaa 400,000 471,000
6.75% 10/1/10 (MBIA Insured) (c) Aaa 425,000 500,438
Naples Hosp. Rev. Rfdg. (Naples Commty.
Hosp., Inc. Proj.):
5.10% 10/1/07 (MBIA Insured) Aaa 1,500,000 1,537,500
5% 10/1/19 (MBIA Insured) Aaa 1,000,000 962,500
North Broward Hosp. Dist. Hosp. Rev. Rfdg.
6.40% 1/1/06 (MBIA Insured)
(Pre-Refunded to 1/1/02 @ 102) (d) Aaa 950,000 1,040,250
North Miami Edl. Facs. Rev. (Johnson & Wales
Univ. Proj.) Series A, 6.125% 4/1/20 - 6,605,000 6,803,150
Orange County Health Facs. Auth. Hosp. Rev.:
Rfdg. (Adventist Health Sys.) 5.75%
5.75% 11/15/05 (AMBAC Insured) Aaa 2,000,000 2,162,500
(Orlando Reg'l. Healthcare) Series A,
6.25% 10/1/18 (MBIA Insured) Aaa 2,500,000 2,834,375
Orange County Hsg. Fin. Auth. Single-Family
Mtg. Rev. (Mtg. Backed Securities Prog.)
6.40% 10/1/14 (GMNA Collateralized) (c) Aaa 1,500,000 1,612,500
Orange County Tourist Dev. Tax Rev. Rfdg.
Series A:
5.75% 10/1/07 (MBIA Insured) Aaa 3,620,000 3,972,950
5.85% 10/1/08 (MBIA Insured) Aaa 1,795,000 1,978,988
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Orlando Util. Commission Wtr. & Elec. Rev.:
Rfdg.:
Sub-Series A, 5% 10/1/20 Aa2 $ 1,500,000 $ 1,428,750
Sub-Series D, 6.75% 10/1/17 Aa2 7,000,000 8,443,750
6% 10/1/10 Aa1 2,405,000 2,666,544
Sub-Series A, 6.50% 10/1/20 (Pre-Refunded
to 10/1/01 @ 102) (d) Aaa 2,055,000 2,255,363
5.538% 10/31/13 Aa2 9,400,000 9,599,750
Palm Beach County Health Facs. Auth. Rev.:
(Retirement Commty.-Adult Commty.
Total Svc. Inc.) 5.625% 11/15/20 A- 2,500,000 2,546,875
(Waterford Proj.) 5.50% 10/1/15 BBB 2,000,000 1,970,000
Pasco County Solid Waste Disp. & Resource
Recovery Sys. Rev.:
5.75% 4/1/04 (AMBAC Insured) (c)(f) Aaa 3,380,000 3,549,000
6% 4/1/10 (AMBAC Insured) (c)(f) Aaa 5,770,000 6,181,113
6% 4/1/11 (AMBAC Insured) (c)(f) Aaa 5,000,000 5,362,500
Pensacola Arpt. Rev. Rfdg. Series A,
6.125% 10/1/18 (MBIA Insured) (c)(f) Aaa 1,500,000 1,550,625
Plantation Health Facs. Auth. Rev. (Covenant
Retirement Commty. Inc.) 7.75% 12/1/22 A- 2,500,000 2,746,875
Polk County Ind. Dev. Auth. Ind. Dev. Rev.
(Winter Haven Hosp.) Series 2,
6.25% 9/1/15 (MBIA Insured) Aaa 1,465,000 1,582,200
Sarasota County Util. Sys. Rev. Rfdg.
Series A, 6% 10/1/05 (FGIC Insured) Aaa 1,830,000 2,008,425
Sarasota County Wtr. & Swr. Util. Rev. Rfdg.
6.25% 10/1/04 (FGIC Insured) Aaa 1,450,000 1,607,688
Seminole County Wtr. & Swr. Rev. Rfdg. & Impt.
6% 10/1/09 (MBIA Insured) Aaa 1,500,000 1,680,000
South Miami Health Facs. Auth. Hosp. Rev. Rfdg.
(Baptist Health Sys. Oblig. Group)
5.50% 10/1/05 (MBIA Insured) Aaa 1,980,000 2,106,225
Sumter County School Dist. Rev. (Multi-Dist.
Loan Prog.) 7.15% 11/1/15 (FSA Insured) Aaa 1,000,000 1,255,000
Sunrise Util. Sys. Rev. (Cap. Appreciation)
Series A:
0% 10/1/00 (AMBAC Insured) Aaa 1,070,000 952,300
0% 10/1/01 (AMBAC Insured) Aaa 1,225,000 1,039,719
0% 10/1/02 (AMBAC Insured) Aaa 1,000,000 808,750
Sunshine Gov't. Fing. Commission Rev.
Series A, 5.50% 10/1/05 (FGIC Insured) Aaa 1,000,000 1,067,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Tampa Rev. (Allegheny Health Sys. - St. Joseph):
6.70% 12/1/07 (MBIA Insured) Aaa $ 2,535,000 $ 2,794,838
6.75% 12/1/17 (MBIA Insured) Aaa 150,000 164,063
Tampa Sports Auth. Rev. 6% 1/1/05
(MBIA Insured) Aaa 2,235,000 2,458,500
Tarpon Springs Health Facs. Auth. Hosp. Rev.
(Helen Ellis Mem. Hosp. Proj.):
7.50% 5/1/11 BBB- 1,225,000 1,321,461
7.625% 5/1/21 BBB- 4,245,000 4,584,600
Volusia County Edl. Facs. Auth. Rev.
(Embry Riddle Aeronautical Univ.)
6.125% 10/15/16 Baa2 2,500,000 2,625,000
378,592,736
PUERTO RICO - 1.4%
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Rfdg. Series W:
6.50% 7/1/05 (MBIA Insured) Aaa 3,000,000 3,393,750
6.50% 7/1/06 (MBIA Insured) Aaa 2,000,000 2,282,500
5,676,250
TOTAL MUNICIPAL BONDS
(Cost $363,610,168) 384,268,986
MUNICIPAL NOTES (B) - 7.3%
FLORIDA - 7.3%
Alachua County Health Facs. Auth. Health Facs.
Rev. (Shands Teaching Hosp.) Series 1996B,
3.85% (MBIA Insured) BPA Suntrust Bank
Central Florida, NA, VRDN VMIG 1 1,800,000 1,800,000
Arcadia Hosp. Rev. (Desoto Mem. Hosp. Proj.)
Series 1994, 3.95%, LOC First Union
Nat'l. Bank, VRDN A-1 2,000,000 2,000,000
Brevard County Hsg. Fin. Auth. Multi-Family Hsg.
Auth. (Palm Place Hsg. Proj.) Series 1985,
3.85%, LOC Chase Manhattan Bank, VRDN VMIG 1 3,560,000 3,560,000
Dade County Ind. Dev. Auth. Rev. Exempt Facs.
Rev. Rfdg. (Florida Pwr. & Lt. Co. Proj.)
Series 1993, 4.10%, VRDN VMIG 1 1,400,000 1,400,000
Florida Board of Ed. Cap. Outlay (Muni. Trust
Receipts) Series SG-22, 4.05% (Liquidity
Facility Societe Generale) VRDN A-1+ 400,000 400,000
Florida Dept. of Trans. Participating VRDN, 4%
(Liquidity Facility Societe Generale, France) (h) A-1+ 1,700,000
1,700,000
MUNICIPAL NOTES (B) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Local Gov't. Fin. Auth. Rev.
(Lake Wales Medical Center, Inc.)
Series 1994A, 3.85%, LOC First Union
Nat'l. Bank, VRDN - $ 1,600,000 $ 1,600,000
Gulf Breeze Rev. Series 1995A, 4.05%,
LOC Barnett Bank, NA, VRDN A-1 700,000 700,000
Jacksonville Health Facs. Auth. Hosp. Rev.
(Genesis Rehabilitation Hosp.) Series 1996,
3.90%, LOC Barnett Bank, NA, VRDN VMIG 1 2,300,000 2,300,000
Lee County Hosp. Board Hosp. Rev. (Lee Mem.
Hosp. Proj.) Series 1985D, 3.90%,
LOC SunTrust Bank Miami, NA, VRDN VMIG 1 1,800,000 1,800,108
Manatee County Poll. Cont. Rev. (Florida Power
& Light Co. Proj.) Series 1994, 3.85%, VRDN VMIG 1 1,400,000
1,400,000
Martin County Poll. Cont. Rev. Rfdg. (Florida Pwr.
& Lt. Co. Proj.) Series 1994, 3.95%, VRDN VMIG 1 500,000 500,000
Orange County Ind. Dev. Board (Central Florida
Blood Bank Proj.) Series 1988, 3.95%,
LOC SunTrust Bank Central Florida,
NA, VRDN VMIG 1 1,045,000 1,045,000
Pasco County Hsg. Fin. Auth. Multi-Family Hsg.
Rev. (Carlton Arms of Magnolia Valley)
4.075%, LOC Bankers Trust, VRDN VMIG 1 500,000 500,000
Pinellas County Health Facs. Auth. Rev.
(Pooled Hosp. Loan Prog.)
4.10%, LOC Chase Manhattan Bank, VRDN VMIG 1 1,800,000 1,800,000
Putnam County Poll. Cont. Rev. Rfdg. (Florida
Power & Light Co. Proj.) 3.85%, VRDN VMIG 1 1,100,000 1,100,000
St. Lucie County Poll. Cont. Rev. (Florida Power
& Light Co. Proj.) 3.80%, VRDN VMIG 1 3,100,000 3,100,000
Sunshine State Gov't. Fin. Commission 3.75%
1/21/98, LOC Union Bank of Switzerland, CP VMIG 1 3,500,000
3,499,930
TOTAL MUNICIPAL NOTES
(Cost $30,205,038) 30,205,038
TOTAL INVESTMENTS - 100%
(Cost $393,815,206) $414,474,024
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
25 Municipal Bond Contracts Dec. 1997 $ 3,057,031 $ 31,879
35 US Treasury Bond Contracts Mar. 1998 4,166,094 (4,587)
$ 27,292
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL
INVESTMENT IN SECURITIES - 1.7%
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
VRDN - Variable Rate Demand Notes
LEGEND
6. Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
7. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
8. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
9. Security collateralized by an amount sufficient to pay interest and
principal.
10. A portion of the security was pledged to cover margin requirements
for futures contracts. At the period end, the value of security
pledged amounted to $246,938.
11. Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
12. Security exempt from registration under Rule 144A of the
securities Act of 1933. This security may be resold in transactions
exempt from registration, normally to qualified institutional buyers.
At period end, the value of this security amounted to $1,340,625 or
0.3% of net assets.
13. Provides evidence of ownership in one or more underlying municipal
bonds.
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 72.6% AAA, AA, A 80.6%
Baa 7.4% BBB 4.8%
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 Moody's or S&P amounted to 3.8%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investment in securities, is as follows:
Health Care 17.2%
Transportation 15.6
Electric Revenue 15.1
Special Tax 10.2
General Obligation 9.6
Resource Recovery 8.4
Water and Sewer 8.0
Escrowed/Pre-Refunded 6.0
Others (individually less than 5%) 9.9
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1997, the aggregate cost of investment securities for
income tax purposes was $393,822,863. Net unrealized appreciation
aggregated $20,651,161, of which $20,677,084 related to appreciated
investment securities and $25,923 related to depreciated investment
securities.
The fund hereby designates approximately $155,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
At November 30, 1997, the fund was required to defer approximately
$348,000 of losses on futures contracts.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $393,815,206) - $ 414,474,024
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 5,607,817
INTEREST RECEIVABLE 5,278,356
TOTAL ASSETS 425,360,197
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 32,249
PAYABLE FOR INVESTMENTS PURCHASED ON A 16,111,259
DELAYED DELIVERY BASIS
PAYABLE FOR FUND SHARES REDEEMED 63,727
DISTRIBUTIONS PAYABLE 573,080
ACCRUED MANAGEMENT FEE 182,481
PAYABLE FOR DAILY VARIATION ON FUTURES CONTRACTS 3,806
OTHER PAYABLES AND ACCRUED EXPENSES 2,832
TOTAL LIABILITIES 16,969,434
NET ASSETS $ 408,390,763
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 386,353,459
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 1,351,194
INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 20,686,110
NET ASSETS, FOR 35,767,943 SHARES OUTSTANDING $ 408,390,763
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $11.42
SHARE ($408,390,763 (DIVIDED BY) 35,767,943 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1997
INTEREST INCOME $ 21,089,693
EXPENSES
MANAGEMENT FEE $ 2,160,309
NON-INTERESTED TRUSTEES' COMPENSATION 3,384
TOTAL EXPENSES BEFORE REDUCTIONS 2,163,693
EXPENSE REDUCTIONS (3,649) 2,160,044
NET INTEREST INCOME 18,929,649
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 3,447,915
FUTURES CONTRACTS (416,465) 3,031,450
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 3,603,661
FUTURES CONTRACTS (64,293) 3,539,368
NET GAIN (LOSS) 6,570,818
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 25,500,467
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 18,929,649 $ 19,404,554
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 3,031,450 2,687,336
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 3,539,368 (966,203)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 25,500,467 21,125,687
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (18,929,649) (19,404,554)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN - (177,944)
TOTAL DISTRIBUTIONS (18,929,649) (19,582,498)
SHARE TRANSACTIONS 58,696,099 55,831,105
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 11,745,882 12,253,000
COST OF SHARES REDEEMED (59,766,704) (74,511,282)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 10,675,277 (6,427,177)
FROM SHARE TRANSACTIONS
REDEMPTION FEES 14,605 23,440
TOTAL INCREASE (DECREASE) IN NET ASSETS 17,260,700 (4,860,548)
NET ASSETS
BEGINNING OF PERIOD 391,130,063 395,990,611
END OF PERIOD $ 408,390,763 $ 391,130,063
OTHER INFORMATION
SHARES
SOLD 5,240,127 5,063,476
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 1,048,112 1,112,117
REDEEMED (5,343,762) (6,776,104)
NET INCREASE (DECREASE) 944,477 (600,511)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 D 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 11.230 $ 11.180 $ 9.740 $ 11.290 $ 10.520
BEGINNING OF PERIOD
INCOME FROM INVESTMENT .539 .546 .573 .587 .615
OPERATIONS
NET INTEREST INCOME
NET REALIZED AND UNREALIZED .190 .054 1.439 (1.352) .777
GAIN (LOSS)
TOTAL FROM INVESTMENT .729 .600 2.012 (.765) 1.392
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.539) (.546) (.573) (.587) (.615)
FROM NET REALIZED GAIN - (.005) - (.200) (.010)
TOTAL DISTRIBUTIONS (.539) (.551) (.573) (.787) (.625)
REDEMPTION FEES ADDED TO PAID .000 .001 .001 .002 .003
IN CAPITAL
NET ASSET VALUE, END OF PERIOD $ 11.420 $ 11.230 $ 11.180 $ 9.740 $ 11.290
TOTAL RETURN A 6.69% 5.59% 21.09% (7.19)% 13.52%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 408,391 $ 391,130 $ 395,991 $ 335,551 $ 428,367
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE .55% .55% .55% .54% .25%
NET ASSETS B B
RATIO OF EXPENSES TO AVERAGE NET .55% .54% .55% .54% .25%
ASSETS AFTER EXPENSE C
REDUCTIONS
RATIO OF NET INTEREST INCOME TO 4.81% 4.96% 5.37% 5.49% 5.52%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 25% 28% 65% 49% 50%
</TABLE>
D TOTAL RETURNS DO NOT INCLUDE THE FORMER ACCOUNT CLOSEOUT FEE. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
E FMR 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.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G EFFECTIVE DECEMBER 31, 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
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income and the effect of the $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, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FLORIDA MUNICIPAL 3.29% 15.93% 16.84%
MONEY MARKET FUND
ALL TAX-FREE MONEY MARKET 3.13% 14.49% 15.17%
FUNDS AVERAGE
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 August 24, 1992. For example, if you had 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 all tax-free
money market funds average, which reflects the performance of mutual
funds with similar objectives tracked by IBC Financial Data, Inc. The
past one year average represents a peer group of 425 mutual funds.
(The periods covered by the IBC Financial Data, Inc. numbers are the
closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FLORIDA MUNICIPAL 3.29% 3.00% 2.99%
MONEY MARKET FUND
ALL TAX-FREE MONEY MARKET 3.13% 2.74% 2.72%
FUNDS AVERAGE
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
12/1/97 9/1/97 6/2/97 3/3/97 12/2/96
SPARTAN FLORIDA MUNICIPAL 3.46% 3.09% 3.40% 3.01% 3.19%
MONEY MARKET FUND
ALL TAX-FREE MONEY MARKET 3.28% 2.98% 3.27% 2.87% 3.05%
FUNDS AVERAGE
SPARTAN FLORIDA MUNICIPAL 5.41% 4.83% 5.31% 4.70% 4.98%
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 all
tax-free money market funds average. Or you can look at the fund's
tax-equivalent yield, which is based on an effective 1997 federal tax
rate of 36%. A portion of the fund's income may be subject to the
alternative minimum tax. Figures for the all tax-free money market
funds average are from IBC Financial Data, Inc.
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
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio Manager of Spartan Florida
Municipal Money
Market Fund
Q. SCOTT, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST 12
MONTHS?
A. During the first several months of the period, investors tried to
figure out when the Federal Reserve Board might raise the fed funds
rate, which is the rate banks charge each other for overnight loans.
Over that period, data showed growth in the economy, but the pace of
that growth was inconsistent, and there were no signs of inflation. As
a result, the Fed kept the fed funds rate steady at 5.25%. In February
and March, however, signs that the economy was growing at a stronger
clip changed market sentiment. Expectations of a rate increase
culminated in the Fed's announcement at its March 25 meeting that it
had increased the fed funds rate from 5.25% to 5.50%. For the next
month or so, the market expected the Fed to continue to raise rates.
However, at its May meeting, the Fed decided to hold off because
economic growth had moderated and inflation was still benign.
Q. WHAT'S HAPPENED SINCE THEN?
A. Economic activity has been moderate to fairly strong, but inflation
has remained in check. The Fed has opted to keep rates unchanged, but
remains biased toward raising rates if signs of stronger inflation
emerge. In fact, in mid-October, several Fed officials made comments
indicating that they were thinking of raising rates in order to slow
the economy. However, that was before economic and market turmoil hit
Southeast Asia in late October and continued through November. Because
of this instability in the global financial markets, it now appears
that the Fed will hold off raising rates, in order to avoid roiling
the markets and causing more anxiety. As a result, most market
participants feel the Fed will wait until the market disruption in
Asia moderates before deciding if a strong U.S. domestic economy still
warrants a rate increase.
Q. WHAT WAS THE FUND'S STRATEGY DURING THIS PERIOD?
A. I actively sought out attractive opportunities that I felt would
increase the yield of the fund. For instance, the fund can invest a
portion of its assets in non-Florida securities throughout the year -
as long as they mature before December 31 - so I had the flexibility
to use those additional opportunities during the period. On top of
that, the fund bought lots of variable-rate securities, commercial
paper and other short-term issues that I felt would perform well, but
would leave the fund flexible in an environment where we expected
rates to be higher in the ensuing months. Buying these types of
securities kept the fund's average maturity fairly low - in a range of
30 to 45 days - during most of the period. I also began increasing the
fund's stake in variable-rate securities to help prepare the fund for
the large inflows that typically occur as many investors seek shelter
from the Florida intangible personal property tax at the end of the
year.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1997, was 3.47%,
compared to 3.43% six months ago. The more recent seven-day yield was
the equivalent of a 5.42% taxable rate of return for Florida investors
in the 36% federal income tax bracket. Through November 30, 1997, the
fund's 12-month total return was 3.29%, compared to 3.13% for the all
tax-free money market funds average, according to IBC Financial Data,
Inc.
Q. WHAT'S YOUR OUTLOOK?
A. I believe the Fed will still be biased toward raising rates over
the next several months, and that it is looking for reasons to do so.
At this point, the Fed has held off raising rates in spite of the
strength of the economy, because inflation has remained under control
and the uncertainty created in global financial markets from the
fallout in Asia has continued. With any inkling of inflationary
pressures, however, I believe the Fed would pull the trigger and raise
the fed funds rate at least one more time. As a result, I'm managing
the fund with the expectation that that will happen, although the
timing of a rate increase is unclear. A rate increase in the next few
months may help the U.S. economy, but it might send the worldwide
financial markets into an uproar. Therefore, I think the Fed would
like Asian markets to stabilize before it takes action.
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
SHARE PRICE BY INVESTING IN
HIGH-QUALITY, SHORT-TERM
MUNICIPAL MONEY MARKET
SECURITIES
FUND NUMBER: 428
TRADING SYMBOL: FSFXX
START DATE: AUGUST 24, 1992
SIZE: AS OF NOVEMBER 30,
1997, MORE THAN $421 MILLION
MANAGER: SCOTT ORR, SINCE JULY
1997; MANAGER, VARIOUS FIDELITY
AND SPARTAN MUNICIPAL MONEY
MARKET FUNDS; JOINED FIDELITY
IN 1989
(CHECKMARK)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/97 5/31/97 11/30/96
0 - 30 70 73 75
31 - 90 22 16 9
91 - 180 4 7 6
181 - 397 4 4 10
WEIGHTED AVERAGE MATURITY
11/30/97 5/31/97 11/30/96
SPARTAN FLORIDA MUNICIPAL 33 DAYS 31 DAYS 46 DAYS
MONEY MARKET FUND
ALL TAX-FREE MONEY MARKET 50 DAYS 38 DAYS 52 DAYS
FUNDS AVERAGE *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1997 AS OF MAY 31, 1997
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 3.0
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 23.0
Row: 1, Col: 5, Value: 69.0
Row: 1, Col: 1, Value: 4.0
Row: 1, Col: 2, Value: 6.0
Row: 1, Col: 3, Value: 16.0
Row: 1, Col: 4, Value: 13.0
Row: 1, Col: 5, Value: 61.0
Variable rate
demand notes
(VRDNs) 64%
Commercial paper
(including CP
mode) 24%
Tender bonds 9%
Municipal
notes 2%
Other 1%
Variable rate
demandnotes
(VRDNs) 61%
Commercial paper
(including CP
mode) 13%
Tender bonds 16%
Municipal
notes 6%
Other 4%
*SOURCE: IBC'S MONEY FUND SOURCE(registered trademark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENTS NOVEMBER 30, 1997
Showing Percentage of Total Value of Investments in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
DELAWARE - 0.1%
Delaware Econ. Dev. Auth. (Delmarva Pwr. & Lt. Proj.)
Series 1994, 4%, VRDN (b) $ 600,000 $ 600,000
FLORIDA - 98.4%
Alcahua County Health Facs. Auth. Rev. Bonds
(Academic Research Bldg. Proj.) Series 1989, 3.85%
2/12/98, LOC Barnett Bank, NA, CP mode 6,250,000 6,250,000
Broward County Hsg. Fin. Auth. Multi-Family Hsg. Rev.:
(Jacaranda Village Arpts. Proj.) Series 1997, 3.85%,
LOC Marine Midland Bank, NA, VRDN 3,500,000 3,500,000
(Palm Aire-Oxford Proj.) Series 1990, 4.20% (Continental
Casualty Co. Guaranteed) VRDN 1,800,000 1,800,000
(Town of Jacaranda) 3.85%, LOC SouthTrust Bank, VRDN 4,400,000
4,400,000
Broward County Ind. Dev. Auth.:
(Femc & Fast Industries, Inc., 4.05%, LOC SunTrust Bank
of South Florida, NA, VRDN (b) 1,500,000 1,500,000
(Heico Aerospace Corp. Proj.) 4.05%, LOC SunTrust Bank
of South Florida, NA, VRDN (b) 1,000,000 1,000,000
(Rib Associates Proj.) Series 1989, 4.05%, LOC
SunTrust Bank, Orlando, VRDN (b) 1,280,000 1,280,000
Broward County Sales Tax Rev. Series B, 3.80% 2/24/98
(Liquidity Facility Bank of Tokyo-Mitsubishi, Ltd.) CP (b) 3,900,000
3,900,000
Clay County Hsg. Fin. Auth. Participating VRDN, Series PT-61,
4.10%, LOC Bayerische Hypotheken-und Wechsel (b)(c) 3,415,000
3,415,000
Dade County Cap. Asset Allocation Spl. Oblig. Rev.
Series 1990, 4.30%, LOC Sanwa Bank Ltd., VRDN 1,000,000 1,000,000
Dade County Hsg. Fin. Auth. Single Family Mtg. Rev.:
Bonds Series 1997 C, 4.05%, tender 10/16/98 (FGIC
Capital Markets Svcs. Guaranteed) (b) 3,800,000 3,800,000
Participating VRDN, Series 1995 B, 4.10% (Liquidity
Facility Bank of America) (c) 8,135,000 8,135,000
Dade County Ind. Dev. Auth. Ind. Dev. Rev.:
(Guastafeste Proj.):
Series 1987, 4.05%, LOC SunTrust Bank, VRDN (b) 2,740,000
2,740,000
Series 1991, 4.05%, LOC SunTrust Bank, VRDN (b) 1,170,000
1,170,000
(Royal Store Fixtures Corp. Proj.) 4.05%, LOC SunTrust
Bank, NA, Miami, VRDN (b) 2,020,000 2,020,000
Dade County Multi-Family Hsg. Rev. (Biscayne View
Apts. Proj.) Series 1993, 4.20% (Commonwealth Life
Insurance Co. Guaranteed) VRDN (b) 28,475,000 28,475,000
Dade County Wtr. & Swr. Sys. Rev.:
3.80% (BPA Commerzbank Bank) VRDN 11,200,000 11,200,000
Participating VRDN, Series SG-74, 4% (Liquidity Facility
Societe Generale, France) (c) 9,845,000 9,845,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Duval County Hsg. Fin. Auth. Rev. (Lakes Mayport Apts.)
Series 1985F, 3.90%, LOC SunTrust Bank Atlanta, VRDN $ 1,300,000 $
1,300,000
Escambia County Hsg. Fin. Auth. Participating VRDN
4.10% (Liquidity Facility Merrill Lynch & Co., Inc.) (b)(c) 2,000,000
2,000,000
Escambia County Poll. Cont. Rev. Rfdg. (Monsanto
Co. Proj.) Series 1994, 3.95%, VRDN 4,775,000 4,775,000
Escambia County Solid Waste Disp. Rev. (Monsanto
Co. Proj.) Series 1993, 4.05%, VRDN (b) 5,300,000 5,300,000
Florida Board of Ed.:
Admin. Cap. Outlay (Pub. Ed.):
Bonds Series A, 4.75% 1/1/98 2,750,000 2,752,630
Participating VRDN Series 1995 SG-22, 4%
(Liquidity Facility Societe Generale, France) (c) 4,570,000
4,570,000
Participating VRDN, Series 1995 A, 4.04% (Liquidity
Facility Citibank, NA) (c) 9,500,000 9,500,000
Florida Capital Proj. Fin. Auth (Capital Proj. Loan Prog.)
Series 1997-A, 3.90% (FSA Insured) (BPA Credit
Suisse First Boston) VRDN 8,000,000 8,000,000
Florida Dept. of Trans. Participating VRDN, 4% (Liquidity
Facility Societe Generale, France) (c) 13,010,000 13,010,000
Florida Gen. Oblig. Participating VRDN Series 1997,
3.95% (Liquidity Facility Merrill Lynch & Co., Inc.) (c) 3,000,000
3,000,000
Florida Hsg. Fin. Agcy. Rev.:
(Ashley Lake Park II Proj.) Series 1989 J, 3.95%
LOC Barclays Bank, VRDN (b) 1,100,000 1,100,000
(Banyan Bay Apts. Proj.) 4.15%, LOC PNC Bank,
Kentucky, VRDN (b) 5,275,000 5,275,000
(Heron Parkway Proj.) 3.95%, LOC Nationsbank,
NA, VRDN 3,300,000 3,300,000
(Oaks at Mill Creek Proj.) Series 1985, 3.85%
tender 11/1/98, LOC Chase Manhattan Bank 3,065,000 3,065,000
(Village Place Proj.) Series 1985 LL, 3.85%
tender 11/1/98, LOC Chase Manhattan Bank 3,000,000 3,000,000
Multi-Family Hsg. Rev. Rfdg.
(Brandon-Oxford Proj.) Series 1990 C, 4.20%
(Continental Casualty Co. Guaranteed) VRDN 7,800,000 7,800,000
(Hillsborough-Oxford Proj.) Series D, 4.20%
(Continental Casualty Co. Guaranteed) VRDN 5,590,000 5,590,000
Florida Local Gov't. Fin. Commission Series A, CP:
3.85% 1/7/98, LOC First Union Nat'l. Bank of
North Carolina 2,700,000 2,700,000
3.95% 1/6/98, LOC First Union Nat'l. Bank of
North Carolina 8,380,000 8,380,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Fort Myers Improvement Rev. Participating VRDN
Series PA-180, 3.95% (AMBAC Insured) (Liquidity
Facility Merrill Lynch & Co., Inc.) (c) $ 2,850,000 $ 2,850,000
Gulf Breeze Florida Muni Bond Fund Series 1995 A, 4.05%,
LOC Barnett Bank, VRDN 5,400,000 5,400,000
Gulf Breeze Local Gov't. Loan Program
Series 1985B, 4% (FGIC Insured)
(Liquidity Facility Credit Local de France) VRDN 4,000,000 4,000,000
Hillsborough County Aviation Auth. Rev.
(Tampa Int'l. Arpt.) CP:
3.85% 2/12/98, LOC National Westminster Bank,
PLC (b) 3,600,000 3,600,000
3.85% 2/12/98, LOC National Westminster Bank,
PLC (b) 4,100,000 4,100,000
3.80% 2/13/98, LOC National Westminster Bank,
PLC (b) 5,100,000 5,100,000
3.80% 2/13/98, LOC National Westminster Bank,
PLC (b) 3,900,000 3,900,000
Hillsborough County Ind. Dev. Rev. (Vigo Importing Proj.):
4.25%, LOC NationsBank, NA, VRDN (b) 1,340,000 1,340,000
4.35%, LOC Barnett Bank, NA, VRDN (b) 1,400,000 1,400,000
Indian River County Hosp. Dist. Rev. Bonds, CP mode:
Series 1988:
3.75% 1/5/98, LOC Kredietbank NV 4,700,000 4,700,000
3.80% 2/12/98, LOC Kredietbank NV 4,350,000 4,350,000
Series 1989, 3.85% 2/9/98, LOC Kredietbank NV 1,800,000 1,800,000
Series 1990, 3.75% 1/5/98, LOC Kredietbank NV 2,000,000 2,000,000
Jacksonville Elec. Auth. Rev.
Series A, 3.85% 1/5/98 (Liquidity Facility Morgan
Guaranty Trust Co. of New York) CP 2,000,000 2,000,000
Jacksonville Health Fac. Auth.:
(Faculty Practice Assoc.) 4.10%, LOC NationsBank,
NA, VRDN 2,000,000 2,000,000
Participating VRDN, Series 1996 M, 4.05% (Liquidity
Facility Caisse des Depots et Consignations) (c) 13,640,000
13,640,000
Jacksonville Hosp. Rev. (Univ. Med. Ctr. Proj.):
Series 1988, 4.05%, LOC Sumitomo Bank Ltd., VRDN 5,100,000
5,100,000
Series 1989, 4.05%, LOC Sumitomo Bank Ltd., VRDN 4,900,000
4,900,000
Jacksonville Ind. Dev. Rev. (Samuel C. Taylor Foundation Proj.)
Series 1987, 4.10%, LOC Barnett Bank, NA, VRDN 4,900,000 4,900,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Jacksonville Poll. Cont. Rev. Rfdg. Bonds (Florida Light &
Power Co. Proj.) Series 1994, CP mode:
3.75% 1/5/98 $ 3,400,000 $ 3,400,000
3.85% 1/5/98 2,000,000 2,000,000
3.80% 2/27/98 3,500,000 3,500,000
Jacksonville River City Renaissance Prog.
3.75% 1/5/98, CP 2,800,000 2,800,000
Lee County Hosp. Board Rev. Bonds (Lee Memorial Hosp.
Proj.) Series 1997 B, 3.85% 1/26/98, LOC SunTrust
Bank, Central Florida, NA, CP mode 4,000,000 4,000,000
Manatee County Hsg. Fin. Auth. (Harbor Pointe Proj.)
Series 1990 A, 3.95%, LOC Marine Midland
Bank, NA, VRDN 1,800,000 1,800,000
Monroe County School Dist Rev. RAN 4.25% 12/17/97 1,000,000
1,000,147
Okeechobee County Solid Waste Rev. (Chambers Waste Sys.
of Florida Proj.) Series 1992, 4.10%, LOC Morgan
Guaranty Trust NY, VRDN (b) 9,650,000 9,650,000
Orange County Health Fac. Auth. Participating VRDN, Series
PA-95, 3.85% (Liquidity Facility Merrill Lynch & Co.) (c) 3,985,000
3,985,000
Orange County Hsg. Fin. Auth. Multi-Family Hsg. Rev.:
(Regal Pointe Apts.) Series 1997 A, 4.10%, LOC
Nationsbank, NA, VRDN 5,893,000 5,893,000
(Water View Club) Series 1997 D, 4.01%, LOC Key
Bank, NA, VRDN (b) 4,000,000 4,000,000
Orange County School Dist. RAN Series A, 4.25% 1/15/98 7,500,000
7,502,676
Orlando Spl. Assessment Rev. (Republic Drive Interchange
Proj.) Series 1997A, 3.85%, LOC Morgan Guaranty
Trust Co. of New York, VRDN 8,500,000 8,500,000
Orlando Util. Commission Wtr. & Elec. Subordinate Rev.
Participating VRDN, Series 1993A-SG-18, 4%
(Liquidity Facility Societe Generale) (c) 4,365,000 4,365,000
Palm Beach County Hsg. Fin. Auth.:
(Lake Crystal Apts. Proj. Phase II) Series 1988 A,
3.95%, LOC Citibank, VRDN (b) 1,785,000 1,785,000
Multi-Family Hsg. Rev.:
(Haverhill Commons Proj.) Series 1997A, 4%, LOC
Credit Lyonnais, VRDN 3,600,000 3,600,000
(Village Crossings) Series 1997B, 4%, LOC Credit
Lyonnais, VRDN 2,000,000 2,000,000
Single Family Mtg. Rev. Bonds Series B, 3.95%
tender 7/1/98 7,000,000 7,000,000
Pasco County Hsg. Fin. Auth. Multi-Family Hsg. Rev.
(Carlton Arms of Magnolia Valley) Series 1985, 4.075%,
LOC First Union Nat'l. Bank, VRDN 1,500,000 1,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Pensacola Rev. (Harborview Corp. Proj.)
4.10%, LOC AmSouth Bank, NA, Alabama, VRDN $ 2,865,000 $ 2,865,000
Pinellas County Hsg. Fin. Auth. Single Family Mortgage
Rev. Bonds 3.80% tender 2/1/98 4,055,000 4,055,000
Pinellas County Ind. Dev. Auth. Ind. Dev. Rev. Bonds
(Hunter Douglas Inc.) 4.05%, LOC ABN-AMRO
Bank NV, VRDN (b) 2,100,000 2,100,000
Plant City (South Baptist Hosp. Proj.) Series 1993,
4.05%, LOC Barnett Bank, NA, VRDN (b) 4,600,000 4,600,000
Putnam County Dev. Auth. Bonds (Seminole Elec.
Coop Proj.) Series 1984 H-3, 3.70% tender 3/15/98
(Nat'l. Rural Utils. Coop-CFC Guaranteed) 14,750,000 14,750,000
Sarasota County Public Hosp. Dist. Rev. Bonds (Sarasota
Memorial Hosp.) Series 1991, 3.90% 12/11/97
(Liquidity Facility Goldman Sachs & Co.) CP mode 4,000,000 4,000,000
St. Lucie County Poll. Cont. Rev. Rfdg. Bonds
(Florida Power & Light Co. Proj.) CP mode:
Series 1994A, 3.75% 1/5/98 2,400,000 2,400,000
Series 1994A, 3.80% 1/6/98 2,500,000 2,500,000
St. Lucie (City of Port) Util. Rev. Participating VRDN, 4%
(Liquidity Facility Merrill Lynch & Co., Inc) (c) 3,500,000
3,500,000
St. Petersburg Capital Impt. Rev. (Arpt. and Golf
Course Proj.) Series 1997B, 3.95%,
LOC SunTrust Bank, Tampa Bay, VRDN 1,000,000 1,000,000
Sunrise Util. Sys. Rev. Participating VRDN (c):
Series SGB-16, 4% (Liquidity Facility Societe Generale) 5,030,000
5,030,000
Series SGB-17, 4% (Liquidity Facility Societe Generale) 2,325,000
2,325,000
Sunshine State Gov't. Fin. Commission:
Series 1986, 3.75% 12/10/97 CP 15,000,000 15,000,000
Series 1994:
3.75% 1/6/96 CP 1,000,000 1,000,000
3.80% 1/5/98 CP 4,400,000 4,400,000
3.80% 1/5/98 CP 3,000,000 3,000,000
3.80% 1/6/98 CP 2,520,000 2,520,000
420,253,453
LOUISIANA - 0.7%
West Baton Rouge Parish District No. 3 Rev. (Dow
Chemical Co. Project) Series 1994 A, 4.15%, VRDN (b) 2,800,000
2,800,000
NEVADA - 0.2%
Clark County Spl. Facs. Arpt. Rev. Bonds (Signature Flight
Support Corp. Proj.) Series 1997A, 4% tender 12/1/97,
LOC Bayerische Landesbank 1,000,000 1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
TEXAS - 0.6%
Brazos River Hbr. Navigation Dist. (Dow Chemical Co.):
Series 1996, 4.15%, VRDN (b) $ 700,000 $ 700,000
Series 1997, 4.15%, VRDN (b) 1,700,000 1,700,000
2,400,000
TOTAL INVESTMENTS - 100% $ 427,053,453
Total Cost for Income Tax Purposes $ 427,053,453
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
RAN - Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At November 30, 1997, the fund had a capital loss carryforward of
approximately $55,500 of which $100, $1,000, $22,000, $4,000, $10,000
and $18,400 will expire on November 30, 2000, 2001, 2002, 2003, 2004
and 2005, respectively.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - SEE $ 427,053,453
ACCOMPANYING SCHEDULE
CASH 19,073
SHARE TRANSACTIONS IN PROCESS 8,554,379
RECEIVABLE FOR INVESTMENTS SOLD 438
INTEREST RECEIVABLE 2,954,901
TOTAL ASSETS 438,582,244
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 16,957,639
DISTRIBUTIONS PAYABLE 56,281
ACCRUED MANAGEMENT FEE 160,428
OTHER PAYABLES AND ACCRUED EXPENSES 2,106
TOTAL LIABILITIES 17,176,454
NET ASSETS $ 421,405,790
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 421,461,337
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (55,547)
NET ASSETS, FOR 421,461,337 SHARES OUTSTANDING $ 421,405,790
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($421,405,790 (DIVIDED BY) 421,461,337 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1997
INTEREST INCOME $ 16,289,853
EXPENSES
MANAGEMENT FEE $ 2,199,562
NON-INTERESTED TRUSTEES' COMPENSATION 2,519
TOTAL EXPENSES BEFORE REDUCTIONS 2,202,081
EXPENSE REDUCTIONS (58,319) 2,143,762
NET INTEREST INCOME 14,146,091
NET REALIZED GAIN (LOSS) ON INVESTMENTS (18,438)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 14,127,653
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 14,146,091 $ 12,342,191
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) (18,438) (9,713)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 14,127,653 12,332,478
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (14,146,091) (12,342,191)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 772,805,775 705,315,091
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 13,506,143 11,594,514
COST OF SHARES REDEEMED (767,165,281) (678,018,565)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 19,146,637 38,891,040
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 19,128,199 38,881,327
NET ASSETS
BEGINNING OF PERIOD 402,277,591 363,396,264
END OF PERIOD $ 421,405,790 $ 402,277,591
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
OF PERIOD
INCOME FROM INVESTMENT .032 .031 .035 .024 .025
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.032) (.031) (.035) (.024) (.025)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A 3.29% 3.17% 3.57% 2.47% 2.51%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 421,406 $ 402,278 $ 363,396 $ 337,530 $ 306,741
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE .50% .50% .50% .46% .18%
NET ASSETS B B
RATIO OF EXPENSES TO AVERAGE .49% C .47% .50% .46% .18%
NET ASSETS AFTER EXPENSE C
REDUCTIONS
RATIO OF NET INTEREST INCOME TO 3.21% 3.15% 3.52% 2.43% 2.48%
AVERAGE NET ASSETS
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE. TOTAL RETURNS
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
B FMR 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 FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1997
4. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Florida Municipal Income Fund (the income fund) is a fund of
Fidelity Court Street Trust. Spartan 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 financial statements have been
prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at
the date of the financial statements. 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. Securities for
which quotations are not readily available are valued at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining
maturities of sixty days or less for which quotations are not readily
available are valued at amortized cost or original cost plus accrued
interest, both of which approximate current value.
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 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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
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
futures. The income fund also utilized earnings and profits
distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes.
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 gain remaining at
fiscal year end is distributed in the following year.
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.
5. OPERATING POLICIES.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the funds may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by FMR Texas Inc.,
an affiliate of Fidelity Management & Research Company (FMR). The Cash
Fund is an open-end money market fund available only to investment
companies and other accounts managed by FMR and its affiliates. The
Cash Fund seeks preservation of capital, liquidity, and current income
by investing in high-quality, short-term municipal securities of
various states and municipalities. Income distributions from the Cash
Fund are declared daily and paid monthly from net interest income.
Income distributions received by the funds are recorded as interest
income in the accompanying financial statements.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell
securities on a delayed delivery 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 values of the securities purchased or sold on a
delayed delivery basis are identified as such in the fund's schedule
of investments. With respect to purchase commitments, the fund
identifies securities as segregated in its custodial records with a
value at least
2. OPERATING POLICIES -
CONTINUED
DELAYED DELIVERY TRANSACTION -
CONTINUED
equal to the amount of the commitment. 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. The income fund may use futures contracts to manage
its exposure to the bond market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends 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 of any open
futures contracts at period end 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 or if the counterparties do not perform under
the contracts' terms. Gains (losses) are realized upon the expiration
or closing of the futures contracts. Futures contracts are valued at
the settlement price established each day by the board of trade or
exchange on which they are traded.
RESTRICTED SECURITIES. Certain 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. Information regarding restricted securities is included
under the caption "Other Information" at the end of each applicable
fund's schedule of investments.
6. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $97,331,572 and $98,899,895, respectively.
The market value of futures contracts opened and closed during the
period amounted to $55,512,230 and $51,614,347, respectively.
7. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
MANAGEMENT FEE - CONTINUED
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 $925 and $4,864 for the period for the income and money
market funds, respectively. Effective April 1, 1997, these transaction
fees were eliminated for the income fund.
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.
8. EXPENSE REDUCTIONS.
Each fund has entered into arrangements with its custodian and
transfer agent whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of the fund's expenses. During
the period, the income and money market fund's expenses were reduced
by $3,649 and $58,319, respectively, under these arrangements.
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 Fund and Spartan Florida Municipal Money Market Fund:
We have audited the accompanying statements of assets and liabilities
of Fidelity Court Street Trust: Spartan Florida Municipal Income Fund
and Fidelity Court Street Trust II: Spartan Florida Municipal Money
Market Fund, including the schedules of portfolio investments, as of
November 30, 1997, 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 periods indicated. 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, 1997 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 Florida
Municipal Income Fund and Fidelity Court Street Trust II: Spartan
Florida Municipal Money Market Fund as of November 30, 1997, 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 periods indicated, in
conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 9, 1998
DISTRIBUTIONS
The Board of Trustees of Spartan Florida Municipal Income Fund voted
to pay on December 29 1997, to shareholders of record at the opening
of business on December 26, 1997, a distribution of $.05 per share
derived from capital gains realized from sales of portfolio
securities.
During fiscal year ended 1997, 100% of the income and money market
funds income dividends were free from federal income tax, and 10.3%
and 30.1%, respectively, of the funds' income dividends were subject
to the federal alternative minimum tax.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate
the service, and on your first call, the system will help you create a
personal identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 for significant savings on Web access from internetMCI.
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(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* 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 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
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OVERNIGHT EXPRESS
Fidelity Investments
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Hebron, KY 41048
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 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
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SELLING SHARES
Fidelity Investments
P.O. Box 660602
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OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
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
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President -
INCOME FUND
Boyce I. Greer, Vice President -
MONEY MARKET FUND
Jonathan Short, Vice President -
INCOME FUND
Scott Orr, Vice President -
MONEY MARKET FUND
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
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)
TouchTone Xpress 1-800-544-5555
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