SPARTAN(registered trademark)
(REGISTERED TRADEMARK)
NEW JERSEY MUNICIPAL
FUNDS
AND
FIDELITY
NEW JERSEY MUNICIPAL
MONEY MARKET FUND
SEMIANNUAL REPORT
MAY 31, 1998
CONTENTS
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PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
4 PERFORMANCE
7 FUND TALK: THE MANAGER'S OVERVIEW
10 INVESTMENT CHANGES
11 INVESTMENTS
19 FINANCIAL STATEMENTS
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
23 PERFORMANCE
25 FUND TALK: THE MANAGER'S OVERVIEW
27 INVESTMENT CHANGES
28 INVESTMENTS
35 FINANCIAL STATEMENTS
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
39 PERFORMANCE
41 FUND TALK: THE MANAGER'S OVERVIEW
43 INVESTMENT CHANGES
44 INVESTMENTS
50 FINANCIAL STATEMENTS
NOTES 54 NOTES TO THE FINANCIAL STATEMENTS
</TABLE>
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:
While low interest rates and subdued inflation provided support for
stock and bond markets in the U.S. during the first five months of
1998, concerns about continuing economic and political difficulties in
Asia colored their performance. The stock market reached record
heights due to stronger-than-expected corporate earnings, but
retreated at times when concerns surfaced about how the Asian
volatility would affect business prospects. The bond market benefited
from these retreats, as investors sought alternatives offering lower
volatility.
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.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. You should also keep money you'll need in the near future in a
more stable investment.
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 NEW JERSEY 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 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 MAY 31, 1998 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
SPARTAN NJ MUNICIPAL INCOME 3.40% 8.44% 33.40% 121.89%
LB NEW JERSEY MUNICIPAL BOND WITH 3.60% 9.04% N/A N/A
PORT AUTHORITY OF NEW YORK AND NEW JERSEY
NEW JERSEY MUNICIPAL DEBT FUNDS AVERAGE 3.44% 8.58% 32.31% 119.47%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, 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 New Jersey Municipal Bond Index with Port
Authority of New York and New Jersey - a total return performance
benchmark for New Jersey investment-grade municipal bonds, including
Port Authority of New York and New Jersey 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 New Jersey municipal debt
funds average, which reflects the performance of mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. The
past six months average represents a peer group of 59 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 MAY 31, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
SPARTAN NJ MUNICIPAL INCOME 8.44% 5.93% 8.30%
LB NEW JERSEY MUNICIPAL BOND WITH 9.04% N/A N/A
PORT AUTHORITY OF NEW YORK AND NEW JERSEY
NEW JERSEY MUNICIPAL DEBT FUNDS AVERAGE 8.58% 5.76% 8.18%
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
Spartan NJ Muni Income LB Municipal Bond
00416 LB015
1988/05/31 10000.00 10000.00
1988/06/30 10224.77 10146.30
1988/07/31 10289.56 10212.45
1988/08/31 10314.59 10221.44
1988/09/30 10554.94 10406.45
1988/10/31 10848.46 10589.60
1988/11/30 10685.06 10492.60
1988/12/31 10877.66 10599.94
1989/01/31 11045.84 10819.15
1989/02/28 10918.73 10695.70
1989/03/31 10929.01 10670.14
1989/04/30 11250.89 10923.45
1989/05/31 11488.15 11150.33
1989/06/30 11671.80 11301.75
1989/07/31 11800.59 11455.57
1989/08/31 11655.41 11343.42
1989/09/30 11610.83 11309.61
1989/10/31 11772.74 11447.93
1989/11/30 11948.36 11648.27
1989/12/31 12003.34 11743.55
1990/01/31 11884.09 11688.00
1990/02/28 12005.10 11792.03
1990/03/31 12026.00 11795.56
1990/04/30 11869.67 11710.16
1990/05/31 12179.21 11965.80
1990/06/30 12302.26 12070.98
1990/07/31 12494.95 12248.42
1990/08/31 12253.93 12070.57
1990/09/30 12332.86 12077.45
1990/10/31 12507.45 12296.54
1990/11/30 12803.19 12543.82
1990/12/31 12860.66 12598.39
1991/01/31 13016.53 12767.46
1991/02/28 13099.45 12878.53
1991/03/31 13133.04 12883.17
1991/04/30 13315.62 13054.52
1991/05/31 13424.75 13170.57
1991/06/30 13422.36 13157.53
1991/07/31 13643.97 13317.79
1991/08/31 13805.65 13493.19
1991/09/30 13980.62 13668.87
1991/10/31 14129.81 13791.89
1991/11/30 14164.57 13830.37
1991/12/31 14446.44 14127.17
1992/01/31 14470.69 14159.38
1992/02/29 14478.60 14163.91
1992/03/31 14451.35 14169.15
1992/04/30 14567.71 14295.25
1992/05/31 14779.31 14463.51
1992/06/30 15015.07 14706.21
1992/07/31 15550.59 15147.10
1992/08/31 15333.44 14999.41
1992/09/30 15396.54 15097.51
1992/10/31 15080.96 14949.10
1992/11/30 15485.72 15216.84
1992/12/31 15704.38 15372.20
1993/01/31 15895.96 15550.98
1993/02/28 16516.01 16113.46
1993/03/31 16308.83 15943.14
1993/04/30 16498.41 16104.01
1993/05/31 16632.91 16194.51
1993/06/30 16936.81 16464.80
1993/07/31 16940.29 16486.37
1993/08/31 17336.33 16829.62
1993/09/30 17543.38 17021.31
1993/10/31 17549.71 17054.16
1993/11/30 17362.73 16903.91
1993/12/31 17755.21 17260.75
1994/01/31 17941.70 17457.87
1994/02/28 17412.09 17005.71
1994/03/31 16616.15 16313.24
1994/04/30 16711.71 16451.57
1994/05/31 16901.84 16594.21
1994/06/30 16813.04 16492.82
1994/07/31 17128.57 16795.13
1994/08/31 17195.36 16853.24
1994/09/30 16932.18 16605.84
1994/10/31 16624.19 16310.92
1994/11/30 16346.08 16016.02
1994/12/31 16734.91 16368.53
1995/01/31 17236.77 16836.34
1995/02/28 17636.21 17325.94
1995/03/31 17851.14 17525.02
1995/04/30 17885.47 17545.70
1995/05/31 18312.08 18105.58
1995/06/30 18199.19 17948.06
1995/07/31 18267.25 18118.21
1995/08/31 18419.07 18347.95
1995/09/30 18583.63 18464.09
1995/10/31 18867.81 18732.56
1995/11/30 19133.94 19043.33
1995/12/31 19303.81 19226.34
1996/01/31 19407.08 19371.50
1996/02/29 19317.07 19240.74
1996/03/31 19079.25 18994.84
1996/04/30 19008.16 18941.09
1996/05/31 18990.65 18933.51
1996/06/30 19194.56 19139.70
1996/07/31 19349.52 19313.87
1996/08/31 19330.73 19309.23
1996/09/30 19571.29 19579.56
1996/10/31 19814.36 19801.01
1996/11/30 20162.06 20163.36
1996/12/31 20089.23 20078.68
1997/01/31 20140.55 20116.63
1997/02/28 20291.82 20301.30
1997/03/31 20052.01 20030.68
1997/04/30 20191.67 20198.34
1997/05/31 20462.16 20502.12
1997/06/30 20657.21 20720.47
1997/07/31 21187.98 21294.43
1997/08/31 20996.47 21094.90
1997/09/30 21230.19 21345.29
1997/10/31 21355.97 21482.54
1997/11/30 21460.49 21608.86
1997/12/31 21766.52 21924.13
1998/01/31 21970.78 22150.39
1998/02/28 21957.15 22157.04
1998/03/31 21971.76 22176.53
1998/04/30 21886.18 22076.52
1998/05/29 22184.07 22425.99
IMATRL PRASUN SHR__CHT 19980531 19980612 101920 R00000000000123
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Spartan New
Jersey Municipal Income Fund on May 31, 1988. As the chart shows, by
May 31, 1998, the value of your investment would have grown to $22,189
- - a 121.89% increase on your initial investment. For comparison, look
at how the Lehman Brothers Municipal Bond Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 would have grown to $22,426 a 124.26% 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
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SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31,
1998 1997 1996 1995 1994 1993
DIVIDEND RETURN 2.48% 5.19% 5.37% 6.40% 5.26% 5.99%
CAPITAL RETURN 0.92% 1.25% 0.00% 10.66% -11.12% 6.13%
TOTAL RETURN 3.40% 6.44% 5.37% 17.06% -5.86% 12.12%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital 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 paid
by the fund are reinvested, if any.
DIVIDENDS AND YIELD
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PERIODS ENDED MAY 31, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 4.67(CENTS) 27.71(CENTS) 55.55(CENTS)
ANNUALIZED DIVIDEND RATE 4.84% 4.86% 4.89%
30-DAY ANNUALIZED YIELD 4.27% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 7.13% - -
</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 month, $11.43 over the past six months and $11.37
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 40.08%
combined effective 1998 federal and state tax bracket, but does not
reflect payment of the alternative minimum tax, if applicable.
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Investor sentiment, shifting supply
and demand conditions, and
volatility in Asia played key roles
in the municipal bond market during
the six months that ended May 31,
1998. During this period, the
Lehman Brothers Municipal Bond
Index - a measure of the municipal
bond market - returned 3.78%.
To compare, the Lehman Brothers
Aggregate Bond Index - a
measure of the investment-grade
taxable bond market in the U.S. -
returned 4.09%. In late 1997,
volatility in Asia helped prop up the
muni bond market. Investors felt that
currency devaluations in that region
would translate into cheaper prices
for Asian goods and help control
the inflation that can eat into bonds'
fixed payments. Since the beginning
of 1998, though, muni bond supply
increased as many issuers took
advantage of lower interest rates
to refinance their debt at lower rates.
That, combined with softening
demand, dampened the
performance of muni bonds in
early 1998. On top of that, the
municipal bond market
experienced extremely heavy
issuance in March and April, as
issuers rushed to market before the
largest deal in municipal market
history took place in May - a
$3.5 billion issuance by Long Island
Power Authority. This heavy
supply, coupled with only
intermittent demand, put
downward pressure on municipal
bonds in April. Renewed fears of
economic and political dislocation in
Asia attracted investors to all
sectors of the bond market in May,
but, overall, municipals lagged
taxable issues through the first
five months of 1998.
An interview with Norm Lind, Portfolio Manager of Spartan New Jersey
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, NORM?
A. For the six-month period that ended May 31, 1998, the fund had a
total return of 3.40%. To get a sense of how the fund did relative to
its competitors, the New Jersey municipal debt funds average returned
3.44% for the same six-month period, according to Lipper Analytical
Services. Additionally, the Lehman Brothers New Jersey Municipal Bond
Index with Port Authority - which tracks the types of securities in
which the fund invests - returned 3.60% for the same six-month period.
For the 12-month period that ended May 31, 1998, the fund returned
8.44%. That compared to the 8.58% return of the New Jersey municipal
debt funds average and the 9.04% return of the Lehman Brothers New
Jersey Municipal Bond Index with Port Authority over the same one-year
period.
Q. WHAT SECURITIES CONTRIBUTED MOST TO THE FUND'S PERFORMANCE?
A. Bonds rated Baa - which made up 9.7% of the fund's investments at
the end of the period - were strong performers. Faced with falling
interest rates, yield-hungry investors increasingly sought out these
bonds because they offered a yield advantage over higher-quality
bonds. What's more, there was a very small supply of these bonds
during the period. Strong demand pushed up against low supply and
boosted the prices of most Baa-rated bonds. That said, the fund's
position in these bonds was relatively light compared to some of its
competitors, helping to explain why the fund slightly trailed the
average New Jersey municipal fund during the period.
Q. WHY WAS THE FUND'S STAKE IN BAA-RATED BONDS SO SMALL?
A. Baa-rated bonds generally offer the highest yields among municipal
bonds deemed "investment-grade," and the past six months were no
exception. What was different, however, was that the yield advantage
offered by Baa-rated bonds over the top-rated Aaa bonds was very
small. In my view, that slight amount of additional income wasn't
adequate enough to cover the extra risk that Baa-rated bonds carried.
As of the end of the period, the additional income an investor could
pick up by investing in lower-quality bonds was smaller than it has
been historically. My concern was that if the spread - the difference
in yield between Aaa-rated and Baa-rated bonds - were to grow as the
result of an economic downturn or other reason, the prices of
Baa-rated bonds would suffer losses that would more than overwhelm
their income advantage. In light of the very tight spread relationship
that existed between Baa-rated and higher-quality bonds, I didn't feel
comfortable exposing the fund to additional risk for such a small
amount of income.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Yes, bonds sensitive to being prepaid before maturity lagged the
overall municipal market. For example, housing bonds experienced
increased prepayment activity when interest rates fell as mortgage
borrowers refinanced their debt in order to lower their interest
costs. While prepayment is good for the borrower, it can be bad for
housing bond holders because it can force them to reinvest at lower
interest rates.
Q. HOW DID YOU ALLOCATE THE FUND'S INVESTMENTS ACROSS BONDS WITH
VARIOUS MATURITIES?
A. I kept the fund focused on bonds with maturities between five and
15 years. I did that because the yield curve - which is a graphical
representation of the yield of bonds by ascending maturity dates - was
relatively flat beyond 15 years. Up to about a 15-year maturity, an
investor was paid an appropriate amount of added income for each
additional year of maturity. It is this additional income that
compensates the investor for the added risk taken on by investing in
the longer-maturity part of the market. But for bonds with maturities
of 15 years or longer, the extra income for each successive year was,
in my opinion, less attractive given the level of risk inherent in
longer-term bonds.
Q. WHAT'S AHEAD FOR THE MUNICIPAL MARKET AND THE FUND?
A. The direction of interest rates will be the primary determinant of
municipal performance, and it's anybody's guess where they will be six
months or a year from now. Municipals may be in for a fairly strong
period as they play catch up to the U.S. Treasury market that has
outpaced the municipal market. So far this year, New Jersey's economy
and fiscal condition appear to be in pretty good shape from a number
of angles. As far as the fund is concerned, I'll continue to emphasize
bonds that I think offer good value given their yields and their risk.
For example, I'm comfortable sticking with a fairly large weighting in
high-quality bonds for the time being, because I feel that
lower-quality securities currently do not offer enough additional
yield given their risks.
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.
NORM LIND ON THE LEHMAN
BROTHERS NEW JERSEY
MUNICIPAL BOND INDEX WITH
PORT AUTHORITY AND ITS ROLE IN
MANAGING THE FUND:
"I use the Lehman Brothers New
Jersey Municipal Bond Index with
Port Authority as a representation
of the overall market in which the
fund invests. The index includes
most of the universe of New Jersey
municipal bonds. I manage the
fund to have similar overall
interest-rate risk to its benchmark
index, but beyond that, the fund
can vary significantly from the
index. With respect to sector, issuer
and structural composition, the
fund's holdings reflect my research
conclusions on the relative
value of bonds."
FUND FACTS
GOAL: to provide high current
income exempt from New
Jersey state and federal income
taxes by investing normally in
investment-grade municipal
securities
FUND NUMBER: 416
TRADING SYMBOL: FNJHX
START DATE: January 1, 1988
SIZE: as of May 31, 1998,
more than $375 million
MANAGER: Norm Lind, since
1997; manager, various Fidelity
and Spartan municipal income
funds; joined Fidelity in 1986
(checkmark)
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
GENERAL OBLIGATION 26.6 28.1
TRANSPORTATION 20.3 20.8
HEALTH CARE 10.2 9.6
WATER & SEWER 9.9 7.9
HOUSING 7.5 8.0
AVERAGE YEARS TO MATURITY AS OF MAY 31, 1998
6 MONTHS AGO
YEARS 12.7 12.7
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 MAY 31, 1998
6 MONTHS AGO
YEARS 6.3 6.5
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 MAY 31, 1998 AS OF NOVEMBER 30, 1997
AAA 43.0%
AA, A 41.4%
BAA 9.7%
BA, B 0.8%
NON-RATED 4.4%
SHORT-TERM
INVESTMENTS 0.7%
AAA 39.3%
AA, A 44.1%
BAA 9.9%
BA, B 0.9%
NON-RATED 4.4%
SHORT-TERM
INVESTMENTS 1.4%
ROW: 1, COL: 1, VALUE: 41.0
ROW: 1, COL: 2, VALUE: 41.4
ROW: 1, COL: 3, VALUE: 9.699999999999999
ROW: 1, COL: 4, VALUE: 1.8
ROW: 1, COL: 5, VALUE: 4.4
ROW: 1, COL: 6, VALUE: 1.7
ROW: 1, COL: 1, VALUE: 39.0
ROW: 1, COL: 2, VALUE: 43.3
ROW: 1, COL: 3, VALUE: 10.0
ROW: 1, COL: 4, VALUE: 1.7
ROW: 1, COL: 5, VALUE: 4.0
ROW: 1, COL: 6, VALUE: 2.0
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 NEW JERSEY MUNICIPAL INCOME FUND
INVESTMENTS MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL BONDS - 99.3%
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW JERSEY - 87.3%
Atlantic County Ctfs. of Prtn. Pub. Facs.
Lease Agreement Rfdg.:
7.40% 3/1/07 (FGIC Insured) Aaa $ 3,035,000 $ 3,658,929
7.40% 3/1/08 (FGIC Insured) Aaa 3,260,000 3,977,461
Atlantic County Impt. Auth. Luxury Tax Rev.
(Convention Ctr.):
7.375% 7/1/10 (MBIA Insured)
(Escrowed to Maturity) (d) Aaa 1,000,000 1,224,360
7.40% 7/1/16 (MBIA Insured)
(Escrowed to Maturity) (d) Aaa 3,510,000 4,475,741
Atlantic County Util. Auth. Swr. Rev. Rfdg.:
Series A, 5.85% 1/15/15
(AMBAC Insured) Aaa 2,620,000 2,798,763
5.25% 1/15/11 (AMBAC Insured) Aaa 4,145,000 4,324,893
Bergen County Util. Auth. Wtr Poll. Cont. Rev.
Rfdg. Series B:
5.60% 12/15/03 (FGIC Insured) Aaa 2,000,000 2,138,500
(Cap. Appreciation) 0% 12/15/07
(FGIC Insured) Aaa 7,500,000 4,893,000
Camden County Impt. Auth. Health Sys. Rev.
(Catholic Health East) Series B,
5% 11/15/28 (AMBAC Insured) Aaa 1,000,000 984,860
Camden County Muni. Util. Auth. Swr. Rev. Rfdg.:
6% 7/15/03 (FGIC Insured) Aaa 3,180,000 3,443,018
5.50% 7/15/05 (FGIC Insured) Aaa 1,110,000 1,188,766
6% 7/15/06 (FGIC Insured) Aaa 1,060,000 1,176,377
5.50% 7/15/08 (FGIC Insured) Aaa 1,300,000 1,407,419
Cape May County Ind. Poll. Cont. Fing. Auth.
Rev. Rfdg. (Atlantic City Elec. Co.) Series A,
6.80% 3/1/21 (MBIA Insured) Aaa 1,350,000 1,688,945
Edison Township School:
6.50% 6/1/02 A1 1,000,000 1,083,770
6.50% 6/1/11 A1 1,000,000 1,178,740
Essex County Gen. Oblig.:
Rfdg. Series A-1:
6% 11/15/05 (FGIC Insured) Aaa 3,000,000 3,298,260
6% 11/15/06 (FGIC Insured) Aaa 1,500,000 1,657,005
6% 11/15/07 (FGIC Insured) Aaa 1,500,000 1,667,280
Rfdg. Series A-2, 6.25% 9/1/10
(AMBAC Insured) Aaa 4,735,000 5,326,686
Series A:
5.75% 9/1/07 (AMBAC Insured) Aaa 1,385,000 1,510,716
5.75% 9/1/08 (AMBAC Insured) Aaa 1,465,000 1,609,508
5.75% 9/1/09 (AMBAC Insured) Aaa 1,550,000 1,704,489
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Essex County Impt. Auth. County Gen. Oblig.
Lease Rev. 7% 12/1/20 (AMBAC Insured)
(Pre-Refunded to 12/1/00 @ 102) (d) Aaa $ 1,000,000 $ 1,089,910
Essex County Impt. Auth. Util. Sys. Rev. (Orange
Franchise) Series A, 5.75% 7/1/27
(MBIA Insured) Aaa 550,000 577,627
Essex County Util. Auth. Solid Waste Rev.
Series A:
5.75% 4/1/05 (FSA Insured) Aaa 1,000,000 1,083,070
6% 4/1/06 (FSA Insured) Aaa 1,000,000 1,106,450
Jersey City Muni. Util. Auth. Wtr. Rev.
5.25% 4/1/05 (FSA Insured) Aaa 3,720,000 3,920,024
Jersey City Swr. Auth. Swr. Rev. Rfdg.:
6% 1/1/07 (AMBAC Insured) Aaa 2,175,000 2,416,947
6% 1/1/09 (AMBAC Insured) Aaa 1,000,000 1,122,950
Lenape Reg. High School Dist. Unltd. Tax:
7.625% 1/1/13 (MBIA Insured) Aaa 675,000 874,078
7.625% 1/1/14 (MBIA Insured) Aaa 1,000,000 1,307,420
Middlesex County Gen. Oblig. 4.75% 8/1/02 Aaa 2,665,000 2,732,291
Middlesex County Poll. Cont. Fing. Auth. Rev. Rfdg.
(Amerada Hess Corp.):
7.875% 6/1/22 - 7,750,000 9,058,200
6.875% 12/1/22 - 5,000,000 5,411,250
Middletown Township Board of Ed.
5.70% 8/1/10 (MBIA Insured) Aaa 1,500,000 1,614,420
Monmouth County Impt. Auth. Wastewtr.
Treatment Facs. Rev. (Asbury Park Proj.)
7.375% 12/1/09
(Pre-Refunded to 12/1/99 @ 102) (d) BBB 1,000,000 1,068,540
Morris County Gen. Oblig. 6.50% 8/1/03 Aaa 2,180,000 2,423,615
New Jersey Bldg. Auth. Bldg. Rev. Rfdg.:
5.75% 6/15/09 Aa2 3,000,000 3,300,360
5% 6/15/14 Aa2 4,000,000 4,018,480
New Jersey Econ. Dev. Auth. Econ. Dev. Rev.
(Weyerhauser Co. Proj.) 9% 11/1/04 A2 2,000,000 2,498,840
New Jersey Econ. Dev. Auth. Rev.
(Edl. Testing Svc.):
Series A, 6.50% 5/15/05 (MBIA Insured) (f) Aaa 2,500,000 2,756,925
Series B, 6.125% 5/15/15 (MBIA Insured) Aaa 2,000,000 2,194,960
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Mkt. Transition Facs.
Rev. (Senior Lien) Series A:
5.25% 7/1/01 (MBIA Insured) Aaa $ 1,000,000 $ 1,034,070
5.80% 7/1/07 (MBIA Insured) Aaa 2,300,000 2,494,695
5.80% 7/1/09 (MBIA Insured) Aaa 5,000,000 5,437,250
5.875% 7/1/11 (MBIA Insured) Aaa 4,090,000 4,452,415
New Jersey Econ. Dev. Auth. Wtr. Facs. Rev.
(American Wtr. Co., Inc. Proj.) 5.95% 11/1/29
(FGIC Insured) (c) Aaa 7,700,000 8,121,267
New Jersey Edl. Facs. Auth. Rev.:
(Princeton Theological Seminary) Series B:
5.875% 7/1/22 Aaa 3,280,000 3,468,633
5.90% 7/1/26 Aaa 2,000,000 2,118,280
(St. Peters College) Series B:
5.375% 7/1/12 Baa3 1,450,000 1,464,181
5.375% 7/1/18 Baa3 1,000,000 996,870
(Seton Hall Univ.) 5.25% 7/1/09
(AMBAC Insured) (e)(f) Aaa 2,000,000 2,267,320
New Jersey Gen. Oblig.:
5.90% 8/1/02 Aa1 1,500,000 1,606,875
6% 7/15/03 Aa1 5,000,000 5,425,550
6.50% 7/15/04 Aa1 9,035,000 10,144,227
Rfdg. Series D:
5.75% 2/15/06 Aa1 1,950,000 2,132,423
6% 2/15/13 Aa1 7,500,000 8,499,375
Rfdg. Series E, 6% 7/15/10 Aa1 2,000,000 2,261,220
New Jersey Health Care Facs. Fing. Auth. Rev.:
Rfdg.:
(AHS Hosp. Corp.) Series A, 6% 7/1/11
(AMBAC Insured) Aaa 3,500,000 3,914,365
(Atlantic City Med. Ctr.) Series C,
6.80% 7/1/11 A3 4,200,000 4,596,102
(Burdett Tomlin Mem. Hosp.) Series D,
6.25% 7/1/06 (FGIC Insured) Aaa 1,710,000 1,837,156
(Commty. Med. Ctr./Kensington Manor
Care Ctr./Kimball Med. Ctr.)
5.25% 7/1/11 (FSA Insured) Aaa 3,835,000 4,007,192
(Kennedy Health Sys.) Series B:
5.75% 7/1/07 (MBIA Insured) Aaa 1,150,000 1,258,261
5.75% 7/1/08 (MBIA Insured) Aaa 750,000 823,680
5% 7/1/09 (MBIA Insured) Aaa 1,000,000 1,036,640
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Health Care Facs. Fing. Auth. Rev.: - continued
Rfdg.: - continued
(Newcomb Med. Ctr.) Series A,
7.875% 7/1/03 Ba3 $ 2,960,000 $ 3,142,247
(East Orange Gen. Hosp.) Series B,
7.75% 7/1/20 BBB+ 2,450,000 2,614,420
(Elizabeth Gen. Med. Ctr.) Series C:
7.10% 7/1/99 Baa1 1,125,000 1,158,851
7.25% 7/1/06 Baa1 1,975,000 2,105,686
(Holy Name Hosp.) Series A,
6.875% 7/1/04 (AMBAC Insured)
(Pre-Refunded to 7/1/98 @ 102) (d) Aaa 1,370,000 1,400,291
(Kennedy Mem. Hosp./Univ. Med. Ctr.):
Series D, 7.875% 7/1/09
(Pre-Refunded to 7/1/98 @ 102) (d) A1 3,000,000 3,069,450
Series E, 6% 7/1/20
(Pre-Refunded to 7/1/01 @ 102) (d) A1 1,600,000 1,717,648
(Muhlenberg Reg. Med. Ctr.) Series B,
8% 7/1/18 (AMBAC Insured) Aaa 2,000,000 2,046,280
(Pascack Valley Hosp.) 6.70% 7/1/11 BBB 5,200,000 5,424,276
New Jersey Hwy. Auth. Garden State Parkway
Gen. Rev. (Senior Parkway):
6% 1/1/05 A1 2,200,000 2,356,706
6.10% 1/1/06 A1 1,750,000 1,877,365
6.20% 1/1/10 A1 7,000,000 7,994,350
6% 1/1/19 (Escrowed to Maturity) (d) Aaa 4,485,000 5,095,274
New Jersey Hsg. Fin. Agcy. (Gen. Resolution)
Series A:
6.90% 11/1/07 AA+ 2,670,000 2,871,371
6.95% 11/1/08 AA+ 2,265,000 2,431,931
7% 11/1/09 AA+ 2,855,000 3,065,185
7.05% 11/1/10 AA+ 3,500,000 3,757,390
New Jersey Hsg. & Mtg. Fin. Agcy. Rev.:
Rfdg. Series 1:
6% 11/1/02 A+ 3,210,000 3,388,572
6.20% 11/1/04 A+ 3,100,000 3,337,522
6.45% 11/1/07 A+ 5,090,000 5,466,660
(Home Buyer) Series B, 7.90% 10/1/22
(MBIA Insured) (c) Aaa 1,115,000 1,168,665
New Jersey Trans. Corp. Series A,
5.40% 9/1/02 (FSA Insured) Aaa 1,100,000 1,144,825
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Trans. Trust Fund Auth. (Trans. Sys.)
Series B:
5% 6/15/01 Aa3 $ 1,000,000 $ 1,027,700
6% 6/15/06 Aa3 16,450,000 18,288,123
5.25% 6/15/10 Aa3 5,000,000 5,267,950
Rfdg. 6.50% 6/15/10 (MBIA Insured) Aaa 3,000,000 3,530,610
New Jersey Tpk. Auth. Tpk. Rev.:
Rfdg.:
10.375% 1/1/03 (Escrowed to Maturity) (d) Aaa 6,950,000 8,057,761
Series A:
6.30% 1/1/01 Baa1 1,000,000 1,049,260
6.40% 1/1/02 Baa1 1,000,000 1,067,880
6.75% 1/1/08 Baa1 1,000,000 1,063,390
Series C:
6.50% 1/1/09 Baa1 1,300,000 1,461,551
6.50% 1/1/16 Baa1 615,000 707,902
Series A:
5.40% 1/1/99 Baa1 1,900,000 1,914,972
5.60% 1/1/00 Baa1 1,585,000 1,619,933
5.90% 1/1/03 Baa1 9,000,000 9,519,660
New Jersey Wastewtr. Treatment Trust Loan Rev.:
Series A, 6% 7/1/10 Aa1 1,000,000 1,058,280
6.875% 6/15/06 Aa2 105,000 112,055
6.875% 6/15/09 Aa2 80,000 85,744
7% 6/15/10 Aa2 140,000 150,419
Newark School Qualified Bond Act
5.30% 9/1/16 (MBIA Insured) Aaa 3,500,000 3,593,170
North Brunswick Township Gen. Oblig. Rfdg.:
5.25% 5/15/10 (FGIC Insured) Aaa 1,235,000 1,297,207
5.25% 5/15/11 (FGIC Insured) Aaa 1,290,000 1,350,140
Passaic County Util. Auth. Rev.
(Solid Waste Sys.Proj.):
0% 3/1/99 (MBIA Insured) Aaa 3,725,000 3,623,904
Rfdg. (Cap. Appreciation) 0% 3/1/99
(MBIA Insured) Aaa 1,775,000 1,726,827
Rutgers Univ. Rfdg. (State Univ. of New Jersey)
Series A, 6.40% 5/1/13 A1 3,000,000 3,485,610
324,086,903
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW YORK & NEW JERSEY - 9.1%
New York & New Jersey Port Auth.:
Consolidated 77th Series,
6.25% 1/15/27 (c) A1 $ 5,000,000 $ 5,296,950
Consolidated 92nd Series, 4.75% 1/15/29 A1 7,000,000 6,531,140
Consolidated 109th Series, 5.375% 1/15/32 A1 11,500,000 11,694,465
Rfdg.:
Consolidated 94th Series, 5.70% 12/1/10 A1 6,385,000 6,777,997
Consolidated 107th Series:
6% 10/15/05 (c) A1 1,740,000 1,896,409
6% 10/15/06 (c) A1 1,535,000 1,683,066
33,880,027
PUERTO RICO - 2.9%
Puerto Rico Commonwealth Gen. Oblig. Rfdg.
Series A, 6% 7/1/14 Baa1 2,000,000 2,126,120
Puerto Rico Commonwealth Infrastructure Fing.
Auth. Series A:
7.75% 7/1/08
(Pre-Refunded to 7/1/98 @ 102) (d) - 1,745,000 1,785,362
7.75% 7/1/08 Baa1 510,000 521,628
Puerto Rico Elec. Pwr. Auth. Rev. Series DD,
5% 7/1/12 (FSA Insured) Aaa 4,000,000 4,082,240
Puerto Rico Hsg. Fin. Corp. Rev. (Multi-Family
Mtg. Portfolio A) Series I, 7.50% 4/1/22,
LOC Puerto Rico Gov't. Dev. Bank AA 2,290,000 2,401,638
10,916,988
TOTAL MUNICIPAL BONDS
(Cost $348,124,651) 368,883,918
MUNICIPAL NOTES (A) - 0.7%
NEW JERSEY - 0.4%
New Jersey Econ. Dev. Auth. Natural Gas Facs.
Rev. (NUI Corp. Proj.) Series A, 3.90%
(BPA Bank of New York, NA)
(AMBAC Insured) VRDN (c) VMIG 1 1,000,000 1,000,000
New Jersey Econ. Dev. Auth. Wtr. Facs. Rev. Rfdg.
(United Wtr. New Jersey, Inc. Proj.) Series 96-C,
3.95% (AMBAC Insured)
(BPA Bank of New York, NA) VRDN (c) VMIG 1 600,000 600,000
1,600,000
MUNICIPAL NOTES (A) - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW YORK & NEW JERSEY - 0.3%
New York & New Jersey Port Auth. Spl. Oblig.
Rev. (Versatile Structure Oblig.) VRDN:
Series 2, 3.85% (BPA Morgan Guaranty
Trust Co., NY) VMIG 1 $ 300,000 $ 300,000
Series 3, 4% (BPA Morgan Guaranty
Trust Co., NY) VMIG 1 600,000 600,000
900,000
TOTAL MUNICIPAL NOTES
(Cost $2,500,000) 2,500,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $350,624,651) $ 371,383,918
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(c) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(d) Security collateralized by an amount sufficient to pay interest
and principal.
(e) Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
(f) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
New Jersey Econ. Dev.
Auth. Rev. (Edl.
Testing Svc.) Series A,
6.50% 5/15/05
(MBIA Insured) 5/31/95 $ 2,699,550
New Jersey Edl.
Facs. Auth. Rev.
(Seton Hall Univ.)
5.25% 7/1/09
(AMBAC Insured) 5/29/98 $ 2,267,320
OTHER INFORMATION
The fund invested in securities that are not registered under the
Securities Act of 1933. These securities are subject to legal or
contractual restrictions on resale. At the end of the period,
restricted securities (excluding 144A issues) amounted to $5,024,245
or 1.3% of net assets (see Note 2 of Notes to Financial Statements).
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 75.1% AAA, AA, A 80.3%
Baa 7.2% BBB 9.1%
Ba 0.8% BB 0.0%
B 0.0% B 0.8%
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 4.4%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investment in securities, is as follows:
General Obligation 26.6%
Transportation 20.3
Health Care 10.2
Water & Sewer 9.9
Housing 7.5
Escrowed/Pre-Refunded 7.0
Others (individually less than 5%) 18.5
TOTAL 100.0%
INCOME TAX INFORMATION
At May 31, 1998, the aggregate cost of investment securities for
income tax purposes was $350,624,651. Net unrealized appreciation
aggregated $20,759,267, of which $20,810,368 related to appreciated
investment securities and $51,101 related to depreciated investment
securities.
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $350,624,651) - $ 371,383,918
SEE ACCOMPANYING SCHEDULE
CASH 154,298
RECEIVABLE FOR FUND SHARES SOLD 34,801
INTEREST RECEIVABLE 6,897,269
TOTAL ASSETS 378,470,286
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED ON A $ 2,267,320
DELAYED DELIVERY BASIS
PAYABLE FOR FUND SHARES REDEEMED 370,156
DISTRIBUTIONS PAYABLE 346,987
ACCRUED MANAGEMENT FEE 173,683
OTHER PAYABLES AND ACCRUED EXPENSES 5,038
TOTAL LIABILITIES 3,163,184
NET ASSETS $ 375,307,102
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 353,307,809
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) 1,240,026
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 20,759,267
NET ASSETS, FOR 32,842,347 SHARES OUTSTANDING $ 375,307,102
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $11.43
SHARE ($375,307,102 (DIVIDED BY) 32,842,347 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INTEREST INCOME $ 9,943,633
EXPENSES
MANAGEMENT FEE $ 1,011,306
NON-INTERESTED TRUSTEES' COMPENSATION 154
TOTAL EXPENSES BEFORE REDUCTIONS 1,011,460
EXPENSE REDUCTIONS (12,567) 998,893
NET INTEREST INCOME 8,944,740
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 1,465,717
FUTURES CONTRACTS 91,468 1,557,185
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 1,664,199
FUTURES CONTRACTS (24,753) 1,639,446
NET GAIN (LOSS) 3,196,631
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 12,141,371
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTIONS $ 11,531
CUSTODIAN CREDITS
TRANSFER AGENT CREDITS 1,036
$ 12,567
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 8,944,740 $ 17,711,284
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 1,557,185 2,069,166
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 1,639,446 2,333,618
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,141,371 22,114,068
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (8,944,740) (17,711,284)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN (1,741,864) (4,370,732)
TOTAL DISTRIBUTIONS (10,686,604) (22,082,016)
SHARE TRANSACTIONS 30,454,185 38,337,168
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 8,297,053 17,295,119
COST OF SHARES REDEEMED (26,500,395) (51,444,752)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,250,843 4,187,535
FROM SHARE TRANSACTIONS
REDEMPTION FEES 8,423 6,979
TOTAL INCREASE (DECREASE) IN NET ASSETS 13,714,033 4,226,566
NET ASSETS
BEGINNING OF PERIOD 361,593,069 357,366,503
END OF PERIOD $ 375,307,102 $ 361,593,069
OTHER INFORMATION
SHARES
SOLD 2,663,897 3,422,621
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 726,084 1,543,723
REDEEMED (2,318,139) (4,589,671)
NET INCREASE (DECREASE) 1,071,842 376,673
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED NOVEMBER 30,
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 E 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 11.380 $ 11.380 $ 11.420 $ 10.320 $ 11.760 $ 11.240
BEGINNING OF PERIOD
INCOME FROM INVESTMENT .277 .561 .588 .623 .637 .640
OPERATIONS
NET INTEREST INCOME
NET REALIZED AND .105 .140 - 1.099 (1.291) .678
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT .382 .701 .588 1.722 (.654) 1.318
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INTEREST (.277) (.561) (.588) (.623) (.637) (.640)
INCOME
FROM NET REALIZED GAIN (.055) (.140) (.040) - (.150) (.160)
TOTAL DISTRIBUTIONS (.332) (.701) (.628) (.623) (.787) (.800)
REDEMPTION FEES ADDED - - - .001 .001 .002
TO PAID IN CAPITAL
NET ASSET VALUE, $ 11.430 $ 11.380 $ 11.380 $ 11.420 $ 10.320 $ 11.760
END OF PERIOD
TOTAL RETURN B, C 3.40% 6.44% 5.37% 17.06% (5.86)% 12.12%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 375,307 $ 361,593 $ 357,367 $ 366,569 $ 327,060 $ 422,519
(000 OMITTED)
RATIO OF EXPENSES TO .55% A .55% .55% .55% .55% .55%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .54% A, D .55% .52% D .55% .55% .55%
AVERAGE NET ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INTEREST 4.86% A 5.00% 5.26% 5.64% 5.70% 5.52%
INCOME TO AVERAGE
NET ASSETS
PORTFOLIO TURNOVER RATE 26% A 16% 57% 36% 8% 25%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE FORMER
ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
D 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).
E 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 NEW JERSEY 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 one year, past five year, and life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
SPARTAN NJ MUNICIPAL MONEY MARKET 1.56% 3.19% 16.21% 31.15%
NEW JERSEY TAX-FREE 1.44% 3.17% 14.72% 29.40%
MONEY MARKET FUNDS AVERAGE
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on May 1, 1990. 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 New Jersey tax-free money market funds average which reflects the
performance of New Jersey tax-free money market funds with similar
objectives tracked by IBC Financial Data, Inc. The past six months
average represents a peer group of 18 money market 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 MAY 31, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN NJ MUNICIPAL MONEY MARKET 3.19% 3.05% 3.41%
NEW JERSEY TAX-FREE 3.17% 2.77% 3.24%
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
6/1/98 3/2/98 12/1/97 9/1/97 6/2/97
SPARTAN NEW JERSEY 3.27% 2.99% 3.34% 2.91% 3.42%
MUNICIPAL MONEY MARKET
IF FIDELITY HAD NOT 3.27% 2.99% 3.34% 2.91% 3.28%
REIMBURSED CERTAIN FUND
EXPENSES
NEW JERSEY 2.99% 2.66% 3.06% 2.65% 2.93%
TAX-FREE MONEY MARKET
FUNDS AVERAGE
SPARTAN NEW JERSEY 5.46% 4.99% 5.57% 4.86% 5.71%
MUNICIPAL MONEY MARKET -
TAX-EQUIVALENT
IF FIDELITY HAD NOT 5.46% 4.99% 5.57% 4.86% 5.47%
REIMBURSED CERTAIN FUND
EXPENSES
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. If the adviser had not reimbursed
certain fund expenses during the periods shown, the yields would have
been lower. You can compare these yields to the New Jersey 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 1998 federal and state income tax rate of 40.08%. A
portion of the fund's income may be subject to the federal alternative
minimum tax.
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 NEW JERSEY MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio Manager of Spartan New Jersey
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX
MONTHS?
A. Investors spent much of the period trying to determine when the
Federal Reserve Board might raise the fed funds rate - the rate banks
charge each other for overnight loans - as a way to slow the economy
and thus head off inflation. The economy continued to chug along at a
fairly strong pace and unemployment numbers were incredibly low -
coming in at 4.3% in April. But despite this period of continuing
expansion, wage pressures did not arise and inflation remained benign.
Under normal circumstances, the possibility of future inflation
created by these low unemployment numbers likely would have led the
Fed to raise rates. But the economic and political turmoil in Asia
kept the Fed on the sidelines during the period.
Q. WHY WAS THE ASIAN TURMOIL ABLE TO OFFSET U.S. ECONOMIC STRENGTH IN
THE FED'S DECISION ON MONETARY POLICY?
A. For two reasons. The Fed didn't want to make the situation in Asia
worse by raising short-term interest rates here, especially
considering the financial and political unrest in countries such as
Indonesia at the end of the period. An increase in short-term rates in
the U.S. would have likely strengthened the U.S. dollar even more
versus Asian currencies, which could have further hurt their markets.
In other words, the Fed was asking itself, "Why make the Asian markets
more volatile by raising rates in the U.S.?" The other factor was the
possibility that the Asian turmoil would have translated into a
reduction of U.S. net exports, which would likely have had a dampening
effect of its own on the U.S. economy and inflation.
Q. WHAT WAS THE FUND'S STRATEGY DURING THIS PERIOD?
A. For most of the period, I extended the fund's average maturity by
purchasing one-year fixed-rate notes. The prevalent supply of one-year
issues made them attractive. In addition, as is often the case,
fixed-rate instruments in the New Jersey market offered a yield
advantage over short-term variable-rate notes because of the strong
demand for the latter. Therefore, whenever I felt that concerns about
an interest-rate increase were built into the market, I bought
fixed-rate notes to lock in higher yields that would last throughout
the period. As a result, I extended the fund's average maturity from
the low-50-day range at the beginning of the period to the mid-60-day
range at the end of the period.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1998, was 3.27%, compared to
3.35% six months ago. The more recent seven-day yield was the
equivalent of a 5.46% taxable rate of return for New Jersey investors
in the 40.08% combined state and federal income tax bracket. Through
May 31, 1998, the fund's six-month total return was 1.56%, compared to
1.44% for the New Jersey tax-free money market funds average,
according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. There's one important wildcard: what happens in Asia. If we
continue to see the same level of turmoil there, I believe the Fed may
be obligated to stay on the sidelines. There's a lot of risk that a
rate increase in the U.S. could cause increased volatility in global
markets. Without a rate increase, the U.S. economy still might slow as
a result of fewer U.S. exports. In this case, the Asian situation
would do the Fed's job for them. The strength of the U.S. economy, in
light of the Asian situation, has left the Fed at an impasse. And,
although I believe the next Fed move will be to raise rates, I don't
believe it will be any time soon. The only factor that could change
the Fed's stance in the next few months would be real signs of
inflation - wage pressures as reflected in the employment cost index
or higher-than-expected increases in the consumer price index or the
producer price index. At that point, the Fed may risk causing more
problems in Asia to keep the U.S. economy on good footing.
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 WHILE MAINTAINING
SHARE PRICE STABILITY BY
INVESTING IN HIGH-QUALITY
SHORT-TERM NEW JERSEY
MUNICIPAL MONEY MARKET
SECURITIES
FUND NUMBER: 423
TRADING SYMBOL: FSJXX
START DATE: MAY 1, 1990
SIZE: AS OF MAY 31, 1998,
MORE THAN $513 MILLION
MANAGER: SCOTT ORR, SINCE 1997;
MANAGER, VARIOUS FIDELITY AND
SPARTAN MUNICIPAL MONEY MARKET
FUNDS; JOINED FIDELITY IN 1989
(CHECKMARK)
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
5/31/98 11/30/97 10/31/97
0 - 30 71 69 66
31 - 90 6 12 9
91 - 180 6 9 13
181 - 397 17 10 12
WEIGHTED AVERAGE MATURITY
5/31/98 11/30/97 10/31/97
SPARTAN NEW JERSEY MUNICIPAL 63 DAYS 52 DAYS 58 DAYS
MONEY MARKET FUND
NEW JERSEY TAX-FREE 50 DAYS 51 DAYS 54 DAYS
MONEY MARKET FUNDS AVERAGE*
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1998 AS OF NOVEMBER 30, 1997
ROW: 1, COL: 1, VALUE: 58.0
ROW: 1, COL: 2, VALUE: 14.0
ROW: 1, COL: 3, VALUE: 26.0
ROW: 1, COL: 4, VALUE: 2.0
VARIABLE RATE DEMAND
NOTES (VRDNS) 60%
COMMERCIAL PAPER
(INCLUDING CP MODE) 14%
MUNICIPAL
NOTES 25%
OTHER 1%
VARIABLE RATE DEMAND
NOTES (VRDNS) 59%
COMMERCIAL PAPER
(INCLUDING CP MODE) 14%
MUNICIPAL
NOTES 26%
OTHER 1%
ROW: 1, COL: 1, VALUE: 59.0
ROW: 1, COL: 2, VALUE: 14.0
ROW: 1, COL: 3, VALUE: 25.0
ROW: 1, COL: 4, VALUE: 2.0
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - 77.8%
Bernardsville Gen. Oblig. BAN 3.75% 4/15/99 $ 3,457,700 $ 3,462,369
Bloomfield Township Gen. Oblig. BAN 3.80% 6/1/99 4,200,000
4,200,798
Burlington County Gen. Oblig. BAN 3.75% 4/22/99 2,500,000 2,502,143
Camden County Impt. Auth. Rev., VRDN:
(Jewish Commty. Ctr. Proj.) Series 1995, 4%,
LOC Nat'l. Westminster Bank PLC 1,100,000 1,100,000
(Parkview Redev. Hsg. Proj.) 3.90%,
LOC General Electric Cap. Corp. (b) 6,800,000 6,800,000
Chatham Township Gen. Oblig. BAN 3.75% 2/18/99 3,550,000 3,553,908
Cranford Township Gen. Oblig. BAN 3.76% 3/19/99 2,912,007 2,916,477
Delaware River Port Auth. Participating VRDN, Series SG-53,
4.02% (Liquidity Facility Societe Generale, France) (c) 9,640,000
9,640,000
East Brunswick Township Gen. Oblig. BAN 3.75% 4/13/99 8,152,000
8,163,314
East Windsor Reg. School Dist. BAN 4.25% 8/26/98 2,700,000
2,702,449
Fairfield Township Gen. Oblig. BAN 3.75% 8/6/98 2,700,000 2,701,188
Hudson County Impt. Auth. Rev. (Essential Purp. Pooled
Gov't. Loan Prog.) Series 1986, 3.85%,
LOC Comerica Bank, Detroit, VRDN 24,960,000 24,960,000
Jefferson Township Gen. Oblig.
BAN Series 1998 A, 4% 2/19/99 3,663,650 3,674,341
Middlesex County Gen. Oblig.:
BAN 4% 1/26/99 19,027,000 19,087,176
Rfdg. Participating VRDN, Series BT-291, 3.70%
(Liquidity Facility Bankers Trust Co., NY) (c) 4,995,000 4,995,000
Montclair Township Gen. Oblig. BAN 4% 1/22/99 3,981,000 3,991,381
Montville Township Gen. Oblig. BAN 4.25% 8/28/98 5,100,000
5,105,324
Morristown Gen. Oblig. BAN 4% 5/4/99 6,350,000 6,361,288
New Jersey Econ. Dev. Auth. Bonds
(Chambers Cogeneration Proj.) Series 1991, 3.75%
7/7/98, LOC Credit Locale de France, CP mode (b) 8,300,000
8,300,000
New Jersey Econ. Dev. Auth. Dock Facs. Rev. Rfdg.
(Bayonne/IMTT-Bayonne Proj.) Series1993-C, 3.90%,
LOC First Nat'l. Bank of Chicago, VRDN 1,950,000 1,950,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Econ. Dev. Rev., VRDN:
Series 1989-B, 4%, LOC PNC Bank NA (b) $ 200,000 $ 200,000
(80 Carter Drive Assoc. Proj.) Series 1984, 3.95%,
LOC Marine Midland Bank 240,000 240,000
(500 International Drive Partners Proj.) Series 1995,
3.70%, LOC First Union Nat'l. Bank 3,000,000 3,000,000
(Arden Group) Series 1989 BB, 3.70%,
LOC PNC Bank NA (b) 1,400,000 1,400,000
(Block Drugs Corp.) Series 1989 A, 3.90%,
LOC SunTrust Bank, Atlanta 715,000 715,000
(Casa DiBertacchi Corp.) Series 1988, 3.95%,
LOC Marine Midland Bank (b) 400,000 400,000
(Ctr. For Aging Applewood Proj.) 3.80%,
LOC Summit Bank, Fleet Bank NA 2,275,000 2,275,000
(Dial Realty) Series 1988 L, 3.70%, LOC PNC Bank NA (b) 2,000,000
2,000,000
(E.P. Henry Corp. Proj.) 3.70%, LOC New Jersey
Nat'l. Bank (b) 870,000 870,000
(Ellison School, Inc.) Series 1989 KK, 3.70%,
LOC PNC Bank NA 550,000 550,000
(Guttenplan's Bakery) Series 1989 G, 3.70%,
LOC PNC Bank NA (b) 2,050,000 2,050,000
(Herzel Mor Corp.) Series 1989 L, 3.70%,
LOC PNC Bank NA (b) 450,000 450,000
(Headquarters Proj.)
Series 1997, 3.85%, LOC PNC Bank NA 2,700,000 2,700,000
(Peddie School Proj.) 3.75% (BPA PNC Bank NA) 500,000 500,000
(Pictorial Offset Corp.) Series 1989 H, 3.70%,
LOC PNC Bank NA (b) 800,000 800,000
(PVC Container Corp.) Series 1987 D, 4.10%,
LOC Nat'l. Westminster Bank PLC (b) 2,015,000 2,015,000
(Recycle, Inc. Proj.) Series 1995, 4.10%,
LOC Fleet Bank NA (b) 4,900,000 4,900,000
Rfdg. (New Jersey Natural Gas Co. Proj.)
Series 1997 A, 3.75% (AMBAC Insured)
(BPA Bank of New York, NA) (b) 6,000,000 6,000,000
Rfdg. (RJB Associates 1983 Proj.) 3.85%,
LOC PNC Bank NA 400,000 400,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Econ. Dev. Rev., VRDN: - continued
Rfdg. (Stolthaven Perth Amboy Proj.) Series 1998 A,
3.80%, LOC Citibank, NA $ 4,450,000 $ 4,450,000
New Jersey Econ. Dev. Auth. Econ. Growth Rev., VRDN:
(Eastern Silk) Second Series D2, 3.75%,
LOC Banque Nat'l. de Paris (b) 1,250,000 1,250,000
(Richard L. Tauber Issue) Series 93 B-1, 3.60%,
LOC Fleet Bank NA (b) 2,490,000 2,490,000
New Jersey Econ. Dev. Auth. Gas Facs. Rev.
(NUI Corp. Proj.) Series 1996 A, 3.90% (AMBAC Insured)
(BPA Bank of New York, NA) VRDN (b) 3,900,000 3,900,000
New Jersey Econ. Dev. Auth. Health Care Rev.
(Bayshore Health Ctr.) Series 1998 A, 3.90%,
LOC Kredietbank NV, VRDN 4,655,000 4,655,000
New Jersey Econ. Dev. Auth. Ind. Dev. Rev.
(Nat'l. Refrigerant) Series 1994 A, 3.85%,
LOC CoreStates Bank, VRDN (b) 905,000 905,000
New Jersey Econ. Dev. Auth. Wtr. Facs.:
Rev. Rfdg. (United Water New Jersey, Inc.)
Series 96-C, 3.95% (AMBAC Insured)
(BPA Bank of New York, NA) VRDN (b) 1,600,000 1,600,000
Participating VRDN (c):
Series 1997 B, 4% (Liquidity Facility Bank of
New York, NA) (b) 8,415,000 8,415,000
Series 1998, 4% (Liquidity Facility Bank of
New York, NA) (b) 1,500,000 1,500,000
New Jersey Edl. Facs. Auth. Participating VRDN,
Series SG-48, 3.92% (Liquidity Facility Societe
Generale, France) (c) 2,950,000 2,950,000
New Jersey Gen. Oblig. Series 1998 A, CP:
3.65% 6/2/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 7,800,000 7,800,000
3.70% 6/2/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 1,800,000 1,800,000
3.70% 6/2/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 5,500,000 5,500,000
3.70% 6/8/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 5,000,000 5,000,000
3.85% 6/9/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 3,000,000 3,000,000
3.90% 6/10/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 7,000,000 7,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Gen. Oblig. Series 1998 A, CP: - continued
4% 6/11/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) $ 5,300,000 $ 5,300,000
4% 6/12/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 5,300,000 5,300,000
3.70% 6/15/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 6,100,000 6,100,000
3.90% 6/15/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 5,400,000 5,400,000
New Jersey Gen. Oblig. Participating VRDN (c):
Series PA-335, 3.92% (Liquidity Facility Merrill
Lynch & Co., Inc.) 2,120,000 2,120,000
Series 1998, 3.95% (Liquidity Facility Bayerische
Hypotheken-und Wechsel Bank) 6,300,000 6,300,000
New Jersey Health Care Facs. Fin. Auth. Rev.
(Hosp. Cap. Asset Fing. Prog.) Series 1985 B, 3.70%,
LOC Chase Manhattan Bank, VRDN 1,500,000 1,500,000
New Jersey Higher Ed. Assistance Auth. Student Loan
Rev. Bonds (New Jersey Class Loan Prog.) Series 1997 B,
3.90%, tender 6/1/98 (MBIA Insured)
(BPA Landesbank Hessen-Thuringen) (b) 6,000,000 6,000,000
New Jersey Hsg. & Mtg. Fin. Agcy. Participating VRDN (c):
Series 1994 C-3003, 4.12% (Liquidity Facility Citibank NA) 6,200,000
6,200,000
Series 1994 C-3004, 3.97% (Liquidity Facility Citibank NA)
3,500,000 3,500,000
Series 1994 C-3005, 3.97% (Liquidity Facility Citibank NA)
3,900,000 3,900,000
Series 1996 F, 3.92% (Liquidity Facility Bank of America)
3,180,000 3,180,000
Series PA-117, 3.94% (Liquidity Facility Merrill
Lynch & Co., Inc.) (b) 4,880,000 4,880,000
Series PT-92, 3.94% (Liquidity Facility Bayerische
Hypotheken-und Wechsel Bank) (b) 7,465,000 7,465,000
Series PT-118, 3.94% (Liquidity Facility
Banco Santander SA) (b) 16,800,000 16,800,000
New Jersey Sports & Exposition Auth. Rev.
Series 1992 C, 3.65% (MBIA Insured)
(BPA Credit Suisse First Boston) VRDN 11,485,000 11,485,000
New Jersey Trans. Trust Fund Trans. Sys.:
Rev. Bonds Series 1995 A, 5.50% 6/15/98 2,500,000 2,501,521
Participating VRDN (c):
Series PA-330, 3.92% (Liquidity Facility Merrill
Lynch & Co., Inc.) 2,500,000 2,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Trans. Trust Fund Trans. Sys.: - continued
Participating VRDN (c): - continued
Series 1995 A, 3.90% (Liquidity Facility Nat'l.
Westminster Bank PLC) $ 4,150,000 $ 4,150,000
North Brunswick Gen. Oblig. BAN 4.25% 8/28/98 3,300,000 3,302,642
Ocean County Util. Auth. Wastewtr. Rev. Rfdg. Bonds
Series 1997, 5% 1/1/99 2,675,000 2,696,961
Passaic County Gen. Oblig. BAN:
4.25% 9/25/98 16,500,000 16,519,664
4% 4/2/99 10,500,000 10,533,472
Salem County Poll. Cont. Fin. Auth.:
Participating VRDN, Series PA-357, 3.92%
(Liquidity Facility Merrill Lynch & Co., Inc.) (c) 3,760,000
3,760,000
Poll. Cont. Rev., VRDN:
Rfdg. (Public Svc. Elec. & Gas)
Series1997 A, 3.80% (MBIA Insured)
(BPA Swiss Bank Corp.) (b) 1,800,000 1,800,000
(Atlantic City Elec. Co. Proj.) Series 1997B, 3.75%
(MBIA Insured) (BPA Bank of New York, NA) (b) 1,000,000 1,000,000
Somerset County Ind. Dev. Board Poll. Cont. Rev.
(3M Corp.) Series 1982, 3.50%, VRDN 100,000 100,000
Sparta Gen. Oblig. BAN 4.25% 6/12/98 2,500,000 2,500,297
Verona Township Gen. Oblig. BAN 4.25% 11/12/98 3,525,000 3,531,557
Washington Township/Gloucester County Gen. Oblig.
BAN 4.10% 1/15/99 3,236,429 3,244,241
West Milford Township Gen. Oblig. BAN:
Series A, 4% 7/23/98 2,295,000 2,296,457
Series B, 4% 1/22/99 2,298,000 2,303,994
West Windsor School Dist. BAN 4% 1/27/99 10,100,000 10,126,238
Woodbridge Township Gen. Oblig. BAN 4.25% 7/31/98 8,250,000
8,254,966
396,399,166
NEW YORK & NEW JERSEY - 21.4%
New York & New Jersey Port. Auth. Equip. Rev., VRDN:
Series 1995-1, 4% 5,000,000 5,000,000
Series 1996-3, 4% 5,000,000 5,000,000
Series 1996-5, 4% 4,800,000 4,800,000
Series 1997-1B, 4% 3,200,000 3,200,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW YORK & NEW JERSEY - CONTINUED
New York & New Jersey Port Auth. Participating VRDN (c):
Series PA-67, 4.02% (Liquidity Facility Merrill
Lynch & Co., Inc.) $ 2,080,000 $ 2,080,000
Series SG-52, 4.02% (Liquidity Facility Societe
Generale, France) (b) 5,100,000 5,100,000
Series 1997:
4% (Liquidity Facility Bank of New York, NA) 2,100,000 2,100,000
4% (Liquidity Facility Bank of New York, NA) (b) 5,600,000
5,600,000
Series 6:
4.02% (Liquidity Facility Societe Generale, France) (b) 3,655,000
3,655,000
4.02% (Liquidity Facility Societe Generale, France) (b) 9,900,000
9,900,000
4.02% (Liquidity Facility Societe Generale, France) (b) 6,900,000
6,900,000
New York & New Jersey Port Auth. Rev.:
CP:
Series A:
3.70% 8/12/98
(Liquidity Facility Bank of Nova Scotia) (b) 3,115,000 3,115,000
3.65% 9/15/98
(Liquidity Facility Bank of Nova Scotia) (b) 3,850,000 3,850,000
Series B, 3.35% 7/15/98
(Liquidity Facility Bank of Nova Scotia) 1,800,000 1,800,000
VRDN:
Series 1991, 3.813% (b)(d) 6,400,000 6,400,000
Series 1992, 3.575% (d) 6,900,000 6,900,000
Series 1995, 3.575% (b)(d) 10,500,000 10,500,000
Series 1997-2, 3.575% (d) 10,400,000 10,400,000
New York & New Jersey Port Auth. Spl. Oblig. Rev.
(Versatile Structure Oblig.) VRDN:
Series 3, 4% (BPA Morgan Guaranty Trust Co., NY) 1,500,000
1,500,000
Series 4, 3.95% (BPA Landesbank Hessen-Thuringen) (b) 2,200,000
2,200,000
Series 6, 3.95% (BPA Bank of Nova Scotia) 9,000,000 9,000,000
109,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - 0.8%
Puerto Rico Commonwealth Infrastructure Fin. Auth.
Participating VRDN, Series 1997 A, 3.75%
(Liquidity Facility CoreStates Bank) (c) $ 15,000 $ 15,000
Puerto Rico Hwy. & Trans. Auth. Series A, 3.75%
(AMBAC Insured) (Liquidity Facility Bank
of Nova Scotia) VRDN 3,800,000 3,800,000
3,815,000
TOTAL INVESTMENT IN SECURITIES - 100% $ 509,214,166
Total Cost for Income Tax Purposes $ 509,214,166
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
Additional information on each holding is as follows:
ACQUISITION
SECURITY DATE COST
New York &
New Jersey Port
Auth. Rev., VRDN:
Series 1991, 3.813% 6/18/91 $ 6,400,000
Series 1992, 3.575% 2/14/92 $ 6,900,000
Series 1995, 3.575% 9/15/95 $ 10,500,000
Series 1997-2, 3.575% 9/15/97 $ 10,400,000
OTHER INFORMATION
The fund invested in securities that are not registered under the
Securities Act of 1933. These securities are subject to legal or
contractual restrictions on resale. At the end of the period,
restricted securities (excluding 144A issues) amounted to $34,200,000
or 6.7% of net assets (see Note 2 of Notes to Financial Statements).
INCOME TAX INFORMATION
At November 30, 1997, the fund had a capital loss carryforward of
approximately $71,000 of which $24,000, $16,000, $2,000 and $29,000
will expire on November 30, 2000, 2002, 2003 and 2004, respectively.
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 509,214,166
SEE ACCOMPANYING SCHEDULE
SHARE TRANSACTIONS IN PROCESS 4,683,879
INTEREST RECEIVABLE 4,413,636
TOTAL ASSETS 518,311,681
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 52,588
PAYABLE FOR INVESTMENTS PURCHASED 4,200,798
SHARE TRANSACTIONS IN PROCESS 449,638
DISTRIBUTIONS PAYABLE 21,076
ACCRUED MANAGEMENT FEE 217,644
OTHER PAYABLES AND ACCRUED EXPENSES 7,705
TOTAL LIABILITIES 4,949,449
NET ASSETS $ 513,362,232
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 513,441,796
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (79,564)
NET ASSETS, FOR 513,414,601 SHARES OUTSTANDING $ 513,362,232
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($513,362,232 (DIVIDED BY) 513,414,601 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INTEREST INCOME $ 9,356,006
EXPENSES
MANAGEMENT FEE $ 1,299,116
NON-INTERESTED TRUSTEES' COMPENSATION 143
TOTAL EXPENSES BEFORE REDUCTIONS 1,299,259
EXPENSE REDUCTIONS (8,294) 1,290,965
NET INTEREST INCOME 8,065,041
NET REALIZED GAIN (LOSS) ON INVESTMENTS (8,470)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,056,571
OTHER INFORMATION
EXPENSE REDUCTIONS $ 82
CUSTODIAN CREDITS
TRANSFER AGENT CREDITS 8,212
$ 8,294
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED ONE MONTH ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30, OCTOBER 31,
(UNAUDITED) 1997 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 8,065,041 $ 1,403,965 $ 16,638,749
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) (8,470) - (28,856)
INCREASE (DECREASE) IN - - (31)
NET UNREALIZED GAIN FROM
ACCRETION OF MARKET DISCOUNT
NET INCREASE (DECREASE) IN NET ASSETS 8,056,571 1,403,965 16,609,862
RESULTING FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET (8,065,041) (1,403,965) (16,638,749)
INTEREST INCOME
SHARE TRANSACTIONS AT NET ASSET 272,248,804 37,088,585 572,748,800
VALUE OF $1.00 PER SHARE
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET 7,946,292 1,377,406 16,278,251
INTEREST INCOME
COST OF SHARES REDEEMED (291,189,368) (34,651,925) (573,322,288)
NET INCREASE (DECREASE) IN NET (10,994,272) 3,814,066 15,704,763
ASSETS AND SHARES RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN (11,002,742) 3,814,066 15,675,876
NET ASSETS
NET ASSETS
BEGINNING OF PERIOD 524,364,974 520,550,908 504,875,032
END OF PERIOD $ 513,362,232 $ 524,364,974 $ 520,550,908
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS SIX MONTHS ONE MONTH YEARS ENDED OCTOBER 31,
ENDED ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997 1997 1996 1995 1994 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE,
BEGINNING OF PERIOD $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
INCOME FROM INVESTMENT
OPERATIONS .016 .003 .032 .032 .036 .024 .021
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.016) (.003) (.032) (.032) (.036) (.024) (.021)
NET ASSET VALUE, END OF PERIOD $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
TOTAL RETURN B, C 1.56% .27% 3.22% 3.24% 3.65% 2.45% 2.17%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD
(000 OMITTED) $513,362 $524,365 $520,551 $504,875 $469,834 $395,935 $313,477
RATIO OF EXPENSES TO
AVERAGE NET ASSETS .50% A .50% A .40% D .35% D .31% D .28% D .44% D
RATIO OF EXPENSES TO
AVERAGE NET ASSETS AFTER .50% A .50% A .40% .34% E .31% .28% .44%
EXPENSE REDUCTIONS
RATIO OF NET INTEREST
INCOME TO AVERAGE NET ASSETS 3.10% A 3.28% A 3.15% 3.20% 3.59% 2.44% 2.15%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED AND DO NOT INCLUDE THE ACCOUNT
CLOSEOUT FEE.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD
CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
D 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.
E FMR OR THE FUND HAS ENTERED INTO VARYING
ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID
OR REDUCED A PORTION OF THE FUND'S EXPENSES.
FIDELITY NEW JERSEY 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. 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 10 years total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
FIDELITY NJ MUNICIPAL MONEY MARKET 1.49% 3.05% 14.70% 43.66%
NEW JERSEY TAX-FREE MONEY MARKET 1.44% 3.17% 14.72% 46.44%
FUNDS AVERAGE
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or ten 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. To measure how the fund's performance stacked up
against its peers, you can compare it to the New Jersey tax-free money
market funds average, which reflects the performance of municipal
money market funds with similar objectives tracked by IBC Financial
Data, Inc. The past six months average represents a peer group of 18
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 MAY 31, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY NJ MUNICIPAL MONEY MARKET 3.05% 2.78% 3.69%
NEW JERSEY TAX-FREE MONEY MARKET 3.17% 2.77% 4.62%
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
6/1/98 3/2/98 12/1/97 9/1/97 6/2/97
FIDELITY NEW JERSEY MUNICIPAL 3.17% 2.79% 3.24% 2.84% 3.17%
MONEY MARKET FUND
NEW JERSEY TAX-FREE 2.99% 2.66% 3.06% 2.65% 2.93%
MONEY MARKET FUNDS
AVERAGE
FIDELITY NEW JERSEY MUNICIPAL 5.29% 4.66% 5.41% 4.74% 5.29%
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 New
Jersey 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 1998 federal and state income tax
rate of 40.08%. A portion of the fund's income may be subject to the
federal alternative minimum tax.
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 would
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)
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio Manager of Fidelity New Jersey
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX
MONTHS?
A. During much of the period, market participants tried to determine
when the Federal Reserve Board might raise the fed funds rate - the
rate banks charge each other for overnight loans - as a way to slow
the economy and thus head off inflation. The economy continued to grow
at a fairly strong pace and unemployment numbers were incredibly low -
coming in at 4.3% in April. But despite this period of continuing
expansion, wage pressures did not arise and inflation remained benign.
Under normal circumstances, the possibility of future inflation
created by these low unemployment numbers likely would have led the
Fed to raise rates. But the economic and political turmoil in Asia
kept the Fed on the sidelines during the period.
Q. WHY WAS THE ASIAN TURMOIL ABLE TO OFFSET U.S. ECONOMIC STRENGTH IN
THE FED'S DECISION ON MONETARY POLICY?
A. First of all, the Fed didn't want to make the situation in Asia
worse by raising short-term interest rates here, especially
considering the financial and political unrest in countries such as
Indonesia at the end of the period. An increase in short-term rates in
the U.S. would have likely strengthened the U.S. dollar even more
versus Asian currencies, which could have further hurt their markets.
In other words, the Fed was asking itself, "Why make the Asian markets
more volatile by raising rates in the U.S.?" Second, there was the
possibility that the Asian turmoil would have translated into a
reduction of U.S. net exports, which would likely have had a dampening
effect of its own on the U.S. economy and inflation.
Q. WHAT WAS THE FUND'S STRATEGY DURING THIS PERIOD?
A. I extended the fund's average maturity by purchasing one-year
fixed-rate notes during most of the period. The prevalent supply of
one-year issues made them attractive. In addition, as is often the
case, fixed-rate instruments in the New Jersey market offered a yield
advantage over short-term variable-rate notes because of the strong
demand for the latter. Therefore, whenever I felt that concerns about
an interest-rate increase were built into the market, I bought
fixed-rate notes to lock in higher yields that would last throughout
the period. As a result, I extended the fund's average maturity from
the low-50-day range at the beginning of the period to the 60-day
range at the end of the period.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1998, was 3.18%, compared to
3.24% six months ago. The more recent seven-day yield was the
equivalent of a 5.31% taxable rate of return for New Jersey investors
in the 40.08% combined state and federal income tax bracket. Through
May 31, 1998, the fund's six-month total return was 1.49%, compared to
1.44% for the New Jersey tax-free money market funds average,
according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. I think there's one important wildcard: what happens in Asia. If we
continue to see the same level of turmoil there, I believe the Fed may
be obligated to stay on the sidelines. There's a lot of risk that a
rate increase in the U.S. could cause increased volatility in global
markets. Without a rate increase, the U.S. economy still might slow as
a result of fewer U.S. exports. In this case, the Asian situation
would do the Fed's job for them. The strength of the U.S. economy, in
light of the Asian situation, has left the Fed at an impasse. And,
although I believe the next Fed move will be to raise rates, I don't
believe it will be any time soon. The only factor that could change
the Fed's stance in the next few months would be real signs of
inflation - wage pressures as reflected in the employment cost index
or higher-than-expected increases in the consumer price index or the
producer price index. At that point, the Fed may risk causing more
problems in Asia to keep the U.S. economy on good footing.
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 while maintaining
share price stability by
investing in high-quality,
short-term New Jersey
municipal money market
securities
FUND NUMBER: 417
TRADING SYMBOL: FNJXX
START DATE: March 17, 1988
SIZE: as of May 31, 1998,
more than $526 million
MANAGER: Scott Orr, since
1997; manager, various Fidelity
and Spartan municipal money
market funds; joined Fidelity
in 1989
(checkmark)
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
5/31/98 11/30/97 5/31/97
0 - 30 71 67 65
31 - 90 6 15 16
91 - 180 7 9 6
181 - 397 16 9 13
WEIGHTED AVERAGE MATURITY
5/31/98 11/30/97 5/31/97
FIDELITY NEW JERSEY MUNICIPAL 62 DAYS 50 DAYS 58 DAYS
MONEY MARKET FUND
NEW JERSEY TAX-FREE 50 DAYS 51 DAYS 51 DAYS
MONEY MARKET FUNDS AVERAGE*
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1998 AS OF NOVEMBER 30, 1997
ROW: 1, COL: 1, VALUE: 54.0
ROW: 1, COL: 2, VALUE: 16.0
ROW: 1, COL: 3, VALUE: 27.0
ROW: 1, COL: 4, VALUE: 2.0
ROW: 1, COL: 1, VALUE: 56.0
ROW: 1, COL: 2, VALUE: 17.0
ROW: 1, COL: 3, VALUE: 24.0
ROW: 1, COL: 4, VALUE: 2.0
VARIABLE RATE DEMAND
NOTES (VRDNS) 56%
COMMERCIAL PAPER
(INCLUDING CP MODE) 16%
MUNICIPAL
NOTES 27%
OTHER 1%
VARIABLE RATE DEMAND
NOTES (VRDNS) 58%
COMMERCIAL PAPER
(INCLUDING CP MODE) 17%
MUNICIPAL
NOTES 24%
OTHER 1%
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - 79.0%
Bernardsville Gen. Oblig. BAN 3.75% 4/15/99 $ 3,500,000 $ 3,504,696
Bloomfield Township Gen. Oblig. BAN 3.80% 6/1/99 4,300,000
4,300,817
Burlington County Gen. Oblig. BAN 3.75% 4/22/99 2,500,000 2,502,143
Camden County Impt. Auth. Rev., VRDN:
(Jewish Commty. Ctr. Proj.) Series 1995, 4%,
LOC Nat'l. Westminster Bank PLC 2,200,000 2,200,000
(Parkview Redev. Hsg. Proj.) 3.90%,
LOC General Electric Cap. Corp. (b) 6,000,000 6,000,000
Chatham Township Gen. Oblig. BAN 3.75% 2/18/99 3,585,350 3,589,297
Cranford Township Gen. Oblig. BAN 3.76% 3/19/99 2,850,000 2,854,375
Delaware River Port Auth. Participating VRDN, Series SG-53,
4.02% (Liquidity Facility Societe Generale, France) (c) 9,000,000
9,000,000
East Brunswick Township Gen. Oblig. BAN 3.75% 4/13/99 8,200,000
8,211,330
East Windsor Reg. School Dist. BAN 4.25% 8/26/98 2,300,000
2,302,086
Fairfield Township Gen. Oblig. BAN 3.75% 8/6/98 2,628,133 2,629,289
Hudson County Impt. Auth. Rev. (Essential Purp. Pooled
Gov't. Loan Prog.) Series 1986, 3.85%,
LOC Comerica Bank, Detroit, VRDN 28,795,000 28,795,000
Jefferson Township Gen. Oblig. BAN
Series 1998 A, 4% 2/19/99 3,663,650 3,674,341
Middlesex County Gen. Oblig.:
BAN 4% 1/26/99 18,608,095 18,666,946
Rfdg. Participating VRDN, Series BT-290, 3.70%
(Liquidity Facility Bankers Trust Co., NY) (c) 5,050,000 5,050,000
Montclair Township Gen. Oblig. BAN 4% 1/22/99 3,883,000 3,893,125
Montville Township Gen. Oblig. BAN 4.25% 8/28/98 4,350,000
4,354,541
Morristown Gen. Oblig. BAN 4% 5/4/99 6,350,000 6,361,287
New Jersey Econ. Dev. Auth. Bonds:
(Chambers Cogeneration Proj.) Series 1991,
3.75% 7/7/98, LOC Credit Locale
de France, CP mode (b) 8,500,000 8,500,000
(Keystone Urban Renewal Proj.) Series 1992,
3.50% 9/10/98, LOC Union Bank of
Switzerland, CP mode (b) 2,800,000 2,800,000
New Jersey Econ. Dev. Auth. Dock Facs. Rev. Rfdg.
(Bayonne/IMTT-Bayonne Proj.) Series1993-C, 3.90%,
LOC First Nat'l. Bank of Chicago, VRDN 3,000,000 3,000,000
New Jersey Econ. Dev. Auth. Econ. Dev. Rev., VRDN:
(500 International Drive Partners Proj.) Series 1995,
3.70%, LOC First Union Nat'l. Bank 2,800,000 2,800,000
(Casa DiBertacchi Corp.) Series 1988, 3.95%,
LOC Marine Midland Bank (b) 600,000 600,000
(Catholic Commty. Svcs.) Series 1995, 3.60%,
LOC First Union Nat'l. Bank 1,250,000 1,250,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Econ. Dev. Rev., VRDN: - continued
(Ctr. For Aging Applewood Proj.) 3.80%,
LOC Summit Bank, Fleet Bank NA $ 2,275,000 $ 2,275,000
(Headquarters Proj.) Series 1997, 3.85%,
LOC PNC Bank NA 2,500,000 2,500,000
(Hoffman-LaRoche, Inc.) 3.90%,
LOC Bayerische Landesbank Girozentrale (b) 1,900,000 1,900,000
(Peddie School Proj.) 3.75% (BPA PNC Bank NA) 500,000 500,000
(PVC Container Corp.) Series 1987 D, 4.10%,
LOC Nat'l. Westminster Bank PLC (b) 1,135,000 1,135,000
(Russ Berrie & Co., Inc.) 3.50%, LOC Bank of New York, NA 1,000,000
1,000,000
Rfdg. (RJB Associates 1983 Proj.) 3.85%,
LOC PNC Bank NA 500,000 500,000
Rfdg. (Stolthaven Perth Amboy Proj.) Series 1998 A,
3.80%, LOC Citibank, NA 8,300,000 8,300,000
New Jersey Econ. Dev. Auth. Gas Facs. Rev.
(NUI Corp. Proj.) Series 1996 A, 3.90%
(AMBAC Insured) (BPA Bank of New York, NA) VRDN (b) 5,500,000
5,500,000
New Jersey Econ. Dev. Auth. Health Care Rev.
(Bayshore Health Ctr.) Series 1998 A, 3.90%,
LOC Kredietbank NV, VRDN 4,600,000 4,600,000
New Jersey Econ. Dev. Auth. Poll. Cont. Rev.
(Hoffman-LaRoche, Inc. Proj.) Series 1985, 3.70%,
LOC Wachovia Bank, NA, VRDN 3,000,000 3,000,000
New Jersey Econ. Dev. Auth. Wtr. Facs. Participating VRDN,
Series 1998, 4% (Liquidity Facility Bank of
New York, NA) (b)(c) 10,000,000 10,000,000
New Jersey Edl. Facs. Auth. Participating VRDN,
Series SG-48, 3.92% (Liquidity Facility
Societe Generale, France) (c) 2,900,000 2,900,000
New Jersey Gen. Oblig. Series 1998 A, CP:
3.65% 6/1/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 2,000,000 2,000,000
3.70% 6/1/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 4,900,000 4,900,000
3.70% 6/2/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 6,500,000 6,500,000
3.70% 6/8/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 6,000,000 6,000,000
3.85% 6/9/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 1,000,000 1,000,000
3.90% 6/10/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 6,000,000 6,000,000
3.95% 6/11/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 2,500,000 2,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Gen. Oblig. Series 1998 A, CP: - continued
4% 6/11/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) $ 4,700,000 $ 4,700,000
4% 6/12/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 4,700,000 4,700,000
3.70% 6/15/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 15,700,000 15,700,000
3.90% 6/15/98 (Liquidity Facility Bank of
Nova Scotia/Commerzbank AG) 6,800,000 6,800,000
New Jersey Gen. Oblig. Participating VRDN (c):
Series PA-340, 3.92% (Liquidity Facility
Merrill Lynch & Co., Inc.) 12,495,000 12,495,000
Series 1998, 3.95% (Liquidity Facility Bayerische
Hypotheken-und Wechsel Bank) 1,100,000 1,100,000
New Jersey Health Care Facs. Fin. Auth. Rev.
(Hosp. Cap. Asset Fing. Prog.) Series 1985 B, 3.70%,
LOC Chase Manhattan Bank, VRDN 8,100,000 8,100,000
New Jersey Higher Ed. Assistance Auth. Student Loan Rev.
Bonds (New Jersey Class Loan Prog.) Series 1997 B,
3.90%, tender 6/1/98 (MBIA Insured) (BPA Landesbank
Hessen-Thuringen) (b) 1,600,000 1,600,000
New Jersey Hsg. & Mtg. Fin. Agcy. Participating VRDN (c):
Series 1994 C-3003, 4.12%
(Liquidity Facility Citibank, NA) 6,800,000 6,800,000
Series 1994 C-3004, 3.97%
(Liquidity Facility Citibank, NA) 3,400,000 3,400,000
Series 1994 C-3005, 3.97%
(Liquidity Facility Citibank, NA) 3,500,000 3,500,000
Series 1996 F, 3.92% (Liquidity Facility Bank of America) 5,515,000
5,515,000
Series PA-117, 3.94% (Liquidity Facility Merrill
Lynch & Co., Inc.) (b) 4,320,000 4,320,000
Series PT-92, 3.94% (Liquidity facility Bayerische
Hypotheken-und Wechsel Bank) (b) 11,265,000 11,265,000
Series PT-118, 3.94% (Liquidity Facility
Banco Santander SA) (b) 9,870,000 9,870,000
New Jersey Sports & Exposition Auth. Rev.
Series 1992 C, 3.65% (MBIA Insured)
(BPA Credit Suisse First Boston) VRDN 13,370,000 13,370,000
New Jersey Trans. Trust Fund Trans. Sys. Participating VRDN (c):
Series PA-330, 3.92% (Liquidity Facility Merrill
Lynch & Co., Inc.) 2,500,000 2,500,000
Series 1995 A, 3.90% (Liquidity Facility Nat'l.
Westminster Bank PLC) 4,100,000 4,100,000
North Brunswick Township Gen. Oblig. BAN 4.25% 8/28/98 2,769,965
2,772,208
Ocean County Gen. Oblig. BAN 4.25% 6/19/98 15,000,000 15,002,591
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Ocean County Util. Auth. Wastewtr. Rev. Rfdg. Bonds
Series 1997, 5% 1/1/99 $ 2,600,000 $ 2,621,345
Passaic County Gen. Oblig. BAN:
4.25% 9/25/98 14,000,000 14,016,695
4% 4/2/99 10,500,000 10,533,472
Salem County Poll. Cont. Fin. Auth.:
Participating VRDN, Series PA-357, 3.92%
(Liquidity Facility Merrill Lynch & Co., Inc.) (c) 3,900,000
3,900,000
Poll. Cont. Rev. Rfdg. (Public Svc. Elec. & Gas)
Series 1997 A, 3.80% (MBIA Insured)
(BPA Swiss Bank Corp.) (b) 2,200,000 2,200,000
Somerset County Ind. Dev. Board Poll. Cont. Rev.
(3M Corp.) Series 1982, 3.50%, VRDN 600,000 600,000
Sparta Gen. Oblig. BAN 4.25% 6/12/98 2,224,000 2,224,264
Verona Township Gen. Oblig. BAN 4.25% 11/12/98 3,200,000 3,205,953
Washington Township/Gloucester County Gen. Oblig.
BAN 4.10% 1/15/99 3,250,000 3,257,844
West Milford Township Gen. Oblig. BAN:
Series A, 4% 7/23/98 2,200,000 2,201,397
Series B, 4% 1/22/99 2,100,000 2,105,477
West Windsor School Dist. BAN 4% 1/27/99 9,900,000 9,925,718
Woodbridge Township Gen. Oblig. BAN:
4.25% 7/1/98 3,600,000 3,600,276
4.25% 7/31/98 7,000,000 7,004,255
414,855,768
NEW YORK & NEW JERSEY - 21.0%
New York & New Jersey Port Auth. Equip. Rev., VRDN:
Series 1996-1, 4% 5,000,000 5,000,000
Series 1996-2, 4.10% (b) 3,500,000 3,500,000
Series 1996-4, 4% 4,200,000 4,200,000
Series 1997-1A, 4% 2,800,000 2,800,000
New York & New Jersey Port Auth. Participating VRDN (c):
Series SG-52, 4.02%
(Liquidity Facility Societe Generale, France) (b) 4,600,000
4,600,000
Series PA-67, 4.02%
(Liquidity Facility Merrill Lynch & Co., Inc.) 2,000,000 2,000,000
Series 1997:
4% (Liquidity Facility Bank of New York, NA) (b) 5,200,000
5,200,000
4% (Liquidity Facility Bank of New York, NA) 1,900,000 1,900,000
Series 6:
4.02% (Liquidity Facility Societe Generale, France) (b) 3,200,000
3,200,000
4.02% (Liquidity Facility Societe Generale, France) (b) 10,600,000
10,600,000
4.02% (Liquidity Facility Societe Generale, France) (b) 6,400,000
6,400,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW YORK & NEW JERSEY - CONTINUED
New York & New Jersey Port Auth. Rev.:
CP:
Series A:
3.70% 8/12/98
(Liquidity Facility Bank of Nova Scotia) (b) $ 3,100,000 $
3,100,000
3.50% 9/9/98
(Liquidity Facility Bank of Nova Scotia) (b) 3,120,000 3,120,000
Series B:
3.35% 7/15/98
(Liquidity Facility Bank of Nova Scotia) 1,215,000 1,215,000
3.50% 9/10/98
(Liquidity Facility Bank of Nova Scotia) 1,135,000 1,135,000
3.55% 9/10/98
(Liquidity Facility Bank of Nova Scotia) 2,515,000 2,515,000
VRDN:
Series 1991, 3.813% (b)(d) 8,800,000 8,800,000
Series 1992, 3.575% (b)(d) 6,800,000 6,800,000
Series 1995, 3.575% (b)(d) 9,400,000 9,400,000
Series 1997-1, 3.575% (d) 8,900,000 8,900,000
New York & New Jersey Port. Auth. Spl. Oblig. Rev. (Versatile
Structure Oblig.) VRDN:
3.85% (BPA Morgan Guaranty Trust Co., NY) 2,500,000 2,500,000
4.20% (BPA Bank of Tokyo-Mitsubishi Ltd.,
Sumitomo Bank Ltd., Japan) (b) 2,700,000 2,700,000
Series 3, 4% (BPA Morgan Guaranty Trust Co., NY) 6,290,000
6,290,000
Series 6, 3.95% (BPA Bank of Nova Scotia) 4,200,000 4,200,000
110,075,000
TOTAL INVESTMENT IN SECURITIES - 100% $ 524,930,768
Total Cost for Income Tax Purposes $ 524,930,768
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
Additional information on each holding is as follows:
ACQUISITION
SECURITY DATE COST
New York & New
Jersey Port Auth.
Rev., VRDN:
Series 1991, 3.813% 6/18/91 $ 8,800,000
Series 1992, 3.575% 2/14/92 $ 6,800,000
Series 1995, 3.575% 9/15/95 $ 9,400,000
Series 1997-1, 3.575% 9/15/97 $ 8,900,000
OTHER INFORMATION
The fund invested in securities that are not registered under the
Securities Act of 1933. These securities are subject to legal or
contractual restrictions on resale. At the end of the period,
restricted securities (excluding 144A issues) amounted to $33,900,000
or 6.4% of net assets (see Note 2 of Notes to Financial Statements).
INCOME TAX INFORMATION
At November 30, 1997, the fund had a capital loss carryforward of
approximately $55,000 of which $8,000, $21,000 and $26,000 will expire
on November 30, 2001, 2003 and 2005, respectively.
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 524,930,768
SEE ACCOMPANYING SCHEDULE
SHARE TRANSACTIONS IN PROCESS 5,775,421
INTEREST RECEIVABLE 4,999,712
TOTAL ASSETS 535,705,901
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 33,628
PAYABLE FOR INVESTMENTS PURCHASED 4,300,817
SHARE TRANSACTIONS IN PROCESS 4,513,072
DISTRIBUTIONS PAYABLE 35,873
ACCRUED MANAGEMENT FEE 168,092
OTHER PAYABLES AND ACCRUED EXPENSES 115,401
TOTAL LIABILITIES 9,166,883
NET ASSETS $ 526,539,018
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 526,596,370
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (57,352)
NET ASSETS, FOR 526,596,433 SHARES OUTSTANDING $ 526,539,018
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($526,539,018 (DIVIDED BY) 526,596,433 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INTEREST INCOME $ 9,297,815
EXPENSES
MANAGEMENT FEE $ 1,004,702
TRANSFER AGENT FEES 440,908
ACCOUNTING FEES AND EXPENSES 51,407
NON-INTERESTED TRUSTEES' COMPENSATION 1,150
CUSTODIAN FEES AND EXPENSES 15,846
REGISTRATION FEES 20,614
AUDIT 13,274
LEGAL 10,349
REPORTS TO SHAREHOLDERS 16,952
TOTAL EXPENSES BEFORE REDUCTIONS 1,575,202
EXPENSE REDUCTIONS (14,563) 1,560,639
NET INTEREST INCOME 7,737,176
NET REALIZED GAIN (LOSS) ON INVESTMENTS (2,116)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,735,060
OTHER INFORMATION
EXPENSE REDUCTIONS
TRANSFER AGENT CREDITS $ 14,563
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 7,737,176 $ 13,730,894
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) (2,116) (26,426)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 7,735,060 13,704,468
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (7,737,176) (13,730,894)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 898,843,414 1,381,762,190
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 7,503,041 13,414,508
COST OF SHARES REDEEMED (867,466,537) (1,330,712,880)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 38,879,918 64,463,818
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 38,877,802 64,437,392
NET ASSETS
BEGINNING OF PERIOD 487,661,216 423,223,824
END OF PERIOD $ 526,539,018 $ 487,661,216
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED NOVEMBER 30,
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
BEGINNING OF PERIOD
INCOME FROM INVESTMENT .015 .030 .029 .033 .022 .019
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST (.015) (.030) (.029) (.033) (.022) (.019)
INCOME
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
END OF PERIOD
TOTAL RETURN B, C 1.49% 3.03% 2.93% 3.33% 2.19% 1.94%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF $ 526,539 $ 487,661 $ 423,224 $ 434,709 $ 399,548 $ 359,587
PERIOD (000 OMITTED)
RATIO OF EXPENSES TO .60% A .61% .63% .62% .62% .63%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .60% A .61% .61% D .62% .62% .63%
AVERAGE NET ASSETS
AFTER EXPENSE
REDUCTIONS
RATIO OF NET INTEREST 2.95% A 2.98% 2.89% 3.28% 2.17% 1.92%
INCOME TO AVERAGE
NET ASSETS
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS
THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED INTO
VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF
THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1998 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan New Jersey Municipal Income Fund (the income fund) is a fund
of Fidelity Court Street Trust. Spartan New Jersey Municipal Money
Market Fund and Fidelity New Jersey Municipal Money Market Fund(the
money market funds) are funds 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 require 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 funds:
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 FUNDS. 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 funds, accretion of market discount
represents unrealized gain until realized at the time of a security
disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among 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 market discount and futures transactions. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
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.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the income fund
less than 180 days are subject to a short-term trading 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 Fidelity
Investments Money Management, Inc., (formerly 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 earned by the funds are recorded as interest
income in the accompanying financial statements.
WHEN-ISSUED SECURITIES. Each fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
market values of the securities purchased on a when-issued or forward
commitment basis are identified as such in each applicable fund's
schedule of investments. Each fund may receive compensation for
interest forgone in the purchase of a when-issued security. With
respect to purchase commitments, each fund identifies securities as
segregated in its custodial
2. OPERATING POLICIES -
CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
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, 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.
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 $60,623,854 and $47,363,040, respectively.
The market value of futures contracts opened and closed during the
period amounted to $23,236,816 and $25,137,750, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the investment adviser for Fidelity New Jersey
Municipal Money Market Fund, FMR receives a monthly fee that is
calculated on the basis of a group fee rate plus a fixed individual
fund fee rate applied to the average net assets of the fund. The group
fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR.
The rates ranged from .1100% to .3700% for the period. The annual
individual fund fee rate is .25%. In the event that these rates were
lower than the contractual rates in effect during the period, FMR
voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. For the period, the management fee was
equivalent to an annualized rate of .38% of average net assets for
Fidelity New Jersey Municipal Money Market Fund.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
As Spartan New Jersey Municipal Income Fund's and Spartan New Jersey
Municipal Money Market 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 Spartan New
Jersey Municipal Income Fund and Spartan New Jersey Municipal Money
Market Fund, respectively.
FMR also bears the cost of providing shareholder services to Spartan
New Jersey Municipal Income Fund and Spartan New Jersey Municipal
Money Market Fund. To offset the cost of providing these services, FMR
or its affiliates collect certain transaction fees from the funds'
shareholders which amounted to $0 and $3,029 for Spartan New Jersey
Municipal Income Fund and Spartan New Jersey Municipal Money Market
Fund, respectively.
SUB-ADVISER FEE. As the money market funds' investment sub-adviser,
Fidelity Investments Money Management, Inc. (formerly 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.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian and transfer and shareholder servicing agent for Fidelity
New Jersey Municipal Money Market Fund. UMB has entered into a
sub-contract with Fidelity Service Company, Inc. (FSC), an affiliate
of FMR, under which FSC performs the activities associated with the
fund's transfer and shareholder servicing agent and accounting
functions. The fund pays account fees and asset-based fees that vary
according to account size and type of account. FSC pays for
typesetting, printing and mailing of all shareholder reports, except
proxy statements. The accounting fee is based on the level of average
net assets for the month plus out-of-pocket expenses.
For the period, the transfer agent fees were equivalent to an
annualized rate of .17% of average net assets for Fidelity New Jersey
Municipal Money Market Fund.
5. EXPENSE REDUCTIONS.
Fidelity New Jersey Municipal Money Market Fund and FMR (on behalf of
Spartan New Jersey Municipal Income Fund and Spartan New Jersey
Municipal Money Market Fund) have entered into arrangements with their
custodians and transfer agents whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of each
applicable fund's expenses.
For the period, the reductions under these arrangements are shown
under the caption "Other Information" on each applicable fund's
Statement of Operations.
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 Xpress(registered trademark) provides 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.
(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.
(COMPUTER_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
(COMPUTER_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
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
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
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
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Scottsdale, AZ
CALIFORNIA
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Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
SUB-ADVISER
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning Jr., Vice President
Boyce I. Greer, Vice President
Dwight D. Churchill, Vice President
Norm Lind, Vice President
Scott Orr, Vice President
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
Exchanges/Redemptions 1-800-544-7777
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 (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)SPARTAN(registered trademark)
MUNICIPAL INCOME
FUND
SEMIANNUAL REPORT
MAY 31, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 7 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 10 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 11 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 39 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 43 NOTES TO THE FINANCIAL STATEMENTS.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
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:
While low interest rates and subdued inflation provided support for
stock and bond markets in the U.S. during the first five months of
1998, concerns about continuing economic and political difficulties in
Asia colored their performance. The stock market reached record
heights due to stronger-than-expected corporate earnings, but
retreated at times when concerns surfaced about how the Asian
volatility would affect business prospects. The bond market benefited
from these retreats, as investors sought alternatives offering lower
volatility.
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
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.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
SPARTAN MUNICIPAL INCOME 3.66% 9.32% 34.18% 121.81%
LB MUNICIPAL BOND 3.78% 9.38% 38.48% 124.26%
GENERAL MUNICIPAL DEBT FUNDS AVERAGE 3.52% 9.21% 34.08% 117.84%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, 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 Municipal Bond Index - a total return
performance benchmark for 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 general
municipal debt funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past six months average represents a peer group of 247 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 MAY 31, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
SPARTAN MUNICIPAL INCOME 9.32% 6.06% 8.29%
LB MUNICIPAL BOND 9.38% 6.73% 8.41%
GENERAL MUNICIPAL DEBT FUNDS AVERAGE 9.21% 6.03% 8.08%
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
Spartan Municipal Income LB Municipal Bond
00037 LB015
1988/05/31 10000.00 10000.00
1988/06/30 10119.65 10146.30
1988/07/31 10224.45 10212.45
1988/08/31 10271.60 10221.44
1988/09/30 10497.58 10406.45
1988/10/31 10699.32 10589.60
1988/11/30 10609.04 10492.60
1988/12/31 10813.50 10599.94
1989/01/31 10966.05 10819.15
1989/02/28 10899.70 10695.70
1989/03/31 10922.17 10670.14
1989/04/30 11274.60 10923.45
1989/05/31 11513.10 11150.33
1989/06/30 11624.97 11301.75
1989/07/31 11709.70 11455.57
1989/08/31 11657.75 11343.42
1989/09/30 11607.99 11309.61
1989/10/31 11729.54 11447.93
1989/11/30 11946.17 11648.27
1989/12/31 12045.50 11743.55
1990/01/31 11918.57 11688.00
1990/02/28 12074.63 11792.03
1990/03/31 12088.29 11795.56
1990/04/30 11870.84 11710.16
1990/05/31 12198.39 11965.80
1990/06/30 12328.66 12070.98
1990/07/31 12519.52 12248.42
1990/08/31 12389.29 12070.57
1990/09/30 12482.75 12077.45
1990/10/31 12648.67 12296.54
1990/11/30 13010.27 12543.82
1990/12/31 13066.24 12598.39
1991/01/31 13236.42 12767.46
1991/02/28 13319.27 12878.53
1991/03/31 13362.13 12883.17
1991/04/30 13544.94 13054.52
1991/05/31 13664.24 13170.57
1991/06/30 13664.96 13157.53
1991/07/31 13863.47 13317.79
1991/08/31 13985.94 13493.19
1991/09/30 14097.73 13668.87
1991/10/31 14230.28 13791.89
1991/11/30 14261.34 13830.37
1991/12/31 14395.95 14127.17
1992/01/31 14543.72 14159.38
1992/02/29 14573.48 14163.91
1992/03/31 14587.76 14169.15
1992/04/30 14727.25 14295.25
1992/05/31 14868.60 14463.51
1992/06/30 15074.77 14706.21
1992/07/31 15461.52 15147.10
1992/08/31 15255.73 14999.41
1992/09/30 15296.69 15097.51
1992/10/31 15042.00 14949.10
1992/11/30 15432.35 15216.84
1992/12/31 15599.46 15372.20
1993/01/31 15817.77 15550.98
1993/02/28 16399.91 16113.46
1993/03/31 16281.10 15943.14
1993/04/30 16435.97 16104.01
1993/05/31 16531.36 16194.51
1993/06/30 16774.62 16464.80
1993/07/31 16780.45 16486.37
1993/08/31 17145.08 16829.62
1993/09/30 17393.04 17021.31
1993/10/31 17411.36 17054.16
1993/11/30 17271.20 16903.91
1993/12/31 17644.59 17260.75
1994/01/31 17838.65 17457.87
1994/02/28 17384.23 17005.71
1994/03/31 16579.88 16313.24
1994/04/30 16666.02 16451.57
1994/05/31 16769.89 16594.21
1994/06/30 16674.98 16492.82
1994/07/31 16989.67 16795.13
1994/08/31 17051.39 16853.24
1994/09/30 16798.07 16605.84
1994/10/31 16447.19 16310.92
1994/11/30 15934.05 16016.02
1994/12/31 16330.20 16368.53
1995/01/31 16886.89 16836.34
1995/02/28 17375.60 17325.94
1995/03/31 17421.13 17525.02
1995/04/30 17429.84 17545.70
1995/05/31 17973.47 18105.58
1995/06/30 17696.86 17948.06
1995/07/31 17824.96 18118.21
1995/08/31 18043.23 18347.95
1995/09/30 18182.45 18464.09
1995/10/31 18443.92 18732.56
1995/11/30 18793.45 19043.33
1995/12/31 18972.27 19226.34
1996/01/31 19129.38 19371.50
1996/02/29 19050.03 19240.74
1996/03/31 18806.01 18994.84
1996/04/30 18729.47 18941.09
1996/05/31 18734.43 18933.51
1996/06/30 18956.04 19139.70
1996/07/31 19134.51 19313.87
1996/08/31 19139.37 19309.23
1996/09/30 19363.93 19579.56
1996/10/31 19592.17 19801.01
1996/11/30 19993.94 20163.36
1996/12/31 19910.38 20078.68
1997/01/31 19929.79 20116.63
1997/02/28 20102.51 20301.30
1997/03/31 19842.11 20030.68
1997/04/30 20006.43 20198.34
1997/05/31 20289.52 20502.12
1997/06/30 20538.08 20720.47
1997/07/31 21122.51 21294.43
1997/08/31 20907.81 21094.90
1997/09/30 21158.98 21345.29
1997/10/31 21279.66 21482.54
1997/11/30 21397.30 21608.86
1997/12/31 21747.24 21924.13
1998/01/31 21990.34 22150.39
1998/02/28 21966.24 22157.04
1998/03/31 21968.87 22176.53
1998/04/30 21846.97 22076.52
1998/05/29 22181.02 22425.99
IMATRL PRASUN SHR__CHT 19980531 19980608 134341 R00000000000123
Spartan Municipal Income LB Municipal Bond
$22,426
$22,181
$
'98
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Municipal Income Fund on May 31, 1988. As the
chart shows, by May 31, 1998, the value of the investment would have
grown to $22,181 - a 121.81% increase on the initial investment. For
comparison, look at how the Lehman Brothers Municipal Bond Index did
over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown to $22,426 - a 124.26%
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31,
1998 1997 1996 1995 1994 1993
DIVIDEND RETURN 2.47% 5.32% 5.30% 6.54% 7.54% 6.33%
CAPITAL RETURN 1.19% 1.70% 1.09% 11.41% -15.28% 5.59%
TOTAL RETURN 3.66% 7.02% 6.39% 17.95% -7.74% 11.92%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital 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 MAY 31, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 5.17(CENTS) 30.67(CENTS) 61.07(CENTS)
ANNUALIZED DIVIDEND RATE 4.83% 4.85% 4.85%
30-DAY ANNUALIZED YIELD 4.34% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 6.78% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on an average share price of
$12.61 over the past one month, $12.68 over the past six months and
$12.59 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%
federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Investor sentiment, shifting supply
and demand conditions, and
volatility in Asia played key roles
in the municipal bond market during
the six months that ended May 31,
1998. During this period, the
Lehman Brothers Municipal Bond
Index - a measure of the municipal
bond market - returned 3.78%. To
compare, the Lehman Brothers
Aggregate Bond Index - a
measure of the investment-grade
taxable bond market in the U.S. -
returned 4.09%. In late 1997,
volatility in Asia helped prop up the
muni bond market. Investors felt that
currency devaluations in that region
would translate into cheaper prices
for Asian goods and help control
the inflation that can eat into bonds'
fixed payments. Since the beginning
of 1998, though, muni bond supply
increased as many issuers took
advantage of lower interest rates
to refinance their debt at lower rates.
That, combined with softening
demand, dampened the
performance of muni bonds in early
1998. On top of that, the municipal
bond market experienced
extremely heavy issuance in March
and April, as issuers rushed to
market before the largest deal in
municipal market history took place
in May - a $3.5 billion issuance
by Long Island Power Authority. This
heavy supply, coupled with only
intermittent demand, put
downward pressure on municipal
bonds in April. Renewed fears of
economic and political dislocation in
Asia attracted investors to all sectors
of the bond market in May, but,
overall, municipals lagged taxable
issues through the first five months
of 1998.
NOTE TO SHAREHOLDERS: On January 31, 1998, George Fischer became
Portfolio Manager of Spartan Municipal Income Fund.
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the six-month period that ended May 31, 1998, the fund had a
total return of 3.66%. To get a sense of how the fund did relative to
its competitors, the general municipal debt funds average returned
3.52% for the same six-month period, according to Lipper Analytical
Services. Additionally, the Lehman Brothers Municipal Bond Index -
which is a broad measure of the performance of the municipal bond
market - returned 3.78% for the same six-month period. For the
12-month period that ended May 31, 1998, the fund returned 9.32%. That
compared to the 9.21% return of the general municipal debt funds
average and the 9.38% return of the Lehman Brothers Municipal Bond
Index over the same one-year period.
Q. YOU HAVE BEEN ON THE FUND FOR THE PAST FOUR MONTHS. HAVE YOU MADE
ANY STRATEGIC CHANGES SINCE TAKING OVER?
A. No. I've managed the fund much in the same fashion as the previous
manager. We share a similar investment style that focuses on finding
bonds at prices Fidelity identifies as being below their fair value
when one of their characteristics - be it maturity, issuer, credit
quality or another factor - temporarily falls out of favor. Any
changes I've made since taking over were a result of opportunities
that presented themselves.
Q. CAN YOU GIVE US AN EXAMPLE?
A. Sure. In terms of the way the fund's investments were allocated
among bonds with various maturities, I kept the fund focused on bonds
with maturities between five and 15 years. I did that because the
yield curve - a graphical representation of the yield of bonds by
ascending maturity dates - was relatively flat beyond 15 years. Up to
about a 15-year maturity, an investor was paid an appropriate amount
of added income for each additional year of maturity. It is this
additional income that compensates the investor for the added risk
taken on by investing in the longer-maturity part of the municipal
market. But for bonds with maturities of 15 years or longer, the extra
income for each successive year was, in my opinion, less attractive
given the level of risk inherent in longer-term bonds. Throughout the
period, I also kept the fund's duration - which measures its
sensitivity to changes in interest rates - in line with the municipal
bond market as a whole, as represented by the Lehman Brothers
Municipal Bond Index.
Q. WHICH HOLDINGS CONTRIBUTED TO THE FUND'S PERFORMANCE? WHICH
DETRACTED FROM IT?
A. Securities rated Baa by Moody's Investors Service performed
particularly well during the period. Faced with falling interest
rates, investors continued to seek out Baa-rated securities because
they offered more yield than higher-rated A and AA securities. What's
more, there was a limited supply of Baa-rated bonds available. Strong
demand pushed up against low supply and boosted the prices of most
Baa-rated bonds. On the other hand, the fund's small stake in bonds
backed by municipal issuers in Hawaii proved disappointing. Economic
turmoil in Asia put a damper on Hawaii's tourism industry, because
fewer Japanese vacationed on the island and many of the state's
municipal issuers collected less tax revenue as a result.
Q. THERE WAS A SLIGHT DECREASE IN THE FUND'S CALIFORNIA POSITION AND A
SLIGHT INCREASE IN THE FUND'S NEW YORK POSITION OVER THE PAST SIX
MONTHS. WHAT EXPLAINS THOSE SHIFTS?
A. I sold some bonds issued in California because they had done quite
well, and had, in my view, become a little expensive. I sold them when
I felt it was a good time to lock in some gains. In New York, I added
bonds issued by the Long Island Power Authority. These bonds were part
of the biggest single municipal deal ever - more than $3.5 billion in
bonds were sold. Because there was a strong demand for these bonds -
not only when they were issued but in the weeks that followed - they
performed well.
Q. GEORGE, WHAT'S AHEAD FOR THE FUND AND THE MUNICIPAL MARKET?
A. At the end of the period, municipals were attractively priced
compared to Treasury bonds mainly because the supply of municipals has
been heavy so far in 1998. To take advantage of low interest rates by
refinancing their debt and to issue new securities in advance of the
record-breaking Long Island Power Authority deal, issuers brought a
relatively large supply of municipals in the first five months of this
year. If supply tapers off - which I believe it will in the second
half of 1998 - municipals may do relatively well as they play catch-up
to Treasuries.
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 FUND'S
BENCHMARK INDEX AND ITS ROLE
IN MANAGING THE FUND:
"THE LEHMAN BROTHERS MUNICIPAL
BOND INDEX PLAYS AN IMPORTANT
ROLE IN THE MANAGEMENT OF THE
FUND. IT'S THE FUND'S BENCHMARK
INDEX AND INCLUDES MOST OF THE
UNIVERSE OF MUNICIPAL BONDS. I USE
THE INDEX AS A STARTING POINT FOR MY
INVESTMENT DECISIONS, MANAGING
THE FUND TO BE GENERALLY AS
SENSITIVE TO CHANGES IN INTEREST
RATES AS THE INDEX. IN ADDITION, I
REFER TO THE INDEX WHEN DECIDING
HOW TO ALLOCATE ASSETS AMONG
DIFFERENT MATURITIES AND MARKET
SECTORS BASED ON MY VIEW OF THE
RELATIVE VALUE OF EACH MATURITY OR
SECTOR."
(SOLID BULLET) GENERAL OBLIGATION BONDS (GOS)
MADE UP THE FUND'S LARGEST SECTOR
CONCENTRATION AT 27.8% OF
INVESTMENTS AT THE END OF THE
PERIOD. A GO IS BACKED BY THE FULL
FAITH AND CREDIT - WHICH INCLUDES
THE TAXING POWER - OF A CITY,
COUNTY STATE OR OTHER ISSUER, AND IS
REPAID WITH GENERAL REVENUE
INCLUDING TAXES.
FUND FACTS
GOAL: A HIGH LEVEL OF INCOME
FREE FROM FEDERAL TAX
FUND NUMBER: 037
TRADING SYMBOL: FHIGX
START DATE: DECEMBER 1, 1977
SIZE: AS OF MAY 31, 1998,
MORE THAN $2.4 BILLION
MANAGER: GEORGE FISCHER, SINCE
JANUARY 31, 1998; MANAGER,
VARIOUS FIDELITY AND SPARTAN
MUNICIPAL INCOME FUNDS; JOINED
FIDELITY IN 1989
(CHECKMARK)
INVESTMENT CHANGES
TOP FIVE STATES AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STATES
6 MONTHS AGO
NEW YORK 17.7 15.3
CALIFORNIA 10.8 12.9
TEXAS 10.1 10.7
MASSACHUSETTS 8.0 8.9
ILLINOIS 5.6 5.9
TOP FIVE SECTORS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
GENERAL OBLIGATION 27.8 29.9
ELECTRIC REVENUE 15.1 14.0
TRANSPORTATION 11.7 11.1
HEALTH CARE 8.8 9.6
ESCROWED/PRE-REFUNDED 7.1 5.8
AVERAGE YEARS TO MATURITY AS OF MAY 31, 1998
6 MONTHS AGO
YEARS 13.2 12.6
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 MAY 31, 1998
6 MONTHS AGO
YEARS 6.5 6.9
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF MAY 31, 1998 AS OF NOVEMBER 30, 1997
AAA 50.0%
AA, A 37.2%
BAA 9.0%
BA, B 0.0%
NON-RATED 2.0%
SHORT-TERM
INVESTMENTS 1.8%
AAA 46.6%
AA, A 35.4%
BAA 13.0%
BA, B 0.3%
NON-RATED 1.8%
SHORT-TERM
INVESTMENTS 2.9%
ROW: 1, COL: 1, VALUE: 50.0
ROW: 1, COL: 2, VALUE: 37.2
ROW: 1, COL: 3, VALUE: 9.0
ROW: 1, COL: 4, VALUE: 0.0
ROW: 1, COL: 5, VALUE: 2.0
ROW: 1, COL: 6, VALUE: 1.8
ROW: 1, COL: 1, VALUE: 45.9
ROW: 1, COL: 2, VALUE: 35.4
ROW: 1, COL: 3, VALUE: 13.0
ROW: 1, COL: 4, VALUE: 1.0
ROW: 1, COL: 5, VALUE: 1.8
ROW: 1, COL: 6, VALUE: 2.8
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL BONDS - 98.2%
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
ALABAMA - 0.3%
Alabama Bldg. Renovation Fin. Auth. Rev.
7.45% 9/1/11 A $ 3,000 $ 3,275
Mobile Wtr. & Swr. Commissioners Wtr. & Swr.
Rev. Rfdg. 6.50% 1/1/09 A 4,600 5,003
8,278
ALASKA - 2.3%
Alaska Student Loan Corp. Student Loan Rev.
Series A:
(State Assisted):
5.90% 7/1/03 (AMBAC Insured) (b) Aaa 1,070 1,123
6% 7/1/04 (AMBAC Insured) (b) Aaa 2,500 2,627
7.30% 7/1/00 (AMBAC Insured) (b) Aaa 4,600 4,899
5.55% 7/1/03 (AMBAC Insured) (b) Aaa 1,300 1,361
5.65% 7/1/04 (AMBAC Insured) (b) Aaa 1,300 1,371
5.15% 7/1/05 (AMBAC Insured) (b) Aaa 1,500 1,549
North Slope Borough Gen. Oblig.:
(Cap. Appreciation) Series A
0% 6/30/01 (MBIA Insured) Aaa 6,400 5,612
(Cap. Appreciation) Series B:
0% 1/1/02 (MBIA Insured) Aaa 16,000 13,687
0% 1/1/03 (MBIA Insured) Aaa 9,675 7,883
0% 6/30/05 (Cap. Guaranty Insured) Aaa 2,500 1,804
Series B, 7.50% 6/30/01 (FSA Insured) Aaa 2,000 2,190
Valdez Marine Term Rev. Rfdg. (BP Pipeline, Inc.
Proj.) Series B, 5.50% 10/1/28 Aa2 11,000 11,124
55,230
ARIZONA - 1.4%
Arizona Trans. Board (Hwy. Rev.) Sub Series A:
6.60% 7/1/08 (Pre-Refunded
to 7/1/01 @ 101.5) (h) Aaa 3,000 3,263
6.50% 7/1/11 (Pre-Refunded to
7/1/01 @ 101.5) (h) Aaa 4,500 4,882
Chandler Gen. Oblig.:
Rfdg. (Cap. Appreciation):
0% 7/1/05 (FGIC Insured) Aaa 5,700 4,179
0% 7/1/08 (FGIC Insured) Aaa 1,700 1,072
7.375% 7/1/09 (FGIC Insured) Aaa 1,000 1,249
Maricopa County Hosp. Rev. Rfdg.
(Sun Health Corp.) 5.40% 4/1/05 Baa1 2,435 2,500
Maricopa County Ind. Dev. Auth. Hosp. Facs.
Rev. Rfdg. (Samaritan Health Svcs.) Series A,
7% 12/1/16 (MBIA Insured) Aaa 2,000 2,507
Phoenix Gen. Oblig. Rfdg. 6% 7/1/02 Aa1 1,840 1,968
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
ARIZONA - CONTINUED
Pima County Ctfs. of Prtn.:
4.75% 1/1/04 (MBIA Insured) Aaa $ 2,060 $ 2,104
4.90% 1/1/06 (MBIA Insured) Aaa 2,000 2,056
Pima County Unified School Dist. #1 (Tucson Proj. of
1989) Series G, 8% 7/1/04 (MBIA Insured) Aaa 2,000 2,393
Tucson Ltd. Tax Rfdg. 7.50% 7/1/01 Aa3 2,525 2,772
Tucson Wtr. Rev. Series D:
9.75% 7/1/07 A1 500 693
9.75% 7/1/08 A1 500 707
9.75% 7/1/09 A1 750 1,080
33,425
ARKANSAS - 0.6%
Arkansas Dev. Fin. Auth. Rev. (Cap. Asset)
Series B, 7.10% 3/1/08 A 4,500 4,898
Arkansas State College Savings
(Cap. Appreciation) Series A:
0% 6/1/03 Aa3 1,280 1,034
0% 6/1/04 Aa3 1,110 855
North Little Rock Elec. Rev. Rfdg. Series A,
6.50% 7/1/10 (MBIA Insured) Aaa 3,840 4,458
Pulaski County Health Facs. Board Rev. Rfdg.
(Sisters Charity Nazareth-St. Vincents Infirmary)
6.05% 11/1/09 (MBIA Insured) Aaa 1,750 1,988
Rogers Sales & Use Tax Rev. 5% 11/1/15 A1 1,735 1,740
14,973
CALIFORNIA - 10.8%
California Dept. of Wtr. Resources Rev.
(Central Valley Proj.) Series 0, 5% 12/1/22 Aa2 4,000 3,901
California Edl. Facs. Auth. Rev.:
Rfdg. (Univ. of Southern California)
Series C, 5.125% 10/1/28 Aa3 4,410 4,367
(Stanford Univ.) Series N, 5.20% 12/1/27 Aaa 5,400 5,424
California Gen. Oblig.:
7% 8/1/04 A1 2,000 2,292
7% 3/1/06 A1 1,365 1,595
7% 10/1/06 A1 8,975 10,582
7% 10/1/09 A1 1,000 1,220
6.30% 9/1/10 A1 4,000 4,626
5.25% 10/1/13 A1 5,000 5,123
5.25% 10/1/17 A1 1,500 1,511
California Hsg. Fin. Agcy. Rev. (Home Mtg.
Single Family) (Cap. Appreciation)
Series 1983 A, 0% 2/1/15 Aa2 187 39
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Hsg. Fin. Agcy. Rev. (Home Mtg):
Rfdg. Series A:
5.30% 8/1/14 (MBIA Insured) Aaa $ 780 $ 784
5.70% 8/1/16 (MBIA Insured) Aaa 1,940 1,991
Series G:
5.90% 2/1/09 (MBIA Insured) (b) Aaa 1,000 1,070
5.90% 8/1/09 (MBIA Insured) (b) Aaa 2,000 2,140
Series R, 6.15% 8/1/27 (MBIA Insured) (b) Aaa 3,000 3,189
California Poll. Cont. Fing. Auth. Resource
Recovery Rev. (Waste Mgmt., Inc.) Series A,
7.15% 2/1/11 (b) Baa1 5,235 5,682
California Pub. Wks Board Lease Rev.:
Rfdg.:
(California Commty. Colleges) Series D:
5.375% 3/1/11 A 3,000 3,122
5.375% 3/1/12 A 1,500 1,549
(Dept. of Corrections State Prison,
Montery County Soledad II)
Series D, 5.375% 11/1/13 A2 2,500 2,587
(State Archives Bldg. Complex)
Series A, 5.375% 12/1/10 A2 5,000 5,258
(Commty. College Proj.) Series A, 6% 10/1/14 A 5,000 5,397
(Dept. of Corrections State Prison - Susanville)
Series D, 5.375% 6/1/18 A2 1,500 1,519
(Library & Courts Annex Bldg.)
Series A, 6% 5/1/13 A2 3,500 3,842
(Various California Univ. Proj.)
Series A, 5.25% 12/1/13 A2 3,750 3,808
California Rural Home Mtg. Fin. Auth. Lease Rev.
(Rural Lease Purp.) Series A,
4.45% 8/1/01 (MBIA Insured) Aaa 9,000 9,124
California Statewide Commtys. Dev. Corp. Ctfs.
of Prtn. (J. Paul Getty Trust) 5% 10/1/23 Aaa 5,195 5,093
Castaic Lake Wtr. Agcy. Ctfs. of Prtn. Rfdg.
(Wtr. Sys. Impt. Proj.) Series A,
7.25% 8/1/09 (MBIA Insured) Aaa 1,800 2,219
Duarte Ctfs. of Prtn. (City of Hope Med. Ctr.)
6.25% 4/1/23 Baa1 15,750 16,614
Encinitas Union School Dist. (Cap. Appreciation):
0% 8/1/05 (MBIA Insured) Aaa 1,500 1,089
0% 8/1/06 (MBIA Insured) Aaa 1,000 691
0% 8/1/07 (MBIA Insured) Aaa 1,500 987
0% 8/1/08 (MBIA Insured) Aaa 1,250 782
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Long Beach Hbr. Rev.:
Rfdg. Series A, 6% 5/15/13 (FGIC Insured) Aaa $ 4,700 $ 5,248
8.50% 5/15/03 (MBIA Insured) (b) Aaa 6,235 7,377
8% 5/15/04 (MBIA Insured) (b) Aaa 6,305 7,485
6% 5/15/06 (MBIA Insured) (b) Aaa 3,000 3,296
5.125% 5/15/18 (b) Aa3 5,000 4,929
Los Angeles County Metropolitan
Trans. Auth. Rev. Rfdg.:
(Gen. Union Station) Series A,
5.20% 7/1/12 (FSA Insured) Aaa 4,355 4,480
(Sales Tax) 5.625% 7/1/13 (MBIA Insured) Aaa 3,380 3,579
Los Angeles County Pub. Wks. Fing. Auth. Lease
Rev. (Multiple Cap. Facs. Proj. #4)
4.75% 2/1/10 (MBIA Insured) Aaa 6,000 6,053
Los Angeles County Trans. Commission Sales Tax
Rev. (Proposition C) Series A, 6.75% 7/1/19
(Pre-Refunded to 7/1/02 @ 102) (h) Aaa 10,000 11,175
Metropolitan Wtr. Dist. Southern California
Wtrwks. Rev. Series A,
5.75% 7/1/21 (MBIA Insured) Aaa 2,000 2,107
Northern California Pwr. Agcy. Pub. Pwr. Rev.
Rfdg. (Geothermal Proj. #3) Series A,
5.80% 7/1/09 (AMBAC Insured) Aaa 6,000 6,667
San Diego County Reg'l. Trans. Commission
Sales Tax Rev. Series A,
6.25% 4/1/02 (FGIC Insured) Aaa 1,100 1,181
San Francisco Bldg. Auth. Lease Rev. (Dept.
Gen. Svcs. Lease) Series A, 5% 10/1/13 A 5,500 5,534
San Francisco City & County Arpt. Commission
Int'l. Arpt. Rev. 2nd Series:
Rfdg. Issue 1, 6.20% 5/1/05
(AMBAC Insured) Aaa 2,330 2,528
Issue 10A:
5.50% 5/1/13 (MBIA Insured) (b) Aaa 5,955 6,168
5.55% 5/1/14 (MBIA Insured) (b) Aaa 5,875 6,085
San Francisco City & County Swr. Rev. Rfdg.
5.90% 10/1/08 (AMBAC Insured) Aaa 10,000 10,803
San Jaoquin Hills Trans. Corridor Agcy. Toll Road
Rev. Rfdg. Series A,
0% 1/15/02 (Cap. Appreciation) Baa3 8,000 6,837
Santa Margarita/Dana Point Auth. Rev. Rfdg.
(Impt. Dist. 3&3A, 4&4A) Series B,
7.25% 8/1/08 (MBIA Insured) Aaa 1,770 2,166
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Santa Rosa Wastewtr. Rev. Rfdg. & Sub-Reg'l.
Wastewtr. Proj. Series A,
4.75% 9/1/16 (FGIC Insured) Aaa $ 4,000 $ 3,843
South Orange County Pub. Fing. Auth. Spl. Tax Rev.:
Rfdg. Series A, 7% 9/1/11 (MBIA Insured) Aaa 3,490 4,290
(Foothill Area) Series C:
7.50% 8/15/07 (FGIC Insured) Aaa 2,500 3,074
8% 8/15/08 (FGIC Insured) Aaa 2,500 3,213
Southern California Pub. Pwr. Auth.
Pwr. Proj. Rev. Rfdg. Series A:
(Mead Adelanto Proj.)
4.875% 7/1/20 (AMBAC Insured) Aaa 1,500 1,446
(Mead Phoenix Proj.)
4.875% 7/1/20 (AMBAC Insured) Aaa 4,640 4,473
(Palo Verde Proj.) 5% 7/1/02 (FSA Insured) Aaa 7,145 7,351
West & Central Basin Fin. Auth. Rev. Rfdg.
Series C, 5.25% 8/1/08 (AMBAC Insured) Aaa 6,100 6,392
256,997
COLORADO - 4.5%
Arapaho County Cap. Impt. Trust Fed. Hwy. Rev.
(Cap. Appreciation):
Series C, 0% 8/31/15
(Pre-Refunded to 8/31/05 @ 48.618) (h) Aaa 10,400 3,663
Series E, 0%, 8/31/26
(Pre-Refunded to 8/31/05 @ 20.863) (h) Aaa 170,700 25,795
Aurora Gen. Oblig. Rfdg. 4.75% 11/1/14 A1 3,040 2,972
Colorado Health Facs. Auth. Rev.
Rfdg. (Rocky Mountain Adventist):
6.25% 2/1/04 Baa2 2,500 2,649
6.625% 2/1/13 Baa2 6,500 6,967
6.625% 2/1/22 Baa2 4,700 5,038
Colorado Health Facs. Auth. Hosp. Sys. Rev.
(Swedish Med. Ctr.) Series A, 7.25% 10/1/08
(Pre-Refunded to 10/1/00 @ 102) (h) Aaa 1,000 1,091
Colorado Springs Arpt. Rev.
(Cap. Appreciation) Series C:
0% 1/1/02 (MBIA Insured) Aaa 1,550 1,336
0% 1/1/09 (MBIA Insured) Aaa 1,655 1,018
0% 1/1/10 (MBIA Insured) Aaa 1,500 871
0% 1/1/04 (MBIA Insured) Aaa 1,530 1,203
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
COLORADO - CONTINUED
Denver City & County Arpt. Rev.:
Rfdg. Series D, 5% 11/15/98 (b) Baa1 $ 6,700 $ 6,732
(Cap. Appreciation) Series A:
0% 11/15/02 (MBIA Insured) (b) Aaa 4,900 4,035
0% 11/15/05 (MBIA Insured) (b) Aaa 3,000 2,133
(Cap. Appreciation) Series D:
0% 10/15/03 (MBIA Insured) (b) Aaa 5,000 3,921
0% 11/15/04 (MBIA Insured) (b) Aaa 7,500 5,609
0% 11/15/05 (MBIA Insured) (b) Aaa 3,000 2,133
Series A:
6.90% 11/15/98 (b) Baa1 7,250 7,344
7% 11/15/99 (b) Baa1 3,000 3,116
Series B, 7.25% 11/15/23 (b) Baa1 1,870 2,078
Series D:
7% 11/15/25 (b) Baa1 6,980 7,479
7% 11/15/25 (Pre-Refunded
to 11/15/01 @ 100) (b)(h) Aaa 520 566
Jefferson County Ctfs. of Prtn. Rfdg.
6.65% 12/1/08 (MBIA Insured) Aaa 3,000 3,319
Univ. Of Colorado Rev. Revolving Fund
(Biomedical Research Bldg. Proj.)
7% 6/1/09 A2 5,725 6,415
107,483
CONNECTICUT - 0.3%
Connecticut Health & Edl. Facs. Auth. Rev.:
Rfdg. (Quinnipiac College)
Series D, 6% 7/1/13 BBB- 250 257
(New Britain Mem. Hosp.) Series A, 7.50%
7/1/06 (Pre-Refunded to 7/1/02 @ 102) (h) - 4,345 4,775
(St. Raphael Hosp.) 5.30% 7/1/10
(AMBAC Insured) Aaa 2,990 3,175
8,207
DISTRICT OF COLUMBIA - 2.3%
District of Columbia Gen. Oblig.:
Rfdg.:
Series A, 5.875% 6/1/05
(AMBAC Insured) Aaa 2,635 2,837
Series A-1, 6% 6/1/11 (MBIA Insured)
(Escrowed to Maturity) (h) Aaa 2,000 2,219
Series B, 5% 6/1/06 (MBIA Insured) Aaa 12,225 12,526
Series A, 5% 6/1/06 (MBIA Insured) Aaa 7,400 7,582
District of Columbia Hosp. Rev. (Hosp. for
Sick Children) Series A, 8.875% 1/1/21 - 8,985 9,788
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
DISTRICT OF COLUMBIA - CONTINUED
District of Columbia Redev. Land Agcy.
(Washington D.C. Sports Arena) Spl. Tax Rev.:
5.40% 11/1/00 Baa $ 1,000 $ 1,022
5.625% 11/1/10 Baa 5,200 5,307
District of Columbia Rev. Rfdg. (Georgetown Univ.)
Series A, 6% 4/1/18 (MBIA Insured) Aaa 8,335 9,007
Metropolitan Arpt. Auth. Gen. Arpt.
Rev. Series A, 7.25% 10/1/10
(FGIC Insured) (b) Aaa 3,000 3,247
53,535
FLORIDA - 3.7%
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.)
7.95% 12/1/08 A3 12,120 13,072
Dade County Aviation Rev. (Miami International
Arpt.) Series B, 6% 10/1/24 (MBIA Insured) Aaa 3,750 4,061
Dade County Florida School Dist. Rev.
5.50% 8/1/12 (MBIA Insured) Aaa 8,000 8,410
Florida Division Fin. Dept. Gen. Svcs. Rev.
(Dept. of Natural Resources-Preservation 2000)
Series A, 6.25% 7/1/10 (MBIA Insured)
(Pre-Refunded to 7/1/02 @ 101) (h) Aaa 4,750 5,170
Florida Muni. Pwr. Agcy. Rev. Rfdg.
(Stanton II Proj.) 4.50% 10/1/16
(AMBAC Insured) Aaa 3,000 2,800
Florida Muni. Bonds (Jacksonville Trans.)
5% 7/1/11 Aa2 4,355 4,457
Jacksonville Elec. Auth. Rev.:
6% 7/1/01 (Escrowed to Maturity) (h) Aaa 4,145 4,270
Series 73, 6.80% 7/1/12
(Escrowed to Maturity) (h) Aaa 3,000 3,452
Jacksonville Health Facs. Auth. Ind. Dev. Rev.
Rfdg. (Cypress Village Proj.)
(Nat'l. Benevolent Assoc.) 7% 12/1/22 Baa1 2,000 2,209
Jacksonville Port Auth. Rev. Rfdg. (Port Facs.)
5.75% 11/1/09 (MBIA Insured) (b) Aaa 1,000 1,093
Lakeland Elec. & Wtr. Rev. Rfdg.
6.50% 10/1/05 (FGIC Insured) Aaa 5,000 5,675
Orange County Tourist Dev. Tax Rev. Rfdg.
Series A, 6.50% 10/1/10 (AMBAC Insured) Aaa 5,000 5,542
Orlando Util. Commission Wtr. & Elec. Rev.
Series B, 5.25% 10/1/23 Aa2 5,465 5,487
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Pasco County Solid Waste Disp. & Resource
Recovery Sys. Rev.:
6% 4/1/08 (AMBAC Insured) (b) Aaa $ 5,000 $ 5,517
6% 4/1/09 (AMBAC Insured) (b) Aaa 5,090 5,658
Tampa Cap. Impt. Prog. Rev. Series A,
8.25% 10/1/18 AA 10,000 10,126
86,999
GEORGIA - 0.6%
Atlanta Downtown Dev. Auth. Rev. Rfdg.
(Underground Atlanta Proj.):
6.25% 10/1/12 Aa3 2,500 2,691
6.25% 10/1/16 Aa3 3,000 3,214
Fulton County School Dist. Rfdg.
6.375% 5/1/14 Aa3 2,000 2,352
Georgia Gen. Oblig. Impt. Series B:
6.10% 3/1/05 Aaa 2,000 2,207
7.20% 3/1/05 Aaa 3,000 3,494
13,958
HAWAII - 0.7%
Hawaii Arpts. Sys. Rev. 2nd Series,
7.50% 7/1/20 (FGIC Insured) (b) Aaa 1,500 1,615
Hawaii Gen. Oblig. Series CM,
5.50% 12/1/02 (FGIC Insured) Aaa 2,625 2,769
Hawaii Hsg. Fin. & Dev. Corp. Single
Family Mtg. Rev. Series A,
4.90% 7/1/28 (b) AA1 3,500 3,538
Honolulu City and County Rfdg. Series C,
5.50% 11/01/04 (FGIC Insured) Aaa 7,135 7,614
15,536
IDAHO - 0.3%
Boise Urban Renewal Parking Agcy. Rev.
(Tax Increment) Series A, B, C,
8.125% 9/1/15 BBB+ 2,600 2,647
Idaho Falls Rfdg. Elec.:
0% 4/1/06 (FGIC Insured) Aaa 2,000 1,419
0% 4/1/07 (FGIC Insured) Aaa 2,500 1,691
0% 4/1/13 (FGIC Insured) Aaa 1,500 729
6,486
ILLINOIS - 5.6%
Chicago Board of Ed. (Chicago School Reform):
6.25% 12/1/11 (MBIA Insured) Aaa 1,000 1,148
5.75% 12/1/27 (AMBAC Insured) Aaa 10,000 10,573
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
ILLINOIS - CONTINUED
Chicago Gen. Oblig. Rfdg. Series B:
5% 1/1/11 (AMBAC Insured) Aaa $ 2,200 $ 2,240
5.125% 1/1/15 (AMBAC Insured) Aaa 2,250 2,294
Chicago Midway Arpt. Rev. Series B:
6% 1/1/08 (MBIA Insured) (b) Aaa 2,170 2,373
6% 1/1/10 (MBIA Insured) (b) Aaa 2,435 2,650
6.125% 1/1/11 (MBIA Insured) (b) Aaa 2,580 2,830
5.25% 1/1/13 (MBIA Insured) (b) Aaa 2,910 2,949
5.25% 1/1/14 (MBIA Insured) (b) Aaa 3,060 3,091
Chicago Motor Fuel Tax Rev. Rfdg. Series A,
5.375% 1/1/14 (AMBAC Insured) Aaa 4,000 4,218
Chicago O'Hare Int'l. Arpt. Rev. Rfdg.
(Gen. Arpt. Proj.) Series A:
6.375% 1/1/15 (MBIA Insured) Aaa 8,200 9,025
5.50% 1/1/16 (AMBAC Insured) (b) Aaa 10,000 10,220
Chicago O'Hare Int'l. Arpt. Spl. Facs. Rev.:
Rfdg. (Int'l. Term.) Series A, 7.50%1/1/17 (b) A 4,500 4,770
(United Airlines, Inc.) 8.25% 5/1/99 (b) Baa2 1,025 1,056
Chicago Park Dist. Rfdg.
6.25% 1/1/09 (FGIC Insured) Aaa 3,000 3,412
Chicago Residential Mtg. Rev. Rfdg. (Cap.
Appreciation) Series B, 0% 10/1/09
(MBIA Insured) Aaa 4,120 1,884
Chicago Wtr. Rev. 0% 11/1/01 (FGIC Insured) Aaa 1,960 1,699
DeKalb Single Family Mtg. Rev.
7.45% 12/1/09 (GNMA Coll.) (b) Aaa 1,365 1,504
Illinois Health Facs. Auth. Rev.:
Rfdg.:
(Lutheran Gen. Health Care Sys.) Series C:
7% 4/1/14 A1 1,500 1,799
6% 4/1/18 A1 3,000 3,256
(OSF Healthcare Sys.) 6% 11/15/13 A1 5,000 5,343
(Memorial Hosp.) 6.875% 5/1/00
(Escrowed to Maturity) (h) - 600 618
(Memorial Hosp.) 7.125% 5/1/10
(Pre-Refunded to 5/1/02 @ 102) (h) - 4,000 4,486
Lake County Forest Preserve Dist. Unltd. Tax:
(Cap. Appreciation) 0% 12/1/07 Aa2 10,440 6,766
(Cap. Appreciation) 0% 12/1/08 Aa2 12,505 7,703
Metropolitan Pier & Exposition Auth. Dedicated
Tax Rev. (McCormick Place Expansion Proj.):
Rfdg. Series A, 5.25% 12/15/10 Aaa 7,450 7,770
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
ILLINOIS - CONTINUED
Metropolitan Pier & Exposition Auth. Dedicated
Tax Rev. (McCormick Place Expansion Proj.): - continued
(Cap. Appreciation) Series A:
0% 6/15/09 (FGIC Insured) Aaa $ 12,175 $ 7,269
0% 6/15/10 (FGIC Insured) Aaa 8,900 5,012
0% 6/15/12 (FGIC Insured)
(Pre-Refunded to 6/15/03 @ 102) (h) Aaa 11,570 10,177
0% 6/15/12 (FGIC Insured) Aaa 250 213
0% 6/15/00 (AMBAC Insured) Aaa 2,700 2,489
Univ. of Northern Illinois Auxiliary Facs. Sys.
Rev. Rfdg. 6% 4/1/02 (FGIC Insured) Aaa 1,000 1,058
131,895
INDIANA - 0.2%
Indiana Health Facs. Fing. Auth. Hosp. Rev. Rfdg.
(Columbus Reg'l. Hosp.) 7% 8/15/15
(FSA Insured) Aaa 500 612
Indianapolis Econ. Dev. Rev. Rfdg. & Impt.
(Nat'l. Benevolent Assoc.) 7.625% 10/1/22 Baa1 3,000 3,352
3,964
KANSAS - 0.6%
Johnson County Unified School Dist. #512
(Shawnee Mission):
8% 10/1/03 AA1 1,015 1,196
8% 10/1/04 AA1 1,225 1,476
8% 10/1/05 AA1 1,250 1,536
Kansas City Util. Sys. Rev. (Cap. Appreciation):
0% 9/1/10 (AMBAC Insured) Aaa 2,865 1,607
0% 9/1/10 (AMBAC Insured)
(Escrowed to Maturity) (h) Aaa 3,825 2,153
Kansas Dept. Trans. Hwy. Rev.
7.25% 3/1/05 Aa 4,750 5,580
13,548
KENTUCKY - 0.8%
Jefferson County Cap. Projs. Corp. Rev.
(Muni. Multiple Rfdg. Lease)
Series A, 0% 8/15/11 A1 5,250 2,740
Kentucky Tpk. Auth. Econ. Dev. Road Rev. Rfdg.
(Revitalization) (Cap. Appreciation)
0% 1/1/02 (FGIC Insured) Aaa 7,760 6,687
Owensboro Elec. Lt. & Pwr. Rev. Series B:
Rfdg. 0% 1/1/08 (AMBAC Insured) Aaa 600 388
0% 1/1/07 (AMBAC Insured) Aaa 10,000 6,797
0% 1/1/10 (AMBAC Insured) Aaa 4,000 2,323
18,935
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
LOUISIANA - 0.6%
Louisiana Gen. Oblig. Series A,
6.75% 5/15/04 (MBIA Insured) Aaa $ 5,865 $ 6,611
Lousiana Offshore Term Auth. Series E, 7.60%
9/1/10 (Pre-Refunded 9/1/00 @ 102) (h) Baa1 1,205 1,317
Monroe-West Monroe Pub. Trust Fing. Auth. Mtg.
Rev. Rfdg. (Cap. Appreciation) Series C,
0% 8/20/14 Aa- 9,000 3,854
St. John Baptist Parish Sales Tax Dist. Rfdg.
Series 1989-ST, 7.80% 12/1/14 Baa 2,700 2,904
14,686
MARYLAND - 0.6%
Baltimore Consolidated Pub. Impt. Series A,
7.25% 10/15/05 (FGIC Insured) Aaa 3,100 3,664
Howard County Mtg. Rev. (Heartlands Elderly
Apts. Proj.) 8.875% 12/1/10
(MBIA Insured) (FHA Guaranteed) Aaa 250 268
Maryland Commmty. Dev. Admin. Dept. of
Hsg. & Commty. Dev. Rfdg.
Series B, 5.05% 9/1/19 (b) Aa2 2,500 2,543
Maryland Health & Higher Edl. Facs. Auth. Rev.
Rfdg. (John Hopkins Univ.):
5.25% 7/1/16 Aa2 3,000 3,050
5.25% 7/1/17 Aa2 3,000 3,036
Prince George's County Solid Waste Mgmt. Sys.
Rev. Rfdg. 5.25% 6/15/13 (FSA Insured) Aaa 1,500 1,530
14,091
MASSACHUSETTS - 8.0%
Boston Rev. Rfdg. (Boston City Hosp.) 7.15%
8/15/01 (FHA Guaranteed)
(Pre-Refunded to 8/15/00 @ 102) (h) Aaa 1,500 1,628
Massachusetts Bay Trans. Auth. Rfdg. (Gen.
Trans. Sys.) Series A, 5.50% 3/1/12 Aa3 5,000 5,369
Massachusetts Edl. Loan Auth. (Edl. Loan Rev.)
Issue E, Series B:
5.75% 7/1/05 (AMBAC Insured) (b) Aaa 2,690 2,882
5.85% 7/1/06 (AMBAC Insured) (b) Aaa 3,205 3,453
5.95% 7/1/07 (AMBAC Insured) (b) Aaa 3,470 3,737
6.05% 7/1/08 (AMBAC Insured) (b) Aaa 3,585 3,844
6.15% 7/1/10 (AMBAC Insured) (b) Aaa 1,440 1,535
6.25% 7/1/11 (AMBAC Insured) (b) Aaa 870 930
6.30% 7/1/12 (AMBAC Insured) (b) Aaa 875 932
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Gen. Oblig. Consolidated Loan:
Series A, 6% 6/1/11
(Pre-Refunded to 6/1/01 @ 100) (h) Aaa $ 1,400 $ 1,478
Series A, 5% 1/1/12 Aa3 4,000 4,035
Series C, 5.375% 9/1/14 (MBIA Insured) Aaa 12,000 12,439
Massachusetts Gen. Oblig. Rfdg. Series A:
6.25% 7/1/04 Aa3 6,000 6,646
5.50% 2/1/11 (MBIA Insured) Aaa 11,095 11,609
Massachusetts Health & Edl. Facs. Auth. Rev.:
Rfdg. (Baystate Med. Ctr.) Series D,
5% 7/1/12 (FGIC Insured) Aaa 3,000 3,004
Rfdg. (Harvard Univ.) Series P,
6.50% 11/1/03 Aaa 1,100 1,227
(New England Med. Ctr. Hosp.) Series G,
5.375% 7/1/24 (MBIA Insured) Aaa 2,000 2,018
Massachusetts Hsg. Fin. Agcy. Hsg. Rev. Rfdg.
Series A, 6.65% 7/1/19 (AMBAC Insured) (b) Aaa 1,910 2,096
Massachusetts Ind. Fin. Agcy. Rev.:
Rfdg. (Atlanticare Med. Ctr.) Series A,
10.125% 11/1/14 - 6,600 7,208
(Massachusetts Biomedical Research):
Series A-1, 7.10% 8/1/99 A1 225 232
(Cap. Appreciation) Series A-2:
0% 8/1/03 A1 23,300 18,657
0% 8/1/04 A1 5,000 3,825
0% 8/1/06 A1 26,800 18,500
0% 8/1/09 - 15,800 9,165
0% 8/1/10 - 11,000 6,005
Massachusetts Muni. Wholesale Elec. Co. Pwr.
Supply Sys. Rev. Rfdg. 5% 7/1/10
(AMBAC Insured) Aaa 3,000 3,043
Massachusetts Tpk. Auth. Metropolitan Hwy. Sys. Rev.:
Series A, 5.125% 1/1/23 (MBIA Insured) Aaa 2,500 2,488
Series A, 5% 1/1/27 (MBIA Insured) Aaa 7,000 6,794
Series B, 5.25% 1/1/17 (MBIA Insured) Aaa 9,500 9,572
Massachusetts Tpk. Auth. Western Tpk. Rev.
Series A, 5.55% 1/1/17 (MBIA Insured) Aaa 9,150 9,225
New England Ed. Loan Marketing Corp. Rev.
Rfdg. (Student Loan):
Series A, 5.70% 7/1/05 (b) A1 18,500 19,511
Series B, 5.40% 6/1/00 A1 2,500 2,556
Series G, 5% 8/1/00 A1 2,500 2,540
Series G, 5.20% 8/1/02 A1 2,000 2,056
190,239
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MICHIGAN - 0.9%
Detroit Convention Facs. Rev. Rfdg. (Cobo Hall
Expansion Proj.) 5.25% 9/30/12 A $ 3,000 $ 3,034
Michigan Hosp. Fin. Auth. Rev. Rfdg.
(Bay Med. Ctr.) Series A, 8.25% 7/1/12 A3 1,000 1,092
Michigan Hsg. Dev. Auth. Single Family Mtg.
Rev. Series A:
7.50% 6/1/15 AA+ 470 490
7.70% 12/1/16 AA+ 1,475 1,526
Michigan Univ. Rev. Rfdg. (Univ. Hosp. Proj.)
Series A, 5.75% 12/1/12 Aa2 7,750 8,094
Royal Oak Hosp. Fin. Auth. Hosp. Rev. Rfdg.
(William Beaumont Hosp.) 5.50% 1/1/14 Aa3 3,695 3,818
Western Townships Util. Auth. Swr. Disp. Sys.:
Ltd. Tax 8.20% 1/1/18 BBB+ 2,000 2,087
Rfdg. (Cap. Appreciation)
0% 1/1/05 (FSA Insured) Aaa 2,810 2,104
22,245
MINNESOTA - 1.7%
Centennial Independant School Dist. #12 Rfdg.
Series B, 4.875% 2/1/12 (FGIC Insured) Aaa 2,610 2,615
Maplewood Health Care Facs. Rev.
(Healtheast Proj.) 5.80% 11/15/03 Baa3 1,000 1,052
Minneapolis & St. Paul Hsg. & Redev. Auth.
Health Care Sys. Rev. Rfdg.
(Healthspan Health Sys. Corp.) Series A,
4.75% 11/15/18 (AMBAC Insured) Aaa 6,600 6,349
Minneapolis Gen. Oblig. (Cap. Appreciation)
Series B, 0% 12/1/03 Aaa 1,175 934
Minnesota Hsg. Fin. Agcy. (Single Family Mtg.)
Series B, 5.80% 7/1/25 (b) Aa2 5,750 5,893
Minnesota Univ. Rfdg. 4.80% 8/15/03 Aa2 10,000 10,289
Northern Muni. Pwr. Agcy. Elec. Sys. Rev. Rfdg.
Series A, 7.25% 1/1/16 A2 1,700 1,767
Rochester Health Care Facs. Rev. Rfdg.
(Mayo Foundation/Mayo Med. Ctr.):
Series I, 5.90% 11/15/09 AA+ 2,000 2,216
Series I, 5.90% 11/15/10 AA+ 2,250 2,486
Western Minnesota Muni. Pwr. Agncy. Pwr.
Supply Rev. Rfdg. Series A,
5.50% 1/1/12 (AMBAC Insured) Aaa 1,750 1,870
Western Muni. Pwr. Agcy. Wtr. Supply Rev. Rfdg.
Series A, 5.50% 1/1/11 (AMBAC Insured) Aaa 3,525 3,747
39,218
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MISSISSIPPI - 0.2%
Hinds County Ctfs. of Prtn. (Hinds County
Welfare Dept. Proj.) 7.75% 3/1/09
(Pre-Refunded to 3/1/99 @ 102) (h) - $ 1,095 $ 1,147
Hinds County Rev. Rfdg. (Mississipi Methodist
Hosp. & Rehabilitation)
5.60% 5/1/12 (AMBAC Insured) Aaa 4,000 4,330
Mississippi Home Corp. Single Family Rev. Rfdg.
Series 1990-A, 9.25% 3/1/12 (FGIC Insured) Aaa 225 241
5,718
MONTANA - 0.7%
Montana Board of Investment Payroll Tax
(Workers Compensation):
Series 1991, 6.875% 6/1/11
(MBIA Insured) (Escrowed to Maturity) (h) Aaa 6,200 6,759
6.875% 6/1/20 (MBIA Insured)
(Escrowed to Maturity) (h) Aaa 7,130 7,771
Montana Coal Severance Tax Rfdg. (Broadwater
Pwr. Proj.) Series A, 6.875% 12/1/11 (b) A1 2,000 2,104
16,634
NEBRASKA - 0.8%
Douglas County Hosp. Auth. #1
Rev. Rfdg. (Immanuel Med. Ctr., Inc.)
6.90% 9/1/11(AMBAC Insured)
(Pre-Refunded to 9/1/01 @ 102) (h) Aaa 3,250 3,586
Nebraska Pub. Pwr. Dist. Rev. Rfdg.
(Pwr. Supply Sys.):
Series B, 5.25% 1/1/13 (MBIA Insured) Aaa 6,065 6,168
Series C, 5% 1/1/10 (MBIA Insured) Aaa 5,880 5,999
Scotts Bluff County Hosp. Auth. #1 Hosp. Rev.
Rfdg. (Reg'l. West Med. Ctr. Proj.)
6.45% 12/15/04 A3 3,000 3,258
19,011
NEW JERSEY - 1.6%
New Jersey Transit Corp. Series A,
5.40% 9/1/02 (FSA Insured) Aaa 1,345 1,400
New Jersey Trans. Trust Fund Auth.:
Rfdg. (Trans. Sys.) Series B, 6.50%
6/15/10 (MBIA Insured) Aaa 3,000 3,531
Series B, 5% 6/15/13 (AMBAC Insured) Aaa 26,055 26,375
New Jersey Wastewtr. Treatment Trust Ref.
Series C, 6.25% 5/15/04 (MBIA Insured) Aaa 3,475 3,840
Passaic County Util. Auth. Solid Waste Disp.
Rev. Rfdg. (Cap. Appreciation)
0% 3/1/01 (MBIA Insured) Aaa 3,580 3,200
38,346
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW MEXICO - 0.7%
Albuquerque Arpt. Rev.:
Rfdg.:
6.25% 7/1/03 (AMBAC Insured) (b) Aaa $ 1,100 $ 1,191
6.75% 7/1/10 (AMBAC Insured) (b) Aaa 1,700 2,002
6.75% 7/1/12 (AMBAC Insured) (b) Aaa 1,935 2,296
Series A, 6.60% 7/1/16 (AMBAC Insured) Aaa 2,375 2,583
New Mexico Edl. Assistance Foundation Student
Loan Rev. Series B, 5.25% 4/1/05
(AMBAC Insured) (b) Aaa 4,105 4,203
New Mexico Univ. Rev. Rfdg. Series A,
6% 6/1/21 A1 3,400 3,832
16,107
NEW YORK - 17.7%
Long Island Pwr. Auth. Elec. & Gas Sys. Rev.:
Series A, 5.25% 12/1/26 Baa1 3,850 3,800
Series A, 5.50% 12/1/29 Baa1 13,000 13,120
Metropolitan Trans. Auth. Facs.:
Commuter Facs. Rev.
Series A:
6% 7/1/16 (FGIC Insured) Aaa 2,000 2,185
6% 7/1/21 (FGIC Insured) Aaa 2,890 3,137
5.625% 7/1/27 (MBIA Insured) Aaa 5,000 5,235
Svc. Contract Commuter Facs. Series O:
5.75% 7/1/08 Baa1 1,000 1,076
5.75% 7/1/13 Baa1 7,650 8,251
Svc. Contract Trans. Facs. Rev.:
Series O:
5.625% 7/1/05 Baa1 7,595 8,037
5.75% 7/1/08 Baa1 3,840 4,130
Series Q, 5.125% 7/1/13 (AMBAC Insured) Aaa 4,000 4,071
Transit Facs. Rev. Series A,
5.75% 7/1/21 (MBIA Insured) Aaa 3,430 3,627
Nassau County Gen. Impt. Rev. Series Y,
4.90% 3/1/02 (FGIC Insured) Aaa 4,500 4,616
New York City Gen. Oblig.:
Rfdg.:
Series A, 7% 8/1/03 A3 2,000 2,232
Series B, 5.50% 8/15/01
(Escrowed to Maturity) (h) Aaa 5 5
Series B, 5.70% 8/15/02 A3 2,000 2,102
Series E, 5.40% 2/15/03 A3 10,285 10,713
Series H, 7.875% 8/1/00 A3 4,940 5,308
Series H, 5.40% 8/1/04 A3 3,880 4,076
Series A, 6.375% 8/1/05
(Pre-Refunded to 8/1/02 @ 101.5) (h) A3 1,590 1,744
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW YORK - CONTINUED
New York City Gen. Oblig.: - continued
Series A, 6.375% 8/1/05 A3 $ 3,410 $ 3,691
Series A, 7.75% 8/17/07 A3 250 278
Series A, 6% 8/1/18 (FSA Insured)
(Escrowed to Maturity) (h) Aaa 4,900 4,914
Series B, 5.5% 8/15/01 A3 395 409
Series B, 7.50% 2/1/02 A3 10,000 11,044
Series B, 7.50% 2/1/03 A3 5,000 5,577
Series B, 7.50% 2/1/04 A3 1,500 1,670
Series C, 6.40% 8/1/03 A3 4,120 4,480
Series C, 6.50% 8/1/07 (Pre-Refunded to
8/1/02 @ 101.5) (h) A3 525 578
Series C, 6.50% 8/1/07 A3 2,475 2,690
Series F, 8.10% 11/15/99 A3 330 349
Series F, 8.10% 11/15/99
(Escrowed to Maturity) (h) Aaa 95 101
Series F, 6.10% 2/15/02
(Escrowed to Maturity) (h) Aaa 2,490 2,659
Series G, 5.40% 2/1/01 A3 3,000 3,083
Series G, 5.60% 2/1/02 A3 12,595 13,109
Series H, 6.90% 2/1/01
(Escrowed to Maturity) (h) Aaa 1,640 1,759
Series H, 6.90% 2/1/01 A3 245 261
Series H, 5.50% 8/1/01
(Escrowed to Maturity) (h) A3 100 104
Series H, 5.50% 8/1/01 A3 4,900 5,075
Series J, 6% 2/15/04 A3 3,000 3,231
New York City Muni. Assistance Corp. Rfdg.:
Series E, 6% 7/1/04 Aa2 18,750 20,477
Series J, 6% 7/1/04 Aa2 2,140 2,337
New York City Muni. Wtr. Fin. Auth.
Wtr. & Swr. Rev.:
Series B:
5.75% 6/15/26 (AMBAC Insured) Aaa 7,000 7,407
5.875% 6/15/26 A2 1,325 1,410
5.50% 6/15/27 (MBIA Insured) Aaa 23,600 24,417
5.75% 6/15/29 A2 20,000 21,179
New York City Trust Cultural Resources Rev.
(American Museum of Nat'l. History)
Series A, 5.65% 4/1/27 (MBIA Insured) Aaa 4,550 4,766
Transport Facs. Rev.:
Rfdg. Series K, 6.30% 7/1/06 (MBIA Insured) Aaa 3,500 3,941
Series A, 6.10% 7/1/21 (FSA Insured) Aaa 5,000 5,461
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW YORK - CONTINUED
New York State Dorm. Auth. Rev.:
Rfdg. (State Univ. Edl. Facs.):
Series A:
6.50% 5/15/04 A3 $ 3,000 $ 3,336
5.50% 5/15/08 A3 3,500 3,727
5.875% 5/15/11 A3 7,000 7,654
5.50% 5/15/13 A3 19,100 20,175
5.875% 5/15/17 A3 3,565 3,935
Series B:
5.25% 5/15/05 A3 1,000 1,048
5.25% 5/15/11 A3 8,000 8,271
(New York Univ.) Series A,
5.75% 7/1/27 (MBIA Insured) Aaa 10,000 11,064
(State Univ. Edl. Facs.) 5.75% 5/15/09 A3 2,465 2,637
(Suffolk County Judicial Facs.)
Series A, 9.50% 4/15/14 Baa1 7,000 8,034
New York State Envir. Facs. Corp. Poll. Cont.
Rev. Rfdg. (State Wtr. Revolving Fund)
(New York City Muni. Wtr.) Series A,
5.75% 6/15/12 Aa2 2,000 2,196
New York State Local Gov't. Assistance Corp.:
Rfdg. Series A, 5.375% 4/1/16 A3 11,000 11,189
Rfdg. Series C, 5.50% 4/1/17 A3 16,600 17,583
Rfdg. Series E, 6% 4/1/14 A3 8,335 9,345
(Cap. Appreciation) Series A, 0% 4/1/08 A3 2,000 1,274
(Cap. Appreciation) Series B, 0% 4/1/08 A3 5,000 3,185
Series B, 6% 4/1/18 A3 18,140 19,243
New York State Thruway Auth. Hwy. & Bridge
Trust Fund Series A,
6.25% 4/1/04 (MBIA Insured) Aaa 2,345 2,580
New York State Tollway Auth. Gen. Rev.
(Spl. Oblig.) (Cap. Appreciation) Series A,
0%1/1/05 BBB 8,500 6,096
New York State Urban Dev. Corp. Rev. Rfdg.
(State Facs.) 5.75% 4/1/11 Baa1 2,300 2,472
Niagara Falls Pub. Impt.
7.50% 3/1/18 (MBIA Insured) Aaa 500 655
Suffolk County Wtr. Auth. Waterwks. Rev. Rfdg.
5.10% 6/1/09 (MBIA Insured) Aaa 3,000 3,135
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
NEW YORK - CONTINUED
Triborough Bridge & Tunnel Auth. Rev.:
Rfdg.:
(Gen. Purp.) Series Y, 5.50% 1/1/17 Aa3 $ 10,100 $ 10,718
Series A, 5.125% 1/1/22 Aa3 2,075 2,068
Series A, 5.25% 1/1/28 Aa3 8,315 8,358
(Convention Ctr. Proj.) Series E, 7.25% 1/1/10 Baa1 2,325 2,778
(Gen. Purp.) Series A, 4.75% 1/1/19 Aa3 3,155 2,977
419,655
NORTH CAROLINA - 1.2%
North Carolina Eastern Muni. Pwr. Agcy.
Pwr. Sys. Rev.:
Rfdg.:
Series A, 6.25% 1/1/03 Baa1 2,000 2,129
Series C, 5.50% 1/1/07 Baa1 5,950 6,215
Series C, 7% 1/1/07 Baa1 5,000 5,744
Series B, 6% 1/1/05 Baa1 9,000 9,553
North Carolina Muni. Pwr. Agcy. #1 Catawba
Elec. Rev. 5.25% 1/1/09 (MBIA Insured) Aaa 4,655 4,900
28,541
NORTH DAKOTA - 0.4%
Mercer County Poll. Cont. Rev. Rfdg.:
(Antelope Valley Station/Basin Elec. Pwr. Cooper)
7.20% 6/30/13 (AMBAC Insured) Aaa 5,000 6,264
(Montana-Dakota Utils. Co. Proj.)
6.65% 6/1/22 (FGIC Insured) Aaa 3,750 4,112
10,376
OHIO - 1.6%
Bedford Hosp. Impt. Rev. Rfdg. (Bedford
Commty. Hosp.) Series 1990, 8.50% 5/15/09
(Pre-Refunded to 5/15/00 @ 102) (h) - 885 958
Euclid City School Dist. (Cap. Appreciation):
0% 12/1/02 (AMBAC Insured) Aaa 1,265 1,046
0% 12/1/03 (AMBAC Insured) Aaa 1,265 998
Ohio Bldg. Auth. State Facs. (Adult Correctional)
Series A, 5.95% 10/1/14 (MBIA Insured) Aaa 4,000 4,232
Ohio Bldg. Auth. Workers Compensation
(W. Green Bldg. A) 4.75% 4/1/14 A2 8,500 8,303
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Hsg. Fin. Agcy. Mtg. Rev.:
(Oakleaf-Toledo Apts. Proj.)
10.25% 12/20/25 (GNMA Coll.) Aa- $ 1,565 $ 1,796
Series B-3, 4.95% 9/1/20 (b) Aaa 7,000 7,121
Ohio Pub. Facs. Commission Higher Ed.
Capital Facs. Series II-B, 4.50% 11/1/01 Aa3 4,445 4,501
Ohio Tpk. Commission Tpk. Rev. Series A:
5.60% 2/15/12 (MBIA Insured) Aaa 1,250 1,320
5.70% 2/15/13 (MBIA Insured) Aaa 2,750 2,921
5.70% 2/15/17 (MBIA Insured) Aaa 5,000 5,276
38,472
OREGON - 0.4%
Oregon Health Hsg. Edl. & Cultural Facs. Auth.
Rev. Rfdg. (Lewis & Clark College) Series A:
6% 10/1/13 (MBIA Insured) Aaa 1,750 1,908
6.125% 10/1/24 (MBIA Insured) Aaa 1,000 1,097
Port Morrow Poll. Cont. Rev. Rfdg.
(Pacific Northwest) Series A:
8% 7/15/98 Aa- 155 156
8% 7/15/99 Aa- 175 183
8% 7/15/06 Aa- 385 435
8% 7/15/07 Aa- 430 486
8% 7/15/08 Aa- 480 542
8% 7/15/09 Aa- 540 610
8% 7/15/10 Aa- 605 683
8% 7/15/11 Aa- 385 435
Portland Swr. Sys. Rev.:
Rfdg. Series A, 5.25% 3/1/10 A1 2,000 2,058
Series A, 6.25% 6/1/15
(Pre-Refunded to 6/1/04 @ 101)(h) A1 1,875 2,091
10,684
PENNSYLVANIA - 3.6%
Allegheny County Hosp. Dev. Auth.
(Univ. of Pittsburg Med. Ctr.) Series B,
5.125% 7/1/22 (MBIA Insured) Aaa 15,040 14,846
Butler County Hosp. Auth. Hosp. Rev.
(North Hills Passavant Hosp.)
Series A, 6.80% 6/1/06
(FSA Insured) (Pre-Refunded
to 6/1/01 @ 102) (h) Aaa 5,000 5,473
Cumberland County Muni. Auth. Rev. Rfdg.
(1st. Mtg.-Carlisle Hosp. & Health)
6.80%11/15/23 Baa2 4,600 5,072
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Delaware County Ind. Dev. Auth. Rev. Rfdg.
(Resource Recovery Fac.) Series A,
6.10% 7/1/13 Baa1 $ 9,050 $ 9,781
Northumberland County Auth. Commonwealth
Lease Rev. (Correctional Facs.) (Cap.
Appreciation) 0% 10/15/13
(MBIA Insured) (Escrowed to Maturity) (h) Aaa 11,830 5,608
Pennsylvania Hsg. Fin. Agcy. Single Family Mtg.
Series 44C, 6.65% 10/1/21 (b) Aa 10,000 10,819
Philadelphia Hosp. & Higher Ed. Facs. Auth.
Hosp. Rev. Rfdg. (Pennsylvania Hosp.)
5.70% 7/1/01 Baa3 4,405 4,542
Philadelphia Muni. Auth. Rev. Rfdg.:
Lease Series D, 6% 7/15/03 Baa2 250 264
Series D, 6.125% 7/15/08 Baa2 4,000 4,258
Philadelphia Wtr. & Wastewtr. Rev.:
Rfdg. 5% 6/15/12 (FGIC Insured) Aaa 3,000 3,008
6.75% 8/1/04 (MBIA Insured) Aaa 2,000 2,261
6.75% 8/1/05 (MBIA Insured) Aaa 1,500 1,714
Pittsburgh Wtr. & Swr. Auth. Wtr. & Swr. Sys.
Rev. Rfdg. Series A:
(Cap. Appreciation) 0% 9/1/04
(FGIC Insured) (Escrowed to Maturity) (h) Aaa 3,900 2,972
4.75% 9/1/16 (FGIC Insured) Aaa 10,000 9,620
Wyoming Ind. Dev. Auth. Poll. Cont. Rev. Rfdg.
(Proctor & Gamble Paper Proj.)
5.55% 5/1/10 Aa2 4,300 4,629
84,867
PUERTO RICO - 0.5%
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Rev. Series A, 5% 7/1/38 Baa1 11,125 10,701
RHODE ISLAND - 0.1%
Rhode Island Depositors Econ. Protection Corp.
Spl. Oblig. Rfdg. Series A,
5.75% 8/1/12 (MBIA Insured) Aaa 2,645 2,938
SOUTH CAROLINA - 1.3%
Piedmont Muni. Pwr. Agcy. Elec. Rev. Rfdg.:
Series B, 5.25% 1/1/11 (MBIA Insured) Aaa 4,625 4,794
5.60% 1/1/09 (MBIA Insured)
(Escrowed to Maturity) (h) Aaa 2,295 2,505
5.60% 1/1/09 (MBIA Insured) Aaa 2,945 3,199
5.50% 1/1/10 (MBIA Insured)
(Escrowed to Maturity) (h) Aaa 1,135 1,225
5.50% 1/1/10 (MBIA Insured) Aaa 1,455 1,566
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
SOUTH CAROLINA - CONTINUED
South Carolina Ed. Assistance Auth. Rev.
(Student Loan) 6.625% 9/1/06 (b) Aa $ 8,775 $ 9,611
South Carolina Pub. Svc. Auth. Rev. Rfdg. Series A:
6.25% 2/1/06 (MBIA Insured) Aaa 3,665 4,095
6.50% 1/1/08 (MBIA Insured) Aaa 200 228
6.375% 7/1/21 (AMBAC Insured) Aaa 3,750 4,018
31,241
SOUTH DAKOTA - 0.1%
Spearfish School Dist. #40-2 Unltd. Tax
(Lawrence County) 7.30% 7/1/11
(Pre-Refunded to 7/1/01 @ 102) (h) A 1,500 1,664
TENNESSEE - 1.4%
Johnson City Elec. Rev.
5.15% 5/1/23 (MBIA Insured) Aaa 5,000 5,044
Memphis-Shelby County Arpt. Auth. Arpt. Rev.
Rfdg. Series A, 6.25% 2/15/11 (MBIA Insured) Aaa 1,415 1,605
Shelby County Gen. Oblig. Rev. Rfdg. Series A:
6.75% 4/1/04 Aa2 3,000 3,393
5% 3/1/20 Aa2 16,000 15,729
5.10% 3/1/22 Aa2 5,000 4,959
Tennessee Gen. Oblig. Series A, 7% 3/1/03 Aaa 2,355 2,640
33,370
TEXAS - 9.9%
Allen Independent School Dist. Rfdg.
(Cap. Appreciation):
0% 2/15/04 (PSF Guaranteed) Aaa 2,120 1,649
0% 2/15/05 (PSF Guaranteed) Aaa 2,120 1,568
Austin Gen. Oblig. Rfdg. (Pub. Impt.)
(Cap. Appreciation) Series B,
0% 9/1/98 (MBIA Insured) Aaa 2,000 1,982
Austin Independent School Dist.:
Rfdg. (Cap. Appreciation) 0% 8/1/02
(PSF Guaranteed) Aaa 2,100 1,758
School Bldg. 8.125% 8/1/01 (PSF Guaranteed)
(Escrowed to Maturity) (h) Aaa 500 561
Austin Util. Sys. Rev. Rfdg. (Cap. Appreciation):
Series A, 0% 11/15/01 (MBIA Insured) Aaa 4,000 3,468
0% 11/15/08 (MBIA Insured) Aaa 3,895 2,395
0% 11/15/09 (AMBAC Insured) Aaa 4,000 2,334
Cedar Hill Independent School Dist. Rfdg.
(Cap. Appreciation)
0% 8/15/09 (PSF Guaranteed) Aaa 1,575 918
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
TEXAS - CONTINUED
Conroe Independent School Dist. Rfdg.
(Cap. Appreciation):
0% 2/15/07 (PSF Guaranteed) Aaa $ 1,360 $ 912
0% 2/15/08 (PSF Guaranteed) Aaa 3,000 1,912
0% 2/15/10 (PSF Guaranteed) Aaa 1,805 1,030
0% 2/15/11 (PSF Guaranteed) Aaa 1,500 806
Corpus Christi Independent. School Dist. Rfdg.
(Cap. Appreciation):
0% 8/15/01 (PSF Guaranteed) Aaa 1,535 1,343
0% 8/15/02 (PSF Guaranteed) Aaa 2,165 1,810
Cypress-Fairbanks Independent School Dist.
Rfdg. Unltd. Tax (Cap. Appreciation):
Series A, 0% 2/15/12 (PSF Guaranteed) Aaa 5,000 2,525
0% 2/1/04 (PSF Guaranteed) Aaa 4,250 3,311
Dallas-Fort Worth Reg'l. Arpt. Rev. Rfdg.
(Joint Dallas/Fort Worth Int'l. Arpt.)
6.50% 11/1/05 (FGIC Insured) Aaa 2,295 2,603
Dallas Gen. Oblig.:
Rfdg. (Cap. Appreciation) 0% 2/15/03 Aaa 5,115 4,203
4.50% 2/15/14 Aaa 2,400 2,287
Dallas Hsg. Corp. Cap. Prog. Rev. Rfdg.
(Section 8 Assorted Projs.):
7.70% 8/1/05 Baa2 1,100 1,152
7.85% 8/1/13 Baa2 1,000 1,050
Dallas Independent School Dist. Rfdg. (Cap.
Appreciation) 0% 8/15/07 (PSF Guaranteed) Aaa 3,300 2,162
El Paso Int'l. Arpt. Rev. 5.12% 8/15/04
(FGIC Insured) (b) Aaa 1,000 1,033
El Paso Prop. Fin. Auth. Single Family Mtg. Rev.
Series A, 8.70% 12/1/18,
(GNMA Coll.) (b) Aaa 995 1,079
Garland Independent School Dist. Series A,
4% 2/15/17 Aaa 5,000 4,308
Grapevine-Colleyville Indpt. School Dist. Rfdg.
(Cap. Appreciation) 0% 8/15/06
(PSF Guaranteed) Aaa 2,580 1,777
Houston Independent. School Dist. Rfdg.
Series A, 0% 8/15/11 (PSF Guaranteed) Aaa 6,400 3,357
Irving Independent School Dist. (Cap. Appreciation)
0% 2/15/01 (PSF Guaranteed) Aaa 5,520 4,933
Katy Independent School Dist. Rfdg.:
Ltd. Tax (Cap. Appreciation) Series A,
0% 2/15/07 (PSF Guaranteed) Aaa 2,450 1,642
0% 8/15/11 (PSF Guaranteed) Aaa 4,170 2,187
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
TEXAS - CONTINUED
Leander Independant School Dist. Unltd. Tax
7.50% 8/15/08 (PSF Guaranteed) Aaa $ 300 $ 370
Lower Colorado River Auth. Rev. Rfdg.:
(Cap. Appreciation) 0% 1/1/09
(MBIA Insured) (Escrowed to Maturity) (h) Aaa 3,000 1,845
5.25% 1/1/05 Aa3 6,000 6,260
5.25% 1/1/15 (Escrowed to Maturity) (h) Aaa 6,000 6,277
Lower Neches Valley Auth. Ind. Dev. Corp.:
Envir. Rev. (Mobil Oil Refining Corp. Proj.)
6.35% 4/1/26 (b) Aa2 9,500 10,348
Swr. Facs. Rev. (Mobil Oil Refining Corp.Proj.)
6.40% 3/1/30 (b) Aa2 35,455 38,642
Midlothian Indpt. School Dist. Rfdg.
(Cap. Appreciation):
0% 2/15/07 (PSF Guaranteed) Aaa 1,935 1,297
0% 2/15/10 (PSF Guaranteed) Aaa 1,525 871
Port Dev. Corp. Ind. Dev. Rev. Rfdg.
(Cargill, Inc. Proj.) 7.70% 3/1/07 - 1,000 1,043
Round Rock Independent. School Dist.:
Rfdg. & School Bldg.
0% 8/15/10 (MBIA Insured) Aaa 5,000 2,787
Rfdg. 0% 2/15/01 (PSF Guaranteed) Aaa 2,000 1,787
Series A, 7.50% 8/1/03 (PSF Guaranteed) Aaa 1,300 1,490
6.50% 8/1/04 (PSF Guaranteed) Aaa 1,025 1,146
San Antonio Elec. & Gas Rev.:
Rfdg. (Cap. Appreciation):
Series A, 0% 2/1/05 (AMBAC Insured) Aaa 5,850 4,345
Series B, 0% 2/1/08 (FGIC Insured) Aaa 4,340 2,768
Series B, 0% 2/1/09 (FGIC Insured) Aaa 2,000 1,211
Rfdg. 5.25% 2/1/10 AA1 6,500 6,787
Series B, 6% 2/1/14 AA1 585 600
5.75% 2/1/11 AA1 12,010 12,604
San Antonio Indepenent School Dist. Rev.
5.125% 8/15/22 Aaa 5,500 5,474
San Antonio Wtr. Rev. (Cap. Appreciation)
0% 5/1/12 (AMBAC Insured)
(Pre-Refunded to 5/1/00 @ 42.652) (h) Aaa 5,500 2,171
Spring Branch Independent School Dist.:
Rfdg. (Cap. Appreciation):
0% 2/15/02 (PSF Guaranteed) Aaa 3,000 2,563
0% 2/1/05 Aaa 5,725 4,241
0% 2/1/06 (PSF Guaranteed) Aaa 5,710 4,029
4.875% 8/15/10 (PSF Guaranteed) Aaa 2,500 2,536
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
TEXAS - CONTINUED
Texarkana Health Facs. Dev. Corp. Hosp. Rev.
(Wadley Reg'l. Med. Ctr. Proj.)
7% 10/1/05 (MBIA Insured) Aaa $ 1,750 $ 1,890
Texas A&M Univ. Permament Univ. Fund Rfdg.
5.50% 7/1/04 Aaa 3,850 4,124
Texas College Student Loan Gen. Oblig.
5.80% 8/1/05 (b) Aa2 2,350 2,459
Texas Gen. Oblig.:
Rfdg. (Veterans Land) 7.40% 12/1/20 Aa2 2,500 2,725
Series B, 5.25% 10/1/13 Aa2 3,000 3,050
Texas Muni. Pwr. Agcy. Rev. Rfdg.
(Cap. Appreciation):
0% 9/1/04 (AMBAC Insured) Aaa 1,000 761
0% 9/1/05 (AMBAC Insured) Aaa 13,000 9,408
Texas Pub. Fin. Auth. Rfdg.:
(Cap. Appreciation) Series A,
0% 10/1/01 (AMBAC Insured) Aaa 9,420 8,200
(Cap. Appreciation) Series C, 6% 10/1/05 Aa2 4,000 4,410
Univ. of Texas (Univ. Fund Proj.)
5.25% 7/1/11 Aaa 7,080 7,335
Univ. of Texas Univ. Revs. Rfdg. (Fing. Sys.)
Series A:
6% 8/15/04 AA1 1,170 1,282
6% 8/15/05 AA1 1,000 1,103
Winters Wtrwks. & Swr. Sys. Rev. Rfdg.
8.50% 8/1/17 (Pre-Refunded to
8/1/03 @ 100) (h) - 500 598
234,892
UTAH - 2.3%
Intermountain Pwr. Agcy. Pwr. Supply Rev. Rfdg.:
(Cap. Appreciation) Series B,
0% 7/1/00 (MBIA Insured) Aaa 4,435 4,080
Series A, 6.50% 7/1/08 (AMBAC Insured) Aaa 3,100 3,583
Series A, 6.50% 7/1/11 (AMBAC Insured) Aaa 1,000 1,172
Series A, 6% 7/1/16 (AMBAC Insured) Aaa 5,000 5,465
Series B, 0% 7/1/01 (AMBAC Insured) Aaa 15,600 13,731
Series B, 5.75% 7/1/16 (MBIA Insured) Aaa 18,000 19,225
Series D, 5% 7/1/21 (MBIA Insured) Aaa 6,200 6,100
Series G, 0% 7/1/12 (Pre-Refunded to
1/1/03 @ 101) (f)(h) Aaa 1,660 1,797
Utah Hsg. Fin. Agcy. (Single Family Mtg.) Series G,
9.25% 7/1/19 (FHA Guaranteed) (b) AAA 355 374
55,527
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
VERMONT - 0.1%
Vermont Ind. Dev. Auth. Ind. Dev. Rev. (Radisson
Hotel) Series B-1, 7.75% 11/15/15 - $ 2,350 $ 2,564
VIRGINIA - 0.7%
Fairfax County Econ. Dev. Auth. Resource Recovery
Rev. (Ogden Martin Sys. Proj.) Series A,
7.75% 2/1/11 (b) A1 3,700 3,892
Lynchburg Ind. Dev. Auth. Hosp. Facs. 1st. Mtg.
Rev. Rfdg. (Central Health, Inc.)
8.125% 1/1/16 A1 3,000 3,069
Peninsula Ports Auth. Hosp. Facs. Rev. Rfdg.
(Whittaker Mem. Proj.)
8.70% 8/1/23 (FHA Guaranteed) Aa 1,500 1,535
Richmond Gen. Oblig. Rfdg. Series B,
5.50% 1/15/04 (FGIC Insured) Aaa 1,725 1,845
Richmond Redev. & Hsg. Auth. Mtg. Rev.
(Multi-Family Hsg. Pinebrook Proj.)
9.25% 10/1/20 (GNMA Coll.) Aaa 745 754
Virginia Beach Dev. Auth. Hosp. Facs. Rev.
(Virginia Beach Gen. Hosp. Proj.)
5.125% 2/15/18 (AMBAC Insured) Aaa 3,100 3,129
Virginia Hsg. Dev. Auth. Multi-Family Hsg.
Series I, 5.95% 5/1/09 (b) AA1 1,890 2,013
Virginia Resources Auth. Wtr. & Swr. Sys. Rev.
Series A, 7.70% 11/1/10 Aa 180 186
16,423
WASHINGTON - 4.5%
Douglas County Pub. Util. Dist. #1 Wells Hydroelec.
Rev. Rfdg. (Pacific Pwr. & Lt. Co.) Series A,
8.75% 9/1/18 A 1,395 1,790
Port Seattle Rev. Series B:
5.50% 9/1/09 (FGIC Insured) (b) Aaa 4,010 4,231
5.60% 9/1/10 (FGIC Insured) (b) Aaa 4,230 4,462
Washington Gen. Oblig.:
Rev. Rfdg. Series R-96B, 5.50% 7/1/01 AA1 5,000 5,203
Rev. Rfdg. Series R-96C, 6% 7/1/04 AA1 2,000 2,183
Series C, 6.50% 7/1/03 AA1 1,000 1,103
Series 1996-A, 6.75% 7/1/02 AA1 3,560 3,909
(Motor Vehicle Fuel Tax) Series B:
6.50% 9/1/03 AA1 4,635 5,126
7% 9/1/05 AA1 2,655 3,085
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
WASHINGTON - CONTINUED
Washington Pub. Pwr. Supply Sys. Rev. Rfdg.:
Nuclear Proj. #1 Rev. Series A, 7% 7/1/08 AA1 $ 500 $ 591
Nuclear Proj. #2:
Series A, 5% 7/1/01 AA1 6,000 6,125
Series A, 6% 7/1/05 (AMBAC Insured) Aaa 3,565 3,890
Series C, 0% 7/1/05 AA1 16,080 11,578
Series C, 0% 7/1/05 (MBIA Insured) Aaa 11,000 7,997
6.92% 7/1/10 (FGIC Insured) INFL (g) Aaa 7,500 8,051
5.40% 7/1/12 AA1 33,950 35,364
Nuclear Proj. #3 Rev. Rfdg.
Series B, 7.375% 7/1/04 AA1 1,000 1,080
105,768
WEST VIRGINIA - 1.0%
Marshall County Poll. Cont. Rev.
(Ohio Pwr. Co. - Kammer Proj.) Series B,
5.45% 7/1/14 (MBIA Insured) Aaa 22,650 23,387
WYOMING - 0.6%
Natrona County Hosp. Rev. (Wyoming Med.
Ctr. Proj.) 8.125% 9/15/10 (Pre-Refunded
to 9/15/00 @ 102) (h) A3 4,500 4,980
Wyoming Farm Loan Board Cap. Facs. Rev.:
0% 10/1/04 (Escrowed to Maturity) (h) Aa- 3,995 3,051
0% 10/1/05 (Escrowed to Maturity) (h) Aa- 3,995 2,903
0% 10/1/06 (Escrowed to Maturity) (h) Aa- 3,695 2,561
13,495
TOTAL MUNICIPAL BONDS
(Cost $2,186,371) 2,330,309
MUNICIPAL NOTES (A) - 0.2%
NEW YORK - 0.0%
Erie County Ind. Dev. Auth. Ind. Dev. Rev.
(The Holling Press, Inc.) Series 1989 F,
4.10%, LOC Marine Midland Bank,
VRDN (b) - 480 480
TEXAS - 0.2%
Gulf Coast Waste Disp. Auth. Poll. Cont. and
Solid Waste Rev. Rfdg. (Amoco Oil Co. Proj.)
4.15%, VRDN (b) VMIG 1 4,400 4,400
TOTAL MUNICIPAL NOTES
(Cost $4,880) 4,880
CASH EQUIVALENTS - 1.6%
SHARES VALUE (NOTE 1)
(000S)
Municipal Central Cash Fund
(Cost $36,861) (d)(e) 36,861,250 $ 36,861
TOTAL INVESTMENTS - 100%
(Cost $2,228,112) $2,372,050
FUTURES CONTRACTS
AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SOLD
260 Municipal Bond Contracts June 1998 $ 32,257 $ (455)
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.4%
SECURITY TYPE ABBREVIATIONS
INFL - Inverse Floating Rate Security
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(d) Information in this report regarding holdings by state and
security types do not reflect the holdings of the Municipal Central
Cash Fund. A listing of the Municipal Central Cash Fund's holdings as
of its most recent fiscal period end is available upon request.
(e) At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.89%. The yield refers to the income earned by
investing in the fund over the seven-day period, expressed as an
annual percentage.
(f) Debt obligation initially issued in zero coupon form which
converts to coupon form at a specified rate and date. The rate shown
is the rate at period end.
(g) Coupon is inversely indexed to a floating interest rate. The price
will be more volatile than the price of a comparable fixed rate
security. The rate shown is the rate at period end.
(h) Security collateralized by an amount sufficient to pay interest
and principal.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 84.6% AAA, AA, A 82.3%
Baa 8.6% BBB 9.4%
Ba 0.0% BB 0.3%
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 2.0%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investment in securities, is as follows:
General Obligation 27.8%
Electric Revenue 15.1
Transportation 11.7
Health Care 8.8
Escrowed/Pre-Refunded 7.1
Special Tax 6.9
Education 6.2
Water & Sewer 5.3
Others (individually less than 5%) 11.1
TOTAL 100.0%
INCOME TAX INFORMATION
At May 31, 1998, the aggregate cost of investment securities for
income tax purposes was $2,228,135,000. Net unrealized appreciation
aggregated $143,915,000, of which $144,262,000 related to appreciated
investment securities and $347,000 related to depreciated investment
securities.
At November 30, 1997, the fund had a capital loss carryforward of
approximately $15,508,000 of which $366,000, $533,000, and $14,609,000
will expire on November 30, 2000, 2001, and 2002, respectively. All of
the loss carryforward was acquired in the merger and is available to
offset future capital gains of the fund to the extent provided by
regulations (see Note 6 of Notes to Financial Statements)
At November 30, 1997, the fund was required to defer approximately
$11,660,000 of losses on futures contracts.
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
(EXCEPT PER-SHARE AMOUNT) MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $2,228,112) - $ 2,372,050
SEE ACCOMPANYING SCHEDULE
CASH 357
RECEIVABLE FOR INVESTMENTS SOLD 20,454
RECEIVABLE FOR FUND SHARES SOLD 1,132
INTEREST RECEIVABLE 33,002
OTHER RECEIVABLES 27
TOTAL ASSETS 2,427,022
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 8,254
PAYABLE FOR FUND SHARES REDEEMED 2,422
DISTRIBUTIONS PAYABLE 2,313
ACCRUED MANAGEMENT FEE 774
PAYABLE FOR DAILY VARIATION ON FUTURES CONTRACTS 49
OTHER PAYABLES AND ACCRUED EXPENSES 299
TOTAL LIABILITIES 14,111
NET ASSETS $ 2,412,911
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 2,315,036
ACCUMULATED UNDISTRIBUTED NET REALIZED (45,608)
GAIN (LOSS) ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 143,483
NET ASSETS, FOR 190,224 SHARES OUTSTANDING $ 2,412,911
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $12.68
SHARE ($2,412,911 (DIVIDED BY) 190,224 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INTEREST INCOME $ 63,782
EXPENSES
MANAGEMENT FEE $ 4,577
TRANSFER AGENT FEES 1,173
ACCOUNTING FEES AND EXPENSES 308
CUSTODIAN FEES AND EXPENSES 57
NON-INTERESTED TRUSTEES' COMPENSATION 5
REGISTRATION FEES 34
AUDIT 33
LEGAL 15
MISCELLANEOUS 4
TOTAL EXPENSES BEFORE REDUCTIONS 6,206
EXPENSE REDUCTIONS (11) 6,195
NET INTEREST INCOME 57,587
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (17,057)
FUTURES CONTRACTS (292) (17,349)
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 45,923
FUTURES CONTRACTS (455) 45,468
NET GAIN (LOSS) 28,119
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 85,706
FROM OPERATIONS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 57,587 $ 89,932
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) (17,349) 16,558
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 45,468 19,742
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 85,706 126,232
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (57,587) (93,623)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN (14,749) (4,382)
TOTAL DISTRIBUTIONS (72,336) (98,005)
SHARE TRANSACTIONS 259,849 273,883
NET PROCEEDS FROM SALES OF SHARES
NET ASSET VALUE OF SHARES ISSUED IN EXCHANGE FOR THE NET - 528,377
ASSETS OF SPARTAN MUNICIPAL INCOME FUND (NOTE 6)
REINVESTMENT OF DISTRIBUTIONS 55,098 74,006
COST OF SHARES REDEEMED (235,233) (422,033)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 79,714 454,233
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 93,084 482,460
NET ASSETS
BEGINNING OF PERIOD 2,319,827 1,837,367
END OF PERIOD $ 2,412,911 $ 2,319,827
OTHER INFORMATION
SHARES
SOLD 20,496 22,157
ISSUED IN EXCHANGE FOR THE SHARES OF SPARTAN MUNICIPAL - 42,203
INCOME FUND (NOTE 6)
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 4,346 5,982
REDEEMED (18,558) (34,228)
NET INCREASE (DECREASE) 6,284 36,114
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED NOVEMBER 30,
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 12.610 $ 12.430 $ 12.300 $ 11.040 $ 13.230 $ 12.720
BEGINNING OF
PERIOD
INCOME FROM INVEST- .307 .607 .648 C .677 .755 .764
MENT OPERATIONS
NET INTEREST
INCOME
NET REALIZED AND .150 .235 .109 1.260 (1.690) .700
UNREALIZED
GAIN (LOSS)
TOTAL FROM .457 .842 .757 1.937 (.935) 1.464
INVESTMENT
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INTEREST (.307) (.632) C (.623) (.677) (.755) (.764)
INCOME
FROM NET (.080) (.030) (.004) - (.500) (.190)
REALIZED GAIN
TOTAL DISTRIBUTIONS (.387) (.662) (.627) (.677) (1.255) (.954)
NET ASSET VALUE, $ 12.680 $ 12.610 $ 12.430 $ 12.300 $ 11.040 $ 13.230
END OF PERIOD
TOTAL RETURN B 3.66% 7.02% 6.39% 17.95% (7.74)% 11.92%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END $ 2,413 $ 2,320 $ 1,837 $ 1,801 $ 1,693 $ 2,128
OF PERIOD
(IN MILLIONS)
RATIO OF EXPENSES .52% A .55% .56% .57% .56% .56%
TO AVERAGE
NET ASSETS
RATIO OF NET INTEREST 4.86% A 4.92% 5.32% 5.69% 6.21% 5.85%
INCOME TO AVER-
AGE NET ASSETS
PORTFOLIO TURNOVER 32% A 31% D 53% 50% 48% 53%
RATE
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS
THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INTEREST INCOME PER SHARE IN
1996 REFLECTS A PAYMENT RECEIVED
FROM AN ISSUER IN BANKRUPTCY WHICH
WAS DISTRIBUTED IN 1997.
D THE PORTFOLIO TURNOVER RATE DOES NOT
INCLUDE THE ASSETS ACQUIRED IN THE MERGER.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1998 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Municipal Income Fund (the fund) is a fund of Fidelity Court
Street Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust. The
financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make
certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized
matrix system and/or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
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.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net interest income. Distributions from realized
gains, if any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for futures transactions, market discount, capital loss
carryforwards and losses deferred due to wash sales and futures. The
fund also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
in a subsequent period. Any taxable gain remaining at fiscal year end
is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the fund may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc., (formerly 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 earned by the fund are recorded as interest
income in the accompanying financial statements.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
fund may receive compensation for interest forgone in the purchase of
a when-issued security. With respect to purchase commitments, the 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, 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 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
2. OPERATING POLICIES -
CONTINUED
FUTURES CONTRACTS - CONTINUED
are valued at the settlement price established each day by the board
of trade or exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $412,870,000 and $372,750,000, respectively.
The market value of futures contracts opened and closed during the
period amounted to $186,694,000 and $154,918,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .1100% to .3700% for the
period. The annual individual fund fee rate is .25%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented
the above rates, as they resulted in the same or a lower management
fee. For the period, the management fee was equivalent to an
annualized rate of .39% of average net assets.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian and transfer and shareholder servicing agent for the fund.
UMB has entered into a sub-contract with Fidelity Service Company,
Inc. (FSC), an affiliate of FMR, under which FSC performs the
activities associated with the fund's transfer and shareholder
servicing agent and accounting functions. The fund pays account fees
and asset-based fees that vary according to account size and type of
account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is
based on the level of average net assets for the month plus
out-of-pocket expenses.
For the period, the transfer agent fees were equivalent to an
annualized rate of .10% of average net assets.
5. EXPENSE REDUCTIONS.
The fund has entered into an 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 fund's custodian and transfer agent fees were reduced
by $7,000 and $4,000, respectively, under these arrangements.
6. MERGER INFORMATION.
On October 23, 1997, Fidelity Municipal Income Fund (currently Spartan
Municipal Income Fund) acquired all of the assets and assumed all of
the liabilities of Spartan Municipal Income Fund. The acquisition,
which was approved by the shareholders of Spartan Municipal Income
Fund on October 6, 1997, was accomplished by an exchange of 42,203,000
shares of Fidelity Municipal Income Fund (currently Spartan Municipal
Income Fund) (each valued at $12.52) for the 49,566,000 shares then
outstanding (each valued at $10.66) of Spartan Municipal Income Fund.
Based on the opinion of fund counsel, the reorganization qualified as
a tax-free reorganization for federal income tax purposes with no gain
or loss recognized to the funds or their shareholders. Spartan
Municipal Income Fund's net assets, including $19,989,000 of
unrealized appreciation were combined with Fidelity Municipal Income
Fund (currently Spartan Municipal Income Fund) for total net assets
after the acquisition of $2,294,530,000.
7. PROPOSED REORGANIZATIONS
The Board of Trustees of the fund approved Agreements and Plans of
Reorganization ("Agreements") between the fund and Spartan Aggressive
Municipal Fund and Spartan Insured Municipal Income Fund ("Target
Funds") ("Reorganizations"). The Agreements provide for the transfer
of all of the assets and the assumption of all of the liabilities of
each Target Fund in exchange solely for the number of shares of the
fund
having the same aggregate net asset value as the outstanding shares of
each Target Fund as of the close of business of the New York Stock
Exchange on the day that the Reorganizations are effective. A
Reorganization can be consummated only if, among other things, it is
approved by the vote of a majority (as defined by the 1940 Act) of
outstanding voting securities of the Target Fund to which the
Reorganization relates. A Special Meeting of Shareholders ("Meeting")
of the Target Funds will be held on July 15, 1998 to vote on the
Agreements. A detailed description of the proposed transactions and
voting information has been sent to shareholders of the Target Funds
in May, 1998. If the Agreements are approved at the Meeting, the
Reorganizations are expected to become effective on or about August
20, 1998 for Spartan Aggressive Municipal Fund and August 27, 1998 for
Spartan Insured Municipal Income Fund.
The Board of Trustees of the fund has approved an Agreement and Plan
of Reorganization ("Agreement") between the fund and Fidelity Advisor
Municipal Bond Fund ("Reorganization"). The Agreement provides for the
transfer of all of the assets and the assumption of all of the
liabilities of Fidelity Advisor Municipal Bond Fund ("Advisor
Municipal Bond") in exchange solely for the number of shares of the
fund having the same relative net asset value as the outstanding
shares of Class A, Class T, Class B, Institutional Class, and Fidelity
Municipal Bond Fund (Initial Class) of Advisor Municipal Bond as of
the close of business of the New York Stock Exchange on the day that
the Reorganization is effective.
7. PROPOSED REORGANIZATIONS - CONTINUED
The Reorganization can be consummated only if, among other things, it
is approved by the vote of a majority (as defined by the 1940 Act) of
outstanding voting securities of Advisor Municipal Bond. A Special
Meeting of Shareholders ("Meeting") of Advisor Municipal Bond will be
held on August 3, 1998 to vote on the Agreement. A detailed
description of the proposed transactions and voting information will
be sent to shareholders of Advisor Municipal Bond in June, 1998. If
the Agreement is approved at the Meeting, the Reorganization is
expected to become effective on or about September 10, 1998.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President
David L. Murphy, Vice President
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 AGENT
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
(REGISTERED TRADEMARK)
FIDELITY'S MUNICIPAL BOND FUNDS
Spartan(registered trademark) New York Municipal Income
Spartan Aggressive Municipal
Spartan Arizona Municipal Income
Spartan California Municipal Income
Spartan Connecticut Municipal Income
Spartan Florida Municipal Income
Spartan Insured Municipal Income
Spartan Intermediate Municipal Income
Spartan Maryland Municipal Income
Spartan Massachusetts Municipal Income
Spartan Michigan Municipal Income
Spartan Minnesota Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal Income
Spartan Pennsylvania Municipal Income
Spartan Short-Intermediate
Municipal Income
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
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 (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
SPARTAN(registered trademark)
(REGISTERED TRADEMARK)
CONNECTICUT MUNICIPAL
FUNDS
AND
FIDELITY
CONNECTICUT MUNICIPAL
MONEY MARKET FUND
SEMIANNUAL REPORT
MAY 31, 1998
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
4 PERFORMANCE
7 FUND TALK: THE MANAGER'S OVERVIEW
10 INVESTMENT CHANGES
11 INVESTMENTS
18 FINANCIAL STATEMENTS
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
22 PERFORMANCE
24 FUND TALK: THE MANAGER'S OVERVIEW
26 INVESTMENT CHANGES
27 INVESTMENTS
31 FINANCIAL STATEMENTS
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
35 PERFORMANCE
37 FUND TALK: THE MANAGER'S OVERVIEW
39 INVESTMENT CHANGES
40 INVESTMENTS
45 FINANCIAL STATEMENTS
NOTES 49 NOTES TO THE FINANCIAL STATEMENTS
PROXY VOTING RESULTS 53
</TABLE>
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:
While low interest rates and subdued inflation provided support for
stock and bond markets in the U.S. during the first five months of
1998, concerns about continuing economic and political difficulties in
Asia colored their performance. The stock market reached record
heights due to stronger-than-expected corporate earnings, but
retreated at times when concerns surfaced about how the Asian
volatility would affect business prospects. The bond market benefited
from these retreats, as investors sought alternatives offering lower
volatility.
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.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. You should also keep money you'll need in the near future in a
more stable investment.
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 MAY 31, 1998 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
SPARTAN CT MUNICIPAL INCOME 3.57% 9.18% 34.99% 116.10%
LB CONNECTICUT 4 PLUS YEAR ENHANCED 3.86% 9.69% N/A N/A
MUNICIPAL BOND
CONNECTICUT MUNICIPAL DEBT FUNDS 3.51% 8.79% 32.66% 116.18%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, 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 six
months average represents a peer group of 26 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 MAY 31, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
SPARTAN CT MUNICIPAL INCOME 9.18% 6.18% 8.01%
LB CONNECTICUT 4 PLUS YEAR ENHANCED 9.69% N/A N/A
MUNICIPAL BOND
CONNECTICUT MUNICIPAL DEBT FUNDS 8.79% 5.81% 8.01%
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
Spartan CT Muni Income LB Municipal Bond
00407 LB015
1988/05/31 10000.00 10000.00
1988/06/30 10188.17 10146.30
1988/07/31 10239.03 10212.45
1988/08/31 10290.56 10221.44
1988/09/30 10492.68 10406.45
1988/10/31 10677.94 10589.60
1988/11/30 10578.35 10492.60
1988/12/31 10736.28 10599.94
1989/01/31 10881.58 10819.15
1989/02/28 10777.62 10695.70
1989/03/31 10789.23 10670.14
1989/04/30 11083.19 10923.45
1989/05/31 11315.90 11150.33
1989/06/30 11505.07 11301.75
1989/07/31 11629.98 11455.57
1989/08/31 11507.38 11343.42
1989/09/30 11473.01 11309.61
1989/10/31 11609.07 11447.93
1989/11/30 11780.38 11648.27
1989/12/31 11856.48 11743.55
1990/01/31 11751.39 11688.00
1990/02/28 11858.21 11792.03
1990/03/31 11878.89 11795.56
1990/04/30 11693.45 11710.16
1990/05/31 11984.31 11965.80
1990/06/30 12106.07 12070.98
1990/07/31 12286.18 12248.42
1990/08/31 12065.27 12070.57
1990/09/30 12143.28 12077.45
1990/10/31 12326.52 12296.54
1990/11/30 12592.41 12543.82
1990/12/31 12649.88 12598.39
1991/01/31 12790.26 12767.46
1991/02/28 12870.79 12878.53
1991/03/31 12891.38 12883.17
1991/04/30 13055.22 13054.52
1991/05/31 13170.99 13170.57
1991/06/30 13069.18 13157.53
1991/07/31 13224.31 13317.79
1991/08/31 13367.99 13493.19
1991/09/30 13487.87 13668.87
1991/10/31 13620.83 13791.89
1991/11/30 13653.63 13830.37
1991/12/31 13988.24 14127.17
1992/01/31 14009.49 14159.38
1992/02/29 14016.42 14163.91
1992/03/31 13952.36 14169.15
1992/04/30 14026.10 14295.25
1992/05/31 14218.19 14463.51
1992/06/30 14498.30 14706.21
1992/07/31 14950.08 15147.10
1992/08/31 14738.48 14999.41
1992/09/30 14839.39 15097.51
1992/10/31 14586.48 14949.10
1992/11/30 14980.34 15216.84
1992/12/31 15137.78 15372.20
1993/01/31 15363.51 15550.98
1993/02/28 15988.18 16113.46
1993/03/31 15770.62 15943.14
1993/04/30 15915.98 16104.01
1993/05/31 16009.06 16194.51
1993/06/30 16292.65 16464.80
1993/07/31 16316.77 16486.37
1993/08/31 16686.87 16829.62
1993/09/30 16889.23 17021.31
1993/10/31 16898.27 17054.16
1993/11/30 16749.81 16903.91
1993/12/31 17102.32 17260.75
1994/01/31 17300.23 17457.87
1994/02/28 16824.28 17005.71
1994/03/31 16058.82 16313.24
1994/04/30 16196.79 16451.57
1994/05/31 16293.30 16594.21
1994/06/30 16192.11 16492.82
1994/07/31 16517.12 16795.13
1994/08/31 16554.28 16853.24
1994/09/30 16282.27 16605.84
1994/10/31 15919.60 16310.92
1994/11/30 15475.49 16016.02
1994/12/31 15902.46 16368.53
1995/01/31 16411.35 16836.34
1995/02/28 16913.11 17325.94
1995/03/31 17093.69 17525.02
1995/04/30 17113.23 17545.70
1995/05/31 17645.61 18105.58
1995/06/30 17486.84 17948.06
1995/07/31 17587.07 18118.21
1995/08/31 17831.82 18347.95
1995/09/30 17975.56 18464.09
1995/10/31 18203.94 18732.56
1995/11/30 18479.02 19043.33
1995/12/31 18625.05 19226.34
1996/01/31 18787.47 19371.50
1996/02/29 18695.66 19240.74
1996/03/31 18442.82 18994.84
1996/04/30 18404.14 18941.09
1996/05/31 18368.73 18933.51
1996/06/30 18600.53 19139.70
1996/07/31 18749.42 19313.87
1996/08/31 18728.44 19309.23
1996/09/30 18962.90 19579.56
1996/10/31 19182.59 19801.01
1996/11/30 19522.19 20163.36
1996/12/31 19414.22 20078.68
1997/01/31 19481.51 20116.63
1997/02/28 19645.68 20301.30
1997/03/31 19378.18 20030.68
1997/04/30 19530.80 20198.34
1997/05/31 19792.96 20502.12
1997/06/30 19999.22 20720.47
1997/07/31 20584.43 21294.43
1997/08/31 20362.74 21094.90
1997/09/30 20625.16 21345.29
1997/10/31 20746.77 21482.54
1997/11/30 20864.83 21608.86
1997/12/31 21187.62 21924.13
1998/01/31 21403.25 22150.39
1998/02/28 21388.83 22157.04
1998/03/31 21381.59 22176.53
1998/04/30 21297.46 22076.52
1998/05/29 21604.94 22425.99
IMATRL PRASUN SHR__CHT 19980531 19980611 151623 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Connecticut Municipal Income Fund on May 31, 1988.
As the chart shows, by May 31, 1998, the value of the investment would
have grown to $21,610 - a 116.10% 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 $22,426 - a
124.26% 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
SIX MONTHS ENDED YEARS ENDED NOVEMBER 30,
MAY 31,
1998 1997 1996 1995 1994 1993
DIVIDEND RETURN 2.43% 5.19% 5.29% 6.62% 5.28% 6.29%
CAPITAL RETURN 1.14% 1.69% 0.36% 12.79% -12.89% 5.52%
TOTAL RETURN 3.57% 6.88% 5.65% 19.41% -7.61% 11.81%
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital 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 MAY 31, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 4.62(CENTS) 27.25(CENTS) 54.91(CENTS)
ANNUALIZED DIVIDEND RATE 4.78% 4.77% 4.82%
30-DAY ANNUALIZED YIELD 4.12% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 6.74% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period
and do not reflect any tax reclassifications. If you annualize this
number, based on an average share price of $11.38 over the past one
month, $11.45 over the past six months and $11.39 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 bond 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% combined effective 1998
federal and state income tax bracket, but does not reflect the payment
of the alternative minimum tax, if applicable.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Investor sentiment, shifting supply
and demand conditions, and
volatility in Asia played key roles
in the municipal bond market during
the six months that ended May 31,
1998. During this period, the
Lehman Brothers Municipal Bond
Index - a measure of the municipal
bond market - returned 3.78%.
To compare, the Lehman Brothers
Aggregate Bond Index - a
measure of the investment-grade
taxable bond market in the U.S. -
returned 4.09%. In late 1997,
volatility in Asia helped prop up the
muni bond market. Investors felt that
currency devaluations in that region
would translate into cheaper prices
for Asian goods and help control
the inflation that can eat into bonds'
fixed payments. Since the beginning
of 1998, though, muni bond supply
increased as many issuers took
advantage of lower interest rates
to refinance their debt at lower rates.
That, combined with softening
demand, dampened the
performance of muni bonds in
early 1998. On top of that, the
municipal bond market
experienced extremely heavy
issuance in March and April, as
issuers rushed to market before the
largest deal in municipal market
history took place in May - a
$3.5 billion issuance by Long Island
Power Authority. This heavy
supply, coupled with only
intermittent demand, put
downward pressure on municipal
bonds in April. Renewed fears of
economic and political dislocation in
Asia attracted investors to all
sectors of the bond market in May,
but, overall, municipals lagged
taxable issues through the first
five months of 1998.
An interview with George Fischer, Portfolio Manager of Spartan
Connecticut Municipal Income Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the six-month period that ended May 31, 1998, the fund had a
total return of 3.57%. To get a sense of how the fund did relative to
its competitors, the Connecticut municipal debt funds average returned
3.51% for the same six-month period, according to Lipper Analytical
Services. Additionally, the Lehman Brothers Connecticut 4 Plus Year
Enhanced Municipal Bond Index - a broad measure of the performance of
the Connecticut municipal bond market - returned 3.86% for the same
six-month period. For the 12-month period that ended May 31, 1998, the
fund returned 9.18%. That compared to the 8.79% return of the
Connecticut municipal debt funds average and the 9.69% return of the
Lehman Brothers Connecticut 4 Plus Year Enhanced Municipal Bond Index
over the same one-year period.
Q. WHICH HOLDINGS PERFORMED WELL DURING THE PERIOD?
A. Securities rated Baa by Moody's Investors Service performed
particularly well during the period. Faced with falling interest
rates, investors continued to seek Baa-rated securities because they
offered more yield than higher-rated A and AA securities. What's more,
there was only a limited supply of Baa-rated bonds available, so
strong demand pushed up against low supply and boosted their prices. I
purposely kept the fund's stake in Baa-rated bonds relatively light
during the period, however, because they generally didn't offer enough
additional yield to compensate for their lower credit quality.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PAST SIX MONTHS?
A. Housing bonds - which made up 3.5% of the fund's investments at the
end of the period - lagged the overall Connecticut municipal market.
Housing bonds experienced increased prepayment activity when interest
rates fell, because mortgage borrowers refinanced their debt in order
to lower their interest costs. While prepayment is good for the
borrower, it can be bad for housing bond holders because it can force
them to reinvest at lower interest rates. However, I continued to hold
onto most of the fund's housing bonds because they carried attractive
yields.
Q. HOW DID YOU ALLOCATE THE FUND'S INVESTMENTS AMONG BONDS WITH
VARIOUS MATURITIES DURING THE PAST SIX MONTHS?
A. I kept the fund focused on bonds with maturities of between five
and 15 years. I did that because the yield curve - a graphical
representation of the yield of bonds by ascending maturity dates - was
relatively flat beyond 15 years. Up to about that point, an investor
was paid an appropriate amount of added income for each additional
year of maturity. It is this additional income that compensates the
investor for the added risk taken on by investing in the
longer-maturity part of the municipal market. But for bonds with
maturities of 15 years or longer, the extra income for each successive
year was, in my opinion, less attractive given the level of risk
inherent in longer-term bonds. Throughout the period, I also kept the
fund's duration - which measures its sensitivity to changes in
interest rates - in line with the Connecticut municipal bond market as
a whole, as represented by the Lehman Brothers Connecticut 4 Plus Year
Enhanced Municipal Bond Index.
Q. THE COMBINED STAKE IN BONDS ISSUED BY PUERTO RICO AND GUAM GREW TO
10.4% OF THE FUND'S INVESTMENTS AT THE END OF THE PERIOD. WHAT ROLE DO
THESE INVESTMENTS PLAY IN A CONNECTICUT MUNICIPAL BOND FUND?
A. As territories of the United States, Puerto Rico and Guam have the
ability to issue municipal debt that is free from U.S. federal taxes
and the state taxes of each of the 50 states. Over the past six
months, the supply of Connecticut municipal bonds was quite tight, so
I didn't find a lot of opportunities to buy bonds issued in the state
at what I thought were reasonable prices. Rather than overpaying for
Connecticut bonds, I turned to the Puerto Rico and Guam markets and
bought bonds with relatively high credit quality at more attractive
prices and with slightly higher yields than those found in
Connecticut.
Q. WHAT'S AHEAD FOR THE FUND AND THE MUNICIPAL MARKET?
A. At the end of the period, municipals were attractively priced
compared to Treasury bonds, mainly because the supply of municipals
has been heavy so far in 1998. A relatively large supply of municipals
came to the national market in the first five months of 1998 as
municipal issuers sought to take advantage of low interest rates to
issue new or refinance old debt. If supply tapers off - which I
believe it will in the second half of 1998 - municipals may do
relatively well as they play catch-up to Treasuries.
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 FUND'S
BENCHMARK INDEX AND ITS ROLE
IN MANAGING THE FUND:
"I use the Lehman Brothers
Connecticut 4 Plus Year Enhanced
Municipal Bond Index as a
representation of the overall market
in which the fund invests. The
index includes most of the
universe of Connecticut municipal
bonds. I manage the fund to have
similar overall interest-rate risk to
its benchmark index, but beyond
that, the fund can vary
significantly from the index. With
respect to sector, issuer and
structural composition, the
fund's holdings reflect our
research conclusions on the
relative value of bonds."
(solid bullet) At the end of the period, about
half of the fund's investments were
insured, meaning that a bond's
timely principal and interest
payments are guaranteed by a
municipal bond insurer. Insured
bond prices, like other bond
prices, rise and fall with interest-
rate moves, supply and demand,
and other factors.
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 May 31, 1998,
more than $355 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 SECTORS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
GENERAL OBLIGATION 36.4 34.8
HEALTH CARE 11.5 11.8
ESCROWED/PRE-REFUNDED 10.8 9.8
SPECIAL TAX 9.8 8.5
EDUCATION 9.4 10.5
AVERAGE YEARS TO MATURITY AS OF MAY 31, 1998
6 MONTHS AGO
YEARS 12.0 11.6
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 MAY 31, 1998
6 MONTHS AGO
YEARS 6.5 6.8
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 MAY 31, 1998 AS OF NOVEMBER 30, 1997
AAA 64.0%
AA, A 23.3%
BAA 10.9%
NON-RATED 0.0%
SHORT-TERM
INVESTMENTS 1.8%
AAA 57.0%
AA, A 27.4%
BAA 10.7%
NON-RATED 2.2%
SHORT-TERM
INVESTMENTS 5.4%
ROW: 1, COL: 1, VALUE: 64.0
ROW: 1, COL: 2, VALUE: 23.1
ROW: 1, COL: 3, VALUE: 10.9
ROW: 1, COL: 4, VALUE: 0.0
ROW: 1, COL: 5, VALUE: 2.0
ROW: 1, COL: 6, VALUE: NIL
ROW: 1, COL: 1, VALUE: 57.0
ROW: 1, COL: 2, VALUE: 27.4
ROW: 1, COL: 3, VALUE: 10.7
ROW: 1, COL: 4, VALUE: 2.2
ROW: 1, COL: 5, VALUE: 5.4
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 MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS
MUNICIPAL BONDS - 98.2%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - 87.8%
Branford Gen. Oblig. Unltd. Tax:
7% 6/15/08 (FGIC Insured) Aaa $ 500,000 $ 600,745
7% 6/15/09 (FGIC Insured) Aaa 500,000 610,555
Bridgeport Gen. Oblig.:
Rfdg. Series A:
6% 9/1/03 (AMBAC Insured) Aaa 4,475,000 4,862,222
6% 9/1/05 (AMBAC Insured) Aaa 4,000,000 4,421,960
6.50% 9/1/07 (AMBAC Insured) Aaa 2,290,000 2,654,637
Series A:
5.40% 9/1/08 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 594,886
5.50% 9/1/09 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 598,290
5.60% 9/1/10 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 601,695
5.70% 9/1/11 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 605,099
5.70% 9/1/15 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 2,000,000 2,193,800
Unltd. Tax Series A:
7.40% 3/1/00
(Pre-Refunded to 3/1/99 @ 102) (d) Baa 1,080,000 1,129,421
7.625% 1/15/09
(Pre-Refunded to 3/1/99 @ 102) (d) Baa 1,500,000 1,573,215
8.75% 8/15/05 (FGIC Insured) Aaa 670,000 851,074
Connecticut Clean Wtr. Fund Rev.:
Series 1991, 7% 1/1/11 Aaa 2,500,000 2,717,350
5.875% 11/1/03 Aaa 1,000,000 1,085,580
5.875% 5/1/04 Aaa 1,000,000 1,089,950
6.80% 7/1/05 Aaa 1,000,000 1,085,950
5.75% 3/1/07 Aaa 2,615,000 2,881,442
6% 10/1/12 (e) Aaa 6,000,000 6,845,940
Connecticut College Savings Plan
(Cap. Appreciation):
Series A:
0% 5/15/07 Aa3 2,250,000 1,505,340
0% 12/1/07 Aa3 4,000,000 2,611,720
Series B, 0% 11/1/06 Aa3 2,800,000 1,928,584
Unltd. Tax Series B, 0% 11/1/09 Aa3 7,000,000 4,157,160
Connecticut Dev. Auth. Health Care Proj. Rfdg.
(Duncaster, Inc. Proj.) 6.75% 9/1/15 A2 3,000,000 3,237,150
Connecticut Dev. Auth. Poll. Cont. Rev.
(New England Pwr. Co. Proj.) 7.25% 10/15/15 A1 3,000,000 3,179,250
Connecticut Dev. Auth. Rev. Series A:
6% 11/15/07 A1 1,525,000 1,718,843
6% 11/15/08 A1 1,525,000 1,728,435
6% 11/15/09 A1 1,525,000 1,728,908
4.75% 11/15/13 A1 1,525,000 1,511,504
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Economic Recovery Rfdg. Notes
5% 6/15/98 Aa3 $ 1,000,000 $ 1,000,390
Connecticut Gen. Oblig.:
Series A:
6% 3/15/01 Aa3 2,405,000 2,529,026
6.10% 3/15/02 Aa3 3,000,000 3,205,890
7% 3/15/03 Aa3 3,000,000 3,353,820
Series B, 6% 10/1/05 Aa3 6,430,000 7,115,117
Connecticut Health & Edl. Facs. Auth. Rev.:
(Ashlar Village Inc.) Series A, 5% 7/1/20
(AMBAC Insured) Aaa 2,400,000 2,352,840
(Bristol Hosp.) Series A:
7% 7/1/09 (MBIA Insured) Aaa 1,750,000 1,878,170
7% 7/1/20 (MBIA Insured) Aaa 4,180,000 4,480,082
(Choate Rosemary Hall) Series B, 5% 7/1/27
(MBIA Insured) Aaa 3,000,000 2,933,070
(Connecticut College Issue)
Series B, 6.625% 7/1/11 (MBIA Insured)
(Pre-Refunded to 7/1/01 @ 102) (d) Aaa 1,200,000 1,311,564
(Greenwich Hospital) Series A, 5.80% 7/1/26
(MBIA Insured) Aaa 5,400,000 5,714,172
(Hosp. for Spl. Care)
Series B, 5.375% 7/1/17 Baa2 2,700,000 2,704,320
(HSC Commty. Services Inc.)
Series B, 5.50% 7/1/27 Baa2 2,500,000 2,509,100
(Kent School) Series B:
5.10% 7/1/07 (MBIA Insured) Aaa 265,000 277,617
5.25% 7/1/08 (MBIA Insured) Aaa 305,000 321,327
5.375% 7/1/09 (MBIA Insured) Aaa 345,000 364,982
5.40% 7/1/10 (MBIA Insured) Aaa 685,000 725,703
(Loomis Chaffee School) Series C,
5.50% 7/1/26 (MBIA Insured) Aaa 1,430,000 1,468,238
(Lutheran Gen. Health Care Sys./Parkside Lodges)
7.375% 7/1/19 (Escrowed to Maturity) (d) Aaa 3,195,000 3,886,430
(New Britain Mem. Hosp.)
Series A, 7.75% 7/1/22 Aaa 6,500,000 7,492,420
(Quinnipiac College):
Series C, 7.75% 7/1/20
(Pre-Refunded to 7/1/00 @ 102) (d) BBB- 1,940,000 2,120,110
Rfdg. Series D:
6% 7/1/13 BBB- 3,500,000 3,596,880
6% 7/1/23 BBB- 1,975,000 2,018,055
(Sacred Heart Univ.):
Series A, 6.85% 7/1/22,
LOC Fleet Nat'l. Bank
(Pre-Refunded to 7/1/02 @ 102) (d) Baa3 1,000,000 1,117,200
Series B, 5.50% 7/1/09 Baa3 1,500,000 1,519,980
Series C:
6% 7/1/06 Baa3 250,000 264,420
6.50% 7/1/16 Baa3 4,000,000 4,345,520
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Edl. Facs. Auth. Rev.: - continued
(St. Mary's Hosp.) Series B, 7.60% 7/1/03
(Pre-Refunded to 7/1/98 @ 102) (d) Aaa $ 900,000 $ 920,682
(St. Raphael Hosp.) Series H:
6.50% 7/1/11 (AMBAC Insured) Aaa 2,780,000 3,273,089
6.50% 7/1/13 (AMBAC Insured) Aaa 3,125,000 3,708,688
5.25% 7/1/14 (AMBAC Insured) Aaa 4,400,000 4,619,428
(Sharon Healthcare Inc.) Series A:
8.75% 7/1/06
(Pre-Refunded to 7/1/01 @ 103) (d) Aaa 450,000 523,247
9% 7/1/13
(Pre-Refunded to 7/1/01 @ 103) (d) Aaa 1,300,000 1,518,855
9.20% 7/1/21
(Pre-Refunded to 7/1/01 @ 103) (d) Aaa 1,500,000 1,761,120
(Veterans Memorial Med. Ctr.) Series A:
6.25% 7/1/05 (MBIA Insured) Aaa 2,265,000 2,520,356
5.50% 7/1/26 (MBIA Insured) Aaa 2,275,000 2,335,834
(Yale-New Haven Hosp.):
Series H, 6% 7/1/03 (MBIA Insured) Aaa 1,000,000 1,081,670
5.929% 6/10/30 Aaa 10,000,000 10,613,900
Connecticut Higher Ed. Supplemental Loan Auth.
Rev. Series A:
7.375% 11/15/05 (b) A1 475,000 488,761
7.50% 11/15/10 (b) A1 1,635,000 1,682,677
(Family Ed. Loan Prog.)
7.20% 11/15/10 (b) A 810,000 863,760
Connecticut Hsg. Fin. Auth. Hsg. Mtg. Fin. Prog.:
Series A, Subseries A-2,
6.45% 5/15/22 (b) Aa2 5,500,000 5,887,585
Series B, 6.20% 5/15/12 Aa2 2,500,000 2,643,900
Series E, 6.20% 5/15/14 Aa2 1,000,000 1,067,960
Series E, Subseries E-1, 6.30% 5/15/17 Aa2 1,950,000 2,096,114
Connecticut Muni. Elec. Energy Coop. Pwr.
Supply Sys. Rev. Rfdg. Series A:
6% 1/1/04 (MBIA Insured) Aaa 3,190,000 3,467,115
6% 1/1/05 (MBIA Insured) Aaa 3,380,000 3,699,782
6% 1/1/06 (MBIA Insured) Aaa 2,000,000 2,207,140
Connecticut Resource Recovery Auth. Corp. Credit
(American Refuse Fuel Co.) Series A,
8.10% 11/15/15 (b) Baa1 4,500,000 4,717,170
Connecticut Resource Recovery Auth. Rfdg.
(Mid-Connecticut Sys.) Series A:
5.25% 11/15/08 (MBIA Insured) Aaa 4,000,000 4,239,360
5.375% 11/15/10 (MBIA Insured) Aaa 1,000,000 1,057,340
5.50% 11/15/11 (MBIA Insured) Aaa 2,500,000 2,658,325
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Spl. Assignment Unemployment
Compensation Advisor Fund Rev. Rfdg.
(Connecticut Unemployment) Series A,
5.50% 11/15/00 (AMBAC Insured) Aaa $ 2,000,000 $ 2,073,560
Connecticut Spl. Tax. Oblig. Rev.
(Trans. Infrastructure):
Series A:
6.50% 6/1/03 Aaa 2,800,000 3,094,056
5.50% 11/1/06 (FSA Insured) Aaa 1,925,000 2,075,651
7.125% 6/1/10 A1 3,550,000 4,346,372
6.75% 6/1/11
(Pre-Refunded to 6/1/03 @ 100) (d) Aaa 2,395,000 2,673,275
Series B:
(Cap. Appreciation) 0% 6/1/08 A1 3,500,000 2,236,815
6.50% 10/1/07 A1 2,250,000 2,609,055
6.15% 9/1/09 A1 1,500,000 1,705,995
6.50% 10/1/10 A1 3,250,000 3,818,393
6.125% 9/1/12 A1 5,000,000 5,715,850
6.50% 10/1/12 A1 4,000,000 4,730,000
Eastern Connecticut Resource Recovery Auth.
Solid Waste Rev. (Wheelabrator Lisbon Proj.)
Series A, 5% 1/1/04 (b) BBB 1,000,000 1,012,300
Meriden Gen. Oblig. Unltd. Tax:
6.25% 8/1/05 (FGIC Insured) Aaa 2,000,000 2,239,460
6.25% 8/1/06 (FGIC Insured) Aaa 2,000,000 2,260,460
7% 10/1/07 (MBIA Insured) Aaa 500,000 597,070
Naugatuck Gen. Oblig. Unltd. Tax:
7.25% 9/1/04 (MBIA Insured) Aaa 215,000 250,146
6.90% 6/15/07 (FGIC Insured) Aaa 485,000 575,157
7.40% 9/1/07 (MBIA Insured) Aaa 370,000 452,432
7.40% 9/1/08 (MBIA Insured) Aaa 370,000 457,827
New Britain Gen. Oblig. Unltd. Tax:
Rfdg. 6% 2/1/12 (MBIA Insured) Aaa 400,000 452,752
Series B, 6% 3/1/12 (MBIA Insured) Aaa 2,000,000 2,264,900
6% 4/15/06 (AMBAC Insured) Aaa 1,615,000 1,792,198
7% 4/1/07 (MBIA Insured) Aaa 580,000 687,625
6% 4/15/07 (AMBAC Insured) Aaa 1,615,000 1,804,666
7% 4/1/08 (MBIA Insured) Aaa 580,000 694,904
5% 2/1/12 (MBIA Insured) Aaa 885,000 913,081
5% 2/1/13 (MBIA Insured) Aaa 885,000 909,842
New Haven Gen. Oblig.:
Rfdg. Series A, 5% 8/1/09 (FGIC Insured) Aaa 1,775,000 1,842,752
Series A, 7.40% 3/1/12
(Pre-Refunded to 3/1/02 @ 102) (d) Baa1 1,000,000 1,130,560
8.25% 8/15/01 Baa1 2,590,000 2,774,952
7% 2/15/03 (FGIC Insured) Aaa 1,000,000 1,118,320
7% 2/15/04 (FGIC Insured) Aaa 1,150,000 1,308,930
6% 2/15/05 (FGIC Insured) Aaa 1,650,000 1,812,608
7% 2/15/05 (FGIC Insured) Aaa 1,250,000 1,441,413
6% 8/1/05 (FGIC Insured) Aaa 3,410,000 3,766,175
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Newtown Gen. Oblig.:
6% 6/15/05 (MBIA Insured) Aaa $ 1,700,000 $ 1,874,896
6% 6/15/06 (MBIA Insured) Aaa 1,700,000 1,889,958
North Thompsonville Fire Dist. #10 Unltd. Tax:
6.75% 6/1/07 (MBIA Insured) Aaa 180,000 210,769
6.75% 6/1/08 (MBIA Insured) Aaa 190,000 224,540
6.75% 6/1/09 (MBIA Insured) Aaa 200,000 238,248
6.75% 6/1/10 (MBIA Insured) Aaa 215,000 256,759
6.75% 6/1/11 (MBIA Insured) Aaa 230,000 276,173
South Central Connecticut Reg'l. Wtr. Auth. Wtr.
Sys. Rev. 11th Series:
5.625% 8/1/05 (FGIC Insured) Aaa 5,000,000 5,399,200
5.75% 8/1/12 (FGIC Insured) Aaa 5,000,000 5,333,950
Stamford Gen. Oblig. Unltd. Tax:
6.25% 2/15/03 Aaa 1,725,000 1,882,113
6.25% 2/15/04 Aaa 1,725,000 1,907,678
6.25% 2/15/05 Aaa 1,190,000 1,331,086
6.25% 2/15/05 Aaa 535,000 596,439
6.60% 1/15/07 Aaa 295,000 342,808
6.60% 1/15/08 Aaa 1,480,000 1,737,476
6.60% 1/15/09 Aaa 1,000,000 1,190,250
5.25% 7/15/12 Aaa 1,580,000 1,651,147
Stratford Gen. Oblig. Unltd. Tax
7% 6/15/08 (FGIC Insured) Aaa 500,000 600,745
Univ. of Connecticut Series A,
5.50% 2/1/06 (FGIC Insured) Aaa 3,070,000 3,300,097
West Hartford Gen. Oblig. Unltd. Tax:
6.50% 7/15/05 Aaa 2,000,000 2,272,560
6.50% 7/15/06 Aaa 2,000,000 2,294,680
5% 7/15/11 Aaa 2,000,000 2,053,420
West Haven Gen. Oblig. Impt. Unltd. Tax
6.70% 2/15/04 (MBIA Insured) Aaa 710,000 799,346
Wolcott Gen. Oblig. Unltd. Tax:
7% 6/15/09 (FGIC Insured) Aaa 445,000 543,394
7% 6/15/10 (FGIC Insured) Aaa 440,000 540,329
Woodstock Spl. Oblig. Rev. (Woodstock Academy)
7% 3/1/08 (AMBAC Insured) Aaa 725,000 779,477
307,738,096
GUAM - 0.7%
Guam Gov't Ltd. Oblig. Rev. Infrastructure Impt.
Series A, 5.25% 11/1/09 (AMBAC Insured) Aaa 2,400,000 2,589,540
PUERTO RICO - 9.7%
Puerto Rico Commonwealth Gen. Oblig.
Unltd. Tax 6.40% 7/1/11 Aaa 1,500,000 1,701,450
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Hwy. Rev. Rfdg. Series V, 6.625% 7/1/12 Baa1 1,750,000 1,912,243
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Commonwealth Infrastructure Fing. Auth.:
Series A, 5.25% 7/1/0 Aaa $ 11,065,000 $ 11,667,932
5% 7/1/28 (AMBAC Insured) Aaa 5,000,000 4,924,600
Puerto Rico Commonwealth Urban Renewal &
Hsg. Corp. Commonwealth Appropriation Rfdg.
0% 10/1/98 Baa 3,800,000 3,756,300
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Rfdg.:
Series AA, 5.375% 7/1/14 (MBIA Insured) Aaa 3,500,000 3,636,290
Series W, 7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,393,060
Series Y, 7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,393,060
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 1,413,731
33,798,666
TOTAL MUNICIPAL BONDS
(Cost $321,145,739) 344,126,302
MUNICIPAL NOTES (A) - 1.8%
CONNECTICUT - 1.8%
Connecticut Area Ed. Svcs. (Reg. Ed. Facs.)
BAN 4.50% 2/16/99 -- 500,000 501,490
Connecticut Gen. Oblig. Series B, 3.75%
(BPA Bayerische Landesbank Girozentrale) VRDN VMIG 1 1,500,000
1,500,000
Connecticut Health & Ed. Facs. Auth. (Yale Univ.):
Series T, 3.70%, VRDN VMIG 1 500,000 500,000
Series T-2, 3.80%, VRDN VMIG 1 1,100,000 1,100,000
Connecticut Hsg. Fin. Auth. (Multi-Family Hsg.)
3.70% (AMBAC Insured) VRDN VMIG 1 600,000 600,000
Connecticut Spl. Tax Oblig. Rev. (2nd Lien)
(Trans. Infrastructure) Series 1, 3.85%,
LOC Commerzbank AG, VRDN VMIG 1 2,200,000 2,200,000
TOTAL MUNICIPAL NOTES
(Cost $6,401,716) 6,401,490
TOTAL INVESTMENTS - 100%
(Cost $327,547,455) $ 350,527,792
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
PURCHASED DATE AMOUNT AT VALUE GAIN/(LOSS)
61 Municipal Bond Contracts June 98 $ 7,450,178 $ 117,634
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL
INVESTMENTS - 2.1%.
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(i) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(j) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(k) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(l) Security collateralized by an amount sufficient to pay interest
and principal.
(m) Security or 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 $519,150.
(n) 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
$1,413,731 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:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 83.3% AAA, AA, A 86.5%
Baa 8.4% BBB 8.4%
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 distribution of municipal securities by revenue source, as a
percentage of total value of investment in securities, is as follows:
General Obligation 36.4%
Health Care 11.5
Escrowed/Pre-Refunded 10.8
Special Tax 9.8
Education 9.4
Water & Sewer 7.6
Electric Revenue 6.0
Others (individually less than 5%) 8.5
TOTAL 100.0%
INCOME TAX INFORMATION
At May 31, 1998, the aggregate cost of investment securities for
income tax purposes was $327,547,455. Net unrealized appreciation
aggregated $22,980,337, of which $23,017,354 related to appreciated
investment securities and $37,017 related to depreciated investment
securities.
At November 30, 1997, the fund was required to defer approximately
$1,724,000 of losses on futures contracts.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $327,547,455) - $ 350,527,792
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 502,857
RECEIVABLE FOR FUND SHARES SOLD 78,861
INTEREST RECEIVABLE 5,393,257
REDEMPTION FEES RECEIVABLE 220
RECEIVABLE FOR DAILY VARIATION ON FUTURES CONTRACTS 11,437
TOTAL ASSETS 356,514,424
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 57,739
PAYABLE FOR FUND SHARES REDEEMED 359,552
DISTRIBUTIONS PAYABLE 317,103
ACCRUED MANAGEMENT FEE 164,574
OTHER PAYABLES AND ACCRUED EXPENSES 5,607
TOTAL LIABILITIES 904,575
NET ASSETS $ 355,609,849
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 333,431,964
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) (920,086)
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 23,097,971
NET ASSETS, FOR 31,068,031 SHARES OUTSTANDING $ 355,609,849
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $11.45
SHARE ($355,609,849 (DIVIDED BY) 31,068,031 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INTEREST INCOME $ 9,267,727
EXPENSES
MANAGEMENT FEE $ 957,160
NON-INTERESTED TRUSTEES' COMPENSATION 1,484
TOTAL EXPENSES BEFORE REDUCTIONS 958,644
EXPENSE REDUCTIONS (16,498) 942,146
NET INTEREST INCOME 8,325,581
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 612,840
FUTURES CONTRACTS 517,323 1,130,163
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 2,660,665
FUTURES CONTRACTS (118,342) 2,542,323
NET GAIN (LOSS) 3,672,486
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 11,998,067
FROM OPERATIONS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 8,325,581 $ 16,545,675
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 1,130,163 3,116,746
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 2,542,323 2,468,912
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 11,998,067 22,131,333
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (8,325,581) (16,545,675)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN (2,984,295) (296,996)
TOTAL DISTRIBUTIONS (11,309,876) (16,842,671)
SHARE TRANSACTIONS 27,011,056 36,769,472
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 8,863,403 13,074,818
COST OF SHARES REDEEMED (22,589,904) (48,132,709)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM 13,284,555 1,711,581
SHARE TRANSACTIONS
REDEMPTION FEES 4,275 12,580
TOTAL INCREASE (DECREASE) IN NET ASSETS 13,977,021 7,012,823
NET ASSETS
BEGINNING OF PERIOD 341,632,828 334,620,005
END OF PERIOD $ 355,609,849 $ 341,632,828
OTHER INFORMATION
SHARES
SOLD 2,358,539 3,288,068
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 774,435 1,166,635
REDEEMED (1,972,607) (4,311,130)
NET INCREASE (DECREASE) 1,160,367 143,573
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 E 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 11.420 $ 11.240 $ 11.200 $ 9.960 $ 11.840 $ 11.220
OF PERIOD
INCOME FROM INVESTMENT .273 .559 .569 .617 .640 .680
OPERATIONS
NET INTEREST INCOME
NET REALIZED AND .130 .190 .039 1.270 (1.472) .619
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT .403 .749 .608 1.887 (.832) 1.299
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.273) (.559) (.569) (.617) (.640) (.680)
FROM NET REALIZED GAIN (.100) (.010) - (.020) (.410) -
IN EXCESS OF NET - - - (.010) - -
REALIZED GAIN
TOTAL DISTRIBUTIONS (.373) (.569) (.569) (.647) (1.050) (.680)
REDEMPTION FEES ADDED .000 .000 .001 .000 .002 .001
TO PAID IN CAPITAL
NET ASSET VALUE, $ 11.450 $ 11.420 $ 11.240 $ 11.200 $ 9.960 $ 11.840
END OF PERIOD
TOTAL RETURN B, C 3.57% 6.88% 5.65% 19.41% (7.61)% 11.81%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 355,610 $ 341,633 $ 334,620 $ 358,849 $ 315,582 $ 450,113
(000 OMITTED)
RATIO OF EXPENSES TO .55% A .55% .55% .55% .55% .55%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .54% A, D .55% .52% D .55% .55% .55%
AVERAGE NET ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INTEREST INCOME 4.78% A 4.98% 5.15% 5.73% 5.83% 5.81%
TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 7% A 12% 30% 39% 11% 45%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN
(SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE
FORMER ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
D 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).
E 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 CONNECTICUT MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either
total return or yield. Total return reflects the change in 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 MAY 31, 1998 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
SPARTAN CT MUNICIPAL MONEY MARKET 1.56% 3.16% 15.36% 23.87%
CONNECTICUT TAX-FREE 1.42% 2.93% 14.23% 21.63%
MONEY MARKET FUNDS AVERAGE
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period
- - in this case, six months, 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
11 mutual funds with similar objectives tracked by IBC Financial Data,
Inc. over the past six months. (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 MAY 31, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN CT MUNICIPAL MONEY MARKET 3.16% 2.90% 3.00%
CONNECTICUT TAX-FREE 2.93% 2.77% 2.73%
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
6/1/98 3/2/98 12/1/97 9/1/97 6/2/97
SPARTAN CONNECTICUT 3.30% 2.96% 3.25% 2.90% 3.26%
MUNICIPAL MONEY
MARKET FUND
CONNECTICUT TAX-FREE 2.97% 2.67% 3.04% 2.77% 2.91%
MONEY MARKET FUNDS AVERAGE
SPARTAN CONNECTICUT 5.39% 4.83% 5.32% 4.73% 5.31%
MUNICIPAL MONEY
MARKET FUND -
TAX-EQUIVALENT
PORTION OF FUND'S INCOME 4.13% 4.54% 0.00% 5.32% 9.73%
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 1998 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 Federal 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
An interview with Scott Orr, Portfolio Manager of Spartan Connecticut
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX
MONTHS?
A. During much of the period, investors tried to determine when the
Federal Reserve Board might raise the fed funds rate - the rate banks
charge each other for overnight loans - as a way to slow the economy
and thus head off inflation. The economy continued to chug along at a
fairly strong pace and unemployment numbers were incredibly low -
coming in at 4.3% in April. But despite this period of continuing
expansion, wage pressures did not arise and inflation remained benign.
Under normal circumstances, the possibility of future inflation
created by these low unemployment numbers likely would have led the
Fed to raise rates. But economic and political turmoil in Asia kept
the Fed on the sidelines during the period. In fact, the fed funds
rate has remained unchanged at 5.5% for more than a year now.
Q. WHY WAS THE ASIAN TURMOIL ABLE TO OFFSET U.S. ECONOMIC STRENGTH IN
THE FED'S DECISION ON MONETARY POLICY?
A. First of all, the Fed didn't want to make the situation in Asia
worse by raising short-term interest rates here, especially
considering the political and financial unrest in countries such as
Indonesia at the end of the period. An increase in short-term rates in
the U.S. would likely strengthen the U.S. dollar even more versus
Asian currencies, which could further impact their markets. In other
words, the Fed was asking itself, "Why make the Asian markets more
volatile by raising rates in the U.S.?" Second, there was the
possibility that the Asian turmoil would translate into a reduction of
U.S. net exports, which would likely have a dampening effect of its
own on the U.S. economy and inflation.
Q. WHAT WAS THE FUND'S STRATEGY DURING THIS PERIOD?
A. The fund's average maturity was 67 days at the beginning of the
period. From that point, I reduced the average maturity by purchasing
short-term variable-rate paper when long-term notes weren't offering
attractive yields. However, the fund's maturity went up and down quite
a few times during the period; whenever I felt that concerns about an
interest-rate increase were built into the market, I bought fixed-rate
notes to lock in higher yields. At the end of the period, a lack of
supply in the one-year fixed-rate Connecticut market led me to
purchase more variable-rate issues, which reduced the fund's maturity
to 52 days at the end of the period.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1998, was 3.29%, compared to
3.26% six months ago. The more recent seven-day yield was the
equivalent of a 5.38% taxable rate of return for Connecticut investors
in the 38.88% combined state and federal income tax bracket. Through
May 31, 1998, the fund's six-month total return was 1.56%, compared to
1.42% for the Connecticut tax-free money market funds average,
according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The future of Asia is the most important wildcard. If we continue
to see the same level of turmoil there, I believe the Fed may be
obligated to stay on the sidelines, keeping interest rates unchanged.
There's a lot of risk that a rate increase in the U.S. could cause
increased volatility in global markets. Without a rate increase, the
U.S. economy still might slow as a result of fewer U.S. exports. In
this case, the Asian situation would do the Fed's job for it. The
strength of the U.S. economy, in light of the Asian situation, has
left the Fed at an impasse. And, although I believe the next Fed move
will be to raise rates, I don't believe it will be any time soon. The
only factor that could change the Fed's stance in the next few months
would be real signs of inflation - wage pressures as reflected in the
employment cost index or higher-than-expected increases in the
consumer price index or the producer price index. At that point, the
Fed may risk causing more problems in Asia to keep the U.S. economy on
good footing.
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 while maintaining
share price stability by investing
mainly in high-quality, short-term
Connecticut municipal money
market securities
FUND NUMBER: 425
TRADING SYMBOL: SPCXX
START DATE: March 4, 1991
SIZE: as of May 31, 1998,
more than $175 million
MANAGER: Scott Orr, since
July 1997; manager, various
Fidelity and Spartan municipal
money market 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
5/31/98 11/30/97 5/31/97
0 - 30 61 58 62
31 - 90 16 12 24
91 - 180 14 11 3
181 - 397 9 19 11
WEIGHTED AVERAGE MATURITY
5/31/98 11/30/97 5/31/97
SPARTAN CONNECTICUT MUNICIPAL 52 DAYS 67 DAYS 48 DAYS
MONEY MARKET FUND
CONNECTICUT TAX-FREE 43 DAYS 58 DAYS 46 DAYS
MONEY MARKET FUNDS AVERAGE*
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1998 AS OF NOVEMBER 30, 1997
ROW: 1, COL: 1, VALUE: 9.0
ROW: 1, COL: 2, VALUE: 15.0
ROW: 1, COL: 3, VALUE: 9.0
ROW: 1, COL: 4, VALUE: 13.0
ROW: 1, COL: 5, VALUE: 54.0
VARIABLE RATE DEMAND
NOTES (VRDNS) 57%
COMMERCIAL PAPER
(INCLUDING CP MODE) 12%
TENDER BONDS 10%
MUNICIPAL NOTES 16%
OTHER 5%
VARIABLE RATE DEMAND
NOTES (VRDNS) 54%
COMMERCIAL PAPER
(INCLUDING CP MODE) 13%
TENDER BONDS 9%
MUNICIPAL NOTES 15%
OTHER 9%
ROW: 1, COL: 1, VALUE: 5.0
ROW: 1, COL: 2, VALUE: 16.0
ROW: 1, COL: 3, VALUE: 10.0
ROW: 1, COL: 4, VALUE: 12.0
ROW: 1, COL: 5, VALUE: 57.0
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1997 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - 88.5%
Avon Gen. Oblig. BAN 3.75% 7/15/98 $ 2,100,000 $ 2,100,623
Cheshire Gen. Oblig. BAN 4.25% 8/7/98 3,400,000 3,403,123
Clipper Tax Exempt Trust Participating VRDN,
Series 94-1, 3.87% (Liquidity Facility State
Street Bank & Trust Co.) (c) 3,847,590 3,847,590
Connecticut Area Coop. Ed. Svcs. Reg. (Spl. Ed. Facs.)
BAN 4.50% 2/16/99 1,500,000 1,505,128
Connecticut Dev. Auth. Arpt. Facs. Rev.
(Bradley Arpt. Hotel):
Series 1997 A, 3.70%, LOC Kredietbank N.V. VRDN 1,200,000
1,200,000
Series 1997 B, 3.70%,
LOC Royal Bank of Canada, VRDN 1,000,000 1,000,000
Series 1997 C, 3.70%, 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 8,300,000 8,300,000
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, 4.10%,
LOC Bank of Boston (b) 900,000 900,000
Connecticut Dev. Auth. Poll. Cont. Rev., VRDN:
(Connecticut Lt. & Pwr. Co. Proj.):
Series 1993 A, 3.80%, LOC Deutsche Bank 3,400,000 3,400,000
Series 1993 B, 3.85%,
LOC Union Bank of Switzerland (b) 200,000 200,000
Series 1996 A, 3.85% (AMBAC Insured)
(BPA Society Generale) (b) 4,200,000 4,200,000
(United Illuminating Co.) Series 1996A, 3.80%,
LOC Canadian Imperial Bank of Commerce, VRDN (b) 1,300,000
1,300,000
Connecticut Dev. Auth. Solid Waste Disp. Facs. Rev.
(Exeter Energy Proj.) VRDN:
Series 1989 A, 4.60%, LOC Sanwa Bank (b) 3,500,000 3,500,000
Series 1989 B, 4.60%, LOC Sanwa Bank (b) 2,800,000 2,800,000
Series 1989 C, 4.60%, LOC Sanwa Bank (b) 400,000 400,000
Connecticut Gen. Oblig.:
Bonds:
Rfdg. Econ. Recovery 5% 6/15/98 1,000,000 1,000,464
Series 1997C, 5% 8/1/98 4,100,000 4,108,040
Series 1998 B, 4% 3/15/99 3,600,000 3,614,301
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Gen. Oblig.: - continued
Participating VRDN (c):
Series E-6, 3.80%
(Liquidity Facility Morgan Guaranty Trust Co.) $ 775,000 $ 775,000
Series 1998-B:
3.80% (Liquidity Facility Bankers Trust Co.) 4,950,000 4,950,000
3.92% (Liquidity Facility Merrill Lynch & Co., Inc.) 1,495,000
1,495,000
Series B, 3.75% (BPA Bayerische Landesbank) VRDN 2,400,000
2,400,000
Connecticut Health & Ed. Facs. Auth. Rev.:
Bonds (Yale Univ.) Series S-2:
3.45% 9/8/98, CP mode 1,000,000 1,000,000
3.55% 9/8/98, CP mode 2,000,000 2,000,000
3.50% 9/9/98, CP mode 2,000,000 2,000,000
3.55% 9/10/98, CP mode 9,000,000 9,000,000
Participating VRDN, (Yale Univ.) Series BT-203, 3.85%
(Liquidity Facility Bankers Trust) (c) 3,000,000 3,000,000
(Bradley Health Care Inc.) Series B, 3.65%,
LOC Fleet Nat'l. Bank, VRDN 1,000,000 1,000,000
Connecticut Hsg. Fin. Auth. Participating VRDN (c):
Series A, 3.92% (Liquidity Facility Merrill Lynch & Co., Inc.)
1,000,000 1,000,000
Series PT-81, 3.94%
(Liquidity Facility Rabobank Nederland, N.V.) (b) 1,460,000
1,460,000
Series PT-1003 3.94% (Liquidity Facility
Merrill Lynch & Co., Inc.) (b) 3,800,000 3,800,000
Series 1997 L, 4.05% (Liquidity Facility CoreStates Bank) (b)
1,800,000 1,800,000
Series 1998, 3.90% (Liquidity Facility Bayerische
Hypotheken-und Wechsel Bank) 1,475,000 1,475,000
Connecticut Hsg. Fin. Auth. (Hsg. Mtg. Fin. Prog.):
Bonds:
Series 1989 D, 3.70% 9/10/98, CP mode(b) 2,475,000 2,475,000
Series 1990 C, 3.65% 9/10/98, CP mode (b) 1,490,000 1,490,000
Series 1995 G, 3.70% (AMBAC Insured)
(BPA Morgan Guarantee) VRDN 4,600,000 4,600,000
Connecticut Muni. Elec. Energy Coop. Rev. Bonds
(Pwr. Supply Sys.) Series 1995 A, CP mode:
3.55% 8/12/98, LOC Fleet Nat'l. Bank 1,100,000 1,100,000
3.65% 8/12/98, LOC Fleet Nat'l. Bank 1,000,000 1,000,000
3.65% 9/8/98, LOC Fleet Nat'l. Bank 2,300,000 2,300,000
Connecticut Reg. School Dist. #14 BAN:
4% 6/4/98 1,700,000 1,700,054
4% 6/1/99 2,100,000 2,106,615
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Spl. Assessment Second Injury Bonds
3.50% 8/27/98, LOC Credit Communale DeBelgique $ 1,000,000 $ 1,000,000
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. (Trans. Infrastructure Purpose):
Participating VRDN Series BTP-262, 3.75%
(Liquidity Facility Bankers Trust Co.) (c) 5,100,000 5,100,000
Series 1, 3.85%, LOC Commerzbank, VRDN 11,280,000 11,280,000
Coventry Gen. Oblig. BAN 4% 12/15/98 2,225,000 2,228,584
East Hartford Gen. Oblig. BAN 3.75% 1/21/99 3,600,000 3,605,780
East Haven Gen. Oblig. BAN 4.25% 9/1/98 1,000,000 1,000,971
Hartford Redev. Auth. (Underwood Towers Proj.) 3.75%
(FSA Insured) (BPA Barclays Bank) VRDN 2,400,000 2,400,000
Madison Gen. Oblig. BAN 4.22% 11/18/98 1,000,000 1,001,441
Monroe Gen. Oblig. BAN 3.75% 11/4/98 1,645,000 1,647,048
South Windsor Gen. Oblig. BAN 3.75% 3/23/99 3,000,000 3,007,245
Stamford Hsg. Auth. Multimodal 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 3,710,997
156,258,004
PUERTO RICO - 7.6%
Puerto Rico Elec. Pwr. Auth. Rev. Participating VRDN
Series 1995-Z, 3.92% (Liquidity Facility
Merrill Lynch & Co., Inc.) (c) 1,900,000 1,900,000
Puerto Rico Infrastructure Fin. Auth. Participating VRDN (c):
Series PA-223, 3.97%
(Liquidity Facility Merrill Lynch & Co., Inc.) 2,225,000 2,225,000
Series 1997 A, 3.75%
(Liquidity Facility CoreStates Bank) 5,385,000 5,385,000
Puerto Rico Pwr. Auth. Pwr. Rev.
(Muni. Sec. Trust Rec. SGA44) Series AA, 3.85%
(Liquidity Facility Societe Generale France) 1,235,000 1,235,000
Puerto Rico Pwr. Auth. Pwr. Rev. Participating VRDN 3.92%
(Liquidity Facility Merrill Lynch & Co., Inc.) (c) 2,700,000
2,700,000
13,445,000
SHARES
OTHER - 3.9%
Municipal Central Cash Fund (d)(e) 6,957,913 6,957,913
TOTAL INVESTMENTS - 100% $ 176,660,917
Total Cost for Income Tax Purposes $ 176,660,923
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Information in this report regarding holdings by state and
security types do not reflect the holdings of the Municipal Central
Cash Fund. A listing of the Municipal Central Cash Fund's holdings as
of it's most recent fiscal period end is available upon request.
(e) At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.89%. The yield refers to the income earned by
investing in the fund over the seven-day period, expressed as an
annual percentage.
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
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 176,660,917
SEE ACCOMPANYING SCHEDULE
CASH 2,096
RECEIVABLE FOR FUND SHARES SOLD 434,884
INTEREST RECEIVABLE 1,465,753
TOTAL ASSETS 178,563,650
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 2,106,615
PAYABLE FOR FUND SHARES SOLD 459,409
DISTRIBUTIONS PAYABLE 4,850
ACCRUED MANAGEMENT FEE 74,448
OTHER PAYABLES AND ACCRUED EXPENSES 1,082
TOTAL LIABILITIES 2,646,404
NET ASSETS $ 175,917,246
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 175,925,481
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (8,235)
NET ASSETS, FOR 175,925,479 SHARES OUTSTANDING $ 175,917,246
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($175,917,246 (DIVIDED BY) 175,925,479 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INTEREST INCOME $ 3,021,794
EXPENSES
MANAGEMENT FEE $ 420,321
NON-INTERESTED TRUSTEES' COMPENSATION 38
TOTAL EXPENSES BEFORE REDUCTIONS 420,359
EXPENSE REDUCTIONS (7,534) 412,825
NET INTEREST INCOME 2,608,969
NET GAIN (LOSS) 37
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,609,006
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 2,608,969 $ 5,619,799
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 37 (4,319)
INCREASE (DECREASE) IN NET UNREALIZED GAIN FROM ACCRETION - (353)
OF MARKET DISCOUNT
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 2,609,006 5,615,127
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (2,608,969) (5,619,799)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 105,442,203 156,608,247
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 2,557,013 5,491,051
COST OF SHARES REDEEMED (95,729,220) (185,421,716)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,269,996 (23,322,418)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 12,270,033 (23,327,090)
NET ASSETS
BEGINNING OF PERIOD 163,647,213 186,974,303
END OF PERIOD $ 175,917,246 $ 163,647,213
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 1993
SELECTED PER-SHARE
DATA
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
BEGINNING OF PERIOD
INCOME FROM INVESTMENT .016 .031 .030 .034 .023 .022
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST (.016) (.031) (.030) (.034) (.023) (.022)
INCOME
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
END OF PERIOD
TOTAL RETURN B, C 1.56% 3.12% 3.08% 3.41% 2.28% 2.21%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF $ 175,917 $ 163,647 $ 186,974 $ 175,622 $ 167,056 $ 163,102
PERIOD (000 OMITTED)
RATIO OF EXPENSES TO .50% A .50% .50% .50% .50% .24% D
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .49% A, E .50% .50% .50% .50% .24%
AVERAGE NET ASSETS
AFTER EXPENSE
REDUCTIONS
RATIO OF NET INTEREST 3.10% A 3.08% 3.04% 3.36% 2.25% 2.17%
INCOME TO AVERAGE
NET ASSETS
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE
ACCOUNT CLOSEOUT FEE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
D 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.
E 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).
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
There are several ways 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. 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 MAY 31, 1998 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
FIDELITY CT MUNICIPAL MONEY MARKET 1.50% 3.07% 14.72% 33.67%
CONNECTICUT TAX-FREE 1.42% 2.93% 14.23% 29.37%
MONEY MARKET FUNDS AVERAGE
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on August 29, 1989. 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 money market funds with similar objectives tracked
by IBC Financial Data, Inc. The past six months average represents a
peer group of 11 money market 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 MAY 31, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
FIDELITY CT MUNICIPAL MONEY MARKET 3.07% 2.78% 3.37%
CONNECTICUT TAX-FREE 2.93% 2.77% 2.96%
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
6/1/98 3/2/98 12/1/97 9/1/97 6/2/97
FIDELITY CONNECTICUT 3.19% 2.72% 3.19% 2.85% 3.18%
MUNICIPAL MONEY
MARKET FUND
CONNECTICUT TAX-FREE 2.97% 2.67% 3.04% 2.77% 2.91%
MONEY MARKET FUNDS AVERAGE
FIDELITY CONNECTICUT 5.21% 4.45% 5.22% 4.65% 5.19%
MUNICIPAL MONEY
MARKET FUND -
TAX-EQUIVALENT
PORTION OF FUND'S INCOME 3.16% 0.57% 0.66% 4.80% 4.87%
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 1998 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.
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)
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio Manager of Fidelity Connecticut
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX
MONTHS?
A. Investors spent much of the period trying to determine when the
Federal Reserve Board might raise the fed funds rate - the rate banks
charge each other for overnight loans - as a way to slow the economy
and thus head off inflation. The economy continued to chug along at a
fairly strong pace and unemployment numbers were incredibly low -
coming in at 4.3% in April. But despite this period of continuing
expansion, wage pressures did not arise and inflation remained benign.
Under normal circumstances, the possibility of future inflation
created by these low unemployment numbers likely would have led the
Fed to raise rates. But economic and political turmoil in Asia kept
the Fed on the sidelines during the period. In fact, the fed funds
rate has remained unchanged at 5.5% for more than a year now.
Q. WHY WAS THE ASIAN TURMOIL ABLE TO OFFSET U.S. ECONOMIC STRENGTH IN
THE FED'S DECISION ON MONETARY POLICY?
A. For two reasons. The Fed didn't want to make the situation in Asia
worse by raising short-term interest rates here, especially
considering the political and financial unrest in countries such as
Indonesia at the end of the period. An increase in short-term rates in
the U.S. would likely strengthen the U.S. dollar even more versus
Asian currencies, which could further impact their markets. In other
words, the Fed was asking itself, "Why make the Asian markets more
volatile by raising rates in the U.S.?" The other factor was the
possibility that the Asian turmoil would translate into a reduction of
U.S. net exports, which would likely have a dampening effect of its
own on the U.S. economy and inflation.
Q. WHAT WAS THE FUND'S STRATEGY DURING THIS PERIOD?
A. At the beginning of the period, the fund's average maturity was 59
days. From that point, I reduced the average maturity by purchasing
short-term variable-rate paper when long-term notes weren't offering
attractive yields. However, the fund's maturity went up and down quite
a few times during the period; whenever I felt that concerns about an
interest-rate increase were built into the market, I bought fixed-rate
notes to lock in higher yields. At the end of the period, a lack of
supply in the one-year fixed-rate Connecticut market led me to
purchase more variable-rate issues, which reduced the fund's maturity
to 44 days at the end of the period.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1998, was 3.19%, compared to
3.20% six months ago. The more recent seven-day yield was the
equivalent of a 5.22% taxable rate of return for Connecticut investors
in the 38.88% combined state and federal income tax bracket. Through
May 31, 1998, the fund's six-month total return was 1.50%, compared to
1.42% for the Connecticut tax-free money market funds average,
according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. There's one important wildcard: what happens in Asia. If we
continue to see the same level of turmoil there, I believe the Fed may
be obligated to stay on the sidelines, keeping interest rates
unchanged. There's a lot of risk that a rate increase in the U.S.
could cause increased volatility in global markets. Without a rate
increase, the U.S. economy still might slow as a result of fewer U.S.
exports. In this case, the Asian situation would do the Fed's job for
it. The strength of the U.S. economy, in light of the Asian situation,
has left the Fed at an impasse. And, although I believe the next Fed
move will be to raise rates, I don't believe it will be any time soon.
The only factor that could change the Fed's stance in the next few
months would be real signs of inflation - wage pressures as reflected
in the employment cost index or higher-than-expected increases in the
consumer price index or the producer price index. At that point, the
Fed may risk causing more problems in Asia to keep the U.S. economy on
good footing.
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 while maintaining
share price stability by
investing mainly in
high-quality, short-term
Connecticut municipal money
market securities
FUND NUMBER: 418
TRADING SYMBOL: FCMXX
START DATE: August 29, 1989
SIZE: as of May 31, 1998,
more than $423 million
MANAGER: Scott Orr, since
July 1997; manager, various
Fidelity and Spartan municipal
money market funds; joined
Fidelity in 1989
(checkmark)
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
5/31/98 11/30/97 5/31/97
0 - 30 67 64 60
31 - 90 15 11 27
91 - 180 10 9 2
181 - 397 8 16 11
WEIGHTED AVERAGE MATURITY
5/31/98 11/30/97 5/31/97
FIDELITY CONNECTICUT MUNICIPAL 44 DAYS 59 DAYS 48 DAYS
MONEY MARKET FUND
CONNECTICUT TAX-FREE 43 DAYS 58 DAYS 46 DAYS
MONEY MARKET FUNDS AVERAGE*
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1998 AS OF NOVEMBER 30, 1997
ROW: 1, COL: 1, VALUE: 6.0
ROW: 1, COL: 2, VALUE: 13.0
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 10.0
ROW: 1, COL: 5, VALUE: 64.0
VARIABLE RATE DEMAND
NOTES (VRDNS) 61%
COMMERCIAL PAPER
(INCLUDING CP MODE) 12%
TENDER BONDS 8%
MUNICIPAL NOTES 14%
OTHER 5%
VARIABLE RATE DEMAND
NOTES (VRDNS) 64%
COMMERCIAL PAPER
(INCLUDING CP MODE) 10%
TENDER BONDS 7%
MUNICIPAL NOTES 13%
OTHER 6%
ROW: 1, COL: 1, VALUE: 5.0
ROW: 1, COL: 2, VALUE: 14.0
ROW: 1, COL: 3, VALUE: 8.0
ROW: 1, COL: 4, VALUE: 12.0
ROW: 1, COL: 5, VALUE: 61.0
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - 86.1%
Avon Gen. Oblig. BAN 3.75% 7/15/98 $ 4,815,000 $ 4,816,428
Cheshire Gen. Oblig. BAN 4.25% 8/7/98 7,100,000 7,106,521
Clipper Tax Exempt Trust Participating VRDN, Series 94-1,
3.87% (Liquidity Facility State Street Bank & Trust Co.) (c)
7,978,587 7,978,588
Connecticut Area Coop. Ed. Svcs. Reg. (Spl. Ed. Facs.)
BAN 4.50% 2/16/99 4,125,000 4,139,102
Connecticut Dev. Auth. Arpt. Facs. Rev.
(Bradley Arpt. Hotel Proj.):
Series 1997 A, 3.70%, LOC Kredietbank N.V., VRDN 4,100,000
4,100,000
Series 1997 C, 3.70%, LOC Fleet Nat'l. Bank, VRDN 930,000 930,000
Connecticut Dev. Auth. Health. Care Rev.
(Corp. for Independent Living Proj.) Series 1990, 3.70%,
LOC Chase Manhattan Bank, VRDN 18,160,000 18,160,000
Connecticut Dev. Auth. Ind. Dev. Rev., VRDN:
(Cap. Dist. Energy Ctr. Proj.):
Series 1986, 3.60%, LOC Bank of Nova Scotia (b) 6,500,000
6,500,000
Series 1988, 3.60%, LOC Bank of Nova Scotia (b) 100,000 100,000
(Lindenmaier Precision Co./Ohaus Proj) Series 1988,
3.90%, LOC Morgan Guaranty Trust Co. (b) 8,000,000 8,000,000
(Rojo Enterprises LLC) 4.10%, LOC Fleet Bank NA 1,850,000 1,850,000
(W.E. Bassett Co. Proj.) Series 1986,
4.10%, LOC Bank of Boston (b) 900,000 900,000
Connecticut Dev. Auth. Poll. Cont. Rev., VRDN:
(Connecticut Lt. & Pwr. Co. Proj.):
Series 1993 A, 3.80%, LOC Deutsche Bank 10,700,000 10,700,000
Series 1993 B, 3.85%,
LOC Union Bank of Switzerland (b) 11,800,000 11,800,000
Series 1996 A, 3.85%
(AMBAC Insured) LOC Union Bank of Switzerland (b) 9,400,000
9,400,000
(United Illuminating Co.) Series 1996, 3.80%,
LOC Union Bank of Switzerland (b) 2,800,000 2,800,000
Connecticut Dev. Auth. Solid Waste Disp. Facs. Rev.:
(Exeter Energy Proj.) VRDN:
Series 1989 A, 4.60%, LOC Sanwa Bank (b) 5,800,000 5,800,000
Series 1989 B, 4.60%, LOC Sanwa Bank (b) 5,700,000 5,700,000
Series 1989 C, 4.60%, LOC Sanwa Bank (b) 1,400,000 1,400,000
(Rand-Whitney Containerboard) 3.75%,
LOC Chase Manhattan Bank (b) 7,200,000 7,200,000
Connecticut Gen. Oblig.:
Bonds:
Series D, 6% 12/1/98 2,440,000 2,467,124
Series 1997C, 5% 8/1/98 8,815,000 8,832,286
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Gen. Oblig.: - continued
Participating VRDN (c):
Series E-6, 3.80% (Liquidity Facility
Morgan Guaranty Trust Co.) $ 5,200,000 $ 5,200,000
Series BTP-292, 3.80%
(Liquidity Facility Bankers Trust Co.) 7,920,000 7,920,000
Series PA-338, 3.92%
(Liquidity Facility Merrill Lynch & Co., Inc.) 3,000,000
3,000,000
Series PA-347, 3.92%
(Liquidity Facility Merrill Lynch & Co., Inc.) 3,500,000
3,500,000
Connecticut Health & Ed. Facs. Auth. Rev.:
(Bradley Health Care Inc.) Series B,
3.65%, LOC Fleet Nat'l. Bank, VRDN 5,000,000 5,000,000
(Pomfret School Issue) Series A, 3.70%,
LOC Credit Local de France, VRDN 900,000 900,000
(Yale Univ.) Series T-2, 3.80%, VRDN 1,600,000 1,600,000
Bonds (Yale Univ.):
Series S-1:
3.45% 7/17/98, CP mode 4,435,000 4,435,000
3.50% 9/8/98, CP mode 1,600,000 1,600,000
3.55% 9/11/98, CP mode 3,900,000 3,900,000
Series S-2:
3.45% 9/8/98, CP mode 3,000,000 3,000,000
3.55% 9/8/98, CP mode 4,000,000 4,000,000
3.50% 9/9/98, CP mode 9,765,000 9,765,000
Participating VRDN, Series BT-203, 3.85%
(Liquidity Facility Bankers Trust) (c) 7,200,000 7,200,000
Connecticut Hsg. Fin. Auth. (Hsg. Mtg. Fin. Prog.):
Bonds Series 1989D:
3.60% 7/17/98, CP mode (b) 500,000 500,000
3.75% 9/9/98, CP mode (b) 1,500,000 1,500,000
3.65% 9/10/98, CP mode (b) 6,700,000 6,700,000
Series 1995G, 3.70% (AMBAC Insured)
(BPA Morgan Guarantee Trust Co.) VRDN 11,800,000 11,800,000
Connecticut Hsg. Fin. Auth. Participating VRDN (c):
Series FR/RI-A4, 3.90% (Liquidity Facility Bayerische
Hypotheken-und Wechsel Bank) 3,200,000 3,200,000
Series PT-81, 3.94%
(Liquidity Facility Rabobank Nederland, N.V.) (b) 2,615,000
2,615,000
Series PT-148, 3.92%
(Liquidity Facility Merrill Lynch & Co., Inc.) 1,500,000 1,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Hsg. Fin. Auth. Participating VRDN (c): - continued
Series PT-1003 3.94% (Liquidity Facility
Merrill Lynch & Co., Inc.) (b) $ 5,140,000 $ 5,140,000
Series 1997 L, 4.05%
(Liquidity Facility CoreStates Bank) (b) 3,700,000 3,700,000
Connecticut Muni. Elec. Energy Coop. Rev. Bonds
(Pwr. Supply Sys.) Series 1995 A:
3.55% 8/12/98, LOC Fleet Nat'l. Bank, CP mode 1,800,000 1,800,000
3.65% 8/12/98, LOC Fleet Nat'l. Bank, CP mode 2,600,000 2,600,000
3.55% 9/8/98, LOC Fleet Nat'l. Bank, CP mode 2,400,000 2,400,000
Connecticut Reg. School Dist. #14 BAN:
4% 6/4/98 3,200,000 3,200,102
4% 6/1/99 (f) 4,900,000 4,915,435
Connecticut Spl. Assessment Second Injury Bonds
3.50% 8/27/98, LOC Credit Communale deBelgique, CP 2,000,000
2,000,000
Connecticut Spl. Assessment Unemployment Rev. Bonds
Series 1993 C, 3.90%, tender 7/1/98 (FGIC Insured)
(Liquidity Facility FGIC Security Purchase Inc.) 30,400,000
30,400,000
Connecticut Spl. Tax Oblig.:
(Transport Infrastructure Purpose) Series 1,
3.85%, LOC Commerzbank, VRDN 27,775,000 27,775,000
Participating VRDN, Series BTP-263, 3.75%
(Liquidity Facility Bankers Trust Co.) (c) 11,550,000 11,550,000
Coventry Gen. Oblig. BAN 4% 12/15/98 5,200,000 5,208,376
East Hartford Gen. Oblig. BAN 3.75% 1/21/99 9,800,000 9,815,734
East Haven Gen. Oblig. BAN:
4% 9/1/98 2,300,000 2,300,830
4.25% 9/1/98 1,700,000 1,701,650
Hartford Redev. Auth. (Underwood Towers Proj.) 3.75%
(FSA Insured) (BPA Barclays Bank) VRDN 11,945,000 11,945,000
Madison Gen. Oblig. BAN 4.22% 11/18/98 2,200,000 2,203,171
Monroe Gen. Oblig. BAN 3.75% 11/4/98 3,600,000 3,604,482
New Haven Ind. Dev. Board (Starter Sportswear)
Series 1986, 3.80%, LOC Fleet Nat'l. Bank, VRDN (b) 2,200,000
2,200,000
South Windsor Gen. Oblig. BAN 3.75% 3/23/99 7,000,000 7,016,906
Stamford Hsg. Auth. Multimodal Rev. (Morgan Street Proj.)
Series 1994, 3.90%, LOC Deutsche Bank, VRDN (b) 5,000,000 5,000,000
365,991,735
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - 10.9%
Puerto Rico Commonwealth Pub. Impt. Participating VRDN,
Series PA-97, 3.92% (Liquidity Facility
Merrill Lynch & Co.) (c) $ 4,100,000 $ 4,100,000
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Participating VRDN (c):
Series PA-311, 3.92% (Liquidity Facility
Merrill Lynch & Co., Inc.) 3,195,000 3,195,000
Series SGA-43, 3.85%
(Liquidity Facility Societe Generale France) 1,700,000 1,700,000
Puerto Rico Gov't. Dev. Bank Rev., 3.80% (MBIA Insured)
(BPA Credit Suisse First Boston) VRDN 5,600,000 5,600,000
Puerto Rico Hwy. & Trans. Auth. Participating VRDN (c):
Series PA-114, 3.92%,
(Liquidity Facility Merrill Lynch & Co., Inc.) 3,300,000 3,300,000
Series PA-125, 3.92%
(Liquidity Facility Merrill Lynch & Co., Inc.) 2,900,000 2,900,000
Puerto Rico Hwy. & Trans. Auth. Rev. Series A, 3.75%
(AMBAC Insured) (Liquidity Facility Bank of
Nova Scotia) VRDN 1,900,000 1,900,000
Puerto Rico Infrastructure Fin. Auth. Participating VRDN,
Series 1997 A, 3.75%
(Liquidity Facility CoreStates Bank) (c) 10,385,000 10,385,000
Puerto Rico Pwr. Auth. Pwr. Rev. Participating VRDN (c):
Series PA-205, 3.92%,
(Liquidity Facility Merrill Lynch & Co., Inc.) 8,295,000 8,295,000
Series SGA-44, 3.85%
(Liquidity Facility Societe Generale France) 5,100,000 5,100,000
46,475,000
SHARES
OTHER - 3.0%
Municipal Central Cash Fund (d)(e) 12,802,934 12,802,934
TOTAL INVESTMENTS - 100% $ 425,269,669
Total Cost for Income Tax Purposes $ 425,269,669
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Information in this report regarding holdings by state and
security types do not reflect the holdings of the Municipal Central
Cash Fund. A listing of the Municipal Central Cash Fund's holdings as
of it's most recent fiscal period end is available upon request.
(e) At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.89%. The yiled refers to the income earned by
investing in the fund over the seven-day period, expressed as an
annual percentage.
(f) Security purchased on a delayed delivery or when-issued basis (see
Note #2 of Notes to Financial Statements).
INCOME TAX INFORMATION
At November 30, 1997, the fund had a capital loss carryforward of
approximately $18,347 of which $8,092, $2,885 and $7,370 will expire
on November 30, 2002, 2003 and 2005, respectively.
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 425,269,669
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR FUND SHARES SOLD 3,764,619
INTEREST RECEIVABLE 3,370,630
TOTAL ASSETS 432,404,918
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 24
PAYABLE FOR INVESTMENTS PURCHASED ON A 4,915,435
DELAYED DELIVERY BASIS
PAYABLE FOR FUND SHARES REDEEMED 3,925,059
DISTRIBUTIONS PAYABLE 57,276
ACCRUED MANAGEMENT FEE 133,309
OTHER PAYABLES AND ACCRUED EXPENSES 83,932
TOTAL LIABILITIES 9,115,035
NET ASSETS $ 423,289,883
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 423,335,169
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (45,286)
NET ASSETS, FOR 423,335,081 SHARES OUTSTANDING $ 423,289,883
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($423,289,883 (DIVIDED BY) 423,335,081 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INTEREST INCOME $ 7,602,634
EXPENSES
MANAGEMENT FEE $ 825,569
TRANSFER AGENT FEES 288,569
ACCOUNTING FEES AND EXPENSES 41,967
CUSTODIAN FEES AND EXPENSES 9,582
NON-INTERESTED TRUSTEES' COMPENSATION 5,938
REGISTRATION FEES 23,507
AUDIT 14,758
LEGAL 8,774
REPORTS TO SHAREHOLDERS 8,832
MISCELLANEOUS 48
TOTAL EXPENSES BEFORE REDUCTIONS 1,227,544
EXPENSE REDUCTIONS (17,488) 1,210,056
NET INTEREST INCOME 6,392,578
NET GAIN (LOSS) (26,939)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 6,365,639
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 6,392,578 $ 11,154,435
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) (26,939) (7,370)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 6,365,639 11,147,065
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (6,392,578) (11,154,435)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 667,591,668 993,544,813
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 6,087,398 10,652,203
COST OF SHARES REDEEMED (637,538,867) (956,500,263)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 36,140,199 47,696,753
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 36,113,260 47,689,383
NET ASSETS
BEGINNING OF PERIOD 387,176,623 339,487,240
END OF PERIOD $ 423,289,883 $ 387,176,623
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
BEGINNING OF PERIOD
INCOME FROM INVESTMENT .015 .030 .029 .032 .022 .019
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST (.015) (.030) (.029) (.032) (.022) (.019)
INCOME
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
END OF PERIOD
TOTAL RETURN B, C 1.50% 3.05% 2.98% 3.29% 2.19% 1.87%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 423,290 $ 387,177 $ 339,487 $ 321,870 $ 300,885 $ 288,566
(000 OMITTED)
RATIO OF EXPENSES TO .57% A .58% .59% .61% .60% .61%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .57% A .57% D .58% D .61% .60% .61%
AVERAGE NET ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INTEREST 2.99% A 3.00% 2.93% 3.24% 2.16% 1.87%
INCOME TO AVERAGE
NET ASSETS
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN
ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED INTO VARYING
ARRANGEMENTS WITH THIRD PARTIES WHO EITHER
PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1998 (Unaudited)
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 and Fidelity Connecticut Municipal Money Market Fund (the
money market funds) are funds 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 funds:
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 FUNDS. 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 funds, 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
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for
futures and options transactions, market discount, capital loss
carryforwards and losses deferred due to wash sales and 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
income or gain remaining at fiscal year end is distributed in the
following year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the income fund
less than 180 days are subject to a short-term trading fee equal to
.50% of the proceeds of the redeemed shares. The fee, which is
retained by the income 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 Fidelity
Investments Money Management, Inc. (formerly 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 earned 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 each applicable
fund's schedule of investments.
The funds may receive compensation for interest forgone in the
purchase of a delayed delivery security. With respect to purchase
commitments, each applicable fund identifies securities as segregated
in its custodial records with a value at
2. OPERATING POLICIES -
CONTINUED
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.
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 $27,682,858 and $11,865,536, respectively.
The market value of futures contracts opened and closed during the
period amounted to $29,723,590 and $40,040,977, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the investment adviser for Fidelity Connecticut
Municipal Money Market Fund, FMR receives a monthly fee that is
calculated on the basis of a group fee rate plus a fixed individual
fund fee rate applied to the average net assets of the fund. The group
fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR.
The rates ranged from .1100% to .3700% for the period. The annual
individual fund fee rate is .25%. In the event that these rates were
lower than the contractual rates in effect during the period, FMR
voluntarily implemented the above rates, as they resulted in the same
or lower management fee. For the period, the management fee was
equivalent to an annualized rate of .39% of average net
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
assets for Fidelity Connecticut Municipal Money Market Fund.
As the investment advisor for Spartan Connecticut Municipal Income
Fund and Spartan Connecticut Municipal Money Market Fund, 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 annualized rate of .55% and .50% of average net assets for Spartan
Connecticut Municipal Income Fund and Spartan Connecticut Municipal
Money Market Fund, respectively.
FMR also bears the cost of providing shareholder services to Spartan
Connecticut Municipal Income Fund and Spartan Connecticut Municipal
Money Market Fund. To offset the cost of providing these services, FMR
or its affiliates collect certain transaction fees from Spartan
Connecticut Municipal Money Market Fund's shareholders which amounted
to $1,050 for the period.
SUB-ADVISER FEE. As the money market funds' investment sub-adviser,
Fidelity Investments Money Management, Inc. (formerly 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.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian and transfer and shareholder servicing agent for Fidelity
Connecticut Municipal Money Market Fund. UMB has entered into a
sub-contract with Fidelity Service Company, Inc. (FSC), an affiliate
of FMR, under which FSC performs the activities associated with the
fund's transfer and shareholder servicing agent and accounting
functions. The fund pays account fees and asset-based fees that vary
according to account size and type of account. FSC pays for
typesetting, printing and mailing of all shareholder reports, except
proxy statements. The accounting fee is based on the level of average
net assets for the month plus out-of-pocket expenses.
For the period, the transfer agent fees were equivalent to an
annualized rate of .14% of average net assets for Fidelity Connecticut
Municipal Money Market Fund.
5. EXPENSE REDUCTIONS.
Fidelity Connecticut Municipal Money Market 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, Fidelity
Connecticut Municipal Money Market Fund's custodian and transfer agent
fees were reduced by $374 and $17,114, respectively, under these
arrangements.
FMR has entered into arrangements on behalf of Spartan Connecticut
Municipal Income Fund and Spartan Connecticut Municipal Money Market
Fund with each fund's custodian and transfer agent whereby credits
realized as a result of uninvested cash balances were used to reduce a
portion of each fund's expenses. During the period, Spartan
Connecticut Municipal Income Fund and Spartan Connecticut Municipal
Money Market Fund's expenses were reduced by $16,498 and $7,534,
respectively, under these arrangements.
PROXY VOTING RESULTS
A special meeting of Fidelity Court Street Trust II's shareholders was
held on December 17, 1997. The results of votes taken among
shareholders on proposals before them are listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
# OF % OF
SHARES VOTED SHARES VOTED
RALPH F. COX
AFFIRMATIVE 742,366,479.909 96.787
WITHHELD 24,642,287.090 3.213
TOTAL 767,008,766.999 100.000
PHYLLIS BURKE DAVIS
AFFIRMATIVE 741,858,140.779 96.721
WITHHELD 25,150,626.220 3.279
TOTAL 767,008,766.999 100.000
ROBERT M. GATES
AFFIRMATIVE 740,326,691.979 96.521
WITHHELD 26,682,075.020 3.479
TOTAL 767,008,766.999 100.000
EDWARD C. JOHNSON 3D
AFFIRMATIVE 742,526,984.799 96.808
WITHHELD 24,481,782.200 3.192
TOTAL 767,008,766.999 100.000
E. BRADLEY JONES
AFFIRMATIVE 738,558,877.569 96.291
WITHHELD 28,449,889.430 3.709
TOTAL 767,008,766.999 100.000
DONALD J. KIRK
AFFIRMATIVE 742,698,625.339 96.831
WITHHELD 24,310,141.660 3.169
TOTAL 767,008,766.999 100.000
# OF % OF
SHARES VOTED SHARES VOTED
PETER S. LYNCH
AFFIRMATIVE 742,804,693.399 96.844
WITHHELD 24,204,073.600 3.156
TOTAL 767,008,766.999 100.000
WILLIAM O. MCCOY
AFFIRMATIVE 742,777,102.439 96.841
WITHHELD 24,231,664.560 3.159
TOTAL 767,008,766.999 100.000
GERALD C. MCDONOUGH
AFFIRMATIVE 740,489,812.019 96.543
WITHHELD 26,518,954.980 3.457
TOTAL 767,008,766.999 100.000
MARVIN L. MANN
AFFIRMATIVE 742,492,623.319 96.804
WITHHELD 24,516,143.680 3.196
TOTAL 767,008,766.999 100.000
ROBERT C. POZEN
AFFIRMATIVE 742,603,015.859 96.818
WITHHELD 24,405,751.140 3.182
TOTAL 767,008,766.999 100.000
THOMAS R. WILLIAMS
AFFIRMATIVE 740,510,918.469 96.545
WITHHELD 26,497,848.530 3.455
TOTAL 767,008,766.999 100.000
PROPOSAL 2
To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants of the funds.
Spartan Connecticut Municipal Money Market Fund votes
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 89,367,312.050 97.676
AGAINST 1,224,929.980 1.339
ABSTAIN 901,600.600 .985
TOTAL 91,493,842.630 100.000
Fidelity Connecticut Municipal Money Market Fund votes
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 194,056,121.260 95.491
AGAINST 5,197,729.550 2.558
ABSTAIN 3,965,776.830 1.951
TOTAL 203,219,627.640 100.000
PROPOSAL 3
To amend the Trust Instrument to provide dollar-based voting rights
for shareholders of Fidelity Court Street Trust II.
Trust Votes
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 689,235,885.364 89.860
AGAINST 38,356,553.755 5.001
ABSTAIN 39,416,327.880 5.139
TOTAL 767,008,766.999 100.000
Spartan Connecticut Municipal Money Market Fund Votes
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 83,536,170.310 91.303
AGAINST 4,742,611.710 5.183
ABSTAIN 3,215,060.610 3.514
TOTAL 91,493,842.630 100.000
Fidelity Connecticut Municipal Money Market Fund Votes
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 181,932,922.170 89.525
AGAINST 12,430,210.220 6.117
ABSTAIN 8,856,495.250 4.358
TOTAL 203,219,627.640 100.000
PROPOSAL 4
To approve an amended management contract for Fidelity Connecticut
Municipal Money Market Fund.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 181,282,302.520 89.205
AGAINST 10,540,854.300 5.187
ABSTAIN 11,396,470.820 5.608
TOTAL 203,219,627.640 100.000
PROPOSAL 5
To amend Fidelity Connecticut Municipal Money Market Fund's
fundamental investment limitation concerning the issuance of senior
securities.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 177,808,880.840 87.496
AGAINST 13,395,080.430 6.591
ABSTAIN 12,015,666.370 5.913
TOTAL 203,219,627.640 100.000
PROPOSAL 6
To amend Fidelity Connecticut Municipal Money Market Fund's and
Spartan Connecticut Municipal Money Market Fund's fundamental
investment limitation concerning the concentration of investments in a
single industry.
Spartan Connecticut Municipal Money Market Fund Votes
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 80,073,500.950 87.518
AGAINST 6,486,726.060 7.090
ABSTAIN 4,933,615.620 5.392
TOTAL 91,493,842.630 100.000
Fidelity Connecticut Municipal Money Market Fund Votes
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 178,867,562.080 88.017
AGAINST 13,388,671.000 6.588
ABSTAIN 10,963,394.560 5.395
TOTAL 203,219,627.640 100.000
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUNDS
Fidelity Investments
Money Management, Inc.
Merrimack, NH
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 FUNDS
George A. Fischer, Vice President -
INCOME FUND
Scott A. Orr, Vice President -
MONEY MARKET FUNDS
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
Exchanges/Redemptions 1-800-544-7777
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 (registered trademark) 1-800-544-5555
AUTOMATED LINES FOR QUICKEST SERVICE
SPARTAN(registered trademark)
(REGISTERED TRADEMARK)
FLORIDA
MUNICIPAL
FUNDS
SEMIANNUAL REPORT
MAY 31, 1998
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 MANAGERS' 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 20 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
PERFORMANCE 24 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 26 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 28 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS
AND ONE YEAR.
INVESTMENTS 29 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.
PROXY VOTING RESULTS 44
</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:
While low interest rates and subdued inflation provided support for
stock and bond markets in the U.S. during the first five months of
1998, concerns about continuing economic and political difficulties in
Asia colored their performance. The stock market reached record
heights due to stronger-than-expected corporate earnings, but
retreated at times when concerns surfaced about how the Asian
volatility would affect business prospects. The bond market benefited
from these retreats, as investors sought alternatives offering lower
volatility.
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 MAY 31, 1998 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
SPARTAN FL MUNICIPAL INCOME 3.57% 8.99% 37.56% 63.64%
LB FLORIDA MUNICIPAL BOND 3.66% 9.28% N/A N/A
FLORIDA MUNICIPAL DEBT FUNDS AVERAGE 3.57% 9.03% 33.57% N/A
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period
- - in this case, six months, 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 six months average represents a
peer group of 62 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 MAY 31, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FL MUNICIPAL INCOME 8.99% 6.59% 8.25%
LB FLORIDA MUNICIPAL BOND 9.28% N/A N/A
FLORIDA MUNICIPAL DEBT FUNDS AVERAGE 9.03% 5.95% N/A
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 by annualizing
the result.)
$10,000 OVER LIFE OF FUND
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
1997/11/30 15728.03 15250.64
1997/12/31 15941.23 15473.15
1998/01/31 16156.40 15632.83
1998/02/28 16143.45 15637.52
1998/03/31 16136.19 15651.28
1998/04/30 16043.28 15580.69
1998/05/29 16284.98 15827.34
IMATRL PRASUN SHR__CHT 19980531 19980612 104112 R00000000000077
$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 May 31, 1998,
the value of the investment would have grown to $16,290 - a 62.90%
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
$15,827 - a 58.27% 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31,
1998 1997 1996 1995 1994 1993
DIVIDEND RETURN 2.34% 5.00% 5.10% 6.31% 5.01% 6.10%
CAPITAL RETURN 1.23% 1.69% 0.49% 14.78% -12.20% 7.42%
TOTAL RETURN 3.57% 6.69% 5.59% 21.09% -7.19% 13.52%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DIVIDENDS AND YIELD
PERIODS ENDED MAY 31, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 4.50(CENTS) 26.40(CENTS) 53.07(CENTS)
ANNUALIZED DIVIDEND RATE 4.63% 4.60% 4.65%
30-DAY ANNUALIZED YIELD 4.17% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 6.52% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on an average share price of
$11.44 over the past one month, $11.50 over the past six months and
$11.41 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%
1998 federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
Investor sentiment, shifting supply
and demand conditions, and
volatility in Asia played key roles
in the municipal bond market during
the six months that ended May 31,
1998. During this period, the
Lehman Brothers Municipal Bond
Index - a measure of the municipal
bond market - returned 3.78%.
To compare, the Lehman Brothers
Aggregate Bond Index - a
measure of the investment-grade
taxable bond market in the U.S. -
returned 4.09%. In late 1997,
volatility in Asia helped prop up the
muni bond market. Investors felt that
currency devaluations in that region
would translate into cheaper prices
for Asian goods and help control
the inflation that can eat into bonds'
fixed payments. Since the beginning
of 1998, though, muni bond supply
increased as many issuers took
advantage of lower interest rates
to refinance their debt at lower rates.
That, combined with softening
demand, dampened the
performance of muni bonds in
early 1998. On top of that, the
municipal bond market
experienced extremely heavy
issuance in March and April, as
issuers rushed to market before the
largest deal in municipal market
history took place in May - a
$3.5 billion issuance by Long Island
Power Authority. This heavy
supply, coupled with only
intermittent demand, put
downward pressure on municipal
bonds in April. Renewed fears of
economic and political dislocation in
Asia attracted investors to all
sectors of the bond market in May,
but, overall, municipals lagged
taxable issues through the first
five months of 1998.
NOTE TO SHAREHOLDERS: Effective July 13, 1998, after the period
covered by this report, Christine Thompson became Portfolio Manager of
Spartan Florida Municipal Income Fund. The following is an interview
with Jonathan Short, who managed the fund during the period covered by
this report, and Christine Thompson, who gives her outlook and
discusses her investment approach.
Q. HOW DID THE FUND PERFORM, JON?
J.S. For the six-month period that ended May 31, 1998, the fund had a
total return of 3.57%. To get a sense of how the fund did relative to
its competitors, the Florida municipal debt funds average returned
3.57% for the same six-month period, according to Lipper Analytical
Services. Additionally, the Lehman Brothers Florida Municipal Bond
Index - a measure of the performance of the Florida municipal bond
market - returned 3.66% for the same six-month period. For the 12
months that ended May 31, 1998, the fund returned 8.99%, while the
Florida municipal debt funds average returned 9.03% and the Lehman
Brothers Florida Municipal Bond Index returned 9.28%.
Q. WHICH OF THE FUND'S INVESTMENTS PERFORMED PARTICULARLY WELL DURING
THE PAST SIX MONTHS? WHICH DETRACTED FROM PERFORMANCE?
J.S. Bonds rated Baa by Moody's Investors Services performed extremely
well throughout the period and helped the fund's performance. Faced
with falling interest rates, yield-hungry investors increasingly
sought out these bonds because they offered a yield advantage over
higher-quality bonds. What's more, there was a very small supply of
these bonds during the period. Strong demand pushed up against low
supply and boosted the prices of most Baa-rated bonds. As for
disappointments, housing bonds - which made up 2.3% of the fund's
investments at the end of the period - lagged the overall Florida
municipal market. Housing bonds experienced increased prepayment
activity when interest rates fell, because mortgage borrowers
refinanced their debt in order to lower their interest costs. While
prepayment is good for the borrower, it can be bad for housing bond
holders because it can force them to reinvest at lower interest rates.
However, the fund continued to hold on to most of the fund's housing
bonds because they carried attractive yields.
Q. WERE THERE ANY CHANGES IN THE WAY THE FUND'S INVESTMENTS WERE
ALLOCATED AMONG BONDS WITH VARIOUS MATURITIES?
J.S. Yes, there were. The fund increasingly emphasized bonds in the
intermediate market - meaning bonds with maturities of around five to
15 years. That was done because the yield curve - which is a graphical
representation of the yield of bonds by ascending maturity dates - was
relatively flat beyond 15 years. Up to about a 15-year maturity, an
investor was paid an appropriate amount of added income for each
additional year of maturity. It is this additional income that
compensates the investor for the added risk taken on by investing in
the longer-maturity part of the market. But for bonds with maturities
of 15 years or longer, the extra income for each successive year was
less attractive given the level of risk inherent in longer-term bonds.
Throughout the period, the fund's duration - which measures its
sensitivity to changing interest rates - was kept in line with the
Florida municipal bond market as a whole, as represented by the Lehman
Brothers Florida Municipal Bond Index.
Q. TURNING TO YOU CHRISTINE, WHAT'S YOUR OUTLOOK?
A. Municipals lagged taxable bonds throughout much of the past six
months, and, as a result, currently are priced inexpensively compared
to U.S. Treasury securities, for example. Municipals became cheap
relative to their Treasury counterparts because of a supply and demand
imbalance. In the first five months of 1998, the supply of municipals
was actually quite large compared to previous years, while the U.S.
budgetary surplus has decreased the supply of Treasuries
significantly. Cities, states, counties and other issuers sought to
take advantage of relatively low interest rates to refinance their
older, more expensive debt. As more and more of these refinancings
occurred, the supply of municipal bonds grew. On the other side of the
equation, demand - while remaining firm - didn't keep pace with the
additional supply. In my view, municipals may now be poised to play
catch-up with Treasuries and could be in for a period of relatively
good performance. For the remainder of the year, I expect that
municipal refinancing activity will taper off, which would likely be a
positive for municipal bonds as long as demand remains firm or
increases.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
CHRISTINE THOMPSON ON HER
INVESTMENT APPROACH:
"My investment approach is
similar to the previous manager's,
so I don't anticipate making any
significant changes to the fund.
Like Jonathan, I use the Lehman
Brothers Florida Municipal Bond
Index as a representation of the
overall market in which the fund
invests. The index includes most
of the universe of Florida
municipal bonds. I manage the
fund to have similar overall
interest-rate risk to its benchmark
index, but, beyond that, the fund
can vary significantly from the
index. With respect to sector, issuer
and structural composition, the
fund's holdings reflect my
research conclusions on the
relative value of bonds."
FUND FACTS
GOAL: high current tax-free
income and exemption from
the Florida intangible tax by
normally investing in
investment-grade municipal
securities
FUND NUMBER: 427
TRADING SYMBOL: FFLIX
START DATE: March 16, 1992
SIZE: as of May 31, 1998,
more than $431 million
MANAGER: Christine Thompson,
since July 13, 1998; manager,
various Fidelity and Spartan
municipal income funds;
joined Fidelity in 1985
(checkmark)
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
TRANSPORTATION 16.1 15.6
ELECTRIC REVENUE 15.7 15.1
HEALTH CARE 15.4 17.2
ESCROWED/PRE-REFUNDED 10.4 6.0
SPECIAL TAX 10.4 10.2
AVERAGE YEARS TO MATURITY AS OF MAY 31, 1998
6 MONTHS AGO
YEARS 12.0 12.2
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 MAY 31, 1998
6 MONTHS AGO
YEARS 6.7 6.9
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF MAY 31, 1998 AS OF NOVEMBER 30, 1997
AAA 64.2%
AA, A 17.8%
BAA 10.5%
NON-RATED 3.5%
SHORT-TERM
INVESTMENTS 4.0%
AAA 58.5%
AA, A 20.0%
BAA 10.4%
NON-RATED 3.8%
SHORT-TERM
INVESTMENTS 7.3%
ROW: 1, COL: 1, VALUE: 64.2
ROW: 1, COL: 2, VALUE: 17.8
ROW: 1, COL: 3, VALUE: 10.5
ROW: 1, COL: 4, VALUE: 3.5
ROW: 1, COL: 5, VALUE: 4.0
ROW: 1, COL: 6, VALUE: 4.0
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: 3.8
ROW: 1, COL: 5, VALUE: 7.3
ROW: 1, COL: 6, VALUE: 0.0
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 FLORIDA MUNICIPAL INCOME FUND
INVESTMENTS MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENTS
MUNICIPAL BONDS - 96.0%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - 94.7%
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 $ 3,195,647
6.05% 11/15/09 (Escrowed to Maturity) (d) Baa1 6,230,000
6,892,498
Broward County Hsg. Fin. Auth. Single-Family
Mtg. Rev. 6.65% 8/1/21 (GNMA Coll.) (c) Aaa 1,225,000 1,323,000
Broward County Resource Recovery Rev. (SES
Broward Co. LP South Proj.) 7.95% 12/1/08 A3 10,770,000 11,614,907
Broward County Spl. Oblig. Rfdg.:
5.50% 1/1/02 (AMBAC Insured) Aaa 1,365,000 1,427,476
5.50% 1/1/04 (AMBAC Insured) Aaa 2,320,000 2,464,420
5.50% 1/1/05 (AMBAC Insured) Aaa 2,585,000 2,756,230
Dade County Aviation Rev. Rfdg.:
(Miami Int'l. Arpt.):
Series A
5.75% 10/1/03 (FSA Insured) (c) Aaa 1,800,000 1,919,844
5.75% 10/1/04 (FSA Insured) (c) Aaa 5,000,000 5,374,100
Series B, 5% 10/1/11 (FSA Insured) (c) Aaa 3,300,000 3,332,637
Series B, 6.30% 10/1/05 (AMBAC Insured) Aaa 1,200,000 1,359,924
Series C, 5.50% 10/1/11 (MBIA Insured) Aaa 5,200,000 5,556,772
Series Y, 5.30% 10/1/05 Aa3 3,460,000 3,670,956
Dade County Gen. Oblig.:
Series A, 6.25% 10/1/06 (MBIA Insured) Aaa 1,575,000 1,778,931
Series DD, 7.70% 10/1/07 (AMBAC Insured) Aaa 1,820,000 2,271,415
Dade County Guaranteed Entitlement Rev.
(Cap. Appreciation) Series B:
Rfdg. 0% 2/1/02 (MBIA Insured) Aaa 1,810,000 1,547,822
0% 8/1/18 (AMBAC Insured)
(Pre-Refunded to 2/1/06 @ 40.446) (d) Aaa 14,835,000 4,282,568
Dade County Pub. Impt. Rev. 7.50% 6/1/04
(FSA Insured) (e) Aaa 2,400,000 2,811,480
Dade County Resource Recovery Facs. Rev. Rfdg.
5.50% 10/1/09 (AMBAC Insured) (c) Aaa 4,000,000 4,223,960
Dade County Seaport Rev. Rfdg.:
6.25% 10/1/05 (MBIA Insured) Aaa 2,995,000 3,352,783
6.50% 10/1/26 (Pre-Refunded to
10/1/01 @ 101) (AMBAC Insured) (d) Aaa 7,500,000 8,156,175
Series 95:
6.20% 10/1/09 (MBIA Insured) Aaa 1,845,000 2,116,750
5.75% 10/1/15 (MBIA Insured) Aaa 5,100,000 5,473,932
Dade County School Dist. Rev. 5.50%
8/1/12 (MBIA Insured) Aaa 2,000,000 2,102,580
Dade County Spl. Oblig. Rev. Rfdg. (Cap.
Appreciation) Series B:
0% 10/1/03 (AMBAC Insured) Aaa 4,160,000 3,300,710
0% 10/1/04 (AMBAC Insured)
(Escrowed to Maturity) (d) Aaa 5,045,000 3,842,322
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County Wtr. & Swr. Sys. Rev. :
6.25% 10/1/06 (FGIC Insured) Aaa $ 1,500,000 $ 1,694,220
6.25% 10/1/08 (FGIC Insured) Aaa 1,100,000 1,257,135
6.25% 10/1/10 (FGIC Insured) Aaa 1,000,000 1,158,750
Dunedin Hosp. Rev. Rfdg. (Mease Health
Care Sys.) 5.25% 11/15/06 (MBIA Insured) Aaa 1,400,000 1,477,518
Dunedin Util Sys. Rev. Rfdg. 6.25% 10/1/11
(FGIC Insured) Aaa 1,360,000 1,576,961
Duval County Hsg. Fin. Auth. Single-Family Mtg.
Rev. Series C, 7.70% 9/1/24 (FGIC Insured)
(GNMA Coll.) Aaa 570,000 605,334
Duval County School Dist. Rfdg. 6.30% 8/1/06
(AMBAC Insured) Aaa 5,000,000 5,470,500
Escambia County Health Facs. Auth. Health Facs.
Rev. Rfdg. (Baptist Hosp. & Baptist Manor)
Series B:
6% 10/1/14 BBB+ 2,825,000 2,969,781
6.75% 10/1/14 BBB+ 3,250,000 3,595,800
Escambia County Poll. Cont. Rev.
(Champion Int'l. Corp. Proj.) :
6.90% 8/1/22 (c) Baa1 6,125,000 6,755,814
6.40% 9/1/30 (c) Baa1 3,000,000 3,257,220
Escambia County Sales Tax Rev. Rfdg.
5.50% 1/1/07 (FGIC Insured) Aaa 2,000,000 2,130,640
Escambia County Util. Auth. Util. Sys. Rev.
Series B, 6.25% 1/1/15 (FGIC Insured) Aaa 1,500,000 1,727,940
Florida Board of Ed. Cap. Outlay (Pub. Ed.):
Series 1994-C, 5.40% 6/1/03 Aa2 1,060,000 1,118,374
Series 1994-C, 5.40% 6/1/06 Aa2 1,500,000 1,604,265
Series E, 5.25% 6/1/23 Aa2 1,750,000 1,760,308
Series F, 5.50% 6/1/17 Aa2 3,000,000 3,095,040
Florida Div. Board Fin. Dept. Gen. Svcs. Rev.
(Dept. of Natural Resources Preservation 2000)
Series A:
5.75% 7/1/05 (FGIC Insured) Aaa 3,000,000 3,257,250
6.75% 7/1/08 (AMBAC Insured)
(Pre-Refunded to 7/1/01 @ 102) (d) Aaa 1,350,000 1,480,343
5.70% 7/1/09 (AMBAC Insured) Aaa 3,000,000 3,209,670
5.75% 7/1/11 (AMBAC Insured) Aaa 3,000,000 3,226,140
Florida Gen. Oblig. Dept. of Trans.
(Right of Way) Series B, 5.50% 7/1/09 Aa2 3,810,000 4,082,301
Florida Gen. Oblig. Senior Lien (Jacksonville
Trans.) Series A, 5.75% 7/1/04 Aa2 1,955,000 2,114,626
Florida Hsg. Fin. Agcy. Rfdg. (Multi-Family Park
Colony Proj.) Series D, 5.10% 4/1/13,
LOC Mellon Bank, NA AA- 2,500,000 2,533,725
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Hsg. Fin. Agcy. Rfdg. (Single-Family Mtg.)
Series A:
6.35% 7/1/14 (GNMA Coll.) (c) Aaa $ 1,210,000 $ 1,295,027
6.55% 7/1/14 (GNMA Coll.) (c) Aaa 1,405,000 1,518,608
Series B, 6.55% 7/1/17 (GNMA
Coll.) (c) Aaa 1,210,000 1,300,919
Florida Mid-Bay Bridge Auth. Rev. Series A:
7.50% 10/1/17 - 1,700,000 1,874,114
6.875% 10/1/22 (Escrowed to Maturity) (d) - 3,000,000 3,713,970
Florida Muni. Pwr. Agcy. Rev. Rfdg.
(Stanton II Proj.):
4.50% 10/1/16 (AMBAC Insured) Aaa 4,400,000 4,107,092
4.50% 10/1/27 (AMBAC Insured) Aaa 7,955,000 7,155,363
Florida Tpk. Auth. Tpk. Rev. (Dept. of Trans.):
Series A:
5.50% 7/1/05 (AMBAC Insured) Aaa 3,250,000 3,479,580
5.50% 7/1/06 (AMBAC Insured) Aaa 3,000,000 3,245,550
5.25% 7/1/09 (FGIC Insured) Aaa 6,740,000 7,086,436
6.25% 7/1/09 (FGIC Insured)
(Pre-Refunded to 7/1/02 @ 101) (d) Aaa 1,825,000 1,986,348
5.50% 7/1/14 (FGIC Insured) Aaa 1,500,000 1,584,135
Gainesville Util. Sys. Rev.:
Rfdg. Series B, 6.50% 10/1/10 Aa3 1,600,000 1,881,488
Rfdg. Series B, 5.50% 10/1/13 Aa3 1,500,000 1,566,000
Series A, 5.75% 10/1/04 Aa 1,000,000 1,079,990
Greater Orlando Aviation Auth. Aprt. Facs. Rev.:
Series A, 6.50% 10/1/05 (FGIC Insured) (c) Aaa 3,550,000 3,941,068
5.25% 10/1/23 (FGIC Insured) (c) Aaa 3,000,000 3,008,730
Hillsborough County Aviation Auth. Rev.
(Tampa Int'l. Arpt. Proj.) Series A:
6.90% 10/1/11 (Pre-Refunded to
10/1/99 @ 102) (FGIC Insured) (d) Aaa 1,980,000 2,094,404
6.90% 10/1/11 (FGIC Insured) Aaa 2,270,000 2,399,935
Hillsborough County Cap. Impt. Prog. Rev. Rfdg.
6% 8/1/06 (FGIC Insured) Aaa 1,000,000 1,110,280
Hillsborough County Gen. Oblig. Rfdg.
(Envir. Sensitive Lands Acquisition & Protection)
6% 7/1/02 (AMBAC Insured) Aaa 2,080,000 2,227,555
Hillsborough County Port Dist. Spl. Rev. Rfdg.
(Tampa Port Auth.):
6.50% 6/1/03 (FSA Insured) (c) Aaa 2,000,000 2,192,420
6.50% 6/1/05 (FSA Insured) (c) Aaa 2,000,000 2,240,340
Hillsborough County School Board Ctfs. of Prtn.
(Master Lease Prog.) 5.50% 7/1/14
(MBIA Insured) Aaa 4,370,000 4,694,167
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Hillsborough County Util. Rev. Rfdg.
(Cap. Appreciation) Series A:
0% 8/1/05 (MBIA Insured) Aaa $ 6,500,000 $ 4,734,665
0% 8/1/06 (MBIA Insured) Aaa 5,000,000 3,457,200
0% 8/1/07 (MBIA Insured) Aaa 7,000,000 4,606,000
Indian River County Wtr. & Swr. Rev. Rfdg.
Series A, 5.50% 9/1/11 (FGIC Insured) Aaa 2,000,000 2,170,280
Jacksonville Elec. Auth. Rev. Rfdg.
(St. John River Issue 2):
Series 5, 7% 10/1/09 Aa2 2,490,000 2,621,572
Series 10, 6.50% 10/1/03 Aa2 1,500,000 1,662,405
Jacksonville Excise Taxes Rev.:
Rfdg. 6.25% 10/1/05 (AMBAC Insured) Aaa 1,000,000 1,094,480
Series A, 6.50% 10/1/11 (AMBAC Insured)
(Pre-Refunded to 10/1/99 @ 102) (d) Aaa 1,200,000 1,263,984
Series B, 5.60% 10/1/08 (FGIC Insured) (c) Aaa 2,300,000 2,376,866
Jacksonville Health Facs. Auth. Hosp. Rev.:
(Charity Obligated Group) Series A:
5.50% 8/15/05 (MBIA Insured) Aaa 1,600,000 1,711,600
5.25% 8/15/08 (MBIA Insured) Aaa 3,720,000 3,928,804
Rfdg. (Baptist Med. Ctr. Proj.) Series A,
7.30 6/1/19 (MBIA Insured)
(Pre-Refunded to 6/1/99 @ 102) (d) Aaa 500,000 526,700
Jacksonville Health Facs. Auth. Ind. Dev. Rev. Rfdg.
(Cypress Village Proj.) (Nat'l. Benevolent Assoc.):
7% 12/1/14 Baa1 1,000,000 1,105,040
7% 12/1/22 Baa1 2,000,000 2,209,220
6.25% 12/1/23 Baa1 2,710,000 2,902,139
8% 12/1/24 Baa1 2,740,000 3,220,706
Jacksonville Ind. Dev. Rev. Rfdg. (Cargill, Inc.
Proj.) 6.40% 3/1/11 (g) AA- 1,250,000 1,341,738
Jacksonville Sales Tax Rev.
(River City Renaissance Proj.):
6% 10/1/02 (FGIC Insured) Aaa 1,500,000 1,609,365
5.65% 10/1/14 (FGIC Insured) Aaa 1,900,000 2,012,613
Key West Util. Board Elec. Rev. Rfdg.
(Cap. Appreciation) 0% 10/1/14
(AMBAC Insured) Aaa 6,755,000 2,978,820
Lakeland Elec. & Wtr. Rev.:
Rfdg. (Jr. Sub-Lien):
6.25% 10/1/02 (FGIC Insured) Aaa 5,180,000 5,608,541
6.50% 10/1/06 (FGIC Insured) Aaa 2,200,000 2,524,566
6.50% 10/1/07 (FGIC Insured) Aaa 1,095,000 1,267,014
(Cap. Appreciation) 0% 10/1/09
(FGIC Insured) Aaa 2,840,000 1,681,820
Leesburg Hosp. Rev. Rfdg.
(Leesburg Reg'l. Med. Ctr. Proj.) :
Series A, 5.60% 7/1/08 A3 5,000,000 5,289,650
Series B, 5.625% 7/1/13 A3 2,795,000 2,882,651
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Leon County Cap. Impt. Rev. Rfdg. Series B:
5.25% 10/1/03 (AMBAC Insured) (e) Aaa $ 1,635,000 $ 1,676,333
5.25% 10/1/04 (AMBAC Insured) (e) Aaa 1,720,000 1,766,148
5.25% 10/1/08 (AMBAC Insured) (e) Aaa 2,115,000 2,166,458
5.25% 10/1/09 (AMBAC Insured) (e) Aaa 2,225,000 2,283,295
5.25% 10/1/11 (AMBAC Insured) (e) Aaa 2,465,000 2,511,539
Leon County Spl. Tax Rev. Rfdg. 5.50% 10/1/07
(MBIA Insured) Aaa 1,000,000 1,081,300
Melbourne Arpt. Rev. Rfdg.:
5.75% 10/1/98 (MBIA Insured) (c) Aaa 205,000 206,396
5.75% 10/1/99 (MBIA Insured) (c) Aaa 215,000 219,747
6.25% 10/1/00 (MBIA Insured) (c) Aaa 230,000 240,750
6.25% 10/1/01 (MBIA Insured) (c) Aaa 240,000 255,036
6.25% 10/1/02 (MBIA Insured) (c) Aaa 260,000 280,015
6.25% 10/1/03 (MBIA Insured) (c) Aaa 270,000 294,473
6.50% 10/1/04 (MBIA Insured) (c) Aaa 290,000 323,782
6.50% 10/1/05 (MBIA Insured) (c) Aaa 310,000 351,025
6.50% 10/1/06 (MBIA Insured) (c) Aaa 325,000 369,298
6.75% 10/1/07 (MBIA Insured) (c) Aaa 350,000 407,530
6.75% 10/1/08 (MBIA Insured) (c) Aaa 375,000 439,178
6.75% 10/1/09 (MBIA Insured) (c) Aaa 400,000 472,400
6.75% 10/1/10 (MBIA Insured) (c) Aaa 425,000 506,133
Naples Hosp. Rev. Rfdg.
(Naples Commty. Hosp., Inc. Proj.)
5.10% 10/1/07 (MBIA Insured) Aaa 1,500,000 1,554,615
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 1,038,417
North Miami Edl. Facs. Rev.
(Johnson & Wales Univ. Proj.)
Series A, 6.125% 4/1/20 - 6,605,000 6,898,526
Orange County Health Facs. Auth. Hosp. Rev.:
(Orlando Reg'l. Healthcare) Series A,
6.25% 10/1/18 (MBIA Insured) Aaa 2,500,000 2,903,150
Rfdg. (Adventist Health Sys.) 5.75% 11/15/05
(AMBAC Insured) Aaa 2,000,000 2,166,040
Orange County Hsg. Fin. Auth. Single-Family
Mtg. Rev. (Mtg. Backed Securities Prog.)
6.40% 10/1/14 (GMNA Coll.) (c) AAA 1,465,000 1,581,790
Orange County Tourist Dev. Tax Rev. Rfdg.
Series A, 5.85% 10/1/08 (MBIA Insured) Aaa 1,795,000 1,992,594
Orlando & Orange County Expressway Auth.
Rev. 5.097% 7/1/04 (FGIC Insured) Aaa 2,200,000 2,296,910
Orlando Util. Commission Wtr. & Elec. Rev.:
Rfdg.:
6% 10/1/10 Aa1 2,505,000 2,828,846
Sub-Series A, 5% 10/1/20 Aa2 5,745,000 5,623,838
Sub-Series D, 6.75% 10/1/17 Aa2 7,000,000 8,487,430
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Orlando Util. Commission Wtr. & Elec. Rev.: - continued
Sub-Series A, 6.50% 10/1/20
(Pre-Refunded to 10/1/01 @ 102) (d) Aaa $ 5,055,000 $ 5,533,355
5.538% 10/31/13 Aa2 9,400,000 9,759,174
Palm Beach County Health Facs. Auth. Rev.:
(Retirement Commty.-Adult Commty. Total
Svc. Inc.) 5.625% 11/15/20 A- 2,500,000 2,583,650
(Waterford Proj.) 5.50% 10/1/15 BBB 2,000,000 2,006,920
Pasco County Solid Waste Disp. & Resource
Recovery Sys. Rev.:
5.75% 4/1/04 (AMBAC Insured) (c) Aaa 3,380,000 3,615,011
6% 4/1/10 (AMBAC Insured) (c) Aaa 5,770,000 6,442,551
6% 4/1/11 (AMBAC Insured) (c) Aaa 5,000,000 5,578,350
Pensacola Arpt. Rev. Rfdg. Series A,
6.125% 10/1/18 (MBIA Insured) (c)(e) Aaa 1,500,000 1,621,680
Plantation Health Facs. Auth. Rev.
(Covenant Retirement Commty. Inc.)
7.75% 12/1/22 (Pre-Refunded to
12/1/02 @ 102) (d) - 2,500,000 2,907,125
Polk County Ind. Dev. Auth. Ind. Dev. Rev.
(Winter Haven Hosp.) Series 2,
6.25% 9/1/15 (MBIA Insured) Aaa 1,465,000 1,595,693
Sarasota County Util. Sys. Rev. Rfdg. Series A,
6% 10/1/05 (FGIC Insured) Aaa 1,830,000 2,020,137
Sarasota Wtr. & Swr. Util. Rev. Rfdg.
6.25% 10/1/04 (FGIC Insured) Aaa 1,450,000 1,610,907
South Miami Health Facs. Auth. Hosp. Rev. Rfdg.
(Baptist Health Sys. Oblig. Group)
5.50% 10/1/05 (MBIA Insured) Aaa 1,980,000 2,125,372
St. Lucie (Port of) Util. Rev. Rfdg. & Impt.
Series A, 5.125% 9/1/27 (MBIA Insured) Aaa 4,750,000 4,704,543
Sumter County School Dist. Rev.
(Multi-Dist. Loan Prog.) 7.15% 11/1/15
(FSA Insured) Aaa 1,000,000 1,256,130
Sunrise Util. Sys. Rev. (Cap. Appreciation)
Series A:
0% 10/1/00 (AMBAC Insured) Aaa 1,070,000 974,863
0% 10/1/01 (AMBAC Insured) Aaa 1,225,000 1,069,180
0% 10/1/02 (AMBAC Insured) Aaa 1,000,000 833,760
Sunshine Gov't. Fing. Commission Rev. Series B,
5.50% 10/1/05 (FGIC Insured) Aaa 1,000,000 1,072,770
Tampa Health Auth. Rev. (Catholic Health Sys.)
Series A-1:
5.50% 11/15/08 (MBIA Insured) Aaa 1,000,000 1,071,870
5% 11/15/09 (MBIA Insured) Aaa 1,000,000 1,028,630
4.70% 11/15/10 (MBIA Insured) Aaa 2,000,000 1,989,980
5.50% 11/15/14 (MBIA Insured) Aaa 1,000,000 1,061,280
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Tampa Rev. (Allegheny Health Sys. - St. Joseph):
6.70% 12/1/07 (MBIA Insured)
(Pre-Refunded to 12/1/01 @ 102) (d) Aaa $ 2,535,000 $ 2,800,288
6.75% 12/1/17 (MBIA Insured) Aaa 150,000 165,939
Tampa Sports Auth. Rev. 6% 1/1/05
(MBIA Insured) Aaa 2,235,000 2,446,453
Tarpon Springs Health Facs. Auth. Hosp. Rev.
(Helen Ellis Mem. Hosp. Proj.):
7.50% 5/1/11 BBB- 1,225,000 1,319,494
7.625% 5/1/21 BBB- 4,245,000 4,574,624
Volusia County Edl. Facs. Auth. Rev.
(Embry Riddle Aeronaut Univ.)
6.125% 10/15/16 Baa2 2,500,000 2,680,200
420,554,373
PUERTO RICO - 1.3%
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.:
Rfdg. Series W, 6.50% 7/1/05 (MBIA Insured) Aaa 3,000,000
3,406,950
Series W, 6.50% 7/1/06 (MBIA Insured) Aaa 2,000,000 2,296,460
5,703,410
TOTAL MUNICIPAL BONDS
(Cost $403,401,858) 426,257,783
MUNICIPAL NOTES (B) - 4.0%
FLORIDA - 4.0%
Dade County Health Facs. Auth. Hosp. Rev.
(Miami Childrens Hosp. Proj.) Series 1990,
4%, LOC Barnett Bank, VRDN VMIG 1 400,000 400,000
Dade County Ind. Dev. Auth. Rev.
(Florida Pwr. & Lt. Co. Proj.) Series 1993,
4.05%, VRDN VMIG 1 900,000 900,000
Jacksonville Health Facs. Auth. Hosp. Rev.
(Genesis Rehabilitation Hosp.) Series 1996,
4.05%, LOC Barnett Bank, NA, VRDN VMIG 1 8,900,000 8,900,000
Martin County Poll. Cont. Rev. Rfdg.
(Florida Pwr. & Lt. Co. Proj.) Series 1994,
3.95%, VRDN A-1+ 2,400,000 2,400,000
Pinellas County Health Facs. Auth. Rev.
(Pooled Hosp. Loan Prog.) 4%,
LOC Chase Manhattan Bank, VRDN VMIG 1 1,800,000 1,800,000
MUNICIPAL NOTES (B) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Putnam County Poll. Cont. Rev. Rfdg.
(Florida Power & Light Co. Proj.)
3.95%, VRDN VMIG 1 $ 1,780,000 $ 1,780,000
Tampa Sports Auth. Rev. Participating VRDN,
Series 1997 SGA-61, 4% (Liquidity Facility
Societe Generale) (f) A-1+ 1,600,000 1,600,000
TOTAL MUNICIPAL NOTES
(Cost $17,780,000) 17,780,000
TOTAL INVESTMENTS - 100%
(Cost $421,181,858) $ 444,037,783
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(c) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(d) Security collateralized by an amount sufficient to pay interest
and principal.
(e) Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
(f) Provides evidence of ownership in one or more underlying municipal
bonds.
(g) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
Additional information on each holding is as follows:
ACQUISITION COST
SECURITY DATE
Jacksonville Ind. Dev.
Rev. Rfdg. (Cargill,
Inc. Proj.) 6.40%
3/1/11 7/9/92 $1,250,000
OTHER INFORMATION
The fund invested in securities that are not registered under the
Securities Act of 1933. These securities are subject to legal or
contractual restrictions on resale. At the end of the period,
restricted securities (excluding 144A issues) amounted to $1,341,738
or 0.3% of net assets (see Note 2 of the Notes to Financial
Statements).
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 80.2% AAA, AA, A 84.0%
Baa 7.3% 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 3.5%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investment in securities, is as follows:
Transportation 16.1%
Electric Revenue 15.7
Health Care 15.4
Escrowed/Pre-Refunded 10.4
Special Tax 10.4
General Obligation 9.6
Resource Recovery 7.8
Water & Sewer 7.6
Others (individually less than 5%) 7.0
TOTAL 100.0%
INCOME TAX INFORMATION
At May 31, 1998, the aggregate cost of investment securities for
income tax purposes was $421,214,123. Net unrealized appreciation
aggregated $22,823,660, of which $22,967,685 related to appreciated
investment securities and $144,025 related to depreciated investment
securities.
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
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $421,181,858) - $ 444,037,783
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR FUND SHARES SOLD 118,204
INTEREST RECEIVABLE 5,420,862
TOTAL ASSETS 449,576,849
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 105,553
PAYABLE FOR INVESTMENTS PURCHASED 2,655,585
REGULAR DELIVERY
DELAYED DELIVERY 14,574,584
PAYABLE FOR FUND SHARES REDEEMED 394,785
DISTRIBUTIONS PAYABLE 625,755
ACCRUED MANAGEMENT FEE 199,232
OTHER PAYABLES AND ACCRUED EXPENSES 2,757
TOTAL LIABILITIES 18,558,251
NET ASSETS $ 431,018,598
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 406,050,403
ACCUMULATED UNDISTRIBUTED NET REALIZED 2,112,270
GAIN (LOSS) ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 22,855,925
NET ASSETS, FOR 37,462,419 SHARES OUTSTANDING $ 431,018,598
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $11.51
SHARE ($431,018,598 (DIVIDED BY) 37,462,419 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INTEREST INCOME $ 10,913,847
EXPENSES
MANAGEMENT FEE $ 1,163,893
NON-INTERESTED TRUSTEES' COMPENSATION 883
TOTAL EXPENSES BEFORE REDUCTIONS 1,164,776
EXPENSE REDUCTIONS (7,569) 1,157,207
NET INTEREST INCOME 9,756,640
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 2,593,332
FUTURES CONTRACTS 131,347 2,724,679
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 2,197,107
FUTURES CONTRACTS (27,292) 2,169,815
NET GAIN (LOSS) 4,894,494
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 14,651,134
OPERATIONS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 9,756,640 $ 18,929,649
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 2,724,679 3,031,450
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 2,169,815 3,539,368
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 14,651,134 25,500,467
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (9,756,640) (18,929,649)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN (1,809,138) -
TOTAL DISTRIBUTIONS (11,565,778) (18,929,649)
SHARE TRANSACTIONS 40,843,594 58,696,099
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 7,402,831 11,745,882
COST OF SHARES REDEEMED (28,713,330) (59,766,704)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 19,533,095 10,675,277
FROM SHARE TRANSACTIONS
REDEMPTION FEES 9,384 14,605
TOTAL INCREASE (DECREASE) IN NET ASSETS 22,627,835 17,260,700
NET ASSETS
BEGINNING OF PERIOD 408,390,763 391,130,063
END OF PERIOD $ 431,018,598 $ 408,390,763
OTHER INFORMATION
SHARES
SOLD 3,549,234 5,240,127
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 643,929 1,048,112
REDEEMED (2,498,687) (5,343,762)
NET INCREASE (DECREASE) 1,694,476 944,477
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED NOVEMBER 30,
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 F 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 11.420 $ 11.230 $ 11.180 $ 9.740 $ 11.290 $ 10.520
BEGINNING OF PERIOD
INCOME FROM INVEST- .264 .539 .546 .573 .587 .615
MENT OPERATIONS
NET INTEREST INCOME
NET REALIZED AND .140 .190 .054 1.439 (1.352) .777
UNREALIZED
GAIN (LOSS)
TOTAL FROM INVEST- .404 .729 .600 2.012 (.765) 1.392
MENT OPERATIONS
LESS DISTRIBUTIONS
FROM NET INTEREST (.264) (.539) (.546) (.573) (.587) (.615)
INCOME
FROM NET (.050) - (.005) - (.200) (.010)
REALIZED GAIN
TOTAL DISTRIBUTIONS (.314) (.539) (.551) (.573) (.787) (.625)
REDEMPTION FEES .000 .000 .001 .001 .002 .003
ADDED TO PAID IN
CAPITAL
NET ASSET VALUE, END $ 11.510 $ 11.420 $ 11.230 $ 11.180 $ 9.740 $ 11.290
OF PERIOD
TOTAL RETURN B, C 3.57% 6.69% 5.59% 21.09% (7.19)% 13.52%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF $ 431,019 $ 408,391 $ 391,130 $ 395,991 $ 335,551 $ 428,367
PERIOD
(000 OMITTED)
RATIO OF EXPENSES TO .55% A .55% .55% .55% .54% D .25% D
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .55% A .55% .54% E .55% .54% .25%
AVERAGE NET ASSETS
AFTER EXPENSE
REDUCTIONS
RATIO OF NET INTEREST 4.61% A 4.81% 4.96% 5.37% 5.49% 5.52%
INCOME TO AVERAGE
NET ASSETS
PORTFOLIO TURNOVER RATE 30% A 25% 28% 65% 49% 50%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE FORMER
ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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.
E FMR OR THE FUND HAS ENTERED INTO VARYING
ARRANGEMENTS WITH THIRD PARTIES WHO EITHER
PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
F EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED
STATEMENT OF POSITION 93-2, "DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT,
NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
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 past five year and life of fund total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
SPARTAN FL MUNICIPAL MONEY MARKET 1.61% 3.32% 16.31% 18.73%
ALL TAX-FREE MONEY MARKET FUNDS AVERAGE 1.53% 3.13% 15.16% 17.23%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, 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 six months average represents a peer
group of 442 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 MAY 31, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FL MUNICIPAL MONEY MARKET 3.32% 3.07% 3.02%
ALL TAX-FREE MONEY MARKET FUNDS AVERAGE 3.13% 2.86% 2.76%
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
6/1/98 3/2/98 12/1/97 9/1/97 6/2/97
SPARTAN FLORIDA MUNICIPAL 3.45% 3.07% 3.46% 3.09% 3.40%
MONEY MARKET FUND
ALL TAX-FREE MONEY MARKET 3.22% 2.92% 3.28% 2.98% 3.27%
FUNDS AVERAGE
SPARTAN FLORIDA MUNICIPAL 5.39% 4.80% 5.41% 4.83% 5.31%
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 1998 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 SIX
MONTHS?
A. Investors spent much of the period trying to determine when the
Federal Reserve Board might raise the fed funds rate - the rate banks
charge each other for overnight loans - as a way to slow the economy
and thus head off inflation. The economy continued to chug along at a
fairly strong pace and unemployment numbers were incredibly low -
coming in at 4.3% in April. But despite this period of continuing
expansion, wage pressures did not arise and inflation remained benign.
Under normal circumstances, the possibility of future inflation
created by these low unemployment numbers likely would have led the
Fed to raise rates. But the economic and political turmoil in Asia
kept the Fed on the sidelines during the period. In fact, the fed
funds rate has remained unchanged at 5.5% for the past year.
Q. WHY WAS THE ASIAN TURMOIL ABLE TO OFFSET U.S. ECONOMIC STRENGTH IN
THE FED'S DECISION ON MONETARY POLICY?
A. For two reasons. The Fed didn't want to make the situation in Asia
worse by raising short-term interest rates here, especially
considering the financial and political unrest in countries such as
Indonesia at the end of the period. An increase in short-term rates in
the U.S. would likely have strengthened the U.S. dollar even more
versus Asian currencies, which could have further hurt their markets.
In other words, the Fed was asking itself, "Why make the Asian markets
more volatile by raising rates in the U.S.?" The other factor was the
possibility that the Asian turmoil would have translated into a
reduction of U.S. net exports, which would likely have had a dampening
effect of its own on the U.S. economy and inflation.
Q. WHAT WAS THE FUND'S STRATEGY DURING THIS PERIOD?
A. A flood of money typically enters this fund at year-end because the
fund provides investors with a unique tax shelter from the Florida
intangible tax. Because of that factor, the fund began the period with
about $421 million in assets and its average maturity was about 33
days. One month later, on January 1, the fund's assets had more than
doubled to almost $1 billion. Because I expected that much of the
fund's new assets would not remain in the fund over the long term, I
invested in extremely short-term securities, such as daily and weekly
variable-rate notes and commercial paper that would mature in early
January. In early January, the fund's average maturity fell to as low
as 16 days. As of January 31, the fund's assets were back down to
about $545 million. During the rest of the period, I invested a
portion of the fund in out-of-state variable-rate paper that would
mature before December to take advantage of higher yields. The fund
must be fully invested in Florida securities by year-end. I also spent
much of the period seeking fixed-rate Florida securities that mature
after December 31, 1997. As a result of these two strategies, the
fund's average maturity was extended to 35 days at the end of the
period.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1998, was 3.45%, compared to
3.47% six months ago. The more recent seven-day yield was the
equivalent of a 5.39% taxable rate of return for Florida investors in
the 36% federal income tax bracket. Through May 31, 1998, the fund's
six-month total return was 1.61%, compared to 1.53% for the all
tax-free money market funds average, according to IBC Financial Data,
Inc.
Q. WHAT'S YOUR OUTLOOK?
A. There's one important wildcard: what happens in Asia. If we
continue to see the same level of turmoil there, I believe the Fed may
be obligated to stay on the sidelines. There's a lot of risk that a
rate increase in the U.S. could cause increased volatility in global
markets. Without a rate increase, the U.S. economy still might slow as
a result of fewer U.S. exports. In this case, the Asian situation
would do the Fed's job for them. The strength of the U.S. economy, in
light of the Asian situation, has left the Fed at an impasse. And,
although I believe the next Fed move will be to raise rates, I don't
believe it will be any time soon. The only factor that could change
the Fed's stance in the next few months would be real signs of
inflation - wage pressures as reflected in the employment cost index
or higher-than-expected increases in the consumer price index or the
producer price index. At that point, the Fed may risk causing more
problems in Asia to keep the U.S. economy on good footing.
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 MAY 31, 1998,
MORE THAN $443 MILLION
MANAGER: SCOTT ORR, SINCE
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
5/31/98 11/30/97 5/31/97
0 - 30 78 70 73
31 - 90 6 22 16
91 - 180 11 4 7
181 - 397 5 4 4
WEIGHTED AVERAGE MATURITY
5/31/98 11/30/97 5/31/97
SPARTAN FLORIDA MUNICIPAL
MONEY MARKET FUND 35 DAYS 33 DAYS 31 DAYS
ALL TAX-FREE MONEY MARKET
FUNDS AVERAGE* 36 DAYS 50 DAYS 38 DAYS
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1998 AS OF NOVEMBER 30, 1997
Row: 1, Col: 1, Value: 1.0
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 15.0
Row: 1, Col: 5, Value: 74.0
Row: 1, Col: 1, Value: 1.0
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 24.0
Row: 1, Col: 5, Value: 64.0
Variable rate
demand notes
(VRDNs) 74%
Commercial paper
(including CP
mode) 15%
Tender bonds 9%
Municipal
notes 1%
Other 1%
Variable rate
demand notes
(VRDNs) 64%
Commercial paper
(including CP
mode) 24%
Tender bonds 9%
Municipal
notes 2%
Other 1%
*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1998 (UNAUDITED)
Showing Percentage of Investment in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ALABAMA - 0.3%
Phenix Ind. Dev. Envir. Impt. (Mead Coated Board Proj.)
Series 1996, 4.05%, LOC Bayerische Vereinsbank AG,
VRDN (b) $ 1,200,000 $ 1,200,000
ARKANSAS - 0.2%
Arkansas Dev. Fin. Auth. Multi-Family Hsg. Rev. (Kiehl
Partners LP Proj.) Series 1998, 4%, LOC Bank One,
Louisiana, NA, VRDN (b) 1,000,000 1,000,000
FLORIDA - 82.8%
Broward County Hsg. Fin. Auth. Multi-Family Hsg. Rev.
(Palm Aire-Oxford Proj.) Series 1990,
4% (Continental Casualty Co. Guaranteed) VRDN 1,800,000 1,800,000
Broward County Ind. Dev. Auth.:
(Femc & Fast Industries, Inc.) 4%, LOC SunTrust Bank,
South Florida, NA, VRDN 1,500,000 1,500,000
(Heico Aerospace Corp. Proj.) 4%, LOC SunTrust Bank,
South Florida, NA, VRDN (b) 1,000,000 1,000,000
(Rib Associates Proj.) Series 1989, 4%, LOC SunTrust
Bank, Orlando, VRDN (b) 1,165,000 1,165,000
Broward County School Dist. Auth. Bonds 7.125% 2/15/08
(Pre-Refunded to 2/15/99 @ 102) (c) 5,390,000 5,625,059
Clay County Hsg. Fin. Auth. Participating VRDN,
Series PT-61, 4.04%, LOC Bayerische
Hypotheken und Wechsel Bank (d) 3,130,000 3,130,000
Dade County Cap. Asset Allocation Spl. Oblig. Rev.
Series 1990, 4.40%, LOC Sanwa Bank Ltd., VRDN 900,000 900,000
Dade County Hsg. Fin. Auth. Rev.:
Bonds Single Family Mort. Rev. 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, 4.04%
(Liquidity Facility Bank of America) (d) 6,810,000 6,810,000
Dade County Ind. Dev. Auth. Rev.:
(Guastafeste Proj.):
Series 1987, 4%, LOC SunTrust Bank, Orlando, NA,
VRDN (b) 2,740,000 2,740,000
Series 1991, 4%, LOC SunTrust Bank, Miami, NA,
VRDN (b) 1,360,000 1,360,000
(Michael-Ann Russell Jewish Commty. Center) 3.90%,
LOC SunTrust Bank, Miami, NA, VRDN (b) 900,000 900,000
(Royal Store Fixtures Corp. Proj.) 4%,
LOC SunTrust Bank, Miami, NA, VRDN (b) 2,020,000 2,020,000
Dade County Multi-Family Hsg. Rev. (Biscayne View
Apts. Proj.) Series 1993, 4.10% (Commonwealth Life
Insurance Co. Guaranteed) VRDN (b) 28,475,000 28,475,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County Wtr. & Swr. Sys. Rev. Participating VRDN,
Series SG-74, 4.02% (Liquidity Facility Societe Generale) (d) $
11,110,000 $ 11,110,000
Daytona Beach Med. Ctr. TAN (Halifax Hosp. Med. Ctr.)
Series 98, 4% 4/15/99, LOC Barnett Bank, NA 2,650,000 2,657,779
Escambia County Hsg. Fin. Auth. Single Family Mortgage Rev.
Participating VRDN, 4.04% (Liquidity Facility
Merrill Lynch & Co., Inc.) (d) 1,840,000 1,840,000
Escambia County Poll. Cont. Rev. Rfdg. (Monsanto Co. Proj.)
Series 1994, 3.85%, VRDN 4,775,000 4,775,000
Escambia County Solid Waste Disp. Rev. (Monsanto Co. Proj.)
Series 1993, 3.95%, VRDN (b) 5,300,000 5,300,000
Eustis Multi Purpose Rev. Series 1997A,
3.90%, LOC SunTrust Bank, Central Florida, NA, VRDN 1,300,000
1,300,000
Florida Board of Ed. Admin. Cap. Outlay (Pub. Ed.)
Participating VRDN, Series 1995, 4.02%
(Liquidity Facility Societe Generale) (d) 7,470,000 7,470,000
Florida Board of Ed. Participating VRDN:
Series 1995 A, 4.02% (Liquidity Facility Citibank, NA) (d) 9,500,000
9,500,000
Series 98-A, 4.02% (Liquidity Facility Merrill
Lynch & Co., Inc.) (d) 4,600,000 4,600,000
Florida Dept. of Envir. Protection Preservation 2000
Participating VRDN:
3.85% (Liquidity Facility Bankers Trust Co.)
(FSA Insured) (d) 4,365,000 4,365,000
Series FR/RI-A18, 4% (Liquidity Facility Nat'l.
Westminster Bank, PLC) (d) 2,500,000 2,500,000
Florida Dept. of Trans. Participating VRDN,
4.02% (Liquidity Facility Societe Generale) (d) 13,010,000
13,010,000
Florida Gen. Oblig. Participating VRDN, Series 1997,
4.02% (Liquidity Facility Merrill Lynch & Co., Inc.) (d) 3,000,000
3,000,000
Florida Hsg. Fin. Agcy.:
Bonds:
(Homeowner Mortgage Rev.) Series 5, 3.80%
tender 6/15/99 (FGIC Insured) 4,300,000 4,300,000
(Oaks at Mill Creek Proj.) Series OO 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
Participating VRDN, Series 98, 4.10% (Liquidity Facility
Bank of New York, NA) (d) 4,400,000 4,400,000
(Ashley Lake Park II Proj.) Series 1989 J, 4%,
LOC Barclays Bank, VRDN 1,900,000 1,900,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Hsg. Fin. Agcy.: - continued
(Banyan Bay Apts. Proj.) 4%, LOC PNC Bank,
Kentucky, VRDN (b) $ 5,275,000 $ 5,275,000
(Heron Park Partners Ltd.) 4%, LOC NationsBank,
NA VRDN 3,300,000 3,300,000
Multi-Family Hsg. Rev. Rfdg.:
(Brandon-Oxford Proj.) Series 1990 C, 4%
(Continental Casualty Co. Guaranteed) VRDN 13,100,000 13,100,000
(Hillsborough-Oxford Proj.) Series D, 4%
(Continental Casualty Co. Guaranteed) VRDN 5,590,000 5,590,000
Florida Local Gov't. Fin. Commission Rev. Series A, CP:
3.75% 7/14/98, LOC First Union Nat'l. Bank 1,600,000 1,600,000
3.75% 9/4/98, LOC First Union Nat'l. Bank 9,080,000 9,080,000
Fort Myers Improvement Rev. Participating VRDN,
Series PA-180, 4.02% (Liquidity Facility Merrill
Lynch & Co., Inc.) (d) 1,950,000 1,950,000
Hillsborough County Aviation Auth. (Tampa Int'l. Arpt.) CP:
2nd Series:
3.60% 7/17/98, LOC Nat'l. Westminster Bank, PLC (b) 5,100,000
5,100,000
3.70% 9/9/98, LOC Nat'l. Westminster Bank, PLC (b) 1,000,000
1,000,000
3.70% 9/11/98, LOC Nat'l. Westminster Bank, PLC (b) 3,600,000
3,600,000
3.60% 7/17/98, LOC Nat'l. Westminster Bank, PLC (b) 3,900,000
3,900,000
3.70% 9/11/98, LOC Nat'l. Westminster Bank, PLC (b) 1,800,000
1,800,000
Hillsborough County Ind. Dev. Rev. (Vigo Importing Co. Proj.):
4.05% LOC NationsBank, NA, South, VRDN (b) 1,340,000 1,340,000
4.35% LOC Barnett Bank, NA, VRDN (b) 1,300,000 1,300,000
Indian River County Hosp. Dist. Bonds Hosp. Rev.:
Series 1988:
3.70%, 9/10/98, LOC Kredietbank, NV, CP mode 4,700,000 4,700,000
3.70%, 9/11/98, LOC Kredietbank, NV, CP mode 4,350,000 4,350,000
Series 1989, 3.65%, 9/10/98, LOC Kredietbank,
NV, CP mode 1,800,000 1,800,000
Series 1990, 3.70%, 9/10/98, LOC Kredietbank,
NV, CP mode 2,000,000 2,000,000
Jacksonville Health Fac. Auth. Participating VRDN,
Series 1996 M, 4.02% (Liquidity Facility Caisse
des Depots et Consignations) (d) 14,980,000 14,980,000
Jacksonville Hosp. Rev. (Univ. Med. Ctr. Proj.):
Series 1988, 4.25%, LOC Sumitomo Bank Ltd., VRDN 5,100,000
5,100,000
Series 1989, 4.25%, LOC Sumitomo Bank Ltd., VRDN 4,800,000
4,800,000
Jacksonville Ind. Dev. Rev. (Samuel C. Taylor Foundation
1987 Proj.) 4%, LOC Barnett Bank Nat'l. Assoc., VRDN 4,600,000
4,600,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Lee County Hosp. Board Hosp. Rev. Bonds (Lee Memorial
Hosp. Proj.) Series 1997-B:
3.95%, 6/2/98 (Liquidity Facility SunTrust Bank,
Central Florida, NA) CP mode $ 4,000,000 $ 4,000,000
3.85%, 9/15/98 (Liquidity Facility SunTrust Bank,
Central Florida, NA) CP mode 2,100,000 2,100,000
Mount Dora Health Fac. Auth. Rev. (Waterman
Village Proj.) Series 1996A, 3.85%, LOC Barnett
Bank, VRDN 4,000,000 4,000,000
Okeechobee County Solid Waste Rev. (Chambers Waste
Sys.) Series 1992, 4%, LOC Morgan Guaranty Trust NY,
VRDN (b) 8,600,000 8,600,000
Orange County Health Fac. Auth. Participating VRDN,
Series PA-95, 4% (Liquidity Facility Merrill Lynch & Co.) (d)
3,985,000 3,985,000
Orange County Hsg. Fin. Auth. Multi-Family Hsg. Rev.:
(Falcon Trace Apt.) Series D, 3.86%, LOC AmSouth
Bank, NA, VRDN (b) 4,050,000 4,050,000
(Regal Pointe Apts.) Series 1997 A, 4.05%, LOC
NationsBank, NA VRDN 5,893,000 5,893,000
(Westlake Club Proj.) Series 91A, 3.90% (Continental
Casualty Co.) VRDN 5,950,000 5,950,000
Series 1997 D, 3.86%, LOC Key Bank Nat'l. Assoc., VRDN 4,000,000
4,000,000
Orlando Util. Commission Wtr. & Elec. Participating VRDN,
Series SG-18, 4.02% (Liquidity Facility Societe Generale) (d)
4,365,000 4,365,000
Palm Beach County Hsg. Fin. Auth. Rev.:
(Lake Crystal Apts. Proj. Phase II) Series 1988 A,
4.05%, LOC Citibank, VRDN (b) 1,785,000 1,785,000
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,
3.825%, LOC Bankers Trust Company, VRDN 2,000,000 2,000,000
Pensacola Rev. (Harborview Corp. Proj.)
3.90%, LOC AmSouth Bank, NA, Alabama, VRDN 2,805,000 2,805,000
Pinellas County Hsg. Fin. Agcy. Single Family Hsg. Bonds
3.70% tender 2/1/99 (b) 7,500,000 7,500,000
Pinellas County Ind. Dev. Auth. (Hunter Douglas Inc.)
4%, LOC ABN-AMRO Bank, NV, VRDN (b) 2,100,000 2,100,000
Putnam County Dev. Auth. Poll. Cont. Rev. Bonds (Seminole
Elec. Coop.) Series 1984 D, 3.65% tender 6/15/98
(Nat'l. Rural Utils. Coop-CFC Guaranteed) 10,000,000 10,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Sarasota County Pub. Hosp. Dist. Bonds (Sarasota
Memorial Hosp.):
Series A:
3.75%, 8/13/98, (Liquidity Facility SunTrust Bank,
Central Florida, NA) CP mode $ 4,300,000 $ 4,300,000
3.80%, 9/11/98 (Liquidity Facility SunTrust Bank,
Central Florida, NA) CP mode 1,400,000 1,400,000
Series 1991, 3.70%, 8/13/98, CP mode 4,000,000 4,000,000
St. John's County Ind. Dev. Auth. (V.A.W. of America)
Series 1997, 3.95%, LOC NationsBank, NA, VRDN 2,940,000 2,940,000
St. Lucie (City of Port) Util. Rev. Participating VRDN,
4.02% (Liquidity Facility Merrill Lynch & Co., Inc) (d) 3,500,000
3,500,000
St. Lucie County Poll. Cont. Rev. Rfdg. Bonds (Florida Lt. &
Pwr. Co.) Series 1994 A, 3.80%, 8/14/98, CP mode 1,250,000 1,250,000
St. Petersburg Cap. Impt. Rev. (Arpt. Proj.) Series 1997C,
4%, LOC SunTrust Bank, Tampa Bay, NA, VRDN (b) 1,340,000 1,340,000
Sunrise Util. Sys. Rev. Participating VRDN:
Series SG-16, 4% (Liquidity Facility Societe Generale) (d) 5,030,000
5,030,000
Series SGB-17, 4% (Liquidity Facility Societe Generale) (d)
2,325,000 2,325,000
355,800,838
ILLINOIS - 2.3%
Illinois Dev. Fin. Auth. Poll. Cont. Rev. Series B,
3.90% (Liquidity Facility First Nat'l. Bank of Chicago)
(MBIA Insured) VRDN (b) 10,000,000 10,000,000
INDIANA - 0.8%
Rockport Ind. Poll. Cont. Rev. Rev. (AK Steel Corp. Proj.)
Series 1997 A, 4%, LOC PNC Bank, Ohio, VRDN 3,500,000 3,500,000
LOUISIANA - 0.4%
Plaquemines Parish Envir. Rev. (BP Exploration & Oil, Inc.)
Series 1994, 4.20%, VRDN (b) 1,500,000 1,500,000
MAINE - 4.7%
Maine Edl. Loan Marketing Corp. Student Loan Rev.
Series 1997 A-2, 4% (BPA Credit Swiss
First Boston) VRDN (b) 20,100,000 20,100,000
NEVADA - 0.4%
Las Vegas Valley Wtr. Dist. Series A, 3.70% 9/10/98,
LOC Union Bank of Switzerland & LOC Westdeutsche
Landesbank Girozentrale, CP 1,500,000 1,500,000
PENNSYLVANIA - 0.2%
Northeastern Hosp. Auth. Hosp. Bonds Central Services
Series B, 3.70%, 9/8/98 (BPA PNC Bank, NA) CP mode 1,000,000
1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
RHODE ISLAND - 0.4%
Rhode Island Student Loan Auth. (Student Loan Prog.)
Series 1995-1, 4%, LOC Nat'l. Westminster Bank, PLC,
VRDN (b) $ 1,500,000 $ 1,500,000
TENNESSEE - 1.4%
Memphis-Shelby County Arpt. Auth. Series 1996 B-2,
4%, LOC First Union Nat'l. Bank of North Carolina,
VRDN (b) 6,000,000 6,000,000
TEXAS - 6.1%
Brazos River Auth. Poll. Cont. Rev. Rfdg. Bonds (Texas Elec.
Util. Proj.) Series 1994 A, 3.70%, 9/9/98, LOC Canadian
Imperial Bank of Commerce, CP mode (b) 4,000,000 4,000,000
Brazos River Hrb. Navigational Dist. (Dow Chemical
Co. Proj.):
Series 1997, 4.20%, VRDN (b) 1,100,000 1,100,000
Series 1998, 4.20%, VRDN (b) 9,800,000 9,800,000
Harris County Hsg. Fin. Corp. (The Mills Apts. Proj.)
3.95% (Fannie Mae Guaranteed) VRDN (b) 3,000,000 3,000,000
North Texas Higher Ed. Auth. Student Loan Rev.:
Series 1991 C, 4% (AMBAC Insured) (BPA Student Loan
Marketing Assoc.) VRDN (b) 1,200,000 1,200,000
Series A, 4% (AMBAC Insured) (Liquidity Facility Student
Loan Marketing Assoc.) VRDN (b) 800,000 800,000
San Antonio Hsg. Fin. Auth.:
(Harbor Care Ambassador) 3.95% (Fannie Mae
Guaranteed) VRDN (b) 2,200,000 2,200,000
(La Jolla Apts.) 3.95% (Fannie Mae Guaranteed) VRDN (b) 2,000,000
2,000,000
South Texas Higher Ed. Auth. Student Loan Rev. Series 1997,
4% (MBIA Insured) (BPA Student Loan Marketing Assoc.)
VRDN (b) 2,300,000 2,300,000
26,400,000
TOTAL INVESTMENTS - 100% $ 429,500,838
Total Cost for Income Tax Purposes $ 429,500,838
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
TAN - Tax Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Security collateralized by an amount sufficient to pay interest
and principal.
(d) 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
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 429,500,838
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR FUND SHARES SOLD 11,068,584
INTEREST RECEIVABLE 3,056,340
TOTAL ASSETS 443,625,762
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 7,821
PAYABLE FOR FUND SHARES REDEEMED 141,081
DISTRIBUTIONS PAYABLE 36,097
ACCRUED MANAGEMENT FEE 183,149
OTHER PAYABLES AND ACCRUED EXPENSES 2,434
TOTAL LIABILITIES 370,582
NET ASSETS $ 443,255,180
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 443,310,713
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (55,533)
NET ASSETS, FOR 443,310,713 SHARES OUTSTANDING $ 443,255,180
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($443,255,180 (DIVIDED BY) 443,310,713 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INTEREST INCOME $ 9,684,815
EXPENSES
MANAGEMENT FEE $ 1,313,229
NON-INTERESTED TRUSTEES' COMPENSATION 1,042
TOTAL EXPENSES BEFORE REDUCTIONS 1,314,271
EXPENSE REDUCTIONS (68,841) 1,245,430
NET INTEREST INCOME 8,439,385
NET REALIZED GAIN (LOSS) ON INVESTMENTS 14
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,439,399
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 8,439,385 $ 14,146,091
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 14 (18,438)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 8,439,399 14,127,653
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (8,439,385) (14,146,091)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 751,008,161 772,805,775
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 8,045,475 13,506,143
COST OF SHARES REDEEMED (737,204,260) (767,165,281)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 21,849,376 19,146,637
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 21,849,390 19,128,199
NET ASSETS
BEGINNING OF PERIOD 421,405,790 402,277,591
END OF PERIOD $ 443,255,180 $ 421,405,790
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED NOVEMBER 30,
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
BEGINNING OF
PERIOD
INCOME FROM .016 .032 .031 .035 .024 .025
INVESTMENT
OPERATIONS
NET INTEREST
INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST (.016) (.032) (.031) (.035) (.024) (.025)
INCOME
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
END OF PERIOD
TOTAL RETURN B, C 1.62% 3.29% 3.17% 3.57% 2.47% 2.51%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END $ 443,255 $ 421,406 $ 402,278 $ 363,396 $ 337,530 $ 306,741
OF PERIOD
(000 OMITTED)
RATIO OF EXPENSES .50% A .50% .50% .50% .46% D .18% D
TO AVERAGE NET
ASSETS
RATIO OF EXPENSES .47% A, E .49% E .47% E .50% .46% .18%
TO AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
RATIO OF NET INTEREST 3.21% A 3.21% 3.15% 3.52% 2.43% 2.48%
INCOME TO
AVERAGE NET
ASSETS
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT
CLOSEOUT FEE AND FOR PERIODS OF LESS THAN
ONE YEAR ARE NOT ANNUALIZED.
D 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.
E 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 May 31, 1998 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Florida Municipal Income Fund (the income fund) is a fund of
Fidelity Court Street Trust. Spartan Florida Municipal Money Market
Fund (the money market fund) is a fund of Fidelity Court Street Trust
II. Each trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment
company. Fidelity Court Street Trust and Fidelity Court Street Trust
II (the trusts) are organized as a Massachusetts business trust and a
Delaware business trust, respectively. Each fund is authorized to
issue an unlimited number of shares. The financial statements have
been prepared in conformity with generally accepted accounting
principles which require 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 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
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net interest income. Distributions from realized
gains, if any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
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 income or gain
remaining at fiscal year end is distributed in the following year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the income fund
less than 180 days are subject to a short-term trading 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 Fidelity
Investments Money Management, Inc., (formerly 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 earned by the fund 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 each applicable
fund's schedule of investments. 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.
2. OPERATING POLICIES -
CONTINUED
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.
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 $98,692,696 and $62,327,026, respectively.
The market value of futures contracts opened and closed during the
period amounted to $12,140,603 and $19,467,783, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR pays all
expenses, except the compensation of the non-interested Trustees and
certain exceptions such as interest, taxes, brokerage commissions and
extraordinary expenses. FMR receives a fee that is computed daily at
an annual rate of .55% and .50% of average net assets for the income
and money market funds, respectively.
FMR also bears the cost of providing shareholder services to each
fund. To offset the cost of providing these services, FMR or its
affiliates collect certain transaction fees from the money market
funds' shareholders which amounted to $3,531 for the period.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser,
Fidelity Investments Money Management, Inc.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
SUB-ADVISER FEE - CONTINUED
(formerly 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 fund's expenses were reduced by $7,569 and $68,841,
respectively, under these arrangements.
PROXY VOTING RESULTS
A special meeting of the fund's shareholders was held on December 17,
1997. The results of votes taken among shareholders on proposals
before them are listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
# OF % OF
SHARES VOTED SHARES VOTED
RALPH F. COX
AFFIRMATIVE 742,366,479.909 96.787
WITHHELD 24,642,287.090 3.213
TOTAL 767,008,766.999 100.000
PHYLLIS BURKE DAVIS
AFFIRMATIVE 741,858,140.779 96.721
WITHHELD 25,150,626.220 3.279
TOTAL 767,008,766.999 100.000
ROBERT M. GATES
AFFIRMATIVE 740,326,691.979 96.521
WITHHELD 26,682,075.020 3.479
TOTAL 767,008,766.999 100.000
EDWARD C. JOHNSON 3D
AFFIRMATIVE 742,526,984.799 96.808
WITHHELD 24,481,782.200 3.192
TOTAL 767,008,766.999 100.000
E. BRADLEY JONES
AFFIRMATIVE 738,558,877.569 96.291
WITHHELD 28,449,889.430 3.709
TOTAL 767,008,766.999 100.000
DONALD J. KIRK
AFFIRMATIVE 742,698,625.339 96.831
WITHHELD 24,310,141.660 3.169
TOTAL 767,008,766.999 100.000
# OF % OF
SHARES VOTED SHARES VOTED
PETER S. LYNCH
AFFIRMATIVE 742,804,693.399 96.844
WITHHELD 24,204,073.600 3.156
TOTAL 767,008,766.999 100.000
WILLIAM O. MCCOY
AFFIRMATIVE 742,777,102.439 96.841
WITHHELD 24,231,664.560 3.159
TOTAL 767,008,766.999 100.000
GERALD C. MCDONOUGH
AFFIRMATIVE 740,489,812.019 96.543
WITHHELD 26,518,954.980 3.457
TOTAL 767,008,766.999 100.000
MARVIN L. MANN
AFFIRMATIVE 742,492,623.319 96.804
WITHHELD 24,516,143.680 3.196
TOTAL 767,008,766.999 100.000
ROBERT C. POZEN
AFFIRMATIVE 742,603,015.859 96.818
WITHHELD 24,405,751.140 3.182
TOTAL 767,008,766.999 100.000
THOMAS R. WILLIAMS
AFFIRMATIVE 740,510,918.469 96.545
WITHHELD 26,497,848.530 3.455
TOTAL 767,008,766.999 100.000
PROPOSAL 2
To ratify the selection of Coopers and Lybrand L.L.P. as independent
accountants of the fund.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 213,832,639.180 95.608
AGAINST 1,910,851.930 0.854
ABSTAIN 7,912,789.160 3.538
TOTAL 767,008,766.999 100.000
PROPOSAL 3
To amend the Declaration of Trust to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the
number of shares owned.
Trust Votes:
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 689,235,885.364 89.860
AGAINST 38,356,553.755 5.001
ABSTAIN 39,416,327.880 5.139
TOTAL 223,656,280.270 100.000
Spartan Florida Municipal Money Market Votes:
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 203,330,871.030 90.912
AGAINST 8,814,234.780 3.941
ABSTAIN 11,511,174.460 5.147
TOTAL 223,656,280.270 100.000
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 Xpress(registered trademark) provides 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.
(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.
(COMPUTER_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
(COMPUTER_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
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
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
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER, MONEY MARKET FUND
Fidelity Investments
Money Management, Inc.
Merrimack, NH
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
Christine Thompson, 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 (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
