FIDELITY
CONGRESS STREET
FUND
ANNUAL REPORT
DECEMBER 31, 1998
(2_FIDELITY_LOGOS)(REGISTERED TRADEMARK)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 8 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 9 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 12 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 16 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 18 The auditors' opinion.
ACCOUNTANTS
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Resurgent stock market performance in the fourth quarter helped the
Dow Jones Industrial Average post a double-digit return for the fourth
year in a row - a first in the Dow's 100-plus year history. Three
interest-rate cuts made late in the year by the Federal Reserve Board
helped spark the equity rally. Meanwhile, while the majority of bonds
posted positive performance, most bond returns for 1998 trailed their
gains from 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
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. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. 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).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY CONGRESS STREET 24.66% 174.83% 439.07%
S&P 500 (registered trademark) 28.58% 193.90% 479.73%
Growth & Income Funds Average 15.61% 133.95% 332.13%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks. To measure how the fund's performance stacked up
against its peers, you can compare it to the growth & income funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past one year average represents
a peer group of 768 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 DECEMBER 31, 1998 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY CONGRESS STREET 24.66% 22.41% 18.35%
S&P 500 28.58% 24.06% 19.21%
Growth & Income Funds Average 15.61% 18.35% 15.53%
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 different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER 10 YEARS
Congress Street S&P 500
00024 SP001
1988/12/31 10000.00 10000.00
1989/01/31 10651.28 10732.00
1989/02/28 10394.99 10464.77
1989/03/31 10602.46 10708.60
1989/04/30 11249.31 11264.38
1989/05/31 11692.00 11720.59
1989/06/30 11545.79 11653.78
1989/07/31 12765.87 12706.12
1989/08/31 12772.61 12955.15
1989/09/30 12719.80 12902.04
1989/10/31 12722.05 12602.71
1989/11/30 13056.84 12859.81
1989/12/31 13431.57 13168.44
1990/01/31 12370.70 12284.84
1990/02/28 12544.82 12443.31
1990/03/31 13053.35 12773.06
1990/04/30 12837.71 12453.74
1990/05/31 14136.13 13667.97
1990/06/30 14335.29 13575.03
1990/07/31 14383.15 13531.59
1990/08/31 13213.45 12308.34
1990/09/30 12494.35 11708.92
1990/10/31 12587.74 11658.57
1990/11/30 13338.36 12411.72
1990/12/31 13777.53 12758.00
1991/01/31 14211.77 13314.25
1991/02/28 15249.13 14266.22
1991/03/31 15707.50 14611.46
1991/04/30 15686.99 14646.53
1991/05/31 16257.54 15279.26
1991/06/30 15467.59 14579.47
1991/07/31 16219.25 15258.87
1991/08/31 16804.96 15620.51
1991/09/30 16588.98 15359.65
1991/10/31 17017.28 15565.47
1991/11/30 16540.17 14938.18
1991/12/31 18265.13 16647.11
1992/01/31 17839.29 16337.47
1992/02/29 17799.68 16549.86
1992/03/31 17425.84 16227.13
1992/04/30 17731.60 16704.21
1992/05/31 17722.93 16786.06
1992/06/30 17334.67 16535.95
1992/07/31 18103.10 17212.27
1992/08/31 17814.00 16859.42
1992/09/30 17735.15 17058.36
1992/10/31 17641.29 17118.06
1992/11/30 18099.34 17701.79
1992/12/31 18153.00 17919.52
1993/01/31 17920.58 18070.05
1993/02/28 18150.46 18315.80
1993/03/31 18391.77 18702.26
1993/04/30 18154.27 18249.67
1993/05/31 18716.91 18738.76
1993/06/30 18560.32 18793.10
1993/07/31 18302.03 18717.93
1993/08/31 18980.51 19427.34
1993/09/30 18731.22 19277.75
1993/10/31 19398.13 19676.80
1993/11/30 19368.57 19489.87
1993/12/31 19614.48 19725.69
1994/01/31 19879.10 20396.37
1994/02/28 19688.78 19843.63
1994/03/31 18838.87 18978.44
1994/04/30 18846.69 19221.37
1994/05/31 19274.25 19536.60
1994/06/30 18646.15 19057.95
1994/07/31 19383.81 19683.05
1994/08/31 20337.89 20490.06
1994/09/30 20110.92 19988.05
1994/10/31 20645.36 20437.78
1994/11/30 20306.22 19693.44
1994/12/31 20763.34 19985.49
1995/01/31 21361.97 20503.72
1995/02/28 22095.87 21302.75
1995/03/31 22584.68 21931.39
1995/04/30 23420.36 22577.27
1995/05/31 24258.71 23479.68
1995/06/30 24875.90 24025.12
1995/07/31 25480.41 24821.79
1995/08/31 25407.22 24884.09
1995/09/30 26789.74 25934.20
1995/10/31 27125.88 25841.62
1995/11/30 28074.67 26976.06
1995/12/31 28785.01 27495.62
1996/01/31 29978.62 28431.57
1996/02/29 30248.59 28695.13
1996/03/31 30640.52 28971.47
1996/04/30 30998.19 29398.51
1996/05/31 32027.35 30156.69
1996/06/30 32347.51 30271.59
1996/07/31 31112.10 28934.19
1996/08/31 31481.48 29544.41
1996/09/30 33125.00 31207.17
1996/10/31 33361.57 32067.87
1996/11/30 35746.62 34491.88
1996/12/31 35210.72 33808.59
1997/01/31 37102.94 35920.96
1997/02/28 37689.46 36202.58
1997/03/31 36488.49 34715.01
1997/04/30 38003.67 36787.50
1997/05/31 39932.20 39027.12
1997/06/30 41605.32 40775.54
1997/07/31 43837.79 44020.05
1997/08/31 40772.54 41554.04
1997/09/30 43013.45 43829.96
1997/10/31 40377.25 42366.04
1997/11/30 42654.74 44327.16
1997/12/31 43241.43 45088.26
1998/01/31 44354.29 45586.93
1998/02/28 46629.64 48874.66
1998/03/31 47973.58 51377.53
1998/04/30 48186.23 51894.39
1998/05/31 46913.17 51002.33
1998/06/30 48136.25 53074.04
1998/07/31 47920.73 52508.80
1998/08/31 42990.78 44917.08
1998/09/30 45825.43 47794.47
1998/10/31 49026.90 51682.07
1998/11/30 52252.63 54814.52
1998/12/31 53908.32 57972.94
IMATRL PRASUN SHR__CHT 19981231 19990111 113519 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Congress Street Fund on December 31, 1988. As the
chart shows, by December 31, 1998, the value of the investment would
have grown to $53,907 - a 439.07% increase on the initial investment.
For comparison, look at how the Standard & Poor's 500 Index did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 would have grown to $57,973 - a 479.73% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks 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)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
For the first time in its history, the
Dow Jones Industrial Average -
an index of 30 blue-chip stocks -
posted double-digit percentage
gains in four consecutive years,
thanks to an 18.07% increase for
the 12-month period ending
December 31, 1998. In that same
time frame, the Standard & Poor's
500 Index returned 28.58%. The
period began with the U.S.
enjoying low inflation, stable
interest rates and an
unemployment rate at its lowest
peacetime level in 41 years. But
while the equity market continued
its bull-like charge, mounting
doubts lingered in many
investors' minds about the impact of
Asia's economic woes. Those fears
soon became reality. Further
prompted by Russia's currency
devaluation and subsequent loan
defaults, the Dow suffered a
512.61 point free-fall on August
31, a loss that erased all previous
gains for the year to that point.
Faced with global economic
chaos, investors began fleeing the
equity markets in droves, searching
for safer, less volatile havens,
particularly U.S. Treasuries. To
address the lack of confidence in
domestic and global equity markets,
the U.S. Federal Reserve Board
stepped in with three separate 0.25%
interest-rate cuts in the late fall.
Those cuts helped boost confidence
in the U.S. economy, and stocks
began to quickly ascend to their
former lofty levels, culminating in a
new Dow record of 9374.27 on
November 23, 1998.
(photograph of Tim Heffernan)
An interview with Tim Heffernan, Portfolio Manager of Fidelity
Congress Street Fund
Q. HOW DID THE FUND PERFORM, TIM?
A. For the 12 months that ended December 31, 1998, the fund had a
total return of 24.66%, trailing the 28.58% return for the Standard &
Poor's 500 Index. The fund outpaced the 15.61% return of the growth &
income funds average tracked by Lipper Inc. during the same period.
Q. WHAT FACTORS CAUSED THE FUND TO TRAIL THE INDEX YET BEAT THE LIPPER
AVERAGE?
A. The fund's performance relative to the S&P 500 index was hurt
primarily due to its relative underweighting in one of the strongest
sectors for the year - technology. Stocks such as Microsoft, Dell,
Intel and Cisco, which are not held in the fund, were big contributors
to the performance of the index. Of particular interest is the fact
that the market continued to reward such a small number of large-cap
growth stocks: 15 companies accounted for approximately half the total
return of the S&P 500. This very narrow market breadth caused the fund
to lag the S&P 500 Index. The fund's strong performance relative to
the Lipper growth and income funds average can most likely be
attributed to the fund's greater exposure to large-cap stocks and its
overweighted position in the health care sector. Specifically,
pharmaceutical companies such as Merck and medical device
manufacturers like Guidant produced strong results.
Q. WHAT OTHER STOCKS CONTRIBUTED TO THE FUND'S SOLID RETURN?
A. The largest contributor to total return was Guidant, a manufacturer
of medical devices used in coronary disease intervention and surgery.
The stock surged as analysts upgraded their earnings and price
targets, providing a boost to investor confidence and the company's
future growth prospects. In addition, the company significantly
increased its share of the $1.4- billion-a-year artery-clearing
market. United Technologies provided a lift to fund performance as
shares of this electrical equipment manufacturer produced solid gains.
The company benefited from the overall strength of the technology
sector, combined with its steady earnings growth and industry
leadership position. Another holding that provided a boost to total
return was Anheuser-Busch. The stock rallied almost 40% as the company
reported strong sales growth and increased its market share.
Q. WHAT HOLDINGS HURT THE FUND'S PERFORMANCE?
A. Boeing was the largest detractor from total return. Despite a
higher number of orders in 1998 than in 1997, net sales numbers were
down, which was attributed to selling more slim-bodied aircrafts. The
company also was hurt by production problems and a slide in Asian
orders, which resulted in missed earnings in all but one of the past
four quarterly earnings reports. Union Pacific Resources Group, an oil
and gas exploration company, was caught in the general downdraft of
energy stocks as oil prices dropped to the lowest levels in over 12
years. Coca-Cola also experienced a rocky year as the stock dropped
from a high on July 15 of approximately $90 per share to $67 at the
end of the year. The company stumbled as global financial woes took a
toll on sales, lowering earnings and analyst expectations.
Q. WHAT'S YOUR OUTLOOK, TIM?
A. Neither the forces of inflation nor deflation prevailed in 1998. In
addition, central banks around the world have lowered interest rates
in hopes of improving their countries' growth prospects, and the
Federal Reserve appears to be highly sensitive to both U.S. and
international economic trends. While large-cap stock valuations have
returned to their July 1998 peaks, earnings estimates for the fourth
quarter of 1998 and into 1999 continue to be trimmed. In addition,
excess capacity and ongoing weakness overseas will provide a difficult
backdrop in which to produce significant earnings growth in 1999.
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.
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF DECEMBER
31, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
General Electric Co. 7.7 7.5
Merck & Co., Inc. 6.4 6.4
United Technologies Corp. 5.8 5.4
Guidant Corp. 5.6 4.3
Johnson & Johnson 5.0 4.8
American Home Products Corp. 4.8 5.9
GTE Corp. 4.6 4.1
Hewlett-Packard Co. 4.3 4.2
Coca-Cola Co. (The) 4.3 6.0
Exxon Corp. 3.9 4.9
TOP FIVE MARKET SECTORS AS OF
DECEMBER 31, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
HEALTH 25.0 24.1
NONDURABLES 17.3 18.2
TECHNOLOGY 12.7 11.8
ENERGY 9.5 10.6
INDUSTRIAL MACHINERY & 8.3 8.2
EQUIPMENT
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF DECEMBER 31,1998
Stocks 96.1%
Short-term
investments 3.9%
Row: 1, Col: 1, Value: 3.7
Row: 1, Col: 2, Value: 96.3
AS OF JUNE 30, 1998
Row: 1, Col: 1, Value: 3.9
Row: 1, Col: 2, Value: 96.09999999999999
Stocks 96.3%
Short-term
investments 3.7%
INVESTMENTS DECEMBER 31, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 96.1%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 7.0%
Boeing Co. 40,513 $ 1,321,737
United Technologies Corp. 56,100 6,100,875
7,422,612
BASIC INDUSTRIES - 5.7%
CHEMICALS & PLASTICS - 0.4%
Eastman Chemical Co. 8,793 393,487
PAPER & FOREST PRODUCTS - 5.3%
International Paper Co. 65,798 2,948,573
Union Camp Corp. 39,900 2,693,250
5,641,823
TOTAL BASIC INDUSTRIES 6,035,310
ENERGY - 9.5%
OIL & GAS - 9.5%
Chevron Corp. 24,800 2,056,850
Exxon Corp. 56,035 4,097,559
Mobil Corp. 43,625 3,800,828
Union Pacific Resources 8,181 74,140
Group, Inc.
10,029,377
FINANCE - 0.4%
CREDIT & OTHER FINANCE - 0.4%
Citigroup, Inc. 7,500 371,250
HEALTH - 25.0%
DRUGS & PHARMACEUTICALS - 14.4%
American Home Products Corp. 90,009 5,068,632
Lilly (Eli) & Co. 18,236 1,620,725
Merck & Co., Inc. 45,426 6,708,852
Pharmacia & Upjohn, Inc. 32,260 1,826,723
15,224,932
MEDICAL EQUIPMENT & SUPPLIES
- - 10.6%
Guidant Corp. 53,902 5,942,696
Johnson & Johnson 62,654 5,255,104
11,197,800
TOTAL HEALTH 26,422,732
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - 8.3%
ELECTRICAL EQUIPMENT - 7.7%
General Electric Co. 79,400 $ 8,103,760
POLLUTION CONTROL - 0.6%
Waste Management, Inc. 14,500 676,063
TOTAL INDUSTRIAL MACHINERY & 8,779,823
EQUIPMENT
MEDIA & LEISURE - 2.9%
PUBLISHING - 2.9%
Knight-Ridder, Inc. 60,000 3,067,500
NONDURABLES - 17.3%
BEVERAGES - 7.5%
Anheuser-Busch Companies, 51,772 3,397,538
Inc.
Coca-Cola Co. (The) 67,698 4,527,304
7,924,842
FOODS - 5.5%
Campbell Soup Co. 58,911 3,240,105
Heinz (H.J.) Co. 42,859 2,426,891
Vlasic Foods International, 5,891 140,279
Inc. (a)
5,807,275
HOUSEHOLD PRODUCTS - 1.3%
Colgate-Palmolive Co. 14,731 1,368,142
TOBACCO - 3.0%
Philip Morris Companies, Inc. 60,000 3,210,000
TOTAL NONDURABLES 18,310,259
TECHNOLOGY - 12.7%
COMPUTERS & OFFICE EQUIPMENT
- - 7.2%
Hewlett-Packard Co. 67,200 4,590,600
International Business 16,422 3,033,965
Machines Corp.
7,624,565
ELECTRONICS - 2.9%
Motorola, Inc. 51,200 3,126,400
PHOTOGRAPHIC EQUIPMENT - 2.6%
Eastman Kodak Co. 37,637 2,709,864
TOTAL TECHNOLOGY 13,460,829
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRANSPORTATION - 0.4%
RAILROADS - 0.4%
Union Pacific Corp. 9,660 $ 435,304
UTILITIES - 6.9%
ELECTRIC UTILITY - 2.3%
Consolidated Edison, Inc. 26,264 1,388,709
Potomac Electric Power Co. 40,000 1,052,500
2,441,209
TELEPHONE SERVICES - 4.6%
GTE Corp. 71,838 4,844,575
TOTAL UTILITIES 7,285,784
TOTAL COMMON STOCKS 101,620,780
(Cost $14,445,942)
CASH EQUIVALENTS - 3.9%
MATURITY AMOUNT
Investments in repurchase $ 4,140,168 4,138,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 4.72%,
dated 12/31/98 due 1/4/99
TOTAL INVESTMENT IN $ 105,758,780
SECURITIES - 100%
(Cost $18,583,942)
</TABLE>
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At December 31, 1998, the aggregate cost of investment securities for
income tax purposes was $18,583,942. Net unrealized appreciation
aggregated $87,174,838, all of which was related to appreciated
investment securities.
At December 31, 1998 the fund had a capital loss carryforward of
approximately $940,100 of which $939,700, and $400 will expire on
December 31, 1999 and 2000, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
ASSETS
Investment in securities, at $ 105,758,780
value (including repurchase
agreements of $4,138,000)
(cost $18,583,942) - See
accompanying schedule
Cash 602
Dividends receivable 166,974
TOTAL ASSETS 105,926,356
LIABILITIES
Payable for fund shares $ 3,257
redeemed
Distributions payable 505,971
Accrued management fee 111,493
Other payables and accrued 47,802
expenses
TOTAL LIABILITIES 668,523
NET ASSETS $ 105,257,833
Net Assets consist of:
Paid in capital $ 19,022,371
Undistributed net investment 724
income
Accumulated undistributed net (940,100)
realized gain (loss) on
investments
Net unrealized appreciation 87,174,838
(depreciation) on investments
NET ASSETS, for 280,430 $ 105,257,833
shares outstanding
NET ASSET VALUE, offering $375.34
price and redemption price
per share ($105,257,833
(divided by) 280,430 shares)
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
INVESTMENT INCOME $ 1,693,513
Dividends
Interest 202,424
TOTAL INCOME 1,895,937
EXPENSES
Management fee $ 429,997
Transfer agent fees 75,407
Accounting fees and expenses 60,686
Non-interested trustees' 979
compensation
Custodian fees and expenses 8,113
Audit 36,528
Legal 409
Miscellaneous 271
Total expenses before 612,390
reductions
Expense reductions (1,047) 611,343
NET INVESTMENT INCOME 1,284,594
REALIZED AND UNREALIZED GAIN 2,475,195
(LOSS)
Net realized gain (loss) on
investment securities
Change in net unrealized 17,498,938
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) 19,974,133
NET INCREASE (DECREASE) IN $ 21,258,727
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 1,284,594 $ 1,376,995
income
Net realized gain (loss) 2,475,195 15,998,653
Change in net unrealized 17,498,938 238,686
appreciation (depreciation)
NET INCREASE (DECREASE) IN 21,258,727 17,614,334
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (1,299,163) (1,333,915)
from net investment income
Share transactions
Reinvestment of distributions 276,827 281,550
Cost of shares redeemed (2,881,579) (20,005,272)
NET INCREASE (DECREASE) IN (2,604,752) (19,723,722)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 17,354,812 (3,443,303)
IN NET ASSETS
NET ASSETS
Beginning of period 87,903,021 91,346,324
End of period (including $ 105,257,833 $ 87,903,021
undistributed net investment
income of $724 and $34,622,
respectively)
OTHER INFORMATION
Shares
Issued in reinvestment of 784 946
distributions
Redeemed (8,544) (75,033)
Net increase (decrease) (7,760) (74,087)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning $ 305.02 $ 252.14 $ 210.05 $ 155.04 $ 150.47
of period
Income from Investment
Operations
Net investment income 4.50 B 4.57 B 4.48 4.45 4.29
Net realized and unrealized 70.41 52.81 42.21 55.06 4.38
gain (loss)
Total from investment 74.91 57.38 46.69 59.51 8.67
operations
Less Distributions
From net investment income (4.59) (4.50) (4.60) (4.50) (4.10)
Net asset value, end of period $ 375.34 $ 305.02 $ 252.14 $ 210.05 $ 155.04
TOTAL RETURN A 24.66% 22.81% 22.32% 38.63% 5.86%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 105,258 $ 87,903 $ 91,346 $ 81,831 $ 61,307
(000 omitted)
Ratio of expenses to average .64% .65% .67% .67% .60%
net assets
Ratio of expenses to average .64% .65% .66% C .67% .60%
net assets after expense
reductions
Ratio of net investment 1.34% 1.59% 1.92% 2.42% 2.82%
income to average net assets
Portfolio turnover rate 0% 0% 0% 0% 0%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Congress Street Fund (the fund) is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company organized as a Massachusetts business trust and is
authorized to issue 3.8 million 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 fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or 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 fund intends to retain and
pay federal income taxes at year end on undistributed net long-term
capital gains. The schedule of investments includes information
regarding income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date. Non-cash dividends included in dividend income, if any, are
recorded at the fair market value of the securities received. Interest
income is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions 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 redemptions in kind and capital loss carryforwards.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences which will reverse in a subsequent period. Any
taxable income or short-term 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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Sales of securities, other than short-term securities, aggregated
$2,732,734, which represents the current value of securities delivered
in redemption of fund shares. There were no purchases of securities
during the period.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
quarterly fee that is computed monthly at an annual rate of .50% of
the fund's average net assets. The management fee is subject to a
reduction to the extent that the monthly average net assets of all
mutual funds advised by FMR exceed $4 billion in any month. The
management fee payable by the fund on its portion of the excess is
reduced by 10%. For the period, the management fee was reduced by
$47,433. For the period, the management fee rate was equivalent to an
annual rate of .45% of average net assets after the fee reduction.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives 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. For the period, the transfer agent fees were
equivalent to an annual rate of .08% of average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus out of
pocket expenses.
5. EXPENSE REDUCTIONS.
The fund has entered into arrangements with its custodian and transfer
agent whereby credits realized as a result of uninvested cash balances
were used to reduce a portion of the fund's expenses. During the
period, the fund's custodian and transfer agent fees were reduced by
$17 and $1,030, respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and the Shareholders of Fidelity Congress Street Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Congress Street Fund at December 31, 1998, and the results of
its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements")
are the responsibility of the Fidelity Congress Street Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at December 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 12, 1999
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
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
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 EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE
WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU
SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL
BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 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
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 75039-5517
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 75039-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Robert A. Lawrence, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, 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
* INDEPENDENT TRUSTEES
CST-ANN-0299 70462
1.540023.101
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH AND INCOME FUNDS
Balanced Fund
Congress Street Fund
Convertible Securities Fund
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Exchange Fund
Fidelity(registered trademark) Fund
Global Balanced Fund
Growth & Income Portfolio
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Puritan(registered trademark) Fund
Real Estate Investment Portfolio
Utilities Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
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(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)(REGISTERED TRADEMARK)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
