FIDELITY
(registered trademark)
CONTRAFUND
SEMIANNUAL REPORT
JUNE 30, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
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 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 34 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 38 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, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY,AND ARE SUBJECT TO INVESTMENT
RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NEITHER THE FUND NOR FIDELITY
DISTRIBUTORS
CORPORATION IS A BANK.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The first several months of 1994 were an unsettling time for many
investors. After three years of a nearly perfect environment for stock
market investing, stock prices generally fell from February through June.
Investors disagree about whether this decline represents only a short-term
correction or signals the beginning of a longer bear market. One can
collect statistics to support either opinion, but of course, nobody knows
for sure what will happen to stock prices in the months ahead.
We do know, however, that market declines are a normal part of stock market
investing. We have historically seen corrections of 10% or more every two
years. That's why I thought this might be a good time to review three basic
investment principles that have proven helpful to successful stock market
investors in every market cycle.
First, take a long-term approach when investing in stocks and stock funds.
If you can afford to leave your money invested through the market's
inevitable ups and downs, you will greatly reduce your vulnerability to any
single decline. Over time, stock prices have gone up - and have
significantly outperformed other types of investments and stayed ahead of
inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by investing in
a number of different stock funds, or in different investment categories,
such as bonds. You should also keep money you'll need in the near future in
a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage of change in value, the average annual
percentage change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1994 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Contrafund -4.81% 1.46% 148.62% 478.19%
Contrafund (incl. 3% sales charge) -7.67% -1.58% 141.16% 460.85%
S&P 500(Registered trademark) -3.39% 1.41% 63.53% 308.81%
Average Growth Fund -5.95% 0.97% 60.86% 252.10%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. For
example, if you had invested $1,000 in a fund that had a 5% return over the
past year, you would have $1,050. You can compare these figures to the
performance of the Standard & Poor's 500 Composite Stock Price Index - a
common proxy for the U.S. stock market. You can also compare them to the
average growth fund, which reflects the performance of 498 growth funds
tracked by Lipper Analytical Services, Inc. Both benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Contrafund 1.46% 19.98% 19.18%
Contrafund (incl. 3% sales charge) -1.58% 19.25% 18.82%
S&P 500(Registered trademark) 1.41% 10.34% 15.12%
Average Growth Fund 0.97% 9.68% 12.95%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Contrafund (022) S&P 500
06/30/84 9700.00 10000.00
07/31/84 9182.81 9876.00
08/31/84 10459.96 10967.30
09/30/84 10459.96 10969.49
10/31/84 10407.18 11012.27
11/30/84 10333.30 10888.94
12/31/84 10625.99 11176.40
01/31/85 11637.47 12047.04
02/28/85 11713.60 12195.22
03/31/85 11811.49 12203.76
04/30/85 11680.97 12192.78
05/31/85 11909.37 12897.52
06/30/85 11985.51 13100.01
07/31/85 12116.02 13080.36
08/31/85 12344.42 12969.18
09/30/85 11724.48 12563.24
10/31/85 12355.30 13143.66
11/30/85 13007.86 14045.32
12/31/85 13501.83 14725.11
01/31/86 13623.97 14807.57
02/28/86 14963.31 15915.18
03/31/86 15630.77 16803.25
04/30/86 15339.51 16613.37
05/31/86 15727.85 17497.20
06/30/86 15655.04 17792.90
07/31/86 14502.15 16798.28
08/31/86 15448.73 18044.71
09/30/86 14526.42 16552.42
10/31/86 15497.28 17507.49
11/30/86 15497.28 17932.92
12/31/86 15299.94 17475.63
01/31/87 17508.87 19829.60
02/28/87 18579.39 20612.87
03/31/87 18887.42 21208.58
04/30/87 18929.42 21019.82
05/31/87 19097.43 21202.70
06/30/87 19797.48 22273.43
07/31/87 20763.56 23402.70
08/31/87 21519.61 24275.62
09/30/87 21085.58 23743.98
10/31/87 14995.12 18629.53
11/30/87 14169.06 17094.45
12/31/87 15009.13 18395.34
01/31/88 15975.20 19169.79
02/29/88 16703.25 20063.10
03/31/88 16731.25 19443.15
04/30/88 17067.28 19658.97
05/31/88 16829.26 19830.00
06/30/88 17641.32 20740.20
07/31/88 17767.33 20661.38
08/31/88 17375.30 19958.90
09/30/88 18089.36 20809.15
10/31/88 18565.39 21387.64
11/30/88 18425.38 21081.80
12/31/88 18164.38 21450.73
01/31/89 19370.55 23020.92
02/28/89 19255.67 22447.70
03/31/89 20275.18 22970.73
04/30/89 21581.86 24162.91
05/31/89 22701.88 25141.51
06/30/89 22558.29 24998.21
07/31/89 24626.01 27255.54
08/31/89 25329.61 27789.75
09/30/89 25817.82 27675.81
10/31/89 25042.43 27033.73
11/30/89 25616.79 27585.22
12/31/89 26002.64 28247.27
01/31/90 24623.48 26351.88
02/28/90 25134.85 26691.82
03/31/90 25677.22 27399.15
04/30/90 25413.78 26714.17
05/31/90 27815.70 29318.80
06/30/90 28172.11 29119.43
07/31/90 27645.24 29026.25
08/31/90 25491.27 26402.28
09/30/90 24422.03 25116.49
10/31/90 24546.00 25008.49
11/30/90 26002.64 26624.04
12/31/90 27026.11 27366.85
01/31/91 29658.63 28560.04
02/28/91 31901.72 30602.08
03/31/91 33770.96 31342.65
04/30/91 33957.88 31417.88
05/31/91 36123.09 32775.13
06/30/91 34098.07 31274.03
07/31/91 36512.51 32731.40
08/31/91 38350.60 33507.13
09/30/91 38459.64 32947.56
10/31/91 39565.61 33389.06
11/30/91 37478.29 32043.48
12/31/91 41868.44 35709.25
01/31/92 43062.35 35045.06
02/29/92 44459.77 35500.65
03/31/92 43253.17 34808.39
04/30/92 43722.40 35831.75
05/31/92 44191.64 36007.33
06/30/92 43119.11 35470.82
07/31/92 44208.40 36921.57
08/31/92 43387.24 36164.68
09/30/92 44124.60 36591.43
10/31/92 45113.34 36719.50
11/30/92 47291.92 37971.63
12/31/92 48522.98 38438.68
01/31/93 50059.75 38761.57
02/28/93 50390.01 39288.72
03/31/93 52798.02 40117.72
04/30/93 53154.77 39146.87
05/31/93 55259.55 40196.00
06/30/93 55277.39 40312.57
07/31/93 55883.85 40151.32
08/31/93 58595.10 41673.06
09/30/93 58719.96 41352.17
10/31/93 59237.24 42208.16
11/30/93 57007.60 41807.19
12/31/93 58919.63 42313.05
01/31/94 60772.81 43751.70
02/28/94 60336.77 42566.03
03/31/94 57951.00 40710.15
04/30/94 58662.88 41231.24
05/31/94 58335.80 41907.43
06/30/94 56046.24 40880.70
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity
Contrafund on June 30, 1984, and paid a 3% sales charge. As the chart
shows, by June 30, 1994, the value of your investment would have grown to
$56,085 - a 460.85% increase on your initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends
reinvested, the same $10,000 investment would have grown to $40,881 - a
308.81% 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
growth in the long run and
volatility in the short run. 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
An interview with William Danoff,
Portfolio Manager of Fidelity Contrafund
Q. WILL, HOW DID THE FUND PERFORM?
A. Modestly better than most of its competitors. For the six months and
year ended June 30, 1994, the fund had total returns of -4.81% and 1.46%,
respectively. This compares to the average growth fund, which returned
- -5.95% and 0.97%, over the same periods.
Q. IT SOUNDS LIKE IT'S BEEN A TOUGH SIX MONTHS FOR THE FUND AND THE MARKET
IN GENERAL.
A. Yes, it's been a frustrating time. There's been a cloud over the market
since the Federal Reserve Board first raised short-term interest rates in
February of this year. Stocks, along with bonds, tend to turn in weaker
performance during periods of high interest rates. To make matters worse,
small capitalization companies - in which the fund had a significant stake
- - had an especially difficult time in this environment. That's because as
the market weakened, investors tended to hold on to blue-chip stocks and
sell stocks of smaller, less established companies, which often trade over
the counter. As a result, 70% of all over-the-counter stocks fell more than
20% from their highs in the last 12 to 18 months, while only 46% of stocks
on the New York Stock Exchange tumbled more than 20%. Another factor that
worked against the fund is that it owned stock in a large number of
companies - about 600. So while it held some top performers, it also owned
some stocks that fell hard when the market weakened.
Q. HAS THIS MARKET ENVIRONMENT
AFFECTED THE FUND'S STRATEGY?
A. Not in any major way, but it has accelerated one change I had been
planning to make. Over the past year, I reduced the number of stocks the
fund holds so I could concentrate the fund's investments in the companies
with the best prospects and avoid those that could pull down the fund's
performance.
Q. WHAT STOCKS DID YOU LIKE?
A. That varied during the period. At the beginning of the year, I favored
technology stocks, which were turning in strong results. Cyclical stocks -
those that perform well when the economy is improving and poorly when the
economy is weak - also looked good. In addition, I had a sizable amount of
the fund in cash as a defensive move. During the second half of the period,
when it seemed clear that the U.S. economy was beginning to peak, I started
shifting out of cyclicals and instead concentrated on the banking and
health care sectors. Banks turned in solid results during the period, and
both sectors should offer decent earnings in the slow growth economy I
expect going forward.
Q. STILL, YOU HAD ALMOST 20% OF THE FUND IN TECHNOLOGY STOCKS AT THE END OF
THE PERIOD. WHY?
A. In general, technology stocks have held steady in the difficult market
of the past six months. Going forward, they continue to look attractive
because their performance tends to be influenced by new product cycles more
than the overall economic picture. For instance, the semiconductor company
Intel saw its sales increase this year when it introduced its Pentium chip.
In addition, many technology stocks - including another semiconductor
manufacturer, Texas Instruments - are benefiting from a strong demand for
personal computers and more powerful desktop workstations that's been
fueled by new multimedia applications.
Q. LET'S TALK MORE ABOUT WHY BANKING AND HEALTH CARE LOOK GOOD . . .
A. Sure. Banking first. As the economy slows going forward, interest rates
may drop. That's good news for bank stocks, which usually perform well
during periods of falling interest rates. Banks also are attractive because
many banks are controlling costs tightly and the quality of their loans is
improving. In addition, with interstate banking on the way, many banks are
looking to grow by acquiring others. And there's a lot of potential for the
consolidation of banks going forward: right now there are more than 5,000
banks in the United States; as a comparison, there are only about 10 banks
in Canada. NationsBank, a blue-chip bank, performed well during the period
because it cut costs and acquired a number of other banks. In terms of
health care, these stocks also looked good because they were trading at low
price-to-earnings multiples. I expect them to show slower growth than they
did in the last decade, but companies with the best new products should
produce above average earnings growth, even if the economy slows. These
companies also have profit potential because, like banking, the health care
industry is consolidating.
Q. WHAT ABOUT YOUR SECOND LARGEST SECTOR, ENERGY?
A. I was market weighted in energy stocks. Over the period, I focused
mostly on Canadian exploration and production companies and on oil
companies that cut costs, such as Amoco.
Q. THERE'S BEEN A LOT OF TALK ABOUT DERIVATIVES. DOES THE FUND OWN THEM?
A. The fund has the authority to use derivatives to help manage its
investments more efficiently. I'm currently using forward foreign currency
contracts to hedge a small portion of the fund's foreign holdings against
currency volatility.
Q. LOOKING BACK OVER THE PERIOD, ANY REGRETS?
A. Sure. I wish I had made more defensive moves. Specifically, I wish I'd
sold the fund's over-the-counter stocks that had high price-to-earnings
multiples sooner. These stocks were bid up to extremely high levels last
fall and fell very quickly and sharply during this period, even though many
of the companies' business prospects remained positive.
Q. WHAT DO YOU THINK SHAREHOLDERS CAN EXPECT GOING FORWARD?
A. I believe the market will continue to be choppy. As I said, going
forward my goal is to position the fund in stocks that show potential to
grow rapidly despite a slowing economy. The good news about a declining
market is that the stock prices of both good and bad companies fall. My job
is to buy the good stocks while their share prices are down. Also, as I
noted, in a slowing economy, interest rates could fall, which could lead to
higher stock prices over the next year.
FUND FACTS
GOAL: to increase the value
of the fund's shares over the
long term by investing in
companies undergoing
positive changes and
turnarounds
START DATE: May 17, 1967
SIZE: as of June 30, 1994,
more than $7 billion
MANAGER: Will Danoff, since
October 1990; assistant,
Fidelity Magellan Fund,
January 1990 - September
1990; manager, Fidelity
Select Retailing Portfolio,
1986 - 1989; joined Fidelity
in 1986
(checkmark)
WILL DANOFF ON PICKING
CONTRARIAN STOCKS:
"When I pick stocks, I look for
companies with a spark -
something that will make their
earnings take off - like new
management, a new product
cycle, dramatic cost cutting,
or a possible acquisition or
merger.
"A good example of a stock
that has this spark is the health
care company Becton,
Dickinson & Co. It has a new
CEO, who ran the company's
medical device division very
profitably in the past. Now
he's looking to clean up the
diagnostic area of the
company, which has been a
drag on performance. If he
can do this, the company has
the potential to double its
earnings.
``I look for companies that are
priced cheaply, but I think the
biggest mistake anyone can
make is to avoid great
companies that are fairly
priced, but aren't inexpensive.
The old adage - you get
what you pay for - applies
here. What's important is not
always just price. I'm looking
for exceptional
earnings-per-share growth."
(bullet) Over the past six months
the fund's cash and
short-term holdings have
dropped from 19.0% to 13.2%
of the fund's total
investments. As the market
slowed and stocks became
less expensive, the fund
bought more equities.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF JUNE 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Intel Corp. 1.7 0.2
Texas Instruments, Inc. 1.5 0.2
International Business Machines
Corp. 1.4 1.8
NationsBank Corp. 0.9 -
Oracle Systems Corp. 0.9 -
Amoco Corp. 0.9 -
Federal National Mortgage
Association 0.9 -
United Technologies Corp. 0.8 1.0
Microsoft Corp. 0.8 0.4
Federal Home Loan Mortgage
Corporation 0.8 -
TOP FIVE INDUSTRIES AS OF JUNE 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO
Technology 19.1 11.1
Energy 9.7 10.0
Finance 9.3 3.1
Health 6.9 7.2
Retail & Wholesale 6.0 4.0
ASSET ALLOCATION
AS OF JUNE 30, 1994* AS OF DECEMBER 31, 1993**
Row: 1, Col: 1, Value: 13.3
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 45.6
Row: 1, Col: 4, Value: 40.0
Stocks 85.6%
Bonds 1.1%
Short-term and
other investments 13.3%
* FOREIGN
INVESTMENTS 12.8%
Row: 1, Col: 1, Value: 19.1
Row: 1, Col: 2, Value: 1.2
Row: 1, Col: 3, Value: 40.1
Row: 1, Col: 4, Value: 40.0
Stocks 80.1%
Bonds 0.8%
Short-term and
other investments 19.1%
** FOREIGN
INVESTMENTS 13.5%
INVESTMENTS JUNE 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investments in Securities
COMMON STOCKS - 85.1%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 1.6%
AEROSPACE & DEFENSE - 1.0%
Boeing Co. 287,700 $ 13,306
McDonnell Douglas Corp. 230,000 26,910
Orbital Sciences Corp. 63,600 1,066
Sturm Ruger & Co., Inc. (f) 962,100 28,382
Transtechnology Corp. 132,000 1,683
71,347
DEFENSE ELECTRONICS - 0.6%
ESCO Electronics Corp. (trust receipts) (a) 398,700 3,289
Loral Corp. 887,100 31,049
Tech-Sym Corp. (a) (f) 328,600 6,736
Watkins-Johnson Co. 199,200 5,901
46,975
TOTAL AEROSPACE & DEFENSE 118,322
BASIC INDUSTRIES - 5.8%
CHEMICALS & PLASTICS - 3.2%
Airgas, Inc. (a) 171,300 4,516
Albemarle Corp. (a) 83,900 1,374
Cambrex Corp. (f) 405,600 8,619
du Pont (E.I.) de Nemours & Co. 995,000 58,082
Eastman Chemical Co. 337,000 16,092
FMC Corp. (a) 20,000 1,083
GEON 517,900 13,465
Georgia Gulf Corp. (a) 450,000 15,413
Hanna (M.A.) Co. 1,048,800 26,613
Methanex Corp. (a) 2,127,600 24,802
Olin Corp. 196,000 10,560
Praxair, Inc. 247,300 4,822
Rohm & Haas Co. 56,700 3,530
Sterling Chemical, Inc. 591,200 5,543
Union Carbide Corp. 1,350,000 36,113
Wellman, Inc. 332,000 9,255
239,882
IRON & STEEL - 1.3%
Birmingham Steel Corp. 284,600 7,685
Inland Steel Industries, Inc. (a) 385,000 13,427
Iscor Ltd. (a) 1,469,525 1,094
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - CONTINUED
J & L Specialty Steel, Inc. 129,900 $ 2,241
Mueller Industries, Inc. (a) 346,200 10,083
National Steel Corp. Class B (a) 132,000 2,046
Nucor Corp. 868,600 59,499
Roanoke Electric Steel Corp. 160,100 2,321
98,396
METALS & MINING - 0.3%
ASARCO, Inc. 225,000 6,328
Alcan Aluminium Ltd. 324,500 7,330
Brush Wellman, Inc. 99,000 1,572
Cyprus Amax Minerals Co. 100,000 2,975
Noranda, Inc. 235,000 4,014
Wolverine Tube, Inc. (a) 164,400 3,720
25,939
PACKAGING & CONTAINERS - 0.1%
Owens-Illinois, Inc. (a) 560,800 6,170
PAPER & FOREST PRODUCTS - 0.9%
Abitibi-Price, Inc. (a) 954,900 11,476
Abitibi-Price, Inc. (installment receipts) (a) (i) 114,100 608
Doman Industries Ltd. Class B, Series 2 (non-vtg.) 238,000 2,559
Domtar, Inc. (a) 1,311,100 6,398
Fletcher Challenge Canada Ltd. Class A 176,107 2,148
Fletcher Challenge Ltd. (Reg.) (a) 500,000 1,091
Jefferson Smurfit Corp. 16,600 268
Mead Corp. 50,000 2,206
QUNO Corp. (h) 36,300 604
Scott Paper Co. 351,500 18,366
Smurfit (Jefferson) Group PLC 1,277,300 6,666
Stone Consolidated Corp. (a) 385,800 4,463
Stone Container Corp. (a) 541,200 7,915
Temple-Inland, Inc. 32,800 1,562
Willamette Industries, Inc. 2,100 90
66,420
TOTAL BASIC INDUSTRIES 436,807
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONGLOMERATES - 1.2%
Brascan Ltd. Class A 140,700 $ 1,907
Dial Corp. (The) 600,000 25,650
Quixote Corp. 10,000 205
United Technologies Corp. 967,500 62,162
89,924
CONSTRUCTION & REAL ESTATE - 2.7%
BUILDING MATERIALS - 0.8%
Armstrong World Industries, Inc. 474,400 22,119
Centex Construction Products (a) 510,000 6,056
Lilly Industrial Coatings, Inc. Class A 54,700 752
Tecumseh Products Co. Class A 282,000 13,113
USG Corp. (a) 1,095,600 19,858
61,898
CONSTRUCTION - 0.5%
Blount, Inc. Class A 198,100 7,726
Clayton Homes, Inc. (a) 156,500 2,758
Oakwood Homes Corp. 434,000 10,199
Schuler Homes, Inc. (a) (f) 1,043,600 18,002
38,685
ENGINEERING - 0.6%
Fluor Corp. 630,000 32,051
Foster Wheeler Corp. 433,600 15,772
MasTec, Inc. (a) 70,000 560
48,383
REAL ESTATE INVESTMENT TRUSTS - 0.8%
Bradley Real Estate Trust (SBI) 96,200 818
Duke Realty Investors, Inc. 250,700 6,362
Equity Residential Property Trust (SBI) 233,700 6,953
Health Care Property Investors, Inc. 78,300 2,408
Liberty Property Trust (SBI) 205,000 4,100
Macerich Co. 101,900 1,987
Manufactured Home Community 265,600 5,511
Merry Land & Investment Co., Inc. 281 6
Simon Properties Group, Inc. (a) 1,095,300 29,162
Summit Property Trust 59,000 1,180
58,487
TOTAL CONSTRUCTION & REAL ESTATE 207,453
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 4.5%
AUTOS, TIRES, & ACCESSORIES - 2.4%
BMW AG (a) 40,000 $ 19,653
Breed Technologies, Inc. (a) 772,000 21,423
Custom Chrome, Inc. 24,600 351
General Motors Corp. 100,000 5,025
Goodyear Tire & Rubber Co. 397,800 14,321
Honda Motor Co. Ltd. 1,700,000 29,843
NACCO Industries, Inc. Class A 27,300 1,467
Spartan Motors, Inc. 31,600 403
Sumitomo Rubber Industries 1,562,000 16,642
Suzuki Motor Corp. 135,000 1,795
Toyota Motor Corp. 2,575,000 57,745
Wabash National Corp. 370,600 16,584
185,252
CONSUMER ELECTRONICS - 0.8%
Aktiebolaget Electrolux (a) 200,000 9,222
Makita Corp. 108,000 2,203
Matsushita Electric Industrial Co. Ltd. 1,482,000 27,219
Sony Corp. 390,000 23,942
62,586
HOME FURNISHINGS - 0.3%
Haverty Furniture Companies, Inc. (f) 426,700 5,121
O'Sullivan Industries Holdings (a) 315,500 3,983
Rhodes, Inc. (a) (f) 631,200 10,099
19,203
TEXTILES & APPAREL - 1.0%
Cygne Designs, Inc. (a) 178,300 3,834
Donnkenny, Inc. (a) (f) 385,000 9,288
Farah, Inc. (a) (f) 503,100 6,981
Fieldcrest Cannon, Inc. (a) 187,800 4,648
Forstmann & Co., Inc. 148,200 1,667
Galey & Lord, Inc. (a) 204,400 3,475
Haggar Corp. 20,000 610
Liz Claiborne, Inc. 60,200 1,204
Nautica Enterprises, Inc. (a) 42,000 1,013
Nisshinbo Industries 135,000 1,548
Tandy Brands Accessories, Inc. (a) 175,700 2,987
Unifi, Inc. 253,300 5,921
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
Vista Resources, Inc. (a) 156,700 $ 3,467
Warnaco Group, Inc. Class A (a)(f) 916,400 26,919
73,562
TOTAL DURABLES 340,603
ENERGY - 9.7%
ENERGY SERVICES - 2.3%
Energy Service Co., Inc. (a) 2,206,325 38,059
Enserv Corp. (a) 50,000 483
Global Marine, Inc. (a) 4,100,000 18,963
Marine Drilling Cos., Inc. (a) 809,000 4,652
Nowsco Well Service Ltd. (a) 1,273,500 20,254
Offshore Pipelines, Inc. (a)(f) 789,200 15,488
Schlumberger Ltd. 240,000 14,190
Smith International, Inc. (a)(f) 2,752,400 41,974
Tidewater, Inc. 67,100 1,560
Tuboscope Vetco Corp. (a) 450,000 3,038
Weatherford International, Inc. (a) 1,300,000 17,550
176,211
OIL & GAS - 7.4%
Amerada Hess Corp. 800,000 39,397
Amoco Corp. 1,227,400 69,962
Anadarko Petroleum Corp. 973,800 49,786
Anderson Exploration Ltd. (a) 142,100 3,326
Apache Corp. 223,000 6,160
Beau Canada Exploration 2,026,300 3,384
Blue Range Resource Corp. Class A (a) 290,500 2,258
British Borneo Petroleum 240,800 784
British Petroleum PLC ADR 789,000 56,611
Brown Tom, Inc. (a) 667,100 9,840
Burlington Resources, Inc. 104,700 4,332
Camco International, Inc. 295,900 6,029
Canadian National Resources Ltd. (a) 2,524,800 36,049
Canadian National Resources Ltd. (a)(h) 372,000 5,311
Coda Energy, Inc. (a) 69,800 480
Cogas Energy Corp. 21,200 77
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Enron Oil & Gas Co. 466,000 $ 10,718
Grad & Walker Energy Corp. (f) 636,100 6,438
Inverness Petroleum Ltd. (a) 982,500 8,168
Jordan Petroleum Ltd. (a) 472,800 3,418
Louis Dreyfus Natural Gas Corp. 16,200 227
Murphy Oil Corp. 762,000 32,576
Newfield Exploration Co. (a) 87,500 1,980
Noble Affiliates, Inc. 433,500 13,113
Northstar Energy Corp. (a) 869,200 9,740
Oryx Energy Co. 205,600 3,084
Paramount Resources Ltd. 142,000 1,848
Parker & Parsley Petroleum Co. 364,280 9,289
Petromet Resources Ltd. Ord. (a) 668,600 4,411
Phillips Petroleum Co. 580,500 18,141
Pinnacle Resources Ltd. 350,000 5,187
Poco Petroleum Ltd. (a) 291,700 1,977
Pogo Producing Co. (a) 801,800 18,542
Renaissance Energy Ltd. (a) 970,100 20,251
Rio Alto Exploration Ltd. (a) 1,858,300 12,091
Rio Alto Exploration Ltd. (a)(h) 237,000 1,542
Sceptre Resources Ltd. (a) 379,600 3,533
Snyder Oil Corp. 226,100 4,324
Stampeder Exploration Ltd. (warrants) (a)(h) 180,000 673
Summit Resources Ltd. 322,000 2,095
Tesoro Petroleum Corp. (a) 430,300 4,680
Tide West Oil Co. 97,900 1,126
Total Compagnie Francaise des Petroles Class B 59,800 3,445
Total SA sponsored ADR (a) 511,100 14,694
Triton Energy Corp. (a) 83,800 2,776
Unocal Corp. 1,375,000 39,359
Vintage Petroleum, Inc. 199,700 4,194
557,426
TOTAL ENERGY 733,637
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - 9.3%
BANKS - 4.9%
AmSouth Bancorporation 98,500 $ 3,088
Bank of Boston Corp. 946,600 23,310
Bank of New York Co., Inc. 356,400 10,291
Bank South Corp. 814,800 14,666
Barnett Banks, Inc. 88,400 3,868
Boatmen's Bancshares, Inc. 264,700 8,338
Central Fidelity Banks, Inc. 194,900 6,432
Chase Manhattan Corp. 450,000 17,213
Citicorp 286,061 11,407
City National Corp. (a) 172,200 1,722
Comerica, Inc. 208,500 5,890
Compass Bancshares, Inc. 112,400 2,782
Fifth Third Bancorp 70,000 3,658
First Bank System, Inc. 1,090,000 39,785
First Chicago Corp. 535,600 25,776
First Interstate Bancorp 150,000 11,550
First Security Corp. 133,000 3,890
First Tennessee National Corp. 74,600 3,264
Fleet Financial Group, Inc. 900,000 33,975
Integra Financial Corp. 33,300 1,557
Liberty Bancorporation, Inc. 16,300 513
Mercantile Bancorporation, Inc. 100,000 3,513
NationsBank Corp. 1,395,249 71,681
North Fork Bancorporation, Inc. 192,890 2,556
Regions Financial Corp. 413,000 14,403
Signet Banking Corp. 1,855 75
SouthTrust Corp. 425,400 8,668
State Street Boston Corp. 367,000 14,175
Union Planters Corp. 23,600 631
Wells Fargo & Co. 124,200 18,677
West One Bancorp 279,100 8,024
375,378
CREDIT & OTHER FINANCE - 1.1%
Anglovaal Ltd. Class N 50,000 6,460
Brierley Investments Ltd. 5,257,073 3,844
Dean Witter Discover & Co. 572,800 21,480
First USA, Inc. 451,000 17,307
Gencor Ltd. (Reg.) (a) 1,700,000 3,754
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Green Tree Acceptance, Inc. 840,000 $ 23,520
MBNA Corp. 480,600 10,814
87,179
FEDERAL SPONSORED CREDIT - 1.7%
Federal Home Loan Mortgage Corporation 1,000,000 60,500
Federal National Mortgage Association 830,000 69,305
129,805
INSURANCE - 0.6%
American International Group, Inc. 103,600 8,974
CIGNA Corp. 226,300 16,548
NWNL Companies, Inc. 39,600 1,317
SunAmerica, Inc. 33,100 1,353
Travelers, Inc. (The) 480,400 15,493
43,685
SAVINGS & LOANS - 0.7%
Bay Ridge Bancorp, Inc. (a) 35,000 525
Brooklyn Bancorp, Inc. 419,000 14,665
Charter One Financial Corp. 171,700 3,477
Collective Bancorp, Inc. 89,500 1,969
GP Financial Corp. (a) 913,200 20,319
Golden West Financial Corp. 95,000 3,669
Roosevelt Financial Group, Inc. 47,400 758
Standard Federal Bank 30,000 750
TCF Financial Corp. 97,300 3,296
49,428
SECURITIES INDUSTRY - 0.3%
Daiwa Securities (a) 768,000 13,482
Lehman Brothers Holdings, Inc. 489,400 7,402
Nomura Securities Co. Ltd. (a) 65,000 1,570
22,454
TOTAL FINANCE 707,929
HEALTH - 6.9%
DRUGS & PHARMACEUTICALS - 2.6%
Allergan, Inc. 424,600 9,182
American Cyanamid Co. 450,000 25,200
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS - CONTINUED
COR Therapeutics, Inc. (a) 110,100 $ 1,294
Elan PLC ADR (a) 256,500 8,913
Forest Laboratories, Inc. (a) 121,200 5,272
Genentech, Inc. (redeemable) (a) 190,900 9,402
Lilly (Eli) & Co. 600,000 34,125
Mylan Laboratories, Inc. 130,000 2,763
North American Biologicals, Inc. (a)(f) 795,000 5,018
Perspective Biosystems, Inc. 17,000 276
Pfizer, Inc. 600,000 37,875
Schering-Plough Corp. 515,000 31,544
Warner-Lambert Co. 355,900 23,489
194,353
MEDICAL EQUIPMENT & SUPPLIES - 2.5%
Acuson Corp. (a) 247,700 3,249
Baxter International, Inc. 1,550,000 40,688
Beckman Instruments, Inc. 438,800 11,080
Becton, Dickinson & Co. 389,300 15,913
Cardinal Health, Inc. 675,000 26,460
Cordis Corp. (a) 79,550 3,088
Datascope Corp. 46,000 736
Hologic, Inc. (a) 58,900 633
Kendall International, Inc. (a) 209,500 10,685
McKesson Corp. 253,100 18,255
Millipore Corp. 250,000 13,188
Owens and Minor, Inc. 1,231,600 18,320
St. Jude Medical, Inc. 260,000 8,450
Sybron Corp. (a) 73,000 2,190
U.S. Surgical Corp. 625,800 13,924
186,859
MEDICAL FACILITIES MANAGEMENT - 1.8%
Charter Medical Corp. (a) 212,200 4,799
Columbia/HCA Healthcare Corp. 700,000 26,250
Curaflex Health Services, Inc. (a) 405,100 2,051
Health Care & Retirement Corp. 30,000 743
Health Management Associates, Inc. Class A (a) 797,500 16,349
Healthinfusion, Inc. (a) 108,900 776
Homecare Management, Inc. (a) 329,000 4,771
Humana, Inc. (a) 598,000 9,643
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - CONTINUED
Integrated Health Services, Inc. (a) 364,000 $ 10,920
Living Centers of America, Inc. (a) 30,000 863
Medisys, Inc. 123,600 479
Multicare Companies, Inc. (a) 500,000 8,625
Quorum Health Group, Inc. (f) 467,200 8,176
Rehabcare Corp. (a) 130,000 1,690
T2 Medical, Inc. 507,900 5,269
United HealthCare Corp. 810,000 36,045
137,449
TOTAL HEALTH 518,661
INDUSTRIAL MACHINERY & EQUIPMENT - 3.7%
ELECTRICAL EQUIPMENT - 1.4%
Avid Technology, Inc. (a) 554,000 15,096
BMC Industries, Inc. (a) 222,300 6,030
C COR Electronics, Inc. (a) 31,100 770
Charter Power Systems, Inc. 107,300 1,301
Juno Lighting, Inc. 15,000 289
Mitsubishi Electric Co. Ord. 1,158,000 7,861
Oak Industries, Inc. (a) 75,000 1,491
Philips NV 2,000,000 57,500
Scientific-Atlanta, Inc. 485,500 16,689
107,027
INDUSTRIAL MACHINERY & EQUIPMENT - 1.1%
Astec Industries, Inc. (a) 153,300 2,184
CMI Corp. Oklahoma Class A 642,700 3,455
Caterpillar, Inc. 258,200 25,820
Enerflex Systems Ltd. 135,200 1,637
IDEX Corp. (a) 64,400 2,544
Imo Industries, Inc. (f) 1,040,400 9,884
Komatsu Ltd. Ord. 1,695,000 16,511
Nokia AB Free shares 189,100 15,406
Osmonics, Inc. 34,000 531
Park-Ohio Industries, Inc. (a) 178,400 2,342
Parker-Hannifin Corp. 170,400 7,263
87,577
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
POLLUTION CONTROL - 1.2%
Browning-Ferris Industries, Inc. 571,500 $ 17,359
Harding Associates, Inc. (a) 95,500 573
OHM Corp. (f) 1,557,095 16,544
Safety Kleen Corp. 154,700 2,630
Sanifill, Inc. (a) 631,100 15,935
Sevenson Environmental Services, Inc. 76,000 1,387
TETRA Technologies, Inc. (a) 100,000 863
USA Waste Services, Inc. (a) 649,337 7,549
United Waste Systems, Inc. (f) 690,400 12,945
Western Waste Industries, Inc. (a) 608,100 12,162
87,947
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 282,551
MEDIA & LEISURE - 4.8%
BROADCASTING - 1.8%
Broadcasting Partners, Inc. Class A (a)(f) 281,700 3,169
Capital Cities/ABC, Inc. 698,500 49,682
Clear Channel Communications, Inc. (a) 513,800 19,332
EZ Communications, Inc. (a) (f) 497,700 5,288
Heritage Media Corp. Class A (a)(f) 1,111,000 19,720
Infinity Broadcasting Corp. (a) 272,900 6,618
Jacor Communications, Inc. Class A (a)(f) 969,700 11,879
New World Communications Group, Inc. Class A 1,087,800 13,733
Saga Communications, Inc. Class A (a)(f) 408,700 4,955
Scandinavian Broadcasting Corp. (a) 140,000 3,430
137,806
ENTERTAINMENT - 0.3%
Anchor Gaming 22,000 264
Cedar Fair LP (depositary units) 41,500 1,338
Harvey's Casino Resorts 231,700 3,012
Royal Carribean Cruises Ltd. 591,100 16,403
Scientific Games Holdings Corp. (a) 22,300 775
21,792
LEISURE DURABLES & TOYS - 1.8%
ARCTCO, Inc. 538,100 14,124
Authentic Fitness Corp. (a) 229,300 3,210
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - CONTINUED
Brunswick Corp. 1,138,500 $ 25,047
Callaway Golf Co. 599,400 23,377
Champion Enterprises, Inc. (a) 325,200 9,146
Coastcast Corp. (a) 293,300 7,479
Cobra Golf, Inc. 119,000 4,091
ERO, Inc. (a) 27,500 272
Harley Davidson, Inc. 490,000 22,418
Mattel, Inc. 610,000 15,479
Thor Industries, Inc. (f) 561,900 11,238
West Marine, Inc. 147,500 3,245
139,126
LODGING & GAMING - 0.4%
Grand Palais Enterprises, Inc. (a)(f)(g) 398,400 6,598
La Quinta Motor Inns, Inc. 698,175 18,240
Penn National Gaming, Inc. 88,000 649
Sholodge, Inc. (a) 53,033 1,087
Supertel Hospitality, Inc. 161,200 1,934
28,508
PUBLISHING - 0.1%
Meredith Corp. 185,000 7,862
Park Communications, Inc. (a) 65,000 1,544
9,406
RESTAURANTS - 0.4%
Au Bon Pain, Inc. Class A (a) 16,300 325
Bugaboo Creek Steak House, Inc. 11,000 116
CKE Restaurant, Inc. 1,086,800 9,238
Consolidated Products, Inc. (a) 246,433 2,526
Daka International, Inc. (a) 25,000 322
Ground Round Restaurants, Inc. (a)(f) 783,200 4,699
IHOP Corp. (a) 439,500 12,581
Quantum Restaurant Group, Inc. (a) 125,500 1,051
Uno Restaurant Corp. (a) 152,700 1,584
32,442
TOTAL MEDIA & LEISURE 369,080
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 1.2%
BEVERAGES - 0.3%
Dr. Pepper/Seven-Up Companies, Inc. (a) 1,131,200 $ 26,018
Snapple Beverage Corp. 7,600 154
26,172
FOODS - 0.3%
Chock Full-O-Nuts Corp. 498,000 3,424
ConAgra, Inc. 35,000 1,068
Goodman Fielder Ltd. Ord. 2,153,000 2,022
IBP, Inc. 574,800 15,304
Michael Foods, Inc. 145,000 1,595
23,413
HOUSEHOLD PRODUCTS - 0.3%
Premark International, Inc. 100,400 7,555
Safeskin Corp. (a)(f) 754,400 11,316
Stanhome, Inc. 72,800 2,402
21,273
TOBACCO - 0.3%
Philip Morris Companies, Inc. 50,000 2,598
RJR Nabisco Holdings Corp. (a) 987,300 6,047
UST, Inc. 543,900 14,753
23,398
TOTAL NONDURABLES 94,256
PRECIOUS METALS - 0.5%
Anglo American Corp. of South Africa Ltd. ADR 17,500 840
Franco Nevada Mining Corp. 295,100 15,680
Golden Star Resources Ltd. Canada (a) 238,000 2,452
Great Central Mines NL 82,700 593
Homestake Mining Co. 500,000 9,375
Newmont Mining Corp. 62,500 2,516
Placer Dome, Inc. 119,100 2,551
Western Mining Corp. Holdings Ltd. 400,000 2,099
Zapopan NL 2,561,000 5,593
41,699
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - 5.8%
APPAREL STORES - 1.0%
AnnTaylor Stores Corp. (a) 1,056,200 $ 40,532
Brown Group, Inc. 61,700 2,321
Cato Corp. Class A 30,000 383
Filene's Basement Corp. (a) 48,000 468
Gap, Inc. 596,300 25,492
Goody's Family Clothing (a) 21,000 383
One Price Clothing Stores, Inc. (a) 79,100 1,246
Talbots, Inc. 100,000 3,000
73,825
DRUG STORES - 0.3%
General Nutrition Companies, Inc. (a) 90,000 1,552
Revco (D.S.), Inc. (a) 1,073,102 17,170
Rite Aid Corp. 311,100 6,300
25,022
GENERAL MERCHANDISE STORES - 1.3%
Dayton Hudson Corp. 290,000 23,489
Michaels Stores, Inc. (a) 249,800 8,400
Neiman-Marcus Group, Inc. 474,500 7,533
Nordstrom, Inc. 205,000 8,713
Sears, Roebuck & Co. 887,100 42,581
Stein Mart, Inc. (a) 213,600 3,738
94,454
GROCERY STORES - 1.5%
Albertson's, Inc. 157,500 4,330
American Stores Co. 111,000 2,720
Fleming Companies, Inc. 178,200 4,945
Ingles Markets, Inc. Class A 77,400 822
Kroger Co. (The) (a) 594,300 13,817
Quality Food Centers, Inc. 30,000 683
Richfood Holdings, Inc. Class A 906,000 13,817
Rykoff-Sexton, Inc. (a) 256,300 4,806
Safeway, Inc. (a) 1,153,000 27,528
Starbucks Corp. (a) 585,800 14,791
Stop & Shop Companies, Inc. (a) 1,017,200 24,413
Whole Foods Market, Inc. (a) 178,600 2,768
115,440
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - 1.7%
Argos PLC Ord. 470,000 $ 2,475
Best Buy Co., Inc. 20,000 578
Campo Electronics, Appliances and Computers, Inc. (a) 80,000 750
Circuit City Stores, Inc. 722,900 14,819
Finish Line, Inc. Class A (f) 252,000 1,575
Friedmans, Inc. Class A (a) 71,000 941
Futures Shops Ltd. 77,700 1,376
Home Depot, Inc. (The) 994,100 41,876
Lillian Vernon Corp. 125,700 2,325
Lowe's Companies, Inc. 1,100,000 37,675
Luria (L.) & Son, Inc. (a) 118,800 950
Musicland Stores Corp. (a) 742,600 11,882
Office Depot, Inc. (a) 211,100 4,222
Rex Stores Corp. 9,000 146
Sodak Gaming, Inc. (a) 202,000 2,273
Spiegel, Inc. Class A 84,100 1,598
Tiffany & Company, Inc. 56,200 1,946
Williams-Sonoma, Inc. (a) 155,000 4,689
132,096
TOTAL RETAIL & WHOLESALE 440,837
SERVICES - 1.7%
LEASING & RENTAL - 0.3%
Agency Rent-A-Car, Inc. 248,500 2,764
Blockbuster Entertainment Corp. 795,000 20,571
23,335
PRINTING - 0.4%
Alco Standard Corp. 20,000 1,142
Cadmus Communications Corp. 98,000 1,740
Cyrk, Inc. (a)(f) 544,600 12,390
Devon Group, Inc. (a) 101,000 1,970
Moore Corporation Ltd. 630,000 10,589
27,831
SERVICES - 1.0%
Barefoot, Inc. 187,200 6,130
CDI Corp. (a) 460,400 6,100
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
SERVICES - CONTINUED
Earth Technology Corp. (USA) (f) 199,400 $ 2,368
Heidemij NV 97,200 948
Manpower, Inc. (a) 698,200 14,662
Medaphis Corp. 32,200 886
Pittston Company Services Group 551,500 14,753
Regis Corp. (a) 77,500 1,008
Robert Half International, Inc. (a) 540,600 21,827
Western Atlas, Inc. 158,700 7,558
76,240
TOTAL SERVICES 127,406
TECHNOLOGY - 18.9%
COMMUNICATIONS EQUIPMENT - 1.2%
ADC Telecommunications, Inc. (a) 148,600 5,981
Ericsson (L.M.) Telephone Co. Class B ADR 90,000 4,461
General Instrument Corp. (a) 982,600 56,008
Inter-Tel, Inc. (a)(f) 784,400 7,158
MB Communications, Inc. 290,800 2,981
Porta Systems Corp. (a)(f) 443,600 3,382
3Com Corp. (a) 76,200 3,915
Telco Systems, Inc. (a)(f) 466,500 5,598
89,484
COMPUTER SERVICES & SOFTWARE - 4.6%
Adobe Systems, Inc. 25,000 680
BancTec, Inc. (a) 319,900 6,397
Boole & Babbage, Inc. 20,400 530
CACI International, Inc. Class A 103,000 876
Ceridian Corp. (a) 993,700 24,470
Computer Sciences Corp. (a) 300,000 12,488
Compuware Corp. (a) 419,800 17,369
Continuum Co., Inc. (a) 255,500 5,206
Corel Systems Corp. (a) 51,500 917
Electronics for Imaging, Inc. (a) 20,000 320
Equifax, Inc. 500,000 14,125
LEGENT Corp. (a) 497,500 13,433
Lotus Development Corp. (a) 900,000 33,075
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
MicroAge, Inc. (a) 58,100 $ 915
Microsoft Corp. (a) 1,200,000 61,800
Oracle Systems Corp. (a) 1,870,000 70,125
Peoplesoft, Inc. (a) 99,000 3,465
Platinum Technology, Inc. (a) 539,500 7,014
SafeCard Services, Inc. 940,900 16,113
State of The Art, Inc. (a)(f) 705,400 4,409
Sterling Software, Inc. (a) 124,900 3,747
Stratacom, Inc. (a) 268,500 5,639
Sybase, Inc. (a) 777,800 38,112
VMark Software, Inc. (a)(f) 389,000 6,905
Walker Interactive Systems, Inc. (a) 187,200 1,568
349,698
COMPUTERS & OFFICE EQUIPMENT - 4.2%
Canon, Inc. 1,439,000 25,260
Compaq Computer Corp. (a) 1,701,700 54,880
Dell Computer Corp. 41,200 1,087
Diebold, Inc. 701,500 29,901
EMC Corp. 260,000 3,510
Exide Electronics Group, Inc. (a) 65,000 1,316
Fujitsu Ltd. (a) 3,255,000 37,323
International Business Machines Corp. 1,761,700 103,500
Komag, Inc. (a) 440,000 8,140
Micom Communication Corp. 292,400 3,290
Miltope Group, Inc. (a) 118,700 312
NEC Corp. 865,000 10,708
Par Technology Corp. 27,600 183
Silicon Graphics, Inc. (a) 741,300 16,401
Symbol Technologies, Inc. (a) 820,000 20,500
Tech Data Corp. (a) 115,100 1,899
318,210
ELECTRONIC INSTRUMENTS - 0.8%
Applied Materials, Inc. (a) 119,400 5,103
Helix Technology Corp. 82,000 2,071
KLA Instruments Corp. (a) 261,500 9,806
Silicon Valley Group, Inc. (a) 235,000 2,717
Tektronix, Inc. 616,100 17,405
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - CONTINUED
Teradyne, Inc. (a) 355,000 $ 9,408
Varian Associates, Inc. 409,000 14,520
61,030
ELECTRONICS - 8.1%
AMP, Inc. 90,000 6,230
ARC International Corp. (a) 414,200 1,448
Advanced Micro Devices, Inc. (a) 569,300 14,160
Altera Corp. 75,000 2,119
Analog Devices, Inc. (a) 621,000 17,854
Atmel Corp. (a) 399,400 9,486
Cypress Semiconductor Corp. 205,700 3,343
DH Technology, Inc. (a) 58,300 1,181
Dovatron International, Inc. (a) 162,200 3,244
Electroglas, Inc. (a) 132,500 4,555
Hitachi Ltd. 4,030,000 42,120
Integrated Device Technology, Inc. (a) 246,200 6,093
Intel Corp. 2,230,200 130,467
International Rectifier Corp. (a) 865,900 12,989
Kent Electronics Corp. 15,000 458
LSI Logic Corp. (a) 1,220,500 30,513
Linear Technology Corp. 598,200 26,321
Maxim Integrated Products, Inc. (a) 317,900 16,531
Microchip Technology, Inc. (a) 70,800 2,496
Micron Technology, Inc. 1,515,500 52,285
Motorola, Inc. 550,000 24,475
National Semiconductor Corp. (a) 1,716,800 29,615
Photronics, Inc. (a) 102,700 1,900
Pioneer-Standard Electronics, Inc. 42,900 1,073
Sanmina Corp. (a) 374,200 6,455
Shindengen Electric Co. Ltd. 1,867,000 21,976
Tabai Espec Corp. 414,000 7,352
Texas Instruments, Inc. 1,403,600 111,586
Toshiba Corp. 2,300,000 18,857
VLSI Technology, Inc. (a) 670,100 9,172
616,354
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
PHOTOGRAPHIC EQUIPMENT - 0.0%
Eastman Kodak Co. 17,500 $ 842
TOTAL TECHNOLOGY 1,435,618
TRANSPORTATION - 3.5%
AIR TRANSPORTATION - 0.1%
AMR Corp. (a) 92,300 5,480
Atlantic Southeast Airlines, Inc. 54,300 1,317
Northwest Airlines Corp. Class A (a) 127,300 1,830
SkyWest, Inc. 30,000 776
9,403
RAILROADS - 1.7%
CSX Corp. 524,000 39,562
Canadian Pacific Ltd. Ord. 2,000,000 29,460
Illinois Central Corp., Series A 168,600 5,585
Santa Fe Pacific Corp. 1,193,200 24,908
Southern Pacific Rail Corp. (a) 915,800 17,973
Wisconsin Central Transportation Corp. (a) 108,300 7,012
124,500
SHIPPING - 0.2%
Mitsui OSK Lines 3,970,000 16,234
TRUCKING & FREIGHT - 1.5%
Arnold Industries, Inc. (a) 75,800 1,498
Consolidated Freightways, Inc. (a) 1,022,900 24,294
Expeditors International of Washington, Inc. 75,200 1,297
Federal Express Corp. (a) 724,500 54,066
Harper Group (f) 1,167,600 16,930
Landstar System, Inc. 373,900 11,030
Trimac Ltd. 107,100 1,103
XTRA Corp. 124,400 6,002
116,220
TOTAL TRANSPORTATION 266,357
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - 3.3%
CELLULAR - 1.0%
Airtouch Communications 1,832,800 $ 43,300
BCE Mobile Communications, Inc. 186,700 4,842
Rogers Cantel Mobile Communications, Inc.
Class B (non-vtg.) (a) 258,500 6,307
Vanguard Cellular Systems, Inc. Class A 200,900 6,630
Vodafone Group PLC (a) 1,980,000 14,965
76,044
GAS - 0.2%
Nova Corp. 200,000 1,554
Southern Union Co. 27,002 476
Williams Companies, Inc. 400,000 11,450
13,480
TELEPHONE SERVICES - 2.1%
ALC Communications Corp. (a) 745,600 22,926
Ameritech Corp. 736,400 28,167
BCE, Inc. 80,000 2,603
BellSouth Corp. 637,400 39,359
Incomnet, Inc. 190,000 1,710
LCI International, Inc. (a) 100,800 3,226
Rochester Telephone Corp. 50,700 1,147
Southwestern Bell Corp. 975,000 42,413
Sprint Corp. 450,000 15,694
157,245
TOTAL UTILITIES 246,769
TOTAL COMMON STOCKS
(Cost $6,413,046) 6,457,909
PREFERRED STOCKS - 0.5%
CONVERTIBLE PREFERRED STOCKS - 0.1%
CONSTRUCTION & REAL ESTATE - 0.1%
REAL ESTATE - 0.1%
Rouse Co., Series A 101 5,145
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
HEALTH - 0.0%
MEDICAL EQUIPMENT & SUPPLIES - 0.0%
U.S. Surgical Corp. $2.20 (h) 181 $ 4,380
TOTAL CONVERTIBLE PREFERRED STOCKS 9,525
NONCONVERTIBLE PREFERRED STOCKS - 0.4%
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
Nokia 140,900 11,586
UTILITIES - 0.2%
TELEPHONE SERVICES - 0.2%
SIP (Societa Ital Per L'Eser) Spa Di Risp N/C Ord. 3,000,000 6,188
Stet (Societa Finanziaria Telefonica) Spa (a) 4,250,000 11,242
17,430
TOTAL NONCONVERTIBLE PREFERRED STOCKS 29,016
TOTAL PREFERRED STOCKS (Cost $31,789) 38,541
CORPORATE BONDS - 0.9%
MOODY'S RATINGS (D) PRINCIPAL
AMOUNT (C) (000S)
CONVERTIBLE BONDS - 0.7%
DURABLES - 0.3%
TEXTILES & APPAREL - 0.3%
Unifi, Inc. 6%, 3/15/02 Baa1 $ 18,835 18,764
RETAIL & WHOLESALE - 0.2%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.2%
Fabri-Centers of America, Inc.
6 1/4%, 3/1/02 B2 18,150 13,976
Intertan, Inc. 9%, 8/30/00 - CAD 5,270 3,924
17,900
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1)
AMOUNT (C) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 0.2%
COMMUNICATIONS EQUIPMENT - 0.2%
General Instrument Corp. 5%, 6/15/00 B1 $ 13,300 $ 17,622
COMPUTER SERVICES & SOFTWARE - 0.0%
Sierra On-Line, Inc. 6 1/2%, 4/1/01 - 1,790 1,477
TOTAL TECHNOLOGY 19,099
TOTAL CONVERTIBLE BONDS 55,763
NONCONVERTIBLE BONDS - 0.2%
MEDIA & LEISURE - 0.0%
BROADCASTING - 0.0%
Time Warner, Inc. 11%, 8/15/02 (e) Ba1 3,300 3,044
RETAIL & WHOLESALE - 0.2%
GROCERY STORES - 0.2%
Rykoff-Sexton, Inc. 8 7/8%, 11/1/03 Ba2 12,000 11,040
TOTAL NONCONVERTIBLE BONDS 14,084
TOTAL CORPORATE BONDS
(Cost $72,831) 69,847
U.S. TREASURY OBLIGATION - 4.0%
U.S. Treasury Bill, yield at date of purchase
3.79%, 7/21/94 (Cost $306,847) 307,489 306,892
SUPRANATIONAL OBLIGATION- 0.2%
International Bank for Reconstruction &
Development euro 5 1/4%, 3/20/02
(Cost $12,132) Aaa JPY 1,200,000 12,761
PURCHASED BANK DEBT - 0.1%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (C) (000S) (000S)
Macy (R.H.) & Co., Inc. (b):
49 Store loan $ 2,838 $ 2,639
LBO Swap Claim 385 390
10 Store loan 890 800
10 Store Swap Claim 304 274
Working Capital loan 3,435 3,655
TOTAL PURCHASED BANK DEBT
(Cost $5,548) $ 7,758
REPURCHASE AGREEMENTS - 9.2%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements,
(U.S. Treasury obligations), in a joint
trading account at 4.29% dated
6/30/94 due 7/1/94 $ 694,000 693,917
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $7,536,110) $ 7,587,625
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE APPRECIATION/ (DEPRECIATION)
CONTRACTS TO BUY
412,936 JPY 8/10/94 $ 4,203 $ $3
(Payable amount $4,200)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.1%
CONTRACTS TO SELL
84,928 DEM 8/16/94 53,476 (2,669)
38,958,266 JPY 8/10/94 to 11/18/94 397,692 (22,398)
TOTAL CONTRACTS TO SELL
(Receivable amount $426,101) $ 451,168 (25,067)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 5.9%
$ (25,064)
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
DEM - German Deutsche mark
JPY - Japanese yen
LEGEND
1. Non-income producing
2. Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
3. Principal amount is stated in United States dollars unless otherwise
noted.
4. Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
5. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
6. Affiliated company (see Note 6 of Notes to Financial Statements).
7. 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
Grand Palais
Enterprises, Inc. 6/11/93 $ 6,598,000
8. 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 $12,510,000 or 0.2% of net
assets.
9. Market value reflects the payment of the first installment. Additional
equal payments of $511,000 are payable in January and October of 1995.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 87.2%
Japan 5.2
Canada 4.0
United Kingdom 1.0
Others (individually less than 1%) 2.6
TOTAL 100.0%
INCOME TAX INFORMATION
At June 30,1994, the aggregate cost of investment securities for income tax
purposes was $7,537,869,000. Net unrealized appreci-
ation aggregated $49,756,000, of which $373,455,000 related to appreciated
investment securities and $323,699,000 related to depreciated investment
securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) JUNE 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 7,587,625
agreements of $693,917) (cost $7,536,110)
(Notes 1 and 2) - See accompanying schedule
Cash 1
Receivable for investments sold 490,017
Unrealized appreciation on foreign currency contracts 3
(Note 2)
Receivable for fund shares sold 34,137
Dividends receivable 9,463
Interest receivable 1,465
Other receivables 221
TOTAL ASSETS 8,122,932
LIABILITIES
Payable for investments purchased $ 338,218
Unrealized depreciation on foreign currency contracts 25,067
(Note 2)
Payable for fund shares redeemed 15,285
Accrued management fee 4,517
Other payables and accrued expenses 4,261
Collateral on securities loaned, at value (Note 5) 145,103
TOTAL LIABILITIES 532,451
NET ASSETS $ 7,590,481
Net Assets consist of (Note 1):
Paid in capital $ 7,636,276
Undistributed net investment income 22,490
Accumulated undistributed net realized gain (loss) on (94,835)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 26,550
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 260,433 shares outstanding $ 7,590,481
NET ASSET VALUE and redemption price per share $29.15
($7,590,481 (divided by) 260,433 shares)
Maximum offering price per share (100/97.00 of $29.15) $30.05
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 38,183
Dividends (including $386 received from affiliated
issuers) (Note 6)
Interest (including security lending fees of $467) (Note 5) 21,261
TOTAL INCOME 59,444
EXPENSES
Management fee (Note 4) 22,285
Basic fee
Performance adjustment 2,663
Transfer agent fees (Note 4) 10,957
Accounting and security lending fees (Note 4) 431
Non-interested trustees' compensation 21
Custodian fees and expenses 408
Registration fees 972
Audit 54
Legal 32
Miscellaneous 34
Total expenses before reductions 37,857
Expense reductions (Note 7) (1,077) 36,780
NET INVESTMENT INCOME 22,664
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1, 2 AND 3)
Net realized gain (loss) on:
Investment securities (including realized gain of $2,581 (75,944)
on sales of investment in affiliated issuers)
Foreign currency transactions (1,741) (77,685)
Change in net unrealized appreciation (depreciation) on:
Investment securities (320,240)
Assets and liabilities in foreign currencies (25,066) (345,306)
NET GAIN (LOSS) (422,991)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ (400,327)
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1994 1993
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 22,664 $ 19,071
Net investment income
Net realized gain (loss) (77,685) 480,613
Change in net unrealized appreciation (depreciation) (345,306) 180,358
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (400,327) 680,042
FROM OPERATIONS
Distributions to shareholders: - (19,956)
From net investment income
In excess of net investment income - (12,201)
From net realized gain (46,898) (387,128)
TOTAL DISTRIBUTIONS (46,898) (419,285)
Share transactions 3,241,253 5,259,147
Net proceeds from sales of shares
Reinvestment of distributions 45,584 410,355
Cost of shares redeemed (1,456,691) (1,709,099)
Net increase (decrease) in net assets resulting from 1,830,146 3,960,403
share
transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,382,921 4,221,160
NET ASSETS
Beginning of period 6,207,560 1,986,400
End of period (including under (over) distribution of net $ 7,590,481 $ 6,207,560
investment income of $22,490 and ($174),
respectively)
OTHER INFORMATION
Shares
Sold 105,156 170,736
Issued in reinvestment of distributions 1,464 13,609
Redeemed (47,473) (55,382)
Net increase (decrease) 59,147 128,963
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
JUNE 30, 1994
(UNAUDITED) 1993 1992D 1991 1990 1989
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 30.84 $ 27.47 $ 25.60 $ 17.35 $ 16.78 $ 12.65
beginning of period
Income from
Investment
Operations
Net investment .09 .14 .32E .22 .51 .63F
income
Net realized and un- (1.56) 5.66 3.67 9.20 .15 4.82
realized gain (loss)
Total from (1.47) 5.80 3.99 9.42 .66 5.45
investment
operations
Less Distributions
From net investment - (.11) (.20) (.11) (.09) (.25)
income
In excess of net - (.07) - - - -
investment income
From net realized (.22) (2.25) (1.92) (1.06) - (1.07)
gain
Total distributions (.22) (2.43) (2.12) (1.17) (.09) (1.32)
Net asset value, end of $ 29.15 $ 30.84 $ 27.47 $ 25.60 $ 17.35 $ 16.78
period
TOTAL RETURN B, C (4.81%) 21.43% 15.89% 54.92 3.94 43.15
% % %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 7,590 $ 6,208 $ 1,986 $ 1,000 $ 332 $ 298
period (in millions)
Ratio of expenses to 1.03%A 1.06% .87% .89 1.06 .95
average net assets % % %
Ratio of expenses to 1.06%A 1.08% .87% .89 1.06 .95
average net assets % % %
before expense
reductions
Ratio of net investment .64%A .46% 1.19% 1.01 3.02 4.01
income to average % % %
net assets
Portfolio turnover rate 275%A 255% 297% 217 320 266
% % %
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE 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 PERIOD SHOWN (SEE NOTE 7 OF NOTES TO FINANCIAL
STATEMENTS).
D AS OF JANUARY 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED TO
$.20 PER SHARE.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1994 (Unaudited)
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Contrafund (the fund) 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 and is
authorized to issue an unlimited number of shares. 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 (including restricted 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 maturing within sixty days
are valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Effective January 1, 1994, the fund adopted Statement of Position (SOP)
93-4: Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. Further, as permitted under the SOP, the effects of
changes in foreign currency exchange rates on investments in securities are
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but are included with the net
realized and unrealized gain or loss on investments.
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 all of its taxable income for its fiscal
year. 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,
except certain dividends from foreign securities where the ex-dividend date
may have
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
passed, are recorded as soon as the fund is informed of the ex-dividend
date. Interest income, which includes accretion of original issue discount,
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 are primarily due to differing treatments for
foreign currency transactions, market discount, partnerships, non-taxable
dividends and losses deferred due to wash sales and excise tax regulations.
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.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. These contracts involve market risk in excess of the
amount reflected in the fund's Statement of Assets and Liabilities. The
face or contract amount in U.S. dollars reflects the total exposure the
fund has in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain(loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult. At the
end of the period, restricted securities (excluding 144A issues) amounted
to $6,598,000 or 0.1% of net assets.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $10,426,359,000 and $8,504,845,000,
respectively.
4. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic 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 ranging from
.30% to .52% and is based on the monthly average net assets of all the
mutual funds advised by FMR. The annual individual fund fee rate is .30%.
The basic fee is subject to a performance adjustment (up to a maximum of +
or - .20%) based on the fund's investment performance as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annualized rate of .70% of average net
assets after the performance adjustment.
The Board of Trustees previously approved a group fee rate schedule with
rates ranging from .2850% to .5200%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this group fee rate schedule as it resulted
in the same or a lower management fee.
In July 1994, the Board of Trustees approved a new group fee rate schedule
with rates ranging from .27% to .52%. Effective August 1, 1994, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a further reduction in the management fee.
SALES LOAD. For the period, Fidelity Distributors Corporation, an affiliate
of FMR and the general distributor of the fund, received sales charges of
$13,943,000 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the transfer, dividend disbursing and share
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
holder servicing agent. FSC receives fees based on the type, size, number
of accounts and the number of transactions made by shareholders. FSC pays
for typesetting, printing and mailing of all shareholder reports, except
proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $5,132,000 for the period.
5. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, the value of the
securities loaned and the value of collateral amounted to $140,252,000 and
$145,103,000, respectively.
6. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
DOLLAR AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Broadcasting Partners, Inc.
Class A (a) $ 74 $ 2,956 $ - $ 3,169
Cambrex Corp. 814 - - 8,619
Cyrk, Inc. (a) 994 - - 12,390
Donnkenny, Inc. (a) 7,738 6,093 - 9,288
EZ Communications, Inc. (a) - 384 - 5,288
Earth Technology Corp. (USA) 1,054 617 - 2,368
Farah, Inc. (a) 1,569 3,156 - 6,981
Finish Line, Inc. Class A 106 - - 1,575
Grad & Walker Energy Corp. - - - 6,438
Grand Palais Enterprises, Inc. (a) - - - 6,598
Ground Round Restaurants, Inc. (a) 190 - - 4,699
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Harper Group $ 4,782 $ - $ - $ 16,930
Haverty Furniture Companies, Inc. 830 1,645 77 5,121
Heritage Media Corp. Class A (a) 1,638 348 - 19,720
Imo Industries, Inc. 1,955 - - 9,884
Inter-Tel, Inc. (a) 324 112 - 7,158
Jacor Communications, Inc.
Class A (a) 390 120 - 11,879
North American Biologicals, Inc. (a) - - - 5,018
OHM Corp. 3,811 336 - 16,544
Offshore Pipelines, Inc. (a) 5,050 1,545 - 15,488
Porta Systems Corp. (a) 384 271 - 3,382
Quorum Health Group, Inc. 731 - - 8,176
Rhodes, Inc. (a) 7,215 2,911 - 10,099
Safeskin Corp. (a) 5,036 - - 11,316
Saga Communications, Inc.
Class A (a) 1,087 53 - 4,955
Schuler Homes, Inc. (a) - 412 - 18,002
Smith International, Inc. (a) 12,316 910 - 41,974
State of The Art, Inc. (a) 2,085 - - 4,409
Sturm Ruger & Co., Inc 8,633 153 291 28,382
Tech-Sym Corp. (a) 735 - - 6,736
Telco Systems, Inc. (a) 867 859 - 5,598
Thor Industries, Inc. 3,800 893 18 11,238
United Waste Systems, Inc. 2,136 - - 12,945
VMark Software, Inc. (a) 1,956 2,299 - 6,905
Warnaco Group, Inc. Class A (a) 3,743 - - 26,919
TOTALS $ 82,043 $ 26,073 $ 386 $ 376,191
(a) Non-income Producing
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$1,077,000 under this arrangement.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
TO WRITE FIDELITY
Please locate the address that is closest to you. We'll give your
correspondence immediate attention and send you written confirmation upon
completion of your request. Please send ALL correspondence about retirement
accounts to Dallas.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
Additional Payments
P.O. Box 2656
Boston, MA 02293-0656
Fidelity Investments
Additional Payments
P.O. Box 620024
Dallas, TX 75262-0024
Fidelity Investments
Additional Payments
P.O. Box 31455
Salt Lake City, UT 84131-0455
OVERNIGHT EXPRESS
Fidelity Investments
Additional Payments
World Trade Center
164 Northern Avenue
Boston, MA 02210
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02103-0878
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0001
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 620024
Dallas, TX 75262-0024
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Will Danoff, Vice President
William J. Hayes, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Fidelity Fifty
Growth Company Fund
Low-Priced Stock Fund
Magellan(Registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Growth Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
