FIDELITY
(registered trademark)
CONTRAFUND
ANNUAL REPORT
DECEMBER 31, 1994
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 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.
REPORT OF INDEPENDENT 44 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMA-
TION 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. FOR MORE INFORMATION ON ANY
FIDELITY FUND,
INCLUDING CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS.
READ IT
CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February continued into the
fourth quarter of 1994. The Board raised the federal funds rate - the rate
banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. A sixth increase in November
lifted the rate to 5.50%. The Fed rate hikes were intended to forestall
inflation that could result from an improving U.S. economy, and they led to
below-average returns for many stocks and negative returns for many bond
investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different stock funds or
in other investment categories, such 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. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and it is important to remember
that money market funds are not insured by any agency of the U.S.
government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage 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 DECEMBER 31, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Contrafund -1.12% 124.05% 448.27%
Contrafund (incl. 3% sales charge) -4.09% 117.33% 431.82%
S&P 500(registered trademark) 1.32% 51.77% 283.58%
Average Growth Fund -2.17% 53.00% 239.11%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one, five, or 10 years. For example, if
you 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 Composite Index of 500 Stocks - a common proxy for
the U.S. stock market. You can also compare them to the average growth
fund, which currently reflects the performance of 564 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 DECEMBER 31, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Contrafund -1.12% 17.51% 18.55%
Contrafund (incl. 3% sales charge) -4.09% 16.79% 18.19%
S&P 500(registered trademark) 1.32% 8.70% 14.39%
Average Growth Fund -2.17% 8.59% 12.55%
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) Standard & Poor's 50
12/31/84 9700.00 10000.00
01/31/85 10623.33 10779.00
02/28/85 10692.83 10911.58
03/31/85 10782.19 10919.22
04/30/85 10663.05 10909.39
05/31/85 10871.54 11539.96
06/30/85 10941.04 11721.13
07/31/85 11060.18 11703.55
08/31/85 11268.68 11604.07
09/30/85 10702.76 11240.86
10/31/85 11278.61 11760.19
11/30/85 11874.31 12566.94
12/31/85 12325.23 13175.18
01/31/86 12436.72 13248.96
02/28/86 13659.35 14239.98
03/31/86 14268.64 15034.57
04/30/86 14002.77 14864.68
05/31/86 14357.27 15655.49
06/30/86 14290.80 15920.06
07/31/86 13238.38 15030.13
08/31/86 14102.47 16145.37
09/30/86 13260.53 14810.15
10/31/86 14146.78 15664.69
11/30/86 14146.78 16045.34
12/31/86 13966.64 15636.19
01/31/87 15983.09 17742.38
02/28/87 16960.31 18443.20
03/31/87 17241.49 18976.21
04/30/87 17279.83 18807.33
05/31/87 17433.20 18970.95
06/30/87 18072.25 19928.98
07/31/87 18954.13 20939.38
08/31/87 19644.30 21720.42
09/30/87 19248.10 21244.74
10/31/87 13688.39 16668.63
11/30/87 12934.31 15295.13
12/31/87 13701.17 16459.09
01/31/88 14583.05 17152.02
02/29/88 15247.66 17951.30
03/31/88 15273.22 17396.61
04/30/88 15579.97 17589.71
05/31/88 15362.69 17742.74
06/30/88 16103.98 18557.13
07/31/88 16219.01 18486.61
08/31/88 15861.15 17858.07
09/30/88 16512.97 18618.82
10/31/88 16947.53 19136.43
11/30/88 16819.72 18862.78
12/31/88 16581.46 19192.87
01/31/89 17682.52 20597.79
02/28/89 17577.65 20084.91
03/31/89 18508.31 20552.89
04/30/89 19701.13 21619.58
05/31/89 20723.54 22495.17
06/30/89 20592.46 22366.95
07/31/89 22480.00 24386.69
08/31/89 23122.28 24864.67
09/30/89 23567.95 24762.72
10/31/89 22860.13 24188.23
11/30/89 23384.44 24681.66
12/31/89 23736.67 25274.02
01/31/90 22477.69 23578.14
02/28/90 22944.50 23882.30
03/31/90 23439.61 24515.18
04/30/90 23199.13 23902.30
05/31/90 25391.73 26232.77
06/30/90 25717.08 26054.39
07/31/90 25236.13 25971.01
08/31/90 23269.86 23623.23
09/30/90 22293.80 22472.78
10/31/90 22406.96 22376.15
11/30/90 23736.67 23821.65
12/31/90 24670.95 24486.27
01/31/91 27074.06 25553.87
02/28/91 29121.68 27380.98
03/31/91 30828.03 28043.60
04/30/91 30998.66 28110.90
05/31/91 32975.18 29325.29
06/30/91 31126.64 27982.19
07/31/91 33330.67 29286.16
08/31/91 35008.58 29980.25
09/30/91 35108.12 29479.58
10/31/91 36117.71 29874.60
11/30/91 34212.29 28670.66
12/31/91 38219.88 31950.58
01/31/92 39309.74 31356.30
02/29/92 40585.38 31763.93
03/31/92 39483.93 31144.53
04/30/92 39912.27 32060.18
05/31/92 40340.62 32217.28
06/30/92 39361.55 31737.24
07/31/92 40355.91 33035.29
08/31/92 39606.31 32358.07
09/30/92 40279.42 32739.89
10/31/92 41182.00 32854.48
11/30/92 43170.73 33974.82
12/31/92 44294.50 34392.71
01/31/93 45697.34 34681.61
02/28/93 45998.83 35153.28
03/31/93 48197.00 35895.02
04/30/93 48522.65 35026.36
05/31/93 50444.02 35965.06
06/30/93 50460.30 36069.36
07/31/93 51013.92 35925.08
08/31/93 53488.90 37286.64
09/30/93 53602.88 36999.54
10/31/93 54075.08 37765.43
11/30/93 52039.73 37406.66
12/31/93 53785.15 37859.28
01/31/94 55476.83 39146.49
02/28/94 55078.79 38085.62
03/31/94 52900.93 36425.09
04/30/94 53550.78 36891.33
05/31/94 53252.20 37496.35
06/30/94 51197.28 36577.69
07/31/94 52233.52 37777.44
08/31/94 54411.38 39326.31
09/30/94 53691.28 38362.82
10/31/94 55219.30 39225.98
11/30/94 52707.73 37797.37
12/30/94 53181.94 38357.90
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity
Contrafund on December 31, 1984, and paid a 3% sales charge. As the chart
shows, by December 31, 1994, the value of your investment would have grown
to $53,182 - a 431.82% 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 $38,358 - a
283.58% 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
MARKET RECAP
Pressures from rising interest
rates contributed to below-average
returns in the U.S. stock market
during the 12 months ended
December 31, 1994. The
Standard and Poor's Composite
Index of 500 stocks finished the
12-month period with a total
return of 1.32% - well below its
historical annual average. After
steady gains in January, stocks
stumbled from February through
June 1994. During that time, the
Federal Reserve Board raised
short-term interest rates four
times in an effort to curb
possible future inflation triggered
by a strengthening economy.
During the second half of 1994,
there was a tug-of-war in the
stock market, fueled by two
competing sentiments. On one
side, there was concern that
rising interest rates would hurt
corporate earnings; the market
dropped in November when the
Fed raised rates again. On the
other hand, strengthening
corporate earnings and a flurry
of merger and acquisition
activity helped the market rally
from July through October and in
December as well. Returns in
overseas market were mixed. The
Morgan Stanley EAFE (Europe,
Australia, Far East) index
returned 7.78% for the 12 months
ended December 31. The
Morgan Stanley Emerging
Markets Free index was down
7.32% during the same period, on
the heels of Mexico's devaluation
of the peso and market corrections
in Asian emerging markets.
An interview with Will Danoff,
Portfolio Manager of Fidelity Contrafund
Q. WILL, HOW DID THE FUND PERFORM?
A. Somewhat better than most of its competitors, but not as well as I
would have liked. For the year ended December 31, 1994, the fund had a
total return of -1.12%. It modestly beat the average growth fund, which
returned -2.17% over the same period, according to Lipper Analytical
Services.
Q. IT SOUNDS LIKE THE PAST YEAR WAS A DIFFICULT ONE FOR MOST GROWTH FUNDS .
. .
A. It was. In light of this, I was glad that the fund sustained only a
modest loss since some funds lost as much as 20% of their value. The fund
did better than some other funds because it was heavily invested in certain
sectors that performed better than the market, such as technology and
pharmaceutical drugs. It also avoided other sectors that did poorly, such
as consumer nondurables. That said, as the fund's manager and a fellow
shareholder, I was unhappy with the fund's negative return.
Q. WHY WAS THE MARKET SO TOUGH?
A. Mostly because the U.S. economy grew much faster at the beginning of the
year than anyone expected. This growth boosted corporate profits but also
forced the Federal Reserve to raise interest rates, starting in February
1994. The Fed raised rates to forestall inflation - which often accompanies
strong economic growth. The rate hike caught the bond market by surprise,
causing bond prices to decline sharply. The stock market also suffered in
this rising interest rate environment as investors shifted their
investments out of stocks and into other instruments, such as bank CDs,
which offered competitive yields with less risk than stocks and stock
funds. By the end of 1994, nearly two-thirds of all stocks on the New York
Stock Exchange had declined more than 20% from their highs in the previous
18 months.
Q. LET'S GO BACK TO THE TECHNOLOGY SECTOR. AT THE END OF THE PERIOD,
TECHNOLOGY STOCKS MADE UP ABOUT 29% OF THE FUND'S HOLDINGS - UP FROM ABOUT
11% AT THE END OF 1993. WHY DID THEY LOOK SO GOOD?
A. Over the past year, technology stocks performed better than the market.
Their growth was fueled by outstanding sales of personal computers - up
25% in 1994 - and workstations. In addition, these robust hardware
purchases boosted sales of related software and components, such as
semiconductors. Along with this, new applications, such as networking and
multimedia, made purchasing a new computer more attractive to business and
individual users. I expect the growth in this sector to continue throughout
1995 as new products are introduced and businesses continue to look for
ways to improve productivity.
Q. WHAT ARE A FEW OF THE TECHNOLOGY COMPANIES THAT STOOD OUT?
A. The fund's largest holding over much of the period was IBM. New
management did an excellent job cutting costs, reducing working capital and
selling underperforming divisions, all of which helped to produce much
higher earnings than expected. Two other computer manufacturers, Compaq and
Hewlett-Packard, also were strong performers. Compaq is the low-cost
producer in the PC industry and is gaining market share. Hewlett-Packard
offers a more diversified product line, but is largely known for its
desktop printers, which dominate the market.
Q. YOU SAID EARLIER THAT PHARMACEUTICALS ALSO LOOKED GOOD. WHY?
A. In 1993 and for about half of 1994, pharmaceutical stocks lagged the
market because investors feared that proposed health care reform would hurt
the industry. However, by late spring in 1994, it became clear that the
Clinton plan would not pass. Then in June, Swiss giant Hoffmann LaRoche
purchased Syntex, a poorly performing but inexpensive drug manufacturer.
This told me that pharmaceuticals had bottomed out and that people in the
industry saw good value in the sector. So, I bought two industry leaders,
Pfizer and Schering-Plough, which were both strong performers for the rest
of the period. Both pharmaceutical companies did better than their
industry peers because they had excellent new products, strong balance
sheets and tight controls over costs.
Q. OVER THE PERIOD, DID YOU CHOOSE SOME INVESTMENTS THAT DIDN'T PERFORM AS
YOU WOULD HAVE LIKED?
A. Yes. I wish I'd invested less in energy stocks. While natural gas demand
was reasonably good over the period, supply grew faster and prices fell,
hurting most of the fund's investments in that sector. I sold many of the
fund's energy holdings, but held on to companies like Smith International,
Camco and Renaissance Energy, all of which I think will rebound when gas
prices stabilize.
Q. WHAT DO YOU THINK WE CAN EXPECT FROM THE STOCK MARKET GOING FORWARD?
A. Looking ahead, I'm bullish. I think much of the market's bad news is
already reflected in stock and bond prices. And even though stock prices
have fallen, corporate earnings have increased. So, for companies that can
continue to grow this year and into 1996, the outlook is bright, arguably
brighter than a year ago. In addition, the Fed has already taken preemptive
action to ensure that the economy does not grow too fast and that inflation
stays under control, and, I think, these measures will probably work over
time. As economic growth slows and inflation remains subdued, I expect
long-term interest rates to ultimately fall, which should help stock
prices.
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 December 31,
1994, more than $8 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 THE GROWTH OF THE
CELLULAR PHONE INDUSTRY:
"Right now, cellular phone
usage is surging. Subscriber
growth exceeds 40% in the
United States and is even
stronger overseas. Along with
this, cellular penetration -
the percentage of cellular
phone users in a given
population - is still only 8% in
the United States, versus
14% in high-penetration
areas, such as Scandinavia.
This means that the U.S.
market can continue to grow
rapidly for the rest of the
decade.
"I'm investing in this sector
through three industry leaders
- - Airtouch, Motorola, and
Nokia. Airtouch, one of the
largest cellular service
providers in the United States,
turned in a strong performance
this year. It also did well in
Germany, Japan and several
other foreign countries.
Motorola and the Finnish
company Nokia, the two leading
global producers of cellular
phones and the equipment
needed to provide cellular
service, also had outstanding
years."
(solid bullet)As of December 31, 1994,
the fund's cash position was
16.2%, compared to 19.1%
one year ago.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF DECEMBER 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
International Business Machines 2.3 1.4
Corp.
Motorola, Inc. 1.4 0.3
Philip Morris Companies, Inc. 1.4 0.0
Pfizer, Inc. 1.0 0.5
Hewlett-Packard Co. 1.0 0.0
Airtouch Communications 1.0 0.6
Compaq Computer Corp. 1.0 0.7
Amoco Corp. 0.9 0.9
Schering-Plough Corp. 0.9 0.4
Becton, Dickinson & Co. 0.8 0.2
TOP FIVE INDUSTRIES AS OF DECEMBER 31, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO
Technology 29.0 19.1
Health 10.0 6.9
Energy 6.3 9.7
Retail & Wholesale 6.1 6.0
Media & Leisure 5.9 4.8
ASSET ALLOCATION
AS OF DECEMBER 31, 1994* AS OF JUNE 30, 1994**
Row: 1, Col: 1, Value: 16.2
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 1.7
Row: 1, Col: 4, Value: 42.1
Row: 1, Col: 5, Value: 40.0
Row: 1, Col: 1, Value: 13.2
Row: 1, Col: 2, Value: 1.1
Row: 1, Col: 3, Value: 2.1
Row: 1, Col: 4, Value: 43.6
Row: 1, Col: 5, Value: 40.0
Stocks 83.1%
Bonds 0.7%
Other 0.0%
Short-term
Investments 16.2%
FOREIGN
INVESTMENTS 8.8%
Stocks 85.6%
Bonds 1.1%
Other 0.1%
Short-term
Investments 13.2%
FOREIGN
INVESTMENTS 12.8%
*
**
INVESTMENTS DECEMBER 31, 1994
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 82.9%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 1.2%
AEROSPACE & DEFENSE - 0.6%
McDonnell Douglas Corp. 180,000 $ 25,560
Special Devices, Inc. (a) 84,300 1,380
Sturm Ruger & Co., Inc. (b) 978,600 27,769
54,709
DEFENSE ELECTRONICS - 0.6%
Loral Corp. 845,000 32,004
Tracor, Inc. (a) 263,700 3,197
Trimble Navigation Ltd. (a) 507,500 8,374
Whittaker Corp. (a) 395,800 8,015
51,590
TOTAL AEROSPACE & DEFENSE 106,299
BASIC INDUSTRIES - 2.8%
CHEMICALS & PLASTICS - 1.2%
Airgas, Inc. (a) 46,900 996
Avery Dennison Corp. 25,000 888
Cambrex Corp. (b) 434,500 11,297
Eastman Chemical Co. 64,500 3,257
Furon Co. 145,000 3,190
GEON 317,800 8,700
Grasim Industries Ltd. (a) 370,000 8,695
Hanna (M.A.) Co. 973,800 23,128
Park Electrochemical Corp. 191,300 5,691
Praxair, Inc. 325,000 6,663
Sealed Air Corp. (a) 91,500 3,317
Union Carbide Corp. 475,000 13,953
Wellman, Inc. 384,700 10,868
100,643
IRON & STEEL - 0.1%
Armco, Inc. (a) 296,600 1,965
Mueller Industries, Inc. (a) 148,300 4,430
Nucor Corp. 45,000 2,498
8,893
METALS & MINING - 0.7%
Alcan Aluminium Ltd. 1,700,000 43,200
Aluminum Co. of America 192,000 16,632
Belden, Inc. 200,000 4,450
64,282
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - 0.8%
Caraustar Industries, Inc. 40,000 $ 890
Mead Corp. 50,000 2,431
Scott Paper Co. 920,000 63,595
Smurfit (Jefferson) Group PLC 300,000 1,747
68,663
TOTAL BASIC INDUSTRIES 242,481
CONGLOMERATES - 0.6%
Instrument Systems Corp. (a) 41,000 343
Tyco Laboratories, Inc. 737,108 35,013
United Technologies Corp. 265,000 16,662
52,018
CONSTRUCTION & REAL ESTATE - 0.5%
BUILDING MATERIALS - 0.1%
Hume Industries Malay BHD 2,057,000 9,183
Tecumseh Products Co. Class A 26,800 1,206
USG Corp. (a) 103,800 2,024
12,413
CONSTRUCTION - 0.4%
Blount, Inc. Class A 32,400 1,506
Oakwood Homes Corp. 681,500 16,612
Renong BHD 1,518,000 1,879
Schuler Homes, Inc. (a) 1,024,000 14,592
34,589
REAL ESTATE - 0.0%
Tan & Tan Development BHD 731,000 979
TOTAL CONSTRUCTION & REAL ESTATE 47,981
DURABLES - 2.3%
AUTOS, TIRES, & ACCESSORIES - 0.9%
Allen Group, Inc. (The) 688,300 16,434
Breed Technologies, Inc. 204,700 5,808
Chrysler Corp. 985,000 48,265
Danaher Corp. 25,000 1,306
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES - CONTINUED
Discount Auto Parts, Inc. (a) 700 $ 13
Echlin, Inc. 25,000 750
Volvo Aktiebolaget Class B 400,000 7,533
80,109
CONSUMER ELECTRONICS - 0.2%
Black & Decker Corp. 65,900 1,565
Harman International Industries, Inc. 20,000 740
Mycom BHD 740,000 1,211
Oyl Industries Ltd. 478,000 2,527
Toro Co. 335,600 9,649
15,692
HOME FURNISHINGS - 0.0%
Rhodes, Inc. (a) 318,100 3,976
TEXTILES & APPAREL - 1.2%
Chaus (Bernard), Inc. (a) 837,900 4,190
Converse, Inc. (a) 266,800 3,168
Fila Holding Spa sponsored ADR 191,100 3,774
Galey & Lord, Inc. (a) 209,300 3,009
NIKE, Inc. Class B 99,500 7,425
Nine West Group, Inc. (a) 606,500 17,209
Reebok International Ltd. 457,500 18,071
Unifi, Inc. 253,300 6,459
Vista Resources, Inc. (a) 156,700 3,193
Warnaco Group, Inc. Class A (a)(b) 2,337,300 40,319
106,817
TOTAL DURABLES 206,594
ENERGY - 6.3%
COAL - 0.0%
Ban Pu Coal (For. Reg.) 99,700 2,184
ENERGY SERVICES - 1.4%
BJ Services Co. (a) 31,000 522
Energy Service Co., Inc. (a) 1,555,000 19,049
Enterra Corp. (a) 10,000 190
Global Industries Ltd. (a) 186,200 4,259
Global Marine, Inc. (a) 1,145,700 4,153
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
ENERGY SERVICES - CONTINUED
Halliburton Co. 959,000 $ 31,767
Nabors Industries, Inc. (a) 680,700 4,425
Nowsco Well Service Ltd. 274,200 2,983
Offshore Pipelines, Inc. (a) 375,000 8,484
Pride Petroleum Services, Inc. (a) 30,000 150
Smith International, Inc. (a)(b) 2,503,800 31,298
Tidewater, Inc. 550,000 10,175
Tuboscope Vetco Corp. (a) 345,000 2,070
119,525
INDEPENDENT POWER - 0.2%
Thermo Electron Corp. (a) 421,200 18,901
OIL & GAS - 4.7%
Amerada Hess Corp. 262,200 11,963
Amoco Corp. 1,278,500 75,591
Anadarko Petroleum Corp. 88,100 3,392
British Petroleum PLC ADR 585,000 46,727
Camco International, Inc. (b) 1,751,200 33,054
Canadian Natural Resources Ltd. (a) 2,354,200 23,090
Canadian Natural Resources Ltd. (a)(d) 372,000 3,649
Diamond Shamrock R&M, Inc. 20,000 518
Grad & Walker Energy Corp. (a) 298,900 1,306
Inverness Petroleum Ltd. (a) 758,300 4,598
Jordan Petroleum Ltd. (a) 530,100 3,309
Mobil Corp. 290,000 24,433
Murphy Oil Corp. 908,200 38,599
Noble Affiliates, Inc. 51,000 1,262
Norsk Hydro AS ADR 300,000 11,738
Northstar Energy Corp. (a) 926,200 7,928
Petromet Resources Ltd. Ord. (a) 65,300 279
Petrobras PN 46,600,600 5,886
Phillips Petroleum Co. 665,800 21,805
Pogo Producing Co. 868,700 15,419
Renaissance Energy Ltd. (a) 985,000 19,059
Rio Alto Exploration Ltd. (a) 1,400,000 5,243
Rio Alto Exploration Ltd. (a)(d) 237,000 888
Sceptre Resources Ltd. (a) 79,600 518
Summit Resources Ltd. 109,800 676
Texaco, Inc. 140,000 8,383
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Tide West Oil Co. (a) 68,000 $ 689
Total SA:
Class B 61,310 3,563
sponsored ADR 616,889 18,197
Triton Energy Corp. (a) 185,000 6,290
Unocal Corp. 512,787 13,972
412,024
TOTAL ENERGY 552,634
FINANCE - 4.3%
BANKS - 1.2%
Bangkok Bank 1,141,100 12,181
Bank of Boston Corp. 633,530 16,393
Bank of Asia Public Co. Ltd. (For. Reg.) 6,642,400 16,007
Bank of New York Co., Inc. 311,500 9,034
Bank South Corp. 412,400 7,320
Chemical Banking Corp. 275,000 9,866
Commerce Asset Holding BHD 821,000 3,312
First Bank System, Inc. 187,500 6,234
Krung Thai Bank (For. Reg.) 3,004,000 9,932
Thai Farmers Bank 1,527,800 12,414
102,693
CREDIT & OTHER FINANCE - 0.7%
Beneficial Corp. 254,000 9,906
Dean Witter Discover & Co. 300,000 10,163
Green Tree Acceptance, Inc. 596,200 18,110
Household International, Inc. 350,000 12,994
Hong Leong Finance Ltd. (For. Reg.) 650,000 2,229
Industrial Finance (For. Reg.) 3,694,333 7,872
61,274
FEDERAL SPONSORED CREDIT - 0.5%
Federal Home Loan Mortgage Corporation 270,000 13,635
Federal National Mortgage Association 430,000 31,336
44,971
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - 1.2%
Allstate Corp. 450,000 $ 10,631
American International Group, Inc. 470,000 46,060
CIGNA Corp. 14,900 942
General Re Corp. 30,000 3,713
HealthCare Compare Corp. 55,000 1,877
NAC Re Corp. 15,900 533
Transatlantic Holdings, Inc. 31,600 1,766
Travelers, Inc. (The) 1,250,000 40,624
106,146
SAVINGS & LOANS - 0.4%
Astoria Financial Corp. (a) 84,000 2,205
Boston Bancorp 5,900 172
Brooklyn Bancorp, Inc. (a) 364,000 11,011
GP Financial Corp. 1,145,000 23,615
Long Island Bancorp, Inc. 80,000 1,170
38,173
SECURITIES INDUSTRY - 0.3%
Bear Stearns Companies, Inc. 1,360,900 20,924
Lehman Brothers Holdings, Inc. 359,400 5,301
United Asset Management Corp. 74,300 2,740
28,965
TOTAL FINANCE 382,222
HEALTH - 9.9%
DRUGS & PHARMACEUTICALS - 3.7%
Allergan, Inc. 589,000 16,638
American Home Products Corp. 192,000 12,048
Amgen, Inc. (a) 500,000 29,500
Barr Laboratories, Inc. (a) 26,700 674
Bio-Rad Laboratories, Inc. Class A (a)(b) 428,200 11,883
Biogen, Inc. (a) 460,000 19,205
Bristol-Myers Squibb Co. 196,900 11,396
Centocor, Inc. (a) 25,000 406
Circa Pharmaceuticals, Inc. (a) 1,075,800 19,230
Dura Pharmaceuticals, Inc. (a) 35,000 508
Immunex Corp. (a) 156,100 2,322
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS - CONTINUED
North American Biologicals, Inc. (a)(b) 1,280,000 $ 9,600
Pfizer, Inc. 1,174,200 90,707
Rhone Poulenc Rorer, Inc. 130,400 4,760
Schering-Plough Corp. 1,020,000 75,480
Warner-Lambert Co. 290,000 22,330
326,687
MEDICAL EQUIPMENT & SUPPLIES - 4.3%
Acuson Corp. (a) 153,600 2,495
Arrow International, Inc. 176,400 5,997
Baxter International, Inc. 1,350,000 38,137
Beckman Instruments, Inc. 830,900 23,160
Becton, Dickinson & Co. 1,545,700 74,194
Bergen Brunswig Corp. Class A 259,200 5,411
Biomet, Inc. (a) 110,000 1,540
Cardinal Health, Inc. 1,037,800 48,128
Conmed Corp. (a)(b) 306,150 6,085
Cordis Corp. (a) 60,000 3,630
Hologic, Inc. (a)(b) 205,000 3,075
Johnson & Johnson 675,000 36,956
Marquette Electronics, Inc. Class A (a) 30,000 698
Medisense, Inc. (a) 127,300 2,944
Medtronic, Inc. 600,000 33,375
Nellcor, Inc. (a) 179,300 5,917
Owens and Minor, Inc. 783,200 11,161
Pall Corp. 76,900 1,442
Respironics, Inc. (a) 20,700 492
St. Jude Medical, Inc. 1,204,300 47,871
Staar Surgical Co. (a) 315,000 2,835
Submicron Systems Corp. (a) 85,500 422
Sybron Corp. (a) 57,900 1,998
Thermedics, Inc. (a) 29,000 370
U.S. Surgical Corp. 884,400 16,804
Zoll Medical Corp. (a) 235,000 2,703
377,840
MEDICAL FACILITIES MANAGEMENT - 1.9%
Beverly Enterprises, Inc. (a) 379,500 5,455
Columbia/HCA Healthcare Corp. 785,000 28,653
HEALTHSOUTH Rehabilitation Corp. 25,000 925
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - CONTINUED
Health Management Associates, Inc. Class A (a) 799,900 $ 19,998
Health Management, Inc. (Del.) (a) 362,500 6,480
Humana, Inc. (a) 650,000 14,706
Integrated Health Services, Inc. 27,600 1,090
Lincare Holdings, Inc. (a) 685,000 19,865
Multicare Companies, Inc. (a) 737,000 14,556
Oxford Health Plans, Inc. (a) 81,000 6,419
Quorum Health Group, Inc. (a)(b) 474,200 9,010
Ren Corp. (a) 130,000 1,723
Surgical Care Affiliates, Inc. 100,000 2,025
Theratx, Inc. (a) 95,000 1,852
United HealthCare Corp. 568,200 25,640
U.S. Healthcare, Inc. 138,300 5,704
164,101
TOTAL HEALTH 868,628
HOLDING COMPANIES - 0.3%
Anglovaal Ltd. Class N 200,000 6,139
Gencor Ltd. 1,700,000 6,095
Lonrho Ltd. Ord. 3,949,900 9,405
Westmont Land (Asia) BHD (a) 950,000 1,801
23,440
INDUSTRIAL MACHINERY & EQUIPMENT - 3.9%
ELECTRICAL EQUIPMENT - 1.6%
AMETEK, Inc. 560,000 9,450
Amphenol Corp. Class A (a) 24,500 588
Avid Technology, Inc. (a)(b) 550,000 17,669
BMC Industries, Inc. 448,600 7,009
C COR Electronics, Inc. (a) 52,400 1,624
California Microwave Corp. (a) 326,000 11,899
Computer Products, Inc. (a) 439,400 1,483
Oak Industries, Inc. (a) 17,300 396
Philips Electronics NV 2,180,000 64,038
Pinnacle Systems (a) 35,000 525
Scientific-Atlanta, Inc. 785,000 16,485
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
ELECTRICAL EQUIPMENT - CONTINUED
United Engineers BHD 1,334,000 $ 6,582
Westinghouse Electric Corp. 100,000 1,225
Zenith Electronics Corp. (a) 167,900 1,952
140,925
INDUSTRIAL MACHINERY & EQUIPMENT - 1.1%
AGCO Corp. 387,950 11,784
Atlas Copco AB B Free shares 305,000 3,898
Case Corp. 963,900 20,724
Caterpillar, Inc. 520,000 28,665
Exide Corp. 150,000 8,438
Greenfield Industries, Inc. 37,600 902
Imo Industries, Inc. (a)(b) 1,290,200 16,128
Parker-Hannifin Corp. 25,000 1,137
Welbilt Corporation (a) 100,000 3,337
95,013
POLLUTION CONTROL - 1.2%
Allwaste, Inc. (a) 483,100 2,717
Browning-Ferris Industries, Inc. 825,000 23,409
International Technology Corp. (a) 141,100 423
Laidlaw, Inc. Class B 50,000 401
OHM Corp. (a) 692,395 5,885
Sanifill, Inc. (a)(b) 960,900 24,023
Sevenson Environmental Services, Inc. (b) 427,000 7,152
Tetra Tech, Inc. (a) 96,250 1,708
United Waste Systems, Inc. (b) 946,000 23,650
Western Waste Industries, Inc. (a)(b) 1,206,700 18,102
107,470
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 343,408
MEDIA & LEISURE - 5.9%
BROADCASTING - 3.3%
British Sky Broadcast Group 2,011,300 8,066
British Sky Broadcasting Group ADR (a) 799,000 19,176
Broadcasting Partners, Inc. Class A 10,000 154
Cablevision Systems Corp. (a) 329,300 16,630
Capital Cities/ABC, Inc. 855,000 72,889
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Citicasters, Inc. (a) 207,100 $ 5,126
Clear Channel Communications, Inc. (a) 311,700 15,819
EZ Communications, Inc. (a)(b) 664,000 8,300
Emmis Broadcasting Corp. Class A (a) 145,600 1,966
Granite Broadcasting Corp. (a) 32,800 201
Heftel Broadcasting Corp. Class A (a) 203,700 2,037
Heritage Media Corp. Class A (a)(b) 1,355,500 36,429
Jacor Communications, Inc. Class A (a) 849,700 11,259
Lin Television Corp. 100,000 2,275
New World Communications Group, Inc. Class A (a) 682,700 8,022
Renaissance Communications Corp. (a) 225,000 6,244
SFX Broadcasting, Inc. (a) 39,500 730
Saga Communications, Inc. Class A (a)(b) 408,700 5,874
Viacom, Inc. (a) 818,500 34,070
Viacom, Inc. (non-vtg.) (a) 977,700 39,718
294,985
ENTERTAINMENT - 0.4%
Disney (Walt) Co. 487,800 22,500
Players International, Inc. (a) 41,900 943
Royal Caribbean Cruises Ltd. 359,800 10,254
Scientific Games Holdings Corp. (a) 44,500 2,225
35,922
LEISURE DURABLES & TOYS - 1.1%
ARCTCO, Inc. 924,200 17,906
Champion Enterprises, Inc. (a)(b) 548,700 16,735
Cobra Golf, Inc. (a) 171,100 6,117
Coleman, Inc. (a) 25,000 878
ERO, Inc. (a) 133,900 1,105
First Team Sports, Inc. (a) 70,000 1,374
Happiness Express, Inc. (a) 80,000 1,160
Harley Davidson, Inc. 950,000 26,600
Mattel, Inc. 610,000 15,326
Polaris Industries, Inc. 37,300 1,926
Rawlings Sporting Goods, Inc. (a) 108,000 1,526
West Marine, Inc. (a) 112,000 2,155
92,808
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 0.5%
Grand Palais Enterprises, Inc. (a)(b)(c) 398,400 $ 6,597
Hemmeter Enterprises, Inc. (warrants) (a) 398,400 -
Hospitality Franchise Systems, Inc. 328,400 8,702
La Quinta Motor Inns, Inc. 956,200 20,439
National Gaming Corp. (a) 165,800 1,990
President Riverboat Casinos, Inc. (a) 617,300 5,479
Showboat, Inc. 13,300 193
Station Casinos, Inc. (a) 113,900 1,481
44,881
PUBLISHING - 0.4%
Belo (A.H.) Corp. Class A 17,000 961
Gannett Co., Inc. 230,000 12,248
Harcourt General, Inc. 45,000 1,586
Meredith Corp. 361,100 16,836
Nelson Thomas, Inc. 45,000 1,080
Scholastic Corp. (a) 14,000 713
Scripps (E.W.) Co. Class A 83,300 2,520
35,944
RESTAURANTS - 0.2%
Consolidated Products, Inc. (a) 271,076 2,643
Ground Round Restaurants, Inc. (a)(b) 783,200 5,482
Outback Steakhouse, Inc. (a) 128,000 3,008
Quantum Restaurant Group, Inc. (a) 220,900 2,651
Uno Restaurant Corp. (a) 275,800 3,482
17,266
TOTAL MEDIA & LEISURE 521,806
NONDURABLES - 3.3%
BEVERAGES - 0.4%
Dr. Pepper/Seven-Up Companies, Inc. (a) 1,235,000 31,647
FOODS - 0.2%
Archer-Daniels-Midland Co. 60,000 1,238
GoodMark Foods, Inc. 58,000 957
Hormel (George A) & Co. 153,000 3,787
RalCorp Holdings, Inc. (a) 349,700 7,781
Smithfield Foods, Inc. (a) 53,700 1,717
15,480
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 0.6%
Alberto-Culver Co.:
Class A 23,100 $ 566
Class B 238,100 6,488
American Safety Razor Co. (a) 408,700 5,620
Avon Products, Inc. 42,700 2,551
DSG International Ltd. 305,000 5,414
Gillette Co. 350,000 26,163
Safeskin Corp. (a)(b) 745,300 10,620
57,422
TOBACCO - 2.1%
Philip Morris Companies, Inc. 2,100,000 120,750
RJR Nabisco Holdings Corp. (a) 11,700,000 64,350
185,100
TOTAL NONDURABLES 289,649
PRECIOUS METALS - 0.9%
Agnico Eagle Mines Ltd. 277,300 2,918
American Barrick Resources Corp. 800,000 17,904
Anglo American Corp. of South Africa Ltd. ADR 70,000 4,008
Driefontein Consolidated Ltd. sponsored ADR 675,800 10,221
Franco Nevada Mining Corp. 302,100 14,842
Free State Consolidated Gold Mines Ord. 283,400 4,280
Free State Consolidated Gold Mines Ltd. ADR 542,600 8,342
Golden Star Resources, Ltd. Canada (a) 167,500 1,434
Great Central Mines NL (a) 1,190,000 2,537
Kloof Gold Mining Co. Ltd.:
Ord. 72,700 1,080
sponsored ADR 233,000 3,466
Western Deep Levels Ltd. ADR 191,800 7,696
Zapopan NL (a) 1,030,000 1,677
80,405
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - 5.8%
APPAREL STORES - 0.5%
AnnTaylor Stores Corp. (a) 989,600 $ 34,018
Cato Corp. Class A 364,000 2,639
Sportmart, Inc. Class A (non-vtg.) (a) 186,000 1,930
Talbots, Inc. 32,000 1,000
Today's Man, Inc. (a)(b) 635,200 6,670
46,257
DRUG STORES - 0.7%
General Nutrition Companies, Inc. (a) 105,500 3,060
Revco (D.S.), Inc. (a) 1,850,000 43,706
Rite Aid Corp. 639,900 14,957
61,723
GENERAL MERCHANDISE STORES - 0.5%
Casey's General Stores, Inc. 215,200 3,228
Dayton Hudson Corp. 277,300 19,619
Ezcorp, Inc. Class A (non-vtg.) (a) 53,300 546
Federated Department Stores, Inc. (Del.) (a) 24,528 472
Federated Department Stores, Inc. (Del.):
Class C (warrants) (a) 17,930 92
Class D (warrants) (a) 17,930 101
Michaels Stores, Inc. (a) 14,200 493
Nordstrom, Inc. 400,000 16,800
Sears, Roebuck & Co. 105,600 4,858
Woolworth Corp. 100,000 1,500
47,709
GROCERY STORES - 1.4%
American Stores Co. 91,700 2,464
Hannaford Brothers Co. 68,700 1,743
Kroger Co. (The) (a) 150,000 3,619
Loblaw Companies Ltd. 231,600 3,944
Penn Traffic Co. (a) 78,400 2,979
Quality Food Centers, Inc. 102,500 2,473
Richfood Holdings, Inc. Class A (b) 1,367,500 21,880
Rykoff-Sexton, Inc. 529,900 10,797
Safeway, Inc. (a) 991,400 31,601
Stop & Shop Companies, Inc. (a) 1,498,200 38,204
119,704
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - 2.7%
Barnes & Noble, Inc. (a) 623,800 $ 19,494
Best Buy Co., Inc. (a) 160,000 5,000
Fabri-Centers of America, Inc. (a) 196,900 3,495
Friedmans, Inc. Class A (a) 102,400 1,766
Hancock Fabrics, Inc. 211,900 1,881
Home Depot, Inc. (The) 1,475,000 67,850
Lowe's Companies, Inc. 990,000 34,403
Micro Warehouse, Inc. 200,000 7,000
Officemax, Inc. (a) 476,400 12,625
Office Depot, Inc. (a) 926,100 22,226
Old American Stores, Inc. (a) 24,200 357
Petco Animal Supplies, Inc. (a) 115,000 1,668
Petsmart, Inc. (a) 117,300 4,047
Staples, Inc. (a) 1,091,100 27,005
Sunglass Hut International, Inc. (a) 186,500 4,290
Tandy Corp. 75,000 3,759
Tuesday Morning Corp. (a) 130,500 766
Variflex, Inc. (a) 188,500 3,958
Williams-Sonoma, Inc. (a) 538,500 16,188
237,778
TOTAL RETAIL & WHOLESALE 513,171
SERVICES - 1.6%
EDUCATIONAL SERVICES - 0.0%
Sylvan Learning Systems (a) 60,000 1,186
PRINTING - 0.7%
Cadmus Communications Corp. 167,500 2,638
Cyrk, Inc. (a)(b) 576,800 23,865
Devon Group, Inc. (a) 248,850 7,092
Moore Corporation Ltd. 1,230,000 23,470
57,065
SERVICES - 0.9%
CDI Corp. (a) 679,800 13,511
Comdata Holdings Corp. (a) 20,000 228
Manpower, Inc. 329,400 9,264
Medaphis Corp. (a) 675,100 31,392
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
SERVICES - CONTINUED
On Assignment, Inc. (a) 45,000 $ 720
Robert Half International, Inc. (a) 1,166,800 28,003
83,118
TOTAL SERVICES 141,369
TECHNOLOGY - 28.8%
COMMUNICATIONS EQUIPMENT - 4.7%
Active Voice Corp. (b) 283,800 5,995
Brite Voice Systems, Inc. (a) 120,500 2,154
Cabletron Systems, Inc. (a) 499,300 23,217
Checkpoint Systems, Inc. (a) 25,000 481
Cisco Systems, Inc. (a) 1,130,000 39,691
Coherent Communications Systems Corp. (a) 93,800 1,524
DSC Communications Corp. (a) 535,000 19,193
Dialogic Corp. (a) 232,600 5,466
Digital Systems International, Inc. (a) 149,500 1,766
Dynatech Corp. (a) 258,600 8,534
General Instrument Corp. (a) 2,145,800 64,374
ITI Technologies 95,000 2,155
Inter-Tel, Inc. (a)(b) 605,900 4,393
Lannet Data Communications Ltd. (a) 145,000 3,408
Microtest, Inc. (a) 130,000 3,088
Microcom, Inc. (a) 431,600 4,909
Microdyne Corp. (a) 37,300 396
Network Equipment Technologies (a) 242,200 5,813
Network General Corp. (a) 228,000 5,857
Nokia Corp.:
AB 318,000 46,852
AB Free shares 308,000 45,508
AB sponsored ADR (a) 637,600 47,820
Pairgain Technologies, Inc. (a) 4,300 61
Perceptron, Inc. (a)(b) 223,800 5,147
Plantronics, Inc. (a) 108,900 3,267
Telco Systems, Inc. (a) 283,400 4,747
Tekelec (a) 35,000 1,151
Teknekron Communications Systems, Inc. (a) 45,000 461
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT - CONTINUED
Tellabs, Inc. (a) 107,700 $ 6,004
3Com Corp. 875,000 45,118
U.S. Robotics, Inc. (a) 59,200 2,560
Xircom, Inc. (a) 64,300 1,142
412,252
COMPUTER SERVICES & SOFTWARE - 6.5%
Alantec Corp. (a) 51,900 1,661
Alias Research, Inc. (a) 119,700 2,155
America Online, Inc. (a) 602,600 33,746
Analysts International Corp. 10,000 205
Banyan Systems, Inc. (a) 85,000 1,519
Broadway & Seymour, Inc. (a) 73,000 1,588
Broderbund Software, Inc. (a) 230,000 10,753
CACI International, Inc. Class A (a)(b) 553,300 5,602
Cambridge Technology Partners Mass., Inc. (a) 155,800 3,467
Ceridian Corp. (a) 1,033,600 27,778
Chipcom Corp. (a) 359,400 17,970
Cognos, Inc. (a) 152,000 2,751
Computer Associates International, Inc. 520,000 25,220
Computer Sciences Corp. (a) 331,000 16,881
Corel Systems Corp. (a) 855,000 11,893
Davidson & Associates, Inc. (a) 5,000 163
Digidesign, Inc. (a) 227,500 5,631
Electronic Arts (a) 105,000 2,021
Electronics for Imaging, Inc. (a)(b) 875,000 24,063
Frame Technology Corp. (a) 581,200 9,517
HBO & Co. 211,900 7,311
Health Management Systems, Inc. (a) 60,000 1,995
Informix Corp. (a) 450,000 14,456
Integrated Systems, Inc. (a) 40,000 750
Integrated Silicon Systems, Inc. (a) 22,000 677
Lanoptics Ltd. 25,000 203
Learning Co. (a) 25,000 613
Lotus Development Corp. (a) 100,000 4,100
Macromedia, Inc. (a) 240,200 6,125
McAfee Associates, Inc. (a) 150,300 3,044
Medic Computer Systems, Inc. (a) 50,000 1,550
Mentor Graphics Corp. (a) 1,071,300 16,337
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Mercury Interactive Group Corp. (a) 49,100 $ 651
Microsoft Corp. (a) 995,000 60,819
National Data Corp. 15,000 386
Network Peripherals, Inc. (a)(b) 815,100 22,211
Novell, Inc. (a) 350,000 5,994
Optical Data Systems, Inc. (a) 127,300 3,708
Oracle Systems Corp. (a) 1,550,000 68,394
Paychex, Inc. 20,000 810
Peoplesoft, Inc. (a) 357,800 13,507
Platinum Technology, Inc. (a) 719,700 16,283
Quickturn Design Systems, Inc. (a) 40,000 550
Recognition International, Inc. 84,600 783
Reuters Holdings PLC ADR Class B 21,200 930
SPSS, Inc. (a)(b) 489,900 6,307
Shared Medical Systems Corp. 148,500 4,863
Softdesk, Inc. (a) 188,900 3,660
Softkey International, Inc. (a) 42,500 1,084
Sonic Solutions (a) 201,600 3,175
Spectrum Holobyte, Inc. (a) 193,500 2,612
State of The Art, Inc. (a)(b) 705,400 4,850
Stratacom, Inc. (a) 430,000 15,050
Sybase, Inc. (a) 1,016,700 52,867
Symantec Corp. (a) 1,065,100 18,638
Technology Solutions, Inc. (a) 25,000 193
Wall Data, Inc. 40,000 1,590
Xcellenet, Inc. (a) 85,000 1,318
572,978
COMPUTERS & OFFICE EQUIPMENT - 8.8%
ADAPTEC, Inc. (a) 1,072,800 25,345
Apple Computer, Inc. 145,000 5,655
Bay Networks, Inc. 75,000 2,213
Caere Corp. (a) 135,000 2,447
Compaq Computer Corp. (a) 2,125,000 83,938
Danka Business Systems PLC sponsored ADR 31,700 686
Diebold, Inc. 567,600 23,343
Digital Equipment Corp. (a) 1,473,000 48,977
EMC Corp. (a) 1,240,000 26,815
Exabyte (a) 252,600 5,399
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Hewlett-Packard Co. 895,000 $ 89,388
Hutchinson Technology, Inc. (a) 64,400 1,594
In Focus Systems, Inc. (a) 255,000 6,646
International Business Machines Corp. 2,750,000 202,125
International Imaging Materials, Inc. (a) 102,500 3,331
Komag, Inc. (a) 385,900 10,082
Kronos, Inc. (a)(b) 343,900 8,941
Metrologic Instruments (a) 88,500 1,350
Micom Communication Corp. (a) 513,733 4,495
Norand Corp. (a) 35,000 1,243
PSC, Inc. 57,500 748
Peak Technologies Group, Inc. (a) 5,000 81
Plannar Systems, Inc. (a) 410,000 9,430
Proxima Corp. (a)(b) 543,300 15,688
Pyramid Technology Corp. (a) 192,400 2,501
Seagate Technology (a) 1,136,400 27,274
Sequent Computer Systems, Inc. (a) 86,000 1,698
Silicon Graphics, Inc. (a) 1,006,000 31,060
Stratus Computer, Inc. (a) 189,400 7,197
Sun Microsystems, Inc. (a) 1,503,600 53,377
Symbol Technologies, Inc. (a) 480,700 14,841
Tandem Computers, Inc. (a) 2,685,000 45,980
Western Digital Corp. (a) 822,900 13,784
777,672
ELECTRONIC INSTRUMENTS - 1.3%
Applied Materials, Inc. (a) 310,000 13,098
Cognex Corp. (a) 25,000 644
Credence Systems Corp. (a)(b) 785,000 18,448
Electro Scientific Industries, Inc. (a) 40,000 860
Elsag Baily Process Automat NV 70,000 1,724
Lam Research Corp. (a) 280,000 10,430
Novellus System, Inc. (a) 425,000 21,250
Silicon Valley Group, Inc. (a)(b) 1,045,700 21,568
Teradyne, Inc. (a) 435,300 14,745
Varian Associates, Inc. 486,500 17,027
X-Rite, Inc. 47,800 943
120,737
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - 7.5%
AMP, Inc. 335,000 $ 24,371
ARC International Corp. (a) 414,200 1,346
Advanced Micro Devices, Inc. (a) 550,000 13,681
Alliance Semiconductor Corp. (a) 150,000 4,688
Altera Corp. (a) 190,800 7,990
Altron Inc. (a) 33,200 813
Analog Devices, Inc. (a) 775,000 27,222
Atmel Corp. (a) 442,800 14,834
Augat, Inc. 102,200 1,929
Cascade Communications Corp. (a) 62,200 3,841
Cypress Semiconductor Corp. (a) 50,000 1,156
DH Technology, Inc. (a) 83,700 2,009
Digital Microwave Corp. (a) 20,000 413
Esterline Corp. (a) 79,700 1,096
Exar Corp. (a) 197,100 4,829
Flextronics International (a) 38,400 586
Innovex, Inc. 60,000 953
Integrated Device Technology, Inc. (a) 817,900 24,230
International Rectifier Corp. (a) 956,900 23,205
Kemet Corp. (a) 626,600 18,563
Kent Electronics Corp. (a) 21,000 832
LSI Logic Corp. (a) 1,650,000 66,619
Linear Technology Corp. 818,000 40,491
Maxim Integrated Products, Inc. (a) 644,200 22,547
Merix Corporation (a) 42,500 1,078
Micrel, Inc. (a) 130,000 1,885
Microchip Technology, Inc. (a) 635,700 17,482
Micron Technology, Inc. 875,000 38,609
Motorola, Inc. 2,175,000 125,878
National Semiconductor Corp. (a) 1,585,000 30,908
Opti, Inc. (a) 262,900 4,141
Photronics, Inc. (a) 172,700 5,138
Quality Semiconductor, Inc. (a) 125,000 1,563
RF Monolithics, Inc. (a) 150,000 1,669
SGS-Thomson Microelectronic NV (a) 357,000 8,122
Solectron Corp. (a) 78,000 2,145
Standard Microsystems Corp. 35,000 1,050
Tencor Instruments (a) 138,000 5,313
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Texas Instruments, Inc. 290,000 $ 21,714
Thomas & Betts Corp. 553,100 37,127
Videonics, Inc. 130,000 1,657
Vishay Intertechnology, Inc. 312,600 15,316
Xilinx, Inc. (a) 545,200 32,302
661,341
TOTAL TECHNOLOGY 2,544,980
TRANSPORTATION - 1.5%
AIR TRANSPORTATION - 0.1%
Northwest Airlines Corp. Class A (a) 118,300 1,863
Pittston Company Services Group 246,200 6,524
8,387
RAILROADS - 1.2%
Bombardier, Inc. Class B 235,000 4,170
CSX Corp. 259,900 18,096
Canadian Pacific Ltd. Ord. 1,150,000 17,124
Santa Fe Pacific Corp. 841,900 14,733
Southern Pacific Rail Corp. (a) 1,830,000 33,169
Wisconsin Central Transportation Corp. (a) 508,000 20,955
108,247
SHIPPING - 0.0%
Nu-Kote Holdings, Inc. Class A 145,000 3,752
TRUCKING & FREIGHT - 0.2%
Harper Group 234,300 3,690
Landstar System, Inc. (a) 270,000 8,843
TNT Freightways Corp. 110,950 2,843
15,376
TOTAL TRANSPORTATION 135,762
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - 3.0%
CELLULAR - 1.8%
Airtouch Communications (a) 2,930,000 $ 85,336
Arch Communications Group, Inc. (a) 247,200 4,357
BCE Mobile Communications, Inc. (a) 93,300 2,962
Commnet Cellular, Inc. (a) 403,600 11,704
LIN Broadcasting Corp. 130,000 17,355
Paging Network, Inc. (a) 64,000 2,176
Rogers Cantel Mobile Communications, Inc.
Class B (non-vtg.) (a) 35,000 1,030
Technology Resources Industries BHD (a) 1,550,000 4,947
Vanguard Cellular Systems, Inc. Class A (a) 886,900 22,838
Vodafone Group PLC sponsored ADR 129,100 4,341
157,046
TELEPHONE SERVICES - 1.2%
ALC Communications Corp. (a) 767,400 23,885
ALLTEL Corp. 50,000 1,506
Ameritech Corp. 612,600 24,734
BellSouth Corp. 205,000 11,096
LCI International, Inc. (a) 117,600 3,146
NYNEX Corp. 306,700 11,271
Southwestern Bell Corp. 781,200 31,541
Telecom Argentina Stet France Telecom SA 500,000 2,450
109,629
TOTAL UTILITIES 266,675
TOTAL COMMON STOCKS
(Cost $6,873,008) $ 7,319,522
PREFERRED STOCKS - 0.2%
CONVERTIBLE PREFERRED STOCKS - 0.1%
HEALTH - 0.1%
MEDICAL EQUIPMENT & SUPPLIES - 0.1%
U.S. Surgical Corp. $2.20 (d) 180,600 4,154
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - 0.1%
TECHNOLOGY - 0.0%
COMPUTER SERVICES & SOFTWARE - 0.0%
Sap AG 5,000 $ 2,833
UTILITIES - 0.1%
TELEPHONE SERVICES - 0.1%
Stet (Societa Finanziaria Telefonica) Spa 3,000,000 7,116
TOTAL NONCONVERTIBLE PREFERRED STOCKS 9,949
TOTAL PREFERRED STOCKS
(Cost $13,578) 14,103
CORPORATE BONDS - 0.7%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) (E) AMOUNT (000S)
CONVERTIBLE BONDS - 0.6%
DURABLES - 0.2%
TEXTILES & APPAREL - 0.2%
Unifi, Inc. 6%, 3/15/02 Baa1 $ 18,835 18,246
RETAIL & WHOLESALE - 0.2%
Fabri-Centers of America, Inc.
6 1/4%, 3/1/02 B2 18,150 13,885
TECHNOLOGY - 0.2%
COMMUNICATIONS EQUIPMENT - 0.2%
General Instrument Corp. 5%, 6/15/00 B1 12,050 16,087
TOTAL CONVERTIBLE BONDS 48,218
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED)(E) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - 0.1%
RETAIL & WHOLESALE - 0.1%
GENERAL MERCHANDISE STORES - 0.0%
Federated Department Stores, Inc.:
Series A, 10.97%, 6/30/99 - $ 245 $ 245
Series B, 11.29%, 6/30/02 - 367 369
614
GROCERY STORES - 0.1%
Rykoff-Sexton, Inc. 8 7/8%, 11/1/03 Ba2 12,000 11,220
TOTAL NONCONVERTIBLE BONDS 11,834
TOTAL CORPORATE BONDS
(Cost $62,858) 60,052
U.S. TREASURY OBLIGATIONS - 7.8%
U.S. Treasury Bills, yield at date of purchase
5.33% - 5.63%, 3/9/95 - 3/30/95
(Cost $691,092) 700,000 691,080
REPURCHASE AGREEMENTS - 8.4%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements,
(U.S. Treasury obligations), in a joint
trading account at 5.77%, dated
12/30/94 due 1/3/95 $ 740,102 739,628
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $8,380,164) $ 8,824,385
LEGEND
(a) Non-income producing
(b) Affiliated company (see Note 7 of Notes to Financial Statements).
(c) 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
(d) 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 $8,691,000 or 0.1% of net
assets.
(e) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
INCOME TAX INFORMATION
At December 31, 1994, the aggregate cost of investment securities for
income tax purposes was $8,443,083,000. Net unrealized appreciation
aggregated $381,302,000, of which $631,538,000 related to appreciated
investment securities and $250,236,000 related to depreciated investment
securities.
The fund hereby designates $18,140,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
At December 31, 1994, the fund had a capital loss carryforward of
approximately $148,057,000 which will expire on December 31, 2002.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER SHARE AMOUNTS) DECEMBER 31, 1994
ASSETS
Investment in securities, at value (including repurchase $ 8,824,385
agreements of $739,628) (cost $8,380,164) -
See accompanying schedule
Receivable for investments sold 181,674
Receivable for fund shares sold 42,380
Dividends receivable 8,403
Interest receivable 955
Other receivables 9,863
TOTAL ASSETS 9,067,660
LIABILITIES
Payable for investments purchased $ 195,518
Payable for fund shares redeemed 32,993
Accrued management fee 5,101
Other payables and accrued expenses 3,350
Collateral on securities loaned, at value 136,516
TOTAL LIABILITIES 373,478
NET ASSETS $ 8,694,182
Net Assets consist of:
Paid in capital $ 8,443,163
Undistributed net investment income 16,028
Accumulated undistributed net realized gain (loss) on (209,290)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 444,281
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 287,108 shares outstanding $ 8,694,182
NET ASSET VALUE and redemption price per share $30.28
($8,694,182 (divided by) 287,108 shares)
Maximum offering price per share (100/97.00 of $30.28) $31.22
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED DECEMBER 31, 1994
INVESTMENT INCOME $ 81,745
Dividends (including $1,311 received from affiliated
issuers)
Interest (including security lending fees of $1,916) 42,128
TOTAL INCOME 123,873
EXPENSES
Management fee $ 48,160
Basic fee
Performance adjustment 6,536
Transfer agent fees 21,887
Accounting and security lending fees 910
Non-interested trustees' compensation 43
Custodian fees and expenses 781
Registration fees 1,287
Audit 119
Legal 52
Miscellaneous 75
Total expenses before reductions 79,850
Expense reductions (2,118) 77,732
NET INVESTMENT INCOME 46,141
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain of $6,449 (192,708)
on sales of investment in affiliated issuers)
Foreign currency transactions (31,101) (223,809)
Change in net unrealized appreciation (depreciation) on:
Investment securities 72,466
Assets and liabilities in foreign currencies (41) 72,425
NET GAIN (LOSS) (151,384)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (105,243)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1994 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 46,141 $ 19,071
Net investment income
Net realized gain (loss) (223,809) 480,613
Change in net unrealized appreciation (depreciation) 72,425 180,358
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (105,243) 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 (46,899) (387,128)
TOTAL DISTRIBUTIONS (46,899) (419,285)
Share transactions 4,739,576 5,259,147
Net proceeds from sales of shares
Reinvestment of distributions 45,585 410,355
Cost of shares redeemed (2,146,397) (1,709,099)
Net increase (decrease) in net assets resulting from 2,638,764 3,960,403
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 2,486,622 4,221,160
NET ASSETS
Beginning of period 6,207,560 1,986,400
End of period (including undistributed net investment $ 8,694,182 $ 6,207,560
income (loss) of $16,028 and $(174), respectively)
OTHER INFORMATION
Shares
Sold 154,793 170,736
Issued in reinvestment of distributions 1,465 13,609
Redeemed (70,436) (55,382)
Net increase (decrease) 85,822 128,963
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,
1994 1993 1992C 1991 1990
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 30.84 $ 27.47 $ 25.60 $ 17.35 $ 16.78
period
Income from Investment
Operations
Net investment income .06 .14 .32 D .22 .51
Net realized and unrealized (.40) 5.66 3.67 9.20 .15
gain (loss)
Total from investment (.34) 5.80 3.99 9.42 .66
operations
Less Distributions - (.11) (.20) (.11) (.09)
From net investment income
In excess of net investment - (.07) - - -
income
From net realized gain (.22) (2.25) (1.92) (1.06) -
Total distributions (.22) (2.43) (2.12) (1.17) (.09)
Net asset value, end of period $ 30.28 $ 30.84 $ 27.47 $ 25.60 $ 17.35
TOTAL RETURN A, B (1.12)% 21.43% 15.89% 54.92% 3.94%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 8,694 $ 6,208 $ 1,986 $ 1,000 $ 332
(in millions)
Ratio of expenses to average 1.00% 1.06% .87% .89% 1.06%
net assets
Ratio of expenses to average 1.03% 1.08% .87% .89% 1.06%
net assets before expense
reductions
Ratio of net investment income .59% .46% 1.19% 1.01% 3.02%
to average net assets
Portfolio turnover rate 235% 255% 297% 217% 320%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C AS OF JANUARY 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1994
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
of their purchase date 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 investment securities.
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 passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
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
futures and options transactions, foreign currency transactions, market
discount, partnerships, non-taxable dividends, and losses deferred due to
wash sales, futures and options 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 and may
affect net investment income per share. Accumulated 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 use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. Losses may arise
from changes in the value of the foreign currency or if the counterparties
do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
2. OPERATING POLICIES -
CONTINUED
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 $6,597,000 or 0.1% of net assets.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $18,625,320,000 and $16,172,734,000, 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 and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2850% to .5200% for the period January 1, 1994 to July
31, 1994 and .2700% to .5200% for the period August 1, 1994 to December 31,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .30%. The basic fee is subject to a performance
adjustment (up to a maximum of (plus/minus).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 annual rate of .70% of average net assets after the
performance adjustment.
SALES LOAD. For the period, Fidelity Distributors Corporation, an affiliate
of FMR and the general distributor of the fund, received sales charges of
$18,786,000 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder 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 $9,764,000 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 $129,806,000 and
$136,516,000, respectively.
6. 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
$2,118,000 under this arrangement.
7. 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
Active Voice Corp. $ 1,860 $ 751 $ - $ 5,995
Avid Technology, Inc. (a) 3,372 1,543 - 17,669
Bio-Rad Laboratories, Inc.
Class A (a) 3,670 782 - 11,883
Broadcasting Partners, Inc.
Class A (a) 74 2,956 - -
Brown Tom Inc. (a) - 592 - -
CACI International, Inc.
Class A (a) 301 - - 5,602
Cambrex Corp. 1,555 - 80 11,297
Camco International, Inc. 709 - 86 33,054
Champion Enterprises, Inc. (a) 7,188 1,227 - 16,735
Conmed Corp. (a) 2,534 918 - 6,085
Continental Homes Holdings Corp. 2,500 3,657 - -
Credence Systems Corp. (a) 7,643 2,844 - 18,448
Cyrk, Inc. (a) 5,540 3,359 - 23,865
Donnkenny, Inc. (a) 7,738 12,721 - -
Dovatron International Inc. - 575 - -
EZ Communications, Inc. (a) 2,710 1,447 - 8,300
Earth Technology Corp. (USA) 1,054 617 - -
Electronics for Imaging, Inc. 6,279 - - 24,063
Farah, Inc. (a) 4,884 7,250 - -
Finish Line, Inc. Class A 106 302 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Forstmann $ - $ 36 $ - $ -
Grad & Walker Energy Corp. (a) - 530 - -
Grand Palais Enterprises, Inc. (a) - - - 6,597
Ground Round Restaurants, Inc. (a) 190 - - 5,482
Harper Group 4,782 6,036 117 -
Haverty Furniture Companies, Inc. 830 1,645 77 -
Heritage Media Corp. Class A (a) 6,862 348 - 36,429
Hologic, Inc. (a) 741 885 - 3,075
HS Resources, Inc. (a) - 3,334 - -
Imo Industries, Inc. (a) 4,850 4 - 16,128
Intensity Resources Ltd. (a) - 2,097 - -
Inter-Tel, Inc. (a) 480 2,241 - 4,393
Jacor Communications, Inc.
Class A (a) 390 180 - -
Kronos, Inc. (a) 1,899 - - 8,941
Mb Communications, Inc. (a) - 3,030 - -
Michael Anthony Jewelers, Inc. (a) - 2,020 - -
Miltope Croup, Inc. (a) - 655 - -
Nantucket Industries, Inc. (a) - 581 - -
Natures Bounty, Inc. (a) 311 504 - -
Network Peripherals, Inc. (a) 6,368 - - 22,211
North American Biologicals, Inc. (a) 68 - - 9,600
OHM Corp. (a) 3,812 10,504 - -
Offshore Pipelines, Inc. (a) 5,050 4,968 - -
Orbit International Corp. - 68 - -
Perceptron, Inc. (a) - - - 5,147
Photonics Corp. (a) 107 242 - -
Porta Systems Corp. (a) 384 1,378 - -
Proxima Corp. (a) 10,938 3,688 - 15,688
Quorum Health Group, Inc. (a) 2,454 1,303 - 9,010
Redman Industries (a) - 272 - -
Regal Communications Corp. (a) - 3,847 - -
Rehabcare Corp. (a) - 198 - -
Rhodes, Inc. (a) 7,215 11,337 - -
Richfood Holdings, Inc. Class A 4,547 - 61 21,880
Safeskin Corp. (a) 7,660 2,125 - 10,620
Saga Communications, Inc.
Class A (a) 1,087 53 - 5,874
Sanifill, Inc. (a) 2,529 - - 24,023
Schuler Homes, Inc. (a) 749 3,191 - -
Sevenson Environmental
Services, Inc. 23 - - 7,152
Silicon Valley Group, Inc. (a) 1,136 - - 21,568
Smith International, Inc. (a) 15,680 5,740 - 31,298
SPSS, Inc. (a) 3,913 - - 6,307
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
State of The Art, Inc. (a) $ 2,085 $ - $ - $ 4,850
Sturm Ruger & Co., Inc 8,633 153 872 27,769
Tech-Sym Corp. (a) 735 881 - -
Telco Systems, Inc. (a) 867 859 - -
Thor Industries, Inc. 3,800 4,132 18 -
Today's Man, Inc. (a) 65 - - 6,670
United Waste Systems, Inc. 7,906 - - 23,650
VMark Software, Inc. (a) 1,956 2,880 - -
Warnaco Group, Inc. Class A (a) 6,070 - - 40,319
Warner Insurance - 53 - -
Western Waste Industries, Inc. (a) 8,744 - - 18,102
Xylogics 1,599 2,749 - -
TOTALS $ 197,232 $ 126,288 $ 1,311 $ 575,779
(a) Non-income Producing
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and the Shareholders of Fidelity Contrafund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Contrafund, including the schedule of portfolio investments, as of
December 31, 1994, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the
five years in the period then ended. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1994 by correspondence with the
custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Contrafund as of December 31, 1994, the results of its
operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 3, 1995
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
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
8885 Ladue Road
Ladue, 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
4611 Sharon Road
Charlotte, 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
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc. London, England
Fidelity Management & Research
(Far East) Inc. Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Will Danoff, Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
