FIDELITY
(registered trademark)
CONTRAFUND
ANNUAL REPORT
DECEMBER 31, 1995
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 10 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 32 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 36 Notes to the financial statements.
REPORT OF INDEPENDENT 43 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 44
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was generally very
positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. 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 types of 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. 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 or guaranteed 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. 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 change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return 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, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Contrafund 36.28% 193.77% 488.03%
Contrafund (incl. 3% sales charge) 32.19% 184.96% 470.39%
S&P 500(registered trademark) 37.58% 115.52% 300.54%
Average Growth Fund 30.79% 113.44% 251.83%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Standard & Poor's Composite
Index of 500 Stocks - a common proxy for the U.S. stock market. To measure
how the fund's performance stacked up against its peers, you can compare it
to the average growth fund, which reflects the performance of 572 growth
funds with similar objectives tracked by Lipper Analytical Services over
the past 12 months. 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, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Contrafund 36.28% 24.05% 19.38%
Contrafund (incl. 3% sales charge) 32.19% 23.30% 19.02%
S&P 500(registered trademark) 37.58% 16.60% 14.89%
Average Growth Fund 30.79% 16.01% 12.94%
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 & Poo
12/31/85 9700.00 10000.00
01/31/86 9787.75 10056.00
02/28/86 10749.95 10808.19
03/31/86 11229.47 11411.29
04/30/86 11020.23 11282.34
05/31/86 11299.22 11882.56
06/30/86 11246.91 12083.37
07/31/86 10418.65 11407.91
08/31/86 11098.69 12254.38
09/30/86 10436.09 11240.94
10/31/86 11133.57 11889.55
11/30/86 11133.57 12178.46
12/31/86 10991.80 11867.91
01/31/87 12578.75 13466.52
02/28/87 13347.83 13998.45
03/31/87 13569.12 14403.00
04/30/87 13599.30 14274.81
05/31/87 13720.00 14399.01
06/30/87 14222.93 15126.15
07/31/87 14916.98 15893.05
08/31/87 15460.15 16485.86
09/30/87 15148.33 16124.82
10/31/87 10772.81 12651.53
11/30/87 10179.35 11609.05
12/31/87 10782.87 12492.50
01/31/88 11476.92 13018.43
02/29/88 11999.97 13625.09
03/31/88 12020.09 13204.07
04/30/88 12261.49 13350.64
05/31/88 12090.50 13466.79
06/30/88 12673.90 14084.92
07/31/88 12764.43 14031.39
08/31/88 12482.78 13554.33
09/30/88 12995.78 14131.74
10/31/88 13337.77 14524.60
11/30/88 13237.18 14316.90
12/31/88 13049.67 14567.45
01/31/89 13916.21 15633.78
02/28/89 13833.68 15244.50
03/31/89 14566.12 15599.70
04/30/89 15504.87 16409.32
05/31/89 16309.51 17073.90
06/30/89 16206.35 16976.58
07/31/89 17691.85 18509.57
08/31/89 18197.33 18872.35
09/30/89 18548.07 18794.98
10/31/89 17991.01 18358.93
11/30/89 18403.65 18733.46
12/31/89 18680.85 19183.06
01/31/90 17690.03 17895.87
02/28/90 18057.41 18126.73
03/31/90 18447.06 18607.09
04/30/90 18257.80 18141.91
05/31/90 19983.39 19910.75
06/30/90 20239.44 19775.36
07/31/90 19860.92 19712.07
08/31/90 18313.46 17930.10
09/30/90 17545.30 17056.91
10/31/90 17634.36 16983.56
11/30/90 18680.85 18080.70
12/31/90 19416.13 18585.15
01/31/91 21307.39 19395.46
02/28/91 22918.87 20782.24
03/31/91 24261.78 21285.17
04/30/91 24396.07 21336.26
05/31/91 25951.59 22257.98
06/30/91 24496.78 21238.57
07/31/91 26231.37 22228.28
08/31/91 27551.89 22755.09
09/30/91 27630.22 22375.08
10/31/91 28424.77 22674.91
11/30/91 26925.20 21761.11
12/31/91 30079.19 24250.58
01/31/92 30936.91 23799.52
02/29/92 31940.85 24108.91
03/31/92 31074.01 23638.79
04/30/92 31411.11 24333.77
05/31/92 31748.22 24453.01
06/30/92 30977.69 24088.66
07/31/92 31760.26 25073.88
08/31/92 31170.32 24559.87
09/30/92 31700.06 24849.67
10/31/92 32410.39 24936.65
11/30/92 33975.53 25786.99
12/31/92 34859.95 26104.17
01/31/93 35963.99 26323.44
02/28/93 36201.25 26681.44
03/31/93 37931.22 27244.42
04/30/93 38187.51 26585.11
05/31/93 39699.64 27297.59
06/30/93 39712.45 27376.75
07/31/93 40148.15 27267.24
08/31/93 42095.97 28300.67
09/30/93 42185.67 28082.76
10/31/93 42557.29 28664.07
11/30/93 40955.47 28391.76
12/31/93 42329.11 28735.30
01/31/94 43660.47 29712.30
02/28/94 43347.21 28907.10
03/31/94 41633.23 27646.75
04/30/94 42144.66 28000.63
05/31/94 41909.68 28459.84
06/30/94 40292.45 27762.57
07/31/94 41107.98 28673.18
08/31/94 42821.96 29848.78
09/30/94 42255.24 29117.49
10/31/94 43457.79 29772.63
11/30/94 41481.18 28688.31
12/31/94 41854.39 29113.76
01/31/95 41177.09 29868.68
02/28/95 42835.78 31032.66
03/31/95 44397.72 31948.44
04/30/95 46401.97 32889.32
05/31/95 47521.59 34203.90
06/30/95 50534.89 34998.46
07/31/95 54405.18 36159.01
08/31/95 55123.94 36249.77
09/30/95 56132.98 37779.51
10/31/95 55110.12 37644.64
11/30/95 56561.48 39297.24
12/29/95 57039.20 40054.10
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity
Contrafund on December 31, 1985, and paid a 3% sales charge. As the chart
shows, by December 31, 1995, the value of your investment would have grown
to $57,039 - a 470.39% 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 $40,054 - a
300.54% 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
Strong corporate earnings and a
favorable interest rate
environment helped the U.S.
stock market post robust returns
for the 12 months ended
December 31, 1995. The Standard
& Poor's Composite Index of 500
Stocks finished the 12-month
period with a total return of
37.58% (including reinvested
dividends ) - well above its
historical annual average of
roughly 12%. With inflation
posing little threat, interest rates
fell during the first half of 1995.
The Federal Reserve Board cut
the fed funds rate - the rate
banks charge each other for
overnight loans - twice, in July
and December.
Large-capitalization stocks led
the rally, with the weak dollar
helping to bolster overseas
business. Technology companies
posted the strongest earnings
growth and stock price gain,
although they faltered somewhat
in the fourth quarter. Lower
interest rates and continued
merger and acquisition activity
helped financial stocks perform
well. In November, the Dow Jones
Industrial Average closed above
5000 for the first time. Returns
from foreign markets suffered as
investors brought capital back to
the U.S. The Morgan Stanley
Emerging Markets Free Index
was down 5.21% for the 12
months ended December 31. The
Morgan Stanley EAFE (Europe,
Australia, Far East) Index was up
11.21% for the year. European
markets fared well through 1995,
while the Japanese market
recently has shown signs of
recovery.
An interview with Will Danoff, Portfolio Manager of Fidelity Contrafund
Q. HOW DID THE FUND PERFORM, WILL?
A. The fund performed well. For the 12 months ended December 31, 1995, the
fund returned 36.28%, better than the average growth fund which appreciated
30.79% for the same time period, according to Lipper Analytical Services.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE?
A. The fund beat the average growth fund in 1995 primarily because it
invested heavily in technology stocks in the first three quarters of the
year and took profits earlier than most funds in the fourth quarter. The
fund also de-emphasized sectors sensitive to the consumer and the economy,
such as retailing and transportation, which performed poorly in 1995. The
second half of the year was dominated by the slowing U.S. economy, which
boosted prices of bonds and interest rate-sensitive stocks, but caused many
companies, particularly those sensitive to the economy, to report
disappointing earnings. The major factor influencing results of the fund
and the overall market in the second half of the year was the decline in
the share prices of many technology companies. The fund reduced its
weighting in technology stocks from almost 40% at the end of June to about
12% at the end of the year. The fund's holdings at the end of the period
included several Japanese technology companies, so the fund had a smaller
exposure to the domestic technology sector than the overall market.
Q. YOU INCREASED THE FUND'S HOLDINGS IN THE ENERGY SECTOR DURING THE
PERIOD. WHAT WAS YOUR STRATEGY?
A. Expectations in the sector were low. I recently read an article in THE
WALL
STREET JOURNAL entitled, "For Oil Traders, 1996 Is Looking Bad or Worse."
This headline captured the market's pessimistic view of oil prices and also
was indicative of its negative bias toward energy stocks. Most energy
service stocks have traded sideways for the last five years, performing
dramatically worse than the average stock, which has more than doubled
during the same period. But, while oil and gas prices have held steady,
many of the energy service companies have improved their operations
significantly. Many of these companies have cut costs and capital needs
meaningfully, increased market shares by acquiring smaller competitors or
watching them go out of business, and strengthened their product lines by
introducing or acquiring new, often high tech solutions for their
customers. Due to these fundamental improvements, companies such as
Schlumberger, Camco International and Smith International, which were
holdings in the fund at the end of the period, looked attractive even if
oil and gas prices were to remain at their end-of-the-year levels. In
addition to the energy service companies, the fund also owned positions in
some of the international oil companies, such as British Petroleum and
Texaco, which, like the service companies, have lowered break-even points,
sold poorly performing assets and increased the productivity of both their
capital programs and existing operations.
Q. WHERE ELSE DID YOU FIND INVESTMENT OPPORTUNITIES?
A. The fund has raised its weightings in Japan during the past six months.
Japanese securities accounted for about 9.4% of the fund at the end of
1995. Japan has been in a bear market for the last five years and many
stocks have fallen more than 50% during that time. Expectations for the
market and the economy have been extremely low, with many local investors
having put their savings everywhere but the Japanese stock market - despite
near record low valuations on many stocks. In contrast to the lousy
investor sentiment, corporate fundamentals have been improving. Forced by
the strengthening yen and the weak domestic economy, Japanese companies
have cut costs significantly to stay competitive in the world marketplace
and stabilize their eroding profits. Therefore, if the yen weakens or if
the new government stimulates the economy successfully, profits for many
companies could surge.
Q. YOU BEGAN TO INVEST AGAIN IN THE EMERGING MARKETS . . .
A. That's true. I increased my weighting in emerging markets after reading
another article in THE WALL STREET JOURNAL in November. This headline read,
"Investors Flee Emerging Markets" and indicated just how washed out those
markets appeared to be. The emerging markets reached their highs in late
1993 and the average emerging market mutual fund declined 10% in 1994 and
7% in 1995. Investors were allegedly selling aggressively, but two years
too late. Yet valuations had fallen to the bottom of their historic ranges
in virtually every Southeast Asian market. And, despite the decline in the
markets, economic fundamentals have remained excellent in these emerging
markets. Many of these economies have been growing by more than 7% annually
and I think the outlook for continued strong corporate growth remains
outstanding. Therefore, the fund has initiated positions in companies in
these markets which accounted for about 5% of total investments at the end
of the period.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. The biggest disappointment during the past six months for me as both
manager and a shareholder of the fund was not selling the technology
holdings sooner and faster. The investing environment was characterized by
excessive optimism as seen in the record number of initial public offerings
of small technology companies, the media excitement over Microsoft's
Windows 95 and the growing popularity of the Internet, as well as record
asset growth for technology sector mutual funds and extremely high
valuations relative to corporate profits. In retrospect, holding technology
stocks too long hurt the fund's performance in the fourth quarter.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. So far, the fund is positioned cautiously for the first half of the
year. Last year's near record bond market performance, which helped propel
the stock market to new highs throughout the year, is unlikely to repeat
itself. The Federal Reserve Board has already cut interest rates twice in
the last six months so the economy, although weak in spots, will probably
not deteriorate further. A stronger - or better than expected - economy
should push interest rates up and could force the stock market to fall. In
addition, the stock market has been trading at very high historic valuation
levels relative to corporate earnings and dividends. The market has gone
without a 12% correction for over five years - a very long stretch. Given
the expensive prices of U.S. stocks currently, the fund is positioned
conservatively for opportunities if the market falls this year. I think
that, over the long run, an individual company's stock price will follow
the company's earnings. Therefore, I am working as hard as ever with
Fidelity's research staff to identify those companies that have effective
strategies, low cost structures and/or innovative new products to prosper
in their industries and increase earnings rapidly over the next several
years. These are the companies whose shares I believe have the potential to
excel regardless of the overall stock market performance.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to increase the value
of the fund's shares over the
long term by investing in
companies that are
undervalued or out of favor
START DATE: May 17, 1967
SIZE: as of December 31,
1995, more than $14 billion
MANAGER: Will Danoff, since
October 1990; assistant
Fidelity Magellan Fund,
1990; manager, Fidelity
Select Retailing Portfolio,
1986-1989; joined Fidelity
in 1986
(checkmark)
WILL DANOFF ON THE TECHNOLOGY
SECTOR IN 1995:
"While many technology
stocks rose 40% or more in
1995, the group declined
sharply in the fourth quarter. I
think the most important
contributor to the decline was
slowing profit growth, as seen
in third quarter earnings,
leading to a growing
perception that perhaps
expectations were
unrealistically optimistic. In
the semiconductor industry,
production capacity added
rapidly throughout 1994 and
1995 finally overtook demand
and squeezed prices and
margins in such important
product lines as memory.
Consumer personal computer
sales were good, but not as
great as the expectations
created by the introduction of
Microsoft's Windows 95
operating system and Intel's
Pentium microprocessor, and
the media excitement
heralding the expansion of the
Internet. Intense competition
produced disappointing
margins, particularly relative
to the high expectations for
many personal computer and
workstation manufacturers.
Similarly, new technologies
prohibited many networking
companies from increasing
their already high margins
and exceeding profit growth
expectations."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF DECEMBER 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Chrysler Corp. 1.6 0.9
General Motors Corp. 1.5 1.6
Schlumberger Ltd. 1.3 0.6
Canon, Inc. 1.0 0.0
Burlington Northern Sante Fe 1.0 0.5
Corp.
Caterpillar, Inc. 1.0 0.7
Household International, Inc. 0.9 0.6
Travelers, Inc. (The) 0.8 0.8
Boeing Co. 0.8 0.2
Federal National Mortgage
Association 0.8 0.8
TOP FIVE MARKET SECTORS AS OF DECEMBER 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Finance 17.3 15.6
Technology 11.9 39.4
Energy 10.2 4.1
Durables 5.9 4.8
Basic Industries 5.2 3.1
ASSET ALLOCATION
AS OF DECEMBER 31, 1995 * AS OF JUNE 30, 1995 **
Row: 1, Col: 1, Value: 10.8
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 6.0
Row: 1, Col: 4, Value: 41.2
Row: 1, Col: 5, Value: 40.0
Row: 1, Col: 1, Value: 4.1
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 1.9
Row: 1, Col: 4, Value: 45.0
Row: 1, Col: 5, Value: 49.0
Stocks 83.0%
Bonds 5.9%
Others 0.3%
Short-term
investments 10.8%
FOREIGN
INVESTMENTS 20.4%
Stocks 96.6%
Bonds 0.3%
Others 0.0%
Short-term
investments 3.1%
FOREIGN
INVESTMENTS 7.2%
*
**
INVESTMENTS DECEMBER 31, 1995
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 83.0%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 3.4%
AEROSPACE & DEFENSE - 2.7%
Alliant Techsystems, Inc. (a) 68,900 $ 3,488
Boeing Co. 1,550,000 121,481
C A E Industries Ltd. (d) 5,591,900 42,523
General Motors Corp. Class H 600,000 29,475
Harsco Corp. 80,300 4,667
McDonnell Douglas Corp. 601,000 55,292
Northrop Grumman Corp. 510,800 32,691
Precision Castparts Corp. 218,000 8,666
Rockwell International Corp. 900,000 47,588
Rohr Industries, Inc. (a)(d) 913,200 13,127
Special Devices, Inc. (a)(d) 471,000 6,123
Sundstrand Corp. 579,000 40,747
405,868
DEFENSE ELECTRONICS - 0.7%
Loral Corp. 2,150,000 76,056
Tech-Sym Corp. (a)(d) 456,900 14,564
Tracor, Inc. (a) 636,100 9,223
Trimble Navigation Ltd. (a) 219,300 4,084
103,927
TOTAL AEROSPACE & DEFENSE 509,795
BASIC INDUSTRIES - 5.2%
CHEMICALS & PLASTICS - 2.4%
Agrium, Inc. 609,300 9,155
Asahi Chemical Industry Co. Ltd. 6,603,000 50,448
Cambrex Corp. (d) 515,900 21,345
Cytec Industries, Inc. (a) 470,600 29,354
du Pont (E.I.) de Nemours & Co. 568,800 39,745
IMC Fertilizer Group, Inc. 802,800 32,814
Monsanto Co. 400,000 49,000
Praxair, Inc. 880,000 29,590
Raychem Corp. 314,600 17,893
Rohm & Haas Co. 324,200 20,870
Sealed Air Corp. (a) 489,400 13,764
Union Carbide Corp. 1,477,300 55,399
369,377
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - 0.3%
Kobe Steel (a) 13,238,000 $ 40,841
METALS & MINING - 1.6%
Alcan Aluminium Ltd. 650,000 20,188
Alumax, Inc. (a) 237,600 7,277
Aluminum Co. of America 950,000 50,231
Bre-X Minerals Ltd. (a) 50,000 1,942
De Beers Consolidated Mines Ltd.
ADR 239,000 7,230
Freeport McMoRan Copper & Gold, Inc.:
Class A 100,000 2,800
Class B 560,000 15,750
Freeport McMoRan, Inc. par $0.01 374,200 13,845
Inco Ltd. 2,352,200 77,798
Phelps Dodge Corp. 65,000 4,046
QNI Ltd. 5,684,600 11,991
Sherritt, Inc. 233,600 3,020
Stillwater Mining Co. (a)(c) 220,600 4,247
Tongkah Holdings BHD (d) 9,587,000 16,312
236,677
PAPER & FOREST PRODUCTS - 0.9%
Arab Malaysian Corp. BHD 6,749,000 24,452
Kimberly-Clark Corp. 950,000 78,613
Malakoff BHD 8,318,000 29,652
132,717
TOTAL BASIC INDUSTRIES 779,612
CONGLOMERATES - 1.1%
Grupo Carso SA de CV Class
A-1 (a) 9,415,000 50,973
Tyco International Ltd. 1,900,000 67,688
United Technologies Corp. 462,800 43,908
162,569
CONSTRUCTION & REAL ESTATE - 3.5%
BUILDING MATERIALS - 1.2%
Armstrong World Industries, Inc. 382,800 23,734
Coflexip sponsored ADR 100,000 1,888
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
BUILDING MATERIALS - CONTINUED
Cooper Cameron Corp. (a) 1,065,400 $ 37,822
Elcor Corp. 343,600 7,473
Hume Industries BHD 6,798,000 32,665
Manville Corp. (a) 1,628,200 21,370
Masco Corp. 229,300 7,194
Owens-Corning Fiberglas Corp. (a) 583,400 26,180
USG Corp. (a) 576,500 17,295
York International Corp. 165,900 7,797
183,418
CONSTRUCTION - 1.3%
Castle & Cooke, Inc. 158,800 2,156
Centex Corp. 11,700 407
Clayton Homes, Inc. 359,125 7,676
Daiwa House Industry Co. Ltd. 2,983,000 49,042
Lennar Corp. 696,700 17,505
Oakwood Homes Corp. 767,500 29,453
Sekisui House Ltd. 2,518,000 32,145
Toll Brothers, Inc. (a) 699,900 16,098
YTL Corp. BHD 4,717,500 29,728
184,210
ENGINEERING - 0.5%
EG & G, Inc. 260,800 6,324
Fluor Corp. 807,300 53,282
Foster Wheeler Corp. 457,300 19,435
79,041
REAL ESTATE - 0.0%
Bandar Raya Development BHD 4,483,000 6,392
REAL ESTATE INVESTMENT TRUSTS - 0.5%
CWM Mortgage Holdings, Inc. 278,500 4,735
Crescent Real Estate
Equities, Inc. 1,092,800 37,290
Felcor Suite Hotels, Inc. 361,000 10,018
Public Storage, Inc. 187,000 3,553
Realty Income Corp. 71,000 1,598
Starwood Lodging Trust combined
certificate (SBI) 220,700 6,566
Storage Trust Realty (SBI) 30,000 683
Weingarten Realty Investors (SBI) 55,000 2,090
66,533
TOTAL CONSTRUCTION & REAL ESTATE 519,594
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 5.9%
AUTOS, TIRES, & ACCESSORIES - 4.5%
Borg-Warner Automotive, Inc. 77,800 $ 2,490
Chrysler Corp. 4,300,000 238,112
Dana Corp. 1,264,200 36,978
Echlin, Inc. 335,900 12,260
General Motors Corp. 4,200,000 222,075
Harvard Industries, Inc.
Class B (a) 46,000 1,173
Honda Motor Co. Ltd. 3,535,000 72,820
Intermet Corp. (a) 285,000 2,993
Lear Seating Corp. (a) 2,427,600 70,400
Magna International, Inc.
Class A 182,900 7,876
SPX Corp. 241,800 3,839
671,016
CONSUMER DURABLES - 0.0%
Blount International, Inc.
Class A 148,100 3,888
CONSUMER ELECTRONICS - 0.7%
Black & Decker Corp. 377,700 13,314
Maytag Co. 1,333,900 27,011
Oyl Industries BHD 3,150,000 24,441
Sony Corp. 665,000 39,810
104,576
TEXTILES & APPAREL - 0.7%
Adidas AG (a)(c) 62,000 3,272
Adidas AG (a) 289,000 15,254
Chaus (Bernard), Inc. (a) 1,359,000 4,926
Intimate Brands, Inc. Class A 1,350,000 20,250
Liz Claiborne, Inc. 271,000 7,520
NIKE, Inc. Class B 175,000 12,184
Warnaco Group, Inc. Class A 1,345,400 33,635
97,041
TOTAL DURABLES 876,521
ENERGY - 10.2%
ENERGY SERVICES - 5.6%
Arethusa Offshore Ltd. 870,000 24,360
BJ Services Co. (a) 279,100 8,094
Baker Hughes, Inc. 754,600 18,393
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
ENERGY SERVICES - CONTINUED
Diamond Offshore Drilling,
Inc. (a) 493,800 $ 16,666
Dresser Industries, Inc. 1,622,400 39,546
ENSCO International, Inc. (a) 2,107,300 48,468
Energy Ventures, Inc. (a) 498,800 12,595
Falcon Drilling, Inc. (a)(d) 263,400 3,951
Global Marine, Inc. (a) 500,000 4,375
Halliburton Co. 1,570,800 79,522
Hornbeck Offshore Services,
Inc. (a) 411,200 8,070
Nabors Industries, Inc. (a) 2,693,500 29,965
Oceaneering International,
Inc. (a) 752,900 9,694
Reading & Bates Corp. (a) 1,852,600 27,789
Smedvig AS (d) 1,577,300 31,822
Schlumberger Ltd. 2,815,200 194,953
Smith International, Inc.
(a)(d) 3,847,000 90,405
Sonat Offshore Drilling,
Inc. (d) 1,546,600 69,210
Tidewater, Inc. 2,463,600 77,603
Varco International, Inc. (a) 1,483,900 17,807
Weatherford Enterra, Inc. (a) 666,380 19,242
832,530
INDEPENDENT POWER - 0.3%
Thermo Electron Corp. (a) 785,800 40,862
OIL & GAS - 4.3%
Anadarko Petroleum Corp. 160,000 8,660
Barrett Resources Corp. (a) 165,600 4,865
British Petroleum PLC ADR 1,129,300 115,330
Camco International, Inc. (d) 2,429,900 68,033
Canada Occidental Petroleum
Ltd. 562,500 18,450
Chesapeake Energy Corp. (a) 499,650 16,613
Coastal Corp. (The) 775,100 28,872
Devon Energy Corp. 100,400 2,560
Kerr-McGee Corp. 357,600 22,708
Mobil Corp. 700,000 78,400
Murphy Oil Corp. 24,200 1,004
Newfield Exploration Co. (a) 558,600 15,082
Northstar Energy Corp. (a) 926,200 9,504
Phillips Petroleum Co. 300,000 10,238
Pogo Producing Co. 541,900 15,309
Renaissance Energy Ltd. (a) 2,000,000 49,841
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Texaco, Inc. 1,453,500 $ 114,100
Tosco Corp. 289,100 11,022
Union Pacific Resources Group,
Inc. 1,333,700 33,843
Unocal Corp. 300,000 8,738
Vintage Petroleum, Inc. 753,000 16,943
650,115
TOTAL ENERGY 1,523,507
FINANCE - 17.3%
BANKS - 6.7%
Bancorp Hawaii, Inc. 21,600 775
Bangkok Bank Ltd. 3,619,300 43,966
Bank International Indonesia
PT Ord. 2,523,000 8,359
Bank of New York Co., Inc. 1,000,000 48,750
BankAmerica Corp. 1,000,000 64,750
Chase Manhattan Corp. 485,000 29,403
Chemical Banking Corp. 1,699,600 99,852
Dai-Ichi Kangyo Bank 1,790,000 35,142
First Bank System, Inc. 765,000 37,963
First Hawaiian, Inc. 5,000 150
First Interstate Bancorp 529,600 72,290
Fleet Financial Group, Inc. 751,708 30,632
Fuji Bank 1,670,000 36,824
HSBC Holdings PLC 3,412,000 51,627
Hong Leong Bank BHD 2,289,000 6,311
Hong Leong Bank BHD (rights)
(a) 321,750 65
Krung Thai Bank:
(Loc. Reg.) 5,820,700 24,031
(For. Reg.) 921,500 3,805
Mitsubishi Bank of Japan 2,011,000 47,260
Mitsubishi Trust & Banking
Corp. 4,000,000 66,538
Mitsui Trust and Banking 3,366,000 36,785
Sakura Bank Ltd. 3,416,000 43,278
Siam City Bank PCL (For. Reg.) 8,650,200 9,958
Sumitomo Bank 2,302,000 48,756
Sumitomo Trust & Banking Co.
Ltd. 4,000,000 56,480
Thai Farmers Bank PCL 1,954,500 19,708
Thai Military Bank Ltd.
(For. Reg.) 3,387,740 13,718
Wells Fargo & Co. 295,200 63,763
1,000,939
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CLOSED END INVESTMENT COMPANY - 0.5%
Asia Tigers Fund, Inc. 325,100 $ 3,617
Alliance Global Environment Fund 163,000 1,650
Asia Pacific Fund, Inc. 315,400 4,376
Emerging Tigers Fund, Inc. 333,300 4,333
Emerging Markets Infrastructure
Fund, Inc. 314,700 3,304
GT Global Developing Markets
Fund 624,000 6,084
Malaysia Fund, Inc. 93,400 1,588
Mexico Fund, Inc. (The) 411,500 5,298
Morgan Stanley Emerging Markets
Fund, Inc. 381,900 6,015
Morgan Stanley Asia-Pacific
Fund, Inc. 1,608,500 21,514
Schroder Asian Growth Fund,
Inc. (a) 466,500 5,598
TCW/DW Emerging Markets
Opportunities Trust (SBI) 233,600 2,365
Templeton Dragon Fund, Inc. 735,500 9,837
Templeton Emerging Markets Fund,
Inc. 164,400 3,062
78,641
CREDIT & OTHER FINANCE - 2.7%
Acom Co. Ltd. 404,100 16,869
American Express Co. 2,380,300 98,485
Bank of Tokyo 1,983,000 34,712
Beneficial Corp. 383,800 17,895
Green Tree Financial Corp. 967,400 25,515
Greenpoint Financial Corp. 1,471,500 39,363
Household International, Inc. 2,200,000 130,075
Hong Leong Credit BHD 2,811,000 13,950
Hong Leong Finance Ltd. (For.
Reg.) 1,199,000 4,086
Industrial Finance Corp.
(For. Reg.) 3,201,200 10,866
PHH Corp. 138,600 6,480
Public Finance BHD (For. Reg.) 302,000 654
TA Enterprise BHD 7,017,000 8,512
407,462
FEDERAL SPONSORED CREDIT - 1.2%
Federal Home Loan Mortgage Corp. 630,000 52,605
Federal National Mortgage
Association 977,900 121,382
173,987
INSURANCE - 4.0%
Aetna Life & Casualty Co. 450,000 31,163
Allmerica Financial Corp. 795,700 21,484
Allstate Corp. 2,785,000 114,529
American Financial Group, Inc. 393,000 12,036
American International Group,
Inc. 601,400 55,630
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
American Reinsurance Corp. 100,000 $ 4,088
CIGNA Corp. 521,500 53,845
Exel Ltd. 50,000 3,050
Gainsco, Inc. 506,400 5,760
General Re Corp. 8,700 1,349
Gryphon Holdings, Inc. (a) 105,000 2,021
HealthCare COMPARE Corp. (a) 20,900 909
MGIC Investment Corp. 613,900 33,304
Mid Ocean Ltd. 625,000 23,203
Old Republic International
Corp. 274,500 9,745
Reliastar Financial Corp. 495,000 21,966
Renaissance RE Holdings (a) 75,000 2,278
SunAmerica, Inc. 600,000 28,500
Tokio Marine & Fire Insurance
Co. Ltd. (The) 2,385,000 31,139
Travelers, Inc. (The) 1,950,000 122,606
20th Century Industries (a) 325,100 6,461
US Facilities Corp. 205,200 4,386
589,452
SAVINGS & LOANS - 1.2%
Ahmanson (H.F.) & Co. 1,300,000 34,450
Charter One Financial Corp. 625,000 19,141
Coast Savings Financial,
Inc. (a) 31,400 1,087
Glendale Federal Bank Federal
Savings Bank (a)(d) 2,169,700 37,970
Golden West Financial Corp. 568,600 31,415
Great Western Financial Corp. 948,731 24,193
Long Island Bancorp, Inc. 1,003,700 26,473
Standard Financial, Inc. (a) 646,600 9,457
184,186
SECURITIES INDUSTRY - 1.0%
Alliance Capital Management LP 441,300 10,205
Bear Stearns Companies, Inc. 474,900 9,439
Edwards (A.G.), Inc. 326,700 7,800
Nikko Securities Co. Ltd. 3,554,000 45,714
Nomura Securities Co. Ltd. 2,839,000 61,776
Quick & Reilly Group, Inc.
(The) 170,200 3,489
Peregrine Investments Holdings
Ltd. 9,882,000 12,787
Schwab (Charles) Corp. 24,700 497
151,707
TOTAL FINANCE 2,586,374
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 4.3%
DRUGS & PHARMACEUTICALS - 1.0%
Alliance Pharmaceutical
Corp. (a) 1,108,800 $ 15,107
Amgen, Inc. (a) 149,200 8,859
Biogen, Inc. (a) 45,000 2,768
Cytel Corp. (a) 550,000 3,369
Genentech, Inc. special (a) 73,900 3,917
Gilead Sciences, Inc. (a) 500,000 16,000
Human Genome Sciences, Inc. (a) 150,000 5,738
Sepracor, Inc. (a)(d) 1,597,600 29,354
Sequus Pharmaceuticals,
Inc. (a) 697,800 9,944
Takeda Chemical Industries Ltd. 966,000 15,882
Thermotrex Corp. (a) 165,100 8,255
Watson Pharmaceuticals,
Inc. (a) 659,500 32,316
151,509
MEDICAL EQUIPMENT & SUPPLIES - 1.5%
AMSCO International, Inc. (a) 44,000 655
Becton, Dickinson & Co. 250,000 18,750
Boston Scientific Corp. (a) 230,000 11,270
Circon Corp. (a) 65,000 1,316
Coherent, Inc. (a) 47,800 1,936
Haemonetics Corp. (a) 222,700 3,953
Hoya Corp. 1,964,000 67,429
Medtronic, Inc. 825,000 46,097
Nellcor, Inc. (a) 700,000 40,600
Pall Corp. 577,700 15,526
Thermedics, Inc. (a) 286,500 7,950
U.S. Surgical Corp. 360,000 7,695
223,177
MEDICAL FACILITIES MANAGEMENT - 1.8%
ARV Assisted Living, Inc. (a) 195,600 2,298
Columbia/HCA Healthcare Corp. 1,285,000 65,214
Foundation Health Corp. (a) 675,000 29,025
HEALTHSOUTH Rehabilitation
Corp. (a) 3,300,000 96,112
Health Management Associates,
Inc. Class A (a) 1,155,500 30,187
Healthsource, Inc. (a) 115,100 4,144
Magellan Health Services, Inc. 125,400 3,010
PacifiCare Health Systems,
Inc. (a) 75,000 6,525
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - CONTINUED
Renal Treatment Centers,
Inc. (a) 72,300 $ 3,181
Safeguard Health Enterprises,
Inc. (a) 66,000 743
United HealthCare Corp. 507,300 33,228
273,667
TOTAL HEALTH 648,353
HOLDING COMPANIES - 0.3%
Astra International PT
(For. Reg.) 9,529,500 19,796
Berjaya Group BHD 7,469,000 4,824
Lonrho Ltd. Ord. 3,949,900 10,781
Malaysian Plantations
BHD (d) 14,016,000 15,150
50,551
INDUSTRIAL MACHINERY & EQUIPMENT - 5.1%
ELECTRICAL EQUIPMENT - 1.5%
Adflex Solutions (a)(d) 509,300 13,624
Adtran, Inc. (a) 407,800 22,149
Allen Group, Inc. (The) 184,600 4,130
AMETEK, Inc. 617,000 11,569
Avid Technology, Inc. (a) 980,000 18,620
BMC Industries, Inc. 658,300 15,305
Computer Products, Inc.
(a)(d) 1,450,300 16,678
Emerson Electric Co. 72,400 5,919
Mitsubishi Electric Co.
Ord. 3,740,000 26,874
Omron Corp. 2,991,000 68,845
Roper Industries, Inc. 30,000 1,103
United Engineers BHD 2,356,000 15,032
Westinghouse Electric Corp. 200,000 3,300
223,148
INDUSTRIAL MACHINERY & EQUIPMENT - 3.2%
AGCO Corp. 315,000 16,065
Case Corp. 883,400 40,416
Caterpillar, Inc. 2,498,100 146,765
Cincinnati Milacron, Inc. 220,300 5,783
Deere & Co. 2,365,800 83,394
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
Gleason Corp. (d) 283,500 $ 9,214
Goulds Pumps, Inc. 194,400 4,860
Harnischfeger Industries,
Inc. 1,000,000 33,250
Ingersoll-Rand Co. 1,935,700 67,991
MTS Systems Corp. 68,000 2,244
Parker-Hannifin Corp. 667,400 22,858
Regal-Beloit Corp. 134,700 2,930
Toro Co. 556,300 18,288
UCAR International, Inc. (a) 559,000 18,866
Van Der Horst Ltd. 2,573,000 13,008
485,932
POLLUTION CONTROL - 0.4%
Republic Industries, Inc. 120,000 4,335
Sanifill, Inc. (a) 312,100 10,416
Sevenson Environmental
Services, Inc. (d) 435,700 7,570
Thermo Instrument Systems,
Inc. (a) 112,625 3,041
United Waste Systems,
Inc. (a) 614,900 22,905
Zurn Industries, Inc. 590,400 12,620
60,887
TOTAL INDUSTRIAL MACHINERY &
EQUIPMENT 769,967
MEDIA & LEISURE - 2.9%
BROADCASTING - 0.9%
American Radio Systems Corp.
Class A (a)(d) 403,300 11,292
Citicasters, Inc. 560,950 13,252
Comcast Corp. Class A 318,700 5,617
EZ Communications, Inc.
Class A (a)(d) 576,700 10,381
Emmis Broadcasting Corp.
Class A (a)(d) 779,700 24,171
Grupo Televisa SA de CV
sponsored ADR 1,400,000 31,500
Heritage Media Corp.
Class A (a) 61,700 1,581
Home Shopping Network, Inc.
(a) 500,000 4,500
Lin Television Corp. (a) 452,100 13,451
Renaissance Communications
Corp. (a) 443,800 9,819
Sinclair Broadcast Group,
Inc. Class A (a) 309,700 5,342
130,906
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - 0.1%
Multi-Purpose Holdings
BHD 12,703,000 $ 18,612
LEISURE DURABLES & TOYS - 0.4%
Champion Enterprises,
Inc. (a) 765,000 23,619
Harley Davidson, Inc. 195,000 5,606
Hasbro, Inc. 185,000 5,735
Mattel, Inc. 545,000 16,759
Polaris Industries, Inc. 220,900 6,489
58,208
LODGING & GAMING - 0.6%
Extended Stay America,
Inc. (a) 300,000 8,250
Grand Palais Enterprises,
Inc. (a)(b)(d) 398,400 -
HFS, Inc. (a) 635,000 51,911
Hemmeter Enterprises, Inc.
(warrants) (a) 398,400 -
Players International,
Inc. (a) 586,850 6,272
Showboat, Inc. (d) 970,550 25,598
92,031
PUBLISHING - 0.5%
Belo (A.H.) Corp. Class A 50,000 1,738
K-III Communications Corp.
(a) 548,200 6,647
Knight-Ridder, Inc. 216,400 13,525
Meredith Corp. 230,000 9,631
New York Times Co. (The)
Class A 246,800 7,311
Scripps (E.W.) Co. Class A 262,800 10,348
Times Mirror Co. Class A 525,800 17,811
67,011
RESTAURANTS - 0.4%
Lone Star Steakhouse
Saloon (a) 458,300 17,587
Outback Steakhouse,
Inc. (a) 835,100 29,959
Starbucks Corp. (a) 836,600 17,569
65,115
TOTAL MEDIA & LEISURE 431,883
NONDURABLES - 1.7%
AGRICULTURE - 0.1%
Pioneer Hi-Bred
International, Inc. 355,000 19,747
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
BEVERAGES - 0.4%
Sapporo Brewery 435,000 $ 4,037
Kirin Brewery Co. Ltd. 2,265,000 26,724
Seagram Co. Ltd. 1,085,000 37,377
68,138
FOODS - 0.6%
Chiquita Brands
International, Inc. 445,400 6,124
Dole Food, Inc. 476,400 16,674
Flowers Industries, Inc. 250,000 3,031
Interstate Bakeries Corp. 36,000 806
Nabisco Holdings Class A 1,150,000 37,519
Ralston Purina Co. 352,800 22,006
86,160
HOUSEHOLD PRODUCTS - 0.3%
DSG International Ltd. 135,500 1,694
Estee Lauder Companies,
Inc. (a) 300,000 10,463
Metro Pacific, Inc.
Class B (d) 151,447,000 28,002
Paragon Trade Brands,
Inc. (a) 180,000 4,208
44,367
TOBACCO - 0.3%
Gudang Garam PT
Perusahaan 1,274,500 13,322
Sampoerna Hanjaya Mandala
(For. Reg.) 2,596,000 27,021
Souza Cruz Industria
Comerico 81,900 462
40,805
TOTAL NONDURABLES 259,217
PRECIOUS METALS - 1.1%
Agnico Eagle Mines Ltd. 227,300 2,853
Ashanti Goldfields GDR (c) 416,000 8,320
Barrick Gold Corp. 900,000 23,748
Euro-Nevada Mining Corp. 428,500 15,625
Firstmiss Gold, Inc. (a) 591,556 13,162
Franco Nevada Mining
Corp. 252,200 14,742
Kinross Gold Corp. (a) 3,550,000 27,646
Newmont Mining Corp. 955,900 43,254
Pegasus Gold, Inc. (a) 188,000 2,618
Western Mining Holdings
Ltd. 2,414,800 15,497
167,465
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - 3.3%
APPAREL STORES - 0.9%
Burton Group PLC Ord. 4,000,000 $ 8,343
Cato Corp. Class A (d) 1,984,200 15,378
Gap, Inc. 830,000 34,860
Goody's Family Clothing
(d) 1,559,500 13,646
Limited, Inc. (The) 1,650,000 28,669
Storehouse PLC 1,250,000 6,474
TJX Companies, Inc. 1,453,300 27,431
Wet Seal, Inc. Class A
(a) 170,000 1,148
135,949
DRUG STORES - 0.3%
Revco (D.S.), Inc. (a) 991,600 28,013
Rite Aid Corp. 520,500 17,827
45,840
GENERAL MERCHANDISE STORES - 0.1%
Kohls Corp. (a) 113,600 5,964
Stein Mart, Inc. (a) 467,000 5,137
Value City Department
Stores, Inc. (a) 452,100 3,052
14,153
GROCERY STORES - 1.2%
Loblaw Companies Ltd. 668,900 15,137
Provigo, Inc. (a) 3,083,500 18,645
Richfood Holdings, Inc.
Class A (d) 1,781,300 47,650
Rykoff-Sexton, Inc. (d) 1,105,375 19,344
Safeway, Inc. (a) 707,100 36,416
Smith's Food & Drug
Center, Inc. 217,000 5,479
Stop & Shop Companies,
Inc. (a) 941,000 21,761
Vons Companies, Inc. (a) 602,000 17,007
181,439
RETAIL & WHOLESALE, MISCELLANEOUS - 0.8%
Friedmans, Inc. Class A
(a) 234,000 4,505
Great Universal Stores
PLC Ord Class A 750,000 7,961
Home Depot, Inc. (The) 1,520,000 72,770
Lowe's Companies, Inc. 96,500 3,233
Sunglass Hut
International, Inc. (a) 727,700 17,280
Tiffany & Co., Inc. 86,800 4,373
U.S. Office Products
Co. (a) 8,000 182
110,304
TOTAL RETAIL & WHOLESALE 487,685
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - 0.5%
PRINTING - 0.1%
Alco Standard Corp. 180,000 $ 8,213
Devon Group, Inc. (a) 203,650 5,918
14,131
SERVICES - 0.4%
APAC Teleservices, Inc.
(a) 142,000 4,739
Block (H&R), Inc. 375,000 15,188
CDI Corp. (a) 24,300 437
HCIA, Inc. (a) 14,300 669
National Service
Industries, Inc. 152,800 4,947
Robert Half
International, Inc. (a) 309,000 12,939
Veterinary Centers of
America, Inc. (a) 197,800 3,338
Zebra Technologies
Corp. Class A (a) 300,600 10,220
52,477
TOTAL SERVICES 66,608
TECHNOLOGY - 11.9%
COMMUNICATIONS EQUIPMENT - 1.2%
ADC Telecommunications,
Inc. (a) 693,600 25,316
Aspect Telecommunications
Corp. (a) 193,200 6,472
Cisco Systems, Inc. (a) 655,700 48,932
DSP Communications, Inc.
(a) 223,600 9,755
Digital Link Corp. (a) 497,300 7,024
Dynatech Corp. (a)(d) 1,136,400 19,319
Ericsson (L.M.) Telephone
Co. Class B ADR 110,900 2,163
Global Village
Communication (a) 271,700 5,264
Inter-Tel, Inc. (a) 12,700 196
Jabil Circuit, Inc. (a) 560,800 6,309
Newbridge Networks Corp.
(a) 100,000 4,138
Octel Communications Corp.
(a) 740,000 23,865
U.S. Robotics Corp. 270,500 23,736
182,489
COMPUTER SERVICES & SOFTWARE - 2.3%
Acxiom Corp. (a) 655,000 17,931
Affiliated Computer
Services Class A (a) 25,000 938
American Management
Systems, Inc. (a) 442,000 13,260
Ascend Communications,
Inc. (a) 305,500 24,780
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
BDM International, Inc.
(a)(d) 232,500 $ 6,743
CUC International,
Inc. (a) 350,000 11,944
CACI International, Inc.
Class A (a)(d) 668,300 7,936
Ceridian Corp. (a) 1,829,541 75,469
CompuCom Systems, Inc.
(a) 585,000 5,558
Computer Sciences
Corp. (a) 217,800 15,300
CyCare Systems, Inc. (d) 422,200 10,819
General Motors Corp.
Class E 342,000 17,784
Hogan Systems, Inc. (a) 141,200 1,924
Ikos Systems, Inc. (a) 107,500 1,196
McAfee Associates, Inc.
(a) 212,500 9,323
Mentor Graphics Corp. (a) 911,900 16,642
Mercury Interactive Group
Corp. (a) 344,200 6,282
MetaTools, Inc. (a) 145,600 3,786
Oracle Systems Corp. (a) 1,374,800 58,257
Progress Software Corp.
(a)(d) 871,800 32,693
Project Software &
Development, Inc. (a) 87,200 3,041
Technology Solutions,
Inc. (a) 147,000 2,867
344,473
COMPUTERS & OFFICE EQUIPMENT - 5.5%
Adaptec, Inc. (a) 289,700 11,878
Bell & Howell Holdings
Co. (a) 277,000 7,756
Boca Research, Inc. (a) 106,600 2,825
Canon, Inc. 8,500,000 153,722
Compaq Computer Corp.
(a) 1,550,000 74,400
Conner Peripherals, Inc.
(a) 2,010,000 42,210
Dell Computer Corp. (a) 294,600 10,201
Diebold, Inc. 429,100 23,761
Digital Equipment Corp.
(a) 1,417,100 90,872
Discreet Logic, Inc. (a) 206,300 5,158
Filenet Corp. (a)(d) 951,000 44,697
Gateway 2000, Inc. (a) 1,134,800 27,803
Hewlett-Packard Co. 563,500 47,193
In Focus Systems, Inc. (a) 497,500 17,972
Intergraph Corp. (a) 283,200 4,460
Kronos, Inc. (a)(d) 450,100 21,380
MICROS Systems, Inc. (a) 385,000 18,961
SCI Systems, Inc. (a) 625,500 19,391
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Safeguard Scientifics,
Inc. (a) 112,900 $ 5,589
Seagate Technology (a) 1,100,000 52,250
Silicon Graphics, Inc. (a) 352,000 9,680
Sun Microsystems, Inc.
(a) 2,497,500 113,948
Symbol Technologies,
Inc. (a) 50,000 1,975
Western Digital Corp. (a) 602,700 10,773
Xerox Corp. 54,000 7,398
826,253
ELECTRONIC INSTRUMENTS - 0.2%
Measurex Corp. 339,100 9,580
Optical Coating
Laboratory, Inc. 210,000 2,336
Tektronix, Inc. 91,400 4,490
Varian Associates, Inc. 109,700 5,238
21,644
ELECTRONICS - 1.9%
AVX Corp. 194,600 5,157
Actel Corp. (a) 383,400 4,122
Analog Devices, Inc. (a) 107,900 3,817
Arrow Electronics, Inc.
(a) 169,500 7,310
Atmel Corp. (a) 1,156,400 25,872
Avnet, Inc. 155,700 6,968
Chips & Technologies,
Inc. (a) 110,000 990
Continental Circuits
Corp. (a) 182,600 2,967
Dovatron International,
Inc. (a) 157,000 5,299
Flextronics
International (a) 314,900 9,447
Hirose Electric Co. Ltd. 365,000 20,971
International Rectifier
Corp. 1,449,200 36,230
Kemet Corp. (a) 575,000 13,728
Kent Electronics Corp. (a) 135,900 7,933
Linear Technology Corp. 1,216,200 47,736
Maxim Integrated
Products, Inc. (a) 423,000 16,286
Rohm Co. Ltd. 600,000 33,830
SGS Thomson
Microelectronics NV (a) 50,000 2,013
Solectron Corp. (a) 275,000 12,134
Thomas & Betts Corp. 153,100 11,291
Truevision, Inc. (a)(d) 739,600 3,652
Xilinx, Inc. (a) 100,000 3,050
Zycon Corp. (a)(d) 356,700 4,013
284,816
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
PHOTOGRAPHIC EQUIPMENT - 0.8%
Eastman Kodak Co. 550,000 $ 36,850
Fuji Photo Film Co. Ltd. 2,221,000 64,009
Konica Corp. 765,000 5,534
Polaroid Corp. 291,900 13,829
120,222
TOTAL TECHNOLOGY 1,779,897
TRANSPORTATION - 3.7%
AIR TRANSPORTATION - 1.4%
Alaska Air Group, Inc. (a) 370,500 6,021
America West Airlines,
Inc. Class B (a) 11,200 190
Atlantic Southeast
Airlines, Inc. 256,400 5,513
Comair Holdings, Inc. 1,010,200 27,149
Delta Air Lines, Inc. 687,500 50,789
KLM Royal Dutch Airlines
Ord. 738,729 25,911
Northwest Airlines Corp.
Class A (a) 1,051,400 53,621
Southwest Airlines Co. 812,600 18,893
UAL Corp. (a) 133,100 23,758
211,845
RAILROADS - 2.3%
Bombardier, Inc. Class B 2,420,000 31,927
Burlington Northern
Santa Fe Corp. 1,948,300 151,968
CSX Corp. 2,060,000 93,988
Canadian Pacific Ltd.
Ord. 850,000 15,497
Wisconsin Central
Transportation Corp. (a) 786,300 51,699
345,079
TOTAL TRANSPORTATION 556,924
UTILITIES - 1.6%
CELLULAR - 0.3%
Advanced Information
Services (Loc. Reg.)(a) 894,000 15,829
Arch Communications Group,
Inc. (a) 295,428 7,090
BCE Mobile Communications,
Inc. (a) 1,000 34
Mobile Telecommunications
Technologies, Inc. (a) 800,200 17,104
Palmer Wireless, Inc. (a) 209,100 4,600
44,657
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.2%
Korea Electric Power Corp.
ADR 119,400 $ 3,194
Korea Electric Power
Corp. 696,400 29,889
33,083
TELEPHONE SERVICES - 1.1%
Frontier Corp. 457,200 13,716
Tel-Save Holdings, Inc.
(a)(d) 243,600 3,380
Telefonos de Mexico SA
sponsored ADR representing
shares
Ord. Class L 975,000 31,078
WorldCom, Inc. (a) 3,050,000 107,513
155,687
TOTAL UTILITIES 233,427
TOTAL COMMON STOCKS
(Cost $10,740,700) 12,409,949
CONVERTIBLE PREFERRED STOCKS - 0.0%
HEALTH - 0.0%
MEDICAL EQUIPMENT & SUPPLIES - 0.0%
U.S. Surgical Corp. $2.20 (c)
(Cost $7,265) 250,000 6,313
U.S. TREASURY OBLIGATIONS - 9.9%
PRINCIPAL
AMOUNT (000S)
U.S. Treasury Bills, yield at date of
purchase 5.22%,
3/21/96 $ 600,000 593,573
7 1/4%, 2/ 15/23 122,300 139,843
6 1/4%, 8/15/23 71,000 73,053
7 1/2%, 11/15/24 120,190 144,472
7 5/8%, 2/15/25 238,970 292,215
6 7/8%, 8/15/25 209,660 236,457
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,448,239) 1,479,613
REPURCHASE AGREEMENTS - 6.8%
MATURITY VALUE (NOTE 1)
AMOUNT (000S) (000S)
Investments in repurchase agreements,
(U.S. Treasury obligations), in a joint
trading account at 5.88% dated
12/29/95 due 1/2/96 $ 1,011,320 $ 1,010,660
PURCHASED OPTIONS - 0.3%
UNDERLYING FACE
EXPIRATION DATE/ AMOUNT AT VALUE
STRIKE PRICE (000S)
200,000 Citibank OTC Put
Options on Japanese Yen July 96/96.69 $ 186,823 12,500
195,000 Swiss Bank Corp. OTC Put
Options on Japanese Yen May 96/96.85 182,453 11,837
200,000 Swiss Bank Corp. OTC Put
Options on Japanese Yen May 96/97.59 188,561 11,180
270,000 Swiss Bank Corp. OTC Put
Options on Japanese Yen June 96/97.21 253,567 16,011
TOTAL PURCHASED OPTIONS
(Cost $45,739) 51,528
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $13,252,603) $ 14,958,063
LEGEND
(1.) Non-income producing
(2.) 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
(3.) 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 $22,152,000 or 0.1% of net
assets.
(4.) Affiliated company (see Note 8 of Notes to Financial Statements).
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 79.6%
Japan 9.4
Canada 3.3
Malaysia 1.8
United Kingdom 1.1
Thailand 1.0
Mexico 1.0
Others (individually less than 1%) 2.8
TOTAL 100.0%
INCOME TAX INFORMATION
At December 31, 1995, the aggregate cost of investment securities for
income tax purposes was $13,325,351,000. Net unrealized appreciation
aggregated $1,632,712,000, of which $1,812,906,000 related to appreciated
investment securities and $180,194,000 related to depreciated investment
securities.
The fund hereby designates $83,760,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER SHARE AMOUNTS) DECEMBER 31, 1995
ASSETS
Investment in securities, at value (including repurchase $ 14,958,063
agreements of $1,010,660) (cost $13,252,603) -
See accompanying schedule
Cash 1
Receivable for investments sold 354,624
Receivable for fund shares sold 53,249
Dividends receivable 11,629
Interest receivable 18,331
Other receivables 2,416
U.S. Treasury obligations, at value, held as collateral for 308,474
securities loaned
TOTAL ASSETS 15,706,787
LIABILITIES
Payable for investments purchased $ 414,588
Payable for fund shares redeemed 27,348
Distributions payable 19,325
Accrued management fee 8,708
Other payables and accrued expenses 6,297
Collateral on securities loaned, at value 372,659
TOTAL LIABILITIES 848,925
NET ASSETS $ 14,857,862
Net Assets consist of:
Paid in capital $ 12,311,806
Distributions in excess of net investment income (2,312)
Accumulated undistributed net realized gain (loss) on 842,911
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 1,705,457
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 390,758 shares outstanding $ 14,857,862
NET ASSET VALUE and redemption price per share $38.02
($14,857,862 (divided by) 390,758 shares)
Maximum offering price per share (100/97.00 of $38.02) $39.20
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED DECEMBER 31, 1995
INVESTMENT INCOME $ 112,568
Dividends (including $2,656 received from affiliated
issuers)
Interest (including income on securities loaned of 51,055
$2,783)
TOTAL INCOME 163,623
EXPENSES
Management fee $ 71,702
Basic fee
Performance adjustment 11,242
Transfer agent fees 27,673
Accounting and security lending fees 893
Non-interested trustees' compensation 88
Custodian fees and expenses 1,474
Registration fees 1,803
Audit 84
Legal 54
Interest 27
Miscellaneous 99
Total expenses before reductions 115,139
Expense reductions (2,416) 112,723
NET INVESTMENT INCOME 50,900
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain of 2,173,609
$26,349
on sales of investments in affiliated issuers)
Foreign currency transactions (19,893) 2,153,716
Change in net unrealized appreciation (depreciation) on:
Investment securities 1,255,450
Assets and liabilities in foreign currencies 5,726 1,261,176
NET GAIN (LOSS) 3,414,892
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 3,465,792
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,
1995 1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ 50,900 $ 46,141
Net investment income
Net realized gain (loss) 2,153,716 (223,809)
Change in net unrealized appreciation (depreciation) 1,261,176 72,425
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,465,792 (105,243)
FROM OPERATIONS
Distributions to shareholders (32,239) -
From net investment income
From net realized gain (1,121,208) (46,899)
TOTAL DISTRIBUTIONS (1,153,447) (46,899)
Share transactions 5,506,303 4,739,576
Net proceeds from sales of shares
Reinvestment of distributions 1,134,123 45,585
Cost of shares redeemed (2,789,091) (2,146,397)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,851,335 2,638,764
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 6,163,680 2,486,622
NET ASSETS
Beginning of period 8,694,182 6,207,560
End of period (including (over) under distributions of $ 14,857,862 $ 8,694,182
net investment income of $(2,312) and $16,028,
respectively)
OTHER INFORMATION
Shares
Sold 150,801 154,793
Issued in reinvestment of distributions 30,067 1,465
Redeemed (77,218) (70,436)
Net increase (decrease) 103,650 85,822
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,
1995 1994 1993 E 1992 C 1991
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 30.28 $ 30.84 $ 27.47 $ 25.60 $ 17.35
Income from Investment Operations
Net investment income .03 .06 .14 .32 D .22
Net realized and unrealized 10.93 (.40) 5.66 3.67 9.20
gain (loss)
Total from investment operations 10.96 (.34) 5.80 3.99 9.42
Less Distributions (.09) - (.11) (.20) (.11)
From net investment income
In excess of net investment - - (.07) - -
income
From net realized gain (3.13) (.22) (2.25) (1.92) (1.06)
Total distributions (3.22) (.22) (2.43) (2.12) (1.17)
Net asset value, end of period $ 38.02 $ 30.28 $ 30.84 $ 27.47 $ 25.60
TOTAL RETURN A, B 36.28% (1.12)% 21.43% 15.89% 54.92%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 14,858 $ 8,694 $ 6,208 $ 1,986 $ 1,000
(in millions)
Ratio of expenses to average .98% 1.03% 1.08% .87% .89%
net assets
Ratio of expenses to average net .96% 1.00% 1.06% .87% .89%
assets after expense reductions F F F
Ratio of net investment income to .44% .59% .46% 1.19% 1.01%
average net assets
Portfolio turnover rate 223% 235% 255% 297% 217%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 7 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.
E EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF
INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT
COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT
CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
F FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION
OF THE FUND'S EXPENSES (SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1995
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.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts and foreign currency options, 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. The
effects of changes in foreign currency exchange rates on investments in
securities 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 substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
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, 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.
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, which may result in distribution
reclassifications, are primarily due to differing treatments for litigation
proceeds, futures and options transactions, foreign currency transactions,
passive foreign investment companies (PFIC), market discount, partnerships,
non-taxable dividends and losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Distributions in excess of net investment
income and accumulated undistributed net realized gain (loss) on
investments and foreign currency transactions 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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements 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
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the stock market and to fluctuations in
currency values. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. The underlying face
amount at value is shown in the schedule of investments under the caption
"Purchased Options." This amount reflects each contract's exposure to the
underlying instrument at period end. Losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparties do not perform under the
contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $27,398,167,000 and $24,598,665,000, respectively, of which U.S.
government and government agency obligations aggregated $2,853,342,000 and
$1,702,748,000, 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
assets of all the mutual funds advised by FMR. The rates ranged from .2700%
to .5200% for the period. In the event that these rates were lower than the
contractual rates in effect during the period, FMR voluntarily implemented
the above rates, as they resulted in the same or a lower management fee.
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 .71% of average net assets after the performance
adjustment.
The Board of Trustees has approved a new group fee rate schedule with rates
ranging from .2500% to .5200%. Effective January 1, 1996, FMR voluntarily
agreed to implement this new group fee rate schedule as it results in the
same or a lower 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
$11,146,000 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 account fees and asset-based fees that
vary according to account size and type of account. FSC pays for
typesetting, printing and mailing of all shareholder reports, except proxy
statements. For the period the transfer agent fees were equivalent to an
annual rate of .24% of average net assets.
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 $10,350,000 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 $366,913,000 and
$372,659,000, respectively.
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balance during the period for which
the loan was outstanding amounted to $51,030,000. The weighted average
interest rate was 6.4375%.
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
$2,416,000 under this arrangement.
8. 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 during the period 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
Actel Corp. $ 16,785 $ 3,426 $ - $ -
Active Voice Corp. 1,464 2,690 - -
Adflex Solutions 4,944 1,751 - 13,624
American Radio Systems Corp.
Class A 3,318 - - 11,292
Apertus Technologies, Inc. 6,137 6,746 - -
Avid Technology, Inc. 12,660 22,990 - -
BDM International, Inc. 933 - - 6,743
Bio-Rad Laboratories, Inc. Class A 680 1,936 - -
CACI International, Inc. Class A 1,081 - - 7,936
C A E Industries Ltd. 548 - 162 42,523
Cambrex Corp. 3,477 705 96 21,345
Camco International, Inc. 15,628 280 428 68,033
Cato Corp. Class A 8,194 1,911 254 15,378
Champion Enterprises, Inc. 6,117 20,375 - -
Chaus (Bernard), Inc. 676 65 - -
Chesapeake Energy Corp. - 1,478 - -
Chips & Technologies, Inc. 8,237 8,429 - -
Computer Products, Inc. 4,996 1,074 - 16,678
Conmed Corp. - 271 - -
Credence Systems Corp. 594 2,316 - -
CyCare Systems, Inc. 5,735 9,760 - 10,819
Cyrk, Inc. 1,682 17,752 - -
Dynatech Corp. 3,633 - - 19,319
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Electronics For Imaging, Inc. $ 2,641 $ 9,145 $ - $ -
Emmis Broadcasting Corp. Class A 13,326 2,479 - 24,171
EZ Communications, Inc. Class A 1,086 2,360 - 10,381
Falcon Drilling, Inc. - - - 3,951
Filenet Corp. 21,687 6,267 - 44,697
Gleason Corp. - 3,403 97 9,214
Glendale Federal Bank Federal
Savings Bank 2,170 - - 37,970
Goody's Family Clothing 7,575 - 4 13,646
Grand Palais Enterprises, Inc. - - - -
Ground Round Restaurant, Inc. - 3,935 - -
Heritage Media Corp. Class A 1,842 11,260 - -
Hologic, Inc. - 118 - -
Imo Industries, Inc. - 5,014 - -
In Focus Systems, Inc. 23,310 16,956 - -
Inter-Tel, Inc. - 914 - -
Intersovl, Inc. 1,796 1,920 - -
ITI Technologies 1,086 4,912 - -
Kronos, Inc. 6,673 3,240 - 21,380
Long Island Bancorp, Inc. - 705 134 -
Malaysian Plantations BHD - - - 15,150
Medaphis Corp. 16,178 27,260 - -
Metro Pacific, Inc. Class B - - - 28,002
Microcom, Inc. 8,136 7,867 - -
Network Peripherals, Inc. - 6,620 - -
North American Biologicals, Inc. 2,003 4,499 - -
Perceptron, Inc. 3,927 6,071 - -
Progress Software Corp. 12,776 7,510 - 32,693
Proxima Corp. 118 7,291 - -
PSC, Inc. 684 2,715 - -
Puritan-Bennett Corp. 2,069 - - -
Quorum Health Group, Inc. - 1,078 - -
Richfood Holdings, Inc. Class A 10,399 2,188 179 47,650
Rohr Industries, Inc. - - - 13,127
Rykoff-Sexton, Inc. 8,837 3,480 65 19,344
Safeskin Corp. - 2,068 - -
Saga Communications, Inc. Class A 127 3,537 - -
Sanifill, Inc. 3,314 5,995 - -
Sepracor, Inc. 8,491 - - 29,354
Sevenson Environmental Services, Inc. 167 - 95 7,570
Shared Medical Systems Corp. 1,390 8,971 268 -
Showboat, Inc. 5,010 - 25 25,598
Silicon Valley Group, Inc. 3,388 8,820 - -
Sinclair Broadcasting Group, Inc.
Class A 1,353 1,441 - -
Smedvig AS - - - 31,822
Smith International, Inc. 24,603 1,280 - 90,405
Sonat Offshore Drilling, Inc. 8,277 3,793 90 69,210
Special Devices, Inc. 1,734 3,632 - 6,123
SPSS, Inc. 2,514 5,221 - -
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. $ 713 $ 2,132 $ - $ -
Sturm Ruger & Co., Inc. 806 10,176 613 -
Tech-Sym Corp. 5,560 834 - 14,564
Tel-Save Holdings, Inc. 861 - - 3,380
Today's Man, Inc. - 2,059 - -
Tongkah Holdings BHD - - - 16,312
Tracor, Inc. 3,133 4,763 - -
Truevision, Inc. - 1,200 - 3,652
United Waste Systems, Inc. 3,090 8,197 - -
Warnaco Group, Inc. Class A - 6,216 146 -
Western Waste Industries, Inc. 2,002 12,666 - -
Zycon Corp. - 68 - 4,013
Totals $ 332,371 $ 346,231 $ 2,656 $ 857,069
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, 1995, 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, 1995 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, 1995, 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.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 31, 1996
DISTRIBUTIONS
The Board of Trustees of Fidelity Contrafund voted to pay on February 5,
1996, to shareholders of record at the opening of business on February 2,
1996, a distribution of $2.00 derived from capital gains realized from
sales of portfolio securities.
A total of 2.28% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund notified shareholders in January 1996 of the applicable percentage
for use in preparing 1995 income tax returns.
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
6300 Canoga Avenue
Woodland Hills, 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
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 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
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, 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
2701 Drexel Drive
Houston, TX
1010 Lamar Street
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
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, 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
William J. Hayes, Vice President
Will Danoff, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export Fund
Fidelity Fifty
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock 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
