FIDELITY(REGISTERED TRADEMARK)
CONTRAFUND(REGISTERED TRADEMARK)
SEMIANNUAL REPORT
JUNE 30, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 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 28 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 32 Footnotes to the financial
statements.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND.
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 1-800-544-6666 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
In stark contrast to the final six months of 1999, most major equity
market indexes posted negative returns for the first half of 2000, due
mainly to a correction in the technology sector during the second
quarter. The majority of bond markets - with the notable exception of
high yield - fared better, as Treasuries and non-Treasuries alike
benefited as a haven from the volatility of stocks and riskier
investment alternatives.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY(REGISTERED -1.39% 10.46% 174.60% 585.65%
TRADEMARK)
CONTRAFUND(REGISTERED
TRADEMARK)
FIDELITY CONTRAFUND (INCL. -4.35% 7.15% 166.37% 565.08%
3.00% SALES CHARGE)
S&P 500 (registered trademark) -0.42% 7.25% 190.84% 414.73%
Growth Funds Average 3.04% 19.61% 173.82% 367.85%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Standard & Poor's 500SM Index - a market
capitalization-weighted index of common stocks. To measure how the
fund's performance stacked up against its peers, you can compare it to
the growth funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Inc. The past six
months average represents a peer group of 1,476 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges. Lipper has created new comparison
categories that group funds according to portfolio characteristics and
capitalization, as well as by capitalization only. These averages are
listed on page 5 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY CONTRAFUND 10.46% 22.39% 21.23%
FIDELITY CONTRAFUND (INCL. 7.15% 21.65% 20.86%
3.00% SALES CHARGE)
S&P 500 7.25% 23.80% 17.80%
Growth Funds Average 19.61% 21.69% 16.20%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER 10 YEARS
Contrafund S&P 500
00022 SP001
1990/06/30 9700.00 10000.00
1990/07/31 9518.59 9968.00
1990/08/31 8776.95 9066.89
1990/09/30 8408.80 8625.34
1990/10/31 8451.49 8588.25
1990/11/30 8953.03 9143.05
1990/12/31 9305.42 9398.14
1991/01/31 10211.83 9807.90
1991/02/28 10984.15 10509.16
1991/03/31 11627.75 10763.48
1991/04/30 11692.11 10789.32
1991/05/31 12437.62 11255.41
1991/06/30 11740.38 10739.92
1991/07/31 12571.70 11240.40
1991/08/31 13204.58 11506.79
1991/09/30 13242.12 11314.63
1991/10/31 13622.92 11466.25
1991/11/30 12904.23 11004.16
1991/12/31 14415.82 12263.03
1992/01/31 14826.90 12034.94
1992/02/29 15308.05 12191.39
1992/03/31 14892.60 11953.66
1992/04/30 15054.16 12305.10
1992/05/31 15215.72 12365.39
1992/06/30 14846.44 12181.15
1992/07/31 15221.49 12679.36
1992/08/31 14938.76 12419.43
1992/09/30 15192.64 12565.98
1992/10/31 15533.08 12609.96
1992/11/30 16283.19 13039.96
1992/12/31 16707.06 13200.35
1993/01/31 17236.18 13311.24
1993/02/28 17349.89 13492.27
1993/03/31 18179.00 13776.96
1993/04/30 18301.83 13443.55
1993/05/31 19026.54 13803.84
1993/06/30 19032.68 13843.87
1993/07/31 19241.49 13788.50
1993/08/31 20175.01 14311.08
1993/09/30 20218.00 14200.89
1993/10/31 20396.10 14494.84
1993/11/30 19628.41 14357.14
1993/12/31 20286.74 14530.86
1994/01/31 20924.82 15024.91
1994/02/28 20774.68 14617.74
1994/03/31 19953.24 13980.40
1994/04/30 20198.35 14159.35
1994/05/31 20085.73 14391.57
1994/06/30 19310.65 14038.97
1994/07/31 19701.50 14499.45
1994/08/31 20522.95 15093.93
1994/09/30 20251.34 14724.13
1994/10/31 20827.68 15055.42
1994/11/30 19880.37 14507.10
1994/12/31 20059.23 14722.24
1995/01/31 19734.62 15103.99
1995/02/28 20529.57 15692.59
1995/03/31 21278.15 16155.68
1995/04/30 22238.72 16631.47
1995/05/31 22775.31 17296.23
1995/06/30 24219.47 17698.02
1995/07/31 26074.35 18284.88
1995/08/31 26418.83 18330.78
1995/09/30 26902.42 19104.34
1995/10/31 26412.20 19036.14
1995/11/30 27107.78 19871.82
1995/12/31 27336.73 20254.55
1996/01/31 27955.08 20944.02
1996/02/29 28125.51 21138.17
1996/03/31 28906.14 21341.73
1996/04/30 29800.46 21656.31
1996/05/31 30050.56 22214.82
1996/06/30 29823.20 22299.46
1996/07/31 28428.67 21314.27
1996/08/31 29512.46 21763.79
1996/09/30 30725.09 22988.66
1996/10/31 31710.36 23622.68
1996/11/30 33552.04 25408.32
1996/12/31 33333.57 24904.98
1997/01/31 34630.54 26461.05
1997/02/28 33721.07 26668.50
1997/03/31 32844.67 25572.69
1997/04/30 33584.38 27099.38
1997/05/31 35602.50 28749.19
1997/06/30 37073.88 30037.16
1997/07/31 40217.64 32427.21
1997/08/31 38899.03 30610.64
1997/09/30 41496.05 32287.18
1997/10/31 40233.72 31208.79
1997/11/30 40169.40 32653.45
1997/12/31 40999.80 33214.11
1998/01/31 40885.50 33581.45
1998/02/28 43798.28 36003.35
1998/03/31 46034.87 37847.08
1998/04/30 46554.39 38227.82
1998/05/31 45568.18 37570.69
1998/06/30 48095.34 39096.81
1998/07/31 48245.03 38680.43
1998/08/31 41103.82 33088.01
1998/09/30 43595.76 35207.63
1998/10/31 45048.66 38071.42
1998/11/30 48060.12 40378.93
1998/12/31 53942.16 42705.56
1999/01/31 57066.07 44491.51
1999/02/28 55024.18 43108.71
1999/03/31 57064.95 44833.49
1999/04/30 58262.59 46569.89
1999/05/31 57055.37 45470.38
1999/06/30 60207.55 47993.98
1999/07/31 59268.60 46495.61
1999/08/31 57544.00 46265.46
1999/09/30 57400.29 44997.32
1999/10/31 59508.13 47844.75
1999/11/30 61922.56 48817.43
1999/12/31 67445.18 51692.78
2000/01/31 65096.62 49095.74
2000/02/29 68108.75 48166.35
2000/03/31 71195.70 52878.47
2000/04/30 66588.31 51287.35
2000/05/31 64031.21 50234.94
2000/06/30 66507.68 51473.23
IMATRL PRASUN SHR__CHT 20000630 20000720 120557 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Contrafund on June 30, 1990, and the current
3.00% sales charge was paid. As the chart shows, by June 30, 2000, the
value of the investment would have grown to $66,508 - a 565.08%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 would have
grown to $51,473 - a 414.73% increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
* THE LIPPER MULTI-CAP GROWTH FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER MULTI-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF JUNE 30, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
MULTI-CAP GROWTH FUNDS AVERAGE WERE, 6.54%, 45.82%, 225.31%, AND
476.09%, RESPECTIVELY; AND THE ONE YEAR, FIVE YEAR AND 10-YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 45.82%, 26.00%, AND 18.73%, RESPECTIVELY.
THE SIX MONTH, ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE TOTAL
RETURNS FOR THE MULTI-CAP SUPERGROUP AVERAGE WERE, 2.72%, 16.67%,
153.95%, AND 338.61%, RESPECTIVELY; AND THE ONE YEAR, FIVE YEAR AND 10
YEAR AVERAGE ANNUAL TOTAL RETURNS WERE 16.67%, 19.64%, AND 15.37%,
RESPECTIVELY.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Historically, presidential election
years have been kind to investors.
The stock market - as measured
by the Dow Jones Industrial Average
- posted positive returns in every
election year but three in the past
60 years. At the outset of 2000, it
appeared that tradition would
continue, as the Dow, the Standard &
Poor's 500SM Index and the
NASDAQ Composite Index reached
record highs in the year's first
quarter. Beginning in mid-March,
however, a major correction in the
technology sector, coupled with
rampant inflation fears and several
interest-rate hikes by the Federal
Reserve Board, sparked a dramatic
decline in the equity markets, leaving
all of the aforementioned indexes
with negative returns by mid-year.
For the six months ending June 30,
2000, the Dow was down 8.42%,
the S&P 500(registered trademark) declined 0.42% and
the tech-heavy NASDAQ index -
which in 1999 set a record for the
best one-year return of any major
U.S. market index - had a negative
2.44% return. Whether the equity
markets can rally during the second
half of the year remains to be seen,
but early indicators looked
promising. Technology took off
again in the final month of the
period, with the NASDAQ posting a
16.64% return in June. Also,
economic indicators suggested the
economy was finally slowing,
leaving many investors hopeful that
the Fed's series of rate hikes had
come to an end.
(photograph of Will Danoff)
An interview with
Will Danoff, Portfolio Manager
of Fidelity Contrafund
Q. HOW DID THE FUND PERFORM, WILL?
A. Performance was disappointing. For the six months that ended June
30, 2000, the fund returned -1.39%. This trailed both the Standard &
Poor's 500 Index, which returned -0.42% during the period, and the
growth funds average, which returned 3.04% according to Lipper Inc.
For the 12 months that ended June 30, 2000, the fund returned 10.46%,
while the S&P 500 and Lipper group returned 7.25% and 19.61%,
respectively.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE DURING THE SIX-MONTH
PERIOD?
A. The biggest drag on performance was the fund's low weighting in
health stocks relative to the S&P 500. I kept the fund's exposure to
the group at around half that of the index because the growth rates
for health stocks were slowing. Health stocks rebounded during the
period - returning around 25% - and the fund's low weighting in the
group ultimately hurt. Technology stocks, which accounted for around
one-third of the S&P 500 at the end of the period, also played a key
role. At the beginning of the period, I was concerned about high
valuations and excessive speculation throughout the sector. As a
result, I kept the fund underweighted relative to the index, and my
decision to do so hurt performance as technology stocks rebounded late
in the period. Finally, many of the fund's media and leisure
investments contributed positively.
Q. WHAT TRIGGERED THE REBOUND IN THE HEALTH SECTOR AND HOW DID YOU
REACT?
A. Stable growth, important news from the biotechnology industry,
continued consolidation and excitement over new products helped the
group perform well. Health stocks are considered to be stable growers
and, with increased concern over slowing corporate earnings growth,
many investors sought safety in this area. Also, the announcement that
scientists had de-coded the DNA sequencing of the human genome - or
genetic code - gave biotechnology stocks a huge lift. The
Pfizer/Warner-Lambert merger continued a five-year consolidation trend
among drug companies and produced strong results. In addition, several
new drugs - including Schering-Plough's Ezetimide, which works to
lower cholesterol levels - offered strong potential. By the end of the
period, I had increased the fund's stakes in Pfizer, Eli Lilly and
Schering-Plough, all of which had excellent product sales and
promising drug pipelines.
Q. WHAT WAS YOUR STRATEGY IN TERMS OF THE FUND'S TECHNOLOGY
INVESTMENTS?
A. I firmly believe that the Internet will be a major growth engine of
the world economy for years to come. Fortunately, because of my
concerns over high valuations for many dot-com stocks, the fund's
exposure to the technology meltdown we witnessed in April and May was
fairly small. Dot-com stocks had been a major driver behind the market
since mid-1998, but many of them were selling at valuations that
drastically exceeded their potential earnings growth rates. When
Internet stocks declined, the whole sector followed suit. At that
time, I upgraded the fund's technology holdings by adding to its
positions in leading technology names such as Cisco Systems and Nortel
Networks, as well as emerging-but-profitable leaders such as Brocade
Communications and Broadcom. These companies were well-positioned to
benefit from the continued buildout of the Internet infrastructure,
and performed particularly well when tech stocks rebounded in June.
The fund's investments in semiconductor names such as Micron
Technology and Texas Instruments also performed well. Despite
correctly anticipating the ups and downs of the technology sector
during the period, a higher overall weighting in technology stocks
would have benefited performance.
Q. THE FUND'S EMPHASIS ON MEDIA AND LEISURE STOCKS HELPED PERFORMANCE.
CAN YOU ELABORATE?
A. I viewed media stocks as beneficiaries of the Internet tidal wave,
because I felt the Internet would serve as a significant outlet for
media companies' content. Unlike many of the new dot-com companies,
these traditional media companies were producing positive earnings and
cash flow. By investing in these stocks, the fund participated in the
Internet investment theme, but with its risk limited by the real
earnings and cash flow from these companies. This strategy proved
wise, as the fund's investments in Time Warner and Viacom were
particularly lucrative during the period. Consolidation also was
prevalent throughout the media group, as America Online announced its
intent to acquire Time Warner in January, and the Viacom/CBS merger
produced better-than-expected results.
Q. DESPITE SEVERAL INTEREST-RATE INCREASES DURING THE PERIOD, YOU
ADDED TO THE FUND'S FINANCE-RELATED POSITIONS. WHY?
A. I felt that the six interest-rate hikes by the Federal Reserve
Board over the past year would slow the economy and keep inflation at
bay. Finance stocks typically perform well when inflation concerns are
tame. I added to the fund's positions in high-grade, non-bank finance
stocks that were producing above-average earnings growth and gaining
market share. These included stocks such as Citigroup, American
International Group and Berkshire Hathaway. Each of these companies
benefited from shrewd acquisitions and an upswing in the commercial
property casualty insurance market, where prices increased for the
first time in 14 years.
Q. THE FUND HAD AROUND 16% OF ITS INVESTMENTS IN FOREIGN STOCKS AT THE
END OF THE PERIOD. WHERE DID YOU FIND OPPORTUNITIES?
A. In many industries, some of the leading players are foreign
companies with good growth prospects, low costs and superior
technology. Nokia is a good example. The fund has owned a stake in the
Finnish cell phone manufacturer for seven years, and the company has
consistently executed better than its competitors in Asia, Europe and
the U.S. Another example was the fund's position in U.K.-based BP
Amoco, a leading integrated energy company. Generally, I choose
foreign stocks based on individual analysis rather than a top-down
assessment of which markets are performing well.
Q. WHICH STOCKS WERE DISAPPOINTING?
A. McDonald's was a disappointment. I was initially attracted to the
stock as a turnaround story, but the company's sales during the period
were weaker than I had hoped. Rising interest rates hurt the stock of
Home Depot, but the company continued to execute well and remained a
core holding. Microsoft performed poorly during the period, as the
ongoing federal government antitrust suit against the company and
slowing revenue growth hurt its stock.
Q. WHAT'S YOUR OUTLOOK?
A. The market remains extremely expensive. Price-to-earnings (P/E)
ratios - which tell investors how much they're paying for a company's
earnings power - have risen dramatically during the period and
currently stand at almost twice their 75-year average. Corporate
earnings thus far in 2000 have been very good - S&P earnings for the
first quarter of 2000 were up 29% - but they may slow considering the
number of Fed rate hikes we've seen over the past year. Inflation is
rising, but it's under control. Against this uncertain backdrop, I'll
try to concentrate on finding high-quality companies that are gaining
market share, have sustainable competitive advantages and are in
growing markets.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: to increase the value of
the fund's shares over the
long term by investing in
companies whose value is
not fully recognized by the
public
FUND NUMBER: 022
TRADING SYMBOL: FCNTX
START DATE: May 17, 1967
SIZE: as of June 30, 2000,
more than $44.3 billion
MANAGER: Will Danoff,
since 1990; manager, VIP II:
Contrafund, since 1995;
Fidelity Select Retailing
Portfolio, 1986-1989;
joined Fidelity in 1986
WILL DANOFF TALKS ABOUT
TECHNOLOGY AND THE NEXT
WAVE OF THE INTERNET:
"In hindsight, I was much too
cautious on the technology sector
during the period. While the
first-generation Internet companies
suffered during the downturn, the
Internet remains an extremely
powerful trend that will continue to
influence both businesses and
consumers for years to come.
"Nortel Networks, for example,
estimates that the demand for
bandwidth - driven by business and
consumer usage of the Internet -
will grow by more than 100-fold over
the next five years! This demand
could produce strong earnings growth
opportunities for well-positioned
networking companies. Data storage
companies could also benefit, and the
Internet is stimulating robust demand
for servers and semiconductors.
"The other mega-trend in technology
is wireless. Global wireless subscribers
continue to grow by 35% to 40%
annually, and this could increase as
more people begin to use their cell
phones to access the Internet. This
trend could mean good things for
companies that manufacture cellular
phones, as well as companies that
make semiconductors for the
phones.
"Thus, while the technology sector is
both pricey and volatile, I'm
attempting to build positions in
companies that are gaining market
share and are at the forefront of
these trends."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF JUNE 30,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Cisco Systems, Inc. 4.2 2.5
Viacom, Inc. Class B (non-vtg.) 4.2 3.1
McDonald's Corp. 2.9 3.6
BP Amoco PLC sponsored ADR 1.9 1.6
Exxon Mobil Corp. 1.8 1.8
Citigroup, Inc. 1.7 0.7
American International Group, 1.5 0.8
Inc.
Pfizer, Inc. 1.5 0.5
Vodafone AirTouch PLC 1.3 2.0
sponsored ADR
CVS Corp. 1.3 1.5
22.3 18.1
TOP FIVE MARKET SECTORS AS OF
JUNE 30, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 24.2 24.6
Media & Leisure 13.0 15.7
Finance 12.1 9.5
Utilities 9.7 14.0
Energy 7.2 5.0
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF JUNE 30, 2000 * AS OF DECEMBER 31, 1999 **
Stocks 90.5% Stocks 94.8%
Bonds 2.5% Bonds 2.4%
Short-Term Investments and Short-Term Investments and
Net Other Assets 7.0% Net Other Assets 2.8%
* FOREIGN INVESTMENTS 15.8% ** FOREIGN INVESTMENTS 17.0%
Row: 1, Col: 1, Value: 90.5 Row: 1, Col: 1, Value: 94.8
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 2.5 Row: 1, Col: 4, Value: 2.4
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 7.0 Row: 1, Col: 8, Value: 2.8
</TABLE>
INVESTMENTS JUNE 30, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 90.5%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.2%
AEROSPACE & DEFENSE - 0.1%
Boeing Co. 96,620 $ 4,040
Bombardier, Inc. Class B 1,062,100 28,839
(non-vtg.)
Northrop Grumman Corp. 81,400 5,393
United Technologies Corp. 94,100 5,540
43,812
SHIP BUILDING & REPAIR - 0.1%
General Dynamics Corp. 802,100 41,910
TOTAL AEROSPACE & DEFENSE 85,722
BASIC INDUSTRIES - 0.8%
CHEMICALS & PLASTICS - 0.6%
Avery Dennison Corp. 1,432,700 96,170
Pharmacia Corp. 1,626,500 84,070
Sealed Air Corp. (a) 183,100 9,590
Spartech Corp. 749,400 20,234
Valspar Corp. 1,740,600 58,745
268,809
METALS & MINING - 0.2%
Alcoa, Inc. 1,084,000 31,436
Broken Hill Proprietary Co. 4,337,426 51,129
Ltd.
82,565
PAPER & FOREST PRODUCTS - 0.0%
Bowater, Inc. 28,500 1,258
TOTAL BASIC INDUSTRIES 352,632
CONSTRUCTION & REAL ESTATE -
0.5%
BUILDING MATERIALS - 0.1%
Fastenal Co. 437,500 22,148
Fortune Brands, Inc. 1,019,200 23,505
45,653
CONSTRUCTION - 0.1%
Jacobs Engineering Group, 1,251,200 40,899
Inc. (a)
ENGINEERING - 0.0%
360networks, Inc. (sub. vtg.) 957,300 14,678
Tetra Tech, Inc. (a) 40,900 936
15,614
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
REAL ESTATE - 0.0%
Grand Palais Management Co. 398,400 $ 0
LP (e)
REAL ESTATE INVESTMENT TRUSTS
- 0.3%
Equity Office Properties Trust 1,931,800 53,245
Equity Residential Properties 495,900 22,811
Trust (SBI)
Pinnacle Holdings, Inc. (a) 436,500 23,571
Spieker Properties, Inc. 200,800 9,237
108,864
TOTAL CONSTRUCTION & REAL 211,030
ESTATE
DURABLES - 3.0%
AUTOS, TIRES, & ACCESSORIES -
1.8%
Danaher Corp. 3,713,820 183,602
Gentex Corp. (a) 743,800 18,688
Goodyear Tire & Rubber Co. 98,800 1,976
Lear Corp. (a) 821,800 16,436
Midas, Inc. (c) 1,305,300 26,106
SPX Corp. (c) 3,118,147 377,101
Toyota Motor Corp. 1,314,000 59,862
TRW, Inc. 2,661,700 115,451
799,222
CONSUMER DURABLES - 0.0%
Boyds Collection, Ltd. (a) 1,774,800 15,086
CONSUMER ELECTRONICS - 1.1%
General Motors Corp. Class H 1,028,100 90,216
(a)
Harman International 1,717,400 104,761
Industries, Inc. (c)
Pioneer Corp. 1,745,000 67,976
Sony Corp. 2,204,900 207,950
470,903
HOME FURNISHINGS - 0.0%
Herman Miller, Inc. 374,100 9,680
The Bombay Company, Inc. 1,899,100 5,579
(a)(c)
15,259
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 0.1%
Timberland Co. Class A (a) 33,700 $ 2,386
Warnaco Group, Inc. Class A 2,480,500 19,224
21,610
TOTAL DURABLES 1,322,080
ENERGY - 7.2%
ENERGY SERVICES - 0.5%
Baker Hughes, Inc. 1,924,600 61,587
ENSCO International, Inc. 467,200 16,732
Global Marine, Inc. 516,000 14,545
Hanover Compressor Co. (a) 987,700 37,533
Schlumberger Ltd. (NY Shares) 1,284,300 95,841
226,238
OIL & GAS - 6.7%
Alberta Energy Co. Ltd. 4,615,200 186,416
Apache Corp. 1,752,400 103,063
BP Amoco PLC sponsored ADR 15,062,666 851,982
Canada Occidental Petroleum 2,439,200 66,149
Ltd.
Canadian Natural Resources 742,870 21,576
Ltd. (a)
Chevron Corp. 1,759,600 149,236
Cooper Cameron Corp. (a) 99,800 6,587
Devon Energy Corp. 161,100 9,052
EOG Resources, Inc. 1,819,700 60,960
Exxon Mobil Corp. 10,031,582 787,479
Newfield Exploration Co. (a) 750,000 29,344
Royal Dutch Petroleum Co. (NY 2,530,200 155,765
Shares)
Santa Fe Snyder Corp. (a) 1,127,700 12,828
Suncor Energy, Inc. 6,424,220 148,401
Talisman Energy, Inc. (a) 813,700 26,958
Tosco Corp. 2,803,700 79,380
TotalFinaElf SA sponsored ADR 2,429,965 186,652
Vastar Resources, Inc. 1,124,800 92,374
2,974,202
TOTAL ENERGY 3,200,440
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - 12.1%
BANKS - 1.6%
Bank of New York Co., Inc. 2,134,600 $ 99,259
Bank One Corp. 6,786,400 180,264
Commerce Bancorp, Inc. 140,800 6,477
Fifth Third Bancorp 1,080,800 68,361
Firstar Corp. 3,429,600 72,236
M&T Bank Corp. 143,130 64,409
Mellon Financial Corp. 610,800 22,256
Northern Trust Corp. 1,081,400 70,359
PNC Financial Services Group, 327,200 15,338
Inc.
Royal Bank of Scotland Group 3,034,500 50,913
PLC
Wells Fargo & Co. 1,015,350 39,345
689,217
CREDIT & OTHER FINANCE - 3.0%
American Express Co. 4,200,300 218,941
Associates First Capital 11,865,972 264,760
Corp. Class A
Citigroup, Inc. 12,257,200 738,496
Concord EFS, Inc. (a) 630,500 16,393
Household International, Inc. 2,528,110 105,075
MBNA Corp. 401,000 10,877
1,354,542
FEDERAL SPONSORED CREDIT - 0.8%
Fannie Mae 6,860,670 358,041
Freddie Mac 284,330 11,515
369,556
INSURANCE - 4.5%
Ace Ltd. 754,800 21,134
AFLAC, Inc. 910,900 41,844
American International Group, 5,831,637 685,217
Inc.
Berkshire Hathaway, Inc. 7,250 390,050
Class A (a)
Canada Life Financial Corp. 913,500 18,572
CIGNA Corp. 824,100 77,053
Everest Re Group Ltd. 361,400 11,881
Hartford Financial Services 1,572,200 87,945
Group, Inc.
John Hancock Financial 163,400 3,871
Services, Inc.
Marsh & McLennan Companies, 763,225 79,709
Inc.
MetLife, Inc. 14,895,300 313,732
Mutual Risk Management Ltd. 119,700 2,072
PartnerRe Ltd. 651,500 23,088
PMI Group, Inc. 417,500 19,831
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
RenaissanceRe Holdings Ltd. 642,200 $ 27,976
The Chubb Corp. 1,166,000 71,709
The St. Paul Companies, Inc. 652,000 22,250
XL Capital Ltd. Class A 2,071,100 112,098
2,010,032
SAVINGS & LOANS - 0.6%
Golden West Financial Corp. 5,864,600 239,349
TCF Financial Corp. 243,400 6,252
245,601
SECURITIES INDUSTRY - 1.6%
AXA Financial, Inc. 90,900 3,091
Daiwa Securities Group, Inc. 22,333,000 294,909
Morgan Stanley Dean Witter & 551,000 45,871
Co.
Nikko Securities Co. Ltd. 16,113,000 159,580
Nomura Securities Co. Ltd. 8,824,000 215,981
719,432
TOTAL FINANCE 5,388,380
HEALTH - 7.1%
DRUGS & PHARMACEUTICALS - 5.0%
Accredo Health, Inc. (a) 28,500 985
Allergan, Inc. 324,600 24,183
ALZA Corp. (a) 81,300 4,807
Amgen, Inc. 354,000 24,869
Cephalon, Inc. (a) 180,600 10,813
COR Therapeutics, Inc. (a) 81,400 6,944
Elan Corp. PLC sponsored ADR 2,238,000 108,403
(a)
Eli Lilly & Co. 4,157,200 415,200
Forest Laboratories, Inc. (a) 328,300 33,158
Genentech, Inc. 1,488,820 256,077
Gilead Sciences, Inc. (a) 162,800 11,579
Immunex Corp. (a) 6,783,700 335,369
Medimmune, Inc. (a) 325,300 24,072
Pfizer, Inc. 13,759,725 660,467
Schering-Plough Corp. 6,238,900 315,064
2,231,990
MEDICAL EQUIPMENT & SUPPLIES
- 1.5%
Boston Scientific Corp. (a) 578,700 12,695
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- CONTINUED
Cardinal Health, Inc. 934,400 $ 69,146
DENTSPLY International, Inc. 395,300 12,180
Edwards Lifesciences Corp. (a) 20,400 377
Guidant Corp. (a) 164,562 8,146
Medtronic, Inc. 4,131,100 205,780
Millipore Corp. 561,100 42,293
MiniMed, Inc. (a) 422,200 49,820
Novoste Corp. (a)(c) 235,900 14,390
Novoste Corp. (a)(d)(c) 760,500 46,391
ORATEC Interventions, Inc. 295,900 9,876
Patterson Dental Co. (a)(c) 2,045,400 104,315
Priority Healthcare Corp. (a) 31,100 2,311
Smith & Nephew PLC 7,141,740 26,435
Varian Medical Systems, Inc. 1,855,200 72,585
(a)(c)
676,740
MEDICAL FACILITIES MANAGEMENT
- 0.6%
Chronimed, Inc. 8,900 66
HCA - The Healthcare Co. 1,005,040 30,528
Health Management Associates, 520,200 6,795
Inc. Class A (a)
Oxford Health Plans, Inc. (a) 898,400 21,393
UnitedHealth Group, Inc. 2,139,900 183,496
Universal Health Services, 177,900 11,652
Inc. Class B (a)
253,930
TOTAL HEALTH 3,162,660
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.5%
ELECTRICAL EQUIPMENT - 1.3%
Alcatel SA sponsored ADR 2,738,000 182,077
Allen Telecom, Inc. (a)(c) 2,273,000 40,204
American Power Conversion 73,300 2,992
Corp. (a)
General Electric Co. 1,649,200 87,408
Hutchison Whampoa Ltd. 4,851,100 60,984
Koninklijke Philips 1,825,600 86,716
Electronics NV (NY Shares)
Littelfuse, Inc. (a) 16,300 799
Loral Space & Communications 3,745,567 25,985
Ltd. (a)
Pinnacle Systems (a) 1,893,500 42,574
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
ELECTRICAL EQUIPMENT -
CONTINUED
Rayovac Corp. (a)(c) 2,553,100 $ 57,126
Roper Industries, Inc. 535,300 13,717
600,582
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Mettler-Toledo International, 679,800 27,192
Inc. (a)
MSC Industrial Direct, Inc. 253,300 5,303
(a)
Sandvik AB 273,900 5,765
38,260
POLLUTION CONTROL - 0.1%
Waste Management, Inc. 1,684,500 32,006
TOTAL INDUSTRIAL MACHINERY & 670,848
EQUIPMENT
MEDIA & LEISURE - 13.0%
BROADCASTING - 3.3%
American Tower Corp. Class A 11,004,500 458,750
(a)(c)
AT&T Corp. - Liberty Media 6,514,984 157,988
Group Class A (a)
Carlton Communications PLC 7,014,034 90,442
Clear Channel Communications, 652,100 48,908
Inc. (a)
Cox Radio, Inc. Class A (a) 833,500 23,338
Grupo Televisa SA de CV 660,800 45,554
sponsored GDR (a)
Infinity Broadcasting Corp. 12,486,401 454,973
Class A (a)
Time Warner, Inc. 1,766,677 134,267
Westwood One, Inc. 1,157,600 39,503
1,453,723
ENTERTAINMENT - 5.5%
Fox Entertainment Group, Inc. 2,302,400 69,935
Class A (a)
MGM Grand, Inc. 1,366,100 43,886
Park Place Entertainment 3,973,900 48,432
Corp. (a)
Premier Parks, Inc. (a) 2,620,200 59,610
Viacom, Inc.:
Class A (a) 2,062,900 141,051
Class B (non-vtg.) (a) 27,070,304 1,845,856
Walt Disney Co. 5,810,380 225,515
2,434,285
LEISURE DURABLES & TOYS - 0.4%
Callaway Golf Co. 2,705,000 44,125
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS -
CONTINUED
Harley-Davidson, Inc. 3,422,720 $ 131,775
Mattel, Inc. 2,618,300 34,529
210,429
LODGING & GAMING - 0.3%
Aztar Corp. (a) 250,600 3,884
Starwood Hotels & Resorts 3,999,700 130,240
Worldwide, Inc. unit
134,124
PUBLISHING - 0.5%
Harte Hanks Communications, 84,150 2,104
Inc.
McGraw-Hill Companies, Inc. 1,232,500 66,555
PRIMEDIA, Inc. (a) 1,195,200 27,191
Reader's Digest Association, 2,884,460 114,657
Inc. Class A (non-vtg.)
United News & Media PLC 409,100 5,896
216,403
RESTAURANTS - 3.0%
CEC Entertainment, Inc. (a) 851,400 21,817
McDonald's Corp. 39,652,400 1,306,051
Outback Steakhouse, Inc. (a) 210,050 6,144
Pizzaexpress PLC 94,300 903
1,334,915
TOTAL MEDIA & LEISURE 5,783,879
NONDURABLES - 3.0%
FOODS - 1.9%
Booker PLC (a) 9,518,454 20,901
Earthgrains Co. (c) 3,618,100 70,327
General Mills, Inc. 1,168,200 44,684
Keebler Foods Co. 3,789,200 140,674
Nestle SA (Reg.) 37,100 74,168
PepsiCo, Inc. 2,396,300 106,486
Quaker Oats Co. 3,681,800 276,595
Sysco Corp. 1,698,400 71,545
Wm. Wrigley Jr. Co. 354,000 28,386
833,766
HOUSEHOLD PRODUCTS - 1.1%
Avon Products, Inc. 4,910,700 218,526
Colgate-Palmolive Co. 4,034,200 241,548
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Estee Lauder Companies, Inc. 801,600 $ 39,629
Yankee Candle Co., Inc. 278,100 6,014
505,717
TOTAL NONDURABLES 1,339,483
PRECIOUS METALS - 0.9%
Barrick Gold Corp. 9,362,960 169,172
Franco Nevada Mining Corp. 6,521,943 75,329
Ltd.
Gold Fields Ltd. 4,067,400 15,958
Newmont Mining Corp. 3,408,300 73,704
Placer Dome, Inc. 7,316,285 68,691
402,854
RETAIL & WHOLESALE - 4.8%
APPAREL STORES - 0.8%
Charming Shoppes, Inc. (a)(c) 10,620,500 54,098
Claire's Stores, Inc. 1,347,200 25,934
Talbots, Inc. 1,484,400 81,549
The Limited, Inc. 3,375,400 72,993
TJX Companies, Inc. 7,589,900 142,311
Venator Group, Inc. (a) 10,200 105
376,990
DRUG STORES - 1.7%
CVS Corp. 14,258,266 570,331
Rite Aid Corp. 764,200 5,015
Walgreen Co. 4,896,200 157,596
732,942
GENERAL MERCHANDISE STORES -
0.5%
Costco Wholesale Corp. (a) 1,842,900 60,816
Dollar Tree Stores, Inc. (a) 753,350 29,804
JCPenney Co., Inc. 2,848,000 52,510
Kohls Corp. (a) 1,004,700 55,886
Michaels Stores, Inc. (a) 325,700 14,921
Stein Mart, Inc. (a) 1,057,300 10,837
Tuesday Morning Corp. (a) 1,080,500 11,345
236,119
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 0.2%
Fleming Companies, Inc. (c) 2,416,431 $ 31,565
Iceland Group PLC 2,061,333 8,717
Krispy Kreme Doughnuts, Inc. 29,500 2,168
Safeway PLC 6,959,886 27,134
69,584
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.6%
Bed Bath & Beyond, Inc. (a) 3,686,900 133,650
Best Buy Co., Inc. (a) 1,646,900 104,166
Good Guys, Inc. (a) 139,000 504
Guitar Center, Inc. (a) 85,800 901
Home Depot, Inc. 7,197,350 359,418
Staples, Inc. (a) 6,116,650 94,043
692,682
TOTAL RETAIL & WHOLESALE 2,108,317
SERVICES - 1.0%
ADVERTISING - 0.5%
Getty Images, Inc. (a) 207,500 7,690
Interpublic Group of 262,800 11,300
Companies, Inc.
Omnicom Group, Inc. 846,660 75,406
TMP Worldwide, Inc. (a) 35,900 2,650
Young & Rubicam, Inc. 2,208,100 126,276
223,322
EDUCATIONAL SERVICES - 0.0%
Apollo Group, Inc. Class A (a) 314,100 8,795
PRINTING - 0.1%
Reynolds & Reynolds Co. Class 592,100 10,806
A
Valassis Communications, Inc. 143,100 5,456
(a)
16,262
SERVICES - 0.4%
Gartner Group, Inc. Class B 190,862 1,885
(a)
Learning Tree International, 12,200 747
Inc. (a)
NOVA Corp. (a) 1,361,800 38,045
Robert Half International, 578,200 16,479
Inc. (a)
Storagenetworks, Inc. 23,600 2,130
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
SERVICES - CONTINUED
True North Communications 256,900 $ 11,304
Viad Corp. 4,168,000 113,578
184,168
TOTAL SERVICES 432,547
TECHNOLOGY - 24.2%
COMMUNICATIONS EQUIPMENT - 7.4%
ADC Telecommunications, Inc. 2,662,100 223,284
(a)
Advanced Fibre 107,600 4,876
Communications, Inc. (a)
Andrew Corp. (a) 489,000 16,412
Centillium Communications, 62,700 4,326
Inc. (a)
Ciena Corp. (a) 163,000 27,170
Cisco Systems, Inc. (a) 29,576,562 1,879,957
Comverse Technology, Inc. (a) 180,800 16,814
Corning, Inc. 1,188,300 320,692
Jabil Circuit, Inc. (a) 323,700 16,064
NEC Corp. 904,000 28,394
Nokia AB sponsored ADR 4,724,600 235,935
Nortel Networks Corp. 5,947,880 412,595
Plantronics, Inc. (a) 246,600 28,482
Tellabs, Inc. (a) 1,031,400 70,586
3,285,587
COMPUTER SERVICES & SOFTWARE
- 5.1%
Adobe Systems, Inc. 4,377,800 569,114
Amdocs Ltd. (a) 807,000 61,937
Art Technology Group, Inc. 68,200 6,884
Automatic Data Processing, 6,446,800 345,307
Inc.
BEA Systems, Inc. (a) 70,300 3,475
Black Box Corp. (a) 885,500 70,107
BroadVision, Inc. (a) 775,900 39,425
Ceridian Corp. (a) 478,000 11,502
Computer Sciences Corp. (a) 908,800 67,876
DST Systems, Inc. (a) 588,700 44,815
E.piphany, Inc. 162,800 17,450
Electronic Data Systems Corp. 2,331,400 96,170
Exodus Communications, Inc. 472,100 21,746
(a)
Extensity, Inc. 21,700 743
Fiserv, Inc. (a) 438,300 18,956
Foundry Networks, Inc. 394,800 43,428
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- CONTINUED
Go2Net, Inc. (a) 651,900 $ 32,799
Infonet Services Corp. Class B 1,609,490 19,213
Macromedia, Inc. (a) 916,600 88,624
Mentor Graphics Corp. (a) 1,006,500 20,004
Micromuse, Inc. (a) 183,000 30,284
Microsoft Corp. (a) 277,830 22,226
National Computer Systems, 602,000 29,649
Inc.
National Instrument Corp. (a) 128,300 5,597
Nuance Communications, Inc. 190,300 15,854
Oracle Corp. (a) 1,301,100 109,374
Paychex, Inc. 276,900 11,630
Polycom, Inc. (a) 552,660 52,002
Rational Software Corp. (a) 1,824,400 169,555
SEI Investments Co. 203,400 8,098
Siebel Systems, Inc. (a) 327,300 53,534
Software.com, Inc. 211,600 27,482
The Bisys Group (a) 258,700 15,910
Unisys Corp. (a) 7,947,541 115,736
VeriSign, Inc. (a) 63,500 11,208
Vignette Corp. (a) 72,700 3,782
webMethods, Inc. 57,600 9,054
2,270,550
COMPUTERS & OFFICE EQUIPMENT
- 4.2%
Apple Computer, Inc. (a) 879,700 46,074
Brocade Communications 2,243,500 411,647
Systems, Inc. (a)
Canon, Inc. 1,749,000 88,106
CDW Computer Centers, Inc. (a) 265,700 16,606
Copper Mountain Networks, 288,800 25,451
Inc.
Dell Computer Corp. (a) 1,886,100 93,008
Diebold, Inc. 1,490,000 41,534
EMC Corp. (a) 1,077,000 82,862
Extreme Networks, Inc. (a) 97,700 10,307
Handspring, Inc. 55,300 1,493
Hewlett-Packard Co. 3,213,200 401,248
Insight Enterprises, Inc. (a) 474,300 28,132
Juniper Networks, Inc. 345,400 50,277
Network Appliance, Inc. (a) 152,400 12,268
Oak Technology, Inc. (a) 714,100 15,398
Palm, Inc. 1,381,100 46,094
RSA Security, Inc. (a) 367,200 25,429
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- CONTINUED
Sun Microsystems, Inc. (a) 3,671,600 $ 333,886
Symbol Technologies, Inc. 2,310,987 124,793
1,854,613
ELECTRONIC INSTRUMENTS - 2.0%
Agilent Technologies, Inc. 4,359,180 321,490
LAM Research Corp. (a) 700 26
Lernout & Hauspie Speech 575,400 25,354
Products NV (a)
Novellus Systems, Inc. (a) 1,208,300 68,344
PerkinElmer, Inc. 220,500 14,581
Tektronix, Inc. 357,500 26,455
Teradyne, Inc. (a) 646,000 47,481
Thermo Electron Corp. (a) 5,259,768 110,784
Waters Corp. (a) 2,265,200 282,725
897,240
ELECTRONICS - 5.5%
Altera Corp. (a) 658,600 67,136
Amphenol Corp. Class A (a) 272,300 18,023
Analog Devices, Inc. (a) 967,600 73,538
Arrow Electronics, Inc. (a) 233,200 7,229
Broadcom Corp. Class A (a) 412,800 90,377
Conexant Systems, Inc. (a) 299,400 14,558
Fairchild Semiconductor 280,100 11,344
International, Inc. Class A
Flextronics International 776,000 53,302
Ltd. (a)
Infineon Technologies AG 2,448,700 194,059
sponsored ADR (a)
Intel Corp. 114,400 15,294
Intersil Holding Corp. Class A 609,300 32,940
JDS Uniphase Corp. (a) 224,100 26,864
Kyocera Corp. 1,001,700 172,105
Linear Technology Corp. 1,497,900 95,772
LSI Logic Corp. (a) 656,200 35,517
Merix Corp. (a) 90,700 4,263
Micron Technology, Inc. (a) 6,344,700 558,730
Molex, Inc. Class A 629,300 22,026
National Semiconductor Corp. 203,900 11,571
(a)
NVIDIA Corp. (a) 1,212,800 77,089
Power-One, Inc. (a) 199,300 22,708
Sanmina Corp. (a) 563,000 48,137
STMicroelectronics NV (NY 1,030,400 66,139
Shares)
TDK Corp. 288,000 41,399
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Texas Instruments, Inc. 6,370,900 $ 437,601
Vitesse Semiconductor Corp. 1,238,200 91,085
(a)
Xilinx, Inc. (a) 920,100 75,966
Zoran Corp. (a)(c) 714,500 47,112
2,411,884
TOTAL TECHNOLOGY 10,719,874
TRANSPORTATION - 1.5%
AIR TRANSPORTATION - 0.5%
Continental Airlines, Inc. 1,664,500 78,232
Class B (a)
Ryanair Holdings PLC 1,661,900 60,659
sponsored ADR (a)
Southwest Airlines Co. 5,449,487 103,200
242,091
RAILROADS - 0.1%
Canadian Pacific Ltd. 1,056,100 27,392
TRUCKING & FREIGHT - 0.9%
C.H. Robinson Worldwide, Inc. 1,803,200 89,258
Expeditors International of 987,800 46,921
Washington, Inc.
Forward Air Corp. (a) 76,300 3,052
Ocean Group PLC(OLD) 7,673,024 126,876
Swift Transportation Co., 5,233,000 73,262
Inc. (a)(c)
United Parcel Service, Inc. 1,226,100 72,340
Class B
411,709
TOTAL TRANSPORTATION 681,192
UTILITIES - 9.7%
CELLULAR - 4.8%
AT&T Corp. - Wireless Group 4,046,900 112,807
China Telecom (Hong Kong) 162,700 28,930
Ltd. sponsored ADR (a)
Crown Castle International 2,131,100 77,785
Corp. (a)
Dobson Communications Corp. 315,700 6,077
Class A
Nextel Communications, Inc. 8,289,200 507,195
Class A (a)
NTT DoCoMo, Inc. 5,005 135,487
Sprint Corp. - PCS Group 9,223,120 548,776
Series 1 (a)
Triton PCS Holdings, Inc. 1,910,800 110,349
Class A
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Vodafone AirTouch PLC 13,958,150 $ 578,391
sponsored ADR
VoiceStream Wireless Corp. (a) 203,300 23,643
2,129,440
ELECTRIC UTILITY - 0.7%
AES Corp. (a) 4,388,200 200,212
Calpine Corp. (a) 575,300 37,826
DPL, Inc. 304,900 6,689
Duke Energy Corp. 573,700 32,342
Northern States Power Co. 1,361,400 27,483
NRG Energy, Inc. 1,092,900 19,945
324,497
GAS - 0.5%
Dynegy, Inc. Class A 3,136,339 214,251
Enron Corp. 266,100 17,163
231,414
TELEPHONE SERVICES - 3.7%
Allegiance Telecom, Inc. (a) 1,019,500 65,248
BellSouth Corp. 6,839,900 291,551
Cable & Wireless PLC 3,255,100 162,958
sponsored ADR
DDI Corp. 9,784 94,130
Energis PLC (a) 993,565 37,349
McLeodUSA, Inc. Class A (a) 8,873,267 183,566
Metromedia Fiber Network, 246,800 9,795
Inc. Class A (a)
NEXTLINK Communications, Inc. 2,178,700 82,654
Class A
Nippon Telegraph & Telephone 15,030 199,890
Corp.
Qwest Communications 3,834,716 190,537
International, Inc. (a)
SBC Communications, Inc. 326,659 14,128
Time Warner Telecom, Inc. 357,565 23,018
Class A
U.S. WEST, Inc. 3,147,600 269,907
1,624,731
TOTAL UTILITIES 4,310,082
TOTAL COMMON STOCKS 40,172,020
(Cost $31,021,668)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -
2.5%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. Treasury Bonds:
6.125% 11/15/27 Aaa $ 302,000 $ 301,339
6.375% 8/15/27 Aaa 344,000 354,265
6.5% 11/15/26 Aaa 96,000 100,275
6.75% 8/15/26 Aaa 56,600 60,907
6.875% 8/15/25 Aaa 239,500 261,017
7.625% 2/15/25 Aaa 19,610 23,189
TOTAL U.S. TREASURY OBLIGATIONS 1,100,992
(Cost $1,102,896)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH EQUIVALENTS - 7.6%
SHARES
Central Cash Collateral Fund, 824,205,600 824,206
6.71% (b)
Taxable Central Cash Fund, 2,536,601,503 2,536,602
6.59% (b)
MATURITY AMOUNT (000S)
Investments in repurchase $ 2,884 2,883
agreements (U.S. Treasury
Obligations), in a joint
trading account at 6%, dated
6/30/00 due 7/3/00
TOTAL CASH EQUIVALENTS 3,363,691
(Cost $3,363,691)
TOTAL INVESTMENT PORTFOLIO - 44,636,703
100.6%
(Cost $35,488,255)
NET OTHER ASSETS - (0.6)% (247,911)
NET ASSETS - 100% $ 44,388,792
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Affiliated company
(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 $46,391,000 or 0.1% of net assets.
(e) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST (000S)
Grand Palais Management 7/24/96 $ 0
Co. LP
Distribution of investments by country of issue, as a percentage of
total net assets, is as follows:
United States of America 84.2%
United Kingdom 4.6
Japan 4.1
Canada 2.9
Others (individually less 4.2
than 1%)
100.0%
INCOME TAX INFORMATION
At June 30, 2000, the aggregate cost of investment securities for
income tax purposes was $35,854,253,000. Net unrealized appreciation
aggregated $8,782,450,000 of which $10,378,246,000 related to
appreciated investment securities and $1,595,796,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT)
JUNE 30, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 44,636,703
value (including repurchase
agreements of $2,883) (cost
$35,488,255) - See
accompanying schedule
Foreign currency held at 13,031
value (cost $13,023)
Receivable for investments 1,010,910
sold
Receivable for fund shares 30,148
sold
Dividends receivable 27,166
Interest receivable 33,557
Other receivables 2,644
TOTAL ASSETS 45,754,159
LIABILITIES
Payable to custodian bank $ 415
Payable for investments 387,729
purchased
Payable for fund shares 121,893
redeemed
Accrued management fee 26,340
Other payables and accrued 4,784
expenses
Collateral on securities 824,206
loaned, at value
TOTAL LIABILITIES 1,365,367
NET ASSETS $ 44,388,792
Net Assets consist of:
Paid in capital $ 31,665,958
Undistributed net investment 74,978
income
Accumulated undistributed net 3,499,307
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 9,148,549
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 768,761 $ 44,388,792
shares outstanding
NET ASSET VALUE and $57.74
redemption price per share
($44,388,792 (divided by)
768,761 shares)
Maximum offering price per $59.53
share (100/97.00 of $57.74)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
INVESTMENT INCOME $ 125,290
Dividends (including $671
received from affiliated
issuers)
Interest 136,466
Security lending 5,693
TOTAL INCOME 267,449
EXPENSES
Management fee Basic fee $ 130,567
Performance adjustment 27,318
Transfer agent fees 40,152
Accounting and security 896
lending fees
Non-interested trustees' 177
compensation
Custodian fees and expenses 1,015
Registration fees 844
Audit 96
Legal 89
Interest 2
Miscellaneous 19
Total expenses before 201,175
reductions
Expense reductions (8,467) 192,708
NET INVESTMENT INCOME 74,741
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 3,856,566
(including realized gain
(loss) of $49,614 on sales
of investments in affiliated
issuers)
Foreign currency transactions 1,322 3,857,888
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (4,560,294)
Assets and liabilities in 66 (4,560,228)
foreign currencies
NET GAIN (LOSS) (702,340)
NET INCREASE (DECREASE) IN $ (627,599)
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 74,741 $ 201,246
income
Net realized gain (loss) 3,857,888 8,518,694
Change in net unrealized (4,560,228) 832,762
appreciation (depreciation)
NET INCREASE (DECREASE) IN (627,599) 9,552,702
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders - (187,492)
From net investment income
From net realized gain (1,142,315) (6,849,357)
TOTAL DISTRIBUTIONS (1,142,315) (7,036,849)
Share transactions Net 3,780,537 6,947,473
proceeds from sales of shares
Reinvestment of distributions 1,125,069 6,910,736
Cost of shares redeemed (5,658,595) (8,101,248)
NET INCREASE (DECREASE) IN (752,989) 5,756,961
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) (2,522,903) 8,272,814
IN NET ASSETS
NET ASSETS
Beginning of period 46,911,695 38,638,881
End of period (including $ 44,388,792 $ 46,911,695
undistributed net investment
income of $74,978 and
$11,274, respectively)
OTHER INFORMATION
Shares
Sold 64,571 114,641
Issued in reinvestment of 19,163 119,715
distributions
Redeemed (96,596) (132,909)
Net increase (decrease) (12,862) 101,447
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 2000 YEARS ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 60.02 $ 56.81 $ 46.63 $ 42.15 $ 38.02 $ 30.28
of period
Income from Investment
Operations
Net investment income .10 D .29 D .36 D .42 D .46 .03
Net realized and unrealized (.91) 13.42 14.34 8.97 7.50 10.93
gain (loss)
Total from investment (.81) 13.71 14.70 9.39 7.96 10.96
operations
Less Distributions
From net investment income - (.28) (.30) (.35) (.38) (.09)
From net realized gain (1.47) (10.22) (4.22) (4.56) (3.45) (3.13)
Total distributions (1.47) (10.50) (4.52) (4.91) (3.83) (3.22)
Net asset value, end of $ 57.74 $ 60.02 $ 56.81 $ 46.63 $ 42.15 $ 38.02
period
TOTAL RETURN B, C (1.39)% 25.03% 31.57% 23.00% 21.94% 36.28%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 44,389 $ 46,912 $ 38,639 $ 30,739 $ 23,829 $ 14,858
millions)
Ratio of expenses to average .89% A .65% .65% .70% .83% .98%
net assets
Ratio of expenses to average .85% A, E .62% E .61% E .67% E .79% E .96% E
net assets after expense
reductions
Ratio of net investment .33% A .48% .70% .91% 1.28% .44%
income to average net assets
Portfolio turnover rate 165% A 177% 197% 144% 159% 223%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Contrafund (the fund) is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment
company organized as a Massachusetts business trust and is authorized
to issue an unlimited number of shares. Effective the close of
business on April 3, 1998, the fund was closed to new accounts. The
financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make
certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
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 foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. 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."
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.
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, foreign currency transactions,
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.
Undistributed 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.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. 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 foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
or other obligations found to be satisfactory by FMR are transferred
to an account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
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 $35,055,142,000 and $38,670,301,000, respectively, of which
U.S. government and government agency obligations aggregated $0 and
$80,390,000, 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 .2167% to
.5200% for the period. The annual individual fund fee rate is .30%. 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 basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) based on the fund's investment performance as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annualized rate of .70% of average
net assets after the performance adjustment.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC),
an affiliate of FMR and the general distributor of the fund, received
sales charges of $1,568,000 on sales of shares of the fund all of
which was retained.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annualized rate of .18% 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 $1,389,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $815,898,000. The fund received cash collateral of
$824,206,000 which was invested in cash equivalents.
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. The interest
rate on the borrowings is the bank's base rate, as revised from time
to time. The average daily loan balance during the period for which
loans were outstanding amounted to $9,062,000. The weighted average
interest rate was 6.54%.
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 $7,200,000 under this arrangement.
In addition, through arrangements with the fund's custodian and
transfer agent, credits realized as a result of uninvested cash
balances were used to reduce a portion of the fund's expenses. During
the period, the fund's custodian and transfer agent fees were reduced
by $11,000 and $1,256,000, respectively, under these arrangements.
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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH
AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE COST SALES COST DIVIDEND INCOME VALUE
AFFILIATE
Allen Telecom, Inc.. $ - $ 2,103 $ - $ 40,204
American Tower Corp. Class A 162,411 1,984 - 458,750
The Bombay Company, Inc. - 6,710 - 5,579
C.H. Robinson Worldwide, Inc. - 3,804 - -
Charming Shoppes, Inc. - - - 54,098
Dover Downs Entertainment, - 738 - -
Inc.
Earthgrains Co. 1,665 - 362 70,327
Fleming Companies, Inc. 4,934 1,911 93 31,565
Good Guys, Inc. - 1,683 - -
Harman International 31,302 3,149 159 104,761
Industries, Inc.
Linens'n Things, Inc. 6,570 44,654 - -
Midas, Inc. - 4,263 57 26,106
Mutual Risk Management Ltd. - 9,825 - -
Novoste Corp. 6,897 - - 60,781
Patterson Dental Co. 18,357 - - 104,315
Premier Parks, Inc. 1,297 27,814 - -
Rayovac Corp. 261 510 - 57,126
SPX Corp. 2,190 1,569 - 377,101
SBS Broadcasting SA - 20,184 - -
Sunglass Hut International, - 20,471 - -
Inc.
Swift Transportation Co., Inc. - - - 73,262
Teligent, Inc. Class A 6,145 4,107 - -
Unisys Corp. 2,398 28,861 - -
Varian Medical Systems, Inc. 11,506 - - 72,585
Waters Corp. 16,974 80,043 - -
Zoran Corp. - - - 47,112
TOTALS $ 272,907 $ 264,383 $ 671 $ 1,583,672
</TABLE>
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity Automated Service Telephone provides a single toll-free
number to access account balances, positions, quotes and trading. It's
easy to navigate the service, and on your first call, the system will
help you create a personal identification number (PIN) for security.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE (FAST(registered trademark))
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-0240 or visit our web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A
GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT
MONEY MARKET FUNDS WILL BE
ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED
OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE
PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF
ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
8 Montgomery Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
Three Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 Old N. 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
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72nd Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
RHODE ISLAND
47 Providence Place
Providence, RI
TENNESSEE
6150 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
1861 International Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management &
Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Limited
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Will Danoff, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach*
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Michael Cook
Marie L. Knowles
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CON-SANN-0800 108604
1.705711.102
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH FUNDS
Aggressive Growth Fund
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund(registered trademark)
Contrafund(registered trademark) II
Disciplined Equity Fund
Dividend Growth Fund
Export and Multinational Fund
Fidelity Fifty (registered trademark)
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium Fund(registered trademark)
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
Tax Managed Stock Fund
TechnoQuant (registered trademark) Growth Fund
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone (FAST(registered trademark)) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
