(2_FIDELITY_LOGOS)FIDELITY
DISCIPLINED EQUITY
FUND
SEMIANNUAL REPORT
APRIL 30, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the last six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 21 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 25 Footnotes to the financial
statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The first few months of 1994 were an unsettling time for many investors.
After three years of a nearly perfect environment for stock market
investing, stock prices fell in March and April. Investors disagree about
whether this decline represents only a short-term correction or signals the
beginning of a longer bear market. One can collect statistics to support
either opinion, but of course, nobody knows for sure what will happen to
stock prices in the months ahead.
We do know, however, that market declines are a normal part of stock market
investing. We have historically seen corrections of 10% or more every two
years. That's why I thought this might be a good time to review three basic
investment principles that have proven helpful to successful stock market
investors in every market cycle.
First, take a long-term approach when investing in stocks and stock funds.
If you can afford to leave your money invested through the market's
inevitable ups and downs, you will greatly reduce your vulnerability to any
single decline. Over time, stock prices have gone up - and have
significantly outperformed other types of investments and stayed ahead of
inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by investing in
a number of different stock funds, or in different investment categories,
such as bonds. You should also keep money you'll need in the near future in
a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage of change in value, the average annual
percentage change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Disciplined Equity 1.21% 14.43% 104.11% 143.29%
S&P 500(Registered trademark) -2.31% 5.32% 70.64% 92.90%
Average Growth Fund -2.27% 7.89% 70.51% n/a
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
since the fund began on December 28, 1988. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, you would end up
with $1,050. You can compare the fund's returns to the performance of the
Standard & Poor's 500 Composite Stock Price Index - a common proxy for
the U.S. stock market. You can also compare them to the average growth
fund, which reflects the performance of 485 growth funds tracked by Lipper
Analytical Services. Both benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Disciplined Equity 14.43% 15.34% 18.11%
S&P 500(Registered trademark) 5.32% 11.28% 13.09%
Average Growth Fund 7.89% 10.95% n/a
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 LIFE OF FUND
Date Disciplined S&P 500
12/28/88 10000.00 10000.00
12/31/88 10110.00 10035.74
01/31/89 10980.00 10770.35
02/28/89 10970.00 10502.17
03/31/89 11330.00 10746.87
04/30/89 11920.00 11304.64
05/31/89 12360.00 11762.47
06/30/89 12150.00 11695.43
07/31/89 13130.00 12751.52
08/31/89 13610.00 13001.45
09/30/89 13680.00 12948.15
10/31/89 13250.00 12647.75
11/30/89 13440.00 12905.76
12/31/89 13784.10 13215.50
01/31/90 12825.74 12328.74
02/28/90 13131.60 12487.78
03/31/90 13661.76 12818.71
04/30/90 13274.33 12498.24
05/31/90 14497.77 13716.82
06/30/90 14650.70 13623.55
07/31/90 14599.73 13579.95
08/31/90 13182.57 12352.32
09/30/90 12428.12 11750.77
10/31/90 12254.80 11700.24
11/30/90 13233.55 12456.07
12/31/90 13676.69 12803.60
01/31/91 14479.98 13361.83
02/28/91 15637.96 14317.20
03/31/91 16013.52 14663.68
04/30/91 16159.57 14698.87
05/31/91 16785.51 15333.87
06/30/91 15909.20 14631.57
07/31/91 16702.05 15313.41
08/31/91 17098.47 15676.33
09/30/91 17035.88 15414.54
10/31/91 17463.60 15621.09
11/30/91 16806.37 14991.56
12/31/91 18603.46 16706.60
01/31/92 18983.83 16395.86
02/29/92 19444.88 16609.00
03/31/92 19202.83 16285.13
04/30/92 19444.88 16763.91
05/31/92 19479.46 16846.05
06/30/92 19283.52 16595.05
07/31/92 20205.62 17273.78
08/31/92 19721.52 16919.67
09/30/92 19848.31 17119.32
10/31/92 19905.94 17179.24
11/30/92 20620.57 17765.05
12/31/92 21063.99 17983.56
01/31/93 21471.20 18134.62
02/28/93 21335.46 18381.26
03/31/93 21989.47 18769.10
04/30/93 21261.42 18314.89
05/31/93 21915.43 18805.73
06/30/93 22310.30 18860.26
07/31/93 22199.25 18784.82
08/31/93 23211.11 19496.77
09/30/93 23939.15 19346.64
10/31/93 24037.87 19747.12
11/30/93 23297.49 19559.52
12/31/93 23999.42 19796.19
01/31/94 25174.31 20469.26
02/28/94 24870.68 19914.54
03/31/94 23629.79 19046.27
04/30/94 24329.44 19290.06
$10,000 OVER LIFE OF FUND Let's say you invested $10,000 in Fidelity
Disciplined Equity Fund on December 28, 1988, when the fund started. As the
chart shows, by April 30, 1994, the value of your investment would have
grown to $24,329 - a 143.29% 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
$19,290 - a 92.90% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Brad Lewis,
Portfolio Manager of Fidelity Disciplined Equity Fund
Q. BRAD, HOW DID THE FUND DO?
A. Despite a volatile few months at the end of the period, the fund topped
both its benchmark and its peers. The fund's total return for the six
months ended April 30, 1994, was 1.21%. The Standard & Poor's 500
returned -2.31% and the average growth fund tracked by Lipper Analytical
Services returned -2.27%, both during the same period. For the 12 months
ended April 30, the fund had a total return of 14.43%, compared to 5.32%
for the S&P 500 and 7.89% for the average growth fund.
Q. IT LOOKS LIKE THE FUND'S PERFORMANCE SUFFERED LESS THAN MOST OF ITS
PEERS WHEN THE STOCK MARKET STUMBLED FROM FEBRUARY THROUGH APRIL. WHY?
A. The fund's behavior during the recent correction is a good example of
what works best about the complex computer model - the neural network - I
use to select the fund's stocks. As I've discussed in past reports, I input
roughly 100 variables that help the computer determine which stocks have
the best performance potential. Because I believe a company's stock price
eventually follows its earnings, I've made sure the computer gives a lot of
weight to a company's latest earnings estimates. What I'm getting to is
that many of the companies with disappointing earnings were among the
hardest hit during the correction. And because the fund's stocks had
stronger earnings growth than the broader market, the fund emerged from the
correction ahead of the S&P 500. Of course, it's not always that easy.
The fund's performance last fall was evidence of how the computer program
can't cover all of the bases.
Q. WHAT HAPPENED LAST FALL?
A. While the computer can analyze a company very closely, it has no way of
evaluating broad investing themes that affect stock prices. A good example
is all of the hype surrounding the so-called information superhighway,
which is combining the technologies of computers, telephones and
televisions. The computer shunned many of the fastest-rising
telecommunications stocks last fall because their valuations - prices
compared to other measures such as earnings - were high, and I've
programmed the computer to discard stocks that are too expensive. However,
investor excitement over the superhighway kept driving up the stock prices
anyway, and the fund suffered relative to many of its peers by not owning
them. It's important to remember that - in the short term - the fund may
lag others that chase the investing theme "du jour." But careful analysis
of companies' business prospects should help it consistently beat the
overall market and most of its peers over time.
Q. DID MARKET PSYCHOLOGY HURT THE PERFORMANCE OF ANY STOCKS THE FUND DID
OWN?
A. Sure. It was part of the reason drug stocks such as Eli Lilly,
Schering-Plough and Pfizer suffered over the past six months. Although
their valuations and earnings potential made them attractive to the
computer model, continuing uncertainty over health-care reform kept
investors away. These stocks were my biggest disappointments during the
period.
Q. LET'S SWITCH GEARS. WHICH STOCKS HELPED PERFORMANCE?
A. Cyclical stocks - those whose prices tend to move up and down in tandem
with the economy - did well. For example, an improving U.S. economy and a
strengthening yen helped domestic auto makers such as Ford and General
Motors gain momentum against their Japanese rivals. The stocks of
industrial equipment manufacturers also rose on the back of economic
growth; Clark Equipment shot up 31% over the last six months. Finally,
technology stocks benefited as U.S. manufacturers increased capital
spending to improve productivity.
Q. ANY EXAMPLES?
A. As businesses and consumers embraced new products and services tied to
the boom in personal computers, stocks in related industries rose quickly.
They included computer manufacturers IBM and Compaq; 3Com, which makes
equipment for wide and local area computer networks; and semiconductor
manufacturers including Integrated Device Technology, Intel, Micron
Technology, Motorola and Texas Instruments.
Q. THE FUND'S INVESTMENTS - WHEN GROUPED BY INDUSTRY - SEEK TO CLOSELY
MIRROR THE S&P 500. YET, YOU'VE INCREASED THE FUND'S STAKE IN
TECHNOLOGY AND REDUCED ITS STAKE IN UTILITIES OVER THE PAST SIX MONTHS.
WHY?
A. While I don't attempt to match the make-up of the S&P 500 stock for
stock, I do try to keep the fund's industry breakdown very close to that of
the index. Sometimes there are only a few companies within a given industry
to choose from. That's why you'll always see large oil companies such as
Mobil and Chevron and chemical companies such as Monsanto among the fund's
top 10 investments. However, I will slightly alter the industry investments
based on the computer's read on company earnings prospects. Despite the
excellent performance of many technology stocks lately, the computer has
suggested that these companies should continue to experience strong
earnings growth going forward.
Q. WHAT ABOUT UTILITIES?
A. When interest rates were falling through 1992 and part of 1993, utility
stocks were attractive because they paid dividends that were higher than
the average S&P 500 stock and the average yield on a one-year
certificate of deposit. However, when the economy picked up and interest
rates started to rise, utility dividend yields didn't rise as quickly as
bond yields. That made utility stocks less attractive than many other
dividend paying investments.
Q. HOW DO YOU SEE THE NEXT SIX MONTHS SHAPING UP?
A. The stock market may get choppy, but I don't foresee huge swings in
either direction. In 1993, falling interest rates helped drive the stock
market. But that may have changed. With the economy gaining strength,
company earnings appear to be increasingly driving the market's
performance. That could bode well for the fund, as I've programmed the
neural network to rely heavily on company earnings to help predict a
stock's performance. However, interest rates have risen and may rise
further. The effect of higher rates on economic growth - and the
profitability of U.S. companies - is still unclear, which is reason for
caution going forward.
FUND FACTS
GOAL: to increase the value of
the fund's shares by investing
mainly in stocks, using
quantitative and fundamental
research
START DATE: December 28, 1988
SIZE: as of April 30, 1994,
more than $882 million
MANAGER: Bradford Lewis,
since December 1988;
manager, Fidelity Stock
Selector, since September
1990, and Fidelity Small Cap
Stock, since June 1993;
joined Fidelity in 1985
(checkmark)
BRAD LEWIS ON BEATING THE
MARKET:
"We often hear about picking
`winning' stocks, but I think
avoiding the losers is every bit
as important. When I'm
buying stocks, I don't stray far
from the recommendations of
my computer program.
Deciding when to sell can be
tougher. Every day the
computer will crank out fresh
revisions of earnings
estimates for each of the
companies within the fund. I
probably spend two-thirds of
my time poring over these
revisions and figuring out
when it's time to sell. The
computer will tell me when
earnings prospects are
worsening, and if I can get out
of the stock before its price
falls, I've avoided a loss. If I
can do that consistently, the
fund should beat the
performance of the overall
market."
(bullet) New additions to the fund's
top 10 investments over the
past six months include drug
company Schering Plough,
Computer communications
systems manufacturer 3Com,
golf club supplier Callaway
Golf, and auto maker General
Motors. Stocks that have
fallen out of the top 10 include
Cititcorp, Bell Atlantic, Sears
and Proctor & Gamble.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF APRIL 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Chevron Corporation 3.0 3.5
Mobil Corp. 3.0 3.3
Schering Plough Corp. 2.6 1.2
3Com Corp. 2.4 1.3
Callaway Golf Co. 2.3 0.9
Monsanto 2.2 2.0
Sprint Corporation 2.1 2.0
General Motors Corporation 1.7 0.3
Ameritech Corp. 1.7 1.7
Penney (J.C.) Co., Inc. 1.7 1.7
TOP FIVE INDUSTRIES AS OF APRIL 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO
Finance 12.9 13.7
Utilities 11.9 15.4
Technology 11.5 6.0
Energy 9.1 8.8
Health 7.1 4.0
ASSET ALLOCATION
AS OF APRIL 30, 1994 AS OF OCTOBER 31, 1993
Row: 1, Col: 1, Value: 15.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 45.0
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 1, Value: 20.3
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 39.3
Stocks 85.0%
Bonds 0.0%
Short-term
Investments 15.0%
Stocks 79.3%
Bonds 0.4%
Short-term
Investments 20.3%
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investments
COMMON STOCKS - 85.0%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.6%
AEROSPACE & DEFENSE - 0.4%
McDonnell Douglas Corp. 20,700 $ 2,432,235
Precision Castparts Corp. 6,000 195,000
Thiokol Corp. 33,300 803,363
UNC, Inc. (a) 40,000 400,000
3,830,598
DEFENSE ELECTRONICS - 0.2%
ESCO Electronics Corp. (trust receipt) (a) 37,000 407,000
Flir Systems, Inc. (a) 30,000 438,750
Tech-Sym Corp. (a) 2,000 42,500
Watkins-Johnson Co. 23,300 751,425
1,639,675
TOTAL AEROSPACE & DEFENSE 5,470,273
BASIC INDUSTRIES - 4.9%
CHEMICALS & PLASTICS - 3.8%
Cabot Corp. 23,600 1,256,700
Hercules, Inc. 26,000 2,795,000
Monsanto Co. 234,200 19,262,950
Morton International, Inc. 55,000 4,798,750
Union Carbide Corp. 182,000 4,800,250
32,913,650
IRON & STEEL - 0.2%
USX-U.S. Steel Group 22,100 751,400
Wheeling Pittsburgh Corp. (a) 45,000 742,500
1,493,900
METALS & MINING - 0.0%
Martin Marietta Materials, Inc. 3,000 69,000
PAPER & FOREST PRODUCTS - 0.9%
International Paper Co. 105,000 6,851,250
Willamette Industries, Inc. 15,000 686,250
7,537,500
TOTAL BASIC INDUSTRIES 42,014,050
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONGLOMERATES - 0.0%
Instrument Systems Corp. (a) 22,000 $ 192,500
CONSTRUCTION & REAL ESTATE - 0.9%
BUILDING MATERIALS - 0.7%
Armstrong World Industries, Inc. 98,500 5,516,000
Texas Industries, Inc. 6,000 225,750
5,741,750
CONSTRUCTION - 0.1%
Centex Corp. 28,000 798,000
REAL ESTATE INVESTMENT TRUSTS - 0.1%
Chateau Properties, Inc. 6,300 139,388
Chelsea GCA Realty, Inc. (a) 3,900 115,050
Macerich Company 19,900 390,538
McArthur/Glen Realty Corp. (a) 3,900 85,313
730,289
TOTAL CONSTRUCTION & REAL ESTATE 7,270,039
DURABLES - 4.5%
AUTOS, TIRES, & ACCESSORIES - 3.1%
Ford Motor Co. 108,200 6,316,175
General Motors Corp. 268,000 15,209,000
Goodyear Tire & Rubber Co. 75,000 2,925,000
Lear Seating Corp. 10,300 199,563
Mascotech, Inc. 117,300 2,228,700
26,878,438
CONSUMER ELECTRONICS - 0.3%
Harman International Industries, Inc. (a) 4,500 140,063
Rival Co. (The) 127,200 2,671,200
2,811,263
HOME FURNISHINGS - 0.1%
Heilig-Meyers Co. 33,000 940,500
O'Sullivan Industries Holdings (a) 4,100 79,950
1,020,450
TEXTILES & APPAREL - 1.0%
Culp, Inc. 49,500 575,438
Farah, Inc. 17,000 354,875
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
Haggar Corp. 22,000 $ 627,000
Kellwood Co. 15,000 361,875
Nautica Enterprises, Inc. (a) 184,700 4,986,900
Pillowtex Corp. (a) 30,200 528,500
Reebok International Ltd. 4,200 129,150
St. John Knits (a) 50,100 1,271,288
8,835,026
TOTAL DURABLES 39,545,177
ENERGY - 9.1%
ENERGY SERVICES - 0.3%
Chiles Offshore Corp. (a) 50,000 218,750
Input/Output, Inc. (a) 10,000 470,000
Lufkin Industries, Inc. 5,000 88,750
Marine Drilling Cos., Inc. (a) 74,200 389,550
Smith International, Inc. (a) 120,000 1,500,000
2,667,050
OIL & GAS - 8.8%
Amoco Corp. 260,000 14,592,500
Ashland Oil, Inc. 140,000 5,425,000
Chevron Corp. 298,200 26,539,800
KCS Group, Inc. 32,000 776,000
Mobil Corp. 335,900 26,284,175
Tosco Corp. 20,000 612,500
Ultramar Corporation 109,100 2,918,425
77,148,400
TOTAL ENERGY 79,815,450
FINANCE - 12.9%
BANKS - 6.6%
Advanta Corp. 100,200 3,857,700
Bankers Trust New York Corp. 39,000 2,608,125
Chase Manhattan Corp. 211,100 7,177,400
First Interstate Bancorp 37,000 2,950,750
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
Fleet Financial Group, Inc. 120,000 $ 4,530,000
Midlantic Corp. 167,000 4,926,500
NationsBank Corp. 187,947 9,820,231
Premier Bancorp, Inc. (a) 14,600 255,500
Signet Banking Corp. 215,148 8,794,175
Wells Fargo & Co. 89,000 12,905,000
Whitney Holding Corp. 9,500 218,500
58,043,881
CREDIT & OTHER FINANCE - 2.3%
American Express Co. 41,900 1,241,288
First USA, Inc. 47,600 1,993,250
Foothill Group, Inc., Class A 99,400 1,366,750
Green Tree Acceptance, Inc. 193,800 10,174,500
MBNA Corp. 181,850 4,546,250
Transamerica Corporation 24,000 1,209,000
20,531,038
INSURANCE - 3.2%
AFLAC, Inc. 35,875 1,089,703
AMBAC, Inc. 164,100 6,728,100
Aetna Life & Casualty Co. 31,500 1,638,000
Capital RE Corp. 30,500 575,688
Fidelity National Financial, Inc. 93,700 1,651,463
First American Financial Corp. California 4,000 113,000
MBIA, Inc. 131,200 7,593,200
Phoenix Re Corp. 126,310 2,968,285
SunAmerica, Inc. 22,000 805,750
Travelers, Inc. (The) 114,737 3,987,111
Washington National Corp. 16,000 366,000
27,516,300
SAVINGS & LOANS - 0.3%
Standard Federal Bank 76,000 1,928,500
SECURITIES INDUSTRY - 0.5%
Franklin Resources, Inc. 104,000 3,939,000
Legg Mason, Inc. 27,500 587,813
4,526,813
TOTAL FINANCE 112,546,532
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - 7.1%
DRUGS & PHARMACEUTICALS - 4.5%
Amgen, Inc. (a) 18,200 $ 737,100
Forest Laboratories, Inc. (a) 28,000 1,242,500
Genentech, Inc. (redeemable) (a) 28,000 1,396,500
Jones Medical Industries, Inc. 132,900 1,528,350
Lilly (Eli) & Co. 48,000 2,364,000
Pfizer, Inc. 121,000 7,139,000
Roberts Pharmaceutical Corp. (a) 54,300 1,785,113
Schering-Plough Corp. 378,600 23,094,600
39,287,163
MEDICAL EQUIPMENT & SUPPLIES - 1.7%
Cordis Corp. (a) 41,800 1,933,250
Johnson & Johnson 259,000 10,716,125
McKesson Corp. 30,000 1,995,000
14,644,375
MEDICAL FACILITIES MANAGEMENT - 0.9%
Gencare Health Systems, Inc. (a) 20,000 660,000
Health Management Associates, Inc. Class A (a) 120,900 4,427,963
Intergroup Healthcare Corp. (a) 10,100 453,238
U.S. Healthcare, Inc. 39,300 1,473,750
United HealthCare Corp. 28,600 1,186,900
8,201,851
TOTAL HEALTH 62,133,389
INDUSTRIAL MACHINERY & EQUIPMENT - 2.3%
ELECTRICAL EQUIPMENT - 0.0%
BMC Industries, Inc. (a) 5,000 129,375
First Alert, Inc. 900 19,800
149,175
INDUSTRIAL MACHINERY & EQUIPMENT - 2.2%
Briggs & Stratton Corp. 57,200 4,819,100
Clark Equipment Co. (a) 200,600 13,690,950
Indresco, Inc. (a) 29,000 384,250
NN Ball & Roller, Inc. 1,500 24,188
Ultratech Stepper, Inc. 700 16,538
Varlen Corp. 23,600 442,500
19,377,526
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
POLLUTION CONTROL - 0.1%
Sanifill, Inc. (a) 25,000 $ 609,375
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 20,136,076
MEDIA & LEISURE - 5.1%
BROADCASTING - 0.9%
CAI Wireless Systems, Inc. 2,400 27,000
CBS, Inc. 26,900 8,150,700
8,177,700
ENTERTAINMENT - 0.5%
Carmike Cinemas, Inc. Class A (a) 14,000 257,250
Players International, Inc. 172,400 3,555,750
RHI Entertainment, Inc. (a) 9,000 321,750
4,134,750
LEISURE DURABLES & TOYS - 3.1%
ARCTCO, Inc. 7,600 199,500
Callaway Golf Co. 514,400 20,383,100
Mattel, Inc. 254,875 6,403,734
26,986,334
LODGING & GAMING - 0.5%
Caesars World, Inc. (a) 96,000 4,668,000
RESTAURANTS - 0.1%
Bob Evans Farms, Inc. (a) 40,000 850,000
Bugaboo Creek Steak House, Inc. 3,000 36,375
886,375
TOTAL MEDIA & LEISURE 44,853,159
NONDURABLES - 5.9%
BEVERAGES - 0.5%
Dr. Pepper/Seven-Up Companies, Inc. (a) 154,000 3,946,250
FOODS - 2.1%
CPC International, Inc. 80,000 3,860,000
Chiquita Brands International, Inc. 193,500 2,660,625
Gerber Products Co. 36,000 1,102,500
GoodMark Foods, Inc. 50,000 950,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - CONTINUED
Hudson Foods, Inc. Class A 68,400 $ 1,051,650
IBP, Inc. 258,000 6,708,000
J&J Snack Foods Corp. (a) 127,500 1,960,313
18,293,088
HOUSEHOLD PRODUCTS - 2.7%
Colgate-Palmolive Co. 90,000 5,276,250
Premark International, Inc. 115,300 9,108,700
Procter & Gamble Co. 162,200 9,225,125
23,610,075
TOBACCO - 0.6%
Philip Morris Companies, Inc. 90,000 4,905,000
TOTAL NONDURABLES 50,754,413
PRECIOUS METALS - 0.1%
PRECIOUS METALS - 0.1%
Hecla Mining Co. (a) 61,000 693,875
RETAIL & WHOLESALE - 6.9%
APPAREL STORES - 1.1%
American Eagle Outfitters, Inc. 2,000 31,250
Gap, Inc. 194,000 9,142,250
Just For Feet, Inc. 900 12,375
Norton McNaughton, Inc. 2,200 42,900
9,228,775
DRUG STORES - 0.2%
Revco (D.S.), Inc. (a) 93,400 1,576,125
GENERAL MERCHANDISE STORES - 3.0%
May Department Stores Co. (The) 271,300 11,360,688
Penney (J.C.) Co., Inc. 272,100 14,761,425
26,122,113
GROCERY STORES - 0.8%
Safeway, Inc. (a) 252,700 6,285,913
Supervalu, Inc. 36,000 1,174,500
7,460,413
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISC - 1.8%
Best Buy Co., Inc. (a) 59,600 $ 2,153,050
Cameron Ashley, Inc. 16,100 163,013
Lowe's Companies, Inc. 370,600 13,063,650
Petco Animal Supplies, Inc. 15,000 198,750
Tandy Corp. 17,500 579,688
16,158,151
TOTAL RETAIL & WHOLESALE 60,545,577
SERVICES - 0.5%
LEASING & RENTAL - 0.0%
Agency Rent-A-Car, Inc. 16,000 208,000
PRINTING - 0.3%
Merrill Corp. 53,600 1,232,800
Reynolds & Reynolds Co. Class A 73,800 1,568,250
2,801,050
SERVICES - 0.2%
Career Horizons, Inc. 4,500 87,750
Comdata Holdings Corp. 23,334 186,672
Devry, Inc. (a) 22,000 605,000
Interim Services, Inc. 1,700 41,650
Pittston Company Services Group 35,000 875,000
1,796,072
TOTAL SERVICES 4,805,122
TECHNOLOGY - 11.5%
COMMUNICATIONS EQUIPMENT - 2.4%
Pairgain Technologies, Inc. (a) 500 4,188
Tellabs, Inc. (a) 300 19,125
3Com Corp. (a) 354,300 20,837,269
20,860,582
COMPUTER SERVICES & SOFTWARE - 1.3%
Computer Associates International, Inc. 84,000 2,719,500
Educational Insights, Inc. 10,900 99,463
Infosoft International, Inc. 1,100 23,925
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Intelligent Electronics, Inc. 443,500 $ 8,426,500
Mapinfo Corp. 400 8,300
11,277,688
COMPUTERS & OFFICE EQUIPMENT - 2.1%
Comdisco, Inc. 88,400 1,779,050
Compaq Computer Corp. (a) 41,300 4,584,300
Cray Research, Inc. (a) 91,000 1,945,125
Filenet Corp. (a) 91,300 2,510,750
International Business Machines Corp. 80,700 4,620,075
Tricord Systems, Inc. (a) 203,400 2,440,800
17,880,100
ELECTRONIC INSTRUMENTS - 2.7%
Applied Materials, Inc. (a) 120,000 5,340,000
Electro Scientific Industries, Inc. (a) 131,800 1,416,850
Lam Research Corp. (a) 314,050 9,500,013
Teradyne, Inc. (a) 326,000 7,701,750
23,958,613
ELECTRONICS - 2.9%
Flextronics International 9,100 100,100
Integrated Device Technology, Inc. (a) 166,800 5,024,850
Intel Corp. 67,500 4,117,500
LSI Logic Corp. (a) 155,000 3,448,750
Marshall Industries (a) 16,800 434,700
Micron Technology, Inc. 281,750 10,319,094
Texas Instruments, Inc. 28,200 2,157,300
25,602,294
PHOTOGRAPHIC EQUIPMENT - 0.1%
Megahertz Corp. (a) 83,000 954,500
TOTAL TECHNOLOGY 100,533,777
TRANSPORTATION - 0.8%
AIR TRANSPORTATION - 0.1%
Comair Holdings, Inc. 57,550 1,194,163
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRANSPORTATION - CONTINUED
RAILROADS - 0.6%
Burlington Northern, Inc. 84,000 $ 4,756,500
Kansas City Southern Industries, Inc. 13,000 507,000
5,263,500
TRUCKING & FREIGHT - 0.1%
Airborne Freight Corp. 20,000 735,000
Celadon Group, Inc. (a) 2,100 30,975
Landstar System, Inc. 15,000 375,000
1,140,975
TOTAL TRANSPORTATION 7,598,638
UTILITIES - 11.9%
ELECTRIC UTILITY - 3.4%
American Electric Power Co., Inc. 109,000 3,542,500
Atlantic Energy, Inc. (N.J.) 50,000 1,062,500
Boston Edison Co. 50,000 1,450,000
Carolina Power & Light Co. 100,000 2,662,500
Destec Energy, Inc. (a) 94,500 1,063,125
General Public Utilities Corp. 255,800 7,801,900
PacifiCorp. 236,000 4,218,500
Portland General Corp. 180,600 3,408,825
Public Service Co. of New Mexico (a) 286,000 3,825,250
Washington Water Power Co. 40,000 710,000
29,745,100
GAS - 1.0%
Coastal Corp. (The) 100,000 3,162,500
Columbia Gas System, Inc. (The) (a) 66,700 1,884,275
El Paso Natural Gas Co. 80,000 2,880,000
Panhandle Eastern Corp. 36,300 730,538
8,657,313
TELEPHONE SERVICES - 7.5%
ALC Communications Corp. (a) 77,000 2,723,875
ALLTEL Corp. 72,400 1,945,750
Ameritech Corp. 383,800 15,112,125
BellSouth Corp. 150,000 9,131,250
LDDS Communications, Inc. (a) 317,018 7,449,923
Lincoln Telecommunications Co. 48,700 785,288
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
Rochester Telephone Corp. 98,000 $ 2,241,750
Southwestern Bell Corp. 200,000 8,300,000
Sprint Corporation 493,200 18,125,100
65,815,061
TOTAL UTILITIES 104,217,474
TOTAL COMMON STOCKS
(Cost $681,634,427) 743,125,521
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 0.6%
PRINCIPAL
AMOUNT
U.S. Treasury Bill 0%, 7/7/94 (Cost $4,966,416) $ 5,000,000 4,965,450
REPURCHASE AGREEMENTS - 14.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.56%
dated 4/29/1994 due 5/02/1994 $ 125,668,312 125,631,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $812,231,843) $ 873,721,971
LEGEND
1. Non-income producing
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $812,304,725. Net unrealized appreciation aggregated
$61,417,246, of which $88,022,253 related to appreciated investment
securities and $26,605,007 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 873,721,971
agreements of $125,631,000) (cost $812,231,843)
(Notes 1 and 2) - See accompanying schedule
Cash 939
Receivable for investments sold 82,626,340
Receivable for fund shares sold 3,643,815
Dividends receivable 957,709
Other receivables 27,577
TOTAL ASSETS 960,978,351
LIABILITIES
Payable for investments purchased $ 76,349,052
Payable for fund shares redeemed 860,145
Accrued management fee 514,992
Other payables and accrued expenses 278,382
TOTAL LIABILITIES 78,002,571
NET ASSETS $ 882,975,780
Net Assets consist of (Note 1):
Paid in capital $ 808,136,311
Undistributed net investment income 2,352,768
Accumulated undistributed net realized gain (loss) on 10,996,573
investments
Net unrealized appreciation (depreciation) on investment 61,490,128
securities
NET ASSETS, for 47,921,965 shares outstanding $ 882,975,780
NET ASSET VALUE, offering price and redemption price per $18.43
share ($882,975,780 (divided by) 47,921,965 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 6,776,048
Dividends
Interest 1,719,323
TOTAL INCOME 8,495,371
EXPENSES
Management fee (Note 4) $ 2,551,714
Basic fee
Performance adjustment 392,949
Transfer agent fees (Note 4) 1,067,933
Accounting fees and expenses (Note 4) 199,155
Non-interested trustees' compensation 2,513
Custodian fees and expenses 20,333
Registration fees 85,569
Audit 23,512
Legal 5,884
Interest (Note 6) 11,509
Miscellaneous 5,921
Total expenses before reductions 4,366,992
Expense reductions (Note 7) (79,204) 4,287,788
NET INVESTMENT INCOME 4,207,583
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1 AND 3)
Net realized gain (loss) on:
Investment securities 20,253,966
Futures contracts (3,582,475) 16,671,491
Change in net unrealized appreciation (depreciation) on:
Investment securities (10,230,205)
Futures contracts (1,515,300) (11,745,505)
NET GAIN (LOSS) 4,925,986
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 9,133,569
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 4,207,583 $ 8,645,020
Net investment income
Net realized gain (loss) on investments 16,671,491 44,201,913
Change in net unrealized appreciation (depreciation) (11,745,505) 60,283,789
on
investments
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 9,133,569 113,130,722
FROM OPERATIONS
Distributions to shareholders: (8,598,211) (4,205,396)
From net investment income
From net realized gain (42,587,100) (21,912,338)
TOTAL DISTRIBUTIONS (51,185,311) (26,117,734)
Share transactions 264,968,273 585,617,723
Net proceeds from sales of shares
Reinvestment of distributions 48,928,600 25,281,222
Cost of shares redeemed (178,702,349) (248,750,041)
Redemption fees (Note 1) - 29,871
Net increase (decrease) in net assets resulting from 135,194,524 362,178,775
share
transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 93,142,782 449,191,763
NET ASSETS
Beginning of period 789,832,998 340,641,235
End of period (including undistributed net investment $ 882,975,780 $ 789,832,998
income of $2,352,768 and $8,661,402, respectively)
OTHER INFORMATION
Shares
Sold 14,313,234 33,151,773
Issued in reinvestment of distributions 2,731,915 1,511,797
Redeemed (9,670,175) (13,838,386)
Net increase (decrease) 7,374,974 20,825,184
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED OCTOBER 31, DECEMBER 28,
ENDED 1988
APRIL 30, (COMMENCEMENT
1994 OF
OPERATIONS) TO
OCTOBER 31,
1989
(UNAUDITED) 1993 1992 1991 1990
SELECTED PER-SHARE DATA
Net asset value, $ 19.48 $ 17.27 $ 16.74 $ 12.02 $ 13.25 $ 10.00
beginning of period
Income from
Investment
Operations
Net investment .07 .19 .19 .29 .32 .08
income
Net realized and .13 3.20 1.89 4.73 (1.29) 3.17
unrealized gain
(loss) on
investments
Total from .20 3.39 2.08 5.02 (.97) 3.25
investment
operations
Less Distributions
From net (.21) (.19) (.23) (.30) (.13) -
investment
income
From net realized (1.04) (.99) (1.32) - (.13) -
gain
Total distributions (1.25) (1.18) (1.55) (.30) (.26) -
Net asset value, end $ 18.43 $ 19.48 $ 17.27 $ 16.74 $ 12.02 $ 13.25
of period
TOTAL RETURN (dagger) (double dagger) 1.21% 20.76 13.99 42.50 (7.51) 32.50%
% % % %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 883 $ 790 $ 341 $ 154 $ 96 $ 71
period (in millions)
Ratio of expenses to 1.09%* 1.09 1.16 1.19 1.24% 1.94%*
average net assets (diamond) % % %
Ratio of expenses to 1.11%* 1.11 1.16 1.19 1.24% 1.94%*
average net assets (diamond) % % %
before expense
reductions
Ratio of net 1.07%* 1.39 1.79 2.05 2.29% 2.04%*
investment income % % %
to average net
assets
Portfolio turnover rate 143%* 279 255 210 171% 118%*
% % %
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(double dagger) TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(diamond) SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994 (Unaudited)
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Disciplined Equity Fund (the fund) is a fund of Fidelity Capital
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust 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. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practical to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Dividend and
interest income is recorded net of foreign taxes where recovery of such
taxes is not assured.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions are recorded on the ex-dividend date.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
REDEMPTION FEES. Through December 24, 1992 shares held in the fund less
than 90 days were subject to a redemption fee equal to .50% of the proceeds
of the redeemed shares. A portion of the fee was accounted for as a
reduction of transfer agent expenses. This portion of the redemption fee
was used to offset the transaction costs and other expenses that short-term
trading imposed on the fund and its shareholders. The remainder of the
redemption fee was accounted for as an addition to paid in capital.
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.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective November
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,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of October 31, 1993 have been reclassified to
reflect an increase in paid in capital of $5,340,449, a decrease in
undistributed net investment income of $1,004,302 and a decrease in
accumulated net realized gain on investments of $4,336,147.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
registered investment companies having management contracts with FMR, may
transfer uninvested cash balances into a joint trading account. These
balances are invested in one or more repurchase agreements that are
collateralized by U.S. Treasury or Federal Agency obligations.
FUTURES CONTRACTS AND OPTIONS. The fund may invest in futures contracts and
write options. These investments involve to varying degrees, elements of
market risk and risks in excess of the amount recognized in the Statement
of Assets and Liabilities. The face or contract amounts reflect the extent
of the involvement the fund has in the particular classes of instruments.
Risks may be caused by an imperfect correlation between movements in the
price of the instruments and the price of the underlying securities and
interest rates. Risks also may arise if there is an illiquid secondary
market for the instruments, or due to the inability of counterparties to
perform.
2. OPERATING POLICIES -
CONTINUED
FUTURES CONTRACTS AND OPTIONS - CONTINUED
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange 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.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $592,306,015 and $514,902,830, respectively, of which U.S.
government and government agency obligations aggregated $132,989,510 and
$131,510,000, respectively.
The market value of futures contracts opened and closed amounted to
$163,681,200 and $234,641,550, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates ranging from
.30% to .52% and is based on the monthly average net assets of all the
mutual funds advised by FMR. The annual individual fund fee rate is .30%.
The basic fee is subject to a performance adjustment (up to a maximum of +
or - .20%) based on each 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 .75% of average net
assets.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .2850% to .5200%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a lower management fee.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
fund's transfer, dividend disbursing and shareholder servicing agent. FSC
receives fees based on the type, size, number of accounts and the number of
transactions made by shareholders. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
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 $187,290 for the period.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a lender. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $38,010,000 and $37,809,286,
respectively. The weighted average interest rate was 3.38%. Interest earned
from the interfund lending program amounted to $ 24,832 and is included in
interest income on the Statement of Operations.
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 balances during the periods for
which loans were outstanding amounted to $13,745,000 and $6,947,588,
respectively. The weighted average interest rate was 3.57%. Interest
expense includes $11,509 paid under the bank borrowing program.
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
$79,204 under this arrangement.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Bradford F. Lewis, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Fidelity Fifty Fund
Growth Company Fund
Low-Priced Stock Fund
Magellan(Registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Growth Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
