(2_FIDELITY_LOGOS)FIDELITY
STOCK SELECTOR
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 22 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 26 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 LIFE OF
MONTHS YEAR FUND
Stock Selector 2.10% 13.48% 119.45%
S&P 500(Registered trademark) -2.31% 5.32% 66.97%
Average Growth Fund -2.27% 7.89% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year or since the fund
started on September 28, 1990. For example, if you invested $1,000 in a
fund that then had a 5% return, 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 LIFE OF
YEAR FUND
Stock Selector 13.48% 24.46%
S&P 500(Registered trademark) 5.32% 15.34%
Average Growth Fund 7.89% 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
MonthEnd Fidelity Stock Selector
09/28/90 10000.00 10000.00
09/30/90 10000.00 10171.45
10/31/90 9800.00 10127.71
11/30/90 10660.00 10781.96
12/31/90 11150.69 11082.78
01/31/91 12313.89 11565.99
02/28/91 13376.82 12392.96
03/31/91 13948.39 12692.87
04/30/91 14179.03 12723.33
05/31/91 14800.74 13272.98
06/30/91 13988.50 12665.08
07/31/91 14640.30 13255.27
08/31/91 14921.07 13569.42
09/30/91 14870.93 13342.81
10/31/91 15231.92 13521.60
11/30/91 14670.38 12976.68
12/31/91 16273.85 14461.21
01/31/92 16763.21 14192.24
02/29/92 17408.75 14376.73
03/31/92 17065.15 14096.39
04/30/92 16940.21 14510.82
05/31/92 17002.68 14581.92
06/30/92 16721.56 14364.65
07/31/92 17398.34 14952.17
08/31/92 16940.21 14645.65
09/30/92 17127.62 14818.47
10/31/92 17460.81 14870.33
11/30/92 18210.47 15377.41
12/31/92 18783.92 15566.55
01/31/93 19306.58 15697.31
02/28/93 19263.92 15910.80
03/31/93 19957.25 16246.51
04/30/93 19338.58 15853.35
05/31/93 19882.58 16278.22
06/30/93 20277.24 16325.42
07/31/93 20234.58 16260.12
08/31/93 21119.91 16876.38
09/30/93 21706.57 16746.43
10/31/93 21493.24 17093.08
11/30/93 20767.91 16930.70
12/31/93 21408.36 17135.56
01/31/94 22447.38 17718.17
02/28/94 22344.62 17238.01
03/31/94 21339.85 16486.43
04/30/94 21944.99 16697.46
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Stock Selector on September 28, 1990, when the fund started. As the chart
shows, by April 30, 1994, the value of your investment would have grown to
$21,945 - a 119.45% 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 $16,697 - a
66.97% 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 Stock Selector
Q. BRAD, HOW DID THE FUND DO?
A. Despite a volatile few months at the end of the period, the fund
outperformed its benchmark and most of its peers. The fund had a total
return of 2.10% for the six months ended April 30, 1994, compared to a
total return of -2.31% for the S&P 500 during the same period. The
average growth fund returned -2.27%, according to Lipper Analytical
Services. For the 12 months ended April 30, the fund returned 13.48%,
compared to 5.32% for the S&P 500 and 7.89% for the average growth
fund.
Q. WHY WASN'T THE FUND HIT AS HARD AS MOST OTHERS WHEN THE MARKET FELL FROM
FEBRUARY THROUGH APRIL?
A. The fund's performance during that correction is a good example of what
works best about the complex computer models - 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 stock prices follow earnings, I've
made sure the computer gives a lot of weight to a company's latest earnings
estimates. As a result, 57% of the fund's companies saw increases in
earnings estimates in April versus 26% of the companies in the index.
Conversely, only 7% of companies in the fund saw decreases in earnings
estimates, compared to 22% of those in the index. My point is, when the
market fell, the stocks of companies with strong earnings growth held up
better than those with disappointing earnings. That's a simple way of
explaining why the fund outperformed the index. Of course, it's not always
that easy. The fund's performance last fall was evidence of how the
computer can't cover all of the bases.
Q. WHAT HAPPENED THEN?
A. The computer models analyze many aspects of a company's business
prospects, but it can't evaluate broad investing themes that affect stock
prices. For example, all of the excitement and publicity surrounding the
so-called information superhighway drove up the prices of
telecommunications stocks last fall, even though their valuations - prices
compared to other measures like earnings - were already high. The fund
missed out in part because I've programmed the computer to discard stocks
that I feel are too expensive. But more importantly, the computer has no
way of predicting the effects of these investing trends that sweep in and
out of the market. 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 can help the fund
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. The performance of drug stocks such as Eli Lilly, Schering-Plough
and Pfizer suffered from all the uncertainty surrounding health-care
reform, something the computer couldn't have predicted. They were among my
biggest disappointments during the period.
Q. LET'S GET BACK TO WHAT WORKED. WHERE DID YOU AND THE COMPUTER MODELS
FIND THE WINNERS?
A. Technology stocks - 21.6% of the fund on April 30, up from 5.5% at the
end of October - were among the biggest. Most companies tied in any way to
the boom in personal computers performed well. These included computer
manufacturers Compaq and IBM; 3Com, which makes equipment for wide and
local area networks; and semiconductor manufacturers including Integrated
Device Technology, Intel, Micron Technology, Motorola and Texas
Instruments.
Q. YOU ALSO INCREASED THE FUND'S STAKE IN AUTOS . . .
A. Most cyclical stocks - those whose prices tend to rise and fall in step
with the economy - had a strong last six months. U.S. auto makers not only
benefited from a stronger economy, but also from a weaker yen, which made
them more competitive with their Japanese rivals. The Big Three - Ford,
Chrysler and General Motors - boosted the fund's performance. Ford and GM
were still among its top 10 investments at the end of April.
Q. FOR THE FIRST TIME EVER, A SIZEABLE PORTION OF THE FUND WAS INVESTED
OVERSEAS AT THE END OF APRIL. DOES THIS MEAN YOU'RE DOWN ON U.S. STOCKS?
A. Not necessarily. I see foreign investing as a good way to help diversify
the fund as well as hopefully boost returns. Before venturing overseas, I
developed computer models that use dozens of variables to forecast the
returns of several foreign stock indices. I try to pinpoint those markets
that have the best chance of outperforming the U.S. market over the next
six to nine months. By the end of April, I had invested roughly 10% of the
fund in Japan, 3% in Hong Kong, and another 3% in Australia. Of course,
foreign investing involves risks that are unique to overseas markets. These
include currency risk, which can devalue overseas investments once they are
converted back to dollars, and political risk, which can affect markets in
countries whose governments may not be as stable as our own. However, I
feel investing this 16% stake overseas, rather than in the U.S., could help
reduce the fund's volatility. Often, Japan or some other country will have
an up day while the U.S. markets go down, or vice versa.
Q. WHAT'S YOUR THINKING ON THE NEXT SIX MONTHS?
A. Interest rates have stopped falling and started rising. In addition, an
improving economy has led to stronger corporate earnings. I think all of
that means the stock market is making the transition from interest-rate
driven to earnings driven. That should help the fund, as the computer
models focus so closely on earnings estimates when making their stock
selections. That said, it's too early to tell whether higher rates will
slow economic growth and lessen corporate profits, not to mention what
effect they might have on market psychology. So while there may be reason
for optimism, there is also reason for caution. Hopefully, the neural
network will help keep the fund one step ahead of the broader market.
FUND FACTS
GOAL: to increase the value
of the fund's shares by using
quantitative analysis to target
individual stocks with the
greatest potential for growth
START DATE: September 28,
1990
SIZE: as of April 30, 1994,
more than $730 million
MANAGER: Brad Lewis, since
September 1990; manager,
Fidelity Disciplined Equity,
since December 1988, 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 programs.
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 stands a good chance of
beating the performance of
the overall market."
(bullet) The fund's stake in utility
stocks fell from 17.7% six
months ago to 3.0% on April
30. As interest rates went up,
utility dividend yields didn't rise
as quickly as bond yields,
making them less attractive
than many other
dividend-paying investments.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF APRIL 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
General Motors Corp. 2.4 0.0
Micron Technology 2.3 0.2
Ford Motor Co. 2.1 0.0
Compaq Computer Corp. 2.1 0.3
3Com Corp. 2.0 0.6
Penney, (J.C.) Co., Inc. 2.0 0.4
Caterpillar Inc. 1.9 0.0
Sprint Corporation 1.9 1.9
Gap Inc. 1.9 0.0
International Business Machines 1.9 0.0
Corporation
TOP FIVE INDUSTRIES AS OF APRIL 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO
Technology 21.6 5.5
Finance 15.8 26.4
Durables 12.2 2.2
Industrial Machinery & 8.1 0.9
Equipment
Retail & Wholesale 7.6 4.0
ASSET ALLOCATION
AS OF APRIL 30, 1994 AS OF OCTOBER 31, 1993
Row: 1, Col: 1, Value: 8.699999999999999
Row: 1, Col: 2, Value: 91.3
Row: 1, Col: 3, Value: 26.2
Row: 1, Col: 4, Value: 20.0
Row: 1, Col: 5, Value: 20.0
Row: 1, Col: 6, Value: 20.0
Row: 1, Col: 1, Value: 18.6
Row: 1, Col: 2, Value: 81.40000000000001
Row: 1, Col: 3, Value: 19.6
Row: 1, Col: 4, Value: 20.0
Row: 1, Col: 5, Value: 20.0
Row: 1, Col: 6, Value: 20.0
Stocks 91.3%
Short-term
Investments 8.7%
Stocks 81.4%
Short-term
Investments 18.6%
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investments
COMMON STOCKS - 91.3%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.2%
AEROSPACE & DEFENSE - 1.1%
Martin Marietta Corp. 98,500 $ 4,383,250
McDonnell Douglas Corp. 7,500 881,250
Precision Castparts Corp. 16,600 539,500
Sturm Ruger & Co., Inc. 13,800 441,600
Thiokol Corp. 33,200 800,950
UNC, Inc. (a) 50,100 501,000
7,547,550
DEFENSE ELECTRONICS - 0.1%
ESCO Electronics Corp. (a) 9,300 102,300
Watkins-Johnson Co. 22,300 719,175
821,475
TOTAL AEROSPACE & DEFENSE 8,369,025
BASIC INDUSTRIES - 1.2%
CHEMICALS & PLASTICS - 0.6%
Hercules, Inc. 12,100 1,300,750
Morton International, Inc. 12,100 1,055,725
Witco Corp. 60,000 1,755,000
4,111,475
IRON & STEEL - 0.6%
Bethlehem Steel Corp. (a) 168,100 3,383,013
Wheeling Pittsburgh Corp. (a) 65,800 1,085,700
4,468,713
METALS & MINING - 0.0%
Brush Wellman, Inc. 7,000 113,750
TOTAL BASIC INDUSTRIES 8,693,938
CONGLOMERATES - 0.5%
CONGLOMERATES - 0.5%
Harris Corp. 45,800 2,009,475
Tyco Laboratories, Inc. 38,500 1,823,938
3,833,413
CONSTRUCTION & REAL ESTATE - 3.5%
BUILDING MATERIALS - 0.9%
Armstrong World Industries, Inc. 96,500 5,404,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE - CONTINUED
BUILDING MATERIALS - CONTINUED
Patrick Industries, Inc. 9,600 $ 98,400
Ply-Gem Industries, Inc. 27,700 560,925
6,063,325
CONSTRUCTION - 1.3%
Continental Homes Holding Corp. 19,700 317,663
Daiwa House Industry Co. Ltd. 202,000 3,044,027
Fujita Corp. 277,000 1,677,878
Maeda Construction 180,000 2,021,078
Obayashi Corp. (a) 245,000 1,665,025
Toll Brothers, Inc. (a) 53,400 747,600
9,473,271
ENGINEERING - 0.2%
Aoki Corp. 360,000 1,666,501
REAL ESTATE - 1.1%
Cheung Kong Ltd. 550,000 2,598,805
Hong Kong Land Holdings Ltd. 1,000,000 2,809,170
Sun Hung Kai Properties Ltd. 400,000 2,407,860
7,815,835
TOTAL CONSTRUCTION & REAL ESTATE 25,018,932
DURABLES - 12.2%
AUTOS, TIRES, & ACCESSORIES - 9.6%
Aichi Machine Industries (a) 281,000 1,810,047
Breed Technologies, Inc. (a) 155,000 6,645,625
Chrysler Corp. 263,100 12,595,913
Cummins Engine Co., Inc. 74,300 3,213,475
Eaton Corp. 29,600 1,642,800
Ford Motor Co. 266,900 15,580,288
General Motors Corp. 312,600 17,740,050
Goodyear Tire & Rubber Co. 67,100 2,616,900
Honda Motor Co. Ltd. 248,000 4,103,614
PACCAR, Inc. 33,600 1,797,600
Superior Industries International, Inc. 45,400 1,407,400
69,153,712
CONSUMER ELECTRONICS - 1.1%
Email Ltd. 500,000 1,773,945
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
CONSUMER ELECTRONICS - CONTINUED
Harman International Industries, Inc. (a) 21,000 $ 653,625
Mr. Coffee, Inc. (a) 11,800 162,250
Sony Corp. 95,000 5,389,540
7,979,360
HOME FURNISHINGS - 0.1%
Bush Industries, Inc. Class A 12,700 357,188
TEXTILES & APPAREL - 1.4%
Farah, Inc. (a) 35,600 743,150
Haggar Corp. 29,300 835,050
Nautica Enterprises, Inc. (a) 144,550 3,902,850
Oxford Industries, Inc. 14,000 441,000
Pillowtex Corp. (a) 23,800 416,500
St. John Knits (a) 33,100 839,913
Wacoal Corp. 259,000 3,086,674
10,265,137
TOTAL DURABLES 87,755,397
ENERGY - 1.8%
ENERGY SERVICES - 0.4%
Energy Service, Inc. (a) 55,900 216,613
Input/Output, Inc. (a) 53,500 2,514,500
2,731,113
OIL & GAS - 1.4%
Ashland Oil, Inc. 151,700 5,878,375
KCS Group, Inc. 17,800 431,650
Nippon Oil Co. Ltd. 313,000 2,219,639
Ultramar Corporation 63,800 1,706,650
10,236,314
TOTAL ENERGY 12,967,427
FINANCE - 15.8%
BANKS - 10.5%
Aomori Bank Ltd. 261,000 1,640,087
Australia & New Zealand Banking Group Ltd. (a) 1,100,000 3,705,966
BayBanks, Inc. 29,700 1,700,325
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
Chase Manhattan Corp. 163,135 $ 5,546,590
Commonwealth Bank of Australia (b) 600,000 3,527,862
First Bank System, Inc. 22,200 768,675
First Chicago Corp. 45,100 2,384,663
First Interstate Bancorp 132,800 10,590,800
Fleet Financial Group, Inc. 93,400 3,525,850
Hokkaido Bank Ltd. 392,000 1,706,529
Hokuriku Bank Ltd. 222,000 1,537,141
Iwate Bank 62,700 3,396,533
Kiyo Bank Ltd. 273,000 1,667,094
National Australia Bank Ltd. 500,000 4,248,880
NationsBank Corp. 156,925 8,199,331
Nippon Trust Bank Ltd. Ord. 317,000 1,582,971
Signet Banking Corp. 80,911 3,307,237
Toho Bank Ord. 293,000 2,106,667
Wells Fargo & Co. 66,900 9,700,500
Westpac Banking Corp. 1,200,000 4,077,216
74,920,917
CREDIT & OTHER FINANCE - 2.8%
Daiei Finance, Inc. 332,000 2,821,983
First USA, Inc. 108,100 4,526,688
Foothill Group, Inc., Class A 78,700 1,082,125
Green Tree Acceptance, Inc. 151,300 7,943,250
MBNA Corp. 40,200 1,005,000
Orient Finance Co., Ltd. 247,000 1,690,782
United Companies Financial Corp. 25,500 918,000
19,987,828
INSURANCE - 1.4%
CMAC Investments (a) 15,900 429,300
Equitable Iowa Companies 9,800 346,675
Fidelity National Financial, Inc. 73,900 1,302,488
First American Financial Corp. California 10,900 307,925
Frontier Insurance Group, Inc. 1,900 87,875
Kemper Corp. 43,000 2,537,000
NWNL Companies, Inc. 42,800 1,439,150
Phoenix Re Corp. 28,000 658,000
Protective Life Corp. 10,600 449,175
SunAmerica, Inc. 35,600 1,303,850
UNUM Corp. 27,300 1,347,938
10,209,376
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
SAVINGS & LOANS - 0.0%
Dime Savings Bank of New York, FSB 25,400 $ 215,900
SECURITIES INDUSTRY - 1.1%
Alex. Brown, Inc. 17,200 462,250
Bear Stearns Companies, Inc. 49,900 1,054,138
Franklin Resources, Inc. 36,700 1,390,013
Legg Mason, Inc. 21,800 465,975
Price (T. Rowe) Associates, Inc. 39,800 1,134,300
Salomon, Inc. 74,800 3,627,800
8,134,476
TOTAL FINANCE 113,468,497
HEALTH - 5.6%
DRUGS & PHARMACEUTICALS - 0.9%
Daiichi Seiyaku Co. Ltd. 217,000 3,355,560
Takeda Chemical Industries Ltd. 259,000 3,061,165
6,416,725
MEDICAL EQUIPMENT & SUPPLIES - 1.0%
Cordis Corp. (a) 23,900 1,105,375
Kendall International, Inc. (a) 36,600 1,697,325
Medtronic, Inc. 52,700 3,972,263
6,774,963
MEDICAL FACILITIES MANAGEMENT - 3.7%
Beverly Enterprises, Inc. (a) 63,000 834,750
Community Psychiatric Centers 30,500 442,250
Employee Benefit Plans, Inc. (a) 15,800 165,900
Foundation Health Corp. (a) 6,000 235,500
HealthTrust, Inc. - The Hospital Co. 26,700 780,975
Humana, Inc. (a) 298,400 5,520,400
Mid-Atlantic Medical Services, Inc. 115,900 5,925,388
United HealthCare Corp. 64,700 2,685,050
U.S. Healthcare, Inc. 267,900 10,046,250
26,636,463
TOTAL HEALTH 39,828,151
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - 8.1%
ELECTRICAL EQUIPMENT - 0.7%
BMC Industries, Inc. (a) 11,400 $ 294,975
Hutchison Whampoa Ltd. Ord. 670,000 2,753,827
Mitsubishi Electric Co. Ord. 295,000 1,760,761
4,809,563
INDUSTRIAL MACHINERY & EQUIPMENT - 7.4%
AGCO Corp. 168,300 7,426,238
Boral Ltd. Ord. 870,000 2,258,990
Briggs & Stratton Corp. 42,100 3,546,925
Caterpillar, Inc. 129,100 14,184,863
Clark Equipment Co. (a) 157,500 10,749,375
Deere & Co. 161,100 12,364,425
Indresco, Inc. (a) 15,800 209,350
Kennametal, Inc. 38,800 1,959,400
Regal-Beloit Corp. 5,900 160,038
Varlen Corp. 4,400 82,500
52,942,104
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 57,751,667
MEDIA & LEISURE - 4.3%
BROADCASTING - 1.2%
Capital Cities/ABC, Inc. 6,500 4,615,000
CBS, Inc. 11,900 3,605,700
8,220,700
LEISURE DURABLES & TOYS - 2.2%
Callaway Golf Co. 234,500 9,292,063
Mattel, Inc. 195,125 4,902,516
Nintendo Co. Ltd. Ord. (a) 24,000 1,543,583
Winnebago Industries, Inc. (a) 28,900 354,025
16,092,187
LODGING & GAMING - 0.1%
La Quinta Motor Inns, Inc. 18,650 580,481
Video Lottery Technologies, Inc. 11,500 176,813
757,294
PUBLISHING - 0.4%
Sing Tao Holdings Ltd. 2,000,000 2,744,440
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - 0.4%
Cafe De Coral Holdings Ltd. 4,500,000 $ 2,781,675
TOTAL MEDIA & LEISURE 30,596,296
NONDURABLES - 1.6%
BEVERAGES - 0.3%
Kirin Brewery Co. Ltd. 180,000 2,162,907
FOODS - 0.8%
Archer-Daniels-Midland Co. 214,300 4,928,900
CSR Ltd. 70,000 240,341
Hudson Foods, Inc. Class A 49,200 756,450
5,925,691
HOUSEHOLD PRODUCTS - 0.5%
Premark International, Inc. 12,100 955,900
Shiseido Co. Ltd. 177,000 2,074,559
Stanhome, Inc. 13,400 443,875
3,474,334
TOTAL NONDURABLES 11,562,932
PRECIOUS METALS - 0.3%
Hecla Mining Co. (a) 186,700 2,123,713
RETAIL & WHOLESALE - 7.6%
APPAREL STORES - 2.0%
American Eagle Outfitters, Inc. 1,600 25,000
Claire's Stores, Inc. 17,600 297,000
Gap, Inc. 297,600 14,024,400
United States Shoe Corp. 17,000 306,000
14,652,400
DRUG STORES - 0.1%
General Nutrition Companies, Inc. (a) 24,800 601,400
Revco (D.S.), Inc. (a) 9,500 160,313
761,713
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - 3.1%
Federated Department Stores, Inc. (a) 59,700 $ 1,276,088
May Department Stores Co. (The) 140,100 5,866,688
Meyer (Fred), Inc. (a) 3,800 156,750
Penney (J.C.) Co., Inc. 273,800 14,853,650
22,153,176
GROCERY STORES - 1.5%
Dairy Farm International Holdings Ltd. Ord. 2,000,000 2,925,680
Kroger Co. (The) (a) 136,100 3,096,275
Safeway, Inc. (a) 179,400 4,462,575
10,484,530
RETAIL & WHOLESALE, MISC - 0.9%
Best Buy Co., Inc. (a) 87,000 3,142,875
BMC West Corp. (a) 1,600 46,800
Damark International, Inc. Class A 11,400 276,450
Good Guys, Inc. 20,900 323,950
Land's End, Inc. (a) 17,600 818,400
Nichimen Corp. Ltd. 372,000 1,645,110
6,253,585
TOTAL RETAIL & WHOLESALE 54,305,404
SERVICES - 0.6%
PRINTING - 0.4%
Merrill Corp. 9,500 218,500
New England Business Service, Inc. 6,300 126,788
Reynolds & Reynolds Co. Class A 115,200 2,448,000
2,793,288
SERVICES - 0.2%
Devry, Inc. (a) 9,700 266,750
Pittston Company Services Group 60,500 1,512,500
1,779,250
TOTAL SERVICES 4,572,538
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - 21.6%
COMMUNICATIONS EQUIPMENT - 2.3%
Cabletron Systems, Inc. (a) 12,000 $ 1,236,000
3Com Corp. (a) 254,300 14,956,019
16,192,019
COMPUTER SERVICES & SOFTWARE - 0.5%
Computer Horizons Corp. (a) 9,700 97,000
Educational Insights, Inc. 9,100 83,038
Equifax Inc. 7,000 191,625
Landmark Graphics Corp. (a) 20,100 648,225
MicroAge, Inc. (a) 56,800 1,448,400
Oracle Systems Corp. (a) 5,000 149,375
VMark Software, Inc. (a) 43,700 874,000
3,491,663
COMPUTERS & OFFICE EQUIPMENT - 5.8%
Comdisco, Inc. 8,300 167,038
Compaq Computer Corp. (a) 139,000 15,429,000
Cray Research, Inc. (a) 56,800 1,214,100
Exabyte 60,600 1,174,125
International Business Machines Corp. 240,000 13,740,000
Merisel, Inc. 89,600 1,551,200
RICOH Co. Ltd. Ord. 291,000 2,476,352
Sequoia Systems, Inc. 1,000 5,000
Xerox Corp. 60,500 5,981,938
41,738,753
ELECTRONIC INSTRUMENTS - 4.3%
Applied Materials, Inc. (a) 238,100 10,595,450
Electro Scientific Industries, Inc. (a) 103,500 1,112,625
KLA Instruments Corp. (a) 132,100 5,564,713
Lam Research Corp. (a) 109,800 3,321,450
Silicon Valley Group, Inc. (a) 86,600 941,775
Tektronix, Inc. 43,700 1,321,925
Teradyne, Inc. (a) 256,200 6,052,725
Varian Associates, Inc. 59,000 2,094,500
31,005,163
ELECTRONICS - 8.2%
Atmel Corp. (a) 241,000 5,964,750
Augat, Inc. (a) 7,200 148,500
Flextronics International 7,900 86,900
Hitachi, Ltd. 759,000 7,176,595
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Integrated Device Technology, Inc. (a) 253,800 $ 7,645,725
Marshall Industries (a) 19,100 494,213
Methode Electronics, Inc. Class A 1,000 15,750
Micron Technology, Inc. 449,750 16,472,094
National Semiconductor Corp. (a) 348,500 7,187,813
Pioneer-Standard Electronics, Inc. 6,000 162,000
Tencor Instruments 6,300 118,125
Texas Instruments, Inc. 170,000 13,005,000
58,477,465
PHOTOGRAPHIC EQUIPMENT - 0.5%
Fuji Photo Film Co. Ltd. 176,000 3,796,316
TOTAL TECHNOLOGY 154,701,379
TRANSPORTATION - 2.4%
AIR TRANSPORTATION - 1.1%
Cathay Pacific Airways Ltd. 2,000,000 2,899,780
SkyWest, Inc. 64,500 2,491,313
Southwest Airlines Co. 86,300 2,686,088
8,077,181
SHIPPING - 0.5%
American President Companies, Ltd. 41,200 839,450
Shun Tak Holdings Ltd. 2,500,000 2,670,000
3,509,450
TRUCKING & FREIGHT - 0.8%
Airborne Freight Corp. 62,500 2,296,875
Federal Express Corp. (a) 46,000 3,507,500
5,804,375
TOTAL TRANSPORTATION 17,391,006
UTILITIES - 3.0%
ELECTRIC UTILITY - 0.3%
Australian Gas Light Co. 600,000 1,922,724
GAS - 0.5%
Coastal Corp. (The) 68,800 2,175,800
MCN Corp. 32,200 1,283,972
3,459,772
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 2.2%
ALC Communications Corp. (a) 62,400 $ 2,207,400
Sprint Corporation 381,800 14,031,150
16,238,550
TOTAL UTILITIES 21,621,046
TOTAL COMMON STOCKS
(Cost $607,582,474) 654,560,761
U.S. TREASURY OBLIGATIONS - 0.8%
PRINCIPAL
AMOUNT
U.S. Treasury Bills, yields at date of purchase
3.58% to 3.63%, 7/7/94
(Cost $5,462,869) $ 5,500,000 5,461,995
REPURCHASE AGREEMENTS - 7.9%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations),
in a joint trading account
at 3.56% dated 4/29/94 due 5/2/94 $ 56,771,856 56,755,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $669,800,343) $ 716,777,756
LEGEND
1. Non-income producing
2. 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 $3,527,862 or .5% of net
assets.
OTHER INFORMATION
Distribution of investments by country, as a percentage of total value of
investment in securities, is as follows:
United States 83.4%
Japan 10.2
Hong Kong 3.4
Australia 3.0
TOTAL 100.0%
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $669,804,552. Net unrealized appreciation aggregated
$46,973,204, of which $70,698,445 related to appreciated investment
securities and $23,725,241 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 $ 716,777,756
agreements of $56,755,000) (cost $669,800,343)
(Notes 1 and 2) - See accompanying schedule
Cash 685
Receivable for investments sold 12,190,466
Receivable for fund shares sold 6,309,866
Dividends receivable 944,789
Other receivables 1,115
TOTAL ASSETS 736,224,677
LIABILITIES
Payable for investments purchased $ 3,397,320
Payable for fund shares redeemed 2,038,052
Accrued management fee 425,157
Other payables and accrued expenses 273,086
TOTAL LIABILITIES 6,133,615
NET ASSETS $ 730,091,062
Net Assets consist of (Note 1):
Paid in capital $ 662,172,545
Undistributed net investment income 2,019,487
Accumulated undistributed net realized gain (loss) on 18,921,617
investments
Net unrealized appreciation (depreciation) on investment 46,977,413
securities
NET ASSETS, for 37,992,371 shares outstanding $ 730,091,062
NET ASSET VALUE, offering price and redemption price per $19.22
share ($730,091,062 (divided by) 37,992,371 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 5,378,971
Dividends
Interest 1,675,056
TOTAL INCOME 7,054,027
EXPENSES
Management fee (Note 4) $ 2,044,196
Basic fee
Performance adjustment 297,721
Transfer agent fees (Note 4) 1,048,657
Accounting fees and expenses (Note 4) 174,500
Non-interested trustees' compensation 1,970
Custodian fees and expenses 28,037
Registration fees 95,333
Audit 20,062
Legal 4,442
Interest (Note 5) 3,707
Miscellaneous 4,190
Total expenses before reductions 3,722,815
Expense reductions (Note 6) (107,555) 3,615,260
NET INVESTMENT INCOME 3,438,767
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1, 2 AND 3)
Net realized gain (loss) on:
Investment securities 27,205,281
Futures contracts (4,001,650) 23,203,631
Change in net unrealized appreciation (depreciation) on:
Investment securities (15,283,650)
Futures contracts (1,025,725) (16,309,375)
NET GAIN (LOSS) 6,894,256
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 10,333,023
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 $ 3,438,767 $ 6,992,190
Net investment income
Net realized gain (loss) on investments 23,203,631 34,328,537
Change in net unrealized appreciation (depreciation) (16,309,375) 45,704,313
on
investments
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 10,333,023 87,025,040
FROM OPERATIONS
Distributions to shareholders (7,235,488) (1,691,009)
From net investment income
From net realized gain (31,957,927) (5,411,648)
TOTAL DISTRIBUTIONS (39,193,415) (7,102,657)
Share transactions 558,255,461 535,316,405
Net proceeds from sales of shares
Reinvestment of distributions 38,405,404 6,882,298
Cost of shares redeemed (437,135,718) (283,674,942)
Net increase (decrease) in net assets resulting from 159,525,147 258,523,761
share
transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 130,664,755 338,446,144
NET ASSETS
Beginning of period 599,426,307 260,980,163
End of period (including undistributed net investment $ 730,091,062 $ 599,426,307
income of $2,019,487 and $8,267,178, respectively)
OTHER INFORMATION
Shares
Sold 28,811,509 29,065,365
Issued in reinvestment of distributions 2,080,466 400,825
Redeemed (22,643,937) (15,281,181)
Net increase (decrease) 8,248,038 14,185,009
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED OCTOBER 31, SEPTEMBER 28,
ENDED 1990
APRIL 30, (COMMENCEMENT
1994 OF
OPERATIONS) TO
OCTOBER 31,
(UNAUDITED) 1993 1992 1991 1990
SELECTED PER-SHARE DATA
Net asset value, $ 20.15 $ 16.77 $ 15.19 $ 9.80 $ 10.00
beginning of period
Income from Investment
Operations
Net investment income .07 .19 .16 .12 .02
Net realized and .30 3.61 1.97 5.30 (.22)
unrealized gain
(loss) on
investments
Total from investment .37 3.80 2.13 5.42 (.20)
operations
Less Distributions
From net investment (.24) (.10) (.08) (.03) -
income
From net realized (1.06) (.32) (.47) - -
gain
Total distributions (1.30) (.42) (.55) (.03) -
Net asset value, end of $ 19.22 $ 20.15 $ 16.77 $ 15.19 $ 9.80
period
TOTAL RETURN (dagger)(double dagger) 2.10% 23.09 14.63 55.43 (2.00)%
% % %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 730,091 $ 599,426 $ 260,980 $ 98,737 $ 686
(000 omitted)
Ratio of expenses to 1.12%* 1.10 1.22 1.43 2.50%*(diamond)
average net assets ** % % %
Ratio of expenses to 1.15%* 1.11 1.22 1.43 2.50%*(diamond)
average net assets % % %
before expense
reductions **
Ratio of net investment 1.06%* 1.52 1.43 1.20 2.27%*
income to average % % %
net assets
Portfolio turnover rate 238%* 192 268 317 207%*
% % %
</TABLE>
* ANNUALIZED.
** SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS.
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(double dagger) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(diamond) LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994 (Unaudited)
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Stock Selector (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 practicable 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
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
futures and options transactions, foreign currency transactions,
partnerships, non-taxable dividends, and losses deferred due to wash sales,
futures and options and excise tax regulations. The fund also utilized
earnings and profits distributed to shareholders on redemption of shares as
a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective May 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 April 30, 1993 have been reclassified to reflect
an increase in paid in capital of $6,413,609, a decrease in undistributed
net investment income of $1,483,058, and a decrease in accumulated net
realized gain on investments of $4,930,551.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. These contracts involve market risk in excess of the
amount reflected in the fund's Statement of Assets and Liabilities. The
face or contract amount in U.S. dollars reflects the total exposure the
fund has in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and presented net on the Statement of
Assets and Liabilities. Gain (loss) on the purchase or sale of forward
foreign currency contracts having the same settlement date and broker is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
2. OPERATING POLICIES -
CONTINUED
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other 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.
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.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by the
SEC, the fund, along with other registered investment companies having
management contracts with FMR, may participate in an interfund lending
program. This program provides an alternative credit facility allowing the
fund to borrow from, or lend money to, other participating funds.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $800,628,878 and $670,672,213, respectively.
The market value of futures contracts opened and closed amounted to
$140,444,150 and $190,903,925, 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
fee rate is the weighted average of a series of rates ranging from .31% to
.52% and is based on the monthly average net assets of all the mutual funds
advised by FMR. The annual individual fund fee rate is .30%. The basic fee
is subject to a performance adjustment (up to a maximum of + or - .20%)
based on the fund's investment performance as compared to the appropriate
index over a specified period of time. For the period, the management fee
was equivalent to an annualized rate of .72% 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 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. Fidelity Service Co. (FSC), an affiliate of FMR, 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 $130,134 for the period.
5. INTERFUND LENDING
PROGRAM.
The fund participated in the interfund lending program as a borrower. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $10,622,000 and $10,622,000,
respectively. The weighted average interest rate was 4.19%. Interest
expense includes $3,707 paid under the 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 $17,937,000 and $16,013,750,
respectively. The weighted average interest rate was 3.62%. Interest earned
from the interfund lending program amounted to $6,423 and is included in
interest income on the Statement of Operations.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$107,555 under this arrangement.
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
