(2_FIDELITY_LOGOS)FIDELITY
VALUE
FUND
ANNUAL REPORT
OCTOBER 31, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 22 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 26 Notes to the financial statements.
REPORT OF INDEPENDENT 30 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 31
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets have been fairly positive this year, no one can
predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different types of stock
funds or in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Value 14.19% 155.33% 278.38%
S&P 500(registered trademark) 26.44% 121.65% 321.74%
Average Capital Appreciation Fund 21.09% 135.99% 263.56%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one, five, or 10 years. For example, if
you invested $1,000 in a fund that had a 5% return over the past year, the
value of your investment would be $1,050. You can compare the fund's
returns to the performance of the Standard & Poor's Composite Index of 500
Stocks - a common proxy for the U.S. stock market. To measure how the fund
stacked up against its peers, you can compare it to the average capital
appreciation fund, which reflects the performance of 150 capital
appreciation funds with similar objectives tracked by Lipper Analytical
Services over the past 12 months. Both benchmarks include reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Value 14.19% 20.62% 14.23%
S&P 500(registered trademark) 26.44% 17.26% 15.48%
Average Capital Appreciation Fund 21.09% 18.05% 12.97%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Value (039)Standard &
10/31/85 10000.00 10000.00
11/30/85 10478.07 10686.00
12/31/85 10934.00 11203.20
01/31/86 11315.88 11265.94
02/28/86 12024.38 12108.63
03/31/86 12873.58 12784.29
04/30/86 12677.61 12639.83
05/31/86 13034.37 13312.27
06/30/86 13240.39 13537.25
07/31/86 12707.76 12780.52
08/31/86 13371.03 13728.83
09/30/86 12732.88 12593.46
10/31/86 13310.73 13320.10
11/30/86 13154.96 13643.78
12/31/86 12545.20 13295.86
01/31/87 13409.05 15086.81
02/28/87 13959.42 15682.74
03/31/87 14048.37 16135.97
04/30/87 13820.44 15992.36
05/31/87 14159.55 16131.50
06/30/87 14632.09 16946.14
07/31/87 15821.79 17805.31
08/31/87 15532.70 18469.44
09/30/87 15610.53 18064.96
10/31/87 11680.10 14173.77
11/30/87 10801.73 13005.85
12/31/87 11468.85 13995.60
01/31/88 11902.47 14584.81
02/29/88 13003.22 15264.46
03/31/88 12919.83 14792.79
04/30/88 12886.47 14956.99
05/31/88 12858.68 15087.12
06/30/88 13403.49 15779.62
07/31/88 13459.08 15719.65
08/31/88 13308.98 15185.19
09/30/88 14276.30 15832.07
10/31/88 15110.19 16272.21
11/30/88 14476.43 16039.51
12/31/88 14800.21 16320.21
01/31/89 15383.38 17514.84
02/28/89 15032.35 17078.72
03/31/89 15672.14 17476.66
04/30/89 16532.75 18383.70
05/31/89 17064.97 19128.24
06/30/89 17557.55 19019.21
07/31/89 19193.84 20736.64
08/31/89 19267.45 21143.08
09/30/89 18905.09 21056.39
10/31/89 17642.48 20567.88
11/30/89 18072.79 20987.47
12/31/89 18196.12 21491.17
01/31/90 16551.63 20049.11
02/28/90 16645.78 20307.74
03/31/90 17016.10 20845.90
04/30/90 16871.74 20324.75
05/31/90 17963.88 22306.42
06/30/90 17417.81 22154.73
07/31/90 17254.61 22083.84
08/31/90 15741.93 20087.46
09/30/90 15158.20 19109.20
10/31/90 14819.26 19027.03
11/30/90 15490.87 20256.18
12/31/90 15863.02 20821.32
01/31/91 16705.54 21729.13
02/28/91 17712.61 23282.76
03/31/91 18061.47 23846.21
04/30/91 18298.42 23903.44
05/31/91 19318.66 24936.07
06/30/91 18423.49 23794.00
07/31/91 19325.24 24902.80
08/31/91 19792.58 25492.99
09/30/91 19641.19 25067.26
10/31/91 19871.56 25403.16
11/30/91 18739.43 24379.41
12/31/91 20018.44 27168.42
01/31/92 20846.32 26663.09
02/29/92 21660.63 27009.71
03/31/92 21477.41 26483.02
04/30/92 22081.36 27261.62
05/31/92 22305.29 27395.20
06/30/92 22013.50 26987.01
07/31/92 22712.45 28090.78
08/31/92 22183.15 27514.92
09/30/92 22576.73 27839.59
10/31/92 22671.73 27937.03
11/30/92 23669.26 28889.69
12/31/92 24252.42 29245.03
01/31/93 24917.90 29490.69
02/28/93 25048.25 29891.76
03/31/93 26276.31 30522.48
04/30/93 26420.39 29783.83
05/31/93 26969.24 30582.04
06/30/93 26969.24 30670.73
07/31/93 27545.53 30548.04
08/31/93 28506.02 31705.81
09/30/93 28492.30 31461.68
10/31/93 29349.89 32112.94
11/30/93 28753.01 31807.86
12/31/93 29815.22 32192.74
01/31/94 31364.16 33287.29
02/28/94 31082.54 32385.21
03/31/94 29859.69 30973.21
04/30/94 30548.93 31369.67
05/31/94 30993.60 31884.13
06/30/94 30963.96 31102.97
07/31/94 31927.41 32123.15
08/31/94 33061.32 33440.20
09/30/94 32579.60 32620.91
10/31/94 33135.44 33354.88
11/30/94 31645.79 32140.10
12/31/94 32089.74 32616.73
01/31/95 31720.17 33462.49
02/28/95 32671.62 34766.52
03/31/95 33623.07 35792.48
04/30/95 34385.80 36846.57
05/31/95 35148.53 38319.33
06/30/95 35557.42 39209.48
07/31/95 36964.93 40509.67
08/31/95 37381.68 40611.35
09/30/95 38631.93 42325.15
10/31/95 37837.75 42174.05
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Value
Fund on October 31, 1985. As the chart shows, by October 31, 1995, the
value of your investment would have grown to $37,838 - a 278.38% 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 $42,174 - a 321.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Strong corporate earnings and a
favorable interest rate
environment helped the U.S.
stock market post robust returns
for the 12 months ended October
31, 1995. The Standard & Poor's
Composite Index of 500 Stocks
finished the 12-month period with
a total return of 26.44% - well
above its historical annual
average of roughly 12%. With
inflation posing little threat, interest
rates fell during the first half of
1995. The Federal Reserve Board
cut the federal funds rate - the
rate banks charge each other for
overnight loans - by 0.25% on
July 6 to 5.75%.
Large-capitalization stocks led the
rally. Technology companies -
whose goods and services
benefited from both corporate and
consumer demand - posted the
strongest earnings growth and
stock price gains. Lower interest
rates and continued merger and
acquisition activity helped
financial stocks perform especially
well. In June, the Dow Jones
Industrial Average closed above
4500 for the first time. Returns
from foreign markets suffered as
investors brought capital back to
the U.S. The Morgan Stanley
Emerging Markets Free Index
was down 19.43% for the 12
months ended October 31. The
Morgan Stanley EAFE (Europe,
Australia, Far East) Index was
down 0.37% for the year ended
October 31. European markets
have fared well through the first 10
months of 1995, while the
Japanese market has struggled
through much of the year.
An interview with Bettina Doulton, Portfolio Manager of Fidelity Value Fund
Q. HOW HAS THE FUND PERFORMED, BETTINA?
A. For the 12 months ended October 31, 1995, the fund had a total return of
14.19%, compared to a 21.09% return for the average capital appreciation
fund tracked by Lipper Analytical Services during the same period.
Q. WHY DID THE FUND TRAIL THE AVERAGE FUND?
A. During the first part of the year, the fund's stake in cyclical stocks -
those that tend to move in step with the economy - and Japanese investments
dampened returns. Cyclicals had fallen out of favor and Japanese companies
were struggling against the effects of a strong yen, among other factors.
Since I assumed management of the fund at the end of March, the fund lagged
due to two factors. One factor had to do with my repositioning of the fund
so that it included stocks that reflected my market outlook and particular
value-oriented approach. Sorting through stocks, studying them, and
deciding what to keep and what to sell during the market's sharp rise
impacted performance. The portfolio now is invested according to my market
outlook. Second, the fund has been relatively underweighted in the
technology sector, which has been a market leader for the past year.
Q. WHAT LED YOU AWAY FROM INVESTING MORE IN TECHNOLOGY STOCKS?
A. Concerns that demand for personal computers and associated products
would falter with an economic slowdown, and that capacity expansions would
depress prices and earnings, caused me to stay largely away from the
technology sector. To date, these concerns have been unfounded. Recognizing
that corporations are dedicating a growing portion of capital spending
budgets to technology investments, I will look for opportunities to add to
this sector weighting.
Q. LET'S TURN TO THOSE INVESTMENTS THAT HAVE HELPED THE FUND'S PERFORMANCE
. . .
A. Beyond technology, finance - where I had 19% of the fund's assets at the
end of the period - is another sector that has done well. This sector has
attractive earnings growth potential and valuations - prices relative to
other measures such as earnings - especially in an environment where the
earnings outlook for the market is less positive. The finance weighting is
made up of a combination of insurance companies, banks, mortgage agencies
and credit companies. Citicorp - one of the fund's largest holdings -
should see strong earnings-per-share growth as its credit card business
grows in emerging markets, costs are controlled and excess cash is used to
repurchase shares. Business prospects for the mortgage companies such as
the Federal National Mortgage Association (Fannie Mae) are the best in
years. American Express, benefiting from the restructuring that reduced its
costs, is positioned for potentially strong earnings growth because of
improved marketing of existing and new card products.
Q. YOU'VE ALSO INCREASED INVESTMENTS IN AEROSPACE AND DEFENSE STOCKS . . .
A. Yes. The defense industry is in the midst of a major consolidation.
Merger-related synergies are allowing defense contractors to be more
competitive in their bidding and to increase earnings and cash flow. The
stocks remain relatively cheap and could get an added boost if the defense
budget rises. Some favorites in the sector include Raytheon, General
Dynamics, and United Technologies - a conglomerate involved in defense and
aerospace.
Q. PHILIP MORRIS IS THE FUND'S LARGEST INVESTMENT AT THE END OF THE PERIOD,
AT 4.3%. HOW HAS IT DONE?
A. It's done very well. The domestic business has been propelled by gains
in market share for its Marlboro brand. More importantly, volumes and
profitability in its international tobacco business have increased. Also,
Philip Morris' management is focused on enhancing shareholder value through
dividend increases and share repurchases.
Q. TURNING TO THE FUTURE, WHAT DO YOU SEE LOOKING OUT OVER THE NEXT SIX
MONTHS?
A. I think the market could be difficult over the short term. Corporate
earnings could be pressured by weak domestic demand if consumer spending is
lackluster and because of a massive inventory liquidation. In addition,
many foreign economies have slumped, thus reducing demand for U.S. exports.
However, lower interest rates could keep the market moving to the upside.
If Congress passes a deficit reduction plan, there is a good chance the
Federal Reserve Board would lower short-term interest rates. A choppy
market could create some good buying opportunities.
FUND FACTS
GOAL: to increase the value of
the fund's shares by investing
in companies that own
valuable assets or are
undervalued in the
marketplace
START DATE: December 1,
1978
SIZE: as of October 31, 1995,
more than $5 billion
MANAGER: Bettina Doulton,
since March 1995; manager,
Fidelity Advisor
Equity-Income Fund and
VIP: Equity-Income Portfolio,
since 1993; joined Fidelity in
1986
(checkmark)
BETTINA DOULTON ON THE
DIFFERENT TYPES OF VALUE:
"For me, stocks can hold four
different `flavors' of value. First,
there is earnings growth value.
These are companies whose
growth prospects I believe the
market underappreciates.
Currently, I find more of these
than the other three types, and
examples include Citicorp and
Philip Morris. Second, there is
free cash flow value. These are
companies that are generating
excess cash flow that can be
utilized to benefit shareholders
in the form of
growth-enhancing acquisitions,
dividend increases or share
repurchases. Third, there are
comparative values. These are
stocks that are trading at
attractive valuations rela- tive to
their peers or on a historical
basis. Finally, there are net
asset values. These are at the
heart of tra- ditional value
investing. In this case, stocks
are priced cheaply in relation to
their break-up value - the
underlying values of their fixed
assets."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF OCTOBER 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Philip Morris Companies, Inc. 4.3 2.2
Federal National Mortgage 3.4 1.4
Association
American Express Co. 2.5 2.6
NYNEX Corp. 1.7 1.3
Schlumberger Ltd. 1.7 2.6
Citicorp 1.5 0.0
British Petroleum PLC ADR 1.5 1.8
United Technologies Corp. 1.5 1.7
BellSouth Corp. 1.4 0.2
Burlington Northern Santa Fe Corp. 1.3 0.6
TOP FIVE MARKET SECTORS AS OF OCTOBER 31, 1995
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Finance 19.0 10.7
Energy 8.0 12.4
Nondurables 7.9 6.1
Utilities 6.6 3.6
Health 6.5 3.8
ASSET ALLOCATION
AS OF OCTOBER 31, 1995* AS OF APRIL 30, 1995**
Stocks 86.4%
Bonds 5.6%
Short-term
investments 8.0%
FOREIGN
INVESTMENTS 6.4%
Stocks 87.6%
Bonds 0.8%
Short-term
investments 11.6%
FOREIGN
INVESTMENTS 15.4%
Row: 1, Col: 1, Value: 8.0
Row: 1, Col: 2, Value: 5.6
Row: 1, Col: 3, Value: 46.4
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 1, Value: 11.6
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 46.1
Row: 1, Col: 4, Value: 40.0
*
**
INVESTMENTS OCTOBER 31, 1995
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 86.2%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 5.5%
AEROSPACE & DEFENSE - 3.6%
Boeing Co. 70,000 $ 4,594
Flightsafety International, Inc. 700,100 33,430
General Motors Corp. Class H 259,000 10,878
Lockheed Martin Corp. 429,800 29,280
McDonnell Douglas Corp. 418,800 34,237
Precision Castparts Corp. 235,800 8,430
Rockwell International Corp. 656,000 29,192
Sundstrand Corp. 373,400 22,871
Thiokol Corp. 281,800 9,757
182,669
DEFENSE ELECTRONICS - 1.3%
Litton Industries, Inc. (a) 651,700 25,824
Raytheon Co. 867,400 37,840
63,664
SHIP BUILDING & REPAIR - 0.6%
General Dynamics Corp. 573,800 31,774
TOTAL AEROSPACE & DEFENSE 278,107
BASIC INDUSTRIES - 5.5%
CHEMICALS & PLASTICS - 3.7%
Betz Laboratories, Inc. 301,300 12,127
du Pont (E.I.) de Nemours & Co. 542,300 33,820
Ferro Corp. 613,700 14,192
Grace (W.R.) & Co. 68,400 3,813
Great Lakes Chemical Corp. 20,600 1,383
Hercules, Inc. 435,400 23,239
Nalco Chemical Co. 815,800 24,474
Raychem Corp. 702,600 32,583
Union Carbide Corp. 992,800 37,602
183,233
IRON & STEEL - 0.3%
Nucor Corp. 332,100 15,982
METALS & MINING - 0.9%
Alcan Aluminium Ltd. 770,479 24,427
Aluminum Co. of America 447,000 22,797
47,224
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PACKAGING & CONTAINERS - 0.3%
Crown Cork & Seal Co., Inc. (a) 355,000 $ 12,381
PAPER & FOREST PRODUCTS - 0.3%
James River Corp. of Virginia 500,900 16,091
TOTAL BASIC INDUSTRIES 274,911
CONGLOMERATES - 3.0%
ITT Corp. 291,000 35,648
Tyco International Ltd. 673,942 40,942
United Technologies Corp. 818,500 72,642
149,232
CONSTRUCTION & REAL ESTATE - 0.6%
BUILDING MATERIALS - 0.1%
Cooper Cameron Corp. (a) 252,652 6,411
CONSTRUCTION - 0.1%
Pulte Corp. 109,200 3,453
REAL ESTATE INVESTMENT TRUSTS - 0.4%
Cali Realty Corp. 21,000 410
Kimco Realty Corp. 142,700 5,262
Liberty Property Trust (SBI) 185,100 3,748
Storage Equities, Inc. 664,800 12,216
21,636
TOTAL CONSTRUCTION & REAL ESTATE 31,500
DURABLES - 5.9%
AUTOS, TIRES, & ACCESSORIES - 3.5%
Bandag, Inc. 280,400 14,371
Chrysler Corp. 1,030,000 53,174
General Motors Corp. 844,319 36,939
Genuine Parts Co. 448,100 17,756
Johnson Controls, Inc. 234,600 13,665
PACCAR, Inc. 58,900 2,459
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES - CONTINUED
SPX Corp. 552,800 $ 8,568
Snap-on Tools Corp. 618,100 26,192
173,124
CONSUMER ELECTRONICS - 0.6%
Whirlpool Corp. 579,900 30,735
HOME FURNISHINGS - 0.6%
Miller (Herman), Inc. 915,000 27,107
Leggett & Platt, Inc. 122,800 2,947
30,054
TEXTILES & APPAREL - 1.2%
Kellwood Co. 313,300 5,874
Mohawk Industries, Inc. (a) 130,100 1,952
Warnaco Group, Inc. Class A 1,180,500 27,447
Westpoint Stevens, Inc. Class A 1,237,000 26,132
61,405
TOTAL DURABLES 295,318
ENERGY - 8.0%
ENERGY SERVICES - 3.9%
BJ Services Co. (a) 559,986 13,160
Halliburton Co. 519,600 21,563
McDermott International, Inc. 114,200 1,813
Nabors Industries, Inc. (a) 554,300 4,781
Production Operators Corp. 346,000 10,380
Schlumberger Ltd. 1,388,900 86,459
Sonat Offshore Drilling, Inc. 82,100 2,607
Tidewater, Inc. 670,700 17,690
Weatherford Enterra, Inc. (a) 1,445,247 34,867
193,320
OIL & GAS - 4.1%
Amerada Hess Corp. 966,000 43,591
British Petroleum PLC ADR 838,283 73,978
Canada Occidental Petroleum Ltd. 759,600 22,316
Coastal Corp. (The) 164,500 5,326
Kelley Oil & Gas Corp. (a) 915,000 2,288
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Occidental Petroleum Corp. 975,000 $ 20,963
Petro-Canada 193,800 2,090
Petro-Canada 1st Installment
Receipt (a)(c) 236,000 1,141
Total SA:
Class B 51,096 3,163
sponsored ADR 1,030,000 31,801
206,657
TOTAL ENERGY 399,977
FINANCE - 19.0%
BANKS - 5.3%
Bank of Boston Corp. 151,222 6,729
Chase Manhattan Corp. 134,219 7,650
Chemical Banking Corp. 1,048,500 59,633
Citicorp 1,192,000 77,331
First Interstate Bancorp 289,000 37,281
First Union Corp. 425,600 21,120
Fleet Financial Group, Inc. 253,261 9,814
KeyCorp. 474,700 16,021
NationsBank Corp. 400,000 26,300
Shawmut National Corp. 141,200 4,783
266,662
CREDIT & OTHER FINANCE - 2.5%
American Express Co. 3,079,203 125,093
Household International, Inc. 273 15
125,108
FEDERAL SPONSORED CREDIT - 4.5%
Federal Home Loan Mortgage
Corporation 793,800 54,971
Federal National Mortgage
Association 1,628,200 170,757
225,728
INSURANCE - 5.9%
Aetna Life & Casualty Co. 541,600 38,115
Alexander & Alexander Services,
Inc. 326,500 7,305
Allmerica Financial Corp. (a) 10,000 251
Allstate Corp. 1,273,200 46,790
American International Group, Inc. 435,000 36,703
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Berkley (W.R.) Corp. 297,300 $ 12,858
CIGNA Corp. 195,800 19,409
General Re Corp. 296,600 42,970
Loews Corp. 380,000 55,718
NAC Re Corp. 266,800 9,371
Old Republic International Corp. 232,800 6,664
Prudential Reinsurance Holdings,
Inc. (a) 327,100 6,665
Travelers, Inc. (The) 278,600 14,069
296,888
SAVINGS & LOANS - 0.8%
Charter One Financial Corp. 178,900 5,076
Golden West Financial Corp. 494,600 24,792
Standard Federal Bancorporation,
Inc. 218,300 7,750
37,618
TOTAL FINANCE 952,004
HEALTH - 6.0%
DRUGS & PHARMACEUTICALS - 3.2%
American Home Products Corp. 401,500 35,583
Bristol-Myers Squibb Co. 652,300 49,738
Pharmacia AB:
Class A Free shares 300,000 10,454
Series A sponsored ADR 422,000 14,770
Sigma Aldrich Corp. 490,500 23,299
SmithKline Beecham PLC ADR 469,000 24,329
158,173
MEDICAL EQUIPMENT & SUPPLIES - 1.7%
Amsco International, Inc. (a) 474,400 7,590
Baxter International, Inc. 1,409,100 54,426
Nellcor, Inc. (a) 446,564 25,677
87,693
MEDICAL FACILITIES MANAGEMENT - 1.1%
Columbia/HCA Healthcare Corp. 644,100 31,641
Tenet Healthcare Corp. (a) 1,182,400 21,135
52,776
TOTAL HEALTH 298,642
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HOLDING COMPANIES - 0.1%
U.S. Industries, Inc. (a) 330,900 $ 4,964
INDUSTRIAL MACHINERY & EQUIPMENT - 4.4%
ELECTRICAL EQUIPMENT - 0.8%
California Microwave Corp. (a) 79,100 1,740
General Electric Co. 575,000 36,369
Philips Electronics NV 25,300 977
39,086
INDUSTRIAL MACHINERY & EQUIPMENT - 1.3%
Cooper Industries, Inc. 288,710 9,744
Deere & Co. 109,000 9,742
Harnischfeger Industries, Inc. 794,000 25,011
Ingersoll-Rand Co. 545,600 19,301
Varity Corp. (a) 90,300 3,273
67,071
POLLUTION CONTROL - 2.3%
Browning-Ferris Industries, Inc. 1,442,600 42,016
Waste Management International
PLC sponsored ADR (a) 211,400 2,140
Wheelabrator Technologies, Inc. 739,100 10,625
WMX Technologies, Inc. 2,028,700 57,057
Zurn Industries, Inc. 85,100 2,128
113,966
TOTAL INDUSTRIAL MACHINERY &
EQUIPMENT 220,123
MEDIA & LEISURE - 0.9%
BROADCASTING - 0.7%
Viacom, Inc. Class B (non-vtg.) (a) 734,900 36,745
RESTAURANTS - 0.2%
Darden Restaurants, Inc. 621,000 7,064
TOTAL MEDIA & LEISURE 43,809
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 7.8%
AGRICULTURE - 0.1%
Pioneer Hi-Bred International, Inc. 101,300 $ 5,027
BEVERAGES - 1.0%
PepsiCo, Inc. 1,025,000 54,069
FOODS - 1.6%
Dole Food, Inc. 296,600 11,160
Kellogg Co. 301,200 21,762
Nabisco Holdings Class A 556,300 14,951
Tyson Foods, Inc. 1,315,700 31,412
79,285
HOUSEHOLD PRODUCTS - 0.2%
First Brands Corp. 136,800 6,259
Rubbermaid, Inc. 56,800 1,484
7,743
TOBACCO - 4.9%
Philip Morris Companies, Inc. 2,565,000 216,743
RJR Nabisco Holdings Corp. 879,767 27,053
243,796
TOTAL NONDURABLES 389,920
PRECIOUS METALS - 1.1%
Ashanti Goldfields Ltd. GDR (b) 157,000 2,748
Ashanti Goldfields Ltd. GDR 235,300 4,118
Barrick Gold Corp. 1,000,000 23,243
Newmont Mining Corp. 225,000 8,494
Santa Fe Pacific Gold Corp. 1,825,900 18,031
56,634
RETAIL & WHOLESALE - 2.3%
APPAREL STORES - 0.7%
Limited, Inc. (The) 1,970,000 36,199
GENERAL MERCHANDISE STORES - 1.6%
Dayton Hudson Corp. 171,200 11,770
Dillard Department Stores, Inc.
Class A 203,500 5,520
Federated Department Stores,
Inc. (a) 313,600 7,958
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Price/Costco, Inc. (a) 545,000 $ 9,265
Sears, Roebuck & Co. 100,000 3,400
Shopko Stores, Inc. 446,000 4,795
Wal-Mart Stores, Inc. 1,654,700 35,783
78,491
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Fabri-Centers of America, Inc.
Class B (non-vtg) (a) 94,500 1,099
Fingerhut Companies, Inc. 173,400 2,363
3,462
TOTAL RETAIL & WHOLESALE 118,152
SERVICES - 2.2%
ADVERTISING - 0.0%
WPP Group PLC 670,600 1,622
SERVICES - 2.2%
ADT Ltd. (a) 1,929,100 27,007
Christies International PLC 2,852,100 9,286
Service Corp. International 325,000 13,041
Sotheby's Holdings, Inc. Class A 635,300 8,815
Western Atlas, Inc. (a) 1,060,200 46,516
104,665
TOTAL SERVICES 106,287
TECHNOLOGY - 4.2%
COMPUTER SERVICES & SOFTWARE - 1.3%
Automatic Data Processing, Inc. 536,000 38,324
Computer Sciences Corp. (a) 377,800 25,265
DST Systems, Inc. 26,000 663
64,252
COMPUTERS & OFFICE EQUIPMENT - 2.2%
Bell & Howell Holdings Co. (a) 229,700 5,743
Diebold, Inc. 3,400 180
International Business Machines
Corp. 596,700 58,029
Pitney Bowes, Inc. 1,102,800 48,110
112,062
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.1%
Measurex Corp. 129,100 $ 3,970
ELECTRONICS - 0.6%
AMP, Inc. 499,900 19,621
Kemet Corp. (a) 100,000 3,450
Vishay Intertechnology, Inc. 154,400 5,443
28,514
TOTAL TECHNOLOGY 208,798
TRANSPORTATION - 3.1%
AIR TRANSPORTATION - 0.1%
Helikopter Services AS 341,400 4,277
RAILROADS - 2.4%
Bombardier, Inc. Class B 1,416,700 17,254
Burlington Northern Santa Fe Corp. 781,942 65,585
CSX Corp. 67,200 5,628
Illinois Central Corp., Series A 450,300 17,224
Southern Pacific Rail Corp. (a) 704,478 15,675
121,366
SHIPPING - 0.1%
Kirby Corp. (a) 250,000 4,125
TRUCKING & FREIGHT - 0.5%
Hunt (J.B.) Transport Services, Inc. 143,100 2,218
Roadway Services, Inc. 562,100 25,154
27,372
TOTAL TRANSPORTATION 157,140
UTILITIES - 6.6%
CELLULAR - 0.3%
Vodafone Group PLC sponsored ADR 413,000 16,881
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 6.3%
Ameritech Corp. 955,100 $ 51,575
Bell Atlantic Corp. 815,700 51,899
BellSouth Corp. 899,500 68,812
NYNEX Corp. 1,848,600 86,884
Pacific Telesis Group 632,300 19,206
SBC Communications, Inc. 663,300 37,062
315,438
TOTAL UTILITIES 332,319
TOTAL COMMON STOCKS
(Cost $3,777,327) 4,317,837
PREFERRED STOCKS - 0.2%
CONVERTIBLE PREFERRED STOCKS - 0.2%
BASIC INDUSTRIES - 0.1%
PAPER & FOREST PRODUCTS - 0.1%
James River Corp. cum., Series P 137,600 4,197
DURABLES - 0.1%
AUTOS, TIRES, & ACCESSORIES - 0.1%
Chrysler Corp., Series A $4.625
depositary shares
representing 1/10 share, $4.625 (b) 47,900 6,862
TOTAL CONVERTIBLE PREFERRED STOCKS 11,059
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
FINANCE - 0.0%
SAVINGS & LOANS - 0.0%
Ahmanson (H.F.) & Co., Series B,
depositary shares
representing 1/2 share, 9.60% 10,200 269
TOTAL PREFERRED STOCKS
(Cost $11,241) 11,328
CORPORATE BONDS - 0.6%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
CONVERTIBLE BONDS - 0.4%
HEALTH - 0.3%
DRUGS & PHARMACEUTICALS - 0.3%
Roche Holdings, Inc. liquid
yield option
note 0%, 4/20/10 (b) - $ 37,800 $ 15,687
PRECIOUS METALS - 0.1%
Pegasus Gold, Inc. euro
6 1/4%, 4/30/02 (b) Baa 2,710 2,656
SERVICES - 0.0%
ADT Operations, Inc. liquid
yield option
note 0%, 7/6/10 Ba3 4,920 2,226
TOTAL CONVERTIBLE BONDS 20,569
NONCONVERTIBLE BONDS - 0.2%
HEALTH - 0.2%
MEDICAL FACILITIES MANAGEMENT - 0.2%
Tenet Healthcare Corp.:
9 5/8%, 9/1/02 Ba2 2,300 2,478
8 5/8%, 12/1/03 Ba2 5,170 5,312
7,790
TRANSPORTATION - 0.0%
AIR TRANSPORTATION - 0.0%
AMR Corp. 7 3/4%, 12/1/97 Baa 2,000 2,041
TOTAL NONCONVERTIBLE BONDS 9,831
TOTAL CORPORATE BONDS
(Cost $28,336) 30,400
U.S. TREASURY OBLIGATIONS - 5.0%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
Stripped Principal:
0%, 11/15/18 Aaa $ 673,000 $ 149,769
0%, 2/15/19 Aaa 235,000 51,451
6 7/8%, 8/15/25 Aaa 47,000 50,444
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $249,821) 251,664
REPURCHASE AGREEMENTS - 8.0%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.88%, dated
10/31/95 due 11/1/95 $ 402,057 401,991
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $4,468,716) $ 5,013,220
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
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 $27,953,000 or .55% of net
assets.
3. Purchased on an installment basis. Market value reflects only those
payments made through October 31, 1995. The remaining installments
aggregating CAD 2,006,000 are due September 23,1996 and March 24, 1997.
INCOME TAX INFORMATION
At October 31, 1995, the aggregate cost of investment securities for income
tax purposes was $4,472,514,000. Net unrealized appreciation aggregated
$540,706,000, of which $607,187,000 related to appreciated investment
securities and $66,481,000 related to depreciated investment securities.
The fund hereby designates $17,605,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER SHARE AMOUNTS) OCTOBER 31, 1995
ASSETS
Investment in securities, at value (including repurchase $ 5,013,220
agreements of $401,991) (cost $4,468,716) -
See accompanying schedule
Cash 1
Receivable for investments sold 76,013
Receivable for fund shares sold 11,163
Dividends receivable 8,712
Interest receivable 884
Other receivables 54
TOTAL ASSETS 5,110,047
LIABILITIES
Payable for investments purchased $ 26,115
Payable for fund shares redeemed 16,116
Accrued management fee 3,039
Other payables and accrued expenses 1,494
TOTAL LIABILITIES 46,764
NET ASSETS $ 5,063,283
Net Assets consist of:
Paid in capital $ 4,292,425
Undistributed net investment income 33,515
Accumulated undistributed net realized gain (loss) on 192,836
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 544,507
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 105,223 shares outstanding $ 5,063,283
NET ASSET VALUE, offering price and redemption price per $48.12
share ($5,063,283 (divided by) 105,223 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED OCTOBER 31, 1995
INVESTMENT INCOME $ 86,945
Dividends (including $506 received from affiliated
issuers)
Interest 23,812
TOTAL INCOME 110,757
EXPENSES
Management fee
Basic fee $ 26,830
Performance adjustment 3,877
Transfer agent fees 9,972
Accounting fees and expenses 760
Non-interested trustees' compensation 33
Custodian fees and expenses 328
Registration fees 422
Audit 71
Legal 28
Interest 10
Miscellaneous 76
Total expenses before reductions 42,407
Expense reductions (605) 41,802
NET INVESTMENT INCOME 68,955
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain of $105 217,290
on
sales of investments in affiliated issuers)
Foreign currency transactions (37,147) 180,143
Change in net unrealized appreciation (depreciation) on:
Investment securities 358,257
Assets and liabilities in foreign currencies 8,806 367,063
NET GAIN (LOSS) 547,206
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 616,161
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1995 1994
INCREASE (DECREASE) IN NET ASSETS
Operations $ 68,955 $ 30,553
Net investment income
Net realized gain (loss) 180,143 221,672
Change in net unrealized appreciation (depreciation) 367,063 40,672
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 616,161 292,897
FROM OPERATIONS
Distributions to shareholders (14,249) (13,186)
From net investment income
From net realized gain (191,161) (108,589)
TOTAL DISTRIBUTIONS (205,410) (121,775)
Share transactions 2,817,479 3,387,952
Net proceeds from sales of shares
Reinvestment of distributions 201,637 119,386
Cost of shares redeemed (2,081,548) (1,586,209)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 937,568 1,921,129
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,348,319 2,092,251
NET ASSETS
Beginning of period 3,714,964 1,622,713
End of period (including undistributed net investment $ 5,063,283 $ 3,714,964
income of $33,515 and $19,453, respectively)
OTHER INFORMATION
Shares
Sold 64,443 79,687
Issued in reinvestment of distributions 5,019 3,051
Redeemed (47,325) (37,585)
Net increase (decrease) 22,137 45,153
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31,
1995 1994 C 1993 1992 E 1991
SELECTED PER-SHARE DATA
Net asset value, beginning $ 44.71 $ 42.78 $ 33.41 $ 30.19 $ 23.61
of period
Income from Investment
Operations
Net investment income .70 B .54 B .55 B, .64 B .81
D
Net realized and 5.16 4.53 9.20 3.43 6.94
unrealized gain (loss)
Total from investment 5.86 5.07 9.75 4.07 7.75
operations
Less Distributions (.17) (.34) (.23) (.85) (1.17)
From net investment income
From net realized gain (2.28) (2.80) (.15) - -
Total distributions (2.45) (3.14) (.38) (.85) (1.17)
Net asset value, end of period $ 48.12 $ 44.71 $ 42.78 $ 33.41 $ 30.19
TOTAL RETURN A 14.19% 12.90% 29.46% 14.09% 34.09%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,063 $ 3,715 $ 1,623 $ 331 $ 124
(in millions)
Ratio of expenses to average .97% 1.10% 1.12% 1.00% .98%
net assets
Ratio of expenses to average net .96% 1.08% 1.11% 1.00% .98%
assets after expense reductions
Ratio of net investment income to 1.58% 1.29% 1.43% 2.01% 2.93%
average net assets
Portfolio turnover rate 125% 112% 117% 81% 137%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
B NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
C EFFECTIVE NOVEMBER 1, 1993 - THE YEAR THE CHANGE WENT INTO EFFECT, THE
FUND ADOPTED STATEMENT OF POSITION 93-2, "DETERMINATION, DISCLOSURE, AND
FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF
CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT
INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES.
D NET INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM IMPERIAL
CHEMICAL INDUSTRIES PLC ADR WHICH AMOUNTED TO $.11 PER SHARE.
E AS OF NOVEMBER 1, 1991 THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Value 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 (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for,
litigation proceeds, foreign currency transactions, market discount,
non-taxable dividends and losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. Losses may arise
from changes in the value of the foreign currency or if the counterparties
do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT - CONTINUED
less from the date of purchase, and are collateralized by U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency Securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $5,526,233,000 and $5,011,862,000, respectively, of which U.S.
government and government agency obligations aggregated $685,286,000 and
$440,438,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of
a group fee rate plus a fixed individual fund fee rate applied to the
average net assets of the fund. The group fee rate is the weighted average
of a series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2700% to .5200% for
the period. In the event that these rates were lower than the contractual
rates in effect during the period, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .30%. The basic fee is subject to a performance
adjustment (up to a maximum of (plus/minus) .20%) based on the fund's
investment performance as compared to the appropriate index over a
specified period of time. For the period, the management fee was equivalent
to an annual rate of .70% of average net assets after the performance
adjustment.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
During the period November 1, 1994 to December 31, 1994, FSC received fees
based on the type, size, number of accounts and the number of transactions
made by shareholders. Effective January 1, 1995, the Board of Trustees
approved a revised transfer agent contract pursuant to which FSC receives
account fees and asset-based fees that vary according to account size and
type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING FEES. 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 $2,973,000 for the period.
5. 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 period for
which loans were outstanding amounted to $17,788,000. The weighted average
interest rate was 6.4375%.
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
$605,000 under this arrangement.
7. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Miller (Herman), Inc. $ 4,652 $ 6,356 $ 191 $ -
New England Business Service, Inc. - 462 313 -
Westpoint Stevens, Inc. Class A - 4,492 2 -
TOTALS $ 4,652 $ 11,310 $ 506 $ -
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Capital Trust and the Shareholders of Fidelity
Value Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Capital Trust: Fidelity Value Fund, including the schedule of
portfolio investments, as of October 31, 1995, and the related statement of
operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Capital Trust: Fidelity Value Fund as of October 31, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
December 4, 1995
DISTRIBUTIONS
The Board of Trustees of Fidelity Value Fund voted to pay on December 11,
1995, to shareholders of record at the opening of business on December 8,
1995, a distribution of $1.73 derived from capital gains realized from
sales of portfolio securities and a dividend of $.48 from net investment
income.
A total of 24% of the dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1996 of the applicable
percentage for use in preparing 1995 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Bettina Doulton, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export Fund
Fidelity Fifty
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(Registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(Trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
