(2_FIDELITY_LOGOS)
FIDELITY(REGISTERED TRADEMARK)
SMALL CAP SELECTOR
ANNUAL REPORT
OCTOBER 31, 1999
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 24 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 28 Notes to the financial
statements.
REPORT OF INDEPENDENT 33 The auditors' opinion.
ACCOUNTANTS
PROXY VOTING RESULTS 34
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND.
THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-6666 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
All major U.S. equity market indexes posted positive returns for the
month of October, led by the technology-heavy NASDAQ Index, which
climbed to a record high close during the month. Domestic bonds,
however, turned in relatively flat performance, due in large part to
lingering fears of a potential interest rate hike by the Federal
Reserve Board, and its adoption of a tightening bias during the first
week of the month.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED OCTOBER 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY SMALL CAP SELECTOR 3.48% 13.49% 66.56% 79.91%
Russell 2000 (registered -0.25% 14.87% 80.74% 102.69%
trademark)
Small Cap Funds Average 7.91% 25.10% 97.72% n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on June 28, 1993. For example, if you
had invested $1,000 in a fund that had a 5% return over the past year,
the value of your investment would be $1,050. You can compare the
fund's returns to the performance of the Russell 2000 Index - a market
capitalization-weighted index of 2,000 small company stocks. To
measure how the fund's performance stacked up against its peers, you
can compare it to the small cap funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 803 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges. Lipper has
created new comparison categories that group funds according to
portfolio characteristics and capitalization, as well as by
capitalization only. These averages are listed on page 5 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY SMALL CAP SELECTOR 13.49% 10.74% 9.70%
Russell 2000 14.87% 12.56% 11.65%
Small Cap Funds Average 25.10% 14.11% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER LIFE OF FUND
Small Cap Selector Russell 2000
00336 RS002
1993/06/28 10000.00 10000.00
1993/06/30 10000.00 10089.85
1993/07/31 10070.00 10229.16
1993/08/31 10440.00 10671.07
1993/09/30 10660.00 10972.21
1993/10/31 10740.00 11254.62
1993/11/30 10440.00 10884.20
1993/12/31 10881.65 11256.33
1994/01/31 11153.19 11609.25
1994/02/28 11243.70 11567.27
1994/03/31 10499.49 10956.54
1994/04/30 10670.46 11021.67
1994/05/31 10388.86 10897.91
1994/06/30 9875.95 10527.85
1994/07/31 9956.41 10700.82
1994/08/31 10660.40 11297.10
1994/09/30 10600.06 11259.27
1994/10/31 10801.20 11214.84
1994/11/30 10288.29 10761.90
1994/12/31 10519.89 11051.05
1995/01/31 10127.28 10911.62
1995/02/28 10479.62 11365.53
1995/03/31 10761.49 11561.27
1995/04/30 11003.10 11818.34
1995/05/31 11214.50 12021.54
1995/06/30 12458.89 12645.17
1995/07/31 13744.25 13373.56
1995/08/31 13936.55 13650.22
1995/09/30 14290.79 13893.99
1995/10/31 13551.96 13272.62
1995/11/30 13734.13 13830.26
1995/12/31 13321.13 14195.16
1996/01/31 13095.35 14179.95
1996/02/29 13407.14 14621.86
1996/03/31 13654.43 14919.50
1996/04/30 14933.86 15717.27
1996/05/31 15439.18 16336.65
1996/06/30 14567.99 15665.81
1996/07/31 13496.32 14297.50
1996/08/31 14132.62 15127.62
1996/09/30 14735.44 15718.79
1996/10/31 14288.91 15476.54
1996/11/30 14880.56 16114.23
1996/12/31 15137.31 16536.55
1997/01/31 15204.29 16867.03
1997/02/28 14992.19 16458.06
1997/03/31 14434.03 15681.47
1997/04/30 14579.15 15725.18
1997/05/31 15862.92 17474.60
1997/06/30 16939.24 18223.48
1997/07/31 18067.76 19071.46
1997/08/31 18193.15 19507.84
1997/09/30 19424.27 20935.70
1997/10/31 18945.50 20016.02
1997/11/30 18865.71 19886.56
1997/12/31 19262.60 20234.63
1998/01/31 19057.04 19915.30
1998/02/28 20629.00 21387.89
1998/03/31 21547.99 22269.98
1998/04/30 21898.66 22393.21
1998/05/31 20677.37 21187.18
1998/06/30 20717.48 21231.75
1998/07/31 19108.35 19512.96
1998/08/31 15072.97 15723.94
1998/09/30 15638.68 16954.46
1998/10/31 15852.39 17645.92
1998/11/30 16719.81 18570.43
1998/12/31 17838.65 19719.61
1999/01/31 17574.66 19981.66
1999/02/28 16229.53 18363.25
1999/03/31 16342.67 18649.93
1999/04/30 17386.09 20321.11
1999/05/31 17310.66 20617.94
1999/06/30 18331.75 21550.27
1999/07/31 18243.31 20958.95
1999/08/31 17561.08 20183.28
1999/09/30 17978.00 20187.69
1999/10/29 17990.64 20269.45
IMATRL PRASUN SHR__CHT 19991031 19991111 103949 R00000000000080
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Small Cap Selector on June 28, 1993 when the fund
started. As the chart shows, by October 31, 1999, the value of the
investment would have grown to $17,991 - a 79.91% increase on the
initial investment. For comparison, look at how the Russell 2000 Index
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown $20,269 - a 102.69%
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
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
* THE LIPPER SMALL CAP CORE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER SMALL CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF OCTOBER 31, 1999, THE SIX
MONTH, ONE YEAR, AND FIVE YEAR CUMULATIVE TOTAL RETURNS FOR THE SMALL
CAP CORE FUNDS AVERAGE ARE 6.27%, 22.33%, AND 84.78%, RESPECTIVELY;
THE ONE YEAR AND FIVE YEAR AVERAGE ANNUAL TOTAL RETURNS ARE 22.33%
AND 12.78%, RESPECTIVELY. THE SIX MONTH, ONE YEAR, AND FIVE YEAR
CUMULATIVE TOTAL RETURNS FOR THE SMALL CAP SUPERGROUP AVERAGE ARE
7.30%, 23.89%, AND 91.04%, RESPECTIVELY. THE ONE YEAR AND FIVE YEAR
AVERAGE ANNUAL TOTAL RETURNS ARE 23.89% AND 13.37%, RESPECTIVELY.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
A change in market leadership
painted the backdrop for the six
months that ended October 31,
1999, as growth stocks stole the
spotlight back from their value
and cyclical - or, economically
sensitive - counterparts that had
captured the hearts and minds of
investors for much of April.
Technology shares led a narrow
charge, seemingly resilient to the
interest-rate concerns that tempered
the returns of the broader market.
The technology-rich NASDAQ
closed out the period posting a
record high, capping off a strong
six-month showing, up 16.82%. In
comparison, the Standard & Poor's
500 Index - a broad measure of
U.S. stock market performance -
could muster only 2.74% during this
time frame. The Federal Reserve
Board, determined to keep inflation
in check, acted promptly and
forcefully, levying two quarter-point
interest-rate cuts in the summer to
rein in signs of runaway growth in
the economy. Anticipation of and
reaction to these moves kept most
blue-chip stocks in check, fueling
the stock market's frequent mood
swings during the period. The Dow
Jones Industrial Average - an
index of 30 blue-chip stocks -
traversed hilly terrain over the
course of the period, from its
adventure north of the 11,000
border in May, to its return trip
to 10,000 in October. For all its
efforts, though, the Dow managed
just a 0.22% return for the
six-month period.
(photograph of Bradford Lewis)
An interview with Bradford Lewis, Portfolio Manager of Fidelity Small
Cap Selector
Q. THE FUND CHANGED ITS FISCAL YEAR END FROM APRIL 30 TO OCTOBER 31.
HOW DID THE FUND PERFORM OVER THE PAST SIX MONTHS, BRAD?
A. For the six months that ended October 31, 1999, the fund returned
3.48%, versus -0.25% for the Russell 2000 and 7.91% for the small cap
funds average as tracked by Lipper Inc.
Q. WHY DID THE FUND OUTPERFORM THE RUSSELL 2000, BUT UNDERPERFORM THE
LIPPER PEER GROUP DURING THE PERIOD?
A. The fund outperformed the Russell 2000 over the past six months
mainly because technology stocks in the fund were up more than 56%
during the period. Regrettably, however, the fund's technology
weighting was slightly less than that of the Russell 2000 and was well
below that of the Lipper peer group. Technology stocks in the Russell
2000 rose about 25%, while virtually every other industry group in the
index was down during the period. The dispersions of industry returns
within the small-cap sector were enormous and quite unusual.
Q. WHICH INDIVIDUAL HOLDINGS HELPED PERFORMANCE?
A. VISX was a huge winner. This manufacturer and marketer of lasers
for eye surgery enjoyed revenue and earnings growth of more than 100%
over the past few quarters. Another contributor was Calpine, an energy
company that was fueled by a string of electric power supply
acquisitions. Calpine's sales rose about 248% in the third quarter.
Also doing well last quarter was CTS Corporation, a supplier of
electronic components. The company doubled its revenues during the
period and its stock price reacted accordingly.
Q. WHICH STOCKS DETRACTED FROM PERFORMANCE?
A. WestPoint Stevens was a loser for the fund, and dramatically
displayed the impact that an industry group can have on an individual
stock. WestPoint reported decent earnings growth during the period,
but was doomed by being a textile stock. The textile group has been
melting down this year. Maybe the lesson here is that an Annapolis
grad like me should never buy a company called WestPoint! Wet Seal
also hurt performance as its clothing line for teenagers fell
precipitously out of favor in the second quarter. Finally, Labor Ready
was hammered by estimate cuts and a reduction in earnings-per-share
growth. This provider of temporary workers faced a big squeeze on its
profit margins.
Q. AT JUST UNDER 28%, TECHNOLOGY STOCKS CONTINUED TO REPRESENT A LARGE
PART OF THE FUND. WHY?
A. I wish I could bronze the fund's technology stocks after witnessing
their excellent performance over the past six months. After the fund
suffered due to an underweighted position in Internet stocks during
the prior period, I bought a smattering of fundamentally attractive
but expensive Internet stocks. Fortunately these investments, such as
Go2Net, Inc., enjoyed even more share-price appreciation over the
period. By the end of October, the fund held a significant position in
technology stocks because technology has been one of the few small-cap
sectors that experienced significant earnings-per-share growth over
the past few quarters.
Q. HOW DID THE FUND'S MEDIA AND LEISURE HOLDINGS PERFORM?
A. The fund did well due to strong stock selection within this sector.
The fund's media and leisure stocks rose 5.7% versus a loss of 1.7%
for similar stocks in the Russell 2000. One of the biggest
contributors in this sector was CEC Entertainment, which owns the
Chuck E. Cheese's restaurant franchise. The company reported solid
revenue and earnings growth due to successful renovations to existing
restaurants, new restaurant openings and the bankruptcy of its only
real competitor, Discovery Zone.
Q. WHAT'S YOUR OUTLOOK?
A. My econometric models - which form the basis of my stock picking
strategy - are moderately positive on the overall market. The rise in
interest rates is decelerating, the broad market is still well below
its highs, and I believe there are many opportunities among
small-sized companies with favorable price-to-earnings ratios and
growth rates. On top of that, we are entering the strongest months of
both the annual seasonal cycle and the four-year election cycle.
BRAD LEWIS ON MANAGING A
PORTFOLIO AGAINST ITS INDEX:
"Since the performance of this fund
is measured against the Russell 2000,
it is extremely critical for me to
keep track of the evolving
characteristics of that index.
Generally speaking, a fund manager
needs to pay particular attention to
the market capitalization of his or
her portfolio versus its benchmark
index. For example, over the past few
years, funds being compared to the
S&P 500 that lacked positions in the
biggest 50 names in the index were
destined to take a 10-count in the
third round due to the dominance of
mega-cap stocks. Unfortunately,
many of these mega-cap names are
not exactly cheap. Therefore, when
deciding which stocks to buy, the
portfolio manager needs to reconcile
the trade-off between the percent of
the fund allocated to mega-cap
stocks and individual stock valuations.
"Industry weighting consideration
is also critical. A portfolio with no
current holdings in technology is
making an enormous index bet given
that technology currently represents
about 23% of the Russell 2000.
Imagine this possible scenario:
Technology stocks continue their
run and return 50% over the next
year versus a flat return for the
remaining industries. A portfolio
void of technology names would be
10 percentage points behind the
market strictly due to this one
negative industry bet. That is a huge
deficit to overcome with stock
selection."
FUND FACTS
GOAL: capital appreciation
by investing mainly in
equity securities of
companies with small
market capitalizations,
chosen in part by using
computer-aided quantitative
analysis
FUND NUMBER: 336
TRADING SYMBOL: FDSCX
START DATE: June 28, 1993
SIZE: as of October 31, 1999,
more than $555 million
MANAGER: Bradford Lewis,
since inception; manager,
Fidelity Stock Selector, since
1990; Fidelity Disciplined
Equity, since 1988; joined
Fidelity in 1985
(checkmark)
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF OCTOBER
31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Valassis Communications, Inc. 2.7 2.2
Ross Stores, Inc. 2.7 2.8
Jack in the Box, Inc. 1.9 0.0
Cypress Semiconductor Corp. 1.9 0.0
CTS Corp. 1.8 0.8
AnnTaylor Stores Corp. 1.8 1.2
Calpine Corp. 1.6 0.5
Commscope, Inc. 1.5 0.8
Suiza Foods Corp. 1.5 0.0
Integrated Device Technology, 1.3 0.0
Inc.
18.7 8.3
TOP FIVE MARKET SECTORS AS OF
OCTOBER 31, 1999
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
TECHNOLOGY 27.7 12.2
RETAIL & WHOLESALE 10.2 12.0
MEDIA & LEISURE 9.5 7.3
DURABLES 6.9 11.2
INDUSTRIAL MACHINERY & 6.1 4.5
EQUIPMENT
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF OCTOBER 31, 1999 * AS OF APRIL 30, 1999 **
Stocks and Investment Stocks and Investment
Companies 97.8% Companies 90.4%
Convertible Securities 0.0% Convertible Securities 0.1%
Short-Term Investments and Short-Term Investments and
Net Other Assets 2.2% Net Other Assets 9.5%
* FOREIGN INVESTMENTS 2.0% ** FOREIGN INVESTMENTS 3.1%
</TABLE>
Row: 1, Col: 1, Value: 97.8
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 2.2
Row: 1, Col: 1, Value: 90.40000000000001
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.1
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 9.5
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS OCTOBER 31, 1999
Showing Percentage of Net Assets
COMMON STOCKS - 96.0%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.0%
AEROSPACE & DEFENSE - 0.2%
Advanced Aerodynamics & 25,000 $ 62,500
Structures, Inc. Class A (a)
Alliant Techsystems, Inc. (a) 20,000 1,230,000
1,292,500
DEFENSE ELECTRONICS - 0.8%
Alpha Industries, Inc. (a) 80,000 4,420,000
TOTAL AEROSPACE & DEFENSE 5,712,500
BASIC INDUSTRIES - 5.0%
CHEMICALS & PLASTICS - 1.3%
Airgas, Inc. (a) 3,300 31,350
Fuller (H.B.) Co. 16,600 908,850
Lubrizol Corp. 78,000 1,998,750
Spartech Corp. 47,000 1,345,375
W.R. Grace & Co. (a) 209,000 3,121,938
7,406,263
IRON & STEEL - 0.6%
Material Sciences Corp. (a) 35,000 435,313
Mueller Industries, Inc. (a) 76,700 2,449,606
Quanex Corp. 19,000 412,063
3,296,982
METALS & MINING - 2.1%
Amcol International Corp. 19,000 232,750
Belden, Inc. 155,000 2,848,125
Commscope, Inc. (a) 207,000 8,254,125
Reliance Steel & Aluminum Co. 17,000 357,000
11,692,000
PACKAGING & CONTAINERS - 0.8%
Ball Corp. 274 11,046
Gaylord Container Corp. Class 128,000 720,000
A (a)
Tupperware Corp. 178,000 3,526,625
4,257,671
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - 0.2%
Buckeye Technologies, Inc. (a) 20,000 $ 302,500
Pope & Talbot, Inc. 50,000 725,000
1,027,500
TOTAL BASIC INDUSTRIES 27,680,416
CONSTRUCTION & REAL ESTATE -
3.2%
BUILDING MATERIALS - 0.8%
Centex Construction Products, 61,100 2,172,869
Inc.
Mobile Mini, Inc. (a) 23,000 501,688
Nortek, Inc. (a) 17,700 542,063
United Dominion Industries 52,000 1,130,665
Ltd.
4,347,285
CONSTRUCTION - 1.7%
Del Webb Corp. 32,000 706,000
Granite Construction, Inc. 92,000 1,903,250
M.D.C. Holdings, Inc. 96,600 1,509,375
M/I Schottenstein Homes, Inc. 35,000 625,625
NVR, Inc. (a) 15,000 615,000
Pulte Corp. 99,300 1,998,413
Ryland Group, Inc. 92,000 1,897,500
9,255,163
ENGINEERING - 0.5%
Quanta Services, Inc. (a) 90,000 2,508,750
URS Corp. (a) 34,000 612,000
3,120,750
REAL ESTATE - 0.1%
Fairfield Communities, Inc. 42,400 519,400
(a)
Trendwest Resorts, Inc. (a) 6,000 133,500
652,900
REAL ESTATE INVESTMENT TRUSTS
- - 0.1%
Apex Mortgage Capital, Inc. 5,000 60,313
Capital Automotive 40,000 510,000
570,313
TOTAL CONSTRUCTION & REAL 17,946,411
ESTATE
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - 6.9%
AUTOS, TIRES, & ACCESSORIES -
1.8%
Arvin Industries, Inc. 58,000 $ 1,653,000
Borg-Warner Automotive, Inc. 88,000 3,476,000
EOTT Energy Partners LP 25,000 382,813
Monaco Coach Corp. (a) 29,500 693,250
Navistar International Corp. 95,000 3,960,313
(a)
10,165,376
CONSUMER DURABLES - 0.1%
Dupont Photomasks, Inc. (a) 17,000 841,500
CONSUMER ELECTRONICS - 0.5%
Fossil, Inc. (a) 102,000 2,817,750
HOME FURNISHINGS - 1.9%
Ethan Allen Interiors, Inc. 201,000 7,148,063
Furniture Brands 66,000 1,278,750
International, Inc. (a)
Haverty Furniture Companies, 60,000 825,000
Inc.
La-Z-Boy, Inc. 59,000 1,076,750
10,328,563
TEXTILES & APPAREL - 2.6%
BEBE Stores, Inc. (a) 63,000 1,661,625
McNaughton Apparel Group, 15,000 119,063
Inc. (a)
Pacific Sunwear of 237,000 7,154,438
California, Inc. (a)
WestPoint Stevens, Inc. Class 288,000 5,454,000
A
14,389,126
TOTAL DURABLES 38,542,315
ENERGY - 2.4%
ENERGY SERVICES - 0.2%
Patterson Energy, Inc. (a) 49,000 627,813
UTI Energy Corp. (a) 34,000 652,375
1,280,188
OIL & GAS - 2.2%
Chesapeake Energy Corp. (a) 300,000 1,087,500
Comstock Resources, Inc. (a) 96,000 378,000
Forest Oil Corp. (a) 116,000 1,551,500
Howell Corp. 20,000 126,250
HS Resources, Inc. (a) 19,000 296,875
Louis Dreyfus Natural Gas 43,000 860,000
Corp. (a)
Meridian Resource Corp. (a) 245,000 1,087,188
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Patina Oil & Gas Corp. 34,000 $ 293,250
Pogo Producing Co. 111,200 2,230,950
Remington Oil & Gas Corp. (a) 12,900 62,888
Titan Exploration, Inc. (a) 54,000 226,125
Tom Brown, Inc. (a) 36,000 495,000
Vintage Petroleum, Inc. 294,500 3,202,688
11,898,214
TOTAL ENERGY 13,178,402
FINANCE - 6.0%
BANKS - 1.5%
BankAtlantic Bancorp, Inc. 81,000 410,063
(non-vtg.) Class A
Citizens Banking Corp. 9,200 255,300
City National Corp. 139,500 5,405,625
Greater Bay Bancorp 12,000 441,000
Oriental Financial Group, 2,200 49,775
Inc.
Republic Bancorp, Inc. 31,540 413,963
Silicon Valley Bancshares (a) 35,000 1,141,875
8,117,601
CREDIT & OTHER FINANCE - 1.2%
AmeriCredit Corp. (a) 304,000 5,282,000
Doral Financial Corp. 78,000 999,375
Metris Companies, Inc. 7,800 268,613
Triad Guaranty, Inc. (a) 200 4,113
6,554,101
INSURANCE - 2.0%
Amerus Life Holdings, Inc. 43,000 1,037,375
Annuity & Life Re Holdings 800 18,800
Ltd.
Blanch E.W. Holdings, Inc. 39,000 2,525,250
CNA Surety Corp. 12,000 138,000
Delphi Financial Group, Inc. 68,000 2,176,000
Class A
FBL Financial Group, Inc. 25,000 457,813
Class A
Gallagher (Arthur J.) & Co. 43,000 2,225,250
Medical Assurance, Inc. (a) 19,635 458,968
Penn Treaty American Corp. (a) 15,000 270,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Radian Group, Inc. 9,300 $ 491,156
UICI (a) 49,000 1,298,500
11,097,112
SAVINGS & LOANS - 0.7%
BankUnited Financial Corp. 10,800 87,750
Class A (a)
California Federal Savings
Bank of Los Angeles:
contingent litigation 24,640 36,960
recovery participation
interest rights (a)
secondary contingent 38,540 33,723
litigation recovery
participation interest
rights 1/1/15 (a)
FirstFed Financial Corp. (a) 18,300 292,800
Harbor Florida Bancshares, 100,000 1,256,250
Inc.
OceanFirst Financial Corp. 18,500 330,688
Richmond County Financial 10,000 183,750
Corp.
Webster Financial Corp. 68,000 1,946,500
4,168,421
SECURITIES INDUSTRY - 0.6%
Affiliated Managers Group, 62,000 1,658,500
Inc. (a)
Hambrecht & Quist Group (a) 35,000 1,728,125
3,386,625
TOTAL FINANCE 33,323,860
HEALTH - 4.7%
DRUGS & PHARMACEUTICALS - 2.6%
Accredo Health, Inc. 32,000 1,056,000
Alpharma, Inc. Class A 145,833 5,131,499
Jones Pharma, Inc. 225,000 6,975,000
Polymedica Industries, Inc. 39,000 823,875
(a)
XOMA Ltd. (a) 90,300 225,750
14,212,124
MEDICAL EQUIPMENT & SUPPLIES
- - 0.8%
Bindley Western Industries, 44,066 553,579
Inc.
Datascope Corp. (a) 14,000 504,000
Mentor Corp. 39,000 918,938
Priority Healthcare Corp. (a) 67,944 1,363,127
Scott Technologies, Inc. 20,000 380,000
Class A (a)
The Spectranetics Corp. (a) 35,000 168,438
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - CONTINUED
Young Innovations, Inc. (a) 400 $ 5,850
Zoll Medical Corp. (a) 20,000 725,000
4,618,932
MEDICAL FACILITIES MANAGEMENT
- - 1.3%
Coventry Health Care, Inc. (a) 133,000 764,750
Hooper Holmes, Inc. 118,000 3,171,250
Trigon Healthcare, Inc. (a) 112,000 3,178,000
7,114,000
TOTAL HEALTH 25,945,056
INDUSTRIAL MACHINERY &
EQUIPMENT - 6.1%
ELECTRICAL EQUIPMENT - 2.6%
Anixter International, Inc. 19,800 413,325
(a)
Cymer, Inc. (a) 70,000 2,585,625
Littelfuse, Inc. (a) 14,000 311,500
Ortel Corp. (a) 24,000 795,000
Pinnacle Systems (a) 130,000 3,607,500
Pittway Corp. Class A 10,000 330,000
Plug Power, Inc. 300 4,800
Powerwave Technologies, Inc. 38,000 2,472,375
(a)
Roper Industries, Inc. 11,000 339,625
Sensormatic Electronics Corp. 253,000 3,826,625
(a)
14,686,375
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.2%
Astec Industries, Inc. (a) 6,000 140,625
Briggs & Stratton Corp. 111,000 6,486,563
Donaldson Co., Inc. 82,200 1,911,150
Exide Corp. 100,000 887,500
JLG Industries, Inc. 42,500 544,531
Manitowoc Co., Inc. 111,200 3,322,100
Mark IV Industries, Inc. 132,000 2,541,000
Thomas Industries, Inc. 14,000 250,250
Toro Co. 45,000 1,614,375
17,698,094
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
POLLUTION CONTROL - 0.3%
Insituform Technologies, Inc. 46,000 $ 1,101,125
Class A (a)
Waste Connections, Inc. (a) 34,000 524,875
1,626,000
TOTAL INDUSTRIAL MACHINERY & 34,010,469
EQUIPMENT
MEDIA & LEISURE - 9.5%
BROADCASTING - 0.0%
Spanish Broadcasting System, 500 13,313
Inc. Class A
ENTERTAINMENT - 1.1%
Bally Total Fitness Holding 155,000 3,729,688
Corp. (a)
Hollywood Park, Inc. (a) 59,000 1,021,438
Scientific Games Holdings 30,000 521,250
Corp. (a)
Zomax, Inc. (a) 39,900 1,112,213
6,384,589
LEISURE DURABLES & TOYS - 1.8%
Arctic Cat, Inc. 28,000 266,000
JAKKS Pacific, Inc. (a) 36,000 1,476,000
National R.V. Holdings, Inc. 113,000 2,309,438
(a)
Steinway Musical Instruments, 20,000 355,000
Inc. (a)
T-HQ, Inc. (a) 106,500 4,379,813
Winnebago Industries, Inc. 66,000 1,146,750
9,933,001
LODGING & GAMING - 0.8%
Argosy Gaming Co. (a) 74,000 915,750
Aztar Corp. (a) 84,000 813,750
Championship Auto Racing 27,000 619,313
Teams, Inc. (a)
Choice Hotels International, 46,000 690,000
Inc. (a)
WMS Industries, Inc. (a) 100,000 1,356,250
4,395,063
PUBLISHING - 0.7%
Houghton Mifflin Co. 96,000 4,068,000
RESTAURANTS - 5.1%
Applebee's International, 100,000 2,881,250
Inc.
CEC Entertainment, Inc. (a) 225,000 7,214,063
Cheesecake Factory, Inc. (a) 51,000 1,561,875
Jack in the Box, Inc. (a) 447,600 10,770,375
Morrison Management 29,000 619,875
Specialists, Inc.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - CONTINUED
Rare Hospitality 41,000 $ 817,438
International, Inc. (a)
Ruby Tuesday, Inc. 86,000 1,639,375
Ryan's Family Steak Houses, 198,000 2,072,813
Inc. (a)
Shoney's, Inc. (a) 204,000 293,250
Sonic Corp. (a) 7,500 210,000
28,080,314
TOTAL MEDIA & LEISURE 52,874,280
NONDURABLES - 3.4%
BEVERAGES - 0.6%
Canandaigua Brands, Inc. 55,800 3,375,900
Class A (a)
FOODS - 2.2%
Aurora Foods, Inc. (a) 73,000 939,875
Del Monte Foods Co. 400 5,575
Earthgrains Co. 95,700 2,183,156
International Home Foods, 38,600 738,225
Inc. (a)
International Multifoods 5,900 124,638
Corp.
Suiza Foods Corp. (a) 224,000 8,078,000
12,069,469
HOUSEHOLD PRODUCTS - 0.6%
Brady (W.H.) Co. Class A 36,000 1,044,000
Church & Dwight Co., Inc. 77,000 2,006,813
French Fragrances, Inc. (a) 49,000 327,688
3,378,501
TOTAL NONDURABLES 18,823,870
RETAIL & WHOLESALE - 10.2%
APPAREL STORES - 6.7%
American Eagle Outfitters, 116,000 4,966,250
Inc. (a)
AnnTaylor Stores Corp. (a) 233,000 9,917,063
Braun's Fashions Corp. (a) 10,000 166,250
Chicos Fas, Inc. (a) 25,000 784,375
Dress Barn, Inc. (a) 41,000 729,031
Factory 2-U Stores, Inc. (a) 50,000 1,275,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
Ross Stores, Inc. 716,000 $ 14,767,500
Talbots, Inc. 100,000 4,706,250
37,311,719
GENERAL MERCHANDISE STORES -
1.1%
Cost Plus, Inc. (a) 74,150 2,706,475
Shopko Stores, Inc. (a) 134,000 3,358,375
6,064,850
GROCERY STORES - 0.1%
Fleming Companies, Inc. 34,600 413,038
RETAIL & WHOLESALE,
MISCELLANEOUS - 2.3%
Brookstone, Inc. (a) 19,000 296,875
Coldwater Creek, Inc. (a) 30,000 723,750
Musicland Stores Corp. (a) 160,000 1,250,000
PC Connection, Inc. (a) 31,000 643,250
Petco Animal Supplies, Inc. 124,500 1,439,531
(a)
Rex Stores Corp. (a) 25,000 715,625
SCP Pool Corp. (a) 25,000 567,188
Spiegel, Inc. Class A (a) 200,000 2,900,000
Zale Corp. (a) 100,000 4,187,500
12,723,719
TOTAL RETAIL & WHOLESALE 56,513,326
SERVICES - 5.7%
EDUCATIONAL SERVICES - 0.1%
Career Education Corp. (a) 11,000 242,000
New Horizons Worldwide, Inc. 7,500 103,125
(a)
345,125
LEASING & RENTAL - 0.6%
Dollar Thrifty Automotive 110,000 1,856,250
Group, Inc. (a)
Rent-A-Center, Inc. (a) 80,000 1,465,000
3,321,250
PRINTING - 2.9%
Creo Products, Inc. (a) 700 18,074
Harland (John H.) Co. 80,000 1,520,000
Valassis Communications, Inc. 343,500 14,770,468
(a)
16,308,542
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - CONTINUED
SERVICES - 2.1%
ABM Industries, Inc. 12,600 $ 300,825
Capital Senior Living Corp. 114,100 584,763
(a)
CDI Corp. (a) 30,000 795,000
FYI, Inc. (a) 32,000 1,056,000
Pre-Paid Legal Services, Inc. 135,000 3,273,750
(a)
Profit Recovery Group 56,000 2,306,500
International, Inc. (a)
Telespectrum Worldwide, Inc. 16,300 67,238
(a)
True North Communications 81,000 3,265,313
11,649,389
TOTAL SERVICES 31,624,306
TECHNOLOGY - 27.7%
COMMUNICATIONS EQUIPMENT - 2.2%
Advanced Fibre 108,700 2,377,813
Communications, Inc. (a)
Carrier Access Corp. (a) 82,500 4,078,594
MCKCommunications, Inc. (a) 100 2,250
Teltrend, Inc. (a) 12,000 217,500
Xircom, Inc. (a) 106,000 5,346,375
12,022,532
COMPUTER SERVICES & SOFTWARE
- - 7.5%
4Front Technologies, Inc. (a) 24,000 327,000
Aether Systems, Inc. 200 13,913
Akamai Technologies, Inc. 200 29,038
American Management Systems, 57,600 1,490,400
Inc. (a)
Ansys, Inc. (a) 30,000 271,875
Ardent Software, Inc. (a) 64,900 1,431,856
BackWeb Technologies Ltd. 300 6,319
Bell & Howell Co. (a) 50,000 1,406,250
Black Box Corp. (a) 38,000 1,928,500
BSQUARE Corp. 500 19,781
CACI International, Inc. 20,000 428,750
Class A (a)
China.com Corp. Class A 100 5,288
Data Return Corp. 300 4,519
Dendrite International, Inc. 120,000 3,765,000
(a)
Go2Net, Inc. (a) 77,300 5,439,988
Informix Corp. (a) 195,100 1,487,638
Intertrust Technologies Corp. 300 16,350
Mercury Computer Systems, 33,000 1,480,875
Inc. (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- - CONTINUED
National Instrument Corp. (a) 20,500 $ 616,281
NaviSite, Inc. 100 4,700
Peregrine Systems, Inc. (a) 80,000 3,510,000
Polycom, Inc. (a) 57,000 2,850,000
Predictive Systems, Inc. 100 4,350
Proxicom, Inc. (a) 10,000 767,500
RADWARE Ltd. (a) 100 5,144
Remedy Corp. (a) 40,000 1,720,000
Sybase, Inc. (a) 400,000 5,400,000
Unify Corp. (a) 40,000 1,160,000
Verity, Inc. (a) 84,000 5,785,500
ZapMe! Corp. 500 3,750
41,380,565
COMPUTERS & OFFICE EQUIPMENT
- - 2.1%
Advanced Digital Information 60,000 2,235,000
Corp. (a)
Crossroads Systems, Inc. 200 14,225
Cybex Corp. (a) 14,000 546,875
Performance Technologies, 23,000 497,375
Inc. (a)
SanDisk Corp. (a) 87,000 5,274,375
ScanSource, Inc. (a) 9,000 304,875
Sycamore Networks, Inc. 200 43,000
Zebra Technologies Corp. 54,000 2,936,250
Class A (a)
11,851,975
ELECTRONIC INSTRUMENTS - 2.3%
Aeroflex, Inc. (a) 120,000 667,500
Anadigics, Inc. (a) 58,000 2,233,000
Cognex Corp. (a) 33,000 987,938
Credence Systems Corp. (a) 70,000 3,193,750
Electro Scientific 30,000 1,620,000
Industries, Inc. (a)
Helix Technology, Inc. 73,500 2,962,969
LTX Corp. (a) 27,000 426,938
Meade Instruments Corp. (a) 15,000 382,500
Optical Coating Laboratories, 5,000 534,375
Inc.
13,008,970
ELECTRONICS - 12.9%
Act Manufacturing, Inc. (a) 11,000 293,563
Advanced Energy Industries, 24,000 987,000
Inc. (a)
Alliance Semiconductor Corp. 54,000 627,750
(a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Amkor Technology, Inc. (a) 120,000 $ 2,422,500
Amphenol Corp. Class A (a) 10,000 591,250
Applied Science & Technology, 30,000 735,000
Inc. (a)
Burr-Brown Corp. (a) 53,000 2,083,563
Cirrus Logic, Inc. (a) 206,000 2,047,125
CTS Corp. 178,000 10,068,125
Cypress Semiconductor Corp. 414,000 10,582,875
(a)
DII Group, Inc. (a) 71,900 2,588,400
Electroglas, Inc. (a) 41,000 1,131,344
Exar Corp. (a) 8,000 289,000
Hadco Corp. (a) 48,000 1,764,000
Integrated Device Technology, 358,000 7,361,375
Inc. (a)
International Rectifier Corp. 104,300 2,027,331
(a)
JNI Corp. 100 5,344
KEMET Corp. (a) 61,000 1,950,094
Lattice Semiconductor Corp. 123,000 4,351,125
(a)
MEMC Electronic Materials, 30,000 427,500
Inc. (a)
Micrel, Inc. (a) 42,000 2,283,750
PMC-Sierra, Inc. (a) 15,200 1,432,600
Power Integrations, Inc. (a) 30,000 3,058,125
Richardson Electronics Ltd. 10,000 73,125
Semtech Corp. (a) 41,000 1,570,813
Transwitch Corp. (a) 125,000 5,882,813
Triquint Semiconductor, Inc. 41,000 3,280,000
(a)
Zoran Corp. (a) 61,000 1,761,375
71,676,865
PHOTOGRAPHIC EQUIPMENT - 0.7%
Imation Corp. (a) 50,000 1,534,375
In Focus Systems, Inc. (a) 120,000 2,377,500
3,911,875
TOTAL TECHNOLOGY 153,852,782
TRANSPORTATION - 1.7%
AIR TRANSPORTATION - 0.5%
America West Holding Corp. 100,000 2,068,750
Class B (a)
Mesaba Holdings, Inc. (a) 46,000 529,000
2,597,750
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRANSPORTATION - CONTINUED
SHIPPING - 0.2%
Alexander & Baldwin, Inc. 41,000 $ 984,000
TRUCKING & FREIGHT - 1.0%
American Freightways Corp. (a) 50,000 1,031,250
Arkansas Best Corp. (a) 34,000 471,750
Carey International, Inc. (a) 10,100 213,994
Eagle USA Airfreight, Inc. (a) 40,950 1,208,025
Landstar System, Inc. (a) 40,000 1,620,000
Roadway Express, Inc. 26,000 542,750
USFreightways Corp. 17,000 770,313
5,858,082
TOTAL TRANSPORTATION 9,439,832
UTILITIES - 2.5%
CELLULAR - 0.2%
Price Communications Corp. 67,000 1,457,250
Triton PCS Holdings, Inc. 400 14,100
Class A
1,471,350
ELECTRIC UTILITY - 1.6%
Calpine Corp. (a) 152,000 8,759,000
GAS - 0.7%
Equitable Resources, Inc. 62,000 2,263,000
Southwest Gas Corp. 72,000 1,674,000
3,937,000
TELEPHONE SERVICES - 0.0%
Allied Riser Communications 1,000 18,063
Corp.
TOTAL UTILITIES 14,185,413
TOTAL COMMON STOCKS 533,653,238
(Cost $443,400,467)
INVESTMENT COMPANIES - 1.8%
Brazil Fund, Inc. 15,000 200,625
Central European Equity Fund, 50,000 625,000
Inc.
Chile Fund, Inc. 29,000 291,813
Emerging Markets 147,737 1,274,232
Infrastructure Fund, Inc.
Emerging Markets 40,000 430,000
Telecommunication Fund, Inc.
INVESTMENT COMPANIES -
CONTINUED
SHARES VALUE (NOTE 1)
Italy Fund, Inc. (The) 170,000 $ 2,380,000
Kemper Global Growth Fund of 50,747 1,054,023
Spain Class A
Mexico Fund, Inc. (The) 45,000 644,063
Morgan Stanley Asia-Pacific 65,000 629,688
Fund, Inc.
Morgan Stanley Emerging 46,000 514,625
Markets Fund, Inc. (a)
New Germany Fund, Inc. (The) 66,000 796,125
Portugal Fund, Inc. 50,000 615,625
Singapore Fund, Inc. 19,000 169,813
Southern Africa Fund, Inc. 17,213 201,177
TOTAL INVESTMENT COMPANIES 9,826,809
(Cost $11,152,440)
CASH EQUIVALENTS - 8.7%
Central Cash Collateral Fund, 8,125,007 8,125,007
5.26% (b)
Taxable Central Cash Fund, 40,334,918 40,334,918
5.21% (b)
TOTAL CASH EQUIVALENTS 48,459,925
(Cost $48,459,925)
TOTAL INVESTMENT PORTFOLIO - 591,939,972
106.5%
(Cost $503,012,832)
NET OTHER ASSETS - (6.5)% (36,008,943)
NET ASSETS - 100% $ 555,931,029
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At October 31, 1999, the aggregate cost
of investment securities for income tax purposes was $503,134,937. Net
unrealized appreciation aggregated $88,805,035, of which $111,165,948
related to appreciated investment securities and $22,360,913 related
to depreciated investment securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $40,200,000 all of which will expire on October 31,
2006.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
ASSETS
Investment in securities, at $ 591,939,972
value (cost $503,012,832) -
See accompanying schedule
Receivable for investments 10,072,974
sold
Receivable for fund shares 950,865
sold
Dividends receivable 84,508
Interest receivable 151,178
Redemption fees receivable 358
Other receivables 304,939
TOTAL ASSETS 603,504,794
LIABILITIES
Payable to custodian bank $ 21,787
Payable for investments 38,226,638
purchased
Payable for fund shares 857,494
redeemed
Accrued management fee 201,236
Other payables and accrued 141,603
expenses
Collateral on securities 8,125,007
loaned, at value
TOTAL LIABILITIES 47,573,765
NET ASSETS $ 555,931,029
Net Assets consist of:
Paid in capital $ 506,542,769
Undistributed net investment 480,924
income
Accumulated undistributed net (40,019,804)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 88,927,140
(depreciation) on investments
NET ASSETS, for 39,040,216 $ 555,931,029
shares outstanding
NET ASSET VALUE, offering $14.24
price and redemption price
per share ($555,931,029
(divided by) 39,040,216
shares)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED OCTOBER 31, YEAR ENDED APRIL 30, 1999
1999
INVESTMENT INCOME $ 1,396,516 $ 5,556,311
Dividends
Interest 1,476,071 3,767,736
Security lending 2,713 -
TOTAL INCOME 2,875,300 9,324,047
EXPENSES
Management fee Basic fee 1,837,664 4,491,378
Performance adjustment (591,193) (770,621)
Transfer agent fees 963,022 2,072,368
Accounting and security 164,993 295,830
lending fees
Non-interested trustees' 999 2,065
compensation
Custodian fees and expenses 15,389 33,178
Registration fees 32,451 61,805
Audit 11,849 37,027
Legal 7,860 5,909
Reports to shareholders 80,211 -
Miscellaneous 361 542
Total expenses before 2,523,606 6,229,481
reductions
Expense reductions (104,196) (258,820)
TOTAL EXPENSES AFTER 2,419,410 5,970,661
REDUCTIONS
NET INVESTMENT INCOME 455,890 3,353,386
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 56,445,088 (75,489,580)
Foreign currency transactions (3) 147
Futures contracts - (19,527,547)
Total net realized gain (loss) 56,445,085 (95,016,980)
Change in net unrealized (37,100,153) (94,922,460)
appreciation (depreciation)
on: Investment securities
Futures contracts - (882,943)
Total change in net (37,100,153) (95,805,403)
unrealized appreciation
(depreciation)
NET GAIN (LOSS) 19,344,932 (190,822,383)
NET INCREASE (DECREASE) IN $ 19,800,822 $ (187,468,997)
NET ASSETS RESULTING FROM
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED OCTOBER 31, YEAR ENDED APRIL 30, 1999 YEAR ENDED APRIL 30, 1998
1999
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 455,890 $ 3,353,386 $ 4,550,040
income
Net realized gain (loss) 56,445,085 (95,016,980) 86,477,045
Change in net unrealized (37,100,153) (95,805,403) 167,147,569
appreciation (depreciation)
NET INCREASE (DECREASE) IN 19,800,822 (187,468,997) 258,174,654
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (2,935,264) (1,778,107) (5,800,797)
From net investment income
From net realized gain - (30,938,619) (53,690,763)
TOTAL DISTRIBUTIONS (2,935,264) (32,716,726) (59,491,560)
Share transactions Net 64,140,263 332,647,409 606,422,745
proceeds from sales of shares
Reinvestment of distributions 2,869,601 32,481,558 59,048,723
Cost of shares redeemed (119,146,239) (473,182,473) (397,131,032)
NET INCREASE (DECREASE) IN (52,136,375) (108,053,506) 268,340,436
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 150,786 718,292 882,960
TOTAL INCREASE (DECREASE) (35,120,031) (327,520,937) 467,906,490
IN NET ASSETS
NET ASSETS
Beginning of period 591,051,060 918,571,997 450,665,507
End of period (including $ 555,931,029 $ 591,051,060 $ 918,571,997
undistributed net investment
income of $480,924,
$3,718,168 and $2,114,416,
respectively)
OTHER INFORMATION
Shares
Sold 4,525,388 24,088,575 37,016,611
Issued in reinvestment of 204,096 1,980,592 3,782,147
distributions
Redeemed (8,438,204) (34,043,312) (24,590,359)
Net increase (decrease) (3,708,720) (7,974,145) 16,208,399
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31, 1999 F 1999 G 1998 G 1997 G 1996 G 1995 G
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 13.83 $ 18.11 $ 13.06 $ 13.89 $ 10.93 $ 10.61
period
Income from Investment
Operations
Net investment income .01 D .07 D .10 D .06 D .07 .05
Net realized and urealized .47 (3.71) 6.20 (.39) 3.74 .28
gain (loss)
Total from investment .48 (3.64) 6.30 (.33) 3.81 .33
operations
Less Distributions
From net investment income (.07) (.04) (.13) (.01) (.08) (.01)
From net realized gain - (.61) (1.14) (.51) (.77) -
Total distributions (.07) (.65) (1.27) (.52) (.85) (.01)
Redemption fees added to paid - .01 .02 .02 - -
in capital
Net asset value, end of $ 14.24 $ 13.83 $ 18.11 $ 13.06 $ 13.89 $ 10.93
period
TOTAL RETURN B, C 3.48% (20.61)% 50.21% (2.38)% 35.72% 3.12%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 555,931 $ 591,051 $ 918,572 $ 450,666 $ 554,573 $ 562,736
(000 omitted)
Ratio of expenses to average .86% A .89% 1.01% .95% 1.01% .97%
net assets
Ratio of expenses to average .82% A, E .85% E .97% E .90% E .99% E .90% E
net assets after expense
reductions
Ratio of net investment .15% A .48% .63% .41% .39% .40%
income to average net assets
Portfolio turnover rate 173% A 96% 88% 176% 192% 182%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE FORMER ONE TIME SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
F SIX MONTHS ENDED OCTOBER 31
G YEAR ENDED APRIL 30
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Small Cap Selector (the fund) is a fund of Fidelity Capital
Trust (the trust) (formerly a fund of Fidelity Commonwealth trust) and
is authorized to issue an unlimited number of shares. The trust is
registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company organized as a Massachusetts
business trust. The financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions at the date of
the financial statements. On September 17, 1998, the Board of Trustees
approved, and on July 14, 1999 the shareholders approved, a change in
the fiscal year-end of the fund to October 31, 1999. Accordingly, the
financial statements of the fund are presented for the six-month
period ended. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among 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,
passive foreign investment companies (PFIC), partnerships, non-taxable
dividends, capital loss carryforwards and losses deferred due to wash
sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 90 days are subject to a short-term trading fee equal to 1.50% of
the proceeds of the redeemed shares. The fee, which is retained by the
fund, is accounted for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $465,454,797 and $475,762,406, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of the fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2167% to
.5200% for the period. The annual individual fund fee rate is .35%. In
the event that these rates were lower than the
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. The basic fee is subject to a performance adjustment
(up to a maximum of (plus/minus).20% of the fund's average net assets
over the performance period) based on the fund's investment
performance as compared to the appropriate index over a specified
period of time. For the periods ended, October 31, 1999 and April 30,
1999, the management fee was equivalent to an annualized rate of .42%
and an annual rate of .53%, respectively, of average net assets after
the performance adjustment.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the periods ended, October 31, 1999 and
April 30, 1999, the transfer agent fees were equivalent to an
annualized rate of .33% and an annual rate of .29%, respectively, of
average net assets.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's
accounting records and administers the security lending program. The
security lending fee is based on the number and duration of lending
transactions. The accounting fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $25,117 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $7,881,886. The fund received cash collateral of
$8,125,007 which was invested in Central Cash Collateral Fund.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the periods ended, October 31,
1999 and April 30, 1999, the fund's expenses were reduced by $89,515
and $222,737, respectively, under this arrangement.
In addition, through arrangements with the fund's custodian and
transfer agent, credits realized as a result of uninvested cash
balances were used to reduce a portion of the fund's expenses. During
the periods ended, October 31, 1999 and April 30, 1999, the fund's
custodian and transfer agent fees were reduced by $2,550 and $12,131,
and $4,405 and $31,678, respectively, under these arrangements.
INDEPENDENT AUDITORS' REPORT
To the Trustees of Fidelity Capital Trust and Shareholders of Fidelity
Small Cap Selector (formerly a fund of Fidelity Commonwealth Trust):
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments of Fidelity Small Cap Selector
as of October 31, 1999, and the related statements of operations,
changes in net assets and financial highlights for the six months
ended October 31, 1999 and for the year ended April 30, 1999. 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. The statement of changes in net assets for the year ended
April 30, 1998, and the financial highlights for each of the years in
the four-year period ended April 30, 1998 were audited by other
auditors whose report, dated June 5, 1998, expressed an unqualified
opinion on those statements and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
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 the securities owned at October 31, 1999, by
correspondence
with the custodian and brokers; where replies were not received from
brokers, we performed other auditing procedures. 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, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Fidelity Small Cap Selector at October 31, 1999, the results of its
operations, the changes in its net assets, and its financial
highlights for the year then ended in conformity with generally
accepted accounting principles.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 3, 1999
PROXY VOTING RESULTS
A special meeting of the fund's shareholders was held on September 15,
1999. The results of votes taken among shareholders on proposals
before them are reported below. Each vote reported represents one
dollar of net asset value held on the record date for the meeting.
PROPOSAL 1
To elect as Trustees the following twelve nominees.*
# OF % OF
VOTES CAST VOTES CAST
RALPH F. COX
Affirmative 7,509,257,042.22 90.253
Withheld 810,974,411.70 9.747
TOTAL 8,320,231,453.92 100.000
PHYLLIS BURKE DAVIS
Affirmative 7,506,231,332.96 90.217
Withheld 814,000,120.96 9.783
TOTAL 8,320,231,453.92 100.000
ROBERT M. GATES
Affirmative 7,504,032,770.58 90.190
Withheld 816,198,683.34 9.810
TOTAL 8,320,231,453.92 100.000
EDWARD C. JOHNSON 3D
Affirmative 7,507,525,603.81 90.232
Withheld 812,705,850.11 9.768
TOTAL 8,320,231,453.92 100.000
E. BRADLEY JONES
Affirmative 7,499,372,595.84 90.134
Withheld 820,858,858.08 9.866
TOTAL 8,320,231,453.92 100.000
DONALD J. KIRK
Affirmative 7,511,636,484.25 90.282
Withheld 808,594,969.67 9.718
TOTAL 8,320,231,453.92 100.000
# OF % OF
VOTES CAST VOTES CAST
PETER S. LYNCH
Affirmative 7,511,302,034.68 90.278
Withheld 808,929,419.24 9.722
TOTAL 8,320,231,453.92 100.000
WILLIAM O. MCCOY
Affirmative 7,511,311,111.53 90.278
Withheld 808,920,342.39 9.722
TOTAL 8,320,231,453.92 100.000
GERALD C. MCDONOUGH
Affirmative 7,500,473,641.76 90.147
Withheld 819,757,812.16 9.853
TOTAL 8,320,231,453.92 100.000
MARVIN L. MANN
Affirmative 7,511,368,292.01 90.278
Withheld 808,863,161.91 9.722
TOTAL 8,320,231,453.92 100.000
ROBERT C. POZEN
Affirmative 7,508,639,836.16 90.246
Withheld 811,591,617.76 9.754
TOTAL 8,320,231,453.92 100.000
THOMAS R. WILLIAMS
Affirmative 7,501,155,831.96 90.156
Withheld 819,075,621.96 9.844
TOTAL 8,320,231,453.92 100.000
PROPOSAL 2
To ratify the selection of Deloitte & Touche LLP as independent
accountants of the fund.
# OF % OF
VOTES CAST VOTES CAST
Affirmative 244,011,094.28 78.724
Against 4,411,030.28 1.423
Abstain 61,537,170.36 19.853
TOTAL 309,959,294.92 100.000
PROPOSAL 3
To adopt an Amended and Restated Declaration of Trust.*
# OF % OF
VOTES CAST VOTES CAST
Affirmative 6,878,704,796.76 82.675
Against 319,740,789.58 3.843
Abstain 1,121,686,130.62 13.482
TOTAL 8,320,131,716.96 100.000
PROPOSAL 4
To approve an amended management contract for the fund that would
reduce the management fee payable to FMR by the fund as FMR's assets
under management increase, allow future modifications of the contract
without a shareholder vote if permitted by the 1940 Act, and modify
the performance adjustment calculations.
# OF % OF
VOTES CAST VOTES CAST
Affirmative 227,077,001.49 73.260
Against 12,089,657.66 3.901
Abstain 70,792,635.77 22.839
TOTAL 309,959,294.92 100.000
PROPOSAL 5
To approve an amended sub-advisory agreement with FMR U.K. to allow
FMR, FMR U.K., and the trust, on behalf of the fund, to modify the
agreement subject to the requirements of the 1940 Act.
# OF % OF
VOTES CAST VOTES CAST
Affirmative 228,608,261.54 73.754
Against 10,662,235.34 3.440
Abstain 70,688,798.04 22.806
TOTAL 309,959,294.92 100.000
PROPOSAL 6
To approve an amended sub-advisory agreement with FMR Far East to
allow FMR, FMR Far East., and the trust, on behalf of the fund, to
modify the agreement subject to the requirements of the 1940 Act.
# OF % OF
VOTES CAST VOTES CAST
Affirmative 229,848,123.70 74.154
Against 9,098,306.41 2.936
Abstain 71,012,864.81 22.910
TOTAL 309,959,294.92 100.000
PROPOSAL 7
To approve a distribution and service plan pursuant to Rule 12b-1 for
the fund that describes all material aspects of the proposed financing
for the distribution of shares of the fund.
# OF % OF
VOTES CAST VOTES CAST
Affirmative 223,518,283.02 72.112
Against 14,303,243.98 4.615
Abstain 72,137,767.92 23.273
TOTAL 309,959,294.92 100.000
PROPOSAL 8
To approve an Agreement and Plan providing for the reorganization of
the fund from a separate series of one Massachusetts business trust to
another.
# OF % OF
VOTES CAST VOTES CAST
Affirmative 228,815,889.95 73.821
Against 9,114,047.84 2.941
Abstain 72,029,357.13 23.238
TOTAL 309,959,294.92 100.000
PROPOSAL 9
To amend the fund's fundamental investment limitation concerning
diversification to exclude "securities of other investment companies"
from the limitation.
# OF % OF
VOTES CAST VOTES CAST
Affirmative 223,925,797.73 72.244
Against 15,421,381.79 4.975
Abstain 70,612,115.40 22.781
TOTAL 309,959,294.92 100.000
*DENOTES TRUST-WIDE PROPOSALS AND VOTING RESULTS.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity Automated Service Telephone provides a single toll-free
number to access account balances, positions, quotes and trading. It's
easy to navigate the service, and on your first call, the system will
help you create a personal identification number (PIN) for security.
(PHONE_GRAPHIC)
FIDELITY AUTOMATED
SERVICE TELEPHONE (FAST SM)
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(PHONE_GRAPHIC)
FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-0240 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE
WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU
SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL
BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
Fidelity Management & Research
(U.K.) Inc., London, England
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Robert A. Lawrence, Vice President
Bradford Lewis, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Ned C. Lautenbach
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH FUNDS
Aggressive Growth Fund
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund (registered trademark)
Contrafund (registered trademark) II
Disciplined Equity Fund
Dividend Growth Fund
Export and Multinational Fund
Fidelity Fifty SM
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium Fund (registered trademark)
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
Tax Managed Stock Fund
TechnoQuant(registered trademark) Growth Fund
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-6666
Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST SM) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"NOTES TO FINANCIAL STATEMENTS" SECTION ON PAGE 28.
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Small Cap Selector (the fund) is a fund of Fidelity
Commonwealth 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, as an open-end management investment company
organized as a Massachusetts business trust. The financial statements
have been prepared in conformity with generally accepted accounting
principles which require management to make certain estimates and
assumptions at the date of the financial statements. On September 17,
1998, the Board of Trustees approved, and on July 14, 1999 the
shareholders approved, a change in the fiscal year-end of the fund to
October 31, 1999. Accordingly, the financial statements of the fund
are presented for the six-month period ended. The following summarizes
the significant accounting policies of the fund:
