SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO 2-62417)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 45 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No.
Fidelity Money Market Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 617-570-6200
Arthur S. Loring, Secretary, 82 Devonshire St., Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] Immediately upon filing pursuant to paragraph (b) of Rule
485
[ ] On ( ) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule
485
[x] On December 22, 1994 pursuant to paragraph (a) of Rule
485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule on or around October 31, 1994.
DC-161093.2
<PAGE>
FIDELITY MONEY MARKET TRUST:
DOMESTIC MONEY MARKET PORTFOLIO
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
U.S. TREASURY MONEY MARKET PORTFOLIO
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Summary of Portfolio Expenses
3 a, b Financial Highlights
c Performance
4 a(i) The Trust and the Fidelity Organization
a(ii), b, c Investment Objectives and Policies;
Investment Limitations; Suitability
5 a The Trust and the Fidelity Organization
b, c, d, e The Trust and the Fidelity Organization;
Management Contracts, Distribution and
Service Plans; How to Invest, Exchange
and Redeem
f Portfolio Transactions
5A a, b, c *
6 a(i) The Trust and the Fidelity Organization
a(ii) How to Invest, Exchange and Redeem
a(iii), b, c, d *
e Cover Page; How to Invest, Exchange and
Redeem
f, g How to Invest, Exchange and Redeem;
Distribution and Taxes
DC-161500.2
<PAGE>
7 a Management Contracts, Distribution and
Service Plans
b(i, ii) How to Invest, Exchange and Redeem
b(iii, iv *
b(v) How to Invest, Exchange and Redeem
c *
d How to Invest, Exchange and Redeem
e, f (i, ii) Management Contracts, Distribution and
Service Plans
f (iii) *
8 a, b, c, d How to Invest, Exchange and Redeem
9 *
* Not Applicable
LG922310.046
<PAGE>
Form N-1A Item Number
Part B Statement of Additional Information
10,11 Cover Page
12 Description of the Trust
13 a,b,c Investment Policies and Limitations
d *
14 a,b Trustees and Officers
c *
15 a, b Description of the Trust
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii), b Management Contracts; Distribution and
Service Plans
c, d, e *
f Distribution and Service Plans
g *
h Description of the Trust
i Management Contracts
17 a Portfolio Transactions
b *
c Portfolio Transactions
d, e *
18 a Description of the Trust
b *
LG922310.046
<PAGE>
19 a Additional Purchase and Redemption
Information
b Valuation of Portfolio Securities
c *
20 Taxes
21 a(i,ii) Management Contracts; Distribution and
Service Plans
a(iii),b,c *
22 Performance
23 Financial Statements for the Portfolio's
fiscal year ended August 31, 1994 will be
filed by subsequent amendment.
* Not Applicable
LG922310.046
<PAGE>
FIDELITY MONEY MARKET TRUST
U.S. Treasury Portfolio
U.S. Government Portfolio
Domestic Money Market Portfolio 82 Devonshire Street
Boston, Massachusetts 02109
PROSPECTUS
December 22, 1994
Fidelity Money Market Trust (the Trust) offers institutional, corporate
and individual investors a convenient and economical means of investing in
three professionally managed portfolios of money market instruments: U.S.
Treasury Portfolio, U.S. Government Portfolio and Domestic Money Market
Portfolio ^(the Portfolios) ^. Each Portfolio is designed to meet
investors' distinctive requirements. Each Portfolio's investment
objective is to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the standards
prescribed for each Portfolio.
AN INVESTMENT IN EACH PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT EACH PORTFOLIO WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF^, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY^, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
^ To learn more about the Portfolios and their investments, you can obtain
a copy of the Portfolios' most recent financial report and portfolio
listing, or a copy of the Statement of Additional Information ^(SAI) dated
December 22, 1994. The SAI has been filed with the Securities and
Exchange Commission (SEC) and is incorporated herein by reference. For a
free copy of either document, call 1-800-843-3001. ^
If you are investing through a Financial Institution, contact that
Financial Institution directly.
TABLE OF CONTENTS
Summary of Portfolio Expenses . . . . . . . . . . . . . . . . . . . . . .
^ Financial ^ Highlights . . . . . . . . . . . . . . . . . . . . . . . .
Investment Objectives and Policies . . . . . . . . . . . . . . . . . . .
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DC-151358.2
<PAGE>
Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . . . . .
How to Invest, Exchange and Redeem . . . . . . . . . . . . . . . . . . .
The Trust and the Fidelity Organization . . . . . . . . . . . . . . . . .
Management Contracts, Distribution and Service Plans . . . . . . . . . .
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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SUMMARY OF PORTFOLIO EXPENSES
The purpose of the table below is to assist investors in
understanding the various costs and expenses that an investor in the
Portfolios would bear directly or indirectly. This standard format was
developed for use by all mutual funds to help investors make their
investment decisions. This expense information should be considered along
with other important information such as each Portfolio's investment
objective and its past performance. There are no transaction expenses
associated with purchases or sales of the Portfolios' shares.
A. ANNUAL PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets)^
Domestic
U.S. U.S. Money
Treasury Government Market
Portfolio Portfolio Portfolio
--------- --------- ---------
Management Fees ^ 0.__% 0.__% 0.__%
Other Expenses 0.00% 0.00% 0.00%
Total Portfolio
Operating
Expenses ^ 0.__% 0.__% 0.__%
====== ===== =====
B. EXAMPLE
You would pay the following expenses on a $1,000 investment in
each Portfolio, assuming (1) 5% annual return and (2) redemption at the
end of each time period:
1 Year 3 Years 5 Years 10 Years
$ ^__ $ ^__ $ ^__ $ ^__
EXPLANATION OF TABLE
A. ANNUAL PORTFOLIO OPERATING EXPENSES are based on the Portfolios'
historical expenses. Management fees are paid by each Portfolio to
Fidelity Management & Research Company (FMR) for managing its investments
and business affairs. FMR is responsible for all other expenses of the
Portfolios with certain exceptions. Management Fees and Other Expenses are
reflected in each Portfolio's share price or dividends and are not charged
directly to the individual shareholder accounts. Please refer to the
section entitled "Management Contracts, Distribution and Service Plans" on
page ^ 13 for further information.
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B. EXAMPLE OF EXPENSES. The hypothetical example illustrates the
expenses associated with a $1,000 investment over periods of one, three,
five and ten years for each Portfolio, based on the expenses in the table
and an assumed annual rate of return of 5%. THE RETURN OF 5% AND EXPENSES
SHOULD NOT BE CONSIDERED INDICATIONS OF ACTUAL OR EXPECTED PORTFOLIO
PERFORMANCE OR EXPENSES, BOTH OF WHICH MAY VARY.
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^ FINANCIAL ^ HIGHLIGHTS
Financial Highlights. The tables ^ that follow are
included in the Portfolios' Annual Report and have been audited by
_________________, independent accountants. Their ^ report on the
financial statements and financial highlights is included on page ^__.
[Financial Highlights to be filed by subsequent amendment.]
- 5 - Prospectus
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Portfolio is to obtain as high a
level of current income as is consistent with the preservation of
principal and liquidity within the standards prescribed for each
Portfolio. Each Portfolio's investment objective is fundamental and may
not be changed without the affirmative vote of a majority of the
outstanding shares of the Portfolio. No assurance can be made that a
Portfolio will achieve its objective. ^ Each Portfolio is different in
terms of ^ its permitted investments and investment techniques. Each
Portfolio seeks to maintain a $1.00 share price at all times. The
permitted investments of the Portfolios are as follows:
U.S. TREASURY PORTFOLIO invests in instruments which are issued
or guaranteed as to principal and interest by the U.S. government and thus
constitute direct obligations of the United States ^, and in repurchase
agreements backed by these instruments. These instruments include U.S.
Treasury bills, notes, and bonds, and instruments issued by the
Export-Import Bank of the ^ United States, the General Services
Administration, the Government National Mortgage Association, the Small
Business Administration and the Washington Metropolitan Area Transit
Authority. As a ^ non-fundamental operating policy, the Portfolio intends
to invest 100% of its total assets in U.S. Treasury bills, notes and bonds
and other direct obligations of the U.S. Treasury. The Portfolio may also
engage in repurchase agreements backed by these obligations. This policy
may be changed only upon 90 days' notice to shareholders.
U.S. GOVERNMENT PORTFOLIO invests in instruments issued or
guaranteed as to principal and interest by the U.S. government or by any
of its agencies or instrumentalities (U.S. government obligations) or in
repurchase agreements backed by such instruments. ^ U.S. Government
Portfolio and ^ U.S. Treasury Portfolio are distinguishable from one
another in that ^ U.S. Government Portfolio may include instruments which
are backed only by the right of the issuer to borrow from the U.S.
Treasury or are backed only by the credit of the agency or instrumentality
issuing the obligations. Such instruments are not deemed direct
obligations of the United States ^ and thus will not be ^ purchased by
U.S. Treasury Portfolio.
DOMESTIC MONEY MARKET PORTFOLIO invests in high quality U.S.
dollar-denominated money market instruments of domestic issuers such as
(i) bank obligations including certificates of deposit (CDs) and bankers'
acceptances of U.S. banks; (ii) commercial paper; (iii) other debt
obligations; and (iv) U.S. government obligations. Other debt obligations
include, but are not limited to, municipal obligations, asset-backed
securities, restricted securities, and securities issued by special
purpose entities.
Each Portfolio may engage in repurchase agreements and reverse
repurchase agreements with those parties whose creditworthiness has been
- 6 - Prospectus
<PAGE>
reviewed and found satisfactory by FMR; each Portfolio may invest ^
illiquid securities.
The Trust has adopted a non-fundamental policy ^ on behalf of
each Portfolio which requires each Portfolio to use its best efforts to
maintain a constant net asset value per share (NAV) of $1.00 ^, and to
value its portfolio securities on the basis of the amortized cost
valuation method, pursuant to Rule 2a-7 under the Investment Company Act
of 1940 (the 1940 Act). This method is based on acquisition cost and
assumes a steady rate of amortization of premium or discount from the date
of purchase until maturity instead of looking at actual changes in market
values.
REGULATORY REQUIREMENTS. The following is a brief summary of
regulatory requirements applicable to all money market funds, which limit
certain of the Portfolios' investment policies, though U.S Treasury
Portfolio and U.S. Government Portfolio follow more restrictive policies,
as described above.
. QUALITY. Pursuant to procedures adopted by the Board of Trustees,
each Portfolio may purchase only high quality securities that FMR believes
present minimal credit risks. To be considered high quality, a security
must be a U.S. government security; or rated in accordance with applicable
rules in one of the two highest rating categories for short-term
securities by at least two nationally recognized statistical rating
organizations (NRSROs) (or one, if only one rating agency has rated the
security); or, if unrated, judged to be of equivalent quality by FMR.
High quality securities are divided into "first tier" and "
second tier" securities. FIRST TIER SECURITIES have received the highest
rating (e.g., Standard & Poor's A-1 rating) from at least two rating
services (or one, if only one has rated the security). SECOND TIER
SECURITIES have received ratings within the two highest categories (e.g.,
Standard & Poor's A-1 or A-2 rating) from at least two rating agencies (or
one, if only one has rated the security), but do not qualify as first tier
securities. If a security has been assigned different ratings by different
rating agencies, at least two rating agencies must have assigned the
higher rating in order for FMR to determine eligibility on the basis of
that higher rating. Based on procedures adopted by the Board of Trustees,
FMR may determine that an unrated security is of equivalent quality to a
rated first or second tier security.
. DIVERSIFICATION. Domestic Money Market Portfolio may not invest
more than 5% of its total assets in second tier securities. In addition, ^
Domestic Money Market Portfolio may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
- 7 - Prospectus
<PAGE>
. MATURITY. The Portfolios must limit their investments to
securities with remaining maturities of 397 days or less and must maintain
a dollar-weighted average maturity of 90 days or less.
Each Portfolio's ability to achieve its investment objective depends on
the quality and maturity of its investments. Although the Portfolios'
policies are designed to help maintain a stable $1.00 share price, all
money market instruments can change in value when interest rates or
issuers' creditworthiness change, or if an issuer or guarantor of a
security fails to pay interest or principal when due. If these changes in
value were large enough, a Portfolio's share price could fall below $1.00.
In general, securities with longer maturities are more ^ sensitive to
interest rate changes than are short-term securities, although those with
longer maturities may provide higher yields.
INVESTMENT LIMITATIONS. The following summarizes each Portfolio's
principal investment limitations. A complete listing is contained in the ^
SAI.
^(1) (a) With respect to 75% of its total assets, each
Portfolio normally may not invest more than 5% of its total assets in the
securities of any one issuer (other than U.S. government securities) ^.
(b) Under certain conditions, however, ^ each Portfolio may invest up to
10% of its total assets in the first tier securities of a single issuer
for up to three days^;
^(2) Each Portfolio will not purchase a security
(other than U.S. government securities) if, as a result, more than 25% of
its total assets would be invested in ^ the securities of issuers whose
prinicipal business activities are in the same industry, provided that ^
Domestic Money Market Portfolio ^ will invest more than 25% of its total
assets ^ in the financial services industry^.
^(3) Each Portfolio may (a) borrow money for temporary
or emergency purposes ^ and (b) engage in reverse repurchase agreements ^
for any purpose; provided that (a) and (b) in combination do not exceed 33
1/3% of its total assets; ^(c) borrow money only from a bank or from other
funds advised by FMR or an affiliate; and ^(d) may not purchase any
security while borrowings (other than reverse repurchase agreements)
representing more than 5% of its total assets are outstanding; and
^(4) Domestic Money Market Portfolio (a) may lend its
portfolio securities to broker-dealers and institutions but only when the
loans are fully collateralized; (b) may make loans to other funds advised
by FMR and its affiliates not to exceed 10% of its net assets; and (c)
will limit these loans to 33 1/3% of its total assets.
- 8 - Prospectus
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Limitations 1(a), 2, 3(a), 3(b), and 4(c) are fundamental
limitations. Each Portfolio's investment policies and limitations, unless
otherwise indicated, are not fundamental, and may be changed without
shareholder approval. Except for the percentage limitation in 4(c), these
limitations and policies are considered at the time of purchase; the sale
of securities is not required in the event of a subsequent change in
circumstances.
Because Domestic Money Market Portfolio concentrates more than 25% of its
total assets in the financial services industry, its performance may be
affected by conditions affecting banks and other financial services
companies. Companies in the financial services industry are subject to
various risks related to that industry, such as governmental regulation,
changes in interest rates, and exposure on loans, including loans to
foreign borrowers. ^ Investments in the financial services industry may
include obligations of domestic banks, savings and loan associations,
consumer and industrial finance companies, securities brokerage companies,
leasing companies, and a variety of firms in the insurance field. These
obligations include time deposits, certificates of deposit, bankers'
acceptances, and commercial paper.
SUITABILITY. The Trust is designed as an economical and
convenient vehicle for those institutional, corporate and individual
investors seeking to obtain the yields available from money market
instruments while maintaining liquidity.
The Trust is designed particularly for banks seeking investment
of short-term monies held in accounts for which the bank acts in a
fiduciary, advisory, agency, custodial or similar capacity. The Trust may
be equally suitable for the investment of short-term funds held or managed
by corporations, employee benefit plans, insurance companies, unions,
hospitals, investment counselors, professional firms, educational,
religious and charitable organizations, investment bankers, brokers, and
others, if consistent with the objectives of the particular account and
any applicable state and federal laws and regulations.
The Trust offers the advantages of large purchasing power and
diversification, thereby avoiding the generally greater expense of
executing a large number of small transactions. The Trust also makes it
possible for individual investors to participate in a more diversified
portfolio of money market instruments than the size of their investments
might otherwise permit. Moreover, investment in the Trust relieves the
investor of many management and administrative burdens usually associated
with the direct purchase and sale of money market instruments. These
include selection of portfolio investments; surveying the market for the
best terms at which to buy and sell; scheduling and monitoring maturities
and reinvestments; receipt, delivery and safekeeping of securities; and
portfolio recordkeeping.
- 9 - Prospectus
<PAGE>
PORTFOLIO TRANSACTIONS. Money market obligations generally are
traded in the over-the-counter market through broker-dealers. A
broker-dealer is a securities firm or bank which makes a market for
securities by offering to buy at one price and sell at a slightly higher
price. The difference between the prices is known as a spread. Since FMR
trades, directly or through affiliated sub- advisers, a large number of
securities, including those of Fidelity's other funds, broker-dealers are
willing to work with the funds on a more favorable spread than would be
possible for most individual investors.
Each Portfolio has authorized FMR to allocate transactions to
some broker-dealers who help distribute the Portfolio's shares or the
shares of Fidelity's other funds to the extent permitted by law, and on an
agency basis to an affiliate, Fidelity Brokerage Services, Inc. (FBSI).
FMR will allocate such transactions if commissions are comparable to those
charged by non-affiliated qualified broker-dealers for similar services.
Higher commissions may be paid to those firms that provide research
services to the extent permitted by law. FMR also is authorized to
allocate brokerage transactions to FBSI in order to secure from FBSI
research services produced by third party, independent entities. FMR may
use this research information in managing the ^ Portfolios' assets, as
well as assets of other clients.
PERFORMANCE
From time to time each Portfolio ^ advertises its YIELD and
EFFECTIVE YIELD in advertisements or in reports or other communications
with shareholders. Both yield figures are based on historical earnings and
are not intended to indicate future performance. Each Portfolio's yield
and effective yield figures are illustrated below for the seven-day period
ended August 31, ^ 1994:
U.S. Treasury U.S. Government Domestic Money
Portfolio Portfolio Market Portfolio
------------ --------------- ----------------
Effective Effective Effective
Yield Yield Yield Yield Yield Yield
^___% ___% ___% ___% ____% x.xx%
Each Portfolio's YIELD refers to the income generated by an
investment in the Portfolio over a seven-day period expressed as an annual
percentage rate. The EFFECTIVE YIELD is calculated similarly, but assumes
that the income earned from the investment is reinvested. The effective
yield will be slightly higher than the yield because of the compounding
effect on this assumed reinvestment.
Each Portfolio's TOTAL RETURN is based on the overall dollar or
percentage change in value of a hypothetical investment in a Portfolio,
assuming dividends are reinvested. A CUMULATIVE TOTAL RETURN reflects a
Portfolio's performance over a stated period of time. An AVERAGE ANNUAL
TOTAL RETURN reflects the hypothetical annually compounded rate that would
- 10 - Prospectus
<PAGE>
have produced the same cumulative total return if performance had been
constant over the entire period. Because average annual returns tend to
smooth out variations in a Portfolio's performance, investors should
recognize that they are not the same as actual year-by-year results.
Each ^ Portfolio may be rated to reflect investment quality by a
^ NRSRO. These quality ratings are based on, but not limited to, an
analysis of a Portfolio's operational policies, investment strategies and
management. These ^ NRSROs also may undertake an ongoing analysis and
assessment of these criteria in order to continually update a Portfolio's
rating.
DISTRIBUTIONS AND TAXES
Each Portfolio ordinarily declares dividends from net investment
income daily and pays such dividends monthly. Each Portfolio intends to
distribute substantially all of its net investment income and capital
gains, if any, to shareholders within each calendar year as well as on a
fiscal year basis.
FEDERAL TAXES. Dividends derived from net investment income and
short-term capital gains are taxable as ordinary income. Each Portfolio's
distributions are taxable when they are paid, whether they are taken in
cash or reinvested in additional shares, except that distributions
declared in December and paid in January are taxable as if paid on
December 31. The Portfolios will send shareholders an ^ Internal Revenue
Service (IRS) Form 1099-DIV by January ^ 31 showing taxable distributions
for the past calendar year.
OTHER TAX INFORMATION. The information above is only a summary of
some of the federal tax consequences generally affecting a Portfolio and
its shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal tax, investors may be subject to
state or local taxes on their investment. Investors should consult their
tax advisors for details and up-to-date information on the tax laws in
their states.
When investors sign the account application, they will be asked
to certify that the social security or taxpayer identification number is
correct and that they are not subject to 31% backup withholding for
failing to report income to the IRS. If investors do not comply with IRS
regulations, the IRS can require each Portfolio to withhold 31% of taxable
distributions and redemptions.
STATE AND LOCAL TAXES. Mutual fund dividends from most U.S.
government securities generally are free from state and local income
taxes. ^ However, particular states may limit this benefit, and some ^
types of securities, such as repurchase agreements and ^ some
agency-backed securities, may not qualify for the ^ benefit. Ginnie mae
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securities and other mortgage-backed securities are notable exceptions in
most states. Some states may impose intangible property taxes.^
HOW TO INVEST, EXCHANGE AND REDEEM
Shares of each Portfolio are offered continuously and may be
purchased at the NAV next determined after an order is received and
accepted. The Portfolios do not impose any sales charges in connection
with purchases of their shares, although institutions may charge their
clients fees in connection with purchases and sales for the accounts of
their clients. The Trust may discontinue offering shares generally of any
Portfolio or in any particular state without notice to shareholders.
IF YOU ARE INVESTING THROUGH A SECURITIES DEALER OR BANK
(FINANCIAL INSTITUTION), CONTACT THAT FINANCIAL INSTITUTION DIRECTLY.
Investors purchasing shares of the Portfolios through a program
of services offered by a Financial Institution should read the program
materials in conjunction with this Prospectus. Certain features of the
Portfolios may be modified in these programs and administrative charges
(in addition to payments the Financial Institution may receive pursuant to
the Distribution and Service Plan) may be imposed for the services
rendered. For further information, including copies of ^ the Prospectus,
SAI and application, investors should contact their Financial Institution
or the Trust directly.
SHARE PRICE AND DIVIDENDS. Fidelity Service Co. (Service)
calculates each Portfolio's NAV at 3:00 p.m. and 4:00 p.m. Eastern time
each day each Portfolio is open for business (see " Holiday Schedule" on
page ^ 12). The NAV of each Portfolio is determined by adding the value of
all securities and other assets of the Portfolio, deducting ^ the
Portfolio's actual and accrued liabilities, and dividing by the number of
shares ^ of the Portfolio outstanding. Each Portfolio values its
portfolio securities on the basis of amortized cost.
Shares purchased at the 3:00 p.m. price earn the income dividend
declared that day. Shares purchased at the 4:00 p.m. price begin to earn
income dividends on the following business day. Purchases made by federal
funds wire will be processed at 3:00 p.m. price if Client Services is
contacted before 3:00 p.m. Eastern time, and the Portfolio receives
federal funds that day. If investors do not call Client Services to give
notice of their wire investment before 3:00 p.m. Eastern time, their
investment will not begin to earn dividends until the first business day
following receipt of the wire. Investors may elect to receive monthly
dividends in cash.
MINIMUM INVESTMENT AND ACCOUNT BALANCE. The minimum initial
investment to establish a new account in each Portfolio is $100,000.
Subsequent investments may be in any amount. To keep an account open, a
minimum balance of $100,000 must be maintained. If an account balance
falls below $100,000 due to redemption, the Portfolio may close the
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account and wire the proceeds to the bank account of record. An investor
will be given 30 days' notice that their account will be closed unless
they make an additional investment to increase their account balance to
the $100,000 minimum.
HOW TO INVEST.
^ Purchases may only be made by federal funds wire; checks will
not be accepted for purchases. There is no fee imposed by the Portfolios
for wire purchases. However, banks may impose such a fee.
An initial investment in a Portfolio must be preceded or
accompanied by a completed, signed application. Send the application to:
Fidelity Investments - Client Services
FIIOC, ZR7
P.O. Box 1182
Boston, MA 02103-1182
WIRING INSTRUCTIONS. For wiring information and instructions,
investors should call the Financial Institution through which they trade
or Fidelity Client Services at 1-800-843- 3001.
Each Portfolio requires notification of all wire purchases. To secure same
day acceptance of federal funds, investors must telephone Client Services
at 1-800-843-3001 between 8:30 a.m. and 3:00 p.m. Eastern time on the days
that the Portfolios are open for business to advise them of the wire and
to place the trade.
^
HOW TO EXCHANGE. An exchange is a convenient way to buy shares of
the Portfolios or other Fidelity funds. Each Portfolio's shares may be
exchanged (subject to minimum investment requirements and sales charges,
if any) for shares of Fidelity's other funds registered in the investor's
state. Investors must consult the prospectus of the fund to be acquired to
determine eligibility and suitability. The redemption will be made at the
next determined NAV of the shares to be redeemed after the exchange
request is received. The shares of the fund to be acquired will be
purchased at the next determined NAV after acceptance of the purchase
order by the ^ fund (in accordance with the fund's customary policy for
accepting investments). Each Portfolio reserves the right at any time
without prior notice to refuse exchange purchases by any person or group
if, in FMR's judgment, the Portfolio would be unable to invest effectively
in accordance with its investment objective and policies or would
otherwise potentially be adversely affected. Each Portfolio may terminate
or modify the exchange privilege in the future.
Exchanges may only be made between accounts that are registered
in the same name, address, and taxpayer identification number. Exchanges
will not be permitted until a completed and signed mutual fund application
- 13 - Prospectus
<PAGE>
is on file. Exchanges may be requested by calling ^ Client Services at the
number listed above.
HOW TO REDEEM. Investors may redeem all or a portion of their
shares on any business day. The ^ shares will be redeemed at the next NAV
calculated after the Portfolio has received and accepted the redemption
request. If an account is closed, any accrued dividends will normally be
paid at the beginning of the following month. Redemptions may be made by
calling Client Services at 1-800-843-3001.
If telephone instructions are received between 8:30 a.m. and 3:00
p.m. Eastern time, proceeds of the redemption will be wired in federal
funds that day to the shareholder's bank account designated on the
application. Otherwise, shares will be redeemed at the 4:00 p.m. price and
proceeds will be wired on the next business day. Shares redeemed at the
3:00 p.m. price do not receive the dividend declared on the day of
redemption. Shares redeemed at the 4:00 p.m. price do receive the
dividends declared on the day of redemption.
Shareholders must designate on their application the U.S.
commercial bank account or accounts into which they wish the proceeds of
redemptions from their ^ account in ^ a Portfolio to be deposited. There
is no charge imposed for wiring of redemption proceeds. A shareholder may
change the bank account(s) designated to receive amounts redeemed at any
time by sending a letter of instruction with a signature guarantee to:
Fidelity Investments Institutional Operations Company (FIIOC)
Mail Zone ZR5
P.O. Box 1182
Boston, MA 02103-1182
A signature guarantee is a widely accepted way to protect
shareholders and FIIOC by verifying the signature on their redemption
request; it may not be provided by a notary public. Signature guarantees
will be accepted from: banks, brokers, dealers, municipal securities
dealers, municipal securities brokers, government securities dealers,
government securities brokers, credit unions (if authorized under state
law), national securities exchanges, registered securities associations,
clearing agencies and savings associations.
Further documentation may be required when deemed appropriate by
FIIOC.
When the ^ New York Stock Exchange (NYSE) is closed (or when
trading is restricted) for any reason other than its customary weekend or
holiday closings, or under any emergency circumstances as determined by
the SEC to merit such action, the Portfolio may suspend redemption or
postpone payment dates. In addition, the Trust reserves the right to take
up to seven days to wire redemption proceeds if, in the judgment of FMR,
the Trust could be adversely affected by making immediate payment.
Investors unable to execute transactions by telephone (for example, during
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<PAGE>
times of unusual market activity) should consider placing their order by
mail to FIIOC at the address given above. In case of suspension of the
right of redemption, investors may either withdraw their request for
redemption or receive payment based on the NAV next determined after the
termination of the suspension.
INVESTOR ACCOUNTS. FIIOC is the transfer, dividend disbursing and
shareholder servicing agent for the Trust and maintains an account for
each investor expressed in terms of full and fractional shares of each
Portfolio rounded to the nearest 1/1000th of a share. Investments in the
Portfolios are credited to an investor's account in the form of shares
immediately upon acceptance as described above, and such shares become
entitled to dividends declared as of the day of acceptance. The Trust does
not issue share certificates, but FIIOC mails investors a confirmation of
each investment or redemption from their account.
SUBACCOUNTING AND SPECIAL SERVICES. Special processing has been
arranged with FIIOC for banks, corporations and other institutions that
wish to open multiple accounts (a master account and subaccounts). An
investor wishing to utilize FIIOC's subaccounting facilities or other
special services for individual or multiple accounts may be required to
enter into a separate agreement with FIIOC. Charges for these services, if
any, will be determined on the basis of the level of services to be
rendered. Subaccounts may be opened with the initial investment or at a
later date.
ADDITIONAL INFORMATION. All account transactions (including
purchases, redemptions and exchanges) by telephone through ^ Client
Services will be recorded. Note that Fidelity will not be responsible for
any losses resulting from unauthorized transactions if it follows
reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information.
Investors should verify the accuracy of all transactions immediately upon
receipt of their confirmation statements. Investors who do not want the
ability to redeem and exchange by telephone should call Fidelity for
instructions.
In order to allow FMR to manage the Portfolios most effectively,
investors are strongly urged to initiate all trades (investments,
exchanges and redemptions of shares) as early in the day as possible and
to notify Client Services at least one day in advance of trades in excess
of $1 million. In making these trade requests, the name(s) of the
registered shareholder(s) and the account number(s) must be supplied. To
protect the Portfolios' performance and shareholders, FMR discourages
frequent trading in response to short-term market fluctuations.
HOLIDAY SCHEDULE. ^ Each Portfolio is open for business and ^
its NAV is calculated ^ each day that both the Federal Reserve Bank of New
York (New York Fed) and the ^ NYSE are open for trading. The following
holiday closings have been ^ designated for 1994: Dr. Martin Luther King,
Jr. Day (observed), Presidents' Day, Good Friday, Memorial Day^,
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<PAGE>
Independence Day^, Labor Day, Columbus Day, Veterans' Day, Thanksgiving
Day, and Christmas Day (observed). Although FMR expects the same holiday
schedule, with the addition of New Year's Day, to be observed in the
future, the ^ New York Fed or NYSE may modify its holiday schedule at any
time. ^ The right is reserved to advance the time ^ by which purchase and
redemption orders must be received on any day (1) that the principal
government securities markets close early, such as on days in advance of
holidays generally observed by participants in such markets; (2) that the
New York Fed or the NYSE closes early; or (3) as permitted by the SEC. To
the extent that ^ portfolio securities are traded in other markets on days
^ that the New York Fed or the NYSE is closed, each Portfolio's NAV may be
affected on days when investors do not have access to the Portfolios to
purchase or redeem shares. Certain Fidelity funds may follow different
holiday ^ schedules.
STATEMENTS AND REPORTS. Shareholders will receive a monthly
statement which details every transaction that affects their share balance
or account registration. A statement with tax information will be mailed
to investors by January 31 of each tax year and also will be filed with
the IRS. At least twice a year investors will receive the Portfolios'
financial statements. To reduce expenses, only one copy of the
Portfolios' reports (such as the ^ Annual Report) may be mailed to each
shareholder's household. Write to Client Services, at the address given on
page ^ 10, to have additional reports sent each time.
THE TRUST AND THE FIDELITY ORGANIZATION
U.S. Treasury Portfolio, U.S. Government Portfolio, and Domestic
Money Market Portfolio are diversified portfolios of Fidelity Money Market
Trust, an open-end management investment company organized as a ^ Delaware
business trust by a ^ Trust Instrument dated June 20, 1991. The Trust's
Board of Trustees supervises Trust activities and reviews its contractual
arrangements with companies that provide it with services. The Trust is
not required to hold annual shareholder meetings, although special
meetings may be called for a specific Portfolio or the Trust as a whole
for purposes such as electing or removing Trustees, changing fundamental
policies or limitations or approving a management contract. ^ As a
shareholder, the number of votes you are entitled to is based upon the
dollar value of your investment.
Fidelity Investments is one of the largest investment management
organizations in the ^ United States and has its principal business
address at 82 Devonshire Street, Boston, MA. It includes a number of
different companies which provide a variety of financial services and
products. The Trust employs various Fidelity companies to perform certain
activities required for its operation.
FMR, the ^ Portfolios' adviser, is the original Fidelity company, founded
in 1946. FMR provides a number of mutual funds and other clients with
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<PAGE>
investment research and portfolio management services. FMR maintains a
large staff of experienced investment personnel and a full complement of
related support facilities. As of August ^__, 1994, FMR advised funds
having more than ^ xx million shareholder accounts with a total value of
more than ^ $xxx billion. FMR has been managing money market funds since
1974. Fidelity Distributors Corporation (Distributors) distributes shares
for the Fidelity funds. FMR Corp. is the parent company for the Fidelity
companies. FMR Corp. is the ultimate parent company of FMR and FMR Texas.
Through ownership of voting common stock, members of the Edward C. Johnson
3d ^ family ^ form a controlling group with respect to FMR Corp. Changes
may occur in the Johnson family group, through death or disability, which
would result in changes in each individual family members' holding of
stock. Such changes could result in one or more family members becoming
holders of over 25% of the stock. FMR Corp. has received an opinion of
counsel that changes in the composition of the Johnson family group under
these circumstances would not result in the termination of the Portfolios'
management or distribution contracts and, accordingly, would not require a
shareholder vote to continue operation under those contracts.
MANAGEMENT CONTRACTS, DISTRIBUTION AND SERVICE PLANS
Management Contracts. FMR manages each Portfolio's investments
and business affairs, and pays the Portfolio's expenses with the following
exceptions: the fees and expenses of those Trustees who are not
"interested persons" of the Trust or FMR; brokerage fees or commissions
(if any); interest on borrowings; taxes; and such extraordinary
non-recurring expenses as may arise, including litigation to which the
Trust may be a party. Transfer agent and dividend disbursing services are
provided by FIIOC, and portfolio and general accounting record maintenance
are provided by Service. The costs of these services are borne by FMR
pursuant to its Management Contract with each Portfolio. Both FIIOC and
Service are affiliates of FMR.
Each Portfolio pays FMR a monthly management fee at the annual
rate of 0.42% of its average net assets throughout the month. For the
fiscal year ended August 31, ^ 1994, management fees before reduction for
compensation, including reimbursement of expenses, to non-interested
Trustees, for the U.S. Treasury Portfolio, U.S. Government Portfolio, and
Domestic Money Market Portfolio amounted to ^ $_______, $_________, and
$_________, respectively.
FMR has entered into a sub-advisory agreement with FMR Texas
Inc. (FMR Texas) under which FMR Texas has primary responsibility for
providing portfolio investment management services to each Portfolio while
FMR retains responsibility for providing other management services. Under
each ^ sub-advisory agreement, FMR pays FMR Texas a fee equal to 50% of
the management fee payable to FMR under its current management contract
with ^ the applicable Portfolio. The fees paid to FMR Texas are not
reduced by any voluntary or mandatory expense reimbursements that may be
in effect from time to time.
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<PAGE>
Total expenses for the fiscal year ended August 31, ^ 1994 were
^__% of average net assets for each Portfolio.
DISTRIBUTION AND SERVICE PLAN. ^ The Board of Trustees, on
behalf of each Portfolio has adopted a Distribution and Service Plan (the
Plans) pursuant to Rule 12b-1 ^ of the 1940 Act (the Rule). Each Plan
specifically recognizes that FMR, either directly or through Distributors,
may use its management fee revenues, past profits or other resources,
without limitation, to pay promotional and administrative expenses in
connection with the offer and sale of shares of the Portfolios. In
addition, each Plan provides that FMR may use its resources, including its
management fee revenues, to make payments to third parties that provide
assistance in selling shares of the Portfolios or to third parties,
including banks, that render shareholder support services. The Board of
Trustees has authorized compensation to third parties under the ^ Plans at
an annual rate of .08% annually of the average net assets of each
Portfolio with respect to which they provide or have provided shareholder
support or distribution services. No separate payments are authorized to
be made by the Portfolios under the Plans.
Each Portfolio also has a Distribution Agreement with
Distributors, a wholly-owned subsidiary of FMR Corp. Distributors, a
Massachusetts corporation organized July 18, 1960, is a broker- dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. The Distribution
Agreement calls for Distributors to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of each
Portfolio, which are continuously offered. Promotional and administrative
expenses in connection with the offer and sale of shares are paid by FMR.
Distributors also acts as distributor for other Fidelity funds. The
expenses of these operations are borne by FMR or Distributors.
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<PAGE>
^ APPENDIX
The following paragraphs provide a brief description of the
securities in which the Portfolios may invest and the transactions they
may make. The Portfolios are not limited by this discussion, however, and
they may purchase other types of securities and enter into other types of
transactions if they are consistent with the Portfolios' investment
objectives and policies.
A complete listing of the Portfolios' policies and limitations
and more detailed information about the Portfolios' investments are
contained in the Portfolios' SAI. Current holdings and recent investment
strategies are described in the Portfolios' financial report, which is
sent to shareholders twice a year.
ASSET BACKED SECURITIES ^ may include interests in pools of mortgages,
loans ^, receivables or other assets. Payment of principal and interest
may be largely dependent upon the cash flows generated by the assets
backing the securities.
BANKERS' ACCEPTANCES ^ are negotiable obligations of a bank to pay a draft
which has been drawn on it by a customer. These obligations are drawn on
large banks and usually backed by goods in international trade.
CERTIFICATES OF DEPOSIT ^ are negotiable certificates representing a
commercial bank's obligations to repay funds deposited with it, earning
special rates of interest over a given period of time.
COMMERCIAL PAPER ^ are short-term obligations issued by banks,
broker-dealers, corporations and other entities for purposes such as
financing their current operations.
DELAYED DELIVERY TRANSACTIONS. The Portfolios may buy and sell securities
on a when-issued or delayed delivery basis, with payment and delivery
taking place at a future date. The market value of securities purchased in
this way may change before the delivery date, which could affect the
market value of the Portfolios' assets. Ordinarily, the Portfolios will
not earn interest on securities until they are delivered.
ILLIQUID INVESTMENTS.^ Under the supervision of the Board of Trustees,
FMR determines the liquidity of each Portfolio's investments. The absence
of a trading market can make it difficult to ascertain a market value for
illiquid investments. ^ Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for ^ the Portfolios to sell ^ illiquid investments promptly at
an acceptable price.
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<PAGE>
INTERFUND BORROWING PROGRAM. The Portfolios have received permission
from the SEC to lend money to and borrow money from other funds advised by
FMR or its affiliates. Interfund loans and borrowings normally will extend
overnight, but can have a maximum duration of seven days. ^ U.S. Treasury
Portfolio and ^ U.S. Government Portfolio will participate in this program
only as borrowers and each portfolio will borrow through the program only
when the costs are equal to or lower than the cost of bank loans. ^
Domestic Money Market Portfolio will lend through the program only when
the returns are higher than those available at the same time from other
short-term instruments (such as repurchase agreements), and will not lend
more than 10% of its assets to other funds.
A Portfolio will not borrow through the program if, after doing so, total
outstanding borrowings immediately after such borrowings would exceed 15%
of its total assets. Loans may be called on one day's notice, and Domestic
Money Market Portfolio may have to borrow from a bank at a higher interest
rate if an interfund loan is called or not renewed. Any delay in repayment
to Domestic Money Market Portfolio could result in a lost investment
opportunity or additional borrowing costs.
^
MUNICIPAL OBLIGATIONS ^ are issued to raise money for various public
purposes, including general purpose financing ^ for state and local
governments as well as financing for specific projects or public
facilities. Municipal obligations may be backed by the full taxing power
of a municipality or by the revenues from a specific project or the credit
of a private organization.
REPURCHASE AGREEMENTS ^. In a repurchase agreement, a Portfolio buys a
security at one price and simultaneously agrees to sell it back at a
higher price. In the event of the bankruptcy of the other party to a
repurchase agreement, a Portfolio could experience delays in recovering
its cash. To the extent that, in the meantime, the value of the
securities purchased ^ had decreased, the Portfolio could experience a
loss. In all cases, FMR must find the creditworthiness of the other
party to ^ the transaction ^ satisfactory ^.
RESTRICTED ^ SECURITIES ^ cannot be sold to the public without
registration under the Securities Act of 1933. Unless registered for sale,
these securities can only be sold in privately negotiated transactions or
pursuant to an exemption from registration.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
Portfolio sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash. At the same time, a Portfolio agrees to
repurchase the instrument at a particular price and date. A Portfolio
expects that it will engage in reverse repurchase agreements for temporary
purposes such as to fund redemption requests, or when it is able to invest
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<PAGE>
the cash so acquired at a rate higher than the cost of the agreement,
which would increase the income earned by a Portfolio. Reverse repurchase
agreements may increase the risk of fluctuation in the market value of a
Portfolio's assets or in its yield.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. Each Portfolio may purchase U.S. Treasury STRIPS
(Separate Trading of Registered Interest and Principal of Securities),
that are created when the coupon payments and the principal payment are
stripped from an outstanding Treasury bond by the Federal Reserve Bank of
New York.
TIME DEPOSITS are non-negotiable deposits in a banking institution earning
a specified interest rate over a given period of time.
VARIABLE OR FLOATING RATE OBLIGATIONS provide for periodic adjustments of
the interest rates paid. Floating rate obligations have interest rates
that change whenever there is a change in a designated base rate, while
variable rate obligations provide for a specified periodic adjustment in
the interest rate. These formulas are designed to result in a market
value for the instrument that approximates its par value ^. When
determining the maturity of a variable or floating rate ^ obligation, a
Portfolio may look to the date the demand feature can be exercised, or to
the date the interest rate is readjusted, rather than to the final ^
maturity of the ^ o1
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<PAGE>
FIDELITY MONEY MARKET TRUST
U.S. Treasury Portfolio
U.S. Government Portfolio
Domestic Money Market Portfolio
STATEMENT OF ADDITIONAL INFORMATION
December 22, 1994
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the ^ Portfolios' current Prospectus
and Annual Report (dated October 14, ^ 1994). Please retain this ^
document for future reference. To obtain an additional ^ copy of the ^
Portfolios' Prospectus and Annual Report, please call Fidelity ^
Distributors Corporation at 1-800-544-8888.
TABLE OF ^ CONTENTS Page
Investment Limitations . . . . . . . . . . . . . . . . . . . . . . . 3
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . 14
Valuation of Portfolio Securities . . . . . . . . . . . . . . . . . . 16
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Additional Purchase and Redemption Information . . . . . . . . . . . 23
Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . . . 23
FMR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . 25
Management Contracts . . . . . . . . . . . . . . . . . . . . . . . . 28
Distribution and Service Plans . . . . . . . . . . . . . . . . . . . 30
Description of the Trust . . . . . . . . . . . . . . . . . . . . . . 31
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 34
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ^ 34
^ Investment Adviser
Fidelity Management & Research Company (FMR)
^ Sub-Adviser
FMR Texas Inc. (FMR Texas)
Distributor
Fidelity Distributors Corporation (Distributors)
Transfer Agent
Fidelity Investments Institutional Operations Company (FIIOC)
Custodian
DC-151353.2
<PAGE>
Morgan Guaranty Trust Company of New York
^ FMMT-ptb-1094
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<PAGE>
INVESTMENT LIMITATIONS
The following policies and limitations supplement those set forth
in the Prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a Portfolio's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation shall
be determined immediately after and as a result of the Portfolio's
acquisition of such security or other asset. Accordingly, any subsequent
change in values, net assets or other circumstances will not be considered
when determining whether the investment complies with ^ a Portfolio's
investment policies and limitations.
Each Portfolio's fundamental investment policies and limitations
may not be changed without approval by a "majority of the outstanding
voting securities" (as defined in the Investment Company Act of 1940 (1940
Act)) of the Portfolio. However, except for the fundamental investment
limitations set forth below, the investment policies and limitations
described in this ^ SAI are not fundamental and may be changed without
shareholder approval. THE FOLLOWING ARE EACH PORTFOLIO'S INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY.
Fundamental Investment Limitations of the U.S. Treasury Portfolio
----------------------------------------------------------------
The Portfolio may not:
1. with respect to 75% of the Portfolio's total assets, purchase the
securities of any issuer (other than ^ securities issued or guaranteed as
to principal ^ by the U.S. government or any of ^ its agencies or
instrumentalities) if, as a result, (a) more than 5% of ^ the Portfolio's
total assets would be invested in the securities of ^ that issuer, or (b)
the Portfolio would hold more than 10% of the outstanding voting
securities of that issuer;
2. issue senior securities, except as permitted under the Investment
Company Act of 1940;
3. ^ borrow money, except that ^ the Portfolio may (i) borrow money
for temporary or emergency purposes (not for leveraging or investment) ^,
and (ii) engage in reverse repurchase agreements ^ for any purpose;
provided that (i) and (ii) in combination do not exceed 33 1/3% of the
Portfolio's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed ^ this amount
will be reduced within three ^ days (not including Sundays and holidays)
to the extent necessary to comply with the 33 1/3% limitation;
^ 4. underwrite securities issued by others, except to the extent that
the Portfolio may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
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<PAGE>
^ 5. purchase the securities of any issuer (other than obligations
issued or guaranteed as to principal and interest by the government of the
United States, its agencies or instrumentalities) if, as a result, more
than 25% of its total assets would be invested in the securities of one or
more issuers having their principal business activities in the same
industry; provided, however, that it may invest more than 25% of its total
assets in the obligations of banks. Neither finance companies as a group
nor utility companies as a group are considered a single industry for
purposes of this policy;
^ 6. purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the Portfolio from investing in securities or other instruments backed by
real estate or securities of companies engaged in the real estate
business);
^ 7. purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments;
^ 8. lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties (but this
limit does not apply to purchases of debt securities or to repurchase
agreements);
^ 9. invest in oil, gas or other mineral exploration or development
programs; or
^ 10. write or purchase any put or call option.
11. The Portfolio may, notwithstanding any other fundamental
investment policy or limitation, invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies and
limitations as the Portfolio.
Limitation 10 does not apply to options attached to, or acquired or traded
together with, their underlying securities, and does not apply to
securities that incorporate features similar to options.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
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<PAGE>
(i) The Portfolio does not currently intend to purchase a security
(other than a security issued or guaranteed by the U.S. government or any
of its agencies or instrumentalities) if, as a result, more than 5% of its
total assets would be invested in the securities of a single issuer;
provided that the Portfolio may invest up to 10% of its total assets in
the first tier securities of a single issuer for up to three business
days.
(ii) The Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an affiliate
serves as investment adviser, or (b) by engaging in reverse repurchase
agreements with any party. The Portfolio will not purchase any security
while borrowing (excluding reverse repurchase agreements) representing
more than 5% of its total assets are outstanding. The Portfolio will not
borrow from other funds advised by FMR or its affiliates if total
outstanding borrowings immediately after such borrowing would exceed 15%
of the Portfolio's total assets.
(iii) The Portfolio does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in kind
and amount to the securities sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
(iv)^ The Portfolio does not currently intend to purchase any security
if, as a result, more than 10% ^ of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be sold
or disposed of in the ordinary course of business at approximately the
prices at which they are valued.
^(v) The Portfolio does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
^(vi) The Portfolio does not currently intend to purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of its total assets would be invested in the
securities of business enterprises that, including predecessors, have a
record of less than three years of continuous operation.
^(vii) The Portfolio does not currently intend to purchase the
securities of any issuer if those officers and Trustees of the Trust and
those officers and directors of FMR who individually own more than 1/2 of
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<PAGE>
1% of the securities of such issuer together own more than 5% of such
issuer's securities.
(viii) The Portfolio does not currently intend to purchase securities on
margin, except that the Portfolio may obtain such short-term credits as
are necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(ix) The Portfolio does not currently intend to (a) purchase
securities of other investment companies, except in the open market where
no commission except the ordinary broker's commission is paid, or (b)
purchase or retain securities issued by other open-end investment
companies. Limitations (a) and (b) do not apply to securities received as
dividends, through offers of exchange, or as a result of reorganization,
consolidation, or merger.
(x) The Portfolio does not currently intend to invest all of its
assets in the securities of a single open-end management investment
company with the same fundamental investment objective, policies, and
limitations as the Portfolio.
FUNDAMENTAL INVESTMENT LIMITATIONS OF THE U.S. GOVERNMENT PORTFOLIO
-------------------------------------------------------------------
The Portfolio may not:
1. with respect to 75% of the Portfolio's total assets, purchase the
securities of any issuer (other than ^ securities issued or guaranteed as
to principal ^ by the U.S. government or any of ^ its agencies or
instrumentalities) if, as a result, (a) more than 5% of ^ the Portfolio's
total assets would be invested in the securities of ^ that issuer, or (b)
the Portfolio would hold more than 10% of the outstanding voting
securities of that issuer;
2. issue senior securities, except as permitted under the Investment
Company Act of 1940;
3. ^ borrow money, except that ^ the Portfolio may (i) borrow money
for temporary or emergency purposes (not for leveraging or investment) ^,
and (ii) engage in reverse repurchase agreements ^ for any purpose;
provided that (i) and (ii) in combination do not exceed 33 1/3% of the
Portfolio's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed ^ this amount
will be reduced within three ^ days (not including Sundays and holidays)
to the extent necessary to comply with the 33 1/3% limitation;
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<PAGE>
^ 4. underwrite securities issued by others, except to the extent that
the Portfolio may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
^ 5. purchase the securities of any issuer (other than obligations
issued or guaranteed as to principal and interest by the government of the
United States, its agencies or instrumentalities) if, as a result, more
than 25% of its total assets would be invested in the securities of one or
more issuers having their principal business activities in the same
industry; provided, however, that it may invest more than 25% of its total
assets in the obligations of banks. Neither finance companies as a group
nor utility companies as a group are considered a single industry for
purposes of this policy;
^ 6. purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the Portfolio from investing in securities or other instruments backed by
real estate or securities of companies engaged in the real estate
business);
^ 7. purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments;
^ 8. lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties (but this
limit does not apply to purchases of debt securities or to repurchase
agreements);
^ 9. invest in oil, gas or other mineral exploration or development
programs; or
^ 10. write or purchase any put or call option.
11. The Portfolio may, notwithstanding any other fundamental
investment policy or limitation, invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies and
limitations as the Portfolio.
Limitation 10 does not apply to options attached to, or acquired or traded
together with, their underlying securities, and does not apply to
securities that incorporate features similar to options.
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THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The Portfolio does not currently intend to purchase a security
(other than a security issued or guaranteed by the U.S. government or any
of its agencies or instrumentalities) if, as a result, more than 5% of its
total assets would be invested in the securities of a single issuer;
provided that the Portfolio may invest up to 10% of its total assets in
the first tier securities of a single issuer for up to three business
days.
(ii) The Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an affiliate
serves as investment adviser, or (b) by engaging in reverse repurchase
agreements with any party. The Portfolio will not purchase any security
while borrowing (excluding reverse repurchase agreements) representing
more than 5% of its total assets are outstanding. The Portfolio will not
borrow from other funds advised by FMR or its affiliates if total
outstanding borrowings immediately after such borrowing would exceed 15%
of the Portfolio's total assets.
(iii) The Portfolio does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in kind
and amount to the securities sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
(iv)^ The Portfolio does not currently intend to purchase any security
if, as a result, more than 10% ^ of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be sold
or disposed of in the ordinary course of business at approximately the
prices at which they are valued.
^(v) The Portfolio does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
^(vi) The Portfolio does not currently intend to purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of its total assets would be invested in the
securities of business enterprises that, including predecessors, have a
record of less than three years of continuous operation.
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<PAGE>
^(vii) The Portfolio does not currently intend to purchase the
securities of any issuer if those officers and Trustees of the Trust and
those officers and directors of FMR who individually own more than 1/2 of
1% of the securities of such issuer together own more than 5% of such
issuer's securities.
(viii) The Portfolio does not currently intend to purchase securities on
margin, except that the Portfolio may obtain such short-term credits as
are necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(ix) The Portfolio does not currently intend to (a) purchase
securities of other investment companies, except in the open market where
no commission except the ordinary broker's commission is paid, or (b)
purchase or retain securities issued by other open-end investment
companies. Limitations (a) and (b) do not apply to securities received as
dividends, through offers of exchange, or as a result of reorganization,
consolidation, or merger.
(x) The Portfolio does not currently intend to invest all of its
assets in the securities of a single open-end management investment
company with the same fundamental investment objective, policies, and
limitations as the Portfolio.
FUNDAMENTAL INVESTMENT LIMITATIONS OF THE DOMESTIC MONEY MARKET PORTFOLIO
------------------------------------------------------------------------
The Portfolio may not:
1. with respect to 75% of the Portfolio's total assets, purchase the
securities of any issuer (other than ^ securities issued or guaranteed as
to principal ^ by the U.S. government or any of ^ its agencies or
instrumentalities) if, as a result, (a) more than 5% of ^ the Portfolio's
total assets would be invested in the securities of ^ that issuer, or (b)
the Portfolio would hold more than 10% of the outstanding voting
securities of that issuer;
2. issue senior securities, except as permitted under the
Investment Company Act of 1940;
3. ^ borrow money, except that ^ the Portfolio may (i) borrow money
for temporary or emergency purposes (not for leveraging or investment) ^,
and (ii) engage in reverse repurchase agreements ^ for any purpose;
provided that (i) and (ii) in combination do not exceed 33 1/3% of the
Portfolio's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed ^ this amount
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<PAGE>
will be reduced within three ^ days (not including Sundays and holidays)
to the extent necessary to comply with the 33 1/3% limitation;
^ 4. underwrite securities issued by others, except to the extent that
the Portfolio may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
^ 5. purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government, or any of its agencies or
instrumentalities) if, as a result, more than 25% of its total assets
would be invested in the securities of companies whose principal business
activities are in the same industry; except that it will invest more than
25% of its total assets in the financial services industry.
^ 6. purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the Portfolio from investing in securities or other instruments backed by
real estate or securities of companies engaged in the real estate
business);
^ 7. purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments;
^ 8. lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties (but this
limit does not apply to purchases of debt securities or to repurchase
agreements);
^ 9. invest in oil, gas or other mineral exploration or development
programs; or
^ 10. write or purchase any put or call option.
11. The Portfolio may, notwithstanding any other fundamental
investment policy or limitation, invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies and
limitations as the Portfolio.
Limitation 10 does not apply to options attached to, or acquired or traded
together with, their underlying securities, and does not apply to
securities that incorporate features similar to options.
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<PAGE>
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The Portfolio does not currently intend to purchase a security
(other than a security issued or guaranteed by the U.S. government or any
of its agencies or instrumentalities) if, as a result, more than 5% of its
total assets would be invested in the securities of a single issuer;
provided that the Portfolio may invest up to 10% of its total assets in
the first tier securities of a single issuer for up to three business
days.
(ii) The Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an affiliate
serves as investment adviser, or (b) by engaging in reverse repurchase
agreements with any party. The Portfolio will not purchase any security
while borrowing (excluding reverse repurchase agreements) representing
more than 5% of its total assets are outstanding. The Portfolio will not
borrow from other funds advised by FMR or its affiliates if total
outstanding borrowings immediately after such borrowing would exceed 15%
of the Portfolio's total assets.
(iii) The Portfolio does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in kind
and amount to the securities sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
(iv) The Portfolio does not currently intend to purchase any security
if, as a result, more than 10% ^ of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be sold
or disposed of in the ordinary course of business at approximately the
prices at which they are valued.
(iv) The Portfolio does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
Portfolio's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser. This
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(v) The Portfolio does not currently intend to purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of its total assets would be invested in the
securities of business enterprises that, including predecessors, have a
record of less than three years of continuous operation.
(vi) The Portfolio does not currently intend to purchase the
securities of any issuer if those officers and Trustees of the Trust and
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<PAGE>
those officers and directors of FMR who individually own more than 1/2 of
1% of the securities of such issuer together own more than 5% of such
issuer's securities.
(viii) The Portfolio does not currently intend to purchase securities on
margin, except that the Portfolio may obtain such short-term credits as
are necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(ix) The Portfolio does not currently intend to (a) purchase
securities of other investment companies, except in the open market where
no commission except the ordinary broker's commission is paid, or (b)
purchase or retain securities issued by other open-end investment
companies. Limitations (a) and (b) do not apply to securities received as
dividends, through offers of exchange, or as a result of reorganization,
consolidation, or merger.
(x) The Portfolio does not currently intend to invest all of its
assets in the securities of a single open-end management investment
company with the same fundamental investment objective, policies, and
limitations as the Portfolio.
For the purposes of U.S. Treasury Portfolio's and U.S. Government
Portfolio's investment limitation ^ 5, the Securities and Exchange
Commission (SEC) currently defines the term "bank" to include U.S. banks
and their domestic branches and domestic branches of foreign banks if
their obligations are guaranteed by the U.S. bank.
For the Portfolios' policies on quality and maturity, see the
section entitled "Quality and Maturity" on page 11.
AFFILIATED BANK TRANSACTIONS. ^ A Portfolio may engage in
transactions with financial institutions that are, or may be considered to
be, "affiliated persons" of the Portfolios under the 1940 Act. ^ These
transactions may include repurchase agreements with custodian banks^;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); ^ municipal securities; ^ U.S.
government securities with affiliated ^ financial institutions that are
primary dealers in these securities; short-term currency transactions; and
short-term borrowings. In accordance with exemptive orders issued by the
SEC, the Board of Trustees has established and periodically reviews
procedures applicable to transactions involving affiliated financial
institutions.
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<PAGE>
ASSET-BACKED SECURITIES ^ may include interests in pools of
mortgages, loans, ^ receivables, or other assets. Payment of principle
and interest may be largely dependent upon the cash flows generated by the
assets backing the securities, and, in certain cases, supported by letters
of credit, surety bonds, or other credit enhancements. The value of
asset-backed securities may also be affected by the creditworthiness of
the servicing agent for the pool, the originator of the loans or
receivables, or the financial institution(s) providing the credit support.
DELAYED DELIVERY TRANSACTIONS. The Portfolios may buy and sell
securities on a delayed delivery or when-issued basis. These transactions
involve a commitment by the Portfolios to purchase or sell specific
securities at a predetermined price and/or yield, with payment and
delivery taking place after the customary settlement period for that type
of security (and more than seven days in the future). Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed delivery basis, a
Portfolio assumes the rights and risks of ownership, including the risk of
price and yield fluctuations. Because a Portfolio is not required to pay
for securities until the delivery date, these risks are in addition to the
risks associated with each Portfolio's other investments. If a Portfolio
remains substantially fully invested at a time when delayed delivery
purchases are outstanding, the delayed delivery purchases may result in a
form of leverage. When delayed delivery purchases are outstanding, a
Portfolio will set aside appropriate liquid assets in a segregated
custodial account to cover its purchase obligations. When a Portfolio has
sold a security on a delayed delivery basis, the Portfolio does not
participate in further gains or losses with respect to the security. If
the other party to a delayed delivery transaction fails to deliver or pay
for the securities, ^ a Portfolio could miss a favorable price or yield
opportunity, or could suffer a loss.
The Portfolios may renegotiate delayed delivery transactions
after they are entered into, and may sell underlying securities before
they are delivered, which may result in a capital gains or losses.
ILLIQUID INVESTMENTS are investments that cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued. Under the supervision of the Board of Trustees,
FMR determines the liquidity of ^ a Portfolio's investments and, through
reports from FMR, the Board monitors investments in illiquid instruments.
In determining the liquidity of ^ a Portfolio's investments, FMR may
consider various factors including (1) the frequency of trades and
quotations, (2) the number of dealers and prospective purchasers in the
marketplace, (3) dealer undertakings to make a market, (4) the nature of
the security (including any demand or tender features) and (5) the nature
of the marketplace for trades (including the ability to assign or offset
the Portfolio's rights and obligations relating to the investment).
Investments currently considered to be illiquid include repurchase
agreements not entitling the holder to payment of principal and interest
within seven days. Also, with respect to Domestic Money Market Portfolio,
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<PAGE>
FMR may determine some restricted securities and time deposits to be
illiquid. In the absence of market quotations, illiquid investments are
valued for purposes of monitoring amortized cost valuation at fair value
as determined in good faith by a committee appointed by the Board of
Trustees. If through a change in values, net assets or other
circumstances, the Portfolio were in a position where 10% or more of its
net assets were invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
QUALITY AND MATURITY. Pursuant to procedures adopted by the
Board of Trustees, the Portfolios may purchase only high-quality
securities that FMR believes present minimal credit risks. To be
considered high-quality, a security must be a U.S. government security;
rated in accordance with applicable rules in one of the two highest
categories for short-term securities by at least two nationally recognized
rating services (or by one, if only one rating service has rated the
security); or, if unrated, judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and
"second tier" securities. First tier securities have received the highest
rating (e.g. Standard & Poor's A-1 rating) from at least two rating
services (or one, if only one has rated the security). Second tier
securities have received ratings within the two highest rating categories
(e.g. Standard & Poor's A-1 or A-2) from at least two rating services (or
one, if only one has rated the security), but do not qualify as first tier
securities. If a security has been assigned different ratings by
different ratings services, at least two rating services must have
assigned the higher rating in order for FMR to determine eligibility in
the basis of that higher rating. Based on procedures adopted by the Board
of Trustees, FMR may determine that an unrated security is of equivalent
quality to a rated first or second tier security.
Domestic Money Market Portfolio may not invest more than 5% of
its total assets in second tier securities. In addition, the Domestic
Money Market Portfolio may not invest more than 1% of its total assets or
$1 million (whichever is greater) in the second tier securities of a
single issuer.
The Portfolios currently intend to limit their investments to
securities with remaining maturities of 397 days or less, and to maintain
a dollar-weighted average maturity of 90 days or less.
REPURCHASE AGREEMENTS. In a repurchase agreement, a Portfolio
purchases a security and simultaneously commits to resell that security to
the seller at an agreed-upon price ^. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated
to the coupon rate or maturity of the purchased security. A repurchase
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<PAGE>
agreement involves the obligation of the seller to pay the agreed-upon
resale price, which obligation is in effect secured by the value (at least
equal to the amount of the agreed-upon resale price and marked to market
daily) of the underlying security. ^ A Portfolio may engage in repurchase
agreements with respect to any type of security in which it is authorized
to invest (except that the security may have a maturity in excess of 397
days). While it does not presently appear possible to eliminate all risks
from these transactions (particularly the possibility of a decline in the
market value of the underlying securities, as well as delays and costs to
^ a Portfolio in connection with bankruptcy proceedings), it is ^ each
Portfolio's current policy to limit repurchase agreement transactions to
those parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES ^ generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration under
the Securities Act of 1933, or in a registered public offering. Where
registration is required, the Portfolio may be obligated to pay all or
part of the registration expense and a considerable period may elapse
between the time it decides to seek registration and the time ^ it may be
permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop, the
Portfolio might obtain a less favorable price than prevailed when it
decided to seek registration of the security. However, in general, the
Portfolio anticipates holding restricted securities to maturity or selling
them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase
agreement, a Portfolio sells a portfolio instrument to another party, such
as a bank or broker-dealer, in return for cash and agrees to repurchase
the instrument at a particular price and time. While a reverse repurchase
agreement is outstanding, ^ a Portfolio will maintain appropriate liquid
assets in a segregated custodial account to cover its obligation under the
agreement. ^ A Portfolio will enter into reverse repurchase agreements
only with parties whose creditworthiness has been found satisfactory by
FMR. Such transactions may increase fluctuations in the market value of ^
a Portfolio's assets and may be viewed as a form of leverage.
^ Short Sales Against the Box. A Portfolio may sell securities
short when it owns or has the right to obtain securities equivalent in
kind or amount to the securities sold short. Short sales could be used to
protect the net asset value per share (NAV) of a Portfolio in anticipation
of increased interest rates without sacrificing the current yield of the
securities sold short. If a Portfolio enters into a short sale against
the box, it will be required to set aside securities equivalent in kind
and amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to continue to
hold such securities while the short sale is outstanding. A Portfolio
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<PAGE>
will incur transaction costs, including interest expenses, in connection
with opening, maintaining and closing short sales against the box.
^ Stripped Government Securities are created by separating the
income and principal components of a debt instrument and selling them
separately. Each Portfolio may purchase U.S. Treasury STRIPS (Separate
Trading of Registered Interest and Principal of Securities), that are
created when the coupon payments and the principal payment are stripped
from an outstanding Treasury bond by the Federal Reserve Bank. Bonds
issued by the Resolution Funding Corporation (REFCORP) can also be
stripped in this fashion. REFCORP Strips are eligible investments for the
Portfolios.
Domestic Money Market Portfolio can purchase privately stripped
government securities, which are created when a dealer deposits a Treasury
security or federal agency security with a custodian for safekeeping and
then sells the coupon payments and principal payment that will be
generated by this security. Proprietary receipts, such as Certificates of
Accrual on Treasury Securities (CATS), Treasury Investment Growth Receipts
(TIGRS), and generic Treasury Receipts (TRs), are stripped U.S. Treasury
securities that are separated into their component parts through trusts
created by their broker sponsors. Bonds issued by the Financing
Corporation (FICO) can also be stripped in this fashion.
Because of the SEC's views on privately stripped government
securities, Domestic Money Market Portfolio must evaluate them as it would
non-government securities pursuant to regulatory guidelines applicable to
all money market funds. Accordingly, the Portfolio intends to purchase
only those privately stripped government securities that have either
received the highest rating from two nationally recognized rating services
(or one, if only one has rated the security), or, if unrated, been judged
to be of equivalent quality by FMR pursuant to procedures adopted by the
Board of Trustees.
^ Variable or Floating Rate Demand Obligations provide for
periodic adjustments of the interest rate paid. Floating rate obligations
have interest rates that change whenever there is a change in a designated
base rate while variable rate obligations provide for a specified periodic
adjustment in the interest rate. These formulas are designed to result in
a market value for the instrument that approximates its par value.
^ Some variable or floating rate ^ obligations permit holders to
demand payment of the unpaid principal balance plus an accrued interest
from the issuers or certain financial intermediaries. Issuers or
financial intermediaries who provide demand features or stand-by
commitments often obtain letters of credit (LOCs) or other guarantees from
domestic or foreign banks to support their repurchase commitments. FMR
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<PAGE>
may rely upon its evaluation of a bank's credit in determining whether to
purchase an obligation supported by an LOC. In evaluating a foreign
bank's credit, FMR will consider whether adequate public information about
the bank is available and whether the bank may be subject to unfavorable
political or economic developments, currency controls, or other
governmental restrictions that might affect the bank's ability to honor
its credit commitment.
When determining the maturity of a variable or floating rate
obligation, a Portfolio may look to the date the demand feature can be
exercised, or to the date the interest rate is readjusted, rather than to
the final maturity of the obligation.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of ^ each Portfolio by FMR pursuant to authority
contained in the ^ management contract. If FMR grants investment
management authority to the sub-adviser (see the section entitled
"Management Contracts"), the sub-adviser will be authorized to place
orders for the purchase and sale of portfolio securities, and will do so
in accordance with the policies described below. FMR is also responsible
for the placement of transaction orders for other investment companies and
accounts for which it or its affiliates act as investment ^ adviser.
Securities purchased and sold by the Portfolios generally will be traded
on a net basis (i.e., without commission). In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to, the
size and type of the transaction; the nature and character of the markets
for the security to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the broker-dealer firm;
the broker-dealer's execution services rendered on a continuing basis; and
the reasonableness of any commissions.
The Portfolios may execute portfolio transactions with
broker-dealers who provide research and execution services to the ^
Portfolios or other accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; the availability of securities or the purchasers or
sellers of securities; furnishing analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy
and performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and
settlement). FMR maintains a listing of broker- dealers who provide such
services on a regular basis. However, as many transactions on behalf of
the Portfolios are placed with broker-dealers (including broker-dealers on
the list) without regard to the furnishing of such services, it is not
possible to estimate the proportion of such transactions directed to such
broker-dealers solely because such services were provided. The selection
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<PAGE>
of such broker-dealers generally is ^ made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute
transactions on behalf of the Portfolios may be useful to FMR in rendering
investment management services to the Portfolios ^ or its other clients,
and conversely, such research provided by broker-dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR in
carrying out its obligations to the Portfolios. The receipt of such
research has not reduced FMR's normal independent research activities;
however, it enables FMR to avoid the additional expenses that could be
incurred if FMR tried ^ to develop comparable information through its own
efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the Portfolios to pay such higher commissions, FMR must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Portfolios and its other clients. In reaching
this determination, FMR will not attempt to place a specific dollar value
on the brokerage and research services provided, or to determine what
portion of the compensation should be related to those services.
FMR is authorized to use research services provided by, and to
place portfolio transactions with, brokerage firms that have provided
assistance in the distribution of shares of the Portfolios or shares of
other Fidelity funds ^ to the extent permitted by law. FMR may use
research services provided by and place agency transactions with Fidelity
Brokerage Services, Inc. (FBSI) ^ and Fidelity Brokerage Services, Ltd.
(FBSL), subsidiaries of FMR Corp., if the commissions are fair ^,
reasonable, and comparable to commissions charged by ^ non-affiliated,
qualified brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits
members of national securities exchanges from executing exchange
transactions for accounts which they or their affiliates manage, ^ unless
certain requirements are satisfied. Pursuant to such ^ requirements, the
Board of Trustees has ^ authorized FBSI to execute portfolio transactions
on national securities exchanges ^ in accordance with approved procedures
and applicable SEC rules.
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<PAGE>
The Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of ^ the Portfolios and review the commissions paid
by each Portfolio over representative periods of time to determine if they
are reasonable in relation to the benefits to each Portfolio.
From time to time the Trustees will review whether the recapture
for the benefit of the Portfolios of some portion of the brokerage
commissions or similar fees paid by ^ the Portfolios on portfolio
transactions is legally permissible and advisable. ^ Each Portfolio seeks
to recapture soliciting broker-dealer fees on the tender of portfolio
securities, but at present no other recapture arrangements are in effect.
The Trustees intend to continue to review whether recapture opportunities
are available and are legally permissible and, if so, to determine, in the
exercise of their business judgment ^ whether it would be advisable for
each Portfolio to seek such recapture.
Although the Trustees and officers of ^ each Portfolio are
substantially the same as those of other funds managed by FMR, investment
decisions for ^ each Portfolio are made independently from those of other
funds managed by FMR or accounts managed by FMR affiliates. It sometimes
happens that the same security is held in the portfolio of more than one
of these funds or accounts. Simultaneous transactions are inevitable when
several funds are managed by the same investment ^ adviser, particularly
when the same security is suitable for the investment objective of more
than one fund or account.
When two or more funds are simultaneously engaged in the purchase
or sale of the same security, the prices and amounts are allocated in
accordance with ^ procedures believed to be appropriate and equitable for
each Portfolio. In some cases this system could have a detrimental effect
on the price or ^ value of the security as far as ^ each Portfolio is
concerned. In other cases, however, the ability of the ^ Portfolios to
participate in volume transactions will produce better executions and
prices for the ^ Portfolios. It is the current opinion of the Trustees
that the desirability of retaining FMR as investment adviser to ^ each
Portfolio outweighs any disadvantages that may be said to exist from
exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Each Portfolio values its investments on the basis of amortized
cost. This technique involves valuing an instrument at its cost as
adjusted for amortization of premium or accretion of discount rather than
its value based on current market quotations or appropriate substitutes
which reflect current market conditions. The amortized cost value of an
instrument may be higher or lower than the price the ^ Portfolio would
receive if it sold the instrument.
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<PAGE>
Valuing each Portfolio's instruments on the basis of amortized
cost and use of the term "money market fund" are permitted by Rule 2a-7
under the 1940 Act. The Portfolio must adhere to certain conditions under
Rule 2a-7; these conditions are summarized in the Prospectus.
The Board of Trustees of the Trust oversees FMR's adherence to
SEC rules concerning money market funds, and has established procedures
designed to stabilize each Portfolio's net asset value per share (NAV) at
$1.00. At such intervals as they deem appropriate, the Trustees consider
the extent to which NAV calculated by using market valuations would
deviate from $1.00 per share. If the Trustees believe that a deviation
from the Portfolio's amortized cost per share may result in material
dilution or other unfair results to shareholders, the Trustees have agreed
to take such corrective action, if any, as they deem appropriate to
eliminate or reduce, to the extent reasonably practicable, the dilution or
unfair results. Such corrective action could include selling portfolio
instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity; withholding dividends; redeeming
shares in kind; establishing NAV by using available market quotations; and
such other measures as the Trustees may deem appropriate.
During periods of declining interest rates, ^ a Portfolio's yield
based on amortized cost may be higher than the yield based on market
valuations. Under these circumstances, a shareholder in the Portfolio
would be able to obtain a somewhat higher yield than would result if the
Portfolio utilized market valuations to determine its NAV. The converse
would apply in a period of rising interest rates.
PERFORMANCE
From time to time each Portfolio ^ advertises its yield and
effective yield in advertisements or in reports or other communications
with shareholders. Both yield figures are based on historical earnings
and are not intended to indicate future performance. The net change in
value of a hypothetical account containing one share reflects the value of
additional shares purchased with dividends from the one original share and
dividends declared on both the original share and any additional shares.
This income is then annualized. That is, the amount of income generated
by the investment during that week is assumed to be generated each week
over a 52-week period and is shown as a percentage of the investment. The
effective yield is calculated similarly but, when annualized, the income
earned by an investment in each Portfolio is assumed to be reinvested.
The effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment. In addition to the
current yield, the Portfolios may quote yields in advertising based on any
historical seven day period.
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<PAGE>
Each Portfolio's yield and effective yield figures are
illustrated below for the seven-day period ended August 31, ^ 1994.
Effective
Yield Yield
----- -------
U.S. Treasury % %
^ Portfolio .
U . S . % %
Government ^
Portfolio . .
Domestic % %
Money Market
^ Portfolio .
Yield information may be useful in reviewing each Portfolio's
performance and for providing a basis for comparison with other investment
alternatives. Each Portfolio's yield will fluctuate, unlike investments
which pay a fixed yield for a stated period of time.^
TOTAL RETURN CALCULATIONS: Total returns quoted in advertising
reflect all aspects of a Portfolio's return, including the effect of
reinvesting dividends and capital gain distributions (if any). Average
annual returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in a Portfolio over a stated
period and then calculating the annually compounded percentage rate that
would have produced the same results if the rate of growth or decline in
the value of the investment had been constant over that period. For
example, a cumulative return of 100% over ten years would produce an
average annual return of 7.18%, which is the steady annual rate that would
equal 100% growth on a compounded basis in ten years. While average
annual returns are a convenient means of comparing investment
alternatives, investors should realize that a Portfolio's performance is
not constant over time, but changes from year to year, and that average
annual returns represent averaged figures as opposed to the actual
year-to-year performance of a Portfolio.
In addition to average annual returns, a Portfolio may quote
unaveraged or cumulative total returns reflecting the simple change in the
value of an investment over a stated period. Average annual and
cumulative total returns may be quoted as percentages or as dollar amounts
and may be calculated for a single investment, as series of investments or
a series of redemptions over any time period. Total returns may be broken
down into their components of income and capital in order to illustrate
the relationship of these factors and their contributions to total return.
Total returns, yields, and other performance information may be quoted
numerically or in a table, graph, or similar illustration. Each
Portfolio's cumulative total returns and average annual returns for the
fiscal year ended August 31, ^ 1994 were as follows:
HISTORICAL PORTFOLIO RESULTS
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<PAGE>
U. S. Treasury
Portfolio
One YearFive YearTen Year
------- -----------------
Average Annual % % %
Total ^ Returns
Cumulative Total % % %
Returns
U. S. GOVERNMENT
PORTFOLIO
One Year Five Year Ten Year
-------- --------- --------
Average Annual % % %
Total ^ Returns
Cumulative Total % % %
Returns
Domestic Money
Market Portfolio
One Year Five YearTen Year
-------- -----------------
Average Annual % % %
Total ^ Returns
Cumulative Total % % %
Returns
The following chart shows the income and capital elements of each
Portfolio's year-by-year total returns from October 31, 1984 through
August 31, ^ 1994 as compared to the cost of living measured by the
Consumer Price Index (CPI) over the same periods. During this period, a
hypothetical investment of $10,000 in ^ U. S. Treasury Portfolio, U. S.
Government Portfolio and Domestic Money Market Portfolio would have grown
to ^ $______, $______, $______, respectively, assuming all dividends were
invested.
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<PAGE>
Initial Value of Value of Consumer
$10,000 Reinvested Reinvested Total Price
Period Ended Investment Dividends Capital ^ Gains Value Index*
------------ --------- --------- -------------- ------ ------
U. S. Treasury
Portfolio
10/31/84 $10,000 $ 0 $ 0 $10,000 $10,000
10/31/85 10,000 807 0 10,807 10,323
10/31/86 10,000 1,547 0 11,547 10,475
10/31/87 10,000 2,262 0 12,262 10,950
10/31/88 10,000 3,118 0 13,118 11,415
10/31/89 10,000 4,320 0 14,320 11,928
10/31/90 10,000 5,492 0 15,492 12,678
10/31/91 10,000 6,459 0 16,459 13,048
08/31/92** 10,000 7,014 0 17,014 13,381
08/31/93 10,000 7,506 0 17,506 ^
13,751
08/31/94
* From month-end closest to the initial investment date.
** The fiscal year-end of the Trust changed from October 31 to August 31
in July 1992.
Initial Value of Value of Consumer
$10,000 Reinvested Reinvested Total Price
Period EndedInvestment Dividends Capital ^ Gains Value Index*
---------------------- ---------- -------------- ------ -------
U. S.
Government
Portfolio
10/31/84 $10,000 $ 0 $ 0 $10,000 $10,000
10/31/85 10,000 831 0 10,831 10,323
10/31/86 10,000 1,594 0 11,594 10,475
10/31/87 10,000 2,340 0 12,340 10,950
10/31/88 10,000 3,221 0 13,221 11,415
10/31/89 10,000 4,426 0 14,426 11,928
10/31/90 10,000 5,609 0 15,609 12,678
10/31/91 10,000 6,609 0 16,609 13,048
08/31/92** 10,000 7,195 0 17,195 13,381
08/31/93 10,000 7,702 0 17,702 ^
13,751
08/31/94
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<PAGE>
Domestic Money Market Portfolio
10/31/84 $10,000 $ 0 $0 $10,000 $10,000
10/31/85 10,000 842 0 10,842 10,323
10/31/86 10,000 1,608 0 11,608 10,475
10/31/87 10,000 2,353 0 12,353 10,950
10/31/88 10,000 3,251 0 13,251 11,415
10/31/89 10,000 4,478 0 14,478 11,928
10/31/90 10,000 5,676 0 15,676 12,678
10/31/91 10,000 6,686 0 16,686 13,048
08/31/92** 10,000 7,260 0 17,260 13,381
08/31/93 10,000 7,766 0 17,766 ^
13,751
08/31/94
* From month-end closest to the initial investment date.
** The fiscal year-end of the Trust changed from October 31 to August 31
in July 1992.
EXPLANATORY NOTES: With an initial investment of $10,000 made on
October 31, 1984, the net amount invested in shares of each Portfolio was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends from October 31, 1984 through
August 31, ^ 1994 for U. S. Treasury Portfolio, U.S. Government Portfolio
and Domestic Money Market Portfolio (that is, their cash value at the time
they were reinvested) amounted to ^ $______, $______ and ^ $______,
respectively. If distributions had not been reinvested, the amount of
distributions earned from each Portfolio over time would have been
smaller, and the cash payments (dividends) for the period would have
amounted to ^ $_____, $_____ and ^ $_____ for U. S. Treasury Portfolio,
U.S. Government Portfolio and Domestic Money Market Portfolio,
respectively. The Portfolios did not distribute any capital gains during
these periods.
The Portfolios may compare their performance or the performance
of securities in which they may invest to averages published by IBC USA
(Publications), Inc. of Ashland, Massachusetts. These averages assume
reinvestment of distributions. The MONEY FUND AVERAGES)(REGISTERED
TRADEMARK)/Total Institutions-Only Average; Government - Only;
Institutions - Only; First Tier Institutions - Only; and Second Tier
Institutions - Only, which are reported in the MONEY FUND REPORT^, covers
over 172 taxable money market funds. When evaluating comparisons to money
market funds, investors should consider the relevant differences in
investment objectives and policies. Specifically, money market funds
invest in short-term, high-quality instruments and seek to maintain a
stable $1.00 share price.
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<PAGE>
A Portfolio's performance may be compared to the performance of
other mutual funds in general, or to the performance of particular types
of mutual funds. These comparisons may be expressed as mutual fund
rankings prepared by Lipper Analytical Services, Inc. (Lipper), an
independent service located in Summit, New Jersey which monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank the funds based
on yield. In addition to the mutual fund rankings, a Portfolio's
performance may be compared to mutual fund performance indices prepared by
Lipper. The Portfolios may compare their performance to the yields on
other money market securities or averages of other money market securities
as reported by the Federal Reserve Bulletin, by TeleRate, a financial
information network, or by Salomon Brothers Inc., a broker-dealer firm;
and on other fixed-income investments such as Certificates of Deposit
(CDs).
The principal value and interest rate of CDs and money market
securities are fixed at the time of purchase, whereas each Portfolio's
yield will fluctuate. Unlike some CDs and certain other money market
securities, money market mutual funds are not insured by the FDIC.
Investors should give consideration to the quality and maturity of the
portfolio securities of the respective investment companies when comparing
investment alternatives.
The Portfolios may reference the growth and variety of money
market mutual funds and the adviser's innovation and participation in the
industry.
Each Portfolio may reference and discuss its fund number,
Quotron(REGISTERED TRADEMARK) number, CUSIP number, and current portfolio
manager in advertising.
IBBOTSON. Ibbotson Associates of Chicago, Illinois (Ibbotson)
provides historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term corporate
bonds, intermediate-term government bonds, long-term government bonds,
Treasury bills, the U.S. rate of inflation (based on the ^ CPI), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets
in order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with the
security types in any capital market may or may not correspond directly to
those of the funds. Ibbotson calculates total returns in the same method
as the funds. The funds may also compare performance to that of other
compilations or indices that may be developed and made available in the
future.
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<PAGE>
MORNINGSTAR. From time to time, in reports and promotional
literature, a Portfolio's performance also may be compared to other mutual
funds tracked by financial or business publications and periodicals. For
example, a Portfolio may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds of the basis or risk-adjusted performance. In addition, a
Portfolio may quote financial or business publications and periodicals as
they relate to fund management, investment philosophy, and investment
techniques. Rankings that compare the performance of Fidelity funds to
one another in appropriate categories over specific periods of time may
also be quoted in advertising.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash
payments undesirable, redemption payments may be made in whole or in part
in securities or other property, valued for this purpose as they are
valued in computing a Portfolio's NAV. Shareholders receiving securities
or other property on redemption may realize a gain or loss for tax
purposes, and will incur any costs of sale, as well as the associated
inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each Portfolio is
required to give shareholders at least 60 days' notice prior to
terminating or modifying its exchange privilege. Under the Rule, the 60
day notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
exchange, or (ii) if the Portfolio temporarily suspends the redemption of
the shares to be exchanged as permitted under the 1940 Act or the rules
and regulations thereunder, or the fund to be acquired suspends the sale
of its shares because it is unable to invest amounts effectively in
accordance with its investment objective and policies.
The Portfolios have notified shareholders that they reserve the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, a Portfolio would be unable to
invest effectively in accordance with its investment objective and
policies or might otherwise be adversely affected.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Dividends from each Portfolio will not normally
qualify for the dividends-received deduction available to corporations,
since the Portfolios' income is primarily derived from interest income and
short-term capital gains. Depending upon state law, a portion of each
Portfolio's dividends attributable to interest income derived from U.S. ^
government securities may be exempt from state and local taxation. The
Portfolios will provide information on the portion of a Portfolio's
dividends, if any, that qualify for this exemption.
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<PAGE>
CAPITAL GAIN DISTRIBUTIONS. The Portfolios may distribute
short-term capital gains once a year or more often as necessary to
maintain their NAVs at $1.00 per share or to comply with distribution
requirements under federal tax law. The Portfolios do not anticipate
earning long-term capital gains on securities held by a Portfolio.
TAX STATUS OF FUND. Each Portfolio has qualified and intends to
qualify as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended (the Code), so that a Portfolio will not be
liable for federal income or excise taxes on net investment income or
capital gains to the extent that these are distributed to shareholders in
accordance with applicable provisions of the Code.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as
business trusts, state laws provide for a pass-through of the state and
local income tax exemption afforded to direct owners of U.S. government
securities. Some states limit this pass through to mutual funds that
invest a certain amount in U.S. government securities, and some types of
securities, such as repurchase agreements and some agency-backed
securities, but may not qualify for this pass-through benefit. The tax
treatment of your dividend distributions from U.S. Treasury Portfolio and
U.S. Government Portfolio will be the same as if you directly owned your
proportionate share of the U.S. government securities in each Portfolio's
portfolio. Because the income earned on most U.S. government securities
in which U.S. Treasury Portfolio and U.S. Government Portfolio invest is
exempt form state and local taxes, the portion of your dividends from the
Portfolios attributable to these securities will also be free from income
taxes. The exemption from state and local income taxation does not
preclude states from assessing other taxes on the ownership of U.S.
government securities.
FMR
FMR is a wholly owned subsidiary of FMR Corp., ^ the ultimate
parent company organized in 1972. All of the stock of FMR is owned by FMR
Corp. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson 3d, Johnson family,
members, and various trusts for the benefit of the Johnson family form a
controlling group with respect to FMR Corp. At present, the principal
operating activities of FMR Corp. are those conducted by three of its
divisions as follows: ^ Fidelity Service Co., (Service), which is the
transfer and shareholder servicing agent for certain of the funds advised
by FMR; ^ FIIOC, which performs shareholder servicing functions for
certain institutional customers; and Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within the
Fidelity organization.
Several affiliates of FMR also are engaged in the investment
advisory business. Fidelity Management Trust Company provides trustee,
investment advisory and administrative services to retirement plans and
corporate employee benefit accounts. Fidelity Management & Research
(U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Far East) Inc.
- 27 -
<PAGE>
(FMR Far East), both wholly owned subsidiaries of FMR formed in 1986,
supply investment research, and may supply portfolio management services,
to FMR in connection with certain funds advised by FMR. Analysts employed
by FMR, FMR U.K. and FMR Far East research and visit thousands of domestic
and foreign companies each year. FMR Texas, a wholly owned subsidiary of
FMR formed in 1989, supplies portfolio management and research services in
connection with certain money market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Trust are listed
below. Except as indicated, each individual has held the office shown or
other office in the same company for the last five years. All persons
named as Trustees and ^ officers also serve in similar capacities for
other funds advised by FMR. Unless otherwise noted, the business address
of each Trustee and officer is 82 Devonshire Street, Boston, MA 02109,
which is also the address of FMR. Those Trustees who are "interested
persons" (as defined in the ^ 1940 Act) by virtue of their affiliation
with either the Trust or FMR, are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; ^ Chairman and a Director
of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee ^ and Senior Vice President, is
President of FMR; and President and a Director of FMR Texas Inc. (1989),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee
(1991), is a consultant to Western Mining Corporation (1994). Prior to
February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production, 1990). ^ Until March 1990, Mr.
Cox was President and Chief Operating Officer of Union Pacific Resources
Company (exploration and production). He is a Director of ^ Sanifill
Corporation (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983- 1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, N.Y., Trustee
(1992). Prior to her retirement in September 1991, Mrs. Davis was the
Senior Vice President of Corporate Affairs of Avon Products, Inc. She is
currently a Director of BellSouth Corporation (telecommunications), Eaton
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<PAGE>
Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail
stores, 1990), and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she serves as a
Director of the New York City Chapter of the National Multiple Sclerosis
Society, and is a member of the Advisory Council of the International
Executive Service Corps. and the President's Advisory Council of The
University School of Vermont School of Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a
financial consultant. Prior to September 1986, Mr. Flynn was Vice
Chairman and a Director of the Norton Company (manufacturer of industrial
devices). He is currently a Director of Mechanics Bank and a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, ^ 3881-2 Lander Road, Chagrin Falls, OH,
Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman
and Chief Executive Officer of LTV Steel Company. Prior to May 1990, he
was Director of National City Corporation (a bank holding company) and
National City Bank of Cleveland. He is a Director of TRW Inc. (original
equipment and replacement products), Cleveland-Cliffs Inc. (mining), NACCO
Industries, Inc. (mining and marketing), Consolidated Rail Corporation,
Birmingham Steel Corporation^, Hyster-Yale Materials Handling, Inc.
(1989), and RPM, Inc. (manufacturer of chemical products, 1990). In
addition, he serves as a Trustee of First Union Real Estate Investments^,
Chairman of the Board of Trustees and a member of the Executive Committee
of the Cleveland Clinic Foundation, a Trustee and a member of the
Executive Committee of University School (Cleveland), and a Trustee of
Cleveland Clinic Florida.
DONALD J. KIRK, ^ 680 Steamboat Road, Apartment #1-North,
Greenwich, CT, Trustee, is a Professor at Columbia University Graduate
School of Business and a financial consultant. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance)^ and Valuation Research
Corp. (appraisals and valuations, 1993). In addition, he serves as Vice
Chairman of the Board of Directors of the National Arts Stabilization Fund
and the Vice Chairman of the Board of Trustees of the Greenwich Hospital
Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992).
Prior to his retirement on May 31, 1990, he was a Director of FMR (1989)
and Executive Vice President of FMR ^(a position he held until March 31,
1991); Vice President of Fidelity Magellan Fund and FMR Growth Group
Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice
President of Fidelity Investments Corporate Services, Inc. (1991-1992).
He is a Director of W.R. Grace & Co. (chemicals, 1989) and Morrison
Knudsen Corporation (engineering and construction^). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary,
Historic Deerfield (1989) and Society for the Preservation of New England
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<PAGE>
Antiquities, and as an Overseer of the Museum of Fine Arts of Boston
(1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee
^(1989), is Chairman of G.M. Management Group (strategic advisory
services). Prior to his retirement in July 1988, he was Chairman and
Chief Executive Officer of Leaseway Transportation Corp. (physical
distribution services). Mr. McDonough is a Director of ACME-Cleveland
Corp. (metal working, telecommunications and electronic products),
Brush-Wellman Inc. (metal refining), ^ York International Corp.
(air-conditioning and refrigeration, 1989) ^, Commercial Intertech Corp.
(water treatment equipment, 1992)^, and Associated Estates Realty
Corporation (a real estate investment trust, 1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #^ 2104, Naples, FL,
Trustee^. Prior to his retirement in 1985, Mr. Malone was Chairman,
General Electric Investment Corporation and a Vice President of General
Electric Company. He is a Director of Allegheny Power Systems, Inc.
(electric utility), General Re Corporation (reinsurance) and Mattel Inc.
(toy manufacturer). ^ In addition, he serves as a Trustee of Corporate
Property Investors, the EPS Foundation at Trinity College, the Naples
Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute,
and he is a member of the Advisory Boards of Butler Capital Corporation
Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993)
is Chairman of the Board, President, and Chief Executive Officer of
Lexmark International, Inc. (office machines, 1991). Prior to 1991, he
held the positions of Vice President of International Business Machines
Corporation ("IBM") and President and General Manager of various IBM
divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna Company
(chemicals, 1993) and Infomart (marketing services, 1991), a Trammell Crow
Co. In addition, he serves as a Campaign Vice Chairman of the Tri-State
United Way (1993) and is a member of the University of Alabama President's
Cabinet (1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E.,
Atlanta, GA, Trustee^, is President of The Wales Group, Inc. (management
and financial advisory services). Prior to retiring in 1987, Mr. Williams
served as Chairman of the Board of First Wachovia Corporation (bank
holding company), and Chairman and Chief Executive Officer of The First
National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company
(electric utility), Gerber Alley & Associates, Inc. (computer software^),
National Life Insurance Company of Vermont, American Software, Inc.
(1989), and AppleSouth, Inc. (restaurants, 1992).
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<PAGE>
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of
the Fidelity funds, Mr. French was Senior Vice President, Fund Accounting
- Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and Senior
Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General
Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and
Clerk of Distributors.
FRED L. HENNING, JR., Vice President (1994), is Vice President of
Fidelity's money market funds and Senior Vice President of FMR Texas, Inc.
THOMAS D. MAHER, Assistant Vice President (1990), is Assistant
Vice President of Fidelity's money market funds and Vice President and
Associate General Counsel of FMR Texas (1990). Prior to 1990, Mr. Maher
was an employee of FMR and Assistant Secretary of all the Fidelity funds
(1985-1989).
LELAND BARRON, Vice President (1989) ^ is Vice President of U.S.
Government Money Market Portfolio and U.S. Treasury Money Market Portfolio
and of other funds advised by FMR and is an employee of FMR Texas.
BURNELL STEHMAN, Vice President (1994) is Vice President of
Domestic Money Market Portfolio and of other funds advised by FMR and is
an employee of FMR Texas.
Under a retirement program that became effective on November 1,
1989, Trustees, upon reaching age 72, become eligible to participate in a
defined benefit retirement program under which they receive payments
during their lifetime from the Portfolios based on their basic trustee
fees and length of service. Currently, Messrs. Robert L. Johnson, William
R. Spaulding, Bertram H. Witham, and David L. Yunich participate in the
program.
The Trustees and officers of the Trust as a group, own less than
1% of each Portfolio's outstanding shares.
MANAGEMENT CONTRACTS
Each Portfolio employs FMR to furnish investment advisory and
other services ^. Under FMR's ^ management contract with each Portfolio,
FMR acts as investment adviser and, subject to the supervision of the
Board of Trustees, directs the investments of each Portfolio in accordance
with its investment objective, policies and limitations. FMR also
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<PAGE>
provides each Portfolio with all necessary office facilities, equipment
and personnel for servicing the Portfolios' investments and maintaining
their organization, and compensates all officers of the Trust, all
Trustees who are "interested persons" of the Trust or of FMR, and all the
personnel of the Trust performing services relating to research,
statistical and investment activities. In addition, FMR or its
affiliates, subject to the supervision of the Board of Trustees, provides
the management and administrative services necessary for the operation of
each Portfolio. These services include providing facilities for
maintaining each Portfolio's organization, supervising relations with the
custodians, transfer and pricing agents, accountants, underwriters and
other persons dealing with the Portfolios, preparing all general
shareholder communications and conducting shareholder relations,
maintaining the Trust's records and the registration of each Portfolio's
shares under federal and state securities laws, developing management and
shareholder services for each Portfolio and furnishing reports,
evaluations and analyses on a variety of subjects to the Trustees.
FMR pays all the expenses of the Trust as described herein.
Specific expenses payable by FMR include, without limitation, the fees and
expenses of registering and qualifying the Portfolios and their shares for
distribution under federal and state securities laws; expenses of
typesetting for printing prospectuses; custodian charges; auditing and
legal expenses; insurance expense; association membership dues; the
expense of reports to shareholders; shareholder meetings; and proxy
solicitations.
FIIOC ^ is transfer ^, dividend disbursing, and shareholder
servicing ^ agent for ^ the Portfolios. The costs of ^ these services are
borne by FMR pursuant to its ^ management contract with each Portfolio.
Service calculates each Portfolio's NAV and dividends, and maintains ^
each Portfolio's general accounting records. The costs of these services
are also borne by FMR pursuant to its management contract with each
Portfolio.^
FMR pays all other expenses of the ^ Portfolios with the
following exceptions: the payment of fees and expenses of all Trustees of
the Trust who are not "interested persons" of the Trust or FMR; brokerage
fees or commissions (if any); interest on borrowings; taxes; and such
extraordinary non-recurring expenses as may arise, including costs of
litigation to which the ^ Portfolios may be a party, and any obligation a
Portfolio may have to indemnify its officers and Trustees with respect to
litigation.
For these services and the payment by FMR of the Trust's expenses, each
Portfolio pays a monthly management fee to FMR at the annual rate of .42%
of the average net assets of the Portfolio throughout the month pursuant
to a Management Contract approved by the shareholders on October 30, 1986.
The management fees paid to FMR are reduced by an amount equal to the fees
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<PAGE>
and expenses of those Trustees who are not "interested persons" of the
Trust or FMR. See the table below for the fees received by FMR:
Management Fees For the Fiscal Years
Ended:
^
8/31/94 8/31/93 8/31/92*
------- ----------- ---------
U.S. Treasury $ $ 761,083 $705,658
Portfolio
U.S. Government $ $1,247,037 $1,316,958
Portfolio
Domestic Money $ $2,893,862 2,796,308
Market Portfolio
* On July 16, 1992, the Trustees of the Trust approved a change in the
fiscal year end of the Trust to August 31.
^ SUB-ADVISER. FMR has entered into a sub-advisory agreement
with FMR Texas pursuant to which FMR Texas has primary responsibility for
providing portfolio investment management services to each Portfolio.
Under the sub-advisory agreement, FMR pays FMR Texas fees equal to 50% of
the management fee payable to FMR under its ^ Management Contract with
each Portfolio. The fees paid to FMR Texas are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect from
time to time.
- 33 -
<PAGE>
Sub-advisory Fees Paid by FMR
To FMR Texas For the Fiscal Years
Ended:
8/31/94 8/31/93 ^ 8/31/92
------- ------- --------
U.S. Treasury $ $ 380,542 $ ^ 352,829
Portfolio
U.S. Government $ $ 623,519 $ ^ 658,479
Portfolio
Domestic Money $ $1,446,931 $1,398,154
Market ^ Portfolio
* On July 16, 1992, the Trustees of the Trust approved a
change in the fiscal year end of the Trust to August 31.
The Portfolios have a Distribution Agreement with Distributors, a
Massachusetts corporation organized on July 18, 1960. Distributors is a
broker-dealer registered under the Securities and Exchange Act of 1934 and
is a member of the National Association of Securities Dealers, Inc. The
Distribution Agreement calls for Distributors to use all reasonable
efforts, consistent with its other business, to secure purchasers for
shares of the Portfolios, which are continuously offered. Promotional and
administrative expenses in connection with the offer and sale of shares
are paid by FMR.
DISTRIBUTION AND SERVICE PLANS
Each Portfolio has adopted a Distribution and Service Plan (the
Plans) pursuant to Rule 12b-1 ^ under the 1940 Act (the Rule). The Rule
provides in substance that a mutual fund may not engage directly or
indirectly in financing any activity that is primarily intended to result
in the sale of shares of the ^ fund except pursuant to a plan adopted by
the ^ fund under the Rule. The Trust's Board of Trustees has adopted ^
the Plans to ^ allow each Portfolio and FMR ^ to incur certain expenses
that might be considered to constitute indirect payment by ^ the Portfolio
of distribution expenses. Under ^ each Plan, if the payment of management
fees by a Portfolio to FMR ^ is deemed ^ indirect financing by the
Portfolio of the distribution of its shares, such payment is authorized by
the Plan.
^ Each Plan specifically ^ recognizes that FMR, either directly
or through Distributors, may use its management fee revenue, past profits,
or other resources, without limitation, to pay promotional and
administrative expenses in connection with the offer and sale of shares of
^ a Portfolio. In addition, ^ each Plan provides that FMR may use its
resources, including its management fee revenues, to make payments to
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<PAGE>
third parties that provide assistance in selling shares of the ^
Portfolio, or to third parties, including banks, that render shareholder
support services. The Board of Trustees has authorized such payments.
As required by the Rule, the Trustees carefully considered all
pertinent factors relating to the implementation of ^ each Plan prior to ^
its approval, and have determined that there is a reasonable likelihood
that the ^ Plan will benefit the ^ Portfolio and ^ its shareholders. In
particular, the Trustees noted that none of the Plans ^ authorizes
payments by the Portfolios other than those made to FMR under ^ its
management contract with such Portfolio. To the extent that ^ each Plan
gives FMR and Distributors greater flexibility in connection with the
distribution of shares of the ^ applicable Portfolio, additional sales of
each Portfolio's shares may result. Additionally, certain shareholder
support services may be provided more effectively under ^ each Plan by
local entities with whom shareholders have other relationships. Each Plan
was approved by Fidelity Money Market Trust on September 21, 1994, as the
then sole shareholder of each Portfolio, pursuant to an Agreement and Plan
of Conversion approved by public shareholders of the Portfolios on
September 21, 1994 ^.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of
this prohibition under the Glass-Steagall Act has not been clearly defined
^ by the courts or appropriate regulatory agencies, Distributors believes
that the Glass Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping functions.
Distributors intends to engage banks only ^ to perform such functions.
However, changes in federal or state statutes and regulations pertaining
to the permissible activities of banks and their affiliates or
subsidiaries, as well as further judicial or administrative decisions or
interpretations, could prevent a bank from continuing to perform all or a
part of the contemplated services. If a bank were prohibited from so
acting, the Trustees would consider what actions, if any, would be
necessary to continue to provide efficient and effective shareholder
services. In such event, changes in the operation of the Portfolios might
occur, including possible termination of any automatic investment or
redemption or other services then ^ provided by the bank. It is not
expected that shareholders would suffer any adverse financial consequences
as a result of any of these occurrences. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein, and banks and financial institutions may be required to
register as dealers pursuant to state law.
^ Each Portfolio may execute portfolio transactions with and
purchase securities issued by depository institutions that receive
payments under ^ its Plan. No preference for the instruments of such
depository institutions will be shown in the selection of investments ^.
- 35 -
<PAGE>
DESCRIPTION OF THE TRUST
U.S. Treasury Portfolio, U.S. Government Portfolio and Domestic
Money Market Portfolio ^ are portfolios of Fidelity Money Market Trust, an
open-end management investment company originally organized as a
Massachusetts business trust by Declaration of Trust dated August 21, 1978
^ and amended and restated ^ November 1, 1989. On October 18, 1994 the
Trust was converted to a Delaware business trust pursuant to an agreement
approved by shareholders on September 21, 1994. The Delaware trust, which
was organized on June 20, 1991, under the name of Fidelity Money Market
Trust I, succeeded to the name Fidelity Money Market Trust on October 18,
1994. Currently, there are five portfolios of the Trust: U.S. Treasury
Portfolio, U.S. Government Portfolio, Domestic Money Market Portfolio,
Retirement Money Market Portfolio, and Retirement Government Money Market
Portfolio.
The Trust Instrument permits the Trustees to create additional series.
In the event that FMR ceases to be the investment adviser to the
Trust or a Portfolio, the right of the Trust or ^ portfolio to use the
identifying name "Fidelity" may be withdrawn. There is a remote
possibility that one Portfolio might become liable for any misstatement in
its prospectus or statement of additional information about another
Portfolio.
The assets of the Trust, received for the issue or sale of shares
of each ^ portfolio and all income, earnings, profits, and proceeds
thereof, subject only to the rights of creditors, are especially allocated
to such ^ portfolio, and constitute the underlying assets of such ^
portfolio. The underlying assets of each ^ portfolio are segregated on
the books of account, and are to be charged with the liabilities with
respect to such ^ portfolio and with a share of the general expenses of
the Trust. Expenses with respect to the Trust are to be allocated in
proportion to the asset value of the respective ^ portfolios, except where
allocations of direct expense can otherwise be fairly made. The officers
of the Trust, subject to the general supervision of the Board of Trustees,
have the power to determine which expenses are allocable to a given ^
portfolio, or which are general or allocable to all of the ^ portfolios.
In the event of the dissolution or liquidation of the Trust, shareholders
of each ^ portfolio are entitled to receive as a class the underlying
assets of such ^ portfolio available for distribution.
^
SHAREHOLDER AND TRUSTEE LIABILITY. The Trust is ^ a business
trust organized under Delaware law. Delaware law provides that
shareholders shall be entitled to the same limitations of personal
liability extended to stockholders of private corporations for profit.
The courts of some states, however, may decline to apply Delaware law on
this point. The Trust Instrument contains an express disclaimer of
shareholder liability for the debts, liabilities, obligations, and
- 36 -
<PAGE>
expenses of the Trust and requires that a disclaimer be given in each
contract entered into or executed by the Trust or the Trustees ^ . The
Trust Instrument provides for indemnification out of each ^ portfolio's
property of any ^ shareholder or former shareholder held personally liable
for the obligations of the ^ portfolio. The Trust Instrument also
provides that each ^ portfolio shall, upon request, assume the defense of
any claim made against any shareholder for any act or obligation of the ^
portfolio and satisfy any judgment thereon. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which ^ Delaware law does not apply, no
contractual limitation of liability was in effect, and a portfolio is
unable to meet its obligations. FMR believes that, in view of the above,
the risk of personal liability to shareholders is remote.
The ^ Trust Instrument further provides that the Trustees, if
they have exercised reasonable care, will not be liable ^ to any person
other than the Trust or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever provided that the Trustees are not
protected against any liability to which ^ they would otherwise would be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of ^ their
office.
VOTING RIGHTS. Each ^ portfolio's capital consists of shares of
beneficial interest. As a shareholder, you receive one vote for each
dollar of net asset value you own. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the Prospectus.
Shares are fully paid and nonassessable, except as set forth under the
heading " Shareholder and Trustee Liability" above. Shareholders
representing 10% or more of the Trust or a ^ portfolio may, as set forth
in the ^ Trust Instrument, call meetings of the Trust or a ^ portfolio for
any purpose related to the Trust or ^ portfolio, as the case may be,
including, in the case of a meeting of the entire Trust, the purpose of
voting on removal of one or more Trustees. The Trust or any ^ portfolio
may be terminated upon the sale of its assets to, or merger with, another
open-end management investment company, or upon liquidation and
distribution of its assets^. Generally such terminations must be approved
by vote of the holders of a majority of the ^ Trust or the portfolio, as
determined by the current value of each shareholder's investment in the
portfolio or Trust; however, the Trustees may, without prior shareholder
approval, change the form of organization of the Trust by merger,
consolidation, or incorporation. If not so terminated or reorganized, the
Trust and ^ each portfolio will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the Trust to merge or consolidate into one or more Trusts,
partnerships, or corporations, or cause the Trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the Trust's registration
- 37 -
<PAGE>
statement. Each Portfolio may invest all of its assets in another
investment company.
As of September __, 1994 the following owned of record or
beneficially 5% or more of outstanding shares: [to be added]
CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, NY, is custodian of the assets of the ^ Portfolios.
The custodian is responsible for the safekeeping of the ^ Portfolios'
assets and the appointment of subcustodian banks and clearing agencies.
The custodian takes no part in determining the investment policies of the
^ Portfolios or in deciding which securities are purchased or sold by the
^ Portfolios. The Portfolios may, however, invest in obligations of the
custodian and may purchase securities from or sell securities to the
custodian.
FMR, its officers and directors, its affiliated companies, and
the Trust's Trustees may from time to time have transactions with various
banks, including banks serving as custodians for certain of the funds
advised by FMR. Transactions that have occurred to date include mortgages
and personal and general business loans. In the judgment of FMR, the
terms and conditions of those transactions were not influenced by existing
or potential custodial or other Trust relationships.
AUDITOR. ^___________________, serves as the Trust's independent
accountant. The auditor examines financial statements for the ^
Portfolios and provides other audit, tax and related services.
FINANCIAL STATEMENTS
Each Portfolio's ^ financial statements and financial highlights
for the fiscal year ended August 31, ^ 1994 are included in the
Portfolios' Annual Report, which is a separate report ^ attached to the
Prospectus. Each Portfolio's financial statements and financial
highlights are incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for
the Portfolios. The Portfolios may, however, consider the ratings for
other types of investments and the ratings assigned by other rating
organizations when determining the eligibility of a particular investment.
Description of Moody's Investors Service, Inc.'s Commercial Paper Ratings:
-------------------------------------------------------------------------
Issues rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics:
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<PAGE>
^ o Leading market positions in well established industries.
^ o High rates of return on funds employed.
^ o Conservative capitalization structures with moderate reliance on
debt and ample asset protection.
^ o Broad margins in earnings coverage of fixed financial charges
with high internal cash generation.
^ o Well-established access to a range of financial markets and
assured sources of alternate liquidity.
Issues rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Description of Standard & Poor's Corporation's Commercial Paper Ratings:
-----------------------------------------------------------------------
A --Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1 and 2 to indicate the relative degree of
safety.
A-1--This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus
(+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for
issues designated A-1.
Description of Moody's Investors Service, Inc.'s Corporate Bond Ratings:
-----------------------------------------------------------------------
Aaa- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issuers.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
- 39 -
<PAGE>
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long term risks appear
somewhat larger than in Aaa securities.
Description of Standard & Poor's Corporation's Corporate Bond Ratings:
---------------------------------------------------------------------
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA--Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt issues only in small
degree.
- 40 -
<PAGE>
FIDELITY MONEY MARKET TRUST:
RETIREMENT MONEY MARKET PORTFOLIO
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Summary of Portfolio Expenses
3 a, b Financial Highlights
c Performance
4 a(i) The Trust and the Fidelity
Organization
a(ii), b, c Investment Objective and Policies;
Investment Limitations; Suitability
5 a The Trust and the Fidelity
Organization
b, c, d, e The Trust and the Fidelity
Organization; Management Contract,
Distribution and Service Plan; How to
Invest, Exchange and Redeem
f Portfolio Transactions
5A a, b, c *
6 a(i) The Trust and the Fidelity
Organization
a(ii) How to Invest, Exchange and Redeem
a(iii), b, c, d *
e Cover Page; How to Invest, Exchange
and Redeem
f, g How to Invest, Exchange and Redeem;
Distribution and Taxes
DC-161195.2
<PAGE>
7 a Management Contracts, Distribution and
Service Plan
b(i, ii) How to Invest, Exchange and Redeem
b(iii, iv *
b(v) How to Invest, Exchange and Redeem
c *
d How to Invest, Exchange and Redeem
e, f (i, ii) Management Contracts, Distribution and
Service Plan
f (iii) *
8 a, b, c, d How to Invest, Exchange and Redeem
9 *
* Not Applicable
- 2 -
<PAGE>
Form N-1A Item Number
Part B Statement of Additional Information
10,11 Cover Page
12 Description of the Trust
13 a,b,c Investment Policies and Limitations
d *
14 a,b Trustees and Officers
c *
15 a, b Description of the Trust
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii), b Management Contract; Distribution and
Service Plan
c, d, e *
f Distribution and Service Plan
g *
h Description of the Trust
i Management Contract
17 a Portfolio Transactions
b *
c Portfolio Transactions
d, e *
18 a Description of the Trust
b *
- 3 -
<PAGE>
19 a Additional Purchase and Redemption
Information
b Valuation of Portfolio Securities
c *
20 Taxes
21 a(i,ii) Management Contract; Distribution and
Service Plan
a(iii),b,c *
22 Performance
23 Financial Statements for the
Portfolio's fiscal year ended August
31, 1994 will be filed by subsequent
amendment.
* Not Applicable
- 4 -
<PAGE>
FIDELITY MONEY MARKET TRUST
Retirement Money Market Portfolio
PROSPECTUS
^ December 22, 1994
Retirement Money Market Portfolio (the Portfolio) is a diversified
portfolio of Fidelity Money Market Trust (the Trust). The Portfolio seeks
to obtain as high a level of current income as is consistent with the
preservation of capital and liquidity by investing in high quality money
market instruments.
AN INVESTMENT IN THE PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE PORTFOLIO WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF^, OR
GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
The Portfolio is generally intended for investors in tax-saving retirement
plans. This Prospectus is designed to provide you with information before
investing and to help you decide if the Portfolio's goals match your own.
Please read and retain this document for future reference. The Annual
Report is ^ attached hereto.
^ To learn more about the Portfolio and its investments, you can obtain a
copy of the Portfolio's most recent financial report and portfolio
listing, or a copy of the Statement of Additional Information ^(SAI) dated
December 22, 1994. The SAI has been filed with the Securities and
Exchange Commission (SEC) and is incorporated herein by reference. ^ For
a free copy of either document, call the appropriate number below.
^
Retirement Plan Accounts - Nationwide (toll free) 800-544-0276
Financial and Other Institutions - Nationwide (toll free) 800- 843-3001
If you are investing through a retirement plan sponsor or other
institution, refer to your plan materials or contact ^ the institution
directly.
DC-151357.3
prospectus
<PAGE>
TABLE OF CONTENTS
Summary of Portfolio Expenses . . . . . . . . . . . . . . . . . . . . . .
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
How to Invest, Exchange and Redeem . . . . . . . . . . . . . . . . . . .
Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . .
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Contract, Distribution and Service Plan . . . . . . . . . . .
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
2 prospectus
<PAGE>
SUMMARY OF PORTFOLIO EXPENSES
The purpose of the table below is to assist investors in
understanding the various costs and expenses that an investor in the
Portfolio would bear directly or indirectly. This standard format was
developed for use by all mutual funds to help investors make their
investment decisions. This expense information should be considered along
with other important information, such as the Portfolio's investment
objective and past performance. There are no transaction expenses
associated with purchases or sales of the Portfolio's shares.
^ A. Annual Operating Expenses
(as a percentage of average net assets)
Management Fees ^__%
Other Expenses .00
Total Operating Expenses ^__%
B. Example: You would pay the following expenses on a $1,000
investment, assuming (1) a 5% annual return and (2) redemption at
the end of each time period:
1 Year 3 Years 5 Years 10 Years
----- ------- ------- --------
^
EXPLANATION OF TABLE
A. ANNUAL OPERATING EXPENSES. Annual operating expenses are based on
the Portfolio's expenses for the last fiscal year. Management ^ fees are
paid by the Portfolio to Fidelity Management & Research Company (FMR) for
managing its investments and business affairs. FMR is responsible for the
payment of all of the expenses of the Portfolio with the exception of
certain limited expenses. Management fees and other expenses already have
been reflected in the Portfolio's share price and dividends and are not
charged directly to individual shareholder accounts. Please refer to the
section "Management Contract, Distribution and Service Plan" on page 17
for further information.
B. EXAMPLE OF EXPENSES. The hypothetical example illustrates the
expenses associated with a $1,000 investment over periods of 1, 3, 5 and
10 years, based on the expenses in the table and an assumed annual rate
of return of 5%. ^ THE RETURN OF 5% AND EXPENSES SHOULD NOT BE CONSIDERED
INDICATIONS OF ACTUAL OR EXPECTED PORTFOLIO PERFORMANCE OR EXPENSES, BOTH
OF WHICH MAY VARY.
3 prospectus
<PAGE>
FINANCIAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS. The table that follows is included in the
Portfolio's Annual Report and has been audited by ____________,
independent accountants. Their report on the financial statements and
financial highlights is included on page __. The financial statements and
financial highlights are part of this prospectus.
[Financial Highlights to be filed by subsequent amendment.] ^
4 prospectus
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
Retirement Money Market Portfolio's investment objective is to
obtain as high a level of current income as is consistent with the
preservation of capital and liquidity by investing in money market
instruments. FMR will buy obligations for the Portfolio consistent with
its investment objective, and which meet the quality and maturity
standards established for the Portfolio. The Portfolio's investment
objective is fundamental and may not be changed without the affirmative
vote of a majority of the outstanding shares of the Portfolio. No
assurance can be made that the Portfolio will achieve its objective, but
it will follow the investment style described in the following paragraphs.
The Portfolio invests in high quality, U.S. dollar- denominated
money market instruments of U.S. and foreign issuers which present minimal
credit risk, including:
o Obligations of governments and their agencies or
instrumentalities.
o Obligations of the financial services industry, including banks,
savings and loan institutions, insurance companies and mortgage
bankers. These obligations include certificates of deposit,
bankers' acceptances and time deposits.
o Short-term corporate obligations, including commercial paper,
notes and bonds.
o Other short-term money market obligations.
The Portfolio may engage in repurchase agreements with respect to
such obligations. The Portfolio also may invest in restricted securities
and may engage in reverse repurchase agreements and in short sales against
the box. Please refer to the Appendix for ^ more information on the
Portfolio's investments.
QUALITY. Pursuant to procedures adopted by the Board of Trustees,
the Portfolio may purchase only high quality securities that FMR believes
present minimal credit risks. To be considered high quality, a security
must be a U.S. government security; rated in accordance with applicable
rules in one of the two highest rating categories for short-term
securities by at least two nationally recognized statistical rating
services (NRSROs) (or by one, if only one rating service has rated the
security); or, if unrated, judged to be of equivalent quality by FMR.
High quality securities are divided into "first tier" and "
second tier" securities. FIRST TIER SECURITIES have received the highest
rating (e.g., Standard & Poor's A-1 rating) from at least two rating
services (or one, if only one has rated the security). ^ SECOND TIER
SECURITIES have received ratings within the two highest categories (e.g.,
5 prospectus
<PAGE>
Standard & Poor's A-1 or A-2) from at least two rating services (or one,
if only one has rated the security), but do not qualify as first tier
securities. If a security has been assigned different ratings by different
rating services, at least two rating services must have assigned the
higher rating in order for FMR to determine eligibility on the basis of
that higher rating. Based on procedures adopted by the Board of Trustees,
FMR may determine that an unrated security is of equivalent quality to a
rated first or second tier security.
MATURITY. The Portfolio must limit its investments to securities
with remaining effective maturities of 397 days or less and must maintain
a dollar-weighted average maturity of 90 days or less.
DIVERSIFICATION. The Portfolio may not invest more than 5% of its
total assets in second tier securities. In addition, the Portfolio may not
invest more than 1% of its total assets or $1 million (whichever is
greater) in the second tier securities of a single issuer.
^
The Portfolio may invest in obligations of U.S. banks, foreign branches of
U.S. banks (Eurodollars), U.S. branches and agencies of foreign banks
(Yankee dollars), and foreign branches of foreign banks. Euro and Yankee
dollar investments involve risks that are different from investments in
securities of U.S. banks. These risks may include future unfavorable
political and economic developments, withholding taxes, seizures of
foreign deposits, currency controls, interest limitations or other
governmental restrictions that might affect payment of principal or
interest. Additionally, there may be less public information available
about foreign banks and their branches. Foreign branches of foreign banks
are not regulated by U.S. banking authorities, and generally are not bound
by accounting, auditing and financial reporting standards comparable to
U.S. banks. Although FMR carefully considers these factors when making
investments, the Portfolio does not limit the amount of its assets which
can be invested in any one type of instrument or in any one foreign
country.
INVESTMENT LIMITATIONS. The following summarizes the Portfolio's
principal investment limitations. A complete listing is contained in the ^
SAI.
1. ^(a) With respect to 75% of its total assets, the Portfolio
may not invest more than 5% of its total assets in the securities of a
single issuer (other than U.S. government securities) ^. (b) Under certain
conditions, however, the Portfolio may invest ^ up to 25% of its total
assets in the first tier securities of a single issuer for up to three
days^;
6 prospectus
<PAGE>
2. The Portfolio ^ may not purchase the securities of any issuer
(other than U.S. government securities) if, as a result, more than 25% of
its total assets would be invested in the securities of issuers whose
principal business activities are in the same industry, except that the
Portfolio intends to invest more than 25% of its total assets in
obligations of institutions in the financial services industry.
3. The Portfolio (a) may borrow money for temporary or emergency
purposes ^ and (b) engage in reverse repurchase agreements ^ for any
purpose, provided that (a) and (b) in combination do not exceed 33 1/3% of
its total assets, ^(c) may borrow money from banks, from other funds
advised by FMR or an affiliate or by engaging in reverse repurchase
agreements and ^ (d) may not purchase securities when borrowings (other
than reverse repurchase agreements) exceed 5% of its total assets.
4. The Portfolio (a) may make loans to other parties, but not in
excess of 33 1/3% of its total assets, (b) may engage in repurchase
agreements, and (c) may lend money (up to 10% of its net assets) to other
funds or portfolios for which FMR or an affiliate serves as adviser.
Except for the Portfolio's investment objective, ^ investment
limitations 2, 3(a), 3(b), and 4(a), the investment policies described in
this Prospectus are not fundamental and may be changed without shareholder
approval. Except for the percentage limitation in 3(a) these investment
limitations and policies are considered at the time of purchase; the sale
of securities is not required in the event of a subsequent change in
circumstances.
Because the Portfolio concentrates more than 25% of its total assets in
the financial services industry, its performance may be affected by
conditions affecting banks and other financial services companies.
Companies in the financial services industry are subject to various risks
related to that industry, such as governmental regulations, changes in
interest rates, and exposure on loans, including loans to foreign
borrowers. Investments in the financial services industry may include
obligations of foreign and domestic banks, savings and loan associations,
consumer and industrial finance companies, securities brokerage companies,
leasing companies, and a variety of firms in the insurance field.^
SUITABILITY
The Portfolio's ability to achieve its investment objective
depends on the quality and maturity of its investments. Although the
Portfolio's policies are designed to help maintain a stable $1.00 share
price, all money market instruments can change in value when interest
rates or issuers' creditworthiness change, or if an issuer or guarantor of
a security fails to pay interest or principal when due. If these changes
in value were large enough, the Portfolio's share price could fall below
7 prospectus
<PAGE>
$1.00. In general, securities with longer maturities are more vulnerable
to price changes, although they may provide higher yields.
If you seek income at current money market rates while remaining
conveniently liquid, the Portfolio may be appropriate for you. It has the
flexibility to invest in corporate and bank instruments. The Portfolio
generally is designed for investors in tax-saving retirement plans such as
Defined Contribution Plans, 403(b) Custodial Accounts, Defined Benefit
Plans and 457 Plans. Minimum investments for these plans may differ from
those listed on page .
By itself, the Portfolio does not constitute a balanced investment plan;
its objective stresses income with preservation of capital and liquidity,
and not the higher yields or capital appreciation that may be available
from more aggressive investments.
HOW TO INVEST, EXCHANGE AND REDEEM
Shares of the Portfolio are offered continuously and may be
purchased at the next determined net asset value per share (NAV), after an
order is received and accepted. The Portfolio's shares are sold without a
sales charge. The NAV of the Portfolio is determined by adding the value
of all securities and other assets of the Portfolio, deducting its actual
and accrued liabilities, and dividing by the number of shares outstanding.
The Portfolio values its securities on the basis of amortized cost.
Fidelity Service Co. (Service), calculates the NAV at the close of the
Portfolio's business day, which coincides with the close of business of
the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern Time (4
p.m.). (See the holiday schedule on page .) You begin to earn dividends as
of the first business day following the day of your purchase.
MINIMUM INVESTMENT AND ACCOUNT BALANCE. The minimum initial
investment to establish a new account in the Portfolio is $100,000.
Subsequent investments may be in any amount. If you want to keep your
account open, please leave $100,000 in it. If your account balance falls
below $100,000 due to redemption, your account may be closed and the
proceeds mailed to you at the record address. You will be given 30 days'
notice that your account will be closed unless you make an additional
investment to increase your account balance to the $100,000 minimum. The
minimum investment requirements may differ or may not apply to
participants of tax-saving retirement plans.
If you are purchasing shares of the Portfolio through a program
of services offered by a securities dealer, financial or other
institution, you should read the program materials in conjunction with
this Prospectus. Certain features of the Portfolio ^ may be modified in
these programs and administrative charges may be imposed for the services
rendered.
8 prospectus
<PAGE>
If you invest in this Portfolio through an employer- sponsored
retirement plan, some of the instructions, shareholder services and phone
numbers that follow will not apply. Speak to ^ your institutional
representative for additional information.
HOW TO INVEST. An initial investment in the Portfolio must be
preceded or accompanied by a completed, signed application.^ Additional
paperwork may be required from corporations, associations and certain
fiduciaries.
TO INVEST BY MAIL. You must send a check payable to Fidelity
Money Market Trust: Retirement Money Market Portfolio, together with a
completed application, to:
Fidelity Money Market Trust:
Retirement Money Market Portfolio
c/o Fidelity Institutional Retirement Services Company
P.O. Box 650488
Dallas, TX 75265-0488
All of your purchases must be made in U.S. dollars, and checks
must be drawn on U.S. banks. No cash will be accepted. If you make a
purchase with more than one check, each check must have a value of at
least $50, and the minimum investment requirement still applies. The
Portfolio reserves the right to limit the number of checks processed at
one time. If your check does not clear, your purchase will be ^ canceled
and you could be held liable for any losses and/or fees incurred.
TO INVEST BY WIRE. You may purchase shares of the Portfolio by
wire. The Portfolio requires notification of all wire purchases. Prior to
making an initial investment, investors must call the institution through
which they trade or:
o RETIREMENT PLAN ACCOUNTS: call Retirement Trading at 1-
800-962-1375 for wire information and instructions, by the close
of the Portfolio's business day (4 p.m.) to advise them of the
wire and to place the trade.
o FINANCIAL AND OTHER INSTITUTIONS: call Client Services at
1-800-843-3001 for wire information and instructions by the close
of the Portfolio's business day (4 p.m.) to advise them of the
wire and to place the trade.
In addition to the Portfolio's holiday schedule (see page ^ 15),
shares cannot be purchased by wire on Dr. Martin Luther King, Jr. Day
(observed), Columbus Day (observed), Veterans' Day (observed) or during
any unscheduled closings of the Federal Reserve Wire System.
Investments made by wire receive the NAV next determined as of
the day the order is received if federal funds, or monies immediately
convertible to federal funds, are received by the following business day
prior to the close of the NYSE (normally 4 p.m.). Investors are entitled
9 prospectus
<PAGE>
to the income dividend declared on the day the investor's federal funds
are accepted by the Portfolio's custodian wire bank. It is recommended
that investors wire funds early in the day to ensure proper credit.
HOW TO EXCHANGE. An exchange is a convenient way to buy shares of
the Portfolio or other Fidelity funds. The Fidelity family of funds has a
variety of investment objectives. You may exchange shares of this
Portfolio for shares of other Fidelity funds (subject to the minimum
initial investment requirement) that are registered in your state. When
making an exchange, the name, address and tax identification numbers of
the two accounts must be identical. Investors must consult the prospectus
of the fund to be acquired to determine eligibility and suitability. To
protect the Portfolio's performance and shareholders, Fidelity discourages
frequent trading in response to short-term market fluctuations. In
particular, exchanges that coincide with "market timing" strategies can
have adverse effects on the funds.
You may exchange all or any part of the value of your accounts on
any business day. There is currently no limit on exchanges out of the
Portfolio^; however, exchange limits may apply to other funds. Exchanges
may be requested in writing or by telephone and are effected at the NAV
next determined after receipt of the exchange request. If you exchange
into a fund with a sales charge, you pay the percentage difference between
that fund's sales charge and any sales charge you already have paid in
connection with the shares you are exchanging. This may not apply if you
are investing through a tax-saving retirement plan.
Each exchange actually represents the sale of shares of one fund
and the purchase of shares in another, which may produce a gain or loss
for tax purposes. A confirmation of each exchange transaction will be sent
to you. In order to allow FMR to manage the Portfolio most effectively,
you are strongly urged to initiate exchanges of shares as early in the day
as possible.
TO EXCHANGE BY TELEPHONE. Exchanges may be requested by calling:
Retirement Plan Accounts 800-962-1375
Financial and Other Institutions 800-843-3001
TO EXCHANGE BY MAIL. Written requests for exchanges should
contain the Portfolio name, account number and number of shares to be
redeemed, and the ^ name of the fund whose shares ^ are being purchased.
The request must be signed by a person authorized to act on behalf of the
account. Letters should be sent to:
Fidelity Money Market Trust:
Retirement Money Market Portfolio
c/o Fidelity Institutional Retirement Services Company
P.O. Box 650488
Dallas, TX 75265-0488
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<PAGE>
The Portfolio reserves the right at any time without prior notice
to refuse exchange purchases by any person or group if, in FMR's judgment,
the Portfolio would be unable to invest effectively in accordance with its
investment objective and policies or would otherwise potentially be
adversely affected. The Portfolio may terminate or modify the exchange
privilege in the future.
HOW TO REDEEM. You may redeem all or a portion of your shares on
any business day. Your shares will be redeemed at the next determined NAV
calculated after the Portfolio has received and accepted your redemption
request. When you redeem shares, the Portfolio normally will send you the
proceeds on the next business day. Shares will earn dividends through the
date of redemption; however, shares redeemed on a Friday or prior to a
holiday will continue to earn dividends until the next business day. The
Portfolio may hold payment on redemptions until it is reasonably satisfied
that investments made by check have been collected (which could take up to
seven days).
TO REDEEM BY WIRE. The wiring of redemption proceeds is available
only to investors who have previously established a wire account. In
addition to the Portfolio's holiday schedule (see page ^_), shares cannot
be redeemed by wire on Dr. Martin Luther King, Jr. Day (observed),
Columbus Day (observed), Veterans' Day (observed) or during any
unscheduled closings of the Federal Reserve Wire System. Shares redeemed
will not receive the dividend declared on the day of redemption.
TO REDEEM BY MAIL. Send a letter of instruction with your
signature(s) guaranteed to the address given above. The letter should
specify the name of the Portfolio, the number of shares to be redeemed,
your name, your account number, and should include the additional
requirements listed below that apply to your particular account.
11 prospectus
<PAGE>
Type of Registration Requirements
Individual, Joint Tenants, Letter of instruction signed by all
Sole Proprietorship, person(s) required to sign for the
Custodial (Uniform Gifts or account exactly as it is registered,
Transfers to Minors Act), accompanied by signature
General Partners guarantee(s).
Corporations, Associations Letter of instruction and a corporate
resolution, signed by all person(s)
required to sign for the account
exactly as it is registered
accompanied by signature
guarantee(s).
Trusts A letter of instruction signed by the
Trustee(s) with a signature
guarantee. (If the Trustee's name is
not registered on your account, also
provide a copy of the trust document,
certified within the last 60 days.)
If you do not fall into any of these registration categories,
(e.g., Executors, Administrators, Conservators, Guardians) please call
Client Administration for further instructions.
A signature guarantee is a widely accepted way to protect you and
Fidelity Investments Institutional Operations Company (FIIOC) by verifying
the signature on your redemption request; it may not be provided by a
notary public. Signature guarantees will be accepted from banks, brokers,
dealers, municipal securities dealers, municipal securities brokers,
government securities dealers, government securities brokers, credit
unions (if authorized under state law), national securities exchanges,
registered securities associations, clearing agencies and savings
associations.
TO REDEEM BY TELEPHONE. You may redeem shares of the Portfolio by
instructing FIIOC to have the proceeds of redemptions wired directly to
your designated bank account(s). To redeem by telephone call FIIOC before
4 p.m.:
Retirement Plan Accounts 800-962-1375
Financial and Other Institutions 800-843-3001
Provided that your account registration has not changed within
the last 60 days, you may redeem shares of the Portfolio worth $25,000 or
less by calling Institutional Trading. Redemption proceeds will be sent to
the record address.
If making immediate payment could adversely affect the Portfolio,
it may take up to seven (7) days to pay you. Also, when the NYSE is closed
12 prospectus
<PAGE>
(or when trading is restricted) for any reason other than its customary
weekend or holiday closings, or under any emergency circumstances as
determined by the SEC to merit such action, the Portfolio may suspend
redemption or postpone payment dates. If you are unable to execute your
transaction by telephone (for example, during times of unusual market
activity) consider placing your order by mail.
In order to allow FMR to manage the Portfolio most effectively,
investors are strongly urged to initiate redemptions of shares as early in
the day as possible and to notify the Portfolio at least one day in
advance of large redemptions.
ADDITIONAL INFORMATION. You may initiate many transactions by
telephone. Note that Fidelity will not be responsible for losses resulting
from unauthorized transactions if it follows reasonable procedures
designed to verify the identity of the caller. Fidelity will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of your confirmation statements
immediately after you receive them. If you do not want the ability to
redeem or exchange by telephone, call Fidelity for instructions.
The Portfolio reserves the right to suspend the offering of
shares for a period of time. The Portfolio also reserves the right to
reject any specific purchase order, including certain purchases by
exchange (see "^ How to Exchange" ^ on page ^ 10). Purchase orders may be
refused if, in FMR's opinion, they are of a size that would disrupt
management of the Portfolio.
SHAREHOLDER SERVICES
TAX-SAVING RETIREMENT PLANS. Fidelity can set up your new account
in the Portfolio under one of several tax-sheltered plans. These plans let
you save for retirement and shelter your investment income from current
taxes. Minimums may differ from those listed on page 9 and the
corresponding information may not apply. Retirement plan participants
should refer to their retirement plan's guidelines for further
information.
o DEFINED CONTRIBUTION PLANS such as 401(k), company
sponsored IRA programs, Thrift, Keogh or Corporate
Profit-Sharing or Money-Purchase Plans: open to self-
employed people and their partners or to corporations, to
benefit themselves and their employees.
o 403(B) CUSTODIAL ACCOUNTS: open to employees of most
non-profit organizations.
o DEFINED BENEFIT PLANS: open to corporations of all sizes
to benefit their employees.
o 457 PLANS: open to employees of most government agencies.
13 prospectus
<PAGE>
CHOOSING A DISTRIBUTION OPTION
When you fill out the application for your account, you can
choose from two distribution options:
A. The SHARE OPTION reinvests your distributions in
additional shares. You are assigned this option automatically if you make
no choice on your application.
B. The INCOME-EARNED OPTION distributes all dividends in
cash to you.
Participants in the above mentioned tax-saving retirement plans can elect
to take their distributions in kind and establish an IRA rollover account
^ in the Portfolio.
SUBACCOUNTING AND SPECIAL SERVICES. Special processing has been
arranged with FIIOC for banks, corporations and other institutions that
wish to open multiple accounts (a master account and subaccounts). An
investor wishing to utilize FIIOC's subaccounting facilities or other
special services for individual or multiple accounts may be required to
enter into a separate agreement with FIIOC. Charges for these services, if
any, will be determined on the basis of the level of services to be
rendered. Subaccounts may be opened with the initial investment or at a
later date and may be established by an investor with registration either
by name or by number.
The Portfolio pays for shareholder services, but not for special
services, such as a request for a historical transcript of an account. You
may be required to pay a fee for these special services.
STATEMENTS AND REPORTS. The Portfolio will send a statement of
your account after every transaction that affects your share balance or
your account registration. The Portfolio does not issue share
certificates. Dividend statements are mailed quarterly. At least twice a
year you will receive financial statements of the Portfolio. To reduce
expenses, only one copy of most fund reports (such as the Portfolio's ^
Annual Report) will be mailed to your household. Write to the Portfolio if
you need to have additional reports sent each time.
FIDELITY INVESTMENTS RATES AND YIELDS SERVICES LINE^ is
Fidelity's around-the-clock telephone service that lets existing customers
use a push button phone with tone capabilities to obtain prices and yields
of Fidelity funds. For more information about this service contact Client
Administration.
HOLIDAY SCHEDULE. The Portfolio is open for business and its NAV
is calculated ^ each day the NYSE is open for trading. The NYSE has
designated the following holiday closings for ^ 1994: Presidents' Day,
Good Friday, Memorial Day^, Independence Day^, Labor Day, Thanksgiving
Day, and Christmas Day (observed). Although FMR expects the same holiday
schedule, with the addition of New Year's Day, to be observed in the
future, the NYSE may modify its holiday schedule at any time. On any day ^
14 prospectus
<PAGE>
that the NYSE closes early, or as permitted by the SEC, or on any day that
the principal government securities markets close early, such as on days
in advance of holidays generally observed by participants in such markets,
the right is reserved to advance the time on that day by which purchase
and redemption requests must be received. To the extent that the ^
portfolio securities are traded in other markets on ^ days that the NYSE
is closed, the Portfolio's NAV may be affected on days when investors do
not have access to the Portfolio to purchase or redeem shares. Certain ^
Fidelity funds may follow different holiday ^ schedules.
DISTRIBUTIONS AND TAXES
The Portfolio ordinarily declares dividends from net investment income
daily and pays such dividends monthly. The Portfolio intends to distribute
substantially all of its net investment income and capital gains, if any,
to shareholders within each calendar year as well as on a fiscal year
basis.
FEDERAL TAXES. Dividends derived from net investment income and
short-term capital gains are taxable as ordinary income. The Portfolio's
distributions are taxable when they are paid, whether you take them in
cash or reinvest them in additional shares, except that distributions
declared in December and paid in January are taxable as if paid on
December ^ 31. The Portfolio will send you an ^ Internal Revenue Service
(IRS) Form 1099-DIV by January ^ 31 showing your taxable distributions for
the past calendar year.
OTHER TAX INFORMATION. The information above is only a summary of
some of the federal tax consequences generally affecting the Portfolio and
its shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal tax, ^ shareholders may be subject to
state or local taxes on ^ their investments. Investors should consult
their tax advisors to determine whether the Portfolio is suitable to their
particular tax situation.
When you sign your account application, you will be asked to
certify that your Social Security or taxpayer identification number is
correct and that you are not subject to 31% backup withholding for failing
to report income to the IRS. If you violate IRS regulations, the IRS can
require the Portfolio to withhold 31% of distributions from your account.
^ Your tax situation may be different if you are investing through a tax-
saving retirement plan. Contact your tax adviser or plan administrator for
further information.
PORTFOLIO TRANSACTIONS
Money market obligations generally are traded in the over-
the-counter market through broker-dealers. A broker-dealer is a securities
15 prospectus
<PAGE>
firm or bank which makes a market for securities by offering to buy at one
price and sell at a slightly higher price. The difference between the
prices is known as a spread. Since FMR trades, directly or through
affiliated sub-advisers, a large number of securities, including those of
Fidelity's other funds, broker-dealers are willing to work with the
Portfolio on a more favorable spread than would be possible for most
individual investors.
The Portfolio has authorized FMR to allocate transactions to some
broker-dealers who help distribute the shares of the Portfolio or shares
of Fidelity's other funds to the extent permitted by law, and on an agency
basis to an affiliate, Fidelity Brokerage Services, Inc. (FBSI). FMR will
allocate such transactions if commissions are comparable to those charged
by non-affiliated qualified broker-dealers for similar services.
Higher commissions may be paid to those firms that provide
research services to the extent permitted by law. FMR also is authorized
to allocate brokerage transactions to FBSI in order to secure from FBSI
research services produced by third party, independent entities. FMR may
use this research information in managing the Portfolio's assets, as well
as assets of other clients.
PERFORMANCE
The Portfolio advertises its YIELD and EFFECTIVE YIELD in
advertisements or in reports or other communications to shareholders. Both
yield figures are based on historical earnings and are not intended to
indicate future performance.
The Portfolio's yield refers to the income generated by an
investment in the Portfolio over a seven-day period expressed as an annual
percentage rate. The Portfolio also may calculate an EFFECTIVE YIELD by
compounding the base period return over a one- year period. The effective
yield, although calculated similarly, will be slightly higher than the
yield because it assumes that income earned from the investment is
reinvested (i.e. the compounding effect of reinvestment). For the
seven-day period ended August 31, ^ 1994, the Portfolio's yield was ^
x.xx% and its effective yield was ^ x.xx%.
The Portfolio's TOTAL RETURN is based on the overall dollar or
percentage change in value of a hypothetical investment in the Portfolio
and assumes all distributions are reinvested.
A CUMULATIVE TOTAL RETURN reflects the Portfolio's performance
over a stated period of time.
An AVERAGE ANNUAL TOTAL RETURN reflects the hypothetical annually
compounded rate that would have produced the same cumulative total return
if the Portfolio's performance had been constant over the entire period.
Because average annual returns tend to smooth out variations in the
16 prospectus
<PAGE>
Portfolio's return, investors should recognize that they are not the same
as actual year-by-year results.
MANAGEMENT CONTRACT, DISTRIBUTION AND SERVICE PLAN
MANAGEMENT CONTRACT. For managing its investments and business
affairs, the Portfolio pays a monthly management fee to FMR at the annual
rate of .42% of the average net assets of the Portfolio throughout the
month. FMR pays all expenses of the Portfolio with the following
exceptions: the payment of fees and expenses of all Trustees of the Trust
who are not "interested persons" of the Trust or FMR; brokerage fees or
commissions (if any); interest on borrowings; taxes; and such
extraordinary non- recurring expenses as may arise, including litigation
to which the Portfolio may be a party. The management fee will be reduced
by the ^ fees and expenses of those Trustees who are not " interested
persons" of the Trust paid by the Portfolio. For the fiscal year ended
August 31, ^ 1994, the Portfolio paid FMR ^ $x,xxx,xxx in management fees
before reduction for ^ the fees and expenses of the non-interested members
of the Board of Trustees.
FMR has entered into a sub-advisory agreement with FMR Texas Inc.
(FMR Texas), under which FMR Texas has primary responsibility for
providing portfolio investment management services, while FMR retains
responsibility for providing other management services. Under the terms of
the agreement, FMR pays FMR Texas fees equal to 50% of the management fees
payable to FMR under its current management contract with the Portfolio.
The fees paid to FMR Texas are not reduced by any voluntary or mandatory
expense reimbursements that may be in effect from time to time.
FIIOC performs transfer agency, dividend disbursing and
shareholder servicing functions for the Portfolio. Service calculates the
Portfolio's NAV and dividends, and maintains the Portfolio's general
accounting records. The costs of providing these services are borne by FMR
pursuant to its ^ management contract with the Portfolio. Both FIIOC and
Service are affiliates of FMR.
FMR may, from time to time, agree to reimburse the Portfolio for
expenses above a specific percentage of average net assets. FMR retains
the ability to be repaid by the Portfolio for these expense reimbursements
in the amount that expenses fall below the limit prior to the end of the
fiscal year. Fee reimbursements by FMR will increase the Portfolio's
yield, and subsequent repayment by the Portfolio will lower its yield.
DISTRIBUTION AND SERVICE PLAN. The ^ Board of Trustees, on behalf
of the ^ Portfolio, has adopted a Distribution and Service Plan (the Plan)
under Rule 12b-1 (the Rule) of the Investment Company Act of 1940 (1940
Act). The Rule provides in substance that a mutual fund may not engage
directly or indirectly in financing any activity that is intended
primarily to result in the sale of shares of the fund except pursuant to a
plan adopted by the fund under the Rule. No separate payments are
authorized to be made by the Portfolio under the Plan. Rather, the Plan
17 prospectus
<PAGE>
recognizes that FMR may use its management fee or other resources to pay
expenses associated with activities primarily intended to result in the
sale of the Portfolio's shares.
^
THE TRUST AND THE FIDELITY ORGANIZATION. The Portfolio is a
diversified portfolio of Fidelity Money Market Trust, an open- end,
management investment company organized as a ^ Delaware business trust by
a Trust Instrument dated June 20, 1991. The Board of Trustees of the Trust
supervises Trust activities and reviews contractual arrangements with
companies that provide the Portfolio with services. The Trust is not
required to hold annual shareholder meetings, although special meetings
may be called for a specific Portfolio or the Trust as a whole for
purposes such as electing or removing Trustees, changing fundamental
investment policies or approving a new or amended management contract. As
a shareholder, ^ the number of votes you are entitled to is based upon the
dollar value of your investment.
Fidelity Investments is one of America's largest investment
management organizations and has its principal business address at 82
Devonshire Street, Boston, MA. It is composed of a number of different
subsidiaries and divisions which provide a variety of financial services
and products. The Trust employs various Fidelity companies to perform
certain activities required for its operation.
FMR is the original Fidelity company, founded in 1946. It
provides a number of mutual funds and other clients with investment
research and portfolio management services. FMR maintains a large staff of
experienced investment personnel and a full complement of related support
facilities. As of August 31, ^ 1994, FMR advised funds having more than ^
xx million shareholder accounts with a total value of more than ^ $xxx
billion. Fidelity Distributors Corporation (Distributors) distributes
shares for the Fidelity funds.
FMR Corp. is the ultimate parent company ^ of FMR and FMR Texas.
Through ownership of voting common stock, members of the Edward C. Johnson
3d ^ family form a controlling group with respect to FMR Corp. Changes
may occur in the Johnson family group, through death or disability, which
would result in changes in each individual family members' holding of
stock. Such changes could result in one or more family members becoming
holders of over 25% of the stock. FMR Corp. has received an opinion of
counsel that changes in the composition of the Johnson family group under
these circumstances would not result in the termination of the Portfolios'
management or distribution contracts and, accordingly, would nor require a
shareholder vote to continue operation under those contracts.
APPENDIX
18 prospectus
<PAGE>
The following paragraphs provide a brief description of
securities in which the Portfolio may invest and transactions it may make.
The Portfolio is not limited by this discussion, however, and may purchase
other types of securities and enter into other types of transactions if
they are consistent with the Portfolio's investment objectives and
policies.
A complete listing of the Portfolio's policies and limitations
and more detailed information about the Portfolio's investments are
contained in the Portfolio's SAI. Current holdings and recent investment
strategies are described in the Portfolio's financial report, which is
sent to shareholders twice a year.
ASSET-BACKED SECURITIES may include interests in pools of
mortgages, loans, ^ receivables or other assets. Payment of principle and
interest may be largely dependent upon the cash flows generated by the
assets backing the securities.
BANKERS' ACCEPTANCES ^ are negotiable obligations of a bank to
pay a draft which has been drawn on it by a customer. These obligations
are drawn on large banks and usually backed by goods in international
trade.
CERTIFICATES OF DEPOSIT ^ are negotiable certificates
representing a commercial bank's obligations to repay funds deposited with
it, earning special rates of interest over a given period of time.
COMMERCIAL PAPER ^ are short-term obligations issued by banks,
broker-dealers, corporations and other entities for purposes such as
financing their current operations.
CORPORATE OBLIGATIONS ^ are bonds and notes issued by
corporations and other business organizations in order to finance their
long-term credit needs.
DELAYED DELIVERY TRANSACTIONS. The Portfolio may buy and sell
securities on a when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The market value of securities
purchased in this way may change before the delivery date, which could
affect the market value of the Portfolio's assets. Ordinarily, the
Portfolio will not earn interest on securities purchased until they are
delivered.
ILLIQUID INVESTMENTS.^ Under the supervision of the Board of
Trustees, FMR determines the liquidity of the Portfolio's investments. The
absence of a trading market can make it difficult to ascertain a market
value for illiquid investments. ^ Disposing of illiquid investments may
19 prospectus
<PAGE>
involve time-consuming negotiation and legal expenses, and it may be
difficult or impossible for the Portfolio to sell ^ them promptly at ^ any
acceptable price.
INTERFUND BORROWING PROGRAM. The Portfolio has received
permission from the SEC to lend money to and borrow money from other funds
advised by FMR or its affiliates. Interfund loans and borrowings normally
will extend overnight, but can have a maximum duration of seven days. The
Portfolio will lend through the program only when the returns are higher
than those available at the same time from other short-term instruments
(such as repurchase agreements), and will borrow through the program only
when the costs are equal to or lower than the cost of bank loans. The
Portfolio will not lend more than 10% of its assets to other funds, and
will not borrow through the program if, after doing so, total outstanding
borrowings would exceed 15% of total assets. Loans may be called on one
day's notice, and the Portfolio may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay in
repayment to a lending fund could result in a lost investment opportunity
or additional borrowing costs.
MUNICIPAL OBLIGATIONS are issued to raise money for various
public purposes, including general purpose financing for state and local
governments as well as financing for specific projects or public
facilities. Municipal obligations may be backed by the full taxing power
of a municipality or by the revenues from a specific project or the credit
of a private organization.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio
buys a security at one price and simultaneously agrees to sell it back at
a higher price. In the event of the bankruptcy of the other party to a
repurchase agreement the Portfolio could experience delays in recovering
its cash. To the extent that, in the meantime, the value of the securities
purchased had decreased, the Portfolio could experience a loss. In all
cases, FMR must find the creditworthiness of the other party to ^ the
transaction satisfactory.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement,
the Portfolio temporarily transfers possession of a portfolio instrument
to another party, such as a bank or broker- dealer, in return for cash. At
the same time, the Portfolio agrees to repurchase the instrument at an
agreed upon price and date. The Portfolio expects that it will engage in
reverse repurchase agreements for temporary purposes such as funding
redemptions or when it is able to invest the cash so acquired at a rate
higher than the cost of the agreement, which would increase the income
earned by the Portfolio. Reverse repurchase agreements may increase the
risk of fluctuation in the market value of the Portfolio's assets or its
yield.
RESTRICTED SECURITIES^ cannot be sold to the public without
registration under the Securities Act of 1933^. Unless registered for
sale, these securities can only be sold in privately negotiated
transactions or pursuant to an exemption from registration.
20 prospectus
<PAGE>
TIME DEPOSITS ^ are non-negotiable deposits in a banking
institution earning a specified interest rate over a given period of time.
U.S. GOVERNMENT OBLIGATIONS are securities issued or guaranteed
by the U.S. Treasury or by an agency or instrumentality of the U.S.
government. Not all U.S. government obligations are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Home Loan Banks or by the Federal National Mortgage
Association are supported by the agency's right to borrow money from the
U.S. Treasury under certain circumstances. However, securities issued by
the Financing Corporation are supported only by the credit of the agency
that issued them. There is no guarantee that the government will support
these types of securities, and therefore they involve more risk than other
government obligations.
STRIPPED GOVERNMENT SECURITIES are created by separating the
income and principal components of a debt instrument and selling them
separately. Each Portfolio may purchase U.S. Treasury STRIPS (Separate
Trading of Registered Interest and Principal of Securities), that are
created when the coupon payments and the principal payment are stripped
from an outstanding Treasury bond by the Federal Reserve Bank of New York.
VARIABLE OR FLOATING RATE OBLIGATIONS ^ provide for periodic
adjustments of the interest rates paid. Floating rate obligations have
interest rates that change whenever there is a change in a designated base
rate, while variable rate obligations provide for a specified periodic
adjustment in the interest rate. These formulas are designed to result in
a market value for the instrument that approximates its par value. When
determining the maturity of a variable or floating rate ^ obligation, the
^ Portfolio may look to the date the demand feature can be exercised, or
to the date the interest rate is readjusted, rather than to the final
maturity of the ^ obligation.
ZERO COUPON BONDS do not make regular interest payments. Instead,
they are sold at a deep discount from their face value. In calculating its
daily dividend, the Portfolio takes into account as income a portion of
the difference between a zero coupon bond's purchase prices and its face
values. Because they do not pay current income, the prices of zero coupon
bonds can be very volatile when interest rates change.
21 prospectus
<PAGE>
RETIREMENT MONEY MARKET PORTFOLIO
A Portfolio of Fidelity Money Market Trust
STATEMENT OF ADDITIONAL INFORMATION
^ December 22, 1994
This Statement of Additional Information (SAI) is not a
prospectus but should be read in conjunction with the Portfolio's current
Prospectus ^ and Annual Report (dated December 22, 1994). Please retain
this ^ document for future reference. To obtain an additional ^ copy of
the Portfolio's Prospectus ^ and Annual Report ^, please call:
RETIREMENT PLAN ACCOUNTS^ 800-544-0276
FINANCIAL AND OTHER INSTITUTIONS^ 800-843-3001
TABLE OF CONTENTS
PAGE
Investment Policies and Limitations . . . . . . . . . . . . . . . . . . .
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation of Portfolio Securities . . . . . . . . . . . . . . . . . . . .
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Purchase and Redemption Information . . . . . . . . . . . . .
Distribution and Taxes . . . . . . . . . . . . . . . . . . . . . . . . .
FMR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . . .
Management and Service Contracts . . . . . . . . . . . . . . . . . . . .
Distribution and Service Plan . . . . . . . . . . . . . . . . . . . . . .
Description of the Trust . . . . . . . . . . . . . . . . . . . . . . . .
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DC-151360.2
<PAGE>
DISTRIBUTOR
Fidelity Distributors Corporation (Distributors)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
Morgan Guaranty Trust Company of New York^
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INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth
in the Prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of the Portfolio's assets that
may be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation will
be determined immediately after and as a result of the Portfolio's
acquisition of such security or other asset. Accordingly, any subsequent
change in values, net assets or other circumstances will not be considered
when determining whether the investment complies with the Portfolio's
investment policies and limitations.
The Portfolio's fundamental investment policies and limitations
can not be changed without approval by a "majority of the outstanding
voting securities" (as defined in the Investment Company Act of 1940
^(1940 Act)) of the Portfolio. However, except for the fundamental
investment limitations set forth below, the investment policies and
limitations described in this ^ SAI are not fundamental and may be changed
without shareholder approval. THE FOLLOWING ARE THE PORTFOLIO'S
FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE
PORTFOLIO MAY NOT:
(1) with respect to 75% of the Portfolio's total assets, purchase
the security of any issuer (other than obligations issued or guaranteed by
the government of the United States, its agencies or instrumentalities)
if, as a result thereof: (a) more than 5% of the Portfolio's total assets
would be invested in the securities of such issuer; or (b) the Portfolio
would hold more than 10% of the voting securities of such issuer;
(2) issue ^ senior securities, except as permitted under the
Investment Company Act of 1940;
^(3) borrow money, except that the Portfolio may (i) borrow money
for temporary or emergency purposes (not for leveraging or investment),
and (ii) engage in reverse repurchase agreements for any purpose; provided
that (i) and (ii) in combination do not exceed 33 1/3% of the Portfolio's
total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed ^ this amount will be
reduced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3% limitation;
^(4) underwrite securities issued by others (except to the extent
that the Portfolio may be deemed to be an underwriter within the meaning
of the Securities Act of 1933 in the disposition of restricted
securities);
^(5) purchase the securities of any issuer (other than
obligations issued or guaranteed by the government of the United States,
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<PAGE>
its agencies or instrumentalities) if, as a result, more than 25% of the
Portfolio's total assets (taken at current value) would be invested in the
securities of issuers having their principal business activities in the
same industry, except that the Portfolio intends to invest more than 25%
of total assets in obligations of institutions in the financial services
industry. Neither finance companies as a group or utility companies as a
group are considered a single industry for purposes of this policy;
^(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the Portfolio from ^ investing in securities or other instruments backed
by real estate or securities of companies engaged in the real estate
business);
^(7) purchase or sell physical commodities unless acquired as a
result of ownership of securities ^ or other instruments; or
^(8) lend any security or make any other loan if, as a result,
more than 33 1/3% of the Portfolio's total assets would be lent to other
parties, ^ but this limitation does not apply to purchases of debt
securities ^ or to repurchase agreements.
(9) The Portfolio may, notwithstanding any other fundamental
investment policy or limitation, invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies and
limitations as the Portfolio^ .
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The Portfolio does not currently intend to purchase a
security (other than a security issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result,
more than 5% of its total assets would be invested in the securities of a
single issuer; provided that the Portfolio may invest up to 25% of its
total assets in the first tier securities of a single issuer for up to
three business days.
(ii) The Portfolio may borrow money only (a) from a bank or
from a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party. The Portfolio will not purchase any
security while borrowings (excluding reverse repurchase agreements)
representing more than 5% of its total assets are outstanding. The
Portfolio will not borrow from other funds advised by FMR or its
affiliates if total outstanding borrowings immediately after such
borrowing would exceed 15% of the Portfolio's total assets.
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<PAGE>
(iii) The Portfolio does not currently intend to sell
securities short, unless it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold short, and provided
that transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iv) The Portfolio does not currently intend to purchase
securities on margin, except that the Portfolio may obtain such short-term
credits as are necessary for the clearance of transactions, and provided
that margin payments in connection with futures contracts and options on
futures contracts shall not constitute purchasing securities on margin.
(v) The Portfolio does not currently intend to purchase any
security if, as a result, 10% or more of its net assets would be invested
in securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be sold
or disposed of in the ordinary course of business at approximately the
prices at which they are valued.
^(vi) The Portfolio does not currently intend to purchase or
sell futures contracts or call options. This limitation does not apply to
options attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
^(vii) The Portfolio does not currently intend to lend assets
other than securities to other parties, except by lending money (up to 10%
of the Portfolio's net assets) to a registered investment company or
portfolio for which FMR or an affiliate serves as investment adviser.
(This limitation does not apply to purchases of debt securities or to
repurchase agreements.)
^(viii) The Portfolio does not currently intend to purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of its total assets would be invested in the
securities of business enterprises that, including predecessors, have a
record of less than three years of continuous operation.
^(ix) The Portfolio does not currently intend to invest in oil,
gas, or other mineral exploration or development programs or leases.
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<PAGE>
^(x) The Portfolio does not currently intend to purchase the
securities of any issuer if those officers and Trustees of the Portfolio
and those officers and directors of FMR who individually own more than 1/2
of 1% of the securities of such issuer together own more than 5% of such
issuer's securities.
(xi) The Portfolio does not currently intend to invest all of
its assets in the securities of a single open-end management investment
company with the same fundamental investment objective, policies, and
limitations as the Portfolio.
For the Portfolio's policies on quality and maturity, see the
section entitled "Quality and Maturity" on page .
AFFILIATED BANK TRANSACTIONS. ^ The Portfolio may engage in
transactions with ^ financial institutions that are, or may be considered
to be, "affiliated persons" of the ^ Portfolios under the 1940 Act. ^
These transactions may include repurchase agreements with custodian banks;
^ short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); ^ municipal securities; ^ U.S.
government securities with affiliated ^ financial institutions that are
primary dealers in these securities; short-term currency transactions; and
short-term borrowings. In accordance with exemptive orders issued by the
Securities and Exchange Commission (SEC), the Board of Trustees has
established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
ASSET-BACKED SECURITIES. Asset-backed securities may include
pools of mortgages, loans, ^ receivables or other assets. Payment of
principle and interest may be largely dependent upon the cash flows
generated by the assets backing the securities, and, in certain cases,
supported by letters of credit, surety bonds, or other credit
enhancements. The value of asset-backed securities may also be affected by
the creditworthiness of the servicing agent for the pool, the originator
of the loans or receivables, or the financial institution(s) providing the
credit support.
DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S. ^
dollar-denominated time deposits, certificates of deposit and bankers'
acceptances of U.S. banks and their branches located outside of the ^
United States, of U.S. branches and agencies of foreign banks, and foreign
branches of foreign banks. The Portfolio also may invest in U.S.
dollar-denominated securities issued or guaranteed by other U.S. or
foreign issuers, including U.S. and foreign corporations or other business
organizations, foreign governments and foreign government agencies or
instrumentalities, and U.S. and foreign financial institutions, including
savings and loan institutions, insurance companies, mortgage bankers and
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<PAGE>
real estate investment trusts, as well as banks. The Portfolio may
purchase obligations of banks, savings and loan institutions and other
financial institutions whose creditworthiness might not otherwise meet the
Portfolio's standards, provided that (i) the principal amount of the
instrument acquired by the Portfolio is insured in full by the Federal
Deposit Insurance Corporation (FDIC) and (ii) the aggregate investment
made in any one such bank or institution does not exceed $100,000.
The obligations of foreign branches and agencies of U.S. banks
may be general obligations of the parent bank in addition to the issuing
branch, or may be limited by the terms of a specific obligation and by
governmental regulation. Payment of interest and principal upon these
obligations may also be affected by governmental action in the country of
domicile of the branch (generally referred to as sovereign risk). In
addition, evidences of ownership of portfolio securities may be held
outside of the U.S. and the Portfolio may be subject to the risks
associated with the holding of such property overseas. Various provisions
of federal law governing the establishment and operation of U.S. branches
do not apply to foreign branches of U.S. banks.
Obligations of U.S. branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may
be limited by the terms of a specific obligation and by federal and state
regulation as well as by governmental action in the country in which the
foreign bank has its head office.
Obligations of foreign issuers also involve certain additional
risks. Foreign issuers may be subject to less governmental regulation and
supervision than U.S. issuers. Foreign issuers also generally are not
bound by uniform accounting, auditing and financial reporting requirements
comparable to those applicable to U.S. issuers.
DELAYED DELIVERY TRANSACTIONS. The Portfolio may buy and sell
securities on a delayed delivery or when-issued basis. These transactions
involve a commitment by the Portfolio to purchase or sell specific
securities at a predetermined price and/or yield, with payment and
delivery taking place after the customary settlement period for that type
of security (and more than seven days in the future). Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed delivery basis, the
Portfolio assumes the rights and risks of ownership, including the risk of
price and yield fluctuations. Because the Portfolio is not required to
pay for securities until the delivery date, these risks are in addition to
the risks associated with the Portfolio's other investments. If the
Portfolio remains substantially fully invested at a time when delayed
delivery purchases are outstanding, the delayed delivery purchases may
result in a form of leverage. When delayed delivery purchases are
outstanding, the Portfolio will set aside appropriate liquid assets in a
segregated custodial account to cover its purchase obligations. When the
Portfolio has sold a security on a delayed delivery basis, the Portfolio
does not participate in further gains or losses with respect to the
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<PAGE>
security. If the other party to a delayed delivery transaction fails to
deliver or pay for the securities, the Portfolio could miss a favorable
price or yield opportunity, or could suffer a loss.
The Portfolio may renegotiate delayed delivery transactions after
they are entered into, and may sell underlying securities before they are
delivered, which may result in capital gains or losses.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio
purchases a security and simultaneously commits to resell that security to
the seller at an agreed upon price ^. The resale price reflects the
purchase price plus an agreed upon incremental amount which is unrelated
to the coupon rate or maturity of the purchased security. A repurchase
agreement involves the obligation of the seller to pay the agreed upon
resale price, which obligation is in effect secured by the value (at least
equal to the amount of the agreed upon resale price and marked to market
daily) of the underlying security. The Portfolio may engage in a
repurchase agreement with respect to any type of security in which it is
authorized to invest (except that the security may have a maturity in
excess of 397 days). While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
of a decline in the market value of the underlying securities, as well as
delays and costs to the Portfolio in connection with bankruptcy
proceedings), it is the Portfolio's current policy to limit repurchase
agreements to those parties whose creditworthiness has been reviewed and
found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase
agreement, the Portfolio sells a portfolio instrument to another party,
such as a bank or a broker-dealer, in return for cash and agrees to
repurchase the instrument at a particular price and time. While a reverse
repurchase agreement is outstanding, the Portfolio will maintain
appropriate liquid assets in a segregated custodial account to cover its
obligation under the agreement. The Portfolio will enter into reverse
repurchase agreements only with parties whose creditworthiness has been
found satisfactory by FMR. Such transactions may increase fluctuations in
the market value of the Portfolio's assets and may be viewed as a form of
leverage.
STRIPPED GOVERNMENT SECURITIES are created by separating the
income and principal components of a debt instrument and selling them
separately. The Portfolio may purchase U.S. Treasury STRIPS (Separate
Trading of Registered Interest and Principal of Securities), that are
created when the coupon payments and the principal payment are stripped
from an outstanding Treasury bond by the Federal Reserve Bank. Bonds
issued by the Resolution Funding Corporation (REFCORP) can also be
stripped in this fashion. REFCORP Strips are eligible investments for the
Portfolios.
The Portfolio can purchase privately stripped government
securities, which are created when a dealer deposits a Treasury security
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<PAGE>
or federal agency security with a custodian for safekeeping and then sells
the coupon payments and principal payment that will be generated by this
security. Proprietary receipts, such as Certificates of Accrual on
Treasury Securities (CATS), Treasury Investment Growth Receipts (TIGRS),
and generic Treasury Receipts (TRs), are stripped U.S. Treasury securities
that are separated into their component parts through trusts created by
their broker sponsors. Bonds issued by the Financing Corporation (FICO)
can also be stripped in this fashion.
Because of the SEC's views on privately stripped government
securities, the must evaluate them as it would non-government securities
pursuant to regulatory guidelines applicable to all money market funds.
Accordingly, the Portfolio intends to purchase only those privately
stripped government securities that have either received the highest
rating from two nationally recognized rating services (or one, if only one
has rated the security), or, if unrated, been judged to be of equivalent
quality by FMR pursuant to procedures adopted by the Board of Trustees.
ILLIQUID INVESTMENTS are investments that cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued. Under the supervision of the Board of Trustees,
FMR determines the liquidity of the Portfolio's investments and, through
reports from FMR, the Board monitors investments in illiquid instruments.
In determining the liquidity of the Portfolio's investments, FMR may
consider various factors including (1) the frequency of trades and
quotations, (2) the number of dealers and prospective purchasers in the
marketplace, (3) dealer undertakings to make a market, (4) the nature of
the security (including any demand or tender features) and (5) the nature
of the marketplace for trades (including the ability to assign or offset
the Portfolio's rights and obligations relating to the investment).
Investments currently considered by the Portfolio to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days. Also, FMR may determine some restricted
securities and time deposits to be illiquid. In the absence of market
quotations, illiquid investments are valued for purposes of monitoring
amortized cost valuation at fair value as determined in good faith by a
committee appointed by the Board of Trustees. If through a change in
values, net assets or other circumstances, the Portfolio were in a
position where 10% or more of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
RESTRICTED SECURITIES generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration under
the Securities Act of 1933, or in a registered public offering. Where
registration is required, the Portfolio may be obligated to pay all or
part of the registration expense and a considerable period may elapse
between the time it decides to seek registration and the time the
Portfolio may be permitted to sell a security under an effective
registration statement. If, during such a period, adverse market
conditions were to develop, the Portfolio might obtain a less favorable
price than prevailed when it decided to seek registration of the security.
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<PAGE>
However, in general, the Portfolio anticipates holding restricted
securities to maturity or selling them in an exempt transaction.
QUALITY AND MATURITY. Pursuant to procedures adopted by the
Board of Trustees, the Portfolio may purchase only high-quality securities
that FMR believes present minimal credit risks. To be considered high
quality, a security must be a U.S. government security; rated in
accordance with applicable rules in one of the two highest categories for
short-term securities by at least two nationally recognized rating
services (or by one, if only one rating service has rated the security);
or, if unrated, judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second
tier" securities. First tier securities have received the highest rating
(e.g., Standard & Poor's A-1 rating) from at least two rating services (or
one, if only one has rated the security). Second tier securities have
received ratings within the two highest categories (e.g., Standard &
Poor's A-1 or A-2) from at least two rating services (or one, if only one
has rated the security), but do not qualify as first tier securities. If
a security has been assigned different ratings by different rating
services, at least two rating services must have assigned the higher
rating in order for FMR to determine eligibility on the basis of that
higher rating. Based on procedures adopted by the Board of Trustees, FMR
may determine that an unrated security is of equivalent quality to a rated
first or second tier security.
The Portfolio currently intends to limit its investments to
securities with remaining maturities of 397 days or less, and to maintain
a dollar-weighted average maturity of 90 days or less.
SHORT SALES AGAINST THE BOX. The Portfolio may sell securities
short when it owns or has the right to obtain securities equivalent in
kind or amount to the securities sold short. Short sales could be used to
protect the net asset value per share (NAV) of the Portfolio in
anticipation of increased interest rates without sacrificing the current
yield of the securities sold short. If the Portfolio enters into a short
sale against the box, it will be required to set aside securities
equivalent in kind and amount to the securities sold short (or securities
convertible or exchangeable into such securities) and will be required to
continue to hold such securities while the short sale is outstanding. The
Portfolio will incur transaction costs, including interest expenses, in
connection with opening, maintaining and closing short sales against the
box.
VARIABLE OR FLOATING RATE OBLIGATIONS ^ provide for periodic
adjustments of the interest rate paid. Floating rate obligations have
interest rates that change whenever there is a change in a designated base
rate while variable rate ^ obligations provide for a specified periodic
adjustment in the interest rate. These formulas are designed to result in
a market value for the ^ instrument that approximates its par value.
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^ Some variable or floating rate ^ obligations permit holders to
demand payment of the unpaid principal balance plus an accrued interest
from the issuers or certain financial intermediaries. Issuers or
financial intermediaries who provide demand features or stand-by
commitments often obtain letters of credit (LOCs) or other guarantees from
domestic or foreign banks to support their repurchase commitments. FMR
may rely upon its evaluation of a bank's credit in determining whether to
purchase an obligation supported by an LOC. In evaluating a foreign
bank's credit, FMR will consider whether adequate public information about
the bank is available and whether the bank may be subject to unfavorable
political or economic developments, currency controls, or other
governmental restrictions that might affect the bank's ability to honor
its credit commitment.
When determining the maturity of a variable or floating rate
obligation, the Portfolio may look to the date the demand feature can be
exercised, or to the date the interest rate is readjusted, rather than to
the final maturity of the obligation.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of the Portfolio by FMR ^ pursuant to authority contained
in the ^ management contract. If FMR grants investment management
authority to the sub-adviser (see the section entitled "Management and
Service Contracts"), the sub-adviser will be authorized to place orders
for the purchase and sale of portfolio securities, and will do so in
accordance with the policies described below. FMR is also responsible for
the placement of transaction orders for other investment companies and
accounts for which it or its affiliates act as investment adviser.
Securities purchased and sold by the Portfolio generally will be traded on
a net basis (i.e., without commission). In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR ^
considers various relevant factors, including, but not limited to, the
size and type of the transaction; the nature and character of the markets
for the security to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the broker-dealer firm;
the broker-dealer's execution services rendered on a continuing basis; and
the reasonableness of any commissions.
The Portfolio may execute portfolio transactions with
broker-dealers who provide research and execution services to the
Portfolio ^ or other accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; the availability of securities or the purchasers or
sellers of securities; furnishing analyses and reports concerning issuers,
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<PAGE>
industries, securities, economic factors and trends, portfolio strategy
and performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and
settlement). FMR maintains a listing of broker- dealers who provide such
services on a regular basis. However, as many transactions on behalf of
the Portfolio are placed with ^ broker-dealers (including broker-dealers
on the list) without regard to the furnishing of such services, it is not
possible to estimate the proportion of such transactions directed to such
broker-dealers solely because such services were provided. The selection
of such broker-dealers generally is ^ made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute
transactions on behalf of the Portfolio may be useful to FMR in rendering
investment management services to the Portfolio ^ or its other clients,
and conversely, such research provided by broker-dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR in
carrying out its obligations to the Portfolio. The receipt of such
research has not reduced FMR's normal independent research activities;
however, it enables FMR to avoid the additional expenses ^ that could be
incurred if FMR tried to develop comparable information through its own
efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the Portfolio to pay such higher commissions, FMR must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Portfolio and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on
the brokerage and research services provided, or to determine what portion
of the compensation should be related to those services.
FMR is authorized to use research services provided by and to
place portfolio transactions with brokerage firms that have provided
assistance in the distribution of shares of the Portfolio or shares of
other Fidelity funds to the extent permitted by law. FMR may use research
services provided by and place agency transactions with Fidelity Brokerage
Services, Inc. (FBSI) ^ and Fidelity Brokerage Services, Ltd. (FBSL),
subsidiaries of FMR Corp., if the commissions are fair ^, reasonable, and
comparable to commissions charged by ^ non-affiliated, qualified
brokerage firms for similar services.
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<PAGE>
Section 11(a) of the Securities Exchange Act of 1934 prohibits
members of national securities exchanges from executing exchange
transactions for accounts which they or their affiliates manage, ^ unless
certain requirements are satisfied. Pursuant to such ^ requirements, the
Board of Trustees has ^ authorized FBSI to execute portfolio transactions
on national securities exchanges ^ in accordance with approved procedures
and applicable SEC rules.
The Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the Portfolio and review the commissions paid by
the Portfolio over representative periods of time to determine if they are
reasonable in relation to the benefits to the Portfolio.
From time to time the Trustees will review whether the recapture
for the benefit of the Portfolio of some portion of the brokerage
commissions or similar fees paid by the Portfolio on portfolio
transactions is legally permissible and advisable. The Portfolio seeks to
recapture soliciting broker-dealer fees on the tender of portfolio
securities, but at present no other recapture arrangements are in effect.
The Trustees intend to continue to review whether recapture opportunities
are available and are legally permissible and, if so, to determine, in the
exercise of their business judgment ^ whether it would be advisable for
the Portfolio to seek such recapture.
Although the Trustees and officers of the Trust are substantially
the same as those of other funds managed by FMR, investment decisions for
the ^ Trust are made independently from those of other funds managed by
FMR or accounts managed by FMR affiliates. It sometimes happens that the
same security is held in the portfolio of more than one of these funds or
accounts. Simultaneous transactions are inevitable when several funds are
managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase
or sale of the same security, the prices and amounts are allocated in
accordance with ^ procedures believed to be appropriate and equitable for
the Portfolio. In some cases this system could have a detrimental effect
on the price or value of the security as far as the Portfolio is
concerned. In other cases, however, the ability of the Portfolio to
participate in volume transactions will produce better executions and
prices for the Portfolio. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to the Portfolio
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
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<PAGE>
The Portfolio values its investments on the basis of amortized
cost. This technique involves valuing an instrument at its cost as
adjusted for amortization of premium or accretion of discount rather than
its value based on current market quotations or appropriate substitutes
which reflect current market conditions. The amortized cost value of an
instrument may be higher or lower than the price the Portfolio would
receive if it sold the instrument.
Valuing the Portfolio's instruments on the basis of amortized
cost and use of the term "money market fund" are permitted by Rule 2a-7
under the 1940 Act. The Portfolio must adhere to certain conditions under
Rule 2a-7; these conditions are summarized in the Prospectus.
The Board of Trustees of the Trust oversees FMR's adherence to
SEC rules concerning money market funds, and has established procedures
designed to stabilize the Portfolio's NAV at $1.00. At such intervals as
they deem appropriate, the Trustees consider the extent to which NAV
calculated by using market valuations would deviate from $1.00 per share.
If the Trustees believe that a deviation from the Portfolio's amortized
cost per share may result in material dilution or other unfair results to
shareholders, the Trustees have agreed to take such corrective action, if
any, as they deem appropriate to eliminate or reduce, to the extent
reasonably practicable, the dilution or unfair results. Such corrective
action could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends; redeeming shares in kind; establishing NAV by using
available market quotations; and such other measures as the Trustees may
deem appropriate.
During periods of declining interest rates, the Portfolio's yield
based on amortized cost may be higher than the yield based on market
valuations. Under these circumstances, a shareholder in the Portfolio
would be able to obtain a somewhat higher yield than would result if the
Portfolio utilized market valuations to determine its NAV. The converse
would apply in a period of rising interest rates.
PERFORMANCE
The Portfolio's performance may be compared to the performance of
other mutual funds in general, or to the performance of particular types
of mutual funds. These comparisons may be expressed as mutual fund
rankings prepared by Lipper Analytical Services, Inc. (Lipper), an
independent service located in Summit, New Jersey, which monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank the funds based
on yield. In addition to the mutual fund rankings, the Portfolio's
performance may be compared to mutual fund performance indices prepared by
Lipper.
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<PAGE>
The Portfolio may also compare its performance or the performance
of securities in which it may invest to averages published by IBC/USA
(Publications), Inc. of Ashland, MA, 01721. These averages assume
reinvestment of distributions. The Money Fund Averages/All Taxable which
is reported in the Money Fund Report, covers over 607 taxable money market
funds. The Portfolio may reference the growth and variety of money market
mutual funds and FMR's innovation and participation in the industry.
The Portfolio also may compare its performance to the yields or
averages of other money market securities as reported by the Federal
Reserve Bulletin, by TeleRate, a financial information network, or by
Salomon Brothers Inc., a broker-dealer firm, and to other fixed-income
investments such as Certificates of Deposit (CDs). The principal value
and interest rate of CDs and money market securities are fixed at the time
of purchase, whereas the Portfolio's yield will fluctuate. Unlike some
CDs and certain other money market securities, money market mutual funds
are not insured by the FDIC. Investors should give consideration to the
quality and maturity of the portfolio securities of the respective
investment companies when comparing investment alternatives.
YIELD CALCULATIONS. The Portfolio's yield refers to the income
generated by an investment in the Portfolio over a seven day period
expressed as an annual percentage rate. The effective yield, although
calculated similarly, will be slightly higher than the yield because it
assumes that income earned from the investment is reinvested (the
compounding effect of reinvestment). In addition to the current yield,
the Portfolio may quote yields in advertising based on any historical
seven day period.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising
reflect all aspects of the Portfolio's return, including the effect of
reinvesting dividends and capital gain distributions (if any). Average
annual returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in the Portfolio over a
stated period, and then calculating the annually compounded percentage
rate that would have produced the same result if the rate of growth or
decline in the value of the investment had been constant over the period.
For example, a cumulative return of 100% over ten years would produce an
average annual return of 7.18%, which is the steady annual rate that would
equal 100% growth on a compounded basis in ten years. While average
annual returns are a convenient means of comparing investment
alternatives, investors should realize that the Portfolio's performance is
not constant over time, but changes from year to year, and that average
annual returns represent averaged figures as opposed to the actual
year-to-year performance of the Portfolio.
In addition to average annual returns, the Portfolio may quote
unaveraged or cumulative total returns reflecting the simple change in the
value of an investment over a stated period. Average annual and
cumulative total returns may be quoted as percentages or as dollar amounts
and may be calculated for a single investment, a series of investments or
a series of redemptions over any time period. Total returns may be broken
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<PAGE>
down into their components of income and capital in order to illustrate
the relationship of these factors and their contributions to total return.
Total returns, yields, and other performance information may be quoted
numerically or in a table, graph, or similar illustration. The
Portfolio's cumulative total returns and average annual returns for the
fiscal year ended August 31, ^ 1994 were as follows:
Historical Portfolio Results
One YearThree YearLife of Portfolio*
Average Annual % % %
Total ^ Returns
Cumulative % % %
Total Returns
* Life of Portfolio from ^ December 2, 1988 to August 31, 1994.
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<PAGE>
The following chart shows the income and capital elements of the
Portfolio's year-by-year total returns for the period ^ December 2, 1988
through ^ August 31, 1994 as compared to the cost of living measured by
the Consumer Price Index over the same period.
<TABLE>
<S>
<C> <C> <C> <C> <C> <C>
Initial Value of Value of Consumer
$10,000 Reinvested Reinvested Total Price
Period Investment Dividends Capital Gains Value Index**
10/31/89* $10,000 $ 814 $0 $10,814 $10,441
10/31/90 10,000 1,709 0 11,709 11,097
10/31/91 10,000 2,472 0 12,472 11,421
08/31/92*** 10,000 2,909 0 12,909 11,712
08/31/93 10,000 3,309 0 13,309 12,037
08/31/94
</TABLE>
* December 2, 1988^ through ^ October 31, 1989.
** From month-end closest to the initial investment date.
*** This period reflects the Portfolio's change of fiscal year- end
date from ^ October 31 to August 31.
Explanatory Notes: With an initial investment of $10,000 made on
^ December 2, 1988, the net amount invested in shares of the Portfolio was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (that is,
their cash value at the time they were reinvested) amounted to ^ $______.
If distributions had not been reinvested, the amount of distributions
earned from the Portfolio over time would have been smaller and the cash
payments (dividends) for the period would have come to ^ $_____. The
Portfolio did not distribute any capital gains during the period.
The Portfolio may reference and discuss its fund number, Quotron
number, CUSIP number, and current portfolio manager in advertising.
From time to time, in reports and promotional literature, the
Portfolio's performance also may be compared to other mutual funds tracked
by financial or business publications and periodicals. For example, the
Portfolio may quote Morningstar, Inc. in its advertising materials.
Morningstar, Inc. is a mutual fund rating service that rates mutual funds
of the basis or risk-adjusted performance. In addition, the Portfolio may
quote financial or business publications and periodicals as they relate to
portfolio management, investment philosophy, and investment techniques.
Rankings that compare the performance of Fidelity funds to one another in
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<PAGE>
appropriate categories over specific periods of time may also be quoted in
advertising.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash
payment undesirable, redemption payments may be made in whole or in part
in securities or other property, valued for this purpose as they are
valued in computing the Portfolio's NAV. Shareholders receiving
securities or other property on redemption may realize a gain or loss for
tax purposes, and will incur any costs of sale, as well as the associated
inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, the Portfolio is
required to give shareholders at least 60 days' notice prior to
terminating or modifying its exchange privilege. Under the Rule, the
60-day notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the Portfolio suspends the redemption of the shares
to be exchanged as permitted under the 1940 Act or the rules and
regulations thereunder, or the fund to be acquired suspends the sale of
its shares because it is unable to invest amounts effectively in
accordance with its investment objective and policies.
The Portfolio has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the Portfolio would be unable
to invest effectively in accordance with its investment objective and
policies or might otherwise be adversely affected.
DISTRIBUTION AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to
you and the U.S. Postal Service cannot deliver your checks, or if your
checks remain uncashed for six months, Fidelity may reinvest your
distributions at the then-current NAV. All subsequent distributions will
then be reinvested until you provide Fidelity with alternate instructions.
DIVIDENDS. Dividends from the Portfolio will not normally
qualify for the dividends-received deduction available to corporations,
since the Portfolio's income is primarily derived from interest income and
short-term capital gains. Depending upon state law, a portion of the
Portfolio's dividends attributable to interest income derived from U.S.
government securities may be exempt from state and local taxation. The
Portfolio will provide information on the portion of the Portfolio's
dividends, if any, that qualify for this exemption.
CAPITAL GAIN DISTRIBUTIONS. The Portfolio may distribute
short-term capital gains once a year or more often as necessary to
maintain its NAV at $1.00 per share or to comply with distribution
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<PAGE>
requirements under federal tax law. The Portfolio does not anticipate
earning long-term capital gains on securities held by the Portfolio.
TAX STATUS OF THE PORTFOLIO. The Portfolio has qualified and
intends to qualify as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended (the Code), so that the Portfolio will
not be liable for federal income or excise taxes on net investment income
or capital gains to the extent that these are distributed to shareholders
in accordance with applicable provisions of the Code.
FMR
FMR is a wholly owned subsidiary of FMR Corp., ^ the ultimate
parent company organized in 1972. All of the stock of FMR is owned by FMR
Corp. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family form a
controlling group with respect to FMR Corp. At present, the principal
operating activities of FMR Corp. are those conducted by three of its
divisions as follows: Fidelity Service Company (Service), which is the
transfer and shareholder servicing agent for certain funds advised by FMR;
^ FIIOC, which performs shareholder servicing functions for certain
institutional customers; and Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within the
Fidelity organization.
Several affiliates of FMR also are engaged in the investment
advisory business. Fidelity Management Trust Company provides trustee,
investment advisory and administrative services to retirement plans and
corporate employee benefit accounts. Fidelity Management & Research
(U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Far East) Inc.
(FMR Far East), both wholly-owned subsidiaries of FMR formed in 1986,
supply investment research, and may supply portfolio management services
to FMR in connection with certain funds advised by FMR. Analysts employed
by FMR, FMR U.K. and FMR Far East research and visit thousands of domestic
and foreign companies each year. FMR Texas, a wholly owned subsidiary of
FMR formed in 1989, supplies portfolio management and research services in
connection with certain money market funds advised by FMR.
TRUSTEES AND OFFICERS
The Board of Trustees and executive officers of the Trust are
listed below. Except as indicated, each individual has held the office
shown or other offices in the same company for the last five years. All
persons named as Trustees and officers also serve in similar capacities
for other funds advised by FMR. Unless otherwise noted, the business
address of each Trustee and officer is 82 Devonshire Street, Boston, MA
02109, which is also the address of FMR. Those Trustees who are
"interested persons" (as defined in the 1940 Act) by virtue of their
affiliation with either the Trust or FMR, are indicated by an asterisk
(*).
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<PAGE>
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director
of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is
President of FMR; and President and a Director of FMR Texas Inc. (1989),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee
(1991), is a consultant to Western Mining Corporation (1994). Prior to
February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production, 1990). ^ Until March 1990, Mr.
Cox was President and Chief Operating Officer of Union Pacific Resources
Company (exploration and production). He is a Director of ^ Sanifill
Corporation ^ (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983- 1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, N.Y., Trustee
(1992). Prior to her retirement in September 1991, Mrs. Davis was the
Senior Vice President of Corporate Affairs of Avon Products, Inc. She is
currently a Director of BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail
stores, 1990), and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she serves as a
Director of the New York City Chapter of the National Multiple Sclerosis
Society, and is a member of the Advisory Council of the International
Executive Service Corps. and the President's Advisory Council of The
University School of Vermont School of Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a
financial consultant. Prior to September 1986, Mr. Flynn was Vice
Chairman and a Director of the Norton Company (manufacturer of industrial
devices). He is currently a Director of Mechanics Bank and a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, ^ 3881-2 Lander Road, Chagrin Falls, OH,
Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman
and Chief Executive Officer of LTV Steel Company. Prior to May 1990, he
was Director of National City Corporation (a bank holding company) and
National City Bank of Cleveland. He is a Director of TRW Inc. (original
equipment and replacement products), Cleveland-Cliffs Inc. (mining), NACCO
Industries, Inc. (mining and marketing), Consolidated Rail Corporation,
Birmingham Steel Corporation^, Hyster-Yale Materials Handling, Inc.
(1989), and RPM, Inc. (manufacturer of chemical products, 1990). In
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<PAGE>
addition, he serves as a Trustee of First Union Real Estate Investments^,
Chairman of the Board of Trustees and a member of the Executive Committee
of the Cleveland Clinic Foundation, a Trustee and a member of the
Executive Committee of University School (Cleveland), and a Trustee of
Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North,
Greenwich, CT, Trustee, is a Professor at Columbia University Graduate
School of Business and a financial consultant. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance)^ and Valuation Research
Corp. (appraisals and valuations, 1993). In addition, he serves as Vice
Chairman of the Board of Directors of the National Arts Stabilization Fund
and the Vice Chairman of the Board of Trustees of the Greenwich Hospital
Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992).
Prior to his retirement on May 31, 1990, he was a Director of FMR (1989)
and Executive Vice President of FMR (a position he held until March 31,
1991); Vice President of Fidelity Magellan Fund and FMR Growth Group
Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice
President of Fidelity Investments Corporate Services, Inc. (1991-1992).
He is a Director of W.R. Grace & Co. (chemicals, 1989) and Morrison
Knudsen Corporation (engineering and construction^). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary,
Historic Deerfield (1989) and Society for the Preservation of New England
Antiquities, and as an Overseer of the Museum of Fine Arts of Boston
(1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee
(1989), is Chairman of G.M. Management Group (strategic advisory
services). Prior to his retirement in July 1988, he was Chairman and
Chief Executive Officer of Leaseway Transportation Corp. (physical
distribution services). Mr. McDonough is a Director of ACME-Cleveland
Corp. (metal working, telecommunications and electronic products),
Brush-Wellman Inc. (metal refining), York International Corp.
^(air-conditioning and refrigeration, 1989), ^ Commercial Intertech Corp.
(water treatment equipment, 1992)^, and Associated Estates Realty
Corporation (a real estate investment trust, 1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL,
Trustee^. Prior to his retirement in 1985, Mr. Malone was Chairman,
General Electric Investment Corporation and a Vice President of General
Electric Company. He is a Director of Allegheny Power Systems, Inc.
(electric utility), General Re Corporation (reinsurance) and Mattel Inc.
(toy manufacturer). ^ In addition, he serves as a Trustee of Corporate
Property Investors, the EPS Foundation at Trinity College, the Naples
Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute,
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<PAGE>
and he is a member of the Advisory Boards of Butler Capital Corporation
Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993)
is Chairman of the Board, President, and Chief Executive Officer of
Lexmark International, Inc. (office machines, 1991). Prior to 1991, he
held the positions of Vice President of International Business Machines
Corporation ("IBM") and President and General Manager of various IBM
divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna Company
(chemicals, 1993) and Infomart (marketing services, 1991), a Trammell Crow
Co. In addition, he serves as a Campaign Vice Chairman of the Tri-State
United Way (1993) and is a member of the University of Alabama President's
Cabinet (1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E.,
Atlanta, GA, Trustee^, is President of The Wales Group, Inc. (management
and financial advisory services). Prior to retiring in 1987, Mr. Williams
served as Chairman of the Board of First Wachovia Corporation (bank
holding company), and Chairman and Chief Executive Officer of The First
National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software^), Georgia Power Company
(electric utility), Gerber Alley & Associates, Inc. (computer software),
National Life Insurance Company of Vermont, American Software, Inc.
(1989), and AppleSouth, Inc. (restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of
the Fidelity funds, Mr. French was Senior Vice President, Fund Accounting
- Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and Senior
Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General
Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and
Clerk of ^ Distributors.
FRED L. HENNING JR., Vice President (1994), is Vice President of
Fidelity's money market funds and Senior Vice President of FMR Texas, Inc.
THOMAS D. MAHER, Assistant Vice President (1990), is Assistant
Vice President of Fidelity's money market funds and Vice President and
Associate General ^ Counsel of FMR Texas ^ (1990). Prior to 1990, Mr.
Maher was an employee of FMR and Assistant Vice President of FMR Texas,
Inc.
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<PAGE>
ROBERT LITTERST, Vice President ^ of the Portfolio and of other
funds advised by FMR, is an employee of FMR Texas.
Under a retirement program ^ that became effective on November 1,
1989, Trustees, upon reaching age 72, become eligible to participate in a
defined benefit retirement program under which they receive payments
during their lifetime from the ^ Portfolio based on their basic ^ trustee
fees and length of service. Currently, Messrs. Robert L. Johnson, William
R. Spaulding, Bertram H. Witham, and David L. Yunich participate in the
program.
^ The Trustees and officers of the Trust ^ as a group, own less
than 1% of the Portfolio's outstanding shares.
MANAGEMENT AND SERVICE CONTRACTS
The Portfolio employs FMR to furnish investment advisory and
other services. Under its ^ management contract with the Portfolio, FMR
acts as investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the Portfolio in accordance with its
investment objective, policies and limitations. FMR also provides the
Portfolio with all necessary office facilities, equipment and personnel
for servicing the Portfolio's investments and compensates all officers of
the Trust, all Trustees who are "interested persons" of the Trust or of
FMR, and all personnel of the Trust or FMR performing services relating to
research, statistical and investment activities. In addition, FMR or its
affiliates, subject to the supervision of the Board of Trustees, provide
the management and administrative services necessary for the operation of
the Portfolio. These services include providing facilities for
maintaining the Portfolio's organization, supervising relations with
custodians, transfer and pricing agents, accountants, underwriters and
other persons dealing with the Portfolio; preparing all general
shareholder communications and conducting shareholder relations;
maintaining the Trust's records and the registration of the Portfolio's
shares under federal and state law; developing management and shareholder
services for the Portfolio; and furnishing reports, evaluations and
analyses on a variety of subjects to the Trustees on behalf of the
Portfolio.
FMR pays all of the expenses of the Portfolio, except as
described below. Specific expenses payable by FMR include, without
limitation, the fees and expenses of registering and qualifying the
Portfolio and its shares for distribution under federal and state
securities laws; expenses of typesetting for printing the Prospectus and ^
SAI; custodian charges; auditing and legal expenses; insurance expenses;
association membership dues; the expense of reports to shareholders;
shareholders' meetings; and proxy solicitations.
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<PAGE>
^ FIIOC is transfer ^, dividend disbursing ^, and shareholder
servicing agent for the Portfolio. The costs of these services are borne
by FMR pursuant to its ^ management contract with Portfolio. Service
calculates the Portfolio's NAV and dividends, and maintains the
Portfolio's general accounting records. The costs of these services are
also borne by FMR pursuant to its management contract with the Portfolio.
FMR pays all other expenses of the Portfolio with the following
exceptions: the payment of fees and expenses of all Trustees of the Trust
who are not "interested persons" of the Trust or FMR; interest on
borrowings; taxes; brokerage commissions (if any); and such nonrecurring
expenses as may arise, including costs of litigation to which the
Portfolio may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to ^ litigation.
^ For these services and FMR's payment of the Portfolio's
expenses, the Portfolio pays a monthly management fee to FMR at the annual
rate of .42% of the average net assets of the Portfolio throughout the
month pursuant to a management contract approved by shareholders on
October 26, 1989. The management fee paid to FMR ^ is reduced by an
amount equal to the fees and expenses of those Trustees who are not
"interested persons" of the Trust or FMR. For the twelve month ^ periods
ended August 31, 1994 and August 31, 1993, and the ten month period ended
August 31, 1992,^ the Portfolio paid $___________, $6,976,761, and
$5,039,309^ in management fees, respectively, before reduction for ^ fees
and expenses of the non-interested Trustees.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with
FMR Texas pursuant to which FMR Texas has primary responsibility for
providing portfolio investment management services to the Portfolio. Under
the sub-advisory agreement, FMR pays FMR Texas fees equal to 50% of the
management fee payable to FMR under its current management contract with
the Portfolio. The fees paid to FMR Texas are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect from
time to time. For the twelve month ^ periods ended August 31, 1994 and
August 31, 1993, and the ten month period ended August 31, 1992,^ FMR paid
FMR Texas fees that amounted to $________, $3,482,286, and $2,515,800, ^
respectively.
^
The Portfolio has a Distribution Agreement with Distributors,^ a
Massachusetts corporation organized on July 18, 1960^. Distributors is a
broker-dealer registered under the Securities Exchange Act of 1934 and is
a member of the National Association of Securities Dealers, Inc. The
Distribution Agreement calls for Distributors to use all reasonable
efforts, consistent with its other business, to secure purchasers for
shares of the ^ Portfolios, which are continuously offered. Promotional
- 24 -
<PAGE>
and administrative expenses in connection with the offer and sale of
shares are paid by FMR.
^
DISTRIBUTION AND SERVICE PLAN
The Board of Trustees, on behalf of the Portfolio, has adopted a
Distribution and Service Plan (the Plan) ^ pursuant to Rule 12b-1 ^ under
the 1940 Act (the Rule). The Rule provides in substance that a mutual
fund may not engage directly or indirectly in financing any activity that
is primarily intended to result in the sale of shares of the ^ fund except
pursuant to a plan adopted by the ^ fund under the Rule. The Trust's
Board of Trustees ^ has adopted the Plan to allow the Portfolio and FMR to
incur certain expenses that might be considered to constitute indirect
payment by the Portfolio of distribution expenses. Under the Plan, if the
payment of management fees by the Portfolio to FMR is deemed indirect
financing by the Portfolio ^ of the distribution of its shares, such
payment is authorized by the Plan.
The Plan specifically recognizes that FMR, either directly or
through Distributors, may use its management fee revenue, past profits or
other resources, without limitation, to pay promotional and administrative
expenses in connection with the offer and sale of shares of the Portfolio.
^ In addition, the Plan provides that FMR may use its resources, including
its management fee revenues, to make payments to third parties that
provide assistance in selling shares of the Portfolio or to third parties,
including banks, that render shareholder support services. The Trustees
have not yet authorized ^ such payments to date^.
As required by the Rule, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan prior to its
approval, and have determined that there is a reasonable likelihood that
the Plan will benefit the Portfolio and its shareholders. ^ In
particular, the Trustees noted that the Plan does not authorize payments
by the Portfolio other than those made to FMR under its ^ management
contract with the Portfolio. To the extent that the Plan gives FMR and
Distributors greater flexibility in connection with the distribution of
shares of the Portfolio, additional sales of the Portfolio's shares may
result. Additionally, certain shareholder support services may be
provided more effectively under the Plan by local entities with whom
shareholders have other relationships.
The Plan was approved by Fidelity Money Market Trust on September
21, 1994 as the then shareholder of the Portfolio, pursuant to an
Agreement and Plan of Conversion approved by public shareholders of the
Portfolio on September 21, 1994.
- 25 -
<PAGE>
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of
this prohibition under the Glass-Steagall Act has not been clearly defined
^ by the courts or appropriate regulatory agencies, Distributors believes
that the Glass Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping functions.
Distributors intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations pertaining
to the permissible activities of banks and their affiliates or
subsidiaries, as well as further judicial or administrative decisions or
interpretations, could prevent a bank from continuing to perform all or a
part of the contemplated services. If a bank were prohibited from so
acting, the Trustees would consider what actions, if any, would be
necessary to continue to provide efficient and effective shareholder
services. In such event, changes in the operation of the Portfolio might
occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not
expected that shareholders would suffer any adverse financial consequences
as a result of any of these occurrences.^ In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein, and banks and financial institutions may be required to
register as dealers pursuant to state law.
The Portfolio may execute portfolio transactions with and
purchase securities issued by depository institutions that receive
payments under the Plan. No preference for the instruments of such
depository institutions will be shown in the selection of investments.
DESCRIPTION OF THE TRUST
Trust Organization. Retirement Money Market Portfolio is a portfolio of
Fidelity Money Market Trust, an open-end management investment company
originally organized as a Massachusetts business trust by Declaration of
Trust dated August 21, 1978 ^ and amended and restated November 1, 1989.
On October 18, 1994 the Trust was converted to a Delaware business trust
pursuant to an agreement approved by shareholders on September 21, 1994.
The Delaware trust, which was organized on June 20, 1991 under the name of
Fidelity Money Market Trust I, succeeded to the name Fidelity Money Market
Trust on October 18, 1994. Currently there are five portfolios of the
Trust: U.S. Treasury Portfolio^ ; U.S. Government Portfolio^; Domestic
Money Market Portfolio^; Retirement Money Market Portfolio; and Retirement
Government Money Market Portfolio. The ^ Trust Instrument permits the
Trustees to create additional ^ series.
In the event that FMR ceases to be the investment adviser to the Trust or
a portfolio, the right of the Trust or portfolio to use the identifying
name "Fidelity" may be withdrawn.
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<PAGE>
The assets of the Trust, received for the issue or sale of shares of each
portfolio and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to such
portfolio, and constitute the underlying assets of such portfolio. The
underlying assets of each portfolio are segregated on the books of
account, and are to be charged with the liabilities with respect to such
portfolio and with a share of the general expenses of the Trust. Expenses
with respect to the Trust are to be allocated in proportion to the asset
value of the respective portfolios, except where allocations of direct
expense can otherwise be fairly made. The officers of the Trust, subject
to the general supervision of the Board of Trustees, have the power to
determine which expenses are allocable to a given portfolio, or which are
general or allocable to all of the portfolios. In the event of the
dissolution or liquidation of the Trust, shareholders of each portfolio
are entitled to receive as a class the underlying assets of such portfolio
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The Trust is ^ a business trust
organized under Delaware law. Delaware law provides that shareholders
shall be entitled to the same limitations of personal liability extended
to stockholders of private corporations for profit. The courts of some
states, however, may decline to apply Delaware law on this point. The
Trust Instrument contains an express disclaimer of shareholder liability
for the debts, liabilities, obligations, and expenses of the Trust and
requires that a disclaimer be given in each contract entered into or
executed by the Trust or the Trustees ^ . The Trust Instrument provides
for indemnification out of each portfolio's property of any shareholder or
former shareholder held personally liable for the obligations of the
portfolio. The ^ Trust Instrument also provides that each portfolio
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the portfolio and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in
which ^ Delaware law does not apply, no contractual limitation of
liability was in effect, and a portfolio is unable to meet its
obligations. FMR believes that, in view of the above, the risk of
personal liability to shareholders is remote.
The ^ Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, will not be liable ^ to any person other than
the Trust or its shareholders; moreover, the Trustees shall not be liable
for any conduct whatsoever provided that the Trustees are not protected
against any liability to which ^ they would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless disregard
of the duties involved in the conduct of ^ their office.
VOTING RIGHTS. ^ Each portfolio's capital consists of shares of
beneficial interest. As a shareholder, you receive one vote for each
dollar of net asset value you own. The shares have no preemptive or
- 27 -
<PAGE>
conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the Prospectus.
Shares are fully paid and nonassessable, except as set forth under the
heading " Shareholder and Trustee Liability" above. Shareholders
representing 10% or more of the Trust or a ^ portfolio may, as set forth
in the ^ Trust Instrument, call meetings of the Trust or a ^ portfolio for
any purpose related to the Trust or ^ portfolio, as the case may be,
including, in the case of a meeting of the entire Trust, the purpose of
voting on removal of one or more Trustees.
The Trust or any ^ portfolio may be terminated upon the sale of its assets
to, or merger with, another open-end management investment company, or
upon liquidation and distribution of its assets^. Generally such
terminations must be approved by vote of the holders of a majority of the
^ Trust or the portfolio, as determined by the current value of each
shareholder's investment in the portfolio or Trust; however, the Trustees
may, without prior shareholder approval, change the form of organization
of the Trust by merger, consolidation, or incorporation. If not so
terminated or reorganized, the Trust and ^ each portfolio will continue
indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the Trust to merge or consolidate into one or more Trusts,
partnerships, or corporations, or cause the Trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the Trust's registration
statement. Each portfolio may invest all of its assets in another
investment company.
As of ^ September __, 1994 the following owned of record or beneficially ^
5% or more of outstanding shares: [to be added]
CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street,
New York, NY, is custodian of the assets of the Portfolio. The custodian
is responsible for the safekeeping of the Trust's assets and the
appointment of subcustodian banks and clearing agencies. The custodian
takes no part in determining the investment policies of ^ the Portfolio or
in deciding which securities are purchased or sold by the Portfolio. The
Portfolio, however, may invest in obligations of the custodian and may
purchase securities from or sell securities to the custodian.
FMR, its officers and directors and its affiliated companies and the
Trust's Trustees may from time to time have transactions with various
banks, including banks serving as custodians for certain of the portfolios
advised by FMR. Transactions that have occurred to date have included
mortgages and personal and general business loans. In the judgment of
FMR, the terms and conditions of these transactions were not influenced by
existing or potential custodial or other Portfolio relationships.
- 28 -
<PAGE>
AUDITOR. ^_____________, serves as the Trust's independent accountant.
The auditor examines financial statements for the ^ Portfolio and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
The Portfolio's financial statements and financial highlights for the
fiscal year ended August 31, 1994, are included in the Portfolio's annual
report, which is a separate report attached to the prospectus. The
Portfolio's financial statements and financial highlights are incorporated
herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
Portfolio. The Portfolio, may, however, consider the ratings for other
types of investments and the ratings assigned by other rating
organizations when determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER
RATINGS:
Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by the following
characteristics:
o ^ Leading market positions in well established
industries.
o ^ High rates of return on funds employed.
o ^ Conservative capitalization structures with moderate
reliance on debt and ample asset protection.
o ^ Broad margins in earnings coverage of fixed financial
charges and high internal cash generation.
o ^ Well established access to a range of financial markets
and assured sources of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This
will normally be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound,
will be more subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
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<PAGE>
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER RATINGS:
A- Issuers assigned this highest rating are regarded as having
the greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2, and 3 to indicate the relative degree of
safety.
A-1--This designation indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics will be
denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as high as for
issues designated A-1.
- 30 -
<PAGE>
FIDELITY MONEY MARKET TRUST:
RETIREMENT GOVERNMENT MONEY MARKET PORTFOLIO
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Summary of Portfolio Expenses
3 a, b Financial Highlights
c Performance
4 a(i) The Trust and the Fidelity Organization
a(ii), b, c Investment Objective and Policies;
Investment Limitations; Suitability
5 a The Trust and the Fidelity Organization
b, c, d, e The Trust and the Fidelity Organization;
Management Contract, Distribution and
Service Plan; How to Invest, Exchange and
Redeem
f Portfolio Transactions
5A a, b, c *
6 a(i) The Trust and the Fidelity Organization
a(ii) How to Invest, Exchange and Redeem
a(iii), b, c, d *
e Cover Page; How to Invest, Exchange and
Redeem
f, g How to Invest, Exchange and Redeem;
Distribution and Taxes
7 a Management Contract, Distribution and
Service Plan
DC-161510.2
<PAGE>
b(i, ii) How to Invest, Exchange and Redeem
b(iii, iv *
b(v) How to Invest, Exchange and Redeem
c *
d How to Invest, Exchange and Redeem
e, f (i, ii) Management Contracts, Distribution and
Service Plan
f (iii) *
8 a, b, c, d How to Invest, Exchange and Redeem
9 *
* Not Applicable
<PAGE>
Form N-1A Item Number
Part B Statement of Additional Information
10,11 Cover Page
12 Description of the Trust
13 a,b,c Investment Policies and Limitations
d *
14 a,b Trustees and Officers
c *
15 a, b Description of the Trust
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii), b Management Contract; Distribution and
Service Plan
c, d, e *
f Distribution and Service Plan
g *
h Description of the Trust
i Management Contract
17 a Portfolio Transactions
b *
c Portfolio Transactions
d, e *
18 a Description of the Trust
b *
<PAGE>
19 a Additional Purchase and Redemption
Information
b Valuation of Portfolio Securities
c *
20 Taxes
21 a(i,ii) Management Contract; Distribution and
Service Plan
a(iii),b,c *
22 Performance
23 Financial Statements for the Portfolio's
fiscal year ended August 31, 1994 will
be filed by subsequent amendment.
* Not Applicable
<PAGE>
FIDELITY MONEY MARKET TRUST
Retirement Government Money Market Portfolio
PROSPECTUS
^ December 22, 1994
Retirement Government Money Market Portfolio (the Portfolio) is a
diversified portfolio of Fidelity Money Market Trust (the Trust). The
Portfolio seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity by investing in
obligations issued or guaranteed as to principal and interest by the ^
U.S. government, its agencies or instrumentalities and in repurchase
agreements secured by these obligations.
AN INVESTMENT IN THE PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE PORTFOLIO WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF^, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
The Portfolio is generally intended for investors in ^ tax-saving
retirement plans. This Prospectus is designed to provide you with
information before investing and to help you decide if the Portfolio's
goals match your own. Please read and retain this document for future
reference. The Annual Report is ^ attached hereto.
^ To learn more about the Portfolio and its investments, you can obtain a
copy of the Portfolio's most recent financial report and portfolio
listing, or a copy of the Statement of Additional Information ^(SAI) dated
December 22, 1994. The SAI has been filed with the Securities and
Exchange Commission (SEC) and is incorporated herein by reference. ^ For
a free copy of either document, call the appropriate number below.
^
Retirement Plan Accounts
Nationwide (tollfree) 800-544-0276
Financial and Other Institutions
Nationwide (tollfree) 800-843-3001
DC-151354.2
<PAGE>
If you are investing through a retirement plan sponsor or other
institution, refer to your plan materials or contact ^ the institution
directly.
TABLE OF CONTENTS
Summary of Portfolio Expenses . . . . . . . . . . . . . . . . . . . . . .
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
How to Invest, Exchange and Redeem . . . . . . . . . . . . . . . . . . .
Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . .
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Contract, Distribution and Service Plan . . . . . . . . . . .
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- 2 - prospectus
<PAGE>
SUMMARY OF PORTFOLIO EXPENSES
The purpose of the table below is to assist investors in
understanding the various costs and expenses that an investor in the
Portfolio would bear directly or indirectly. This standard format was
developed for use by all mutual funds to help investors make their
investment decisions. This expense information should be considered along
with other important information, such as the Portfolio's investment
objective and past performance. There are no transaction expenses
associated with purchases or sales of the Portfolio's shares.
A. ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees ^.__%
Other Expenses .00
TOTAL OPERATING EXPENSES
^.__%
B. Example: You would pay the following expenses on a $1,000
investment, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
^ $__ $__ $__ $__
EXPLANATION OF TABLE:
A. ANNUAL OPERATING EXPENSES. Annual operating expenses are
based on the Portfolio's expenses for the last fiscal year. Management ^
fees are paid by the Portfolio to Fidelity Management & Research Company
(FMR) for managing its investments and business affairs. FMR is
responsible for the payment of all of the expenses of the Portfolio with
the exception of certain limited expenses. Management fees and other
expenses already have been reflected in the Portfolio's share price and
dividends and are not charged directly to individual shareholder accounts.
Please refer to the section "Management Contract, Distribution and Service
Plan" on page 15 for further information.
B. EXAMPLE OF EXPENSES. The hypothetical example illustrates
the expenses associated with a $1,000 investment over periods of 1, 3, 5
and 10 years, based on the expenses in the table and an assumed annual
rate of return of 5%. ^ THE RETURN OF 5% AND EXPENSES SHOULD NOT BE
CONSIDERED INDICATIONS OF ACTUAL OR EXPECTED PORTFOLIO PERFORMANCE OR
EXPENSES, BOTH OF WHICH MAY VARY.
FINANCIAL HIGHLIGHTS
- 3 - prospectus
<PAGE>
The ^ table that follows is included in the Portfolio's Annual
Report and has been audited by _____________, independent accountants.
Their report on the financial statements and financial highlights is
included in the Annual Report. The financial statements and financial
highlights are part of this Prospectus.
[Financial Statements and Financial Highlights to be filed by subsequent
amendment.]
- 4 - prospectus
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
Retirement Government Money Market Portfolio's investment
objective is to obtain as high a level of current income as is consistent
with the preservation of capital and liquidity. FMR will buy obligations
for the Portfolio consistent with ^ its investment objective, and which
meet the quality standards established for the Portfolio. The Portfolio's
investment objective is fundamental and may not be changed without the
affirmative vote of a majority of the outstanding shares of the Portfolio.
No assurance can be made that the Portfolio will achieve its objective,
but it will follow the investment style described in the following
paragraphs.
The Portfolio invests only in obligations issued or guaranteed as
to principal and interest by the U.S. government or by any of its agencies
or instrumentalities. The Portfolio may ^ engage in short sales against
the box, repurchase agreements and in reverse repurchase agreements with
respect to such obligations. The Portfolio itself is not guaranteed by the
U.S. government.
U.S. Treasury notes and bills and certain agency securities, such
as those issued by the Federal Housing Administration, are backed by the
full faith and credit of the U.S. government. The Portfolio also may
invest in securities issued by government agencies or instrumentalities
(such as executive departments of the government or independent federal
organizations supervised by Congress), which may have different degrees of
government backing but which are not backed by the full faith and credit
of the U.S. government. For example, securities issued by the Federal Farm
Credit Bank System and the Federal National Mortgage Association are
supported by the agency's right to borrow money from the U.S. Treasury
under certain circumstances. However, securities issued by the Financing
Corporation are supported only by the credit of the entity that issued
them. There is no guarantee that the U.S. government will support U.S.
government agency securities, and, accordingly, they may involve a risk of
nonpayment of principal and interest.
MATURITY. The Portfolio must limit its investments to securities
with remaining maturities of 397 days or less and must maintain a
dollar-weighted average maturity of 90 days or less.
INVESTMENT LIMITATIONS. The following summarizes the Portfolio's
principal investment limitations. A complete listing is contained in the
SAI.
1 With respect to 75% ^ of its total assets, ^ the Portfolio may
not invest more than 5% of its total assets in the securities of any one
issuer (other than U.S. government securities).
- 5 - prospectus
<PAGE>
2. The Portfolio may not purchase the securities of any issuer
(other than U.S. government securities), if as a result, more than 25% of
its total assets would be invested in issuers whose principal business
activities are in the same industry.
3. The Portfolio may (a) borrow money for temporary or emergency
purposes and (b) engage in reverse repurchase agreements for any purpose;
provided that (a) and (b) in combination do not exeed 33 1/3% of its total
assets, (c) may borrow money from a bank or from other funds advised by
FMR or an affiliate or by engaging in reverse repurchase agreements and
(c) may not purchase securities when borrowings (other than reverse
repurchase agreements) exceed ^ 5% of its total assets.
Except for the Portfolio's investment objective and ^ limitation
^ 1, 2, 3(a), and 3(b), the investment policies described in this
Prospectus are not fundamental. Non-fundamental investment policies may
be changed without shareholder approval. Fundamental investment policies
may not be changed without the affirmative vote of a majority of the
outstanding shares of the Portfolio. Except for the percentage limitation
(a) above, these limitations and policies are considered at the time of
purchase; the sale of securities is not required in the event of a
subsequent change in circumstances. A complete listing of the Portfolio's
investment limitations is contained in the ^ SAI.
SUITABILITY. The Portfolio's ability to achieve its investment
objective depends on the quality and maturity of its investments. Although
the Portfolio's investment policies are designed to help maintain a stable
$1.00 share price, all money market instruments can change in value when
interest rates or issuers' creditworthiness change, or if an issuer or
guarantor of a security fails to pay interest or principal when due. If
these changes in value were large enough, the Portfolio's share price
could fall below $1.00. In general, securities with longer maturities are
more ^ sensitive to interest rate changes than are short-term securities,
although long-term securities may provide higher yields.
If you seek income at current money market rates while remaining
conveniently liquid, the Portfolio may be appropriate for you. It provides
the added safety of investments in U.S. government and agency obligations.
The Portfolio generally is designed for investors in tax-saving retirement
plans such as Defined Contribution Plans, 403(b) Custodial Accounts,
Defined Benefit Plans and 457 Plans. Minimum investments for these plans
may differ from those listed on page__.
By itself, the Portfolio does not constitute a balanced
investment plan; its objective stresses income with preservation of
- 6 - prospectus
<PAGE>
capital and liquidity, and not the higher yields or capital appreciation
that may be available from more aggressive investments.
HOW TO INVEST, EXCHANGE AND REDEEM
Shares of the Portfolio are offered continuously and may be
purchased at the next determined net asset value per share (NAV) ^ after
an order is received and accepted. The Portfolio's shares are sold without
a sales charge, although institutions may charge their clients fees in
connection with purchases and sales for the accounts of their clients. The
NAV of the Portfolio is determined by adding the value of all securities
and other assets of the Portfolio, deducting its actual and accrued
liabilities, and dividing by the number of shares outstanding. The
Portfolio values its securities on the basis of amortized cost. Fidelity
Service Co. (Service), calculates ^ NAV at the close of the Portfolio's
business day, which coincides with the close of business of the New York
Stock Exchange (NYSE), normally 4:00 p.m. Eastern Time (4 p.m.). (See the
holiday schedule on page ^ 12.) You begin to earn dividends as of the
first business day following the day of your purchase.
MINIMUM INVESTMENT AND ACCOUNT BALANCE. The minimum initial
investment to establish a new account in the Portfolio is $100,000.
Subsequent investments may be in any amount. If you want to keep your
account open, please leave $100,000 in it. If your account balance falls
below $100,000 due to redemption, your account may be closed and the
proceeds mailed to you at the record address. You will be given 30 days'
notice that your account will be closed unless you make an additional
investment to increase your account balance to the $100,000 minimum. The
minimum investment requirements may differ or may not apply to
participants of tax-saving retirement plans.
If you are purchasing shares of the Portfolio through a
program of services offered by a securities dealer,
financial or other institution, you should read the
program materials in conjunction with this Prospectus.
Certain features of the Portfolio ^ may be modified in
these programs and administrative charges may be imposed
for the services rendered.
If you invest in this Portfolio through an employer-
sponsored retirement plan, some of the instructions,
shareholder services and phone numbers that follow will
not apply. Speak to ^ your institutional representative
for additional information.
HOW TO INVEST. An initial investment in the Portfolio must be
preceded or accompanied by a completed, signed application.^ Additional
paperwork may be required from corporations, associations and certain
fiduciaries.
- 7 - prospectus
<PAGE>
TO INVEST BY MAIL. You must send a check payable to Fidelity
Money Market Trust: Retirement Government Money Market Portfolio, together
with a completed application, to:
Fidelity Money Market Trust:
Retirement Government Money Market Portfolio
c/o Fidelity Institutional Retirement Services Company
P.O. Box 650488
Dallas, TX 75265-0488
All of your purchases must be made in U.S. dollars, and checks
must be drawn on U.S. banks. No cash will be accepted. If you make a
purchase with more than one check, each check must have a value of at
least $50, and the minimum investment requirement still applies. The
Portfolio reserves the right to limit the number of checks processed at
one time. If your check does not clear, your purchase will be cancelled
and you could be held liable for any losses and/or fees incurred.
TO INVEST BY WIRE. You may purchase shares of the Portfolio by
wire. The Portfolio requires notification of all wire purchases. Prior to
making an initial investment, investors must call the institution through
which they trade or:
o RETIREMENT PLAN ACCOUNTS: call Retirement Trading at 1-
800-962-1375 for wire information and instructions ^ by
the close of the Portfolio's business day (4 p.m.) to
advise them of the wire and to place the trade.
o FINANCIAL AND OTHER INSTITUTIONS: call Client Services at
1-800-843-3001 for wire information and instructions by
the close of the Portfolio's business day (4 p.m.) to
advise them of the wire and to place the trade.
In addition to the Portfolio's holiday schedule, (see page ^ 12)
shares cannot be purchased by wire on Dr. Martin Luther King, Jr. Day
(observed), Columbus Day (observed), Veterans' Day (observed) or during
any unscheduled closings of the Federal Reserve Wire System.
Investments made by wire receive the NAV next determined as of
the day the order is received if federal funds, or monies immediately
convertible to federal funds, are received by the following business day
prior to the close of the NYSE (normally 4 p.m.). Investors are entitled
to the income dividend declared on the day the investor's federal funds
are accepted by the Portfolio's custodian wire bank. It is recommended
that investors wire funds early in the day to ensure proper credit.
HOW TO EXCHANGE. An exchange is a convenient way to buy shares of
the Portfolio or other Fidelity funds. The Fidelity family of funds has a
variety of investment objectives. You may exchange shares of this
Portfolio for shares of other Fidelity funds (subject to the minimum
- 8 - prospectus
<PAGE>
initial investment requirement) that are registered in your state. When
making an exchange, the name, address and tax identification numbers of
the two accounts must be identical. Investors must consult the prospectus
of the fund to be acquired to determine eligibility and suitability. To
protect the Portfolio's performance and shareholders, Fidelity discourages
frequent trading in response to short-term market fluctuations. In
particular, exchanges that coincide with "market timing" strategies can
have adverse effects on the funds.
You may exchange all or any part of the value of your accounts on
any business day. There is currently no limit on exchanges out of the
Portfolio^; however, exchange limits may apply to other funds. Exchanges
may be requested in writing or by telephone and are effected at the NAV
next determined after receipt of the exchange request. If you exchange
into a fund with a sales charge, you pay the percentage difference between
that fund's sales charge and any sales charge you already have paid in
connection with the shares you are exchanging. This may not apply if you
are investing through a tax-saving retirement plan.
Each exchange actually represents the sale of shares of one fund
and the purchase of shares in another, which may produce a gain or loss
for tax purposes. A confirmation of each exchange transaction will be sent
to you. In order to allow FMR to manage the Portfolio most effectively,
you are strongly urged to initiate exchanges of shares as early in the day
as possible.
TO EXCHANGE BY TELEPHONE. Exchanges may be requested by calling:
Retirement Plan Accounts 800-962-1375
Financial and Other Institutions 800-843-3001
TO EXCHANGE BY MAIL. Written requests for exchanges should
contain the Portfolio name, account number and number of shares to be
redeemed, and the ^ name of the fund whose shares ^ are being purchased.
The request must be signed by a person authorized to act on behalf of the
account. Letters should be sent to:
Fidelity Money Market Trust:
Retirement Government Money Market Portfolio
c/o Fidelity Institutional Retirement Services Company
P.O. Box 650488
Dallas, TX 75265-0488
The Portfolio reserves the right at any time without prior notice
to refuse exchange purchases by any person or group if, in FMR's judgment,
the Portfolio would be unable to invest effectively in accordance with its
investment objective and policies or would otherwise potentially be
adversely affected. The Portfolio may terminate or modify the exchange
privilege in the future.
- 9 - prospectus
<PAGE>
HOW TO REDEEM. You may redeem all or a portion of your shares on
any business day. Your shares will be redeemed at the next determined NAV
calculated after the Portfolio has received and accepted your redemption
request. When you redeem shares, the Portfolio normally will send you the
proceeds on the next business day. Shares will earn dividends through the
date of redemption; however, shares redeemed on a Friday or prior to a
holiday will continue to earn dividends until the next business day. The
Portfolio may hold payment on redemptions until it is reasonably satisfied
that investments made by check have been collected (which could take up to
seven days).
TO REDEEM BY WIRE. The wiring of redemption proceeds is available
only to investors who have previously established a wire account. In
addition to the Portfolio's holiday schedule, (see page ^ 12) shares
cannot be redeemed by wire on Dr. Martin Luther King, Jr. Day (observed),
Columbus Day (observed), Veteran's Day (observed) or during any
unscheduled closings of the Federal Reserve Wire System. Shares redeemed
will not receive the dividend declared on the day of redemption.
TO REDEEM BY MAIL. Send a letter of instruction with your
signature(s) guaranteed to the address given above. The letter should
specify the name of the Portfolio, the number of shares to be redeemed,
your name, your account number, and should include the additional
requirements listed below that apply to your particular account.
- 10 - prospectus
<PAGE>
Type of Registration Requirements
Individual, Joint Tenants, Letter ^ of instruction signed by all
Sole Proprietorship, person(s) required to sign for the account
Custodial (Uniform Gifts exactly as it is registered, accompanied
or Transfers to Minors by signature guarantee(s).
Act), General Partners
Corporations^, Letter of instruction and a corporate
Associations resolution, signed by all person(s)
required to sign for the account exactly
as it is registered accompanied by
signature guarantee(s).
Trusts A letter of instruction signed by the
Trustee(s) with a signature guarantee. (If
the Trustee's name is not registered on
your account, also provide a copy of the
trust document, certified within the last
60 days.)
If you do not fall into any of these registration categories,
(e.g., Executors, Administrators, Conservators, Guardians) please call
Client Administration for further instructions.
A signature guarantee is a widely accepted way to protect you and
Fidelity Investments Institutional Operations Company (FIIOC) by verifying
the signature on your redemption request; it may not be provided by a
notary public. Signature guarantees will be accepted from banks, brokers,
dealers, municipal securities dealers, municipal securities brokers,
government securities dealers, government securities brokers, credit
unions (if authorized under state law), national securities exchanges,
registered securities associations, clearing agencies and savings
associations.
TO REDEEM BY TELEPHONE. You may redeem shares of the Portfolio by
instructing FIIOC to have the proceeds of redemptions wired directly to
your designated bank account(s). To redeem by telephone call FIIOC before
4 p.m.:
Retirement Plan Accounts 800-962-1375
Financial and Other Institutions 800-843-3001
Provided that your account registration has not changed within the last 60
days, you may redeem shares of the Portfolio worth $25,000 or less by
calling Institutional Trading. Redemption proceeds will be sent to the
record address.
If making immediate payment could adversely affect the Portfolio,
it may take up to seven (7) days to pay you. Also, when the NYSE is closed
- 11 - prospectus
<PAGE>
(or when trading is restricted) for any reason other than its customary
weekend or holiday closings, or under any emergency circumstances as
determined by the SEC to merit such action, the Portfolio may suspend
redemption or postpone payment dates. If you are unable to execute your
transaction by telephone (for example, during times of unusual market
activity), consider placing your order by mail.
In order to allow FMR to manage the Portfolio most effectively,
investors are strongly urged to initiate redemptions of shares as early in
the day as possible and to notify the Portfolio at least one day in
advance of large redemptions.
ADDITIONAL INFORMATION. You may initiate many transactions by
telephone. Note that Fidelity will not be responsible for any losses
resulting from unauthorized transactions if it follows reasonable
procedures designed to verify the identity of the caller. Fidelity will
request personalized security codes or other information, and may also
record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
The Portfolio reserves the right to suspend the offering of
shares for a period of time. The Portfolio also reserves the right to
reject any specific purchase order, including certain purchases by
exchange (see "How to Exchange" on page ^ 8). Purchase orders may be
refused if, in FMR's opinion, they are of a size that would disrupt
management of the Portfolio.
SHAREHOLDER SERVICES
TAX-SAVING RETIREMENT PLANS. Fidelity can set up your new account
in the Portfolio under one of several tax-sheltered plans. These plans let
you save for retirement and shelter your investment income from current
taxes. Minimums may differ from those listed on page 7 and the
corresponding information may not apply. Retirement plan participants
should refer to their retirement plan's guidelines for further
information.
o DEFINED CONTRIBUTION PLANS such as 401(k), company
sponsored IRA programs, Thrift, Keogh or Corporate
Profit-Sharing or Money-Purchase Plans: open to self-
employed people and their partners or to corporations, to
benefit themselves and their employees.
o 403(B) CUSTODIAL ACCOUNTS: open to employees of most
non-profit organizations.
- 12 - prospectus
<PAGE>
o DEFINED BENEFIT PLANS: open to corporations of all sizes
to benefit their employees.
o 457 PLANS: open to employees of most government agencies.
CHOOSING A DISTRIBUTION OPTION
When you fill out the application for your account, you can
choose from two distribution options.
A. The SHARE OPTION reinvests your distributions in
additional shares. You are assigned this option automatically if you make
no choice on your application.
B. The INCOME-EARNED OPTION distributes all dividends in
cash to you.
Participants in the above mentioned tax-saving retirement plans can elect
to take their distributions in kind and establish an IRA rollover account
^ in the Portfolio.
SUBACCOUNTING AND SPECIAL SERVICES. Special processing has been
arranged with FIIOC for banks, corporations and other institutions that
wish to open multiple accounts (a master account and subaccounts). An
investor wishing to utilize FIIOC's subaccounting facilities or other
special services for individual or multiple accounts may be required to
enter into a separate agreement with FIIOC. Charges for these services, if
any, will be determined on the basis of the level of services to be
rendered. Subaccounts may be opened with the initial investment or at a
later date and may be established by an investor with registration either
by name or by number.
The Portfolio pays for shareholder services, but not for special
services, such as a request for a historical transcript of an account. You
may be required to pay a fee for these special services.
STATEMENTS AND REPORTS. The Portfolio will send a statement of
your account after every transaction that affects your share balance or
your account registration. The Portfolio does not issue share
certificates. Dividend statements are mailed quarterly. At least twice a
year you will receive financial statements of the Portfolio. To reduce
expenses, only one copy of most fund reports (such as the Portfolio's ^
Annual Report) will be mailed to your household. Write to the Portfolio if
you need to have additional reports sent each time.
FIDELITY INVESTMENTS RATES AND YIELDS SERVICES LINE^ is
Fidelity's around-the-clock telephone service that lets existing customers
use a push button phone with tone capabilities to obtain prices and yields
- 13 - prospectus
<PAGE>
of Fidelity funds. For more information about this service contact Client
Administration.
HOLIDAY SCHEDULE. The Portfolio is open for business and its NAV
is calculated every day the NYSE is open for trading. The NYSE has
designated the following holiday closings for ^ 1994: Presidents' Day,
Good Friday, Memorial Day^, Independence Day^, Labor Day, Thanksgiving
Day, and Christmas Day. Although FMR expects the same holiday schedule,
with the addition of New Year's Day, to be observed in the future, the
NYSE may modify its holiday schedule at any time. On any day ^ that the
NYSE closes early, or as permitted by the SEC, or on any day that the
principal government securities markets close early, such as on days in
advance of holidays generally observed by participants in such markets,
the right is reserved to advance the time on that day by which purchase
and redemption requests must be received. To the extent that ^ portfolio
securities are traded in other markets on days the NYSE is closed, the
Portfolio's NAV may be affected on days when investors ^ do not have
access to the Portfolio to purchase or redeem shares. Certain ^ Fidelity
funds may follow different holiday ^ schedules.
DISTRIBUTIONS AND TAXES
The Portfolio ordinarily declares dividends from net investment
income daily and pays such dividends monthly. The Portfolio intends to
distribute substantially all of its net investment income and capital
gains, if any, to shareholders within each calendar year as well as on a
fiscal year basis.
FEDERAL TAXES. Dividends derived from net investment income and
short-term capital gains are taxable as ordinary income. The Portfolio's
distributions are taxable when they are paid, whether you take them in
cash or reinvest them in additional shares, except that distributions
declared in December and paid in January are taxable as if paid on
December ^ 31. The Portfolio will send you an ^ Internal Revenue Service
(IRS) Form 1099-DIV by January ^ 31 showing your taxable distributions for
the past calendar year.
STATE AND LOCAL TAXES^. Mutual fund dividends from ^ U.S.
government securities generally are free from state and local income
taxes. ^ However, particular states may limit this benefit, and some ^
types of securities, such as repurchase agreements and ^ some agency
backed securities, may not qualify for the ^ benefit. Some states may
impose intangible property taxes.
^
OTHER TAX INFORMATION. The information above is only a summary of
some of the ^ tax consequences generally affecting the Portfolio and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal tax, ^ shareholders may be subject
- 14 - prospectus
<PAGE>
to state or local taxes on ^ their investments. Investors should consult
their tax advisors for details and up-to-date information on the tax laws
in their state to determine whether the Portfolio is suitable to their
particular tax situation.
When you sign your account application, you will be asked to
certify that your Social Security or taxpayer identification number is
correct and that you are not subject to 31% backup withholding for failing
to report income to the IRS. If you violate IRS regulations, the IRS can
require the Portfolio to withhold 31% of distributions from your account.
Your tax situation may be different if you are investing through a
tax-saving retirement plan. Contact your tax adviser or plan administrator
for further information.
PORTFOLIO TRANSACTIONS
Money market obligations generally are traded in the ^ over-the-counter
market through broker-dealers. A broker-dealer is a securities firm or
bank which makes a market for securities by offering to buy at one price
and sell at a slightly higher price. The difference between the prices is
known as a spread. Since FMR trades, directly or through affiliated
sub-advisers, a large number of securities, including those of Fidelity's
other funds, broker-dealers are willing to work with the Portfolio on a
more favorable spread than would be possible for most individual
investors.
The Portfolio has authorized FMR to allocate transactions to some
broker-dealers who help distribute the shares of the Portfolio or shares
of Fidelity's other funds to the extent permitted by law, and on an agency
basis to an affiliate, Fidelity Brokerage Services, Inc. (FBSI). FMR will
allocate such transactions if commissions are comparable to those charged
by non-affiliated qualified broker-dealers for similar services.
Higher commissions may be paid to those firms that provide
research services to the extent permitted by law. FMR also is authorized
to allocate brokerage transactions to FBSI in order to secure from FBSI
research services produced by third party, independent entities. FMR may
use this research information in managing the Portfolio's assets, as well
as assets of other clients.
PERFORMANCE
The Portfolio advertises its YIELD and EFFECTIVE YIELD in
advertisements or in reports or other communications to shareholders. Both
yield figures are based on historical earnings and are not intended to
indicate future performance.
The Portfolio's yield refers to the income generated by an
investment in the Portfolio over a seven-day period expressed as an annual
percentage rate. The Portfolio also may calculate an EFFECTIVE YIELD by
- 15 - prospectus
<PAGE>
compounding the base period return over a one- year period. The effective
yield, although calculated similarly, will be slightly higher than the
yield because it assumes that income earned from the investment is
reinvested (i.e., the compounding effect of reinvestment). For the
seven-day period ended August 31, ^ 1994, the Portfolio's yield was ^
x.xx% and its effective yield was ^ x.xx%.
The Portfolio's TOTAL RETURN is based on the overall dollar or
percentage change in value of a hypothetical investment in the Portfolio
and assumes all distributions are reinvested.
A CUMULATIVE TOTAL RETURN reflects the Portfolio's performance
over a stated period of time.
An AVERAGE ANNUAL TOTAL RETURN reflects the hypothetical annually
compounded rate that would have produced the same cumulative total return
if the Portfolio's performance had been constant over the entire period.
Because average annual returns tend to smooth out variations in the
Portfolio's return, investors should recognize that they are not the same
as actual year-by-year results.
MANAGEMENT CONTRACT, DISTRIBUTION AND SERVICE PLAN
MANAGEMENT CONTRACT. For managing its investments and business
affairs, the Portfolio pays a monthly management fee to FMR at the annual
rate of .42% of the average net assets of the Portfolio throughout the
month. FMR pays all expenses of the Portfolio with the following
exceptions: the payment of fees and expenses of all Trustees of the Trust
who are not "interested persons" of the Trust or FMR; brokerage fees or
commissions (if any); interest on borrowings; taxes; and such
extraordinary non- recurring expenses as may arise, including litigation
to which the Portfolio may be a party. The management fee will be reduced
by the ^ fees and expenses of those Trustees who are not " interested
persons" of the Trust paid by the Portfolio. For the fiscal year ended
August 31, ^ 1994, the Portfolio paid FMR ^ $x,xxx,xxx in management fees
before reduction for ^ the fees and expenses of the non-interested members
of the Board of Trustees.
FMR has entered into a sub-advisory agreement with FMR Texas Inc.
(FMR Texas), under which FMR Texas has primary responsibility for
providing portfolio investment management services, while FMR retains
responsibility for providing other management services. Under the terms of
the agreement, FMR pays FMR Texas fees equal to 50% of the management fees
payable to FMR under its current management contract with the Portfolio.
The fees paid to FMR Texas are not reduced by any voluntary or mandatory
expense reimbursements that may be in effect from time to time.
FIIOC performs transfer agency, dividend disbursing and
shareholder servicing functions for the Portfolio. Service calculates the
Portfolio's NAV and dividends, and maintains the Portfolio's general
accounting records. The costs of providing these services are borne by FMR
- 16 - prospectus
<PAGE>
pursuant to its ^ management contract with the Portfolio. Both FIIOC and
Service are affiliates of FMR.
FMR may, from time to time, agree to reimburse the Portfolio for
expenses above a specific percentage of average net assets. FMR retains
the ability to be repaid by the Portfolio for these expense reimbursements
in the amount that expenses fall below the limit prior to the end of the
fiscal year. Fee reimbursements by FMR will increase the Portfolio's
yield, and subsequent repayment by the Portfolio will lower its yield.
DISTRIBUTION AND SERVICE PLAN. The ^ Board of Trustees, on behalf
of the ^ Portfolio, has adopted a Distribution and Service Plan (the Plan)
^ pursuant to Rule 12b-1 (the Rule) ^ under the Investment Company Act of
1940 (1940 Act). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is intended
primarily to result in the sale of shares of the fund except pursuant to a
plan adopted by the fund under the Rule. No separate payments are
authorized to be made by the Portfolio under the Plan. Rather, the Plan
recognizes that FMR may use its management fee or other resources to pay
expenses associated with activities primarily intended to result in the
sale of the Portfolio's shares^.
THE TRUST AND THE FIDELITY ORGANIZATION. The Portfolio is a
diversified portfolio of Fidelity Money Market Trust, an open-end,
management investment company organized as a ^ Delaware business trust by
a Trust Instrument dated June 20, 1991. The Board of Trustees of the Trust
supervises Trust activities and reviews contractual arrangements with
companies that provide the Portfolio with services. The Trust is not
required to hold annual shareholder meetings, although special meetings
may be called for a specific Portfolio or the Trust as a whole for
purposes such as electing or removing Trustees, changing fundamental
investment policies, or approving a new or amended management contract. As
a shareholder, ^ the number of votes you are entitled to is based on the
dollar value of your investment.
Fidelity Investments is one of America's largest investment
management organizations and has its principal business address at 82
Devonshire Street, Boston, MA 02109. It is composed of a number of
different subsidiaries and divisions which provide a variety of financial
services and products. The Trust employs various Fidelity companies to
perform certain activities required for its operation.
FMR is the original Fidelity company, founded in 1946. It
provides a number of mutual funds and other clients with investment
research and portfolio management services. FMR maintains a large staff of
experienced investment personnel and a full complement of related support
facilities. As of August 31, ^ 1994, FMR advised funds having more than ^
xx million shareholder accounts with a total value of more than ^ $xxx
billion. Fidelity Distributors Corporation (Distributors) distributes
shares for the Fidelity funds.
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<PAGE>
FMR Corp. is the ultimate parent company ^ of FMR and FMR Texas.
Through ownership of voting common stock, members of the Edward C. Johnson
3d ^ family form a controlling group with respect to FMR Corp. Changes
may occur in the Johnson family group, through death or disability, which
would result in changes in each individual family members' holding of
stock. Such changes could result in one or more family members becoming
holders of over 25% of the stock. FMR Corp. has received an opinion of
counsel that changes in the composition of the Johnson family group under
these circumstances would not result in the termination of the Portfolio's
management or distribution contracts and, accordingly, would nor require a
shareholder vote to continue operation under those contracts.
APPENDIX
The following paragraphs provide a brief description of
securities in which the Portfolio may invest and transactions it may make.
The Portfolio is not limited by this discussion, however, and may purchase
other types of securities and enter into other types of transactions if
they are consistent with the Portfolio's investment objective and
policies.
A complete listing of the Portfolio's policies and limitations
and more detailed information about the Portfolio's investments are
contained in the Portfolio's SAI. Current holdings and recent investment
strategies are described in the Portfolio's financial report, which is
sent to shareholders twice a year.
DELAYED DELIVERY TRANSACTIONS. The Portfolio may buy and sell
securities on a when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The market value of securities
purchased in this way may change before the delivery date, which could
affect the market value of the Portfolio's assets. Ordinarily, the
Portfolio will not earn interest on securities purchased until they are
delivered.
ILLIQUID INVESTMENTS.^ Under the supervision of the Board of
Trustees, FMR determines the liquidity of the Portfolio's investments. The
absence of a trading market can make it difficult to ascertain a market
value for illiquid investments. It may be difficult or impossible for the
Portfolio to sell illiquid investments promptly at an acceptable price.
INTERFUND BORROWING PROGRAM. The Portfolio has received
permission from the SEC to lend money to and borrow money from other funds
advised by FMR or its affiliates, but it will participate in the interfund
borrowing program only as a borrower. Interfund loans normally will extend
overnight, but can have a maximum duration of seven days. The Portfolio
will borrow through the program only when the costs are equal to or lower
than the cost of bank loans. The Portfolio will not borrow through the
program if, after doing so, total outstanding borrowings would exceed 15%
- 18 - prospectus
<PAGE>
of total assets. Loans may be called on one day's notice, and the
Portfolio may have to borrow from a bank at a higher interest rate if an
interfund loan is called or not renewed.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio
buys a security at one price and simultaneously agrees to sell it back at
a higher price. In the event of the bankruptcy of the other party to a
repurchase agreement the Portfolio could experience delays in recovering
its cash. To the extent that, in the meantime, the value of the securities
purchased had decreased, the Portfolio could experience a loss. In all
cases, FMR must find the creditworthiness of the other party to a
transaction satisfactory.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement,
the Portfolio temporarily transfers possession of a portfolio instrument
to another party, such as a bank or broker- dealer, in return for cash. At
the same time, the Portfolio agrees to repurchase the instrument at an
agreed upon price and date. The Portfolio expects that it will engage in
reverse repurchase agreements for temporary purposes such as funding
redemptions, or when it is able to invest the cash so acquired at a rate
higher than the cost of the agreement. Reverse repurchase agreements may
increase the risk of fluctuation in the market value of the Portfolio's
assets or its yield.
STRIPPED GOVERNMENT SECURITIES are created by separating the
income and principal components of a debt instrument and selling them
separately. The Portfolio may purchase U.S. Treasury STRIPS (Separate
Trading of Registered Interest and Principal of Securities), that are
created when the coupon payments and the principal payment are stripped
from an outstanding Treasury bond by the Federal Reserve Bank of New York.
VARIABLE OR FLOATING RATE OBLIGATIONS ^ provide for periodic
adjustments of the interest rates paid. Floating rate obligations have
interest rates that change whenever there is a change in a designated base
rate, while variable rate obligations provide for a specified periodic
adjustment in the interest rate. These formulas are designed to result in
a market value for the instrument that approximates its par value. When
determining the maturity of a variable or floating rate ^ obligation, the
^ Portfolio may look to the date the demand feature can be exercised, or
to the date the interest rate is readjusted, rather than to the final
maturity of the ^ obligation.
- 19 - prospectus
<PAGE>
RETIREMENT GOVERNMENT MONEY MARKET PORTFOLIO
A Portfolio of Fidelity Money Market Trust
STATEMENT OF ADDITIONAL INFORMATION
^ December 22, 1994
This Statement of Additional Information (SAI) is not a
prospectus but should be read in conjunction with the Portfolio's current
Prospectus (dated ^ December 22, 1994). Please retain this ^ document for
future reference. To obtain an additional ^ copy of the Portfolio's
Prospectus ^ and Annual Report ^, please call:
Retirement Plan Accounts^
800-544-0276
Financial and Other Institutions^
800-843-3001
TABLE OF CONTENTS PAGE
Investment Policies and Limitations . . . . . . . . . . . . . . . . . . .
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation of Portfolio Securities . . . . . . . . . . . . . . . . . . . .
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Purchase and Redemption Information . . . . . . . . . . . . .
Distribution and Taxes . . . . . . . . . . . . . . . . . . . . . . . . .
FMR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . . .
Management and Service Contracts . . . . . . . . . . . . . . . . . . . .
Distribution and Service Plan . . . . . . . . . . . . . . . . . . . . . .
Description of the Trust . . . . . . . . . . . . . . . . . . . . . . . .
Investment Adviser
------------------
Fidelity Management & Research Company (FMR)
Sub-Adviser
-----------
FMR Texas Inc. (FMR Texas)
Distributor
-----------
Fidelity Distributors Corporation (Distributors)
DC-151363.2
<PAGE>
Transfer Agent
--------------
Fidelity Investments Institutional Operations Company (FIIOC)
Custodian
---------
Morgan Guaranty Trust Company of New York^
- 2 -
<PAGE>
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth
in the Prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of the Portfolio's assets that
may be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation will
be determined immediately after and as a result of the Portfolio's
acquisition of such security or other asset. Accordingly, any subsequent
change in values, net assets or other circumstances will not be considered
when determining whether the investment complies with the Portfolio's
investment policies and limitations.
The Portfolio's fundamental investment policies and limitations
can not be changed without approval by a "majority of the outstanding
voting securities" (as defined in the Investment Company Act of 1940
^(1940 Act)) of the Portfolio. However, except for the fundamental
investment limitations set forth below, the investment policies and
limitations described in this ^ SAI are not fundamental and may be changed
without shareholder approval. THE FOLLOWING ARE THE PORTFOLIO'S
FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE
PORTFOLIO MAY NOT:
(1) with respect to 75% of the Portfolio's total assets, purchase
the security of any issuer (other than obligations issued or guaranteed by
the government of the United States, its agencies or instrumentalities)
if, as a result thereof: (a) more than 5% of the Portfolio's total assets
would be invested in the securities of such issuer, or (b) the Portfolio
would hold more than 10% of the voting securities of such issuer;
(2) issue ^ senior securities, except as permitted under the
Investment Company Act of 1940;
^(3) borrow money, except that the Portfolio may (i) borrow money
for temporary or emergency purposes (not for leveraging or investment),
and (ii) engage in reverse repurchase agreements for any purpose; provided
that (i) and (ii) in combination do not exceed 33 1/3% of the Portfolio's
total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that come to exceed ^ this amount will be
redueced within three days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3% limitation;
^(4) underwrite securities issued by others (except to the extent
that the Portfolio may be deemed to be an underwriter within the meaning
of the Securities Act of 1933 in the disposition of restricted
securities);
^(5) purchase the securities of any issuer (other than
obligations issued or guaranteed as to principal and interest by the
- 3 -
<PAGE>
government of the United States, its agencies or instrumentalities) if, as
a result, more than 25% of the Portfolio's total assets (taken at current
value) would be invested in the securities of issuers having their
principal business activities in the same industry;
^(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the Portfolio from ^ investing in securities or other instruments backed
by real estate or securities of companies engaged in the real estate
business);
^(7) purchase or sell physical commodities unless acquired as a
result of ownership of securities ^ or other instruments; or
^(8) lend any security or make any other loan if, as a result,
more than 33 1/3% of the Portfolio's total assets would be lent to other
parties, ^ but this limitation does not apply to purchases of debt
securities ^ or to repurchase agreements.
(9) The Portfolio may, notwithstanding any other fundamental
investment policy or limitation, invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies and
limitations as the Portfolio^ .
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The Portfolio may borrow money only (a) from a bank or
from a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party. The Portfolio will not purchase any
security while borrowings (excluding reverse repurchase agreements)
representing more than 5% of its total assets are outstanding. The
Portfolio will not borrow from other funds advised by FMR or its
affiliates if total outstanding borrowings immediately after such
borrowing would exceed 15% of the Portfolio's total assets.
(ii) The Portfolio does not currently intend to sell
securities short, unless it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold short, and provided
that transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) The Portfolio does not currently intend to purchase any
security if, as a result, 10% or more of its net assets would be invested
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<PAGE>
in securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be sold
or disposed of in the ordinary course of business at approximately the
prices at which they are valued.
(iv) The Portfolio does not currently intend to purchase
securities on margin, except that the Portfolio may obtain such short-term
credits as are necessary for the clearance of transactions, and provided
that margin payments in connection with futures contracts and options on
futures contracts shall not constitute purchasing securities on margin;
(v)^ The Portfolio does not currently intend to make loans,
but this limitation does not apply to purchases of debt securities or to
repurchase agreements.
^(vi) The Portfolio does not currently intend to purchase or
sell futures contracts or call options. This limitation does not apply to
options attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
^(vii) The Portfolio does not currently intend to purchase the
securities of any issuer (other than securities issued or guaranteed by
domestic or foreign governments or political subdivisions thereof) if, as
a result, more than 5% of its total assets would be invested in the
securities of business enterprises that, including predecessors, have a
record of less than three years of continuous operation.
^(viii) The Portfolio does not currently intend to invest in oil,
gas, or other mineral exploration or development programs or leases.
^(ix) The Portfolio does not currently intend to purchase the
securities of any issuer if those officers and Trustees of the Trust and
those officers and directors of FMR who individually own more than 1/2 of
1% of the securities of such issuer together own more than 5% of such
issuer's securities.
(x) The Portfolio does not currently intend to invest all of
its assets in the securities of a single open-end management investment
company with the same fundamental investment objective, policies, and
limitations as the Portfolio.
For the Portfolio's policies on quality and maturity, see the
section entitiled "Quality and Maturity" on page 5.
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<PAGE>
AFFILIATED BANK TRANSACTIONS. ^ The Portfolio may engage in
transactions with ^ financial institutions that are, or may be considered
to be, "affiliated persons" of the ^ Portfolios under the 1940 Act. ^
These transactions may include repurchase agreements with custodian banks;
^ short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); ^ municipal securities; ^ U.S.
government securities with ^ affilated financial institutions that are
primary dealers in these securities; short-term currency transactions; and
short-term borrowings. In accordance with exemptive orders issued by the
Securities and Exchange Commission (SEC), the Board of Trustees has
established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
DELAYED DELIVERY TRANSACTIONS. The Portfolio may buy and sell
securities on a delayed delivery or when-issued basis. These transactions
involve a commitment by the Portfolio to purchase or sell specific
securities at a predetermined price and/or yield, with payment and
delivery taking place after the customary settlement period for that type
of security (and more than seven days in the future). Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed delivery basis, the
Portfolio assumes the rights and risks of ownership, including the risk of
price and yield fluctuations. Because the Portfolio is not required to
pay for securities until the delivery date, these risks are in addition to
the risks associated with the Portfolio's other investments. If the
Portfolio remains substantially fully invested at a time when delayed
delivery purchases are outstanding, the delayed delivery purchases may
result in a form of leverage. When delayed delivery purchases are
outstanding, the Portfolio will set aside appropriate liquid assets in a
segregated custodial account to cover its purchase obligations. When the
Portfolio has sold a security on a delayed delivery basis, the Portfolio
does not participate in further gains or losses with respect to the
security. If the other party to a delayed delivery transaction fails to
deliver or pay for the securities, the Portfolio could miss a favorable
price or yield opportunity, or could suffer a loss.
The Portfolio may renegotiate delayed delivery transactions after
they are entered into, and may sell underlying securities before they are
delivered, which may result in capital gains or losses.
ILLIQUID INVESTMENTS are investments that cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued. Under the supervision of the Board of Trustees,
FMR determines the liquidity of the Portfolio's investments and, through
reports from FMR, the Board monitors trading activity in illiquid
instruments. In determining the liquidity of the Portfolio's investments,
FMR may consider various factors including (1) the frequency of trades and
quotations, (2) the number of dealers and prospective purchasers in the
marketplace, (3) dealer undertakings to make a market, (4) the nature of
the security (including any demand or tender features) and (5) the nature
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<PAGE>
of the marketplace for trades (including the ability to assign or offset
the Portfolio's rights and obligations relating to the investment).
Investments currently considered by the Portfolio to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days. In the absence of market quotations, illiquid
investments are valued for purposes of monitoring amortized cost valuation
at fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets or other
circumstances, the Portfolio were in a position where 10% or more of its
net assets were invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
QUALITY AND MATURITY. Pursuant to procedures adopted by the
Board of Trustees, the Portfolio may purchase only high-quality securities
that FMR believes present minimal credit risks. To be considered high
quality, a security must be a U.S. government security; rated in
accordance with appplicable rules in one of the two highest categories for
short-term securities by at least two nationally recognized rating
services (or by one, if only one rating service has rated the security);
or, if unrated, judged to be of equivalent quality by FMR.
The Portfolio currently intends to limit its investments to
securities with remaining maturities of 397 days or less, and to maintain
a dollar-weighted average maturity of 90 days or less.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio
purchases a security and simultaneously commits to resell that security to
the seller at an agreed upon price ^. The resale price reflects the
purchase price plus an agreed upon incremental amount which is unrelated
to the coupon rate or maturity of the purchased security. A repurchase
agreement involves the obligation of the seller to pay the agreed upon
resale price, which obligation is in effect secured by the value (at least
equal to the amount of the agreed upon resale price and marked to market
daily) of the underlying security. The Portfolio may engage in ^
repurchase ^ agreements with respect to any type of security in which it
is authorized to invest (except that the security may have a maturity in
excess of 397 days). While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
of a decline in the market value of the underlying securities, as well as
delays and costs to the Portfolio in connection with bankruptcy
proceedings), it is the Portfolio's current policy to limit repurchase
agreements to those parties whose creditworthiness has been reviewed and
found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase
agreement, the Portfolio sells a portfolio instrument to another party,
such as a bank or a broker-dealer, in return for cash and agrees to
repurchase the instrument at a particular price and time. While a reverse
repurchase agreement is outstanding, the Portfolio will maintain
appropriate liquid assets in a segregated custodial account to cover its
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<PAGE>
obligation under the agreement. The Portfolio will enter into reverse
repurchase agreements only with parties whose creditworthiness has been
found satisfactory by FMR. Such transactions may increase fluctuations in
the market value of the Portfolio's assets and may be viewed as a form of
leverage.
STRIPPED GOVERNMENT SECURITIES are created by separating the
income and principal components of a debt instrument and selling them
separately. The Portfolio may purchase U.S. Treasury STRIPS (Separate
Trading of Registered Interest and Principal of Securities), that are
created when the coupon payments and the principal payment are stripped
from an outstanding Treasury bond by the Federal Reserve Bank. Bonds
issued by the Resolution Funding Corporation (REFCORP) can also be
stripped in this fashion. REFCORP Strips are eligible investments for the
Portfolios.
SHORT SALES AGAINST THE BOX. The Portfolio may sell securities
short when it owns or has the right to obtain securities equivalent in
kind or amount to the securities sold short. Short sales could be used to
protect the net asset value per share (NAV) of the Portfolio in
anticipation of increased interest rates without sacrificing the current
yield of the securities sold short. If the Portfolio enters into a short
sale against the box, it will be required to set aside securities
equivalent in kind and amount to the securities sold short (or securities
convertible or exchangeable into such securities) and will be required to
continue to hold such securities while the short sale is outstanding. The
Portfolio will incur transaction costs, including interest expenses, in
connection with opening, maintaining and closing short sales against the
box.
VARIABLE OR FLOATING RATE OBLIGATIONS ^ provide for periodic
adjustments of the interest rate paid. Floating rate obligations have
interest rates that change whenever there is a change in a designated base
rate while variable rate ^ obligations provide for a specified periodic
adjustment in the interest rate. These formulas are designed to result in
a market value for the ^ instrument that approximates its par value.
^ Some variable or floating rate ^ obligations permit holders to
demand payment of the unpaid principal balance plus an accrued interest
from the issuers or certain financial intermediaries. Issuers or financial
intermediaries who provide demand features or stand-by commitments often
obtain letters or credit (LOCs) or other guarantees from domestic or
foreign banks to support their repurchase commitments. FMR may rely upon
its evaluation of a bank's credit in determining whether to purchase an
obligation supported by an LOC. In evaluating a foreign bank's credit,
FMR will consider whether adequate public information about the bank is
available and whether the bank may be subject to unfavorable political or
economic developements, currency controls, or other government
restrictions that might affect the bank's ability to honor its credit
commitment.
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<PAGE>
When determining the maturity of a variable or floating rate
obligation, the Portfolio may look to the date the demand feature can be
exercised, or to the date the interest rate is readjusted, rather than to
the final maturity of the obligation.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of the Portfolio by FMR ^ pursuant to authority contained
in the management contract. If FMR grants investment management authority
to the sub-adviser (see section entitled "Management Contract and Service
Contracts"), the sub-adviser will be authorized to place orders for the
purchase and sale of portfolio securities, and will do so in accordance
with the policies described below. FMR is also responsible for the
placement of transaction orders for other investment companies and
accounts for which it or its affiliates act as investment adviser.
Securities purchased and sold by the Portfolio generally will be traded on
a net basis (i.e., without commission). In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR ^
considers various relevant factors, including, but not limited to, the
size and type of the transaction; the nature and character of the markets
for the security to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the broker-dealer firm;
the broker-dealer's execution services rendered on a continuing basis; and
the reasonableness of any commissions.
The Portfolio may execute portfolio transactions with
broker-dealers who provide research and execution services to the
Portfolio ^ and other accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; the availability of securities or the purchasers or
sellers of securities; furnishing analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy
and performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and
settlement). FMR maintains a listing of broker- dealers who provide such
services on a regular basis. However, as many transactions on behalf of
the Portfolio are placed with ^ broker-dealers (including broker-dealers
on the list) without regard to the furnishing of such services, it is not
possible to estimate the proportion of such transactions directed to such
broker-dealers solely because such services were provided. The selection
of such broker-dealers generally is ^ made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute
transactions on behalf of the Portfolio may be useful to FMR in rendering
investment management services to the Portfolio ^ or its other clients,
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<PAGE>
and conversely, such research provided by broker-dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR in
carrying out its obligations to the Portfolio. The receipt of such
research has not reduced FMR's normal independent research activities;
however, it enables FMR to avoid the additional expenses ^ that could be
incurred if FMR tried to develop comparable information through its own
efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the Portfolio to pay such higher commissions, FMR must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Portfolio and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on
the brokerage and research services provided, or to determine what portion
of the compensation should be related to those services.
FMR is authorized to use research services provided by, and to
place portfolio transactions with, brokerage firms that have provided
assistance in the distribution of shares of the Portfolio or shares of
other Fidelity funds to the extent permitted by law. FMR may use research
services provided by and place agency transactions with Fidelity Brokerage
Services, Inc. (FBSI) ^ and Fidelity Brokerage Services, Ltd. (FBSL),
subsidiaries of FMR Corp., if the commissions are fair ^, reasonable, and
comparable to commissions charged by ^ non-affiliated, qualified
brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits
members of national securities exchanges from executing exchange
transactions for accounts which they or their affiliates manage, ^ unless
certain requirements are satisfied. Pursuant to such ^ requirements, the
Board of Trustees has ^ authorized FBSI to execute portfolio transactions
on national securities exchanges ^ in accordance with approved procedures
and applicable SEC rules.
The Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the Portfolio and review the commissions paid by
the Portfolio over representative periods of time to determine if they are
reasonable in relation to the benefits to the Portfolio.
From time to time ^ the Trustees will review whether the
recapture for the benefit of the Portfolio of some portion of the
brokerage commissions or similar fees paid by the Portfolio on portfolio
transactions is legally permissible and advisable. The Portfolio seeks to
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<PAGE>
recapture soliciting broker-dealer fees on the tender of portfolio
securities, but at present no other recapture arrangements are in effect.
The Trustees intend to continue to review whether recapture opportunities
are available and are legally permissible and, if so, to determine, in the
exercise of their business judgment ^ whether it would be advisable for
the Portfolio to seek such recapture.
Although the Trustees and officers of the ^ Portfolio are
substantially the same as those of other funds managed by FMR, investment
decisions for the Portfolio are made independently from those of other
funds managed by FMR or accounts managed by FMR affiliates. It sometimes
happens that the same security is held in the portfolio of more than one
of these funds or accounts. Simultaneous transactions are inevitable when
several funds are managed by the same investment adviser, particularly
when the same security is suitable for the investment objective of more
than one fund or account.
When two or more funds are simultaneously engaged in the purchase
or sale of the same security, the prices and amounts are allocated in
accordance with ^ procedures believed to be appropriate and equitable for
the Portfolio. In some cases this system could have a detrimental effect
on the price or value of the security as far as the Portfolio is
concerned. In other cases, however, the ability of the Portfolio to
participate in volume transactions will produce better executions and
prices for the Portfolio. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to the Portfolio
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
The Portfolio values its investments on the basis of amortized
cost. This technique involves valuing an instrument at its cost as
adjusted for amortization of premium or accretion of discount rather than
its value based on current market quotations or appropriate substitutes
which reflect current market conditions. The amortized cost value of an
instrument may be higher or lower than the price the Portfolio would
receive if it sold the instrument.
Valuing the Portfolio's instruments on the basis of amortized
cost and use of the term "money market fund" are permitted by Rule 2a-7
under the 1940 Act. The Portfolio must adhere to certain conditions under
Rule 2a-7; these conditions are summarized in the Prospectus.
The Board of Trustees of the Trust oversees FMR's adherence to
SEC rules concerning money market funds, and has established procedures
designed to stabilize the Portfolio's NAV at $1.00. At such intervals as
they deem appropriate, the Trustees consider the extent to which NAV
calculated by using market valuations would deviate from $1.00 per share.
If the Trustees believe that a deviation from the Portfolio's amortized
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<PAGE>
cost per share may result in material dilution or other unfair results to
shareholders, the Trustees have agreed to take such corrective action, if
any, as they deem appropriate to eliminate or reduce, to the extent
reasonably practicable, the dilution or unfair results. Such corrective
action could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends; redeeming shares in kind; establishing NAV by using
available market quotations; and such other measures as the Trustees may
deem appropriate.
During periods of declining interest rates, the Portfolio's yield
based on amortized cost may be higher than the yield based on market
valuations. Under these circumstances, a shareholder in the Portfolio
would be able to obtain a somewhat higher yield than would result if the
Portfolio utilized market valuations to determine its NAV. The converse
would apply in a period of rising interest rates.
PERFORMANCE
The Portfolio's performance may be compared to the performance of
other mutual funds in general, or to the performance of particular types
of mutual funds. These comparisons may be expressed as mutual fund
rankings prepared by Lipper Analytical Services, Inc. (Lipper), an
independent service located in Summit, New Jersey, which monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank the funds based
on yield. In addition to the mutual fund rankings, the fund's performance
may be compared to mutual fund performance indices prepared by Lipper.
The Portfolio's performance or the performance of securities in
which it may invest may also be compared to averages published by IBC/USA
(Publications) Inc. of Ashland, MA 01720. These averages assume
reinvestment of distributions. The Money Fund Averages/Government, which
is reported in the Money Fund Report, covers over 198 government money
market funds. The Portfolio may reference the growth and variety of money
market mutual funds and FMR's innovation and participation in the
industry.
The Portfolio also may compare its performance to the yields or
averages of other money market securities as reported by the Federal
Reserve Bulletin, by TeleRate, a financial information network, or by
Salomon Brothers Inc., a broker-dealer firm, and to other fixed-income
investments such as Certificates of Deposit (CDs). The principal value
and interest rate of CDs and money market securities are fixed at the time
of purchase, whereas the Portfolio's yield will fluctuate. Unlike some
CDs and certain other money market securities, money market mutual funds
are not insured by the FDIC. Investors should give consideration to the
quality and maturity of the portfolio securities of the respective
investment companies when comparing investment alternatives.
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<PAGE>
YIELD CALCULATIONS. The Portfolio's yield refers to the income
generated by an investment in the Portfolio over a seven day period
expressed as an annual percentage rate. The effective yield, although
calculated similarly, will be slightly higher than the yield because it
assumes that income earned from the investment is reinvested (the
compounding effect of reinvestment). In addition to the current yield ,
the Portfolio may quote yields in advertising based on any historical
seven day periods.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising
reflect all aspects of the Portfolio's return, including the effect of
reinvesting dividends and capital gain distributions (if any). Average
annual returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in the Portfolio over a
stated period, and then calculating the annually compounded percentage
rate that would have produced the same result if the rate of growth or
decline in the value of the investment had been constant over the period.
For example, a cumulative return of 100% over ten years would produce an
average annual return of 7.18%, which is the steady annual rate that would
equal 100% growth on a compounded basis in ten years. While average
annual returns are a convenient means of comparing investment
alternatives, investors should realize that the Portfolio's performance is
not constant over time, but changes from year to year, and that average
annual returns represent averaged figures as opposed to the actual
year-to-year performance of the Portfolio.
In addition to average annual returns, the Portfolio may quote
unaveraged or cumulative total returns reflecting the simple change in the
value of an investment over a stated period. Average annual and
cumulative total returns may be quoted as percentages or as dollar amounts
and may be calculated for a single investment, a series of investments or
a series of redemptions over any time period. Total returns may be broken
down into their components of income and capital in order to illustrate
the relationship of these factors and their contributions to total return.
Total returns, yields, and other performance information may be quoted
numerically or in a table, graph, or similar illustration. The
Portfolio's cumulative total returns and average annual returns for the
fiscal year ended August 31, ^ 1994 were as follows:
Historical Portfolio Results
----------------------------
One Year Three Year Life of Portfolio*
-------- ---------- ------------------
Average Annual % % %
Total ^ Returns
Cumulative Total % % %
Returns
* Life of Portfolio from ^ December 16, 1988 to August 31, 1994.
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<PAGE>
The following chart shows the income and capital elements of the
Portfolio's year-by-year total returns for the period ^ December 16, 1988
through ^ August 31, 1994 as compared to the cost of living measured by
the Consumer Price Index over the same period.
<TABLE>
<S> <C> <C> <C> <C> <C>
Initial Value of Value of Consumer
$10,000 Reinvested Reinvested Total P r i c e
Period Investment Dividends Capital Gains Value Index**
------ ---------- --------- ------------- ----- -------
10/31/89* $10,000 $ ^ 798 $0 $10,798 $10,441
10/31/90 10,000 ^ 1,679 0 11,679 11,097
10/31/91 10,000 ^ 2,413 0 12,413 11,421
08/31/92*** 10,000 ^ 2,844 0 12,844 11,721
08/31/93 10,000 ^ 3,223 0 13,223 ^ 12,037
08/31/94
</TABLE>
* From December 16, 1988 ^.
** From month-end closest to the initial investment date.
*** This period reflects the Portfolio's change of fiscal year
end date from ^ October 31 to August 31.
Explanatory Notes: With an initial investment of $10,000 made on
^ December 16, 1988, the net amount invested in shares of the ^ Portfolio
was $10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends for the period covered (that
is, their cash value at the time they were reinvested) amounted to ^
$_______. If distributions had not been reinvested, the amount of
distributions earned from the Portfolio over time would have been smaller
and the cash payments (dividends) for the period would have come to ^
$_____. The Portfolio did not distribute any capital gains during the
period.
The Portfolio may reference and discuss its fund number, Quotron number,
CUSIP number, and current portfolio manager in advertising.
From time to time, in reports and promotional literature, the
Portfolio's performance also may be compared to other mutual funds tracked
by financial or business publications and periodicals. For example, the
Portfolio may quote Morningstar, Inc. in its advertising materials.
Morningstar, Inc. is a mutual fund rating service that rates mutual funds
on the basis or risk-adjusted performance. In addition, the Portfolio may
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<PAGE>
quote financial or business publications and periodicals as they relate to
portfolio management, investment philosophy, and investment techniques.
Rankings that compare the performance of Fidelity funds to one another in
appropriate categories over specific periods of time may also be quoted in
advertising.
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<PAGE>
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash
payment undesirable, redemption payments may be made in whole or in part
in securities or other property, valued for this purpose as they are
valued in computing the Portfolio's NAV. Shareholders receiving
securities or other property on redemption may realize a gain or loss for
tax purposes, and will incur any costs of sale, as well as the associated
inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, the Portfolio is
required to give shareholders at least 60 days' notice prior to
terminating or modifying its exchange privilege. Under the Rule, the
60-day notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee or deferred sales charge ordinarily payable at the time of
exchange, or (ii) the Portfolio suspends the redemption of shares to be
exchanged as permitted under the 1940 Act or ^ the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
The Portfolio has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the Portfolio would be unable
to invest effectively in accordance with its investment objective and
policies or might otherwise be adversely affected.
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<PAGE>
DISTRIBUTION AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to
you and the U.S. Postal Service cannot deliver your checks, or if your
checks remain uncashed for six months, Fidelity may reinvest your
distributions at the then-current NAV. All subsequent distributions will
then be reinvested until you provide Fidelity with alternate instructions.
DIVIDENDS. Dividends from the Portfolio will not normally
qualify for the dividends-received deduction available to corporations,
since the Portfolio's income is primarily derived from interest income and
short-term capital gains. Depending upon state law, a portion of the
Portfolio's dividends attributable to interest income derived from U.S.
government securities may be exempt from state and local taxation. The
Portfolio will provide information on the portion of the Portfolio's
dividends, if any, that qualify for this exemption.
CAPITAL GAIN DISTRIBUTIONS. The Portfolio may distribute
short-term capital gains once a year or more often as necessary to
maintain its NAV at $1.00 per share or to comply with distribution
requirements under federal tax law. The Portfolio does not anticipate
earning long-term capital gains on securities held by the Portfolio.
TAX STATUS OF THE PORTFOLIO. The Portfolio has qualified and
intends to qualify as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended (the Code), so that the Portfolio will
not be liable for federal income or excise taxes on net investment income
or capital gains to the extent that these are distributed to shareholders
in accordance with applicable provisions of the Code.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as
business trusts, ^ state laws provide for a ^ pass-through of the state
and local income tax exemption afforded to direct owners of U.S.
government securities. ^ Some states limit this pass through to mutual
funds that invest a certain amount in U.S. government securities, and some
types of securities, such as repurchase agreements and some agency-backed
securities, but may not qualify for this pass-through benefit. The tax
treatment of your dividend distributions from the Portfolio will be the
same as if you directly owned your proportionate share of the ^ U.S.
government securities held by the Portfolio. Because the income earned on
most U.S. government securities in which the Portfolio invests is exempt
form state and local taxes, the portion of your dividends from the
Portfolio attributable to these securities will also be free from income
taxes ^. The exemption from state and local income taxation does not
preclude states from ^ assessing other taxes on the ownership of U.S.
government securities.
FMR
FMR is a wholly owned subsidiary of FMR Corp., ^ the ultimate
parent company organized in 1972. All of the stock of FMR is owned by FMR
Corp. Through ownership of voting common stock and the execution of a
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<PAGE>
shareholders' voting agreement, Edward C. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family form a
controlling group with respect to FMR Corp. At present, the principal
operating activities of FMR Corp. are those conducted by three of its
divisions as follows: Fidelity Service Company (Service), which is the
transfer and shareholder servicing agent for certain funds advised by
FMR^; FIIOC, which performs shareholder servicing functions for certain
institutional customers^; and Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within the
Fidelity organization.
Several affiliates of FMR also are engaged in the investment
advisory business. Fidelity Management Trust Company provides trustee,
investment advisory and administrative services to retirement plans and
corporate employee benefit accounts. Fidelity Management & Research
(U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Far East) Inc.
(FMR Far East), both wholly-owned subsidiaries of FMR formed in 1986,
supply investment research, and may supply portfolio management services,
to FMR in connection with certain funds advised by FMR. Analysts employed
by FMR, FMR U.K. and FMR Far East research and visit thousands of domestic
and foreign companies each year. FMR Texas, a wholly owned subsidiary of
FMR formed in 1989, supplies portfolio management and research services in
connection with certain money market funds advised by FMR.
TRUSTEES AND OFFICERS
The Board of Trustees and executive officers of the Trust are
listed below. Except as indicated, each individual has held the office
shown or other offices in the same company for the last five years. All
persons named as Trustees and officers also serve in similar capacities
for other funds advised by FMR. Unless otherwise noted, the business
address of each Trustee and officer is 82 Devonshire Street, Boston, MA
02109, which is also the address of FMR. Those Trustees who are
"interested persons" (as defined in the 1940 Act) by virtue of their
affiliation with either the Trust or FMR, are indicated by an asterisk
(*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director
of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is
President of FMR; and President and a Director of FMR Texas Inc. (1989),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee
(1991), is a consultant to Western Mining Corporation (1994). Prior to
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<PAGE>
February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production, 1990). ^ Until March 1990, Mr.
Cox was President and Chief Operating Officer of Union Pacific Resources
Company (exploration and production). He is a Director of ^ Sanifill
Corporation ^ (non-hazardous waste, 1990) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983- 1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, N.Y., Trustee
(1992). Prior to her retirement in September 1991, Mrs. Davis was the
Senior Vice President of Corporate Affairs of Avon Products, Inc. She is
currently a Director of BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail
stores, 1990), and previous served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she serves as a
Director of the New York City Chapter of the National Multiple Sclerosis
Society, and is a member of the Advisory Council of the International
Executive Service Corps. and the President's Advisory Council of The
University School of Vermont School of Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a
financial consultant. Prior to September 1986, Mr. Flynn was Vice
Chairman and a Director of the Norton Company (manufacturer of industrial
devices). He is currently a Director of Mechanics Bank and a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, ^ 3881-2 Lander Road, Chagrin Falls, OH,
Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman
and Chief Executive Officer of LTV Steel Company. Prior to May 1990, he
was Director of National City Corporation (a bank holding company) and
National City Bank of Cleveland. He is a Director of TRW Inc. (original
equipment and replacement products), Cleveland-Cliffs Inc. (mining), NACCO
Industries, Inc. (mining and marketing), Consolidated Rail Corporation,
Birmingham Steel Corporation^, Hyster-Yale Materials Handling, Inc.
(1989), and RPM, Inc. (manufacturer of chemical products, 1990). In
addition, he serves as a Trustee of First Union Real Estate Investments^,
Chairman of the Board of Trustees and a member of the Executive Committee
of the Cleveland Clinic Foundation, a Trustee and a member of the
Executive Committee of University School (Cleveland), and a Trustee of
Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North,
Greenwich, CT, Trustee, is a Professor at Columbia University Graduate
School of Business and a financial consultant. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance)^ and Valuation Research
Corp. (appraisals and valuations, 1993). In addition, he serves as Vice
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<PAGE>
Chairman of the Board of Directors of the National Arts Stabilization Fund
and the Vice Chairman of the Board of Trustees of the Greenwich Hospital
Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992).
Prior to his retirement on May 31, 1990, he was a Director of FMR (1989)
and Executive Vice President of FMR (a position he held until March 31,
1991); Vice President of Fidelity Magellan Fund and FMR Growth Group
Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice
President of Fidelity Investments Corporate Services, Inc. (1991-1992).
He is a Director of W.R. Grace & Co. (chemicals, 1989) and Morrison
Knudsen Corporation (engineering and construction^). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary,
Historic Deerfield (1989) and Society for the Preservation of New England
Antiquities, and as an Overseer of the Museum of Fine Arts of Boston
(1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee
(1989), is Chairman of G.M. Management Group (strategic advisory
services). Prior to his retirement in July 1988, he was Chairman and
Chief Executive Officer of Leaseway Transportation Corp. (physical
distribution services). Mr. McDonough is a Director of ACME-Cleveland
Corp. (metal working, telecommunications and electronic products),
Brush-Wellman Inc. (metal refining), York International Corp.
(air-conditioning and refrigeration, 1989), ^ Commercial Intertech Corp.
(water treatment equipment, 1992)^, and Associated Estates Realty
Corporation (a real estate investment trust, 1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL,
Trustee^. Prior to his retirement in 1985, Mr. Malone was Chairman,
General Electric Investment Corporation and a Vice President of General
Electric Company. He is a Director of Allegheny Power Systems, Inc.
(electric utility), General Re Corporation (reinsurance) and Mattel Inc.
(toy manufacturer). ^ In addition, he serves as a Trustee of Corporate
Property Investors, the EPS Foundation at Trinity College, the Naples
Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute,
and he is a member of the Advisory Boards of Butler Capital Corporation
Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993)
is Chairman of the Board, President, and Chief Executive Officer of
Lexmark International, Inc. (office machines, 1991). Prior to 1991, he
held the positions of Vice President of International Business Machines
Corporation ("IBM") and President and General MAnager of various IBM
divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna Company
(chemicals, 1993) and Infomart (marketing services, 1991), a Trammell Crow
Co. In addition, he serves as a Campaign Vice Chairman of the Tri-State
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<PAGE>
United Way (1993) and is a member of the University of Alabama President's
Cabinet (1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E.,
Atlanta, GA, Trustee^, is President of The Wales Group, Inc. (management
and financial advisory services). Prior to retiring in 1987, Mr. Williams
served as Chairman of the Board of First Wachovia Corporation (bank
holding company), and Chairman and Chief Executive Officer of The First
National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software^), Georgia Power Company
(electric utility), Gerber Alley & Associates, Inc. (computer software),
National Life Insurance Company of Vermont, American Software, Inc.
(1989), and AppleSouth, Inc. (restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of
the Fidelity funds, Mr. French was Senior Vice President, Fund Accounting
- Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and Senior
Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General
Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and
Clerk of ^ Distributors.
^ FRED L. HENNING, JR., Vice President (1994), is Vice President
of Fidelity's money market funds and Senior Vice President of FMR Texas,
Inc.
THOMAS D. MAHER, Assistant Vice President (1990), is Assistant
Vice President of Fidelity's money market funds and Vice President and
Associate General Counsel of FMR Texas ^ (1990). Prior to 1990, Mr. Maher
was an employee of FMR and Assistant Secretary of all the Fidelity funds
(1985-1989).
LELAND BARRON, Vice President (1989) of the Portfolio and of
other funds advised by FMR and is an employee of FMR Texas.
Under a retirement program ^ that became effective on November 1,
1989, Trustees, upon reaching age 72, become eligible to participate in a
defined benefit retirement program under which they receive payments
during ^ their lifetime from the ^ Portfolio based on their basic ^
trustee fees and length of service. Currently, Messrs. Robert L. Johnson,
William R. Spaulding, Bertram H. Witham, and David L. Yunich participate
in the program.
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<PAGE>
^ The Trustees and officers of the Trust ^, as a group, own less
than 1% of the Portfolio's outstanding shares.
MANAGEMENT AND SERVICE CONTRACTS
The Portfolio employs FMR to furnish investment advisory and
other services. Under its ^ management contract with the Portfolio, FMR
acts as investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the Portfolio in accordance with its
investment objective, policies and limitations. FMR also provides the
Portfolio with all necessary office facilities, equipment and personnel
for servicing the Portfolio's investments and compensates all officers of
the Trust, all Trustees who are "interested persons" of the Trust or of
FMR, and all personnel of the Trust or FMR performing services relating to
research, statistical and investment activities. In addition, FMR or its
affiliates, subject to the supervision of the Board of Trustees, provide
the management and administrative services necessary for the operation of
the Portfolio. These services include providing facilities for
maintaining the Portfolio's organization, supervising relations with
custodians, transfer and pricing agents, accountants, underwriters and
other persons dealing with the Portfolio; preparing all general
shareholder communications and conducting shareholder relations;
maintaining the Trust's records and the registration of the Portfolio's
shares under federal and state law; developing management and shareholder
services for the Portfolio; and furnishing reports, evaluations and
analyses on a variety of subjects to the Trustees on behalf of the
Portfolio.
FMR pays all of the expenses of the Portfolio, except as
described below. Specific expenses payable by FMR include, without
limitation, the fees and expenses of registering and qualifying the
Portfolio and its shares for distribution under federal and state
securities laws; expenses of typesetting for printing the Prospectus and ^
SAI; custodian charges; auditing and legal expenses; insurance expenses;
association membership dues; the expense of reports to shareholders;
shareholders' meetings; and proxy solicitations.
^ FIIOC is transfer ^, dividend disbursing ^, and shareholders'
servicing agent for the Portfolio. The costs of these services are borne
by FMR pursuant to its ^ management contract with the Portfolio. Service
calculates the Portfolio's NAV and dividends, and maintains the
Portfolio's general accounting records. The costs of these services are
also borne by FMR pursuant to its management contract with the Portfolio.
FMR pays all other expenses of the Portfolio with the following
exceptions: the payment of fees and expenses of all Trustees of the Trust
who are not "interested persons" of the Trust or FMR; interest on
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<PAGE>
borrowings; taxes; brokerage commissions (if any); and such nonrecurring
expenses as may arise, including costs of litigation to which the
Portfolio may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to ^ litigation.
^ For these services and FMR's payment of the portfolio's
expenses, the Portfolio pays a monthly management fee to FMR at the annual
rate of .42% of the average net assets of the Portfolio throughout the
month pursuant to a management contract approved by shareholders on
October 26, 1989. The management fee paid to FMR ^ is reduced by an
amount equal to the fees and expenses of those Trustees who are not
"interested persons" of the Trust or FMR. For the twelve month period
ended August 31, 1994, August 31, 1993, and the ten month period ended
August 31, 1992,^ the Portfolio paid $__________, $5,622,803, and
$3,902,635, ^ in management fees, respectively, before reduction for ^
fees and expenses of the non-interested Trustees.
SUB-ADVISER. On behalf of the Portfolio, FMR has entered into a
sub-advisory agreement with FMR Texas pursuant to which FMR Texas has
primary responsibility for providing portfolio investment management
services to the Portfolio. Under the sub- advisory agreement, FMR pays
FMR Texas fees equal to 50% of the management fee retained by FMR under
its current management contract with the Portfolio. The fees paid to FMR
Texas are not reduced by any voluntary or mandatory expense reimbursements
that may be in effect from time to time. For the twelve month ^ periods
ended August 31, 1994 and August 31, 1993, and the ten month period ended
August 31, 1992,^ FMR paid FMR Texas fees that amounted to $__________,
$2,806,471, and $1,948,358, ^ respectively.
^
The Portfolio has a Distribution Agreement with Distributors,^ a
Massachusetts corporation organized on July 18, 1960^. Distributors is a
broker-dealer registered under the Securities Exchange Act of 1934 and is
a member of the National Association of Securities Dealers, Inc. The
Distribution Agreement calls for Distributors to use all reasonable
efforts, consistent with its other business, to secure purchasers for
shares of the Portfolio, which are continuously offered. Promotional and
administrative expenses in connection with the offer and sale of shares
are paid by FMR.
^
DISTRIBUTION AND SERVICE PLAN
The Portfolio has adopted a Distribution and Service Plan (the
Plan) ^ pursuant to Rule 12b-1 ^ under the 1940 Act (the Rule). The Rule
provides in substance that a mutual fund may not engage directly or
indirectly in financing any activity that is primarily intended to result
in the sale of shares of the ^ fund except pursuant to a plan adopted by
the ^ fund under the Rule. The Trust's Board of Trustees ^ has adopted
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<PAGE>
the Plan to allow the Portfolio and FMR to incur certain expenses that
might be considered to constitute indirect payment by the Portfolio of
distribution expenses. Under the Plan, if the payment of management fees
by the Portfolio to FMR ^ is deemed to be indirect financing by the
Portfolio of the distribution of its shares, such payment is authorized by
the Plan.
The Plan specifically recognizes that FMR, either directly or
through Distributors, may use its management fee revenue, past profits or
other resources, without limitation, to pay promotional and administrative
expenses in connection with the offer and sale of shares of the Portfolio.
^ In addition, the Plan provides that FMR may use its resources, including
its management fee revenues, to make payments to third parties that
provide assistance in selling shares of the Portfolio or to third parties,
including banks, that render shareholder support services. The Trustees
have not ^ authorized ^ such payments to date^.
As required by the Rule, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan prior to its
approval, and have determined that there is a reasonable likelihood that
the Plan will benefit the Portfolio and its shareholders. ^ In
particular, the Trustees noted that the Plan does not authorize payments
by the Portfolio other than those made to FMR under its ^ management
contract with the Portfolio. To the extent that the Plan gives FMR and
Distributors greater flexibility in connection with the distribution of
shares of the Portfolio, additional sales of the Portfolio's shares may
result. Additionally, certain shareholder support services may be
provided more effectively under the ^ plan by local entities with whom
shareholders have other relationships.
The Plan was approved by Fidelity Money Market Trust on September
21, 1994, as the then shareholder of the Portfolio pursuant to an
Agreement and Plan of Conversion approved by public shareholders of the
Portfolio on September 21, 1994.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of
this prohibition under the Glass-Steagall Act has not been clearly defined
^ by the courts or appropriate regulatory agencies, Distributors believes
that the Glass Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping functions.
Distributors intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations pertaining
to the permissible activities of banks and their affiliates or
subsidiaries, as well as further judicial or administrative decisions or
interpretations, could prevent a bank from continuing to perform all or a
part of the contemplated services. If a bank were prohibited from so
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<PAGE>
acting, the Trustees would consider what actions, if any, would be
necessary to continue to provide efficient and effective shareholder
services. In such event, changes in the operation of the Portfolio might
occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not
expected that shareholders would suffer any adverse financial consequences
as a result of any of these occurrences.^ In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein, and banks and financial institutions may be required to
register as dealers pursuant to state law.
The Portfolio may execute portfolio transactions with and
purchase securities issued by depository institutions that receive
payments under the plan. No preference for the instruments of such
depository institutions will be shown in the selection of investments.
DESCRIPTION OF THE TRUST
Trust Organization. Retirement Government Money Market Portfolio
is a portfolio of Fidelity Money Market Trust, an open- end management
investment company originally organized as a Massachusetts business trust
by Declaration of Trust dated August 21, 1978, and amended and restated
November 1, 1989. On October 18, 1994 the Trust was converted to a
Delaware business trust pursuant to an agreement approved by shareholders
on September 21, 1994. The Delaware trust, which was organized on June
20, 1991 under the name of Fidelity Money Market Trust I, succeeded to the
name Fidelity Money Market Trust on October 18, 1994. Currently there are
five portfolios of the Trust: U.S. Treasury Portfolio; U.S. Government
Portfolio; Domestic Money Market Portfolio; Retirement Money Market
Portfolio; and Retirement Government Money Market Portfolio. The ^ Trust
Instrument permits the Trustees to create additional ^ series.
In the event that FMR ceases to be the investment adviser to the
Trust or a portfolio, the right of the Trust or portfolio to use the
identifying name "Fidelity" may be withdrawn.
The assets of the Trust, received for the issue or sale of shares
of each portfolio and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
portfolio, and constitute the underlying assets of such portfolio. The
underlying assets of each portfolio are segregated on the books of
account, and are to be charged with the liabilities with respect to such
portfolio and with a share of the general expenses of the Trust. Expenses
with respect to the Trust are to be allocated in proportion to the asset
value of the respective portfolios, except where allocations of direct
expense can otherwise be fairly made. The officers of the Trust, subject
to the general supervision of the Board of Trustees, have the power to
determine which expenses are allocable to a given portfolio, or which are
general or allocable to all of the portfolios. In the event of the
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<PAGE>
dissolution or liquidation of the Trust, shareholders of each portfolio
are entitled to receive as a class the underlying assets of such portfolio
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The Trust is ^ a business
trust organized under Delaware law. Delaware law provides that
shareholders shall be entitled to the same limitations of personal
liability extended to stockholders of private corporations for profit.
The courts of some states, however, may decline to apply Delaware law on
this point. The Trust Instrument contains an express disclaimer of
shareholder liability for the debts, liabilities, obligations, and
expenses of the Trust and requires that a disclaimer be given in each
contract entered into or executed by the Trust or the Trustees ^ . The
Trust Instrument provides for indemnification out of each portfolio's
property of any shareholder or former shareholder held personally liable
for the obligations of the portfolio. The ^ Trust Instrument also
provides that each portfolio shall, upon request, assume the defense of
any claim made against any shareholder for any act or obligation of the
portfolio and satisfy any judgment thereon. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which ^ Delaware law does not apply, no
contractual limitation of liability was in effect, and a portfolio is
unable to meet its obligations. FMR believes that, in view of the above,
the risk of personal liability to shareholders is remote.
The ^ Trust Instrument further provides that the Trustees, if
they have exercised reasonable care, will not be liable ^ to any person
other than the Trust or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever provided that Trustees are not
protected against any liability to which ^ they would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of ^ their office.
VOTING RIGHTS. ^ Each portfolio's capital consists of shares of
beneficial interest. As a shareholder, you receive one vote for each
dollar of net asset value you own. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the Prospectus.
Shares are fully paid and nonassessable, except as set forth under the
heading " Shareholder and Trustee Liability" above. Shareholders
representing 10% or more of the Trust or a portfolio may, as set forth in
the ^ Trust Instrument, call meetings of the Trust or a portfolio for any
purpose related to the Trust or portfolio, as the case may be, including,
in the case of a meeting of the entire Trust, the purpose of voting on
removal of one or more Trustees.
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<PAGE>
The Trust or any ^ portfolio may be terminated upon the sale of
its assets to, or merger with, another open-end management investment
company, or upon liquidation and distribution of its assets^. Generally
such terminations must be approved by vote of the holders of a majority of
the ^ Trust or the portfolio, as determined by the current value of each
shareholder's investment in the portfolio or Trust; however, the Trustees
may, without prior shareholder approval, change the form of organization
of the Trust by merger, consolidation, or incorporation. If not so
terminated or reorganized, the Trust and ^ each portfolio will continue
indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder
vote, cause the Trust to merge or consolidate into one or more Trusts,
partnerships, or corporations, or cause the Trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the Trust's registration
statement. Each portfolio may invest all of its assets in another
investment company.
As of September __, 1994 the following ^ owned of record or
beneficially ^ 5% or more of outstanding shares: [to be added]
CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street,
New York, NY, is custodian of the assets of the Portfolio. The custodian
is responsible for the safekeeping of the Trust's assets and the
appointment of subcustodian banks and clearing agencies. The custodian
takes no part in determining the investment policies of ^ the Portfolio or
in deciding which securities are purchased or sold by the Portfolio. The
Portfolio, however, may invest in obligations of the custodian and may
purchase securities from or sell securities to the custodian.
FMR, its officers and directors and its affiliated companies and
the Trust's Trustees may from time to time have transactions with various
banks, including banks serving as custodians for certain of the portfolios
advised by FMR. Transactions that have occurred to date have included
mortgages and personal and general business loans. In the judgment of
FMR, the terms and conditions of these transactions were not influenced by
existing or potential custodial or other Portfolio relationships.
AUDITOR. ^_________________, serves as the Trust's independent
accountant. The auditor examines financial statements for the ^ Portfolio
and provides other audit, tax, and related services.
FINANCIAL STATEMENTS
The Portfolio's financial statements and financial highlights for the
fiscal year ended August 31, 1994 are included in the Portfolio's annual
report, which is a separate report attached to the prospectus. The
Portfolio's financial statements and financial highlights are incorporated
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<PAGE>
herein by reference.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 45 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston, Massachusetts on the 3rd day of October 1994.
FIDELITY MONEY MARKET TRUST
By /s/Edward C. Johnson 3d +
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
------------ ------- ------
/s/Edward C. Johnson 3d+ President and Trustee October , 1994
Edward C. Johnson 3d (Principal Executive
Officer)
/s/Gary L. French Treasurer October , 1994
Gary L. French
/s/J. Gary Burkhead Trustee October , 1994
J. Gary Burkhead
/s/Ralph F. Cox * Trustee October , 1994
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee October , 1994
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee October , 1994
Richard J. Flynn
/s/E. Bradley Jones * Trustee October , 1994
E. Bradley Jones
/s/Donald J. Kirk * Trustee October , 1994
Donald J. Kirk
/s/Peter S. Lynch * Trustee October , 1994
Peter S. Lynch
/s/Edward H. Malone * Trustee October , 1994
Edward H. Malone
/s/Marvin L. Mann* Trustee October , 1994
Marvin L. Mann
/s/Gerald C. McDonough* Trustee October , 1994
Gerald C. McDonough
<PAGE>
(Signature) (Title) (Date)
------------ ------- ------
/s/Thomas R. Williams * Trustee October , 1994
Thomas R. Williams
+ Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned President and Director, Trustee or General
Partner, as the case may be, of the following investment companies:
Daily Money Fund Fidelity Institutional Tax-Exempt
Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors
Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Fidelity Municipal Trust II
Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Fidelity Union Street Trust II
Portfolios
in addition to any other investment company for which Fidelity Management
& Research Company acts as investment adviser and for which the
undersigned individual serves as President and Board Member (collectively,
the "Funds"), hereby severally constitute and appoint J. Gary Burkhead, my
true and lawful attorney-in-fact, with full power of substitution, and
with full power to sign for me and in my name in the appropriate capacity
any Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Pre-Effective Amendments or
Post-Effective Amendments to said Registration Statements on Form N-1A or
any successor thereto, any Registration Statements on Form N-14, and any
supplements or other instruments in connection therewith, and generally to
do all such things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
DC-142734.3
<PAGE>
POWER OF ATTORNEY
-----------------
We, the undersigned Directors, Trustees or General Partners, as
the case may be, of the following investment companies:
Daily Money Fund Fidelity Institutional Tax-Exempt Cash
Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Fidelity Municipal Trust II
Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Fidelity Union Street Trust II
Portfolios
in addition to any other investment company for which Fidelity Management
& Research Company acts as investment adviser and for which the
undersigned individual serves as a Director, Trustee or General Partner
(collectively, the "Funds"), hereby severally constitute and appoint
Arthur J. Brown, Arthur C. Delibert, Robert C. Hacker, Richard M.
Phillips, Dana L. Platt and Stephanie Xupolos, each of them singly, my
true and lawful attorney-in-fact, with full power of substitution, and
with full power to each of them, to sign for me and my name in the
appropriate capacities any Registration Statements of the Funds on Form
N-1A or any successor thereto, any and all subsequent Pre-Effective
Amendments or Post-Effective Amendments to said Registration Statements on
Form N-1A or any successor thereto, any Registration Statements on Form
N-14, and any supplements or other instruments in connection therewith,
and generally to do all such things in my name and behalf in connection
therewith as said attorneys-in-fact deem necessary or appropriate, to
comply with the provisions of the Securities Act of 1933 and Investment
Company Act of 1940, and all related requirements of the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or their substitutes may do or cause to be done by virtue
hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
---------------------- -----------------
Edward C. Johnson 3d Donald J. Kirk
DC-142735.3
<PAGE>
/s/J. Gary Burkhead /s/Peter S. Lynch
------------------- ------------------
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
--------------- -----------------
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
---------------------- -------------------
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
------------------- ----------------------
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
------------------- ---------------------
E. Bradley Jones Thomas R. Williams
<PAGE>
PART C - OTHER INFORMATION
Item 24. (a) Audited financial statements and financial
highlights for each Portfolio of the Trust for
the fiscal year ended August 31, 1994 will be
filed by subsequent amendment.
(b) Exhibits:
1. Declaration of Trust, dated August 21, 1978, is
incorporated herein by reference to Exhibit 1 to
Post-Effective Amendment No. 10.
(a) Supplement to Declaration of Trust, dated
November 22, 1978, is incorporated herein by
reference to Exhibit 1(a) to Post-Effective
Amendment No. 10.
(b) Supplement to Declaration of Trust, dated January
3, 1980, is incorporated herein by reference to
Exhibit 1(b) to Post-Effective Amendment No. 10.
(c) Supplement to Declaration of Trust, dated January
2, 1987, is incorporated herein by reference to
Exhibit 1(c) to Post-Effective Amendment No. 21.
(d) Amended and Restated Declaration of Trust, dated
November 1, 1989, is incorporated herein by
reference to Exhibit (d) to Post-Effective
Amendment No. 29
2. Not applicable.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract between Fidelity Money Market
Trust: U.S. Treasury Portfolio and Fidelity
Management & Research Company is incorporated
herein by reference to Exhibit 5(a) to
Post-Effective Amendment No. 19.
(b) Management Contract between Fidelity Money Market
Trust: U.S. Government Portfolio and Fidelity
Management & Research Company is incorporated
herein by reference to Exhibit 5(b) to
Post-Effective Amendment No. 19.
DC-161151.2
<PAGE>
Fidelity Money Market Trust
(c) Management Contract between Fidelity Money Market
Trust: Domestic Money Market Portfolio and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(c)
to Post-Effective Amendment No. 19.
(d) Management Contract between Fidelity Money Market
Trust: Retirement Money Market Portfolio and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(d)
to Post-Effective Amendment No. 25.
(e) Management Contract between Fidelity Money Market
Trust: Retirement Government Money Market
Portfolio and Fidelity Management & Research
Company is incorporated herein by reference to
Exhibit 5(e) to Post-Effective Amendment No. 25.
(f) Sub-Advisory Agreement between Fidelity Money
Market Trust: U.S. Treasury Portfolio and FMR
Texas dated November 1, 1989 is incorporated
herein by reference to Exhibit 5(f) to Post
Effective Amendment No. 30.
(g) Sub-Advisory Agreement between Fidelity Money
Market Trust: Domestic Money Market Portfolio and
FMR Texas dated November 1, 1989 is incorporated
herein by reference to Exhibit 5(g) to
Post-Effective Amendment No. 30.
(h) Sub-Advisory Agreement between Fidelity Money
Market Trust: U.S. Government Portfolio and FMR
Texas dated November 1, 1989 is incorporated
herein by reference to Exhibit 5(h) to
Post-Effective Amendment No. 30.
(i) Sub-Advisory Agreement between Fidelity Money
Market Trust: Retirement Money Market Portfolio
and FMR Texas dated November 1, 1989 is incorpo-
rated herein by reference to Exhibit 5(i) to
Post-Effective Amendment No. 30.
(j) Sub-Advisory Agreement between Fidelity Money
Market Trust: Retirement Government Money Market
Portfolio and FMR Texas dated November 1, 1989 is
incorporated herein by reference to Exhibit 5(j)
to Post-Effective Amendment No. 30.
6. (a) General Distribution Agreement between Fidelity
Money Market Trust: U.S. Treasury Portfolio and
- 2 -
<PAGE>
Fidelity Money Market Trust
Fidelity Distributors Corporation dated April 1,
1987 is incorporated herein by reference to
Exhibit 6(f) to Post-Effective Amendment No. 29.
(b) General Distribution Agreement between Fidelity
Money Market Trust: U.S. Government Portfolio and
Fidelity Distributors Corporation dated April 1,
1987 is incorporated herein by reference to
Exhibit 6(g) to Post-Effective Amendment No. 29.
(c) General Distribution Agreement between Fidelity
Money Market Trust: Domestic Money Market
Portfolio and Fidelity Distributors Corporation
dated April 1, 1987 is incorporated herein by
reference to Exhibit 6(h) to Post-Effective
Amendment No. 29.
(d) General Distribution Agreement between Fidelity
Money Market Trust: Retirement Money Market
Portfolio and Fidelity Distributors Corporation
is incorporated herein by reference to Exhibit
6(d) to Post-Effective Amendment No. 25.
(e) General Distribution Agreement between Fidelity
Money Market Trust: Retirement Government Money
Market Portfolio and Fidelity Distributors
Corporation is incorporated herein by reference
to Exhibit 6(e) to Post-Effective Amendment No.
25.
(f) Amendment to the General Distribution Agreement
between Fidelity Money Market Trust: U.S.
Treasury Portfolio, U.S. Government Portfolio,
and Domestic Money Market Portfolio and Fidelity
Distributors Corporation dated January 1, 1988 is
incorporated herein by reference to Exhibit 6(i)
to Post-Effective Amendment No. 29.
7. Retirement Plan for Non-Interested Person Trustees,
Directors or General Partners, effective November 1,
1989, is incorporated herein by reference to Exhibit 7 to
Post Effective Amendment no. 37.
8. (a) Custodian Contract, dated January 5, 1979,
between the Fund and First National Bank of
Boston is incorporated herein by reference to
Exhibit 5(b) to Form N-1Q for the quarter ended
3/31/79.
- 3 -
<PAGE>
Fidelity Money Market Trust
(b) Letter containing basis of Custodian's
remuneration was filed as Exhibit 8(b) to
Post-Effective Amendment No. 7.
(c) Custodian Contract between Fidelity Money Market
Trust: Retirement Money Market Portfolio and
Retirement Government Money Market Portfolio and
Security Pacific National Bank dated July 22,
1988 is incorporated herein by reference to
Exhibit 8(c) to Post-Effective Amendment No. 33.
(d) Amendment Letter to Custodian Contract between
Fidelity Money Market Trust: Retirement Money
Market Portfolio and Retirement Government Money
Market Portfolio and Security Pacific National
Bank dated November 20, 1989 is incorporated
herein by reference to Exhibit 8(d) to
Post-Effective Amendment No. 33.
(e) Custodian Contract, dated July 18, 1983, between
the Fund and First National Bank of Boston is
incorporated herein by reference to Exhibit 8(e)
to Post-Effective Amendment No. 33.
(f) Sub-Custodian Contract between The First National
Bank of Boston and Shawmut Bank of Boston, N.A.
dated April 12, 1982 is incorporated herein by
reference to Exhibit 8(f) to Post-Effective
Amendment No. 29.
9. (a) Amended Service Agreement between Fidelity Money
Market Trust and Fidelity Service Co. dated June
1, 1989 is incorporated herein by reference to
Exhibit 9(a) to Post-Effective Amendment No. 33.
(b) Amended Transfer Agency Agreement between
Fidelity Money Market Trust and Fidelity
Investments Institutional Operations Company
dated June 1, 1989 is incorporated herein by
reference to Exhibit 9(b) to Post-Effective
Amendment No. 33.
(c) Schedules A (transfer, dividend disbursing and
shareholders' servicing); B (pricing and
bookkeeping); and C (securities lending
transactions) dated June 1, 1989, pertaining to
Fidelity Money Market Trust: U.S. Treasury
Portfolio, are incorporated herein by reference
to Exhibit 9(c) to Post-Effective Amendment No.
33.
- 4 -
<PAGE>
Fidelity Money Market Trust
(d) Schedules A (transfer, dividend disbursing and
shareholders' servicing); B (pricing and
bookkeeping); and C (securities lending
transactions) dated June 1, 1989, pertaining to
Fidelity Money Market Trust: U.S. Government
Portfolio, are incorporated herein by reference
to Exhibit 9(d) to Post-Effective Amendment No.
33.
(e) Schedules A (transfer, dividend disbursing and
shareholders' servicing); B (pricing and
bookkeeping); and C (securities lending
transactions) dated June 1, 1989, pertaining to
Fidelity Money Market Trust: Domestic Money
Market Portfolio, are incorporated herein by
reference to Exhibit 9(e) to Post-Effective
Amendment No. 33.
(f) Schedules A (transfer, dividend disbursing and
shareholders' servicing); B (pricing and
bookkeeping); and C (securities lending
transactions) dated June 1, 1989, pertaining to
Fidelity Money Market Trust: Retirement Money
Market Portfolio, are incorporated herein by
reference to Exhibit 9(f) to Post-Effective
Amendment No. 33.
(g) Schedules A (transfer, dividend disbursing and
shareholders' servicing); B (pricing and
bookkeeping); and C (securities lending
transactions) dated June 1, 1989, pertaining to
Fidelity Money Market Trust: Retirement
Government Money Market Portfolio, are
incorporated herein by reference to Exhibit 9(g)
to Post-Effective Amendment No. 33.
(h) Form of Schedule B (pricing and bookkeeping)
dated July 1, 1991, pertaining to Fidelity Money
Market Trust: U.S. Treasury Portfolio, is
incorporated herein by reference as Exhibit 9(h)
to Post-Effective Amendment No. 36.
(i) Form of Schedule B (pricing and bookkeeping)
dated July 1, 1991, pertaining to Fidelity Money
Market Trust: U.S. Government Portfolio, is
incorporated herein by reference as Exhibit 9(i)
to Post-Effective Amendment No. 36
(j) Form of Schedule B (pricing and bookkeeping)
dated July 1, 1991, pertaining to Fidelity Money
- 5 -
<PAGE>
Fidelity Money Market Trust
Market Trust: Domestic Money Market Portfolio, is
incorporated herein by reference as Exhibit 9(j)
to Post-Effective Amendment No. 36.
(k) Form of Schedule B (pricing and bookkeeping)
dated July 1, 1991, pertaining to Fidelity Money
Market Trust: Retirement Money Market Portfolio,
is incorporated herein by reference as Exhibit
9(k) to Post-Effective Amendment No. 36.
(l) Form of Schedule B (pricing and bookkeeping)
dated July 1, 1991, pertaining to Fidelity Money
Market Trust: Retirement Government Money Market
Portfolio, is incorporated herein by reference as
Exhibit 9(l) to Post-Effective Amendment No. 36.
10. Not applicable.
11. Not applicable.
12. Not applicable.
13. Not applicable.
14. The following plans apply to Fidelity Money Market Trust:
Retirement Money Market Portfolio and Retirement
Government Money Market Portfolio:
(a) IRA Custodial Agreement and Disclosure Statement
is incorporated herein as Exhibit 14(a) to
Post-Effective Amendment No. 36.
(b) Defined Contribution Retirement Plan and Trust
Agreement is incorporated herein as Exhibit 14(b)
to Post-Effective Amendment No. 36.
(c) Defined Benefit Pension Plan and Trust is
incorporated herein as Exhibit 14(c) to
Post-Effective Amendment No. 36.
(d) IRA Custodial Agreement and Disclosure Statement
("Group") is incorporated herein as Exhibit 14(d)
to Post-Effective Amendment No. 36.
(e) Master Plan for Savings and Investments is
incorporated herein as Exhibit 14(e) to
Post-Effective Amendment No. 36.
- 6 -
<PAGE>
Fidelity Money Market Trust
(f) 401(a) Prototype Plan for Tax-Exempt Employees is
incorporated herein as Exhibit 14(f) to
Post-Effective Amendment No. 36.
15. (a) Distribution and Service Plan of Fidelity Money
Market Trust: U.S. Treasury Portfolio is
incorporated herein by reference to Exhibit 15(a)
to Post-Effective Amendment No. 19.
(b) Distribution and Service Plan of Fidelity Money
Market Trust: U.S. Government Portfolio is
incorporated herein by reference to Exhibit 15(b)
to Post-Effective Amendment No. 19.
(c) Distribution and Service Plan of Fidelity Money
Market Trust: Domestic Money Market Portfolio is
incorporated herein by reference to Exhibit 15(c)
to Post-Effective Amendment No. 19.
(d) Distribution and Service Plan of Fidelity Money
Market Trust: Retirement Money Market Portfolio
is incorporated herein by reference to Exhibit
15(d) to Post-Effective Amendment No. 23.
(e) Distribution and Service Plan of Fidelity Money
Market Trust: Retirement Government Money Market
Portfolio is incorporated herein by reference to
Exhibit 15(e) to Post-Effective Amendment No. 23.
16. (a) The schedule for calculation of performance for
the Retirement Money Market Portfolio is
incorporated herein by reference to Exhibit 16(a)
to Post-Effective Amendment No. 23.
(b) The schedule for calculation of performance for
the Retirement Government Money Market Portfolio
is incorporated herein by reference to Exhibit
16(b) to Post-Effective Amendment No. 23.
(c) The schedule for calculation of performance for
the U.S. Treasury Portfolio is incorporated
herein by reference to Exhibit 16(c) to
Post-Effective Amendment No. 25.
(d) The schedule for calculation of performance for
the U.S. Government Portfolio is incorporated
herein by reference to Exhibit 16(d) to
Post-Effective Amendment No. 25.
- 7 -
<PAGE>
Fidelity Money Market Trust
(e) The schedule for calculation of performance for
the Domestic Money Market Portfolio is
incorporated herein by reference to Exhibit 16(e)
to Post-Effective Amendment No. 25.
- 8 -
<PAGE>
Fidelity Money Market Trust
Item 25. Persons Controlled by or under Common Control with
Registrant
------------------------------
The Board of Trustees of Registrant is the same as the boards of
the other Fidelity funds, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these
funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective Boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities
-------------------------------
August 31, 1994
Title of Class: Shares of Beneficial Interest
Number of
Name of Series Record Holders
--------------- --------------
Domestic Money Market Portfolio
U.S. Government Portfolio
U.S. Treasury Portfolio
Retirement Money Market Portfolio
Retirement Government Money Market 396,864
Portfolio
Item 27. Indemnification
---------------
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include
instances of willful misfeasance, bad faith, gross negligence, and
reckless disregard of the duties involved in the conduct of the particular
office involved.
- 9 -
<PAGE>
Fidelity Money Market Trust
Item 28. Business and Other Connections of Investment Adviser
--------------------------------
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during
the past two fiscal years, the following positions of a substantial
nature.
Edward C. Johnson 3d Chairman of the Executive
Committee of FMR; President and
Chief Executive Officer of FMR
Corp.; Chairman of the Board and
a Director of FMR, FMR Corp.,
FMR Texas Inc., Fidelity
Management & Research (U.K.)
Inc. and Fidelity Management &
Research (Far East) Inc.;
President and Trustee of funds
advised by FMR;
J. Gary Burkhead President of FMR; Managing
Director of FMR Corp.; President
and a Director of FMR Texas
Inc., Fidelity Management &
Research (U.K.) Inc. and
Fidelity Management & Research
(Far East) Inc.; Senior Vice
President and Trustee of funds
advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
Robert Beckwitt Vice President of FMR and of
funds advised by FMR.
David Breazzano Vice President of FMR (1993) and
of a fund advised by FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of
funds advised by FMR; Corporate
Preferred Group Leader.
Will Danoff Vice President of FMR (1993) and
of a fund advised by FMR.
- 10 -
<PAGE>
Fidelity Money Market Trust
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a
fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and
of a fund advised by FMR.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a
fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR
(1993) and of a fund advised by
FMR.
Daniel R. Frank Vice President of FMR and of
funds advised by FMR.
Gary L. French Vice President of FMR and
Treasurer of the funds advised
by FMR. Prior to assuming the
position as Treasurer he was
Senior Vice President, Fund
Accounting - Fidelity Accounting
& Custody Services Co.
Michael S. Gray Vice President of FMR and of
funds advised by FMR.
Lawrence Greenberg Vice President of FMR (1993).
Barry A. Greenfield Vice President of FMR and of a
fund advised by FMR.
William J. Hayes Senior Vice President of FMR;
Income/Growth Group Leader and
International Group Leader.
Robert Haber Vice President of FMR and of
funds advised by FMR.
- 11 -
<PAGE>
Fidelity Money Market Trust
Richard Haberman Senior Vice President of FMR
(1993).
Daniel Harmetz Vice President of FMR and of a
fund advised by FMR.
Ellen S. Heller Vice President of FMR.
John Hickling Vice President of FMR (1993) and
of funds advised by FMR.
Robert F. Hill Vice President of FMR; and
Director of Technical Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and
of a fund advised by FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR
(1993); and High Income Group
Leader.
Alan Leifer Vice President of FMR and of a
fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and
of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of
funds advised by FMR.
Malcom W. McNaught III Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR and
Director of Equity Trading.
David Murphy Vice President of FMR and of
funds advised by FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR.
- 12 -
<PAGE>
Fidelity Money Market Trust
Anne Punzak Vice President of FMR and of
funds advised by FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and
of a fund.
Thomas T. Soviero Vice President of FMR (1993).
Richard A. Spillane Vice President of FMR and of
funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR
(1993) and of funds advised by
FMR.
Thomas Steffanci Senior Vice President of FMR
(1993); and Fixed-Income
Division Head.
Gary L. Swayze Vice President of FMR and of
funds advised by FMR; and
Tax-Free Fixed-Income Group
Leader.
Thomas Sweeney Vice President of FMR (1993).
Donald Taylor Vice President of FMR (1993) and
of funds advised by FMR.
Beth F. Terrana Senior Vice President of FMR
(1993) and of funds advised by
FMR.
Joel Tillinghast Vice President of FMR (1993) and
of a fund advised by FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR;
Vice President of funds advised
by FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR
(1993) and of a fund advised by
FMR.
- 13 -
<PAGE>
Fidelity Money Market Trust
Guy E. Wickwire Vice President of FMR and of a
fund advised by FMR.
Arthur S. Loring Senior Vice President (1993),
Clerk and General Counsel of
FMR; Vice President, Legal of
FMR Corp.; and Secretary of
funds advised by FMR.
(4) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity
Management & Research Company. The directors and officers of the
Sub-Adviser have held the following positions of a substantial nature
during the past two fiscal years.
Edward C. Johnson 3d Chairman and Director of FMR Texas;
Chairman of the Executive Committee of
FMR; President and Chief Exective
Officer of FMR Corp.; Chairman of the
Board and a Director of FMR, FMR Corp.,
Fidelity Management & Research (Far
East) Inc. and Fidelity Management &
Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas;
President of FMR; Managing Director of
FMR Corp.; President and a Director of
Fidelity Management & Research (Far
East) Inc. and Fidelity Management &
Research (U.K.) Inc.; Senior Vice
President and Trustee of funds advised
by FMR.
Fred L. Henning Jr. Senior Vice President of FMR Texas;
Money Market Group Leader.
- 14 -
<PAGE>
Fidelity Money Market Trust
Robert Auld Vice President of FMR Texas (1993).
Leland Barron Vice President of FMR Texas and of funds
advised by FMR.
Robert Litterst Vice President of FMR Texas and of funds
advised by FMR (1993).
Thomas D. Maher Vice President of FMR Texas.
Burnell R. Stehman Vice President of FMR Texas and of funds
advised by FMR.
John J. Todd Vice President of FMR Texas and of funds
advised by FMR.
Sarah H. Zenoble Vice President of FMR Texas and of funds
advised by FMR.
Steven Jonas Treasurer of FMR Texas Inc. (1993),
Fidelity Management & Research (U.K.)
Inc. (1993) and Fidelity Management &
Research (Far East) Inc. (1993);
Treasurer and Vice President of FMR
(1993).
David C. Weinstein Secretary of FMR Texas; Clerk of
Fidelity Management & Research (U.K.)
Inc.; Clerk of Fidelity Management &
Research (Far East) Inc.
Item 29. Principal Underwriters
----------------------
(a) Fidelity Distributors Corporation (FDC) acts as
distributor for most funds advised by FMR and the following other funds:
- 15 -
<PAGE>
Fidelity Money Market Trust
CrestFunds, Inc.
The Victory Funds
ARK Funds
<TABLE>
<S>
<C> <C> <C>
(b) Positions and Offices Positions and Offices
Name and Principal Business With Underwriter With Registrant
Address* ------------ ------------
------------------
Edward C. Johnson 3d Director Trustee and
President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and None
Treasurer
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Secretary
Clerk
</TABLE>
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
--------------------------------
All accounts, books, and other documents required to be
maintained by Section 31a of the 1940 Act and the Rules promulgated
thereunder are maintained by Fidelity Management & Research Company or
Fidelity Investment Institutional Operations Company, 82 Devonshire
Street, Boston, MA 02109, or the fund's custodian Morgan Guaranty Trust
Company of New York, 61 Wall Street, 37th Floor, New York, N.Y.
- 16 -
<PAGE>
Fidelity Money Market Trust
Item 31. Management Services
-------------------
Not applicable.
Item 32. Undertakings
------------
(a) Not applicable
- 17 -
<PAGE>
