SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-62417)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 52 [X]
and
REGISTRATION STATEMENT (No. 811-2861)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 52 [ X]
Fidelity Money Market Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Siobhan Perkins
Morris, Nichols, Arsht & Tunnell
1201 N. Market Street, P.O. Box 1347
Wilmington, DE 19899-1347
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b)
( X ) on November 1, 1995 pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on ( ) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and filed the Notice required by such Rule
on October 13, 1995.
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS CLASS I
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page
2 .............................. Expenses
3 a .............................. Financial Highlights
b .............................. *
c .............................. Performance
d .............................. Cover Page
4 a i............................. Charter
ii........................... Investment Principles and Risks; Securities and
Investment Practices; Fundamental Investment
Policies and Restrictions
b .............................. Securities and Investment Practices
c .............................. Who May Want to Invest; Investment Principles
and Risks; Securities and Investment Practices
5 a .............................. Charter
b i............................. FMR and Its Affiliates
ii........................... FMR and Its Affiliates; Charter; Breakdown of
Expenses
iii.......................... Expenses; Breakdown of Expenses; Management
Fee
c .............................. FMR and Its Affiliates
d .............................. Charter; Breakdown of Expenses; Cover Page;
FMR and Its Affiliates
e .............................. FMR and its Affiliates; Breakdown of Expenses;
Other Expenses
f .............................. Expenses
g .............................. Expenses; FMR and Its Affiliates
5A .............................. *
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange
Restrictions
iii.......................... *
b ............................. FMR and Its Affiliates
c .............................. Charter
d .............................. Cover Page; Charter
e .............................. Cover Page; How to Buy Shares; How to Sell
Shares; Investor Services; Exchange Restrictions
f, g .............................. Dividends, Capital Gains, and Taxes
7 a .............................. Charter; Cover Page
b .............................. How to Buy Shares; Transaction Details
c .............................. *
d .............................. How to Buy Shares
e .............................. Transaction Details; Breakdown of Expenses
f .............................. Breakdown of Expenses; Other Expenses
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
FIDELITY INSTITUTIONAL
MONEY MARKET
FUNDS - CLASS I
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the applicable fund's most recent financial report and portfolio listing or
a copy of the Statement of Additional Information (SAI) dated November 1,
1995. The SAI has been filed with the Securities and Exchange Commission
(SEC) and is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, contact your
financial institution, or call Fidelity Client Services at 1-800-843-3001.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND 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.
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.
IMMI-pro-1195
FIDELITY INSTITUTIONAL CASH PORTFOLIOS (FICP):
Treasury (formerly Treasury II)
Government
Domestic
Money Market
DAILY MONEY FUND (DMF):
Treasury Only
FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS (FITECP):
Tax-Exempt
FIDELITY MONEY MARKET TRUST (FMMT):
Rated Money Market (formerly Domestic Money Market Portfolio)
PROSPECTUS
NOVEMBER 1, 1995
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Class I's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers institutional and corporate investors a convenient and
economical way to invest in a professionally managed portfolio of money
market instruments.
Each fund is designed for investors who would like to earn current income
while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Each of
Treasury Only, Treasury, and Government offers an added measure of
safety with its focus on U.S. Government securities.
None of the funds constitutes a balanced investment plan. However, because
they emphasize stability, they could be well-suited for a portion of your
investment.
Each fund is composed of multiple classes of shares. Each class of a fund
has a common investment objective and investment portfolio. Class I shares
do not have a sales charge and do not pay a distribution fee. Class II
shares do not have a sales charge, but do pay a 0.15% distribution fee.
Class III shares do not have a sales charge, but do pay a 0.25%
distribution fee. Because Class I shares have no sales charge and do not
pay a distribution fee, Class I shares are expected to have a higher total
return than Class II and Class III shares. You may obtain more information
about Class II and Class III shares, which are not offered through this
prospectus, from your financial institution, or by calling Fidelity Client
Services at 1-800-843-3001. Contact your financial institution to discuss
which class is appropriate for you.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
Class I shares of a fund.
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales None
charge
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR). FMR
is responsible for the payment of all other expenses of Treasury
Only and Rated Money Market with certain limited exceptions. Each fund,
other than Treasury Only and Rated Money Market, also incurs other expenses
for services such as maintaining shareholder records and furnishing
shareholder statements and financial reports.
Class I's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on estimated or historical expenses of
Class I of each fund and are calculated as a percentage of average net
assets of Class I of each fund.
Class I Operating Expenses
TREASURY Management fee 0.15%
A
12b-1 fee (Distribution fee) None
Other expenses 0.05
%
Total operating expenses 0.20%
A
GOVERNMENT Management fee 0.16%
A
12b-1 fee (Distribution fee) None
Other expenses 0.04
%
Total operating expenses 0.20%
A
A AFTER EXPENSE REDUCTIONS.
Class I Operating Expenses
DOMESTIC Management fee 0.13%
A
12b-1 fee (Distribution fee) None
Other expenses 0.07
%
Total operating expenses 0.20%
A
MONEY MARKET Management fee 0.14%
A
12b-1 fee (Distribution fee) None
Other expenses 0.04
%
Total operating expenses 0.18%
A
TREASURY ONLY Management fee 0.20%
A
12b-1 fee (Distribution fee) None
Other expenses 0.00
%
Total operating expenses 0.20%
A
TAX-EXEMPT Management fee 0.14%
A
12b-1 fee (Distribution fee) None
Other expenses 0.06
%
Total operating expenses 0.20%
A
RATED MONEY MARKET Management fee 0.20%
A
12b-1 fee (Distribution fee) None
Other expenses 0.00
%
Total operating expenses 0.20%
A
A AFTER EXPENSE REDUCTIONS.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment in Class I shares, assuming a 5% annual return and full
redemption at the end of each time period:
1 3 5 10
Year Years Years Years
Treasury $ 2 $ 6 $ 11 $ 26
Government $ 2 $ 6 $ 11 $ 26
Domestic $ 2 $ 6 $ 11 $ 26
Money Market $ 2 $ 6 $ 10 $ 23
Treasury Only $ 2 $ 6 $ 11 $ 26
Tax-Exempt $ 2 $ 6 $ 11 $ 26
Rated Money Market $ 2 $ 6 $ 11 $ 26
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class I of each fund to the extent
that total operating expenses (excluding interest, taxes, brokerage
commissions, and extraordinary expenses) are in excess of 0.20% (0.18%
for Money Market) of its average net assets. If these agreements were not
in effect, the management fees and total operating expenses for Class I of
each fund would have been the following amounts, as a percentage of average
net assets: 0.20% and 0.25% for Treasury; 0.20% and 0.24% for Government;
0.20% and 0.24% for Money Market; 0.20% and 0.27% for Domestic; 0.42% and
0.42% for Treasury Only; 0.20% and 0.26% for Tax-Exempt; and 0.42% and
0.42% for Rated Money Market.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow and each fund's financial
statements are included in each fund's Annual Report and have been audited
by independent accountants. Price Waterhouse LLP serves as
independent accountants for each of the FICP funds, while Coopers &
Lybrand L.L.P. serves as independent accountants for Tax-Exempt,
Treasury Only, and Rated Money Market. Their reports, as applicable, on the
financial statements and financial highlights are included in each Annual
Report. The financial statements, the financial highlights, and the reports
are incorporated by reference into the funds' SAI, which may be obtained
free of charge from Fidelity Client Services at the phone number
listed on page . Class II of each fund will comemnce operations on or about
November 1, 1995. Class III of Treasury Only, Tax-Exempt, and Rated Money
Market will commence operations on or about November 1, 1995.
FICP: TREASURY (FORMERLY TREASURY II) - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Selected Per-Share Data
2.Years ended March 31
1987A 1988 1989 1990 1991 1992 1993 1994 1995
3.Net asset value, beginning of
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
4.Income from Investment
Operations
5. Net interest income
.009 .064 .078 .088 .076 .053 .034 .030 .047
6.Less Distributions
7. From net interest income
(.009) (.064) (.078) (.088) (.076) (.053) (.034) (.030) (.047)
8.Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
9.Total return B
.93% 6.60 8.11 9.13 7.87 5.41 3.46 3.06 4.78
% % % % % % % %
10.RATIOS AND SUPPLEMENTAL DATA
11.Net assets, end of period (000
$ 26,314 $ 379,50 $ 658,06 $ 1,481,3 $ 3,281,6 $ 5,476,8 $ 5,589,6 $ 4,551,9 $ 4,688,1
omitted) 1 8 24 86 52 63 18 98
12.Ratio of expenses to average net
.20% .20 .20 .19 .18 .18 .18 .18 .18
assets
C % % % % % % % %
13.Ratio of expenses to average net
.99% .32 .26 .27 .25 .25 .23 .24 .25
assets before
C % % % % % % % %
expense reductions
14.Ratio of net interest income to
6.11% 6.46 7.92 8.63 7.50 5.12 3.38 3.01 4.71
average net assets
C % % % % % % % %
</TABLE>
A FEBRUARY 2, 1987 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1987
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: TREASURY (FORMERLY TREASURY II) - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C>
15.Selected Per-Share Data
16.Years ended March 31 1994A 1995
17.Net asset value, beginning of period $ 1.000 $ 1.000
18.Income from Investment Operations
19. Net interest income .012 .044
20.Less Distributions
21. From net interest income (.012) (.044)
22.Net asset value, end of period $ 1.000 $ 1.000
23.Total return B 1.21% 4.45
%
24.RATIOS AND SUPPLEMENTAL DATA
25.Net assets, end of period (000 omitted) $ 5,175 $ 585,57
1
26.Ratio of expenses to average net assets .50% .50
C %
27.Ratio of expenses to average net assets before expense reductions .56% .81
C %
28.Ratio of net interest income to average net assets 2.69% 4.91
C %
</TABLE>
A OCTOBER 22, 1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: GOVERNMENT - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
29.Selected Per-Share
Data
30.Years ended March 31
1986 A 1987 1988 1989 1990 1991 1992 1993 1994 1995
31.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
32.Income from
Investment Operations
33. Net interest income
.053 .063 .068 .079 .088 .077 .054 .035 .031 .048
34.Less Distributions
35. From net interest
(.053) (.063) (.068) (.079) (.088) (.077) (.054) (.035) (.031) (.048)
income
36.Net asset value, end of
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $1.000
period
37.Total return B
5.47% 6.51 6.98 8.19 9.15 7.94 5.55 3.56 3.13 4.86
% % % % % % % % %
38.RATIOS AND SUPPLEMENTAL
DATA
39.Net assets, end of
$ 511,720 $ 1,358,6 $ 1,878,7 $ 1,918,3 $ 2,815,6 $ 3,613,8 $ 4,603,7 $ 5,686,1 $ 3,764,5 $ 3,321,0
period (000 omitted)
59 86 42 22 38 81 66 44 66
40.Ratio of expenses to
.20% .20 .20 .20 .20 .18 .18 .18 .18 .18
average net assets
C % % % % % % % % %
41.Ratio of expenses to
.30% .25 .23 .24 .25 .25 .25 .24 .24 .24
average net assets before
C % % % % % % % % %
expense reductions
42.Ratio of net interest
7.81% 6.28 6.78 7.90 8.74 7.62 5.33 3.50 3.07 4.77
income
C % % % % % % % % %
to average net assets
</TABLE>
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: GOVERNMENT - CLASS III
<TABLE>
<CAPTION>
<S> <C>
43.Selected Per-Share Data
44.Year ended March 31 1995 A
45.Net asset value, beginning of period $ 1.000
46.Income from Investment Operations
47. Net interest income .045
48.Less Distributions
49. From net interest income (.045)
50.Net asset value, end of period $ 1.000
51.Total return B 4.57%
52.RATIOS AND SUPPLEMENTAL DATA
53.Net assets, end of period (000 omitted) $ 40,516
54.Ratio of expenses to average net assets .43%
C
55.Ratio of expenses to average net assets before expense reductions .66%
C
56.Ratio of net interest income to average net assets 5.13%
C
</TABLE>
A APRIL 4, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: DOMESTIC - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
57.Selected Per-Share Data
58.Years ended March 31
1990A 1991 1992 1993 1994 1995
59.Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
60.Income from Investment Operations
61. Net interest income
.035 .078 .054 .034 .031 .049
62.Less Distributions
63. From net interest income
(.035) (.078) (.054) (.034) (.031) (.049)
64.Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
65.Total return B
3.52% 8.11 5.50 3.50 3.14 4.97
% % % % %
66.RATIOS AND SUPPLEMENTAL DATA
67.Net assets, end of period (000 omitted)
$ 330,974 $ 355,36 $ 558,72 $ 804,35 $ 656,97 $ 771,93
9 7 4 6 7
68.Ratio of expenses to average net assets
.06% .18 .18 .18 .18 .18
C % % % % %
69.Ratio of expenses to average net assets before expense
.43% .30 .29 .26 .26 .27
reductions
C % % % % %
70.Ratio of net interest income to average net assets
8.44% 7.79 5.24 3.43 3.09 4.94
C % % % % %
</TABLE>
A NOVEMBER 3, 1989 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1990
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: DOMESTIC - CLASS III
<TABLE>
<CAPTION>
<S> <C>
71.Selected Per-Share Data
72.Year ended March 31 1995A
73.Net asset value, beginning of period $ 1.000
74.Income from Investment Operations
75. Net interest income .035
76.Less Distributions
77. From net interest income (.035)
78.Net asset value, end of period $ 1.000
79.Total return B 3.51%
80.RATIOS AND SUPPLEMENTAL DATA
81.Net assets, end of period (000 omitted) $ 26,545
82.Ratio of expenses to average net assets .50%
C
83.Ratio of expenses to average net assets before expense reductions .79%
C
84.Ratio of net interest income to average net assets 5.14%
C
</TABLE>
A JULY 19, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: MONEY MARKET - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
85.Selected Per-Share
Data
86.Years ended March 31
1986A 1987 1988 1989 1990 1991 1992 1993 1994 1995
87.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
88.Income from
Investment Operations
89. Net interest income
.059 .064 .069 .080 .089 .078 .055 .035 .032 .049
90.Less Distributions
91. From net interest
(.059) (.064) (.069) (.080) (.089) (.078) (.055) (.035) (.032) (.049)
income
92.Net asset value, end of
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
93.Total return B
6.01% 6.57 7.14 8.35 9.25 8.13 5.59 3.58 3.20 4.99
% % % % % % % % %
94.RATIOS AND SUPPLEMENTAL
DATA
95.Net assets, end of
$ 960,784 $ 1,569,1 $ 2,524,7 $ 2,627,4 $ 4,127,8 $ 4,706,9 $ 3,990,3 $ 4,332,9 $ 3,200,2 $ 5,130,1
period (000 omitted)
99 67 50 79 36 95 95 77 23
96.Ratio of expenses to
.19% .20 .20 .20 .20 .18 .18 .18 .18 .18
average net assets
C % % % % % % % % %
97.Ratio of expenses to
.28% .23 .23 .24 .24 .25 .24 .23 .23 .24
average net assets before
C % % % % % % % % %
expense reductions
98.Ratio of net interest
7.97% 6.33 6.95 8.11 8.82 7.80 5.42 3.50 3.15 5.00
income to average net
C % % % % % % % % %
assets
</TABLE>
A JULY 5, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: MONEY MARKET - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C>
99.Selected Per-Share Data
100.Years ended March 31 1994A 1995
101.Net asset value, beginning of period $ 1.000 $ 1.000
102.Income from Investment Operations
103. Net interest income .011 .046
104.Less Distributions
105. From net interest income (.011) (.046)
106.Net asset value, end of period $ 1.000 $ 1.000
107.Total return B 1.07% 4.66%
108.RATIOS AND SUPPLEMENTAL DATA
109.Net assets, end of period (000 omitted) $ 89,463 $ 457,286
110.Ratio of expenses to average net assets .50% .50%
C
111.Ratio of expenses to average net assets before expense reductions .55% .59%
C
112.Ratio of net interest income to average net assets 2.83% 4.94%
C
</TABLE>
A NOVEMBER 17,1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
TREASURY ONLY - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
113.Selected Per-Share Data
114.Years ended March 31
1991A 1992E 1993E 1994E 1995D
115.Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
116.Income from Investment Operations
.055 .045 .031 .032 .033
Net interest income
117.Less Distributions
(.055) (.045) (.031) (.032) (.033)
From net interest income
118.Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
119.Total returnB
5.63% 4.64% 3.10% 3.27% 3.38%
120.RATIOS AND SUPPLEMENTAL DATA
121.Net assets, end of period (000 omitted)
$ 705,543 $ 1,197,559 $ 1,047,791 $ 1,049,170 $ 1,266,285
122.Ratio of expenses to average net assets
.03% .20% .20% .20% .20%
C C
123.Ratio of expenses to average net assets before expense
.42% .42% .42% .42% .42%
reductions
C C
124.Ratio of net interest income to average net assets
6.34% 4.43% 3.05% 3.22% 5.02%
C C
</TABLE>
A OCTOBER 3, 1990 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1991
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
D AUGUST 1, 1994 TO MARCH 31, 1995
E YEAR ENDED JULY 31
TAX-EXEMPT - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
125.Selected
Per-Share Data
126.Years ended
1986A 1987E 1988E 1989E 1990E 1991E 1992E 1993E 1994E 1995D
March 31
127.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
128.Income from
.044 .042 .046 .058 .058 .053 .040 .026 .024 .027
Investment Operations
Net interest income
129.Less Distributions
(.044) (.042) (.046) (.058) (.058) (.053) (.040) (.026) (.024) (.027)
From net interest
income
130.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
131.Total returnB
4.51% 4.28 4.72 5.97 6.00 5.40 4.02 2.66 2.44 2.74%
% % % % % % % %
132.RATIOS AND SUPPLEMENTAL DATA
133.Net assets, end of
$ 1,162,9 $ 1,850,0 $ 2,080,8 $ 2,006,8 $ 1,984,6 $ 2,116,8 $ 2,556,9 $ 2,239,0 $ 2,390,6 $ 1,876,815
period
39 53 46 67 36 41 95 31 63
(000 omitted)
134.Ratio of expenses
.19% .20 .20 .20 .20 .18 .18 .18 .18 .18%C
to average
C % % % % % % % %
net assets
135.Ratio of expenses
.25% .23 .22 .24 .23 .23 .25 .24 .24 .26%C
to average net assets
C % % % % % % % %
before expense
reductions
136.Ratio of net
5.18% 4.20 4.65 5.80 5.82 5.28 3.90 2.62 2.41 3.20%C
interest income to
C % % % % % % % %
average net assets
</TABLE>
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
D JUNE 1, 1994 TO MARCH 31, 1995
E YEAR ENDED MAY 31.
RATED MONEY MARKET (FORMERLY DOMESTIC MONEY MARKET PORTFOLIO) - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
137.Fiscal years ended
1986B 1987B 1988B 1989B 1990B 1991B 1992A 1993 1994 1995
August 31
138.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
139.Income from
.069 .062 .070 .089 .080 .063 .034 .029 .033 .054
Investment Operations
Net interest income
140.Less Distributions
(.069) (.062) (.070) (.089) (.080) (.063) (.034) (.029) (.033) (.054)
From net interest income
141.Net asset value, end
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
142.Total return D
7.07 6.42 7.27 9.26 8.27 6.44 3.44% 2.93 3.34 5.53
% % % % % % % % %
143.RATIOS AND SUPPLEMENTAL DATA
144.Net assets, end of
$ 1,300,8 $ 1,231,7 $ 1,035,7 $ 1,273,7 $ 944,78 $ 851,87 $ 765,721 $ 611,410 $ 399,33 $ 300,86
period (000 omitted)
32 68 56 45 2 2 3 3
145.Ratio of expenses to
.42 .42 .42 .42 .42 .42 .42% .42 .42 .42
average net assets
% % % % % % c % % %
146.Ratio of net interest
6.87 6.22 7.00 8.91 8.01 6.38 4.04% 2.89 3.24 5.33
income to average net
% % % % % % c % % %
assets
</TABLE>
A NOVEMBER 1, 1991 TO AUGUST 31, 1992
B YEAR ENDED OCTOBER 31.
C ANNUALIZED
D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn before
taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance call Fidelity Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Treasury, Government, Domestic, and
Money Market are diversified funds of Fidelity Institutional Cash
Portfolios, an open-end management investment company organized as a
Delaware business trust on May 30, 1993. Treasury Only is a diversified
fund of Daily Money Fund, an open-end management investment company
organized as a Delaware business trust on September 29, 1993. Tax-Exempt is
a diversified fund of Fidelity Institutional Tax-Exempt Cash Portfolios, an
open-end management investment company organized as a Delaware business
trust on January 29, 1992. Rated Money Market is a diversified fund of
Fidelity Money Market Trust, an open-end management investment company
organized as a Delaware business trust on December 29, 1994. There is a
remote possibility that one fund might become liable for a misstatement in
the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent will mail proxy materials in advance, including a voting
card and information about the proposals to be voted on. For shareholders
of all funds (other than Rated Money Market) , you are entitled to
one vote for each share you own. For shareholders of Rated Money Market,
the number of votes you are entitled to is based upon the dollar value of
your investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
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, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
The funds are managed by FMR, which handles their business affairs. FMR
Texas, Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of August 31 , 19 95 , FMR advised funds having approximately
22 million shareholder accounts with a total value of more than
$ 328 billion.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations Company
(FIIOC) performs transfer agent servicing functions for Class I shares of
each fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas.
Members of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
UMB Bank, n.a. (UMB) is Tax-Exempt's transfer agent, although it employs
FIIOC to perform these functions for Class I of Tax-Exempt. UMB is located
at 1010 Grand Avenue, Kansas City, Missouri.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers .
INVESTMENT PRINCIPLES AND RISKS
TREASURY ONLY seeks as high a level of current income as is consistent with
the security of principal and liquidity, and to maintain a constant net
asset value per share (NAV) of $1.00.
The fund invests only in U.S. Treasury securities, including bills, notes,
bonds and other direct obligations of the U.S. Treasury that are guaranteed
as to payment of principal and interest by the full faith and credit of the
U.S. Government.
The fund will invest in those securities whose interest is specifically
exempt from state and local income taxes under federal law; such interest
is not exempt from federal income tax.
TREASURY seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
Under normal conditions, the fund invests 100% of its total assets in U.S.
Treasury bills, notes and bonds and other direct obligations of the U.S.
Treasury. The fund may also engage in repurchase agreements backed by those
obligations.
GOVERNMENT seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in U.S. Government obligations issued or guaranteed as to
principal and interest by the U.S. Government, including bills, notes,
bonds and other U.S. Treasury debt securities, and instruments issued or
guaranteed by U.S. Government instrumentalities or agencies, and
repurchase agreements backed by those obligations. The fund currently
intends to invest exclusively in these instruments.
DOMESTIC seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
The fund invests in U.S. dollar-denominated money market instruments of
domestic issuers rated in the highest rating category by at least two
nationally recognized rating services, or by one if only one rating service
has rated an obligation. The fund may purchase unrated obligations
determined to be of equivalent quality pursuant to procedures adopted by
the Board of Trustees. Under normal conditions, the fund will invest more
than 25% of its total assets in obligations of companies in the financial
services industry.
RATED MONEY MARKET seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in obligations of the U.S. Government, its agencies and
instrumentalities, repurchase agreements backed by those obligations, and
other high-quality, U.S. dollar-denominated money market instruments of
domestic and foreign issuers rated in the highest rating category by at
least two nationally recognized rating services. Under normal conditions,
the fund will invest more than 25% of its total assets in obligations of
companies in the financial services industry.
MONEY MARKET seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in high-quality, U.S. dollar-denominated money market
instruments of domestic and foreign issuers rated in the highest rating
category by at least two nationally recognized rating services, or by one
if only one rating service has rated an obligation. The fund may purchase
unrated obligations determined to be of equivalent quality pursuant to
procedures adopted by the Board of Trustees. Under normal conditions, the
fund will invest more than 25% of its total assets in obligations of
companies in the financial services industry.
TAX-EXEMPT seeks as high a level of interest income exempt from federal
income tax as is consistent with a portfolio of high-quality, short-term
municipal obligations selected on the basis of liquidity and stability of
principal.
The fund invests primarily in high-quality, short-term municipal
securities, but also may invest in high-quality, long-term fixed, variable,
or floating rate instruments (including tender option bonds) whose features
give them interest rates, maturities, and prices similar to short-term
instruments. Securities in which the fund invests must be rated in the
highest rating category for short-term securities by at least one
nationally recognized rating service and rated in one of the two highest
categories for short-term securities by another nationally recognized
rating service if rated by more than one nationally recognized rating
service; or, if unrated, judged by FMR to be equivalent quality to those
securities rated in the highest short-term rating category, pursuant to
procedures adopted by the Board of Trustees. The fund's policy regarding
limiting investments to the highest rating category may be changed upon 90
days' prior notice to shareholders.
The fund, under normal conditions, will invest so that at least 80% of its
income distributions is exempt from federal income tax. The fund does not
currently intend to purchase municipal obligations that are subject to the
federal alternative minimum tax.
FMR normally invests the fund's assets according to its investment strategy
and does not expect to invest in federally taxable obligations. The fund
also reserves the right to hold a substantial amount of uninvested cash or
to invest more than normally permitted in federally taxable obligations for
temporary, defensive purposes.
COMMON POLICIES
When you sell your shares of the funds, they should be worth the same
amount as when you bought them. Of course, there is no guarantee that the
funds will maintain a stable $1.00 share price. The funds follow
industry-standard guidelines on the quality and maturity of their
investments, which are designed to help maintain a stable $1.00 share
price. The funds will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities they buy. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and the
value of your investment) to change.
The funds earn income at current money market rates. Each fund stresses
preservation of capital, liquidity, and income (tax-free income in the
case of Tax-Exempt) and does not seek the higher yields or capital
appreciation that more aggressive investments may provide. Each fund's
yield will vary from day to day, and generally reflect s
current short-term interest rates and other market conditions. It is
important to note that neither the funds nor their yields are
guaranteed by the U.S. G overnment.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Current holdings and recent investment strategies are described in each
fund's financial reports, which are sent to shareholders twice a year. For
a free SAI or financial report, call Fidelity Client Services at
1-800-843-3001.
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
the U.S. Government, corporations, financial institutions, municipalities,
local and state governments, and other entities. These obligations may
carry fixed, variable, or floating interest rates. Some money market
securities employ a trust or other similar structure to modify the
maturity, price characteristics, or quality of financial assets so that
they are eligible investments for money market funds. A security's credit
may be enhanced by a bank, insurance company, or other entity. If the
structure does not perform as intended, adverse tax or investment
consequences may result.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt obligations
issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government. Not all U.S. Government securities
are backed by the full faith and credit of the United States. For example,
securities issued by the Federal Farm Credit Bank or by the Federal
National Mortgage Association are supported by the instrumentality'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.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues, and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. A fund may own a municipal
security directly or through a participation interest.
FOREIGN SECURITIES may involve different risks than domestic securities,
including risks relating to the political and economic conditions of the
foreign country involved, which could affect the payment of principal or
interest. Issuers of foreign securities include foreign governments,
corporations, and banks.
RESTRICTIONS: Treasury, Government, Domestic, Treasury Only, and Tax-Exempt
may not invest in foreign securities. Money Market and Rated Money Market
may not invest in foreign securities unless they are denominated in U.S.
dollars.
ASSET-BACKED SECURITIES 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.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other money market
securities, although they may be more volatile.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in the
fund's yield or in the market value of its assets.
RESTRICTION: Treasury Only, Treasury, and Tax-Exempt do not
intend to engage in reverse repurchase agreements.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and
possessions such as Guam, the Virgin Islands, and Puerto Rico, and their
political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, a fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTION : A fund may not purchase a security if, as a result,
more than 10% of its net assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of a fund's assets.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type.
RESTRICTIONS: Each fund (other than Treasury, Treasury Only and Tax-Exempt)
may not invest more than 5% of its total assets in any one issuer,
except that, each fund (other than Treasury, Treasury Only and Tax-Exempt)
may invest up to 10% of its total assets in the highest quality securities
of a single issuer for up to three business days.
With respect to 75% of its total assets, Tax-Exempt may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
These limitations do not apply to U.S. Government securities.
Tax-Exempt may invest more than 25% of its total assets in tax-free
securities that finance similar types of projects.
BORROWING. Each fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: Each of Treasury, Government, Domestic, Money Market,
Treasury Only, and Rated Money Market may borrow only for temporary
or emergency purposes, or engage in reverse repurchase agreements, but not
in an amount exceeding 331/3% of its total assets. Tax-Exempt may borrow
only for temporary or emergency purposes, but not in an amount exceeding
331/3% of its total assets.
LENDING . A fund may lend money to other funds advised by FMR.
RESTRICTION: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Treasury Only seeks as high a level of current income as is consistent with
the security of principal and liquidity, and to maintain a constant NAV of
$1.00.
Each of Treasury, Government, Domestic, Money Market, and Rated Money
Market seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
Tax-Exempt seeks as high a level of interest income exempt from federal
income tax as is consistent with a portfolio of high-quality, short-term
municipal obligations selected on the basis of liquidity and stability of
principal. The fund, under normal conditions, will invest so that at least
80% of its income distributions is exempt from federal income tax.
With respect to 75% of its total assets, Tax-Exempt may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
Each of Treasury, Government, Domestic, Money Market, Treasury Only, and
Rated Money Market may borrow only for temporary or emergency
purposes, or engage in reverse repurchase agreements, but not in an amount
exceeding 331/3% of its total assets. Tax-Exempt may borrow only for
temporary or emergency purposes, but not in an amount exceeding 331/3% of
its total assets.
E ach of Domestic, Money Market, and Rated Money Market
will invest more than 25% of its total assets in obligations of companies
in the financial services industry.
Loans, in the aggregate, may not exceed 331/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in that
class's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained below.
MANAGEMENT FEE
FMR HAS SUB-ADVISORY AGREEMENTS with FMR Texas, which has primary
responsibility for providing investment management for each fund, while FMR
retains responsibility for providing the fund s with other management
services. FMR pays FMR Texas 50% of its management fee (before expense
reimbursements) for these services. In the fiscal year ended
March 31 , 1995 (August 31, 1995 for Rated Money Market), FMR
paid FMR Texas the following percentages of each fund's average net assets.
Fund Name Percentage of
Average
Net Assets
Treasury 0.10%
Government 0.10%
Domestic 0.10%
Money Market 0.10%
Tax-Exempt 0.10%
Treasury Only 0.21%
Rated Money Market 0.21%
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Class I shares of each of Treasury, Government,
Domestic, Money Market, Treasury Only, and Rated Money Market (the Taxable
Funds). Fidelity Service Co. (FSC) calculates the NAV and dividends for
Class I of each Taxable Fund, and maintains the general accounting
records for Class I of each Taxable Fund. These expenses are paid by FMR on
behalf of Rated Money Market and Treasury Only pursuant to its management
contract. In the fiscal year ended March 31, 1995, the
following fees were paid to FIIOC and FSC:
Fund Name Percentage of Percentage of
Class I's
the Fund's
Average Net Average Net
Assets
Assets Paid to
Paid to FIIOC FSC
Treasury 0.03% 0.01%
Government 0.01% 0.01%
Domestic 0.03% 0.01%
Money Market 0.01% 0.01%
UMB has entered into sub-arrangements pursuant to which FIIOC performs
transfer agency, dividend disbursing and shareholder services for Class I
of Tax-Exempt. UMB has entered into sub-arrangements pursuant to which FSC
calculates the NAV and dividends for Class I of Tax-Exempt and maintains
Tax-Exempt's general accounting records. All of the fees are paid to FIIOC
and FSC by UMB, which is reimbursed by Class I or the fund, as appropriate,
for such payments.
In the fiscal year ended March 31, 1995, fees paid by UMB to
FIIOC on behalf of Class I of Tax-Exempt amounted to 0.02% of Class
I's average net assets, and fees paid by UMB to FSC on behalf of Tax-Exempt
amounted to 0.01% of its average net assets.
Class I of each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each plan
recognizes that FMR may use its resources, including management fees, to
pay expenses associated with the sale of Class I shares. This may
include reimbursing FDC for payments to third parties, such as banks
or broker-dealers, that provide shareholder support services or engage in
the sale of the funds' Class I shares. The Board of Trustees of each fund
has not authorized such payments.
Each fund, other than Rated Money Market and Treasury Only, also pays other
expenses, such as legal, audit, and custodian fees; in some instances,
proxy solicitation costs; and the compensation of trustees who are not
affiliated with Fidelity. Rated Money Market and Treasury Only also pay
other expenses such as brokerage fees and commissions, interest on
borrowings (only Treasury Only), taxes, and the compensation of trustees
who are not affiliated with Fidelity.
YOUR ACCOUNT
HOW TO BUY SHARES
If you are investing through a securities dealer, financial or other
institution (Financial Institution), contact that Financial Institution
directly. Certain features of a fund may be modified when it is made
available through a program of services offered by a Financial Institution,
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. In particular, a broker may charge
transaction fees with respect to the purchase and sale of fund shares.
It is the responsibility of your Financial Institution to submit
purchases and redemptions in order for you to receive the next determined
NAV.
EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The
funds are managed to keep share prices stable at $1.00. Class I
shares are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. NAV is normally calculated at
12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m.
Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00
p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m.
Eastern time for Treasury.
Share certificates are not available for the funds.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Client Services
c/o Fidelity Institutional Money Market Funds
FIIOC
P.O. Box 1182
Boston, MA 02103-1182
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Place a purchase order and wire money into your
account, or
(small solid bullet) Open an account by exchanging from the same class of
any fund that is offered through this prospectus.
INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE
SYSTEM. Checks will not be accepted as a means of investment.
BY WIRE . For wiring information and instructions, you should call
the Financial Institution through which you trade or if you trade directly
through Fidelity, call Fidelity Client Services. There is no fee imposed by
the funds for wire purchases. However, if you buy shares through a
Financial Institution, the Financial Institution may impose a fee for wire
purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
In order to receive same-day acceptance of your investment, you must call
Fidelity Client Services and place your order between 8:30 a.m. and 12:00
p.m. Eastern time for Tax-Exempt and Treasury Only ; 8:30 a.m. and
3:00 p.m. Eastern time for Government, Domestic and Money
Market; 8:30 a.m. and 4:00 p.m. Eastern time for Rated Money Market; and
8:30 a.m. and 5:00 p.m. Eastern time for Treasury, on days the funds are
open for business.
If Fidelity Client Services is not advised of your purchase prior to the
stated cutoff time, your purchase will not be accepted by the transfer
agent. All wires must be received by the transfer agent in good order at
the applicable fund's designated wire bank before the close of the Federal
Reserve Wire System on that day .
In order to purchase shares of Treasury after 3:00 p.m. Eastern time, you
must contact Fidelity Client Services one week in advance to make
late-trading arrangements. In order to receive same-day acceptance of your
purchase order for Treasury after 3:00 p.m. Eastern time, you must call
Fidelity Client Services as early in the day as possible. Wired money for
purchase orders for Treasury placed after 3:00 p.m. Eastern time that is
not properly identified with a wire reference number will be returned to
the bank from which it was wired and will not be credited to your account.
You are advised to wire funds as early in the day as possible, and to
provide advance notice to Fidelity Client Services for purchases over $10
million ($5 million for Treasury Only).
You will earn dividends on the day of your investment, provided (i) you
telephone Fidelity Client Services and place your trade between 8:30
a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury
Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic, Money
Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m.
Eastern time for Treasury, on days the fund s are open for
business, and (ii) the fund's designated wire bank receives the wire before
the close of the Federal Reserve Wire System on the day your purchase order
is accepted by the transfer agent.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000,000*
MINIMUM BALANCE $1,000,000
* THE MINIMUM INITIAL INVESTMENT OF $1 MILLION MAY BE WAIVED IF YOUR
AGGREGATE BALANCE IN THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS IS
GREATER THAN $10 MILLION. PLEASE CONTACT FIDELITY CLIENT SERVICES FOR MORE
INFORMATION REGARDING THIS WAIVER.
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for
Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government,
Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated
Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury.
BY TELEPHONE. Redemption requests may be made by calling Fidelity Client
Services at the phone number listed on page .
You must designate on your account application the U.S. commercial bank
account(s) into which you wish the redemption proceeds to be deposited.
Fidelity Client Services will then notify you that this feature has been
activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should send
a letter of instruction, including a signature guarantee, to Fidelity
Client Services at the address shown on page .
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
There is no fee imposed by the funds for wiring of redemption proceeds.
However, if you buy shares through a Financial Institution, the Financial
Institution may impose a fee for wire redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System to
your bank account of record. If your redemption request is received by
telephone between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt
and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time fo r
Government, Domestic, Money Market, and Rated Money Market;
and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, redemption
proceeds will normally be wired on the same day your redemption request is
received by the transfer agent.
A fund reserves the right to take up to seven days to pay you if making
immediate payment would adversely affect the fund.
In order to redeem shares of Treasury after 3:00 p.m. Eastern time, you
must contact Fidelity Client Services one week in advance to make late
trading arrangements.
You are advised to place your trades as early in the day as possible.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in a fund. Call Fidelity Client
Services at 1-800-843-3001 if you need additional copies of financial
reports or historical account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for institutions that wish to open multiple accounts (a master
account and sub-accounts). You may be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be
determined based on the level of services to be rendered.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
Based on prior approval of each fund, dividends relating to Class I shares
redeemed during the month can be distributed on the day of redemption. Each
fund reserves the right to limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The funds offer two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your application, you
will be assigned this option.
2. CASH OPTION. You will be sent a wire for your dividend and capital gain
distributions, if any.
Dividends will be reinvested at each fund's Class I NAV on the last day of
the month. Capital gain distributions, if any, will be reinvested at the
NAV as of the record date of the distribution.
TAXES
As with any investment, you should consider how an investment in the funds
could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt earns is
distributed to shareholders as income dividends. Interest that is federally
tax-free remains tax-free when it is distributed. Distributions from the
Taxable Funds, however, are subject to federal income tax and may also be
subject to state or local taxes. If you live outside the United States,
your distributions from these funds could also be taxed by the country in
which you reside.
For federal tax purposes, the income and short-term capital gain
distributions from each of Treasury, Government, Domestic, Money Market,
Treasury Only, and Rated Money Market are taxed as dividends; long-term
capital gain distributions, if any, are taxed as long-term capital gains.
However, for shareholders of Tax-Exempt, gain on the sale of tax-free bonds
results in taxable distributions. Short-term capital gains and a portion of
the gain on bonds purchased at a discount are taxed as dividends; long-term
capital gain distributions, if any, are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally 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 securities and other mortgage-backed securities are notable exceptions
in most states. In addition, some states may impose intangible property
taxes. You should consult your own tax adviser for details and up-to-date
information on the tax laws in your state.
During the fiscal year ended March 31, 1995, 27% of Treasury's, 20% of
Government's, 100% of Treasury Only's, 2% of Domestic's, and 1% of Money
Market's income distributions were derived from interest on U.S. Government
securities which is generally exempt from state income tax. During the
fiscal year ended August 31, 1995, 4% of Rated Money Market's income
distributions w as derived from interest on U.S. Government
s ecurities which is generally exempt from state income tax.
Distributions are taxable when they are paid, whether you take them in cash
or reinvest them. However, distributions declared in December and paid in
January are taxable as if they were paid on December 31.
Every January, the transfer agent will send you and the IRS a statement
showing the taxable distributions paid to you in the previous year.
A portion of Tax-Exempt's dividends may be free from state or local taxes.
Income from investments in your state are often tax-free to you. Each year,
the transfer agent will send you a breakdown of Tax-Exempt's income from
each state to help you calculate your taxes.
During the fiscal year ended March 31, 1995, 100% of
Tax-Exempt's income dividends was free from federal income tax.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day
that both the Federal Reserve Bank of New York (New York Fed) (for all
Taxable Funds) or the Federal Reserve Bank of Kansas City (Kansas City Fed)
(for Tax-Exempt) and the New York Stock Exchange (NYSE) are open. The
following holiday closings have been scheduled for 1996: New Year's Day,
Martin Luther King 's Birthday, Washington's Birthday, Good Friday,
Memorial Day, Independence Day, Labor Day, Columbus Day, Thanksgiving Day,
and Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the Kansas City Fed, the New York Fed, or the NYSE
may modify its holiday schedule at any time. On any day that the Kansas
City Fed, the New York Fed, or the NYSE closes early, the principal
government securities markets close early (such as on days in advance of
holidays generally observed by participants in such markets), or as
permitted by the SEC, the right is reserved to advance the time on that day
by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the Kansas City Fed, the New York Fed, or the NYSE is closed, each
fund's NAV may be affected on days when investors do not have access to the
fund to purchase or redeem shares. Certain Fidelity funds may follow
different holiday closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Class I of each
fund is computed by adding Class I's pro rata share of the value of the
fund's investments, cash, and other assets, subtracting Class I's pro rata
share of the value of the fund's liabilities, subtracting the liabilities
allocated to Class I, and dividing the result by the number of Class I
shares of that fund that are outstanding. Each fund values its portfolio
securities on the basis of amortized cost. This method minimizes the effect
of changes in a security's market value and helps each fund maintain a
stable $1.00 share price.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of Class I are its NAV.
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 a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer
agent may only be liable for losses resulting from unauthorized
transactions if they do not follow reasonable procedures designed to verify
the identity of the caller. Fidelity and the transfer agent will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of the confirmation statements
immediately after receipt. If you do not want the ability to redeem and
exchange by telephone, call the transfer agent for instructions. Additional
documentation may be required from corporations, associations and certain
fiduciaries.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Fidelity
Client Services in advance of transactions in excess of $10 million
( $5 million for Treasury Only. )
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made by federal funds
wire; checks will not be accepted for purchases.
(small solid bullet) If your wire is not received by the close of the
Federal Reserve Wire System, you could be liable for any losses or fees a
fund or the transfer agent has incurred or for interest and penalties.
Net interest income for dividend purposes is determined by FSC on a daily
basis and shall be payable to shareholders of record at the time of its
declaration (including, for this purpose, holders of Class I shares
purchased, but excluding holders of shares redeemed, on that day).
The income declared for Treasury is based on estimates of net interest
income for the fund. Actual income may differ from estimates, and
differences, if any, will be included in the calculation of subsequent
dividends.
Shareholders of record as of 12:00 p.m. Eastern time for Tax-Exempt and
Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, Money
Market, and Rated Money Market ; and 5:00 p.m. Eastern time for Treasury,
will be entitled to dividends declared that day.
Shares of Rated Money Market purchased between 3:00 p.m. and 4:00
p.m. Eastern time begin to earn income dividends on the following
business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) Shares of Rated Money Market redeemed before
3:00 p.m. Eastern time do not receive the dividend declared on the
day of redemption ; s hares of Rated Money Market redeemed
between 3:00 p.m. and 4:00 p.m. Eastern time do receive the
dividends declared on the day of redemption.
(small solid bullet) Shares of Treasury, Government, Domestic, Money
Market, Treasury Only, and Tax-Exempt do not receive the dividend declared
on the day of redemption.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
When the NYSE, the Kansas City Fed, or the New York Fed 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, a fund may suspend redemption or postpone payment
dates. In cases of suspension of the right of redemption, the request for
redemption may either be withdrawn or payment may be made based on the NAV
next determined after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 due to redemption, the
account may be closed and the proceeds may be wired to your bank account of
record. You will be given 30 days' notice that your account will be closed
unless it is increased to the minimum.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging Class I shares of any
fund offered through this prospectus at no charge for Class I shares of any
other fund offered through this prospectus.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services at the number listed on page
between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and
Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for
Government, Domestic, Money Market, and Rated Money Market; and 8:30 a.m.
and 5:00 p.m. Eastern time for Treasury.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name,
account number, the number of shares to be redeemed, and the name of the
fund to be purchased. Written requests for exchange should be mailed to
Fidelity Client Services at the address on page .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class I shares will be redeemed
at the next determined NAV after your order is received and accepted by the
transfer agent. Shares of the fund to be acquired will be purchased at its
next determined NAV after redemption proceeds are made available. You
should note that, under certain circumstances, a fund may take up to seven
days to make redemption proceeds available for the exchange purchase of
shares of another fund. In addition, please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) You will earn dividends in the acquired fund in
accordance with the fund's customary policy, normally on the day the
exchange request is received.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund s or FDC. This Prospectus and the related SAI
do not constitute an offer by the fund s or by FDC to sell or to buy
shares of the fund s to any person to whom it is unlawful to make
such offer.
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS I
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page; Table of Contents
12 ............................ *
13 a - c ............................ Investment Policies and Limitations
d ............................ Portfolio Transactions
14 a - c ............................ Trustees and Officers
15 a ............................ *
b ............................ Description of the Trusts
c ............................ Trustees and Officers
16 a i ............................ FMR
ii ............................ Trustees and Officers
iii ............................ Management Contracts
b,c,d ............................ Management Contracts
e ............................ *
f ............................ Distribution and Service Plans
g ............................ *
h ............................ Description of the Trusts
i ............................ Management Contracts
17 a ............................ Portfolio Transactions
b ............................ Portfolio Transactions
c ............................ Portfolio Transactions
d, e ............................ *
18 a ............................ Description of the Trusts
b ............................ *
19 a ............................ Additional Purchase, Exchange and Redemption
Information
b ............................ Additional Purchase, Exchange and Redemption
Information; Valuation
c ............................ *
20 Distributions and Taxes
21 a, b ............................ Distribution and Service Plans; Management
Contracts
c ............................ *
22 ............................ Performance
23 ............................ Financial Statements
</TABLE>
* Not Applicable
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS: CLASS I
FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
Domestic, Government, Money Market, Treasury
FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS:
Tax-Exempt
DAILY MONEY FUND:
Treasury Only
FIDELITY MONEY MARKET TRUST:
Rated Money Market
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 1, 1995
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
November 1, 1995). Please retain this document for future reference. The
funds' financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended March 31, 1995 (August 31, 1995
for Rated Money Market) , are incorporated herein by reference. To
obtain an additional copy of the Prospectus or the Annual Report, please
call Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Distribution and Service Plans
Description of the Trusts
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT FOR TAXABLE FUNDS
Fidelity Investments Institutional Operations Company (FIIOC)
TRANSFER AGENT FOR TAX-EXEMPT
UMB Bank, n.a. (UMB)
I MM I -ptb-1195
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 a fund'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 a fund'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 each fund's investment policies and
limitations.
Each fund'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 each fund. 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.
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: TREASURY
THE FOLLOWING ARE TREASURY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940
Act ;
(3) borrow money, except that the fund 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 value of the fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iii) The fund may borrow money only from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser. The fund will not purchase any security while
borrowings representing more than 5% of its total assets are outstanding.
The fund 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 fund's total assets.
(iv) The fund 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.
(v) The fund 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 a reorganization, consolidation, or merger.
(vi) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(vii) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(viii) The fund 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.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
Treasury, under normal conditions, invests 100% of its total assets in
U.S. Treasury bills, notes and bonds and other direct obligations of the
U.S. Treasury. The fund may also engage in repurchase agreements backed by
those obligations. These operating policies may be changed upon 90 days'
notice to shareholders.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
GOVERNMENT
THE FOLLOWING ARE GOVERNMENT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940
Act ;
(3) borrow money, except that the fund 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 value of the fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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
fund 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 fund 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 fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(v) The fund 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.
(vi) The fund 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 fund 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 a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund 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 issuers together own more than 5% of such issuer's
securities.
(x i i) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by FMR or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: DOMESTIC
THE FOLLOWING ARE DOMESTIC'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940 Act ;
(3) borrow money, except that the fund 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 value of the fund'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
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 Act 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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
fund 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 fund 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 fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(v) The fund 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.
(vi) The fund 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 fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund'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 fund 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 a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(x) The fund 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.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: MONEY
MARKET
THE FOLLOWING ARE MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under th e 1940 Act;
(3) borrow money, except that the fund 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 value of the fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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
fund 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 fund 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 fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(v) The fund 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.
(vi) The fund 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 fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or fund 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 fund 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 a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(x) The fund 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.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF TAX-EXEMPT
THE FOLLOWING ARE TAX-EXEMPT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, 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
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the 1940 Act ;
(3) make short sales of securities;
(4) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions;
(5) borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount not to exceed 33 1/3% of the value
of the fund's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed 33 1/3% of the
fund's assets by reason of a decline in net assets will be reduced within
three days (exclusive of Sundays and Holidays) to the extent necessary to
comply with the 33 1/3% limitation;
(6) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government, or any of its agencies,
instrumentalities, territories or possessions, or issued or guaranteed by a
state government or political subdivision thereof) if as a result more than
25% of the value of its total assets would be invested in securities of
companies having their principal business activities in the same industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in municipal bonds or other obligations secured by real estate or
interest therein;
(9) purchase or sell physical commodities;
(10) 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); or
(11) invest in oil, gas or other mineral exploration or development
programs.
(12) The fund 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 fund.
For purposes of limitations (1) and (7), FMR identifies the issuer of a
security depending on the terms and conditions of the security. In
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an issuing
political subdivision are separated from those of other political entities;
and whether a governmental body is guaranteeing the security.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(ii) The fund 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.
(iii) The fund 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.
(iv) The fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(v) The fund 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.
(vi) The fund does not currently intend to 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 fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF TREASURY ONLY
THE FOLLOWING ARE TREASURY ONLY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the 1940 Act ;
(2) borrow money, except that the fund 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 fund'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;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; or
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund 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 fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
representing more than 5% of its total assets are outstanding. The fund
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 fund's total assets.
(ii) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities.
(iii) The fund does not currently intend to 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 fund.
Subject to revision upon 90 days' notice to shareholders, Treasury Only
will not engage in reverse repurchase agreements.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF RATED MONEY MARKET
THE FOLLOWING ARE RATED MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS
SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, 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,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the 1940 Act;
(3) borrow money, except that the fund 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 fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund 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 fund
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.
(10) write or purchase any put or call option. 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.
(11) The fund 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 fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund 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
fund 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 fund 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 fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(iii) The fund 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 fund 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 fund does not currently intend to lend assets other than securities
to other parties, except by lending money (up to 10% of the fund'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.)
(vi) The fund 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 securities of
business enterprises that, including predecessors, have a record of less
than three years continuous operation.
(vii) The fund 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.
(v ii i) The fund does not currently intend to purchase securities on
margin, except that the fund 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 fund 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 a reorganization,
consolidation, or merger.
( x ) The fund does not currently intend to 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 fund.
For purposes of limitation (vi), pass-through entities and other special
purposes vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund 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 include 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 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 entities providing the
credit support.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund 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 fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund 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 fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund 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.
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, U.S. branches and agencies of foreign banks, and foreign branches
of foreign banks. A fund may also 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, foreign government agencies or instrumentalities, and U.S. and
foreign financial institutions, including savings and loan institutions,
insurance companies, mortgage bankers, and real estate investment trusts,
as well as banks.
The obligations of foreign branches 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 on 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, evidence of
ownership of portfolio securities may be held outside of the United States
and a fund 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 and agencies 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 involve certain additional risks. 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, or the ability to honor a credit
commitment. Additionally, there may be less public information available
about foreign entities. 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.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt does not
intend to invest in securities whose interest is federally taxable.
However, from time to time on a temporary basis, Tax-Exempt may invest a
portion of its assets in fixed-income obligations whose interest is subject
to federal income tax.
Should Tax-Exempt invest in federally taxable obligations, it would
purchase securities that, in FMR's judgment, are of high quality. These
obligations would include those issued or guaranteed by the U.S. Government
or its agencies or instrumentalities and repurchase agreements backed by
such obligations.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before state legislatures that
would affect the state tax treatment of Tax-Exempt's distributions. If such
proposals were enacted, the availability of municipal obligations and the
value of Tax-Exempt's holdings would be affected, and the Trustees would
reevaluate Tax-Exempt's investment objectives and policies.
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 fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund'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 fund's rights and
obligations relating to the investment).
Investments currently considered by the funds 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, municipal lease obligations, 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, a fund were in a
position where more than 10% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the
SEC, each fund has received permission to lend money to, and borrow money
from, other funds advised by FMR or its affiliates. Tax-Exempt will
participate in the interfund borrowing program only as a borrower.
Interfund loans and borrowings normally extend overnight, but can have a
maximum duration of seven days. Loans may be called on one day's notice.
Treasury, Treasury Only, Domestic, Money Market, Government, and Rated
Money Market will lend through the program only when the returns are higher
than those available from other short-term instruments (such as repurchase
agreements). A fund will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund 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. Treasury, Government,
and Treasury Only do not currently intend to participate in the program as
lenders.
MARKET DISRUPTION RISK. The value of municipal securities may be affected
by uncertainties in the municipal market related to legislation or
litigation involving the taxation of municipal securities or the rights of
municipal securities holders in the event of a bankruptcy. Municipal
bankruptcies are relatively rare, and certain provisions of the U.S.
Bankruptcy Code governing such bankruptcies are unclear and remain
untested. Further, the application of state law to municipal issuers could
produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the
municipal securities market generally, certain specific segments of the
market, or the relative credit quality of particular securities. Any of
these effects could have a significant impact on the prices of some or all
of the municipal securities held by a fund, making it more difficult for
the fund to maintain a stable net asset value per share.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security, or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor any
other regulatory authority has ruled definitively on certain legal issues
presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the funds.
MUNICIPAL LEASES and participation interests therein may take the form of a
lease, an installment purchase, or a conditional sale contract and are
issued by state and local governments and authorities to acquire land or a
wide variety of equipment and facilities. Generally, the funds will not
hold such obligations directly as a lessor of the property, but will
purchase a participation interest in a municipal obligation from a bank or
other third party. A participation interest gives a fund a specified,
undivided interest in the obligation in proportion to its purchased
interest in the total amount of the obligation.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set
forth requirements that states or municipalities must meet to incur debt.
These may include voter referenda, interest rate limits, or public sale
requirements. Leases, installment purchases, or conditional sale contracts
(which normally provide for title to the leased asset to pass to the
governmental issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting their constitutional and
statutory requirements for the issuance of debt. Many leases and contracts
include "non-appropriation clauses" providing that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis. Non-appropriation
clauses free the issuer from debt issuance limitations.
MUNICIPAL SECTORS:
ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open transmission
access to any electricity supplier, although it is not presently known to
what extent competition will evolve. Other risks include: (a) the
availability and cost of fuel, (b) the availability and cost of capital,
(c) the effects of conservation on energy demand, (d) the effects of
rapidly changing environmental, safety, and licensing requirements, and
other federal, state, and local regulations, (e) timely and sufficient rate
increases, and (f) opposition to nuclear power.
HEALTH CARE INDUSTRY. The health care industry is subject to regulatory
action by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for the
health care industry is payments from the Medicare and Medicaid programs.
As a result, the industry is sensitive to legislative changes and
reductions in governmental spending for such programs. Numerous other
factors may affect the industry, such as general and local economic
conditions; demand for services; expenses (including malpractice insurance
premiums); and competition among health care providers. In the future, the
following elements may adversely affect health care facility operations:
adoption of legislation proposing a national health insurance program;
other state or local health care reform measures; medical and technological
advances which dramatically alter the need for health services or the way
in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; and efforts by
employers, insurers, and governmental agencies to reduce the costs of
health insurance and health care services.
HOUSING. Housing revenue bonds are generally issued by a state, county,
city, local housing authority, or other public agency. They generally are
secured by the revenues derived from mortgages purchased with the proceeds
of the bond issue. It is extremely difficult to predict the supply of
available mortgages to be purchased with the proceeds of an issue or the
future cash flow from the underlying mortgages. Consequently, there are
risks that proceeds will exceed supply, resulting in early retirement of
bonds, or that homeowner repayments will create an irregular cash flow.
Many factors may affect the financing of multi-family housing projects,
including acceptable completion of construction, proper management,
occupancy and rent levels, economic conditions, and changes to current laws
and regulations.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student loans.
Bonds issued to supply educational institutions with funds are subject to
the risk of unanticipated revenue decline, primarily the result of
decreasing student enrollment or decreasing state and federal funding.
Among the factors that may lead to declining or insufficient revenues are
restrictions on students' ability to pay tuition, availability of state and
federal funding, and general economic conditions. Student loan revenue
bonds are generally offered by state (or substate) authorities or
commissions and are backed by pools of student loans. Underlying student
loans may be guaranteed by state guarantee agencies and may be subject to
reimbursement by the United States Department of Education through its
guaranteed student loan program. Others may be private, uninsured loans
made to parents or students which are supported by reserves or other forms
of credit enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student loan
revenue bonds are impacted by numerous factors, including the rate of
student loan defaults, seasoning of the loan portfolio, and student
repayment deferral during periods of forbearance. Other risks associated
with student loan revenue bonds include potential changes in federal
legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidies
currently in effect.
WATER AND SEWER. Water and sewer revenue bonds are often considered to have
relatively secure credit as a result of their issuer's importance, monopoly
status, and generally unimpeded ability to raise rates. Despite this, lack
of water supply due to insufficient rain, run-off, or snow pack is a
concern that has led to past defaults. Further, public resistance to rate
increases, costly environmental litigation, and federal environmental
mandates are challenges faced by issuers of water and sewer bonds.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways or other transit facilities.
Airport bonds are dependent on the general stability of the airline
industry and on the stability of a specific carrier who uses the airport as
a hub. Air traffic generally follows broader economic trends and is also
affected by the price and availability of fuel. Toll road bonds are also
affected by the cost and availability of fuel as well as toll levels, the
presence of competing roads, and the general economic health of the area.
Fuel costs and availability also affect other transportation-related
securities, as does the presence of alternate forms of transportation, such
as public transportation.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
1.QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the funds may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be 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 are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier
securities are those deemed to be in the second highest rating category
(e.g., Standard & Poor's A-2 or SP-2). Split-rated securities may be
determined to be either first or second tier based on applicable
regulations.
Each of Treasury, Government, Domestic, Money Market, Treasury Only, and
Rated Money Market may not invest more than 5% of its total assets in
second tier securities. In addition, each of Treasury, Government,
Domestic, Money Market, Treasury Only, and Rated Money Market fund 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.
Each fund 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. When determining the
maturity of a security, a fund may look to an interest rate reset or demand
feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original 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. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with 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, a fund 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, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, each fund anticipates holding restricted
securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
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, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund 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 fund's assets and may be
viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short. Short sales could be used to protect the net
asset value per share of the fund in anticipation of increased interest
rates, without sacrificing the current yield of the securities sold short.
If a fund 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 hold such securities while the short sale is
outstanding. The fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining, and closing short sales
against the box.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or another entity in determining whether to purchase a
security supported by a letter of credit guarantee, insurance or other
source of credit or liquidity. In evaluating the credit of a foreign bank
or other foreign entities, FMR will consider whether adequate public
information about the entity is available and whether the entity may be
subject to unfavorable political or economic developments, currency
controls, or other government restrictions that might affect its ability to
honor its commitment.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities), 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 government
agencies also may be stripped in this fashion.
Privately stripped government securities 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
government agencies also may be stripped in this fashion.
Because of the SEC's views on privately stripped government securities, a
fund must evaluate them as it would non-government securities pursuant to
regulatory guidelines applicable to all money market funds. A fund
currently 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, have been judged to be of equivalent quality by FMR pursuant to
procedures adopted by the Board of Trustees.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its daily dividend, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR has granted investment management authority to the
sub-adviser (see the section entitled "Management Contracts"), and the
sub-adviser is 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 a
fund 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 funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds 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; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy and
performance of accounts; effect securities transactions, and perform
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 funds 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 funds may be useful to FMR in rendering investment management
services to the funds 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 funds. 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
funds 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
funds 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 funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with FBSI and Fidelity Brokerage
Services (FBS), subsidiaries of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by nonaffiliated,
qualified brokerage firms for similar services. From September 1992 through
December 1994, FBS operated under the name Fidelity Brokerage Services
Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an
unlimited liability company and assumed the name FBS. Prior to September 4,
1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL)
as a wholly owned subsidiary of Fidelity International Limited (FIL).
Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family own,
directly or indirectly, more than 25% of the voting common stock of FIL.
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 fund transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For fiscal years ended March 31, 1995, 1994, and 1993 (August 31,
1995, 1994, and 1993 for Rated Money Market), the funds paid no
brokerage commissions. During fiscal year ended March 31, 1995
(August 31, 1995 for Rated Money Market) , the funds paid no fees to
brokerage firms that provided research.
From time to time, the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund 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 fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
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 and accounts
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 fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Company (FSC) normally determines a fund's net asset value
per share (NAV) at 12:00 p.m. Eastern time for Tax-Exempt and
Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and
Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money
Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. The
valuation of portfolio securities is determined as of these times for the
purpose of computing each fund's NAV.
Portfolio securities and other assets are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its current market value. The amortized cost value of an instrument
may be higher or lower than the price a fund would receive if it sold the
instrument.
During periods of declining interest rates, a fund's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing each fund's instruments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. Each fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page .
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize each fund'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 a
fund'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.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Yield and total return fluctuate in
response to market conditions and other factors.
YIELD CALCULATIONS. To compute a class 's yield for a period, 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. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. An effective
yield may also be calculated by compounding the base period return over a
one-year period. In addition to the current yield, the funds may quote
yields in advertising based on any historical seven-day period. Yields for
each class of the funds are calculated on the same basis as other
money market funds, as required by applicable regulations.
Yield information may be useful in reviewing a class's performance and in
providing a basis for comparison with other investment alternatives.
However, each class's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
class's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates a class's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing a class's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
A class's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment before taxes to equal the class's tax-free
yield. Tax-equivalent yields are calculated by dividing a class's yield by
the result of one minus a stated federal or combined federal and state tax
rate. If only a portion of a class's yield is tax-exempt, only that portion
is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 19 95 . It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of hypothetical
tax-exempt obligations yielding from 2.00 % to 8.00 %. Of
course, no assurance can be given that a class will achieve any specific
tax-exempt yield. While Tax-Exempt invests principally in obligations whose
interest is exempt from federal income tax, other income received by the
fund may be taxable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
19 95 TAX RATES AND TAX-EQUIVALENT YIELDS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Taxable Income* Federal If individual tax-exempt yield is:
Income
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Tax 2.00 % 3.00 % 4.00 % 5.00 % 6.0 % 7.00 % 8.00 %
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Return Joint Return Bracket** Then taxable equivalent yield is:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 23,351 - $ 36,001 - 28.0 % 2.78 % 4.17 % 5.56 % 6.94 % 8.33 % 9.72 % 11.11 %
$ 56,500 $ 94,250
$ 56,501 - $ 94,251 - 31.0 % 2.90 % 4.35 % 5.80 % 7.25 % 8.70 % 10.14 % 11.59 %
$ 117,950 $ 143,600
$ 117,951 - $ 143,601 - 36.0 % 3.13 % 4.69 % 6.25 % 7.81 % 9.38 % 10.94 % 12.50 %
$ 256,500 $ 256,500
$ 256,501 - $ 256,501 - 39.6 % 3.31 % 4.97 % 6.62 % 8.28 % 9.93 % 11.59 % 13.25 %
</TABLE>
* Net amount subject to federal income tax after deductions and exemptions.
Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions, limitations
on itemized deductions, and other credits, exclusions, and adjustments
which may increase a taxpayer's marginal tax rate. An increase in a
shareholder's marginal tax rate would increase that shareholder's
tax-equivalent yield.
Tax-Exempt may invest a portion of its assets in obligations that are
subject to state or federal income taxes. When the fund invests in these
obligations, its tax-equivalent yield will be lower. In the table above,
the tax-equivalent yields are calculated assuming investments are 100%
federally and state tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a class's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the class's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment 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 value had been constant over the period. For example, a
cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that performance is not constant
over time, but changes from year to year, and that average annual total
returns represent averaged figures as opposed to the actual year-to-year
performance of a class.
In addition to average annual total returns, a class may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, 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 (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL RESULTS. The following table shows 7-day yields, tax-equivalent
yields, and total returns for Class I of each fund for the period ended
March 31 , 1995 (August 31, 1995 for Rated Money Market).
Tax-Exempt's Class I tax-equivalent yield is based on a 36% federal income
tax rate.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Seven-Day Tax One Five Life of One Five Life of
Yield Equivalent Year Years Fund*/Te Year Years Fund*/Te
Yield n Years n Years
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rated Money Market - 5.46% N/A 5.53% 4.60% 6.11% 5.53% 25.20% 80.99%
Class I
Treasury - Class I 5.98% N/A 4.78% 4.90% 6.03% 4.78% 27.03% 61.24%
Government - Class I 6.01% N/A 4.86% 4.99% 6.32% 4.86% 27.60% 81.07%
Domestic - Class I 6.06% N/A 4.97% 5.03% 5.31% 4.97% 27.81% 32.32%
Money Market - Class I 6.07% N/A 4.99% 5.09% 6.43% 4.99% 28.15% 83.60%
Treasury Only - Class I 5.80% N/A 4.65% N/A 4.45% 4.65% N/A 21.65%
Tax-Exempt - Class I 3.94% 6.16% 3.18% 3.65% 4.41% 3.18% 19.61% 51.86%
</TABLE>
* Life of Fund figures are from commencement of operations of each fund,
except Rated Money Market which reports a Ten Years figure. Commencement of
operations for each fund, other than Rated Money Market, are as follows:
Treasury - February 2, 1987; Government - July 25, 1985; Domestic -
November 3, 1989; Money Market - July 5, 1985; Treasury Only - October 3,
1990; and Tax-Exempt - July 25, 1985.
Note: If FMR had not reimbursed certain fund expenses during these periods,
the total returns would have been lower and the yields for Class I of each
fund would have been:
Fund Yield Tax-Equivalent
Yield
Rated Money Market - Class I N/A N/A
Treasury - Class I 5.91% N/A
Government - Class I 5.95% N/A
Domestic - Class I 5.97% N/A
Money Market - Class I 6.01% N/A
Treasury Only - Class I 5.58% N/A
Tax-Exempt - Class I 3.86% 6.03 %
The following tables show the income and capital elements of each fund's
Class I cumulative total return. The tables compare each fund's Class I
return to the record of the Standard & Poor's Composite Index of 500 Stocks
(S&P 500), the Dow Jones Industrial Average (DJIA), and the cost of living
(measured by the Consumer Price Index, or CPI) over the same period. The
CPI information is as of the month end closest to the initial investment
date for each fund. The S&P 500 and DJIA comparisons are provided to show
how each class's total return compared to the record of a broad average of
common stocks and a narrower set of stocks of major industrial companies,
respectively, over the same period. Of course, since each fund invests in
short-term fixed-income securities, common stocks represent a different
type of investment from the fund. Common stocks generally offer greater
growth potential than the funds, but generally experience greater price
volatility, which means greater potential for loss. In addition, common
stocks generally provide lower income than fixed-income investments, such
as the funds. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the funds' returns, do not include
the effect of paying brokerage commissions or other costs of investing.
RATED MONEY MARKET
HISTORICAL FUND RESULTS
During the ten year period ended August 31, 1995, a hypothetical
$10,000 investment in Class I of Rated Money Market would have grown to
$ 18,099 , assuming all distributions were reinvested. This was a
period of fluctuating interest rates and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in Class I of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
8/31/86 10,000 742 0 10,742 13,914 14,773 10,157
8/31/87 10,000 1,408 0 11,408 18,718 21,377 10,593
8/31/88 10,000 2,217 0 12,217 15,389 16,894 11,019
8/31/89 10,000 3,335 0 13,335 21,428 23,615 11,537
8/31/90 10,000 4,456 0 14,456 20,358 23,431 12,185
8/31/91 10,000 5,450 0 15,450 25,836 28,277 12,648
8/31/92* 10,000 6,123 0 16,123 27,885 31,172 13,046
8/31/93 10,000 6,596 0 16,596 32,132 35,985 13,407
8/31/94 10,000 7,151 0 17,151 33,890 39,634 13,796
8/31/95 10,000 8,099 0 18,099 41,158 47,913 14,157
</TABLE>
* The fiscal year end of the fund changed from October 31 to August 31 in
July 1992 .
Explanatory Notes: With an initial investment of $10,000 made on August
31, 1985 , the net amount invested in Class I shares of the fund was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (their cash
value at the time they were reinvested), amounted to $ 18,099 . If
distributions had not been reinvested, the amount of distributions earned
from Class I shares of the fund over time would have been smaller, and cash
payments (dividends) for the period would have amounted to $ 5,949 .
The fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
TREASURY
HISTORICAL FUND RESULTS
During the period from February 2, 1987 (commencement of operations) to
March 31, 1995, a hypothetical $10,000 investment in Class I of Treasury
would have grown to $ 16,124 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class I
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1987* $ 10,000 $ 93 $ 0 $ 10,093 $ 10,694 $ 10,731 $ 10,081
1988 10,000 759 0 10,759 9,804 9,560 10,477
1989 10,000 1,632 0 11,632 11,583 11,432 10,998
1990 10,000 2,693 0 12,693 13,816 14,014 11,574
1991 10,000 3,692 0 13,692 15,805 15,668 12,140
1992 10,000 4,433 0 14,433 17,552 17,950 12,527
1993 10,000 4,932 0 14,932 20,229 19,633 12,914
1994 10,000 5,389 0 15,389 20,528 21,366 13,237
1995 10,000 6,124 0 16,124 23,722 25,101 13,615
</TABLE>
* From February 2, 1987 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on February
2, 1987, the net amount invested in Class I shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 16,124 . If
distributions had not been reinvested, the amount of distributions earned
from Class I shares of the fund over time would have been smaller, and cash
payments (dividends) for the period would have amounted to $ 4,790 .
The fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
GOVERNMENT
HISTORICAL FUND RESULTS
During the period from July 25, 1985 (commencement of operations) through
March 31, 1995, a hypothetical investment of $10,000 in Class I of
Government would have grown to $ 18,107 , assuming all distributions
were reinvested. This was a period of fluctuating interest rates and the
figures below should not be considered representative of the dividend
income or capital gain or loss that could be realized from an investment in
Class I of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,000 $ 547 $ 0 $ 10,547 $ 12,812 $ 13,855 $ 10,093
1987 10,000 1,233 0 11,233 16,170 18,170 10,399
1988 10,000 2,017 0 12,017 14,824 16,188 10,807
1989 10,000 3,001 0 13,001 17,514 19,358 11,345
1990 10,000 4,191 0 14,191 20,890 23,729 11,939
1991 10,000 5,318 0 15,318 23,897 26,530 12,523
1992 10,000 6,167 0 16,167 26,540 30,395 12,922
1993 10,000 6,743 0 16,743 30,588 33,245 13,321
1994 10,000 7,267 0 17,267 31,039 36,179 13,655
1995 10,000 8,107 0 18,107 35,869 42,502 14,045
</TABLE>
* From July 25, 1985 (commencement of operations).
** From month end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on July 25,
1985, the net amount invested in Class I shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 18,107 . If
distributions had not been reinvested, the amount of distributions earned
from Class I shares of the fund over time would have been smaller, and cash
payments (dividends) for the period would have amounted to $ 5,954 .
The fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
DOMESTIC
HISTORICAL FUND RESULTS
During the period from November 3, 1989 (commencement of operations) to
March 31, 1995, a hypothetical $10,000 investment in Class I of Domestic
would have grown to $ 13,232 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class I
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1990* $ 10,000 $ 352 $ 0 $ 10,352 $ 10,189 $ 10,451 $ 10,247
1991 10,000 1,192 0 11,192 11,655 11,685 10,748
1992 10,000 1,808 0 11,808 12,944 13,387 11,091
1993 10,000 2,222 0 12,222 14,919 14,642 11,433
1994 10,000 2,605 0 12,605 15,139 15,935 11,720
1995 10,000 3,232 0 13,232 17,494 18,720 12,054
</TABLE>
* From November 3, 1989 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on November
3, 1989, the net amount invested in Class I shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 13,232 . If
distributions had not been reinvested, the amount of distributions earned
from Class I shares of the fund over time would have been smaller, and cash
payments (dividends) for the period would have amoun t ed to
$ 2,807 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
MONEY MARKET
HISTORICAL FUND RESULTS
During the period from July 5, 1985 (commencement of operations) to March
31, 1995, a hypothetical $10,000 investment in Class I of Money Market
would have grown to $ 18,360 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class I
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,000 $ 601 $ 0 $ 10,601 $ 12,848 $ 14,126 $ 10,112
1987 10,000 1,297 0 11,297 16,217 18,525 10,418
1988 10,000 2,103 0 12,103 14,867 16,504 10,827
1989 10,000 3,113 0 13,113 17,564 19,736 11,366
1990 10,000 4,327 0 14,327 20,950 24,192 11,961
1991 10,000 5,492 0 15,492 23,965 27,048 12,546
1992 10,000 6,358 0 16,358 26,615 30,988 12,946
1993 10,000 6,945 0 16,945 30,675 33,894 13,346
1994 10,000 7,486 0 17,486 31,128 36,885 13,680
1995 10,000 8,360 0 18,360 35,971 43,332 14,071
</TABLE>
* From July 5, 1985 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on July 5,
1985, the net amount invested in Class I shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 18,360 . If
distributions had not been reinvested, the amount of distributions earned
from Class I shares of the fund over time would have been smaller, and cash
payments (dividends) for the period would have amounted to $ 6,093 .
The fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
TREASURY ONLY
HISTORICAL FUND RESULTS
During the period from October 3, 1990 (commencement of operations) to
March 31, 1995, a hypothetical $10,000 investment in Class I of Treasury
Only would have grown to $ 12,165 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class I
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3 /31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1991* $ 10,000 $ 353 $ 0 $ 10,353 $ 12,114 $ 11,848 $ 10,173
1992 10,000 913 0 10,913 13,454 13,573 10,497
1993 10,000 1,285 0 11,285 15,506 14,846 10,821
1994 10,000 1,624 0 11,624 15,735 16,157 11,093
1995+ 10,000 2,165 0 12,165 18,183 18,980 11,409
</TABLE>
* From October 3, 1990 (commencement of operations).
+ The fiscal year end of the fund changed from July 31 to March 31 in
February 1995.
Explanatory Notes: With an initial investment of $10,000 made on October 3,
1990, the net amount invested in Class I shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested) amounted to $ 12,165 . If distributions
had not been reinvested, the amount of distributions earned from Class I
shares of the fund over time would have been smaller, and cash payments
(dividends) for the period would have amounted to $ 1,963 . The fund
did not distribute any capital gains during the period. Tax consequences of
different investments have not been factored into the above figures.
TAX-EXEMPT
HISTORICAL FUND RESULTS
During the period from July 25, 1985 (commencement of operations) to March
31, 1995, a hypothetical $10,000 investment in Class I of Tax-Exempt would
have grown to $ 15,186 , assuming all distributions were reinvested.
This was a period of fluctuating interest rates and the figures below
should not be considered representative of the dividend income or capital
gain or loss that could be realized from an investment in Class I of the
fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3 /31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,000 $ 368 $ 0 $ 10,368 $ 12,812 $ 13,855 $ 10,093
1987 10,000 814 0 10,814 16,170 18,170 10,399
1988 10,000 1,323 0 11,323 14,824 16,188 10,807
1989 10,000 1,958 0 11,958 17,514 19,358 11,345
1990 10,000 2,697 0 12,697 20,890 23,729 11,939
1991 10,000 3,411 0 13,411 23,897 26,530 12,523
1992 10,000 3,973 0 13,973 26,540 30,395 12,922
1993 10,000 4,369 0 14,369 30,588 33,245 13,321
1994 10,000 4,718 0 14,718 31,039 36,179 13,655
1995+ 10,000 5,186 0 15,186 35,869 42,502 14,045
</TABLE>
* From July 25, 1985 (commencement of operations)
** From month end closest to initial investment date.
+ The fiscal year end of the fund changed from May 31 to March 31 in
February 1995.
Explanatory Notes: With an initial investment of $10,000 made on July 25,
1985, the net amount invested in Class I shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 15,186 . If
distributions had not been reinvested, the amount of distributions earned
from Class I shares of the fund over time would have been smaller, and cash
payments (dividends) for the period would have amounted to $ 4,186 .
The fund did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
PERFORMANCE COMPARISONS. A fund'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 that 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 funds based on
yield. In addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance indices
prepared by Lipper or other organizations. When comparing these indices, it
is important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. 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.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
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.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND
AVERAGES(trademark)/Government, which is reported in the MONEY FUND
REPORT(trademark), covers over 229 money market funds; IBC/Donoghue's MONEY
FUND AVERAGES(trademark)/All Taxable, which is reported in the MONEY FUND
REPORT(trademark), covers over 749 money market funds; IBC/Donoghue's MONEY
FUND AVERAGES(trademark)/All Tax-Free, which is reported in the MONEY FUND
REPORT(trademark), covers over 387 money market funds.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; model portfolios or
allocations; saving for college or other goals; charitable giving; and the
Fidelity credit card. In addition, Fidelity may quote or reprint financial
or business publications and periodicals as they relate to current economic
and political conditions, fund management, portfolio composition,
investment philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity may
also reprint, and use as advertising and sales literature, articles from
Fidelity Focus, a quarterly magazine provided free of charge to Fidelity
fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
As of August 31 , 1995, FMR advised over $ 26.5 billion in
tax-free fund assets, $ 79 billion in money market fund assets,
$ 218 billion in equity fund assets, $ 56 billion in
international fund assets, and $ 23 billion in Spartan fund assets.
The funds may reference the growth and variety of money market mutual funds
and the adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity fund
assets under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
In addition to performance rankings, each class of a fund may
compare its total expense ratio to the average total expense ratio of
similar funds tracked by Lipper. A class 's total expense ratio is a
significant factor in comparing bond and money market investments because
of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE 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 class'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 fund 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) a fund suspends the
redemption of the shares to be exchanged as permitted under the 1940 Act or
the rules and regulations thereunder, or a 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.
In the prospectus, each fund 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, a fund would be unable to invest
effectively in accordance with its investment objective and policies, or
would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Because each fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends received deduction. A portion of each fund's
dividends derived from certain U.S. government obligations may be exempt
from state and local taxation.
To the extent that each fund's income is designated as federally tax-exempt
interest, the daily dividends declared by the fund are also federally
tax-exempt. Short-term capital gains are distributed as dividend income,
but do not qualify for the dividends-received deduction. These gains will
be taxed as ordinary income.
Each fund will send each shareholder a notice in January describing the tax
status of dividend and capital gain distributions (if any) for the prior
year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as social security
benefits, may be subject to federal income tax on up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
Tax-Exempt purchases municipal securities that are free from federal income
tax based on opinions of counsel regarding their tax status. These opinions
generally will be based on covenants by the issuers or other parties
regarding continuing compliance with federal tax requirements. If at any
time the covenants are not complied with, distribution to shareholders of
interest on a security could become federally taxable retroactive to the
date a security was issued. For certain types of structured securities,
opinions of counsel may also be based on the effect of the structure on the
federal tax treatment of the income.
As a result of the Tax Reform Act of 1986, interest on certain "private
activity" securities is subject to the federal alternative minimum tax
(AMT), although the interest continues to be excludable from gross income
for other tax purposes. Interest from private activity securities will be
considered tax - exempt for purposes of Tax-Exempt's policy on
investing so that at least 80% of its income is free from federal income
tax. Interest from private activity securities is a tax preference item for
the purposes of determining whether a taxpayer is subject to the AMT and
the the amount of AMT to be paid, if any. Private activity securities
issued after August 7, 1986 to benefit a private or industrial user or to
finance a private facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after April
30, 1993 and short-term capital gains distributed by the fund are taxable
to shareholders as dividends, not as capital gains. Dividend distributions
resulting from a recharacterization of gain from the sale of bonds
purchased with market discount after April 30, 1993 are not considered
income for the purposes of Tax-Exempt's policy of investing so that at
least 80% of its income is free from federal income tax. Tax - Exempt
may distribute any net realized short-term capital gains and taxable market
discounts once a year or more often, as necessary, to maintain its net
asset value at $1.00 per share.
It is the current position of the staff of the SEC that a fund that uses
the term "tax-exempt" in its name may not derive more than 20% of its
income from municipal obligations that pay interest that is a preference
item for purposes of the AMT. According to this position, at least 80% of
Tax-Exempt's income would have to be exempt from the AMT as well as from
federal income taxes.
Corporate investors should note that a tax preference item for the purposes
of the corporate AMT is 75% of the amount by which adjusted current
earnings (which includes tax-exempt interest) exceeds the alternative
minimum taxable income of the corporation. If a shareholder receives an
exempt-interest dividend and sells shares at a loss after holding them for
a period of six months or less, the loss will be disallowed to the extent
of the amount of the exempt-interest dividend.
CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its net asset value at $1.00 per share. Treasury, Government,
Domestic, Money Market, Treasury Only, and Rated Money Market do not
anticipate earning long-term capital gains on securities held by each fund.
Tax-Exempt does not anticipate distributing long-term capital gains.
As of fiscal year ended March 31, 1995, Treasury had capital loss
carryforwards aggregating approximately $1,198,000. The loss carryforward
for Treasury, of which $82,000, $109,000, $142,000, $1,000, $330,000, and
$534,000 will expire on March 31, 1996, 1997, 1999, 2001, 2002 and 2003,
respectively, is available to offset future capital gains.
As of fiscal year ended March 31, 1995, Government had capital loss
carryforwards aggregating approximately $1,104,600. The loss carryforward
for Government, of which $19,400, $200, $53,000, $271,000, and $761,000
will expire on March 31, 1996, 1997, 2001, 2002, and 2003, respectively, is
available to offset future capital gains.
As of fiscal year ended March 31, 1995, Domestic had capital loss
carryforwards aggregating approximately $98,000. The loss carry forward for
Domestic, of which $49,000 and $49,000 will expire on March 31, 2001 and
2003, respectively, is available to offset future capital gains.
As of fiscal year ended March 31, 1995, Money Market had capital loss
carryforwards aggregating approximately $1,781,000. The loss carryforward
for Money Market, of which $336,000, $898,000 and $547,000 will expire on
March 31, 2001, 2002, and 2003, respectively, is available to offset future
capital gains.
As of fiscal year ended March 31, 1995, Treasury Only had capital loss
carryforwards aggregating approximately $184,000. The loss carryforward for
Treasury Only, of which $22,000 and $162,000 will expire on March 31, 2001
and 2002, respectively, is available to offset future capital gains.
As of fiscal year ended March 31, 1995, Tax-Exempt, had capital loss
carryforwards aggregating approximately $528,000. The loss carryforward for
Tax-Exempt, which will expire on March 31, 1996, is available to offset
future capital gains.
As of fiscal year ended August 31, 1995, Rated Money Market had capital
loss carryforwards aggregating approximately $74,000. The loss carryforward
for Rated Money Market, of which $40,000, $32,000, and $2,000 will expire
on August 31, 1996, 1997, and 1998, respectively, is available to offset
future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state law provides 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 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, may not qualify for this
benefit. The tax treatment of your dividend distributions from a fund will
be the same as if you directly owned your proportionate share of the U.S.
Government securities in the fund's portfolio. Because the income earned on
most U.S. Government securities in which a fund invests is exempt from
state and local income taxes, the portion of your dividends from the fund
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.
In a number of states, corporate franchise (income) tax laws do not exempt
interest earned on U.S. Government securities whether such securities are
held directly or through a fund.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
Each fund is treated as a separate entity from the other funds of each
Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent company organized
in 1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to 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: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trusts 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. Trustees and officers elected or
appointed to the trusts prior to the funds' conversion from series
of a Massachusetts business trust served in identical capacities.
All persons named as Trustees also serve in similar capacities for other
funds advised by FMR. The business address of each Trustee and officer who
is an "interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR. The
business address of all the other Trustees is Fidelity Investments, P.O.
Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who are
"interested persons" by virtue of their affiliation with either the trust
or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (64), 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., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (53), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (62), 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 (63), 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 is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (71), 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 Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc., and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Trustee of First Union Real Estate
Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Vice Chairman of the Board of Directors of the
National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR 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 (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) 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 (65), Trustee, 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), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (70), 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 (61), 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 the 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 (66), 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., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNING, JR. (55), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
LELAND BARRON (36), Vice President (1989), is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
BURNELL STEHMAN (63), Vice President (1992), is also Vice President of
other funds advised by FMR and an employee of FMR Texas, Inc.
JOHN TODD (46), Vice President (1992), is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
SCOTT A. ORR (33), Vice President (1992), is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (47), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995)
THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an
employee of FMR.
JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (48), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and
Vice President, Assistant Controller, and Director of the Accounting
Department - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation
of each current trustee of each fund for his or her services as trustee for
the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money
Market).
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas
Burkhead** Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R.
Davis Jones Malone Williams
Rated Money
$ 0 $ 151 $ 145 $ 189 $ 0 $ 151 $ 153 $ 0 $ 151 $ 151 $ 151 $ 150
Market
Treasury
0 2,082 1,985 2,568 0 2,059 2,111 0 2,112 2,134 2,032 2,084
Government
0 1,672 1,600 2,059 0 1,654 1,706 0 1,708 1,723 1,632 1,683
Money Market
0 2,371 2,246 2,942 0 2,345 2,395 0 2,395 2,416 2,312 2,360
Domestic
0 464 440 575 0 459 468 0 463 472 452 460
Tax-Exempt+
0 1,128 1,066 1,393 0 1,111 1,129 0 1,130 1,149 1,099 1,118
Treasury Only +
0 543 504 679 0 533 544 0 535 533 524 523
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from from the Fund
as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox 5,200 52,000 125,000
Phyllis Burke Davis 5,200 52,000 122,000
Richard J. Flynn 0 52,000 154,500
Edward C. Johnson 3d** 0 0 0
E. Bradley Jones 5,200 49,400 123,500
Donald J. Kirk 5,200 52,000 125,000
Peter S. Lynch** 0 0 0
Gerald C. McDonough 5,200 52,000 125,000
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 125,000
Thomas R. Williams 5,200 52,000 126,500
</TABLE>
* Information is as of December 31, 1994 for 206 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
+ The annualized amounts reported for Tax-Exempt and Treasury Only are
for the periods June 1, 1994 through March 31, 1995 and August 1, 1994
through March 31, 1995, respectively. Each fund's fiscal year end changed
to March 31 in February 1995.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
As of October 23 , 1995, the Trustees and officers of each fund
owned, in the aggregate, less than 1 % of each fund's total
outstanding shares.
As of October 25, 1995, the following owned of record or
beneficially 5% or more of outstanding shares of each class of the
funds:
TREASURY - CLASS I: First Union National Bank (13.32%); Bank of America
(11.69%); Texas Commerce Bank, N.A. (9.93%); and First Interstate Bank
(6.39%).
TREASURY - CLASS III: Bank Of New York (51.76%); First Union National Bank
(17.22%); and Chemical Bank (10.09%).
GOVERNMENT - CLASS I: First Tennessee Bank, Memphis (11.28%); Shawmut Bank
Of Boston, N.A. (7.47%); and Texas Commerce Bank, N.A. (7.35%).
GOVERNMENT - CLASS III: Whitney National Bank (22.53%); Boatmen's Trust Co.
of St. Louis (16.08%); First Interstate Bank (13.45%); Nationsbank
(12.58%); Indiana National Bank (11.37%); United National Bank (11.08%);
and First Union National Bank (8.10%).
DOMESTIC - CLASS I: First Union National Bank (15.68%); Texas Commerce
Bank, N.A. (11.21%); United States National Bank (10.48%); and Bank of
Boston Connecticut (5.21%).
DOMESTIC - CLASS III: Boatmen's Trust Co. of St. Louis (38.71%); First
Union National Bank (25.39%); Reliance Trust Company (21.96%); NationsBank
(11.47%); and Exchange Bank (9.90%).
MONEY MARKET - CLASS I: FMR Corp. (8.52%); Citibank, N.A. (8.35%); and
Shawmut Bank Of Boston, N.A. (5.58%).
MONEY MARKET - CLASS III: First Union National Bank (62.10%); Republic
National Bank of New York (12.38%); North American Trust Company (9.45%);
and Boatmen's Trust Co. of St. Louis (5.59%).
TREASURY ONLY - CLASS I: First Union National Bank (34.40%); First American
Trust Company (8.80%); Ropes & Gray (7.49%); Shawmut Bank Of Boston, N.A.
(7.49%); and Bingham, Dana & Gould (5.97%).
TAX-EXEMPT - CLASS I: Shawmut Bank Of Boston, N.A. (12.81%); Wachovia Bank
& Trust Company (9.21%); and Fleet National Bank (5.02%).
RATED MONEY MARKET - CLASS I: Promus Companies (15.21%); Bank of America
(7.94%); Metric Partners (7.66%); Eastern Utilities Associates (7.17%); and
United States Trust Company of NY (5.39%).
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund, all Trustees who are "interested
persons" of the trusts or of FMR, and all personnel of each fund or FMR for
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 each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
UMB, FIIOC, and FSC , each fund or class thereof, as
applicable, pays all of its expenses, without limitation, that are not
assumed by those parties. Each fund (other than Treasury Only and Rated
Money Market) pays for the typesetting, printing, and mailing of its proxy
materials to shareholders, legal expenses, and the fees of the custodian,
auditor and non-interested Trustees. Although each fund's (other than
Treasury Only's and Rated Money Market's) current management contract
provides that each fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices and reports to
shareholders, the trust, on behalf of each fund has entered into a revised
transfer agent agreement with FIIOC and UMB, as applicable, pursuant to
which FIIOC or UMB bears the costs of providing these services to existing
shareholders of the applicable classes. Other expenses paid by each fund
(other than Treasury Only and Rated Money Market) include interest, taxes,
brokerage commissions, and each fund's proportionate share of insurance
premiums and Investment Company Institute dues, and the costs of
registering shares under federal and state securities laws. Each fund is
also liable for such non-recurring expenses as may arise, including costs
of any litigation to which the fund may be a party, and any obligation it
may have to indemnify its officers and Trustees with respect to litigation.
FMR is responsible for the payment of all expenses of Treasury Only and
Rated Money Market with certain exceptions. Specific expenses payable by
FMR include, without limitation, expenses for the typesetting, printing,
and mailing of proxy materials to shareholders; legal expenses, and the
fees of the custodian, auditor, and interested Trustees; costs of
typesetting, printing, and mailing prospectuses and statements of
additional information, notices and reports to shareholders; and the fund's
proportionate share of insurance premiums and Investment Company Institute
dues. FMR also provides for transfer agent and dividend disbursing services
through FIIOC and portfolio and general accounting record maintenance
through FSC.
FMR pays all other expenses of Treasury Only and Rated Money Market with
the following exceptions: fees and expenses of all Trustees of the
applicable trust who are not "interested persons" of the trust or
FMR (the non-interested Trustees); interest on borrowings (only for
Treasury Only); taxes; brokerage commissions (if any); and such
nonrecurring expenses as may arise, including costs of any litigation to
which a fund may be a party, and any obligation it may have to indemnify
the officers and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated May 30,
1993 for the FICP funds; January 29, 1992 for Tax-Exempt; September 30,
1993 for Treasury Only; and November 1, 1986 for Rated Money Market,
which were approved by shareholders on November 18, 1992, November 13,
1991, March 24, 1993, and December 8, 1994, respectively.
For the services of FMR under each contract, each fund (other than
Treasury Only and Rated Money Market) pays FMR a monthly management fee
at the annual rate of 0.20% of average net assets throughout the month.
Treasury Only and Rated Money Market each pay FMR a monthly management
fee at the annual rate of 0.42% of average net assets throughout the month.
The management fees paid to FMR by Treasury Only and Rated Money Market are
reduced by the fees and expenses paid by the respective funds to the
non-interested Trustees. Fees received by FMR for the last three fiscal
periods are shown in the table below.
Fund Fiscal Year Ended Management Fees Paid to FMR
Rated Money Market 8 /31/95 $ 1,352,919*
8/31/94 1,781,535*
8/31/93 2,893,862*
Treasury 3/31/95 8,680,344
3/31/94 9,834,025
3/31/93 14,029,197
Government 3/31/95 6,680,088
3/31/94 9,660,519
3/31/93 12,610,880
Domestic 3/31/95 1,923,368
3/31/94 1,525,574
3/31/93 1,536,740
Money Market 3/31/95 10,436,518
3/31/94 10,551,990
3/31/93 10,066,276
Treasury Only 3/31/95** 3,279,429*
7/31/94 4,716,697*
7/31/93 4,892,175*
7/31/92 4,249,814*
Tax-Exempt 3/31/95** 3,789,731
5/31/94 5,099,831
5/31/93 5,036,875
5/31/92 4,605,577
* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.
** The fiscal year end of Treasury Only changed from July 31 to
March 31 in February 1995. The fiscal year end of Tax-Exempt changed from
May 31 to March 31 in February 1995.
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
During the fiscal periods reported, FMR voluntarily agreed subject to
revision or termination, to reimburse Class I of certain funds if and to
the extent that the fund's Class I total operating expenses
(excluding interest, taxes, brokerage commissions, and extraordinary
expenses) were in excess of an annual rate of its average net assets.
The table below identifies the classes in reimbursement; the level
at which reimbursement began; and the dollar amount reimbursed for each
fiscal year ended March 31, 1995, 1994, and 1993 . Prior to August
31, 1995, Rated Money Market was not in reimbursement.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Level at Which
Fund Reimbursement Began Dollar Amount Reimbursed
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992
Treasury - Class I 0.20% $ 3,129,549 $ 2,956,232 $ 3,246,298 N/A
Treasury - Class III 0.20% 409,770 570 N/A N/A
Government - Class I 0.20% 1,894,134 2,665,587 3,508,338 N/A
Government - Class III 0.20% 42,272 N/A N/A N/A
Domestic - Class I 0.20% 818,759 638,552 645,507 N/A
Domestic - Class III 0.20% 48,097 N/A N/A N/A
Money Market - Class I 0.18% 2,772,106 2,437,428 2,697,402 N/A
Money Market - Class III 0.18% 230,324 7,565 N/A N/A
Treasury Only - Class I* 0.20% 1,719,806 2,474,345 2,567,107 $ 2,260,410
Tax-Exempt - Class I** 0.20% 1,429,650 1,643,561 1,591,107 1,590,017
</TABLE>
* Figures for Treasury Only are for the fiscal years ended July 31,
1992, 1993, and 1994, and the fiscal period August 1, 1994 to March 31,
1995. During the fiscal year ended July 31, 1992, the level at which
reimbursement began ranged from 0.15% to 0.20%.
** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992,
1993, and 1994, and the fiscal period June 1, 1994 to March 31, 1995.
During the fiscal year ended May 31, 1992, the level at which reimbursement
began was 0.18%.
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investment in foreign securities.
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 fund.
Under each sub-advisory agreements dated May 30, 1993, January 29, 1992,
September 30, 1973, and November 1, 1989 for the FICP funds, Tax-Exempt,
Treasury Only, and Rated Money Market, respectively, FMR pays FMR Texas
fees equal to 50% of the management fees payable by FMR under its
management contract with each fund. Each sub-advisory agreement was
approved by each fund's shareholders on November 18, 1994, November 13,
1991, March 24, 1993, and November 16, 1994 for the FICP funds, Tax-Exempt,
Treasury Only, and Rated Money Market, respectively. 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. The table below shows fees paid by
FMR to FMR Texas on behalf of each fund for the fiscal years ended March 31
(August 31 for Rated Money Market), 1995, 1994, and 1993.
1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Rated Money Market $ 676,460 $ 890,768 $ 1,446,931 N/A
Treasury 4,340,172 4,917,013 7,014,599 N/A
Government 3,340,044 4,830,260 6,305,440 N/A
Domestic 961,684 762,787 768,370 N/A
Money Market 5,218,259 5,275,995 5,033,138 N/A
Treasury Only* 1,639,715 2,358,349 2,446,088 $ 2,124,907
Tax-Exempt** 1,894,866 2,549,916 2,518,438 2,302,789
</TABLE>
* Figures for Treasury Only are for the fiscal years ended July 31,
1992, 1993 and 1994, and the fiscal period August 1, 1994 to March 31,
1995.
** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993
and 1994, and the fiscal period June 1, 1994 to March 31, 1995.
CONTRACTS WITH FMR AFFILIATES
FIIOC is transfer, dividend disbursing, and shareholder servicing agent for
Class I shares of Treasury, Government, Domestic, Money Market, Treasury
Only, and Rated Money Market (the Taxable Funds). UMB is the transfer agent
and shareholder servicing agent for Class I shares of Tax-Exempt. UMB has
entered into a sub-arrangement with FIIOC pursuant to which FIIOC performs
transfer, dividend disbursing, and shareholder services for Class I shares
of Tax-Exempt. FIIOC receives an annual fee and an asset-based fee based on
account size. The costs of FIIOC's services for Class I of Treasury Only
and Rated Money Market are borne by FMR pursuant to its management
contract.
For accounts that FIIOC maintains on behalf of UMB, FIIOC receives all such
fees.
In addition, FIIOC bears the expense of typesetting, printing, and mailing
prospectuses, statements of additional information, and all other reports,
notices, and statements to shareholders, with the exception of proxy
statements. Also, FIIOC pays out-of-pocket expenses associated with
providing transfer agent services.
FSC calculates NAV and dividends for Class I of each Taxable Fund, and
maintains each Taxable Fund's accounting records. UMB has sub-arrangements
with FSC pursuant to which FSC performs the calculations necessary to
determine NAV and dividends for Class I of Tax-Exempt, and maintains the
accounting records for Tax-Exempt. The annual fee rates for these pricing
and bookkeeping services are based on each fund's average net assets,
specifically .0175% for the first $500 million of average net assets and
.0075% for average net assets in excess of $500 million. The fee is limited
to a minimum of $20,000 and a maximum of $750,000 per year. The costs of
FSC's services for Rated Money Market and Treasury Only are borne by FMR
pursuant to its management contract. Pricing and bookkeeping fees,
including related out-of-pocket expenses, paid to FSC by the funds (except
Rated Money Market and Treasury Only) for the past three fiscal years ended
March 31, 1995, 1994, and 1993 were as follows:
Pricing and Bookkeeping Fees
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1995 1994 1993 1992
Treasury $ 375,762 $ 419,147 $ 576,072 N/A
Government 331,070 412,411 523,696 N/A
Domestic 122,139 107,464 108,548 N/A
Money Market 441,370 445,362 429,428 N/A
Tax-Exempt* 309,306 304,324 325,195 $ 332,264
</TABLE>
* Figures for Tax-Exempt are for the fiscal years ended May 31, 1992,
1993, and 1994, and fiscal period June 1, 1994 to March 31, 1995,
annualized.
The transfer agent fees and charges for Class I of Tax-Exempt, and pricing
and bookkeeping fees for Tax-Exempt described above are paid to FIIOC and
FSC, respectively, by UMB, which is entitled to reimbursement from Class I
or the fund, as applicable, for these expenses.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC 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 FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved a Distribution and Service Plan on behalf of
Class I of each fund (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 a fund except pursuant to a
plan approved on behalf of the fund under the Rule. The Plans, as approved
by the Trustees, allow Class I of the funds and FMR to incur certain
expenses that might be considered to constitute indirect payment by the
funds of distribution expenses.
Under each Plan, if the payment of management fees by the funds to FMR is
deemed to be indirect financing by the funds of the distribution of their
shares, such payment is authorized by the Plans. Each Plan specifically
recognizes that FMR may use its management fee revenue , as well as
its past profits, or its other resources from any other
source to reimburse FDC for expenses incurred in connection with the
distribution of Class I shares, including payments made to third
parties that assist in selling Class I shares of each fund, or to
third parties, including banks, that render shareholder support
services. The Trustees have not authorized such payments to date.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the applicable class of each fund and its shareholders. In particular, the
Trustees noted that each Plan does not authorize payments by Class I of
each fund other than those made to FMR under its management contract with
the fund. To the extent that each Plan gives FMR and FDC greater
flexibility in connection with the distribution of shares of the applicable
class of each fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plans by local entities with whom shareholders have
other relationships.
The Plans were approved by shareholders of Class I of each FICP fund on
November 18, 1992, Class I of Tax-Exempt on November 31, 1991, Class I of
Treasury Only on March 24, 1993, and Class I of Rated Money Market on
December 8, 1994. Each Plan was approved by shareholders, in connection
with the corresponding reorganization transactions which took place on May
30, 1993 for the FICP funds; January 29, 1992 for Tax-Exempt; September 29,
1993 for Treasury Only; and December 29, 1994 for Rated Money Market,
pursuant to Agreements and Plans of Conversion.
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, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC 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 funds
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 other financial institutions may be required to
register as dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUSTS
TRUST ORGANIZATION. Treasury, Government, Domestic and Money Market are
funds of Fidelity Institutional Cash Portfolios, an open-end management
investment company organized as a Delaware business trust on May 30, 1993.
The funds acquired all of the assets of U.S. Treasury Portfolio II, U.S.
Government Portfolio, Domestic Money Market Portfolio, and Money Market
Portfolio, respectively, of Fidelity Institutional Cash Portfolios on May
30, 1993. Currently, there are four funds of Fidelity Institutional Cash
Portfolios: Treasury, Government, Domestic, and Money Market. The Trust
Instrument permits the Trustees to create additional funds.
Tax-Exempt is a fund of Fidelity Institutional Tax-Exempt Cash Portfolios,
an open-end management investment company organized as a Delaware business
trust on January 29, 1992. Tax-Exempt acquired all of the assets of
Fidelity Institutional Tax-Exempt Cash Portfolios of Fidelity
Institutional Tax-Exempt Cash Portfolios on January 29, 1992.
Currently, Tax - Exempt is the only fund of Fidelity Institutional
Tax-Exempt Cash Portfolios. The Trust Instrument permits the Trustees
to create additional funds.
Treasury Only is a fund of Daily Money Fund, an open-end management
investment company organized as a Delaware business trust on September 29,
1993. Treasury Only acquired all of the assets of Fidelity U.S. Treasury
Income Portfolio of Daily Money Fund on September 29, 1993. Currently,
there are six funds of Daily Money Fund: Treasury Only, Money Market
Portfolio, U.S. Treasury Portfolio, Capital Reserves: U.S. Government
Portfolio, Capital Reserves: Money Market Portfolio, and Capital Reserves:
Municipal Money Market Portfolio. The Trust Instrument permits the Trustees
to create additional funds.
Rated Money Market is a fund of Fidelity Money Market Trust, an open-end
management investment company organized as a Delaware business trust on
December 29, 1994. Rated Money Market acquired all of the assets of
Domestic Money Market Portfolio of Fidelity Money Market Trust on December
29, 199 4. Currently, there are three funds of Fidelity Money Market
Trust: Rated Money Market, Retirement Money Market Portfolio, and
Retirement Government Money Market Portfolio. The Trust Instrument permits
the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to a fund, the
right of the trust or fund to use the identifying name "Fidelity" may be
withdrawn. There is a remote possibility that one fund might become liable
for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trusts received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trusts are to
be allocated in proportion to the asset value of the respective funds,
except where allocations of direct expense can otherwise be fairly made.
The officers of the trusts, subject to the general supervision of the Board
of Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of a trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each 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
Instruments contain an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the trusts and require
that a disclaimer be given in each contract entered into or executed by the
trust or the Trustees. The Trust Instruments provide for indemnification
out of each fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instruments
also provide that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
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 the fund is unable to
meet its obligations. FMR believes that, in view of the above, the
risk of personal liability to shareholders is extremely remote.
The Trust Instruments further provide that the Trustees, if they have
exercised reasonable care, shall not be personally 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. Claims
asserted against one class of shares may subject holders of another class
of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder of Rated Money Market, you receive one vote for
each dollar value 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 non-assessable, except as set forth under the
heading "Shareholder and Trustee Liability" above. Shareholders
representing 10% or more of a trust, fund or class may, as set forth in
each of the Trust Instruments, call meetings of the trust, fund, or class,
for any purpose related to the trust, fund, or class, 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.
Any trust or fund may be terminated upon the sale of its assets to, or
merger with, another open-end management investment company or series
thereof, or upon liquidation and distribution of its assets. Generally such
terminations must be approved by vote of the holders of a majority of the
outstanding shares of the trust or fund (or, for Rated Money Market, as
determined by the current value of each shareholder's investment in the
fund or trust); however, the Trustees may, without prior shareholder
approval, change the form of organization of the trust or fund by
merger, consolidation, or incorporation. If not so terminated, the trust
and its funds will continue indefinitely.
Under the Trust Instruments, the Trustees may, without shareholder vote,
cause a 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 fund may invest all of its assets in another investment
company.
CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, NY 10260 is custodian of the assets of each fund, except
Treasury and Tax-Exempt. Bank of New York, 48 Wall Street, New York, New
York is custodian of the assets of Treasury. The custodian for Tax-Exempt
is UMB, 1010 Grand Avenue, Kansas City Missouri. The custodian is
responsible for the safekeeping of a fund's assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of a fund or in deciding which
securities are purchased or sold by a fund. However, a fund may invest in
obligations of the custodian and may purchase securities from or sell
securities to the custodian. Chemical Bank, headquartered in New York, may
also serve as a special purpose custodian of certain assets in connection
with pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the funds'
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain 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 fund relationships.
AUDITOR S . Coopers & Lybrand L.L.P., 1999 Bryan Street, Suite
3000, Dallas, TX 75201 serves as the independent accountant for
Tax-Exempt, Treasury Only, and Rated Money Market. Price Waterhouse LLP,
2001 Ross Avenue, Suite 1800, Dallas, TX 75201 serves as the
independent accountant for the FICP funds. The auditors examine financial
statements for the funds and provide other audit, tax, and related
services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended March 31, 1995 (August 31, 1995 for Rated Money Market)
are included in the funds' Annual Report, which is a separate report
supplied with this SAI. Each fund's financial statements and financial
highlights are incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. A fund 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:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earning coverage of fixed financial charges and with high
internal cash generation.
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. Earning 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 alternative
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. I ssues 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.
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS CLASS II
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page
2 .............................. Expenses
3 a .............................. Financial Highlights
b .............................. *
c .............................. Performance
d .............................. Cover Page
4 a i............................. Charter
ii........................... Investment Principles and Risks; Securities and
Investment Practices; Fundamental Investment
Policies and Restrictions
b .............................. Securities and Investment Practices
c .............................. Who May Want to Invest; Investment Principles
and Risks; Securities and Investment Practices
5 a .............................. Charter
b i............................. FMR and Its Affiliates
ii........................... FMR and Its Affiliates; Charter; Breakdown of
Expenses
iii.......................... Expenses; Breakdown of Expenses; Management
Fee
c .............................. FMR and Its Affiliates
d .............................. Charter; Breakdown of Expenses; Cover Page;
FMR and Its Affiliates
e .............................. FMR and its Affiliates; Breakdown of Expenses;
Other Expenses
f .............................. Expenses
g .............................. Expenses; FMR and Its Affiliates
5A .............................. *
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange
Restrictions
iii.......................... *
b ............................. FMR and Its Affiliates
c .............................. Charter
d .............................. Cover Page; Charter
e .............................. Cover Page; How to Buy Shares; How to Sell
Shares; Investor Services; Exchange Restrictions
f, g .............................. Dividends, Capital Gains, and Taxes
7 a .............................. Charter; Cover Page
b .............................. How to Buy Shares; Transaction Details
c .............................. *
d .............................. How to Buy Shares
e .............................. Transaction Details; Breakdown of Expenses
f .............................. Breakdown of Expenses; Other Expenses
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
FIDELITY INSTITUTIONAL
MONEY MARKET
FUNDS - CLASS II
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the applicable fund's most recent financial report and portfolio listing or
a copy of the Statement of Additional Information (SAI) dated November 1,
1995. The SAI has been filed with the Securities and Exchange Commission
(SEC) and is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, contact your
financial institution, or call Fidelity Client Services at 1-800-843-3001.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND 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.
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.
IMM II-pro-1195
FIDELITY INSTITUTIONAL CASH PORTFOLIOS (FICP):
Treasury (formerly Treasury II)
Government
Domestic
Money Market
DAILY MONEY FUND (DMF):
Treasury Only
FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS (FITECP):
Tax-Exempt
FIDELITY MONEY MARKET TRUST (FMMT):
Rated Money Market (formerly Domestic Money Market Portfolio)
PROSPECTUS
NOVEMBER 1, 1995
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Class II's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers institutional and corporate investors a convenient and
economical way to invest in a professionally managed portfolio of money
market instruments.
Each fund is designed for investors who would like to earn current income
while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Each of
Treasury Only, Treasury, and Government offers an added measure of
safety with its focus on U.S. Government securities.
None of the funds constitutes a balanced investment plan. However, because
they emphasize stability, they could be well-suited for a portion of your
investment.
Each fund is composed of multiple classes of shares. Each class of a fund
has a common investment objective and investment portfolio. Class I shares
do not have a sales charge and do not pay a distribution fee. Class II
shares do not have a sales charge, but do pay a 0.15% distribution fee.
Class III shares do not have a sales charge, but do pay a 0.25%
distribution fee. Because Class I shares have no sales charge and do not
pay a distribution fee, Class I shares are expected to have a higher total
return than Class II and Class III shares. You may obtain more information
about Class I and Class III shares, which are not offered through this
prospectus, from your financial institution, or by calling Fidelity Client
Services at 1-800-843-3001. Contact your financial institution to discuss
which class is appropriate for you.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
Class II shares of a fund.
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales charge None
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR).
FMR is responsible for the payment of all other expenses of Treasury
Only and Rated Money Market with certain limited exceptions. Each fund,
other than Treasury Only and Rated Money Market, also incurs other
expenses for services such as maintaining shareholder records and
furnishing shareholder statements and financial reports.
12b-1 fees are paid by Class II of each fund to the distributor for
services and expenses in connection with the distribution of Class II
shares of each fund. Long-term shareholders may pay more than the
economic equivalent of the maximum sales charges permitted by the National
Association of Securities, Inc., due to 12b-1 fees.
Class II's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on estimated expenses of Class II of
each fund and are calculated as a percentage of average net assets of Class
II of each fund.
Class II Operating Expenses
TREASURY Management fee 0.15%
A
12b-1 fee (Distribution fee) 0.15
%
Other expenses 0.05%
A
Total operating expenses 0.35%
A
GOVERNMENT Management fee 0.16%
A
12b-1 fee (Distribution fee) 0.15
%
Other expenses 0.04%
A
Total operating expenses 0.35%
A
A AFTER EXPENSE REDUCTIONS.
Class II Operating Expenses
DOMESTIC Management fee 0.13%
A
12b-1 fee (Distribution fee) 0.15
%
Other expenses 0.07%
A
Total operating expenses 0.35%
A
MONEY MARKET Management fee 0.14%
A
12b-1 fee (Distribution fee) 0.15
%
Other expenses 0.04%
A
Total operating expenses 0.33%
A
TREASURY ONLY Management fee 0.20%
A
12b-1 fee (Distribution fee) 0.15
%
Other expenses 0.00
%
Total operating expenses 0.35%
A
TAX-EXEMPT Management fee 0.14%
A
12b-1 fee (Distribution fee) 0.15
%
Other expenses 0.06
%
Total operating expenses 0.35%
A
RATED MONEY MARKET Management fee 0.20%
A
12b-1 fee (Distribution fee) 0.15
%
Other expenses 0.00
%
Total operating expenses 0.35%
A
A AFTER EXPENSE REDUCTIONS.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment in Class II shares, assuming a 5% annual return and full
redemption at the end of each time period:
1 3 5 10
Year Years Years Years
Treasury $ 4 $ 11 $ 20 $ 44
Government $ 4 $ 11 $ 20 $ 44
Domestic $ 4 $ 11 $ 20 $ 44
Money Market $ 3 $ 11 $ 19 $ 42
Treasury Only $ 4 $ 11 $ 20 $ 44
Tax-Exempt $ 4 $ 11 $ 20 $ 44
Rated Money Market $ 4 $ 11 $ 20 $ 44
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class II of each fund to the extent
that total operating expenses (excluding interest, taxes, brokerage
commissions, extraordinary expenses, and 12b-1 fees) are in excess of
0 .20% ( 0 .18% for Money Market) of its average net assets. If
these agreement s were not in effect, the managemen t
fees , other expenses, and total operating expenses for Class II
of each fund would have been expected to be the following amounts, as a
percentage of average net assets: 0.20 % , 0.29%, and
0.64 % for Treasury; 0.20% , 0.21%, and 0.56 % for
Government; 0.20% , 0.27%, and 0.62% for Domestic; 0.20 % ,
0.07%, and 0.42% for Money Market; 0.42% , 0.00%, and 0.57% for
Treasury Only; 0.20 % , 0.06%, and 0.41% for Tax-Exempt; and
0.42% , 0.00%, and 0.57 % for Rated Money Market.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow and each fund's financial
statements are included in each fund's Annual Report and have been audited
by independent accountants. Price Waterhouse LLP serves as
independent accountants for each of the FICP funds, while Coopers &
Lybrand L.L.P. serves as independent accountants for Tax-Exempt,
Treasury Only, and Rated Money Market. Their reports, as applicable, on the
financial statements and financial highlights are included in each Annual
Report. The financial statements, the financial highlights, and the reports
are incorporated by reference into the funds' SAI, which may be obtained
free of charge from Fidelity Client Services at the phone number listed
on page . Class II of each fund will commence operations on or about
November 1, 1995. Class III of Treasury Only, Tax Exempt, and Rated Money
Market will commence operations on or about November 1, 1995.
FICP: TREASURY (FORMERLY TREASURY II) - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C>
148.Selected Per-Share Data
149.Years ended March 31
1987A 1988 1989 1990 1991 1992 1993 1994 1995
150.Net asset value, beginning of
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
151.Income from Investment
Operations
152. Net interest income
.009 .064 .078 .088 .076 .053 .034 .030 .047
153.Less Distributions
154. From net interest income
(.009) (.064) (.078) (.088) (.076) (.053) (.034) (.030) (.047)
155.Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
156.Total return B
.93% 6.60 8.11 9.13 7.87 5.41 3.46 3.06 4.78
% % % % % % % %
157.RATIOS AND SUPPLEMENTAL DATA
158.Net assets, end of period (000
$ 26,314 $ 379,50 $ 658,06 $ 1,481,3 $ 3,281,6 $ 5,476,8 $ 5,589,6 $ 4,551,9 $ 4,688,1
omitted) 1 8 24 86 52 63 18 98
159.Ratio of expenses to average
.20% .20 .20 .19 .18 .18 .18 .18 .18
net assets
C % % % % % % % %
160.Ratio of expenses to average
.99% .32 .26 .27 .25 .25 .23 .24 .25
net assets before
C % % % % % % % %
expense reductions
161.Ratio of net interest income to
6.11% 6.46 7.92 8.63 7.50 5.12 3.38 3.01 4.71
average net assets
C % % % % % % % %
</TABLE>
A FEBRUARY 2, 1987 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1987
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: TREASURY (FORMERLY TREASURY II) - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C>
162.Selected Per-Share Data
163.Years ended March 31 1994A 1995
164.Net asset value, beginning of period $ 1.000 $ 1.000
165.Income from Investment Operations
166. Net interest income .012 .044
167.Less Distributions
168. From net interest income (.012) (.044)
169.Net asset value, end of period $ 1.000 $ 1.000
170.Total return B 1.21% 4.45
%
171.RATIOS AND SUPPLEMENTAL DATA
172.Net assets, end of period (000 omitted) $ 5,175 $ 585,57
1
173.Ratio of expenses to average net assets .50% .50
C %
174.Ratio of expenses to average net assets before expense reductions .56% .81
C %
175.Ratio of net interest income to average net assets 2.69% 4.91
C %
</TABLE>
A OCTOBER 22, 1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: GOVERNMENT - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
176.Selected Per-Share
Data
177.Years ended March 31
1986 A 1987 1988 1989 1990 1991 1992 1993 1994 1995
178.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
179.Income from
Investment Operations
180. Net interest income
.053 .063 .068 .079 .088 .077 .054 .035 .031 .048
181.Less Distributions
182. From net interest
(.053) (.063) (.068) (.079) (.088) (.077) (.054) (.035) (.031) (.048)
income
183.Net asset value, end
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
184.Total return B
5.47% 6.51 6.98 8.19 9.15 7.94 5.55 3.56 3.13 4.86
% % % % % % % % %
185.RATIOS AND SUPPLEMENTAL
DATA
186.Net assets, end of
$ 511,720 $ 1,358,6 $ 1,878,7 $ 1,918,3 $ 2,815,6 $ 3,613,8 $ 4,603,7 $ 5,686,1 $ 3,764,5 $ 3,321,0
period (000 omitted)
59 86 42 22 38 81 66 44 66
187.Ratio of expenses to
.20% .20 .20 .20 .20 .18 .18 .18 .18 .18
average net assets
C % % % % % % % % %
188.Ratio of expenses to
.30% .25 .23 .24 .25 .25 .25 .24 .24 .24
average net assets before
C % % % % % % % % %
expense reductions
189.Ratio of net interest
7.81% 6.28 6.78 7.90 8.74 7.62 5.33 3.50 3.07 4.77
income
C % % % % % % % % %
to average net assets
</TABLE>
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: GOVERNMENT - CLASS III
<TABLE>
<CAPTION>
<S> <C>
190.Selected Per-Share Data
191.Year ended March 31 1995 A
192.Net asset value, beginning of period $ 1.000
193.Income from Investment Operations
194. Net interest income .045
195.Less Distributions
196. From net interest income (.045)
197.Net asset value, end of period $ 1.000
198.Total return B 4.57%
199.RATIOS AND SUPPLEMENTAL DATA
200.Net assets, end of period (000 omitted) $ 40,516
201.Ratio of expenses to average net assets .43%
C
202.Ratio of expenses to average net assets before expense reductions .66%
C
203.Ratio of net interest income to average net assets 5.13%
C
</TABLE>
A APRIL 4, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: DOMESTIC - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
204.Selected Per-Share Data
205.Years ended March 31
1990A 1991 1992 1993 1994 1995
206.Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
207.Income from Investment Operations
208. Net interest income
.035 .078 .054 .034 .031 .049
209.Less Distributions
210. From net interest income
(.035) (.078) (.054) (.034) (.031) (.049)
211.Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
212.Total return B
3.52% 8.11 5.50 3.50 3.14 4.97
% % % % %
213.RATIOS AND SUPPLEMENTAL DATA
214.Net assets, end of period (000 omitted)
$ 330,974 $ 355,36 $ 558,72 $ 804,35 $ 656,97 $ 771,93
9 7 4 6 7
215.Ratio of expenses to average net assets
.06% .18 .18 .18 .18 .18
C % % % % %
216.Ratio of expenses to average net assets before expense
.43% .30 .29 .26 .26 .27
reductions
C % % % % %
217.Ratio of net interest income to average net assets
8.44% 7.79 5.24 3.43 3.09 4.94
C % % % % %
</TABLE>
A NOVEMBER 3, 1989 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1990
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: DOMESTIC - CLASS III
<TABLE>
<CAPTION>
<S> <C>
218.Selected Per-Share Data
219.Year ended March 31 1995A
220.Net asset value, beginning of period $ 1.000
221.Income from Investment Operations
222. Net interest income .035
223.Less Distributions
224. From net interest income (.035)
225.Net asset value, end of period $ 1.000
226.Total return B 3.51%
227.RATIOS AND SUPPLEMENTAL DATA
228.Net assets, end of period (000 omitted) $ 26,545
229.Ratio of expenses to average net assets .50%
C
230.Ratio of expenses to average net assets before expense reductions .79%
C
231.Ratio of net interest income to average net assets 5.14%
C
</TABLE>
A JULY 19, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: MONEY MARKET - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
232.Selected Per-Share
Data
233.Years ended March
1986A 1987 1988 1989 1990 1991 1992 1993 1994 1995
31
234.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
235.Income from
Investment Operations
236. Net interest income
.059 .064 .069 .080 .089 .078 .055 .035 .032 .049
237.Less Distributions
238. From net interest
(.059) (.064) (.069) (.080) (.089) (.078) (.055) (.035) (.032) (.049)
income
239.Net asset value, end
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
240.Total return B
6.01% 6.57 7.14 8.35 9.25 8.13 5.59 3.58 3.20 4.99
% % % % % % % % %
241.RATIOS AND SUPPLEMENTAL
DATA
242.Net assets, end of
$ 960,784 $ 1,569,1 $ 2,524,7 $ 2,627,4 $ 4,127,8 $ 4,706,9 $ 3,990,3 $ 4,332,9 $ 3,200,2 $ 5,130,1
period (000 omitted)
99 67 50 79 36 95 95 77 23
243.Ratio of expenses to
.19% .20 .20 .20 .20 .18 .18 .18 .18 .18
average net assets
C % % % % % % % % %
244.Ratio of expenses to
.28% .23 .23 .24 .24 .25 .24 .23 .23 .24
average net assets before
C % % % % % % % % %
expense reductions
245.Ratio of net interest
7.97% 6.33 6.95 8.11 8.82 7.80 5.42 3.50 3.15 5.00
income to average net
C % % % % % % % % %
assets
</TABLE>
A JULY 5, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: MONEY MARKET - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C>
246.Selected Per-Share Data
247.Years ended March 31 1994A 1995
248.Net asset value, beginning of period $ 1.000 $ 1.000
249.Income from Investment Operations
250. Net interest income .011 .046
251.Less Distributions
252. From net interest income (.011) (.046)
253.Net asset value, end of period $ 1.000 $ 1.000
254.Total return B 1.07% 4.66%
255.RATIOS AND SUPPLEMENTAL DATA
256.Net assets, end of period (000 omitted) $ 89,463 $ 457,286
257.Ratio of expenses to average net assets .50% .50%
C
258.Ratio of expenses to average net assets before expense reductions .55% .59%
C
259.Ratio of net interest income to average net assets 2.83% 4.94%
C
</TABLE>
A NOVEMBER 17,1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
TREASURY ONLY - CLASS IE
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
260.Selected Per-Share Data
261.Years ended March 31
1991A 1992E 1993E 1994E 1995D
262.Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
263.Income from Investment Operations
.055 .045 .031 .032 .033
Net interest income
264.Less Distributions
(.055) (.045) (.031) (.032) (.033)
From net interest income
265.Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
266.Total returnB
5.63% 4.64% 3.10% 3.27% 3.38%
267.RATIOS AND SUPPLEMENTAL DATA
268.Net assets, end of period (000 omitted)
$ 705,543 $ 1,197,559 $ 1,047,791 $ 1,049,170 $ 1,266,285
269.Ratio of expenses to average net assets
.03% .20% .20% .20% .20%
C C
270.Ratio of expenses to average net assets before expense
.42% .42% .42% .42% .42%
reductions
C C
271.Ratio of net interest income to average net assets
6.34% 4.43% 3.05% 3.22% 5.02%
C C
</TABLE>
A OCTOBER 3, 1990 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1991
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
D AUGUST 1, 1994 TO MARCH 31, 1995
E YEAR ENDED JULY 31
TAX-EXEMPT - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
272.Selected
Per-Share Data
273.Years ended
1986A 1987E 1988E 1989E 1990E 1991E 1992E 1993E 1994E 1995D
March 31
274.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
275.Income from
.044 .042 .046 .058 .058 .053 .040 .026 .024 .027
Investment Operations
Net interest income
276.Less Distributions
(.044) (.042) (.046) (.058) (.058) (.053) (.040) (.026) (.024) (.027)
From net interest
income
277.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
278.Total returnB
4.51% 4.28 4.72 5.97 6.00 5.40 4.02 2.66 2.44 2.74%
% % % % % % % %
279.RATIOS AND SUPPLEMENTAL DATA
280.Net assets, end of
$ 1,162,9 $ 1,850,0 $ 2,080,8 $ 2,006,8 $ 1,984,6 $ 2,116,8 $ 2,556,9 $ 2,239,0 $ 2,390,6 $ 1,876,815
period
39 53 46 67 36 41 95 31 63
(000 omitted)
281.Ratio of expenses
.19% .20 .20 .20 .20 .18 .18 .18 .18 .18%C
to average
C % % % % % % % %
net assets
282.Ratio of expenses
.25% .23 .22 .24 .23 .23 .25 .24 .24 .26%C
to average net assets
C % % % % % % % %
before expense
reductions
283.Ratio of net
5.18% 4.20 4.65 5.80 5.82 5.28 3.90 2.62 2.41 3.20%C
interest income to
C % % % % % % % %
average net assets
</TABLE>
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
D JUNE 1, 1994 TO MARCH 31, 1995
E YEAR ENDED MAY 31
RATED MONEY MARKET (FORMERLY DOMESTIC MONEY MARKET PORTFOLIO) - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
284.Years ended August
1986B 1987B 1988B 1989B 1990B 1991B 1992A 1993 1994 1995
31
285.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
286.Income from
.069 .062 .070 .089 .080 .063 .034 .029 .033 .054
Investment Operations
Net interest income
287.Less Distributions
(.069) (.062) (.070) (.089) (.080) (.063) (.034) (.029) (.033) (.054)
From net interest income
288.Net asset value, end
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
289.Total return D
7.07 6.42 7.27 9.26 8.27 6.44 3.44% 2.93 3.34 5.53
% % % % % % % % %
290.RATIOS AND SUPPLEMENTAL DATA
291.Net assets, end of
$ 1,300,8 $ 1,231,7 $ 1,035,7 $ 1,273,7 $ 944,78 $ 851,87 $ 765,721 $ 611,410 $ 399,33 $ 300,86
period (000 omitted)
32 68 56 45 2 2 3 3
292.Ratio of expenses to
.42 .42 .42 .42 .42 .42 .42% .42 .42 .42
average net assets
% % % % % % c % % %
293.Ratio of net interest
6.87 6.22 7.00 8.91 8.01 6.38 4.04% 2.89 3.24 5.33
income to average net
% % % % % % c % % %
assets
</TABLE>
A NOVEMBER 1, 1991 TO AUGUST 31, 1992
B YEAR ENDED OCTOBER 31.
C ANNUALIZED
D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
Average annual total returns covering periods of less than one year assume
that performance will remain constant for the rest of the year.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a
yield assumes that income earned is reinvested, it is called an EFFECTIVE
YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn before
taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance call Fidelity Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Treasury, Government, Domestic, and
Money Market are diversified funds of Fidelity Institutional Cash
Portfolios, an open-end management investment company organized as a
Delaware business trust on May 30, 1993. Treasury Only is a diversified
fund of Daily Money Fund, an open-end management investment company
organized as a Delaware business trust on September 29, 1993. Tax-Exempt is
a diversified fund of Fidelity Institutional Tax-Exempt Cash Portfolios, an
open-end management investment company organized as a Delaware business
trust on January 29, 1992. Rated Money Market is a diversified fund of
Fidelity Money Market Trust, an open-end management investment company
organized as a Delaware business trust on December 29, 1994. There is a
remote possibility that one fund might become liable for a misstatement in
the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent will mail proxy materials in advance, including a voting
card and information about the proposals to be voted on. For shareholders
of all funds (other than Rated Money Market) , you are entitled to
one vote for each share you own. For shareholders of Rated Money Market,
the number of votes you are entitled to is based upon the dollar value of
your investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
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, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
The funds are managed by FMR, which handles their business affairs. FMR
Texas, Inc. (FMR Texas) , located in Irving, Texas, has primary
responsibility for providing investment management services.
As of August 31, 1 995 , FMR advised funds having approximately 22
million shareholder accounts with a total value of more than
$ 328 billion.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services. Fidelity Investments Institutional
Operations Company (FIIOC) performs transfer agent servicing functions for
Class II shares of each fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas.
Members of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940
(the 1940 Act), control of a company is presumed where one individual
or group of individuals owns more than 25% of the voting stock of that
company; therefore, the Johnson family may be deemed under the 1940 Act to
form a controlling group with respect to FMR Corp.
UMB Bank, n.a. (UMB) is Tax-Exempt's transfer agent, although it employs
FIIOC to perform these functions for Class II of Tax-Exempt. UMB is located
at 1010 Grand Avenue, Kansas City, Missouri.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers .
INVESTMENT PRINCIPLES AND RISKS
TREASURY ONLY seeks as high a level of current income as is consistent with
the security of principal and liquidity, and to maintain a constant net
asset value per share (NAV) of $1.00.
The fund invests only in U.S. Treasury securities, including bills, notes,
bonds and other direct obligations of the U.S. Treasury that are guaranteed
as to payment of principal and interest by the full faith and credit of the
U.S. Government.
The fund will invest in those securities whose interest is specifically
exempt from state and local income taxes under federal law; such interest
is not exempt from federal income tax.
TREASURY seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
Under normal conditions, the fund invests 100% of its total assets in U.S.
Treasury bills, notes and bonds and other direct obligations of the U.S.
Treasury. The fund may also engage in repurchase agreements backed by those
obligations.
GOVERNMENT seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in U.S. Government obligations issued or guaranteed as to
principal and interest by the U.S. Government, including bills, notes,
bonds and other U.S. Treasury debt securities, and instruments issued or
guaranteed by U.S. Government instrumentalities or agencies, and
repurchase agreements backed by those obligations. The fund currently
intends to invest exclusively in these instruments.
DOMESTIC seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
The fund invests in U.S. dollar-denominated money market instruments of
domestic issuers rated in the highest rating category by at least two
nationally recognized rating services, or by one if only one rating service
has rated an obligation. The fund may purchase unrated obligations
determined to be of equivalent quality pursuant to procedures adopted by
the Board of Trustees. Under normal conditions, the fund will invest more
than 25% of its total assets in obligations of companies in the financial
services industry.
RATED MONEY MARKET seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in obligations of the U.S. Government, its agencies and
instrumentalities, repurchase agreements backed by those obligations, and
other high-quality, U.S. dollar-denominated money market instruments of
domestic and foreign issuers rated in the highest rating category by at
least two nationally recognized rating services. Under normal conditions,
the fund will invest more than 25% of its total assets in obligations of
companies in the financial services industry.
MONEY MARKET seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in high-quality, U.S. dollar-denominated money market
instruments of domestic and foreign issuers rated in the highest rating
category by at least two nationally recognized rating services, or by one
if only one rating service has rated an obligation. The fund may purchase
unrated obligations determined to be of equivalent quality pursuant to
procedures adopted by the Board of Trustees. Under normal conditions, the
fund will invest more than 25% of its total assets in obligations of
companies in the financial services industry.
TAX-EXEMPT seeks as high a level of interest income exempt from federal
income tax as is consistent with a portfolio of high-quality, short-term
municipal obligations selected on the basis of liquidity and stability of
principal.
The fund invests primarily in high-quality, short-term municipal
securities, but also may invest in high-quality, long-term fixed, variable,
or floating rate instruments (including tender option bonds) whose features
give them interest rates, maturities, and prices similar to short-term
instruments. Securities in which the fund invests must be rated in
the highest rating category for short-term securities by at least one
nationally recognized rating service and rated in one of the two highest
categories for short-term securities by another nationally recognized
rating service if rated by more than one nationally recognized rating
service; or, if unrated, judged by FMR to be equivalent quality to those
securities rated in the highest short-term rating category, pursuant to
procedures adopted by the Board of Trustees. The fund's policy regarding
limiting investments to the highest rating category may be changed
upon 90 days' prior notice to shareholders.
The fund, under normal conditions, will invest so that at least 80% of its
income distributions is exempt from federal income tax. The fund does not
currently intend to purchase municipal obligations that are subject to the
federal alternative minimum tax.
FMR normally invests the fund's assets according to its investment strategy
and does not expect to invest in federally taxable obligations. The fund
also reserves the right to hold a substantial amount of uninvested cash or
to invest more than normally permitted in federally taxable obligations for
temporary, defensive purposes.
COMMON POLICIES
When you sell your shares of the funds, they should be worth the same
amount as when you bought them. Of course, there is no guarantee that the
funds will maintain a stable $1.00 share price. The funds follow
industry-standard guidelines on the quality and maturity of their
investments, which are designed to help maintain a stable $1.00 share
price. The funds will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities they buy. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and the
value of your investment) to change.
The funds earn income at current money market rates. Each fund stresses
preservation of capital, liquidity, and income (tax-free income
in the case of Tax-Exempt) and does not seek the higher yields or
capital appreciation that more aggressive investments may provide. Each
fund's yield will vary from day to day, and generally
reflect s current short-term interest rates and other market
conditions. It is important to note that neither the funds nor
their yields are guaranteed by the U.S. G overnment.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the funds '
SAI. Policies and limitations are considered at the time of purchase; the
sale of instruments is not required in the event of a subsequent change in
circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Current holdings and recent investment strategies are described in each
fund's financial reports, which are sent to shareholders twice a year. For
a free SAI or financial report, call Fidelity Client Services at
1-800-843-3001.
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
the U.S. Government, corporations, financial institutions, municipalities,
local and state governments, and other entities. These obligations may
carry fixed, variable, or floating interest rates. Some money market
securities employ a trust or other similar structure to modify the
maturity, price characteristics, or quality of financial assets so that
they are eligible investments for money market funds. A security's credit
may be enhanced by a bank, insurance company, or other entity. If the
structure does not perform as intended, adverse tax or investment
consequences may result.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt obligations
issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government. Not all U.S. Government securities
are backed by the full faith and credit of the United States. For example,
securities issued by the Federal Farm Credit Bank or by the Federal
National Mortgage Association are supported by the instrumentality'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.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues, and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. A fund may own a municipal
security directly or through a participation interest.
FOREIGN SECURITIES may involve different risks than domestic securities,
including risks relating to the political and economic conditions of the
foreign country involved, which could affect the payment of principal or
interest. Issuers of foreign securities include foreign governments,
corporations, and banks.
RESTRICTIONS: Treasury, Government, Domestic, Treasury Only, and Tax-Exempt
may not invest in foreign securities. Money Market and Rated Money Market
may not invest in foreign securities unless they are denominated in U.S.
dollars.
ASSET-BACKED SECURITIES 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.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other money market
securities, although they may be more volatile.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in the
fund's yield or in the market value of its assets.
RESTRICTION: Treasury Only, Treasury, and Tax-Exempt do not
intend to engage in reverse repurchase agreements.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and
possessions such as Guam, the Virgin Islands, and Puerto Rico, and their
political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, a fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIO N: A fund may not purchase a security if, as a result,
more than 10% of its net assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of a fund's assets.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type.
RESTRICTIONS: Each fund (other than Treasury, Treasury Only and Tax-Exempt)
may not invest more than 5% of its total assets in any one issuer,
except that, each fund (other than Treasury, Treasury Only and Tax-Exempt)
may invest up to 10% of its total assets in the highest quality securities
of a single issuer for up to three business days.
With respect to 75% of its total assets, Tax-Exempt may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
These limitations do not apply to U.S. Government securities.
Tax-Exempt may invest more than 25% of its total assets in tax-free
securities that finance similar types of projects.
BORROWING. Each fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: Each of Treasury, Government, Domestic, Money Market,
Treasury Only, and Rated Money Market may borrow only for temporary or
emergency purposes, or engage in reverse repurchase agreements, but not in
an amount exceeding 331/3% of its total assets. Tax-Exempt may borrow only
for temporary or emergency purposes, but not in an amount exceeding 331/3%
of its total assets.
LENDING . A fund may lend money to other funds advised by FMR.
RESTRICTION: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Treasury Only seeks as high a level of current income as is consistent with
the security of principal and liquidity, and to maintain a constant NAV of
$1.00.
Each of Treasury, Government, Domestic, Money Market, and Rated Money
Market seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
Tax-Exempt seeks as high a level of interest income exempt from federal
income tax as is consistent with a portfolio of high-quality, short-term
municipal obligations selected on the basis of liquidity and stability of
principal. The fund, under normal conditions, will invest so that at least
80% of its income distributions is exempt from federal income tax.
With respect to 75% of its total assets, Tax-Exempt may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
Each of Treasury, Government, Domestic, Money Market, Treasury Only, and
Rated Money Market may borrow only for temporary or emergency purposes, or
engage in reverse repurchase agreements, but not in an amount exceeding
331/3% of its total assets. Tax-Exempt may borrow only for temporary or
emergency purposes, but not in an amount exceeding 331/3% of its total
assets.
E ach of Domestic, Money Market, and Rated Money Market will invest
more than 25% of its total assets in obligations of companies in the
financial services industry.
Loans, in the aggregate, may not exceed 331/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in that
class's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained below.
MANAGEMENT FEE
FMR HAS SUB-ADVISORY AGREEMENTS with FMR Texas, which has primary
responsibility for providing investment management for each fund,
while FMR retains responsibility for providing the fund s with
other management services. FMR pays FMR Texas 50% of its management fee
(before expense reimbursements) for these services. In the
fiscal year ended March 31, 1995 (August 31, 1995 for Rated
Money Market), FMR paid FMR Texas the following percentages of each
fund's average net assets.
Fund Name Percentage of
Average
Net Assets
Treasury 0.10%
Government 0.10%
Domestic 0.10%
Money Market 0.10%
Tax-Exempt 0.10%
Treasury Only 0.21%
Rated Money Market 0.21%
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Class II shares of each of Treasury, Government,
Domestic, Money Market, Treasury Only, and Rated Money Market (the Taxable
Funds). Fidelity Service Co. (FSC) calculates the NAV and dividends for
Class II of each Taxable Fund, and maintains the general accounting
records for Class II of each Taxable Fund . These expenses are paid
by FMR on behalf of Rated Money Market and Treasury Only pursuant to its
management contract. In the fiscal year ended March 31, 1995,
the following fees were paid to FIIOC and FSC:
Fund Name Percentage of Percentage of
Class II's the Fund's
Average Net Average Net
Assets Assets Paid to
Paid to FIIOC FSC
Treasury * 0.01%
Government * 0.01%
Domestic * 0.01%
Money Market * 0.01%
* CLASS II WILL COMMENCE OPERATIONS ON OR ABOUT NOVEMBER 1, 1995.
UMB has entered into sub-arrangements pursuant to which FIIOC performs
transfer agency, dividend disbursing and shareholder services for Class
II of Tax-Exempt. UMB has entered into sub-arrangements pursuant to
which FSC calculates the NAV and dividends for Class II of
Tax-Exempt and maintains Tax-Exempt's general accounting records.
All of the fees are paid to FIIOC and FSC by UMB, which is reimbursed by
Class II or the fund, as appropriate, for such payments.
In the fiscal year ended March 31, 1995, fees paid by UMB to
FSC on behalf of Tax-Exempt amounted to 0.01 % of its average net
assets.
Class II of each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Under
the Plans, Class II of each fund is authorized to pay FDC a monthly
distribution fee as compensation for its services and expenses in
connection with the distribution of Class II shares of each fund and
providing personal service to and/or maintenance of shareholder accounts.
Class II of each fund currently pays FDC monthly at an annual rate of 0.15%
of its average net assets determined at the close of business on each day
throughout the month.
The Plans specifically recognize that FMR may make payments from its
management fee revenue, past profits or other resources to reimburse FDC
for expenses incurred in connection with the distribution of Class II
shares including payments made by FDC to financial institutions
for their services to Class II shareholders. The Board of Trustees of each
fund has not authorized such payments.
Each fund, other than Rated Money Market and Treasury Only, also pays other
expenses, such as legal, audit, and custodian fees; in some instances,
proxy solicitation costs; and the compensation of trustees who are not
affiliated with Fidelity. Rated Money Market and Treasury Only also pay
other expenses such as brokerage fees and commissions, interest on
borrowings (only Treasury Only), taxes, and the compensation of trustees
who are not affiliated with Fidelity.
YOUR ACCOUNT
HOW TO BUY SHARES
If you are investing through a securities dealer, financial or other
institution (Financial Institution), contact that Financial Institution
directly. Certain features of a fund may be modified when it is made
available through a program of services offered by a Financial Institution,
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. In particular, a broker may charge
transaction fees with respect to the purchase and sale of fund shares.
It is the responsibility of your Financial Institution to submit
purchases and redemptions in order for you to receive the next determined
NAV.
EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The
funds are managed to keep share prices stable at $1.00. Class II
shares are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. NAV is normally calculated at
12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m.
Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00
p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m.
Eastern time for Treasury.
Share certificates are not available for the funds.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Client Services
c/o Fidelity Institutional Money Market Funds
FIIOC
P.O. Box 1182
Boston, MA 02103-1182
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND , you can:
(small solid bullet) Place a purchase order and wire money into your
account, or
(small solid bullet) Open an account by exchanging from the same class of
any fund that is offered through this prospectus.
INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE
SYSTEM. Checks will not be accepted as a means of investment.
BY WIRE. For wiring information and instructions, you should call
the Financial Institution through which you trade or if you trade directly
through Fidelity, call Fidelity Client Services. There is no fee imposed by
the funds for wire purchases. However, if you buy shares through a
Financial Institution, the Financial Institution may impose a fee for wire
purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
In order to receive same-day acceptance of your investment, you must call
Fidelity Client Services and place your order between 8:30 a.m. and 12:00
p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00
p.m. Eastern time for Government, Domestic and Money Market; 8:30 a.m.
and 4:00 p.m. Eastern time for Rated Money Market; and 8:30 a.m. and 5:00
p.m. Eastern time for Treasury, on days the funds are open for business.
If Fidelity Client Services is not advised of your purchase prior to the
stated cutoff time, your purchase will not be accepted by the transfer
agent. All wires must be received by the transfer agent in good order at
the applicable fund's designated wire bank before the close of the Federal
Reserve Wire System on that day.
In order to purchase shares of Treasury after 3:00 p.m. Eastern time, you
must contact Fidelity Client Services one week in advance to make
late-trading arrangements. In order to receive same-day acceptance of your
purchase order for Treasury after 3:00 p.m. Eastern time, you must call
Fidelity Client Services as early in the day as possible. Wired money for
purchase orders for Treasury placed after 3:00 p.m. Eastern time
that is not properly identified with a wire reference number will be
returned to the bank from which it was wired and will not be credited to
your account.
You are advised to wire funds as early in the day as possible, and to
provide advance notice to Fidelity Client Services for purchases over $10
million ($5 million for Treasury Only).
You will earn dividends on the day of your investment, provided (i) you
telephone Fidelity Client Services and place your trade between 8:30 a.m.
and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and
3:00 p.m. Eastern time for Government, Domestic, Money Market, and
Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for
Treasury, on days the fund s are open for business, and (ii) the
fund's designated wire bank receives the wire before the close of the
Federal Reserve Wire System on the day your purchase order is accepted by
the transfer agent.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000,000 *
MINIMUM BALANCE $1,000,000
* THE MINIMUM INITIAL INVESTMENT OF $1 MILLION MAY BE WAIVED IF YOUR
AGGREGATE BALANCE IN THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS IS
GREATER THAN $10 MILLION. PLEASE CONTACT FIDELITY CLIENT SERVICES FOR MORE
INFORMATION REGARDING THIS WAIVER.
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for
Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government,
Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated
Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury.
BY TELEPHONE. Redemption requests may be made by calling Fidelity Client
Services at the phone number listed on page .
You must designate on your account application the U.S. commercial bank
account(s) into which you wish the redemption proceeds to be deposited.
Fidelity Client Services will then notify you that this feature has been
activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should send
a letter of instruction, including a signature guarantee, to Fidelity
Client Services at the address shown on page .
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
There is no fee imposed by the funds for wiring of redemption proceeds.
However, if you buy shares through a Financial Institution, the Financial
Institution may impose a fee for wire redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System to
your bank account of record. If your redemption request is received by
telephone between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt
and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government,
Domestic, Money Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m.
Eastern time for Treasury, redemption proceeds will normally be wired on
the same day your redemption request is received by the transfer agent.
A fund reserves the right to take up to seven days to pay you if making
immediate payment would adversely affect the fund.
In order to redeem shares of Treasury after 3:00 p.m. Eastern time, you
must contact Fidelity Client Services one week in advance to make late
trading arrangements.
You are advised to place your trades as early in the day as possible.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in a fund. Call Fidelity Client
Services at 1-800-843-3001 if you need additional copies of financial
reports or historical account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for institutions that wish to open multiple accounts (a master
account and sub-accounts). You may be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be
determined based on the level of services to be rendered.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
Based on prior approval of each fund, dividends relating to Class II shares
redeemed during the month can be distributed on the day of redemption. Each
fund reserves the right to limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The funds offer two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your application, you
will be assigned this option.
2. CASH OPTION. You will be sent a wire for your dividend and capital gain
distributions, if any.
Dividends will be reinvested at each fund's Class II NAV on the last day of
the month. Capital gain distributions, if any, will be reinvested at the
NAV as of the record date of the distribution.
TAXES
As with any investment, you should consider how an investment in the funds
could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt earns is
distributed to shareholders as income dividends. Interest that is federally
tax-free remains tax-free when it is distributed. Distributions from the
Taxable Funds, however, are subject to federal income tax and may also be
subject to state or local taxes. If you live outside the United States,
your distributions from these funds could also be taxed by the country in
which you reside.
For federal tax purposes, the income and short-term capital gain
distributions from each of Treasury, Government, Domestic, Money Market,
Treasury Only, and Rated Money Market are taxed as dividends; long-term
capital gain distributions, if any, are taxed as long-term capital gains.
However, for shareholders of Tax-Exempt, gain on the sale of tax-free bonds
results in taxable distributions. Short-term capital gains and a portion of
the gain on bonds purchased at a discount are taxed as dividends; long-term
capital gain distributions, if any, are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally 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 securities and other mortgage-backed securities are notable exceptions
in most states. In addition, some states may impose intangible property
taxes. You should consult your own tax adviser for details and up-to-date
information on the tax laws in your state.
During the fiscal year ended March 31, 1995, 27 % of
Treasury's, 20 % of Government's, 100 % of Treasury Only's,
2% of Domestic's, and 1 % of Money Market's income
distributions were derived from interest on U.S. Government securities
which is generally exempt from state income tax. During the fiscal year
ended August 31, 1995, 4% of Rated Money Market's income distributions was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
Distributions are taxable when they are paid, whether you take them in cash
or reinvest them. However, distributions declared in December and paid in
January are taxable as if they were paid on December 31.
Every January, the transfer agent will send you and the IRS a statement
showing the taxable distributions paid to you in the previous year.
A portion of Tax-Exempt's dividends may be free from state or local taxes.
Income from investments in your state are often tax-free to you. Each year,
the transfer agent will send you a breakdown of Tax-Exempt's income from
each state to help you calculate your taxes.
During the fiscal year ended March 31, 1995, 100 % of
Ta x- Exempt's income dividends was free from federal income
tax.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day
that both the Federal Reserve Bank of New York (New York Fed) (for all
Taxable Funds) or the Federal Reserve Bank of Kansas City (Kansas
City Fed) (for Tax-Exempt) and the New York Stock Exchange (NYSE) are open.
The following holiday closings have been scheduled for 1996: New Year's
Day, Martin Luther King 's Birthday, Washington's Birthday, Good Friday,
Memorial Day, Independence Day, Labor Day, Columbus Day, Thanksgiving Day,
and Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the Kansas City Fed, the New York Fed, or the NYSE
may modify its holiday schedule at any time. On any day that the Kansas
City Fed, the New York Fed, or the NYSE closes early, the principal
government securities markets close early (such as on days in advance of
holidays generally observed by participants in such markets), or as
permitted by the SEC, the right is reserved to advance the time on that day
by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the Kansas City Fed, the New York Fed, or the NYSE is closed, each
fund's NAV may be affected on days when investors do not have access to the
fund to purchase or redeem shares. Certain Fidelity funds may follow
different holiday closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Class II of each
fund is computed by adding Class II's pro rata share of the value of the
fund's investments, cash, and other assets, subtracting Class II's pro rata
share of the value of the fund's liabilities, subtracting the liabilities
allocated to Class II, and dividing the result by the number of Class II
shares of that fund that are outstanding. Each fund values its portfolio
securities on the basis of amortized cost. This method minimizes the effect
of changes in a security's market value and helps each fund maintain a
stable $1.00 share price.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of Class II are its NAV.
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 a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer
agent may only be liable for losses resulting from unauthorized
transactions if they do not follow reasonable procedures designed to verify
the identity of the caller. Fidelity and the transfer agent will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of the confirmation statements
immediately after receipt. If you do not want the ability to redeem and
exchange by telephone, call the transfer agent for instructions. Additional
documentation may be required from corporations, associations and certain
fiduciaries.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Fidelity
Client Services in advance of transactions in excess of $10 million
( $5 million for Treasury Only ) .
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made by federal
fund s wire; checks will not be accepted for purchases.
(small solid bullet) If your wire is not received by the close of the
Federal Reserve Wire System, you could be liable for any losses or fees a
fund or the transfer agent has incurred or for interest and penalties.
Net interest income for dividend purposes is determined by FSC on a daily
basis and shall be payable to shareholders of record at the time of its
declaration (including, for this purpose, holders of Class II shares
purchased, but excluding holders of shares redeemed, on that day).
The income declared for Treasury is based on estimates of net interest
income for the fund. Actual income may differ from estimates , and
differences, if any, will be included in the calculation of subsequent
dividends.
Shareholders of record as of 12:00 p.m. Eastern time for Tax-Exempt and
Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, Money
Market, and Rated Money Market; and 5:00 p.m. Eastern time for Treasury,
will be entitled to dividends declared that day.
Shares of Rated Money Market purchased between 3:00 p.m.
and 4:00 p.m. Eastern time begin to earn income dividends on the
following business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) Shares of Rated Money Market redeemed before
3:00 p.m. Eastern time do not receive the dividend declared on the
day of redemption ; s hares of Rated Money Market redeemed
between 3:00 p.m. and 4:00 p.m. Eastern time do receive the
dividends declared on the day of redemption.
(small solid bullet) Shares of Treasury, Government, Domestic, Money
Market, Treasury Only, and Tax-Exempt do not receive the dividend declared
on the day of redemption.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
When the NYSE, the Kansas City Fed, or the New York Fed 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, a fund may suspend redemption or postpone payment
dates. In cases of suspension of the right of redemption, the request for
redemption may either be withdrawn or payment may be made based on the NAV
next determined after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 due to redemption, the
account may be closed and the proceeds may be wired to your bank account of
record. You will be given 30 days' notice that your account will be closed
unless it is increased to the minimum.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging Class II shares of
any fund offered through this prospectus at no charge for Class II shares
of any other fund offered through this prospectus.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services at the number listed on
page between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt
and Treasury O nly ; 8:30 a.m. and 3:00 p.m. Eastern time
for Government, Domestic, Money Market, and Rated Money Market ;
and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name,
account number, the number of shares to be redeemed, and the name of the
fund to be purchased. Written requests for exchange should be mailed to
Fidelity Client Services at the address on page .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class II shares will be
redeemed at the next determined NAV after your order is received and
accepted by the transfer agent. Shares of the fund to be acquired will be
purchased at its next determined NAV after redemption proceeds are made
available. You should note that, under certain circumstances, a fund may
take up to seven days to make redemption proceeds available for the
exchange purchase of shares of another fund. In addition, please note the
following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) You will earn dividends in the acquired fund in
accordance with the fund's customary policy, normally on the day the
exchange request is received.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund s or FDC. This Prospectus and the related SAI
do not constitute an offer by the fund s or by FDC to sell or to buy
shares of the fund s to any person to whom it is unlawful to make
such offer.
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS II
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page; Table of Contents
12 ............................ *
13 a - c ............................ Investment Policies and Limitations
d ............................ Portfolio Transactions
14 a - c ............................ Trustees and Officers
15 a ............................ *
b ............................ Description of the Trusts
c ............................ Trustees and Officers
16 a i ............................ FMR
ii ............................ Trustees and Officers
iii ............................ Management Contracts
b,c,d ............................ Management Contracts
e ............................ *
f ............................ Distribution and Service Plans
g ............................ *
h ............................ Description of the Trusts
i ............................ Management Contracts
17 a ............................ Portfolio Transactions
b ............................ Portfolio Transactions
c ............................ Portfolio Transactions
d, e ............................ *
18 a ............................ Description of the Trusts
b ............................ *
19 a ............................ Additional Purchase, Exchange and Redemption
Information
b ............................ Additional Purchase, Exchange and Redemption
Information; Valuation
c ............................ *
20 Distributions and Taxes
21 a, b ............................ Distribution and Service Plans; Management
Contracts
c ............................ *
22 ............................ Performance
23 ............................ Financial Statements
</TABLE>
* Not Applicable
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS: CLASS II
FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
Domestic, Government, Money Market, Treasury
FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS:
Tax-Exempt
DAILY MONEY FUND:
Treasury Only
FIDELITY MONEY MARKET TRUST:
Rated Money Market
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 1, 1995
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
November 1, 1995). Please retain this document for future reference. The
funds' financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended March 31, 1995 (August 31, 1995
for Rated Money Market) , are incorporated herein by reference. To
obtain an additional copy of the Prospectus or the Annual Report, please
call Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Distribution and Service Plans
Description of the Trusts
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT FOR TAXABLE FUNDS
Fidelity Investments Institutional Operations Company (FIIOC)
TRANSFER AGENT FOR TAX-EXEMPT
UMB Bank, n.a. (UMB)
IMMII-ptb -1195
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 a fund'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 a fund'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 each fund's investment policies and
limitations.
Each fund'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 each fund. 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.
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: TREASURY
THE FOLLOWING ARE TREASURY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940 Act ;
(3) borrow money, except that the fund 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 value of the fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iii) The fund may borrow money only from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser. The fund will not purchase any security while
borrowings representing more than 5% of its total assets are outstanding.
The fund 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 fund's total assets.
(iv) The fund 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.
(v) The fund 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 a reorganization, consolidation, or merger.
(vi) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(vii) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(viii) The fund 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.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
Treasury, under normal conditions, invests 100% of its total assets in
U.S. Treasury bills, notes and bonds and other direct obligations of the
U.S. Treasury. The fund may also engage in repurchase agreements backed by
those obligations. These operating policies may be changed upon 90 days'
notice to shareholders.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
GOVERNMENT
THE FOLLOWING ARE GOVERNMENT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940 Act ;
(3) borrow money, except that the fund 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 value of the fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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
fund 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 fund 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 fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(v) The fund 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.
(vi) The fund 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 fund 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 a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund 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.
(xi i ) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by FMR or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: DOMESTIC
THE FOLLOWING ARE DOMESTIC'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940 Act ;
(3) borrow money, except that the fund 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 value of the fund'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
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 Act 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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
fund 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 fund 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 fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(v) The fund 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.
(vi) The fund 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 fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund'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 fund 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 a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(x) The fund 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.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: MONEY
MARKET
THE FOLLOWING ARE MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940 Act;
(3) borrow money, except that the fund 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 value of the fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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
fund 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 fund 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 fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(v) The fund 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.
(vi) The fund 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 fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or fund 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 fund 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 a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(x) The fund 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.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF TAX-EXEMPT
THE FOLLOWING ARE TAX-EXEMPT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, 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
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the 1940 Act ;
(3) make short sales of securities;
(4) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions;
(5) borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount not to exceed 33 1/3% of the value
of the fund's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed 33 1/3% of the
fund's assets by reason of a decline in net assets will be reduced within
three days (exclusive of Sundays and Holidays) to the extent necessary to
comply with the 33 1/3% limitation;
(6) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government, or any of its agencies,
instrumentalities, territories or possessions, or issued or guaranteed by a
state government or political subdivision thereof) if as a result more than
25% of the value of its total assets would be invested in securities of
companies having their principal business activities in the same industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in municipal bonds or other obligations secured by real estate or
interest therein;
(9) purchase or sell physical commodities;
(10) 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); or
(11) invest in oil, gas or other mineral exploration or development
programs.
(12) The fund 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 fund.
For purposes of limitations (1) and (7), FMR identifies the issuer of a
security depending on the terms and conditions of the security. In
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an issuing
political subdivision are separated from those of other political entities;
and whether a governmental body is guaranteeing the security.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(ii) The fund 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.
(iii) The fund 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.
(iv) The fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(v) The fund 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.
(vi) The fund does not currently intend to 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 fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF TREASURY ONLY
THE FOLLOWING ARE TREASURY ONLY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the 1940 Act ;
(2) borrow money, except that the fund 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 fund'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;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; or
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund 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 fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
representing more than 5% of its total assets are outstanding. The fund
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 fund's total assets.
(ii) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities.
(iii) The fund does not currently intend to 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 fund.
Subject to revision upon 90 days' notice to shareholders, Treasury Only
will not engage in reverse repurchase agreements.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF RATED MONEY MARKET
THE FOLLOWING ARE RATED MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS
SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, 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,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the 1940 Act;
(3) borrow money, except that the fund 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 fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund 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 fund
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.
(10) write or purchase any put or call option. 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.
(11) The fund 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 fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund 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
fund 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 fund 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 fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(iii) The fund 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 fund 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 fund does not currently intend to lend assets other than securities
to other parties, except by lending money (up to 10% of the fund'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.)
(vi) The fund 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 securities of
business enterprises that, including predecessors, have a record of less
than three years continuous operation.
(vii) The fund 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.
(vi ii ) The fund does not currently intend to purchase securities on
margin, except that the fund 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 fund 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 a reorganization,
consolidation, or merger.
(x) The fund does not currently intend to 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 fund.
For purposes of limitation (vi), pass-through entities and other special
purposes vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund 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 include 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 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 entities providing the
credit support.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund 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 fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund 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 fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund 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.
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, U.S. branches and agencies of foreign banks, and foreign branches
of foreign banks. A fund may also 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, foreign government agencies or instrumentalities, and U.S. and
foreign financial institutions, including savings and loan institutions,
insurance companies, mortgage bankers, and real estate investment trusts,
as well as banks.
The obligations of foreign branches 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 on 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, evidence of
ownership of portfolio securities may be held outside of the United States
and a fund 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 and agencies 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 involve certain additional risks. 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, or the ability to honor a credit
commitment. Additionally, there may be less public information available
about foreign entities. 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.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt does not
intend to invest in securities whose interest is federally taxable.
However, from time to time on a temporary basis, Tax-Exempt may invest a
portion of its assets in fixed-income obligations whose interest is subject
to federal income tax.
Should Tax-Exempt invest in federally taxable obligations, it would
purchase securities that, in FMR's judgment, are of high quality. These
obligations would include those issued or guaranteed by the U.S. Government
or its agencies or instrumentalities and repurchase agreements backed by
such obligations.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before state legislatures that
would affect the state tax treatment of Tax-Exempt's distributions. If such
proposals were enacted, the availability of municipal obligations and the
value of Tax-Exempt's holdings would be affected, and the Trustees would
reevaluate Tax-Exempt's investment objectives and policies.
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 fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund'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 fund's rights and
obligations relating to the investment).
Investments currently considered by the funds 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, municipal lease obligations, 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, a fund were in a
position where more than 10% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the
SEC, each fund has received permission to lend money to, and borrow money
from, other funds advised by FMR or its affiliates. Tax-Exempt will
participate in the interfund borrowing program only as a borrower.
Interfund loans and borrowings normally extend overnight, but can have a
maximum duration of seven days. Loans may be called on one day's notice.
Treasury, Treasury Only, Domestic, Money Market, Government, and Rated
Money Market will lend through the program only when the returns are higher
than those available from other short-term instruments (such as repurchase
agreements). A fund will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund 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. Treasury, Government,
and Treasury Only do not currently intend to participate in the program as
lenders.
MARKET DISRUPTION RISK. The value of municipal securities may be affected
by uncertainties in the municipal market related to legislation or
litigation involving the taxation of municipal securities or the rights of
municipal securities holders in the event of a bankruptcy. Municipal
bankruptcies are relatively rare, and certain provisions of the U.S.
Bankruptcy Code governing such bankruptcies are unclear and remain
untested. Further, the application of state law to municipal issuers could
produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the
municipal securities market generally, certain specific segments of the
market, or the relative credit quality of particular securities. Any of
these effects could have a significant impact on the prices of some or all
of the municipal securities held by a fund, making it more difficult for
the fund to maintain a stable net asset value per share.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security, or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor any
other regulatory authority has ruled definitively on certain legal issues
presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the funds.
MUNICIPAL LEASES and participation interests therein may take the form of a
lease, an installment purchase, or a conditional sale contract and are
issued by state and local governments and authorities to acquire land or a
wide variety of equipment and facilities. Generally, the funds will not
hold such obligations directly as a lessor of the property, but will
purchase a participation interest in a municipal obligation from a bank or
other third party. A participation interest gives a fund a specified,
undivided interest in the obligation in proportion to its purchased
interest in the total amount of the obligation.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set
forth requirements that states or municipalities must meet to incur debt.
These may include voter referenda, interest rate limits, or public sale
requirements. Leases, installment purchases, or conditional sale contracts
(which normally provide for title to the leased asset to pass to the
governmental issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting their constitutional and
statutory requirements for the issuance of debt. Many leases and contracts
include "non-appropriation clauses" providing that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis. Non-appropriation
clauses free the issuer from debt issuance limitations.
MUNICIPAL SECTORS :
ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open transmission
access to any electricity supplier, although it is not presently known to
what extent competition will evolve. Other risks include: (a) the
availability and cost of fuel, (b) the availability and cost of capital,
(c) the effects of conservation on energy demand, (d) the effects of
rapidly changing environmental, safety, and licensing requirements, and
other federal, state, and local regulations, (e) timely and sufficient rate
increases, and (f) opposition to nuclear power.
HEALTH CARE INDUSTRY. The health care industry is subject to regulatory
action by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for the
health care industry is payments from the Medicare and Medicaid programs.
As a result, the industry is sensitive to legislative changes and
reductions in governmental spending for such programs. Numerous other
factors may affect the industry, such as general and local economic
conditions; demand for services; expenses (including malpractice insurance
premiums); and competition among health care providers. In the future, the
following elements may adversely affect health care facility operations:
adoption of legislation proposing a national health insurance program;
other state or local health care reform measures; medical and technological
advances which dramatically alter the need for health services or the way
in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; and efforts by
employers, insurers, and governmental agencies to reduce the costs of
health insurance and health care services.
HOUSING. Housing revenue bonds are generally issued by a state, county,
city, local housing authority, or other public agency. They generally are
secured by the revenues derived from mortgages purchased with the proceeds
of the bond issue. It is extremely difficult to predict the supply of
available mortgages to be purchased with the proceeds of an issue or the
future cash flow from the underlying mortgages. Consequently, there are
risks that proceeds will exceed supply, resulting in early retirement of
bonds, or that homeowner repayments will create an irregular cash flow.
Many factors may affect the financing of multi-family housing projects,
including acceptable completion of construction, proper management,
occupancy and rent levels, economic conditions, and changes to current laws
and regulations.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student loans.
Bonds issued to supply educational institutions with funds are subject to
the risk of unanticipated revenue decline, primarily the result of
decreasing student enrollment or decreasing state and federal funding.
Among the factors that may lead to declining or insufficient revenues are
restrictions on students' ability to pay tuition, availability of state and
federal funding, and general economic conditions. Student loan revenue
bonds are generally offered by state (or substate) authorities or
commissions and are backed by pools of student loans. Underlying student
loans may be guaranteed by state guarantee agencies and may be subject to
reimbursement by the United States Department of Education through its
guaranteed student loan program. Others may be private, uninsured loans
made to parents or students which are supported by reserves or other forms
of credit enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student loan
revenue bonds are impacted by numerous factors, including the rate of
student loan defaults, seasoning of the loan portfolio, and student
repayment deferral during periods of forbearance. Other risks associated
with student loan revenue bonds include potential changes in federal
legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidies
currently in effect.
WATER AND SEWER. Water and sewer revenue bonds are often considered to have
relatively secure credit as a result of their issuer's importance, monopoly
status, and generally unimpeded ability to raise rates. Despite this, lack
of water supply due to insufficient rain, run-off, or snow pack is a
concern that has led to past defaults. Further, public resistance to rate
increases, costly environmental litigation, and federal environmental
mandates are challenges faced by issuers of water and sewer bonds.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways or other transit facilities.
Airport bonds are dependent on the general stability of the airline
industry and on the stability of a specific carrier who uses the airport as
a hub. Air traffic generally follows broader economic trends and is also
affected by the price and availability of fuel. Toll road bonds are also
affected by the cost and availability of fuel as well as toll levels, the
presence of competing roads, and the general economic health of the area.
Fuel costs and availability also affect other transportation-related
securities, as does the presence of alternate forms of transportation, such
as public transportation.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
2.QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the funds may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be 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 are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier
securities are those deemed to be in the second highest rating category
(e.g., Standard & Poor's A-2 or SP-2). Split-rated securities may be
determined to be either first or second tier based on applicable
regulations.
Each of Treasury, Government, Domestic, Money Market, Treasury Only, and
Rated Money Market may not invest more than 5% of its total assets in
second tier securities. In addition, each of Treasury, Government,
Domestic, Money Market, Treasury Only, and Rated Money Market fund 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.
Each fund 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. When determining the
maturity of a security, a fund may look to an interest rate reset or demand
feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original 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. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with 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, a fund 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, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, each fund anticipates holding restricted
securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
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, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund 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 fund's assets and may be
viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short. Short sales could be used to protect the net
asset value per share of the fund in anticipation of increased interest
rates, without sacrificing the current yield of the securities sold short.
If a fund 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 hold such securities while the short sale is
outstanding. The fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining, and closing short sales
against the box.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or another entity in determining whether to purchase a
security supported by a letter of credit guarantee, insurance or other
source of credit or liquidity. In evaluating the credit of a foreign bank
or other foreign entities, FMR will consider whether adequate public
information about the entity is available and whether the entity may be
subject to unfavorable political or economic developments, currency
controls, or other government restrictions that might affect its ability to
honor its commitment.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities), 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 government
agencies also may be stripped in this fashion.
Privately stripped government securities 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
government agencies also may be stripped in this fashion.
Because of the SEC's views on privately stripped government securities, a
fund must evaluate them as it would non-government securities pursuant to
regulatory guidelines applicable to all money market funds. A fund
currently 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, have been judged to be of equivalent quality by FMR pursuant to
procedures adopted by the Board of Trustees.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its daily dividend, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR has granted investment management authority to the
sub-adviser (see the section entitled "Management Contracts"), and the
sub-adviser is 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 a
fund 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 funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds 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; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy and
performance of accounts; effect securities transactions, and perform
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 funds 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 funds may be useful to FMR in rendering investment management
services to the funds 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 funds. 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
funds 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
funds 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 funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with FBSI and Fidelity Brokerage
Services (FBS), subsidiaries of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by nonaffiliated,
qualified brokerage firms for similar services. From September 1992 through
December 1994, FBS operated under the name Fidelity Brokerage Services
Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an
unlimited liability company and assumed the name FBS. Prior to September 4,
1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL)
as a wholly owned subsidiary of Fidelity International Limited (FIL).
Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family own,
directly or indirectly, more than 25% of the voting common stock of FIL.
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 fund transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For fiscal years ended March 31, 1995, 1994, and 1993 (August 31,
1995, 1994, and 1993 for Rated Money Market), the funds paid no
brokerage commissions. During fiscal year ended March 31, 1995
(August 31, 1995 for Rated Money Market), the funds paid no fees to
brokerage firms that provided research.
From time to time, the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund 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 fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
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 and accounts
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 fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Company (FSC) normally determines a fund's net asset value
per share (NAV) at 12:00 p.m. Eastern time for Tax-Exempt and
Treasury Only ; 3:00 p.m. Eastern time for Government, Domestic,
and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated
Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. The
valuation of portfolio securities is determined as of these times for the
purpose of computing each fund's NAV.
Portfolio securities and other assets are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its current market value. The amortized cost value of an instrument
may be higher or lower than the price a fund would receive if it sold the
instrument.
During periods of declining interest rates, a fund's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing each fund's instruments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. Each fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page .
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize each fund'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 a
fund'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.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Yield and total return fluctuate in
response to market conditions and other factors.
YIELD CALCULATIONS. To compute a class's yield for a period, 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. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. An effective
yield may also be calculated by compounding the base period return over a
one-year period. In addition to the current yield, the funds may quote
yields in advertising based on any historical seven-day period. Yields for
each class of the funds are calculated on the same basis as other
money market funds, as required by applicable regulations.
Yield information may be useful in reviewing a class's performance and in
providing a basis for comparison with other investment alternatives.
However, each class's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
class's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates a class's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing a class's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
A class's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment before taxes to equal the class's tax-free
yield. Tax-equivalent yields are calculated by dividing a class's yield by
the result of one minus a stated federal or combined federal and state tax
rate. If only a portion of a class's yield is tax-exempt, only that portion
is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 19 95 . It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of hypothetical
tax-exempt obligations yielding from 2.00 % to 8.00 %. Of
course, no assurance can be given that a class will achieve any specific
tax-exempt yield. While Tax-Exempt invests principally in obligations whose
interest is exempt from federal income tax, other income received by the
fund may be taxable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
19 95 TAX RATES AND TAX-EQUIVALENT YIELDS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Taxable Income* Federal If individual tax-exempt yield is:
Income
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Tax 2.00 % 3.00 % 4.00 % 5.00 % 6.0 % 7.00 % 8.00 %
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Return Joint Return Bracket** Then taxable equivalent yield is:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 23,351- $ 36,001 - 28.0 % 2.78 % 4.17 % 5.56 % 6.94 % 8.33 % 9.72 % 11.11 %
$ 56,500 $ 94,250
$ 56,501 - $ 94,251 - 31.0 % 2.90 % 4.35 % 5.80 % 7.25 % 8.70 % 10.14 % 11.59 %
$ 117,950 $ 143,600
$ 117,951 - $ 143,601 - 36.0 % 3.13 % 4.69% 6.25 % 7.81 % 9.38 % 10.94 % 12.50 %
$ 256,500 $ 256,500
$ 256,501 - $ 256,501 - 39.6 % 3.31 % 4.97 % 6.62 % 8.28 % 9.93 % 11.59 % 13.25 %
</TABLE>
* Net amount subject to federal income tax after deductions and exemptions.
Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions, limitations
on itemized deductions, and other credits, exclusions, and adjustments
which may increase a taxpayer's marginal tax rate. An increase in a
shareholder's marginal tax rate would increase that shareholder's
tax-equivalent yield.
Tax-Exempt may invest a portion of its assets in obligations that are
subject to state or federal income taxes. When the fund invests in these
obligations, its tax-equivalent yield will be lower. In the table above,
the tax-equivalent yields are calculated assuming investments are 100%
federally and state tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a class's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the class's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment 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 value had been constant over the period. For example, a
cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. Average
annual total returns covering periods of less than one year are calculated
by determining a class's total return for the period, extending that return
for a full year (assuming that return remains constant over the year), and
quoting the result as an annual return. While average annual total
returns are a convenient means of comparing investment alternatives,
investors should realize that performance is not constant over time, but
changes from year to year, and that average annual total returns represent
averaged figures as opposed to the actual year-to-year performance of a
class.
In addition to average annual total returns, a class may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, 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 (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL RESULTS. The following table shows 7-day yields, tax-equivalent
yields, and total returns for Class II of each fund for the period ended
March 31 , 1995 (August 31, 1995 for Rated Money Market). Initial
offering of the Class II shares of each of the funds took place on November
1, 1995. Class II shares have a 0.15% 12b-1 fee which is not reflected in
figures prior to this date. Prior date figures are those of Class I, the
original class of the funds, which does not have a 12b-1 fee. Class II
figures would have been lower had 12b-1 fees been reflected.
Tax-Exempt's Class II tax-equivalent yield is based on a 36% federal income
tax rate.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Seven-Day Tax One Five Life of One Five Life of
Yield Equivalent Year Years Fund*/Te Year Years Fund*/Te
Yield n Years n Years
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rated Money Market - 5.46% N/A 5.53% 4.60% 6.11% 5.53% 25.20% 80.99%
Class II
Treasury - Class II 5.98% N/A 4.78% 4.90% 6.03% 4.78% 27.03% 61.24%
Government - Class II 6.01% N/A 4.86% 4.99% 6.32% 4.86% 27.60% 81.07%
Domestic - Class II 6.06% N/A 4.97% 5.03% 5.31% 4.97% 27.81% 32.32%
Money Market - Class II 6.07% N/A 4.99% 5.09% 6.43% 4.99% 28.15% 83.60%
Treasury Only - Class II 5.80% N/A 4.65% N/A 4.45% 4.65% N/A 21.65%
Tax-Exempt - Class II 3.94% 6.16% 3.18% 3.65% 4.41% 3.18% 19.61% 51.86%
</TABLE>
* Life of Fund figures are from commencement of operations of each fund,
except Rated Money Market which reports a Ten Years figure. Commencement of
operations for each fund, other than Rated Money Market, are as follows:
Treasury - February 2, 1987; Government - July 25, 1985; Domestic -
November 3, 1989; Money Market - July 5, 1985; Treasury Only - October 3,
1990; and Tax-Exempt - July 25, 1985.
Note: If FMR had not reimbursed certain fund expenses during these periods,
the total returns would have been lower and the yields for Class II of each
fund would have been:
Fund Yield Tax-Equivalent
Yield
Rated Money Market - Class II N/A N/A
Treasury - Class II 5.91% N/A
Government - Class II 5.95% N/A
Domestic - Class II 5.97% N/A
Money Market - Class II 6.01% N/A
Treasury Only - Class II 5.58% N/A
Tax-Exempt - Class II 3.86% 6.03 %
The following tables show the income and capital elements of each fund's
Class II cumulative total return. The tables compare each fund's Class II
return to the record of the Standard & Poor's Composite Index of 500 Stocks
(S&P 500), the Dow Jones Industrial Average (DJIA), and the cost of living
(measured by the Consumer Price Index, or CPI) over the same period. The
CPI information is as of the month end closest to the initial investment
date for each fund. The S&P 500 and DJIA comparisons are provided to show
how each class's total return compared to the record of a broad average of
common stocks and a narrower set of stocks of major industrial companies,
respectively, over the same period. Of course, since each fund invests in
short-term fixed-income securities, common stocks represent a different
type of investment from the fund. Common stocks generally offer greater
growth potential than the funds, but generally experience greater price
volatility, which means greater potential for loss. In addition, common
stocks generally provide lower income than fixed-income investments, such
as the funds. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the funds' returns, do not include
the effect of paying brokerage commissions or other costs of investing.
CLASS II CHARTS. The figures for Class II shares of the funds reflect
the performance for Class I shares from each fund's commencement of
operations. Class I shares are sold without 12b-1 fees. The figures would
have been lower if Class II's 12b-1 fee had been included.
RATED MONEY MARKET
HISTORICAL FUND RESULTS
During the ten year period ended August 31, 1995, a hypothetical
$10,000 investment in Class II of Rated Money Market would have grown to $
18,099 , assuming all distributions were reinvested. This was a
period of fluctuating interest rates and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in Class II of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
8/31/86 10,000 742 0 10,742 13,914 14,773 10,157
8/31/87 10,000 1,408 0 11,408 18,718 21,377 10,593
8/31/88 10,000 2,217 0 12,217 15,389 16,894 11,019
8/31/89 10,000 3,335 0 13,335 21,428 23,615 11,537
8/31/90 10,000 4,456 0 14,456 20,358 23,431 12,185
8/31/91 10,000 5,450 0 15,450 25,836 28,277 12,648
8/31/92* 10,000 6,123 0 16,123 27,885 31,172 13,046
8/31/93 10,000 6,596 0 16,596 32,132 35,985 13,407
8/31/94 10,000 7,151 0 17,151 33,890 39,634 13,796
8/31/95 10,000 8,099 0 18,099 41,158 47,913 14,157
</TABLE>
* The fiscal year end of the fund changed from October 31 to August 31
in July 1992.
Explanatory Notes: With an initial investment of $10,000 made on August
31, 1985 , the net amount invested in Class II shares of the fund was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (their cash
value at the time they were reinvested), amounted to $ 18,099 . If
distributions had not been reinvested, the amount of distributions earned
from Class II shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amounted to
$ 5,949 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
TREASURY
HISTORICAL FUND RESULTS
During the period from February 2, 1987 (commencement of operations) to
March 31, 1995, a hypothetical $10,000 investment in Class II of Treasury
would have grown to $ 16,124 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class II
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1987* $ 10,000 $ 93 $ 0 $ 10,093 $ 10,694 $ 10,731 $ 10,081
1988 10,000 759 0 10,759 9,804 9,560 10,477
1989 10,000 1,632 0 11,632 11,583 11,432 10,998
1990 10,000 2,693 0 12,693 13,816 14,014 11,574
1991 10,000 3,692 0 13,692 15,805 15,668 12,140
1992 10,000 4,433 0 14,433 17,552 17,950 12,527
1993 10,000 4,932 0 14,932 20,229 19,633 12,914
1994 10,000 5,389 0 15,389 20,528 21,366 13,237
1995 10,000 6,124 0 16,124 23,722 25,101 13,615
</TABLE>
* From February 2, 1987 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on February
2, 1987, the net amount invested in Class II shares of the fund was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (their cash
value at the time they were reinvested), amounted to $ 16,124 . If
distributions had not been reinvested, the amount of distributions earned
from Class II shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amounted to
$ 4,790 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
GOVERNMENT
HISTORICAL FUND RESULTS
During the period from July 25, 1985 (commencement of operations) through
March 31, 1995, a hypothetical investment of $10,000 in Class II of
Government would have grown to $ 18,107 , assuming all distributions
were reinvested. This was a period of fluctuating interest rates and the
figures below should not be considered representative of the dividend
income or capital gain or loss that could be realized from an investment in
Class II of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,000 $ 547 $ 0 $ 10,547 $ 12,812 $ 13,855 $ 10,093
1987 10,000 1,233 0 11,233 16,170 18,170 10,399
1988 10,000 2,017 0 12,017 14,824 16,188 10,807
1989 10,000 3,001 0 13,001 17,514 19,358 11,345
1990 10,000 4,191 0 14,191 20,890 23,729 11,939
1991 10,000 5,318 0 15,318 23,897 26,530 12,523
1992 10,000 6,167 0 16,167 26,540 30,395 12,922
1993 10,000 6,743 0 16,743 30,588 33,245 13,321
1994 10,000 7,267 0 17,267 31,039 36,179 13,655
1995 10,000 8,107 0 18,107 35,869 42,502 14,045
</TABLE>
* From July 25, 1985 (commencement of operations).
** From month end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on July 25,
1985, the net amount invested in Class II shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 18,107 . If
distributions had not been reinvested, the amount of distributions earned
from Class I I shares of the fund over time would have been smaller,
and cash payments (dividends) for the period would have amounted to
$ 5,954 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
DOMESTIC
HISTORICAL FUND RESULTS
During the period from November 3, 1989 (commencement of operations) to
March 31, 1995, a hypothetical $10,000 investment in Class II of Domestic
would have grown to $ 13,232 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class II
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1990* $ 10,000 $ 352 $ 0 $ 10,352 $ 10,189 $ 10,451 $ 10,247
1991 10,000 1,192 0 11,192 11,655 11,685 10,748
1992 10,000 1,808 0 11,808 12,944 13,387 11,091
1993 10,000 2,222 0 12,222 14,919 14,642 11,433
1994 10,000 2,605 0 12,605 15,139 15,935 11,720
1995 10,000 3,232 0 13,232 17,494 18,720 12,054
</TABLE>
* From November 3, 1989 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on November
3, 1989, the net amount invested in Class II shares of the fund was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (their cash
value at the time they were reinvested), amounted to $ 13,232 . If
distributions had not been reinvested, the amount of distributions earned
from Class II shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amoun t ed to
$ 2,807 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
MONEY MARKET
HISTORICAL FUND RESULTS
During the period from July 5, 1985 (commencement of operations) to March
31, 1995, a hypothetical $10,000 investment in Class II of Money Market
would have grown to $ 18,360 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class II
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,000 $ 601 $ 0 $ 10,601 $ 12,848 $ 14,126 $ 10,112
1987 10,000 1,297 0 11,297 16,217 18,525 10,418
1988 10,000 2,103 0 12,103 14,867 16,504 10,827
1989 10,000 3,113 0 13,113 17,564 19,736 11,366
1990 10,000 4,327 0 14,327 20,950 24,192 11,961
1991 10,000 5,492 0 15,492 23,965 27,048 12,546
1992 10,000 6,358 0 16,358 26,615 30,988 12,946
1993 10,000 6,945 0 16,945 30,675 33,894 13,346
1994 10,000 7,486 0 17,486 31,128 36,885 13,680
1995 10,000 8,360 0 18,360 35,971 43,332 14,071
</TABLE>
* From July 5, 1985 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on July 5,
1985, the net amount invested in Class II shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 18,360 . If
distributions had not been reinvested, the amount of distributions earned
from Class II shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amounted to
$ 6,093 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
TREASURY ONLY
HISTORICAL FUND RESULTS
During the period from October 3, 1990 (commencement of operations) to
March 31, 1995, a hypothetical $10,000 investment in Class II of Treasury
Only would have grown to $ 12,165 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class II
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3 /31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1991* $ 10,000 $ 353 $ 0 $ 10,353 $ 12,114 $ 11,848 $ 10,173
1992 10,000 913 0 10,913 13,454 13,573 10,497
1993 10,000 1,285 0 11,285 15,506 14,846 10,821
1994 10,000 1,624 0 11,624 15,735 16,157 11,093
1995+ 10,000 2,165 0 12,165 18,183 18,980 11,409
</TABLE>
* From October 3, 1990 (commencement of operations).
+ The fiscal year end of the fund changed from July 31 to March 31 in
February 1995.
Explanatory Notes: With an initial investment of $10,000 made on October 3,
1990, the net amount invested in Class II shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested) amounted to $ 12,165 . If distributions
had not been reinvested, the amount of distributions earned from Class II
shares of the fund over time would have been smaller, and cash payments
(dividends) for the period would have amounted to $ 1,963 . The fund
did not distribute any capital gains during the period. Tax consequences of
different investments have not been factored into the above figures.
TAX-EXEMPT
HISTORICAL FUND RESULTS
During the period from July 25, 1985 (commencement of operations) to March
31, 1995, a hypothetical $10,000 investment in Class II of Tax-Exempt would
have grown to $ 15,186 , assuming all distributions were reinvested.
This was a period of fluctuating interest rates and the figures below
should not be considered representative of the dividend income or capital
gain or loss that could be realized from an investment in Class II of the
fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3 /31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,000 $ 368 $ 0 $ 10,368 $ 12,812 $ 13,855 $ 10,093
1987 10,000 814 0 10,814 16,170 18,170 10,399
1988 10,000 1,323 0 11,323 14,824 16,188 10,807
1989 10,000 1,958 0 11,958 17,514 19,358 11,345
1990 10,000 2,697 0 12,697 20,890 23,729 11,939
1991 10,000 3,411 0 13,411 23,897 26,530 12,523
1992 10,000 3,973 0 13,973 26,540 30,395 12,922
1993 10,000 4,369 0 14,369 30,588 33,245 13,321
1994 10,000 4,718 0 14,718 31,039 36,179 13,655
1995+ 10,000 5,186 0 15,186 35,869 42,502 14,045
</TABLE>
* From July 25, 1985 (commencement of operations)
** From month end closest to initial investment date.
+ The fiscal year end of the fund changed from May 31 to March 31 in
February 1995.
Explanatory Notes: With an initial investment of $10,000 made on July 25,
1985, the net amount invested in Class II shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 15,186 . If
distributions had not been reinvested, the amount of distributions earned
from Class II shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amounted to
$ 4,186 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
PERFORMANCE COMPARISONS. A fund'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 that 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 funds based on
yield. In addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance indices
prepared by Lipper or other organizations. When comparing these indices, it
is important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. 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.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
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.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND
AVERAGES(trademark)/Government, which is reported in the MONEY FUND
REPORT(trademark), covers over 229 money market funds; IBC/Donoghue's MONEY
FUND AVERAGES(trademark)/All Taxable, which is reported in the MONEY FUND
REPORT(trademark), covers over 749 money market funds; IBC/Donoghue's MONEY
FUND AVERAGES(trademark)/All Tax-Free, which is reported in the MONEY FUND
REPORT(trademark), covers over 387 money market funds.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; model portfolios or
allocations; saving for college or other goals; charitable giving; and the
Fidelity credit card. In addition, Fidelity may quote or reprint financial
or business publications and periodicals as they relate to current economic
and political conditions, fund management, portfolio composition,
investment philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity may
also reprint, and use as advertising and sales literature, articles from
Fidelity Focus, a quarterly magazine provided free of charge to Fidelity
fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
As of August 31, 1995, FMR advised over $26.5 billion in tax-free fund
assets, $79 billion in money market fund assets, $218 billion in equity
fund assets, $56 billion in international fund assets, and $23 billion in
Spartan fund assets. The funds may reference the growth and variety of
money market mutual funds and the adviser's innovation and participation in
the industry. The equity funds under management figure represents the
largest amount of equity fund assets under management by a mutual fund
investment adviser in the United States, making FMR America's leading
equity (stock) fund manager. FMR, its subsidiaries, and affiliates maintain
a worldwide information and communications network for the purpose of
researching and managing investments abroad.
In addition to performance rankings, each class of a fund may
compare its total expense ratio to the average total expense ratio of
similar funds tracked by Lipper. A class's total expense ratio is a
significant factor in comparing bond and money market investments because
of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE 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 class'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 fund 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) a fund suspends the
redemption of the shares to be exchanged as permitted under the 1940 Act or
the rules and regulations thereunder, or a 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.
In the prospectus, each fund 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, a fund would be unable to invest
effectively in accordance with its investment objective and policies, or
would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Because each fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends received deduction. A portion of each fund's
dividends derived from certain U.S. government obligations may be exempt
from state and local taxation.
To the extent that each fund's income is designated as federally tax-exempt
interest, the daily dividends declared by the fund are also federally
tax-exempt. Short-term capital gains are distributed as dividend income,
but do not qualify for the dividends-received deduction. These gains will
be taxed as ordinary income.
Each fund will send each shareholder a notice in January describing the tax
status of dividend and capital gain distributions (if any) for the prior
year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as social security
benefits, may be subject to federal income tax on up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
Tax-Exempt purchases municipal securities that are free from federal income
tax based on opinions of counsel regarding their tax status. These opinions
generally will be based on covenants by the issuers or other parties
regarding continuing compliance with federal tax requirements. If at any
time the covenants are not complied with, distribution to shareholders of
interest on a security could become federally taxable retroactive to the
date a security was issued. For certain types of structured securities,
opinions of counsel may also be based on the effect of the structure on the
federal tax treatment of the income.
As a result of the Tax Reform Act of 1986, interest on certain "private
activity" securities is subject to the federal alternative minimum tax
(AMT), although the interest continues to be excludable from gross income
for other tax purposes. Interest from private activity securities will be
considered tax-exempt for purposes of Tax-Exempt's policy on investing so
that at least 80% of its income is free from federal income tax. Interest
from private activity securities is a tax preference item for the purposes
of determining whether a taxpayer is subject to the AMT and the the amount
of AMT to be paid, if any. Private activity securities issued after August
7, 1986 to benefit a private or industrial user or to finance a private
facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after April
30, 1993 and short-term capital gains distributed by the fund are taxable
to shareholders as dividends, not as capital gains. Dividend distributions
resulting from a recharacterization of gain from the sale of bonds
purchased with market discount after April 30, 1993 are not considered
income for the purposes of Tax-Exempt's policy of investing so that at
least 80% of its income is free from federal income tax. Tax-Exempt may
distribute any net realized short-term capital gains and taxable market
discounts once a year or more often, as necessary, to maintain its net
asset value at $1.00 per share.
It is the current position of the staff of the SEC that a fund that uses
the term "tax-exempt" in its name may not derive more than 20% of its
income from municipal obligations that pay interest that is a preference
item for purposes of the AMT. According to this position, at least 80% of
Tax-Exempt's income would have to be exempt from the AMT as well as from
federal income taxes.
Corporate investors should note that a tax preference item for the purposes
of the corporate AMT is 75% of the amount by which adjusted current
earnings (which includes tax-exempt interest) exceeds the alternative
minimum taxable income of the corporation. If a shareholder receives an
exempt-interest dividend and sells shares at a loss after holding them for
a period of six months or less, the loss will be disallowed to the extent
of the amount of the exempt-interest dividend.
CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its net asset value at $1.00 per share. Treasury, Government,
Domestic, Money Market, Treasury Only, and Rated Money Market do not
anticipate earning long-term capital gains on securities held by each fund.
Tax-Exempt does not anticipate distributing long-term capital gains.
As of fiscal year ended March 31, 1995, Treasury had capital loss
carryforwards aggregating approximately $1,198,000. The loss carryforward
for Treasury, of which $82,000, $109,000, $142,000, $1,000, $330,000, and
$534,000 will expire on March 31, 1996, 1997, 1999, 2001, 2002 and 2003,
respectively, is available to offset future capital gains.
As of fiscal year ended March 31, 1995, Government had capital loss
carryforwards aggregating approximately $1,104,600. The loss carryforward
for Government, of which $19,400, $200, $53,000, $271,000, and $761,000
will expire on March 31, 1996, 1997, 2001, 2002, and 2003, respectively, is
available to offset future capital gains.
As of fiscal year ended March 31, 1995, Domestic had capital loss
carryforwards aggregating approximately $98,000. The loss carry forward for
Domestic, of which $49,000 and $49,000 will expire on March 31, 2001 and
2003, respectively, is available to offset future capital gains.
As of fiscal year ended March 31, 1995, Money Market had capital loss
carryforwards aggregating approximately $1,781,000. The loss carryforward
for Money Market, of which $336,000, $898,000 and $547,000 will expire on
March 31, 2001, 2002, and 2003, respectively, is available to offset future
capital gains.
As of fiscal year ended March 31, 1995, Treasury Only had capital loss
carryforwards aggregating approximately $184,000. The loss carryforward for
Treasury Only, of which $22,000 and $162,000 will expire on March 31, 2001
and 2002, respectively, is available to offset future capital gains.
As of fiscal year ended March 31, 1995, Tax-Exempt, had capital loss
carryforwards aggregating approximately $528,000. The loss carryforward for
Tax-Exempt, which will expire on March 31, 1996, is available to offset
future capital gains.
As of fiscal year ended August 31, 1995, Rated Money Market had capital
loss carryforwards aggregating approximately $74,000. The loss carryforward
for Rated Money Market, of which $40,000, $32,000, and $2,000 will expire
on August 31, 1996, 1997, and 1998, respectively, is available to offset
future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state law provides 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 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, may not qualify for this
benefit. The tax treatment of your dividend distributions from a fund will
be the same as if you directly owned your proportionate share of the U.S.
Government securities in the fund's portfolio. Because the income earned on
most U.S. Government securities in which a fund invests is exempt from
state and local income taxes, the portion of your dividends from the fund
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.
In a number of states, corporate franchise (income) tax laws do not exempt
interest earned on U.S. Government securities whether such securities are
held directly or through a fund.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
Each fund is treated as a separate entity from the other funds of each
Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent company organized
in 1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to 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: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trusts 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. Trustees and officers elected or
appointed to the trusts prior to the funds' conversion from series of
a Massachusetts business trust served in identical capacities. All
persons named as Trustees also serve in similar capacities for other funds
advised by FMR. The business address of each Trustee and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The business
address of all the other Trustees is Fidelity Investments, P.O. Box 9235,
Boston, Massachusetts 02205-9235. Those Trustees who are "interested
persons" by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (64), 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., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (53), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (62), 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 (63), 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 is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (71), 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 Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc., and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Trustee of First Union Real Estate
Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Vice Chairman of the Board of Directors of the
National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR 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 (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) 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 (65), Trustee, 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), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (70), 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 (61), 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 the 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 (66), 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., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNING, JR. (55), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
LELAND BARRON (36), Vice President (1989), is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
BURNELL STEHMAN (63), Vice President (1992), is also Vice President of
other funds advised by FMR and an employee of FMR Texas, Inc.
JOHN TODD (46), Vice President (1992), is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
SCOTT A. ORR (33), Vice President (1992), is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (47), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995)
THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an
employee of FMR.
JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (48), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and
Vice President, Assistant Controller, and Director of the Accounting
Department - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation
of each current trustee of each fund for his or her services as trustee for
the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money
Market).
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas
Burkhead** Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R.
Davis Jones Malone Williams
Rated Money
$ 0 $ 151 $ 145 $ 189 $ 0 $ 151 $ 153 $ 0 $ 151 $ 151 $ 151 $ 150
Market
Treasury
0 2,082 1,985 2,568 0 2,059 2,111 0 2,112 2,134 2,032 2,084
Government
0 1,672 1,600 2,059 0 1,654 1,706 0 1,708 1,723 1,632 1,683
Money Market
0 2,371 2,246 2,942 0 2,345 2,395 0 2,395 2,416 2,312 2,360
Domestic
0 464 440 575 0 459 468 0 463 472 452 460
Tax-Exempt+
0 1,128 1,066 1,393 0 1,111 1,129 0 1,130 1,149 1,099 1,118
Treasury Only+
0 543 504 679 0 533 544 0 535 533 524 523
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from from the Fund
as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox 5,200 52,000 125,000
Phyllis Burke Davis 5,200 52,000 122,000
Richard J. Flynn 0 52,000 154,500
Edward C. Johnson 3d** 0 0 0
E. Bradley Jones 5,200 49,400 123,500
Donald J. Kirk 5,200 52,000 125,000
Peter S. Lynch** 0 0 0
Gerald C. McDonough 5,200 52,000 125,000
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 125,000
Thomas R. Williams 5,200 52,000 126,500
</TABLE>
* Information is as December 31, 1994 for 206 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
+ The annualized amounts reported for Tax-Exempt and Treasury Only are for
the periods June 1, 1994 through March 31, 1995 and August 1, 1994 through
March 31, 1995, respectively. Each fund's fiscal year end changed to March
31 in February 1995.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
As of October 23, 1995, the Trustees and officers of each fund owned, in
the aggregate, less than 1% of each fund's total outstanding shares.
As of October 25, 1995, the following owned of record or beneficially 5% or
more of outstanding shares of each class of the funds:
TREASURY - CLASS I: First Union National Bank (13.32%); Bank of America
(11.69%); Texas Commerce Bank, N.A. (9.93%); and First Interstate Bank
(6.39%).
TREASURY - CLASS III: Bank Of New York (51.76%); First Union National Bank
(17.22%); and Chemical Bank (10.09%).
GOVERNMENT - CLASS I: First Tennessee Bank, Memphis (11.28%); Shawmut Bank
Of Boston, N.A. (7.47%); and Texas Commerce Bank, N.A. (7.35%).
GOVERNMENT - CLASS III: Whitney National Bank (22.53%); Boatmen's Trust Co.
of St. Louis (16.08%); First Interstate Bank (13.45%); Nationsbank
(12.58%); Indiana National Bank (11.37%); United National Bank (11.08%);
and First Union National Bank (8.10%).
DOMESTIC - CLASS I: First Union National Bank (15.68%); Texas Commerce
Bank, N.A. (11.21%); United States National Bank (10.48%); and Bank of
Boston Connecticut (5.21%).
DOMESTIC - CLASS III: Boatmen's Trust Co. of St. Louis (38.71%); First
Union National Bank (25.39%); Reliance Trust Company (21.96%); NationsBank
(11.47%); and Exchange Bank (9.90%).
MONEY MARKET - CLASS I: FMR Corp. (8.52%); Citibank, N.A. (8.35%); and
Shawmut Bank Of Boston, N.A. (5.58%).
MONEY MARKET - CLASS III: First Union National Bank (62.10%); Republic
National Bank of New York (12.38%); North American Trust Company (9.45%);
and Boatmen's Trust Co. of St. Louis (5.59%).
TREASURY ONLY - CLASS I: First Union National Bank (34.40%); First American
Trust Company (8.80%); Ropes & Gray (7.49%); Shawmut Bank Of Boston, N.A.
(7.49%); and Bingham, Dana & Gould (5.97%).
TAX-EXEMPT - CLASS I: Shawmut Bank Of Boston, N.A. (12.81%); Wachovia Bank
& Trust Company (9.21%); and Fleet National Bank (5.02%).
RATED MONEY MARKET - CLASS I: Promus Companies (15.21%); Bank of America
(7.94%); Metric Partners (7.66%); Eastern Utilities Associates (7.17%); and
United States Trust Company of NY (5.39%).
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund, all Trustees who are "interested
persons" of the trusts or of FMR, and all personnel of each fund or FMR for
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 each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
UMB, FIIOC, and FSC , each fund or class thereof, as applicable,
pays all of its expenses, without limitation, that are not assumed by
those parties. Each fund (other than Treasury Only and Rated Money Market)
pays for the typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the custodian, auditor and
non-interested Trustees. Although each fund's (other than Treasury Only's
and Rated Money Market's) current management contract provides that each
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices and reports to shareholders,
the trust, on behalf of each fund has entered into a revised transfer agent
agreement with FIIOC and UMB, as applicable, pursuant to which FIIOC or UMB
bears the costs of providing these services to existing shareholders of the
applicable classes. Other expenses paid by each fund (other than Treasury
Only and Rated Money Market) include interest, taxes, brokerage
commissions, and each fund's proportionate share of insurance premiums and
Investment Company Institute dues, and the costs of registering shares
under federal and state securities laws. Each fund is also liable for such
non-recurring expenses as may arise, including costs of any litigation to
which the fund may be a party, and any obligation it may have to indemnify
its officers and Trustees with respect to litigation.
FMR is responsible for the payment of all expenses of Treasury Only and
Rated Money Market with certain exceptions. Specific expenses payable by
FMR include, without limitation, expenses for the typesetting, printing,
and mailing of proxy materials to shareholders; legal expenses, and the
fees of the custodian, auditor, and interested Trustees; costs of
typesetting, printing, and mailing prospectuses and statements of
additional information, notices and reports to shareholders; and the fund's
proportionate share of insurance premiums and Investment Company Institute
dues. FMR also provides for transfer agent and dividend disbursing services
through FIIOC and portfolio and general accounting record maintenance
through FSC.
FMR pays all other expenses of Treasury Only and Rated Money Market with
the following exceptions: fees and expenses of all Trustees of the
applicable trust who are not "interested persons" of the trust or
FMR (the non-interested Trustees); interest on borrowings (only for
Treasury Only); taxes; brokerage commissions (if any); and such
nonrecurring expenses as may arise, including costs of any litigation to
which a fund may be a party, and any obligation it may have to indemnify
the officers and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated May 30,
1993 for the FICP funds; January 29, 1992 for Tax-Exempt; September 30,
1993 for Treasury Only; and November 1, 1986 for Rated Money Market,
which were approved by shareholders on November 18, 1992, November 13,
1991, March 24, 1993, and December 8, 1994, respectively.
For the services of FMR under each contract, each fund (other than
Treasury Only and Rated Money Market) pays FMR a monthly management fee
at the annual rate of 0 .20% of average net assets throughout the
month. Treasury Only and Rated Money Market each pay FMR a monthly
management fee at the annual rate of 0.42% of average net assets throughout
the month. The management fees paid to FMR by Treasury Only and Rated Money
Market are reduced by the fees and expenses paid by the respective funds to
the non-interested Trustees. Fees received by FMR for the last three
fiscal periods are shown in the table below.
Fund Fiscal Year Ended Management Fees Paid to FMR
Rated Money Market 8 /31/95 $ 1,352,919*
8/31/94 1,781,535*
8/31/93 2,893,862*
Treasury 3/31/95 8,680,344
3/31/94 9,834,025
3/31/93 14,029,197
Government 3/31/95 6,680,088
3/31/94 9,660,519
3/31/93 12,610,880
Domestic 3/31/95 1,923,368
3/31/94 1,525,574
3/31/93 1,536,740
Money Market 3/31/95 10,436,518
3/31/94 10,551,990
3/31/93 10,066,276
Treasury Only 3/31/95** 3,279,429*
7/31/94 4,716,697*
7/31/93 4,892,175*
7/31/92 4,249,814*
Tax-Exempt 3/31/95** 3,789,731
5/31/94 5,099,831
5/31/93 5,036,875
5/31/92 4,605,577
* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.
** The fiscal year end of Treasury Only changed from July 31 to March 31 in
February 1995. The fiscal year end of Tax-Exempt changed from May 31
to March 31 in February 1995.
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
During the fiscal periods reported, FMR voluntarily agreed subject to
revision or termination, to reimburse Class II of certain funds if and to
the extent that the fund's Class II total operating expenses
(excluding interest, taxes, brokerage commissions, extraordinary
expenses, and 12b-1 fees) were in excess of an annual rate of its
average net assets. The table below identifies the classes in
reimbursement; the level at which reimbursement began; and the dollar
amount reimbursed for each fiscal year ended March 31, 1995, 1994, and
1993. Prior to August 31, 1995, Rated Money Market was not in
reimbursement .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Level at Which
Fund Reimbursement Began Dollar Amount Reimbursed
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992
Treasury - Class I 0.20% $ 3,129,549 $ 2,956,232 $ 3,246,298 N/A
Treasury - Class III 0.20% 409,770 570 N/A N/A
Government - Class I 0.20% 1,894,134 2,665,587 3,508,338 N/A
Government - Class III 0.20% 42,272 N/A N/A N/A
Domestic - Class I 0.20% 818,759 638,552 645,507 N/A
Domestic - Class III 0.20% 48,097 N/A N/A N/A
Money Market - Class I 0.18% 2,772,106 2,437,428 2,697,402 N/A
Money Market - Class III 0.18% 230,324 7,565 N/A N/A
Treasury Only - Class I* 0.20% 1,719,806 2,474,345 2,567,107 $ 2,260,410
Tax-Exempt - Class I** 0.20% 1,429,650 1,643,561 1,591,107 1,590,017
</TABLE>
* Figures for Treasury Only are for the fiscal years ended July 31,
1992, 1993, and 1994, and the fiscal period August 1, 1994 to March 31,
1995. During the fiscal year ended July 31, 1992, the level at which
reimbursement began ranged from 0.15% to 0.20%.
** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992,
1993, and 1994, and the fiscal period June 1, 1994 to March 31, 1995.
During the fiscal year ended May 31, 1992, the level at which reimbursement
began was 0.18%.
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investment in foreign securities.
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 fund.
Under each sub-advisory agreement s dated May 30, 1993, January 29,
1992, September 30, 1973, and November 1, 1989 for the FICP funds,
Tax-Exempt, Treasury Only, and Rated Money Market, respectively, FMR pays
FMR Texas fees equal to 50% of the management fees payable by FMR under its
m anagement c ontract with each fund. Each sub-advisory
agreement was approved by each fund's shareholders on November 18, 1994,
November 13, 1991, March 24, 1993, and November 16, 1994 for the FICP
funds, Tax-Exempt, Treasury Only, and Rated Money Market, respectively. 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. The table
below shows fees paid to FMR Texas for the fiscal years ended March 31
(August 31 for Rated Money Market), 1995, 1994, and 1993.
1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Rated Money Market $ 676,460 $ 890,768 $ 1,446,931 N/A
Treasury 4,340,172 4,917,013 7,014,599 N/A
Government 3,340,044 4,830,260 6,305,440 N/A
Domestic 961,684 762,787 768,370 N/A
Money Market 5,218,259 5,275,995 5,033,138 N/A
Treasury Only* 1,639,715 2,358,349 2,446,088 $ 2,124,907
Tax-Exempt** 1,894,866 2,549,916 2,518,438 2,302,789
</TABLE>
* Figures for Treasury Only are for the fiscal years ended July 31,
1992, 1993 and 1994, and the fiscal period August 1, 1994 to March 31,
1995.
** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993
and 1994, and the fiscal period June 1, 1994 to March 31, 1995.
CONTRACTS WITH FMR AFFILIATES
FIIOC is transfer, dividend disbursing, and shareholder servicing agent for
Class II shares of Treasury, Government, Domestic, Money Market, Treasury
Only, and Rated Money Market (the Taxable Funds). UMB is the transfer agent
and shareholder servicing agent for Class II shares of Tax-Exempt. UMB has
entered into a sub-arrangement with FIIOC pursuant to which FIIOC performs
transfer, dividend disbursing, and shareholder services for Class II shares
of Tax-Exempt. FIIOC receives an annual fee and an asset-based fee based on
account size. The costs of FIIOC's services for Class II of Treasury Only
and Rated Money Market are borne by FMR pursuant to its management
contract.
For accounts that FIIOC maintains on behalf of UMB, FIIOC receives all such
fees.
In addition, FIIOC bears the expense of typesetting, printing, and mailing
prospectuses, statements of additional information, and all other reports,
notices, and statements to shareholders, with the exception of proxy
statements. Also, FIIOC pays out-of-pocket expenses associated with
providing transfer agent services.
FSC calculates NAV and dividends for Class II of each Taxable Fund, and
maintains each Taxable Fund's accounting records. UMB has
sub-arrangements with FSC pursuant to which FSC performs the calculations
necessary to determine NAV and dividends for Class II of Tax-Exempt, and
maintains the accounting records for Tax-Exempt. The annual fee rates for
these pricing and bookkeeping services are based on each fund's average net
assets, specifically .0175% for the first $500 million of average net
assets and .0075% for average net assets in excess of $500 million. The fee
is limited to a minimum of $20,000 and a maximum of $750,000 per year. The
costs of FSC's services for Rated Money Market and Treasury Only are borne
by FMR pursuant to its management contract. Pricing and bookkeeping fees,
including related out-of-pocket expenses, paid to FSC by the funds (except
Rated Money Market and Treasury Only) for the past three fiscal years
ended March 31, 1995, 1994, and 1993 were as follows:
Pricing and Bookkeeping Fees
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1995 1994 1993 1992
Treasury $ 375,762 $ 419,147 $ 576,072 N/A
Government 331,070 412,411 523,696 N/A
Domestic 122,139 107,464 108,548 N/A
Money Market 441,370 445,362 429,428 N/A
Tax-Exempt * 309,306 304,324 325,195 $ 332,264
</TABLE>
* Figure s for Tax-Exempt are for the fiscal years ended May 31,
1992, 1993, and 1994, and fiscal period June 1, 1994 to March 31,
1995 , a nnualized .
The transfer agent fees and charges for Class II of Tax-Exempt, and pricing
and bookkeeping fees for Tax-Exempt described above are paid to FIIOC and
FSC, respectively, by UMB, which is entitled to reimbursement from Class II
or the fund, as applicable, for these expenses.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC 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 FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved a Distribution and Service Plan on behalf of
Class II of each fund (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 a fund except pursuant to a
plan approved on behalf of the fund under the Rule. The Plans, as approved
by the Trustees, allow Class II of the funds and FMR to incur certain
expenses that might be considered to constitute direct or indirect payment
by the funds of distribution expenses.
Pursuant to the Plans, FDC is paid a distribution fee as a percentage of
each fund ' s Class II's average net assets at an annual rate of 0.15%
for each of the funds .
Under each Plan, if the payment of management fees by the funds to FMR is
deemed to be indirect financing by the funds of the distribution of their
shares, such payment is authorized by the Plans. Each Plan specifically
recognizes that FMR may use its management fee revenue as well as
its past profits, or its other resources from any other
source to reimburse FDC for expenses incurred in connection with the
distribution of Class II shares, including payments made to
third parties that assist in selling Class II shares of each fund,
or to third parties, including banks, that render shareholder support
services. The Trustees have not authorized such payments to date.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the applicable class of each fund and its shareholders. To the extent that
each Plan gives FMR and FDC greater flexibility in connection with the
distribution of shares of the applicable class of each fund, additional
sales of fund shares may result. Furthermore, certain shareholder support
services may be provided more effectively under the Plans by local entities
with whom shareholders have other relationships.
None of the Plans provide for specific payments by Class II of any of the
expenses of FDC or obligates FDC or FMR to perform any specific type or
level of distribution activities or incur any specific level of expense in
connection with distribution activities. After payments by FDC for
advertising, marketing and distribution, and payments to third parties, the
amounts remaining, if any, may be used as FDC may elect.
The Plans were approved by FMR as the then sole shareholder of each Class
II fund on October 31, 1995.
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, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC 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 funds
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 other financial institutions may be required to
register as dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUSTS
TRUST ORGANIZATION. Treasury, Government, Domestic and Money Market are
funds of Fidelity Institutional Cash Portfolios, an open-end management
investment company organized as a Delaware business trust on May 30, 1993.
The funds acquired all of the assets of U.S. Treasury Portfolio II, U.S.
Government Portfolio, Domestic Money Market Portfolio, and Money Market
Portfolio, respectively, of Fidelity Institutional Cash Portfolios on May
30, 1993. Currently, there are four funds of Fidelity Institutional Cash
Portfolios: Treasury, Government, Domestic, and Money Market. The Trust
Instrument permits the Trustees to create additional funds.
Tax-Exempt is a fund of Fidelity Institutional Tax-Exempt Cash Portfolios,
an open-end management investment company organized as a Delaware business
trust on January 29, 1992. Tax-Exempt acquired all of the assets of
Fidelity Institutional Tax-Exempt Cash Portfolios of Fidelity
Institutional Tax-Exempt Cash Portfolios on January 29, 1992.
Currently, Tax-Exempt is the only fund of Fidelity Institutional
Tax-Exempt Cash Portfolios. The Trust Instrument permits the
Trustees to create additional funds.
Treasury Only is a fund of Daily Money Fund, an open-end management
investment company organized as a Delaware business trust on September 29,
1993. Treasury Only acquired all of the assets of Fidelity U.S. Treasury
Income Portfolio of Daily Money Fund on September 29, 1993. Currently,
there are six funds of Daily Money Fund: Treasury Only, Money Market
Portfolio, U.S. Treasury Portfolio, Capital Reserves: U.S. Government
Portfolio, Capital Reserves: Money Market Portfolio, and Capital Reserves:
Municipal Money Market Portfolio. The Trust Instrument permits the Trustees
to create additional funds.
Rated Money Market is a fund of Fidelity Money Market Trust, an open-end
management investment company organized as a Delaware business trust on
December 29, 1994. Rated Money Market acquired all of the assets of
Domestic Money Market Portfolio of Fidelity Money Market Trust on December
29, 199 4 . Currently, there are three funds of Fidelity Money Market
Trust: Rated Money Market, Retirement Money Market Portfolio, and
Retirement Government Money Market Portfolio. The Trust Instrument permits
the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to a fund, the
right of the trust or fund to use the identifying name "Fidelity" may be
withdrawn. There is a remote possibility that one fund might become liable
for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trusts received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trusts are to
be allocated in proportion to the asset value of the respective funds,
except where allocations of direct expense can otherwise be fairly made.
The officers of the trusts, subject to the general supervision of the Board
of Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of a trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each 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
Instruments contain an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the trusts and require
that a disclaimer be given in each contract entered into or executed by the
trust or the Trustees. The Trust Instruments provide for indemnification
out of each fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instruments
also provide that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
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 the fund is unable to
meet its obligations. FMR believes that, in view of the above, the
risk of personal liability to shareholders is extremely remote.
The Trust Instruments further provide that the Trustees, if they have
exercised reasonable care, shall not be personally 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. Claims
asserted against one class of shares may subject holders of another class
of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder of Rated Money Market, you receive one vote for
each dollar value 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 non-assessable, except as set forth under the
heading "Shareholder and Trustee Liability" above. Shareholders
representing 10% or more of a trust, fund or class may, as set forth in
each of the Trust Instruments, call meetings of the t rust, fund, or
class, for any purpose related to the t rust, fund, or class, as the
case may be, including, in the case of a meeting of the entire
t rust, the purpose of voting on removal of one or more Trustees.
Any trust or fund may be terminated upon the sale of its assets to, or
merger with, another open-end management investment company or series
thereof, or upon liquidation and distribution of its assets. Generally such
terminations must be approved by vote of the holders of a majority of the
outstanding shares of the trust or fund (or, for Rated Money Market, as
determined by the current value of each shareholder's investment in the
fund or trust); however, the Trustees may, without prior shareholder
approval, change the form o f organization of the trust or fund by
merger, consolidation, or incorporation. If not so terminated, the trust
and its funds will continue indefinitely.
Under the Trust Instruments, the Trustees may, without shareholder vote,
cause a 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 fund may invest all of its assets in another investment
company.
CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, NY 10260 is custodian of the assets of each fund, except
Treasury and Tax-Exempt. Bank of New York, 48 Wall Street, New York, New
York is custodian of the assets of Treasury. The custodian for Tax-Exempt
is UMB, 1010 Grand Avenue, Kansas City Missouri. The custodian is
responsible for the safekeeping of a fund's assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of a fund or in deciding which
securities are purchased or sold by a fund. However, a fund may invest in
obligations of the custodian and may purchase securities from or sell
securities to the custodian. Chemical Bank, headquartered in New York, may
also serve as a special purpose custodian of certain assets in connection
with pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the funds'
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain 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 fund relationships.
AUDITOR S . Coopers & Lybrand L.L.P., 1999 Bryan Street, Suite
3000, Dallas, TX 75201 serves as the independent accountant for
Tax-Exempt, Treasury Only, and Rated Money Market. Price Waterhouse LLP,
2001 Ross Avenue, Suite 1800, Dallas, TX 75201 serves as the
independent accountant for the FICP funds. The auditors examine financial
statements for the funds and provide other audit, tax, and related
services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended March 31, 1995 (August 31, 1995 for Rated Money Market)
are included in the funds' Annual Report, which is a separate report
supplied with this SAI. Each fund's financial statements and financial
highlights are incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. A fund 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:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earning coverage of fixed financial charges and with high
internal cash generation.
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. Earning 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 alternative
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. I ssues 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.
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS CLASS III
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page
2 .............................. Expenses
3 a .............................. Financial Highlights
b .............................. *
c .............................. Performance
d .............................. Cover Page
4 a i............................. Charter
ii........................... Investment Principles and Risks; Securities and
Investment Practices; Fundamental Investment
Policies and Restrictions
b .............................. Securities and Investment Practices
c .............................. Who May Want to Invest; Investment Principles
and Risks; Securities and Investment Practices
5 a .............................. Charter
b i............................. FMR and Its Affiliates
ii........................... FMR and Its Affiliates; Charter; Breakdown of
Expenses
iii.......................... Expenses; Breakdown of Expenses; Management
Fee
c .............................. FMR and Its Affiliates
d .............................. Charter; Breakdown of Expenses; Cover Page;
FMR and Its Affiliates
e .............................. FMR and its Affiliates; Breakdown of Expenses;
Other Expenses
f .............................. Expenses
g .............................. Expenses; FMR and Its Affiliates
5A .............................. *
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange
Restrictions
iii.......................... *
b ............................. FMR and Its Affiliates
c .............................. Charter
d .............................. Cover Page; Charter
e .............................. Cover Page; How to Buy Shares; How to Sell
Shares; Investor Services; Exchange Restrictions
f, g .............................. Dividends, Capital Gains, and Taxes
7 a .............................. Charter; Cover Page
b .............................. How to Buy Shares; Transaction Details
c .............................. *
d .............................. How to Buy Shares
e .............................. Transaction Details; Breakdown of Expenses
f .............................. Breakdown of Expenses; Other Expenses
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
** To Be Filed By Amendment
FIDELITY INSTITUTIONAL
MONEY MARKET
FUNDS - CLASS III
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
the applicable fund's most recent financial report and portfolio listing or
a copy of the Statement of Additional Information (SAI) dated November 1,
1995. The SAI has been filed with the Securities and Exchange Commission
(SEC) and is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, contact your
financial institution, or call Fidelity Client Services at 1-800-843-3001.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN
BE NO ASSURANCE THAT A FUND 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.
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.
IMMIII-pro-1195
FIDELITY INSTITUTIONAL CASH PORTFOLIOS (FICP):
Treasury (formerly Treasury II)
Government
Domestic
Money Market
DAILY MONEY FUND (DMF):
Treasury Only
FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS (FITECP):
Tax-Exempt
FIDELITY MONEY MARKET TRUST (FMMT):
Rated Money Market (formerly Domestic Money Market Portfolio)
PROSPECTUS
NOVEMBER 1, 1995
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Class III's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers institutional and corporate investors a convenient and
economical way to invest in a professionally managed portfolio of money
market instruments.
Each fund is designed for investors who would like to earn current income
while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Each of
Treasury Only, Treasury, and Government offers an added measure of
safety with its focus on U.S. Government securities.
None of the funds constitutes a balanced investment plan. However, because
they emphasize stability, they could be well-suited for a portion of your
investment.
Each fund is composed of multiple classes of shares. Each class of a fund
has a common investment objective and investment portfolio. Class I shares
do not have a sales charge and do not pay a distribution fee. Class II
shares do not have a sales charge, but do pay a 0.15% distribution fee.
Class III shares do not have a sales charge, but do pay a 0.25%
distribution fee. Because Class I shares have no sales charge and do not
pay a distribution fee, Class I shares are expected to have a higher total
return than Class II and Class III shares. You may obtain more information
about Class I and Class II shares, which are not offered through this
prospectus, from your financial institution, or by calling Fidelity Client
Services at 1-800-843-3001. Contact your financial institution to discuss
which class is appropriate for you.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
Class III shares of a fund.
Maximum sales charge on purchases and reinvested distributions None
Maximum deferred sales charge None
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR).
FMR is responsible for the payment of all other expenses of Treasury
Only and Rated Money Market with certain limited exceptions. Each fund,
other than Treasury Only and Rated Money Market, also incurs other expenses
for services such as maintaining shareholder records and furnishing
shareholder statements and financial reports.
12b-1 fees are paid by Class III of each fund to the distributor for
services and expenses in connection with the distribution of Class III
shares of each fund. Long-term shareholders may pay more than the economic
equivalent of the maximum sales charges permitted by the National
Association of Securities Dealers, Inc., due to 12b-1 fees.
Class III's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on estimated or historical expenses of
Class III of each fund and are calculated as a percentage of average net
assets of Class III of each fund.
Class III Operating Expenses
TREASURY Management fee 0.15%
A
12b-1 fee (Distribution fee) 0.25
%
Other expenses 0.05%
A
Total operating expenses 0.45%
A
GOVERNMENT Management fee 0.16%
A
12b-1 fee (Distribution fee) 0.25
%
Other expenses 0.04%
A
Total operating expenses 0.45%
A
A AFTER EXPENSE REDUCTIONS.
Class III Operating Expenses
DOMESTIC Management fee 0.13%
A
12b-1 fee (Distribution fee) 0.25
%
Other expenses 0.07%
A
Total operating expenses 0.45%
A
MONEY MARKET Management fee 0.14%
A
12b-1 fee (Distribution fee) 0.25
%
Other expenses 0.04%
A
Total operating expenses 0.43%
A
TREASURY ONLY Management fee 0.20%
A
12b-1 fee (Distribution fee) 0.25
%
Other expenses 0.00
%
Total operating expenses 0.45%
A
TAX-EXEMPT Management fee 0.14%
A
12b-1 fee (Distribution fee) 0.25
%
Other expenses 0.06
%
Total operating expenses 0.45%
A
RATED MONEY MARKET Management fee 0.20%
A
12b-1 fee (Distribution fee) 0.25
%
Other expenses 0.00
%
Total operating expenses 0.45%
A
A AFTER EXPENSE REDUCTIONS.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment in Class III shares, assuming a 5% annual return and full
redemption at the end of each time period:
1 3 5 10
Year Years Years Years
Treasury $ 5 $ 14 $ 25 $ 57
Government $ 5 $ 14 $ 25 $ 57
Domestic $ 5 $ 14 $ 25 $ 57
Money Market $ 4 $ 14 $ 2 4 $ 54
Treasury Only $ 5 $ 14 $ 25 $ 57
Tax-Exempt $ 5 $ 14 $ 25 $ 57
Rated Money Market $ 5 $ 14 $ 25 $ 57
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class III of each fund to the
extent that total operating expenses (excluding interest, taxes, brokerage
commissions, extraordinary expenses, and 12b-1 fees) are in excess of
0 .20% ( 0 .18% for Money Market) of its average net assets. If
th ese agreement s were not in effect, the management fees ,
other expenses, and total operating expenses for Class III of each fund
would have been the following amounts, as a percentage of average net
assets: 0.20 % , 0.29%, and 0.74 % for Treasury;
0.20 % , 0.21%, and 0.66 % for Government;
0.20 % , 0.27%, and 0.72 % for Domestic; and
0.20 % , 0.07%, and 0.52 % for Money Market ; and
would have been expected to be 0.42 % , 0.00%, and 0.67 %
for Treasury Only; 0.20 % , 0.06% and 0.51 % for
Tax-Exempt; and 0.42 % , 0.00%, and 0.67 % for Rated
Money Market.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow and each fund's financial
statements are included in each fund's Annual Report and have been audited
by independent accountants. Price Waterhouse LLP serves as
independent accountants for each of the FICP funds, while Coopers &
Lybrand L.L.P. serves as independent accountants for Tax-Exempt,
Treasury Only, and Rated Money Market. Their reports, as applicable, on the
financial statements and financial highlights are included in each Annual
Report. The financial statements, the financial highlights, and the reports
are incorporated by reference into the funds' SAI, which may be obtained
free of charge from Fidelity Client Services at the phone number
listed on page . Class II of each fund will commence operations on or
about November 1, 1995. Class III of Treasury Only, Tax-Exempt, and Rated
Money Market will commence operations on or about November 1, 1995.
FICP: TREASURY (FORMERLY TREASURY II) - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C>
295.Selected Per-Share Data
296.Years ended March 31
1987A 1988 1989 1990 1991 1992 1993 1994 1995
297.Net asset value, beginning of
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
298.Income from Investment
Operations
299. Net interest income
.009 .064 .078 .088 .076 .053 .034 .030 .047
300.Less Distributions
301. From net interest income
(.009) (.064) (.078) (.088) (.076) (.053) (.034) (.030) (.047)
302.Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
303.Total return B
.93% 6.60 8.11 9.13 7.87 5.41 3.46 3.06 4.78
% % % % % % % %
304.RATIOS AND SUPPLEMENTAL DATA
305.Net assets, end of period (000
$ 26,314 $ 379,50 $ 658,06 $ 1,481,3 $ 3,281,6 $ 5,476,8 $ 5,589,6 $ 4,551,9 $ 4,688,1
omitted) 1 8 24 86 52 63 18 98
306.Ratio of expenses to average
.20% .20 .20 .19 .18 .18 .18 .18 .18
net assets
C % % % % % % % %
307.Ratio of expenses to average
.99% .32 .26 .27 .25 .25 .23 .24 .25
net assets before
C % % % % % % % %
expense reductions
308.Ratio of net interest income to
6.11% 6.46 7.92 8.63 7.50 5.12 3.38 3.01 4.71
average net assets
C % % % % % % % %
</TABLE>
A FEBRUARY 2, 1987 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1987
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: TREASURY (FORMERLY TREASURY II) - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C>
309.Selected Per-Share Data
310.Years ended March 31 1994A 1995
311.Net asset value, beginning of period $ 1.000 $ 1.000
312.Income from Investment Operations
313. Net interest income .012 .044
314.Less Distributions
315. From net interest income (.012) (.044)
316.Net asset value, end of period $ 1.000 $ 1.000
317.Total return B 1.21% 4.45
%
318.RATIOS AND SUPPLEMENTAL DATA
319.Net assets, end of period (000 omitted) $ 5,175 $ 585,57
1
320.Ratio of expenses to average net assets .50% .50
C %
321.Ratio of expenses to average net assets before expense reductions .56% .81
C %
322.Ratio of net interest income to average net assets 2.69% 4.91
C %
</TABLE>
A OCTOBER 22, 1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: GOVERNMENT - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
323.Selected Per-Share
Data
324.Years ended March 31
1986 A 1987 1988 1989 1990 1991 1992 1993 1994 1995
325.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
326.Income from
Investment Operations
327. Net interest income
.053 .063 .068 .079 .088 .077 .054 .035 .031 .048
328.Less Distributions
329. From net interest
(.053) (.063) (.068) (.079) (.088) (.077) (.054) (.035) (.031) (.048)
income
330.Net asset value, end
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
331.Total return B
5.47% 6.51 6.98 8.19 9.15 7.94 5.55 3.56 3.13 4.86
% % % % % % % % %
332.RATIOS AND SUPPLEMENTAL
DATA
333.Net assets, end of
$ 511,720 $ 1,358,6 $ 1,878,7 $ 1,918,3 $ 2,815,6 $ 3,613,8 $ 4,603,7 $ 5,686,1 $ 3,764,5 $ 3,321,0
period (000 omitted)
59 86 42 22 38 81 66 44 66
334.Ratio of expenses to
.20% .20 .20 .20 .20 .18 .18 .18 .18 .18
average net assets
C % % % % % % % % %
335.Ratio of expenses to
.30% .25 .23 .24 .25 .25 .25 .24 .24 .24
average net assets before
C % % % % % % % % %
expense reductions
336.Ratio of net interest
7.81% 6.28 6.78 7.90 8.74 7.62 5.33 3.50 3.07 4.77
income
C % % % % % % % % %
to average net assets
</TABLE>
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: GOVERNMENT - CLASS III
<TABLE>
<CAPTION>
<S> <C>
337.Selected Per-Share Data
338.Year ended March 31 1995 A
339.Net asset value, beginning of period $ 1.000
340.Income from Investment Operations
341. Net interest income .045
342.Less Distributions
343. From net interest income (.045)
344.Net asset value, end of period $ 1.000
345.Total return B 4.57%
346.RATIOS AND SUPPLEMENTAL DATA
347.Net assets, end of period (000 omitted) $ 40,516
348.Ratio of expenses to average net assets .43%
C
349.Ratio of expenses to average net assets before expense reductions .66%
C
350.Ratio of net interest income to average net assets 5.13%
C
</TABLE>
A APRIL 4, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: DOMESTIC - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
351.Selected Per-Share Data
352.Years ended March 31
1990A 1991 1992 1993 1994 1995
353.Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
354.Income from Investment Operations
355. Net interest income
.035 .078 .054 .034 .031 .049
356.Less Distributions
357. From net interest income
(.035) (.078) (.054) (.034) (.031) (.049)
358.Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
359.Total return B
3.52% 8.11 5.50 3.50 3.14 4.97
% % % % %
360.RATIOS AND SUPPLEMENTAL DATA
361.Net assets, end of period (000 omitted)
$ 330,974 $ 355,36 $ 558,72 $ 804,35 $ 656,97 $ 771,93
9 7 4 6 7
362.Ratio of expenses to average net assets
.06% .18 .18 .18 .18 .18
C % % % % %
363.Ratio of expenses to average net assets before expense
.43% .30 .29 .26 .26 .27
reductions
C % % % % %
364.Ratio of net interest income to average net assets
8.44% 7.79 5.24 3.43 3.09 4.94
C % % % % %
</TABLE>
A NOVEMBER 3, 1989 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1990
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: DOMESTIC - CLASS III
<TABLE>
<CAPTION>
<S> <C>
365.Selected Per-Share Data
366.Year ended March 31 1995A
367.Net asset value, beginning of period $ 1.000
368.Income from Investment Operations
369. Net interest income .035
370.Less Distributions
371. From net interest income (.035)
372.Net asset value, end of period $ 1.000
373.Total return B 3.51%
374.RATIOS AND SUPPLEMENTAL DATA
375.Net assets, end of period (000 omitted) $ 26,545
376.Ratio of expenses to average net assets .50%
C
377.Ratio of expenses to average net assets before expense reductions .79%
C
378.Ratio of net interest income to average net assets 5.14%
C
</TABLE>
A JULY 19, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: MONEY MARKET - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
379.Selected Per-Share
Data
380.Years ended March
1986A 1987 1988 1989 1990 1991 1992 1993 1994 1995
31
381.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
382.Income from
Investment Operations
383. Net interest income
.059 .064 .069 .080 .089 .078 .055 .035 .032 .049
384.Less Distributions
385. From net interest
(.059) (.064) (.069) (.080) (.089) (.078) (.055) (.035) (.032) (.049)
income
386.Net asset value, end
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
387.Total return B
6.01% 6.57 7.14 8.35 9.25 8.13 5.59 3.58 3.20 4.99
% % % % % % % % %
388.RATIOS AND SUPPLEMENTAL
DATA
389.Net assets, end of
$ 960,784 $ 1,569,1 $ 2,524,7 $ 2,627,4 $ 4,127,8 $ 4,706,9 $ 3,990,3 $ 4,332,9 $ 3,200,2 $ 5,130,1
period (000 omitted)
99 67 50 79 36 95 95 77 23
390.Ratio of expenses to
.19% .20 .20 .20 .20 .18 .18 .18 .18 .18
average net assets
C % % % % % % % % %
391.Ratio of expenses to
.28% .23 .23 .24 .24 .25 .24 .23 .23 .24
average net assets before
C % % % % % % % % %
expense reductions
392.Ratio of net interest
7.97% 6.33 6.95 8.11 8.82 7.80 5.42 3.50 3.15 5.00
income to average net
C % % % % % % % % %
assets
</TABLE>
A JULY 5, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
FICP: MONEY MARKET - CLASS III
<TABLE>
<CAPTION>
<S> <C> <C>
393.Selected Per-Share Data
394.Years ended March 31 1994A 1995
395.Net asset value, beginning of period $ 1.000 $ 1.000
396.Income from Investment Operations
397. Net interest income .011 .046
398.Less Distributions
399. From net interest income (.011) (.046)
400.Net asset value, end of period $ 1.000 $ 1.000
401.Total return B 1.07% 4.66%
402.RATIOS AND SUPPLEMENTAL DATA
403.Net assets, end of period (000 omitted) $ 89,463 $ 457,286
404.Ratio of expenses to average net assets .50% .50%
C
405.Ratio of expenses to average net assets before expense reductions .55% .59%
C
406.Ratio of net interest income to average net assets 2.83% 4.94%
C
</TABLE>
A NOVEMBER 17,1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
TREASURY ONLY - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
407.Selected Per-Share Data
408.Years ended March 31
1991A 1992E 1993E 1994E 1995D
409.Net asset value, beginning of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
410.Income from Investment Operations
.055 .045 .031 .032 .033
Net interest income
411.Less Distributions
(.055) (.045) (.031) (.032) (.033)
From net interest income
412.Net asset value, end of period
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
413.Total returnB
5.63% 4.64% 3.10% 3.27% 3.38%
414.RATIOS AND SUPPLEMENTAL DATA
415.Net assets, end of period (000 omitted)
$ 705,543 $ 1,197,559 $ 1,047,791 $ 1,049,170 $ 1,266,285
416.Ratio of expenses to average net assets
.03% .20% .20% .20% .20%
C C
417.Ratio of expenses to average net assets before expense
.42% .42% .42% .42% .42%
reductions
C C
418.Ratio of net interest income to average net assets
6.34% 4.43% 3.05% 3.22% 5.02%
C C
</TABLE>
A OCTOBER 3, 1990 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1991
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
D AUGUST 1, 1994 TO MARCH 31, 1995
E YEAR ENDED JULY 31.
TAX-EXEMPT - CLASS I
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
419.Selected
Per-Share Data
420.Years ended 1986A 1987 E 1988 E 1989 E 1990 E 1991 E 1992 E 1993 E 1994 E 1995D
March 31
421.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
422.Income from .044 .042 .046 .058 .058 .053 .040 .026 .024 .027
Investment Operations
Net interest income
423.Less Distributions (.044) (.042) (.046) (.058) (.058) (.053) (.040) (.026) (.024) (.027)
From net interest
income
424.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
425.Total returnB 4.51% 4.28 4.72 5.97 6.00 5.40 4.02 2.66 2.44 2.74%
% % % % % % % %
426.RATIOS AND SUPPLEMENTAL DATA
427.Net assets, end
of $ 1,162,9 $ 1,850,0 $ 2,080,8 $ 2,006,8 $ 1,984,6 $ 2,116,8 $ 2,556,9 $ 2,239,0 $ 2,390,6 $ 1,876,815
period 39 53 46 67 36 41 95 31 63
(000 omitted)
428.Ratio of expenses .19% .20 .20 .20 .20 .18 .18 .18 .18 .18%C
to average C % % % % % % % %
net assets
429.Ratio of expenses .25% .23 .22 .24 .23 .23 .25 .24 .24 .26%C
to average net assets C % % % % % % % %
before expense
reductions
430.Ratio of net 5.18% 4.20 4.65 5.80 5.82 5.28 3.90 2.62 2.41 3.20%C
interest income to C % % % % % % % %
average net assets
</TABLE>
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1986
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
C ANNUALIZED
D JUNE 1, 1994 TO MARCH 31, 1995
E YEAR ENDED MAY 31.
RATED MONEY MARKET (FORMERLY DOMESTIC MONEY MARKET PORTFOLIO) - CLASS I
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
431.Years ended August
1986B 1987B 1988B 1989B 1990B 1991B 1992A 1993 1994 1995
31
432.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
433.Income from
.069 .062 .070 .089 .080 .063 .034 .029 .033 .054
Investment Operations
Net interest income
434.Less Distributions
(.069) (.062) (.070) (.089) (.080) (.063) (.034) (.029) (.033) (.054)
From net interest income
435.Net asset value, end
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
436.Total return D
7.07 6.42 7.27 9.26 8.27 6.44 3.44% 2.93 3.34 5.53
% % % % % % % % %
437.RATIOS AND SUPPLEMENTAL DATA
438.Net assets, end of
$ 1,300,8 $ 1,231,7 $ 1,035,7 $ 1,273,7 $ 944,78 $ 851,87 $ 765,721 $ 611,410 $ 399,33 $ 300,86
period (000 omitted)
32 68 56 45 2 2 3 3
439.Ratio of expenses to
.42 .42 .42 .42 .42 .42 .42% .42 .42 .42
average net assets
% % % % % % c % % %
440.Ratio of net interest
6.87 6.22 7.00 8.91 8.01 6.38 4.04% 2.89 3.24 5.33
income to average net
% % % % % % c % % %
assets
</TABLE>
A NOVEMBER 1, 1991 TO AUGUST 31, 1992
B YEAR ENDED OCTOBER 31.
C ANNUALIZED
D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
Average annual total returns covering periods of less than one year assume
that performance will remain constant for the rest of the year.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a
yield assumes that income earned is reinvested, it is called an EFFECTIVE
YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn before
taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance call Fidelity Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Treasury, Government, Domestic, and
Money Market are diversified funds of Fidelity Institutional Cash
Portfolios, an open-end management investment company organized as a
Delaware business trust on May 30, 1993. Treasury Only is a diversified
fund of Daily Money Fund, an open-end management investment company
organized as a Delaware business trust on September 29, 1993. Tax-Exempt is
a diversified fund of Fidelity Institutional Tax-Exempt Cash Portfolios, an
open-end management investment company organized as a Delaware business
trust on January 29, 1992. Rated Money Market is a diversified fund of
Fidelity Money Market Trust, an open-end management investment company
organized as a Delaware business trust on December 29, 1994. There is a
remote possibility that one fund might become liable for a misstatement in
the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent will mail proxy materials in advance, including a voting
card and information about the proposals to be voted on. For shareholders
of all funds (other than Rated Money Market) , you are entitled to
one vote for each share you own. For shareholders of Rated Money Market,
the number of votes you are entitled to is based upon the dollar value of
your investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
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, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
The funds are managed by FMR, which handles their business affairs. FMR
Texas, Inc. (FMR Texas) , located in Irving, Texas, has primary
responsibility for providing investment management services.
As of August 31, 1995, FMR advised funds having approximately
22 million shareholder accounts with a total value of more than
$328 billion.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services. Fidelity Investments Institutional
Operations Company (FIIOC) performs transfer agent servicing functions for
Class III shares of each fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas.
Members of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940 (the
1940 Act), control of a company is presumed where one individual or group
of individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
UMB Bank, n.a. (UMB) is Tax-Exempt's transfer agent, although it employs
FIIOC to perform these functions for Class II I of Tax-Exempt. UMB is
located at 1010 Grand Avenue, Kansas City, Missouri.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
TREASURY ONLY seeks as high a level of current income as is consistent with
the security of principal and liquidity, and to maintain a constant net
asset value per share (NAV) of $1.00.
The fund invests only in U.S. Treasury securities, including bills, notes,
bonds and other direct obligations of the U.S. Treasury that are guaranteed
as to payment of principal and interest by the full faith and credit of the
U.S. Government.
The fund will invest in those securities whose interest is specifically
exempt from state and local income taxes under federal law; such interest
is not exempt from federal income tax.
TREASURY seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
Under normal conditions, the fund invests 100% of its total assets in U.S.
Treasury bills, notes and bonds and other direct obligations of the U.S.
Treasury. The fund may also engage in repurchase agreements backed by those
obligations.
GOVERNMENT seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in U.S. Government obligations issued or guaranteed as to
principal and interest by the U.S. Government, including bills, notes,
bonds and other U.S. Treasury debt securities, and instruments issued or
guaranteed by U.S. Government instrumentalities or agencies, and
repurchase agreements backed by those obligations. The fund currently
intends to invest exclusively in these instruments.
DOMESTIC seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
The fund invests in U.S. dollar-denominated money market instruments of
domestic issuers rated in the highest rating category by at least two
nationally recognized rating services, or by one if only one rating service
has rated an obligation. The fund may purchase unrated obligations
determined to be of equivalent quality pursuant to procedures adopted by
the Board of Trustees. Under normal conditions, the fund will invest more
than 25% of its total assets in obligations of companies in the financial
services industry.
RATED MONEY MARKET seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in obligations of the U.S. Government, its agencies and
instrumentalities, repurchase agreements backed by those obligations, and
other high-quality, U.S. dollar-denominated money market instruments of
domestic and foreign issuers rated in the highest rating category by at
least two nationally recognized rating services. Under normal conditions,
the fund will invest more than 25% of its total assets in obligations of
companies in the financial services industry.
MONEY MARKET seeks to obtain as high a level of current income as is
consistent with the preservation of principal and liquidity within the
limitations prescribed for the fund.
The fund invests in high-quality, U.S. dollar-denominated money market
instruments of domestic and foreign issuers rated in the highest rating
category by at least two nationally recognized rating services, or by one
if only one rating service has rated an obligation. The fund may purchase
unrated obligations determined to be of equivalent quality pursuant to
procedures adopted by the Board of Trustees. Under normal conditions, the
fund will invest more than 25% of its total assets in obligations of
companies in the financial services industry.
TAX-EXEMPT seeks as high a level of interest income exempt from federal
income tax as is consistent with a portfolio of high-quality, short-term
municipal obligations selected on the basis of liquidity and stability of
principal.
The fund invests primarily in high-quality, short-term municipal
securities, but also may invest in high-quality, long-term fixed, variable,
or floating rate instruments (including tender option bonds) whose features
give them interest rates, maturities, and prices similar to short-term
instruments. Securities in which the fund invests must be rated in the
highest rating category for short-term securities by at least one
nationally recognized rating service and rated in one of the two highest
categories for short-term securities by another nationally recognized
rating service if rated by more than one nationally recognized rating
service; or, if unrated, judged by FMR to be equivalent quality to those
securities rated in the highest short-term rating category, pursuant to
procedures adopted by the Board of Trustees. The fund's policy regarding
limiting investments to the highest rating category may be changed
upon 90 days' prior notice to shareholders.
The fund, under normal conditions, will invest so that at least 80% of its
income distributions is exempt from federal income tax. The fund does not
currently intend to purchase municipal obligations that are subject to the
federal alternative minimum tax.
FMR normally invests the fund's assets according to its investment strategy
and does not expect to invest in federally taxable obligations. The fund
also reserves the right to hold a substantial amount of uninvested cash or
to invest more than normally permitted in federally taxable obligations for
temporary, defensive purposes.
COMMON POLICIES
When you sell your shares of the funds, they should be worth the same
amount as when you bought them. Of course, there is no guarantee that the
funds will maintain a stable $1.00 share price. The funds follow
industry-standard guidelines on the quality and maturity of their
investments, which are designed to help maintain a stable $1.00 share
price. The funds will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities they buy. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and the
value of your investment) to change.
The funds earn income at current money market rates. Each fund stresses
preservation of capital, liquidity, and income (tax-free income in the
case of Tax-Exempt) and does not seek the higher yields or capital
appreciation that more aggressive investments may provide. Each fund's
yield will vary from day to day, and generally reflects
current short-term interest rates and other market conditions. It is
important to note that neither the funds nor their yields are
guaranteed by the U.S. Government.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Current holdings and recent investment strategies are described in each
fund's financial reports, which are sent to shareholders twice a year. For
a free SAI or financial report, call Fidelity Client Services at
1-800-843-3001.
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
the U.S. Government, corporations, financial institutions, municipalities,
local and state governments, and other entities. These obligations may
carry fixed, variable, or floating interest rates. Some money market
securities employ a trust or other similar structure to modify the
maturity, price characteristics, or quality of financial assets so that
they are eligible investments for money market funds. A security's credit
may be enhanced by a bank, insurance company, or other entity. If the
structure does not perform as intended, adverse tax or investment
consequences may result.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt obligations
issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government. Not all U.S. Government securities
are backed by the full faith and credit of the United States. For example,
securities issued by the Federal Farm Credit Bank or by the Federal
National Mortgage Association are supported by the instrumentality'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.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues, and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. A fund may own a municipal
security directly or through a participation interest.
FOREIGN SECURITIES may involve different risks than domestic securities,
including risks relating to the political and economic conditions of the
foreign country involved, which could affect the payment of principal or
interest. Issuers of foreign securities include foreign governments,
corporations, and banks.
RESTRICTIONS: Treasury, Government, Domestic, Treasury Only, and Tax-Exempt
may not invest in foreign securities. Money Market and Rated Money Market
may not invest in foreign securities unless they are denominated in U.S.
dollars.
ASSET-BACKED SECURITIES 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.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other money market
securities, although they may be more volatile.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in the
fund's yield or in the market value of its assets.
RESTRICTION: Treasury Only, Treasury, and Tax-Exempt do not intend
to engage in reverse repurchase agreements.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and
possessions such as Guam, the Virgin Islands, and Puerto Rico, and their
political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, a fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTION : A fund may not purchase a security if, as a result,
more than 10% of its net assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of a fund's assets.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type.
RESTRICTIONS: Each fund (other than Treasury, Treasury Only and Tax-Exempt)
may not invest more than 5% of its total assets in any one issuer,
except that, each fund (other than Treasury, Treasury Only and Tax-Exempt)
may invest up to 10% of its total assets in the highest quality securities
of a single issuer for up to three business days.
With respect to 75% of its total assets, Tax-Exempt may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
These limitations do not apply to U.S. Government securities.
Tax-Exempt may invest more than 25% of its total assets in tax-free
securities that finance similar types of projects.
BORROWING. Each fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: Each of Treasury, Government, Domestic, Money Market,
Treasury Only, and Rated Money Market may borrow only for temporary or
emergency purposes, or engage in reverse repurchase agreements, but not in
an amount exceeding 331/3% of its total assets. Tax-Exempt may borrow only
for temporary or emergency purposes, but not in an amount exceeding 331/3%
of its total assets.
LENDING. A fund may lend money to other funds advised by FMR.
RESTRICTION: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Treasury Only seeks as high a level of current income as is consistent with
the security of principal and liquidity, and to maintain a constant NAV of
$1.00.
Each of Treasury, Government, Domestic, Money Market, and Rated Money
Market seeks to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the limitations
prescribed for the fund.
Tax-Exempt seeks as high a level of interest income exempt from federal
income tax as is consistent with a portfolio of high-quality, short-term
municipal obligations selected on the basis of liquidity and stability of
principal. The fund, under normal conditions, will invest so that at least
80% of its income distributions is exempt from federal income tax.
With respect to 75% of its total assets, Tax-Exempt may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
Each of Treasury, Government, Domestic, Money Market, Treasury Only, and
Rated Money Market may borrow only for temporary or emergency purposes, or
engage in reverse repurchase agreements, but not in an amount exceeding
331/3% of its total assets. Tax-Exempt may borrow only for temporary or
emergency purposes, but not in an amount exceeding 331/3% of its total
assets.
E ach of Domestic, Money Market, and Rated Money Market will invest
more than 25% of its total assets in obligations of companies in the
financial services industry.
Loans, in the aggregate, may not exceed 331/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in that
class's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained below.
MANAGEMENT FEE
FMR HAS SUB-ADVISORY AGREEMENTS with FMR Texas, which has primary
responsibility for providing investment management for each fund, while FMR
retains responsibility for providing the funds with other management
services. FMR pays FMR Texas 50% of its management fee (before expense
reimbursements) for these services. In the fiscal year ended
March 31, 1995 (August 31, 1995 for Rated Money Market), FMR paid FMR
Texas the following percentages of each fund's average net assets.
Fund Name Percentage of
Average
Net Assets
Treasury 0.10%
Government 0.10%
Domestic 0.10%
Money Market 0.10%
Tax-Exempt 0.10%
Treasury Only 0.21%
Rated Money Market 0.21 %
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Class III shares of each of Treasury, Government,
Domestic, Money Market, Treasury Only, and Rated Money Market (the Taxable
Funds). Fidelity Service Co. (FSC) calculates the NAV and dividends for
Class III of each Taxable Fund, and maintains the general accounting
records for Class III of each Taxable Fund. These expenses are paid by FMR
on behalf of Rated Money Market and Treasury Only pursuant to its
management contract. In the fiscal year ended March 31, 1995,
the following fees were paid to FIIOC and FSC:
Fund Name Percentage of Percentage of
Class III's the Fund's
Average Net Average Net
Assets Assets Paid to
Paid to FIIOC FSC
Treasury 0.02 % 0.01%
Government 0.05% 0.01 %
Domestic 0.08 % 0.01 %
Money Market 0.03 % 0.01 %
UMB has entered into sub-arrangements pursuant to which FI I OC
performs transfer agency, dividend disbursing and shareholder services for
Class III of Tax-Exempt. UMB has entered into sub-arrangements pursuant to
which FSC calculates the NAV and dividends for Class III of Tax-Exempt and
maintains Tax-Exempt's general accounting records. All of the fees are paid
to FIIOC and FSC by UMB, which is reimbursed by Class III or the fund, as
appropriate, for such payments.
In the fiscal year ended March 31, 1995, fees paid by UMB to
FSC on behalf of Tax-Exempt amounted to 0.01% of its average net
assets.
Class III of each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Under
the Plans, Class III of each fund is authorized to pay FDC a monthly
distribution fee as compensation for its services and expenses in
connection with the distribution of Class III shares of each fund and
providing personal service to and/or maintenance of shareholder accounts.
Class III of each fund currently pays FDC monthly at an annual rate of
0.25% of its average net assets determined at the close of business on each
day throughout the month.
The Plans specifically recognize that FMR may make payments from its
management fee revenue, past profits or other resources to reimburse FDC
for expenses incurred in connection with the distribution of Class III
shares including payments made by FDC to financial institutions
for their services to Class II I shareholders. The Board of Trustees
of each fund has not authorized such payments.
Each fund, other than Rated Money Market and Treasury Only, also pays other
expenses, such as legal, audit, and custodian fees; in some instances,
proxy solicitation costs; and the compensation of trustees who are not
affiliated with Fidelity. Rated Money Market and Treasury Only also pay
other expenses such as brokerage fees and commissions, interest on
borrowings (only Treasury Only), taxes, and the compensation of trustees
who are not affiliated with Fidelity.
YOUR ACCOUNT
HOW TO BUY SHARES
If you are investing through a securities dealer, financial or other
institution (Financial Institution), contact that Financial Institution
directly. Certain features of a fund may be modified when it is made
available through a program of services offered by a Financial Institution,
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. In particular, a broker may charge
transaction fees with respect to the purchase and sale of fund shares.
It is the responsibility of your Financial Institution to submit
purchases and redemptions in order for you to receive the next determined
NAV.
EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The
funds are managed to keep share prices stable at $1.00. Class III
shares are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. NAV is normally calculated at
12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m.
Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00
p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00
p.m. Eastern time for Treasury.
Share certificates are not available for the funds.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Client Services
c/o Fidelity Institutional Money Market Funds
FIIOC
P.O. Box 1182
Boston, MA 02103-1182
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND , you can:
(small solid bullet) Place a purchase order and wire money into your
account, or
(small solid bullet) Open an account by exchanging from the same class
of any fund that is offered through this prospectus.
INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE
SYSTEM. Checks will not be accepted as a means of investment.
BY WIRE . For wiring information and instructions, you should call
the Financial Institution through which you trade or if you trade directly
through Fidelity, call Fidelity Client Services. There is no fee imposed by
the funds for wire purchases. However, if you buy shares through a
Financial Institution, the Financial Institution may impose a fee for wire
purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
In order to receive same-day acceptance of your investment, you must call
Fidelity Client Services and place your order between 8:30 a.m. and 12:00
p.m. Eastern time for Tax-Exempt and Treasury Only ; 8:30 a.m. and
3:00 p.m. Eastern time for Government, Domestic and Money
Market; 8:30 a.m. and 4:00 p.m. Eastern time for Rated Money Market; and
8:30 a.m. and 5:00 p.m. Eastern time for Treasury, on days the funds are
open for business.
If Fidelity Client Services is not advised of your purchase prior to the
stated cutoff time, your purchase will not be accepted by the transfer
agent. All wires must be received by the transfer agent in good order at
the applicable fund's designated wire bank before the close of the Federal
Reserve Wire System on that day .
In order to purchase shares of Treasury after 3:00 p.m. Eastern time, you
must contact Fidelity Client Services one week in advance to make
late-trading arrangements. In order to receive same-day acceptance of your
purchase order for Treasury after 3:00 p.m. Eastern time, you must call
Fidelity Client Services as early in the day as possible. Wired money for
purchase orders for Treasury placed after 3:00 p.m. Eastern time that is
not properly identified with a wire reference number will be returned to
the bank from which it was wired and will not be credited to your account.
You are advised to wire funds as early in the day as possible, and to
provide advance notice to Fidelity Client Services for purchases over $10
million ($5 million for Treasury Only).
You will earn dividends on the day of your investment, provided (i) you
telephone Fidelity Client Services and place your trade between 8:30 a.m.
and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and
3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated
Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, on
days the fund s are open for business, and (ii) the fund's designated
wire bank receives the wire before the close of the Federal Reserve Wire
System on the day your purchase order is accepted by the transfer agent.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000,000 *
MINIMUM BALANCE $1,000,000
* THE MINIMUM INITIAL INVESTMENT OF $1 MILLION MAY BE WAIVED IF YOUR
AGGREGATE BALANCE IN THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS IS
GREATER THAN $10 MILLION. PLEASE CONTACT FIDELITY CLIENT SERVICES FOR MORE
INFORMATION REGARDING THIS WAIVER.
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for
Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government,
Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated
Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury.
BY TELEPHONE. Redemption requests may be made by calling Fidelity Client
Services at the phone number listed on page .
You must designate on your account application the U.S. commercial bank
account(s) into which you wish the redemption proceeds to be deposited.
Fidelity Client Services will then notify you that this feature has been
activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should send
a letter of instruction, including a signature guarantee, to Fidelity
Client Services at the address shown on page .
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
There is no fee imposed by the funds for wiring of redemption proceeds.
However, if you buy shares through a Financial Institution, the Financial
Institution may impose a fee for wire redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System to
your bank account of record. If your redemption request is received by
telephone between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and
Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government,
Domestic, Money Market, and Rated Money Market ; and 8:30 a.m. and 5:00
p.m. Eastern time for Treasury, redemption proceeds will normally be
wired on the same day your redemption request is received by the transfer
agent.
A fund reserves the right to take up to seven days to pay you if making
immediate payment would adversely affect the fund.
In order to redeem shares of Treasury after 3:00 p.m. Eastern time, you
must contact Fidelity Client Services one week in advance to make late
trading arrangements.
You are advised to place your trades as early in the day as possible.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in a fund. Call Fidelity Client
Services at 1-800-843-3001 if you need additional copies of financial
reports or historical account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for institutions that wish to open multiple accounts (a master
account and sub-accounts). You may be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be
determined based on the level of services to be rendered.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
Based on prior approval of each fund, dividends relating to Class III
shares redeemed during the month can be distributed on the day of
redemption. Each fund reserves the right to limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The funds offer two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your application, you
will be assigned this option.
2. CASH OPTION. You will be sent a wire for your dividend and capital gain
distributions, if any.
Dividends will be reinvested at each fund's Class III NAV on the last day
of the month. Capital gain distributions, if any, will be reinvested at the
NAV as of the record date of the distribution.
TAXES
As with any investment, you should consider how an investment in the funds
could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt earns is
distributed to shareholders as income dividends. Interest that is federally
tax-free remains tax-free when it is distributed. Distributions from the
Taxable Funds, however, are subject to federal income tax and may also be
subject to state or local taxes. If you live outside the United States,
your distributions from these funds could also be taxed by the country in
which you reside.
For federal tax purposes, the income and short-term capital gain
distributions from each of Treasury, Government, Domestic, Money Market,
Treasury Only, and Rated Money Market are taxed as dividends; long-term
capital gain distributions, if any, are taxed as long-term capital gains.
However, for shareholders of Tax-Exempt, gain on the sale of tax-free bonds
results in taxable distributions. Short-term capital gains and a portion of
the gain on bonds purchased at a discount are taxed as dividends; long-term
capital gain distributions, if any, are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally 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 securities and other mortgage-backed securities are notable exceptions
in most states. In addition, some states may impose intangible property
taxes. You should consult your own tax adviser for details and up-to-date
information on the tax laws in your state.
During the fiscal year ended March 31, 1995, 27 % of
Treasury's, 20 % of Government's, 100 % of Treasury Only's,
2% of Domestic's, and 1% of Money Market's income distributions were
derived from interest on U.S. Government securities which is generally
exempt from state income tax. During the fiscal year ended August 31,
1995, 4% of Rated Money Market's income distributions was derived from
interest on U.S. Government securities which is generally exempt from state
income tax.
Distributions are taxable when they are paid, whether you take them in cash
or reinvest them. However, distributions declared in December and paid in
January are taxable as if they were paid on December 31.
Every January, the transfer agent will send you and the IRS a statement
showing the taxable distributions paid to you in the previous year.
A portion of Tax-Exempt's dividends may be free from state or local taxes.
Income from investments in your state are often tax-free to you. Each year,
the transfer agent will send you a breakdown of Tax-Exempt's income from
each state to help you calculate your taxes.
During the fiscal year ended March 31, 1995, 100 % of
Tax-Exempt's income dividends was free from federal income tax.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day
that both the Federal Reserve Bank of New York (New York Fed) (for all
Taxable Funds) or the Federal Reserve Bank of Kansas City (Kansas
City Fed) (for Tax-Exempt) and the New York Stock Exchange (NYSE) are open.
The following holiday closings have been scheduled for 1996: New Year's
Day, Martin Luther King 's Birthday, Washington's Birthday, Good Friday,
Memorial Day, Independence Day, Labor Day, Columbus Day, Thanksgiving Day,
and Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the Kansas City Fed, the New York Fed, or the NYSE
may modify its holiday schedule at any time. On any day that the Kansas
City Fed, the New York Fed, or the NYSE closes early, the principal
government securities markets close early (such as on days in advance of
holidays generally observed by participants in such markets), or as
permitted by the SEC, the right is reserved to advance the time on that day
by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the Kansas City Fed, the New York Fed, or the NYSE is closed, each
fund's NAV may be affected on days when investors do not have access to the
fund to purchase or redeem shares. Certain Fidelity funds may follow
different holiday closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Class III of each
fund is computed by adding Class III's pro rata share of the value of the
fund's investments, cash, and other assets, subtracting Class III's pro
rata share of the value of the fund's liabilities, subtracting the
liabilities allocated to Class III, and dividing the result by the number
of Class III shares of that fund that are outstanding. Each fund values its
portfolio securities on the basis of amortized cost. This method minimizes
the effect of changes in a security's market value and helps each fund
maintain a stable $1.00 share price.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of Class III are its NAV.
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 a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer
agent may only be liable for losses resulting from unauthorized
transactions if they do not follow reasonable procedures designed to verify
the identity of the caller. Fidelity and the transfer agent will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of the confirmation statements
immediately after receipt. If you do not want the ability to redeem and
exchange by telephone, call the transfer agent for instructions. Additional
documentation may be required from corporations, associations and certain
fiduciaries.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Fidelity
Client Services in advance of transactions in excess of $10 million
( $5 million for Treasury Only ) .
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made by federal funds
wire; checks will not be accepted for purchases.
(small solid bullet) If your wire is not received by the close of the
Federal Reserve Wire System, you could be liable for any losses or fees a
fund or the transfer agent has incurred or for interest and penalties.
Net interest income for dividend purposes is determined by FSC on a daily
basis and shall be payable to shareholders of record at the time of its
declaration (including, for this purpose, holders of Class III shares
purchased, but excluding holders of shares redeemed, on that day).
The income declared for Treasury is based on estimates of net interest
income for the fund. Actual income may differ from estimates, and
differences, if any, will be included in the calculation of subsequent
dividends.
Shareholders of record as of 12:00 p.m. Eastern time for Tax-Exempt and
Treasury Only; 3:00 p.m. Eastern time for Government, Domestic,
Money Market, and Rated Money Market; and 5:00 p.m. Eastern time for
Treasury, will be entitled to dividends declared that day.
Shares of Rated Money Market purchased between 3:00 p.m. and 4:00
p.m. Eastern time begin to earn income dividends on the following
business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) Shares of Rated Money Market redeemed before
3:00 p.m. Eastern time do not receive the dividend declared on the day of
redemption ; s hares of Rated Money Market redeemed between
3:00 p.m. and 4:00 p.m. Eastern time do receive the dividends
declared on the day of redemption.
(small solid bullet) Shares of Treasury, Government, Domestic, Money
Market, Treasury Only, and Tax-Exempt do not receive the dividend declared
on the day of redemption.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
When the NYSE, the Kansas City Fed, or the New York Fed 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, a fund may suspend redemption or postpone payment
dates. In cases of suspension of the right of redemption, the request for
redemption may either be withdrawn or payment may be made based on the NAV
next determined after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 due to redemption, the
account may be closed and the proceeds may be wired to your bank account of
record. You will be given 30 days' notice that your account will be closed
unless it is increased to the minimum.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging Class III shares of
any fund offered through this prospectus at no charge for Class III shares
of any other fund offered through this prospectus.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services at the number listed on page
between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and
Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government,
Domestic, Money Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m.
Eastern time for Treasury.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name,
account number, the number of shares to be redeemed, and the name of the
fund to be purchased. Written requests for exchange should be mailed to
Fidelity Client Services at the address on page .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class III shares will be
redeemed at the next determined NAV after your order is received and
accepted by the transfer agent. Shares of the fund to be acquired will be
purchased at its next determined NAV after redemption proceeds are made
available. You should note that, under certain circumstances, a fund may
take up to seven days to make redemption proceeds available for the
exchange purchase of shares of another fund. In addition, please note the
following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) You will earn dividends in the acquired fund in
accordance with the fund's customary policy, normally on the day the
exchange request is received.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund s or FDC. This Prospectus and the related SAI
do not constitute an offer by the fund s or by FDC to sell or to buy
shares of the fund s to any person to whom it is unlawful to make
such offer.
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS III
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page; Table of Contents
12 ............................ *
13 a - c ............................ Investment Policies and Limitations
d ............................ Portfolio Transactions
14 a - c ............................ Trustees and Officers
15 a ............................ *
b ............................ Description of the Trusts
c ............................ Trustees and Officers
16 a i ............................ FMR
ii ............................ Trustees and Officers
iii ............................ Management Contracts
b,c,d ............................ Management Contracts
e ............................ *
f ............................ Distribution and Service Plans
g ............................ *
h ............................ Description of the Trusts
i ............................ Management Contracts
17 a ............................ Portfolio Transactions
b ............................ Portfolio Transactions
c ............................ Portfolio Transactions
d, e ............................ *
18 a ............................ Description of the Trusts
b ............................ *
19 a ............................ Additional Purchase, Exchange and Redemption
Information
b ............................ Additional Purchase, Exchange and Redemption
Information; Valuation
c ............................ *
20 Distributions and Taxes
21 a, b ............................ Distribution and Service Plans; Management
Contracts
c ............................ *
22 ............................ Performance
23 ............................ Financial Statements
</TABLE>
* Not Applicable
FIDELITY INSTITUTIONAL MONEY MARKET FUNDS: CLASS III
FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
Domestic, Government, Money Market, Treasury
FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS:
Tax-Exempt
DAILY MONEY FUND:
Treasury Only
FIDELITY MONEY MARKET TRUST:
Rated Money Market
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 1, 1995
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
November 1, 1995). Please retain this document for future reference. The
funds' financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended March 31, 1995 (August 31, 1995
for Rated Money Market) , are incorporated herein by reference. To
obtain an additional copy of the Prospectus or the Annual Report, please
call Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Distribution and Service Plans
Description of the Trusts
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT FOR TAXABLE FUNDS
Fidelity Investments Institutional Operations Company (FIIOC)
TRANSFER AGENT FOR TAX-EXEMPT
UMB Bank, n.a. (UMB)
IMM III -ptb-1195
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 a fund'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 a fund'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 each fund's investment policies and
limitations.
Each fund'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 each fund. 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.
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: TREASURY
THE FOLLOWING ARE TREASURY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940 Act ;
(3) borrow money, except that the fund 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 value of the fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iii) The fund may borrow money only from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser. The fund will not purchase any security while
borrowings representing more than 5% of its total assets are outstanding.
The fund 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 fund's total assets.
(iv) The fund 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.
(v) The fund 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 a reorganization, consolidation, or merger.
(vi) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(vii) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(viii) The fund 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.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company managed
by FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
Treasury, under normal conditions, invests 100% of its total assets in U.S.
Treasury bills, notes and bonds and other direct obligations of the U.S.
Treasury. The fund may also engage in repurchase agreements backed by those
obligations. These operating policies may be changed upon 90 days' notice
to shareholders.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS:
GOVERNMENT
THE FOLLOWING ARE GOVERNMENT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940 Act ;
(3) borrow money, except that the fund 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 value of the fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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
fund 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 fund 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 fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(v) The fund 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.
(vi) The fund 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 fund 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 a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund 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.
(xi i ) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by FMR or an affiliate or successor with substantially the same
fundamental investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: DOMESTIC
THE FOLLOWING ARE DOMESTIC'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940 Act;
(3) borrow money, except that the fund 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 value of the fund'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
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 Act 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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
fund 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 fund 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 fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(v) The fund 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.
(vi) The fund 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 fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund'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 fund 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 a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(x) The fund 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.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: MONEY
MARKET
THE FOLLOWING ARE MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) 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 5% of
its total assets would be invested in the securities of such issuer,
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the 1940 Act ;
(3) borrow money, except that the fund 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 value of the fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) buy or sell real estate;
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) The fund 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 fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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
fund 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 fund 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 fund does not currently intend to purchase securities on margin,
except that the fund 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.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(v) The fund 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.
(vi) The fund 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 fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or fund 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 fund 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 a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
NYSE or the AMEX or traded on the NASDAQ National Market System.
(x) The fund 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.
(xi) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xii) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
FMR or an affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF TAX-EXEMPT
THE FOLLOWING ARE TAX-EXEMPT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, 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
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund would hold more than 10% of
the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the 1940 Act;
(3) make short sales of securities;
(4) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions;
(5) borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount not to exceed 33 1/3% of the value
of the fund's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed 33 1/3% of the
fund's assets by reason of a decline in net assets will be reduced within
three days (exclusive of Sundays and Holidays) to the extent necessary to
comply with the 33 1/3% limitation;
(6) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government, or any of its agencies,
instrumentalities, territories or possessions, or issued or guaranteed by a
state government or political subdivision thereof) if as a result more than
25% of the value of its total assets would be invested in securities of
companies having their principal business activities in the same industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in municipal bonds or other obligations secured by real estate or
interest therein;
(9) purchase or sell physical commodities;
(10) 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); or
(11) invest in oil, gas or other mineral exploration or development
programs.
(12) The fund 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 fund.
For purposes of limitations (1) and (7), FMR identifies the issuer of a
security depending on the terms and conditions of the security. In
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an issuing
political subdivision are separated from those of other political entities;
and whether a governmental body is guaranteeing the security.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(ii) The fund 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.
(iii) The fund 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.
(iv) The fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(v) The fund 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.
(vi) The fund does not currently intend to 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 fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF TREASURY ONLY
THE FOLLOWING ARE TREASURY ONLY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the 1940 Act;
(2) borrow money, except that the fund 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 fund'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;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; or
(7) 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
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund 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 fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or fund for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
representing more than 5% of its total assets are outstanding. The fund
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 fund's total assets.
(ii) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities.
(iii) The fund does not currently intend to 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 fund.
Subject to revision upon 90 days' notice to shareholders, Treasury Only
will not engage in reverse repurchase agreements.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF RATED MONEY MARKET
THE FOLLOWING ARE RATED MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS
SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, 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,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the 1940 Act;
(3) borrow money, except that the fund 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 fund'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
fund 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 the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund 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 fund
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.
(10) write or purchase any put or call option. 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.
(11) The fund 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 fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund 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
fund 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 fund 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 fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(iii) The fund 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 fund 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 fund does not currently intend to lend assets other than securities
to other parties, except by lending money (up to 10% of the fund'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.)
(vi) The fund 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 securities of
business enterprises that, including predecessors, have a record of less
than three years continuous operation.
(vii) The fund 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.
(vii i ) The fund does not currently intend to purchase securities on
margin, except that the fund 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 fund 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 a reorganization,
consolidation, or merger.
( x ) The fund does not currently intend to 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 fund.
For purposes of limitation (vi), pass-through entities and other special
purposes vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund 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 include 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 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 entities providing the
credit support.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund 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 fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund 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 fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund 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.
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, U.S. branches and agencies of foreign banks, and foreign branches
of foreign banks. A fund may also 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, foreign government agencies or instrumentalities, and U.S. and
foreign financial institutions, including savings and loan institutions,
insurance companies, mortgage bankers, and real estate investment trusts,
as well as banks.
The obligations of foreign branches 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 on 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, evidence of
ownership of portfolio securities may be held outside of the United States
and a fund 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 and agencies 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 involve certain additional risks. 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, or the ability to honor a credit
commitment. Additionally, there may be less public information available
about foreign entities. 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.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt does not
intend to invest in securities whose interest is federally taxable.
However, from time to time on a temporary basis, Tax-Exempt may invest a
portion of its assets in fixed-income obligations whose interest is subject
to federal income tax.
Should Tax-Exempt invest in federally taxable obligations, it would
purchase securities that, in FMR's judgment, are of high quality. These
obligations would include those issued or guaranteed by the U.S. Government
or its agencies or instrumentalities and repurchase agreements backed by
such obligations.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before state legislatures that
would affect the state tax treatment of Tax-Exempt's distributions. If such
proposals were enacted, the availability of municipal obligations and the
value of Tax-Exempt's holdings would be affected, and the Trustees would
reevaluate Tax-Exempt's investment objectives and policies.
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 fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund'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 fund's rights and
obligations relating to the investment).
Investments currently considered by the funds 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, municipal lease obligations, 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, a fund were in a
position where more than 10% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the
SEC, each fund has received permission to lend money to, and borrow money
from, other funds advised by FMR or its affiliates. Tax-Exempt will
participate in the interfund borrowing program only as a borrower.
Interfund loans and borrowings normally extend overnight, but can have a
maximum duration of seven days. Loans may be called on one day's notice.
Treasury, Treasury Only, Domestic, Money Market, Government, and Rated
Money Market will lend through the program only when the returns are higher
than those available from other short-term instruments (such as repurchase
agreements). A fund will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. A fund 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. Treasury, Government,
and Treasury Only do not currently intend to participate in the program as
lenders.
MARKET DISRUPTION RISK. The value of municipal securities may be affected
by uncertainties in the municipal market related to legislation or
litigation involving the taxation of municipal securities or the rights of
municipal securities holders in the event of a bankruptcy. Municipal
bankruptcies are relatively rare, and certain provisions of the U.S.
Bankruptcy Code governing such bankruptcies are unclear and remain
untested. Further, the application of state law to municipal issuers could
produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the
municipal securities market generally, certain specific segments of the
market, or the relative credit quality of particular securities. Any of
these effects could have a significant impact on the prices of some or all
of the municipal securities held by a fund, making it more difficult for
the fund to maintain a stable net asset value per share.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security, or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor any
other regulatory authority has ruled definitively on certain legal issues
presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the funds.
MUNICIPAL LEASES and participation interests therein may take the form of a
lease, an installment purchase, or a conditional sale contract and are
issued by state and local governments and authorities to acquire land or a
wide variety of equipment and facilities. Generally, the funds will not
hold such obligations directly as a lessor of the property, but will
purchase a participation interest in a municipal obligation from a bank or
other third party. A participation interest gives a fund a specified,
undivided interest in the obligation in proportion to its purchased
interest in the total amount of the obligation.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set
forth requirements that states or municipalities must meet to incur debt.
These may include voter referenda, interest rate limits, or public sale
requirements. Leases, installment purchases, or conditional sale contracts
(which normally provide for title to the leased asset to pass to the
governmental issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting their constitutional and
statutory requirements for the issuance of debt. Many leases and contracts
include "non-appropriation clauses" providing that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis. Non-appropriation
clauses free the issuer from debt issuance limitations.
MUNICIPAL SECTORS:
ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open transmission
access to any electricity supplier, although it is not presently known to
what extent competition will evolve. Other risks include: (a) the
availability and cost of fuel, (b) the availability and cost of capital,
(c) the effects of conservation on energy demand, (d) the effects of
rapidly changing environmental, safety, and licensing requirements, and
other federal, state, and local regulations, (e) timely and sufficient rate
increases, and (f) opposition to nuclear power.
HEALTH CARE INDUSTRY. The health care industry is subject to regulatory
action by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for the
health care industry is payments from the Medicare and Medicaid programs.
As a result, the industry is sensitive to legislative changes and
reductions in governmental spending for such programs. Numerous other
factors may affect the industry, such as general and local economic
conditions; demand for services; expenses (including malpractice insurance
premiums); and competition among health care providers. In the future, the
following elements may adversely affect health care facility operations:
adoption of legislation proposing a national health insurance program;
other state or local health care reform measures; medical and technological
advances which dramatically alter the need for health services or the way
in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; and efforts by
employers, insurers, and governmental agencies to reduce the costs of
health insurance and health care services.
HOUSING. Housing revenue bonds are generally issued by a state, county,
city, local housing authority, or other public agency. They generally are
secured by the revenues derived from mortgages purchased with the proceeds
of the bond issue. It is extremely difficult to predict the supply of
available mortgages to be purchased with the proceeds of an issue or the
future cash flow from the underlying mortgages. Consequently, there are
risks that proceeds will exceed supply, resulting in early retirement of
bonds, or that homeowner repayments will create an irregular cash flow.
Many factors may affect the financing of multi-family housing projects,
including acceptable completion of construction, proper management,
occupancy and rent levels, economic conditions, and changes to current laws
and regulations.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student loans.
Bonds issued to supply educational institutions with funds are subject to
the risk of unanticipated revenue decline, primarily the result of
decreasing student enrollment or decreasing state and federal funding.
Among the factors that may lead to declining or insufficient revenues are
restrictions on students' ability to pay tuition, availability of state and
federal funding, and general economic conditions. Student loan revenue
bonds are generally offered by state (or substate) authorities or
commissions and are backed by pools of student loans. Underlying student
loans may be guaranteed by state guarantee agencies and may be subject to
reimbursement by the United States Department of Education through its
guaranteed student loan program. Others may be private, uninsured loans
made to parents or students which are supported by reserves or other forms
of credit enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student loan
revenue bonds are impacted by numerous factors, including the rate of
student loan defaults, seasoning of the loan portfolio, and student
repayment deferral during periods of forbearance. Other risks associated
with student loan revenue bonds include potential changes in federal
legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidies
currently in effect.
WATER AND SEWER. Water and sewer revenue bonds are often considered to have
relatively secure credit as a result of their issuer's importance, monopoly
status, and generally unimpeded ability to raise rates. Despite this, lack
of water supply due to insufficient rain, run-off, or snow pack is a
concern that has led to past defaults. Further, public resistance to rate
increases, costly environmental litigation, and federal environmental
mandates are challenges faced by issuers of water and sewer bonds.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways or other transit facilities.
Airport bonds are dependent on the general stability of the airline
industry and on the stability of a specific carrier who uses the airport as
a hub. Air traffic generally follows broader economic trends and is also
affected by the price and availability of fuel. Toll road bonds are also
affected by the cost and availability of fuel as well as toll levels, the
presence of competing roads, and the general economic health of the area.
Fuel costs and availability also affect other transportation-related
securities, as does the presence of alternate forms of transportation, such
as public transportation.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
3.QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the funds may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be 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 are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier
securities are those deemed to be in the second highest rating category
(e.g., Standard & Poor's A-2 or SP-2). Split-rated securities may be
determined to be either first or second tier based on applicable
regulations.
Each of Treasury, Government, Domestic, Money Market, Treasury Only, and
Rated Money Market may not invest more than 5% of its total assets in
second tier securities. In addition, each of Treasury, Government,
Domestic, Money Market, Treasury Only, and Rated Money Market fund 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.
Each fund 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. When determining the
maturity of a security, a fund may look to an interest rate reset or demand
feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original 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. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with 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, a fund 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, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, each fund anticipates holding restricted
securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
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, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund 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 fund's assets and may be
viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short. Short sales could be used to protect the net
asset value per share of the fund in anticipation of increased interest
rates, without sacrificing the current yield of the securities sold short.
If a fund 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 hold such securities while the short sale is
outstanding. The fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining, and closing short sales
against the box.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or another entity in determining whether to purchase a
security supported by a letter of credit guarantee, insurance or other
source of credit or liquidity. In evaluating the credit of a foreign bank
or other foreign entities, FMR will consider whether adequate public
information about the entity is available and whether the entity may be
subject to unfavorable political or economic developments, currency
controls, or other government restrictions that might affect its ability to
honor its commitment.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities), 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 government
agencies also may be stripped in this fashion.
Privately stripped government securities 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
government agencies also may be stripped in this fashion.
Because of the SEC's views on privately stripped government securities, a
fund must evaluate them as it would non-government securities pursuant to
regulatory guidelines applicable to all money market funds. A fund
currently 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, have been judged to be of equivalent quality by FMR pursuant to
procedures adopted by the Board of Trustees.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its daily dividend, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR has granted investment management authority to the
sub-adviser (see the section entitled "Management Contracts"), and the
sub-adviser is 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 a
fund 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 funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds 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; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy and
performance of accounts; effect securities transactions, and perform
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 funds 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 funds may be useful to FMR in rendering investment management
services to the funds 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 funds. 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
funds 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
funds 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 funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with FBSI and Fidelity Brokerage
Services (FBS), subsidiaries of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by nonaffiliated,
qualified brokerage firms for similar services. From September 1992 through
December 1994, FBS operated under the name Fidelity Brokerage Services
Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an
unlimited liability company and assumed the name FBS. Prior to September 4,
1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL)
as a wholly owned subsidiary of Fidelity International Limited (FIL).
Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family own,
directly or indirectly, more than 25% of the voting common stock of FIL.
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 fund transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For fiscal years ended March 31, 1995, 1994, and 1993 (August 31,
1995, 1994, and 1993 for Rated Money Market) , the funds paid no
brokerage commissions. During fiscal year ended March 31, 1995
(August 31, 1995 for Rated Money Market) , the funds paid no fees to
brokerage firms that provided research.
From time to time, the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund 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 fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
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 and accounts
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 fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Company (FSC) normally determines a fund's net asset value
per share (NAV) at 12:00 p.m. Eastern time for Tax-Exempt and
Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and
Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money
Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. The
valuation of portfolio securities is determined as of these times for the
purpose of computing each fund's NAV.
Portfolio securities and other assets are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its current market value. The amortized cost value of an instrument
may be higher or lower than the price a fund would receive if it sold the
instrument.
During periods of declining interest rates, a fund's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing each fund's instruments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. Each fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page .
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize each fund'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 a
fund'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.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Yield and total return fluctuate in
response to market conditions and other factors.
YIELD CALCULATIONS. To compute a class 's yield for a period, 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. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. An effective
yield may also be calculated by compounding the base period return over a
one-year period. In addition to the current yield, the funds may quote
yields in advertising based on any historical seven-day period. Yields for
each class of the funds are calculated on the same basis as other
money market funds, as required by applicable regulations.
Yield information may be useful in reviewing a class's performance and in
providing a basis for comparison with other investment alternatives.
However, each class's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
class's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates a class's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing a class's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
A class's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment before taxes to equal the class's tax-free
yield. Tax-equivalent yields are calculated by dividing a class's yield by
the result of one minus a stated federal or combined federal and state tax
rate. If only a portion of a class's yield is tax-exempt, only that portion
is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 19 95 . It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of hypothetical
tax-exempt obligations yielding from 2.00 % to 8.00 %. Of
course, no assurance can be given that a class will achieve any specific
tax-exempt yield. While Tax-Exempt invests principally in obligations whose
interest is exempt from federal income tax, other income received by the
fund may be taxable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
19 95 TAX RATES AND TAX-EQUIVALENT YIELDS
</TABLE>
<TABLE>
<CAPTION>
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Taxable Income* Federal If individual tax-exempt yield is:
Income
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Tax 2.00% 3.00% 4.00% 5.00% 6.0% 7.00% 8.00%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Return Joint Return Bracket** Then taxable equivalent yield is:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$23,351 - $36,001 - 28.0% 2.78% 4.17% 5.56% 6.94% 8.33% 9.72% 11.11%
$56,500 $94,250
$56,501 - $94,251 - 31.0% 2.90% 4.35% 5.80% 7.25% 8.70% 10.14% 11.59%
$117,950 $143,600
$117,951 - $143,601 - 36.0% 3.13% 4.69% 6.25% 7.81% 9.38% 10.94% 12.50%
$256,500 $256,500
$256,501 - $256,501 - 39.6% 3.31% 4.97% 6.62% 8.28% 9.93% 11.59% 13.25%
</TABLE>
* Net amount subject to federal income tax after deductions and exemptions.
Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions, limitations
on itemized deductions, and other credits, exclusions, and adjustments
which may increase a taxpayer's marginal tax rate. An increase in a
shareholder's marginal tax rate would increase that shareholder's
tax-equivalent yield.
Tax-Exempt may invest a portion of its assets in obligations that are
subject to state or federal income taxes. When the fund invests in these
obligations, its tax-equivalent yield will be lower. In the table above,
the tax-equivalent yields are calculated assuming investments are 100%
federally and state tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a class's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the class's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment 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 value had been constant over the period. For example, a
cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. Average
annual total returns covering periods of less than one year are calculated
by determining a class's total return for the period, extending that return
for a full year (assuming that return remains constant over the year), and
quoting the result as an annual return. While average annual total
returns are a convenient means of comparing investment alternatives,
investors should realize that performance is not constant over time, but
changes from year to year, and that average annual total returns represent
averaged figures as opposed to the actual year-to-year performance of a
class.
In addition to average annual total returns, a class may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, 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 (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL RESULTS. The following table shows 7-day yields,
tax-equivalent yields, and total returns for Class III of each fund for the
period ended March 31, 1995 (August 31, 1995 for Rated Money Market).
Initial offering of Class III shares took place on the following dates:
Treasury (10/22/93), Government (4/4/94), Domestic (7/19/94), Money Market
(11/17/93), Rated Money Market (11/1/95), Treasury Only (11/1/95), and
Tax-Exempt (11/1/95). Class III shares of Treasury, Domestic, and Money
Market had a 0.32% 12b-1 fee (Government had a 0.25% 12b-1 fee), which is
not reflected in figures prior to these dates. Prior date figures are those
of Class I, the original class of the funds, which does not have a 12b-1
fee. Class III figures would have been lower had 12b-1 fees been reflected
in all periods. Effective July 1, 1995, Class III shares of Treasury,
Government, Domestic, and Money Market have a 0.25% 12b-1 fee. Effective
November 1, 1995, Class III shares of Rated Money Market, Treasury Only,
and Tax-Exempt have a 0.25% 12b-1 fee.
Tax-Exempt's Class III tax-equivalent yield is based on a 36% federal
income tax rate.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
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Seven-Day Tax One Five Life of One Five Life of
Yield Equivalent Year Years Fund*/Ten Year Years Fund*/Ten
Yield Years Years
Rated Money
Market - 5.46 % N/A 5.53% 4.60% 6.11% 5.53% 25.20% 80.99%
Class III
Treasury -
Class III 5.66% N/A 4.45% 4.81% 5.97% 4.45% 26.45% 60.50%
Government -
Class III 5.76% N/A 4.60% 4.94% 6.29% 4.60% 27.28% 80.62%
Domestic -
Class III 5.74% N/A 4.71% 4.98% 5.26% 4.71% 27.49% 31.99%
Money Market -
Class III 5.76% N/A 4.66% 4.99% 6.39% 4.66% 27.59% 82.80%
Treasury Only -
Class III 5.80 % N/A 4.65 % N/A 4.45 % 4.65 % N/A 21.65 %
Tax-Exempt -
Class III 3.94 % 6.16 % 3.18 % 3.65 % 4.41 % 3.18 % 19.61 % 51.86 %
</TABLE>
* Life of Fund figures are from commencement of operations of each fund,
except Rated Money Market which reports a Ten Years figure. Commencement of
operations for each fund, other than Rated Money Market, are as follows:
Treasury - February 2, 1987; Government - July 25, 1985; Domestic -
November 3, 1989; Money Market - July 5, 1985; Treasury Only - October 3,
1990; and Tax-Exempt - July 25, 1985.
Note: If FMR had not reimbursed certain fund expenses during these periods,
the total returns would have been lower and the yields for Class III of
each fund would have been:
Fund Yield Tax-Equivalent
Yield
Rated Money Market - Class III N/A N/A
Treasury - Class III 5.29% N/A
Government - Class III 5.50% N/A
Domestic - Class III 5.37% N/A
Money Market - Class III 5.67% N/A
Treasury Only - Class III 5.58% N/A
Tax-Exempt - Class III 3.86% 6.03%
The following tables show the income and capital elements of each fund's
Class III cumulative total return. The tables compare each fund's Class III
return to the record of the Standard & Poor's Composite Index of 500 Stocks
(S&P 500), the Dow Jones Industrial Average (DJIA), and the cost of living
(measured by the Consumer Price Index, or CPI) over the same period. The
CPI information is as of the month end closest to the initial investment
date for each fund. The S&P 500 and DJIA comparisons are provided to show
how each class's total return compared to the record of a broad average of
common stocks and a narrower set of stocks of major industrial companies,
respectively, over the same period. Of course, since each fund invests in
short-term fixed-income securities, common stocks represent a different
type of investment from the fund. Common stocks generally offer greater
growth potential than the funds, but generally experience greater price
volatility, which means greater potential for loss. In addition, common
stocks generally provide lower income than fixed-income investments, such
as the funds. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the funds' returns, do not include
the effect of paying brokerage commissions or other costs of investing.
CLASS III CHARTS. The following table shows 7-day yields, tax-equivalent
yields, and total returns for Class III of each fund for the period ended
March 31, 1995 (August 31, 1995 for Rated Money Market). Initial offering
of Class III shares took place on the following dates: Treasury (10/22/93),
Government (4/4/94), Domestic (7/19/94), Money Market (11/17/93), Rated
Money Market (11/1/95), Treasury Only (11/1/95), and Tax-Exempt (11/1/95).
Class III shares of Treasury, Domestic, and Money Market had a 0.32% 12b-1
fee (Government had a 0.25% 12b-1 fee), which is not reflected in figures
prior to these dates. Prior date figures are those of Class I, the original
class of the funds, which does not have a 12b-1 fee. Class III figures
would have been lower had 12b-1 fees been reflected in all periods.
Effective July 1, 1995, Class III shares of Treasury, Government, Domestic,
and Money Market have a 0.25% 12b-1 fee. Effective November 1, 1995, Class
III shares of Rated Money Market, Treasury Only, and Tax-Exempt have a
0.25% 12b-1 fee.
RATED MONEY MARKET
HISTORICAL FUND RESULTS
During the ten year period ended August 31, 1995, a hypothetical
$10,000 investment in Class III of Rated Money Market would have grown to
$ 18,099 , assuming all distributions were reinvested. This was a
period of fluctuating interest rates and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in Class III of the fund today.
<TABLE>
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INDICES
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
8/31/86 10,000 742 0 10,742 13,914 14,773 10,157
8/31/87 10,000 1,408 0 11,408 18,718 21,377 10,593
8/31/88 10,000 2,217 0 12,217 15,389 16,894 11,019
8/31/89 10,000 3,335 0 13,335 21,428 23,615 11,537
8/31/90 10,000 4,456 0 14,456 20,358 23,431 12,185
8/31/91 10,000 5,450 0 15,450 25,836 28,277 12,648
8/31/92* 10,000 6,123 0 16,123 27,885 31,172 13,046
8/31/93 10,000 6,596 0 16,596 32,132 35,985 13,407
8/31/94 10,000 7,151 0 17,151 33,890 39,634 13,796
8/31/95 10,000 8,099 0 18,099 41,158 47,913 14,157
</TABLE>
* The fiscal year end of the fund changed from October 31 to August 31 in
July 1992 .
Explanatory Notes: With an initial investment of $10,000 made on August
31, 1985 , the net amount invested in Class III shares of the fund was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (their cash
value at the time they were reinvested), amounted to $ 18,099 . If
distributions had not been reinvested, the amount of distributions earned
from Class III shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amounted to
$ 5,949 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
TREASURY
HISTORICAL FUND RESULTS
During the period from February 2, 1987 (commencement of operations) to
March 31, 1995, a hypothetical $10,000 investment in Class III of Treasury
would have grown to $ 16,050 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class III
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinveste d Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1987* $ 10,000 $ 93 $ 0 $ 10,093 $ 10,694 $ 10,731 $ 10,081
1988 10,000 759 0 10,759 9,804 9,560 10,477
1989 10,000 1,632 0 11,632 11,583 11,432 10,998
1990 10,000 2,693 0 12,693 13,816 14,014 11,574
1991 10,000 3,692 0 13,692 15,805 15,668 12,140
1992 10,000 4,433 0 14,433 17,552 17,950 12,527
1993 10,000 4,932 0 14,932 20,229 19,633 12,914
1994 10,000 5,367 0 15,367 20,528 21,366 13,237
1995 10,000 6,050 0 16,050 23,722 25,101 13,615
</TABLE>
* From February 2, 1987 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on February
2, 1987, the net amount invested in Class III shares of the fund was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (their cash
value at the time they were reinvested), amounted to $ 16,050 . If
distributions had not been reinvested, the amount of distributions earned
from Class III shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amounted to
$ 4,744 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
GOVERNMENT
HISTORICAL FUND RESULTS
During the period from July 25, 1985 (commencement of operations) through
March 31, 1995, a hypothetical investment of $10,000 in Class III of
Government would have grown to $ 18,062 , assuming all distributions
were reinvested. This was a period of fluctuating interest rates and the
figures below should not be considered representative of the dividend
income or capital gain or loss that could be realized from an investment in
Class III of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,000 $ 547 $ 0 $ 10,547 $ 12,812 $ 13,855 $ 10,093
1987 10,000 1,233 0 11,233 16,170 18,170 10,399
1988 10,000 2,017 0 12,017 14,824 16,188 10,807
1989 10,000 3,001 0 13,001 17,514 19,358 11,345
1990 10,000 4,191 0 14,191 20,890 23,729 11,939
1991 10,000 5,318 0 15,318 23,897 26,530 12,523
1992 10,000 6,167 0 16,167 26,450 30,395 12,922
1993 10,000 6,743 0 16,743 30,588 33,245 13,321
1994 10,000 7,267 0 17,267 31,039 36,179 13,655
1995 10,000 8,062 0 18,062 35,869 42,502 14,045
</TABLE>
* From July 25, 1985 (commencement of operations).
** From month end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on July 25,
1985, the net amount invested in Class III shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 18,062 . If
distributions had not been reinvested, the amount of distributions earned
from Class III shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amounted to
$ 5,929 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
DOMESTIC
HISTORICAL FUND RESULTS
During the period from November 3, 1989 (commencement of operations) to
March 31, 1995, a hypothetical $10,000 investment in Class III of Domestic
would have grown to $ 13,199 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class III
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1990* $ 10,000 $ 352 $ 0 $ 10,352 $ 10,189 $ 10,451 $ 10,247
1991 10,000 1,192 0 11,192 11,655 11,685 10,748
1992 10,000 1,808 0 11,808 12,944 13,387 11,091
1993 10,000 2,222 0 12,222 14,919 14,642 11,433
1994 10,000 2,605 0 12,605 15,139 15,935 11,720
1995 10,000 3,199 0 13,199 17,494 18,720 12,054
</TABLE>
* From November 3, 1989 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on November
3, 1989, the net amount invested in Class III shares of the fund was
$10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends for the period covered (their cash
value at the time they were reinvested), amounted to $ 13,199 . If
distributions had not been reinvested, the amount of distributions earned
from Class III shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amoun t ed to
$ 2,782 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
MONEY MARKET
HISTORICAL FUND RESULTS
During the period from July 5, 1985 (commencement of operations) to March
31, 1995, a hypothetical $10,000 investment in Class III of Money Market
would have grown to $ 18,280 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class III
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period
Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,000 $ 601 $ 0 $ 10,601 $ 12,848 $ 14,126 $ 10,112
1987 10,000 1,297 0 11,297 16,217 18,525 10,418
1988 10,000 2,103 0 12,103 14,867 16,504 10,827
1989 10,000 3,113 0 13,113 17,564 19,736 11,366
1990 10,000 4,327 0 14,327 20,950 24,192 11,961
1991 10,000 5,492 0 15,492 23,965 27,048 12,546
1992 10,000 6,358 0 16,358 26,615 30,988 12,946
1993 10,000 6,945 0 16,945 30,675 33,894 13,346
1994 10,000 7,466 0 17,466 31,128 36,885 13,680
1995 10,000 8,280 0 18,280 35,971 43,332 14,071
</TABLE>
* From July 5, 1985 (commencement of operations).
Explanatory Notes: With an initial investment of $10,000 made on July 5,
1985, the net amount invested in Class III shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 18,280 . If
distributions had not been reinvested, the amount of distributions earned
from Class III shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amounted to
$ 6,049 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
TREASURY ONLY
HISTORICAL FUND RESULTS
During the period from October 3, 1990 (commencement of operations) to
March 31, 1995, a hypothetical $10,000 investment in Class III of Treasury
Only would have grown to $ 12,165 , assuming all distributions were
reinvested. This was a period of fluctuating interest rates and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized from an investment in Class III
of the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1991* $ 10,000 $ 353 $ 0 $ 10,353 $ 12,114 $ 11,848 $ 10,173
1992 10,000 913 0 10,913 13,454 13,573 10,497
1993 10,000 1,285 0 11,285 15,506 14,846 10,821
1994 10,000 1,624 0 11,624 15,735 16,157 11,093
1995+ 10,000 2,165 0 12,165 18,183 18,980 11,409
</TABLE>
* From October 3, 1990 (commencement of operations).
+ The fiscal year end of the fund changed from July 31 to March 31 in
February 1995.
Explanatory Notes: With an initial investment of $10,000 made on October 3,
1990, the net amount invested in Class III shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested) amounted to $ 12,165 . If distributions had
not been reinvested, the amount of distributions earned from Class III
shares of the fund over time would have been smaller, and cash payments
(dividends) for the period would have amounted to $ 1,963 . The fund did
not distribute any capital gains during the period. Tax consequences of
different investments have not been factored into the above figures.
TAX-EXEMPT
HISTORICAL FUND RESULTS
During the period from July 25, 1985 (commencement of operations) to March
31, 1995, a hypothetical $10,000 investment in Class III of Tax-Exempt
would have grown to $ 15,186 , assuming all distributions were reinvested.
This was a period of fluctuating interest rates and the figures below
should not be considered representative of the dividend income or capital
gain or loss that could be realized from an investment in Class III of the
fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
3/31 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,000 $ 368 $ 0 $ 10,368 $ 12,812 $ 13,855 $ 10,093
1987 10,000 814 0 10,814 16,170 18,170 10,399
1988 10,000 1,323 0 11,323 14,824 16,188 10,807
1989 10,000 1,958 0 11,958 17,514 19,358 11,345
1990 10,000 2,697 0 12,697 20,890 23,729 11,939
1991 10,000 3,411 0 13,411 23,897 26,530 12,523
1992 10,000 3,973 0 13,973 26,540 30,395 12,922
1993 10,000 4,369 0 14,369 30,588 33,245 13,321
1994 10,000 4,718 0 14,718 31,039 36,179 13,655
1995+ 10,000 5,186 0 15,186 35,869 42,502 14,045
</TABLE>
* From July 25, 1985 (commencement of operations)
** From month end closest to initial investment date.
+ The fiscal year end of the fund changed from May 31 to March 31 in
February 1995.
Explanatory Notes: With an initial investment of $10,000 made on July 25,
1985, the net amount invested in Class III shares of the fund was $10,000.
The cost of the initial investment ($10,000) together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 15,186 . If
distributions had not been reinvested, the amount of distributions earned
from Class III shares of the fund over time would have been smaller, and
cash payments (dividends) for the period would have amounted to
$ 4,186 . The fund did not distribute any capital gains during the
period. Tax consequences of different investments have not been factored
into the above figures.
PERFORMANCE COMPARISONS. A fund'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 that 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 funds based on
yield. In addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance indices
prepared by Lipper or other organizations. When comparing these indices, it
is important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. 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.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
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.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND
AVERAGES(trademark)/Government, which is reported in the MONEY FUND
REPORT(trademark), covers over 229 money market funds; IBC/Donoghue's MONEY
FUND AVERAGES(trademark)/All Taxable, which is reported in the MONEY FUND
REPORT(trademark), covers over 749 money market funds; IBC/Donoghue's MONEY
FUND AVERAGES(trademark)/All Tax-Free, which is reported in the MONEY FUND
REPORT(trademark), covers over 387 money market funds.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; model portfolios or
allocations; saving for college or other goals; charitable giving; and the
Fidelity credit card. In addition, Fidelity may quote or reprint financial
or business publications and periodicals as they relate to current economic
and political conditions, fund management, portfolio composition,
investment philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity may
also reprint, and use as advertising and sales literature, articles from
Fidelity Focus, a quarterly magazine provided free of charge to Fidelity
fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
As of August 31 , 1995, FMR advised over $ 26.5 billion in
tax-free fund assets, $ 79 billion in money market fund assets,
$ 218 billion in equity fund assets, $ 56 billion in
international fund assets, and $ 23 billion in Spartan fund assets.
The funds may reference the growth and variety of money market mutual funds
and the adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity fund
assets under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
In addition to performance rankings, each class of a fund may
compare its total expense ratio to the average total expense ratio of
similar funds tracked by Lipper. A class 's total expense ratio is a
significant factor in comparing bond and money market investments because
of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE 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 class'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 fund 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) a fund suspends the
redemption of the shares to be exchanged as permitted under the 1940 Act or
the rules and regulations thereunder, or a 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.
In the prospectus, each fund 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, a fund would be unable to invest
effectively in accordance with its investment objective and policies, or
would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Because each fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends received deduction. A portion of each fund's
dividends derived from certain U.S. government obligations may be exempt
from state and local taxation.
To the extent that each fund's income is designated as federally tax-exempt
interest, the daily dividends declared by the fund are also federally
tax-exempt. Short-term capital gains are distributed as dividend income,
but do not qualify for the dividends-received deduction. These gains will
be taxed as ordinary income.
Each fund will send each shareholder a notice in January describing the tax
status of dividend and capital gain distributions (if any) for the prior
year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as social security
benefits, may be subject to federal income tax on up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
Tax-Exempt purchases municipal securities that are free from federal income
tax based on opinions of counsel regarding their tax status. These opinions
generally will be based on covenants by the issuers or other parties
regarding continuing compliance with federal tax requirements. If at any
time the covenants are not complied with, distribution to shareholders of
interest on a security could become federally taxable retroactive to the
date a security was issued. For certain types of structured securities,
opinions of counsel may also be based on the effect of the structure on the
federal tax treatment of the income.
As a result of the Tax Reform Act of 1986, interest on certain "private
activity" securities is subject to the federal alternative minimum tax
(AMT), although the interest continues to be excludable from gross income
for other tax purposes. Interest from private activity securities will be
considered tax-exempt for purposes of Tax-Exempt's policy on investing so
that at least 80% of its income is free from federal income tax. Interest
from private activity securities is a tax preference item for the purposes
of determining whether a taxpayer is subject to the AMT and the the amount
of AMT to be paid, if any. Private activity securities issued after August
7, 1986 to benefit a private or industrial user or to finance a private
facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after April
30, 1993 and short-term capital gains distributed by the fund are taxable
to shareholders as dividends, not as capital gains. Dividend distributions
resulting from a recharacterization of gain from the sale of bonds
purchased with market discount after April 30, 1993 are not considered
income for the purposes of Tax-Exempt's policy of investing so that at
least 80% of its income is free from federal income tax. Tax-Exempt may
distribute any net realized short-term capital gains and taxable market
discounts once a year or more often, as necessary, to maintain its net
asset value at $1.00 per share.
It is the current position of the staff of the SEC that a fund that uses
the term "tax-exempt" in its name may not derive more than 20% of its
income from municipal obligations that pay interest that is a preference
item for purposes of the AMT. According to this position, at least 80% of
Tax-Exempt's income would have to be exempt from the AMT as well as from
federal income taxes.
Corporate investors should note that a tax preference item for the purposes
of the corporate AMT is 75% of the amount by which adjusted current
earnings (which includes tax-exempt interest) exceeds the alternative
minimum taxable income of the corporation. If a shareholder receives an
exempt-interest dividend and sells shares at a loss after holding them for
a period of six months or less, the loss will be disallowed to the extent
of the amount of the exempt-interest dividend.
CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its net asset value at $1.00 per share. Treasury, Government,
Domestic, Money Market, Treasury Only, and Rated Money Market do not
anticipate earning long-term capital gains on securities held by
each fund. Tax-Exempt does not anticipate distributing long-term
capital gains.
As of fiscal year ended March 31, 1995, Treasury had capital loss
carryforwards aggregating approximately $1,198,000. The loss carryforward
for Treasury, of which $82,000, $109,000, $142,000, $1,000, $330,000, and
$534,000 will expire on March 31, 1996, 1997, 1999, 2001, 2002 and 2003,
respectively, is available to offset future capital gains.
As of fiscal year ended March 31, 1995, Government had capital loss
carryforwards aggregating approximately $1,104,600. The loss carryforward
for Government, of which $19,400, $200, $53,000, $271,000, and $761,000
will expire on March 31, 1996, 1997, 2001, 2002, and 2003, respectively, is
available to offset future capital gains.
As of fiscal year ended March 31, 1995, Domestic had capital loss
carryforwards aggregating approximately $98,000. The loss carry forward for
Domestic, of which $49,000 and $49,000 will expire on March 31, 2001 and
2003, respectively, is available to offset future capital gains.
As of fiscal year ended March 31, 1995, Money Market had capital loss
carryforwards aggregating approximately $1,781,000. The loss carryforward
for Money Market, of which $336,000, $898,000 and $547,000 will expire on
March 31, 2001, 2002, and 2003, respectively, is available to offset future
capital gains.
As of fiscal year ended March 31, 1995, Treasury Only had capital loss
carryforwards aggregating approximately $184,000. The loss carryforward for
Treasury Only, of which $22,000 and $162,000 will expire on March 31, 2001
and 2002, respectively, is available to offset future capital gains.
As of fiscal year ended March 31, 1995, Tax-Exempt, had capital loss
carryforwards aggregating approximately $528,000. The loss carryforward for
Tax-Exempt, which will expire on March 31, 1996, is available to offset
future capital gains.
As of fiscal year ended August 31, 1995, Rated Money Market had capital
loss carryforwards aggregating approximately $74,000. The loss carryforward
for Rated Money Market, of which $40,000, $32,000, and $2,000 will expire
on August 31, 1996, 1997, and 1998, respectively, is available to offset
future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state law provides 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 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, may not qualify for this
benefit. The tax treatment of your dividend distributions from a fund will
be the same as if you directly owned your proportionate share of the U.S.
Government securities in the fund's portfolio. Because the income earned on
most U.S. Government securities in which a fund invests is exempt from
state and local income taxes, the portion of your dividends from the fund
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.
In a number of states, corporate franchise (income) tax laws do not exempt
interest earned on U.S. Government securities whether such securities are
held directly or through a fund.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
Each fund is treated as a separate entity from the other funds of each
Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent company organized
in 1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to 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: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trusts 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. Trustees and officers elected or
appointed to the trusts prior to the funds' conversion from series of
a Massachusetts business trust served in identical capacities. All
persons named as Trustees also serve in similar capacities for other funds
advised by FMR. The business address of each Trustee and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The business
address of all the other Trustees is Fidelity Investments, P.O. Box 9235,
Boston, Massachusetts 02205-9235. Those Trustees who are "interested
persons" by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (64), 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., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (53), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (62), 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 (63), 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 is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (71), 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 Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc., and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is
a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Trustee of First Union Real Estate
Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Vice Chairman of the Board of Directors of the
National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR 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 (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) 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 (65), Trustee, 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), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (70), 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 (61), 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 the 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 (66), 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., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNING, JR. (55), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
LELAND BARRON (36), Vice President (1989), is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
BURNELL STEHMAN (63), Vice President (1992), is also Vice President of
other funds advised by FMR and an employee of FMR Texas, Inc.
JOHN TODD (46), Vice President (1992), is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
SCOTT A. ORR (33), Vice President (1992), is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (47), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995)
THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an
employee of FMR.
JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (48), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and
Vice President, Assistant Controller, and Director of the Accounting
Department - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current trustee of each fund for his or her services as trustee for
the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money
Market) .
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas
Burkhead** Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R.
Davis Jones Malone Williams
Rated Money
$ 0 $ 151 $ 145 $ 189 $ 0 $ 151 $ 153 $ 0 $ 151 $ 151 $ 151 $ 150
Market
Treasury
0 2,082 1,985 2,568 0 2,059 2,111 0 2,112 2,134 2,032 2,084
Government
0 1,672 1,600 2,059 0 1,654 1,706 0 1,708 1,723 1,632 1,683
Money Market
0 2,371 2,246 2,942 0 2,345 2,395 0 2,395 2,416 2,312 2,360
Domestic
0 464 440 575 0 459 468 0 463 472 452 460
Tax-Exempt+
0 1,128 1,066 1,393 0 1,111 1,129 0 1,130 1,149 1,099 1,118
Treasury Only+
0 543 504 679 0 533 544 0 535 533 524 523
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from from the Fund
as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox 5,200 52,000 125,000
Phyllis Burke Davis 5,200 52,000 122,000
Richard J. Flynn 0 52,000 154,500
Edward C. Johnson 3d** 0 0 0
E. Bradley Jones 5,200 49,400 123,500
Donald J. Kirk 5,200 52,000 125,000
Peter S. Lynch** 0 0 0
Gerald C. McDonough 5,200 52,000 125,000
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 125,000
Thomas R. Williams 5,200 52,000 126,500
</TABLE>
* Information is as of December 31, 1994 for 206 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
+ The annualized amounts reported for Tax-Exempt and Treasury Only are
for the periods June 1, 1994 through March 31, 1995 and August 1, 1994
through March 31, 1995, respectively. Each fund's fiscal year end changed
to March 31 in February 1995.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
As of October 23, 1995, the Trustees and officers of each fund owned, in
the aggregate, less than 1% of each fund's total outstanding shares.
As of October 25, 1995, the following owned of record or beneficially 5% or
more of outstanding shares of each class of the funds:
TREASURY - CLASS I: First Union National Bank (13.32%); Bank of America
(11.69%); Texas Commerce Bank, N.A. (9.93%); and First Interstate Bank
(6.39%).
TREASURY - CLASS III: Bank Of New York (51.76%); First Union National Bank
(17.22%); and Chemical Bank (10.09%).
GOVERNMENT - CLASS I: First Tennessee Bank, Memphis (11.28%); Shawmut Bank
Of Boston, N.A. (7.47%); and Texas Commerce Bank, N.A. (7.35%).
GOVERNMENT - CLASS III: Whitney National Bank (22.53%); Boatmen's Trust Co.
of St. Louis (16.08%); First Interstate Bank (13.45%); Nationsbank
(12.58%); Indiana National Bank (11.37%); United National Bank (11.08%);
and First Union National Bank (8.10%).
DOMESTIC - CLASS I: First Union National Bank (15.68%); Texas Commerce
Bank, N.A. (11.21%); United States National Bank (10.48%); and Bank of
Boston Connecticut (5.21%).
DOMESTIC - CLASS III: Boatmen's Trust Co. of St. Louis (38.71%); First
Union National Bank (25.39%); Reliance Trust Company (21.96%); NationsBank
(11.47%); and Exchange Bank (9.90%).
MONEY MARKET - CLASS I: FMR Corp. (8.52%); Citibank, N.A. (8.35%); and
Shawmut Bank Of Boston, N.A. (5.58%).
MONEY MARKET - CLASS III: First Union National Bank (62.10%); Republic
National Bank of New York (12.38%); North American Trust Company (9.45%);
and Boatmen's Trust Co. of St. Louis (5.59%).
TREASURY ONLY - CLASS I: First Union National Bank (34.40%); First American
Trust Company (8.80%); Ropes & Gray (7.49%); Shawmut Bank Of Boston, N.A.
(7.49%); and Bingham, Dana & Gould (5.97%).
TAX-EXEMPT - CLASS I: Shawmut Bank Of Boston, N.A. (12.81%); Wachovia Bank
& Trust Company (9.21%); and Fleet National Bank (5.02%).
RATED MONEY MARKET - CLASS I: Promus Companies (15.21%); Bank of America
(7.94%); Metric Partners (7.66%); Eastern Utilities Associates (7.17%); and
United States Trust Company of NY (5.39%).
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund, all Trustees who are "interested
persons" of the trusts or of FMR, and all personnel of each fund or FMR for
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 each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
UMB, FIIOC, and FSC , each fund or class thereof, as
applicable, pays all of its expenses, without limitation, that are not
assumed by those parties. Each fund (other than Treasury Only and Rated
Money Market) pays for the typesetting, printing, and mailing of its proxy
materials to shareholders, legal expenses, and the fees of the custodian,
auditor and non-interested Trustees. Although each fund's (other than
Treasury Only's and Rated Money Market's) current management contract
provides that each fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices and reports to
shareholders, the trust, on behalf of each fund has entered into a revised
transfer agent agreement with FIIOC and UMB, as applicable, pursuant to
which FIIOC or UMB bears the costs of providing these services to existing
shareholders of the applicable classes. Other expenses paid by each fund
(other than Treasury Only and Rated Money Market) include interest, taxes,
brokerage commissions, and each fund's proportionate share of insurance
premiums and Investment Company Institute dues, and the costs of
registering shares under federal and state securities laws. Each fund is
also liable for such non-recurring expenses as may arise, including costs
of any litigation to which the fund may be a party, and any obligation it
may have to indemnify its officers and Trustees with respect to litigation.
FMR is responsible for the payment of all expenses of Treasury Only and
Rated Money Market with certain exceptions. Specific expenses payable by
FMR include, without limitation, expenses for the typesetting, printing,
and mailing of proxy materials to shareholders; legal expenses, and the
fees of the custodian, auditor, and interested Trustees; costs of
typesetting, printing, and mailing prospectuses and statements of
additional information, notices and reports to shareholders; and the fund's
proportionate share of insurance premiums and Investment Company Institute
dues. FMR also provides for transfer agent and dividend disbursing services
through FIIOC and portfolio and general accounting record maintenance
through FSC.
FMR pays all other expenses of Treasury Only and Rated Money Market with
the following exceptions: fees and expenses of all Trustees of the
applicable trust who are not "interested persons" of the trust or
FMR (the non-interested Trustees); interest on borrowings (only for
Treasury Only); taxes; brokerage commissions (if any); and such
nonrecurring expenses as may arise, including costs of any litigation to
which a fund may be a party, and any obligation it may have to indemnify
the officers and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated May 30,
1993 for the FICP funds; January 29, 1992 for Tax-Exempt; September 30,
1993 for Treasury Only ; and November 1, 1986 for Rated Money Market,
which were approved by shareholders on November 18, 1992, November 13,
1991, March 24, 1993, and December 8, 1994, respectively.
For the services of FMR under each contract, each fund (other than
Treasury Only and Rated Money Market) pays FMR a monthly management fee at
the annual rate of 0.20% of average net assets throughout the month.
Treasury Only and Rated Money Market each pay FMR a monthly management fee
at the annual rate of 0.42% of average net assets throughout the month. The
management fees paid to FMR by Treasury Only and Rated Money Market are
reduced by the fees and expenses paid by the respective funds to the
non-interested Trustees. Fees received by FMR for the last three fiscal
periods are shown in the table below.
Fund Fiscal Year Ended Management Fees Paid to FMR
Rated Money Market 8/31/95 $ 1,352,919*
8/31/94 1,781,535*
8/31/93 2,893,862*
Treasury 3/31/95 8,680,344
3/31/94 9,834,025
3/31/93 14,029,197
Government 3/31/95 6,680,088
3/31/94 9,660,519
3/31/93 12,610,880
Domestic 3/31/95 1,923,368
3/31/94 1,525,574
3/31/93 1,536,740
Money Market 3/31/95 10,436,518
3/31/94 10,551,990
3/31/93 10,066,276
Treasury Only 3/31/95** 3,279,429*
7/31/94 4,716,697*
7/31/93 4,892,175*
7/31/92 4,249,814*
Tax-Exempt 3/31/95** 3,789,731
5/31/94 5,099,831
5/31/93 5,036,875
5/31/92 4,605,577
* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.
** The fiscal year end of Treasury Only changed from July 31 to March 31 in
February 1995. The fiscal year end of Tax-Exempt changed from May 31 to
March 31 in February 1995.
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
During the fiscal periods reported, FMR voluntarily agreed subject to
revision or termination, to reimburse Class I II of certain funds if
and to the extent that the fund's Class I II total operating
expenses (excluding interest, taxes, brokerage commissions,
extraordinary expenses, and 12b-1 fees) were in excess of an annual
rate of its average net assets. The table below identifies the
classes in reimbursement; the level at which reimbursement began;
and the dollar amount reimbursed for each fiscal year ended March 31,
1995, 1994, and 1993 . Prior to August 31, 1995, Rated Money Market
was not in reimbursement.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Level at Which
Fund Reimbursement Began Dollar Amount Reimbursed
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992
Treasury - Class I 0.20% $ 3,129,549 $ 2,956,232 $ 3,246,298 N/A
Treasury - Class III 0.20% 409,770 570 N/A N/A
Government - Class I 0.20% 1,894,134 2,665,587 3,508,338 N/A
Government - Class III 0.20% 42,272 N/A N/A N/A
Domestic - Class I 0.20% 818,759 638,552 645,507 N/A
Domestic - Class III 0.20% 48,097 N/A N/A N/A
Money Market - Class I 0.18% 2,772,106 2,437,428 2,697,402 N/A
Money Market - Class III 0.18% 230,324 7,565 N/A N/A
Treasury Only - Class I* 0.20% 1,719,806 2,474,345 2,567,107 2,260,410
Tax-Exempt Class - I** 0.20% 1,429,650 1,643,561 1,591,107 1,590,017
</TABLE>
* Figures for Treasury Only are for the fiscal years ended July 31,
1992, 1993, and 1994, and the fiscal period August 1, 1994 to March 31,
1995. During the fiscal year ended July 31, 1992, the level at which
reimbursement began ranged from 0.15% to 0.20%.
** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992,
1993, and 1994, and the fiscal period June 1, 1994 to March 31, 1995.
During the fiscal year ended May 31, 1992, the level at which reimbursement
began was 0.18%.
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investment in foreign securities.
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 fund.
Under each sub-advisory agreements dated May 30, 1993, January 29, 1992,
September 30, 1973, and November 1, 1989 for the FICP funds, Tax-Exempt,
Treasury Only, and Rated Money Market, respectively, FMR pays FMR Texas
fees equal to 50% of the management fees payable by FMR under its
management contract with each fund. Each sub-advisory agreement was
approved by each fund's shareholders on November 18, 1994, November 13,
1991, March 24, 1993, and November 16, 1994 for the FICP funds, Tax-Exempt,
Treasury Only, and Rated Money Market, respectively. 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. The table below shows fees paid by
FMR to FMR Texas on behalf of each fund for the fiscal years ended March 31
(August 31 for Rated Money Market), 1995, 1994, and 1993.
1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Rated Money Market $ 676,460 $ 890,768 $ 1,446,931 N/A
Treasury 4,340,172 4,917,013 7,014,599 N/A
Government 3,340,044 4,830,260 6,305,440 N/A
Domestic 961,684 762,787 768,370 N/A
Money Market 5,218,259 5,275,995 5,033,138 N/A
Treasury Only* 1,639,715 2,358,349 2,446,088 $ 2,124,907
Tax-Exempt** 1,894,866 2,549,916 2,518,438 2,302,789
</TABLE>
* Figures for Treasury Only are for the fiscal years ended July 31,
1992, 1993 and 1994, and the fiscal period August 1, 1994 to March 31,
1995.
** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993
and 1994, and the fiscal period June 1, 1994 to March 31, 1995.
CONTRACTS WITH FMR AFFILIATES
FIIOC is transfer, dividend disbursing, and shareholder servicing agent for
Class III shares of Treasury, Government, Domestic, Money Market, Treasury
Only, and Rated Money Market (the Taxable Funds). UMB is the transfer agent
and shareholder servicing agent for Class III shares of Tax-Exempt. UMB has
entered into a sub-arrangement with FIIOC pursuant to which FIIOC performs
transfer, dividend disbursing, and shareholder services for Class III
shares of Tax-Exempt. FIIOC receives an annual fee and an asset-based fee
based on account size. The costs of FIIOC's services for Class III of
Treasury Only and Rated Money Market are bo r ne by FMR pursuant to
its management contrac t .
For accounts that FIIOC maintains on behalf of UMB, FIIOC receives all such
fees.
In addition, FIIOC bears the expense of typesetting, printing, and mailing
prospectuses, statements of additional information, and all other reports,
notices, and statements to shareholders, with the exception of proxy
statements. Also, FIIOC pays out-of-pocket expenses associated with
providing transfer agent services.
FSC calculates NAV and dividends for Class III of each Taxable Fund, and
maintains each Taxable Fund's accounting records . UMB has
sub-arrangements with FSC pursuant to which FSC performs the calculations
necessary to determine NAV and dividends for Class III of Tax-Exempt, and
maintains the accounting records for Tax-Exempt. The annual fee rates for
these pricing and bookkeeping services are based on each fund's average net
assets, specifically .0175% for the first $500 million of average net
assets and .0075% for average net assets in excess of $500 million. The fee
is limited to a minimum of $20,000 and a maximum of $750,000 per year. The
costs of FSC's services for Rated Money Market and Treasury Only are borne
by FMR pursuant to its management contract . Pricing and bookkeeping
fees, including related out-of-pocket expenses, paid to FSC by the funds
(except Rated Money Market and Treasury Only) for the past three fiscal
years ended March 31, 1995, 1994, and 1993 were as follows:
Pricing and Bookkeeping Fees
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1995 1994 1993 1992
Treasury $ 375,762 $ 419,147 $ 576,072 N/A
Government 331,070 412,411 523,696 N/A
Domestic 122,139 107,464 108,548 N/A
Money Market 441,370 445,362 429,428 N/A
Tax-Exempt* 309,306 304,324 325,195 $ 332,264
</TABLE>
* Figures for Tax-Exempt are for the fiscal years ended May 31, 1992,
1993, and 1994, and fiscal period June 1, 1994 to March 31, 1995,
annualized.
The transfer agent fees and charges for Class III of Tax-Exempt, and
pricing and bookkeeping fees for Tax-Exempt described above are paid to
FIIOC and FSC, respectively, by UMB, which is entitled to reimbursement
from Class III or the fund, as applicable, for these expenses.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC 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 FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved a Distribution and Service Plan on behalf of
Class III of each fund (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 a fund except pursuant to a
plan approved on behalf of the fund under the Rule. The Plans, as approved
by the Trustees, allow Class III of the funds and FMR to incur certain
expenses that might be considered to constitute direct or indirect payment
by the funds of distribution expenses.
Pursuant to the Plans, FDC is paid a distribution fee as a percentage of
each fund's Class III 's average net assets at an annual rate
of 0.25% for each of the funds.
For the fiscal years ended March 31, 1995 and 1994, Class III of each fund
paid the following distribution fees:
1995 1994
Treasury $ 418,917 $ 2,065
Government 46,340 N/A
Domestic 52,640 N/A
Money Market 812,749 40,685
of which the following was retained by FDC:
1995 1994
Treasury $ 0 $ 0
Government 0 N/A
Domestic 0 N/A
Money Market 0 0
No distribution fees were paid by Class III of Treasury Only, Tax-Exempt,
and Rated Money Market, which will commence operations on or
about November 1, 1995.
Under each Plan, if the payment of management fees by the funds to FMR is
deemed to be indirect financing by the funds of the distribution of their
shares, such payment is authorized by the Plans. Each Plan specifically
recognizes that FMR may use its management fee revenue, as well as its
past profits, or its other resources from any other source to
reimburse FDC for expenses incurred in connection with the distribution of
Class III shares, including payments made to third parties that
assist in selling Class III shares of each fund, or to third
parties, including banks, that render shareholder support services. The
Trustees have not authorized such payments to date.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the applicable class of each fund and its shareholders. To the extent that
each Plan gives FMR and FDC greater flexibility in connection with the
distribution of shares of the applicable class of each fund, additional
sales of fund shares may result. Furthermore, certain shareholder support
services may be provided more effectively under the Plans by local entities
with whom shareholders have other relationships.
None of the Plans provide for specific payments by Class III of any of the
expenses of FDC or obligates FDC or FMR to perform any specific type or
level of distribution activities or incur any specific level of expense in
connection with distribution activities. After payments by FDC for
advertising, marketing and distribution, and payments to third parties, the
amounts remaining, if any, may be used as FDC may elect.
The Class III Plan for Treasury was approved by FMR as the then sole
shareholder on October 22, 1993. The Class III Plan for Government was
approved by FMR as the then sole shareholder on April 4, 1994. The Class
III Plan for Domestic was approved by FMR as the then sole shareholder on
July 19, 1994. The Class III Plan for Money Market was approved by FMR as
the then sole shareholder on November 17, 1993. The Class III Plans for
Treasury Only, Tax-Exempt, and Rated Money Market were approved by FMR as
the then sole shareholder on October 31 , 1995.
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, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC 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 funds
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 other financial institutions may be required to
register as dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUSTS
TRUST ORGANIZATION. Treasury, Government, Domestic and Money Market are
funds of Fidelity Institutional Cash Portfolios, an open-end management
investment company organized as a Delaware business trust on May 30, 1993.
The funds acquired all of the assets of U.S. Treasury Portfolio II, U.S.
Government Portfolio, Domestic Money Market Portfolio, and Money Market
Portfolio, respectively, of Fidelity Institutional Cash Portfolios on May
30, 1993. Currently, there are four funds of Fidelity Institutional Cash
Portfolios: Treasury, Government, Domestic, and Money Market. The Trust
Instrument permits the Trustees to create additional funds.
Tax-Exempt is a fund of Fidelity Institutional Tax-Exempt Cash Portfolios,
an open-end management investment company organized as a Delaware business
trust on January 29, 1992. Tax-Exempt acquired all of the assets of
Fidelity Institutional Tax-Exempt Cash Portfolios of Fidelity
Institutional Tax-Exempt Cash Portfolios on January 29, 1992.
Currently, Tax-Exempt is the only fund of Fidelity Institutional
Tax-Exempt Cash Portfolios. The Trust Instrument permits the Trustees
to create additional funds.
Treasury Only is a fund of Daily Money Fund, an open-end management
investment company organized as a Delaware business trust on September 29,
1993. Treasury Only acquired all of the assets of Fidelity U.S. Treasury
Income Portfolio of Daily Money Fund on September 29, 1993. Currently,
there are six funds of Daily Money Fund: Treasury Only, Money Market
Portfolio, U.S. Treasury Portfolio, Capital Reserves: U.S. Government
Portfolio, Capital Reserves: Money Market Portfolio, and Capital Reserves:
Municipal Money Market Portfolio. The Trust Instrument permits the Trustees
to create additional funds.
Rated Money Market is a fund of Fidelity Money Market Trust, an open-end
management investment company organized as a Delaware business trust on
December 29, 1994. Rated Money Market acquired all of the assets of
Domestic Money Market Portfolio of Fidelity Money Market Trust on December
29, 199 4 . Currently, there are three funds of Fidelity Money Market
Trust: Rated Money Market, Retirement Money Market Portfolio, and
Retirement Government Money Market Portfolio. The Trust Instrument permits
the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to a fund, the
right of the trust or fund to use the identifying name "Fidelity" may be
withdrawn. There is a remote possibility that one fund might become liable
for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trusts received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trusts are to
be allocated in proportion to the asset value of the respective funds,
except where allocations of direct expense can otherwise be fairly made.
The officers of the trusts, subject to the general supervision of the Board
of Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of a trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each 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
Instruments contain an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the trusts and require
that a disclaimer be given in each contract entered into or executed by the
trust or the Trustees. The Trust Instruments provide for indemnification
out of each fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instruments
also provide that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
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 the fund is unable to
meet its obligations. FMR believes that, in view of the above, the
risk of personal liability to shareholders is extremely remote.
The Trust Instruments further provide that the Trustees, if they have
exercised reasonable care, shall not be personally 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. Claims
asserted against one class of shares may subject holders of another class
of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder of Rated Money Market, you receive one vote for
each dollar value 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 non-assessable, except as set forth under the
heading "Shareholder and Trustee Liability" above. Shareholders
representing 10% or more of a trust, fund or class may, as set forth in
each of the Trust Instruments, call meetings of the t rust, fund, or
class, for any purpose related to the t rust, fund, or class, as the
case may be, including, in the case of a meeting of the entire
t rust, the purpose of voting on removal of one or more Trustees.
Any trust or fund may be terminated upon the sale of its assets to, or
merger with, another open-end management investment company or series
thereof, or upon liquidation and distribution of its assets. Generally such
terminations must be approved by vote of the holders of a majority of the
outstanding shares of the trust or fund (or, for Rated Money Market, as
determined by the current value of each shareholder's investment in the
fund or trust); however, the Trustees may, without prior shareholder
approval, change the form o f organization of the trust or fund by
merger, consolidation, or incorporation. If not so terminated, the trust
and its funds will continue indefinitely.
Under the Trust Instruments, the Trustees may, without shareholder vote,
cause a 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 fund may invest all of its assets in another investment
company.
CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, NY 10260 is custodian of the assets of each fund, except
Treasury and Tax-Exempt. Bank of New York, 48 Wall Street, New York, New
York is custodian of the assets of Treasury. The custodian for Tax-Exempt
is UMB, 1010 Grand Avenue, Kansas City Missouri. The custodian is
responsible for the safekeeping of a fund's assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of a fund or in deciding which
securities are purchased or sold by a fund. However, a fund may invest in
obligations of the custodian and may purchase securities from or sell
securities to the custodian. Chemical Bank, headquartered in New York, may
also serve as a special purpose custodian of certain assets in connection
with pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the funds'
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain 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 fund relationships.
AUDITOR S . Coopers & Lybrand L.L.P., 1999 Bryan St reet, Suite
3000, Dallas, TX 75201 serves as the independent accountant for Tax-Exempt,
Treasury Only, and Rated Money Market. Price Waterhouse LLP, 2001 Ross
Avenue, Suite 1800, Dallas, TX 75201 serves as the independent accountant
for the FICP funds. The auditors examine financial statements for the funds
and provide other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended March 31, 1995 (August 31, 1995 for Rated Money Market)
are included in the funds ' Annual Report, which is a separate
report supplied with this SAI. Each fund's financial statements and
financial highlights are incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. The funds 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:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earning coverage of fixed financial charges and with high
internal cash generation.
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. Earning 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 alternative
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. I ssues 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.
PART C - OTHER INFORMATION
Item 24.
(a) (1) Financial Statements and Financial Highlights, included in the
Annual Report for Rated Money Market for the fiscal year ended August 31,
1995 are attached to the fund's prospectus, are incorporated by reference
into the fund's Statement of Additional Information, and were filed on
October 17, 1995 for Fidelity Money Market Trust (No. 811-2861) pursuant to
Rule 30d-1 under the Investment Company Act of 1940 and are incorporated
herein by reference.
(b) Exhibits:
1. Declaration of Trust, dated June 20, 1991, was electronically filed and
is incorporated herein by reference as Exhibit 1 to Post-Effective
Amendment No. 48.
(a) Certificate of Trust, dated June 20, 1991, was electronically filed
and is incorporated herein by refer ence as Exhibit 1(a) to
Post-Effective Amendment No. 48.
(b) Certificate of Amendment of Fidelity Money Market Trust II to
Fidelity Money Market Trust, dated December 29, 1994, was
electronically filed and is incorporated herein by reference as Exhibit
1(b) to Post-Effective Amendment No. 48.
2. By-laws of the Trust were electronically filed and are incorporated
herein by reference to Exhibit 2(a) to Union Street Trust II's
Post-Effective Amendment No. 10.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract dated December 29, 1994 between Fidelity Money
Market Trust: Domestic Money Market Portfolio and Fidelity Management
& Research Company was electronically filed and is incorporated herein
by reference as Exhibit 5(a) to Post-Effective Amendment No. 48.
(b) Management Contract dated December 29, 1994 between Fidelity Money
Market Trust: Retirement Money Market Portfolio and Fidelity Management &
Research Company was electronically filed and is incorporated herein by
reference as Exhibit 5(d) to Post-Effective Amendment No. 48.
(c) Management Contract dated December 29, 1994 between Fidelity Money
Market Trust: Retirement Government Money Market Portfolio and Fidelity
Management & Research Company was electronically filed and is incorporated
herein by reference as Exhibit 5(c) to Post-Effective Amendment No. 48.
(d) Sub-Advisory Agreement dated December 29, 1994 between Fidelity Money
Market Trust: Domestic Money Market Portfolio and FMR Texas was
electronically filed and is incorporated herein by reference as Exhibit
5(d) to Post-Effective Amendment No. 48.
(e) Sub-Advisory Agreement dated December 29, 1994 between Fidelity Money
Market Trust: Retirement Money Market Portfolio and FMR Texas was
electronically filed and is incorporated herein by reference as Exhibit
5(e) to Post-Effective Amendment No. 48.
(f) Sub-Advisory Agreement dated December 29, 1994 between Fidelity Money
Market Trust: Retirement Government Money Market Portfolio and FMR Texas
was electronically filed and is incorporated herein by reference as Exhibit
5(f) to Post-Effective Amendment No. 48.
6. (a) General Distribution Agreement between Fidelity Money Market Trust:
Domestic Money Market Portfolio and Fidelity Distributors Corporation
dated December 29, 1994 was electronically filed and is incorporated
herein by reference as Exhibit 6(a) to Post-Effective Amendment No. 48.
(b) General Distribution Agreement between Fidelity Money Market Trust:
Retirement Money Market Portfolio and Fidelity Distributors Corporation
dated December 29, 1994 was electronically filed and is incorporated herein
by reference as Exhibit 6(b) to Post-Effective Amendment No. 48.
(c) General Distribution Agreement between Fidelity Money Market Trust:
Retirement Government Money Market Portfolio and Fidelity Distributors
Corporation dated December 29, 1994 was electronically filed and is
incorporated herein by reference as Exhibit 6(c) to Post-Effective
Amendment No. 48.
7. Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, was electronically filed and
is incorporated herein by reference as Exhibit 7 to Union Street Trust's
Post-Effective Amendment No. 87.
8. (a) Custodian Agreement and Appendix C, dated December 1, 1994, between
Morgan Guaranty Trust Co. of New York and Fidelity Money Market Trust was
electronically filed and is incorporated herein by reference to Exhibit
8(c) of Fidelity Hereford Street Trust's Post-Effective Amendment No. 4
(File No. 33-52577).
(b) Appendix A, dated June 16, 1995, to the Custodian Agreement, dated
December 1, 1994, between Morgan Guaranty Trust Company of New York and
Fidelity Money Market Trust was electronically filed and is incorporated
herein by reference to Exhibit 8(b) of Fidelity Institutional Cash
Portfolios' Post-Effective Amendment No. 28 (File No. 2-74808).
(c) Appendix B, dated April 20, 1995, to the Custodian Agreement, dated
December 1, 1994, between Morgan Guaranty Trust Co. of New York and
Fidelity Money Market Trust was electronically filed and is incorporated
herein by reference to Exhibit 8(d) of Fidelity Hereford Street Trust's
Post-Effective Amendment No. 5 (File No. 33-52577).
9. Not applicable.
10. Not applicable.
11. Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit 11.
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) Fidelity Individual Retirement Account, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(a) to Union Street Trust's Post-Effective Amendment No. 87.
(b) Portfolio Advisory Services Individual Retirement Account, as currently
in effect, was electronically filed and is incorporated herein by reference
as Exhibit 14(i) to Union Street Trust's Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement Account,
as currently in effect, was electronically filed and is incorporated herein
by reference to Exhibit 14(h) to Union Street Trust's Post-Effective
Amendment No. 87.
(d) National Financial Services Defined Contribution Plan, as currently in
effect, was electronically filed and is incorporated herein by reference to
Exhibit 14(k) to Union Street's Trust Post-Effective Amendment No. 87.
(e) Fidelity Institutional Individual Retirement Account Custodian
Agreement and Disclosure Statement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(d) to Union Street Trust's Post-Effective Amendment No. 87.
(f) Fidelity Advisor Funds Individual Retirement Account Custodial
Agreement Disclosure Statement in effect as of January 1, 1994 was filed
electronically and is incorporated herein by reference to Exhibit 14(b) to
Advisor Series I Post-Effective Amendment No. 22.
(g) Plymouth Defined Contribution Plan, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(o) to Commonwealth Trust's Post-Effective Amendment No. 57.
(h) Fidelity 403(b)(7) Individual Custodial Agreement, as currently in
effect, was electronically filed and is incorporated herein by reference to
Exhibit 14(f) to Fidelity Commonwealth Trust's (File No. 2-52322)
Post-Effective Amendment No. 57.
(i) Fidelity 403(b) Group Custodial Agreement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(e) to Union Street Trust's Post-Effective Amendment No. 87.
(j) The CORPORATEplan for Retirement Profit Sharing/401k Plan, as currently
in effect, was electronically filed and is incorporated herein by reference
to Exhibit 14(l) to Union Street Trust's Post-Effective Amendment No. 87.
(k) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, was electronically filed and is incorporated herein by
reference to Exhibit 14(m) to Union Street Trust's Post-Effective Amendment
No. 87.
15. (a) Distribution and Service Plan of Fidelity Money Market Trust:
Domestic Money Market Portfolio was electronically filed and is
incorporated herein by reference to Exhibit 15(c) to Post-Effective
Amendment No. 48.
(b) Distribution and Service Plan of Fidelity Money Market Trust:
Retirement Money Market Portfolio was electronically filed and is
incorporated herein by reference to Exhibit 15(d) to Post-Effective
Amendment No. 48.
(c) Distribution and Service Plan of Fidelity Money Market Trust:
Retirement Government Money Market Portfolio was electronically filed and
is incorporated herein by reference to Exhibit 15(e) to Post-Effective
Amendment No. 48.
(d) Distribution and Service Plan of Fidelity Money Market Trust: Rated
Money Market - Class II was electronically filed and is incorporated herein
by reference to Exhibit 15(f) to Post-Effective Amendment No. 49.
(e) Distribution and Service Plan of Fidelity Money Market Trust: Rated
Money Market - Class III was electronically filed and is incorporated
herein by reference to Exhibit 15(g) to Post-Effective Amendment No. 49.
16. (a) Schedule and data points for 7-day yield for Retirement Government
Money Market Portfolio were electronically filed and are incorporated
herein by reference to Exhibit 16(a) to Post-Effective Amendment No. 50.
(b) Schedule and data points for total return for Retirement Government
Money Market Portfolio were electronically filed herein and are
incorporated herein by reference to Exhibit 16(b) to Post-Effective
Amendment No. 50.
17. Financial Data Schedules for Retirement Money Market Portfolio and
Retirement Government Money Market Portfolio are electronically filed
herein as Exhibit 17.
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
September 30, 1995
Name of Series Number of Record Holders
Domestic Money Market Portfolio
1,369
Rated Money Market - Class II 0
Rated Money Market - Class III 0 Retirement Money Market Portfolio
10,941
Retirement Government Money Market Portfolio 7,698
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 or her in connection with any claim, action, suit or
proceeding in which he or she is involved by virtue of his or her 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.
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.
<TABLE>
<CAPTION>
<S> <C>
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 and Director of FMR.
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).
William Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
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.
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; Equity Division Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
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.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; Director of Technical Research.
Stephen P. Jonas Treasurer and Vice President of FMR (1993)); Treasurer of
FMR Texas Inc. (1993), Fidelity Management & Research
(U.K.) Inc. (1993), and Fidelity Management & Research
(Far East) Inc. (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); High Income
Division 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.
Malcolm W. MacNaught II Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR; 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.
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 advised by
FMR.
Thomas T. Soviero Vice President of FMR (1993).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Gary L. Swayze Vice President of FMR and of funds advised by FMR;
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; Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
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.; Secretary of
funds advised by FMR.
</TABLE>
(2) 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.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Texas; 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., 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; Fixed-Income
Division Leader (1995).
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 and Assistant Vice
President of funds advised by FMR.
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; Money Market Division
Leader (1995).
Stephen P. 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.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
ARK Funds
(b)
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
</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 Service
Co., 82 Devonshire Street, Boston, MA 02109, or the funds' custodian Morgan
Guaranty Trust Company of New York, 61 Wall Street, 37th Floor, New York,
N.Y.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
The Registrant, on behalf of Retirement Money Market Portfolio and
Retirement Government Money Market Portfolio, undertakes to deliver to each
person who has received the prospectus or annual or semiannual financial
report for a fund in an electronic format, upon his or her request and
without charge, a paper copy of the prospectus or annual or semiannual
report for the fund.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 52 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 30th day
of October 1995.
FIDELITY MONEY MARKET TRUST
By /s/Edward C. Johnson 3d (dagger)
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)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee
Edward C. Johnson 3d (Principal Executive Officer) October 30, 1995
/s/Kenneth A. Rathgeber Treasurer October 30, 1995
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee October 30, 1995
J. Gary Burkhead
/s/Ralph F. Cox * Trustee October 30, 1995
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee October 30, 1995
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee October 30, 1995
Richard J. Flynn
/s/E. Bradley Jones * Trustee October 30, 1995
E. Bradley Jones
/s/Donald J. Kirk * Trustee October 30, 1995
Donald J. Kirk
/s/Peter S. Lynch * Trustee October 30, 1995
Peter S. Lynch
/s/Edward H. Malone * Trustee October 30, 1995
Edward H. Malone
/s/Marvin L. Mann_____* Trustee October 30, 1995
Marvin L. Mann
/s/Gerald C. McDonough* Trustee October 30, 1995
Gerald C. McDonough
/s/Thomas R. Williams * Trustee October 30, 1995
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated December 15, 1994 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
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 Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
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 December 15, 1994
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
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 Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
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 A. Djinis, 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 fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/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
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information constituting part of Post-Effective
Amendment No. 52 to the Registration Statement on Form N-1A of Fidelity
Money Market Trust: Rated Money Market (formerly Fidelity Money Market
Trust: Domestic Money Market Portfolio), of our report dated September 25,
1995 on the financial statements and financial highlights included in the
August 31, 1995 Annual Report to Shareholders of Fidelity Money Market
Trust: Rated Money Market (formerly Fidelity Money Market Trust: Domestic
Money Market Portfolio).
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditors" in the Statement of
Additional Information.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 30, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000276516
<NAME> Fidelity Money Market Trust
<SERIES>
<NUMBER> 51
<NAME> Retirement Government Money Market Portfolio
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> aug-31-1995
<PERIOD-END> Aug-31-1995
<INVESTMENTS-AT-COST> 2,262,384
<INVESTMENTS-AT-VALUE> 2,262,384
<RECEIVABLES> 8,581
<ASSETS-OTHER> 226
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,271,191
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 815
<TOTAL-LIABILITIES> 815
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,270,613
<SHARES-COMMON-STOCK> 2,270,613
<SHARES-COMMON-PRIOR> 1,655,536
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (237)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,270,376
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 115,975
<OTHER-INCOME> 0
<EXPENSES-NET> 8,405
<NET-INVESTMENT-INCOME> 107,570
<REALIZED-GAINS-CURRENT> (105)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 107,465
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 107,570
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,748,370
<NUMBER-OF-SHARES-REDEEMED> 1,240,662
<SHARES-REINVESTED> 107,369
<NET-CHANGE-IN-ASSETS> 614,972
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (132)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8,396
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,405
<AVERAGE-NET-ASSETS> 2,001,276
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .053
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .053
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000276516
<NAME> Fidelity Money Market Trust
<SERIES>
<NUMBER> 41
<NAME> Retirement Money Market Portfolio
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> aug-31-1995
<PERIOD-END> Aug-31-1995
<INVESTMENTS-AT-COST> 4,448,129
<INVESTMENTS-AT-VALUE> 4,448,129
<RECEIVABLES> 25,023
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,473,152
<PAYABLE-FOR-SECURITIES> 120,826
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,485
<TOTAL-LIABILITIES> 123,311
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,350,048
<SHARES-COMMON-STOCK> 4,350,048
<SHARES-COMMON-PRIOR> 2,800,247
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (207)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 4,349,841
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 215,022
<OTHER-INCOME> 0
<EXPENSES-NET> 15,272
<NET-INVESTMENT-INCOME> 199,750
<REALIZED-GAINS-CURRENT> 115
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 199,865
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 199,750
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,357,740
<NUMBER-OF-SHARES-REDEEMED> 3,007,123
<SHARES-REINVESTED> 199,184
<NET-CHANGE-IN-ASSETS> 1,549,916
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (322)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 15,255
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,272
<AVERAGE-NET-ASSETS> 3,636,223
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .054
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .054
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
