SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO. 2-62529)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 44 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 (No. 811-2869) [X]
Amendment No. ______ [ ]
Fidelity Government Securities Fund
__________________________________________
(Exact Name of Registrant as Specified in Charter)
82 Devonshire Street, Boston, MA
02109_______________________________________
(Address Of Principal Executive Offices)
Registrant's Telephone Number (617)
563-7000_________________________________
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, MA 02109__________________________________________________________
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) Immediately upon filing pursuant to paragraph (b)
(X) On November 20, 1995 pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)
( ) On ( ) pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule before November 30, 1995.
FIDELITY SHORT-INTERMEDIATE GOVERNMENT FUND
FIDELITY GOVERNMENT SECURITIES FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Funds at a Glance; Who May Want to
c............................... Invest
3a.................................. Financial Highlights
..
*
b...................................
c, d............................. Performance
4a i.............................. Charter
The Funds at a Glance; Investment Principles and
ii............................... Risks
Investment Principles and Risks
b...................................
Who May Want to Invest; Investment Principles and
c................................... Risks
5a.................................. Charter
..
b Cover Page; The Funds at a Glance; Charter; Doing
i.............................. Business with Fidelity
Charter
ii..............................
Expenses; Breakdown of Expenses
iii.............................
c................................ Charter
d................................ Charter; Breakdown of Expenses,
Cover Page; Charter
e....................................
Expenses
f....................................
g i.............................. Charter
*
ii...............................
5A................................. Performance
.
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
Charter
iii................................
*
b..................................
Transaction Details; Exchange Restrictions
c..................................
*
d..................................
Doing Business with Fidelity; How to Buy Shares;
e.................................. How to Sell Shares; Investor Services
f, Dividends, Capital Gains, and Taxes
g..............................
7 Cover Page; Charter
a..................................
Expenses; How to Buy Shares; Transaction Details
b.................................
*
c..................................
How to Buy Shares
d..................................
*
e..................................
f................................ Breakdown of Expenses
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY SHORT-INTERMEDIATE GOVERNMENT FUND
FIDELITY GOVERNMENT SECURITIES FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C>
10, Cover Page
11.............................
12.................................. Description of the Trusts
..
13a - Investment Policies and Limitations
c............................
Portfolio Transactions
d..................................
14a - Trustees and Officers
c............................
15a , *
b.............................
Trustees and Officers
c................................
16a FMR, Portfolio Transactions
i................................
Trustees and Officers
ii..............................
Management Contracts
iii..............................
Management Contracts
b.................................
c, Contracts with FMR Affiliates
d.............................
e........................... *
f........................... Distribution and Service Plan
g........................... *
Description of the Trusts
h.................................
Contracts with FMR Affiliates
i.................................
17a - Portfolio Transactions
c............................
*
d,e..............................
18a................................ Description of the Trusts
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b................................ Valuation of Portfolio Securities
*
c.................................
20.................................. Distributions and Taxes
..
21a, Contracts with FMR Affiliates
b............................
*
c.................................
22a,b....................... Performance
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
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 the funds and their investments, you can obtain a copy
of each fund's most recent financial report and portfolio listing, and a
copy of the funds' Statement of Additional Information (SAI) dated November
20,1995. T he 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 o f any of these documents,
call Fidelity at 1-800-544-8888.
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.
FSG/GOV-pro-119
5
FIDELITY
SHORT-INTERMEDIATE
GOVERNMENT
FUND
and
FIDELITY
GOVERNMENT
SECURITIES
FUND
Each fund invests in U.S. government securities. Both funds seek high
current income with preservation of capital, but they pursue different
strategies.
PROSPECTUS
NOVEMBER 20, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.
PERFORMANCE How each fund has
done over time.
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 DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
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 DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
KEY FACTS
THE FUNDS AT A GLANCE
GOAL: High current income with preservation of capital. As with any mutual
fund, there is no assurance that a fund will achieve its goal.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager.
SHORT-INTERMEDIATE GOVERNMENT
STRATEGY: Invests mainly in securities fully guaranteed by the U.S.
government while normally maintaining an average maturity of two to five
years.
SIZE: As of September 30, 1995, th e fund had over $140 million in
assets.
GOVERNMENT SECURITIES
STRATEGY: Invests mainly in securities of any maturity issued or guaranteed
by the U.S. government and its agencies, and whose income is free from
state and local income taxes.
SIZE: As of September 30, 1995, the fund had over $ 896 million in
assets.
WHO MAY WANT TO INVEST
Either fund may be appropriate for investors who seek high current income
from a portfolio of U.S. government securities. A fund's level of
risk and potential reward depend on the quality and maturity of its
investments. Short-Intermediate Government Fund is designed for those who
want a fund that invests only in securities that are fully guaranteed by
the U.S. government. Government Securities Fund is a non-diversified fund
de signed for investors who want a fund that invests only in securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities. Because Government Securities Fund can invest in
securities with any maturity, it has the potential for higher yields, but
also carries a higher degree of risk.
The value of the funds' investments and the income they generate will vary
from day to day, and generally reflect interest rates, market conditions,
and other economic and political news. When you sell your shares, they may
be worth more or less than what you paid for them. By themselves, these
funds do not constitute a balanced investment plan.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking to
maximize return must assume
greater risk. The funds in this
prospectus are in the INCOME
category.
(solid bullet) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(right arrow) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(solid bullet) GROWTH Seeks long-term
growth by investing mainly
in stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell or
hold shares of a fund. See page for more information about these fees.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
Annual account maintenance fee
(for accounts under $2500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. It also incurs other expenses for
services such as maintaining shareholder records and furnishing shareholder
statements and financial reports. A fund's expenses are factored into its
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expenses, and are
calculated as a percentage of average net assets.
SHORT-INTERMEDIATE GOVERNMENT
Management fee .45 %
12b-1 fee None
Other expenses .37 %
Total fund operating expenses .82 %
GOVERNMENT SECURITIES
Management fee .45 %
12b-1 fee None
Other expenses .26 %
Total fund operating expenses .71 %
EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses if you
close your account after the number of years indicated:
SHORT-INTERMEDIATE GOVERNMENT
After 1 year $ 8
After 3 years $ 26
After 5 years $ 45
After 10 years $ 10
1
GOVERNMENT SECURITIES
After 1 year $ 7
After 3 years $ 23
After 5 years $ 39
After 10 years $ 88
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FINANCIAL HIGHLIGHTS
The tables that follow are included in each fund's Annual Report and have
been audited by Price Waterhouse LLP, and Coopers & Lybrand L.L.P.,
respectively, independent accountants. Their reports on the financial
statements and financial highlights are included in the Annual Reports. The
financial statements and financial highlights are incorporated by reference
into (are legally a part of) the funds' Statement of Additional
Information.
SHORT-INTERMEDIATE GOVERNMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1.Selected Per-Share Data and
Ratios
2.Years ended September 30 1995 1994 D 1993 1992 1991 E
3.Net asset value, beginning of $ 9.290 $ 9.960 $ 10.140 $ 10.010 $ 10.000
period
4.Income from Investment .648 .533 .722 .694 .027
Operations
Net investment income
5. Net realized and unrealized .174 (.648) (.209) .096 .010
gain (loss)
6. Total from investment .822 (.115) .513 .790 .037
operations
7.Less Distributions
(.622) (.555) (.623) (.650) (.027)
From net investment income
8. From net realized gain -- -- (.070) (.010) --
9. Total distributions (.622) (.555) (.693) (.660) (.027)
10.Net asset value, end of period $ 9.490 $ 9.290 $ 9.960 $ 10.140 $ 10.010
11.Total return B,C 9.15% (1.18)% 5.26% 8.13% .37%
12.Net assets, end of period (000 140,471 132,466 168,292 172,863 1,339
omitted)
13.Ratio of expenses to average .82% .95% .61%, .28%, .65%
net assets F F A,F
14.Ratio of net investment income 6.67% 6.80% 7.19% 7.91% 5.67%
to average net assets A
15.Portfolio turnover rate 266% 184% 348% 419% --
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
E FOR THE PERIOD SEPTEMBER 13, 1991 (COMMENCEMENT OF OPERATIONS) TO
SEPTEMBER 30, 1991.
F FMR VOLUNTARILY AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
GOVERNMENT SECURITIES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16.Selected Per-Share Data and
Ratios
17.Years
ended 1995A 1994A 1993A 1992B 1991C 1990 1989C 1988 1987C 1986C
September 30 ,F C C
18.Net asset
value, $ 9.33 $ 10.8 $ 10.5 $ 10.3 $ 9.64 $ 9.61 $ 9.27 $ 9.52 $ 10.2 $ 9.80
beginning 0 70 00 00 0 0 0 0 80 0
of period
19.Income
from .625 .626 .672 .556 .801 .832 .784 .839 .855 .905
Investment
Operations
Net investment
income
20. Net
realized .564 (1.22 .627 .198 .660 .030 .340 (.250 (.760) .480
and 5) )
unrealized gain
(loss)
21. Total
from 1.189 (.599) 1.299 .754 1.461 .862 1.124 .589 .095 1.385
investment
operations
22.Less
Distributions (.609) (.631) (.679) (.554) (.801) (.832 (.784) (.839 (.855) (.905)
From net ) )
investment income
23. From net -- (.310) (.250) -- -- -- -- -- -- --
realized gain
24. In excess
of net (.020) -- -- -- -- -- -- -- -- --
realized gain
25. Total (.629) (.941) (.929) (.554) (.801) (.832 (.784) (.839 (.855) (.905)
distributions ) )
26.Net asset
value, $ 9.89 $ 9.33 $ 10.8 $ 10.5 $ 10.3 $ 9.64 $ 9.61 $ 9.27 $ 9.52 $ 10.2
end of period 0 0 70 00 00 0 0 0 0 80
27.Total
return D 13.21 (5.81) 13.18 7.65 15.96 9.53 12.62 6.36 1.06 14.62
% % % % % % % % % %
28.Net
assets, end $ 897 $ 614 $ 729 $ 582 $ 522 $ 469 $ 560 $ 568 $ 683 $ 752
of period
(In millions)
29.Ratio of
expenses .71% .69% .69% .70% .70% .66% .73% .79% .87% .84%
to average E
net assets
30.Ratio of
net 6.36 6.26 6.40 7.31 8.23 8.84 8.29 8.87 8.68 8.72
investment
income % % % %E % % % % % %
to average net assets
31.Portfolio
turnover 391% 402% 323% 219% 257% 302% 312% 283% 253% 138%
rate
</TABLE>
A YEAR ENDED SEPTEMBER 30
B NINE MONTHS ENDED SEPTEMBER 30, 1992
C YEAR ENDED DECEMBER 31
D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
E ANNUALIZED
F EFFECTIVE OCTOBER 1, 1993 THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
PERFORMANCE
Bond fund performance can be measured as TOTAL RETURN or YIELD. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
Each fund's fiscal year runs from October 1 through September 30. The
tables below show each fund's performance over past fiscal years compared
to two measures: a comparative index (Salomon Brothers 1 to 5 Year Treasury
Index for Short-Intermediate Government and Salomon Brothers
Treasury/Agency Index for Government Securities) and inflation (CPI). The
charts on page compare each fund's calendar- year performance .
SHORT-INTERMEDIATE GOVERNMENT
Fiscal periods Past Life
ended 1 of
September 30, year fund
1995
Average 9.15 5.29
annual % % A
total return
Cumulative 9.15 23.23
total return % % A
Salomon 9.26 n/a
Brothers 1 to %
5 Year
Treasury Index
(average
annual)
Consumer 2.54 2.85
Price Index % % B
(average
annual)
Consumer 2.54 12.15
Price Index % %B
(cumulative)
A FROM SEPTEMBER 13, 1991
B THE CPI RETURNS BEGIN ON THE MONTH END CLOSEST TO THE FUNDS START DATE.
GOVERNMENT SECURITIES
Fiscal periods Pas Past Past
ended t 1 5 10
September 30, yea year year
1995 r s s
Average 13.21 9.71 9.37
annual % %
total return
Cumulative 13.21 58.91 144.82
total return % %
Salomon 13.56 9.56 9.68
Brothers % %
Treasury/Agen
cy Index
(average
annual)
Salomon 13.56 57.88 151.99
Brothers % %
Treasury/Agen
cy Index
(cumulative)
Consumer 2.54 2.91 3.53
Price Index % %
(average
annual)
Consumer 2.54 15.45 41.46
Price Index % %
(cumulative)
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. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to sharehol ders .
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. governme nt .
SHORT-INTERMEDIATE GOVERNMENT
Calendar year total returns 1992 1993 1994
Short-Intermediate Government 4.71
% 5.28% -1.38%
Salomon Bros. 1-5 Year Treasury Index
6.75% 6.89% -0.79%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: 4.71
Row: 8, Col: 2, Value: 6.75
Row: 9, Col: 1, Value: 5.28
Row: 9, Col: 2, Value: 6.89
Row: 10, Col: 1, Value: -1.38
Row: 10, Col: 2, Value: -0.79
(large solid box) Short-Intermediat
e
Government
(large hollow box) Salomon Bros.1-5
Year Treasury
GOVERNMENT SECURITIES
Calendar year total returns 1985 1986 1987 1988 1989 1990 1991 1992 1993
1994
Government Securities 17.74% 14.62% 1.06% 6.36% 12.62% 9.53% 15.96% 7.97%
12.3
2% -5.21%
Salomon Bros. Treasury/Agency Index 20.41% 15.51% 2.14% 7.10% 14.24% 8.78%
15.3
3% 7.24% 10.74% -3.40%
Percentage (%)
Row: 1, Col: 1, Value: 17.74
Row: 1, Col: 2, Value: 20.41
Row: 2, Col: 1, Value: 14.62
Row: 2, Col: 2, Value: 15.51
Row: 3, Col: 1, Value: 1.06
Row: 3, Col: 2, Value: 2.14
Row: 4, Col: 1, Value: 6.359999999999999
Row: 4, Col: 2, Value: 7.1
Row: 5, Col: 1, Value: 12.62
Row: 5, Col: 2, Value: 14.24
Row: 6, Col: 1, Value: 9.529999999999999
Row: 6, Col: 2, Value: 8.779999999999999
Row: 7, Col: 1, Value: 15.96
Row: 7, Col: 2, Value: 15.33
Row: 8, Col: 1, Value: 7.970000000000001
Row: 8, Col: 2, Value: 7.24
Row: 9, Col: 1, Value: 12.32
Row: 9, Col: 2, Value: 10.74
Row: 10, Col: 1, Value: -5.21
Row: 10, Col: 2, Value: -3.4
(large solid box) Governmen
t Securities
(large hollow box) Salomon
Bros.
Treasury/A
gency
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms,
Short-Intermediate Government Fund is currently a diversified fund of
Fidelity Charles Street Trust, an open-end management investment company
organized as a Massachusetts business trust on July 7, 1981. Government
Securities Fund is currently a non-diversified open-end management
investment company organized as a Massachusetts business trust on September
20, 1991. 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 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.
Fidelity will mail proxy materials in advance, including a voting card and
information about t he proposals to be voted on. Shareholders of
Government Securities fund are entitled to one vote for each share they
own; however, for shareholders of Short-Intermediate Government Fund, the
number of votes they are entitled to is based upon the dollar value of
their investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses their investments and handles
their business affairs.
Curtis Hollingsworth is manager and Vice President of Fidelity
Short-Intermediate Government,which he has managed since October 1991. Mr.
Hollingsworth also manages Institutional Short-Intermediate Government,
Spartan Limited Maturity Government, and Spartan Short-Intermediate
Government. Previously, he managed Government securities, Advisor
Government Investment, and Spartan Long-Term Government. Mr. Hollingsworth
joined Fidelity in 1983.
Robert Ives is manager of Government Securities, which he has managed since
February 1995. Mr. Ives also manages Spartan Government Income, Spartan
Long-Term Government, Advisor Government Investment, and Advisor
Annuity Government Investment. Previously he managed Ginnie-Mae, Spartan
Ginnie Mae, and Mortgage Securities. Mr. Ives joined Fidelity in 1991,
after receiving an M.B.A. from the University of Chicago. Previously, Mr.
Ives was a consultant to the Air Force for MITRE Corp. and an engineer at
Bell Labs.
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 Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the ultimate parent company of FMR. 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.
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
SHORT-INTERMEDIATE GOVERNMENT FUND seeks as high a level of current income
as is consistent with preservation of capital. FMR normally invests at
least 65% of the fund's total assets in U.S. government securities whose
principal and interest payments are fully guaranteed by the U.S.
government. Although the fund can invest in securities of any
maturity , the fund maintains a dollar-weighted average maturity of two
to five years. In determining a security's maturity for purposes of
calculating the fund's average maturity, an estimate of the average
time for its principal to be paid may be used. This can be substantially
shorter than its stated final maturity. As of September 30, 1995, the
fund's dollar weighted average maturity was 2.6 years.
GOVERNMENT SECURITIES FUND seeks as high a level of current income as is
consistent with preservation of principal. FMR normally invests at least
65% of the fund's total assets in securities issued or guaranteed by the
U.S. government or its agencies, or instrumentalities. The fund invests so
that the interest from its security holdings is free from state and local
taxes. Although the fund can invest in securities of any maturity. FMR
seeks to manage the fund so that it generally reacts to changes in interest
rates similarly to government bonds with maturities between five and twelve
years. As of September 30, 1995, the funds dollar weighted average maturity
was 8.7 years.
EACH FUND intends to invest exclusively in U.S. government securities, or
in instruments that are backed by or related to, government securities.
Both funds may also invest in futures contracts and other
derivatives to adjust their investment exposure. Short-Intermediate
Government Fund limits its average maturity to between two and five years
and invests in securities backed by the full faith and credit of the U.S.
government. Government Securities Fund generally invests in a broader
range of government securities and maintains a longer average maturity.
The total return from a bond is a combination of income and price gains or
losses. While income is the most important component of bond returns over
time, the fund's emphasis on income does not mean that the fund invests
only in the highest-yielding bonds available, or that it can avoid risks to
principal. In selecting investments for the fund, FMR considers bond's
income potential together with its potential for price gains or losses. FMR
focuses on assembling a portfolio of income-producing securities that it
believes will provide the best tradeoff between risk and return within the
range of securities that are eligible investments for the fund.
Each fund's yield and share price change daily and are based on changes in
interest rates, market conditions, other economic and political news, and
on the quality and maturity of their investments. In general, bond prices
rise when interest rates fall, and vice versa. This effect is usually more
pronounced for longer-term securities. FMR may use various investment
techniques to hedge a portion of the funds' risks, but there is no
guarantee that these strategies will work as intended. When you sell your
shares of the funds, they may be worth more or less than what you paid for
them. It is important to note that neither the funds nor their yields are
guaranteed by the U.S. government.
FMR normally invests each fund's assets according to its investment
strategy. Each fund also reserves the right to invest without limitation in
investment-grade money market or short-term debt instruments for temporary,
defensive purposes.
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 the funds' 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 1-800-544-8888.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds .
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
the U.S. Government, corporations, financial institutions, and other
entities. These obligations may carry fixed, variable, or floating interest
rates.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. government. Not all U.S. government 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.
ASSET-BACKED SECURITIES represent interests in pools of lower-rated debt
securities, or consumer loans. The value of these securities may be
significantly affected by changes in the market's perception of the issuers
and the creditworthiness of the parties involved.
MORTGAGE SECURITIES are interests in pools of commercial or residential
mortgages, and may include complex instruments such as collateralized
mortgage obligations and stripped mortgage-backed securities. Mortgage
securities may be issued by the U.S. government or by private entities. For
example, Ginnie Maes are interests in pools of mortgage loans insured or
guaranteed by a U.S. government agency. Because mortgage securities pay
both interest and principal as their underlying mortgages are paid off,
they are subject to prepayment risk. This is especially true for stripped
securities. Also, the value of a mortgage security may be significantly
affected by changes in interest rates. Some mortgage securities may have a
structure that makes their reaction to interest rates and other factors
difficult to predict, making their value highly volatile.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other debt securities,
although they may be more volatile and the value of certain types of
stripped securities may move in the same direction as interest rates.
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.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, or other factors that affect security values. These techniques may
involve derivative transactions such as buying and selling options and
futures contracts, entering into swap agreements, and purchasing
indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
ILLIQUID 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. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its 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 a fund's yield.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its 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.
SHORT-INTERMEDIATE GOVERNMENT FUND seeks as high a level of current income
as is consistent with preservation of capital.
GOVERNMENT SECURITIES FUND seeks a high level of current income, consistent
with preservation of principal. The fund invests in securities issued by
the U.S. government or issued by U.S. government agencies or
instrumentalities, and in certain options and futures contracts. The fund
limits its security investments to those U.S. government securities and
interests in U.S. government securities whose interest is exempt from state
and local income tax when held directly by taxpayers.
EACH FUND may borrow for temporary or emergency purposes, but not in an
amount exceeding 33 % of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its 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. Each fund also pays OTHER EXPENSES, which are explained
at right.
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
calculated by adding a group fee rate to an individual fund fee rate, and
multiplying the result by the fund's average net assets.
The group fee rate is based on the average net assets of all the mutual
funds advised by FMR. This rate cannot rise above .37%, and it drops as
total assets under management increase.
For September 1995, the group fee rate was .1493%. Each fund's
individual fun d fee rate is .30%. The total management fee rate for
fiscal 1995 was .45% for Short-Intermediate Government and .45% for
Government Securities.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In
fisca l 19 95, Short-Intermediate Government and Government Securities
paid FSC fees equal to 0.3% and 0.2%, re spectively, of average net
assets.
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
For fiscal 1995, the portfolio tu rnover rates for Short-Intermediate
Government and Government Securities were 266 % and 391 %,
respe ctively. These rates vary from year to year. High turnover
rates increase transaction costs and may increase taxable capital gains.
FMR considers these effects when evaluating the anticipated benefits of
short-term investing.
UNDERSTANDING THE
MANAGEMENT FEE
The management fee FMR
receives is designed to be
responsive to changes in
FMR's total assets under
management. Building this
variable into the fee
calculation assures
shareholders that they will
pay a lower rate as FMR's
assets under management
increase.
(checkmark)
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage Services,
Inc. (FBSI). Fidelity is also a leader in providing tax-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers a fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over 210
(solid bullet) Assets in Fidelity mutual
funds: over $ 335 billion
(solid bullet) Number of shareholder
accounts: over 22 million
(solid bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION
PLANS allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(solid bullet) 401(K) PROGRAMS allow employees of corporations of all sizes
to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. Each fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another Fidelity
fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
These minimums may vary for investments through Fidelity Portfolio
Advisory Services. Refer to the product material for details.
<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet) Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(small solid bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: $50,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund.
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
(small solid bullet) Exchange by mail: call
1-800-544-6666 for
instructions.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
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 share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), 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.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. Do not, however, try to close out your account by check.
ACCOUNT TYPE SPECIAL REQUIREMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request:
except retirement $100,000.
(small solid bullet) For Money Line transfers to
All account types your bank account; minimum:
$10; maximum: $100,000.
(small solid bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Retirement account names appear on the
account.
(small solid bullet) The account owner should
Trust complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Business or (small solid bullet) The trustee must sign the
Organization letter indicating capacity as
trustee. If the trustee's name
is not in the account
registration, provide a copy of
the trust document certified
Executor, within the last 60 days.
Administrator, (small solid bullet) At least one person
Conservator, authorized by corporate
Guardian resolution to act on the
account must sign the letter.
(small solid bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(small solid bullet) Call 1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(small solid bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Check (check_graphic) All account types (small solid bullet) Minimum check: $500.
except retirement (small solid bullet) All account owners must sign
a signature card to receive a
checkbook.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT BALANCES
1-800-544-7544
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
QUOTES
1-800-544-8544
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(small solid bullet) For existing accounts, call
1-800-544-6666 for an application.
(small solid bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(small solid bullet) Changes require a new authorization
form.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (small solid bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.
</TABLE>
A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE APPROPRIATE
CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains to shareholders each year. Income dividends are declared
daily and paid monthly. Capital gains are normally distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions will be reinvested at the NAV as of the
date the fund deducts the distribution from its NAV. The mailing of
distribution checks will begin within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns interest from
its investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund may
realize capital gains if it sells
securities for a higher price
than it paid for them. These
are passed along as CAPITAL
GAIN DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions 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 could also be taxed by the country in
which you reside. Your 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.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
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. 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.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a
capital gain distribution from its NAV, you will pay the full price for the
shares and then receive a portion of the price back in the form of a
taxable distribution.
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
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
If quotations are not readily available, assets are valued by a method that
the Board of Trustees believes accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) 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 may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
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.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
(small solid bullet) You begin to earn dividends as of the first business
day following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) If you sell shares by writing a check and the amount
of the check is greater than the value of your account, your check will be
returned to you and you may be subject to additional charges.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE
of $12.00 from accounts with a value of less than $2,500, subject to an
annual maximum charge of $60.00 per shareholder. It is expected that
accounts will be valued on the second Friday in November of each year.
Accounts opened after September 30 will not be subject to the fee for that
year. The fee, which is payable to the transfer agent, is designed to
offset in part the relatively higher costs of servicing smaller accounts.
The fee will not be deducted from retirement accounts (except non-prototype
retirement accounts), accounts using regular investment plans, or if total
assets in Fidelity funds exceed $50,000. Eligibility for the $50,000 waiver
is determined by aggregating Fidelity mutual fund accounts maintained by
FSC or FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(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) If you exchange into a fund with a sales charge, you
pay the percentage-point difference between that fund's sales charge and
any sales charge you have previously paid in connection with the shares you
are exchanging. For example, if you had already paid a sales charge of 2%
on your shares and you exchange them into a fund with a 3% sales charge,
you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor who makes more
than four exchanges out of the fund per calendar year. Accounts under
common ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor regulations. See your plan materials for further
information.
(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.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
This prospectus is printed on recycled paper using soy-based inks.
FIDELITY SHORT-INTERMEDIATE GOVERNMENT FUND
A FUND OF FIDELITY CHARLES STREET TRUST
FIDELITY GOVERNMENT SECURITIES FUND
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 20, 1995
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated November 20, 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 September 30, 1995, are incorporated herein by reference. To obtain
an additional copy of the Prospectus or the Annual Reports, please call
Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts 19
Distribution and Service Plans
Contracts w ith FMR Affiliates
Description of the Trusts
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company (FSC)
FSG/GOV-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 will be
determined immediately after and as a result of the 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 the fund's investment policies and
limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations listed below the
investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF FIDELITY SHORT-INTERMEDIATE GOVERNMENT FUND
THE FOLLOWING ARE THE FUND'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 Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its 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) 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 (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(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) The fund may, not withstanding 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 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 (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 (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). 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 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 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
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 7.5% 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.)
(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 purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 5% of the fund's net assets. Included
in that amount, but not to exceed 2% of the fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange. Warrants acquired by the fund in units or attached to
securities are not subject to these restrictions.
(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 invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the purposes of limitation (viii), pass-through entities and other
special purpose vehicles or pools of financial assets, such as issuers of
asset -backed securities or investment companies are not considered
"business enterprises."
For the funds' limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page
.
INVESTMENT LIMITATIONS OF FIDELITY GOVERNMENT SECURITIES FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities;
(2) make short sales of securities; provided, however, that the fund may
purchase or sell futures contracts, and may make initial and variation
margin payments in connection with purchases or sales of futures contracts
or of options on futures contracts;
(3) purchase any securities on margin except for such short-term credits as
are necessary for the clearance of transactions; provided, however, that
the fund may purchase or sell futures contracts, and may make initial and
variation margin payments in connection with purchases or sales of futures
contracts or of options on futures contracts;
(4) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the fund's total assets by reason of decline in
net assets will be reduced within 3 days to the extent necessary to comply
with the 33 1/3% limitation;
(5) underwrite any issue of securities, except to the extent that the fund
may be deemed to be an underwriter within the meaning of the Securities Act
of 1933 (i) in the disposition of restricted securities or (ii) in
connection with the purchase of government securities directly from the
issuer in accordance with the fund's investment objective, policies, and
limitations;
(6) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States or its agencies or instrumentalities, or commitments to acquire such
securities on a "when-issued" basis) if, as a result thereof, more than 25%
of the fund's total assets (taken at current value) would be invested in
the securities of one or more issuers having their principal business
activities in the same industry;
(7) purchase or sell real estate, but this shall not prevent the fund from
investing in marketable securities issued by companies such as real estate
investment trusts which deal in real estate or interests therein;
(8) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities);
(9) 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;
(10) purchase securities of other investment companies except in the open
market where no commission except the ordinary broker's commission is paid,
or as a part of a merger or consolidation, and in no event may investments
in such securities exceed 10% of the total assets of the fund. It may not
purchase or retain securities issued by other open-end investment
companies;
(11) purchase warrants, valued at the lower of cost or market, in excess of
5% of the value of the fund's net assets;
(12) invest in oil, gas or other mineral exploration or development
programs;
(13) invest in companies for the purpose of exercising control or
management.
Investment Limitation (4) is construed in conformity with the 1940 Act,
and, accordingly "3 days" means three days, exclusive of Sundays and
holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(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 (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (4)). 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.
(iii) 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.
(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 (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(vi) The 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.
For the purposes of limitation (v), pass-through entities and other
special purpose 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 limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page .
It is Government Securities Fund's position that proprietary strips, such
as CATS and TIGRs, are government securities. However, the fund has been
advised that the Staff of the SEC's Division of Investment Management does
not consider these to be government securities, as defined under the
Investment Company Act of 1940. Accordingly, for purposes of Government
Securities Fund's investment limitation (6), the fund has defined the
following two industry groups: (1) Custodian banks for proprietary strips
that are direct obligations backed by the full faith and credit of the U.S.
government; and (2) Custodian banks for proprietary strips that are
indirect obligations, not backed by the full faith and credit of the U.S.
government. The fund will continue its efforts to secure a favorable
opinion from the SEC Staff that proprietary strips are government
securities. If the fund concludes that, under applicable legal principles,
any of these securities are government securities, it will exclude these
securities from Government Securities Fund's investment limitations (6).
Proprietary strips are considered government securities for the purposes of
Government Securities Fund's investment limitation (i) above.
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. Each fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. 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.
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. The
funds may receive fees for entering into delayed-delivery transactions.
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.
FUTURES AND OPTIONS. The following sections pertain to futures
and options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures Margin
Payments, Limitations on Futures and Options Transactions, Liquidity of
Options and Futures Contracts, OTC Options, Purchasing Put and Call
Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. Each fund will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of a
fund's assets could impede portfolio management or the fund's ability to
meet redemption requests or other current obligations.
COMBINED POSITIONS. Each fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, a fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or
anticipated investments exactly. The funds may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which they typically
invest, which involves a risk that the options or futures position will not
track the performance of a fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in a fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains
or result in losses that are not offset by gains in other investments.
FUTURES CONTRACTS. When a fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
a fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Bond Buyer Municipal Bond Index. Futures can
be held until their delivery dates, or can be closed out before then if a
liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a fund's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of a fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
1.LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The funds intend to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the funds can
commit assets to initial margin deposits and option premiums.
In addition, a fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than
50%(Short-Intermediate Government Fund) and 25% (Government Securities
Fund) of the fund's total assets would be hedged with futures and options
under normal conditions; (b) purchase futures contracts or write put
options if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets; (c) purchase call options if, as a result,
the current value of option premiums for call options purchased by the fund
would exceed 5% of the fund's total assets; or (d) with respect to
Short-Intermediate Government Fund only, write call options on securities
if, as a result, the aggregate value of the securities underlying the calls
would exceed 25% of the fund's net assets. These limitations do not apply
to options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, may be
changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for a fund to
enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions,
and potentially could require a fund to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, a
fund's access to other assets held to cover its options or futures
positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the funds greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, each fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. Each fund may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the fund assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the
option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. A fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
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 Short-Intermediate Government Fund to
be illiquid include repurchase agreements not entitling the holder to
payment of principal and interest within seven days, non-government
stripped fixed-rate mortgage-backed securities, and over-the-counter
options. Also, FMR may determine some government-stripped fixed-rate
mortgage-backed securities to be illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement the fund may
have to close out the option before expiration.
Investments currently considered by Government Securities Fund to be
illiquid include repurchase agreements not entitling the holder to payment
of principal and interest within seven days and over-the-counter options.
However, with respect to over-the-counter options a fund writes, all or a
portion of the value of the underlying instrument may be illiquid depending
on the assets held to cover the option and the nature and terms of any
agreement the fund may have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced 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 was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, or other
financial indicators. Indexed securities typically, but not always, are
debt securities or deposits whose value at maturity or coupon rate is
determined by reference to a specific instrument or statistic. A mortgage
indexed security, for example, could be synthesized to replicate the
performance of mortgage securities and the characteristics of direct
ownership.
The performance of indexed securities depends to a great extent on the
performance of the security or other instrument to which they are indexed,
and may also be influenced by interest rate changes. At the same time,
indexed securities are subject to the credit risks associated with the
issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Indexed securities may be more
volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING 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.
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. A
fund will lend through the program only when the returns are higher than
those available from other short-term instruments (such as repurchase
agreements), and will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. 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. The funds do not
currently intend to participate in the program as a lender.
MORTGAGE-BACKED SECURITIES. Each fund may purchase mortgage-backed
securities issued by government and non-government entities such as banks,
mortgage lenders, or other financial institutions. A mortgage-backed
security is an obligation of the issuer backed by a mortgage or pool
of mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations or
CMOs, make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate
and repay principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages including those on
commercial real estate or residential properties. Other types of
mortgage-backed securities will likely be developed in the future, and the
funds may invest in them if FMR determines they are consistent with the
funds' investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
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 incre mental 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.
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.
SECURITIES LENDING. Each fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall, prepayment
rates tend to increase, which tends to reduce prices of IOs and increase
prices of POs. Rising interest rates can have the opposite effect.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates, mortgage securities, corporate borrowing rates,
or other factors such as security prices or inflation rates. Swap
agreements can take many different forms and are known by a variety of
names. Each fund is not limited to any particular form of swap agreement if
FMR determines it is consistent with the fund's investment objective and
policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to pay fixed
rates in exchange for floating rates while holding fixed-rate bonds, the
swap would tend to decrease the fund's exposure to long-term interest
rates. Caps and floors have an effect similar to buying or writing options.
Depending on how they are used, swap agreements may increase or decrease
the overall volatility of a fund's investments and its share price and
yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, or other factors that determine the
amounts of payments due to and from a fund. If a swap agreement calls for
payments by the fund, the fund must be prepared to make such payments when
due. In addition, if the counterparty's creditworthiness declined, the
value of a swap agreement would be likely to decline, potentially resulting
in losses. Each fund expects to be able to eliminate its exposure under
swap agreements either by assignment or other disposition, or by entering
into an offsetting swap agreement with the same party or a similarly
creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating interest
rates and carry rights that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate instruments have interest rates
that change whenever there is a change in a designated base rate while
variable rate instruments provide for a specified periodic adjustment in
the interest rate. These formulas are designed to result in a market value
for the instrument that approximates its par value.
ZERO COUPON BONDS. Zero coupon bonds do not make 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 dividends, a fund takes into account as
income a portion of the difference between a zero coupon bond's purchase
price and its face value.
A broker-dealer creates a DERIVATIVE ZERO by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities. CATS (Certificates of Accrual on Treasury
Securities), TIGRs (Treasury Investment Growth Receipts), and TRs (Treasury
Receipts) are examples of derivative zeros.
The Federal Reserve Bank creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the interest and
principal components of an outstanding U.S. Treasury bond and selling them
as individual securities. Bonds issued by the Resolution Funding
Corporation (REFCORP) and the Financing Corporation (FICO) can also be
separated in this fashion. ORIGINAL ISSUE ZEROS are zero coupon securities
originally issued by the U.S. government, a government agency, or a
corporation in zero coupon form.
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 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. 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 pur chasers 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). 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
each fund 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 Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, 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 portfolio 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 funds.
For th e fiscal periods ended September 30, 1995 and 1994, the
portfolio turnover rates were 266 % and 184%, respectively for
Short-Intermediate Government and 391 % and 402%, respectively for
Government Securities. Because a high turnover rate increases transaction
costs and may increase taxable gains, FMR carefully weighs the anticipated
benefits of short-term investing against these consequences. An increased
turnover rate is due to a greater volume of shareholder purchase orders,
short-term interest rate volatility and other special market conditions.
For fiscal 1995, 1994, and 1993, Short-Intermediate
Government and Government Securities paid no brokerage commissions.
During fiscal 1995, the funds paid no fees to brokerage firms that
provided research services.
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 OF PORTFOLIO SECURITIES
Each fund's net asset value per share is determined by FSC under procedures
established by the Board of Trustees. Portfolio securities are valued
primarily on the basis of valuations furnished by a pricing service which
uses both dealer-supplied valuations and electronic data processing
techniques that take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics, and other
market data, without exclusive reliance on quoted prices or exchange or
over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Use of the pricing service
has been approved by the Board of Trustees. There are a number of pricing
services available, and the Trustees, or officers acting on behalf of the
Trustees, on the basis of ongoing evaluation of these services, may use
other pricing services or discontinue the use of any pricing service in
whole or in part.
Securities not valued by the pricing service and for which quotations are
readily available are valued at market values determined on the basis of
their latest available bid prices as furnished by recognized dealers in
such securities. Futures contracts and options are valued on the basis of
market quotations, if available. Securities and other assets for which
quotations or pricing service valuations are not readily available are
valued at their fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of Trustees.
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. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
YIELD CALCULATIONS. Yields for a fund are computed by dividing
the fund's interest income for a given 30-day or one-month period, net of
expenses, by the average number of shares entitled to receive distributions
during the period, dividing this figure by the fund's net asset value (NAV)
at the end of the period, and annualizing the result (assuming compounding
of income) in order to arrive at an annual percentage rate. Income is
calculated for purposes of yield quotations in accordance with standardized
methods applicable to all stock and bond funds. In general, interest income
is reduced with respect to bonds trading at a premium over their par value
by subtracting a portion of the premium from income on a daily basis, and
is increased with respect to bonds trading at a discount by adding a
portion of the discount to daily income. Capital gains and losses generally
are excluded from the calculation.
Income calculated for the purposes of calculating a fund's yield differs
from income as determined for other accounting purposes. Because of the
different accounting methods used, and because of the compounding of income
assumed in yield calculations, a fund's yield may not equal its
distribution rate, the income paid to your account, or the income reported
in the fund's financial statements.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund'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
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund'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 the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
Each fund's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment to equal the fund's tax-free yield. For
funds such as these funds, earning interest free from state (and sometimes
local) taxes in most states, tax-equivalent yields may be calculated by
dividing the fund's yield by the result of one minus a specified tax
rate.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund'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 in a
fund 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 compou nded bas is in ten years.
While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that a fund's performance
is not constant over time, but changes from year to year, and that average
annual to tal retu rns represent averaged figures as opposed to the
actual year-to-year performance of the fund.
In addition to average annual total returns, a fund 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.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
HISTORICAL FUND RESULTS. The following tables show each fund's yields,
tax-equivalent yields, and total returns for periods end e d September
30, 1995.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Thirty-Day One Life of One Life of
Yield Year Fund* Year Fund*
Short-Intermediate 5.13% 9.15 % 5.29 % 9.15 % 23.23 %
Government
</TABLE>
* From September 13, 1991 (commencement of operations).
Note: If FMR had not reimbursed certain fund expenses during the period,
the fund's total return would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Thirty-Da One Five One Five
y Year Years Ten Year Years Ten
Yield Years Years
Government
Securities 5.67% 13.21 % 9.71 % 9.37 % 13.21 % 58.91 % 144.82 %
</TABLE>
The following table shows the income and capital elements of each fund's
cumulative total return. The table compares each fund's 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 fund'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
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 a fixed-income investment 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.
SHORT-INTERMEDIATE GOVERNMENT FUND During the period from September 13,
1991 (commencement of operations) to September 30, 1995, a hypoth etical
$1 0,000 investment in Short-Intermediate Government would have grown to
$ 12,323 , assuming all distributions were reinvested. This was a
period of fluctuating interest rates and bond prices 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 the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Fidelity Short-Intermediate Government Fund INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1995 $ 9,490 $ 2,751 $ 82 $ 12,323 $ 16,933 $ 17,824 $ 11,215
1994 $ 9,290 $ 1,919 $ 81 $ 11,290 $ 13,050 $ 13,945 $ 10,937
1993 $ 9,960 $ 1,379 $ 86 $ 11,425 $ 12,587 $ 12,555 $ 10,622
1992 $ 10,140 $ 704 $ 10 $ 10,854 $ 11,137 $ 11,220 $ 10,344
1991* $ 10,010 $ 27 $ 0 $ 10,037 $ 10,028 $ 10,046 $ 10,044
</TABLE>
* From September 13, 1991 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on September
13, 1991 the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested), amounted to
$12,907. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the per iod would have amounted to $ 2,476 for
dividends and $ 80 for capital gains distributions. Tax consequences
of different investments have not been factored into the above figures.
GOVERNMENT SECURITIES FUND During the ten year period ended September 30,
1995, a hypotheti cal $10, 000 investment in Government Securities
would have grown to $ 24,482, assuming all distributions were
reinvested. This was a period of fluctuating interest rates and bond prices
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 the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Fidelity Government Securities Fund INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1995 $ 10,521 $ 12,799 $ 1,162 $ 24,482 $ 44,281 $ 49,872 $ 14,146
1994 $ 9,926 $ 10,650 $ 1,048 $ 21,624 $ 34,128 $ 39,019 $ 13,795
1993 $ 11,564 $ 10,867 $ 527 $ 22,958 $ 32,915 $ 35,129 $ 13,398
1992 $ 11,170 $ 9,114 $ 0 $ 20,284 $ 29,126 $ 31,393 $ 13,047
1991 $ 10,553 $ 7,253 $ 0 $ 17,806 $ 26,225 $ 28,110 $ 12,669
1990 $ 9,936 $ 5,470 $ 0 $ 15,406 $ 19,992 $ 22,060 $ 12,253
1989 $ 10,085 $ 4,246 $ 0 $ 14,331 $ 22,029 $ 23,308 $ 11,542
1988 $ 10,000 $ 3,082 $ 0 $ 13,082 $ 16,564 $ 17,626 $ 11,062
1987 $ 9,936 $ 1,935 $ 0 $ 11,871 $ 18,900 $ 20,893 $ 10,619
1986 $ 10,809 $ 1,066 $ 0 $ 11,875 $ 13,175 $ 13,802 $ 10,175
</TABLE>
Explanatory Notes: With an initial investment of $10,000 made on September
30, 1985, the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their ca sh value at the time they were reinvested), amounted to
$23,866. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have amounted to $8,227 for dividends
and $617 for capital gains d istributions. 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 greate r 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 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)/all
taxable, which is reported in the MONEY FUND REPORT(registered trademark),
covers over 757 taxable money market funds. The Bond Fund Report
AverageS(trademark)/all taxable, which is reported in the BOND FUND
REPORT(registered trademark), covers over 554 taxable bond funds. When
evaluating comparisons to money market funds, investors should consider the
relevant differences in investment objectives and policies. Specifically,
money market funds invest in short-term, high-quality instruments and seek
to maintain a stable $1.00 share price. Bond funds, however, invest in
longer-term instruments and their share prices change daily in response to
a variety of factors.
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; charitabl e givin g; 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.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, a fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of September 30, 1995, FMR advi sed over $26.5 billion in tax-free
fund assets, $77 billion in money market fund assets, $226 billion in
equity fund assets, $55 billion in international fund assets, and $22
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 fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV)
is calculated each day the New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following holiday closings for 1995:
New Year's Day (observed), President's Day, Good Friday, Memorial Day
(observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas
Day. Although FMR expects the same holiday schedule to be observed in the
future, the NYSE may modify its holiday schedule at any time. In addition,
the fund will not process wire purchases and redemptions on days when the
Federal Reserve Wire System is closed .
FSC normally determines the fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities
and Exchange Commission (SEC). To the extent that portfolio securities
are traded in other markets on days when the NYSE is closed , the fund's
NAV may be affected on days when investors do not have access to the fund
to purchase or redeem shares. In addition, trading in some of the fund's
portfolio securities may not occur on days when the fund is open for
business.
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 fund'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 Investment Company Act of 1940 (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) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
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, the 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
DISTRIBUTIONS. If you request to have distributions mailed to you and
the U.S. Postal Service can not deliver your checks, or if your checks
remain uncashed for six months, Fidelity may reinvest your distributions at
the then current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fun d'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. For Short-Intermediate Government Fund
Mortgage security paydown gains (losses) are generally taxable as ordinary
income and, therefore, increase (decrease) taxable dividend distributions.
Each fund will send each shareholder a notice in January describing the tax
status of dividend and capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a fund, and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
each fund are taxable to shareholders as dividends, not as capital gains.
A s o f September 30, 1995, Short-Intermediate Government Fund had
a capital loss carryforward aggregating approximately $7,378,000. This loss
carryforward of which $320,000, $1,404,000, and $5,654,000 will expire on
September 30, 2001, 2002, and 2003 respectively, is available to offset
future capital gains.
As of September 30, 1995, Government Securities F und ha d a
capi tal loss carryforward aggregating approximately $ 17,573,000 .
This loss carryforward, which will expire on September 30,
2003 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 each fund's portfolio. Because the income earned
on most U.S. government securities in which each fund invests is exempt
from state and local income taxes, the portion of your dividends from each
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.
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 intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some futures contracts and options are included in this 30%
calculation, which may limit a fund's investments in such instruments.
Short-Intermediate Government fund is treated as a separate entity from the
other funds of Fidelity Charles Street 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 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 Investment Company Act of 1940 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;
Fidelity Investments Institutional Operations Company, 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 trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. Trustees and officers elected or
appointed prior to Government Securities Fund's conversion from a Nebraska
limited partnership to a Massachusetts business trust served the Nebraska
limited partnership 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 Investment Company Act of 1940) 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 (65), 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 (54), 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 (63), TX, Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production, 1990). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union
Pacific Resources Company (exploration and production). He is a Director of
Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS (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 she 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 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 (66), 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 (62), 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 (67), 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.(56), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
CURTIS HOLLINGSWORTH (38),is manager and Vice President of Fidelity
Short-Intermediate Government, which he has managed since October 1991. Mr.
Hollingsworth also manages Institutional Short-Intermediate Government,
Spartan Limited Maturity Government, Spartan Long-Term Government Bond, and
Spartan Short-Intermediate Government. Previously, he managed Government
Securities and Advisor Government Investment. Mr. Hollingsworth joined
Fidelity in 1983.
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 (48), 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).
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance 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).
T he 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 September 30, 1995.
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
Short-
Interm $ 0 $ 67 $ 65 $ 82 $ 0 $ 67 $ 68 $ 0 $ 67 $ 67 $ 67 $ 66
ediate
Government
Government $ 0 $ 338 $ 328 $ 415 $ 0 $ 338 $ 344 $ 0 $ 339 $ 338 $ 338 $ 334
Securities
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Benefits Upon Compensation from
Accrued as Part of Retirement from the the Fund
Fund Expenses from Fund Complex* Complex*
the 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.
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 are 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 September 30, 1995, the Trustees and officers of each fund
ow ned, in the aggregate, less than 1 % of each fund's total
outstanding shares. Also, as of that date Homeland Bank, 229 East Park
Avenue, P.O. Box 5300, Waterloo, IA, was known by the fund to own of record
or beneficially approximately 8.5% of Short-Intermediate Government's total
outstanding shares.
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 and all Trustees who are "interested
persons" of the trusts or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of 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
FSC, the funds pay all of their expenses, without limitation, that are not
assumed by those parties. Each fund pays for typesetting, printing, and
mailing proxy material to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Although each fund's
management contract provides that the funds will pay for typesetting,
printing and mailing prospectuses, statements of additional information,
notices, and reports to existing shareholders, Government Securities Fund
has entered into revised transfer agent agreement with FSC pursuant to
which FSC bears the cost of providing these services to existing
shareholders. Pursuant to Fidelity Charles Street Trust's transfer agent
agreement with FSC, FSC bears the cost of providing these services to
existing shareholders. Other expenses paid by the funds include interest,
taxes, brokerage commissions, the funds' 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 nonrecurring 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 the trusts' officers and Trustees with respect to
litigation.
FMR is Short-Intermediate Government Fund's manager pursuant to a
management contract dated October 1, 1994 that was approved by shareholders
on September 21, 1994. FMR is Government Securities Fund's manager pursuant
to a management contract dated December 31, 1991 that was approved by
Fidelity Government Securities Fund (a limited partnership) on December 31,
1991, as the then sole shareholder of the fund pursuant to an Agreement and
Plan of Reorganization approved by public shareholders of the limited
partnership on November 13, 1991. (The terms of the fund's current contract
with FMR duplicate those of its previous contract.)
For the services of FMR under the contract, each fund pays FMR a monthly
management fee composed of the sum of two elements: a group fee rate and an
individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of the
registered investment companies with which FMR has management contracts and
is calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown below on the left. The schedule below on the right shows the
effective annual group fee rate at various asset levels, which is the
result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $ 351 billion of group net
assets - the a pproximate level for September 1995 - was .1493%, which is
the weighted average of the respective fee rates for each level of group
net assets up to $351 billi on.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .3700% $ 0.5 billion .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450 400 .1507
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
Prior to October 1, 1994, Short-Intermediate Government Fund's group fee
rate was based on a schedule with breakpoints ending at .1400% for average
group assets in excess of $174 billion. The group fee rate breakpoints
shown above for average group assets in excess of $120 billion and under
$228 billion were voluntarily adopted by FMR on January 1, 1992. The
additional breakpoints shown above for average group assets in excess of
$228 billion were voluntarily adopted by FMR on November 1, 1993. The
fund's current management contract reflects these extensions of the group
fee rate schedule.
Under Government Securities Fund's current management contract with FMR,
the group fee rate is based on a schedule with breakpoints ending at .1500%
for average group assets in excess of $84 billion. The group fee rate
breakpoints shown above for average group assets in excess of $120 billion
and under $228 billion were voluntarily adopted by FMR on January 1, 1992.
The additional breakpoints shown above for average group assets in excess
of $228 billion were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints, pending shareholder
approval of new management contracts reflecting the revised schedule. The
revised group fee rate schedule provides for lower management fee rates as
FMR's assets under management increase. The revised group fee rate schedule
is identical to the above schedule for average group assets under $156
billion. For average group assets in excess of $156 billion, the group fee
rate schedule voluntarily adopted by FMR is as follows:
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
120 - $156 billion .1450% $ 150 billion .1736%
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
Over 372 .1200 325 .1514
350 .1494
375 .1476
400 .1459
The individual fund fee rate is .30%. Based on the average group net
assets of the funds advised by FMR for September 1995, the annual
management fee fee rate would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
. 1493 % + .30% = . 4493 %
One-twelfth of this annual management fee rate is applied to each fund's
net assets averaged for the most recent month, giving a dollar amount,
which is the fee for that month.
The table below shows the management fees paid to FMR by each fund for the
last three fiscal years:
<TABLE>
<CAPTION>
<S> <C> <C>
Years Ended
Short-Intermediate Government Fund Management Fees as a
September 30 Management Fees % of Average Net Assets
1995 $ 704,636 .45 %
1994 $ 676,355 .46 %
1993 $ 783,194 .47 %
Years Ended
Government Securities Fund Management Fees as a
September 30 Management Fees % of Average Net Assets
1995 $ 3,601,721 .45 %
1994 $ 3,257,871 .46 %
1993 $ 2,881,668 .47 %
</TABLE>
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 repayment of the
reimbursement by each fund will lower its total returns and yiel d.
During the fiscal periods reported, FMR voluntarily agreed to reimburse
certain funds to the extent that the fund's aggregate operating expenses
were in excess of an annual rate of its average net assets. The table below
identifies the funds in reimbursement; the levels of and periods for such
reimbursement; the amount of management fees incurred under each contract
before reimbursement; and the dollar amount reimbursed by FMR, if any, for
each period.
SHORT-INTERMEDIATE GOVERNMENT FUND
From To Expense Limitation
June 1, 1993 June 30, 1993 .70%
May 1, 1993 May 31, 1993 .65%
February 1, 1993 April 30, 1993 .60%
January 1, 1993 January 31, 1993 .50%
September 1, 1992 December 31, 1992 .40%
Fiscal Year Management Fee Amount of Reimbursement
Before Reimbursement
1995 $ 704,636 $ 0
1994 $ 676,355 $ 0
1993 $ 783,194 $ 486,551
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that each 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 investments in foreign securities.
DISTRIBUTION AND SERVICE PLANS
The Truste es have approved Distribution and Service Plans on behalf
of the funds (the Plans) pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (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 beha lf of the fund under the Rule.
The Plans, as approved by the Trustees, allow 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 also
specifically recognizes that FMR, either directly or through FDC, may use
its management fee revenue, past profits, or other resources, without
limitation, to pay promotional and administrative expenses in connection
with the offer and sale of shares of each fund. In addition, each Plan
provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that assist in selling shares
of each fund, or to third parties, including banks, that render shareholder
support services.
Payments m ade by FMR to third parties during the fiscal year ended
September 30, 1995 amounted to $23,087 for Short-Intermediate Government
Fund, and $82,279 for Government Securities Fund.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that the
Plans do not authorize payments by a 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 each f und, 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.
Short-Intermediate Government Fund's Plan was approved by shareholders on
September 16, 1992. Government Securities Fund's Plan was approved by
Fidelity Government Securities Fund (a limited partnership) on December 31,
1991, as the then sole shareholder of the fund pursuant to an Agreement and
Plan of Reorganization approved by public shareholders of the limited
partnership on November 13, 1991.
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 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.
CONTRACTS WITH FMR AFFILIATES
FSC is transfer, dividend disbursing, and shareholder servicing agent
for each fund. FSC receives annual account fees and asset-based fees for
each retail account and certain institutional accounts based on account
size. In addition, the fees for retail accounts are subject to increase
based on postal rate changes. With respect to certain other institutional
retirement accounts, FSC r eceives annual account fees and asset based
fees based on fund type. FSC also collects small account fees from certain
accounts with balances of less than $2,500.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Transfer Agent Fees
1993 1994 1995
Fidelity Short-Intermediate Government Fund $ 417,815 $ 445,354 $ 425,194
Fidelity Government Securities Fund $ 1,030,455 $ 1,275,823 $ 1,589,234
</TABLE>
FSC also performs the calculations necessary to determine each fund's
net asset value per share and dividends, and maintains each fund's
accounting records. The annual fee rates for these pricing and bookkeeping
services are based on each fund's average net assets, specifically, .04%
for the first $500 million of average net assets and .02% for average net
assets in excess of $500 million. The fee is limited to a minimum of
$45,000 and a maximum of $750,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses during each fund's last
three fiscal years:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Pricing and Bookkeeping Fees
1993 1994 1995
Fidelity Short-Intermediate Government Fund $ 80,316 $ 66,692 $ 62,672
Fidelity Government Securities Fund $ 230,028 $ 240,654 $ 261,630
</TABLE>
FSC also receives fees for administering each fund's securities lending
program. Securities lending fees are based on the number and duration of
individual securities loans.
For fiscal 1993, 1994, and 1995, the funds did not incur any securities
lending fees.
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 agreements call
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.
DESCRIPTION OF THE TRUSTS
TRUSTS' ORGANIZATION. Fidelity Short-Intermediate Government Fund is a fund
of Fidelity Charles Street Trust, an open-end management investment
company, organized as a Massachusetts business trust on July 7, 1981.
Currently, there are seven funds of Fidelity Charles Street Trust: Fidelity
Short-Intermediate Government Fund, Fidelity Asset Manager, Fidelity U.S.
Government Reserves, Fidelity Asset Manager: Growth, Fidelity Asset
Manager: Income, Spartan Investment Grade Bond Fund, and Spartan Short-Term
Income Fund. Fidelity Government Securities Fund, an open-end management
investment company, is organized as a Massachusetts business trust as of
September 20, 1991. The fund was originally organized as a limited
partnership in the State of Nebraska on August 25, 1978. On December 31,
1991, the limited partnership transferred all of its assets to the
Massachusetts business trust. The Declarations of Trust permit the Trustees
to create additional funds.
In the event that FMR ceases to be the investment adviser to a trust or 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 each trust received for the issue or sale of shares of each
of its funds 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 liabilities of their respective trusts. Expenses with respect
to each trust are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of each trust, subject to the general
supervision of the Boards 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 of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. Each Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or its Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. Each Declaration of Trust
provides for indemnification out of each fund's property of any shareholder
held personally liable for the obligations of the fund. Each Declaration of
Trust also provides that its funds 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 the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
Each Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declarations of trust protect Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, 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 nonassessable, except as set forth under the heading "Shareholder
and Trustee Liability" above. Shareholders representing 10% or more of a
trust or fund may, as set forth in the Declarations of trust, call meetings
of a trust or fund for any purpose related to the trust or fund, as the
case may be, including, in the case of a meeting of an entire trust, the
purpose of voting on removal of one or more Trustees. Each trust or fund
may be terminated upon the sale of its assets to another open-end
management investment company, or upon liquidation and distribution of its
assets, if approved by vote of the holders of a majority of the fund, as
determined by the current value of each shareholder's investment in the
fund. If not so terminated, each trust or fund will continue indefinitely.
Each fund of Fidelity Charles Street Trust may invest all of its assets in
another investment company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New York,
is custodian of the assets of each fund. The custodian is responsible for
the safekeeping of a fund's assets and the appointment of the 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. The Bank of New York and Chemical Bank, each
headquartered in New York, also may 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 Board of
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.
SHORT-INTERMEDIATE GOVERNMENT FUND'S AUDITOR. Price Waterhouse LLP, 160
Federal Street, Boston, Massachusetts serves as the Fidelity Charles Street
trust's independent accountant. The auditor examines financial statements
for the fund and provides other audit, tax, and related services.
GOVERNMENT SECURITIES FUND'S AUDITOR. Coopers & Lybrand L.L.P., One Post
Office Square, Boston, Massachusetts serves as the fund's independent
accountant. The auditor examines financial statements for the fund and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended September 30, 1995 are included in each fund's Annual Report,
which are separate reports supplied with this Statement of Additional
Information. Each fund's financial statements and financial highlights are
incorporated herein by reference.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value of
each investment by the number of years remaining to its maturity,
adding these calculations, and then dividing the total by the value of the
fund's portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to this
rule.
For example, if it is probable that the issuer of an instrument will take
advantage of a maturity-shortening device, such as a call, refunding, or
redemption provision, the date on which the instrument will probably be
called, refunded, or redeemed may be considered to be its maturity date.
Also, the maturities of mortgage-backed securities and some asset-backed
securities, such as collateralized mortgage obligations, are determined on
a weighted average life basis, which is the average time for principal to
be repaid. For a mortgage security, this average time is calculated by
estimating the timing of principal payments including unscheduled
prepayments, during the life of the mortgage. The weighted average life
of these securities is likely to be substantially shorter than their stated
final maturity.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (i) The Financial Statements and Financial Highlights included in the
Annual Report, for Fidelity Government Securities Fund for the fiscal year
ended September 30, 1995, are incorporated herein by reference to the
fund's Statement of Additional Information and were filed on November 13,
1995 for Fidelity Government Securities Fund (File No.811-2869) pursuant to
Rule 30d-1under the Investment Company Act of 1940 and are incorporated
herein by reference.
(ii) The Financial Statements and Financial Highlights included in the
Annual Report, for Fidelity Short-Intermediate Government Fund for the
fiscal year ended September 30, 1995, are incorporated by reference in the
fund's Statement of Additional Information and were filed on November 13,
1995 for Fidelity Charles Street Trust (File No. 811-3221) pursuant to Rule
30d-1under the Investment Company Act of 1940 and are incorporated herein
by reference.
(b) Exhibits
(1)(a) Declaration of Trust, dated September 20, 1991, is incorporated
herein by reference to Exhibit 1(a) of Post-Effective Amendment No. 42.
(b) Bylaws of the Trust, as amended, are incorporated herein by reference
to Fidelity Union Street Trust's (File No. 33-50318) Post-Effective
Amendment No. 87.
(2) Not applicable.
(3) Not applicable.
(4) Not applicable.
(5) Management Contract, dated December 31, 1991, between the Registrant
and Fidelity Management & Research Company is incorporated herein by
reference to Exhibit 5 of Post-Effective Amendment No. 42.
(6) (a) General Distribution Agreement, dated December 31, 1991, between
Registrant and Fidelity Distributors Corporation is incorporated herein by
reference to Exhibit 6(a) of Post-Effective Amendment No. 42.
(b) Amendment, dated May 10, 1994, to General Distribution Agreement, dated
December 31, 1991, between Fidelity Government Securities Fund and Fidelity
Distributors Corporation is incorporated herein by reference to Exhibit
6(b) of Post-Effective Amendment No. 42.
(7) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, is incorporated herein by reference to Exhibit 7 to
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment
No. 87.
(8)(a) Custodian Agreement between the Registrant and The Bank of New
York, is incorporated herein by reference to Exhibit 8 of
Post-Effective Amendment No. 42.
(b) Appendix A, dated September 14, 1995, to the Custodian Agreement,
dated De cember 1,1994 between The Bank of New York and
Fidelity Government Securities Fund is filed herin as Exhibit
8(b).
(c) Appendix B, dated September 14,1995, to the Custodian Agreement,
dated Decem ber 1,1994, between The Bank of New York and
Fidelity Government Securities Fund is filed herin as Exhibit
8(c).
(9) Not applicable.
(10) Not applicable.
(11) (a) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit
11(a).
(b) Consent of Price Waterhouse LLP is filed herein as Exhibit 11(b).
(12) Not applicable.
(13) Not applicable.
(14)(a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) to Fidelity Union Street Trust's Post-Effective
Amendment No. 87.
(b) Fidelity Defined Contribution Retirement Plan and Trust Agreement,
as currently in effect, is incorporated herein by reference to Exhibit
14(c) to Fidelity Securities Fund's (File No. 2-93601) Post-Effective
Amendment No. 33.
(c) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) to Fidelity Union Street Trust's
Post-Effective Amendment No. 87.
(d) National Financial Services Corporation Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(h) to Fidelity
Union Street Trust's Post-Effective Amendment No. 87.
(e) Fidelity Portfolio Advisory Services Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(i) to Fidelity Union Street
Trust's Post-Effective Amendment No. 87.
(f) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) to Fidelity
Union Street Trust's Post-Effective Amendment No. 87.
(g) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) to Fidelity Union Street
Trust's Post-Effective Amendment No. 87.
(h) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(l)
to Fidelity Union Street Trust's Post-Effective Amendment No. 87.
(i) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(m)
to Fidelity Union Street Trust's Post-Effective Amendment No. 87.
(j) Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(f) to Fidelity Commonwealth Trust's (File
No. 2-52322) Post-Effective Amendment No. 57.
(k) Plymouth Investments Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference to
Exhibit 14(o) to Fidelity Commonwealth Trust's (File No. 2-52322) Post-
Effective Amendment No. 57.
(l) The Fidelity Prototype Defined Benefit Pension Plan and Trust Basic
Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) to Fidelity Securities
Fund's (File No. 2-93601) Post Effective-Amendment No. 33.
(m) The Institutional Prototype Plan Basic Plan Document, Standardized
Adoption Agreement, and Non-Standardized Adoption Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(o) to Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(n) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Basic
Plan Document, Standardized Adoption Agreement, and Non-Standardized
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(f) to Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(o) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption
Agreement, Non-Standardized Discretionary Contribution Plan No. 002
Adoption Agreement, and Non-Standardized Discretionary Contribution Plan
No. 003 Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) to Fidelity Securities Fund's (File No.
2-93601) Post-Effective Amendment No. 33.
(p) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) to Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(15) Distribution and Service Plan pursuant to Rule 12b-1 between the
Registrant and Fidelity Distributors Corporation is incorporated herein by
reference to Exhibit 15 of Post-Effective Amendment No. 42.
(16)(a) A schedule for computation of 30-day yields is filed herein as
Exhibit 16(a).
(b) A schedule for computation of total return is filed herin as
Exhibit 16(b).
(c) A schedule for computation of adjusted NAVs is filed herein as
Exhibit 16(c).
(17) Financial Data Schedules are filed herein as Exhibit 27.
(18) Not Applicable
Item 25. Persons Controlled by or Under Common Control with Registrant
The Board of Trustees of Fidelity Government Securities Fund is the same
as the boards of other funds advised by FMR, each of which has Fidelity
Management and Research Company as its investment adviser. In addition, the
officers of these funds are substantially identical. Nonetheless, the
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 October 31, 1995
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Government Securities Fund 107,997
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or Officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular officer 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.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<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 III 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>
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)
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
* 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 fund's custodian The
Bank of New York, 110 Washington Street, New York, N.Y.
Item 31. Manager Services
Not applicable.
Item 32. Undertakings
The Registrant, on behalf of Fidelity Government Securities Fund, provided
the information required by Item 5A is contained in the annual report,
undertakes to furnish to each person to whom a prospectus has been
delivered, upon their request and without charge, a copy of the
Registrant's latest annual report to shareholders.
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. 44 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Massachusetts, on the 14th day of November 1995.
FIDELITY GOVERNMENT SECURITIES FUND
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 November 14, 1995
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Kenneth A. Rathgeber Treasurer November 14, 1995
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee November 14, 1995
J. Gary Burkhead
/s/Ralph F. Cox * Trustee November 14, 1995
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee November 14, 1995
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee November 14, 1995
Richard J. Flynn
/s/E. Bradley Jones * Trustee November 14, 1995
E. Bradley Jones
/s/Donald J. Kirk * Trustee November 14 , 1995
Donald J. Kirk
/s/Peter S. Lynch * Trustee November 14, 1995
Peter S. Lynch
/s/Edward H. Malone * Trustee November 14, 1995
Edward H. Malone
/s/Marvin L. Mann_____* Trustee November 14, 1995
Marvin L. Mann
/s/Gerald C. McDonough* Trustee November 14, 1995
Gerald C. McDonough
/s/Thomas R. Williams * Trustee November 14, 1995
Thomas R. Williams
(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
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Income Fund
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (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, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names 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 attorneys-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
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>
Fidelity Advisor Annuity Fund Fidelity Institutional Trust
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series II Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Exchange Fund Fund
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus 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, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, 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
Exhibit 8(b)
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
The Bank of New York and each of the following Investment Companies
Dated as of September 14, 1995
The following is a list of the Funds and their respective Portfolios for
which the Custodian shall serve under a Custodian Agreement dated as of
December 1, 1994:
FUND Portfolio Effective as of:
Fidelity Advisor Annuity Fund Fidelity Advisor Annuity Government
Investment Fund December 1, 1994
Fidelity Advisor Annuity High Yield Fund December 1, 1994
Fidelity Advisor Annuity Money Market Fund September 14, 1995
Fidelity Advisor Series II Fidelity Advisor Government Investment Fund
December 1, 1994
Fidelity Advisor High Yield Fund December 1, 1994
Fidelity Advisor Short Fixed-Income Fund December 1, 1994
Fidelity Advisor IV Fidelity Advisor Limited Term Bond Fund December 1,
1994
Fidelity Institutional Short-Intermediate Government Portfolio December 1,
1994
Fidelity Real Estate High Income Fund December 1, 1994
Fidelity Advisor Series VIII Fidelity Advisor Strategic Income Fund
December 1, 1994
Fidelity Charles Street Trust Fidelity Short-Intermediate Government Fund
December 1, 1994
Spartan Short-Term Income Fund December 1, 1994
Spartan Investment-Grade Bond Fund December 1, 1994
Fidelity Commonwealth Trust Fidelity Intermediate Bond Fund December 1,
1994
Daily Money Fund Capital Reserves: Money Market Portfolio September 14,
1995
Capital Reserves: U.S. Government Portfolio September 14, 1995
Treasury only (f/k/a Fidelity U.S.
Treasury Income Portfolio) September 14, 1995
Money Market Portfolio September 14, 1995
U. S. Treasury Portfolio September 14, 1995
Fidelity Devonshire Trust Spartan Long-Term Government Bond Fund December
1, 1994
Spartan Adjustable Rate Government Fund December 1, 1994
Fidelity Fixed-Income Trust Fidelity Short-Term Bond Portfolio December 1,
1994
Fidelity Investment Grade Bond Fund December 1, 1994
Spartan Government Income Fund December 1, 1994
Spartan High Income Fund December 1, 1994
Spartan Short-Intermediate Government Fund December 1, 1994
Fidelity Government Securities Fund Fidelity Government Securities Fund
December 1, 1994
Fidelity Hereford Street Trust Spartan Money Market Fund December 1, 1994
Spartan U.S. Government Money Market Fund September 14, 1995
Spartan U.S. Treasury Money Market Fund September 14, 1995
Fidelity Income Fund Fidelity Ginnie Mae Portfolio December 1, 1994
Fidelity Mortgage Securities Portfolio December 1, 1994
Spartan Limited Maturity Government Fund December 1, 1994
Fidelity Institutional Cash Portfolios Domestic (f/k/a Domestic Money
Market Portfolio) September 14, 1995
Money Market (f/k/a Money Market Portfolio) September 14, 1995
Government (f/k/a U.S. Government Portfolio) September 14, 1995
Treasury II (f/k/a U.S. Treasury Portfolio II) September 14, 1995
Fidelity Institutional Investors Trust SLAM: Government Money Market
Portfolio September 14, 1995
Fidelity Institutional Trust Fidelity U.S. Bond Index Portfolio December 1,
1994
Fidelity Money Market Trust Domestic Money Market Portfolio September 14,
1995
Retirement Government Money Market Portfolio September 14, 1995
Retirement Money Market Portfolio September 14, 1995
Fidelity Phillips Street Trust Fidelity Cash Reserves December 1, 1994
Fidelity U.S. Government Reserves September 14, 1995
Fidelity School Street Trust Spartan Bond Strategist December 1, 1994
Fidelity Select Portfolios Money Market Portfolio December 1, 1994
Fidelity Summer Street Trust Fidelity Capital & Income Fund December 1,
1994
Fidelity Union Street Trust Spartan Ginnie Mae Fund December 1, 1994
Fidelity Union Street Trust II Fidelity Daily Income Trust December 1,
1994
Spartan World Money Market Fund December 1, 1994
Variable Insurance Products Fund High Income Portfolio December 1, 1994
Variable Insurance Products Fund II Investment Grade Bond Portfolio
December 1, 1994
Variable Insurance Products Fund Money Market Portfolio September 14,
1995
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to
be executed in its name and behalf as of the day and year first set forth
opposite each such Portfolio.
Each of the Investment Companies The Bank of New York
listed on this Appendix "A", on behalf
of each of their respective Portfolios
By: /s/Kenneth A. Rathgeber By: /s/Stephen F. Grunston
Name: Kenneth A. Rathgeber Name: Stephen F. Grunston
Title: Treasurer Title: Vice President
Exhibit 8(c)
Appendix "B"
To
Custodian Agreement
Between
The Bank of new York and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of September 14, 1995
The following is a list of Additional Custodians, Special Subcustodians
and Foreign Subcustodians under the Custodian Agreement dated as of
December 1, 1994 (the "Custodian Agreement"):
A. Additional Custodians
CUSTODIAN PURPOSE
None
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Bank of New York FICASH
Chemical Bank, N.A. Third Party Repurchase Agreements*
* Chemical Bank, N.A. will act as Special Subcustodian with respect to
third party repurchase agreements for the
following Portfolios only;
FUND PORTFOLIO
Fidelity Institutional Cash Portfolios U.S. Treasury Portfolio II
Fidelity Hereford Street Trust Spartan Money Market Fund
Fidelity Select Portfolios Money Market Portfolio
Fidelity Union Street Trust II Fidelity Daily Income Trust
Spartan World Money Market Fund
Fidelity Phillips Street Trust Fidelity Cash Reserves
C. Foreign Subcustodians:
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina First National Bank of Boston, Buenos Aires Caja de Valores,
S.A.
Australia Australia and New Zealand Banking Austraclear Limited
Group Ltd. (ANZ), Melbourne
The Reserve Bank Information and
Transfer System (RITS)
Austria GiroCredit Bank AG der Osterreichische Kontrollbank
Osterreichischen Sparkassen (GiroCredit) Aktiengesellschaft (OEKB)
Belgium Banque Bruxelles Lambert Caisse Interprofessionnelle de Depot
et de Virement de Titres (CIK)
Brazil First National Bank of Boston, Sao Paulo Stock Exchange
Sao Paulo (BOVESPA), Sistema Especial de
Liquidacao e Custodia (SELIC)
Rio de Janeiro Exchange (BVRJ);
Camara de Liquidacao e Custodia
S.A (CLC)
Canada Royal Bank of Canada Canadian Depository for Securities,
Ltd. (CDS)
Chile Banco de Chile None
First National Bank of Boston, Santiago
China- Shanghai Standard Chartered Bank, Shanghai Shanghai Securities
Central Clearing
& Registration Corp. (SSCCRC)
China- Shenzhen Standard Chartered Bank, Shenzhen Shenzhen Securities
Registration
Corp. Ltd. (SSRC)
Colombia Cititrust Colombia S.A., Sociedad Fiduciaria, None
Bogota
Czech Republic Ceskoslovenska Obchodnibanka, Securities Center (SCP)
A.S., Prague Czech National Bank
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen-VP Center
Finland Union Bank of Finland Ltd., Helsinki None
France Banque Paribas, Paris SICOVAM
Germany Dresdner Bank AG Deutscher Kassenverein AG (DKV)
Greece Alpha Credit Bank, A.E. None
Hong Kong The Hongkong & Shanghai Banking Hong Kong Securities Clearing
Co.,
Corp. Ltd., Hong Kong Ltd. (HKSCC); Central Clearing &
Settlement System (CCASS)
Hungary Citibank Budapest Rt. Central Depository & Clearing House
(Budapest) Ltd. (KELLER Ltd.)
India Hongkong & Shanghai Banking Corp. Ltd., None
Bombay
Indonesia Hongkong & Shanghai Banking Corp. Ltd., None
Jakarta
Ireland Allied Irish Banks, plc., Dublin Gilt Settlement Office (GSO)
Israel Israel Discount Bank Tel-Aviv Stock Exchange
(TASE) Clearinghouse Ltd.
Italy Banca Commerciale Italiana, Milan Monte Titoli S.p.A.
Citibank, N.A., Milan
Japan Yasuda Trust & Banking Co. Ltd. Japan Securities Depository
Center
(JASDEC)
Malaysia Hongkong Bank Malaysia Berhad Malaysian Central Depository Sdn.
Bhd. (MCD)
Mexico Banco Nacional de Mexico S.A., Mexico, D.F. Institucion para el
Deposito de Valores- S.D. INDEVAL, S.A. de C.V.
Netherlands MeesPierson N.V. Nederlands Centraal Instituut voor
Giraal Effectenverkeer BV (NECIGEF)/KAS Associatie, N.V.
(KAS)
New Zealand Australia and New Zealand Banking Austraclear Limited (RBNA)
through
Group Ltd. (ANZ) the Reserve Bank of New Zealand
Norway Den norske Bank, Oslo Verdipapirsentralen (VPS)
Pakistan Standard Chartered Bank, Karachi None
Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
Philippines Hongkong & Shanghai Banking Corp. Ltd., None
Manila
Poland Bank Handlowy W. Warszawie, S.A. National Depository of
Securities
Warsaw
Portugal Banco Comercial Portugues, S.A. Central de Valores Mobiliaros
(Interbolsa)
Singapore United Overseas Bank Central Depository Pte Ltd. (CDP)
South Africa Standard Bank of South Africa Ltd., None
Johannesburg
South Korea Bank of Seoul Korean Securities Depository (KSD)
Spain Banco Bilbao Vizcaya Servicio de Compensacio'n y
Liquidacio'n de Valores (SCLV)
Sri Lanka Standard Chartered Bank, Colombo Central Depository System,
(Pvt) Limited (CDS)
Sweden Skandinaviska Enskilda Banken, Stokholm Vardepappercentralen VPC
AB
Switzerland Union Bank of Switzerland, Zurich Schweizerische Effecten-
Giro A. G. (SEGA)
Taiwan Hongkong and Shanghai Banking Corp., Ltd., Taiwan Securities
Central Depository
Taipei Co., Ltd., (TSCD)
Thailand The Siam Commercial Bank Public Company Ltd. Share Depository
Center (SDC)
Transnational CEDEL S.A., Luxembourg
Euroclear Clearance System
Societe Cooperative, Belgium.
Turkey Citibank, N.A., Istanbul Takas ve Saklama A.S., (TvS)
United Kingdom The Bank of New York, London None
Uruguay The First National Bank of Boston, Montevideo None
Venezuela Citibank, N.A., Caracas None
Each of the Investment Companies Listed
on Appendix "A" to the Custodian Agreement,
on Behalf of each of Their Respective Portfolios
By: /s/ Kenneth A. Rathgeber
Name: Kenneth A.Rathgeber
Title:Treasurer
Exhibit 11(a)
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. 44 to the Registration Statement on Form N-1A of Fidelity
Government Securities Fund, of our report dated November 1, 1995 on the
financial statements and financial highlights included in the September 30,
1995 Annual Report to Shareholders of Fidelity Government Securities Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
November 14, 1995 COOPERS & LYBRAND L.L.P.
Exhibit 11(b)
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. 44 to the Registration Statement on Form N-1A of Fidelity
Government Securities Fund, of our report dated November 1, 1995 on the
financial statements and financial highlights included in the September 30,
1995 Annual Report to Shareholders of Fidelity Short-Intermediate
Government Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Fidelity Short-Intermediate
Government Fund's Auditor" in the Statement of Additional Information.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
November 14, 1995
Exhibit 16(a)
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions, and
reinvestment prices of the historical period covered.
AVERAGE ANNUAL RETURNS are calculated according to the following formula:
Average Annual Return = [(1 + Cumulative Return)1/n] - 1
[where n = the number of years in the base period]
Included in this exhibit is a chart showing the data used to calculate the
30-Day Yield as of the fund's fiscal year end.
The 30-DAY YIELD is calculated according to the methods prescribed in Form
N-1A Item 22(b)(ii).
30-Day Total Net Income
30-Day Yield = 2(--------------------------------------------------) + 1)6
- - 1
(30-Day Average Shares Outstanding)(Prior Day Price)
The TAX EQUIVALENT YIELD is calculated by the formula as follows:
Tax Equivalent Yield = (yield) / (1-[tax rate])
[where the tax rate is expressed in decimal notation (i.e. 28% = 0.28)]
For any municipal portfolio that invests a portion of its assets in
obligations subject to state taxes, the tax equivalent yield is adjusted to
reflect these investments.
[Insert the name of the fund for which the required data schedules have
been provided.]
[Schedule of YIELD data provided by Fund Accounting. Schedule of TOTAL
RETURN data is supplied by Fund Performance. Both need to be filed with
this exhibit. Make sure each schedule of data is properly identified as
yield or total return.]
<TABLE>
<CAPTION>
<S> <C>
1 FIDELITY FUNDS 1 54-1 GOVERNMENT SECURITIES SC78252 Page 1
REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 10/16/95 TIME: 15:23
From 19950902 To 19951002
INCOME W/
SHARES GROSS WRITE BREAKAGE &
DATE OUTSTANDING INCOME EXPENSES NET INCOME ADJUSTMENTS OFF BREAKAGE WRITE OFF
_________________________________________________________________________________________________________________________
2 90,313,645.754 169,976.86 17,195.21 152,781.65 0.00 0.00 41.80 152,762.17
3 90,313,645.754 169,976.86 17,195.21 152,781.65 0.00 0.00 12.76 152,823.45
4 90,313,645.754 169,976.86 17,195.21 152,781.65 0.00 0.00 16.28- 152,794.41
5 90,334,169.453 170,733.11 17,288.18 153,444.93 0.00 0.00 41.23 153,428.65
6 90,589,798.755 170,210.00 17,314.22 152,895.78 0.00 0.00 21.43 152,937.01
7 90,563,272.719 170,690.42 17,351.16 153,339.26 0.00 0.00 37.07 153,360.69
8 90,633,167.701 170,799.13 17,321.26 153,477.87 0.00 0.00 17.65- 153,514.94
9 90,633,167.701 170,799.13 17,321.26 153,477.87 0.00 0.00 18.27 153,460.22
10 90,633,167.701 170,799.13 17,321.26 153,477.87 0.00 0.00 36.45- 153,496.14
11 90,627,965.817 170,153.98 17,323.88 152,830.10 0.00 0.00 5.10- 152,793.65
12 90,586,487.276 170,617.23 17,319.12 153,298.11 0.00 0.00 20.67 153,293.01
13 90,623,688.250 170,577.14 17,354.66 153,222.48 0.00 0.00 1.51- 153,243.15
14 90,567,243.817 170,636.04 17,350.02 153,286.02 0.00 0.00 44.73 153,284.51
15 90,940,943.689 170,532.69 4,908.36 165,624.33 12,475.74- 0.00 42.17- 153,193.32
16 90,940,943.689 170,532.69 17,384.10 153,148.59 12,475.74- 0.00 38.13- 153,106.42
17 90,940,943.689 170,532.69 17,384.10 153,148.59 12,475.74- 0.00 34.09- 153,110.46
18 91,040,627.524 172,078.57 17,412.80 154,665.77 12,475.74- 0.00 44.69 154,631.68
19 91,038,831.436 171,343.39 17,394.80 153,948.59 12,475.74- 0.00 44.42- 153,993.28
20 91,019,117.706 171,295.40 17,409.28 153,886.12 12,475.74- 0.00 19.39 153,841.70
21 91,190,882.781 171,254.53 17,527.28 153,727.25 12,475.74- 0.00 1.19- 153,746.64
22 91,168,096.899 171,587.11 17,494.58 154,092.53 12,475.74- 0.00 17.26 154,091.34
23 91,168,096.899 171,587.11 17,494.58 154,092.53 12,475.74- 0.00 35.71 154,109.79
24 91,168,096.899 171,587.11 17,494.58 154,092.53 12,475.74- 0.00 37.01- 154,128.24
25 91,140,872.212 171,696.13 17,473.37 154,222.76 12,475.74- 0.00 24.61- 154,185.75
26 91,096,980.886 171,533.95 17,468.78 154,065.17 12,475.74- 0.00 4.43- 154,040.56
27 91,080,606.249 171,533.91 17,453.09 154,080.82 12,475.74- 0.00 32.00- 154,076.39
28 90,453,654.286 171,533.96 17,443.63 154,090.33 12,475.74- 0.00 15.76 154,058.33
29 90,321,423.645 340,888.93 34,735.88 306,153.05 165,552.27- 0.00 2.53- 153,092.28
30 90,321,423.645 170,444.47 17,367.94 153,076.53 165,552.27- 0.00 20.81- 153,074.00
1 90,321,423.645 169,838.07 17,348.15 153,076.53 165,552.27- 0.00 39.09- 153,055.72
2 90,643,050.526 419.94- 1.43- 418.51- 12,681.99- 0.00 41.71 152,412.68
_______
0.00
1 FIDELITY FUNDS 1 54-1 GOVERNMENT SECURITIES SC78252 Page 2
REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 10/16/95 TIME: 15:23
From 19950902 To 19951002
MTD DAILY DIST DIVIDEND -------- SHARES OUTSTANDING -------- DAILY
DATE MIL RATE MIL RATE YIELD PAID | 30-DAY TOTAL 30-DAY AVERAGE | YTM INCOME
__________________________________________________________________________________________________________________________
2 0.001691000 0.003383000 6.25 152,720.37 2,690,454,003.748 89,681,800.125 155,608.65
3 0.001692000 0.005075000 6.25 152,810.69 2,691,310,587.516 89,710,352.917 155,608.65
4 0.001692000 0.006767000 6.25 152,810.69 2,692,167,171.284 89,738,905.709 155,608.65
5 0.001698000 0.008465000 6.27 153,387.42 2,693,044,278.751 89,768,142.625 155,608.65
6 0.001688000 0.010153000 6.22 152,915.58 2,694,141,624.104 89,804,720.803 155,038.74
7 0.001693000 0.011846000 6.24 153,323.62 2,695,219,661.294 89,840,655.376 155,371.93
8 0.001694000 0.013540000 6.26 153,532.59 2,696,349,640.583 89,878,321.353 156,174.20
9 0.001693000 0.015233000 6.25 153,441.95 2,697,518,512.181 89,917,283.739 156,603.18
10 0.001694000 0.016927000 6.26 153,532.59 2,698,848,461.068 89,961,615.369 156,603.18
11 0.001686000 0.018613000 6.23 152,798.75 2,700,173,208.071 90,005,773.602 156,603.18
12 0.001692000 0.020305000 6.25 153,272.34 2,701,456,476.533 90,048,549.218 156,659.02
13 0.001691000 0.021996000 6.23 153,244.66 2,702,788,143.515 90,092,938.117 155,549.64
14 0.001692000 0.023688000 6.24 153,239.78 2,703,750,857.335 90,125,028.578 156,076.42
15 0.001685000 0.025373000 6.19 153,235.49 2,705,004,095.252 90,166,803.175 154,218.67
16 0.001684000 0.027057000 6.20 153,144.55 2,706,138,597.801 90,204,619.927 155,339.79
17 0.001684000 0.028741000 6.20 153,144.55 2,707,269,037.754 90,242,301.258 155,339.79
18 0.001698000 0.030439000 6.25 154,586.99 2,708,499,161.542 90,283,305.385 155,339.79
19 0.001692000 0.032131000 6.24 154,037.70 2,709,727,489.242 90,324,249.641 156,553.45
20 0.001690000 0.033821000 6.22 153,822.31 2,710,951,614.611 90,365,053.820 155,935.87
21 0.001686000 0.035507000 6.20 153,747.83 2,712,368,634.662 90,412,287.822 155,509.38
22 0.001690000 0.037197000 6.26 154,074.08 2,713,737,786.889 90,457,926.230 158,092.21
23 0.001690000 0.038887000 6.26 154,074.08 2,715,096,054.651 90,503,201.822 158,092.21
24 0.001691000 0.040578000 6.26 154,165.25 2,716,488,480.307 90,549,616.010 158,092.21
25 0.001692000 0.042270000 6.26 154,210.36 2,717,853,681.276 90,595,122.709 158,092.21
26 0.001691000 0.043961000 6.26 154,044.99 2,719,174,990.919 90,639,166.364 158,269.53
27 0.001692000 0.045653000 6.27 154,108.39 2,720,449,828.456 90,681,660.949 158,996.04
28 0.001703000 0.047356000 6.31 154,042.57 2,721,053,210.471 90,701,773.682 159,202.55
29 0.001695000 0.049051000 6.28 153,094.81 2,721,556,632.892 90,718,554.430 158,151.37
30 0.001695000 0.050746000 6.26 153,094.81 2,722,078,254.251 90,735,941.808 156,477.72
1 0.001695000 0.001695000 6.26 153,094.81 2,722,086,032.142 90,736,201.071 156,477.72
2 0.001681000 0.003376000 6.20 152,370.97 2,722,415,436.914 90,747,181.230 156,477.72
_______________
4,757,125.57
1 FIDELITY FUNDS 1 54-1 GOVERNMENT SECURITIES SC78252 Page 3
REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 10/16/95 TIME: 15:23
From 19950902 To 19951002
DAILY YTM NET DAILY YTM PAYDOWN ADJ TO 30-DAY YTM 30-DAY 30-DAY 30-DAY DAILY SEC PRIOR
DATE INCOME ADJ NET INCOME GAIN/LOSS INCOME NET INCOME MIL RATE YIELD YIELD DAY NAV
_________________________________________________________________________________________________________________________
2 0.00 138,413.44 0.00 0.00 4,188,761.80 0.046722000 5.74 5.66 9.88
3 0.00 138,413.44 0.00 0.00 4,187,875.66 0.046697000 5.74 5.66 9.88
4 0.00 138,413.44 0.00 0.00 4,187,720.92 0.046680000 5.74 5.66 9.88
5 0.00 138,320.47 0.00 0.00 4,187,473.21 0.046663000 5.73 5.66 9.88
6 0.00 137,724.52 0.00 0.00 4,186,649.81 0.046638000 5.71 5.62 9.91
7 0.00 138,020.77 0.00 0.00 4,185,990.51 0.046612000 5.71 5.61 9.91
8 0.00 138,852.94 0.00 0.00 4,186,233.59 0.046596000 5.73 5.66 9.88
9 0.00 139,281.92 0.00 0.00 4,186,314.96 0.046578000 5.72 5.68 9.88
10 0.00 139,281.92 0.00 0.00 4,185,772.82 0.046551000 5.72 5.68 9.88
11 0.00 139,279.30 0.00 0.00 4,183,940.69 0.046508000 5.72 5.68 9.88
12 0.00 139,339.90 0.00 0.00 4,182,169.16 0.046466000 5.71 5.68 9.88
13 0.00 138,194.98 0.00 0.00 4,179,190.73 0.046410000 5.69 5.62 9.91
14 0.00 138,726.40 0.00 0.00 4,179,805.84 0.046394000 5.70 5.65 9.89
15 0.00 136,834.57 0.00 0.00 4,175,146.56 0.046326000 5.66 5.55 9.94
16 0.00 137,955.69 0.00 0.00 4,171,869.49 0.046268000 5.66 5.58 9.92
17 0.00 137,955.69 0.00 0.00 4,167,468.25 0.046200000 5.65 5.58 9.92
18 0.00 137,926.99 0.00 0.00 4,162,866.64 0.046130000 5.65 5.58 9.92
19 0.00 139,158.65 0.00 0.00 4,159,496.69 0.046072000 5.65 5.64 9.90
20 0.00 138,526.59 0.00 0.00 4,155,494.86 0.046006000 5.64 5.60 9.91
21 0.00 137,982.10 0.00 0.00 4,152,005.43 0.045947000 5.62 5.57 9.93
22 0.00 140,597.63 0.00 0.00 4,151,006.18 0.045912000 5.65 5.71 9.86
23 0.00 140,597.63 0.00 0.00 4,149,618.23 0.045873000 5.65 5.71 9.86
24 0.00 140,597.63 0.00 0.00 4,149,932.86 0.045854000 5.65 5.71 9.86
25 0.00 140,618.84 0.00 0.00 4,154,005.85 0.045875000 5.65 5.71 9.86
26 0.00 140,800.75 0.00 0.00 4,158,260.75 0.045899000 5.65 5.72 9.86
27 0.00 141,542.95 0.00 0.00 4,163,312.65 0.045933000 5.66 5.76 9.85
28 0.00 141,758.92 0.00 0.00 4,169,746.93 0.045982000 5.67 5.77 9.85
29 0.00 140,783.43 0.00 0.00 4,171,721.44 0.045994000 5.67 5.77 9.85
30 0.00 139,109.78 0.00 0.00 4,172,613.10 0.045995000 5.65 5.68 9.89
1 0.00 139,129.57 0.00 0.00 4,174,140.85 0.046003000 5.65 5.68 9.89
2 0.00 156,479.15 0.00 0.00 4,192,186.77 0.046202000 5.67 6.39 9.89
avg: 9.89
</TABLE>
Exhibit 16(b)
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions, and
reinvestment prices of the historical period covered.
AVERAGE ANNUAL RETURNS are calculated according to the following formula:
Average Annual Return = [(1 + Cumulative Return)1/n] - 1
[where n = the number of years in the base period]
[Fund Name]
[Schedule of data provided by Fund Performance]
<TABLE>
<CAPTION>
<S> <C>
Name: Government Sec. (054) A. Pay Date E. Original SharesI. CG Short M. Cap Gain Shares Q. Cap Gains
rec'd
in Cash
Notes: B. X-Date F. Total Value J. NAV N. Cap Gain Value R. Cost of
reinvest'd
Distributions
Load: C. Reinvest NAV G. Dividends K. Div Shares O. Total Value
Redempt D. Monthend H. CG Long L. Dividend VaP. Divs rec'd in Cash
FiscYea30-Sep
A B C D E F G H I J K L M N O P Q R
1.00 Sep-85 1063.830 10000.00 9.40 10000
1.00 Oct-85 1063.830 10063.83 0.080796 9.46 9 86 0 0 10150 86 0 86
1.00 Nov-85 1063.830 10191.49 0.080266 9.58 18 173 0 0 10365 171 0 172
1.00 Dec-85 1063.830 10425.53 0.081685 9.80 27 266 0 0 10691 258 0 260
1.00 Jan-86 1063.830 10382.98 0.080791 9.76 36 353 0 0 10736 344 0 349
1.00 Feb-86 1063.830 10680.85 0.076063 10.04 44 446 0 0 11127 425 0 432
1.00 Mar-86 1063.830 10946.81 0.081937 10.29 53 548 0 0 11495 512 0 523
1.00 Apr-86 1063.830 10925.53 0.078848 10.27 62 635 0 0 11561 596 0 611
1.00 May-86 1063.830 10627.66 0.080565 9.99 71 709 0 0 11336 682 0 702
1.00 Jun-86 1063.830 10829.79 0.077376 10.18 80 810 0 0 11640 764 0 790
1.00 Jul-86 1063.830 10840.43 0.079133 10.19 88 901 0 0 11742 848 0 880
1.00 Aug-86 1063.830 11063.83 0.075559 10.40 97 1007 0 0 12071 929 0 967
1.00 Sep-86 1063.830 10808.51 0.071102 10.16 105 1066 0 0 11875 1004 0 1050
1.00 Oct-86 1063.830 10893.62 0.070818 10.24 113 1157 0 0 12051 1080 0 1132
1.00 Nov-86 1063.830 10978.72 0.066220 10.32 121 1244 0 0 12223 1150 0 1210
1.00 Dec-86 1063.830 10936.17 0.066501 10.28 128 1318 0 0 12254 1221 0 1289
1.00 Jan-87 1063.830 10968.09 0.066695 10.31 136 1402 0 0 12370 1292 0 1369
1.00 Feb-87 1063.830 10936.17 0.064749 10.28 143 1475 0 0 12411 1361 0 1446
1.00 Mar-87 1063.830 10808.51 0.070104 10.16 152 1543 0 0 12351 1435 0 1531
1.00 Apr-87 1063.830 10446.81 0.069813 9.82 160 1576 0 0 12023 1510 0 1616
1.00 May-87 1063.830 10319.15 0.071451 9.70 169 1644 0 0 11963 1586 0 1703
1.00 Jun-87 1063.830 10382.98 0.070670 9.76 178 1741 0 0 12124 1661 0 1791
1.00 Jul-87 1063.830 10319.15 0.071552 9.70 188 1820 0 0 12139 1737 0 1879
1.00 Aug-87 1063.830 10180.85 0.073532 9.57 197 1887 0 0 12068 1815 0 1971
1.00 Sep-87 1063.830 9936.17 0.073645 9.34 207 1935 0 0 11871 1893 0 2064
1.00 Oct-87 1063.830 10127.66 0.074912 9.52 217 2067 0 0 12195 1973 0 2159
1.00 Nov-87 1063.830 10117.02 0.073245 9.51 227 2159 0 0 12276 2051 0 2253
1.00 Dec-87 1063.830 10127.66 0.074234 9.52 237 2257 0 0 12385 2130 0 2349
1.00 Jan-88 1063.830 10329.79 0.073049 9.71 247 2397 0 0 12727 2208 0 2444
1.00 Feb-88 1063.830 10382.98 0.070396 9.76 256 2502 0 0 12885 2283 0 2536
1.00 Mar-88 1063.830 10234.04 0.072767 9.62 266 2562 0 0 12796 2360 0 2632
1.00 Apr-88 1063.830 10127.66 0.072187 9.52 276 2631 0 0 12759 2437 0 2729
1.00 May-88 1063.830 9989.36 0.073461 9.39 287 2694 0 0 12683 2515 0 2827
1.00 Jun-88 1063.830 10063.83 0.071471 9.46 297 2810 0 0 12874 2591 0 2924
1.00 Jul-88 1063.830 9968.09 0.072259 9.37 308 2882 0 0 12850 2668 0 3022
1.00 Aug-88 1063.830 9904.26 0.070366 9.31 318 2960 0 0 12864 2743 0 3118
1.00 Sep-88 1063.830 10000.00 0.067668 9.40 328 3082 0 0 13082 2815 0 3212
1.00 Oct-88 1063.830 10074.47 0.065960 9.47 338 3197 0 0 13271 2885 0 3304
1.00 Nov-88 1063.830 9914.89 0.064219 9.32 347 3236 0 0 13151 2953 0 3394
1.00 Dec-88 1063.830 9861.70 0.065140 9.27 357 3311 0 0 13172 3023 0 3486
1.00 Jan-89 1063.830 9914.89 0.064175 9.32 367 3420 0 0 13335 3091 0 3577
1.00 Feb-89 1063.830 9797.87 0.059755 9.21 376 3465 0 0 13263 3154 0 3662
1.00 Mar-89 1063.830 9776.60 0.064781 9.19 386 3551 0 0 13327 3223 0 3756
1.00 Apr-89 1063.830 9893.62 0.065859 9.30 397 3689 0 0 13582 3293 0 3851
1.00 May-89 1063.830 10000.00 0.067804 9.40 407 3827 0 0 13827 3366 0 3950
1.00 Jun-89 1063.830 10212.77 0.065370 9.60 417 4005 0 0 14218 3435 0 4046
1.00 Jul-89 1063.830 10329.79 0.064014 9.71 427 4146 0 0 14476 3503 0 4141
1.00 Aug-89 1063.830 10117.02 0.065721 9.51 437 4158 0 0 14275 3573 0 4239
1.00 Sep-89 1063.830 10085.11 0.067404 9.48 448 4246 0 0 14331 3645 0 4340
1.00 Oct-89 1063.830 10223.40 0.064394 9.61 458 4402 0 0 14625 3713 0 4438
1.00 Nov-89 1063.830 10244.68 0.067884 9.63 469 4514 0 0 14759 3785 0 4541
1.00 Dec-89 1063.830 10223.40 0.069287 9.61 480 4611 0 0 14835 3859 0 4647
1.00 Jan-90 1063.830 10021.28 0.065656 9.42 491 4621 0 0 14643 3929 0 4748
1.00 Feb-90 1063.830 9989.36 0.066592 9.39 502 4710 0 0 14700 4000 0 4852
1.00 Mar-90 1063.830 9925.53 0.071440 9.33 514 4792 0 0 14717 4076 0 4964
1.00 Apr-90 1063.830 9819.15 0.067129 9.23 525 4846 0 0 14666 4147 0 5070
1.00 May-90 1063.830 9946.81 0.071318 9.35 537 5023 0 0 14970 4223 0 5183
1.00 Jun-90 1063.830 10010.64 0.069942 9.41 549 5167 0 0 15178 4298 0 5295
1.00 Jul-90 1063.830 10063.83 0.070196 9.46 561 5308 0 0 15372 4372 0 5408
1.00 Aug-90 1063.830 9936.17 0.070780 9.34 573 5355 0 0 15292 4448 0 5523
1.00 Sep-90 1063.830 9936.17 0.069885 9.34 586 5470 0 0 15406 4522 0 5638
1.00 Oct-90 1063.830 10010.64 0.069427 9.41 598 5625 0 0 15636 4596 0 5752
1.00 Nov-90 1063.830 10159.57 0.068233 9.55 610 5822 0 0 15982 4668 0 5865
1.00 Dec-90 1063.830 10255.32 0.069496 9.64 622 5994 0 0 16249 4742 0 5982
1.00 Jan-91 1063.830 10255.32 0.069883 9.64 634 6111 0 0 16367 4817 0 6100
1.00 Feb-91 1063.830 10265.96 0.065898 9.65 646 6230 0 0 16496 4887 0 6211
1.00 Mar-91 1063.830 10234.04 0.070380 9.62 658 6330 0 0 16565 4962 0 6332
1.00 Apr-91 1063.830 10255.32 0.069204 9.64 670 6463 0 0 16718 5035 0 6451
1.00 May-91 1063.830 10234.04 0.069183 9.62 683 6569 0 0 16803 5109 0 6571
1.00 Jun-91 1063.830 10138.30 0.067546 9.53 695 6626 0 0 16764 5181 0 6689
1.00 Jul-91 1063.830 10191.49 0.068001 9.58 708 6780 0 0 16972 5253 0 6808
1.00 Aug-91 1063.830 10382.98 0.066231 9.76 720 7025 0 0 17408 5323 0 6926
1.00 Sep-91 1063.830 10553.19 0.062966 9.92 731 7252 0 0 17806 5390 0 7038
1.00 Oct-91 1063.830 10574.47 0.065080 9.94 743 7384 0 0 17958 5460 0 7155
1.00 Nov-91 1063.830 10606.38 0.062557 9.97 754 7519 0 0 18126 5526 0 7268
1.00 Dec-91 1063.830 10957.45 0.064205 10.30 766 7885 0 0 18842 5595 0 7385
1.00 Jan-92 1063.830 10702.13 0.063709 10.06 777 7818 0 0 18520 5662 0 7501
1.00 Feb-92 1063.830 10659.57 0.060381 10.02 788 7898 0 0 18557 5727 0 7612
1.00 Mar-92 1063.830 10521.28 0.064445 9.89 800 7915 0 0 18436 5795 0 7732
1.00 Apr-92 1063.830 10521.28 0.061521 9.89 812 8029 0 0 18551 5861 0 7846
1.00 May-92 1063.830 10670.21 0.063461 10.03 824 8262 0 0 18932 5928 0 7965
1.00 Jun-92 1063.830 10787.23 0.061211 10.14 835 8468 0 0 19255 5993 0 8081
1.00 Jul-92 1063.830 11053.19 0.061835 10.39 846 8794 0 0 19848 6059 0 8198
1.00 Aug-92 1063.830 11085.11 0.059550 10.42 857 8934 0 0 20019 6122 0 8312
1.00 Sep-92 1063.830 11170.21 0.058046 10.50 868 9114 0 0 20284 6184 0 8424
1.00 Oct-92 1063.830 10925.53 0.059428 10.27 879 9029 0 0 19954 6247 0 8538
1.00 Nov-92 1063.830 10872.34 0.057274 10.22 890 9096 0 0 19968 6308 0 8650
21-Dec 18-Dec 10.07 Dec-92 1063.830 10744.68 0.060066 0.15 0.10 10.10 902 9110 49 490 20344 6372 266 9256
1.00 Jan-93 1063.830 10936.17 0.059292 10.28 914 9391 49 499 20826 6435 266 9375
1.00 Feb-93 1063.830 11148.94 0.051985 10.48 924 9679 49 508 21337 6491 266 9480
1.00 Mar-93 1063.830 11148.94 0.055623 10.48 934 9793 49 508 21450 6550 266 9594
1.00 Apr-93 1063.830 11202.13 0.053570 10.53 945 9949 49 511 21662 6607 266 9703
1.00 May-93 1063.830 11095.74 0.058013 10.43 956 9974 49 506 21576 6668 266 9823
1.00 Jun-93 1063.830 11308.51 0.056830 10.63 967 10283 49 516 22107 6729 266 9940
1.00 Jul-93 1063.830 11319.15 0.057983 10.64 979 10413 49 516 22248 6791 266 10061
1.00 Aug-93 1063.830 11574.47 0.056369 10.88 989 10766 49 528 22868 6851 266 10179
1.00 Sep-93 1063.830 11563.83 0.052910 10.87 1000 10867 49 527 22958 6907 266 10290
1.00 Oct-93 1063.830 11563.83 0.056424 10.87 1011 10986 49 527 23077 6967 266 10409
1.00 Nov-93 1063.830 11340.43 0.055796 10.66 1022 10892 49 517 22750 7026 266 10527
06-Dec 03-Dec 10.36 Dec-93 1063.830 11000.00 0.056256 0.14 0.17 10.34 1034 10689 112 1162 22851 7086 596 11309
1.00 Jan-94 1063.830 11117.02 0.056484 10.45 1046 10928 112 1174 23219 7146 596 11434
1.00 Feb-94 1063.830 10734.04 0.049931 10.09 1057 10662 112 1134 22530 7199 596 11545
1.00 Mar-94 1063.830 10393.62 0.051152 9.77 1068 10438 112 1098 21930 7254 596 11659
1.00 Apr-94 1063.830 10244.68 0.046927 9.63 1079 10394 112 1082 21721 7304 596 11764
1.00 May-94 1063.830 10180.85 0.051765 9.57 1092 10446 112 1075 21702 7359 596 11881
1.00 Jun-94 1063.830 10074.47 0.049326 9.47 1103 10449 112 1064 21587 7411 596 11993
1.00 Jul-94 1063.830 10244.68 0.051427 9.63 1116 10742 112 1082 22069 7466 596 12110
1.00 Aug-94 1063.830 10180.85 0.054266 9.57 1129 10800 112 1075 22056 7524 596 12235
1.00 Sep-94 1063.830 9925.53 0.052591 9.33 1141 10650 112 1048 21624 7579 596 12356
1.00 Oct-94 1063.830 9829.79 0.053705 9.24 1155 10672 112 1038 21540 7637 596 12480
1.00 Nov-94 1063.830 9765.96 0.051814 9.18 1168 10723 112 1032 21521 7692 596 12601
05-Dec 02-Dec 9.19 Dec-94 1063.830 9755.32 0.049874 0.0000 0.020 9.17 1181 10829 117 1077 21661 7745 617 12765
1.00 Jan-95 1063.830 9882.98 0.052154 9.29 1194 11094 117 1091 22068 7800 617 12888
1.00 Feb-95 1063.830 10063.83 0.046728 9.46 1206 11408 117 1111 22583 7850 617 12999
1.00 Mar-95 1063.830 10063.83 0.052518 9.46 1219 11533 117 1111 22708 7906 617 13124
1.00 Apr-95 1063.830 10138.30 0.048023 9.53 1231 11734 117 1119 22992 7957 617 13240
1.00 May-95 1063.830 10489.36 0.050064 9.86 1243 12261 117 1158 23908 8010 617 13360
1.00 Jun-95 1063.830 10510.64 0.049058 9.88 1256 12405 117 1161 24076 8062 617 13479
1.00 Jul-95 1063.830 10414.89 0.051471 9.79 1268 12417 117 1150 23982 8117 617 13605
1.00 Aug-95 1063.830 10478.72 0.052717 9.85 1281 12622 117 1157 24258 8173 617 13734
1.00 Sep-95 1063.830 10521.28 0.050746 9.89 1294 12799 117 1162 24482 8227 617 13859
</TABLE>
EXHIBIT 16(C)
SCHEDULE FOR COMPUTATION OF ADJUSTED NAVS
Adjusted NAVs are derived by dividing the fund's actual NAV by a "factor"
that adjusts the NAV for any reinvestment of dividends and capital gains,
if any, that occurred during the period. The factor typically starts at "1"
beginning at the end of the period and, going backward, increases each time
a distribution is paid. (The end of the period adjusted NAV should equal
the fund's actual NAV, barring any month-end distributions.)
ADJUSTED NET ASSET VALUE:
Following Day Dividend + Following Day Capital Gains
Current Day Factor = ---------------------------------------------- + 1
(Following Day Factor)
Following Day NAV
Where:
Following Day Factor = 1.0 until the day preceding the first distribution.
Current Day NAV
Adjusted NAV = ---------------
Current Day Factor
Government Securities
Factor Adj NAV
30-Dec-94 1.047918 8.75
02-Jan-95 1.047918 NA
03-Jan-95 1.047918 8.73
04-Jan-95 1.047918 8.76
05-Jan-95 1.047918 8.74
06-Jan-95 1.047918 8.75
09-Jan-95 1.047918 8.74
10-Jan-95 1.047918 8.75
11-Jan-95 1.047918 8.77
12-Jan-95 1.047918 8.75
13-Jan-95 1.047918 8.81
16-Jan-95 1.047918 8.81
17-Jan-95 1.047918 8.81
18-Jan-95 1.047918 8.80
19-Jan-95 1.047918 8.79
20-Jan-95 1.047918 8.75
23-Jan-95 1.047918 8.75
24-Jan-95 1.047918 8.74
25-Jan-95 1.047918 8.77
26-Jan-95 1.047918 8.79
27-Jan-95 1.047918 8.85
30-Jan-95 1.047918 8.85
31-Jan-95 1.042068 8.91
01-Feb-95 1.042068 8.89
02-Feb-95 1.042068 8.88
03-Feb-95 1.042068 8.95
06-Feb-95 1.042068 8.94
07-Feb-95 1.042068 8.94
08-Feb-95 1.042068 8.94
09-Feb-95 1.042068 8.92
10-Feb-95 1.042068 8.91
13-Feb-95 1.042068 8.91
14-Feb-95 1.042068 8.94
15-Feb-95 1.042068 8.97
16-Feb-95 1.042068 8.99
17-Feb-95 1.042068 8.98
20-Feb-95 1.042068 NA
21-Feb-95 1.042068 8.97
22-Feb-95 1.042068 9.02
23-Feb-95 1.042068 9.02
24-Feb-95 1.042068 9.03
27-Feb-95 1.042068 9.06
28-Feb-95 1.036946 9.12
01-Mar-95 1.036946 9.12
02-Mar-95 1.036946 9.09
03-Mar-95 1.036946 9.07
06-Mar-95 1.036946 9.05
07-Mar-95 1.036946 9.04
08-Mar-95 1.036946 9.07
09-Mar-95 1.036946 9.09
10-Mar-95 1.036946 9.11
13-Mar-95 1.036946 9.13
14-Mar-95 1.036946 9.17
15-Mar-95 1.036946 9.17
16-Mar-95 1.036946 9.18
17-Mar-95 1.036946 9.15
20-Mar-95 1.036946 9.15
21-Mar-95 1.036946 9.13
22-Mar-95 1.036946 9.12
23-Mar-95 1.036946 9.12
24-Mar-95 1.036946 9.16
27-Mar-95 1.036946 9.18
28-Mar-95 1.036946 9.14
29-Mar-95 1.036946 9.15
30-Mar-95 1.036946 9.13
31-Mar-95 1.031221 9.17
03-Apr-95 1.031221 9.20
04-Apr-95 1.031221 9.21
05-Apr-95 1.031221 9.21
06-Apr-95 1.031221 9.22
07-Apr-95 1.031221 9.21
10-Apr-95 1.031221 9.21
11-Apr-95 1.031221 9.22
12-Apr-95 1.031221 9.23
13-Apr-95 1.031221 9.25
14-Apr-95 1.031221 NA
17-Apr-95 1.031221 9.25
18-Apr-95 1.031221 9.25
19-Apr-95 1.031221 9.25
20-Apr-95 1.031221 9.26
21-Apr-95 1.031221 9.27
24-Apr-95 1.031221 9.27
25-Apr-95 1.031221 9.27
26-Apr-95 1.031221 9.26
27-Apr-95 1.031221 9.25
28-Apr-95 1.026051 9.29
01-May-95 1.026051 9.29
02-May-95 1.026051 9.30
03-May-95 1.026051 9.34
04-May-95 1.026051 9.39
05-May-95 1.026051 9.45
08-May-95 1.026051 9.44
09-May-95 1.026051 9.50
10-May-95 1.026051 9.47
11-May-95 1.026051 9.45
12-May-95 1.026051 9.45
15-May-95 1.026051 9.48
16-May-95 1.026051 9.51
17-May-95 1.026051 9.51
18-May-95 1.026051 9.48
19-May-95 1.026051 9.48
22-May-95 1.026051 9.47
23-May-95 1.026051 9.50
24-May-95 1.026051 9.56
25-May-95 1.026051 9.58
26-May-95 1.026051 9.57
29-May-95 1.026051 NA
30-May-95 1.026051 9.61
31-May-95 1.020867 9.66
01-Jun-95 1.020867 9.71
02-Jun-95 1.020867 9.76
05-Jun-95 1.020867 9.77
06-Jun-95 1.020867 9.76
07-Jun-95 1.020867 9.71
08-Jun-95 1.020867 9.69
09-Jun-95 1.020867 9.60
12-Jun-95 1.020867 9.62
13-Jun-95 1.020867 9.73
14-Jun-95 1.020867 9.72
15-Jun-95 1.020867 9.70
16-Jun-95 1.020867 9.69
19-Jun-95 1.020867 9.73
20-Jun-95 1.020867 9.71
21-Jun-95 1.020867 9.73
22-Jun-95 1.020867 9.77
23-Jun-95 1.020867 9.76
26-Jun-95 1.020867 9.73
27-Jun-95 1.020867 9.72
28-Jun-95 1.020867 9.74
29-Jun-95 1.020867 9.66
30-Jun-95 1.015823 9.73
03-Jul-95 1.015823 9.73
04-Jul-95 1.015823 NA
05-Jul-95 1.015823 9.76
06-Jul-95 1.015823 9.81
07-Jul-95 1.015823 9.81
10-Jul-95 1.015823 9.81
11-Jul-95 1.015823 9.79
12-Jul-95 1.015823 9.80
13-Jul-95 1.015823 9.80
14-Jul-95 1.015823 9.77
17-Jul-95 1.015823 9.73
18-Jul-95 1.015823 9.71
19-Jul-95 1.015823 9.64
20-Jul-95 1.015823 9.64
21-Jul-95 1.015823 9.59
24-Jul-95 1.015823 9.62
25-Jul-95 1.015823 9.64
26-Jul-95 1.015823 9.62
27-Jul-95 1.015823 9.65
28-Jul-95 1.015823 9.62
31-Jul-95 1.010510 9.69
01-Aug-95 1.010510 9.67
02-Aug-95 1.010510 9.70
03-Aug-95 1.010510 9.66
04-Aug-95 1.010510 9.68
07-Aug-95 1.010510 9.69
08-Aug-95 1.010510 9.69
09-Aug-95 1.010510 9.67
10-Aug-95 1.010510 9.65
11-Aug-95 1.010510 9.61
14-Aug-95 1.010510 9.61
15-Aug-95 1.010510 9.63
16-Aug-95 1.010510 9.64
17-Aug-95 1.010510 9.63
18-Aug-95 1.010510 9.63
21-Aug-95 1.010510 9.65
22-Aug-95 1.010510 9.63
23-Aug-95 1.010510 9.62
24-Aug-95 1.010510 9.67
25-Aug-95 1.010510 9.72
28-Aug-95 1.010510 9.73
29-Aug-95 1.010510 9.72
30-Aug-95 1.010510 9.73
31-Aug-95 1.005131 9.80
01-Sep-95 1.005131 9.83
04-Sep-95 1.005131 NA
05-Sep-95 1.005131 9.85
06-Sep-95 1.005131 9.85
07-Sep-95 1.005131 9.83
08-Sep-95 1.005131 9.83
11-Sep-95 1.005131 9.82
12-Sep-95 1.005131 9.86
13-Sep-95 1.005131 9.84
14-Sep-95 1.005131 9.88
15-Sep-95 1.005131 9.87
18-Sep-95 1.005131 9.84
19-Sep-95 1.005131 9.86
20-Sep-95 1.005131 9.87
21-Sep-95 1.005131 9.83
22-Sep-95 1.005131 9.81
25-Sep-95 1.005131 9.81
26-Sep-95 1.005131 9.80
27-Sep-95 1.005131 9.79
28-Sep-95 1.005131 9.79
29-Sep-95 1.000000 9.89
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000276773
<NAME> Fidelity Government Securities Fund
<SERIES>
<NUMBER> 11
<NAME> Fidelity Government Securities Fund
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> sep-30-1995
<PERIOD-END> sep-30-1995
<INVESTMENTS-AT-COST> 852,709
<INVESTMENTS-AT-VALUE> 883,135
<RECEIVABLES> 17,087
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 900,222
<PAYABLE-FOR-SECURITIES> 754
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,850
<TOTAL-LIABILITIES> 3,604
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 894,322
<SHARES-COMMON-STOCK> 90,638
<SHARES-COMMON-PRIOR> 65,783
<ACCUMULATED-NII-CURRENT> 864
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (28,994)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 30,426
<NET-ASSETS> 896,618
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 56,139
<OTHER-INCOME> 0
<EXPENSES-NET> 5,636
<NET-INVESTMENT-INCOME> 50,503
<REALIZED-GAINS-CURRENT> (5,338)
<APPREC-INCREASE-CURRENT> 61,372
<NET-CHANGE-FROM-OPS> 106,537
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 50,883
<DISTRIBUTIONS-OF-GAINS> 1,037
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 60,339
<NUMBER-OF-SHARES-REDEEMED> 39,778
<SHARES-REINVESTED> 4,294
<NET-CHANGE-IN-ASSETS> 282,993
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (20,010)
<OVERDISTRIB-NII-PRIOR> 455
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,602
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,636
<AVERAGE-NET-ASSETS> 794,003
<PER-SHARE-NAV-BEGIN> 9.330
<PER-SHARE-NII> .625
<PER-SHARE-GAIN-APPREC> .564
<PER-SHARE-DIVIDEND> .609
<PER-SHARE-DISTRIBUTIONS> .020
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.890
<EXPENSE-RATIO> 71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
