FIDELITY
(Registered trademark)
CASH RESERVES
ANNUAL REPORT
NOVEMBER 30, 1993
CONTENTS
CHECK PAGE NUMBERS !!!
PERFORMANCE 3 How the fund has done over time.
FUND TALK 5 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 7 A summary of major shifts in the
fund's investments over the last six
months and one year.
INVESTMENTS 8 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 14 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 18 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 21 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED BY
THE
FDIC.
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects both the change in a fund's share
price over a given period, and reinvestment of
its dividends (or income). Yield measures the income paid by a fund. Since
a money market fund tries to maintain
a $1 share price, yield is an important measure of performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Fidelity Cash Reserves 2.97% 33.55% 93.21%
Consumer Price Index 2.68% 21.20% 44.07%
Average All Taxable
Money Market Fund 2.71% 32.36% 89.54%
CUMULATIVE TOTAL RETURNS reflect actual performance over a specific period.
For example, if you invested $1,000 in a fund that had a 5% return over the
past year, you would end up with $1,050. Comparing the fund's performance
to the consumer price index helps show how your investment did compared to
inflation. To measure how the fund stacked up against its peers, you can
compare its return to the average taxable money market fund's total return.
This average currently reflects the performance of 635 money market funds
tracked by IBC/Donoghue's MONEY FUND REPORT.(Registered trademark)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Fidelity Cash Reserves 2.97% 5.96% 6.81%
Consumer Price Index 2.68% 3.92% 3.72%
Average All Taxable
Money Market Fund 2.71% 6.46% 6.60%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
11/30/92 2/28/93 5/31/93 8/31/93 11/30/93
Fidelity Cash Reserves 3.15% 3.01% 2.83% 2.81% 2.87%
Average All Taxable
Money Market Fund 2.77% 2.71% 2.62% 2.64% 2.69%
MMDA 2.74% 2.66% 2.49% 2.42% 2.35%
Row: 1, Col: 1, Value: 3.15
Row: 1, Col: 2, Value: 2.77
Row: 1, Col: 3, Value: 2.74
Row: 2, Col: 1, Value: 3.01
Row: 2, Col: 2, Value: 2.71
Row: 2, Col: 3, Value: 2.66
Row: 3, Col: 1, Value: 2.83
Row: 3, Col: 2, Value: 2.62
Row: 3, Col: 3, Value: 2.49
Row: 4, Col: 1, Value: 2.81
Row: 4, Col: 2, Value: 2.64
Row: 4, Col: 3, Value: 2.42
Row: 5, Col: 1, Value: 2.87
Row: 5, Col: 2, Value: 2.69
Row: 5, Col: 3, Value: 2.35
Fidelity Cash
Reserves
Average All
Taxable Money
Market Fund
MMDA
4% -
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. This
would have been lower if Fidelity had not reimbursed certain fund expenses.
This is compared to similar yields for the average all taxable money market
fund and the average bank money market deposit account (MMDA). Figures for
the average taxable money market fund are from the IBC/Donoghue's MONEY
FUND REPORT.(Registered trademark) The MMDA average is supplied by BANK
RATE MONITOR.(double dagger)
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS REFLECT PAST RESULTS RATHER
THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
(checkmark)
There are some important differences between a bank money market deposit
account (MMDA) and a money market fund. First, the U.S. government neither
insures nor guarantees a money market fund. In fact, there is no assurance
that a money fund will maintain a $1 share price. Second, a money market
fund returns to its shareholders income earned by the fund's investments
after expenses. This is in contrast to banks, which set their MMDA rates
periodically based on current interest rates, competitors' rates, and
internal criteria.
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Bob Litterst,
Portfolio Manager of Cash Reserves
Q. BOB, WHAT WAS THE SHORT-TERM MARKET LIKE THIS LAST YEAR?
A. After a fairly volatile first six months, the environment in the second
half of the year was stable and trendless. Short-term interest rates
remained pretty flat from May on; for example, yields on six-month Treasury
bills ranged between just 3.0% and 3.3%. Also, the Federal Reserve kept the
federal funds rate at 3%, where it's been since September 1992. So far, the
economy has grown at a moderate pace that appears to be sustainable. That,
combined with low inflation, is exactly what the Fed likes. That said, the
fund's yield closely tracked short-term interest rates; and a very stable
rate environment meant there weren't too many opportunities to take
advantage of moving rates.
Q. GIVEN THOSE CONFINES, HOW DID YOU POSITION THE FUND IN THE LAST SIX
MONTHS?
A. Over the summer, it became clear that yield spreads were tightening -
meaning there was less difference between the yields of corporate and
Treasury issues with similar maturities. When yields on corporates fell
relative to Treasuries, they were no longer as attractive when weighed
against their higher risk. So, I increased the percentage of the fund in
Treasury and government agency debt - from about 17% at the end of May, to
about 25% by the beginning of November. The fund's emphasis on government
securities might have caused a slight reduction in yield, but I felt the
small yield loss was offset by far greater quality and liquidity. As for
the fund's average maturity, I kept it within a range of 60 to 80 days
through most of the last six months. That way I was ready to go shorter if
interest rates started to rise, but still benefited from higher rates on
securities with longer maturities.
Q. WHAT WAS THE RESULT?
A. The fund's seven-day yield on November 30, 1993 was 2.87%, compared to
2.83% at the end of May. For the year ended November 30, the fund had a
total return of 2.97%. That beat the 2.71% average total return for all
taxable money market funds tracked by IBC/Donoghue.
Q. WHAT'S YOUR OUTLOOK?
A. I believe the economy is showing stable upward momentum that is
sustainable, driven primarily by labor market gains and low long-term
interest rates. However, there are still many factors keeping economic
growth in check - corporate downsizing, higher taxes and uncertainty over
health care among them. I think the next significant move in short-term
interest rates will be up. The Fed could trigger a rise in short-term rates
by raising the federal funds rate if it perceives inflation is no longer
falling. But inflationary pressures appear quite tame; if the Fed acts at
all, I think it'll be a gentle nudge.
Q. SO HOW HAVE YOU PREPARED THE FUND FOR A POSSIBLE RISE IN RATES?
A. One way is by purchasing variable and floating rate instruments, now 22%
of the fund. These issues are higher yielding because they have longer
final maturities. But what makes them unique is a feature that resets their
coupons (stated interest rates) at fixed intervals - for example, weekly,
monthly or quarterly. When rates are rising, the fund can get a higher
coupon on these issues at their reset intervals. Also, I plan on keeping
the fund's average maturity in a neutral range - 60-75 days - to allow for
flexibility if rates do start creeping up.
FUND FACTS
GOAL: income and share price
stability by investing in high
quality, short-term investments
START DATE: May 10, 1979
SIZE: as of November 30,
1993, over $10.3 billion
MANAGER: Robert Litterst,
since January 1992; manager,
Capital
Reserves Money Market,
Fidelity VIP: Money Market
Portfolio, and Fidelity Money
Market Trust:
Retirement Money Market,
since January 1992
(checkmark)
WORDS TO KNOW
BANKERS' ACCEPTANCE (BA): A
short-term note whose
payment is guaranteed by a
bank.
CERTIFICATE OF DEPOSIT (CD): An
interest-bearing deposit with a
specific maturity. Large
denomination CDs, like the
fund buys, have negotiable
interest rates and can be sold
in the secondary market.
COMMERCIAL PAPER: A
short-term note from a bank or
corporation.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity,
weighted by dollar amount, is
short, the fund manager is
expecting rates to fall. When
the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
TIME DEPOSIT (TD): An
interest-bearing deposit with a
specific maturity. Large
denomination TDs, like the
fund buys, differ from CDs in
that they can't be sold in the
secondary market.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/93 5/31/93 11/30/92
0 - 30 28 38 32
31 - 90 46 28 29
91 - 180 18 25 32
181 - 397 8 9 7
WEIGHTED AVERAGE MATURITY
11/30/93 5/31/93 11/30/92
Fidelity Cash Reserves 79 days 73 days 82 days
Average All Taxable Money
Market Fund* 59 days 64 days 62 days
ASSET ALLOCATION
AS OF 11/30/93 AS OF 5/31/93
Row: 1, Col: 1, Value: 28.0
Row: 1, Col: 2, Value: 34.0
Row: 1, Col: 3, Value: 22.0
Row: 1, Col: 4, Value: 16.0
Row: 1, Col: 1, Value: 41.0
Row: 1, Col: 2, Value: 34.0
Row: 1, Col: 3, Value: 17.0
Row: 1, Col: 4, Value: 8.0
Bank CDs, BAs,
TDs, and notes 28%
Commercial
paper 34%
Government
securities 22%
Other 16%
Bank CDs, BAs,
TDs, and notes 41%
Commercial
paper 34%
Government
securities 17%
Other 8%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
INVESTMENTS NOVEMBER 30, 1993
Showing Percentage of Total Value of Investments
CERTIFICATES OF DEPOSIT - 20.8%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 17.6%
Bank of Tokyo
2/11/94 3.44% $ 40,000 $ 40,000 0659932T
Fuji Bank, Ltd.
1/21/94 3.43 50,000 50,000 35999DGS
1/28/94 3.46 50,000 50,000 35999DGU
1/31/94 3.45 80,000 80,000 35999DGT
1/31/94 3.46 45,000 45,000 35999DGX
2/7/94 3.43 50,000 50,000 35999DGW
Industrial Bank of Japan, Ltd.
1/20/94 3.44 160,000 160,000 4559905P
2/22/94 3.44 25,000 25,000 4559905S
Mitsubishi Bank, Ltd.
12/6/93 3.19 50,000 50,000 610998TV
1/31/94 3.43 25,000 24,999 610998TT
2/28/94 3.33 75,000 75,001 610998TW
Sakura Bank, Ltd.
2/1/94 3.45 50,000 50,000 793999HX
Sanwa Bank, Ltd.
2/14/94 3.44 50,000 49,995 804999LN
Skandinaviska Enskilda Banken
2/17/94 3.39 80,000 80,000 880992FY
Societe Generale
4/25/94 3.43 385,000 385,000 833991SK
Sumitomo Bank, Ltd.
1/31/94 3.45 25,000 25,004 86699EAT
2/24/94 3.45 60,000 60,000 86699EBL
Sweden, Kingdom of (a)
12/23/93 3.19 430,000 430,000 998999AV
Swedish National Housing Finance Corp. (a)
2/23/94 3.53 97,000 97,000 956995AM
1,826,999
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 3.2%
Banco Bilbao Vizcaya, S.A.
1/10/94 3.44 30,000 29,996 05999MBA
1/18/94 3.44 10,000 9,999 05999MBB
Mitsubishi Bank, Ltd.
2/28/94 3.41 50,000 49,999 610998UE
Sumitomo Bank, Ltd.
1/18/94 3.42 50,000 50,000 86699EAQ
1/18/94 3.43 75,000 75,001 86699EAN
1/19/94 3.45 25,000 25,000 86699EAS
1/26/94 3.49 25,000 24,999 86699EBN
3/7/94 3.35 20,000 19,996 86699EBA
4/27/94 3.43 25,000 24,994 86699EBF
5/24/94 3.50 25,000 25,000 86699EBM
334,984
TOTAL CERTIFICATES OF DEPOSIT 2,161,983
COMMERCIAL PAPER - 33.7%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
ABN-AMRO North America, N.V.
12/6/93 3.22% $ 75,000 $ 74,967 03299BAK
Associates Corporation of North America
3/9/94 3.38 25,000 24,772 045992TX
Bankers Trust Corporation
2/16/94 3.37 200,000 198,584 06699FAQ
Bell Atlantic Financial Services
2/15/94 3.43 40,000 39,713 077994AF
2/22/94 3.43 34,000 33,733 077994AJ
2/25/94 3.43 40,000 39,675 077994AM
CIT Group Holdings, Inc.
1/12/94 3.33 30,000 29,886 172990NT
3/29/94 3.59 56,000 55,358 172990PH
3/30/94 3.59 60,000 59,306 172990PJ
Commercial Credit Company
2/14/94 3.40 30,000 29,789 2019904W
CoreStates Capital Corp. (a)
5/16/94 3.16 25,000 25,000 2186939E
Credit Lyonnais North America
12/6/93 3.23 50,000 49,978 225995TX
Dean Witter, Discover & Co.
12/6/93 3.16 20,000 19,991 24240V9P
12/6/93 3.17 25,000 24,989 24240V9N
Den Danske Corporation, Inc.
3/1/94 3.42 30,000 29,746 250998EA
Ford Motor Credit Corporation
3/2/94 3.28 40,000 39,672 34599BNM
3/14/94 3.26 110,000 108,987 34599BNA
General Electric Capital Corporation
2/23/94 3.36 50,000 49,615 369998JP
2/24/94 3.36 50,000 49,610 369998JQ
General Electric Financial Services Inc.
4/6/94 3.27 13,000 12,854 36999BBA
General Motors Acceptance Corporation
1/10/94 3.51 100,000 99,614 638998NP
1/12/94 3.51 172,000 171,303 638998NR
2/14/94 3.55 31,000 30,772 638998NV
2/15/94 3.45 100,000 99,282 638998ND
3/9/94 3.45 105,000 104,028 638998MY
Generale Bank
12/1/93 3.38 15,000 15,000 371995BT
12/10/93 3.38 20,000 19,983 371995BU
Goldman Sachs Group, L.P. (The)
3/11/94 3.40 85,000 84,205 696992KA
Goldman Sachs Group, L.P. (The) (a)
6/16/94 3.17 95,000 95,000 696992JE
Hanson Finance (UK) PLC
3/7/94 3.38 75,000 74,330 41199AAK
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Household Finance Corporation
12/6/93 3.23% $ 30,000 $ 29,987 44199DGS
12/7/93 3.22 60,000 59,968 44199DGQ
12/8/93 3.24 44,000 43,972 44199DHE
12/20/93 3.21 20,000 19,966 44199DHH
IBM Credit Corporation
2/4/94 3.42 25,000 24,847 449991AF
Kingdom of Denmark
2/10/94 3.38 295,000 293,063 249998BA
2/16/94 3.39 40,000 39,715 249998BB
Leeds Permanent Building Society
1/31/94 3.46 48,600 48,320 524992FU
Merrill Lynch & Co., Inc. (a)
2/28/94 3.14 75,000 75,000 59099A7J
Morgan Stanley Group, Inc.
2/22/94 3.42 115,000 114,101 61799EHP
2/28/94 3.38 115,000 114,048 61799EHT
National & Provincial Building Society
12/29/93 3.35 25,000 24,936 905998CW
Nationwide Anglia Building Society
1/18/94 3.31 5,000 4,978 638993GU
1/18/94 3.35 35,000 34,845 638993GT
New Center Asset Trust
12/6/93 3.16 160,000 159,930 643995AM
1/18/94 3.28 70,000 69,697 643995AF
2/3/94 3.40 25,000 24,850 643995AP
3/1/94 3.41 50,000 49,578 643995AQ
New South Wales Treasury Corp.
2/23/94 3.43 40,000 39,683 648992AF
Nordbanken North America, Inc.
1/18/94 3.44 75,000 74,658 684999BX
Norwest Corporation
3/23/94 3.38 25,000 24,739 66899CBP
NYNEX Corporation
2/14/94 3.40 38,000 37,733 6707689V
Sears Credit Corp. A
1/26/94 3.47 50,000 49,732 81299FAP
Sears Roebuck Acceptance Corp.
1/28/94 3.54 50,000 49,716 81299EBY
1/31/94 3.55 50,000 49,702 81299EBW
SPINTAB, AB
2/22/94 3.43 40,000 39,686 848992AR
Sweden, Kingdom of
12/6/93 3.20 15,000 14,993 998999BA
Woolworth Corporation
12/1/93 3.21 50,000 50,000 980991CM
12/2/93 3.21 50,000 49,996 980991CP
TOTAL COMMERCIAL PAPER 3,502,181
FEDERAL AGENCIES - 15.1%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FEDERAL FARM CREDIT BANK - DISCOUNT NOTES - 0.4%
2/4/94 3.21% $ 28,910 $ 28,744 313993LP
2/8/94 3.18 15,000 14,909 313993KR
43,653
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 6.3%
2/3/94 3.20 174,800 173,812 567995ES
2/3/94 3.21 64,000 63,637 567995EK
2/4/94 3.21 15,000 14,914 567995FJ
2/9/94 3.21 70,000 69,566 567995FM
2/15/94 3.21 125,000 124,158 567995FP
2/18/94 3.21 78,700 78,149 567995FN
2/23/94 3.20 135,000 134,001 567995DL
658,237
FEDERAL NATIONAL MORTGAGE ASSOCIATION - DISCOUNT NOTES - 8.4%
12/8/93 3.38 50,000 49,968 31365A9U
12/10/93 3.38 125,000 124,896 31365A9V
12/10/93 3.39 40,000 39,967 31365A9T
2/1/94 3.20 31,815 31,641 9931162C
2/7/94 3.33 200,000 198,764 31365H9G
5/12/94 3.35 80,000 78,812 9931162H
5/17/94 3.25 150,000 147,780 9931148B
7/18/94 3.47 110,000 107,625 9931165W
7/18/94 3.48 100,000 97,837 9931164P
877,290
TOTAL FEDERAL AGENCIES 1,579,180
U.S. TREASURY OBLIGATIONS - 7.3%
U.S. TREASURY BILLS - 7.3%
2/3/94 3.30 405,000 402,660 99399HWH
5/26/94 3.35 265,000 260,725 99399H5F
6/2/94 3.35 100,000 98,332 99399H5F
TOTAL U.S. TREASURY OBLIGATIONS 761,717
BANK NOTES - 0.2%
Old Kent Bank & Trust Company
5/2/94 3.50 25,000 24,997 679999CH
MEDIUM-TERM NOTES (A) - 7.0%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Abbey National PLC, UK
6/24/94 3.24% $ 45,000 $ 45,000 007994GK
Abbey National Treasury Service
9/30/94 3.19 435,000 435,000 010998AJ
Beneficial Corporation
2/14/94 3.22 37,000 36,994 08172L9B
Goldman Sachs Group, L.P. (The)
9/1/94 3.50 94,000 94,000 696992KB
Norwest Corporation
3/15/94 3.18 114,000 114,000 66899CBK
TOTAL MEDIUM-TERM NOTES 724,994
SHORT-TERM NOTES (A) - 8.1%
CSA Funding Inc. (A)
12/7/93 3.44 22,000 22,000 129993AC
CSA Funding Inc. (B)
12/7/93 3.42 22,000 22,000 129993AD
CSA Funding Inc. (C)
12/7/93 3.42 6,000 6,000 129993AE
J.P. Morgan Securities
4/19/94 3.46 111,000 111,000 616998AW
5/23/94 3.44 185,000 185,000 616998EC
Norwest Corporation
8/1/94 3.16 78,000 78,000 66899CBL
SMM Trust Company (1993-A) (b)
12/20/93 3.24 278,000 278,000 7845689P
SMM Trust Company (1993-D) (b)
1/28/94 3.49 79,000 79,000 7845689S
SMM Trust Company (1993-E) (b)
1/13/94 3.42 61,000 61,000 7845689Q
TOTAL SHORT-TERM NOTES 842,000
FOREIGN GOVERNMENT OBLIGATIONS (UNITED STATES DOLLARS) - 1.4%
Canadian Treasury Bills
5/25/94 3.42 100,000 98,366 136992SR
5/26/94 3.42 45,000 44,261 136992SS
TOTAL FOREIGN GOVERNMENT OBLIGATIONS 142,627
MUNICIPAL BONDS - 0.4%
New York Public Housing Authority
12/9/93 3.13 40,000 40,000 6497299L
REPURCHASE AGREEMENTS - 6.0%
MATURITY AMOUNT VALUE (NOTE 1)
(000'S) (000'S)
WITH KIDDER PEABODY & CO., INC.
At 3.15%, dated 11/16/93 due 12/7/93:
U.S. Treasury Obligations
(principal amount $100,495)
5.083% to 5.931%, 10/1/20 to 2/1/23 $ 100,184 $ 100,000
49399DQEIn a joint trading account
(U.S. Treasury Obligations)
dated 11/30/93, due 12/1/93
(Note 2)
At 3.24% 278,744 278,719
99799MGN At 3.34% 245,756 245,733 99799MGM
TOTAL REPURCHASE AGREEMENTS $ 624,452
TOTAL INVESTMENTS - 100% $ 10,404,131
Total Cost for Income Tax Purposes $ 10,404,131
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST (000'S)
SMM Trust
Company:
(1993-A) 9/20/93 $ 278,000
(1993-D) 10/28/93 $ 79,000
(1993-E) 10/13/93 $ 61,000
CAPITAL LOSS CARRYFORWARDS
At November 30, 1993, the fund had a capital loss carryforward of
approximately $1,196,000 which will expire on November 30, 2001.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1993
1.ASSETS 2. 3.
4.Investment in securities, at value (including 5. $ 10,404,131
repurchase agreements of $624,452) (Notes 1 and 2)
- - See accompanying schedule
6.Cash 7. 34,374
8.Receivable for investments sold 9. 121,307
10.Interest receivable 11. 15,834
12. 13.TOTAL ASSETS 14. 10,575,646
15.LIABILITIES 16. 17.
18.Payable for investments purchased $ 257,344 19.
20.Dividends payable 383 21.
22.Accrued management fee 1,095 23.
24.Other payables and accrued expenses 2,885 25.
26. 27.TOTAL LIABILITIES 28. 261,707
29.30.NET ASSETS 31. $ 10,313,939
32.Net Assets consist of: 33. 34.
35.Paid in capital 36. $ 10,313,906
37.Accumulated net realized gain (loss) on investments 38. 33
39.40.NET ASSETS, for 10,313,906 shares outstanding 41. $ 10,313,939
42.43.NET ASSET VALUE, offering price and redemption 44. $1.00
price per share ($10,313,939 (divided by) 10,313,906 shares)
</TABLE>
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1993
45.46.INTEREST INCOME 47. $ 331,276
48.EXPENSES 49. 50.
51.Management fee (Note 3) $ 13,258 52.
53.Transfer agent fees (Note 3) 31,208 54.
55.Accounting fees and expenses (Note 3) 751 56.
57.Non-interested trustees' compensation 66 58.
59.Custodian fees and expenses 287 60.
61.Registration fees 273 62.
63.Reports to shareholders (Note 4) 872 64.
65.Audit 92 66.
67.Legal 125 68.
69.Miscellaneous 343 70.
71. 72.Total expenses before expense reductions 47,275
73. 74.Expense reductions (Note 4) (872) 46,403
75.76.NET INTEREST INCOME 77. 284,873
78.79.NET REALIZED GAIN (LOSS) ON INVESTMENTS 80. (1,196)
(NOTE 1)
81.82.NET INCREASE IN NET ASSETS RESULTING FROM 83. $ 283,677
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEARS ENDED NOVEMBER 30,
1993 1992
84.INCREASE (DECREASE) IN NET ASSETS
85.Operations $ 284,873 $ 395,276
Net interest income
86. Net realized gain (loss) on investments (1,196) 499
87. 88.NET INCREASE (DECREASE) IN NET ASSETS 283,677 395,775
RESULTING
FROM OPERATIONS
89.Dividends to shareholders from net interest income (284,873) (395,276)
90.Share transactions at net asset value of $1.00 per 17,583,679 13,542,927
share
Proceeds from sales of shares
91. Reinvestment of dividends from net interest income 276,200 380,235
92. Cost of shares redeemed (17,584,689) (14,402,740)
93. Net increase (decrease) in net assets and shares 275,190 (479,578)
resulting from share transactions
94. 95.TOTAL INCREASE (DECREASE) IN NET ASSETS 273,994 (479,079)
96.NET ASSETS 97. 98.
99. Beginning of period 10,039,945 10,519,024
100. End of period $ 10,313,939 $ 10,039,945
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
101. YEARS ENDED NOVEMBER 30,
102. 1993 1992 1991 1990 1989
103.SELECTED PER-SHARE DATA
104.Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value, beginning
of period
105.Income from .029 .038 .061 .076 .086
Investment
Operations
Net interest
income
106. Dividends (.029) (.038) (.061) (.076) (.086)
from net interest
income
107.Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value,
end of period
108.TOTAL RETURN 2.97 3.90 6.23 7.87 8.94
% % % % %
109.RATIOS AND SUPPLEMENTAL
DATA
110.Net assets, $ 10,314 $ 10,040 $ 10,519 $ 10,921 $ 10,897
end of period
(in millions)
111.Ratio of .48 .48 .58 .69 .74
expenses % % % % %
to average net
assets (dagger)
112.Ratio of net 2.92 3.86 6.03 7.62 8.60
interest income to % % % % %
average net
assets
</TABLE>
(dagger) SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1993
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Cash Reserves (the fund) is a fund of Fidelity Phillips Street
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company. At a
special meeting of the shareholders of the fund held on December 16, 1992,
shareholders approved an Agreement and Plan of Conversion and Termination
(the Plan of Conversion), providing for the conversion of the fund from a
separate series of a Massachusetts business trust, to a separate series of
a Delaware business trust, effective January 24, 1993. The individual
investment objective, policies and limitations of the fund remain the same.
The following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the Act, and certain
conditions therein, securities are valued initially at cost and thereafter
assume a constant amortization to maturity of any discount or premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year.
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense,
2. OPERATING POLICIES -
CONTINUED
RESTRICTED SECURITIES - CONTINUED
and prompt sale at an acceptable price may be difficult. At the end of the
period, restricted securities (excluding 144A issues) amounted to
$418,000,000 or 4.05% of net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee computed daily and paid monthly, based on the fund's gross income at
the rate of 4% of the gross income equivalent to an annualized yield of 5%
or less, and at the rate of 6% of the gross income in excess of an
annualized yield of 5%. For this purpose, gross income includes interest
accrued or discount earned (including both original issue and market
discount) less amortization of premium. The amount of management fee paid
is limited to a weighted average of a graduated series of annual limitation
rates ranging from .50% of the fund's average net assets up to $1.5 billion
to .40% of the fund's average net assets in excess of $6 billion. For the
period, the management fee was equivalent to an annual rate of .14% of
average net assets.
On November 17, 1993, the shareholders of the fund voted to approve a
proposal to amend the management contract (see Note 4). The new management
fee will be composed of a basic fund fee rate of .03% of the fund's average
net assets, plus a fixed income group fee that varies depending on FMR's
total assets under management, and an income based fee. The income based
fee is added only when the fund's yield exceeds 5%. At that time the fee
would equal 6% of that portion of the fund's gross income that represents a
gross yield of more than 5% per year. The maximum income-based component is
0.24% (annualized) of average net assets.
In connection with the Plan of Conversion, a new Management Contract, new
Sub-Advisory Agreement, and new Distribution and Service Plan identical to
those previously in effect became effective on January 24, 1993.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the fee
for any payments by FMR pursuant to the fund's Distribution and Service
Plan.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
fund's transfer, dividend disbursing and shareholder servicing agent. FSC
receives fees based on the type, size, number of accounts and the number of
transactions made by shareholders. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
4. EXPENSE REDUCTION.
A special meeting of shareholders of the fund was held on November 17,
1993. All expenses in connection with this meeting including the
preparation of the proxy statement, its enclosures and all solicitations
were reimbursed by FMR.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders
of Fidelity Cash Reserves:
We have audited the accompanying statement of assets and liabilities of
Fidelity Cash Reserves including the schedule of portfolio investments, as
of November 30, 1993, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of
the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1993 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Cash Reserves as of November 30, 1993, the results of its
operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND
Dallas, Texas
December 23, 1993
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road, South
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8300 Boone Boulevard
Vienna, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Thomas D. Maher, Assistant
Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
FIDELITY'S TAXABLE
MONEY MARKET FUNDS
Fidelity Cash Reserves
Fidelity Daily Income Trust
Fidelity U.S. Government Reserves
Spartan(Registered trademark) Money Market Fund
Spartan U.S. Government
Money Market Fund
Spartan U.S. Treasury
Money Market Fund
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
