FIDELITY
CASH RESERVES
ANNUAL REPORT
NOVEMBER 30, 1998
(FIDELITY_LOGO_GRAPHIC)(REGISTERED TRADEMARK)
FIDELITY
CASH RESERVES
ANNUAL REPORT
NOVEMBER 30, 1998
(FIDELITY_LOGO_GRAPHIC)(REGISTERED TRADEMARK)
FIDELITY
CASH RESERVES
ANNUAL REPORT
NOVEMBER 30, 1998
(FIDELITY_LOGO_GRAPHIC)(REGISTERED TRADEMARK)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of major shifts in the fund's
investments over the past six months
and one year.
INVESTMENTS 9 A complete list of the fund's investments.
FINANCIAL STATEMENTS 23 Statements of assets and liabilities,
operations, and changes in net assets,
as well as financial highlights.
NOTES 27 Notes to the financial statements.
REPORT OF INDEPENDENT 30 The auditors' opinion.
ACCOUNTANTS
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT
AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888
FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND
MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. You should also keep money you'll need in the near future in a
more stable investment.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend 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, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY CASH RESERVES 5.34% 27.89% 70.80%
All Taxable Money Market Funds Average 5.09% 26.67% 67.53%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the all taxable money market funds
average which reflects the performance of taxable money market funds
with similar objectives tracked by IBC Financial Data, Inc. The past
one year average represents a peer group of 894 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY CASH RESERVES 5.34% 5.04% 5.50%
All Taxable Money Market Funds Average 5.09% 4.85% 5.34%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
12/1/98 9/1/98 6/2/98 3/3/98 12/2/97
Fidelity Cash Reserves 4.92% 5.23% 5.21% 5.28% 5.31%
All Taxable Money Market 4.57% 5.03% 5.02% 5.07% 5.09%
Funds Average
12/2/98 9/2/98 6/3/98 2/25/98 12/3/97
MMDA 2.32% 2.55% 2.51% 2.58% 2.62%
Row: 1, Col: 1, Value: 4.92
Row: 1, Col: 2, Value: 4.57
Row: 1, Col: 3, Value: 2.32
Row: 2, Col: 1, Value: 5.23
Row: 2, Col: 2, Value: 5.03
Row: 2, Col: 3, Value: 2.55
Row: 3, Col: 1, Value: 5.21
Row: 3, Col: 2, Value: 5.02
Row: 3, Col: 3, Value: 2.51
Row: 4, Col: 1, Value: 5.28
Row: 4, Col: 2, Value: 5.07
Row: 4, Col: 3, Value: 2.58
Row: 5, Col: 1, Value: 5.31
Row: 5, Col: 2, Value: 5.09
Row: 5, Col: 3, Value: 2.62
Fidelity Cash
Reserves
All Taxable Money
Market Funds
Average
MMDA
6% -
5% -
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. You can compare these yields to the all
taxable money market funds average and the bank money market deposit
account (MMDA) average. Figures for the all taxable money market funds
average are from IBC Financial Data, Inc. The MMDA average is supplied
by BANK RATE MONITOR(trademark).
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
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
market 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.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with John Todd, Portfolio Manager of Fidelity Cash
Reserves
Q. JOHN, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE FUND'S
FISCAL YEAR THAT ENDED NOVEMBER 30, 1998?
A. Despite being buoyed by continued strong domestic consumption, real
GDP - gross domestic product adjusted for inflation - slowed to a 1.8%
annual rate in the second quarter of 1998 from 5.5% in the first
quarter, in part because of the Asian economic crisis' negative
influence on trade and inventories. While growth re-accelerated to
3.9% in the third quarter of 1998, the slowdown in the second quarter
caused a shift in market sentiment; most market observers revised
downward their expectations for economic growth and corporate profit
projections for the next several quarters. This factor, combined with
Russia's mid-August currency devaluations and default on its
short-term debt, sparked declines in stock market indexes that had
reached record highs earlier in the third quarter, and caused the
yield differential between U.S. Treasuries and all other debt
obligations to widen considerably. In addition, falling commodity
prices hurt Canada - one of the main trading partners of the U.S. -
forcing that country's central bank to raise interest rates to keep
its currency from continuing to drop in value. We saw similar currency
drops and interest-rate hikes in Latin America, where the U.S. also
trades a great deal. Fears arose that this "Asian contagion" would
start to erode U.S. economic growth and lead to further problems in
both the economy and the capital markets, which were rocked by the
well-publicized problems encountered by several highly leveraged hedge
funds.
Q. HOW DID THIS BACKDROP AFFECT MONETARY POLICY?
A. Up until mid-July, it was commonly believed that the Federal
Reserve Board might raise the rate banks charge each other for
overnight loans - the fed funds rate - to slow economic growth and
keep inflation under control. The Fed maintained a bias toward raising
rates until its September meeting, when it cut the fed funds rate by
0.25 percentage points to 5.25%. Explaining that it was trying to head
off slower growth in the future, the Fed's cut came amid further
deterioration in the financial markets generally and growing problems
with liquidity in the fixed-income markets specifically. Three weeks
later on October 15, the Fed - acting out of character by making an
announcement between meetings of its Open Market Committee - cut
short-term interest rates an additional one-quarter percentage point
to 5.00%. Then, on November 17, the Fed further reduced the fed funds
rate by another 0.25 percentage points to 4.75%, marking the third
reduction in that rate in just seven weeks. These moves came in
response to a continued deterioration in the fixed-income markets, and
was an attempt on the Fed's part to try to avoid a "credit crunch" -
where lenders hold back from lending to even the most creditworthy
borrowers.
Q. WHAT STRATEGY DID YOU PURSUE WITH THE FUND?
A. Throughout the period, I kept the fund's average maturity longer
than the average of its peers. In the beginning of the period, the
best opportunities were found on either end of the maturity spectrum,
so I pursued a barbell strategy - focusing on investments with very
short maturities on the one hand and one-year securities on the other.
When the economic outlook started to deteriorate and called for
declining interest rates, I looked for opportunities to maintain the
fund's average maturity, shifting investments from very-short-term and
one-year securities to those in the three- to six-month range. Those
maturities offered the most attractive rates and were also appealing
from a credit standpoint, given the growing uncertainty in the market
about different issuers' exposure to hedge fund-related problems.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1998, was 4.92% compared
to 5.30% 12 months ago. For the 12 months that ended November 30,
1998, the fund had a total return of 5.34%, compared to 5.09% for the
all taxable money market funds average, according to IBC Financial
Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. An announcement from the Fed suggesting it was done cutting
interest rates for the near future accompanied its latest
interest-rate cut in November. Barring another unraveling of the
markets, I believe the Fed is likely to keep interest rates unchanged
until at least the first quarter of 1999, when we'll see more easily
the influence of the rate cuts it already has implemented. The Fed
wants to make sure it doesn't overstimulate the economy to the point
where inflationary pressures build, especially since interest rates
were recently cut unexpectedly in Europe. It looks as if the Fed will
be comfortable standing pat over the near term.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
GOAL: income and a stable
$1 share price by investing in
high-quality, short-term money
market securities of all types
FUND NUMBER: 055
TRADING SYMBOL: FDRXX
START DATE: May 10, 1979
SIZE: as of November 30,
1998, more than $30.7 billion
MANAGER: John Todd, since
1997; manager, several
Fidelity and Spartan taxable
money market funds; joined
Fidelity in 1981
(checkmark)
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND'S % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS INVESTMENTS
11/30/98 5/31/98 11/30/97
0 - 30 33 47 44
31 - 90 33 30 29
91 - 180 30 15 18
181 - 397 4 8 9
WEIGHTED AVERAGE MATURITY
11/30/98 5/31/98 11/30/97
Fidelity Cash Reserves 70 Days 65 Days 69 Days
All Taxable 59 Days 56 Days 55 Days
Money Market Funds Average*
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1998 AS OF MAY 31, 1998
ROW: 1, COL: 1, VALUE: 60.0
ROW: 1, COL: 2, VALUE: 39.0
ROW: 1, COL: 3, VALUE: 1.0
BANK CDS, BAS,
TDS, AND NOTES 56%
COMMERCIAL PAPER 43%
GOVERNMENT
SECURITIES 1%
BANK CDS, BAS,
TDS, AND NOTES 60%
COMMERCIAL PAPER 39%
GOVERNMENT
SECURITIES 1%
ROW: 1, COL: 1, VALUE: 56.0
ROW: 1, COL: 2, VALUE: 43.0
ROW: 1, COL: 3, VALUE: 1.0
INVESTMENTS NOVEMBER 30, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
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CERTIFICATES OF DEPOSIT - 43.8%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
DOMESTIC CERTIFICATES OF DEPOSIT - 6.4%
Bank of America National Trust & Savings Association
3/24/99 5.34% $ 200,000 $ 200,000
Chase Manhattan Bank
3/22/99 4.95 310,000 310,000
Chase Manhattan Bank (USA)
2/22/99 5.00 40,000 40,000
3/2/99 5.50 360,000 360,000
CoreStates Bank NA, Philadelphia
12/9/98 5.23 (b) 15,000 15,000
First Union National Bank of North Carolina
3/9/99 5.42 220,000 220,000
4/12/99 5.44 145,000 145,000
Fleet National Bank
2/3/99 5.31 (b) 122,000 121,938
Mellon Bank NA, Pittsburgh
2/17/99 5.00 20,000 20,000
Morgan Guaranty Trust Co., NY
12/9/98 5.29 75,000 75,000
12/14/98 5.29 320,000 320,000
3/22/99 4.95 149,000 149,000
1,975,938
LONDON BRANCH, EURODOLLAR, DOMESTIC BANKS - 0.9%
NationsBank NA
2/16/99 5.60 120,000 120,000
3/2/99 5.50 170,000 170,000
290,000
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 12.7%
Abbey National Treasury Services PLC
12/3/98 5.50 75,000 75,000
12/10/98 5.50 266,000 266,001
12/23/98 5.62 225,000 225,000
12/28/98 5.43 195,000 195,000
12/29/98 5.62 150,000 150,000
3/15/99 5.15 450,000 449,993
ABN-AMRO Bank NV
12/22/98 5.12 100,000 100,000
Bank of Scotland Treasury Services
12/29/98 5.62 135,000 135,000
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - CONTINUED
Bank of Scotland Treasury Services - continued
2/22/99 5.03% $ 70,000 $ 70,002
Banque Nationale de Paris
5/4/99 5.05 20,000 19,997
Barclays Bank PLC
12/14/98 5.28 112,000 112,000
12/17/98 5.60 150,000 150,000
12/29/98 5.64 300,000 300,000
Bayerische Hypo-und Vereinsbank AG
12/18/98 5.26 56,000 56,000
12/29/98 5.62 100,000 100,001
3/23/99 5.09 200,000 200,003
4/26/99 5.06 90,000 90,004
Commerzbank AG
12/2/98 5.41 47,000 47,000
12/31/98 5.13 150,000 150,001
Deutsche Bank AG
12/11/98 5.41 200,000 200,002
Halifax PLC
12/1/98 5.19 65,000 65,000
12/11/98 5.41 100,000 100,002
2/16/99 5.60 145,000 145,009
Norddeutsche Landesbank Girozentrale
12/2/98 5.51 70,000 70,000
RaboBank Nederland Coop. Central
4/12/99 5.05 135,000 135,000
Svenska Handelsbanken
12/17/98 5.41 110,000 110,000
12/29/98 5.13 140,000 140,001
2/8/99 5.39 55,000 55,001
Westpac Banking Corp.
12/14/98 5.30 25,000 25,000
3,936,017
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 23.8%
ABN-AMRO Bank NV
6/7/99 5.76 15,000 14,996
Banque Nationale de Paris
12/14/98 5.41 50,000 50,000
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - CONTINUED
Banque Nationale de Paris - continued
2/4/99 5.20% $ 35,000 $ 35,000
2/5/99 5.45 56,000 55,990
3/1/99 5.47 20,000 20,003
5/4/99 5.01 50,000 50,000
Bayerische Hypo-und Vereinsbank AG
12/10/98 5.47 185,000 185,000
2/26/99 5.70 200,000 199,977
3/10/99 5.40 185,000 185,000
Bayerische Hypotheken-und Wechselbank AG
4/1/99 5.50 50,000 50,018
Bayerische Landesbank Girozentrale
12/1/98 5.56 200,000 200,000
Canadian Imperial Bank of Commerce
12/1/98 5.54 165,000 165,000
12/2/98 5.26 20,000 20,000
12/7/98 5.26 30,000 30,000
2/3/99 5.27 100,000 100,000
2/4/99 5.27 125,000 125,000
3/2/99 5.70 145,000 144,977
3/30/99 5.46 20,000 20,006
4/1/99 5.50 75,000 75,028
4/5/99 5.09 220,000 220,000
Commerzbank AG
3/11/99 5.18 25,000 25,013
5/4/99 5.01 225,000 225,000
5/10/99 5.13 150,000 150,000
Credit Agricole Indosuez
2/26/99 5.70 10,000 9,999
4/28/99 5.81 190,000 189,970
4/30/99 5.87 150,000 149,965
Credit Communale de Belgique
12/21/98 5.62 100,000 100,000
2/3/99 5.64 110,000 110,000
Den Danske Bank Group AS
2/9/99 5.30 45,000 45,001
Deutsche Bank AG
2/5/99 5.25 100,000 100,000
2/10/99 5.60 75,000 74,993
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - CONTINUED
Deutsche Bank AG - continued
2/11/99 5.60% $ 65,000 $ 65,000
3/5/99 5.75 240,000 239,967
5/6/99 5.04 100,000 100,000
Dresdner Bank AG
2/16/99 5.34 200,000 200,000
4/26/99 5.05 85,000 85,000
Generale de Banque SA
5/5/99 5.05 50,000 50,002
Lloyds Bank PLC
2/12/99 5.30 40,000 40,000
National Westminster Bank PLC
2/26/99 5.70 140,000 139,987
3/2/99 5.70 145,000 144,983
6/7/99 5.75 145,000 144,952
Norddeutsche Landesbank Girozentrale
6/7/99 5.76 75,000 74,974
7/26/99 5.73 200,000 199,932
Rabobank Nederland Coop. Central
12/10/98 5.41 50,000 50,000
5/5/99 5.83 50,000 49,988
6/4/99 5.75 100,000 99,966
8/18/99 5.00 50,000 50,181
Royal Bank of Canada
2/10/99 5.60 145,000 144,985
2/26/99 5.70 95,000 94,985
Royal Bank of Scotland PLC
2/9/99 5.30 45,000 45,000
Societe Generale
2/25/99 5.53 40,000 39,995
Swiss Bank Corp.
12/16/98 5.55 70,000 70,007
3/19/99 5.70 185,000 184,963
4/5/99 5.45 116,000 116,051
4/30/99 5.87 150,000 149,965
6/3/99 5.75 215,000 214,927
6/11/99 5.80 150,000 149,955
Toronto Dominion Bank
12/2/98 5.49 160,000 160,000
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - CONTINUED
Toronto Dominion Bank - continued
2/11/99 5.60% $ 130,000 $ 130,000
5/10/99 5.15 150,000 150,000
6/4/99 5.75 140,000 139,952
7/26/99 5.73 60,000 59,978
Westdeutsche Landesbank Girozentrale
12/21/98 5.12 165,000 165,000
2/4/99 5.64 140,000 140,000
2/8/99 5.18 50,000 50,000
2/8/99 5.63 145,000 145,000
2/9/99 5.18 130,000 130,000
7,341,631
TOTAL CERTIFICATES OF DEPOSIT 13,543,586
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COMMERCIAL PAPER - 39.3%
AC Acquisition Holding Co.
12/14/98 5.44 75,000 74,855
American Express Credit Corp.
2/3/99 5.45 75,000 74,289
2/18/99 5.37 150,000 148,272
Aspen Funding Corp.
2/16/99 5.43 21,000 20,760
2/24/99 5.60 75,000 74,036
3/10/99 5.40 70,000 68,980
Asset Securitization Coop. Corp.
12/7/98 5.59 120,000 119,890
12/8/98 5.59 128,500 128,363
12/9/98 5.28 35,000 34,959
12/9/98 5.59 135,000 134,835
1/28/99 5.31 138,000 136,835
2/16/99 5.43 136,000 134,444
2/17/99 5.33 25,000 24,716
2/17/99 5.35 75,000 74,144
2/18/99 5.43 123,000 121,556
3/11/99 5.28 110,000 108,411
Associates Corp. of North America
12/4/98 5.50 50,000 49,977
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Associates Corp. of North America - continued
2/10/99 5.08% $ 60,000 $ 59,408
2/18/99 5.59 50,000 49,403
AVCO Financial Services, Inc.
12/9/98 5.59 65,000 64,921
Bank of Nova Scotia
12/28/98 5.13 100,000 99,619
3/1/99 5.21 155,000 153,007
Bear Stearns Companies, Inc.
3/11/99 5.40 60,000 59,115
3/15/99 5.40 58,000 57,112
Chase Manhattan Corp.
2/26/99 5.22 230,000 227,137
3/11/99 5.26 190,000 187,271
CIT Group, Inc.
2/3/99 5.50 75,000 74,283
2/17/99 5.40 35,000 34,600
3/11/99 5.34 75,000 73,917
Citibank Credit Card Master Trust I (Dakota Certificate Program)
12/10/98 5.49 30,000 29,959
1/20/99 5.32 40,000 39,708
1/21/99 5.32 40,000 39,702
1/25/99 5.32 25,000 24,799
1/26/99 5.33 40,000 39,673
2/4/99 5.41 110,000 108,937
2/8/99 5.30 50,000 49,500
2/9/99 5.37 29,000 28,701
2/9/99 5.48 38,000 37,601
2/16/99 5.43 50,000 49,428
2/17/99 5.43 39,000 38,548
Commerzbank US Finance, Inc.
2/9/99 5.36 100,000 98,971
Cregem North America, Inc.
12/14/98 5.42 45,000 44,913
Delaware Funding Corp.
12/16/98 5.22 48,000 47,896
Den Danske Corp., Inc.
12/29/98 5.12 45,000 44,822
Deutsche Bank Financial, Inc.
2/22/99 5.30 160,000 158,071
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Diageo Capital PLC
12/11/98 5.16% $ 15,000 $ 14,979
Enterprise Funding Corp.
12/10/98 5.23 45,936 45,876
12/16/98 5.24 64,064 63,925
1/21/99 5.30 20,339 20,188
2/4/99 5.52 10,000 9,902
Fina Oil & Chemical Co.
12/16/98 5.33 15,000 14,967
Finova Capital Corp.
2/4/99 5.54 20,000 19,802
2/16/99 5.64 67,000 66,205
2/16/99 5.70 17,000 16,796
2/18/99 5.71 40,000 39,507
Ford Credit Europe PLC
3/22/99 5.14 150,000 147,664
Ford Motor Credit Co.
2/22/99 5.30 100,000 98,794
General Electric Capital Corp.
12/15/98 5.49 100,000 99,790
12/16/98 5.49 93,000 92,790
2/1/99 5.62 50,000 49,529
2/16/99 5.46 150,000 148,290
2/17/99 5.60 130,000 128,465
2/18/99 5.04 65,000 64,294
2/18/99 5.37 100,000 98,848
2/22/99 5.58 200,000 197,496
2/23/99 5.58 145,000 143,163
3/11/99 5.24 150,000 147,854
3/18/99 5.24 150,000 147,704
3/22/99 5.23 160,000 157,464
General Electric Capital Services, Inc.
2/16/99 5.04 100,000 98,941
2/18/99 5.04 30,000 29,674
General Electric Co.
2/10/99 5.11 100,000 99,008
General Motors Acceptance Corp.
1/26/99 5.67 100,000 99,144
1/28/99 5.13 250,000 247,962
2/9/99 5.16 400,000 396,049
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
General Motors Acceptance Corp. - continued
3/8/99 5.25% $ 135,000 $ 133,123
3/17/99 5.23 275,000 270,838
Generale de Banque SA
12/10/98 5.50 30,000 29,959
2/8/99 5.61 75,000 74,215
2/16/99 5.61 75,000 74,126
2/17/99 5.61 50,000 49,410
Goldman Sachs Group L.P. (The)
2/16/99 5.38 150,000 148,300
3/11/99 5.34 150,000 147,812
GTE Corp.
12/18/98 5.33 6,000 5,985
1/26/99 5.37 16,000 15,868
1/26/99 5.39 19,000 18,843
Halifax PLC
2/24/99 5.55 175,000 172,769
Heller Financial, Inc.
12/8/98 5.64 34,000 33,963
12/17/98 5.64 45,000 44,888
12/22/98 5.65 25,000 24,918
1/28/99 5.83 20,000 19,815
2/22/99 5.83 12,000 11,841
Household Finance Corp.
12/1/98 5.53 130,000 130,000
12/8/98 5.52 80,000 79,915
Kitty Hawk Funding Corp.
1/20/99 5.32 16,386 16,267
2/22/99 5.37 20,000 19,756
2/26/99 5.43 25,000 24,676
3/4/99 5.33 33,185 32,735
MCI WorldCom, Inc.
1/28/99 5.83 95,000 94,120
1/29/99 5.83 9,000 8,915
Monsanto Co.
2/18/99 5.42 15,000 14,826
3/16/99 5.39 15,000 14,770
3/22/99 5.40 15,000 14,757
Morgan (JP) & Co., Inc.
12/15/98 5.55 40,000 39,915
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Morgan Stanley, Dean Witter & Co.
1/21/99 5.22% $ 260,000 $ 258,103
2/11/99 5.41 95,000 93,985
2/12/99 5.40 40,000 39,568
National Australia Funding, Inc.
2/22/99 5.35 100,000 98,794
3/10/99 5.41 145,000 142,899
Nationwide Building Society
12/10/98 5.42 45,000 44,940
New Center Asset Trust
12/1/98 5.50 240,406 240,406
2/8/99 5.16 58,000 57,435
3/17/99 5.24 65,000 64,014
Nordbanken, North America, Inc.
3/1/99 5.26 165,000 162,883
Norfolk Southern Corp.
1/28/99 6.09 23,000 22,777
1/29/99 6.09 95,000 94,063
PHH Corp.
2/18/99 6.10 95,000 93,747
2/23/99 6.10 44,000 43,383
Preferred Receivables Funding Corp.
12/14/98 5.21 66,000 65,877
12/16/98 5.28 40,000 39,913
12/21/98 5.22 60,000 59,827
2/10/99 5.46 26,375 26,094
Rabobank USA Financial Corp.
12/1/98 5.40 161,000 161,000
Salomon Smith Barney Holdings, Inc.
12/3/98 5.52 110,000 109,967
1/25/99 5.27 100,000 99,206
2/16/99 5.40 60,000 59,317
2/22/99 5.25 60,000 59,283
3/2/99 5.25 125,000 123,370
3/22/99 5.25 40,000 39,364
Sears Roebuck Acceptance Corp.
12/16/98 5.19 45,000 44,903
2/24/99 5.55 45,000 44,426
Societe Generale North America, Inc.
12/23/98 5.45 190,000 189,375
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Societe Generale North America, Inc. - continued
2/25/99 5.34% $ 150,000 $ 148,130
Svenska Handelsbanken, Inc.
2/23/99 5.58 75,000 74,050
Textron, Inc.
12/8/98 5.73 10,000 9,989
12/9/98 5.60 7,000 6,991
12/9/98 5.70 7,000 6,991
12/14/98 5.60 23,000 22,954
12/21/98 5.74 21,000 20,934
1/29/99 6.16 15,000 14,851
Three Rivers Funding Corp.
12/10/98 5.30 28,000 27,963
Transamerica Finance Corp.
12/14/98 5.44 30,000 29,942
Triple A One Funding Corp.
12/3/98 5.23 25,000 24,993
12/3/98 5.25 24,212 24,205
2/11/99 5.36 18,000 17,810
UBS Finance (Delaware), Inc.
12/15/98 5.29 295,000 294,399
3/1/99 5.05 150,000 148,140
3/2/99 5.50 150,000 147,971
Unifunding, Inc.
12/16/98 5.65 45,000 44,897
12/30/98 5.14 60,000 59,754
2/9/99 5.28 50,000 49,493
3/9/99 5.35 36,215 35,700
3/19/99 5.35 50,000 49,218
TOTAL COMMERCIAL PAPER 12,161,033
FEDERAL AGENCIES - 1.0%
FANNIE MAE - 1.0%
Discount Notes - 1.0%
3/3/99 5.06 174,500 172,295
3/3/99 5.07 125,000 123,417
TOTAL FEDERAL AGENCIES 295,712
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
BANK NOTES - 7.6%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Abbey National Treasury Services PLC
2/17/99 5.25% (a)(b) $ 140,000 $ 139,914
Comerica Bank, Detroit
2/9/99 5.39 (b) 41,000 40,985
First Union National Bank of North Carolina
12/1/98 4.93 100,000 99,998
12/1/98 5.09 225,000 224,998
1/20/99 5.22 (b) 60,000 60,000
Fleet National Bank, Providence
2/4/99 5.27 (b) 121,000 120,944
Key Bank NA
12/1/98 5.05 (b) 50,000 49,996
12/21/98 4.94 (b) 85,000 84,959
LaSalle National Bank, Chicago
2/17/99 5.30 100,000 100,000
NationsBank NA
2/22/99 5.05 135,000 135,000
2/23/99 5.04 200,000 200,000
3/17/99 5.30 205,000 205,000
3/22/99 4.95 130,000 130,000
4/13/99 5.05 200,000 200,000
4/20/99 4.90 130,000 130,000
PNC Bank NA, Pittsburgh
12/1/98 5.10 (b) 70,800 70,767
12/1/98 5.10 (b) 50,000 49,977
1/19/99 5.23 (b) 135,000 134,990
2/3/99 5.22 (b) 121,000 120,984
Westpac Banking Corp.
5/5/99 5.85 50,000 49,990
TOTAL BANK NOTES 2,348,502
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MASTER NOTES - 2.1%
Goldman Sachs Group L.P. (The)
12/8/98 5.56 (b)(c) 325,000 325,000
1/27/99 5.27 (b) 25,000 25,000
J.P. Morgan Securities, Inc.
12/7/98 5.26 (b) 275,000 275,000
MASTER NOTES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
SunTrust Banks, Inc.
12/1/98 5.57% (b) $ 40,000 $ 40,000
TOTAL MASTER NOTES 665,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MEDIUM-TERM NOTES - 2.0%
General Electric Capital Corp.
12/9/98 5.54 (b) 46,000 46,000
Merrill Lynch & Co., Inc.
12/4/98 5.52 (b) 75,000 74,993
Morgan Guaranty Trust Co., NY
12/28/98 5.00 (b) 161,000 160,936
Morgan Stanley, Dean Witter, Discover & Co.
12/1/98 5.18 (b) 125,000 125,000
Norwest Corp.
1/22/99 5.21 (b) 118,000 118,000
Premier Auto Trust
6/8/99 5.41 94,194 94,183
TOTAL MEDIUM-TERM NOTES 619,112
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHORT-TERM NOTES - 4.2%
Capital One Funding Corp. (1996-D)
12/7/98 5.18 22,340 22,340
Capital One Funding Corp. (1996-F)
12/7/98 5.18 37,059 37,059
Capital One Funding Corp. (1996-G)
12/7/98 5.18 3,878 3,878
Capital One Funding Corp. (1996-H)
12/7/98 5.14 (b) 17,083 17,083
Capital One Funding Corp. (1997-E)
12/7/98 5.18 19,700 19,700
Capital One Funding Corp. (1997-F)
12/7/98 5.18 6,900 6,900
Capital One Funding Corp. (1997-G)
12/7/98 5.18 9,800 9,800
SHORT-TERM NOTES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Gulf States Paper Corp.
12/7/98 5.04% (b) $ 30,000 $ 30,000
Monumental Life Insurance Co.
12/1/98 5.39 (b)(c) 50,000 50,000
12/1/98 5.69 (b)(c) 78,000 78,000
New York Life Insurance Co.
12/1/98 5.64 (b) 75,000 75,000
12/7/98 5.29 (b) 105,000 105,000
Pacific Life Insurance Co.
12/9/98 5.63 (a)(b) 90,000 90,000
SMM Trust (1997-P)
12/16/98 5.28 (a)(b) 62,000 62,000
SMM Trust (1997-X)
12/14/98 5.28 (a)(b) 168,000 168,000
SMM Trust (1998-I)
12/28/98 5.05 (a)(b) 58,000 58,000
Strategic Money Market Trust (1997-A)
12/16/98 5.50 (a)(b) 225,000 225,000
Strategic Money Market Trust (1998-B)
12/7/98 5.28 (a)(b) 170,000 170,000
Transamerica Life Insurance & Annuity Co.
12/7/98 5.52 (b) 65,000 65,000
TOTAL SHORT-TERM NOTES 1,292,760
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
REPURCHASE AGREEMENTS - 0.0%
MATURITY
AMOUNT (000S)
In a joint trading account $ 821 821
(U.S. Treasury Obligations) dated 11/30/98
due 12/1/98 At 5.36%
TOTAL INVESTMENTS - 100% $ 30,926,526
Total Cost for Income Tax Purposes $ $30,926,526
</TABLE>
LEGEND
(a) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $912,914,000 or 3% of net assets.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due dates on these types of
securities reflects the next interest rate reset date or, when
applicable, the final maturity date.
(c) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
SECURITY ACQUISTION COST
DATE (000S)
Goldman Sachs 3/10/98 $ 325,000
Group L.P. (The)
5.56% 12/8/98
Monumental 7/1/98 $ 50,000
Life Insurance Co.
5.39% 12/1/98
Monumental 7/31/98 - $ 78,000
Life Insurance Co. 9/17/98
5.69% 12/1/98
INCOME TAX INFORMATION
At November 30, 1998, the fund had a capital loss carryforward of
approximately $2,120,000 of which $326,000, $1,634,000 and $160,000
will expire on November 30, 2001, 2002 and 2004, respectively.
A total of .01% of the dividends distributed during the fiscal year
was derived from interest on U.S. Government securities which is
generally exempt from state income tax (unaudited).
The fund will notify shareholders in January 1999 of the applicable
percentage for use in preparing 1998 income tax returns.
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 30,926,526
AGREEMENTS OF $821) - SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR FUND SHARES SOLD 408,657
INTEREST RECEIVABLE 265,645
OTHER RECEIVABLES 7
TOTAL ASSETS 31,600,835
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 217
PAYABLE FOR INVESTMENTS PURCHASED 611,601
PAYABLE FOR FUND SHARES REDEEMED 275,020
DISTRIBUTIONS PAYABLE 274
ACCRUED MANAGEMENT FEE 4,745
OTHER PAYABLES AND ACCRUED EXPENSES 8,927
TOTAL LIABILITIES 900,784
NET ASSETS $ 30,700,051
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 30,702,171
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (2,120)
NET ASSETS, FOR 30,700,942 SHARES OUTSTANDING $ 30,700,051
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($30,700,051 (DIVIDED BY) 30,700,942 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 1,496,140
EXPENSES
MANAGEMENT FEE $ 54,069
TRANSFER AGENT FEES 66,680
ACCOUNTING FEES AND EXPENSES 820
NON-INTERESTED TRUSTEES' COMPENSATION 29
CUSTODIAN FEES AND EXPENSES 390
REGISTRATION FEES 2,802
AUDIT 111
LEGAL 75
MISCELLANEOUS 80
TOTAL EXPENSES BEFORE REDUCTIONS 125,056
EXPENSE REDUCTIONS (481) 124,575
NET INTEREST INCOME 1,371,565
NET REALIZED GAIN (LOSS) ON INVESTMENTS 142
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,371,707
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 1,371,565 $ 1,170,690
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 142 42
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,371,707 1,170,732
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (1,371,565) (1,170,690)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 64,184,824 47,096,513
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 1,338,245 1,134,911
COST OF SHARES REDEEMED (58,320,882) (45,974,342)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 7,202,187 2,257,082
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 7,202,329 2,257,124
NET ASSETS
BEGINNING OF PERIOD 23,497,722 21,240,598
END OF PERIOD $ 30,700,051 $ 23,497,722
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
OF PERIOD
INCOME FROM INVESTMENT .052 .052 .051 .055 .037
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.052) (.052) (.051) (.055) (.037)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A 5.34% 5.30% 5.18% 5.67% 3.74%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 30,700 $ 23,498 $ 21,241 $ 18,432 $ 14,529
(IN MILLIONS)
RATIO OF EXPENSES TO AVERAGE .47% .49% .51% .55% .52%
NET ASSETS
RATIO OF EXPENSES TO AVERAGE .47% .48% B .51% .55% .52%
NET ASSETS AFTER EXPENSE
REDUCTIONS
RATIO OF NET INTEREST INCOME TO 5.20% 5.22% 5.06% 5.50% 3.76%
AVERAGE NET ASSETS
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 4 OF NOTES TO
FINANCIAL STATEMENTS).
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
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 organized as a Delaware business trust. The
financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make
certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 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 substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity money market funds. Deferred amounts
remain in the fund until distributed in accordance with the Plan.
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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
of the fund, or to the Joint Trading Account, at a bank custodian. The
securities are marked-to-market daily and maintained at a value at
least equal to the principal amount of the repurchase agreement
(including accrued interest). FMR, the fund's investment adviser, is
responsible for determining that the value of the underlying
securities remains in accordance with the market value requirements
stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally 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, and prompt sale at an acceptable price may be difficult.
At the end of the period, restricted securities (excluding 144A
issues) amounted to $453,000,000 or 1.5% of net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund and adding an income-based fee. The group fee rate is the
weighted average of a series of rates and is based on the monthly
average net
assets of all the mutual funds advised by FMR. The rates ranged from
.1100% to .3700% for the period. The annual individual fund fee rate
is .03%. In the event that these rates were lower than the contractual
rates in effect during the period, FMR voluntarily implemented the
above rates, as they resulted in the same or a lower management fee.
The income-based fee is added only when the fund's gross yield exceeds
5%. At that time the income-based 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 .24% (annualized)
of average net assets. For the period, the management fee was
equivalent to an annual rate of .20% of average net assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, Fidelity
Investments Money Management, 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.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annual rate of .25% of average net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING FEES. 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 REDUCTIONS.
The fund has entered into an arrangement with its transfer agent
whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of the fund's expenses. During the period,
the fund's transfer agent fees were reduced by $481,000 under this
arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Phillips Street Trust and the Shareholders
of Fidelity Cash Reserves:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Cash Reserves (a fund of Fidelity Phillips Street Trust) at
November 30, 1998, and the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated,
in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to
as "financial statements") are the responsibility of the fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included
confirmation of securities at November 30, 1998 by correspondence with
the custodian and brokers, provide a reasonable basis for the opinion
expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 4, 1999
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY
MARKET FUNDS WILL BE ABLE TO
MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Boyce I. Greer, Vice President
Fred L. Henning, Jr., Vice President
John J. Todd, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
William O. McCoy *
Marvin L. Mann *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
CAS-ANN-0199 68778
1.539092.101
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
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
Exchanges/Redemption 1-800-544-7777
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 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(FIDELITY_LOGO_GRAPHIC) (REGISTERED TRADEMARK)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
FIDELITY
U.S. GOVERNMENT RESERVES
ANNUAL REPORT
NOVEMBER 30, 1998
(FIDELITY_LOGO_GRAPHIC)(REGISTERED TRADEMARK)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of major shifts in the fund's
investments over the past six months
and one year.
INVESTMENTS 9 A complete list of the fund's investments.
FINANCIAL STATEMENTS 13 Statements of assets and liabilities,
operations, and changes in net assets,
as well as financial highlights.
NOTES 17 Notes to the financial statements.
REPORT OF INDEPENDENT 23 The auditors' opinion.
ACCOUNTANTS
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT
AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888
FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND
MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. You should also keep money you'll need in the near future in a
more stable investment.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend 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. If Fidelity had not reimbursed
certain fund expenses, the past five years and past 10 years total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY US GOVERNMENT RESERVES 5.29% 27.50% 68.07%
Government Money Market Funds Average 5.03% 26.33% 66.53%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the government money market funds
average, which reflects the performance of taxable money market funds
with similar objectives tracked by IBC Financial Data, Inc. The past
one year average represents a peer group of 216 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY US GOVERNMENT RESERVES 5.29% 4.98% 5.33%
Government Money Market Funds Average 5.03% 4.79% 5.28%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
12/1/98 9/1/98 6/2/98 3/3/98 12/2/97
Fidelity U.S. Government 4.85% 5.18% 5.19% 5.26% 5.30%
Reserves
Government Money Market 4.33% 4.86% 4.85% 4.90% 4.89%
Funds Average
12/2/98 9/2/98 6/3/98 2/25/98 12/3/97
MMDA 2.32% 2.55% 2.51% 2.58% 2.62%
Row: 1, Col: 1, Value: 4.85
Row: 1, Col: 2, Value: 4.33
Row: 1, Col: 3, Value: 2.32
Row: 2, Col: 1, Value: 5.18
Row: 2, Col: 2, Value: 4.859999999999999
Row: 2, Col: 3, Value: 2.55
Row: 3, Col: 1, Value: 5.19
Row: 3, Col: 2, Value: 4.85
Row: 3, Col: 3, Value: 2.51
Row: 4, Col: 1, Value: 5.26
Row: 4, Col: 2, Value: 4.9
Row: 4, Col: 3, Value: 2.58
Row: 5, Col: 1, Value: 5.3
Row: 5, Col: 2, Value: 4.89
Row: 5, Col: 3, Value: 2.62
Fidelity U.S.
Government Reserves
Government Money
Market Funds
Average
MMDA
6% -
5% -
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. You can compare these yields to the
government money market funds average and the bank money market
deposit account (MMDA) average. Figures for the government money
market funds average are from IBC Financial Data, Inc. The MMDA
average is supplied by BANK RATE MONITOR(trademark).
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
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
market 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.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Robert Litterst, Portfolio Manager of Fidelity U.S.
Government Reserves
Q. BOB, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE FUND'S
FISCAL YEAR THAT ENDED NOVEMBER 30, 1998?
A. At the beginning of the period, the Federal Reserve Board was
biased toward raising short-term interest rates in order to slow
economic growth and head off inflation. Real GDP - gross domestic
product adjusted for inflation - grew at an annual rate of 3.6% in the
four quarters that ended September 30, 1998, well above the
non-inflationary trend rate of 2% to 2.5% - the rate above which
inflation is expected to occur. An above-trend growth rate coupled
with a tight labor market - which usually leads to increased wage
costs that are passed on to the consumer in the form of price
increases - led the Fed to be concerned about rising inflation.
However, falling commodity prices and slowdowns in the manufacturing
and export sectors due to the economic crises in Asia helped subdue
inflation.
Q. BUT MORE RECENTLY, THE MARKETS WENT THROUGH SOME TURMOIL . . .
A. Yes, that's right. The events that triggered volatility in the
global markets over the past few months were Russia's default on its
debt and its concurrent devaluation of the ruble in mid-August.
Concerns about economies in other emerging markets and the worldwide
banking system evolved from those events, and fears about the impact
of the collapse of a large hedge fund further rocked the markets in
late September. Investors around the world quickly reacted by
liquidating investments that seemed to carry risk, re-allocating them
to U.S. Treasury securities in a flight to quality. Yields on
Treasuries fell sharply, and yield spreads between U.S. Treasuries and
government agency securities widened because the latter didn't
participate fully in this rally. Into the fray stepped the Fed,
lowering key short-term interest rates at its September meeting, in a
surprise move on October 15, and again at its November meeting.
Q. WHY DID THE FED SHIFT FROM A BIAS TOWARD RAISING RATES TO LOWERING
THEM THREE TIMES?
A. At its September meeting, the Fed cited the need to cushion
domestic growth against the effects of weakness abroad, and added that
domestic financial conditions were not as accommodating for sustained
growth in the economy. The Fed's October reduction - which, for the
first time in many years, was announced between meetings of its Open
Market Committee - appeared to be in response to fears that a "credit
crunch" - where lenders hold back from both worthy and unworthy
borrowers - might develop after this string of events. Since the Fed's
last two moves, stability appears to be returning to world markets.
Q. WHAT STRATEGY DID YOU PURSUE DURING THE PERIOD?
A. The fund's average maturity ranged from 50 to 68 days and generally
was longer than the average of its peers. A long maturity generally is
an indication that I expect falling interest rates. That wasn't
necessarily the case for the whole period. Earlier on, with a neutral
outlook toward the direction of interest rates, I invested
predominantly in the one- to three-month maturity range, but I
periodically extended into longer-maturity securities when they
offered the best value. Recently, I've been able to find attractively
priced agency securities in the three- to four-month sector of the
money market yield curve because their supply has increased markedly.
Of course, when interest rates were declining, I looked for
opportunities to extend the average maturity and lock in attractive
rates.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1998, was 4.85%,
compared to 5.29% 12 months ago. For the 12 months that ended November
30, 1998, the fund had a total return of 5.29%, compared to 5.03% for
the government money market funds average, according to IBC Financial
Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. It appears the Fed is done reducing interest rates for the near
future. Interest rates were cut by 0.75 percentage points in two
months, an aggressive approach compared to what market observers have
come to expect from Fed Chairman Alan Greenspan and the other members
of the board. It looks as if the Fed will now sit back and evaluate
the impact of its moves on the economy and financial markets to
determine if any additional action is necessary. As far as the economy
is concerned, the general outlook calls for - as it has for some time
- - a slowdown in economic growth. However, to date, the economy has
demonstrated unexpected resiliency and sustained growth. Looking
ahead, if the economy expands at its current pace, I would expect the
Fed to stand pat. But if the economy falters or financial markets come
under renewed pressure, I believe the Fed would lower rates further.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
FUND FACTS
GOAL: INCOME AND A STABLE $1
SHARE PRICE BY INVESTING IN
HIGH-QUALITY SHORT-TERM MONEY
MARKET SECURITIES ISSUED BY THE
U.S. GOVERNMENT FOR
GOVERNMENT AGENCIES
FUND NUMBER: 050
TRADING SYMBOL: FGRXX
START DATE: NOVEMBER 3, 1981
SIZE: AS OF NOVEMBER 30,
1998, MORE THAN $1.4 BILLION
MANAGER: ROBERT LITTERST, SINCE
1997; MANAGER, SEVERAL
FIDELITY AND SPARTAN TAXABLE
MONEY MARKET FUNDS; JOINED
FIDELITY IN 1991
(CHECKMARK)
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND'S % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS INVESTMENTS
11/30/98 5/31/98 11/30/97
0 - 30 44 69 58
31 - 90 27 9 12
91 - 180 22 12 18
181 - 397 7 10 12
WEIGHTED AVERAGE MATURITY
11/30/98 5/31/98 11/30/97
FIDELITY U.S. GOVERNMENT RESERVES 65 Days 51 Days 64 Days
Government Money Market 56 Days 53 Days 46 Days
Funds Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1998 AS OF MAY 31, 1998
ROW: 1, COL: 1, VALUE: 79.0
ROW: 1, COL: 2, VALUE: 21.0
ROW: 1, COL: 1, VALUE: 53.0
ROW: 1, COL: 2, VALUE: 47.0
FEDERAL AGENCY
ISSUES 79%
REPURCHASE
AGREEMENTS 21%
FEDERAL AGENCY
ISSUES 53%
REPURCHASE
AGREEMENTS 47%
INVESTMENTS NOVEMBER 30, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FEDERAL AGENCIES - 78.7%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FANNIE MAE - 33.4%
Agency Coupons - 19.6%
12/1/98 4.82% (a) $ 20,000 $ 19,999
12/1/98 5.06 (a) 12,000 11,998
12/5/98 5.06 (a) 33,000 32,988
12/15/98 5.26 (a) 13,000 12,994
12/17/98 5.06 (a) 25,000 24,996
12/28/98 4.83 (a) 19,000 18,990
2/1/99 4.99 (a) 19,000 18,990
2/12/99 5.43 12,000 11,996
2/16/99 5.16 (a) 14,000 13,995
2/19/99 5.43 8,000 7,997
2/23/99 5.45 6,000 5,998
2/23/99 5.47 7,000 6,998
2/26/99 5.56 13,000 12,992
3/1/99 5.01 (a) 45,000 44,981
3/16/99 5.52 14,000 13,995
3/26/99 5.55 18,000 17,994
3/29/99 5.15 10,000 10,021
4/15/99 5.54 6,000 5,995
293,917
Discount Notes - 13.8%
12/9/98 5.40 14,000 13,983
12/18/98 5.25 7,665 7,646
1/15/99 5.53 32,000 31,785
2/22/99 5.30 18,000 17,785
3/3/99 5.07 12,000 11,848
3/15/99 5.00 12,000 11,829
3/15/99 5.31 14,000 13,791
4/23/99 4.71 24,000 23,561
5/17/99 4.99 13,000 12,706
6/4/99 5.33 10,000 9,736
6/30/99 4.84 24,000 23,343
8/9/99 5.35 12,000 11,573
8/20/99 5.34 17,000 16,371
205,957
FEDERAL AGENCIES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FEDERAL FARM CREDIT BANK - 0.8%
Agency Coupons - 0.8%
12/10/98 5.10% (a) $ 12,000 $ 11,999
FEDERAL HOME LOAN BANK - 19.4%
Agency Coupons - 16.5%
12/1/98 4.84 (a) 26,000 25,994
12/1/98 4.82 (a) 20,000 19,999
12/1/98 5.46 (a) 13,000 12,992
12/1/98 4.81 (a) 14,000 14,000
12/1/98 5.00 (a) 12,000 11,995
12/1/98 5.00 (a) 13,000 12,995
12/8/98 5.23 (a) 6,000 5,997
12/17/98 5.81 14,000 14,000
3/1/99 5.01 (a) 10,000 9,996
3/1/99 5.06 (a) 66,000 65,951
3/11/99 5.45 13,000 13,004
3/26/99 5.58 12,000 11,994
5/19/99 5.56 17,000 16,999
6/15/99 5.51 12,000 12,000
247,916
Discount Notes - 2.9%
1/15/99 5.53 25,000 24,832
2/16/99 5.04 18,258 18,065
42,897
FREDDIE MAC - 23.7%
Agency Coupons - 4.3%
12/21/98 4.85 (a) 15,000 14,994
3/1/99 4.97 (a) 13,000 12,986
3/12/99 5.52 10,000 10,000
8/13/99 5.52 26,000 25,990
63,970
Discount Notes - 19.4%
12/7/98 5.50 25,000 24,978
12/18/98 5.25 13,705 13,671
12/21/98 5.31 34,000 33,901
1/26/99 5.12 11,000 10,914
FEDERAL AGENCIES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FREDDIE MAC - CONTINUED
Discount Notes - continued
1/28/99 5.13% $ 12,000 $ 11,903
2/19/99 5.11 13,000 12,855
2/19/99 5.27 14,000 13,839
2/22/99 5.30 12,000 11,857
2/25/99 5.05 17,775 17,565
2/25/99 5.08 13,000 12,845
2/25/99 5.17 20,000 19,757
2/26/99 5.03 13,000 12,844
2/26/99 5.16 60,000 59,267
2/26/99 5.17 9,000 8,889
3/12/99 5.09 13,000 12,817
4/12/99 5.03 13,000 12,765
290,667
STATE OF ISRAEL (GUARANTEED BY U.S. GOVERNMENT THROUGH
AGENCY FOR INTERNATIONAL DEVELOPMENT) - 0.7%
Agency Coupons - 0.7%
8/15/99 4.82 10,000 10,146
STUDENT LOAN MARKETING ASSOC. - 0.7%
Agency Coupons - 0.7%
2/10/99 5.53 11,450 11,444
TOTAL FEDERAL AGENCIES 1,178,913
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
REPURCHASE AGREEMENTS - 21.3%
MATURITY
AMOUNT (000S)
In a joint trading account (Notes 2 and 3)
(U.S. Government Obligations) dated:
9/2/98 due 2/10/99 At 5.48% $ 13,313 13,000
9/3/98 due 12/2/98 At 5.5% 26,354 26,000
10/5/98 due 12/7/98 At 5.2% 27,242 27,000
10/15/98 due:
2/10/99 At 5.1% 34,554 34,000
2/12/99 At 5.1% 20,332 20,000
10/16/98 due 1/20/99 At 5.28% 34,469 34,000
10/19/98 due 3/22/99 At 4.86% 25,516 25,000
10/22/98 due 12/16/98 At 4.9% 14,103 14,000
REPURCHASE AGREEMENTS - CONTINUED
MATURITY VALUE (NOTE 1)
AMOUNT (000S) (000S)
In a joint trading account (U.S. Treasury Obligations) dated:-
continued
10/26/98 due:
12/28/98 At 4.9% $ 27,228 $ 27,000
1/25/99 At 5% 18,223 18,000
11/19/98 due:
12/16/98 At 5% 24,090 24,000
1/19/99 At 5.23% 24,209 24,000
11/30/98 due 12/1/98 At 5.52% 33,256 33,251
TOTAL REPURCHASE AGREEMENTS 319,251
TOTAL INVESTMENTS - 100% $ 1,498,164
Total Cost for Income Tax Purposes $ 1,498,164
</TABLE>
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due dates on these types of
securities reflects the next interest rate reset date or, when
applicable, the final maturity date.
INCOME TAX INFORMATION
At November 30, 1998, the fund had a capital loss carryforward of
approximately $1,000, all of which will expire on November 30, 2003.
A total of 18.59% of the dividends distributed during the fiscal year
was derived from interest on U.S Government securities which is
generally exempt from state income tax (unaudited).
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 1,498,164
AGREEMENTS OF $319,251) -
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR FUND SHARES SOLD 7,647
INTEREST RECEIVABLE 6,498
TOTAL ASSETS 1,512,309
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 77,804
PAYABLE FOR FUND SHARES REDEEMED 6,605
DISTRIBUTIONS PAYABLE 98
ACCRUED MANAGEMENT FEE 211
OTHER PAYABLES AND ACCRUED EXPENSES 323
TOTAL LIABILITIES 85,041
NET ASSETS $ 1,427,268
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 1,427,269
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (1)
NET ASSETS, FOR 1,427,644 SHARES OUTSTANDING $ 1,427,268
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($1,427,268 (DIVIDED BY) 1,427,644 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 73,215
EXPENSES
MANAGEMENT FEE $ 2,626
TRANSFER AGENT FEES 2,913
ACCOUNTING FEES AND EXPENSES 149
NON-INTERESTED TRUSTEES' COMPENSATION 7
CUSTODIAN FEES AND EXPENSES 14
REGISTRATION FEES 89
AUDIT 25
LEGAL 4
MISCELLANEOUS 4
TOTAL EXPENSES BEFORE REDUCTIONS 5,831
EXPENSE REDUCTIONS (110) 5,721
NET INTEREST INCOME 67,494
NET REALIZED GAIN (LOSS) ON INVESTMENTS 61
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 67,555
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 67,494 $ 62,498
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 61 24
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 67,555 62,522
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (67,494) (62,498)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 1,749,474 1,599,242
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 64,621 59,780
COST OF SHARES REDEEMED (1,677,134) (1,611,507)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 136,961 47,515
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 137,022 47,539
NET ASSETS
BEGINNING OF PERIOD 1,290,246 1,242,707
END OF PERIOD $ 1,427,268 $ 1,290,246
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30, TWO MONTHS YEAR ENDED
ENDED SEPTEMBER 30,
NOVEMBER 30,
1998 1997 1996 1995 1994 1994
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
BEGINNING OF
PERIOD
INCOME FROM .052 .051 .050 .055 .008 .033
INVESTMENT
OPERATIONS
NET INTEREST
INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST (.052) (.051) (.050) (.055) (.008) (.033)
INCOME
NET ASSET VALUE, END $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
OF PERIOD
TOTAL RETURN B, C 5.29% 5.26% 5.12% 5.60% .78% 3.32%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF $ 1,427 $ 1,290 $ 1,243 $ 1,188 $ 1,130 $ 1,060
PERIOD (IN MILLIONS)
RATIO OF EXPENSES TO .45% .48% .51% .55% .36% A, D .51%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .44% E .48% .50% E .55% .36% A .51%
AVERAGE NET ASSETS
AFTER EXPENSE
REDUCTIONS
RATIO OF NET INTEREST 5.16% 5.13% 5.02% 5.43% 4.77% A 3.27%
INCOME TO AVERAGE
NET ASSETS
</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 (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D FMR 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.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity U.S. Government 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 organized as a Delaware
business trust. The financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 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 substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. 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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
2. OPERATING POLICIES -
CONTINUED
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally 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, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities.
3. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total
investments in repurchase agreements through a joint trading account.
These repurchase agreements were with entities whose creditworthiness
has been reviewed and found satisfactory by FMR. The investments in
repurchase agreements through the joint trading account are summarized
as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SUMMARY OF JOINT TRADING
DATED SEPTEMBER 2, 1998, DUE FEBRUARY 10, 1999 AT 5.48%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $100,000,000
Aggregate maturity amount of agreements $102,450,778
Aggregate market value of transferred assets $102,122,444
Coupon rates of transferred assets 7% to 7.09%
Maturity dates of transferred assets 4/1/25 to 9/1/37
DATED SEPTEMBER 3, 1998, DUE DECEMBER 2, 1998 AT 5.5%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $200,000,000
Aggregate maturity amount of agreements $202,750,000
Aggregate market value of transferred assets $206,794,665
Coupon rates of transferred assets 4% to 6.50%
Maturity dates of transferred assets 2/28/99 to 5/31/02
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING - CONTINUED
DATED OCTOBER 5, 1998, DUE DECEMBER 7, 1998 AT 5.2%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $200,000,000
Aggregate maturity amount of agreements $201,820,000
Aggregate market value of transferred assets $204,000,001
Coupon rates of transferred assets 6% to 7.50%
Maturity dates of transferred assets 8/1/02 to 4/1/31
DATED OCTOBER 15, 1998, DUE FEBRUARY 10, 1999 AT 5.1%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $250,000,000
Aggregate maturity amount of agreements $254,179,167
Aggregate market value of transferred assets $258,478,350
Coupon rates of transferred assets 8%
Maturity dates of transferred assets 1/15/01 to 9/15/28
DATED OCTOBER 15, 1998, DUE FEBRUARY 12, 1999 AT 5.1%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $150,000,000
Aggregate maturity amount of agreements $152,550,000
Aggregate market value of transferred assets $154,215,726
Coupon rates of transferred assets 6% to 9%
Maturity dates of transferred assets 11/1/09 to 9/1/28
DATED OCTOBER 16, 1998, DUE JANUARY 20, 1999 AT 5.28%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $70,000,000
Aggregate maturity amount of agreements $70,985,600
Aggregate market value of transferred assets $71,874,900
Coupon rates of transferred assets 0%
Maturity dates of transferred assets 2/1/24 to 6/1/28
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING - CONTINUED
DATED OCTOBER 19, 1998, DUE MARCH 22, 1999 AT 4.86%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $200,000,000
Aggregate maturity amount of agreements $204,158,000
Aggregate market value of transferred assets $205,486,138
Coupon rates of transferred assets 6% to 9%
Maturity dates of transferred assets 2/1/17 to 10/1/28
DATED OCTOBER 22, 1998, DUE DECEMBER 16, 1998 AT 4.9%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $100,000,000
Aggregate maturity amount of agreements $100,748,611
Aggregate market value of transferred assets $102,349,672
Coupon rates of transferred assets 5.50% to 11%
Maturity dates of transferred assets 2/1/99 to 4/1/37
DATED OCTOBER 26, 1998, DUE DECEMBER 28, 1998 AT 4.9%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $200,000,000
Aggregate maturity amount of agreements $201,715,000
Aggregate market value of transferred assets $204,699,344
Coupon rates of transferred assets 5.50% to 11%
Maturity dates of transferred assets 2/1/99 to 4/1/37
DATED OCTOBER 26, 1998, DUE JANUARY 25, 1999 AT 5%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $100,000,000
Aggregate maturity amount of agreements $101,263,889
Aggregate market value of transferred assets $102,165,587
Coupon rates of transferred assets 0%
Maturity dates of transferred assets 10/1/09 to 8/1/34
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING - CONTINUED
DATED NOVEMBER 19, 1998, DUE DECEMBER 16, 1998 AT 5%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $100,000,000
Aggregate maturity amount of agreements $100,375,000
Aggregate market value of transferred assets $102,500,611
Coupon rates of transferred assets 0%
Maturity dates of transferred assets 7/1/22 to 11/1/37
DATED NOVEMBER 19, 1998, DUE JANUARY 19, 1999 AT 5.23%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $100,000,000
Aggregate maturity amount of agreements $100,886,194
Aggregate market value of transferred assets $102,159,208
Coupon rates of transferred assets 0%
Maturity dates of transferred assets 1/1/24 to 3/1/28
DATED NOVEMBER 30, 1998, DUE DECEMBER 1, 1998 AT 5.52%
Number of dealers or banks 2
Maximum amount with one dealer or bank 57%
Aggregate principal amount of agreements $696,887,000
Aggregate maturity amount of agreements $696,993,886
Aggregate market value of transferred assets $710,881,094
Coupon rates of transferred assets 0% to 14.50%
Maturity dates of transferred assets 12/1/98 to 8/1/37
</TABLE>
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus
a fixed individual fund fee rate applied to the average net assets of
the fund and adding an income based fee. The group fee rate is the
weighted average of a series of rates and is based on the monthly
average net assets of all the mutual funds advised by FMR. The rates
ranged from .1100% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. The individual fund fee rate is
.03%. The income-based fee is added only when the fund's gross yield
exceeds 5%. At that time the income-based fee would equal 6% of the
portion of the fund's gross income that represents a gross yield of
more than 5% per year. The maximum income based component is .24%
(annualized) of average net assets. For the period, the management fee
was equivalent to an annual rate of .20% of average net assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, Fidelity
Investments Money Management, 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.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annual rate of .22% of average net assets.
ACCOUNTING FEES. 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.
5. EXPENSE REDUCTIONS.
The fund has entered into an arrangement with its transfer agent
whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of the fund's expenses. During the period,
the fund's transfer agent fees were reduced by $110,000 under this
arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Phillips Street Trust and the Shareholders
of Fidelity U.S. Government Reserves:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity U.S. Government Reserves (a fund of Fidelity Phillips Street
Trust) at November 30, 1998, the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity U.S. Government Reserves' management;
our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 4, 1999
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
(REGISTERED TRADEMARK)
INVESTMENT SUB-ADVISER
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Boyce I. Greer, Vice President
Fred L. Henning, Jr., Vice President
Robert A. Litterst, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
William O. McCoy *
Marvin L. Mann *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
FUS-ANN-0199 68688
1.539126.101
CUSTODIAN
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
Exchanges/Redemptions 1-800-544-7777
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 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(FIDELITY_LOGO_GRAPHIC) (REGISTERED TRADEMARK)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
