SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-77909)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 39 [X]
and
REGISTRATION STATEMENT (No. 811-3480)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 39 [X]
Daily Money Fund
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Siobhan Perkins
Morris, Nichols, Arsht & Tunnell
1201 N. Market Street, P.O. Box 1347
Wilmington, DE 19899-1347
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b)
(X) on September 19, 1996 pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on ( ) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and filed the Notice required by such Rule
on or before September 27, 1996.
DAILY MONEY FUND :
U.S. TREASURY PORTFOLIO: CLASS B
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Expenses
3 a Financial Highlights
b *
c Performance
d Performance
4 a(i) Charter
a(ii) Investment Principles and Risks; Securities and
Investment Practices
b Securities and Investment Practices
c Who May Want to Invest; Investment Principles
and Risks; Securities and Investment Practices
5 a Charter
b(i) Cover Page; Charter; FMR and Its Affiliates
b(ii) FMR and Its Affiliates; Charter; Breakdown of
Expenses
b(iii) Expenses; Breakdown of Expenses
c,d, Cover Page; Charter; Breakdown of Expenses;
FMR and Its Affiliates
e FMR and Its Affiliates; Other Expenses
f Expenses
g Expenses; FMR and Its Affiliates
5A
*
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange Restrictions
a(iii) *
b FMR and Its Affiliates
c Exchange Restrictions
d Cover Page; Charter
e Cover Page; How to Buy Shares; How to Sell Shares; Investor Services;
Exchange Restrictions
f,g Dividends, Capital Gains, and Taxes
7 a Charter; Cover page
b How to Buy Shares; Transaction Details
c How to Buy Shares; Transaction Details
d How to Buy Shares
e, Transaction Details
f, Expenses; Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details; Exchange
Restrictions
9 *
* Not Applicable
DAILY MONEY FUND
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a copy of
the fund's most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated September 19, 1996. The
SAI has been filed with the Securities and Exchange Commission (SEC) and
is available along with other related materials on the SEC's Internet
Web site (http://www.sec.gov). The SAI is is incorporated herein by
reference (legally forms a part of the prospectus). For a free copy of
either document, contact Fidelity Client Services at 1-800-843-3001 or
your investment professional .
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL MAINTAIN A
STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, FEDERAL RESERVE BOARD
OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DMFB-pro- 0 996
18545
U.S. TREASURY PORTFOLIO - CLASS B
(fund number 658)
The fund seeks to obtain as high a level of current income as is consistent
with the preservation of capital and liquidity.
PROSPECTUS
SEPTEMBER 19, 1996(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
AND
ANNUAL REPORT
FOR THE PERIOD ENDING
JULY 31, 1996
CONTENTS
PROSPECTUS
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KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Class B's sales charge (load) and its
yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of the fund's
financial data.
PERFORMANCE
THE FUND IN DETAIL CHARTER How the fund is organized.
INVESTMENT PRINCIPLES AND RISKS The fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND WAIVERS
</TABLE>
ANNUAL REPORT
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INVESTMENTS A-1 A complete list of the fund's investments with their
market values.
FINANCIAL STATEMENTS A-2 Statements of assets and liabilities, operations,
and changes in net assets.
NOTES A-5 Notes to the financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS A-9 The auditors' opinion.
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
The fund offers investors a convenient way to invest in a professionally
managed portfolio of money market instruments.
The fund is designed for investors who would like to earn current income
while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
The fund is managed to keep its share price stable at $1.00 and offers an
added measure of safety with its focus on U.S. Treasury securities.
The fund does not constitute a balanced investment plan. However, because
it emphasizes stability, it could be well-suited for a portion of your
investments .
The fund is composed of two classes of shares. Each class of the fund has a
common investment objective and investment portfolio. Initial Class shares
do not have a sales charge, but do pay a distribution fee. Class B shares
do not have a front-end sales charge, but do have a contingent deferred
sales charge (CDSC) and pay a distribution fee and a shareholder service
fee. Because Initial Class shares do not have a sales charge, have a lower
distribution fee and do not have a shareholder service fee, Initial Class
shares are expected to have a higher total return than Class B shares. You
may obtain more information about Initial Class shares, which are not
offered through this prospectus, from your investment professional or by
calling Fidelity Client Services at 1-800-843-3001.
Class B shares of the fund may be purchased directly in connection with the
Fidelity Advisor Systematic Exchange Program (the Program) or by exchange
from Class B shares of the Fidelity Advisor funds, see "How to Buy Shares"
on page for more information.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy, sell, or
exchange Class B shares of the fund. See "Transaction Details," page , for
an explanation of how and when these charges apply.
A CDSC is imposed on redemptions of Class B shares according to the
schedule that was in effect when you originally purchased the Advisor fund
Class B shares that you exchanged for Class B shares of the fund .
See "Transaction Details," page , for information about the CDSC.
Maximum CDSC (as a % of the lesser of 4.00[
original purchase price or redemption proceeds) A]
Maximum sales charge on reinvested distributions None
Redemption fee None
Exchange fee None
[A] DECLINES OVER 5 YEARS FROM 4.00% TO 0%.
ANNUAL OPERATING EXPENSES are paid out of the fund's assets. The fund pays
a management fee to Fidelity Management & Research Company (FMR). The fund
also incurs other expenses for services such as maintaining shareholder
records and furnishing shareholder account statements and financial
reports.
12b-1 fees include a distribution fee and a shareholder service fee.
Distribution fees are paid by FMR and Class B to the distributor for
services and expenses in connection with the distribution of Class B
shares. Shareholder service fees are paid by Class B to investment
professionals for services and expenses incurred in connection with
providing personal service and/or maintenance of Class B shareholder
accounts. Payments by FMR may be made from its management fee, its past
profits or other sources. Payments by Class B are made directly out of
Class B assets. Long-term shareholders may pay more than the economic
equivalent of the maximum sales charges permitted by the National
Association of Securities Dealers, Inc., due to 12b-1 fees.
Class B expenses are factored into its share price or dividends and are not
charged directly to shareholder accounts (see "Breakdown of Expenses" on
page ).
The following are projections based on historical expenses of Class B and
are calculated as a percentage of average net assets of Class B of the
fund.
Management fee * 0.21
%
12b-1 fee (including 0.25% Shareholder Service Fee 1.00
for Class B shares) %
Other expenses (after reimbursement) 0.14
%
Total operating expenses 1.35
%
* THE MANAGEMENT FEE RATE REPRESENTS THE NET RATE RETAINED BY FMR AFTER
PAYMENT MADE TO THE DISTRIBUTOR. THE MANAGEMENT FEE RATE BEFORE PAYMENTS
MADE TO THE DISTRIBUTOR BY FMR IS 0.50%.
EXPENSE TABLE EXAMPLE: You would pay the following expenses, including the
maximum CDSC according to the appropriate CDSC schedule, on a $1,000
investment in Class B shares of the fund, assuming a 5% annual return and
either (1) full redemption or (2) no redemption, at the end of each time
period:
U.S. TREASURY PORTFOLIO - CLASS B
If you purchased Class B shares directly in connection
with the Program or by exchange from a Fidelity Advisor equity or
long-term bond fund.
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1 Year [A] 3 5 10
Years [A] Years [A] Years[B]
(1) $ 54 $ 73 $ 84 $ 126
(2) $ 14 $ 43 $ 74 $ 126
</TABLE>
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[B] REFLECTS CONVERSION TO INITIAL CLASS SHARES AFTER SIX YEARS.
If you purchased Class B shares by exchange from a Fidelity
Advisor intermediate-term bond fund.
<TABLE>
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1 Year [A] 3 5 10 Years
Years [A] Years[B]
(1) $ 44 $ 53 $ 66 $ 109
(2) $ 19 $ 43 $ 66 $ 109
</TABLE>
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[B] REFLECTS CONVERSION TO INITIAL CLASS SHARES AFTER FOUR YEARS.
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class B to the extent that total
operating expenses exceed 1.35% of its average net assets. If this
agreement were not in effect , other expenses and total operating
expenses, as a percentage of average net assets of Class B would have been
0.31 % and 1.81 % , respectively . Expenses eligible
for reimbursement do not include interest, taxes, brokerage commissions,
and extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights table s that follow and the fund's
financial statements that are included in the fund ' s Annual Report
have been audited by Coopers & Lybrand L.L.P. , independent
accountants. Their report on the financial statements and financial
highlights are included in the Annual Report. The financial
statements and the report are attached.
U.S. TREASURY PORTFOLIO - CLASS B
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Selected Per-Share Data and Ratios
</TABLE>
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Fiscal years ended July 31 1996 1995 1994A
Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations
Net interest income .043 .042 .002
Less Distributions
From net interest income (.043) (.042) (.002)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000
Total returnB,C 4.33% 4.28% .25%
Net assets, end of period (000 omitted) $ 39,956 $ 3,154 $ 628
Ratio of expenses to average net assets 1.35%D 1.35%D 1.35%D,
E
Ratio of net interest income to average net assets 4.13% 4.22% 3.03%,E
</TABLE>
A JULY 1, 1994 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1994
B TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE LEVIED
ON CLASS B SHARE REDEMPTIONS AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
E ANNUALIZED
U.S. TREASURY PORTFOLIO - INITIAL CLASS
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Selected Per-Share Data
and Ratios
Fiscal years ended
July 31 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net asset value,
beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from
Investment .049 .049 .029 .027 .042 .065 .079 .083 .063 .057
Operations
Net interest income
Less
Distributions (.049) (.049) (.029) (.027) (.042) (.065) (.079) (.083) (.063) (.057)
From net interest income
Net asset value,
end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total
returnA 5.06% 5.02% 2.89% 2.78% 4.25% 6.69% 8.24% 8.64% 6.45% 5.81%
Net assets, end
of period $ 1,801 $ 1,828 $ 2,025 $ 2,949 $ 3,094 $ 1,702 $ 1,177 $ 994 $ 320 $ 240
(In millions)
Ratio of expenses
to .65% .65% .60% .57% .59% .59% .59% .64% .64% .58%
average net
assets B B
Ratio of net interest
income 4.94% 4.89% 2.81% 2.73% 4.14% 6.42% 7.91% 8.47% 6.26% 5.67%
to average
net assets
</TABLE>
A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
Average annual and cumulative total returns usually will include the effect
of paying the maximum applicable sales charge.
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE YIELD.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The fund's performance and holdings are detailed twice a year in financial
reports, which are sent to all shareholders. For current performance
call Fidelity Client Services at 1-800-843-3001.
THE FUND IN DETAIL
CHARTER
U.S. TREASURY PORTFOLIO IS A MUTUAL FUND: an investment that pools
shareholders' money and invests it toward a specified goal. The fund is a
diversified fund of Daily Money Fund, an open-end management investment
company organized as a Delaware business trust on September 29, 1993.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review the fund's performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. The transfer
agent will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own .
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The fund employs various Fidelity
companies to perform activities required for its operation.
The fund is managed by FMR, which handles the fund's business affairs. FMR
Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of July 31, 1996, FMR advised funds having approximately
27 million shareholder accounts with a total value of more than
$ 385 billion.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations Company
(FIIOC) performs transfer agent servicing functions for Class B shares of
the fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of
the Edward C. Johnson 3d family are the predominant owners of a class of
shares of common stock representing approximately 49% of the voting power
of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
To carry out the fund's transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that the fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
THE FUND'S INVESTMENT APPROACH
The fund invests only in U.S. Treasury securities and repurchase agreements
for these securities. The fund does not enter into reverse repurchase
agreements.
When you sell your shares, they should be worth the same amount as when you
bought them. Of course, there is no guarantee that the fund will maintain a
stable $1.00 share price. The fund follows industry-standard guidelines on
the quality and maturity of its investments, which are designed to help
maintain a stable $1.00 share price. The fund will purchase only
high-quality securities that FMR believes present minimal credit risks and
will observe maturity restrictions on securities it buys. In general,
securities with longer maturities are more vulnerable to price changes,
although they may provide higher yields. It is possible that a major change
in interest rates or a default on the fund's investments could cause its
share price (and the value of your investment) to change.
The fund earns income at current money market rates. It stresses
preservation of capital, liquidity, and income and does not seek the higher
yields or capital appreciation that more aggressive investments may
provide. The fund's yield will vary from day to day and generally reflects
current short-term interest rates and other market conditions. It is
important to note that neither the fund nor its yield is guaranteed by the
U.S. Government.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of the fund's limitations and more detailed information
about the fund's investments are contained in the fund's SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with the fund's investment
objective and policies and that doing so will help the fund achieve its
goal. Fund holdings are detailed in the fund's financial reports, which are
sent to shareholders twice a year. For a free SAI or financial report,
contact your investment professional or call Fidelity Client Services at
1-800-843-3001.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes and bonds. U.S.
Treasury securities are backed by the full faith and credit of the United
States.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. The risks associated with stripped securities are similar to
those of other money market securities, although stripped securities may be
more volatile. U.S. Treasury securities that have been stripped by a
Federal Reserve Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, the fund may pay
periodic fees or accept a lower interest rate.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes
but not in an amount exceeding 331/3% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
The fund seeks to obtain as high a level of current income as is consistent
with the preservation of capital and liquidity.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of Class B's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. The fund also pays OTHER EXPENSES, which
are explained below.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fund pays
the fee at the annual rate of 0.50% of its average net assets.
FMR HAS A SUB-ADVISORY AGREEMENT with FMR Texas, which has primary
responsibility for providing investment management for the fund, while FMR
retains responsibility for providing the fund with other management
services. FMR pays FMR Texas 50% of its management fee (before expense
reimbursements but after payments made by FMR pursuant to Class B's
Distribution and Service Plan) for these services. FMR paid FMR Texas
0.11 % of the fund's average net assets for the fiscal year ended
1996.
OTHER EXPENSES
While the management fee is a significant component of the fund's annual
operating costs, the fund has other expenses as well.
FIIOC performs certain transfer agency, dividend disbursing and shareholder
services for Class B. Fidelity Service Co. (FSC) calculates the net asset
value per share (NAV) and dividends for Class B, and maintains the fund's
general accounting records. For the fiscal year ended 1996, fees paid by
Class B to FIIOC amounted to 0.25 % of Class B's average net assets,
and fees paid by the fund to FSC amounted to 0.01 % of the
fund's average net assets.
Class B shares have adopted a DISTRIBUTION AND SERVICE PLAN. Under the
Plan, Class B is authorized to pay FDC a monthly distribution fee as
compensation for its services and expenses in connection with the
distribution of Class B shares. FDC is paid a distribution fee monthly by
FMR and Class B at an annual rate of 0.75% of Class B's average net assets
throughout the month.
In addition, pursuant to the Class B Plan, investment professionals are
compensated at an annual rate of 0.25% of Class B's average net assets
throughout the month for providing personal service to and/or maintenance
of Class B shareholder accounts.
The Plan specifically recognizes that FMR may make payments from its
management fee revenue, past profits or other resources to reimburse FDC
for expenses incurred in connection with the distribution of Class B
shares. The Board of Trustees has authorized FMR to pay FDC a distribution
fee from its management fee revenue, past profits or other resources at an
annual rate of up to 0.40% of Class B's average net assets. For the fiscal
year ended 1996, FMR paid FDC monthly at an annual rate of 0.29 % of
Class B's average net assets throughout the month.
The fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the compensation of
trustees who are not affiliated with Fidelity.
YOUR ACCOUNT
TYPES OF ACCOUNTS
When you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of fund
shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or fees
that may apply. Certain features of the fund, such as minimum initial or
subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed below.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers the fund through a retirement program,
contact your employer for more information. Otherwise, contact your
investment professional or call Fidelity Client Services at
1-800-843-3001.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age under 701/2 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 401(K) PLANS allow employees of corporations of all sizes to
contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA). Contact your investment
professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Contact your investment professional.
HOW TO BUY SHARES
Class B shares of the fund may be purchased directly in connection with the
Program or by exchange from Class B shares of the Fidelity Advisor funds.
Class B shares purchased in connection with the Program must be
exchanged into Class B shares of Fidelity Advisor funds within 18
months of purchase . For more information regarding the Program, see
"Regular Investment Plans" on page .
CLASS B'S SHARE PRICE, called NAV, is calculated every business day. Class
B shares are sold without a front-end sales charge but may be subject to a
CDSC upon redemption. For information on how the CDSC is calculated, see
"Transaction Details," on page . The fund is managed to keep its share
price stable at $1.00.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. NAV is normally calculated at
2:00 p.m. and 4:00 p.m. Eastern time.
You will receive the NAV next determined after your investment professional
has submitted your purchase order.
Share certificates are not available for Class B shares.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your
account,
(small solid bullet) Open your account by exchanging from Class B of a
Fidelity Advisor fund, or
(small solid bullet) Contact your investment professional or call Fidelity
Client Services.
BY MAIL . You or your investment professional must send
a check payable to Daily Money Fund: U.S. Treasury Portfolio
- - Class B. When making subsequent investments by check, please write
your fund account number on the check. All investments by check should be
sent to the above address.
BY WIRE. You must sign up for the wire feature before using it. For
wiring information and instructions, you should call the investment
professional through which you trade or if you trade directly through
Fidelity, call Fidelity Client Services. There is no fee imposed by the
fund for wire purchases. However, if you buy shares through an investment
professional, the investment professional may impose a fee for wire
purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
Your wire must be received by the transfer agent in good order at the
applicable fund's designated wire bank.
You are advisesd to wire funds as early in the day as possible and to
provide advance notice to Fidelity Client Services for large purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT
By Exchange from:
(small solid bullet) Fidelity Advisor fund $1,000
(small solid bullet) Fidelity Advisor retirement accounts $500
Program account $10,000
TO ADD TO AN ACCOUNT
By Exchange from:
(small solid bullet) Fidelity Advisor fund $250
(small solid bullet) Fidelity Advisor retirement accounts $100
Program account None
MINIMUM BALANCE
By Exchange from:
(small solid bullet) Fidelity Advisor fund $500
(small solid bullet) Fidelity Advisor retirement accounts None
Program account $10,000
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent, less any applicable CDSC. NAV is normally calculated at
2:00 p.m. and 4:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to Class B shares of a Fidelity Advisor
fund , which can be requested by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR NON-RETIREMENT ACCOUNT SHARES,
please leave at least $500 worth of shares in your account opened by
exchange from Fidelity Advisor Class B shares (non-Program account) or
$10,000 worth of shares in your Program account to keep it open.
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service in
advance.
You will receive the NAV next determined after your investment professional
has submitted your redemption order.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner,
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity Advisor account with a different registration, or
(small solid bullet) You wish to have redemption proceeds wired to a
non-predesignated bank account.
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Deliver your letter to your investment professional, or mail it to the
following address:
(small solid bullet) If you purchased your shares through a broker-dealer
or insurance representative:
Daily Money Fund:
U. S. Treasury Portfolio - Class B
P.O. Box 8302
Boston, MA 02266-8302
(small solid bullet) If you purchased your shares through a bank
representative:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
Unless otherwise instructed, the transfer agent will send a check to the
record address.
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ACC OUNT TYPE SPECIAL REQUIREMENTS
PHONE All account types except (small solid bullet) Maximum check request: $100,000.
YOUR INVESTMENT retirement (small solid bullet) You may exchange to Class B of Fidelity
PROFESSIONAL All account types Advisor funds if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
(phone_graphic)
Mail or in Person (mail_graphic)
(hand_graphic) Individual, Joint Tenant, (small solid bullet) The letter of instruction (with signature
Sole Proprietorship, guaranteed) must be signed by all persons
UGMA, UTMA required to sign for transactions, exactly as
their names appear on the account and sent
Retirement account to your investment professional.
(small solid bullet) The account owner should complete a
retirement distribution form. Contact your
investment professional or, if you
purchased your shares through a
broker-dealer or insurance representative,
call 1-800-522-7297. If you purchased your
shares through a bank representative, call
1-800-843-3001.
Trust (small solid bullet) The trustee must sign the letter indicating
capacity as trustee. If the trustee's name is
not in the account registration, provide a
copy of the trust document certified within
the last 60 days.
Business or Organization (small solid bullet) At least one person authorized by
corporate resolution to act on the account
must sign the letter (with signature
guaranteed).
Executor, Administrator, (small solid bullet) For instructions, contact your investment
Conservator/Guardian professional or, if you purchased your
shares through a broker-dealer or
insurance representative, call
1-800-522-7297. If you purchased your
shares through a bank representative, call
1-800-843-3001.
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire feature before
using it. To verify that it is in place, contact
your investment professional or, if you
purchased your shares through a
broker-dealer or insurance representative,
call 1-800-522-7297. If you purchased your
shares through a bank representative, call
1-800-843-3001. Minimum wire: $500.
(small solid bullet) Redemption proceeds will be wired via the
Federal Reserve Wire System to your bank
account of record.
(small solid bullet) Your wire redemption request must be
received by the transfer agent before 4:00
p.m. Eastern time for money to be wired on
the next business day.
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INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through Friday,
8:30 a.m. to 6:00 p.m. Eastern time.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in a
fund. Call your investment professional or Fidelity Client Services if you
need additional copies of financial reports, prospectuses, or historical
account information.
One easy way to pursue your financial goals is to invest money regularly.
The fund offers a convenient service that lets you transfer money from
Class B shares to Class B shares of a Fidelity Advisor fund ,
automatically. While regular investment plans do not guarantee a profit and
will not protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses, and
other long-term financial goals. Certain restrictions apply for retirement
accounts. Call your investment professional or Fidelity Client Services for
more information.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO A FIDELITY
ADVISOR FUND
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MINIMUM EXCHANGE AMOUNT FREQUENCY SETTING UP OR CHANGING
$100 Monthly, quarterly, (small solid bullet) To establish a Program account, contact Fidelity
semi-annually, or Client Services or your investment professional.
annually (small solid bullet) To change the amount or frequency of your
investment, contact your investment professional
directly or, if you purchased your shares through a
broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares
through a bank representative, call 1-800-843-3001.
(small solid bullet) The account from which the exchanges are to be
processed must have a minimum balance of
$10,000. The account into which the exchange is
being processed must have a minimum of $1,000.
(small solid bullet) Class B shares must be exchanged for Class B
shares of a Fidelity Advisor fund within 18 months
from the date of purchase.
(small solid bullet) The Program is not recommended for purchasing
Class B shares of Fidelity Advisor Intermediate
Bond Fund or Fidelity Advisor Intermediate Income
Fund by exchange because of their CDSC
schedules. Contact Fidelity Client Services for
additional information.
(small solid bullet) Both accounts must have the same registrations
and taxpayer ID numbers.
(small solid bullet) Call at least 2 business days prior to your next
scheduled exchange date.
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SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. Class B offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your application, you
will be assigned this option.
2. CASH OPTION. You will be sent a check or wire for your dividend and
capital gain distributions, if any.
For retirement accounts, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
Shares purchased through reinvestment of dividend and capital gain
distributions are not subject to a sales charge.
Dividends will be reinvested at Class B's NAV on the last day of the month.
Capital gain distributions, if any, will be reinvested at the NAV as of the
record date of the distribution. The mailing of distribution checks will
begin within seven days.
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions,
if any, are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax adviser for details and up-to-date information on the
tax laws in your state.
For the fiscal year ended 1996, 21.0 % of U.S. Treasury Portfolio's
income distributions was derived from interest on U.S. Government
securities which is generally exempt from state income tax.
Every January, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS and each class's NAV is normally calculated
each day that both the Federal Reserve Bank of New York (New York Fed) and
the New York Stock Exchange (NYSE) are open. The following holiday closings
have been scheduled for 1996: New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day, and
Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the New York Fed or the NYSE may modify its holiday
schedule at any time. On any day that the New York Fed or the NYSE closes
early, the principal government securities markets close early (such as on
days in advance of holidays generally observed by participants in such
markets), or as permitted by the SEC, the right is reserved to advance the
time on that day by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the New York Fed or the NYSE is closed, C lass B's NAV
may be affected on days when investors do not have access to the fund to
purchase or redeem shares. Certain Fidelity funds may follow different
holiday closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Class B is
computed by adding Class B's pro rata share of the value of the fund's
investments, cash, and other assets, subtracting Class B's pro rata share
of the value of the fund's liabilities, subtracting the liabilities
allocated to Class B, and dividing the result by the number of Class B
shares outstanding. The fund values its portfolio securities on the basis
of amortized cost. This method minimizes the effect of changes in a
security's market value and helps the fund maintain a stable $1.00 share
price.
THE OFFERING PRICE (price to buy one share) is Class B's NAV. The
REDEMPTION PRICE (price to sell one share) is Class B's NAV, minus any
applicable CDSC.
Class B shares purchased by exchange retain the CDSC schedule that was in
effect when you originally purchased the Fidelity Advisor fund Class B
shares that you exchanged for Class B shares of the fund .
Class B shares purchased directly in connection with the Program
will be assessed a CDSC based on the following schedule:
From Date of Purchase Contingent
Deferred
Sales Charge
Less than 1 year 4%
1 year to less than 2 years 3%
2 years to less than 3 years 3%
3 years to less than 4 years 2%
4 years to less than 5 years 1%
5 years to less than 6 years [A] 0%
[A] AFTER A MAXIMUM HOLDING PERIOD OF SIX YEARS, CLASS B SHARES WILL
CONVERT AUTOMATICALLY TO INITIAL CLASS SHARES OF THE FUND.
Investment professionals with whom FDC has agreements receive as
compensation from FDC a concession equal to 3.00% of the amount of
your direct purchase of Class B shares.
The CDSC will be calculated based on the lesser of the cost of Class B
shares at the initial date of purchase or the value of Class B shares at
redemption, not including any reinvested dividends or capital gains.
Class B shares acquired through distributions (dividends or capital gains)
will not be subject to a CDSC. In determining the applicability and
rate of any CDSC at redemption, Class B shares representing reinvested
dividends and capital gains, if any, will be redeemed first, followed by
Class B shares that have been held for the longest period of time.
CONVERSION FEATURE. After a maximum holding period of six years from the
initial date of purchase, Class B shares convert automatically to Initial
Class shares of the fund. Conversion to Initial Class shares will be made
at NAV. At the time of conversion, a portion of the Class B shares
purchased through the reinvestment of dividends or capital gains (Dividend
Shares) will also convert to Initial Class shares. The portion of Dividend
Shares that will convert is determined by the ratio of your converting
Class B non-Dividend Shares to your total Class B non-Dividend Shares.
INITIAL CLASS SHARES. The fund offers Initial Class shares to individual,
institutional and corporate investors at NAV. Initial Class shares may be
exchanged for shares of other Fidelity funds. If Initial Class shares were
purchased in connection with a Fidelity Advisor fund program, those Initial
Class shares may be exchanged for Class A shares of Fidelity Advisor funds.
Transfer agency, dividend disbursing and shareholder services for Initial
Class shares are performed by FIIOC. Initial Class shares have adopted a
Distribution and Service Plan that recognizes that FMR may use its
resources, including its management fee, to pay expenses associated with
the sale of Initial Class shares. The Board of Trustees has authorized FMR
to pay FDC a distribution fee from its management fee revenue, past profits
or other resources at an annual rate of up to 0.40 % of the Initial
Class's average net assets. For the fiscal year ended 1996, FMR paid FDC at
the annual rate of 0.29 % of the Initial Class's average net assets
throughout the month. Investment professionals may receive different levels
of compensation with respect to one class of shares over another class of
shares in the fund. For the fiscal year ended 1996, total operating
expenses for the Initial Class was 0.65 % of average net assets,
after voluntary expense reimbursements of 0.05 % by FMR.
For more information about the CDSC, including the conversion feature and
the permitted circumstances for CDSC waivers, contact your investment
professional.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class B
shares, you may reinvest an amount equal to all or a portion of the
redemption proceeds in Class B shares of the fund or Class B shares of a
Fidelity Advisor fund, at the NAV next determined after receipt of your
investment order, provided that such reinvestment is made within 30 days of
redemption. Under these circumstances, the dollar amount of the CDSC you
paid will be reimbursed to you by reinvesting that amount in Class B shares
of the fund or Class B shares of the Fidelity Advisor fund, as applicable.
You must reinstate your Class B shares into an account with the same
registration. This privilege may be exercised only once by a shareholder
with respect to the fund and certain restrictions may apply. For purposes
of the CDSC schedule, the holding period will continue as if the Class B
shares had not been redeemed.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of the confirmation
statements immediately after receipt. If you do not want the ability to
redeem and exchange by telephone, call Fidelity for instructions.
Additional documentation may be required from corporations, associations,
and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Fidelity
Client Services in advance of large transactions.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
by exchange. See "Exchange Restrictions" on page . Purchase by
exchange may be refused if, in FMR's opinion, they would disrupt management
of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees a fund or Fidelity
has incurred.
(small solid bullet) You begin to earn dividends as of the first business
day following the day your funds are received and accepted by the
transfer agent.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) Shares will earn dividends through the day of
redemption; however , shares redeemed on a Friday or prior to a
holiday will continue to earn dividends until the next business day.
(small solid bullet) The fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
When the NYSE or the New York Fed is closed (or when trading is restricted)
for any reason other than its customary weekend or holiday closings, or
under any emergency circumstances as determined by the SEC to merit such
action, the fund may suspend redemption or postpone payment dates. In cases
of suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next determined
after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 (for non-Program accounts)or
$10,000 (for Program accounts) due to redemption, the account may be closed
and the proceeds less any applicable CDSC, may be mailed to your address of
record. You will be given 30 days' notice that your account will be closed
unless it is increased to the minimum.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging Class B shares for
Class B shares of a Fidelity Advisor fund seven calendar days after
purchase. Currently, there is no limit on the number of exchanges out of
the fund.
Exchange instructions may be given by you in writing or by telephone
directly to the transfer agent or through your investment professional. For
more information on entering an exchange transaction, please consult your
investment professional.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by contacting your investment professional or calling Fidelity
Client Services at 1-800-843-3001 between 8:30 a.m. and 4:00 p.m. Eastern
time.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name, class
name, account number, the number of shares to be redeemed, and the name of
the fund to be purchased. Written requests for exchange should be mailed to
Fidelity Client Services at the address on page .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class B shares will be redeemed
at the next determined NAV after your order is received and accepted by the
transfer agent. Shares of the fund to be acquired will be purchased at its
next determined NAV after redemption proceeds are made available. You
should note that, under certain circumstances, the fund may take up to
seven days to make redemption proceeds available for the exchange purchase
of shares of another fund. In addition, please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or redemption
fees applicable to exchanges out of a fund.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
(small solid bullet) Any exchanges of Class B shares are not subject to a
CDSC.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
SALES CHARGE REDUCTIONS AND WAIVERS
THE CDSC ON CLASS B SHARES MAY BE WAIVED:
1. In cases of disability or death, provided that Class B shares are
redeemed within one year following the death or the initial determination
of disability; or
2. In connection with a total or partial redemption related to certain
distributions from retirement plans or accounts.
No dealer, sales representative, or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This Prospectus and the related SAI do not
constitute an offer by the fund or by FDC to sell or to buy shares of the
fund to any person to whom it is unlawful to make such offer.
[This page intentionally left blank.]
DAILY MONEY FUND :
U.S. TREASURY PORTFOLIO: CLASS B
CROSS REFERENCE SHEET
Form N-1A Item Number
Part B Statement of Additional Information
10 a,b Cover Page
11 Table of Contents
12 *
13 a,b,c Investment Policies and Limitations
d *
14 a,b,c Trustees and Officers
15 a *
b Description of the Trust
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract
c *
d Management Contract
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Contracts with FMR Affiliates
17 a Portfolio Transactions
b *
c Portfolio Transactions
d, e *
18 a Description of the Trust
b *
19 a Additional Purchase and Redemption Information
b Valuation
c *
20 Distributions and Taxes
21 a(i,ii) Contracts with FMR Affiliates, Distribution and Service Plan
a(iii),b,c *
22 Performance
23 Financial Statements for the fiscal period ended July 31, 1996 are
incorporated herein by reference.
* Not Applicable
DAILY MONEY FUND:
MONEY MARKET PORTFOLIO
U.S. TREASURY PORTFOLIO
INITIAL CLASS
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 19, 1996
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
September 19, 1996). Please retain this document for future reference. The
funds' financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended July 31, 1996, are incorporated
herein by reference. To obtain an additional copy of the Prospectus and
Annual Report, please call Fidelity Client Services at 1-800-843-3001.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange , and Redemption Information 12
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Distribution and Service Plans
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISOR
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
The Bank of New York
DMF-ptb- 0 996
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation shall be
determined immediately after and as a result of a fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with each fund's investment policies and
limitations.
Each fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (1940 Act))
of each fund. However, except for the fundamental investment limitations
listed below, the investment policies and limitations described in this SAI
are not fundamental and may be changed without shareholder approval.
INVESTMENT LIMITATIONS OF U.S. TREASURY PORTFOLIO
THE FOLLOWING ARE U.S. TREASURY PORTFOLIO'S FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of such issuer;
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than the securities issued
or guaranteed by the U.S. Government or any of its agencies or
instrumentalities), if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(9) write or purchase any put or call options.
(10) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies and limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) Subject to revision upon 60 days' notice to shareholders, the fund
does not currently intend to purchase securities on margin, except that the
fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(vi) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends,
through offers of exchange, or as a result of reorganization,
consolidation, or merger , or (ii) to securities of other open-end
investment companies managed by FMR or a successor or affiliate purchased
pursuant to an exemptive order granted by the Securities and Exchange
Commission (SEC).
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in securities of business
enterprises that, including predecessors, have a record of less than three
years continuous operation.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development program s or leases.
(x) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
(xi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's policies on quality and maturity, see section entitled
"Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF MONEY MARKET PORTFOLIO
THE FOLLOWING ARE MONEY MARKET PORTFOLIO'S FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of such issuer;
provided, however, that with respect to 25% of its total assets 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities), if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(9) write or purchase any put or call options.
(10) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies and limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer; provided
that the fund may invest up to 10% of its total assets in the first tier
securities of a single issuer for up to three business days. (This limit
does not apply to securities of other open-end investment companies managed
by FMR or a successor or affiliate purchased pursuant to an exemptive order
granted by the SEC.)
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) Subject to revision upon 60 days' notice to shareholders, the fund
does not currently intend to purchase securities on margin, except that the
fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
(vii) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contract.
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends,
through offers of exchange, or as a result of reorganization,
consolidation, or merger , or (ii) to securities of other open-end
investment companies managed by FMR or a successor or affiliate purchased
pursuant to an exemptive order granted by the SEC.
(ix) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in securities of business
enterprises that, including predecessors, have a record of less than three
years continuous operation;
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development program s or leases.
(xi) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
(xii) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (ix), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises".
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
SHAREHOLDER NOTICE. U.S. Treasury Portfolio invests only in U.S. Treasury
securities and repurchase agreements for these securities. This operating
policy may be changed upon 90 days' notice to shareholders.
Each of U.S. Treasury Portfolio and Money Market Portfolio do not intend to
purchase futures contracts or options on futures contracts. This operating
policy may be changed only upon approval by the Board of Trustees and 60
days' notice to shareholders.
Th e following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that doing so will help the fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the SEC, the Board of Trustees has
established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
ASSET-BACKED SECURITIES include pools of mortgages, loans, receivables or
other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities and, in
certain cases, supported by letters of credit, surety bonds, or other
credit enhancements. The value of asset-backed securities may also be
affected by the creditworthiness of the servicing agent for the pool, the
originator of the loans or receivables, or the entities providing the
credit support.
CASH MANAGEMENT. A fund may invest in money market securities, in
a pooled account of repurchase agreements, and in a money market fund,
available only to FMR-managed funds and accounts, whose goal is to seek
high current income while maintaining a stable $1.00 share price. A major
change in interest rates or a default on the fund's investments could cause
its share price to change.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund does not participate in further gains or losses with
respect to the security. If the other party to a delayed-delivery
transaction fails to deliver or pay for the securities, the fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S.
dollar-denominated time deposits, certificates of deposit, and bankers'
acceptances of U.S. banks and their branches located outside of the United
States, U.S. branches and agencies of foreign banks, and foreign branches
of foreign banks. A fund may also invest in U.S. dollar-denominated
securities issued or guaranteed by other U.S. or foreign issuers, including
U.S. and foreign corporations or other business organizations, foreign
governments, foreign government agencies or instrumentalities, and U.S. and
foreign financial institutions, including savings and loan institutions,
insurance companies, mortgage bankers, and real estate investment trusts,
as well as banks.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by governmental
regulation. Payment of interest and principal on these obligations may also
be affected by governmental action in the country of domicile of the branch
(generally referred to as sovereign risk). In addition, evidence of
ownership of portfolio securities may be held outside of the United States
and a fund may be subject to the risks associated with the holding of such
property overseas. Various provisions of federal law governing the
establishment and operation of U.S. branches do not apply to foreign
branches of U.S. banks.
Obligations of U.S. branches and agencies of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by federal and state
regulation, as well as by governmental action in the country in which the
foreign bank has its head office.
Obligations of foreign issuers involve certain additional risks. These
risks may include future unfavorable political and economic developments,
withholding taxes, seizures of foreign deposits, currency controls,
interest limitations, or other governmental restrictions that might affect
payment of principal or interest, or the ability to honor a credit
commitment. Additionally, there may be less public information available
about foreign entities. Foreign issuers may be subject to less governmental
regulation and supervision than U.S. issuers. Foreign issuers also
generally are not bound by uniform accounting, auditing, and financial
reporting requirements comparable to those applicable to U.S. issuers.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days. Also, FMR may determine some restricted
securities and time deposits to be illiquid.
In the absence of market quotations, illiquid investments are valued for
purposes of monitoring amortized cost valuation at fair value as determined
in good faith by a committee appointed by the Board of Trustees. If through
a change in values, net assets, or other circumstances, a fund were in a
position where more than 10% of its net assets was invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. U.S.
Treasury Portfolio currently intends to participate in this program only as
a borrower. A fund will borrow through the program only when the costs are
equal to or lower than the cost of bank loans. Interfund loans and
borrowings normally extend overnight, but can have a maximum duration of
seven days. Loans may be called on one day's notice. Money
Market Portfolio will lend through the program only when the returns are
higher than those available from other short-term instruments (such as
repurchase agreements). A fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay in
repayment to a lending fund could result in a lost investment opportunity
or additional borrowing costs.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor any
other regulatory authority has ruled definitively on certain legal issues
presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the funds.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. A fund may own a municipal
security directly or through a participation interest.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the funds may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be rated in accordance with applicable rules in one of the
two highest categories for short-term securities by at least two nationally
recognized rating services (or by one, if only one rating service has rated
the security); or, if unrated, judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second tier"
securities. First tier securities are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1), and second tier securities
are those deemed to be in the second highest rating category (e.g.,
Standard & Poor's A-2). Split-rated securities may be determined to be
either first tier or second tier based on applicable regulations.
A fund may not invest more than 5% of its total assets in second tier
securities. In addition, a fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
A fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, a fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, each fund anticipates holding restricted
securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short. Short sales could be used to protect the net
asset value per share (NAV) of the fund in anticipation of increased
interest rates, without sacrificing the current yield of the securities
sold short. If a fund enters into a short sale against the box, it will be
required to set aside securities equivalent in kind and amount to the
securities sold short (or securities convertible or exchangeable into such
securities) and will be required to hold such securities while the short
sale is outstanding. The fund will incur transaction costs,
including interest expenses, in connection with opening, maintaining, and
closing short sales against the box.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or another entity in determining whether to purchase a
security supported by a letter of credit guarantee, insurance or other
source of credit or liquidity. In evaluating the credit of a foreign bank
or other foreign entities, FMR will consider whether adequate public
information about the entity is available and whether the entity may be
subject to unfavorable political or economic developments, currency
controls, or other government restrictions that might affect its ability to
honor its commitment.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a U.S. Government
security and selling them separately. U.S. Treasury STRIPS (Separate
Trading of Registered Interest and Principal of Securities) are created
when the coupon payments and the principal payment are stripped from an
outstanding Treasury security by a Federal Reserve Bank. Bonds
issued by government agencies also may be stripped in this fashion.
Privately stripped government securities are created when a dealer deposits
a U.S. Treasury security or other U.S. Government security with a custodian
for safekeeping. The custodian issues separate receipts for the
coupon payments and the principal payment, which the dealer then sells.
Proprietary receipts, such as Certificates of Accrual on Treasury
Securities (CATS) and Treasury Investment Growth Receipts (TIGRS), and
generic receipts, such as Treasury Receipts (TRs), are privately stripped
U.S. Treasury securities.
Because the SEC does not consider privately stripped government securities
to be U.S. Government securities for purposes of Rule 2a-7, a fund
must evaluate them as it would non-government securities pursuant to
regulatory guidelines applicable to all money market funds.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR has granted investment management authority to the
sub-adviser (see the section entitled "Management Contracts"), and the
sub-adviser is authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. Securities purchased and sold by a
fund generally will be traded on a net basis (i.e., without commission). In
selecting broker-dealers, subject to applicable limitations of the federal
securities laws, FMR considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character
of the markets for the security to be purchased or sold; the execution
efficiency, settlement capability, and financial condition of the
broker-dealer firm; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). FMR
maintains a listing of broker-dealers who provide such services on a
regular basis. However, as many transactions on behalf of the funds are
placed with broker-dealers (including broker-dealers on the list) without
regard to the furnishing of such services, it is not possible to estimate
the proportion of such transactions directed to such broker-dealers solely
because such services were provided. The selection of such broker-dealers
generally is made by FMR (to the extent possible consistent with execution
considerations) based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under the
name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary
of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman
of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the
benefit of the Johnson family own, directly or indirectly, more than 25% of
the voting common stock of FIL.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
During fiscal 1994, 1995, and 1996, the funds paid no commissions to
brokerage firms that provided research services.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Co. (FSC) normally determines each Initial Class 's
NAV at 2:00 p.m. and 4:00 p.m. Eastern time. The valuation of portfolio
securities is determined as of these times for the purpose of computing
each Initial Class 's NAV.
Portfolio securities and other assets are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its current market value. The amortized cost value of an instrument
may be higher or lower than the price a fund would receive if it sold the
instrument.
During periods of declining interest rates, a class 's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing each fund's investments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. Each fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page .
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize each fund's NAV
at $1.00. At such intervals as they deem appropriate, the Trustees consider
the extent to which NAV calculated by using market valuations would deviate
from $1.00 per share. If the Trustees believe that a deviation from a
fund's amortized cost per share may result in material dilution or other
unfair results to shareholders, the Trustees have agreed to take such
corrective action, if any, as they deem appropriate to eliminate or reduce,
to the extent reasonably practicable, the dilution or unfair results. Such
corrective action could include selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; redeeming shares in kind; establishing NAV
by using available market quotations; and such other measures as the
Trustees may deem appropriate.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Yield and total return fluctuate in
response to market conditions and other factors.
YIELD CALCULATIONS. To compute a class's yield for a period, the net change
in value of a hypothetical account containing one share reflects the value
of additional shares purchased with dividends from the one original share
and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. A fund also may
calculate an effective yield by compounding the base period return over a
one-year period. In addition to the current yield, the funds may quote
yields in advertising based on any historical seven-day period. Yields for
the funds are calculated on the same basis as other money market funds, as
required by applicable regulations.
Yield information may be useful in reviewing a class's performance and in
providing a basis for comparison with other investment alternatives.
However, each class's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
class's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the class's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the class's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a class's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the class's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
class over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a class's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of a class.
In addition to average annual total returns, a class may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL FUND RESULTS. The following table shows each fund's Initial
Class 7-day yield and total returns for the period ended July 31, 1996.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Seven-Day One Five Ten One Five Ten
Yield Year Years Years Year Years Years
Money Market Portfolio 4.84% 5.13% 4.06% 5.68% 5.13% 21.99% 73.83%
U.S. Treasury Portfolio 4.78% 5.06% 4.00% 5.57% 5.06% 21.64% 71.88%
</TABLE>
Note: If FMR had not reimbursed certain fund expenses during these periods,
U.S. Treasury Portfolio's and Money Market Portfolio's Initial Class yields
would have been 4.72 % and 4.73 %, respectively; and total
returns would have been lower.
The following table shows the income and capital elements of each fund's
Initial Class cumulative total return. The table compares the Initial
Class's return to the record of the Standard & Poor's 500 Index (S&P
500 (registered trademark)), the Dow Jones Industrial Average (DJIA), and
the cost of living (measured by the Consumer Price Index, or CPI) over the
same period. The CPI information is as of the month-end closest to the
initial investment date for each fund. The S&P 500 and DJIA comparisons are
provided to show how each class's total return compared to the record of a
broad average of common stocks and a narrower set of stocks of major
industrial companies, respectively, over the same period. Of course, since
each fund invests in short-term fixed-income securities, common stocks
represent a different type of investment from the fund. Common stocks
generally offer greater growth potential than the funds, but generally
experience greater price volatility, which means greater potential for
loss. In addition, common stocks generally provide lower income than a
fixed-income investment such as the funds. Figures for the S&P 500 and DJIA
are based on the prices of unmanaged groups of stocks and, unlike the
funds' returns, do not include the effect of paying brokerage commissions
or other costs of investing.
U.S. TREASURY PORTFOLIO - INITIAL CLASS
HISTORICAL FUND RESULTS
During the ten year period ended July 31, 1996, a hypothetical $10,000
investment in U.S. Treasury Portfolio-Initial Class would have grown to
$ 17,188, assuming all distributions were reinvested. This was a
period of fluctuating interest rates and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in Initial Class today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1987 $ 10,000 $ 581 $ 0 $ 10,581 $ 13,932 $ 14,959 $ 10,393
1988 10,000 1,263 0 11,263 12,300 12,815 10,822
1989 10,000 2,237 0 12,237 16,225 16,616 11,361
1990 10,000 3,245 0 13,245 17,279 18,842 11,909
1991 10,000 4,131 0 14,131 19,485 20,352 12,438
1992 10,000 4,732 0 14,732 21,979 23,524 12,831
1993 10,000 5,141 0 15,14 1 23,902 25,271 13,187
1994 10,000 5,578 0 15,578 25,134 27,622 13,553
1995 10,000 6,361 0 16,361 31,696 35,458 13,927
1996 10,000 7,188 0 17,188 36,948 42,567 14,338
</TABLE>
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on July 31,
1986, the net amount invested in Initial Class shares was $10,000. The cost
of the initial investment ($10,000), together with the aggregate cost of
reinvested dividends for the period covered (their cash value at the time
they were reinvested), amounted to $17,188. If distributions had not
been reinvested, the amount of distributions earned from the Initial Class
over time would have been smaller, and cash payments (dividends) for the
period would have amounted to $ 5,430. The fund did not distribute
any capital gains during the period. Tax consequences of different
investments have not been factored into the above figures.
MONEY MARKET PORTFOLIO - INITIAL CLASS
HISTORICAL FUND RESULTS
During the ten year period ended July 31, 1996, a hypothetical $10,000
investment in Money Market Portfolio - Initial Class would have grown
to $17,383, assuming all distributions were reinvested. This was a
period of fluctuating interest rates and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in Initial Class today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1987 $ 10,000 $ 587 $ 0 $ 10,587 $ 13,932 $ 14,959 $ 10,393
1988 10,000 1,308 0 11,308 12,300 12,815 10,822
1989 10,000 2,304 0 12,304 16,225 16,616 11,361
1990 10,000 3,329 0 13,329 17,279 18,842 11,909
1991 10,000 4,250 0 14,250 19,485 20,352 12,438
1992 10,000 4,850 0 14,850 21,979 23,524 12,831
1993 10,000 5,269 0 15,269 23,902 25,271 13,187
1994 10,000 5,724 0 15,724 25,134 27,622 13,553
1995 10,000 6,536 0 16,536 31,696 35,458 13,927
1996 10,000 7,383 0 17,383 36,948 42,567 14,338
</TABLE>
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on July 31,
1986, the net amount invested in Initial Class shares was $10,000. The cost
of the initial investment ($10,000), together with the aggregate cost of
reinvested dividends for the period covered (their cash value at the time
they were reinvested), amounted to $ 17,383. If distributions had not
been reinvested, the amount of distributions earned from the Initial Class
over time would have been smaller, and cash payments (dividends) for the
period would have amounted to $5,543 . The fund did not distribute
any capital gains during the period. Tax consequences of different
investments have not been factored into the above figures.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are prepared without regard to tax
consequences. Lipper may also rank funds based on yield. In addition to the
mutual fund rankings, a class's performance may be compared to stock, bond,
and money market mutual fund performance indices prepared by Lipper or
other organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of investment.
For example, while stock mutual funds may offer higher potential returns,
they also carry the highest degree of share price volatility. Likewise,
money market funds may offer greater stability of principal, but generally
do not offer the higher potential returns available from stock mutual
funds.
From time to time, a class's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All
Taxable, which is reported in the MONEY FUND REPORT(registered trademark),
covers over 817 taxable money market funds and the IBC/Donoghue's
MONEY FUND AVERAGES(trademark)/All Tax-Free, which is reported in the MONEY
FUND REPORT(registered trademark), covers over 411 tax-free money
market funds.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of July 31, 1996, FMR advised over $ 27 billion tax-free
fund assets , over $ 90 billion in money market fund
assets , over $263 billion in equity fund assets , over
$ 54 billion in international fund assets , and over $ 23
billion in Spartan fund assets. The funds may reference the growth and
variety of money market mutual funds and the adviser's innovation and
participation in the industry. The equity funds under management figure
represents the largest amount of equity fund assets under management by a
mutual fund investment adviser in the United States, making FMR America's
leading equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the purpose
of researching and managing investments abroad.
In addition to performance rankings, each class fund may compare its
total expense ratio to the average total expense ratio of similar funds
tracked by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a class's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 (the Rule) under the 1940 Act, each fund is
required to give shareholders at least 60 days' notice prior to terminating
or modifying its exchange privilege. Under the Rule, the 60-day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) a fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or a fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the p rospectus, each fund has notified shareholders that it
reserves the right at any time, without prior notice, to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest effectively in accordance with its investment objective
and policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends-received deduction. A portion of each fund's
dividends derived from certain U.S. Government obligations may be exempt
from state and local taxation. Each fund will send each shareholder a
notice in January describing the tax status of dividend and capital gain
distributions (if any) for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its NAV at $1.00 per share. Each fund does not anticipate earning
long-term capital gains on securities held by the fund.
As of July 31, 1996, Money Market Portfolio and U.S. Treasury Portfolio had
capital loss carryforwards aggregating approximately $822,000 and
$438,000, respectively. The loss carryforward for Money Market
Portfolio of which $30,000, $35,000, $125,000, $584,000 and $48,000
will expire on July 31, 2000, 2001, 2002, 2003, and 2004
respectively, is available to offset future capital gains. The loss
carryforward for U.S. Treasury Portfolio of which $ 438,000 will
expire on July 31, 2002, is available to offset future capital
gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state law provides for a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. Government securities. Some
states limit this to mutual funds that invest a certain amount in U.S.
Government securities, and some types of securities, such as repurchase
agreements and some agency backed securities, may not qualify for this
benefit. The tax treatment of your dividend distributions from a fund will
be the same as if you directly owned your proportionate share of the U.S.
Government securities in each fund's portfolio. Because the income earned
on most U.S. Government securities in which each fund invests is exempt
from state and local income taxes, the portion of your dividends from each
fund attributable to these securities will also be free from income taxes.
The exemption from state and local income taxation does not preclude states
from assessing other taxes on the ownership of U.S. Government securities.
In a number of states, corporate franchise (income) tax laws do not exempt
interest earned on U.S. Government securities whether such securities are
held directly or through a fund.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. Because Money Market Portfolio does not currently anticipate
that securities of foreign issuers will constitute more than 50% of its
total assets at the end of its fiscal year, shareholders should not expect
to claim a foreign tax credit or deduction on their federal income tax
returns with respect to foreign taxes withheld.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
Each fund is treated as a separate entity from the other funds of Daily
Money Fund for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board , and executive officers
of the trust are listed below. Except as indicated, each individual has
held the office shown or other offices in the same company for the last
five years. Trustees and officers elected or appointed to Daily Money Fund
prior to the funds' conversion from a series of a Massachusetts
business trust served in identical capacities. All persons named as
Trustees and Members of the Advisory Board also serve in similar capacities
for other funds advised by FMR. The business address of each Trustee and
officer who is an "interested person" (as defined in the 1940 Act) is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. The business address of all the other Trustees and Members of
the Advisory Board is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Those Trustees who are "interested persons" by
virtue of their affiliation with either the trust or FMR are indicated by
an asterisk (*).
*EDWARD C. JOHNSON 3d (66), Trustee and President, is Chairman,
President, Chief Executive Officer and a Director of FMR Corp.; a
Director and Chairman of the Board and of the Executive Committee of FMR;
Chairman and a Director of FMR Texas Inc., Fidelity Management & Research
(U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD (55), Trustee and Senior Vice President, is Managing
Director of FMR Corp.; President and Director of FMR , FMR
Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
RALPH F. COX (64), Trustee (1991), is a management consultant (1994). Prior
to February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Sanifill Corporation
(non-hazardous waste, 1993) , CH2M Hill Companies (engineering), Rio
Grande, Inc. (oil and gas production), and Daniel Industries (petroleum
measurement equipment manufacturer). In addition, he is a member of
advisory boards of Texas A&M University and the University of Texas at
Austin.
PHYLLIS BURKE DAVIS (64), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (72), Trustee and Chairman of the non-interested Trustees,
is a financial consultant. Prior to September 1986, Mr. Flynn was Vice
Chairman and a Director of the Norton Company (manufacturer of industrial
devices). He is currently a Trustee of College of the Holy Cross and Old
Sturbridge Village, Inc . , and he previously served as a Director of
Mechanics Bank (1971-1995).
E. BRADLEY JONES (68), Trustee. Prior to his retirement in 1984, Mr. Jones
was Chairman and Chief Executive Officer of LTV Steel Company. He is a
Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products), and
he previously served as a Director of NACCO Industries, Inc. (mining and
marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995).
In addition, he serves as a Trustee of First Union Real Estate Investments,
a Trustee and member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK (63), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the
Greenwich Hospital Association, a Member of the Public Oversight Board of
the American Institute of Certified Public Accountants' SEC Practice
Section (1995), and as a Public Governor of the National Association of
Securities Dealers, Inc. (1996).
*PETER S. LYNCH (53), Trustee, is Vice Chairman and Director of FMR (1992).
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
WILLIAM O. McCOY (62), Member of the Advisory Board (1996), is the Vice
President of Finance for the University of North Carolina (16-school
system, 1995). Prior to his retirement in December 1994, Mr. McCoy
was Vice Chairman of the Board of BellSouth Corporation
(telecommunications) and President of BellSouth Enterprises. He is
currently a Director of Liberty Corporation (holding company), Weeks
Corporation of Atlanta (real estate, 1994), and Carolina Power and Light
Company (electric utility, 1996). Previously, he was a Director of
First American Corporation (bank holding company, 1979-1996). In
addition, Mr. McCoy serves as a member of the Board of Visitors for the
University of North Carolina at Chapel Hill (1994) and for the Kenan Flager
Business School (University of North Carolina at Chapel Hill).
GERALD C. McDONOUGH (67), Trustee and Vice-Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Prior to his retirement in July 1988, he was Chairman and Chief
Executive Officer of Leaseway Transportation Corp. (physical distribution
services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal
working, telecommunications and electronic products), Brush-Wellman Inc.
(metal refining), York International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp. (water treatment equipment,
1992), and Associated Estates Realty Corporation (a real estate investment
trust, 1993).
EDWARD H. MALONE (71), Trustee. Prior to his retirement in 1985, Mr. Malone
was Chairman, General Electric Investment Corporation and a Vice President
of General Electric Company. He is a Director of Allegheny Power Systems,
Inc. (electric utility), General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate
Property Investors, the EPS Foundation at Trinity College, the Naples
Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and
he is a member of the Advisory Boards of Butler Capital Corporation Funds
and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (63), Trustee (1993), is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet.
THOMAS R. WILLIAMS (67), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
SARAH H. ZENOBLE (47), Vice President of FMR Texas, Inc. and of Money
Market funds advised by FMR.
LELAND BARRON (37), Vice President, is Vice President of FMR Texas, Inc.
and of other funds advised by FMR.
ARTHUR S. LORING (48), Secretary, is Senior Vice President (1993) Clerk
and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (49), Treasurer (1995), is Treasurer of the Fidelity
funds and Vice President of FMR. Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
THOMAS D. MAHER (51), Assistant Vice President, is Assistant Vice President
of Fidelity's money market funds and Vice President and Associate General
Counsel of FMR Texas Inc.
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
THOMAS J. SIMPSON (38), Assistant Treasurer (1996), is Assistant Treasurer
of Fidelity's money market funds and an employee of FMR (1996).
Prior to joining FMR, Mr. Simpson was Vice President and Fund
Controller of Liberty Investment Services (1987-1995).
The following table sets forth information describing the compensation of
each current trustee of each fund for his or her services as trustee for
the fiscal year ended July 31, 1996.
COMPENSATION TABLE
Aggregate Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J. Gary Ralph F. Phyllis Richard J. Edward C. E. Donald Peter S. William O. Gerald C. Edward H. Marvin Thomas
Burkhead* Cox Burke Flynn Johnson 3d** Bradley J. Kirk Lynch** McCoy McDonoug Malone
*** L. R.
* Davis Jones h Mann Williams
Money $ 0 $ 860 $ 836 $ 1,083 $ 0 $ 846 $ 846 $ 0 $ 216 $ 835 $ 848 $ 841 $ 845
Market
U.S. 0 720 705 915 0 714 714 0 179 705 705 705 713
Treasury
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Pension or Estimated Annual Total
Retirement Benefits Upon Compensation
Benefits Accrued Retirement from the from the Fund
as Part of Fund Fund Complex* Complex*
Expenses from the
Fund Complex*
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox 5,200 52,000 128,000
Phyllis Burke Davis 5,200 52,000 125,000
Richard J. Flynn 0 52,000 160,500
Edward C. Johnson 3d** 0 0 0
E. Bradley Jones 5,200 49,400 128,000
Donald J. Kirk 5,200 52,000 129,500
Peter S. Lynch** 0 0 0
William O. McCoy N/A N/A 0
Gerald C. McDonough 5,200 52,000 128,000
Edward H. Malone *** 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 128,000
Thomas R. Williams 5,200 52,000 125,000
</TABLE>
* Information is as of December 31, 1995 for 219 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
*** For the fiscal year ended July 31, 1996, certain of the
non-interested trustees' aggregate compensation from the funds include
accrued deferred compensation as follows: Money Market Portfolio - Edward
H. Malone, $587.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and
net income per share, and will not obligate the fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. Each fund may invest in such designated securities under
the Plan without shareholder approval.
Under a retirement program adopted in July 1988 and modified in November
1995 , each non-interested Trustee may receive payments from a
Fidelity fund during his or her lifetime based on his or her basic trustee
fees and length of service. The obligation of a fund to make such
payments is neither secured n or funded. A Trustee becomes
eligible to participate in the program at the end of the calendar year in
which he or she reaches age 72, provided that, at the time of retirement,
he or she has served as a Fidelity fund Trustee for at least five
years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H.
Witham, and David L. Yunich, all former non-interested Trustees, receive
retirement benefits under the program.
On August 31, 1996 , the Trustees and officers of each class owned,
in the aggregate, less than 1% of each class's total outstanding
shares.
As of August 31, 1996, the following owned of record or beneficially
5% or more of outstanding shares of each class.
<TABLE>
<CAPTION>
<S> <C> <C>
U. S. Treasury Portfolio - Initial First Trust, St. Paul, MN 28.71%
Class: Texas Commerce Bank, N.A., Houston, TX 15.53%
The Bank of New York, New York, NY 5.45%
U.S. Treasury Portfolio - Class B: Walnut Street Securities, St. Louis, MO 72.13%
</TABLE>
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies , and limitations. FMR also provides each fund with all
necessary office facilities and personnel for servicing each fund's
investments, compensates all officers of each fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of each fund
or FMR performing services relating to research, statistical, and
investment activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations , and analyses on a variety of
subjects to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FIIOC and FSC, each fund, or class thereof, as applicable, pays all of its
expenses, without limitation, that are not assumed by those parties. Each
fund pays for the typesetting, printing and mailing of its proxy material
to shareholders, legal expenses, and the fees of the custodian, auditor and
non-interested Trustees. Although each fund's current management contract
provides that each fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices and reports to
shareholders, the trust, on behalf of each fund has entered into a revised
transfer agent agreement with FIIOC, pursuant to which FIIOC bears the cost
of providing these services to existing shareholders of the applicable
class. Other expenses paid by each fund include interest, taxes, brokerage
commissions, each fund's proportionate share of insurance premiums and
Investment Company Institute dues, and the costs of registering shares
under federal and state securities laws. Each fund is also liable for such
non-recurring expenses as may arise, including costs of any litigation to
which each fund may be a party, and any obligation it may have to indemnify
its officers and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated September
30, 1993 which were approved by shareholders on March 24, 1993.
For the services of FMR under each contract, each fund pays FMR a monthly
management fee at the annual rate of 0.50% of average net assets throughout
the month. Fees received by FMR for the last three fiscal years are shown
in the table below.
Fiscal Year Ended Management Fees Paid to FMR
Money Market Portfolio 1996 $ 12,172,452
1995 9,232,796
1994 7,553,008
U.S. Treasury Portfolio 1996 10,004,781
1995 9,784,211
1994 13,343,263
FMR may, from time to time, voluntarily reimburse all or a portion of each
class 's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each class 's total returns and yield and
repayment of the reimbursement by each class will lower its total
returns and yield.
To comply with the California Code of Regulations, FMR will reimburse each
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating each fund's expenses for purposes of this regulation, each
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
SUB-ADVISER. FMR has entered into sub-advisory agreements with FMR Texas
pursuant to which FMR Texas has primary responsibility for providing
portfolio investment management services to each fund.
Under the sub-advisory agreements, each dated September 30, 1993, which
were approved by shareholders on March 24, 1993, FMR pays FMR Texas fees
equal to 50% of the management fee payable to FMR under its management
contract with each fund, after payments by FMR pursuant to each class's
12b-1 plan, if any. The fees paid to FMR Texas are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect from
time to time. The following table shows fees FMR paid to FMR Texas on
behalf of each fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1996 1995 1994
Money Market Portfolio $ 3,398,817 $ 2,556,301 $ 1,884,963
U.S. Treasury Portfolio 2,098,350 1,886,692 2,367,209
</TABLE>
CONTRACTS WITH FMR AFFILIATES
FIIOC, an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for Initial Class of each fund. Under this
arrangement FIIOC receives an annual account fee and an asset-based
fee , each based on account size and fund type for each retail
account and certain institutional accounts. With respect to certain
institutional retirement accounts, FIIOC receives an annual account fee and
an asset-based fee based on account type or fund type. These annual
account fees are subject to increase based on postal rate changes.
In addition, FIIOC bears the expense of typesetting, printing, and mailing
prospectuses, statements of additional information, and all other reports,
notices, and statements to shareholders, with the exception of proxy
statements. FIIOC pays out-of-pocket expenses associated with providing
transfer agent services.
FSC, an affiliate of FMR, performs the calculations necessary to determine
NAV and dividends for the Initial Class of each fund, maintains each fund's
accounting records, and administers each fund's securities lending program.
The annual fee rates for these pricing and bookkeeping services are based
on the fund's average net assets, specifically, 0 .0175% for the
first $500 million of average net assets and 0 .0075% for average net
assets in excess of $500 million. The fee is limited to a minimum of
$40,000 and a maximum of $800,000 per year. Pricing and bookkeeping fees,
including reimbursement for out-of-pocket expenses, paid to FSC for the
past three fiscal years were as follows:
Pricing and Bookkeeping Fees
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1996 1995 1994
Money Market Portfolio $ 233,579 $ 188,697 $ 163,480
U.S. Treasury Portfolio 200,897 196,883 250,737
</TABLE>
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at NAV. Promotional and administrative expenses in connection with
the offer and sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved a Distribution and Service Plan on behalf of the
Initial Class of each fund (the Plans) pursuant to Rule 12b-1 under the
1940 Act (the Rule). The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of a fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the Initial Class of the funds
and FMR to incur certain expenses that might be considered to constitute
indirect payment by the funds of distribution expenses.
Under each Plan, if the payment of management fees by the funds to FMR is
deemed to be indirect financing by the funds of the distribution of their
shares, such payment is authorized by the Plans. Each Plan specifically
recognizes that FMR may use its management fee revenue, as well as its past
profits, or other resources from any other source to reimburse FDC for
payments made to third parties that assist in selling Initial Class shares
of each fund, or to third parties, including banks, that render shareholder
support services.
Under the Initial Class Plans, payments made by FMR to FDC during the
fiscal year ended July 31, 1996 were $ 5,374,819 for Money Market
Portfolio and $ 5,808,081 for U.S. Treasury Portfolio.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
each fund and its shareholders. In particular, the Trustees noted that each
Plan does not authorize payments by the Initial Class of each fund other
than those made to FMR under its management contract with the fund. To the
extent that each plan gives FMR and FDC greater flexibility in connection
with the distribution of shares of the applicable class of each fund,
additional sales of fund shares may result. Furthermore, certain
shareholders support services may be provided more effectively under the
Plans by local entities with whom shareholders have other relationships.
Each Plan was approved by Initial Class shareholders on March 24, 1993.
Each Plan was approved by shareholders, in connection with a reorganization
transaction on September 29, 1993, pursuant to an Agreement and Plan of
Conversion.
Each Plan allows FDC to make payments to certain third parties with whom
FDC has entered into written Service Contracts and who assist or have
assisted in selling Initial Class shares of the fund or who provide
shareholder support services (investment professionals), for assistance in
selling Initial Class shares of the fund or for providing shareholder
support services. Each Plan authorizes FMR to make payments from its
management fee, its past profits or any other source available to it, to
reimburse FDC for these payments to investment professionals, provided that
such payments cannot exceed the amount of the management fee. The maximum
amount payable to investment professionals under each Plan, as determined
by the Board of Trustees, is currently at the annual rate of up to
0.40% of the average net asset value of the applicable class for
shareholder support or distribution services.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Money Market Portfolio and U.S. Treasury Portfolio are
funds of Daily Money Fund, an open-end management investment company
organized as a Delaware business trust on September 29, 1993. The funds
acquired all of the assets of Money Market Portfolio and U.S. Treasury
Portfolio, respectively, on September 29, 1993. Currently, there are six
funds of Daily Money Fund: U.S. Treasury Portfolio; Money Market Portfolio;
Treasury Only; Capital Reserves: Money Market Portfolio; Capital Reserves:
U.S. Government Portfolio; and Capital Reserves: Municipal Money Market
Portfolio. The Trust Instrument permits the Trustees to create additional
funds.
In the event that FMR ceases to be the investment adviser to a fund, the
right of the trust or fund to use the identifying name "Fidelity" may be
withdrawn. There is a remote possibility that one fund might become liable
for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense s can otherwise be fairly made.
The officers of the trust, subject to the general supervision of the Board
of Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is a business trust organized
under Delaware law. Delaware law provides that shareholders shall be
entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The Trust
Instrument contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the trust and requires
that a disclaimer be given in each contract entered into or executed by the
trust or the Trustees. The Trust Instrument provides for indemnification
out of each fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instrument
also provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
and satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which Delaware law does not apply, no contractual
limitation of liability was in effect, and the fund is unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is extremely remote.
The Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any person
other than the trust or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever, provided that Trustees are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office. Claims
asserted against one class of shares may subject holders of another class
of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. Initial Class shares have no preemptive or conversion rights; the
voting and dividend rights, the right of redemption, and the privilege of
exchange are described in the Prospectus. Shares are fully paid and
nonassessable, except as set forth under the heading "Shareholder and
Trustee Liability" above. Shareholders representing 10% or more of the
trust, a fund or a class may, as set forth in the Trust Instrument, call
meetings of the trust, fund, or class for any purpose related to the trust,
fund or class, as the case may be, including, in the case of a meeting of
the entire trust, the purpose of voting on removal of one or more Trustees.
The trust or any fund may be terminated upon the sale of its assets to, or
merger with, another open-end management investment company or series
thereof, or upon liquidation and distribution of its assets. Generally such
terminations must be approved by vote of the holders of a majority of the
outstanding shares of the trust or the fund; however, the Trustees may,
without prior shareholder approval, change the form of organization of the
trust by merger, consolidation, or incorporation. If not so terminated or
reorganized, the trust and its funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the trust to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the trust registration
statement. Each fund may invest all of its assets in another investment
company.
CUSTODIAN. The Bank of New York, 110 Washington Street , New York,
N Y 10260, is custodian of the assets of the funds . The
custodian is responsible for the safekeeping of a fund's assets and the
appointment of the subcustodian banks and clearing agencies. A
custodian takes no part in determining the investment policies of a fund or
in deciding which securities are purchased or sold by a fund. However, a
fund may invest in obligations of its custodian and may purchase
securities from or sell securities to its custodian. The Chase
Manhattan Bank , headquartered in New York, also may serve as a special
purpose custodian of certain assets in connection with repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential custodial
or other fund relationships.
AUDITOR . Coopers & Lybrand L.L.P., 1999 Bryan Street, Dallas, TX
75201 , serves as the funds' independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
Each fund's financial statements for the fiscal year ended July 31, 1996
are included in the fund's Annual Report, which is attached to the
Prospectus. Each fund's financial statements and financial highlights are
incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. The funds may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE COMMERCIAL PAPER RATINGS:
Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earning coverage of fixed financial charges and with high
internal cash generation.
Well established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earning trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
DESCRIPTION OF STANDARD & POOR'S COMMERCIAL PAPER RATINGS:
A - Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with
the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
DAILY MONEY FUND: INITIAL CLASS
U.S. TREASURY PORTFOLIO AND MONEY MARKET PORTFOLIO
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Expenses
3 a Financial Highlights
b *
c Performance
d Performance
4 a(i) Charter
(ii) Investment Principles and Risks; Securities and Investment
Practices
b Securities and Investment Practices
c Who May Want To Invest; Investment Principals and Risks; Securities and
Investment Practices
5 a Charter
b(i) Cover Page; FMR and Its Affiliates
b(ii) FMR and Its Affiliates; Charter; Breakdown of Expenses
b(iii) Expenses; Breakdown of Expenses
c,d Cover Page; Charter; Breakdown of
Expenses; FMR and Its Affiliates
e Expenses
f Expenses
g Expenses; FMR and Its Affiliates
5A *
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Investor Services;
Transaction Details; Exchange Restrictions
a(iii) *
b FMR and Its Affiliates
c Exchange Restrictions
d Cover Page; Charter
e Cover Page; How to Buy Shares; How to Sell Shares; Investor Services;
Exchange Restrictions
f,g Dividends, Capital Gains, and Taxes
7 a Charter; Cover Page
b How to Buy Shares; Transaction Details
c How to Buy Shares; Transaction Details
d How to Buy Shares
e Transaction Details
f Expenses; Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details; Exchange
Restrictions
9 *
*Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
DAILY MONEY FUND
To learn more about each fund and its investments, you can obtain a copy of
the fund s' most recent financial report s and portfolio
listing , or a copy of the Statement of Additional Information (SAI)
dated September 19, 1996. The SAI has been filed with the Securities and
Exchange Commission (SEC) and e ach is available along with other
related materials on the SEC's Internet Web site (http://www.sec.gov). The
SAI is incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, contact Fidelity Client
Services at 1-800-843-3001 or your investment professional.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL MAINTAIN A
STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, FEDERAL RESERVE BOARD
OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DMF-pro-0996
17516
MONEY MARKET PORTFOLIO - INITIAL CLASS
(fund number 083)
U.S. TREASURY PORTFOLIO - INITIAL CLASS
(fund number 058)
Each fund seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
PROSPECTUS
DATED SEPTEMBER 19, 1996
AND
ANNUAL REPORT
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109FOR THE
PERIOD ENDING
JULY 31, 1996
CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Initial Class's yearly operating
expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and
closing your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations
and the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
ANNUAL REPORT
<TABLE>
<CAPTION>
<S> <C> <C>
MONEY MARKET PORTFOLIO
INVESTMENTS A-1 A complete list of the fund's investments with
their
market values.
FINANCIAL STATEMENTS A-5 Statements of assets and liabilities, operations,
and changes in net assets.
U.S. TREASURY PORTFOLIO
INVESTMENTS A-8 A complete list of the fund's investments with
their
market values.
FINANCIAL STATEMENTS A-9 Statements of assets and liabilities, operations,
and changes in net assets.
NOTES A-12 Notes to the financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS A-16 The auditors' opinion.
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers investors a convenient way to invest in a professionally
managed portfolio of money market instruments.
Each fund is designed for investors who would like to earn current income
while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. U.S. Treasury
Portfolio offers an added measure of safety with its focus on U.S. Treasury
securities.
These funds do not constitute a balanced investment plan. However, because
they emphasize stability, they could be well-suited for a portion of your
investments . Each fund offers free checkwriting to give you easy
access to your money.
U.S. Treasury Portfolio is composed of two classes of shares. Each class of
the fund has a common investment objective and investment portfolio.
Initial Class shares do not have a sales charge, but do pay a distribution
fee. Class B shares do not have a front-end sales charge, but do have a
contingent deferred sales charge (CDSC) and pay a distribution fee and a
shareholder service fee. Class B shares may be purchased directly only in
connection with the Fidelity Advisor Systematic Exchange Program for the
purpose of exchanging into Class B of the Fidelity Advisor funds. Because
Initial Class shares do not have a sales charge, have a lower distribution
fee and do not have a shareholder service fee, Initial Class shares are
expected to have a higher total return than Class B shares. You may obtain
more information about Class B shares, which are not offered through this
prospectus, from your investment professional or by calling Fidelity Client
Services at 1-800-843-3001.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
Initial Class shares of a fund.
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales charge None
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR). Each
fund also incurs other expenses for services such as maintaining
shareholder records and furnishing shareholder statements and financial
reports.
12b-1 fees are paid by FMR from its management fee, its past profits or
other source, to the distributor for services and expenses in connection
with the distribution of Initial Class shares. Long-term shareholders may
pay more than the economic equivalent of the maximum sales charges
permitted by the National Association of Securities Dealers, Inc., due to
12b-1 fees.
Initial Class's expenses are factored into its share price or dividends and
are not charged directly to shareholder accounts (see "Breakdown of
Expenses" on page ).
The following are projections based on historical expenses of the Initial
Class of each fund, and are calculated as a percentage of average net
assets of the Initial Class of each fund.
MONEY MARKET PORTFOLIO - INITIAL CLASS
Management fee* 0. 28
%
12b-1 fee (Distribution Fee) 0.22
%
Other expenses (after reimbursement) 0. 15
%
Total operating expenses 0.65
%
U.S. TREASURY PORTFOLIO - INITIAL CLASS
Management fee* 0. 21
%
12b-1 fee (Distribution Fee) 0.29
%
Other expenses (after reimbursement) 0. 15
%
Total operating expenses 0.65
%
*THE MANAGEMENT FEE RATE REPRESENTS THE NET RATE RETAINED BY FMR
AFTER PAYMENT MADE TO THE DISTRIBUTOR. THE MANAGEMENT FEE RATE
BEFORE PAYMENTS MADE TO THE DISTRIBUTOR BY FMR IS 0.50%.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment in Initial Class shares, assuming a 5% annual return and full
redemption at the end of each time period:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 3 5 10
Year Years Years Years
Money Market Portfolio - Initial Class $ 7 $ 26 $ 31 $ 81
U.S. Treasury Portfolio - Initial Class $ 7 $ 26 $ 31 $ 81
</TABLE>
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Initial Class of each fund to the
extent that total operating expenses exceed 0.65% of its average net
assets. If these agreements were not in effect, other expenses and total
operating expenses , as a percentage of average net assets of
Initial Class of each fund would have been 0.27 % and 0.77 %,
respectively, for Money Market Portfolio and 0.20 % and 0.70 %,
respectively, for U.S. Treasury Portfolio. Expenses eligible for
reimbursement do not include interest, taxes, brokerage commissions, and
extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow and each fund's financial
statements included in the funds' Annual Reports have been audited by
Coopers & Lybrand L.L.P., independent accountants. Their reports on the
financial statements and financial highlights are included in the
Annual Report s . The financial statements and the report s are
attached.
MONEY MARKET PORTFOLIO - INITIAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios
Fiscal years ended
July 31 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net asset value,
beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from
Investment .050 .050 .029 .028 .041 .067 .080 .085 .066 .057
Operations
Net interest income
Less
Distributions (.050) (.050) (.029) (.028) (.041) (.067) (.080) (.085) (.066) (.057)
From net interest income
Net asset value,
end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total
returnA 5.13 5.16 2.98 2.82 4.21 6.90 8.34 8.81 6.81 5.87
% % % % % % % % % %
Net assets, end
of period $ 2,581 $ 2,139 $ 1,525 $ 1,451 $ 1,531 $ 1,714 $ 1,350 $ 894 $ 561 $ 441
(In millions)
Ratio of
expenses to .65 .65 .65 .61 .59 .60 .61 .64 .66 .62
average net
assets %B %B %B % % % % %B % %
Ratio of net interest
income 5.00 5.11 2.96 2.76 4.19 6.61 7.99 8.56 6.57 5.78
to % % % % % % % % % %
average net assets
</TABLE>
A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
U.S. TREASURY PORTFOLIO - INITIAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios
Fiscal years ended
July 31 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net asset value,
beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from
Investment .049 .049 .029 .027 .042 .065 .079 .083 .063 .057
Operations
Net interest income
Less
Distributions (.049) (.049) (.029) (.027) (.042) (.065) (.079) (.083) (.063) (.057)
From net interest income
Net asset value,
end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total
returnA 5.06% 5.02% 2.89% 2.78% 4.25% 6.69% 8.24% 8.64% 6.45% 5.81%
Net assets, end of
period $ 1,801 $ 1,828 $ 2,025 $ 2,949 $ 3,094 $ 1,702 $ 1,177 $ 994 $ 320 $ 240
(In millions)
Ratio of
expenses to .65% .65% .60% .57% .59% .59% .59% .64% .64% .58%
average net
assets B B
Ratio of net interest
income 4.94% 4.89% 2.81% 2.73% 4.14% 6.42% 7.91% 8.47% 6.26% 5.67%
to average
net assets
</TABLE>
A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE YIELD.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The funds' performance and holdings are detailed twice a year in financial
reports, which are sent to all shareholders. For current performance call
Fidelity Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund of
Daily Money Fund, an open-end management investment company organized as a
Delaware business trust on September 29, 1993.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent will mail proxy materials in advance, including a voting
card and information about the proposals to be voted on. You are entitled
to one vote for each share you own.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
The funds are managed by FMR, which handles their business affairs. FMR
Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of July 31, 1996, FMR advised funds having approximately
27 million shareholder accounts with a total value of more than
$ 385 billion.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations Company
(FIIOC) performs transfer agent servicing functions for the Initial Class
shares of each fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of
the Edward C. Johnson 3d family are the predominant owners of a class of
shares of common stock representing approximately 49% of the voting power
of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND'S INVESTMENT APPROACH
MONEY MARKET PORTFOLIO seeks to obtain as high a level of current income as
is consistent with the preservation of capital and liquidity .
The fund invests only in U.S. dollar-denominated money market securities of
domestic and foreign issuers rated in the highest rating category by at
least two nationally recognized rating services, U.S. Government securities
and repurchase agreements. The fund also may enter into reverse repurchase
agreements.
U.S. TREASURY PORTFOLIO seeks to obtain as high a level of current income
as is consistent with the preservation of capital and liquidity.
The fund invests only in U.S. Treasury securities and repurchase agreements
for these securities. The fund does not enter into reverse repurchase
agreements.
COMMON POLICIES
When you sell your shares of the funds, they should be worth the same
amount as when you bought them. Of course, there is no guarantee that the
funds will maintain a stable $1.00 share price. The funds follow
industry-standard guidelines on the quality and maturity of their
investments, which are designed to help maintain a stable $1.00 share
price. The funds will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities they buy. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and the
value of your investment) to change.
The funds earn income at current money market rates. They stress
preservation of capital, liquidity, and income and do not seek the higher
yields or capital appreciation that more aggressive investments may
provide. Each fund's yield will vary from day to day and generally reflects
current short-term interest rates and other market conditions. It is
important to note that neither the funds nor their yields are guaranteed by
the U.S. Government.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Fund holdings are detailed in each fund's financial reports, which are sent
to shareholders twice a year. For a free SAI or financial report ,
contact your investment professional or call Fidelity Client Services at
1-800-843-3001 .
MONEY MARKET SECURITIES are high-quality, short-term instruments issued by
the U.S. Government, corporations, financial institutions, and other
entities. These securities may carry fixed, variable, or floating interest
rates. Some money market securities employ a trust or similar structure to
modify the maturity, price characteristics, or quality of financial assets
so that they are eligible investments for money market funds. If the
structure does not perform as intended, adverse tax or investment
consequences may result.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes and bonds. U.S.
Treasury securities are backed by the full faith and credit of the United
States.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt instruments
issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government. Not all U.S. Government securities
are backed by the full faith and credit of the United States. For example,
U.S. Government securities such as those issued by the Federal National
Mortgage Association are supported by the instrumentality's right to borrow
money from the U.S. Treasury under certain circumstances. Other U.S.
Government securities, such as those issued by the Federal Farm Credit
Banks Funding Corporation are supported only by the credit of the
entity that issued them.
CREDIT SUPPORT. Issuers may employ various forms of credit enhancement,
including letters of credit, guarantees, or insurance from a bank,
insurance company, or other entity. These arrangements expose the fund to
the credit risk of the entity. In the case of foreign entities, extensive
public information about the entity may not be available and the entity may
be subject to unfavorable political, economic, or governmental developments
which might affect its ability to honor its commitment.
FOREIGN SECURITIES may involve different risks than domestic securities,
including risks relating to the political and economic conditions of the
foreign country involved, which could affect the payment of principal or
interest. Issuers of foreign securities include foreign governments,
corporations, and banks.
ASSET-BACKED SECURITIES include interests in pools of mortgages, loans,
receivables, or other assets. Payment of principal and interest may be
largely dependent upon the cash flows generated by the assets backing the
securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. The risks associated with stripped securities are similar to
those of other money market securities, although stripped securities may be
more volatile. U.S. Treasury securities that have been stripped by a
Federal Reserve Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in the
fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, a fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTION: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
RESTRICTIONS: Money Market Portfolio will invest more than 25% of its total
assets in the financial services industry.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. Economic,
business, or political changes can affect all securities of a similar type.
RESTRICTIONS: Money Market Portfolio may not invest more than 5% of its
total assets in any one issuer, except that the fund may invest up to 10%
of its total assets in the highest quality securities of a single issuer
for up to three business days. These limitations do not apply to U.S.
Government securities.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: Money Market Portfolio may borrow only for temporary or
emergency purposes, or engage in reverse repurchase agreements, but not in
an amount exceeding 331/3% of its total assets. U.S. Treasury Portfolio may
borrow only for temporary or emergency purposes, but not in an amount
exceeding 331/3% of its total assets.
LENDING. A fund may lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets. U.S. Treasury Portfolio does not lend money to other funds
advised by FMR.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Each fund seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
Money Market Portfolio, under normal conditions, will invest more than 25%
of its total assets in t he financial services industry.
Loans, in the aggregate, may not exceed 331/3% of a fund's total assets.
Money Market Portfolio may borrow only for temporary or emergency purposes,
or engage in reverse re purchase agreements, but not in an amount
exceeding 331/3% of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each fund's Initial Class assets are
reflected in that class's share price or dividends; they are neither billed
directly to shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained below.
MANAGEMENT FEE
Each fund pays FMR a monthly management fee at an annual rate of 0.50% of
its average net assets.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR Texas, which has primary
responsibility for providing investment management for the funds, while FMR
retains responsibility for providing the funds with other management
services. FMR pays FMR Texas 50% of its management fee (before expense
reimbursements but after payments made by FMR pursuant to each
Initial Class's Distribution and Service Plan) for these services.
FMR paid FMR Texas 0.14 % of Money Market Portfolio's and
0.11 % of U.S. Treasury Portfolio's average net assets for the fiscal
year ended July 31, 1996.
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs certain transfer agency, dividend disbursing and shareholder
services for each fund's Initial Class. Fidelity Service Co. (FSC)
calculates the net asset value (NAV) and dividends for Initial Class,
maintains each fund's general accounting records and administers the
securities lending program for Money Market Portfolio . For the
fiscal year ended July 31, 1996, fees paid by each fund's Initial Class to
FIIOC amounted to 0.24 % (Money Market Portfolio) and 0.17%
(U.S. Treasury Portfolio) of its average net assets, and fees paid by each
fund to FSC amounted to 0.01 % of Money Market Portfolio's and
0.01 % of U.S. Treasury Portfolio's average net assets.
Initial Class shares of each fund have adopted a DISTRIBUTION AND SERVICE
PLAN. Each plan recognizes that FMR may use its resources, including
management fees, to pay expenses associated with the sale of Initial Class
shares. The Board of Trustees has authorized FMR to pay FDC a distribution
fee from its management fee revenue s , past profits or other
resources , at an annual rate of up to 0. 38 % of Initial
Class's average net assets for payments made to investment professionals
based on average aggregate balances maintained, and, in special
circumstances, up to 0.40% of Initial Class's average net assets. This
additional 0.02% will be paid to investment professionals who maintain
assets in excess of $600 million in a single omnibus account.
For the fiscal year ended July 31, 1996, FMR paid FDC monthly at an annual
rate of 0.22 % of Money Market Portfolio's - Initial Class average
net assets throughout the month and 0.29% of U.S. Treasury Portfolio's -
Initial Class average net assets throughout the month.
Each fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the compensation of
trustees who are not affiliated with Fidelity.
YOUR ACCOUNT
TYPES OF ACCOUNTS
If you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of fund
shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or fees
that may apply. Certain features of the funds, such as minimum initial or
subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed below.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers a fund through a retirement program,
contact your employer for more information. Otherwise, contact your
investment professional or call Fidelity Client Services at
1-800-843-3001 .
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT (THE FOLLOWING OPTIONS ARE AVAILABLE ONLY FOR TAXABLE FUNDS)
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age under 701/2 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 401(K) PLANS allow employees of corporations of all sizes to
contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA). Contact your investment
professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Contact your investment professional.
HOW TO BUY SHARES
EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The
funds are managed to keep share prices stable at $1.00.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. NAV is normally calculated at
2:00 p.m. and 4:00 p.m. Eastern time.
You will receive the NAV next determined after your investment professional
has submitted your purchase order.
Shareholders of record as of 2:00 p.m. Eastern time will be entitled to
dividends declared that day.
Shares purchased after 2:00 p.m. Eastern time will begin to earn income
dividends on the following business day.
Share certificates are not available for Initial Class shares.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Investments
P.O. Box 77000 2
Cincinnati , OH 45277-0081
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your account,
(small solid bullet) Open your account by exchanging from Class A of a
Fidelity Advisor fund or from another Fidelity fund, or
(small solid bullet) Contact your investment professional or call
Fidelity Client Services.
BY MAIL. You or your investment professional must send a check payable to
the Initial Class of the fund in which you plan to invest. When
making subsequent investments by check, please write your fund account
number on the check. All investments by check should be sent to the above
address.
BY WIRE. You must sign up for the wire feature before using it. For wiring
information and instructions, you should call the investment professional
through which you trade or if you trade directly through Fidelity, call
Fidelity Client Services. There is no fee imposed by the funds for wire
purchases. However, if you buy shares through an investment professional,
the investment professional may impose a fee for wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
Your wire must be received by the transfer agent in good order at the
applicable fund's designated wire bank before the close of the Federal
Reserve Wire System on the day of purchase.
You are advised to wire funds as early in the day as possible and to
provide advance notice to Fidelity Client Services for large purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $100
Through regular investment plans * $100
MINIMUM BALANCE $500
For Fidelity retirement accounts none
* FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
PAGE .
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 2:00 p.m. and 4:00 p.m.
Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these pages .
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to Class A shares of a Fidelity Advisor
fund or shares of other Fidelity funds, which can be requested by phone or
in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR NON-RETIREMENT ACCOUNT SHARES,
please leave at least $500 worth of shares in the account to keep it open.
You will receive the NAV next determined after your investment professional
has submitted your redemption order.
BY TELEPHONE. Redemption requests may be made by calling Fidelity Client
Services at 1-800-843-3001 .
BY MAIL. Send a letter of instruction with signature guarantee(s) to the
address given on page . The letter should specify the name of the fund,
the name of the class, the number of shares to be sold, name,
account numbers, address, and should include the additional requirements
listed below that apply to each particular account.
<TABLE>
<CAPTION>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants, Letter of instruction signed by all person(s)
Sole Proprietorship, Custodial, (Uniform Gifts or required to sign for the account exactly as it is
Transfers to Minors Act), General Partners registered, accompanied by signature
guarantee(s).
Corporations, Associations Letter of instruction and a corporate resolution,
signed by person(s) required to sign for the
account accompanied by signature guarantee(s).
Trusts A letter of instruction signed by the Trustee(s) with
signature guarantee(s). (If the Trustee's name is not
registered on the account, also provide a copy of the
trust document, certified within the last 60 days.)
</TABLE>
If you do not fall into any of these registration categories (i.e.,
executors, administrators, conservators, or guardians) you should contact
your investment professional or call Fidelity Client Services for further
instructions.
BY WIRE. Redemptions may be made by calling Fidelity Client Services at
1-800-843-3001 .
You must designate on your account application the U.S. commercial bank
account(s) into which you wish the redemption proceeds to be deposited.
Fidelity Client Services will then notify you that this feature has been
activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should send
a letter of instruction, including a signature guarantee, to Fidelity
Client Services at the address shown on page .
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
There is no fee imposed by the funds for wiring of redemption proceeds.
However, if you sell shares through an investment professional, the
investment professional may impose a fee for wire redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System to
your bank account of record. If your redemption request is received by the
transfer agent before 2:00 p.m. Eastern time, redemption proceeds will
normally be wired on that day. If your redemption request is received by
the transfer agent after 2:00 p.m. Eastern time, redemption proceeds will
normally be wired on the following business day.
A fund reserves the right to take up to seven days to pay you if making
immediate payment would adversely affect the fund.
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. The minimum amount for a check is $500. Do not, however, try to
close out your account by check.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through Friday,
8:30 a.m. to 6:00 p.m. Eastern time.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in a
fund. Call Fidelity Client Services at 1-800-843-3001 if you need
additional copies of financial reports, prospectuses or historical account
information.
One easy way to pursue your financial goals is to invest money regularly.
The funds offer a convenient service that lets you transfer money between
fund accounts, automatically. While regular investment plans do not
guarantee a profit and will not protect you against loss in a declining
market, they can be an excellent way to invest for retirement, a home,
educational expenses, and other long-term financial goals. Certain
restrictions apply for retirement accounts. Call your investment
professional or Fidelity Client Services for more information.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO A FIDELITY
ADVISOR FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, quarterly, (small solid bullet) To establish, call your investment professional after
semi-annually, or both accounts are opened.
annually (small solid bullet) To change the amount or frequency of your
investment, contact your investment professional
directly or, if you purchased your shares through a
broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares
through a bank representative, call 1-800-843-3001.
(small solid bullet) The account from which the exchanges are to be
processed must have a minimum balance of
$10,000. The account into which the exchange is
being processed must have a minimum of $1,000.
(small solid bullet) Both accounts must have the same registrations
and taxpayer ID numbers.
(small solid bullet) Call at least 2 business days prior to your next
scheduled exchange date.
</TABLE>
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
Based on prior approval of each fund, dividends relating to Initial Class
shares redeemed during the month can be distributed on the day of
redemption. Each fund reserves the right to limit this service.
Shareholders may elect to receive dividend distributions in cash.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The funds offer two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your application, you
will be assigned this option.
2. CASH OPTION. You will be sent a check or wire for your dividend and
capital gain distributions, if any.
For retirement accounts, all distributions are automatically reinvested.
When you are over 59 1/2 years old, you can receive distributions in cash.
Dividends will be reinvested at each fund's Initial Class NAV on the last
day of the month. Capital gain distributions, if any, will be reinvested at
the NAV as of the record date of the distribution. The mailing of
distribution checks will begin within seven days.
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions,
if any, are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax adviser for details and up-to-date information on the
tax laws in your state.
For the fiscal year ended July 31, 1996, 6.9% of Money Market
Portfolio's and 21.0% of U.S. Treasury Portfolio's income
distributions were derived from interest on U.S. Government securities
which is generally exempt from state income tax.
Every January, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and each class's NAV is normally calculated
each day that both the Federal Reserve Bank of New York (New York Fed) and
the New York Stock Exchange (NYSE) are open. The following holiday closings
have been scheduled for 1996: New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day, and
Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the New York Fed or the NYSE may modify its holiday
schedule at any time. On any day that the New York Fed or the NYSE closes
early, the principal government securities markets close early (such as on
days in advance of holidays generally observed by participants in such
markets), or as permitted by the SEC, the right is reserved to advance the
time on that day by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the New York Fed or the NYSE is closed, each class's NAV may be
affected on days when investors do not have access to the fund to purchase
or redeem shares. Certain Fidelity funds may follow different holiday
closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Initial Class is
computed by adding Initial Class's pro rata share of the value of the
fund's investments, cash, and other assets, subtracting Initial Class's pro
rata share of the value of the fund's liabilities, subtracting the
liabilities allocated to Initial Class, and dividing the result by the
number of Initial Class shares outstanding. The fund values its portfolio
securities on the basis of amortized cost. This method minimizes the effect
of changes in a security's market value and helps the fund maintain a
stable $1.00 share price.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of Initial Class shares are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of the confirmation
statements immediately after receipt. If you do not want the ability to
redeem and exchange by telephone, call Fidelity for instructions.
Additional documentation may be required from corporations, associations,
and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Fidelity
Client Services in advance of large transactions.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees a fund or Fidelity
has incurred.
Shareholders of record as of 2:00 p.m. Eastern time will be entitled to
dividends declared that day.
Shares purchased after 2:00 p.m. Eastern time begin to earn income
dividends on the following business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) Shares redeemed before 2:00 p.m. Eastern time do not
receive the dividend declared on the day of redemption. Shares redeemed
after 2:00 p.m. Eastern time do receive the dividend declared on the day of
redemption.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
(small solid bullet) If you sell shares by writing a check and the amount
of the check is greater than the value of your account, your check will be
returned to you and you may be subject to additional charges.
When the NYSE or the New York Fed is closed (or when trading is restricted)
for any reason other than its customary weekend or holiday closings, or
under any emergency circumstances as determined by the SEC to merit such
action, a fund may suspend redemption or postpone payment dates. In cases
of suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next determined
after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 due to redemption, the account may
be closed and the proceeds may be mailed to your address of record. You
will be given 30 days' notice that your account will be closed unless it is
increased to the minimum.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
If you have purchased Initial Class shares of a fund in connection with the
Fidelity Advisor funds program, your Initial Class shares may be exchanged
only for Class A shares of Fidelity Advisor funds, Initial Class shares of
the other fund offered through this prospectus, or shares of Daily
Tax-Exempt Money Fund. Other shareholders may not exchange Initial Class
shares of a fund for Class A shares of Fidelity Advisor funds but may
exchange their Initial Class shares for Initial Class shares of the other
fund offered through this prospectus, shares of Daily Tax-Exempt Money
Fund, or shares of other Fidelity funds.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Fidelity Client Services at 1-800-843-3001 between 8:30
a.m. and 4:00 p.m. Eastern time.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name, class
name, account number, the number of shares to be redeemed, and the name of
the fund to be purchased. Written requests for exchange should be mailed to
Fidelity Client Services at the address on page .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Initial Class shares will be
redeemed at the next determined NAV after your order is received and
accepted by the transfer agent. Shares of the fund to be acquired will be
purchased at its next determined NAV after redemption proceeds are made
available. You should note that, under certain circumstances, a fund may
take up to seven days to make redemption proceeds available for the
exchange purchase of shares of another fund. In addition, please note the
following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) You will earn dividends in the acquired fund in
accordance with the fund's customary policy, normally on the day the
exchange request is received.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage difference between that fund's sales charge and any
sales charge you have already paid in connection with the shares you are
exchanging.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or redemption
fees applicable to exchanges out of a fund.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative, or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds or FDC. This Prospectus and the related SAI do not
constitute an offer by the funds or by FDC to sell or to buy shares of the
funds to any person to whom it is unlawful to make such offer.
DAILY MONEY FUND: INITIAL CLASS
U.S. TREASURY PORTFOLIO AND MONEY MARKET PORTFOLIO
CROSS REFERENCE SHEET
Form N-1A Item Number
Part B Statement of Additional Information
10 a,b Cover Page
11 Table of Contents
12 *
13 a,b,c Investment Policies and Limitations
d *
14 a,b,c Trustees and Officers
15 a *
b Description of the Trust
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contracts
c *
d Management Contracts
e *
f Distribution and Service Plans
g *
h Description of the Trust
i Contracts with FMR Affiliates
17 a Portfolio Transactions
b *
c Portfolio Transactions
d,e *
18 a Description of the Trust
b *
19 a Additional Purchase, Exchange, and
Redemption Information
b Valuation
c *
20 Distributions and Taxes
21 a(i,ii) Contracts with FMR Affiliates;
Distribution and Service Plans
a(iii),b,c *
22 Performance
23 Financial Statements for the fiscal
period ended July 31, 1996 are
incorporated herein by reference.
_______________
*Not Applicable
DAILY MONEY FUND
U.S. TREASURY PORTFOLIO - CLASS B
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 19, 1996
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus for
Class B shares (dated September 19, 1996). Please retain this document
for future reference. The fund's financial statements and financial
highlights, included in the Annual Report, for the fiscal year ended July
31, 1996, are incorporated herein by reference. To obtain an additional
copy of the Prospectus and Annual Report, please call Fidelity Client
Services at 1-800-843-3001.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange, and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract
Contracts with FMR Affiliates
Distribution and Service Plan
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISOR
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
The Bank of New York
DMFB-ptb- 0 996
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation shall be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the 1940
Act) ) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations described
in this SAI are not fundamental and may be changed without shareholder
approval.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 5% of
its total assets would be invested in the securities of such issuer;
provided, however, that with respect to 25% of its total assets, 10% of its
assets may be invested in the securities of an issuer;
(2) issue senior securities except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than the securities issued
or guaranteed by the U.S. Government or any of its agencies or
instrumentalities), if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements; and
(9) write or purchase any put or call options.
(10) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies and limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) Subject to revision upon 60 days' notice to shareholders, the fund
does not currently intend to purchase securities on margin, except that the
fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(vi) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the Securities and Exchange Commission (SEC).
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
(xi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitation (viii), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's policies on quality and maturity, see section entitled
"Quality and Maturity" on page .
SHAREHOLDER NOTICE. The fund invests only in U.S. Treasury securities and
repurchase agreements for these securities. This operating policy may be
changed upon 90 days' notice to shareholders.
The fund does not intend to purchase futures contracts or options on
futures contracts. This operating policy may be changed only upon approval
by the Board of Trustees and 60 days ' notice to shareholders.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the SEC, the Board of Trustees has
established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
CASH MANAGEMENT. The fund may invest in money market securities, in a
pooled account of repurchase agreements, and in a money market fund,
available only to FMR-managed funds and accounts, whose goal is to seek
high current income while maintaining a stable $1.00 share price. A major
change in interest rates or a default on the fund's investments could cause
its share price to change.
DELAYED-DELIVERY TRANSACTIONS. The fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by the fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, the fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because the fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If the fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When the fund has sold a security on a
delayed-delivery basis, the fund does not participate in further gains or
losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the fund could miss a favorable price or yield opportunity, or could suffer
a loss.
The fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days.
In the absence of market quotations, illiquid investments are valued for
purposes of monitoring amortized cost valuation at fair value as determined
in good faith by a committee appointed by the Board of Trustees. If through
a change in values, net assets, or other circumstances, the fund were in a
position where more than 10% of its net assets was invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, the fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates, but it
currently intends to participate in this program only as a borrower.
Interfund borrowings normally extend overnight, but can have a maximum
duration of seven days. A fund will borrow through the program only when
the costs are equal to or lower than the costs of bank loans. Loans may be
called on one day's notice, and a fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
PUT FEATURES entitle the holder to sell a security back to the issuer at
any time or at specified intervals. They are subject to the risk that the
put provider is unable to honor the put feature (purchase the security).
QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the fund may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be rated in accordance with applicable rules in one of the
two highest categories for short-term securities by at least two nationally
recognized rating services (or by one, if only one rating service has rated
the security); or, if unrated, judged to be of equivalent quality by FMR.
The fund may not invest more than 5% of its total assets in second tier
securities. In addition, the fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to the fund in connection with
bankruptcy proceedings), it is the fund's current policy to engage in
repurchase agreement transactions with parties whose creditworthiness has
been reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX." The fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short. Short sales could be used to protect the net
asset value per share (NAV) of the fund in anticipation of increased
interest rates, without sacrificing the current yield of the securities
sold short. If the fund enters into a short sale against the box, it will
be required to set aside securities equivalent in kind and amount to the
securities sold short (or securities convertible or exchangeable into such
securities) and will be required to hold such securities while the short
sale is outstanding. The fund will incur transaction costs, including
interest expenses, in connection with opening, maintaining, and closing
short sales against the box.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a U.S. Government
security and selling them separately. U.S. Treasury STRIPS (Separate
Trading of Registered Interest and Principal of Securities) are created
when the coupon payments and the principal payment are stripped from an
outstanding Treasury security by a Federal Reserve Bank.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by FMR pursuant to authority contained in the management
contract. FMR has granted investment management authority to the
sub-adviser (see the section entitled "Management Contract"), and the
sub-adviser is authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. Securities purchased and sold by the
fund generally will be traded on a net basis (i.e., without commission). In
selecting broker-dealers, subject to applicable limitations of the federal
securities laws, FMR considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character
of the markets for the security to be purchased or sold; the execution
efficiency, settlement capability, and financial condition of the
broker-dealer firm; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any commissions.
The fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or other accounts over which
FMR or its affiliates exercise investment discretion. Such services may
include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). FMR
maintains a listing of broker-dealers who provide such services on a
regular basis. However, as many transactions on behalf of the fund are
placed with broker-dealers (including broker-dealers on the list) without
regard to the furnishing of such services, it is not possible to estimate
the proportion of such transactions directed to such broker-dealers solely
because such services were provided. The selection of such broker-dealers
generally is made by FMR (to the extent possible consistent with execution
considerations) based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the fund may be useful to FMR in rendering investment management
services to the fund or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the fund. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
fund and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the fund or shares of other Fidelity funds
to the extent permitted by law. FMR may use research services provided by
and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI)
and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services. From
September 1992 through December 1994, FBS operated under the name Fidelity
Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was
converted to an unlimited liability company and assumed the name FBS. Prior
to September 4, 1992, FBSL operated under the name Fidelity Portfolio
Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity
International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr.
Johnson 3d, Johnson family members, and various trusts for the benefit of
the Johnson family own, directly or indirectly, more than 25% of the voting
common stock of FIL.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
fund and review the commissions paid by the fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund.
For the fiscal years ended 1996, 1995, and 1994, the fund paid no brokerage
commissions.
During the fiscal year ended 1996, the fund paid no fees to brokerage firms
that provided research services.
From time to time the Trustees will review whether the recapture for the
benefit of the fund of some portion of the brokerage commissions or similar
fees paid by the fund on portfolio transactions is legally permissible and
advisable. The fund seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review
whether recapture opportunities are available and are legally permissible
and, if so, to determine in the exercise of their business judgment whether
it would be advisable for the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as the fund is concerned. In other cases,
however, the ability of the fund to participate in volume transactions will
produce better executions and prices for the fund. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to the fund outweighs any disadvantages that may be said
to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Co. (FSC) normally determines each class's NAV at
2:00 p.m. and 4:00 p.m. Eastern time. The valuation of portfolio securities
is determined as of these times for the purpose of computing each
class's NAV.
Portfolio securities and other assets are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its current market value. The amortized cost value of an instrument
may be higher or lower than the price the fund would receive if sold the
instrument.
During periods of declining interest rates, a class's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing the fund's investments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. The fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page .
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize the fund's NAV at
$1.00. At such intervals as they deem appropriate, the Trustees consider
the extent to which NAV calculated by using market valuations would deviate
from $1.00 per share. If the Trustees believe that a deviation from the
fund's amortized cost per share may result in material dilution or other
unfair results to shareholders, the Trustees have agreed to take such
corrective action, if any, as they deem appropriate to eliminate or reduce,
to the extent reasonably practicable, the dilution or unfair results. Such
corrective action could include selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; redeeming shares in kind; establishing NAV
by using available market quotations; and such other measures as the
Trustees may deem appropriate.
PERFORMANCE
The fund may quote performance in various ways. All performance information
supplied by the fund in advertising is historical and is not intended to
indicate future returns. Yield and total return fluctuate in response to
market conditions and other factors.
YIELD CALCULATIONS. To compute a class's yield for a period, the net change
in value of a hypothetical account containing one share reflects the value
of additional shares purchased with dividends from the one original share
and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. Each class also
may calculate an effective yield by compounding the base period return over
a one-year period. In addition to the current yield, the fund may quote
yields in advertising based on any historical seven-day period. Yields for
each class of the fund are calculated on the same basis as other money
market funds, as required by applicable regulations.
Yield information may be useful in reviewing a class's performance and in
providing a basis for comparison with other investment alternatives.
However, each class's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
class's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates a class's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to the fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing a class's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a class's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in a class's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
class over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of
return that would equal 100% growth on a compounded basis in ten years.
While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that a class's
performance is not constant over time, but changes from year to year, and
that average annual total returns represent averaged figures as opposed to
the actual year-to-year performance of a class.
In addition to average annual total returns, a class may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL FUND RESULTS. The following table shows the 7-day yields and
total returns for each class of the fund for the period ended July 31,
1996.
U.S. Treasury Portfolio
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Seven-Day One Five Ten One Five Ten
Yield Year Years Years Year Years Years
Class B* 4.08 % 0.33 % 3.52 % 5.41 % 0.33 % 18.88 % 69.40 %
Initial Class 4.78 % 5.06 % 4.00 % 5.57% 5.06 % 21.64 % 71.88 %
</TABLE>
* Average annual and cumulative total returns include the effect of
applicable contingent deferred sales charges (CDSC) of 4% and 1% for one
and five year periods , respectively.
Initial offering of Class B shares took place on July 1, 1994. Returns
prior to that date are those of Initial Class, the original class of the
fund and do not reflect Class B's 1.00% 12b-1 fee. Initial Class shares are
sold to eligible investors without a sales load, but with a 12b-1 fee of up
to 0.40%.
Note: If FMR had not reimbursed certain fund expenses during these periods
Class B and Initial Class' seven-day yield s would have been
3.62 % and 4.72 %, respectively, and total returns would have
been lower.
The following tables show the income and capital elements of each class's
cumulative total return. The tables compare each class's return to the
record of the Standard & Poor's 500 Index (S&P 500(registered trademark)),
the Dow Jones Industrial Average (DJIA), and the cost of living (measured
by the Consumer Price Index, or CPI) over the same period. The CPI
information is as of the month-end closest to the initial investment date
for the fund. The S&P 500 and DJIA comparisons are provided to show how
each class's total return compared to the record of a broad average of
common stocks and a narrower set of stocks of major industrial companies,
respectively, over the same period. Of course, since the fund invests in
short-term fixed-income securities, common stocks represent a different
type of investment from the fund. Common stocks generally offer greater
growth potential than the funds, but generally experience greater price
volatility, which means greater potential for loss. In addition, common
stocks generally provide lower income than fixed-income investment such as
the fund. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the fund's returns, do not include
the effect of paying brokerage commissions or other costs of investing.
During the ten-year period ended July 31, 1996, a hypothetical $10,000
investment in Class B would have grown to $ 16,940 assuming all
distributions were reinvested. This was a period of fluctuating interest
rates and the figures below should not be considered representative of the
dividend income or capital gain or loss that could be realized from an
investment in Class B today.
U.S. Treasury Portfolio: CLASS B INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living*
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1987 $ 10,000 $ 581 $ 0 $ 10,581 $ 13,932 $ 14,959 $ 10,393
1988 $ 10,000 $ 1,263 $ 0 $ 11,263 $ 12,300 $ 12,815 $ 10,822
1989 $ 10,000 $ 2,237 $ 0 $ 12,237 $ 16,225 $ 16,616 $ 11,361
1990 $ 10,000 $ 3,245 $ 0 $ 13,245 $ 17,279 $ 18,842 $ 11,909
1991 $ 10,000 $ 4,131 $ 0 $ 14,131 $ 19,485 $ 20,352 $ 12,438
1992 $ 10,000 $ 4,732 $ 0 $ 14,732 $ 21,979 $ 23,524 $ 12,831
1993 $ 10,000 $ 5,141 $ 0 $ 15,141 $ 23,902 $ 25,271 $ 13,187
1994 $ 10,000 $ 5,570 $ 0 $ 15,570 $ 25,134 $ 27,622 $ 13,553
1995 $ 10,000 $ 6,236 $ 0 $ 16,236 $ 31,696 $ 35,458 $ 13,927
1996 $ 10,000 $ 6,940 $ 0 $ 16,940 $ 36,948 $ 42,567 $ 14,338
</TABLE>
* From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on July 31,
198 6 , the net amount invested in Class B was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends for the period covered (their cash value at the time
they were reinvested), amounted to $ 16,940 . If distributions had not
been reinvested, the amount of distributions earned from Class B over time
would have been smaller, and the cash payments (dividends) for the period
would have amounted to $ 5,284 . The fund did not distribute any
capital gains during the period. Neither tax consequences of different
investments nor CDSC's have not been factored into the above figures.
Initial offering of Class B shares took place on July 1, 1994. Returns
prior to that date are those of Initial Class, the original class of the
fund and do not reflect Class B's 1.00% 12b-1 fee. Initial Class shares are
sold to eligible investors without a sales load, but with a 12b-1 fee of up
to 0.40%. If FMR had not reimbursed certain fund expenses during the
periods shown, total returns would have been lower.
During the ten year period ended July 31, 1996, a hypothetical $10,000
investment in Initial Class would have grown to $ 17,188 , assuming
all distributions were reinvested. This was a period of fluctuating
interest rates and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in Initial Class today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury Portfolio: INITIAL CLASS INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living*
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1987 $ 10,000 $ 581 $ 0 $ 10,581 $ 13,932 $ 14,959 $ 10,393
1988 $ 10,000 $ 1,263 $ 0 $ 11,263 $ 12,300 $ 12,815 $ 10,822
1989 $ 10,000 $ 2,237 $ 0 $ 12,237 $ 16,225 $ 16,616 $ 11,361
1990 $ 10,000 $ 3,245 $ 0 $ 13,245 $ 17,279 $ 18,842 $ 11,909
1991 $ 10,000 $ 4,131 $ 0 $ 14,131 $ 19,485 $ 20,352 $ 12,438
1992 $ 10,000 $ 4,732 $ 0 $ 14,732 $ 21,979 $ 23,524 $ 12,831
1993 $ 10,000 $ 5,141 $ 0 $ 15,141 $ 23,902 $ 25,271 $ 13,187
1994 $ 10,000 $ 5,578 $ 0 $ 15,578 $ 25,134 $ 27,622 $ 13,553
1995 $ 10,000 $ 6,361 $ 0 $ 16,361 $ 31,696 $ 35,458 $ 13,927
1996 $ 10,000 $ 7,188 $ 0 $ 17,188 $ 36,948 $ 42,567 $ 14,338
</TABLE>
* From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on July 31,
198 6 , the net amount invested in Initial Class shares was $10,000.
The cost of the initial investment ($10,000), together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 17,188 . If
distributions had not been reinvested, the amount of distributions earned
from the Initial Class over time would have been smaller, and cash payments
(dividends) for the period would have amounted to $ 5,430 . The fund
did not distribute any capital gains during the period. Tax consequences of
different investments have not been factored into the above figures.
PERFORMANCE COMPARISONS. A class's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper ranking s are based on
total return, assume reinvestment of distributions, do not take sales
charges or redemption fees into consideration, and are prepared without
regard to tax consequences. Lipper may also rank funds based on yield. In
addition to the mutual fund rankings, a class's performance may be compared
to stock, bond, and money market mutual fund performance indices prepared
by Lipper or other organizations. When comparing these indices, it is
important to remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a class's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
The fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, while
the fund may offer greater liquidity or higher potential returns than CDs,
the fund does not guarantee your principal or your return, and fund shares
are not FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
The fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All
Taxable, which is reported in the MONEY FUND REPORT(registered trademark),
covers over 817 t axable and 411 U.S. Government money market
funds.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
Class B may be advertised as part of certain asset allocation programs
involving other Fidelity or non-Fidelity mutual funds. These asset
allocation programs may advertise a model portfolio and its performance
results.
Class B may be advertised as part of a no transaction fee (NTF) program in
which Fidelity and non-Fidelity mutual funds are offered. An NTF program
may advertise performance results.
The fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
The fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of July 31, 1996, FMR advised over $ 27 billion in tax-free
fund assets, over $ 90 billion in money market fund assets,
over $263 billion in equity fund assets, over $ 54
billion in international fund assets, and over $ 23 billion in
Spartan fund assets. The fund may reference the growth and variety of money
market mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management figure represents the largest
amount of equity fund assets under management by a mutual fund investment
adviser in the United States, making FMR America's leading equity (stock)
fund manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching and
managing investments abroad.
In addition to performance rankings, each class may compare its
total expense ratio to the average total expense ratio of similar funds
tracked by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the NAV of the Class B Shares. Shareholders receiving securities
or other property on redemption may realize a gain or loss for tax
purposes, and will incur any costs of sale, as well as the associated
inconveniences.
Pursuant to Rule 11a-3 (the Rule) under the 1940 Act, the fund is required
to give shareholders at least 60 days' notice prior to terminating or
modifying its exchange privilege. Under the Rule, the 60 - day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee or deferred sales charge ordinarily payable at the time of
exchange, or (ii) the fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the prospectus, the fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
CLASS B WAIVERS. The contingent deferred sales charge (CDSC) on Class B
shares may be waived in the case of (1) disability or death, provided that
the redemption is made within one year following the death or initial
determination of disability, or (2) in connection with a total or partial
redemption made in connection with distributions from retirement plan
accounts at age 70 1/2 which are permitted without penalty pursuant to the
Internal Revenue Code.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because the fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends-received deduction. A portion of the fund's
dividends derived from certain U.S. Government obligations may be exempt
from state and local taxation. The fund will send each shareholder a notice
in January describing the tax status of dividend and capital gain
distributions (if any) for the prior year.
CAPITAL GAIN DISTRIBUTIONS. The fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its NAV at $1.00 per share. The fund does not anticipate
earning long-term capital gains on securities held by the fund.
As of the fiscal year ended 1996, the fund had a capital loss carryforward
aggregating approximately $ 438,000 . This loss carryforward will
expire on the fiscal year ended July 31, 2002 and is available to
offset future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state laws provide for a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. Government securities. Some
states limit this to mutual funds that invest a certain amount in U.S.
Government securities, and some types of securities, such as repurchase
agreements and some agency backed securities, may not qualify for this
benefit. The tax treatment of your dividend distributions from the fund
will be the same as if you directly owned your proportionate share of the
U.S. Government securities in the fund's portfolio. Because the income
earned on most U.S. Government securities in which the fund invests is
exempt from state and local income taxes, the portion of your dividends
from the fund attributable to these securities will also be free from
income taxes. The exemption from state and local income taxation does not
preclude states from assessing other taxes on the ownership of U.S.
Government securities. In a number of states, corporate franchise (income)
tax laws do not exempt interest earned on U.S. Government securities
whether such securities are held directly or through a fund.
TAX STATUS OF THE FUND. The fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
the fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
The fund is treated as a separate entity from the other funds of Daily
Money Fund for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether the fund is suitable to their particular tax
situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account s pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of the
trust are listed below. Except as indicated, each individual has held the
office shown or other offices in the same company for the last five years.
Trustees and officers elected or appointed to Daily Money Fund prior to the
fund's conversion from a series of a Massachusetts business trust served in
identical capacities. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds advised by
FMR. The business address of each Trustee and officer who is an "interested
person" (as defined in the 1940 Act) is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of FMR. The business address
of all the other Trustees and Members of the Advisory Board is Fidelity
Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation with
either the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (66), Trustee and President, is Chairman,
President, Chief Executive Officer and a Director of FMR Corp.; a
Director and Chairman of the Board and of the Executive Committee of FMR;
Chairman and a Director of FMR Texas Inc., Fidelity Management & Research
(U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD (55), Trustee and Senior Vice President, is Managing
Director of FMR Corp., President and Director of FMR; FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
RALPH F. COX (64), Trustee (1991), is a management consultant (1994). Prior
to February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Sanifill Corporation
(non-hazardous waste, 1993) , CH2M Hill Companies (engineering), Rio
Grande , Inc. , (oil and gas production), and Daniel Industries
(petroleum measurement equipment manufacturer). In addition, he is a member
of advisory boards of Texas A&M University and the University of Texas at
Austin.
PHYLLIS BURKE DAVIS (64), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
RICHARD J. FLYNN (72), Trustee and Chairman of the non-interested Trustees,
is a financial consultant. Prior to September 1986, Mr. Flynn was Vice
Chairman and a Director of the Norton Company (manufacturer of industrial
devices). He is currently a Trustee of College of the Holy Cross and Old
Sturbridge Village, Inc., and he previously served as a Director of
Mechanics Bank (1971-1995).
E. BRADLEY JONES (68), Trustee. Prior to his retirement in 1984, Mr. Jones
was Chairman and Chief Executive Officer of LTV Steel Company. He is a
Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products), and
he previously served as a Director of NACCO Industries, Inc. (mining and
marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995).
In addition, he serves as a Trustee of First Union Real Estate Investments,
a Trustee and member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK (63), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the
Greenwich Hospital Association, a Member of the Public Oversight Board of
the American Institute of Certified Public Accountants' SEC Practice
Section (1995), and a Public Governor of the National Association of
Securities Dealers, Inc. (1996).
*PETER S. LYNCH (53), Trustee , is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
WILLIAM O. McCOY (62), Member of the Advisory Board (1996), is the Vice
President of Finance for the University of North Carolina (16-school
system, 1995). Prior to his retirement in December 1994, Mr. McCoy was Vice
Chairman of the Board of BellSouth Corporation (telecommunications) and
President of BellSouth Enterprises. He is currently a Director of Liberty
Corporation (holding company), Weeks Corporation of Atlanta (real estate,
1994), and Carolina Power and Light Company (electric utility, 1996).
Previously, he was a Director of First American Corporation (bank holding
company, 1979-1996). In addition, Mr. McCoy serves as a member of the Board
of Visitors for the University of North Carolina at Chapel Hill (1994) and
for the Kenan Flager Business School (University of North Carolina at
Chapel Hill).
GERALD C. McDONOUGH (67), Trustee and Vice-Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Prior to his retirement in July 1988, he was Chairman and Chief
Executive Officer of Leaseway Transportation Corp. (physical distribution
services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal
working, telecommunications and electronic products), Brush-Wellman Inc.
(metal refining), York International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp. (water treatment equipment,
1992), and Associated Estates Realty Corporation (a real estate investment
trust, 1993).
EDWARD H. MALONE (71), Trustee. Prior to his retirement in 1985, Mr. Malone
was Chairman, General Electric Investment Corporation and a Vice President
of General Electric Company. He is a Director of Allegheny Power Systems,
Inc. (electric utility), General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). In addition, he serves as a Trustee of the Naples
Philharmonic Center for the Arts and Rensselaer Polytechnic Institute, and
he is a member of the Advisory Boards of Butler Capital Corporation Funds
and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (63), Trustee (1993) , is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International, Inc.
(office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and subsidiaries.
Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart
(marketing services, 1991), a Trammell Crow Co. In addition, he serves as
the Campaign Vice Chairman of the Tri-State United Way (1993) and is a
member of the University of Alabama President's Cabinet.
THOMAS R. WILLIAMS (67), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
SARAH H. ZENOBLE ( 4 7), Vice President of FMR Texas ,
Inc. and of money market funds advised by FMR.
LELAND BARRON (37), Vice President, is Vice President of FMR ,
Texas Inc. and of other funds advised by FMR.
ARTHUR S. LORING (48), Secretary, is Senior Vice President (1993) ,
Clerk and General Counsel of FMR, Vice President-Legal of FMR Corp.,
and Vice President and Clerk of FDC.
KENNETH A. RATHGEBER (49), Treasurer (1995), is Treasurer of the Fidelity
funds and is Vice President of FMR . Before joining FMR, Mr.
Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he
served in various positions, including Vice President of Proprietary
Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief
Operations Officer of Goldman Sachs (Asia) LLC (1994-1995).
THOMAS D. MAHER (51), Assistant Vice President, is Assistant Vice President
of Fidelity's money market funds and Vice President and Associate General
Counsel of FMR Texas Inc.
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1993-1994).
THOMAS J. SIMPSON (38), Assistant Treasurer (1996), is Assistant Treasurer
of Fidelity's money market funds and an employee of FMR (1996). Prior to
joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty
Investment Services (1987-1995).
The following table sets forth information describing the compensation of
each current Trustee of the fund for his or her services as trustee for the
fiscal year ended July 31, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Pension or Estimated Annual Total
Compensation Retirement Benefits Upon Compensation
from Benefits Accrued Retirement from from the Fund
the Fund as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0
Ralph F. Cox 720 5,200 52,000 128,000
Phyllis Burke Davis 705 5,200 52,000 125,000
Richard J. Flynn 915 0 52,000 160,500
Edward C. Johnson 3d ** 0 0 0 0
E. Bradley Jones 714 5,200 49,400 128,000
Donald J. Kirk 714 5,200 52,000 129,500
Peter S. Lynch ** 0 0 0 0
William O. McCoy 179 N/A N/A 0
Gerald C. McDonough 705 5,200 52,000 128,000
Edward H. Malone 705 5,200 44,200 128,000
Marvin L. Mann 705 5,200 52,000 128,000
Thomas R. Williams 713 5,200 52,000 125,000
</TABLE>
* Information is as of December 31, 1995 for 219 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on the fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
The fund may invest in such designated securities under the Plan without
shareholder approval.
Under a retirement program adopted in July 1988 and modified in November
1995, each non-interested Trustee may receive payments from a
Fidelity fund during his or her lifetime based on his or her basic trustee
fees and length of service. The obligation of a fund to make such
payments is neither secured n or funded. A Trustee becomes
eligible to participate in the program at the end of the calendar year in
which he or she reaches age 72, provided that, at the time of retirement,
he or she has served as a Fidelity fund Trustee for at least five
years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H.
Witham, and David L. Yunich, all former non-interested Trustees, receive
retirement benefits under the program.
On August 31, 1996, the Trustees and officers of the fund owned, in
the aggregate, less than 1 % of the fund's total outstanding shares.
As of August 31, 1996 , the following owned of record or beneficially
5% or more of outstanding shares of the fund.
U.S. Treasury Portfolio - Class B: Walnut Street Securities, St.
Louis, MO 72.13%
U.S. Treasury Portfolio - Initial Class: First Trust, St. Paul, MN
28.71%
Texas Commerce Bank, N.A., Houston, TX 15.53%
The Bank of New York, New York, NY 5.45%
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of the fund. These services include providing facilities
for maintaining the fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
laws; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FIIOC and FSC, the fund or class thereof, as applicable, pays all of its
expenses, without limitation, that are not assumed by those parties. The
fund pays for the typesetting, printing, and mailing of its proxy material
to shareholders, legal expenses, and the fees of the custodian, auditor and
non-interested Trustees. Although the fund's current management contract
provides that the fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices and reports to
shareholders, the trust, on behalf of the fund, has entered into a revised
transfer agent agreement with FIIOC, pursuant to which FIIOC bears the
costs of providing these services to existing shareholders of the
applicable class. Other expenses paid by the fund include interest, taxes,
brokerage commissions, the fund's proportionate share of insurance premiums
and Investment Company Institute dues, and the costs of registering shares
under federal and state securities laws. The fund is also liable for such
non-recurring expenses as may arise, including costs of any litigation to
which the fund may be a party, and any obligation it may have to indemnify
its officers and Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management contract dated September
30, 1993, which was approved by shareholders on March 24, 1993.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee at the annual rate of 0.50% of the average net assets of the
fund throughout the month. For the fiscal years ended 1996, 1995 and 1994,
FMR received $ 10,004,781 , $9,784,211, and $13,343,263 respectively.
FMR may, from time to time, voluntarily reimburse all or a portion of the
class 's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase the class's total returns and yield and
repayment of the reimbursement by the class's will lower its total
returns and yield.
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 21/2% of the first $30 million, 2% of the next
$70 million, and 11/2% of average net assets in excess of $100 million.
When calculating the fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas
pursuant to which FMR Texas has primary responsibility for providing
portfolio investment management services to the fund.
Under the sub-advisory agreement dated September 30, 1993, which was
approved by shareholders on March 24, 1993, FMR pays FMR Texas fees equal
to 50% of the management fee payable to FMR under its management contract
with the fund, after payments by FMR pursuant to each class's 12b-1 plan,
if any. The fees paid to FMR Texas are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to time.
On behalf of the fund for the fiscal years ended 1996, 1995, and
1994 , FMR paid FMR Texas fees of $ 2,098,350 , $1,886,692, and
$2,367,209, respectively.
CONTRACTS WITH FMR AFFILIATES
FIIOC, an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund. Under this arrangement FIIOC
receives an annual account fee and an asset-based fee , each based on
account size and fund type for each retail account and certain
institutional accounts. With respect to certain institutional retirement
accounts, FIIOC receives an annual account fee and an asset - based
fee based on account type or fund type. These annual account fees are
subject to increase based on postal rate changes.
FIIOC bears the expense of typesetting, printing, and mailing prospectuses,
statements of additional information, and all other reports, notices, and
statements to shareholders, with the exception of proxy statements. Also,
FIIOC pays out-of-pocket expenses associated with transfer agent services.
FSC, an affiliate of FMR, performs the calculations necessary to determine
NAV and dividends for Class B and maintains the fund's accounting records.
The annual fee rates for these pricing and bookkeeping services are based
on the fund's average net assets, specifically, 0.0175% for the first $500
million of average net assets and 0.0075% of average net assets in excess
of $500 million. The fee is limited to a minimum of $40,000 and a maximum
of $800,000 per year. Pricing and bookkeeping fees, including reimbursement
for out-of-pocket expenses, paid to FSC for the fiscal years ended 1996,
1995, and 1994 were $ 200,897 , $196,883, and $250,737, respectively.
The fund has a distribution agreement with FDC, a Massachusetts corporation
organized on July 18, 1960. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The distribution agreement calls for FDC to use
all reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered at NAV.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FDC. The table below shows the sales charge
revenue paid to FDC, and retained by FDC, for the following fiscal periods
ending:
CDSC Revenue
$ Paid to FDC $ Retained By FDC
July 31, 1996 $ 33,539 $ 33,539
July 31 , 1995 $ 8,806 $ 8,806
July 31, 1994 $ 0 $ 0
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on behalf of
Class B of the fund (the Plan) pursuant to Rule 12b-1 under the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is primarily
intended to result in the sale of shares of a fund except pursuant to a
plan approved on behalf of the fund under the Rule. The Plan, as approved
by the Trustees, allows Class B of the fund and FMR to incur certain
expenses that might be considered to constitute direct or indirect payment
by the fund of distribution expenses.
Pursuant to the Plan, FDC is paid a distribution fee at an annual rate of
0.75% of Class B's average net assets determined as of the close of
business on each day throughout the month. Class B also pays investment
professionals a service fee at an annual rate of 0.25% of its average daily
net assets determined at the close of business on each day throughout the
month for the personal service and/or maintenance of shareholder accounts.
For the fiscal years ended 1996 and 1995, FDC was paid distribution fees of
$ 65,060 and $21,362, respectively. In addition, for the fiscal years
ended 1996, and 1995, Class B paid shareholder service fees of
$ 25,397 and $11,949, respectively.
Under the Plan, if the payment of management fees by the fund to FMR is
deemed to be indirect financing by the fund of the distribution of its
shares, such payment is authorized by the Plan. The Plan specifically
recognizes that FMR, either directly or through FDC, may use its management
fee revenue, past profits, or any other source to reimburse FDC for
expenses incurred in connection with distribution of Class B shares;
including payments made to third parties that assist in selling shares of
the applicable class of the fund, or to third parties, including banks,
that render shareholder support services.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
Class B shares and its shareholders. To the extent that the Plan gives FMR
and FDC greater flexibility in connection with the distribution of Class B
shares of the fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plan by local entities with whom shareholders have
other relationships.
The Class B Plan does not provide for specific payments by Class B of any
of the expenses of FDC, or obligate FDC or FMR to perform any specific type
o r level of distribution activities or incur any specific level of
expense in connection with distribution activities. After payments by FDC
for advertising, marketing and distribution, and payments to third parties,
the amounts remaining, if any, may be used as FDC may elect.
The Plan was approved by FMR as the then sole shareholder of Class B on May
2, 1994.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plan. No
preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. U.S. Treasury Portfolio is a fund of Daily Money Fund,
an open-end management investment company originally organized as a
Massachusetts business trust. On September 29, 1993, the trust was
converted to a Delaware business trust pursuant to an agreement approved by
shareholders on March 24, 1993. The fund acquired all of the assets of the
U.S. Treasury Portfolio, on September 29, 1993. Currently, there are six
funds of the trust: U.S. Treasury Portfolio; Money Market Portfolio;
Treasury Only; Capital Reserves: Money Market Portfolio; Capital Reserves:
U.S. Government Portfolio; and Capital Reserves: Municipal Money Market
Portfolio. The Trust Instrument permits the Trustees to create additional
funds.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn.
The assets of the t rust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expenses can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is a business trust organized
under Delaware law. Delaware law provides that shareholders shall be
entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The Trust
Instrument contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the trust and requires
that a disclaimer be given in each contract entered into or executed by the
trust or the Trustees. The Trust Instrument provides for indemnification
out of the fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instrument
also provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
and satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which Delaware law does not apply, no contractual
limitation of liability was in effect, and the fund is unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is extremely remote.
The Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any person
other than the trust or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever, provided that Trustees are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office. Claims
asserted against one class of shares may subject holders of another class
of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. Class B Shares have no preemptive or conversion rights; the
voting and dividend rights, the right of redemption, and the privilege of
exchange are described in the Prospectus. Shares are fully paid and
nonassessable, except as set forth under the heading "Shareholder and
Trustee Liability" above. Shareholders representing 10% or more of the
trust, a fund or a class may, as set forth in the Trust Instrument, call
meetings of the trust, fund or class for any purpose related to the trust
or fund or class, as the case may be, including, in the case of a meeting
of the entire trust, the purpose of voting on removal of one or more
Trustees.
The trust or the fund may be terminated upon the sale of its assets to, or
merger with, another open-end management investment company or series
thereof, or upon liquidation and distribution of its assets. Generally such
terminations must be approved by vote of the holders of a majority of the
outstanding shares of the trust or the fund; however, the Trustees may,
without prior shareholder approval, change the form of organization of the
trust by merger, consolidation, or incorporation. If not so terminated or
reorganized, the trust and its funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the trust to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the trust registration
statement. Each fund may also invest all of its assets in another
investment company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York,
NY, 10260, is custodian of the assets of the fund. The custodian is
responsible for the safekeeping of the fund's assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of the fund or in deciding which
securities are purchased or sold by the fund. However, the fund may invest
in obligations of the custodian and may purchase securities from or sell
securities to the custodian. The Chase Manhattan Bank, headquartered
in New York, also may serve as a special purpose custodian of certain
assets in connection with repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential custodial
or other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P., 1999 Bryan Street, Dallas, TX
75201 , serves as the fund's independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
The fund's financial statements for the fiscal year ended July 31,
1996 are included in the fund's Annual Report, which is attached to the
Prospectus. The fund's financial statements and financial highlights are
incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the fund.
The fund may, however, consider the ratings for other types of investments
and the ratings assigned by other rating organizations when determining the
eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE COMMERCIAL PAPER RATINGS:
Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earning coverage of fixed financial charges and with high
internal cash generation.
Well established access to a range of financial markets and assured sources
of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earning trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
DESCRIPTION OF STANDARD & POOR'S COMMERCIAL PAPER RATINGS:
A - Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with
the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) 1. Financial Statements and Financial Highlights, included in
the Annual Report for Daily Money Fund: Money Market Portfolio for the
fiscal year ended July 31, 1996, are included in the fund's prospectus, are
incorporated by reference into the fund's Statement of Additional
Information, and were filed September 11, 1996 for Daily Money Fund: Money
Market Portfolio, pursuant to Rule 30d-1 under the Investment Company Act
of 1940 and are incorporated herein by reference.
2. Financial Statements and Financial Highlights, included in
the Annual Report for Daily Money Fund: U.S. Treasury Portfolio for the
fiscal year ended July 31, 1996, are included in the fund's prospectus, are
incorporated by reference into the fund's Statement of Additional
Information, and were filed September 11, 1996 for Daily Money Fund: U.S.
Treasury Portfolio, pursuant to Rule 30d-1 under the Investment Company Act
of 1940 and are incorporated herein by reference.
(b) Exhibits:
1. (a) Trust Instrument dated June 20, 1991 is electronically filed
herein as Exhibit 1(a).
(b) Certificate of Trust of Daily Money Fund II, dated June 20, 1991 was
electronically filed and is incorporated herein by reference to Exhibit
1(b) to Post-Effective Amendment No. 30.
(c) Certificate of Amendment of Daily Money Fund II to Daily Money Fund,
dated July 14, 1995 was electronically filed and is incorporated herein by
reference as Exhibit 1(c) to Post-Effective Amendment No. 31.
2. (a) By-Laws of the Trust effective May 19, 1994 were electronically
filed and are incorporated herein by reference to Exhibit 2(a) to Fidelity
Union Street Trust II's Post-Effective Amendment No. 10.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract dated September 30, 1993 between Daily Money
Fund, on behalf of U.S. Treasury Income Portfolio, and Fidelity Management
& Research Company was electronically filed and is incorporated herein by
reference as Exhibit 5(a) to Post-Effective Amendment No. 25.
(b) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Money Market Portfolio, and Fidelity Management & Research
Company was electronically filed and is incorporated herein by reference as
Exhibit 5(b) to Post-Effective Amendment No. 25.
(c) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of U.S. Treasury Portfolio, and Fidelity Management & Research
Company was electronically filed and is incorporated herein by reference as
Exhibit 5(c) to Post-Effective Amendment No. 25.
(d) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Capital Reserves: Municipal Money Market Portfolio, and
Fidelity Management & Research Company was electronically filed and is
incorporated herein by reference as Exhibit 5(d) to Post-Effective
Amendment No. 25.
(e) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Capital Reserves: Money Market Portfolio, and Fidelity
Management & Research Company was electronically filed and is incorporated
herein by reference as Exhibit 5(e) to Post-Effective Amendment No. 25.
(f) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Capital Reserves: U.S. Government Portfolio, and Fidelity
Management & Research Company was electronically filed and is incorporated
herein by reference as Exhibit 5(f) to Post-Effective Amendment No. 25.
(g) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Money Market
Portfolio, was electronically filed and is incorporated herein by reference
as Exhibit 5(g) to Post-Effective Amendment No. 25.
(h) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of U.S. Treasury
Portfolio, was electronically filed and is incorporated herein by reference
as Exhibit 5(h) to Post-Effective Amendment No. 25.
(i) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Capital Reserves:
Money Market Portfolio, was electronically filed and is incorporated herein
by reference as Exhibit 5(i) to Post-Effective Amendment No. 25.
(j) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Capital Reserves:
U.S. Government Portfolio, was electronically filed and is incorporated
herein by reference as Exhibit 5(j) to Post-Effective Amendment No. 25.
(k) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Capital Reserves:
Municipal Money Market Portfolio, was electronically filed and is
incorporated herein by reference as Exhibit 5(k) to Post-Effective
Amendment No. 25.
(l) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of U.S. Treasury
Income Portfolio, was electronically filed and is incorporated herein by
reference as Exhibit 5(l) to Post-Effective Amendment No. 25.
6. (a) General Distribution Agreement dated September 30, 1993 between
Daily Money Fund, on behalf of Money Market Portfolio, and Fidelity
Distributors Corporation was electronically filed and is incorporated
herein by reference as Exhibit 6(a) to Post-Effective Amendment No. 25.
(b) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of U.S. Treasury Portfolio, and Fidelity Distributors
Corporation was electronically filed and is incorporated herein by
reference as Exhibit 6(b) to Post-Effective Amendment No. 25.
(c) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of U.S. Treasury Income Portfolio, and Fidelity
Distributors Corporation was electronically filed and is incorporated
herein by reference as Exhibit 6(c) to Post-Effective Amendment No. 25.
(d) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Capital Reserves: U.S. Government Portfolio, and
National Financial Services Corporation was electronically filed and is
incorporated herein by reference as Exhibit 6(d) to Post-Effective
Amendment No. 25.
(e) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Capital Reserves: Municipal Money Market
Portfolio, and National Financial Services Corporation was electronically
filed and is incorporated herein by reference as Exhibit 6(e) to
Post-Effective Amendment No. 25.
(f) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Capital Reserves: Money Market Portfolio, and
National Financial Services Corporation was electronically filed and is
incorporated herein by reference as Exhibit 6(f) to Post-Effective
Amendment No. 25.
(g) Specimen of Service Contract between Fidelity Distributors Corporation
and "Qualified Recipients" with respect to shares of U.S. Treasury
Portfolio and Money Market Portfolio was electronically filed and is
incorporated herein by reference to Exhibit 6(g) to Post-Effective
Amendment No. 34.
(h) Specimen of Service Contract (Administrative and Recordkeeping
Services Only) between Fidelity Distributors Corporation and "Qualified
Recipients" with respect to shares of U.S. Treasury Portfolio and Money
Market Portfolio was electronically filed and is incorporated herein by
reference to Exhibit 6(h) to Post-Effective Amendment No. 34.
(i) Specimen of Service Contract between Fidelity Distributors Corporation
and "Qualified Recipients" with respect to Fidelity Institutional Money
Market Funds was electronically filed and is incorporated herein by
reference to Exhibit 6(e) to Fidelity Institutional Cash Portfolios'
Post-Effective Amendment No. 32.
(j) Specimen of Service Contract (Administrative and Recordkeeping
Services Only) between Fidelity Distributors Corporation and "Qualified
Recipients" with respect to Fidelity Institutional Money Market Funds was
electronically filed and is incorporated herein by reference to Exhibit
6(f) to Fidelity Institutional Cash Portfolios' Post-Effective Amendment
No. 32.
(k) Form of Bank Agency Agreement (most recently revised August 1996) is
electronically filed herein as Exhibit 6(k).
(l) Form of Selling Dealer Agreement for Bank Related Transactions (most
recently revised August 1996) is electronically filed herein as Exhibit
6(l).
(m) Form of Selling Dealer Agreement (most recently revised July 1996) is
electronically filed herein as Exhibit 6(m).
7. (a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners was electronically filed and is incorporated herein by
reference to Exhibit 7 to Union Street Trust's Post-Effective Amendment No.
87.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of December 1, 1995, was
electronically filed and incorporated herein by reference to Exhibit 7(b)
to Fidelity School Street Trust's Post-Effective Amendment No. 47 (File
No. 2-57157).
8. (a) Custodian Agreement and Appendix C, dated December 1, 1994,
between the Bank of New York and Fidelity Daily Money Fund on behalf of
Treasury Only; Money Market Portfolio; U.S. Treasury Portfolio; and Capital
Reserves: U.S. Government Portfolio, and Money Market Portfolio were
electronically filed and are incorporated herein by reference to Exhibit
8(a) to Fidelity Hereford Street Trust's Post-Effective Amendment No. 4
(File No. 33-52577).
(b) Appendix A, dated May 16, 1996, to the Custodian Agreement, dated
December 1, 1994, between The Bank of New York and Fidelity Daily Money
Fund on behalf of Treasury Only; Money Market Portfolio; U.S. Treasury
Portfolio; and Capital Reserves: U.S. Government Portfolio and Money Market
Portfolio was electronically filed and is incorporated herein by reference
to Exhibit 8(e) of Fidelity Select Portfolios Post-Effective Amendment No.
55 (File No. 2-69972).
(c) Appendix B, dated September 14, 1995, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and Fidelity Daily
Money Fund on behalf of Treasury Only; Money Market Portfolio; U.S.
Treasury Portfolio; and Capital Reserves: U.S. Government Portfolio and
Money Market Portfolio was electronically filed and is incorporated herein
by reference to Exhibit 8(e) of Fidelity Charles Street Trust's
Post-Effective Amendment No. 54 (File No. 2-73133).
(d) Custodian Agreement, Appendix A, Appendix B, and Appendix C, dated
December 1, 1994, between UMB Bank, n.a. and Fidelity Daily Money Fund on
behalf of Capital Reserves: Municipal Money Market Portfolio was
electronically filed and is incorporated herein by reference to Exhibit 8
of Fidelity California Municipal Trust's Post-Effective Amendment No. 28
(File No. 2-83367).
(e) Fidelity Group Repo Custodian Agreement among The Bank of New York, J.
P. Morgan Securities, Inc., and the Fidelity Funds, as currently in effect,
was electronically filed and is incorporated herein by reference to Exhibit
8(d) of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(f) Schedule 1 to the Fidelity Group Repo Custodian Agreement among The
Bank of New York, J. P. Morgan Securities, Inc., as currently in effect,
was electronically filed and is incorporated herein by reference to Exhibit
8(e) of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(g) Fidelity Group Repo Custodian Agreement among Chemical Bank, Greenwich
Capital Markets, Inc., and the Fidelity Funds, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
8(f) of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(h) Schedule 1 to the Fidelity Group Repo Custodian Agreement among
Chemical Bank, Greenwich Capital Markets, Inc., and the Fidelity Funds, as
currently in effect, was electronically filed and is incorporated herein by
reference to Exhibit 8(g) of Fidelity Institutional Cash Portfolios' (File
No. 2-74808) Post-Effective Amendment No. 31.
(i) Joint Trading Account Custody Agreement between the The Bank of New
York and the Fidelity Funds, as currently in effect, was electronically
filed and is incorporated herein by reference to Exhibit 8(h) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(j) First Amendment to Joint Trading Account Custody Agreement between the
The Bank of New York and the Fidelity Funds, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
8(i) of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
9. Not applicable.
10. None.
11. Consent of auditor is electronically filed herein as Exhibit 11.
12. None.
13. None.
14. (a ) Retirement Plan for Fidelity Individual Retirement Accounts, as
currently in effect, was electronically filed and is incorporated herein by
reference to Exhibit 14(a) to Union Street Trust's Post-Effective Amendment
No. 87
(b) Retirement Plan for Portfolio Advisory Services Individual Retirement
Account, as currently in effect, was electronically filed and is
incorporated herein by reference as Exhibit 14(i) to Union Street Trust's
Post-Effective Amendment No. 87.
(c) Retirement Plan for NFSC Individual Retirement Account, as currently
in effect, was electronically filed and is incorporated herein by reference
to Exhibit 14(h) to Union Street Trust's Post-Effective Amendment No. 87.
(d) NFSC Defined Contribution Plan, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(k) to Union Street's Trust Post-Effective Amendment No. 87.
(e) Fidelity Institutional Individual Retirement Account Custodian
Agreement and Disclosure Statement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(d) to Union Street Trust's Post-Effective Amendment No. 87.
(f) Fidelity 403(b)(7) Individual Custodial Agreement, as currently in
effect, was electronically filed and is incorporated herein by reference to
Exhibit 14(j) to Union Street Trust's Post-Effective Amendment No. 87.
(g) Fidelity 403(b) Custodial Agreement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(e) to Union Street Trust's Post-Effective Amendment No. 87.
(h) The CORPORATE plan for Retirement Profit Sharing/401k Plan, as
currently in effect, was electronically filed and is incorporated herein by
reference to Exhibit 14(l) to Union Street Trust's Post-Effective Amendment
No. 87.
(i) The CORPORATE plan for Retirement Money Purchase Pension Plan, as
currently in effect, was electronically filed and is incorporated herein by
reference to Exhibit 14(m) to Union Street Trust's Post-Effective Amendment
No. 87.
(j) Fidelity Advisor Funds Individual Retirement Account Custodial
Agreement Disclosure Statement in effect as of January 1, 1994 was filed
electronically and is incorporated herein by reference to Exhibit 14(b) to
Advisor Series I Post-Effective Amendment No. 22.
(k) Plymouth Defined Contribution Plan, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(o) to Commonwealth Trust's Post-Effective Amendment No. 57.
15. (a) Service Plan dated September 30, 1993 between Daily Money Fund,
Fidelity Management & Research Company, and Fidelity Distributors
Corporation was electronically filed and is incorporated herein by
reference as Exhibit 15(a) to Post-Effective Amendment No. 25.
(b) Distribution and Service Plan dated September 30, 1993 for Daily Money
Fund: U.S. Treasury Income Portfolio was electronically filed and
incorporated herein by reference as Exhibit 15(b) to Post-Effective
Amendment No. 25.
(c) Distribution and Service Plan dated September 30, 1993 for Daily Money
Fund: Capital Reserves: Money Market Portfolio, U.S. Government Portfolio,
and Municipal Money Market Portfolio was electronically filed and is
incorporated herein by reference to Exhibit 15(c) to Post-Effective
Amendment No. 30.
(d) Distribution and Service Plan for Class B of Daily Money Fund: U.S.
Treasury Portfolio was electronically filed and is incorporated herein by
reference as Exhibit 15(d) to Post-Effective Amendment No. 30 .
(e) Distribution and Service Plan pursuant to Rule 12b-1, for Treasury
Only Class II was electronically filed and is incorporated herein by
reference to Exhibit 15(a) to Post-Effective Amendment No. 35.
(f) Distribution and Service Plan pursuant to Rule 12b-1, for Treasury
Only Class III was electronically filed and is incorporated herein by
reference to Exhibit 15(b) to Post-Effective Amendment No. 35.
16. Schedules and data points for cumulative and average total returns and
7-day, effective, and tax-equivalent yields were electronically filed and
are incorporated herein by reference to Exhibit 16 to Post-Effective
Amendment No. 30.
17. A Financial Data Schedule is electronically filed herein as Exhibit
17.
18.(a) A Multiple Class of Shares Plan for Fidelity Institutional Money
Market Funds, dated August 1, 1996, was electronically filed and is
incorporated herein by reference to Exhibit 18(a) to Fidelity Institutional
Cash Portfolios' Post-Effective Amendment No. 32.
(b) Schedule I, dated August 1, 1996, to the Multiple Class of Shares Plan
for Fidelity Institutional Money Market Funds, dated August 1, 1996, was
electronically filed and is incorporated herein by reference to Exhibit
18(b) to Fidelity Institutional Cash Portfolios' Post-Effective Amendment
No. 32.
(c) A Multiple Class of Shares Plan for Daily Money Fund: U.S. Treasury
Portfolio, dated August 1, 1996, was electronically filed and is
incorporated herein by reference to Exhibit 18(c) to Post-Effective
Amendment No. 38.
(d) Schedule I, dated August 1, 1996, to the Multiple Class of Shares Plan
for Daily Money Fund: U.S. Treasury Portfolio, dated August 1, 1996, was
electronically filed and is incorporated herein by reference to Exhibit
18(d) to Post-Effective Amendment No. 38.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the boards of other
funds advised by FMR, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these funds
are substantially identical. Nonetheless, Registrant takes the position
that it is not under common control with these other funds since the power
residing in the respective boards and officers arises as the result of an
official position with the respective funds.
Item 26. Number of Holders of Securities
As of July 31, 1996
Title of Class Number of Record Holders
Money Market Portfolio - Initial Class 201,394
U.S. Treasury Portfolio - Initial Class 35,473
U.S. Treasury Portfolio-Class B 598
Treasury Only - Class I 2,317
Treasury Only - Class II 13
Treasury Only - Class III 178
Capital Reserves: Money Market Portfolio 147,730
Capital Reserves: U.S. Government Portfolio 12,417
Capital Reserves: Municipal Money Market Portfolio 10,807
Item 27. Indemnification
Article X, Section 10.02 of the Trust Instrument sets forth the reasonable
and fair means for determining whether indemnification shall be provided to
any past or present Trustee or officer. It states that the Registrant
shall indemnify any present or past Trustee or officer to the fullest
extent permitted by law against liability and all expenses reasonably
incurred by him in connection with any claim, action, suit or proceeding in
which he is involved by virtue of his service as a trustee, an officer, or
both. Additionally, amounts paid or incurred in settlement of such matters
are covered by this indemnification. Indemnification will not be provided
in certain circumstances, however. These include instances of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR;
President and Chief Executive Officer of FMR Corp.;
Chairman of the Board and Director of FMR, FMR
Corp., FMR Texas Inc., FMR (U.K.) Inc., and FMR
(Far East) Inc.; Chairman of the Board and
Representative Director of Fidelity Investments Japan
Limited; President and Trustee of funds advised by
FMR.
J. Gary Burkhead President and Director of FMR, FMR Texas Inc., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Managing
Director of FMR Corp.; Senior Vice President and
Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of the Board and Director of FMR.
Marta Amieva Vice President of FMR.
Dwight D. Churchill Vice President of FMR.
John D. Crumrine Assistant Treasurer of FMR, FMR (U.K.) Inc., FMR
(Far East) Inc., and FMR Texas Inc.; Vice President
and Treasurer of FMR Corp.
William Danoff Vice President of FMR and of a fund advised by FMR.
Scott E. DeSano Vice President of FMR.
Craig P. Dinsell Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
George C. Domolky Vice President of FMR.
Larry A. Domash Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of
FMR Texas Inc.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Vice President of FMR.
Bart Grenier Vice President of FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
William J. Hayes Senior Vice President of FMR; Vice President of
Equity funds advised by FMR.
Richard Hazlewood Vice President of FMR and of a fund advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical
Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Vice President of FMR and of a fund advised by FMR.
Stephen P. Jonas Vice President of FMR; Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far East) Inc., and FMR Texas Inc.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.
David P. Kurrasch Vice President of FMR.
Robert A. Lawrence Senior Vice President of FMR; Vice President of High
Income funds advised by FMR.
Alan Leifer Vice President of FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught II Vice President of FMR and of a fund advised by FMR.
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Andrew S. Offit Vice President of FMR and of a fund advised by FMR.
Jacques Perold Vice President of FMR.
Brian S. Posner Vice President of FMR and of a fund advised by FMR.
Anne Punzak Vice President of FMR.
Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Vice President of FMR; Senior Vice President and
Director of Operations and Compliance of FMR (U.K.)
Inc.
Robert E. Stansky Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of a fund advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have held
the following positions of a substantial nature during the past two fiscal
years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR
Texas, FMR, FMR Corp., FMR (Far East) Inc.,
and FMR (U.K.) Inc.; Chairman of the
Executive Committee of FMR; President and
Chief Executive Officer of FMR Corp.;
Chairman of the Board and Representative
Director of Fidelity Investments Japan Limited;
President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas, FMR,
FMR (Far East) Inc., and FMR (U.K.) Inc.;
Managing Director of FMR Corp.; Senior Vice
President and Trustee of funds advised by FMR.
Robert H. Auld Vice President of FMR Texas.
Leland C. Barron Vice President of FMR Texas and of funds
advised by FMR.
Robert K. Duby Vice President of FMR Texas and of funds
advised by FMR.
Robert Litterst Vice President of FMR Texas and of funds
advised by FMR.
Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of Money Market funds advised by
FMR.
Scott A. Orr Vice President of FMR Texas and of funds
advised by FMR.
Burnell R. Stehman Vice President of FMR Texas and of funds
advised by FMR.
John J. Todd Vice President of FMR Texas and of funds
advised by FMR.
Sarah H. Zenoble Vice President of FMR Texas and of Money
Market funds advised by FMR.
Stephen P. Jonas Treasurer of FMR Texas, FMR (U.K.) Inc.,
FMR (Far East) Inc., and FMR; Vice President
of FMR.
John D. Crumrine Assistant Treasurer of FMR Texas, FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR; Vice
President and Treasurer of FMR Corp.
Jay Freedman Secretary of FMR Texas; Clerk of FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR Corp.;
Assistant Clerk of FMR.
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Mark Peterson Director None
Neal Litvak President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the funds' respective
custodian: The Bank of New York, 110 Washington Street, New York, N.Y.; or
UMB Bank, n.a., 1010 Grand Avenue, Kansas City, MO.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant, on behalf of Daily Money Fund, undertakes to furnish to
each person to whom a prospectus has been delivered, upon their request and
without charge, a copy of the Registrant's latest annual report to
shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 39 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 13th day
of
September 1996.
DAILY MONEY FUND
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee September 13, 1996
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Kenneth A. Rathgeber Treasurer September 13, 1996
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee September 13, 1996
J. Gary Burkhead
/s/Ralph F. Cox * Trustee September 13, 1996
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee September 13, 1996
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee September 13, 1996
Richard J. Flynn
/s/E. Bradley Jones * Trustee September 13, 1996
E. Bradley Jones
September 13, 1996
/s/Donald J. Kirk * Trustee
Donald J. Kirk
/s/Peter S. Lynch * Trustee September 13, 1996
Peter S. Lynch
/s/Edward H. Malone * Trustee September 13, 1996
Edward H. Malone
/s/Marvin L. Mann_____* Trustee September 13, 1996
Marvin L. Mann
/s/Gerald C. McDonough* Trustee September 13, 1996
Gerald C. McDonough
/s/Thomas R. Williams * Trustee September 13, 1996
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated December 15, 1994 and filed herewith.
* Signature affixed by Arthur C. Delibert pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity any
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Pre-Effective Amendments or
Post-Effective Amendments to said Registration Statements on Form N-1A or
any successor thereto, any Registration Statements on Form N-14, and any
supplements or other instruments in connection therewith, and generally to
do all such things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d December 15, 1994
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Director, Trustee or General Partner (collectively,
the "Funds"), hereby severally constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt
and Stephanie A. Djinis, each of them singly, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
each of them, to sign for me and my name in the appropriate capacities any
Registration Statements of the Funds on Form N-1A or any successor thereto,
any and all subsequent Pre-Effective Amendments or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or
other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS our hands on this fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
Exhibit 1(a)
DAILY MONEY FUND II
TRUST INSTRUMENT
DATED JUNE 20, 1991
TABLE OF CONTENTS
Page
ARTICLE I -- NAME AND DEFINITIONS 1
Section 1.01 Name 1
Section 1.02 Definitions 2
ARTICLE II -- BENEFICIAL INTEREST 4
Section 2.01 Shares of Beneficial Interest 4
Section 2.02 Issuance of Shares 4
Section 2.03 Register of Shares and Share Certificates 5
Section 2.04 Transfer of Shares 6
Section 2.05 Treasury Shares 6
Section 2.06 Establishment of Series 6
Section 2.07 Investment in the Trust 8
Section 2.08 Assets and Liabilities of Series 8
Section 2.09 No Preemptive Rights 10
Section 2.10 Personal Liability of Shareholders 10
Section 2.11 Assent to Trust Instrument 11
ARTICLE III -- THE TRUSTEES 11
Section 3.01 Management of the Trust 11
Section 3.02 Initial Trustees 12
Section 3.03 Term of Office of Trustees 13
Section 3.04 Vacancies and Appointment of Trustees 13
Section 3.05 Temporary Absence of Trustee 14
Section 3.06 Number of Trustees 14
Section 3.07 Effect of Death, Resignation, Etc. of a Trustee 15
Section 3.08 Ownership of Assets of the Trust 15
ARTICLE IV -- POWERS OF THE TRUSTEES 16
Section 4.01 Powers 16
Section 4.02 Issuance and Repurchase of Shares 21
Section 4.03 Trustees and Officers as Shareholders 21
Section 4.04 Action By the Trustees 22
Section 4.05 Chairman of the Trustees 23
Section 4.06 Principal Transactions 23
ARTICLE V -- EXPENSES OF THE TRUST 23
Section 5.01 Trustee Reimbursement 23
ARTICLE VI -- INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT 24
Section 6.01 Investment Adviser 24
Section 6.02 Principal Underwriter 25
Section 6.03 Transfer Agent 26
Section 6.04 Parties to Contract 26
Section 6.05 Provisions and Amendments 27
- -i-
ARTICLE VII -- SHAREHOLDERS' VOTING POWERS AND MEETINGS 28
Section 7.01 Voting Powers 28
Section 7.02 Meetings 29
Section 7.03 Quorum and Required Vote 30
ARTICLE VIII -- CUSTODIAN 31
Section 8.01 Appointment and Duties 31
Section 8.02 Central Certificate System 32
ARTICLE IX -- DISTRIBUTIONS AND REDEMPTIONS 33
Section 9.01 Distributions 33
Section 9.02 Redemptions 34
Section 9.03 Determination of Net Asset Value and 34
Valuation of Portfolio Assets
Section 9.04 Suspension of the Right of Redemption 36
Section 9.05 Redemption of Shares in Order to Qualify as 36
Regulated Investment Company
ARTICLE X -- LIMITATION OF LIABILITY AND INDEMNIFICATION 37
Section 10.01 Limitation of Liability 37
Section 10.02 Indemnification 38
Section 10.03 Shareholders 41
ARTICLE XI - MISCELLANEOUS 41
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Section 11.01 Trust Not a Partnership 41
Section 11.02 Trustee's Good Faith Action, Expert Advice, No Bond or Surety 42
Section 11.03 Establishment of Record Dates 42
Section 11.04 Termination of Trust 43
Section 11.05 Reorganization 45
Section 11.06 Filing of Copies, References, Headings 45
Section 11.07 Applicable Law 46
Section 11.08 Amendments 47
Section 11.09 Fiscal Year 48
Section 11.10 Use of the Word "Fidelity" 48
Section 11.11 Provisions in Conflict with Law 49
</TABLE>
- -ii-
DAILY MONEY FUND II
DATED JUNE 20, 1991
TRUST INSTRUMENT, made June 20, 1991 by Edward C. Johnson 3d, J. Gary
Burkhead and John E. Ferris (the "Trustees").
WHEREAS, the Trustees desire to establish a business trust for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust hereunder shall be held and managed in trust under
this Trust Instrument as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1.01. The name of the trust created hereby is the "Daily Money
Fund II".
DEFINITIONS.
Section 1.02. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) "Bylaws" means the Bylaws referred to in Article IV, Section 4.01(e)
hereof, as from time to time amended;
(b) The term "Commission" has the meaning given it in the 1940 Act. The
terms "Affiliated Person," "Assignment", "Interested Person" and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretive releases of
the Commission thereunder. "Majority Shareholder Vote" shall have the same
meaning as the term "vote of a majority of the outstanding voting
securities" is given in the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Commission or any rules or regulations
adopted or interpretive releases of the Commission thereunder.
(c) The "Delaware Act" refers to Chapter 38 of Title 12 of the Delaware
Code entitled "Treatment of Delaware Business Trusts," as it may be amended
from time to time.
(d) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article IX, Section 9.03 hereof;
(e) "Outstanding Shares" means those Shares shown from time to time in the
books of the Trust or its Transfer Agent as then issued and outstanding,
but shall not include Shares which have been redeemed or repurchased by the
Trust and which are at the time held in the treasury of the Trust;
(f) "Series" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.06 hereof.
(g) "Shareholder" means a record owner of Outstanding Shares of the Trust;
(h) "Shares" means the equal proportionate transferable units of
beneficial interest into which the beneficial interest of each Series of
the Trust or class thereof shall be divided and may include fractions of
Shares as well as whole Shares;
(i) The "Trust" refers to Daily Money Fund II and reference to the Trust,
when applicable to one or more Series of the Trust, shall refer to any such
Series;
(j) The "Trustees" means the person or persons who has or have signed this
Trust Instrument, so long as he or they shall continue in office in
accordance with the terms hereof, and all other persons who may from time
to time be duly qualified and serving as Trustees in accordance with the
provisions of Article III hereof and reference herein to a Trustee or to
the Trustees shall refer to the individual Trustees in their capacity as
Trustees hereunder;
(k) "Trust Property" means any and all property, real or person, tangible
or intangible, which is owned or held by or for the account of one or more
of the Trust or any Series, or the Trustees on behalf of the Trust or any
Series.
(l) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
ARTICLE II
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 2.01. The beneficial interest in the Trust shall be divided into
such transferable Shares of one or more separate and distinct Series or
classes of a Series as the Trustees shall from time to time create and
establish. The number of Shares of each Series, and class thereof,
authorized hereunder is unlimited. Each Share shall have no par value.
All Shares issued hereunder, including without limitation, Shares issued in
connection with a dividend in Shares or a split or reverse split of Shares,
shall be fully paid and nonassessable.
ISSUANCE OF SHARES
Section 2.02. The Trustees in their discretion may, from time to time,
without vote of the Shareholders, issue Shares, in addition to the then
issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, subject to
applicable law, including cash or securities, at such time or times and on
such terms as the Trustees may deem appropriate, and may in such manner
acquire other assets (including the acquisition of assets subject to, and
in connection with, the assumption of liabilities) and businesses. In
connection with any issuance of Shares, the Trustees may issue fractional
Shares and Shares held in the treasury. The Trustees may from time to time
divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be
redeemed as, whole Shares and/or 1/1,000th of a Share or integral multiples
thereof.
REGISTER OF SHARES AND SHARE CERTIFICATES
Section 2.03. A register shall be kept at the principal office of the
Trust or an office of the Trust's transfer agent which shall contain the
names and addresses of the Shareholders of each Series, the number of
Shares of that Series (or any class or classes thereof) held by them
respectively and a record of all transfers thereof. As to Shares for which
no certificate has been issued, such register shall be conclusive as to who
are the holders of the Shares and who shall be entitled to receive
dividends or other distributions or otherwise to exercise or enjoy the
rights of Shareholders. No Shareholder shall be entitled to receive
payment of any dividend or other distribution, nor to have notice given to
him as herein or in the Bylaws provided, until he has given his address to
the transfer agent or such other officer or agent of the Trustees as shall
keep the said register for entry thereon. The Trustees, in their
discretion, may authorize the issuance of share certificates and promulgate
appropriate rules and regulations as to their use. Such certificates may
be issuable for any purpose limited in the Trustees discretion. In the
event that one or more certificates are issued, whether in the name of a
shareholder or a nominee, such certificate or certificates shall constitute
evidence of ownership of Shares for all purposes, including transfer,
assignment or sale of such Shares, subject to such limitations as the
Trustees may, in their discretion, prescribe.
TRANSFER OF SHARES
Section 2.04. Except as otherwise provided by the Trustees, Shares shall
be transferable on the records of the Trust only by the record holder
thereof or by his agent thereunto duly authorized in writing, upon delivery
to the Trustees or the Trust's transfer agent of a duly executed instrument
of transfer, together with a Share certificate, if one is outstanding, and
such evidence of the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery the transfer shall be recorded on the register of the Trust.
Until such record is made, the Shareholder of record shall be deemed to be
the holder of such Shares for all purposes hereunder and neither the
Trustees nor the Trust, nor any transfer agent or registrar nor any
officer, employee or agent of the Trust shall be affected by any notice of
the proposed transfer.
TREASURY SHARES
Section 2.05. Shares held in the treasury shall, until reissued pursuant
to Section 2.02 hereof, not confer any voting rights on the Trustees, nor
shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
ESTABLISHMENT OF SERIES
Section 2.06. The Trust created hereby shall consist of one or more
Series and separate and distinct records shall be maintained by the Trust
for each Series and the assets associated with any such Series shall be
held and accounted for separately from the assets of the Trust or any other
Series. The Trustees shall have full power and authority, in their sole
discretion, and without obtaining any prior authorization or vote of the
Shareholders of any Series of the Trust, to establish and designate and to
change in any manner any such Series of Shares or any classes of initial or
additional Series and to fix such preferences, voting powers, rights and
privileges of such Series or classes thereof as the Trustees may from time
to time determine, to divide or combine the Shares or any Series or classes
thereof into a greater or lesser number, to classify or reclassify any
issued Shares or any Series or classes thereof into one or more Series or
classes of Shares, and to take such other action with respect to the Shares
as the Trustees may deem desirable. The establishment and designation of
any Series shall be effective upon the adoption of a resolution by a
majority of the Trustees setting forth such establishment and designation
and the relative rights and preferences of the Shares of such Series. A
Series may issue any number of Shares and need not issue shares. At any
time there are no Shares outstanding of any particular Series previously
established and designated, the Trustees may by a majority vote abolish
that Series and the establishment and designation thereof.
All references to Shares in this Trust Instrument shall be deemed to be
Shares of any or all Series, or classes thereof, as the context may
require. All provisions herein relating to the Trust shall apply equally
to each Series of the Trust, and each class thereof, except as the context
otherwise requires.
Each Share of a Series of the Trust shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a
Series shall be entitled to receive his pro rata share of distributions of
income and capital gains, if any, made with respect to such Series. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the
funds and property of such Series of the Trust.
INVESTMENT IN THE TRUST
Section 2.07. The Trustees shall accept investments in any Series of the
Trust from such persons and on such terms as they may from time to time
authorize. At the Trustees' discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which the
affected Series is authorized to invest, valued as provided in Article IX,
Section 9.03 hereof. Investments in a Series shall be credited to each
Shareholder's account in the form of full Shares at the Net Asset Value per
Share next determined after the investment is received; provided, however,
that the Trustees may, in their sole discretion, (a) fix the Net Asset
Value per Share of the initial capital contribution, (b) impose a sales
charge upon investments in the Trust in such manner and at such time
determined by the Trustees or (c) issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES
Section 2.08. All consideration received by the Trust for the issue or
sale of Shares of a particular Series, together with all assets in which
such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same
may be, shall be held and accounted for separately from the other assets of
the Trust and of every other Series and may be referred to herein as
"assets belonging to" that Series. The assets belonging to a particular
Series shall belong to that Series for all purposes, and to no other
Series, subject only to the rights of creditors of that Series. In
addition, any assets, income, earnings, profits or funds, or payments and
proceeds with respect thereto, which are not readily identifiable as
belonging to any particular Series shall be allocated by the Trustees
between and among one or more of the Series in such manner as the Trustees,
in their sole discretion, deem fair and equitable. Each such allocation
shall be conclusive and binding upon the Shareholders of all Series for all
purposes, and such assets, income, earnings, profits or funds, or payments
and proceeds with respect thereto shall be assets belonging to that Series.
The assets belonging to a particular Series shall be so recorded upon the
books of the Trust, and shall be held by the Trustees in trust for the
benefit of the holders of Shares of that Series. The assets belonging to
each particular Series shall be charged with the liabilities of that Series
and all expenses, costs, charges and reserves attributable to that Series.
Any general liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any particular Series
shall be allocated and charged by the Trustees between or among any one or
more of the Series in such manner as the Trustees in their sole discretion
deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series for all purposes. Without
limitation of the foregoing provisions of this Section 2.08, but subject to
the right of the Trustees in their discretion to allocate general
liabilities, expenses, costs, charges or reserves as herein provided, the
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular Series shall be enforceable
against the assets of such Series only, and not against the assets of the
Trust generally. Notice of this contractual limitation on inter-Series
liabilities may, in the Trustee's sole discretion, be set forth in the
certificate of trust of the Trust (whether originally or by amendment) as
filed or to be filed in the Office of the Secretary of State of the State
of Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of Section
3804 of the Delaware Act relating to limitations on inter-Series
liabilities (and the statutory effect under Section 3804 of setting forth
such notice in the certificate of trust) shall become applicable to the
Trust and each Series. Any person extending credit to, contracting with or
having any claim against any Series may look only to the assets of that
Series to satisfy or enforce any debt, liability, obligation or expense
incurred, contracted for or otherwise existing with respect to that Series.
No Shareholder or former Shareholder of any Series shall have a claim on or
any right to any assets allocated or belonging to any other Series.
NO PREEMPTIVE RIGHTS
Section 2.09. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust
or the Trustees, whether of the same or other Series.
PERSONAL LIABILITY OF SHAREHOLDERS
Section 2.10. Each Shareholder of the Trust and of each Series shall not
be personally liable for the debts, liabilities, obligations and expenses
incurred by, contracted for, or otherwise existing with respect to, the
Trust or by or on behalf of any Series. The Trustees shall have no power
to bind any Shareholder personally or to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay by way of subscription
for any Shares or otherwise. Every note, bond, contract or other
undertaking issued by or on behalf of the Trust or the Trustees relating to
the Trust or to a Series shall include a recitation limiting the obligation
represented thereby to the Trust or to one or more Series and its or their
assets (but the omission of such a recitation shall not operate to bind any
Shareholder or Trustee of the Trust).
ASSENT TO TRUST INSTRUMENT
Section 2.11. Every Shareholder, by virtue of having purchased a Share
shall become a Shareholder and shall be held to have expressly assented and
agreed to be bound by the terms hereof.
ARTICLE III
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 3.01. The Trustees shall have exclusive and absolute control over
the Trust Property and over the business of the Trust to the same extent as
if the Trustees were the sole owners of the Trust Property and business in
their own right, but which such powers of delegation as may be permitted by
this Trust Instrument. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its
branches and maintain offices both within and without the State of
Delaware, in any and all states of the United States of America, in the
District of Columbia, in any and all commonwealths, territories,
dependencies, colonies, or possessions of the United States of America, and
in any foreign jurisdiction and to do all such other things and execute all
such instruments as they deem necessary, proper or desirable in order to
promote the interests of the Trust although such things are not herein
specifically mentioned. Any determination as to what is in the interests
of the Trust made by the Trustees in good faith shall be conclusive. In
construing the provisions of this Trust Instrument, the presumption shall
be in favor of a grant of power to the Trustees.
The enumeration of any specific power in this Trust Instrument shall not
be construed as limiting the aforesaid power. The powers of the Trustees
may be exercised without order of or resort to any court.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.04 of this Article III, the Trustees shall be elected
by the Shareholders owning of record a plurality of the Shares voting at a
meeting of Shareholders. Such a meeting shall be held on a date fixed by
the Trustees. In the event that less than a majority of the Trustees
holding office have been elected by Shareholders, the Trustees then in
office will call a Shareholders' meeting for the election of Trustees.
INITIAL TRUSTEES
Section 3.02. The initial Trustees shall be the persons named herein. On
a date fixed by the Trustees, the Shareholders shall elect at least three
but not more than twelve Trustees, as specified by the Trustees pursuant to
Section 3.06 of this Article III.
TERM OF OFFICE OF TRUSTEES
Section 3.03. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as herein provided; except (a) that any
Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery
or upon such later date as is specified therein; (b) that any Trustee may
be removed at any time by written instrument, signed by at least two-thirds
of the number of Trustees prior to such removal, specifying the date when
such removal shall become effective; (c) that any Trustee who requests in
writing to be retired or who has died, become physically or mentally
incapacitated by reason of disease or otherwise, or is otherwise unable to
serve, may be retired by written instrument signed by a majority of the
other Trustees, specifying the date of his retirement; and (d) that a
Trustee may be removed at any meeting of the Shareholders of the Trust by a
vote of Shareholders owning at least two-thirds of the outstanding Shares.
VACANCIES AND APPOINTMENT OF TRUSTEES
Section 3.04. In case of the declination to serve, death, resignation,
retirement, removal, physical or mental incapacity by reason of disease or
otherwise, or a Trustee is otherwise unable to serve, or an increase in the
number of Trustees, a vacancy shall occur. Whenever a vacancy in the Board
of Trustees shall occur, until such vacancy is filled, the other Trustees
shall have all the powers hereunder and the certificate of the other
Trustees of such vacancy shall be conclusive. In the case of an existing
vacancy, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the 1940 Act. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office or by
resolution of the Trustees, duly adopted, which shall be recorded in the
minutes of a meeting of the Trustees, whereupon the appointment shall take
effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that
said appointment shall become effective only at or after the effective date
of said retirement, resignation or increase in number of Trustees. As soon
as any Trustee appointed pursuant to this Section 3.04 shall have accepted
this trust, the trust estate shall vest in the new Trustee or Trustees,
together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder. The power to
appoint a Trustee pursuant to this Section 3.04 is subject to the
provisions of Section 16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 3.05. Any Trustee may, by power of attorney, delegate his power
for a period not exceeding six months at any one time to any other Trustee
or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
NUMBER OF TRUSTEES
Section 3.06. The number of Trustees shall be at least three, and
thereafter shall be such number as shall be fixed from time to time by a
majority of the Trustees, provided, however, that the number of Trustees
shall in no event be more than twelve (12).
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 3.07. The declination to serve, death, resignation, retirement,
removal, incapacity, or inability of the Trustees, or any one of them,
shall not operate to terminate the Trust or to revoke any existing agency
created pursuant to the terms of this Trust Instrument.
OWNERSHIP OF ASSETS OF THE TRUST
Section 3.08. The assets of the Trust and of each Series shall be held
separate and apart from any assets now or hereafter held in any capacity
other than as Trustee hereunder by the Trustees or any successor Trustees.
Legal title in all of the assets of the Trust and the right to conduct any
business shall at all times be considered as vested in the Trustees on
behalf of the Trust, except that the Trustees may cause legal title to any
Trust Property to be held by, or in the name of the Trust, or in the name
of any person as nominee. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any series
or any right of partition or possession thereof, but each Shareholder shall
have, except as otherwise provided for herein, a proportionate undivided
beneficial interest in the Trust or Series. The Shares shall be personal
property giving only the rights specifically set forth in this Trust
Instrument.
ARTICLE IV
POWERS OF THE TRUSTEES
POWERS
Section 4.01. The Trustees in all instances shall act as principals, and
are and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not in any way be bound or limited by present or future
laws or customs in regard to trust investments, but shall have full
authority and power to make any and all investments which they, in their
sole discretion, shall deem proper to accomplish the purpose of this Trust
without recourse to any court or other authority. Subject to any
applicable limitation in this Trust Instrument or the Bylaws of the Trust,
the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or limited by
any present or future law or custom in regard to investments by trustees,
and to sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust;
(b) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations;
(c) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of an obligation or engagement of any other
Person and to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or
by the Trust itself, or both, or otherwise pursuant to a plan of
distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Trust Instrument providing
for the conduct of the business of the Trust and to amend and repeal them
to the extent that they do not reserve that right to the Shareholders; such
Bylaws shall be deemed incorporated and included in this Trust Instrument;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that are
members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to
any conditions set forth in this Trust Instrument or in the Bylaws;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the Bylaws;
(j) To delegate such authority as they consider desirable to any officers
of the Trust and to any investment adviser, manager, custodian, underwriter
or other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust, subject to
the provisions of Article XI, Section 11.04(b) hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any trust,
whether in bearer, book entry, unregistered or other negotiable form; or
either in the name of the Trust or in the name of a custodian or a nominee
or nominees, subject in either case to proper safeguards according to the
usual practice of Delaware business trusts or investment companies;
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish
classes of such Series having relative rights, powers and duties as they
may provide consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular
Series or to apportion the same between or among two or more Series,
provided that any liabilities or expenses incurred by a particular Series
shall be payable solely out of the assets belonging to that Series as
provided for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern, and to pay
calls or subscriptions with respect to any security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited
to, claims for taxes;
(s) To make distributions of income and of capital gains to Shareholders
in the manner hereinafter provided;
(t) To establish, from time to time, a minimum investment for Shareholders
in the Trust or in one or more Series or class, and to require the
redemption of the Shares of any Shareholders whose investment is less than
such minimum upon giving notice to such Shareholder;
(u) To establish one or more committees, to delegate any of the powers of
the Trustees to said committees and to adopt a committee charter providing
for such responsibilities, membership (including Trustees, officers or
other agents of the Trust therein) and any other characteristics of said
committees as the Trustees may deem proper. Notwithstanding the provisions
of this Article IV, and in addition to such provisions or any other
provision of this Trust Instrument or of the Bylaws, the Trustees may by
resolution appoint a committee consisting of less than the whole number of
Trustees then in office, which committee may be empowered to act for and
bind the Trustees and the Trust, as if the acts of such committee were the
acts of all the Trustees then in office, with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any action,
suit or proceeding which shall be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body;
(v) To interpret the investment policies, practices or limitations of any
Series;
(w) To establish a registered office and have a registered agent in the
state of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the attainment
of any object or the furtherance of any power hereinbefore set forth,
either alone or in association with others, and to do every other act or
thing incidental or appurtenant to or growing out of or connected with the
aforesaid business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by
one or more of the Trustees in their capacity as such hereunder shall be
deemed an action on behalf of the Trust or the applicable Series, and not
an action in an individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under the obligation to make any
inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or
upon their order.
ISSUANCE AND REPURCHASE OF SHARES
Section 4.02. The Trustees shall have the power to issue, sell,
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose
of, and otherwise deal in Shares and, subject to the provisions set forth
in Article II and Article IX, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property of
the Trust, or the particular Series of the Trust, with respect to which
such Shares are issued.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 4.03. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to
be issued and sold Shares to and buy such Shares from any such person or
any firm or company in which he is interested, subject only to the general
limitations herein contained as to the sale and purchase of such Shares;
and all subject to any restrictions which may be contained in the Bylaws.
ACTION BY THE TRUSTEES
Section 4.04. The Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by telephone
meeting provided a quorum of Trustees participate in any such telephone
meeting, unless then 1940 Act requires that a particular action be taken
only at a meeting at which the Trustees are present in person. At any
meeting of the Trustees, a majority of the Trustees shall constitute a
quorum. Meetings of the Trustees may be called orally or in writing by the
Chairman of the Board of Trustees or by any two other Trustees. Notice of
the time, date and place of all meetings of the Trustees shall be given by
the party calling the meeting to each Trustee by telephone, telefax, or
telegram sent to his home or business address at least twenty-four hours in
advance of the meeting or by written notice mailed to his home or business
address at least seventy-two hours in advance of the meeting. Notice need
not be given to any Trustee who attends the meeting without objecting to
the lack of notice or who executes a written waiver of notice with respect
to the meeting. Any meeting conducted by telephone shall be deemed to take
place at the principal office of the Trust, as determined by the Bylaws or
by the Trustees. Subject to the requirements of the 1940 Act, the Trustees
by majority vote may delegate to any one or more of their number their
authority to approve particular matters or take particular actions on
behalf of the Trust. Written consents or waivers of the Trustees may be
executed in one or more counterparts. Execution of a written consent or
waiver and delivery thereof to the Trust may be accomplished by telefax.
CHAIRMAN OF THE TRUSTEES
Section 4.05. The Trustees shall appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of
policies established by the Trustees and the administration of the Trust,
and may be (but is not required to be) the chief executive, financial
and/or accounting officer of the Trust.
PRINCIPAL TRANSACTIONS
Section 4.06. Except to the extent prohibited by applicable law, the
Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer
of the Trust or any firm of which any such Trustee or officer is a member
acting as principal, or have any such dealings with any investment adviser,
distributor or transfer agent for the Trust or with any Interested Person
of such person; and the Trust may employ any such person, or firm or
company in which such person is an Interested Person, as broker, legal
counsel, registrar, investment adviser, distributor, transfer agent,
dividend disbursing agent, custodian or in any other capacity upon
customary terms.
ARTICLE V
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 5.01. Subject to the provisions of Article II, Section 2.08
hereof, the Trustees shall be reimbursed from the Trust estate or the
assets belonging to the appropriate Series for their expenses and
disbursements, including, without limitation, fees and expenses of Trustees
who are not Interested Persons of the Trust, interest expense, taxes, fees
and commissions of every kind, expenses of pricing Trust portfolio
securities, expenses of issue, repurchase and redemption of shares,
including expenses attributable to a program of periodic repurchases or
redemptions, expenses of registering and qualifying the Trust and its
Shares under Federal and State laws and regulations or under the laws of
any foreign jurisdiction, charges of third parties, including investment
advisers, managers, custodians, transfer agents, portfolio accounting
and/or pricing agents, and registrars, expenses of preparing and setting up
in type prospectuses and statements of additional information and other
related Trust documents, expenses of printing and distributing prospectuses
sent to existing Shareholders, auditing and legal expenses, reports to
Shareholders, expenses of meetings of Shareholders and proxy solicitations
therefor, insurance expenses, association membership dues and for such
non-recurring items as may arise, including litigation to which the Trust
(or a Trustee acting as such) is a party, and for all losses and
liabilities by them incurred in administering the Trust, and for the
payment of such expenses, disbursements, losses and liabilities the
Trustees shall have a lien on the assets belonging to the appropriate
Series, or in the case of an expense allocable to more than one Series, on
the assets of each such Series, prior to any rights or interests of the
Shareholders thereto. This section shall not preclude the Trust from
directly paying any of the aforementioned fees and expenses.
ARTICLE VI
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
Section 6.01. The Trustees may in their discretion, from time to time,
enter into an investment advisory or management contract or contracts with
respect to the Trust of any Series whereby the other party or parties to
such contract or contract shall undertake to furnish the Trustees with such
management, investment advisory, statistical and research facilities and
services and such other facilities and services, if any, and all upon such
terms and conditions, as the Trustees may in their discretion determine;
provided, however, that the initial approval and entering into of such
contract or contracts shall be subject to a Majority Shareholder Vote.
Notwithstanding any other provision of this Trust Instrument, the Trustees
may authorize any investment adviser (subject to such general or specific
instructions as the Trustees may from time to time adopt) to effect
purchases, sales or exchanges of portfolio securities, other investment
instruments of the Trust, or other Trust Property on behalf of the
Trustees, or may authorize any officer, agent, or Trustee to effect such
purchases, sales or exchanges pursuant to recommendations of the investment
adviser (all without further action by the Trustees). Any such purchases,
sales and exchanges shall be deemed to have been authorized by all of the
Trustees.
The Trustees may authorize, subject to applicable requirements of the 1940
Act, including those relating to Shareholder approval, the investment
adviser to employ, from time to time, one or more sub-advisers to perform
such of the acts and services of the investment adviser, and upon such
terms and conditions, as may be agreed upon between the investment adviser
and sub-adviser. Any reference in this Trust Instrument to the investment
adviser shall be deemed to include such sub-advisers, unless the context
otherwise requires.
PRINCIPAL UNDERWRITER
Section 6.02. The Trustees may in their discretion from time to time
enter into an exclusive or non-exclusive underwriting contract or contracts
providing for the sale of Shares, whereby the Trust may either agree to
sell Shares to the other party to the contract or appoint such other party
its sales agent for such Shares. In either case, the contract shall be on
such terms and conditions, if any, as may be prescribed in the Bylaws, and
such further terms and conditions as the Trustees may in their discretion
determine not inconsistent with the provisions of this Article VI, or of
the Bylaws; and such contract may also provide for the repurchase or sale
of Shares by such other party as principal or as agent of the Trust.
TRANSFER AGENT
Section 6.03. The Trustees may in their discretion from time to time
enter into one or more transfer agency and Shareholder service contracts
whereby the other party or parties shall undertake to furnish the Trustees
with transfer agency and Shareholder services. The contract or contracts
shall be on such terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Trust
Instrument or of the Bylaws.
PARTIES TO CONTRACT
Section 6.04. Any contract of the character described in Sections 6.01,
6.02 and 6.03 of this Article VI or any contract of the character described
in Article VIII hereof may be entered into with any corporation, firm,
partnership, trust or association, although one or more of the Trustees or
officers of the Trust may be an officer, director, trustee, shareholder, or
member of such other party to the contract, an no such contract shall be
invalidated or rendered void or voidable by reason of the existence of any
relationship, nor shall any person holding such relationship be
disqualified from voting on or executing the same in his capacity as
Shareholder and/or Trustee, nor shall any person holding such relationship
be liable merely by reason of such relationship for any loss or expense to
the Trust under or by reason of said contract or accountable for any profit
realized directly or indirectly therefrom, provided that the contract when
entered into was not inconsistent with the provisions of this Article VI or
Article VIII hereof or of the Bylaws. The same person (including a firm,
corporation, partnership, trust, or association) may be the other party to
contracts entered into pursuant to Sections 6.01, 6.02 and 6.03 of this
Article VI or pursuant to Article VIII hereof, and any individual may be
financially interested or otherwise affiliated with persons who are parties
to any or all of the contracts mentioned in this Section 6.04.
PROVISIONS AND AMENDMENTS
Section 6.05. Any contract entered into pursuant to Sections 6.01 or 6.02
of this Article VI shall be consistent with and subject to the requirements
of Section 15 of the 1940 Act or other applicable Act of Congress hereafter
enacted with respect to its continuance in effect, its termination, and the
method of authorization and approval of such contract or renewal thereof,
and no amendment to any contract, entered into pursuant to Section 6.01 of
this Article VI shall be effective unless assented to in a manner
consistent with the requirements of said Section 15, as modified by any
applicable rule, regulation or order of the Commission.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 7.01. The Shareholders shall have power to vote only (i) for the
election of Trustees as provided in Article III, Sections 3.01 and 3.02
hereof, (ii) for the removal of Trustees as provided in Article III,
Section 3.03(d) hereof, (iii) with respect to any investment advisory or
management contract as provided in Article VI, Sections 6.01 and 6.05
hereof, and (iv) with respect to such additional matters relating to the
Trust as may be required by law, by this Trust Instrument, or the Bylaws or
any registration of the Trust with the Commission or any State, or as the
Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall be
voted separately by individual Series, except (i) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual Series;
and (ii) when the Trustees have determined that the mater affects the
interests of more than one Series, then the Shareholders of all such Series
shall be entitled to vote thereon. The Trustees may also determine that a
matter affects only the interests of one or more classes of a Series, in
which case any such matter shall be voted on by such class or classes.
Each whole Share shall be entitled to one vote as to any matter on which it
is entitled to vote, and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy or in any
manner provided for in the Bylaws. A proxy may be given in writing. The
Bylaws may provide that proxies may also, or may instead, be given by any
electronic or telecommunications device or in any other manner.
Notwithstanding anything else herein or in the Bylaws, in the event a
proposal by anyone other than the officers or Trustees of the Trust is
submitted to a vote of the Shareholders of one or more Series or of the
Trust, or in the event of any proxy contest or proxy solicitation or
proposal in opposition to any proposal by the officers or Trustees of the
Trust, Shares may be voted only in person or by written proxy. Until
Shares are issued, the Trustees may exercise all rights of Shareholders and
may take any action required or permitted by law, this Trust Instrument or
any of the Bylaws of the Trust to be taken by Shareholders.
MEETINGS
Section 7.02. The first Shareholders' meeting shall be held in order to
elect Trustees as specified in Section 3.02 of Article III hereof at the
principal office of the Trust or such other place as the Trustees may
designate. Meetings may be held within or without the State of Delaware.
Special meetings of the Shareholders of any Series may be called by the
Trustees and shall be called by the Trustees upon the written request of
Shareholders owning at least one-tenth of the Outstanding Shares entitled
to vote. Whenever ten or more Shareholders meeting the qualifications set
forth in Section 16(c) of the 1940 Act, as the same may be amended from
time to time, seek the opportunity of furnishing materials to the other
Shareholders with a view to obtaining signatures on such a request for a
meeting, the Trustees shall comply with the provisions of said Section
16(c) with respect to providing such Shareholders access to the list of the
Shareholders of record of the Trust or the mailing of such materials to
such Shareholders of record, subject to any rights provided to the Trust or
any Trustees provided by said Section 16(c). Notice shall be sent, by
First Class Mail or such other means determined by the Trustees, at least
15 days prior to any such meeting.
QUORUM AND REQUIRED VOTE
Section 7.03. One-third of Shares entitled to vote in person or by proxy
shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Trust Instrument
permits or requires that holders of any Series shall vote as a Series (or
that holders of a class shall vote as a class), then one-third of the
aggregate number of Shares of that Series (or that class) entitled to vote
shall be necessary to constitute a quorum for the transaction of business
by that Series (or that class). Any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a
reasonable time after the date set for the original meeting, without the
necessity of further notice. Except when a larger vote is required by law
or by any provision of this Trust Instrument or the Bylaws, a majority of
the Shares voted in person or by proxy shall decide any questions and a
plurality shall elect a Trustee, provided that where any provision of law
or of this Trust Instrument permits or requires that the holders of any
Series shall vote as a Series (or that the holders of any class shall vote
as a class), then a majority of the Shares present in person or by proxy of
that Series or, if required by law, a Majority Shareholder Vote of that
Series (or class), voted on the matter in person or by proxy shall decide
that matter insofar as that Series (or class) is concerned. Shareholders
may act by unanimous written consent. Actions taken by Series (or class)
may be consented to unanimously in writing by Shareholders of that Series.
ARTICLE VIII
CUSTODIAN
APPOINTMENT AND DUTIES
Section 8.01. The Trustees shall at all times employ a bank, a company
that is a member of a national securities exchange, or a trust company,
each having capital, surplus and undivided profits of at least two million
dollars ($2,000,000) as custodian with authority as its agent, but subject
to such restrictions, limitations and other requirements, if any, as may be
contained in the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same upon
written order or oral order confirmed in writing;
(2) to receive and receipt for any moneys due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may direct;
and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(4) to keep the books and accounts of the Trust or of any Series or class
and furnish clerical and accounting services; and
(5) to compute, if authorized to do so by the Trustees, the Net Asset
Value of any Series, or class thereof, in accordance with the provisions
hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services
of the custodian, and upon such terms and conditions, as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees,
provided that in every case such sub-custodian shall be a bank, a company
that is a member of a national securities exchange, or a trust company
organized under the laws of the United States or one of the states thereof
and having capital, surplus and undivided profits of at least two million
dollars ($2,000,000) or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act.
CENTRAL CERTIFICATE SYSTEM
Section 8.02. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit all
or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities
exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, as amended, or such
other person as may be permitted by the Commission, or otherwise in
accordance with the 1940 Act, pursuant to which system all securities of
any particular class or series of any issuer deposited within the system
are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of such securities, provided that all such
deposits shall be subject to withdrawal only upon the order of the Trust or
its custodians, subcustodians or other agents.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
Section 9.01.
(a) The Trustees may from time to time declare and pay dividends or other
distributions with respect to any Series. The amount of such dividends or
distributions and the payment of them and whether they are in cash or any
other Trust Property shall be wholly in the discretion of the Trustees.
(b) Dividends and other distributions may be paid or made to the
Shareholders of record at the time of declaring a dividend or other
distribution or among the Shareholders of record at such other date or time
or dates or times as the Trustees shall determine, which dividends or
distributions, at the election of the Trustees, may be paid pursuant to a
standing resolution or resolutions adopted only once or with such frequency
as the Trustees may determine. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans
or related plans as the Trustees shall deem appropriate.
(c) Anything in this Trust Instrument to the contrary notwithstanding,
the Trustees may at any time declare and distribute a stock dividend pro
rat among the Shareholders of a particular Series, or class thereof, as of
the record date of that Series fixed as provided in Section (b) hereof.
REDEMPTIONS
Section 9.02. In case any holder of record of Shares of a particular
Series desires to dispose of his Shares or any portion thereof, he may
deposit at the office of the transfer agent or other authorized agent of
that Series a written request or such other form of request as the Trustees
may from time to time authorize, requesting that the Series purchase the
Shares in accordance with this Section 9.02; and the Shareholder so
requesting shall be entitled to require the Series to purchase, and the
Series or the principal underwriter of the Series shall purchase his said
Shares, but only at the Net Asset Value thereof (as described in Section
9.03 of this Article IX). The Series shall make payment for any such
Shares to be redeemed, as aforesaid, in cash or property from the assets of
that Series and payment for such Shares shall be made by the Series or the
principal underwriter of the Series to the Shareholder of record within
seven (7) days after the date upon which the request is effective. Upon
redemption, shares shall become Treasury shares and may be re-issued from
time to time.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
Section 9.03. The term "Net Asset Value" of any Series shall mean that
amount by which the assets of that Series exceed its liabilities, all as
determined by or under the direction of the Trustees. Such value shall be
determined separately for each Series and shall be determined on such days
and at such times as the Trustees may determine. Such determination shall
be made with respect to securities for which market quotations are readily
available, at the market value of such securities; and with respect to
other securities and assets, at the fair value as determined in good faith
by the Trustees; provided, however, that the Trustees, without Shareholder
approval, may alter the method of valuing portfolio securities insofar as
permitted under the 1940 Act and the rules, regulations and interpretations
thereof promulgated or issued by the Commission or insofar as permitted by
any Order of the Commission applicable to the Series. The Trustees may
delegate any of their powers and duties under this Section 9.03 with
respect to valuation of assets and liabilities. The resulting amount,
which shall represent the total Net Asset Value of the particular Series,
shall be divided by the total number of shares of that Series outstanding
at the time and the quotient so obtained shall be the Net Asset Value per
Share of that Series. At any time the Trustees may cause the Net Asset
Value per Share last determined to be determined again in similar manner
and may fix the time when such redetermined value shall become effective.
If, for any reason, the net income of any Series, determined at any time,
is a negative amount, the Trustees shall have the power with respect to
that Series (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such Shareholder, or
(ii) to reduce the number of Outstanding Shares of such Series by reducing
the number of Shares in the account of each Shareholder by a pro rata
portion of that number of full and fractional Shares which represents the
amount of such excess negative net income, or (iii) to cause to be recorded
on the books of such Series an asset account in the amount of such negative
net income (provided that the same shall thereupon become the property of
such Series with respect to such Series and shall not be paid to any
Shareholder), which account may be reduced by the amount, of dividends
declared thereafter upon the Outstanding Shares of such Series on the day
such negative net income is experienced, until such asset account is
reduced to zero; (iv) to combine the methods described in clauses (i) and
(ii) and (iii) of this sentence; or (v) to take any other action they deem
appropriate, in order to cause (or in order to assist in causing) the Net
Asset Value per Share of such Series to remain at a constant amount per
Outstanding Shares immediately after each such determination and
declaration. The Trustees shall also have the power not to declare a
dividend out of net income for the purpose of causing the Net Asset Value
per Share to be increased. The Trustees shall not be required to adopt,
but may at any time adopt, discontinue or amend the practice of maintaining
the Net Asset Value per Share of the Series at a constant amount.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 9.04. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940 Act.
Such suspension shall take effect at such time as the Trustees shall
specify but not later than the close of business on the business day next
following the declaration of suspension, and thereafter there shall be no
right of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined
after the termination of the suspension. In the event that any series is
divided into classes, the provisions of this Section 9.03, to the extent
applicable as determined in the discretion of the Trustees and consistent
with applicable law, may be equally applied to each such class.
REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED INVESTMENT COMPANY
Section 9.05. If the Trustees shall, at any time and in good faith, be of
the opinion that direct or indirect ownership of Shares of any Series has
or may become concentrated in any Person to an extent which would
disqualify any Series as a regulated investment company under the Internal
Revenue Code, then the Trustees shall have the power (but not the
obligation) by lot or other means deemed equitable by them (i) to call for
redemption by any such person of a number, or principal amount, of Shares
sufficient to maintain or bring the direct or indirect ownership of Shares
into conformity with the requirements for such qualification and (ii) to
refuse to transfer or issue Shares to any person whose acquisition of the
Shares in question would result in such disqualification. The redemption
shall be effected at the redemption price and in the manner provided in
this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in writing
such information with respect to direct and indirect ownership of Shares as
the Trustees deem necessary to comply with the provisions of the Internal
Revenue Code, or to comply with the requirements of any other taxing
authority.
ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
Section 10.01. A Trustee, when acting in such capacity, shall not be
personally liable to any person other than the Trust or a beneficial owner
for any act, omission or obligation of the Trust or any Trustee. A Trustee
shall not be liable for any act or omission or any conduct whatsoever in
his capacity as Trustees, provided that nothing contained herein or in the
Delaware Act shall protect any Trustee against any liability to the Trust
or to Shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the office of Trustee hereunder.
INDEMNIFICATION
Section 10.02.
(a) Subject to the exceptions and limitations contained in Section (b)
below:
(i) every Person who is, or has been, a Trustee or officer of the Trust
(hereinafter referred to as a "Covered Person") shall be indemnified by the
Trust to the fullest extent permitted by law against liability and against
all expenses reasonably incurred or paid by him in connection with any
claim, action, suit or proceeding in which he becomes involved as a party
or otherwise by virtue of his being or having been a Trustee or officer and
against amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter, and
the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office or (B) not to
have acted in good faith in the reasonable belief that his action was in
the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither Interested
Persons
of the Trust nor are parties to the matter based upon a review of
readily
available facts (as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a review
of
readily available facts (as opposed to a full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees or by
independent counsel.
(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now
or hereafter be entitled, shall continue as to a person who has ceased to
be a Covered Person and shall inure to the benefit of the heirs, executors
and administrators of such a person. Nothing contained herein shall affect
any rights to indemnification to which Trust personnel, other than Covered
Persons, and other persons may be entitled by contract or otherwise under
law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described
in paragraph (a) of this Section 10.02 may be paid by the Trust or Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or Series if it is ultimately determined that
he is not entitled to indemnification under this Section 10.02; provided,
however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust is insured against
losses arising out of any such advance payments or (c) either a majority of
the Trustees who are neither Interested Persons of the Trust nor parties to
the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to believe
that such Covered Person will be found entitled to indemnification under
this Section 10.02.
SHAREHOLDERS
Section 10.03. In case any Shareholder or former Shareholder of any
Series shall be held to be personally liable solely by reason of his being
or having been a Shareholder of such Series and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder
(or his heirs, executors, administrators or other legal representatives,
or, in the case of a corporation or other entity, its corporate or other
general successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all loss
and expense arising from such liability. The Trust, on behalf of the
affected Series, shall, upon request by the Shareholder, assume the defense
of any claim made against the Shareholder for any act or obligation of the
Series and satisfy any judgment thereon from the assets of the Series.
ARTICLE XI
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
Section 11.01. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have any power
to bind personally either the Trust's officers or any Shareholder. All
persons extending credit to, contracting with or having any claim against
the Trust or the Trustees shall look only to the assets of the appropriate
Series or (if the Trustees shall look only to the assets of the appropriate
Series, of the Trust for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of their agents, whether
past, present or future, shall be personally liable therefor. Nothing in
this Trust Instrument shall protect a Trustee against any liability to
which the Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee hereunder.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
Section 11.02. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested.
Subject to the provisions of Article X hereof and to Section 11.01 of this
Article XI, the Trustees shall not be liable for errors of judgment or
mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Trust Instrument,
and subject to the provisions of Article X hereof and Section 11.01 of this
Article XI, shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice. The
Trustees shall not be required to give any bond as such, nor any surety if
a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 11.03. The Trustees may close the Share transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, or the date for the payment of any dividends or
other distributions, or the date for the allotment of rights, or the date
when any change or conversion or exchange of Shares shall go into effect;
or in lieu of closing the stock transfer books as aforesaid, the Trustees
may fix in advance a date, not exceeding sixty (60) days preceding the date
of any meeting of Shareholders, or the date for payment of any dividend or
other distribution, or the date for the allotment of rights, or the date
when any change or conversion or exchange of Shares shall go into effect,
as a record date for the determination of the Shareholders entitled to
notice of, and to vote at, any such meeting, or entitled to receive payment
of any such dividend or other distribution, or to any such allotment of
rights, or to exercise the rights in respect of any such change, conversion
or exchange of Shares, and in such case such Shareholders and only such
Shareholders as shall be Shareholders of record on the date so fixed shall
be entitled to such notice of, and to vote at, such meeting, or to receive
payment of such dividend or other distribution, or to receive such
allotment or rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any Shares on the books of the Trust after
any such record date fixed as aforesaid.
TERMINATION OF TRUST
Section 11.04.
(a) This Trust shall continue without limitation of time but subject to
the provisions of sub-section (b) of this Section 11.04.
(b) The Trustees may, subject to a Majority Shareholder Vote of each
Series affected by the matter or, if applicable, to a Majority Shareholder
Vote of the Trust, and subject to a vote of a majority of the Trustees,
(i) sell and convey all or substantially all of the assets of the Trust
or any affected Series to another trust, partnership, association or
corporation, or to a separate series of shares thereof, organized under the
laws of any state which trust, partnership, association or corporation is
an open-end management investment company as defined in the 1940 Act, or is
a series thereof, for adequate consideration which may include the
assumption of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust or any affected Series, and which may
include shares of beneficial interest, stock or other ownership interests
of such trust, partnership, association or corporation or of a series
thereof; or
(ii) at any time sell and convert into money all of the assets of the
Trust or any affected Series.
Upon making reasonable provision, in the determination of the Trustees, for
the payment of all such liabilities in either (i) or (ii), by such
assumption or otherwise, the Trustees shall distribute the remaining
proceeds or assets (as the case may be) of each Series (or class) ratably
among the holders of Shares of that Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in sub-section (b), the Trust or any affected
Series shall terminate and the Trustees and the Trust shall be discharged
of any and all further liabilities and duties hereunder and the right,
title and interest of all parties with respect to the Trust or Series shall
be cancelled and discharged.
Upon termination of the Trust, following completion of winding up of its
business, the Trustees shall cause a certificate of cancellation of the
Trust's certificate of trust to be filed in accordance with the Delaware
Act, which certificate of cancellation may be signed by any one Trustee.
REORGANIZATION
Section 11.05. Notwithstanding anything else herein, the Trustees, in
order to change the form of organization of the Trust, may, without prior
Shareholder approval, (i) cause the Trust to merge or consolidate with or
into one or more trusts, partnerships, associations or corporations so long
as the surviving or resulting entity is an open-end management investment
company under the 1940 Act, or is a series thereof, that will succeed to or
assume the Trust's registration under that Act and which is formed,
organized or existing under the laws of a state, commonwealth possession or
colony of the United States or (ii) cause the Trust to incorporate under
the laws of Delaware. Any agreement of merger or consolidation or
certificate of merger may be signed by a majority of Trustees and facsimile
signatures conveyed by electronic or telecommunication means shall be
valid.
Pursuant to and in accordance with the provisions of Section 3815(f) of the
Delaware Act, and notwithstanding anything to the contrary contained in
this Trust Instrument, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 11.05 may effect any amendment
to the Trust Instrument or effect the adoption of a new trust instrument of
the Trust if it is the surviving or resulting trust in the merger or
consolidation.
FILING OF COPIES, REFERENCES, HEADINGS
Section 11.06. The original or a copy of this Trust Instrument and of
each amendment hereof or Trust Instrument supplemental hereto shall be kept
at the office of the Trust where it may be inspected by any Shareholder.
Anyone dealing with the Trust may rely on a certificate by an officer or
Trustee of the Trust as to whether or not any such amendments or
supplements have been made and as to any matters in connection with the
Trust hereunder, and with the same effect as if it were the original, may
rely on a copy certified by an officer or Trustee of the Trust to be a copy
of this Trust Instrument or of any such amendment or supplemental Trust
Instrument. In this Trust Instrument or in any such amendment or
supplemental Trust Instrument, references to this Trust Instrument, and all
expressions like "herein," "hereof" and "hereunder," shall be deemed to
refer to this Trust Instrument as amended or affected by any such
supplemental Trust Instrument. All expressions like "his", "he" and "him",
shall be deemed to include the feminine and neuter, as well as masculine,
genders. Headings are placed herein for convenience of reference only and
in case of any conflict, the text of this Trust Instrument, rather than the
headings, shall control. This Trust Instrument may be executed in any
number of counterparts each of which shall be deemed an original.
APPLICABLE LAW
Section 11.07. The trust set forth in this instrument is made in the
State of Delaware, and the Trust and this Trust Instrument, and the rights
and obligations of the Trustees and Shareholders hereunder, are to be
governed by and construed and administered according to the Delaware Act
and the laws of said State; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Trust Instrument (a) the
provisions of Section 3540 of Title 12 of the Delaware Code or (b) any
provisions of the laws (statutory or common) of the State of Delaware
(other than the Delaware Act) pertaining to trusts which relate to or
regulate (i) the filing with any court or governmental body or agency of
trustee accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents or employees of a
trust, (iii) the necessity for obtaining court or other governmental
approval concerning the acquisition, holding or disposition of real or
personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and
expenditures to income or principal, (vi) restrictions or limitations on
the permissible nature, amount or concentration of trust investments or
requirements relating to the titling, storage or other manner of holding of
trust assets, or (vii) the establishment of fiduciary or other standards or
responsibilities or limitations on the acts or powers of trustees, which
are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees set forth or referenced in this Trust Instrument.
The Trust shall be of the type commonly called a "business trust", and
without limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts
under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
AMENDMENTS
Section 11.08. Except as specifically provided herein, the Trustees may,
without shareholder vote, amend or otherwise supplement this Trust
Instrument by making an amendment, a Trust Instrument supplemental hereto
or an amended and restated trust instrument. Shareholders shall have the
right to vote (i) on any amendment which would affect their right to vote
granted in Section 7.01 of Article VII hereof, (ii) on any amendment to
this Section 11.08, (iii) on any amendment as may be required by law or by
the Trust's registration statement filed with the Commission and (iv) on
any amendment submitted to them by the Trustees. Any amendment required or
permitted to be submitted to Shareholders which, as the Trustees determine,
shall affect the Shareholders of one or more Series shall be authorized by
vote of the Shareholders of each Series affected and no vote of
shareholders of a Series not affected shall be required. Notwithstanding
anything else herein, any amendment to Article 10 hereof shall not limit
the rights to indemnification or insurance provided therein with respect to
action or omission of Covered Persons prior to such amendment.
FISCAL YEAR
Section 11.09. The fiscal year of the Trust shall end on a specified date
as set forth in the Bylaws, provided, however, that the Trustees may,
without Shareholder approval, change the fiscal year of the Trust.
USE OF THE WORD "FIDELITY"
Section 11.10. Fidelity Management & Research Company ("FMR") has
consented to, and granted a non-exclusive license for, the use by any
Series or by the Trust of the identifying word "Fidelity" or "Spartan" in
the name of any Series or of the Trust. Such consent is subject to
revocation by FMR in its discretion, if FMR or subsidiary or affiliate
thereof is not employed as the investment adviser of each Series of the
Trust. As between the Trust and FMR, FMR controls the use of the name of
the Trust insofar as such name contains the identifying word "Fidelity" or
"Spartan." FMR may, from time to time, use the identifying word "Fidelity"
or "Spartan" in other connections and for other purposes, including,
without limitation, in the names of other investment companies,
corporations or businesses which it may manage, advise, sponsor or own or
in which it may have a financial interest. FMR may require the Trust or
any Series thereof to cease using the identifying word "Fidelity" or
"Spartan" in the name of the Trust or any Series thereof if the Trust or
any Series thereof ceases to employ FMR or a subsidiary or affiliate
thereof as investment adviser.
PROVISIONS IN CONFLICT WITH LAW
Section 11.11. The provisions of this Trust Instrument are severable, and
if the Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code or with other applicable
laws and regulations, the conflicting provision shall be deemed never to
have constituted a part of this Trust Instrument; provided, however, that
such determination shall not affect any of the remaining provisions of this
Trust Instrument or render invalid or improper any action taken or omitted
prior to such determination. If any provision of this Trust Instrument
shall be held invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any
other jurisdiction or any other provision of this Trust Instrument in any
jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees of
the Trust, have executed this instrument this 20th day of June, 1991.
/s/ Edward C. Johnson 3d
Edward C. Johnson 3d, as Trustee
and not individually.
/s/ J. Gary Burkhead
J. Gary Burkhead, as Trustee
and not individually.
/s/ John E. Ferris
John E. Ferris, as Trustee
and not individually.
Exhibit 6(k)
FORM OF
BANK AGENCY AGREEMENT
We (Fidelity Distributors Corporation) are distributors of the Fidelity
Advisor Funds and the Fidelity Funds (the "Portfolios"). You
(_____________________________________) are a division or affiliate of
(_______________________________) ("Bank"), and desire to make Portfolio
shares available to your customers upon the following terms and conditions:
1. As used herein the following terms shall have the meaning hereinafter
set forth (unless a different meaning is plainly required by the context):
(a) "Fidelity Advisor Funds" shall mean the open-end investment companies,
series, or (in the case of companies or series offering multiple classes of
shares) classes of one or more of the foregoing, the shares of which from
time to time shall be offered by us as principal underwriter to you
hereunder and which are designated as such on Schedule A, as amended by us
from time to time upon notice to you. This Agreement shall apply only to
such companies, series, or classes so designated and only such companies,
series or classes shall be considered to be Fidelity Advisor Funds.
(b) "Fidelity Funds" shall mean the open-end investment companies, series
or (in the case of companies or series offering multiple classes of shares)
classes of one or more of the foregoing, the shares of which from time to
time shall be offered by us as principal underwriter to you hereunder and
which are designated as such on Schedule B, as amended by us from time to
time upon notice to you. This Agreement shall apply only to such
companies, series, or classes so designated and only such companies, series
or classes shall be considered to be Fidelity Funds.
(c) "Portfolio" shall mean any one of the Fidelity Advisor Funds or
Fidelity Funds.
(d) "Transfer Agent" shall mean (i) with respect to the Fidelity Advisor
Funds, the person designated on Schedule C and appointed by you pursuant to
paragraph 4 to provide the services described under such paragraph; and
(ii) with respect to the Fidelity Funds, the transfer agent of such
Fidelity Fund.
2. (a) In respect of all sales of Portfolio shares to your customers for
which you act as agent, (i) such shares shall be sold at the applicable
public offering price, giving effect, where applicable, to cumulative or
quantity discounts or other purchase programs, plans or services as
described in the then current prospectus of the Portfolio whose shares are
being sold and you shall transmit payment for such shares in accordance
with paragraph 3; (ii) your customer's transactions will be executed only
upon your authorization, and on all such transactions you shall be acting
solely as agent, upon the order and at the request of your customers,
without recourse to you, and such transactions shall be for the account of
your customers and not for your account; (iii) your compensation for acting
as agent with respect to sales shall be as set forth in the applicable
schedules issued by us and in effect at the time of the sale or as set
forth in the then current prospectus. Such compensation schedules are
subject to change or discontinuance by us from time to time as set forth in
paragraph 8 below.
(b) In the case of a Portfolio which has adopted a plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 (a "Plan"), we may elect
from time to time to make distribution payments or service payments to you
under such Plan. In the case of a Portfolio that has no currently
effective Plan, we or Fidelity Management & Research Company may elect to
make distribution payments or service payments to you from our own funds.
Any such distribution payments or service payments shall be made in the
amount and manner set forth in the applicable schedule of distribution
payments or service payments issued by us and then in effect or as set
forth in the then current prospectus. Such schedule of distribution
payments or service payments may be changed or discontinued by us from time
to time and shall be in effect with respect to a Portfolio which has a Plan
only so long as such Portfolio's Plan remains in effect.
3. The placing of orders with us shall be governed by instructions which we
shall issue from time to time. Payment for shares shall be made in New
York or Boston Clearing House funds in accordance with such instructions,
but in no event to be received by us later than five business days (as
defined in the Portfolio's current prospectus) after our acceptance of the
order.
4. (a) The Fidelity Advisor Funds offer you the option of transacting
business with such funds either through the fund's own transfer agent or
through a third party record keeper. You may designate your selection with
respect to the Fidelity Advisor Funds on Schedule C.
(b) You appoint the Transfer Agent for each Portfolio as your agent to
execute customers' purchase, sale, transfer, or redemption orders
("Transactions") in Portfolio shares in accordance with the terms and
provisions of any account, program, plan or service established or used by
your customers and to confirm each such Transaction to your customers on
your behalf on a fully disclosed basis, and at the time of the Transaction,
you guarantee the legal capacity of your customers and any co-owners of
such shares so transacting in such shares.
(c) You may instruct the Transfer Agent to register shares purchased in
your name and account as nominee for your customers, in which event all
prospectuses, proxy statements, periodic reports and other printed material
will be sent to you and all confirmations and other communications to
shareholders will be transmitted to you. You shall be responsible for
forwarding such printed material, confirmations and communications, or the
information contained therein, to all customers for whom you hold such
shares as nominee. However, we or the Transfer Agent on behalf of itself
or the Portfolios shall be responsible for the costs associated with your
forwarding such printed material, confirmations and communications and
shall reimburse you in full for such costs. You shall also be responsible
for complying with all reporting and tax withholding requirements with
respect to the customers for whose account you are holding any shares as
nominee. With respect to customers other than such customers, you shall
provide us with all information (including, without limitation,
certification of taxpayer identification numbers and back-up withholding
instructions) necessary or appropriate for us to comply with legal and
regulatory reporting requirements.
(d) You shall be responsible for determining, in accordance with the then
current Prospectus, whether, and the extent to which, a contingent deferred
sales charge is applicable to a purchase of shares from a customer for
whose account you are holding such shares as nominee; and you agree to
present immediately to us any contingent deferred sales charge to which
such purchase was subject. You hereby represent that if you hold shares
subject to such a charge, you have the capability to track and account for
such charge; and we reserve the right, at our discretion, to verify that
capability through inspection of your tracking and accounting system or
otherwise.
5. Upon request, we will furnish you a reasonable number of copies of the
then current prospectus and statement of additional information of each of
the Portfolios and the printed information referred to in paragraph 7 below
issued as supplements thereto.
6. (a) You represent that you either (i) are registered as a securities
broker/dealer with the Securities and Exchange Commission and are and will
remain a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"), and agree to abide by all of its rules and
regulations including its Rules of Fair Practice (reference is hereby
specifically made to Section 26, Article III, of the Rules of Fair Practice
of the NASD, which is incorporated herein as if set forth in full); or (ii)
you are a bank as defined in Section 3(a)(6) of the Securities Exchange Act
of 1934, as amended, and are duly authorized to engage in the Transactions
to be performed hereunder. If your membership in the NASD terminates, or
you violate any provision of said Section 26, or if you cease to be a bank
as defined above, this Agreement will be immediately and automatically
terminated.
(b) We shall not purchase Portfolio shares from the Portfolio except for
the purpose of covering purchase orders already received by us, and you
shall not purchase Portfolio shares from us, other than for investment,
except for the purpose of covering purchase orders already received by you.
(c) You shall not withhold placing customers' orders for Portfolio shares
so as to profit yourself as a result of such withholding, e.g., by virtue
of a change in the Portfolio's net asset value per share from that used in
determining the offering price to your customers.
(d) We shall not accept a conditional order for Portfolio shares on any
basis other than at a definite specified price.
(e) If, within seven business days after confirmation by us of the
original purchase order for shares of a Portfolio, such shares are
repurchased by the issuing Portfolio or by us for the account of such
Portfolio or are tendered for redemption by the customer, you shall
forthwith refund, or forfeit the right to receive, the full amount of any
agency compensation on the original sale pursuant to paragraph 2(a) above
and any distribution payments or service payments made to you pursuant to
paragraph 2(b) above. You shall refund to the Portfolio immediately upon
receipt the amount of any dividends or distributions paid to you as nominee
for your customers with respect to redeemed or repurchased Portfolio shares
to the extent that the proceeds of such redemption or repurchase may
include the dividends or distributions payable on such shares. You shall
be notified by us of such repurchase or redemption within ten days of the
date of such transaction.
(f) In the event any adjustment in the amount of agency compensation made
to you on any sale under paragraph 2(a) or in distribution payments or
service payments made to you under paragraph 2(b) shall result in an
overpayment by us of such compensation or payment, you shall forthwith
remit to us such overpayment. The term "adjustment" as used in the
preceding sentence shall not include any changes in amounts paid to or due
you caused by a change in or discontinuance of such compensation,
distribution payments or service payments (as provided under paragraphs
2(a), 2(b) and 8) prior to the effective date of such change or
discontinuance of such compensation or payments. You acknowledge that the
foregoing shall in no way limit our right to change or discontinue such
compensation, distribution payments or service payments as provided in
paragraphs 2 and 8 hereof, and that, after the effective date of a change
in, or discontinuance by us of the agency compensation under paragraph 2(a)
or the distribution payments or service payments under paragraph 2(b), or
the termination of any Plan, any such agency compensation under paragraph
2(a) or distribution payments or service payments under paragraph 2(b)
shall be in amounts and made in accordance with such change,
discontinuation or termination.
7. (a) In all sales of Portfolio shares to the public you shall act as
agent for your own customer and in no transaction shall you have any
authority to act or hold yourself out as agent for us or any Portfolio, and
nothing in this Agreement, including the use of the word "compensation" or
"payment," shall cause you to be our partner, employee, or agent or give
you any authority to act for us or for any Portfolio. Neither we nor any
Portfolio shall be liable for any of your acts or obligations under this
Agreement.
(b) No person is authorized to make any representations concerning
Portfolio shares except those contained in such Portfolio's then current
prospectus and statement of additional information and in such printed
information subsequently issued to you by us or by the Portfolios as a
supplement to such prospectus and statement of additional information. You
shall rely solely on the representations contained in the appropriate
prospectus and statement of additional information and in the supplemental
information referred to in the preceding sentence. We or the Portfolio
shall bear the expense of qualifying Portfolio shares under the securities
laws of the various states. Any printed information which we shall furnish
you (other than the Portfolios' prospectuses, statements of additional
information, periodic reports and supplemental information) is our sole
responsibility and not the responsibility of the respective Portfolios.
You agree that the Portfolios shall have no liability or responsibility to
you with respect to any such printed information. No sales literature or
advertising material (including material disseminated through radio,
television or other electronic media) concerning Portfolio shares, other
than such printed information, shall be used by you in connection with
making Portfolio shares available without obtaining our prior written
approval. You shall not distribute or make available to investors any
printed information furnished by us which is marked "FOR DEALER USE ONLY"
or which otherwise indicates that it is confidential or not intended to be
distributed to investors.
(c) You will comply with all applicable state and federal laws and with
the rules and regulations of authorized regulatory agencies thereunder.
You will not make available shares of any Portfolio unless such shares are
duly registered under the applicable state and federal statutes and the
rules and regulations thereunder.
8. All orders are subject to acceptance or rejection by us. We reserve the
right in our discretion, without notice, to suspend sales or to withdraw
the offering of Portfolio shares, in whole or in part, or to make a limited
offering of Portfolio shares. This Agreement, with respect to any Plan as
defined under paragraph 2(b) hereof, shall continue in force for one year
from the effective date, and thereafter shall continue automatically for
successive annual periods, provided such continuance is specifically
subject to termination without penalty at any time if a majority of a
Portfolio's Trustees who are not interested persons of the Portfolio, as
defined in the Investment Company Act of 1940, or a majority of the
outstanding shares of the Portfolio or class thereof, as applicable, vote
to terminate or not to continue such Plan. Either of us may cancel this
Agreement upon telephonic or written notice to the other. Upon telephonic
or written notice to you, we may also change or amend any provision of this
Agreement. Upon telephonic or written notice to you, we or any Portfolio
may change, amend or discontinue any schedule or schedules of compensation
or payments issued by us from time to time and may issue a new or
replacement schedule or schedules of compensation or payments from time to
time. You hereby agree that you shall have no vested interest in any type,
amount or rate of compensation or payment and that you shall have no claim
against us or any Portfolio by virtue of any change or diminution in the
rate or amount of, or discontinuance of, any compensation or payment in
connection with the shares of any Portfolio.
9. You agree, in connection with any Portfolio(s) that offer multiple
classes of shares, (i) to comply with our policies regarding the sale of
classes of shares as provided to you from time to time, and (ii) to
disclose to investors that are eligible to purchase the other class(es) of
such Portfolio(s) (as set forth in the prospectus of the applicable
Portfolio) the availability of such other class(es).
10. Failure of either party to terminate this Agreement upon the occurrence
of any event set forth in this Agreement as a cause for termination shall
not constitute a waiver of the right to terminate this Agreement at a later
time on account of such occurrence.
11. In the event of a dispute, such dispute shall be settled by arbitration
before arbitrators sitting in Boston, Massachusetts in accordance with the
commercial rules then in effect at the National Association of Securities
Dealers, Inc. The arbitrators shall act by majority decision, and their
award may allocate attorneys' fees and arbitration costs between the
parties; such award shall be final and binding between the parties and
judgment thereon may be entered in any court of competent jurisdiction.
12. All communications to us should be sent to us at our offices, 82
Devonshire Street, Mail Zone L12C, Boston, Massachusetts 02109, Attn: Bank
Wholesale Market. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below. This Agreement
shall become binding as of the date when it is accepted and dated below by
us. This Agreement will terminate automatically in the event of its
assignment, as defined in the Investment Company Act of 1940. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
13. This Agreement supersedes and cancels all previous agreements between
us, whether oral or written.
Very truly yours,
FIDELITY DISTRIBUTORS CORPORATION
Please return two signed copies of this Agreement to Fidelity Distributors
Corporation. Upon acceptance, one countersigned copy will be returned to
you for your files.
By ___________________________________________________
Authorized Representative
______________________________________________________
Name and Title (please print or type)
______________________________________________________
Name of Firm
Address: ______________________________________________
______________________________________________________
______________________________________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By ___________________________________________________
Dated: _____________________________
[Attach Schedule A to Bank Agency Agreement]
[Attach Schedule B to Bank Agency Agreement]
Schedule C to Bank Agency Agreement
PURSUANT TO PARAGRAPH 4 OF THE BANK AGENCY AGREEMENT:
[ ] Boston Financial Data Services, Inc.
[ ] Fidelity Investments Institutional Operations Company
IS HEREBY APPOINTED TO EXECUTE PURCHASE, SALE, TRANSFER, OR REDEMPTION
TRANSACTIONS IN SHARES OF THE FIDELITY ADVISOR FUNDS.
Exhibit 6(l)
FORM OF
SELLING DEALER AGREEMENT
(For Bank-Related Transactions)
You _____________________________________ are registered as a
broker-dealer under the Securities Exchange Act of 1934 and have executed a
written agreement with a bank or bank affiliate to provide brokerage
services to that bank, bank affiliate and/or their customers. As principal
underwriter of the Fidelity Advisor Funds and the Fidelity Funds (the
"Portfolios"), we (Fidelity Distributors Corporation) agree to sell to you
shares of each of the Portfolios purchased by us as principal from the
Portfolios for resale by you as principal to Bank Clients (as hereinafter
defined) upon the following terms and conditions:
1. As used herein the following terms shall have the meaning hereinafter
set forth (unless a different meaning is plainly required by the context):
(a) "Bank" shall mean a bank as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, as amended, or an affiliate of such a
bank, with which you have entered into a written agreement to provide
brokerage services; and "Bank Client" shall mean the customers of such a
Bank.
(b) "Fidelity Advisor Funds" shall mean the open-end investment companies,
series, or (in the case of companies or series offering multiple classes of
shares) classes of one or more of the foregoing, the shares of which from
time to time shall be offered by us as principal underwriter to you
hereunder and which are designated as such on Schedule A, as amended by us
from time to time upon notice to you. This Agreement shall apply only to
such companies, series, or classes so designated and only such companies,
series or classes shall be considered to be Fidelity Advisor Funds.
(c) "Fidelity Funds" shall mean the open-end investment companies, series
or (in the case of companies or series offering multiple classes of shares)
classes of one or more of the foregoing, the shares of which from time to
time shall be offered by us as principal underwriter to you hereunder and
which are designated as such on Schedule B, as amended by us from time to
time upon notice to you. This Agreement shall apply only to such
companies, series, or classes so designated and only such companies, series
or classes shall be considered to be Fidelity Funds.
(d) "Portfolio" shall mean any one of the Fidelity Advisor Funds or
Fidelity Funds.
(e) "Transfer Agent" shall mean (i) with respect to the Fidelity Advisor
Funds, the person designated on Schedule C and appointed by you pursuant to
paragraph 4 to provide the services described under such paragraph; and
(ii) with respect to the Fidelity Funds, the transfer agent of such
Fidelity Fund.
2. (a) In all resales to the public of shares of the Portfolios sold to you
by us (i) you shall sell at the applicable public offering price, giving
effect, where applicable, to cumulative or quantity discounts or other
purchase programs, plans or services as described in the then current
prospectus of the Portfolio whose shares are being resold and you shall
transmit payment for such shares in accordance with paragraph 3; (ii) you
shall act as dealer; and (iii) your discount or concession, if any, with
respect to the resale shall be as set forth in the applicable schedule of
discounts or concessions issued by us and in effect at the time of the sale
by us to you of such shares or as set forth in the then current prospectus.
Such discount and concession schedules are subject to change or
discontinuance by us or the Portfolios from time to time as set forth in
paragraph 8 below.
(b) In the case of a Portfolio which has adopted a plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 (a "Plan"), we may elect
from time to time to make distribution payments or service payments to you
under such Plan. In the case of a Portfolio that has no currently
effective Plan, we or Fidelity Management & Research Company may elect to
make distribution payments or service payments to you from our own funds.
Any such distribution payments or service payments shall be made in the
amount and manner set forth in the applicable schedule of distribution
payments or service payments issued by us and then in effect or as set
forth in the then current prospectus. Such schedule of distribution
payments or service payments may be changed or discontinued by us from time
to time and shall be in effect with respect to a Portfolio which has a Plan
only so long as such Portfolio's Plan remains in effect.
(c) Discounts or concessions under paragraph 2(a) and distribution
payments or service payments under paragraph 2(b), shall apply only with
respect to (i) those shares of the Fidelity Funds purchased or maintained
for the account of Bank Clients; and (ii) shares of the Fidelity Advisor
Funds. Anything to the contrary notwithstanding, neither we nor any
Portfolio shall provide to you, nor shall you retain, discounts or
concessions on the resale of shares of, or distribution payments or service
payments with respect to assets of, the Fidelity Funds attributable to you
or any of your clients, other than Bank Clients. In placing a purchase,
sale, transfer or redemption order in shares of the Fidelity Funds with us,
you shall identify the Bank on behalf of whose Clients you are placing the
order; and you shall identify as a non-Bank Client Order, any purchase,
sale, transfer or redemption order in shares of the Fidelity Funds placed
for the account of a non-Bank Client.
3. The placing of orders with us shall be governed by instructions which we
shall issue from time to time. Payment for shares shall be made in New
York or Boston Clearing House funds in accordance with such instructions,
but in no event to be received by us later than five business days (as
defined in the Portfolio's current prospectus) after our acceptance of the
order. If such payment is not received by us, we reserve the right,
without notice, forthwith to cancel the sale or, at our option, to sell the
shares ordered back to the issuing Portfolio, in which latter case we may
hold you responsible for any loss, including loss of profit, suffered by us
as a result of your failure to make payment as aforesaid.
4. (a) The Fidelity Advisor Funds offer you the option of transacting
business with such funds either through the fund's own transfer agent or
through a third party record keeper. You may designate your selection with
respect to the Fidelity Advisor Funds on Schedule C.
(b) You designate the Transfer Agent for each Portfolio to execute your
customers' purchase, sale, transfer, or redemption orders ("Transactions")
in Portfolio shares sold to you by us in accordance with the terms and
provisions of any account, program, plan or service established or used by
your customers and to confirm each such Transaction to your customers on
your behalf on a fully disclosed basis, and at the time of the Transaction,
you guarantee the legal capacity of your customers and any co-owners of
such shares so transacting in such shares.
(c) You may instruct the Transfer Agent to register shares purchased in
your name and account as nominee for your customers, in which event all
prospectuses, proxy statements, periodic reports and other printed material
will be sent to you and all confirmations and other communications to
shareholders will be transmitted to you. You shall be responsible for
forwarding such printed material, confirmations and communications, or the
information contained therein, to all customers for whom you hold such
shares as nominee. However, we or the Transfer Agent on behalf of itself
or the Portfolios shall be responsible for the costs associated with your
forwarding such printed material, confirmations and communications and
shall reimburse you in full for such costs. You shall also be responsible
for complying with all reporting and tax withholding requirements with
respect to the customers for whose account you are holding any shares as
nominee. With respect to customers other than such customers, you shall
provide us with all information (including, without limitation,
certification of taxpayer identification numbers and back-up withholding
instructions) necessary or appropriate for us to comply with legal and
regulatory reporting requirements.
(d) You shall be responsible for determining, in accordance with the then
current prospectus, whether, and the extent to which, a contingent deferred
sales charge is applicable to a purchase of shares from a customer for
whose account you are holding such shares as nominee; and you agree to
present immediately to us any contingent deferred sales charge to which
such purchase was subject. You hereby represent that if you hold shares
subject to such a charge, you have the capability to track and account for
such charge; and we reserve the right, at our discretion, to verify that
capability through inspection of your tracking and accounting system or
otherwise.
5. Upon request, we will furnish you with a reasonable number of copies of
the then current prospectus and statement of additional information of each
of the Portfolios and the printed information referred to in paragraph 7
below issued as supplements thereto.
6. (a) You represent that you are and will remain a member in good standing
of the National Association of Securities Dealers, Inc. ("NASD"), and agree
to abide by all of its rules and regulations including its Rules of Fair
Practice (reference is hereby specifically made to Section 26, Article III,
of the Rules of Fair Practice of the NASD, which is incorporated herein as
if set forth in full). The termination of your membership in the NASD or
any violation of said Section 26 will immediately and automatically
terminate this Agreement.
(b) We shall not purchase Portfolio shares from the Portfolio except for
the purpose of covering purchase orders already received by us, and you
shall not purchase Portfolio shares from us, other than for investment,
except for the purpose of covering purchase orders already received by you.
(c) You shall not withhold placing customers' orders for Portfolio shares
so as to profit yourself as a result of such withholding, e.g., by virtue
of a change in the Portfolio's net asset value per share from that used in
determining the offering price to your customers.
(d) We shall not accept a conditional order for Portfolio shares on any
basis other than at a definite specified price.
(e) If, within seven business days after confirmation by us of your
original purchase order for shares of a Portfolio, such shares are
repurchased by the issuing Portfolio or by us for the account of such
Portfolio or are tendered for redemption by the customer, (i) you shall
forthwith refund to us the full discount retained by, or concession paid
to, you on the original sale pursuant to paragraph 2(a) above and any
distribution payments or service payments made to you pursuant to paragraph
2(b) above and (ii) we shall, as applicable, forthwith pay to such
Portfolio our share of the sales charge on the original sale by us and
shall also pay such Portfolio the refund received under clause (i) when we
receive it. You shall refund to the Portfolio immediately upon receipt the
amount of any dividends or distributions paid to you as nominee for your
customers with respect to Portfolio shares so redeemed or repurchased to
the extent that the proceeds of such redemption or repurchase may include
the dividends or distributions payable on such shares. You shall be
notified by us of such repurchase or redemption within ten days of such
repurchase or redemption.
(f) In the event any adjustment in the discount retained by, or concession
paid to, you on any sale under paragraph 2(a) or in the distribution
payments or service payments made to you under paragraph 2(b) shall result
in an overpayment by us of such discount, concession or payment, you shall
forthwith remit to us such overpayment. The term "adjustment" as used in
the preceding sentence shall not include any changes in amounts paid to,
retained by, or due you caused by a change in, or discontinuance of, such
discounts, concessions, distribution payments or service payments (as
provided under paragraphs 2(a), 2(b) and 8) prior to the effective date of
such change or discontinuance of such discounts, concessions, distribution
payments or service payments. You acknowledge that the foregoing shall in
no way limit our right to change or discontinue such discounts,
concessions, distribution payments or service payments as provided in
paragraphs 2 and 8 hereof, and that, after the effective date of a change
in, or discontinuance by us of the discount or concession schedules or
distribution payments or service payments or the termination of any Plan,
any such discounts or concessions under paragraph 2(a) or distribution
payments or service payments under paragraph 2(b) shall be in amounts and
made in accordance with such change, discontinuation or termination.
(g) Neither we nor you shall, as principal, purchase Portfolio shares from
a record holder at a price lower than the bid price (net asset value less
any applicable contingent deferred sales charge) next quoted by or for the
issuing Portfolio.
7. (a) In all sales of Portfolio shares to the public you shall act as a
dealer for your own account and in no transaction shall you have any
authority to act or hold yourself out as agent for us, or any Portfolio,
and nothing in this Agreement, including the use of the words "discount,"
"concession" or "payment," shall cause you to be our partner, employee, or
agent or give you any authority to act for us or for any Portfolio.
Neither we nor any Portfolio shall be liable for any of your acts or
obligations as a dealer under this Agreement.
(b) No person is authorized to make any representations concerning
Portfolio shares except those contained in such Portfolio's then current
prospectus and statement of additional information and in such printed
information subsequently issued to you by us or by the Portfolios as a
supplement to such prospectus and statement of additional information. In
buying shares from us or selling shares to us hereunder, you shall rely
solely on the representations contained in the appropriate prospectus and
statement of additional information and in the supplemental information
referred to in the preceding sentence. We or the Portfolio shall bear the
expense of qualifying Portfolio shares under the securities laws of the
various states. Any printed information which we shall furnish you (other
than the Portfolios' prospectuses, statements of additional information,
periodic reports and supplemental information) is our sole responsibility
and not the responsibility of the respective Portfolios. You agree that
the Portfolios shall have no liability or responsibility to you with
respect to any such printed information. No sales literature or
advertising material (including material disseminated through radio,
television or other electronic media) concerning Portfolio shares, other
than such printed information, shall be used by you in connection with the
offer or sale of Portfolio shares without obtaining our prior written
approval. You shall not distribute or make available to investors any
printed information furnished by us which is marked "FOR DEALER USE ONLY"
or which otherwise indicates that it is confidential or not intended to be
distributed to investors.
(c) You will comply with all applicable state and federal laws and with
the rules and regulations of authorized regulatory agencies thereunder.
You will not offer shares of any Portfolio for sale unless such shares are
duly registered under the applicable state and federal statutes and the
rules and regulations thereunder.
8. All orders are subject to acceptance or rejection by us. We reserve the
right in our discretion, without notice, to suspend sales or to withdraw
the offering of Portfolio shares, in whole or in part, or to make a limited
offering of Portfolio shares. This Agreement, with respect to any Plan as
defined under paragraph 2(b) hereof, shall continue in force for one year
from the effective date, and thereafter shall continue automatically for
successive annual periods, provided such continuance is specifically
subject to termination without penalty at any time if a majority of a
Portfolio's Trustees who are not interested persons of the Portfolio, as
defined in the Investment Company Act of 1940, or a majority of the
outstanding shares of the Portfolio or class thereof, as applicable, vote
to terminate or not to continue such Plan. Either of us may cancel this
Agreement upon telephonic or written notice to the other. Upon telephonic
or written notice to you, we may also change or amend any provision of this
Agreement. Upon telephonic or written notice to you, we or any Portfolio
may change, amend or discontinue any schedule or schedules of discounts,
concessions, distribution payments or service payments issued by us from
time to time and may issue a new or replacement schedule or schedules of
discounts, concessions, distribution payments or service payments from time
to time. You hereby agree that you shall have no vested interest in any
type, amount or rate of discount, concession, distribution payment or
service payment and that you shall have no claim against us or any
Portfolio by virtue of any change or diminution in the rate or amount of,
or discontinuance of, any discount, concession, distribution payment or
service payment in connection with the shares of any Portfolio.
9. You agree, in connection with any Portfolio(s) that offer multiple
classes of shares, (i) to comply with our policies regarding the sale of
classes of shares as provided to you from time to time, and (ii) to
disclose to investors that are eligible to purchase the other class(es) of
such Portfolio(s) (as set forth in the prospectus of the applicable
Portfolio) the availability of such other class(es).
10. Failure of either party to terminate this Agreement upon the occurrence
of any event set forth in this Agreement as a cause for termination shall
not constitute a waiver of the right to terminate this Agreement at a later
time on account of such occurrence.
11. In the event of a dispute, such dispute shall be settled by arbitration
before arbitrators sitting in Boston, Massachusetts in accordance with the
commercial rules then in effect at the National Association of Securities
Dealers, Inc. The arbitrators shall act by majority decision, and their
award may allocate attorneys' fees and arbitration costs between the
parties; such award shall be final and binding between the parties and
judgment thereon may be entered in any court of competent jurisdiction.
12. All communications to us should be sent to us at our offices, 82
Devonshire Street, Mail Zone L12C, Boston, Massachusetts 02109, Attn: Bank
Wholesale Market. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below. This Agreement
shall become binding as of the date when it is accepted and dated below by
us. This Agreement will terminate automatically in the event of its
assignment, as defined in the Investment Company Act of 1940. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
13. This Agreement supersedes and cancels all previous agreements between
us, whether oral or written.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
FIDELITY DISTRIBUTORS
CORPORATION
Please return two copies of this Agreement to Fidelity Distributors
Corporation. Upon acceptance, one countersigned copy will be returned to
you for your files.
By ___________________________________________________
Authorized Representative
_______________________________________________________
Name and Title (please print or type)
_______________________________________________________
Name of Firm
Address: _______________________________________________
_______________________________________________________
_______________________________________________________
CRD # _________________________________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By ____________________________________________________
Dated: ____________________________
[Attach Schedule A to Bank-Related Selling Dealer Agreement]
[Attach Schedule B to Bank-Related Selling Dealer Agreement]
Schedule C to Bank-Related Selling Dealer Agreement
PURSUANT TO PARAGRAPH 4 OF THE BANK-RELATED SELLING DEALER AGREEMENT:
[ ] Boston Financial Data Services, Inc.
[ ] Fidelity Investments Institutional Operations Company
IS HEREBY APPOINTED TO EXECUTE PURCHASE, SALE, TRANSFER, OR REDEMPTION
TRANSACTIONS IN SHARES OF THE FIDELITY ADVISOR FUNDS.
Exhibit 6(m)
FORM OF
SELLING DEALER AGREEMENT
As the principal underwriter of the shares of the Fidelity Advisor Funds
and the Money Funds (the "Portfolios"), we (Fidelity Distributors
Corporation) agree to sell to you
(___________________________________________) shares of each of the
Portfolios purchased by us as principal from the Portfolios for resale by
you as principal upon the following terms and conditions:
1. As used herein the following terms shall have the meaning hereinafter
set forth (unless a different meaning is plainly required by the context):
(a) "Fidelity Advisor Funds" shall mean the open-end investment
companies, series, or (in the case of companies or series offering multiple
classes of shares) classes of one or more of the foregoing, the shares of
which from time to time shall be offered by us as principal underwriter to
you hereunder and which are designated by us as such by telephonic or
written notice to you. This Agreement shall apply only to such companies,
series or classes so designated and offered and only such companies, series
or classes shall be considered to be Fidelity Advisor Funds.
(b) "Money Fund" shall mean Daily Money Fund, Daily Tax Exempt Money Fund
and any other open-end investment companies, series or (in the case of
companies or series offering multiple classes of shares) classes of one or
more of the foregoing, the shares of which from time to time shall be
offered by us as principal underwriter to you hereunder and which are
designated by us as such by telephonic or written notice to you. This
Agreement shall apply only to such companies, series or classes so
designated and offered and only such companies, series or classes shall be
considered to be Money Funds.
(c) "Portfolio" shall mean any one of the Fidelity Advisor Funds or Money
Funds.
(d) "Money Fund Shareholders" shall mean shareholders of the Money Funds
who have purchased such shares from you or have acquired shares of a Money
Fund by exchange of shares of a Fidelity Advisor Fund or another Money Fund
pursuant to this Agreement.
2. (a) In all resales to the public of shares of the Portfolios sold to
you by us (i) you shall sell at the applicable public offering price giving
effect, where applicable, to cumulative or quantity discounts or other
purchase programs, plans or services described in the then current
prospectus of the Portfolio whose shares are being resold, (ii) you shall
act as dealer, and (iii) your discount or concession, if any, with respect
to the resale shall be as set forth in the applicable schedule of discounts
or concessions issued by us and in effect at the time of the sale by us to
you of such shares or as set forth in the then current prospectus. Such
discount or concession schedules are subject to change or discontinuance by
us or the Portfolios from time to time as set forth in paragraph 7 below.
(b) In the case of a Portfolio which has adopted a plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 (a "Plan"), we may elect
from time to time to make distribution payments or service payments to you
as provided under such Plan. In the case of a Portfolio that has no
currently effective Plan, we or Fidelity Management & Research Company may
elect to make distribution payments or service payments to you from our own
funds. Any such distribution payments or service payments shall be made in
the amount and manner set forth in the applicable schedule of distribution
payments or service payments issued by us and then in effect or as set
forth in the then current prospectus. Such schedule of distribution
payments or service payments may be changed or discontinued by us from time
to time and shall be in effect with respect to a Portfolio which has a Plan
only so long as such Portfolio's Plan remains in effect.
3. (a) The placing of orders with us shall be governed by instructions
which we shall issue from time to time. Payment for shares shall be made
in New York or Boston Clearing House funds in accordance with such
instructions, but in no event to be received by us later than five business
days (as defined in the Portfolio's current prospectus) after our
acceptance of your order. If such payment is not received by us, we
reserve the right, without notice, forthwith to cancel the sale, or, at our
option, to sell the shares ordered back to the issuing Portfolio, in which
latter case we may hold you responsible for any loss, including loss of
profit, suffered by us as a result of your failure to make payment as
aforesaid.
(b) Certificates evidencing Portfolio shares shall be available only upon
request, and only upon payment for Portfolio shares in accordance with
paragraph 3(a) above. A confirmation statement evidencing purchase,
transfer, redemption, repurchase or sale ("Transaction") of Portfolio
shares shall be transmitted to you. Any Transaction in uncertificated
Portfolio shares, shall be effected and evidenced by book-entry on the
records maintained by Boston Financial Data Services, Inc. or such other
entity as we may appoint from time to time upon notice to you
(collectively, "BFDS").
(c) You designate BFDS to execute customers' Transactions in Portfolio
shares sold to you by us in accordance with the terms and provisions of any
account, program, plan or service established or used by your customers and
to confirm each such Transaction to your customers on your behalf, and at
the time of the Transaction you guarantee the legal capacity of your
customers so transacting in such shares and any co-owners of such shares.
(d) You may instruct BFDS to register shares purchased in your name and
account as nominee for your customers, in which event all prospectuses,
proxy statements, periodic reports and other printed material will be sent
to you and all confirmations and other communications to shareholders will
be transmitted to you. You shall be responsible for forwarding such
printed material, confirmations and communications, or the information
contained therein, to all customers for whom you hold such shares as
nominee. However, we or BFDS on behalf of itself or the Portfolios shall
be responsible for the costs associated with your forwarding such printed
material, confirmations and communications and shall reimburse you in full
for such costs. You shall also be responsible for complying with all
reporting and tax withholding requirements with respect to the customers
for whose account you are holding any shares as nominee. With respect to
customers other than such customers, you shall provide us with all
information (including, without limitation, certification of taxpayer
identification numbers and back-up withholding instructions) necessary or
appropriate for us to comply with legal and regulatory reporting
requirements.
(e) You shall be responsible for determining, in accordance with the then
current prospectus, whether, and the extent to which, a contingent deferred
sales charge is applicable to a purchase of shares from a customer for
whose account you are holding such shares as nominee; and you agree to
present immediately to us any contingent deferred sales charge to which
such purchase was subject. You hereby represent that if you hold shares
subject to such a charge, you have the capability to track and account for
such charge; and we reserve the right, at our discretion, to verify that
capability through inspection of your tracking and accounting system or
otherwise.
4. Upon request, we will furnish you a reasonable number of copies of the
then current prospectus and statement of additional information of each of
the Portfolios and the printed information referred to in paragraph 6 below
issued as supplements thereto.
5. (a) You represent that you are and will remain a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD"),
and agree to abide by all of its rules and regulations including its Rules
of Fair Practice. Reference is hereby specifically made to Section 26,
Article III, of the Rules of Fair Practice of the NASD, which is
incorporated herein as if set forth in full. The termination of your
membership in the NASD or any violation of said Section 26 will immediately
and automatically terminate this Agreement.
(b) We shall not purchase Portfolio shares from the Portfolio except for
the purpose of covering purchase orders already received by us, and you
shall not purchase Portfolio shares from us other than for investment
except for the purpose of covering purchase orders already received by you.
(c) You shall not withhold placing customers' orders for Portfolio shares
so as to profit yourself as a result of such withholding, e.g., by virtue
of a change in the Portfolio's net asset value per share from that used in
determining the offering price to your customers.
(d) We shall not accept a conditional order for Portfolio shares on any
basis other than at a definite specified price.
(e) If, within seven business days after confirmation by us of your
original purchase order for shares of a Fidelity Advisor Fund, such shares
are repurchased by the issuing Fidelity Advisor Fund or by us for the
account of such Fidelity Advisor Fund or are tendered for redemption by the
customer, (i) you shall forthwith refund to us the full discount retained
by, or concession paid to, you on the original sale pursuant to paragraph
2(a) above and any distribution payments or service payments made to you
pursuant to paragraph 2(b) above and (ii) we shall forthwith pay to such
Fidelity Advisor Fund our share of any sales charge on the original sale by
us, and shall also pay such Fidelity Advisor Fund the refund received under
clause (i) when we receive it. You shall refund to the Fidelity Advisor
Fund immediately upon receipt the amount of any dividends or distributions
paid to you as nominee for your customers with respect to redeemed or
repurchased Fidelity Advisor Fund shares to the extent that the proceeds of
such redemption or repurchase may include the dividends or distributions
payable on such shares. In the case of certificated Fidelity Advisor Fund
shares, you shall be notified by us of such repurchase or redemption within
ten days of the date on which a properly executed share certificate and
stock power together with appropriate supporting papers is delivered to us
or to such Fidelity Advisor Fund; and in the case of uncertificated
Fidelity Advisor Fund shares, you shall be notified by us of such
repurchase or redemption within ten days of such repurchase or redemption.
Delivery to BFDS is delivery to the Fidelity Advisor Fund.
(f) In the event any adjustment in the discount retained by, or
concession paid to, you on any sale under paragraph 2(a) or in the
distribution payments or service payments made to you under paragraph 2(b)
shall result in an overpayment by us of such discount, concession or
payment, you shall forthwith remit such overpayment. The term "adjustment"
as used in the preceding sentence shall not include any changes in amounts
paid to, retained by, or due you caused by a change in or discontinuance of
such discounts, concessions, distribution payments or service payments (as
provided under paragraphs 2(a), 2(b) and 7) prior to the effective date of
such change or discontinuance of discounts, concessions, distribution
payments or service payments. You acknowledge that the foregoing shall in
no way limit our right to change or discontinue such discounts,
concessions, distribution payments or service payments as provided in
paragraphs 2 and 7 hereof, and that, after the effective date of a change
in or discontinuance by us of the discount or concession schedules or
distribution payments or service payments or termination of any Plan, any
such discounts or concessions under paragraph 2(a) or distribution payments
or service payments under paragraph 2(b) shall be in amounts and made in
accordance with such change, discontinuation or termination.
(g) Neither we nor you shall, as principal, purchase Portfolio shares
from a record holder at a price lower than the bid price (net asset value
less any applicable contingent deferred sales charge) next quoted by or for
the issuing Portfolio.
6. (a) In all sales of Portfolio shares to the public you shall act as a
dealer for your own account and in no transaction shall you have any
authority to act or hold yourself out as agent for us, or any Portfolio,
and nothing in this Agreement including the use of the words "discount,"
"concession" or "payment," shall cause you to be our partner, employee, or
agent or give you any authority to act for us or for any Portfolio.
Neither we nor any Portfolio shall be liable for any of your acts or
obligations as a dealer under this Agreement.
(b) No person is authorized to make any representations concerning
Portfolio shares except those contained in such Portfolio's then current
prospectus and statement of additional information and in such printed
information subsequently issued to you by us or by the Portfolios as a
supplement to such prospectus and statement of additional information. In
buying shares from us or selling shares to us hereunder, you shall rely
solely on the representations contained in the appropriate prospectus and
statement of additional information and in the supplemental information
referred to in the preceding sentence. We or the Portfolio shall bear the
expense of qualifying Portfolio shares under the securities laws of the
various states. Any printed information which we shall furnish you (other
than the Portfolios' prospectuses, statements of additional information,
periodic reports and supplemental information) is our sole responsibility
and not the responsibility of the respective Portfolios. You agree that
the Portfolios shall have no liability or responsibility to you with
respect to any such printed information. No sales literature or
advertising material (including material disseminated through radio,
television or other electronic media) concerning Portfolio shares, other
than such printed information, shall be used by you in connection with the
offer or sale of Portfolio shares without obtaining our prior written
approval. You shall not distribute or make available to investors any
printed information furnished by us which is marked "FOR DEALER USE ONLY"
or which otherwise indicates that it is confidential or not intended to be
distributed to investors.
(c) You will comply with all applicable state and federal laws and with
the rules and regulations of authorized regulatory agencies thereunder.
You will not offer shares of any Portfolio for sale unless such shares are
duly registered under the applicable state and federal statutes and the
rules and regulations thereunder.
7. All orders are subject to acceptance or rejection by us. We reserve
the right in our discretion, without notice, to suspend sales or to
withdraw the offering of Portfolio shares, in whole or in part, or to make
a limited offering of Portfolio shares. This Agreement, with respect to
any Plan as defined under paragraph 2(b) hereof, shall continue in force
for one year from the effective date, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically subject to termination without penalty at any time if a
majority of a Portfolio's Trustees who are not interested persons of the
Portfolio, as defined in the Investment Company Act of 1940, or a majority
of the outstanding shares of the Portfolio or class thereof, as applicable,
vote to terminate or not to continue such Plan. Either of us may cancel
this Agreement upon telephonic or written notice to the other. Upon
telephonic or written notice to you, we may also change, or amend any
provision of this Agreement. Upon telephonic or written notice to you, we
or any Portfolio may change, amend or discontinue any schedule or schedules
of discounts, concessions, distribution payments or service payments issued
by us from time to time and may issue a new or replacement schedule or
schedules of discounts, concessions, distribution payments or service
payments from time to time. You hereby agree that you shall have no vested
interest in any type, amount or rate of discount, concession, distribution
payment or service payment and that you shall have no claim against us or
any Portfolio by virtue of any change or diminution in the rate or amount
of, or discontinuance of, any discount, concession, distribution payment or
service payment in connection with the shares of any Portfolio.
8. We hereby agree that we shall not use any list of your customers which
may be obtained in connection with this Agreement for the purpose of
solicitation of any product or service without your express written
consent. However, nothing in this paragraph or otherwise shall be deemed
to prohibit or restrict us or our affiliates in any way from solicitations
of any product or service directed at, without limitation, the general
public, any segment thereof, or any specific individual, provided such
solicitation is not based upon such list.
9. You agree, in connection with any Portfolio(s) that offer multiple
classes of shares, (i) to comply with our policies regarding the sale of
classes of shares as provided to you from time to time, and (ii) to
disclose to investors that are eligible to purchase the other class(es) of
such Portfolio(s) (as set forth in the prospectus of the applicable
Portfolio) the availability of such other class(es).
10. Failure of either party to terminate this Agreement upon the
occurrence of any event set forth in this Agreement as a cause for
termination shall not constitute a waiver of the right to terminate this
Agreement at a later time on account of such occurrence.
11. In the event of a dispute, such dispute shall be settled by
arbitration before arbitrators sitting in Boston, Massachusetts in
accordance with the commercial rules then in effect at the National
Association of Securities Dealers, Inc. The arbitrators shall act by
majority decision, and their award may allocate attorneys' fees and
arbitration costs between the parties; such award shall be final and
binding between the parties and judgment thereon may be entered in any
court of competent jurisdiction.
12. All communications to us should be sent to us at our offices, 82
Devonshire Street, Mail Zone L9C, Boston, Massachusetts 02109, Attn: Broker
Dealer Services Group. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below. This Agreement
shall become binding as of the date when it is accepted and dated below by
us. This Agreement will terminate automatically in the event of its
assignment, as defined in the Investment Company Act of 1940. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
13. This Agreement supersedes and cancels all previous agreements between
us, whether oral or written.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity Distributors
Corporation. Upon acceptance, one countersigned copy will be returned to
you for your files.
__________________________________
Name of Firm
Address: ___________________________
__________________________________
__________________________________
By _______________________________
Authorized Representative
__________________________________
Name and Title (please print or type)
CRD # ____________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By ________________________________
Dated _________________
** NOTE: Discard this page and attach Schedule A to Selling Dealer
Agreement **
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion in the Prospectuses and Statements of
Additional Information in Post-Effective Amendment No. 39 to the
Registration Statements on Form N-1A of Daily Money Fund: Money Market
Portfolio and U.S. Treasury Portfolio of our reports dated September 9,
1996 on the financial statements and financial highlights included in the
July 31, 1996 Annual Reports to Shareholders of Daily Money Fund: Money
Market Portfolio and Daily Money Fund: U.S. Treasury Portfolio.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectuses and "Auditor" in the Statements
of Additional Information.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
September 13, 1996
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