SUPPLEMENT TO DAILY MONEY FUND
U. S. TREASURY PORTFOLIO: CLASS B
DECEMBER 20, 1996
STATEMENT OF ADDITIONAL INFORMATION
EFFECTIVE JANUARY 2, 1997, CLASS B SHARES OF THE FUND MAY, UPON
REDEMPTION, BE ASSESSED A CONTINGENT DEFERRED SALES CHARGE (CDSC) BASED ON
THE FOLLOWING SCHEDULE:
From Date of Purchase Contingent
Deferred
Sales Charge
Less than 1 year 5%
1 year to less than 2 years 4%
2 years to less than 3 years 3%
3 years to less than 4 years 3%
4 years to less than 5 years 2%
5 years to less than 6 years 1%
6 years to less than seven years A 0%
A AFTER A MAXIMUM HOLDING PERIOD OF SEVEN 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 4.00% of the amount of your
direct purchase of Class B shares.
EFFECTIVE MAY 9, 1997, THE FOLLOWING INFORMATION REPLACES SIMILAR
INFORMATION FOUND IN "ADDITIONAL PURCHASE, EXCHANGE, AND REDEMPTION
INFORMATION" ON PAGE 9.
CLASS B WAIVERS. The contingent deferred sales charge (CDSC) on Advisor
Class B shares may be waived (1) in the case of disability or
death, provided that the redemption is made within one year following the
death or initial determination of disability, (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, or (3) in connection with
redemptions through the Fidelity Advisor Systematic Withdrawal
Program.
EFFECTIVE MAY 9, 1997, THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION
FOUND IN "ADDITIONAL PURCHASE, EXCHANGE, AND REDEMPTION INFORMATION" ON
PAGE 9.
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM. If you own Class B shares
worth $10,000 or more you can have monthly or quarterly checks sent from
your account to you, to a person named by you, or to your bank checking
account. Aggregate redemptions per twelve month period from your Class B
account may not exceed 10% of the value of the account and are not subject
to a CDSC; and you may set your withdrawal amount as a percentage of the
value of your account or a fixed dollar amount. Your Systematic Withdrawal
Program payments are drawn from Class B share redemptions. If Systematic
Withdrawal Plan redemptions exceed income dividends earned on your shares,
your account eventually may be exhausted.
THE FOLLOWING INFORMATION HAS BEEN ELIMINATED FROM "MANAGEMENT CONTRACTS"
ON PAGE 14.
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.
SUPPLEMENT TO THE
DAILY MONEY FUND
U.S. TREASURY PORTFOLIO - CLASS B
DECEMBER 20, 1996 PROSPECTUS
SHAREHOLDER MEETING. On May 9, 1997 a meeting of the shareholders of U.S.
Treasury Portfolio will be held to approve changes to the fund's expense
structure including approval of: (a) an amended Management Contract; (b) a
new Distribution and Service Plan for the Initial Class of the fund; and
(c) a new Distribution and Service Plan for Class B of the fund. If
shareholders approve the proposed changes to the fund's expense structure,
the amended Management Contract and new Distribution and Service Plans will
become effective on May 31, 1997. The proposed changes to the fund's
expense structure, if approved, will reduce the management fee rate paid by
the fund from 0.50% to 0.25%. For Initial Class shareholders the proposed
management fee rate reduction will be offset by the addition of a 0.25%
distribution fee. For Class B shareholders, the proposed management fee
rate reduction will be offset by a restructuring of the current
distribution fee arrangement. FMR currently pays part of Class B's 0.75%
distribution fee from its management fee. Under the new Class B
Distribution and Service Plan, Class B will pay the entire 0.75%
distribution fee and the 0.25% shareholder service fee will remain
unchanged.
A copy of the proxy statement may be obtained free of charge by calling
1-800-843-3001.
The following information replaces similar information found in "Who May
Want to Invest" on page P-3.
The fund is composed of two classes of shares. Both classes of the fund
have 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. Performance of one class of shares of the fund may be
different from the performance of another class of shares of the fund
because of different sales charges and class expenses. For example, 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.
The following information replaces similar information found in "Expenses"
on page P-3.
Maximum CDSC (as a % of the lesser 5.00
of original purchase price or redemption proceeds) A
Maximum sales charge on reinvested distributions Non
e
Redemption fee Non
e
Exchange fee Non
e
A DECLINES OVER 6 YEARS FROM 5.00% TO 0%.
The following information replaces similar information found in "Expenses"
on page P-4.
EXPENSE TABLE EXAMPLE: You would pay the following expenses, including the
maximum front-end sales charge or CDSC, as applicable, on a $1,000
investment, assuming a 5% annual return and either (1) full redemption or
(2) no redemption, at the end of each time period:
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.
1 Year 3 5 10
Years Years Years
B
(1) $ 64A $ 74A $ 97A $ 129
(2) $ 14 $ 44 $ 77 $ 129
A REFLECTS DEDUCTION OF APPLICABLE CDSC.
B REFLECTS CONVERSION TO INITIAL CLASS SHARES AFTER SEVEN YEARS.
Effective May 9, 1997, the following information supplements information
found in "How to Buy Shares" on page P-11.
PURCHASE AMOUNTS OF MORE THAN $250,000 WILL NOT BE ACCEPTED FOR CLASS B
SHARES.
Effective May 9, 1997, the following information supplements information
found in "Investor Services" on page P-14.
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM lets you set up periodic
redemptions from your Class B account. Accounts with a value of $10,000 or
more in Class B shares are eligible for this program. Aggregate redemptions
per twelve month period from your Class B account may not exceed 10% of the
account value and are not subject to a CDSC.
The following information replaces similar information found in
"Transaction Details" on page P-16.
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 5%
1 year to less than 4%
2 years
2 years to less than 3%
3 years
3 years to less than 3%
4 years
4 years to less than 2%
5 years
5 years to less than 1%
6 years
6 years to less than 0%
seven years A
A AFTER A MAXIMUM HOLDING PERIOD OF SEVEN 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 4.00% of the amount of your
direct purchase of Class B shares.
CONVERSION FEATURE. After a maximum holding per iod of seven 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.
Effective May 9, 1997, the following information replaces similar
information found in "Transaction Details" on page P-17.
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 reinvest ment is made within 90
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.
Effective May 9, 1997, the following information replaces similar
information found in "Sales Charge Reductions and Waivers" on page P-19.
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;
2. In connection with a total or partial redemption related to
certain distributions from retirement plans or accounts; or
3. In connection with redemptions through the Fidelity Advisor Systematic
Withdrawal Program.
