FIDELITY(REGISTERED TRADEMARK)
TAX MANAGED STOCK
FUND
SEMIANNUAL REPORT
APRIL 30, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 8 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 11 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 12 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 21 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 25 Notes to the financial
statements.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-6666 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
New indicators of accelerating inflation led to a sharp downturn in
equity markets, as the Dow Jones Industrial Average, NASDAQ and S&P
500(registered trademark) each suffered its worst single-session point
decline in history on April 14. Volatility ruled the remainder of the
month, with equity markets experiencing both strong rallies and broad
sell-offs. Inflation-sensitive Treasuries experienced similar
volatility, as prices for the bellwether 10-year note edged lower
throughout the month.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS (INCLUDING AFTER-TAX RETURNS)
PERIODS ENDED APRIL 30, 2000 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
Pre-Tax Total Returns 8.69% 12.09% 32.61%
FIDELITY TAX MANAGED STOCK
FIDELITY TAX MANAGED STOCK 7.61% 10.97% 31.28%
(INCL. 1.00% TRADING FEE)
After-Tax Total Returns 8.63% 12.02% 32.52%
FIDELITY TAX MANAGED STOCK
(PRE-LIQUIDATION)
FIDELITY TAX MANAGED STOCK 4.59% 6.63% 24.72%
(POST-LIQUIDATION AND INCL.
1.00% TRADING FEE)
S&P 500 (registered trademark) 7.20% 10.13% 33.13%
Growth Funds Average 16.99% 22.75% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six-month, one year or since
the fund started on November 2, 1998. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. For after-tax pre-liquidation
returns, the federal tax rate paid on dividends and short-term capital
gains is calculated assuming a 39.6% tax rate, and taxes are deducted
from distributions prior to reinvestment. The pre-liquidation
after-tax returns assume that you continue to hold your shares. For
after-tax post-liquidation returns, taxes are paid on distributions as
described above and taxes are also paid upon redemption of fund
shares. For shares held for one year or less a 39.6% tax rate is
assumed (including shares purchased by dividend reinvestment). For
shares held for more than one year a 20% tax rate is assumed. State
and local tax rates are not included in this analysis. You can compare
the fund's returns to the performance of the Standard & Poor's 500SM
Index - a market capitalization-weighted index of common stocks. To
measure how the fund's performance stacked up against its peers, you
can compare it to the growth funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 1349
mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and excludes the effect of trading fees and
taxes. Lipper has created new comparison categories that group funds
according to portfolio characteristics and capitalization, as well as
by capitalization only. These averages are listed on page 7 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 2000 PAST 1 YEAR LIFE OF FUND
Pre-Tax Total Returns 12.09% 20.81%
FIDELITY TAX MANAGED STOCK
FIDELITY TAX MANAGED STOCK 10.97% 20.00%
(INCL. 1.00% TRADING FEE)
After-Tax Total Returns 12.02% 20.75%
FIDELITY TAX MANAGED STOCK
(PRE-LIQUIDATION)
FIDELITY TAX MANAGED STOCK 6.63% 15.94%
(POST-LIQUIDATION AND INCL.
1.00% TRADING FEE)
S&P 500 (registered trademark) 10.13% 21.13%
Growth Funds Average 22.75% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Tax Managed Stock Fund S&P 500
00343 SP001
1998/11/02 10000.00 10000.00
1998/11/30 10480.00 10481.75
1998/12/31 11130.00 11085.71
1999/01/31 11510.00 11549.32
1999/02/28 11090.00 11190.36
1999/03/31 11490.00 11638.09
1999/04/30 11830.00 12088.83
1999/05/31 11510.00 11803.42
1999/06/30 12140.00 12458.51
1999/07/31 11810.00 12069.55
1999/08/31 11840.00 12009.81
1999/09/30 11420.00 11680.62
1999/10/31 12200.00 12419.77
1999/11/30 12460.00 12672.26
1999/12/31 13350.76 13418.66
2000/01/31 12599.60 12744.50
2000/02/29 12689.74 12503.25
2000/03/31 13751.39 13726.44
2000/04/28 13260.62 13313.41
IMATRL PRASUN SHR__CHT 20000430 20000518 120936 R00000000000021
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Tax Managed Stock Fund on November 2, 1998, when
the fund started. As the chart shows, by April 30, 2000, the value of
the investment would have grown to $13,261 - a 32.61% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 would have grown to $13,313 - a
33.13% increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a fund
that invests in stocks will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
* THE LIPPER LARGE-CAP CORE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF APRIL 30, 2000, THE SIX MONTH
AND ONE YEAR CUMULATIVE TOTAL RETURNS FOR THE LARGE-CAP CORE FUNDS
AVERAGE WERE 10.79%, AND 14.31%, RESPECTIVELY; AND THE ONE YEAR
AVERAGE ANNUAL TOTAL RETURN WAS 14.31%. THE SIX MONTH AND ONE YEAR
CUMULATIVE TOTAL RETURNS FOR THE LARGE-CAP SUPERGROUP AVERAGE WERE
12.63% AND 16.93%, RESPECTIVELY; AND THE ONE YEAR AVERAGE ANNUAL TOTAL
RETURN WAS 16.93%.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
A prolonged period of market
consistency that fostered seemingly
fixed expectations of rising
technology stocks reversed course
with a sudden change in investor
sentiment during the latter part of the
six-month period that ended April
30, 2000. To wit: After rising to a high
of 5048 on March 10, 2000 the
tech-heavy NASDAQ Composite
Index - the benchmark for new
economy stocks that outperformed
most other domestic equity indexes in
1999 - experienced a pullback in
April. Shortly after experiencing a
10%-20% correction in March, the
NASDAQ sank a full 25% during a
single week in mid-April, dropping
the index to 3321 and hampering its
30.28% return for the period. At the
same time, investors retreated to the
safety of larger companies, such as
those listed in the Standard & Poor's
500SM Index, which ended the
period with a 7.20% return. Another
index of well-established stocks - the
Dow Jones Industrial Average -
surged higher during the NASDAQ's
plummet, but the brief rally wasn't
enough to significantly offset the
blue-chip benchmark's poor returns
earlier in the period, as the Dow
eked out a 0.78% gain. Interest in
stocks of smaller companies followed
a similar pattern to the NASDAQ, as
the Russell 2000(registered trademark) Index - a
barometer of small-cap stocks -
returned a robust 18.72%, but also
experienced monthly declines of more
than 6% in both March and April.
(photograph of Tim Heffernan)
An interview with Tim Heffernan, Portfolio Manager of Fidelity Tax
Managed Stock Fund
Q. HOW DID THE FUND PERFORM, TIM?
A. For the six-month period that ended April 30, 2000, the fund
generated a total return of 8.69%. In comparison, the fund's
benchmark, the Standard & Poor's 500 Index, returned 7.20%. For the
12-month period that ended April 30, 2000, the fund posted a total
return of 12.09%, compared to the S&P 500 index's return of 10.13% for
the same period. The fund also compares its performance to the Lipper
Inc. growth funds average, which returned 16.99% during the past six
months and 22.75% during the past year.
Q. WHAT FACTORS CAUSED THE FUND TO OUTPERFORM THE INDEX, YET LAG ITS
PEER GROUP DURING THE SIX-MONTH PERIOD?
A. The fund outperformed the index during the period on the basis of
good stock selection in a number of sectors. The fund remained
slightly underweighted relative to the index in the utilities sector,
but our holdings in the telecom subsector provided the largest
contribution to total return. An increase in consumer demand for
wireless technology drove cellular services and wireless manufacturing
stocks - such as Nokia and Ericsson - higher during the period. Merger
and acquisition activity in telecom - as in the case of Vodafone
AirTouch acquiring Mannesmann - also fueled returns. The fund remained
underweighted in the basic industries sector, but the positions we
held outperformed the index by 22%. Specifically, the fund benefited
by not owning S&P underperformers DuPont and International Paper,
while being overweighted in Corning and Alcoa, which did quite well.
While I can't be sure what other funds were holding, I suspect many of
them were more heavily weighted with technology stocks than the fund
was, enabling the Lipper average to post a higher return.
Q. STILL, THE FUND'S LARGEST SECTOR WEIGHTING CONTINUED TO BE
TECHNOLOGY. HOW DID THESE STOCKS PERFORM?
A. In conjunction with the demand for wireless communications, many of
the fund's technology positions that produce the internal components
for wireless handsets, such as Texas Instruments, performed well.
While the fund remained slightly underweighted in technology during
the period, strong stock selection helped the fund's technology
positions outperform those in the index by 4%. The fund's holdings in
companies involved in the build-out of the Internet infrastructure -
such as Cisco, Intel, Oracle and EMC - stood out as top contributors.
In the fourth quarter of 1999, these stocks rallied as investors
perceived them to be the backbone of the new economy. Toward the end
of the period, however, a correction in technology stocks caused by
increasing signs of inflation, higher interest rates and warnings of
overvaluations hurt performance. The fund's diversification in
selected financials, such as Morgan Stanley Dean Witter and American
Express, and various energy stocks, such as TotalFinaElf, kept it from
experiencing the volatile swings associated with technology stocks as
the period drew to a close.
Q. WHICH SPECIFIC STOCKS WERE TOP PERFORMERS?
A. Internet networking products maker Cisco, the fund's second-largest
holding at the end of the period, was the fund's top contributor. As
part of an effort to capture more business with telecom carriers, the
company announced a number of business alliances during the period,
including a reported multi-billion dollar deal to become the preferred
provider of data networking equipment to local phone carrier SBC
Communications. Another top contributor - Intel - benefited from
strong demand for semiconductors and personal computers.
Q. WHAT WERE SOME OF THE DISAPPOINTMENTS?
A. Ongoing negative developments in the federal government's antitrust
case against Microsoft hampered the fund's total return. Shares of
Microsoft fell more than 20% during the period. The fund's position in
household products provider Procter & Gamble also detracted from
overall performance in response to a negative earnings announcement
that was in part due to higher operating costs.
Q. WHAT'S YOUR OUTLOOK, TIM?
A. I remain cautiously optimistic about the next six months. There are
signs that potential inflation in the rapidly growing U.S. economy may
be realized and, if so, the Federal Reserve Board's persistent
interest-rate hikes could impact the equity markets even more than
they already did toward the end of this period. In this economic
environment, it is prudent to remain invested in a diversified range
of companies with strong earnings prospects, sound fundamentals and
reasonable valuations.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: seeks long-term growth
of capital by investing mainly
in equity securities and
attempting to reduce the
impact of federal taxes on
shareholder investment
returns
FUND NUMBER: 343
TRADING SYMBOL: FTXMX
START DATE: November 2,
1998
SIZE: as of April 30, 2000,
more than $90 million
MANAGER: Tim Heffernan,
since inception; manager,
Fidelity Congress Street and
Exchange Funds, since
1997; various institutional
funds for Fidelity
Management Trust Company,
1992-1996; joined Fidelity
in 1984
TIM HEFFERNAN ON THE IMPACT
OF FEDERAL TAXES ON THE FUND'S
RETURN AND HARVESTING LOSSES:
"Managing capital gains and
losses is an integral part of the
tax-sensitive investment strategy.
Although some investors may view
capital losses as undesirable, they
are an important component of
the tax-sensitive investment
process. For example, research
downgrades may make a security no
longer attractive and the ensuing
sale of this security will result in
capital gains. At this time, the
fund will seek to capture the
opportunity to sell some tax lots of
a specific stock at a capital loss to
offset the capital gain. To make a
realistic assessment of the taxes
associated with capital gains, each
tax lot - a way to identify a security
by date and purchase price - is
considered a separate holding.
Therefore, when I sell, I choose
not only which stock to sell, but
also which tax lots of each stock to
sell.
"Since realized losses of this nature
can be carried forward for up to
eight years, I view losses as
increasing my flexibility to do two
things. First, losses enable me to
sell other stocks in the portfolio
that are no longer attractive, but
that have significant gains and a
large tax liability that would
otherwise make them too costly to
sell. Losses can be used to offset
realized gains and the proceeds
from a sale can be used to buy a
more attractive stock. The net effect
of this transaction leads to a lower
distribution of capital gains.
"Second, losses give me the
opportunity to sell a tax lot of a
specific stock with a large
embedded gain, raising the cost
basis of the portfolio's entire
position in the stock while
reducing the tax liability."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS BY ISSUER AS
OF APRIL 30, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Electric Co. 4.3 4.9
Cisco Systems, Inc. 4.0 2.8
Intel Corp. 3.4 1.8
Microsoft Corp. 2.6 4.6
Wal-Mart Stores, Inc. 2.2 1.5
Citigroup, Inc. 2.2 2.6
Vodafone AirTouch PLC 2.0 2.1
American International Group, 2.0 1.4
Inc.
Time Warner, Inc. 1.9 1.5
AT&T Corp. 1.8 2.0
26.4 25.2
TOP FIVE MARKET SECTORS AS OF
APRIL 30, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 33.5 21.1
Finance 12.7 16.5
Utilities 9.5 11.7
Health 9.2 11.0
Energy 7.2 8.2
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF APRIL 30, 2000 * AS OF OCTOBER 31, 1999 **
Stocks 100.2% Stocks 98.9%
Short-Term Investments and Short-Term Investments and
Net Other Assets (0.2)% A Net Other Assets 1.1%
* FOREIGN INVESTMENTS 8.8% ** FOREIGN INVESTMENTS 7.5%
Row: 1, Col: 1, Value: 100.2 Row: 1, Col: 1, Value: 98.90000000000001
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: nil
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 0.0 Row: 1, Col: 8, Value: 1.1
</TABLE>
A SHORT-TERM INVESTMENTS AND NET OTHER ASSETS ARE NOT INCLUDED IN THE
PIE CHART.
INVESTMENTS APRIL 30, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 100.2%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.9%
Alliant Techsystems, Inc. (a) 3,900 $ 271,538
Boeing Co. 6,400 254,000
Honeywell International, Inc. 6,500 364,000
Textron, Inc. 8,100 501,694
United Technologies Corp. 5,600 348,250
1,739,482
BASIC INDUSTRIES - 2.5%
CHEMICALS & PLASTICS - 1.3%
Dow Chemical Co. 2,800 316,400
E.I. du Pont de Nemours and 11,600 550,275
Co.
Praxair, Inc. 3,000 133,313
Union Carbide Corp. 2,900 171,100
1,171,088
METALS & MINING - 0.6%
Alcoa, Inc. 9,300 603,338
PAPER & FOREST PRODUCTS - 0.6%
Champion International Corp. 2,400 157,800
Kimberly-Clark Corp. 6,700 389,019
546,819
TOTAL BASIC INDUSTRIES 2,321,245
CONSTRUCTION & REAL ESTATE -
0.3%
CONSTRUCTION - 0.3%
Centex Corp. 12,100 291,913
DURABLES - 1.1%
AUTOS, TIRES, & ACCESSORIES -
0.4%
General Motors Corp. 3,800 355,775
CONSUMER DURABLES - 0.3%
Minnesota Mining & 3,200 276,800
Manufacturing Co.
CONSUMER ELECTRONICS - 0.2%
Black & Decker Corp. 3,800 159,838
HOME FURNISHINGS - 0.2%
Leggett & Platt, Inc. 9,600 205,200
TOTAL DURABLES 997,613
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - 7.2%
ENERGY SERVICES - 0.2%
Schlumberger Ltd. 2,400 $ 183,750
OIL & GAS - 7.0%
Amerada Hess Corp. 6,100 388,113
Anadarko Petroleum Corp. 4,600 199,813
Chevron Corp. 2,700 229,838
Exxon Mobil Corp. 20,204 1,569,598
Royal Dutch Petroleum Co. (NY 19,800 1,136,025
Shares)
Sunoco, Inc. 17,500 530,469
The Coastal Corp. 3,100 155,581
Tosco Corp. 6,200 198,788
TotalFinaElf SA sponsored ADR 18,137 1,371,611
Vastar Resources, Inc. 7,700 620,813
6,400,649
TOTAL ENERGY 6,584,399
FINANCE - 12.7%
BANKS - 2.5%
Bank of America Corp. 10,100 494,900
Bank of New York Co., Inc. 6,800 279,225
Bank One Corp. 11,600 353,800
Chase Manhattan Corp. 5,900 425,169
Firstar Corp. 5,600 139,300
Wells Fargo & Co. 14,000 574,875
2,267,269
CREDIT & OTHER FINANCE - 3.6%
American Express Co. 3,300 495,206
Associates First Capital 20,000 443,750
Corp. Class A
Citigroup, Inc. 33,150 1,970,353
Providian Financial Corp. 3,700 325,831
3,235,140
FEDERAL SPONSORED CREDIT - 0.6%
Fannie Mae 5,500 331,719
Freddie Mac 3,900 179,156
510,875
INSURANCE - 4.5%
AMBAC Financial Group, Inc. 7,600 364,800
American International Group, 16,725 1,834,523
Inc.
CIGNA Corp. 11,000 877,250
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Hartford Financial Services 7,700 $ 401,844
Group, Inc.
Hartford Life, Inc. Class A 3,400 167,450
MBIA, Inc. 6,700 331,231
UnumProvident Corp. 8,100 137,700
4,114,798
SECURITIES INDUSTRY - 1.5%
Charles Schwab Corp. 7,400 329,300
Lehman Brothers Holdings, 1,800 147,713
Inc.
Merrill Lynch & Co., Inc. 3,200 326,200
Morgan Stanley Dean Witter & 7,800 598,650
Co.
1,401,863
TOTAL FINANCE 11,529,945
HEALTH - 9.2%
DRUGS & PHARMACEUTICALS - 5.6%
American Home Products Corp. 8,500 477,594
Amgen, Inc. (a) 8,900 498,400
Bristol-Myers Squibb Co. 12,100 634,494
Eli Lilly & Co. 16,000 1,237,000
Pfizer, Inc. 22,900 964,663
Schering-Plough Corp. 13,500 544,219
Warner-Lambert Co. 6,500 739,781
5,096,151
MEDICAL EQUIPMENT & SUPPLIES
- 3.3%
Abbott Laboratories 14,100 541,969
Baxter International, Inc. 12,400 807,550
Cardinal Health, Inc. 8,900 490,056
Edwards Lifesciences Corp. (a) 980 14,700
Johnson & Johnson 9,800 808,500
Medtronic, Inc. 5,720 297,083
2,959,858
MEDICAL FACILITIES MANAGEMENT
- 0.3%
UnitedHealth Group, Inc. 4,100 273,419
TOTAL HEALTH 8,329,428
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.7%
ELECTRICAL EQUIPMENT - 4.7%
Emerson Electric Co. 7,300 $ 400,588
General Electric Co. 24,700 3,884,058
4,284,646
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.0%
Caterpillar, Inc. 9,800 386,488
Illinois Tool Works, Inc. 4,800 307,500
Ingersoll-Rand Co. 4,800 225,300
919,288
TOTAL INDUSTRIAL MACHINERY & 5,203,934
EQUIPMENT
MEDIA & LEISURE - 6.0%
BROADCASTING - 4.3%
AT&T Corp. - Liberty Media 11,888 593,657
Group Class A (a)
CBS Corp. (a) 13,400 787,250
Clear Channel Communications, 6,200 446,400
Inc. (a)
MediaOne Group, Inc. (a) 4,800 363,000
Time Warner, Inc. 19,500 1,753,781
3,944,088
ENTERTAINMENT - 0.8%
Carnival Corp. 10,700 266,163
Viacom, Inc. Class B 3,200 174,000
(non-vtg.) (a)
Walt Disney Co. 7,500 324,844
765,007
PUBLISHING - 0.3%
McGraw-Hill Companies, Inc. 4,400 231,000
RESTAURANTS - 0.6%
McDonald's Corp. 7,800 297,375
Outback Steakhouse, Inc. (a) 6,800 222,700
520,075
TOTAL MEDIA & LEISURE 5,460,170
NONDURABLES - 3.4%
BEVERAGES - 1.1%
Anheuser-Busch Companies, 3,700 261,081
Inc.
Coca-Cola Enterprises, Inc. 6,700 142,794
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
BEVERAGES - CONTINUED
Seagram Co. Ltd. 3,700 $ 194,520
The Coca-Cola Co. 9,000 423,563
1,021,958
FOODS - 0.7%
Keebler Foods Co. 11,700 367,819
Nabisco Group Holdings Corp. 16,800 216,300
584,119
HOUSEHOLD PRODUCTS - 1.1%
Avon Products, Inc. 4,800 199,200
Gillette Co. 13,300 492,100
Procter & Gamble Co. 5,200 310,050
1,001,350
TOBACCO - 0.5%
Philip Morris Companies, Inc. 22,400 490,000
TOTAL NONDURABLES 3,097,427
PRECIOUS METALS - 0.1%
Newmont Mining Corp. 5,500 128,906
RETAIL & WHOLESALE - 6.0%
APPAREL STORES - 0.6%
Gap, Inc. 9,500 349,125
The Limited, Inc. 4,500 203,344
552,469
DRUG STORES - 0.3%
Walgreen Co. 9,900 278,438
GENERAL MERCHANDISE STORES -
2.6%
Target Corp. 5,400 359,438
Wal-Mart Stores, Inc. 36,500 2,021,188
2,380,626
GROCERY STORES - 0.8%
Kroger Co. (a) 13,900 258,019
Safeway, Inc. (a) 9,100 401,538
659,557
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.7%
Best Buy Co., Inc. (a) 3,600 290,700
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - CONTINUED
Home Depot, Inc. 18,800 $ 1,053,975
Lowe's Companies, Inc. 4,500 222,750
1,567,425
TOTAL RETAIL & WHOLESALE 5,438,515
SERVICES - 0.5%
ACNielsen Corp. (a) 19,300 445,106
TECHNOLOGY - 33.5%
COMMUNICATIONS EQUIPMENT - 9.9%
ADC Telecommunications, Inc. 4,400 267,300
(a)
Cisco Systems, Inc. (a) 52,000 3,605,063
Corning, Inc. 2,700 533,250
Lucent Technologies, Inc. 23,800 1,480,063
Nokia AB sponsored ADR 18,400 1,046,500
Nortel Networks Corp. 9,900 1,119,165
Telefonaktiebolaget LM 10,500 928,594
Ericsson sponsored ADR
8,979,935
COMPUTER SERVICES & SOFTWARE
- 7.5%
America Online, Inc. (a) 6,000 358,875
Ceridian Corp. (a) 7,900 171,331
Citrix Systems, Inc. (a) 4,400 268,675
Computer Associates 5,700 318,131
International, Inc.
Computer Sciences Corp. (a) 3,900 318,094
DST Systems, Inc. (a) 5,300 393,194
Electronic Data Systems Corp. 3,700 254,375
Electronics for Imaging, Inc. 2,600 135,850
(a)
First Data Corp. 3,800 185,013
Microsoft Corp. (a) 34,100 2,378,475
Oracle Corp. (a) 20,300 1,622,731
Unisys Corp. (a) 6,200 143,763
VERITAS Software Corp. (a) 2,600 278,891
6,827,398
COMPUTERS & OFFICE EQUIPMENT
- 7.9%
CDW Computer Centers, Inc. (a) 1,800 187,200
Compaq Computer Corp. 11,200 327,600
Dell Computer Corp. (a) 19,200 962,400
EMC Corp. (a) 11,400 1,583,888
Gateway, Inc. (a) 4,700 259,675
Hewlett-Packard Co. 8,100 1,093,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- CONTINUED
International Business 12,900 $ 1,439,963
Machines Corp.
SCI Systems, Inc. (a) 5,600 298,200
Sun Microsystems, Inc. (a) 11,600 1,066,475
7,218,901
ELECTRONIC INSTRUMENTS - 0.5%
Applied Materials, Inc. (a) 4,300 437,794
ELECTRONICS - 7.7%
Analog Devices, Inc. (a) 5,800 445,513
Cree Research, Inc. (a) 1,300 189,150
Intel Corp. 24,700 3,132,269
Linear Technology Corp. 2,600 148,525
Micron Technology, Inc. (a) 2,400 334,200
Motorola, Inc. 7,100 845,344
Sanmina Corp. (a) 2,800 168,175
Texas Instruments, Inc. 7,400 1,205,275
Tyco International Ltd. 11,900 546,656
7,015,107
TOTAL TECHNOLOGY 30,479,135
TRANSPORTATION - 0.6%
AIR TRANSPORTATION - 0.3%
AMR Corp. 3,800 129,438
SkyWest, Inc. 3,300 139,013
268,451
RAILROADS - 0.3%
Burlington Northern Santa Fe 12,000 289,500
Corp.
TOTAL TRANSPORTATION 557,951
UTILITIES - 9.5%
CELLULAR - 3.7%
Nextel Communications, Inc. 5,100 558,131
Class A (a)
QUALCOMM, Inc. (a) 4,900 531,344
Sprint Corp. - PCS Group 7,700 423,500
Series 1 (a)
Vodafone AirTouch PLC 188,686 886,825
Vodafone AirTouch PLC 20,250 951,750
sponsored ADR
3,351,550
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.2%
AES Corp. (a) 2,100 $ 188,869
TELEPHONE SERVICES - 5.6%
AT&T Corp. 23,715 1,107,194
BellSouth Corp. 16,300 793,606
MCI WorldCom, Inc. (a) 18,800 854,225
McLeodUSA, Inc. Class A (a) 25,500 637,500
SBC Communications, Inc. 26,906 1,178,819
Sprint Corp. - FON Group 5,100 313,650
U.S. WEST, Inc. 2,400 170,850
5,055,844
TOTAL UTILITIES 8,596,263
TOTAL COMMON STOCKS 91,201,432
(Cost $73,821,624)
U.S. TREASURY OBLIGATIONS -
0.1%
PRINCIPAL AMOUNT
U.S. Treasury Bills, yield at $ 100,000 99,229
date of purchase 5.67% to
5.8% 5/11/00 to 7/13/00
(Cost $99,190)
CASH EQUIVALENTS - 3.8%
SHARES
Taxable Central Cash Fund, 3,421,622 3,421,622
5.77% (b) (Cost $3,421,622)
TOTAL INVESTMENT PORTFOLIO - 94,722,283
104.1%
(Cost $77,342,436)
NET OTHER ASSETS - (4.1)% (3,731,530)
NET ASSETS - 100% $ 90,990,753
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
INCOME TAX INFORMATION
At April 30, 2000, the aggregate cost
of investment securities for income tax purposes was $77,347,719. Net
unrealized appreciation aggregated $17,374,564, of which $19,965,640
related to appreciated investment securities and $2,591,076 related to
depreciated investment securities.
At October 31, 1999, the fund had a capital loss carryforward of
approximately $2,211,000 all of which will expire on October 31, 2007.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 94,722,283
value (cost $77,342,436) -
See accompanying schedule
Receivable for investments 9,748,120
sold
Receivable for fund shares 20,600
sold
Dividends receivable 61,224
Interest receivable 10,345
Redemption fees receivable 239
TOTAL ASSETS 104,562,811
LIABILITIES
Payable for investments $ 13,478,050
purchased
Payable for fund shares 23,983
redeemed
Accrued management fee 43,341
Other payables and accrued 26,684
expenses
TOTAL LIABILITIES 13,572,058
NET ASSETS $ 90,990,753
Net Assets consist of:
Paid in capital $ 79,017,282
Distributions in excess of (90,967)
net investment income
Accumulated undistributed net (5,313,522)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 17,377,960
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 6,874,350 $ 90,990,753
shares outstanding
NET ASSET VALUE, offering $13.24
price and redemption price
per share ($90,990,753
(divided by) 6,874,350
shares) A
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE REDEMPTION FEE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
2000 (UNAUDITED)
INVESTMENT INCOME $ 349,963
Dividends
Interest 49,137
TOTAL INCOME 399,100
EXPENSES
Management fee $ 233,743
Transfer agent fees 52,886
Accounting fees and expenses 30,098
Non-interested trustees' 114
compensation
Custodian fees and expenses 3,744
Registration fees 25,727
Audit 8,863
Legal 84,322
Miscellaneous 140
Total expenses before 439,637
reductions
Expense reductions (1,073) 438,564
NET INVESTMENT INCOME (LOSS) (39,464)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (3,003,534)
Futures contracts (68,852) (3,072,386)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 9,368,377
Assets and liabilities in (1,887) 9,366,490
foreign currencies
NET GAIN (LOSS) 6,294,104
NET INCREASE (DECREASE) IN $ 6,254,640
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED APRIL 30, NOVEMBER 2, 1998
2000 (UNAUDITED) (COMMENCEMENT OF OPERATIONS)
TO OCTOBER 31, 1999
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (39,464) $ 63,031
income (loss)
Net realized gain (loss) (3,072,386) (2,241,083)
Change in net unrealized 9,366,490 8,011,470
appreciation (depreciation)
NET INCREASE (DECREASE) IN 6,254,640 5,833,418
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (62,883) -
From net investment income
In excess of net investment (51,503) -
income
TOTAL DISTRIBUTIONS (114,386) -
Share transactions Net 22,649,314 66,012,558
proceeds from sales of shares
Reinvestment of distributions 104,431 -
Cost of shares redeemed (6,588,873) (3,257,220)
NET INCREASE (DECREASE) IN 16,164,872 62,755,338
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 65,025 31,846
TOTAL INCREASE (DECREASE) 22,370,151 68,620,602
IN NET ASSETS
NET ASSETS
Beginning of period 68,620,602 -
End of period (including $ 90,990,753 $ 68,620,602
under (over) distribution
of net investment income of
$(90,967) and $63,084,
respectively)
OTHER INFORMATION
Shares
Sold 1,752,146 5,907,770
Issued in reinvestment of 8,133 -
distributions
Redeemed (509,701) (283,998)
Net increase (decrease) 1,250,578 5,623,772
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED APRIL 30, 2000 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1999 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.20 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.01) .02
Net realized and unrealized 1.06 2.17
gain (loss)
Total from investment 1.05 2.19
operations
Less Distributions
From net investment income (.01) -
In excess of net investment (.01) -
income
Total distributions (.02) -
Redemption fees added to paid .01 .01
in capital
Net asset value, end of period $ 13.24 $ 12.20
TOTAL RETURN B, C 8.69% 22.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 90,991 $ 68,621
(000 omitted)
Ratio of expenses to average 1.10% A 1.11% A
net assets
Ratio of expenses to average 1.10% A 1.10% A, F
net assets after expense
reductions
Ratio of net investment (.10)% A .14% A
income to average net assets
Portfolio turnover rate 58% A 32% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 2, 1998 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1999.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Tax Managed Stock Fund (the fund) is a fund of Fidelity
Beacon Street Trust (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company organized as a Massachusetts business trust. The
financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make
certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange) are valued primarily using dealer-supplied valuations or at
their fair value. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES - CONTINUED
that it distributes substantially all of its taxable income for its
fiscal year. The schedule of investments includes information
regarding income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
TRADING (REDEMPTION) FEES. Shares held in the fund less than 2 years
are subject to a trading fee equal to 1.00% of the proceeds of the
redeemed shares. The fee, which is retained by the fund, is accounted
for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT - CONTINUED
balances into one or more joint trading accounts. These balances are
invested in one or more repurchase agreements for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
or other obligations found to be satisfactory by FMR are transferred
to an account of the fund, or to the Joint Trading Account, at a bank
custodian. The securities are marked-to-market daily and maintained at
a value at least equal to the principal amount of the repurchase
agreement (including accrued interest). FMR, the fund's investment
adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income. Income distributions from the Cash Fund
are declared daily and paid monthly from net interest income. Income
distributions earned by the fund are recorded as interest income in
the accompanying financial statements.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Losses may arise from changes in the value of the underlying
instruments or if the counterparties do not perform under the
contracts' terms. Gains (losses) are realized upon the expiration or
closing of the futures contracts. Futures contracts are valued at the
settlement price established each day by the board of trade or
exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $39,767,569 and $22,836,037, respectively.
The market value of futures contracts opened and closed during the
period amounted to $8,219,173 and $8,150,321, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
FMR. The rates ranged from .2167% to .5200% for the period. The annual
individual fund fee rate is .30%. In the event that these rates were
lower than the contractual rates in effect during the period, FMR
voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. For the period, the management fee was
equivalent to an annualized rate of .58% of average net assets.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annualized rate of .13% of average net assets.
ACCOUNTING FEES. FSC, maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $712 for the period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $1,073 under this arrangement.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity Automated Service Telephone provides a single toll-free
number to access account balances, positions, quotes and trading. It's
easy to navigate the service, and on your first call, the system will
help you create a personal identification number (PIN) for security.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE (FAST(registered trademark))
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-0240 or visit our web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A
GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT
MONEY MARKET FUNDS WILL BE
ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED
OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE
PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF
ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
8 Montgomery Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
Three Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 Old N. Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72nd Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
RHODE ISLAND
47 Providence Place
Providence, RI
TENNESSEE
6150 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
1861 International Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Robert A. Lawrence, Vice President
Tim Heffernan, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Michael Cook
Abigail P. Johnson
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
TMG-SANN-0600 103562
1.719931.101
CUSTODIAN
State Street Bank and Trust Company
Quincy, MA
FIDELITY'S GROWTH FUNDS
Aggressive Growth Fund
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund(registered trademark)
Contrafund(registered trademark) II
Disciplined Equity Fund
Dividend Growth Fund
Export and Multinational Fund
Fidelity FiftySM
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium Fund(registered trademark)
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
Tax Managed Stock Fund
TechnoQuant(registered trademark) Growth Fund
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST(registered trademark)) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDLEITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
